[NOTE January 20, 2006]{.underline}: These bylaws constitute the form of
bylaws the bylaws work group will recommend to the Grid West Board for
adoption if the Grid West development process moves forward. The only
additions needed are:

-   dates related to the first biannual members' meeting (in
    Sections 5.8, 5.9.2, and 6.3.4)

-   a list of initial members for Attachment B.

NOTE TO SARAH -- make sure to incorporate final meeting date revisions;
double-check carry-over notes

BYLAWS

FOR

GRID WEST

TABLE OF CONTENTS

[Article I General Provisions 1](#__RefHeading___Toc124341831)

[1.1 Defined Terms 1](#__RefHeading___Toc124341832)

[1.1.1 Affiliate 1](#__RefHeading___Toc124341833)

[1.1.2 Articles of Incorporation 1](#__RefHeading___Toc124341834)

[1.1.3 Bylaws Dispute Resolution Provisions
2](#__RefHeading___Toc124341835)

[1.1.4 Board of Directors 2](#__RefHeading___Toc124341836)

[1.1.5 Certain Public Interest Group 2](#__RefHeading___Toc124341837)

[1.1.6 Consumer Advocate 2](#__RefHeading___Toc124341838)

[1.1.7 Corporation 2](#__RefHeading___Toc124341839)

[1.1.8 Director 2](#__RefHeading___Toc124341840)

[1.1.9 Disputing Party 2](#__RefHeading___Toc124341841)

[1.1.10 End-Use Consumer 3](#__RefHeading___Toc124341842)

[1.1.11 FERC 3](#__RefHeading___Toc124341843)

[1.1.12 FPA 3](#__RefHeading___Toc124341844)

[1.1.13 Generator 3](#__RefHeading___Toc124341845)

[1.1.14 Generators, Power Marketers, Large Generating End-Use Consumers,
and Others 4](#__RefHeading___Toc124341846)

[1.1.15 Geographic Area 5](#__RefHeading___Toc124341847)

[1.1.16 Governmental Committee 5](#__RefHeading___Toc124341848)

[1.1.17 Grid West Basic Features 5](#__RefHeading___Toc124341849)

[1.1.18 Grid West Website 5](#__RefHeading___Toc124341850)

[1.1.19 Indemnitee 5](#__RefHeading___Toc124341851)

[1.1.20 Independent Transmission Company
6](#__RefHeading___Toc124341852)

[1.1.21 Interim Board 6](#__RefHeading___Toc124341853)

[1.1.22 Large Bundled End-Use Consumer 6](#__RefHeading___Toc124341854)

[1.1.23 Large Generating End-Use Consumer
6](#__RefHeading___Toc124341855)

[1.1.24 Large TDU 7](#__RefHeading___Toc124341856)

[1.1.25 Large Unbundled End-Use Consumer
8](#__RefHeading___Toc124341857)

[1.1.26 Major Transmitting Utility 9](#__RefHeading___Toc124341858)

[1.1.27 Market Participant 10](#__RefHeading___Toc124341859)

[1.1.28 Member 10](#__RefHeading___Toc124341860)

[1.1.29 Member Class 10](#__RefHeading___Toc124341861)

[1.1.30 Member Sub-Class 10](#__RefHeading___Toc124341862)

[1.1.31 Members Representative Committee or MRC
10](#__RefHeading___Toc124341863)

[1.1.32 NWPCC 10](#__RefHeading___Toc124341864)

[1.1.33 Participating Jurisdiction 10](#__RefHeading___Toc124341865)

[1.1.34 Person 10](#__RefHeading___Toc124341866)

[1.1.35 Power Marketer 10](#__RefHeading___Toc124341867)

[1.1.36 Proceeding 10](#__RefHeading___Toc124341868)

[1.1.37 RCW 10](#__RefHeading___Toc124341869)

[1.1.38 Related Person 10](#__RefHeading___Toc124341870)

[1.1.39 Small TDU 10](#__RefHeading___Toc124341871)

[1.1.40 State or Provincial Energy Authority
11](#__RefHeading___Toc124341872)

[1.1.41 Supermajority Board Vote 11](#__RefHeading___Toc124341873)

[1.1.42 Transmission-Dependent Utility 11](#__RefHeading___Toc124341874)

[1.1.43 Transmission Agreements 11](#__RefHeading___Toc124341875)

[1.1.44 Tribe 12](#__RefHeading___Toc124341876)

[Article II Offices 12](#__RefHeading___Toc124341877)

[Article III Purposes and Limitations
12](#article-iii-purposes-and-limitations)

[3.1 Purposes 12](#__RefHeading___Toc124341879)

[3.2 Limitations 12](#__RefHeading___Toc124341880)

[3.2.1 Ownership and Operational Limitations.
12](#__RefHeading___Toc124341881)

[3.2.2 Rate Design of Pre-Existing Long-Term Transmission Rights
13](#__RefHeading___Toc124341882)

[Article IV Interim Board 14](#__RefHeading___Toc124341883)

[4.1 Number and Qualifications 14](#__RefHeading___Toc124341884)

[4.2 Initial Interim Board and Term of Office
14](#__RefHeading___Toc124341885)

[4.3 Authorities and Responsibilities of Interim Board
14](#__RefHeading___Toc124341886)

[4.4 Limitations on Interim Board 14](#__RefHeading___Toc124341887)

[4.5 Resignation and Removal of Interim Board Members
14](#__RefHeading___Toc124341888)

[4.6 Interim Board Vacancies 15](#__RefHeading___Toc124341889)

[4.7 Compensation of Interim Board Members
15](#__RefHeading___Toc124341890)

[4.8 Prohibition Against Gifts and Loans to Interim Board Members
15](#__RefHeading___Toc124341891)

[4.9 Interim Board Conduct Rules 15](#__RefHeading___Toc124341892)

[4.10 Notice of Meetings of the Interim Board
15](#__RefHeading___Toc124341893)

[4.11 Waivers of Interim Board Meeting Notice
15](#__RefHeading___Toc124341894)

[4.12 Attendance at Interim Board Meetings
15](#__RefHeading___Toc124341895)

[4.13 Quorum of Interim Board 15](#__RefHeading___Toc124341896)

[4.14 Voting of Interim Board 16](#__RefHeading___Toc124341897)

[Article V Members 16](#__RefHeading___Toc124341898)

[5.1 Powers and Rights of Members 16](#__RefHeading___Toc124341899)

[5.1.1 Exclusive Member Rights 16](#__RefHeading___Toc124341900)

[5.1.2 Nonexclusive Member Rights and Powers.
16](#__RefHeading___Toc124341901)

[5.1.3 Additional Member Rights. 17](#__RefHeading___Toc124341902)

[5.2 Classes of Members 17](#__RefHeading___Toc124341903)

[5.2.1 Identification of Member Classes
17](#__RefHeading___Toc124341904)

[5.2.2 Member Class Assignment Rules 18](#__RefHeading___Toc124341905)

[5.3 Initial Members and Membership Qualifications
20](#__RefHeading___Toc124341906)

[5.3.1 Initial Members 20](#__RefHeading___Toc124341907)

[5.3.2 General Qualifications for Membership.
21](#__RefHeading___Toc124341908)

[5.3.3 Voting and *Ex Officio* Members from States and Provinces
21](#__RefHeading___Toc124341909)

[5.3.4 Tribes Membership. 21](#__RefHeading___Toc124341910)

[5.3.5 Notice of Acceptance of Membership.
21](#__RefHeading___Toc124341911)

[5.3.6 Certain Limitations on Membership.
22](#__RefHeading___Toc124341912)

[5.3.7 List of Members. 22](#__RefHeading___Toc124341913)

[5.3.8 Member's Right to Replace Authorized Representative.
22](#__RefHeading___Toc124341914)

[5.3.9 Member Obligation to Report Changes in Qualification;
Disqualification and Redesignation of Member Class.
22](#__RefHeading___Toc124341915)

[5.4 Membership Dispute Resolution Committee
22](#__RefHeading___Toc124341916)

[5.4.1 Composition of Membership Dispute Resolution Committee
22](#__RefHeading___Toc124341917)

[5.4.2 Membership Dispute Resolution Committee Duties.
22](#__RefHeading___Toc124341918)

[5.4.3 Vacancies on and Appointments to Membership Dispute Resolution
Committee. 22](#__RefHeading___Toc124341919)

[5.5 Membership Admission Procedures 23](#__RefHeading___Toc124341920)

[5.5.1 Application Requirements 23](#__RefHeading___Toc124341921)

[5.5.2 Acceptance or Rejection of Membership Applications
23](#__RefHeading___Toc124341922)

[5.5.3 Notice and Right to Challenge Membership Decision
24](#__RefHeading___Toc124341923)

[5.6 Member Status Pending Challenge Resolution
24](#__RefHeading___Toc124341924)

[5.7 Termination of or Withdrawal from Membership
25](#__RefHeading___Toc124341925)

[5.7.1 Termination for Failure to Pay Membership Fees.
25](#__RefHeading___Toc124341926)

[5.7.2 Withdrawal from Membership. 25](#__RefHeading___Toc124341927)

[5.8 Establishment of Record Date for Member Votes
25](#__RefHeading___Toc124341928)

[5.9 Meetings of Members 26](#__RefHeading___Toc124341929)

[5.9.1 Biannual Member Meeting. 26](#__RefHeading___Toc124341930)

[5.9.2 First Biannual Member Meeting 26](#__RefHeading___Toc124341931)

[5.9.3 Member Identification of Committee Candidates.
26](#__RefHeading___Toc124341932)

[5.9.4 Special Member Meetings 26](#__RefHeading___Toc124341933)

[5.10 Notice of Meetings of Members 27](#__RefHeading___Toc124341934)

[5.10.1 Timing and Manner of Notices 27](#__RefHeading___Toc124341935)

[5.10.2 Effect of Lack of Notice and Agenda Changes
27](#__RefHeading___Toc124341936)

[5.10.3 Public Notice of Member Meetings
28](#__RefHeading___Toc124341937)

[5.11 Open Member Meetings 28](#__RefHeading___Toc124341938)

[5.12 Member Waivers of Notice 28](#__RefHeading___Toc124341939)

[5.13 Quorum Rules 28](#__RefHeading___Toc124341940)

[5.13.1 Quorum Rules for Binding Member Votes (Except to Fill Members
Representative Committee Vacancies and to Remove Members Representative
Committee Members) 28](#__RefHeading___Toc124341941)

[5.13.2 Quorum Rules for Meetings of Member Classes or Member
Sub-Classes to Remove Members of the Members Representative Committee
and to Fill Vacancies 29](#__RefHeading___Toc124341942)

[5.13.3 Quorum Rules for Member Advisory Votes
30](#__RefHeading___Toc124341943)

[5.14 Voting of Members (Other Than Advisory Votes)
30](#__RefHeading___Toc124341944)

[5.14.1 General Voting Rules 30](#__RefHeading___Toc124341945)

[5.14.2 Membership Thresholds 31](#__RefHeading___Toc124341946)

[5.14.3 Initial Allocation of Voting Power.
33](#__RefHeading___Toc124341947)

[5.14.4 Allocation of Voting Power When Member Class Has Zero Members or
When Member Sub-Class Thresholds Are Not Met
35](#__RefHeading___Toc124341948)

[5.14.5 Tabulation of Member Votes to Approve Bylaws Amendments
40](#__RefHeading___Toc124341949)

[5.14.6 Tabulation of Member Votes to Elect Members Representative
Committee Members 40](#__RefHeading___Toc124341950)

[5.14.7 Tabulation of Other Member Votes
40](#__RefHeading___Toc124341951)

[5.15 Advisory Member Votes Conducted by the Board of Directors
40](#__RefHeading___Toc124341952)

[5.16 Restrictions on Transfer 40](#__RefHeading___Toc124341953)

[5.17 Effect of Membership 41](#__RefHeading___Toc124341954)

[Article VI Members Representative Committee
41](#__RefHeading___Toc124341955)

[6.1 Powers and Rights of Members Representative Committee Members
41](#__RefHeading___Toc124341956)

[6.1.1 Exclusive Members Representative Committee Rights and Powers
41](#__RefHeading___Toc124341957)

[6.1.2 Nonexclusive Members Representative Committee Rights and Powers
41](#__RefHeading___Toc124341958)

[6.1.3 Management Audit Rights 42](#__RefHeading___Toc124341959)

[6.2 Number of Members Representative Committee Members
42](#__RefHeading___Toc124341960)

[6.3 Election of Members Representative Committee Members
42](#__RefHeading___Toc124341961)

[6.3.1 Member Rights to Elect Members Representative Committee Members
42](#__RefHeading___Toc124341962)

[6.3.2 General Rule for Election of Members Representative Committee
Members. 42](#__RefHeading___Toc124341963)

[6.3.3 Special Rules for Election of Members Representative Committee
Members when Thresholds Not Met or Zero Members.
45](#__RefHeading___Toc124341964)

[6.3.4 Notice of Members Representative Committee Election Meetings
46](#__RefHeading___Toc124341965)

[6.3.5 Vote to Elect Members Representative Committee Members.
47](#__RefHeading___Toc124341966)

[6.4 Procedures in Election of Members Representative Committee Members
47](#__RefHeading___Toc124341967)

[6.5 Term of Office of Members Representative Committee Members
48](#__RefHeading___Toc124341968)

[6.6 Resignation or Removal of Members Representative Committee Members;
Vacancies 48](#__RefHeading___Toc124341969)

[6.7 Meetings of the Members Representative Committee
48](#__RefHeading___Toc124341970)

[6.7.1 Election of Members Representative Committee Officers.
48](#__RefHeading___Toc124341971)

[6.7.2 Regular and Special Members Representative Committee Meetings
48](#__RefHeading___Toc124341972)

[6.7.3 Permitted Means of Members Representative Committee Meeting
Participation 49](#__RefHeading___Toc124341973)

[6.7.4 Members Representative Committee Action by Consent
49](#__RefHeading___Toc124341974)

[6.7.5 Members Representative Committee Meeting Minutes.
49](#__RefHeading___Toc124341975)

[6.8 Notice of Members Representative Committee Meetings
49](#__RefHeading___Toc124341976)

[6.9 Open Meetings of Members Representative Committee
49](#__RefHeading___Toc124341977)

[6.10 Waivers of Members Representative Committee Meeting Notice
49](#__RefHeading___Toc124341978)

[6.11 Quorum of Members Representative Committee Members
49](#__RefHeading___Toc124341979)

[6.12 Voting of Members Representative Committee Members
50](#__RefHeading___Toc124341980)

[6.13 Subcommittees of Members Representative Committee
50](#__RefHeading___Toc124341981)

[6.14 Arbitration Committee 50](#__RefHeading___Toc124341982)

[Article VII Board of Directors 50](#__RefHeading___Toc124341983)

[7.1 Board of Directors 50](#__RefHeading___Toc124341984)

[7.1.1 Authorities of Board of Directors
50](#__RefHeading___Toc124341985)

[7.1.2 Number and Classification 52](#__RefHeading___Toc124341986)

[7.2 Establishment of Board of Directors
52](#__RefHeading___Toc124341987)

[7.2.1 Executive Search Firm 52](#__RefHeading___Toc124341988)

[7.2.2 Identification and Nomination of Suitable Candidates
53](#__RefHeading___Toc124341989)

[7.2.3 Election of Board of Directors 54](#__RefHeading___Toc124341990)

[7.3 Resignation or Removal of Directors; Vacancies
56](#__RefHeading___Toc124341991)

[7.4 Meetings of the Board of Directors
56](#__RefHeading___Toc124341992)

[7.4.1 Quorum of Board of Directors 56](#__RefHeading___Toc124341993)

[7.4.2 Scheduled Meetings of Board of Directors
57](#__RefHeading___Toc124341994)

[7.4.3 Regular and Special Meetings of Board of Directors
57](#__RefHeading___Toc124341995)

[7.4.4 Permitted Means of Director Meeting Participation
57](#__RefHeading___Toc124341996)

[7.4.5 Board of Directors Action by Consent
57](#__RefHeading___Toc124341997)

[7.4.6 Board of Directors Meeting Minutes
57](#__RefHeading___Toc124341998)

[7.5 Notice of Board of Directors Meetings
57](#__RefHeading___Toc124341999)

[7.5.1 Notice Requirements of Regular and Special Board of Directors
Meetings 57](#__RefHeading___Toc124342000)

[7.5.2 Public Notice of Meetings; Closed Sessions of the Board of
Directors 58](#__RefHeading___Toc124342001)

[7.6 Open Board of Directors Meetings 58](#__RefHeading___Toc124342002)

[7.7 Waivers of Board of Directors Meeting Notice
59](#__RefHeading___Toc124342003)

[7.8 Quorum of Directors 59](#__RefHeading___Toc124342004)

[7.9 Voting of Directors 59](#__RefHeading___Toc124342005)

[7.9.1 General Requirement for Board Votes.
59](#__RefHeading___Toc124342006)

[7.9.2 Implementation Following Certain Board of Directors Votes
59](#__RefHeading___Toc124342007)

[7.10 Individuals Who Are Prohibited from Serving as Directors
59](#__RefHeading___Toc124342008)

[7.10.1 Prohibited Individuals 59](#__RefHeading___Toc124342009)

[7.10.2 Exceptions Concerning Prohibited Individuals
60](#__RefHeading___Toc124342010)

[7.11 Continuing Restrictions on Former Directors
61](#__RefHeading___Toc124342011)

[7.11.1 General Restrictions 61](#__RefHeading___Toc124342012)

[7.11.2 Exceptions Concerning Continuing Restrictions
62](#__RefHeading___Toc124342013)

[7.12 Standard of Care 62](#__RefHeading___Toc124342014)

[7.12.1 General Standard for Decisions 62](#__RefHeading___Toc124342015)

[7.12.2 Required Demonstration to Implement Backstop Measures
62](#__RefHeading___Toc124342016)

[7.12.3 On-Going Regional Consultation 62](#__RefHeading___Toc124342017)

[7.12.4 Business and Strategic Plans 62](#__RefHeading___Toc124342018)

[7.12.5 Information a Director May Rely Upon
63](#__RefHeading___Toc124342019)

[7.12.6 Conduct Rules 63](#__RefHeading___Toc124342020)

[7.12.7 Independence from Market Participants
63](#__RefHeading___Toc124342021)

[7.13 Prohibition Against Loans 64](#__RefHeading___Toc124342022)

[7.14 Inspection Rights 64](#__RefHeading___Toc124342023)

[7.15 Compensation of Directors 64](#__RefHeading___Toc124342024)

[7.15.1 Base Compensation and Additional Compensation
64](#__RefHeading___Toc124342025)

[7.15.2 Adjustment of Compensation 64](#__RefHeading___Toc124342026)

[7.15.3 Reimbursement of Expenses 64](#__RefHeading___Toc124342027)

[7.15.4 Prohibition Against a Director Being an Officer, Employee, or
Consultant 65](#__RefHeading___Toc124342028)

[7.16 Special Issues List 65](#__RefHeading___Toc124342029)

[7.16.1 The Special Issues List 65](#__RefHeading___Toc124342030)

[7.16.2 Backstop Measures. 65](#__RefHeading___Toc124342031)

[7.16.3 Initial Long-Term Pricing 66](#__RefHeading___Toc124342032)

[7.16.4 Authorization to Issue Financial Transmission Rights.
66](#__RefHeading___Toc124342033)

[7.16.5 Authorization of Certain Market Monitor Actions
67](#__RefHeading___Toc124342034)

[7.16.6 Authorization to Implement Certain Loss Methodologies
67](#__RefHeading___Toc124342035)

[7.16.7 Procedural Requirements Applicable to Special Issues List
68](#__RefHeading___Toc124342036)

[7.16.8 Timing Requirements Applicable to Backstop Authorization
70](#__RefHeading___Toc124342037)

[7.16.9 Study Required Before Proposal to Issue Financial Rights
70](#__RefHeading___Toc124342038)

[7.17 Member Ability to Elevate Board of Directors Approval Vote on
Policy or Scope Changes Considered Major
70](#__RefHeading___Toc124342039)

[7.17.1 Member Action to Express Concern.
70](#__RefHeading___Toc124342040)

[7.17.2 Trigger for Elevated Board of Directors Approval Vote
71](#__RefHeading___Toc124342041)

[7.17.3 Elevated Board of Directors Approval Vote
71](#__RefHeading___Toc124342042)

[7.17.4 Implementation Timing. 72](#__RefHeading___Toc124342043)

[7.17.5 Exclusions. 72](#__RefHeading___Toc124342044)

[Article VIII Committees of the Board of Directors
72](#__RefHeading___Toc124342045)

[8.1 Committees of Directors 72](#__RefHeading___Toc124342046)

[8.2 Advisory Committees
73](#advisory-committees.-the-board-of-directors-may-by-resolution-adopted-by-a-majority-of-the-directors-then-in-office-appoint-advisory-committees-to-serve-at-the-pleasure-of-the-board-of-directors-in-addition-to-those-advisory-committees-identified-in-these-bylaws.-advisory-committee-membership-may-consist-of-both-directors-and-non-directors-or-non-directors-only.-advisory-committees-have-no-authority-to-act-for-the-corporation-but-shall-report-their-findings-and-recommendations-to-the-board-of-directors.)

[8.2.1 Initial Required Member Advisory Committees
73](#__RefHeading___Toc124342048)

[8.2.2 Consideration of Member-Submitted Candidates
74](#__RefHeading___Toc124342049)

[8.3 Audit Committee 74](#__RefHeading___Toc124342050)

[8.3.1 Directors on the Audit Committee
74](#__RefHeading___Toc124342051)

[8.3.2 Role of Audit Committee 74](#__RefHeading___Toc124342052)

[8.4 Budget Committee 75](#__RefHeading___Toc124342053)

[8.4.1 Participation on the Budget Committee; Quorum
75](#__RefHeading___Toc124342054)

[8.4.2 Purpose of the Budget Committee 75](#__RefHeading___Toc124342055)

[8.4.3 Information Guidelines 76](#__RefHeading___Toc124342056)

[8.4.4 Budget Committee Recommendations
76](#__RefHeading___Toc124342057)

[8.5 Board Advisory Committee 76](#__RefHeading___Toc124342058)

[8.5.1 Participation on the Board Advisory Committee
76](#__RefHeading___Toc124342059)

[8.5.2 Purpose of the Board Advisory Committee
77](#__RefHeading___Toc124342060)

[8.5.3 Matters Requiring Advice to the Board of Directors
77](#__RefHeading___Toc124342061)

[8.5.4 Procedures for Proposing and Commenting on Issues
78](#__RefHeading___Toc124342062)

[8.5.5 Position Papers 78](#__RefHeading___Toc124342063)

[8.5.6 Chairperson and Vice Chairperson of the Board Advisory Committee
78](#__RefHeading___Toc124342064)

[8.5.7 Procedures for Conducting Business of the Board Advisory
Committee 78](#__RefHeading___Toc124342065)

[8.5.8 Formation of Ad Hoc or Standing Work Groups
79](#__RefHeading___Toc124342066)

[8.5.9 Members Ability to Be Heard on Matters Before the Board of
Directors 79](#__RefHeading___Toc124342067)

[8.6 Governmental Committee 79](#__RefHeading___Toc124342068)

[8.6.1 Participation on the Governmental Committee
79](#__RefHeading___Toc124342069)

[8.6.2 Purpose of the Governmental Committee
79](#__RefHeading___Toc124342070)

[8.7 Board Performance Committee 79](#__RefHeading___Toc124342071)

[8.7.1 Directors on the Board Performance Committee
79](#__RefHeading___Toc124342072)

[8.7.2 Role of the Board Performance Committee
79](#__RefHeading___Toc124342073)

[8.8 Meetings
80](#meetings.-regular-and-special-meetings-of-committees-of-the-board-of-directors-and-any-advisory-committees-shall-be-governed-by-and-the-procedures-relating-to-such-meetings-and-actions-taken-by-such-committees-at-such-meetings-or-by-consent-shall-be-carried-out-in-accordance-with-the-provisions-of-sections-7.4-through-7.9-concerning-meetings-of-the-board-of-directors.-for-the-purposes-of-the-application-of-article-vii-to-the-meetings-of-committees-of-the-board-of-directors-or-advisory-committees-references-in-article-vii-to-the-board-of-directors-shall-be-read-as-references-to-the-applicable-committee-of-the-board-of-directors-or-to-the-applicable-advisory-committee.-minutes-of-each-meeting-of-any-committee-with-the-exception-of-closed-sessions-held-pursuant-to-section-7.6-shall-be-kept-and-filed-with-the-corporate-records.-the-board-of-directors-may-adopt-rules-for-the-governance-of-any-committee-not-inconsistent-with-the-provisions-of-these-bylaws.)

[Article IX Officers and Staff 80](#article-ix-officers-and-staff)

[9.1 Officers
80](#officers.-the-officers-of-the-corporation-shall-be-a-president-one-1-or-more-vice-presidents-a-secretary-a-treasurer.-the-same-person-may-hold-two-2-or-more-offices-provided-however-that-the-same-person-may-not-hold-the-offices-of-president-and-secretary-and-provided-further-that-the-same-person-may-not-hold-the-offices-of-president-and-treasurer.)

[9.2 Appointment
80](#appointment.-officers-may-be-appointed-at-any-meeting-of-the-board-of-directors-and-the-terms-of-service-of-the-officers-so-appointed-shall-be-as-specified-by-the-board-of-directors.)

[9.3 Removal
80](#removal.-subject-to-the-rights-if-any-of-the-officer-under-any-contract-of-employment-the-board-of-directors-may-remove-any-officer-of-the-corporation-whenever-in-the-board-of-directors-judgment-removal-will-serve-the-best-interests-of-the-corporation.)

[9.4 Resignation
80](#resignation.-any-officer-may-resign-at-any-time-by-giving-written-notice-to-the-secretary-of-the-corporation.-any-resignation-shall-take-effect-on-the-date-of-the-receipt-of-that-notice-or-at-any-later-time-specified-by-that-notice-and-unless-otherwise-specified-in-that-notice-the-acceptance-of-the-resignation-shall-not-be-necessary-to-make-it-effective.-any-resignation-is-without-prejudice-to-the-rights-if-any-of-the-corporation-under-any-contract-of-employment-with-the-officer.)

[9.5 President
81](#president.-the-president-shall-be-responsible-for-conducting-the-affairs-of-the-corporation-in-a-manner-consistent-with-the-policies-and-directives-of-the-board-of-directors.-he-or-she-shall-have-such-additional-powers-and-duties-as-may-be-prescribed-by-the-board-of-directors.)

[9.6 Vice President
81](#vice-president.-during-the-absence-or-disability-of-the-president-the-vice-president-or-if-there-is-more-than-one-1-vice-president-the-vice-presidents-in-the-order-designated-by-the-board-of-directors-shall-exercise-all-functions-of-the-president-except-as-limited-by-resolution-of-the-board-of-directors.-each-vice-president-shall-have-such-powers-and-discharge-such-duties-as-may-be-assigned-from-time-to-time-to-such-vice-president-by-the-president-or-by-the-board-of-directors.)

[9.7 Secretary
81](#secretary.-the-secretary-of-the-corporation-shall-serve-notice-of-and-act-as-secretary-at-all-meetings-of-the-board-of-directors-shall-administer-the-meetings-of-members-as-provided-in-articles-v-and-vi-shall-record-the-proceedings-of-all-meetings-in-the-minute-books-and-shall-be-responsible-for-conducting-the-affairs-of-the-corporation-in-a-manner-consistent-with-the-policies-and-directives-of-the-board-of-directors.-the-secretary-of-the-corporation-shall-have-such-additional-powers-and-duties-as-shall-be-prescribed-by-the-board-of-directors.)

[9.8 Treasurer
81](#treasurer.-the-treasurer-of-the-corporation-shall-have-the-care-and-custody-of-the-money-funds-and-securities-of-the-corporation-shall-account-for-the-same-and-shall-have-and-exercise-under-the-supervision-of-the-board-of-directors-all-the-powers-and-duties-commonly-incident-to-this-office.-the-treasurer-shall-prepare-and-maintain-the-books-accounts-and-financial-statements-financial-records-and-financial-reports-of-the-corporation-consistent-with-generally-accepted-accounting-principles.)

[9.9 Additional Officers
81](#additional-officers.-the-board-of-directors-may-appoint-one-1-or-more-additional-officers-to-perform-such-duties-and-have-such-powers-as-the-board-of-directors-shall-designate.)

[9.10 Compensation; Prohibition Against Loans
81](#compensation-prohibition-against-loans.)

[9.10.1 Compensation Determined by the Board of Directors
81](#compensation-determined-by-the-board-of-directors.-compensation-of-the-officers-shall-be-determined-by-board-of-directors.)

[9.10.2 Prohibited Loans; Permitted Advances
81](#prohibited-loans-permitted-advances.-the-corporation-shall-not-make-any-loan-of-money-or-property-to-or-guarantee-the-obligation-of-any-officer-or-related-person-of-an-officer-provided-however-that-the-corporation-may-advance-money-to-an-officer-for-expenses-reasonably-anticipated-to-be-incurred-in-performance-of-the-duties-of-such-officer-so-long-as-the-officer-would-be-entitled-to-reimbursement-for-such-expenses-absent-such-advance.)

[9.11 Execution of Instruments
81](#execution-of-instruments.-the-president-shall-have-the-authority-to-execute-legal-instruments-on-behalf-of-the-corporation-subject-to-any-restrictions-or-limitations-that-the-board-of-directors-may-impose.-the-presidents-authority-to-execute-legal-instruments-on-behalf-of-the-corporation-may-be-delegated-by-the-president-to-other-officers-and-employees-of-the-corporation-on-a-general-or-limited-basis-with-the-prior-approval-of-the-board-of-directors.)

[9.12 Staffing
82](#staffing.-officers-of-the-corporation-may-within-such-budgetary-authority-and-subject-to-such-other-restrictions-and-requirements-the-board-of-directors-may-establish-from-time-to-time-hire-or-contract-with-such-staff-as-is-necessary-to-fulfill-the-purposes-of-the-corporation.)

[9.13 Employees Conduct Rules
82](#employees-conduct-rules.-the-board-of-directors-shall-ensure-that-the-officers-employees-and-substantially-full-time-consultants-and-contractors-of-the-corporation-and-any-transmission-owner-or-operator-personnel-or-other-individuals-performing-discretionary-functions-for-or-on-behalf-of-the-corporation-comply-with-the-employees-conduct-rules.-the-employee-conduct-rules-set-forth-in-attachment-e-shall-become-effective-as-of-the-date-the-initial-board-of-directors-takes-office.-the-employees-conduct-rules-may-be-amended-from-time-to-time-by-the-board-of-directors.-all-contracts-with-non-full-time-contractors-shall-include-appropriate-conduct-rules-as-determined-by-the-board-of-directors-from-time-to-time-taking-into-account-the-nature-of-the-work-of-such-contractor-and-the-value-of-such-contractors-work-to-the-corporation.-the-board-of-directors-may-in-its-discretion-include-in-the-employees-conduct-rules-specific-postemployment-restrictions-on-former-employees-including-restrictions-on-involvement-in-any-matter-in-which-the-former-employee-was-directly-involved-while-an-employee-and-restrictions-for-a-limited-period-on-any-appearances-before-the-corporation-in-a-representative-capacity.)

[Article X Records 82](#article-x-records)

[10.1 Records; Inspection of Records
82](#records-inspection-of-records.)

[10.1.1 Records 82](#__RefHeading___Toc124342093)

[10.1.2 Member Inspection of Records 83](#__RefHeading___Toc124342094)

[10.2 Financial Records 83](#financial-records.)

[10.2.1 Annual Financial Statements
83](#annual-financial-statements.-as-soon-as-reasonably-practical-after-the-close-of-the-fiscal-year-annual-financial-statements-of-the-corporation-shall-be-prepared-in-accordance-with-generally-accepted-accounting-principles-and-when-applicable-the-requirements-of-ferc.-the-financial-statements-shall-contain-in-appropriate-detail-the-following)

[10.2.2 Accountant's Review of Financial Statements
84](#accountants-review-of-financial-statements.-the-board-of-directors-shall-cause-the-financial-statements-of-the-corporation-to-be-reviewed-by-an-independent-accountant-on-at-least-an-annual-basis-with-the-independent-accountants-review-delivered-to-the-board-of-directors-together-with-a-management-letter-or-letter-of-suggestions-for-improvement-of-fiscal-management.-.)

[10.2.3 Reports Concerning Financial Status
84](#reports-concerning-financial-status.-the-board-of-directors-shall-cause-the-reports-set-forth-below-concerning-the-corporations-financial-status-to-be-prepared-and-made-available-to-the-members.-the-board-of-directors-may-require-that-reports-concerning-the-corporations-financial-status-be-made-available-to-the-general-public-subject-to-a-requirement-that-requesting-parties-pay-the-reasonable-costs-of-providing-the-reports.)

[10.3 Records Retention
84](#records-retention.-the-board-of-directors-shall-cause-to-be-developed-and-implemented-a-records-retention-program-complying-with-all-applicable-legal-requirements.)

[10.4 Technical and Other Information 84](#__RefHeading___Toc124342100)

[Article XI Indemnification of Directors, Officers, Employees, and
Agents 85](#__RefHeading___Toc124342101)

[11.1 Liability of Directors; Indemnification Rights of Members of the
Board of Directors and Certain Officers
85](#__RefHeading___Toc124342102)

[11.1.1 Limits on Liability of Directors
85](#__RefHeading___Toc124342103)

[11.1.2 Indemnification of Directors 85](#__RefHeading___Toc124342104)

[11.2 Indemnification of Employees and Agents
85](#__RefHeading___Toc124342105)

[11.3 Procedure for Seeking Indemnification or Advancement of Expenses
86](#__RefHeading___Toc124342106)

[11.3.1 Notification and Defense of Claim
86](#__RefHeading___Toc124342107)

[11.3.2 Information to Be Submitted and Method of Determination and
Authorization of Indemnification 87](#__RefHeading___Toc124342108)

[11.3.3 Special Procedure Regarding Advance for Expenses
87](#__RefHeading___Toc124342109)

[11.3.4 Settlement 88](#__RefHeading___Toc124342110)

[11.4 Contract and Related Rights 88](#__RefHeading___Toc124342111)

[11.4.1 Contract Rights 88](#__RefHeading___Toc124342112)

[11.4.2 Optional Insurance, Contracts, and Funding
88](#__RefHeading___Toc124342113)

[11.4.3 Severability 88](#__RefHeading___Toc124342114)

[11.4.4 Right of Indemnitee to Bring Suit
89](#__RefHeading___Toc124342115)

[11.4.5 No Presumption 89](#__RefHeading___Toc124342116)

[11.5 Exceptions to Corporation's Obligations
89](#__RefHeading___Toc124342117)

[Article XII Miscellaneous 90](#article-xii-miscellaneous)

[12.1 Fiscal Year 90](#__RefHeading___Toc124342119)

[12.2 Corporation Seal 90](#__RefHeading___Toc124342120)

[12.3 Notices 90](#__RefHeading___Toc124342121)

[12.4 Dissolution and Merger or Disposition of Assets
90](#__RefHeading___Toc124342122)

[12.4.1 Dissolution of the Corporation 90](#__RefHeading___Toc124342123)

[12.4.2 Distribution of Assets upon Dissolution
91](#__RefHeading___Toc124342124)

[12.4.3 Merger or Other Disposition of Assets
91](#__RefHeading___Toc124342125)

[12.5 Amendment of Bylaws 91](#__RefHeading___Toc124342126)

[12.5.1 Methods of Amending Bylaws 91](#__RefHeading___Toc124342127)

[12.5.2 Board of Directors Proposals to Amend Bylaws
91](#__RefHeading___Toc124342128)

[12.5.3 Member Initiatives to Amend Bylaws
92](#__RefHeading___Toc124342129)

[Article XIII Alternative Dispute Resolution
92](#__RefHeading___Toc124342130)

[13.1 Alternative Dispute Resolution 92](#__RefHeading___Toc124342131)

[13.2 Scope of Bylaws Dispute Resolution Provisions
92](#__RefHeading___Toc124342132)

[13.2.1 General Applicability 92](#__RefHeading___Toc124342133)

[13.2.2 Persons Eligible to Initiate or Participate in Dispute
Resolution Process 92](#__RefHeading___Toc124342134)

[13.3 Procedures to Initiate Dispute Resolution Process
93](#__RefHeading___Toc124342135)

[13.3.1 Good-Faith Written Request 93](#__RefHeading___Toc124342136)

[13.3.2 Demand for Arbitration 93](#__RefHeading___Toc124342137)

[13.3.3 Statement(s) of Claim(s) 93](#__RefHeading___Toc124342138)

[13.3.4 Intervention Rights 94](#__RefHeading___Toc124342139)

[13.4 Selection of Arbitrator 94](#__RefHeading___Toc124342140)

[13.4.1 Selection of a Single Arbitrator
94](#__RefHeading___Toc124342141)

[13.4.2 Option to Obtain Three-Arbitrator Panel
94](#__RefHeading___Toc124342142)

[13.4.3 Arbitrator's Jurisdiction 95](#__RefHeading___Toc124342143)

[13.4.4 Communication with Candidates to Serve as Arbitrator
95](#__RefHeading___Toc124342144)

[13.5 Disclosures Required of Arbitrators
96](#__RefHeading___Toc124342145)

[13.5.1 Initial Disclosure Obligations 96](#__RefHeading___Toc124342146)

[13.5.2 Ongoing Disclosure Obligations 96](#__RefHeading___Toc124342147)

[13.6 Protection from Liability 96](#__RefHeading___Toc124342148)

[13.7 Arbitration Procedures 96](#__RefHeading___Toc124342149)

[13.7.1 Timetable 96](#__RefHeading___Toc124342150)

[13.7.2 Procedural Rules 97](#__RefHeading___Toc124342151)

[13.7.3 Communication with Arbitrator 98](#__RefHeading___Toc124342152)

[13.7.4 Modification of Arbitration Procedures
98](#__RefHeading___Toc124342153)

[13.8 Intervention Rules 98](#__RefHeading___Toc124342154)

[13.8.1 Persons Eligible to Intervene 98](#__RefHeading___Toc124342155)

[13.8.2 Timing for Intervention Application
98](#__RefHeading___Toc124342156)

[13.8.3 Required Showings for Intervention
99](#__RefHeading___Toc124342157)

[13.8.4 Application and Order 99](#__RefHeading___Toc124342158)

[13.8.5 Effect of Arbitrator Granting Intervention
99](#__RefHeading___Toc124342159)

[13.9 Award, Remedies, and Enforcement
100](#__RefHeading___Toc124342160)

[13.9.1 Award 100](#__RefHeading___Toc124342161)

[13.9.2 Remedies 100](#__RefHeading___Toc124342162)

[13.10 Appeal of Award 101](#__RefHeading___Toc124342163)

[13.10.1 Rehearing; Clarification; Appeal
101](#__RefHeading___Toc124342164)

[13.10.2 Appellate Record 101](#__RefHeading___Toc124342165)

[13.10.3 Procedures for Appeals 102](#__RefHeading___Toc124342166)

[ATTACHMENTS]{.underline}

[Attachment A]{.underline} [Interim Board Conduct Rules]{.underline}

[Attachment B]{.underline} [Initial Members of the
Corporation]{.underline}

[Attachment C]{.underline} [Examples of Reallocation and Tabulation of
Member Votes]{.underline}

[Attachment D]{.underline} [Board of Directors Conduct
Rules]{.underline}

[Attachment E]{.underline} [Employee Conduct Rules]{.underline}

BYLAWS

FOR

**GRID WEST**

**ARTICLE I\
\
GENERAL PROVISIONS**[]{#__RefHeading___Toc124341831 .anchor}

1.1 [Defined Terms]{.underline}[]{#__RefHeading___Toc124341832 .anchor}.
For purposes of these Bylaws, the following terms shall be defined as
follows:

1.1.1 "[Affiliate]{.underline}[]{#__RefHeading___Toc124341833 .anchor}"
of a Person means a Person that directly or indirectly through one (1)
or more intermediaries controls, is controlled by, or is under common
control with such Person. For purposes of these Bylaws, in determining
whether one (1) Person controls another Person, without limitation, the
direct or indirect ownership or control of or power to vote five percent
(5%) or more of the outstanding voting securities of a corporation shall
be deemed to constitute control of such corporation;
[provided]{.underline}, [however]{.underline}, that in the case of any
Person that is a public utility that owns an interest in an Independent
Transmission Company and has divested ownership of its electric
transmission system, such Person and the Independent Transmission
Company shall not be considered Affiliates. In addition, for purposes of
these Bylaws:

> \(i\) members of any cooperative corporation shall not, merely by
> virtue of membership in such corporation, be deemed to be Affiliates
> of each other or of the cooperative corporation;
>
> \(ii\) members of any joint operating agency, joint operating entity,
> joint powers authority, entity formed under an interlocal cooperation
> act, or comparable entity shall not, merely by virtue of membership in
> such joint operating agency, joint operating entity, joint powers
> authority, entity formed under an interlocal cooperation act, or other
> such entity, be considered Affiliates of each other or of the joint
> operating agency, joint operating entity, joint powers authority,
> entity formed under an interlocal cooperation act, or other comparable
> entity;
>
> \(iii\) separate agencies of a state, a province, or the federal
> government shall not be considered Affiliates, regardless of any
> commonality of political control; and
>
> \(iv\) no Crown-owned utility shall be considered an Affiliate of any
> State or Provincial Energy Authority.

1.1.2 "[Articles of
Incorporation]{.underline}[]{#__RefHeading___Toc124341834 .anchor}"
means the Articles of Incorporation of the Corporation, as amended from
time to time.

1.1.3 "[Bylaws Dispute Resolution
Provisions]{.underline}[]{#__RefHeading___Toc124341835 .anchor}" means
the provisions of Article XIII.

1.1.4 "[Board of Directors]{.underline}[]{#__RefHeading___Toc124341836
.anchor}" means the Board of Directors as elected and holding office in
accordance with applicable provisions of Article VII. The term "Board of
Directors" does not include the Interim Board as defined in Article IV.

1.1.5 "[Certain Public Interest
Group]{.underline}[]{#__RefHeading___Toc124341837 .anchor}" is any
entity that

> \(i\) is a public interest membership organization that is qualified
> under Section 501(c)(3) of the Internal Revenue Code (or, for Canadian
> organizations, analogous Canadian law);
>
> \(ii\) is an environmental organization, demand-side management
> advocacy organization, energy efficiency advocacy organization, or
> renewable energy advocacy organization;
>
> \(iii\) has an office within the Geographic Area; and
>
> \(iv\) is not a Member of any of the following:
>
> \(a\) Member Classes: Major Transmitting Utilities;
> Transmission-Dependent Utilities; Generators, Power Marketers, Large
> Generating End-Use Consumers, and Others; or End-Use Consumers; or
>
> \(b\) Member Sub-Classes: State or Provincial Energy Authority, or
> Tribes.

1.1.6 "[Consumer Advocate]{.underline}[]{#__RefHeading___Toc124341838
.anchor}" means a Person that has been recognized, designated, or funded
by or through applicable law or a State or Provincial Energy Authority
(or other agency of a Participating Jurisdiction) for purposes of
representing the interests of end-use consumers in regulatory
proceedings within the applicable Participating Jurisdiction.

1.1.7 "[Corporation]{.underline}[]{#__RefHeading___Toc124341839
.anchor}" means Grid West, a Washington nonprofit corporation formed
under the Washington Nonprofit Corporation Act, RCW Chapter 24.03,
formerly known as RTO West.

1.1.8 "[Director]{.underline}[]{#__RefHeading___Toc124341840 .anchor}"
means a member of the Board of Directors.

1.1.9 "[Disputing Party]{.underline}[]{#__RefHeading___Toc124341841
.anchor}" means a Person that is subject to these Bylaws that has

> \(i\) initiated a dispute under the Bylaws Dispute Resolution
> Provisions by delivering notice of a demand for arbitration to the
> Corporation;

{*Section 1.1.9 continued . . .*}

> \(ii\) been named as a responding party in an arbitration demand
> issued under the Bylaws Dispute Resolution Provisions by another
> Person that is subject to these Bylaws; or
>
> \(iii\) been granted intervener status by the arbitrator(s) selected
> to arbitrate a dispute under the Bylaws Dispute Resolution Provisions.

1.1.10 "[End-Use Consumer]{.underline}[]{#__RefHeading___Toc124341842
.anchor}" means a Large Bundled End-Use Consumer, a Large Unbundled
End-Use Consumer, or a Consumer Advocate.

1.1.11 "[FERC]{.underline}[]{#__RefHeading___Toc124341843 .anchor}"
means the Federal Energy Regulatory Commission, or any successor agency.

1.1.12 "[FPA]{.underline}[]{#__RefHeading___Toc124341844 .anchor}" means
the Federal Power Act, 16 USC § 792, [et seq.]{.underline}, as amended
from time to time.

1.1.13 "[Generator]{.underline}[]{#__RefHeading___Toc124341845 .anchor}"
means any entity, including, but not limited to,

> (i) an Exempt Wholesale Generator ("EWG") as such term is defined in
> Section 32(a)(1) of the Public Utility Holding Company Act of 1935,
> 15 USC § 79z-5a(a)(1);
>
> (ii) an Independent Power Producer, which means any nonutility
> generator that is involved in the ownership or operation of one or
> more electric generating facilities on a merchant plant basis;
>
> (iii) a Qualifying Small Power Producer as such term is defined in
> Section 3(17)(D) of the FPA, 16 USC § 796(17)(D); or
>
> (iv) a Qualifying Cogenerator as such term is defined in
> Section 3(18)(C) of the FPA, 16 USC § 796(18)(C),
>
> that is not a Large Generating End-Use Consumer and that owns, leases,
> or otherwise exercises operational control over one (1) or more
> electric generating facilities (including any electric
> generating facilities on which significant construction has been
> completed) that
>
> \(a\) have (or, upon completion of construction and commencement of
> commercial operation, will have) an aggregate net generating capacity
> of not less than ten (10) MW; and 
>
> \(b\) are (or, upon completion of construction and commencement of
> commercial operation, will be) either located in or dynamically
> scheduled into the Geographic Area;

{*Section 1.1.13 continued . . .*}

[provided]{.underline}, [however]{.underline}, that no Power Marketer
shall be deemed to be a Generator solely by virtue of its exercise of
the right to direct the production of any electric generating facility
that is physically controlled by an unaffiliated owner or operator.

1.1.14 "[Generators, Power Marketers, Large Generating End-Use
Consumers, and Others]{.underline}[]{#__RefHeading___Toc124341846
.anchor}" means any entity (including, but not limited to, any
Generator, Large Generating End-Use Consumer, or Power Marketer), other
than a Major Transmitting Utility, Transmission-Dependent Utility, State
or Provincial Energy Authority, Tribe, or Certain Public Interest Group,
and other than an End-Use Consumer (except as provided by Section
5.2.2(iii)), that

> (i) is entitled to apply to FERC for an order requiring
> interconnection or transmission services pursuant to Sections 210 or
> 211 of the FPA, or that would be entitled to apply for such an order
> were it doing business within the United States, or that is a
> marketing affiliate of any such non-U.S. entity seeking transmission
> services, or that receives interconnection or transmission services
> from a Canadian transmission provider; and
>
> \(ii\) contributes to load service needs or system reliability, or
> otherwise has an interest in the facilities operated by Grid West,
> within the Geographic Area because the entity
>
> \(a\) engages in purchases or sales of electric power that is
> scheduled for delivery within, into, or from the Geographic Area;
>
> \(b\) engages in development of facilities for the production of
> electric power for delivery within, into, or from the Geographic Area;
> or
>
> \(c\) is a transmission customer of Grid West or of a Major
> Transmitting Utility that has executed a Transmission Agreement.

An entity may demonstrate that it satisfies the requirements of
Section 1.1.14(ii)(b) by documenting one or more of the following with
respect to a facility for the production of electric power for delivery
within, into, or from the Geographic Area:

> \(1\) a completed, pending request for generator interconnection,
> together with a nonrefundable deposit or payment of feasibility or
> interconnection study funds; or
>
> \(2\) a completed, pending request for transmission service, together
> with deposit(s); or

{*Section 1.1.14 continued . . .*}

> \(3\) completion of significant construction on one or more electric
> generating facilities that, upon completion of construction and
> commencement of commercial operation, will have an aggregate net
> generating capacity of not less than ten (10) MW.

1.1.15 "[Geographic Area]{.underline}[]{#__RefHeading___Toc124341847
.anchor}" means the portions of the provinces of Alberta and British
Columbia and of the states of Idaho, Montana, Nevada, Oregon, Utah,
Washington, and Wyoming that are electrically within the Western
Interconnection, together with any additional geographic territory
within the state of California that is encompassed by the control areas
of the Bonneville Power Administration, PacifiCorp, and Sierra Pacific
Power Company as of the effective date of these Bylaws. The Geographic
Area may be expanded (but not diminished) by a vote of the Board of
Directors under Section 7.9.1, so long as any territory added to the
Geographic Area is electrically within the Western Interconnection.

1.1.16 "[Governmental
Committee]{.underline}[]{#__RefHeading___Toc124341848 .anchor}" has the
meaning specified in Section 8.6.

1.1.17 "[Grid West Basic
Features]{.underline}[]{#__RefHeading___Toc124341849 .anchor}" means the
elements of market and operations design for Grid West developed through
the efforts of the Grid West Transmission Service Liaison Group, as
described in the Grid West Integrated Proposal Description dated
July 22, 2005 and as subsequently modified by the technical feasibility
assessment conducted November 2005 to January 2006, subject to any
additions or further modifications that the Board of Directors
determines in its sole discretion are (i) necessary to the workability
of one or more design elements in view of existing regulatory, market,
and operational conditions at the time of implementation, or
(ii) superior to one or more design elements as described in the Grid
West Integrated Proposal Description (including subsequent modifications
resulting from the technical feasibility assessment)
[provided]{.underline}, [however]{.underline}, that the Board of
Directors may not modify the Grid West Basic Features to include
elements covered by the "Special Issues List" provisions of Section 7.16
without first complying with the requirements set forth in Section 7.16.

1.1.18 "[Grid West Website]{.underline}[]{#__RefHeading___Toc124341850
.anchor}" means an Internet site through which the Corporation makes
available information and notices concerning its business, operations,
and services.

1.1.19 "[Indemnitee]{.underline}[]{#__RefHeading___Toc124341851
.anchor}" means an individual made a party to a proceeding because the
individual is or was a Director, officer, employee, or agent of the
Corporation, and who possesses indemnification rights pursuant to the
Articles of Incorporation, these Bylaws, or other corporate action. An
employee or agent shall not be considered an Indemnitee pursuant to the
Articles of Incorporation or these Bylaws unless the Board of Directors
has exercised its power to provide indemnification to employees and
agents generally or with respect to the particular employee or agent
involved in the proceeding. Indemnitee shall also include the heirs,
executors, and other successors in interest of such individuals.

1.1.20 "[Independent Transmission
Company]{.underline}[]{#__RefHeading___Toc124341852 .anchor}" means a
transmission company meeting the independence requirements established
by FERC Order No. 2000, 89 FERC ¶ 61,285 (Dec. 20, 1999), and all
supplements and amendments thereto issued by FERC.

1.1.21 "[Interim Board]{.underline}[]{#__RefHeading___Toc124341853
.anchor}" means the interim board of directors as defined in Article IV.

1.1.22 "[Large Bundled End-Use
Consumer]{.underline}[]{#__RefHeading___Toc124341854 .anchor}" means an
end-use consumer of electric power that

> \(i\) is not a Member of any of the following Member Classes: Major
> Transmitting Utilities; Transmission-Dependent Utilities; Generators,
> Power Marketers, Large Generating End-Use Consumers, and Others
> (except as otherwise permitted under Section 5.2.2(iii)); or State and
> Provincial Energy Authority/Tribes/Certain Public Interest Groups;
>
> \(ii\) individually and together with all of its Affiliates had,
> during the calendar year immediately preceding the relevant time, an
> aggregate retail electric load (not including electrical load for
> generator start-up or station service purposes) within the Geographic
> Area greater than or equal to five (5) aMW; and
>
> \(iii\) purchases more than half of its power supply consumed within
> the Geographic Area solely from its legally authorized local electric
> or distribution utility(ies); [provided]{.underline},
> [however]{.underline}, that if there is a pending dispute concerning
> the authority of its local electric or distribution utility(ies) to
> provide local electric or distribution service to the applicant or
> Member, then the applicant or Member shall be assigned to the Member
> Sub-Class designated (Large Bundled End-Use Consumer or Large
> Unbundled End-Use Consumer) on the application pending resolution of
> the dispute. Thereafter, the Secretary of the Corporation shall assign
> the Member to the Member Class or Member Sub-Class consistent with the
> resolution of the dispute concerning the authority of its local
> electric or distribution utility(ies) to provide local electric or
> distribution service by settlement of the parties or by a court with
> jurisdiction; [provided]{.underline}, [however]{.underline}, that
> nothing in this Section 1.1.22(iii) precludes challenges on other
> grounds under Section 5.5.3 or resulting reassignment.

1.1.23 "[Large Generating End-Use
Consumer]{.underline}[]{#__RefHeading___Toc124341855 .anchor}" means a
Large Bundled End-Use Consumer or a Large Unbundled End-Use Consumer
that owns and operates in the Geographic Area one (1) or more Qualifying
Cogeneration Facilities (as such term is defined in 16 USC § 796(18)(B))
that

> \(i\) have an aggregate net generating capacity of not less than ten
> (10) MW; and
>
> \(ii\) are in each instance located in proximity to, and electrically
> interconnected with, one (1) or more manufacturing or other industrial
> production facilities of such consumer at which electric power is
> consumed on an end-use basis.

1.1.24 "[Large TDU]{.underline}"[]{#__RefHeading___Toc124341856 .anchor}
means a member of the group of those Transmission-Dependent Utilities
that, when taken together, make up the minimum number of
Transmission-Dependent Utilities that can account for at least fifty
percent (50%) of the total amount (measured by MW-hours delivered) of
Qualifying Load served by all Transmission-Dependent Utilities during
the preceding year ("Total Qualifying Load"). For purposes of this
definition, "Qualifying Load" means

> \(i\) retail load (sales not for resale), including energy delivered
> to an end-use customer located in the service area of the delivering
> Transmission-Dependent Utility that is not purchased from such
> delivering utility; and
>
> \(ii\) a Transmission-Dependent Utility's wholesale sales to its
> members, if the Transmission-Dependent Utility is a joint operating
> agency, joint operating entity, generation and transmission
> cooperative, entity formed under an interlocal cooperation act, or
> comparable entity.

Those Transmission-Dependent Utilities that are to be designated as
Large TDUs are identified by establishing a rank order of all
Transmission-Dependent Utilities that are Members, with the
Transmission-Dependent Utility that served the largest amount of the
Total Qualifying Load ranked first, the Transmission-Dependent Utility
that served the second-largest amount of the Total Qualifying Load
ranked second, and so forth. The minimum number of
Transmission-Dependent Utilities that can together account for at least
fifty percent (50%) of the Total Qualifying Load is determined by
beginning with the Transmission-Dependent Utility that served the
largest amount of the Total Qualifying Load and continuing down through
the ranking, including all Transmission-Dependent Utilities (but no more
than those) necessary to account for at least fifty percent (50%) of the
Total Qualifying Load. Any Transmission-Dependent Utility that would
otherwise be a Small TDU shall be a Large TDU if the
Transmission-Dependent Utility is a joint operating agency, joint
operating entity, generation and transmission cooperative, entity formed
under an interlocal cooperation act, or comparable entity with
Qualifying Load greater than one million two hundred fifty thousand
(1,250,000) MW-hours during the preceding year. In addition, a
Transmission-Dependent Utility that would otherwise be a Small TDU may
participate as a Large TDU if

> \(a\) it submits a request to the Large TDUs that it be designated as
> a Large TDU;
>
> \(b\) the Large TDUs invite the requesting Small TDU to participate as
> a Large TDU;
>
> \(c\) the Small TDU accepts such invitation; and
>
> \(d\) the Large TDUs notify the Secretary of the Corporation.

1.1.25 "[Large Unbundled End-Use
Consumer]{.underline}[]{#__RefHeading___Toc124341857 .anchor}" means an
end-use consumer of electric power that

> \(i\) is not a Member of any of the following Member Classes: Major
> Transmitting Utilities; Transmission-Dependent Utilities; Generators,
> Power Marketers, Large Generating End-Use Consumers, and Others
> (except as otherwise permitted under Section 5.2.2(iii)); or State and
> Provincial Energy Authority/Tribes/Certain Public Interest Groups;
>
> (ii)  individually and together with all of its Affiliates had, during
> the calendar year immediately preceding the relevant time, an
> aggregate retail electric load (not including electrical load for
> generator start-up or station service purposes) within the Geographic
> Area greater than or equal to five (5) aMW;
>
> \(iii\) does not purchase more than half of its power supply consumed
> within the Geographic Area solely from its legally authorized local
> electric or distribution utility(ies); and
>
> \(iv\) either
>
> \(a\) is authorized to purchase unbundled transmission services
> pursuant to
>
> \(1\) an unbundled retail transmission access program authorized or
> instituted by competent jurisdiction under applicable law, or
>
> \(2\) an agreement with the retail utility that formerly provided the
> power supply to the End-Use Consumer; [provided]{.underline},
> [however]{.underline}, that if there is a pending dispute concerning
> the authority of its local electric or distribution utility(ies) to
> provide local electric or distribution service to the applicant or
> Member or to authorize or allow unbundled retail access, then the
> applicant or Member shall be assigned to the Member Sub-Class (Large
> Bundled End-Use Consumer or Large Unbundled End-Use Consumer)
> designated on the application pending resolution of the dispute.
> Thereafter, the Secretary of the Corporation shall assign the Member
> to the Member Class or Member Sub-Class consistent with the resolution
> of the dispute concerning the authority of its local electric or
> distribution utility(ies) to provide local electric or distribution
> service by settlement of the parties or by a court with jurisdiction;
> [provided]{.underline}, [however]{.underline}, that nothing in this
> subsection (iv) precludes challenges on other grounds under Section
> 5.6 or resulting reassignment; or
>
> \(b\) is a "direct service industrial customer," which means a direct
> service industry to which the Bonneville Power Administration is
> authorized to sell power under the Pacific Northwest Electric Power
> Planning and Conservation Act.

1.1.26 "[Major Transmitting
Utility]{.underline}"[]{#__RefHeading___Toc124341858 .anchor} means

> \(i\) an entity that owns at least five hundred fifty (550) pole miles
> of electric transmission facilities within the Geographic Area over
> which transmission services are offered to all eligible customers
> pursuant to a "qualifying tariff" (as defined below);
>
> \(ii\) an entity that
>
> \(a\) owns a number of pole miles of electric transmission facilities
> within the Geographic Area greater than zero (0) but less than five
> hundred fifty (550) over which transmission services are offered to
> all eligible customers pursuant to a qualifying tariff and
>
> \(b\) is not a Generator as defined in Section 1.1.13 and is not a
> municipality; municipal utility; public utility district; people's
> utility district; cooperative corporation; joint operating agency,
> joint operating entity, joint powers authority, entity formed under an
> interlocal cooperation act, or comparable entity; irrigation district;
> mutual association; or tribal utility; or
>
> \(iii\) an entity engaged in development and ownership of electric
> transmission facilities that has completed substantial construction on
> transmission infrastructure if
>
> \(a\) upon completion of that construction and commencement of
> commercial operation, the entity will qualify as a Major Transmitting
> Utility under Section 1.1.26(i) or (ii) and
>
> \(b\) the entity has provided documentation satisfactory to the Board
> of Directors that transmission services over its electric transmission
> facilities will be offered to all eligible customers pursuant to a
> qualifying tariff.

For purposes of this Section 1.1.26, a "qualifying tariff" is

> \(1\) a Grid West tariff;
>
> \(2\) a FERC-approved open-access transmission tariff;
>
> \(3\) a FERC-approved reciprocity open-access transmission tariff; or
>
> \(4\) if the applicable electric transmission facilities are within
> Canada, a tariff equivalent to an open-access transmission tariff.

1.1.27 "[Market Participant]{.underline}[]{#__RefHeading___Toc124341859
.anchor}" means any entity that, either directly or through an
Affiliate, sells or brokers electric energy, is the owner or operator of
transmission facilities, or provides transmission services within the
Geographic Area.

1.1.28 "[Member]{.underline}[]{#__RefHeading___Toc124341860 .anchor}"
means any Person that has become a Member of the Corporation under and
in accordance with the provisions of Article V of these Bylaws, and that
has not resigned or been terminated from membership in the Corporation.

1.1.29 "[Member Class]{.underline}[]{#__RefHeading___Toc124341861
.anchor}" shall have the meaning set forth in Section 5.2.1 of these
Bylaws.

1.1.30 "[Member Sub-Class]{.underline}[]{#__RefHeading___Toc124341862
.anchor}" means a sub-class of Members in any Member Class.

1.1.31 "[Members Representative Committee]{.underline}" or
"[MRC]{.underline}[]{#__RefHeading___Toc124341863 .anchor}" shall mean
the committee described in Article VI.

1.1.32 "[NWPCC]{.underline}[]{#__RefHeading___Toc124341864 .anchor}"
means the Northwest Power and Conservation Council, or any successor
organization.

1.1.33 "[Participating
Jurisdiction]{.underline}[]{#__RefHeading___Toc124341865 .anchor}" means
any state (other than California) or province, all or any portion of
which is located within the Geographic Area.

1.1.34 "[Person]{.underline}[]{#__RefHeading___Toc124341866 .anchor}"
means an individual, corporation, cooperative corporation, municipal
corporation, quasi-municipal corporation, limited liability company,
mutual association, partnership, limited partnership, limited liability
partnership, association, joint stock company, trust, unincorporated
organization, government entity or political subdivision thereof, or
organization recognized as a legal entity by law in the United States or
Canada.

1.1.35 "[Power Marketer]{.underline}[]{#__RefHeading___Toc124341867
.anchor}" means a wholesale power marketer that is authorized by FERC to
sell electric power at market-based rates and that does not own,
control, or operate any electric generation, transmission, or
distribution facilities.

1.1.36 "[Proceeding]{.underline}[]{#__RefHeading___Toc124341868
.anchor}" means any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative,
and whether formal or informal.

1.1.37 "[RCW]{.underline}[]{#__RefHeading___Toc124341869 .anchor}" means
the Revised Code of Washington, as amended from time to time.

1.1.38 "[Related Person]{.underline}[]{#__RefHeading___Toc124341870
.anchor}" of an individual means all of the following: an individual's
spouse, domestic partner, parents (including stepparents and in-laws),
children (including stepchildren and in-laws), and siblings (including
stepsiblings and in-laws).

1.1.39 "[Small TDU]{.underline}"[]{#__RefHeading___Toc124341871 .anchor}
means any Transmission-Dependent Utility that is not designated as a
Large TDU pursuant to Section 1.1.24.

1.1.40 "[State or Provincial Energy
Authority]{.underline}[]{#__RefHeading___Toc124341872 .anchor}" means

> \(i\) the utilities regulatory commission of each Participating
> Jurisdiction;
>
> \(ii\) any other state or provincial agency, ministry, or department
> in any Participating Jurisdiction that has siting, energy policy, or
> resource planning authority with regard to electrical energy, and that
> is designated by the governor or premier of a Participating
> Jurisdiction, by notice to the Secretary of the Corporation, as a
> Member in the State and Provincial Energy Authority Class, each of the
> foregoing subject to the limitations of Section 5.3.3; and
>
> \(iii\) the NWPCC.

1.1.41 "[Supermajority Board
Vote]{.underline}[]{#__RefHeading___Toc124341873 .anchor}" means the
following:

> \(i\) the affirmative vote of at least four (4) Directors during any
> time that the Board of Directors consists of five (5) Directors;
>
> \(ii\) the affirmative vote of at least five (5) Directors during any
> time that the Board of Directors consists of seven (7) Directors; and
>
> \(iii\) the affirmative vote of at least seven (7) Directors during
> any time that the Board of Directors consists of nine (9) Directors.

1.1.42 "[Transmission-Dependent
Utility]{.underline}[]{#__RefHeading___Toc124341874 .anchor}" means any
municipality; municipal utility; public utility district; people's
utility district; cooperative corporation; joint operating agency, joint
operating entity, joint powers authority, entity formed under an
interlocal cooperation act, or comparable entity; irrigation district;
mutual association; or tribal utility that

> \(i\) furnishes electric services over an electric transmission or
> distribution system (whether its own or its members') located within
> the Geographic Area; and
>
> \(ii\) is not a Major Transmitting Utility.

1.1.43 "[Transmission
Agreements]{.underline}[]{#__RefHeading___Toc124341875 .anchor}" means
the agreements executed by the Corporation with transmission owners or
operators that, when effective, will allow the Corporation to perform
services over or with respect to the transmission owners' or operators'
transmission facilities that fully implement the Grid West Basic
Features, as such agreements may be amended from time to time;
[provided]{.underline}, [however]{.underline}, that nothing in these
Bylaws shall require all of the Grid West Basic Features to be initiated
simultaneously.

1.1.44 "[Tribe]{.underline}[]{#__RefHeading___Toc124341876 .anchor}"
means a tribe or first nation recognized under applicable U.S. or
Canadian federal law that has trust lands or traditional homelands with
an official current address recognized by the U.S. Department of the
Interior within the U.S. portion of the Geographic Area or reserve lands
or lands allocated to the first nation by treaty located within the
Canadian portion of the Geographic Area.

**ARTICLE II\
\
OFFICES**[]{#__RefHeading___Toc124341877 .anchor}

The principal executive office of the Corporation shall be located at
such place as the Board of Directors may from time to time designate.
Additional offices may be established and maintained at such place or
places as the Board of Directors may from time to time designate.

# ARTICLE III  PURPOSES AND LIMITATIONS

3.1 [Purposes]{.underline}[]{#__RefHeading___Toc124341879 .anchor}. The
purposes for which the Corporation is formed are to serve as an
independent transmission entity within the Geographic Area that
endeavors to improve reliability of the regional transmission grid and
efficiency in its use, to provide nondiscriminatory access to
transmission services and related markets, to provide cost-effective
regional transmission planning and expansion, to develop solutions to
operational and commercial problems resulting from limited transmission
capacity, to support and establish effective monitoring and mitigation
of market power abuses and market manipulation within the Geographic
Area, and to support effective monitoring of markets and transmission
and related services within the Western Interconnection, all in
accordance with these Bylaws, the Articles of Incorporation, and the
applicable requirements of federal and state law*,* and to endeavor to
provide sustainable customer benefits. In carrying out the foregoing,
the Corporation shall take into account environmental stewardship,
regional interests, and cost-effectiveness.

3.2 [Limitations]{.underline}[]{#__RefHeading___Toc124341880 .anchor}.

3.2.1 Ownership and Operational
Limitations.[]{#__RefHeading___Toc124341881 .anchor} The Corporation
will not

> \(i\) own any transmission or distribution facilities;
>
> \(ii\) own any interest in generation facilities;
>
> \(iii\) own any interest in generation output (except generation
> output as appropriate to meet its obligations
>
> \(a\) with respect to congestion management, and
>
> \(b\) as a control area operator); or

{*Section 3.2.1 continued . . .*}

> \(iv\) operate, or have any financial interest in, a power or energy
> exchange in which participation by buyers and sellers of electricity
> is mandatory; [provided]{.underline}, [however]{.underline}, the
> Corporation may provide mandatory participation rules for those
> entities that voluntarily agree to allow the Corporation to operate
> its control area.

3.2.2 [Rate Design of Pre-Existing Long-Term Transmission
Rights]{.underline}[]{#__RefHeading___Toc124341882 .anchor}. The
Corporation may not unilaterally impose, or apply to FERC to impose,
changes to a transmission owner's rate design applicable to pre-existing
long-term transmission rights. For purposes of this Section 3.2.2, the
term "pre-existing long-term transmission rights"

> \(i\) means transmission rights
>
> \(a\) with durations of one year or longer;
>
> \(b\) that are in effect as of the date the Board of Directors makes
> the determination described in Section 7.1.1(v);
>
> \(c\) that are held by customers of transmission owners that enter
> into Transmission Agreements with the Corporation or that relate to a
> transmission owner's use of its own system to meet load service
> obligations;
>
> \(ii\) includes rollover rights to the extent that
>
> \(a\) the agreement or tariff under which the transmission rights are
> granted provides for rollover;
>
> \(b\) the transmission rights relate to a transmission owner's use of
> its own system to meet load service obligations; and
>
> \(iii\) includes load growth rights to the extent that
>
> \(a\) the agreement or tariff under which the transmission rights are
> granted provides for load growth; or
>
> \(b\) the transmission rights relate to a transmission owner's use of
> its own system to meet load service obligations.

**ARTICLE IV\
**

**INTERIM BOARD**[]{#__RefHeading___Toc124341883 .anchor}

4.1 [Number and
Qualifications]{.underline}[]{#__RefHeading___Toc124341884 .anchor}. The
Interim Board shall consist of no fewer than three (3) members and no
more than seven (7) members. No person may serve as an Interim Board
member unless that person is affiliated with a transmission owner or
operator that is a party to a funding agreement with the Corporation as
of the date these Bylaws are adopted.

4.2 [Initial Interim Board and Term of
Office]{.underline}[]{#__RefHeading___Toc124341885 .anchor}. The Interim
Board members as of the date these Bylaws are adopted are: Frank
Afranji, Randall O. Cloward, H. Charles Durick, Cameron Lusztig, Mark W.
Maher, James McMorran, and Ted D. Williams. The Interim Board shall
serve from the date these Bylaws are adopted until the first Board of
Directors is elected under Article VII.

4.3 [Authorities and Responsibilities of Interim
Board]{.underline}[]{#__RefHeading___Toc124341886 .anchor}. Except as
otherwise limited by Section 4.4, the Interim Board shall have the
authority and responsibility to manage the affairs of the Corporation in
accordance with the purposes and limitations set forth in Article III,
including without limitation the authority to:

> \(i\) authorize the Corporation to enter into one or more agreements
> to provide funding for its activities and operations;
>
> \(ii\) admit new Members in accordance with the provisions of
> Section 5.3;
>
> \(iii\) ratify actions taken before the adoption of these Bylaws to
> engage, and maintain the engagement of, Russell Reynolds Associates to
> develop a slate of qualified potential nominees for election to the
> initial Board of Directors; and
>
> \(iv\) enter into consulting agreements as it deems appropriate to
> facilitate continued development of the Grid West Basic Features and
> to engage in public process and outreach activities associated with
> that development, so long as any consulting agreement may be
> terminated without liability to Grid West at any time after the Board
> of Directors takes office.

4.4 [Limitations on Interim
Board]{.underline}[]{#__RefHeading___Toc124341887 .anchor}. The Interim
Board may not authorize the Corporation to execute Transmission
Agreements and may not authorize the Corporation to act as a
transmission provider.

4.5 [Resignation and Removal of Interim Board
Members]{.underline}[]{#__RefHeading___Toc124341888 .anchor}. Any
Interim Board member may resign from office at any time by providing
written notice to the Secretary of the Corporation. Any Interim Board
member may be removed from office by the affirmative vote of the
majority of Interim Board members then in office.

4.6 [Interim Board Vacancies]{.underline}[]{#__RefHeading___Toc124341889
.anchor}. The Interim Board may fill any vacancy on the Interim Board by
an affirmative vote of the majority of Interim Board members then
remaining in office, provided that the person elected to fill the
vacancy meets the requirements set forth in Section 4.1 and has
consented to serve on the Interim Board. If the Interim Board chooses
not to fill a vacancy, then the size of the Interim Board shall be
reduced to the number of Interim Board members remaining in office at
the time of the Interim Board's decision not to fill the vacancy, so
long as the Interim Board continues to have at least three (3) members.

4.7 [Compensation of Interim Board
Members]{.underline}[]{#__RefHeading___Toc124341890 .anchor}. Interim
Board members shall not receive compensation from the Corporation
whether as a Board member or an officer. While serving on the Interim
Board, an Interim Board member may not be an employee of the Corporation
or a consultant to the Corporation. Notwithstanding the provisions of
Section 7.15.4, an Interim Board member may serve as an officer of the
Corporation.

4.8 [Prohibition Against Gifts and Loans to Interim Board
Members]{.underline}[]{#__RefHeading___Toc124341891 .anchor}. The
Corporation shall not make any gift or loan of money or property to or
guarantee the obligation of any Interim Board member or Related Person
of an Interim Board member.

4.9 [Interim Board Conduct
Rules]{.underline}[]{#__RefHeading___Toc124341892 .anchor}. The conduct
rules for the Interim Board are set forth in Attachment A.

4.10 [Notice of Meetings of the Interim
Board]{.underline}[]{#__RefHeading___Toc124341893 .anchor}. Notice of
meetings of the Interim Board shall be given to the Interim Board
members not less than ten (10) days before the meeting if delivered by
first-class mail or not less than three (3) days before the meeting if
the notice is delivered personally, by telephone, by facsimile, or by
electronic mail.

4.11 [Waivers of Interim Board Meeting
Notice]{.underline}[]{#__RefHeading___Toc124341894 .anchor}. The notice
requirements contained in Section 4.10 may be waived in writing by any
Interim Board member with respect to himself or herself, either before
or after the meeting. The attendance by any Interim Board member at a
meeting shall constitute a waiver of notice of such meeting except when
the Interim Board member attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting is not
lawfully called or convened. All waivers shall be made part of the
minutes of the meetings.

4.12 [Attendance at Interim Board
Meetings]{.underline}[]{#__RefHeading___Toc124341895 .anchor}. Interim
Board members may participate in an Interim Board meeting through the
use of conference telephone, electronic video screen communication, or
similar communications equipment, so long as all Interim Board members
participating in the meeting can hear one another at the same time.
Participation in a meeting pursuant to this Section 4.12 shall
constitute presence in person at the meeting.

4.13 [Quorum of Interim
Board]{.underline}[]{#__RefHeading___Toc124341896 .anchor}. A majority
of the Interim Board members then in office shall constitute a quorum. A
meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of Interim Board members if any
action taken is approved by the required number of Interim Board members
as specified in these Bylaws. A majority of the Interim Board members
then present, whether or not constituting a quorum, may adjourn any
meeting to another time and place.

4.14 [Voting of Interim
Board]{.underline}[]{#__RefHeading___Toc124341897 .anchor}. The
affirmative vote of a majority of the Interim Board members then in
office shall be the act of the Interim Board. Each Interim Board member
shall have one (1) vote. Interim Board members may not vote by proxy.
The Interim Board may, subject to any applicable law, take any action
without a meeting if a consent in the form of a record, setting forth
the action so taken, shall be signed by all of the Interim Board members
then in office.

**ARTICLE V\
\
MEMBERS**[]{#__RefHeading___Toc124341898 .anchor}

5.1 [Powers and Rights of
Members]{.underline}[]{#__RefHeading___Toc124341899 .anchor}. The
Members shall, subject to these Bylaws and applicable law, have the
rights and powers listed in Sections 5.1.1 through 5.1.3:

5.1.1 [Exclusive Member
Rights]{.underline}[]{#__RefHeading___Toc124341900 .anchor}. The Members
shall have the exclusive right and power to

> \(i\) participate in general Member advisory votes submitted to the
> Members by the Board of Directors pursuant to Section 5.15.1;
>
> \(ii\) nominate and elect members of the MRC pursuant to Section 6.3;
>
> \(iii\) remove members of the MRC without cause pursuant to
> Section 6.6;
>
> \(iv\) participate in and constitute a majority of members on the
> Corporation's Budget Committee pursuant to Section 8.4;
>
> \(v\) appoint representatives to participate in the Board Advisory
> Committee pursuant to Section 8.5.1;
>
> \(vi\) approve amendments of these Bylaws proposed by the Board of
> Directors pursuant to Section 12.5.2; and
>
> \(vii\) express concern about and require a greater Board of Directors
> vote to approve a proposal Members consider to be a major change in
> scope pursuant to Section 7.17.

5.1.2 [Nonexclusive Member Rights and
Powers]{.underline}.[]{#__RefHeading___Toc124341901 .anchor} The Members
shall have the nonexclusive right and power to

> \(i\) remove members of the MRC for cause pursuant to Section 6.6;
>
> \(ii\) propose candidates for election as Directors pursuant to
> Section 7.2.2(i);

{*Section 5.1.2 continued . . .*}

> \(iii\) nominate candidates for advisory committees pursuant to
> Section 8.2.2;
>
> \(iv\) review the Corporation's statements of accounts and finances
> available at the Corporation's office pursuant to Section 10.1;
>
> \(v\) receive and review annual and quarterly reports delivered to
> Members by Directors pursuant to Section 10.2.3;
>
> \(vi\) approve the dissolution of the Corporation pursuant to
> Section 12.4.1;
>
> \(vii\) approve any proposed merger or disposition of significant
> assets pursuant to Section 12.4.5;
>
> \(viii\) propose and approve amendments to these Bylaws pursuant to
> Section 12.5.3;
>
> \(ix\) resolve disputes concerning these Bylaws pursuant to
> Article XIII; and
>
> \(x\) amend the Articles of Incorporation pursuant to the provisions
> therein.

5.1.3 [Additional Member
Rights]{.underline}.[]{#__RefHeading___Toc124341902 .anchor}

> \(i\) The Members shall have the nonexclusive right to receive notices
> of and attend and be heard at meetings of the Members and the Board of
> Directors as provided in these Bylaws, and to provide guidance to the
> Board of Directors through advisory votes requested by the Board of
> Directors, by resolutions, and by other means as determined by the
> Members.
>
> \(ii\) The Members shall have the nonexclusive right to require the
> Directors to designate a particular independent accountant if
> dissatisfied with the Directors' selection; and
>
> \(iii\) The Members shall have the nonexclusive right to require the
> Directors to perform an independent audit within a specified time.

5.2 [Classes of Members]{.underline}[]{#__RefHeading___Toc124341903
.anchor}.

5.2.1 [Identification of Member
Classes]{.underline}[]{#__RefHeading___Toc124341904 .anchor}. The
Corporation shall have five (5) classes of Members (each such class, a
"Member Class") with the voting rights as set forth in these Bylaws:

{*Section 5.2.1 continued . . .*}

> \(i\) the Major Transmitting Utilities Member Class;
>
> \(ii\) the Transmission-Dependent Utilities Member Class, with the
> following Member Sub-Classes:
>
> \(a\) Large TDU Member Sub-Class, and
>
> \(b\) Small TDU Member Sub-Class;
>
> \(iii\) the Generators, Power Marketers, Large Generating End-Use
> Consumers, and Others Member Class, with the following Member
> Sub-Classes:
>
> \(a\) Generators Member Sub-Class,
>
> \(b\) Power Marketers and Others Member Sub-Class, and
>
> \(c\) Large Generating End-Use Consumers Member Sub-Class;
>
> \(iv\) the End-Use Consumers Member Class, with the following Member
> Sub-Classes:
>
> \(a\) Large Unbundled End-Use Consumers Member Sub-Class,
>
> \(b\) Large Bundled End-Use Consumers Member Sub-Class, and
>
> \(c\) Consumer Advocates Member Sub-Class; and
>
> \(v\) the State and Provincial Energy Authority/Tribes/Certain Public
> Interest Groups Member Class, with the following Member Sub-Classes:
>
> \(a\) State and Provincial Energy Authority Member Sub-Class,
>
> \(b\) Tribes Member Sub-Class, and
>
> \(c\) Certain Public Interest Groups Member Sub-Class.

5.2.2 [Member Class Assignment
Rules]{.underline}[]{#__RefHeading___Toc124341905 .anchor}. Subject to
the following limitations, any Person that has been determined, in
accordance with the provisions of Section 5.3, to be qualified to become
a Member shall be entitled to be a Member of the Member Class for which
it qualifies. No Member may be a Member of more than one (1) Member
Class or Member Sub-Class at any given time, and no Person may be a
Member if an Affiliate of such Person is already a Member. Unless
provided otherwise below, a Person that qualifies to be a Member shall
be assigned to a Member Class or Member Sub-Class according to the
following provisions;

{*Section 5.2.2 continued . . .*}

[provided]{.underline}, [however]{.underline}, that a Tribe may elect
among any of the Member Classes or Member Sub-Classes for which it
qualifies.

> \(i\) If an applicant or Member qualifies for both the Major
> Transmitting Utilities Member Class and any other Member Class, it
> shall be a Member of the Major Transmitting Utilities Member Class.
>
> \(ii\) If an applicant or Member qualifies for both the
> Transmission-Dependent Utilities Member Class and any Member Class
> other than the Major Transmitting Utilities Member Class, it shall be
> a Member of the Transmission-Dependent Utilities Member Class.
>
> \(iii\) If an applicant or Member qualifies for both the Generators,
> Power Marketers, Large Generating End-Use Consumers, and Others Member
> Class and the End-Use Consumers Member Class, the following rules
> shall apply:
>
> (a) If the applicant or Member qualifies as a Large Generating End-Use
> Consumer, it shall be entitled to be a Member of either the
> Generators, Power Marketers, Large Generating End-Use Consumers, and
> Others Member Class or the End-Use Consumers Member Class;
> [provided]{.underline}, [however]{.underline}, that once having
> elected membership in either of such Member Classes, the Member shall
> not (unless such Member no longer qualifies for the class in which it
> has elected membership) be entitled, for a period of three (3) years
> thereafter, to switch its membership to the other such class.
>
> \(b\) If the applicant or Member is not a Large Generating End-Use
> Consumer, but owns or operates in the Geographic Area one (1) or more
> generating facilities located in proximity to, and electrically
> interconnected with, one or more of such applicant's or Member's
> manufacturing or other industrial production facilities at which
> electric power is consumed on an end-use basis, then such applicant or
> Member shall be a Member of the End-Use Consumers Member Class.
>
> \(c\) In all other instances, if an applicant or Member qualifies for
> both the Generators, Power Marketers, Large Generating End-Use
> Consumers, and Others Member Class and the End-Use Consumers Member
> Class, the applicant or Member shall be a Member of the Generators,
> Power Marketers, Large Generating End-Use Consumers, and Others Member
> Class.
>
> \(iv\) If an applicant or Member qualifies for the Generators, Power
> Marketers, Large Generating End-Use Consumers, and Others Member Class
> but is not a Generator as defined in Section 1.1.13 and is not a Large
> Generating End-Use Consumer as defined in Section 1.1.23, the
> applicant shall be a Member of the Power Marketers and Others Member
> Sub-Class.

{*Section 5.2.2 continued . . .*}

> \(v\) If an applicant or Member qualifies for the End-Use Consumers
> Member Class, and only that Member Class, then it shall be a Member of
> the End-Use Consumers Member Class.
>
> \(vi\) If an applicant or Member qualifies for the State and
> Provincial Energy Authority/Tribes/Certain Public Interest Groups
> Member Class, and only that Member Class, it shall be a Member of the
> State and Provincial Energy Authority/Tribes/Certain Public Interest
> Groups Member Class, except that a Tribe may elect to be a Member of
> the State and Provincial Energy Authority/Tribes/Certain Public
> Interest Groups Member Class even if it qualifies for another class.
>
> \(vii\) If an applicant or Member qualifies for the State and
> Provincial Energy Authority Member Sub-Class and the Generators, Power
> Marketers, Large Generating End-Use Consumers, and Others Member
> Class, then it shall be a Member of the State and Provincial Energy
> Authority Member Sub-Class.

5.3 [Initial Members and Membership
Qualifications]{.underline}[]{#__RefHeading___Toc124341906 .anchor}.

1.  [Initial Members]{.underline}[]{#__RefHeading___Toc124341907
    .anchor}. The initial Members of the Corporation as of the date
    these Bylaws are adopted shall be as listed in Attachment B to these
    Bylaws. Each Member listed in Attachment B to these Bylaws shall
    remain a Member for the balance of the calendar year during which
    these Bylaws are adopted if the Member

> \(i\) is listed on Attachment B as having requested and received a
> waiver of membership fees;
>
> \(ii\) has paid its membership fee as of the date these Bylaws are
> adopted; or
>
> \(iii\) remits to the Corporation full payment of its membership fee
> within ten (10) days after receiving written notice from the
> Corporation that these Bylaws have been adopted and its membership fee
> is due.

Any Member described in Section 5.3.1(iii) that has not remitted full
payment of its membership fee within ten (10) days after receiving the
written notice described in Section 5.3.1(iii) shall be deemed to have
withdrawn from membership in the Corporation as of the eleventh (11^th^)
day following the notice described in Section 5.3.1(iii) unless by that
date the Secretary of the Corporation has received from that Member a
written request for additional time to remit full payment of its
membership fees. A Member listed in Attachment B that has not paid its
membership fee but has requested additional time to remit payment may
not participate in any Member vote or exercise any other right of
membership under these Bylaws until its membership fee has been paid in
full. Any Person that is deemed to have withdrawn from membership in the
Corporation by operation of this paragraph may reapply for membership in
the Corporation at any time.

2.  [General Qualifications for
    Membership]{.underline}.[]{#__RefHeading___Toc124341908 .anchor} No
    Person may become or be a Member unless

> \(i\) such Person is a Major Transmitting Utility; a
> Transmission-Dependent Utility; an entity within the definition of
> "Generators, Power Marketers, Large Generating End-Use Consumers, and
> Others"; an End-Use Consumer; a State or Provincial Energy Authority;
> a Tribe; or a Certain Public Interest Group; and
>
> \(ii\) such Person has timely paid the requisite initial and
> subsequent annual membership fees of \$1,000 each year; and,
> [provided]{.underline}, [however]{.underline}, that such fees shall be
> waived for State or Provincial Energy Authorities and one (1) Consumer
> Advocate in each Participating Jurisdiction; and
> [provided]{.underline}, [further]{.underline}, that upon their written
> request, the Board of Directors may waive or reduce such fees on a
> nondiscriminatory basis for Tribes or Certain Public Interest Groups
> that are applying for membership in the State and Provincial Energy
> Authority/Tribes/Certain Public Interest Groups Member Class.

3.  [Voting and *Ex Officio* Members from States and
    Provinces]{.underline}[]{#__RefHeading___Toc124341909 .anchor}. Any
    State or Provincial Energy Authority shall be admitted to
    membership, as a voting or *ex officio* (nonvoting) Member, upon
    giving notice to the Secretary of the Corporation of its intent to
    become a Member and whether it desires to be a voting or *ex
    officio* Member, together with the name, address, telephone number,
    facsimile number, and electronic mail address of the State or
    Provincial Energy Authority; the name of the State or Provincial
    Energy Authority chairperson or director or other individual who is
    authorized to send and receive notices on behalf of, and otherwise
    represent, such State or Provincial Energy Authority in all matters
    relating to its membership in the Corporation; and the name of an
    alternate for such individual; [provided]{.underline},
    [however]{.underline}, that no more than two (2) State or Provincial
    Energy Authorities from any given Participating Jurisdiction
    (without counting the NWPCC for this purpose) may be Members
    (whether voting or *ex officio*) at the same time; and
    [provided]{.underline}, [further]{.underline}, that the NWPCC shall
    be entitled to only one (1) membership in the State and Provincial
    Energy Authority Member Sub-Class (not one (1) membership per
    state).

4.  [Tribes Membership]{.underline}.[]{#__RefHeading___Toc124341910
    .anchor} Any Tribe shall be admitted to membership upon payment of
    the membership fee and giving notice to the Secretary of the
    Corporation of its intent to become a Member, together with the
    name, address, telephone number, facsimile number, and electronic
    mail address of the Tribe; the name of the tribal chairperson or
    director or other individual who is authorized to send and receive
    notices on behalf of, and otherwise represent, such Tribe in all
    matters relating to its membership in the Corporation; and the name
    of an alternate for such individual; [provided]{.underline},
    [however]{.underline}, that no Tribe may hold more than a single
    Member position in the Corporation at any time; and,
    [provided]{.underline}, [further]{.underline}, that if a Tribe
    requests a waiver of the membership fee, the Tribe shall not become
    a Member until the waiver has been granted and all other
    requirements set forth above are satisfied.

5.  [Notice of Acceptance of
    Membership]{.underline}.[]{#__RefHeading___Toc124341911 .anchor}
    Upon acceptance of the membership application of any entity to be a
    Member in any Member Class, the Secretary of the Corporation shall
    provide notice of such acceptance to each existing Member.

6.  [Certain Limitations on
    Membership]{.underline}.[]{#__RefHeading___Toc124341912 .anchor} No
    Affiliate of any Person that is a Member may be a Member at any time
    while such Person is a Member. A Person that is a Member and has as
    its members other Persons that are Members, such as a joint
    operating agency, a joint operating entity, entity formed under an
    interlocal cooperation act, or a generation and transmission
    cooperative, may not be in the same Member Sub-Class as any of its
    members.

7.  [List of Members]{.underline}.[]{#__RefHeading___Toc124341913
    .anchor} The Corporation shall maintain at all times a current list
    of the name and address of each Member, along with the name of the
    designated representative and alternate representative of each such
    Member, and Member Class assignment. The list shall be posted on the
    Grid West Website and updated periodically.

8.  [Member's Right to Replace Authorized
    Representative]{.underline}.[]{#__RefHeading___Toc124341914 .anchor}
    Any Member may at any time, effective upon notice to the Secretary
    of the Corporation, replace the individual who is authorized to
    represent such entity and to whom notices shall be sent, or the
    alternate for such individual.

9.  [Member Obligation to Report Changes in Qualification;
    Disqualification and Redesignation of Member
    Class]{.underline}.[]{#__RefHeading___Toc124341915 .anchor} Each
    Member has a continuing obligation to notify the Secretary of the
    Corporation of any material change in circumstances that would
    disqualify it from membership or require a redesignation of Member
    Class or Member Sub-Class. The Secretary of the Corporation shall
    establish procedures for review and determination of a Member's
    status and redesignation of Member Class or Member Sub-Class, where
    a Member fails to qualify for a Member Class or Member Sub-Class,
    or, if the Member no longer qualifies for any Member Class or Member
    Sub-Class, termination of Membership.

5.4 [Membership Dispute Resolution
Committee]{.underline}[]{#__RefHeading___Toc124341916 .anchor}.

1.  [Composition of Membership Dispute Resolution
    Committee]{.underline}[]{#__RefHeading___Toc124341917 .anchor}.
    There shall be a Membership Dispute Resolution Committee consisting
    of three (3) individuals. The initial members of the Membership
    Dispute Resolution Committee shall be Don Brookhyser, Malcolm
    McLellan, and Susan Ackerman.

2.  [Membership Dispute Resolution Committee
    Duties]{.underline}.[]{#__RefHeading___Toc124341918 .anchor} The
    Membership Dispute Resolution Committee shall resolve all disputed
    membership applications, Member qualifications, and Member Class
    assignments. Membership Dispute Resolution Committee decisions are
    final and not appealable.

3.  [Vacancies on and Appointments to Membership Dispute Resolution
    Committee]{.underline}.[]{#__RefHeading___Toc124341919 .anchor}
    Vacancies on the Membership Dispute Resolution Committee shall be
    filled by majority vote of the remaining committee members if the
    MRC has not yet been elected and by majority vote of the MRC
    thereafter. Appointees should have a reputation for fairness and an
    ability to impartially apply the standards prescribed for resolution
    of a dispute. If any appointee is employed by or otherwise
    affiliated with a Member, that Member and the appointee shall
    represent in writing to the Secretary of the Corporation that the
    appointee is authorized and able to perform his or her duties on the
    Membership Dispute Resolution Committee in an independent

{*Section 5.4.3 continued . . .*}

and impartial manner, based solely on the merits of the dispute and the
standards for membership specified in these bylaws and without regard to
the interests of the Member with which the appointee is affiliated.

5.  [Membership Admission
    Procedures]{.underline}[]{#__RefHeading___Toc124341920 .anchor}.

5.5.1 [Application
Requirements]{.underline}.[]{#__RefHeading___Toc124341921 .anchor} Any
Person seeking membership shall submit an application to the
Corporation. The membership application of any Person shall specify the
name, address, telephone number, facsimile number, and electronic mail
address of the requesting Person; the Member Class in which such Person
desires to participate; a statement of the qualifications of such Person
for membership in such Member Class; the name of the individual who is
authorized to represent such Person in all matters relating to its
membership in the Corporation (including quorum counts, voting, and
sending and receiving notices on behalf of such entity); and the name of
an alternate for such individual.

5.5.2 [Acceptance or Rejection of Membership
Applications]{.underline}[]{#__RefHeading___Toc124341922 .anchor}. The
Secretary of the Corporation shall accept a completed membership
application that satisfies the requirements of Sections 5.3 and 5.5.1.

> \(i\) If the Secretary of the Corporation has any reason to believe
> that any particular application for membership is deficient, the
> Secretary of the Corporation may reject the application.
>
> \(ii\) If the Secretary of the Corporation has any reason to believe
> that an applicant has not satisfied the requirements of Section 5.3,
> the Secretary of the Corporation shall, within thirty (30) days after
> receipt of such applicant's completed membership application, so
> notify the applicant by first-class mail (with a copy by electronic
> mail to the applicant if the applicant has provided notice to the
> Secretary of the Corporation of its electronic mail address). If the
> applicant disputes the rejection, the dispute shall be submitted to
> and finally resolved by the Membership Dispute Resolution Committee.
>
> \(iii\) If the Secretary of the Corporation has any reason to believe
> that an applicant is not qualified to participate in the Member Class
> specified in the written notice from such applicant, but is qualified
> to participate in another Member Class, the Secretary of the
> Corporation shall, within thirty (30) days after receipt of such
> applicant's completed membership application, so notify the applicant
> by first-class mail (with a copy by electronic mail to the applicant
> if the applicant has provided notice to the Secretary of the
> Corporation of its electronic mail address). If the applicant does not
> object within fifteen (15) days to the redesignation of membership
> proposed by the Secretary of the Corporation, the membership
> application shall be redesignated for and accepted in such other
> Member Class. If the applicant does object to such redesignation
> within such fifteen- (15-) day period, the dispute shall be submitted
> to and finally resolved by the Membership Dispute Resolution
> Committee.

{*Section 5.5.2 continued . . .*}

> \(iv\) If the Secretary of the Corporation has reason to believe that
> any particular applicant is not qualified to participate in any Member
> Class, the Secretary of the Corporation shall, within thirty (30) days
> after receipt of such applicant's completed membership application,
> forward such application to the Board of Directors, which shall
> approve or reject such application. If the Board of Directors rejects
> the membership application of any such applicant, it shall send
> written notice to such applicant by first-class mail (with a copy by
> electronic mail to the applicant if the applicant has provided notice
> to the Secretary of the Corporation of its electronic mail address),
> specifying the reasons for such rejection. If the applicant objects to
> such rejection, the dispute shall be submitted to and finally resolved
> by the Membership Dispute Resolution Committee.

5.5.3 [Notice and Right to Challenge Membership
Decision]{.underline}[]{#__RefHeading___Toc124341923 .anchor}. After
posting of notice of acceptance of a Member and initial assignment to a
Member Class or Member Sub-Class to each existing Member by posting on
the Grid West Website, each existing Member may, at any time thereafter,
challenge the admission of such entity to membership in the Corporation
or in its designated Member Class. The Secretary of the Corporation
shall send notice of any such challenge to the entity by first-class
mail (with a copy by electronic mail to the entity if the entity has
provided notice to the Secretary of the Corporation of its electronic
mail address). Each entity whose admission in the Corporation or in such
Member Class has been challenged shall have the opportunity to respond
to the challenge by written submittal to the Board of Directors to be
filed on or prior to the twentieth (20th) day following such notice from
the Secretary of the Corporation. Any such challenge shall be submitted
to the Membership Dispute Resolution Committee for a final
determination.

5.6 [Member Status Pending Challenge
Resolution]{.underline}[]{#__RefHeading___Toc124341924 .anchor}. Pending
resolution by the Membership Dispute Resolution Committee of any
challenge to a Member's membership in the Corporation or in its
designated Member Class or Member Sub-Class, such Member shall be and
remain a Member in its designated Member Class or Member Sub-Class and
shall possess and be entitled to exercise each and all of the rights and
privileges of membership in the Corporation in such Member Class or
Member Sub-Class. The final determination of such challenge shall not
void the election of any members of the MRC, any decision of the MRC,
any decision of the Board of Directors, or any decision of the Members
made before such final determination involving the challenged Member
acting in its designated Member Class or Member Sub-Class. If the
challenged Member is determined in such dispute resolution proceeding
not to satisfy the qualifications for membership in the Corporation, the
membership of such Member and all of such Member's voting rights and
other rights of membership shall be terminated effective immediately
upon such determination. If the challenged Member is determined in such
dispute resolution proceeding not to satisfy the qualifications for
membership in the Member Class of which it is then a Member, but instead
to satisfy the qualifications for membership in another Member Class or
Member Sub-Class, such Member shall be reclassified into such other
Member Class or Member Sub-Class effective immediately upon such
determination.

5.7 [Termination of or Withdrawal from
Membership]{.underline}[]{#__RefHeading___Toc124341925 .anchor}.

5.7.1 [Termination for Failure to Pay Membership
Fees]{.underline}.[]{#__RefHeading___Toc124341926 .anchor} If any Member
fails to timely pay the annual membership fee due from such Member for
any year pursuant to the provisions of Section 5.3.2(ii), the Secretary
of the Corporation shall notify such Member by first-class mail,
addressed to the Member at the address provided to the Secretary of the
Corporation in accordance with the requirements of these Bylaws, that
the Corporation has not received such membership fee and that such
Member's membership in the Corporation shall be terminated if the fee is
not paid by such Member in full within forty-five (45) days after the
date of deposit of such notice in the U.S. mail. If payment of the full
amount of the membership fee is not received within such period, the
membership of such Member in the Corporation shall be terminated
immediately and without any further action upon the expiration of such
forty-five- (45-) day period, and the terminated Member shall cease to
have any rights whatsoever as a Member of the Corporation.
Notwithstanding any such termination of membership, all dispute
resolution proceedings and appeals that are in effect or pending as of
such termination shall remain in effect and shall be followed to
completion by the terminated Member and by other affected Members
pursuant to these Bylaws. Any Member that has been terminated from
membership in the Corporation may not reapply for membership for a
period of one (1) year from the date of such termination.

5.7.2 [Withdrawal from
Membership]{.underline}.[]{#__RefHeading___Toc124341927 .anchor} Any
Member may withdraw from the Corporation upon providing written notice
of its withdrawal to the Secretary of the Corporation. The withdrawal
shall be effective upon its receipt by the Secretary of the Corporation.
Notwithstanding such notice of withdrawal, all dispute resolution
proceedings and appeals that are in effect or pending as of the date of
the receipt by the Board of Directors of written notice of such
withdrawal shall remain in effect and be followed to completion by the
withdrawing Member and by other affected Members pursuant to these
Bylaws. Any Member that has voluntarily withdrawn from the Corporation
may not reapply for membership for a period of six (6) months from the
date of its withdrawal. A Member's withdrawal from membership does not
affect any obligations of the withdrawing Member to the Corporation
under the Corporation's tariff or Transmission Agreements.

5.8 [Establishment of Record Date for Member
Votes]{.underline}[]{#__RefHeading___Toc124341928 .anchor}. In order
that the Corporation may determine the Members entitled to vote in any
election of members of the MRC or on any other matter on which the
Members are entitled to vote (other than the first biannual meeting of
Members under these Bylaws, for which the record date shall be
[\_\_\_\_\_\_\_\_\_, 2006]{.mark}), the Board of Directors shall set the
record date, which shall be the date of notice to the Members of any
meeting at which any matter is to be presented to the Members for a
vote. Members specified on the list maintained by the Secretary of the
Corporation on the record date are entitled to notice of such meeting
and to vote at any such meeting if they continue to be Members as of the
date of the meeting and their designated representative or alternate is
present. If the Board of Directors calls a meeting of one (1) or more
Member Classes or Sub-Classes (but fewer than all Member Classes), the
Board of Directors shall specify the record date applicable to the
meeting according to the procedures and timing the Board of Directors
determines to be fair and reasonable in the applicable circumstances.

5.9 [Meetings of Members]{.underline}[]{#__RefHeading___Toc124341929
.anchor}.

5.9.1 [Biannual Member
Meeting]{.underline}.[]{#__RefHeading___Toc124341930 .anchor} There
shall be biannual meetings of the Members of the Corporation at
approximately six- (6-) month intervals at such date, time, and place
within the Geographic Area as the Board of Directors shall determine. At
one (1) such biannual meeting, the members of the Board of Directors and
officers of the Corporation shall

> \(i\) deliver to the Members (to the extent not delivered previously)
> the annual financial statements of the Corporation prepared in
> accordance with the requirements of Section 10.2 and copies of the
> Corporation's budget and budget forecasts prepared in accordance with
> Section 8.4.2;
>
> \(ii\) discuss other significant matters affecting the Corporation;
>
> \(iii\) describe the Corporation's progress on carrying out the
> purposes in Article III; and

\(iv\) respond to any questions of the Members with respect thereto.

5.9.2 [First Biannual Member
Meeting]{.underline}[]{#__RefHeading___Toc124341931 .anchor}. The first
biannual meeting of Members shall be on [\_\_\_\_\_\_\_\_\_\_\_,
2006]{.mark}. At that meeting, the Members shall hold the first vote to
elect the MRC under these Bylaws as set forth in Section 6.3.

5.9.3 [Member Identification of Committee
Candidates]{.underline}.[]{#__RefHeading___Toc124341932 .anchor} At the
first biannual meeting of Members each year, the membership shall
forward to the Board of Directors names of candidates for the Board to
consider for appointment to serve as representatives of the Members on
the Budget Committee. At that same biannual meeting, the membership
shall forward to the Board of Directors names of candidates to serve on
any advisory committees whose membership is appointed by the Board of
Directors (such as the Tariff Committee, Operations Committee, and
Planning Committee).

5.9.4 [Special Member
Meetings]{.underline}.[]{#__RefHeading___Toc124341933 .anchor} In
addition to the meetings of the Members required under Section 5.9.1,

> \(i\) special meetings of the Members for any purpose or purposes may
> be called at any time by
>
> \(a\) the President of the Corporation,
>
> \(b\) the Board of Directors,
>
> \(c\) not less than one-third (1/3) of the Members entitled to vote at
> such meeting, or
>
> \(d\) not less than a majority of the Members in any two (2) Member
> Classes; and

{*Section 5.9.4 continued . . .*}

> \(ii\) special meetings of the Members in any Member Class or Member
> Sub-Class for any purpose or purposes may be called at any time by
>
> \(a\) the President of the Corporation,
>
> \(b\) the Board of Directors, or
>
> \(c\) not less than one-third (1/3) of the Members entitled to vote at
> such meeting.

Any such special meetings shall be held at such date, time, and place
within the Geographic Area as may be determined by the person or persons
calling such meeting.

5.10 [Notice of Meetings of
Members]{.underline}[]{#__RefHeading___Toc124341934 .anchor}.

5.10.1 [Timing and Manner of
Notices]{.underline}.[]{#__RefHeading___Toc124341935 .anchor} Notice of
regularly scheduled and special meetings shall be given to each Member
entitled to vote at such meeting not less than ten (10) days and not
more than fifty (50) days prior to the meeting; or not less than thirty
(30) days and not more than fifty (50) days prior to the meeting in the
case of any meeting

> \(i\) to vote on the election of one (1) or more members of the MRC;
>
> \(ii\) to vote on any proposed amendment to the Bylaws; or
>
> \(iii\) to vote on dissolution of the Corporation.

Notice shall be made either personally or by first-class mail, with a
copy by electronic mail to any such Member that has provided notice to
the Secretary of the Corporation of such Member's electronic mail
address. If mailed, such notice shall be deemed given when deposited in
the U.S. or Canadian mail, with first-class postage thereon prepaid,
addressed to the Member at the address provided to the Secretary of the
Corporation in accordance with the requirements of these Bylaws. Each
such notice shall state the date, time, and place of the meeting and the
meeting agenda, including the purpose or purposes for which the meeting
is called.

5.10.2 [Effect of Lack of Notice and Agenda
Changes]{.underline}.[]{#__RefHeading___Toc124341936 .anchor} At the
biannual meetings of the Members of the Corporation, the failure of any
item to be included in the notice or on the agenda shall not prevent
action from being taken at the meetings; [provided]{.underline},
[however]{.underline}, that if any changes are made to any such agenda
before the meeting, the Secretary of the Corporation shall make
reasonable efforts to provide the Members of the Corporation of any such
changes as soon as practicable in advance of the meeting. At any other
meeting of the Members, the failure of any item to be included in the
notice or on the agenda shall prevent action on that item from being
taken at the meeting.

5.10.3 [Public Notice of Member
Meetings]{.underline}.[]{#__RefHeading___Toc124341937 .anchor} Public
notice of each meeting of the Members, and each meeting of any two (2)
or more Member Classes, shall be placed on the Grid West Website and
posted at the offices of the Corporation at least ten (10) days before
such meeting. Public notice of any adjournment and reconvening of any
such meeting shall be placed on the Grid West Website and posted at the
offices of the Corporation as soon as practicable after any such
adjournment. Each such notice shall include an agenda for the meeting.
If any changes are made to any such agenda before the meeting to which
the agenda relates, the Secretary of the Corporation shall make
reasonable efforts to provide public notice of any such changes as soon
as practicable in advance of the meeting. In addition, notice of each
meeting of the Members, and each meeting of any two (2) or more Member
Classes, shall be sent by the Secretary of the Corporation, by
first-class mail, telegram (charges prepaid), facsimile, or electronic
mail, to each member of the public who so requests and who has provided
the Secretary of the Corporation with complete information regarding
such person's name and address; [provided]{.underline},
[however]{.underline}, that the failure of any such member of the public
to receive notice of any meeting of the Members shall not under any
circumstances affect the validity of such meeting or any action taken at
such meeting.

5.11 [Open Member Meetings]{.underline}[]{#__RefHeading___Toc124341938
.anchor}. Except as hereinafter set forth, any member of the public may
attend and observe the proceedings of any meeting of the Members, and
any meeting of any two (2) or more Member Classes, noticed pursuant to
Section 5.10.3. Notwithstanding the foregoing, Members may, with notice
to the Secretary of the Corporation in each instance, hold any such
meeting in closed session for the same purposes and to the same extent
as the Board of Directors is entitled to hold closed sessions pursuant
to Section 7.6.

5.12 [Member Waivers of
Notice]{.underline}[]{#__RefHeading___Toc124341939 .anchor}. The notice
requirements contained in these Bylaws may be waived in writing by any
Member with respect to itself, either before or after the meeting. The
attendance by any Member at a meeting without protesting, as soon as
reasonably practicable, the lack of notice of such meeting shall
constitute a waiver of notice by it. All waivers shall be made part of
the minutes of the meetings.

5.13 [Quorum Rules]{.underline}[]{#__RefHeading___Toc124341940 .anchor}.
There is no quorum requirement for regularly scheduled or special Member
meetings; [provided]{.underline}, [however]{.underline}, that the
Secretary of the Corporation shall count only the votes cast in Member
Classes or Member Sub-Classes that meet their respective quorum rules
for voting.

5.13.1 [Quorum Rules for Binding Member Votes (Except to Fill Members
Representative Committee Vacancies and to Remove Members Representative
Committee Members)]{.underline}[]{#__RefHeading___Toc124341941 .anchor}.

> \(i\) Except for meetings of a Member Class or Member Sub-Class to
> fill vacancies of its designated MRC positions (or to remove a member
> of the MRC) for which the quorum rule is set forth in Section 5.13.2,
> all votes of Members must take place at a duly called meeting of
> Members (all Member Classes meeting at the same time).

{*Section 5.13.1 continued . . .*}

> \(ii\) If a Member Class does not include any Member Sub-Classes, then
> the quorum requirement for that Member Class at any Member meeting
> shall be one-third (1/3) of the Members belonging to that Member Class
> and entitled to vote.
>
> \(iii\) If a Member Class has Member Sub-Classes, then quorum
> requirements shall apply to each Member Sub-Class separately, and the
> quorum requirement for a Member Sub-Class at any Member meeting shall
> be one-third (1/3) of the Members belonging to that Member Sub-Class.
>
> \(iv\) The validity of a quorum for any Member Class that satisfies
> the requirement set forth in Section 5.13.1(ii) shall not be affected
> by the failure of any other Member Class to satisfy the applicable
> Member Class quorum requirement. The validity of a quorum for any
> Member Sub-Class that satisfies the requirement set forth in
> Section 5.13.1(iii) shall not be affected by the failure of any other
> Member Sub-Class within its Member Class (or the failure of any other
> Member Class) to satisfy the applicable quorum requirement.
>
> \(v\) The manner of tabulating Member votes at any meeting at which
> the Members have satisfied the foregoing requirements shall be as
> specified in Section 5.14.
>
> \(vi\) In any Member Class or Member Sub-Class that has *ex officio*
> Members, the *ex officio* Members do not count when determining
> whether a quorum exists.

5.13.2 [Quorum Rules for Meetings of Member Classes or Member
Sub-Classes to Remove Members of the Members Representative Committee
and to Fill Vacancies]{.underline}[]{#__RefHeading___Toc124341942
.anchor}.

> \(i\) If a Member Class or Member Sub-Class wishes to remove a member
> of the MRC or if a vacancy occurs with respect to any Members
> Representative Committee positions for which a particular Member Class
> or Member Sub-Class is entitled to vote (other than due to the
> ordinary expiration of MRC members' terms), the applicable Member
> Class or Member Sub-Class may request that the Board of Directors
> convene a special meeting of the affected Member Class or Member
> Sub-Class (without the need for other Member Classes or Member
> Sub-Classes to meet at the same time) to remove the member or fill the
> vacancy in accordance with Section 6.6.
>
> \(ii\) If a Member Class does not include any Member Sub-Classes, then
> the quorum requirement for that Member Class at any Member meeting
> shall be one-third (1/3) of the Members belonging to that Member Class
> and entitled to vote.

{*Section 5.13.2 continued . . .*}

> \(iii\) If a Member Class has Member Sub-Classes, then quorum
> requirements shall apply to each Member Sub-Class separately, and the
> quorum requirement for a Member Sub-Class at any Member meeting shall
> be one-third (1/3) of the Members belonging to that Member Sub-Class.
>
> \(iv\) The validity of a quorum for any Member Class that satisfies
> the requirement set forth in Section 5.13.2(ii) shall not be affected
> by the failure of any other Member Class to satisfy the applicable
> Member Class quorum requirement. The validity of a quorum for any
> Member Sub-Class that satisfies the requirement set forth in
> Section 5.13.2(iii) shall not be affected by the failure of any other
> Member Sub-Class within its Member Class (or the failure of any other
> Member Class) to satisfy the applicable quorum requirement.
>
> \(v\) The manner of tabulating Member votes with respect to Member
> Class or Member Sub-Class meetings to fill MRC vacancies shall be as
> set forth in the applicable provisions of Section 6.3, and the manner
> of tabulating Member votes with respect to meetings to remove MRC
> members shall be as set forth in the applicable provisions of
> Section 6.6.
>
> \(vi\) In any Member Class or Member Sub-Class that has *ex officio*
> Members, the *ex officio* Members do not count when determining
> whether a quorum exists.

5.13.3 [Quorum Rules for Member Advisory
Votes]{.underline}[]{#__RefHeading___Toc124341943 .anchor}. The quorum
rules applicable to Member advisory votes called by the Board of
Directors (as authorized in Section 5.15) shall be as specified by the
Board of Directors with respect to the matter being submitted to an
advisory vote. If the Board of Directors does not specify special quorum
rules, the quorum rules shall be as set forth in Section 5.13.1.

5.14 [Voting of Members (Other Than Advisory
Votes)]{.underline}[]{#__RefHeading___Toc124341944 .anchor}.

5.14.1 [General Voting Rules]{.underline}[]{#__RefHeading___Toc124341945
.anchor}. For any Member Class or Member Sub-Class that has met the
quorum requirements at a duly called meeting of Members (except for
electing MRC members or filling MRC vacancies, which shall be as
specified in the applicable provisions of Section 6.3), the voting rules
shall be as follows:

> \(i\) Each Member Class (other than the State and Provincial Energy
> Authority/Tribes/Certain Public Interest Groups Member Class), as a
> whole, shall have total voting power equal to six (6) votes. The State
> and Provincial Energy Authority/Tribes/Certain Public Interest Groups
> Member Class, as a whole, shall have total voting power equal to six
> (6) votes if the State and Provincial Energy Authority Member
> Sub-Class has four (4) or fewer voting Members, or seven (7) votes if
> the State and Provincial Energy Authority Member Sub-Class has five
> (5) or more voting Members. The combined voting power of all Member
> Classes in the Corporation equals

{*Section 5.14.1 continued . . .*}

> thirty (30) votes, except if the State and Provincial Energy Authority
> Member Sub-Class has five (5) or more voting Members, in which case
> the combined voting power of all Member Classes in the Corporation
> equals thirty-one (31) votes. Tabulation of Member votes shall be as
> set forth in this Section 5.14.
>
> \(ii\) A Member shall participate and vote in a Member meeting or
> Member Class or Member Sub-Class meeting through the designated
> representative or alternate appearing on the records of the Secretary
> of the Corporation. The Members' designated representative or
> alternate shall be required to be present in person at a meeting in
> order to vote on any matter coming before the Members at such meeting.
> A designated representative or alternate may represent more than one
> (1) Member in the Transmission-Dependent Utilities Member Class (even
> if the Members are in different Member Sub-Classes). A designated
> representative or alternate may represent more than one (1) Member in
> the Generators, Power Marketers, Large Generating End-Use Consumers,
> and Others Member Class (even if the Members are in different Member
> Sub-Classes). For other Member Classes, a designated representative or
> alternate may represent more than one (1) Member only in the same
> Member Sub-Class (or, if a Member Class has no Member Sub-Classes, in
> the same Member Class) except in a Member Class in which a majority of
> the voting power within each of the Member Sub-Classes has voted to
> allow a designated representative or alternate to represent Members in
> multiple Member Sub-Classes within the Member Class. The designated
> representative or alternate shall be allowed to vote separately for
> each Member for which he or she is the designated representative or
> alternate. Each Member warrants to the Corporation and to the other
> Members that its designated representative and alternate have the
> authority to act on behalf of the Member and are authorized to
> participate in debate and consider input from others before taking a
> position or voting on behalf of the Member.
>
> \(iii\) The allocation of voting power to Member Classes, and where
> applicable to Member Sub-Classes within each of the Member Classes,
> shall be as set forth in Section 5.14.3.

5.14.2 [Membership
Thresholds]{.underline}.[]{#__RefHeading___Toc124341946 .anchor} If a
Member Sub-Class has a number of Members equal to or greater than the
thresholds set forth in this Section 5.14.2, then voting power shall be
allocated to the Member Sub-Class as set forth in Section 5.14.3. If a
Member Class or Member Sub-Class with no threshold has at least one
Member, then voting power shall be allocated to the Member Class or
Member Sub-Class as set forth in Section 5.14.3. *Ex officio* Members
that join pursuant to Section 5.3.3 do not count for threshold
determinations. If a Member Sub-Class has zero (0) Members or a number
of Members less than the thresholds set forth in this Section 5.14.2,
then voting power shall be reduced and reallocated as set forth in
Section 5.14.4. If a Member Class or Member Sub-Class with no threshold
has zero (0) Members, then voting power shall be reduced and reallocated
as set forth in Section 5.14.4.

{*Section 5.14.2 continued . . .*}

(i) [Major Transmitting Utilities Member Class]{.underline}. There is no
    threshold for this Member Class.

(ii) [Transmission-Dependent Utilities Member Class]{.underline}. There
     is no threshold for this Member Class or its Member Sub-Classes.

(iii) [Generators, Power Marketers,]{.underline} [Large Generating
      End-Use Consumers]{.underline}[, and Others Member
      Class]{.underline}.

> \(a\) Generators Member Sub-Class: There is no threshold for this
> Member Sub-Class.
>
> \(b\) Large Generating End-Use Consumers Member Sub-Class: The
> threshold for this Member Sub-Class is five (5) Members.
>
> \(c\) Power Marketers and Others Member Sub-Class: The threshold for
> this Member Sub-Class is ten (10) Members.

(iv) [End-Use Consumers Member Class]{.underline}.

> \(a\) Large Unbundled End-Use Consumers Member Sub-Class: The
> threshold for this Member Sub-Class is two (2) Members.
>
> \(b\) Large Bundled End-Use Consumers Member Sub-Class: The threshold
> for this Member Sub-Class is one (1) Member.
>
> \(c\) Consumer Advocates Member Sub-Class: The threshold for this
> Member Sub-Class is three (3) Members.

(v) [State and Provincial Energy Authority/Tribes/Certain Public
    Interest Groups Member Class]{.underline}.

> \(a\) State and Provincial Energy Authority Member Sub-Class: The
> threshold for this Member Sub-Class is four (4) Members. *Ex officio*
> Members do not count toward achievement of the threshold. Even though
> the threshold for the State and Provincial Authority Member Sub-Class
> is four (4), the voting power for that Member Sub-Class is five (5)
> pursuant to Section 5.14.1(i) if there are five (5) or more voting
> Members in the Member Sub-Class.
>
> \(b\) Tribes Member Sub-Class: The threshold for this Member Sub-Class
> is one (1) Member.
>
> \(c\) Certain Public Interest Groups Member Sub-Class: The threshold
> for this Member Sub-Class is one (1) Member.

5.14.3 [Initial Allocation of Voting
Power]{.underline}.[]{#__RefHeading___Toc124341947 .anchor}

> \(i\) Major Transmitting Utilities:

(a) For purposes of voting, the Major Transmitting Utility Member Class
    shall be organized into two (2) groups: Group 1 and Group 2.

    1.  During the period before the Board of Directors has made the
        determination described in Section 7.1.1(v)(a), Group 1 shall
        consist of those class Members that are parties (other than
        those identified as "Terminating TOs") to Amendment No. 2 of the
        Funding Agreement dated as of November 23, 2005. Group 2 shall
        consist of all other class Members.

    2.  During the period after the Board of Directors has made the
        determination described in Section 7.1.1(v)(a), Group 1 shall
        consist of those class Members that have executed Transmission
        Agreements, and Group 2 shall consist of all other class
        Members.

> \(b\) The voting power of the Major Transmitting Utilities Member
> Class shall be allocated between Groups 1 and 2 based upon the ratio
> of the number of class Members within each group; [provided,
> however]{.underline}, that Group 2's voting power shall not exceed
> one-third (1/3^rd^) of the voting power of the Major Transmitting
> Utility Member Class. Voting power within each group shall be
> allocated equally among all Members of that group.
>
> \(ii\) Transmission-Dependent Utilities: The voting power of the
> Transmission-Dependent Utilities Member Class shall be allocated as
> follows:
>
> \(a\) three (3) of the six (6) votes' worth of voting power held by
> the Transmission-Dependent Utilities Member Class shall be held by the
> Large TDU Member Sub-Class; and
>
> \(b\) three (3) of the six (6) votes' worth of voting power held by
> the Transmission-Dependent Utilities Member Class shall be held by the
> Small TDU Member Sub-Class.
>
> \(iii\) Generators, Power Marketers, Large Generating End-Use
> Consumers, and Others: The voting power of the Generators, Power
> Marketers, Large Generating End-Use Consumers, and Others Member Class
> shall be allocated as follows:
>
> \(a\) four (4) of the six (6) votes' worth of voting power held by the
> Generators, Power Marketers, Large Generating End-Use Consumers, and
> Others Member Class shall be held by the Generators Member Sub-Class;

{*Section 5.14.3 continued . . .*}

> \(b\) one (1) of the six (6) votes' worth of voting power held by the
> Generators, Power Marketers, Large Generating End-Use Consumers, and
> Others Member Class shall be held by the Large Generating End-Use
> Consumers Member Sub-Class; and
>
> \(c\) one (1) of the six (6) votes' worth of voting power held by the
> Generators, Power Marketers, Large Generating End-Use Consumers, and
> Others Member Class shall be held by the Power Marketers and Others
> Member Sub-Class, composed of all Members of the Member Class that are
> not either Generators or Large Generating End-Use Consumers.
>
> \(iv\) End-Use Consumers: The voting power of the End-Use Consumers
> Member Class shall be allocated as follows:
>
> \(a\) two (2) of the six (6) votes' worth of voting power held by the
> End-Use Consumers Member Class shall be held by the Members of the
> Large Unbundled End-Use Consumers Member Sub-Class;
>
> \(b\) one (1) of the six (6) votes' worth of voting power held by the
> End-Use Consumers Member Class shall be held by the Members of the
> Large Bundled End-Use Consumers Member Sub-Class; and
>
> \(c\) three (3) of the six (6) votes' worth of voting power held by
> the End-Use Consumers Member Class shall be held by the Members of the
> Consumer Advocates Member Sub-Class.
>
> \(v\) State and Provincial Energy Authority/Tribes/Certain Public
> Interest Groups: The voting power of the State and Provincial Energy
> Authority/Tribes/Certain Public Interest Groups Member Class shall be
> allocated as follows:
>
> \(a\) one (1) votes' worth of voting power held by the State and
> Provincial Energy Authority/Tribes/Certain Public Interest Groups
> Member Class shall be held by the Members of the Tribes Member
> Sub-Class;
>
> \(b\) one (1) votes' worth of voting power held by the State and
> Provincial Energy Authority/Tribes/Certain Public Interest Groups
> Member Class shall be held by the Members of the Certain Public
> Interest Groups Member Sub-Class; and
>
> \(c\) the balance of the State and Provincial Energy
> Authority/Tribes/Certain Public Interest Groups Member Class' voting
> power (either four (4) votes or five (5) votes as determined pursuant
> to Section 5.14.1(i)) shall be held by the Members of the State and
> Provincial Energy Authority Member Sub-Class.

5.14.4 [Allocation of Voting Power When Member Class Has Zero Members or
When Member Sub-Class Thresholds Are Not
Met]{.underline}[]{#__RefHeading___Toc124341948 .anchor}.

> \(i\) If the Member Class has zero (0) Members, then
>
> \(a\) the voting power of that Member Class shall be allocated equally
> to other Member Classes that have at least one (1) Member, and
>
> \(b\) within each such Member Class the reallocated voting power shall
> be allocated to each Member Sub-Class in the same ratio as the Member
> Class's voting power is allocated between the Member Sub-Classes;
> [provided]{.underline}, [however]{.underline}, that such reallocated
> voting power shall be subject to further reallocation pursuant to
> Sections 5.14.4(ii) through (vi).
>
> \(ii\) If a Member Sub-Class has fewer than the threshold number of
> Members established for that Member Sub-Class in Section 5.14.2, the
> voting power for that Member Sub-Class set forth in Section 5.14.3
> will be reduced in an amount determined according to
> Section 5.14.4(iii), and the amount of the reduction in voting power
> will be reallocated according to Section 5.14.4(iv).
>
> \(iii\) The formula for calculating the voting power reduction of a
> Member Sub-Class is as follows:
>
> **V \* (1 - (M/T)) = A**
>
> The numerator "**M**" is the number of Members in the Member
> Sub-Class.
>
> The denominator "**T**" is the threshold for the Member Sub-Class.
>
> The variable "**V**" is the initial voting power for the Member
> Sub-Class as set forth in Section 5.14.3, as adjusted under Section
> 5.14.4.(i).
>
> The result "**A**" is the amount by which the Member Sub-Class's
> voting power is reduced. (Refer to Section 5.14.4(v) Step 2(c) for the
> formula to calculate the Member Sub-Class's revised voting power.)
>
> \(iv\) Reallocate the reduced voting power calculated in
> Section 5.14.4(iii) as follows:

{*Section 5.14.4 continued . . .*}

> \(a\) \[Reserved for possible future use: If the Member Class has two
> (2) Member Sub-Classes and neither of the Member Sub-Classes meets its
> threshold, then each such Member Sub-Class will exercise its full
> voting power; [provided]{.underline}, [however]{.underline}, that if
> one (1) of such Member Sub-Classes has zero (0) Members, and the other
> Member Sub-Class has one (1) or more Members, such other Member
> Sub-Class will exercise the entire voting power of the Member Class.\]
>
> \(b\) \[Reserved for possible future use: If the Member Class has two
> (2) Member Sub-Classes and only one (1) of the Member Sub-Classes
> meets its threshold, the Member Sub-Class that meets its threshold
> will be allocated additional voting power from the Member Sub-Class
> that did not meet its threshold. The voting power of the Member
> Sub-Class meeting its threshold is calculated as follows:
>
> **V + A = V~revised~**
>
> "**V**" is the initial voting power for the Member Sub-Class as set
> forth in Section 5.14.3, as adjusted under Section 5.14.4.(i).
>
> "**A**" is the amount of voting power of the Member Sub-Class that did
> not meet its threshold to be reallocated to the other Member Sub-Class
> in the Member Class (that was calculated in Section 5.14.4(iii)).
>
> "**V~revised~**" is the revised voting power (with the amount
> reallocated from the Member Sub-Class that failed to meet its
> threshold added to the original voting power).\]
>
> \(c\) If the Member Class has three (3) Member Sub-Classes and none of
> the Member Sub-Classes meets its threshold, then (unless (d) or (e)
> applies) each Member Sub-Class will exercise its full voting power.
>
> \(d\) If the Member Class has three (3) Member Sub-Classes and two (2)
> of the Member Sub-Classes have zero (0) Members but the third Member
> Sub-Class has one (1) or more Members, the third Member Sub-Class will
> exercise the entire voting power of the Member Class.
>
> \(e\) If the Member Class has three (3) Member Sub-Classes and one (1)
> of the Member Sub-Classes has zero (0) Members, then apply (1), (2),
> or (3) as follows:

{*Section 5.14.4 continued . . .*}

> \(1\) If both of the other Member Sub-Classes meet their threshold,
> then the voting power of the Member Sub-Class having zero (0) Members
> will be allocated to the other two Member Sub-Classes as set forth in
> Section 5.14.4(v); [provided]{.underline}, [however]{.underline}, that
> at any time that the Large Generating End-Use Consumers Member
> Sub-Class or the Power Marketers and Others Member Sub-Class has zero
> (0) Members, the voting power of the Generators Member Sub-Class shall
> be increased by the entire amount of voting power initially allocated
> to the Member Sub-Class with zero (0) Members.
>
> \(2\) If one (1) of the other Member Sub-Classes meets its threshold,
> but the other does not, the Member Sub-Class that meets its threshold
> will exercise the voting power of the Member Class having zero (0)
> Members and will be allocated the amount by which the Member
> Sub-Class's voting power is reduced (equal to "**A**" as calculated in
> Section 5.14.4(iii)).
>
> \(3\) If both of the other Member Sub-Classes have Members, but both
> fail to meet their respective thresholds, those Member Sub-Classes
> will exercise the full voting power of their respective Member
> Sub-Class and will be allocated the voting power of the Member
> Sub-Class having zero (0) Members as set forth in Section 5.14.4(v).
>
> \(f\) If the Member Class has three (3) Member Sub-Classes and two (2)
> of the Member Sub-Classes fail to meet their threshold, then "**A**",
> the reduced voting power for each of the two (2) Member Sub-Classes
> (as calculated in Section 5.14.4(iii)), is added to the voting power
> of the one (1) Member Sub-Class that achieved its threshold.
>
> \(g\) If the Member Class has three (3) Member Sub-Classes and one (1)
> of the Member Sub-Classes fails to meet its threshold, then "**A**",
> the reduced voting power of the Member Sub-Class that fails to meet
> its threshold shall be reallocated between the two (2) Member
> Sub-Classes that meet their respective thresholds as set forth in
> Section 5.14.4(v); [provided]{.underline}, [however]{.underline}, that
> at any time that the Large Generating End-Use Consumers Member
> Sub-Class or the Power Marketers and Others Member Sub-Class has fewer
> than the threshold number of Members applicable to such Member
> Sub-Class, the voting power of the Generators Member Sub-Class shall
> be increased by an amount equal to any resulting reduction in voting
> power of the Large Generating End-Use Consumers Member Sub-Class or
> the Power Marketers and Others Member Sub-Class (as the case may be).

{*Section 5.14.4 continued . . .*}

> \(v\) If a Member Class has three (3) Member Sub-Classes, reallocating
> the reduced voting power of one (1) of the Member Sub-Classes to the
> other two (2) Member Sub-Classes occurs as follows:
>
> [Step 1]{.underline}: Calculate the ratio of the voting power of the
> Member Sub-Classes that did not have their voting power reduced as
> follows:
>
> The formulas for calculating the ratios of Member Sub-Class voting
> powers are as follows:
>
> First Formula:
>
> **V~least~ / (V~least~ + V~most~) = V~ratio~**
>
> "**V~least~**" is the voting power of the Member Sub-Class with the
> **[least]{.underline}** voting power.
>
> "**V~most~**" is the voting power of the Member Sub-Class with the
> **[most]{.underline}** voting power.
>
> "**V~ratio~**" is the ratio of the Member Sub-Class with the
> **[least]{.underline}** voting power (of the two (2) Member
> Sub-Classes that did not have their voting power reduced) to the
> combined voting power of the two (2) Member Sub-Classes that did not
> have their voting power reduced.
>
> Second Formula:
>
> "**1 - V~ratio~**" is the formula for calculating the ratio of voting
> power for the Member Sub-Class with the **[most]{.underline}** voting
> power to the combined voting power of the two (2) Member Sub-Classes
> that did not have their voting power reduced.
>
> [Step 2]{.underline}: Reallocate the voting power based upon the ratio
> of the voting power between the Member Sub-Classes as follows:
>
> \(a\) The formula for calculating the reallocated voting power for the
> Member Sub-Class with the [higher]{.underline} initial voting power
> is:
>
> **(A \* (1 - V~ratio~)) + V = V~revised~**

{*Section 5.14.4 continued . . .*}

> "**A**" is the amount the Member Sub-Class's voting power is reduced
> as provided in Section 5.14.4(iii).
>
> "**1 - V~ratio~**" is the voting power ratio for the Member Sub-Class
> with the **[most]{.underline}** voting power that was calculated above
> in Step 1.
>
> "**V**" is the initial voting power for the Member Sub-Class as set
> forth in Section 5.14.3, as adjusted under Section 5.14.4.(i).
>
> "**V~revised~**" is the revised voting power (with the amount
> reallocated added to the original voting power).
>
> \(b\) The formula for calculating the reallocated voting power for the
> Member Sub-Class with the [lower]{.underline} initial voting power is:
>
> **(A \* V~ratio~) + V = V~revised~**
>
> "**A**" is the amount the Member Sub-Class's voting power is reduced
> as provided in Section 5.14.4(iii).
>
> "**V~ratio~**" is the ratio of the Member Sub-Class with the
> **[least]{.underline}** voting power that was calculated above in Step
> 1.
>
> "**V**" is the initial voting power for the Member Sub-Class as set
> forth in Section 5.14.3, as adjusted under Section 5.14.4.(i).
>
> "**V~revised~**" is the revised voting power (with the amount
> reallocated added to the original voting power).
>
> \(c\) The formula for calculating the reduced voting power for the
> Member Sub-Class that failed to meet its threshold is:
>
> **V - A = V~reduced~**
>
> "**V**" is the initial voting power for the Member Sub-Class as set
> forth in Section 5.14.3, as adjusted under Section 5.14.4.(i).
>
> "**A**" is the amount the Member Sub-Class's voting power is reduced
> as provided in Section 5.14.4(iii).

{*Section 5.14.4 continued . . .*}

> "**V~reduced~**" is the revised voting power (with the amount
> reallocated, subtracted from the original voting power).
>
> \(vi\) Exhibit A illustrates the application of Section 5.14.4.

5.14.5 [Tabulation of Member Votes to Approve Bylaws
Amendments]{.underline}[]{#__RefHeading___Toc124341949 .anchor}. The
tabulation of Member votes with respect to proposed amendments of these
Bylaws shall be as specified in Section 12.5.

> 5.14.6 [Tabulation of Member Votes to Elect Members Representative
> Committee Members]{.underline}[]{#__RefHeading___Toc124341950
> .anchor}. The tabulation of Member votes with respect to electing MRC
> members shall be as specified in Section 6.3 and the manner of
> tabulating Member votes with respect to meetings to remove MRC members
> shall be as set forth in the applicable provisions of Section 6.6.

5.14.7 [Tabulation of Other Member
Votes]{.underline}[]{#__RefHeading___Toc124341951 .anchor}. Any Member
vote (other than votes pursuant to Sections 5.14.5 through 5.14.6 and
5.15) shall pass if a simple majority of the voting power of the
Members' votes cast favor the proposal or resolution on which they are
voting. The vote by each Member Sub-Class (or Member Class without
Member Sub-Classes) shall be tabulated separately and then added
together to determine whether the voting power in favor is greater than
fifty percent (50%) of the voting power cast. An example of how Member
Class and Member Sub-Class voting power is to be calculated is set forth
in Attachment C.

5.15 [Advisory Member Votes Conducted by the Board of
Directors]{.underline}[]{#__RefHeading___Toc124341952 .anchor}. The
voting rules applicable to Member advisory votes conducted by the Board
of Directors shall be as specified by the Board of Directors with
respect to the matter being submitted to an advisory vote. If the Board
of Directors does not specify special voting rules, the voting rule and
tabulation of such Member advisory votes shall be as described in
Section 5.14.7.

5.16 [Restrictions on
Transfer]{.underline}[]{#__RefHeading___Toc124341953 .anchor}. No Member
may transfer or assign its membership in the Corporation, or any right
or interest therein, to any other Person, whether voluntarily or by
operation of law, and any such attempted transfer or assignment shall be
null and void and without any force or effect whatsoever;
[provided]{.underline}, [however]{.underline}, that notwithstanding the
foregoing, a Member may, with the prior consent of the Secretary of the
Corporation, transfer or assign its membership in the Corporation, and
all (but not less than all) of its rights and interests therein, to any
Person (other than another Member or the Affiliate of another Member)
that acquires all or substantially all of the assets or stock of, or all
or substantially all of the partnership, limited liability company
membership, or other ownership interests in, the Member. Notwithstanding
any such permitted transfer or assignment, all dispute resolution
proceedings and appeals that are in effect or pending as of the date of
such transfer or assignment shall be followed to completion by the
transferring or assigning Member and by other affected Members pursuant
to these Bylaws.

5.17 [Effect of Membership]{.underline}[]{#__RefHeading___Toc124341954
.anchor}. A Member of the Corporation acquires no proprietary or
operational interest whatsoever in facilities used in interstate
transmission or wholesale sales of electric energy in interstate
commerce solely as a consequence of membership in the Corporation.
Membership in the Corporation shall not be construed as a grant of
jurisdiction over the Member by any state or federal agency not
otherwise having such jurisdiction over the Member by law. The
interpretation and enforcement of these Bylaws, including Member rights,
shall be resolved exclusively according to the Bylaws Dispute Resolution
Provisions of these Bylaws.

**ARTICLE VI**

**MEMBERS REPRESENTATIVE COMMITTEE**[]{#__RefHeading___Toc124341955
.anchor}

1.  [Powers and Rights of Members Representative Committee
    Members]{.underline}[]{#__RefHeading___Toc124341956 .anchor}. The
    Corporation shall have a Members Representative Committee (or
    "MRC"), which, subject to these Bylaws and applicable law, shall
    have the following rights and powers:

6.1.1 [Exclusive Members Representative Committee Rights and
Powers]{.underline}.[]{#__RefHeading___Toc124341957 .anchor} The MRC
shall have the exclusive right and power to

> \(i\) nominate and elect members of the Board of Directors pursuant to
> Section 7.2;
>
> \(ii\) remove any Director without cause pursuant to Section 7.3; and
>
> \(iii\) elect members of the Arbitration Committee pursuant to
> Section 6.14.

6.1.2 [Nonexclusive Members Representative Committee Rights and
Powers]{.underline}.[]{#__RefHeading___Toc124341958 .anchor} The MRC
shall have the nonexclusive right and power to

> \(i\) fill vacancies of the Membership Dispute Resolution Committee
> pursuant to Section 5.4.3;
>
> \(ii\) remove any Director for cause pursuant to Section 7.3;
>
> \(iii\) provide consultation to the Board of Directors concerning the
> Special Issues List as provided under Section 7.16.7(ii); and
>
> \(iv\) review and vote on a proposal under the Special Issues List, as
> provided in Section 7.16.7(v).

3.  [Management Audit
    Rights]{.underline}.[]{#__RefHeading___Toc124341959 .anchor} The MRC
    may initiate a management audit to be conducted by a qualified
    independent entity no more frequently than once every four (4)
    years. The independent auditor shall be chosen and overseen by the
    majority vote of three (3) members of the MRC (chosen by the MRC)
    and three (3) members of the Board of Directors (chosen by the
    Directors).

6.2 [Number of Members Representative Committee
Members]{.underline}[]{#__RefHeading___Toc124341960 .anchor}. There
shall be thirty (30) members of the MRC (unless decreased pursuant to
Section 6.3.3(i) or increased to thirty-one (31) pursuant to
Section 6.3.2(v)(a)), elected as specified in Section 6.3. Each Member
Class, as a whole, shall be entitled to elect six (6) members of the MRC
(unless decreased pursuant to Section 6.3.3(i) or increased for the
State and Provincial Energy Authority/Tribes/ Certain Public Interest
Groups Member Class pursuant to Section 6.3.2(v)(a)).

6.3 [Election of Members Representative Committee
Members]{.underline}[]{#__RefHeading___Toc124341961 .anchor}.

6.3.1 [Member Rights to Elect Members Representative Committee
Members]{.underline}.[]{#__RefHeading___Toc124341962 .anchor} The
members of the MRC shall be elected annually by the Members to represent
their Member Class or Member Sub-Class. In any election of members of
the MRC, Members shall vote by Member Class or Member Sub-Class, and,
except as set forth in Section 6.3.2(i), each voting Member in each
Member Class or Member Sub-Class shall have the same voting rights as
every other Member in such Member Class or Member Sub-Class.

6.3.2 [General Rule for Election of Members Representative Committee
Members]{.underline}.[]{#__RefHeading___Toc124341963 .anchor} In the
election of members of the MRC, the voting rights of the Members shall
be as set forth in Sections 6.3.2(i) through 6.3.2(v) for a Member Class
or Member Sub-Class with no threshold and at least one (1) Member and a
Member Class with thresholds in which each Member Sub-Class has at least
the threshold number of Members specified for each Member Sub-Class in
Section 5.14.2. If a Member Class or Member Sub-Class has no threshold
and zero (0) Members or a Member Class has one (1) or more Member
Sub-Classes with thresholds and fewer than the applicable threshold
number of Members, then the voting rights shall be as set forth in
Section 6.3.3.

> \(i\) [Major Transmitting Utilities Member Class]{.underline}. In the
> election of the MRC, the Members of the Major Transmitting Utilities
> Member Class shall be entitled to elect six (6) members of the MRC.
> The six (6) candidates who receive the highest number of votes from
> the class Members, using the allocation of voting rights among class
> Members set forth in Section 5.14.3(i), shall be elected. Major
> Transmitting Utility Member Class Members may cast their votes
> cumulatively when voting in an election of members of the MRC.
>
> \(ii\) [Transmission-Dependent Utilities Member Class]{.underline}. In
> the election of members of the MRC, the voting rights of the Members
> in the Transmission-Dependent Utilities Member Class shall be as
> follows:

{*Section 6.3.2 continued . . .*}

> \(a\) three (3) members of the MRC shall be representatives of, and
> shall be elected by, the Members in the Transmission-Dependent
> Utilities Member Class that are Large TDUs, and such Large TDUs shall
> be entitled to nominate and vote in the election of such three (3)
> members of the MRC; Members that are Large TDUs may cast their votes
> cumulatively when voting in an election of members of the MRC, but
> shall not be entitled to nominate or vote in the election of any other
> members of the MRC; and
>
> \(b\) three (3) members of the MRC shall be representatives of, and
> shall be elected by, the Members in the Transmission-Dependent
> Utilities Member Class that are Small TDUs, and such Small TDUs shall
> be entitled to nominate and vote in the election of such three (3)
> members of the MRC; Members that are Small TDUs may cast their votes
> cumulatively when voting in an election of members of the MRC, but
> shall not be entitled to nominate or vote in the election of any other
> members of the MRC.
>
> \(iii\) [Generators, Power Marketers, Large Generating End-Use
> Consumers, and Others Member Class]{.underline}. In the election of
> members of the MRC, the voting rights of the Members in the
> Generators, Power Marketers, Large Generating End-Use Consumers, and
> Others Member Class shall be as follows:
>
> \(a\) four (4) members of the MRC shall be representatives of, and
> shall be elected by, the Members of the Generators Member Sub-Class of
> the Generators, Power Marketers, Large Generating End-Use Consumers,
> and Others Member Class, and such Members shall be entitled to
> nominate and vote in the election of such four (4) members of the MRC,
> but shall not (except as provided in Section 6.3.3(iv)) be entitled to
> nominate or vote in the election of any other members of the MRC;
>
> \(b\) one (1) member of the MRC shall be a representative of, and
> shall be elected by, the Members of the Large Generating End-Use
> Consumers Member Sub-Class of the Generators, Power Marketers, Large
> Generating End-Use Consumers, and Others Member Class, and such
> Members shall be entitled to nominate and vote in the election of such
> member of the MRC, but shall not be entitled to nominate or vote in
> the election of any other members of the MRC; and
>
> \(c\) one (1) member of the MRC shall be a representative of, and
> shall be elected by, the Members of the Power Marketers and Others
> Member Sub-Class of the Generators, Power Marketers, Large Generating
> End-Use Consumers, and Others Member Class, and such Members shall be
> entitled to nominate and vote in the election of such member of the
> MRC, but shall not be entitled to nominate or vote in the election of
> any other members of the MRC.

{*Section 6.3.2 continued . . .*}

> \(iv\) [End-Use Consumers Member Class]{.underline}. In the election
> of members of the MRC, the voting rights of the Members of the End-Use
> Consumers Member Class shall be as follows:
>
> \(a\) two (2) members of the MRC shall be representatives of, and
> shall be elected by, Large Unbundled End-Use Consumers. Members that
> are Large Unbundled End-Use Consumers shall be entitled to nominate
> and vote in the election of such members of the MRC in accordance with
> the foregoing rights, but shall not be entitled to nominate or vote in
> the election of any other members of the MRC;
>
> \(b\) one (1) member of the MRC shall be the representative of, and
> shall be elected by, Large Bundled End-Use Consumers. Members that are
> Large Bundled End-Use Consumers shall be entitled to nominate and vote
> in the election of such members of the MRC in accordance with the
> foregoing rights, but shall not be entitled to nominate or vote in the
> election of any other members of the MRC; and
>
> \(c\) three (3) members of the MRC shall be representatives of, and
> shall be elected by, Consumer Advocates. Members that are Consumer
> Advocates shall be entitled to nominate and vote in the election of
> such members of the MRC in accordance with the foregoing rights, but
> shall not be entitled to nominate or vote in the election of any other
> members of the MRC.
>
> \(v\) [State and Provincial Energy Authority/Tribes/Certain Public
> Interest Groups Member Class]{.underline}. In the election of members
> of the MRC, the voting rights of the Members of the State and
> Provincial Energy Authority/Tribes/Certain Public Interest Groups
> Member Class shall be as follows; [provided]{.underline},
> [however]{.underline}, that *ex officio* Members of the State and
> Provincial Energy Authority Member Sub-Class may neither vote nor
> serve as representatives to the MRC:
>
> \(a\) four (4) members of the MRC shall be representatives of, and
> shall be elected by, State and Provincial Energy Authorities;
> [provided]{.underline}, [however]{.underline}, if the State and
> Provincial Authority Member Sub-Class has five (5) or more Members, it
> shall elect five (5) members of the MRC. Members that are State or
> Provincial Energy Authorities shall be entitled to nominate and vote
> in the election of such members of the MRC, but shall not be entitled
> to nominate or vote in the election of any other members of the MRC;
>
> \(b\) one (1) member of the MRC shall be the representative of, and
> shall be elected by, Tribes. Members that are Tribes shall be entitled
> to nominate and vote in the election of such member of the MRC, but
> shall not be entitled to nominate or vote in the election of any other
> members of the MRC; and

{*Section 6.3.2 continued . . .*}

> \(c\) one (1) member of the MRC shall be the representative of, and
> shall be elected by, Certain Public Interest Groups. Members that are
> Certain Public Interest Groups shall be entitled to nominate and vote
> in the election of such member of the MRC, but shall not be entitled
> to nominate or vote in the election of any other members of the MRC.

6.3.3 [Special Rules for Election of Members Representative Committee
Members when Thresholds Not Met or Zero
Members]{.underline}.[]{#__RefHeading___Toc124341964 .anchor} If a
Member Class or Member Sub-Class has no threshold and zero (0) Members
or a Member Class has one (1) or more Member Sub-Classes with thresholds
and fewer than the applicable threshold number of Members (as specified
in Section 5.14.2), then the voting rights shall be as set forth in this
Section 6.3.3.

> \(i\) If a Member Class has zero (0) Members (whether or not there is
> a threshold for that Member Class), then the Member Class shall not be
> entitled to elect any MRC members and the total number of members of
> the MRC shall be reduced by six (6) for every Member Class that has
> zero (0) Members.
>
> \(ii\) If a Member Sub-Class has no threshold and zero (0) Members,
> then the Member Sub-Class shall not be entitled to elect any MRC
> members.
>
> \(iii\) If a Member Sub-Class has a threshold and does not meet that
> threshold, then the Member Sub-Class shall elect a number of
> representatives to the MRC according to the following formula:
>
> **[M]{.underline} \* R = R~revised~**
>
> **T **
>
> The numerator "**M**" is the number of Members in the Member
> Sub-Class.
>
> The denominator "**T**" is the threshold for the Member Sub-Class.
>
> The variable "**R**" is the number of MRC representatives assigned to
> the Member Sub-Class in Section 6.3.2.
>
> The result "**R~revised~**" is rounded to the next highest whole
> number if the first digit following the decimal is five (5) or
> greater, or rounded to the next lower whole number (including zero
> (0)) if the first digit following the decimal is less than five (5)
> and represents the number of MRC representatives the Member Sub-Class
> may elect.

{*Section 6.3.3 continued . . .*}

> By way of illustration, if a Member Sub-Class is entitled to elect
> five (5) MRC representatives upon meeting its threshold of five (5)
> Members, but there are only four (4) Members in the Member Sub-Class,
> then the Member Sub-Class elects four (4) MRC representatives, as
> shown by the following calculation:
>
> **[4]{.underline} \* 5 = 4**
>
> **5**
>
> By way of further illustration, if a Member Sub-Class has no Members,
> it will have no MRC representative elected only to represent the
> interest of that Member Sub-Class, as shown by the following
> calculation:
>
> **[0]{.underline} \* 5 = 0**
>
> **5**
>
> \(iv\) If, by operation of Section 6.3.3(ii) or Section 6.3.3(iii), a
> Member Sub-Class has elected fewer than the maximum number of MRC
> representatives that it would otherwise have been entitled to elect in
> accordance with Section 6.3.2, then the Member Class as a whole shall
> elect the remaining MRC representatives necessary to reach the number
> of MRC representatives provided for that Member Class in Section 6.2,
> [provided]{.underline}, [however]{.underline}, that if the affected
> Member Class is the Generators, Power Marketers, Large Generating
> End-Use Consumers, and Others Member Class, then, at any time that the
> number of Members of the Generators Member Sub-Class is greater than
> or equal to one, the Generators Member Sub-Class alone shall elect a
> sufficient number of additional MRC representatives to bring the total
> number of MRC representatives of the Generators, Power Marketers,
> Large Generating End-Use Consumers, and Others Member Class to six
> (6).

6.3.4 [Notice of Members Representative Committee Election
Meetings]{.underline}[]{#__RefHeading___Toc124341965 .anchor}. Except
for notice of the first biannual meeting of Members under these Bylaws,
which shall be given on [\_\_\_\_\_\_\_\_\_\_\_, 2006]{.mark}, notice of
any meeting for the election of one (1) or more MRC members shall be
sent (to those Members eligible to vote in that election of MRC members)
not less than thirty (30) and not more than fifty (50) days prior to the
date of the meeting, in accordance with the provisions of Section 5.10.
Any Member in any Member Class wishing to nominate any individual for
consideration in any such election shall be required to submit the name
of such nominee (along with a statement of qualifications, not exceeding
two (2) pages in length in any instance, for each nominee) to the
Secretary of the Corporation within ten (10) days of the meeting notice
date. The Secretary of the Corporation shall, immediately after
expiration of such nomination deadline, notify the Members eligible to
vote for a given nominee of the names of the nominees for members of the
MRC and distribute to each such Member a copy of the statement of
qualifications of each such nominee.

6.3.5 [Vote to Elect Members Representative Committee
Members]{.underline}.[]{#__RefHeading___Toc124341966 .anchor} The
members of the MRC shall be elected by the affirmative vote, by Member
Class (or Member Sub-Class, as the case may be), of the Members present
and entitled to vote in the applicable Member Class (or Member
Sub-Class, as the case may be) at a duly held meeting of such Members.
Subject to Section 6.3.2, in any election of members of the MRC,

> \(i\) each Member in each Member Class (or Member Sub-Class, as the
> case may be) shall be entitled to a number of votes equal to the
> number of MRC vacancies to be filled by such Member's Member Class (or
> Member Sub-Class, as the case may be) in such election (provided that
> the voting power of each Member of the Major Transmitting Utility
> Member Class will be subject to the calculation of voting power as set
> forth in Section 5.14.3(i));
>
> \(ii\) each Member in each Member Class (or Member Sub-Class, as the
> case may be) shall be entitled to vote for any nominee for election as
> a representative of such Member Class (or Member Sub-Class, as the
> case may be) on the MRC; and
>
> \(iii\) no Member may cast more than one (1) vote for any given
> nominee (except as otherwise provided with respect to the Major
> Transmitting Utility Member Class in Section 6.3.2(i) and the
> Transmission-Dependent Utilities Member Class in Section 6.3.2(ii)).
>
> The nominees of each Member Class or Member Sub-Class shall be ranked
> according to the number of votes received by each, and the number of
> nominees who receive the largest number of votes in such Member Class
> or Member Sub-Class, up to the number of nominees as is equal to the
> number of MRC vacancies to be filled by such Member Class or Member
> Sub-Class, as the case may be, in such election, shall be elected to
> fill such MRC vacancies. If one (1) or more MRC vacancies cannot be
> filled because two (2) or more nominees receive the same number of
> votes, a runoff election shall be held among the tied nominees for
> each such vacancy. In such runoff election, each Member in the Member
> Class or Member Sub-Class may cast one (1) vote for one (1) of the
> tied nominees for each such vacancy. The nominee who receives the
> largest number of votes shall be elected to fill such MRC vacancy.
> Immediately following any election of MRC members, the Secretary of
> the Corporation shall provide official notice of the results of such
> election to the Members.

6.4 [Procedures in Election of Members Representative Committee
Members]{.underline}[]{#__RefHeading___Toc124341967 .anchor}. The Board
of Directors shall develop such procedures as it deems reasonable and
necessary to ensure that the Members in each Member Class are aware of
their right to participate in the nomination and election of MRC
members. Unless otherwise specified herein, the Secretary of the
Corporation shall determine the appropriate mechanisms and election
procedures for elections of MRC members, based on time constraints and
other relevant factors. Elections may be held by written ballot at a
meeting, votes cast at a meeting, or such other procedures as the
Secretary of the Corporation designates.

6.5 [Term of Office of Members Representative Committee
Members]{.underline}[]{#__RefHeading___Toc124341968 .anchor}. The term
of office of MRC members shall be one (1) year. Except for the first
group of MRC members to be elected under these Bylaws, the MRC shall be
elected at each biannual meeting of Members held in compliance with the
information delivery requirements of Section 5.9.1. All MRC members may
serve an unlimited number of terms.

6.6 [Resignation or Removal of Members Representative Committee Members;
Vacancies]{.underline}[]{#__RefHeading___Toc124341969 .anchor}. A
resignation of an MRC member shall be effective upon receipt of written
notice by the chairperson of the MRC, or the President or the Secretary
of the Corporation, unless the notice specifies a later time of
effectiveness. A Member Class or Member Sub-Class may remove any MRC
member whom it has elected at any time, with or without cause, by the
affirmative vote of a majority of the Members present and entitled to
vote in such Member Class (or Member Sub-Class, as the case may be) at a
duly held meeting of the Members of such Member Class (or Member
Sub-Class, as the case may be). The MRC may remove any MRC member at any
time, but only for cause, if at least twenty (20) of the MRC members
vote in favor of such removal, at least four (4) of whom must be
representatives of the same Member Class as the MRC member who is the
subject of the removal vote. If a vacancy occurs, the Members entitled
under these Bylaws to elect such MRC member shall fill the vacancy in
accordance with the provisions of Section 6.3 at a duly held meeting
called in accordance with Section 5.10; [provided]{.underline},
[however]{.underline}, that a meeting of only the Member Class or Member
Sub-Class is required for any election or removal in which only a Member
Class or Member Sub-Class is entitled to vote. A MRC member so elected
shall serve for the unexpired term of his or her predecessor. For
purposes of this Section 6.6, "for cause" shall include, without
limitation, a failure on the part of any MRC member, in any fiscal year,
to attend more than one-half (1/2) of the meetings of the MRC held
during such year.

6.7 [Meetings of the Members Representative
Committee]{.underline}[]{#__RefHeading___Toc124341970 .anchor}.

6.7.1 [Election of Members Representative Committee
Officers]{.underline}.[]{#__RefHeading___Toc124341971 .anchor} At its
first meeting in each fiscal year, the MRC shall elect officers,
including a chairperson of the MRC to preside over meetings.

6.7.2 [Regular and Special Members Representative Committee
Meetings]{.underline}.[]{#__RefHeading___Toc124341972 .anchor} Regularly
scheduled or special meetings shall be held at such times as shall from
time to time be fixed by the chairperson of the MRC. Special meetings of
the MRC for any purpose or purposes permitted by these Bylaws may be
called at any time by the chairperson of the MRC or by any ten (10) MRC
members.

6.7.3 [Permitted Means of Members Representative Committee Meeting
Participation]{.underline}.[]{#__RefHeading___Toc124341973 .anchor}
Members of the MRC may participate in a meeting through the use of
conference telephone, electronic video screen communication, or similar
communications equipment, so long as all MRC members participating in
such meeting can hear one another at the same time. Participation in a
meeting pursuant to this Section 6.7.3 shall constitute presence in
person at such meeting.

6.7.4 [Members Representative Committee Action by
Consent]{.underline}[]{#__RefHeading___Toc124341974 .anchor}. The MRC
may, subject to any applicable law, take any action without a meeting,
if a consent in the form of a record, setting forth the action so taken,
shall be signed by all of the MRC members then in office.

6.7.5 [Members Representative Committee Meeting
Minutes]{.underline}.[]{#__RefHeading___Toc124341975 .anchor} The
Secretary of the Corporation shall maintain minutes of each meeting of
the MRC or subcommittee thereof, and each consent of the MRC or any
subcommittee thereof.

6.8 [Notice of Members Representative Committee
Meetings]{.underline}[]{#__RefHeading___Toc124341976 .anchor}. Notice of
regularly scheduled and special meetings shall be given to the MRC
members not less than fifteen (15) days prior to the meeting if
delivered by first-class mail or not less than ten (10) days prior to
the meeting if the notice is delivered personally, by telephone, by
facsimile, or by electronic mail; [provided]{.underline},
[however]{.underline}, that notice of special meetings shall not be sent
by electronic mail.

6.9 [Open Meetings of Members Representative
Committee]{.underline}[]{#__RefHeading___Toc124341977 .anchor}. All MRC
meetings shall be open; [provided]{.underline}, [however]{.underline},
meetings of the MRC to nominate, discuss, or select Directors shall be
closed in order to facilitate participation by the broadest and most
diverse array of qualified candidates in the Directors selection process
and to protect the confidentiality of information relating to actual or
potential candidates for election to the Board of Directors.

6.10 [Waivers of Members Representative Committee Meeting
Notice]{.underline}[]{#__RefHeading___Toc124341978 .anchor}. The notice
requirements contained in these Bylaws may be waived in writing by any
MRC member with respect to himself or herself, either before or after
the meeting. The attendance by any MRC member at a meeting shall
constitute a waiver of notice of such meeting except where such MRC
member attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called
or convened. All waivers shall be made part of the minutes of the
meetings.

6.11 [Quorum of Members Representative Committee
Members]{.underline}[]{#__RefHeading___Toc124341979 .anchor}. A quorum
for any meeting of the MRC shall be a majority of the MRC members then
in office. A meeting at which a quorum is initially present may continue
to transact business notwithstanding the withdrawal of MRC members, if
any action taken is approved by the required number of MRC members, as
specified in these Bylaws. A majority of the MRC members then present,
whether or not constituting a quorum, may adjourn any meeting to another
time and place.

6.12 [Voting of Members Representative Committee
Members]{.underline}[]{#__RefHeading___Toc124341980 .anchor}. Except
where a greater vote is required by these Bylaws, the affirmative vote
of a majority of the MRC members then in office shall be the act of the
MRC. Each voting MRC member shall have one (1) vote. MRC members may not
vote by proxy, and shall not be required to vote by class. When voting
on matters coming before the MRC, each MRC member shall take into
consideration the interests of the Member Class, the interests of the
Members that appointed or elected the representatives, and the purposes
of the Corporation as set forth in Article III and thereafter make a
decision that each MRC member believes in his or her discretion is
appropriate. In addition, when selecting individuals for the Board of
Directors, each MRC member shall endeavor to select individuals who, in
the judgment of each such MRC member, best satisfy the criteria set
forth in Section 7.2.2.

6.13 [Subcommittees of Members Representative
Committee]{.underline}[]{#__RefHeading___Toc124341981 .anchor}. The MRC
may designate one (1) or more subcommittees to assist the MRC in
carrying out its functions under these Bylaws, each consisting of seven
(7) or more MRC members, to serve at the pleasure of the MRC.
Appointments to such subcommittees shall be made annually by a
two-thirds (2/3) vote of the MRC members then in office. Each
subcommittee shall have such authority of the MRC as is delegated by
resolution of the MRC, except that no subcommittee, regardless of the
MRC resolution, may elect, appoint, or remove any member of such
subcommittee, any member of the MRC, or any Director.

6.14 [Arbitration Committee]{.underline}[]{#__RefHeading___Toc124341982
.anchor}. The MRC shall elect annually the members of a committee called
the Arbitration Committee. The Arbitration Committee shall monitor and
oversee compliance with the provisions of Article XIII (Alternative
Dispute Resolution), as well as carry out any other functions designated
for it in Article XIII or in any other documents of the Corporation. The
Arbitration Committee shall consist of three (3) members, who may serve
an unlimited number of terms. The MRC shall endeavor, over the course of
continuing Arbitration Committee terms, to provide for representation on
the Arbitration Committee that is balanced and reflects the Member
Classes and stakeholder interests affected by the Corporation's
activities. The Arbitration Committee has the authority to establish
such rules and procedures as may be necessary to supplement the
arbitration procedures set forth in these Bylaws.

**ARTICLE VII\
\
BOARD OF DIRECTORS**[]{#__RefHeading___Toc124341983 .anchor}

7.1 [Board of Directors]{.underline}[]{#__RefHeading___Toc124341984
.anchor}.

7.1.1 [Authorities of Board of
Directors]{.underline}[]{#__RefHeading___Toc124341985 .anchor}. The
Board of Directors shall have the full authorities allowed by law,
except as otherwise specified in the Articles of Incorporation or the
Bylaws. All powers and activities of the Corporation shall be exercised
and managed by the Board of Directors or, if delegated, under the
ultimate direction of the Board of Directors.

{*Section 7.1.1 continued . . .*}

> \(i\) Without in any way limiting the foregoing, the Board of
> Directors shall have the power to borrow funds, establish and exercise
> lines of credit, and engage in all other financial transactions
> necessary and useful in carrying out the purposes of the Corporation.
>
> \(ii\) Without in any way limiting the foregoing, any and all proposed
> amendments or modifications to any tariff of the Corporation shall be
> required to be submitted to the Board of Directors for consideration
> and approval and, except as otherwise provided by applicable law, the
> effectiveness of any such amendment or modification shall be subject
> to approval by the Board of Directors.
>
> \(iii\) The Interim Board as defined in Article IV shall serve until
> the election of the Board of Directors. The election of the Board of
> Directors shall occur as soon as practical after the adoption of these
> Bylaws.
>
> \(iv\) To enable the Corporation to provide transmission services as
> soon as reasonably feasible, the Board of Directors shall work
> diligently to promptly complete the negotiation and execution of
> Transmission Agreements with transmission owners and operators that
> are parties (other than those identified as "Terminating TOs") to
> Amendment No. 2 of the Funding Agreement dated as of November 23, 2005
> (and any additional transmission owners and operators that become
> parties to a subsequent amendment to that funding agreement).
>
> \(v\) The Corporation may offer transmission and related services when
> the Board of Directors has determined that
>
> \(a\) there are sufficient executed Transmission Agreements to enable
> the Corporation to begin to offer transmission and related services
> consistent with the provisions of Section 3.1 and any contingencies
> contained in the executed Transmission Agreements have been waived or
> satisfied;
>
> \(b\) any necessary regulatory reviews or approvals have been
> received; and
>
> \(c\) FERC has issued an order holding (without conditions or required
> changes) that the governance structure set forth in these Bylaws
> allows the Corporation to satisfy the independence requirements of
> FERC Order No. 2000 and its amendments
>
> \(vi\) The Corporation may engage in activities related to
> transmission services that do not require executed Transmission
> Agreements so long as the Interim Board or the Board of Directors has
> determined that the activities will accelerate or improve the
> Corporation's implementation of the Grid West Basic Features
> consistent with the provisions of Section 3.1.

7.1.2 [Number and
Classification]{.underline}[]{#__RefHeading___Toc124341986 .anchor}.

> \(i\) The Board of Directors shall consist of five (5) members elected
> in accordance with the provisions of Section 7.2.3;
> [provided]{.underline}, [however]{.underline}, that at any time after
> the Board of Directors has made the determination described in
> Section 7.1.1(v)(a), the size of the Board of Directors may be
> increased from five (5) members to seven (7) or nine (9) members (but
> not to six (6) or eight (8)) by an ordinary vote under Section 7.9.1.
> The additional Board members shall be elected by the MRC in accordance
> with the provision of Section 7.2.3. Absent a resignation or removal,
> Directors shall serve for the duration of their terms in accordance
> with these Bylaws and until their successors are elected. A Director
> elected to fill a vacancy mid-term shall serve for the remainder of
> the term of the Director being replaced and until a successor is
> elected.
>
> \(ii\) Except as provided in Section 7.1.2(iii) and 7.1.2(iv), the
> members of the Board of Directors shall be divided into three (3)
> groups, two (2) of which shall have two (2) members and one (1) of
> which shall have one (1) member. Two (2) of the initial Director
> positions shall be for two- (2-) year terms, two (2) of the initial
> Director positions shall be for three- (3-) year terms, and one (1) of
> the initial Director positions shall be for a four- (4-) year term.
> After the expiration of the initial terms, all Director positions
> shall carry three- (3-) year terms. The MRC shall determine the term
> each initial Director serves.
>
> \(iii\) During any time that the size of the Board of Directors has
> been set at seven (7), the members of the Board of Directors shall be
> divided into three (3) groups, two (2) of which shall have two (2)
> members and one (1) of which shall have three (3) members. The two (2)
> additional Directors that are elected to increase the size of the
> Board of Directors from five (5) to seven (7) shall be assigned to the
> group that formerly consisted of a single Director.
>
> \(iv\) During any time that the size of the Board of Directors has
> been set at nine (9), the members of the Board of Directors shall be
> divided into three (3) groups, each of which shall have three (3)
> members.

7.2 [Establishment of Board of
Directors]{.underline}[]{#__RefHeading___Toc124341987 .anchor}.

1.  [Executive Search Firm]{.underline}. []{#__RefHeading___Toc124341988
    .anchor} Except with respect to the election of the initial Board of
    Directors under these Bylaws (which is addressed in Section
    4.3(iii)), the Board of Directors shall select and retain one (1) of
    the following executive search firms to identify suitable
    candidates, who meet the Director qualification requirements of
    these Bylaws, as potential nominees for election to the Board of
    Directors:

> \(i\) Heidrick & Struggles International;
>
> \(ii\) Korn/Ferry International;

{*Section 7.2.1 continued . . .*}

> \(iii\) Russell Reynolds Associates; or
>
> \(iv\) any successor or any other executive search firm that possesses
> broad and long-standing experience in searches for members of the
> boards of directors or trustees of entities across a broad range of
> industries.

2.  [Identification and Nomination of Suitable Candidates]{.underline}.
    []{#__RefHeading___Toc124341989 .anchor}

> \(i\) Before each election of Directors under these Bylaws, the
> executive search firm selected by the Board of Directors under
> Section 7.2.1 (or ratified by the Interim Board under Section
> 4.3(iii)) shall develop a slate of qualified candidates. The Board of
> Directors (or the Interim Board) in consultation with the MRC may
> direct the firm to provide a specific number of candidates, with the
> minimum to be equal to the number of vacancies plus one (1) and the
> maximum to be twice the number of vacancies to be filled in such
> election. Directors and MRC members may submit the names of proposed
> candidates to the executive search firm for consideration. Members of
> the Corporation may also submit the names of proposed candidates to
> the chairperson of the MRC, who shall forward those names to the
> executive search firm. Unless a Director has given notice to the
> Secretary of the Corporation that he or she does not wish to be
> considered for re-election, any Director whose term is expiring as of
> an upcoming election shall be automatically included among the
> candidates to be considered by the MRC for nomination.
>
> \(ii\) At least half of any slate of qualified candidates identified
> by the executive search firm for the initial round of any election of
> Directors shall consist of individuals with significant experience
> with the electric utility industry in the Geographic Area. The slate
> of qualified candidates identified by the executive search firm also
> should include individuals possessing, collectively executive
> management experience or board experience with electric utilities and
> personal abilities and qualities, such as integrity, leadership,
> problem-solving, facilitation, and consensus-building. The search firm
> shall also endeavor to include individuals with relevant experience in
> commodities markets (including commodities trading risk management),
> electric bulk power transmission in the Western Interconnection,
> utilities law, finance, economics, accounting, information technology,
> engineering, regulation, and public policy; and to achieve racial,
> ethnic, age, and gender diversity. In screening potential candidates
> the executive search firm shall be instructed to exclude any candidate
> likely to have a conflict of interest with the duties of a Director.
> The executive search firm shall also be instructed to obtain
> appropriate disclosures by candidates (covering themselves and Related
> Persons to such candidates) regarding financial interests in or other
> potential conflicts of interest with Market Participants, Members, and
> major contractors of the Corporation. Such disclosures shall also
> include any such financial interests or other potential conflicts of
> interest known by the candidates with respect to other family
> relations of the candidates. The disclosures of qualified candidates
> shall be made available on a confidential basis to the MRC upon its
> election.

{*Section 7.2.2 continued . . .*}

> \(iii\) The MRC shall nominate candidates to stand for election from
> the slate of qualified candidates presented by the executive search
> firm, together with any sitting Directors the MRC wishes to nominate
> for re-election as provided in Section 7.2.2(i). The MRC may designate
> any nominee to run unopposed if the proposal to so designate the
> nominee receives the affirmative vote of not less than twenty (20) MRC
> members.

7.2.3 [Election of Board of
Directors]{.underline}[]{#__RefHeading___Toc124341990 .anchor}.

> \(i\) The members of the Board of Directors shall be elected by the
> members of the MRC, in accordance with the provisions of this Article
> VII.
>
> \(ii\) Each member of the Board of Directors, including nominees
> designated by the MRC to run unopposed, shall be elected by the
> affirmative vote of not fewer than twenty (20) members of the MRC
> unless there is a need for runoff elections as specified in
> Section 7.2.3(iii). In any election of Directors, each member of the
> MRC shall be entitled
>
> \(a\) to a number of votes equal to the number of vacancies to be
> filled in the election; and
>
> \(b\) to vote for any nominee for Director.
>
> Each MRC member shall be required to vote for as many nominees as
> there are vacancies to be filled in the election;
> [provided]{.underline}, [however]{.underline}, that no member of the
> MRC
>
> \(1\) may cast more than one (1) vote for any given nominee;
>
> \(2\) may vote for any number of nominees in excess of the number of
> Board vacancies to be filled in such election; or
>
> \(3\) is required to vote for an unopposed nominee for whom the Member
> did not vote affirmatively to nominate.
>
> Except with respect to the vote on a nominee designated to run
> unopposed by a Member that did not support the nomination, if any
> member of the MRC fails, in any election of Directors, to cast each
> and all of the votes that such MRC member is entitled to cast, each
> vote that such MRC member has failed to cast shall be allocated at
> random, one by one, to another MRC member and cast by such MRC member
> in favor of a nominee of such member's choice for Director in such
> election. Except as permitted in connection with runoff elections as
> specified in Section 7.2.3(iii), the Directors-elect shall comprise
> only those nominees receiving the highest vote (but not in any event
> fewer than twenty (20) votes) of the MRC members, up to such number of
> nominees as is equal to

{*Section 7.2.3 continued . . .*}

> the number of Board vacancies to be filled in such election. If a
> vacancy cannot be filled because two (2) or more nominees receiving at
> least twenty (20) votes receive the same number of votes, a runoff
> election shall be held among such nominees and shall be repeated until
> the tie is broken. At any time during the identification of candidates
> for nomination or during the process of electing Directors, the MRC
> may request that the executive search firm undertake a further search
> for additional candidates for any vacant position(s).
>
> \(iii\) (a) If fewer than the requisite number of nominees receive
> twenty (20) or more votes in an election of Directors, a first-round
> runoff election shall be held among the nominees receiving fewer than
> twenty (20) votes. The minimum number of MRC votes required to elect a
> Director in a first-round runoff election shall be twenty (20). The
> number of nominees for which the MRC may vote in a first-round runoff
> election (including supplemental nominees selected from any additional
> candidates requested from the executive search firm) may not exceed
> two (2) times the number of vacancies remaining after accounting for
> those nominees who received receive twenty (20) or more votes in the
> initial MRC vote. The number of nominees standing for election in a
> first-round runoff election shall be reduced, if necessary to comply
> with the preceding sentence, by removing from the first-round runoff
> election those nominees who receive the fewest votes in the initial
> MRC vote.
>
> \(b\) If fewer than the requisite number of nominees receive twenty
> (20) or more votes in the first-round runoff election, a second-round
> runoff election shall be held among the nominees receiving fewer than
> twenty (20) votes. The minimum number of MRC votes required to elect a
> Director in a second-round runoff election shall be twenty (20). The
> number of nominees for which the MRC may vote in a second-round runoff
> election (including supplemental nominees selected from any additional
> candidates requested from the executive search firm) may not exceed
> two (2) times the number of vacancies remaining after accounting for
> those nominees who receive twenty (20) or more votes in the
> first-round runoff election. The number of nominees standing for
> election in a second-round runoff election shall be reduced, if
> necessary to comply with the preceding sentence, by removing from
> further consideration those nominees who received the fewest votes in
> the first-round runoff election.
>
> \(c\) If fewer than the requisite number of nominees receive twenty
> (20) or more votes in the second-round runoff election, there shall be
> a third-round runoff election to fill any remaining vacancies, and the
> minimum number of MRC votes required to elect a Director in a
> third-round runoff election shall be sixteen (16). The number of
> nominees for which the MRC may vote in a third-round runoff election
> (including supplemental nominees selected from any additional
> candidates requested from the executive search firm) may not exceed

{*Section 7.2.3 continued . . .*}

> two (2) times the number of vacancies remaining after accounting for
> those nominees who receive twenty (20) or more votes in the
> second-round runoff election. The number of nominees standing for
> election in a third-round runoff election shall be reduced, if
> necessary to comply with the preceding sentence, by removing from the
> third-round runoff election those nominees who receive the fewest
> votes in the second-round runoff election. If there are any vacancies
> remaining to be filled after a third-round runoff election, those
> vacancies shall be filled by the nominees who received the greatest
> number of votes in the third-round runoff election. The MRC
> chairperson shall draw lots to break any ties as necessary to carry
> out the provisions of Section 7.2.3 and its subsections.
>
> \(iv\) Immediately upon completion of the election of Directors, the
> Secretary of the Corporation shall provide official notice of the
> results of such election to the members of the MRC and the Members.
> Unless otherwise specified herein, the MRC shall determine the
> appropriate mechanisms and election procedures for elections of
> Directors, based on time constraints and other relevant factors.
> Elections may be held by written ballot at a meeting, votes cast at a
> meeting, or such other procedures as the MRC designates.

7.3 [Resignation or Removal of Directors;
Vacancies]{.underline}[]{#__RefHeading___Toc124341991 .anchor}. A
Director may resign from the Board of Directors by providing written
notice to the chairperson of the Board of Directors or the President or
the Secretary of the Corporation. A resignation of a Director shall be
effective upon election of the resigning Director's replacement, unless
the notice or the Board of Directors specifies an earlier time of
effectiveness. The members of the MRC may remove any Director at any
time, with or without cause, by the affirmative vote of not fewer than
twenty (20) of the members of the MRC present at a duly held meeting of
the MRC. The Board of Directors may remove any Director at any time, but
only for cause, if at least two-thirds (2/3) of the Directors then in
office vote in favor of such removal. If a vacancy occurs, the members
of the MRC shall elect a replacement Director to fill the vacancy in
accordance with the provisions of Section 7.2.4. A Director so elected
shall serve for the unexpired term of his or her predecessor. For
purposes of this Section 7.3, "for cause" shall include, without
limitation, a Director's willful misconduct or conviction of a felony,
violation by a Director of the conflict-of-interest or disqualification
provisions of these Bylaws, or a failure on the part of a Director, in
any fiscal year, to attend more than one-half (1/2) of the meetings of
the Board of Directors held during such year.

7.4 [Meetings of the Board of
Directors]{.underline}[]{#__RefHeading___Toc124341992 .anchor}.

7.4.1 [Quorum of Board of
Directors]{.underline}[]{#__RefHeading___Toc124341993 .anchor}. A
meeting is a gathering (in person or otherwise as permitted in this
Article VII) of at least a quorum of Directors as set forth in
Section 7.8, [provided]{.underline}, [however]{.underline}, that the
presence of a number of Directors constituting a quorum in one place or
at one event does not constitute a meeting if there is no deliberation
or action taken regarding the Corporation's business. A quorum of
Directors may not take action (except by consent as provided below) or
deliberate regarding the Corporation's business except at a meeting and
in compliance with procedural rules in this Article VII.

7.4.2 [Scheduled Meetings of Board of
Directors]{.underline}[]{#__RefHeading___Toc124341994 .anchor}. The
Board of Directors shall meet at least six (6) times each fiscal year at
such dates, times, and places within the Geographic Area as the Board of
Directors shall determine; [provided]{.underline},
[however]{.underline}, that the initial Board of Directors shall have
its first meeting within thirty (30) days following its election. At the
first meeting in the first quarter of each fiscal year, the Board of
Directors shall elect officers and elect a chairperson of the Board of
Directors to preside over meetings. The regularly scheduled meetings of
the Board of Directors shall be established for each fiscal year in
advance.

7.4.3 [Regular and Special Meetings of Board of
Directors]{.underline}[]{#__RefHeading___Toc124341995 .anchor}. In
addition to the regular meetings of the Board of Directors, additional
regularly scheduled or special meetings shall be held at such times as
shall from time to time be fixed by the chairperson of the Board of
Directors. Special meetings of the Board of Directors for any purpose or
purposes may be called at any time by the President of the Corporation
or by any two (2) Directors.

7.4.4 [Permitted Means of Director Meeting
Participation]{.underline}[]{#__RefHeading___Toc124341996 .anchor}.
Directors may participate in a meeting through the use of conference
telephone, electronic video screen communication, or similar
communications equipment, so long as all Directors participating in such
meeting can hear one another at the same time and arrangements are made
to afford the public an opportunity to attend and observe any such
meeting (with the exception of closed sessions held pursuant to
Section 7.6). Participation in a meeting pursuant to this Section 7.4.4
shall constitute presence in person at such meeting.

7.4.5 [Board of Directors Action by
Consent]{.underline}[]{#__RefHeading___Toc124341997 .anchor}. The Board
of Directors may, subject to any applicable law, take any action without
a meeting, if a consent in the form of a record, setting forth the
action so taken, is signed by all of the Directors then in office.

7.4.6 [Board of Directors Meeting
Minutes]{.underline}[]{#__RefHeading___Toc124341998 .anchor}. The
Secretary of the Corporation shall make public the minutes of each
meeting of the Board of Directors or committee thereof (with the
exception of closed sessions held pursuant to Section 7.6), and each
consent of the Board of Directors or any committee thereof, by posting
the same on the Grid West Website and at the offices of the Corporation,
or by any other reasonable means, within fifteen (15) days after the
date on which the meeting was held or the consent was completed.

7.5 [Notice of Board of Directors
Meetings]{.underline}[]{#__RefHeading___Toc124341999 .anchor}.

7.5.1 [Notice Requirements of Regular and Special Board of Directors
Meetings]{.underline}[]{#__RefHeading___Toc124342000 .anchor}. Notice of
regularly scheduled and special meetings shall be given to the Directors
not fewer than ten (10) days prior to the meeting if delivered by
first-class mail or not fewer than five (5) days prior to the meeting if
the notice is delivered personally, by telephone, by facsimile or by
electronic mail; [provided]{.underline}, [however]{.underline}, that
notice of special meetings shall not be effective if sent solely by
electronic mail.

7.5.2 [Public Notice of Meetings; Closed Sessions of the Board of
Directors]{.underline}[]{#__RefHeading___Toc124342001 .anchor}. Public
notice of each meeting of the Board of Directors (including meetings to
be held in whole or in part in closed session pursuant to Section 7.6)
shall be placed on the Grid West Website and posted at the offices of
the Corporation at least ten (10) days prior to the meeting (or the
soonest date practicable thereafter) if notice of such meeting has been
delivered to the Directors by first-class mail and at least five (5)
days prior to the meeting (or the soonest date practicable thereafter)
if notice of such meeting has been delivered to the Directors
personally, by telephone, by facsimile, or by electronic mail. Public
notice of any adjournment and reconvening of any such meeting shall be
placed on the Grid West Website and posted at the offices of the
Corporation as soon as practicable after any such adjournment. Each such
notice shall include an agenda that makes it clear which items are for
purposes of discussion, which items are for purposes of taking action,
and, to the extent practicable, which items are to be considered in a
closed session; [provided]{.underline}, [however]{.underline}, that the
failure of any item to be included on any such agenda shall not prevent
action from being taken thereon at any meeting. If any changes are made
to any such agenda prior to the meeting to which the agenda relates, the
Secretary of the Corporation shall make reasonable efforts to provide
public notice of any such changes as soon as practicable in advance of
the meeting. In addition, notice of each meeting shall be sent by the
Secretary of the Corporation, by first-class mail, telegram (charges
prepaid), facsimile, or electronic mail, to each Member who so requests,
each member of the MRC, and to each member of the public who so requests
and who has provided the Secretary of the Corporation with complete
information regarding such person's name and address;
[provided]{.underline}, [however]{.underline}, that the failure of any
such Member, member of the MRC, or member of the public to receive
notice of any meeting of the Board of Directors shall not under any
circumstances affect the validity of such meeting or any action taken at
such meeting. In the event of any emergency meeting of the Board of
Directors, the notice requirements of this Section 7.5.2 shall be
suspended and the Secretary of the Corporation shall use whatever
efforts the Secretary of the Corporation, in his or her sole discretion,
deems reasonable, in light of all the facts and circumstances, to inform
the Members and the public regarding the meeting and the matters
scheduled to be considered at the meeting.

7.6 [Open Board of Directors
Meetings]{.underline}[]{#__RefHeading___Toc124342002 .anchor}. Meetings
of the Board of Directors held pursuant to this Article VII shall
generally be open to any and all Members and any and all members of the
public, and except as provided below, any member of the public shall be
entitled to attend and observe the proceedings of any regular or special
meeting of the Board of Directors. Subject to such procedural
restrictions as may be reasonably imposed by the Board of Directors,
Members shall have the right to address the Board of Directors at all
regular or special meetings of the Board of Directors. Notwithstanding
the foregoing, the Board of Directors may, at any time during any open
meeting of the Board of Directors, upon approval by the affirmative vote
of not less than two-thirds (2/3) of the Directors present at such
meeting, adjourn the meeting and reconvene in a closed session for
discussion of litigation or potential litigation, personnel matters,
vendor or contractor selection, real estate transactions, commercially
sensitive information, and other matters that are reasonably and in good
faith determined by the Board of Directors to be entitled to
confidential treatment. Only Directors and certain officers, employees,
and agents of the Corporation, as designated by the Directors, may be
present during any closed session; [provided]{.underline},
[however]{.underline}, that to the extent deemed necessary by the
chairperson of the Board

{*Section 7.6 continued . . .*}

of Directors, any other person or persons having business before the
Board of Directors that relates specifically to the matter or matters to
be discussed during any portion of a closed session may be present
during such portion of a closed session.

7.7 [Waivers of Board of Directors Meeting
Notice]{.underline}[]{#__RefHeading___Toc124342003 .anchor}. The notice
requirements contained in these Bylaws may be waived in writing by any
Director with respect to himself or herself, either before or after the
meeting. The attendance by any Director at a meeting shall constitute a
waiver of notice of such meeting except when such Director attends a
meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened. All
waivers shall be made part of the minutes of the meetings.

7.8 [Quorum of Directors]{.underline}[]{#__RefHeading___Toc124342004
.anchor}. A quorum for any meeting of the Board of Directors shall be a
majority of the Directors then in office. A meeting at which a quorum is
initially present may continue to transact business notwithstanding the
withdrawal of Directors, if any action taken is approved by the required
number of Directors, as specified in these Bylaws. A majority of the
Directors then present, whether or not constituting a quorum, may
adjourn any meeting to another time and place.

7.9 [Voting of Directors]{.underline}[]{#__RefHeading___Toc124342005
.anchor}.

7.9.1 [General Requirement for Board
Votes.]{.underline}[]{#__RefHeading___Toc124342006 .anchor} Except where
a greater vote is required by the Articles of Incorporation, applicable
law, or these Bylaws, the affirmative vote of a majority of the
Directors then in office shall be the act of the Board of Directors.
Each Director shall have one (1) vote. Directors may not vote by proxy.

7.9.2 [Implementation Following Certain Board of Directors
Votes]{.underline}[]{#__RefHeading___Toc124342007 .anchor}. If a matter
on which the Board of Directors acts at a meeting has not been described
in a notice or agenda consistent with Section 7.5.2 at least thirty (30)
days before the Board of Directors votes to take the action, or if the
Board of Directors takes action by consent, the Board of Directors may
not implement the action until at least thirty (30) days after the date
on which the matter is described in a notice or agenda consistent with
Section 7.5.2, the date on which the consent is published in accordance
with Section 7.4.5, or the date on which the Board of Directors votes to
take the action, whichever is earliest. During this interval Members may
assess whether they consider the action to be a major change in the
scope of the Corporation's activities or the policies governing the
Corporation's activities and take action as described in Section 7.17.
This provision shall not apply in cases of emergency as declared by the
Board of Directors.

7.10 [Individuals Who Are Prohibited from Serving as
Directors]{.underline}[]{#__RefHeading___Toc124342008 .anchor}.

7.10.1 [Prohibited
Individuals]{.underline}[]{#__RefHeading___Toc124342009 .anchor}. Except
as set forth in Section 7.10.2, no individual may be nominated for
election to or become a member of the Board of Directors, or at any time
serve on the Board of Directors, if such individual (or the spouse, the
domestic partner, or any legal dependent of such individual)

{*Section 7.10.1 continued . . .*}

> \(i\) has a direct or indirect financial interest in (including the
> ownership of securities of) a Market Participant or Member (or any
> Affiliate of any of such Persons); [provided]{.underline},
> [however]{.underline}, that such individual (or the spouse, the
> domestic partner, or any legal dependent of such individual) will be
> permitted to own securities of a Market Participant or Member (or any
> Affiliate of any such Persons) through diversified mutual funds (other
> than those funds concentrating their investments in the electric power
> industry or the electric utility industry or any segments thereof);
>
> \(ii\) is connected (or has been connected within one (1) year prior
> to the date of the meeting to nominate individuals for Director) as an
> owner, director, officer, employee, partner, principal, or member of a
> governing board or council, or in any similar capacity, to a Market
> Participant or Member (or any Affiliate of any of such Persons);
> [provided]{.underline}, [however]{.underline}, that an individual who
> served as an employee or an elected or appointed public official of a
> Participating Jurisdiction may be nominated; or
>
> \(iii\) has a Related Person that is an officer, chief executive or
> general manager, director or trustee or member of a governing board or
> council, or that occupies a position of similar capacity of a Market
> Participant or Member (or any Affiliate of any such Person);
> [provided]{.underline}, [however]{.underline}, that the individual may
> be nominated if the Related Person commits to retire or otherwise
> leaves the position that gives rise to the disqualification prior to
> the date of the first meeting of Directors after the nominee is
> elected as a Director. The Director may serve only if the commitment
> is honored.

7.10.2 [Exceptions Concerning Prohibited
Individuals]{.underline}[]{#__RefHeading___Toc124342010 .anchor}. An
individual shall not be deemed to be in violation of the restrictions
set forth in Section 7.10.1 and shall not be prohibited from serving as
a Director merely because such individual (or the spouse, the domestic
partner, or any legal dependent of such individual)

> \(i\) is a residential retail consumer of electric energy; or
>
> \(ii\) continues his or her pre-existing participation in a qualified
> defined benefits or defined contribution pension plan, nonqualified
> deferred compensation or pension plan, or health benefits plan of a
> Market Participant or Member (or any Affiliate of any of such Persons)
> for purposes of receiving pension benefits and post-employment health
> benefits or remaining eligible to receive such benefits at a future
> time so long as the benefits to such individual under any such pension
> plan do not vary with the economic performance of such Market
> Participant or Member (or any Affiliate of any of such Persons) (other
> than the potential variance due to risk of bankruptcy) or the value of
> any securities of any such Market Participant or Member (or any
> Affiliate of any of such Persons) held by such plan.

7.11 [Continuing Restrictions on Former
Directors]{.underline}[]{#__RefHeading___Toc124342011 .anchor}.

7.11.1 [General Restrictions]{.underline}[]{#__RefHeading___Toc124342012
.anchor}. Except as set forth in Section 7.11.2,

> \(i\) during the period of one hundred eighty (180) consecutive days
> following the date on which an individual ceases to be a Director,
> neither such individual nor the spouse, the domestic partner, or any
> legal dependent of such individual may have or acquire a direct or
> indirect financial interest in a Market Participant or Member (or any
> Affiliate of any of such Persons); [provided]{.underline},
> [however]{.underline}, that such individual (or the spouse, the
> domestic partner, or any legal dependent of such individual) will be
> permitted to own securities of a Market Participant or Member (or any
> Affiliate of any of such Persons) through diversified mutual funds on
> terms and conditions available to the general public (other than those
> funds concentrating their investments in the electric power industry
> or the electric utility industry or any segment thereof);
>
> \(ii\) during the period of three hundred sixty-five (365) consecutive
> days following the date on which an individual ceases to be a
> Director, neither such individual nor the spouse, the domestic
> partner, or any legal dependent of such individual
>
> \(a\) may be or become connected as an owner (including through
> ownership or control of five percent (5%) or more of outstanding
> shares), director, officer, employee, partner, principal, or
> consultant, or in any similar capacity, to a Market Participant or
> Member (or any Affiliate of any of such Persons), or
>
> \(b\) may receive in such person's individual capacity an amount in
> excess of \$10,000 (U.S.) (exclusive of retirement income or benefits)
> in the aggregate from the Corporation, any Market Participant, or any
> Member (or any Affiliate of any of such Persons) as rent or payments
> for materials, products, or services;
>
> \(iii\) during the period of three hundred sixty-five (365)
> consecutive days following the date on which an individual ceases to
> be a Director, neither such individuals nor any Related Person of such
> individuals may receive an amount in excess of \$10,000 (U.S.)
> (exclusive of retirement income or benefits) from relationships with
> other entities that receive substantial amounts of income or other
> benefits from the Corporation, any Market Participant, or any Member
> (or any Affiliate of such Persons). The Board of Directors shall have
> the discretion to determine from time to time in meetings open to the
> public what shall constitute substantial amounts of income or other
> benefits for purposes of this restriction; and
>
> \(iv\) neither such individual nor the spouse, the domestic partner,
> or any legal dependent of such individual may at any time accept any
> gift from any Market Participant or Member that is offered as a
> consequence of service as a Director, subject to any exceptions
> contained in the terms of any applicable conduct rules.

7.11.2 [Exceptions Concerning Continuing
Restrictions]{.underline}[]{#__RefHeading___Toc124342013 .anchor}. An
individual shall not be deemed to be in violation of the restrictions
set forth in Section 7.11.1 merely because such individual (or the
spouse, the domestic partner, or any legal dependent of such individual)

> \(i\) is a residential retail consumer of electric energy; or
>
> \(ii\) continues his or her pre-existing participation in a qualified
> defined benefits or defined contribution pension plan, nonqualified
> deferred compensation or pension plan, or health benefits plan of a
> Market Participant or Member (or any Affiliate of any of such Persons)
> for purposes of receiving pension benefits and postemployment health
> benefits or remaining eligible to receive such benefits at a future
> time so long as the benefits to such individual under any such pension
> plan do not vary with the economic performance of such Market
> Participant or Member (or any Affiliate of any of such Persons) (other
> than the potential variance due to risk of bankruptcy) or the value of
> any securities of any such Market Participant or Member (or any
> Affiliate of any of such Persons) held by such plan.

7.12 [Standard of Care]{.underline}[]{#__RefHeading___Toc124342014
.anchor}.

7.12.1 [General Standard for
Decisions]{.underline}[]{#__RefHeading___Toc124342015 .anchor}. A
Director shall perform the duties of a Director, including duties as a
member of any committee of the Board of Directors on which the Director
may serve, in good faith, in a manner that such Director believes to be
in the best interests of the Corporation in achieving the purposes set
forth in Article III, and with such care, including reasonable inquiry,
as an ordinarily prudent person in a like position would use under
similar circumstances.

7.12.2 [Required Demonstration to Implement Backstop
Measures]{.underline}. []{#__RefHeading___Toc124342016 .anchor}In
addition to complying with the provisions of Section 7.16 to invoke
authority to exercise backstop measures, any time the Corporation wishes
to implement any backstop measure (as defined in Section 7.16.2), it
must, in consultation with the market monitoring unit for the
Corporation, demonstrate that chronic, significant, commercial
congestion has not been mitigated due to market failure. The
demonstration of market failure must be based on substantial evidence
documented by the Corporation through its public planning process.

7.12.3 [On-Going Regional
Consultation]{.underline}[]{#__RefHeading___Toc124342017 .anchor}. In
addition to complying with the mandatory consultation provisions
applicable to the Special Issues List and as set forth in Section 7.16
of these Bylaws, the Board of Directors shall develop (and may, as it
deems appropriate, modify from time to time) general policies and
procedures designed to promote ongoing input to the Board of Directors
from interested parties throughout the Geographic Area (including
Members and Governmental Committee) and to provide clear, useful
information to interested parties throughout the Geographic Area
concerning the Corporation's activities and policies and any potential
changes to the Corporation's existing practices.

7.12.4 [Business and Strategic
Plans]{.underline}.[]{#__RefHeading___Toc124342018 .anchor} The Board of
Directors shall adopt a strategic plan for a period of not less than
three (3) years by the time the Corporation begins to offer transmission
and related services and such plan shall be updated no less frequently
than once every three (3) years.

7.12.5 [Information a Director May Rely
Upon]{.underline}[]{#__RefHeading___Toc124342019 .anchor}. In performing
the duties of Director, a Director shall be entitled to rely on
information, opinions, reports, or statements, including financial
statements and other financial data, in each case prepared or presented
by

> \(i\) any advisory committee established by the Board of Directors
> pursuant to Section 8.2 of these Bylaws;
>
> \(ii\) one (1) or more officers or employees of the Corporation whom
> the Director reasonably believes to be reliable and competent in the
> matter presented;
>
> \(iii\) legal counsel, public accountants, or other persons as to
> matters that the Director reasonably believes are within such person's
> professional or expert competence; or
>
> \(iv\) a committee of the Board of Directors upon which the Director
> does not serve,
>
> as to matters within such committee's or person's designated
> authority, which committee or person the Director believes to merit
> confidence; so long as, in any such case, the Director acts in good
> faith, after reasonable inquiry when the need therefor is indicated by
> the circumstances, and without knowledge that would cause such
> reliance to be unwarranted.

7.12.6 [Conduct Rules]{.underline}[]{#__RefHeading___Toc124342020
.anchor}. The Board of Directors shall maintain Director conduct rules
for current and former Directors. The Directors conduct rules that are
effective as of the date these Bylaws are adopted are set forth in
Attachment C. The Board of Directors shall ensure, to the extent
practicable, that each Director complies with the Corporation's Director
conduct rules, which Director conduct rules may be changed from time to
time by the Board of Directors. The Director conduct rules may be more
restrictive than the provisions set forth in these Bylaws (including
Section 7.11.1) but may not modify or limit the exceptions set forth in
Section 7.11.2. Changes to the Director conduct rules may not become
effective sooner than thirty (30) days following the action by which the
Board of Directors approves the change(s) and may bind only those
Directors who were in office at the time of the change or take office
thereafter. The Board of Directors shall also comply with all applicable
rules of FERC and other regulators.

7.12.7 [Independence from Market
Participants]{.underline}[]{#__RefHeading___Toc124342021 .anchor}. The
Board of Directors shall develop and implement policies, designed to
ensure independence from Market Participants, regarding the ownership of
securities of suppliers of the Corporation or of other financial
interests relating to the Corporation, by Directors, officers, and
employees of the Corporation (including Related Persons of such
Directors, officers, and employees). Each Director, officer, and other
employee of the Corporation as may be designated pursuant to policies
established by the Board of Directors shall file an annual compliance
affidavit with the Board of Directors.

7.13 [Prohibition Against
Loans]{.underline}[]{#__RefHeading___Toc124342022 .anchor}. The
Corporation shall not make any loan of money or property to or guarantee
the obligation of any Director or Related Person of a Director;
[provided]{.underline}, [however]{.underline}, that the Corporation may
advance money to a Director for expenses reasonably anticipated to be
incurred in performance of the duties of such Director so long as such
individual would be entitled to reimbursement for such expenses absent
such advance.

7.14 [Inspection Rights]{.underline}[]{#__RefHeading___Toc124342023
.anchor}. Every Director shall have the absolute right at any reasonable
time to inspect and copy all books, records, and documents, and to
inspect the physical properties, of the Corporation. No Director shall
use or disseminate any information (other than any information regarding
a violation of tariffs or laws) obtained as a result of any such
inspection, or otherwise in his or her capacity as a Director, for his
or her own personal gain or to the detriment of the Corporation.

7.15 [Compensation of
Directors]{.underline}[]{#__RefHeading___Toc124342024 .anchor}.

1.  [Base Compensation and Additional
    Compensation]{.underline}[]{#__RefHeading___Toc124342025 .anchor}.
    Directors shall receive base compensation in the amount of \$30,000
    (U.S.) per year and additional compensation in the amount of \$1,000
    (U.S.) per day for attendance at each meeting of the Board of
    Directors or committee thereof, and \$500 (U.S.) per day for any
    other meetings related to the business of the Corporation that the
    Board of Directors determines a Director should attend, to obtain
    the widest possible input into the decisions of the Board of
    Directors and to avoid hardship on the part of such Directors;
    [provided]{.underline}, [however]{.underline}, that the total
    compensation for each Director shall not exceed \$120,000 (U.S.) in
    any calendar year; and, [provided]{.underline},
    [further]{.underline}, that the Board of Directors may designate
    one (1) Director to serve as the Corporation's Chief Executive
    Officer (or in a similar capacity) during the period before the
    Board of Directors has made the determination described in
    Section 7.1.1(v)(a). If the Board of Directors designates a Director
    to serve as the Corporation's Chief Executive Officer (or in a
    similar capacity) as permitted in the preceding sentence, the Board
    of Directors may prospectively provide for that Director to receive
    additional compensation and exceed the \$120,000 (U.S.) limit
    otherwise applicable under this Section 7.15.1. Any such proposed
    designation or increase in the Director's total authorized
    compensation must be approved at a meeting noticed pursuant to
    Section 7.5, and any decision to so designate or increase
    compensation must be promptly disclosed to the Corporation's
    Members.

2.  [Adjustment of
    Compensation]{.underline}[]{#__RefHeading___Toc124342026 .anchor}.
    The dollar amounts specified in Section 7.15.1, shall be adjusted
    prospectively for inflation by the Board of Directors every five (5)
    years not counting the year these Bylaws become effective based upon
    the appropriate federal index. This adjustment shall occur without
    an amendment of these Bylaws.

3.  [Reimbursement of
    Expenses]{.underline}[]{#__RefHeading___Toc124342027 .anchor}.
    Directors shall also be entitled to receive reimbursement for
    reasonable and necessary travel and other actual expenses incurred
    in performing duties of their offices and in attending meetings of
    the Board of Directors and meetings of committees of the Board of
    Directors or advisory committees.

4.  [Prohibition Against a Director Being an Officer, Employee, or
    Consultant]{.underline}[]{#__RefHeading___Toc124342028 .anchor}.
    While serving as a Director, a Director shall not be an officer or
    employee of the Corporation, or a consultant to the Corporation
    (except as permitted in Section 7.15.1 with respect to the Chief
    Executive Officer for the period before the Board of Directors has
    made the determination described in Section 7.1.1(v)(a)).

7.16 [Special Issues List]{.underline}[]{#__RefHeading___Toc124342029
.anchor}.

> 7.16.1 [The Special Issues
> List]{.underline}[]{#__RefHeading___Toc124342030 .anchor}. The
> following matters constitute the "Special Issues List":
>
> \(i\) Authorization for the Corporation to exercise backstop measures
> with respect to chronic, significant, commercial congestion;
>
> \(ii\) The Corporation's initial proposal for cost-based pricing
> long-term transmission rights (transmission rights with durations of
> one year or longer) issued by the Corporation;
>
> []{.mark}
>
> \(iii\) Authorization for the Corporation to issue financial
> transmission rights;
>
> \(iv\) Authorization for the Corporation's market monitor to impose
> penalties or actively intervene in markets; and
>
> \(v\) Authorization for the Corporation to adopt and enforce a loss
> methodology that overrides individual company loss methodologies.

The matters identified in the Special Issues List shall be subject to
the provisions of Sections 7.16.7 through 7.16.9.

7.16.2 [Backstop Measures]{.underline}.[]{#__RefHeading___Toc124342031
.anchor} For purposes of this Section 7.16, the term "backstop measures"
means that the Corporation

> \(i\) contracts with a willing third party to implement the
> Corporation's preferred transmission solution to address chronic,
> significant, commercial congestion that no Person has implemented;
>
> \(ii\) allocates resulting costs to beneficiaries through voluntary
> arrangements or tariff rates; and
>
> \(iii\) identifies and assigns resulting transmission rights.

Before implementing for the first time a backstop measure with respect
to chronic, significant, commercial congestion, the Board of Directors
must first submit a proposal to invoke authorization to exercise
backstop measures to a vote of the MRC in accordance with the
consultation, procedural, and timing requirements set forth in
Sections 7.16.7 and 7.16.8 and

{*Section 7.16.2 continued . . .*}

after meeting the additional requirements of Section 7.12.2. If the
requirements to invoke authorization to exercise backstop measures, as
set forth Sections 7.16.7 and 7.16.8, have been satisfied, the
Corporation may, subject to Section 7.12.2, thereafter implement
backstop measures to address chronic, significant, commercial congestion
to the extent consistent with the scope of authorization that has been
invoked by the Board of Directors. If the Board of Directors proposes to
implement backstop measures to address chronic, significant, commercial
congestion in a manner that is not within scope of authorization that
has been invoked by the Board of Directors, the Board of Directors must
comply with the consultation, procedural, and timing requirements set
forth in Sections 7.16.7 and 7.16.8 to invoke any necessary additional
authorization before proceeding (as well as meeting the additional
requirements of Section 7.12.2). The Corporation's ability to implement
backstop measures does not override the prohibition against owning
transmission or distribution facilities as set forth in Section 3.2.

7.16.3 [Initial Long-Term
Pricing]{.underline}[]{#__RefHeading___Toc124342032 .anchor}. When the
Corporation begins offering new long-term transmission rights
(transmission rights with durations of one year or longer), the Board of
Directors must submit its initial proposal for cost-based pricing of new
long-term transmission rights to a vote of the MRC in accordance with
the consultation and procedural requirements set forth in
Section 7.16.7. If the requirements to submit its initial proposal for
pricing new long-term transmission rights to a vote of the MRC, as set
forth Section 7.16.7, have been satisfied, the Corporation may
thereafter implement its initial proposal for pricing new long-term
transmission rights so long as the proposal is consistent with the scope
of authorization that has been invoked by the Board of Directors. The
provisions of Section 7.16 shall not apply to rates or rate structures
for grid management or other services offered by the Corporation that
are purchased separately from or in addition to new long-term
transmission rights. In addition, the provisions of Section 7.16 shall
not apply to any costs allocated by the Corporation as a result of
exercising any "backstop authority" even if such costs would be
incorporated into pricing for new long-term transmission rights.

7.16.4 [Authorization to Issue Financial Transmission
Rights]{.underline}.[]{#__RefHeading___Toc124342033 .anchor} For
purposes of this Section 7.16, the Corporation's action to "issue
financial transmission rights" means that the Corporation either

> \(i\) substitutes physical transmission rights (either historical
> contract path or physical injection-withdrawal rights) on a
> transmission owner's system with transmission service that separately
> charges for, and provides financial rights to hedge against,
> locationally derived costs of congestion clearing; or
>
> \(ii\) provides transmission service in response to requests for new
> transmission service through offering transmission service that
> separately charges for, and offers financial rights to hedge against,
> locationally derived costs of congestion.

Before acting for the first time to "to issue financial transmission
rights" within the meaning of this Section 7.16.4, the Board of
Directors must first submit a proposal to invoke authorization to do so
to a vote of the MRC in accordance with the consultation and procedural

{*Section 7.16.4 continued . . .*}

requirements set forth in Sections 7.16.7 and 7.16.9. If the
requirements to invoke the necessary authority, as set forth in
Sections 7.16.7 and 7.16.9, have been satisfied, the Corporation may
thereafter issue financial transmission rights to the extent consistent
with the scope of authorization that has been invoked by the Board of
Directors. If the Board of Directors proposes to issue financial
transmission rights in a manner that is not within the scope of
authorization that has been invoked by the Board of Directors, the Board
of Directors must comply with the consultation and procedural
requirements set forth in Sections 7.16.7 and 7.16.9 to invoke any
necessary additional authorization before proceeding. This requirement
to invoke authorization to issue financial transmission rights shall not
preclude the Board of Directors from authorizing testing (limited in
time, scope, and financial risk assumed by the Corporation, and in which
participation is voluntary) as it deems appropriate to help facilitate
its determination of whether issuing financial transmission rights is
feasible and prudent. In addition, the Corporation's implementation of a
congestion management approach that relies on a market-based system to
relieve congestion (such as through voluntary redispatch bids), in
conjunction with historic contract path or physical injection-withdrawal
rights, shall not be subject to the requirements of Section 7.16.

7.16.5 [Authorization of Certain Market Monitor
Actions]{.underline}[]{#__RefHeading___Toc124342034 .anchor}. Before the
market monitor for the Corporation may be authorized to impose penalties
or actively intervene in markets, the Board of Directors must first
submit a proposal to invoke authority to so authorize the market monitor
to a vote of the MRC in accordance with the consultation and procedural
requirements set forth in Section 7.16.7. If the requirements to invoke
the necessary authority, as set forth Section 7.16.7, have been
satisfied, the Corporation may thereafter authorize the market monitor
for the Corporation to impose penalties or actively intervene in markets
to the extent consistent with the scope of authority that has been
invoked by the Board of Directors. If the Board of Directors proposes to
authorize the market monitor for the Corporation to impose penalties or
actively intervene in markets in a manner that is not within the scope
of authorization that has been invoked by the Board of Directors, the
Board of Directors must comply with the consultation and procedural
requirements set forth in Section 7.16.7 to invoke any necessary
additional authorization before proceeding.

7.16.6 [Authorization to Implement Certain Loss
Methodologies]{.underline}[]{#__RefHeading___Toc124342035 .anchor}.
Before the Corporation may adopt and enforce a loss methodology that
overrides individual company loss methodologies, the Board of Directors
must first submit a proposal to invoke authorization to do so to a vote
of the MRC in accordance with the consultation and procedural
requirements set forth in Section 7.16.7. If the requirements to invoke
the necessary authorization, as set forth Section 7.16.7, have been
satisfied, the Corporation may thereafter adopt and enforce a loss
methodology that overrides individual company loss methodologies to the
extent consistent with the scope of authorization that has been invoked
by the Board of Directors. If the Board of Directors proposes to adopt
and enforce a loss methodology that overrides individual company loss
methodologies in a manner that is not within the scope of authorization
that has been invoked by the Board of Directors, the Board of Directors
must comply with the consultation and procedural requirements set forth
in Section 7.16.7 to invoke any necessary additional authorization
before proceeding.

7.16.7 [Procedural Requirements Applicable to Special Issues
List]{.underline}[]{#__RefHeading___Toc124342036 .anchor}. An action by
the Corporation to invoke an authorization or take an action identified
on the Special Issues List is subject to the procedural requirements set
forth in Sections 7.16.7(i) through 7.16.7(vii).

> \(i\) [Preliminary Consultations Related to Proposal
> Development]{.underline}. In the course of developing a proposal to
> invoke an authorization or take an action identified on the Special
> Issues List, the Board of Directors may seek preliminary input from
> the general public, as well as Members, the MRC, and the Governmental
> Committee.
>
> \(ii\) [Mandatory Consultation Process]{.underline}. If the Board of
> Directors intends to vote on adopting a proposal to invoke an
> authorization or take an action identified on the Special Issues List,
> the Board of Directors shall provide notice of its proposal according
> to its then effective policies for providing notice to the general
> public, as well as to Members, the MRC, and the Governmental
> Committee. The notice of proposal must include a specific
> identification of the scope of authorization the Board of Directors
> proposes to invoke or the action the Board of Directors proposes to
> take. After providing notice, the Board of Directors shall complete
> formal consultation processes concerning the proposal (which may be
> separate or combined) with the MRC and with the Governmental
> Committee. The Board of Directors shall provide not less than
> forty-five (45) days to complete its formal consultation processes
> before voting to adopt a proposal to invoke an authorization or take
> an action identified on the Special Issues List. This formal
> consultation period may overlap with any period of notice required in
> connection with the Board of Directors vote under Section 7.16.7(iii).
>
> \(iii\) [Board of Directors Vote to Adopt a Proposal]{.underline}.
> Within fourteen (14) days after completing the mandatory consultation
> process set forth in Section 7.16.7(ii), the Board of Directors (in
> compliance with all applicable provisions of these Bylaws concerning
> notice of and the manner of conducting meetings of the Board of
> Directors) shall vote on whether to adopt a proposal to invoke an
> authorization or take an action identified on the Special Issues List.
> The Board of Directors may, before voting, make changes to its
> proposal as noticed for the mandatory consultation process under
> Section 7.16.7(ii) to reflect input received during mandatory
> consultations; [provided]{.underline}, [however]{.underline}, that any
> action by the Board of Directors to adopt a proposal to invoke an
> authorization or take an action identified on the Special Issues List
> must include a specific identification of the scope of authorization
> the Board of Directors proposes to invoke or the action the Board of
> Directors proposes to take. As provided in Section 7.9.1, the
> affirmative vote of a majority of Directors then in office shall be
> sufficient to adopt the proposal. If the Board of Directors votes to
> adopt the proposal, the Board of Directors shall comply with the
> additional requirements set forth in Sections 7.16.7(iv) through
> 7.16.7(vii).

{*Section 7.16.7 continued . . .*}

> \(iv\) [Submission of Proposal to Members Representative Committee
> Vote]{.underline}. Subject to all applicable provisions of these
> Bylaws concerning notice of and the manner of conducting meetings of
> the MRC, the Board of Directors shall, within fourteen (14) days after
> any vote to adopt a proposal under Section 7.16.7(iii), submit to the
> MRC the proposal as adopted by the Board of Directors. With respect to
> a proposal to take an action or invoke an authorization specified in
> Section 7.16.1(i), (ii), or (iii), the Board of Directors shall also
> comply with the provisions of Sections 7.16.8 and 7.16.9.
>
> \(v\) [Members Representative Committee Vote]{.underline}. Promptly
> after receiving a proposal from the Board of Directors under
> Section 7.16.7(iv), the MRC shall issue (or caused to be issued)
> notice of a meeting of the MRC to vote on the proposal. Promptly
> following the completion of any notice period required by these
> Bylaws, the MRC shall vote to indicate whether it supports a proposal
> submitted to it by the Board of Directors in accordance with Section
> 7.16.7(iv).
>
> \(a\) If at least sixteen (16) members of the MRC vote to support a
> proposal submitted to it by the Board of Directors in accordance with
> Section 7.16.7(iv), the Board of Directors may, after the MRC has
> voted, implement the proposal without any further vote of the Board of
> Directors.
>
> \(b\) If fewer than sixteen (16) members of the MRC vote to support a
> proposal submitted to it by the Board of Directors in accordance with
> Section 7.16.7(iv), the matter will be deemed "remanded" to the Board
> of Directors due to insufficient MRC support and final adoption of the
> proposal shall require a vote of the Board of Directors in accordance
> with Section 7.16.7(vi).
>
> \(vi\) [Final Board of Directors Vote]{.underline}. If the MRC votes
> to remand a proposal submitted to it by the Board of Directors in
> accordance with Section 7.16.7(iv), the Board of Directors may,
> following the MRC vote required under Section 7.16.7(v) (and in
> compliance with all applicable provisions of these Bylaws concerning
> notice of and the manner of conducting meetings of the Board of
> Directors) take final action to adopt the proposal only by a
> Supermajority Board Vote.
>
> \(vii\) [Implementation Following Final Board of Directors
> Vote]{.underline}. Except in the case of emergency as declared by the
> Board of Directors, if the Board of Directors has taken final action
> to adopt a proposal after that proposal has been remanded to the Board
> of Directors by an MRC vote under Section 7.16.7(v)(b), the Board of
> Directors may not implement the proposal until at least thirty (30)
> days following the final Board of Directors vote.

7.16.8 [Timing Requirements Applicable to Backstop
Authorization]{.underline}[]{#__RefHeading___Toc124342037 .anchor}. The
Board of Directors may not seek to invoke the backstop authorization
with respect to chronic, significant, commercial congestion specified in
Section 7.16.1(i) until the Board of Directors is satisfied that it has
sufficient knowledge regarding where the transmission system is
congested, what the congestion is costing users, and the potential
alternatives available to address the congestion. The Board of Directors
may invoke this authorization before a full financial rights-based
congestion management system is in place.

7.16.9 [Study Required Before Proposal to Issue Financial
Rights]{.underline}[]{#__RefHeading___Toc124342038 .anchor}. Before
initiating a proposal to invoke the authorization specified in
Section 7.16.1(iii), the Board of Directors shall cause the Corporation
to perform (or contract with an appropriately qualified third party to
perform) a study of the net benefits of issuing financial transmission
rights. The study must include a review of other systems or markets in
the United States or Canada that have implemented financial transmission
rights similar to those the Board of Directors proposes for the
Corporation to issue and any other implemented financial transmission
rights the Board of Directors deems relevant to its inquiry. The Board
of Directors must also make the study publicly available promptly after
its completion.

7.17 [Member Ability to Elevate Board of Directors Approval Vote on
Policy or Scope Changes Considered
Major]{.underline}[]{#__RefHeading___Toc124342039 .anchor}. Subject to
the exclusions set forth in Section 7.17.5, if the Board of Directors
proposes in a notice of or agenda for a Board of Directors meeting to
take action that Members consider to be a major change in the scope of
the Corporation's activities or the policies governing the Corporation's
activities, or the Board of Directors takes action (at a meeting or by
consent) that the Members consider to be a major change in the scope of
the Corporation's activities or the policies governing the Corporation's
activities (and the action was not included in a Board of Directors
meeting notice or agenda), the Members may indicate their concern with
respect to the action and trigger a requirement for a Supermajority
Board Vote to authorize the action as provided in Sections 7.17.1
through 7.17.4.

7.17.1 [Member Action to Express
Concern]{.underline}.[]{#__RefHeading___Toc124342040 .anchor} If, during
the interval provided in Section 7.9.2, the Members wish to indicate
their concern with respect to a proposed matter that Members consider to
be a major change in the scope of the Corporation's activities or the
policies governing the Corporation's activities, they may do so by

> \(i\) convening a special meeting of Members within thirty (30) days
> after
>
> \(a\) the Corporation has published notice of or an agenda for the
> applicable meeting of the Board of Directors or proposed consent (if
> the notice or agenda included the proposal for the Board of Directors
> to act on a matter that Members consider to be a major change in the
> scope of the Corporation's activities or the policies governing the
> Corporation's activities),

{*Section 7.17.1 continued . . .*}

> \(b\) the Board of Directors has taken action on a matter that Members
> consider to be a major change in the scope of the Corporation's
> activities or the policies governing the Corporation's activities (and
> the action was not included in the Board meeting notice or agenda), or
>
> \(c\) the Board of Directors takes action by consent without prior
> notice, whichever is earliest; or
>
> \(ii\) conducting a vote as provided in Section 7.17.2 at a biannual
> or other regular meeting of Members if the biannual or other regular
> meeting of Members occurs within thirty (30) days after
>
> \(a\) the Corporation has published notice of or an agenda for the
> applicable meeting of the Board of Directors or proposed consent (if
> the notice or agenda included the proposal for the Board of Directors
> to act on a matter that Members consider to be a major change in the
> scope of the Corporation's activities or the policies governing the
> Corporation's activities),
>
> \(b\) the Board of Directors has taken action on a matter that Members
> consider to be a major change in the scope of the Corporation's
> activities or the policies governing the Corporation's activities (and
> the action was not included in the Board of Directors meeting notice
> or agenda), or
>
> \(c\) the Board of Directors takes action by consent without prior
> notice, whichever is earliest.

7.17.2 [Trigger for Elevated Board of Directors Approval
Vote]{.underline}[]{#__RefHeading___Toc124342041 .anchor}. If at a
special meeting of Members convened in accordance with Section 7.17.1(i)
or a biannual or other regular meeting of Members as provided in
Section 7.17.1(ii), not less than twenty (20) votes' worth of voting
power held by the Members vote to indicate that an action proposed or
approved by the Board of Directors constitutes a major change in the
scope of the Corporation's activities or the policies governing the
Corporation's activities and should not be implemented without a
Supermajority Board Vote, then, unless the matter is covered by an
exclusion set forth in Section 7.17.5, the requirements of
Sections 7.17.3 and 7.17.4 shall apply.

7.17.3 [Elevated Board of Directors Approval
Vote]{.underline}[]{#__RefHeading___Toc124342042 .anchor}. If the
requirements for a Member vote to trigger an elevated Board of Directors
approval vote as set forth in Section 7.17.2 have been satisfied with
respect to a matter, the Board of Directors may not approve or authorize
any proposed action with respect to that matter except by a
Supermajority Board Vote. In addition, if a Member vote pursuant to
Section 7.17.2 that triggers an elevated Board of Directors approval
occurs after the Board of Directors has taken action with respect to the
matter, the Board of Directors must meet again to vote on final
authorization or approval of the applicable action (even if the initial
vote to authorize or approve the action was a Supermajority Board Vote).

7.17.4 [Implementation
Timing]{.underline}.[]{#__RefHeading___Toc124342043 .anchor} Except in
the case of emergency as declared by the Board of Directors, if the
Board of Directors has taken final action on a matter for which the
Members have triggered an elevated Board of Directors approval vote in
accordance with Section 7.17.2, the Board of Directors may not implement
the major change in scope or policy until at least thirty (30) days
following the final Board of Directors vote.

7.17.5 [Exclusions]{.underline}.[]{#__RefHeading___Toc124342044 .anchor}
The following shall not be subject to the provisions of Sections 7.17.1
through 7.17.4:

> \(i\) matters subject to the "Special Issues List" provisions of
> Section 7.16;
>
> \(ii\) the development, modification, or authorization of current or
> proposed budgets for the Corporation;
>
> \(iii\) any Board of Directors action to authorize, initiate, or
> conduct studies or analyses related to the Corporation's activities or
> services (or potential changes to the Corporation's services or
> activities);
>
> \(iv\) the Corporation's merger or dissolution or the sale, exchange,
> or other disposition of any of the Corporation's assets;
>
> \(v\) amendment of these Bylaws; and
>
> \(vi\) personnel matters, litigation, real estate transactions, and
> other similar matters that the Board of Directors is authorized to
> address in executive session.

**ARTICLE VIII\
\
COMMITTEES OF THE BOARD OF DIRECTORS**[]{#__RefHeading___Toc124342045
.anchor}

8.1 [Committees of Directors]{.underline}[]{#__RefHeading___Toc124342046
.anchor}. In addition to the committees described in Sections 8.3, 8.4,
8.6, and 8.7, the Board of Directors may, by resolution adopted by a
majority of the Directors then in office, designate one (1) or more
committees, each consisting of two (2) or more Directors, to serve at
the pleasure of the Board of Directors. Appointments to such committees
may be made at any meeting of the Board of Directors by a majority vote
of the Directors then in office. Each committee shall have such
authority of the Board of Directors as is delegated by resolution of the
Board of Directors, except that no committee, regardless of the Board of
Directors resolution, may

### (i) elect, appoint, or remove any member of such committee, any Director, or any officer of the Corporation;

### 

### (ii) appoint any other committees of the Board of Directors or the members of any such committees;

### {*Section 8.1 continued . . .*}

### (iii) fix compensation of Directors for serving on the Board of Directors or any committee;

### 

### (iv) amend, alter, or repeal these Bylaws, or adopt new bylaws, or amend the Articles of Incorporation;

### 

### (v) amend, alter, or repeal any resolution of the Board of Directors;

### 

### (vi) adopt a plan of merger or consolidation;

### 

### (vii) authorize or cause the Corporation to enter into any binding contract or other legal obligation or incur any liability;

### 

### (viii) authorize the sale, lease, exchange, mortgage, or pledge of all or substantially all of the property or the assets of the Corporation;

### 

### (ix) authorize the voluntary dissolution of the Corporation or revoke proceedings therefore, or adopt a plan for the distribution of the assets of the Corporation on dissolution; or

### 

### (x) take any final action with respect to the Special Issues List set forth in Section 7.16.

## 8.2 [Advisory Committees]{.underline}. The Board of Directors may, by resolution adopted by a majority of the Directors then in office, appoint advisory committees to serve at the pleasure of the Board of Directors (in addition to those advisory committees identified in these Bylaws). Advisory committee membership may consist of both Directors and non-Directors or non-Directors only. Advisory committees have no authority to act for the Corporation but shall report their findings and recommendations to the Board of Directors.

8.2.1 [Initial Required Member Advisory Committees]{.underline}.
[]{#__RefHeading___Toc124342048 .anchor} Promptly after the adoption of
these Bylaws, the Board of Directors shall form the advisory committees
specified in Sections 8.2.1(i) through 8.2.1(iii). The Board of
Directors shall maintain the advisory committees specified in
Sections 8.2.1(i) through 8.2.1(iii) for not less than four (4) years
following adoption of these Bylaws, but may thereafter modify or disband
these advisory committees; [provided]{.underline},
[however]{.underline}, that before disbanding any committee specified in
Sections 8.2.1(i) through 8.2.1(iii), the Board of Directors should
consider how disbanding the committee would affect Member participation
in the formulation of policies, protocols, tariff provisions and any
other rules or guidance pertinent to the subject area of a committee.
Nothing in this Section 8.2.1 shall limit the power of the Board of
Directors to form, modify, or disband advisory committees other than
those specified in Sections 8.2.1(i) through 8.2.1(iii).

### 

### 

### {*Section 8.2.1 continued . . .*}

> \(i\) [Tariff Committee]{.underline}. As provided in Section 8.2.1,
> the Corporation shall have a Tariff Committee to advise the Board of
> Directors on the Corporation's tariff(s). The Tariff Committee shall
> consist of up to fifteen (15) representatives of Members appointed by
> the Board of Directors. Directors may, but are not required to, serve
> on the Tariff Committee. The Board of Directors shall endeavor to
> select representatives from each of the Member Classes to serve on the
> Tariff Committee, and shall endeavor to select individuals who
> collectively possess an appropriate spectrum of expertise with respect
> to defining the terms and conditions for electric transmission
> services and participation in related markets.
>
> \(ii\) [Operations Committee]{.underline}. As provided in
> Section 8.2.1, the Corporation shall have an Operations Committee to
> advise the Board of Directors on electric transmission system and
> market operations. The Operations Committee shall consist of up to
> fifteen (15) representatives of Members appointed by the Board of
> Directors. Directors may, but are not required to, serve on the
> Operations Committee. The Board of Directors shall endeavor to select
> representatives from each of the Member Classes to serve on the
> Operations Committee, and shall endeavor to select individuals who
> collectively possess an appropriate spectrum of expertise with respect
> to electric transmission and market operations.
>
> \(iii\) [Planning Committee]{.underline}. As provided in
> Section 8.2.1, the Corporation shall have a Planning Committee to
> advise the Board of Directors on transmission-planning matters. The
> Planning Committee shall consist of up to fifteen (15) representatives
> of Members appointed by the Board of Directors. Directors may, but are
> not required to serve on the Planning Committee. The Board of
> Directors shall endeavor to select representatives from each of the
> Member Classes to serve on the Planning Committee, and shall endeavor
> to select individuals who collectively possess an appropriate spectrum
> of expertise with respect to electric transmission planning.

8.2.2 [Consideration of Member-Submitted
Candidates]{.underline}.[]{#__RefHeading___Toc124342049 .anchor} In
appointing representatives of Members to the advisory committees
specified in Sections 8.2.1(i) through 8.2.1(iii), the Board of
Directors shall consider candidates whose names have been submitted by
Members in accordance with Section 5.9.3.

8.3 [Audit Committee]{.underline}[]{#__RefHeading___Toc124342050
.anchor}.

1.  [Directors on the Audit
    Committee]{.underline}[]{#__RefHeading___Toc124342051 .anchor}.
    There shall be an Audit Committee of the Board of Directors
    consisting of three (3) or more Directors appointed by the Board of
    Directors.

2.  [Role of Audit Committee]{.underline}[]{#__RefHeading___Toc124342052
    .anchor}. The Audit Committee shall have no powers of the Board of
    Directors but shall serve in an advisory capacity by reviewing

### 

### {*Section 8.3.2 continued . . .*}

> \(i\) the Corporation's annual independent financial audit and
> preparing a report for the Board of Directors;
>
> \(ii\) the Corporation's program for compliance with laws and
> regulations; and
>
> \(iii\) the financial controls in the business practices of the
> Corporation.

In addition, the Audit Committee shall monitor compliance with the
Corporation's conduct rules for Directors and employees to ensure the
Corporation's independence and freedom from conflicts of interests, and
shall make regular reports to the Board of Directors regarding such
compliance.

The Audit Committee shall make recommendations from time to time to the
Board of Directors as to the implementation of procedures to ensure
continued compliance with the conduct rules.

8.4 [Budget Committee]{.underline}.[]{#__RefHeading___Toc124342053
.anchor}

8.4.1 [Participation on the Budget Committee;
Quorum]{.underline}[]{#__RefHeading___Toc124342054 .anchor}. Beginning
within 30 days following the date on which the Board of Directors makes
the determination described in Section 7.1.1(v)(a), there shall be a
Budget Committee consisting of between three (3) and five (5)
representatives of Members appointed by the Board of Directors and at
least two (2) but no more than three (3) Directors. The Board of
Directors has discretion to decide whom to appoint after considering
nominations from Members, provided that the Board of Directors will
endeavor to constitute a committee that has one (1) (and no more than
one (1)) qualified representative from each of the Member Classes.  Each
of the Budget Committee's members from the membership shall represent a
different Member Class and shall, to the extent practicable, be current
or former executives responsible for an organization's overall budget
preparation or implementation.  A quorum for any meeting of the Budget
Committee shall be three (3) committee members.  Attendance at a meeting
of at least a quorum is necessary for Budget Committee action, and
decisions shall be made by majority vote.

8.4.2 [Purpose of the Budget
Committee]{.underline}[]{#__RefHeading___Toc124342055 .anchor}. The
Budget Committee, with support from the Corporation's staff and after
providing opportunities for the Board Advisory Committee to submit
recommendations, shall

> \(i\) prepare an annual budget of expenditures and capital
> commitments, including estimated timing and expected sources of
> funding for those expenditures;

### 

### {*Section 8.4.2 continued . . .*}

> \(ii\) prepare an annual forecast budget of expenditures and capital
> commitments consistent with the business plan or most recent strategic
> plan, both referenced in Section 7.12.4, including estimated timing
> and expected sources of funding for those expenditures, for the two-
> (2-) year period following the period covered by the budget in
> subsection (i);
>
> \(iii\) prepare an annual narrative forecast of capital needs for the
> two-year period following the period covered by the budget in
> subsection (ii), including estimated timing and possible sources of
> funding for those expenditures;
>
> \(iv\) initiate or review and make recommendations regarding
> subsequent proposals for modification of the adopted budget; and
>
> \(v\) perform such other functions as the Board of Directors may
> delegate or direct.

8.4.3 [Information
Guidelines]{.underline}[]{#__RefHeading___Toc124342056 .anchor}. The
Corporation shall provide the Budget Committee members with access to
any information the Budget Committee determines is appropriate or
necessary to carry out its duties.  Prior to commencing its work, the
Budget Committee shall, in conjunction with the Corporation's counsel,
establish guidelines for identification and treatment of confidential
information.

8.4.4 [Budget Committee
Recommendations]{.underline}[]{#__RefHeading___Toc124342057 .anchor}.
The Budget Committee shall submit its recommended budget and forecasts
to the Board of Directors by a date established by the Board of
Directors.  The Board of Directors shall identify any material changes
it makes to the recommendations of the Budget Committee when it submits
its proposed annual budget, or any proposal for modification of the
adopted budget or forecasts, to the Board Advisory Committee pursuant to
Section 8.5.3.

> 8.5 [Board Advisory
> Committee]{.underline}[]{#__RefHeading___Toc124342058 .anchor}.

8.5.1 [Participation on the Board Advisory
Committee]{.underline}[]{#__RefHeading___Toc124342059 .anchor}. The
Corporation shall have a Board Advisory Committee to provide advice to
the Board of Directors on Board of Director decisions and other matters
of significance to the Corporation. Membership on the Board Advisory
Committee shall be open to any Member and its Affiliates. A Member and
its Affiliates may participate on the Board Advisory Committee upon the
Member providing the Secretary of the Corporation written notice of the
name, address, telephone number, facsimile number, and electronic mail
address of its representatives. A Member may appoint no more than three
(3) representatives and three (3) alternates, who represent the
interests of the Member or its Affiliates. A Member may at any time,
effective upon notice to the Secretary of the Corporation, replace the
individuals who are authorized to participate on the Board Advisory
Committee. Each Member warrants to the Corporation and to the other
Members that the individuals appointed to the Board Advisory Committee
have the authority to participate in the Board Advisory Committee on
behalf of the Member or Affiliate, and are authorized to participate in

### {*Section 8.5.1 continued . . .*}

debate and consider input from others before taking a position. The
Corporation shall maintain at all times a current list of the name,
address, affiliation, and interest of each individual appointed to the
Board Advisory Committee. The list shall be posted on Grid West's
Website and updated periodically.

8.5.2 [Purpose of the Board Advisory
Committee]{.underline}[]{#__RefHeading___Toc124342060 .anchor}. The
Board Advisory Committee shall advise the Board of Directors on
additions and revisions to the Corporation's rules and protocols,
tariffs, reliability and operating standards, other technical matters,
and other matters of concern to members of the Board Advisory Committee.
The Board Advisory Committee may advise the Board of Directors
concerning any other issues relating to the Corporation, and may
consider issues referred for the Board Advisory Committee's
consideration from any source, including the Board of Directors, any
member of the Board Advisory Committee, any Member, or any officer or
employee of the Corporation. The Board of Directors shall be required to
consider any advice of the Board Advisory Committee that is timely
provided to the Board of Directors along with any other advice properly
presented to the Board of Directors without limiting the discretion or
authority of the Board of Directors to consider and take action on any
matter in accordance with the provisions of these Bylaws, the Articles
of Incorporation, and applicable law.

8.5.3 [Matters Requiring Advice to the Board of
Directors]{.underline}[]{#__RefHeading___Toc124342061 .anchor}. Except
in the case of emergency as declared by the Board of Directors, the
Board of Directors shall submit any proposed action concerning the
matters enumerated below to the Budget Committee (if applicable) or an
appropriate advisory committee under Section 8.2 if there is an advisory
committee to address the relevant subject matter. After receiving any
committee recommendations, the Board of Directors shall provide an
opportunity to the Board Advisory Committee and Governmental Committee
to advise the Board of Directors concerning the following matters prior
to any final action thereon by the Board of Directors:

> \(i\) any proposed amendment or modification to the Grid West Tariff
> (including any proposed amendment or modification to the Corporation's
> rates or revenue requirements);
>
> \(ii\) any proposed amendment or modification to the forms of the
> Transmission Agreements;
>
> \(iii\) Grid West transmission system planning matters;
>
> \(iv\) the annual budget of the Corporation (including potential
> budget reductions and financial controls when a proposed budget
> materially exceeds the expenses for the prior audited fiscal year) and
> any subsequent modification to the annual budget; and
>
> \(v\) any proposed measures to implement market power or price
> mitigation.

### {*Section 8.5.3 continued . . .*}

Such opportunity shall be afforded through notice to the Board Advisory
Committee and Governmental Committee of any such proposed action not
less than thirty (30) days prior to any final action thereon by the
Board of Directors; [provided]{.underline}, [however]{.underline}, that
the Board of Directors shall endeavor to provide the annual budget and
any subsequent modification to the Board Advisory Committee and
Governmental Committee at least ninety (90) days prior to any final
action thereon by the Board of Directors. Notice of all matters on which
the Board Advisory Committee and Governmental Committee shall have the
opportunity to advise the Board of Directors prior to this Section 8.5.3
shall be posted on the Grid West Website and sent, not less than thirty
(30) days before any final action, to each member of the public who has
requested notice of Member meetings, for the purpose of allowing public
comment and advice by the Board Advisory Committee and Governmental
Committee. All public comments shall be made available to the Board
Advisory Committee and Governmental Committee by the Secretary of the
Corporation.

8.5.4 [Procedures for Proposing and Commenting on
Issues]{.underline}[]{#__RefHeading___Toc124342062 .anchor}. The Board
Advisory Committee shall develop procedures to ensure that each Board
Advisory Committee member has an adequate opportunity to propose issues
for, and comment on issues under, consideration by the Board Advisory
Committee.

8.5.5 [Position Papers]{.underline}[]{#__RefHeading___Toc124342063
.anchor}. The members of the Board Advisory Committee shall not vote on
any issue. Any one (1) or more members of the Board Advisory Committee
who wish to provide advice to the Board of Directors may do so in the
form of a position paper. Any such position paper shall be accompanied
by the name of each Board Advisory Committee member who supports the
advice provided in such paper.

8.5.6 [Chairperson and Vice Chairperson of the Board Advisory
Committee]{.underline}[]{#__RefHeading___Toc124342064 .anchor}. The
Board Advisory Committee shall select a chairperson and a vice
chairperson who will convene and conduct the meetings of the Board
Advisory Committee. The Board of Directors shall be required to meet
with the chairperson of the Board Advisory Committee not fewer than four
(4) times each fiscal year, advance notice of which shall be provided to
other members of the Board Advisory Committee to afford them an
opportunity to attend.

8.5.7 [Procedures for Conducting Business of the Board Advisory
Committee]{.underline}[]{#__RefHeading___Toc124342065 .anchor}. The
Board Advisory Committee shall develop procedures to ensure that the
business of the Board Advisory Committee is conducted in an effective,
organized, and timely manner. Members of the Board Advisory Committee
shall have authority to refer matters to the staff of the Corporation
for study and investigation (subject to the imposition by the Board of
Directors and the President of the Corporation of reasonable controls on
the use of staff time and resources).

8.5.8 [Formation of Ad Hoc or Standing Work
Groups]{.underline}[]{#__RefHeading___Toc124342066 .anchor}. The Board
Advisory Committee may form one (1) or more *ad hoc* or standing work
groups to assist in accomplishing its functions. Such work groups shall
be open to membership and participation by any interested Member. Board
Advisory Committee members may also form groups of participants sharing
common views to develop position papers.

8.5.9 [Members Ability to Be Heard on Matters Before the Board of
Directors]{.underline}[]{#__RefHeading___Toc124342067 .anchor}.
Notwithstanding any provision of this Section 8.5, the existence of the
Board Advisory Committee, and any action or failure to act by the Board
Advisory Committee or any member thereof, shall not prevent any Member
from appearing before, or being heard on any matter before, the Board of
Directors.

8.6 [Governmental Committee]{.underline}[]{#__RefHeading___Toc124342068
.anchor}.

8.6.1 [Participation on the Governmental
Committee]{.underline}[]{#__RefHeading___Toc124342069 .anchor}. There
shall be a Governmental Committee consisting of representatives of the
Corporation, interested members of the State or Provincial Energy
Authority Member Sub-Class and Tribes Member Sub-Class, and
representatives of electricity regulatory commissions of Participating
Jurisdictions that are not Members of the Corporation. Membership in the
Corporation is not required for Participating Jurisdictions to
participate on the Governmental Committee.

8.6.2 Purpose of the Governmental
Committee[]{#__RefHeading___Toc124342070 .anchor}. The purpose of the
Governmental Committee is to provide consultation and such other
activities as the Board of Directors and representatives of
Participating Jurisdictions may agree are appropriate regarding the
fulfillment of the Corporation's purposes. The structure, organization,
and administration of the Governmental Committee shall be defined by the
participants on the Governmental Committee.

7.  [Board Performance Committee]{.underline}.
    []{#__RefHeading___Toc124342071 .anchor}

8.7.1 [Directors on the Board Performance
Committee]{.underline}[]{#__RefHeading___Toc124342072 .anchor}. There
shall be a Board Performance Committee of the Board of Directors
consisting of three (3) or more Directors appointed by the Board of
Directors.

8.7.2 [Role of the Board Performance
Committee]{.underline}[]{#__RefHeading___Toc124342073 .anchor}. The
Board Performance Committee shall

> \(i\) monitor developments in sound corporate governance practice;
>
> \(ii\) assist the Board of Directors in annually assessing the Board
> of Directors' performance;
>
> \(iii\) make recommendations for improvements to the Board of
> Directors' performance;

### {*Section 8.7.2 continued . . .*}

> \(iv\) provide annual reports to the Board of Directors concerning the
> performance of the Corporation's officers; and
>
> \(v\) perform such other functions as the Board of Directors may
> delegate or direct.

## 8.8 [Meetings]{.underline}. Regular and special meetings of committees of the Board of Directors and any advisory committees shall be governed by, and the procedures relating to such meetings and actions taken by such committees at such meetings or by consent shall be carried out in accordance with, the provisions of Sections 7.4 through 7.9 concerning meetings of the Board of Directors. For the purposes of the application of Article VII to the meetings of committees of the Board of Directors or advisory committees, references in Article VII to the Board of Directors shall be read as references to the applicable committee of the Board of Directors or to the applicable advisory committee. Minutes of each meeting of any committee (with the exception of closed sessions held pursuant to Section 7.6) shall be kept and filed with the corporate records. The Board of Directors may adopt rules for the governance of any committee not inconsistent with the provisions of these Bylaws.

# 

# ARTICLE IX  OFFICERS AND STAFF

## 9.1 [Officers]{.underline}. The officers of the Corporation shall be a President, one (1) or more Vice Presidents, a Secretary, a Treasurer. The same person may hold two (2) or more offices; [provided]{.underline}, [however]{.underline}, that the same person may not hold the offices of President and Secretary; and, [provided]{.underline}, [further]{.underline}, that the same person may not hold the offices of President and Treasurer. 

## 9.2 [Appointment]{.underline}. Officers may be appointed at any meeting of the Board of Directors, and the terms of service of the officers so appointed shall be as specified by the Board of Directors.

## 9.3 [Removal]{.underline}. Subject to the rights, if any, of the officer under any contract of employment, the Board of Directors may remove any officer of the Corporation whenever, in the Board of Directors' judgment, removal will serve the best interests of the Corporation.

## 9.4 [Resignation]{.underline}. Any officer may resign at any time by giving written notice to the Secretary of the Corporation. Any resignation shall take effect on the date of the receipt of that notice, or at any later time specified by that notice and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Corporation under any contract of employment with the officer.

## 9.5 [President]{.underline}. The President shall be responsible for conducting the affairs of the Corporation in a manner consistent with the policies and directives of the Board of Directors. He or she shall have such additional powers and duties as may be prescribed by the Board of Directors.

## 9.6 [Vice President]{.underline}. During the absence or disability of the President, the Vice President (or if there is more than one (1) Vice President, the Vice Presidents in the order designated by the Board of Directors) shall exercise all functions of the President, except as limited by resolution of the Board of Directors. Each Vice President shall have such powers and discharge such duties as may be assigned from time to time to such Vice President by the President or by the Board of Directors.

## 9.7 [Secretary]{.underline}. The Secretary of the Corporation shall serve notice of and act as Secretary at all meetings of the Board of Directors, shall administer the meetings of Members as provided in Articles V and VI, shall record the proceedings of all meetings in the minute books, and shall be responsible for conducting the affairs of the Corporation in a manner consistent with the policies and directives of the Board of Directors. The Secretary of the Corporation shall have such additional powers and duties as shall be prescribed by the Board of Directors.

## 9.8 [Treasurer]{.underline}. The Treasurer of the Corporation shall have the care and custody of the money, funds, and securities of the Corporation; shall account for the same; and shall have and exercise, under the supervision of the Board of Directors, all the powers and duties commonly incident to this office. The Treasurer shall prepare and maintain the books, accounts and financial statements, financial records, and financial reports of the Corporation consistent with generally accepted accounting principles.

## 9.9 [Additional Officers]{.underline}. The Board of Directors may appoint one (1) or more additional officers to perform such duties and have such powers as the Board of Directors shall designate.

## 9.10 [Compensation; Prohibition Against Loans]{.underline}.

### [Compensation Determined by the Board of Directors]{.underline}. Compensation of the officers shall be determined by Board of Directors.

### [Prohibited Loans; Permitted Advances]{.underline}. The Corporation shall not make any loan of money or property to or guarantee the obligation of any officer or Related Person of an officer; [provided]{.underline}, [however]{.underline}, that the Corporation may advance money to an officer for expenses reasonably anticipated to be incurred in performance of the duties of such officer so long as the officer would be entitled to reimbursement for such expenses absent such advance.

## 9.11 [Execution of Instruments]{.underline}. The President shall have the authority to execute legal instruments on behalf of the Corporation, subject to any restrictions or limitations that the Board of Directors may impose. The President's authority to execute legal instruments on behalf of the Corporation may be delegated by the President to other officers and employees of the Corporation on a general or limited basis with the prior approval of the Board of Directors.

## 9.12 [Staffing]{.underline}. Officers of the Corporation may, within such budgetary authority and subject to such other restrictions and requirements the Board of Directors may establish from time to time, hire or contract with such staff as is necessary to fulfill the purposes of the Corporation.

## 9.13 [Employees Conduct Rules]{.underline}. The Board of Directors shall ensure that the officers, employees, and substantially full-time consultants and contractors of the Corporation, and any transmission owner or operator personnel or other individuals performing discretionary functions for or on behalf of the Corporation, comply with the employees conduct rules. The employee conduct rules set forth in Attachment E shall become effective as of the date the initial Board of Directors takes office. The employees conduct rules may be amended from time to time by the Board of Directors. All contracts with non-full-time contractors shall include appropriate conduct rules, as determined by the Board of Directors from time to time, taking into account the nature of the work of such contractor and the value of such contractor's work to the Corporation. The Board of Directors may in its discretion include in the employees conduct rules specific postemployment restrictions on former employees, including restrictions on involvement in any matter in which the former employee was directly involved while an employee and restrictions for a limited period on any appearances before the Corporation in a representative capacity.

# ARTICLE X  RECORDS

##  10.1 [Records; Inspection of Records]{.underline}.

10.1.1 [Records]{.underline}[]{#__RefHeading___Toc124342093 .anchor}.
The Corporation shall keep or cause to be kept at its principal office
the following documents in the form of records:

#### 

#### (i) the Articles of Incorporation and all amendments and restatements thereof and a copy of all documents qualifying the Corporation to do business within a state;

#### (ii) the Corporation's bylaws and all amendments thereof, duly certified by the Secretary of the Corporation;

#### (iii) a list of Members, including the name, address, and Member Class of each Member;

#### (iv) a list of officers', Interim Directors', and Directors' names and addresses; and

#### (v) the annual financial statements required by Section 10.2.1, as well as any additional statements required by RCW 24.03.135 or any successor statute;

#### 

### {*Section 10.1.1 continued . . .*}

#### 

#### (vi) minutes of all meetings of the Members and of all meetings of the Interim Board and Board of Directors and each committee thereof (other than closed sessions held pursuant to the applicable provisions of the Corporation's bylaws and Board Advisory Committee meetings except for proposals and advice to the Board of Directors).

#### 

10.1.2 [Member Inspection of
Records]{.underline}[]{#__RefHeading___Toc124342094 .anchor}. The
records kept pursuant to this Section 10.1 shall be open at any
reasonable time to inspection by any Member of more than three (3)
months' standing or a representative of more than five percent (5%) of
the membership. Costs of inspecting or copying shall be borne by the
Member or representative exercising the right of inspection, except for
costs to copy the Corporation's Articles of Incorporation or Bylaws. Any
Member or representative exercising the right of inspection must have a
purpose reasonably related to membership interests. Neither Members nor
Member representatives may sell Members' lists obtained by inspection or
any other means.

## 10.2 [Financial Records]{.underline}.

### 

### 10.2.1 [Annual Financial Statements]{.underline}. As soon as reasonably practical after the close of the fiscal year, annual financial statements of the Corporation shall be prepared in accordance with generally accepted accounting principles and, when applicable, the requirements of FERC. The financial statements shall contain in appropriate detail the following:

#### 

#### (i) the assets and liabilities, including trust funds, of the Corporation as of the end of the fiscal year;

#### 

#### (ii) the principal changes in assets and liabilities, including trust funds, during the fiscal year;

#### 

#### (iii) the revenue or receipts of the Corporation, both unrestricted and restricted to particular purposes, for the fiscal year;

#### 

#### (iv) the expenses or disbursements of the Corporation, for both general and restricted purposes during the fiscal year;

#### 

#### (v) any transaction or series of related transactions during the previous fiscal year involving \$10,000 (U.S.) or more to which the Corporation was a party and in which any Directors or officers of the Corporation had or have a direct or indirect material financial interest. The report must disclose the names of the interested persons involved in such transaction, stating such person's relationship to the Corporation, the nature of such person's interest in the transaction, and, when practical, the amount of such interest; and

#### 

#### (vi) the amount and circumstances of any indemnification or advances aggregating more than \$10,000 (U.S.) paid during the fiscal year.

### 

### 10.2.2 [Accountant's Review of Financial Statements]{.underline}. The Board of Directors shall cause the financial statements of the Corporation to be reviewed by an independent accountant on at least an annual basis, with the independent accountant's review delivered to the Board of Directors, together with a management letter or letter of suggestions for improvement of fiscal management. .

### 

### 10.2.3 [Reports Concerning Financial Status]{.underline}. The Board of Directors shall cause the reports set forth below concerning the Corporation's financial status to be prepared and made available to the Members. The Board of Directors may require that reports concerning the Corporation's financial status be made available to the general public subject to a requirement that requesting parties pay the reasonable costs of providing the reports.

> \(i\) [Annual Report]{.underline}. As soon as reasonably practical
> after the close of the Corporation's year, a report including the
> financial statements described in Section 10.2.1 and performance
> results shall be prepared. The annual report shall include a review or
> audit report from the independent accountants, specific descriptions
> of actual performance results in terms of cost management, and other
> performance targets adopted by the Board of Directors.
>
> \(ii\) [Quarterly Report]{.underline}. As soon as reasonably practical
> after the close of each quarter, a written quarterly report will be
> prepared. Each quarterly report will include financial statements for
> the most recently completed quarter and the fiscal year to date,
> together with a review of actual expenditures as compared to the
> Corporation's budget as approved by the Board of Directors. In
> addition, the quarterly report will include a status report on
> accomplishing the performance targets adopted by the Board of
> Directors.

## 

## 10.3 [Records Retention]{.underline}. The Board of Directors shall cause to be developed and implemented a records retention program complying with all applicable legal requirements.

10.4 [Technical and Other
Information]{.underline}[]{#__RefHeading___Toc124342100 .anchor}. The
Board of Directors shall cause the Corporation to develop technical
information about the functioning of the regional transmission system
and related markets and shall endeavor to provide useful,
nonconfidential information to the public about the status of the system
and related markets, problems identified with system or market
operations, or other information relevant to the accomplishment of the
purposes of the Corporation. The Board of Directors shall cause the
Corporation to establish a policy for making available other useful,
nonconfidential information to the public.

**ARTICLE XI\
\
INDEMNIFICATION OF DIRECTORS, OFFICERS,\
EMPLOYEES, AND AGENTS**[]{#__RefHeading___Toc124342101 .anchor}

11.1 [Liability of Directors; Indemnification Rights of Members of the
Board of Directors and Certain
Officers]{.underline}[]{#__RefHeading___Toc124342102 .anchor}.

1.  [Limits on Liability of
    Directors]{.underline}[]{#__RefHeading___Toc124342103 .anchor}.
    Directors shall be liable to the Corporation only for the following:

> \(i\) acts or omissions that involve intentional misconduct by the
> Director;
>
> \(ii\) knowing violation of the law by the Director;
>
> \(iii\) conduct violating RCW 23B.08.310; and
>
> \(iv\) any transaction from which the Director personally receives a
> benefit in money, property, or services to which the Director is not
> legally entitled.

If the Washington Business Corporation Act, as applied to nonprofit
corporations, is amended to authorize corporate action further
eliminating or limiting the personal liability of Directors, then the
liability of a Director shall be deemed eliminated or limited to the
fullest extent permitted by the Washington Business Corporation Act, as
so amended.

2.  [Indemnification of
    Directors]{.underline}[]{#__RefHeading___Toc124342104 .anchor}. The
    Corporation shall indemnify the members of the Board of Directors
    and any officers to the full extent permitted by applicable law as
    then in effect against liability arising out of a Proceeding to
    which such individual was made a party because the individual is or
    was a Director or officer of the Corporation. The Corporation shall
    advance expenses (including attorneys' fees) incurred by such
    persons who are parties to a Proceeding in advance of final
    disposition of the Proceeding, as provided herein.

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1.  [Indemnification of Employees and
    Agents]{.underline}[]{#__RefHeading___Toc124342105 .anchor}. The
    Corporation shall have the power, to the fullest extent and in the
    manner permitted by applicable law, to indemnify and advance
    expenses (including attorneys' fees) to each of its employees and
    agents against expenses (including attorneys' fees), judgments,
    fines, settlements, and other amounts actually and reasonably
    incurred in connection with any Proceeding arising by reason of the
    fact that such person is or was an employee or agent of the
    Corporation.

2.  [Procedure for Seeking Indemnification or Advancement of
    Expenses]{.underline}[]{#__RefHeading___Toc124342106 .anchor}.

    1.  [Notification and Defense of
        Claim]{.underline}[]{#__RefHeading___Toc124342107 .anchor}.

> \(i\) Indemnitee shall promptly notify the Secretary of the
> Corporation in writing of any Proceeding for which indemnification
> could be sought under this Article XI. In addition, Indemnitee shall
> give the Corporation such information and cooperation as it may
> reasonably require and as shall be within Indemnitee's power.
>
> \(ii\) With respect to any such Proceeding as to which Indemnitee has
> so notified the Secretary of the Corporation:
>
> \(a\) the Corporation will be entitled to participate therein at its
> own expense; and
>
> \(b\) except as otherwise provided below, to the extent that it may
> wish, the Corporation, jointly with any other indemnifying party
> similarly notified, will be entitled to assume the defense thereof,
> with counsel satisfactory to Indemnitee. Indemnitee's consent to such
> counsel may not be unreasonably withheld.
>
> \(iii\) After notice from the Corporation to Indemnitee of its
> election to assume the defense, the Corporation will not be liable to
> Indemnitee under this Article XI for any legal or other expenses
> (including attorneys' fees) subsequently incurred by Indemnitee in
> connection with such defense. However, Indemnitee shall continue to
> have the right to employ his or her counsel in such Proceeding, at
> Indemnitee's expense, and if
>
> \(a\) the employment of counsel by Indemnitee has been authorized by
> the Corporation;
>
> \(b\) Indemnitee shall have reasonably concluded that there may be a
> conflict of interest between the Corporation and Indemnitee in the
> conduct of such defense;
>
> \(c\) the Corporation shall not in fact have employed counsel to
> assume the defense of such Proceeding,
>
> then the fees and expenses (including attorneys' fees) of Indemnitee's
> counsel shall be at the expense of the Corporation; and
>
> \(iv\) The Corporation shall not be entitled to assume the defense of
> any Proceeding brought by or on behalf of the Corporation or as to
> which Indemnitee shall reasonably have made the conclusion that a
> conflict of interest may exist between the Corporation and Indemnitee
> in the conduct of the defense.

11.3.2 [Information to Be Submitted and Method of Determination and
Authorization of
Indemnification]{.underline}[]{#__RefHeading___Toc124342108 .anchor}.

> \(i\) For the purpose of pursuing rights to indemnification under this
> Article XI, Indemnitee shall submit to the Board of Directors a sworn
> statement requesting indemnification and reasonable evidence of all
> amounts for which such indemnification is requested (together, the
> sworn statement and the evidence constitute an "Indemnification
> Statement").
>
> \(ii\) Submission of an Indemnification Statement to the Board of
> Directors shall create a presumption that Indemnitee is entitled to
> indemnification hereunder, and the Corporation shall, within sixty
> (60) days thereafter, make the payments requested in the
> Indemnification Statement to or for the benefit of Indemnitee, unless
>
> \(a\) within such sixty- (60-) day period it shall be determined by
> the Corporation that Indemnitee is not entitled to indemnification
> under this Article XI;
>
> \(b\) such vote shall be based upon clear and convincing evidence
> (sufficient to rebut the foregoing presumption); and
>
> \(c\) Indemnitee shall receive notice in writing of such
> determination, which notice shall disclose with particularity the
> evidence upon which the determination is based.
>
> \(iii\) At the election of the President of the Corporation, the
> foregoing determination may be made by either
>
> \(a\) a committee chosen by consent of a majority of the Directors of
> the Corporation, and consisting solely of two (2) or more Directors
> not at the time parties to the Proceeding; or
>
> \(b\) as provided by RCW 23B.08.550, as amended.
>
> \(iv\) Any determination that Indemnitee is not entitled to
> indemnification, and any failure to make the payments requested in the
> Indemnification Statement, shall be subject to judicial review by any
> court of competent jurisdiction.

11.3.3 [Special Procedure Regarding Advance for
Expenses]{.underline}[]{#__RefHeading___Toc124342109 .anchor}.

> \(i\) An Indemnitee seeking payment of expenses (including attorneys'
> fees) in advance of a final disposition of the Proceeding must furnish
> the Corporation, as part of the Indemnification Statement,

### {*Section 11.3.3 continued . . .*}

> \(a\) a written affirmation of Indemnitee's good-faith belief that
> Indemnitee has met the standard of conduct required to be eligible for
> indemnification; and
>
> \(b\) a written undertaking, constituting an unlimited general
> obligation of Indemnitee, to repay the advance if it is ultimately
> determined that Indemnitee did not meet the required standard of
> conduct.
>
> \(ii\) If the Corporation determines that indemnification is
> authorized, Indemnitee's request for advance of expenses (including
> attorneys' fees) shall be granted.

11.3.4 [Settlement]{.underline}[]{#__RefHeading___Toc124342110 .anchor}.
The Corporation is not liable to indemnify Indemnitee for any amounts
paid in settlement of any Proceeding without the Corporation's written
consent. The Corporation shall not settle any Proceeding in any manner
that would impose any penalty or limitation on Indemnitee without
Indemnitee's written consent. Neither the Corporation nor Indemnitee may
unreasonably withhold its consent to a proposed settlement.

11.4 [Contract and Related
Rights]{.underline}[]{#__RefHeading___Toc124342111 .anchor}.

11.4.1 [Contract Rights]{.underline}[]{#__RefHeading___Toc124342112
.anchor}. The right of an Indemnitee to indemnification and advancement
of expenses (including attorneys' fees) is a contract right upon which
Indemnitee shall be presumed to have relied in determining to serve or
to continue to serve in his or her capacity with the Corporation. Such
right shall continue as long as Indemnitee shall be subject to any
possible Proceeding. Any amendment to or repeal of this Article XI shall
not adversely affect any right or protection of an Indemnitee with
respect to any acts or omissions of such Indemnitee occurring prior to
such amendment or repeal.

11.4.2 [Optional Insurance, Contracts, and
Funding]{.underline}[]{#__RefHeading___Toc124342113 .anchor}. The
Corporation may

> \(i\) maintain insurance, at its expense, to protect itself and any
> Indemnitee against any liability, whether or not the Corporation would
> have power to indemnify the individual against the same liability
> under RCW 23B.08.510 or .520, or a successor statute;
>
> \(ii\) enter into contracts with any Indemnitee in furtherance of this
> Article XI and consistent with applicable law; and
>
> \(iii\) create a trust fund, grant a security interest, or use other
> means (including, without limitation, a letter of credit) to ensure
> the payment of such amounts as may be necessary to effect
> indemnification as provided in this Article XI.

11.4.3 [Severability]{.underline}[]{#__RefHeading___Toc124342114
.anchor}. If any provision or application of this Article XI shall be
invalid or unenforceable, the remainder of this Article XI and its
remaining applications shall not be affected thereby, and shall continue
in full force and effect.

11.4.4 [Right of Indemnitee to Bring
Suit]{.underline}[]{#__RefHeading___Toc124342115 .anchor}. If

> \(i\) a claim under this Article XI for indemnification is not paid in
> full by the Corporation within sixty (60) days after a written claim
> has been received by the Corporation, or
>
> \(ii\) a claim under this Article XI for advancement of expenses
> (including attorneys' fees) is not paid in full by the Corporation
> within twenty (20) days after a written claim has been received by the
> Corporation,

then Indemnitee may, but need not, at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim. To
the extent successful in whole or in part, Indemnitee shall be entitled
to also be paid the expense (to be proportionately prorated if
Indemnitee is only partially successful) of prosecuting such claim.

11.4.5 [No Presumption]{.underline}[]{#__RefHeading___Toc124342116
.anchor}. Neither

> \(i\) the failure of the Corporation (including its Board of Directors
> or independent legal counsel) to have made a determination prior to
> the commencement of such Proceeding that indemnification or
> reimbursement or advancement of expenses (including attorneys' fees)
> to Indemnitee is proper in the circumstances, nor
>
> \(ii\) an actual determination by the Corporation (including its Board
> of Directors or independent legal counsel) that Indemnitee is not
> entitled to indemnification or to the reimbursement or advancement of
> expenses (including attorneys' fees)

shall be a defense to the Proceeding or create a presumption that
Indemnitee is not so entitled.

11.5 [Exceptions to Corporation's
Obligations]{.underline}[]{#__RefHeading___Toc124342117 .anchor}. Any
other provision herein to the contrary notwithstanding, the Corporation
shall not be obligated pursuant to the terms of these Bylaws to
indemnify or advance expenses (including attorneys' fees) to Indemnitee
with respect to any Proceeding involving claims:

> \(i\) initiated or brought voluntarily by Indemnitee and not by way of
> defense, except with respect to Proceedings brought to establish or
> enforce a right to indemnification under these Bylaws or any other
> statute or law or as otherwise required under the statute, but such
> indemnification or advancement of expenses (including attorneys' fees)
> may be provided by the Corporation in specific cases if the Board of
> Directors finds it to be appropriate;
>
> \(ii\) instituted by Indemnitee to enforce or interpret this Article
> XI, if a court of competent jurisdiction determines that each of the
> material assertions made by Indemnitee in such Proceeding was not made
> in good faith or was frivolous;

### {*Section 11.5 continued . . .*}

> \(iii\) for which any of the expenses (including attorneys' fees) or
> liabilities for which indemnification is being sought have been paid
> directly to Indemnitee by an insurance carrier under a policy of
> officers' and Directors' liability insurance maintained by the
> Corporation; and
>
> \(iv\) with respect to which the Corporation is prohibited by
> applicable law as then in effect from paying such indemnification or
> advancement of expenses (including attorneys' fees). For example, the
> Corporation and Indemnitee acknowledge that federal legislation
> prohibits indemnification for certain ERISA violations.

# ARTICLE XII  MISCELLANEOUS

1.  [Fiscal Year]{.underline}[]{#__RefHeading___Toc124342119 .anchor}.
    The fiscal year of the Corporation shall be established at the
    discretion of the Board of Directors.

2.  [Corporation Seal]{.underline}[]{#__RefHeading___Toc124342120
    .anchor}. The Corporation may have a seal as specified by resolution
    of the Board of Directors. Such seal may be affixed to any and all
    corporate instruments, but failure to affix it shall not affect the
    validity of any instrument.

3.  [Notices]{.underline}[]{#__RefHeading___Toc124342121 .anchor}.
    Except as and to the extent otherwise provided in these Bylaws, any
    notice required or permitted to be given under or pursuant to these
    Bylaws shall be required to be delivered to the intended recipient
    party either by first-class mail, in person, by facsimile equipment
    providing written confirmation of completed transmission, or by
    electronic mail at such party's address, facsimile number, or
    electronic mail address provided to the Secretary of the Corporation
    in accordance with the requirements of these Bylaws. Notices
    delivered by mail shall be effective when deposited in the U.S. or
    Canadian mail, with first-class postage thereon prepaid. Notices
    delivered in person shall be effective upon delivery, and notices
    sent by facsimile or electronic mail shall be effective upon
    completion of successful transmission. Any Person may change the
    address to which notices should be sent by giving notice of such
    change to the Secretary of the Corporation in accordance with the
    requirements of this Section 12.3.

4.  [Dissolution and Merger or Disposition of
    Assets]{.underline}[]{#__RefHeading___Toc124342122 .anchor}.

    1.  [Dissolution of the
        Corporation]{.underline}[]{#__RefHeading___Toc124342123
        .anchor}. The Board of Directors may propose to dissolve the
        Corporation. The Board of Directors shall dissolve the
        Corporation only if the proposal to dissolve receives the
        approval of

> \(i\) at least two-thirds (2/3) of the Directors then in office; and
>
> \(ii\) four (4) out of five (5) Member Classes, each by a margin of at
> least two-thirds (2/3) of the total voting power held by the Member
> Class (provided that the vote of Members must also comply with the
> requirements of RCW 24.03.220).

### {*Section 12.4.1 continued . . .*}

The vote by each Member Class shall be tabulated separately. In
addition, with respect to Member Classes that include Member
Sub-Classes, the proportion of voting power cast in each Member
Sub-Class shall be tabulated separately, then aggregated with tabulation
of other Member Sub-Class votes within the Member Class to determine the
proportion of voting power within the Member Class as a whole that has
voted in favor of or against the proposal or resolution. An example of
how Member Class and Member Sub-Class voting power is to be calculated
is set forth in Attachment C. Notwithstanding Section 5.10.2, the
proposed vote must be included on the proposed agenda for the meeting of
Members in order for a vote to be taken on a proposed dissolution.

2.  [Distribution of Assets upon
    Dissolution]{.underline}[]{#__RefHeading___Toc124342124 .anchor}.
    Upon the dissolution or winding up of the Corporation, the Board of
    Directors shall, after paying, satisfying, discharging, or making
    adequate provision for payment of all of the liabilities and
    obligations of the Corporation, and subject to satisfaction of all
    applicable requirements of RCW 24.03.225 relating to dissolution,
    distribute all the remaining assets of the Corporation in accordance
    with the Articles of Incorporation.

12.4.3 [Merger or Other Disposition of
Assets]{.underline}[]{#__RefHeading___Toc124342125 .anchor}. A merger of
the Corporation pursuant to RCW 24.03.195, or a sale, lease, exchange,
or other disposition of all or substantially all of the assets of the
Corporation other than in the ordinary course of business pursuant to
RCW 24.03.215, shall require the same vote as set forth in
Section 12.4.1. Notwithstanding Section 5.10.2, the proposed vote must
be included on the proposed agenda for the meeting of Members in order
for a vote to be taken on a proposed merger or other disposition of
assets pursuant to RCW 24.03.195 and RCW 24.03.215.

> 12.5 [Amendment of Bylaws]{.underline}[]{#__RefHeading___Toc124342126
> .anchor}.

12.5.1 [Methods of Amending
Bylaws]{.underline}[]{#__RefHeading___Toc124342127 .anchor}. These
Bylaws may be amended only according to Sections 12.5.2 or 12.5.3.

12.5.2 [Board of Directors Proposals to Amend
Bylaws]{.underline}[]{#__RefHeading___Toc124342128 .anchor}. The Board
of Directors may amend these Bylaws only by the affirmative vote of at
least two-thirds (2/3) of the Directors then in office, together with
the affirmative vote of at least sixteen (16) votes' worth of the
Members' voting power, which includes approval of three (3) out of five
(5) Member Classes, each by a margin of at least two-thirds (2/3) of the
total voting power held by the Member Class. The vote by each Member
Class shall be tabulated separately. In addition, with respect to Member
Classes that include Member Sub-Classes, the proportion of voting power
cast in each Member Sub-Class shall be tabulated separately, then
aggregated with tabulation of other Member Sub-Class votes within the
Member Class to determine the proportion of voting power within Member
Class as a whole that has voted in favor of or against the proposal or
resolution. An example of how Member Class and Member Sub-Class voting
power is to be calculated is set forth in Attachment C. Notwithstanding
Section 5.10.2, the proposed vote must be included on the proposed
agenda in order for a vote to be taken on a proposed amendment.

12.5.3 [Member Initiatives to Amend
Bylaws]{.underline}[]{#__RefHeading___Toc124342129 .anchor}. A Member
may propose amendments of these Bylaws to the Board of Directors. If the
Board of Directors does not submit a Member's proposed amendment of
these Bylaws to the Members for vote (either by not scheduling a vote on
a proposed amendment or by voting to reject the proposed amendment), the
Board of Directors shall nevertheless cause a Member vote to occur on
the proposed amendment at the next meeting of Members if either one (1)
Member Class unanimously supports the proposed amendment or two (2)
Member Classes vote, each by a margin of at least three-fourths (3/4) of
the total voting power held by the Member Class, in favor of submitting
the proposed amendment to the Members for vote. The proposed amendment
shall be approved by the Members if four (4) out of five (5) Member
Classes vote, each by a margin of at least two-thirds (2/3) of the total
voting power held by the Member Class, in favor of the amendment. The
vote by each Member Class shall be tabulated separately. In addition,
with respect to Member Classes that include Member Sub-Classes, the
proportion of voting power cast in each Member Sub-Class shall be
tabulated separately, then aggregated with tabulation of other Member
Sub-Class votes within the Member Class to determine the proportion of
voting power within the Member Class as a whole that has voted in favor
of or against the proposal or resolution. An example of how Member Class
and Member Sub-Class voting power is to be calculated is set forth in
Attachment C. Notwithstanding Section 5.10.2, the proposed vote must be
included on the proposed agenda in order for a vote to be taken on a
proposed amendment.

# ARTICLE XIII 

**ALTERNATIVE DISPUTE RESOLUTION**[]{#__RefHeading___Toc124342130
.anchor}

1.  [Alternative Dispute
    Resolution]{.underline}[]{#__RefHeading___Toc124342131 .anchor}.
    Disagreements arising under these Bylaws shall be resolved in
    accordance with the alternative dispute resolution provisions
    described in this Article XIII; [provided]{.underline},
    [however]{.underline}, that disagreements related to Member
    qualification or Member Class assignments shall be resolved
    exclusively pursuant to the provisions set forth in Section 5.4;
    [provided]{.underline}, [further]{.underline}, that these
    alternative dispute resolution provisions shall not be used for
    disagreements between Members except as set forth in Section 5.4.

2.  [Scope of Bylaws Dispute Resolution
    Provisions]{.underline}[]{#__RefHeading___Toc124342132 .anchor}.

    1.  [General
        Applicability]{.underline}[]{#__RefHeading___Toc124342133
        .anchor}. Except as limited by law, the Bylaws Dispute
        Resolution Provisions shall apply to all disputes arising under
        these Bylaws with respect to whether there is a material,
        unremedied failure by a Person subject to the Corporation's
        Bylaws to comply with the Corporation's Bylaws.

    2.  [Persons Eligible to Initiate or Participate in Dispute
        Resolution Process]{.underline}[]{#__RefHeading___Toc124342134
        .anchor}. Only Persons subject to the Corporation's Bylaws shall
        be eligible to initiate or participate as Disputing Parties in
        any dispute resolution process under the Bylaws Dispute
        Resolution Provisions. For purposes of the Bylaws Dispute
        Resolution Provisions, Persons subject to the Corporation's
        Bylaws are

### {*Section 13.2.2 continued . . .*}

> \(i\) the Corporation;
>
> \(ii\) the Board of Directors;
>
> \(iii\) the officers, employees, and agents of the Corporation;
>
> \(iv\) Members of the Corporation; and
>
> \(v\) members of any committee, subcommittee, or other body composed
> of or elected by the Directors, officers, or Members (or a combination
> of the foregoing).

3.  [Procedures to Initiate Dispute Resolution
    Process]{.underline}[]{#__RefHeading___Toc124342135 .anchor}.

    1.  [Good-Faith Written
        Request]{.underline}[]{#__RefHeading___Toc124342136 .anchor}. No
        Person may serve a demand for arbitration under Section 13.3.2
        without first having made a good-faith, written request to all
        other Persons named as respondent Disputing Parties in the
        demand for arbitration that the matter giving rise to the
        dispute be remedied and allowing a reasonable opportunity for
        the respondent Disputing Party or Parties to implement a remedy.

    2.  [Demand for
        Arbitration]{.underline}[]{#__RefHeading___Toc124342137
        .anchor}. Provided that there has not been an adequate remedy in
        response to a good-faith written request delivered in compliance
        with Section 13.3.1, a Person eligible to become a Disputing
        Party may initiate a dispute resolution process under the Bylaws
        Dispute Resolution Provisions by serving its demand for
        arbitration on the respondent Disputing Party or Parties and the
        Arbitration Committee, which shall publish (or cause to be
        published) notice of the demand on the Grid West Website and by
        any other method the Arbitration Committee specifies.

    3.  [Statement(s) of
        Claim(s)]{.underline}[]{#__RefHeading___Toc124342138 .anchor}.
        Absent an agreement among all Disputing Parties to proceed
        otherwise, the Disputing Party that served a demand for
        arbitration under Section 13.3.2 shall, within fifteen (15) days
        after serving the demand, deliver a written statement of
        claim(s) to each other Disputing Party and the Arbitration
        Committee. The Disputing Parties may agree to delay the
        commencement of arbitration to attempt to resolve their dispute
        through good-faith negotiations or mediation or for any other
        reason. The statement of claim(s) shall set forth in reasonable
        detail

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(i) each claim;

> \(ii\) the relief sought;
>
> \(iii\) a summary of the grounds for such relief and the basis for
> each claim; and
>
> \(iv\) the identity of all Disputing Parties.

### {*Section 13.3.3 continued . . .*}

Each other (respondent) Disputing Party shall deliver its response
(including identification of any additional Person(s) necessary to
resolution of the dispute) within fifteen (15) days following receipt of
the initial statement of claim or such longer period as the Disputing
Parties agree or the Arbitration Committee may permit following an
application by a respondent Disputing Party. If any respondent Disputing
Party wishes to submit a counterclaim with its response to the initial
statement of claim, the respondent Disputing Party shall include the
counterclaim in its response. Where a respondent Disputing Party
includes a counterclaim the initiating Disputing Party may respond to
that counterclaim within fifteen (15) days following receipt of the
counterclaim. Any Disputing Party named in a statement of claim that
does not respond to the claim within the period specified in this
Section 13.3.3 shall be deemed to have denied each claim against it. The
Corporation shall publish the statements of claim, the responses, and
any counterclaims on the Grid West Website and by any other method the
Arbitration Committee specifies.

1.  [Intervention Rights]{.underline}[]{#__RefHeading___Toc124342139
    .anchor}. The terms of the Bylaws Dispute Resolution Provisions
    applicable to intervention are set forth in Section 13.8.

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1.  [Selection of Arbitrator]{.underline}[]{#__RefHeading___Toc124342140
    .anchor}.

    1.  [Selection of a Single
        Arbitrator]{.underline}[]{#__RefHeading___Toc124342141 .anchor}.
        Within ten (10) days following submission of respondent
        Disputing Parties' responses and counterclaims, the Disputing
        Parties shall select an arbitrator familiar with and
        knowledgeable about the law applicable to Corporations in the
        Corporation's state of incorporation and the nature of the
        Corporation's business and bylaws. If the Disputing Parties
        cannot agree upon an arbitrator, or do not agree on a means of
        selecting an arbitrator that differs from that set forth in this
        Section 13.4, the Disputing Parties shall take turns striking
        names from a list of ten (10) qualified individuals supplied by
        the Arbitration Committee from its standing list. The Disputing
        Parties shall choose lots to determine the order for striking
        names. The last remaining name not stricken shall be designated
        as the arbitrator. If that individual is unable or unwilling to
        serve (or, if a Disputing Party objects to the arbitrator
        serving on the basis of a disclosure under Section 13.5 within
        five (5) days of that disclosure), the individual last stricken
        from the list shall be designated and the process repeated until
        an individual is selected who is able and willing to serve. If a
        Disputing Party issuing or named in a statement of claim served
        under Section 13.3.3 does not participate in the selection of an
        arbitrator within the time period specified under this
        Section 13.4.1, the remaining Disputing Parties have the right
        to select the arbitrator without the nonparticipating Disputing
        Party.

    2.  [Option to Obtain Three-Arbitrator
        Panel]{.underline}[]{#__RefHeading___Toc124342142 .anchor}. As
        an alternative to selecting one (1) arbitrator under
        Section 13.4.1, any Disputing Party may elect to constitute a
        three- (3-) member arbitration panel, and the other Disputing
        Party or Parties shall cooperate in the selection of the panel,
        subject to the following conditions:

### {*Section 13.4.2 continued . . .*}

> \(i\) any Disputing Party or Parties so electing shall be responsible
> for five-sixths (5/6) of the costs of the arbitration (exclusive of
> each Disputing Party's individual costs and attorneys' fees),
> regardless of the outcome of the arbitration, unless the Disputing
> Parties agree to an alternate method of allocating costs. The
> remaining one-sixth (1/6) of the costs shall be allocated to the
> Disputing Party (or allocated in equal parts among the Disputing
> Parties) that did not participate in the election to use a three- (3-)
> arbitrator panel;
>
> \(ii\) each arbitrator shall be subject to the requirements of
> Section 13.5;
>
> \(iii\) unless otherwise agreed by the Disputing Parties, the three
> (3) arbitrators shall be selected in the following manner:
>
> \(a\) the Arbitration Committee shall provide to the Disputing Parties
> a list of fifteen (15) qualified individuals from its standing list,
>
> \(b\) the Disputing Parties chose lots to determine the order for
> striking names,
>
> \(c\) the Disputing Parties shall take turns striking names from the
> list, and
>
> \(d\) the three (3) remaining names not stricken shall constitute the
> arbitration panel;
>
> \(iv\) the arbitration panel shall decide all matters by majority
> vote; and
>
> \(v\) all other procedures, rights, and obligations set out in the
> Bylaws Dispute Resolution Provisions shall apply to the arbitration,
> and all references to the "arbitrator" also shall be deemed a
> reference to the three- (3-) member arbitration panel so chosen.

3.  [Arbitrator's
    Jurisdiction]{.underline}[]{#__RefHeading___Toc124342143 .anchor}.
    The arbitrator shall have the power to determine whether a dispute
    is subject to arbitration pursuant to the Bylaws Dispute Resolution
    Provisions.

4.  [Communication with Candidates to Serve as
    Arbitrator]{.underline}[]{#__RefHeading___Toc124342144 .anchor}. No
    Disputing Party and no one acting on behalf of any Disputing Party
    may communicate on any matter relating to the dispute, including
    selection of an arbitrator, with any potential arbitrator identified
    on the list provided by the Arbitration Committee, except that staff
    of the Corporation, under the direction of the Arbitration
    Committee, may communicate with potential arbitrators concerning
    arrangements for an arbitration.

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2.  [Disclosures Required of
    Arbitrators]{.underline}[]{#__RefHeading___Toc124342145 .anchor}.

    1.  [Initial Disclosure
        Obligations]{.underline}[]{#__RefHeading___Toc124342146
        .anchor}. The selected arbitrator shall be required to disclose
        to the Disputing Parties any direct financial or personal
        interest in the outcome of the arbitration. The arbitrator shall
        be required to disclose to the Disputing Parties any additional
        interests, relationships, facts, or circumstances including

> \(i\) any existing or past financial, business, or professional
> interest or employment;
>
> \(ii\) any relationship the arbitrator has with any Disputing Party or
> its counsel, or with any individual whom the arbitrator has been told
> will be a witness; and
>
> \(iii\) any family or personal relationship
>
> if they are likely to affect the arbitrator's impartiality or might
> reasonably create an appearance of bias. All arbitrators shall make a
> reasonable effort to inform themselves of any interests or
> relationships described above.

2.  [Ongoing Disclosure
    Obligations]{.underline}[]{#__RefHeading___Toc124342147 .anchor}.
    The obligation to make disclosure in accordance with Section 13.5 is
    a continuing duty. If, after initiation of an arbitration under the
    Bylaws Dispute Resolution Provisions, the arbitrator must make a
    disclosure in accordance with Section 13.5, the arbitrator shall, at
    the time of disclosure, determine whether the information disclosed
    is grounds to disqualify the arbitrator from continuing with the
    arbitration. If the arbitrator determines that he or she is
    disqualified from continuing with the arbitration, the Disputing
    Parties shall select a new arbitrator in accordance with
    Section 13.4.

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3.  [Protection from
    Liability]{.underline}[]{#__RefHeading___Toc124342148 .anchor}.
    Neither the Arbitration Committee nor any arbitrator shall be liable
    to any party for any act or omission in connection with any
    arbitration conducted under the Bylaws Dispute Resolution
    Provisions, other than acts or omissions that are criminal or
    constitute intentional wrongdoing for the purpose of subverting the
    arbitration process.

4.  [Arbitration Procedures]{.underline}[]{#__RefHeading___Toc124342149
    .anchor}.

    1.  [Timetable]{.underline}[]{#__RefHeading___Toc124342150 .anchor}.
        Promptly after the appointment of the arbitrator, the arbitrator
        shall set a date for the issuance of the arbitration decision,
        which shall be no later than six (6) months (or such later date
        upon which the Disputing Parties and the arbitrator may agree)
        from the date of the appointment of the arbitrator, with other
        dates, including the dates for an evidentiary hearing or other
        final submissions of evidence, set in light of this date. The
        Disputing Parties may, by agreement, modify any dates set by the
        arbitrator (other than the maximum time allowed for issuance of
        the arbitration decision). The arbitrator shall not change the
        date for the evidentiary hearing or other final submissions of
        evidence absent extraordinary circumstances. The arbitrator
        shall have the power to impose sanctions, including imposition
        of costs and dismissal of the proceeding, for dilatory tactics
        or undue delay in completing the arbitration proceedings.

    2.  [Procedural Rules]{.underline}[]{#__RefHeading___Toc124342151
        .anchor}. The Arbitration Committee shall adopt arbitration
        procedural rules consistent with the Bylaws Dispute Resolution
        Provisions (including the provisions set forth in
        Sections 13.7.2(i) through 13.7.2(v)). The Arbitration Committee
        may modify the arbitration procedural rules from time to time.
        In any case where there is a conflict between the arbitration
        procedural rules and the Bylaws Dispute Resolution Provisions,
        the Bylaws Dispute Resolution Provisions shall govern. The
        arbitrator shall conduct the arbitration in accordance with the
        Bylaws Dispute Resolution Provisions and the arbitration
        procedural rules, except as provided in Section 13.7.4.

> \(i\) [Discovery Procedures]{.underline}. The arbitration procedural
> rules shall include adequate provision for the discovery of relevant
> facts, including the taking of testimony under oath, production of
> documents and other things, presentation of evidence, taking of
> samples, conducting of tests, and inspection of land and tangible
> items. The nature and extent of such discovery shall take into account
>
> \(a\) the complexity of the dispute;
>
> \(b\) the extent to which facts are disputed;
>
> \(c\) the extent to which the credibility of witnesses is relevant to
> a resolution; and
>
> \(d\) the need to provide fair access to information by all Disputing
> Parties where information has been obtained under statutory right by
> one or more Disputing Parties from another Disputing Party or Parties
> outside the discovery process.
>
> The forms and methods for taking such discovery shall be as described
> in the Federal Rules of Civil Procedure, except as modified by
> agreement of the Disputing Parties.
>
> \(ii\) [Confidentiality]{.underline}. The arbitration procedural rules
> shall provide a means for protecting confidential information
> disclosed in the course of an arbitration under the Bylaws Dispute
> Resolution Provisions. Any information determined to be confidential
> in the course of an arbitration shall not be included in any published
> or publicly available summary or copy of the arbitration award.
>
> \(iii\) [Summary Disposition]{.underline}. The arbitration procedural
> rules shall provide a means for summary disposition of an arbitration
> proceeding under the Bylaws Dispute Resolution Provisions. The
> arbitrator may grant summary disposition of the proceeding, in whole
> or in part, if there is no genuine issue of fact material to the
> decision. Any uncontroverted fact established through summary
> disposition shall be deemed established for the remainder of the
> proceeding. Any grant of summary disposition under this Section
> 13.7.2(iii) is subject to appeal pursuant to Section 13.10 after the
> final award in the proceeding has been issued.

### {*Section 13.7.2 continued . . .*}

> \(iv\) [Evidentiary Hearing]{.underline}. The arbitration procedural
> rules shall provide for an evidentiary hearing with respect to matters
> not resolved through summary disposition under Section 13.7.2(iii),
> unless all Disputing Parties consent to the resolution of the matter
> on the basis of a written record. Hearing rules shall include
> provision for the cross-examination of witnesses.
>
> \(v\) [Evidence]{.underline}. The arbitration procedural rules shall
> include provisions addressing submission and admissibility of
> evidence. The arbitrator shall compile and certify a complete
> evidentiary record of the arbitration, which, upon completion, shall
> be available to any Disputing Party at that Disputing Party's request.

3.  [Communication with
    Arbitrator]{.underline}[]{#__RefHeading___Toc124342152 .anchor}.
    Except by agreement of or in the presence of all Disputing Parties,
    no Disputing Party and no one acting on behalf of any Disputing
    Party may communicate with the arbitrator concerning the arbitration
    outside of scheduled proceedings. Unless the Disputing Parties agree
    otherwise or the arbitrator so directs, any written or electronic
    communication from any Disputing Party to the arbitrator shall also
    be sent to all other Disputing Parties and to the Arbitration
    Committee.

4.  [Modification of Arbitration
    Procedures]{.underline}[]{#__RefHeading___Toc124342153 .anchor}. The
    Disputing Parties may, by agreement of all the Disputing Parties,
    modify the application of the arbitration procedural rules for
    purposes of their specific dispute. Except where the terms of the
    Bylaws Dispute Resolution Provisions specifically provide otherwise,
    the Disputing Parties may not agree to modify any of the provisions
    set forth in the Bylaws Dispute Resolution Provisions.

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5.  [Intervention Rules]{.underline}[]{#__RefHeading___Toc124342154
    .anchor}.

    1.  [Persons Eligible to
        Intervene]{.underline}[]{#__RefHeading___Toc124342155 .anchor}.
        Only Persons identified in Section 13.2.2 of the Bylaws Dispute
        Resolution Provisions are eligible to intervene in an
        arbitration governed by the Bylaws Dispute Resolution
        Provisions; provided that the Person

> (i)  was not named as a Disputing Party in the statement of claim
> initiating the arbitration as provided in Section 13.3.3 or in a
> responding counterclaim; and
>
> \(ii\) complies with the other provisions in the Bylaws Dispute
> Resolution Provisions concerning intervention and the obligations of
> Disputing Parties.

2.  [Timing for Intervention
    Application]{.underline}[]{#__RefHeading___Toc124342156 .anchor}. A
    Person eligible to intervene in an arbitration under the Bylaws
    Dispute Resolution Provisions may apply to intervene in the
    arbitration as a Disputing Party within thirty (30) days from
    publication of the statement of claim initiating the arbitration.
    The arbitrator may, at his or her discretion, permit late
    intervention for good cause shown.

3.  [Required Showings for
    Intervention]{.underline}[]{#__RefHeading___Toc124342157 .anchor}.
    The arbitrator shall permit a Person to intervene in an arbitration
    under the Bylaws Dispute Resolution Provisions if the Person
    applying to intervene (applicant) shows, to the arbitrator's
    reasonable satisfaction, that

> \(i\) the applicant is eligible to intervene under Section 13.8.1 of
> the Bylaws Dispute Resolution Provisions;
>
> \(ii\) the applicant's rights or interests will be substantially
> affected by outcome of arbitration; and
>
> \(iii\) no other Person that is currently a Disputing Party to the
> arbitrations is likely to adequately represent the applicant's
> interests.

4.  [Application and Order]{.underline}[]{#__RefHeading___Toc124342158
    .anchor}. Any applicant to intervene in an arbitration under the
    Bylaws Dispute Resolution Provisions shall serve a copy of its
    application on the arbitrator, the Disputing Parties, and the
    Arbitration Committee. The application must demonstrate that the
    applicant satisfies the criteria set forth in Section 13.8.3. Any
    Disputing Party that objects to the intervention request must file a
    written objection with the arbitrator, if an arbitrator has been
    selected, and deliver the objection upon the applicant, the other
    Disputing Parties, and the Arbitration Committee, within ten (10)
    days of service of the application. Promptly upon selection of the
    arbitrator pursuant to Section 13.4, the arbitrator will issue an
    order determining whether, based upon the criteria established by
    Section 13.8.3, any applicant that has timely filed an application
    may intervene in the arbitration.

5.  [Effect of Arbitrator Granting
    Intervention]{.underline}[]{#__RefHeading___Toc124342159 .anchor}.
    Any applicant whose request to intervene in an arbitration under the
    Bylaws Dispute Resolution Provisions is granted by the arbitrator
    becomes a Disputing Party with full rights and responsibilities in
    relation to all other Disputing Parties; [provided]{.underline},
    [however]{.underline}:

> \(i\) the applicant must
>
> \(a\) accept the arbitrator(s) selected in accordance with
> Section 13.4 of the Bylaws Dispute Resolution Provisions,
>
> \(b\) accept the record as established at the time the intervention is
> granted, including any procedural or substantive rulings or orders,
>
> \(c\) proceed in accordance with any established schedule, and
>
> \(d\) pay a share of the costs of arbitration as determined by the
> arbitrator taking into account, among other things, the stage of the
> arbitration when intervention is sought;
>
> \(ii\) the arbitrator may further condition Disputing Party status as
> necessary to ensure that the rights of other Disputing Parties are not
> unduly prejudiced and that the arbitration is not unduly delayed; and

### {*Section 13.8.5 continued . . .*}

> \(iii\) any late-intervening Person must not cause a conflict of
> interest for the arbitrator objectionable to any existing Disputing
> Party.

6.  [Award, Remedies, and
    Enforcement]{.underline}[]{#__RefHeading___Toc124342160 .anchor}.

    1.  [Award]{.underline}[]{#__RefHeading___Toc124342161 .anchor}. The
        arbitrator shall issue written reasons for the award, including
        findings of fact and conclusions of law. The arbitration award
        shall be based on

> \(i\) the evidence in the record;
>
> \(ii\) applicable law as then in effect in the Corporation's state of
> incorporation;
>
> \(iii\) the terms of the Articles of Incorporation and these Bylaws;
> and
>
> \(iv\) consideration of relevant decisions in previous arbitration
> proceedings.

The arbitrator may, but need not, treat previous decisions under this
Section 13.9.1 as determinative. The arbitrator's award shall be
published and maintained, in searchable form, on the Grid West Website
and by any other method the Arbitration Committee specifies. The
Corporation's Office of General Counsel shall maintain a copy of the
complete award and written explanation.

2.  [Remedies]{.underline}[]{#__RefHeading___Toc124342162 .anchor}.

> \(i\) [Arbitrator's Discretion]{.underline}. Subject to the
> requirements of Section 13.9.1, the arbitrator shall have discretion
> to require no change in actions, or grant an injunction or mandamus.
>
> \(ii\) [Costs]{.underline}. Except as otherwise provided in
> Sections 13.4.2, 13.7.1, and 13.8.5, the costs of the time, expenses,
> and other charges of the arbitrator shall be borne by the Disputing
> Parties, with each Disputing Party on an arbitrated issue bearing its
> pro rata share of such costs, and each Disputing Party bearing its own
> costs and fees. If the arbitrator determines that a demand for
> arbitration or response to a demand for arbitration was made in bad
> faith, the arbitrator shall have discretion to award the costs of the
> time, expenses, and other charges of the arbitrator to the prevailing
> Disputing Party.
>
> \(iii\) [Compliance]{.underline}. Unless the arbitrator's decision is
> appealed under Section 13.10, the Disputing Parties shall, upon
> receipt of the decision, immediately take whatever action is required
> to comply with the award to the extent the award does not require
> action by a governmental authority not a party to the arbitration. An
> award that is not appealed shall be deemed to have the same force and
> effect as an order entered by a court of competent jurisdiction.

### {*Section 13.9.2 continued . . .*}

> \(iv\) [Enforcement]{.underline}. Following the expiration of the time
> for appeal of an award pursuant to Section 13.10.3, any Disputing
> Party may apply to a court of competent jurisdiction in the
> Corporation's state of incorporation for entry and enforcement of
> judgment based on the award. Parties to arbitration under the Bylaws
> Dispute Resolution Provisions shall be deemed to have consented that
> judgment upon the arbitration award may be entered in a court having
> jurisdiction within the Corporation's state of incorporation.

7.  [Appeal of Award]{.underline}[]{#__RefHeading___Toc124342163
    .anchor}.

    1.  [Rehearing; Clarification;
        Appeal]{.underline}[]{#__RefHeading___Toc124342164 .anchor}. A
        Disputing Party may apply to a court of competent jurisdiction
        in the Corporation's state of incorporation to hear an appeal of
        an arbitration award where

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(i) the arbitrator's decision is contrary to applicable law;

(ii) the arbitrator was guilty of misconduct in refusing to postpone the
     hearing, upon sufficient cause shown, or in refusing to hear
     evidence pertinent and material to the controversy; or for any
     other misbehavior by which the rights of any party have been
     prejudiced;

(iii) the arbitrator exceeded the authority conferred by the Bylaws
      Dispute Resolution Provisions or as otherwise established by
      agreement of all the Disputing Parties;

(iv) the award was procured by corruption, fraud, or undue means;

(v) there was evident partiality or corruption in the arbitrator(s);

(vi) there was an evident material miscalculation of figures
     ([e.g.]{.underline}, quorum and voting) or an evident material
     mistake in the description of any person, thing, or property
     referred to in the award; or

(vii) the award is imperfect in matter of form not affecting the merits
      of the controversy.

      1.  [Appellate Record]{.underline}[]{#__RefHeading___Toc124342165
          .anchor}. The arbitration process set forth in the Bylaws
          Dispute Resolution Provisions contemplates that the court of
          competent jurisdiction should afford substantial deference to
          the factual findings of the arbitrator. No Disputing Party may
          seek to expand the record before the court of competent
          jurisdiction beyond that assembled by the arbitrator, except

### {*Section 13.10.2 continued . . .*}

> \(i\) by making reference to legal authority that did not exist at the
> time of the arbitrator's decision; or
>
> \(ii\) if the Disputing Party contends the decision was based upon or
> affected by fraud, collusion, corruption, misconduct, or
> misrepresentation.

2.  [Procedures for Appeals]{.underline}[]{#__RefHeading___Toc124342166
    .anchor}. Appeals shall, unless otherwise ordered by the court of
    competent jurisdiction in the Corporation's state of incorporation,
    conform to the procedural limitations set forth in this Section
    13.10.3.

> \(i\) [Notice]{.underline}. If a Disputing Party desires to appeal an
> award, it shall provide notice of appeal to the Corporation's Board of
> Directors, all other Disputing Parties, and the arbitrator within
> fourteen (14) days following the date of the award. The appealing
> Disputing Party must likewise provide notice to the Arbitration
> Committee, which shall publish notice of the appeal on the Grid West
> Website and by other method the Arbitration Committee specifies.
> Within ten (10) days of the filing of the notice of appeal, the
> appealing Disputing Party must file an appropriate application,
> petition, or motion with a court of competent jurisdiction in the
> Corporation's state of incorporation. The filing shall state that the
> subject matter has been the subject of an arbitration under the Bylaws
> Dispute Resolution Provisions.
>
> \(ii\) [Evidentiary Record]{.underline}. Within thirty (30) days of
> filing the notice of appeal (or such period as the court of competent
> jurisdiction in the Corporation's state of incorporation may specify)
> the appellant shall file the complete evidentiary record of the
> arbitration and a copy of the award with the court of competent
> jurisdiction. The appellant shall serve copies of a description of all
> materials included in the certified evidentiary record.
>
> \(iii\) [Stay Pending Appeal]{.underline}. Implementation of the award
> shall be deemed stayed pending an appeal unless and until, at the
> request of a Disputing Party, the court of competent jurisdiction in
> the Corporation's state of incorporation to which an appeal has been
> filed issues an order dissolving, shortening, or extending the stay.

#  

**[Number range CHAPTERCERTIFICATION]{.underline}**

The undersigned hereby certifies that the foregoing Bylaws of Grid West
were approved by a favorable vote of a majority of the members of the
Board of Directors of the Corporation on the \_\_\_\_ day of \_\_\_\_\_,
200\_.

Dated this \_\_\_\_ day of \_\_\_\_\_, 200\_.

> By: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Printed Name)

> Secretary of the Corporation

**ATTACHMENT A**

**INTERIM BOARD**

**CONDUCT RULES**

These Conduct Rules for the members of the Interim Board the Corporation
are as follows:

The Corporation expects all members of the Interim Board to conduct
business on behalf of the Corporation with integrity and high ethical
standards. All members of the Interim Board should, at all times in
their capacities as Interim Board members, (i) comply with the
Corporation's bylaws and Board policies and (ii) carry out their
fiduciary duties as directors of a nonprofit corporation under
Washington law.

**ATTACHMENT B**

**INITIAL MEMBERS**

**OF THE CORPORATION**

[\[***Drafting note:** This attachment will need to distinguish between
Members that are required to pay membership fees and Members that have
been granted waivers.*\]]{.mark}

![](media/image1.wmf){width="10.259722222222223in"
height="7.338888888888889in"}

![](media/image2.wmf){width="10.17986111111111in"
height="7.092361111111111in"}

**ATTACHMENT D**

**BOARD OF DIRECTORS**

**CONDUCT RULES**

These Conduct Rules for the members of the Board of Directors of the
Corporation are as follows:

I. [DEFINITIONS]{.underline}. For purposes of these Conduct Rules, the
following terms and definitions shall apply:

> A. "[Affiliate]{.underline}" of a "Person" (as defined below) means a
> Person that directly, or indirectly through one or more
> intermediaries, controls, is controlled by, or is under common control
> with such Person. For purposes of these Conduct Rules, in determining
> whether one Person controls another Person, without limitation, the
> direct or indirect ownership or control of or power to vote five
> percent (5%) or more of the outstanding voting securities of a
> corporation shall be deemed to constitute control of such corporation.
>
> B. "[Corporate Personnel]{.underline}" means each and all of the
> officers, employees, and substantially full-time consultants and
> contractors of the Corporation.
>
> C. "[Person]{.underline}" means an individual, corporation,
> cooperative corporation, municipal corporation, quasi-municipal
> corporation, limited liability company, mutual association,
> partnership, limited partnership, limited liability partnership,
> association, joint-stock company, trust, unincorporated organization,
> government entity or political subdivision thereof, or organization
> recognized as a legal entity by law in the United States or Canada.
>
> D. "[Related Person]{.underline}" of an individual means all of the
> following: an individual's spouse, domestic partner, parents
> (including step-parents and in-laws), children (including
> step-children and in-laws), and siblings (including step-siblings and
> in-laws).

II\. [GENERAL STATEMENT]{.underline}.

> A. The Corporation expects all Directors of the Corporation to conduct
> business on behalf of the Corporation with integrity and high ethical
> standards. These Conduct Rules and the bylaws of the Corporation set
> forth guidelines for all Directors to follow.
>
> B. In general, Directors should recognize and avoid conduct or
> activities that involve or might appear to involve a conflict of
> interest. Although it is impossible to list every circumstance that
> may suggest a possibility of a conflict of interest, some guidelines
> are as follows:
>
> 1\. Directors must not use any position with the Corporation for
> personal, private gain or benefit. In addition, Directors may not use
> nonpublic information obtained in connection with their duties or
> service to the Corporation to the detriment of the Corporation or for
> their direct or indirect personal gain or advantage or for the
> personal gain or advantage of any other Person, including, but not
> limited to, a Related Person of a Directors or Corporate Personnel.
>
> 2\. Directors should avoid any action that might result in or create
> the appearance of inappropriate preferential treatment of any
> Directors or Corporate Personnel, or any Related Person of any
> Directors or Corporate Personnel.
>
> 3\. Directors may not at any time disclose any confidential or
> commercially sensitive information or trade secrets of the Corporation
> or that the Corporation obtains from third parties, except as and to
> the extent authorized by the Corporation's bylaws and any other rules
> of the Corporation.
>
> 4\. A Director should not engage in conduct or activities that
> conflict or are inconsistent with any activity of the Corporation or
> that would cause a reasonable person to believe that the Director's
> judgment, loyalty, or objectivity might be influenced in a way that is
> adverse to the interests of the Corporation.
>
> 5\. Directors should take care to avoid adversely affecting the
> public's confidence in the integrity or the reputation of the
> Corporation. Directors should be able to justify and withstand public
> scrutiny of their conduct and activities.
>
> 6\. Directors who serve on the boards of other entities (whether
> for-profit or nonprofit) must be meticulous in observing the rules of
> separate loyalty.
>
> C. In considering the guidelines set forth in these Conduct Rules and
> the Corporation's bylaws, a Director must remember that the
> relationships of his or her business associates, family, friends, and
> other Persons may give rise to a potential conflict of interest even
> if the Director himself or herself is not involved directly. A
> potential conflict can exist when the parties in the relationship give
> or receive, or could reasonably be perceived to give or receive,
> unfair advantage or preferential treatment because of the
> relationship. No Director should have a direct or indirect interest in
> or relationship with any outside Person or organization that might
> affect (or that might reasonably be perceived by others as affecting)
> the objectivity or independence of the Director's judgment or conduct
> in carrying out his or her duties to the Corporation.
>
> D. Directors should be aware that even the appearance of a conflict of
> interest could harm the Corporation, and they should always try to
> avoid giving an appearance of impropriety. When in doubt, Directors
> should disclose the circumstances to their fellow Directors and follow
> the applicable procedures set forth in these Conduct Rules and the
> Corporation's bylaws.

III\. [GENERAL CONFLICT-OF-INTEREST REQUIREMENTS]{.underline}.

> A. Each Director must comply with all laws and regulations applicable
> to the conduct of the business of the Corporation, all policies
> established by the Board of Directors, and these Conduct Rules. Any
> Director who becomes aware of any illegal conduct on the part of any
> other Director, or any conduct that is otherwise inconsistent with the
> requirements of these Conduct Rules, must promptly report such conduct
> to the Board of Director.
>
> B. No Director may use any Corporation property or services for
> personal gain or remove or dispose of the materials, supplies, or
> equipment of the Corporation without proper authority.
>
> C. No Director or Related Person of any Director may accept any form
> of gift, gratuity, or entertainment that would tend to affect or give
> the appearance of affecting his or her judgment in the performance of
> his or her duties; [provided]{.underline}, [however]{.underline}, that
> a Director may accept (i) items such as food, refreshments, and
> entertainment in the course of a meal, theater event, sports event, or
> social event and (ii) noncash gifts of a nominal value such as pens,
> pencils, notepads, calendars, and other noncash gifts received for a
> special occasion, in each case of a value not exceeding \$250 (U.S.)
> per source per year.
>
> D. No Director may solicit or attempt to solicit for employment any
> individual who is then an employee of the Corporation; induce or
> attempt to induce any such employee to terminate his or her employment
> with the Corporation; take any other action that might reasonably
> interfere with or damage the Corporation's business opportunities or
> business relationships with its employees, lenders, creditors,
> customers, or other Persons with which the Corporation conducts
> business; or otherwise violate the Director's duty of loyalty to the
> Corporation.
>
> E. Except as may be allowed by a recognized legal privilege or
> appropriate assertion of confidentiality, no Director may withhold
> information from or give false or misleading information to anyone
> conducting duly authorized investigations or audits of the
> Corporation.

IV\. [IMPLEMENTATION]{.underline}.

> A. Individuals with certain relationships are prohibited from serving
> on the Board of Directors. [See]{.underline} Section 7.10 of the
> Corporation's bylaws. If any Director, or any Related Person of a
> Director, has a direct or indirect beneficial or other interest in, or
> relationship with, any Person (or any Affiliate of any Person) with
> which the Corporation transacts (or proposes to transact) business,
> the Director must fully disclose to the Board of Directors the
> existence and nature of such interest or relationship and all
> applicable facts known to the Director that an ordinarily prudent
> person would reasonably believe to be material to a judgment about
> whether to proceed with the transaction. If the transaction is
> sufficiently material to require action by the Board of Directors or
> one of its committees, any Director having a direct or indirect
> interest or relationship must refrain from voting on the matter, and
> all applicable action shall be undertaken in accordance with the
> Corporation's bylaws and applicable state law governing "interested"
> or "self‑dealing" transactions involving nonprofit corporations.
>
> B. Directors must comply with applicable law. The Board of Directors
> will maintain reasonable means for assessing and monitoring all
> Directors to ensure such compliance. Directors may consult counsel for
> the Corporation if they have any questions regarding applicable law or
> these Conduct Rules. Any Director who received a written opinion from
> counsel for the Corporation is entitled to rely on that opinion.
>
> C. The Corporation will distribute a copy of these Conduct Rules to
> each of the Corporation's Directors upon his or her election to the
> Board of Directors and not less often than once a year thereafter. All
> Directors must complete an annual disclosure questionnaire regarding
> compliance with the Corporation's bylaws and the provisions of these
> Conduct Rules.
>
> D. The Board of Directors may, by approval of two-thirds of its
> members, remove from the Board of Directors any Director who fails to
> comply with any applicable law or fails to comply with any provision
> of these Conduct Rules.

**ATTACHMENT E**

**OFFICER AND EMPLOYEE**

**CONDUCT RULES**

These conduct rules apply to all officers, employees, and substantially
full-time consultants and contractors of the Corporation or other
individuals performing discretionary functions for or on behalf of the
Corporation (including the spouse, domestic partner, or any legal
dependent of such individual):

1\. [Prohibited Individuals]{.underline}. Except as set forth in Section
2, no individual may serve as an officer, employee, substantially
full-time consultant or contractor of the Corporation and no individuals
may perform discretionary functions for or on behalf of the Corporation,
if such individual (or the spouse, the domestic partner, or any legal
dependent of such individual)

> \(i\) has a direct or indirect financial interest in (including the
> ownership of securities of) a Market Participant, Member or supplier
> of the Corporation (or any Affiliate of any of such Persons);
> [provided]{.underline}, [however]{.underline}, that such individual
> (or the spouse, the domestic partner, or any legal dependent of such
> individual) will be permitted to own securities of a Market
> Participant, Member or supplier of the Corporation (or any Affiliate
> of any such Persons) through diversified mutual funds (other than
> those funds concentrating their investments in the electric power
> industry or the electric utility industry or any segments thereof); or
>
> \(ii\) has a Related Person that is an officer, chief executive or
> general manager, director or trustee or member of a governing board or
> council, or occupies a position of similar capacity of a Market
> Participant, Member or supplier of the Corporation (or any Affiliate
> of any such Person).

2\. [Exceptions Concerning Prohibited Individuals]{.underline}. An
individual shall not be deemed to be in violation of the restrictions
set forth in Section 1 and shall not be prohibited from serving as an
officer, employee, substantially full-time consultant or contractor of
the Corporation and no individuals shall be prohibited from performing
discretionary functions for or on behalf of the Corporation merely
because such individual (or the spouse, the domestic partner, or any
legal dependent of such individual)

> \(i\) is a residential retail consumer of electric energy; or
>
> \(ii\) continues his or her pre-existing participation in a qualified
> defined benefits or defined contribution pension plan, a nonqualified
> deferred compensation or pension plan, or health benefits plan of a
> Market Participant, Member or supplier of the Corporation (or any
> Affiliate of any of such Persons) for purposes of receiving pension
> benefits and post-employment health benefits or remaining eligible to
> receive such benefits at a future time, so long as the benefits to
> such individual under any such pension plan do not vary with the
> economic performance of such Market Participant, Member or supplier of
> the Corporation (or any Affiliate of any of such Persons) (other than
> the potential variance due to risk of bankruptcy) or the value of any
> securities of any such Market Participant, Member or supplier of the
> Corporation (or any Affiliate of any of such Persons) held by such
> plan.

\(3\) [Changes to the Policy]{.underline}. This policy may be
prospectively rescinded or modified at any time by the Board of
Directors of the Corporation.