Exhibit 10.07

[pinnlogo.gif]
LAW DEPARTMENT

MICHAEL G. GREEN
ASSOCIATE GENERAL COUNSEL*
(602) 250·3513 Direct Line

TO:    Palo Verde Participant Members

FROM:    Michael G. Green

DATE:    December 3, 2010

RE:    Amendment Number 15 to the Arizona Nuclear Power Project Participation
Agreement
 
 
 
 
 

Dear Members,

Enclosed is a copy of the fully executed Amendment Number 15 for your records,
along with a Notary Public Copy Certification attesting that the enclosed is a
true, exact, complete and unaltered color copy of the original Agreement.

If you have any further questions, please contact me.

MGG:bjd
Enclosure

APS - APS Energy Services - SunCor - El Dorado

400 NORTH FIFTH STREET - P.O. BOX 53999 - MAIL STATION 8695 - PHOENIX, ARIZONA
85072-3999
Phone: (602) 250-3630 - Fax: (602) 250-3393 - E-Mail:
Michael.Green@pinnaclewest.com

*Admitted to practice law in the State of California and District of Columbia
only

--------------------------------------------------------------------------------

COPY CERTIFICATION

State of Arizona        )
)
County of Maricopa         )

I, Barbara J. Dubishar, a Notary Public, do certify that, on the 3rd day of
December, 2010, I personally photocopied AMENDMENT NUMBER 15 TO THE ARIZONA
NUCLEAR POWER PROJECT PARTICIPATION AGREEMENT (pages numbered 1-13, and
additionally two unnumbered notary acknowledgment pages for a total of 15
pages), and it is a true, exact, complete and unaltered copy and each
participant member's copy has been individually addressed and deposited in the
U.S. Mail this date.

        
    
                        
/s/ Barbara J. Dubishar
BARBARA J. DUBISHAR
NOTARY PUBLIC

My Commission Expires:

[Notarial Stamp]

--------------------------------------------------------------------------------

AMENDMENT NUMBER 15
TO THE ARIZONA NUCLEAR POWER PROJECT
PARTICIPATION AGREEMENT

1. PARTIES:

The Parties to this Amendment Number 15 to the Arizona Nuclear Power Project
Participation Agreement, hereinafter referred to as "Amendment Number 15," are:
ARIZONA PUBLIC SERVICE COMPANY, a corporation organized and existing under and
by virtue of the laws of the State of Arizona, hereinafter referred to as
"Arizona"; SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an
agricultural improvement district organized and existing under and by virtue of
the laws of the State of Arizona, hereinafter referred to as "Salt River
Project"; SOUTHERN CALIFORNIA EDISON COMPANY, a corporation organized. and
existing under and by virtue of the laws of the State of California, hereinafter
referred to as "Edison"; PUBLIC SERVICE COMPANY OF NEW MEXICO, a corporation
organized and existing under and by virtue of the laws of the State of New
Mexico, hereinafter referred to as "PNM"; EL PASO ELECTRIC COMPANY, a
corporation organized and existing under and by virtue of the laws of the State
of Texas, hereinafter referred to as "El Paso"; SOUTHERN CALIFORNIA PUBLIC POWER
AUTHORITY, a joint powers agency organized and existing under and by virtue of
the laws of the State of California, doing business in the State of Arizona as
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ASSOCIATION, hereinafter referred to
as "SCPPA"; and DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES, a
municipal corporation organized and existing under and by virtue of the laws of
the State of California, hereinafter referred to as "LADWP;" all hereinafter
individually referred to as "Party" and collectively as "Parties."

2.    RECITALS:

2.1. Arizona, Salt River Project, Edison, PNM, El Paso, SCPPA and LADWP are
parties to a certain agreement entitled Arizona Nuclear Power Project
Participation Agreement, dated as of August 23, 1973, as amended by: Amendment
Number 1, dated as of January 1, 1974; Amendment Number 2, dated as of August
28, 1975; Amendment Number 3, dated as of July 22, 1976; Amendment Number 4,
dated as of December 15, 1977; Amendment Number 5, dated as of December 5, 1979;
Amendment Number 6, effective as of October 16, 1981; Amendment Number 7,
effective as of April 1, 1982; Amendment Number 8, executed as of September 12.
1983; Amendment Number 9, executed as of June 12, 1984; Amendment Number 10,
executed as of November 21, 1985; Amendment Number 11, effective January 10,
1987; Amendment Number 12, effective August 5, 1988; Amendment Number 13,
effective June 15, 1991; and, Amendment Number 14, effective June 20, 2000,
retroactive to January 1, 1993, hereinafter, as so amended, referred to as the
"Participation Agreement."

2.2. Pursuant to and in accordance Section E.11 of Appendix E to the
Participation Agreement, El Paso and PNM filed protests regarding the allocation
of certain overhead expenses of Arizona, and its corporate parent Pinnacle West
Capital Corporation, to the Arizona Nuclear Power Project Participants, as
specified in the Participation Agreement, Appendix E, (the "Protests").

1

--------------------------------------------------------------------------------

2.3. After analysis and consideration of the Protests by the appropriate Palo
Verde Participant committees, the Participants were not able to resolve the
Protests to the satisfaction of all of the Participants.

2.4.
Prior to the call for submission of the Protests to arbitration as specified in
Sections 24 and E.11.2 of the Participation Agreement, the Participants referred
the Protests to higher authority within each of the respective Participants'
organizations in accordance with Section 6.10 of the Participation Agreement.

2.5.
In December 2009 and January 2010, the Participants' higher authority (i.e. the
Chief Executive Officers, or the positional equivalent) met and conferred in an
attempt to resolve the Protests. Following these meetings, PNM agreed to
withdraw its protest, and Arizona proposed modifications to certain provisions
of the Participation Agreement, Appendix E, to resolve El Paso's protest; El
Paso agreed to Arizona's proposed settlement, and agreed to withdraw its protest
provided that all Participants execute this Amendment No. 15.

3. AGREEMENT:

For and in consideration of the premises and the mutual obligations of and
undertakings by the Parties as hereinafter provided in this Amendment Number 15
to the Participation Agreement, the Parties agree as follows.

4. EFFECTIVE DATE:

This Amendment Number 15 shall become effective forty-five (45) days after the
date that the Party which last in time executes this Amendment Number 15. The
amended procedures for allocating costs that are associated with this Amendment
Number 15 shall be applied retroactively to January 1, 2010.

5. DEFINED TERMS:

5.1. The Capitalized and italicized words and phrases used in this Amendment
Number 15 shall have meanings ascribed to them in the Participation Agreement as
amended by this Amendment Number 15.

5.2.     All references to a "Section" or "Sections" in this Amendment Number 15
shall mean a Section or Sections of the Participation Agreement unless the text
expressly states otherwise.

6. AMENDMENTS TO THE ARIZONA NUCLEAR POWER PROJECT MADE BY THIS AMENDMENT NUMBER
15:

6.1.        Delete Section E.1.9.

6.2.        Delete Section E.2.3.

2

--------------------------------------------------------------------------------

6.3.
Amend Section E.3.1.4, by deleting the strikethrough text and substituting
therefor the underlined text:

A portion of the expenses incurred by the Operating Agent's System Electric
Operations Department, such portion to be determined by multiplying the total of
such expenses by a ratio, the numerator of which is the total payroll for ANPP
and the denominator of which is the total payroll supervised by the Executive
Vice President, Engineering and Operations the annual total net megawatt-hour
generation of the ANPP (known and referred to as the Palo Verde Nuclear
Generating Station), and the denominator of which is the annual total net
megawatt-hour generation of all Arizona-operated electric generating facilities
plus Arizona megawatt-hour power purchases plus Arizona megawatt-hour
transmission of power for others. Such expenses shall include, but not be
limited to, the following:

6.4
Amend Section E.6.1, by deleting the strikethrough text:

The Operation and Maintenance A & G Ratio shall be the percentage computed by
dividing (i) the sum of (a) the total amounts charged to FPC Accounts 920 and
921 multiplied by the O & M Ratio computed in accordance with Section E.8
hereof, (b) the total amounts charged to FPC Accounts 923 (except any amounts
directly chargeable to ANPP) and 935 (formerly 932), (c) the product of the
portion of labor charges included within (a) and (b) above multiplied by the
Payroll Tax Ratio computed in accordance with Section E.4 hereof (d) the product
of the labor charges included within (a) and (b) above multiplied by the
Benefits Ratio computed in accordance with Section E.5 hereof, and (e) the
product of the labor charges included within (a) and (b) above multiplied by the
Compensation Insurance Ratio computed in accordance with Section E.7 hereof,
less (f) the one percent (1%) portion of the administrative and general expenses
charged to FPC Accounts 920 and 921 allocable to contract operations and
maintenance by (ii) the direct labor (i.e. total labor less labor charge to
clearing accounts) chargeable to operation and maintenance accounts (exclusive
of A & G), to include O & M labor billed to Participants and the labor portion
of Start-Up and Pre-Operation Costs subject to the Operation and Maintenance A &
G Ratio pursuant to Section L.1.3, and to exclude the labor portion of Start-Up
and Pre-Operation Costs subject to the construction administrative and general
expense percentage of one percent (l%) pursuant to Section L.1.3.

6.5. Amend Section E.6.2, by deleting the strikethrough text and substituting
therefor the underlined text:

The following example sets forth the method to be employed by the Operating
Agent to determine the Operation and Maintenance A & G Ratio:

EXAMPLE COMPUTATION OF OPERATIONS
AND MAINTENANCE A & G RATIO
(Based on the Operating Agent's 1984 Experience)
        
Labor
 
Total
Administrative and General Salaries
 
 

3

--------------------------------------------------------------------------------

charged to FPC Account 920
$17,408,542
$17,406,779
Office Supplies and Expenses
 
 
charged to FPC Account 921
 
7,208,084

[Line 7] Total
$17,408,542
$24,614,863
Total FPC Accounts 920 and 921,
 
 
multiplied by O & M Ratio @ 68.48%
$11,921,544
$16,856,504
FPC Account 923
 
919,166

FPC Account 932 (presently 935)
1,555,913

3,127,002

[Line 11] Subtotal
$13,477,457
$20,902,672
Payroll Taxes @ 7.126%
 
960,404

Pensions and Benefits @ 13.512%
 
1,821,074

Compensation Insurance @ 0.451 %
 
60,783

Less that 1% portion of A & G allocable
 
 
to Contract Operation and Maintenance
 
1,483,314
Total administrative and general expenses
 
 
allocable to operations and maintenance
$22,261,619
$23,744,933
 
 
 
Labor Base
 
 
 
 
 
Direct labor charged to system operations and
 
 
maintenance, as further defined in Section E.6.1
 
$148,557,953
Less direct labor charged to administrative and
 
 
general expenses (FPC Accounts 920-931 and 935)
 
13,160,635

Labor Base
 
$135,397,318
 
 
 
 
 
 
Operation and Maintenance
 
 
A & G Ratio for 1984 $22,261,619 ÷ $135,397,318=16.442%
 
 
Operation and Maintenance
 
 
A & G Ratio for 1984 $23,744,933 ÷ $135,397,318 = 17.537%
 
 
Note: All labor figures include loading for allowed time.
 
 

6.6. Amend Section E.9.1, by deleting the strikethrough text:

4

--------------------------------------------------------------------------------

The Capital A & G Ratio shall be the percentage computed by dividing (i) the
amounts equal to (A) the sum of (a) the total amounts charged to FPC Accounts
920 and 921 multiplied by the Construction Ratio computed in accordance with
Section E.8 hereof, and (b) the product of the portion of labor charges included
in (a) above multiplied by the sum of the Payroll Tax Ratio, the Benefits Ratio
and the Compensation Insurance Ratio less (B) the one percent (l %) portion of
administrative and general expenses charged to FPC Accounts 920 and 921
allocable to contract construction (including the administrative and general
expenses (i) recovered on Start Up and Pre Operation Costs subject to the
construction administrative and general expense percentage of one percent (1%)
pursuant to Section L.1.3, (ii) recovered on ANPP construction expenses, and
(iii) allocable to other contract construction by (ii) the direct labor in
construction accounts (exclusive of A & G), to include construction labor billed
to Participants, excluding the labor portion of Start-Up and Pre-Operation Costs
subject to the Operation and Maintenance A & G Ratio pursuant to Section L.1.3,
less the labor portion of construction expenses to which the one percent (1%)
portion of administrative and general expenses is applicable, and less the labor
portion of Start-Up and Pre-Operation Costs subject to the construction
administrative and general expense percentage of one percent (l %) pursuant to
Section L.l.3.

6.7. Amend Section E.9.2, by deleting the strikethrough text and substituting
therefor the underlined text:

The following example sets forth the method to be employed by the Operating
Agent to determine the Capital A & G Ratio:
EXAMPLE COMPUTATION OF CAPITAL A & G RATIO
(Based on the Operating Agent's 1984 Experience)
Labor
 
Total

Administrative and General Salaries
 
 
charged to FPC Account 920
$17,408,542
$17,406,779
Office Supplies and Expenses
 
 
Charged to FPC Account 921
 
7,208,084

[Line 7] Total
$17,408,542
$24,614,863
 
 
 
Total FPC Accounts 920 and 921, multiplied
 
 
[Line 9] by Construction ratio
 
 
@ 28.355%
$4,936,192
$6,979,544
Payroll Taxes @ 7.126%
 
351,753

Pensions and Benefits @ 13.512%
 
666,978

Compensation Insurance @ 0.451%
 
22,262

Less that 1% portion of A&G allocable
 
 

5

--------------------------------------------------------------------------------

to Contract Construction, as further
 
 
defined in Section E.9.1
3,634,919

Total A&G Expense allocable
 
 
to Construction
$4,386,618
8,020,537

Construction Direct Labor
 
56,061,726

Less the labor portion of Construction Work,
 
 
Start-Up and Pre-Operational Costs subject
 
 
to the construction administrative and
 
 
general expense percentage of one percent (1%)
 
13,496,824

Total Construction Direct Labor Base
 
$42,564,902
 
 
 
Capital A&G Ratio for 1984 $4,385,618 ÷ $42,564,902 = 10.303%
 
 
Capital A&G Ratio for 1984 $8,020,537 ÷ $42,564,902 = 18.834%
 
 
 
 
 
Note: All labor figures include loading for allowed time.
 
 

7.
EXECUTION BY COUNTERPARTS:

This Amendment Number 15 may be executed in any number of counterparts, and upon
execution by all Participants, each executed counterpart shall have the same
force and effect as an original instrument and as if all Participants had signed
the same instrument. Any signature page of this Amendment Number 15 may be
detached from any counterpart of the Amendment Number 15 without impairing the
legal effect of any signature thereon, and may be attached to another
counterpart of this Amendment Number 15 identical in form hereto but having
attached to it one or more signature pages.

[Remainder of page intentionally left blank. This page is followed by seven
consecutive execution pages.]

6

--------------------------------------------------------------------------------

8. SIGNATURE CLAUSE:

Each of the signatories below represents that he/she is appropriately authorized
to enter into this Amendment Number 15 on behalf of the Party for which he/she
signs.

ARIZONA PUBLIC SERVICE COMPANY

By:    /s/Donald Robinson     

Its:    President & COO     

Date:    11/29/10     

STATE OF ARIZONA    )
) ss.
County of Maricopa        )

On this 29 day of November, 2010, before me, the undersigned Notary Public,
personally appeared DONALD ROBINSON who acknowledged him/herself to be the
President & COO of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation, and
that he/she as such officer, being authorized to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the company
by him/herself as such President & COO.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

[Notarial Stamp]
/s/KAREN McLOUGHLIN     
Notary Public

My Commission Expires:

10/15/2014    

7

--------------------------------------------------------------------------------

8.    SIGNATURE CLAUSE:

Each of the signatories below represents that he/she is appropriately authorized
to enter into this Amendment Number 15 on behalf of the Party for which he/she
signs.

Reviewed by SRP Legal Services Dept.
 
SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT
/s/ Ken Lee
 
By: /s/John R. Hoopes
(Signed Name)
 
 
Ken Lee
 
Its: SRP Vice President
(Printed Name)
 
 
Date:
        6/14/10
 
Date:             6/14/2010
 
 
 
 

ATTEST AND COUNTERSIGN:

By: /s/ Terrill A. Lonon

Its: Corporate Secretary     

Date: 6/14/10         

STATE OF ARIZONA    )
) ss.
County of Maricopa        )

On this 14th day of June , 2010, before me, the undersigned Notary Public,
personally appeared JOHN R. HOOPES who acknowledged him/herself to be the SRP
Vice President of SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER
DISTRICT, an Arizona corporation, and that he/she as such officer, being
authorized to do, executed the foregoing instrument for the purposes therein
contained by signing the name of the company by him/herself as such SRP VICE
President .

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

    
/s/Stephanie K. Reed     
Notary Public
                                            
My Commission Expires:
                        
Aug 5, 2011                         [Notarial Stamp]

8

--------------------------------------------------------------------------------

8. SIGNATURE CLAUSE:

Each of the signatories below represents that he/she is appropriately authorized
to enter into this Amendment Number 15 on behalf of the Party for which he/she
signs.

SOUTHERN CALIFORNIA EDISION COMPANY

By:     /s/ Alan J. Fohrer          

Its:    Chairman & Chief Executive Officer        
        
Date:    September 2, 2010          

STATE OF CALIFORNIA        )
) ss.
County of Los Angeles        )

On this ____ day of ________, 2010, before me, the undersigned Notary Public,
personally appeared _______________ who acknowledged him/herself to be the
_______________ of SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation,
and that he/she as such officer, being authorized to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the company
by him/herself as such _______________.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My Commission Expires:

                                          

9

--------------------------------------------------------------------------------

[a102412pvamendno15page1.jpg]

--------------------------------------------------------------------------------

8. SIGNATURE CLAUSE:

Each of the signatories below represents that he/she is appropriately authorized
to enter into this Amendment Number 15 on behalf of the Party for which he/she
signs.

PUBLIC SERVICE COMPANY OF
NEW MEXICO

By: /s/PATRICK THEMIG              

Its:    VP Generation              

Date:    10/4/10              

STATE OF NEW MEXICO    )
) ss.
County of Bernalillo        )

On this 4th day of October, 2010, before me, the undersigned Notary Public,
personally appeared PATRICK THEMIG who acknowledged him/herself to be the VP
Generation of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation,
and that he/she as such officer, being authorized to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the company
by him/herself as such VP Generation.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

/s/ G. Marcella Kercher
Notary Public

My Commission Expires:
                                    
12-17-2011

10

--------------------------------------------------------------------------------

8. SIGNATURE CLAUSE:

Each of the signatories below represents that he/she is appropriately authorized
to enter into this Amendment Number 15 on behalf of the Party for which he/she
signs.

EL PASO ELECTRIC COMPANY

By: /s/DAVID W. STEVENS              

Its:    C. E. O.              

Date:    September 10, 2010              

STATE OF TEXAS        )
) ss.
County of El Paso        )

On this 10 day of September, 2010, before me, the undersigned Notary Public,
personally appeared DAVID W. STEVENS who acknowledged him/herself to be the C.
E. O. of EL PASO ELECTRIC COMPANY, a Texas corporation, and that he/she as such
officer, being authorized to do, executed the foregoing instrument for the
purposes therein contained by signing the name of the company by him/herself as
such David W. Stevens.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

/s/Valerie J. Pugh
Notary Public

My Commission Expires:
[Notarial Stamp]
12-9-2012
                        

11

--------------------------------------------------------------------------------

8. SIGNATURE CLAUSE:

Each of the signatories below represents that he/she is appropriately authorized
to enter into this Amendment Number 15 on behalf of the Party for which he/she
signs.

SOUTHERN CALIFORNIA PUBLIC
POWER AUTHORITY, doing business in the State of Arizona as SOUTHERN
CALIFORNIA PUBLIC POWER
AUTHORITY ASSOCIATION

By: /s/Bill D. Carnahan              

Its:    Executive Director              

Date: 9/28/10              

[stampa02.gif]
        

12

--------------------------------------------------------------------------------

[a102412pvamendno15page2.jpg]

--------------------------------------------------------------------------------

8. SIGNATURE CLAUSE:

Each of the signatories below represents that he/she is appropriately authorized
to enter into this Amendment Number 15 on behalf of the Party for which he/she
signs.

DEPARTMENT OF WATER AND
POWER OF THE CITY OF LOS
ANGELES

By: /s/ARAM BENYAMIN

Its:    SR. Asst. General Mgr.     

Date:    06/02/10                     

STATE OF CALIFORNIA    )
) ss.
County of Los Angeles    )

On this 2nd day of June, 2010, before me, the undersigned Notary Public,
personally appeared ARAM BENYAMIN who acknowledged him/herself to be the SR.
Asst. Gen. Mgr. of DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES, a
California joint powers agency, and that he/she as such officer, being
authorized to do, executed the foregoing instrument for the purposes therein
contained by signing the name of the company by him/herself as such
__________________________.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                        
    
/s/Chere D. Lott
Notary Public

My Commission Expires:
                                    
9-21-2012
                    

[Notarial Stamp]

13