EXHIBIT 10.04-02

 

FOUR CORNERS PROJECT

 

OPERATING AGREEMENT

 

AMENDMENT NO. 12

 

AMONG

 

ARIZONA PUBLIC SERVICE COMPANY

 

EL PASO ELECTRIC COMPANY

 

PUBLIC SERVICE COMPANY OF NEW MEXICO

 

SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT

 

SOUTHERN CALIFORNIA EDISON COMPANY

 

TUCSON ELECTRIC POWER COMPANY

 

Executed Original

 

February 3, 2000

 

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FOUR CORNERS PROJECT

 

OPERATING AGREEMENT

 

AMENDMENT NO. 12

 

1   PARTIES:

 

The parties to this Amendment No. 12 to the Four Corners Project Operating
Agreement are: ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation
(hereinafter referred to as “Arizona”); EL PASO ELECTRIC COMPANY, a Texas
corporation (hereinafter referred to as “El Paso”); PUBLIC SERVICE COMPANY OF
NEW MEXICO, a New Mexico corporation (hereinafter referred to as “New Mexico”);
SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an agricultural
improvement district, organized and existing under the laws of the State of
Arizona (hereinafter referred to as “Salt River Project”); SOUTHERN CALIFORNIA
EDISON COMPANY, a California corporation (hereinafter referred to as “Edison”);
and TUCSON ELECTRIC POWER COMPANY, an Arizona corporation, formerly known as
Tucson Gas & Electric Company (hereinafter referred to as “Tucson”),
(collectively hereinafter referred to as the “Participants”).

 

2   RECITALS:

 

This Amendment No. 12 is made with reference to the following facts, among
others:

 

  2.1   As of May 15, 1969, the Participants entered into the Four Corners
Project Operating Agreement, which has since been amended by Amendment Nos. 1
through 10 (as so amended hereinafter referred to as the “Operating Agreement”).

 

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  2.2   The Participants wish to amend the Operating Agreement in order to:

 

  2.2.1   Revise Sections 5.56, 7.3, 8.1 and 8.3, and 9.1 and 9.3 to allow
Participants to vote only on actions involving that portion of the Four Corners
Project in which such Participants have an ownership interest; and

 

  2.2.2   Revise Section 27 to permit the Coordination Committee to appoint a
switchyard operating agent to assume the duties of the Operating Agent with
respect to the Switchyard Facilities.

 

3   AGREEMENT:

 

In consideration of the mutual benefits to be derived from this Amendment No.
12, the Participants agree as follows:

 

4   EFFECTIVE DATE:

 

This Amendment No. 12 shall be effective upon the date when executed by all of
the Participants.

 

5   DEFINITIONS

 

Section 5.56 of the Operating Agreement is amended to read as follows:

 

  5.56   PARTICIPANT(S)

 

One or more entities, including Arizona, El Paso, New Mexico, Salt River
Project, Edison and Tucson, with an ownership interest in the Four Corners
Project. Except with respect to any rights, benefits, duties, or obligations
expressly provided for in any Project Agreement, a Participant’s rights,
benefits, duties, and obligations under this Agreement are expressly limited to
those rights, benefits,

 

 

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duties, and obligations involving that portion of the Four Corners Project in
which the Participant has an ownership interest.

 

6   COORDINATION COMMITTEE:

 

Section 7.3 of the Operating Agreement is amended to read as follows:

 

  7.3   The Coordination Committee shall have no authority to modify any
provisions of the Project Agreements. Any action or determination of the
Coordination Committee shall require an affirmative vote of all Participants,
acting through their respective representatives, having an ownership interest in
that portion of the Four Corners Project that is the subject matter of the
action or determination. Only those Participants having an ownership interest in
the portion of the Four Corners Project that is the subject matter of an action
or determination may participate in the discussions relating to such action or
determination; provided, however, that this restriction shall apply only when
required by a regulatory authority with jurisdiction over the Participant(s), an
applicable code of conduct, or a Participant’s reasonable competitive concerns.

 

7   ENGINEERING AND OPERATING COMMITTEE:

 

Sections 8.1 and 8.3 of the Operating Agreement are amended to read as follows:

 

  8.1   The Engineering and Operating Committee, established in accordance with
Section 21.2 of the Construction Agreement, shall be and remain in existence
during the term of this Operating Agreement; provided, however, that any action
or determination of the Engineering and Operating Committee shall require an
affirmative vote of all Participants, acting through their respective
representatives,

 

 

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that have an ownership interest in that portion of the Four Corners Project that
is the subject matter of the action or determination. Only those Participants
having an ownership interest in that portion of the Four Corners Project that is
the subject matter of an action or determination may participate in the
discussions relating to such action or determination; provided, however, that
this restriction shall apply only when required by a regulatory authority with
jurisdiction over the Participant(s), an applicable code of conduct, or a
Participant’s reasonable competitive concerns.

 

  8.3   The Engineering and Operating Committee shall have no authority to
modify any of the provisions of this Operating Agreement.

 

8   AUDITING COMMITTEE

 

Sections 9.1 and 9.3 of the Operating Agreement are amended to read as follows:

 

  9.1   The Auditing Committee, established in accordance with Section 21.7 of
the Construction Agreement, shall be and remain in existence during the term of
this Operating Agreement; provided, however, that any action or determination of
the Auditing Committee shall require an affirmative vote of all Participants,
acting through their respective representatives, that have an ownership interest
in that portion of the Four Corners Project that is the subject matter of the
action or determination. Only those Participants having an ownership interest in
that portion of the Four Corners Project that is the subject matter of an action
or determination may participate in the discussions relating to such action or
determination; provided, however, that this restriction shall apply only when
required by a

 

 

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regulatory authority with jurisdiction over the Participant(s), an applicable
code of conduct, or a Participant’s reasonable competitive concerns.

 

9.3 The Auditing Committee shall have no authority to modify any of the
provisions of this Operating Agreement.

 

9   REMOVAL OF OPERATING AGENT:

 

Section 27.3 of the Operating Agreement shall be renumbered Section 27.4 and a
new Section 27.3 is inserted to read as follows:

 

If the Coordination Committee determines that Units 4 and 5, the Common
Facilities, and Related Facilities should be operated separately from the
Switchyard Facilities, the Coordination Committee may appoint a switchyard
operating agent to maintain and operate the Switchyard Facilities, in which
event the Coordination Committee shall determine which of the duties and
responsibilities of the Operating Agent described in Section 6, pertaining to
the Switchyard Facilities, shall become the responsibility of the switchyard
operating agent, and the Operating Agent shall be relieved of those duties and
responsibilities. Such a division of operating and maintenance responsibilities
shall be memorialized in a Four Corners switchyard facilities operating
agreement among those Participants owning undivided interests in the Switchyard
Facilities.

 

10   EXECUTION BY COUNTERPARTS:

 

This Amendment No. 12 may be executed in any number of counterparts, and upon
execution by all Participants, the counterparts 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 No. 12 may be detached from any
counterpart of this Amendment No. 12

 

 

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without impairing the legal effect of any signature thereon, and may be attached
to another counterpart of this Amendment No. 12 identical in form hereto but
having attached to it one or more signature pages.

 

11   EFFECT OF AMENDMENTS:

 

Except as specifically amended herein, this Operating Agreement, as previously
amended, shall remain in full force and effect.

 

12   SIGNATURE CLAUSE:

 

The signatories hereto represent that they have been appropriately authorized to
enter into this Amendment No. 12 on behalf of the Participant for whom they
sign. This Amendment No. 12 is hereby executed as of this 3rd day of February,
2000.

 

ARIZONA PUBLIC SERVICE COMPANY

By

 

/s/  John Denman         

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Its

 

Vice President Fossil

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EL PASO ELECTRIC COMPANY

By

 

/s/   John C. Horne    

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Its

 

Vice President – Generation

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PUBLIC SERVICE COMPANY OF NEW MEXICO

       

By

 

/s/   Patrick Goodman        

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Its

 

Vice President Power Production

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SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT

ATTEST AND COUNTERSIGN

     

By

 

/s/   William P. Schroder

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/s/   Terrill A. Lonon

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Its

 

President

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SOUTHERN CALIFORNIA EDISON COMPANY

       

By

 

/s/   Harold B. Ray       

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Its

 

Executive Vice President

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TUCSON ELECTRIC POWER COMPANY

       

By

 

/s/    Thomas A.  Delawder    

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Its

 

Vice President, Energy Sources

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