EXHIBIT 10.01-11

AMENDMENT NO. 11 TO THE
ARIZONA NUCLEAR POWER PROJECT
PARTICIPATION AGREEMENT

APS Contract No: 4172-419.00

Pursuant to Section 4 herein, this Amendment No. 11 has been filed with the
Nuclear Regulatory Commission and became effective on the 10th day of January,
1987.

June 13. 1986

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AMENDMENT NO. 11 TO THE
ARIZONA NUCLEAR POWER PROJECT
PARTICIPATION AGREEMENT
1.
PARTIES:

The parties to this Amendment No. 11 to the Arizona Nuclear Power Project
Participation Agreement, hereinafter referred to as "Amendment No. 11", 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 a
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

-1-

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corporation organized and existing under and by virtue of the laws of the State
of California, hereinafter referred to as "LADWP".
2.
RECITALS:

2.1
Arizona, Salt River Project, Edison, PNM, El Paso and SCPPA are parties to a
certain agreement entitled Arizona Nuclear Power Project Participation
Agreement, dated as of August 23, 1973, as amended by Amendment No. 1, dated as
of January 1, 1974, Amendment No. 2, dated as of August 28, 1975, Amendment No.
3, dated as of July 22, 1976, Amendment No. 4, dated as of December 15, 1977,
Amendment No. 5. Dated as of December 5, 1979, Amendment No. 6, dated as of
September 28, 1981, Amendment No, 7, dated as of March 4, 1982, Amendment No. 8,
dated as of June 17, 1983, Amendment No. 9, dated as of June 12, 1984, and
Amendment No. 10, dated as of November 21. 1985, hereinafter referred to as
the "Participation Agreement", as so amended.

2.2
By this Amendment No. 11, the Participants desire to amend the Participation
Agreement in order to provide for the determination of administrative and
general expenses regarding Start-Up and Pre-Operation Costs as agreed to in the
letter entitled "Letter of Understanding Concerning Administrative and General
Expense Charged to Arizona Nuclear Power Project Start-Up and Pre-Operation
Expenses", hereinafter referred to as "Letter of Understanding", which became
effective February 21, 1985

-2-

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2.3
Pursuant to Items D.1, D.2 and D.3 of the Letter of Understanding, the
Participants, based upon the recommendation of the Auditing Committee, have
determined that it is desirable to implement by this Amendment No. 11 certain
changes to the formulas for determining the Operation and Maintenance A & G
Ratio, the O & M Ratio and Constrction Ratio, and the Capital A & G Ratio.

2.4
Pursuant to the Salt River Project - Los Angeles Palo Verde Station Assignment
Agreement, dated January 29, 1986, by and between Salt River Project and LADWP,
on January 29, 1986, Salt River Project, pursuant to Section 15.3 of the
Participation Agreement, assigned and transferred to LADWP, among other things,
an undivided 5.7% interest in the Palo Verde Nuclear Generating Station and in
the Project Agreements related thereto, and a 5.7% Generation Entitlement Share
under the Participation Agreement (all collectively referred to as "LADWP's Palo
Verde Interest") and LADWP pursuant to Section 15.5 of the Participation
Agreement has accepted said assignment and transfer and has become, and assumed
the status and obligations of, a Participant in the Palo Verde Nuclear
Generating Station to the extent of LADWP's Palo Verde Interest.

3.
AGREEMENT:

In consideration of the terms and conditions contained in this Amendment No. 11,
the parties agree as follows:

-3-

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4.
EFFECTIVE DATE:

This Amendment No. 11 shall become effective 10 days following the filing of
this Amendment No. 11 with the Nuclear Regulatory this Commission, and shall be
as indicated on the cover page to Amendment No. 11. This Amendment No. 11 shall
supercede in its entirety the Letter of Understanding.
5.
AMENDMENT NO. 11 TO THE PARTICIPATION AGREEMENT:

5.1
A new Section 3.8A is hereby added to read as follows:

"3.8A
Beginning of Generating Unit Fuel Load: The date on which the first Fuel
Assembly is placed in the reactor vessel of each Generating Unit."

5.2
A new Section 3.8B is hereby added to read as follows:

"3.8B
Beginning of Generating Unit Precore Hot Functional Test: The date on which
information is first recorded in the Hot Functional Director's Log of
Information for each Generating Unit in accordance with Section 8.1 of the PVNGS
Manual, Procedure No. 90HF-1ZZ01.

5.3
Section 3.23 is hereby deleted in its entirety and a new Section 3.23 is hereby
added to read as follows:

"3.23
FPC Accounts: The Federal Energy Regulatory Commission's (FERC) "Uniform System
of Accounts Prescribed for Public Utilities and Licensees (Class A and Class
B)", in effect as of the date of this Participation Agreement, and as such
system of accounts may be in effect from time to time.

-4-

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References in this Participation Agreement to any specific FPC Account number
shall mean the FERC Account number in effect as of the effective date of this
Participation Agreement or any successor FERC Account."
5.4
Section 3.28 is hereby deleted in its entirety and a new Section 3.28 is hereby
added to read as follows:

"3.28    Generation Entitlement Share: The percentage entitlement of each
Participant to the Net Energy Generation and to the Available Generating
Capability. Each Participant's percentage entitlement is as follows:
38.28.1
Arizona
=
29.1 percent
 
 
 
 
3.28.2
Salt River Project
=
17 .49 percent
 
 
 
 
3.28.3
Edison
=
15.8 percent
 
 
 
 
3.28.4
PNM
=
10.2 percent
 
 
 
 
3.28.5
El Paso
=
15.8 percent
 
 
 
 
3.28.6
SCPPA
=
5.91 percent
 
 
 
 
3.28.7
LADWP
=
5.7 percent"

5.5
A new Section 3.45A is hereby added to read as follows:

"3.45A
Power Ascension Level 50%: That point at which each Generating Unit is certified
at the fifty percent (50%) "Reliable (Power Level) Power Operation During Power
Ascension Testing" level by the Engineering and Operating Committee pursuant to
the Engineering and Operating Committee's Procedure

-5-

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No. 7."  
5.6
A new Section 3.53A is hereby added to read as follows:

"3.53A
Start-Up and Pre-Operation Costs: The costs of start‑up and pre-operation of
ANPP as described in Section 10A."

5.7
A new Section 10A is hereby added to read as follows:

"10A.
START-UP AND PRE-OPERATION COSTS:

10A.1
For purposes of computing the allowance for start-up and pre-operation
administrative and general expenses beginning on October 1, 1984, and through
the Date of Firm Operation of each respective Generating Unit, Start-Up and
Pre-Operation Costs of ANPP for each Generating Unit, including its one-third
share of common facilities, shall consist of all payments made and obligations
incurred by the Project Manager and the Operating Agent as follows:

10A.1.1
Costs of pre-operational Operating Work, as such costs are described within
Appendix G, Section G.7.1;

10A.1.2
Costs of training personnel for Operating Work, as such training expenses are
described within Appendix G, Sections G.7.3 and G.7.4; 

-6-

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10A.1.3
Costs of all operation and maintenance performed by any contractor.

10A.2
Start-Up and Pre-Operation Costs shall not receive an allowance for
administrative and general expenses except as provided pursuant to Appendix L,
attached hereto and made a part hereof."

5.8
A new Section 38.1.7 is hereby added to read as follows:

"38.1.7
Department of Water and Power

of the City of Los Angeles
c/o Chief Electric Engineer and
Assistant Manager
P. O. Box 111
111 North Hope Street
Los Angeles, California 90015"

5.9
Section E.6 of Appendix E is hereby deleted in its entirety and a new Section
E.6 is hereby added to read as follows:

"E.6    Operation and Maintenance A & G Ratio:
E.6.1
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

-7-

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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 operation and maintenance by (ii)
the direct labor (i.e. total labor less labor charged 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 (1%) pursuant to Section L.l.3.

-8-

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E.6.2
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 OPERATION AND MAINTENANCE 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

Total
17,4087,542
 
 
$
24,614,863

Total FPC Accounts 920 and 921,
   multiplied by O&M Ratio @ 68.481%

$ 11,921,544
 
 
$
16,856,504

FPC Account 923
   
 
 
919,166

FPC Account 932 (presently 935)
1,555,913
 
 
3,127,002

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

 
 
 
 
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 $22,261,169 ÷ $135,397,318 = 16.442%
 
 
 

Note: All labor figures include loading for allowed time."
5.10
Section E.8 of Appendix E is hereby deleted in its entirety and a new Section
E.8 is hereby added to read as follows:

"E.8
O & M Ratio and Construction Ratio:

E.8.1
The O & M Ratio set forth below shall be applied to the amounts chargeable to
FPC

-9-

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Accounts 920 and 921 for the purpose of determining one component in the
computation of the Operation and Maintenance A & G Ratio as provided in Section
E.6 hereof.
O & M Ratio =
O
L

Where:
O =     The Operating Agent's direct labor 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 (1%) pursuant to Section L.1.3. 

L =
The operating Agent's direct labor distributed, including accruals, less direct
labor

-10-

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chargeable to FPC Accounts 920 through 931 and 935.
E.8.2
The Construction Ratio set forth below shall be applied to the amounts
chargeable to FPC Accounts 920 and 921 for the purpose of determining one
component in the computation of the Capital A & G Ratio as provided in Section
E.9 hereof.        

Construction Ratio =
C
L

Where: C =
The Operating Agent's direct labor in construction accounts (exclusive of A &
G), to include construction labor billed to Participants, including the labor
portion of 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, and 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.

-11-

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L =
The Operating Agent's direct labor distributed, including accruals, less direct
labor chargeable to FPC Accounts 920 through 931 and 935.

E.8.3
Estimated and actual O & M Ratios and Construction Ratios shall be determined,
adjusted and used in the manner set forth in Section E.10 hereof.

E.8.4
The following example sets forth the method to be employed by the Operating
Agent to determine the O & M Ratio and the Construction Ratio:

EXAMPLE COMPUTATION
O & M RATIO AND CONSTRUCTION RATIO
(Based on the Operating Agent's 1984 Experience)

Total direct labor in operation and maintenance
 
 
 
 
   Accounts
 
 
$
148,557,953

 
Less: direct labor charged to administrative
 
 
 
 
   and general expense FPC Accounts 920
 
 
 
 
   through 931, inclusive and FPC Account 935
 
 
13,160,635

 
Net labor in O & M Accounts
 
 
$
135,397,318

 
Total direct labor charged to General Ledger
 
 
 
 
   Accounts
 
 
6,255,648

 
Total direct labor in construction Accounts
 
 
 
 
   (exclusive of A & G)
 
 
56,061,726

 
      Total Labor Base
 
 
$
197,714,692

 
Ratio of net O & M labor to direct labor
 
 
$ 135,397,381

= 68.481%
 
 
 
$
197,714.692

 
Ratio of construction labor to direct labor
 
 
$ 56,061,726

= 28.355%
 
 
 
$
197,714,692

 

Note: All labor figures include loading for allowed time.

5.11
Section E.9 of Appendix E is hereby deleted in its entirety

-12-

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and a new Section E.9 is hereby added to read as follows:
"E.9
Capital A & G Ratio:

E.9.1 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
(1%) 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
(l%) 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

-13-

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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 (1%) pursuant to Section L.1.3.
E.9.2
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

Total
$
17,408,542

 
$
24,614,863

Total FPC Accounts 920 and 921, multiplied
 
 
 
   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 to
 
 
 
   Contract Construction, as further defined in
 
 
 
   Section 9.1
 
 
3,634,919

-14-

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Total A & G allocable to Construction
 
 
$
4,385,618

 
 
 
 
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
 
 
13496,824

   expense percentage of one percent (1%)
 
 
 
 
 
 
 
Total Construction Direct Labor Base
 
 
$
42,564,902

 
 
 
 
Capital A & G Ratio for 1984 $4,385,618 ÷ $42,564,902 =
 
 
10.303
%

Note: All labor figures include loading for allowed time."

5.12
A new Appendix L is hereby added to read as attached.

5.13
Except as provided herein, the Participation Agreement, as amended by this
Amendment No. 11, shall remain in full force and effect.

6.
EXECUTION BY COUNTERPARTS:

This Amendment No. 11 may be executed in any number of counter- parts, 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 No. 11 may be detached
from any counterpart of this Amendment No. 11 without impairing the legal effect
of any signatures thereon, and may be attached to another counterpart of this
Amendment No. 11 identical in form hereto but having attached to it one or more
signature pages.
/
/
/
/

-15-

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7.
SIGNATURE CLAUSE:

The signatories hereto represent that they have been appropriately authorized to
enter into this Amendment No. 11 on behalf of the party for whom they sign. This
Amendment No. 11 is hereby executed as of the 8th day of September, 1986.

 
 
 
 
 
ARIZONA PUBLIC SERVICE COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By
/s/ [ILLEGIBLE]
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SALT RIVER PROJECT AGRICULTURAL
 
 
 
 
 
IMPROVEMENT AND POWER DISTRICT
ATTEST AND COUNTERSIGN:
 
 
 
 
 
 
 
 
By
 
Its
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SOUTHERN CALIFORNIA EDISON COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
 
Its
 
/
 
 
 
 
 
 
 
 

/
/
/
/
/
/
/

-16-

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7.
SIGNATURE CLAUSE:

The signatories hereto represent that they have been appropriately authorized to
enter into this Amendment No. 11 on behalf of the party for whom they sign. This
Amendment No. 11 is hereby executed as of the _____ day of __________, 1986.
 
 
 
 
 
ARIZONA PUBLIC SERVICE COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT
 
 
 
 
 
 
ATTEST AND COUNTERSIGN:
 
 
 
 
 
/s/ [ILLEGIBLE]
 
By
/s/ [ILLEGIBLE]
Its
SECRETARY
 
Its
PRESIDENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SOUTHERN CALIFORNIA EDISON COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
 
Its
 
/
 
 
 
 
 
 
 
 

        
/
/
/
/
/
/
/

-16-

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7.
SIGNATURE CLAUSE:

The signatories hereto represent that they have been appropriately authorized to
enter into this Amendment No. 11 on behalf of the party for whom they sign. This
Amendment No. 11 is hereby executed as of the _____ day of __________, 1986.

 
 
 
 
 
ARIZONA PUBLIC SERVICE COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT
 
 
 
 
 
 
ATTEST AND COUNTERSIGN:
 
 
 
 
 
 
 
By
 
Its
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SOUTHERN CALIFORNIA EDISON COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By
/s/ [ILLEGIBLE]
 
 
 
 
 
Its
VICE PRESIDENT
/
 
 
 
 
 
 
 
 

        

-16-

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PUBLIC SERVICE COMPANY OF NEW MEXICO
 
 
 
 
 
 
 
 
 
 
 
 
By
/s/ [ILLEGIBLE]
 
 
 
 
 
SENIOR VICE PRESIDENT
 
 
 
 
Its
POWER SUPPLY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EL PASO ELECTRIC COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, doing business in the State of
Arizona as SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ASSOCIATION
 
 
 
 
 
 
 
 
ATTEST:
 
 
 
 
 
 
 
 
By
 
Its
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES
 
 
 
 
 
 
 
 
 
 
 
 
BY
 
 
 
 
 
 
 
 
 
 
 
 
 
BOARD OF WATER AND POWER COMMISSIONERS OF THE CITY OF LOS ANGELES
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
and
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 

-17-

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PUBLIC SERVICE COMPANY OF NEW MEXICO
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EL PASO ELECTRIC COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
By
/s/ [ILLEGIBLE]
 
 
 
 
Its
VICE PRESIDENT
 
 
 
 
 
 
 
 
 
 
 
 
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, doing business in the State of
Arizona as SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ASSOCIATION
 
 
 
 
 
 
 
 
ATTEST:
 
 
 
 
 
 
 
 
By
 
Its
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES
 
 
 
 
 
 
 
 
 
 
 
 
BY
 
 
 
 
 
 
 
 
 
 
 
 
 
BOARD OF WATER AND POWER COMMISSIONERS OF THE CITY OF LOS ANGELES
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
and
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 

-17-

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PUBLIC SERVICE COMPANY OF NEW MEXICO
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EL PASO ELECTRIC COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
By
/s/ [ILLEGIBLE]
 
 
 
 
Its
PRESIDENT
 
 
 
 
 
 
 
 
 
 
 
 
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, doing business in the State of
Arizona as SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ASSOCIATION
 
 
 
 
 
 
 
 
ATTEST:
 
 
 
 
 
 
 
 
By
 
Its
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES
 
 
 
 
 
 
 
 
 
 
 
 
BY
 
 
 
 
 
 
 
 
 
 
 
 
 
BOARD OF WATER AND POWER COMMISSIONERS OF THE CITY OF LOS ANGELES
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
and
 
 
 
 
 
Its
 
 
 
 
 
 
Secretary

    

-17-

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PUBLIC SERVICE COMPANY OF NEW MEXICO
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EL PASO ELECTRIC COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
By
 
 
 
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, doing business in the State of
Arizona as SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ASSOCIATION
 
 
 
 
 
 
 
 
ATTEST:
 
 
 
 
 
 
 
 
By
 
Its
 
 
Its
 
 
 
 
 
 
 
 
 
 
 
 
 
DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES
 
 
 
 
 
 
 
 
 
 
 
 
BY
/s/ [ILLEGIBLE]
 
 
 
 
Its
 

-17-

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STATE of ARIZONA
)
 
 
)
ss.
County of Maricopa
)
 

On this _8th_ day of __September__, 1986 before me, the undersigned Notary
Public, personally appeared ___E. E. Van Brunt ____ who acknowledged himself to
be the Executive Vice President of ARIZONA PUBLIC SERVICE COMPANY, an Arizona
corporation, and that he as such officer, being authorized so to do, executed
the foregoing instrument for the purposes therein contained by signing the name
of the company by himself as such Executive Vice President .

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

/s/ [ILLEGIBLE]
Notary Public

My commission expires:
April 6, 1987

STATE of ARIZONA
)
 
 
)
ss.
County of Maricopa
)
 

On this ______ day of ___________, 1986 before me, the undersigned Notary
Public, personally appeared ______________________ and ______________________
who acknowledged themselves to be the ___________________________ and
___________________________ of SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND
POWER DISTRICT, an Arizona agricultural improvement district, and that they as
such officers, being authorized so to do, executed the foregoing instrument for
the purposes therein contained by signing the name of the company by themselves
as such _____________________ and ______________________.

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

 
Notary Public

My commission expires:
 

/
/

-18-

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

STATE of ARIZONA
)
 
 
)
ss.
County of Maricopa
)
 

On this ______ day of ___________, 1986 before me, the undersigned Notary
Public, personally appeared ______________________ who acknowledged himself to
be the ______________________ of ARIZONA PUBLIC SERVICE COMPANY, an Arizona
corporation, and that he as such officer, being authorized so to do, executed
the foregoing instrument for the purposes therein contained by signing the name
of the company by himself as such ______________________.

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

 
Notary Public

My commission expires:
 

STATE of ARIZONA
)
 
 
)
ss.
County of Maricopa
)
 

On this _29th_ day of _July______, 1986 before me, the undersigned Notary
Public, personally appeared _JOHN R LASSEN__________ and ___PAUL D RICE_____ who
acknowledged themselves to be the _____PRESIDENT_____________ and
_____SECRETARY_____________ of SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND
POWER DISTRICT, an Arizona agricultural improvement district, and that they as
such officers, being authorized so to do, executed the foregoing instrument for
the purposes therein contained by signing the name of the company by themselves
as such _____________________ and ______________________.

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

/s/ [ILLEGIBLE]
Notary Public

My commission expires:
April 29, 1987

-18-

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

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

On this _26th_ day of __August__, 1986 before me, the undersigned Notary Public,
personally appeared ___G. J. Bjorklund____ who acknowledged himself to be the
__Vice President of SOUTHERN CALIFORNIA EDISON COMPANY, a California
corporation, and that he as such officer, being authorized so to do, executed
the foregoing instrument for the purposes therein contained by signing the name
of the company by himself as such __Vice Officer .

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

/s/ Vera Montemayor
Notary Public

My commission expires:
Aug. 19, 1987

[Notary Seal]
STATE of NEW MEXICO
)
 
 
)
ss.
County of Bernalillo
)
 

On this ______ day of __________, 1986 before me, the undersigned Notary Public,
personally appeared ______________________ who acknowledged himself to be the
____________________________ of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New
Mexico corporation, and that he as such officer, being authorized so to do,
executed the foregoing instrument for the purposes therein contained by signing
the name of the company by himself as such ______________ .

IN WITNESS WHEREOF, I have set my hand and official seal.
/s/ [ILLEGIBLE]
Notary Public

My commission expires:
 

/
/
/

-19-

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

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

On this ______ day of __________, 1986 before me, the undersigned Notary Public,
personally appeared ______________________ who acknowledged himself to be the
_______________________ of SOUTHERN CALIFORNIA EDISON COMPANY, a California
corporation, and that he as such officer, being authorized so to do, executed
the foregoing instrument for the purposes therein contained by signing the name
of the company by himself as such ______________ .

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

 
Notary Public

My commission expires:
 

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

On this _25th_ day of __September__, 1986 before me, the undersigned Notary
Public, personally appeared ____J. L. Wilkins____ who acknowledged himself to be
the ____Senior Vice President_ of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New
Mexico corporation, and that he as such officer, being authorized so to do,
executed the foregoing instrument for the purposes therein contained by signing
the name of the company by himself as such __Senior Vice Officer .

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

/s/ SHERRY LEESON
Notary Public

My commission expires:
July 1, 1988

[Notary Seal]
/
/
/

-19-

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

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

On this _18th_ day of July, 1986 before me, the undersigned Notary Public,
personally appeared J. E. Wasiak who acknowledged himself to be the Vice
President of EL PASO ELECTRIC COMPANY, a Texas corporation, and that he as such
officer, being authorized so to do, executed the foregoing instrument for the
purposes therein contained by signing the name of the company by himself as such
Vice President.

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

/s/ CECILIA R. SHEA
Notary Public

My commission expires:
July 3, 1989

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

On this ______ day of ___________, 1986 before me, the undersigned Notary
Public, personally appeared ______________________ and ______________________
who acknowledged themselves to be the ___________________________ and
___________________________ of SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY (doing
business in the State of Arizona as SOUTHERN CALIFORNIA POWER AUTHORITY
ASSOCIATION), a California joint powers agency, and that they as such officers,
being authorized so to do, executed the foregoing instrument for the purposes
therein contained by signing the name of the company by themselves as such
_____________________ and ______________________.

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

 
Notary Public

My commission expires:
 

/
/

-20-

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

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

On this ______ day of ___________, 1986 before me, the undersigned Notary
Public, personally appeared ______________________ who acknowledged himself to
be the ______________________ of EL PASO ELECTRIC COMPANY, a Texas corporation,
and that he as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the company
by himself as such ______________________.

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

 
Notary Public

My commission expires:
 

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

On this _30th_ day of _July______, 1986 before me, the undersigned Notary
Public, personally appeared __Gale A. Drews_______ and __Frank Salas_________
who acknowledged themselves to be the ___President_______________ and _Asst
Secretary____________ of SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY (doing
business in the State of Arizona as SOUTHERN CALIFORNIA POWER AUTHORITY
ASSOCIATION), a California joint powers agency, and that they as such officers,
being authorized so to do, executed the foregoing instrument for the purposes
therein contained by signing the name of the company by themselves as such
__President__________ and __Asst Secretary______.

IN WITNESS WHEREOF, I have set my hand and official seal.
/s/ Raul A. Mora
Notary Public

My commission expires:
 

[Notary Seal]
/
/

-20-

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

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

On this _29th_ day of _October___, 1986 before me, the undersigned Notary
Public, personally appeared Eldon A. Cotton who acknowledged himself to be the
Assistant Chief Engineer – Power of DEPARTMENT OF WATER AND POWER OF THE
CITY OF LOS ANGELES, a California municipal corporation, and that he as such
officers, being authorized so to do, executed the foregoing instrument for the
purposes therein contained by signing the name of the company by himself as such
Assistant Chief Engineer – Power.

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

/s/ Sally Morrison Fick
Notary Public

My commission expires:
November 18, 1988

[Notary Seal]

/
/
/
/
/
/
/
/
/
/
/
/
/
/

-21-

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

APPENDIX L
START-UP AND PRE-OPERATION ADMINISTRATIVE AND GENERAL EXPENSE
L.1
Calculation of Start-Up and Pre-Operational A & G Expense

L.1.1
For the period from October 1, 1984 through completion of start-up and
pre-operation activities for ANPP, the administrative and general expense
associated with such activities for each Generating Unit shall be determined by
the following formula: (An example calculation is shown in Exhibit L-A.)

AGE =
[(SUPO) x (OMF) x (OMAG)] ÷ [(SUPO) x (1-OMF) x (CFAG)]

Where:
Age
=    Monthly start-up and pre-operation administrative and general expenses for
each Generating Unit.

SUPO
=    Monthly Start-Up and Pre-Operation Costs for each Generating Unit.

OMF
=    Percent (expressed as decimal of the total monthly Start-UP and
Pre-Operation Costs for each Generating Unit to be allocated to the operation
and maintenance administrative and general expense formula, as determined in
Section L.1.3.

OMAG
=    Operation and maintenance administrative and general expense percentages as
determined and applied in Section E.1.7 and E.1.9 of the Participation
Agreement.

CFAG
=    Construction administrative and general expense percentage of one percent
(1%) as applied pursuant

L-1

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

to Section D.1.14 of the Agreement.
L.1.2
Start-Up and Pre-Operation Costs for ANPP common facilities shall be allocated
by apportioning one-third (1/3) of these expenses to each ANPP Generating Unit
prior to determining the administrative and general expense associated with each
Generating Unit.

L.1.3
To determine start-up and pre-operation administrative and general expense (AGE)
in Section L.1.1 the monthly total Start-Up and Pre-Operation Costs for each
ANPP Generating Unit, including its common facilities share, shall be allocated
between construction and operation & maintenance in accordance with the
benchmark time periods and percentages shown below. If a benchmark time period
begins in the middle of a month, the change in percentage allocation to
construction and operation & maintenance expenses shall take place on the first
day of the calendar month following such benchmark.

 
 
Benchmark Time Period
for Each Generating Unit
 
Percent Allocation Between
Operation & Maintenance
and Construction
OMF/(1-OMF)
 
 
 
 
 
a.
 
10/1/84 to eight (8) months
prior to Beginning of Gen-
erating Unit Precore Hot
Functional Test.
 
25% O&M/75% Construction
b.
 
Eight (8) months prior to
Beginning of Generating
Unit Precore hot Functional
Test to Beginning of Gen-
erating Unit Precore Hot
Functional Test.
 
50% O&M/50% Construction

L-2

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

 
 
 
Benchmark Time Period
for Each Generating Unit
 
Percent Allocation Between
Operation & Maintenance
and Construction
OMF/(1-OMF)
 
 
 
 
 
 
(Cont'd)
c.
 
Beginning of Generating Unit Precore Hot Functional
Test to Beginning of Generating Unit Fuel Load.
 
70% O&M/30% Construction
 
d.
 
Beginning of Generating Unit
Fuel Load to satisfactory completion of Power Ascension
Level 50%
 
90% O&M/10% Construction
 
 
 
Satisfactory completion of
Power Ascension Level 50%
to completion of start-up
and pre-operation.
 
100% O&M

L.2    Adjustments
L.2.1
The benchmark time periods in Items L.1.3a and L.1.3b require an estimate of the
Beginning of Generating Unit Precore Hot Functional Test for a Generating Unit.
Should the actual date for the Beginning of Generating Unit Precore Hot
Functional Test for a Generating Unit be different than estimated, adjustments
shall be made to the amount of administrative and general expense actually
charged based on the appropriate allocation of Start-Up and Pre-Operation Costs
to construction and operation & maintenance expenses.

L.2.2
Amount of administrative and general expenses determined pursuant to the Letter
of Understanding for the period October 1, 1984 through March, 1985 that were
different than the amount actually paid for the same period have,

L-3

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

pursuant to the Letter of Understanding appeared as a credit on the request for
advancement of Operating Funds for ANPP dated June 14, 1985, Request No.
PVO-093. Such expense differences accrued interest at the rate from time to time
publicly announced by Citibank, N. A., New York, New York, as its prime interest
rate less two percent (2%), from the date of payment of such difference to the
date of mailing of the request for advancement of Operating Funds. Any such
amounts were allocated to each Participant in accordance with its Generation
Entitlement Share, and were clearly delineated on the Operating Agent's request
for advancement of Operating Funds.
L.3
Credit to Future Requests for Advancement of Operating Funds for ANPP

L.3.1
The Operating Agent shall credit to future requests for advancement of Operating
Funds, thirteen million dollars ($13,000,000) plus interest, determined pursuant
to Section L.3.2 of this Appendix L, for administrative and general expense
charged to Start-Up and Pre-Operation Costs through September 30, 1984. Such
credit will be allocated to each Participant in accordance with its Generation
Entitlement Share, and is separate and in addition to any adjustment to
administrative and general expense necessitated by the routine annual adjustment
to the Operation and Maintenance A & G Ratio pursuant to Section E.10.2 of the
Participation Agreement. No other

L-4

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

adjustment shall be made to change administrative and general expense charged to
Start-Up and Pre-Operation Costs through September 30, 1984, except for those
related to any future adjustments made to Start-Up and Pre‑Operation Costs
incurred through such date.
L.3.2    Interest will be charged on the unpaid balance of the thirteen million
dollars ($13,000,000) credit beginning on October 1, 1984. The interest rate to
be applied will be the rate from time to time publicly announced by Citibank,
N.A., New York, New York, as its prime interest rate, less two percent (2%). The
initial credit shall include all interest accrued from September 30, 1984, and
subsequent monthly credits will be applied first against accrued interest. In
addition to such monthly payments of all accrued interest, the principal balance
shall be amortized by crediting monthly an amount equal to not less than one
twenty-fourth (1/24) of such amount until the full thirteen million dollars
($13,000,000) principal amount has been credited. Pursuant to the Letter of
Understanding, the initial credit hereunder occurred with the first request for
the advancement of Operating Funds dated March 1, 1985.
/
/
/
/

L-5

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

EXHIBIT L-A
SAMPLE CALCULATION of
MONTHLY ADMINISTRATIVE AND GENERAL EXPENSE FOR
START-UP AND PRE-OPERATION COSTS FOR
ANPP GENERATING UNIT NO. 1
 
 
 
 
 
 
 
 
 
AGE = [(SUPO) X (OMF) X (OMAG)] + [(SUPO) X (1-OMF) X (CFAG)]
 
 
 
 
 
 
ASSUMPTIONS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SUPO
=
$9,500,000 (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OMF
=
90%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OMAG
=
16.442% OF Project Manager's/Operating Agent's ANPP labor, plus 1% of
contractor's costs, plus 0% of other costs.
 
 
 
 
 
 
 
 
 
 
CFAG
=
1%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Project Manager's/Operating Agent's ANPP Labor Costs = $4,750,000
 
 
 
 
 
 
 
 
 
 
CONTRACTOR COSTS = $3,800,000
 
 
 
 
 
 
 
 
 
 
 
OTHER COSTS = $950,000
 
 
 
 
 
 
 
 
 
 
 
 
 
CALCULATION:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AGE
=
[($9,500,000) X (.9) X (OMAG)] + (9,500,000)(1-.9) X (CFAG)]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(4,750,000)(.9)(.16442)
 
 
[($9,500,000) x (.9) x (OMAG) = ÷
(3,800,000)(.9)(.01) = $737,096
 
 
 
 
 
 
+(950,000)(.9)(0.0)
 
 
 
 
 
 
 
 
 
 
 
[($9,500,000) x (1-.9) x (CFAG)] = ($9,500,000)(.1)(.01) = $9,500
 
 
 
 
 
 
 
 
 
 
 
AGE
=
$737,096 + $9,500
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AGE
=
$
746,596

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1
)
Includes 1/3 of Start-Up and Pre-Operation Costs for common facilities.
 
 
 
 
 
 
 
 
 
(2
)
The OMAG rate will be applied to only the Project Manager's/Operating Agent's
ANPP labor incurred for Start-UP and Pre-Operation Costs times the OMF factor in
effect.

L-6