Exhibit 10.2

PRIEST RAPIDS PROJECT
REASONABLE PORTION
POWER SALES CONTRACT

INDEX TO SECTIONS

SECTION 1. TERM OF CONTRACT
SECTION 2. DEFINITIONS
SECTION 3. PROCEEDS FROM THE SALE OF THE REASONABLE PORTION
SECTION 4. DETERMINATION OF ESTIMATED PURCHASER REVENUE ALLOCATION OF REASONABLE
PORTION PROCEEDS
SECTION 5. ANNUAL POWER COSTS
SECTION 6. PAYMENT FOR PRIEST RAPIDS PROJECT PURCHASER REVENUE ALLOCATION
SECTION 7. SUPPORT AND COOPERATION
SECTION 8. PAYMENT OF THE REASONABLE PORTION PROCEEDS
SECTION 9. INFORMATION TO BE MADE AVAILABLE TO THE PURCHASER
SECTION 10. INSURANCE
SECTION 11. PROJECT INTEGRATION
SECTION 12. LIABILITY OF PARTIES
SECTION 13. NOTICES AND COMPUTATION OF TIME
SECTION 14. DISTRICT'S BOND RESOLUTIONS AND LICENSE
SECTION 15. GOVERNING LAW
SECTION 16. ASSIGNMENT OF CONTRACT
SECTION 17. REMEDIES ON DEFAULT
SECTION 18. VENUE AND ATTORNEY FEES
SECTION 19. COMPLIANCE WITH LAW
SECTION 20. HEADINGS
SECTION 21. ENTIRE AGREEMENT; MODIFICATION; CONFLICT IN PRECEDENCE
SECTION 22. NO PARTNERSHIP OR THIRD PARTY RIGHTS
SECTION 23. PURCHASERS' COMMITTEE; ARBITRATION
SECTION 24. REPRESENTATIONS AND WARRANTIES
SECTION 25. COUNTERPARTS

EXHIBITS
EXHIBIT A - BOND RESOLUTION SECTIONS
EXHIBIT B - AREAS SERVED OUTSIDE GRANT COUNTY

PRIEST RAPIDS PROJECT REASONABLE PORTION
POWER SALES CONTRACT

Executed by
PUBLIC UTILITY DISTRICT NO. 2
OF GRANT COUNTY
And
PUGET SOUND ENERGY, INC.

This contract is entered into as of December 13, 2001 between Public Utility
District No. 2 of Grant County, Washington (the "District"), a municipal
corporation of the State of Washington, and PUGET SOUND ENERGY, INC. (the
"Purchaser"), a corporation organized and existing under the laws of the State
of Washington. The District and the Purchaser are referred to as a "Party" and
collectively as "Parties".

SECTION 1. TERM OF CONTRACT.

(a) Except as otherwise provided herein, this contract shall be in full force
and effect from and after it has been executed by the District and the
Purchaser. Unless sooner terminated pursuant to other provisions, this contract
shall remain in effect until the earlier of expiration or termination of the New
FERC License or such time that the District no longer has authority to market
Priest Rapids Project Output. Except as otherwise provided herein, all
obligations accruing under this contract are preserved until satisfied.

(b) Notwithstanding Section 1(a), the affirmative obligations of the Parties in
Sections 3(a), 3(b), 3(c), 3(d), 3(g), 4 through 6, 8 through 12 and 23 (a) and
(b) (1-2, and 5) shall take effect on November 1, 2005.

(c) Except as provided in Section 1(d), all Eligible Purchasers shall have until
December 31, 2001 to execute this contract.

(d) If the City of Forest Grove, McMinnvil1e, Milton-Freewater or Seattle City
Light provides the District written assurance on or before December 31, 2001,
that its superintendent or its city manager supports the execution of this
contract and will so recommend to its city council, then if Seattle City Light
provides such written assurance it shall have until March 31, 2002, to execute
this contract, and if Forest Grove, McMinnville or Milton Freewater provides the
District such written assurance, the city providing such written assurance shall
have until February 1, 2002, to execute this contract.

SECTION 2. DEFINITIONS.

As used in this contract, the following terms when initially capitalized shall
have the following meanings:

“1956 Contract” shall mean the contract entered into by the District and various
parties during May 1956 for the sale of capacity and energy from the Priest
Rapids Development as supplemented and amended from time to time.

“1959 Contract” shall mean the contract entered into by the District and various
parties during June 1959 for the sale of capacity and energy from the Wanapum
Development as supplemented and amended from time to time.

"Annual FERC License" shall mean a license for the Priest Rapids Project issued
by FERC to the District for an interim period before a New FERC License.

“Bond Resolution” shall mean each and all of the resolutions adopted by the
District authorizing the issuance of outstanding Debt for the Priest Rapids
Project.

“Contract Year” shall mean the 12 month period commencing at 12:01 a.m. on
January 1 of each year and ending at 12:01 a.m. on the following January 1;
provided, however, that the first Contract Year shall commence on November 1,
2005, and end the following January 1, 2006, and that the last Contract Year
shall end on the last day of the New FERC License, or such time that the
District no longer has authority to market Priest Rapids Project Output.

“Contract(s)” shall mean this contract and similar contracts between the
District and other Purchasers.

“Debt” shall mean any bonds, notes, or other debt obligations of the District,
including, but not limited to all bonds outstanding at the effective date of
this contract, a line of credit, installment purchase agreement, financing
lease, interfund loan, derivative securities or payment obligations and any
other obligation for borrowed money, the proceeds of which will be used for the
benefit of the Priest Rapids Project, including to finance betterments,
renewals, replacements and additions to the Priest Rapids Project, to refund
other debt, or any other lawful purpose related to the Priest Rapids Project.
Debt does not include the Columbia River-Priest Rapids Hydro-Electric Production
System Revenue Bonds, Series 1956, which have been paid, or the Wanapum
Hydroelectric Refunding Revenue Bonds, Series 1963, which are scheduled to be
repaid on or prior to January 1, 2004.

“Electric System” shall mean the separate electric utility system of the
District, including all associated generation, transmission and distribution
facilities and any betterments, renewals, replacements and additions of such
system, but does not include the Priest Rapids Project or any other utility
properties designated as a separate utility system of the District.

"Eligible Purchasers" means the Purchasers who are parties to the 1956 and 1959
Contracts, and the Kootenai Electric Cooperative, Inc., Clearwater Power
Company, Idaho County Light and Power Cooperative Association, Inc., Northern
Lights, Inc. and the electric cooperative members of the Snake River Power
Association, Inc. (collectively, the "Idaho Cooperatives") as of October 31,
2000.

"FERC" shall mean the Federal Energy Regulatory Commission or its successor.

“FERC License” shall mean any license for the Priest Rapids Project issued by
FERC to the District.

“Marketing Plan” shall mean the plan for making available in a fair, equitable
and non-discriminatory manner pursuant to market-based principles and procedures
the Reasonable Portion as required by applicable law or PL 83-544 Orders.

“New FERC License” shall mean the license issued by FERC to the District
following the expiration of the Original FERC License for operation of the
Priest Rapids Project for a duration of 30 years or longer, not including any
subsequent annual or other license.

“Operating Agreements” shall mean any agreements to which the District is or may
become a party, which provide for operation of the Priest Rapids Project,
including but not limited to, the Pacific Northwest Coordination Agreement, the
Agreement for the Hourly Coordination of Projects on the Mid-Columbia River, the
Western Systems Coordinating Council Agreement, the Agreement Relating to
Wanapum Development Encroachment on the Rock Island Project and the Northwest
Power Pool, which is the voluntary association of utilities formed in the
Pacific Northwest for the purpose of ensuring the adequacy and reliability of
the electric power systems in the Pacific Northwest.

"Original FERC License" shall mean the Federal Power Commission License for the
Priest Rapids Project issued to the District on November 4, 1955, together with
amendments thereto.

“Pacific Northwest” shall have the meaning ascribed thereto in Section 3(14) of
the Regional Act.

“Priest Rapids Development” shall mean the separate utility system of the
District, including a dam at the Priest Rapids Development, all generation and
transmission facilities associated therewith, and all betterments, renewals,
replacements, and additions to such system, as further described in Section 2(f)
of Exhibit 1 of District Resolution No. 390 which is attached as Exhibit A, but
shall not include any additional generation, transmission and distribution
facilities hereafter constructed or acquired by the District as a part of the
Electric System or the Wanapum Development or any other utility properties of
the District acquired or constructed as a separate utility system.

"Priest Rapids Project" shall mean the hydroelectric project on the Columbia
River in the State of Washington designated by the Federal Power Commission as
Project No. 2114. The Priest Rapids Project consists of the Priest Rapids
Development and the Wanapum Development.

“Priest Rapids Project Output” shall mean the amount of capacity, energy (both
firm and non-firm), pondage, reactive power, ancillary services and any other
product from the Priest Rapids Development from November 1, 2005 to November 1,
2009 and from the Priest Rapids Project from November 1, 2009 through the term
of this contract under the operating conditions which exist during the term,
including periods when the Priest Rapid Project may be wholly or partially
inoperable for any reason, after correction for encroachment, Canadian
entitlement, station and project use, and depletions required by the FERC
License or other regulatory requirements.

“Prudent Utility Practice” means those practices, methods and acts which: (i)
when engaged in are commonly used in prudent engineering and operations to
operate electric equipment and associated mechanical and civil facilities
lawfully and with safety, reliability, efficiency and expedition or (ii) in the
exercise of reasonable judgment considering the facts known when engaged in,
could have been reasonably expected to achieve the desired result consistent
with applicable law, safety, reliability, efficiency and expedition. Prudent
Utility Practice is not intended to be the optimum practice, method or act, to
the exclusion of all others, but rather to be a spectrum of commonly used
practices, methods or acts.

"Public Law 83-544" (or "PL 83-544") shall mean the legislation passed by the
83rd Congress authorizing the District to develop the Priest Rapids Project.

"Purchasers" shall mean the Purchaser and each person or entity that has entered
into a contract with the District substantially similar to this contract.

"Purchaser Revenue Allocation" shall mean the fixed percentage (stated to the
second decimal point, e.g., 0.01%) as set forth in Section 3 (b) of the proceeds
from and the costs of the sale of the Reasonable Portion made available under
this contract. For parties to the 1956 and 1959 Contracts, Purchaser Revenue
Allocation may not exceed twice the average of their participation in the 1956
and 1959 Contracts except that for those Purchase that were parties to the 1956
Contracts but were not parties to the 1959 Contracts their Purchaser Revenue
Allocation for the period November 1, 2005 to October 31, 2009 may not exceed
twice their participation in the 1956 Contract. For any individual Idaho
Cooperative, Purchaser Revenue Allocation shall not exceed the Purchaser Product
Percentage of any individual party to the 1956 or 1959 Contract that is one of
the Purchasers except when the provisions of Section 3(e) are applied. The
Purchaser Revenue Allocation set forth in Section 3(b) is subject to revision
pursuant to Sections 3(e), 3(f), 3(g), 3(h) and 4(f).

"Reasonable Portion" shall mean that 30% portion of the Priest Rapids Project
Output required by FERC pursuant to Public Law 83-544 to be offered for sale by
the District.

“Reasonable Portion Proceeds” shall mean the proceeds derived from the sale of
the Reasonable Portion pursuant to the Marketing Plan.

“Regional Act” shall mean Public Law 96-501, the Pacific Northwest Electric
Power Planning and Conservation Act.

“Uncontrollable Forces” shall mean any cause reasonably beyond the control of
the Party and which the Party subject thereto has made reasonable efforts to
avoid, remove or mitigate, including but not limited to acts of God, fire,
flood, explosion, strike, sabotage, act of the public enemy, civil or military
authority, including court orders, injunctions, and orders of government
agencies with proper jurisdiction, insurrection or riot, an act of the elements,
failure of equipment or contractors, or inability to obtain or ship materials or
equipment because of the affect of similar causes on suppliers or carriers;
provided, however, that in no event shall an Uncontrollable Force excuse the
Purchaser from the obligation to pay any amount when due and owing under this
contract.

“Wanapum Development” shall mean the second stage of the Priest Rapids Project
as more fully described in Section 2.2 of District Resolution No.474, which is
attached as Exhibit A, but shall not include any generation, transmission and
distribution facilities hereafter constructed or acquired by the District as a
part of the Electric System or the Priest Rapids Development, or any other
utility properties of the District acquired or constructed as a separate utility
system.

The following terms are defined in the cited sections of this contract:

"Act of Default" at Section 17(a).
"Annual Power Costs" at Section 5(a).
"Committee" at Section 23.
"Coverage Requirement" at Section 5(a)(9).
"Estimated District Loads" at Section 4(c)(1).
"Estimated District Power Costs" at Section 4(c)(4).
"Estimated Power Cost Shortfall" at Section 8(a)(4).
"Estimated Unmet District Load" at Section 4(c)(3).
"Excess Costs" at Section 6(g).
"Financing Costs" at Section 5(a)(3).
"Idaho Cooperatives" at "Eligible Purchasers".
"Improvements" at Section 4(f)(4).
"Multi-Year Contracts" at Section 8(a)(3).
"New FERC License Costs" at Section 5(a)(6).
"Party" and "Parties" at the Preamble.
"PL 83-544 Orders" at Section 3(h).
"Purchaser Estimated Cost" at Section 6(a)(5).
"Refund Costs" at Section 6(g).
"Rock Island Hydroelectric Project" at Section 11(b).
"Zero Year" at Section 8(a)(3).

SECTION 3.  PROCEEDS FROM THE SALE OF THE REASONABLE PORTION.

(a) Pursuant to the PL 83-544 Orders, the Reasonable Portion must be offered for
sale. The District, therefore, desires to mitigate the risk associated with
generating the Reasonable Portion including, but not limited to, the uncertainty
of future Priest Rapids Project Output, costs and market prices. The District
believes that this can be best accomplished by allocating to Purchasers the
costs and proceeds from the sale of the Reasonable Portion.

(b) Upon execution of the contract, Purchaser shall select a percentage
allocation of the costs and proceeds from the sale of the Reasonable Portion as
described below. The percentage of the allocation of the costs and proceeds from
the sale of the Reasonable Portion ("Purchaser Revenue Allocation") shall be
18.8 percent. The amount of the proceeds and the costs from the sale of the
Reasonable Portion are defined in Sections 4 and 6, respectively.

(c) The District will use the Purchaser Revenue Allocation of the Reasonable
Portion Proceeds to purchase capacity and energy for the Purchaser pursuant to a
supplementary agreement between the Purchaser and the District. The District
will directly assign to the Purchaser the cost incurred by the District in using
the Purchaser Revenue Allocation to purchase such capacity and energy.

(d) By notification to the District pursuant to Section 4(b), the Purchaser may
elect to receive its Purchaser Revenue Allocation of Reasonable Portion Proceeds
in cash rather than receiving energy and capacity.

(e) REALLOCATION. If collectively Purchasers subscribe to Purchaser Revenue
Allocations that total more than 100%, then Purchaser Revenue Allocations will
be determined as follows; provided, however, that the application of the
following formula shall not result in the Purchasers being assigned a Purchaser
Revenue Allocation larger than that included in this contract on the date of
execution:

(1) Step 1. One-hundred percent of the Purchaser Revenue Allocation will be
divided between the Purchasers who are parties to the 1956 and 1959 Contracts,
as a group, and the Purchasers who are included in the Idaho Cooperatives, as a
group, in proportion to the number of retail electric customers located in the
Pacific Northwest (determined by the number of retail meters) served by each
group as of October 31, 2000.

(2) Step 2. Each Purchaser's Revenue Allocation will be determined as follows:

(A)    For Purchasers who are parties to the 1956 and 1959 Contracts, the
proportion of such Purchaser Revenue Allocations from Step 1 above will be
distributed to individual Purchasers as follows:

  (i) For November 1, 2005 through October 31, 2009 the Purchaser Revenue
Allocations shall be distributed in proportion to participation in the 1956
Contract and 1959 Contract weighted 75% and 25%, respectively.

  (ii) For the period after November 1, 2009 the Purchaser Revenue Allocations
shall be distributed in proportion to the sum of participation in the 1956
Contract and 1959 Contract divided by two.

(B)    For the Purchasers who are included in the Idaho Cooperatives, the
proportion of such Purchaser Revenue Allocations from Step 1 will be distributed
to such individual cooperatives in proportion to the number of retail electric
customers located in the Pacific Northwest (determined by number of retail
meters) each cooperative served as of October 31, 2000.

(f) If the reallocation procedure of Section 3(e) is implemented, then for the
period November 1, 2005 through October 31, 2009, the following shall apply to
Purchasers who were parties to the 1956 Contracts but were not parties to the
1959 Contracts:

(1) The Purchaser Revenue Allocation shall be adjusted to be in proportion to
participation in the 1956 Contract (the Purchaser's percent participation in the
1956 Contract divided by 63.5%).

(2) The District shall be obligated to provide the Reasonable Portion Proceeds
pursuant to Section 5 using the Purchaser Revenue Allocation, calculated
pursuant to Section 3(f)(1), and the Purchaser shall be obligated to make
payments pursuant to Sections 5 and 6 using such Purchaser Revenue Allocation.

  The adjustments to Purchaser Revenue Allocation pursuant to this Section 3(f)
will have no effect on the Purchaser Revenue Allocation of any other Purchaser.

(g) If a Contract with one of the Purchasers is terminated pursuant to Section
17 as a result of such Purchaser's Act of Default, the District shall give the
non-defaulting Purchasers notice of such default. Beginning with the first-month
that is at least 30 days following such notice, the Revenue Allocations (other
than zero) of non-defaulting Purchasers shall be increased pro rata until
either: (i) the Purchaser Revenue Allocation of the defaulting Purchaser have
been fully allocated or (ii) a further pro rata increase to the Purchaser
Revenue Allocations of the non-defaulting Purchasers would adversely affect the
tax-exempt status of any outstanding Debt. In the event of (ii), the portion of
the Purchaser Revenue Allocation of the defaulting Purchaser not yet allocated
will be offered to all Purchasers that can accept such allocation without
adversely affecting the tax-exempt status of any outstanding Debt. If after such
offer there remains some portion of the Purchaser Revenue Allocation of the
defaulting Purchaser not yet allocated, the District at its discretion may elect
to accept such unallocated portion. If after all of the foregoing there remains
unallocated Purchaser Revenue Allocation of the defaulting Purchaser, the
Purchaser Revenue Allocations (other than zero) of non-defaulting Purchasers
shall be increased pro rata based on each such non-defaulting Purchaser's
Purchaser Revenue Allocation before any allocation under this Section 3(g). In
the event that the allocation described in the immediately preceding sentence
adversely affects the tax-exempt status of Debt, any increased costs resulting
therefrom will be included in Annual Power Costs. Nothing in this subsection is
intended to limit any claims the non-defaulting Purchasers may assert against
the defaulting Purchaser.

(h) REGULATORY APPROVALS. The District and the Purchaser believe that this
contract fully complies with the requirements of Public Law 83-544. FERC has
ordered that a Reasonable Portion of the Priest Rapids Project Output be offered
for sale based on market principles and that Eligible Purchasers are to receive
a meaningful priority. Additionally, FERC has stated that the District may
negotiate power contracts as part of the license application process provided
that implementation of such contracts is contingent on receipt of license
authority. The District and the Purchaser agree that nothing in this contract
limits in any way the District's ability to conform to these FERC requirements.
Nothing in this contract, other than Section 7, limits the ability of the
Purchaser from participating in any FERC or court proceedings that may address
Public Law 83-544.

  The Parties understand that FERC’s orders of February 11, 1998 and June 12,
1998 in Docket No. EL95-35 (the “PL 83-544 Orders”) require the District, as
part of its application for a New FERC License, to file the Marketing Plan for
making available the Reasonable Portion in a fair, equitable and
non-discriminatory manner pursuant to market-based principles and procedures.
The Parties further understand and agree that nothing in this contract is
intended to affect or limit in anyway the right of the District to develop and
file the Marketing Plan which it determines is consistent with the PL 83-544
Orders.

  In the event that FERC or a court of competent jurisdiction shall by order
determine that any provision of this contract violates a requirement of either
PL 83-544 or of any of the PL 83-544 Orders, the Parties shall, within 30 days
of the entry of such an order, commence negotiations for the purpose of reaching
agreement on such amendments to this contract, if any, as may be needed for the
purpose of complying with that order and for the purpose of preserving the basic
benefits and obligations of the Parties. If, within 90 days of commencement of
negotiations, the Parties are not able to resolve their differences and to agree
upon any necessary amendments, either Party may, after notice to the other
Party, cause the matter to be submitted to binding arbitration as provided in
Section 23.

  If following the issuance of the arbitration decision, a Party reasonably
determines that acceptance of such amendments will result in materially
decreased benefits or materially increased obligations when compared to this
contract, the Party may by notice to the other Party explain its reasons for the
determination and, if given within 10 days of the arbitration decision,
terminate this contract.

SECTION 4. DETERMINATION OF ESTIMATED PURCHASER REVENUE ALLOCATION OF REASONABLE
PORTION PROCEEDS.

(a) The estimated Purchaser Revenue Allocation of the Reasonable Portion
Proceeds expected to be available to Purchaser during each Contract Year will be
determined by application of the following provisions of this Section 4.

(b) On or before 60 days prior to the beginning of each Contract Year, Purchaser
shall provide the District with written notification if it wishes to elect,
pursuant to Section 3(d), to receive its Purchaser Revenue Allocation of
Reasonable Portion Proceeds in cash instead of the District purchasing energy
and capacity therewith. In the event that Purchaser fails to make such annual
election pursuant to this section, the District will provide Purchaser with
energy and capacity pursuant to Section 3(c).

(c) For the purpose of determining the estimated Purchaser Revenue Allocation of
the Reasonable Portion Proceeds for the next Contract Year, on or before 30 days
prior to the beginning of each Contract Year, the District shall prepare and
mail to the Purchaser a pro forma statement showing for the next Contract Year:

(1) "Estimated District Loads," which shall mean all projected retail electric
energy loads for the next Contract Year based on average weather conditions,
plus aggregated losses, projected to be used at locations served by the District
during the next Contract Year with the exception of (i) locations outside of the
geographic boundaries shown on Exhibit B and (ii) that portion of loads of
individual retail customers that during a consecutive 12 month period after 2000
exceed by ten average megawatts or more the energy load of such customer for the
immediately preceding consecutive 12 month period. Once load at a location is
included in Estimated District Loads, loads at such location shall continue to
be included in full in future Contract Years without regard to the source of
supply for such load. For example, if a load is expected to be served in all or
part by an entity other than the District during the next Contract Year, the
entire load shall continue to be included in Estimated District Loads. If a new
load or increased load of one average megawatt or more at a single retail
customer has been included in Estimated District Loads in the current Contract
Year, and less than 90% of such new or increased load was actually measured in
the current year, then Estimated District Loads shall be reduced for the next
Contract Year by the difference between the amount included in the current
Contract Year and the amount measured. If there are more than one such new or
increased loads for the current Contract Year, they shall be combined for
determining both the 90% and the amount of any reduction. If in the current
Contract Year a load of one average megawatt or more is placed on the District
which was not included in the current Contract Year's Estimated District Loads,
then the next Contract Year's Estimated District Loads shall be increased by the
amount of such load measured in the current Contract Year. Except for such load
correction calculations, Estimated District Loads for the next Contract Year
shall be not less than the current Contract Year's Estimated District Loads.

(2) The estimated amount of firm energy from the Priest Rapids Project for the
next Contract Year based on critical water planning using the procedures of
Operating Agreements in effect on October 31, 2000, unless the District and
Purchasers whose Purchaser Revenue Allocation total 66% or more mutually agree
to use procedures from a subsequent Operating Agreement.

(3) The monthly amount of "Estimated Unmet District Load" determined as follows:

(A)    Prior to November 1, 2009, the Estimated District Load as calculated in
Section4(c)(1) less 70% of the estimated firm energy output of the Priest Rapids
Development less 36.5% of the estimated firm energy output of the Wanapum
Development both as calculated in Section 4(c)(2).

(B)    On or after November 1, 2009, the Estimated District Loads as calculated
in Section 4(c)(1) less 70% of the estimated firm energy output of the Priest
Rapids Project as calculated in Section 4(c)(2).

(C)    In the event that the calculation in Section 4(c)(3)(A) or (B) above is
less than zero the Estimated Unmet District Load will be zero.

(D)    The difference so determined will be shaped on a monthly basis using the
District's historic load patterns.

(4) The "Estimated District Power Costs" which shall equal the estimated cost,
including the costs of transmission and other necessary services, of acquiring
the monthly amount of capacity and energy identified in Section 4(c)(3)
determined by references to published futures price data and firm power supply
contracts entered into by the District, and rates for transmission and other
necessary services. Prior to the start of the next Contract Year, any Purchaser
may provide the District with a written firm and irrevocable bid(s) for all or
part of the capacity and energy needed to serve the Estimated Unmet District
Load from Section 4(c)(3) for the next Contract Year, and for which the District
has not procured a firm power supply. If such bid(s), or in the case of a
partial supply bid the combination of the bid and the Estimated Power Cost for
the remaining Estimated Unmet District Load, is less costly than the Estimated
District Power Cost set forth in the pro forma statement as determined by the
District, the District may either: (i) acquire from the Purchaser the capacity
and energy offered, and use the bid price in the calculation of the Estimated
District Power Costs for the Estimated Unmet District load so served; or (ii)
substitute the bid price for the portion of the Estimated Unmet District Load
that could have been served with the capacity and energy so bid in the
calculation of Estimated District Power Costs.

(5) The estimated Reasonable Portion Proceeds.

(d) Subject to Section 8, in those Contract Years when the District has
Estimated District Power Costs as determined pursuant to Section 4(c)(4), the
District shall be entitled to and shall take from the actual Reasonable Portion
Proceeds the Estimated District Power Costs calculated pursuant to Section
4(c)(4).

(e) Subject to Section 8, the Purchaser shall have available the capacity and
energy purchased pursuant to Section 3(c) with an amount equal to the actual
Reasonable Portion Proceeds received by the District, minus the Estimated
District Power Costs as calculated in Section 4(c)(4), multiplied by the
Purchaser Revenue Allocation; provided, however, if the Purchaser has elected to
receive cash rather than capacity and energy, Purchaser shall be entitled to
receive in cash an amount equal to the actual Reasonable Portion Proceeds
received by the District, minus the Estimated District Power Costs as calculated
in Section 4(c)(4), multiplied by the Purchaser Revenue Allocation.

(f) The Purchaser Revenue Allocation of the Reasonable Portion Proceeds
available to Purchaser may be reduced if the District does not obtain an Annual
FERC License or New FERC License, and under any of the following conditions as
determined by the District:

(1) Pursuant to Section 4.

(2) If the District is unable to produce the Reasonable Portion due to
Uncontrollable Forces.

(3) If failure to reduce deliveries of the Reasonable Portion would result in
exceeding the capability of the Priest Rapids Project or subject it or its
operation to undue hazard or violate the FERC License, any applicable law,
regulation, or Operating Agreement.

(4) In case of emergencies or in order to install equipment in, make repairs to
make betterments, renewals, replacements, and additions to ("Improvements"),
investigations and inspections of, or perform other maintenance work on the
Priest Rapids Project.

  The District will use its reasonable efforts to give advance notice to the
Purchaser regarding any planned interruption or reduction, giving the reason
therefor and stating the probable duration thereof.

(g) Notwithstanding any other Section of this contract, if the Priest Rapids
Project is capable of producing Priest Rapids Project Output, but the Purchaser
Revenue Allocation of the Reasonable Portion Proceeds to be made available to
the Purchaser is projected to be zero for a Contract Year, the Purchaser may
give the District written notice, no later than 100 days after the start of the
Contract Year, that the Purchaser elects to terminate this contract. In such
event, this contract shall terminate effective upon receipt of such written
notice by the District.

SECTION 5. ANNUAL POWER COSTS.

(a) "Annual Power Costs" as used in this contract shall include, for the Priest
Rapids Development beginning November 1, 2005 and for the Priest Rapids Project
beginning November 1, 2009, all of the District's costs and expenses of every
type, both direct and indirect, resulting from the ownership, operation,
maintenance of and Improvements that are incurred or paid by the District during
each Contract Year and that are incurred consistent with Prudent Utility
Practice. Such costs and expenses shall for any Contract Year include, but not
be limited to the following, in each case without duplication:

(1) All operations costs, maintenance costs, administrative costs, taxes, in
lieu of tax payments relating to production and delivery of Priest Rapids
Project Output (excluding depreciation) including, but not limited to, those
specified in the Uniform System of Accounts as prescribed by the FERC for
electric utilities and licensees.

(2) Amounts that the District determines are needed to pay for the prevention or
correction of any loss or damage and for Improvements to keep the Priest Rapids
Project in good operating condition. Subject to Section 23, the Purchaser agrees
that the District shall have the solo right to determine what costs end expenses
shall be incurred in connection with the ownership, operation, and maintenance
of and Improvements to the Priest Rapids Project.

(3) Subject to Section 5(e), interest that accrues and is payable into the debt
service fund with respect to outstanding Debt; principal that accrues and is
payable into the debt service fund with respect to outstanding Debt, whether at
maturity or by reason of redemption (including premiums for redeeming Debt prior
to its scheduled maturity), amounts required to restore any reserve accounts
maintained to secure Debt to the level required by the resolution authorizing
the Debt and Financing Costs. "Financing Costs" include, but are not limited to,
discounts, insurance premiums, letter of credit fees, costs of hedging interest
rates, costs of compliance with disclosure requirements, legal and bond counsel
fees, independent auditors, printing, financial advisor, bond registrar and
trustee costs.

(4) Subject to Section 5(e), costs of creating and replenishing any reserve or
contingency fund required to be maintained by any Bond Resolutions and working
capital funds.

(5) Any liability or cost, including settlements and judgments, incurred as a
result of or related to the ownership, operation or maintenance of the Priest
Rapids Project and not covered by insurance.

(6) Costs incurred by the District in applying for a New FERC License as
recorded on the District's books of account for the Priest Rapids Project
(account number 183090), including but not limited to those costs and interest
expenses incurred before November 1, 2005 (“New FERC License Costs”). New FERC
License Costs incurred prior to November 1, 2005 will be recovered uniformly
over a 15-year amortization period commencing with the Contract Year starting on
January 1, 2006. The estimated New FERC License Costs incurred by the District
after November 1, 2005 will be included in Annual Power Costs. In the event of
termination of this contract for any reason subsequent to the effective date of
the New FERC License, the Purchaser shall pay the District an amount equal to
the unrecovered New FERC License Costs multiplied by the Purchaser Power
Allocation at the time of termination. In the event of termination of this
contract for any reason prior to the effective date of the New FERC License,
Purchaser shall have no liability for unrecovered New FERC License Costs.

(7) Obligations entered into by the District as part of its effort to obtain a
New FERC License, including but not limited to the cost of replacing Priest
Rapids Project Products that maybe committed in such obligations.

(8) Costs incurred by the District to fulfill obligations, if any, to parties to
the 1956 and 1959 Contracts who do not sign this contract, as such costs are
required or approved by a court, or reasonably approved by the District after
notice to the Purchaser.

(9) An amount equal to 15% of debt service in that Contract Year or such higher
amount as may be required by a Bond Resolution ("Coverage Requirement").

(b) The District shall credit against Annual Power Costs the following:

(1) Any insurance or other proceeds received by the District as reimbursement
for damages, losses, costs or expenses included in the Annual Power Costs, and
any insurance or other proceeds received as a result of the interruption or
reduction of Priest Rapids Project Output.

(2) Revenue, if any, received from obligations entered into by the District as
part of its effort to obtain a New FERC License.

(3) Revenue, if any, received as a result of the District fulfilling obligations
to parties to the 1956 or 1959 Contracts that do not sign this contract,
pursuant to Section (l)(b) of those contracts, excluding revenue required to be
paid pursuant to the 1959 Contract.

(4) The Coverage Requirement, to the extent that it is not expended during a
Contract Year for capital or other costs of the Priest Rapids Project (the
amount not spent shall be credited against Annual Power Costs for the following
Contract Year).

(5) Interest earnings on funds of the Priest Rapids Project that are not
required to be retained by such fund by a Bond Resolution.

(c) Costs directly or indirectly associated with the District's Electric System
or any other separate system of the District shall not be part of Annual Power
Costs other than the payment of Debt held by the Electric System.

(d) Any payment received by the District as a result of the taking of the whole
or any portion of the Priest Rapids Project Output by any state or federal
government agency shall be used by the District to credit Annual Power Costs or
to retire, at or prior to maturity, Debt, whichever shall be proper under the
circumstances existing at the time of the taking.

(e) The Purchaser agrees that the District shall have the sole discretion to
determine what portion, if any, of the Priest Rapid Project financing will be
accomplished by issuance of Debt and the terms and covenants of any Debt.

(1) To the extent that the District makes Improvements to the Priest Rapids
Project that are not financed by Debt proceeds, Annual Power Costs will include
a cost as determined by the following: the District shall determine all of the
Improvements anticipated for the Priest Rapids Project for the Contract Year and
the District shall estimate the weighted average economic service life of the
Improvements, and shall calculate a weighted average market interest rate
assuming the District were to issue Debt to finance such Improvements, both as
reasonably determined by the District. Based on such calculations the District
shall include in Annual Power Costs an amount sufficient to amortize the costs
(including both interest and principal pursuant to this Section 5(e)(1)) of such
Improvements on a level basis over a period equal to the estimated weighted
average economic service life of the Improvements. The amortization period for
any Improvements shall not exceed 30 years and land shall be deemed to have a
service life of 30 years. The District may adjust prospectively the amortization
of any Improvements to reflect the actual costs of such Improvements, to correct
any error in computation or to reflect a material change in the District's
estimate of the average economic life of the Improvements. The District shall
not be required to amortize capital expenditures that are estimated to cost
below the amount that in accordance with the District's capitalization policy
are not required to be capitalized and may include such costs in Annual Power
Costs.

(2) To the extent that the District issues Debt (i) with a final maturity that
is not earlier than the expiration of the estimated weighted average service
life of the Improvements, to be financed with the Debt and (ii) the total annual
amounts required for the payment of interest, principal and sinking fund
requirements of such Debt when due in a Contract Year do not vary by more than
10% from those required in any other Contract Year, then Annual Power Costs
shall include the actual principal and sinking fund requirements that accrues
and is payable into the debt service fund for that Debt for the Contract Year.
To the extent that the District issues Debt that does not meet the requirements
of (i) and (ii) in the prior sentence, then Annual Power Costs will include,
with respect to such Debt, an amount as determined by the District as of the
date of issuance of the Debt, sufficient to amortize the original principal
amount of such Debt on a level debt service basis over a period equal to the
estimated weighted average economic service life of the Improvements financed or
refinanced by such Debt, commencing on the later of (a) the date of issuance of
the Debt or (b) the in service date of such Improvements, and based on an
interest rate equal to, at the election of the District, either (i) the weighted
average interest rate of the Debt or (ii) the weighted average market rate at
the time of issuance of the Debt for debt with similar terms and borrowers
similar to the District, as reasonably determined by the District. The
amortization period for any Debt shall not exceed 30 years, land shall be deemed
to have an economic useful life of 30 years, and any Debt proceeds deposited
into a reserve account shall be credited against Annual Power Cost in the final
year of the Debt. The District may adjust prospectively the amortization of the
principal amount of any Debt to correct any error in computation or to reflect a
material change in the District's reasonable estimate of the in service date or
the average economic life of the Improvements.

(3) To the extent that the District creates or replenishes reserve and
contingency funds required by Bond Resolutions or working capital funds that are
not financed by Debt proceeds, Annual Power Costs will include a cost determined
in a manner analogous to the calculation in Section 5(e)(2) with such amounts
amortized over 15 years. Upon termination of this contract, any such funds will
belong to the District.

(f) On or prior to July 31st of each year, for budgetary purposes only and not
for determining Priest Rapids Project Products or Purchaser's payment
obligations under this contract, the District shall provide the Purchaser a pro
forma budget showing an estimate of Annual Power Costs, Priest Rapids Project
Output, Purchaser Revenue Allocation and Estimated District Loads for the
following Contract Year.

SECTION 6. PAYMENT FOR PRIEST RAPIDS PROJECT PURCHASER REVENUE ALLOCATION.

(a) On or before 30 days prior to the beginning of each Contract Year beginning
in 2005, the District shall prepare and mail the Purchaser a pro forma statement
for the next Contract Year showing:

(1) An estimate of Annual Power Costs specifically assigned to the Purchaser.
Specific assignment shall occur whenever a Purchaser or a group of Purchasers
cause identifiable costs to be placed on the Priest Rapids Project.

(2) A detailed estimate of the Annual Power Costs, less those costs specifically
assigned in Section 6(a)(1), for the Contract Year.

(3) An estimate of the cost to the Purchaser attributable to the Purchaser
Revenue Allocation of the costs of the Reasonable Portion, which shall be an
amount equal to the product of the Reasonable Portion and the Annual Power Costs
from Section 6(a)(2) multiplied by the ratio of the estimated Reasonable Portion
Proceeds to be received by the Purchaser calculated pursuant to Section 4(e) to
the estimated total Reasonable Portion Proceeds from Section 4(c)(5).

(4) An estimate of the cost of purchasing capacity and energy with the Purchaser
Revenue Allocation of the Reasonable Portion Proceeds pursuant to Section 3(c).

(5) The sum of amounts (expressed in dollars) calculated pursuant to Sections
6(a)(1), (3), and (4), hereinafter referred to as the "Purchaser Estimated
Cost."

(6) The amount of the monthly payments to be made by the Purchaser to pay the
Purchaser Estimated Cost during the next Contract Year.

(b) The pro forma statement provided pursuant to Section 6(a) shall be in lieu
of the issuance of monthly bills to the Purchaser by the District, and the
Purchaser shall be obligated to pay the monthly amounts contained therein in
accordance with this Section 6.

(c) In the event of receipts or payments substantially affecting the Annual
Power Costs during any Contract Year, the District shall prepare and mail to the
Purchaser a revised statement of estimated Annual Power Costs and Purchaser
Estimated Cost, which revised statement shall supersede any previous statement
or revised statement, and the Purchaser shall be obligated to make monthly
payments set forth on such revised statement for the balance of the Contract
Year.

(d) Purchaser Estimated Cost shall continue to accrue and the Purchaser shall
make payment for the same up to the time of termination of this contract for
whatever reason, irrespective of the condition of the Priest Rapids Project and
whether or not it is capable of producing Priest Rapids Project Output, the
Reasonable Portion or the Purchaser Revenue Allocation of the Reasonable Portion
Proceeds. If the Priest Rapids Project is not capable of producing Priest Rapids
Project Output then the Purchaser Estimated Cost will be based on Priest Rapids
Project Output in the last full year of operation. In this event, at the request
of the Purchaser, the District will makes its reasonable best efforts to acquire
replacement Priest Rapids Products the cost of which will be added to the
Purchaser Estimated Cost.

(e) The monthly payments of Purchaser Estimated Costs set forth in the statement
or revised statement shall be due and payable by electronic funds transfer to
the District's account, designated in writing by the District, on the 20th
calendar day of each month.

(f) If payment in full of any monthly payment amount set forth on a statement or
revised statement is not received by the District on or before the close of
business on the 20th day of the month, a delayed payment charge of 2% of the
unpaid amount due will be made. Any bill which remains unpaid for more than 30
days after the due date shall, in addition to the delayed payment charge, accrue
interest at the lesser of 1.5% per month or the maximum rate allowed by law. If
the 20th calendar day of the month is a Saturday, Sunday or a District
recognized holiday, the next following business day shall be the last day on
which payment may be received without the addition of the delayed-payment
charge. Additionally, if payment due to the District under this Section 6
remains unpaid 30 days after the due date, the District may thereafter suspend
payment of the Purchaser Revenue Allocation to the Purchaser which would
otherwise occur until payment in full of all amounts due and owing (including
any interest and delay charges) is received by the District.

(g) On or before 150 days after the end of each Contract Year, the District will
submit to the Purchaser a detailed statement of the Purchaser Estimated Cost and
the Purchaser Actual Cost for the Contract Year. Purchaser Actual Cost on such
statement shall be calculated in the same manner as Purchaser Estimated Cost as
set forth in Sections 6(a)(1)-(5) but using the actual costs incurred by the
District in the preceding Contract Year; provided, however, that the estimated
values calculated pursuant to Sections 4(c)(1)-(2) and 4(c)(5) shall not be
modified. If the Purchaser Actual Costs exceed the Purchaser Estimated Costs on
such statement ("Excess Costs"), the District shall bill the Purchaser for an
amount equal to such Excess Costs, and the Purchaser shall pay such bill within
30 days or be subject to the delayed-payment and interest charges as provided in
Section 6(f). If the Purchaser Actual Costs are less than the Purchaser
Estimated Costs, or if credits are due pursuant to Section 5(b) or both (“Refund
Costs”), the District shall give credit to the Purchaser against the Purchaser
Estimated Costs for the current Contract Year in an amount equal to such Refund
Costs; provided, that if Refund Costs are due to Purchaser following the
expiration of this contract, the District shall make a cash refund of such
amount to the Purchaser.

(h) The District may use any payments received from the Purchaser under this
contract in any manner that the District, in its sole discretion, shall
determine. The District agrees to pay or cause to be paid for the Priest Rapids
Project from lawfully available money of the District, including payments from
the Purchaser and other Purchasers, all the operating costs, taxes and
assessments, capital expenditures, payments required for Debt and other costs of
the Priest Rapids Project. If the District issues tax-exempt Debt based on the
governmental use of the Priest Rapids Project Output by the Purchaser, the
Purchaser covenants that it shall not use any Priest Rapids Project Output in a
manner, or take any other action, that will or is likely to adversely affect the
tax-exempt status of any Debt.

SECTION 7. SUPPORT AND COOPERATION.

(a) The District shall make application and use reasonable efforts to obtain a
New FERC License and obtain FERC approval of this contract, if required. The
District reserves the right to determine when such applications should be made.

(b) In accordance with FERC direction contained in the PL 83-544 Orders, the
District commits to providing the Eligible Purchasers with a meaningful priority
in the sale of the Reasonable Portion.

(c) Purchasers may also participate in the development by the District of a
proposed Marketing Plan. This Marketing Plan will be submitted to FERC for
approval as part of the relicensing process application; provided, however, that
nothing in this Section shall be construed as compelling the Purchaser to
comment on or refrain from commenting on the Marketing Plan.

(d) Purchaser covenants that it shall provide reasonable support, cooperation
and assistance to the District in the District's acquisition of a New and Annual
FERC License, any necessary federal, state or local permits relating to the
Priest Rapids Project, FERC approval of this contract, if FERC approval is
requested by the District; provided, however, that nothing in this contract
shall preclude the Purchaser from filing comments with FERC to protect the
Purchaser's economic benefits provided by this contract.

(e) In the event that the District believes that the Purchaser has violated any
of the above covenants of Section 7(d), the District may by written notice to
the Purchaser describe the alleged violation in reasonable detail and give the
Purchaser no less than 10 business days within which to cease the activity in
question or to provide to the District a written explanation as to why the
Purchaser believes the activity does not constitute a violation of any of the
aforementioned covenants. If the Purchaser does not cure the alleged default and
the District continues to consider the action to be in breach of the covenants,
the matter shall be resolved pursuant to arbitration conducted under Section 23.
If the Purchaser is determined to be in breach of the covenants, the District
shall have the right to terminate this contract effective immediately upon
written notice to the Purchaser, without any liability or further obligation on
the part of the District. In the event of such termination, the District shall
have the right to use or sell in any manner the District determines, the
Purchaser Revenue Allocation the Purchaser would have been otherwise entitled to
under this contract.

(f) Purchaser covenants that it shall refrain from filing or supporting any FERC
license application for the Priest Rapids Project other than that filed by the
District and refrain from filing or supporting any effort that would lead to
modification of the FERC decisions on Public Law 83-544 contained in the PL
83-544 Orders, unless such a request or petition is filed by the District and
the Purchaser agrees with that request or petition. For purposes of this Section
7(f), “refrain from supporting” means prepare no documents, submit no testimony,
sign no other agreement or contract other than this contract for Priest Rapids
Project Output or for other products or that is contingent upon a party other
than the District receiving a license from FERC to operate the Priest Rapids
Project, engage in no lobbying and provide no funding.

(g) The Purchaser covenants that it will not take any action which, in the
opinion of a neutral third party, would likely be construed as: (i) having a
material adverse effect on the District's ability to obtain an Annual FERC
License or a New FERC License or on the anticipated economic benefits of this
contract or (ii) constituting a judicial challenge to the authority of the
District or the Purchaser to enter into and implement the provisions of this
contract. This covenant does not apply to anticipated economic benefits under
other agreements between the District and third parties, such as with the
Bonneville Power Administration.

(h) In the event that the District believes that the Purchaser has violated any
of the above covenants of Section 7(f) or (g), the District may by written
notice to the Purchaser describe the alleged violation in reasonable detail and
give the Purchaser no less than 4 business days after receipt of such written
notice by Purchaser within which to cease the activity in question or to provide
to the District a written explanation as to why the Purchaser believes the
activity does not constitute a violation of any of the aforementioned covenants.
If the Purchaser does not cure the alleged default and the District continues to
reasonably consider the action to be in breach of the covenants, the District
shall have the right to terminate this contract and the 1956 and 1959 Contracts,
effective immediately upon written notice to the Purchaser, without any
liability or further obligation on the part of the District. In the event of
such termination, the District shall have the right to use or sell, in any
manner the District determines, the Purchaser Revenue Allocation the Purchaser
would have been otherwise entitled to under this contract and any output from
the Priest Rapids Project under the 1956 or 1959 Contracts.

SECTION 8. PAYMENT OF THE REASONABLE PORTION PROCEEDS.

(a) The Purchaser Revenue Allocation of the Reasonable Portion Proceeds shall be
paid to the Purchaser monthly, as follows:

(1) The monthly payment to the Purchaser shall be the product of the Purchaser
Revenue Allocation and the difference between the actual monthly payments of the
Reasonable Portion Proceeds received by the District and the monthly Estimated
District Power Costs pursuant to Section 4(c)(4); provided, however, if the
Purchaser has elected to have the District make purchases of capacity and energy
under a supplementary agreement pursuant to Section 3(c), then Purchaser will
receive such capacity and energy in lieu of the proceeds described in this
Section 8(a)(l). Nothing in this Section 8(a)(1) will result in a negative
payment or a bill to the Purchaser when such Estimated District Power Costs
exceed the actual monthly Reasonable Portion Proceeds received by the District.

(2) Payments due from the District to Purchaser pursuant to Section 8(a)(1)
shall be made in accordance with the provisions of Section 6, and such payment
shall be due not later than the 20th calendar day of each month.

(3) During the term of this contract, the District may be entitled to take
during a Contract Year all of the Reasonable Portion Proceeds pursuant to
Section 4(d) resulting in a zero payment to purchaser ("Zero Year"). If in any
Zero Year the District has in place one or more multiple year contracts, the
terms of which include or span the Zero Year (“Mu1ti-Year Contracts”), then the
payments to the Purchaser from such Multi-Year Contracts included in the
calculations performed pursuant to Section 4(e) shall be proportional to the
annual market price of power as forecast at the time the Multi-Year Contracts
were agreed to by the District.

(4) If in any month the Estimated District Power Costs from Section 4(c)(4)
exceed the actual Reasonable Portion Proceeds received in such month ("Estimated
Power Cost Shortfall"), the Estimated Power Cost Shortfall shall be carried
forward to the next month or months remaining in the Contract Year in which such
Estimated Power Cost Shortfall occurred until paid in full from the Reasonable
Portion Proceeds received by the District.

SECTION 9. INFORMATION TO BE MADE AVAILABLE TO THE PURCHASER.

(a) The District agrees to keep records of the Priest Rapids Project in
accordance with the Uniform System of Accounts as prescribed by FERC for
electric utilities and licensees; provided, if there are inconsistencies between
the Uniform System of Accounts and this contract, this contract shall control.
The Purchaser, upon at least 30 days advance written notice to the District,
shall have the right to audit or examine operating and financial records
relating to the Priest Rapids Project during the District's normal business
hours. To the extent practicable, the Purchasers shall conduct any such audit or
examination jointly to minimize the disruption to the District's business
operations. All costs incurred by the District associated with such audit,
including, but not limited to, District labor, materials and reproduction
services shall be billed to the Purchaser, and shall be promptly reimbursed by
the Purchaser in accordance with Section 6(e).

(b) Upon request, any audit reports of the Priest Rapids Project by a firm of
certified public accountants employed by the District or by the State Auditor's
Office of the State of Washington will be provided to the Purchaser.

(c) Policies of insurance carried by the District pursuant to Section 10 shall
be available at the office of the District for inspection by the Purchaser.

(d) The Purchaser's representatives shall at all times be given reasonable
access to the Priest Rapids Project, subject to the District's applicable safety
rules and regulations.

(e) Upon request, the Purchaser may obtain information to document the
capability of the Priest Rapids Project to produce Priest Rapids Project Output.

SECTION 10. INSURANCE.

The District shall have the right to self-insure and/or obtain and maintain
insurance with policies payable to the District for the following coverage:

(a) Obligations of the District under any state or federa1 Workmen's
Compensation laws or other, employer's liability;

(b) Public liability for bodily injury and property damage;

(c) Physical loss or damage to the Priest Rapids Project on a replacement cost
basis; and

(d) Any other insurance determined to be necessary.

SECTION 11. PROJECT INTEGRATION.

(a) It is the intention of the Parties hereto that the operation of the Priest
Rapids Project shall be integrated and that all benefits accruing as a result of
such integration shall be shared equally by the Priest Rapids and Wanapum
Developments. It is also agreed that before November 1, 2009 and after such date
if required by any Bond Resolution, all joint costs of the Priest Rapids and
Wanapum Developments shall be equitably allocated between them as determined by
the District.

(b) The Parties agree that any compensation (whether energy or money) due or
which may become due the owner of the Rock Island Hydroelectric Project because
of encroachment by the Priest Rapids Project after November 1, 2009 on the Rock
Island Hydroelectric Project will either proportionately reduce the amount of
Priest Rapids Project Output or be included in Annual Power Costs, as
appropriate, but shall not reduce the amount required to be paid by the
Purchaser under Sections 5 and 6. "Rock Island Hydroelectric Project" shall mean
the FERC Hydroelectric Project No. 943 currently operated by Public Utility
District No. 1 of Chelan County, Washington.

SECTION 12. LIABILITY OF PARTIES.

(a) Except as otherwise provided in this contract, each Party hereby releases
the other Party and its commissioners, officers, directors, agents and employees
from any claim for loss or damage arising out of the ownership, operation, and
maintenance of the Priest Rapids Project including any loss of profits or
revenues, loss of use of power system, cost of capital, cost of purchased or
replacement power, other substantially similar liability or other direct or
indirect consequential loss or damage, except as provided in the Agreement
Limiting Liability Among Western Interconnected Systems for parties to that
agreement. This release shall not include any claim by the Purchaser for refunds
for over-payments made to the District nor any claim for specific performance of
the District's obligation to deliver to the Purchaser during the term of this
contract the Purchaser Revenue Allocation to which the Purchaser is entitled
under this contract.

(b) The Purchaser shall have no claim of any type or right of action against the
District: (i) as a result of a FERC or court order or amendment described in
Section 3(h); (ii) as a result of the failure to receive an Annual FERC License
or a New FERC license or the adjustment of delivery of Priest Rapids Products
pursuant to Section 4(f) whether arising under the terms of this contract or
otherwise; or (iii) as a result of the District's purchasing power or energy on
behalf of the Purchaser pursuant to Sections 3(c), and the Purchaser hereby
releases the District and its commissioners, officers, agents and employees from
any claim for loss or damage arising out of the events described in this
paragraph.

SECTION 13. NOTICES AND COMPUTATION OF TIME.

Any notice or demand, except those provided for in Section 6, by the Purchaser
under this contract to the District shall be deemed properly given if mailed
postage prepaid and addressed to Manager, Public Utility District No. 2 of Grant
County, Box 878, Ephrata Washington 98823; any notice or demand by the District
to the Purchaser under this contract shall be deemed properly given if mailed
postage prepaid and addressed to the Purchaser:

  PUGET SOUND ENERGY, INC.
ATTENTION, VICE PRESIDENT, ENERGY SUPPLY
ONE BELLEVUE CENTER BUILDING
411 108TH AVENUE, 15TH FLOOR
BELLEVUE, WA 98004-5515

In computing any period of time from such notice, such period shall commence at
12:00 A.M. (midnight) on the date mailed. The designations of the name and
address to which any such notice or demand is directed may be changed at any
time by either Party giving notice as provided above.

SECTION 14. DISTRICT'S BOND RESOLUTIONS AND LICENSE.

It is recognized by the Parties that the District, in its operation of the
Priest Rapids Project, must comply with the requirements of the Bond Resolution
and with the FERC License together with amendments thereof from time to time
made, and the District is hereby authorized to take such actions as the District
determines are necessary and appropriate to comply with such Bond Resolution and
FERC License.

SECTION 15. GOVERNING LAW.

The Parties agree that the laws of the State of Washington shall govern this
contract.

SECTION 16. ASSIGNMENT OF CONTRACT.

Neither the Purchaser nor the District shall by contract, operation of law or
otherwise, assign this contract or any right or interest in this contract
without the prior written consent of the other Party, which shall not be
unreasonably withheld; provided, however, a Party may, without the consent of
the other Party (and without relieving itself from liability hereunder): (i)
transfer or assign this contract to an affiliate of the Party provided that the
affiliate's creditworthiness is equal or higher than that of the Party; or (ii)
transfer or assign this contract to any person or entity succeeding to all or
substantially all of the distribution and generating facilities of the Party
whose creditworthiness is equal or higher than that of the Party; provided,
however, that in each such case, any such assignee shall agree in writing to be
bound by the terms and conditions in this contract and the transferring Party
shall deliver such tax and enforceability assurance as the other Party may
reasonably request.

SECTION 17. REMEDIES ON DEFAULT.

(a) "Act of Default shall mean:

(1) The failure of a Party to make, when due, any payment required under this
contract if such failure is not remedied within three days after written notice,
provided that the payment is not the subject of a good faith dispute pursuant to
Section 23. If requested by the District, the Purchaser shall deposit the
disputed amount in escrow with a bank acceptable to the Parties.

(2) Any representation or warranty in this contract is false or misleading in
any material respect when made or ceases to remain true during the term of this
contract.

(3) The failure of the Purchaser, after Section 7 or any provision thereof has
been found by a court to be void, unlawful or unenforceable, to perform in
accordance with the provisions of Section 7, including without limitation my
provision or provisions found to be void, unlawful or unenforceable.

(4) A Party shall make an assignment or any general arrangement for the benefit
of creditors; file a petition or otherwise commence or acquiesce in the
commencement of a proceeding, under any bankruptcy or similar law for the
protection of creditors; or otherwise becomes bankrupt or insolvent or unable to
pay its debts as they fall due.

(b) If a Party commits an Act of Default during the term of this contract, the
non-defaulting Party may take any one or more of the following remedial steps:

(1) Take any action or exercise any remedy provided to the Party under the
provisions of Sections 6 or 7.

(2) Except where a different time period is set forth herein, if the defaulting
Party fails to remedy an Act of Default within ten days after receiving written
notification of the default, then the non-defaulting Party may give a written
notice of termination of this contract on a date specified in such notice, which
date shall be not less than 30 days after the date of such notice. If the
Purchaser is given written notice as provided herein, this contract shall
terminate upon the date specified in such notice, the Purchaser thereafter shall
have no right, title, or interest in, to, or with respect to the Priest Rapids
Project, or any Purchaser Revenue Allocation, or any Priest Rapids Project
Output, but the Purchaser shall remain liable for all amounts due the District
which have accrued prior to the date of termination.

(3) The District may, prior to the termination of this contract pursuant to
Section 17(b)(2), at any time suspend any and all rights of the Purchaser to the
Purchaser Revenue Allocation upon not less than five days' notice to the
Purchaser. The District may, without further notice to the Purchaser, grant any
or all of such suspended rights to any person or entity for the duration of the
suspension. In such event, the Purchaser shall, in addition to its other
obligations under this contract, upon demand, pay to the District all expenses
and any losses incurred in connection with such suspension and any grant of the
suspended rights to another person or entity. No suspension of any or all of the
rights of the Purchaser Revenue Allocation shall be construed as an election to
terminate the interests of the Purchaser in, to, and under this contract unless
a written notice of termination is given to the Purchaser pursuant to this
contract or unless such termination be decreed by a court of competent
jurisdiction.

(4) The non-defaulting Party may begin and maintain successive proceedings
against the defaulting Party for the recovery of damages or for a sum equal to
any and all payments required to be made pursuant to this contract.

(5) A Party may take whatever action at law or in equity as may appear necessary
or desirable to collect the amounts payable by the defaulting Party under this
contract then due and thereafter to become due, or to enforce performance and
observation of any obligation, agreement or covenant of the defaulting Party
under this contract.

(6) No right or remedy conferred upon or reserved to a Party is intended to be
exclusive of any other right or remedy, and each and every right and remedy
shall be cumulative and in addition to any other right or remedy given
hereunder, or now or hereafter legally existing, upon the occurrence of any Act
of Default. Failure of the District to insist at any time on the strict
observance or performance by the Purchaser of any of the provisions of this
contract, or to exercise any right or remedy provided for in this contract shall
not impair any such right or remedy nor be construed as a waiver or
relinquishment thereof for the future. Receipt by the District of any payment
required to be made hereunder with knowledge of the breach of any provisions of
this contract shall not be deemed a waiver of such breach. In addition to all
other remedies provided in this contract, the District shall be entitled, to the
extent permitted by applicable law, to injunctive relief in case of the
violation, or attempted or threatened violation, of any of the provisions of
this contract, or to a decree requiring performance of any of the provisions of
this contract or to any other remedy legally allowed to the District.

(7) The District shall not have the right to accelerate future payment
obligations of the Purchaser in the event of default under this contract.

SECTION 18. VENUE AND ATTORNEY FEES.

Venue of any action filed to enforce or interpret the provisions of this
contract shall be exclusively in the United States District Court for the
Eastern District of Washington or the Superior Court of the State of Washington
for Grant County and the Parties irrevocably submit to the jurisdiction of any
such court. In the event of litigation to enforce the provisions of this
contract, the prevailing Party shall be entitled to reasonable attorney's fees
in addition to any other relief allowed.

SECTION 19. COMPLIANCE WITH LAW.

The Parties shall conform to and comply with all laws, rules, regulations,
license conditions or restrictions promulgated by the FERC or any other
governmental agency or entity having jurisdiction over the Priest Rapids
Project. The Purchaser shall cooperate and take whatever action is necessary to
cooperate fully with the District in meeting such requirements. Obligations of
the District contained in this contract are hereby expressly made subordinate
and subject to such compliance.

SECTION 20. HEADINGS.

The headings of sections and paragraphs of this contract are for convenience of
reference only and are not intended to restrict, affect or be of any weight in
the interpretation or construction of the provisions of such sections and
paragraphs.

SECTION 21. ENTIRE AGREEMENT; MODIFICATION; CONFLICT IN PRECEDENCE.

This contract does not modify the terms and conditions contained in the 1956 and
1959 Contracts except as provided in Sections 1(b) and 7. This contract
constitutes the entire agreement between the Parties with respect to the subject
matter of this contract, and supersedes all previous communications between the
Parties, either verbal or written, with respect to such subject matter. No
modifications of this contract shall be binding upon the Parties unless such
modifications are in writing signed by each Party. To the extent there are any
conflicting provisions between this contract and the 1956 Contract, or this
contract and the 1959 Contract after November 1, 2009, the terms and conditions
in this contract shall take precedence and be controlling and the 1956 and 1959
Contracts are hereby amended accordingly.

SECTION 22. NO PARTNERSHIP OR THIRD PARTY RIGHTS.

(a) This contract shall not be interpreted or construed to create an
association, joint venture or partnership between the Parties, or to impose any
partnership obligations or liability upon any Party. Without limiting the
foregoing, the Purchaser shall not be liable for, and the District hereby
releases the Purchaser from, the payment of Debt except as provided in Sections
5 and 6.

(b) This contract shall not be construed to create rights in or grant remedies
to any third party as a beneficiary of this contract.

SECTION 23. PURCHASERS' COMMITTEE; ARBITRATION.

(a) There is hereby established a Purchasers' committee (the "Committee"). Each
Purchaser may appoint one representative (and one alternate) as a Committee
member to attend Committee meetings. The members of the Committee shall elect a
chair, and may adopt such rules for the conduct of business as it deems
appropriate. Meetings between the District and Purchasers shall be held
routinely, but not more frequently than once a quarter, provided, however, that
such meetings may be held more frequently than once each quarter at the request
of the District or upon the request of members of the Committee whose Purchaser
Revenue Allocations total 66% or more. All meetings between the District and
Purchaser will be held in Grant County, Washington, unless the District and the
Purchasers agree to another location.

(b) In addition to other matters subject to arbitration pursuant to other
provisions of this contract, if approved by members of the Committee whose
Purchaser Revenue Allocations total 66% or more, the Committee may submit to
binding arbitration the following issues:

(1) Have the Estimated District Loads been forecast in accordance with Prudent
Utility Practice and, if not, what is the appropriate Estimated District Loads
in accordance with Prudent Utility Practice for the Contract Year?

(2) Have the Annual Power Costs been determined by the District in accordance
with Prudent Utility Practice and have such costs been incurred for the benefit
of Priest Rapids Project Output and, if not, what are the appropriate Annual
Power Costs in accordance with Prudent Utility Practice for the Contract Year;
provided that nothing in this Section shall be interpreted to limit the ability
of the District to meet its payment obligations under a Bond Resolution?

(3) What modifications to this contract, pursuant to Section 3(h), are necessary
to comply with FERC or court orders and to preserve the basic benefits and
obligations of the Parties?

(4) Has the Purchaser violated the covenants in Section 7(e)?

(5) Are the annual proceeds from the sales of the Reasonable Portion pursuant to
Multi-Year Contracts proportional to the annual market price of power, as
forecast at the time the Multi-Year Contracts were agreed to by the District,
and if not, what adjustments are necessary to the payments to Purchaser pursuant
to Section 4(e) to reflect such forecast annual market price of power for sales
made pursuant to such Multi-Year Contracts?

(c) The board of arbitrators shall be composed of three persons, one of whom
shall be appointed by the District, one of whom shall be appointed by majority
vote of the Committee, and the third person to be appointed by the two persons
so appointed. The District and the Committee shall appoint their arbitrator
within 15 days after notification of the Committee's vote to submit a matter to
binding arbitration. In the event the two members cannot agree upon the
appointment of a third person within 10 days, then such third person shall be
appointed by the presiding judge of the Superior Court of Kittitas County,
Washington. The arbitration shall be conducted jointly by the participating
Purchasers, and under rules as may be determined by the arbitrators; provided,
however, that all parties shall be afforded discovery consistent with the
Federal Rules of Civil Procedure; and, provided further, if the arbitrators do
not unanimously agree on the rules governing the arbitration, the arbitration
shall be conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. The board so designated shall conduct a
hearing within 30 days of completion of their selection, and within 15 days
after the hearing (unless such time is extended by agreement of the Parties)
shall notify the Parties of their decision in writing, stating the reasons
therefore and separately listing their findings of fact, conclusions of law and
order. Insofar as the Parties hereto may legally do so, they agree to abide by
the decision of the board. All factual determinations made by the board shall be
conclusive and binding on the Parties and not subject to judicial review. Any
conclusions of law made by the board shall be subject to review by a court
specified in Section 23; provided, that the order issued by the board shall be
effective unless and until a stay is issued by the board or such court suspends
the effectiveness of the order.

SECTION 24. REPRESENTATIONS AND WARRANTIES.

Each Party represents and warrants to the other Party that:

(a) It is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its formation.

(b) The execution, delivery and performance of this contract are within its
powers, have been duly authorized by all necessary action and do not violate any
of the terms and conditions in its governing documents, any contracts to which
it is a party or any law, rule, regulation, or order applicable to it.

(c) This contract constitutes a legally valid and binding obligation enforceable
against it in accordance with its terms, subject to equitable defenses and
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally.

SECTION 25. COUNTERPARTS.

This contract may be executed in counterpart, each of which shall be an original
and all of which shall constitute the same contract.

  PUBLIC UTILITY DISTRICT NO. 2
OF GRANT COUNTY, WASHINGTON

  By:

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

  Mike Conley

(SEAL) President, Board of Commissioners

  ATTEST:

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

  Thomas W. Flint

  Secretary, Board of Commissioners

  Date:

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

  PUGET SOUND ENERGY, INC.

  By:

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

  William A. Gaines

(SEAL) Title: Vice President, Energy Supply

EXHIBIT A

DEFINITIONS OF PRIEST RAPIDS DEVELOPMENT
AND WANAPUM DEVELOPMENT

RESOLUTION NO. 390 - DEFINITION OF PRIEST RAPIDS DEVELOPMENT

  Section 2(f) of Exhibit 1.“Priest Rapids Development” shall mean those
properties and facilities consisting of the Priest Rapids dam, site, reservoir,
switchyard and power plant, including all generating facilities associated
therewith up to and including the first ten (10) main turbine generator units
each with a nameplate rating of approximately 78,850 kilowatts and any
additional generating facilities which may be installed as provided for in
Section 19 of the Original Power Sales Contract, together with the associated
transmission facilities consisting of two 230 KV transmission lines and terminal
facilities interconnecting the Priest Rapids switchyard and the Bonneville Power
Administration’s Midway Substation and an undivided one-half (1/2) interest in
the interconnecting facilities between the Priest Rapids switchyard and the
Wanapum switchyard.

RESOLUTION NO. 474 - DEFINITION OF WANAPUM DEVELOPMENT

  Section 2.2. The District specifies and adopts the plan and system hereinafter
set forth for the acquisition, by purchase or condemnation and construction of
the following generation and transmission facilities as a separate utility
system of the District constituting the Wanapum Development of the District, to
wit:

A.     The District shall construct an e1ectric generating plant and associated
facilities on the Columbia River at approximately river mile 415 from the mouth
of said river at the Wanapum site on said river, in Grant and Kittitas Counties,
Washington, as authorized by the Federal Power Commission License for Project
No. 2114, originally issued November 4, 1955, and all amendments thereto; said
generating plant to have an installed nameplate rating of approximately 831,250
kilowatts, and said generating plant and associated facilities to include, but
not limited to, a concrete gravity dam, a fully enclosed reinforced concrete
powerhouse containing ten (10) turbo-generating units with provisions in the
intake structure for the installation of six (6) additional turbo-generating
units, a reservoir, waterways, fish ladders and other fish protective devices;
provisions for future installation of navigation locks; transforming facilities;
a switchyard; transmission facilities necessary to connect the powerhouse to the
existing transmission facilities of the Priest Rapids Development and to the
transmission facilities of the Bonneville Power Administration in the vicinity
of said Project; railroad siding, shops, warehouses, construction camp, offices,
and dwellings; and all other structures, fixtures, equipment or facilities used
or useful in the construction, maintenance and operation of the Wanapum
Development and all necessary water rights, development rights, permits and
licenses, easements, rights-of-way, flowage rights and rights permitting the
storage of water, riparian rights and shore rights.

Exhibit B
Grant County PUD
Service Area

AMENDMENT NO. 1 TO THE
PRIEST RAPIDS PROJECT REASONABLE PORTION
POWER SALES CONTRACT

The Public Utility District No. 2 of Grant County, Washington, (“District”), and
Puget Sound Energy, Inc.(“Purchaser”), hereby agree to this Amendment No. 1 to
the Priest Rapids Project Reasonable Power Sales Contract dated December 13,
2001 (the “Product Contract”). Unless otherwise defined herein, all capitalized
terms defined in the Reasonable Portion Contract shall have the meanings set
forth therein when used in this Amendment.

1. Term of Amendment No. 1

  This Amendment No. 1 shall take effect on upon the execution by the District
and Purchaser, and shall expire on the earlier of the expiration or termination
date of the Reasonable Portion Contract.

2.

  Amendments to Provisions of the Product Contract
Purchaser and the District agree that the Product Contract is hereby amended as
follows:

2.1 The definition of the term Priest Rapids Project Output set forth in Section
2 is deleted in its entirety and replace with the following:

  “Priest Rapids Project Output” shall mean the amount of capacity, energy (both
firm and non-firm), pondage, reactive power, ancillary services (including
dynamic load following services) and any other product from the Priest Rapids
Development from November 1, 2005 to November 1, 2009 and from the Priest Rapids
Project from November 1, 2009 through the term of this contract under the
operating conditions which exist during the term, including periods when the
Priest Rapid Project may be wholly or partially inoperable for any reason, after
correction for encroachment, Canadian entitlement, station and project use, and
depletions required by the FERC License or other regulatory requirements.

2.2 Section 4(c)(4) is amended by adding the following sentence after the last
sentence thereof:

  After the District has acquired capacity and energy as needed to serve its
Estimated Unmet District Load, the District shall not subsequently substitute
therefore more costly capacity and energy, in order to provide the less costly
capacity and energy to other wholesale or retail power customers of the
District.

2.3 Section 7(h) is deleted in its entirety and replaced with the following:

  In the event that the District believes that the Purchaser has violated any of
the above covenants of Section 7(f) or (g), the District may by written notice
to the Purchaser describe the alleged violation in reasonable detail and give
the Purchaser no less than 4 business days after receipt of such written notice
by Purchaser within which to cease the activity in question or to provide to the
District a written explanation as to why the Purchaser believes the activity
does not constitute a violation of any of the aforementioned covenants. If the
Purchaser does not cure the alleged default and the District continues to
reasonably consider the action to be in breach of the covenants, the District
shall have the right to terminate this contract, effective immediately upon
written notice to the Purchaser, without any liability or further obligation on
the part of the District. In the event of such termination, the District shall
have the right to use or sell, in any manner the District determines, the
Purchaser Revenue Allocation the Purchaser would have been otherwise entitled to
under this contract.

2.4 The Reasonable Portion Contract is amended by adding a new Exhibit C,
Purchasers Product Percentage Allocations, which is attached hereto.

  In Witness Whereof, Purchaser and the District have caused this Amendment No.
1 to be executed in their respective names by their duly authorized officers.

Purchaser
PUGET SOUND ENERGY, INC. PUBLIC UTILITY DISTRICT NO. 2 OF
GRANT COUNTY, WASHINGTON

By:

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

  By:

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

         William A. Gaines            Mike Conley

Title: Vice President, Energy Supply

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

  Title: President, Board of Commissioners

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

Date Signed:    4/03/2002

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

  Date Signed:    4/15/2002

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

  By:

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

             Thomas W. Flint

             Secretary, Board of Commissioners

  Date Signed:   4/15/2002

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

EXHIBIT A, AMENDMENT 1

Purchasers Product Percentage Allocations

    Requested Number of Section 3c/e Section 3c/d Step 2 Allocation1 Adjustment
for 2005-2009

  Historical Shares Purchaser Customers Step 1     Reasonable Added   Displace
Reasonable Added

Purchasers Name 1956 1959 Product % 2000 Allocation Surplus Displace Portion
Products7 Surplus2 3 Portion 4 Products7

A. 1956/1959 Purchasers                          

  PacifiCorp 13.9% 18.7% 32.6% 778,446   25.03% 25.03% 25.03% 25.67% 21.34%
26.87% 23.19% 21.89%

  Portland General 13.9% 18.7% 32.6% 726,039   25.03% 25.03% 25.03% 25.67%
21.34% 26.87% 23.19% 21.89%

  Puget Sound Energy 8.0% 10.8% 18.8% 915,851   14.43% 14.43% 14.43% 14.80%
12.28% 15.51% 13.36% 12.60%

  Avista Utilities 6.1% 8.2% 25.0% 309,986   10.98% 10.98% 10.98% 11.26% 9.37%
11.79% 10.17% 9.61%

  Cowlitz PUD 2.0% 2.7% 4.7% 44,361   3.61% 3.61% 3.61% 3.70% 3.07% 3.88% 3.34%
3.15%

  Eugene Water & Elec 1.7% 2.3% 4.0% 80,097   3.07% 3.07% 3.07% 3.15% 2.61%
3.30% 2.84% 2.68%

  City of Forest Grove 0.5% 0.7% (5)% 8,592   0.92% 0.92% 0.92% 0.94% 0.77%
1.00% 0.84% 0.79%

  City of McMinnville 0.5% 0.7% (5) 13,973   0.92% 0.92% 0.92% 0.94% 0.77% 1.00%
0.84% 0.79%

  City of Milton-Freewater 0.5% 0.7% (5) 4,581   0.92% 0.92% 0.92% 0.94% 0.77%
1.00% 0.84% 0.79%

B. 1956 Only Purchasers2                          

  Seattle City Light 8.0% n/a (5) 349,557   6.14% 6.14% 6.14% 6.30% 12.28%
12.28% 12.28% 12.60%

  Tacoma Power 8.0% n/a 16.0% 147,819   6.14% 6.14% 6.14% 6.30% 12.28% 12.28%
12.28% 12.60%

  Kittitas PUD 0.4% n/a   3,078

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

  0.31%

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

0.31%

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

0.31%

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

0.31%

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

0.61%

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

0.61%

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

0.61% 0.63%

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

      Total A+B       3,392,380 97.51% 97.51% 97.51% 97.51% 100.00% 97.51%%
116.40% 103.81% 100.00%

C. No. Idaho Purchasers                          

  Clearwater n/a n/a 10.43% 9,314   0.27% 0.27% 0.27% n/a 0.27% 0.27% 0.27% n/a

  Idaho Co. Light & Power n/a n/a 2.41% 3,007   0.09% 0.09% 0.09% n/a 0.09%
0.09% 0.09% n/a

  Kootenai n/a n/a 16.28% 16,244   0.47% 0.47% 0.47% n/a 0.47% 0.47% 0.47% n/a

  Northern Lights n/a n/a 12.30% 14,541   0.42% 0.42% 0.42% n/a 0.42% 0.42%
0.42% n/a

D. Snake River Purchasers                          

  Fall River Rural Elec. n/a n/a (6) 10,992   0.32% 0.32% 0.32% n/a 0.32% 0.32%
0.32% n/a

  Lost River Electric n/a n/a (6) 2,327   0.07% 0.07% 0.07% n/a 0.07% 0.07%
0.07% n/a

  Lower Valley Electric n/a n/a (6) 19,182   0.55% 0.55% 0.55% n/a 0.55% 0.55%
0.55% n/a

  Raft River Rural Elec. n/a n/a (6) 2,927   0.08% 0.08% 0.08% n/a 0.08% 0.08%
0.08% n/a

  Salmon River Electric n/a n/a (6) 2,570   0.07% 0.07% 0.07% n/a 0.07% 0.07%
0.07% n/a

  United Electric n/a n/a (6)

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

5,515

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

 

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

0.16%

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

0.16%

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

0.16%

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

n/a

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

0.16%

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

0.16%

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

0.16%

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

n/a

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

     Associated Total     1.24% 43,513

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

 

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

1.25%

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

1.25%

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

1.25%

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

n/a

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

1.25%

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

1.25%

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

1.25%

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

n/a

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

      Total C+D       86,619 2.49%

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

2.49%

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

2.49%

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

2.49%

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

n/a

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

2.49%

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

2.49%

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

2.49%

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

n/a

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

Total 63.5% 63.5%     100.00%

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

100.00%

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

100.00%

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

100.00%

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

100.00

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

100.00%

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

118.89%

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

106.30%

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

100.00%

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

  NOTES: (1)   Allocated per average of 1956 and 1956 Shares or, for Idaho
Purchasers, per number of customers.

    (2)   Allocated per 1956 Shares Surplus Product and, for Idaho Purchasers,
per number of customers.

    (3)   Allocated per 25% of 1956 Shares and 75% of 1959 Shares for 1956/1959
Purchasers, per 1956 Shares for the Only 1956 Purchaser, and number of customers
for No. Idaho and Snake River Purchasers.

    (4)   Allocated per 75% of 1956 Shares and 25% of 1959 Shares for 1956/1959
Purchasers, per 1956 Shares for the Only 1956 Purchaser, and number of customers
for No. Idaho and Snake River Purchasers.

    (5)   Have Intent to Sign Contract Letter without Requested Purchaser
Product Percent.

    (6)   Snake River Purchaser's Contract with the Association.

    (7)   Allocated only to the 1956/1959 and Only 1956 Purchasers per 1956
Shares for 2005-2009, then average of 1956 and 1959 Shares post-2009.