EXHIBIT 10.14

 
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INTERCHANGE AGREEMENT

BETWEEN

COMISION FEDERAL DE ELECTRICIDAD

AND

EL PASO ELECTRIC COMPANY

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I N D E X

 
 
PAGE

RECITALS
2

SECTION 1 -
PREMISES
3

SECTION 2 -
TERM, TERMINATION AND AUTHORIZATIONS
5

SECTION 3 -
DEFINITIONS
7

SECTION 4 -
OWNERSHIP AND OPERATION OF THE INTERCONNECTION
14

SECTION 5 -
INTERCHANGE SERVICES
15

SECTION 6 -
ADMINISTRATION
15

SECTION 7 -
OPERATION AND MAINTENANCE
19

SECTION 8 -
GENERALITIES
22

SECTION 9 -
COLLECTIONS AND PAYMENTS
23

SECTION 10 -
JURISDICTION
25

SECTION 11 -
TAXES
25

SECTION 12 -
LANGUAGE
25

 
 
 
INTERCHANGE
SERVICE A
SA/ 1

INTERCHANGE
SERVICE B
SB/ 1

EXHIBIT "A"
 
 
 
 
 
 
 
 

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INTERCHANGE AGREEMENT
BETWEEN
COMISION FEDERAL DE ELECTRICIDAD
AND
EL PASO ELECTRIC COMPANY
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This Electric Energy Interchange Agreement (referred to hereinafter as the
"Agreement") is entered into by and between Comisión Federal de Electrici­dad,
represented herein by its General Director, Mr. Alberto Escofet Artigas and El
Paso Electric Company, represented herein by its President Mr. Evern R. Wall, in
accordance to the following recitals and clauses, in which, for purposes of
brevity, the Parties shall be referred to as "CFE" and "EPE", respectively.

RECITALS

This Agreement is entered into on April 14, 1982, by and between Comisión
Federal de Electricidad and El Paso Electric Company. CFE is a Descentralized
Institution which is part of the Federal Public Administration of the United
Mexican States, whose purpose is to provide the public electric ener­gy service,
in accordance with the Ley del Servicio Público de Energía Eléc­trica (Electric
Energy Public Service I.aw), which was published in the Dia­rio Oficial de la
Federación (Official Gazzette of the Federation) of December 22, 1975; being
represented herein by its General Director, Mr. Alberto Escofet Artigas, who
evidences his authority and powers in the terms of Article 14 of the above-cited
Law, with a certified copy of his appointment, issued by the President of the
Republic, recorded under Public Instrument Number 37,999, dated July 16, 1980,
before Mr. Pedro del Paso Regaert, Notary Public Number 65 of Mexico City.

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El Paso Electric Company is a corporation organized and existing under the laws
in effect in the State of Texas and in the United States of America, which is
represented herein by Mr. Evern R. Wall, President of EPE, who herein evidences
his authority and powers with the documents which are presented to C.F.E. and
which it keeps in its files.

Hereinafter, CFE and EPE shall also be referred to individually as "Party", or
jointly "Parties".

SECTION 1 - PREMISES

1.1
CFE's electric system in Ciudad Juárez, Chihuahua, hereinafter referred to as
"CFE-Juárez", and EPE's electric system in El Paso, Texas, hereinafter referred
to as "EL PASO", are contiguous along a portion of the Mexico-United States of
America border, as is shown in Exhibit "A" hereof.

1.2
Both parties recognize that mutual benefits may derive from the interchange of
electric energy between their systems, since such interchange will make the
assistance in the operation of both systems possible, improving generation costs
and rendering a more dependable service to the corresponding CFE-Juárez and EL
PASO consumers.

1.3
Both Parties own and operate facilities for generation, transmission and
distribution which may be interconnected through two existing 69/KV transmission
lines.

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1.4
The CFE-Juárez and EL PASO systems are members of major interconnected systems.
CFE-Juárez is a member of CFE's Sistema Interconectado Nacional (SINAL), which
shall also be referred to as the "Main System" corresponding to CFE-Juárez and
EL PASO is a member of the Western Systems Coordinating Council (WSCC) system,
which shall also be referred to as the "Main System" corresponding to EL PASO.

1.5
Both Parties recognize that at the present time it is not practical or
convenient for the interconnection between the systems of the Parties to occurr
while the CFE-Juárez system is interconnected with the rest of CFE's Sistema
Interconectado Nacional (SINAL) and EL PASO's system is simultaneously
interconnected with the rest of the Western Systems Coordinating Council (WSCC)
system.

1.6
According to what is provided in paragraph 1.5, in order to accom­plish the
electric energy interchanges between the Parties, it is convenient to separate a
part of the system of one of the Parties when this part is interconnected with
the Main System corresponding to the other Party, in accordance with the
procedures which the Co­ordinating Committee shall establish within thirty (30)
days after the signing hereof.

1.7
This Agreement shall allow the Parties, to join their efforts in or­der to
analyze and construct if necessary, new interconnections which allow to increase
colaboration between the Parties. In each case the corresponding situation shall
be analyzed and this Agree­ment shall be modified, ammended or ratified by an
additional agree­ment if necessary, with the appropriate intervention of the
corres­ponding authorities.

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1.8
For purposes of implementation of this Agreement, all references to CFE's
system, shall be understood as CFE-Juárez's system.

SECTION 2. TERM, TERMINATION AND AUTHORIZATIONS.

2.1
Term. - This Agreement shall become effective when signed by both Parties, and
shall continue in effect for a period of two (2) years. At the end of this term,
this Agreement shall continue in effect for an indefinite term until written
notice of termination is given by either of the Parties ninety (90) days in
advance.

2.2
Authorizations. - Each Party agrees to take the necessary steps in their
respective country to obtain all the authorizations necessary to implement this
Agreement. Each Party agrees to notify the other Party when all of the
authorizations required by that Party to implement this Agreement have been
obtained.

2.2.1
According to what is provided in paragraph 2.2, as regards CFE, it must obtain
authorizations from the agencies which are listed below:

(a)
The Secretaría de Patrimonio y Fomento Industrial (National As­sets and
Industrial Development Department), with regard to the Ley del Servicio Público
de Energía Eléctrica (Electric Energy Public Service Law) and Regulations
derived therefrom.

(b)
The Secretaría de Comercio (Commerce Department), according to the Ley del
Servicio Público de Energía Eléctrica (Electric En­ergy Public Service Law) and
Regulations derived therefrom, with regard to the importation and exportation of
electric energy and in accordance with the Ley sobre Adquisiciones,
Arrendamientos y Almacenes de la Administración Pública Federal (Federal Public
Administration Acquisitions, Leases and Inventories Law).

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2.2.2
According to the provisions of paragraph 2.2, the governmental authorizations
which EPE must obtain are the following:

(a)
Presidential permits and authorizations or permits from other governmental
agencies with regard to the importation or exporta­tion of electric energy and
the construction of facilities on the international border.

(b)
Registration of EPE in the Padrón de Proveedores de la Adminis­tración Pública
Federal (Federal Public Administration Suppliers List) which is kept by the
Secretaría de Comercio (Commerce De­partment), in accordance with the Ley sobre
Adquisiciones, Arrendamientos y Almacenes de la Administración Pública Federal
(Federal Public Administration Acquisitions, Leases and Inventories Law) of the
United Mexican States.

2.3    Termination.
2.3.1
If the authorizations applicable in each case and referred to in section 2.2
hereof are not obtained during the nine-month period following the signing
hereof, the Parties shall meet and decide to adopt any of the following
solutions: (i) to terminate this Agree­ment without any further liability to
either of the Parties or (ii) to continue the procedures to obtain such
authorizations. If the Parties decide to continue along the lines of option (ii)
above, the Agreement shall continue in force for another six-month period at
the end of which if either of the Parties has not obtained the required
authorizations, either of the Parties may terminate this A­greement by written
notice to the other Party, thirty (30) calendar days in advance and without
there being further liability to either Party. Once all the authorizations have
been issued, neither Party may terminate this Agreement based on this section
2.3.1

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2.3.2
Breach. - In case of serious and repeated noncompliance by a Party with the
obligations assumed according to this Agreement by a Party towards the other,
the affected Party may request in writing to the other Party, the termination of
this Agreement, regardless of the normal termination term provided for in
section 2.1, giving authentic proof of the motives which justify its decision.

2.3.3
Termination of the Agreement in accordance to sections 2.3.1 or 2.3.2 shall not
release either of the Parties of the obligation to return the interchange
services derived from this Agreement or from complying with the corresponding
compensation for the services which may have been previously received from the
other Party.

SECTION 3. - DEFINITIONS.

For purposes of this Agreement, the Parties agree to establish the following
conventional definitions:
3.1
Sistema Interconectado Nacional (SINAL) - The main electric system of CFE of
which the electric system of CFE-Juárez is a part.

3.2
Western Systems Coordinating Council (WSCC) - An organization consisting of
several electric utilities which are interconnected and are located in the
western portion of the United States of America and Canada and of which EPE is a
member.

3.3
CFE-Juárez - The electric system owned by CFE which supplies the northern
portion of the State of Chihuahua and is contiguous with the United States of
America border, and which is connected with the rest of SINAL at the Moctezuma
Substation.

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3.4
EL PASO - The electric system owned by EPE which supplies the southern portion
of the State of New Mexico and the western portion of the State of Texas, which
is contiguous with the Mexican border, and which is connected with the rest of
the WSCC system at several points which are shown in Exhibit "A" of this
document.

3.5
Capacity - The measure in Megawatts of the dependable load-carrying ability of
one or more generating units determined in accordance with prevailing operating
conditions at the applicable time.

3.6
Capacity Resources - The Capacity Resources of EL PASO are:

(a)
The Capacity of the generating units installed in EPE's service area, plus

(b)
The capacity owned by EPE from generating units installed outside EPE's service
area, plus

(c)
The aggregate capacity made available to EL PASO on a firm basis under purchase
contracts with Third Parties, minus

(d)
The aggregate capacity made available, under sales contracts, to Third Parties.

The Capacity Resources of CFE-Juárez are:
(a)
The Capacity of all the generating units installed in CFE-Juárez service area,
plus

(b)
The aggregate capacity which is made available to CFE--Juárez on a firm basis
from other CFE installations, plus

(c)
The aggregate capacity which is made available to CFE-Juárez on a firm basis,
according to purchase contracts with Third Parties, minus

(d)
The aggregate capacity made available under sales contracts to Third Parties.

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3.7
Unitary Decremental Energy Cost.- The expense in United States of America
dollars, per Kilowatt-Hour, which the Receiver would incurr if the total block
of energy received in accordance with a particular Interchange Service of this
Agreement (after adjustments for any increase or decrease of the Receiver's
system transmission losses) were to be obtained in any of the two following
manners:

(a)
From generation with its own available Capacity Resources, using the generating
unit or units which have the lowest Incremental Operating Costs and which are
not being used to satisfy its own energy requirements at the time of the
reception of the energy supplied by the Supplier. This expense is equal to the
sum of the following concepts, divided by the amount of kilowatt-hours of such
energy:

(1)
The cost of make ready, starting up and shutting-down (in case necessary to
generate the energy received from the Sup­plier) such generating units, plus the
Replacement Cost of Fuel for no-load operation and the cost of the fuel required
to render its own services;

(2)
The Replacement Cost of Fuel or the cost of another primary energy source used
to generate such energy in the generating units mentioned; and

(3)
The Incremental Maintenance Cost of such generating units.

(b)
From the purchase of energy from Third Parties, or also, in the case of
CFE-Juárez, for the energy obtained from any other installations of CFE.

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3.8
Replacement Cost of Fuel.

Unless otherwise mutually agreed, the replacement cost of fuel shall be based on
the following:
(1)
For CFE-Juárez the replacement cost of fuel shall be based on the international
export price of oil produced in Mexico or the cost of imported fuel, depending
on the case.

(2)
For EL PASO, the replacement cost of fuel placed in storage.

3.9
Associated Energy. - The energy (Kilowatt-Hour) associated with con­tracted
capacity.

3.10
Emergency. - Any unforeseeable or inevitable temporary circumstance not within
the control of the affected Party (such as the loss or reduction of generating
or transmission capacity) which affects the system of either of the Parties,
which prevents, interferes or jeopardizes the rendering of satisfactory service
in the affected sys­tem, as a result of any cause other than: (a) Scheduled
Maintenance or (b) an anticipated fuel supply deficiency.

3.11
Emergency Assistance. - Service provided pursuant to Interchange Service A,
under which one of the Parties shall supply the other Party, upon the latter's
request, the power and energy which the latter may require to reestablish or
protect the supply of energy in its system when it is affected by Emergency
conditions.

3.12
Energy Requirements. The total energy demand on a Party's system, during the
applicable period, expressed in Kilowatt-Hours.

3.13
Energy Resources. - The energy generation capacity which a Party has in its
Capacity Resources, during the applicable period, expressed in Kilowatt-Hours.

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3.14    Firm Power Delivery.
Deliveries of capacity and electric energy to a Party, which are interruptible
only in the event of degradation in the Supplier's system security.
3.15    Unitary Incremental Energy Cost.
The expense, in United States of America dollars, per Kilowatt-Hour incurred by
the Supplier to supply the electric energy in accordance with a specific
Interchange Service of this Agreement, determined in consideration of the
following:
(a)
If the Supplier generated such electric energy with its own generating units,
the expense incurred in the generation of electric energy (after adjustments for
increases or decreases in the transmission losses in the Supplier's system)
using the generating unit or units which have the lowest Incremental Operation
Cost and which are not being utilized to meet its Energy Requirements, which
expense shall be the sum of the following items divided by the number of
Kilowatt-Hours of such energy:

(1)
The cost of make ready, starting up and shutting-down (if necessary to supply
such electric energy) the generating u­nits, plus the Replacement Cost of Fuel
for no-load operation and the cost of the fuel required to render its own
services; plus

(2)
The Replacement Cost of Fuel or the cost of another primary source of energy
utilized to generate the electric energy in question, and

(3)
The Incremental Maintenance Cost of the generating units mentioned in this
paragraph (a).

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(b)
If the Supplier obtained all or part of the electric energy sup­plied to the
Receiver for that purpose and not to satisfy its own Energy requirements, then
the Unitary Incremental Energy Cost of the Supplier for the energy acquired for
that purpose shall be equal to the purchase price of such energy, which shall be
adjusted for any increase or decrease of the transmission losses in the
Supplier's system. In the case of CFE-Juárez, if it acquired all or part of the
electric energy supplied to the Receiver from the rest of CFE's installations,
then the Unitary Incremental Energy Cost for such Energy shall be equal to the
cost which CFE incurrs for its generation and transmission.

3.16
Incremental Maintenance Cost.

The amount, expressed in mills of United States of America dollars per
Kilowatt-Hour, which the maintenance expenses are increased due to the increase
in generation to satisfy the delivery of energy under any of the Interchange
Services provided in this Agreement. This cost shall be established by the
Coordinating Committee.
3.17
Incremental Operating Cost.

The increase in cost due to fuel consumption in United States of America
dollars, per Kilowatt-Hour, due to the increase in the power output of a
generating unit.
3.18
Interconnection.

Any arrangement of one or more transmission lines, switches, meters, control
devices and other related facilities which directly connect or allow the
interchange of electric energy between the CFE-Juárez and EL PASO systems.

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3.19
Peak Demand.

The highest aggregate demand, in Megawatts, on all sources of power of a system,
including all the purchases of energy during the applicable period, measured in
one hour intervals, and less the demand resulting from all the sales of energy
and all demands originated from transitory load variations between the
interconnected systems.
3.20
Interconnection Point.

The geographical location where the transmission line or lines which are part of
an Interconnection, cross the international border.
3.21
Receiver.

The Party receiving service provided for in the Interchange Services attached
hereto.
3.22
Scheduled Maintenance.

The removal of a generating unit from service, planned in advance, for
inspection or overhaul of one or more major equipment groups.
3.23
Short-Term Firm Capacity.

The service provided in Interchange Service B which, through mutual agreement of
the Parties, the Supplier makes available for the Receiver to schedule a
specified amount of Capacity and Associated Energy for a determined number of
consecutive days.
3.24
Supplier.

The Party furnishing the services provided for in the Interchange Services,
attached hereto.
Third Party.
Any person, physical or legal, whether public or private, which op­erates and/or
owns an electric system, excluding any of the Parties to this Agreement.

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SECTION 4 - OWNERSHIP AND OPERATION OF THE INTERCONNECTION.

4.1
Each Party accepts the obligation to operate and maintain its interconnection
facilities up to the existing Interconnection Points which are shown in Exhibit
A and which are described hereunder:

Interconnection I:
Transmission of 69 KV between the Río Grande Substation of EL PASO and Chaveña
Substation of CFE‑Juárez.

Interconnection II:
Transmission of 69 KV between the Ascárate Substation of EL PASO and the Colegio
Substation of CFE-Juárez.

4.2
Each Party owns its installations up to the Interconnection Points and will
modify, design, build, operate and maintain such installations at its own cost.

4.3
When the systems of both Parties, or a portion of them, are operating
interconnected, each Party shall take the necessary care to maintain the
continuity of service in the supply and receipt of ca­pacity and energy
according to this Agreement.

4.4
Neither Party will have physical access to the facilities of the other Party
without the prior and express consent of the other Party. No labor relationship
shall exist between the personnel of CFE and EPE, nor between the personnel of
EPE and CFE. Consequently, each Party shall be considered as the employer of its
workers, employees or agents; and will fully assume the responsibility derived
from risks related to its facilities. Neither Party shall assume responsibility
towards the customers of the other Party or for claims that third parties may
bring against one of the Parties with respect to the facilities of the other
Party.

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4.5
Each of the Parties reserves the right to continue or renew existing agreements
and to enter into additional agreements of any type with a Third Party.

SECTION 5 - INTERCHANGE SERVICES.

5.1
Terms and conditions.

The terms and conditions of the services that one Party as Supplier will
provide, to the other Party, as Receiver, as provided in this Agreement, and the
amount which will be paid for them shall be specifically detailed in the
documents referred to as Interchange Serv­ices which shall be attached hereto,
each one of which, after having been signed by the authorized officers of both
Parties and approved by the competent regulatory agencies, shall become part of
this A­greement for the whole term thereof or for a lesser term if the Par­ties
so specify in each one of them.
5.2
Interchange Services.

Initially, it is agreed on the following Interchange Services which become part
of this Agreement:
Interchange Service A:    Emergency Assistance
Interchange Service B:    Short-Term Firm Capacity

SECTION 6 - ADMINISTRATION.

6.1
Coordinating Committee.

The Parties hereby establish a committee, referred to as the Coor­dinating
Committee, which shall have the authority and obligations set forth in this
Section 6 and in other sections of this Agreement.

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The Coordinating Committee shall limit its duties to what is established in this
Agreement. The Parties agree that within the membership of the Coordinating
Committee there is no existing preemi­nence and therefore all its members shall
have equal status and the vote of each member shall have equal value.
6.2
Membership in the Coordinating Committee.

Within thirty (30) days after the date this Agreement becomes effective, each
Party shall appoint in written form the person which shall represent it in the
Committee, as well as an alternate with authority to act in case of absence of
the representative. Such appointments shall be made in written form and shall
inform the other Party of the degree of delegated authority and the limitations
of the representatives authority. Both Parties may designate new representatives
or alternates by written notice to the other Party. The salaries and expenses of
the representatives and alternates of each Party shall be borne by the Party
they represent.
6.3
Unanimity Requirement.

Any determination, approval, recommendation or any other action re­lated to this
Agreement taken by the Coordinating Committee shall require the affirmative vote
or consent of each member of such Committee. In case a consensus cannot be
reached, the corresponding matter shall be dealt with and resolved by the
Sub-Director de Ope­ración (Sub-Director of Operation) of CFE and the President
of EPE, with the understanding that the representatives which the Parties
appoint hereby for such purpose, may be substituted by written no­tice to the
other Party.

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6.4
Meetings.

The Coordinating Committee shall decide on the place and dates to meet, it shall
prepare the agendas for the meetings and shall prepare and distribute the
minutes of the meetings and other official documents of the Coordinating
Committee as well. The meetings of the Coordinating Committee may be called by
any of its members, but in any case, such Committee must meet at least once
every quarter, or more often if both Parties agree. Each Party undertakes that
its representative or alternate shall be present in every meeting of the
Coordinating Committee, called with at least fifteen (15) days prior written
notice.

6.5
Appointment of Sub-Committees.

The Coordinating Committee is authorized to establish as many permanent or
temporary Sub-Committees as necessary to assist the Committee to accomplish its
purposes and to exercise its authority, according to the provisions of this
Agreement. The Coordinating Committee shall determine the number of
representatives which each one of the Parties shall have in each Sub-Committee
with the understanding that each Party shall be equally represented. Each one of
the Parties, upon being notified of the creation of any Sub-Committee by the
Coordinating Committee, shall designate its representative on such Sub-Committee
within thirty (30) days after such notice, as well as any alternates who will
act in the absence of the representative. The salaries and expenses of the
representatives and alternates of each Party shall be borne by the Party they
represent.

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6.6
Resolutions by Unanimity.

If a Sub-Committee cannot agree on a certain matter entrusted to it by the
Coordinating Committee, that Sub-Committee may present several recommendations
to the Coordinating Committee for its solution. In case no consensus is reached
at the Coordinating Committee, the procedure established in paragraph 6.3 hereof
shall be followed.
6.7
Powers and Duties of the Coordinating Committee.

The Coordinating Committee shall have the powers and duties listed in the
following paragraphs:
6.7.1
Exchange of Information.

To establish procedures that will provide for exchange of information between
the Parties so as to obtain optimum benefits from this Agreement.
6.7.2
Exchange Capacity.

To determine the transfer capacity of Interconnections I and II and of any other
future Interconnections, under normal conditions or Emergency.
6.7.3
Metering and Energy Accounting.

To determine procedures to meter the interchange and to make the corresponding
registrations, as well as verification and accounting procedures required for
the implementation of this Agreement.
6.7.4
Operating Procedures.

To determine procedures and operational standards for the rendering of services
according to this Agreement, including the delegation of authority to the system
operators of each of the Parties for the implementation of this Agreement.

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6.7.5
Interconnection Equipment.

To recommend the equipment needed to enhance the operation of the interconnected
systems and for the management of this Agreement.
6.7.6
Attributes for Interchange Services.

To propose additional interchange services and, in such case, to carry out the
necessary studies which lead to a recommendation to adjust the technical and
economic parameters associated with the different Interchange Services.
6.7.7
Other Powers and Duties.

To carry out other authorized actions which may be necessary for the
implementation of this Agreement.

SECTION 7 - OPERATION AND MAINTENANCE.

7.1
General Stipulations.

The provisions of this Section are applicable to all operations go­verned by
this Agreement, unless an Interchange Service specifies otherwise for actions
related to such Interchange Service. In the event that the terms of this
Agreement conflict with the terms of an Interchange Service, the terms of the
Interchange Service will prevail over this Agreement.
7.2
Service Interruption and Disturbances.

The Parties express that the basic objective of this Agreement, according to the
premises established in Section 1, is to obtain reciprocal assistance.
Therefore, each Party shall operate its system

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attempting to minimize the probabilities of service interruptions or
disturbances which might affect the other Party's service. In the event that one
of the Parties deems that service to its own customers is being affected due to
the operating conditions of the other Party's system, the proper steps to remedy
the deficiency shall be taken by mutual agreement of the Parties. However, it is
expressly agreed that neither Party may demand from the other Party payments for
damages or losses or any other compensation as a result of service
interruptions, disturbances, blackouts or other operating deficiencies.
Consequently, each Party must assume the whole responsibility towards its own
customers or users regarding claims arising from service interruptions,
disturbances, blackouts or other operating deficiencies.
Each Party agrees to hold the other Party harmless if a customer of the first
Party brings suit against the other Party.
7.3
Automatic Load Shedding and Tie Separation.

Immediately following the appointment of the Coordinating Committee, it will
adopt procedures covering systems separation and automatic load shedding.
7.4
Maintenance of Interconnection Facilities.

Each Party will maintain its own interconnection facilities in good operating
condition; however, the Parties shall coordinate scheduled maintenance or
construction work, in accordance with the procedures to be established according
to the provisions of Section 6.7.4.

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7.5
Maintenance of Communication Equipment.

Each Party will pay the expense of maintaining its communication system and of
its telemetering facilities, as well as those related to the interconnection of
such equipment with the corresponding system of the other Party as needed to
effectively implement this Agreement.
7.6
Metering Equipment.

Every capacity and energy service rendered through each Interconnection will be
measured at the end of each Interconnection line and at any other location which
may be necessary to verify deliveries and interchanges effected pursuant to this
Agreement.
7.7
Non-Intentional Interchange of Energy.

The quantity of power and energy supplied according to this Agreement by one
Party to the other, according to each Interchange Ser­vice or any other service
between the CFE-Juárez and EL PASO systems, shall be determined based on
quantity scheduled by the system operators of the Parties. The Parties shall
operate the respective systems in a way that net energy and capacity delivered
be as close as possible to the scheduled net deliveries. Any difference between
the scheduled net delivery and the actual net deliveries shall be verified in
accordance with the procedures established by the Coordinating Committee and
such differences may be compensated in cash or in kind, as determined by the
Coordinating Committee.
7.8
Frequency Maintenance.

Each Party shall operate its system in such a way that will permit to maintain
the frequency of the Interconnected Systems of the Par­ties at approximately 60
Hz (within the maximum limits of normal

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deviations of operation established periodically by the Coordinating Committee).
7.9
KVAR Requirements.

Each Party shall normally provide the reactive kilovoltpere (KVAR) requirements
for its own system, so that there will be no interchange of KVAR between the
systems; however, by prior agreement of the system operators, the Parties may
exchange KVAR. The Parties shall cooperate to control the flow of KVAR to
prevent the introduction of objectionable operating conditions on both systems.

SECTION 8 - GENERALITIES.

8.1
Notifications:

All notifications, petitions or applications with regard to this Agreement shall
be considered to have been properly given, if sent by registered mail to the
Sub-Director de Operación or to the Gerente del Centro Nacional de Control de
Energía of the Comisión Federal, Río Ródano 14, 06500 México, D. F., if the
notification is for CFE; and to the Secretary, El Paso Electric Company, Post
Office Box 982, El Paso, Texas, 79960, if the notification is for El Paso
Electric Company. The designation of the person to whom the notifications
must be sent, or the address of such person, may be changed at any time by
written notice. All notifications relating to the delivery or receipt of energy
or relating to the operation of facilities shall be considered valid if
transmitted by telephone and registered in the system operators' logs of both
Parties.

-22-

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Notifications of legal nature or within judicial procedures shall be subject to
the applicable legal requirements.
8.2
Successors and Assigns.

This Agreement shall innure in the benefit of and shall bind the successors and
assigns of both Parties. However, it will not be transferable by either Party
without the prior written consent of the other Party, which shall not be denied
unless there is justification.
8.3
Fortuitous Event and Force Majeure.

Neither EPE nor CFE shall be responsible for non-compliance with their
obligations under this Agreement when such non-compliance is due to force
majeure or to a fortuitous event, as defined by the Mexican Legislation. When a
fortuitous event or force majeure occur, the affected Party shall notify and
evidence such occurrence to the other within ten (10) calendar days of the
occurrence.

SECTION 9 - COLLECTIONS AND PAYMENTS.

9.1
The Receiver shall compensate the Supplier for the interchanges rendered
according to this Agreement in the amount billed every month. Such bills shall
indicate separately the corresponding amounts of each type of Interchange
Service that has been supplied.

9.2
The interchanges rendered hereunder shall be accounted for on a calendar month
basis. The Supplier shall present a monthly invoice to the Receiver, in United
States of America dollars, for the services rendered under this Agreement
starting on the month in which the

-23-

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operations of the first interconnection between CFE-Juárez and EL PASO begin.
The amounts payable hereunder for any service rendered shall be paid within
thirty (30) calendar days after the receipt of the invoice by the corresponding
Party.
9.3
In the event that upon reviewing an invoice, the Party which must pay it
considers that a portion of the amount billed is not due by it, that Party shall
make the corresponding observations to the o­ther Party within a ten (10)
natural day period following the re­ceipt of the bill, so that the other Party
may in turn review the bill and within the ten (10) natural days following the
notification of the observations, make the corresponding correction or clearly
evidence the propriety of the charge which is being objected, in the
understanding that in the event the Parties have not resolved the existing
differences before the term established in paragraph 9.2, fifty percent (50%) of
the disputed amount and the total amount which is not disputed shall be paid
within such term. The foregoing shall, of course, not preclude the reimbursement
of the amount paid in excess or the payment of the additional amount which is
deter­mined to be owed, through the corresponding debits or credits on the
following bill.

9.4
All payments made by EPE to CFE shall be made in United States of America
dollars at a banking institution selected by CFE in Ciudad Juárez, Chihuahua.
All payments made by CFE to EPE shall be made in United States of America
dollars at a banking institution selected by EPE in El Paso, Texas. Each Party
shall notify the other of the selection of a banking institution, pursuant to
the terms of paragraph 8.1 of this Agreement, within a fifteen (15) calendar day
period following the date of signature of this Agreement.

-24-

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SECTION 10 - JURISDICTION.

10.1
For the interpretation and compliance of this Agreement, as well as for any case
in which judicial intervention is required regarding the Agreement, the Parties
hereby submit to the jurisdiction of the competent federal courts in Mexico
City, Federal District. In ev­ery case, the provisions of article 45 of the Ley
del Servicio Pú­blico de Energía Eléctrica (Electric Energy Public Service Law)
shall be applicable.

SECTION 11 - TAXES.

11.1
The taxes and duties legally assesible which are incurred as a consequence of
this Agreement in the United States of America or in the United Mexican States
shall be paid respectively by EPE or CFE. In every case regarding payments which
CFE must make, the provisions of the Ley de Presupuesto, Contabilidad y Gasto
Público (Budget, Accounting and Public Expenditures Law), and regulations
promulgated thereunder shall be observed.

SECTION 12 - LANGUAGE.

12.1
The Parties execute this Agreement signing two (2) originals in Spa­nish and two
(2) originals in English. It is hereby agreed that both the Spanish and English
texts of this Agreement are valid and binding, so long as the English version
which is signed has been prepared and certified by an official expert translator
authorized to act as such by the Mexican judicial authorities; and in the event
of a dispute, both texts shall be used to determine the intention of the
Parties.

-25-

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This Agreement is signed in Mexico City, Federal District, on April 14, 1982.

EL PASO ELECTRIC COMPANY
 
COMISION FEDERAL DE ELECTRICIDAD
 
 
 
/s/Evern R. Wall
 
/s/[ILLEGIBLE]
 
 
 
President
 
General Director

EL SUSCRITO, LIC. ANDRES OCHOA BUNSOW, PERITO TRADUCTOR E INTERPRETE DE IDIOMAS,
DEBIDAMENTE DESIGNADO Y AUTORIZADO POR EL TRIBUNAL SUPERIOR DE JUSTICIA DEL
DISTRITO FEDERAL, SEGUN BOLETIN JUDICIAL No. 30 DE FECHA 13 DE FEBRERO DE 1981.

CERTIFICO:

QUE LA ANTERIOR ES UNA FIEL TRADUCCION DEL INGLES AL ESPAÑOL, DEL DOCUMENTO
ORIGINAL QUE TUVE A LA VISTA Y QUE SE ADJUNTA A ESTA TRADUCCION PARA TODOS LOS
EFECTOS LEGALES A QUE HAYA LUGAR.

MEXICO, D. F., A 14 DE ABRIL DE 1982

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INTERCHANGE SERVICE A
EMERGENCY ASSISTANCE
COMISION FEDERAL DE ELECTRICIDAD
AND
EL PASO ELECTRIC COMPANY
SECTION 1 - OBJECTIVE.

1.1
The objective of this Interchange Service A is to render Emergency Assistance
between the electric systems of CFE-Juárez and EL PASO.

1.2
The Parties recognize that the terms under which a Party, as Receiver, has the
right to request Emergency Assistance, and the other Party, as Supplier, is
obligated according to this Service to provide Emergency Assistance, are
conditions which arise in temporary circumstances out of control of the affected
Party and which prevent, interfere or jeopardize the rendering of satisfactory
service in the system of the Party which requests the Emergency Assistance, and
which result from any cause other than Scheduled Maintenance or anticipated fuel
supply deficiencies.

SECTION 2 - TERM.
This Interchange Service A, once it has been signed by the Parties, shall become
effective simuntaneously with the Interchange Agreement between Comisión Federal
de Electricidad and El Paso Electric Company and shall continue in effect
throughout the term of the Interchange Agreement, or until a new Interchange
Service A is executed.

-SA/1-

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SECTION 3 - SUPPLY OF EMERGENCY ASSISTANCE.

3.1
Each Party, upon the request of the other Party, shall supply as Emergency
Assistance the power and energy that the Receiver may need to restore or protect
the supply of energy in the affected system by an Emergency under the following
conditions: (a) that in the Supplier's judgement, such supply does not cause any
deterioration or serious risk for the service of the Supplier's system; (b) that
such supply does not exceed the maximum transmission capacity of the
In­terconnection facilities; and (c) that Emergency Assistance shall never
exceed seventy-two (72) continuous hours. After such seventy‑two (72) hours, the
assistance shall continue to be supplied; however, the compensation basis for
such supply shall be those of Interconnection Service B.

3.2
The Supplier from whom the Emergency Assistance is requested shall utilize, to
the degree necessary, all energy sources at its disposal to render the Emergency
Assistance.

3.3
If a Party affected by an Emergency requests Emergency Assistance, such Party
shall communicate, as soon as possible, with the Supplier to schedule such
Emergency Assistance. The Receiver with due diligence shall correct the
conditions which caused the Emergency and reestablish the normal operating
conditions of its system.

SECTION 4 - COMPENSATION BASIS.

4.1
The energy supplied during a period of Emergency Assistance shall be returned to
the Supplier at the rate of 1.2 KWH for each KWH supplied during the Emergency.
The conditions in which the energy supplied shall be returned shall be agreed
upon by the system operators

-SA/2-

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

of both Parties, considering the following:
a)
Energy supplied between 0700 and 2300 hours, time of Ciudad Juárez, shall be
returned between 0700 and 2300 hours, time of Ciudad Juárez.

b)
Energy supplied on days between Monday and Friday inclusive shall be returned on
days between Monday and Friday inclusive.

c)
Energy supplied on Saturday or Sunday shall be returned on Saturday or Sunday.

4.2
If the Receiver of Emergency Assistance service does not return the energy
supplied within a period of fifteen (15) calendar days from the beginning of the
Emergency Assistance, then the Receiver shall pay the Supplier for the energy
not returned an amount to be deter­mined on the basis of 120% of the Unitary
Incremental Energy Cost of the Supplier incurred in supplying such energy. In
determining which KWH will be billed by the Supplier to the Receiver, it is
agreed that the first KWH supplied in Emergency Assistance shall be the first
KWH which the Receiver must return.

4.3
In the event that this Interchange Service A is terminated, the obligations of
the Parties with respect to compensation not paid shall continue in effect until
they have been fulfilled.

EL PASO ELECTRIC COMPANY
 
COMISION FEDERAL DE ELECTRICIDAD
 
 
 
/s/Evern R. Wall
 
/s/[ILLEGIBLE]
 
 
 
President
 
General Director
 
 
 
Date: April 14, 1982
 
Date: April 14, 1982

                

-SA/3-

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INTERCHANGE SERVICE B
SHORT-TERM FIRM CAPACITY
COMISION FEDERAL DE ELECTRICIDAD
AND
EL PASO ELECTRIC COMPANY

SECTION 1 - OBJECTIVE.

1.1
In order to achieve a more economical system operation, as well as to improve
system reliability and permit increased flexibility and convenience of their
operation, this Interchange Service B provides that either Party, as Supplier,
may agree to furnish or make available to the other Party, as Receiver, a
specified amount of Capacity and Associated Energy for a period not exceeding
forty five (45) consecutive days.

SECTION 2 - TERM.

2.1
This Interchange Service B, once signed by the Parties, shall become effective
simultaneously with the Interchange Agreement between Comisión Federal de
Electricidad and El Paso Electric Company and shall continue in effect
throughout the term of the Interchange Agreement, or until a new Interchange
Service B is executed.

SECTION 3 - SUPPLY OF SHORT-TERM FIRM CAPACITY

3.1
Upon mutual agreement of the Parties, the Supplier shall maintain available for
scheduling by the Receiver the agreed upon amount of Capacity at all times
during the expressly agreed upon period of supply of Short-Term Firm Capacity.

-SB/1-

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3.2
At any time during the agreed upon period, the Receiver may schedule and
Supplier shall deliver Associated Energy up to the agreed upon amount of
Short-Term Firm Capacity which has been made available.

3.3
The Unitary Incremental Energy Cost of the Supplier shall be deter- mined prior
to the rendering of this Service B.

3.4
The Receiver shall pay the Supplier for the Short-Term Firm Capacity and for the
Associated Energy received according to the rate set‑forth in Section 4 of this
Interchange Service B.

SECTION 4 - COMPENSATION BASIS.

The Supplier shall bill and the Receiver shall pay for the agreed upon amounts
of Short-Term Firm Capacity and for the Associated Energy received, based on the
following charges:
4.1    Demand charges.
.10 dollars (10 cents of a dollar) of the United States of America, per kilowatt
of demand per calendar day based on Ciudad Juárez time.
4.2    Energy charge.
At the rate of 115% (one hundred and fifteen percent) of the Unitary Incremental
Energy Cost of the Supplier.
EL PASO ELECTRIC COMPANY
 
COMISION FEDERAL DE ELECTRICIDAD
 
 
 
/s/Evern R. Wall
 
/s/[ILLEGIBLE]
 
 
 
President
 
General Director
 
 
 
Date: April 14, 1982
 
Date: April 14, 1982

-SB/2-

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CF0094

INTERCHANGE SERVICE C
ECONOMY ENERGY
COMISION FEDERAL DE ELECTRICIDAD
AND
EL PASO ELECTRIC COMPANY

SECTION 1 – OBJECTIVE
1.1
The objective of this Interchange Service C is to establish the terms and
conditions of economic energy transactions ("Economy Energy") between the
electric systems of CFE-Juárez and EL PASO. This Interchange Service C is
expected to allow the Parties to achieve more efficient utilization of
production capacity as well as to permit increased production flexibility
and convenience of operation.

1.2
CFE-Juárez desires to obtain, and EL PASO desires to supply, up to 60 MW each
hour of Economy Energy from the effective date of this Interchange Service C.
This Interchange Service C provides the terms and conditions which will allow
such Economy Energy transactions to occur.

1.3
This Interchange Service C allows for the repayment of Economy Energy by a
Receiver in either cash or by the return of energy as specified in Section 4
herein.     

SECTION 2 – TERM

2.1
This Interchange Service C shall become effective

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

once it has been signed by both Parties and shall continue in effect throughout
the term of the Interchange Agreement or until a new Interchange Service C
is executed.

2.2
Each Party is hereby obligated to undertake the necessary actions to obtain all
authorizations within its own country, needed to implement this Interchange
Service C.

SECTION 3 – ECONOMY ENERGY

3.1
Either Party ("Receiver") may request Economy Energy from the other Party
("Supplier"). Each Party shall be the sole judge of the conditions under which
it is economic or practical for it to deliver, accept or return Economy Energy
hereunder.

3.2
Prior to the supply or return of Economy Energy hereunder, the Parties'
respective system operators shall mutually agree upon the point(s), rate and
term of delivery for each such Economy Energy transaction.

3.3
Either Party may interrupt or curtail the supply or receipt of Economy Energy,
upon verbal notice to the other Party, when the supply or receipt of such
energy will result in the impairment of or jeopardize service to its electrical
system, its customers or its other commitments.

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

3.4
Upon mutual agreement of the Parties' respective system operators, either or
both of CFE-Baja's 230 KV interconnections with San Diego Gas & Electric
Company at the Tijuana and La Rosita substations may be designated as point(s)
of delivery for Economy Energy transactions hereunder.

3.5
The supply or return of Economy Energy transactions shall be accounted for on
the basis of actual hourly flows as metered. The Parties' respective system
operators shall maintain records of actual hourly flows as metered, as well as
applicable Unitary Incremental Energy Costs and Unitary Decremental Energy
Costs for accounting and operating purposes. Upon mutual agreement of the
Parties' respective system operators, such Unitary Incremental Energy Costs may
be accounted for on a weekly basis and quoted in advance of any transactions
hereunder. Should the Supplier's Unitary Incremental Energy Cost differ
significantly from its quotation, the Supplier shall notify the Receiver of its
revised Unitary Incremental Energy Cost and the Receiver shall have the option
to curtail or interrupt its acceptance of further energy hereunder.

SECTION 4 – COMPENSATION BASIS

4.1
At the end of each month during the term of this Interchange Service C, a Party
supplying Economy Energy

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during that month shall bill the Receiver, and the Receiver shall have the
option to pay for such Economy Energy provided hereunder in USA dollars or by
the return of energy in accordance with this Section 4. Payments shall be made
in accordance with the provisions of Section 9.2 of the Interchange
Agreement.    

4.1.1
In the event the Receive elects to return energy to the Supplier as payment for
Economy Energy, then the Receiver shall return such energy at a rate equal to
120% of the Unitary Incremental Energy Cost of the supplier.

4.1.2
In the event the Receiver elects to pay in USA dollars (i) all or any portion of
the monthly billing or (ii) all or any portion of the balance in the Open
Account established pursuant to Section 4.2.1, then the Receiver shall pay for
such Economy Energy at a rate equal to 115% of the Unitary Incremental Cost of
the Supplier.

4.1.3
In the event the Receiver has not made payment for any portion of the Economy
Energy provided by the Supplier within five (5) months following the date
a monthly billing hereunder becomes due, then the Receiver shall pay for any
remaining portion of that monthly billing in USA dollars at a rate equal to 120%
of the Unitary Incremental Energy Cost of the Supplier.

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

4.2
On or before the date a monthly billing hereunder becomes due, the Receiver
shall (i) pay the amount of such billing in USA dollars or (ii) give written
notice from the Receiver's member on the Coordination Committee to the Supplier
that it elects to compensate the Supplier with energy deliveries in
accordance with the provisions of this Section 4; provided, however, that such
election may not be made for more than $500,000 (five hundred thousand) USA
dollars during any month or for an amount which would cause the balance in the
Open Account described in Section 4.2.1 to exceed $2,000,000 (two million) USA
dollars. These limits may be modified periodically by written agreement of the
Coordination Committee.

4.2.1
An Open Account will be established in which the Parties shall enter the value,
in USA dollars, of all monthly billings which were not paid when due
and in which a Receiver has made the election to return energy as provided by
Section 4.1.1 herein. Each Party will also enter into the Open Account
all payments made by either Party, whether in USA dollars or by return of
energy, in partial or total settlement of the outstanding balance of the
Open Account.

4.2.2
As soon as possible after the end of each month, the Party with a credit balance
in the Open Account at the end of each month ("Net Supplier")

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shall submit to the Party with a debit balance in the Open Account at the end of
each month ("Net Receiver") a statement showing the settlements and outstanding
monthly balances in the Open Account, together with interest accrued thereon.

4.2.3
The value in USA dollars of energy returned in partial or total settlement of
the outstanding balance of the Open Account shall be equal to Receiver's Unitary
Decremental Energy Cost associated with the return energy.

4.2.4
Payments made shall be applied first to the oldest outstanding monthly balance
in the Open Account until satisfied.

4.2.5
The outstanding balance carried at the end of each month in the Open Account
shall accrue interest, which shall be entered into the Open Account, at a
rate equal to one-twelve (1/12) the sum of the annual LIBOR rate (London
Interbank Offered Rate) in effect on the last day of such month, plus two
percent (2%).

SECTION 5 – GENERALITIES

5.1
In the event that this Interchange Service C is terminated, the obligations of
the Parties with respect to compensation not paid shall continue in effect
until they have been fulfilled.

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5.2
The Interchange Agreement, as amended by this Interchange Service C, remains in
full force and effect.

IN WITNESS WHEREOF, the Parties hereto have agreed upon the foregoing and have
executed this Interchange Service C in both Spanish and English in several
counterparts, and in the cities and dates mentioned hereunder.

EL PASO ELECTRIC COMPANY
 
COMISION FEDERAL DE ELECTRICIDAD
 
 
 
/s/Evern R. Wall
 
/s/[ILLEGIBLE]
 
 
 
Mr. Evern R. Wall
 
Ing. Fernando Hiriart Balderrama
President and Chairman of
 
General Director
the Board
 
 
 
 
 
Date: April 23, 1987
 
Date:  6/iv/87
 
 
 
Place: El Paso, Texas
 
Place: Mexico City

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INTERCHANGE SERVICE D AGREEMENT
FIRM CAPACITY
COMISION FEDERAL DE ELECTRICIDAD
AND
EL PASO ELECTRIC COMPANY

This Interchange Service D Agreement of Firm Capacity and Associated Energy is
executed pursuant the following antecedents and sections:

ANTECEDENTS

I.On April 14, 1982, the "COMISION FEDERAL DE ELECTRICIDAD" (hereinafter called
"CFE") and the EL PASO ELECTRIC COMPANY (hereinafter called "EPE") executed an
agreement for interchange of electric energy, which is called herein the "Basic
Agreement". The Basic Agreement continues to be in effect, pursuant to Section
2.1 thereof.

II.Pursuant to the provisions of Section 5.1 of the Basic Agreement with regard
to the Interchange Services, the specific terms and conditions of the services
furnished by one Party as the Supplier to the other Party, as the Receiver,
shall be fully described in the Agreements called Interchange Services, which,
once signed by the authorized officers and approved by the authorities with
jurisdiction, shall form a part of the Basic Agreement during the full term of
the latter or for a shorter term. Such Interchange Service Agreements may be
modified or terminated in accordance with its terms.

III.Pursuant to Section 5 of the Basic Agreement, the following Interchange
Service Agreements continue to be in force:

1

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Interchange Service A: Emergency Assistance
Interchange Service B: Short-term Firm Capacity
Interchange Service C: Economy Energy

IV.CFE recites that for execution of this Agreement it has obtained
authorization from the Ministry of Energy, Mines and State-Owned Industries,
with regard to the Law on Public Service of Electric Energy and Regulations
derived therefrom, as well as authorization from the Ministry of Commerce and
Industrial Promotion, pursuant to that law and its regulations, insofar as they
refer to the importation and exportation of electric energy and pursuant to the
Law on Acquisitions, Rentals and rendering of Services with regard to Personal
Property.

Such assertion is corroborated by certified copies of cited authorizations and
same copies which are attached hereto and hereby incorporated by reference.

V.CFE recites that, for execution and performance of this Agreement, it does not
need any other governmental permit or authorization from the Federal Government
of the Mexican United States.

VI.For its part, EPE, recites that it has permanent registration as a foreign
supplier in the Register of the Suppliers authorized by the Federal Public
Administration of the Ministry of Programming and Budgeting of the Mexican
Federal Government as well as the authorization of the Department of Energy of
the Federal Government of the United States of America, no other permit or
authorization being required from the Federal Government of the United States of
America.

2

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VII.EPE, likewise, recites that previous to the date of this Agreement, has
delivered to CFE certified copies of the registration and authorization
mentioned in the preceding antecedent. CFE acknowledges having received such
copies.

VIII.CFE declares that to cover the expenditures to be derived from the present
Agreement, CFE will utilize current budget funds as authorized by the Ministry
of Programming and Budgeting.

IX.The Parties hereto acknowledge that the authorization of the expenditures
referred to in the preceding antecedent apply only to the present budget year of
CFE and agree that execution of this Agreement for each of the subsequent budget
years shall be subject to the continuance of authorization for the disbursement
of funds, that in its case may be granted by the Ministry of Programming and
Budgeting.

SECTIONS

SECTION 1 - DEFINITIONS

For purposes of this Agreement, CFE and EPE agree to establish the following
conventional definitions:

1.1    "Associated Energy" - For the purposes of this Interchange Service D
Agreement, Associated Energy shall mean the energy scheduled by CFE pursuant to
Section 4 hereof, associated with Firm Capacity and provided by EPE hereunder.

3

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

1.2    "Average System Energy Cost" - Shall mean EPE's average cost of energy
generated by EPE's system resources and/or purchased by EPE during any invoicing
period. Currently, the EL PASO system resources include approximately 793 MW of
natural gas, 600 MW of nuclear and 104 MW of coal based resources.

1.3    "CFE-Juárez" - Shall have the meaning stipulated in Section 3.3 of the
Basic Agreement and is hereby incorporated by reference.

1.4    "EL PASO" - Shall have the meaning stipulated in Section 3.4 of the Basic
Agreement and is hereby incorporated by reference.

1.5    "Firm Capacity" - Shall mean capacity produced and supplied by EPE
pursuant to Section 4 hereof, which includes system reserves and is intended to
have assured reliability.

1.6    "Firm Capacity Charge" - The monthly charge in United States of America
dollars for each KW of Firm Capacity provided hereunder.

1.7    "Associated Energy Cost" - The monthly cost in United States of America
dollars for each KWH of energy provided hereunder which consists of the Average
System Energy Cost plus fifteen percent (15%), plus the cost of any third party
purchase power dedicated to providing service hereunder.

1.8    "Monthly Demand" - The highest hourly metered amount of Firm Capacity for
the month subject to a Minimum Monthly Demand charge as defined in Section 1.9.

1.9    "Minimum Monthly Demand" – For invoicing purposes, the Minimum Monthly
Demand from May 1, 1991 through December 31, 1991, shall be 40MW for the period
of

4

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January 1, 1992 through December 31, 1996 such amount shall be 120 MW for the
months of October through April and 150 MW for the months of May through
September.

In the event the Diablo-Insurgentes facilities are not operational by January 1,
1992, the Minimum Monthly Demand shall be subject to the Parties determination
as to the transfer capability, but in no case less than 80 MW.

SECTION 2 - PURPOSE

2.1    The purpose of this Interchange Service D Agreement is to set forth the
terms and conditions which will permit transactions of Firm Capacity and
Associated Energy between the electric systems of CFE-Juárez and EL PASO. This
Interchange Service D Agreement shall permit the contracting Parties hereto to
utilize more efficiently the generation of energy, as well as to permit a
greater flexibility of generation of energy and convenience of operation.

2.2    Beginning on the date that this Interchange Service D Agreement becomes
effective pursuant to Section 3 hereof, EPE shall supply to CFE-Juárez Firm
Capacity and Associated Energy pursuant to the terms and conditions hereunder.

SECTION 3 - TERM

3.1    This Interchange Service D Agreement shall take effect once signed by
both Parties and shall continue in force through December 31, 1996 and from
month to month thereafter unless terminated by either Party by thirty (30) days
written notice of termination; provided however, that the Parties shall have the
option to extend Firm Capacity service beyond December 31, 1996 subject to
mutual agreement of the Parties and negotiations regarding the Firm Capacity
Charge and/or amounts of Firm Capacity.

5

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SECTION 4 - FIRM CAPACITY AND ASSOCIATED ENERGY

4.1    EPE shall make varying amounts of Firm Capacity and Associated Energy
available to CFE and CFE agrees to pay all the corresponding charges in
accordance with the conditions in Sections 1.9 and 5 under this Interchange
Service D Agreement.

4.2    CFE shall furnish EPE with schedules of its Firm Capacity and Associated
Energy requirements from EPE prior to September 1 of each year for the following
calendar year. In addition, by the twenty-fifth day of each month, CFE shall
furnish EPE with its estimated Firm Capacity and Associated Energy requirements
under this Interchange Service D Agreement for the following month.

4.3    In the event of an emergency either Party hereto may interrupt or
restrict the supply or receipt of Associated Energy by means of verbal notice to
the other Party. For the purposes of this Section 4.3 and in accordance with
Section 3.10 of the Basic Agreement, an emergency is any unforeseeable or
inevitable temporary circumstance not within the control of the affected Party
(such as the loss or reduction of generating or transmission capacity) which
affects the system of either of the Parties, which prevents, interferes or
jeopardizes the rendering of satisfactory service in the affected system, as a
result of any cause other than: (a) Scheduled Maintenance or (b) an anticipated
fuel supply deficiency.

4.4    Normal points of delivery shall be at either the Ascarate-Rivereña or
Diablo-Insurgentes interconnection points with CFE-Juárez system or other points
mutually agreed upon by the Parties.

6

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SECTION 5 - BASIS FOR COMPENSATION

5.1    EPE shall provide to CFE and CFE shall pay in United States of America
Dollars for Firm Capacity and Associated Energy for the term of this Interchange
Service D Agreement as follows:

5.1.1    The Firm Capacity Charge hereunder shall be as indicated below:
Period
 
Monthly Firm Capacity Charge
05/01/91 - 12/31/91
 
$15.00/KW-month
01/01/92 - 12/31/92
 
$15.60/KW-month
01/01/93 - 12/31/93
 
$16.70/KW-month
01/01/94 - 12/31/94
 
$17.10/KW-month
01/01/95 - 12/31/95
 
$17.50/KW-month
01/01/96 - 12/31/96
 
$17.90/KW-month

5.1.2    Charge for Associated Energy: The charge for Associated Energy shall be
calculated using a base energy charge of $0.01870 per KWH.

5.2    Monthly Invoicing: The monthly invoice for services of Firm Capacity and
Associated Energy provided by EPE to CFE hereunder shall be the sum of the Firm
Capacity Invoicing, plus the Associated Energy Invoicing, plus the Base Energy
Charge Invoicing Adjustment as indicated immediately below:

Firm Capacity Invoicing:

The monthly Firm Capacity Charge ($/Kw-month) pursuant to Section 5.1.1 times
the Monthly Demand as defined in Section 1.8 hereunder for Firm Capacity. If the
Monthly Demand is less than the Minimum Monthly Demand then the Minimum Monthly
Demand shall apply.

    

7

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

Associated Energy:
Invoicing
The base energy charge of $0.01870 times the amount of KWH provided during the
invoiced month.
 
 
Base Energy Charge
Invoicing Adjustment:
The difference between the previous month's Associated Energy Cost and the base
energy charge times the amount of KWH provided in that month.

For the convenience of the Parties, examples of monthly invoicing are included
in Exhibit A, attached hereto and hereby incorporated by reference.

5.3    The Parties hereto acknowledge that the authorization for the
expenditures to be derived from the present Agreement granted by the Ministry of
Programming and Budgeting to CFE correspond only to the preset budget year and
agree that execution of this Agreement for each of the subsequent budget years
shall be subject to the continuance of authorization for the disbursement of
funds that in its case may be granted by the Ministry of Programming and
Budgeting.

5.4    Within ten (10) calendar days following the end of each month and for
each month during the term of this Interchange Service D Agreement, EPE shall
bill CFE and CFE shall pay to EPE for Firm Capacity and Associated Energy
precisely in United States of America dollars and at the bank in the United
States of America that from time to time EPE indicates to CFE, within twenty-one
(21) calendar days upon the receipt of such invoice. The payments shall be made
for the total Monthly Invoicing amount pursuant to Section 5.2 hereunder.

SECTION 6 - GENERAL STANDARDS

6.1    In the event this Interchange Service D Agreement is terminated, the
obligations of CFE with regard to unpaid compensation shall continue until they
haven fully paid.

8

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

6.2    The Basic Agreement executed between the Parties, and except for the
amendments thereto agreed in this Interchange Service D Agreement shall continue
in full force and effect.

6.3    In the event of any discrepancy between the provisions of the Basic
Agreement and those agreed herein, the provisions of this Interchange Service D
Agreement shall prevail, as provided in Section 7.1 of the Basic Agreement.

IN TESTIMONY WHEREOF the Parties hereto have signed this Interchange Service D
both in Spanish and in English in several counterparts and, in the cities and on
the dates which follow.

EL PASO ELECTRIC COMPANY
 
COMISION FEDERAL DE ELECTRICIDAD
 
 
 
/s/David H. Wiggs, Jr.
 
/s/[ILLEGIBLE]
 
 
 
David H. Wiggs, Jr.
 
Ing. Guillermo Guerrero Villalobos
CEO, Chairman and President
 
Director General
the Board
 
 
 
 
 
Date: March 18, 1991
 
Date: 3 de abril de 1991
Place: El Paso, Texas
 
Place: Mexico City

9

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

INTERCHANGE SERVICE D AGREEMENT
FIRM CAPACITY
COMISION FEDERAL DE ELECTRICIDAD
AND
EL PASO ELECTRIC COMPANY

Exhibit A

Examples of Monthly Invoicing

For the convenience of the Parties, examples of monthly invoicing are included
in this Exhibit A.

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

image3a07.jpg [image3a07.jpg]
 
El Paso Electric Company
P.O.Box 982
El Paso.Texas 79960
(915) 543-5711

    
Exhibit A
Page 1 of 3

COMISION FEDERAL DE ELECTRICIDAD    March 18, 1991

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

Invoice for Firm Capacity and Associated Energy for the month of ________ 1991
pursuant to the EPE-CFE Interchange Service D Agreement.

Account Number 2146-1000-01

Firm Capacity Invoicing:
 
 
40,000 KW of Demand @ $15.00/KW
$
600,000.00

 
 
 
 
Associated Energy Invoicing:
 
 
20,440,000 KWH @ $0.0187/KWH
$
382,228.00

 
 
 
 
Base Energy Charge Invoicing Adjustment:
 
 
19,000,000 KWH @ ($0.0157/KWH - $0.0187/KWH)
$
57,000.00

cr
 
 
 
 
 
 
Total
$
925,228.00

 

Date of receipt    

Signature    

Please Remit Payment to:
First City National Bank of El Paso
Routing Transit No. 1120-2233-2
Credit El Paso Electric Company
Account No. 4500474

For illustration purposes only

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

image3a07.jpg [image3a07.jpg]
 
El Paso Electric Company
P.O.Box 982
El Paso.Texas 79960
(915) 543-5711

Exhibit A
Page 2 of 3

COMISION FEDERAL DE ELECTRICIDAD    March 18, 1991

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

Invoice for Firm Capacity and Associated Energy for the month of ________ 1991
pursuant to the EPE-CFE Interchange Service D Agreement.

Account Number 2146-1000-01

Firm Capacity Invoicing:
 
 
120,000 KW of Demand @ $15.60/KW
$
1,872,000.00

 
 
 
 
Associated Energy Invoicing:
 
 
61,320,000 KWH @ $0.0187/KWH
$
1,146,684.00

 
 
 
 
Base Energy Charge Invoicing Adjustment:
 
 
60,000,000 KWH @ ($0.0185/KWH - $0.0187/KWH)
$
12,000.00

cr
 
 
 
 
 
 
Total
$
3,006,684.00

 

Date of receipt    

Signature    

Please Remit Payment to:
First City National Bank of El Paso
Routing Transit No. 1120-2233-2
Credit El Paso Electric Company
Account No. 4500474

For illustration purposes only

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

image3a07.jpg [image3a07.jpg]
 
El Paso Electric Company
P.O.Box 982
El Paso.Texas 79960
(915) 543-5711

Exhibit A
Page 3 of 3

COMISION FEDERAL DE ELECTRICIDAD    March 18, 1991

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

Invoice for Firm Capacity and Associated Energy for the month of ________ 1991
pursuant to the EPE-CFE Interchange Service D Agreement.

Account Number 2146-1000-01

Firm Capacity Invoicing:
 
 
150,000 KW of Demand @ $16.70/KW
$
2,505,000.00

 
 
 
 
Associated Energy Invoicing:
 
 
76,650,000 KWH @ $0.0187/KWH
$
1,433,355.00

 
 
 
 
Base Energy Charge Invoicing Adjustment:
 
 
71,000,000 KWH @ ($0.0217/KWH - $0.0187/KWH)
$
213,000.00

cr
 
 
 
 
 
 
Total
$
4,151,355.00

 

Date of receipt    

Signature    

Please Remit Payment to:
First City National Bank of El Paso
Routing Transit No. 1120-2233-2
Credit El Paso Electric Company
Account No. 4500474

For illustration purposes only

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

INTERCHANGE AGREEMENT
BETWEEN
EL PASO ELECTRIC COMPANY
AND
COMISION FEDERAL DE ELECTRICIDAD
OPERATING PROCEDURE No. 1
Revision No. 1

OPERATING PROCEDURES OF INTERCONNECTIONS AND UNITS BLACK
START ASSISTANCE.

1.PURPOSE:

Section 6.7.4 of the Interconnection Agreement ( Agreement ) between El Paso
Electric Company ( EPE ) and Comision Federal de Electricidad ( CFE ), authorize
the Coordinating Committee to determine operating rules and procedures to
provide service under the Agreement. Operating Procedure No. 1 will provide
the rules for the interchange of energy under the Interchange Agreement; and
will also provide for black start interchange assistance.

1

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

2.INTERCONNECTION OPERATING PROCEDURES:

Under normal operating conditions, the interchange of energy will be maintained
using the two interconnections. Under emergency conditions, assistance will be
requested and energy will be taken subject to the supplying party conditions,
such energy will be accounted as emergency energy pursuant to
Section 4 of Interchange Service A.

3.BLACK START ASSITANCE:

During the time of emergency conditions and requirement of
black start assistance, the party needing such power will inform the supplying
party of the situation and will receive, with such notice only, 10 MW for black
start, such power will not be accounted under any other type of interchange but
will be compensated pursuant to Section 4 of Interchange Service A.

APPROVED
 
APPROVED
EL PASO ELECTRIC COMPANY
 
COMISION FEDERAL DE ELECTRICIDAD
 
 
 
/s/John A. Whitacre
 
/s/[ILLEGIBLE]
 
 
 
John A. Whitacre
 
Ing. Augusto Avalos Reyna
Assistant Vice-President
 
Jefe Centro de Control
System Operations
 
Area Norte
 
 
 
Date: 02 July 1991
 
 
 
 
 
City: Gómez Palacio, Durango, México.
 
 

2

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

 
image4a06.jpg [image4a06.jpg]
                                       

3

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

INTERCHANGE AGREEMENT
BETWEEN
EL PASO ELECTRIC COMPANY
AND
COMISION FEDERAL DE ELECTRICIDAD

OPERATING PROCEDURE NO. 2
COORDINATION OF SERVICES
REVISION NO. 1

1.
PURPOSE:

Pursuant to Section 6.7.4 of the Interchange Agreement between El Paso Electric
Company (EPE) and Comision Federal de Electricidad (CFE), the Coordinating
Committee is authorized to determine operating rules and procedures to provide
service under the Interchange Agreement. Operating Procedure No. 2 will allow
for the common provision of various interchange services between the parties and
will simplify their accountability.

2.
INTERCHANGE SERVICES:

The parties have agreed to the following interchange services:
a.
Interchange Service A-Emergency Assistance
b.
Interchange Service B-Short-Term Capacity
c.
Interchange Service C-Economy Energy
d.
Interchange Service D-Firm Capacity

1

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

3.PROCEDURES FOR THE INTERCHANGE OF SERVICES:
a.
Firm Capacity Service is a service with priority and assured reliability to CFE,
as such it is a basic service.

Firm Capacity Service has priority over the interchange of economy energy and
other transactions with CFE, unless the parties agree otherwise.

When Economy Energy and/or Emergency Assistance is required in addition to Firm
Capacity, the parties will follow the procedures listed in paragraphs (3.b) and
(3.c).

b.
Emergency Assistance is a service with priority and will be available to the
parties upon mutual agreement of the system operators and will be under the
terms and conditions of Interchange Service A and according to the following
procedures:

1)
The requesting party will notify the supplying party's system operator of the
need for Emergency Assistance, type of emergency, amount, point(s) of delivery
and estimated duration of the emergency.

2)
The supplying party will provide Emergency Assistance to the requesting party as
mutually agreed. During the time when EPE provides Emergency Assistance and Firm
Capacity to CFE, the energy delivered to CFE will be considered as associated
energy to Firm Capacity until the Maximum Energy Demand of

2

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

Firm Capacity is reached by CFE during a period of time. The Maximum Energy
Demand of CFE is the agreed upon Forecasted Maximum Demand for the period and
all energy associated with such demand assuming a 100 percent load factor. Any
energy delivered to CFE over the Maximum Energy Demand will be considered as
service under Emergency Assistance and will be treated as such, unless the
parties agree otherwise.

c.
Economy Energy Service is a nonfirm service with a reduced priority which may be
interrupted by the supplying party with a minimum prior notice to the other
party.    This service will be delivered pursuant to Interchange Service C and
the following procedures:

1)
The requesting party will notify the supplying party's system operator of the
need to purchase Economy Energy including the amount, point(s) of delivery and
estimated duration of purchase.

2)
The supplying party will provide Economy Energy to the requesting party as
mutually agreed.    During the time EPE provides Economy Energy and Firm
Capacity to CFE, the energy delivered to CFE will be considered as associated
energy to Firm Capacity until the Maximum Energy Demand of Firm Capacity is
reached by CFE during a period of time. The Maximum Energy Demand of CFE is the
agreed upon Forecasted Maximum Demand for the period and all energy associated
with such demand assuming a 100 percent load factor. Any energy

3

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

delivered to CFE over the Maximum Energy Demand will be considered as Economy
Energy Service and will be treated as such, unless the parties agree otherwise.

3)
In the event of an emergency in EPE's system, EPE will notify CFE of such an
emergency and if CFE can not reduce the demand of economy energy during the next
hour of receiving such notification from EPE, EPE may take any action it
considers necessary to preserve its system.

4.
MONTHLY BILLING FOR INTERCHANGE SERVICES: When a combination of services occur
during a month, the billing of each service will be determined as follows:

a.
Firm Capacity only. The monthly billing will be determined using the actual
maximum demand during a billing period, pursuant to Interchange Service D, plus
the associated energy delivered during the month.

Pursuant to section 4.3 of Interchange Service D, when upon EPE's request a
reduction in firm capacity is made, CFE may request a meeting to agree upon the
adjustment to the Monthly Demand component of the monthly Firm Capacity
Invoicing.

b.
Firm Capacity and Economy Energy. The monthly billing for Firm Capacity will be
determined by the Forecasted Maximum Demand and its associated energy. The
Forecasted Maximum Demand is an agreed to amount equal to or greater than the
Minimum Monthly Demand established in Interchange Service D that CFE and EPE set
on or before the first day of the month for that month's billing cycle. This
agreement may be increased by the Parties if system conditions

4

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

develop that would affect the agreed to amount. The remaining energy will be
considered Economy Energy using paragraph (3.c.2.) and will be billed pursuant
to Interchange Service C.

c.
Firm Capacity and Emergency Assistance. The monthly billing for firm capacity
will be determined in accordance with the Forecasted Maximum Demand and its
associated energy as described in paragraph (4.b). The remaining energy will be
treated as Emergency Assistance using paragraph (3.b.2) and will be billed
pursuant to Interchange Service A.

d.
Firm Capacity, Economy Energy and Emergency Assistance. The monthly billing for
the combination of Firm Capacity and Economy Energy and/or Emergency Assistance
will be the sum determined as described in paragraphs (4b) and (4c).

Approved By
 
Approved By
 
 
 
El Paso Electric Company
 
Comisión Federal De Electricidad
 
 
 
/s/John A. Whitacre
 
/s/[ILLEGIBLE]
 
 
 
John A. Whitacre
 
Ing. Augusto Avalos Reyna
Assistant Vice-President
 
Jefe Centro de Control
System Operations
 
Area Norte
 
 
 
Date: 12 May 1993
 
 
 
 
 
City: Gómez Palacio, Durango, México
 
 

5

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

INTERCHANGE AGREEMENT
BETWEEN
EL PASO ELECTRIC COMPANY
AND
COMISION FEDERAL DE ELECTRICIDAD
OPERATING PROCEDURE No. 3
COMMUNICATION AND COORDINATION
OF
SYSTEM OPERATIONS

1.PURPOSE:

Pursuant to Section 6.7.4 of the Interchange Agreement between El Paso Electric
Company (EPE) and Comisión Federal de Electricidad (CFE), the Coordinating
Committee is authorized to determine operating rules and procedures to provide
service under the Interchange Agreement. The Parties believe that improved
communication and coordination activities will minimize the effects to the
extent possible of electrical disturbances that occur on one Party's system from
affecting the other Party's system. This Operating Procedure No. 3 is
established to promote greater communication and coordination under the
different operating system conditions that would reduce the system reliability
as defined by WSCC reliability criteria.

2.PROCEDURES FOR SWITCHING COORDINATION:

2.1    Switching under normal system conditions:

2.1.1
Each Party shall provide the other Party with a minimum twenty­-four (24) hour
notice prior to initiating any planned switching procedures regarding
transmission lines, transformers or generators that could affect the reliability
of the parties interconnected operations.

1

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

2.1.2
Each Party shall provide the other Party with a minimum twenty-four (24) hour
notice prior to any scheduled or planned outages that might affect the quality
of service to that Party's customers.

2.2    Switching under emergency conditions:

2.2.1
When possible, emergency switching that may affect interconnected operations
shall be coordinated between the Parties' respective system controllers prior to
switching taking place.

2.2.2
In any event, emergency switching activities that may affect interconnected
operations shall be communicated to the Party as soon as practical following the
switching activity.

3.COMMUNICATIONS:

3.1    Communication checks during normal operations:

3.1.1
The Parties shall notify each other of scheduled switching operations within the
interconnected area.

3.2    Communications checks during an emergency:

3.2.1.
System controllers of CFE shall notify EPE when there is an emergency in the CFE
system that may affect EPE operations.

3.2.2.
System controllers of EPE shall notify CFE when there is an emergency in the EPE
system that may affect CFE operations.

3.3
The communication contemplated in 3.1 and 3.2 above is to be accomplished with
existing telephone circuits. Contact is to be made between the system
controllers as soon as possible upon the occurrence of an emergency condition as
determined by each Party.

4.
The Parties shall meet at least once a quarter to facilitate greater
communication and coordination of operations affecting interconnected
operations.

2

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

5.
Exhibit A is a list of contacts that shall be used during system operations.
This exhibit shall be revised during the quarterly meetings described in Section
4 above and shall be updated as appropriate.

6.
Following a system disturbance affecting interconnected operations, the Parties
shall meet within fifteen (15) days thereafter to exchange technical operating
data information and, if deemed necessary, set another meeting date to
investigate such disturbance and initiate activities that will prevent future
disturbances of a similar nature or mitigate the effects of such disturbances if
prevention is impractical.

APPROVED
 
APPROVED
 
 
 
El Paso Electric Company
 
Comisión Federal De Electricidad
 
 
 
/s/John A. Whitacre
 
/s/[ILLEGIBLE]
 
 
 
John A. Whitacre
 
Ing. Augusto Avalos Reyna
Assistant Vice President
 
Jefe del Centro de Control
System Operations
 
Area Norte
 
 
 
Date: 12 Mayo 1993
 
 
 
 
 
City: Gómez Palacio, Dgo. México
 
 

3

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

INTERCHANGE AGREEMENT
BETWEEN
EL PASO ELECTRIC COMPANY
AND
COMISION FEDERAL DE ELECTRICIDAD
OPERATING PROCEDURE No. 3
COMMUNICATION AND COORDINATION OF
SYSTEM OPERATIONS

EXHIBIT A

COMISION FEDERAL DE ELECTRICIDAD CONTACTS

NAME
FUNCTION
TELEPHONE
System Controller
On Duty
(24 Hours)
(011-52-16) 15-44-19
 
 
 
Ing. Adrián Aguirre
Jefe del Departamento de
Operaciones
(011-52-16) 15-44-79
Cellular
(011-52-16) 28-11-95
 
 
 
Ing. Armando Fernández
Jefe del Departamento
Subárea Cd. Juárez
(011-52-16) 15-47-14
Cellular
(011-52-16) 28-26-01

EL PASO ELECTRIC COMPANY CONTACTS

NAME
FUNCTION
TELEPHONE
 
 
 
System Controller
On Duty
(24 Hours)
(915) 543-5890
 
 
 
Mr. Bill Massie
Supervisor-System Control
(915) 543-5887
Cellular
(915) 525-8093
 
 
 
Mr. John A. Whitacre
Assistant Vice President
System Operations
(915) 543-5888
Cellular
(915) 525-8094

APPROVED
 
APPROVED
 
 
 
El Paso Electric Company
 
Comisión Federal De Electricidad
 
 
 
/s/John A. Whitacre
 
/s/[ILLEGIBLE]
 
 
 
John A. Whitacre
 
Ing. Augusto Avalos Reyna
Assistant Vice President
 
Jefe del Centro de Control
System Operations
 
Area Norte

1

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

INTERCHANGE SERVICE E AGREEMENT
BLOCK ENERGY
COMISION FEDERAL DE ELECTRICIDAD
AND
EL PASO ELECTRIC COMPANY

This Interchange Service E Agreement of Block Energy is executed pursuant the
following antecedents and sections:

ANTECEDENTS

I.
On April 14, 1982, the "COMISION FEDERAL DE ELECTRICIDAD" (hereinafter
called "CFE") and the EL PASO ELECTRIC COMPANY (hereinafter called "EPE")
executed an agreement for interchange of electric energy, which is called herein
the "Basic Agreement". The Basic Agreement continues to be in effect, pursuant
to Section 2.1 thereof.

II.
Pursuant to the provisions of Section 5.1 of the Basic Agreement with regard to
the Interchange Services, the specific terms and conditions of the services
furnished by one Party as the Supplier to the other Party, as the Receiver,
shall be fully described in the Agreements called Interchange Services, which,
once signed by the authorized officers and approved by the authorities with
jurisdiction, shall form a part of the Basic Agreement during the full term of
the latter or for a shorter term. Such Interchange Service Agreements may be
modified or terminated in accordance with its terms.

III.
Pursuant to Section 5 of the Basic Agreement, the following Interchange Service
Agreements continue to be in force:

Interchange Service A:
Emergency Assistance
 
 
Interchange Service B:
Short-term Firm Capacity

1

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

Interchange Service C:
Economy Energy
 
 
Interchange Service D:
Firm Capacity

IV.
CFE recites that for execution of this Agreement it is in the process of
obtaining authorization and in some cases has obtained authorization from the
Ministry of Energy, with regard to the Law on Public Service of Electric Energy
and Regulations derived therefrom, as well as authorization from the Secretaria
de Hacienda y Credito Publico, pursuant to that law and its regulations, insofar
as they refer to the importation and exportation of electric energy, and to the
1995 Budget Authorization, and pursuant to the Law on Acquisitions, Rentals and
rendering of Services with regard to Personal Property. Such assertion is
corroborated by certified copies of cited authorizations and same copies which
are attached hereto and hereby incorporated by reference.

V.
CFE recites that, for execution and performance of this Agreement, it does not
need any other governmental permit or authorization from the Federal Government
of the United States of Mexico.

VI
For its part, EPE, recites that it has the authorization of the Department of
Energy of the Federal Government of the United States of America, no other
permit or authorization being required from the Federal Government of the United
States of America.

VII.
EPE, likewise, recites that previous to the date of this Agreement, has
delivered to CFE certified copies of the registration and authorization
mentioned in the preceding antecedent    CFE acknowledges having received such
copies.

2

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

VIII.
CFE declares that to cover the expenditures to be derived from the present
Agreement, CFE will utilize current budget funds as authorized by the Secretaria
de Hacienda y Credito Publico.

IX.
The signatories hereto represent that they have been duly authorized to enter
into this Agreement on behalf of the Party for which they sign, as corroborated
by documentation attached and made part of this document.

SECTIONS

SECTION 1 - DEFINITIONS

For purposes of this Agreement, CFE and EPE agree to establish the following
conventional definitions:

1.1
"Block Energy" - For purposes of this Interchange Service E Agreement, "Block
Energy" shall be energy scheduled by CFE in accordance with Section 4 of this
Agreement, associated with a corresponding amount of capacity provided by EPE.

1.2
"CFE-Juárez" - Shall have the meaning stipulated in Section 3.3 of the Basic
Agreement and is hereby incorporated by reference.

1.3
"EL PASO" - Shall have the meaning stipulated in Section 3.4 of the Basic
Agreement and is hereby incorporated by reference.

1.4
"Block Energy Cost" - The monthly charge in United States of America dollars for
each KWH of energy in accordance with the rate in Section 5.1.2.

3

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

SECTION 2 - PURPOSE

2.1
The purpose of this Interchange Service E Agreement is to set forth the terms
and conditions which will allow for transactions of Block Energy between the
electric systems of CFE-Juárez and EL PASO. This Interchange Service E Agreement
shall permit the contracting Parties hereto to utilize more efficiently the
generation of energy, as well as to permit a greater flexibility of generation
of energy and convenience of operation.

2.2
Beginning on the date that this Interchange Service E Agreement becomes
effective pursuant to Section 3 hereof, EPE shall supply to CFE-Juárez Block
Energy pursuant to the terms and conditions hereunder.

SECTION 3 - TERM

3.1
This Interchange Service E Agreement shall, upon execution by both Parties,
become effective as of June 1, 1995 and shall continue through September 30,
1995 and upon mutual agreement, may continue thereafter on a month-to-month
basis but under no circumstance shall extend beyond December 31, 1995.

SECTION 4 - BLOCK ENERGY

4.1
EPE shall make available varying amounts of Block Energy up to 50 MW to CFE in
accordance with Section 1.1 and CFE agrees to pay all the corresponding charges
in accordance with the conditions in Section 5 under this Interchange Service E
Agreement.

4.2
CFE shall furnish EPE with schedules of its Block Energy requirements from EPE
by 12:00 pm Mountain Standard Time (MST) the day before such schedule is to be

4

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

effective. Schedules may be also made on a weekly or monthly basis. Schedules of
Block Energy shall be subordinate to and shall be deemed as amounts in excess of
the Minimum Monthly Demand for Firm Capacity pursuant to Interchange Service
Schedule D Agreement.

4.3
In the event of an emergency (as defined in Section 4.3 of the Interchange
Service D Agreement) during the term of this Interchange Service Schedule E
Agreement, either Party may interrupt or restrict the supply or receipt of Block
Energy by means of verbal notice to the other Party. The Parties agree that EPE
will first curtail or interrupt CFE's schedules of Economy Energy, then Block
Energy if necessary, prior to interrupting CFE's schedules of Firm Capacity.

4.4
Points of delivery shall be the Ascarate-Riverena and/or Diablo-Insurgentes
interconnection points with CFE-Juárez system or other mutually agreed upon
points.

SECTION 5 – BASIS FOR COMPENSATION

5.1
EPE shall provide to CFE and CFE shall pay in United States of America Dollars
for Block Energy for the term of this Interchange Service E Agreement as
follows:

5.1.2
Block Energy Charge: The charge for Block Energy shall be $35.00 United
States of America dollars per megawatt hour delivered under this Agreement.

5.2
Within ten (10) calendar days following the end of each month and for each month
during the term of this Interchange Service E Agreement, EPE shall bill CFE and
CFE shall pay to EPE for Block Energy precisely in United States of America
dollars and at the bank in the United States of America that from time to time
EPE indicates to CFE, within twenty-one (21) calendar days upon the receipt of
such invoice.

5

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

SECTION 6 - GENERAL STANDARDS

6.1
In the event this Interchange Service E Agreement is terminated, the obligations
of CFE with regard to unpaid compensation shall continue until they have been
fully paid.

6.2
The Basic Agreement executed between the Parties, except for modifications
agreed to in this Interchange Service E Agreement, shall continue in full force
and effect.

6.3
In the event of any discrepancy between the provisions of the Basic Agreement
and those agreed herein, the provisions of this Interchange Service E Agreement
shall prevail, as provided in Section 7.1 of the Basic Agreement.

IN TESTIMONY WHEREOF the Parties hereto have signed this Interchange Service E
Agreement both in Spanish and in English on this      day of July 1995.

EL PASO ELECTRIC COMPANY
 
COMISION FEDERAL DE ELECTRICIDAD
 
 
 
/s/[ILLEGIBLE]
 
/s/[ILLEGIBLE]
 
 
 
John C. Horne
 
Ing. Enrique Villanueva Landeros
Vice President
 
Subdirector de Transmision-
 
 
Transformacion Y Control
 
 
 
 
 
/s/[ILLEGIBLE]
 
 
Ing. Raymundo Campos Milan
 
 
Coordinador del CENACE

    

Translation Certification on back.

6

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

I, ELENA MILÁN REYES, expert translator acknowledged by the Superior Court of
Justice of the Federal District of Mexico as proven by the Judiciary Gazette of
March 31, 1995, CERTIFY THAT: to the best of my knowledge and belief this is a
true, correct and complete translation of he original document that was brought
before me.

México, Distrito Federal, August 2, 1995

 
 
/s/Elena Milan
 
 
ELENA MILÁN REYES
 
 
Ave. Copilco 76-A10-503

        

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

CONVENIO DE SERVICIO DE INTERCAMBIO E
BLOQUES DE ENERGIA
QUE CELEBRAN
COMISION FEDERAL DE ELECTRICIDAD
Y
EL PASO ELECTRIC COMPANY

El presente Convenio de Servicio de Intercambio E de Bloques de Energía lo
celebran las partes arriba indicadas de acuerdo con las siguientes antecedentes
y secciones:

ANTECEDENTES

I.    El 14 de abril de 1982, la "COMISION FEDERAL DE ELECTRICIDAD" (en adelante
identificada como "CFE") y EL PASO ELECTRIC COMPANY (en adelante identificada
como "EPE"), celebraron un convenio para el intercambio de energía eléctrica, el
cual aquí se identificará como el "Convenio Básico". Tal convenio continúa en
vigor de conformidad con la Sección 2.1 del mismo.

II.     De acuerdo con las estipulaciones de la Sección 5.1 del Convenio Básico
en relación con los servicios de intercambio, los términos y condiciones
específicas de los servicios a ser proveídos por una de las partes como
Proveedor a la otra parte como Receptor, se describen en detalle en los
convenios denominados Servicios de Intercambio, los cuales, han sido firmados
por funcionarios autorizados y aprobados por las autoridades competentes y
forman parte integral del Convenio Básico durante toda la vigencia de este
último o por un término más corto. Tales Convenios de Servicio de intercambio
pueden ser modificados o terminados de acuerdo a lo estipulado en los mismos.

III.     De acuerdo con la Sección 5 del Convenio Básico, los siguientes
convenios de Servicio de Intercambio continúan en vigor:
Servicio de Intercambio A:
Asistencia en Emergencia.
 
 
Servicio de Intercambio B:
Capacidad Firme a Corto Plazo.

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Servicio de Intercambio C:
Energía Económica;
 
 
Servicio de Intercambio D:
Capacidad Firme y Energía Asociada

IV.     CFE declara, que para la celebración de este convenio está tramitando y
en algunos casos ya ha obtenido autorización por parte de la Secretaría de
Energía, por lo que toca a la Ley del Servicio Público de Energía Eléctrica y su
Reglamento; y por parte de la Secretaría de Hacienda y Crédito Público por lo
que se refiere a la importación y exportación de energía eléctrica y a la
autorización presupuestal para 1995, de conformidad con la Ley de Aduanera y con
la Ley de Presupuesto, Contabilidad y Gasto Público. Tal aseveración se
corrobora con copias certificadas de las solicitudes y autorizaciones obtenidas,
mismas copias que se agregan al presente convenio.

V.     Igualmente, CFE declara que para la celebración y firma de este convenio,
no requiere ningún otro permiso o autorización por parte del Gobierno Federal de
los Estados Unidos Mexicanos.

VI.     Por su parte EPE declara que cuenta con la autorización del Departamento
de Energía del Gobierno Federal de los Estados Unidos de América y que para la
celebración de este convenio no requiere ningún otro permiso o autorización del
Gobierno Federal, Estatal o Local de los Estados Unidos de América.

VII     De igual forma EPE declara, que previamente a la fecha de este Convenio,
ha entregado a CFE copias certificadas de la autorización mencionada en el
antecedente inmediato anterior.

VIII     CFE declara que para cubrir las erogaciones que se deriven del presente
Convenio, utilizará los fondos de la correspondiente partida presupuestal
autorizada por la Secretaría de Hacienda y Crédito Público.

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IX     Los representantes de cada una de las Partes declaran que han sido
autorizados por sus respectivas empresas para suscribir este Convenio y cuentan
con facultades legales suficientes para este efecto, conforme a la documentación
que exhiben y se agrega al presente Convenio como anexo.

S E C C I O N E S

SECCION 1 - DEFINICIONES

Para los efectos de este convenio, CFE y EPE convienen en establecer las
siguientes definiciones convencionales:

1.1.         "Bloque de Energía." Para propósito de este Convenio de Servicio de
intercambio E, "Bloque de Energía" significará la energía programada por CFE de
acuerdo a la Sección 4 de este convenio, relacionada con una cantidad de
capacidad correspondiente y proporcionada por EPE bajo este convenio.

1.2.         "CFE-Juárez". Tendrá el significado estipulado en la Sección 3.3
del Convenio Básico, y misma sección que se incorpora aquí por referencia, tal y
como si se insertara a la letra.

1.3.         "El Paso. Tendrá el significado estipulado en la Sección 3.4 del
Convenio Básico, y misma sección que se incorpora aquí por referencia, tal y
como si se insertara a la letra.

1.4.         "Costo por Bloque de Energía". El costo mensual en dólares de los
Estados Unidos de América por cada KWh de la energía, al precio que se conviene
en la Sección 5.1.2.

SECCION 2 - PROPOSITO

2.1         El propósito de este Convenio de Servicio de intercambio E es el
señalar los términos y

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condiciones que permitirán transacciones de Bloques de Energía entre los
sistemas eléctricos de CFE-Juárez y EL PASO. Este Convenio de Servicio de
Intercambio E permitirá a las partes contratantes el utilizar más eficientemente
la generación de energía, así como permitir una mayor flexibilidad de generación
de energía y conveniencia de operación.

2.2     A partir de la fecha en que este Convenio de Servicio de Intercambio E
entre en vigor de acuerdo a su Sección 3, EPE suministrara a CFE-Juárez Bloques
de Energía, de acuerdo con las condiciones y términos estipulados en este
convenio.

SECCION 3 - VIGENCIA

3.1     Este Convenio de Servicio de Intercambio E entrará en vigor después de
firmado por ambas partes contratantes a partir del 1° de junio de 1995 y
continuará vigente hasta el 31 de septiembre de 1995, y de mutuo acuerdo podrá
extenderse de tal fecha en adelante, de mes a mes, pero por ninguna
circunstancia más allá del 31 de diciembre de 1995.

SECCION 4 - BLOQUES DE ENERGÍA

4.1     EPE pondrá a disposición de CFE cantidades variables de energía hasta
por 50 MW de Bloque de Energía, y CFE se compromete a cubrir los cargos
correspondientes de acuerdo con las condiciones establecidas en las secciones
1.1 y 5 de este Convenio de Servicio de Intercambio E.

4.2     CFE deberá proporcionar a EPE sus programas de Bloque de Energía a las
12:00 P.M. Tiempo de la Montaña, del día anterior al que se haga efectiva la
programación. Tales programas deberán formularse con una base semanal o mensual.
Los programas de Bloque de Energía deberán ser considerados en exceso a la
Demanda Mínima Mensual de Capacidad Firme, de acuerdo al Convenio de Servicio de
Intercambio D.

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4.3     En caso de una Emergencia (como se le define en la Sección 4.3. del
Convenio de Servicio de Intercambio D) que ocurra durante el plazo de vigencia
de este Convenio de Servicio de Intercambio E, cualquiera de las Partes
contratantes puede interrumpir o restringir el suministro o recepción del Bloque
de Energía mediante aviso verbal a la otra Parte contratante. Las Partes
contratantes están de acuerdo en que EPE cortará o interrumpirá primero la
Energía Económica, después el Bloque de Energía y por último, de ser necesario,
la Capacidad Firme programada por CFE, conforme al convenio de servicio de
intercambio que corresponda.

4.4     Los puntos de entrega serán los puntos de las interconexiones
Ascárate-Rivereña y/o Diablo-Insurgentes, con el sistema CFE-Juárez u otros
puntos que sean mutuamente convenidos.

SECCION 5 - BASES PARA LA COMPENSACION

5.1     EPE suministrará a CFE y ésta pagará a EPE el Bloque de Energía en
dólares de los Estados Unidos de América durante el plazo de vigencia de este
Convenio de Servicio de Intercambio E, como se pasa a señalar:

5.1.2 Cargo por Bloque de Energía: El cargo por Bloque de Energía Asociada se
calculará a razón de $35.00 Dólares de los Estados Unidos de América, por
megawatt hora que se suministre en el Bloque de Energía conforme a este Convenio
de Servicio de Intercambio.

5.2     Dentro de los días (10) días de calendario siguientes al final de cada
mes y por cada mes durante la vigencia de este Convenio de Servicio de
Intercambio E, EPE facturará a CFE y ésta pagará a EPE por Bloque de Energía,
precisamente en dólares, moneda legal de los Estados Unidos de América y en el
banco en los Estados Unidos de América que le indique EPE a CFE, y dentro de los
21 (veintiún) días de calendario a la recepción de la factura.

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SECCION 6 - ESTANDARES GENERALES

6.1     En el caso de que este Convenio de Servicio de Intercambio E se termine,
las obligaciones de CFE respecto a compensación no pagada a EPE subsistirán
hasta que tal compensación haya sido totalmente pagada.

6.2     El Convenio Básico celebrado entre las partes y salvo por las
modificaciones a tal convenio que se estipulen en este Convenio de Servicio de
Intercambio E, continuarán en vigor en sus términos originales.

6.3     En caso de cualquier discrepancia entre lo estipulado en el Convenio
Básico y lo estipulado en este convenio, prevalecerán las disposiciones de este
Convenio de Servicio de Intercambio E, como se señala en la Sección 7.1 del
Convenio Básico.

En testimonio de lo cual las partes contratantes firman este Convenio en español
y en ingles el día de julio de 1995.

EL PASO ELECTRIC COMPANY
 
COMISION FEDERAL DE ELECTRICIDAD
 
 
 
/s/[ILLEGIBLE]
 
/s/[ILLEGIBLE]
 
 
 
John C. Horne
 
Ing. Enrique Villanueva Landeros
Vicepresident
 
Subdirector de Transmisión, Transformación
 
 
y Control
 
 
 
 
 
/s/[ILLEGIBLE]
 
 
Ing. Raymundo Campos Milán
 
 
Coordinador del CENACE