EXHIBIT 10.12

ANPP TRANSMISSION PROJECT

WESTWING SWITCHYARD
AMENDED INTERCONNECTION AGREEMENT

APS Contract No. 7651

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WESTIWING SWITCHYARD
AMENDED INTERCONNECTION AGREEMENT

TABLE OF CONTENTS

Section
Title
Page

 
 
 
1
PARTIES
1

2
RECITALS
2

3
AGREEMENT
4

4
EFFECTIVE DATE AND TERMINATION
4

5
FACILITIES TO BE PROVIDED
5

6
OWNERSHIP
7

7
OPERATION
8

8
COST RESPONSIBILITY RATIOS
12

9
ALLOCATION OF OPERATION AND MAINTENANCE EXPENSES
13

10
PAYMENT FOR USE OF COMMON FACILITIES
14

11
REGULATORY AUTHORITY AND RATE CHANGE
16

12
OTHER PROJECT AGREEMENTS
17

13
POWER AND ENERGY LOSSES
17

14
PAYMENT OF TAXES
18

15
INSURANCE
18

16
LIABILITY; COVENANT NOT TO EXECUTE
19

17
UNCONTROLLABLE FORCES
26

18
RELATIONSHIP OF THE PARTIES
27

19
GOVERNING LAW
27

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TABLE OF CONTENTS (Cont’d)

20
SUCCESSORS AND ASSIGNS
27

21
UNFORESEEN CIRCUMSTANCES
27

22
GENERAL CONTRACT PROVISIONS
28

23
EXECUTION BY COUNTERPARTS
28

24
SIGNATURE CLAUSE
29

 
APPENDIX A
39

 
APPENDIX B
41

 
APPENDIX C
42

 
APPENDIX D
43

 
APPENDIX E
46

 
APPENDIX F
48

 
 
 

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WESTWING SWITCHYARD
AMENDED INTERCONNECTION AGREEMENT

1.
PARTIES:

The parties to this Westwing Switchyard Amended Interconnection Agreement
hereinafter referred to as the "Amended Interconnection Agreement," are: THE
UNITED STATES OF AMERICA, hereinafter referred to as the "United States," acting
through the Secretary of the Interior, his duly appointed successor or his duly
authorized representative; ARIZONA PUBLIC SERVICE COMPANY, an Arizona
corporation, hereinafter referred to as "Arizona"; DEPARTIMENT OF WATER AND
POWER OF THE CITY OF LOS ANGELES, a department organized and existing under the
Charter of the City of Los Angeles, a municipal corporation of the State of
California, hereinafter referred to as "Los Angeles"; EL PASO ELECTRIC
COMPANY, a Texas corporation, hereinafter referred to as "El Paso"; NEVADA POWER
COMPANY, a Nevada corporation, hereinafter referred to as "Nevada"; PUBLIC
SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, hereinafter referred to
as "PNM"; SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an
agricultural improvement district organized and existing under the laws of the
State of Arizona, hereinafter referred to as "Salt River Project"; and TUCSON
ELECTRIC POWER COMPANY, an Arizona corporation formerly known as Tucson Gas &
Electric Company, hereinafter referred to as "Tucson." These entities are
referred to collectively as "Parties" and individually as "Party."

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2.
RECITALS:

This Amended Interconnection Agreement is made with reference to the following
facts, among others:
2.1
Arizona, El Paso, PNM, and Salt River Project, hereinafter collectively referred
to as the "Palo Verde-Westwing Participants," are participants, together with
Southern California Edison Company, Southern California Public Power Authority
and Los Angeles, in the Arizona Nuclear Power Project (ANPP) which is
constructing the Palo Verde nuclear‑electric generating units 1, 2 and 3 west of
Phoenix, Arizona. Pursuant to the ANPP Valley Transmission System Participation
Agreement dated August 20, 1981, as amended, the Palo Verde-Westwing
Participants have con­ structed a 500 kV transmission line, hereinafter referred
to as the "First Palo Verde Line," between the Palo Verde Nuclear Generating
Station and the Westwing Switchyard, both located west of Phoenix, Arizona. The
Palo Verde­ Westwing Participants have constructed and ·now desire to
interconnect a second 500 kV transmission line parallel to the First Palo Verde
Line, hereinafter referred to as the "Second Palo Verde Line." Both lines are
hereinafter collectively referred to as the "Palo Verde Lines."

2.2
The United States, Arizona, Los Angeles, Nevada, Salt River Project, and Tucson,
hereinafter collectively referred to as the "Navajo Southern Transmission System
Participants," owners in undivided interest of various portions of the

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Navajo Southern Transmission System which includes the Westwing Switchyard among
its facilities, recognize the mutual benefits of interconnecting transmission
systems, among which are improved reliability, increased transfer capability
between systems, a means of furnishing emergency assistance, and exchanges of
economy energy between systems.  They are consequently willing to permit the
interconnection of the Palo Verde Lines with the Westwing Switchyard in
accordance with the terms and conditions contained in this Amended
Interconnection Agreement.
2.3
Navajo Southern Transmission System Participants with cost responsibility in the
Westwing Switchyard are the United States, Arizona, Salt River Project, and
Tucson, herein­after collectively referred to as the "Navajo Westwing
Participants," and they retain certain rights and obliga­tions under this
Amended Interconnection Agreement in the interest of the Navajo Southern
Transmission System Participants.

2.4
Arizona constructed and now operates the Westwing Switch­ yard as project
manager and operating agent for the Navajo Project Southern Transmission System,
and the Navajo Southern Transmission System Participants desire to con­tinue to
have Arizona as the Party responsible for the design, construction, and
operation of the Westwing Switchyard.

2.5
The Palo Verde-Westwing Participants have designated Salt

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River Project as project manager and operating agent to design, construct, and
operate the Palo Verde Lines, and Arizona as Project Manager and Operating Agent
of the Westwing Switchyard, hereinafter referred to as "Operating Agent", to
design, construct, and operate the additions to the Westwing Switchyard
incidental to the Palo Verde Lines interconnection.
2.6
The Palo Verde-Westwing Participants have completed the construction and
interconnection of the First Palo Verde Line and its termination facilities to
both the ANPP High Voltage Switchyard and the Westwing Switchyard and
contemplate completing interconnection of the Second Palo Verde Line and other
associated switchyard facilities on or about March 1, 1986.

3.
AGREEMENT:

In consideration of the mutual covenants herein, the Parties hereby agree as
follows:
4.
EFFECTIVE DATE AND TERMINATION:

This Amended Interconnection Agreement shall become effective when it has been
duly executed and delivered on behalf of all the Parties and is subject to
acceptance for filing by the Federal Energy Regulatory Commission ("FERC") and
will terminate concurrently with the termination of the Navajo Project
Co‑Tenancy Agreement or the ANPP Valley Transmission System Participation
Agreement, whichever occurs first. On the effective date of this Amended
Interconnection Agreement, the

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Westwing Switchyard Interconnection Agreement dated October 26, 1978 shall be
superseded and shall be of no further force or effect.
5.
FACILITIES TO BE PROVIDED:

5.1
The Navajo Westwing Participants will grant to the Palo Verde-Westwing
Participants the necessary easements to be evidenced by appropriate documents in
a form acceptable to the Palo Verde-Westwing Participants and executed by the
Navajo Westwing Participants, across the Westwing Switch- yard property to
enable the Palo Verde-Westwing Partici- pants to connect the Palo Verde Lines
and the 500/230 kV transformer to the Westwing Switchyard 500 kV bay locations
10, 11, 12, 14 and 15 and 230 kV bay locations 1, 2, and 7, including such space
as may be required for installation of shunt reactors required as a- result of
the interconnection. The bay locations are generally shown on Appendix C
attached hereto and made a part hereof. Also to be granted to the Palo
Verde-Westwing Participants is an easement for a microwave control house and
associated equipment to be installed in the Westwing Switchyard by Salt River
Project, acting as operating agent for the ANPP High Voltage Switchyard, the
Palo Verde Lines and the Palo Verde-Kyrene 500 kV line. Said microwave control
house and associated equipment will provide a communication link necessary for
operation of the ANPP Valley Transmission System.

5.2
The Navajo Southern Transmission System Participants hereby

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extend to the Palo Verde-Westwing Participants the right to use the spare single
phase 500/230 kV transformer as a spare for the transformers installed by the
Palo Verde­ Westwing Participants. The cost of the spare transformer is included
in the cost of common facilities shown in Appendix A attached hereto and made a
part hereof.
5.3
The Palo Verde-Westwing Participants shall provide at their cost and expense:

5.3.1
Termination facilities for the Palo Verde Lines.

5.3.2
A 1500 MVA 500/230 kV transformer bank suitable for parallel operation with the
existing 500/230 kV transformers.

5.3.3
Shunt or territory reactors as required at Westwing Switchyard as a direct
result of the interconnection of the Palo Verde Lines to the Westwing 500 kV
bus.

5.3.4
Associated facilities including, but not limited to, structures, buswork,
grounding, disconnect switches, 500 kV breakers, 230 kV breakers, insula­tors
and associated appurtenances.

5.3.5
All relaying, metering, control and communication equipment including microwave
facilities with necessary conduit, duct work and control and communication cable
required incidental to the interconnection of the Palo Verde Lines and/or the
500/230kV transformer bank.

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5.3.6
Upgrading of eleven of the existing Navajo Project 230 kV circuit breakers shown
on Appendices C and D attached hereto and made parts hereof, which have
inadequate fault duty capability as a result of the interconnection of the Palo
Verde Lines. The upgrading shall coincide with the installation of the 500/230
kV transformer bank.

5.3.7
Three new 230 kV breakers: two shall be installed with the 500/230 kV
transformer; the third, including its associated equipment, shall be installed
for the interconnection of Arizona's anticipated second Westwing-El Sol line to
be installed in 1993.

5.4
The facilities to be installed by the Palo Verde-Westwing Participants shall
conform as nearly as possible in design and appearance with existing facilities
at the Westwing Switchyard.    Design and location of facilities to be
in­stalled shall be subject to review and approval of the Navajo Project
Transmission Engineering and Operating Com­mittee. Such approval shall not be
unreasonably withheld.

6.
OWNERSHIP:

6.1
The facilities installed under the Westwing Switchyard Interconnection Agreement
and the facilities to be installed under this Amended Interconnection Agreement,
except those facilities described in Sections 5.3.6 and 5.3.7, shall be owned by
and remain the property of the

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Palo Verde-Westwing Participants. Facilities provided for in Section 5.3.6 shall
be the sole property of the Navajo Westwing Participants. The Palo
Verde-Westwing Participants shall own 1-1/2 of the two 230 kV breakers installed
with the 500/230 kV transformer. The Navajo Westwing Participants shall own the
remaining 1/2 of the center breaker and the third breaker to be installed
pursuant to Section 5.3.7.
6.2
Net salvage value calculated based on original cost less depreciation for
existing equipment replaced pursuant to Section 5.3.7 hereof shall be credited
to the Palo Verde­ Westwing Participants when the equipment is replaced or
removed.

6.3
All facilities existing prior to the interconnection of the First Palo Verde
Line shall remain the property of the Navajo Westwing Participants.

6.4
6.4    The division of ownership of facilities between the Palo Verde-Westwing
Participants and the Navajo Westwing Participants as provided in this Amended
Interconnection Agreement shall not be construed to limit the rights now held by
the Navajo Southern Transmission System Participants for orderly expansion of
the Westwing Switchyard as they may deem necessary.

7.
OPERATION:

7.1
Equipment or facilities installed by Palo Verde-Westwing Participants to uprate
and replace existing Westwing

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Switchyard facilities shall be operated and maintained by Arizona, the Operating
Agent for the Westwing Switchyard, at the expense of the Navajo Westwing
Participants pursuant to Section 9 hereof.
7.2
Other equipment or facilities installed by the Palo Verde‑Westwing Participants
to effect the 500 kV interconnection s and the 500/230 kV transformer
installation shall be operated and maintained by Arizona, the Operating Agent
for the Westwing Switchyard, in coordination with Salt .River Project, acting as
operating agent for the Palo Verde Lines, at the expense of the Palo
Verde-Westwing Participants pursuant to Section 9 hereof. Upon the in service
date of Arizona's second Westwing-El Sol line, the Palo Verde-Westwing
Participants shall have cost responsibility for operating and maintaining a
breaker and a half and appurtenant facilities associated with their 500/230 kV
transformer in the 230 kV switchyard.

7.3
The Palo Verde-Westwing Participants and the Navajo Southern Transmission System
Participants acknowledge that it may from time to time be necessary for the
Westwing Switchyard Operating Agent to de-energize certain facilities at the
Westwing Switchyard in order to complete the installation of equipment set forth
in Section 5 hereof and to maintain facilities of both the Palo Verde-Westwing
Participants and the Navajo Southern Transmission System Participants. The
Operating Agent will coordinate any

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outage of facilities required for construction or maintenance purposes with the
affected Parties, all in accordance with the provisions of the Navajo Project
Southern Transmission System Operating Agreement, dated July 23, 1979 and the
ANPP Valley Transmission System Participation Agreement.
7.4
Under normal operating conditions, the Palo Verde-Westwing Participants shall
have the right to transmit power and energy through the components of the
Westwing Switchyard to the extent of their firm entitlement in the Palo Verde
Lines as long as such use does not interfere with or impair the firm
transmission capability of the Navajo Southern Transmission System and as long
as such use does not create an overloaded condition in any of the components of
the Westwing Switchyard. The words "firm transmission capability" as used herein
shall mean "the maximum amount of power that can be transmitted continuously as
determined by the Navajo Engineering and Operating Committee."

7.5
In the event the capacity of the Westwing Switchyard is insufficient to
accommodate all requests, the Operating Agent shall first curtail non-firm
schedules through the Westwing Switchyard which contribute to the overload. The
Operating Agent shall curtail non-firm schedules in a manner which results in
schedules which are proportional to the Parties' schedules prior to curtailment,
and shall curtail schedules in the following order:

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7.5.1
The non-firm schedules of the Palo Verde-Westwing Participants.

7.5.2
The non-firm schedules of the Navajo Southern Transmission System Participants.

7.6
In the event that the capacity of the Westwing Switchyard is insufficient to
accommodate all firm schedules after all non-firm schedules are curtailed
pursuant to Section 7.5, the Operating Agent shall curtail firm schedules
through the Westwing Switchyard which contribute to the overload. The Operating
Agent shall curtail firm schedules in a manner which results in schedules which
are proportional to the Parties' percentage ownership in the respective
systems, and shall curtail schedules in the following order:

7.6.1
The firm schedules of the Palo Verde-Westwing Participants other than ANPP
generation or its replacement capacity.

7.6.2
The firm schedules of the Navajo Southern Transmission System Participants other
than Navajo generation schedules or its replacement capacity.

7.6.3
ANPP generation schedules or its replacement capacity.

7.6.4
Navajo generation schedules or its replacement capacity.

7.7
As a means of permitting El Paso and PNM to participate in the coordination and
interchange of information on a prompt and orderly basis in connection with
operating matters

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under this Amended Interconnection Agreement, El Paso and PNM shall each be
allowed to have a non-voting repre­sentative attend appropriate meetings of the
Navajo Transmission System Engineering and Operating Committee.
7.8
During operating emergencies, the Navajo Southern Trans­mission System
Participants and the Palo Verde-Westwing Participants shall make available to
each other, through their respective operating agents, such transmission
capacity as may be determined to be available in the sole judgment of the
supplier. The transmission capacity provided under this Section 7.8 shall be on
an interruptible basis and shall be provided only when it will not result in the
impairment of or jeopardy to service in the system of the supplier:

8.
COST RESPONSIBILITY RATIOS:

8.1
"Cost Responsibility Ratios" shall be computed for the purpose of sharing
operation and maintenance expenses between the Navajo Westwing Participants
collectively, the Palo Verde-Westwing Participants collectively, and other
parties or individual Parties. For this purpose, each con­nection to the
Westwing 500·kV bus and/or 230 kV bus through a power circuit breaker such as
line connections, transformer connections, reactor or capacitor bank
connec­tions will be deemed a "Function." Likewise, each power transformer bank
will be deemed a Function. Cost

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Responsibility Ratios shall be computed by the Westwing Switchyard Operating
Agent initially and subsequently upon the installation of additional Functions
in the Westwing Switchyard, as follows:
8.1.1
Navajo Westwing
=
X
 
Participants
 
X+Y+Z
 
Cost Responsibility Ratio
 
 
 
 
 
 
8.1.2
Palo Verde-Westwing Participants
=
Y
 
Cost Responsibility Ratio
 
X+Y+Z
 
 
 
 
8.1.3
Third Party Cost
=
Z
 
Responsibility Ratio
 
X+Y+Z
 
 
 
 

Where,
X =    Number of Functions for Navajo Westwing Participants.

Y =
Number of Functions for Palo Verde-Westwing Participants.

Z =
Number of Functions for any third party (ies) and/or individual Party.

Ratios will be computed and used for the 500 kV Switchyard when only 500 kV
costs are to be allocated, for the power transformers when only power
transformer costs are to be allocated, for the 230 kV yard when only 230 kV
costs are to be allocated and for the composite switchyard when 500 kV and 230
kV costs cannot be or are not normally accounted for separately. Calculations of
Cost Responsibility Ratios are shown in Appendix E attached hereto and made a
part hereof.
9.    ALLOCATION OF OPERATION AND MAINTENANCE EXPENSES:
9.1
All costs of operation for the Westwing Switchyard, and for such maintenance
which is not allocable to any specific

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facility or equipment within the Westwing Switchyard, shall be paid monthly by
the Navajo Westwing Participants and the Palo Verde-Westwing Participants in
proportion to their respective Cost Responsibility Ratios:
9.1.1
Separately by each Navajo Westwing Participant in accordance with its individual
cost responsibility as set forth in Exhibit B of the Navajo Project Southern
Transmission System Operating Agreement, as now written or as hereafter
modified.

9.1.2
Separately by each Palo Verde-Westwing Participant in accordance with its
individual cost responsibility as set forth in Appendix B of the ANPP Valley
Transmission System Participation Agreement, as now written or as hereafter
modified.

9.2
The costs of maintenance for the Westwing Switchyard which are allocable to any
specific facility or equipment within the Westwing Switchyard shall be paid by
the owners of that facility or equipment, in accordance with the applicable
agreement mentioned in Sections 9.1.1 or 9.1.2 herein.

10.    PAYMENT FOR USE OF COMMON FACILITIES:
10.1
Certain facilities, as shown in Appendix A, and referred to as common
facilities, are for the common use and benefit of the Navajo Westwing
Participants and the Palo Verde‑Westwing Participants. It is neither feasible
nor desirable to alter the ownership of common facilities installed prior to the
effective date of this Amended

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Interconnection Agreement. Therefore, an equalization charge will be computed to
equalize the investment costs of common facilities. The payment of such charge
calculated pursuant to Section 10.2 hereof shall entitle the Palo Verde-Westwing
Participants to the nonexclusive use and benefit of all common facilities in the
Westwing Switchyard.
10.2
Beginning on the date of firm operation of the First Palo Verde Line, the Palo
Verde-Westwing Participants shall pay the Navajo Westwing Participants an
equalization charge for the use of common facilities owned by the Navajo
Westwing Participants. Such payment shall be calculated as follows: (i) total
actual original cost of all common facilities shall be multiplied by the Cost
Responsibility Ratio of the Palo Verde-Westwing Participants for the composite
yard; (ii) then subtract the amount invested by the Palo
Verde‑Westwing Participants for common facilities; (iii) then multiply the
result (i-ii) by the Weighted Average Annual Fixed Charge Rate (including ad
valorem taxes or payments in lieu of) of the Navajo Westwing Participants,
computed as shown in Line D of Appendix B.

10.3
A monthly payment shall be computed as one-twelfth of the equalization charge
computed pursuant to Section 10.2 hereof.

10.4
The Palo Verde-Westwing Participants shall individually pay each month their
appropriate share of the monthly payment in accordance with Section 9.1.2
hereof, to be received by

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Arizona, as Operating Agent, and credited to the accounts of the Navajo Westwing
Participants, in accordance with Line E of Appendix B.
10.5
The equalization charge may be changed only under the provisions of Section 11
hereof.

10.6
The costs and percentages set forth in Appendices A and B hereto shall be
subject to review and audit by the Palo Verde-Westwing Participants.

11.    REGULATORY AUTHORITY AND RATE CHANGE:
11.1
Any Navajo Westwing Participant which can demonstrate that its respective Annual
Fixed Charge Rate shown in Appendix B has become inequitable shall be entitled
to change that Annual Fixed Charge Rate so that it is equitable after
having first received the consent of all the Palo Verde‑Westwing Participants,
which consent shall not be unreasonably withheld. The Salt River Project shall
use an Annual Fixed Charge Rate which is consistent with its pricing methods
used for other inter-utility transactions.

11.2
Nothing contained herein, including the provisions of Section 11.l hereof, shall
be construed as affecting in any way the rights of any Navajo Westwing
Participant subject to the jurisdiction of the FERC to unilaterally make
application to FERC for a change in rates or allocations shown in Appendix B,
under Section 205 of the Federal Power Act and pursuant to the Commission's
Rules and Regulations promulgated thereunder.

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11.3
The Parties agree that application for changes pursuant to Sections 11.1 or 11.2
hereof shall not be submitted by an individual Navajo Westwing Participant at
less than two‑year intervals.

12.    OTHER PROJECT AGREEMENTS:
Arizona as Operating Agent for the Navajo Southern Transmission System
Participants shall continue to act with respect to such participants in
accordance with the Navajo Project Southern Transmission System Operating
Agreement, as presently written or hereafter modified, except to the extent such
agreement conflicts with this Amended Interconnection Agreement. Arizona as
Project Manager and Operating Agent on behalf of the Palo Verde-Westwing
Participants at the Westwing Switchyard shall act with respect to such
participants in accordance with the ANPP Valley Transmission System
Participation Agreement, as presently written or hereafter modified, except to
the extent such agreement conflicts with this Amended Interconnection Agreement.
If differences between the Navajo Project Southern Transmission System Operating
Agreement and the ANPP Valley Transmission System Participation Agreement make
concurrent performance with both agreements either impos­ sible or
impracticable, then, to the extent of such impossibility or impracticability,
Arizona's obligations under the ANPP Valley Transmission System Participation
Agreement shall be suspended.
13.    POWER AND ENERGY LOSSES:
Any power and energy losses directly resulting from the Palo Verde Lines
interconnections at the Westwing Switchyard identifiable as being caused by the
Palo Verde-Westwing Participants as individuals on the Navajo Southern
Transmission System or any power and energy losses identifiable

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as being caused by the Navajo Southern Transmission System Participants as
individuals on the ANPP Valley Transmission System shall be returned in kind by
the individual causing such losses to the affected Party(ies) at times of like
conditions of loads and generation resources on the systems of the affected
Party(ies) in accordance with proce­dures developed jointly by the Engineering
and Operating Committees of the ANPP Valley Transmission System Participants
and the Navajo Southern Transmission System Participants.
14.    PAYMENT OF TAXES:
14.l
Each Party shall use its best efforts to have any taxing authority imposing any
property taxes or other taxes (excluding any sales or use taxes) or assessments
on the facilities within the Westwing Switchyard, impose such taxes or
assessments directly upon each Party on the basis of its respective ownership
interest in the Westwing Switchyard.

14.2
All taxes and assessments levied against any Party shall be the sole
responsibility of the Party upon whom said taxes and assessments are levied,
unless such taxes and assess­ments are levied directly upon an individual Party
in behalf of any or all of the other Parties.

14.3
Any Party exempted from any taxes assessed against any or all of the other
Parties shall be given credit for such

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exemption.
15.    INSURANCE:
The Palo Verde-Westwing Participants shall provide construction and operating
insurance and the Navajo Southern Transmission System Participants shall provide
operating insurance to cover facilities in which they respectively retain
ownership. Such insurance shall be provided by the Palo Verde-Westwing
Partici­pants in accordance with Sections 22 and 23 of the ANPP Valley
Transmission System Participation Agreement and by the Navajo Southern
Transmission System Participants in accordance with Section 18 of the Navajo
Project Southern Transmission System Operating Agreement, as those agreements
are written or may be hereafter amended by the Parties to each agreement.
Arizona, as Operating Agent, shall require insurance carriers furnishing
insurance to waive rights of subrogation against all Parties as their respective
interests may appear.
16.    LIABILITY; COVENANT NOT TO EXECUTE:
16.1
Except for any judgment debt for damage resulting from Willful Action and except
to the extent any judgment debt is collectible from valid insurance provided
pursuant to Section 15 hereof, and subject to the provisions of Sections 16.2,
16.4, and 16.5 hereof, each Party hereby extends to all other Parties, their
directors, members of their governing bodies, officers and employees its
covenant not to execute, levy or otherwise enforce a judgment obtained against
any of them, including recording or

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effecting a judgment lien, for any direct, indirect or consequential loss,
including but not limited to, death, injury, damage, claim, cost, charge or
expense, whether or not resulting from the negligence of such Party, its
directors, members of its governing bodies, officers, employees, or any person
or entity whose negligence would be imputed to such Party from the performance
or non‑performance of the obligations of any Party under this Amended
Interconnection Agreement, or the construction, operation or ownership of
facilities at the Westwing Switchyard, other than the obligation to pay any
monies which have become due under the terms of this Agreement.
16.2
In the event any insurer providing insurance pursuant to Section 15 hereof
refuses to pay any judgment obtained by a Party against another Party, its
directors, members of its governing bodies, officers or employees, on account of
liability referred to in Section 16.1 hereof, the Party, its directors, members
of its governing bodies, officers or employees against whom the judgment is
obtained shall, at the request of the prevailing Party and in consideration of
the covenant given in Section 16.1 hereof, execute such documents as may be
necessary to effect an assignment of its contractual rights against the
nonpaying insurer and thereby give the prevailing Party the opportunity to
en­force its judgment directly against such insurer. In no event when a judgment
debt is collectible from valid

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insurance provided pursuant to Section 15 hereof shall the Party obtaining the
judgment execute, levy or otherwise enforce the judgment (including recording or
effecting a judgment lien) against the Party, its directors, members of its
governing bodies, officers or employees, against whom the judgment was obtained.
16.3
Except as provided in Sections 16.4 and 16.5, the costs and expenses, including
but not limited to attorneys fees, of discharging all Work Liability imposed
upon one or more of the Parties for which payment is not made by the insurance
procured by the Palo Verde-Westwing Participants or the Navajo Southern
Transmission System Participants pursuant to Section 15 hereof shall be
allocated among the Parties in proportion to their Cost Responsibility in the
facilities involved in the operative facts which give rise to the Work
Liability. However, if the proximate cause of such liability cannot be
determined or is not related to any particular facilities, then such costs and
expenses shall be allocated among the Parties in proportion to the Cost
Responsibility Ratios of the Palo Verde-Westwing Participants and the Navajo
Westwing Participants in the composite switchyard and according to Sections
9.1.1 and 9.1.2 hereof. "Work Liability" as used herein is the liability of one
or more Parties for damages suffered by anyone other than a Party, whether or
not resulting from the negligence of any Party, its directors, members of its

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governing bodies, officers, employees or any other person or entity whose
negligence would be imputed to such Party, resulting from the construction,
operation or ownership of facilities at the Westwing Switchyard or the
performance or nonperformance of the obligations of any Party under this Amended
Interconnection Agreement.
16.4
Each Party shall be responsible for the consequences of its own Willful Action
that are not covered by insurance provided pursuant to Section 15 hereof, and
each Party except the United States shall indemnify and hold harmless the other
Parties, their directors, members of their governing bodies, officers and
employees from the consequences thereof.

Since the United States has hot agreed to indemnify the other Parties, the
indemnity provided by this Section 16.4 shall not extend to the United States.
16.5
Except for liability resulting from Willful Action, which shall be the
responsibility of the willfully acting Party, any Party, except the United
States, whose electric customer shall have a claim or bring an action against
any other Party for any death, injury, loss or damage arising out of or in
connection with electric service to such customer and caused by the operation or
failure of operation of the Westwing Switchyard or any portion thereof, shall
indemnify and hold harmless such other Party, its directors , members of its
governing bodies,

-22-

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

officers and employees from and against any liability for such death, injury,
loss or damage.
Since the United States has not agreed to indemnify the other Parties, the
indemnity provisions of this Section shall not extend to the United States.
16.6
The liability of the United States for any claims for damages arising out of
negligence shall be governed by the Federal Tort Claims Act (28 U.S.C. 2671
S.E.Q.).

16.7
The provisions of this Section 16 shall not be construed so as to relieve any
insurer of its obligation to pay any insurance proceeds in accordance with the
terms and condi­tions of valid and collectible insurance policies.

16.8
The term "Willful Action" as used in this Amended Inter­connection Agreement is
defined as follows:

16.8.1
Action taken or not taken by a Party (including the Operating Agent) , at the
direction of its direc­tors, members of its governing bodies, officers or
employees having management or administrative responsibility affecting its
performance under this Amended Interconnection Agreement, which action is
knowingly or intentionally taken or not taken with conscious indifference to the
consequences thereof or with knowledge or intent that injury or damage would
result or would probably result therefrom.

16.8.2
Action taken or not taken by a Party (including the Operating Agent), at the
direction of its

-23-

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

directors, members of its governing bodies, officers or employees having
management or administrative responsibility affecting its performance under this
Amended Interconnection Agreement, which action has been determined by final
arbitration award or final judgment or judicial decree to be a material default
under this Amended Interconnection Agreement and which action occurs or
continues beyond the time specified in such arbitration award or judgment or
judicial decree for curing such default or, if no time to cure is specified
therein, occurs or continues beyond ·a reasonable time to cure such default.
16.8.3
Action taken or not taken by a Party (including the Operating Agent), at the
direction of its direc­tors, members of its governing bodies, officers or
employees having management or administrative responsibility affecting its
performance under this Amended Interconnection Agreement, which action is
knowingly or intentionally taken or not taken with the knowledge that such
action taken or not taken is a material default under this Amended Inter­
connection Agreement.

16.8.4
The phrase "employees having management or administrative responsibility" as
used in this Section 16.8 means employees of a Party who are responsible

-24-

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

for one or more of the executive functions of planning, organizing,
coordinating, directing, controlling, and supervising such Party's per­formance
under this Amended Interconnection Agreement; provided, however, that, with
respect to employees of the Operating Agent acting in its capacity as such and
not in its capacity as a Party, such phrase shall refer only to (i) the Manager
of System Control for the Operating Agent and (ii)anyone in the organizational
structure of the Operating Agent between the Manager of System Control and an
officer.
16.8.5
Willful Action does not include any act or failure to act which is merely
involuntary, accidental or negligent.

16.9
The Parties recognize that Los Angeles and Nevada are required to execute this
Amended Interconnection Agreement because they are Navajo Southern Transmission
System Participants even though Los Angeles and Nevada have no cost
responsibilities in the Westwing Switchyard. Therefore, the remaining Parties to
this Amended Interconnection Agreement agree that Los Angeles and Nevada have no
liabilities arising from this Agreement.

16.10
If Section 19 of the Navajo Project Navajo Generating Station Operating
Agreement is amended to limit the liability of any Party for Willful Action, the
Parties

-25-

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

agree to likewise amend this Section 16 in order to incorporate substantially
the same limitation of liability principles at dollar levels to be negotiated
and agreed upon.
17.    UNCONTROLLABLE FORCES:
No Party shall be considered to be in default in the performance of its
obligations hereunder (other than obligations of said Party to make payment of
bills rendered hereunder) when a failure of performance shall be due to an
Uncontrollable Force. The term "Uncontrollable Force" shall be any cause beyond
the control of the Party affected, including but not restricted to failure of or
threat of failure of facilities, flood, earthquake, storm, fire, lightning,
epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor or
material shortage, sabotage, restraint by court order or public authority, and
action or nonaction by or failure to obtain the necessary authorizations or
approvals from any governmental agency or authority, which by exercise of due
diligence such Party could not reasonably have been expected to avoid and which
by exercise of due diligence it shall be unable to overcome. Nothing contained
herein shall be construed so as to require a Party to settle any strike or labor
dispute in which it may be involved. Any Party rendered unable to fulfill any of
its obligations hereunder by reason of an Uncontrollable Force shall give prompt
written notice of such fact to the other Parties and shall exercise due
diligence to remove such inability with al l reasonable dispatch.

-26-

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

18.    RELATIONSHIP OF THE PARTIES:
The covenants, obligations and liabilities of the Parties are intended to be
several and not joint or collective and nothing herein contained shall ever be
construed to create an associa­tion, joint venture, trust or partnership, or to
impose an association, joint venture, trust or partnership covenant, obligation
or liability on or with regard to any one or more of the Parties. Each Party
shall be individually responsible for its own covenants, obligations and
liabilities as herein provided. No Party or group of Parties shall be under the
control of or shall be deemed to control any other Party or the Parties as a
group. No Party shall be the agent of or have a right or power to bind any other
Party without its express written consent, except as expressly provided in this
Amended Interconnection Agreement or other project agreements as may be
applicable.
19.    GOVERNING LAW:
This Amended Interconnection Agreement shall be governed by and construed and
enforceable in accordance with the laws of the State of Arizona.
20.    SUCCESSORS AND ASSIGNS:
This Amended Interconnection Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the Parties.
21.    UNFORESEEN CIRCUMSTANCES:
Should this Amended Interconnection Agreement result in placing

-27-

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

an undue burden on any Party or the Operating Agent due to cir­cumstances net
presently contemplated by the Parties, the Parties agree, upon request of the
affected Party, to meet and negotiate an appropriate amendment to this Amended
Interconnection Agreement.
22.    GENERAL CONTRACT PROVISIONS:
The General Contract Provisions attached hereto as Appendix F are hereby made a
part of this Amended Interconnection Agreement.
23.    EXECUTION BY COUNTERPARTS:
This Amended Interconnection Agreement may be executed in any number of
counterparts, and upon execution by all Parties, each executed counterpart shall
have the same force and effect as an original instrument and as if all Parties
had signed the same instrument.    Any signature page of this Amended
Interconnection Agreement may be detached from any counterpart hereof without
impairing the legal effect of any signature thereon and may be attached to
another counterpart of this Amended Interconnection Agreement identical in form
hereto but having attached to it one or more signature pages.
/
/
/
/
/
/
/

-28-

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

24.    SIGNATURE CLAUSE:
The signatories hereto represent that they have been appropriately authorized to
enter into this Amended Interconnection Agreement on behalf of the Party for
whom they sign. This Amended Interconnection Agreement is hereby executed as of
this _14th_ day of _August , 1986.
UNITED STATES OF AMERICA

By
/s/ Edward M. Hallenbeck
 
Regional Director, Lower Colorado
 
Region, U.S. Bureau of Reclamation
 
 
ARIZONA PUBLIC SERVICE COMPANY
By
 
 
 
DEPARTMENT OF WATER AND POWER OF THE
CITY OF LOS ANGELES
 
                      by
BOARD OF WATER AND POWER COMMISSIONERS
OF THE CITY OF LOS ANGELES
By
 
And
 
 
 
EL PASO ELECTRIC COMPANY
By
 

ATTEST AND COUNTERSIGN
 
NEVADA POWER COMPANY

 
 
By
 
Secretary
 
 
 
 
 
/
 
 
 
/
 
 
 
 
 

-29-

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

24.    SIGNATURE CLAUSE:
The signatories hereto represent that they have been appropriately authorized to
enter into this Amended Interconnection Agreement on behalf of the Party for
whom they sign. This Amended Interconnection Agreement is hereby executed as of
this ______ day of _________ , 1986.
    
 
UNITED STATES OF AMERICA

 
By
 
 
 
Regional Director, Lower Colorado
 
 
Region, U.S. Bureau of Reclamation
 
 
 
image1a16.jpg [image1a16.jpg]
ARIZONA PUBLIC SERVICE COMPANY
By
/s/ Russell D. Hulse
 
 
DEPARTMENT OF WATER AND POWER OF THE
CITY OF LOS ANGELES
 
 
                      by
 
BOARD OF WATER AND POWER COMMISSIONERS
 
OF THE CITY OF LOS ANGELES
 
By
 
 
And
 
 
 
 
 
EL PASO ELECTRIC COMPANY
 
By
 

ATTEST AND COUNTERSIGN
 
NEVADA POWER COMPANY

 
 
By
 
Secretary
 
 
 
 
 
/
 
 
 
/
 
 
 
 
 

-29-

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

24.    SIGNATURE CLAUSE:
The signatories hereto represent that they have been appropriately authorized to
enter into this Amended Interconnection Agreement on behalf of the Party for
whom they sign. This Amended Interconnection Agreement is hereby executed as of
this _______ day of ________________, 1986.
 
UNITED STATES OF AMERICA

 
By
 
 
 
Regional Director, Lower Colorado
 
 
Region, U.S. Bureau of Reclamation
 
 
 
 
ARIZONA PUBLIC SERVICE COMPANY
 
By
 
 
 
 
 
DEPARTMENT OF WATER AND POWER OF THE
 
CITY OF LOS ANGELES
 
 
                      by
image2a08.jpg [image2a08.jpg]
BOARD OF WATER AND POWER COMMISSIONERS
OF THE CITY OF LOS ANGELES
By
/s/ Paul H. Lane
 
General Manager and Chief Engineer
And
/s/ Judith K. Davidson
 
Secretary
 
EL PASO ELECTRIC COMPANY
 
By
 

ATTEST AND COUNTERSIGN
 
NEVADA POWER COMPANY

 
 
By
 
Secretary
 
 
 
 
 
/
 
 
 
/
 
 
 
 
 

-29-

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

24.    SIGNATURE CLAUSE:
The signatories hereto represent that they have been appropriately authorized to
enter into this Amended Interconnection Agreement on behalf of the Party for
whom they sign. This Amended Interconnection Agreement is hereby executed as of
this ________ day of ________________, 1986.
UNITED STATES OF AMERICA

By
 
 
Regional Director, Lower Colorado
 
Region, U.S. Bureau of Reclamation
 
 
ARIZONA PUBLIC SERVICE COMPANY
By
 
 
 
DEPARTMENT OF WATER AND POWER OF THE
CITY OF LOS ANGELES
 
                      by
BOARD OF WATER AND POWER COMMISSIONERS
OF THE CITY OF LOS ANGELES
By
 
And
 
 
 
EL PASO ELECTRIC COMPANY
By
/s/ James P. Maloney
 
Vice President

ATTEST AND COUNTERSIGN
 
NEVADA POWER COMPANY

 
 
By
 
Secretary
 
 
 
 
 
/
 
 
 
/
 
 
 
 
 

-29-

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

24.    SIGNATURE CLAUSE:
The signatories hereto represent that they have been appropriately authorized to
enter into this Amended Interconnection Agreement on behalf of the Party for
whom they sign. This Amended Interconnection Agreement is hereby executed as of
this _23rd_ day of May , 1986.

UNITED STATES OF AMERICA

By
 
 
Regional Director, Lower Colorado
 
Region, U.S. Bureau of Reclamation
 
 
ARIZONA PUBLIC SERVICE COMPANY
By
 
 
 
DEPARTMENT OF WATER AND POWER OF THE
CITY OF LOS ANGELES
 
                      by
BOARD OF WATER AND POWER COMMISSIONERS
OF THE CITY OF LOS ANGELES
By
 
And
 
 
 
EL PASO ELECTRIC COMPANY
By
 

ATTEST AND COUNTERSIGN
 
NEVADA POWER COMPANY

/s/ [Illegible]
 
By
/s/ [Illegible]
Secretary
 
 
Vice President
 
 
 
Resource Planning
 
 
 
and Power Dispatch
 
 
 
 

-29-

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

 
 
PUBLIC SERVICE COMPANY OF NEW MEXICO
 
 
By
/s/ C. D. Bedford
 
 
 
 
ATTEST AND COUNTERSIGN
 
SALT RIVER PROJECT AGRICULTURAL
 
 
IMPROVEMENT AND POWER DISTRICT
 
 
By
 
Secretary
 
 
 
 
 
TUCSON ELECTRIC POWER COMPANY
 
 
By
 

-30-

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

 
 
PUBLIC SERVICE COMPANY OF NEW MEXICO
 
 
By
 
 
 
 
 
ATTEST AND COUNTERSIGN
 
SALT RIVER PROJECT AGRICULTURAL
 
 
IMPROVEMENT AND POWER DISTRICT
/s/ Paul D. Rice
 
By
/s/ John R. Lassen
Secretary
 
 
President
 
 
TUCSON ELECTRIC POWER COMPANY
 
 
By
 
May 29, 1986
 
 
 

-30-

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

 
 
PUBLIC SERVICE COMPANY OF NEW MEXICO
 
 
By
 
 
 
 
 
ATTEST AND COUNTERSIGN
 
SALT RIVER PROJECT AGRICULTURAL
 
 
IMPROVEMENT AND POWER DISTRICT
 
 
By
 
Secretary
 
 
 
 
 
TUCSON ELECTRIC POWER COMPANY
 
 
By
/s/ H. A. Heim

-30-

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

STATE OF NEVADA
)
 
 
)
ss
COUNTY OF CLARK
)
 

On this the _ 13th day of June , 1986, before me, the undersigned officer,
personally appeared Edward M. Hallenbeck _____________ the Regional Director, LC
Region, Bureau of Reclamation of the United States of America, known to me to be
the person described in the foregoing instrument, and acknowledged that he
executed the same in the capacity therein stated and for the purposes therein
contained.
IN WITNESS WHEREOF I hereunto set my hand and official seal.
/s/ Rebecca A. Dalton
Notary Public
 

My commission expires:
Official Seal
Rebecca A. Dalton
Notary Public-Nevada
My Commission expires Aug. 7, 1986

-31-

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

STATE OF ARIZONA
)
 
 
)
ss
COUNTY OF MARICOPA
)
 

On this the _ 13th day of June , 1986, before me, the undersigned Notary Public,
personally appeared Russell D. Hulse who acknowledged himself to be the Vice
President of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation, and that
he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the company
by himself as such Vice President .
IN WITNESS WHEREOF I hereunto set my hand and official seal.

 
Notary Public
 

My commission expires:
April 9, 1988    

-32-

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

STATE OF CALIFORNIA
)
 
 
)
ss
COUNTY OF LOS ANGELES
)
 

On this the 14th day of August , 1986, before me, the undersigned officer,
personally appeared Paul H. Lane and Judith K. Davison____ who acknowledged
themselves to be the General Manager and Chief Engineer and Secretary of the
Board respectively, of the DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS
ANGELES, a department organized and existing under the Charter of the City of
Los Angeles, a municipal corporation of the State of California, known to me to
be the persons described in the foregoing instrument, and acknowledged that they
executed the same in the capacity therein stated and for the purposes therein
contained.
IN WITNESS WHEREOF I hereunto set my hand and official seal.

/s/ Linda L. Newman
Notary Public
 

My commission expires: May 27, 1989

-33-

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

STATE OF TEXAS
)
 
 
)
ss
COUNTY OF EL PASO
)
 

On this the _ 30th day of May , 1986, before me, the undersigned Notary Public,
personally appeared James P. Maloney who acknowledged himself to be the Vice
President of EL PASO ELECTRIC COMPANY, a Texas corporation, and that he as such
officer, executed the foregoing instrument for the purposes therein contained by
signing the name of the company by himself as such   Vice President .
IN WITNESS WHEREOF I hereunto set my hand and official seal.

/s/ Edna M. Chavez
Notary Public
 

My commission expires:
January 17, 1989

-34-

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

STATE OF NEVADA
)
 
 
)
ss
COUNTY OF CLARK
)
 

On this the _ 23rd day of May , 1986, before me, the undersigned Notary Public,
personally appeared Wooldridge and who acknowledged himself to be the
  Vice President, Resource Planning of NEVADA POWER COMPANY, a
Nevada corporation, and that he, as such officer, being author- ized so to do,
executed the foregoing instrument for the purposes therein contained by signing
the name of the company by himself as such  Vice President, Resource Planning .
IN WITNESS WHEREOF I hereunto set my hand and official seal.

/s/ Andrea Bybee
Notary Public
 

My commission expires:

-35-

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

STATE OF NEW MEXICO
)
 
 
)
ss
COUNTY OF Bernalillo
)
 

On this the _ 13th day of May , 1986, before me, the undersigned Notary Public,
personally appeared    C. D. Bedford  who acknowledged himself to be the Sr.
Vice President of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico
corporation, and that he as such officer, executed the foregoing instrument for
the purposes therein contained by signing the name of the Company by himself, as
such Sr. Vice President .
IN WITNESS WHEREOF I hereunto set my hand and official seal.

/s/ [Illegible]
Notary Public
 

My commission expires:
3/17/87

-36-

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

STATE OF ARIZONA
)
 
 
)
ss
COUNTY OF MARICOPA
)
 

On this the _ 3rd day of June , 1986, before me, the undersigned Notary Public,
personally appeared John R. Lassen and Paul D. Rice who acknowledged themselves
to be the President and Secretary of the SALT RIVER PROJECT
AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an agricultural improvement
district organized and existing under the laws of the State of Arizona, and that
they, as such officers, being authorized to so do, executed the foregoing
instrument for the purposes therein contained by signing the name of the company
by themselves as such and .
IN WITNESS WHEREOF I hereunto set my hand and official seal.

/s/ Terrill A. London
Notary Public
 

My commission expires:

-37-

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

STATE OF ARIZONA
)
 
 
)
ss
COUNTY OF MARICOPA
)
 

On this the _ 24th day of April , 1986, before me, the undersigned Notary
Public, personally appeared H. A. Heim who acknowledged himself to be the Senior
Vice President of TUCSON ELECTRIC POWER COMPANY, an Arizona corporation, and
that he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the company
himself as such Senior Vice President .
IN WITNESS WHEREOF I hereunto set my hand and official seal.

/s/ Herlinda H. Kennedy (Mr. Herrera)
Notary Public
 

My commission expires:
4/-14-87

-38-

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

WESTWING SWITCHYARD
AMENDED INTERCONNECTION AGREEMENT
COMMON FACILITIES COSTS

APPENDIX A

Notes:
1.    This estimate includes land costs and common facilities costs including
the main busses.

2.    Cost of '82 and '87 facilities cover only ANPP additions at Westwing.
3.    Costs of '87 facilities are escalated to the year spent.
Common Facilities Item Description
Paid for and owned by Navajo Westwing Participants
Installed as of '78
Installed '82

Paid for and owned Palo Verde-West-wing Participants
Installed '87
230 KV

500 KV

500 KV

230 KV

500 KV

Land Cost
19,703

$
41,554

$
—

$
—

$
—

Grading, Surfacing,
104,910

244,786

 
 
 
  Fencing
 
 
 
 
 
Yard Lighting
8,590

20,052

11,670

 
17,529

Yard Grounding
23,160

54,042

30,715

8,077

84,462

Trench & Conduit
58,840

137,299

21,608

2,104

114,596

Control & Power
19,800

46,195

2,000

9,609

17,564

   Cables
 
 
 
 
 
Station Service
44,140

102,992

 
 
3,869

Control House
147,200

343,434

 
 
 
Control House Equip.
37,880

88,397

 
 
7,437

Comm., Control,
104,650

244,184

7,000

17,413

39,870

  Relays
 
 
 
 
 
Initial Main Bus
120,820

217,900

 
 
 
Additional Main Bus
69,410

 
193,925

 
 
Assoc. Equip. Costs
62,730

146,380

3,756

6,163

10,851

Spare Transformer*
755,000

 
 
 
 
Engineering & Insp.
93,100

217,239

51,352

12,504

24,121

Subtotal
1,669,933

1,904,454

322,026

55,870

320,299

AFUDC, IDC, Allo-
290,231

316,649

17,344

6,816

39,076

  cated OVH
 
 
 
 
 
TOTAL
1,960,164

2,221,103

339,370

62,686

359,375

 
 
 
 
 
 
Facilities Cost:
230KV

500KV

Total

 
 
 Existing in 1978 -
1,960,164

2,221,103

4,181,267

Engineering & Accounting to update 1987 Numbers.
 
             1982 -
 
339,370

339,370

 
             1987 -
62,686

359,375

422,061

 
 
 
 
 
 
 
 
$
2,022,850

$
2,919,848

$
4,942,698

 
 

*Note:
The spare 500/230kV transformer is deemed a common facility for billing
purposes.

-39-

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

WESTWING SWITCHYARD
AMENDED INTERCONNECTION AGREEMENT
COMMON FACILITIES COSTS

APPENDIX A (Cont'd)

The allocation of common· facilities of the Westwing Switchyard will be as
follows:

 
Direct
Cost

% Direct
Cost

AFUDC, IDC
Allocated OVH

Total
Cost

% Total
Cost

 
 
 
 
 
 
SRP
$
1,393,407

39

$
206,992

$
1,600,399

38

APS
979,269

27

221,217

1,200,486

29

TEP
253,292

7

64,260

317,552

8

US
948,419

27

114,411

1,062,830

25

 
 
 
 
 
 
  TOTAL
$
3,574,387

100
%
$
606,880

$
4,181,267

100
%

These values were determined by using the "Responsibility for Costs -%" taken
from VIIA (500 kV switchyard) and VIID (230 kV switchyard) from Exhibit B, pages
3 and 4 of the Navajo Project Southern Trans­ mission System Agreement. These
percentages were multiplied by the 230 kV costs ($1,669,933) in the case of VIID
and by the 500 kV costs ($1,904,454) in the case of VIIA. The costs ($1,669,933
and $1,904,454) were taken from Appendix A (Common Facilities) of this Westwing
Switchyard Amended Interconnection Agreement. The result of the aforementioned
multiplication gives the dollar allocation of 500 kV and 230 kV common
facilities to each Party. The spare transformer costs were similarly allocated
based on VIIB from Exhibit B of the Navajo Agreement and added to the 230 kV and
500 kV costs to give the total Direct Cost allocations above. Each company
furnished AFUDC, IDC, Allocated Overheads, Taxes, etc., that were capitalized as
part of the Westwing Switchyard costs. The sum of the Direct Cost and the
Allocated Costs equals the Total Cost of existing common facilities.

-40-

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

WESTWING SWITCHYARD
AMENDED INTERCONNECTION AGREEMENT

APPENDIX B

Weighted Average Annual Fixed Charge Rate

 
 
Arizona
Salt River
Project
Tucson
United
States
Total
(A)
% Total Cost of
28.71

38.28

7.59

25.42

100.0

 
Common Facilities
 
 
 
 
 
 
 
 
 
 
 
(B)
Annual Fixed Charge
0.1865

0.1504

0.1679

0.0751

*

 
Rate
 
 
 
 
 
 
 
 
 
 
 
 
(C)
% Annual Cost (A)
5.3544

5.7573

1.2744

1.9090

14.2951

 
X (B)
 
 
 
 
 
 
 
 
 
 
 
 
(D)
Weighted Total (C)
*

*

*

*

.142951

 
Average Total (A)
 
 
 
 
 
Annual Fixed
 
 
 
 
 
 
Charge Rate
 
 
 
 
 
 
 
 
 
 
 
 
(E)
% Annual Cost
37.46

40.27

8.92

13.35

100.0

 
Distribution
 
 
 
 
 
 
 
 
 
 
 
 
 
(C) x 100
 
 
 
 
 
 
Total (C)
 
 
 
 
 

Based on the following:
 
 
 
 
      Capital Recovery
11.37
%
12.76

10.86

 
      Income Tax Component
5.03

0

3.68

 
 
 
 
 
 
      Al Valorem Tax (or in
 
 
 
 
      lieu of)
2.25

2.28

2.25

 
 
 
 
 
 
TOTAL:
18.65
%
15.04
%
16.79
%
 
 
 
 
 
 
Rate of Return
13.68
%
12.50
%
10.60
%
 
 
 
 
 
 
Basis for Depreciation
33 yrs.

33 yrs.

37 yrs.

 
 
 
 
 
 
Composite Inc. Tax Rate
48.96
%
0

43.90
%
 

-41-

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

image3a04.jpg [image3a04.jpg]

APPENDIX C
WESTWING SWITCHYARD
PLOT PLAN

-42-

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

WESTWING SWITCHYARD
AMENDED INTERCONNECTION AGREEMENT
ESTIMATED COSTS
APPENDIX D

 
 
 
 
*
Total
$(000)
4-Party
Split
3-Party
Split
 
 
 
 
 
 
 
1987
 
 
 
 
 
 
 
 
 
 
 
 
 
230 kV Breaker Uprates
 
 
 
 
 
 
 
 
 
 
 
11

—
PCB Uprates
448

448

 
 
15

—
CCVT Uprates
244

244

 
 
 
 
 
 
 
 
Sub Total
 
 
692

692

 
 
 
 
 
 
 
 
1987
 
 
 
 
 
 
 
 
 
 
 
 
 
230 kV Line Bay
 
 
 
 
 
 
 
 
 
 
 
1

—
Add Dead End Struct
80

 
80

 
2

—
Uprated Disc SW’s
117

 
117

 
2

—
Line Side Disc SW’s
117

 
117

 
2

—
PCB’s w CT’s
580

 
580

 
1

—
Set of 3 CCVT’s
38

 
38

 
3

—
90 Turning Struct’s
264

 
264

 
3

—
Tangent Struct’s
175

 
175

 
1

—
O.H. Line Across Bay
13

 
13

 
 
 
 
 
 
 
Sub Total
 
 
1,384

 
1,384

 
 
 
 
 
 
 
1993
 
 
 
 
 
 
 
 
 
 
 
 
 
230 kV El Sol Line #2
 
 
 
 
 
 
 
 
 
 
 
1

—
PCB w CT’s**
466

 
466

 
1

—
Bus Disc. SW
94

 
94

 
1

—
Line Disc. SW
94

 
94

 
 
 
 
 
 
 
Sub Total
 
 
654

 
654

*NOTE: All costs are escalated to year spent using 7% per year.
**Credit will be given for salvage value of existing breakers.

-43-

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

APPENDIX D (Cont’d)

4-Party Split
 
3-Party Split
APS
—
35
%
 
APS
—
44%
EPE
—
19
%
 
SRP
—
44%
PNM
—
12
%
 
PNM
—
12%
SRP
—
35
%
 
 
 
 

1986
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500 kV Palo Verde Line #2 Bay
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*
Total
$(000)
4-Party
Split
3-Party
Split
 
 
 
 
 
 
 
 
 
2

—
Int Dead End Struct’s
 
339

339

 
 
1

—
Add Dead End Struct
 
139

139

 
 
1

—
Line Relaying Term Fac
 
427

427

 
 
1

—
Set of 3 CCVT’s
 
60

60

 
 
1

—
Set of 3 Wave Trap’s
 
45

45

 
 
2

—
Line Side Disc SW’s
 
119

119

 
 
2

—
Bus Side Disc SW’s
 
177

177

 
 
2

—
PCB’s w/o CT’s
 
672

672

 
 
2

—
Sets of 3 CT’s
 
208

208

 
 
1

—
O.H. Line Across Bay
 
50

50

 
 
 
 
 
 
 
 
 
Sub Total
 
 
 
2,236

2,236

 
 
 
 
 
 
 
 
 
1987
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500 kV Transformer and Bay
 
 
 
 
 
 
 
 
 
 
 
 
 
2

—
Int Dead End Struct’s
 
339

 
339

 
2

—
Line Side Disc SW’s
 
119

 
119

 
1

—
PCB w/o CT’s
 
336

 
336

 
1

—
Set of 3 CT’s
 
104

 
104

 
1

—
Lot Tertiary & Jack Bus
 
580

 
580

 
3

—
500/230 kV Xfmr’s
 
5,519

 
5,519

 
 
 
 
 
 
 
 
Sub Total
 
 
 
6,997

 
6,997

 
 
 
 
 
 
 
 
TOTAL
 
 
 
 
11,963

2,928

9,035

*NOTE: All costs are escalated to year spent using 7% per year.

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image4a03.jpg [image4a03.jpg]

APPENDIX C
WESTWING SWITCHYARD
ONE LINE DIAGRAM

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WESTWING SWITCHYARD
AMENDED INTERCONNECTION AGREEMENT
APPENDIX E
EXAMPLE CALCULATION OF COST RESPONSIBILITY RATIOS

The plan for the Westwing Switchyard, as shown for 1986 on Appendices C and D,
provides for twenty (20)separate Functions, eight (8) on the 500 kV bus, four
(4)power transformer banks, and eight (8) on the 230 Kv bus. Five (5) Functions
on the 500 kV bus, three (3) power transformer banks, and seven (7) Functions on
the 230 kV bus, or a total of fifteen (15) Functions, are owned by the Navajo
Westwing Participants. Three (3) Functions on the 500 kV bus, one (1) power
transformer bank, and one (1) Function on the 230 kV bus, or a total of five (5)
Functions, will be owned by the Palo Verde-Westwing Participants. An example of
the computation of Cost Responsibility Ratios 1mder the aforementioned 1986
plan, for the composite switchyard, would be:

Navajo Westwing
=
X
=
15
=
75
%
Participants
 
X+Y+Z
 
15+5+0
 
 
 
 
 
 
 
 
 
Palo Verde-Westwing
=
Y
=
5
=
25
%
Participants
 
X+Y+Z
 
15+5+0
 
 
 
 
 
 
 
 
 
Third Party Cost
=
Z
=
0
=
0.0%

 
 
X+Y+Z
 
15+5+0
 
 
 
 
 
 
 
 
 

Computation of Cost Responsibility Ratios for the 500 kV yard, power transformer
banks, and the 230 kV switchyard would be computed in similar fashion and result
in the following:

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WESTWING- SWITCHYARD
AMENDED INTERCONNECTION AGREEMENT
APPENDIX E
EXAMPLE CALCULATION OF COST RESPONSIBILITY RATIOS
(Continued)

 
500 kV
only
Power
Transformers
only
230 kV
only
Navajo Westwing
62.50%
75%
87.50%
Participants
 
 
 
 
 
 
 
Palo Verde-Westwing
37.50%
25%
12.50%
Participants
 
 
 

                

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WESTWING SWITCHYARD
AMENDED INTERCONNECTION AGREEMENT
APPENDIX F
GENERAL CONTRACT PROVISIONS

1.DEFINITIONS:
The following terms, when used in this Appendix F, shall have the meanings
specified:
1.1    Contracting Officer means the Secretary of Interior, his duly appointed
successor or his duly authorized representative.
1.2    Contractor means any of the non-Federal Participants.
1.3    Non-Federal Participants means Arizona, Los Angeles, El Paso, Nevada,
PNM, Salt River Project and Tucson.
1.4    Agreement means the Amended Interconnection Agreement.
2.OFFICIALS NOT TO BENEFIT:
No Member of or Delegate to Congress or Resident Commissioner shall be admitted
to any share or part of this Agreement or to any benefit that may arise
herefrom, but this restriction shall not be construed to extend to this
Agreement if made with .a corporation or company for its general benefit.
3.COVENANT AGAINST CONTINGENT FEES:
The non-Federal Participants- warrant that no person or selling agency has been
employed or retained.to solicit or secure this Agreement upon an agreement or
understanding for a commission, percentage, brokerage, or contingent fee,
excepting bona fide

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employees or bona fide established commercial or selling agencies maintained by
a non-Federal Participant for the purpose of securing business. For breach or
violation of this warranty the United States shall have the right to annul this
Agreement with­out liability, or in its discretion to deduct from the payments
to be made hereunder, or otherwise recover the full amount of such commission,
percentage, brokerage or contingent fee.
4.EQUAL OPPORTUNITY CLAUSE:
4.1    Except as provided in Title 42 U.S.C. Section 2000-e-2 (i) and in keeping
with any obligation undertaken by any of the non-Federal Participants or its
assigns, pursuant to the terms of said Title 42 U.S.C. Section 2000-e-2(i) to
give preference for employment to qualified Indians for work on or near an
Indian Reservation, during the performance of this agreement, the Contractor
agrees as follows:
4.1.1
The Contractor will not discriminate against any employee or applicant for
employment because of race, color, religion, sex or national origin. The
Contractor will take affirmative action to insure that applicants are employed
and that employees are treated during employment, without regard to their race,
color, religion, sex or national origin. Such action shall include, but not be
limited to the following: employment, upgrading, demotion or transfer;
recruitment or recruitment advertising; layoff or termination; rates of pay or
other forms

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of compensation; and selection for training, including apprenticeship. The
Contractor agrees to post in conspicuous places available to employees
and applicants for employment, notices to be provided by the Contracting Officer
setting forth the provisions of this equal opportunity clause.
4.1.2
The Contractor will, in all solicitations or advertisements for employees·
placed by or on behalf Gf the Contractor, state that all qualified appli­cants
will receive consideration for employment without regard to race, color,
religion, sex or national origin.

4.1.3
The Contractor will send to each labor union or representative of workers with
which it has a collective bargaining agreement or other contract or
understanding a notice to be provided by the agency Contracting Officer advising
the labor union of workers' representative of the Contractor's commitments under
this equal opportunity clause and shall post copies of the notice in conspicuous
places available to employees and applicants for employment.

4.1.4
The Contractor will comply with all provisions of Executive Order No. 11246 of
September 24, 1965, and of the rules, regulations and relevant orders of the
Secretary of Labor.

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4.1.5
The Contractor will furnish all information and reports required by Executive
Order No. 11246 of September 24, 1965, and by the rules, regulations and orders
of the Secretary of Labor, or pursuant thereto, and will permit access to its
books, records and accounts by the contracting agency and the Secretary of Labor
for purposes of investiga­tion to ascertain compliance with such rules,
regulations and orders.

4.1.6
In the event of the Contractor' s noncompliance with this equal opportunity
clause, or with any of the said rules, regulations or orders, this Agreement
may be cancelled, terminated or suspended in whole or in part and the Contractor
may be declared ineligible for further government contracts in accordance with
procedures authorized in Executive Order No. 11246 of September 24, 1965, and
such other sanctions may be imposed and remedies invoked as provided in
Executive Order No. 11246 of September 24, 1965, or by rule, regulation or order
of the Secretary of Labor, or otherwise provided by law.

4.1.7
The Contractor will include the provisions of Sections 4.1.1 through 4.1. 7
hereof in every subcontract or purchase order unless exempted by
rules, regulations or orders of the Secretary of

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Labor issued pursuant to Section 204 of Executive Order No. 11246 of September
24, 1965, so that such provisions will be binding upon each subcontractor
or vendor. The Contractor will take such action with respect to any subcontract
or purchase order as the contracting agency may direct as a means of enforcing
such provisions, including sanctions for noncompliance; provided, however, that
in the event the Contractor becomes involved in, or is threatened with,
litigation with a subcontractor or vendor as a result of such direction by the
contracting agency, the Contractor may request the United States to enter into
such litigation to protect the interests of the United States.
5.WORK HOURS ACT OF 1962:
5.1    This Agreement, to the extent that it is of a character specified in the
Contract Work Hours Standards Act (Public Law 87-581, 76 Stat. 357) and is not
covered by the Walsh‑Healey Public Contracts Act (41 U.S.C. Sections 35‑45), is
subject to the following provisions and to all other provisions and exceptions
of said Contract Work Hours Standards Act:
5.1.1
No Contractor or subcontractor contracting for any part of the contract work
which may require or involve the employment of laborers or mechanics
shall require or permit any laborer or mechanic in

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any workweek in which he is employed on such work, to work in excess of eight
(8) hours in any calendar day or in excess of forty (40) hours in any workweek
unless such laborer or mechanic receives compensation at a rate not less than
one and one-half times his basic rate of pay for all hours worked in excess of
eight (8) hours in any calendar day or in excess of forty (40) hours in
such workweek, whichever is the greater number of overtime hours.
5 .1.2
In the event of any violation of the provisions of Section 5.1.1 hereof, the
Contractor and any subcontractor responsible for such violation shall be liable
to any affected employee for his unpaid wages.  In addition, such Contractor or
sub­contractor shall be liable to the United States for liquidated damages. Such
liquidated damages shall be computed, with respect to each individual laborer or
mechanic employed in violation of the provisions of Sections 5.1.1 hereof, in
the sum of Ten Dollars ($10.00) for each calendar day on which such employee was
required or permitted to work in excess of eight (8) hours or in excess of forty
(40) hours in a workweek without payment of the required overtime wages.

5.1.3
The Secretary of Labor may withhold, or cause to be

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withheld, from ·any monies payable on account of work performed by the
Contractor or subcontractor, the full amount of wages required by this
Agreement, and such sums as may administratively be determined to be necessary
to satisfy any liabili­ties of such Contractor or subcontractor for liquidate
damages as provided in Section 5.1.2 hereof.
5.1.4
The Contractor shall require the foregoing Sections 5.1.1, 5.1.2, 5.1.3 and this
5.1.4 to be inserted in all subcontracts.

6.EXAMINATION OF RECORDS:
The non-Federal Participants agree that the Comptroller General of the United
States, or any of his duly authorized representatives, shall, until the
expiration of three (3) years after final payment under this Agreement, have
access to and the right to examine any directly pertinent books, documents,
papers and records of the non-Federal Participants involving transactions
related to this Agreement.
7.ASSIGNMENT OF CLAIMS:
7.1
Pursuant to the provisions of the Assignment of Claims Act of 1940, as amended
(31 U.S.C. Section 203, 41 U.S.C. Section 15), if this agreement provides for
payments aggregating $1,000 or more, claims for monies due or to become due any
non-Federal Participant from the Government under this Agreement may be assigned
to a bank, trust company,

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or other financing institution, including any Federal lending agency, and may
thereafter be further assigned and reassigned to any such institution. Any such
assignment or reassignment shall cover all amounts payable under this Agreement
and not already paid and shall not be made to more than one party, except that
any such assignment or reassignment may be made to one party as agent or trustee
for two or more parties participating in such financing. Unless otherwise
provided in this Agreement, payments to an assignee of any monies due or to
become due under this Agreement shall not, to the extent provided in said Act,
be amended, be subject to reduction or setoff. (The preceding sentence applies
only if this Agreement is made in time of war or national emergency as defined
in said Act and is with the Department of Defense, the General Services
Administration, the Atomic Energy Commission, the National Aeronautics and Space
Administration, the Federal Aviation Agency, or any other department or agency
of the United States designated by the President pursuant to Clause 4 of
the proviso of Section 1 of the Assignment of Claims Act of 1940, as amended by
the Act of May 15, 1951, 65 Stat. 41.)
7.2
In no event shall copies of this Agreement or of any plans, specifications, or
other similar documents relating to work under this Agreement, if marked "Top
Secret," "Secret," or "Confidential," be furnished to any assignee of any claim
arising under this Agreement or to any other person not

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entitled to receive the same. However, a copy of any part or all of this
Agreement so marked may be furnished, or any information contained therein may
be disclosed, to such assignee upon the prior written authorization of the
Contracting Officer.
8.CONVICT LABOR:
In connection with the performance of work under this Agreement, the non-Federal
Participants agree not to employ any person undergoing sentence of imprisonment
at hard labor.
9.AGREEMENT SUBJECT TO COMPACTS, ACTS AND TREATY:
This Agreement is made upon the express conditions and with the express
understanding that all rights hereunder shall be subject to and controlled by
the applicable provisions of the Colorado River Compact dated November 24, 1922,
and proclaimed by the President of the United States June 25, 1929, the Boulder
Canyon Project Act approved December 21, 1928, the Boulder Canyon
Project Adjustment Act of July 19, 1940, the Upper Colorado River Basin Compact
dated October 11, 1948, and the Mexican Water Treaty of February 3, 1944.

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