EXHIBIT 4d



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                                  INDENTURE OF TRUST



                                       BETWEEN



                               COCONINO COUNTY, ARIZONA
                            POLLUTION CONTROL CORPORATION



                                         AND



                    FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION




                                                   
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                              DATED AS OF APRIL 1, 1997



                                                   
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                                     AUTHORIZING

                           POLLUTION CONTROL REVENUE BONDS,
                                    1997 SERIES A
                    (TUCSON ELECTRIC POWER COMPANY NAVAJO PROJECT)

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   <PAGE> 

					(i)

                                  TABLE OF CONTENTS*

                                                                       Page
                                                                       ----

             Parties  . . . . . . . . . . . . . . . . . . . . . . . . .   1
             Recitals . . . . . . . . . . . . . . . . . . . . . . . . .   1
             Granting Clause  . . . . . . . . . . . . . . . . . . . . .   2


                                      ARTICLE I

                                     DEFINITIONS

             Section 1.01.  Definitions.  . . . . . . . . . . . . . . .   2

                                      ARTICLE II

                                      THE BONDS

             Section 2.01.  Creation of Bonds.  . . . . . . . . . . . .   9
             Section 2.02.  Form of Bonds.  . . . . . . . . . . . . . .   9
             Section 2.03.  Execution of Bonds. . . . . . . . . . . . .  10
             Section 2.04.  Authentication of Bonds.  . . . . . . . . .  11
             Section 2.05.  Bonds Not General Obligations.  . . . . . .  11
             Section 2.06.  Prerequisites to Authentication of Bonds. .  11
             Section 2.07.  Lost or Destroyed Bonds or Bonds Canceled in
                            Error   . . . . . . . . . . . . . . . . . .  12
             Section 2.08.  Transfer, Registration and 
                            Exchange of Bonds .  . . . . . . . . . . . . 12
             Section 2.09.  Other Obligations . . . . . . . . . . . . .  14
             Section 2.10   Temporary Bonds.  . . . . . . . . . . . . .  14
             Section 2.11.  Cancellation of Bonds . . . . . . . . . . .  14
             Section 2.12.  Payment of Principal and Interest . . . . .  14
             Section 2.13.  Applicability of Book-Entry Provisions  . .  14

                                     ARTICLE III

                                 REDEMPTION OF BONDS

             Section 3.01.    Redemption Provisions . . . . . . . . . .  15
             Section 3.02.    Selection of Bonds to be Redeemed . . . .  16
             Section 3.03.    Procedure for Redemption  . . . . . . . .  17
             Section 3.04.    Payment of Redemption Price . . . . . . .  17
             Section 3.05.    No Partial Redemption After Default . . .  17


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          *  This table of contents is not a part of the Indenture, and is
             for convenience only.  The captions herein are of no legal
             effect and do not vary the meaning or legal effect of any part
             of the Indenture.

   <PAGE> 
					(ii)

                                      ARTICLE IV

                                    THE BOND FUND

             Section 4.01.    Creation of Bond Fund . . . . . . . . . .  18
             Section 4.02.    Liens . . . . . . . . . . . . . . . . . .  18
             Section 4.03.    Deposits into Bond Fund . . . . . . . . .  18
             Section 4.04.    Use of Moneys in Bond Fund  . . . . . . .  18
             Section 4.05.    Custody of Bond Fund; Withdrawal 
				of Moneys   . . . . . . . . . . . . . .  19
             Section 4.06.    Bonds Not Presented for Payment . . . . .  19
             Section 4.07.    Moneys Held in Trust  . . . . . . . . . .  20

                                      ARTICLE V

                                THE CONSTRUCTION FUND

             Section 5.01.    Creation of, and Disbursements from,
                                Construction Fund   . . . . . . . . . .  20
             Section 5.02.    Completion of Facilities; Termination of
                                Construction. . . . . . . . . . . . . .  21
             Section 5.03.    Redemption of All Outstanding Bonds . . .  22
             Section 5.04.    Acceleration of Bonds . . . . . . . . . .  22
             Section 5.05.    Refunding of Bonds  . . . . . . . . . . .  22
             Section 5.06.    Moneys Held in Trust  . . . . . . . . . .  23

                                      ARTICLE VI

                                     INVESTMENTS

             Section 6.01.    Investments . . . . . . . . . . . . . . .  23

                                     ARTICLE VII

                                  GENERAL COVENANTS

             Section 7.01.    No General Obligations  . . . . . . . . .  23
             Section 7.02.    Performance of Covenants of the Pollution
                                Control Corporation; Representations. .  24
             Section 7.03.    Maintenance of Rights and Powers;
                                Compliance with Laws  . . . . . . . . .  24
             Section 7.04.    Enforcement of Obligations of the Company;
                                Amendments  . . . . . . . . . . . . . .  24
             Section 7.05.    Further Instruments.  . . . . . . . . . .  24
             Section 7.06.    No Disposition of Trust Estate. . . . . .  25
             Section 7.07.    Financing Statements.   . . . . . . . . .  25
             Section 7.08.    Tax Covenants; Rebate Fund. . . . . . . .  25
             Section 7.09.    Notices of Trustee. . . . . . . . . . . .  26

                                     ARTICLE VIII

                                      DEFEASANCE

             Section 8.01.    Defeasance. . . . . . . . . . . . . . . .  26


  <PAGE> 

					(iii)

                                      ARTICLE IX

                                DEFAULTS AND REMEDIES

             Section 9.01.    Events of Default.  . . . . . . . . . . .  27
             Section 9.02.    Remedies. . . . . . . . . . . . . . . . .  28
             Section 9.03.    Restoration to Former Position. . . . . .  29
             Section 9.04.    Owners' Right to Direct Proceedings.  . .  29
             Section 9.05.    Limitation on Owners' Right to Institute
                                 Proceedings.  . . . . . . . . . . . .   29
             Section 9.06.    No Impairment of Right to 
                                 Enforce Payment. . . . . . . . . . . .  29
             Section 9.07.    Proceedings by Trustee without Possession
                                 of Bonds. . . . . . . . . . . . . . .   29
             Section 9.08.    No Remedy Exclusive.  . . . . . . . . . .  30
             Section 9.09.    No Waiver of Remedies.  . . . . . . . . .  30
             Section 9.10.    Application of Moneys.  . . . . . . . . .  30
             Section 9.11.    Severability of Remedies. . . . . . . . .  31

                                      ARTICLE X

                TRUSTEE; PAYING AGENT AND CO-PAYING AGENTS; REGISTRAR

             Section 10.01.   Acceptance of Trusts. . . . . . . . . . .  31
             Section 10.02.   No Responsibility for Recitals. . . . . .  31
             Section 10.03.   Limitations on Liability. . . . . . . . .  31
             Section 10.04.   Compensation, Expenses and Advances.  . .  31
             Section 10.05.   Notice of Events of Default.  . . . . . .  32
             Section 10.06.   Action by Trustee.  . . . . . . . . . . .  32
             Section 10.07.   Good Faith Reliance.  . . . . . . . . . .  32
             Section 10.08.   Dealings in Bonds and with the Pollution
                                 Control Corporation and the Company. .  33
             Section 10.09.   Allowance of Interest.  . . . . . . . . .  33
             Section 10.10.   Construction of Indenture.  . . . . . . .  33
             Section 10.11.   Resignation of Trustee. . . . . . . . . .  33
             Section 10.12.   Removal of Trustee. . . . . . . . . . . .  33
             Section 10.13.   Appointment of Successor Trustee. . . . .  34
             Section 10.14.   Qualifications of Successor Trustee.  . .  34
             Section 10.15.   Judicial Appointment of 
                                Successor Trustee.. . . . . . . . . . .  34    
             Section 10.16.   Acceptance of Trusts by Successor Trustee. 35  
             Section 10.17.   Successor by Merger or Consolidation. . .  35
             Section 10.18.   Standard of Care. . . . . . . . . . . . .  35
             Section 10.19.   Notice to Owners of Bonds of Event of
                                 Default.  . . . . . . . . . . . . . .   35
             Section 10.20.   Intervention in Litigation of the
                                Pollution Control Corporation.  . . . .  35
             Section 10.21.   Paying Agent; Co-Paying Agents. . . . . .  35
             Section 10.22.   Qualifications of Paying Agent and
                                 Co-Paying Agents; Resignation; Removal. 36
             Section 10.23.   Registrar.  . . . . . . . . . . . . . . .  36
             Section 10.24.   Qualifications of Registrar; Resignation;
                                Removal.  . . . . . . . . . . . . . . .  37
             Section 10.25.   Several Capacities. . . . . . . . . . . .  37


   <PAGE> 

					(iv)

                                      ARTICLE XI

                   EXECUTION OF INSTRUMENTS BY OWNERS OF BONDS AND
                             PROOF OF OWNERSHIP OF BONDS

             Section 11.01.   Execution of Instruments; Proof of
                                Ownership.  . . . . . . . . . . . . . .  38

                                     ARTICLE XII

                MODIFICATION OF THIS INDENTURE AND THE LOAN AGREEMENT

             Section 12.01.   Limitations.  . . . . . . . . . . . . . .  38
             Section 12.02.   Supplemental Indentures without Owner
                                Consent.  . . . . . . . . . . . . . . .  38
             Section 12.03.   Supplemental Indentures with Consent of
                                Owners. . . . . . . . . . . . . . . . .  39
             Section 12.04.   Effect of Supplemental Indenture. . . . .  40
             Section 12.05.   Consent of the Company. . . . . . . . . .  40
             Section 12.06.   Amendment of Loan Agreement without
                                Consent of Owners.  . . . . . . . . . .  40
             Section 12.07.   Amendment of Loan Agreement with Consent
                                of Owners.  . . . . . . . . . . . . . ..  41

                                     ARTICLE XIII

                                    MISCELLANEOUS

             Section 13.01.   Successors of the Pollution Control
                               Corporation.  . . . . . . . . . . . . ..  41
             Section 13.02.   Parties in Interest.  . . . . . . . . . .  41
             Section 13.03.   Severability. . . . . . . . . . . . . . .  42
             Section 13.04.   No Personal Liability of Pollution Control
                                Corporation Officials.  . . . . . . . .  42
             Section 13.05.   Bonds Owned by the Pollution Control
                                Corporation or the Company. . . . . . .  42
             Section 13.06.   Counterparts. . . . . . . . . . . . . . .  42
             Section 13.07.   Governing Law.  . . . . . . . . . . . . .  42
             Section 13.08.   Notices.  . . . . . . . . . . . . . . . .  42
             Section 13.09.   Holidays. . . . . . . . . . . . . . . . .  43
             Section 13.10.   Statutory Notice Regarding Cancellation of
                                Contracts.    . . . . . . . . . . . . .  43


          Testimonium . . . . . . . . . . . . . . . . . . . . . . . .    44
          Signatures and Seals  . . . . . . . . . . . . . . . . . . .    44

          Exhibit A - Form of Bond  . . . . . . . . . . . . . . . . . . A-1
          Exhibit B - Form of Endorsement of Transfer . . . . . . . . . B-1
          Exhibit C - Form of Certificate of Authentication . . . . . . C-1

   <PAGE> 


                                  INDENTURE OF TRUST

             THIS INDENTURE OF TRUST, dated as of April 1, 1997 (this
          "Indenture"), between COCONINO COUNTY, ARIZONA POLLUTION CONTROL
          CORPORATION, an Arizona nonprofit corporation and a political
          subdivision of the State of Arizona (hereinafter called the
          "Pollution Control Corporation"), and First Trust of New York,
          National Association, as trustee (hereinafter called the
          "Trustee"),

                                W I T N E S S E T H :


             WHEREAS, the Pollution Control Corporation is authorized and
          empowered under Title 35, Chapter 6, Arizona Revised Statutes, as
          amended (the "Act"), to issue its bonds in accordance with the
          Act and to make secured or unsecured loans for the purpose of
          financing or refinancing the acquisition, construction,
          improvement or equipping of pollution control facilities
          consisting of real and personal properties, including but not
          limited to machinery and equipment whether or not now in
          existence or under construction, which are used in whole or in
          part to control, prevent, abate, alter, dispose or store, solid
          waste, thermal, noise, atmospheric or water pollutants,
          contaminants or products therefrom, whether such facilities serve
          one or more purposes or functions in addition to controlling,
          preventing, abating, altering, disposing or storing such
          pollutants, contaminants or the products therefrom, and to charge
          and collect interest on such loans and pledge the proceeds of
          loan agreements as security for the payment of the principal of
          and interest on bonds, or designated issues of bonds, issued by
          the Pollution Control Corporation and any agreements made in
          connection therewith, whenever the Board of Directors of the
          Pollution Control Corporation finds such loans to be in
          furtherance of the purposes of the Pollution Control Corporation;

             WHEREAS, the Pollution Control Corporation has heretofore
          issued and sold $16,700,000 aggregate principal amount of its
          Pollution Control Revenue Bonds, 1996 Series A (Tucson Electric
          Power Company Project), all of which remain outstanding (the
          "1996 Bonds"), the proceeds of which were loaned to the Tucson
          Electric Power Company, an Arizona corporation (the "Company"),
          for the purpose of financing a portion of the costs of the
          acquisition, construction, improvement and equipping of certain
          of the pollution control facilities (the "Facilities") described
          in Exhibit A to the Loan Agreement, dated as of April 1, 1997
          (the "Loan Agreement"), between the Pollution Control Corporation
          and Company; and

             WHEREAS, the Pollution Control Corporation proposes to issue
          and sell its revenue bonds as provided herein (the "Bonds") for
          the purpose of financing a portion of the costs of the
          acquisition, construction, improvement and equipping certain
          additional items of the Facilities and for the purpose of
          refinancing, by the payment or redemption of the 1996 Bonds, or
          provision therefor, the portion of the costs of the acquisition,
          construction, improvement and equipping of the Facilities
          previously financed with the proceeds of the 1996 Bonds;

             NOW, THEREFORE, for and in consideration of these premises and
          the mutual covenants herein contained, of the acceptance by the
          Trustee of the trusts hereby created, of the purchase and
          acceptance of the Bonds by the Owners (as hereinafter defined)
          thereof and of the sum of one dollar lawful money of the United
          States of America, to it duly paid by the Trustee at or before
          the execution and delivery of these presents, and for other good
          and valuable consideration the receipt and sufficiency of which
          are hereby acknowledged, in order to secure the payment of the
          principal of and premium, if any, and interest on the Bonds at
          any time Outstanding (as hereinafter defined) under this
          Indenture according to their tenor and effect and the performance
          and observance by the Pollution Control Corporation of all the
          covenants and conditions expressed or implied herein and
          contained in the Bonds, the Pollution Control Corporation does
          hereby grant, bargain, sell, convey, mortgage, pledge and assign,
          and grant a security interest in, the Trust Estate (as
          hereinafter defined) to the Trustee, its successors in trust and
          their assigns forever;

             TO HAVE AND TO HOLD all the same with all privileges and
          appurtenances hereby conveyed and assigned, or agreed or intended
          so to be, to the Trustee, its successors in trust and their
          assigns forever;

             IN TRUST NEVERTHELESS, upon the terms and trusts herein set
          forth, first, for the equal and proportionate benefit and
          security of all Owners of the Bonds issued under and secured by
          this Indenture without preference, priority or distinction as to
          the lien of any Bonds over any other Bonds;

             PROVIDED, HOWEVER, that if, after the right, title and
          interest of the Trustee in and to the Trust Estate shall have
          ceased, terminated and become void in accordance with Article
          VIII hereof, the principal of and premium, if any, and interest
          on the Bonds shall have been paid to the Owners thereof, or shall
          have been paid to the Company pursuant to Section 4.06 hereof,
          then and in that case these presents and the estate and rights
          hereby granted shall cease, terminate and be void, and thereupon
          the Trustee shall cancel and discharge this Indenture and execute
          and deliver to the Pollution Control Corporation and the Company
          such instruments in writing as shall be requisite to evidence the
          discharge hereof; otherwise this Indenture is to be and remain in
          full force and effect.

             THIS INDENTURE OF TRUST FURTHER WITNESSETH, and it is
          expressly declared, that all Bonds issued and secured hereunder
          are to be issued, authenticated and delivered, and the Trust
          Estate and the other estate and rights hereby granted are to be
          dealt with and disposed of, under, upon and subject to the terms,
          conditions, stipulations, covenants, agreements, trusts, uses and
          purposes as hereinafter expressed, and the Pollution Control
          Corporation has agreed and covenanted, and does hereby agree and
          covenant, with the Trustee and with the respective Owners, from
          time to time, of the Bonds, as follows:


                                      ARTICLE I

                                     DEFINITIONS

             Section 1.01.    Definitions.  The terms defined in this
          Article I shall, for all purposes of this Indenture, have the
          meanings herein specified, unless the context clearly requires
          otherwise:

          Act:

             "Act" shall mean Title 35, Chapter 6, Arizona Revised
          Statutes, and all acts supplemental thereto or amendatory
          thereof.

          Administration Expenses:

             "Administration Expenses" shall mean the reasonable expenses
          incurred by the Pollution Control Corporation with respect to the
          Loan Agreement, this Indenture and any transaction or event
          contemplated by the Loan Agreement or this Indenture, including
          the compensation and reimbursement of expenses and advances
          payable to the Trustee, to the Paying Agent, any Co-Paying Agent
          and the Registrar.

          Authorized Company Representative:

             "Authorized Company Representative" shall mean each person at
          the time designated to act on behalf of the Company by written
          certificate furnished to the Pollution Control Corporation and
          the Trustee containing the specimen signature of such person and
          signed on behalf of the Company by its President, any Vice
          President or its Treasurer, together with its Secretary or any
          Assistant Secretary.

          Bond Counsel:

             "Bond Counsel" shall mean any firm or firms of nationally
          recognized bond counsel experienced in matters pertaining to the
          validity of, and exclusion from gross income for federal tax
          purposes of interest on bonds issued by states and political
          subdivisions, selected by the Company and acceptable to the
          Pollution Control Corporation.

          Bond Fund:

             "Bond Fund" shall mean the fund created by Section 4.01
          hereof.

          Bonds:

             "Bond" or "Bonds" shall mean the bonds authorized to be issued
          under this Indenture.

          Capital Account:

             "Capital Account" shall mean any of the accounts so named
          established under Sections 4.01 and 5.01 hereof.

          Code:

             "Code" shall mean the Internal Revenue Code of 1986 or any
          successor statute thereto.  Each reference to a section of the
          Code herein shall be deemed to include the United States Treasury
          Regulations proposed or in effect thereunder and applicable to
          the Bonds or the use of proceeds thereof, unless the context
          clearly requires otherwise.  References to any particular Code
          section shall, in the event of a successor Code, be deemed to be
          a reference to the successor to such Code section.

          Company:

             "Company" shall mean Tucson Electric Power Company, a
          corporation organized and existing under the laws of the State of
          Arizona, its successors and their assigns, including without
          limitation, any successor obligor under Section 6.01 or 7.01 of
          the Loan Agreement to the extent of the obligations assumed
          thereunder.

          Completion Date:

             "Completion Date" shall mean the date specified in Section
          3.04 of the Loan Agreement.

          Construction (and other forms of the word "construct"):

             "Construction" (and other forms of the word "construct") shall
          mean, when used with respect to the Facilities, the construction
          of the Facilities and shall include, without limitation, the
          acquisition, construction, improvement and equipping of the
          Facilities, all as contemplated by the Act.

          Construction Fund:

             "Construction Fund" shall mean the fund created by Section
          5.01 hereof.

          Cost of Construction:

             "Cost of Construction" shall embrace all costs paid or
          incurred by the Company with respect to the Facilities and the
          financing thereof for the payment of which the Pollution Control
          Corporation is authorized to issue bonds under the Act, and shall
          include without limitation (a) obligations paid or incurred by
          the Company for labor, materials and other expenses and to
          contractors, builders and materialmen in connection with the
          construction of the Facilities; (b) the costs paid or incurred by
          the Company for contract bonds and for insurance of all kinds
          that may be deemed by the Company to be desirable or necessary
          during the course of construction of the Facilities; (c) the
          expenses paid or incurred by the Company for test borings,
          surveys, estimates, plans and specifications, and preliminary
          investigations therefor, with respect to the Facilities and for
          supervising construction, as well as for the performance of all
          other duties required by or reasonably necessary for the proper
          construction, of the Facilities; (d) Administration Expenses paid
          or incurred prior to the Completion Date and legal, accounting,
          financial, underwriting, advertising, recording and printing
          expenses and all other fees and expenses paid or incurred by the
          Company in connection with the issuance and sale of the Bonds;
          (e) amounts in respect of interest (exclusive of accrued interest
          paid by the initial purchasers upon delivery thereof) accruing
          upon the Bonds until the Completion Date; (f) all other costs
          that the Company shall be required to pay under the terms of any
          contract or contracts for the construction of the Facilities; (g)
          any other costs or expenses paid or incurred by the Company, and
          any sums required to reimburse the Company for work done by it,
          with respect to the Facilities which are properly chargeable to
          the capital account of the Company with respect to the Facilities
          or would be so chargeable for federal income tax purposes either
          with a proper election or but for a proper election to deduct the
          same; and (h) amounts required to be paid to the United States by
          the Company (on behalf of the Pollution Control Corporation) in
          respect of the Bonds pursuant to Section 148 of the Code.  For
          purposes of the application of the proceeds of the Bonds, the
          Cost of Construction shall be deemed to include the payment or
          redemption, or provision therefor, of any obligations, other than
          the Bonds, issued to finance or refinance any of the costs listed
          above.  The Cost of Construction shall also be deemed to include
          all costs paid or incurred with respect to the Facilities by any
          Person (as defined in the Loan Agreement) to whom the Facilities
          have been leased or sold as a whole or in part, provided that
          such costs, had they been paid or incurred by the Company, would
          otherwise constitute a portion of the Cost of Construction.

          Depositary:

             "Depositary" shall mean The Depository Trust Company or any
          successor thereto as a securities repository for the Bonds.

          Facilities:

             "Facilities" shall mean the real and personal properties,
          machinery and equipment currently existing, under construction
          and to be constructed which are described in Exhibit A to the
          Loan Agreement, as revised from time to time to reflect any
          changes therein, additions thereto, substitutions therefor and
          deletions therefrom permitted by the terms of the Loan Agreement,
          subject, however, to the provisions of Section 7.01 of the Loan
          Agreement.

          General Account:

             "General Account" shall mean the account so named established
          under Section 4.01 hereof.

          Government Obligations:

             "Government Obligations" shall mean:

                    (a) direct obligations of, or obligations the principal
             of and interest on which are unconditionally guaranteed by,
             the United States of America entitled to the benefit of the
             full faith and credit thereof; and

                    (b) certificates, depositary receipts or other
             instruments which evidence a direct ownership interest in
             obligations described in clause (a) above or in any specific
             interest or principal payments due in respect thereof;
             provided, however, that the custodian of such obligations or
             specific interest or principal payments shall be a bank or
             trust company organized under the laws of the United States of
             America or of any state or territory thereof or of the
             District of Columbia, with a combined capital stock surplus
             and undivided profits of at least $50,000,000; and provided,
             further, that except as may be otherwise required by law, such
             custodian shall be obligated to pay to the holders of such
             certificates, depositary receipts or other instruments the
             full amount received by such custodian in respect of such
             obligations or specific payments and shall not be permitted to
             make any deduction therefrom.

          Indenture:

             "Indenture" shall mean this Indenture of Trust, dated as of
          April 1, 1997, between the Pollution Control Corporation and the
          Trustee, and any and all modifications, alterations, amendments
          and supplements thereto.

          Investment Account:

             "Investment Account" shall mean any of the accounts so named
          established under Sections 4.01 and 5.01 hereof.

          Investment Securities:

             "Investment Securities" shall mean any of the following
          obligations or securities on which neither the Company nor any of
          its subsidiaries is the obligor: (a) Government Obligations; (b)
          interest bearing deposit accounts (which may be represented by
          certificates of deposit) in national, state or foreign banks
          having a combined capital and surplus of not less than
          $10,000,000; (c) bankers' acceptances drawn on and accepted by
          commercial banks having a combined capital and surplus of not
          less than $10,000,000; (d) (i) direct obligations of, (ii)
          obligations the principal of and interest on which are
          unconditionally guaranteed by, and (iii) any other obligations
          the interest on which is exempt from federal income taxation
          issued by, any state of the United States of America, the
          District of Columbia or the Commonwealth of Puerto Rico, or any
          political subdivision, agency, authority or other instrumentality
          of any of the foregoing, which, in any case, are rated by a
          nationally recognized rating agency in any of its three highest
          rating categories; (e) obligations of any agency or
          instrumentality of the United States of America; (f) commercial
          or finance company paper which is rated by a nationally
          recognized rating agency in any of its three highest rating
          categories; (g) corporate debt securities issued by corporations
          having debt securities rated by a nationally recognized rating
          agency in any of its three highest rating categories; (h)
          repurchase agreements with banking or financial institutions
          having a combined capital and surplus of not less than
          $10,000,000 with respect to any of the foregoing obligations or
          securities; (i) shares or interests in registered investment
          companies whose assets consist of obligations or securities which
          are described in any other clause of this sentence; and (j) any
          other obligations which may lawfully be purchased by the Trustee. 
          The commercial banks and banking institutions referred to above
          may include the entities acting as Trustee, Paying Agent,
          Co-Paying Agent and Registrar, hereunder if such entities shall
          otherwise satisfy the requirements set forth above.

          Loan Agreement:

             "Loan Agreement" shall mean the Loan Agreement, dated as of
          April 1, 1997, between the Pollution Control Corporation and the
          Company relating to the Bonds, and any and all modifications,
          alterations, amendments and supplements thereto.

          Loan Payments:

             "Loan Payments" shall mean the payments required to be made by
          the Company pursuant to Section 5.01 of the Loan Agreement.

          1954 Code:

             "1954 Code" shall mean the Internal Revenue Code of 1954, as
          amended.

          1996 Bonds:

             "1996 Bonds" shall mean the $16,700,000 aggregate principal
          amount of the Pollution Control Corporation's Pollution Control
          Revenue Bonds, 1996 Series A (Tucson Electric Power Company
          Project).

          Notice by Mail:

             "Notice by Mail" or "notice" of any action or condition "by
          Mail" shall mean a written notice meeting the requirements of
          this Indenture mailed by first-class mail to the Owners of
          specified registered Bonds at the addresses shown in the
          registration books maintained pursuant to Section 2.08 hereof;
          provided, however, that if, because of the temporary or permanent
          suspension of delivery of first-class mail or for any other
          reason, it is impossible or impracticable to give such notice by
          first-class mail, then such giving of notice in lieu thereof,
          which may include publication, as shall be made with the approval
          of the Trustee (or, if there be no trustee hereunder, the
          Pollution Control Corporation) shall constitute a sufficient
          giving of such notice.

          Notice by Publication:

             "Notice by Publication" or "notice" of any action or condition
          "by Publication" shall mean publication of a notice meeting the
          requirements of this Indenture in a newspaper or financial
          journal of general circulation in The City of New York, New York,
          which carries financial news, is printed in the English language
          and is customarily published on each business day; provided,
          however, that any successive weekly publication of notice
          required hereunder may be made, unless otherwise expressly
          provided herein, on the same or different days of the week and in
          the same or different newspapers or financial journals; and
          provided, further, that if, because of the temporary or permanent
          suspension of the publication or general circulation of any
          newspaper or financial journal or for any other reason, it is
          impossible or impracticable to publish such notice in the manner
          herein described, then such publication in lieu thereof as shall
          be made with the approval of the Trustee (or, if there be no
          trustee hereunder, the Pollution Control Corporation) shall
          constitute a sufficient publication of such notice.

          Outstanding:

             "Outstanding", when used in reference to the Bonds, shall
          mean, as at any particular date, the aggregate of all Bonds
          authenticated and delivered under this Indenture except:

                    (a) those canceled by the Trustee at or prior to such
             date or delivered to or acquired by the Trustee at or prior to
             such date for cancellation;

                    (b) those deemed to be paid in accordance with Article
             VIII hereof; and

                    (c) those in lieu of or in exchange or substitution for
             which other Bonds shall have been authenticated and delivered
             pursuant to this Indenture, unless proof satisfactory to the
             Trustee and the Company is presented that such Bonds are held
             by a bona fide holder in due course.

          Owner:

             "Owner" shall mean the person in whose name any Bond is
          registered upon the registration books maintained pursuant to
          Section 2.08 hereof.  The Company may be an Owner.

          Paying Agent; Co-Paying Agent; Principal Office thereof:

             "Paying Agent" and "Co-Paying Agent" shall mean the paying
          agent and any co-paying agent appointed in accordance with
          Section 10.21 hereof.  "Principal Office" of the Paying Agent or
          any Co-Paying Agent shall mean the office thereof designated in
          writing to the Trustee.

          Plant:

             "Plant" shall mean the Navajo Generating Station, an electric
          power generating plant near Page, Arizona, in Coconino County,
          Arizona, and any additions or improvements thereto or
          replacements thereof.

          Pollution Control Corporation:

             "Pollution Control Corporation" shall mean Coconino County,
          Arizona Pollution Control Corporation, an Arizona nonprofit
          corporation and a political subdivision of the State of Arizona
          incorporated for and with the approval of the County of Coconino,
          Arizona, pursuant to the provisions of the Constitution of the
          State of Arizona and the Act, its successors and their assigns.

          Rebate Fund:

             "Rebate Fund" shall mean the fund created by Section 7.08
          hereof.

          Receipts and Revenues of the Pollution Control Corporation from
          the Loan Agreement:

             "Receipts and Revenues of the Pollution Control Corporation
          from the Loan Agreement" shall mean all moneys paid or payable to
          the Trustee for the account of the Pollution Control Corporation
          by the Company in respect of the Loan Payments and payments
          pursuant to Section 9.01 of the Loan Agreement, and all receipts
          of the Trustee which, under the provisions of this Indenture,
          reduce the amount of such payments.

          Record Date:

             "Record Date" shall mean the close of business on the
          fifteenth (15th) day of the calendar month immediately preceding
          each regularly scheduled interest payment date.

          Registrar; Principal Office thereof:

             "Registrar" shall mean the registrar appointed in accordance
          with Section 10.23 hereof.  "Principal Office" of the Registrar
          shall mean the office thereof designated in writing to the
          Trustee.

          Supplemental Indenture:

             "Supplemental Indenture" shall mean any indenture of the
          Pollution Control Corporation modifying, altering, amending,
          supplementing or confirming this Indenture for any purpose, in
          accordance with the terms hereof.

          Supplemental Loan Agreement:

             "Supplemental Loan Agreement" shall mean any agreement between
          the Pollution Control Corporation and the Company modifying,
          altering, amending or supplementing the Loan Agreement, in
          accordance with the terms thereof and hereof.

          Tax Agreement:

             "Tax Agreement" shall mean that tax certificate and agreement,
          dated the date of the initial authentication and delivery of the
          Bonds, between the Pollution Control Corporation and the Company,
          relating to the requirements of the Code and the 1954 Code, and
          any and all modifications, alterations, amendments and
          supplements thereto.

          Trust Estate:

             "Trust Estate" shall mean at any particular time all right,
          title and interest of the Pollution Control Corporation in and to
          the Loan Agreement (except its rights under Sections 5.03, 5.04,
          6.03 and 8.05 thereof and any rights of the Pollution Control
          Corporation to receive notices, certificates, requests,
          requisitions and other communications thereunder), including
          without limitation, the Receipts and Revenues of the Pollution
          Control Corporation from the Loan Agreement, the Bond Fund and
          the Construction Fund and all moneys and Investment Securities
          from time to time on deposit therein (excluding, however, any
          moneys or Investment Securities held in the Rebate Fund), any and
          all other moneys and obligations (other than Bonds) which at such
          time are deposited or are required to be deposited with, or are
          held or are required to be held by or on behalf of, the Trustee,
          the Paying Agent or any Co-Paying Agent in trust under any of the
          provisions of this Indenture and all other rights, titles and
          interests which at such time are subject to the lien of this
          Indenture; provided, however, that in no event shall there be
          included in the Trust Estate (a) moneys or obligations deposited
          with or held by the Trustee in the Rebate Fund pursuant to
          Section 7.08 hereof or (b) moneys or obligations deposited with
          or paid to the Trustee for the redemption or payment of Bonds
          which are deemed to have been paid in accordance with Article
          VIII hereof or moneys held pursuant to Section 4.06 hereof.

          Trustee; Principal Office thereof:

             "Trustee" shall mean First Trust of New York, National
          Association, as trustee under this Indenture, its successors in
          trust and their assigns.  "Principal Office" of the Trustee shall
          mean the principal corporate trust office of the Trustee, which
          office at the date of acceptance by the Trustee of the duties and
          obligations imposed on the Trustee by this Indenture is located
          at the address specified in Section 13.08 hereof.


                                      ARTICLE II

                                      THE BONDS

             Section 2.01.    Creation of Bonds.  There is hereby
          authorized and created under this Indenture, for the purpose of
          providing moneys to pay a part of the Cost of Construction, an
          issue of Bonds, entitled to the benefit, protection and security
          of this Indenture, in the aggregate principal amount of Thirty-
          six Million Seven Hundred Thousand Dollars ($36,700,000).  Each
          of the Bonds shall be designated by the title "Coconino County,
          Arizona Pollution Control Corporation Pollution Control Revenue
          Bond, 1997 Series A (Tucson Electric Power Company Navajo
          Project)".  The Bonds shall mature, subject to prior redemption
          upon the terms and conditions hereinafter set forth, on October
          1, 2032 and shall bear interest from the date thereof until
          payment of the principal or redemption price thereof shall have
          been made or provided for in accordance with the provisions
          hereof, whether at maturity, upon redemption or otherwise, at the
          rate of seven and one-eighth per centum (7 1/8%) per annum, with
          interest thereon payable semi-annually on each October 1 and
          April 1, commencing October 1, 1997.  Interest shall be
          calculated on the basis of a 360-day year consisting of twelve
          30-day months.

             Section 2.02.    Form of Bonds.  Bonds shall be authenticated
          and delivered hereunder solely as fully registered bonds without
          coupons in the denomination of $5,000 or integral multiples
          thereof.  Bonds shall be numbered as determined by the Trustee. 
          Bonds authenticated prior to the first interest payment date
          shall be dated April 1, 1997.  Bonds authenticated on or
          subsequent to the first interest payment date shall be dated the
          interest payment date next preceding the date of authentication
          thereof, unless such date of authentication shall be an interest
          payment date to which interest on the Bonds has been paid in full
          or duly provided for, in which case they shall be dated such date
          of authentication; provided, however, that if, as shown by the
          records of the Trustee, interest on the Bonds shall be in
          default, Bonds issued in exchange for Bonds surrendered for
          transfer or exchange shall be dated the date to which interest
          has been paid in full on the Bonds surrendered.

             Principal of and premium, if any, on Bonds shall be payable to
          the Owners of such Bonds upon presentation and surrender of such
          Bonds at the Principal Office of the Paying Agent or any
          Co-Paying Agent.  Interest on the Bonds shall be paid by check
          drawn upon the Paying Agent and mailed to the Owners of such
          Bonds as of the close of business on the Record Date with respect
          to each interest payment date at the registered addresses of such
          Owners as they shall appear as of the close of business on such
          Record Date on the registration books maintained pursuant to
          Section 2.08 hereof notwithstanding the cancellation of any such
          Bond upon any exchange or registration of transfer subsequent to
          such Record Date, except that if and to the extent that there
          should be a default on the payment of interest on any Bond, such
          defaulted interest shall be paid to the Owners in whose name such
          Bond (or any Bond or Bonds issued upon any exchange or
          registration of transfer thereof) is registered as of the close
          of business on a date selected by the Trustee in its discretion,
          but not more than 15 days or less than 10 days prior to the date
          of payment of such defaulted interest; notwithstanding the
          foregoing, upon request to the Paying Agent by an Owner of not
          less than $1,000,000 in aggregate principal amount of Bonds,
          interest on such Bonds and, after presentation and surrender of
          such Bonds, the principal thereof shall be paid to such Owner by
          wire transfer to the account maintained within the continental
          United States specified by such Owner or, if such Owner maintains
          an account with the entity acting as Paying Agent, by deposit
          into such account.  Payment as aforesaid shall be made in such
          coin or currency of the United States of America as, at the
          respective times of payment, shall be legal tender for the
          payment of public and private debts.

             The Bonds and the form for registration of transfer and the
          form of certificate of authentication to be printed on the Bonds
          are to be in substantially the forms thereof set forth in
          Exhibits A, B and C hereto, respectively, with necessary or
          appropriate variations, omissions and insertions as permitted or
          required by this Indenture.

             Section 2.03.    Execution of Bonds.  The Bonds shall be
          executed on behalf of the Pollution Control Corporation by the
          President or a Vice President of the Pollution Control
          Corporation and shall have affixed, impressed or reproduced
          thereon the official seal of the Pollution Control Corporation
          which shall be attested by the Secretary or an Assistant
          Secretary of the Pollution Control Corporation.  Each of the
          foregoing officers may execute or cause to be executed with a
          facsimile signature in lieu of his manual signature the Bonds,
          provided the signature of either the President or a Vice
          President of the Pollution Control Corporation or the Secretary
          or Assistant Secretary of the Pollution Control Corporation
          shall, if required by applicable laws, be manually subscribed.

             In case any officer of the Pollution Control Corporation whose
          signature or a facsimile of whose signature shall appear on the
          Bonds shall cease to be such officer before the authentication by
          the Trustee and delivery of such Bonds, such signature or such
          facsimile shall nevertheless be valid and sufficient for all
          purposes, the same as if such officer had remained in office
          until delivery; and any Bond may be signed on behalf of the
          Pollution Control Corporation by such persons as, at the time of
          execution of such Bond, shall be the proper officers of the
          Pollution Control Corporation, even though at the date of such
          Bond or of the execution and delivery of this Indenture any such
          person was not such officer.

             Section 2.04.    Authentication of Bonds.  Only such Bonds as
          shall have endorsed thereon a certificate of authentication
          substantially in the form set forth in Exhibit C hereto duly
          executed by the Trustee shall be entitled to any right or benefit
          under this Indenture.  No Bond shall be valid or obligatory for
          any purpose unless and until such certificate of authentication
          shall have been duly executed by the Trustee, and such executed
          certificate of authentication of the Trustee upon any such Bonds
          shall be conclusive evidence that such Bond has been
          authenticated and delivered under this Indenture.  The Trustee's
          certificate of authentication on any Bond shall be deemed to have
          been executed by it if signed with an authorized signature of the
          Trustee, but it shall not be necessary that the same person sign
          the certificate of authentication on all of the Bonds issued
          hereunder.  This Section 2.04 is subject to the provisions of
          Section 10.17 hereof.

             Section 2.05.    Bonds Not General Obligations.  Neither the
          County of Coconino, Arizona nor the State of Arizona shall in any
          event be liable for the payment of the principal of or premium,
          if any, or interest on the Bonds, and neither the Bonds nor the
          premium, if any, or the interest thereon, shall be construed to
          constitute an indebtedness of County of Coconino, Arizona or the
          State of Arizona within the meaning of any constitutional or
          statutory provisions whatsoever.  The Bonds and the premium, if
          any, and the interest thereon shall be limited obligations of the
          Pollution Control Corporation payable solely from the Receipts
          and Revenues of the Pollution Control Corporation from the Loan
          Agreement and the other moneys pledged therefor under this

          Indenture, and such fact shall be plainly stated on the face of
          each Bond.

             Section 2.06.    Prerequisites to Authentication of Bonds. 
          The Pollution Control Corporation shall execute and deliver to
          the Trustee and the Trustee shall authenticate the Bonds and
          deliver said Bonds to the initial purchasers thereof as may be
          directed hereinafter in this Section 2.06.

             Prior to the delivery on original issuance by the Trustee of
          any authenticated Bonds there shall be or have been delivered to
          the Trustee:

                    (a) a duly certified copy of a resolution of the Board
             of Directors of the Pollution Control Corporation authorizing
             the execution and delivery of this Indenture and the Loan
             Agreement and the issuance of the Bonds;

                    (b) an original duly executed counterpart or a duly
             certified copy of the Loan Agreement;

                    (c) a request and authorization to the Trustee on
             behalf of the Pollution Control Corporation, signed by its
             President or a Vice President, to authenticate and deliver the
             Bonds in the aggregate principal amount determined by this
             Indenture to the purchaser or purchasers therein identified
             upon payment to the Trustee, but for the account of the
             Pollution Control Corporation, of a sum specified in such
             request and authorization plus any accrued interest on such
             Bonds to the date of delivery; and

                    (d) a written statement on behalf of the Company,
             executed by the President, any Vice President or the
             Treasurer, (i) approving the issuance and delivery of the
             Bonds and (ii) consenting to each and every provision of this
             Indenture.

             Section 2.07.    Lost or Destroyed Bonds or Bonds Canceled in
          Error.  If any Bond, whether in temporary or definitive form, is
          lost (whether by reason of theft or otherwise), destroyed
          (whether by mutilation, damage, in whole or in part, or
          otherwise) or canceled in error, the Pollution Control
          Corporation may execute and the Trustee may authenticate a new
          Bond of like date and denomination and bearing a number not
          contemporaneously outstanding; provided that (a) in the case of
          any mutilated Bond, such mutilated Bond shall first be
          surrendered to the Trustee and (b) in the case of any lost Bond
          or Bond destroyed in whole, there shall be first furnished to the
          Pollution Control Corporation, the Trustee and the Company
          evidence of such loss or destruction.  In every case, the
          applicant for a substitute Bond shall furnish the Pollution
          Control Corporation, the Trustee and the Company such security or
          indemnity as may be required by any of them.  In the event any
          lost or destroyed Bond or a Bond canceled in error shall have
          matured or is about to mature, or has been called for redemption,
          instead of issuing a substitute Bond the Trustee may, in its
          discretion, pay the same without surrender thereof if there shall
          be first furnished to the Pollution Control Corporation, the
          Trustee and the Company evidence of such loss, destruction or
          cancellation, together with indemnity, satisfactory to them. 
          Upon the issuance of any substitute Bond, the Pollution Control
          Corporation and the Trustee may require the payment of a sum
          sufficient to cover any tax or other governmental charge that may
          be imposed in relation thereto.  The Trustee may charge the Owner
          of any such Bond with the Trustee's reasonable fees and expenses
          in connection with any transaction described in this Section
          2.07.

             Every substitute Bond issued pursuant to the provisions of
          this Section 2.07 by virtue of the fact that any Bond is lost,
          destroyed or canceled in error shall constitute an additional
          contractual obligation of the Pollution Control Corporation,
          whether or not the Bond so lost, destroyed or canceled shall be
          at any time enforceable, and shall be entitled to all the
          benefits of this Indenture equally and proportionately with any
          and all other Bonds duly issued hereunder.  All Bonds shall be
          held and owned upon the express condition that, to the extent
          permitted by law, the foregoing provisions are exclusive with
          respect to the replacement or payment of lost, destroyed or
          improperly canceled Bonds, notwithstanding any law or statute now
          existing or hereafter enacted.

             Section 2.08.    Transfer, Registration and Exchange of Bonds. 
          The Registrar shall maintain and keep, at its Principal Office,
          books for the registration and registration of transfer of Bonds,
          which, at all reasonable times, shall be open for inspection by
          the Pollution Control Corporation, the Trustee and the Company;
          and, upon presentation for such purpose of any Bond entitled to
          registration or registration of transfer at the Principal Office
          of the Registrar, the Registrar shall register or register the
          transfer in such books,  under such reasonable regulations as the
          Registrar may prescribe.  The Registrar shall make all necessary
          provisions to permit the exchange or registration of transfer of
          Bonds at its Principal Office.

             The transfer of any Bond shall be registered upon the
          registration books of the Registrar at the written request of the
          Owner thereof or his attorney duly authorized in writing, upon
          surrender thereof at the Principal Office of the Registrar,
          together with a written instrument of transfer satisfactory to
          the Registrar duly executed by the Owner or his duly authorized
          attorney.  Upon the registration of transfer of any such Bond or
          Bonds, the Pollution Control Corporation shall issue in the name
          of the transferee, in authorized denominations, a new Bond or
          Bonds in the same aggregate principal amount as the surrendered
          Bond or Bonds.

             The Pollution Control Corporation, the Trustee, the Paying
          Agent, any Co-Paying Agent and the Registrar may deem and treat
          the Owner of any Bond as the absolute owner of such Bond, whether
          such Bond shall be overdue or not, for the purpose of receiving
          payment of, or on account of, the principal of and premium, if
          any, and, except as provided in Section 2.02 hereof, interest on
          such Bond and for all other purposes, and neither the Pollution
          Control Corporation, the Trustee, the Paying Agent, any Co-Paying
          Agent nor the Registrar shall be affected by any notice to the
          contrary.  All such payments so made to any such Owner or upon
          his order shall be valid and effective to satisfy and discharge
          the liability upon such Bond to the extent of the sum or sums so
          paid.

             Bonds, upon surrender thereof at the Principal Office of the
          Registrar may, at the option of the Owner thereof, be exchanged
          for an equal aggregate principal amount of Bonds of any
          authorized denomination.

             In all cases in which the privilege of exchanging Bonds or
          registering the transfer of Bonds is exercised, the Pollution
          Control Corporation shall execute and the Trustee shall
          authenticate and deliver Bonds in accordance with the provisions
          of this Indenture.  For every such exchange or registration of
          transfer of Bonds, whether temporary or definitive, the Pollution
          Control Corporation, the Registrar, or the Trustee may make a
          charge sufficient to reimburse it for any tax or other
          governmental charge required to be paid with respect to such
          exchange or registration of transfer, which sum or sums shall be
          paid by the person requesting such exchange or registration of
          transfer as a condition precedent to the exercise of the
          privilege of making such exchange or registration of transfer. 
          The Registrar shall not be obligated (a) to make any such
          exchange or registration of transfer of Bonds during the fifteen
          (15) days next preceding the date on which notice of any proposed
          redemption of Bonds is given or (b) to make any exchange or
          registration of transfer of any Bonds called for redemption.

             The Bonds are to be initially registered in the name of Cede &
          Co., as nominee for the Depositary.  Such Bonds shall not be
          transferable or exchangeable, nor shall any purported transfer be
          registered, except as follows:

                    (a) such Bonds may be transferred in whole, and
             appropriate registration of transfer effected, if such
             transfer is by such nominee to the Depositary, or by the
             Depositary to another nominee thereof, or by any nominee of
             the Depositary to any other nominee thereof, or by the
             Depositary or any nominee thereof to any successor securities
             depositary or any nominee thereof; and

                    (b) such Bond may be exchanged for definitive Bonds
             registered in the respective names of the beneficial holders
             thereof, and thereafter shall be transferable without
             restriction, if:

                    (i)  the Depositary shall have notified the Company and
             the Trustee that it is unwilling or unable to continue to act
             as securities depositary with respect to such Bonds and the
             Trustee shall not have been notified by the Company within
             ninety (90) days of the identity of a successor securities
             depositary with respect to such Bonds;

                    (ii)  the Company shall have delivered to the Trustee a
             written instrument to the effect that such Bonds shall be so
             exchangeable on and after a date specified therein; or

                    (iii)  (1) an Event of Default shall have occurred and
             be continuing, (2) the Trustee shall have given notice of such
             Event of Default pursuant to Section 10.19 hereof and (3)
             there shall have been delivered to the Pollution Control
             Corporation, the Company and the Trustee an opinion of counsel
             to the effect that the interests of the beneficial owners of
             such Bonds in respect thereof will be materially impaired
             unless such owners become owners of definitive Bonds.

             The Bonds delivered to the Depositary may contain a legend
          reflecting the foregoing restrictions on registration of transfer
          and exchange.

             Section 2.09.    Other Obligations.  The Pollution Control
          Corporation expressly reserves the right to issue, to the extent
          permitted by law, but shall not be obligated to issue,
          obligations under another indenture or indentures to provide
          additional funds to pay the Cost of Construction of the
          Facilities or to refund all or any principal amount of the Bonds,
          or any combination thereof.

             Section 2.10     Temporary Bonds.  Pending the preparation of
          definitive Bonds, the Pollution Control Corporation may execute
          and the Trustee shall authenticate and deliver temporary Bonds. 
          Temporary Bonds shall be issuable as registered Bonds without
          coupons, of any authorized denomination, and substantially in the
          form of the definitive Bonds but with such omissions, insertions
          and variations as may be appropriate for temporary Bonds, all as
          may be determined by the Pollution Control Corporation. 
          Temporary Bonds may contain such reference to any provisions of
          this Indenture as may be appropriate.  Every temporary Bond shall
          be executed by the Pollution Control Corporation and be
          authenticated by the Trustee upon the same conditions and in
          substantially the same manner, and with like effect, as the
          definitive Bonds.  As promptly as practicable the Pollution
          Control Corporation shall execute and shall furnish definitive
          Bonds and thereupon temporary Bonds may be surrendered in
          exchange therefor without charge at the Principal Office of the
          Trustee, and the Trustee shall authenticate and deliver in
          exchange for such temporary Bonds a like aggregate principal
          amount of definitive Bonds of authorized denominations.  Until so
          exchanged the temporary Bonds shall be entitled to the same
          benefits under this Indenture as definitive Bonds.

             Section 2.11.    Cancellation of Bonds.  All Bonds which shall
          have been surrendered to the Paying Agent or any Co-Paying Agent
          for payment or redemption, and all Bonds which shall have been
          surrendered to the Registrar for exchange or registration of
          transfer, shall be delivered to the Trustee for cancellation. 
          All Bonds delivered to or acquired by the Trustee for
          cancellation shall be canceled and destroyed by the Trustee.  The
          Trustee shall furnish to the Pollution Control Corporation, the
          Paying Agent, the Registrar and the Company counterparts of
          certificates evidencing such cancellation and destruction and
          specifying such Bonds by number.

             Section 2.12.    Payment of Principal and Interest.  For the
          payment of interest on the Bonds, the Pollution Control
          Corporation shall cause to be deposited in the Bond Fund, on each
          interest payment date, solely out of the Receipts and Revenues of
          the Pollution Control Corporation from the Loan Agreement and
          other moneys pledged therefor, an amount sufficient to pay the
          interest to become due on such interest payment date.  The
          obligation of the Pollution Control Corporation to cause any such
          deposit to be made hereunder shall be reduced by the amount of
          moneys in the Bond Fund available on such interest payment date
          for the payment of interest on the Bonds.

             For the payment of the principal of the Bonds upon maturity,
          the Pollution Control Corporation shall cause to be deposited in
          the Bond Fund, on the stated or accelerated date of maturity,
          solely out of the Receipts and Revenues of the Pollution Control
          Corporation from the Loan Agreement and other moneys pledged
          therefor, an amount sufficient to pay the principal of the Bonds. 
          The obligation of the Pollution Control Corporation to cause any
          such deposit to be made hereunder shall be reduced by the amount
          of moneys in the Bond Fund available on the maturity date for the
          payment of the principal of the Bonds.

             Section 2.13.    Applicability of Book-Entry Provisions.
          Anything in this Indenture to the contrary notwithstanding, (a)
          the provisions of the Blanket Issuer Letter of Representations,
          dated October 12, 1995, between the Pollution Control Corporation
          and The Depository Trust Company relating to the manner of and
          procedures for payment and redemption of Bonds and related
          matters shall apply so long as such Depositary shall be the Owner
          of all Outstanding Bonds and (b) the Pollution Control
          Corporation, the Trustee or the Paying Agent, as applicable,  may
          enter into a similar agreement, on terms satisfactory to the
          Company, with any subsequent Depositary and the provisions
          thereof shall apply so long as such Depositary shall be the Owner
          of all Outstanding Bonds.

                                     ARTICLE III

                                 REDEMPTION OF BONDS

             Section 3.01.    Redemption Provisions.  (a)  The Bonds shall
          be subject to redemption by the Pollution Control Corporation, at
          the direction of the Company, on any date on or after October 1,
          2007 in whole at any time or in part from time to time, at the
          applicable redemption price (expressed as a percentage of
          principal amount) set forth below, plus accrued interest to the
          redemption date:

                  Redemption Period         Redemption Price
                  -----------------         ----------------

           October 1, 2007 through
           September 30, 2008                         102%

           October 1, 2008 through
           September 30, 2009                         101%

           October 1, 2009 and thereafter             100%

             (b)  The Bonds shall be subject to redemption by the Pollution
          Control Corporation, at the direction of the Company, in whole at
          any time at the principal amount thereof plus accrued interest to
          the redemption date, if:

                    (i)  the Company shall have determined that the
             continued operation of the Plant is impracticable,
             uneconomical or undesirable for any reason;

                    (ii)  the Company shall have determined that the
             continued operation of the Facilities is impracticable,
             uneconomical or undesirable due to (A) the imposition of
             taxes, other than ad valorem taxes currently levied upon
             privately owned property used for the same general purpose as
             the Facilities, or other liabilities or burdens with respect
             to the Facilities or operation thereof, (B) changes in
             technology, in environmental standards or legal requirements
             or in the economic availability of materials, supplies,
             equipment or labor or (C) destruction of or damage to all or
             part of the Facilities;

                    (iii)  all or substantially all of the Facilities or
             the Plant shall have been condemned or taken by eminent
             domain; or

                    (iv)  the operation of the Facilities or the Plant
             shall have been enjoined or shall have otherwise been
             prohibited by, or shall conflict with, any order, decree, rule
             or regulation of any court or of any federal, state or local
             regulatory body, administrative agency or other governmental
             body.

             (c)  The Bonds shall be subject to mandatory redemption by the
          Pollution Control Corporation, at the principal amount thereof
          plus accrued interest to the redemption date, on the 180th day
          (or such earlier date as may be designated by the Company) after
          a final determination by a court of competent jurisdiction or an
          administrative agency, to the effect that, as a result of a
          failure by the Company to perform or observe any covenant,
          agreement or representation contained in the Loan Agreement, the
          interest payable on the Bonds is included for federal income tax
          purposes in the gross income of the owners thereof, other than
          any owner of a Bond who is a "substantial user" of the Facilities
          or a "related person" within the meaning of Section 103(b)(13) of
          the 1954 Code.  No determination by any court or administrative
          agency shall be considered final for the purposes of this Section
          3.01 (c) unless the Company shall have been given timely notice
          of the proceeding which resulted in such determination and an
          opportunity to participate in such proceeding, either directly or
          through an owner of a Bond, and until the conclusion of any
          appellate review sought by any party to such proceeding or the
          expiration of the time for seeking such review. The Bonds shall
          be redeemed either in whole or in part in such principal amount
          that the interest payable on the Bonds remaining outstanding
          after such redemption would not be included in the gross income
          of any owner thereof, other than an owner of a Bond who is a
          "substantial user" of the Facilities or a "related person" within
          the meaning of Section 103(b)(13) of the 1954 Code.

             (d)  In the event that the aggregate of the amounts deposited
          pursuant to Section 5.02 hereof into the Capital Account and the
          Investment Account maintained within the Bond Fund, together with
          any income or other gain from the investment thereof, shall at
          any time, or from time to time, be equal to or greater than
          $5,000, but only to the extent that such amounts are required
          under Section 4.04(b) hereof to be applied to the redemption of
          Bonds, the Pollution Control Corporation shall redeem Bonds, at
          the principal amount thereof plus accrued interest to the
          redemption date, in the largest aggregate principal amount which
          does not exceed the amount of such deposit or deposits, together
          with such income or gain, on the next interest payment date on
          which a redemption may be made in accordance with the provisions
          of Section 3.03(a) or (b) hereof and on which Bonds, in such
          amount, are otherwise redeemable at the principal amount thereof
          under subsection (a) or (b) of this Section 3.01.

             Section 3.02.    Selection of Bonds to be Redeemed.  If less
          than all the Bonds shall be called for redemption under any
          provision of this Indenture permitting such partial redemption,
          the particular Bonds or portions of Bonds to be redeemed shall be
          selected by the Trustee, in such manner as the Trustee in its
          discretion may deem proper, in the aggregate principal amount
          designated to the Trustee by the Company or otherwise as required
          by this Indenture; provided, however, that if, as indicated in a
          certificate of an Authorized Company Representative delivered to
          the Trustee, the Company shall have offered to purchase all Bonds
          then Outstanding and less than all such Bonds have been tendered
          to the Company for such purchase, the Trustee, at the direction
          of an Authorized Company Representative, shall select for
          redemption all such Bonds which shall not have been so tendered;
          and provided, further, that the portion of any Bond to be
          redeemed shall be in the principal amount of $5,000 or some
          integral multiple thereof and that, in selecting Bonds for
          redemption, the Trustee shall treat each Bond as representing
          that number of Bonds which is obtained by dividing the principal
          amount of such Bond by $5,000.  If it is determined that one or
          more, but not all, of the $5,000 units of principal amount
          represented by any such Bond is to be called for redemption,
          then, upon notice of intention to redeem such $5,000 unit or
          units, the Owner of such Bond shall forthwith surrender such Bond
          to the Paying Agent or any Co-Paying Agent for (y) payment to
          such Owner of the redemption price (including the redemption
          premium, if any, and accrued interest to the date fixed for
          redemption) of the $5,000 unit or units of principal amount
          called for redemption and (z) delivery to such Owner of a new
          Bond or Bonds in the aggregate principal amount of the unredeemed
          balance of the principal amount of any such Bond.  Bonds
          representing the unredeemed balance of the principal amount of
          any such Bond shall be delivered to the Owner thereof, without
          charge therefor.  If the Owner of any such Bond of a denomination
          greater than $5,000 shall fail to present such Bond to the Paying
          Agent or any Co-Paying Agent for payment and exchange as
          aforesaid, such Bond shall, nevertheless, become due and payable
          on the date fixed for redemption to the extent of the $5,000 unit
          or units of principal amount called for redemption (and to that
          extent only).

             Section 3.03.    Procedure for Redemption.  (a) In the event
          any of the Bonds are called for redemption, the Trustee shall
          give notice, in the name of the Pollution Control Corporation, of
          the redemption of such Bonds, which notice shall (i) specify the
          Bonds to be redeemed, the redemption date, the redemption price,
          and the place or places where amounts due upon such redemption
          will be payable (which shall be the Principal Office of the
          Paying Agent or any Co-Paying Agent) and, if less than all of the
          Bonds are to be redeemed, the numbers of the Bonds to be
          redeemed, and the portion of the principal amount of any Bond to
          be redeemed in part, (ii) state any condition to such redemption
          and (iii) state that on the redemption date, and upon the
          satisfaction of any such condition, the Bonds or portions thereof
          to be redeemed shall cease to bear interest.  Such notice may set
          forth any additional information relating to such redemption. 
          Such notice shall be given by Mail at least thirty (30) days
          prior to the date fixed for redemption to the Owners of the Bonds
          to be redeemed; provided, however, that failure duly to give such
          Notice by Mail, or any defect therein, shall not affect the
          validity of any proceedings for the redemption of Bonds as to
          which there shall have been no such failure or defect.  If a
          notice of redemption shall be unconditional, or if the conditions
          of a conditional notice or redemption shall have been satisfied,
          then upon presentation and surrender of Bonds so called for
          redemption at the place or places of payment, such Bonds shall be
          redeemed.  The Trustee shall promptly deliver to the Company a
          copy of each such notice of redemption.

             (b) With respect to any notice of redemption of Bonds in
          accordance with subsection (a) or (b) of Section 3.01 hereof,
          unless, upon the giving of such notice, such Bonds shall be
          deemed to have been paid within the meaning of Article VIII
          hereof, such notice shall state that such redemption shall be
          conditional upon the receipt, by the Trustee at or prior to the
          opening of business on the date fixed for such redemption, of
          moneys sufficient to pay the principal of and premium, if any,
          and interest on such Bonds to be redeemed, and that if such
          moneys shall not have been so received said notice shall be of no
          force and effect and the Pollution Control Corporation shall not
          be required to redeem such Bonds.  In the event that such notice
          of redemption contains such a condition and such moneys are not
          so received, the redemption shall not be made and the Trustee
          shall within a reasonable time thereafter give notice, in the
          manner in which the notice of redemption was given, that such
          moneys were not so received.

             (c)  Any Bonds and portions of Bonds which have been duly
          selected for redemption shall cease to bear interest on the
          specified redemption date provided that moneys sufficient to pay
          the principal of, premium, if any, and interest on such Bonds
          shall be on deposit with the Trustee on the date fixed for
          redemption so that such Bonds will be deemed to be paid in
          accordance with Article VIII hereof.

             Section 3.04.    Payment of Redemption Price.  For the
          redemption of any of the Bonds, the Pollution Control Corporation
          shall cause to be deposited in the Bond Fund, on the redemption
          date, solely out of the Receipts and Revenues of the Pollution
          Control Corporation from the Loan Agreement, an amount sufficient
          to pay the principal of and premium, if any, and interest to
          become due on such redemption date.  The obligation of the
          Pollution Control Corporation to cause any such deposit to be
          made hereunder shall be reduced by the amount of moneys in the
          Bond Fund available on such redemption date for payment of the
          principal of and premium, if any, and accrued interest on the
          Bonds to be redeemed.

             Section 3.05.    No Partial Redemption After Default. 
          Anything in this Indenture to the contrary notwithstanding, if
          there shall have occurred and be continuing an Event of Default
          defined in clause (a) or (b) of the first paragraph of Section
          9.01 hereof, there shall be no redemption of less than all of the
          Bonds at the time Outstanding other than a partial redemption in
          connection with an offer by the Company to purchase all Bonds
          Outstanding as contemplated in the first proviso to the first
          sentence of Section 3.02 hereof.


                                      ARTICLE IV

                                    THE BOND FUND

             Section 4.01.    Creation of Bond Fund.  There is hereby
          created and established with the Trustee a trust fund in the name
          of the Pollution Control Corporation to be designated "Coconino
          County, Arizona Pollution Control Corporation Pollution Control
          Revenue Bonds, 1997 Series A (Tucson Electric Power Company
          Navajo Project) Bond Fund".  The Trustee shall establish and
          maintain within the Bond Fund a "Capital Account", an "Investment
          Account" and a "General Account".  In addition, the Trustee shall
          establish and maintain such segregated subaccounts within the
          Capital Account or the Investment Account and such other
          segregated subaccounts within the Bond Fund as may be requested
          by an Authorized Company Representative.  The Bond Fund, and all
          moneys and certificated securities therein, shall be kept in the
          possession of the Trustee.

             Section 4.02.    Liens.  The Pollution Control Corporation
          shall not create any lien upon the Bond Fund or upon the Receipts
          and Revenues of the Pollution Control Corporation from the Loan
          Agreement other than the lien hereby created.

             Section 4.03.    Deposits into Bond Fund.  (a) There shall be
          deposited into the Bond Fund:

                    (i) the accrued interest, if any, on the Bonds accrued
             to the date of delivery thereof and paid by the initial
             purchasers thereof, such accrued interest to be deposited into
             the General Account;

                    (ii) all amounts required to be deposited into the Bond
             Fund by Section 5.02 hereof, such amounts to be deposited into
             the Capital Account or the Investment Account;

                    (iii) all amounts required to be deposited into the
             Bond Fund by Sections 5.03 and 5.04 hereof, such amounts to be
             deposited into the General Account;

                    (iv) all Loan Payments, such payments and moneys to be
             deposited into the General Account; and

                    (v) all other moneys received by the Trustee under and
             pursuant to any provision of the Loan Agreement, other than
             Sections 5.03, 5.04 and 8.05 thereof, or from any other source
             when accompanied by directions by the Company that such moneys
             are to be paid into the Bond Fund, such moneys to be deposited
             into the account specified by such provision of the Loan
             Agreement or by such directions, or, if no specification is
             made, into the General Account.

             (b) All income or other gain from the investment of moneys in
          the Capital Account or the Investment Account shall be deposited
          into the Investment Account.  All income or other gain from the
          investment of moneys in the General Account shall be deposited
          into the General Account.

             Section 4.04.    Use of Moneys in Bond Fund.  (a)   Moneys, if
          any, paid into the Bond Fund pursuant to clause (i) of Section
          4.03(a) hereof shall be applied to the payment of interest on the
          Bonds.  Except as otherwise provided in Sections 4.06, 9.01 and
          10.04 hereof, all other moneys in the Bond Fund constituting part
          of the Trust Estate shall be used solely for the payment of the
          principal of and premium, if any, and interest on the Bonds as
          the same shall become due and payable at maturity, upon
          redemption or otherwise.  

             (b) Moneys deposited pursuant to Section 5.02 hereof into the
          Capital Account or the Investment Account maintained within the
          Bond Fund, and any income or other gain from the investment
          thereof, shall be applied by the Trustee (i) in whole or in part
          (A) to the purchase of Bonds in such amounts, at such prices, at
          such times and otherwise as directed by an Authorized Company
          Representative, or to the redemption, at the direction of the
          Company, of Bonds pursuant to subsection (b) or, if applicable,
          (a) of Section 3.01 hereof or (B) in any other manner directed by
          an Authorized Company Representative which, as indicated in an
          opinion of Bond Counsel furnished by the Company to the Pollution
          Control Corporation and the Trustee, will not, in and of itself,
          impair the validity under the Act of the Bonds or the exclusion
          of the interest on the Bonds from gross income for federal income
          tax purposes, or, in the absence of any such purchase, redemption
          or direction on or prior to the forty-fifth (45th) day prior to
          the first interest payment date specified in Section 3.01(d)
          hereof, (ii) to the payment of principal upon the redemption,
          from time to time, of Bonds pursuant to Section 3.01(d) hereof,
          any moneys which are not so applied to be retained in the
          accounts into which they were deposited and applied by the
          Trustee to the payment of principal of Bonds either at maturity
          or upon the redemption of all or any portion of the Bonds,
          whichever occurs first.  Pending the application of moneys
          deposited into the Bond Fund pursuant to Section 5.02 hereof,
          such moneys may be invested in Investment Securities in the
          manner permitted by Section 6.01 hereof, provided that such
          investment shall not produce a yield greater than the yield on
          the Bonds unless, as indicated in an opinion of Bond Counsel
          furnished by the Company to the Pollution Control Corporation and
          the Trustee, investments producing a greater yield would not, in
          and of itself, impair the exclusion from gross income for federal
          tax purposes of the interest on the Bonds.

             (c) In the event that all of the Bonds cease to be
          Outstanding, any moneys remaining in the Capital Account or the
          Investment Account shall be deposited into the General Account.

             Section 4.05.    Custody of Bond Fund; Withdrawal of Moneys. 
          The Bond Fund shall be in the custody of the Trustee but in the
          name of the Pollution Control Corporation and the Pollution
          Control Corporation hereby authorizes and directs the Trustee to
          withdraw from the Bond Fund and furnish to the Paying Agent funds
          constituting part of the Trust Estate sufficient to pay the
          principal of and premium, if any, and interest on the Bonds as
          the same shall become due and payable, and to withdraw from the
          Bond Fund funds sufficient to pay any other amounts payable
          therefrom as the same shall become due and payable.


             Section 4.06.    Bonds Not Presented for Payment.  In the
          event any Bonds shall not be presented for payment when the
          principal thereof and premium, if any, thereon become due, either
          at maturity or at the date fixed for redemption thereof or
          otherwise, if moneys sufficient to pay such Bonds are held by the
          Paying Agent or any Co-Paying Agent for the benefit of the Owners
          thereof, the Paying Agent shall segregate and hold such moneys in
          trust, without liability for interest thereon, for the benefit of
          the Owners of such Bonds, who shall, except as provided in the
          following paragraph, thereafter be restricted exclusively to such
          fund or funds for the satisfaction of any claim of whatever
          nature on their part under this Indenture or relating to said
          Bonds.

             Any moneys which the Paying Agent shall segregate and hold in
          trust for the payment of the principal of and premium, if any, or
          interest on any Bond and remaining unclaimed for one year after
          such principal, premium, if any, or interest has become due and
          payable shall, upon the Company's written request to the Paying
          Agent, be paid to the Company, with notice to the Trustee of such
          action; provided, however, that before the Paying Agent shall be
          required to make any such repayment, the Paying Agent may, and at
          the request of the Trustee shall, at the expense of the Company
          cause notice to be given once by Publication to the effect that
          such money remains unclaimed and that, after a date specified
          therein, which shall not be less than thirty (30) days from the
          date of such notice by Publication, any unclaimed balance of such
          moneys then remaining will be paid to the Company.  After the
          payment of such unclaimed moneys to the Company, the Owner of
          such Bond shall thereafter look only to the Company for the
          payment thereof, and all liability of the Pollution Control
          Corporation, the Trustee and the Paying Agent with respect to
          such moneys shall thereupon cease.

             Section 4.07.    Moneys Held in Trust.  All moneys and
          Investment Securities held by the Trustee in the Bond Fund, and
          all moneys required to be deposited with or paid to the Trustee
          for deposit into the Bond Fund, and all moneys withdrawn from the
          Bond Fund and held by the Trustee, the Paying Agent, any
          Co-Paying Agent, shall be held by the Trustee, the Paying Agent
          or any Co-Paying Agent, as the case may be, in trust, and such
          moneys and Investment Securities (other than moneys held pursuant
          to Section 4.06 hereof and moneys or Investment Securities held
          in the Rebate Fund established in furtherance of the obligations
          of the Company under clause (b) of Section 6.04 of the Loan
          Agreement), while so held or so required to be deposited or paid,
          shall constitute part of the Trust Estate and be subject to the
          lien and security interest created hereby in favor of the Trustee
          for the benefit of the Owners from time to time of the Bonds. 
          The Company shall have no right, title or interest in the Bond
          Fund, except such rights as may arise after the right, title and
          interest of the Trustee in and to the Trust Estate and all
          covenants, agreements and other obligations of the Pollution
          Control Corporation under this Indenture shall have ceased,
          terminated and become void and shall have been satisfied and
          discharged in accordance with Article VIII hereof.


                                      ARTICLE V

                                THE CONSTRUCTION FUND

             Section 5.01.    Creation of, and Disbursements from,
          Construction Fund.  (a) There is hereby created and established
          with the Trustee a trust fund in the name of the Pollution
          Control Corporation to be designated "Coconino County, Arizona
          Pollution Control Corporation Pollution Control Revenue Bonds,
          1997 Series A (Tucson Electric Power Company Navajo Project)
          Construction Fund".  The Trustee shall establish and maintain
          within the Construction Fund a "Capital Account" and an
          "Investment Account".  The Trustee shall establish and maintain
          any subaccount within the Capital Account or the Investment
          Account which may be requested by an Authorized Company
          Representative.  The Construction Fund, and all moneys and
          certificated securities therein, shall be kept in the possession
          of the Trustee.  The Pollution Control Corporation shall not
          create any lien upon the Construction Fund other than the lien
          hereby created.

             (b) The proceeds from the issuance and sale of the Bonds,
          other than the $16,700,000 deposited in escrow with the trustee
          for the 1996 Bonds as provided in Section 4.03 of the Loan
          Agreement and accrued interest, if any, on such Bonds to the date
          of delivery thereof paid by the initial purchasers thereof, shall
          be deposited into the Capital Account.  All income or other gain
          from the investment of moneys in the Capital Account or the
          Investment Account shall be deposited into the Investment
          Account.  In the event that all or a portion of the proceeds of
          the Bonds shall have been applied to the payment or redemption,
          or provision therefor, of any obligations issued by the Pollution
          Control Corporation other than Bonds, any balance remaining in
          the construction, acquisition or other similar fund maintained in
          respect of such obligations, which balance shall have been
          delivered to the Trustee accompanied by a direction of the
          Company that such balance be deposited into the Construction
          Fund, shall be deposited into the Capital Account and the
          Investment Account in accordance with such direction.

             (c) The Trustee is hereby authorized and directed to disburse
          moneys in the Construction Fund to or upon the order of the
          Company from time to time upon receipt by the Trustee of
          requisitions executed by, or communications by telegram, telex or
          facsimile transmission from, an Authorized Company
          Representative, which requisitions or communications shall state
          with respect to each payment to be made: (i) the requisition
          number, (ii) the name and address of the person, firm or
          corporation to whom payment is due or has been made (or, in the
          case of payments to the Bond Fund, instructions to make such
          payments thereto), (iii) the amount paid or to be paid, (iv) the
          account or accounts within the Construction Fund from which
          payment of such requisition, or any portion thereof, shall be
          made, (v)(A) that each obligation, item of cost or expense with
          respect to which such requisition is being made has been properly
          incurred and has been paid or is then due and payable as an item
          of the Cost of Construction, is a proper charge against the
          Construction Fund, and has not been the basis of any previous
          final payment therefrom or from the proceeds of any other
          obligations issued by the Pollution Control Corporation or (B) in
          the event that a portion of the Bonds shall have been paid,
          redeemed or deemed to have been paid within the meaning of
          Article VIII hereof by reason of the application of the proceeds
          of the sale of any obligations issued under an indenture other
          than this Indenture and if the payment of such requisition is to
          be made into the construction, acquisition or other similar fund
          created under such other indenture, that upon disbursement from
          such construction, acquisition or other similar fund, each
          obligation, item of cost or expense mentioned in the requisition
          for such disbursement shall have been properly incurred and shall
          have been paid or will then be due and payable as an item of the
          Cost of Construction, (vi) that the payment of such requisition
          will not result in a breach of any of the covenants of the
          Company contained in Section 4.04 (c) or (d) of the Loan
          Agreement and (vii) that, to the best of the knowledge of such
          Authorized Company Representative, there shall not have occurred
          and be continuing any event of default under the Loan Agreement. 
          In Section 4.04 of the Loan Agreement the Company has agreed that
          any such communication by telegram, telex or facsimile
          transmission shall be promptly confirmed by a requisition
          executed by an Authorized Company Representative.

             (d) In paying any requisition under this Section 5.01, the
          Trustee shall be entitled to rely as to the completeness and
          accuracy of all statements in such requisition upon the approval
          of such requisition by an Authorized Company Representative,
          execution thereof to be conclusive evidence of such approval, and
          the Company has by the provisions of the Loan Agreement
          covenanted and agreed to indemnify and save harmless the Trustee
          from any liability incurred in connection with the payment of any
          requisition so executed by an Authorized Company Representative.

             The Trustee shall keep and maintain adequate records
          pertaining to each account within the Construction Fund and all
          disbursements therefrom and, upon receipt of a certificate
          furnished pursuant to Section 3.04 or Section 3.08(b) of the Loan
          Agreement, the Trustee shall, if requested by the Pollution
          Control Corporation or the Company, file an accounting thereof
          with the Pollution Control Corporation and with the Company.

             Section 5.02.    Completion of Facilities; Termination of
          Construction.    Upon receipt by the Trustee of a certificate
          furnished pursuant to Section 3.04 or Section 3.08(b) of the Loan
          Agreement, any balance remaining in the Capital Account or the
          Investment Account maintained within the Construction Fund (other
          than amounts retained by the Trustee at the direction of the
          Company pursuant to Section 3.04 or 3.08 of the Loan Agreement or
          in furtherance of the covenant of the Company contained in clause
          (b) of Section 6.04 of the Loan Agreement) shall (a) be applied
          in whole or in part (i) to the purchase of Bonds in such amounts,
          at such prices, at such times and otherwise as directed by an
          Authorized Company Representative, or (ii) in any other manner
          directed by the Company which, as indicated in an opinion of Bond
          Counsel furnished by the Company to the Pollution Control
          Corporation and the Trustee, will not impair the validity under
          the Act of the Bonds or the exclusion of the interest on the
          Bonds from gross income for federal income tax purposes or (b) in
          the absence of any such purchase or direction within sixty (60)
          days of the receipt by the Trustee of such certificate (or such
          shorter period as the Company shall direct), be deposited by the
          Trustee into the corresponding account maintained within the Bond
          Fund.  From time to time as the proper disposition of the amounts
          retained by the Trustee in the Construction Fund as aforesaid
          shall be determined, to the extent that such amounts are not paid
          out in full by the Trustee pursuant to Section 5.01 or 6.01
          hereof, the Company shall so notify the Trustee and the Pollution
          Control Corporation by one or more certificates as aforesaid and
          any amounts from time to time no longer to be so retained by the
          Trustee shall be applied as aforesaid.  Pending the application
          of any moneys remaining in the Construction Fund following the
          receipt of the aforesaid certificate, such moneys may be invested
          in Investment Securities in the manner permitted by Section 6.01
          hereof, provided that such investments (other than investments
          made with the moneys retained by the Trustee at the direction of
          the Company pursuant to Section 3.04 or 3.08 of the Loan
          Agreement) shall not produce a yield greater than the yield on
          the Bonds unless, as indicated in an opinion of Bond Counsel
          furnished by the Company to the Pollution Control Corporation and
          the Trustee, investments producing a greater yield would not, in
          and of itself, impair the exclusion from gross income for federal
          tax purposes of the interest on the Bonds.

             Section 5.03.    Redemption of All Outstanding Bonds.  Except
          as set forth in Section 5.05 hereof, in the event that all
          Outstanding Bonds are to be redeemed, the Trustee shall, without
          further authorization, deposit into the General Account within
          the Bond Fund all amounts remaining in the Construction Fund
          constituting part of the Trust Estate, with advice to the
          Pollution Control Corporation and the Company of such action,
          such deposit to be made on the date fixed for such redemption.

             Section 5.04.    Acceleration of Bonds.  In the event that the
          principal of the Bonds shall have become due and payable pursuant
          to Section 9.01 hereof, the Trustee shall, without further
          authorization, deposit into the General Account within the Bond
          Fund all amounts constituting part of the Trust Estate remaining
          in the Construction Fund, with advice to the Pollution Control
          Corporation and the Company of such action, such deposit to be
          made on the date fixed for such acceleration.

             Section 5.05.    Refunding of Bonds.  In the event that all
          Outstanding Bonds are paid, redeemed or deemed to have been paid
          within the meaning of Article VIII hereof by reason of the
          application of the proceeds of the sale of any obligations the
          interest on which is exempt from federal income taxation, under
          an indenture other than this Indenture, the Trustee shall,
          without further authorization, withdraw all amounts constituting
          part of the Trust Estate remaining in the Capital Account and the
          Investment Account maintained within the Construction Fund and
          deposit such amounts into corresponding accounts in the
          construction, acquisition or other similar fund created under the
          indenture under which such obligations are issued, with advice to
          the Pollution Control Corporation and the Company of such action,
          such withdrawals and deposits to be made, in accordance with the
          provisions of such indenture, on the date on which such Bonds are
          so paid, redeemed or deemed to have been paid; provided, however,
          that if Bonds shall have been paid, redeemed or deemed to have
          been paid within the meaning of Article VIII hereof by reason of
          the application of the proceeds of the sale of more than one
          issue of obligations the interest on which is excluded from gross
          income for federal income tax purposes under indentures other
          than this Indenture, the Trustee shall, if directed by an
          Authorized Company Representative, withdraw all amounts remaining
          in the Capital Account and the Investment Account maintained
          within the Construction Fund and such amounts shall be allocated
          among, and deposited into, as directed by such Authorized Company
          Representative, corresponding accounts in the construction,
          acquisition or other similar funds created under the indentures
          under which such obligations are issued, with advice to the
          Pollution Control Corporation and the Company of such action,
          such withdrawals and deposits to be made, in accordance with the
          provisions of such indentures, on the date on which all Bonds are
          so paid, redeemed or deemed to have been paid.

             Section 5.06.    Moneys Held in Trust.  All moneys and
          Investment Securities held by the Trustee in the Construction
          Fund, shall be held by the Trustee, in trust and such moneys and
          Investment Securities (other than any moneys or Investment
          Securities held in any subaccount within the Construction Fund
          established in furtherance of the obligations of the Company
          under Section 6.04(b) of the Loan Agreement) while so held or so
          required to be deposited or paid, shall constitute part of the
          Trust Estate and be subject to the lien and security interest
          created hereby in favor of the Trustee for the benefit of the
          Owners from time to time of the Bonds.  The Company shall have no
          right, title or interest in the Construction Fund, except that,
          to the extent not required to be applied in another manner by any
          provision hereof, moneys held by the Trustee in the Construction
          Fund shall be disbursed by the Trustee to the Company upon and to
          the extent of, but solely upon and to the extent of, satisfaction
          of the conditions set forth in Section 5.01(c) hereof.


                                      ARTICLE VI


                                     INVESTMENTS

             Section 6.01.    Investments.  The moneys in the Construction
          Fund and in the Bond Fund shall, at the direction of the Company,
          be invested and reinvested in Investment Securities.  Any
          Investment Securities may be purchased subject to options or
          other rights in third parties to acquire the same.  In addition,
          except with respect to moneys or Investment Securities held
          within the General Account of the Bond Fund, the Trustee shall,
          at the direction of the Company, enter into (i) reverse
          repurchase agreements, option agreements and agreements to lend
          securities with respect to any Investment Securities held by it
          and (ii) transactions for the purchase or sale of financial
          futures contracts in obligations which constitute Investment
          Securities or options on financial futures contracts in
          obligations which constitute Investment Securities.  Subject to
          the further provisions of this Section 6.01, such investments
          shall be made by the Trustee as directed and designated by the
          Company in a certificate of, or telephonic advice promptly
          confirmed by a certificate of, an Authorized Company
          Representative.  As and when any amounts thus invested may be
          needed for disbursements from the Construction Fund or the Bond
          Fund, the Trustee shall request the Company to designate such
          investments to be sold or otherwise converted into cash to the
          credit of such fund as shall be sufficient to meet such
          disbursement requirements and shall then follow any directions in
          respect thereto of an Authorized Company Representative.  As long
          as no Event of Default (as defined in Section 9.01 hereof) shall
          have occurred and be continuing, the Company shall have the right
          to designate the investments to be sold and to otherwise direct
          the Trustee in the sale or conversion to cash of the investments
          made with the moneys in the Construction Fund and in the Bond
          Fund, provided that the Trustee shall be entitled to conclusively
          assume the absence of any such Event of Default unless it has
          notice thereof within the meaning of Section 10.05 hereof.


                                     ARTICLE VII

                                  GENERAL COVENANTS

             Section 7.01.    No General Obligations.  Each and every
          covenant herein made, including all covenants made in the various
          sections of this Article VII, is predicated upon the condition
          that neither the County of Coconino, Arizona nor the State of
          Arizona shall in any event be liable for the payment of the
          principal of, or premium, if any, or interest on the Bonds or for
          the performance of any pledge, mortgage, obligation or agreement
          created by or arising out of this Indenture or the issuance of
          the Bonds, and further that neither the Bonds, nor the premium,
          if any, or interest thereon, nor any such obligation or agreement
          of the Pollution Control Corporation shall be construed to
          constitute an indebtedness of the County of Coconino, Arizona or
          the State of Arizona within the meaning of any constitutional or
          statutory provisions whatsoever.  The Bonds and the interest and
          premium, if any, thereon shall be limited obligations of the
          Pollution Control Corporation payable solely from the Receipts
          and Revenues of the Pollution Control Corporation from the Loan
          Agreement and the other moneys pledged therefor.

             The Pollution Control Corporation shall promptly cause to be
          paid, solely from the sources stated herein, the principal of and
          premium, if any, and interest on every Bond issued under this
          Indenture at the place, on the dates and in the manner provided
          herein and in said Bonds according to the true intent and meaning
          thereof.

             Section 7.02.    Performance of Covenants of the Pollution
          Control Corporation; Representations.  The Pollution Control
          Corporation shall faithfully perform at all times any and all
          covenants, undertakings, stipulations and provisions contained in
          this Indenture, in any and every Bond executed, authenticated and
          delivered hereunder, and in all proceedings pertaining thereto. 
          The Pollution Control Corporation represents that it is duly
          authorized under the Constitution and laws of the State of
          Arizona to issue the Bonds authorized hereby, to enter into the
          Loan Agreement and this Indenture, and to pledge and assign to
          the Trustee the Trust Estate, and that the Bonds in the hands of
          the Owners thereof are and will be valid and binding limited
          obligations of the Pollution Control Corporation.

             Section 7.03.    Maintenance of Rights and Powers; Compliance
          with Laws.  The Pollution Control Corporation shall at all times
          use its best efforts to maintain its corporate existence or
          assure the assumption of its obligations under this Indenture by
          any public body succeeding to its powers under the Act; and it
          shall at all times use its best efforts to comply with all valid
          acts, rules, regulations, orders and directions of any
          legislative, executive, administrative or judicial body known to
          it to be applicable to the Loan Agreement and this Indenture.

             Section 7.04.    Enforcement of Obligations of the Company;
          Amendments.  Upon receipt of written notification from the
          Trustee, the Pollution Control Corporation shall cooperate with
          the Trustee in enforcing the obligation of the Company to pay or
          cause to be paid all the payments and other costs and charges
          payable by the Company under the Loan Agreement.  The Pollution
          Control Corporation shall not enter into any agreement with the
          Company amending the Loan Agreement without the prior written
          consent of the Trustee and compliance with Sections 12.06 and
          12.07 of this Indenture (a revision to Exhibit A to the Loan
          Agreement not being deemed an amendment for purposes of this
          Section).

             Section 7.05.    Further Instruments.  The Pollution Control
          Corporation shall, upon the reasonable request of the Trustee,
          from time to time execute and deliver such further instruments
          and take such further action as may be reasonable and as may be
          required to carry out the purposes of this Indenture; provided,
          however, that no such instruments or actions shall pledge the
          credit or taxing power of the State of Arizona, the County of
          Coconino, the Pollution Control Corporation or any other
          political subdivision of said State.

             Section 7.06.    No Disposition of Trust Estate.  Except as
          permitted by this Indenture, the Pollution Control Corporation
          shall not sell, lease, pledge, assign or otherwise dispose of or
          encumber its interest in the Trust Estate and will promptly pay
          or cause to be discharged or make adequate provision to discharge
          any lien or charge on any part thereof not permitted hereby.

             Section 7.07.    Financing Statements.  The Pollution Control
          Corporation and the Trustee shall cooperate with the Company in
          causing appropriate financing statements and continuation
          statements, naming the Trustee as pledgee of the Receipts and
          Revenues of the Pollution Control Corporation from the Loan
          Agreement and of the other moneys pledged under the Indenture for
          the payment of the principal of and premium, if any, and interest
          on the Bonds, and as pledgee and assignee of the balance of the
          Trust Estate, and the Pollution Control Corporation shall
          cooperate with the Trustee and the Company in causing appropriate
          continuation statements to be duly filed and recorded in the
          appropriate state and county offices as required by the
          provisions of the Uniform Commercial Code or other similar law as
          adopted in the State of Arizona and any other applicable
          jurisdiction, as from time to time amended, in order to perfect
          and maintain the security interests created by this Indenture.

             Section 7.08.    Tax Covenants; Rebate Fund.  (a)  The
          Pollution Control Corporation covenants for the benefit of all
          Owners from time to time of the Bonds that it will not directly
          or indirectly use or (to the extent within its control), permit
          the use of, the proceeds of any of the Bonds or any other funds
          of the Pollution Control Corporation, or take or omit to take any
          other action, if and to the extent that such use, or the taking
          or omission to take such action, would cause any of the Bonds to
          be "arbitrage bonds" within the meaning of Section 148 of the
          Code or otherwise subject to federal income taxation by reason of
          Sections 103 and 141 through 150 of the Code or Section 103 of
          the 1954 Code, as applicable, and any applicable regulations
          promulgated thereunder.  To that end the Pollution Control
          Corporation covenants to comply with all covenants set forth in
          the Tax Agreement, which is hereby incorporated herein by
          reference as though fully set forth herein.

             (b)  The Trustee shall establish and maintain a fund separate
          from any other fund established and maintained hereunder
          designated the "Coconino County, Arizona Pollution Control
          Corporation Pollution Control Revenue Bonds, 1997 Series A
          (Tucson Electric Power Company Navajo Project) Rebate Fund"
          (herein called the "Rebate Fund") in accordance with the
          provisions of the Tax Agreement.  Within the Rebate Fund, the
          Trustee shall maintain such accounts as shall be directed by the
          Company in order for the Pollution Control Corporation and the
          Company to comply with the provisions of the Tax Agreement. 
          Subject to the transfer provisions provided in paragraph (c)
          below, all money at any time deposited in the Rebate Fund shall
          be held by the Trustee in trust, to the extent required to
          satisfy the Rebate Requirement (as defined in the Tax Agreement),
          for payment to the United States of America, and neither the
          Company, the Pollution Control Corporation or the Owners shall
          have any rights in or claim to such moneys.  All amounts
          deposited into or on deposit in the Rebate Fund shall be governed
          by this Section 7.08, by Section 6.04 of the Loan Agreement and
          by the Tax Agreement.  The Trustee shall conclusively be deemed
          to have complied with such provisions if it follows the
          directions of the Company, including supplying all necessary
          information in the manner set forth in the Tax Agreement, and
          shall not be required to take any actions thereunder in the
          absence of written directions from the Company.

             (c)  Upon receipt of the Company's written instructions, the
          Trustee shall remit part or all of the balances in the Rebate
          Fund to the United States of America, as so directed.  In
          addition, if the Company so directs, the Trustee shall deposit
          moneys into or transfer moneys out of the Rebate Fund from or
          into such accounts or funds as directed by the Company's written
          directions.  Any funds remaining in the Rebate Fund after all of
          the Bonds shall have been paid and any Rebate Requirement shall
          have been satisfied, or provision therefor reasonably
          satisfactory to the Trustee shall have been made, shall be
          withdrawn and remitted to the Company.

             (d)  Notwithstanding any provision of this Indenture, the
          obligation to remit the Rebate Requirement to the United States
          of America and to comply with all other requirements of this
          Section 7.08, Section 6.04 of the Loan Agreement and the Tax
          Agreement shall survive the payment of the Bonds and the
          satisfaction and discharge of this Indenture.

             Section 7.09.    Notices of Trustee.  The Trustee shall give
          notice to both the Pollution Control Corporation and the Company
          whenever it is required hereby to give notice to either and,
          additionally, shall furnish to the Pollution Control Corporation
          and the Company copies of any Notice by Mail or Publication given
          by it pursuant to any provision hereof.


                                     ARTICLE VIII

                                      DEFEASANCE

             Section 8.01.    Defeasance.  If the Pollution Control
          Corporation shall pay or cause to be paid to the Owner of any
          Bond secured hereby the principal of and premium, if any, and
          interest due and payable, and thereafter to become due and
          payable, upon such Bond or any portion of such Bond in the
          principal amount of $5,000 or any integral multiple thereof, such
          Bond or portion thereof shall cease to be entitled to any lien,
          benefit or security under this Indenture.  If the Pollution
          Control Corporation shall pay or cause to be paid to the Owners
          of all the Bonds secured hereby the principal of and premium, if
          any, and interest due and payable, and thereafter to become due
          and payable, thereon, and shall pay or cause to be paid all other
          sums payable hereunder including, without limitation, amounts
          payable pursuant to Section 10.04 hereof, then, and in that case,
          the right, title and interest of the Trustee in and to the Trust
          Estate shall thereupon cease, terminate and become void.  In such
          event, the Trustee shall assign, transfer and turn over to the
          Company the Trust Estate, including, without limitation, any
          surplus in the Bond Fund and any balance remaining in any other
          fund created under this Indenture.

             All or any portion of Outstanding Bonds or portions of Bonds
          in principal amounts of $5,000 or any integral multiple thereof,
          shall prior to the maturity or redemption date thereof be deemed
          to have been paid within the meaning and with the effect
          expressed in this Article VIII, and the entire indebtedness of
          the Pollution Control Corporation with respect thereof shall be
          satisfied and discharged, when

                    (a) in the event said Bonds or portions thereof have
             been selected for redemption in accordance with Section 3.02
             hereof, the Trustee shall have given, or the Company shall
             have given to the Trustee in form satisfactory to it
             irrevocable instructions to give, on a date in accordance with
             the provisions of Section 3.03 hereof, notice of redemption of
             such Bonds or portions thereof,

                    (b) there shall have been deposited with the Trustee
             either moneys in an amount which shall be sufficient, or
             Government Obligations which shall not contain provisions
             permitting the redemption thereof at the option of the issuer,
             the principal of and the interest on which, when due, and
             without regard to any reinvestment thereof, will provide
             moneys which, together with the moneys, if any, deposited with
             or held by the Trustee, shall be sufficient, to pay when due
             the principal of and premium, if any, and interest due and to
             become due on said Bonds or portions thereof on and prior to
             the redemption date or maturity date thereof, as the case may
             be, and 

                    (c) in the event said Bonds or portions thereof do not
             mature and are not to be redeemed within the next succeeding
             sixty (60) days, the Company shall have given the Trustee in
             form satisfactory to it irrevocable instructions to give, as
             soon as practicable in the same manner as a notice of
             redemption is given pursuant to Section 3.03 hereof, a notice
             to the Owners of said Bonds or portions thereof that the
             deposit required by clause (b) above has been made with the
             Trustee and that said Bonds or portions thereof are deemed to
             have been paid in accordance with this Article VIII and
             stating the maturity or redemption date upon which moneys are
             to be available for the payment of the principal of and
             premium, if any, and interest on said Bonds or portions
             thereof.

             Neither the Government Obligations nor moneys deposited with
          the Trustee pursuant to this Article VIII nor principal or
          interest payments on any such Government Obligations shall be
          withdrawn or used for any purpose other than, and such Government
          Obligations, moneys and principal or interest payments shall be
          held in trust for, the payment of the principal of and premium,
          if any, and interest on said Bonds or portions thereof; provided,
          that any cash received from such principal or interest payments
          on such Government Obligations deposited with the Trustee, if not
          then needed for such purposes, shall, to the extent practicable,
          be invested in Government Obligations of the type described in
          clause (b) of the preceding paragraph maturing at times and in
          amounts sufficient to pay when due the principal of and premium,
          if any, and interest to become due on said Bonds or portions
          thereof on and prior to such redemption date or maturity date
          thereof, as the case may be, and interest earned from such
          reinvestments shall be paid over to the Company, as received by
          the Trustee, free and clear of any trust, lien or pledge
          hereunder.  If payment of less than all the Bonds is to be
          provided for in the manner and with the effect provided in this
          Article VIII, the Trustee shall select such Bonds or portions of
          Bonds in the manner specified by Section 3.02 hereof for
          selection for redemption of less than all Bonds in the principal
          amount designated to the Trustee by the Company.  At or prior to
          the time of the deposit of any Government Obligations with the
          Trustee pursuant to this Section 8.01, the Company shall provide
          the Trustee with a certificate of an accountant or an accounting
          firm as to the sufficiency of such Government Obligations to pay
          when due the principal of and premium, if any, and interest due
          and to become due as set forth in clause (b) of the preceding
          paragraph.


                                      ARTICLE IX

                                DEFAULTS AND REMEDIES

             Section 9.01.    Events of Default.  Each of the following
          events shall constitute and is referred to in this Indenture as
          an "Event of Default":

                    (a) a failure to pay the principal of or premium, if
             any, on any of the Bonds when the same shall become due and
             payable at maturity, upon redemption or otherwise;

                    (b) a failure to pay an installment of interest on any
             of the Bonds after such interest shall have become due and
             payable for a period of thirty (30) days;

                    (c) a failure by the Pollution Control Corporation to
             observe and perform any covenant, condition, agreement or
             provision (other than as specified in clauses (a) and (b) of
             this Section 9.01) contained in the Bonds or in this Indenture
             on the part of the Pollution Control Corporation to be
             observed or performed, which failure shall continue for a
             period of sixty (60) days after written notice, specifying
             such failure and requesting that it be remedied, shall have
             been given to the Pollution Control Corporation and the
             Company by the Trustee, which may give such notice in its
             discretion and which shall give such notice at the written
             request of Owners of not less than 33% in principal amount of
             the Bonds then Outstanding, unless the Trustee, or the Trustee
             and Owners of a principal amount of Bonds not less than the
             principal amount of Bonds the Owners of which requested that
             such notice be given, as the case may be, shall agree in
             writing to an extension of such period prior to its
             expiration; provided, however, that the Trustee, or the
             Trustee and the Owners of such principal amount of Bonds, as
             the case may be, shall be deemed to have agreed to an
             extension of such period if corrective action is initiated by
             the Pollution Control Corporation, or the Company on behalf of
             the Pollution Control Corporation, within such period and is
             being diligently pursued.

             Upon the occurrence and continuance of any Event of Default
          described in clause (a) and (b) of the preceding paragraph, the
          Trustee may, and at the written request of Owners of not less
          than 33% in principal amount of Bonds then Outstanding shall, by
          written notice to the Pollution Control Corporation and the
          Company, declare the Bonds to be immediately due and payable,
          whereupon they shall, without further action, become and be
          immediately due and payable, anything in this Indenture or in the
          Bonds to the contrary notwithstanding, and the Trustee shall give
          notice thereof by Mail to all Owners of Outstanding Bonds.

             The provisions of the preceding paragraph, however, are
          subject to the condition that if, after the principal of the
          Bonds shall have been so declared to be due and payable, and
          before any judgment or decree for the payment of the moneys due
          shall have been obtained or entered as hereinafter provided, the
          Pollution Control Corporation shall cause to be deposited with
          the Trustee a sum sufficient to pay all matured installments of
          interest upon all Bonds and the principal of any and all Bonds
          which shall have become due otherwise than by reason of such
          declaration (with interest upon such principal and, to the extent
          permissible by law, on overdue installments of interest, at the
          rate per annum borne by the Bonds) and such amounts as shall be
          sufficient to cover reasonable compensation and reimbursement of
          expenses payable to the Trustee and any predecessor Trustee, and
          all Events of Default hereunder other than nonpayment of the
          principal of Bonds which shall have become due by said
          declaration shall have been remedied, then, in every such case,
          such Event of Default shall be deemed waived and such declaration
          and its consequences rescinded and annulled, and the Trustee
          shall promptly give written notice of such waiver, rescission and
          annulment to the Pollution Control Corporation and the Company,
          and, if notice of the acceleration of the Bonds shall have been
          given to the Owners of the Bonds, shall give notice thereof by
          Mail to all Owners of Outstanding Bonds; but no such waiver,
          rescission and annulment shall extend to or affect any subsequent
          Event of Default or impair any right or remedy consequent
          thereon.

             Section 9.02.    Remedies.  Upon the occurrence and
          continuance of any Event of Default, then and in every such case
          the Trustee in its discretion may, and upon the written request
          of Owners of not less than a majority in principal amount of the
          Bonds then Outstanding and receipt of indemnity to its
          satisfaction shall, in its own name and as the Trustee of an
          express trust:

                    (a) by mandamus, or other suit, action or proceeding at
             law or in equity, enforce all rights of the Owners of the
             Bonds, and require the Pollution Control Corporation or the
             Company to carry out any agreements with or for the benefit of
             such Owners and to perform its or their duties under the Act,
             the Loan Agreement and this Indenture;

                    (b) bring suit upon the Bonds; or

                    (c) by action or suit in equity enjoin any acts or
             things which may be unlawful or in violation of the rights of
             the Owners of the Bonds.

             Section 9.03.    Restoration to Former Position.  In the event
          that any proceeding taken by the Trustee to enforce any right
          under this Indenture shall have been discontinued or abandoned
          for any reason, or shall have been determined adversely to the
          Trustee, then the Pollution Control Corporation, the Trustee and
          the Owners shall be restored, subject to any determination in
          such proceeding, to their former positions and rights hereunder,
          respectively, and all rights, remedies and powers of the Trustee
          shall continue as though no such proceeding had been taken.

             Section 9.04.    Owners' Right to Direct Proceedings. 
          Anything in this Indenture to the contrary notwithstanding,
          Owners of a majority in principal amount of the Bonds then
          Outstanding hereunder shall have the right, by an instrument in
          writing executed and delivered to the Trustee, to direct the
          time, method and place of conducting all remedial proceedings
          available to the Trustee under this Indenture or exercising any
          trust or power conferred on the Trustee by this Indenture;
          provided, however, that such direction shall not be otherwise
          than in accordance with law and the provisions of this Indenture
          and that the Trustee shall have the right (but not the
          obligation) to decline to follow any such direction if the
          Trustee, being advised by counsel, shall determine that the
          action or proceeding so directed may not lawfully be taken, or if
          the Trustee in good faith shall determine that the action or
          proceedings so directed would involve the Trustee in personal
          liability or if the Trustee in good faith shall so determine that
          the actions or forbearances specified in or pursuant to such
          direction would be unduly prejudicial to the interests of Owners
          not joining in the giving of said direction, it being understood
          that the Trustee shall have no duty to ascertain whether or not
          such actions or forbearances are unduly prejudicial to such
          Owners.

             Section 9.05.    Limitation on Owners' Right to Institute
          Proceedings.  No Owner of Bonds shall have any right to institute
          any suit, action or proceeding in equity or at law for the
          execution of any trust or power hereunder, or any other remedy
          hereunder or on said Bonds, unless such Owner previously shall
          have given to the Trustee written notice of an Event of Default
          as hereinabove provided and unless the Owners of not less than a
          majority in principal amount of the Bonds then Outstanding shall
          have made written request of the Trustee so to do, after the
          right to institute said suit, action or proceeding shall have
          accrued, and shall have afforded the Trustee a reasonable
          opportunity to proceed to institute the same in either its or
          their name, and unless there also shall have been offered to the
          Trustee security and indemnity satisfactory to it against the
          costs, expenses and liabilities to be incurred therein or
          thereby, and the Trustee shall not have complied with such
          request within a reasonable time; and such notification, request
          and offer of indemnity are hereby declared in every such case, at
          the option of the Trustee, to be conditions precedent to the
          institution of said suit, action or proceeding; it being
          understood and intended that no one or more of the Owners of the
          Bonds shall have any right in any manner whatever by his or their
          action to affect, disturb or prejudice the security of this
          Indenture, or to enforce any right hereunder or under the Bonds,
          except in the manner herein provided, and that all suits, actions
          and proceedings at law or in equity shall be instituted, had and
          maintained in the manner herein provided and for the equal
          benefit of all Owners of the Bonds.

             Section 9.06.    No Impairment of Right to Enforce Payment. 
          Notwithstanding any other provision in this Indenture, the right
          of any Owner of a Bond to receive payment of the principal of and
          premium, if any, and interest on such Bond, on or after the
          respective due dates expressed therein, or to institute suit for
          the enforcement of any such payment on or after such respective
          dates, shall not be impaired or affected without the consent of
          such Owner.

             Section 9.07.    Proceedings by Trustee without Possession of
          Bonds.  All rights of action under this Indenture or under any of
          the Bonds secured hereby which are enforceable by the Trustee may
          be enforced by it without the possession of any of the Bonds, or
          the production thereof on the trial or other proceedings relative
          thereto, and any such suit, action or proceeding instituted by
          the Trustee shall be brought in its name for the equal and
          ratable benefit of the Owners of the Bonds, subject to the
          provisions of this Indenture.

             Section 9.08.    No Remedy Exclusive.  No remedy herein
          conferred upon or reserved to the Trustee or to the Owners of the
          Bonds is intended to be exclusive of any other remedy or
          remedies, and each and every such remedy shall be cumulative, and
          shall be in addition to every other remedy given hereunder or
          under the Loan Agreement, now or hereafter existing at law or in
          equity or by statute.

             Section 9.09.    No Waiver of Remedies.  No delay or omission
          of the Trustee or of any Owner of a Bond to exercise any right or
          power accruing upon any default shall impair any such right or
          power or shall be construed to be a waiver of any such default,
          or an acquiescence therein; and every power and remedy given by
          this Article IX to the Trustee and to the Owners of the Bonds,
          respectively, may be exercised from time to time and as often as
          may be deemed expedient.

             Section 9.10.    Application of Moneys.  Any moneys received
          by the Trustee, by any receiver or by any Owner of a Bond
          pursuant to any right given or action taken under the provisions
          of this Article IX, after payment of the costs and expenses of
          the proceedings resulting in the collection of such moneys and of
          all amounts due to the Trustee and any predecessor Trustee under
          Section 10.04 hereof, shall be deposited in the Bond Fund and all
          moneys so deposited in the Bond Fund during the continuance of an
          Event of Default (other than moneys for the payment of Bonds
          which had matured or otherwise become payable prior to such Event
          of Default or for the payment of interest due prior to such Event
          of Default) shall be applied as follows:

                    (a) Unless the principal of all the Bonds shall have
             become due and payable, all such moneys shall be applied (i)
             first, to the payment to the persons entitled thereto of all
             installments of interest then due on the Bonds, with interest
             on overdue installments, if lawful, at the rate per annum
             borne by the Bonds, in the order of maturity of the
             installments of such interest and, if the amount available
             shall not be sufficient to pay in full any particular
             installment of interest, then to the payment ratably,
             according to the amounts due on such installment, and (ii)
             second, to the payment to the persons entitled thereto of the
             unpaid principal of any of the Bonds which shall have become
             due (other than Bonds called for redemption for the payment of
             which money is held pursuant to the provisions of this
             Indenture), with interest on such Bonds at their rate from the
             respective dates upon which they became due and, if the amount
             available shall not be sufficient to pay in full Bonds due on
             any particular date, together with such interest, then to the
             payment ratably, according to the amount of principal and
             interest due on such date, in each case to the persons
             entitled thereto, without any discrimination or privilege.

                    (b) If the principal of all the Bonds shall have become
             due and payable, all such moneys shall be applied to the
             payment of the principal and interest then due and unpaid upon
             the Bonds, with interest on overdue interest and principal, as
             aforesaid, without preference or priority of principal over
             interest or of interest over principal, or of any installment
             of interest over any other installment of interest, or of any
             Bond over any other Bond, ratably, according to the amounts
             due respectively for principal and interest, to the persons
             entitled thereto without any discrimination or privilege.

                    (c) If the principal of all the Bonds shall have become
             due and payable, and if acceleration of the maturity of the
             Bonds by reason of such Event of Default shall thereafter have
             been rescinded and annulled under the provisions of this
             Article IX, then, subject to the provisions of clause (b) of
             this Section 9.10 which shall be applicable in the event that
             the principal of all the Bonds shall later become due and
             payable, the moneys shall be applied in accordance with the
             provisions of clause (a) of this Section 9.10.

             Section 9.11.    Severability of Remedies.  It is the purpose
          and intention of this Article IX to provide rights and remedies
          to the Trustee and the Owners which may be lawfully granted under
          the provisions of the Act, but should any right or remedy herein
          granted be held to be unlawful, the Trustee and the Owners shall
          be entitled, as above set forth, to every other right and remedy
          provided in this Indenture and by law.


                                      ARTICLE X

                TRUSTEE; PAYING AGENT AND CO-PAYING AGENTS; REGISTRAR

             Section 10.01.   Acceptance of Trusts.  The Trustee hereby
          accepts and agrees to execute the trusts hereby created, but only
          upon the additional terms set forth in this Article X, to all of
          which the Pollution Control Corporation agrees and the respective
          Owners agree by their acceptance of delivery of any of the Bonds.

             Section 10.02.   No Responsibility for Recitals.  The
          recitals, statements and representations contained in this
          Indenture or in the Bonds, save only the Trustee's authentication
          upon the Bonds, are not made by the Trustee, and the Trustee does
          not assume, and shall not have, any responsibility or obligation
          for the correctness of any thereof.  The Trustee makes no
          representation as to the validity or sufficiency of this
          Indenture or the Bonds.

             Section 10.03.   Limitations on Liability.  The Trustee may
          execute any of the trusts or powers hereof and perform the duties
          required of it hereunder by or through attorneys, agents,
          receivers, or employees, and shall be entitled to advice of
          counsel concerning all matters of trust and its duty hereunder,
          and the Trustee shall not be answerable for the default or
          misconduct of any such attorney, agent, receiver, or employee
          selected by it with reasonable care.  The Trustee shall not be
          answerable for the exercise of any discretion or power under this
          Indenture or for anything whatsoever in connection with the trust
          created hereby, except only for its own negligence or bad faith.

             Anything in this Indenture to the contrary notwithstanding,
          the Trustee shall in no event be required to expend or risk its
          own funds or otherwise incur personal financial liability in the
          performance of any of its duties or in the exercise of any of its
          rights or powers, if there shall be reasonable grounds for
          believing that the repayment of such funds or adequate indemnity
          against such liability is not reasonably assured to it.

             Section 10.04.   Compensation, Expenses and Advances.  The
          Trustee, the Paying Agent and any Co-Paying Agent and the
          Registrar under this Indenture shall be entitled to reasonable
          compensation for their services rendered hereunder (not limited
          by any provision of law regarding the compensation of the trustee
          of an express trust) and to reimbursement for their actual
          out-of-pocket expenses (including counsel fees) reasonably
          incurred in connection therewith except as a result of their
          negligence or bad faith, including, without limitation,
          compensation for any services rendered, and reimbursement for any
          expenses incurred, at and subsequent to the time the Bonds are
          deemed to have been paid in accordance with Article VIII hereof. 
          If the Pollution Control Corporation shall fail to perform any of
          the covenants or agreements contained in this Indenture, other
          than the covenants or agreements in respect of the payment of the
          principal of and premium, if any, and interest on the Bonds, the
          Trustee may, in its uncontrolled discretion and without notice to
          the Owners of the Bonds, at any time and from time to time, make
          advances to effect performance of the same on behalf of the
          Pollution Control Corporation, but the Trustee shall be under no
          obligation so to do; and any and all such advances may bear
          interest at a rate per annum not exceeding the base rate then in
          effect for 90-day commercial loans by the Trustee or a commercial
          banking affiliate of the Trustee designated as such by the
          Trustee in the city in which is located the Principal Office of
          the Trustee (or such affiliate, as the case may be) to borrowers
          of the highest credit standing; but no such advance shall operate
          to relieve the Pollution Control Corporation from any default
          hereunder.  In Section 5.03 of the Loan Agreement, the Company
          has agreed that it will pay to the Trustee (including any
          predecessor Trustee), the Paying Agent and any Co-Paying Agent
          and the Registrar such compensation and reimbursement of expenses
          and advances, but the Company may, without creating a default
          hereunder, contest in good faith the reasonableness of any such
          services, expenses and advances.  If the Company shall have
          failed to make any payment to the Trustee or any predecessor
          Trustee under Section 5.03 of the Loan Agreement and such failure
          shall have resulted in an Event of Default under the Loan
          Agreement, the Trustee, and any predecessor Trustee, shall have,
          in addition to any other rights hereunder, a claim, prior to the
          claim of the Owners, for the payment of its compensation and the
          reimbursement of its expenses and any advances made by it, as
          provided in this Section 10.04, upon the moneys and obligations
          in the Bond Fund; provided, however, that neither the Trustee nor
          any predecessor Trustee shall have any such claim upon moneys or
          obligations deposited with or paid to the Trustee for the
          redemption or payment of Bonds which are deemed to have been paid
          in accordance with Article VIII hereof.

             In Section 5.04 of the Loan Agreement, the Company has agreed
          to indemnify the Trustee and any predecessor Trustee to the
          extent provided therein.

             Section 10.05.   Notice of Events of Default.  The Trustee
          shall not be required to take notice, or be deemed to have
          notice, of any default or Event of Default under this Indenture
          other than an Event of Default under clause (a) or (b) of the
          first paragraph of Section 9.01 hereof, unless an officer
          assigned by the Trustee to administer its corporate trust
          business has been specifically notified in writing of such
          default or Event of Default by Owners of at least 33% in
          principal amount of the Bonds then Outstanding.  The Trustee may,
          however, at any time, in its discretion, require of the Pollution
          Control Corporation and the Company full information and advice
          as to the performance of any of the covenants, conditions and
          agreements contained herein.

             Section 10.06.   Action by Trustee.  The Trustee shall be
          under no obligation to take any action in respect of any default
          or Event of Default hereunder or toward the execution or
          enforcement of any of the trusts hereby created, or to institute,
          appear in or defend any suit or other proceeding in connection
          therewith, unless requested in writing so to do by Owners of at
          least a majority in principal amount of the Bonds then
          Outstanding, and, if in its opinion such action may tend to
          involve it in expense or liability, unless furnished, from time
          to time as often as it may require, with security and indemnity
          satisfactory to it.  The foregoing provisions are intended only
          for the protection of the Trustee, and shall not affect any
          discretion or power given by any provisions of this Indenture to
          the Trustee to take action in respect of any default or Event of
          Default without such notice or request from the Owners of the
          Bonds, or without such security or indemnity.

             Section 10.07.   Good Faith Reliance.  The Trustee shall be
          protected and shall incur no liability in acting or proceeding in
          good faith upon any resolution, notice, telegram, telex,
          facsimile transmission, request, consent, waiver, certificate,
          statement, affidavit, voucher, bond, requisition or other paper
          or document which it shall in good faith believe to be genuine
          and to have been passed or signed by the proper board, body or
          person or to have been prepared and furnished pursuant to any of
          the provisions of this Indenture or the Loan Agreement, or upon
          the written opinion of any attorney, engineer, accountant or
          other expert believed by the Trustee to be qualified in relation
          to the subject matter, and the Trustee shall be under no duty to
          make any investigation or inquiry as to any statements contained
          or matters referred to in any such instrument, but may accept and
          rely upon the same as conclusive evidence of the truth and
          accuracy of such statements.  Neither the Trustee, the Paying
          Agent, any Co-Paying Agent nor the Registrar shall be bound to
          recognize any person as an Owner of a Bond or to take any action
          at his request unless the ownership of such Bond is proved as
          contemplated in Section 11.01 hereof.

             Section 10.08.   Dealings in Bonds and with the Pollution
          Control Corporation and the Company.  The Trustee, the Paying
          Agent, any Co-Paying Agent or the Registrar, in its individual or
          any other capacity, may in good faith buy, sell, own, hold and
          deal in any of the Bonds issued hereunder, and may join in any
          action which any Owner of a Bond may be entitled to take with
          like effect as if it did not act in any capacity hereunder.  The
          Trustee, the Paying Agent, any Co-Paying Agent or the Registrar,
          in its individual or any other capacity, either as principal or
          agent, may also engage in or be interested in any financial or
          other transaction with the Pollution Control Corporation or the
          Company, and may act as depositary, trustee, or agent for any
          committee or body of Owners of Bonds secured hereby or other
          obligations of the Pollution Control Corporation as freely as if
          it did not act in any capacity hereunder.

             Section 10.09.   Allowance of Interest.  The Trustee may, but
          shall not be obligated to, allow and credit interest upon any
          moneys which it may at any time receive under any of the
          provisions of this Indenture, at such rate, if any, as it
          customarily allows upon similar funds of similar size and under
          similar conditions.  All interest allowed on any such moneys
          shall be credited as provided in Articles IV and V with respect
          to interest on investments.

             Section 10.10.   Construction of Indenture.  The Trustee may
          construe any of the provisions of this Indenture insofar as the
          same may appear to be ambiguous or inconsistent with any other
          provision hereof, and any construction of any such provisions
          hereof by the Trustee in good faith shall be binding upon the
          Owners of the Bonds.

             Section 10.11.   Resignation of Trustee.  The Trustee may
          resign and be discharged of the trusts created by this Indenture
          by executing an instrument in writing resigning such trust and
          specifying the date when such resignation shall take effect, and
          filing the same with the President of the Pollution Control
          Corporation and with the Company, not less than forty-five (45)
          days before the date specified in such instrument when such
          resignation shall take effect, and by giving notice of such
          resignation by Mail to all Owners of Bonds.  Such resignation
          shall take effect on the later to occur of (i) the day specified
          in such instrument and notice, unless previously a successor
          Trustee shall have been appointed as hereinafter provided, in
          which event such resignation shall take effect immediately upon
          the appointment of such successor Trustee and (ii) the
          appointment of a successor Trustee.

             So long as no event which is, or after notice or lapse of
          time, or both, would become, an Event of Default shall have
          occurred and be continuing, if the Pollution Control Corporation
          shall have delivered to the Trustee (i) an instrument appointing
          a successor Trustee, effective as of a date specified therein and
          (ii) an instrument of acceptance of such appointment, effective
          as of such date, by such successor Trustee in accordance with
          Section 10.16, the Trustee shall be deemed to have resigned as
          contemplated in this Section, the successor Trustee shall be
          deemed to have been appointed pursuant to subsection (b) of
          Section 10.13 and such appointment shall be deemed to have been
          accepted as contemplated in Section 10.16, all as of such date,
          and all other provisions of this Article X shall be applicable to
          such resignation, appointment and acceptance except to the extent
          inconsistent with this paragraph.  The Pollution Control
          Corporation shall deliver any such instrument of appointment at
          the direction of the Company.

             Section 10.12.   Removal of Trustee.  The Trustee may be
          removed at any time by filing with the Trustee so removed, and
          with the Pollution Control Corporation and the Company, an
          instrument or instruments in writing, appointing a successor, or
          an instrument or instruments in writing, consenting to the
          appointment by the Pollution Control Corporation (at the
          direction of the Company) of a successor and accompanied by an
          instrument of appointment by the Pollution Control Corporation
          (at the direction of the Company) of such successor, and in any
          event executed by Owners of not less than a majority in principal
          amount of the Bonds then Outstanding, such filing to be made by
          any Owner of a Bond or his duly authorized attorney.

             Section 10.13.   Appointment of Successor Trustee.  (a) In
          case at any time the Trustee shall be removed, or be dissolved,
          or if its property or affairs shall be taken under the control of
          any state or federal court or administrative body because of
          insolvency or bankruptcy, or for any other reason, then a vacancy
          shall forthwith and ipso facto exist and a successor may be
          appointed, and in case at any time the Trustee shall resign or be
          deemed to have resigned, then a successor may be appointed, by
          filing with the Pollution Control Corporation and the Company an
          instrument in writing appointing such successor Trustee executed
          by Owners of not less than a majority in principal amount of
          Bonds then Outstanding.  Copies of such instrument shall be
          promptly delivered by the Pollution Control Corporation to the
          predecessor Trustee, to the Trustee so appointed and the Company.

             (b)  Until a successor Trustee shall be appointed by the
          Owners of the Bonds as herein authorized, the Pollution Control
          Corporation, shall appoint a successor Trustee as directed by the
          Company.  After any appointment by the Pollution Control
          Corporation, it shall cause notice of such appointment to be
          given by Mail to all Owners of Bonds.  Any new Trustee so
          appointed by the Pollution Control Corporation shall immediately
          and without further act be superseded by a Trustee appointed by
          the Owners of the Bonds in the manner above provided.


             (c)  No resignation or removal of the Trustee and no
          appointment of a successor Trustee pursuant to this Article shall
          become effective until the acceptance of appointment by the
          successor Trustee.

             Section 10.14.   Qualifications of Successor Trustee.  Every
          successor Trustee (a) shall be a bank or trust company duly
          organized under the laws of the United States or any state or
          territory thereof authorized by law to perform all the duties
          imposed upon it by this Indenture and (b) shall have (or the
          parent holding company of which shall have) a combined capital
          stock, surplus and undivided profits of at least $100,000,000 if
          there can be located, with reasonable effort, such an institution
          willing and able to accept the trust on reasonable and customary
          terms.

             Section 10.15.   Judicial Appointment of Successor Trustee. 
          In case at any time the Trustee shall resign and no appointment
          of a successor Trustee shall be made pursuant to the foregoing
          provisions of this Article X prior to the date specified in the
          notice of resignation as the date when such resignation is to
          take effect, the retiring Trustee may forthwith apply to a court
          of competent jurisdiction for the appointment of a successor
          Trustee.  If no appointment of a successor Trustee shall be made
          pursuant to the foregoing provisions of this Article X within six
          months after a vacancy shall have occurred in the office of
          Trustee, any Owner of a Bond may apply to any court of competent
          jurisdiction to appoint a successor Trustee.  Such court may
          thereupon, after such notice, if any, as it may deem proper and
          prescribe, appoint a successor Trustee.

             Section 10.16.   Acceptance of Trusts by Successor Trustee. 
          Any successor Trustee appointed hereunder shall execute,
          acknowledge and deliver to the Pollution Control Corporation an
          instrument accepting such appointment hereunder, and thereupon
          such successor Trustee, without any further act, deed or
          conveyance, shall become duly vested with all the estates,
          property, rights, powers, trusts, duties and obligations of its
          predecessor in the trust hereunder, with like effect as if
          originally named Trustee herein.  Upon request of such Trustee,
          such predecessor Trustee and the Pollution Control Corporation
          shall execute and deliver an instrument transferring to such
          successor Trustee all the estates, property, rights, powers and
          trusts hereunder of such predecessor Trustee and, subject to the
          provisions of Section 10.04 hereof, such predecessor Trustee
          shall pay over to the successor Trustee all moneys and other
          assets at the time held by it hereunder.

             Section 10.17.   Successor by Merger or Consolidation.  Any
          corporation or association into which any Trustee hereunder may
          be merged or converted or with which it may be consolidated, or
          any corporation or association resulting from any merger or
          consolidation to which any Trustee hereunder shall be a party or
          any corporation or association succeeding to the corporate trust
          business of the Trustee, shall be the successor Trustee under
          this Indenture, without the execution or filing of any paper or
          any further act on the part of the parties hereto, anything in
          this Indenture to the contrary notwithstanding.

             If, at the time any such successor to the Trustee shall
          succeed to the trusts created by this Indenture, any of the Bonds
          shall have been authenticated but not delivered, such successor
          Trustee may adopt the certificate of authentication of any
          predecessor Trustee and deliver such Bonds so authenticated; and
          if at that time, any of the Bonds shall not have been
          authenticated, such successor Trustee may authenticate such Bonds
          either in the name of any such predecessor hereunder or in the
          name of such successor; and, in all such cases, such certificate
          of authentication shall have the full force which it is anywhere
          in the Bonds or in this Indenture provided that the certificate
          of authentication of the Trustee shall have; provided, however,
          that the right to adopt the certificate of authentication of any
          predecessor Trustee or to authenticate Bonds in the name of any
          predecessor Trustee shall apply only to its successor or
          successors by merger, conversion or consolidation.

             Section 10.18.   Standard of Care.  Notwithstanding any other
          provisions of this Article X, the Trustee shall, during the
          existence of an Event of Default of which the Trustee has actual
          notice, exercise such of the rights and powers vested in it by
          this Indenture and use the same degree of skill and care in their
          exercise as a prudent man would use and exercise under the
          circumstances in the conduct of his own affairs.

             Section 10.19.   Notice to Owners of Bonds of Event of
          Default.  If an Event of Default occurs of which the Trustee by
          Section 10.05 hereof is required to take notice and deemed to
          have notice, or any other Event of Default occurs of which the
          Trustee has been specifically notified in accordance with Section
          10.05 hereof, and any such Event of Default shall continue for at
          least two days after the Trustee acquires actual notice thereof,
          unless the Trustee shall have theretofore given a notice of
          acceleration pursuant to Section 9.01 hereof, the Trustee shall
          give Notice by Mail to all Owners of Outstanding Bonds.

             Section 10.20.   Intervention in Litigation of the Pollution
          Control Corporation.  In any judicial proceeding to which the
          Pollution Control Corporation is a party and which in the opinion
          of the Trustee and its counsel has a substantial bearing on the
          interests of the Owners of Bonds, the Trustee may intervene on
          behalf of the Owners of the Bonds and shall, upon receipt of
          indemnity satisfactory to it, do so if requested in writing by
          Owners of at least a majority in principal amount of the Bonds
          then Outstanding if permitted by the court having jurisdiction in
          the premises.

             Section 10.21.   Paying Agent; Co-Paying Agents.  The
          Pollution Control Corporation shall, with the approval of the
          Company, appoint the Paying Agent for the Bonds and may at any
          time or from time to time, with the approval of the Company,
          appoint one or more Co-Paying Agents for the Bonds, subject to
          the conditions set forth in Section 10.22 hereof.  The Paying
          Agent and each Co-Paying Agent shall designate to the Trustee its
          Principal Office and signify its acceptance of the duties and
          obligations imposed upon it hereunder by a written instrument of
          acceptance delivered to the Pollution Control Corporation and the
          Trustee in which such Paying Agent or Co-Paying Agent will agree,
          particularly:

                    (a) to hold all sums held by it for the payment of the
             principal of and premium, if any, or interest on Bonds in
             trust for the benefit of the Owners of the Bonds until such
             sums shall be paid to such Owners or otherwise disposed of as
             herein provided;

                    (b) to keep such books and records as shall be
             consistent with prudent industry practice, to make such books
             and records available for inspection by the Pollution Control
             Corporation, the Trustee and the Company at all reasonable
             times and, in the case of a Co-Paying Agent, to promptly
             furnish copies of such books and records to the Paying Agent;
             and

                    (c) in the case of a Co-Paying Agent, upon the request
             of the Paying Agent, to forthwith deliver to the Paying Agent
             all sums so held in trust by such Co-Paying Agent.

             The Pollution Control Corporation shall cooperate with the
          Trustee and the Company to cause the necessary arrangements to be
          made and to be thereafter continued whereby funds derived from
          the sources specified in Sections 4.03 and 4.04 hereof will be
          made available to the Paying Agent and each Co-Paying Agent for
          the payment when due of the principal of, premium, if any, and
          interest on the Bonds.

             Section 10.22.   Qualifications of Paying Agent and Co-Paying
          Agents; Resignation; Removal.  The Paying Agent and any Co-Paying
          Agent shall be a corporation or association duly organized under
          the laws of the United States of America or any state or
          territory thereof, having a combined capital stock, surplus and
          undivided profits of at least $15,000,000 and authorized by law
          to perform all the duties imposed upon it by this Indenture.  The
          Paying Agent and any Co-Paying Agent may at any time resign and
          be discharged of the duties and obligations created by this
          Indenture by giving at least sixty (60) days' notice to the
          Pollution Control Corporation, the Company and the Trustee.  The
          Paying Agent and any Co-Paying Agent may be removed at any time,
          at the direction of the Company, by an instrument, signed by the
          Pollution Control Corporation, filed with the Paying Agent or
          such Co-Paying Agent, as the case may be, and with the Trustee.

             In the event of the resignation or removal of the Paying Agent
          or any Co-Paying Agent, the Paying Agent or such Co-Paying Agent,
          as the case may be, shall pay over, assign and deliver any moneys
          held by it in such capacity to its successor or, if there be no
          successor, to the Trustee.

             In the event that the Pollution Control Corporation shall fail
          to appoint a Paying Agent hereunder, or in the event that the
          Paying Agent shall resign or be removed, or be dissolved, or if
          the property or affairs of the Paying Agent shall be taken under
          the control of any state or federal court or administrative body
          because of bankruptcy or insolvency, or for any other reason, and
          the Pollution Control Corporation shall not have appointed its
          successor as Paying Agent, the Trustee shall ipso facto be deemed
          to be the Paying Agent for all purposes of this Indenture until
          the appointment by the Pollution Control Corporation of the
          Paying Agent or successor Paying Agent, as the case may be.

             Upon the appointment of a successor Paying Agent, the Trustee
          shall give notice thereof by Mail to all Owners of Bonds.

             Section 10.23.   Registrar.  The Pollution Control Corporation
          shall, with the approval of the Company, appoint the Registrar
          for the Bonds, subject to the conditions set forth in Section
          10.24 hereof.  The Registrar shall designate to the Trustee its
          Principal Office and signify its acceptance of the duties imposed
          upon it hereunder by a written instrument of acceptance delivered
          to the Pollution Control Corporation and the Trustee in which
          such Registrar will agree, particularly, to keep such books and
          records as shall be consistent with prudent industry practice and
          to make such books and records available for inspection by the
          Pollution Control Corporation, the Trustee and the Company at all
          reasonable times.

             The Pollution Control Corporation shall cooperate with the
          Trustee and the Company to cause the necessary arrangements to be
          made and to be thereafter continued whereby Bonds, executed by
          the Pollution Control Corporation and authenticated by the
          Trustee, shall be made available for exchange, registration and
          registration of transfer at the Principal Office of the
          Registrar.  The Pollution Control Corporation shall cooperate
          with the Trustee, the Registrar and the Company to cause the
          necessary arrangements to be made and thereafter continued
          whereby the Paying Agent and any Co-Paying Agent shall be
          furnished such records and other information, at such times, as
          shall be required to enable the Paying Agent and such Co-Paying
          Agent to perform the duties and obligations imposed upon them
          hereunder.

             Section 10.24.   Qualifications of Registrar; Resignation;
          Removal.  The Registrar shall be a corporation or association
          duly organized under the laws of the United States of America or
          any state or territory thereof, having a combined capital stock,
          surplus and undivided profits of at least $15,000,000 and
          authorized by law to perform all the duties imposed upon it by
          this Indenture.  The Registrar may at any time resign and be
          discharged of the duties and obligations created by this
          Indenture by giving at least sixty (60) days' notice to the
          Pollution Control Corporation, the Trustee and the Company.  The
          Registrar may be removed at any time, at the direction of the
          Company, by an instrument signed by the Pollution Control
          Corporation filed with the Registrar and the Trustee.

             In the event of the resignation or removal of the Registrar,
          the Registrar shall deliver any Bonds held by it in such capacity
          to its successor or, if there be no successor, to the Trustee.

             In the event that the Pollution Control Corporation shall fail
          to appoint a Registrar hereunder, or in the event that the
          Registrar shall resign or be removed, or be dissolved, or if the
          property or affairs of the Registrar shall be taken under the
          control of any state or federal court or administrative body
          because of bankruptcy or insolvency, or for any other reason, and
          the Pollution Control Corporation shall not have appointed its
          successor as Registrar, the Trustee shall ipso facto be deemed to
          be the Registrar for all purposes of this Indenture until the
          appointment by the Pollution Control Corporation of the Registrar
          or successor Registrar, as the case may be.

             Upon the appointment of a successor Registrar, the Trustee
          shall give notice thereof by Mail to all Owners of Bonds.

             Section 10.25.   Several Capacities.  Anything herein to the
          contrary notwithstanding, the same entity may serve hereunder as
          the Trustee, the Paying Agent or a Co-Paying Agent and the
          Registrar, and in any combination of such capacities to the
          extent permitted by law.


                                      ARTICLE XI

                   EXECUTION OF INSTRUMENTS BY OWNERS OF BONDS AND
                             PROOF OF OWNERSHIP OF BONDS

             Section 11.01.   Execution of Instruments; Proof of Ownership. 
          Any request, direction, consent or other instrument in writing,
          whether or not required or permitted by this Indenture to be
          signed or executed by Owners of the Bonds, may be in any number
          of concurrent instruments of similar tenor and may be signed or
          executed by Owners of the Bonds or by an agent appointed by an
          instrument in writing.  Proof of the execution of any such
          instrument and of the ownership of Bonds shall be sufficient for
          any purpose of this Indenture and shall be conclusive in favor of
          the Trustee with regard to any action taken by it under such
          instrument if made in the following manner:

                    (a) The fact and date of the execution by any person of
             any such instrument may be proved by the certificate of any
             officer in any jurisdiction who, by the laws thereof, has
             power to take acknowledgments within such jurisdiction, to the
             effect that the person signing such instrument acknowledged
             before him the execution thereof, or by an affidavit of a
             witness to such execution.

                    (b) The ownership or former ownership of Bonds shall be
             proved by the registration books kept under the provisions of
             Section 2.08 hereof.

             Nothing contained in this Article XI shall be construed as
          limiting the Trustee to such proof, it being intended that the
          Trustee may accept any other evidence of matters herein stated
          which it may deem sufficient.  Any request or consent of any
          Owner of a Bond shall bind every future Owner of the same Bond or
          any Bond or Bonds issued in lieu thereof in respect of anything
          done by the Trustee or the Pollution Control Corporation in
          pursuance of such request or consent.


                                     ARTICLE XII

                MODIFICATION OF THIS INDENTURE AND THE LOAN AGREEMENT

             Section 12.01.   Limitations.  Neither this Indenture nor the
          Loan Agreement shall be modified or amended in any respect
          subsequent to the original issuance of the Bonds except as
          provided in and in accordance with and subject to the provisions
          of this Article XII and Section 7.04 hereof.

             The Trustee may, but shall not be obligated to, enter into any
          Supplemental Indenture which affects the Trustee's own rights,
          duties or immunities under this Indenture or otherwise.

             Section 12.02.   Supplemental Indentures without Owner
          Consent.  The Pollution Control Corporation and the Trustee may,
          from time to time and at any time, without the consent of or
          notice to the Owners of the Bonds, enter into Supplemental
          Indentures as follows:

                    (a) to cure any formal defect, omission, inconsistency
             or ambiguity in this Indenture, provided, however, that such
             cure shall not materially and adversely affect the interests
             of the Owners of the Bonds;

                    (b) to grant to or confer or impose upon the Trustee
             for the benefit of the Owners of the Bonds any additional
             rights, remedies, powers, authority, security, liabilities or
             duties which may lawfully be granted, conferred or imposed;

                    (c) to add to the covenants and agreements of, and
             limitations and restrictions upon, the Pollution Control
             Corporation in this Indenture other covenants, agreements,
             limitations and restrictions to be observed by the Pollution
             Control Corporation;

                    (d) to confirm, as further assurance, any pledge under,
             and the subjection to any claim, lien or pledge created or to
             be created by, this Indenture, of the Receipts and Revenues of
             the Pollution Control Corporation from the Loan Agreement or
             of any other moneys, securities or funds;

                    (e) to authorize a different denomination or
             denominations of the Bonds and to make correlative amendments
             and modifications to this Indenture regarding exchange ability
             of Bonds of different denominations, redemptions of portions
             of Bonds of particular denominations and similar amendments
             and modifications of a technical nature;

                    (f) to modify, alter, supplement or amend this
             Indenture in such manner as shall permit the qualification
             hereof under the Trust Indenture Act of 1939, as from time to
             time amended;

                    (g) to modify, alter, supplement or amend this
             Indenture in such manner as shall be necessary, desirable or
             appropriate in order to provide for or eliminate the
             registration and registration of transfer of the Bonds through
             a book-entry or similar method, whether or not the Bonds are
             evidenced by certificates;

                    (h) to modify, alter, amend or supplement this
             Indenture in any other respect which is not materially adverse
             to the Owners and which does not involve a change described in
             clause (i), (ii), (iii) or (iv) of Section 12.03(a) hereof;
             and

                    (i) to provide any additional procedures, covenants or
             agreements necessary or desirable to maintain the tax-exempt
             status of interest on the Bonds.

             Before the Pollution Control Corporation and the Trustee shall
          enter into any Supplemental Indenture pursuant to this Section
          12.02, there shall have been delivered to the Trustee an opinion
          of Bond Counsel stating that such Supplemental Indenture is
          authorized or permitted by this Indenture and the Act, complies
          with their respective terms, will, upon the execution and
          delivery thereof, be valid and binding upon the Pollution Control
          Corporation in accordance with its terms and will not, in and of
          itself, adversely affect the exclusion from gross income for
          federal tax purposes of the interest on the Bonds.

             Section 12.03.   Supplemental Indentures with Consent of
          Owners.  (a) Except for any Supplemental Indenture entered into
          pursuant to Section 12.02 hereof, subject to the terms and
          provisions contained in this Section 12.03 and Section 12.05 and
          not otherwise, Owners of not less than a majority in aggregate
          principal amount of the Bonds then Outstanding which would be
          adversely affected thereby shall have the right from time to time
          to consent to and approve the execution and delivery by the
          Pollution Control Corporation and the Trustee of any Supplemental
          Indenture deemed necessary or desirable by the Pollution Control
          Corporation for the purposes of modifying, altering, amending,
          supplementing or rescinding, in any particular, any of the terms
          or provisions contained in this Indenture; provided, however,
          that, unless approved in writing by the Owners of all the Bonds
          then Outstanding which would be adversely affected thereby,
          nothing herein contained shall permit, or be construed as
          permitting, (i) a change in the times, amounts or currency of
          payment of the principal of or premium, if any, or interest on
          any Outstanding Bond, a reduction in the principal amount or
          redemption price of any Outstanding Bond or a change in the rate
          of interest thereon, or any impairment of the right of any Owner
          to institute suit for the payment of any Bond owned by it, or
          (ii) the creation of a claim or lien upon, or a pledge of, the
          Receipts and Revenues of the Pollution Control Corporation from
          the Loan Agreement ranking prior to or on a parity with the
          claim, lien or pledge created by this Indenture (except as
          referred to in Section 10.04 hereof), or (iii) a preference or
          priority of any Bond or Bonds over any other Bond or Bonds, or
          (iv) a reduction in the aggregate principal amount of Bonds the
          consent of the Owners of which is required for any such
          Supplemental Indenture or which is required, under Section 12.07
          hereof, for any modification, alteration, amendment or supplement
          to the Loan Agreement.

             (b) If at any time the Pollution Control Corporation shall
          request the Trustee to enter into any Supplemental Indenture for
          any of the purposes of this Section 12.03, the Trustee shall
          cause notice of the proposed Supplemental Indenture to be given
          by Mail to all Owners of Outstanding Bonds.  Such notice shall
          briefly set forth the nature of the proposed Supplemental
          Indenture and shall state that a copy thereof is on file at the
          Principal Office of the Trustee for inspection by all Owners of
          Bonds.

             (c) Within two years after the date of the first mailing of
          such notice, the Pollution Control Corporation and the Trustee
          may enter into such Supplemental Indenture in substantially the
          form described in such notice only if there shall have first been
          delivered to the Trustee (i) the required consents, in writing,
          of Owners of Bonds and (ii) an opinion of Bond Counsel stating
          that such Supplemental Indenture is authorized or permitted by
          this Indenture and the Act, complies with their respective terms
          and, upon the execution and delivery thereof, will be valid and
          binding upon the Pollution Control Corporation in accordance with
          its terms and will not, in and of itself, adversely affect the
          exclusion from gross income for federal tax purposes of the
          interest on the Bonds.

             (d) If Owners of not less than the percentage of Bonds
          required by this Section 12.03 shall have consented to and
          approved the execution and delivery thereof as herein provided,
          no Owner shall have any right to object to the execution and
          delivery of such Supplemental Indenture, or to object to any of
          the terms and provisions contained therein or the operation
          thereof, or in any manner to question the propriety of the
          execution and delivery thereof, or to enjoin or restrain the
          Pollution Control Corporation or the Trustee from executing and
          delivering the same or from taking any action pursuant to the
          provisions thereof.

             Section 12.04.   Effect of Supplemental Indenture.  Upon the
          execution and delivery of any Supplemental Indenture pursuant to
          the provisions of this Article XII, this Indenture shall be, and
          be deemed to be, modified, altered, amended or supplemented in
          accordance therewith, and the respective rights, duties and
          obligations under this Indenture of the Pollution Control
          Corporation, the Trustee and Owners of all Bonds then Outstanding
          shall thereafter be determined, exercised and enforced under this
          Indenture subject in all respects to such modifications,
          alterations, amendments and supplements.

             Section 12.05.   Consent of the Company.  Anything herein to
          the contrary notwithstanding, any Supplemental Indenture under
          this Article XII which affects any rights, powers, agreements or
          obligations of the Company under the Loan Agreement or requires a
          revision of the Loan Agreement shall not become effective unless
          and until the Company shall have consented to such Supplemental
          Indenture.

             Section 12.06.   Amendment of Loan Agreement without Consent
          of Owners.  Without the consent of or notice to the Owners of the
          Bonds, the Pollution Control Corporation may enter into any
          Supplemental Loan Agreement, and the Trustee may consent thereto,
          as may be required (a) by the provisions of the Loan Agreement
          and this Indenture, (b) for the purpose of curing any formal
          defect, omission, inconsistency or ambiguity therein, (c) to
          provide any additional procedures, covenants or agreements
          necessary or desirable to maintain the tax-exempt status of
          interest on the Bonds, or (d) in connection with any other change
          therein which is not materially adverse to the Owners of the
          Bonds.  A revision of Exhibit A to the Loan Agreement pursuant to
          Section 3.03 thereof, shall not be deemed a Supplemental Loan
          Agreement for purposes of this Indenture.

             Before the Pollution Control Corporation shall enter into, and
          the Trustee shall consent to, any Supplemental Loan Agreement
          pursuant to this Section 12.06, there shall have been delivered
          to the Trustee an opinion of Bond Counsel stating that such
          Supplemental Loan Agreement is authorized or permitted by this
          Indenture and the Act, complies with their respective terms,
          will, upon the execution and delivery thereof, be valid and
          binding upon the Pollution Control Corporation and the Company in
          accordance with its terms and will not, in and of itself,
          adversely affect the exclusion from gross income for federal tax
          purposes of interest on the Bonds.

             Section 12.07.   Amendment of Loan Agreement with Consent of
          Owners.  Except in the case of Supplemental Loan Agreements
          referred to in Section 12.06 hereof, the Pollution Control
          Corporation shall not enter into, and the Trustee shall not
          consent to, any Supplemental Loan Agreement without the written
          approval or consent of the Owners of not less than a majority in
          aggregate principal amount of the Bonds then Outstanding which
          would be adversely affected thereby, given and procured as
          provided in Section 12.03 hereof; provided, however, that, unless
          approved in writing by the Owners of all Bonds then Outstanding
          which would be adversely affected thereby, nothing herein
          contained shall permit, or be construed as permitting, a change
          in the obligations of the Company under Section 5.01 of the Loan
          Agreement.  If at any time the Pollution Control Corporation or
          the Company shall request the consent of the Trustee to any such
          proposed Supplemental Loan Agreement, the Trustee shall cause
          notice of such proposed Supplemental Loan Agreement to be given
          in the same manner as provided by Section 12.03 hereof with
          respect to Supplemental Indentures.  Such notice shall briefly
          set forth the nature of such proposed Supplemental Loan Agreement
          and shall state that copies of the instrument embodying the same
          are on file at the Principal Office of the Trustee for inspection
          by all Owners of the Bonds.  The Pollution Control Corporation
          may enter into, and the Trustee may consent to, any such proposed
          Supplemental Loan Agreement subject to the same conditions, and
          with the same effect, as provided by Section 12.03 hereof with
          respect to Supplemental Indentures.


                                     ARTICLE XIII

                                    MISCELLANEOUS

             Section 13.01.   Successors of the Pollution Control
          Corporation.  In the event of the dissolution of the Pollution
          Control Corporation, all the covenants, stipulations, promises
          and agreements in this Indenture contained, by or on behalf of,
          or for the benefit of, the Pollution Control Corporation, shall
          bind or inure to the benefit of the successors of the Pollution
          Control Corporation from time to time and any entity, officer,
          board, commission, agency or instrumentality to whom or to which
          any power or duty of the Pollution Control Corporation shall be
          transferred.

             Section 13.02.   Parties in Interest.  Except as herein
          otherwise specifically provided, nothing in this Indenture
          expressed or implied is intended or shall be construed to confer
          upon any person, firm or corporation other than the Pollution
          Control Corporation, the Company and the Trustee and their
          successors and assigns and the Owners of the Bonds any right,
          remedy or claim under or by reason of this Indenture, this
          Indenture being intended to be for the sole and exclusive benefit
          of the Pollution Control Corporation, the Company and the Trustee
          and their successors and assigns and the Owners of the Bonds.

             Section 13.03.   Severability.  In case any one or more of the
          provisions of this Indenture or of the Loan Agreement or of the
          Bonds shall, for any reason, be held to be illegal or invalid,
          such illegality or invalidity shall not affect any other
          provisions of this Indenture or of the Loan Agreement or of such
          Bonds, and this Indenture and the Loan Agreement and such Bonds
          shall be construed and enforced as if such illegal or invalid
          provisions had not been contained herein or therein.


             Section 13.04.   No Personal Liability of Pollution Control
          Corporation Officials.  No covenant or agreement contained in the
          Bonds or in this Indenture shall be deemed to be the covenant or
          agreement of any director, official, officer, agent, or employee
          of the Pollution Control Corporation in his individual capacity,
          and neither the members of the Board of Directors of the
          Pollution Control Corporation nor any official executing the
          Bonds shall be liable personally on the Bonds or be subject to
          any personal liability or accountability by reason of the
          issuance thereof.

             Section 13.05.   Bonds Owned by the Pollution Control
          Corporation or the Company.  In determining whether Owners of the
          requisite aggregate principal amount of the Bonds have concurred
          in any direction, consent or waiver under this Indenture, Bonds
          which are owned by the Pollution Control Corporation or the
          Company or by any person directly or indirectly controlling or
          controlled by or under direct or indirect common control with the
          Company (unless the Pollution Control Corporation, the Company or
          such person owns all Bonds which are then Outstanding, determined
          without regard to this Section 13.05) shall be disregarded and
          deemed not to be Outstanding for the purpose of any such
          determination, except that, for the purpose of determining
          whether the Trustee shall be protected in relying on any such
          direction, consent or waiver, only Bonds which the Trustee knows
          are so owned shall be so disregarded.  Upon the request of the
          Trustee, the Company and the Pollution Control Corporation shall
          furnish to the Trustee a certificate identifying all Bonds, if
          any, actually known to either of them to be owned or held by or
          for the account of any of the above-described persons, and the
          Trustee shall be entitled to rely on such certificate as
          conclusive evidence of the facts set forth therein and that all
          other Bonds are Outstanding for the purposes of such
          determination.  Bonds so owned which have been pledged in good
          faith may be regarded as Outstanding if the pledgee establishes
          to the satisfaction of the Trustee the pledgee's right so to act
          with respect to such Bonds and that the pledgee is not the
          Pollution Control Corporation or the Company or any person
          directly or indirectly controlling or controlled by or under
          direct or indirect common control with the Company.  In case of a
          dispute as to such right, any decision by the Trustee taken upon
          the advice of counsel shall be full protection to the Trustee.

             Section 13.06.   Counterparts.  This Indenture may be executed
          in any number of counterparts, each of which, when so executed
          and delivered, shall be an original; but such counterparts shall
          together constitute but one and the same Indenture.

             Section 13.07.   Governing Law.  The laws of the State of
          Arizona shall govern the construction and enforcement of this
          Indenture and of all Bonds, except that the laws of the State of
          New York shall govern the construction and enforcement of the
          rights and duties of the Trustee hereunder and the construction
          of Section 13.09 hereof and the computation of any period of
          grace provided herein.


             Section 13.08.   Notices.  Except as otherwise provided in
          this Indenture, all notices, certificates, requests requisitions
          or other communications by the Pollution Control Corporation, the
          Company, the Trustee, the Paying Agent, any Co-Paying Agent or
          the Registrar pursuant to this Indenture shall be in writing and
          shall be sufficiently given and shall be deemed given when mailed
          by registered mail, postage prepaid, addressed as follows: If to
          the Pollution Control Corporation, c/o Mangum, Wall, Stoops &
          Warden, 222 East Birch Avenue, Flagstaff, Arizona 86001,
          Attention: President; if to the Company, at 220 West Sixth
          Street, Tucson, Arizona 85702, Attention: Treasurer; if to the
          Trustee, at 100 Wall Street, Suite 1600, New York, New York
          10005, Attention: Vice President; if to the Paying Agent, any
          Co-Paying Agent or the Registrar, at the address designated in
          the acceptance of appointment or engagement.  Any of the
          foregoing may, by notice given hereunder to each of the others,
          designate any further or different addresses to which subsequent
          notices, certificates, requests or other communications shall be
          sent hereunder.

             Section 13.09.   Holidays.  If the date for making any payment
          or the last date for performance of any act or the exercising of
          any right, as provided in this Indenture, shall be a Saturday,
          Sunday or a public holiday in the city in which is located the
          Principal Office of the Trustee, such payment may be made or act
          performed or right exercised on the next succeeding business day,
          with the same force and effect as if done on the nominal date
          provided in this Indenture, and no interest shall accrue for the
          period after such nominal date.  If the last day of any period of
          grace, as provided in this Indenture, shall be a Saturday, Sunday
          or a public holiday in the city in which is located the Principal
          Office of the Trustee, the last day of such period of grace shall
          be deemed to be the next succeeding business day.

             Section 13.10.   Statutory Notice Regarding Cancellation of
          Contracts.  As required by the provisions of Section 38-511,
          Arizona Revised Statutes, as amended, notice is hereby given that
          political subdivisions of the State of Arizona or any of their
          departments or agencies may, within three (3) years of its
          execution, cancel any contract, without penalty or further
          obligation, made by the political subdivisions or any of their
          departments or agencies on or after September 30, 1988, if any
          person significantly involved in initiating, negotiating,
          securing, drafting or creating the contract on behalf of the
          political subdivisions or any of their departments or agencies
          is, at any time while the contract or any extension of the
          contact is in effect, an employee or agent of any other party to
          the contract in any capacity or a consultant to any other party
          of the contract with respect to the subject matter of the
          contract.

             The Trustee covenants and agrees not to employ as an employee,
          agent or, with respect to the subject matter of this Indenture, a
          consultant, any person actually known by the Trustee to be
          significantly involved in initiating, negotiating, securing,
          drafting or creating such Indenture on behalf of the Pollution
          Control Corporation within three (3) years from the execution
          hereof, unless a waiver is provided by the Pollution Control
          Corporation.


  <PAGE> 


              IN WITNESS WHEREOF, Coconino County, Arizona Pollution
          Control Corporation has caused this Indenture to be executed by
          its President and First Trust of New York, National Association
          has caused this Indenture to be executed on its behalf by its
          Vice President, all as of the day and year first above written.


                                             COCONINO COUNTY, ARIZONA
                                             POLLUTION CONTROL CORPORATION

          Attest:                            By: /s/ Bruce J. Nordstrom
                                                 --------------------------
                                                  President
           /s/ Terrence J. Rice
          -----------------------------------
          Secretary

                                             FIRST TRUST OF NEW YORK,
                                             NATIONAL ASSOCIATION



          Attest:                            By: /s/ Patrick J. Crowley
                                                --------------------------
                                                Vice President 

 	    /s/ Steven Haas
          -----------------------------------
          Assistant Secretary

   <PAGE>

                                                                  EXHIBIT A

                                    (FORM OF BOND)

          No.


                               COCONINO COUNTY, ARIZONA
                            POLLUTION CONTROL CORPORATION
                           POLLUTION CONTROL REVENUE BOND,
                                    1997 SERIES A
                    (TUCSON ELECTRIC POWER COMPANY NAVAJO PROJECT)

          INTEREST RATE (PER ANNUM):
          MATURITY DATE:                                    DATED:
          CUSIP:
          REGISTERED OWNER:
          PRINCIPAL AMOUNT:                                    DOLLARS



             Coconino County, Arizona Pollution Control Corporation, a
          political subdivision of the State of Arizona (the "Pollution
          Control Corporation"), for value received, hereby promises to pay
          (but only out of the Receipts and Revenues of the Pollution
          Control Corporation from the Loan Agreement, as hereinafter
          defined, and other moneys pledged therefor) to the Registered
          Owner identified above or registered assigns, on the Maturity
          Date set forth above, upon the presentation and surrender hereof,
          the Principal Amount set forth above and to pay (but only out of
          the Receipts and Revenues of the Pollution Control Corporation
          from the Loan Agreement and other moneys pledged therefor),
          interest on said Principal Amount until payment of said Principal
          Amount has been made or duly provided, from the date hereof, at
          the Interest Rate set forth above, semi-annually on the first
          days of October and April in each year, commencing October 1,
          1997.  Interest will be calculated on the basis of a 360-day year
          of twelve 30-day months.

             The principal of and premium, if any, on this Bond are payable
          at the principal office of First Trust of New York, National
          Association, as Paying Agent, or at the principal office of any
          co-paying agent appointed in accordance with the Indenture (as
          hereinafter defined), at the option of the Registered Owner
          hereof.  Interest on this Bond is payable by check drawn upon the
          Paying Agent and mailed to the Registered Owner of this Bond as
          of the close of business on the Record Date (as defined in the
          Indenture), at the registered address of such Registered Owner;
          notwithstanding the foregoing, upon request to the Paying Agent
          by a Registered Owner of not less than $1,000,000 in aggregate
          principal amount of Bonds, interest on such Bonds and, after
          presentation and surrender of such Bonds, the principal thereof
          shall be paid to such Registered Owner by wire transfer to the
          account maintained within the continental United States specified
          by such Registered Owner or, if such Registered Owner maintains
          an account with the entity acting as Paying Agent, by deposit
          into such account.  Payment of the principal of and premium, if
          any, and interest on this Bond shall be in any coin or currency
          of the United States of America as, at the respective times of
          payment, shall be legal tender for the payment of public and
          private debts.

             This Bond is one of the duly authorized Pollution Control
          Revenue Bonds, 1997 Series A (Tucson Electric Power Company
          Navajo Project) (the "Bonds") of the Pollution Control
          Corporation, aggregating Thirty-six Million Seven Hundred
          Thousand Dollars ($36,700,000) in principal amount, issued under
          and pursuant to the Constitution and laws of the State of
          Arizona, particularly Title 35, Chapter 6, Arizona Revised
          Statutes, as amended (the "Act"), and the Indenture of Trust,
          dated as of April 1, 1997 (the "Indenture"), between the
          Pollution Control Corporation and First Trust of New York,
          National Association, as trustee (the "Trustee"), for the purpose
          of financing and refinancing a portion of the costs of the
          acquisition, construction, improvement and equipping of certain
          pollution control facilities (the "Facilities") at the Navajo
          Generating Station (the "Plant").  Pursuant to the Loan
          Agreement, dated as of April 1, 1997 (the "Loan Agreement"),
          between the Pollution Control Corporation and Tucson Electric
          Power Company, a corporation organized and existing under the
          laws of the State of Arizona (the "Company"), the proceeds of the
          Bonds, other than accrued interest, if any, paid by the initial
          purchasers thereof, will be loaned from time to time to the
          Company.

             Neither the County of Coconino, Arizona nor the State of
          Arizona shall in any event be liable for the payment of the
          principal of or premium, if any, or interest on the Bonds, and
          neither the Bonds, nor the premium, if any, or the interest
          thereon, shall be construed to constitute an indebtedness of the
          County of Coconino, Arizona or the State of Arizona within the
          meaning of any constitutional or statutory provisions whatsoever. 
          The Bonds and the premium, if any, and the interest thereon are
          limited obligations of the Pollution Control Corporation payable
          solely from the Receipts and Revenues of the Pollution Control
          Corporation from the Loan Agreement and other moneys pledged
          therefor under the Indenture.

             The Bonds are equally and ratably secured, to the extent
          provided in the Indenture, by the pledge thereunder of the
          "Receipts and Revenues of the Pollution Control Corporation from
          the Loan Agreement", which term is used herein as defined in the
          Indenture and which as therein defined means all moneys paid or
          payable to the Trustee for the account of the Pollution Control
          Corporation by the Company in respect of the loan payments,
          including all receipts of the Trustee which, under the provisions
          of the Indenture, reduce the amounts of such payments. The
          Pollution Control Corporation has also pledged and assigned to
          the Trustee as security for the Bonds all other rights and
          interests of the Pollution Control Corporation under the Loan
          Agreement (other than its rights to indemnification and its
          administrative expenses and certain other rights).

             The transfer of this Bond shall be registered upon the
          registration books kept at the principal office of First Trust of
          New York, National Association, as Registrar, at the written
          request of the Registered Owner hereof or his attorney duly
          authorized in writing, upon surrender of this Bond at said
          office, together with a written instrument of transfer
          satisfactory to the Registrar duly executed by the Registered
          Owner or his duly authorized attorney.

             In the manner and with the effect provided in the Indenture,
          each of the Bonds may be redeemed prior to maturity, as follows:

               (a)  The Bonds shall be subject to redemption by the
             Pollution Control Corporation, at the direction of the
             Company, on any date on or after October 1, 2007 in whole at
             any time or in part from time to time, at the applicable
             redemption price (expressed as a percentage of principal
             amount) set forth below, plus accrued interest to the
             redemption date:

                  Redemption Period         Redemption Price
                  -----------------         ----------------
           October 1, 2007 through
           September 30, 2008                    102%
           October 1, 2008 through
           September 30, 2009                    101%
           October 1, 2009 and thereafter        100%

               (b)  The Bonds shall be subject to redemption by the
             Pollution Control Corporation, at the direction of the
             Company, in whole at any time at the principal amount thereof
             plus accrued interest to the redemption date, if:

                  (i) the Company shall have determined that the continued
               operation of the Plant is impracticable, uneconomical or
               undesirable for any reason;

                  (ii) the Company shall have determined that the continued
               operation of the Facilities is impracticable, uneconomical
               or undesirable due to (A) the imposition of taxes, other
               than ad valorem taxes currently levied upon privately owned
               property used for the same general purpose as the
               Facilities, or other liabilities or burdens with respect to
               the Facilities or operation thereof, (B) changes in
               technology, in environmental standards or legal requirements
               or in the economic availability of materials, supplies,
               equipment or labor or (C) destruction of or damage to all or
               part of the Facilities;

                  (iii) all or substantially all of the Facilities or the
               Plant shall have been condemned or taken by eminent domain;
               or

                  (iv) the operation of the Facilities or the Plant shall
               have been enjoined or shall have otherwise been prohibited
               by, or shall conflict with, any order, decree, rule or
               regulation of any court or of any federal, state or local
               regulatory body, administrative agency or other governmental
               body.

               (c)  The Bonds shall be subject to mandatory redemption by
             the Pollution Control Corporation, at the principal amount
             thereof plus accrued interest to the redemption date, on the
             180th day (or such earlier date as may be designated by the
             Company) after a final determination by a court of competent
             jurisdiction or an administrative agency, to the effect that,
             as a result of a failure by the Company to perform or observe
             any covenant, agreement or representation contained in the
             Loan Agreement, the interest payable on the Bonds is included
             for federal income tax purposes in the gross income of the
             owners thereof, other than any owner of a Bond who is a
             "substantial user" of the Facilities or a "related person"
             within the meaning of Section 103(b)(13) of the Internal
             Revenue Code of 1954, as amended (the "1954 Code").  No
             determination by any court or administrative agency shall be
             considered final for the purposes of this paragraph (c) unless
             the Company shall have been given timely notice of the
             proceeding which resulted in such determination and an
             opportunity to participate in such proceeding, either directly
             or through an owner of a Bond, and until the conclusion of any
             appellate review sought by any party to such proceeding or the
             expiration of the time for seeking such review. The Bonds
             shall be redeemed either in whole or in part in such principal
             amount that the interest payable on the Bonds remaining
             outstanding after such redemption would not be included in the
             gross income of any owner thereof, other than an owner of a
             Bond who is a "substantial user" of the Facilities or a
             "related person" within the meaning of Section 103(b)(13) of
             the 1954 Code.

               (d)  In the event that the aggregate of the amounts, if any,
             of the proceeds of the Bonds remaining unexpended upon the
             completion of the Facilities or upon the termination of the
             acquisition and construction thereof, together with any income
             or other gain from the investment thereof, shall at any time,
             or from time to time, be equal to or greater than $5,000, the
             Pollution Control Corporation shall redeem the Bonds, at the
             principal amount thereof plus accrued interest to the
             redemption date, in the largest aggregate principal amount
             which does not exceed the amount of such proceeds together
             with income or other gain on an interest payment date
             determined as set forth in, and otherwise in accordance with
             the provisions of, the Indenture; provided, however, that the
             Company may direct that such proceeds and income be applied to
             the purchase of the Bonds or in any other manner which will
             not impair the validity of the Bonds or the exemption from
             gross income for federal tax purposes of the interest thereon.

             If less than all of the Bonds at the time outstanding are to
          be called for redemption, the particular Bonds or portions of
          Bonds to be redeemed shall be selected by the Trustee, in such
          manner as the Trustee in its discretion may deem proper, in the
          principal amounts designated to the Trustee by the Company or
          otherwise as required by the Indenture.

             In the event any of the Bonds are called for redemption, the
          Trustee shall give notice, in the name of the Pollution Control
          Corporation, of the redemption of such Bonds.  Such notice shall
          be given by mailing a copy of the redemption notice by
          first-class mail at least thirty (30) days prior to the date
          fixed for redemption to the Registered Owners of the Bonds to be
          redeemed at the addresses shown on the registration books;
          provided, however, that failure duly to give such notice by
          mailing, or any defect therein, shall not affect the validity of
          any proceedings for the redemption of the Bonds as to which there
          shall be no such failure or defect.

             With respect to any notice of redemption of Bonds in
          accordance with the redemption provisions lettered (a) or (b)
          above, unless, upon the giving of such notice, such Bonds shall
          be deemed to have been paid within the meaning of the Indenture,
          such notice shall state that such redemption, shall be
          conditional upon the receipt, by the Trustee on or prior to the
          opening of business on the date fixed for such redemption of
          moneys sufficient to pay the principal of and premium, if any,
          and interest on such Bonds to be redeemed, and that if such
          moneys shall not have been so received said notice shall be of no
          force and effect and the Pollution Control Corporation shall not
          be required to redeem such Bonds. In the event that such notice
          of redemption contains such a condition and such moneys are not
          so received, the redemption shall not be made and the Trustee
          shall within a reasonable time thereafter give notice, in the
          manner in which the notice of redemption was given, that such
          moneys were not so received.

             If a notice of redemption shall be unconditional, or if the
          conditions of a conditional notice of redemption shall have been
          satisfied, then upon presentation and surrender of Bonds so
          called for redemption at the place or places of payment, such
          Bonds shall be redeemed.

             Any Bonds and portions of Bonds which have been duly selected
          for redemption shall cease to bear interest on the specified
          redemption date provided that moneys sufficient to pay the
          principal of, premium, if any, and interest on such Bonds shall
          be on deposit with the Trustee on the date fixed for redemption
          so that such Bonds will be deemed to be paid in accordance with
          the Indenture and such Bonds shall thereafter cease to be
          entitled to any lien, benefit or security under the Indenture.

             The Registered Owner of this Bond shall have no right to
          enforce the provisions of the Indenture, or to institute action
          to enforce the covenants therein, or to take any action with
          respect to any default under the Indenture, or to institute,
          appear in or defend any suit or other proceeding with respect
          thereto, except as provided in the Indenture.

             With certain exceptions as provided therein, the Indenture and
          the Loan Agreement may be modified or amended only with the
          consent of the Registered Owners of a majority in aggregate
          principal amount of all Bonds outstanding under the Indenture
          which would be adversely affected thereby.

             Reference is hereby made to the Indenture and the Loan
          Agreement, copies of which are on file with the Trustee, for the
          provisions, among others, with respect to the nature and extent
          of the rights, duties and obligations of the Pollution Control
          Corporation, the Company, the Trustee and the Registered Owners
          of the Bonds.  The Registered Owner of this Bond, by the
          acceptance hereof, is deemed to have agreed and consented to the
          terms and provisions of the Indenture and the Loan Agreement.

             Among other things, as provided in the Indenture and subject
          to certain limitations therein set forth, this Bond or any
          portion of the principal amount hereof will be deemed to have
          been paid within the meaning and with the effect expressed in the
          Indenture, and the entire indebtedness of the Pollution Control
          Corporation in respect thereof shall be satisfied and discharged,
          if there has been irrevocably deposited with the Trustee, in
          trust, money in an amount which will be sufficient and/or
          Government Obligations (as defined in the Indenture), the
          principal of and interest on which, when due, without regard to
          any reinvestment thereof, will provide moneys which, together
          with moneys deposited with or held by the Trustee, will be
          sufficient, to pay when due the principal of and premium, if any,
          and interest on this Bond or such portion of the principal amount
          hereof when due.

             Among other things, the Loan Agreement contains terms,
          provisions and conditions relating to the consolidation or merger
          of the Company with or into, and the sale, transfer or other
          disposition of assets to, another Person (as defined in the Loan
          Agreement), to the assumption by such other Person, in certain
          circumstances, of all of the obligations of the Company under the
          Loan Agreement and to the release and discharge of the Company,
          in certain circumstances, from such obligations.

             The Pollution Control Corporation, the Trustee, the Registrar,
          the Paying Agent and any co-paying agent may deem and treat the
          person in whose name this Bond is registered as the absolute
          owner hereof for all purposes, whether or not this Bond is
          overdue, and neither the Pollution Control Corporation, the
          Trustee, the Paying Agent nor any co-paying agent shall be
          affected by any notice to the contrary.

             It is hereby certified, recited and declared that all acts,
          conditions and things required by the Constitution and laws of
          the State of Arizona to exist, to have happened and to have been
          performed, precedent to and in the execution and delivery of the
          Indenture and the issuance of this Bond, do exist, have happened
          and have been performed in regular and due form as required by
          law.

             No covenant or agreement contained in this Bond or the
          Indenture shall be deemed to be a covenant or agreement of any
          official, officer, agent or employee of the Pollution Control
          Corporation in his individual capacity, and neither the members
          of the Board of Directors of the Pollution Control Corporation,
          nor any official executing this Bond, shall be liable personally
          on this Bond or be subject to any personal liability or
          accountability by reason of the issuance or sale of this Bond.

             This Bond shall not be entitled to any right or benefit under
          the Indenture, or be valid or become obligatory for any purpose,
          until this Bond shall have been authenticated by the execution by
          the Trustee, or its successor as Trustee of the certificate of
          authentication inscribed hereon.


              IN WITNESS WHEREOF, Coconino County, Arizona Pollution
          Control Corporation has caused this Bond to be executed with the
          manual or facsimile signature of its President or Vice President
          and attested with the manual or facsimile signature of its
          Secretary or Assistant Secretary.

                                        COCONINO COUNTY, ARIZONA
                                        POLLUTION CONTROL CORPORATION



                              By
                                 -----------------------------------------
                                 President

          ATTEST:


          -------------------------------------------
                  Secretary

   <PAGE> 

                                                                  EXHIBIT B


                     (FORM FOR ORDINARY REGISTRATION OF TRANSFER)

                       COMPLETE AND SIGN THIS FORM FOR ORDINARY
                               REGISTRATION OF TRANSFER


          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
          transfer(s) unto

          Please Insert Social Security Or Other Identifying Number of
          Assignee


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


          -----------------------------------------------------------------
          Please print or typewrite name and address including postal zip
          code of assignee


          -----------------------------------------------------------------
          this bond and all rights thereunder, hereby irrevocably
          constituting and appointing
                                            attorney to register such
          transfer on the registration books in the principal office of the
          Registrar, with full power of substitution in the premises.

          Dated:
                -------------------------

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

                                        NOTE:  The signature on this
                                        assignment must correspond with the
                                        name as written on the face of this
                                        Bond in every particular, without
                                        alteration, enlargement or any
                                        change whatsoever.



   <PAGE> 

                                                                  EXHIBIT C

                  (FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)

                            CERTIFICATE OF AUTHENTICATION

                    This is to certify that this Bond is one of the Bonds
               described in the within-mentioned Indenture.


                              FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION
                              as Trustee


                                   By
                                     -------------------------------------
                                     Authorized Officer

          Date of Authentication:
                                 -----------------------