<PAGE>   1
                                                                    Exhibit 10.1

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTIAN PORTIONS OF
THIS EXHIBIT PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION UNDER RULE 24b-2 OF THE EXCHANGE ACT OF
1934 AS AMENDED.

                              DEPARTMENT OF ENERGY
                         Bonneville Power Administration
                                  P.O. Box 3621
                           Portland, Oregon 97208-3621
                                                             POWER BUSINESS LINE

June 22, 2001

In reply refer to:  PT-5


                                                     Amendment No. 1
                                                     Contract No. 00PB-12197
                                                     BLOCK POWER SALES AGREEMENT

Mr. Brett Wilcox
Golden Northwest Aluminum, Inc.
8000 NE Parkway Drive, Suite 300
Vancouver, WA 98662-6744

Dear Mr. Wilcox:

This letter agreement (Amendment No. 1) constitutes an amendment to Contract No.
00PB-12197 (Block Power Sales Agreement) between the Bonneville Power
Administration (BPA) and Golden Northwest Aluminum, Inc. (Golden Northwest). As
a result of a curtailment by Golden Northwest from October l, 2001, through
March 31, 2002, the Parties have agreed to amend the Block Power Sales Agreement
as follows:

1.     EFFECTIVE DATE. This Amendment No. 1 shall become effective on the date
       signed by the Parties.

2.     AMENDMENT OF BLOCK POWER SALES AGREEMENT.

       (a)    Section 4 is deleted and replaced by the following:

              "4.    INDUSTRIAL FIRM POWER PRODUCT
                     During the period that begins on October 1, 2001, and
                     continues through March 31, 2002, BPA has agreed to
                     purchase 236 MW on every hour from Golden Northwest for
                     power curtailed by Golden Northwest under Contract No.
                     01PB-42021 and, as a result of such curtailment, Golden
                     Northwest shall take delivery of zero (0) MW each hour
                     during such period. During the period that begins on April
                     1, 2002, and continues through September 30, 2006, Golden
                     Northwest shall purchase 236 MW each hour."

       (b)    A new section 20 is added as follows:


<PAGE>   2

              "20.   SPECIAL PROVISIONS

                     (a)    GOLDEN NORTHWEST CURTAILMENT
                            BPA shall pay Golden Northwest $*** per MWh for
                            curtailed power under Contract No. 01PB-42021.

                     (b)    EMPLOYEE COMPENSATION
                            During the curtailment, Golden Northwest will
                            continue to maintain full-time (40 hours per week
                            equivalent) and part-time wages and benefits for its
                            union and non-union employees, as applicable, that
                            would have been employed if Golden Northwest was
                            operating using the full amount of BPA power that
                            would have been available under this Agreement.
                            PROVIDED, however, that Golden Northwest may
                            distribute an equivalent amount of benefits to
                            employees in an alternative manner, if agreed to by
                            its unions.

                     (c)    TAX REVENUES
                            Golden Northwest's facilities provide a substantial
                            portion of the tax revenues for the communities in
                            which they operate. The Parties intend that the
                            six-month curtailment under this Amendment No. 1
                            shall not affect the assessed value of the
                            facilities, and Golden Northwest agrees to notify
                            the tax assessors of this intention.

                     (d)    PRICING STRUCTURE FOR ANY FUTURE CURTAILMENTS
                            Under this Amendment No. 1, Golden Northwest has
                            chosen to limit its curtailment to 6 months, even
                            though BPA had offered a term of up to two years.
                            The amount BPA is paying for this shorter
                            curtailment reflects the fact that the curtailment
                            has higher value to BPA during the October 1, 2001,
                            through March 31, 2002, period. Should BPA and
                            Golden Northwest agree in the future to extend this
                            curtailment, the prices BPA would pay for the
                            extended curtailment would reflect tho lower
                            curtailment value of future periods such that
                            payments would be comparable to what BPA has paid
                            other direct service industries for a similar
                            duration.

                     (e)    POST 2006 SERVICE
                            Golden Northwest hereby reaffirms that it will not
                            argue in any legal or political forum that it has a
                            statutory right to, or should be allocated under
                            current statutes, any direct service of Federal
                            power after September 30, 2006.


*** Omitted and filed separately with the Commission


<PAGE>   3

                     (f)    INABILITY TO PURCHASE STATION SERVICE POWER AT
                            LOWEST PF RATE
                            If, during the curtailment period under this
                            Amendment No. l, Golden Northwest is unable to
                            purchase station service power from Klickitat and
                            Northern Wasco PUDs at the lowest PF Rate, then,
                            upon Golden Northwest's request, the Parties shall
                            execute amendments effective October 1, 2001, to:
                            (1) increase the amount of power purchased from
                            October 1, 2001 through March 31, 2002, under this
                            Agreement by up to 35 MW on every hour; and (2)
                            reduce the amount curtailed under Contract No.
                            01PB-42021 by the amount and duration of such
                            increase in (1) above. Any such request shall be
                            made in writing to BPA no later than 10 business
                            days following publication of BPA's final Record of
                            Decision on its New Large Single Load policy.

                     (g)    RESOURCE DEVELOPMENT SUPPORT
                            BPA's resource development support for Golden
                            Northwest and its affiliates will be limited to
                            providing the means to facilitate new wind
                            resources. Such support will be negotiated between
                            the parties to be consistent with detailed
                            principles established by BPA, limited to 200 MW of
                            wind for a 10-year term, and conditioned on any
                            resource being fully permitted and priced comparably
                            with BPA's spring 2001 wind RFP project results.

If this Amendment No. 1 is acceptable to Golden Northwest, please so indicate by
signing both originals and return one original to me. The remaining original is
for your files.

Sincerely,                              ACCEPTED:

                                        GOLDEN NORTHWEST ALUMINUM, INC.
/s/ SCOTT K. WILSON
Scott K. Wilson                         By: /s/ BRETT WILCOX
Account Executive                          -------------------------------------

                                        Name: Brett Wilcox
                                             -----------------------------------
                                             (Print/Type)

                                        Title: President
                                              ----------------------------------

                                        Date:  June 22, 2001
                                             -----------------------------------