EXHIBIT 10.8.7


<PAGE>


                                                            [Execution Copy]

                             AMENDMENT NO. 10 TO THE
                          ARIZONA NUCLEAR POWER PROJECT
                             PARTICIPATION AGREEMENT

                          APS CONTRACT No: 4172-419.00


                                NOVEMBER 21, 1985

<PAGE>



                             AMENDMENT NO. 10 TO THE
                          ARIZONA NUCLEAR POWER PROJECT
                             PARTICIPATION AGREEMENT

1.  Parties  to this  Amendment  No. 10 to the  Arizona  Nuclear  Power  Project
Participation  Agreement,  hereinafter  referred to as "Amendment  No. 10", are:
ARIZONA PUBLIC SERVICE COMPANY,  a corporation  organized and existing under and
by  virtue  of the laws of the  State of  Arizona,  hereinafter  referred  to as
"Arizona",  SALT RIVER PROJECT AGRICULTURAL  IMPROVEMENT AND POWER DISTRICT,  an
agricultural  improvement district organized and existing under and by virtue of
the laws of the  State  of  Arizona,  hereinafter  referred  to as  "Salt  River
Project";  SOUTHERN  CALIFORNIA  EDISON  COMPANY,  a  corporation  organized and
existing under and by virtue of the laws of the State of California, hereinafter
referred to as "Edison";  PUBLIC  SERVICE  COMPANY OF NEW MEXICO,  a corporation
organized  and  existing  under  and by  virtue  of the laws of the State of New
Mexico,   hereinafter  referred  to  as  "PNM";  EL  PASO  ELECTRIC  COMPANY,  a
corporation  organized and existing under and by virtue of the laws of the State
of Texas,  hereinafter  referred to as "El Paso"; and SOUTHERN CALIFORNIA PUBLIC
POWER  AUTHORITY,  a joint powers  agency  organized  and existing  under and by
virtue of the laws of the State of  California,  doing  business in the State of
Arizona as SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY  ASSOCIATION,  hereinafter
referred to as "SCPPA".



                                      - 1 -

<PAGE>


 2.      Recitals:
         2.1 Arizona,  Salt River  Project,  Edison,  PNM, El Paso and SCPPA are
parties  to  a  certain   agreement   entitled  Arizona  Nuclear  Power  Project
Participation  Agreement,  dated as of August 23, 1973,  as amended by Amendment
No. 1,  dated as of January  1,  1974,  Amendment  No. 2, dated as of August 28,
1975,  Amendment No. 3, dated as of July 22, 1976,  Amendment No. 4, dated as of
December 15, 1977,  Amendment No. 5, dated as of December 5, 1979, Amendment No.
6, dated as of September  28, 1981,  Amendment No. 7, dated as of March 4, 1982,
Amendment  No. 8, dated as of June 17, 1983,  and  Amendment  No. 9, dated as of
June 12, 1984,  hereinafter,  as so amended,  referred to as the  "Participation
Agreement".

         2.2 The  Participants  desire to amend the  Participation  Agreement to
make  provision  for sale and  leaseback  financing  transactions  involving the
Participants.

 3.      Agreement:
         3.1 In  consideration  of the terms and  conditions  contained  in this
Amendment No. 10 to the Participation Agreement, the parties agree as follows:

 4.      Effective Date:
         4.1 This  Amendment No. 10 shall become  effective when executed by all
Participants.



                                      - 2 -

<PAGE>

 5.      Amendment No. 10 to the Participation Agreement:
         5.1 Section  3.43 is hereby  deleted in its  entirety and a new Section
3.43 is added as follows:

         "3.43  Participant:  Any party hereto and any  successor or assignee of
         such party under Section 15.2 or Section 15.3 and any Transferee  under
         Section 15.10 hereof."


         5.2 Section  3.46 is deleted in its  entirety and a new Section 3.46 is
added as follows:

         "3.46   Project   Agreements:   This   Participation   Agreement,   any
         Construction Agreement,  any Nuclear Fuel Agreement,  but excluding any
         Nuclear Fuel Agreements for the supply of Uranium Concentrates to which
         all  Participants  are not  parties,  and any  agreements  between  the
         Participants  or any of them and any third party for land,  land rights
         or water rights for ANPP, as such agreements are originally executed or
         as they  may  thereafter  be  supplemented  or  amended  and any  other
         agreements   as  the   Participants   agree  to  designate  as  Project
         Agreements.  Project  Agreements  shall not  include any deed of trust,
         mortgage  indenture,  security agreement or any agreement or instrument
         relating to a sale and leaseback  transaction,  unless the Participants
         shall otherwise agree."

         5.3  Section  4.1 is deleted in its  entirety  and a new Section 4.1 is
added as follows:

         "4.1 Except as otherwise  permitted in Section 15.1.1(b)  hereof,  each
         Participant  shall accept,  acquire and own an undivided  interest as a
         tenant in common in ANPP and all Project  Agreements  in  proportion to
         its Generation Entitlement Share, but excluding (i) Option and Purchase
         of Effluent  Agreement,  Agreement  No.  13904,  dated April 23,  1973,
         between  Arizona  and Salt River  Project  and the  Cities of  Phoenix,
         Glendale, Mesa, Scottsdale and Tempe and the Town of Youngtown,  except
         to  the  extent  only  that  said  agreement  governs  the  rights  and
         obligations  for the  purchase  and  delivery  of  wastewater  effluent
         required for Construction Work, Operating Work and Capital Improvements
         and (ii)  any  Project  Agreement  which by its  terms  establishes  an
         ownership  interest or rights of any  Participant in the subject matter
         thereof which differs from its Generation  Entitlement Share under this
         Participation Agreement."

                                      - 3 -

<PAGE>

         5.4 The caption of Section 15 is hereby amended to read: "15. Mortgage,
Sale and Leaseback and Transfer of Interest:".

         5.5 Section  15.1 is hereby  deleted in its  entirety and a new Section
15.1 is added as follows:

         "15.1  The  following  provisions  shall  apply  to the  right  of each
         Participant to enter into mortgage and sale and leaseback transactions.

         "15.1.1 Each Participant shall have the right at any time and from time
         to time to

                  "(a) mortgage, create or provide for a security interest in or
                  convey in trust all or a part of its ownership  share in ANPP,
                  together with an equal interest in the Project Agreements,  to
                  a  trustee  or  trustees  under  deed of  trust,  mortgage  or
                  indenture  or to a secured  party or parties  under a security
                  agreement,  as  security  for its  present or future  bonds or
                  other  obligations  or  securities,  and to any  successors or
                  assigns thereof, or

                  "(b) sell and lease back,  under a net lease  having a primary
                  term  of not  less  than  25  years,  all or any  part  of its
                  interest in a Generating  Unit and Capital  Improvements  made
                  from time to time with respect  thereto,  together with all or
                  any part of its Generation  Entitlement  Share with respect to
                  such Generating Unit or part thereof, to a trustee or trustees
                  under a  grantor  trust or  trusts  and to any  successors  or
                  assigns thereof,

         "without  need for the prior written  consent of any other  Participant
         and without such mortgagee, trustee, secured party or lessor under such
         sale and  leaseback  transaction  assuming  or  becoming in any respect
         obligated  to  perform  any of the  obligations  of  such  Participant;
         provided,  however,  at or prior to any sale and leaseback  pursuant to
         clause (b) of this Section 15.1.1,  the conditions to such  transaction
         set forth in Section 15.6 hereof shall have been satisfied.

         "15.1.2 Each lessor under a sale and  leaseback  transaction  permitted
         under clause (b) of Section 15.1.1 shall have the right at any time and
         from time to time to

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<PAGE>

         mortgage,  create or provide  for a security  interest  in or convey in
         trust all or any part of its  ownership  share in ANPP to a trustee  or
         trustees  under deed of trust,  mortgage or  indenture  or to a secured
         party or  parties  under a  security  agreement,  as  security  for its
         present or future bonds or other obligations or securities,  and to any
         successors  or  assigns  thereof,  without  need for the prior  written
         consent of any  Participant  and  without  such  mortgagee,  trustee or
         secured party assuming or becoming in any respect  obligated to perform
         any of the obligations of the Participants."

         5.6  Section  15.2  is  amended  (i) to  redesignate  such  Section  as
"15.2.1", (ii) by the addition of a new introductory Section 15.2 as follows:

         "15.2 The following provisions shall apply to the exercise of rights in
         respect of transactions permitted by Section 15.1."

and (iii) by the addition of a new Section 15.2.2 which reads as follows:

         "15.2.2  From  and  after,  but in no  event  prior  to,  the date of a
         rejection or deemed  rejection by any  receiver,  referee or trustee in
         bankruptcy or  reorganization  of any Participant of the lease or other
         executory   contract   constituting   part  of  a  sale  and  leaseback
         transaction  relating to ANPP to which such Participant is a party, the
         lessor  in such  sale  and  leaseback  transaction  (or any  mortgagee,
         trustee or  secured  party  under  present  and future  deeds of trust,
         mortgages,  indentures  or security  agreements  of such lessor and any
         successor or assignee thereof, and any receiver,  referee or trustee in
         bankruptcy or reorganization of such lessor and any successor by action
         of law or otherwise,  and any purchaser,  transferee or assignee of any
         thereof) may (subject, however, to the rights of the other Participants
         under the Project Agreements,  including but not limited to, Section 23
         hereof),  without  need for the  prior  written  consent  of any  other
         Participant,  (i) succeed to and  acquire  all the  rights,  titles and
         interests of such  Participant in ANPP and the Project  Agreements,  to
         the extent,  but only to the extent, of the Generating Unit (or portion
         thereof) and the portion of such Participant's  Generation  Entitlement
         

                                                       - 5 -

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         Share acquired by such lessor in such  transaction,  and (ii) take over
         possession  of or  foreclose  upon said  property,  rights,  titles and
         interests of such  Participant,  and in such event such lessor or other
         party shall assume and be obligated  fully to perform and discharge all
         obligations  arising  thereafter  hereunder and under any other Project
         Agreement of such Participant to the extent, but only to the extent, of
         the  Generating  Unit (or  portion  thereof)  and the  portion  of such
         Participant's    Generation   Entitlement   Share   subject   to   such
         transaction."

         5.7 Section 15 is amended by the addition of Sections 15.6, 15.7, 15.8,
15.9 and 15.10 which read as follows:

         "15.6 The right of a  Participant  to enter  into a sale and  leaseback
         transaction  as provided in clause (b) of Section  15.1.1 is subject to
         the following:

         "15.6.1 The other Participants shall have received (1) an instrument of
         each lessor party to such transaction  confirming the matters set forth
         in Section  15.6.3.2  hereof,  (2) a certificate of such Participant to
         the effect that such  transaction will satisfy the conditions set forth
         in Section 15.6 hereof,  and all other provisions of this Participation
         Agreement,  and (3) an  opinion of  counsel  to such  Participant  with
         respect to the  matters  set forth in Sections  15.6.3.1  and  15.6.3.4
         hereof and to the effect that the documents and agreements  relating to
         such transaction are not inconsistent  with the requirements of Section
         15.6.3 hereof.

         "15.6.2 The Administrative  Committee,  based upon the instrument,  the
         certificate  and the opinion  described in Section  15.6.1,  shall have
         found, by unanimous resolution,  such transaction to be consistent with
         Section 15 hereof.  The representative of any Participant need not join
         in such finding if such transaction (1) is inconsistent with Section 15
         hereof or (2) may, in some manner, materially impair the rights of such
         Participant to retain or obtain tax benefits  arising from its property
         interest in ANPP.

         "15.6.3 Such  transaction,  and the documents and  agreements  relating
         thereto, shall provide that:

         "15.6.3.1  The rights and  remedies  of the  parties  thereto  shall be
         subject and subordinate to the rights and remedies of the  Participants
         

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         (other than (i) the  Participant  party  thereto or (ii) any person who
         shall become a Participant in respect of the lessor's  interest in ANPP
         under such transaction) under the Project Agreements;

         "15.6.3.2  Except as  provided  in  Sections  15.2.2,  15.6.4 and 15.10
         hereof,  the  Participant  party  thereto  shall be and remain the sole
         "Participant" for all purposes of this Participation  Agreement and the
         sole  representative  (with  power to bind  each  lessor  party to such
         transaction  and each  mortgagee,  trustee  and  secured  party of such
         lessor  described in Section  15.1.2  hereof) in all dealings  with the
         other  Participants  in relation to the  property,  rights,  titles and
         interests of such Participant transferred pursuant to such transaction;

         "15.6.3.3  Any  right  conferred  by  Section  15.2.2  hereof  shall be
         exercised only in concert (through a single nominee, agent, receiver or
         subsequent  transferee) with similar rights conferred by Section 15.2.2
         hereof on parties to other sale and  leaseback  transactions  involving
         the same Participant and interests in the same Generating Unit;

         "15.6.3.4  All  right  to  partionment  with  respect  to the  interest
         acquired shall be waived by the lessor party to such transaction;

         "15.6.3.5 Upon the expiration of the lease in such transaction and upon
         the Participant party thereto failing to purchase all the right,  title
         and interest in ANPP and contractual  rights related thereto  necessary
         for the operation of such interest (a "Lessor's  Interest") acquired by
         the lessor in such  transaction,  such lessor shall entertain cash bids
         from each other Participant for such Lessor's Interest; and

         "15.6.3.6  The  provisions  of  such  transaction   responsive  to  the
         foregoing  Sections of this  Section  15.6.3 shall remain in full force
         and  effect  until  such  time as the  Administrative  Committee  shall
         otherwise consent.

         "15.6.4  Such  transaction  may  provide  that  the  authority  of  the
         Participant  party thereto  described in Section  15.6.3.2 hereof shall
         not extend to approval of any amendment to the Participation  Agreement
         the effect of which would be to reduce the Generation Entitlement Share
         in which the lessor or lessors party to such  transaction have acquired
         an interest.

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<PAGE>


         "15.7  Except  to the  extent  provided  in  Section  15.10  hereof,  a
         Participant shall not be released from any obligation under the Project
         Agreements notwithstanding any assumption of or agreement to perform or
         discharge in whole or in part,  such  obligation by any other person in
         connection with a sale and leaseback transaction.

         "15.8  Anything in a sale and  leaseback  transaction  to the  contrary
         notwithstanding:  (1) the rights and  remedies of the  parties  thereto
         shall be subject  and  subordinate  to the rights and  remedies  of the
         Participants under the Project Agreements (including but not limited to
         Section 23 hereof),  other than (i) the  Participant  party thereto and
         (ii) any  person  who shall  become a  Participant  in  respect  of the
         lessor's  interest  in  ANPP  under  such  transaction;  (2)  no  other
         Participant  shall incur any  obligations  or liabilities in respect of
         such  transaction;  and (3) the lessor party  thereto shall be bound by
         the  provisions  of Section 21 hereof  (other than Section 21.3) to the
         same extent as if such lessor were a Participant.

         "15.9 If a Participant enters into a sale and leaseback  transaction as
         provided  in  clause  (b) of  Section  15.1.1  such  Participant  shall
         indemnify  all  other  Participants  against  any  costs  and  expenses
         incurred  by them  because  of such  Participant's  entering  into such
         transaction.

         "15.10 Upon a lease or sale to a person,  partnership,  corporation  or
         governmental   corporation  or  agency   engaged  in  the   generation,
         transmission  or  distribution  of Energy  (other than the  Participant
         originally  party to such  transaction) (a  "Transferee") of a Lessor's
         Interest acquired by a lessor in a sale and leaseback transaction:

         "15.10.1 The Transferee shall be and become the sole  "Participant" for
         all   purposes   of  this   Participation   Agreement   and  the   sole
         representative (with power to bind any lessor) in all dealings with the
         other Participants in relation to such interest;

         "15.10.2 The  Transferee  (1) shall assume and agree,  and be deemed to
         have assumed and agreed, fully to perform and discharge all obligations
         under the Project  Agreements  relating to such  interest to the extent
         arising subsequent to such lease or sale, except obligations in respect
         of  decommissioning  and removing from service the  Generating  Unit to
         which such interest relates (the "Termination Obligation"), (2) if such
         Transferee was not previously a Participant, may assume

                                      - 8 -

<PAGE>

         and  agree  fully  to  perform  and  discharge  all or any  part of the
         Termination   Obligation  and,  (3)  if  such  Transferee  is  and  was
         previously a Participant, shall assume and agree, and be deemed to have
         assumed and  agreed,  fully to perform and  discharge  the  Termination
         Obligation;

         "15.10.3 The Participant  originally  party to such  transaction  shall
         thereupon, with the consent (which consent shall not be withheld by any
         Participant  unless a release would, in some manner,  materially impair
         or materially  adversely  affect the rights of such  Participant  under
         this  Participation  Agreement or the rights or security of  obligation
         holders of such  Participant)  of each other  Participant,  be released
         from all obligations under the Project Agreements so assumed and agreed
         to by the  Transferee  but only to the  extent of such  assumption  and
         agreement; and

         "15.10.4  The  Transferee  shall  furnish  to  each  other  Participant
         evidence of such sale or lease and such assumption and agreement."

         5.8 Section 20.8 is amended by the addition of the  following  sentence
at the end thereof:

         "Each  Participant  shall  have the right to have any  lessor  (and any
         trustee or trustees under a deed of trust, mortgage or indenture or any
         secured  party or  parties  under a security  agreement)  in a sale and
         leaseback  transaction  named  on all or any of the  Project  Insurance
         policies  as loss  payee or  additional  insured  as its  interest  may
         appear,  by notice in writing to the Project Manager of Operating Agent
         given in  writing  not less than  thirty  (30)  days  prior to the date
         proposed for such naming,  which notice shall specify the name or names
         of such lessor and such  additional  information as may be necessary or
         required to permit it to be included on the policy(ies) of insurance."

         5.9 Section  32.1 is hereby  deleted in its  entirety and a new Section
32.1 is added as follows:

         "32.1 All of the  respective  covenants and  obligations of each of the
         Participants  set forth and contained in the Project  Agreements  shall
         bind and shall be and become the respective  covenants and  obligations
         of:

                                      - 9 -

<PAGE>

                  "32.1.1  Each such Participant;

                  "32.1.2 All mortgagees, trustees and secured parties under all
                  present and future  mortgages,  indentures and deeds of trust,
                  and  security  agreements  which are or may become a lien upon
                  any of the interests of such  Participant  in ANPP;  provided,
                  however,  that such  covenants  and  obligations  shall become
                  binding   upon  such  parties  only  at  the  time  of  taking
                  possession;

                  "32.1.3 All receivers, assignees for the benefit of creditors,
                  bankruptcy trustees and referees of such Participant;

                  "32.1.4  All  lessors  under  all  future  sale and  leaseback
                  transactions  (or other  person  described  in Section  15.1.2
                  hereof) involving interests in ANPP; provided,  however,  that
                  such  covenants and  obligations  shall become binding on such
                  lessors (or other  persons)  only in  accordance  with Section
                  15.2.2 hereof;

                  "32.1.5 All receivers, assignees for the benefit of creditors,
                  bankruptcy trustees and referees of such lessors;

                  "32.1.6  All  Transferees  pursuant to Section  15.10  hereof;
                  provided,  however,  that such covenants and obligations shall
                  become binding on a Transferee only in accordance with Section
                  15.10.2 hereof;

                  "32.1.7 All other persons, firms, partnerships or corporations
                  claiming through or under any of the foregoing; and

                  "32.1.8 Any successors or assigns of any of those mentioned in
                  Sections 32.1.1 through 32.1.7 hereof,

         "and shall be covenants and obligations running with such Participant's
         respective  rights,  titles and  interests in ANPP and in, to and under
         the Project Agreements,  and shall be for the benefit of the respective
         rights,  titles and interests of the  Participants and their respective
         successors and assigns, in and to ANPP. It is the specific intention of
         this provision that all such covenants and obligations shall be binding
         upon any party which  acquires any of the rights,  titles and interests
         of any  such  Participant  in  ANPP or in,  to and  under  the  Project
         Agreements and that all of the above-described persons and groups shall
         be obligated to use such Participant's  rights, titles and interests in
         ANPP and/or

                                     - 10 -

<PAGE>

         in, to or under the Project  Agreements  for the purpose of discharging
         its covenants and obligations under the Project Agreements:  except (i)
         that in the case of a partial  assignment  the  assignee  shall only be
         required  to  share  in  the  cost  of  fulfilling  the  covenants  and
         obligations of the assigning  Participant  in, to and under the Project
         Agreements  to  an  extent   proportionate   or  attributable  to  such
         assignment,  (ii) the rights and  obligations of any Fuel Lessor of any
         Participant  shall be governed by the provisions of Section 15.4 hereof
         and (iii)  the  rights  and  obligations  of any  person  specified  in
         Sections  32.1.2,  32.1.4 and 32.1.6  hereof  shall be  governed as set
         forth in such Sections."

         5.10 Except as provided herein, the Participation Agreement, as amended
by this Amendment No.10, shall remain in full force and effect.

 6.  Execution by Counterparts:

         6.1  This   Amendment   No.  10  may  be  executed  in  any  number  of
counterparts, and upon execution by all Participants,  each executed counterpart
shall  have the same force and effect as an  original  instrument  and as if all
Participants  had  signed  the  same  instrument.  Any  signature  page  of this
Amendment No. 10 may be detached from any  counterpart  of this Amendment No. 10
without  impairing  the  legal  effect  of any  signatures  thereon,  and may be
attached to another  counterpart  of this  Amendment  No. 10  identical  in form
hereto but having attached to it one or more signature pages.



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<PAGE>

 7.  Signature Clause:

         7.1 The signatories  hereto represent that they have been appropriately
authorized  to enter into this  Amendment No. 10 on behalf of the party for whom
they  sign.  This  Amendment  No.  10 is hereby  executed  as of the 21st day of
October, 1985.


                                       ARIZONA PUBLIC SERVICE COMPANY



                                       By:      /S/
                                           --------------------------
                                       Its:     Chief Executive Officer



                                       SALT RIVER PROJECT AGRICULTURAL
                                       IMPROVEMENT AND POWER DISTRICT

ATTEST AND COUNTERSIGN:



______________________                 By:      _______________________________

Its:     _________________             Its:     _______________________________



                                       SOUTHERN CALIFORNIA EDISON
                                         COMPANY



                                       By:      _______________________________

                                       Its:     _______________________________


                                     - 12 -

<PAGE>

 7.  Signature Clause:

         7.1 The signatories  hereto represent that they have been appropriately
authorized  to enter into this  Amendment No. 10 on behalf of the party for whom
they sign. This Amendment No. 10 is hereby executed as of the th day of October,
1985.


                                        ARIZONA PUBLIC SERVICE COMPANY



                                         By:

                                         Its:



                                         SALT RIVER PROJECT AGRICULTURAL
                                         IMPROVEMENT AND POWER DISTRICT

ATTEST AND COUNTERSIGN:



/S/                                      By:      /S/
-----------------------                       -------------------------
Its:     Secretary                       Its:     President



                                         SOUTHERN CALIFORNIA EDISON
                                         COMPANY



                                         By:    _______________________________

                                         Its:   _______________________________


                                     - 12 -

<PAGE>

 7.  Signature Clause:

         7.1 The signatories  hereto represent that they have been appropriately
authorized  to enter into this  Amendment No. 10 on behalf of the party for whom
they  sign.  This  Amendment  No.  10 is hereby  executed  as of the 21st day of
November, 1985.


                                        ARIZONA PUBLIC SERVICE COMPANY



                                        By:      /S/
                                             -------------------------
                                        Its:     Chief Executive Officer



                                        SALT RIVER PROJECT AGRICULTURAL
                                        IMPROVEMENT AND POWER DISTRICT

ATTEST AND COUNTERSIGN:



                                        By:

Its:     _________________              Its:



                                        SOUTHERN CALIFORNIA EDISON
                                        COMPANY



                                        By:      _______________________________

                                        Its:     _______________________________


                                     - 12 -

<PAGE>

 7.  Signature Clause:

         7.1 The signatories  hereto represent that they have been appropriately
authorized  to enter into this  Amendment No. 10 on behalf of the party for whom
they  sign.  This  Amendment  No.  10 is  hereby  executed  as of  the th day of
November, 1985.


                                        ARIZONA PUBLIC SERVICE COMPANY



                                        By:

                                        Its:



                                        SALT RIVER PROJECT AGRICULTURAL
                                        IMPROVEMENT AND POWER DISTRICT

ATTEST AND COUNTERSIGN:



                                         By:

Its:                                     Its:



                                         SOUTHERN CALIFORNIA EDISON
                                         COMPANY



                                         By:      /S/

                                         Its:     /S/


                                     - 12 -

<PAGE>

                                         PUBLIC SERVICE COMPANY OF NEW MEXICO



                                          By:      J. L. Wilkins

                                          Its:     Senior Vice President
                                                     Power Supply



                                          EL PASO ELECTRIC COMPANY



                                          By:    _______________________________

                                          Its:   _______________________________



                                          SOUTHERN CALIFORNIA PUBLIC
                                          POWER AUTHORITY, doing business in
                                          the State of Arizona  as  SOUTHERN
                                          CALIFORNIA  PUBLIC POWER AUTHORITY
                                          ASSOCIATION

ATTEST:


______________________                    By:    _______________________________

Its:     _________________                Its:   _______________________________


                                     - 13 -

<PAGE>

                                          PUBLIC SERVICE COMPANY OF NEW MEXICO



                                          By:

                                          Its:



                                          EL PASO ELECTRIC COMPANY



                                          By:      /S/

                                          Its:     Senior Vice President



                                          SOUTHERN CALIFORNIA PUBLIC
                                          POWER AUTHORITY, doing business in
                                          the State of Arizona  as  SOUTHERN
                                          CALIFORNIA  PUBLIC POWER AUTHORITY
                                          ASSOCIATION

ATTEST:


______________________                    By:    _______________________________

Its:     _________________                Its:   _______________________________


                                     - 14 -

<PAGE>

                                        PUBLIC SERVICE COMPANY OF NEW MEXICO



                                        By:

                                        Its:



                                        EL PASO ELECTRIC COMPANY



                                        By:      _______________________________


                                        Its:



                                        SOUTHERN CALIFORNIA PUBLIC
                                        POWER AUTHORITY, doing business in
                                        the State of Arizona  as  SOUTHERN
                                        CALIFORNIA  PUBLIC POWER AUTHORITY
                                        ASSOCIATION

ATTEST:


/S/                                     By:      /S/

Its:     Asst. Secretary                Its:     President

                                     - 15 -

<PAGE>

STATE OF ARIZONA      )
                      ) ss.
County of Maricopa    )


         On this 21st day of November,  1985, before me, the undersigned  Notary
Public,  personally appeared Keith L. Turley who acknowledged  himself to be the
Chairman of the Board of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation,
and that as such  officer,  being  authorized  so to do,  executed the foregoing
instrument  for the  purposes  therein  contained  by  signing  the  name of the
corporation by himself as such Chief Executive Officer.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                            /S/
                                            Notary Public


My commission expires:


    April 9, 1989


                                     - 16 -

<PAGE>

STATE OF ARIZONA          )
                          ) ss.
County of Maricopa        )


         On this 8th day of November,  1985,  before me, the undersigned  Notary
Public,  personally  appeared  John R. Lassen and Paul D. Rice who  acknowledged
themselves to be the President and Secretary of SALT RIVER PROJECT  AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT,  an Arizona agricultural  improvement  district,
and  that  they  as such  officers,  being  authorized  so to do,  executed  the
foregoing  instrument for the purposes therein  contained by signing the name of
the district by themselves as such President and Secretary.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                            /S/ Don E. Smith
                                            Notary Public



My commission expires:


     May 3, 1987

                                     - 17 -

<PAGE>

STATE OF CALIFORNIA           )
                              )ss.
County of Los Angeles         )


         On this 21st day of November,  1985, before me, the undersigned  Notary
Public,  personally  appeared /S/ who acknowledged  himself to be the Exec. Vice
President of SOUTHERN CALIFORNIA EDISON COMPANY, a California  corporation,  and
that  as  such  officer,  being  authorized  so to do,  executed  the  foregoing
instrument  for the  purposes  therein  contained  by  signing  the  name of the
corporation by himself as such Exec. Vice President.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                            /S/ Vera M Manley
                                            Notary Public



My commission expires:


    July 11, 1987


                                     - 18 -

<PAGE>



STATE OF NEW MEXICO )
                    ) ss.
County of Bernalillo)


         On this 31st day of October,  1985,  before me, the undersigned  Notary
Public,  personally  appeared J. L. Wilkins who  acknowledged  himself to be the
Senior Vice  President  of PUBLIC  SERVICE  COMPANY OF NEW MEXICO,  a New Mexico
corporation,  and that as such officer,  being authorized so to do, executed the
foregoing  instrument for the purposes therein  contained by signing the name of
the corporation by himself as such Senior Vice President.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                            /S/ Sherry Leeson
                                            Notary Public



My commission expires:


     July 1, 1988


                                     - 19 -

<PAGE>

STATE OF TEXAS         )
                       ) ss.
County of El Paso      )


         On this 1st day of November,  1985,  before me, the undersigned  Notary
Public,  personally  appeared /S/ R. E. York who acknowledged  himself to be the
Sr. Vice Pres of EL PASO ELECTRIC COMPANY, a Texas corporation, and that as such
officer,  being  authorized so to do, executed the foregoing  instrument for the
purposes therein  contained by signing the name of the corporation by himself as
such Sr. Vice Pres.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                            /S/
                                            Notary Public



My commission expires:


      July 3, 89


                                     - 20 -

<PAGE>


STATE OF CALIFORNIA     )
                        )ss.
County of Los Angeles   )


         On this 6th day of November,  1985,  before me, the undersigned  Notary
Public,  personally  appeared Fred Kran and Charles W. Montoya who  acknowledged
themselves to be the Pres. and Assis.  Sec of SOUTHERN  CALIFORNIA  PUBLIC POWER
AUTHORITY (doing business in the State of Arizona as SOUTHERN  CALIFORNIA PUBLIC
POWER AUTHORITY ASSOCIATION), a California joint powers agency, and that they as
such officers,  being authorized so to do, executed the foregoing instrument for
the purposes  therein  contained by signing the name of the agency by themselves
as such Pres and Assis. Sec .


         IN WITNESS WHEREOF, I have hereunto set my hand and official seal.



                                            /S/ Raul A. Mora
                                            Notary Public



My commission expires:


    July 27, 1988



                                     - 21 -
<PAGE>


                                 EXHIBIT 10.8.8



<PAGE>

                             AMENDMENT NO. 11 TO THE
                          ARIZONA NUCLEAR POWER PROJECT
                             PARTICIPATION AGREEMENT


                          APS Contract No.: 4172-419.00



Pursuant  to  Section 4 herein,  this  Amendment  No. 11 has been filed with the
Nuclear  Regulatory  Commission and became effective on the 10th day of January,
1987.


June 13, 1986


(0592A)

<PAGE>



                             AMENDMENT NO. 11 TO THE
                          ARIZONA NUCLEAR POWER PROJECT
                             PARTICIPATION AGREEMENT

 1.      PARTIES:
         The  parties to this  Amendment  No. 11 to the  Arizona  Nuclear  Power
         Project Participation Agreement,  hereinafter referred to as "Amendment
         No. 11", are: ARIZONA PUBLIC SERVICE COMPANY,  a corporation  organized
         and  existing  under and by virtue of the laws of the State of Arizona,
         hereinafter  referred to as "Arizona";  SALT RIVER PROJECT AGRICULTURAL
         IMPROVEMENT AND POWER DISTRICT,  an agricultural  improvement  district
         organized and existing  under and by virtue of the laws of the State of
         Arizona,  hereinafter  referred to as " Salt River  Project";  SOUTHERN
         CALIFORNIA EDISON COMPANY,  a corporation  organized and existing under
         and by  virtue  of the  laws of the  State of  California,  hereinafter
         referred  to as  "Edison";  PUBLIC  SERVICE  COMPANY OF NEW  MEXICO,  a
         corporation  organized and existing  under and by virtue of the laws of
         the State of New  Mexico,  hereinafter  referred  to as "PNM";  EL PASO
         ELECTRIC  COMPANY,  a corporation  organized and existing  under and by
         virtue of the laws of the State of Texas,  hereinafter  referred  to as
         "El Paso";  SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY,  a joint powers
         agency  organized  and existing  under and by virtue of the laws of the
         State of California, doing business in the State of Arizona as SOUTHERN
         CALIFORNIA PUBLIC POWER AUTHORITY ASSOCIATION,  hereinafter referred to
         as "SCPPA"; and

                                      - 1 -

<PAGE>

         DEPARTMENT  OF WATER AND POWER OF THE CITY OF LOS ANGELES,  a municipal
         corporation  organized and existing  under and by virtue of the laws of
         the State of California, hereinafter referred to as "LADWP".

 2.      RECITALS:
         2.1      Arizona,  Salt River Project,  Edison,  PNM, El Paso and SCPPA
                  are parties to a certain  agreement  entitled  Arizona Nuclear
                  Power Project Participation Agreement,  dated as of August 23,
                  1973,  as amended by Amendment  No. 1., dated as of January 1,
                  1974,  Amendment No. 2, dated as of August 28, 1975, Amendment
                  No. 3, dated as of July 22, 1976, Amendment No. 4, dated as of
                  December  15, 1977,  Amendment  No. 5, dated as of December 5,
                  1979,  Amendment  No.  6,  dated  as of  September  28,  1981,
                  Amendment  No. 7, dated as of March 4, 1982,  Amendment No. 8,
                  dated as of June 17, 1983,  Amendment  No. 9, dated as of June
                  12, 1984, and Amendment No. 10, dated as of November 21, 1985,
                  hereinafter referred to as the "Participation  Agreement",  as
                  so amended.

         2.2      By this Amendment No. 11, the Participants desire to amend the
                  Participation   Agreement   in  order  to   provide   for  the
                  determination of administrative and general expenses regarding
                  Start-Up  and  Pre-Operation  Costs as agreed to in the letter
                  entitled  "Letter of Understanding  Concerning  Administrative
                  and General  Expense  Charged to Arizona Nuclear Power Project
                  

                                      - 2 -

<PAGE>



                  Start-Up and Pre-Operation Expenses", hereinafter referred  to
                  as "Letter of Understanding", which became effective February
                  21, 1985.
         2.3      Pursuant  to  Items  D.1,   D.2  and  D.3  of  the  Letter  of
                  Understanding, the Participants, based upon the recommendation
                  of  the  Auditing  Committee,   have  determined  that  it  is
                  desirable  to  implement  by this  Amendment  No.  11  certain
                  changes to the  formulas for  determining  the  Operation  and
                  Maintenance  A & G  Ratio,  the O & M Ratio  and  Construction
                  Ratio, and the Capital A & G Ratio.
         2.4      Pursuant to the Salt River  Project - Los  Angeles  Palo Verde
                  Station Assignment  Agreement,  dated January 29, 1986, by and
                  between  Salt River  Project and LADWP,  on January 29,  1986,
                  Salt  River   Project,   pursuant  to  Section   15.3  of  the
                  Participation  Agreement,  assigned and  transferred to LADWP,
                  among other  things,  an undivided  5.7%  interest in the Palo
                  Verde Nuclear Generating Station and in the Project Agreements
                  related thereto, and a 5.7% Generation Entitlement Share under
                  the Participation  Agreement (all collectively  referred to as
                  "LADWP's Palo Verde  Interest")  and LADWP pursuant to Section
                  15.5  of  the   Participation   Agreement  has  accepted  said
                  assignment and transfer and has become, and assumed the status
                  and  obligations  of, a Participant  in the Palo Verde Nuclear
                  Generating  Station  to  the  extent  of  LADWP's  Palo  Verde
                  Interest.


                                      - 3 -

<PAGE>

 3.      AGREEMENT:
         In  consideration  of  the  terms  and  conditions  contained  in  this
         Amendment No. 11, the parties agree as follows:
 
4.      EFFECTIVE DATE:
         This  Amendment  No. 11 shall become  effective 10 days  following  the
         filing of this Amendment No. 11 with the Nuclear Regulatory Commission,
         and the effective  date shall be as indicated on the cover page to this
         Amendment No. 11. This Amendment No. 11 shall supersede in its entirety
         the Letter of Understanding.

 5.      AMENDMENT NO. 11 TO THE PARTICIPATION AGREEMENT:
         5.1      A new Section 3.8A is hereby added to read as follows:
                  "3.8A    Beginning of Generating  Unit Fuel Load:  The date on
                           which  the  first  Fuel  Assembly  is  placed  in the
                           reactor vessel of each Generating Unit."

         5.2      A new Section 3.8B is hereby added to read as follows:
                  "3.8B    Beginning of Generating  Unit Precore Hot  Functional
                           Test: The date on which information is first recorded
                           in the Hot  Functional  Director's Log of Information
                           for each  Generating  Unit in accordance with Section
                           8.1 of the PVNGS Manual, Procedure No. 90HF-1ZZ01."



                                      - 4 -

<PAGE>

         5.3      Section 3.23 is hereby deleted in its entirety and a new
                  Section 3.23 is hereby added to read as follows:

                  "3.23    FPC   Accounts:   The   Federal   Energy   Regulatory
                           ------------  Commission's  (FERC) "Uniform System of
                           Accounts   Prescribed   for  Public   Utilities   and
                           Licensees (Class A and Class B)", in effect as of the
                           date of  this  Participation  Agreement,  and as such
                           system  of  accounts  may be in  effect  from time to
                           time.  References in this Participation  Agreement to
                           any specific  FPC Account  number shall mean the FERC
                           Account  number in effect as of the effective date of
                           this  Participation  Agreement or any successor  FERC
                           Account."

         5.4      Section 3.28 is hereby deleted in its entirety and a new
                  Section 3.28 is hereby added to read as follows:

                  "3.28    Generation    Entitlement   Share:   The   percentage
                           entitlement  of each  Participant  to the Net  Energy
                           Generation   and   to   the   Available    Generating
                           Capability. Each Participant's percentage entitlement
                           is as follows:


                                      - 5 -

<PAGE>

                  2.28.1       Arizona              =   29.1     percent
                  3.28.2       Salt River Project   =   17.49    percent
                  3.28.3       Edison               =   15.9     percent
                  3.28.4       PNM                  =   10.2     percent
                  3.28.5       El Paso              =   15.8     percent
                  3.28.6       SCPPA                =    5.91    percent
                  3.28.7       LADWP                =    5.7     percent"

         5.5      A new Section 3.45A is hereby added to read as follows:

                  "3.45A   Power  Ascension  Level 50%: That point at which each
                           Generating  Unit is  certified  at the fifty  percent
                           (50%) "Reliable  (Power Level) Power Operation During
                           Power Ascension Testing" level by the Engineering and
                           Operating  Committee  pursuant to the Engineering and
                           Operating Committee's Procedure No. 7."

         5.6      A new Section 3.53A is hereby added to read as follows:
                  "3.53A   Start-Up  and  Pre-Operation   Costs:  The  costs  of
                           start-up  and  pre-operation  of ANPP as described in
                           Section 10A."

         5.7      A new Section 10A is hereby added to read as follows:
                  "10A.    START-UP AND PRE-OPERATION COSTS:
                           10A.1    For purposes of computing  the allowance for
                                    start-up  and  pre-operation  administrative
                                    and general expenses beginning on October 1,
                                    1984, and through the Date of Firm Operation


                                      - 6 -

<PAGE>



                                    of each respective Generating Unit, Start-Up
                                    and  Pre-  Operation  Costs of ANPP for each
                                    Generating  Unit,  including  its one- third
                                    share of common facilities, shall consist of
                                    all payments made and  obligations  incurred
                                    by the  Project  Manager  and the  Operating
                                    Agent as follows:

                                    10A.1.1 Costs of  pre-operational  Operating
                                    Work,  as such  costs are  described  within
                                    Appendix G, Section G.7.1;

                                      - 7 -

<PAGE>

                                    10A.1.2  Costs  of  training  personnel  for
                                    Operating  Work, as such  training  expenses
                                    are  described  within  Appendix G, Sections
                                    G.7.3  and  G.7.4;  
 
                                    10A.1.3   Costs   of   all   operation   and
                                    maintenance  performed  by  any  contractor.

                                    10A.2 Start-Up and Pre-Operation Costs shall
                                    not receive an allowance for  administrative
                                    and  general  expenses  except  as  provided
                                    pursuant to Appendix L, attached  hereto and
                                    made a part hereof."

         5.8      A new Section 38.1.7 is hereby added to read as follows:
                  "38.1.7  Department of Water and Power
                           of the City of Los Angeles
                           c/o Chief Electric Engineer and
                           Assistant Manager
                           P. O. Box 111
                           111 North Hope Street
                           Los Angeles, California  90015"



                                      - 8 -

<PAGE>

         5.9      Section  E.6 of Appendix E is hereby  deleted in its  entirety
                  and a new Section E.6 is hereby added to read as follows:

                  "E.6     Operation and Maintenance A & G Ratio:

                            E.6.1   The  Operation  and  Maintenance A & G Ratio
                                    shall be the percentage computed by dividing
                                    (i) the sum of (a) the total amounts charged
                                    to FPC  Accounts 920 and 921  multiplied  by
                                    the O & M Ratio computed in accordance  with
                                    Section  E.8 hereof,  (b) the total  amounts
                                    directly   chargeable   to  ANPP)   and  935
                                    (formerly  932),  (c)  the  product  of  the
                                    portion of labor charges included within (a)
                                    and (b) above  multiplied by the Payroll Tax
                                    Ratio  computed in  accordance  with Section
                                    E.4  hereof,  (d) the  product  of the labor
                                    charges  included  within (a) the product of
                                    the labor  charges  included  within (a) and
                                    (b)  above  multiplied  by the  Compensation
                                    Insurance  Ratio computed in accordance with
                                    Section E.7 hereof, less (7) the one percent
                                    (1%)  portion  of  the   administrative  and
                                    general expenses charged to FPC Accounts 920
                                    and 921 allocable to contract operation and

                                      - 9 -

<PAGE>

                                    maintenance  by (ii) the direct  labor (i.e.
                                    total  labor less labor  charged to clearing
                                    accounts)   chargeable   to  operation   and
                                    maintenance  accounts  (exclusive of A & G),
                                    to   include   O  &  M   labor   billed   to
                                    Participants   and  the  labor   portion  of
                                    Start-Up and Pre-Operation  Costs subject to
                                    the  Operation  and  Maintenance A & G Ratio
                                    pursuant  to Section  L.1.3,  and to exclude
                                    the   labor    portion   of   Start-Up   and
                                    Pre-Operation    Costs    subject   to   the
                                    construction   administrative   and  general
                                    expense   percentage  of  one  percent  (1%)
                                    pursuant to Section L.1.3.

                            E.6.2   The following  example sets forth the method
                                    to be  employed  by the  Operating  Agent to
                                    determine the Operation and  Maintenance A &
                                    G Ratio:

                                     - 10 -

<PAGE>

                               EXAMPLE COMPUTATION
                    OF OPERATION AND MAINTENANCE A & G RATIO
                (Based on the Operating Agent's 1984 Experience)


                                                       Labor           Total
Administrative and General Salaries
 charged to FPC Account 920                         $ 17,408,542  $  17,406,779
Office Supplies and Expenses
  charged to FPC Account 921                                          7,208,084
                                                    ------------   ------------
Total                                               $ 17,408,542   $ 24,614,863
                                                    ============   ============
Total FPC Accounts 920 and 921, 
  multiplied by O & M Ratio @ 68.481%               $ 11,921,544   $ 16,856,504
FPC Account 923                                                         919,166
FPC Account 932 (presently 935)                        1,555,913      3,127,002
                                                    ------------   ------------
Subtotal                                            $ 13,477,457   $ 20,902,672
                                                    ============   ============
Payroll Taxes @ 7.126%                                                  960,404
Pensions and Benefits @ 13.512%                                       1,821,074
Compensation Insurance @ 0.451%                                          60,783
Less that 1% portion of A & G allocable to
  Contract Operation and Maintenance                                  1,483,314
Total administrative and general expenses                          ------------
  allocable to operations and maintenance                          $ 22,261,619
                                                                   ============

Labor Base
Direct labor charged to system operations
 and maintenance, as further defined in
  Section E.6.1                                                     148,557,953
Less direct labor charged to administrative
  and general expenses (FPC 920-931 and 935)                         13,160,635
                                                                   ------------ 
Labor Base                                                         $135,397,318
                                                                   ============
Operation and Maintenance
  A & G Ratio for 1984 $22,261,619 / $135,397,318 = 16.442%

Note:  All labor figures include loading for allowed time."

                                     - 11 -

<PAGE>

         5.10     Section  E.8 of Appendix E is hereby  deleted in its  entirety
                  and a new Section E.8 is hereby added to read as follows:

                  "E.8     O & M Ratio and Construction Ratio:
                           E.8.1    O & M Ratio set forth below shall be applied
                                    to the amounts  chargeable  to FPC  Accounts
                                    920 and 921 for the  purpose of  determining
                                    one  component  in  the  computation  of the
                                    Operation  and  Maintenance  A & G Ratio  as
                                    provided in Section E.6 hereof.

                                    O & M Ratio =              O
                                                               L

                                    Where:  O = The Operating Agent's direct
                                                labor  chargeable  to  operation
                                                and     maintenance     accounts
                                                (exclusive of A & G), to include
                                                O   &   M   labor    billed   to
                                                Participants   and   the   labor
                                                portion  of  Start-Up  and  Pre-
                                                Operation  Costs  subject to the
                                                Operation and  Maintenance A & G
                                                Ratio pursuant to Section

                                     - 12 -

<PAGE>



                                                L.1.3,  and to exclude the labor
                                                portion    of    Start-Up    and
                                                Pre-Operation  Costs  subject to
                                                the construction  administrative
                                                and general  expense  percentage
                                                of one percent (1%)  pursuant to
                                                Section L.1.3.

                                            L = The Operating Agent's direct
                                                labor   distributed,   including
                                                accruals,   less  direct   labor
                                                chargeable  to FPC  Accounts 920
                                                through 931 and 935.

                           E.8.2    The Construction Ratio set forth below shall
                                    be applied to the amounts  chargeable to FPC
                                    Accounts  920 and 921  for  the  purpose  of
                                    determining one component in the computation
                                    of the  Capital A & G Ratio as  provided  in
                                    Section E.9 hereof.

                                    Construction Ratio = C
                                                         -
                                                         L


                                     - 13 -

<PAGE>

                     Where:            C =      The Operating Agent's
                                                direct  labor  in   construction
                                                accounts  (exclusive  of A & G),
                                                to  include  construction  labor
                                                billed     to      Participants,
                                                including  the labor  portion of
                                                Start-Up   and  Pre-   Operation
                                                Costs     subject     to     the
                                                construction  administrative and
                                                general  expense  percentage  of
                                                one  percent  (1%)  pursuant  to
                                                Section L.1.3, and excluding the
                                                labor  portion of  Start-Up  and
                                                Pre-Operation  Costs  subject to
                                                the Operation and  Maintenance A
                                                & G Ratio  pursuant  to  Section
                                                L.1.3.


                                     - 14 -

<PAGE>



                                     L   =      The Operating Agent's direct
                                                labor   distributed,   including
                                                accruals,   less  direct   labor
                                                chargeable  to FPC  Accounts 920
                                                through 931 and 935.

                           E.8.3            Estimated  and  actual  O & M Ratios
                                            and  Construction  Ratios  shall  be
                                            determined, adjusted and used in the
                                            manner  set  forth in  Section  E.10
                                            hereof.
                           E.8.4            The following example sets forth the
                                            method   to  be   employed   by  the
                                            Operating Agent to determine the O &
                                            M Ratio and the Construction Ratio:


                                     - 15 -

<PAGE>

                               EXAMPLE COMPUTATION
                       O & M RATIO AND CONSTRUCTION RATIO
                (Based on the Operating Agent's 1984 Experience)



Total direct labor in operation and maintenance
  Accounts                                         $   148,557,953
Less:  direct labor charged to administrative
  and general expense FPC Accounts 920
  through 931, inclusive and FPC Account 935            13,160,635
                                                      -------------
Net labor in O & M Accounts                        $   135,397,318
Total direct labor charged to General Ledger
  Accounts                                               6,255,648
Total direct labor in construction Accounts
  (exclusive of A & G)                                  56,061,726
                                                      -------------
     Total Labor Base                              $   197,714,692
Ratio of net O & M labor to direct labor           $   135,397,318 = 68.481%
                                                      -------------
                                                   $   197,714,692
Ratio of construction labor to direct labor        $    56,061,726 = 28.355%
                                                      -------------
                                                   $  197,714,692

Note:  All labor figures include loading for allowed time."


         5.11     Section  E.9 of Appendix E is hereby  deleted in its  entirety
                  and a new Section E.9 is hereby added to read as follows:

                  "E.9     Capital A & G Ratio:
                           E.9.1    The  Capital  A  &  G  Ratio  shall  be  the
                                    percentage  computed  by  dividing  (i)  the
                                    amounts  equal  to (A)  the  sum of (a)  the
                                    total  amounts  charged to FPC  Accounts 920
                                    and 921 multiplied by the Construction Ratio
                                    computed in accordance with Section

                                     - 16 -

<PAGE>

                                    E.8  hereof,  and  (b)  the  product  of the
                                    portion  of labor  charges  included  in (a)
                                    above  multiplied  by the sum of the Payroll
                                    Tax  Ratio,   the  Benefits  Ratio  and  the
                                    Compensation  Insurance  Ratio  less (B) the
                                    one percent (1%)  portion of  administrative
                                    and general expenses charged to FPC Accounts
                                    920   and   921    allocable   to   contract
                                    construction  (including the  administrative
                                    and  general   expenses  (i)   recovered  on
                                    Start-Up and Pre-Operation  Costs subject to
                                    the construction  administrative and general
                                    expense   percentage  of  one  percent  (1%)
                                    pursuant to Section L.1.3, (ii) recovered on
                                    ANPP   construction   expenses,   and  (iii)
                                    allocable to other contract construction) by
                                    (ii)  the  direct   labor  in   construction
                                    accounts  (exclusive  of A & G), to  include
                                    construction  labor billed to  Participants,
                                    excluding  the labor  portion of Start-Up ad
                                    Pre-Operation Costs subject to the Operation
                                    and  Maintenance  A & G pursuant  to Section
                                    L.1.3,    less   the   labor    portion   of
                                    construction   expenses  to  which  the  one
                                    percent (1%) portion of

                                     - 17 -

<PAGE>

                                    administrative   and  general   expenses  is
                                    applicable,  and less the labor  portion  of
                                    Start-Up and Pre-Operation  Costs subject to
                                    the construction  administrative and general
                                    expense   percentage  of  one  percent  (1%)
                                    pursuant to Section L.1.3.

                           E.9.2    The following  example sets forth the method
                                    to be  employed  by the  Operating  Agent to
                                    determine the Capital A & G Ratio:

                   EXAMPLE COMPUTATION OF CAPITAL A & G RATIO
                (Based on the Operating Agent's 1984 Experience)


                                                    Labor             Total
Administrative and General Salaries
  charged to FPC Account 920                     $ 17,408,542    $  17,406,779
Office Supplies and Expenses
  charged to FPC Account 921                                         7,208,084
                                                 ------------    -------------
Total                                            $ 17,408,542    $  24,614,863
                                                 ============    =============
Total FPC Accounts 920 and 921, multiplied
  by Construction Ratio @ 28.355%                $  4,936,192 $      6,979,544
                                                 ============
Payroll Taxes @ 7.126%                                                 351,753
Pensions and Benefits @ 13.512%                                        666,978
Compensation Insurance @ 0.451%                                         22,262
Less that 1% portion of A & G  allocable  
  to Contract  Construction,  as further
  defined in
  Section E.9.1                                                      3,634,919
                                                                 -------------
Total A & G Expense allocable to Construction                    $  4, 385,618
                                                                 =============
Construction Direct Labor                                           56,061,726


                                     - 18 -

<PAGE>


Compensation Insurance @ 0.451%                                         22,262
Less the labor portion of Construction Work,
  Start-Up and Pre-Operation Costs subject
  to the construction administrative and                            13,496,824
  general expense percentage of one percent
  (1%)
Total Construction Direct Labor Base                              $ 42,564,902
                                                                  ============
Capital A & G Ratio for 1984 $4,385,618 / $42,564,902 =                10.303%
                                                                       =======

Note:  All labor figures include loading for allowed time."

         5.12     A new Appendix L is hereby added to read as attached.
         5.13     Except as provided herein, the Participation Agreement,
                  as amended by this Amendment No. 11, shall remain in full
                  force and effect.

 6.      EXECUTION BY COUNTERPARTS:
         This  Amendment  No. 11 may be executed in any number of  counterparts,
         and upon execution by all Participants, each executed counterpart shall
         have the same force and effect as an original  instrument and as if all
         Participants had signed the same instrument. Any signature page of this
         Amendment No. 11 may be detached from any counterpart of this Amendment
         No. 11 without  impairing the legal effect of any  signatures  thereon,
         and may be attached to another  counterpart  of this  Amendment  No. 11
         identical  in  form  hereto  but  having  attached  to it one  or  more
         signature pages.
                                         /
                                         /
                                         /
                                         /

                                     - 19 -

<PAGE>

 7.      SIGNATURE CLAUSE:
         The  signatories  hereto  represent  that they have been  appropriately
         authorized  to enter into this  Amendment No. 11 on behalf of the party
         for whom they sign.  This Amendment No. 11 is hereby executed as of the
         8th day of September, 1986.

                                        ARIZONA PUBLIC SERVICE COMPANY



                                        By:      /S/

                                        Its:     Executive Vice President



                                        SALT RIVER PROJECT AGRICULTURAL
                                        IMPROVEMENT AND POWER DISTRICT

ATTEST AND COUNTERSIGN:


                                        By:

Its:                                    Its:



                                        SOUTHERN CALIFORNIA EDISON COMPANY



                                        By:

                                        Its:

                                        /
                                        /
                                        /
                                        /
                                        /
                                        /
                                        /


                                     - 20 -

<PAGE>

 7.      SIGNATURE CLAUSE:

         The signatories hereto represent that they have been
         appropriately  authorized to enter into this Amendment No. 11 on behalf
         of the  party  for whom  they  sign.  This  Amendment  No. 11 is hereby
         executed as of the day of , 1986.

                                       ARIZONA PUBLIC SERVICE COMPANY



                                        By:

                                        Its:



                                        SALT RIVER PROJECT AGRICULTURAL
                                        IMPROVEMENT AND POWER DISTRICT

ATTEST AND COUNTERSIGN:


                                        By:      /S/

Its:     Secretary                      Its:     President



                                        SOUTHERN CALIFORNIA EDISON COMPANY



                                        By:

                                        Its:

                                         /
                                         /
                                         /
                                         /
                                         /
                                         /
                                         /


                                     - 20 -

<PAGE>

 7.      SIGNATURE CLAUSE:

         The  signatories  hereto  represent  that they have been  appropirately
         authorized  to enter into this  Amendment No. 11 on behalf of the party
         for whom they sign.  This Amendment No. 11 is hereby executed as of the
         day of , 1986.

                                       ARIZONA PUBLIC SERVICE COMPANY



                                        By:

                                        Its:



                                        SALT RIVER PROJECT AGRICULTURAL
                                        IMPROVEMENT AND POWER DISTRICT

ATTEST AND COUNTERSIGN:


                                        By:

Its:                                    Its:



                                        SOUTHERN CALIFORNIA EDISON COMPANY



                                        By:      /S/

                                        Its:     Vice President

                                            /
                                            /
                                            /
                                            /
                                            /
                                            /
                                            /


                                     - 20 -

<PAGE>

                                        PUBLIC SERVICE COMPANY OF NEW MEXICO



                                        By:      /S/ J. L. Wilkins

                                        Its:     Senior Vice President
                                                    Power Supply



                                        EL PASO ELECTRIC COMPANY



                                        By:

                                        Its:



                                        SOUTHERN CALIFORNIA PUBLIC POWER
                                        AUTHORITY, doing business in the
                                        State of Arizona as SOUTHERN
                                        CALIFORNIA PUBLIC POWER AUTHORITY
                                        ASSOCIATION



ATTEST:

                                        By:

Its:                                    Its:

                                        DEPARTMENT OF WATER AND POWER
                                        OF THE CITY OF LOS ANGELES

                                        BY

                                        BOARD OF WATER AND POWER
                                        COMMISSIONERS OF THE CITY OF
                                        LOS ANGELES

                                        By:      _______________________________

                                        Its:     _______________________________

                                        and      _______________________________

                                        Its:     _______________________________


                                     - 21 -

<PAGE>


                                        PUBLIC SERVICE COMPANY OF NEW MEXICO



                                        By:

                                        Its:



                                        EL PASO ELECTRIC COMPANY



                                        By:      /S/

                                        Its:     Vice President



                                        SOUTHERN CALIFORNIA PUBLIC POWER
                                        AUTHORITY, doing business in the
                                        State of Arizona as SOUTHERN
                                        CALIFORNIA PUBLIC POWER AUTHORITY
                                        ASSOCIATION



ATTEST:

                                        By:

Its:                                    Its:

                                        DEPARTMENT OF WATER AND POWER
                                        OF THE CITY OF LOS ANGELES

                                        BY

                                        BOARD OF WATER AND POWER
                                        COMMISSIONERS OF THE CITY OF
                                        LOS ANGELES

                                        By:      _______________________________

                                        Its:     _______________________________

                                        and      _______________________________

                                        Its:     _______________________________


                                     - 21 -

<PAGE>

                                        PUBLIC SERVICE COMPANY OF NEW MEXICO



                                        By:

                                        Its:



                                        EL PASO ELECTRIC COMPANY



                                        By:

                                        Its:



                                        SOUTHERN CALIFORNIA PUBLIC POWER
                                        AUTHORITY, doing business in the
                                        State of Arizona as SOUTHERN
                                        CALIFORNIA PUBLIC POWER AUTHORITY
                                        ASSOCIATION



ATTEST:

/S/                                     By:      /S/

Its:     Asst. Secretary                Its:     President



                                         DEPARTMENT OF WATER AND POWER
                                         OF THE CITY OF LOS ANGELES

                                         By

                                         BOARD OF WATER AND POWER COMMISSIONERS
                                         OF THE CITY OF LOS ANGELES

                                         By:      _____________________________

                                         and      Secretary


                                     - 21 -

<PAGE>

                                         PUBLIC SERVICE COMPANY OF NEW MEXICO



                                         By:

                                         Its:



                                         EL PASO ELECTRIC COMPANY



                                         By:

                                         Its:



                                         SOUTHERN CALIFORNIA PUBLIC POWER
                                         AUTHORITY, doing business in the
                                         State of Arizona as SOUTHERN
                                         CALIFORNIA PUBLIC POWER AUTHORITY
                                         ASSOCIATION



ATTEST:

                                         By:

I                                        Its:



                                          DEPARTMENT OF WATER AND POWER
                                          OF THE CITY OF LOS ANGELES

                                          By:      /S/


                                     - 21 -

<PAGE>



STATE OF ARIZONA                    )
                                    ) ss.
County of Maricopa                  )

                  On this 8th day of September, 1986, before me, the undersigned
Notary  Public,  personally  appeared  /S/ who  acknowledged  himself  to be the
Executive  Vice  President  of  ARIZONA  PUBLIC  SERVICE  COMPANY,   an  Arizona
corporation,  and that he as such officer,  being  authorized so to do, executed
the foregoing  instrument for the purposes therein contained by signing the name
of the company by himself as such Executive Vice President.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                                     /S/
                                                     Notary Public


My commission expires:

    April 6, 1987



STATE OF ARIZONA                    )
                                    ) ss.
County of Maricopa                  )

                  On this day of ,  1986,  before  me,  the  undersigned  Notary
Public,   personally  appeared  and  who  acknowledged  themselves  to  the  and
________________________  of SALT RIVER  PROJECT  AGRICULTURAL  IMPROVEMENT  AND
POWER DISTRICT, an Arizona agricultural  improvement district,  and that they as
such officers,  being authorized so to do, executed the foregoing instrument for
the purposes therein  contained by signing the name of the company by themselves
as such __________________ and __________________.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.


                                                     Notary Public


My commission expires:

                                                     /

                                                     /


                                     - 22 -

<PAGE>



STATE OF ARIZONA                    )
                                    ) ss.
County of Maricopa                  )

                  On this day of ,  1986,  before  me,  the  undersigned  Notary
Public,  personally  appeared and who acknowledged  himself to be the of ARIZONA
PUBLIC SERVICE  COMPANY,  an Arizona  corporation,  and that he as such officer,
being  authorized so to do,  executed the foregoing  instrument for the purposes
therein  contained  by  signing  the  name of the  company  by  himself  as such
_____________.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.


                                                     Notary Public


My commission expires:





STATE OF ARIZONA                    )
                                    ) ss.
County of Maricopa                  )

                  On this 29th day of July,  1986,  before me,  the  undersigned
Notary  Public,  personally  appeared  /S/ John R.  Lassen  and Paul D. Rice who
acknowledged  themselves  to the  President  and Secretary of SALT RIVER PROJECT
AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an Arizona agricultural improvement
district,  and that they as such officers,  being  authorized so to do, executed
the foregoing  instrument for the purposes therein contained by signing the name
of the company by themselves as such and
 

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                                     /S/
                                                     Notary Public


My commission expires:

    April 29, 1987                                   /

                                                     /

                                     - 22 -

<PAGE>



STATE OF CALIFORNIA                         )
                                            ) ss.
County of Los Angeles                       )

                  On this 26th day of August,  1986,  before me, the undersigned
Notary Public,  personally appeared /S/ G. J. Bjorklund who acknowledged himself
to the Vice  President  of SOUTHERN  CALIFORNIA  EDISON  COMPANY,  a  California
corporation,  and that he as such officer,  being  authorized so to do, executed
the foregoing  instrument for the purposes therein contained by signing the name
of the company by himself as such Vice President.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                                     /S/ Vera Montemayor
                                                     Notary Public

My commission expires:

    Aug. 19, 1987



STATE OF NEW MEXICO                         )
                                            ) ss.
County of Bernalillo                        )

                  On this day of ,  1986,  before  me,  the  undersigned  Notary
Public, personally appeared who acknowledged himself to be the of PUBLIC SERVICE
COMPANY OF NEW MEXICO,  a New Mexico  corporation,  and that he as such officer,
being  authorized so to do,  executed the foregoing  instrument for the purposes
therein  contained  by  signing  the  name of the  company  by  himself  as such
_____________.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.


                                                     Notary Public


My commission expires:


                                                     /

                                                     /

                                                     /


                                     - 23 -

<PAGE>



STATE OF CALIFORNIA                         )
                                            ) ss.
County of Los Angeles                       )

                  On this day of ,  1986,  before  me,  the  undersigned  Notary
Public,  personally  appeared  who  acknowledged  himself to be the of  SOUTHERN
CALIFORNIA  EDISON  COMPANY,  a  California  corporation,  and  that  he as such
officer,  being  authorized so to do, executed the foregoing  instrument for the
purposes therein contained by signing the name of the company by himself as such
_____________.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.


                                                     Notary Public

My commission expires:





STATE OF NEW MEXICO                         )
                                            ) ss.
County of Bernalillo                        )

                  On  this  25th  day  of  September,   1986,   before  me,  the
undersigned   Notary  Public,   personally   appeared  /S/  J.  L.  Wilkins  who
acknowledged  himself to be the Senior Vice President of PUBLIC SERVICE  COMPANY
OF NEW MEXICO,  a New Mexico  corporation,  and that he as such  officer,  being
authorized so to do, executed the foregoing  instrument for the purposes therein
contained  by signing  the name of the  company by himself as such  Senior  Vice
President.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                                     /S/ Sherry Leeson
                                                     Notary Public

My commission expires:

    July 1, 1988

                                                     /

                                                     /

                                                     /

                                     - 23 -

<PAGE>



STATE OF TEXAS                      )
                                    ) ss.
County of El Paso                   )

                  On this 18th day of July,  1986,  before me,  the  undersigned
Notary Public,  personally appeared /S/ J. E. Wasiak who acknowledged himself to
be the Vice President of EL PASO ELECTRIC COMPANY, a Texas corporation, and that
he as such officer, being authorized so to do, executed the foregoing instrument
for the purposes therein contained by signing the name of the company by himself
as such Vice President.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                                     /S/ Cecilia R. Jhea
                                                     Notary Public

My commission expires:

        7-3-89


STATE OF CALIFORNIA                         )
                                            ) ss.
County of Los Angeles                       )

                  On this day of ,  1986,  before  me,  the  undersigned  Notary
Public,  personally  appeared   __________________  and  __________________  who
acknowledged  themselves to be the  __________________ and __________________ of
SOUTHERN  CALIFORNIA  PUBLIC POWER  AUTHORITY,  (doing  business in the State of
Arizona as SOUTHERN CALIFORNIA POWER AUTHORITY ASSOCIATION),  a California joint
powers  agency,  and that  they as such  officers,  being  authorized  so to do,
executed the foregoing  instrument for the purposes therein contained by signing
the  name  of  the  company  by  themselves  as  such   __________________   and
__________________.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.


                                                     Notary Public

My commission expires:



                                                     /

                                                     /

                                     - 24 -

<PAGE>



STATE OF TEXAS                      )
                                    ) ss.
County of El Paso                   )

                  On this day of ,  1986,  before  me,  the  undersigned  Notary
Public,  personally  appeared  who  acknowledged  himself  to be the of EL  PASO
ELECTRIC  COMPANY,  a Texas  corporation,  and  that he as such  officer,  being
authorized so to do, executed the foregoing  instrument for the purposes therein
contained by signing the name of the company by himself as such .

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                                -------------------------------
                                                 Notary Public

My commission expires:





STATE OF CALIFORNIA                         )
                                            ) ss.
County of Los Angeles                       )

                  On this 30th day of July,  1986,  before me,  the  undersigned
Notary  Public,  personally  appeared  /S/ Gale A.  Drew,  and  Frank  Salas who
acknowledged  themselves  to be the  President  and Asst  Secretary  of SOUTHERN
CALIFORNIA  PUBLIC POWER  AUTHORITY  (doing  business in the State of Arizona as
SOUTHERN  CALIFORNIA  POWER AUTHORITY  ASSOCIATION),  a California  joint powers
agency, and that they as such officers,  being authorized so to do, executed the
foregoing  instrument for the purposes therein  contained by signing the name of
the company by themselves as such President and Asst Secretary.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.


                                                     Notary Public

My commission expires:



                                                     /

                                                     /

                                     - 24 -

<PAGE>



STATE OF CALIFORNIA                         )
                                            ) ss.
County of Los Angeles                       )

                  On this 29th day of October,  1986, before me, the undersigned
Notary Public, personally appeared /S/ Eldon A. Cotton, who acknowledged himself
to be the Assistant  Chief  Engineer - Power of DEPARTMENT OF WATER AND POWER OF
THE CITY OF LOS ANGELES, a California municipal corporation, and that he as such
officer,  being  authorized so to do, executed the foregoing  instrument for the
purposes therein contained by signing the name of the company by himself as such
Assistant Chief Engineer - Power.

                  IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                                     /S/ Sally Morrison Fick
                                                     Notary Public

My commission expires:

November 10. 1988

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /

                                                     /


                                     - 25 -

<PAGE>



                                   APPENDIX L
          START-UP AND PRE-OPERATION ADMINISTRATIVE AND GENERAL EXPENSE

L.1      Calculation of Start-Up and Pre-Operation A & G Expense
         L.1.1    For the period  from  October 1, 1984  through  completion  of
                  start-up   and   pre-operation   activities   for  ANPP,   the
                  administrative   and  general  expense  associated  with  such
                  activities for each Generating unit shall be determined by the
                  following formula: (An example calculation is shown in Exhibit
                  L-A.)  AGE =  [(SUPO)  x (OMF) x (OMAG)] + [(SUPO) x (1-OMF) x
                  (CFAG)] where:

                  AGE    = Monthly start-up and  pre-operation  administrative
                           and general expenses for each Generating Unit.

                  SUPO   = Monthly Start-Up and  Pre-Operation  Costs for each
                           Generating Unit.

                  OMF    = Percent  (expressed  as a  decimal)  of the  total
                           monthly  Start-Up  and  Pre-Operation  Costs for each
                           Generating  Unit to be allocated to the operation and
                           maintenance   administrative   and  general   expense
                           formula, as determined in Section L.1.3.

                  OMAG     =  Operation  and  maintenance   administrative   and
                           general expense percentages as determined and applied
                           in  Sections  E.1.7  and  E.1.9 of the  Participation
                           Agreement.


                                       L-1

<PAGE>



                  CFAG     =  Construction  administrative  and general  expense
                           percentage of one percent (1%) as applied pursuant to
                           Section D.1.14 of the Agreement.

         L.1.2             Start-Up  and  Pre-Operation  Costs  for ANPP  common
                           facilities   shall  be  allocated   by   apportioning
                           one-third  (1/3)  of  these  expenses  to  each  ANPP
                           Generating    Unit   prior   to    determining    the
                           administrative  and general  expense  associated with
                           each Generating Unit.

         L.1.3             To determine start-up and pre-operation
                           administrative  and general  expense (AGE) in Section
                           L.1.1 the monthly  total  Start-Up and  Pre-Operation
                           Costs for each ANPP  Generating  Unit,  including its
                           common facilities  share,  shall be allocated between
                           construction   and   operation   &   maintenance   in
                           accordance  with the benchmark  time period begins in
                           the  middle  of a month,  the  change  in  percentage
                           allocation   to   construction    and   operation   &
                           maintenance  expenses  shall  take place on the first
                           day of the calendar month following such benchmark.


                                       L-2

<PAGE>


       Benchmark Time Period                    Percent Allocation Between
                                                  Operation & Maintenance
                                                     and Construction
      for Each Generating Unit                         OMF/1-OMF)

   

   a.      10/1/84 to eight (8) months           25% O&M/75% Construction
           prior to Beginning of
           Generating Unit Precore Hot
           Functional Test.

   b.      Eight (8) months prior to             50% O&M/50% Construction
           Beginning of Generating Unit
           Pecore Hot Functional Test to
           Beginning of Generating Unit
           Pecore Hot Functional Test.

   c.      Beginning of Generating Unit          70% O&M/30% Construction
           Pecore Hot Functional Test to
           Beginning of Generating Unit
           Fuel Load.

   d.      Beginning of Generating Unit          90% O&M/10% Construction
           Fuel Load to satisfy
           completion of Power Ascension
           Level 50%

   e.      Satisfactory completion of           100% O&M
           Power Ascension Level 50% to
           completion of start-up and
           pre-operation.


L.2      Adjustments
         L.2.1    The benchmark  time periods in Items L.1.3a and L.1.3b require
                  an estimate of the  Beginning of  Generating  Unit Precore Hot
                  Functional Test for a Generating Unit.  Should the actual date
                  for the  Beginning of Generating  Unit Precore Hot  Functional
                  Test  for a  Generating  Unit  be  different  than  estimated,
                  adjustments shall be made to the amount of administrative  and
                  general  expense  actually  charged  based on the  appropriate
                  allocation of Start-Up and Pre-Operation Costs to construction
                  and operation & maintenance expenses.


                                       L-3

<PAGE>

         L.2.2    Amounts  of  administrative  and  general  expense  determined
                  pursuant to the Letter of Understanding for the period October
                  1, 1984  through  March,  1985 that  were  different  than the
                  amount actually paid for the same period have, pursuant to the
                  Letter of  Understanding  appeared  as a credit on the request
                  for  advancement  of  Operating  Funds for ANPP dated June 14,
                  1985, Request No. PVO-093.  Such expense  differences  accrued
                  interest at the rate from time to time  publicly  announced by
                  Citibank,  N. A., New York,  New York,  as its prime  interest
                  rate less two percent  (2%),  from the date of payment of such
                  difference   to  the  date  of  mailing  of  the  request  for
                  advancement  of  Operating   Funds.   Any  such  amounts  were
                  allocated  to  each   Participant   in  accordance   with  its
                  Generation  Entitlement  Share, and were clearly delineated on
                  the Operating  Agent's  requests for  advancement of Operating
                  Funds.

L.3      Credit to Future Requests for Advancement of Operating Funds
         for ANPP

         L.3.1    The  Operating  Agent  shall  credit  to future  requests  for
                  advancement  of  Operating  Funds,  thirteen  million  dollars
                  (13,000,000)  plus  interest,  determined  pursuant to Section
                  L.3.2 of this  Appendix  L,  for  administrative  and  general
                  expense charged to Start-Up and Pre-Operation Costs through

                                       L-4

<PAGE>
                  September  30,  1984.  Such credit will be  allocated  to each
                  Participant  in  accordance  with its  Generation  Entitlement
                  Share,  and is separate and in addition to any  adjustment  to
                  administrative and general expense necessitated by the routine
                  annual adjustment to the Operation and Maintenance A & G Ratio
                  pursuant to Section E.10.2 of the Participation  Agreement. No
                  other adjustments shall be made to change  administrative  and
                  general  expense charged to Start-Up and  Pre-Operation  Costs
                  through  September  30, 1984,  except for those related to any
                  future  adjustments made to Start-Up and  Pre-Operation  Costs
                  incurred through such date.

         L.3.2    Interest will be charged on the unpaid balance of the thirteen
                  million dollars  ($13,000,000)  credit beginning on October 1,
                  1984.  The  interest  rate to be applied will be the rate from
                  time to time publicly  announced by Citibank,  N.A., New York,
                  New York, as its prime interest  rate,  less two percent (2%).
                  The initial  credit shall  include all  interest  accrued from
                  September 30, 1984,  and  subsequent  monthly  credits will be
                  applied first against  accrued  interest.  In addition to such
                  monthly  payments  of  all  accrued  interest,  the  principal
                  balance  shall be  amortized  by  crediting  monthly an amount
                  equal to not less than one twenty-fourth (1/24) of such amount
                  

                                       L-5

<PAGE>

                  until  the  full  thirteen   million   dollars   ($13,000,000)
                  principal amount has been credited.  Pursuant to the Letter of
                  Understanding,  the intimal credit hereunder occurred with the
                  first  request for the  advancement  of Operating  Funds dated
                  March 1, 1985.

                                       L-6

<PAGE>

                                   EXHIBIT L-A

                              SAMPLE CALCULATION of
                 MONTHLY ADMINISTRATIVE AND GENERAL EXPENSE FOR
                      START-UP AND PRE-OPERATION COSTS FOR
                           ANPP GENERATING UNIT NO. 1

AGE = [(SUPO) x (OMF) x ([OMAG)] + [(SUPO) x (1-OMF) x (CFAG)]

ASSUMPTIONS

         SUPO     =        $9,500,000 (1)

         OMF      =        90%

         OMAG     =        16.442% of Project Manager's/Operating Agent's ANPP
                           labor,  plus  1% of  contractor's  costs,  plus 0% of
                           other costs.

         CFAG     =        1%

         Project Manager's/Operating Agent's ANPP Labor Costs =
         $4,750,000

         CONTRACTOR COSTS = $3,800,000

         OTHER COSTS = $950,000


CALCULATION:

         AGE = [($9,500,000) x (.9) x (OMAG)] + ($9,500,000)(1-.9) x (CFAG)]


                                          (4,750,000)(.9)(.16442)
         [($9,500,000) x (.9) x (OMAG)] =+(3,800,000)(.9)(.01)     = $737,096
                                           +(950,000)(.9)(.01)

         [($9,500,000) x (1-.9) x (CFAG)] = ($9,500,000)(.1)(0.0)  = $9,500

         AGE = $737,096 + $9,500

         AGE = $746,596


(1)      Includes 1/3 of Start-Up and Pre-Operation Costs for common
         facilities.

(2)      The OMAG rate will be applied to only the  Project  Manager's/Operating
         Agent's ANPP labor incurred for Start-Up and Pre-Operation  Costs times
         the OMF factor in effect.



                                       L-7



<PAGE>