Exhibit 10.2

                                AMENDMENT TO THE

                            POWER PURCHASE AGREEMENT

                                     BETWEEN

                           BYRON POWER PARTNERS, L.P.

                                       AND

                        PACIFIC GAS AND ELECTRIC COMPANY

                              (PG&E LOG NO. 16C047)


     THIS AMENDMENT ("Amendment") is by and between PACIFIC GAS AND ELECTRIC
COMPANY ("PG&E"), a California corporation and Byron Power Partners, L.P., a
California limited partnership ("Seller"). PG&E and Seller are sometimes
referred to herein individually as "Party" and collectively as the "Parties"


                                    RECITALS

     A. On April 15, 1985, Seller (or Seller's predecessor, as applicable) and
entered into a Power Purchase Agreement, (as amended, "the PPA") pursuant to
which PG&E purchases electric power from Seller and Seller sells electric power
to PG&E.

     B. On April 6, 2001, PG&E filed voluntary petition under chapter 11 of the
United States Bankruptcy Code in the San Francisco Division of the United States
Bankruptcy Court for the Northern District of California (the "Bankruptcy
Court") (In re Pacific Gas and Electric Company, Banks. Case No. 01-03923).

     C. On June 14, 2001, the Commission issued D.01-06-015, which approved as
reasonable certain non-standard PPA price modifications.

     D. Seller and PG&E now desire to enter into the PPA price modification set
forth below. Seller has advised PG&E that Seller is unable to enter into the
PPA price modification unless the Bankruptcy Court has approved this Amendment
and Seller is provided a limited option to terminate this Amendment following
Bankruptcy Court approval if Seller is unable to


                                     1 of 3

<PAGE>

Arrange for fuel purchases to accommodate the price modification contemplated
under this Amendment.


                                    AMENDMENT

     In consideration of the mutual promises and covenants contained herein,
PG&E and Seller agree to as follows:

     1. INTERIM ENERGY PRICE

     Unless otherwise set fourth in the PPA, for the period commencing with the
date on which this Amendment has been executed by the Parties and ending upon
the commencement of the Fixed Rate Period, as defined in Section 2 below, the
price for energy delivered, if any, to PG&E by Seller shall be determined
pursuant to the PPA, without reference to this Amendment.

     2. FIXED ENERGY PRICE

     Commencing with this date that is the earlier of, August 1, 2001, August
16, 2001 or September 1, 2001 following approval of the Bankruptcy Court as
specified in Section 4 below (hereafter, the "Bankruptcy Court Approval Date")
and ending on July 15, 2006 (this period referred to hereafter as the "Fixed
Rate Period"), Seller elects to replace the energy price term specified in the
PPA (PG&E's "full short-run avoided costs" or "full short-run avoided operating
costs" as the case may be) with the applicable energy prices as specified in
Attachment A. No provision of the PPA other than the energy price term is or
shall be deemed to be modified, amended, waived or otherwise affected by this
Amendment. The parties agree to reasonably cooperate and contest any challenge
in any Commission proceeding that seeks to alter or modify the energy pricing
terms set fourth in Attachment A, including, but not limited to any challenge to
the reasonableness of PG&E having entered into this Amendment.

                                    2 of 3
<PAGE>

     3. SELLER'S OPTION PERIOD

     For a fifteen-day period following the Bankruptcy Court Approval Date,
Seller shall have the sole right to terminate this Amendment. Upon termination
of this Amendment pursuant to this section 3, this Amendment shall be deemed a
nullity.

     4. EFFECTIVENESS

     This Amendment shall not become effective unless and until it has been
approved by the Bankruptcy Court. If the Bankruptcy Court has not approved this
Amendment by August 31, 2001, this Amendment shall be deemed a nullity.

     5. SIGNATURES

     IN WITNESS WHEREOF, Seller and PG&E have caused this Amendment to be
executed by their authorized representatives.


PACIFIC GAS AND ELECTRIC COMPANY
 a California corporation

By:   [illegible]
      -------------------------

Title: [illegible]
      -------------------------

Date: 7/14/01
      -------------------------

BYRON POWER PARTNERS, L.P.
a California limited partnership

By:   [illegible]
      -------------------------

Title: Ex VP & COO
      -------------------------

Date: 7/13/01
      -------------------------


                       3 of 3
<PAGE>

Pacific Gas and Electric Company




June 1, 1993

[LOGO OMITTED]    ALTAMONT COGENERATION CORPORATION
                  Attn: Bob Pollock
                  c/o Wankesha-Pearce
                  12320 South Main
                  HOUSTON, TX 77235-5068

                  Dear Sir/Madam:

                  This is to notify you of a change of address for Article 9,
                  "Notices", of the Power Purchase Agreement (PPA) between PG&E
                  and Altamont Cogeneration Corporation. Please direct all
                  future written notices to:

                                   Mr. Richard A. Lavne
                                   Director, Power Finance Department, B13D
                                   Pacific Gas and Electric Company
                                   77 Beale Street, Room 1311
                                   P.O. Box 770000 San
                                   Francisco, CA 94177

                  The address in the PPA relating to insurance matters has also
                  changed. All insurance certificates, endorsements.
                  cancellations, terminations, alterations, and material changes
                  of such insurance must be issued and submitted to the
                  following:

                                   Pacific Gas and Electric Company
                                   Power Contracts Department - B23C
                                   Attn: Insurance Coordinator
                                   P.O. Box 770000, Room 2354
                                   San Francisco, CA 94177

                  CPUC Decision 93-04-001 dated April 7, 1993, adopted the
                  Division of Ratepayer Advocate's recommendation for modifying
                  the reporting requirements applicable to the quarterly report
                  of negative avoided cost or hydro spill. The above decision
                  ordered that: Decision (D) 82-01-103, Ordering Paragraph 17,
                  is modified to read in full as follows:

                        "Each utility shall promptly file a report for any
                        quarter in which a negative avoided cost or hydro
                        spill condition occurs."

                  Please inform all parties in your organization of the above
                  information. If you have any questions please call me at (415)
                  973-4966.


                  Sincerely,


                  /s/ Dave Harrison
                  Dave Harrison
                  Power System Analyst
                  (415)973-4966

<PAGE>

                        PACIFIC GAS AND ELECTRIC COMPANY

                               STANDARD OFFER #4

                            POWER PURCHASE AGREEMENT

                                      FOR

                         LONG-TERM ENERGY AND CAPACITY




     Seller: Fayette Manufacturing Corporation

     Location: Altamont Pass

     Nameplate Rating: 6,500 kW

     Firm Capacity: 5,700 kW

     Energy Source: Natural Gas







                                    MAY 1984


                                                                          S.O #4
                                                                     May 7, 1984

                                       1
<PAGE>

                               STANDARD OFFER #4:
                          LONG-TERM ENERGY AND CAPACITY
                            POWER PURCHASE AGREEMENT



                                    CONTENTS



     Article                                                                Page
     -------                                                                ----

     1         QUALIFYING STATUS                                             3

     2         COMMITMENT OF PARTIES                                         4

     3         PURCHASE OF POWER                                             5

     4         ENERGY PRICE                                                  6

     5         CAPACITY ELECTION AND CAPACITY PRICE                         10

     6         LOSS ADJUSTMENT FACTORS                                      11

     7         CURTAILMENT                                                  11

     8         RETROACTIVE APPLICATION OF CPUC ORDERS                       12

     9         NOTICES                                                      12

     10        DESIGNATED SWITCHING CENTER                                  13

     11        TERMS AND CONDITIONS                                         13

     12        TERM OF AGREEMENT                                            14



     Appendix A:       GENERAL TERMS AND CONDITIONS

     Appendix B:        ENERGY PAYMENT OPTIONS

     Appendix C:        CURTAILMENT OPTIONS

     Appendix D:        AS-DELIVERED CAPACITY

     Appendix E:        FIRM CAPACITY

     Appendix F:        INTERCONNECTION


                                       2                                  S.O #4
                                                                     May 7, 1984
<PAGE>



                          LONG-TERM ENERGY AND CAPACITY

                            POWER PURCHASE AGREEMENT

                                     BETWEEN

                        FAYETTE MANUFACTURING CORPORATION

                                       AND

                        PACIFIC GAS AND ELECTRIC COMPANY



          FAYETTE MANUFACTURING CORPORATION, a Pennsylvania corporation
     ("Seller"), and PACIFIC GAS AND ELECTRIC COMPANY ("PGandE"), referred to
     collectively as "Parties" and individually as "Party", agree as follows:


                          ARTICLE 1 QUALIFYING STATUS

          Seller warrants that, at the date of first power deliveries from
     Seller's Facility' and during the term of agreement, its Facility shall
     meet the qualifying facility requirements established as of the effective
     date of this Agreement by the Federal Energy Regulatory Commission's rules
     (18 Code of Federal Regulations 292) implementing the Public Utility
     Regulatory Policies Act of 1978 (16 U.S.C.A. 796, at seq.).




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

     1    Underlining identifies those terms which are defined in Section S-1 of
          Appendix A.

                                       3                                  S.O #4
                                                                     May 7, 1984
<PAGE>

                         ARTICLE 2 COMMITMENT OF PARTIES



          The prices to be paid Seller for energy and/or capacity delivered
     pursuant to this Agreement have wholly or partly been fixed at the time of
     execution. Actual avoided costs at, the time of energy and/or capacity
     deliveries may be substantially above or below the prices fixed in this
     Agreement. Therefore, the Parties expressly commit to the prices fixed in
     this Agreement for the applicable period of performance and shall not seek
     to or have a right to renegotiate such prices for any reason. As part of
     its consideration for the benefit of fixing part or all of the energy
     and/or capacity prices under this Agreement, Seller waives any and all
     rights to judicial or other relief from its obligations and/or prices set
     forth in Appendices B, D, and E, or modification of any other term or
     provision for any reasons whatsoever.

          This Agreement contains certain provisions which set forth methods of
     calculating damages to be paid to PGandE in the event Seller fails to
     fulfill certain performance obligations. The inclusion of such provisions
     is not intended to create any express or implied right in Seller to
     terminate this Agreement prior to the expiration of the term of agreement.
     Termination of this Agreement by Seller prior to its expiration date shall
     constitute a breach of this Agreement and the damages expressly set forth
     in this


                                       4                                  S.O #4
                                                                     May 7, 1984
<PAGE>

     Agreement shall not constitute PGandE's sole remedy for such breach.


                           ARTICLE 3 PURCHASE OF POWER



          (a) Seller shall sell and deliver and PGandE shall purchase and accept
     delivery of capacity and energy at the voltage level of 115 kW.


          (b) Seller shall provide capacity and energy from its 6,500 kW
     Facility located in the Altamont Pass.


          (c) The scheduled operation date of the Facility is February 1, 1987.
     At the end of each calendar quarter Seller shall give written notice to
     PGandE of any change in the scheduled operation date.


          (d) To avoid exceeding the physical limitations of the interconnection
     facilities, Seller shall limit the Facility's actual rate of delivery into
     the PGandE system to 6,500 kW.

     (e) The primary energy source for the Facility is natural gas.


                                       5                                  S.O #4
                                                                     May 7, 1984
<PAGE>

          (f) If Seller does not begin construction of its Facility by November
     30, 1986, PGandE may reallocate the existing capacity on PGandE's
     transmission and/or distribution system which would have been used to
     accommodate Seller's power deliveries to other uses. In the event of such
     reallocation, Seller shall pay PGandE for the cost of any upgrades or
     additions to PGandE's system necessary to accommodate the output from the
     Facility. Such additional facilities shall be installed, owned and
     maintained in accordance with the applicable PGandE tariff.


     (g) The transformer loss adjustment factor is ____________1


                             ARTICLE 4 ENERGY PRICE


          PGandE shall pay Seller for its surplus energy output2 under the
     energy payment option checked below3:



     X     Energy Payment Option 1 - Forecasted Energy Prices
     -



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

     1    If Seller chooses to have meters placed on Seller's side of the
          transformer, an estimated transformer loss adjustment factor of 2
          percent, unless the Parties agree otherwise, will be applied. This
          estimated transformer loss figure will be adjusted to a measurement of
          actual transformer losses performed at Seller's request and expense.
          In addition, a line loss percentage to the low side meter will be
          determined by the Parties and added to the transformer loss adjustment
          factor.

     2    Insert either "net energy output" or "surplus energy output" to show
          the energy sale option selected by Seller.

     3    Energy Payment option 2 is not available to oil or gas-fired
          cogenerators.


                                       6                                  S.O #4
                                                                     May 7, 1984
<PAGE>

          During the fixed price period, Seller shall be paid for energy
     delivered at prices equal to 01 percent of the prices set forth in Table
     B-1, Appendix B, plus 1002 percent of PGandE's full short-run avoided
     operating costs.

          For the remaining years of the term of agreement, Seller shall be paid
     for energy delivered at prices equal to PCandE's full short-run avoided
     operating costs.

          If Seller's Facility is not an oil or gas-fired cogeneration facility,
     Seller may convert from Energy Payment Option 1 to Energy Payment option 2
     and be subject to the conditions therein, provided that Seller shall not
     change the percentage of energy prices to be based on PGandE's full
     short-run avoided operating costs. Such conversion must be made at least 90
     days prior to the date of initial energy deliveries and must be made by
     written notice in accordance with Section A-17, Appendix A.


     _____  Energy Payment Option 2 - Levelized Energy Prices


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

     (1)  Insert either 0, 20, 40, 60, 80, or 100, at Seller's option. If
          Seller's Facility is an oil or gas-fired cogeneration facility, either
          0 or 20 must be inserted.

     (2)  Insert the difference between 100 and the percentage selected under
          footnote 1 above.


                                       7                                  S.O #4
                                                                     May 7, 1984
<PAGE>

          During the fixed price period, Seller shall be paid for energy
     delivered at prices equal to ________ 1 percent of the levelized energy
     prices set forth in Table B-2, Appendix B for the year in which energy
     deliveries begin and term of agreement, plus ___________2 percent of
     PGandE's full short-run avoided operating costs. During the fixed price
     period, Seller shall be subject to the conditions and terms set forth in
     Appendix B, Energy Payment Option 2.

          For the remaining years of the term of agreement, Seller shall be paid
     for energy delivered at prices equal to PGandE's full short-run avoided
     operating costs.


     Seller may convert from Energy Payment Option 2 to Energy Payment Option 1,
provided that Seller shall not change the percentage of energy prices to be
based on PGandE's full short-run avoided operating costs. Such conversion must
be made at least 90 days prior to the date of initial energy deliveries and must
be made by written notice in accordance with Section A-17, Appendix A.



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

     1    Insert either 20, 40, 60, 80, or 100, at Seller's option.

     2    Insert the difference between 100 and the percentage selected under
          footnote 1 above.


                                       8                                  S.O #4
                                                                     May 7, 1984
<PAGE>

     _____  Energy Payment Option 3 - Incremental Energy Rate


          Beginning with the date of initial energy deliveries and continuing
     until ______________1, seller shall be paid monthly for energy delivered at
     prices equal to PGandE's full short-run avoided operating costs, provided
     that adjustments shall be made annually to the extent set forth in Appendix
     B, Energy Payment Option 3.


          The incremental Energy Rate Band widths specified by Seller in Table I
     below shall be used in determining the annual adjustment, if any.


                                     Table I
                                     -------

     Year                 Incremental Energy Rate Band Widths
     ----                 -----------------------------------
                          (must be multiples of 100 or zero)

     1984                          -------------
     1985                          -------------
     1986                          -------------
     1987                          -------------
     1988                          -------------
     1989                          -------------
     1990                          -------------
     1991                          -------------
     1992                          -------------
     1993                          -------------
     1994                          -------------
     1995                          -------------
     1996                          -------------
     1997                          -------------
     1998                          -------------


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

     1    Specified by Seller must be December 31, 1998 or prior.


                                       9
                                                                          S.O #4
                                                                     May 7, 1984
<PAGE>

          After __________, Seller shall be paid to: energy delivered at prices
     equal to PGandE's full short-run, avoided operating costs.


                 ARTICLE 5 CAPACITY ELECTION AND CAPACITY PRICE


          Seller may elect to deliver either firm capacity or as-delivered
     capacity, and Seller's election is indicated below. PGandE's prices fox
     firm capacity and as-delivered capacity die derived from PGandE's full
     avoided costs as approved by the CPUC.


     X   Firm capacity - 5,700 kW for 30 years from the firm capacity
         availability date with payment determined in accordance with
         Appendix E. Except for hydro- electric facilities, PGandE shall
         pay Seller for capacity delivered in excess of firm capacity on
         an as-delivered capacity basis in accordance with As-Delivered
         Capacity Payment Option 1 set forth in Appendix D.


                                       OR

     __  As-delivered capacity with payment determined in accordance with
         As-Delivered Capacity Payment Option set forth in Appendix D.


                                       10                                 S.O #4
                                                                     May 7, 1984
<PAGE>

                        ARTICLE 6 LOSS ADJUSTMENT FACTORS


          Capacity Loss Adjustment Factors shall be as shown in Appendix D and
     Appendix E, dependent upon Seller's capacity election set forth in Article
     5 of this Agreement.

          Energy Loss Adjustment Factors shall be considered as unity for all
     energy payments related to Energy Payment Options I and 2 set forth in
     Appendix B for the entire fixed price period of this Agreement, except for
     the percentage of' payments that Seller elected in Article 4 to have
     calculated based on PGandE's full short-run avoided operating costs. Energy
     Loss Adjustment Factors for all payments related to PGandE's full short-run
     avoided operating costs are subject to CPUC rulings for the entire term of
     agreement.


                              ARTICLE 7 CURTAILMENT

          Seller has two options regarding possible curtailment by PGandE of
     Seller's deliveries, and Seller's selection is indicated below:

     X   Curtailment Option A - Hydro Spill and Negative Avoided Cost
    --
    __   Curtailment Option B - Adjusted Price Period

         The two options are described in Appendix C.


                                       11                                 S.O #4
                                                                     May 7, 1984
<PAGE>

                ARTICLE 8 RETROACTIVE APPLICATION OF CPUC ORDERS


          Pursuant to Ordering Paragraph l (f) of CPUC Decision No. 83-09-054
     (September 7, 1983), after the effective date of the CPUC's Application
     B2-03-26 decision relating to line loss factors, Seller has the option to
     retain the relevant terms of this Agreement or have the results of that
     decision incorporated into this Agreement. To retain the terms herein,
     Seller shall provide written notice to PGandE within 30 days after the
     effective date of the relevant CPUC decision on Application 82-03-26.
     Failure to provide such notice will result in the amendment of this
     Agreement to comply with that decision.


          As soon as practicable following the issuance of a decision in
     Application 82-03-26, PGandE shall notify Seller of the effective date
     thereof and its results.


                                ARTICLE 9 NOTICES


          All written notices shall be directed as follows:

          To PGandE:     Pacific Gas and Electric Company
                         Attention: Vice President -
                         Electric Operations
                         77 Beale Street
                         San Francisco, CA 94106


                                       12                                 S.O #4
                                                                     May 7, 1984
<PAGE>

          To Seller:     Fayette Manufacturing Corporation
                         Attention: Arthur C. Beard
                         P.O. Box 1149
                         Tracy, CA 95376



                     ARTICLE 10 DESIGNATED SWITCHING CENTER


          The designated PGandE switching center shall be, unless changed by
     PGandE:

                         Tesla Substation
                         Patterson Pass Road
                         Tracy, CA 95376
                         (209)835-6391


                         ARTICLE 11 TERMS AND CONDITIONS


          This Agreement includes the following appendices which are attached
     and incorporated by reference:

     Appendix A -   GENERAL TERMS AND CONDITIONS

     Appendix B -   ENERGY PAYMENT OPTIONS

     Appendix C -   CURTAILMENT OPTIONS

     Appendix D -   AS-DELIVERED CAPACITY

     Appendix E -   FIRM CAPACITY

     Appendix F -   INTERCONNECTION


                                       13                                 S.O #4
                                                                     May 7, 1984
<PAGE>

                          Article 12 TERM OF AGREEMENT


          This Agreement shall be binding upon execution and remain in effect
     thereafter for 30 years' from the firm capacity availability date2;
     provided, however, that it shall terminate if energy deliveries do not
     start within five years of the execution date.

          IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
     be executed by their duly authorized representatives- and it is effective
     as of the last date set forth below.


     FAYETTE MANUFACTURING CORPORATION         PACIFIC GAS AND ELECTRIC COMPANY



     BY:/s/ JOHN S. PRESTON                    BY: /s/ NOLAN H. DAINES
        -------------------                        -------------------
            JOHN S. PRESTON                            NOLAN H. DIANES

                                                      Vice President -
     TITLE: General Counsel                    TITLE: Planning and Research

     DATE SIGNED: April 12, 1985               DATE SIGNED: 4/15/85
                  --------------                            -------



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

          1    The minimum contract term is 15 years and the maximum contract
               term is 30 years.

          2    Insert "firm capacity availability date" if Seller has elected to
               deliver firm capacity or "date of initial energy deliveries" if
               Seller has elected to deliver as-delivered capacity.


                                       14                                 S.O #4
                                                                     May 7, 1984
<PAGE>

                                   APPENDIX A

                          GENERAL TERMS AND CONDITIONS


                                    CONTENTS



     Section                                                   Page
     -------                                                   -----

       A-1          DEFINITIONS                                  A-2

       A-2          CONSTRUCTION                                 A-7

       A-3          OPERATION                                    A-11

       A-4          PAYMENT                                      A-14

       A-5          ADJUSTMENTS OF PAYMENTS                      A-15

       A-6          ACCESS TO RECORDS AND PGandE DATA            A-15

       A-7          INTERRUPTION OF DELIVERIES                   A-16

       A-8          FORCE MAJEURE                                A-16

       A-9          INDEMNITY                                    A-17

       A-10         LIABILITY; DEDICATION                        A-18

       A-11         SEVERAL OBLIGATIONS                          A-19

       A-12         NON-WAIVER                                   A-19

       A-13         ASSIGNMENT                                   A-19

       A-14         CAPTIONS                                     A-20

       A-15         CHOICE OF LAWS                               A-20

       A-16         GOVERNMENTAL JURISDICTION AND                A-20
                    AUTHORIZATION

       A-17         NOTICES                                      A-21

       A-18         INSURANCE                                    A-21


                                       A-1
<PAGE>

                                   APPENDIX A

                          GENERAL TERMS AND CONDITIONS



     A-1 DEFINITIONS



          Whenever used in this Agreement, appendices, and attachments hereto,
     the following terms shall have the following meanings:

          Adjusted firm capacity price - The $/kW-year purchase price for firm
     capacity from Table E-2, Appendix E for the period of Seller's actual
     performance.


          As-delivered capacity - Capacity delivered to PGandE in excess of firm
     capacity or in lieu of a firm capacity commitment.


          CPUC - The Public Utilities Commission of the State of California.


          Current firm capacity price - The $/kW-year capacity price from
     PGandE's firm capacity price schedule effective at the time PGandE Berates
     the firm capacity pursuant to Section E-4(b), Appendix E or Seller
     terminates performance under this Agreement, for a term equal to the period
     from the date of deration or termination to the end of the term of
     agreement.


                                      A-2
<PAGE>

          Designated PGandE switching center - That switching center or other
     PGandE installation identified in Article 10.


          Facility - That generation apparatus described in Article 3 and all
     associated equipment owned, maintained, and operated by Seller.


          Firm capacity - That capacity, if any, identified as firm in Article 5
     except as otherwise changed as provided herein.


          Firm capacity availability date - The day following the day during
     which all features and equipment of the Facility are demonstrated to
     PGandE's satisfaction to be capable of operating simultaneously to deliver
     firm capacity continuously into PGandE's system as provided in this
     Agreement.

          Firm capacity price - The price for firm capacity applicable for the
     firm capacity availability date and the number of years of firm capacity
     delivery from the firm capacity price schedule, Table E-2, Appendix E.


                                      A-3
<PAGE>

          Firm capacity price schedule - The periodically published schedule of
     the $/kW-year prices that PGandE offers to pay for firm capacity. See Table
     E-2, Appendix E.


          Fixed price Period - The period during which forecasted or levelized
     energy prices, and/or forecasted as-delivered Capacity prices, are in
     effect; defined as the first five years of the term of agreement if the
     term of agreement is 15 or 16 years; the first six years of the term of
     agreement if the term of agreement is 17, 18, or 19 years; or the first ten
     years of the term of agreement if the term of agreement is anywhere from 20
     through 30 years.


          Forced outage - Any outage resulting from a design defect, inadequate
     construction, operator error or a breakdown of the mechanical or electrical
     equipment that fully or partially curtails the electrical output of the
     Facility.


          Full short-run avoided operating costs - CPUC-approved costs which are
     the basis of PGandE's published energy prices. PGandE's current energy
     price calculation is shown in Table B-5, Appendix B. PGandE's published
     off-peak hours' prices shall be adjusted, as appropriate, if Seller has
     selected Curtailment Option B.


                                      A-4
<PAGE>

          Interconnection facilities - All means required and apparatus
     installed to interconnect and deliver power from the Facility to the PGandE
     system including, but not limited, to, connection, transformation,
     switching, metering, communications, and safety equipment, such as
     equipment required to protect (1) the PGandE system and its customers from
     faults occurring at the Facility, and (2) the Facility from faults
     occurring on the PGandE system or on the systems of others to which the
     PGandE system is directly or indirectly connected. Interconnection
     facilities also include any necessary additions and reinforcements by
     PGandE to the PGandE system required as a result of the interconnection of
     the Facility to the PGandE system.


          Net energy output - The Facility's gross output in kilowatt-hours less
     station use and transformation and transmission losses to the point of
     delivery into the PGandE system. Where PGandE agrees that it is impractical
     to connect the station use on the generator side of the power purchase
     meter, PGandE may, at its option, apply a station load adjustment.


          Prudent electrical practices - Those practices, methods, and
     equipment, as changed from time to time, that are commonly used in prudent
     electrical engineering and operations to design and operate electric
     equipment lawfully and with safety, dependability, efficiency, and economy.


                                      A-5
<PAGE>

          Scheduled operation date - The day specified in Article 3 (c) when the
     Facility is, by Seller's estimate, expected to produce energy that will be
     available for delivery to PGandE.


          Special facilities - Those additions and reinforcements to the PGandE
     system which are needed to accommodate the maximum delivery of energy and
     capacity from the Facility as provided in this Agreement and those parts of
     the interconnection facilities which are owned and maintained by PGandE at
     Seller's request, including metering and data processing equipment. All
     special facilities shall be owned, operated, and maintained pursuant to
     PGandE's electric Rule No. 21, which is attached hereto.


          Station use - Energy used to operate the Facility's auxiliary
     equipment. The auxiliary equipment includes, but is not limited to, forced
     and induced draft fans, cooling towers, boiler feed pumps, lubricating oil
     systems, plant lighting, fuel handling systems, control systems, and sump
     pumps.


          Surplus energy output - The Facility's gross output, in
     kilowatt-hours, less station use, and any other use by Seller, and
     transformation and transmission losses to the point of delivery into the
     PGandE system.


                                      A-6
<PAGE>

          Term of agreement - The number of years this Agreement will remain in
     effect as provided in Article 12.


          Voltage level - The voltage at which the Facility interconnects with
     the PGandE system, measured at the point of delivery.


     A-2  CONSTRUCTION


     A-2.1  Land Rights

          Seller hereby grants to PGandE all necessary rights of way and
     easements, including adequate and continuing access rights on property of
     Seller, to install, operate, maintain, replace, and remove the special
     facilities. Seller agrees to execute such other grants, deeds, or documents
     as PGandE may require to enable it to record such rights :of way and
     easements. If any part of PGandE's equipment is to be installed on property
     owned by other than Seller, Seller shall, at its own cost and expense,
     obtain from the owners thereof all necessary rights of way and easements,
     in a form satisfactory to PGandE, for the construction, operation,
     maintenance, and replacement of PGandE's equipment upon such property. If
     Seller is unable to obtain such rights of way and easements, Seller shall


                                      A-7
<PAGE>

     reimburse PGandE for all costs incurred by PGandE in obtaining them. PGandE
     shall at all times have the right of ingress to and egress from the
     Facility at all reasonable hours for any purposes reasonably connected with
     this Agreement or the exercise of any and all rights secured to PGandE by
     law or its tariff schedules.


      A-2.2 Design, Construction, Ownership, and Maintenance


          (a) Seller shall design, construct, install, own, operate, and
     maintain all interconnection facilities, except special facilities, to the
     point of interconnection with the PGandE system as required for PGandE to
     receive capacity and energy from the Facility. The Facility and
     interconnection facilities shall meet all requirements of applicable codes
     and all standards of prudent electrical practices and shall be maintained
     in a safe and prudent manner. A description of the interconnection
     facilities for which Seller is solely responsible is set forth in Appendix
     F, or if the interconnection requirements have not yet been determined at
     the time of the execution of this Agreement, the description of such
     facilities will be appended to this Agreement at the time such
     determination is made.

          (b) Seller shall submit to PGandE the design and all specifications
     for the interconnection facilities (except special facilities) and, at
     PGandE's option, the Facility, for review and written acceptance prior to


                                      A-8
<PAGE>


          their release for construction purposes. PGandE shall notify Seller in
     writing of the outcome of PGandE's review of the design and specifications
     for Seller's interconnection facilities (and the Facility, if requested)
     within 30 days of the receipt of the design and all of the specifications
     for the interconnection facilities (and the Facility, if requested). Any
     flaws perceived by PGandE in the design and specifications for the
     interconnection facilities (and the Facility, if requested) will be
     described in PGandE's written notification. PGandE's review and acceptance
     of the design and specifications shall not be construed as confirming or
     endorsing the design and specifications or as warranting their safety,
     durability, or reliability. PGandE shall not, by reason of such review or
     lack of review, be responsible for strength, details of design, adequacy,
     or capacity of equipment built pursuant to such design and specifications,
     nor shall PGandE's acceptance be deemed to be an endorsement of any of such
     equipment. Seller shall change the interconnection facilities as may be
     reasonably required by PGandE to meet changing requirements of the PGandE
     system.


          (c) In the event it is necessary for PGandE to install interconnection
     facilities for the purposes of this Agreement, they shall be installed as
     special facilities.


                                      A-9
<PAGE>

          (d) Upon the request of Seller, PGandE shall provide a binding
     estimate for the installation of interconnection facilities by PGandE.


     A-2.3  Meter Installation



          (a) PGandE shall specify, provide, install, own, operate, and maintain
     as special facilities all metering and data processing equipment for the
     registration and recording of energy and other related parameters which are
     required for the reporting of data to PGandE and for computing the payment
     due Seller from PGandE.


          (b) Seller shall provide, construct, install, own, and maintain at
     Seller's expense all that is required to accommodate the metering and data
     processing equipment, such as, but not limited to, metal-clad switchgear,
     switchboards, cubicles, metering panels, enclosures, conduits, rack
     structures, and equipment mounting pads.


          (c) PGandE shall permit meters to be fixed on PGandE's side of the
     transformer. If meters are placed on PGandE's side of the transformer,
     service will be provided at the available primary voltage and no
     transformer loss adjustment will be made. If Seller chooses to have meters
     placed on Seller's side of the transformer, an estimated transformer loss
     adjustment factor of 2 percent, unless the Parties agree otherwise, will be
     applied.


                                      A-10
<PAGE>

     A-3  OPERATION


     A-3.1  Inspection and Approval


          Seller shall not operate the Facility in parallel with PGandE's system
     until an authorized PGandE representative has inspected the interconnection
     facilities, and PGandE has given written approval to begin parallel
     operation. Seller shall notify PGandE of the Facility's start-up date at
     least 45 days prior to such date. PGandE shall inspect the interconnection
     facilities within 30 days of the receipt of such notice. If parallel
     operation is not authorized by PGandE, PGandE shall notify Seller in
     writing within five days after inspection of the reason authorization for
     parallel operation was withheld.


     A-3.2  Facility Operation and Maintenance


          Seller shall operate and maintain its Facility according to prudent
     electrical practices, applicable laws, orders, rules, and tariffs and
     shall provide such reactive power support as may be reasonably required by
     PGandE to maintain system voltage level and power factor. Seller shall
     operate the Facility at the power factors or voltage levels prescribed by
     PGandE's system dispatcher or designated- representative. If Seller fails
     to provide reactive power support, PGandE may do so at Seller's expense.


                                      A-11
<PAGE>

     A-3.3  Point of Delivery


          Seller shall deliver the energy at the point where Seller's electrical
     conductors (or those of Seller's agent) contact PGandE's system as it shall
     exist whenever the deliveries are being made or at such other point or
     points as the Parties may agree in writing. The initial point of delivery
     of Seller's power to the PGandE system is set forth in Appendix F.


     A-3.4  Operating Communications


          (a) Seller shall maintain operating communications with the designated
     PGandE switching center. The operating communications shall include, but
     not be limited to, system paralleling or separation, scheduled and
     unscheduled shutdowns, equipment clearances, levels of operating voltage or
     power factors and daily capacity and generation reports.


          (b) Seller shall keep a daily operations log for each generating unit
     which shall include information on unit availability, maintenance outages,
     circuit breaker trip operations requiring a manual reset, and any
     significant events related to the operation of the Facility.


          (c) if Seller makes deliveries greater than one megawatt, Seller shall
     measure and register on a graphic recording device power in kW and voltage
     in kV at a location within the Facility agreed to by both Parties.


                                      A-12
<PAGE>

          (d) If Seller makes deliveries greater than one and up to and
     including ten megawatts, Seller shall report to the designated PGandE
     switching center, twice a day at agreed upon times for the current day's
     operation, the hourly readings in kW of capacity delivered and the energy
     in kWh delivered since the last report.


          (e) If Seller makes deliveries of greater than ten megawatts, Seller
     shall telemeter the delivered capacity and energy information, including
     real power in kW, reactive power in kVAR, and energy in kWh to a switching
     center selected by PGandE. PGandE may also require Seller to telemeter
     transmission kW, kVAR, and kV data depending on the number of generators
     and transmission configuration. Seller shall provide and maintain the data
     circuits required for telemetering. When telemetering is inoperative,
     Seller shall report daily the capacity delivered each hour and the energy
     delivered each day to the designated PGandE switching center.


     A-3.5  Meter Testing and Inspection


          (a) All meters used to provide data for the computation of the
     payments due Seller from PGandE shall be sealed, and the seals shall be
     broken only by PGandE when the meters are to be inspected, tested, or
     adjusted.


                                      A-13
<PAGE>

          (b) PGandE shall inspect and test all meters upon their installation
     and annually thereafter. At Seller's request and expense, PGandE shall
     inspect or test a meter more frequently. PGandE shall give reasonable
     notice to Seller of the time when any inspection or test shall take place,
     and Seller may have representatives present at the test or inspection. If a
     meter is found to be inaccurate or defective, PGandE shall adjust, repair,
     or replace it at its expense in order to provide accurate metering.


     A-3.6  Adjustments to Meter Measurements


          If a meter fails to register, or if the measurement made by a meter
     during a test varies by more than two percent from the measurement made by
     the standard meter used in the test, an adjustment shall be made correcting
     all measurements made by the inaccurate meter for --(1) the actual period
     during which inaccurate measurements were made, if the period can be
     determined, or if not, (2) the period immediately preceding the test of the
     meter equal to one-half the time from the date of the last previous test of
     the meter, provided that the period covered by the correction shall not
     exceed six months.


     A-4  PAYMENT


          PGandE shall mail to Seller not later than 30 days after the end of
     each monthly billing period (1) a statement showing the energy and capacity


                                      A-14
<PAGE>

     delivered to PGandE during on-peak, partial-peak, and off-peak periods
     during the monthly billing period, (2) PGandE's computation of the amount
     due Seller, and (3) PGandE's check in payment of said amount. Except as
     provided in Section A-5, if within 30 days of receipt of the statement
     Seller does not make a report in writing to PGandE of an error, Seller
     shall be deemed to have waived any error in PGandE's statement,
     computation, and payment, and they shall be considered correct and
     complete.


     A-5  ADJUSTMENTS OF PAYMENTS


          (a) In the event adjustments to payments are required as a result of
     inaccurate meters, PGandE shall use the corrected measurements described
     in. Section A-3.6 to recompute the amount due from PGandE to Seller for the
     capacity and energy delivered under this Agreement during the period of
     inaccuracy.

          (b) The additional payment to Seller or refund to PGandE shall be made
     within 30 days of notification of the owing Party of the amount due.


     A-6  ACCESS TO RECORDS AND PGandE DATA

          Each Party, after giving reasonable written notice to the other Party,
     shall have the right of access to all metering and related records


                                      A-15
<PAGE>

     including operations logs of the Facility. Data filed by PGandE with the
     CPUC pursuant to CPUC orders governing the purchase of power from
     qualifying facilities shall be provided to Seller upon request; provided
     that Seller shall reimburse PGandE for the costs it incurs to respond to
     such request.


     A-7 INTERRUPTION OF DELIVERIES

          PGandE shall not be obligated to accept or pay for and may require
     Seller to interrupt or reduce deliveries of energy (1) when necessary in
     order to construct, install, maintain, repair, replace, remove,
     investigate, or inspect any of its equipment or any part of its system, or
     (2) if it determines that interruption or reduction is necessary because of
     PGandE system emergencies, forced outages, force majeure, or compliance
     with prudent electrical practices; provided that PGandE shall not interrupt
     deliveries pursuant to this section in order to take advantage, or make
     purchases, of less expensive energy elsewhere. Whenever possible, PGandE
     shall give Seller reasonable notice of the possibility that interruption or
     reduction of deliveries may be required.


     A-8  FORCE MAJEURE


          (a) The term force majeure as used herein means unforeseeable causes,
     other than forced outages, beyond the reasonable control of and without


                                      A-15
<PAGE>

     the fault or negligence of the Party claiming force majeure including,
     but not limited to, acts of God, labor disputes, sudden actions of the
     elements, actions by federal, state, and municipal agencies, and actions of
     legislative, judicial, or regulatory agencies which conflict with the terms
     of this Agreement.


          (b) If either Party because of force majeure is rendered wholly or
     partly unable to perform its obligations under this Agreement, that Party
     shall be excused from whatever performance is affected by the force majeure
     to the extent so affected provided that:


               (1) the non-performing Party, within two weeks after the
          occurrence of the force majeure, gives the other Party written notice
          describing the particulars of the occurrence,

               (2) the suspension of performance is of no greater scope and of
          no longer duration than is required by the force majeure,

               (3) the non-performing Party uses its best efforts to remedy its
          inability to perform (this subsection shall not require the settlement
          of any strike, walkout, lockout or other labor dispute on terms which,
          in the sole judgment of the Party involved in the dispute, are
          contrary to its interest. It is understood and agreed that the
          settlement of strikes, walkouts, lockouts or other labor disputes


                                      A-16
<PAGE>

          shall be at the sole discretion of the Party having the difficulty),

               (4) when the non-performing Party is able to resume performance
          of its obligations under this Agreement, that Party shall give the
          other Party written notice to that effect, and

               (5) capacity payments during such periods of force majeure on
          Seller's part shall be governed by Section E-2(c), Appendix E.


          (c) In the event a Party is unable to perform due to legislative,
     judicial, or regulatory agency action, this Agreement shall be renegotiated
     to comply with the legal change which caused the non-performance.


     A-9  INDEMNITY


          Each Party as indemnitor shall save harmless and indemnify the other
     Party and the directors, officers, and employees of such other Party
     against and from any and all loss and liability for injuries to persons
     including employees of either Party, and property damages including
     property of either Party resulting from or arising out of (1) the
     engineering, design, construction, maintenance, or operation of, or (2) the
     making of replacements, additions, or betterments to, the indemnitor's
     facilities. This indemnity and save harmless provision shall apply
     notwithstanding the active or passive negligence of the indemnitee. Neither


                                      A-17
<PAGE>

     Party shall be indemnified hereunder for its liability or loss resulting
     from its sole negligence or willful misconduct. The indemnitor shall, on
     the other Party's request, defend any suit asserting a -claim covered by
     this indemnity and shall pay all costs, including reasonable attorney fees,
     that may be incurred by the other Party in enforcing this indemnity.


     A-l0 LIABILITY; DEDICATION


          (a) Nothing in this Agreement shall create any duty to, any standard
     of care with reference to, or any liability to any person not a Party to
     it. Neither Party shall be liable to the other Party for consequential
     damages.


          (b) Each Party shall be responsible for protecting its facilities from
     possible damage by reason of electrical disturbances or faults caused by
     the operation, faulty operation, or noncooperation of the other Party's
     facilities, and' such other Party shall not be liable for any such damages,
     so caused.


          (c) No undertaking by one Party to the other under any provision of
     this Agreement shall constitute the dedication of that Party's system or
     any portion thereof to the other Party or to the public or affect the
     status of PGandE as an independent public utility corporation or Seller as
     an independent individual or entity and not a public utility.


                                      A-18
<PAGE>

     A-11 SEVERAL OBLIGATIONS

          Except where specifically stated in this Agreement to be otherwise,
     the duties, obligations, and liabilities of the Parties are intended to be
     several and not joint or collective. Nothing contained in this Agreement
     shall ever be construed to create an association, trust, partnership, or
     joint venture or impose a trust or partnership duty, obligation, or
     liability on or with regard to either Party. Each Party shall be liable
     individually and severally for its own obligations under this Agreement.


     A-12 NON-WAIVER

          Failure to enforce any right or obligation by either Party with
     respect to any matter arising in connection with this Agreement shall not
     constitute a waiver as to that matter or any other matter.


     A-13 ASSIGNMENT

          Neither Party shall voluntarily assign its rights nor delegate its
     duties under this Agreement, or any part of such rights or duties, without
     the written consent of the other Party, except in connection with the sale
     or merger of a substantial portion of its properties. Any such assignment


                                      A-19
<PAGE>

     or delegation made without such written consent shall be null and
     void. Consent for assignment shall not be withheld unreasonably. Such
     assignment shall include, unless otherwise specified therein, all of
     Seller's rights to any refunds which might become due under this Agreement.


     A-14 CAPTIONS


          All indexes, titles, subject headings, section titles, and similar
     items are provided for the purpose of reference and convenience and are not
     intended to affect the meaning of the contents or scope of this Agreement.


     A-15 CHOICE OF LAWS


          This Agreement shall be interpreted in accordance with the laws of the
     State of California, excluding any choice of law rules which may direct the
     application of the laws of another jurisdiction.


     A-16 GOVERNMENTAL JURISDICTION AND AUTHORIZATION


          Seller shall obtain any governmental authorizations and permits
     required for the construction and operation of the Facility. Seller shall
     reimburse PGandE for any and all losses, damages, claims, penalties, or
     liability it incurs as a result of Seller's failure to obtain or maintain
     such authorizations and permits.


                                      A-20
<PAGE>

     A-17 NOTICES

          Any notice, demand, or request required or permitted, to be given by
     either Party to the other, and any instrument required or permitted to be
     tendered or delivered by either Party to the other, shall be in writing
     (except as provided in Section E-3) and so given, tendered, or delivered,
     as the case may be, by depositing the same in any United States Post Office
     with postage prepaid for transmission by certified mail, return receipt
     requested, addressed to the Party, or personally delivered to the Party, at
     the address in Article 9 of this Agreement. Changes in such designation may
     be made by notice similarly given.


     A-18 INSURANCE


     A-18.1 General Liability Coverage



          (a) Seller shall maintain during the performance hereof, General
     Liability Insurance' of not less than $1,000,000 if the Facility is over
     100 kW, $500,000 if the Facility is over 20 kW to 100 kW, and $100,000 if
     the Facility is 20 kW or below of combined single limit or equivalent for
     bodily injury, personal injury, and property damage as the result of any
     one occurrence.


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

     1.   Governmental agencies which have an established record of
          self-insurance may provide the required coverage through
          self-insurance.


                                      A-21
<PAGE>

          (b) General Liability Insurance shall include coverage for
     Premises-operations, Owners and Contractors Protective, Products/Completed
     Operations Hazard, Explosion, Collapse, Underground, Contractual Liability,
     and Broad Form Property Damage including Completed Operations.


          (c) such insurance, by endorsement to the policy(ies), shall include
     PGandE as an additional insured if the Facility is over 100 kW insofar as
     work performed by Seller for PGandE is concerned, shall contain a
     severability of interest clause, shall provide that PGandE shall not by
     reason of its inclusion as an additional insured incur liability to the
     insurance carrier for payment of premium for such insurance, and shall
     provide for 30-days' written notice to PGandE prior to cancellation,
     termination, alteration, or material change of such insurance.


     A-18.2 Additional Insurance Provisions

          (a) Evidence of coverage described above in Section A-18.1 1 shall
     state that coverage provided is primary and is not excess to or
     contributing with any insurance or self-insurance maintained by PGandE.

          (b) PGandE shall have the right to inspect or obtain a copy of the
     original policy(ies) of insurance.


                                      A-22
<PAGE>

          (c) Seller shall furnish the required certificates' and endorsements
     to PGandE prior to commencing operation.


          (d) All insurance certificates', endorsements, cancellations,
     terminations, alterations, and material changes of such insurance shall be
     issued and submitted to the following:


                     PACIFIC GAS AND ELECTRIC COMPANY
                     Attention: Manager - Insurance Department
                     77   Beale Street, Room E280
                     San Francisco, CA 94106



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

     1    A governmental agency qualifying to maintain self-insurance should
          provide a statement of self-insurance.


                                      A-23
<PAGE>

                                   APPENDIX B

                             ENERGY PAYMENT OPTIONS



          Energy Payment Option 1 - Forecasted Energy Prices


          Pursuant to Article 4, the energy payment calculation for Seller's
     energy deliveries during each year of the fixed price period shall include
     the appropriate prices for such year in Table B-l, multiplied by the
     percentage Seller has specified in Article 4. If Seller has selected
     Curtailment Option B in Article 7, the forecasted off-peak hours' energy
     prices listed in Table B-1 shall be adjusted upward by 7.7% for Period A
     and 9.6% for Period B.


                                      B-1
<PAGE>

                                    TABLE B-I

                        Forecasted Energy Price Schedule


<TABLE>
<CAPTION>
                            Forecasted Energy Prices*, (cent)/kWh
     Year of                -------------------------------------
     Energy                  Period A                        Period B             Weighted
     Deliv-     ------------------------------  -------------------------------  Annual
     eries      On-Peak  Partial-Peak Off-Peak  On-Peak  Partial-Peak  Off-Peak  Average
     -----      -------  ------------ --------  -------  ------------  --------  -------

       <S>        <C>       <C>         <C>       <C>        <C>         <C>       <C>
       1983       5.36      5.12        4.94      5.44       5.31        5.19      5.18
       1984       5.66      5.40        5.22      5.74       5.61        5.48      5.47
       1985       5.75      5.48        5.30      5.83       5.69        5.56      5.55

       1986       5.99      5.72        5.52      6.08       5.94        5.80      5.79
       1987       6.38      6.08        5.88      6.47       6.32        6.17      6.16
       1988       6.94      6.62        6.39      7.03       6.87        6.71      6.70

       1989       7.60      7.25        7.00      7.70       7.53        7.35      7.34
       1990       8.12      7.74        7.48      8.23       8.04        7.85      7.84
       1991       8.64      8.24        7.96      8.75       8.56        8.35      8.34

       1992       9.33      8.90        8.60      9.46       9.24        9.02      9.01
       1993      10.10      9.63        9.30     10.23      10.00        9.76      9.75
       1994      10.91     10.41       10.06     11.06      10.81       10.55     10.54

       1995      11.79     11.25       10.87     11.96      11.68       11.40     11.39
       1996      12.67     12.09       11.68     12.85      12.56       12.25     12.24
       1997      13.61     12.98       12.54     13.79      13.48       13.15     13.14
</TABLE>


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

     *    These prices are differentiated by the time periods as defined in
          Table B-4.


                                      B-2
<PAGE>

     Energy Payment option 2 - Levelized Energy Prices

          Pursuant to Article 4, the energy payment calculation. for Seller's
     energy deliveries during the fixed price period shall include the
     appropriate prices set forth in Table B-2 for the year in which energy
     deliveries begin and term of agreement, multiplied by the percentage Seller
     has specified in Article 4. If Seller has selected Curtailment Option B in
     Article 7, the levelized off-peak hours' energy prices listed in Table B-2
     shall be adjusted upward by 7.7% for Period A and 9.6% for Period B. The
     discount specified in (c)(vi) below, if applicable; will be applied to the
     energy payments during the fixed price period.


          During the fixed price period, Seller shall be subject to the
     following conditions and terms:


     (a)  Minimum Damages

          The Parties agree that the levelized energy prices which PGandE pays
          Seller for the energy which Seller delivers to PGandE is based on the
          agreed value to PGandE of Seller's energy deliveries during the entire
          fixed price period. In the event PGandE does not receive such full
          performance by reason of a termination, Seller shall pay PGandE an
          amount based on the difference between the net present values, at the


                                      B-3
<PAGE>

          time of termination, of the payments Seller would receive at the
          forecasted energy prices in Table B-1 and the payments Seller would
          receive at the levelized energy prices, for the remaining years of the
          fixed price period. This amount shall be calculated by assuming that
          Seller continued to generate for the remaining years of the fixed
          price period at a level equal to the average annual energy generation
          during the period of performance, and by applying the weighted annual
          average levelized price applicable to Seller's Facility and the
          weighted annual average forecasted energy prices in Table B-i for the
          remaining years of the fixed E rice period. The following formula
          shall be used to make this calculation:

                                 Y     (Fn)(A)(W)        Y    (L)(A)(W)
                           P =         ----------   -          ---------
                               (Sigma)  (1.15)n       (Sigma)  (1.15)n
                                 n=1                    n=1

          where:



                P    =   amount due PGandE.

                Y    =   number of years remaining in the fixed price period.

                Fn   =   weighted annual average forecasted energy price in the
                         ninth year after the breach, failure to perform, or
                         expiration of security, as shown in Table B-1 for the
                         corresponding calendar year.


                                      B-4
<PAGE>

                L    =   weighted annual average levelized energy price
                         applicable to Seller's Facility.

                A    =   average annual energy generation by Seller during the
                         period of performance.

                n    =   summation index; refers to the nth year following
                         termination.

                W    =   percent of Seller's energy payments based on the
                         levelized energy prices, as specified in Article 4.



     (b)  Performance Requirements

          Seller shall operate and maintain the Facility in accordance with
          prudent electrical practices in order to maximize the likelihood that
          the Facility's output as delivered to PGandE during the part of the
          fixed price period when the levelized price is below the forecasted
          price ("last part") shall equal or exceed 70% of the Facility's output
          during the part of the fixed price period when the levelized price is
          above the forecasted price ("first part"). In the event that the
          Facility's output during any year or series of years in the last part
          of the fixed price period is less than 70% of the average annual
          production during the first part of the fixed price period, PGandE
          may, at its discretion (taking into consideration events occurring
          during such year or series of years such as curtailment by PGandE,
          Seller's choice not to operate during adjusted price periods, or


                                      B-5
<PAGE>


          scheduled maintenance including major overhauls, and the probability
          that Seller's future performance will be adequate), either' request
          payment from Seller or immediately draw on the security posted, up to
          the amount equal to


          P x A-B,
              ---- , where:
               A

               P and A are as defined in Section (a) above.
               B  = Seller's average annual energy generation during the year or
               series of years in which the 70% performance requirement was not
               met.


          PGandE shall not request payment from Seller or draw on the security
          posted if the Facility's output during the last part of the fixed
          price period falls below 70% of the average annual energy generation
          during the first part of the fixed Brice period solely because of
          force majeure as defined in Section A-8, Appendix A or a lack of or
          limited availability of the primary energy resource of the Facility,
          if such energy resource is wind, water, or sunlight.


     (c)  Security



          (1)  As security for amounts which Seller may be obligated to pay
               PGandE pursuant- to Sections (a) and (b) above, Seller shall
               provide and maintain one or more of the following in an amount as
               described in Section (c)(2) below.


                                      B-6
<PAGE>

          (i)  An irrevocable bank letter of credit, delivered to and in favor
               of PGandE with terms acceptable to PGandE.

          (ii) A payment bond providing for payment to PGandE in the event of
               any failure to meet the performance requirements set forth in
               Section (b) above or breach of this Agreement by Seller. Such
               bond shall be issued by a surety company acceptable to PGandE and
               shall have terms acceptable to PGandE.


          (iii) Fully paid up, noncancellable Project Failure Insurance made
               payable to PGandE with terms of such policy(ies) acceptable to
               PGandE.

          (iv) A performance bond providing for payment to PGandE in the event
               of any failure to meet the performance requirements set forth in
               Section (b) above or breach of this Agreement by Seller. Such
               bond shall be issued by a surety company acceptable to PGandE and
               shall have terms acceptable to PGandE.


          (v)  A corporate guarantee of payment to PGandE which PGandE deems, in
               its sole discretion, to provide at least the same quality of


                                      B-7
<PAGE>

               security as subsections (i) through (iv) above.



          (vi) Other forms of security which PGandE does not deem to be
               equivalent security to those listed in subsections (i) through
               (v) above, and which PGandE, in its sole discretion, deems
               adequate. Such other forms of security may include, for example,
               a corporate guarantee or a lien, mortgage or deed of trust on the
               Facility or land upon which it is located. A 1.5% discount will
               be applied against the levelized energy price portion of PGandE's
               payments to Seller during the fixed price period if this type of
               security is provided.


     (2)  (i)  Commencing 90 days prior to the scheduled operation date and
               continuing until December 1 of the following calendar year,
               security as described in Section (c)(1) above shall be in place
               in an amount calculated in accordance with the formula set forth
               in Section (a) above, assuming Seller delivered energy through
               the and of the following calendar year and then terminated this
               Agreement. For purposes of determining the required amount of


                                      B-8
<PAGE>

               security, it shall be assumed that Seller's deliveries through
               the end of the following calendar year would. equal R x C x H,
               where:


                    R  =   nameplate rating, in kW, of the Facility.

                    C  =   estimated capacity factor of the Facility, which
                           shall be established by mutual agreement of the
                           Parties at the time of execution of this Agreement.

                    H  =   number of hours from the scheduled operation date
                           through the end of the following calendar year.


          (ii) In the second calendar year of operation and each year thereafter
               until the end of the fixed price period, from December 1 through
               December 1 of the following year, security I shall be in place in
               an amount calculated by the formula set forth in Section (a)
               above assuming Seller continued to deliver energy in each month
               through the and of the following calendar year, at a level equal
               to the average monthly energy deliveries to date, and then
               terminated this Agreement.


                                      B-9
<PAGE>

          (3)  Security must be maintained throughout the fixed price period as
               specified above. Any security with a fixed expiration date must
               be renewed by, Seller prior to that date. If such security is not
               renewed at least 30 days prior to its expiration, PGandE may, at
               its discretion, either request payment from Seller or immediately
               draw on the security posted, up to the amount calculated in
               accordance with the formula set forth in Section (a) above.


          (4)  If, at any time during the fixed price period, PGandE believes
               Seller is in material breach of this Agreement, PGandE shall so
               notify Seller in writing and Seller must remedy such breach
               within a reasonable period of time. If Seller does not so remedy,
               PGandE may, at its discretion, either request payment from Seller
               or immediately draw upon the security posted, up to the amount
               calculated in accordance with the formula set forth in Section
               (a) above, provided that if during Seller's period to remedy,
               Seller disputes PGandE's conclusion that Seller is in material
               breach, and PGandE elects to draw upon the security, the amount
               drawn upon by PGandE shall be deposited in an interest earning
               escrow account and held in such account until the dispute is
               resolved in accordance with Section (c)(5) below.


                                      B-10
<PAGE>

          (5)  Upon the written request of either Party, any controversy or
               dispute between the Parties concerning Section (c)(4) above shall
               be subject to arbitration in accordance with the provisions of
               the California Arbitration Act, Sections 1280-1294.2 of the
               California Code of Civil Procedure except as provided otherwise
               in this section. Either Party may demand arbitration by first
               giving written notice of the existence of a dispute and then
               within 30 days of such notice giving a second written notice of
               the demand for arbitration.

               Within ten days after receipt of the demand for arbitration, each
               Party shall appoint one person, who shall not be an employee of
               either Party, to hear and determine the dispute. After both
               arbitrators have been appointed, they shall within five (5) days
               select a third arbitrator.


               The arbitration hearing shall take place in San Francisco,
               California, within 30 days of the appointment of the arbitrators,
               at such time and place as they select. The arbitrators shall give
               written notice of the time of the bearing to both Parties at
               least ten days prior to the hearing. The arbitrators shall not be
               authorized to alter, extend, or modify the terms of this
               Agreement. At the hearing, each Party shall submit a proposed


                                      B-11
<PAGE>

               written decision, and any relevant evidence may be presented. The
               decision of the arbitrators must' consist of selection of one of
               the two proposed decisions, in its entirety.

               The decision of any two arbitrators shall be binding and
               conclusive as to disputes relating to Section (c)(4) only. Upon
               determining the matter, the arbitrators shall promptly execute
               and acknowledge their decision and deliver a copy to each Party.
               A judgment confirming the award may be rendered by any superior
               court having jurisdiction. Each Party shall bear its own
               arbitration costs and expenses, including the cost of the
               arbitrator it selected, and the costs and expenses of the third
               arbitrator shall be divided equally between both Parties, except
               as provided otherwise elsewhere in this Agreement.

               Pending resolution of any controversy or dispute hereunder,
               performance by each Party shall continue so as to maintain the
               status quo prior to notice of such controversy or dispute.
               Resolution of the controversy or dispute shall include payment of
               any interest accrued in the escrow account.


                                      B-12
<PAGE>

                                    TABLE B-2
                         Levelized Energy Price Schedule
<TABLE>
<CAPTION>
          For a term of agreement of 15-16 years:

          Year in
          Which                    Levelized Energy Prices*, (cent)/kWh
          Energy                   ------------------------------------
          Deliv-               Period A                         Period B              Weighted
          eries     -------------------------------  -------------------------------  Annual
          Begin     On-Peak  Partial-Peak  Off-Peak  on-Peak  Partial-Peak  Off-Peak  Average
          -----     -------  ------------  --------  -------  ------------  --------  -------
          <S>        <C>         <C>         <C>       <C>        <C>         <C>      <C>
          1983       5.76        5.50        5.31      5.85       5.71        5.58     5.57
          1984       6.06        5.78        5.58      6.14       6.00        5.86     5.85
          1985       6.41        6.11        5.91      6.50       6.35        6.20     6.19

          1986       6.85        6.54        6.32      6.95       6.79        6.63     6.62
          1987       7.37        7.03        6.79      7.47       7.30        7.13     7.12
          1988       7.96        7.60        7.34      8.07       7.89        7.70     7.69

          For a term of agreement of 17-19 years:

          Year in
          Which                    Levelized Energy Prices*, (cent)/kWh
          Energy                   ------------------------------------
          Deliv-               Period A                         Period B              Weighted
          eries     -------------------------------  -------------------------------  Annual
          Begin     On-Peak  Partial-Peak  Off-Peak  on-Peak  Partial-Peak  Off-Peak  Average
          -----     -------  ------------  --------  -------  ------------  --------  -------
          1983       5.90        5.63        5.44      5.98       5.84        5.71     5.70
          1984       6.23        5.95        5.74      6.32       6.18        6.03     6.02
          1985       6.60        6.30        6.08      6.69       6.53        6.38     6.37

          1986       7.06        6.73        6.51      7.16       7.00        6.83     6.82
          1987       7.60        7.25        7.00      7.70       7.53        7.35     7.34
          1988       8.21        7.83        7.57      8.32       8.13        7.94     7.93

          For a term of agreement of 20-30 years:

          Year in
          Which                    Levelized Energy Prices*, (cent)/kWh
          Energy                   ------------------------------------
          Deliv-               Period A                         Period B              Weighted
          eries     -------------------------------  -------------------------------  Annual
          Begin     On-Peak  Partial-Peak  Off-Peak  on-Peak  Partial-Peak  Off-Peak  Average
          -----     -------  ------------  --------  -------  ------------  --------  -------
          1983       6.49        6.20        5.98      6.58       6.43        6.28     6.27
          1984       6.90        6.58        6.35      6.99       6.83        6.67     6.66
          1985       7.34        7.00        6.76      7.44       7.27        7.10     7.09

          1986       7.88        7.51        7.26      7.99       7.81        7.62     7.61
          1987       8.49        8.10        7.82      8.61       8.41        8.21     8.20
          1988       9.16        8.74        8.44      9.29       9.08        8.86     8.85
</TABLE>

          -----------------
          * These prices are differentiated by the time periods as defined in
            Table B-4.


                                      B-13
<PAGE>

          Energy Payment Option 3    - Incremental Energy Rate


          During the period specified in Article 4, annual adjustments to
     Seller's energy payments shall be made as described below.



          At the end of each calendar year, the Derived Incremental Energy Rate
     (with units expressed in Btu/kWh) will be calculated as follows:



          Derived Incremental Energy Rate (DIER)= B
                                                -----
                                                A x C

          where:



               A    = the total kWh delivered by Seller during the calendar
                    year, excluding any kWh delivered when Seller was asked to
                    curtail deliveries under Curtailment Option A or when Seller
                    was asked to take adjusted prices under Curtailment Option
                    B.

               B    = the total dollars paid for the energy described for A
                    above.

               C    = the weighted average price paid during the calendar year
                    by PGandE's Electric Department for oil and natural gas for
                    PGandE's fossil steam plants, expressed in $/Btu on a gas
                    Btu basis.


                                      B-14
<PAGE>

          If the DIER is between the upper and lower Incremental Energy Rate
     Bounds specified for that year in Table B-3 for the curtailment option
     selected by Seller, no additional payment is due either Party.

          If the DIER is below the lower Incremental Energy Rate Bound, PGandE
     shall pay Seller an amount calculated as follows:


                     (Lower Incremental
          PS  =       Energy Rate Bound   - DIER)(A)(C)

          where:

          PS   =      additional payment due Seller.
          DIER =      Derived Incremental Energy Rate.

          PGandE shall add this payment to the first payment made to Seller
     following the calculation.

          If the DIER is above the upper Incremental Energy Rate Bound, Seller
     shall pay PGandE an amount calculated as follows:

          PB   =     (DIER - Upper Incremental) (A)(C)
                      Energy Rate Bound

          where:

          PS   =      amount due PGandE.
          DIER =      Derived Incremental Energy Rate.


                                      B-15
<PAGE>

          This amount shall be deducted from the first payment made to Seller
          following the calculation. If there is any remaining amount due
          PGandE, PCandE may, at its option, invoice Seller' with such payment
          due within 30 days or deduct this amount from future payments due
          Seller.


                                      B-16
<PAGE>


                                    TABLE B-3

                     Forecasted Incremental Energy Rates and
                         Incremental Energy Rate Bounds


          Curtailment Option A:

<TABLE>
<CAPTION>
                                          Incremental
                     Forecasted              Energy        Upper Incremental        Lower Incremental
                     Incremental           Rate Band             Energy                   Energy
                        Energy            Width from          Rate Bound,              Rate Bound,
                        Rates              Article 4            Btu/kWh                  Btu/kWh
                       Btu/kWh              Btu/kWh           (column (a)             [column (a)]
          Year           (a)                  (b)           plus column (b)]        minus column (b)]
          ----           ---                  ---           ----------------        -----------------
          <S>           <C>
          1984          9,000             -----------         -----------              -----------
          1985          9,050             -----------         -----------              -----------

          1986          8,840             -----------         -----------              -----------
          1987          8,850             -----------         -----------              -----------
          1988          8,960             -----------         -----------              -----------

          1989          8,820             -----------         -----------              -----------
          1990          8,540             -----------         -----------              -----------
          1991          8,540             -----------         -----------              -----------

          1992          8,540             -----------         -----------              -----------
          1993          8,540             -----------         -----------              -----------
          1994          8,540             -----------         -----------              -----------

          1995          8,540             -----------         -----------              -----------
          1996          8,540             -----------         -----------              -----------
          1997          8,540             -----------         -----------              -----------

          1998          8,540             -----------         ------------             -----------
</TABLE>


                                      B-17
<PAGE>

                              TABLE B-3 (continued)

<TABLE>
<CAPTION>
          Curtailment Option B:

                                           Incremental
                     Forecasted              Energy        Upper Incremental        Lower Incremental
                     Incremental           Rate Band             Energy                   Energy
                        Energy            Width from          Rate Bound,              Rate Bound,
                        Rates              Article 4            Btu/kWh                  Btu/kWh
                       Btu/kWh              Btu/kWh           (column (a)             [column (a)]
          Year           (a)                  (b)           plus column (b)]        minus column (b)]
          ----           ---                  ---           ----------------        -----------------
          <S>           <C>
          1984          9,440             -----------         -----------              -----------
          1985          9,500             -----------         -----------              -----------

          1986          9,280             -----------         -----------              -----------
          1987          9,290             -----------         -----------              -----------
          1988          9,400             -----------         -----------              -----------

          1989          9,270             -----------         -----------              -----------
          1990          8,970             -----------         -----------              -----------
          1991          8,970             -----------         -----------              -----------

          1992          8,970             -----------         -----------              -----------
          1993          8,970             -----------         -----------              -----------
          1994          8,970             -----------         -----------              -----------

          1995          8,970             -----------         -----------              -----------
          1996          8,970             -----------         -----------              -----------
          1997          8,970             -----------         -----------              -----------

          1998          8,970             -----------         ------------             -----------
</TABLE>


                                      B-18
<PAGE>

                                    TABLE B-4
                                  Time Periods

<TABLE>
<CAPTION>
                                              Monday                       Sundays
                                              through                        and
                                              Friday2      Saturdays2     Holidays
                                              -------      ----------     --------

Seasonal Period A
May 1 through September 30)

          <S>                                <C>           <C>             <C>
          On-Peak                            12:30 p.m.
                                                 to
                                              6:30 p.m.

          Partial-Peak                        8:30 a.m      8:30 a.m.
                                                 to            to
                                             12:30 p.m     10:30 p.m.

                                              6:30 p.m
                                                 to
                                             10:30 p.m

          Off-Peak                           10:30 p.m.    10:30 p.m.      All Day
                                                 to            to
                                              8:30 a.m.     8:30 a.m.


          Seasonal Period B
           (October 1 through April 30)

          On-Peak                             4:30 p.m
                                                 to
                                              8:30 p.m

          Partial -Peak                       8:30 p.m.     8:30 a.m.
                                                 to            to
                                             10:30 p.m.    10:30 p.m.
                                              8:30 a.m.
                                                 to
                                              4:30 p.m.

          Off-Peak                           10:30 p.m.    10:30 p.m.      All Day
                                                 to            to
                                              4:30 p.m.     8:30 a.m.
</TABLE>


          -----------------
          1    This table is subject to change to accord with the on-peak,
               partial peak, and off-peak periods as defined in PGandE's own
               rate schedules for the sale of electricity to its large
               industrial customers.

          2    Except the following holidays: New Year's Day, Washington's
               birthday, Memorial Day, Independence Day, Labor Day, Veteran's
               Day. Thanksgiving Day, and Christmas Day, as specified in Public
               Law 90-363 (5 U.S.C.A. Section 6103(a)).


                                      B-19
<PAGE>

                                   TABLE B-5

                                  ENERGY PRICES

                   Energy Prices Effective February1I - April 30, 1905

          The energy purchase price calculations which will apply to energy
     deliveries determined from.. meter readings taken during February. March.
     and April 1986, are as follows:

<TABLE>
<CAPTION>
                                         (a)                    (b)                   (c)                         (d)
                                                                               Revenue Requirement          Energy Purchase
                                     Incremental                                    for Cash                     Price4
          Time Period                Energy Rate1        cost of Energy2       Working,Cap1tal3           (d)= [(a) x (b)] + (c)
          ----------                 ------------        ---------------           --------               ---------------------
                                       (Btu/kWh)            ($/102 Btu)             ($/kWh)                       ($/kWh)
          <S>                          <C>                  <C>                    <C>                           <C>
          February I - April 30
          (Period   B)

          Time of
          Delivery Basis:

            On-Peak                    16,320               5.2394                 0.00053                       0.08604
            Partial-Peak               15,689               5.2394                 0.0005l                       0.06271
            Off-Peak                   11.625               5.2394                 0.00038                       0.06129

          Seasonal Average             13,692               5.2394                 0.00045                       0.07219
           (Period B)
</TABLE>



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

          1    Incremental energy rates (Btu/kWh) for Seasonal Period A and
               Seasonal Period B are derived from the marginal energy costs
               (including variable operating and maintenance expense) adopted by
               the CPUC in Decision No. 83-12-068 (page 339). They are based
               upon natural gas as the incremental fuel and weighted average
               hydroelectric power conditions.

          2    Cost of natural gas under PGandE Gas Schedule No. G-5S effective
               February 1, 1985 per Advice No. 1304-G.

          3    Revenue Requirement for Cash Working Capital as prescribed by the
               CPIIC in Decision No. 83-12-066.

          3    Energy Purchase Price = (Incremental Energy Rate x Cost of
               Energy) Revenue Requirement for Cash Working Capital. The energy
               purchase price excludes the applicable energy line loss
               adjustment factors. however, as ordered by Ordering Paragraph No.
               12(j) of CPUC Decision No. 82-12-120, this figure is currently
               1.0 for transmission and primary distribution loss adjustments
               and is equal to marginal cost line loss adjustment factors for
               the secondary distribution voltage level. These factors may be
               changed by the CPUC in the future. The currently applicable
               energy loss adjustment factors are shown in Table 11-6.


                                      B-20
<PAGE>

                                    TABLE B-6

<TABLE>
<CAPTION>
                         Energy Loss Adjustment Factorsl

                                                                      Primary               Secondary
                                              Transmission          Distribution          Distribution
                                              ------------          ------------          ------------

          <S>                                    <C>                    <C>                 <C>
          Seasonal Period A
           (May 1 through September 30)

            On-Peak                               1.0                   1.0                 1.0148
            Partial-Peak                          1.0                   1.0                 1.0131
            Off-Peak                              1.0                   1.0                 1.0093

          Seasonal Period B
          (October 1 through April 30)

            On-Peak                               1.0                   1.0                 1.0128
            Partial-Peak                          1.0                   1.0                 1.0119
            Off-Peak                              1.0                   1.0                 1.0087
</TABLE>



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

          1    The applicable energy loss adjustment factors may be revised
               pursuant to orders of the CPUC.


                                      B-21
<PAGE>

                                   APPENDIX C

                               CURTAILMENT OPTIONS

          Seller has two options regarding curtailment of energy deliveries and
     Seller has made its selection in Article 7. The two options are as follows:



          CURTAILMENT OPTION A - HYDRO SPILL AND
                                 NEGATIVE AVOIDED COST

          (a) In anticipation of a period of hydro spill conditions, as defined
     by the CPUC, PGandE may notify Seller that any purchases of energy from
     Seller during such period shall be at hydro savings prices quoted by
     PGandE. if Seller delivers energy to PGandE during any such period, Seller
     shall be paid hydro savings prices for those deliveries in lieu of prices
     which would otherwise be applicable. The hydro savings prices shall be
     calculated by PGandE using the following formula:

                                     AQF - S
                                     ------- x PP             (> or equal to 0)
                                       AQF


     where:

          AQF   =   Energy, in kWh, projected to be available during hydro spill
                    conditions from all qualifying facilities under agreements
                    containing hydro savings price provisions.


                                       C-1
<PAGE>

          S     =   Potential energy, in kWh, from PGandE hydro facilities which
                    will be spilled if all AQF is delivered to PGandE.

          PP    =   Potential energy, in kWh, from PGandE hydro facilities which
                    will be spilled if all AQF is delivered to PGandE. Prices
                    published by PGandE for purchases during other than hydro
                    spill conditions.

          PGandE shall give Seller notice of general periods when hydro spill
     conditions are anticipated, and shall give Seller as much advance notice as
     practical of any specific hydro spill period and the hydro savings price
     which will be applicable during such period.


          (b) PGandE shall not be obligated to accept or pay for and may require
     Seller with a Facility with a nameplate rating of one megawatt or greater
     to interrupt or reduce deliveries of energy during periods when PGandE
     would incur negative avoided costs (as defined by the CPUC) due to
     continued acceptance of energy deliveries under this Agreement. Whenever
     possible, PGandE shall give Seller reasonable notice of the possibility
     that interruption or reduction of deliveries may be required.

          (c) Before interrupting or reducing deliveries under subsection (b),
     above, and before invoking hydro savings prices under subsection (a),
     above, PGandE shall take reasonable steps to make economy sales of the
     surplus energy giving rise to the condition. If such economy sales are
     made, while the surplus energy condition exists seller shall be paid at


                                      C-2
<PAGE>

     the economy sales price obtained by PGandE in lieu of the otherwise
     applicable prices.

          (d) If Seller is selling net energy output to PGandE and
     simultaneously purchasing its electrical needs from PGandE and Seller
     elects not to sell energy to PGandE at the hydro savings price pursuant to
     subsection (a) or when PGandE curtails deliveries of energy pursuant to
     subsection (b), Seller shall not use such energy to meet its electrical
     needs but shall continue to purchase all its electrical needs from PGandE.
     If Seller is selling surplus energy output to PGandE, subsections (a) or
     (b) shall only apply to the surplus energy output being delivered to
     PGandE, and Seller can continue to internally use that generation it has
     retained for its own use.



                  CURTAILMENT OPTION B - ADJUSTED PRICE PERIOD

          (a) In each calendar year, the price which PGandE is obligated to pay
     Seller for energy deliveries during 1,000 off-peak hours (as defined in
     Table B-4, Appendix B) may be adjusted to a price equal to, but not in
     excess of, PGandE's available alternative source. This adjusted price shall
     be effective under any of the following conditions:


          (i) when PGandE's energy source at the margin is not a PGandE oil- or
     gas-fueled plant, and PGandE can replace Seller's energy with energy from


                                      C-3
<PAGE>

     this source at a cost less than the price paid to Seller;

          (ii) when PGandE would incur negative avoided costs (as defined by the
     CPUC) due to continued acceptance of energy deliveries under this
     Agreement; or

          (iii) when PGandE is experiencing minimum system operations.

          During any of the conditions described above the adjusted price may be
     zero.

          (b) Whenever possible, PGandE shall give Seller reasonable notice of
     any price adjustment for energy deliveries and its probable duration.

          (c) If Seller is selling net energy output to PGandE and
     simultaneously purchasing its electrical needs from PGandE and Seller
     elects not to sell energy to PGandE at the adjusted price, Seller shall not
     use such energy to meet its electrical needs but shall continue to purchase
     all its electrical needs from PGandE.

          (d) After Seller receives notice of the probable duration of the
     period during which the adjusted price will be paid, Seller may elect to
     perform maintenance during such  period and so inform the PGandE employee


                                      C-4
<PAGE>

          in charge at the designated PGandE switching center prior to the time
          when the adjusted price period is expected to begin. If Seller makes
          such election, the number of off-peak hours of probable duration
          quoted in PGandE's notice to Seller shall be applied to the 1,000-hour
          calendar year limitation set forth in this section. After an election
          to do maintenance, if Seller makes any deliveries of energy during the
          quoted probable duration period, Seller shall be paid the adjusted
          price quoted in its notice from PGandE without regard to any
          subsequent changes on the PGandE system which may alter the adjusted
          price or shorten the actual duration of the condition.


                                      C-5
<PAGE>

                                   APPENDIX D

                              AS-DELIVERED CAPACITY


     D-1 AS-DELIVERED CAPACITY PAYMENT OPTIONS

          Seller has two options for as-delivered capacity payments and Seller
     has made its selection in Article 5. The two options are as follows:



                     AS-DELIVERED CAPACITY PAYMENT OPTION 1

          PGandE shall pay Seller for as-delivered capacity at prices authorized
     from time to time by the CPUC. The as-delivered capacity prices in effect
     on the date of execution are calculated as shown in Exhibit D-l.



                     AS-DELIVERED CAPACITY PAYMENT OPTION 2

          During the fixed price period, the as-delivered capacity prices will
     be calculated in accordance with Exhibit D-1 and the forecasted shortage
     costs in Table D-2.

          For the remaining years of the term of agreement, PGandE shall pay
     Seller for as-delivered capacity at the higher of:


                                      D-1
<PAGE>

          (i) prices authorized from time to time by the, CPUC;


          (ii) the as-delivered capacity prices that were paid Seller in the
               last year of the fixed price period; or


          (iii) the as-delivered capacity prices in effect in the first year
               following the end of the fixed price period, provided that the
               annualized shortage cost from which these prices are derived does
               not exceed the annualized value of a gas turbine.



              D-2 AS-DELIVERED CAPACITY IN EXCESS OF FIRM CAPACITY

          The amount of capacity delivered in excess of firm capacity will be
     considered as-delivered capacity. This as-delivered capacity is based on
     the total kilowatt-hours delivered each month during all on-peak,
     partial-peak and off-peak hours excluding any energy associated with
     generation levels equal to or less than the firm capacity.


          Seller has the two options listed in Section D-1 for payment for such
     as-delivered cam. Seller has made its selection in Article 5.


                                      D-2
<PAGE>

                                   EXHIBIT D-1


          The as-delivered capacity price (in cents per kW-hr) for power
     delivered by the Facility is the product of three factors:



               (a) The shortage cost in each year the Facility is operating.
          Currently, this shortage cost is $60 per kW-year.

               (b) A capacity loss adjustment factor which provides for the
          effect of the deliveries on PGandE's transmission and distribution
          losses based on the Seller's interconnection voltage level. The
          applicable capacity loss adjustment factors for non-remote' Facilities
          are presented in Table D-1(a). Capacity loss adjustment factors for
          remote Facilities shall be calculated individually.


               (e) An allocation factor which accounts for the different values
          of as-delivered capacity in different time periods and converts
          dollars per kW-year to cents per kWh. The current allocation factors
          are presented in Table D-1(b). The time periods to which they apply
          are shown in Table B-4, Appendix B. The allocation factors are subject
          to change from time to time.


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

     1    As defined by the CPUC.


                                      D-3
<PAGE>

                                  TABLE D-1(a)

                        Capacity Loss Adjustment Factors
                           for Non-Remotes Facilities


          Voltage Level                              Loss Adjustment Factor
          -------------                              ----------------------
          Transmission                                       .989
          Primary Distribution                               .991
          Secondary Distribution                             .991


     If the Facility is remote, the capacity loss adjustment factor is _______2.




                                  TABLE D-1(b)

                               Allocation Factors
                           for As-Delivered Capacity3

<TABLE>
<CAPTION>
                                     On-Peak           Partial-Peak           Off-Peak
                                 ((cent)-yr/$-hr)    ((cent)-yr/$-hr)     ((cent)-yr/$-hr
                                 ----------------    ----------------     ---------------
          <S>                         <C>               <C>                   <C>
          Seasonal Period A          .10835             .02055                .00002
          Seasonal Period B          .00896             .00109                .00001
</TABLE>


          -----------------
          1    As defined by the CPUC. The capacity loss adjustment factors for
               remote Facilities are determined individually.

          2    Determined individually.

          3    The units for the allocation factor, cent-yr/$-hr, are derived
               from the conversion of $/kW-yr into 9/kWh as follows:

                          (cent)/kWh     (cent)/kW-hr       (cent)-yr
                          ----------   = ------------  =  -------------
                            $/kW-yr        $/kW-yr            $-hr

          The allocation factors were prescribed by the CPUC in Decision No.
          83-12-068 and are subject to change from time to time.


                                      D-4
<PAGE>

                                    TABLE D-2

                        Forecasted Shortage Cost Schedule


                                                    Forecast Shortage
                Year                                   Cost,$/kW-Yr
                ----                                   ------------

                1983                                       70.
                1984                                       76
                1985                                       81

                1986                                       88
                1987                                       95
                1988                                      102

                1989                                      110
                1990                                      118
                1991                                      126

                1992                                      135
                1993                                      144
                1994                                      154

                1995                                      164
                1996                                      176
                1997                                      188


                                      D-5
<PAGE>

                                   APPENDIX E

                                  FIRM CAPACITY


                                    CONTENTS


          Section                                                        Page
          -------                                                        ----
            E-1        GENERAL                                           E-2

            E-2        PERFORMANCE REQUIREMENTS                          E-2

            E-3        SCHEDULED MAINTENANCEE                            E-4

            E-4        ADJUSTMENTS TO FIRM CAPACITY                      E-5

            E-5        FIRM CAPACITY PAYMENTS                            E-6

            E-6        DETERMINATION OF NATURAL FLOW DATA                E-12

            E-7        THEORETICAL OPERATION STUDY                       E-13

            E-8        DETERMINATION OF AVERAGE DRY                      E-15
                       YEAR CAPACITY RATINGS

            E-9        INFORMATION REQUIREMENTS                          E-15

            E-1O       ILLUSTRATIVE EXAMPLE                              E-16

            E-11       MINIMUM DAMAGES                                   E-19


                                      E-1
<PAGE>

                                   APPENDIX E

                                  FIRM CAPACITY



          E-l  GENERAL

               This Appendix E establishes conditions and prices under which
          PGandE shall pay for firm capacity.


               PGandE's obligation to pay for firm capacity shall begin on the
          firm capacity availability date. The firm capacity price shall be
          subject to adjustment as provided for in this Appendix E.


               The firm capacity prices in Table E-2 are applicable for
          deliveries of firm capacity beginning after December 30, 1982.


          E-2  PERFORMANCE REQUIREMENTS

               (a) To receive full capacity payments, the firm Capacity shall be
          delivered for all of the on-peak hours1 in the peak months on the
          PGandE system, which are presently the months of June, July, and
          August, subject to a 20 percent allowance for forced outages in any
          month. Compliance with this provision shall be based on the Facility's
          total on-peak deliveries for each of the peak



          --------------
          1    On-peak, partial-peak, and off-peak hours are defined in Table
               B-4, Appendix B.


                                      E-2
<PAGE>

     months and shall exclude any energy associated with generation levels
     greater than the firm capacity.


          (b) If Seller is prevented from meeting the performance requirements
     because of a forced outage on the PGandE system, a PGandE curtailment of
     Seller's deliveries, or a condition set forth in Section A-7, Appendix A,
     PGandE shall continue capacity payments. Firm capacity payments will be
     calculated in the same manner used for scheduled maintenance outages.


          (c) If Seller is prevented from meeting the performance requirements
     because of force majeure, PGandE shall continue capacity payments for
     ninety days from the occurrence of the force majeure. Thereafter, Seller
     shall be deemed to have failed to have met the performance requirements.
     Firm capacity payments will be calculated in the same manner used for
     scheduled maintenance outages.


          (d) If Seller is prevented from meeting the performance requirements
     because of exteme dry year conditions, PGandE shall continue capacity
     payments. Extreme dry year conditions are drier than those used to
     establish firm capacity pursuant to Section E-8. Seller shall warrant to
     PGandE that the Facility is a hydroelectric facility and that such
     conditions are the sole cause of Seller's inability to meet its firm
     capacity obligations.


                                      E-3
<PAGE>

          (e) If Seller is prevented from meeting the performance requirements
     for reasons other than those described above in Sections E-2(b), (c), or
     (d):

               (1) Seller shall receive the reduced firm capacity payments as
          provided in Section E-5 for a probationary period not to exceed 15
          months, or as otherwise agreed to by the Parties.

               (2) If, at the end of the probationary period Seller has not
          demonstrated that the Facility can meet the performance requirements,
          PGandE may derate the firm capacity pursuant to Section E-4(b).



     E-3 SCHEDULED MAINTENANCE



               Outage periods for scheduled maintenance shall not exceed 840
          hours (35 days) in any 12-month period. This allowance may be used in
          increments of an hour or longer on a consecutive or nonconsecutive
          basis. Seller may accumulate unused maintenance hours from one
          12-month period to another up to a maximum of 1,080 hours (45 days).
          This accrued time must be used consecutively and only for major
          overhaul's. Seller shall provide PGandE with the following advance
          notices: 24 hours for scheduled outages less than one day, one week
          for a scheduled outage of one day or more (except for major
          overhauls), and six months for a major overhaul. Seller shall not
          schedule major overhauls during the peak months (presently June, July
          and August). Seller shall make reasonable efforts to schedule or
          reschedule routine maintenance outside the peak months, and in no


                                       E-4
<PAGE>


          event shall outages for scheduled maintenance exceed 30 peak hours
          during the peak months. Seller shall confirm in writing to. PGandE
          pursuant to Article 9, within 24 hours of the original notice, all
          notices Seller gives personally or by telephone for scheduled
          maintenance.

               If Seller has selected Curtailment Option B, off-peak hours of
          maintenance performed pursuant to Section (d) of Curtailment Option B,
          Appendix C shall not be deducted from Seller's scheduled maintenance
          allowances set forth above.


          E-4     ADJUSTMENTS TO FIRM CAPACITY


               (a) Seller may increase the firm capacity with the approval of
          PGandE and receive payment for the additional capacity thereafter in
          accordance with the applicable capacity purchase price published by
          PGandE at the time the increase is first delivered to PGandE.


               (b) Seller may reduce the firm capacity at any time prior to the
          firm capacity availability date by giving written notice thereof to
          PGandE. PGandE may derate the firm capacity in accordance with Section
          E-2(e) as a result of appropriate data showing Seller has failed to
          meet the performance requirements of Section E-2.


                                      E-5
<PAGE>

          E-5  FIRM CAPACITY PAYMENTS


               The method for calculation of firm capacity payments is. shown
          below. As used below in this section, month refers to a calendar
          month.



               The monthly payment for firm capacity will be the product of the
          Period Price Factor (PPF), the Monthly Delivered Capacity (MDC), the
          appropriate capacity loss adjustment factor from Table E-1 based on
          the Facility's interconnection voltage, and the appropriate
          performance bonus factor, if any, from Table E-3, plus any allowable
          payment for outages due to scheduled maintenance. The firm capacity
          price shall be applied to meter readings taken during the separate
          times and periods as illustrated in Table B-4, Appendix B.

               The PPF is determined by multiplying the firm capacity price by
          the following Allocation Factors1:

                                                       Firm
                                                       ----             PPF
                         Allocation Factor   X   Capacity Price  = ($/kW-month)
                                                 --------------

          Seasonal           .18540             --------------     -----------
          Period A

          Seasonal           .01043             --------------     -----------
          Period B


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

          1    These allocation factors were prescribed by the CPUC in Decision
               No. 83-12-068. All allocation factors are subject to change by
               PGandE based on PGandE's marginal capacity cost allocation, as
               determined in general rate case proceedings before the CPUC.
               Seasonal Periods A end and B are defined in Table B-4, Appendix
               B.


                                      E-6
<PAGE>

          The MDC is determined in the following manner:

               (1) Determine the Performance Factor (P), which is defined as the
          lesser of 1.0 or the following quantity:

                          P  =         A
                               -----------------        (< or = 1.0)
                               C x (B-S) x (0.8*)

          Where:

               A =  Total kilowatt-hours delivered during all on-peak and
                    partial-peak hours excluding any energy associated with
                    generation levels greater than the firm capacity.

               C =  Firm capacity in kilowatts.

               B =  Total on-peak and partial-peak hours during the month.

               S =  Total on-peak and partial-peak hours during the month
                    Facility is out of service on scheduled maintenance.

               (2) Determine the Monthly Capacity Factor (MCF), which is
          computed using the following expression:



                          MCF = P x (1.0 - M)
                                          ---
                                           D

          Where:

               M =  The number of hours during the month Facility is out of
                    service on scheduled maintenance.

               D =  The number of hours in the month.


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

          * 0.8 reflects a 20% allowance for forced outage.


                                      E-7
<PAGE>

          (3) Determine the MDC by multiplying the MCF by C;

                          MDC  (kilowatts) = MCF x C

               The monthly payment for firm capacity is then determined by
          multiplying the PPF by the MDC, by the appropriate capacity loss
          adjustment factor presented from Table E-l, and by the appropriate
          performance bonus factor, if any, from Table E-3.

          monthly payment
          for firm capacity = PPF x MDC x   capacity loss   x performance
                                          adjustment factor   bonus factor

               Furthermore, the payment for a month in which there is an outage
          for scheduled maintenance shall also include an amount equal to the
          product of the average hourly firm capacity payment' for the most
          recent month in the same type of Seasonal Period (i.e., Seasonal
          Period A or Seasonal Period B) during which deliveries were made times
          the number of hours of outage for scheduled maintenance in the current
          month. Firm capacity payments will continue during the outage periods
          for scheduled maintenance provided that the provisions of Section E-3
          are met.

               During a probationary period Seller's monthly payment for firm
          capacity shall be determined by substituting for the firm capacity,



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

          1    Total monthly payment divided by the total number of hours in the
               monthly billing period.


                                      E-8
<PAGE>

          the capacity at which Seller would have met the performance
          requirements. In the event that during the probationary period Seller
          does not meet the performance requirements at whatever firm capacity
          was established for the previous month, Seller's monthly payment for
          firm capacity shall be determined by substituting the firm capacity at
          which Seller would have met the performance requirements. The
          performance bonus factor shall not be applied during probationary
          periods.




                                    TABLE E-1

          If the Facility is non-remote1 the firm capacity loss adjustment
          factors are as follows:


          Voltage Level                                Loss Adjustment Factor
          -------------                                ----------------------
          Transmission                                         .989

          Primary Distribution                                 .991

          Secondary Distribution                               .991



          If the' Facility is remote the firm capacity loss adjustment factor is
          _______________2


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

            1  Is defined by the CPUC.

            2  Determined individually.


                                      E-9
<PAGE>

                                    TABLE E-2

                          Firm Capacity Price Schedule
                          ----------------------------
                              (Levelized $/kW-year
<TABLE>
<CAPTION>
             Firm
           Capacity
            Avail-
           ability
             Date               Number of Years of Firm Capacity Delivery
             ----               -----------------------------------------
             ------- -----------------------------------------------------------------------------------------
             (Year)   1    2    3     4    5    6    7    8    9   10   11   12    13   14   15     20   25   30
             -------  -    -    -     -    -    -    -    -    -   --   --   --    --   --   --     --   --   --
            <S>      <C>  <C>  <C>   <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>   <C>  <C>   <C>
             1982    65   68    70    72   75   77   79   81   84   86   88   90   91   93    95   103  109  113

             1983    70   73    75    78   80   83   85   88   90   92   94   96   98  100   102   110  117  122

             1984    76   78    81    84   86   89   92   94   97   99  101  103  106  108   110   118  125  130

             1985    81   84    87    90   93   96   99  101  104  106  109  111  113  115   118   127  134  140

             1986    88   91    94    97  100  103  106  109  112  114  117  119  122  124   126   136  144  150

             1987    95   98   101   105  108  111  114  117  120  123  125  128  130  133   135   146  154  160
</TABLE>


                                      E-10
<PAGE>

                                    TABLE E-3


                            Performance Bonus Factor


               The following shall be the performance bonus factors applicable
          to the calculation of the monthly payments for firm capacity delivered
          by the Facility after it has demonstrated a firm capacity factor in
          excess of 85%.


                            DEMONSTRATED
                        FIRM CAPACITY FACTOR                      PERFORMANCE
                                 (%)                             BONUS FACTOR
                                 ---                             ------------

                                 85                                1.000
                                 90                                1.059
                                 95                                1.118
                                100                                1.176


               After the Facility has delivered power during the span of all of
          the peak months on the PGandE system (presently June, July, and
          August) in any year (span),



               (i) the firm capacity factor for each such month shall be
          calculated in the following manner:


                           FIRM CAPACITY FACTOR (%) =       F
                                                       ---------  x 100
                                                      (N-W) x Q


          Where:


               F  = Total kilowatt-hours delivered by Seller in any peak month
                    during all on-peak hours excluding any energy associated
                    with generation levels greater than the firm capacity.


                                      E-11
<PAGE>

               N =  Total on-peak hours during the month.

               W =  Total on-peak hours during the peak month that the Facility
                    is out of service on scheduled, maintenance.

               Q =  Firm capacity in kilowatts.


               (ii) the arithmetic average of the above firm capacity factors
          shall be determined for that span,

               (iii) the average of the above arithmetic average firm capacity
          factors for the most recent span(s), not to exceed 5, shall be
          calculated and shall become the Demonstrated Firm Capacity Factor.

               To calculate the performance bonus factor for a Demonstrated Firm
          Capacity Factor not shown in Table E-3 use the following formula:


          Performance Bonus Factor = Demonstrated Firm Capacity- Factor %
                                     -------------------------------------
                                                     85%


          SECTIONS E-6 THROUGH E-10 SHALL APPLY ONLY TO HYDROELECTRIC PROJECTS
          --------------------------------------------------------------------


          E-6  DETERMINATION OF NATURAL FLOW DATA



               Natural flow data shall be based on a period of record of at
          least 50 years and which includes historic critically dry periods.


                                      E-12
<PAGE>

          In the event Seller demonstrates that a natural flow data base of at
          least50 years would be unreasonably burdensome, PGandE shall accept a
          shorter, period of record with a corresponding reduction in the
          averaging basis set forth in section E-8. Seller shall determine the
          natural flow data by month by using one of the following methods:


                                    Method 1

               If stream flow records are available from a recognized gauging
          station on the water course being developed in the general vicinity of
          the project, Seller may use the data from them directly.


                                    Method 2

               If directly applicable flow records are not available, Seller may
          develop theoretical natural flows based on correlation with available
          flow data for the closest adjacent and similar area which has a
          recognized gauging station' using generally accepted hydrologic
          estimating methods.


          E-7  THEORETICAL OPERATION STUDY

               Based on the monthly natural flow data developed under Section
          E-6 a theoretical operation study shall be prepared by seller. Such a


                                      E-13
<PAGE>

          study shall identify the monthly capacity rating in kW and the monthly
          energy production in kWh for each month of each year. The study shall
          take into account. all relevant operating constraints, limitations,
          and requirements including but not limited to --

               (1) Release requirements for support of fish life and any other
          operating constraints imposed on the project;

               (2) Operating characteristics of the proposed equipment of the
          Facility such as efficiencies, minimum and maximum operating levels,
          project control procedures, etc.;

               (3) The design characteristics of project facilities such as head
          losses in penstocks, valves, tailwater elevation levels, etc.; and

               (4) Release requirements for purposes other than power generation
          such as irrigation, domestic water supply, etc.

               The theoretical operation study for each month shall assume an
          even distribution of generation throughout the month unless Seller can
          demonstrate that the Facility has water storage characteristics. For
          the study to show monthly capacity ratings, the Facility shall be
          capable of operating during all on-peak hours in the peak months on
          the PGandE system, which are presently the months of June, July, and
          August. If the project does not have this capability throughout each
          such month, the capacity rating in that month of that year shall be
          set at zero for purposes of this theoretical operation study.


                                      E-14
<PAGE>

          E-8  DETERMINATION OF AVERAGE DRY YEAR CAPACITY RATINGS

               Based on the results of the theoretical operation study,
          developed under Section E-7, the average dry year capacity rating
          shall be established for each month. The average dry year shall be
          based on the average of the five years of the lowest annual generation
          as shown in the theoretical operation study. once such years of lowest
          annual generation are identified, the monthly capacity rating is
          determined for each month by averaging the capacity ratings from each
          month of those years. The firm capacity shown in Article 5 shall not
          exceed the lowest average dry year monthly capacity ratings for the
          peak months on the PGandE system, which are presently the months of
          June, July, and August.

          E-9  INFORMATION REQUIREMENTS


               Seller shall provide the following information to PGandE for its
          review:

               (1) A summary of the average dry year capacity ratings based on
          the theoretical operation study as provided in Table E-4;

               (2) A topographic project map which shows the location of all
          aspects of the Facility and locations of stream gauging stations used
          to determine natural flow data;

               (3) A discussion of all major factors relevant to project
          operation;


                                      E-15
<PAGE>

               (4) A discussion of the methods and procedures used to establish
          the natural flow data. This discussion shall be in sufficient detail
          for PGandE to determine that the, methods are consistent with those
          outlined in Section E-6 and are consistent with generally accepted
          engineering practices; and

               (5) Upon specific written request by PGandE, Seller's theoretical
          operation study.



          E-10 ILLUSTRATIVE EXAMPLE



               (1) Determine natural flows - These flows are developed based on
          historic stream gauging records and are compiled by month, for a
          long-term period (normally at least 50 years or more) which covers dry
          periods which historically occurred in the 1920's and 30's and more
          recently in 1976 and 77. In all but unusual situations this will
          require application of hydrological engineering methods to records
          that are available, primarily from the USGS publication "Water
          Resources Data for California".



               (2) Perform theoretical operation study - Using the natural flow
          data compiled under (1) above a theoretical operation study is
          prepared which determines, for each month of each year, energy
          generation (kWh) and capacity rating (KW). This study is performed
          based on the Facility design, operating capabilities, constraints,
          etc., and should take into account all factors relevant to project


                                      E-16
<PAGE>

          operation. Generally such a study is done by computer which routes the
          natural flows through project features, considering additions and
          withdrawals from storage, spill, past the project, releases for
          support of fish life, etc., to determine flow available for
          generation. Then the generation and capacity amounts are computed
          based on equipment performance, efficiencies, etc.


               (3) Determine average dry year capacity ratings - After the
          theoretical project operation study is complete the five years in
          which the annual generation (kWh) would have been the lowest are
          identified. Then for each month, the capacity rating (kW) is averaged
          for the five years to arrive at a monthly average capacity rating. The
          firm capacity is then set by the Seller based on the monthly average
          dry year capacity ratings and the performance requirements of this
          appendix. An example project is shown in the attached completed Table
          E-4.


                                      E-17
<PAGE>

                                     EXAMPLE
                                    TABLE E-4


                     Summary of Theoretical Operation Study


          Project:  New Creek 1

          Water Source: West Fork New Creek

          Mode of Operation: Run of the river

          Type of Turbine: Francis Design Flow: 100 cfs Design Head: 150 feet

          Operating Characteristics1:

<TABLE>
<CAPTION>
                                  Flow        Head   (feet)    Output      Efficiency %)
                                  ----        ------------     ------     --------------
                                 (cfs)        Gross    Net      (kW)     Turbine    Generator
                                 -----        -----   ----      ----     -------    ---------

          <S>                     <C>          <C>     <C>      <C>         <C>       <C>
          Normal Operation        100          160     150      1,120       90        98
          Maximum Operation       110          160     148      1,150       85        98
          Minimum Operation        30          160     155        290       75        98
</TABLE>


          Average Dry Year Operation - Based on the average of the following
          lowest generation years: 1930, 1932, 1934, 1949, 1977.

<TABLE>
<CAPTION>
                            Energy Generation      Capacity Output         Percent of
           Month                 (kWh)                  (kW)          Total Hours Operated
           -----                 -----                  ----          --------------------
          <S>                   <C>                    <C>                     <C>
          January               855,000                1,150                   100
          February              753,000                1,120                   100
          March                 818,000                1,100                   100
          April                 727,000                1,010                   100
          May                   699,000                  940                   100
          June                  612,000                  850                   100
          July                  484,000                  650                   100
          august                305,000                  410                   100
          September             245,000                  340                   100
          October               148,800                  200                   100
          November              468,000                  650                   100
          December              595,000                  800                   100
</TABLE>

          Maximum firm capacity: 410 kW


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

          1    If Facility has a variable head, operating curves should be
               provided.


                                      E-18
<PAGE>

          E-11 MINIMUM DAMAGES


               (a) In the event the firm Capacity is derated or Seller
          terminates this Agreement, the quantity by which the firm capacity is
          derated or the firm capacity shall be used to calculate the payments
          due PGandE in accordance with Section (d).


               (b) Seller shall be invoiced by PGandE for all amounts due under
          this section. Payment shall be due within 30 days of the date of
          invoice.


               (c) If Seller does not make payments pursuant to Section (b),
          PGandE shall have the right to offset any amounts due it against any
          present or future payments due Seller.


               (d) Seller shall pay to PGandE:

                    (i) an amount equal to the difference between (a) the firm
               capacity payments already paid by PGandE, based on the original
               term of agreement and (b) the total firm capacity payments which
               PGandE would have paid based on the period of Seller's actual
               performance using the adjusted firm capacity price. Additionally,
               Seller shall pay interest, compounded monthly from the date the
               excess capacity payment was made until the date Seller repays


                                      E-19
<PAGE>

               PGandE, on all overpayments, at the published Federal Reserve
               Board three months' Prime Commercial Paper rate; plus


                    (ii) a sum equal to the amount by which the firm capacity is
               being terminated or derated times the difference between the
               current firm capacity price on the date of termination or
               deration for a term equal to the balance of the term of agreement
               and the firm capacity price, multiplied by the appropriate factor
               shown in Table E-5 below. In the event that the current firm
               capacity price is less than the firm capacity price, no payment
               under this subsection (ii) shall be due either Party.



                                    TABLE E-5


                       Amount of Firm Capacity
                        Terminated or Derated           Factor
                        ----------------------           ------

               1,000       kW or under                    0.25
                over       1,000 kW through  10,000 kW    0.75
                over      10,000 kW through  25,000 kW    1.00
                over      25,000 kW through  50,000 kW    3.00
                over      50,000 kW through 100,000 kW    4.00
                over     100,000 kW                       5.00


                                      E-20
<PAGE>

                                   APPENDIX F

                                 INTERCONNECTION


                                    CONTENTS


          Section                                                      Page
          -------                                                      ----

            F-1        INTERCONNECTION TARIFFS                         F-2

            F-2        POINT OF DELIVERY LOCATION SKETCH               F-3

            F-3        INTERCONNECTION FACILITIES FOR WHICH            F-4
                       SELLER IS RESPONSIBLE


                                      F-1
<PAGE>

          F-1    INTERCONNECTION TARIFFS


                 (The applicable tariffs in effect at the time of, execution of
                 this Agreement shall be attached.)


                                      F-2
<PAGE>

                                   ASSIGNMENT

          FOR GOOD AND VALUABLE CONSIDERATION, as set forth in the "Development
     Option and Stock Purchase Agreement," effective June 1, 1989, the
     undersigned FAYETTE ENERGY CORPORATION, a Delaware corporation ("FEC"),
     hereby assigns, transfers and conveys to ALTAMONT COGENERATION CORPORATION,
     a California corporation ("ACC"), all of FEC's right, title and interest in
     and to that certain Standard Offer #4, option #1, Power Purchase Agreement
     by and between Fayette Manufacturing Corporation and Pacific Gas and
     Electric Company, date April 15, 1985, for the delivery of 6500 kilowatts
     nameplate rating at 100% avoided costs for a cogeneration plant sited in
     the Altamont Pass in California.


     Fayette Energy Corporation


     By /s/ Jerry Fuchs
        ---------------
        Jerry Fuchs. Vice President        April 10, 1990


                                   ASSUMPTION

          IN CONSIDERATION OF THE FOREGOING ASSIGNMENT, the undersigned ALTAMONT
     COGENERATION CORPORATION hereby assumes all of the rights, duties and
     obligations of the Seller under said Standard Offer 64, Option M1, Power
     Purchase Agreement. In the event that ACC's rights under the Power Purchase
     Agreement herein assigned are terminated or ACC has received notice of
     default from POSE due to any act or failure to act by ACC, FEC may (subject


<PAGE>

     to the Power Purchase Agreement) cure such default within 90 days of
     receipt by FEC of written notice from ACC that ACC's rights have been
     terminated or that ACC has received notice of default from PG&E, and FEC
     may (subject to the Power Purchase Agreement) reassume directly all rights
     and obligations of ACC to and under the Power Purchase Agreement. ACC shall
     take all reasonable action necessary to ensure that FEC is promptly
     notified of any notice of default given to Seller under the Power Purchase
     Agreement so as to maximize the time available to FEC to ensure that the
     assigned Power Purchase Agreement is not terminated by PG&E, provided,
     however, that FEC shall not be entitled to effect any cure of such default
     on behalf of ACC if ACC is diligently proceeding to cure such default
     within the time allowed for such cure under the Power Purchase Agreement.
     ACC shall indemnify, hold harmless and defend FEC for any claim made by
     PG&E of liability of FEC for the duties and obligations of the Seller under
     the assigned Power Purchase Agreement arising during such time as ACC is
     the Seller thereunder. The rights of any subsequent assignee to the
     assigned Power Purchase Agreement shall be subject to the conditions set
     forth in this paragraph.


     Altamont Cogeneration Corporation


     By /s/ Jerry Fuchs      April 10, 1990
        ---------------
        Jerry Fuchs, President