GE INTERNATIONAL, INC.                                  GE ENERGY SERVICES
________________________________________________________________________________





                           SECOND AMENDED AND RESTATED
                  OPERATION AND MAINTENANCE SERVICES AGREEMENT


                                     between




                      General Electric International, Inc.


                                       and


                           Selkirk Cogen Partners, L.P




                             in connection with the


       Unit I and Unit II Combined Cycle Cogeneration Power Plant Facility
                                Selkirk, New York





                                   June, 2000
<PAGE>

                               TABLE OF CONTENTS

                                                                           PAGE
PREAMBLE                                                                     2
ARTICLE 1  DEFINITIONS                                                        4
ARTICLE 2  WORKSCOPE                                                         10
ARTICLE 3  RESPONSIBILITIES OF OWNER                                         11
ARTICLE 4  BUDGET AND APPROVAL OF DIRECT COSTS                               11
ARTICLE 5  PLANNED AND UNPLANNED MAINTENANCE                                 13
ARTICLE 6  EXTRA WORK                                                        14
ARTICLE 7  PAYMENTS                                                          14
ARTICLE 7B LONG TERM PARTS AGREEMENT                                         25
ARTICLE 8  TITLE PASSAGE                                                     25
ARTICLE 9  EXCUSABLE DELAY                                                   25
ARTICLE 10 TERM                                                              26
ARTICLE 11 TERMINATION BY OWNER                                              26
ARTICLE 12 TERMINATION BY CONTRACTOR                                         29
ARTICLE 13 WARRANTY                                                          32
ARTICLE 14 CROSS INDEMNIFICATION                                             33
ARTICLE 15 LIMITATIONS OF LIABILITY                                          33
ARTICLE 16 INSURANCE                                                         36
ARTICLE 17 ASSIGNMENT                                                        38
ARTICLE 18 COMPLICANCE WITH LAWS AND CODES                                   38
ARTICLE 19 DISPUTES PROCEDURE                                                39
ARTICLE 20 MISCELLANEOUS                                                     39

EXHIBITS                                                                     44
EXHIBIT I       PERFORMANCE INCENTIVE
EXHIBIT II      GER3620F
EXHIBIT III     OPERATION PHASE SERVICES
EXHIBIT IV      RESPONSIBILITIES OF OWNER
EXHIBIT V       SPECIFICATION OF FUEL
EXHIBIT VI      FACILITY WORK FORCE
EXHIBIT VII     PURCHASED SUPPLIES AND SERVICES
EXHIBIT VIII    TARGET DMNC OUTPUT PERFORMANCE TEST PROCEDURES
EXHIBIT IX      PARENT GUARANTEE
EXHIBIT X       LONG TERM PARTS AGREEMENT- SELKIRK COGEN
EXHIBIT XI      CONSENT AGREEMENT
EXHIBIT  XII    NY POWER POOL METHODS & PROCEDURES (MP2-12)

                                       2

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00

<PAGE>


                           SECOND AMENDED AND RESTATED
                  OPERATION AND MAINTENANCE SERVICES AGREEMENT

     THIS SECOND AMENDED AND RESTATED  AGREEMENT (the "Agreement") is between GE
Contractual   Services,  a  component  of  GE  International  Inc.,  a  Delaware
Corporation ("Contractor"),  having a principal office at 4200 Wildwood Parkway,
Atlanta,  Georgia 30339 and Selkirk Cogen Partners,  L.P., a Limited Partnership
formed under the Laws of the State of Delaware  ("Owner"),  having its principal
place of business at 7500 Old Georgetown  Road,  Bethesda,  Maryland.  Owner and
Contractor  are  referred  to  individually  as  "Party"  and   collectively  as
"Parties."

                                    RECITALS

     WHEREAS,  Bechtel Construction Company and Bechtel Associates  Professional
Corporation  (collectively,  "Constructor")  have  designed  and  constructed  a
cogeneration  power  plant  in  Selkirk,  New York  ("Unit  I")  pursuant  to an
Engineering,   Procurement  and   Construction   Agreement   between  Owner  and
Constructor dated June 19, 1990 (the "Unit I Construction Agreement"); and

     WHEREAS,  Bechtel Construction Company and Bechtel Associates  Professional
Corporation (collectively, "Constructor") have designed and constructed a second
cogeneration  power  plant in  Selkirk,  New York  ("Unit  II")  pursuant  to an
Engineering,  Procurement and Construction Agreement dated October 21, 1992 (the
"Unit II  Construction  Agreement")  (Unit I and Unit II are  referred to herein
collectively as the "Combined Facility"); and

     WHEREAS,  the Combined  Facility  includes  three (3) Frame 7EA gas turbine
generator  sets and two (2) steam turbine  generator  sets  manufactured  by the
General Electric Company; and

     WHEREAS, Owner and Host have entered into an Amended and Restated Agreement
for the  Sale of  Steam  which  creates  certain  obligations  with  respect  to
non-exempt  /  non-supervisory  ("Non-supervisory")  employees  required  by the
Contractor for the Facility Work Force; and

     WHEREAS,  Owner and General  Electric  Company  ("GE") have entered into an
Operation and Maintenance  Agreement for the Combined Facility (the "Amended and
Restated  O&M  Agreement"  dated  October  22,  1992)  pursuant  to which GE has
provided  operating and maintenance  services  (including  Planned and Unplanned
Maintenance); and

     WHEREAS, GE has assigned the Amended and Restated Operation and Maintenance
Agreement to GEII as of June 28,1998,  and Owner has consented to the assignment
provided that GE provide Owner with a Parent Guaranty ("the Guaranty"); and

                                       3

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>


     WHEREAS,  Owner and  Contractor now desire to further amend and restate the
Amended and Restated O&M Agreement  and to set forth in this Second  Amended and
Restated  Agreement the terms  pursuant to which  Contractor  shall  continue to
provide  operating and  maintenance  services  (including  Planned and Unplanned
Maintenance) to the Combined Facility during the Operations Phase.

     NOW,  THEREFORE,  in  consideration of the premises and the mutual promises
contained  herein,  the Parties  hereto  agree that the O&M  Agreement is hereby
amended and restated in its entirety as follows:


                                    ARTICLE 1
                                   DEFINITIONS

1.1  Acceptable  Fuel.  Gas turbine and boiler fuel as specified in Exhibit V of
     this Agreement.

1.2  Agreement.  This Second  Amended and  Restated  Operation  and  Maintenance
     Services Agreement for the Combined Facility.

1.3  Budget.  A  projection  of expenses  for a Contract  Year,  as  established
     pursuant to Article 4.

1.4  Combined Facility. The Unit I and the Unit II power plants.

1.5  Consumables.  A subset of Direct  Material  Costs.  All items  consumed  or
     needing regular  periodic  replacement for Operation and maintenance of the
     Combined  Facility,  such as, but not limited to, gaskets,  tools under One
     Thousand ($1,000) Dollars in value,  lubricants,  rags, oils, filter media,
     aqueous  ammonia,  additives  and  anti-corrosion  devices,  CO2, H2, water
     treatment  chemicals  and other  expendable  materials,  but not  including
     Acceptable Fuel and Spare Parts.

1.6  Contract  Year.  For each Contract Year of this  Agreement,  except for the
     final Contract Year, a one-year period from January 1 through  December 31;
     and for the final  Contract  Year,  the period  beginning  on January 1 and
     terminating  on October 31. For any Contract  Year that is less than 365 or
     366 days (as the case may be), any calculation in this Agreement determined
     by reference to a Contract Year shall be adjusted by  multiplication of the
     appropriate  figure by a  fraction,  the  numerator  of which  shall be the
     number of Days in that Contract Year and the  denominator of which shall be
     365 or 366 as the case may be.

1.7  Contractor's Fee. The fee Owner will pay Contractor during the Term of this
     Agreement.

1.8  Contractor's  Invoice.  A written document from Contractor to Owner stating
     the amount due to Contractor  for a portion of the Work Scope in accordance
     with this

                                       4

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>


     Agreement and accompanied by reasonable documentation, such as time sheets,
     supporting the amount invoiced.

1.9  Day. A Day shall be defined as a calendar day when used in this Agreement.

1.10 Direct Costs. The aggregate of Direct Labor Costs, Direct Management Costs,
     and Direct Subcontracted Services Costs.

1.11 Direct Labor Costs.  All  expenditures  for salaries,  personnel health and
     safety, fringe benefits, Labor Services Contractor fees and services, taxes
     (including sales tax),  insurance and union adders (if applicable) incurred
     by  Contractor's  Labor  Services  Contractor  for  permanent and temporary
     personnel who are utilized by Contractor at the site to perform  Operation,
     Routine  Maintenance and clerical services under this Agreement  (exclusive
     of Direct  Management  Costs).  Direct Labor Costs also  include  personnel
     incentive programs, hiring, transfer, relocation, medical examination, Host
     assessments related to labor matters, training (technical and supervisory),
     travel and living expenses for training programs,  benefit  administration,
     consistent  with  Contractor's  employee  policies  as  applicable  to  the
     Combined  Facility,  lawyer and  consultant  fees  related to any items set
     forth in this Section 1.12, and other Work Scope related expenditures,  all
     as  undertaken  with the prior  review and  written  approval  of Owner and
     Contractor. All such items included shall be defined as Direct Labor.

1.12 Direct  Management  Costs.  Costs for  services  of  personnel  employed by
     Contractor  to direct and manage the Work Scope at the  Combined  Facility,
     including  a  Facility  Manager  and other  personnel  as agreed to by both
     Parties, and their associated travel and living expenses in accordance with
     Contractor's  travel  and living  expense  policy in effect at the time the
     expenses are incurred.  There will be, at a minimum, a Facility Manager and
     one (1) Technical Manager (not a Finance Manager) assigned to the Facility.
     Home office support associated with the execution of the Work Scope is also
     included.  Transfer and relocation  expenses during the Combined Operations
     Phase are  included in the  definition.  All such items  included  shall be
     defined as Direct Management.

1.13 Direct  Material  Costs. A general  category of costs  associated  with the
     Operation  and  maintenance  of  the  Combined  Facility  excluding  Direct
     Management Costs, Direct Labor Costs, Direct Subcontracted  Services Costs,
     and  Acceptable  Fuel.  This  category  includes,  but is not  limited  to,
     Consumables,  Facility Tools,  Purchased  Supplies and Services  (including
     hazardous and non-hazardous waste disposal),  Facility  Modifications,  and
     Spare Parts  necessary  to comply with Owner's  Requirements.  Sales tax is
     specifically included in the definition.  Such expenditures may include but
     are not limited to payments to components of General  Electric  Company for
     work  performed  at the Facility  Site.  All such items  included  shall be
     defined as Direct Management.

1.14 Direct  Subcontracted  Services Costs.  Costs billed to Contractor for work
     performed  by a  Subcontractor  (including  sales tax) in  connection  with
     Contractor's  performance of the Work Scope, engaged after prior review and
     written approval of Owner, such approval not

                                       5

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

       to be unreasonably  withheld or delayed.  Such  expenditures may include,
       but are not  limited  to,  payments  to  components  of General  Electric
       Company for work  performed at the Facility  Site,  but shall not include
       Purchased  Supplies and Services or any costs associated with Planned and
       Unplanned  Maintenance.  Direct Subcontracted Services Costs also include
       payments  to  lawyers  and  consultants  engaged  with the prior  written
       approval  of Owner.  All such items  included  shall be defined as Direct
       Subcontracts.

1.15   Estimated  Budget.  A proposal  for a Budget for a Contract  Year,  to be
       developed by Contractor and presented pursuant to Article 4.

1.16   Extra Work. Extra work shall have the meaning set forth in Article 6.

1.17   Facility  Manager.  Contractor's  representative at the Facility Site who
       represents  Contractor in all matters regarding this Agreement,  and whom
       Contractor  authorizes to act on behalf of and commit  Contractor for the
       purpose of  conducting  normally  expected  Work Scope  activities at the
       Facility Site.

1.18   Facility  Modifications.  Changes  to any part of the  Combined  Facility
       configuration, equipment, or systems.

1.19   Facility Output.  The net electrical  output of the Combined  Facility as
       determined in accordance with Exhibit VIII.

1.20   Facility  Output Test. A test of facility  output as set forth in Exhibit
       VIII.

1.21   Facility Site. The land leased and appurtenant easements to be granted to
       Owner under the terms of the Second Amended and Restated Lease  Agreement
       between Owner and Host (Execution Draft dated October 21, 1992) including
       the "Unit I" and "Unit II" premises as defined therein.

1.22   Facility  Tools.  A  subset  of  Direct   Materials   Costs.  The  tools,
       instruments, and equipment, usually over One Thousand ($1,000) Dollars in
       value,  required to perform the Operation and maintenance of the Combined
       Facility. Facility Tools under One Thousand ($1,000) Dollars in value are
       considered Consumables.

1.23   Facility Work Force. Personnel employed at the Combined Facility who will
       perform the Work Scope  described  herein.  The  specific  positions  are
       specified in Exhibit VI and are subject to change by mutual agreement.

1.24   Financing Agreement. The agreement between Owner and Chase Manhattan Bank
       N.A., as Agent, and the financial institutions parties thereto,  relating
       to the construction  and/or permanent  financing of the Combined Facility
       executed at the initial financial closing.

                                       6

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

1.25   Fuel  Agreements.  The fuel  purchase  agreements,  collectively  the gas
       purchase contracts between Owner and various  suppliers,  as amended from
       time to time.

1.26   Host. General Electric Company, GE Plastics, owner of the land upon which
       the Combined Facility will be located,  and the purchaser of the steam to
       be produced by the Combined Facility.


1.27   Host  Agreements.  The Agreement for the Sale of Steam  (Execution  Draft
       dated October 21, 1992, the Second  Amended and Restated Lease  Agreement
       (Execution Draft dated October 21, 1992), the Amended and Restated Boiler
       Facility  Purchase  and  Sale  Agreement  dated  June 14,  1990,  and the
       Utilities  Building Lease  Agreement  (Execution  Draft dated October 21,
       1992).

1.28   Labor Services Contractor.  Per Host Agreements,  Contractor will utilize
       certain  services,  including  Host  supplying  non-supervisory  or other
       personnel as part of the Facility Work Force. These services are expected
       to be administration, payroll processing, and personnel relations and may
       be changed or expanded, subject to reasonable review and written approval
       by Owner, which approval shall not be unreasonably withheld, as necessary
       to help fulfill  Contractor's  obligations under this Agreement.  Lawyers
       and consultants fees may be included where engaged with the prior written
       approval of Owner, which approval shall not be unreasonably withheld.

1.29   Non-Peak Period.  This period shall include the calendar months of March,
       April, May, September,  October, and November,  unless otherwise adjusted
       by mutual agreement of the Owner and Contractor.

1.30   Operation.   Services,  as  specified  in  this  Agreement,  provided  by
       Contractor  to  implement  operation  of  equipment  and  systems  of the
       Combined  Facility.  Operation will be in accordance with the Work Scope,
       Owner's Requirements, and Owner's Plan of Operation.

1.31   Operating  Income.  Operating  Income is equal to Gross  Profit  less O&M
       expenses,  lease/utilities,  administration  and  general  expenses,  and
       Depreciation.

1.32   Operations  Phase.  The period of time commencing upon the effective date
       of this  Agreement  and  continuing  thereafter  through the Term of this
       Agreement as defined in Article 10.

1.33   Owner's  Representative.  A representative of Owner who will be available
       (or whose  delegate will be available)  every day of the year to act as a
       liaison between Owner and Contractor.

                                       7

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

1.34   Owner's  Requirements.   Obligations  arising  by  operation  of  law  or
       regulation or pursuant to the Host Agreements, the Power Sale Agreements,
       the Fuel Agreements,  the Unit I or Unit II Construction  Agreement,  the
       Financing  Agreement,  or the New York Independent  System  Operator,  as
       those  obligations  reasonably apply to or impact the performance of this
       Agreement,  and as  those  obligations  are  reasonably  interpreted  and
       presented by Owner to Contractor in writing.

1.35   Partners.  JMC Selkirk,  Inc.  (Affiliate  of Beale  Generating  Company,
       formerly  known as J.  Makowski  Company,  Inc.) and RCM Selkirk GP, Inc.
       (Affiliate  of The McNair  Group,  formerly  known as Cogen  Technologies
       Selkirk, GP Inc.).

1.36   Partnership  Budget.  The project budget,  as approved by the Partners by
       September 30th of each Contract Year.

1.37   Peak Period.  This period shall  include the calendar  months of January,
       February, June, July, August, and December,  unless otherwise adjusted by
       mutual agreement of the Owner and Contractor.

1.38   Plan of Operation.  Owner's instructions to Contractor specifying Owner's
       operating objectives for the applicable period, given in a timely manner.

1.39   Planned  Maintenance.  Periodic  inspection,  overhaul  and repair of the
       Combined  Facility,  scheduled  in  accordance  with  Section  5.2 and of
       predetermined  duration,  and in  accordance  with the Unit I and Unit II
       design   engineer's   recommendations,   the   equipment   manufacturers'
       recommendations,   the  reasonable  recommendations  of  Contractor,  and
       Prudent  Utility  Practices.  Expenditures  for Planned  Maintenance  may
       include,  but are not  limited  to,  payments  to  components  of General
       Electric   Company  for  work  performed  at  the  Facility  Site.  Costs
       associated   with  Planned   Maintenance   will  be  defined  as  Planned
       Maintenance Costs.

1.40   Plant Efficiency.  The efficiency of the combined cycle system is defined
       as the  electrical  energy  produced  plus  the  heat to  process  energy
       produced all divided by the heat consumption of the gas turbines.


1.41   Power Sale Agreement(s). The Amended and Restated Agreement between Owner
       and Niagara Mohawk Power Corporation,  dated December 7, 1987, as amended
       December 14, 1989,  further  amended  January 25, 1990,  further  amended
       October 22, 1992, an Agreement dated March 31, 1994, further amended June
       26, 1996 and further Amended and Restated July 1, 1998 (the "Unit I Power
       Sale  Agreement"),  and Contract No. 346 between  Owner and  Consolidated
       Edison  Company  of New York,  Inc.,  dated  April 14,  1989,  as amended
       September 13, 1991,further  amended October 22, 1992, and further amended
       September 13, 1996, (the "Unit II Power Sale Agreement").

                                       8

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

1.42   Prudent Utility  Practices.  Those practices and methods commonly used in
       cogeneration,  industrial,  and  utility  combined  cycle  power  plants,
       similar to the Facility,  that, to the extent practicable at a particular
       time,  in the  exercise of  reasonable  judgement,  in light of the facts
       known at the time the  decision  was made,  would have been  expected  to
       accomplish a desired result,  consistent with applicable federal,  state,
       local laws, rules, regulations, and ordinances, and in a safe manner.

1.43   Purchased  Supplies and  Services.  A subset of Direct  Materials  Costs.
       Purchased  services  will  normally be associated  with  consultants  and
       subcontractors  employed  to assist in or  support  Operation  or Routine
       Maintenance.  A list of common  service  and supply  items is included in
       Exhibit VII.

1.44   Routine  Maintenance.  Maintenance  of a  regular,  preventive  and minor
       nature  that  should  be  performed  periodically  to keep  the  Combined
       Facility in working  order  including,  but not limited to,  lubrication,
       repacking  of  valves,  minor  leak  repair,  adjustment,   calibrations,
       installation of Consumables,  general housekeeping,  painting and general
       upkeep,  and similar  work.  This  maintenance  will be  performed by the
       Facility  Work Force to the point  that such work is within  its  general
       skill level and as operating duties permit;  if not, Routine  Maintenance
       may be  performed  as Purchased  Supplies  and  Services,  or as a Direct
       Subcontract.

1.45   Spare Parts. A subset of Direct  Materials  Costs.  Replacement  parts or
       assemblies (either in kind or improved)  purchased to be installed in the
       Combined  Facility  to replace  existing  parts or  assemblies  which are
       removed from service.

1.46   Subcontractor. Any person, firm, or corporation and the legal or personal
       representative,  successor or assign of such party,  which contracts with
       Contractor  to perform  work (other than the  Facility  Work  Force),  in
       connection  with  this  Agreement,  including,  without  limitation,  any
       component of General Electric Company.

1.47   Summer  Period.  The  period  of time in each  Contract  Year from June 1
       through  September 30,  inclusive.  This will include 24 hours per day, 7
       days per week during this Summer Period.

1.48   Suspend.  A temporary stopping of the Operations Phase services which, at
       Contractor's  option,  may include removal of some or all of the Facility
       Work Force from the Facility Site.

1.49   Term. Term shall have the meaning set forth in Article 10.

1.50   Unit I. The power plant  constructed  pursuant to the Unit I Construction
       Agreement  on the  facility  site,  including of one (1) ~ 12 MW rated GE
       steam turbine-generator, one (1) GE 7EA gas turbine generator, consisting
       of oil and water, pipelines,  intake structures,  interconnections to gas
       pipelines  and  electrical  transmission  facilities,  pumping  and meter

                                       9

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

       stations,  ancillary facilities, and all other equipment for the handling
       of Acceptable Fuel and the production of steam and electrical  power plus
       the backup steam generation  facilities  purchased from the host pursuant
       to certain Host Agreements.

1.51   Unit II. The power plant constructed pursuant to the Unit II Construction
       Agreement  on the Facility  site,  including of one (1) ~ 150 MW rated GE
       steam  turbine-generator,  and  two (2) GE 7EA  gas  turbine  generators,
       consisting   of   oil   and   water   pipelines,    intake    structures,
       interconnections to gas pipelines and electrical transmission facilities,
       pumping and meter stations, ancillary facilities, and all other equipment
       for the  handling  of  Acceptable  Fuel and the  production  of steam and
       electric power, unless specifically excluded in this Agreement.

1.52   Unplanned  Maintenance.   Maintenance,  inspection,  and  repair  of  the
       Combined  Facility  equipment  which is not  defined  herein  as  Planned
       Maintenance or Routine Maintenance.  Unplanned  Maintenance will normally
       be performed by a subcontractor but may be performed by the Facility Work
       Force if within its general skill level and as operating  duties  permit.
       Costs associated with Unplanned  Maintenance will be defined as Unplanned
       Maintenance Costs.

1.53   Winter  Period.  The periods of time in each Contract Year from January 1
       through  March  31,  inclusive,  and  December  1  through  December  31,
       inclusive.  This will  include 24 hours per day,  7 days per week  during
       this Winter Period.


                                    ARTICLE 2
                                   WORK SCOPE


2.1    Operations Phase.  During the Operations Phase,  Contractor shall perform
       with respect to the Combined  Facility the services  specified in Exhibit
       III of this Agreement.

2.2    Work Performed In Accordance  With Work Scope.  Contractor  shall perform
       its services in accordance  with the Work Scope  contained in Exhibit III
       of  this  Agreement.  Contractor  will  perform  the  Work  Scope  (i) in
       compliance with Owner's  Requirements;  (ii) in compliance with the laws,
       rules,  and orders of  governmental  and  regulatory  authorities  having
       jurisdiction;  (iii) in accordance with Prudent Utility  Practices;  (iv)
       consistent  with all manuals and  instructions  relating to the  Combined
       Facility  and the  equipment  provided to  Contractor  by Owner;  and (v)
       consistent  with  Owner's  Plan  of  Operation  to the  extent  known  to
       Contractor.



                                       10

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

                                    ARTICLE 3
                            RESPONSIBILITIES OF OWNER

       Owner shall  provide,  at all times,  a Combined  Facility  that complies
with, and is designed and operable in accordance  with, all applicable  federal,
state, and local permits, laws, rules, regulations and ordinances, in accordance
with  Owner's  obligations  arising  under the Host  Agreements  with respect to
health,  safety and  environmental  programs and procedures,  in accordance with
Contractor's  obligations  under  Section  2.2, and in  accordance  with Owner's
obligations   arising  under  the  Power  Sale  Agreement(s).   Owner  shall  be
responsible  for making such business and strategy  decisions as may be required
from  time to time in  connection  with the  Operation  and  maintenance  of the
Combined  Facility.  To this end, Owner shall specify Owner's  Requirements  and
formulate  the  Plan  of  Operation  from  time  to  time,   specifying  Owner's
instructions  to  Contractor  as to the desired  production  schedule  and other
operating objectives within the Combined Facility's capabilities, and deliver it
to  Contractor.  Items  necessary  or  desired  by Owner for the  Operation  and
maintenance  of  the  Combined  Facility,   but  not  included  in  Contractor's
responsibilities  in Exhibit  III,  must be provided  by Owner.  Among the items
which Owner shall furnish are those described in Exhibit IV of this Agreement.


                                    ARTICLE 4
                       BUDGET AND APPROVAL OF DIRECT COSTS

4.1    Operations Budget.

       4.1.1 Not later than May 15th prior to the  commencement of each Contract
Year,  Contractor  shall submit to owner an Estimated  Budget for  Operation and
Routine Maintenance services including Direct Costs, Contractor's Fee and Direct
Material Costs, setting forth by line item entries in the proposed total Budget,
in a level of detail (i) reflected in the Budget for the previous Contract Year,
and (ii)  satisfactory to Owner.  The Estimated Budget shall be accompanied by a
projection of the Facility Work Force staffing level.

       4.1.2 Not later than June 1st, following Contractor's  submission of each
Estimated  Budget,  Owner shall notify Contractor of any proposed changes to the
Estimated Budget and projections  reflected therein, as Owner may deem necessary
or appropriate.  Within fifteen (15) days following  receipt of such notice from
Owner,  Contractor  shall  either  confirm to Owner its  ability to perform  the
services during such period in conformance  with Owner's  proposed  changes,  or
object  to such  proposed  changes,  stating  in  detail  the  reason  for  such
objection.  If Owner and  Contractor  are unable to agree on the Budget prior to
the first Day of any  Contract  Year,  the sum paid with respect to expenses for
the  immediately  preceding  Contract Year,  escalated  pursuant to Section 7.6,
shall be deemed applicable (subject to retroactive adjustment) for such Contract
Year,  except that such prior year  expenses  shall not be  applicable  if, with
respect to expenses, planned maintenance,  and other significant events occurred
in the preceding  Contract  Year, or are  anticipated  in the

                                       11

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

upcoming  Contract year, until such time as Owner and Contractor reach agreement
on the Budget by negotiation. If Owner and Contractor are unable to agree on the
Budget  prior to the first Day of any  Contract  Year,  and if the sum paid with
respect  to  expenses  for  the  immediately  preceding  Contract  Year  is  not
applicable  to the current  Contract  Year  because,  with  respect to expenses,
significant  events occurred in the preceding  Contract Year, or are anticipated
in the upcoming Contract Year, then,  subject to Contractor's  rights in Section
12.1,  Owner shall  establish a reasonable  Budget for the areas of variation or
disagreement  consistent with Prudent  Utility  Practices,  the Work Scope,  and
other similar projects. Notwithstanding the foregoing, the Budget may be amended
upon the  agreement  of Owner and  Contractor  for any changes in the Work Scope
(Article 2) or changes in the Plan of  Operation  based upon an agreement of the
Parties, during the applicable Contract Year.

4.2  Purchasing  Routine.  Subject to Section 4.4,  Contractor  is authorized as
agent for the Owner to  prepare  purchase  orders on behalf of Owner on  Owner's
purchase   order  form  for   Direct   Materials.   Except  for  the   handling,
transportation,  and  disposal  of  hazardous  and  non-hazardous  wastes,  such
purchase orders will be issued to vendors in accordance with the site purchasing
routine then in effect. With respect to handling,  transportation,  and disposal
of hazardous  and  non-hazardous  waste,  Contractor,  as agent for Owner,  will
prepare  Owner's  purchase  order(s)  directed to  vendor(s)  selected by Owner.
Contractor  shall assist Owner in identifying  possible  vendor(s) for handling,
transportation,  and disposal of  hazardous  and  non-hazardous  waste and Owner
shall review and  determine  the  vendor(s).  Prior to issuance,  such  purchase
orders  respecting  handling,  transportation,  and  disposal of  hazardous  and
non-hazardous  waste  shall be  submitted  to Owner  for  review  and  approval.
Contractor  will verify the receipt of the  material  or  purchased  service and
forward the vendor invoice for approval, processing, and payment by Owner. Owner
shall have his purchase order and payables functions in place upon the effective
date of this Agreement.

4.3 Budget and Costs.  In the event  Contractor  desires to incur a cost  which,
when paid,  will  result in an excess of costs over the total of all Budget line
items for the Contract  Year and which it believes  should result in an increase
in the Budget,  Contractor shall notify Owner and Owner shall determine  whether
an adjustment to the Budget is appropriate.  Except as required by Section 20.8,
Contractor  shall not commit  Owner to incur such a cost without  Owner's  prior
written  consent.  Owner may express its consent in writing by either  adjusting
the  Budget or  approving  the costs  without  adjusting  the  Budget.  If Owner
approves such cost in excess of Budget without  adjusting the Budget,  such cost
shall be deemed to be in excess of Budget; and Owner's remedies for Contractor's
incurring costs in excess of the Budget shall be as provided in Article 11.2. If
Owner fails to approve an  expenditure  and  Contractor is unable to perform its
obligations under this Agreement without incurring such expense,  Contractor may
terminate this Agreement pursuant to Clause 12.1 (ix).

4.4  Limitation.  Except in an  emergency  endangering  life or property and for
purchase  orders  signed by Owner,  Contractor  may not enter into any contracts
binding  Owner which have terms in excess of one year or obligate  Owner to make
expenditures in excess of $50,000 without the prior written consent of Owner.

                                       12

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>



                                    ARTICLE 5
                        PLANNED AND UNPLANNED MAINTENANCE

5.1 Planned and Unplanned Maintenance. Contractor is authorized as Owner's agent
to prepare  purchase orders on behalf of Owner, on Owner's  purchase order form,
in accordance with the site purchasing procedures, to procure required parts and
the services of qualified  contractors for the Planned and Unplanned Maintenance
of the Combined Facility consisting of outage management, technical supervision,
scheduling and planning,  labor,  tooling and equipment,  inspection reports and
recommendations.  Contractor will provide coordination between the Facility Work
Force and contractors selected for a Planned or Unplanned Maintenance event.

5.2 Budget for Planned  Maintenance.  By May 15th prior to each Contract Year of
the Operations  Phase,  Contractor will submit a budget and schedule for Planned
Maintenance for the following year.

5.3  Pricing for  Planned  Maintenance.  No later than thirty (30) days prior to
each separate  maintenance  event on the annual  Planned  Maintenance  schedule,
Contractor  shall  secure a firm  price  for a  defined  scope  of work,  unless
otherwise defined in this agreement, or give owner an estimate based on time and
material rates to be agreed upon in advance for the budgeted items.  During such
maintenance, the work performed by the Facility Work Force shall not be included
in the firm price, estimate, or billing for Planned Maintenance unless such work
is performed outside their regularly scheduled work hours.  Contractor shall use
reasonable efforts to comply with a reasonable request from Owner to secure such
prices up to ninety (90) days prior to major maintenance events.

5.4 Pricing for  Unplanned  Maintenance.  Contractor  shall procure on behalf of
Owner the services of qualified  contractors  for  Unplanned  Maintenance  on an
agreed upon firm price for a defined scope of work or time and  materials  basis
at rates to be agreed  upon in advance.  Owner will be notified of an  Unplanned
Maintenance  event. If a time and materials payment method has been chosen for a
particular  event,  Contractor shall provide a projected cost estimate and shall
keep Owner advised as to total  committed costs relative to the estimate for the
Unplanned Maintenance event.

                                       13


Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>




                                    ARTICLE 6
                                   EXTRA WORK

6.1 Definition of Extra Work. Extra Work is work which is necessary or desirable
to operate the  Combined  Facility  legally and safely in  accordance  with this
Agreement,  but which is not specified to be performed within the Work Scope and
which increases Contractor's Direct Costs or Direct Materials Costs.  Contractor
shall be  entitled  to an Extra Work  adjustment  in the event (i) of a Facility
Modification,  (ii) of a change in  Owner's  Requirements,  (iii) of a change in
applicable federal, state or local laws, codes, rules,  regulations,  permits or
licenses,  or (iv) of a modification  to the Unit I or Unit II Host  Agreements,
Power Sales Agreements, Fuel Agreements or Financing Agreement subsequent to the
dates of such  agreements  as recited in this  Agreement;  provided in each case
that  Contractor  cannot  accommodate  the changed  circumstances  through  it's
planned  staffing  level during  normal  operating  hours and thereby  incurs an
increase in cost.

6.2 Billing for Extra Work.  For short duration Extra Work events (less than one
month),  billing rates for Direct Management Costs including overtime will be GE
standard  published rates for field  engineering  services in effect at the time
the work is performed.  For longer duration Extra Work events, billing rates for
Direct  Management Costs will be established by mutual  agreement  between Owner
and  Contractor  or  incorporated  in the  Agreement  as an  amendment to Direct
Management  staffing with a corresponding  change in Direct Management Costs and
Contractor's  Fee.  Direct  Labor  billing  shall  Include  Direct  Labor Costs,
including overtime, plus 25% for Contractor's fee. Direct Material Costs will be
paid directly by Owner in accordance with Section 7.1 (v).


                                    ARTICLE 7
                                    PAYMENTS

7.1 Operations. Payments for services performed during each year of the Combined
Operations shall be as described below:

       (i) Direct Management Costs.

          (1) Owner shall pay to Contractor  the sum of Seventy  Three  Thousand
Three Hundred Thirty Three Dollars ($73,333) per month for Direct Management for
the first Contract Year of this Agreement (January 1 through December 31, 2000).
The Direct Management Cost will remain fixed for the first Contract Year of this
Agreement.  During this  period,  Contractor  shall  assign a Facility  Manager,
Operations  Manager,  Finance  Manager,  and Systems  Manager  full-time  to the
Facility.

          (2) Beginning  January 1, 2001,  Owner shall pay to Contractor the sum
of Thirty Six Thousand Six Hundred Sixty Seven  Dollars  ($36,666) per month for
Direct

                                       14

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

Management during the remainder of the Term of this Agreement. For the remainder
of the Term of this Agreement,  Contractor  shall assign a Facility  Manager and
two (2)  additional  Managers as agreed to by both  Parties.  Direct  Management
Costs shall be escalated  monthly in accordance  with Section 7.6,  prorated for
any  period  less  than a month,  and  billed  on or about the first day of each
month.

          (3) Owner may  further  reduce  the  Contractor's  staff to a Facility
Manager  and  one  (1)  additional  technical  (non-  Finance)  Manager  with an
appropriate  reduction  in  Direct  Management  Costs.  Owner  may  also  add an
additional  Manager  to  maintain  the  four-person  staff  with an  appropriate
addition to Direct  Management  Costs. The annual cost reduction for the Finance
Manager  position shall be Ninety Thousand  Dollars  ($90,000).  The annual cost
addition for a technical  Manager is One Hundred  Twenty Five  Thousand  Dollars
($125,000).  These  cost  adjustment  amounts  shall  be  escalated  monthly  in
accordance  with Section 7.6,  prorated for any period less than a month.  Owner
will provide  written  notification  to Contractor no later than sixty (60) days
prior to the  addition  or  removal  of above  positions.  Owner  shall use best
efforts to provide even more advance notification.

          (4) Subject to the applicable grace periods  described in this clause,
Owner may assess a Ten Thousand  Dollar  ($10,000) per month reduction in Direct
Management Costs if Contractor fails to provide a full-time qualified person for
each assigned Manager  position.  Upon written  notification to be provided in a
timely and reasonable  manner by Contractor to Owner that, as of a date certain,
one of the existing  Contractor Direct Management  personnel will be leaving the
Facility  due to a decision to  relocate  to a position  outside of GEII or GEII
affiliate  then  Contractor  shall be granted a grace period of 30 days from the
date of such notification to provide a qualified replacement before the relevant
reduction in Direct  Management  Costs begins to be assessed.  However,  if said
Contractor  Direct  Management person leaves the Facility to relocate to another
position  within the Contractor  GEII or GEII affiliate  organization,  then the
above  reduction in Direct  Management  Costs shall begin on the day such person
leaves the Facility for his new position, provided that Contractor has failed to
provide a qualified  replacement at that time. This reduction shall be escalated
monthly in  accordance  with Section 7.6,  shall be prorated for any period less
than a  month  and  shall  end the day the  replacement  person  is  permanently
assigned and reports for work at the Facility.


     (ii) Direct Labor Costs.  Owner shall pay Contractor for Direct Labor Costs
as Incurred. These costs shall be billed on or about the first day of each month
during the Operations Phase for the previous month's services.


     (iii) Direct Subcontracted  Services Costs. Direct  Subcontracted  Services
shall be  purchased by  Contractor.  These costs shall be billed on or about the
first day of the month during  Operations Phase and on or about the first day of
each month for the previous month's services.

                                       15

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>


     (iv) Extra Work. Owner shall pay Contractor for services  performed for any
Extra  Work.  Services  shall be billed on or about the first day of each  month
during Operation Phases for the previous month's services.


     (v)  Direct  Material  Costs.   Direct  Materials  shall  be  purchased  in
accordance  with Section 4.2.  Owner shall be invoiced in its own name and shall
pay directly for such items.


     (vi) Contractor's Fee.

          (1)  Owner  shall pay to  Contractor  the sum of Fifty  Five  Thousand
Dollars  ($55,000) per month for Contractor's Fee during the first Contract Year
of this Agreement  (January 1 through  December 31, 2000).  The Contractor's Fee
will remain fixed from  January 1, 2000 to June 30, 2000 for the first  Contract
Year of this Agreement and escalated  accordingly for the remainder of the first
Contract Year of this Agreement,  and remaining Contract Years of this Agreement
pursuant to 7.6. The Contractor's  Fee shall be escalated  monthly in accordance
with Section 7.6 and prorated for any period less than a month.

          (2) Beginning  January 1, 2001,  Owner shall pay to Contractor the sum
of  Twenty  Seven  Thousand  Five  Hundred  Dollars   ($27,500)  per  month  for
Contractor's   Fee  during  the  remainder  of  the  Term  of  this   Agreement.
Contractor's  Fee shall be escalated  monthly in accordance with Section 7.6 and
prorated for any period less than a month.  Contractor's  Fee shall be billed on
or about the first day of each month.


     (vii) Contractor's Overhead.  There will be no overhead charges, except for
material or third party services  procured  through GEII.  Overhead  charges for
these items will be 10%.


     (viii)  Planned and  Unplanned  Maintenance  Costs.  Planned and  Unplanned
Maintenance  Costs shall be purchased  according to Article 5 and be invoiced to
Owner in its own name and be paid directly by Owner.

     (ix) Performance  Incentive.  At the end of each Contract Year,  Contractor
will issue an invoice for bonus earned by Contractor or credit due to Owner, for
that current Contract Year or portion thereof,  pursuant to Sections 7.2 and 7.3
and escalated monthly in accordance with Section 7.6.


                                       16

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

7.2  Performance  Incentive.  For the  first  Contract  Year  of this  Agreement
(January  1 through  December  31,  2000) the  available  bonus  based  upon the
Performance  Incentive  measurements  as  described  below is Six Hundred  Sixty
Thousand Dollars ($660,000). Beginning January 1, 2001, and for the remainder of
the Term of this  Agreement,  the  available  bonus  based upon the  Performance
Incentive  as  described  below  is  Three  Hundred  Thirty   Thousand   Dollars
($330,000). The annual amount of any bonus or penalty shall be escalated monthly
in accordance with Section 7.6, prorated for any period that is less than a full
twelve  months.  The  bonus  will be based  upon  Plant  Performance,  Financial
Performance,  and Management  Performance  and will be weighed  according to the
following,  and as demonstrated in Exhibit I. The Performance  Incentive will be
paid or credited on an annual basis, in accordance with Sections 7.4 and 7.5.


7.2.1 Performance  Incentive Based Upon Plant Performance.  Thirty percent (30%)
of the above available bonus is based upon Plant  Performance  Indicators.  This
portion of the  performance  incentive (the "Plant  Performance  Bonus") will be
further divided as described below:

          (i)  Integrated  Facility DMNC  Test-Summer  Capability  Demonstration
Period  ("Summer  DMNC").  The available bonus for this test is 30% of the Plant
Performance  Bonus.  The plant's  integrated  Summer DMNC test will be performed
using the  procedures  mutually  agreed to by  Contractor  and Owner per Exhibit
VIII.  The  "Summer  Target  DMNC"  shall be equal to 345 MW,  with the  "Unit I
Minimum DMNC  Threshold" set at 80 MW, and the "Unit II Minimum DMNC  Threshold"
set at 265 MW. If the  "Summer  Target  DMNC" is achieved  exactly,  25% of this
bonus shall be paid by Owner to Contractor. If the Summer DMNC is between 345 MW
and 360 MW, a bonus shall be paid by Owner to Contractor proportionally equal to
0% to 100% of the  remaining  available  bonus for this test. If "Unit I Minimum
DMNC  Threshold",  or "Unit II Minimum  DMNC  Threshold"  are not met during the
Summer Capability  Demonstration Period, and Owner is harmed as of result of the
DMNC reported, a credit shall be applied by Contractor to Owner equal to 100% of
the available bonus for this test. There shall be no credit applied in the event
that Unit I and Unit II DMNC  Thresholds  are not met,  and  Owner has  reported
acceptable  values per testing  procedures in Exhibit VIII.  Any changes in test
practices,  as agreed to by Owner and  Contractor  shall be  amended  in Exhibit
VIII, and may result in new mutually agreeable target figures.

          (ii) Integrated  Facility DMNC  Test-Winter  Capability  Demonstration
Period  ("Winter  DMNC").  The available bonus for this test is 20% of the Plant
Performance  Bonus.  The plant's  integrated  Winter DMNC test will be performed
using the  procedures  mutually  agreed to by  Contractor  and Owner per Exhibit
VIII.  The "Winter  Target  DMNC"  shall be equal to 410 MW.  Because the Winter
Capability  Demonstration Period straddles two Contract Years, the Facility DMNC
demonstrated  during  the  period  will be  applicable  in the year in which the
Winter  Capability  Demonstration  Period ends.  For example:  the Facility DMNC
demonstrated  during the period  November 1, 1999 through April 15, 2000 will be
applicable  for the 2000 Contract  Year. If the "Winter Target

                                       17

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

DMNC"  is  achieved  exactly,  25% of this  bonus  shall  be paid  by  Owner  to
Contractor.  If the Winter  DMNC is between  410 MW and 430 MW, a bonus shall be
paid by Owner to Contractor  proportionally equal to 0% to 100% of the remaining
available  bonus for this test. If the Winter  Target DMNC is not  achieved,  no
bonus  shall  apply.  Any changes in test  practices,  as agreed to by Owner and
Contractor  shall be  amended in Exhibit  VIII,  and may result in new  mutually
agreeable target figures.


          (iii)  Equivalent  Forced Outage Rate (EFOR) - The available amount of
the Plant  Performance  Bonus based upon this  measurement  will be allocated as
detailed below. The EFOR, on a percentage basis, shall be calculated by Owner on
a monthly  basis for each of the Unit I and Unit II  facilities,  in  accordance
with the North American Electric  Reliability Council  "Generating  Availability
Data System"  (NERC/GADS)  standards (IEEE definition) annexed to this Agreement
as Exhibit XII, in effect at the time this Agreement is signed. Owner will allow
adjustments  to the EFOR  calculation  in the  case of (1)  acts of God,  flood,
drought,  earthquake,  severe  storm,  pestilence,  lightning  and other natural
catastrophes,  epidemic,  war, riot, civil disturbance or disobedience,  strikes
labor disputes ; (2) action or inaction of  legislative,  judicial or regulatory
agencies or other proper authority; (3) any similar occurrence caused by a third
party beyond  Contractor's  reasonable  control;  (4) Owner's failure to provide
recommended  Spare Parts in  accordance  with GER 3620 (Exhibit II); (5) Owner's
undue  delay in acting out  responsibilities  under  Clauses  4.4 and 5.4 or (6)
Owner-requested  schedule  changes (in required  maintenance or operations)  for
business  reasons,  as mutually agreed by Owner and Contractor.  The use of this
calculation is based on its adoption and use by the New York Independent  System
Operator  (NYISO)  and  may be  replaced,  by  mutual  agreement  of  Owner  and
Contractor,  if a different  performance measure is utilized by either the NYISO
or the Combined Facility's electric power customers.


               (a) "Unit I Peak Period Average EFOR":  The available bonus based
upon this  measurement is 15% of the Plant  Performance  Bonus.  The Unit I Peak
Period  Average  EFOR will be the  mathematical  average of the  monthly  Unit I
EFOR's during the calendar months included in the Unit I Peak Period.

If the Unit I Peak Period  Average EFOR is equal to 2.0%, no bonus shall be paid
or credited.

If the Unit I Peak Period Average EFOR is between 2.0%and 0.0%, a bonus shall be
paid by Owner to Contractor  proportionally equal to 0% to 100% of the available
bonus for this measurement.

If the Unit I Peak Period  Average EFOR is between 2.0% and 3.0%, a credit shall
be  applied by  Contractor  to Owner  proportionally  equal to 0% to 100% of the
available bonus for this measurement.

                                       18
Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>


               (b) "Unit II Peak Period Average EFOR": The available bonus based
upon this  measurement is 15% of the Plant  Performance  Bonus. The Unit II Peak
Period  Average  EFOR will be the  mathematical  average of the monthly  Unit II
EFOR's during the calendar months included in the Unit II Peak Period.

If the Unit II Peak Period Average EFOR is equal to 2.0%, no bonus shall be paid
or credited.

If the Unit II Peak Period  Average EFOR is between 2.0% and 0.0%, a bonus shall
be  paid  by  Owner  to  Contractor  proportionally  equal  to 0% to 100% of the
available bonus for this measurement.

If the Unit II Peak Period Average EFOR is between 2.0% and 3.0%, a credit shall
be  applied by  Contractor  to Owner  proportionally  equal to 0% to 100% of the
available bonus for this measurement.

               (c) "Unit I Non-Peak  Period Average EFOR":  The available  bonus
based upon this  measurement is 10% of the Plant  Performance  Bonus. The Unit I
Non-Peak  Period  Average EFOR will be the  mathematical  average of the monthly
Unit I EFORs during the calendar months included in the Unit I Non-Peak Period.

If the Unit I Non-Peak  Period  Average EFOR is equal to 2.0%, no bonus shall be
paid or credited.

If the Unit I Non-Peak  Period  Average  EFOR is between  2.0% and 0.0%, a bonus
shall be paid by Owner to Contractor  proportionally  equal to 0% to 100% of the
available bonus for this measurement.

If the Unit I Non-Peak  Period  Average  EFOR is between 2.0% and 3.0%, a credit
shall be applied by  Contractor to Owner  proportionally  equal to 0% to 100% of
the available bonus for this measurement.

               (d) "Unit II Non-Peak  Period Average EFOR":  The available bonus
based upon this measurement is 10% of the Plant  Performance  Bonus. The Unit II
Non-Peak  Period  Average EFOR will be the  mathematical  average of the monthly
Unit II EFORs  during  the  calendar  months  included  in the Unit II  Non-Peak
Period.

If the Unit II Non-Peak  Period Average EFOR is equal to2.0%,  no bonus shall be
paid or credited.

If the Unit II Non-Peak  Period  Average EFOR is between  2.0%and  0.0%, a bonus
shall be paid by Owner to Contractor  proportionally  equal to 0% to 100% of the
available bonus for this measurement.

                                       19

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>


If the Unit II Non-Peak  Period  Average EFOR is between 2.0% and 3.0%, a credit
shall be applied by  Contractor to Owner  proportionally  equal to 0% to 100% of
the available bonus for this measurement.


     7.2.2  Performance  Incentive  Based  upon  Financial  Performance.  Thirty
percent (30%) of the above available bonus is based upon Financial Performance.

The available  bonus for Financial  Performance is based upon Operating  Income.
The "Target  Operating Income" is defined as the Operating Income as budgeted in
the Partnership  Budget.  If the actual  Operating Income is equal to 80% of the
Target Operating  Income, no bonus shall be paid. If the actual Operating Income
is between 80% and 105% of the Target Operating Income, a bonus shall be paid by
Owner to Contractor  proportionally  equal to 0% to 100% of the available  bonus
for this  measurement.  If the actual  Operating Income is between 80% and 70%of
the Target  Operating  Income,  a penalty  shall be paid by  Contractor to Owner
proportionally  equal to 0% to 100% of the available bonus for this measurement.
See Exhbit I for further explanation.


     7.2.3  Performance  Incentive  Based  upon  Management  Performance.  Forty
percent (40%) of the above available bonus is based upon Management Performance.
This portion of the performance  incentive (the "Management  Performance Bonus")
is subjective, and the parameters listed below will be considered:

         Environmental Health and Safety Practices
         Site Management Responsiveness
         GECS Headquarter Personnel Management Responsiveness
         Staffing levels
         Cooperation with Host
         Succession Planning
         Customer Savings Projects
         Reports (timeliness and quality)
         Facility Appearance
         Community Relations
         Cooperation with Consultants
         Tour Participation
         Budget Submittals (timeliness and quality)
         Cooperation with Owner with respect to special projects and Extra Work

          Review Meetings  (three  times per  Contract  Year)

          o    Organize  Review  Meetings  amongst  Owner   representatives  and
               Contractor's  headquarter/management personnel
          o    Include thorough review/update/status report of those items being
               measured under Article 7, specifically Clause 7.2.3

                                       20

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

This list is not to be considered exhaustive.  In an effort to fairly administer
the Management  Performance  Bonus, Owner and Contractor  representatives  shall
meet  three  times per year to  discuss  Management  Performance.  These  review
meetings shall include Owner  representatives,  including the General Manager at
the  Facility,  and  Contractor's  headquarter/management  personnel,  and shall
consist of, at a minimum, a thorough  review/update/status report of those items
being measured under Article 7,  specifically  Clause 7.2.3. Such meeting(s) may
be held either in person, via videoconference,  or teleconference, and shall not
affect the Management  Performance  Bonus,  unless minimum number of meetings is
not satisfied  within given year. If the  Contractor  meets or exceeds  expected
Management  Performance,  Owner  shall  pay a bonus  equal  to 0% to 100% of the
Management  Performance  Bonus on a subjective basis. If the Contractor fails to
reasonably  meet the overall  objectives  of the  measurement  criteria for this
section,  Contractor  shall pay a penalty equal to 0% to 100% of the  Management
Performance Bonus as administered by the Owner on a subjective basis.


7.3  Limitation.  The Parties  agree that it would be  difficult  to  accurately
determine  the  amount of actual  damages  which  would  arise  upon  failure of
Contractor to attain the outlined  measurements  in accordance to Clause 7.2, or
the deficiencies determined in accordance to Clause 7.2. Therefore,  the Parties
agree that the amounts determined to be due to Owner from Contractor pursuant to
Section 7.2 are liquidated damages and not penalties. Payment of such liquidated
damages shall be in lieu of all actual damages arising upon such occurrences and
shall be Owner's sole and  exclusive  remedy and,  when paid,  shall relieve the
Contractor  from all  liability  for any costs,  losses or expenses,  claims and
penalties,  of whatsoever nature incurred by the Owner which result from, or are
occasioned by, any failure of the Combined Facility to achieve electrical output
or to accept and process  Acceptable Fuel. The sum of all liquidated  damages as
set forth in this  Agreement  shall not exceed,  in the  aggregate,  Six Hundred
Twenty  Thousand  Dollars  ($  620,000.00)  for the first  Contract  Year of the
Agreement,  and  Three  Hundred  Ten  Thousand  Dollars  ($310,000.00)  for  the
remaining  Contract Years of this Agreement.  A bonus earned pursuant to Clauses
7.2.1,  7.2.2,  and 7.2.3 may offset any  liquidated  damages  due  pursuant  to
Clauses 7.2.1, and 7.2.2.

7.4 Payment Terms -- Owner Payments to Contractor.

     7.4.1 For the Term of this Agreement, all payments from Owner to Contractor
shall be due and payable by Owner  without  setoff  within  fifteen (15) days of
receipt of a Contractor's Invoice by Owner.

     7.4.2 When Contractor performs Extra Work,  Contractor will submit to Owner
a  Contractor's  Invoice for payment for such work.  All payments  from Owner to
Contractor  shall be due and payable  without setoff within fifteen (15) days of
receipt of a Contractor's Invoice by owner.

                                       21
Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

     7.4.3 In the event Owner does not make full payment within twenty (20) days
of receipt of Contractor's  invoice,  interest shall accrue on any unpaid amount
at a rate equal to two  percent  (2%) per annum  above the prime  rate  publicly
announced  by Chase  Manhattan  Bank,  N.A. and in effect on the due date of the
payment,  for the period  commencing on the  fifteenth  (15th) day after Owner's
receipt  of the  invoice  and  continuing  to the date  payment is  received  by
Contractor.  In any event,  Contractor  shall have the absolute right to Suspend
all work under this Agreement if said payment is not made within forty-five (45)
days of Owner's receipt of said invoice.

     7.4.4 In the event Owner  discovers  the amount of an invoice is  incorrect
Owner shall provide prompt written notice to the Contractor thereof.


7.5 Payment Terms -- Contractor Payments to Owner.

     7.5.1 For the term of this  Agreement,  amounts due, if any,  under Section
7.1 (ix) from  Contractor to Owner shall be due and payable by payment or credit
without  setoff  within 30 days of the end of a  Contract  Year.  In the case of
credit, net settlement is due within 30 days. After this 30 days, net payment is
due. In the event  Contractor does not make full payment,  or issue  appropriate
credit,  within thirty (30) days of the end of the Contract Year, interest shall
accrue on any unpaid  amount at a rate equal to the lesser of two  percent  (2%)
per annum above the prime rate publicly  announced by Chase Manhattan Bank, N.A.
and in effect on the due date of payment,  or the maximum rate allowable by law,
for  the  period  commencing  on the due  date  of the  payment  or  credit  and
continuing to the date payment is received by Owner.

     7.5.2 In the event of notice by Owner  pursuant  to Clause  7.4.4,  a final
determination  or  agreement  that  the  amount  of the  invoice  at  issue  was
incorrectly  determined  and in  excess of the  amount  actually  due,  and that
payment was received by  Contractor  pursuant to Clause  7.4.1 or Clause  7.4.2,
Contractor shall reimburse Owner, without setoff, for the excess amount together
with  interest  thereon at the rate equal to the lesser of two percent  (2%) per
annum above the prime rate publicly  announced by Chase Manhattan Bank, N.A. and
in effect on the date notice was  received by  Contractor,  or the maximum  rate
allowable  by  law,  for the  period  commencing  on the  later  of the  date of
Contractor's receipt of Owner's notice pursuant to Clause 7.4.4 or the date that
payment was received by Contractor  pursuant to Clause 7.4.1 or Clause 7.4.2 and
continuing to the date payment is received by Owner.


7.6      Escalation.

     7.6.1 For the purpose of escalation  under Clause 4.1.2,  and Sections 7.1,
7.2, 12.4, and 13.2 the following definitions apply:

                                       22
Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

          (i)  "CPI-W"  for  Operations  Phase  shall  be The  Bureau  of  Labor
Statistics  Consumer  Price Index for Urban Wage  Earners and  Clerical  Workers
(CPI-W) as  published  monthly for the  Northeast  Region by the Bureau Of Labor
Statistics for the U.S.  Department of Labor  (updated for base year  82-84=100,
pursuant to Series ID CWUR0100SA0).

          (ii) The "Current  Month  CPI-W"  shall be the latest CPI-W  published
prior to the date an invoice is issued.

          (iii)  The  "Percent   Increase  In  CPI-W"  shall  be  calculated  by
subtracting  the previous  month CPI-W from the Current Month CPI-W and dividing
this  difference  by the  previous  month CPI-W and  expressing  the result as a
percentage.

          (iv) The "Current  Month Rolling Six Month Average CPI-W Change" shall
be calculated  by adding the Percent  Increase In CPI-W for the current month to
the Percent Increase In CPI-W for the previous five (5) months and dividing this
sum by six (6). This quotient shall be expressed as a percent.

          (v) "Base Payment" shall be the payment based on the applicable  price
as written in this Agreement.

          (vi) The "Current  Month  Payment"  shall be equal to the Base Payment
for the month of January 2000. Beginning July 1, 2000, each subsequent month the
Current  Month Payment  shall be equal to the previous  month payment  escalated
pursuant to Clause 7.6.2.

         7.6.2    Adjustment of Payments.

          (i) The payments shall be adjusted upward monthly if the Current Month
Rolling Six Month Average  CPI-W Change is greater than zero.  The Current Month
Payment shall be calculated by multiplying the previous month payment calculated
as  described  herein by the sum of one (1) plus the Current  Month  Rolling Six
Month Average CPI-W Change. If the Current Month Rolling Six Month Average CPI-W
Change is less than or equal to zero,  the Current Month Payment shall equal the
previous  month  Payment.  In any  event,  no  payment  shall  be less  than the
applicable Base Payment.

          (ii) In the event the CPI-W shall no longer be published, the base for
the index is changed, or the schedule for publishing the index is changed,  such
other index as Owner and  Contractor  shall  reasonably  determine  that is most
nearly compatible, will be utilized.

          (iii) Adjustments shall be calculated to the nearest  one-hundredth of
one percent.


                                       23

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

Example: A sample monthly payment shall be calculated as follows:

Assume a Base Payment of $10,000 is due.

The Current Month Rolling Six Month Average CPI-W Change is equal to

<TABLE>
<CAPTION>
<S>         <C>           <C>           <C>           <C>           <C>

   Mo. 1         Mo. 2           Mo. 3         Mo. 4        Mo. 5        Mo. 6
142.6-141.9 + 142.8-142.6 + 143.0-142.8 + 143.2-143.0 + 144.1-143.2 + 144.2-144.1 =
-----------   -----------   -----------   -----------   -----------   -----------
  141.9          142.6         142.8          143.0        143.2         144.1

</TABLE>

0.0161 / 6 = 0.0027 = 0.27% per month.

The payment due is ($10,000) (1.0 + 0.0027) = $10,027.


          7.6.3 For the  purpose of  escalation  under  Section  13.2 the annual
Limitation  of Liability  shall be  calculated  by  multiplying  the  applicable
limitation  in Section 13.2 by a fraction the  numerator of which is the Current
Month CPI-W for  January of the current  Contract  Year and the  denominator  of
which is 173.0 (the CPI-W for January 2000).


7.7 Taxes. Prices in this Agreement do not include sales,  excise,  value added,
use or other similar taxes.  Consequently,  in addition to the prices specified,
any such  taxes  will be  calculated  by  Contractor  and added to  Contractor's
invoices at the time  specified  in this  Agreement  and will be due and payable
with the invoice.  Owner may provide Contractor with a tax exemption certificate
for any of the above taxes, acceptable to the applicable taxing authorities,  in
lieu of these additions. Owner shall indemnify and hold harmless Contractor from
all claims or liability for such taxes.









                                       24

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

                                   ARTICLE 7B
                            LONG TERM PARTS AGREEMENT

Owner and Contractor  agrees to purchase a volume of parts per Exhibit X to this
Agreement.  Exhibit X,  Attachment  A, Table 1, option B shall  govern as of the
Agreement signature date, unless further revised by amendment to this Agreement,
per the terms in Exhibit X.



                                    ARTICLE 8
                                  TITLE PASSAGE

     Title to all materials and services  provided  under this  Agreement  shall
pass to Owner upon  performance  of the work or  delivery  of  materials  to the
Combined  Facility,  whichever  first  occurs.  It is expressly  understood  and
agreed, however, that the passage of title shall not release Contractor from its
responsibility to fully carry out its obligations under this Agreement.


                                    ARTICLE 9
                                EXCUSABLE DELAY

     Contractor shall not be liable for  nonperformance of its obligations under
this Agreement or lack of cure of nonperformance  or default,  to the extent its
nonperformance  or lack of cure of nonperformance or default is due to: (1) acts
of God, flood, drought,  earthquake,  severe storm, fire, pestilence,  lightning
and other natural  catastrophes,  epidemic,  war,  riot,  civil  disturbance  or
disobedience,  strikes labor  disputes ; (2) action or inaction of  legislative,
judicial or regulatory  agencies or other proper  authority;  (3)  mechanical or
electrical  failure of the Combined Facility due to causes other than the fault,
negligence,  or  breach  of  Contractor  under  this  Agreement  or the fault or
negligence  of  Contractor's  agents or  employees;  (4) acts of  Owner;  or (5)
sabotage  of  the  Combined  Facility;  or (6)  any  similar  occurrence  beyond
Contractor's  reasonable control. In the event of the occurrence of an Excusable
Delay,  Contractor shall promptly notify Owner.  Contractor shall use reasonable
efforts to  mitigate  the  consequences  of an  Excusable  Delay and to continue
performance  by  alternative  means  or to  resume  performance  as  quickly  as
possible,  and  shall  Suspend  performance  only for such  period of time as is
necessary as a result of an event of Excusable  Delay.  Nothing  herein shall be
construed to obligate  Contractor to settle any strike or labor disturbance . In
the event of a strike or other form of labor  action which  prevents  Contractor
from  continuing to provide  personnel to operate the Combined  Facility,  Owner
shall have the right to continue  operating the Combined  Facility and to retain
such other personnel or agents as Owner in its sole  discretion  deems necessary
or advisable  for such purpose,  and Owner shall be obligated to pay  Contractor
only for the services  provided by Contractor  during any such period of Owner's
Operation,  but Owner shall not be relieved

                                       25
Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

of its obligation to pay  Contractor for all work performed by Contractor  prior
to such occurrence.


                                   ARTICLE 10
                                      TERM

     This  Agreement  shall be effective on January 1, 2000, and shall remain in
effect  through  October 31, 2007,  subject to earlier  termination  as provided
under this Agreement.


                                   ARTICLE 11
                              TERMINATION BY OWNER

11.1 Termination for Contractor's  Insolvency.  If Contractor sells or transfers
all or substantially  all of its assets,  or makes a general  assignment for the
benefit of its  creditors,  or  institutes a proceeding in  bankruptcy,  or if a
receiver  is  appointed  on  account  of its  insolvency,  Owner may  request of
Contractor or its successors in interest  assurance,  satisfactory  of Owner, of
Contractor's  future  performance in accordance with the terms and conditions of
this Agreement. If Contractor fails to provide such assurance within thirty (30)
days of a request thereof,  Owner may, without  prejudice to any right or remedy
and after giving  Contractor seven (7) days prior notice thereof,  terminate the
employment of Contractor.

11.2  Termination  for  Contractor's  Inability  to  Perform  Economically.   If
Contractor  submits  Payment  Requests to Owner which  reflect  expenditures  in
excess of 115  percent of the  Budget,  unless  otherwise  adjusted  pursuant to
Clause  4.3,  for Direct  Costs and Direct  Materials,  excluding  Spare  Parts,
capital expenditures and Facility improvements, for two (2) consecutive or three
(3) overall Contract Years of Combined Facility  Operation in a seven year Term,
then Owner may,  without  prejudice to any right or remedy available to it under
this  Agreement,  terminate the  employment  of Contractor  upon sixty (60) days
prior  written  notice,  which  notice shall be served  within  ninety (90) days
following the end of the Contract Year in question.


11.3     Other Grounds for Termination.

         11.3.1   Owner may terminate this Agreement for cause:

               (i)  Immediately  upon written  notice,  if  Contractor  fails to
maintain all of the insurance  specified to be supplied by Contractor in Article
16, per the  provisions  outlined  in Article  16;  except if such notice is the
result of a failure of Electric Insurance Company or successor insurance company
to maintain its authorization to do business in New York or a Best's rating of A
minus (A-) or better,  and be  assigned  Class IX or better,  as measured by the
A.M. Best Company,  such termination  shall take effect only if Contractor

                                       26
Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

fails to cure  within  30 days by  provision  of  insurance  through  a  carrier
satisfactory pursuant to Clause 16.2.1; or


               (ii) by written  notice,  which notice shall  specify all claimed
deficiencies,  if Contractor  fails to perform its services in  accordance  with
Prudent Utility Practices;  provided,  however,  that the termination shall take
effect  only upon  expiration  of a 30 day cure  period  following  Contractor's
receipt  of  Owner's  notice  and  only  if  Owner  reasonably  cooperates  with
Contractor  in achieving a cure,  including,  subject to Article 13  "Warranty",
approval of costs for Direct  Materials,  Direct Labor,  Direct  Management  and
Direct  Subcontracts,  if  necessary  to cure the  deficiencies.  It is  further
provided that if Contractor is not  reasonably  able to complete the cure within
30 days, the termination  shall take effect when and only if Contractor fails to
continue to pursue efforts to cure the deficiencies with reasonable diligence or
Contractor fails to cure the deficiencies  within one year following  receipt of
the notice of termination; or

               (iii) by written  notice,  which notice shall specify all claimed
deficiencies, if Contractor fails to perform its services in accordance with any
other provision of this Agreement and such failure has a material adverse effect
on Owner;  provided,  however,  that the termination shall take effect only upon
expiration  of a 60 day cure period  following  Contractor's  receipt of Owner's
notice and only if Owner  reasonably  cooperates  with Contractor in achieving a
cure, including, subject to Article 13 "Warranty",  approval of costs for Direct
Materials, Direct Labor, Direct Management and Direct Subcontracts, if necessary
to cure the  deficiencies.  It is further  provided  that if  Contractor  is not
reasonably able to complete the cure within 60 days, the termination  shall take
effect when and only if Contractor  fails to continue to pursue  efforts to cure
the  deficiencies  with  reasonable  diligence or  Contractor  fails to cure the
deficiencies within one year following receipt of the notice of termination; or

               (iv) Upon thirty (30) days prior written notice,  in the event an
Excusable Delay occurs that is not remedied within ninety (90) days of discovery
despite Owner's reasonable efforts, which efforts shall be commensurate with the
effect of Contractor under Article 9.

     11.3.2  Owner  may  terminate  this  Agreement  on the  effective  date  of
termination  of any of the Host  Agreements  upon sixty (60) days prior  written
notice provided that upon termination under this Clause 11.3.2, Contractor shall
follow the procedures and be entitled to the relief granted by Section 12.4.


11.4 Owner's Rights Upon Termination of Contractor. In the event Owner elects to
terminate this Agreement pursuant to this Article 11, Owner shall have the right
to  continue  to use any and all  confidential  information,  including  project
records,  (computer  records shall be provided in both  electronic and hard copy
forms),  that are  regularly  maintained  at

                                       27

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

the Facility Site and  reasonably  necessary to the  continued  Operation of the
Combined Facility,  provided Owner and others with whom the information may need
to be shared to support Facility  Operations agree with Contractor in writing to
maintain  the  confidentiality  of such  information  pursuant to Section  20.7.
Furthermore,  Owner shall have the right to employ any other  person,  firm,  or
corporation to perform the services by whatever method Owner may deem expedient.
Notwithstanding the foregoing, the following materials are excluded and need not
be provided: software developed by or licensed to Contractor, personnel records,
Contractor's  financial  records,  medical records and proprietary  drawings and
design  information  furnished for  Contractor's use by any other section of the
General Electric Company.

     11.4.1 Except as otherwise set forth in this Section,  upon  termination of
this Agreement  pursuant to this Article 11, Contractor shall not be entitled to
receive any further payments under this Agreement, except for payments, pursuant
to Article 7, for services  performed prior to such termination.  Contractor and
Owner  shall,  however,  continue  to  possess  and be bound by the  rights  and
obligations set forth in Section 7.7, Section 11.4,  Section 11.5, Section 12.4,
Article 13, Article 14, Article 15, Section 20.7, and Section 20.20.


11.5  Contractor's  Obligation  Upon  Termination.  If Owner elects to terminate
Contractor's  employment  pursuant to this  Article  11,  Contractor  shall,  at
Owner's  request and at  Contractor's  expense,  perform the following  services
relative to the services so affected:

     (i) Assist Owner in preparing an  inventory  of all  equipment,  fuel,  and
supplies in use or in storage at the Facility Site;

     (ii) Remove from the Facility Site goods, equipment,  material and the like
belonging to Contractor;

     (iii) Assign to Owner (to the extent they are assignable) all  subcontracts
as may be designated by Owner except for  subcontractors,  other than Host Labor
Services Contractor, that are affiliates of the Contractor; and

     (iv) Continue to perform all of its obligations  under this Agreement until
the date on which the termination becomes effective.


11.6 Owner's Right to Termination for  Convenience.  Owner shall have such right
after  year three of this  Agreement,  subject to the  conditions  contained  in
Section 12.6.

                                       28

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>



                                   ARTICLE 12
                            TERMINATION BY CONTRACTOR

12.1 Ninety-Day Notice.  Upon ninety- (90) days advance written notice to Owner,
Contractor may terminate this Agreement for the following reasons:

     (i) an event of Excusable Delay which cannot reasonably be cured; or

     (ii)  Owner's   unreasonable   failure  to  follow   Contractor's   written
recommendations  for  Combined  Facility   Operation,   including  Operation  in
accordance  with all  permits,  inspection,  and  repair,  which  failure  has a
material and adverse effect on Contractor; or

     (iii) failure of Owner to maintain all the  insurance  specified in Article
16; or

     (iv) Owner's failure to perform any of its material  obligations under this
Agreement, which failure has a material and adverse effect on Contractor; or

     (v) the termination of any of the Host Agreements; or

     (vi)  facts  or  circumstances,   not  caused  by  Contractor,  arise,  are
discovered, or become known to Contractor, which actually or potentially results
in risks that Contractor  reasonably  deems  imprudent or unsuitable,  and which
were not disclosed, for whatever reason, by hazardous business reviews conducted
(such reviews to be conducted at Contractor's expense and at the approval of the
Owner;  such approval  shall not be  unreasonably  withheld) by Contractor  with
respect to the transaction, or

     (vii) Owner's  failure to provide,  at all times, a Combined  Facility that
complies with and is designed and operable in accordance  with,  all  applicable
federal, state, and local permits, laws, rules,  regulations and ordinances,  in
accordance with Owner's  obligations  arising under the Host Agreements,  and in
accordance with Owner's  obligations  arising under the Power Sale Agreement(s),
and in accordance with Contractor's obligations under Section 2.2; or

     (viii) circumstances or a combination of circumstances arise or exist which
could reasonably be expected to result in Contractor being subject to regulation
as a utility under the Federal Power Act, Public Utilities  Regulation  Policies
Act (PURPA),  Public Utilities Holding Company Act (PUHCA),  or other applicable
laws, rules, or regulations; or

     (ix) Owner and Contractor fail to reasonably  agree on a Budget for two (2)
consecutive or three (3) overall Contract Years of Combined  Facility  Operation
in a seven year Term.

                                       29

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

12.2 Thirty-Day  Notice.  Upon thirty (30) days advance written notice to Owner,
Contractor may terminate this Agreement for Owner's failure to pay  Contractor's
Invoice within thirty (30) days of Owner's receipt of said invoice.


12.3 Cure Rights.  Upon receipt of a notice  pursuant to Section  12.1, or 12.2,
Owner  shall  have the right to  attempt  to cure the event  giving  rise to the
termination notice. In the event Owner cures the event before the effective date
of termination, the notice of termination shall be of no force or effect; and in
the event Owner undertakes but cannot complete cure before the effective date of
termination,  the  termination  date shall be  extended  by  fifteen  (15) days.
Notwithstanding   the  foregoing,   Contractor  may   immediately   Suspend  its
performance  or work during the  existence of any events  identified  in Section
12.1, or for circumstances  which prevent Contractor from performing services in
accordance with this Agreement.


12.4 Payments Upon Termination. In the event of termination of this Agreement by
Contractor  for reasons  described in Section  12.1,  or  notification  by Owner
pursuant  to  Article  10,  or  Clause  11.3.2,   Contractor   shall  deliver  a
Contractor's  Invoice to Owner identifying all payments due, pursuant to Article
7,  for  services  performed  prior  to the date of  termination.  In  addition,
Contractor  shall be paid a Direct  Management  relocation fee of Fifty Thousand
Dollars ($50,000) per person within thirty (30) Days of the Date of termination,
Contractor's   reasonable   termination   costs  (consisting  of  the  costs  of
terminating or relocating  Direct Labor,  unless such relocated Direct Labor are
transferred to a new electric  generating facility for which Contractor provides
operation  services,  and relocating  material and equipment).  Contractor shall
invoice Owner monthly as  termination  costs are incurred.  The  relocation  fee
shall be escalated  monthly in  accordance  with  Section 7.6,  prorated for any
period  less than a month,  and billed on or about the first day of each  month.
All termination  costs will be completed within three months.  Contractor agrees
to cooperate with Owner to minimize costs.  Payment shall be due consistent with
the  provisions  of Section 7.6. Any late payment  shall bear interest at a rate
equal to two percent (2%) per annum above the prime rate  publicly  announced by
Chase Manhattan Bank, N.A. and in effect on the due date of the payment, for the
period  commencing on the fifteenth day after Owner's receipt of the invoice and
continuing to the date payment is received by Contractor.


12.5 Owner's and Contractor's  Rights upon Termination.  Except as otherwise set
forth in this  Section,  upon  termination  of this  Agreement  pursuant to this
Article  12,  liability  of the  Contractor  for  acts  performed  prior  to the
termination  shall continue,  but all liabilities of Contractor  shall otherwise
cease. Contractor and Owner shall, however,  continue to possess and be bound by
the rights and obligations set forth in Section 7.7,  Section 12.4,  Article 13,
Article 14, Article 15, Section 20.7, and Section 20.20.

12.6 Owner's and Contractor's  Termination  Buyout.  At any time after year 3 of
the Agreement  Owner may terminate the provisions of this Agreement  relating to
the

                                       30

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

Operations  and  Routine  Maintenance  Services  for its  convenience  by giving
Contractor  not less than one  hundred  twenty  (120) days  prior  notice to the
effective date of such termination.  In the event that such termination  occurs,
Owner shall pay  Contractor  the  "Buy-out  Amount"  specified  in Table A, plus
applicable  demobilization  costs,  which  include the payments  for  relocation
pursuant to Section 12.4,  within thirty (30) days of the termination  effective
date, plus any Extra Work or other completed  Services or Performance  Incentive
amounts  due to  Contractor  for which the  Contractor  has not been  paid.  The
foregoing  shall be Owner's sole and exclusive  liability to Contractor for that
Facility upon any termination pursuant to this Article 12.6.

Contractor's  Right to Termination for Convenience.  At any time after year 4 of
the  Agreement,  Contractor  may  terminate  the  provisions  of this  Agreement
relating to the Operations and Routine Maintenance Services for the Facility for
its  convenience  by giving Owner not less than 180 days prior written notice to
the  effective  date of  such  termination.  In the  event  of such  termination
Contractor  shall pay Owner the Buy-out Amount  specified in Table A below.  The
foregoing shall be the Contractor's  sole and exclusive  liability to Owner upon
any termination pursuant to this Section 12.6.

Buy-out Amount:  The Parties agree that the damages likely to be incurred in the
event of  termination  as set forth in Section 12 will be  difficult to measure,
that the Buy-out Amount is reasonable, and that the Buy-out Amount shall be paid
in lieu of all such actual damages and not as a penalty.


TABLE A:  BUYOUT AMOUNTS

                Year of the Agreement            O&M Buy-Out Amount
                2000                             N/A
                2001                             N/A
                2002                             N/A
                2003                             $966,000.00
                2004                             $767,000.00
                2005                             $545,000.00
                2006                             $290,000.00
                2007                             $100,000.00


                                       31

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

                                   ARTICLE 13
                                    WARRANTY

13.1 Warranty.  Contractor  warrants to Owner that the work performed under this
Agreement shall be performed by competent personnel, in accordance with the Work
Scope and will be free from defects in workmanship and materials.  The foregoing
warranty,  and the remedy set forth  below,  applies to any defect that  appears
within  one (1)  year  from  the date the  work  giving  rise to the  claim  was
performed.


13.2 Exclusive  Remedy.  Subject to Article 15, and provided that Contractor has
been notified in writing  promptly  after Owner  becomes aware of a defect,  and
whether a claim, however instituted, is based on contract, indemnity,  warranty,
tort (including negligence), strict liability or otherwise, the exclusive remedy
for any claim based on failure of, or defect in, services or materials furnished
by Contractor hereunder shall be: (a) for defective services:  the retraining or
replacement of Contractor's  personnel and the  re-performance  by Contractor of
any defective portion of the services furnished; and (b) for any damaged part(s)
of  the  equipment  resulting  from  defective  services  performed  under  this
Agreement  or  for  defective  materials  provided  hereunder:   the  repair  or
replacement  (at  Contractor's  option)  of the  damaged  part(s)  or  defective
materials. If reperformance of defective services is not practicable, Contractor
shall furnish  without charge services in an amount  essentially  equal to those
which would have been  required  for  reperformance  or  negotiate  an equitable
adjustment  in price  based  upon the cost of the  defective  services.  Where a
damaged  part(s) or  defective  material(s)  cannot be  repaired  or replaced by
Contractor's  reasonable  efforts,  the  Parties  will  negotiate  an  equitable
adjustment in price based upon the cost of the damaged  part(s) or  material(s).
Notwithstanding  the  above,   Contractor's  obligation  whether  for  providing
services, parts or materials shall be limited to a maximum of One Hundred Twenty
Three Thousand Dollars  ($123,000.00) per incident and Three Hundred Sixty Eight
Thousand Dollars  ($368,000) per Contract Year. These limits shall be subject to
escalation in accordance with Clause 7.6.3. In the event the applied  deductible
of Owner's  insurance  coverage is less than One Hundred  Twenty Three  Thousand
Dollars ($123,000.00) per incident,  Contractor's obligation shall be limited to
the amount of that deductible.


13.3 Exclusions. This warranty is exclusive and in lieu of all other warranties,
whether written,  oral, implied, or statutory.  NO IMPLIED STATUTORY WARRANTY OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR  PURPOSE SHALL APPLY.  Contractor
does not  warrant  under this  Agreement  any  product,  material or services of
others,  which Owner has furnished.  Unless  expressly stated in the Work Scope,
Contractor  does not warrant under this  Agreement the fitness or suitability of
the equipment on which the services are performed, or any modifications thereof,
for any specific application,  performance,  results or use. Any oral or written
representation,  warranty, course of dealing or trade usage not contained herein
will not be binding on any Party.

                                       32

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

                                   ARTICLE 14
                              CROSS INDEMNIFICATION

     Subject to the  provisions  of Article 15 and  Article  16.1.3,  Contractor
hereby agrees to indemnify and hold  harmless  Owner or its servants,  agents or
employees,  from damage to third parties' property (excluding the Facility Site)
or bodily injury to third parties (including death) to the extent resulting from
the negligence of Contractor or its servants, agents or employees, while engaged
in activities  under this  Agreement.  Owner shall  likewise  indemnify and hold
harmless  Contractor  or its servants,  agents or employees,  from any damage to
third parties'  property or bodily injury to third parties  (including death) to
the  extent  resulting  from the  negligence  of Owner or its  servants,  agents
(except  Contractor) or employees,  while engaged in activities relating to this
Agreement.  In the event such damage or bodily  injury is caused by the joint or
concurrent  negligence of Owner and Contractor;  the loss shall be borne by each
Party  in  proportion  to  its  negligence.   No  act  or  omission  of  the  GE
International,  Inc., in its role as Contractor  under this Agreement shall give
rise to any Owner  right to or claim for  indemnification  under any of the Host
Agreements.  No act or omission of the General  Electric  Company in its role as
Landlord under the Lease Agreement,  as amended,  as Grantor under the Utilities
Building  Agreement Easement  Agreement,  as GE under the Utilities and Services
Agreement  and the  Amended  and  Restated  Boiler  Facility  Purchase  and Sale
Agreement,  as Buyer under the Agreement For The Sale Of Steam,  or in a similar
role under any other  Host  Agreement  shall give rise to any Owner  right to or
claim for  indemnification  under this  Agreement.  All  rights and  obligations
established  by or  arising  under  any of the Host  Agreements  or  related  to
performance  thereof shall be governed and determined by such Host Agreement and
all rights and  obligations  established  by or arising under this  Agreement or
related  to  performance  hereof  shall  be  governed  and  determined  by  this
Agreement.


                                   ARTICLE 15
                            LIMITATIONS OF LIABILITY

15.1 Amount and Time. Contractor's total liability to Owner on all claims of any
kind (excluding  death or bodily injury),  whether based on contract,  indemnity
(Subject  to  Section  15.2),  warranty,  tort  (including  negligence),  strict
liability  or  otherwise,  for all losses or damages  arising out of,  connected
with,  or  resulting  from  this  Agreement  or from the  performance  or breach
thereof,  or from any services  covered by or furnished  during the Term of this
Agreement  shall not exceed One Million Three Hundred  Twenty  Thousand  Dollars
($1,320,000) for the first Contract Year, and Six Hundred Sixty Thousand Dollars
($660,000)  during the remaining  Contract Years of the Term of this  Agreement.
Contractor's  total  liability  is further  limited to Two Million  Five Hundred
Thousand Dollars  ($2,500,000)  during the Term (including the extension of Term
if applicable)  of this  Agreement.  All of  Contractor's  liability  under this
Agreement  shall cease not later than one (1) year after  expiration  or earlier
termination, of this Agreement.

                                       33

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

15.2 Amount and Time  Limitations.  The limitations of Section 15.1 as to amount
and time shall  have no  application  to the extent  Owner  seeks  indemnity  or
contribution  from Contractor with respect to claims arising under Article 14 of
this Agreement.


15.3 Categories of Liability. In no event, whether based on contract, indemnity,
warranty,  tort (including  negligence),  strict  liability or otherwise,  shall
Contractor  or  its   subcontractors   and  suppliers  be  liable  for  special,
incidental,  exemplary,  indirect or consequential  damages  including,  but not
limited  to,  loss of profits or revenue,  loss of use of the  equipment  or any
associated  equipment,  cost of capital,  costs in excess of estimates,  cost of
purchased power, cost of substitute equipment,  facilities or services, downtime
costs,  or claims of customers  and/or  lenders of Owner for such  damages,  and
Owner shall indemnify  Contractor,  its subcontractors and suppliers against any
such claims from Owner's customers and lenders.


15.4 Latent Defects. In no event shall Contractor be liable under this Agreement
for any loss or damage  whatsoever  arising from its failure to discover  latent
defects  or  defects  inherent  in the design or  construction  of the  Combined
Facility or the Combined Facility equipment.  If Contractor furnishes Owner with
advice  or  assistance  not  required  by  this  Agreement,   without   separate
compensation therefore,  Contractor will not be subject to any liability whether
in contract, indemnity, warranty, tort (including negligence) or otherwise.



                                   ARTICLE 16
                                    INSURANCE

16.1     Owner's Coverage

     16.1.1 Owner shall  provide and maintain in force the  following  insurance
coverage commencing on the date the Contractor shall have employees on the site:

          i) "All Risks" Property Insurance, including physical damage.

          ii) Boiler and Machinery,  including  physical damage.  This insurance
shall not contain  exclusion  for  Contractor  error in the  performance  of its
services  hereunder.

          iii)  Commercial  General  Liability  insurance  covering  third-party
claims for  personal  injury,  including  bodily  injury or death,  and property
damage with a $1,000,000 minimum limit per occurrence for combined bodily injury
and property damage and a $2,000,000 minimum annual aggregate limit. This policy
shall provide for a severability of interests, cross liability clause or similar
clause.

          iv) Umbrella  liability  insurance on an occurrence basis in an amount
resulting  in total  coverage  when  combined  with primary  layers  required by
16.1.1(iii)  of no

                                       34

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

less than $10,000,000 per occurrence, covering claims in excess of and following
the terms of the underlying insurance as set forth in 16.1.1(iii)

          v) Pollution Legal Liability  insurance  (including gradual and sudden
and  accidental  pollution for coverage that include first party clean up, third
party  bodily  injury and  property  damage  both on and off site and  including
contractual  liability) including Contractor and the Direct Labor Subcontractors
as named insured with relation to the performance of Contractor's services under
this  Agreement for a limit of at least  $5,000,000  per  occurrence  and in the
aggregate.

          vi) Comprehensive Automobile Liability insurance,  covering claims for
personal  injury,  including  bodily injury and death or property damage arising
out of the use of all owned (if any), leased (if any), non-owned and hired motor
vehicles  including  loading and unloading  with a $1,000,000  minimum limit per
occurrence for combined bodily injury and property damage.

          vii) Workers Compensation  insurance with policy limits as required by
state laws including, without limitation, Employer's Liability insurance for all
employees of the Owner with a minimum limit of $10,000,000 per  occurrence.  The
policies  shall  include  an  all  states  endorsement  and  longshoreman's  and
harborworker's   Compensation  Act  insurance.  Owner  shall  require  that  its
subcontractors provide worker's compensation insurance for their employees.

     16.1.2 The following shall also apply:

          i)  Commencing  with the  date on  which  the  Contractor  shall  have
employees on the site.  Owner shall  provide  Contractor  with  certificates  of
insurance  showing  policy  coverage  and  limits  for all  policies  in 16.1.1.
Contractor  shall be listed as an  additional  insured as  respects  actions and
operations of Owner under this Agreement on the insurance  policies described in
Article 16.1.1(iii) and (iv) above.  Contractor shall be listed as an additional
insured as respects actions and operations under this Agreement on the insurance
policies  described in Article  16.1.1(i)  and (ii) above.  Owner shall  provide
Contractor  with  certificates  of  insurance  for 16.1.1.  (v)  showing  policy
coverage and limits and showing  Contractor  and Direct Labor  Subcontractor  as
named insured. Owner shall provide Contractor with a copy of the Pollution Legal
Liability  insurance  policy to  Contractor  when such  policies are  reasonably
available.


     ii) To the extent of  Contractor's  fault or gross  negligence,  Contractor
shall  pay the  lessor  of  deductibles  in  16.1.1  (i) and (ii) per  16.1.4 or
Contractor's  limit of liability  per Article 13,. In no event shall  Contractor
pay  any  deductibles  or for any  waiting  periods  with  respect  to  Business
Interruption or extra expense.

                                       35

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

          iii)  Owner's  All Risk  Property  Damage  and  Boiler  and  Machinery
policies  shall contain a provision  that such policies are primary with respect
to any other insurance maintained by Contractor.

          iv) Owner and  Owner's  insurers  shall not  terminate  or  materially
modify the insurance coverage required of Owner by Section 16.1.1 without giving
thirty  (30) days  prior  written  notice to  Contractor,  except on  grounds of
non-payment of premiums for which Owner's insurers may terminate the coverage on
ten (10) days notice, and the policies shall provide for such written notice.

          (v) Owner shall file with its insurer(s) and diligently  pursue claims
arising from loss of or damage to property or equipment, including the Facility,
whatever  the cause of such  loss or  damage,  including  the  alleged  fault or
negligence of Contractor.

          (vi) The Owner's  insurance  carriers  waive their  rights of recourse
and/or  subrogation  against the Contractor,  Subcontractors and their employees
for any loss or damage paid for by the insurance listed in this section.  To the
extent  of  Contractor's  fault  or  gross  negligence,   Contractor  shall  pay
deductibles up to one hundred thousand  dollars  ($100,000) per occurrence up to
three hundred  thousand  dollars  ($300,000)  per year for coverage  afforded to
Contractor   under  the  Owner's   policies;   otherwise  Owner  shall  pay  all
deductibles.  The Owner agrees to require that  Owner's  Administrative  Agent's
(Owner)  insurance  carrier to waive their right of recourse and/or  subrogation
against  the  Contractor,  Subcontractors  and their  employees  for any loss or
damage paid for by the insurance listed in this Article 16.


16.2     Contractor's Coverage

    16.2.1  Contractor shall maintain the following insurance coverage:

          i) Workers  Compensation  insurance  with policy limits as required by
state laws including, without limitation, Employer's Liability insurance for all
employees of the Contractor  with a minimum limit of $10,000,000 per occurrence.
The policies  shall include an all states  endorsement  and  longshoreman's  and
harborworker's  compensation  act insurance.  Contractor  shall require that its
subcontractors provide workers compensation insurance for their employees.

          ii) Commercial General Liability insurance covering third party claims
for personal  injury,  including  bodily  injury or death,  and property  damage
arising  from  the  performance  of  Contractor's  services  hereunder,  with  a
$1,000,000  minimum limit per occurrence for combined bodily injury and property
damage and a $2,000,000 minimum aggregate limit. This policy shall provide for a
severability of interests, cross liability clause or similar clause.

                                       36
Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

          iii) Umbrella liability  insurance on an occurrence basis in an amount
resulting in total coverage when combined with primary layers required by 16.1.1
(iii) of no less than  $10,000,000 per occurrence,  covering claims in excess of
and  following  the terms of the  underlying  insurance  as set forth in 1.6.1.1
(iii).

          iv) Comprehensive  Automobile  Liability insurance covering claims for
personal  injury,  including  bodily injury and death or property damage arising
out of the use or operation by  Contractor of all owned,  leased,  non-owned and
hired  motor  vehicles  utilized in the  performance  of  Contractor's  services
hereunder  including loading and unloading with a $10,000,000  minimum limit per
occurrence for combined bodily injury and property damage.

          v) If the  performance  of  Contractor's  duties  requires  the use by
Contractor of any aircraft that is owned, leased or chartered by the Contractor,
Aircraft Liability insurance with a $25,000,000 minimum limit per occurrence for
property damage and bodily injury, including passengers and crew.

     16.2.2 The following shall also apply:

          i)  Contractor  shall  provide  Owner with  certificates  of insurance
showing  policy  coverage,  limits,  and all coverage  requirements  for section
16.2.1.

          ii) Owner and secured parties under Owner's Financing  Agreement,  and
their respective partners, officers, employees and agents as Additional Insureds
for insurance provided under 16.2.1 (iv) and (v).


          iii)  Contractor  shall  pay all  deductibles  on  insurance  policies
required by 16.2.1 iv) Contractor  shall not terminate or materially  change the
insurance  coverage  required under Article 16.2 without giving thirty (30) days
prior written  notice to Owner,  and the policies shall provide for such written
notice.

          v) Contractor  and  Contractor's  insurers waive the right of recourse
against  Owner and secured  parties  under  Owner's  loan  agreement,  and their
respective partners,  officers, employees and agents for any loss or damage paid
for by  Insurance  required  of and  carried by  Contractor  pursuant to Section
16.2.1

16.3 All insurers must be rated A minus (A-) or better, and be assigned Class IX
or better as measured by A.M. Best Company. All Subcontractors' insurers must be
rated  in  accordance  with  Good  Industry  Practices.  It is  agreed  that the
Contractor  may,  at its  option,  elect to use  Electric  Insurance  Company to
provide  Worker's  Compensation   insurance  or  Business  Automobile  Liability
insurance as specified in Article 16.2.1 (i), and (iv), respectively.

                                       37
Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>


                                   ARTICLE 17
                                   ASSIGNMENT

     Neither Party hereunder  shall assign its duties,  rights or obligations in
whole or in part  without  the prior  written  consent of the other  Party.  Any
attempted   assignment  by  operation  of  law  or  otherwise   shall  be  void.
Notwithstanding  the  foregoing,  Owner may assign its interest  hereunder to an
institutional  lender  to  secure  repayment  of  the  funds  utilized  for  the
acquisition,   construction,  or  Operation  and  maintenance  of  the  Combined
Facility,  and Contractor  shall have the right to transfer by way of assignment
or novation to any affiliated company all rights in and responsibilities of this
Agreement.  Guarantee will continue to govern  successor.  Consent  (Exhibit XI)
will continue to govern successor.


                                   ARTICLE 18
                         COMPLIANCE WITH LAWS AND CODES

18.1 Contractor  Obligations.  In the performance of this Agreement,  Contractor
shall  comply  with  all  applicable  federal,  state  and  local  laws,  rules,
regulations,  and ordinances including, but not limited to those administered by
the Environmental  Protection Agency, State Worker's Compensation Board, and the
Occupational  Safety  and  Health  Administration,  and  laws  related  to Equal
Employment Opportunity. All personnel provided by Contractor to perform services
under this Agreement shall be properly  licensed under applicable law to perform
their Job duties.

18.2 Owner  Authorizations.  Owner represents that it shall obtain all necessary
permits, licenses, and certifications, including Continuous Emissions Monitoring
System  certification,  required to lawfully operate the Combined Facility at or
prior to the time required.  Owner will indemnify Contractor from any penalties,
fines,  and related costs  incurred by Contractor  caused by Owner's  failure to
obtain and retain  such  permits,  licenses,  and  certifications.  Owner  shall
provide  Contractor with Owner's  Requirements  which shall contain the specific
requirements of said permits,  licenses, and certifications as they apply to the
services provided by Contractor under this Agreement.

18.3  Cooperation.  Owner shall provide to Contractor a timely basis information
available  to  Owner on  changes  to  local,  state  and  federal  laws,  rules,
ordinances and  regulations  pertaining to the Operation and  maintenance of the
Combined  Facility.  If  any  laws,  rules,  regulations,   ordinances,   codes,
specifications  or  standards  or  official   interpretations  become  effective
subsequent to the effective date of this Agreement they will be  incorporated as
Extra Work.

                                       38

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>


                                   ARTICLE 19
                               DISPUTES PROCEDURE

19.1 Meeting.  Any controversy,  dispute or claim between  Contractor and Owner,
which cannot be resolved  informally,  shall  initially be referred to a meeting
between Contractor's  Facility Manager and Owner's  Representative.  The meeting
shall be held  within  fourteen  (14) Days  following  the  receipt of a written
request for such a meeting by one of the Parties.

19.2 Management  Meeting.  If the matter is not resolved at the meeting referred
to in 19.1 above,  either Party may, within five (5) Days after the date of such
meeting,  present the matter to the  management of  Contractor  and Owner's Vice
President-Operations  for resolution.  To this end,  Contractor  agrees that the
Manager of Contractor's O&M Services section, or a representative  thereof fully
authorized to resolve the dispute, shall meet with the Vice President-Operations
of Owner within twenty (20) Days following presentation of the matter to them.

19.3 General Rights Preserved.  If the matter is not resolved within fifty three
(53) Days after the date of written request  specified in Section 19.1 or within
fourteen (14) Days after the meeting held pursuant to the  provisions of Section
19.2 above,  either Party is then free to pursue  whatever legal remedies it may
have.


                                   ARTICLE 20
                                  MISCELLANEOUS

20.1 Rights  Between  Owner and Host.  No provision of this  Agreement  shall be
deemed to modify any rights and obligations between Owner and Host arising under
any Host Agreement.

20.2  Environmental  Changes.  If changes to the  Combined  Facility  or Owner's
Requirements  occur,  for whatever  reason,  that have a material  effect on the
health,  safety or  environmental  risk of Contractor,  this Agreement  shall be
amended  to  redress  the  material  effect to the  reasonable  satisfaction  of
Contractor.

20.3 Facility Site Regulations. All pertinent regulations and rules which may be
in effect at the Facility Site regarding employment,  passes, badges,  personnel
safety,  environmental  risk to  personal  property,  and proper  conduct on the
property shall be observed by Owner's and Contractor's employees, and Contractor
shall enforce such regulations and rules on its Subcontractors.

20.4 Personnel. Contractor shall, if requested to do so by Owner in the exercise
of Owner's reasonable judgment and discretion,  undertake a process,  consistent
with its personnel  procedures,  to review the performance of, and discipline or
discharge, if appropriate, any incompetent,  negligent,  dishonest or disruptive
personnel.

                                       39

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

20.5  Independent  Contractor.  Contractor  shall  at  all  time  be  deemed  an
independent  contractor  and  none  of its  employees  or the  employees  of its
subcontractors shall be considered employees of Owner.

20.6  Reasonable  Access.   Contractor  and  Owner  and  their  representatives,
including  lenders  independent  consultant shall each be afforded access to the
Facility Site in accordance with Facility Site  procedures,  but nothing in this
Agreement or in any  agreement  referenced  to or  incorporated  herein shall be
construed to require Contractor, or allow Owner, to disclose material designated
confidential by Contractor to a third party independent consultant,  unless such
third party  Independent  consultant  has executed a  confidentiality  agreement
reasonably acceptable to Contractor.

20.7  Confidentiality,   Any  documents,  information,   suggestions,  or  ideas
transmitted by Owner to Contractor,  or Contractor to Owner, in conjunction with
performance of the Work Scope of the Agreement, are not to be regarded as secret
or submitted in confidence,  except as may be otherwise identified in writing by
Owner and Contractor. With respect to information so identified by label, stamp,
or written communication as confidential,  the Party receiving such confidential
information, as the case may be, shall:

     (1) treat such information as confidential,  and use reasonable care not to
divulge such information to any third party, such care to be commensurate  with,
in the case of the Owner,  the care exercised by the Owner for protection of its
confidential information and in the case of Contractor, the care exercised by GE
Contractual Services for protection of its confidential information;

     (2)  restrict  the  use of  such  information  to  matters  related  to the
performance of this Agreement; and

     (3)  restrict  access to such  information  to  personnel  who require such
information for the performance of this Agreement.

     The restrictions set forth above do not apply to information which:

          (a) is, or becomes publicly known other than through a wrongful act of
a Party hereto;

          (b)  becomes  rightfully  known  by a  party  without  confidentiality
restrictions from a source other than a Party to this Agreement;

          (c) is in possession of a Party prior to receipt from the other Party,
or is  independently  developed by a Party,  provided that the person or persons
developing same have not had access to such  confidential  information  received
from the other Party hereto;

                                       40

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

          (d)  must be  disclosed  by  requirements  of law or  valid  legal  or
regulatory  process,  in which case the Party  intending to make such disclosure
shall notify the Party which  designated the material as confidential in advance
of any such  disclosure,  and reasonably  cooperate with any attempt to maintain
the confidentiality of such materials; or

          (e) is  approved  for  disclosure,  in  writing,  by the Party,  which
identified the information as confidential.

As to any individual item of confidential information,  the obligation set forth
in this Section 20.7 shall expire upon  termination of this Agreement,  or three
years from the date of first disclosure of such  information,  whichever date is
the later.


20.8 Emergencies.  In the event of any emergency involving the Combined Facility
endangering  life or  property,  Contractor  shall  take  such  action as may be
reasonable and necessary to prevent,  avoid, or mitigate injury, damage, or loss
and  shall,  as  soon as  practicable,  report  any  such  incidents,  including
Contractor's  response thereto,  to Owner.  Subject to Owner's rights under this
Agreement,  Owner shall reimburse Contractor for all expenditures made to comply
with this Section 20.8.  Whenever,  in the opinion of Owner,  Contractor has not
taken  sufficient  precautions for the safety of the public or the protection of
the  Combined  Facility  or of  structures  or  property  on or  adjacent to the
Facility Site, creating in the opinion of Owner an emergency requiring immediate
action, the Owner may then direct Contractor,  at Contractor's option, to either
(i) take additional corrective action, or (ii) Suspend work.


20.9 Records.  Contractor shall maintain all records  pertaining to the Combined
Facility  consistent  with  Owner's  Requirements  and retain such records for a
minimum period of three (3) years. In the event Owner requires  retention of any
records beyond three years,  Owner shall timely notify Contractor and Contractor
shall, at its option, either retain the records or deliver the records to Owner.
Contractor  shall give Owner 30 days prior written  notice  before  disposing of
maintained  records  of the  Facility.  At the  conclusion  of  this  Agreement,
Contractor shall deliver,  and Owner shall have the right to continue to use any
and all confidential information,  including project records,  (Contractor shall
reasonably cooperate with Owner in transferring the Facility database to Owner's
information  system),  regularly  maintained at the Facility Site and reasonably
necessary to the continued  Operation of the Combined  Facility,  provided Owner
and others with whom the information  may need to be shared to support  Facility
Operations agree with Contractor in writing to maintain the  confidentiality  of
such  information.  Furthermore,  Owner shall have the right to employ any other
person,  firm, or corporation  to perform the services by whatever  method Owner
may deem expedient.  Notwithstanding the foregoing,  the following materials are
excluded  and  need  not be  provided:  software  developed  by or  licensed  to
Contractor,  personnel records,  Contractor's financial records, medical records
and proprietary  drawings and design information  furnished for Contractor's use
by any other section of the General Electric Company.

                                       41

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>


20.10 Severability.  The invalidity, in whole or in part, of any of the Sections
or Articles of this  Agreement  will not affect the validity of the remainder of
such Sections or Articles.


20.11 Entire  Agreement.  This Agreement and all amendments  thereto contain the
complete  agreement  between  Owner and  Contractor  with respect to the matters
contained  herein and upon this  Agreement  taking effect  supersedes  all other
agreements,  whether  written or oral,  and  including the O&M  Agreement,  with
respect to the matters contained herein.


20.12 Amendment. No modifications, amendment, or other change will be binding on
any Party unless consented to in writing by Owner's and Contractor's  authorized
representatives.


20.13 Non-recourse Obligation of Partnership. Contractor acknowledges and agrees
that (a) Owner is a Delaware Limited  Partnership;  (b) Contractor shall have no
recourse  against the individual  assets of any Partner in Owner with respect to
claims under or in connection  with  enforcement  of this Agreement and its sole
recourse on such claims shall be against the partnership assets, irrespective of
any failure to comply with any provisions of this Agreement;  (c) no claim shall
be  made  against  any  Partner  by  Contractor  under  or  in  connection  with
enforcement  of this  Agreement,  except that  Partners may be joined as nominal
Parties  for  the  purpose  of  enforcing  Contractor's  rights  hereunder;  (d)
Contractor  shall  have no right of  subrogation  to any  claim of Owner for any
capital  contributions from any Partner to Owner; and (e) this representation is
made  expressly  for the benefit of the Partners of Owner.  Notwithstanding  the
foregoing,  Contractor  shall  have the right to  enforce  Section  20.7 of this
Agreement  against  individual  Partners of Owner,  and to obtain  equitable  or
injunctive relief against the Partners.


20.14 Third-Party Beneficiaries. This Agreement is intended to be solely for the
benefit of Owner and Contractor and their  successors and permitted  assigns and
is not  intended  to and shall not confer any  rights or  benefits  on any third
party not a signatory hereto.


20.15  Interpretation.   This  Agreement  shall  be  interpreted  and  construed
according to the laws of the State of New York, as applied to contracts made and
to be performed wholly within such state.

                                       42
Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

20.16 Notice. All notices required or provided for in this Agreement shall be in
writing and shall be delivered by hand or sent by registered or certified  mail,
return receipt requested, as follows:

If to Contractor: GE International Inc.
                  GE Contractual Services
                  4200 Wildwood Parkway, 2nd Floor
                  Atlanta, Georgia 30339
                  Attention:  Northeast Operations Manager, James Kaveney

with a copy to Contractor's senior representative at the Facility Site

If to Owner:    Selkirk Cogen Partners, L.P.
                7500 Old Georgetown Rd.
                Bethesda, MD 20814-6161
                Attention: Vice-President PG&E National Energy Group-Northeast

with a copy to Owner's senior representative at the Facility Site.

     Such  notices  shall  be  deemed  to have  been  received  upon the date of
delivery shown upon the return receipt of such item by the Post Office,  or upon
the date of mailing in the event delivery is refused.


20.17  Waiver.  Failure by either Party to exercise any of its rights under this
Agreement  shall not constitute a waiver of such rights.  Neither Party shall be
deemed to have  waived any right  resulting  from any  failure to perform by the
other unless it has made such waiver specifically in writing.

20.18 Counterparts.  This Amendment may be executed in one or more counterparts,
each of which shall be deemed an  original  and all of which shall be deemed one
and the same instrument.

20.19 Changes to Owner's  Requirements.  Contractor  agrees that nothing in this
Agreement is intended to limit  Owner's  rights and  abilities to make  changes,
modifications or amendments to the Host Agreements,  Power Sale Agreement,  Fuel
Agreements,  Construction  Agreement,  Financing Agreement, or any other Owner's
Requirements, but all such changes, modifications or amendments shall be subject
to applicable  provisions of this  Agreement.  Upon any change,  modification or
amendment  to the Host  Agreements,  Power Sales  Agreements,  Fuel  Agreements,
Construction Agreement, Financing Agreement or Owner's Requirements, Owner shall
promptly notify Contractor; and if such change, modification, or amendment has a
material  adverse  effect upon the risks or  operations of the

                                       43
Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00
<PAGE>

Contractor,  the Parties  shall  amend this  Agreement  to redress the  material
adverse effect to the reasonable satisfaction of Contractor.

20.20 Prior Environmental Contamination. Contractor shall have no liability for,
and Owner shall  indemnify and hold harmless  Contractor  from and against,  all
claims,  assessments,  expenses,  fines,  penalties and  liabilities  whatsoever
arising from any surface, soil, ground water or other contamination on or around
the Combined  Facility or Facility Site existing  prior to November 1, 1992. For
purposes of this Section  20.20,  "contamination"  shall mean the  presence,  in
amounts or  combinations  in excess of  applicable  levels  established  by law,
ordinance, rule or regulation, of any toxic or hazardous substance(s),  waste(s)
or material(s) as the same are defined in any current or future  federal,  state
or local law, ordinance, rule or regulation.


     IN WITNESS WHEREOF, the Parties have executed this Agreement, in duplicate,
this 18th day of July, 2000.


SELKIRK COGEN PARTNERS, L.P.,               GE INTERNATIONAL INC.
By JMC Selkirk, Inc., its Managing
General Partner

By: /s/ ERNEST K. HAUSER                    By: /s/ MICHAEL KALMES
Ernest K. Hauser                            Michael Kalmes
Vice-President                              General Manager
PG&E National Energy Group - Northeast      GE Contractual Services




                                       44

Second Amended and Restated Selkirk O&M Services Agreement
CONFIDENTIAL
EXECUTION COPY  6/29/00