| WM.      SCHEMPP, PRESIDENTGEO.      SCHUSTER, VICE PRESIDENTPAUL      NEIHART, SECRETARYERIC      D. PETERSON, ASSISTANT SECRETARYD.      T. MARTIN, COMMISSIONERE.      B. GIBBONS, MANAGERR.      R. RIES, SUPERVISOR OF PRODUCTIONE.      L. DOUGLASS, AUDITOR | EPHRATA,      WASHINGTON | P.O.      BOX 878PHONE:      SK 4-3541 |
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| (i) | "Debt      Service" shall mean with respect to any period the amount to be paid or      accrued during said period to retire the principal of and pay the interest      and premium, if any, on all Wanapum Hydroelectric Refunding Revenue Bonds,      Series of 1963, issued by the District for the purpose of refunding the      Wanapum Hydro-Electric Revenue Bonds, Series of 1959, heretofore issued      under and pursuant to Resolution No. 474 adopted by the Commission of      the District on June 30, 1959, and on all bonds issued pursuant to      the Bond Resolution in the manner provided in said Bond Resolution and      other evidences of indebtedness issued by the District for the purpose of      paying the Cost of Acquisition and Construction of the Wanapum      Development. |
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| (1) | "Revenue      Bonds" shall mean the Wanapum Hydroelectric Refunding Revenue Bonds,      Series of 1963, issued for the purpose of refunding the Wanapum      Hydro-Electric Revenue Bonds, Series of 1959, and any additional bonds      issued under and in accordance with the terms of the Bond      Resolution. |
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| (o) | "Bond      Resolution" shall mean Resolution No. 1485 of the District adopted by      the Commission of the District on July 30, 1963 authorizing the      issuance and sale of Wanapum Hydroelectric Refunding Bonds, Series of 1963      and providing the terms and conditions thereof, and authorizing the      issuance of additional bonds thereunder for other purposes in connection      with the Wanapum Development, a certified copy of which has been delivered      to the Purchaser. |
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|                                                                                                                                                                                                                                                                                                                                                                                          | Very      truly yours, PUBLIC      UTILITY DISTRICT NO. 2 OFGRANT      COUNTY, WASHINGTON By                     /s/      Wm.      Schempp                                       President |
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| Attest:                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| /s/      Paul      Nichart                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                    Secretary |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| /s/      Paul      Nichart                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | PUGET      SOUND POWER & LIGHT COMPANY By                     /s/ Ralph M.      Davis                                              President |
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| Attest:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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|                        /s/ C. B. Schoeggl                                                                                               Secretary |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |