**APPENDIX      1**

**2007**

**PPL      ELECTRIC UTILITIES CORPORATION**

**PROVIDER      OF LAST RESORT**

**SUPPLY      MASTER AGREEMENT**

**BETWEEN**

**[PPL      ELECTRIC UTILITIES CORPORATION]**

**AND**

**[PPL      ENERGYPLUS, LLC]**

**DATED      [JULY 26, 2007]**

----

**PROVIDER      OF LAST RESORT SUPPLY MASTER AGREEMENT**

**Articles      and Provisions**

**Table      of Contents**

| **ARTICLE                1 DEFINITIONS**                                                      | **4**                                                            |
|-----------------------------------------------------------------------------------------------|------------------------------------------------------------------|
| **ARTICLE                2 TERMS AND CONDITIONS OF FULL REQUIREMENTS                SERVICE** | **13**                                                           |
| 2.1                                                                                           | SELLER'S                OBLIGATION TO PROVIDE SERVICE            | 13 |
| 2.2                                                                                           | BUYER'S                OBLIGATION TO TAKE SERVICE                | 13 |
| 2.3                                                                                           | DISTRIBUTION                SERVICE                              | 14 |
| 2.4                                                                                           | CHANGES                IN PJM CHARGES                            | 14 |
| 2.5                                                                                           | STATUS                OF SELLER                                  | 14 |
| 2.6                                                                                           | SALES                FOR RESALE                                  | 14 |
| 2.7                                                                                           | GOVERNING                TERMS                                   | 14 |
| 2.8                                                                                           | TRANSACTION                CONFIRMATION                          | 14 |
| **ARTICLE                3 SCHEDULING, FORECASTING, AND INFORMATION                SHARING**  | **15**                                                           |
| 3.1                                                                                           | SCHEDULING                                                       | 15 |
| 3.2                                                                                           | LOAD                FORECASTING                                  | 15 |
| 3.3                                                                                           | INFORMATION                SHARING                               | 15 |
| **ARTICLE                4 SPECIAL TERMS AND CONDITIONS**                                     | **15**                                                           |
| 4.1                                                                                           | CONGESTION                AND CONGESTION MANAGEMENT              | 15 |
| 4.2                                                                                           | LOAD                RESPONSE PROGRAMS                            | 16 |
| 4.3                                                                                           | PJM                E-ACCOUNTS                                    | 16 |
| 4.4                                                                                           | ALTERNATIVE                ENERGY PORTFOLIO STANDARDS OBLIGATION | 16 |
| 4.5                                                                                           | TITLE                TRANSFER                                    | 16 |
| 4.6                                                                                           | RELIABILITY                GUIDELINES                            | 17 |
| 4.7                                                                                           | PJM                MEMBERSHIP                                    | 17 |
| 4.8                                                                                           | DECLARATION                OF AUTHORITY                          | 17 |
| 4.9                                                                                           | FERC                AUTHORIZATION                                | 17 |
| 4.10                                                                                          | DISCLOSURE                IN THE EVENT OF SELLER DEFAULT         | 17 |
| 4.11                                                                                          | SELLER                STEP-UP RIGHTS                             | 17 |
| **ARTICLE                5 TERM AND SURVIVAL**                                                | **18**                                                           |
| 5.1                                                                                           | TERM                                                             | 18 |
| 5.2                                                                                           | SURVIVAL                                                         | 18 |
| **ARTICLE                6 DETERMINATION OF DELIVERED QUANTITIES**                            | **18**                                                           |
| 6.1                                                                                           | MONTHLY                SETTLEMENT LOAD                           | 18 |
| **ARTICLE                7 BILLING AND SETTLEMENT**                                           | **18**                                                           |
| 7.1                                                                                           | BILLING                                                          | 18 |
| 7.2                                                                                           | PJM                BILLING                                       | 19 |
| 7.3                                                                                           | PAYMENTS                OF THE INVOICE                           | 19 |
| 7.4                                                                                           | BILLING                DISPUTES AND ADJUSTMENTS OF INVOICES      | 19 |
| 7.5                                                                                           | INTEREST                ON UNPAID BALANCES                       | 20 |
| **ARTICLE                8 TAXES**                                                            | **20**                                                           |
| 8.1                                                                                           | COOPERATION                                                      | 20 |
| 8.2                                                                                           | TAXES                                                            | 20 |
| 8.3                                                                                           | DISCLOSURE                OF TAX TREATMENT                       | 20 |
| **ARTICLE                9 INDEMNIFICATION**                                                  | **21**                                                           |
| 9.1                                                                                           | SELLER'S                INDEMNIFICATION FOR THIRD-PARTY CLAIMS   | 21 |
| 9.2                                                                                           | BUYER'S                INDEMNIFICATION FOR THIRD-PARTY CLAIMS    | 21 |
| 9.3                                                                                           | INDEMNIFICATION                PROCEDURES                        | 21 |
| **ARTICLE                10 LIMITATIONS ON LIABILITY**                                        | **22**                                                           |

| **ARTICLE                11 FORCE MAJEURE**                                                              | **22**                                                       |
|----------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|
| 11.1                                                                                                     | FORCE                MAJEURE                                 | 22 |
| 11.2                                                                                                     | NOTIFICATION                                                 | 23 |
| **ARTICLE                12 EVENTS OF DEFAULT; REMEDIES**                                                | **23**                                                       |
| 12.1                                                                                                     | EVENTS                OF DEFAULT                             | 23 |
| 12.2                                                                                                     | REMEDIES                                                     | 24 |
| 12.3                                                                                                     | CALCULATION                AND NET OUT OF SETTLEMENT AMOUNTS | 25 |
| 12.4                                                                                                     | NOTICE                OF TERMINATION PAYMENT                 | 26 |
| 12.5                                                                                                     | DISPUTES                WITH RESPECT TO TERMINATION PAYMENT  | 26 |
| 12.6                                                                                                     | DUTY                TO MITIGATE                              | 26 |
| **ARTICLE                13 DISPUTE RESOLUTION**                                                         | **26**                                                       |
| 13.1                                                                                                     | INFORMAL                DISPUTE RESOLUTION                   | 26 |
| 13.2                                                                                                     | FORMAL                DISPUTE RESOLUTION                     | 27 |
| **ARTICLE                14 PERFORMANCE ASSURANCE**                                                      | **27**                                                       |
| 14.1                                                                                                     | REQUIREMENT                FOR PERFORMANCE ASSURANCE         | 27 |
| 14.2                                                                                                     | PERFORMANCE                ASSURANCE TRANSFERS/RETURNS       | 27 |
| 14.3                                                                                                     | UNSECURED                CREDIT                              | 28 |
| 14.4                                                                                                     | CREDIT                RATING                                 | 29 |
| 14.5                                                                                                     | TANGIBLE                NET WORTH                            | 29 |
| 14.6                                                                                                     | AGGREGATE                BUYER'S EXPOSURE                    | 29 |
| **ARTICLE                15 REPRESENTATIONS AND WARRANTIES**                                             | **31**                                                       |
| 15.1                                                                                                     | REPRESENTATIONS                AND WARRANTIES                | 31 |
| 15.2                                                                                                     | ADDITIONAL                UNDERSTANDINGS                     | 32 |
| **ARTICLE                16 MISCELLANEOUS**                                                              | **32**                                                       |
| 16.1                                                                                                     | NOTICES                                                      | 32 |
| 16.2                                                                                                     | GENERAL                                                      | 32 |
| 16.3                                                                                                     | RULES                OF INTERPRETATION                       | 32 |
| 16.5                                                                                                     | CONFIDENTIALITY                                              | 33 |
| 16.6                                                                                                     | SUCCESSORS                                                   | 34 |
| 16.7                                                                                                     | ASSIGNMENT/CHANGE                IN CORPORATE IDENTITY       | 34 |
| 16.8                                                                                                     | GOVERNING                LAW                                 | 34 |
| 16.9                                                                                                     | JURISDICTION                AND VENUE                        | 34 |
| 16.10                                                                                                    | AMENDMENTS                                                   | 35 |
| 16.11                                                                                                    | PJM                AGREEMENT MODIFICATIONS                   | 35 |
| 16.12                                                                                                    | DELAY                AND WAIVER                              | 35 |
| 16.13                                                                                                    | REGULATORY                APPROVALS                          | 35 |
| **EXHIBIT                A TRANSACTION CONFIRMATION EXAMPLE**                                            | **37**                                                       |
| **EXHIBIT                B ALTERNATIVE ENERGY PORTFOLIO STANDARDS                OBLIGATION**            | **38**                                                       |
| **EXHIBIT                C PERFORMANCE ASSURANCE EVERGREEN LETTER OF                CREDIT**             | **39**                                                       |
| **EXHIBIT                D SAMPLE PJM INVOICE**                                                          | **42**                                                       |
| **EXHIBIT                E METHODOLOGY FOR CALCULATION OF MARK TO MARKET (MTM)                EXPOSURE** | **44**                                                       |
| **EXHIBIT                F UNCONDITIONAL GUARANTY**                                                      | **47**                                                       |
| **EXHIBIT                G FORM OF NOTICE**                                                              | **54**                                                       |
| **EXHIBIT H                PJM DECLARATION OF AUTHORITY**                                           | **56**                                                       |

----

**PROVIDER      OF LAST RESORT SUPPLY MASTER AGREEMENT**

**WITNESSETH:**

**ARTICLE      1**

**DEFINITIONS**

*The Wall Street Journal      *

**ARTICLE      2**

**TERMS      AND CONDITIONS OF FULL REQUIREMENTS SERVICE**

| 2.1 | Seller's                Obligation To Provide Service. With respect to a Transaction, Seller                shall provide Full Requirements Service on a firm and continuous                basis                such that the Specified Percentage is supplied during the Delivery                Period. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.2 | Buyer's                Obligation to Take Service. With respect to a Transaction, Buyer shall                accept Full Requirements Service as provided by Seller pursuant to                Section                2.1 (Seller's                Obligation                to Provide Service), and shall pay Seller the Monthly Settlement                Amounts                for such Full Requirements Service on the applicable Monthly Settlement                Date in accordance with Section 7.3 (Payments of the                Invoice). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.3 | Network                Integration Transmission Service and Distribution Service. With                respect to a Transaction, Buyer shall be responsible, at its sole                cost and                expense, for the provision of Network Integration Transmission Service                for                PPL Electric customers and distribution service necessary to serve                the                Specified Percentage. Buyer is responsible, at its sole cost and                expense                for future PJM charges assessed to network transmission customers                for                PJM-required transmission system enhancements pursuant to the PJM                Regional                Transmission Expansion Plan and for future PJM charges assessed to                network                transmission customers for transition costs related to the elimination                of                through-and-out transmission rates. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.4 | Other                Changes in PJM Charges. Except as provided in Section 2.3 (Network                Integration Transmission Service and Distribution Service), Seller                bears                the risk of any other changes in PJM products and pricing during                the term                of this Agreement. However, if there are any other new FERC-approved                PJM                transmission charges other than those referred to in Section 2.3                or other                new PJM charges and costs, charged to network transmission customers,                that                Seller believes the Buyer should recover through retail rates because                they                are directly related to the Buyer's obligations, then Buyer will                file with                the PUC, and provide notice to all intervening parties in PUC Docket                No.                P-00062227, a request for approval to recover such new costs. Seller                is                required to intervene in any such proceeding before the PUC. Such                new                costs can only be charged by Seller to Buyer to the extent that the                PUC                approves Buyer's recovery of those costs. Seller agrees to be bound                by the                decision of the PUC (subject to the normal rules for appeal of the                decision of the PUC) and waives all claims concerning this issue                before                FERC. Notwithstanding the foregoing, nothing in the Agreement shall                preclude Seller from taking any position before FERC regarding the                creation and allocation of any such PJM                charges. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.5 | Status                of Seller. Seller, for purposes of this Agreement and any Transaction,                is a Load Serving Entity. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------|

| 2.6 | Sales                for Resale. All Full Requirements Service provided by Seller to Buyer                shall be sales for resale, with Buyer reselling such Full Requirements                Service to POLR Load customers. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.7 | Governing                Terms. Each Transaction shall be governed by this Agreement. This                Agreement, including all exhibits hereto, any designated collateral,                credit support, margin agreement or similar arrangements and all                Transaction Confirmations shall form a single integrated agreement                between                Buyer and Seller. Any inconsistency between terms in this Agreement                and                terms in a Transaction Confirmation shall be resolved in favor of                the                terms of this Agreement. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.8 | Transaction                Confirmation. A Transaction shall be documented in a Transaction                Confirmation in the form attached hereto as Exhibit A. On the Business                Day                on which Seller is selected and approved by the PUC as a provider                of Full                Requirements Service, Buyer will forward by facsimile or other immediate                means acceptable to both Parties, to Seller a partially executed                Transaction Confirmation(s) and shall send by overnight delivery                three (3)                originals. Except as otherwise provided in the RFP, by 2:00 p.m.                EPT on                the next Business Day following Seller's receipt of such facsimile                of                partially executed Transaction Confirmation(s), Seller shall return                by                facsimile, or other immediate means acceptable to both Parties, to                Buyer a                fully executed Transaction Confirmation(s), and shall send by overnight                delivery two (2) originals. In addition, if such Transaction(s) is                the                initial Transaction(s) with the Seller under the current RFP solicitation,                then Buyer will forward by facsimile or other immediate means acceptable                to both Parties, to Seller a fully executed Agreement, and shall                send by                overnight delivery two (2)                originals. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      3**

**SCHEDULING,      FORECASTING, AND INFORMATION SHARING**

| 3.1 | Scheduling.                Seller shall schedule Full Requirements Service pursuant to the PJM                Agreements. Buyer will provide to Seller and PJM all information                required                by PJM, for the purpose of calculating Seller's Full Requirements                Service                obligations. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Load                Forecasting. Buyer shall not be required to provide to the Seller any                load forecasting services for any                Transaction. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.3 | Information                Sharing. On each Business Day, Buyer shall provide to the Seller on a                reasonable efforts basis, Buyer's estimation of the PLC for the seventh                (7th)                following day, representing the Seller's Specified Percentage of                each                Service Type. Buyer does not warrant the accuracy of such                information. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      4**

**SPECIAL      TERMS AND CONDITIONS**

| 4.1 | Congestion                and Congestion Management. Seller is responsible for any congestion                costs incurred to supply the Specified Percentage. Because the PJM                Planning Period does not correspond exactly with the supply term                of this                POLR SMA, Buyer, in its capacity as LSE for POLR Load during the                Year                2009, will ensure that rights to CRRs for the period January 1, 2010,                through May 31, 2010, obtained in conjunction with Buyer's designation                as                LSE for POLR Load will be provided to Seller as described herein.                Buyer                shall transfer or assign to Seller, Buyer's rights to CRRs for the                period                January 1, 2010 through May 31, 2010 to which Buyer is entitled as                an LSE                pursuant to the PJM Agreements, provided that such rights are related                to                the service being provided to the Specified Percentage. All rights                and                obligations associated with such CRRs will accrue to the Seller through                the transfer or assignment from Buyer to Seller including the ability                of                Seller to request or nominate such CRRs when applicable. The Seller                is                responsible for nominating and obtaining CRRs for the period June                1, 2010,                through December 31, 2010. Seller, as a LSE serving POLR Load, shall                have                the right to request and nominate CRRs provided all Transactions                for the                Seller's Specified Percentage of POLR Load have been executed and                are in                full force and effect. Effective January 1, 2011 all CRR rights will                transfer back to the Buyer. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2 | Load                Response Programs. Buyer will manage its load response programs in                accordance with the provisions of its applicable riders and retail                electric service tariffs, as amended and approved by the PUC from                time to                time or distribution utility customer contracts, as amended by the                distribution utility from time to time. Unless specifically prohibited                by                its retail electric service tariffs, POLR Service customers may,                at their                election, participate in demand response programs offered under the                PJM                OATT. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.3 | PJM                E-Accounts. Buyer and Seller shall work with PJM to establish any PJM                E-Accounts necessary for Seller to provide Full Requirements Service.                In a                timely manner, Buyer shall establish PJM E-Account contract(s) for                the                entire duration of the Transaction(s) and Seller shall confirm the                PJM                E-Account contract(s) for the entire duration of the                Transaction(s). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.4 | Alternative                Energy Portfolio Standards                Obligation. |
|-----|----------------------------------------------------------------------------------|

| (a)   | Seller                shall enable the Buyer to comply with the Alternative Energy Portfolio                Standards, including regulations adopted thereunder, (together the                AEPS                Obligation) and shall provide its proportional share of the Buyer's                AEPS                Obligation as set forth in the AEPS Act and PUC rules and Orders                that may                be promulgated to implement the AEPS                Act. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Seller                and Buyer shall work together to establish the proper accounts within                the                GATS. Seller shall be a subscriber to GATS and is responsible for                paying                its annual subscription fee. Seller shall transfer certificates into                the                Buyer's account(s) in the amount necessary to fulfill Seller's AEPS                Obligation under this Agreement. Seller shall be responsible for                paying                the volumetric fees associated with LSE GATS fee requirements in                proportion to Seller's Full Requirements                Service. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Seller                shall provide to the Buyer all information regarding its share of                the AEPS                Obligation that may be required by the PUC rules governing reporting                and                auditing of Buyer's compliance with the AEPS                Obligation. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.5 | Title                Transfer. Seller shall cease to have title to, possession of, and risk                of loss with respect to liability pursuant to Sections 9.1 (Seller's                Indemnification for Third-Party Claims) and 9.2 (Buyer's Indemnification                for Third-Party Claims) of Full Requirements Service scheduled and                received or delivered hereunder at the Delivery Point(s). Seller                warrants                that it has good title to the Full Requirements Service sold and                delivered                hereunder and that it has the right to sell such Full Requirements                Service. The word "loss" in this Section 4.5 (Title Transfer) does                not                encompass electrical transmission and distribution losses. As between                Buyer and Seller only, Buyer shall take title to, possession of,                and risk                of loss with respect to liability pursuant to Sections 9.1 (Seller's                Indemnification for Third-Party Claims) and 9.2 (Buyer's Indemnification                for Third-Party Claims) of Full Requirements Service scheduled and                received or delivered hereunder at the Delivery Point(s). Notwithstanding                the foregoing, nothing contained in this Agreement is intended to                create                or increase liability of Buyer to any third party beyond such liability,                if any, that would otherwise exist under the PJM Agreements or under                applicable law if Buyer had not taken                title. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.6 | Reliability                Guidelines. Each Party agrees to adhere to the applicable operating                policies, criteria and/or guidelines of the NERC, PJM, their successors,                and any regional or sub regional                requirements. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.7 | PJM                Membership. For the period of time that this Agreement is in effect,                Seller shall be:  a member in good standing of PJM; (ii)                qualified as a PJM "Market Buyer" and "Market Seller" pursuant to                the PJM                Agreements; and (iii) qualified as a PJM "Load Serving Entity." For                the                period of time that this Agreement is in effect, Buyer shall be a                member                in good standing of PJM. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.8 | Declaration                of Authority. For the period of time that this Agreement is in effect,                both Buyer and Seller shall have executed the Declaration of Authority                in                the form attached hereto as Exhibit                H. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.9 | FERC                Authorization. For the period of time that this Agreement is in                effect, Seller shall have FERC authorization to make sales of energy,                capacity, and ancillary services at market based rates within PJM.                (Appendix 5 in RFP Process and Rules                Document) |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.10 | Disclosure                in the Event of Seller Default. If Seller defaults and this Agreement                is terminated pursuant to Article 12 (Events of Default; Remedies),                Buyer                may disclose the terms of this Agreement and any Transaction Confirmation                to all other non-defaulting wholesale suppliers providing service                to Buyer                pursuant to the PUC Orders and Settlements. Such disclosure by Buyer                shall                be made for the purpose of allowing each non-defaulting wholesale                supplier                to make its Step-Up elections described in Section 4.11 (Seller Step-Up                Rights) below. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.11 | Seller                Step-Up Rights. In the event of an early termination of a POLR SMA and                associated transactions between Buyer and an entity other than Seller,                Buyer shall send a written notification to Seller which: (i) describes                the                individual supply obligations associated with the terminated                transaction(s) for the remaining term(s) of such transaction(s),                including                all available information regarding the associated CRRs; and (ii)                requests                Seller to agree to supply its full or partial pro-rata share of the                supply                obligation associated with each terminated transaction for the remaining                term(s) of the terminated transaction(s), without change to the pricing,                terms and conditions of the terminated full requirements service                agreement                and transaction(s). Such agreement to make additional supply available                shall be termed a "Step-Up". |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      5**

**TERM      AND SURVIVAL**

| 5.1 | Term.                Unless otherwise agreed upon by Buyer and Seller, this Agreement                shall                continue in full force and effect from the Effective Date until the                end of                all Transaction(s) executed under this Agreement unless this Agreement                is                terminated prematurely pursuant to Article 12 of this                Agreement. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.2 | Survival.                All provisions of this Agreement which must, in order to give full                force                and effect to the rights and obligations of the Parties hereto, survive                termination or expiration of this Agreement, shall so survive, including,                without limitation, Articles 9, 10, 12, and                13. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      6**

**DETERMINATION      OF DELIVERED QUANTITIES**

| 6.1 | Monthly                Settlement Load. The amount of Monthly Settlement Load with respect to                any calendar month during the Delivery Period shall be determined                in terms                of megawatt-hours ("MWh") of Energy. The MWh of Energy shall be equivalent                to the amount of Energy reported as the Seller's Specified Percentage                obligation by Buyer to PJM, and shall include seller's share of 500KV                losses as determined by PJM. The MWh of Energy shall also be adjusted                for                any subsequent meter corrections reported to PJM, or as a result                of any                subsequent retail load settlement process. The MWh of Energy as reported                includes any reduction in load as a result of the Buyer's and PJM's                operation of its load response                programs. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      7**

**BILLING      AND SETTLEMENT**

| 7.1 | Billing.                Unless otherwise agreed to by the Parties, on or before the sixth                (6th) Business Day of each month, Buyer shall deliver to                Seller, via electronic transmission or other means agreed to by the                Parties, an invoice ("Invoice") that sets forth the total amount                due for                the previous calendar month for all Transactions. The Invoice shall                detail                for each Transaction the following: |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Monthly Settlement Load |
|-----------------|-------------------------|

| (b)   | Monthly Settlement Price |
|-----------------|--------------------------|
| (c)   | Monthly Settlement Amount |
|-----------------|---------------------------|
| (d)   | PJM billing adjustments |
|-----------------|-------------------------|
| (e)   | Any other adjustments set forth in this              Agreement |
|-----------------|----------------------------------------------------------------|

| 7.2 | PJM                Billing. |
|-----|-----------------------------|

| (a)   | Buyer                and Seller shall direct PJM to invoice Seller and Buyer for charges                and                credits relating to Seller's and Buyer's rights and obligations under                this                Agreement as set forth in Exhibit D attached hereto and made a part                hereof. If PJM is unable to invoice charges or credits in accordance                with                Exhibit D, Buyer shall rectify such PJM invoice discrepancy in the                Invoice                sent pursuant to Section 7.1                (Billing). |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | The                Parties agree that the PJM bill may change from time to time. Allocation                of any charges that are reflected in a PJM bill that are not included                on                or are inconsistent with Exhibit D will be determined pursuant to                Sections                2.3 (Network Integration Transmission Service and Distribution Service),                2.4 (Other Changes in PJM Charges), and 16.11 (PJM Agreement                Modifications) of this Agreement. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.3 | Payments                of the Invoice. On the Monthly Settlement Date, Buyer will pay to                Seller, or Seller will pay to the Buyer, as the case may be, the                total                amount due in the applicable Invoice. All payments shall be made                by                "Electronic Funds Transfer" ("EFT") via "Automated Clearing House"                ("ACH"), to a bank designated in writing by such Party, by 12:00                p.m. EPT                on the Monthly Settlement Date. Payment of Invoices shall not relieve                the                paying Party from any other responsibilities or obligations it has                under                this Agreement (other than the obligation to make such payment),                nor shall                such payment constitute a waiver of any claims arising                hereunder. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Within                twelve (12) months of the date on which an Invoice is issued, Buyer                may,                in good faith, adjust the Invoice to correct any errors. The adjustment                shall include interest calculated at the Interest Rate from the original                due date to the date of payment. Buyer shall provide Seller a written                explanation of the basis for the                adjustment. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Within                twelve (12) months of the date on which an Invoice is issued or an                Invoice                is adjusted pursuant to Section 7.4(a) (Billing Disputes and Adjustment                of                Invoices), Seller may, in good faith, dispute the correctness of                such                Invoice or adjustment, pursuant to the provisions of Article 13 (Dispute                Resolution), and provided that Seller has paid by the Monthly Settlement                Date any portion of an Invoice that is not                disputed. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Within                twelve (12) months of the date on which a PJM bill is issued, Buyer                or                Seller may, in good faith, dispute the correctness of any such PJM                bill,                pursuant to the provisions of Article 13 (Dispute Resolution), and                provided that the disputing Party has paid by the Monthly Settlement                Date                any portion of an Invoice that is not                disputed. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.5 | Interest                on Unpaid Balances. Interest on delinquent amounts, other than amounts                in dispute as described in Section 7.4 (Billing Disputes and Adjustment                of                Invoices), shall be calculated at the Interest Rate from the original                due                date to the date of payment. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.6 | Netting                of Payments. Buyer and Seller shall discharge mutual debts and payment                obligations due and owing to each other under this Agreement, as                of the                Monthly Settlement Date, such that all amounts owed by each Party                to the                other Party shall be reflected in a single amount due to be paid                by the                Party who owes it and received by the other Party, provided that                the                calculation of the net amount shall not include any disputed amounts                being                withheld pursuant to Section 7.4 (Billing Disputes and Adjustment                of                invoices). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      8**

**TAXES**

| 8.1 | Cooperation.                Each Party shall use reasonable efforts to implement the provisions                of and                administer this Agreement in accordance with the intent of the Parties                to                minimize taxes, so long as neither Party is materially adversely                affected                by such efforts. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.2 | Taxes. |
|-----|--------|

| (a)   | As                between the Parties: (i) Seller is responsible for the payment of                all                taxes imposed by any Governmental Authority on the wholesale sales                of Full                Requirements Service under this Agreement; and (ii) Buyer is responsible                for the payment of all taxes imposed by any Governmental Authority                on                retail sales of Full Requirements Service under this                Agreement. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Any                Party paying taxes that should have been paid by the other Party                pursuant                to Section 8.2(a) (Taxes), shall be reimbursed by such other Party                in the                next invoice issued pursuant to Section 7.1                (Billing). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.3 | Disclosure                of Tax Treatment. Notwithstanding anything to the contrary in this                Agreement or in the RFP and appendices thereto, Seller and Buyer                agree                that: (i) any obligation of confidentiality with respect to the Parties'                Transactions hereunder does not apply, and has not applied from the                commencement of discussions between the Parties, to the tax treatment                and                tax structure of the Agreement and all Transactions thereunder, and                (ii)                Seller and Buyer (and each of their respective employees, representatives,                or agents) may disclose to any and all persons, without limitation                of any                kind, the tax treatment and tax structure of the Agreement and the                Transactions thereunder, as well as any materials of any kind (including                opinions or other tax analyses) that have been provided to the disclosing                Party relating to such tax treatment and tax structure, all within                the                meaning of Treasury Regulations Section 1.6011-4; provided, however,                that                the foregoing is not intended to affect any privileges that each                Party is                entitled, at its sole discretion, to maintain, including with respect                to                any confidential communications with its attorney or any confidential                communications with a federally authorized tax practitioner under                Section                7525 of the Internal Revenue Code. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      9**

**INDEMNIFICATION**

| 9.1 | Seller's                Indemnification for Third-Party Claims. Seller shall indemnify, hold                harmless, and defend Buyer and its Affiliates, and their respective                officers, directors, employees, agents, contractors, subcontractors,                invitees, successors, representatives and permitted assigns (collectively,                "Buyer's Indemnitees") from and against any and all claims, liabilities,                costs, losses, damages, punitive damages and expenses including reasonable                attorney and expert fees, disbursements actually incurred, and any                penalties or fines imposed by Government Authorities in any action                or                proceeding between Buyer and a third party or Seller for damage to                property of unaffiliated third parties, injury to or death of any                person,                including Buyer's employees or any third parties, to the extent directly                caused by the negligence, gross negligence or willful misconduct                of Seller                and/or its officers, directors, employees, agents, contractors,                subcontractors or invitees arising out of or connected with Seller's                performance under this Agreement, Seller's exercise of rights under                this                Agreement, or Seller's breach of this Agreement. Buyer shall have                the                right to hire the attorney of its choice to defend it in any proceeding                brought against it pursuant to this                provision. |
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| 9.2 | Buyer's                Indemnification for Third-Party Claims. Buyer shall indemnify, hold                harmless, and defend Seller and its Affiliates, and their respective                officers, directors, employees, agents, contractors, subcontractors,                invitees, successors, representatives and permitted assigns (collectively,                "Seller's Indemnitees") from and against any and all claims, liabilities,                costs, losses, damages, and expenses including reasonable attorney                and                expert fees, disbursements actually incurred, and any penalties or                fines                imposed by Government Authorities in any action or proceeding between                Seller and a third party or Buyer for damage to property of unaffiliated                third parties, injury to or death of any person, including Seller's                employees or any third parties, to the extent directly caused by                the gross                negligence or willful misconduct of Buyer and/or its officers, directors,                employees, agents, contractors, subcontractors or invitees arising                out of                or connected with Buyer's performance under this Agreement, Buyer's                exercise of rights under this Agreement, or Buyer's breach of this                Agreement. Seller shall have the right to hire the attorney of its                choice                to defend it in any proceeding brought against it pursuant to this                provision. |
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| 9.3 | Indemnification                Procedures. If either Party intends to seek indemnification under                Sections 9.1 (Seller's Indemnification for Third-Party Claims) or                9.2                (Buyers Indemnification for Third-Party Claims), as applicable, from                the                other Party, the Party seeking indemnification shall give the other                Party                notice of such claim within ninety (90) days of the later of the                commencement of, or the Party's actual knowledge of, such claim or                action.                Such notice shall describe the claim in reasonable detail, and shall                indicate the amount, estimated if necessary, of the claim that has                been,                or may be, sustained by said Party. To the extent that the other                Party                will have been actually and materially prejudiced as a result of                the                failure to provide such notice, such notice will be a condition precedent                to any liability of the other Party under the provisions for                indemnification contained in this Agreement. Neither Party may settle                or                compromise any claim without the prior consent of the other Party;                provided, however, said consent shall not be unreasonably withheld                or                delayed. |
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**ARTICLE**
**10**

**LIMITATIONS      ON LIABILITY**

**ARTICLE      11**

**FORCE      MAJEURE**

| 11.1 | Force                Majeure means an event or circumstance as defined in Article 1.                Notwithstanding anything in this Agreement to the contrary, the Parties                shall be excused from performing their respective obligations under                this                Agreement (other than the obligation to make payments with respect                to                performance prior to the event of Force Majeure) and shall not be                liable                for damages or otherwise due to their failure to perform, during                any                period that one Party is unable to perform due to an event of Force                Majeure, provided that the Party declaring an event of Force Majeure                shall: (i) act expeditiously to resume performance; (ii) exercise                all                commercially reasonable efforts to mitigate or limit damages to the                other                Party; and (iii) fulfills the requirements set forth in Section 11.2                (Notification). |
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| 11.2 | Notification.                A Party unable to perform under this Agreement due to an event of                Force                Majeure shall: (i) provide prompt written notice of such event of                Force                Majeure to the other Party, which shall include an estimate of the                expected duration of the Party's inability to perform due to the                event of                Force Majeure; and (ii) provide prompt notice to the other Party                when                performance resumes. |
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**ARTICLE      12**

**EVENTS      OF DEFAULT; REMEDIES**

| 12.1 | Events                of Default. An "Event of Default"                shall mean,                with respect to a Party ("Defaulting Party"), the occurrence of any                of the                following: |
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| (a)   | the                  failure to make, when due, any payment required pursuant to this                  Agreement                  if such failure is not remedied within two (2) Business Days after                  written                  notice; |
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| (b)   | any                  representation or warranty made by such Party herein or in response                  to the                  RFP is intentionally or unintentionally false or misleading in                  any                  material respect when made or when deemed made or                  repeated; |
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| (c)   | the                  failure of a Party to comply with the requirements of Section 4.7                  (PJM                  Membership) and 4.9 (FERC Authorization) if such failure is not                  remedied                  within three (3) Business Days after written                  notice; |
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| (d)   | PJM                  has declared a Party to be in default of any provision of any PJM                  Agreement, which default prevents a Party's performance hereunder                  if such                  failure is not remedied within three (3) Business Days after written                  notice; |
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| (e)   | the                  failure to perform any material covenant or obligation set forth                  in this                  Agreement (except to the extent constituting a separate Event of                  Default)                  if such failure is not remedied within three (3) Business Days                  after                  written notice; |
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| (f)   | such                  Party becomes Bankrupt; |
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| (g)   | such                  Party consolidates with, or merges with or into, or transfers all                  or                  substantially all of its assets to, another entity, or assigns                  the                  Agreement or any rights, interests, or obligations hereunder without                  the                  prior written consent of the other Party when such consent is required,                  and, at the time of such consolidation, merger, transfer or assign,                  the                  resulting, surviving, transferee, or assigned entity fails to assume                  all                  the obligations of such Party under this Agreement to which it                  or its                  predecessor was a party by operation of law or pursuant to an agreement                  reasonably satisfactory to the other                  Party; |
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| (h)   | the                  occurrence and continuation of: (i) a default, event of default                  or other                  similar condition or event in respect of such Party under one or                  more                  agreements or instruments, individually or collectively, relating                  to                  indebtedness for borrowed money in an aggregate amount of not less                  than                  five percent (5%) of such Party's TNW, which results in such indebtedness                  becoming immediately due and payable or; (ii) a default by such                  Party in                  making on the due date therefore one or more payments, individually                  or                  collectively, in an aggregate amount of not less than five percent                  (5%) of                  such Party's TNW. |
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| (i)   | the                  failure of a Party to comply with its obligations pursuant to Article                  14                  (Performance Assurance) if such failure is not remedied within                  three (3)                  Business Days after written notice. |
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| (j)   | with                  respect to Seller's Guarantor if any: (i) if any representation                  or                  warranty made by the Guarantor in connection with this Agreement                  is                  intentionally or unintentionally false or misleading in any material                  respect when made or when deemed made or repeated; (ii)the failure                  of the                  Guarantor to make any payment required or to perform any other                  material                  covenant or obligation in any guaranty made in connection with                  this                  Agreement and such failure shall not be remedied within three (3)                  Business                  Days after written notice; (iii) the failure of the Guarantor's                  guaranty                  to be in full force and effect for purposes of this Agreement (other                  than                  in accordance with its terms) prior to the satisfaction of all                  obligations                  of such Party under this Agreement without the written consent                  of the                  other Party; (iv) the Guarantor repudiates, disaffirms, disclaims,                  or                  rejects, in whole or in part, or challenges the validity of any                  guaranty;                  or (v) conditions described with respect to a Party in subparagraph                  (f) of                  this Section 12.1 (Events of Default) occurs with respect to its                  Guarantor. |
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| 12.2 | Remedies.                If an Event of Default with respect to a Defaulting Party shall have                occurred and be continuing, the other Party (the "Non-Defaulting                Party"),                shall provide written notice to the Defaulting Party and shall have                the                right to temporarily suspend performance pursuant to Section 12.2(a)                or                implement all remedies pursuant to Section                12.2(b): |
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| (a)   | If                an Event of Default has occurred and is continuing, the Non-Defaulting                Party shall have the right to suspend performance, provided that                such                suspension shall not continue for longer than ten (10) Business Days.                At                any time during or subsequent to the temporary suspension of performance,                the Non-Defaulting Party may proceed with the steps outlined in Section                12.2(b). If, by the end of the ten (10) Business Day period of suspension,                the Non-Defaulting Party has not commenced the implementation of                the                remedies pursuant to Section 12.2(b), then the Non-Defaulting Party                must                resume performance of its obligations under this                Agreement. |
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| (b)   | In                addition to any other remedies available at law or in equity to the                Non-Defaulting Party, if an Event of Default has occurred and is                continuing, the Non-Defaulting Party shall have the right to implement                all, but not less than all, the following                remedies: |
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|   | i. | designate                a day, in such notice, no earlier than the day such notice is effective                and no later than twenty (20) calendar days after such notice iseffective,                as an early termination date ("Early Termination Date") for the purposes                of determining the Settlement                Amount; |
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|   | ii. | calculate                and receive from the Defaulting Party, payment for any Default Damages                and                costs, as defined this Agreement, the Non-Defaulting Party incurs                as of                the date of the event giving rise to the Event of Default, until                the                earlier of: (i) the Early Termination Date (if applicable); or (ii)                the |
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| (c)   | If                an Event of Default has occurred and the Non-Defaulting Party is                the                Buyer, then: |
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|   | i. | unless                the Event of Default was a failure by Seller to meet any or all of                its                Full Requirements Service obligations, Buyer may offer to waive the                default on such terms and conditions as Buyer, at its sole discretion,                may                deem appropriate to propose ("Special Remedy"); provided however                that; |
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|   | ii. | any                such Special Remedy can only be offered to Seller if it first is                specifically approved by the PUC in accordance with PUC Orders and                Settlements. |
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|   | 12.3                Calculation and Net Out of Settlement                Amounts. |
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| (a)   | The                Non-Defaulting Party shall calculate, in a commercially reasonable                manner,                a Settlement Amount for each such Terminated Transaction as of the                Early                Termination Date or, to the extent that in the reasonable opinion                of the                Non-Defaulting Party certain of such Terminated Transactions are                commercially impracticable to liquidate and terminate or may not                be                liquidated and terminated under applicable law on the Early Termination                Date, as soon thereafter as is reasonably practicable. For purposes                of                calculating the Settlement Amount, the Non-Defaulting Party shall                reflect                the net impact of the exercise of the option on the part of other                wholesale suppliers as described in Section 4.11 (Seller Step-Up                Rights)                of this Agreement. The Non-Defaulting Party shall aggregate all Settlement                Amounts into a single liquidated amount (the "Termination Payment")                by                netting out: (i) all Settlement Amounts that are due to the Defaulting                Party, plus, at the option of the Non-Defaulting Party, any cash                or other                form of security then available to the Non-Defaulting Party pursuant                to                Article 14 (Performance Assurance/Accelerated Payments), plus any                or all                other amounts due to the Defaulting Party under this Agreement; against                (ii) all Settlement Amounts that are due to the Non-Defaulting Party                plus                any or all other amounts due to the Non-Defaulting Party, including                but                not limited to Default Damages and costs, under this Agreement. The                Termination Payment shall be due to the Non-Defaulting Party. In                no event                will a termination payment result in payment from the Non-Defaulting                Party                with the exception for any amount due, after set off, for services                provided by the Defaulting Party prior to the Early Termination                Date. |
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| (b)   | In                order to avoid doubt regarding a commercially reasonable calculation                for                thepurposes of calculating the Settlement Amount by the Non-Defaulting                Party, the quantity of amounts of Energy, Capacity and other services                to                have been provided under the POLR SMA for the period following the                Early                Termination Date (the "Termination Quantity") shall be deemed those                quantity amounts that would have been delivered on an hourly basis                had the                POLR SMA been in effect during the previous calendar year, adjusted                for                such POLR load changes as have occurred since the previous calendar                year.                Nothing in this section shall limit the right of the Buyer when Seller                is                the Defaulting Party to replace Seller's full requirements obligation                and                the result of any Commission-approved procedure will be deemed to                be                commercially reasonable for purposes of calculating the Settlement                Amount                and will be deemed to have been determined by reference to the Termination                Quantity. |
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| 12.4 | Notice                of Termination Payment. As soon as practicable after an Early                Termination Date is declared, the Non-Defaulting Party shall provide                written notice to the Defaulting Party of the amount of the Termination                Payment. The notice shall include a written statement explaining                in                reasonable detail the calculation of such amount. The Defaulting                Party                shall make the Termination Payment within five (5) Business Days                after                such notice is effective. |
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| 12.5 | Disputes                With Respect to Termination Payment. If the Defaulting Party disputes                the Non-Defaulting Party's calculation of the Termination Payment,                in                whole or in part, the Defaulting Party shall, within five (5) Business                Days of receipt of Non-Defaulting Party's calculation of the Termination                Payment, provide to the Non-Defaulting Party a notice that it intends                to                dispute the calculation of the Termination Payment ("Termination                Payment                Dispute Notice"), pursuant to the provisions of Article 13 (Dispute                Resolution), and provided, the Defaulting Party shall first transfer                collateral to the Non-Defaulting Party in an amount equal to the                Termination Payment, such collateral to be in a form acceptable to                the                Non-Defaulting Party by the Termination Payment                Date. |
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| 12.6 | Duty                to Mitigate. Each Party agrees that it has a duty to mitigate damages                and covenants that it will use commercially reasonable efforts to                minimize                any damages it may incur as a result of the other Party's failure                to                perform pursuant to this Agreement. |
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**ARTICLE      13**

**DISPUTE      RESOLUTION**

| 13.1 | Informal                Dispute Resolution. Before pursuing resolution of any dispute arising                out of this Agreement, the disputing Party shall provide written                notice to                the other Party setting forth the nature of the dispute, the amount                involved, if any, and the remedies sought. The Parties shall use                good                faith and reasonable commercial efforts to informally resolve such                dispute. Such efforts shall last for a period of at least thirty                (30)                calendar days from the date that the notice of the dispute is first                delivered from one Party to the other Party. Any amounts that are                owed by                one Party to the other Party as a result of resolution of a dispute                pursuant to this Section 13.1 (Informal Dispute Resolution), shall                be paid                within two (2) Business Days of such resolution and the payment shall                include interest calculated at the Interest Rate from the original                due                date through the date of payment. |
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| 13.2 | Formal                Dispute Resolution. After the requirements of Section 13.1 (Informal                Dispute Resolution) have been satisfied, all disputes, except as                noted                below, between the Parties shall be submitted to the appropriate                authority. |
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**ARTICLE      14**

**PERFORMANCE      ASSURANCE**

| 14.1 | Requirement                for Performance Assurance. With respect to Aggregate Transactions, if                at any time and from time to time during the term of this Agreement,                Aggregate Buyer's Exposure exceeds the Unsecured Credit on any Business                Day, then Buyer shall request that Seller post Performance Assurance                in an                amount equal to the amount by which Aggregate Buyer's Exposure exceeds                the                Unsecured Credit (rounding upwards to the nearest $100,000), less                any                Performance Assurance already posted with Buyer. Notwithstanding                the                above, Seller shall only be required to post the required Performance                Assurance to the extent the amount of required Performance Assurance                is                equal to or greater than $500,000. Subsequent and incremental requests                for                Performance Assurance shall be in $100,000 increments. Buyer's request                for                Performance Assurance shall not be disputed by                Seller. |
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| 14.2 | Performance                Assurance Transfers/Returns. If the request for Performance Assurance                is made by Buyer before 1:00 p.m. EPT on a Business Day, then if                Seller is                posting cash as the form of Performance Assurance collateral, Seller                shall                be required to deliver the Performance Assurance cash to Buyer on                the                Business Day following the date of such request; and if Seller is                posting                a Letter of Credit or other security as acceptable to Buyer as the                form of                Performance Assurance collateral, Seller shall be required to deliver                the                Performance Assurance Letter of Credit or other security on the second                Business Day following the date of such request. If a request for                Performance Assurance is made by Buyer at or after 1:00 p.m. EPT,                then if                Seller is posting cash as the form of Performance Assurance collateral,                Seller shall be required to deliver the Performance Assurance cash                to                Buyer on the second Business Day following the date of such request;                and                if Seller is posting a Letter of Credit or other security as acceptable                to                Buyer as the form of Performance Assurance collateral, Seller shall                be                required to deliver the Performance Assurance Letter of Credit or                other                security on the third Business Day following the date of such request.                Telephone, facsimile, or other communication means mutually acceptable                by                the Parties, are suitable means for the Buyer to make requests for                Performance Assurance. If Seller provides its Performance Assurance                collateral in cash, in whole or in part, Seller will also simultaneously                grant Buyer a first-priority security interest in that cash, in a                form                mutually acceptable to Buyer and Seller. Buyer shall not be entitled                to                hold Performance Assurance in the form of cash; rather, Performance                Assurance in the form of cash shall be held in any major U.S. commercial                bank, or a foreign bank with a U. S. branch office, (which is not                the                Buyer or an affiliate of the Buyer), and has assets of at least $10                billion and a credit rating of at least "A" by Standard and Poor's,                or                "A2" by Moody's Investor Services ("Qualified Institution").                The Buyer                will pay to Seller on the first Business Day of each calendar quarter                the                amount of interest it receives based upon the applicable overnight                repurchase interest rate from the Qualified Institution on any Performance                Assurance in the form of cash posted by Seller. The interest amount                or                portion thereof not returned to Seller pursuant to this Section 14.2                will                constitute Performance Assurance and will be subject to the provisions                of                Article 14 of this Agreement. |
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|   | On                any Business Day (but no more frequently than weekly with respect                to                Letters of Credit or other security acceptable to Buyer, and daily                with                respect to cash), Seller, at its sole cost, may request that the                Performance Assurance be reduced correspondingly to reflect the decrease                in Buyer Exposure or an increase in Seller's Unsecured Credit, if                any                (rounding upwards for any fractional amount to the nearest $100,000).                Buyer shall be required to return the amount of Performance Assurance                due                in accordance with the timeframes set forth in the preceding paragraph.                A                written means is suitable for the Seller to make requests for return                of                Performance Assurance. |
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| 14.3 | Unsecured                Credit. During the term of this Agreement, Buyer shall extend, solely                with respect to the Performance Assurance set forth in Section 14.1                (Requirement for Performance Assurance), Unsecured Credit, as defined                in                Article 1 of this Agreement, to Seller in an amount initially determined                on the Effective Date and redetermined each Business Day thereafter                pursuant to this Section 14.3. |
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| **CREDIT****RATING**          |                           |
|-------------------------------|--------------------------------|
| **S&P**                   | **Fitch**                      | **Moody's** | **TNW****Percentage** | **Unsecured****Credit                    Limit** |
| A-                    orabove | A-                    or above | A3                    orabove | 5% | $75,000,000 |
| BBB+                          | BBB+                           | Baal | 5% | $50,000,000 |
| BBB                           | BBB                            | Baa2 | 5% | $35,000,000 |
| BBB-                          | BBB-                           | Baa3 | 5% | $20,000,000 |
| BelowBBB-                     | BelowBBB-                      | BelowBaa3 | 5% | $0 |

| 14.4 | Credit                Rating. If during the term of the Agreement, Seller's or Seller's                Guarantor's, if applicable, Credit Rating changes, by either being                upgraded or downgraded by any of the rating agencies referenced in                Section                14.3 (Unsecured Credit) of the Agreement, the Seller shall be required                to                provide written notice to Buyer of such Credit Rating change no later                than                two (2) Business Days after the date of such change. However, if                Seller's,                or Seller's Guarantor's, if applicable, equity is publicly traded                on the                New York Stock Exchange, NASDAQ National Market, or American Stock                Exchange, the Buyer will waive the requirement to provide written                notice. |
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| 14.5 | Tangible                Net Worth. During the term of the Agreement, Seller, or Seller's                Guarantor, if applicable, shall be required to provide Buyer written                financial information to determine the Seller's, or Seller's Guarantor's                Tangible Net Worth. Financial information shall include an audited                Annual                Report, containing, but not limited to, a balance sheet prepared                in                accordance with generally accepted accounting principles, a schedule                of                long term debt including maturity dates, and all notes to the financial                statement that apply to long term debt, short term borrowing, and                liquidity and capital resources. The Seller, or Seller's Guarantor,                shall                also provide the Buyer written financial information on a quarterly                basis                containing a balance sheet prepared in accordance with generally                accepted                accounting principles. However, if Seller's, or Seller's Guarantor's,                if                applicable, equity is publicly traded on the New York Stock Exchange,                NASDAQ National Market, or American Stock Exchange, the Buyer will                waive                the requirement to provide written financial                information. |
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| 14.6 | Aggregate                  to Buyer's                  Exposure. In order to determine the amount of Performance Assurance                  during the term of this Agreement, Buyer shall calculate the Aggregate                  Buyer's Exposure under Aggregate Transactions once per Business                  Day,                  pursuant to the process and methodology described in Exhibit E.                  On a                  Transaction Date, the Buyer's Exposure for that Transaction shall                  be                  deemed equal to zero. |
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|   | To                  the extent that the calculations of the Aggregate Buyer's Exposure                  for a                  given date results in a negative number, the Aggregate Buyer's                  Exposure                  for such date shall be deemed equal to                  zero. |
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| (a)   | Pricing                  Agent. Buyer shall contract with and pay for the services of a single                  independent consultant to provide pricing services with respect                  to the                  Transactions under this Agreement ("Pricing Agreement"). The Pricing                  Agent                  shall provide to the Buyer the On-Peak Initial Mark Price and the                  Off-Peak                  Initial Mark Price. In addition, on each Business Day, the Pricing                  Agent                  shall provide to the Buyer the On-Peak Forward Price and the Off-Peak                  Forward Price. To the extent that information and/or quotes are                  not                  available to determine an On-Peak Forward Price or Off-Peak Forward                  Price                  for a given month the Pricing Agent shall be permitted to use information                  and/or quotes relevant to such month for which information/and                  quotes are                  available in order to provide the Buyer the required On-Peak Forward                  Price                  and Off-Peak Forward Price for such month. Exhibit E presents in                  more                  detail the methodology to be used by the Pricing Agent in determining                  the                  Off-Peak Initial Mark Price, On-Peak Initial Mark Price, Capacity                  Forward                  Price, Capacity Initial Mark Price, the On-Peak Forward Price,                  and the                  Off-Peak Forward Price. |
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| (b)   | Buyer                  shall use reasonable efforts to provide Seller with Aggregate Buyer's                  Exposure on each Business Day subject to the Confidentiality provisions                  of                  this Agreement. |
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| (c)   | Pursuant                  to Section 14.1 above, Seller shall not dispute any request by                  Buyer for                  Performance Assurance. Notwithstanding such provision, Seller may                  dispute                  the Pricing Agent's determinations of the On-Peak Initial Mark                  Price,                  Off-Peak Initial Mark Price, Capacity Forward Price, Capacity Initial                  Mark                  Price, On-Peak Forward Price, and Off-Peak Forward Price if Seller                  can                  demonstrate that the Pricing Agent has been grossly negligent or                  has                  exhibited willful misconduct in such determinations, or that the                  Pricing                  Agent is making such determinations in a manner that is arbitrary,                  capricious or erroneous on its face. Such dispute of the Pricing                  Agent's                  determinations by the Seller shall not be cause for any delay by                  the                  Seller in posting any Performance Assurance requested by the                  Buyer. |
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| 14.7 | Accelerated Payments: If at any time and from                time to                time during the term of this Agreement, a Buyer Downgrade Event occurs,                notwithstanding the provisions of Article 7 (Billing and Settlement),                Seller shall have the right to require Buyer to divide the Monthly                Settlement Amount into weekly amounts and pay such amounts on a weekly                basis for so long as the Buyer Downgrade Event continues. A "weekly                basis"                as referred to in the preceding sentence means that for a given Monday                through Sunday period in a Delivery Period. Seller shall notify Buyer                who                shall be required to make payment for such period no later than the                first                Wednesday following such period (or if such day is not a Business                Day, on                the next Business Day). Buyer's failure to make such accelerated                payments                shall be deemed an Event of Default under Section 12.1 (Events of                Default)                of the Agreement. |
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**ARTICLE      15**

**REPRESENTATIONS      AND WARRANTIES**

| 15.1 | Representations                and Warranties. On the Effective Date and throughout the term of this                Agreement, each Party represents and warrants to the other Party                that: |
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| (a)   | it                  is duly organized, validly existing and in good standing under                  the laws of                  the jurisdiction of its formation; |
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| (b)   | it                  has all regulatory authorizations necessary for it to legally perform                  its                  obligations under this Agreement and each                  Transaction; |
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| (c)   | the                  execution, delivery and performance of this Agreement and each                  Transaction                  are within its powers, have been duly authorized by all necessary                  action                  and do not violate any of the terms and conditions in its governing                  documents, any contracts to which it is a party or any law, rule,                  regulation, order or the like applicable to                  it; |
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| (d)   | this                  Agreement and each Transaction constitutes its legally valid and                  binding                  obligation enforceable against it in accordance with its terms;                  subject to                  any equitable defenses; |
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| (e)   | it                  is not Bankrupt and there are no proceedings pending or being contemplated                  by it or, to its knowledge, threatened against it which would result                  in it                  becoming Bankrupt; |
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| (f)   | there                  are no pending, or to its knowledge threatened, actions, suits                  or                  proceedings against it or any of its Affiliates any legal proceedings                  before any Governmental Authority that could materially adversely                  affect                  its ability to perform its obligations under this Agreement and                  each                  Transaction; |
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| (g)   | no                  Event of Default with respect to it has occurred and is continuing                  and no                  such event or circumstance would occur as a result of its entering                  into or                  performing its obligations under this Agreement and each                  Transaction; |
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| (h)   | with                  respect to Buyer, it is acting to fulfill its obligations under                  and in                  accordance with PUC Orders and Settlements to enter into this                  Agreement; |
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| (i)   | it                  is not relying upon the advice or recommendations of the other                  Party in                  entering into this Agreement, it is capable of understanding, understands                  and accepts the terms, conditions and risks of this Agreement and                  each                  Transaction, and the other Party is not acting as a fiduciary for                  or                  advisor to it in respect of this                  Agreement; |
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| (j)   | it                  is a "forward contract merchant" within the meaning of the United                  States                  Bankruptcy Code; and |
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| (k)   | it                  has entered into this Agreement and each Transaction in connection                  with                  the conduct of its business and it has the capacity or ability                  to provide                  or take delivery of the Full Requirements Service; and it is an                  "eligible                  contract participant" as defined                  in Section la(12) of the Commodity Exchange                  Act. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 15.2 | Additional                Understandings. This Agreement is for the purchase and sale of Full                Requirements Service that will be delivered in quantities expected                to be                used or sold over a defined period(s) in the normal course of business,                and it is the intention at the inception and throughout the term                of this                Agreement and each Transaction hereunder that the Agreement will                result in                physical delivery and not financial settlement, and the quantity                of Full                Requirements Service that Seller must deliver and Buyer must receive                will                be determined by the requirements of the POLR Load served by Buyer,                and,                as such, the Agreement does not provide for an option by either Party                with                respect to the quantity of Full Requirements Service to be delivered                or                received during performance of the Agreement. This Agreement has                been                drafted to effectuate Buyer's and Seller's specific intent so that                in                accordance with Financial Accounting Standards Board Statement No.                133                ("FAS 133"), as amended, Buyer would be able to elect to use accrual                accounting for its purchases under this Agreement, while Seller would                be                able to elect to use either accrual or mark-to-market accounting                for its                sales under the Agreement. If either Buyer or Seller determines,                in good                faith, that the intended accounting treatment has become jeopardized,                due                to a change in interpretations of FAS 133, as amended, or otherwise,                then                Buyer and Seller agree to meet and use their best efforts to reform                the                Agreement so that, with the minimum changes possible, the Agreement                again                qualifies for the intended accounting                treatments. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ARTICLE      16**

**MISCELLANEOUS**

| 16.1 | Notices.                Unless otherwise specified herein, all notices shall be in writing                and                delivered by hand, overnight or facsimile (provided a copy is also                sent by                overnight mail). Notice shall be effective on the next Business Day                after                it is sent. A Party may change its address by providing notice of                the same                in accordance with this Section 16.1. Notice information for Buyer                and                Seller is shown on Exhibit G. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.2 | General.                This Agreement shall be considered for all purposes as prepared through                the joint efforts of the Parties and shall not be construed against                one                Party or the other as a result of the preparation, substitution,                submission or other event of negotiation, drafting or execution hereof.                Each Party further agrees that it will not assert, or defend itself,                on                the basis that any applicable tariff is inconsistent with this Agreement.                This Agreement shall not impart any rights enforceable by any third                party                other than a permitted successor or assignee bound to this Agreement                or                any Transaction. Any provision declared or rendered unlawful will                not                otherwise affect the remaining lawful obligations that arise under                this                Agreement or any Transaction; provided that in such event the Parties                shall use commercially reasonable efforts to amend this Agreement                or any                Transaction in order to give effect to the original intention of                the                Parties. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.3 | Rules                of Interpretation. The following principles shall be observed in the                interpretation and construction of this                Agreement: |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | unless                otherwise stated, the terms "include" and "including" when used in                this                Agreement shall be interpreted to mean by way of example only and                shall                not be considered limiting in any                way; |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | all                titles and headings used herein are for convenience and reference                purposes                only, do not constitute a part of this Agreement and shall be ignored                in                construing or interpreting the obligations of the parties under this                Agreement; |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | references to the singular include the plural and              vice              versa; |
|-----------------|-----------------------------------------------------------------------------------------|

| (d)   | references                to Articles, Sections, Clauses and the Preamble are, unless the context                indicates otherwise, references to Articles, Sections, Clauses and                the                Preamble of this Agreement; and |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | in                carrying out its rights, obligations and duties under this Agreement,                each                Party shall have an obligation of good faith and fair                dealing. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.4 | Audit.                Each Party has the right on at least three (3) Business Days prior written                notice, at its sole expense and during normal working hours, to examine                the records of the other Party to the extent reasonably necessary                to                verify the accuracy of any statement, charge or computation made                pursuant                to this Agreement. If any such examination reveals any inaccuracy                in any                statement, the necessary adjustments in such statement and the payments                thereof will be made in accordance with Sections 7.1 (Billing) and                7.5                (Interest on Unpaid Balances). |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.5 | Confidentiality. |
|------|------------------|

| 16.6 | Successors.                This Agreement and all of the provisions hereof are binding upon,                and                inure to                the benefit of, the Parties and their respective successors and permitted                assigns. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.7 | Assignment/Change                in Corporate Identity. Neither Party shall assign this Agreement, its                rights or obligations hereunder without the prior written consent                of the                other Party, which consent may not be unreasonably withheld; provided,                however, either Party may, without the consent of the other Party                (and                without relieving itself from liability                hereunder), |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | transfer,                sell, pledge, encumber or assign this Agreement or the accounts,                revenues                or proceeds hereof in connection with any financing or other financial                arrangements; |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | transfer                or assign this Agreement to an affiliate of such Party if: (i) such                affiliates creditworthiness is equal to or higher than that of such                Party;                or (ii) in such event, the Transferee should assume all obligations                pursuant to this Agreement and shall provide appropriate performance                assurances as required by this                Agreement; |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | transfer                or assign this Agreement to any person or entity succeeding to all                or                substantially all of the assets whose: (i) creditworthiness is equal                to or                higher than that of such Party; or (ii) in such event, the Transferee                should assume all obligations pursuant to this Agreement and shall                provide                appropriate performance assurances as required by this Agreement;                and |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | provided,                however, that in each such case, any such assignee shall agree in                writing                to be bound by the terms and conditions hereof and so long as the                transferring Party delivers such tax and enforceability assurance                as the                non-transferring Party may reasonably                request. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.8 | Governing                Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES                HEREUNDER SHALL BE GOVERNED BY AND CONSTITUTED IN ACCORDANCE WITH                THE LAWS                OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO PRINCIPLES                OF                CONFLICTS OF LAW. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.9 | Jurisdiction                and Venue. Except for matters jurisdictional to FERC, the PUC or the                appellate courts having jurisdiction over the PUC or FERC matters,                all                disputes hereunder shall be resolved in the Federal or State courts                of                Pennsylvania and each Party hereby irrevocably submits to the in                personam                jurisdiction of such courts. Each Party hereby waives its respective                rights to any jury trial with respect to any litigation arising under                or                in connection with this Agreement. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.10 | Amendments.                Except as provided in Section 16.11 (PJM Agreement Modifications),                this                Agreement or any Transaction shall not be amended, modified, terminated,                discharged or supplemented, nor any provision hereof waived, unless                mutually agreed, in writing, by the Parties. Except as provided in                Section                16.11 (PJM Agreement Modifications), the rates, terms and conditions                contained in this Agreement or any Transaction are not subject to                change                under Sections 205 or 206 of the Federal Power Act absent the mutual                written agreement of the Parties. Absent the agreement of all parties                to                the proposed change, the standard of review for changes to this Agreement                proposed by a Party, a non-Party or the FERC acting *sua sponte*shall                be the "public interest" standard of review set forth in *United Gas Pipe                Line Co. v.                Mobile Gas Service Corp.,*350 U.S. 332 (1956), and *Federal                Power Commission v.                Sierra Pacific Power Co.,*350 U. S. 348 (1956) (the *"Mobile-Sierra"*doctrine). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.11 | PJM                Agreement Modifications. |
|-------|---------------------------------------------|

| (a)   | If                the PJM Agreements are amended or modified so that any schedule or                section                references herein to such agreements is changed, such schedule or                section                references herein shall be deemed to automatically (and without any                further action by the Parties) refer to the new or successive schedule                or                section in the PJM Agreements which replaces that originally referred                to                in this Agreement. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | If                the applicable provisions of the PJM Agreements referenced herein,                or any                other PJM rules relating to the implementation of this Agreement,                are                changed materially from those in effect on the Effective Date, both                Parties shall cooperate to make conforming changes to this Agreement                to                fulfill the purposes of this                Agreement. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.12 | Delay                and Waiver. Except as otherwise provided in this Agreement, no delay                or omission to exercise any right, power or remedy accruing to the                respective Parties hereto upon any breach or default of any other                Party                under this Agreement shall impair any such right, power or remedy,                nor                shall it be construed to be a waiver of any such similar breach or                default                thereafter occurring; nor shall any waiver of any single breach or                default                be deemed a waiver of any other breach or default theretofore or                thereafter occurring. Any waiver, permit, consent or approval of                any kind                or character of any breach or default under this Agreement, or any                waiver                of any provision or condition of this Agreement, must be in writing                and                shall be effective only to the extent specifically set forth in such                writing. |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.13 | Regulatory                Approvals. The commencement of the Delivery Period is subject to the                receipt or waiver by Buyer of all Buyer required regulatory approvals.                In                the event such required regulatory approvals are not received or                waived,                the Step-Up provisions of Section 4.11 (Seller Step-Up Rights) shall                apply. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ATTEST: |   | PPL                    ELECTRIC UTILITES CORPORATION |
|---------|--------|------------------------------------------------------|
|    |   |                                                 |
|    |   | By:                                                  |
|    |   |                                                 |
| Title:  |   | Name:                                                |
|    |   |                                                 |
|    |   | Title:                                               |
|    |   |                                                 |
|    |   |                                                 |
| ATTEST: |   |                                                 |
|    |   |                                                 |
|    |   |                                                 |
|    |   | By:                                                  |
|    |   |                                                 |
| Title:  |   | Name:                    Clarence J. Hopf, Jr.       |
|    |   |                                                 |
|    |   | Title:  President                          |

----

**EXHIBIT        A**

**TRANSACTION        CONFIRMATION EXAMPLE**

| **Service                  Type**          | **Total****Tranches** | **%                  Size of****a                  Tranche** | **PLC****(MW)** | **Approximate****Tranche                  Size****(MW)** |
|--------------------------------------------|-----------------------|--------------------------------------------------------------|-----------------|----------------------------------------------------------|
| Rate                  Classes RS, RTS, RTD |                  | 1.67%                                                        |            | 50.0                                                     |

|   |   | **2010                  Estimated Quantity Per Tranche (MWh)** |   |
|--------|--------|----------------------------------------------------------------|--------|
| Jan    | Feb    | Mar                                                            | Apr    | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
|   |   |                                                           |   |   |   |   |   |   |   |   |   |

| **SELLER** By:_______________ Name:                ____________ Title:______________  | **PPL                ELECTRIC UTILITIES CORPORATION** By:                ___________________________________ Name:_________________________________ Title:                _________________________________  |
|-----------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**EXHIBIT      B**

**ALTERNATIVE      ENERGY PORTFOLIO STANDARDS OBLIGATION**

|   Compliance                Period | Tier                I | PV(included                inTier                I Obligation) | Tier                II |
|----------------------------------------------|-----------------------|----------------------------------------------------------------|------------------------|
| 1/1/10                to 5/31/10             | 2.5%                  | 0.0360%                                                        | 4.2%                   |
| 6/1/10                to 12/31/10            | 3.0%                  | 0.0609%                                                        | 6.2%                   |

|   Compliance                Period | Tier                I | PV(included                inTier                I Obligation) | Tier                II |
|----------------------------------------------|-----------------------|----------------------------------------------------------------|------------------------|
| 1/1/10                to 5/31/10             | 2.5%                  | 0.0000%                                                        | 4.2%                   |
| 6/1/10                to 12/31/10            | 3.0%                  | 0.0000%                                                        | 6.2%                   |

| Compliance                Period  | Tier                I | PV(included                inTier                I Obligation) | Tier                II |
|-----------------------------------|-----------------------|----------------------------------------------------------------|------------------------|
| 1/1/10                to 5/31/10  | 2.5%                  | 0.0120%                                                        | 4.2%                   |
| 6/1/10                to 12/31/10 | 3.0%                  | 0.0203%                                                        | 6.2%                   |

**The      percentages set forth above are those applicable for the first RFP and may      be      revised for future RFPs to reflect changes in law or other applicable regulatory      requirements.**

----

**EXHIBIT      C**

**PERFORMANCE      ASSURANCE EVERGREEN LETTER OF CREDIT**

**{TO      BE ISSUED ON THE LETTERHEAD OF THE ISSUING BANK}**

**ISSUE      DATE_____________________________                                            EXPIRY      DATE: ________**

**APPLICANT**

**[      **

**BENEFICIARY**

**[      **

| 1.   | ALL                    COMMISSIONS AND OTHER BANKING CHARGES WILL BE BORNE BY THE                    APPLICANT. |
|----------------|-----------------------------------------------------------------------------------------------------------------|

| 2.   | THIS                    LETTER OF CREDIT MAY NOT BE TRANSFERRED OR                    ASSIGNED. |
|----------------|-------------------------------------------------------------------------------------------------|

| 3.   | THIS                    LETTER OF CREDIT IS IRREVOCABLE. |
|----------------|----------------------------------------------------------|

| 4.   | THIS                    LETTER OF CREDIT IS SUBJECT                    TO THE INTERNATIONAL STANDBY PRACTICES (1998) OF THE INTERNATIONAL                    CHAMBER                    OF COMMERCE PUBLICATION                    NO. 590 ("ISP98") OR                    SUCH LATER REVISION(S) OF THE ISP AS MAY BE HEREAFTER ADOPTED. AS                    TO MATTERS NOT GOVERNED BY ISP98, THIS LETTER OF CREDIT SHALL                    BE GOVERNED                    BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH                    OF                    PENNSYLVANIA, INCLUDING, TO THE EXTENT NOT INCONSISTENT WITH                    ISP98, THE                    UNIFORM COMMERCIAL CODE AS IN EFFECT IN THE STATE OF PENNSYLVANIA.                    THIS                    LETTER OF CREDIT MAY NOT BE AMENDED, CHANGED OR MODIFIED WITHOUT                    THE                    EXPRESS WRITTEN CONSENT OF THE BENEFICIARY AND THE                    ISSUER. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | THE                    BENEFICIARY SHALL NOT BE DEEMED TO HAVE WAIVED ANY RIGHTS UNDER                    THIS LETTER OF CREDIT,                    UNLESS                    THE BENEFICIARY OR AN AUTHORIZED AGENT OF THE BENEFICIARY SHALL                    HAVE                    SIGNED A DATED WRITTEN WAIVER. NO SUCH WAIVER, UNLESS EXPRESSLY                    SO STATED                    THEREIN, SHALL BE EFFECTIVE AS TO ANY TRANSACTION THAT OCCURS                    SUBSEQUENT                    TO THE DATE OF THE WAIVER, NOR AS TO ANY CONTINUANCE OF A BREACH                    AFTER THE                    WAIVER. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.   | A                    FAILURE TO MAKE ANY PARTIAL DRAWINGS AT ANY TIME SHALL NOT IMPAIR                    OR                    REDUCE THE AVAILABILTY OF THIS LETTER OF CREDIT IN ANY SUBSEQUENTPERIOD OR OUR                    OBLIGATION                    TO HONOR YOUR SUBSEQUENT                    DEMANDS FOR                    PAYMENT MADE IN ACCORDANCE WITH THE TERMS OF THIS LETTER OF                    CREDIT. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**EXHIBIT      D**

**SAMPLE      PJM INVOICE**

**FINAL      BILLING STATEMENT ISSUED ON: **

|  **OPERATING              AGREEMENT OF PJM INTERCONNECTION, L.L.C.:** |
|----------------------------------------------------------------------------|

|   | **Day-Ahead** | **Balancing** | **Total** |
|--------|---------------|---------------|-----------|

**Charges:**

| Spot                Market Energy                     | Seller | Seller | Seller |
|-------------------------------------------------------|--------|--------|--------|
| Transmission                Congestion                | Seller | Seller | Seller |
| Transmission                Losses (Point-to-Point)   | Seller | Seller | Seller |
| Regulation                                            |   |   | Seller |
| Spinning                Reserve                       |   |   | Seller |
| Operating                Reserves                     | Seller | Seller | Seller |
| Synchronous                Condensing                 |   |   | Seller |
| Capacity                Credit Market                 |   |   | Seller |
| Reconciliation                for Spot Market         |   |   | Seller |
| Reconciliation                for Regulation          |   |   | Seller |
| Reconciliation                for Operating Reserves  |   |   | Seller |
| Emergency                Energy                       |   |   | Seller |
| FTR                Auction                            |   |   | Seller |
| Meter                Error Correction                 |   |   | Seller |
| PJM                Load Response Program              |   |   | Seller |
|                                                  |   |   |   |
|                                                  |   |   |   |
| **Credits:**                                          |   |   |   |
| Spot                Market Energy                     | Seller | Seller | Seller |
| Transmission                Congestion                |   |   |   |
| Hourly                                                |   |   | Seller |
| Planning                Period Excess                 |   |   | Buyer  |
| Transmission                Losses (Point-to-Point)   |   |   | Seller |
| Regulation                                            |   |   | Seller |
| Spinning                Reserve                       |   |   | Seller |
| Operating                Reserves                     | Seller | Seller | Seller |
| Synchronous                Condensing                 |   |   | Seller |
| Capacity                Credit Market                 |   |   | Seller |
| Reconciliation                for Transmission Losses |   |   | Seller |
| Emergency                Energy                       |   |   | Seller |
| FTR                Auction                            |   |   | Seller |

----

**EXHIBIT      D (Continued)**

**SAMPLE      PJM INVOICE**

**FINAL      BILLING STATEMENT ISSUED On: **
**FOR PERIOD:**

**TO **

**PJM      OPEN ACCESS TRANSMISSION TARIFF:**

|   | **Total** |
|--------|-----------|

**Charges:**

| PJM                Scheduling, System Control and Dispatch Service                                          | Seller |
|-------------------------------------------------------------------------------------------------------------|--------|
| Transmission                Owner Scheduling, System Control and Dispatch Service                           | Seller |
| Reactive                Supply and Voltage Control from Generation Sources Service                          | Seller |
| Black                Start Service                                                                          | Seller |
| Network                Integration Transmission Service                                                     | Buyer  |
| Network                Transmission Service Offset Charges                                                  | Buyer  |
| Firm                Point-to-Point Transmission Service                                                     | Seller |
| Non-Firm                Point-to-Point Transmission Service                                                 | Seller |
| Transitional                Market Expansion Charges (Transmission Customer Charge                Only)     | Buyer  |
| Reconciliation                for PJM Scheduling, System Control and Dispatch Service                       | Seller |
| Reconciliation                for Transmission Owner Scheduling, System Control and                Dispatch | Seller |
| Service                                                                                                     |   |
| Intra-PJM                Seams Elimination Cost Assignment Charges                                          | Buyer  |
| PJM/MISO                Seams Elimination Cost Assignment Charges                                           | Buyer  |
|                                                                                                        |   |
|                                                                                                        |   |
| **Credits:**                                                                                                |   |
| Non-Firm                Point-to-Point Transmission Service                                                 | Buyer  |
| Other                Supporting Facilities                                                                  | Buyer  |

**Reliability      Assurance Agreement Among Load Serving Entities in the PJM Control      Ares:**

|   | **Total** |
|--------|-----------|

**Charges:**

| Capacity                Deficiency | Seller |
|------------------------------------|--------|

**Credits:**

| Capacity                Excess | Seller |
|--------------------------------|--------|

----

**EXHIBIT      E**

**METHODOLOGY      FOR CALCULATION OF MARK TO MARKET (MTM)**

**EXPOSURE**

**Parameters**

**Calculation      of the MtM Exposure**

|  | (i) | the                relevant month On-Peak Forward Price minus the relevant month On-Peak                Initial Mark                Price, multiplied by the relevant month On-Peak Estimated Energy                Quantity; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | the                  relevant month Off-Peak Forward Price minus the relevant month                  Off-Peak                  Initial Mark                  Price, multiplied by the relevant month Off-Peak Estimated Energy                  Quantity; |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | the                  relevant month Capacity Forward Price minus the relevant month                  Capacity                  Initial Mark                  Price, multiplied by the remaining Capacity Obligation per Tranche                  and                  number of                  Tranches award to the Seller. |
|--|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Determination      of On-Peak Forward Prices**

| 1.   | The                Pricing Agent will contact four Reference Market-Makers to obtain                bid and                ask Energy price quotes for PJM Western Hub On-Peak Hours for each                month                of the Delivery Period. Both bid and ask Energy price quotes must                be                available to be considered a valid                quote. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | If                a minimum of two quotes in a particular month are available, the                Pricing                Agent will determine the On-Peak Forward Price by averaging the bid                and                ask Energy prices. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | If                a minimum of two quotes in a particular month are not available,                then the                Pricing Agent will determine the On-Peak Forward Price using an annual                quote, obtain in the same manner above. In this case, the On-Peak                Forward                Price will be calculated as the product of the Off-Peak Price Ratio                and                the annual price quote. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Determination      of Off-Peak Forward Prices**

| 1.   | The                Pricing Agent will contact four Reference Market-Makers to obtain                bid and                ask Energy price quotes for PJM Western Hub Off-Peak Hours for each                month                of the Delivery Period. Both bid and ask Energy price quotes must                be                available to be considered a valid                quote. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | If                a minimum of two quotes in a particular month are available, the                Pricing                Agent will determine the Off-Peak Forward Price by averaging the                bid and                ask Energy prices. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | If                a minimum of two quotes in a particular month are not available,                then the                Pricing Agent will determine the Off-Peak Forward Price using an                annual                quote obtained in the same manner as the in the following manner                obtained                in the same manner as discussed above. In this case, the Off-Peak                Forward                Price will be calculated as the product of the Off-Peak Price Ratio                and                the annual price quote. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Determination      of Capacity Forward Prices**

----

**EXHIBIT      E (Continued)**

----

**EXHIBIT      F**

**UNCONDITIONAL**

**GUARANTY**

| 1.   | Guaranty                of Obligations. |
|----------------|-----------------------------------------|

| (a)   | The                Guarantor hereby irrevocably and unconditionally guarantees, with                effect                from date hereof, the prompt and complete payment when due of all                of                Seller's payment obligations under the POLR SMA (to the extent such                payment obligations exceed the amount of any Performance Assurance                provided to the Buyer by Seller as defined in and in accordance with                the                POLR SMA), whether on scheduled payment dates, when due upon demand,                upon                declaration of termination or otherwise, in accordance with the terms                of                the POLR SMA and giving effect to any applicable grace period, and,                provided only that the Buyer is the prevailing party in any judicial                suit,                action or proceeding arising out of, resulting from, or in any way                relating to this Guaranty, or if by mutual agreement by Guarantor                and                Buyer, all reasonable out-of-pocket costs and expenses incurred by                Buyer                in the enforcement of the Guarantor's obligations or collection under                this                Guaranty, including reasonable attorney's fees and expenses (collectively,                the "Obligations"). [Optional provision: Notwithstanding anything                to the                contrary herein, the liability of the Guarantor under this Guaranty                and                Buyer's right of recovery hereunder for all Obligations is limited                to a                total aggregate amount of $("Guaranty Amount"), where Guaranty Amount                shall be no less than Five Hundred Thousand US Dollars                ($500,000).] |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | The                limitations on liabilities of the Seller set forth in Article 10                of the                POLR SMA shall also apply to the liabilities of the Guarantor                hereunder. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Nature                of Guaranty; Waivers |
|----------------|--------------------------------------------|

| (a)   | This                is a guaranty of payment and not of collection and the Buyer shall                not be                required, as a condition of the Guarantor's liability, to pursue                any                rights which may be available to it with respect to any other person                who                may be liable for the payment of the Obligations. This is not a                performance guaranty and the Guarantor is not obligated to provide                power                under the POLR SMA or this                Guaranty. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | This                    Guaranty is an absolute, unconditional, irrevocable (subject                    to the                    provisions of Section 12 of this Guaranty) and continuing guaranty                    and                    will remain in full force and effect until all of the Obligations                    have                    been indefeasibly paid in full, or until the POLR SMA has been                    terminated,                    whichever comes later. This Guaranty will not be affected by                    any                    surrender, exchange, acceptance, compromise or release by the                    Buyer of any                    other party, or any other guaranty or any security held by it                    for any of                    the Obligations, by any failure of the Buyer to take any steps                    to perfect                    or maintain its lien or security interest in or to preserve its                    rights to                    any security or other collateral for any of the Obligations or                    any                    guaranty, or by any irregularity, unenforceability or invalidity                    of any of                    the Obligations (other than any irregularity, unenforceability                    or                    invalidity of any of the obligations under the POLR SMA resulting                    from the                    conduct of the Buyer) or any part                    thereof. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Except                as to any claims, defenses, rights of set-off or to reductions of                Seller                in respect of its obligations under the POLR SMA, (all of which are                expressly reserved under this Guaranty), the Guarantor's obligations                hereunder shall not be affected, modified or impaired by any counterclaim,                set-off, deduction or defense based upon any claim the Guarantor                may have                against Seller or the Buyer, including: (i) any change in the corporate                existence (including its charter or other governing agreement, laws,                rules, regulations or powers), structure or ownership of Seller or                the                Guarantor; or (ii) any insolvency, bankruptcy, reorganization or                other                similar proceeding affecting Seller or its assets; or (iii) the invalidity                or unenforceability in whole or in part of the POLR SMA; or (iv)                any                provision of applicable law or regulations purporting to prohibit                payment                by Seller of amounts to be paid by it under the POLR SMA (other than                any                law or regulation that eliminates or nullifies the obligations under                the                POLR SMA). |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Guarantor                waives notice of acceptance of this Guaranty, diligence, presentment,                notice of dishonor and protest and any requirement that at any time                any                person exhaust any right to take any action against Seller or their                assets                or any other guarantor or person, provided, however, that any failure                of                Buyer to give notice will not discharge, alter or diminish in any                way                Guarantor's obligations under this Guaranty. The Guarantor waives                all                defenses based on suretyship or impairment of collateral or any other                defenses that would constitute a legal or equitable discharge of                Guarantor's obligations, except any claims or defenses of Seller                in                respect of its obligations under the POLR                SMA. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | The                Buyer at any time and from time to time, without notice to or the                consent                of the Guarantor, and without impairing or releasing, discharging                or                modifying the Guarantor's liabilities hereunder, may (i) to the extent                permitted by the POLR SMA, change the manner, place, time or terms                of                payment or performance of, or other terms relating to, any of the                Obligations; (ii) to the extent permitted by the POLR SMA, renew,                substitute, modify, amend or alter, or grant consents or waivers                relating                to any of the Obligations, or any other guaranties for any Obligations;                (iii) settle, compromise or deal with any other person, including                Seller ,                with respect to any Obligations in such manner as the Buyer deems                appropriate at its sole discretion; (iv) substitute, exchange or                release                any guaranty; or (v) take such actions and exercise such remedies                hereunder as Buyer deems                appropriate. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Representations                and Warranties. The Guarantor hereby represents and warrants                that: |
|----------------|------------------------------------------------------------------------------------------------------------------|

| (a)   | it                is a [limited liability company, corporation, limited partnership,                general                partnership] duly organized, validly existing and in good standing                under                the laws of the jurisdiction of its [formation, organization,                incorporation] and has the [corporate power] [power] and authority                to                conduct the business in which it is currently engaged and enter into                and                perform its obligations under this                Guaranty; |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | it                has the [corporate power] [power] and authority and the legal right                to                execute and deliver, and to perform its obligations under, this Guaranty,                and has taken all necessary [corporate action] [action] to authorize                its                execution, delivery and performance of this                Guaranty; |
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| (c)   | this                Guaranty constitutes a legal, valid and binding obligation of the                Guarantor enforceable in accordance with its terms, except as affected                by                bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium                and other similar laws relating to or affecting the enforcement of                Buyers'                rights generally, general equitable principles and an implied covenant                of                good faith and fair dealing; |
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| (d)   | the                execution, delivery and performance of this Guaranty will not violate                any                provision of any requirement of law or contractual obligation of                the                Guarantor (except                to the extent that any such violation would not reasonably be expected                to                have a material adverse effect on the Guarantor or this                Guaranty); |
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| (e)   | no                consent or authorization of, filing with, or other act by or in respect                of, any arbitrator or governmental authority and no consent of any                other                person (including, without limitation, any stockholder or creditor                of the                Guarantor) is required in connection with the execution, delivery,                performance, validity or enforceability of this Guaranty, other than                any                which have been obtained or made prior to the date hereof and remain                in                full force and effect; and |
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| (f)   | no                litigation, investigation or proceeding of or before any arbitrator                or                governmental authority is pending or, to the knowledge of the Guarantor,                threatened by or against the Guarantor that would have a material                adverse                effect on this Guaranty. |
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| 4.   | Repayments                or Recovery from the Buyer. If any demand is made at any time upon the                Buyer for the repayment or recovery of any amount received by it                in                payment or on account of any of the Obligations, including but not                limited                to upon the bankruptcy, insolvency, dissolution or reorganization                of the                Seller and if the Buyer repays all or any part of such amount by                reason of                any judgment, decree or order of any court or administrative body                or by                reason of any settlement or compromise of any such demand, the Guarantor                (subject to Sections 2 (c) and (d) of this Guaranty) will be and                remain                liable hereunder for the amount so repaid or recovered to the same                extent                as if such amount had never been received originally by the Buyer.                The                provisions of this section will be and remain effective notwithstanding                any contrary action which may have been taken by the Guarantor in                reliance                upon such payment, and any such contrary action so taken will be                without                prejudice to the Buyer's rights hereunder and will be deemed to have                been                conditioned upon such payment having become final and                irrevocable. |
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| 5.   | Enforceability                of Obligations. No modification, limitation or discharge of the                Obligations of Seller arising out of or by virtue of any bankruptcy,                reorganization or similar proceeding for relief of debtors under                federal                or state law will affect, modify, limit or discharge the Guarantor's                liability in any manner whatsoever and this Guaranty will remain                and                continue in full force and effect and will be enforceable against                the                Guarantor to the same extent and with the same force and effect as                if any                such proceeding had not been instituted. The Guarantor waives all                rights                and benefits which might accrue to it by reason of any such proceeding                and                will be liable to the full extent hereunder, irrespective of any                modification, limitation or discharge of the liability of Seller                that may                result from any such proceeding. |
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| 6.   | Postponement                of Subrogation. Only to the extent that, at the relevant time, there                are                Obligations, or other amounts hereunder, that are then due and payable                but                unpaid, the Guarantor postpones and subordinates in favor of the                Buyer any                and all rights which the Guarantor may have to (a) assert any claim                against the Seller based on subrogation rights with respect to payments                made by Guarantor hereunder and (b) any realization on any property                of the                Seller, including participation in any marshalling of the Seller's                assets.                Upon payment of such due and unpaid Obligations, Buyer agrees that                Guarantor shall be subrogated to the rights of Buyer against Seller                to the                extent of Guarantor's payment to                Buyer. |
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| 7.   | Notices.                All notices, demands, requests, consents, approvals and other                communications required or permitted hereunder must be in writing                and will                be effective upon receipt. Such notices and other communications                may be                hand-delivered, sent by facsimile transmission with confirmation                of                delivery and a copy sent by first-class mail, or sent by nationally                recognized overnight courier service, to the addresses for the Buyer                and                the Guarantor set forth below or to such other address as one may                give to                the other in writing for such                purpose: |
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| 8.   | Preservation                of Rights. Except as provided by any applicable statute of                limitations, no delay or omission on the Buyer's part to exercise                any                right or power arising hereunder will impair any such right or power                or be                considered a waiver of any such right or power, nor will the Buyer's                action or inaction impair any such right or power. The Buyer's                rights and                remedies hereunder are cumulative and not exclusive of any other                rights or                remedies which the Buyer may have under other agreements with the                Guarantor, at law or in equity. |
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| 9.   | Illegality.                In case any one or more of the provisions contained in this Guaranty                should be invalid, illegal or unenforceable in any respect, the validity,                legality and enforceability of the remaining provisions contained                herein                shall not in any way be affected or impaired                thereby. |
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| 10.   | Amendments.                No modification, amendment or waiver of any provision of this Guaranty                nor                consent to any departure by the Guarantor therefrom, will be effective                unless made in a writing signed by the Buyer, and then such waiver                or                consent shall be effective only in the specific instance and for                the                purpose for which given. No notice to or demand on the Guarantor                in any                case will entitle the Guarantor to any other or further notice or                demand                in the same, similar or other                circumstance. |
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| 11.   | Entire                Agreement. This Guaranty (including the documents and instruments                referred to herein) constitutes the entire agreement and supersedes                all                other prior agreements and understandings, both written and oral,                between                the Guarantor and the Buyer with respect to the subject matter                hereof. |
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| 12.   | Successors                and Assigns. This Guaranty will be binding upon and inure to the                benefit of the Guarantor and the Buyer and their respective successors                and                permitted assigns. Neither party may assign this Guaranty in whole                or in                part without the other's prior written consent, which consent will                not be                unreasonably withheld or delayed, except that Buyer may at any time                assign                this Guaranty without Guarantor's consent, in the same manner, on                the same                terms and to the same persons as Buyer assigns the POLR SMA in accordance                with Section 16.7(b) of the POLR SMA, and except that this Section                12                shall not limit the Guarantor's right to assign this Guaranty, along                with                substantially all of the Guarantor's assets and business to a successor                entity or Affiliate that assumes all obligations thereunder and (i)                where                the successor Guarantor's Lowest Credit Rating is equal to or greater                than                the Guarantor's Lowest Credit Rating or where the successor Guarantor's                Lowest Credit Rating is equal to or greater than BBB, as rated by                S&P                or Fitch, or Baa2, as rated by Moody's, and (ii) the Seller is in                compliance with Article 14 of                the POLR SMA. The "Lowest Credit Rating" shall mean the lowest of                the                senior unsecured long-term debt ratings determined by Moody's Investor                Services, Inc. (or its successor) ("Moody's"), the Standard & Poor's                Rating Group, a division of McGraw-Hill, Inc., (or its successor)                ("S&P"), or Fitch Investor Service, Inc. (or its successor) ("Fitch")                immediately before such transfer and assumption. Upon any such delegation                and assumption of obligations by a successor Guarantor, the Guarantor                shall be relieved of and fully discharged from all of its obligations                hereunder, whether such obligations arose before or after the date                of such                delegation and assumption. |
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| 13.   | Interpretation.                In this Guaranty, unless the Buyer and the Guarantor otherwise agree                in                writing, the singular includes the plural and the plural the singular;                references to statutes are to be construed as including all statutory                provisions consolidating, amending or replacing the statute referred                to;                the word "or" shall be deemed to include "and/or", the words "including",                "includes" and "include" shall be deemed to be followed by the words                "without limitation"; and references to sections or exhibits are                to those                of this Guaranty unless otherwise indicated. Section headings in                this                Guaranty are included for convenience of reference only and shall                not                constitute a part of this Guaranty for any other                purpose. |
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| 14.   | Governing                Law. |
|-----------------|-------------------------------|

| (a)   | This                Guaranty has been delivered to and accepted by the Buyer. THIS GUARANTY                WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BUYER AND                THE                GUARANTOR DETERMINED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH                OF                PENNSYLVANIA, EXCLUDING ITS CONFLICT OF LAWS                RULES. |
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| (b)   | The                Guarantor hereby irrevocably consents to the non-exclusive jurisdiction                of                any federal court in the Commonwealth of Pennsylvania, but in the                event                that the Guarantor and the Buyer determine in good faith that jurisdiction                does not lay with such court or that such court refuses to exercise                jurisdiction or venue over the Guarantor and the Buyer or any claims                made                pursuant to this Guaranty, then the Guarantor and the Buyer agree                to                submit to the non-exclusive jurisdiction of the Pennsylvania state                courts;                provided that nothing contained in this Guaranty will prevent the                Buyer                from bringing any action, enforcing any award or judgment or exercising                any rights against the Guarantor individually, against any security                or                against any property of the Guarantor within any other county, state                or                other foreign or domestic jurisdiction. The Guarantor acknowledges                and                agrees that the venue provided above is the most convenient forum                for both                the Buyer and the Guarantor. The Guarantor waives any objection to                venue                and any objection based on a more convenient forum in any action                instituted under this Guaranty. |
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| 15.   | WAIVER                OF JURY TRIAL. THE GUARANTOR AND BUYER IRREVOCABLY WAIVE ANY AND ALL                RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY                NATURE                RELATING TO THIS GUARANTY, ANY DOCUMENTS EXECUTED IN CONNECTION WITH                THIS                GUARANTY OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS.                THE                GUARANTOR AND BUYER ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING                AND                VOLUNTARY. |
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| 16.   | Term.                This Guaranty shall survive termination of the POLR SMA and remain                in full                force and effect until all amounts due hereunder, including all of                the                Obligations, have been paid or performed in                full. |
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| 17.   | Stay                of Acceleration Ineffective with Respect to Guarantor. If acceleration                of the time for payment of any amount payable by Seller under the                POLR SMA                is stayed upon the insolvency, bankruptcy or reorganization of Seller,                all                such amounts otherwise subject to acceleration or required to be                paid upon                an early termination pursuant to the terms of the POLR SMA shall                nonetheless be payable by the Guarantor hereunder on written demand                by                Buyer. |
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**EXHIBIT      G**

**FORM      OF NOTICE**

| Any                notices required under this Agreement shall be made as                follows: |
|---------------------------------------------------------------------------------------------------|

| BUYER: **All                Notices:**Street:                **Two North Ninth Street**City/State/Zip:                **Allentown, PA 18101**Attn:                **Douglas R. Stinner**Facsimile:                **610-774-5694**Duns:                **00-790-9427**Federal                Tax ID Number: **23-0959590** **Invoices:** Attn:                **Douglas R. Stinner**Phone:                **610-774-5568**Facsimile:**610-774-5694** **Scheduling:** Attn:                  N/APhone:                  N/AFacsimile:                  N/A **Payments:** Attn:                  **John M. George**Phone:                  **610-774-6053**Facsimile:                  **610-774-7413** **Wire                  Transfer:** BNK:                  **Mellon Bank**ABA:ACCT: **Credit                  and Collections:** Attn:                  **John M. George**Phone:                  **610-774-6053**Facsimile:                  **610-774-7413** | SELLER:                 **All****Notices:** Street:City/State/ZipAttn:Facsimile:Duns:Federal                  Tax ID Number: **Invoices:** Attn:Phone:Facsimile: **Scheduling:** Attn:Phone:Facsimile: **Payments:** Attn:Phone:Facsimile: **Wire                  Transfer** BNK:ABA:ACCT: **Credit                  and Collections:** Attn:Phone:Facsimile: |
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| **With                additional Notices of an****Event                of Default to:** Attn:                **Douglas R. Stinner**Phone:                **610-774-5568**Facsimile:                **610-774-5694** | **With                Additional Notices of an****Event                of Default to:** Attn:Phone:Facsimile: |
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**EXHIBIT      H**

**PJM      DECLARATION OF AUTHORITY**

**("PARTY A") **
**("PARTY B") **

**RECITALS:**

**DECLARATION:**

| (a)   | PARTY                B hereby certifies that in all activities with PJM regarding PARTY                B's                provision of energy, capacity, ancillary services, scheduling and                procurement of transmission service, congestion management and all                other                required products and services necessary to serve the load obligation                assumed by PARTY B, PARTY B shall be billed and be primarily liable                to PJM                for all costs associated in its procurement of such products and                services;                provided, however, that charges, for PPL Electric customers, for                Network                Integration Transmission Service, Transitional Market Expansion assessed                to Network Integration Transmission Service customers, Expansion                Integration assessed to Network Integration Transmission Service                customers, and any Transmission Congestion credits remaining at the                end of                a planning period for such load shall be billed to PARTY A and remain                the                sole and primary responsibility of PARTY                A. |
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| (a)   | Each                of PARTY A and PARTY B recognizes and accepts that PJM is relying                on the                truth, accuracy and completeness of the certifications herein made                in                making its assessments as to creditworthiness and in assuring PJM's                own                compliance with its tariff, operating agreement, reliability agreement                and                business practices. |
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| (b)   | Each                of PARTY A and PARTY B recognizes and accepts that each has a continuing                duty to notify PJM if and when the certifications herein made cease                to be                accurate or complete. Until such time as PJM receives written notification                of any changes to such certifications, signed by both PARTY A and                PARTY B,                PJM shall be entitled to rely perpetually on this Declaration as                governing                its relationship with PARTY A and PARTY B as to the subject matter                of this                Declaration. Any written notice of changes to the certifications                herein                made must be provided to PJM at least thirty days in advance of their                effectiveness. |
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| (c)   | Each                of PARTY A and PARTY B recognize and acknowledge that PJM will receive                and                rely on individually modeled POLR Seller accounts that contain only                zonal-specific POLR load to manually adjust the accounts to move                the                applicable billing line items' amounts in their entirety from the                applicable POLR Seller's account to the applicable EDC's                account. |
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| (d)   | PARTY                A and PARTY B recognize and acknowledge that they have entered into                a                Provider of Last Resort Supply Master Agreement (POLR SMA) and that                this                Certification is not intended in any way to change, revise or redistribute                the rights and obligations of the PARTY A or PARTY B under the POLR                SMA.                If this Certification is determined to be inconsistent with any provision                of the POLR SMA, with respect to the rights and obligations of PARTY                A and                PARTY B under the POLR SMA, the provisions of the POLR SMA shall                be                controlling on PARTY A and PARTY B. |
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| 3. | Duration.                Each of PARTY A and PARTY B acknowledge and agree that this Declaration                shall terminate upon the termination of the POLR SMA in accordance                with                its terms. To this end, within 30 days prior to the termination of                the                POLR SMA in accordance with its terms or as soon thereafter as is                practicable, each of PARTY A and PARTY B will provide written notice                to                PJM of the termination of this                Declaration. |
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| **PARTY                A** _______________________________ NAME:                _______________________________ TITLE:                ______________________________ | **PARTY                B  _________________________** NAME:                ____________________________  TITLE:                _____________________________  |
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