Exhibit 10.4
                         RESTATED TRANSMISSION AGREEMENT

                                     BETWEEN

                                   PACIFICORP

                                       AND

                         ARIZONA PUBLIC SERVICE COMPANY

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                                Index of Sections

                                                                       Page

PARTIES                    ..............................................1
RECITALS                   ..............................................1
AGREEMENT                  ..............................................4
Section 1.                 Term..........................................4
Section 2.                 Regulatory Approval and Termination...........4
Section 3.                 Phoenix/Mead Line.............................5
Section 4.                 Navajo loop-In Project/Alternate
                           Arrangements..................................5

S7ection 5.                Transmission Interconnection with
                           Northwest Utilities...........................5

Section 6.                 PacifiCorp Transfer Rights....................7

Section 7.                 Western Area Power Administration
                           Transmission Rights...........................7

Section 8.                 Scheduling....................................9

Section 9.                 Uncontrollable Forces.........................9

Section 10.                Indemnification..............................10

Section 11.                Assignment...................................11

Section 12.                Miscellaneous................................11


                                        i

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                         RESTATED TRANSMISSION AGREEMENT


                                     PARTIES

          The Parties to this  Restated  Transmission  Agreement  ("Agreement"),
dated this 5th day of April,  1995, are  PacifiCorp,  an Oregon  corporation and
Arizona  Public  Service  Company,  an  Arizona  corporation  ("APS").  APS  and
PacifiCorp are sometimes  referred to collectively as "Parties" and individually
as "Party."

                                    RECITALS

          WHEREAS,   PacifiCorp   and  APS  are   engaged  in  the   generation,
transmission and distribution of electric power and energy; and
          WHEREAS,  the Parties have resolved to enhance the efficient operation
of their respective  systems by taking advantage of the diversity of their loads
and generation facilities; and
          WHEREAS,  on September 21, 1990, the Parties  entered into a series of
contracts, including a Transmission Agreement, as amended by an October 11, 1990
Letter  Agreement and an October 1, 1993  Amendment No. 1 between the Parties to
achieve such efficiencies; and
          WHEREAS,   the  Parties  intend  to  continue  to  study  and  discuss
additional  arrangements  which will enhance efficiency and inure to the benefit
of their  customers  and,  to that end,  have  executed  Amendment  No. 1 to the
Long-Term Power Transactions Agreement and Asset Purchase and Power Exchange

1 - RESTATED TRANSMISSION AGREEMENT

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Agreement  ("Amendment  No. 1") of even date herewith and have  determined  that
this Restated  Transmission  Agreement  should be  substituted  for the original
Transmission Agreement, as amended; and
          WHEREAS,  PacifiCorp owns a 345 kV transmission line from Sigurd, Utah
that  interconnects  at the Utah/Nevada  border with a 345 kV transmission  line
owned by the Nevada Power  Company that is  interconnected  with the Harry Allen
Substation in Southern Nevada which collectively are hereinafter  referred to as
the "Sigurd/Harry Allen line;" and
          WHEREAS,  PacifiCorp  and Nevada Power  Company  have had  discussions
regarding  the potential of  significantly  increasing  the transfer  capability
between Nevada and Utah either by upgrading the existing Sigurd/Harry Allen line
or constructing a parallel line (hereinafter  referred to as the "Sigurd Upgrade
Project"); and
          WHEREAS,  APS, along with a number of other entities, is a participant
in the Mead-Phoenix  project which, among other things, is expected to result in
the construction of a 500 kV transmission line from Phoenix, Arizona to the Mead
Substation in Nevada (hereinafter referred to as the "Phoenix/Mead line") and an
interconnection  of the Mead Substation and the Harry Allen  Substation at a new
substation in Southern Nevada presently referred to as "Marketplace"; and

2 - RESTATED TRANSMISSION AGREEMENT

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          WHEREAS, it is expected that as a result of the Mead- Phoenix Project,
APS will have at least 200 MW of bidirectional firm transmission  rights between
Phoenix and Marketplace; and
          WHEREAS, the Sigurd Substation is interconnected to transmission lines
going north to  interconnect  with Montana Power Company and Idaho Power Company
at the Brady  Substation,  and  potentially  The Washington  Water Power Company
(hereinafter referred to as the "Northwest Utilities"),  and Idaho Power Company
at the Borah Substation; and
          WHEREAS,  at such  time as the  Mead-Phoenix  Project  and the  Sigurd
Upgrade Project are completed,  there will exist a major new  transmission  path
interconnecting  utilities  in the  Desert  Southwest  with  PacifiCorp  and the
Northwest Utilities; and
          WHEREAS,   APS  and  other  entities  in  the  Desert   Southwest  are
considering interconnecting the Navajo Generating Station switchyard to the Glen
Canyon Generating  Station  switchyard,  hereinafter  referred to as the "Navajo
Loop-In Project"; and
          WHEREAS, the Sigurd Upgrade Project and the Navajo Loop-In Project are
not anticipated to be completed in a timely fashion, if at all; and
          WHEREAS,  APS wishes to engage in the  purchase,  sale and exchange of
power and energy with Northwest Utilities and PacifiCorp wishes to engage in the
purchase, sale and exchange of power with utilities in the Desert Southwest; and

3 - RESTATED TRANSMISSION AGREEMENT

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          WHEREAS,  APS and PacifiCorp are concurrently with the signing of this
Agreement,  contracting with the Western Area Power  Administration  ("Western")
for transmission service between the Glen Canyon 230 kV Substation and Western's
230 kV Pinnacle Peak Substation;

          NOW,  THEREFORE,  in  consideration  of the mutual covenants set forth
below, the Parties agree as follows:

                                    AGREEMENT

     1. Term
          This Agreement  shall be effective and shall replace the  Transmission
Agreement in its entirety  upon (i)  execution  of a Firm  Transmission  Service
Contract  between APS,  PacifiCorp and the U.S.  Department of Energy,  Western,
Salt Lake City Area Integrated  Projects  ("Western  Transmission  Contract") as
described  in Section 7 and (ii) its  acceptance  or approval  for filing by the
Federal Energy Regulatory  Commission ("FERC"),  and shall terminate on the same
date that the Asset Purchase and Power Exchange  Agreement  dated  September 21,
1990 ("Asset Agreement") between the Parties terminates.

     2. Regulatory Approval and Termination
          2.01 PacifiCorp shall file this Agreement and Amendment No. 1 with the
FERC. APS shall file a letter of concurrence  supporting  PacifiCorp's filing of
this  Agreement  and  Amendment No. 1 with the FERC. If the FERC issues an order
not accepting either agreement for filing in their entirety and without material
change, the Parties shall exercise best

4 -            RESTATED TRANSMISSION AGREEMENT

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efforts  to amend the  agreements  to comply  with the FERC  order or  negotiate
replacement  agreements providing similar benefits to both Parties. In the event
such amendment or replacement  agreements are not executed by the Parties within
sixty days  following  the FERC's  issuance of such order,  this  Agreement  and
Amendment  No. 1 shall  terminate  and be of no further  force or effect and the
Transmission  Agreement  dated as of September  21,  1990,  shall remain in full
force and effect.

          2.02 The  rates  for  service  specified  herein,  and the  provisions
contained  herein for services to be provided  without  separate  charge,  shall
remain in effect  for the term of this  Agreement  and shall not be  subject  to
change  through  application  to the FERC pursuant to Section 205 of the Federal
Power Act absent the agreement of PacifiCorp and Arizona.

     3. Phoenix/Mead Line
          APS shall work in good faith with other affected entities to cause the
Phoenix/Mead Line to be in service by the end of 1996.

     4. Navajo Loop-In Project/Alternate Arrangements
          If the Navajo  Loop-In  Project is completed,  or if APS or PacifiCorp
construct  transmission  facilities or enter into other commercial  arrangements
that negate APS' or PacifiCorp's  need to maintain its contractual  rights under
the Western  Transmission  Contract,  either Party may, upon mutual agreement of
the Parties, which agreement shall not be unreasonably  withheld,  terminate its
participation in the Western

5 - RESTATED TRANSMISSION AGREEMENT

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Transmission  Contract.  A  Party  shall  not  be  required  to  agree  to  such
termination unless,  upon its sole determination,  such Party determines that it
will not incur any  additional  costs or there  will be no  adverse  operational
impacts to its system as a result of such termination.

     5. Transmission Interconnection with Northwest Utilities

          5.01 During the term of this  Agreement,  APS shall have 100 MW of net
bidirectional firm transfer rights through  PacifiCorp's system between the Glen
Canyon/Four  Corners  Substations  and the  Borah/Brady  Substations  in  Idaho;
however,  the sum of North-bound  transfers and South-bound  transfers shall not
exceed 300 MW in any hour.

          5.02 Upon the later of: (i) the completion of the Phoenix/Mead Line or
(ii) May 15, 1997, and for the balance of the term of this Agreement,  APS shall
have an additional firm right to transfer 150 MW from the Borah/Brady Substation
over  PacifiCorp's  system  to the  Four  Corners/Glen  Canyon  Substations.  In
addition to APS' rights to transfer 150 MW from the  Borah/Brady  Substations to
the Four  Corners/Glen  Canyon  Substations,  APS  shall  have the right to make
and/or  accept  deliveries  at the Glen Canyon  Substation  as  described in the
Western Transmission Contract.

          5.03  PacifiCorp  shall provide the services  described in Subsections
5.01 and 5.02 without charge to APS.

6 - RESTATED TRANSMISSION AGREEMENT

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     6. PacifiCorp Transfer Rights
          6.01 Upon the later of: (i) the completion of the Phoenix/Mead Line or
(ii) May 15, 1997, and for the balance of the term of this Agreement, PacifiCorp
shall have a firm right to deliver up to 150 MW from the Phoenix terminal of the
Phoenix/Mead Line to the Mead Substation (or to the Marketplace  Substation,  if
such is  constructed)  from APS' firm rights.  PacifiCorp's  150 MW Phoenix/Mead
delivery rights are in addition to a 350 MW net scheduling  right provided under
Section 15 of the Asset Agreement. In addition to PacifiCorp's rights to deliver
up to 150 MW from the  Phoenix  terminal of the  Phoenix/  Mead line to the Mead
Substation  (or  to  the  Marketplace  Substation,   if  such  is  constructed),
PacifiCorp shall have the right to make and/or accept deliveries at the Pinnacle
Peak Substation as described in the Western Transmission Contract.
          6.02 Except as provided for in Section 16 of the Asset Agreement,  APS
shall provide the  transmission  services  described in Subsection  6.01 without
charge to PacifiCorp.
     7. Western Area Power Administration Transmission Rights
          7.01 Except as provided for in Section 4,  effective  the later of (i)
May 15, 1997 or (ii) the completion of the  Phoenix-Mead  Transmission  Project,
and for the balance of the term of this  Agreement,  the Parties shall  contract
with  Western  for firm,  bidirectional  transmission  service  between the Glen
Canyon Substation and Western's Pinnacle Peak Substation in amounts necessary to
allow for the transfers specified in

7 - RESTATED TRANSMISSION AGREEMENT

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Sections 5 and 6 and to allow for the seasonal  exchange provided in Section 3.3
of the  Long-term  Power  Transaction  Agreement  dated  September  21, 1990, as
amended.  The  cost  of the  aforementioned  transmission  service  (hereinafter
referred to as "Western  Transfer  Rights") shall be shared equally  between the
Parties unless otherwise mutually agreed.

          7.02 APS shall have first priority use of the north- to-south transfer
capability  available from the Western  Transfer  Rights.  PacifiCorp shall have
first priority use of the south-to-north  transfer capability available from the
Western Transfer Rights.
          7.03  At  such  times  as  either  Party  is  not  making  use  of its
first-priority  use of the Western  Transfer  Rights as set forth in  Subsection
7.02,  such  use  shall  be  made  available  to the  other  Party  for  nonfirm
transactions  at no charge.  It is understood that use by one Party of the other
Party's Western Transfer  rights,  unless  otherwise  mutually  agreed,  is on a
nonfirm  basis and such use may be  interrupted  or  curtailed by the Party with
first-priority rights at any time.
          7.04 At such times as some or all of the Western  Transfer  Rights are
not  available,  the Parties  shall use best  efforts to  reschedule  deliveries
previously  scheduled  under the  Western  Transfer  Rights to  mutually  agreed
alternate point(s) of delivery; provided, however, a Party shall not be required
to interrupt or curtail its other firm schedules at any such alternate  point(s)
of delivery in order to accommodate

8 - RESTATED TRANSMISSION AGREEMENT

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deliveries previously scheduled under the Western Transmission
Contract.
     8. Scheduling
          PacifiCorp and APS shall  preschedule  their transfer  requirements no
later than 1000 hours MST on each work day observed by both Parties  immediately
preceding  the  day(s)  of  delivery,  or as  otherwise  mutually  agreed by the
Parties'  dispatchers  or  schedulers.   The  Parties  shall  make  delivery  in
accordance with  preschedules,  unless otherwise  mutually agreed,  which comply
with  the  applicable  transfer  rights  set  forth  in  Sections  5 and 6.  All
deliveries  shall be deemed to be made  during  the hours and in the  amounts as
accounted  for in the APS and  PacifiCorp  system  logs.  However,  if scheduled
deliveries are interrupted due to an Uncontrollable  Force as defined in Section
9, such schedules shall be adjusted to reflect such interruption.
     9. Uncontrollable Forces
          Neither Party to this  Agreement  shall be considered to be in default
in the  performance of any  obligation  hereunder if failure to perform shall be
due to an Uncontrollable Force. The term "Uncontrollable  Force" means any cause
beyond the control of the Party affected, including, but not limited to, failure
of facilities, flood, earthquake, storm, fire, lightening,  epidemic, war, riot,
civil  disturbance,  labor  disturbance,  sabotage,  restraint by court order or
public authority, which by exercise of due foresight, such Party could

9 - RESTATED TRANSMISSION AGREEMENT

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not  reasonably  have been  expected  to avoid,  and  which by  exercise  of due
diligence  would not be able to overcome.  The Parties  shall not,  however,  be
relieved of  liability  for  failure of  performance  if such  failure is due to
causes arising out of removable or remediable causes which it fails to remove or
remedy  with  reasonable  dispatch.  Any Party  rendered  unable to fulfill  any
obligation by reason of an Uncontrollable  Force shall exercise due diligence to
remove such inability with all reasonable  dispatch.  Nothing  contained herein,
however,  shall be  construed  to  require a Party to prevent or settle a strike
against its will.
     10. Indemnification
          Neither  Party ("First  Party") shall be liable,  whether in warranty,
tort, or strict liability, to the other Party ("Second Party") for any injury or
death to any  person,  or for any loss or damage to any  property,  caused by or
arising out of any electric  disturbance of the First Party's  electric  system,
whether  or not  such  electric  disturbance  resulted  from the  First  Party's
negligent act or omission.  Each Second Party releases the First Party from, and
shall indemnify and hold harmless the First Party from, any such  liability.  As
used in this  Section,  (1) the term  "Party"  means,  in addition to such Party
itself, its agents,  directors,  officers, and employees;  (2) the term "damage"
means all damage,  including  consequential  damage;  and (3) the term "persons"
means any  person,  including  those not  connected  with  either  Party to this
Agreement.

10 - RESTATED TRANSMISSION AGREEMENT

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     11. Assignment

          Neither  Party shall assign this  Agreement  without the prior written
consent of the other Party, except:
               (a) to any corporation  into which or with which the Party making
the  assignment  is merged  or  consolidated  or to which  the  Party  transfers
substantially all of its assets;
               (b) to any person or entity  wholly  owning,  wholly owned by, or
wholly owned in common with the Party making the assignment.
                  Subject to the foregoing  restrictions  in this Section,  this
Agreement  shall be binding upon,  inure to the benefit of and be enforceable by
the Parties and their respective successors and assigns.
     12. Miscellaneous
          12.01  Amendment.  This Agreement may be amended only by an instrument
in writing  executed by the Parties which expressly refers to this Agreement and
states that it is an amendment hereto.
          12.02  Section and  Paragraph  Headings.  The  section  and  paragraph
headings  contained in this Agreement are for reference  purposes only and shall
not in any way affect the meaning or interpretation of this Agreement.
          12.03 Waiver.  Any of the terms or conditions of this Agreement may be
waived at any time and from time to time, in writing,  by the Party  entitled to
the benefit of such terms or conditions.

11 - RESTATED TRANSMISSION AGREEMENT

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          12.04  Choice  of Law.  This  Agreement  shall  be  subject  to and be
construed under the laws of the State of Arizona.
          12.05   Notices.   All   notices,   requests,   demands,   and   other
communications  given by APS or  PacifiCorp  shall be in  writing  and  shall be
deemed to have been duly given when delivered  personally or when deposited into
the United States mail, to the following addresses:

                    To        APS:  Arizona  Public  Service  Company 
                              Corporate Secretary 
                              P.O. Box 53999 
                              Phoenix, AZ 85072-3999

         To PacifiCorp:       PacifiCorp
                              Sr. Vice President,
                              Wholesale Transactions & Transmission
                              700 N.E. Multnomah Blvd.
                              Portland, OR  97232

or to such other address as APS or PacifiCorp may designate in writing.

          12.06  Integrated  Agreement.  This Agreement  constitutes  the entire
agreement  between the Parties hereto,  and supersedes all prior  agreements and
understandings,  oral and written,  among the Parties hereto with respect to the
subject matter hereof.

12 - RESTATED TRANSMISSION AGREEMENT

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          IN WITNESS  WHEREOF,  the Parties have signed this Agreement as of the
date first above written.

                                    Pacificorp


                                     By  Brian D.Sickels
                                        ---------------------------------------
                                     Title: Vice President, Power Systems
                                           ------------------------------------



                                     Arizona Public Service Company


                                     By  Jack E. Davis
                                        ---------------------------------------

                                     Title: Vice President,
                                            Generation and Transmission
                                           ------------------------------------



13 -            RESTATED TRANSMISSION AGREEMENT