<PAGE>

                                                                    EXHIBIT 10.5

PPL EnergyPlus, LLC                                         Original Sheet No. 1
Rate Schedule FERC No. 9




                           GENERATION SUPPLY AGREEMENT

                                     BETWEEN

                       PPL ELECTRIC UTILITIES CORPORATION

                                       AND

                               PPL ENERGYPLUS, LLC

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       1

<PAGE>

PPL EnergyPlus, LLC                                         Original Sheet No. 2
Rate Schedule FERC No. 9


                                TABLE OF CONTENTS

ARTICLE 1: DEFINITION OF TERMS ..............................................  7
1.1      Affiliate ..........................................................  7
1.2      Alternate Supplier .................................................  7
1.3      Assumed Ongoing POLR Revenues ......................................  7
1.4      Bankrupt ...........................................................  7
1.5      Business Day .......................................................  8
1.6      Capacity Deficiency Changes ........................................  8
1.7      CDS ................................................................  8
1.8      Collateral Termination Payment .....................................  8
1.9      Collateral Threshold ...............................................  8
1.10     Company Use Energy .................................................  9
1.11     Credit Rating ......................................................  9
1.12     Cross Default Amount ...............................................  9
1.13     Delivery Point .....................................................  9
1.14     Early Termination Date .............................................  9
1.15     EGS ................................................................  9
1.16     Energy .............................................................  9
1.17     Equitable Defenses ................................................. 10
1.18     FERC ............................................................... 10
1.19     Firm ............................................................... 10
1.20     FitchIBCA .......................................................... 10
1.21     Force Majeure ...................................................... 10
1.22     Generation Shopping Credits ........................................ 10
1.23     Good Utility Practice .............................................. 11
1.24     Gross Receipts Tax ................................................. 11
1.25     Guarantor .......................................................... 11
1.26     Imbalance Charges .................................................. 11
1.27     Interest Rate ...................................................... 11
1.28     Letter of Credit ................................................... 12
1.29     Load Management Actions ............................................ 12
1.30     Load Management Energy ............................................. 12
1.31     Load Management Energy Cost ........................................ 12
1.32     Market Value of Energy and Unforced Capacity ....................... 12
1.33     Monthly Generation Revenue ......................................... 13
1.34     Moody's ............................................................ 13
1.35     Performance Assurance .............................................. 13
1.36     PJM ................................................................ 13
1.37     PJM Ancillary Services ............................................. 13
1.38     PJM Standards ...................................................... 14
1.39     PJM Tariff ......................................................... 14


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       2

<PAGE>

PPL EnergyPlus, LLC                                         Original Sheet No. 3
Rate Schedule FERC No. 9


1.40     POLR or Provider of Last Resort .................................... 14
1.41     POLR Capacity Obligation ........................................... 14
1.42     POLR Service ....................................................... 14
1.43     POLR Supply Amount ................................................. 15
1.44     PPL Electric Call Option ........................................... 15
1.45     PPL Electric Downgrade ............................................. 15
1.46     PPL EnergyPlus ..................................................... 16
1.47     PPL Zone ........................................................... 16
1.48     Primary Supplier ................................................... 16
1.49     PUC ................................................................ 16
1.50     RAA ................................................................ 16
1.51     Replacement Price .................................................. 16
1.52     Restructuring Settlement ........................................... 17
1.53     Retail Customers ................................................... 17
1.54     Retail Tariff ...................................................... 17
1.55     RFP ................................................................ 17
1.56     S&P ................................................................ 17
1.57     Sales Price ........................................................ 17
1.58     Schedule ........................................................... 18
1.59     Supplier Downgrade Event ........................................... 18
1.60     Supplier's Percentage .............................................. 18
1.61     Taxes .............................................................. 18
1.62     Termination Payment ................................................ 18
1.63     Third-Party Ancillary Services ..................................... 19
1.64     Transmission Provider .............................................. 19
1.65     Unforced Capacity .................................................. 19

ARTICLE 2: TERM ............................................................. 19
2.1      Term ............................................................... 19
2.2      Provisions Surviving Termination ................................... 19

ARTICLE 3: DESCRIPTION OF SERVICES .......................................... 20
3.1      Energy ............................................................. 20
3.2      Unforced Capacity .................................................. 20
3.3      Transmission Service ............................................... 22
3.4      Ancillary Services ................................................. 23
3.5      Primary Supplier ................................................... 23
3.6      Supply to Customers Under New Rate Schedules or Rate Riders ........ 23

ARTICLE 4: FORECASTING AND SCHEDULING ....................................... 24
4.1      Energy Forecasts ................................................... 24


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001



                                       3

<PAGE>

PPL EnergyPlus, LLC                                         Original Sheet No. 4
Rate Schedule FERC No. 9


4.2      Reliance on Forecasts .............................................. 24
4.3      Scheduling ......................................................... 24

ARTICLE 5: TAXES ............................................................ 25
5.1      Taxes .............................................................. 25

ARTICLE 6: RECONCILIATIONS AND PAYMENTS ..................................... 25
6.1      Reconciliation with PJM ............................................ 25
6.2      Payment of Monthly Generation Revenue .............................. 26
6.3      Transition Periods ................................................. 26
6.4      Advance Payment .................................................... 27
6.5      Distribution of Capacity Deficiency Revenues ....................... 27
6.6      PPL Electric Resettlement Process .................................. 28
6.7      Payment Disputes ................................................... 28

ARTICLE 7: FORCE MAJEURE .................................................... 28
7.1      Force Majeure ...................................................... 28
7.2      Force Majeure Event ................................................ 29
7.3      Transmission Service ............................................... 29
7.4      Force Majeure Procedures ........................................... 29

ARTICLE 8: CREDITWORTHINESS AND SECURITY .................................... 30
8.1      Supplier Creditworthiness and Security ............................. 30
8.2      PPL Electric Creditworthiness and Security ......................... 32

ARTICLE 9: REPRESENTATIONS AND WARRANTIES ................................... 34
9.1      Representations .................................................... 34
9.2      Duration ........................................................... 35

ARTICLE 10: EVENTS OF DEFAULT AND REMEDIES .................................. 35
10.1     Parties - Events of Default ........................................ 35
10.2     Guarantors - Events of Default ..................................... 36
10.3     Remedies ........................................................... 36
10.4     Declaration of an Early Termination Date and Calculation
                          Of Termination Payment ............................ 37
10.5     Failure to Deliver/Accept .......................................... 38

ARTICLE 11: DISAGREEMENTS ................................................... 39
11.1     Informal Resolution ................................................ 39
11.2     Arbitration ........................................................ 39
11.3     FERC Jurisdiction .................................................. 40


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       4

<PAGE>

PPL EnergyPlus, LLC                                         Original Sheet No. 5
Rate Schedule FERC No. 9


ARTICLE 12: INDEMNIFICATION AND LIABILITY ................................... 41
12.1     Title Transfer ..................................................... 41
12.2     Supplier's Indemnification of PPL Electric ......................... 41
12.3     PPL Electric's Indemnification of Supplier ......................... 42
12.4     Indemnification Procedures ......................................... 42
12.5     Limitation of Liability ............................................ 42
12.6     Limitation of Liability for Retail Tariff Actions .................. 43
12.7     Limitation of Liability for Outages and Reliability Actions ........ 44
12.8     RFP Information .................................................... 44

ARTICLE 13: AUDITING AND CONFIDENTIALITY .................................... 45
13.1     Auditing ........................................................... 45
13.2     PJM Requirements ................................................... 45
13.3     Confidentiality .................................................... 45

ARTICLE 14: ASSIGNMENT ...................................................... 46
14.1     Assignment ......................................................... 46
14.2     Release of Rights .................................................. 46
14.3     Non-complying Transfers ............................................ 47
14.4     Successors and Assigns ............................................. 47

ARTICLE 15: REGULATORY ...................................................... 47
15.1     Regulatory Approvals ............................................... 47
15.2     EGS Status ......................................................... 48
15.3     Future Laws ........................................................ 48
15.4     Regulatory Risk .................................................... 48
15.5     Sections 205 and 206 of the Federal Power Act ...................... 49

ARTICLE 16: GENERAL PROVISIONS .............................................. 49
16.1     Governing Law and Venue ............................................ 49
16.2     Notices ............................................................ 49
16.3     Relationship ....................................................... 50
16.4     Entire Agreement ................................................... 50
16.5     Waiver ............................................................. 51
16.6     Interpretation of Agreement ........................................ 51
16.7     Counterparts ....................................................... 51
16.8     Severability ....................................................... 51
16.9     No Third Party Beneficiaries ....................................... 52


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       5

<PAGE>

PPL EnergyPlus, LLC                                         Original Sheet No. 6
Rate Schedule FERC No. 9


                           GENERATION SUPPLY AGREEMENT
                                     BETWEEN
                       PPL ELECTRIC UTILITIES CORPORATION
                                       AND
                              PPL ENERGY PLUS, LLC

                                    PREAMBLE

         This GENERATION SUPPLY AGREEMENT ("Agreement") is made and entered into
this 20th day of June, 2001, between PPL ELECTRIC UTILITIES CORPORATION, a
Pennsylvania corporation ("PPL Electric"), and PPL ENERGY PLUS, LLC, a
Pennsylvania limited liability company ("Supplier") (PPL Electric and Supplier
are sometimes referred to herein individually as a "Party" and collectively as
the "Parties").

                                    RECITALS

         WHEREAS, the Pennsylvania Public Utility Commission approved a
settlement of PPL Electric's restructuring proceeding in Docket No. R-00973954
on August 27, 1998, which among other things required that PPL Electric serve as
the Provider of Last Resort ("POLR") until December 31, 2009 for retail electric
customers in PPL Electric's service territory that do not take service from
other suppliers;

         WHEREAS, the sale of PPL Electric's generating facilities and other
assets require that PPL Electric obtain from a third party the capacity and
energy necessary to meet its POLR obligations;

         WHEREAS, Supplier has or is willing to secure the wholesale capacity
and energy necessary to meet one hundred percent (100%) of PPL Electric's POLR
obligations;

         WHEREAS, PPL Electric desires to purchase and Supplier desires to sell
to PPL Electric the wholesale capacity and energy necessary to meet one hundred
percent 100% of PPL Electric's POLR obligation; and

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       6

<PAGE>

PPL EnergyPlus, LLC                                         Original Sheet No. 7
Rate Schedule FERC No. 9


     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, and intending to be legally bound, the Parties agree as
follows:

                         ARTICLE 1: DEFINITION OF TERMS

1.1       Affiliate means, with respect to any person or entity, any other
          ---------
          person or entity (other than an individual) that, directly or
          indirectly, through one or more intermediaries, controls, or is
          controlled by, or is under common control with, such person or entity.
          For this purpose, there shall be a rebuttable presumption that
          "control" is established by the direct or indirect ownership of ten
          percent or more of the outstanding capital stock or other equity
          interests having ordinary voting power.

1.2       Alternate Supplier means an EGS that is providing retail generation
          ------------------
          service to a PPL Electric customer that has elected a new supplier.

1.3       Assumed Ongoing POLR Revenue means the value of Monthly Generation
          ----------------------------
          Revenue for the period used to determine the Collateral Termination
          Payment, as established by agreement of the Parties pursuant to
          Section 1.8.

1.4       Bankrupt means with respect to any entity, such entity: (a) files a
          --------
          petition or otherwise commences, authorizes or acquiesces in the
          commencement of a proceeding or cause of action under any bankruptcy,
          insolvency, reorganization or similar law, or has any such petition
          filed or commenced against it; (b) makes an assignment or any general
          arrangement for the benefit of creditors; (c) otherwise becomes
          bankrupt or insolvent (however evidenced); (d) has a liquidator,
          administrator, receiver, trustee, conservator or similar official
          appointed with respect to it or any substantial portion of its
          property or assets; or (e) is generally unable to pay its debts as
          they fall due.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       7

<PAGE>

PPL EnergyPlus, LLC                                         Original Sheet No. 8
Rate Schedule FERC No. 9


1.5       Business Day means any day except a Saturday, Sunday, or a Federal
          ------------
          Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close
          at 5:00 p.m. local time for the relevant Party's principal place of
          business. When evaluating the Business Day on which notice, payment or
          delivery must be sent, the relevant Party shall be the Party from whom
          the notice, payment or delivery is being sent. When evaluating the
          Business Day on which notice, payment or delivery must be received,
          the relevant Party shall be the Party by whom the notice or payment or
          delivery is to be received.

1.6       Capacity Deficiency Charges shall have the meaning set forth in the
          ---------------------------
          RAA. Capacity Deficiency Charges shall be deemed to include any
          successor charges approved by PJM, and those successor charges shall
          have the meaning established by PJM.

1.7       CDS means the Competitive Default Service provided by a POLR other
          ---
          than PPL Electric in accordance with the terms and conditions of the
          Restructuring Settlement.

1.8       Collateral Termination Payment shall mean Supplier's Percentage of the
          ------------------------------
          absolute difference between the Assumed Ongoing POLR Revenue and the
          Market Value of Energy and Unforced Capacity required to meet the POLR
          Supply Amount and the POLR Capacity Obligation, as calculated for the
          remaining term of this Agreement on any day that a Party evaluates the
          other Party's compliance with Article 8 to this Agreement. Within 30
          days of the date of this Agreement, the Parties shall agree upon the
          method by which the Collateral Termination Payment, Assumed Ongoing
          POLR Revenue, and Market Value of Energy and Unforced Capacity are
          calculated and the information used in such calculation.

1.9       Collateral Threshold shall be, in the case of Supplier, an amount
          --------------------
          equal to $100 million dollars and, in the case of PPL Electric, an
          amount equal to $150 million dollars.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       8

<PAGE>

PPL EnergyPlus, LLC                                         Original Sheet No. 9
Rate Schedule FERC No. 9


1.10      Company Use Energy means the actual hourly Energy used at or by the
          ------------------
          facilities and operations of PPL Electric and certain Affiliates,
          including substations, operating headquarters, construction and
          maintenance facilities, office buildings, customer service operations,
          communications facilities and towers.

1.11      Credit Rating means, with respect to any entity, the rating then
          -------------
          assigned to such entity's unsecured, senior long-term debt obligations
          (not supported by third party credit enhancements) or if such entity
          does not have a rating for its senior unsecured long-term debt, the
          rating then assigned to such entity as an issues rating by S&P,
          Moody's, FitchIBCA or any other rating agency agreed by the Parties.

1.12      Cross Default Amount shall be an amount equal to $100 million dollars
          --------------------
          with respect to both Supplier and PPL Electric.

1.13      Delivery Point means the PPL Zone as defined herein.
          --------------

1.14      Early Termination Date means the day designated by the Non-Defaulting
          ----------------------
          Party as the day this Agreement is terminated due to an Event of
          Default by the Defaulting Party. The Early Termination Date shall be
          no earlier than the day notice of an Early Termination Date is
          effective and no later than 20 days after such notice is effective.

1.15      EGS means an electric generation supplier that is licensed by the PUC
          ---
          to provide retail electricity services to end-use customers.

1.16      Energy means the electrical output of an electric generating unit,
          ------
          usually stated in kilowatt-hours or megawatt-hours.


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       9

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 10
Rate Schedule FERC No. 9


1.17      Equitable Defenses means any bankruptcy, insolvency, reorganization
          ------------------
          and other laws affecting creditors' rights generally, and with regard
          to equitable remedies, the discretion of the court before which
          proceedings to obtain same may be pending.

1.18      FERC means the Federal Energy Regulatory Commission or any successor
          ----
          government agency.

1.19      Firm means that quality of electric service that requires the Supplier
          ----
          to provide Unforced Capacity and Energy without interruption or
          curtailment, except in circumstances qualifying as a Force Majeure
          event under this Agreement.

1.20      FitchIBCA means Fitch, Inc. or its successor.
          ---------

1.21      Force Majeure shall have the meaning set forth in Article 7.
          -------------

1.22      Generation Shopping Credits mean the rates and charges billed to
          ---------------------------
          Retail Customers for capacity and energy under the Retail Tariff
          (including Gross Receipts Taxes), pursuant to the Restructuring
          Settlement, the Retail Tariff and the PUC procedures and rules in
          effect as of the date of this Agreement and as modified during the
          term of this Agreement by the PUC, including any changes to those
          rates and charges that are contemplated by the Restructuring
          Settlement, but excluding any changes to those rates and charges that
          are not contemplated by the Restructuring Settlement. For purposes of
          this section, changes contemplated by the Restructuring Settlement
          shall include changes to those rates and charges made pursuant to
          Section C of the Restructuring Settlement, and changes not
          contemplated by the Restructuring Settlement shall include changes to
          those rates and charges made pursuant to the qualified rate order
          entered by the PUC on May 21, 1999 at Docket No. R-00994637 (Exhibit
          A, Paragraph 37). The Generation Shopping Credits in effect at the
          commencement of this Agreement are contained in the Retail Tariff.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       10

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 11
Rate Schedule FERC No. 9


1.23      Good Utility Practice means the practices, methods and acts engaged in
          ---------------------
          or approved by a significant portion of the electric power industry
          during the relevant time period, or the practices, methods and acts
          which, in the exercise of reasonable judgment in light of the facts
          known at the time the decision was made, could have been expected to
          accomplish the desired result consistent with reliability, safety,
          expedition, the requirements of governmental agencies having
          jurisdiction and, if appropriate or relevant under the transaction in
          question, at the lowest reasonable cost. Good Utility Practice is not
          intended to be limited to the optimum practice, method or act to the
          exclusion of all others, but rather to constitute a spectrum of
          acceptable practices, methods or acts.

1.24      Gross Receipts Tax means the Pennsylvania state tax that is collected
          ------------------
          by PPL Electric and is levied on every dollar of retail revenue
          collected by PPL Electric, as amended or modified from time to time.

1.25      Guarantor means an entity that provides a corporate guaranty on one
          ---------
          Party's behalf in a form acceptable to the other Party.

1.26      Imbalance Charges shall include any scheduling penalties, imbalance
          -----------------
          penalties, or unauthorized overrun penalties, congestion charges,
          additional transmission charges, cash out charges, oversupply charges,
          undersupply charges, spot or balancing market charges, emergency
          energy charges, banking charges or similar penalties, fees or charges
          assessed by PJM, an independent system operator, Regional Transmission
          Organization or Transmission Provider for failure to satisfy balance,
          nomination or scheduling requirements.

1.27      Interest Rate means, for any date, the lesser of: (a) the per annum
          -------------
          rate of interest equal to the prime lending rate as may from time to
          time be published in The Wall Street Journal under "Money Rates" on
          such day (or if not published on such day on the most recent preceding
          day on which

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       11

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 12
Rate Schedule FERC No. 9


          published), plus two percent (2%); and (b) the maximum rate permitted
          by applicable law.

1.28      Letter of Credit means one or more irrevocable, transferable standby
          ----------------
          letters of credit issued by a U.S. commercial bank or a foreign bank
          with a U.S. branch, with such bank having a credit rating of at least
          "A-" from S&P or "A3" from Moody's, in a form acceptable to the Party
          requiring the Letter of Credit.

1.29      Load Management Actions mean load interruptions for economic and
          -----------------------
          emergency load control pursuant to the Interruptible Service Rate
          provisions of the Retail Tariff and/or the cancellation of Demand Free
          Days pursuant to Rate Schedules LP-5 and/or LP-6 of the Retail Tariff.

1.30      Load Management Energy means the hourly amount of Energy consumed by
          ----------------------
          Retail Customers during the hours the Load Management Action was
          requested by Primary Supplier that would not have been consumed had
          PPL Electric instituted the Load Management Action as directed by
          Primary Supplier.

1.31      Load Management Energy Cost means the sum of the products of the
          ---------------------------
          hourly PPL Zonal locational marginal price, as reported by PJM, and
          the Load Management Energy. Primary Supplier shall not be required to
          utilize or change its utilization of its owned or controlled assets,
          including contractual assets, or market positions to minimize PPL
          Electric's liability for Load Management Energy.

1.32      Market Value of Energy and Unforced Capacity means the sum of the
          --------------------------------------------
          market values, respectively, of the POLR Supply Amount and POLR
          Capacity Obligation for the period used to determine the Collateral
          Termination Payment, as established by agreement of the Parties
          pursuant to Section 1.8.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       12

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 13
Rate Schedule FERC No. 9


1.33      Monthly Generation Revenue means the amount of revenue attributable to
          --------------------------
          all Retail Customers that were billed by PPL Electric for energy and
          capacity during a particular month, whether or not such billed amounts
          have actually been paid by such Retail Customers, net of the
          following: (a) Gross Receipts Tax; (b) any revenue collected under the
          State Tax Adjustment Surcharge; and (c) the amount owed to PPL
          EnergyPlus for purchases under the PPL Electric Call Option; provided
          that any change in Tax rates from those in effect on the date of this
          Agreement, and/or the imposition of any Tax not currently in effect,
          shall not operate to change the Monthly Generation Revenue, and
          further provided that if any customer or class of customers that would
          have been served under a rate schedule or rate rider in effect on the
          date of this Agreement, is required by an order of the PUC to be
          served either under (a) a different rate schedule or rate rider; or
          (b) a rate schedule or rate rider that is not in effect as of the date
          of this Agreement, then the Monthly Generation Revenue shall be
          calculated to include the revenues that would have been attributable
          to such customer or class of customers had such order not been issued.

1.34      Moody's means Moody's Investor Services, Inc. or its successor.
          -------

1.35      Performance Assurance means collateral in the form of either cash,
          ---------------------
          Letter(s) of Credit, or other security acceptable to the Party
          requesting the Performance Assurance. Notwithstanding any provision in
          this Agreement to the contrary, either Party shall be entitled to
          require Letters of Credit or other Performance Assurance in an amount
          not to exceed $300 million dollars.

1.36      PJM means the PJM Interconnection, L.L.C., the PJM Office of
          ---
          Interconnection, and any successor entities, including a Regional
          Transmission Organization.

1.37      PJM Ancillary Services means the services (or their successors)
          ----------------------
          defined as "Ancillary Services" under the PJM Tariff, as modified from
          time to time, including the following: PJM Scheduling, System Control
          and Dispatch Service Charges; RTO Scheduling, System Control Dispatch
          Service Charges; Reactive Supply and Voltage Control from Generation


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       13

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 14
Rate Schedule FERC No. 9


          Sources Service; Regulation and Frequency Response; Energy Imbalance;
          Operating Reserves--Spinning Reserve Service; Operating
          Reserves--Supplemental Reserve Service; and Ramapo PAR Facilities.

1.38      PJM Standards mean all criteria, rules and standards, billing system
          -------------
          procedures, operating procedures, manuals, tariffs and market rules
          adopted by PJM, as amended from time to time, and any successor
          standards.

1.39      PJM Tariff means the PJM Open Access Transmission Tariff, including
          ----------
          any schedules, appendices or exhibits attached thereto, as amended and
          revised from time-to-time, and any successor transmission tariff.

1.40      POLR or Provider of Last Resort means the entity satisfying the
          -------------------------------
          obligations set forth in the Pennsylvania Electricity Generation
          Customer Choice and Competition Act and the Restructuring Settlement.

1.41      POLR Capacity Obligation means the amount of Unforced Capacity,
          ------------------------
          expressed in megawatts, equal to: (a) the actual amount of PPL
          Electric's Unforced Capacity requirements with respect to all Retail
          Customers as determined by PJM under the RAA and PJM Standards; minus
          (b) the actual amount of Unforced Capacity, if any, supplied to PPL
          Electric by PPL EnergyPlus under the PPL Electric Call Option. It is
          understood that the POLR Capacity Obligation may change over time as a
          result of several factors, including: changes in peak load
          responsibility; changes in Unforced Capacity requirements; the
          requirement that certain residential customers be assigned to CDS; and
          customer decisions regarding whether to take retail service from PPL
          Electric (as POLR), a CDS supplier, or an Alternate Supplier.

1.42      POLR Service means retail electric service provided to Retail
          ------------
          Customers that do not take service from Alternate Suppliers or CDS
          suppliers, subject to the terms and conditions set forth in the

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       14

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 15
Rate Schedule FERC No. 9


          Pennsylvania Electricity Generation Customer Choice and Competition
          Act, the Retail Tariff and the Restructuring Settlement.

1.43      POLR Supply Amount means the amount of Energy, expressed in kilowatts
          ------------------
          per hour, equal to: (a) the actual hourly Energy, including all
          losses, necessary to serve all Retail Customers; plus (b) Company Use
          Energy; minus (c) the actual hourly Energy, if any, supplied to PPL
          Electric by PPL EnergyPlus under the PPL Electric Call Option. It is
          understood that the POLR Supply Amount may change over time as a
          result of several factors, including: seasonal factors; load
          fluctuation; increased or decreased usage; transmission or
          distribution outages; extremes in weather; the requirement that
          certain residential customers be assigned to CDS; and customer
          decisions regarding whether to take retail service from PPL Electric
          (as POLR), a CDS supplier, or an Alternate Supplier.

1.44      PPL Electric Call Option means the contractual right of PPL Electric
          ------------------------
          to purchase an amount of Energy and Unforced Capacity from PPL
          EnergyPlus, under Article 4 of the Power Sales Agreement between PPL
          Electric and PPL EnergyPlus designated as PPL EnergyPlus' FERC
          Electric Rate Schedule No. 4.

1.45      PPL Electric Downgrade Event means any of the following: (a) the
          ----------------------------
          Credit Rating of PPL Electric or its Guarantor(s) by S&P is below
          "BBB-"; (b) the Credit Rating of PPL Electric or its Guarantor(s) by
          Moody's is below "Baa3"; (c) the Credit Rating of PPL Electric or its
          Guarantor(s) by FitchIBCA below "BBB-"; (d) neither PPL Electric's nor
          its Guarantor(s) Credit Rating has a Credit Rating by either S&P,
          Moody's, or FitchIBCA; or (e) with respect to PPL Electric or its
          Guarantor(s), the occurrence and continuation of a default or other
          similar condition or event under one or more agreements or
          instruments, individually or collectively, relating to indebtedness
          for borrowed money which in aggregate is in excess of the Cross
          Default Amount, which results in such indebtedness becoming
          immediately due and payable.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       15

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 16
Rate Schedule FERC No. 9


1.46      PPL EnergyPlus means PPL EnergyPlus, LLC.
          --------------

1.47      PPL Zone shall have the meaning set forth in the PJM Tariff. If the
          --------
          PJM Tariff does not establish a meaning for the PPL Zone, or if PJM
          otherwise eliminates the PPL Zone, then the PPL Zone shall mean the
          collection of buses constituting the PPL Electric system.

1.48      Primary Supplier means the Supplier designated by PPL Electric to
          ----------------
          exercise management responsibility for Load Management Actions. The
          Primary Supplier shall be permitted to use the ALM credits allowed to
          PPL Electric pursuant to and as calculated under the RAA in such
          manner, as in its sole discretion, it shall determine.

1.49      PUC means the Pennsylvania Public Utility Commission and any successor
          ---
          government agency.

1.50      RAA means the Reliability Assurance Agreement Among Load Serving
          ---
          Entities in the PJM Control Area, or any successor agreement.

1.51      Replacement Cost means the cost at which PPL Electric, acting in a
          ----------------
          commercially reasonable manner, purchases a replacement for Unforced
          Capacity and Energy specified in this Agreement but not delivered by
          Supplier, plus: (a) costs reasonably incurred by PPL Electric in
          purchasing such substitute Unforced Capacity and Energy; (b)
          additional transmission and congestion charges, if any, reasonably
          incurred by PPL Electric; and (c) any penalties, ratcheted demand or
          similar charges, including Imbalance Charges. Alternatively, at PPL
          Electric's option, Replacement Cost shall mean the market price for
          the Unforced Capacity and Energy not delivered, as determined by PPL
          Electric in a commercially reasonable manner. PPL Electric shall not
          be required to utilize or change its utilization of its owned or
          controlled assets, including contractual assets, or market positions
          to minimize Supplier's liability.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       16

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 17
Rate Schedule FERC No. 9


1.52      Restructuring Settlement means the settlement of PPL Electric's
          ------------------------
          restructuring proceeding approved by the PUC in Docket No. R-00973954
          on August 27, 1998, including all appendices, attachments, or exhibits
          thereto.

1.53      Retail Customers means the end-use electric customers in PPL
          ----------------
          Electric's service territory that take POLR Service from PPL Electric
          under the Retail Tariff, excluding any and all customers taking
          service under Rate Schedule LPEP.

1.54      Retail Tariff means the schedules of terms, conditions and rates
          -------------
          pursuant to which PPL Electric intends to bill all retail customers,
          excluding any and all customers under Rate Schedule LPEP, during the
          term of this Agreement, as may be amended from time to time subject to
          PUC approval.

1.55      RFP means the PPL Electric Request for Proposals that led to this
          ---
          Agreement.

1.56      S&P means the Standard & Poor's Rating Group (a division of
          ---
          McGraw-Hill, Inc.) or its successor.

1.57      Sales Price means the price at which Supplier, acting in a
          -----------
          commercially reasonable manner, resells any Unforced Capacity and
          Energy not accepted by PPL Electric, deducting from such proceeds any:
          (a) costs reasonably incurred by Supplier in reselling such Unforced
          Capacity and Energy; (b) additional transmission and congestion
          charges, if any, reasonably incurred by Supplier in delivering such
          Unforced Capacity and Energy to the third party purchasers; and (c)
          any penalties, ratcheted demand or similar charges. Alternatively, at
          Supplier's option, Sales Price shall mean the market price for such
          Unforced Capacity or Energy not accepted, as determined by Supplier in
          a commercially reasonable manner. Supplier shall not be required to
          utilize or change its utilization of its owned or controlled assets,
          including contractual assets, or market positions to minimize PPL
          Electric's liability.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       17

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 18
Rate Schedule FERC No. 9


1.58      Schedule(ing) means the actions of Supplier or its designated
          -------------
          representatives, including Transmission Providers if applicable, of
          notifying, requesting and confirming to each other and any other
          necessary entities of the quantity of Unforced Capacity and Energy to
          be delivered on any given hour during the term of this Agreement.

1.59      Supplier Downgrade Event shall mean any of the following: (a) the
          ------------------------
          Credit Rating of Supplier's Guarantor(s) by S&P is below "BBB-"; (b)
          the Credit Rating of Supplier's Guarantor(s) by Moody's is below
          "Baa3"; (c) the Credit Rating of Supplier's Guarantor(s) by FitchIBCA
          is below "BBB-"; (d) Supplier's Guarantor(s) has no Credit Rating by
          either S&P, Moody's, or FitchIBCA; or (e) with respect to Supplier or
          its Guarantor(s), the occurrence and continuation of a default or
          other similar condition or event under one or more agreements or
          instruments, individually or collectively, relating to indebtedness
          for borrowed money which in aggregate is in excess of the Cross
          Default Amount, which results in such indebtedness becoming
          immediately due and payable.

1.60      Supplier's Percentage shall mean one hundred percent (100%).
          ---------------------

1.61      Tax(es) means all ad valorem, property, occupation, utility, gross
          -------
          receipts, sales use, excise, and other taxes or governmental charges,
          licenses, permits, and assessments, other than taxes based on net
          income or net worth.

1.62      Termination Payment shall have the meaning provided below depending on
          -------------------
          whether Supplier or PPL Electric is the Defaulting Party. Where
          Supplier is the Defaulting Party, Termination Payment shall mean the
          sum of: (a) the amount of any damages under Section 10.5 for any
          failure to deliver prior to (and including) the Early Termination
          Date; plus (b) any amount due to PPL Electric under Section 3.2.4.
          Where PPL Electric is the Defaulting Party, Termination Payment shall
          mean the sum of: (a) the amount of any damages under Section 10.5 for

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       18

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 19
Rate Schedule FERC No. 9


          any failure to accept prior to (and including) the Early Termination
          Date; plus (b) all amounts owed but not yet paid by PPL Electric,
          whether or not such amounts are then due, for performance provided
          prior to the Early Termination Date under this Agreement.

1.63      Third-Party Ancillary Services means all services or requirements
          ------------------------------
          necessary to support the transmission of capacity and Energy from
          resources to loads while maintaining reliable operation of any
          third-party transmission systems (other than the PJM transmission
          system) in accordance with Good Utility Practice, including:
          Scheduling, System Control and Dispatch Service Charges; Reactive
          Supply and Voltage Control from Generation Service; Regulation and
          Frequency Response; Energy Imbalance; Operating Reserves--Spinning
          Reserve Service; and Operating Reserves--Supplemental Reserve Service.

1.64      Transmission Provider means an entity transmitting Energy to the
          ---------------------
          Delivery Point.

1.65      Unforced Capacity shall have the meaning set forth in the RAA.
          -----------------
          Unforced Capacity shall be deemed to include a successor product
          approved by PJM, and that successor product shall have the meaning
          established by PJM.

                                 ARTICLE 2: TERM

2.1       Term. The term of this Agreement shall commence at 0000 hours on
          ----
          January 1, 2002, and shall terminate automatically at 2400 hours on
          December 31, 2009, unless terminated earlier pursuant to Article 10 or
          15.

2.2       Provisions Surviving Termination. The provisions of Articles 5-8,
          --------------------------------
          10-13 and 16 and Section 15.4 shall survive any termination of this
          Agreement, including any definitions under Article 1 applicable to the
          surviving Articles and Sections.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       19

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 20
Rate Schedule FERC No. 9


                       ARTICLE 3: DESCRIPTION OF SERVICES

3.1       Energy. For every hour during the term of this Agreement, Supplier
          ------
          shall provide and sell, and PPL Electric shall accept and purchase, an
          amount of energy equal to Supplier's Percentage of the POLR Supply
          Amount, rounded upward to the nearest kilowatt-hour. Supplier shall
          provide its fixed percentage of the POLR Supply Amount on a Firm,
          continuous and hourly basis.

          3.1.1     Actual Energy Required. Supplier is responsible for
                    ----------------------
                    providing the amount of Energy equal to its percentage of
                    the POLR Supply Amount.

          3.1.2     Character of Energy. All energy delivered under this
                    -------------------
                    Agreement shall be in the form of three-phase alternating
                    current having a nominal frequency of sixty cycles per
                    second.

          3.1.3     PPL Electric Call Option. PPL Electric shall purchase Energy
                    ------------------------
                    under the PPL Electric Call Option during each hour of every
                    day during the term of this Agreement. Energy purchased
                    under the PPL Electric Call Option shall be accounted for as
                    provided for under Section 1.43.

3.2       Unforced Capacity. Supplier shall provide and sell, and PPL Electric
          -----------------
          shall accept and purchase, an amount of Unforced Capacity equal to
          Supplier's Percentage of the POLR Capacity Obligation. Supplier shall
          provide Unforced Capacity on the same basis (daily, seasonal or any
          other basis) as PJM requires PPL Electric to provide Unforced Capacity
          under the RAA, and may meet the Unforced Capacity obligations in this
          Agreement through any mechanism acceptable to PJM.

          3.2.1     Actual Unforced Capacity Required. Supplier is also
                    ---------------------------------
                    responsible for providing the amount of Unforced Capacity
                    equal to its percentage of the POLR Capacity.


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       20

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 21
Rate Schedule FERC No. 9


          3.2.2     PPL Electric Call Option. PPL Electric shall purchase
                    ------------------------
                    Unforced Capacity under the PPL Electric Call Option every
                    day during the term of this Agreement, and such Unforced
                    Capacity shall be accounted for as provided under Section
                    1.41.

          3.2.3     PJM Requirements. Supplier shall take all action, including
                    ----------------
                    cooperating with PPL Electric so PPL Electric can take any
                    necessary action, required to ensure that the Unforced
                    Capacity that the Supplier is responsible for providing
                    under this Agreement is available to PPL Electric to be
                    credited against PPL Electric's Unforced Capacity obligation
                    as determined by PJM. Supplier will allow PPL Electric
                    reasonable access to and the opportunity to comment on data
                    submitted by Supplier to PJM relating to Supplier's
                    provision of Unforced Capacity. The obligation of
                    confidentiality provided in Article 13 will apply to all
                    data and information to which Supplier provides PPL Electric
                    access.

          3.2.4     Capacity Deficiency Charges. If PPL Electric fails to
                    ---------------------------
                    satisfy fully its Unforced Capacity obligation under the RAA
                    for a period for which an Unforced Capacity obligation is
                    established, and Supplier has failed to meet its obligations
                    under this Agreement pursuant to Sections 3.2 and 3.2.1 to
                    provide Unforced Capacity for such period, then Supplier
                    shall pay to PPL Electric a dollar amount equal to the sum
                    of: (1) the Capacity Deficiency Charges assessed by PJM for
                    such period attributable to the Supplier's failure to meet
                    its obligations to provide Unforced Capacity; and (2) the
                    distribution of capacity deficiency revenues that PPL
                    Electric would have received from PJM for such period had
                    PPL Electric fully satisfied its Unforced Capacity
                    obligation under the RAA for such period. In the event that
                    a person or persons other than Supplier was obligated to PPL
                    Electric to provide Unforced Capacity for a period, and such
                    other person(s) failed to provide all of the Unforced
                    Capacity each was obligated to provide, the amount payable
                    under (2) above shall be apportioned among Supplier and all
                    other persons failing to provide Unforced Capacity for such
                    period in proportion to the amount of Unforced Capacity that
                    each had failed to provide. For purposes of this section, a
                    period for which an Unforced Capacity obligation is

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       21

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 22
Rate Schedule FERC No. 9


                    established shall mean an interval, portion of an interval,
                    or such other period established by the RAA as amended from
                    time to time. In the event that any persons other than
                    Supplier are obligated to PPL Electric to provide Unforced
                    Capacity for a period, Supplier shall not be obligated to
                    make the payment under (2) above, unless all such persons
                    are under the same obligation as Supplier to make such
                    payments.

          3.2.5     Successor Unforced Capacity Requirements. Supplier and PPL
                    ----------------------------------------
                    Electric agree that the intent of this Article is for
                    Supplier to provide a fixed percentage, equal to Supplier's
                    Percentage, of the POLR Capacity Obligation, which is
                    currently measured by the Unforced Capacity requirements
                    determined by PJM under the RAA and PJM Standards. If PJM
                    Standards or the RAA relating to Unforced Capacity are
                    modified, Supplier will comply with the modified PJM
                    Standards and RAA and will remain obligated to provide the
                    required amount of Unforced Capacity. Should Unforced
                    Capacity be replaced with some other service or product,
                    then Supplier shall provide and sell, and PPL Electric shall
                    accept and purchase, an amount of such replacement product
                    or service equal to Supplier's Percentage of PPL Electric's
                    requirements for such replacement product or service
                    associated with POLR Service. In that event, the provisions
                    of this Agreement relating to Unforced Capacity shall apply
                    to the replacement product or service instead of Unforced
                    Capacity.

3.3       Transmission Service. Supplier shall be responsible for all
          --------------------
          transmission service necessary to deliver the Energy and Unforced
          Capacity supplied under this Agreement to the Delivery Point. PPL
          Electric shall be responsible for transmission service at and from the
          Delivery Point to the points at which PPL Electric delivers energy to
          its customers, including network integration transmission service, or
          its successor, under the PJM Tariff.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       22

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 23
Rate Schedule FERC No. 9


3.4      Ancillary Services.
         -------------------

          3.4.1     PJM Ancillary Services. PPL Electric or its agent/contractor
                    ----------------------
                    shall be responsible for securing and providing the
                    following Ancillary Services, or their successors as defined
                    by PJM, required to deliver the POLR Supply Amount within
                    PJM: PJM Scheduling, System Control and Dispatch Service
                    Charges; PPL Electric's RTO Scheduling, System Control
                    Dispatch Service Charges; Reactive Supply and Voltage
                    Control from Generation Sources Service; Regulation and
                    Frequency Response; Operating Reserves--Spinning Reserve
                    Service; Operating Reserves--Supplemental Reserve Service;
                    and Ramapo PAR Facilities. Supplier shall be responsible for
                    all other services and their costs within PJM, ancillary or
                    otherwise, necessary to meet its obligations to provide
                    Energy and Unforced Capacity at the Delivery point,
                    including Energy Imbalance.

          3.4.2     Third-Party Ancillary Services. Supplier will be responsible
                    ------------------------------
                    for all Ancillary Services and any other services required
                    to deliver its share of the POLR Supply Amount across any
                    transmission system other than the PJM transmission system.

3.5       Primary Supplier. Supplier shall also serve as PPL Electric's Primary
          ----------------
          Supplier and shall have the responsibilities and benefits of the
          Primary Supplier as provided herein.

3.6       Supply to Customers Under New Rate Schedules or Rate Riders. The
          -----------------------------------------------------------
          Parties agree to negotiate, in good faith, for Supplier to provide the
          Energy and Unforced Capacity necessary to serve any customer or class
          customers that are required by an order of the PUC to be served under
          a rate schedule or rate rider of the Retail Tariff that is not in
          effect as of the date of this Agreement.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       23

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 24
Rate Schedule FERC No. 9


                      ARTICLE 4: FORECASTING AND SCHEDULING

4.1       Energy Forecasts. Each Business Day during the term of this Agreement,
          ----------------
          PPL Electric shall provide Supplier a seven-day, hourly forecast of
          the POLR Supply Amount. The daily forecasts shall be provided
          electronically each Business Day. At all times during the term of this
          Agreement, PPL Electric shall provide Supplier a real-time data signal
          providing a general indication of the POLR Supply Amount, based on
          currently available metered interchange data and bilateral
          transactions.

4.2       Reliance on Forecasts. Supplier has the option of independently
          ---------------------
          generating forecasts of its Unforced Capacity and Energy obligations
          or utilizing the forecasts provided by PPL Electric. Supplier and PPL
          Electric acknowledge and agree that all forecasts provided by PPL
          Electric under this Agreement and as part of the RFP process are based
          on large numbers of assumptions and are subject to significant
          uncertainties and contingencies, many of which are outside the control
          of PPL Electric. Therefore, Supplier and PPL Electric also agree that
          the forecasts provided under this Agreement and the RFP process are
          non-binding and PPL Electric shall not have any liability for any
          information contained, or not contained, in those forecasts. Nothing
          in this Article, and no amount of reliance on the forecasts described
          herein, reduces or eliminates Supplier's obligation to meet its
          percentage of the POLR Supply Amount and the POLR Capacity Obligation
          as set out in this Agreement.

4.3       Scheduling. Supplier shall be responsible for all Scheduling
          ----------
          requirements necessary to ensure the delivery of the Unforced Capacity
          and Energy delivered under this Agreement. In accordance with PJM
          Standards, PPL Electric shall cooperate to establish an account for
          Supplier with PJM. Supplier shall utilize this account to Schedule
          with PJM, on PPL Electric's behalf, a load forecast reflecting
          Supplier's proportionate responsibility for the POLR Supply Amount.
          This load forecast may be based on the forecasts provided by PPL
          Electric or Supplier's independently generated forecasts, but in
          either event, Supplier retains all responsibility for the load

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       24

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 25
Rate Schedule FERC No. 9


          forecast it submits to PJM. Supplier shall also use its account to
          Schedule with PJM all transmission service and generation services,
          including Unforced Capacity and Energy, that Supplier is required to
          provide under this Agreement. Supplier shall comply with all PJM
          Standards when submitting data to and Scheduling with PJM.

                                ARTICLE 5: TAXES

5.1       Taxes. Supplier shall pay or cause to be paid all Taxes imposed by any
          -----
          government authority on or with respect to the Unforced Capacity and
          Energy provided under this Agreement that arise prior to the Delivery
          Point ("Supplier's Taxes"). New Taxes or changes in Tax rates imposed
          directly on Supplier shall be borne by Supplier. PPL Electric shall
          pay or cause to be paid all Taxes imposed by any government authority
          on or with respect to the Unforced Capacity and Energy that arise at
          and from the Delivery Point, other than ad valorem, franchise or
          income taxes which are related to the sale of Unforced Capacity and
          Energy under this Agreement and are, therefore, the responsibility of
          the Supplier ("PPL Electric's Taxes"). If Supplier is required by law
          or regulation to remit or pay PPL Electric's Taxes, PPL Electric shall
          promptly reimburse Supplier for such Taxes. If PPL Electric is
          required by law or regulation to remit or pay Supplier's Taxes,
          Supplier shall promptly reimburse PPL Electric for such Taxes, and PPL
          Electric may deduct the amount of any such Taxes from the sums due to
          Supplier under Article 6 of this Agreement. Nothing shall obligate or
          cause a Party to pay or be liable to pay any Taxes imposed by any
          government authority for which it is exempt under the law. Both
          Parties shall use reasonable efforts to administer this Agreement and
          implement the provisions in accordance with their intent to minimize
          Taxes.

                     ARTICLE 6: RECONCILIATIONS AND PAYMENTS

6.1       Reconciliation with PJM. The Parties acknowledge and agree that
          -----------------------
          Supplier shall be responsible for all reconciliations and settlements
          required by PJM and associated with the sale of Unforced Capacity and

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       25

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 26
Rate Schedule FERC No. 9


          Energy under this Agreement, including the reconciliations required in
          the real-time and balancing markets, or their successors, as defined
          by PJM. Supplier shall be solely responsible for any credits and
          charges, including Imbalance Charges, in connection with or relating
          to the PJM reconciliations and settlements. To the extent any of these
          credits and charges are assessed to PPL Electric's PJM account, rather
          than Supplier's account, Supplier and PPL Electric agree to cooperate
          so that PJM can make the appropriate adjustment in the next PJM
          reconciliation to transfer the charges or credits to Supplier's
          account. If PJM Standards relating to reconciliation, settlements, the
          real-time market or the balancing market are modified, Supplier shall
          comply with the modified PJM Standards and shall remain responsible
          for all reconciliations and settlements with PJM. These provisions
          shall not apply to any reconciliations or settlements required as part
          of PJM's market for the Regulation Ancillary Service, or its
          successor.

6.2       Payment of Monthly Generation Revenue. For each calendar month during
          -------------------------------------
          the term of this Agreement, PPL Electric shall remit to Supplier the
          dollar amount equal to Supplier's Percentage of the Monthly Generation
          Revenue, net of any payments due PPL Electric under Section 3.2.4. The
          remission of Monthly Generation Revenue shall occur as soon as
          practicable following the end of the calendar month to which the
          Monthly Generation Revenue applies. The Parties recognize and agree
          that in calculating the Monthly Generation Revenue, PPL Electric shall
          pro rate by kilowatt-hour adjusted by time-use Supplier's portion of
          the Monthly Generation Revenue, to the extent that Supplier supplied
          only a portion of its obligations under this Agreement. PPL Electric
          shall include with each payment of Monthly Generation Revenue an
          accounting of the amount of kilowatt-hours by rate schedule or rate
          rider that forms the basis of that month's payment.

6.3       Transition Periods. The Parties recognize that, during the first two
          ------------------
          months of the term of this Agreement, the Monthly Generation Revenue
          distributed by PPL Electric to Supplier will include revenue
          attributable to service provided in December of 2001 and not under the

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       26

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 27
Rate Schedule FERC No. 9


          terms of this Agreement. As soon as practicable, PPL Electric shall
          prorate the Monthly Generation Revenue remitted to Supplier during the
          first two months of this Agreement such that Supplier receives only
          those revenues associated with service provided on those days that
          fall within the term of this Agreement. The Parties further recognize
          that the initial Monthly Generation Revenue distributed by PPL
          Electric to Supplier for December of 2009 will not include all revenue
          attributable to service provided during that month. As soon as
          practicable, PPL Electric shall remit to Supplier the remainder of the
          Monthly Generation Revenue attributable to service provided in
          December of 2009 such that Supplier receives all revenues associated
          with service provided on those days that fall within the term of this
          Agreement.

6.4       Advance Payment. In addition to the payment of Monthly Generation
          ---------------
          Revenue, on or before January 1, 2002, PPL Electric shall remit to
          Supplier for performance under this Agreement, the following amount:
          $89,769,000.00.

6.5       Distribution of Capacity Deficiency Revenues. If PPL Electric receives
          --------------------------------------------
          a distribution of capacity deficiency revenues from PJM pursuant to
          Schedule 11 of the RAA or any success thereto, and Supplier has met
          its obligations under this Agreement pursuant to Sections 3.2 and
          3.2.1 to provide Unforced Capacity for the period covered by such
          capacity deficiency revenues, then PPL Electric shall distribute to
          Supplier Supplier's Percentage of the capacity deficiency revenues
          received from PJM. If PPL Electric would have received such a
          distribution of capacity deficiency revenues but did not receive such
          revenues because PPL Electric did not fully satisfy its Unforced
          Capacity obligation under the RAA for the period covered by such
          capacity deficiency revenues, and Supplier has met its obligations
          under this Agreement pursuant to Sections 3.2 and 3.2.1 to provide
          Unforced Capacity for such period, then PPL Electric shall calculate
          and pay to Supplier the dollar amount equal to Supplier's Percentage
          of the distribution of capacity deficiency revenues that PPL Electric
          would have received from PJM had PPL Electric fully satisfied its
          Unforced Capacity obligation under the RAA for such period.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       27

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 28
Rate Schedule FERC No. 9


6.6       PPL Electric Resettlement Process. The Parties recognize that from
          ---------------------------------
          time to time during the term of this Agreement, Retail Customers may
          not be billed or may be billed incorrectly for POLR Service. As these
          incorrect billings are discovered and corrected by PPL Electric, PPL
          Electric shall account for such corrections in the next Monthly
          Generation Revenue payment and will either remit or charge Supplier
          according to the corrected billing.

6.7       Payment Disputes. In the event any portion of any payment is in
          ----------------
          dispute, PPL Electric shall pay the undisputed amount to Supplier and
          shall submit a detailed written explanation of the basis for the
          dispute. The Parties shall use their best efforts to attempt to
          resolve such disputes on a timely basis. Upon determination of the
          correct payment amount, the adjusted payment shall be paid promptly
          after such determination with interest at the Interest Rate and
          computed from the date payment was originally due to the date payment
          is made. If the Parties are unable to resolve the dispute, either
          Party may exercise its available administrative or legal remedies,
          including those set forth in Article 11.

                            ARTICLE 7: FORCE MAJEURE

7.1       Force Majeure. To the extent either Party is prevented by Force
          -------------
          Majeure from carrying out, in whole or part, its obligations under
          this Agreement and such Party (the "Claiming Party") has complied with
          the procedures in Section 7.4, then the Claiming Party shall be
          excused from the performance of its obligations with respect to this
          Agreement (other than the obligation to make payments then due or
          becoming due with respect to performance prior to the Force Majeure).
          The Claiming Party shall remedy the Force Majeure with all reasonable
          dispatch. The non-Claiming Party shall not be required to perform or
          resume performance of those obligations that correspond to the
          obligations of the Claiming Party excused by Force Majeure; provided,
          however, that the non-Claiming Party shall only be excused from
          performing or resuming performance to the same extent that the
          Claiming Party is excused by Force Majeure.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       28

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 29
Rate Schedule FERC No. 9


7.2       Force Majeure Event. Force Majeure means an event or circumstance that
          -------------------
          prevents one Party from performing its obligations under this
          Agreement, which event or circumstance was not foreseeable as of the
          date this Agreement was agreed to, which is not within the reasonable
          control of, or the result of the negligence of, the Claiming Party,
          and which, by the exercise of due diligence, the Claiming Party is
          unable to overcome or avoid or cause to be avoided. Force Majeure
          shall not be based on: (a) PPL Electric's inability economically to
          use or resell the services purchased hereunder; (b) the loss, failure
          or cost of Unforced Capacity and Energy needed by Supplier to meet its
          obligations under this Agreement; or (c) Supplier's ability to sell
          the Unforced Capacity and Energy at a price greater than the payment
          specified in this Agreement.

7.3       Transmission Service. Supplier may not raise a claim of Force Majeure
          --------------------
          based in whole or in part on curtailment or interruption by a
          Transmission Provider unless: (a) Supplier has contracted for firm
          transmission with a Transmission Provider for the Unforced Capacity
          and Energy to be delivered to or accepted at the Delivery Point; (b)
          equivalent amounts of Unforced Capacity and Energy are otherwise
          unavailable to Supplier for delivery to the Delivery Point; (c) such
          curtailment or interruption is due to "force majeure" or
          "uncontrollable force" or a similar term as defined under the
          Transmission Provider's transmission tariff; provided, however, that
          existence of the foregoing factors shall not be sufficient to
          conclusively or presumptively prove the existence of a Force Majeure
          absent a showing of other facts and circumstances which in the
          aggregate with such factors establish that a Force Majeure, as defined
          in Section 7.2, has occurred.

7.4       Force Majeure Procedures. Upon the occurrence of an event of Force
          ------------------------
          Majeure, the Claiming Party shall: (a) provide prompt written notice
          of such Force Majeure event to the other Party, including an
          estimation of its expected duration and the probable impact on the
          performance of its obligations hereunder; (b) exercise all reasonable
          efforts in accordance with Good Utility Practice to continue to

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       29

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 30
Rate Schedule FERC No. 9


          perform its obligations under this Agreement; (c) expeditiously take
          action to correct or cure the event or condition excusing performance,
          provided, however, that settlement of labor disputes will be
          completely within the sole discretion of the Party affected by such
          labor dispute; (d) exercise all reasonable efforts to mitigate or
          limit damages to the other Party; and (e) provide prompt notice to the
          other Party of the cessation of the event or condition giving rise to
          its excuse from performance. Any obligation under this Agreement shall
          be suspended only to the extent caused by such Force Majeure event and
          only during the continuance of any inability of performance caused by
          such Force Majeure event but for no longer period.

                    ARTICLE 8: CREDITWORTHINESS AND SECURITY

8.1      Supplier Creditworthiness and Security.
         ---------------------------------------

          8.1.1     Financial Information. If requested by PPL Electric,
                    ---------------------
                    Supplier or any Guarantor shall deliver: (a) within 120 days
                    following the end of each fiscal year, a copy of their
                    respective annual reports containing audited consolidated
                    financial statements for such fiscal year; and (b) within 60
                    days after the end of each of their respective first three
                    fiscal quarters of each fiscal year, a copy of their
                    quarterly reports, containing unaudited consolidated
                    financial statements for such fiscal quarter. In all cases,
                    the statements shall be for the most recent accounting
                    period and prepared in accordance with generally accepted
                    accounting principles; provided, however, that should any
                    such statements not be available on a timely basis due to a
                    delay in preparation or certification, such delay shall not
                    be an Event of Default so long as Supplier and any Guarantor
                    diligently pursue the preparation, certification and
                    delivery of the statements.

          8.1.2     Collateral Threshold. If at any time and from time to time
                    --------------------
                    during the term of this Agreement (and notwithstanding
                    whether an Event of Default has occurred), the Collateral


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       30

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 31
Rate Schedule FERC No. 9


                    Termination Payment exceeds the Collateral Threshold, then,
                    on any Business Day, PPL Electric may request Supplier to
                    provide Performance Assurance in an amount equal to the
                    amount by which the Collateral Termination Payment exceeds
                    the sum of the relevant Collateral Threshold (rounding
                    upwards for any fractional amount to the next $200,000) plus
                    any amounts owed but not yet paid by PPL Electric, whether
                    or not such amounts are then due, for performance provided
                    under this Agreement prior to such request. The Performance
                    Assurance shall be delivered within two Business Days of the
                    date of such request. No more frequently than weekly, the
                    Supplier, at its sole cost, may request that the posted
                    Performance Assurance be reduced to the amount by which the
                    Collateral Termination Payment then exceeds the relevant
                    Collateral Threshold (rounding upwards for any fractional
                    amount to the next $200,000).

          8.1.3     Downgrade Event. If at any time there shall occur a Supplier
                    ---------------
                    Downgrade Event in respect of Supplier's Credit Rating, then
                    PPL Electric may require Supplier to establish and maintain
                    for so long as the Supplier Downgrade Event is continuing,
                    Performance Assurance in an amount determined by PPL
                    Electric in a commercially reasonable manner. In the event
                    Supplier shall fail to provide such Performance Assurance or
                    a guaranty or other credit assurance acceptable to PPL
                    Electric within three Business Days of receipt of notice,
                    then an Event of Default shall be deemed to have occurred
                    and PPL Electric shall be entitled to the remedies set forth
                    in Article 10 of this Agreement. Supplier shall provide PPL
                    Electric with written notice of the occurrence of any
                    Supplier Downgrade Event, within two Business Days of such
                    occurrence.

          8.1.4     Credit Assurances. In addition to the Downgrade Events
                    -----------------
                    specified in the previous section, if PPL Electric has
                    reasonable grounds to believe that Supplier's
                    creditworthiness or performance under this Agreement will
                    become unsatisfactory, PPL Electric will provide Supplier
                    with written notice requesting Performance Assurance in an
                    amount determined by PPL Electric in a commercially
                    reasonable manner. Upon receipt of such notice, Supplier

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       31

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 32
Rate Schedule FERC No. 9


                    shall have three Business Days to remedy the situation by
                    providing such Performance Assurance to PPL Electric. In the
                    event that Supplier fails to provide such Performance
                    Assurance, or a guaranty or other credit assurance
                    acceptable to PPL Electric within three Business Days of
                    receipt of notice, then an Event of Default under Article 10
                    will be deemed to have occurred and PPL Electric will be
                    entitled to the remedies set forth in Article 10 of this
                    Agreement.

          8.1.5     Grant of Security Interest. To secure its obligations under
                    --------------------------
                    this Agreement and to the extent Supplier delivers
                    Performance Assurance hereunder, Supplier hereby grants to
                    PPL Electric a present and continuing security interest in,
                    and lien on (and right of setoff against), and assignment
                    of, all Performance Assurance, cash collateral and cash
                    equivalent collateral and any and all proceeds resulting
                    therefrom or the liquidation thereof, whether now or
                    hereafter held by, on behalf of, or for the benefit of, PPL
                    Electric, and Supplier agrees to take such action as PPL
                    Electric reasonably requires in order to perfect PPL
                    Electric's first-priority security interest in, and lien on
                    (and right of setoff against), such collateral and any and
                    all proceeds resulting therefrom or from the liquidation
                    thereof.

8.2       PPL Electric Creditworthiness and Security.
          ------------------------------------------

          8.2.1     Financial Information. If requested by Supplier, PPL
                    ---------------------
                    Electric and any Guarantor shall deliver: (a) within 120
                    days following the end of each fiscal year, a copy of their
                    respective annual reports containing audited consolidated
                    financial statements for such fiscal year; and (b) within 60
                    days after the end of each of their respective first three
                    fiscal quarters of each fiscal year, a copy of their
                    quarterly reports, containing unaudited consolidated
                    financial statements for such fiscal quarter. In all cases,
                    the statements shall be for the most recent accounting
                    period and prepared in accordance with generally accepted
                    accounting principles; provided, however, that should any
                    such statements not be available on a timely basis due to a
                    delay in preparation or certification, such delay shall not

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       32

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 33
Rate Schedule FERC No. 9


                    be an Event of Default so long as PPL Electric and any
                    Guarantor diligently pursue the preparation, certification
                    and delivery of the statements.

          8.2.2     Collateral Threshold. If at any time and from time to time
                    --------------------
                    during the term of this Agreement (and notwithstanding
                    whether an Event of Default has occurred), the Collateral
                    Termination Payment exceeds the Collateral Threshold, then,
                    on any Business Day, Supplier may request PPL Electric to
                    provide Performance Assurance, in an amount equal to the
                    amount by which the Collateral Termination Payment exceeds
                    the relevant Collateral Threshold (rounding upwards for any
                    fractional amount to the next $200,000). The Performance
                    Assurance shall be delivered within two Business Days of the
                    date of such request. No more frequently than weekly, PPL
                    Electric, at its sole cost, may request that the posted
                    Performance Assurance be reduced to the amount by which the
                    Collateral Termination Payment then exceeds the relevant
                    Collateral Threshold (rounding upwards for any fractional
                    amount to the next $200,000).

          8.2.3     Downgrade Event. If at any time there shall occur a PPL
                    ---------------
                    Electric Downgrade Event in respect of PPL Electric, then
                    Supplier may require PPL Electric to establish and maintain
                    for so long as the PPL Electric Downgrade Event is
                    continuing, Performance Assurance in an amount determined by
                    Supplier in a commercially reasonable manner. In the event
                    PPL Electric shall fail to provide such Performance
                    Assurance or a guaranty or other credit assurance acceptable
                    to Supplier within three Business Days of receipt of notice,
                    then an Event of Default shall be deemed to have occurred
                    and Supplier shall be entitled to the remedies set forth in
                    Article 10 of this Agreement. PPL Electric shall provide
                    Supplier with written notice of the occurrence of any PPL
                    Electric Downgrade Event, within two Business Days of such
                    occurrence.

          8.2.4     Credit Assurances. In addition to the Downgrade Events
                    -----------------
                    specified in the previous section, if Supplier has
                    reasonable grounds to believe that PPL Electric's


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       33

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 34
Rate Schedule FERC No. 9


                    creditworthiness or performance under this Agreement will
                    become unsatisfactory, PPL Electric will provide Supplier
                    with written notice requesting Performance Assurance in an
                    amount determined by Supplier in a commercially reasonable
                    manner. Upon receipt of such notice, PPL Electric shall have
                    three Business Days to remedy the situation by providing
                    such Performance Assurance to Supplier. In the event that
                    PPL Electric fails to provide such Performance Assurance, or
                    a guaranty or other credit assurance acceptable to Supplier
                    within three Business Days of receipt of notice, then an
                    Event of Default under Article 10 will be deemed to have
                    occurred and Supplier will be entitled to the remedies set
                    forth in Article 10 of this Agreement.

          8.2.5     Grant of Security Interest. To secure its obligations under
                    --------------------------
                    this Agreement and to the extent PPL Electric delivers
                    Performance Assurance hereunder, PPL Electric hereby grants
                    to Supplier a present and continuing security interest in,
                    and lien on (and right of setoff against), and assignment
                    of, all Performance Assurance, cash collateral and cash
                    equivalent collateral and any and all proceeds resulting
                    therefrom or the liquidation thereof, whether now or
                    hereafter held by, on behalf of, or for the benefit of,
                    Supplier, and PPL Electric agrees to take such action as
                    Supplier reasonably requires in order to perfect Supplier's
                    first-priority security interest in, and lien on (and right
                    of setoff against), such collateral and any and all proceeds
                    resulting therefrom or from the liquidation thereof.

                   ARTICLE 9: REPRESENTATIONS AND WARRANTIES

9.1       Representations. As of the date this Agreement is first executed, each
          ---------------
          Party represents and warrants to the other Party that: (a) it is duly
          organized, validly existing and in good standing under the laws of the
          jurisdiction of its formation; (b) it will obtain all regulatory
          authorizations necessary for it to legally perform its obligations
          under this Agreement; (c) the execution, delivery and performance of
          this Agreement is within its powers, have been duly authorized by all
          necessary action and do not violate any of the terms and conditions in

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       34

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 35
Rate Schedule FERC No. 9


          its governing documents, any contracts to which it is a party or any
          law, rule, regulation, order or the like applicable to it; (d) this
          Agreement constitutes its legally valid and binding obligation
          enforceable against it in accordance with its terms, subject to any
          Equitable Defenses; (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 being or becoming
          Bankrupt; (f) there is not pending or, to its knowledge, threatened
          against it or any of its Affiliates any legal proceedings that could
          materially adversely affect its ability to perform its obligations
          under this Agreement; (g) no Event of Default or potential 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 (h) it is acting
          for its own account, has made its own independent decision to enter
          into this Agreement and, as to whether this Agreement is appropriate
          or proper for it based upon its own judgment, is not relying upon the
          advice or recommendations of the other Party in so doing, and is
          capable of assessing the merits of and understanding, and understands
          and accepts, the terms, conditions and risks of this Agreement. As of
          the date this Agreement is first executed, Supplier represents and
          warrants to PPL Electric that it has entered into this Agreement in
          connection with the conduct of its business and it has the ability to
          provide the Unforced Capacity and Energy referred to in this
          Agreement.

9.2       Duration. The representations in this Article shall continue in full
          --------
          force and effect for the term of this Agreement.

                   ARTICLE 10: EVENTS OF DEFAULT AND REMEDIES

10.1      Parties - Events of Default. An "Event of Default" shall mean, with
          ---------------------------
          respect to a Party (a "Defaulting Party"), the occurrence of any of
          the following: (a) the failure to make, when due, any payment required
          pursuant to this Agreement if such failure is not remedied within
          three Business Days after written notice; (b) any representation or

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       35

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 36
Rate Schedule FERC No. 9


          warranty made by such Party herein is false or misleading in any
          material respect when made or when deemed made or repeated; (c) the
          failure to perform, unless excused by Force Majeure, any material
          covenant or obligation set forth in this Agreement (except to the
          extent constituting a separate Event of Default); (d) such Party
          becomes Bankrupt; (e) the failure to satisfy the
          creditworthiness/collateral requirements, including Performance
          Assurances, agreed to pursuant to Article 8; (f) such Party
          consolidates or amalgamates with, or merges with or into, or transfers
          all or substantially all of its assets to another entity and such
          Party fails to comply with Article 14; and (g) a Force Majeure event
          that prevents Supplier from delivering Unforced Capacity and Energy
          for longer than seven days or multiple Force Majeure events that
          prevent Supplier from delivering Unforced Capacity and Energy for a
          cumulative period of fourteen days in any one year.

10.2      Guarantors - Events of Default. An "Event of Default" shall mean, with
          ------------------------------
          respect to the Guarantor of a Party, the occurrence of any of the
          following: (a) if any representation or warranty made by a Guarantor
          in connection with this Agreement is false or misleading in any
          material respect when made or when deemed made or repeated; (b) the
          failure of a 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 Business Days after written notice; (c) a Guarantor
          becomes Bankrupt; (d) the failure of a 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 each Transaction to which such
          guaranty shall relate without the written consent of the other Party;
          and (e) a Guarantor shall repudiate, disaffirm, disclaim, or reject,
          in whole or in part, or challenge the validity of any guaranty.

10.3      Remedies. If an Event of Default shall have occurred and be
          --------
          continuing, the other Party (the "Non-Defaulting Party") shall, at its
          sole discretion, have the right: (a) to terminate this Agreement,
          designate an Early Termination Date and accelerate all amounts owing


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       36

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 37
Rate Schedule FERC No. 9


          between the Parties, including the Termination Payment; (b) withhold
          any payments due to the Defaulting Party under this Agreement,
          including the right to setoff, recoup and counterclaim any amounts
          owed under this Agreement until such time (if any) as judgment is
          given against such set-off, recoupment or counterclaim; (c) suspend
          performance; (d) exercise any rights and remedies, under this
          Agreement or any law currently in effect, with respect to all
          Performance Assurance; (e) commence an action to require the
          Defaulting Party to remedy the Event of Default and specifically
          perform its obligations under this Agreement; (f) seek recovery of
          damages as provided under Section 10.5; (g) require the return of the
          amount of any advance payments attributable to performance not
          provided, to the extent such amount has not been recovered through a
          Termination Payment; and (h) exercise such other remedies it may have
          in equity or at law.

10.4      Declaration of an Early Termination Date and Calculation of
          -----------------------------------------------------------
          Termination Payment. If the Non-Defaulting Party elects to declare an
          -------------------
          Early Termination Date, it shall calculate, in accordance with Section
          1.62, the Termination Payment by the Early Termination Date or as soon
          thereafter as is reasonably practicable.

          10.4.1    Notice of Payment of Termination Payment. As soon as
                    ----------------------------------------
                    practicable after calculation of the Termination Payment,
                    notice shall be given by the Non-Defaulting Party to the
                    Defaulting Party of the amount of the Termination Payment
                    and whether the Termination Payment is due to or due from
                    the Non-Defaulting Party. The notice shall include a written
                    statement explaining in reasonable detail the calculation of
                    such amount. The Termination Payment shall be made by the
                    Party that owes it within two Business Days after such
                    notice is effective.

          10.4.2    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 two Business Days of
                    receipt of Non-Defaulting Party's calculation of the

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       37

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 38
Rate Schedule FERC No. 9


                    Termination Payment, provide to the Non-Defaulting Party a
                    detailed written explanation of the basis for such dispute;
                    provided, however, that the Defaulting Party shall transfer,
                    along with the written explanation, Performance Assurance to
                    the Non-Defaulting Party in an amount equal to the
                    Termination Payment.

10.5      Failure to Deliver/Accept. In the event that Supplier fails to sell or
          -------------------------
          deliver, or PPL Electric fails to accept or purchase, the Parties
          shall calculate damages in the manner specified below; provided
          however, that nothing in this Agreement limits the right of the
          non-Defaulting Party to elect any other remedy identified in Section
          10.3, in addition to or in lieu of, the damages remedy set out below.

          10.5.1    Supplier Failure. If Supplier fails to schedule and/or
                    ----------------
                    deliver all or part of the Unforced Capacity or Energy
                    required under this Agreement, and such failure is not
                    excused by Force Majeure, then Supplier shall pay PPL
                    Electric, on the earlier of the date payment would otherwise
                    be due in respect of the month in which the failure occurred
                    or within five Business Days of invoice receipt, an amount
                    for such deficiency equal to the positive difference, if
                    any, obtained by subtracting the amount of Monthly
                    Generation Revenue that Supplier would have received for the
                    undelivered Unforced Capacity or Energy from the Replacement
                    Cost. On the same day of the payment identified above,
                    Supplier shall also return to PPL Electric the amount of any
                    advance payment attributable performance not provided, as
                    calculated on a kilowatt-hour basis and adjusted for
                    seasonal variations. The invoice submitted by PPL Electric
                    for these amounts shall include a written statement
                    explaining in reasonable detail the calculation of such
                    amount.

          10.5.2    PPL Electric Failure. Subject to the limitations set forth
                    --------------------
                    in Section 12.7, if PPL Electric fails to accept all or part
                    of the Unforced Capacity or Energy required under this
                    Agreement, and such failure is not excused by Force Majeure,
                    then PPL Electric shall pay Supplier, on the earlier of the
                    date payment would otherwise be due in respect of the month

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       38

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 39
Rate Schedule FERC No. 9


                    in which the failure occurred or within five Business Days
                    of invoice receipt, an amount for such deficiency equal to
                    the positive difference, if any, obtained by subtracting the
                    Sales Price from the amount of Monthly Generation Revenue
                    that Supplier would have received for the unaccepted
                    Unforced Capacity or Energy. The invoice submitted by
                    Supplier for such amount shall include a written statement
                    explaining in reasonable detail the calculation of such
                    amount.

                            ARTICLE 11: DISAGREEMENTS

11.1      Informal Resolution. Except to the extent otherwise provided in
          -------------------
          Section 6.7, if any disagreement arises on matters concerning this
          Agreement, the disagreement shall be referred to one representative of
          each Party, who shall attempt to timely resolve the disagreement. If
          such representatives cannot resolve the disagreement within a
          reasonable time, or a Party fails to appoint a representative within
          ten days of written notice of the existence of a disagreement, then
          either Party may request, but not require, that the matter proceed to
          arbitration as provided below.

11.2      Arbitration. If pursuant to the previous section the Parties are
          -----------
          unable to resolve a disagreement arising on a matter pertaining to
          this Agreement, such disagreement may be settled by arbitration,
          provided that both Parties agree that the disagreement should be
          resolved by arbitration; except with respect to arbitration under
          Section 15.4 which shall be mandatory and shall not require the
          agreement of both Parties. The arbitration shall be governed by the
          United States Arbitration Act (9 U.S.C. ss.1 et seq.), and any award
          issued pursuant to such arbitration may be enforced in any court of
          competent jurisdiction. An agreement to arbitrate under this section,
          the requirement to arbitrate under Section 15.4, and any other
          agreement or consent to arbitrate entered into in accordance herewith
          will be specifically enforceable under the prevailing arbitration law
          of any court having jurisdiction. Notice of demand for arbitration

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       39

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 40
Rate Schedule FERC No. 9


          must be filed in writing with the other Party to this Agreement.
          Arbitration shall be conducted as follows:

          11.2.1    Arbitrators. The Parties shall attempt to agree on a person
                    -----------
                    with special knowledge and expertise with respect to the
                    matter at issue to serve as arbitrator. If the Parties
                    cannot agree on an arbitrator within ten days, each shall
                    then appoint one person to serve as an arbitrator and the
                    two thus appointed shall select a third arbitrator with such
                    special knowledge and expertise to serve as chairperson of
                    the panel of arbitrators; and such three arbitrators shall
                    determine all matters by majority vote. Prior to
                    appointment, each arbitrator shall agree to conduct such
                    arbitration in accordance with the terms of this Agreement.

          11.2.2    Arbitration Terms. To the extent not in conflict with the
                    -----------------
                    procedures set forth herein, which shall govern, such
                    arbitration shall be held in accordance with the prevailing
                    rules of the American Arbitration Association for Commercial
                    Arbitration in Philadelphia, Pennsylvania. The arbitrator(s)
                    shall have the right only to interpret and apply the terms
                    and conditions of this Agreement and to order any remedy
                    allowed by this Agreement, but may not change any term or
                    condition of this Agreement, deprive either Party of any
                    right or remedy expressly provided hereunder, or provide any
                    right or remedy that has been expressly excluded hereunder.
                    The arbitrator(s) shall give a written decision to the
                    Parties stating their findings of fact and conclusions of
                    law, and shall furnish to each Party a copy thereof signed
                    by the arbitrator(s) within five calendar days from the date
                    of their determination. The arbitrator's(s') decision shall
                    be final and binding upon the Parties. Each Party shall pay
                    the cost of the arbitrator(s) with respect to those issues
                    as to which they do not prevail, as determined by the
                    arbitrator(s).

11.3      FERC Jurisdiction. Subject to the limitations stated in Section 15.5,
          -----------------
          nothing in this Agreement shall preclude any Party from filing a
          petition or complaint with FERC with respect to any arbitrable claim
          over which FERC has exclusive jurisdiction. To the extent that FERC

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       40

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 41
Rate Schedule FERC No. 9


          asserts or accepts jurisdiction over such claim, the decision,
          findings of fact or order of FERC shall be final and binding, subject
          to judicial review under the Federal Power Act, and any arbitration
          proceedings that may have commenced with respect to such claim prior
          to the assertion or acceptance of jurisdiction by FERC shall be
          terminated.

                   ARTICLE 12: INDEMNIFICATION AND LIABILITY

12.1      Title Transfer. Title to, possession of, and risk of loss of the
          --------------
          Unforced Capacity and Energy scheduled and accepted or delivered
          hereunder shall transfer from Supplier to PPL Electric at the Delivery
          Point. Supplier warrants that at the time of delivery Supplier shall
          have good title to the Unforced Capacity and Energy sold and delivered
          hereunder and the right to sell such to PPL Electric.

12.2      Supplier's Indemnification of PPL Electric. Supplier hereby agrees to
          ------------------------------------------
          indemnify, defend and hold harmless PPL Electric, its agents, servants
          and Affiliates and the respective officers, directors, employees and
          representatives (collectively, "PPL Electric's Indemnitees") of each,
          from and against any and all losses, claims, damages or liabilities
          (including reasonable attorneys' fees actually incurred, damage to
          property, penalties or fines imposed by government authorities, and
          injury to or death of any person) arising out of: (a) the fraud,
          negligence, or willful misconduct of Supplier relating to the Unforced
          Capacity and Energy delivered under this Agreement until such Unforced
          Capacity and Energy has been delivered to PPL Electric at the Delivery
          Point; and (b) Supplier's breach of this Agreement or failure to
          perform any of the obligations hereunder. Supplier shall not be
          responsible to indemnify, defend or hold harmless PPL Electric to the
          extent the losses, claims, damages or liabilities are caused by the
          fraud, negligence or the willful misconduct of the PPL Electric's
          Indemnitees.

12.3      PPL Electric's Indemnification of Supplier. PPL Electric hereby agrees
          ------------------------------------------
          to indemnify, defend and hold harmless Supplier, its agents, servants
          and Affiliates and the respective officers, directors, employees and


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       41

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 42
Rate Schedule FERC No. 9


          representatives (collectively, "Supplier's Indemnitees") of each, from
          and against any and all losses, claims, damages or liabilities
          (including reasonable attorneys' fees actually incurred, the loss
          of/or claims for loss or damage to property, penalties or fines
          imposed by government authorities, and injury to or death of any
          person) arising out of: (a) the fraud, negligence, or willful
          misconduct of PPL Electric relating to the Unforced Capacity and
          Energy delivered under this Agreement after such Unforced Capacity and
          Energy has been delivered to PPL Electric at the Delivery Point; and
          (b) PPL Electric's breach of this Agreement or failure to perform any
          of the obligations hereunder. PPL Electric shall not be responsible to
          indemnify, defend or hold harmless Supplier to the extent the losses,
          claims, damages or liabilities are caused by the fraud, negligence or
          the willful misconduct of the Supplier's Indemnitees.

12.4      Indemnification Procedures. Any Party seeking indemnification under
          --------------------------
          this Agreement shall give the other Party prompt notice of such claim.
          To the extent that the other Party will have been actually and
          materially prejudiced as a result of the failure of the other Party to
          provide such prompt notice, such notice will be a condition precedent
          to any liability of the other Party under the indemnification
          provisions contained in this Agreement. Neither Party may settle or
          compromise any claim for which indemnification is sought under this
          Agreement without the prior consent of the other Party, provided that
          such consent shall not be unreasonably withheld or delayed. Each
          Party's obligations under this Agreement towards the other Party and
          the other Party's Indemnitees are conditioned upon such other Party's
          Indemnitees providing such cooperation as the indemnifying Party may
          reasonably request in connection with its defense or settlement of the
          claim or suit against such other Party's Indemnitees.

12.5      LIMITATION OF LIABILITY. IN NO EVENT OR UNDER ANY CIRCUMSTANCES SHALL
          -----------------------
          EITHER PARTY (INCLUDING SUCH PARTY'S AFFILIATES AND THEIR RESPECTIVE
          REPRESENTATIVES, AGENTS, SERVANTS, OFFICERS, DIRECTORS, EMPLOYEES AND
          AGENTS) BE LIABLE TO THE OTHER PARTY (INCLUDING SUCH PARTY'S


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       42

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 43
Rate Schedule FERC No. 9


          AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES, AGENTS, SERVANTS,
          OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS) FOR ANY SPECIAL,
          INCIDENTAL, EXEMPLARY, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
          DAMAGES IN THE NATURE OF LOST PROFITS, WHETHER SUCH LOSS IS BASED ON
          CONTRACT, WARRANTY OR TORT (INCLUDING INTENTIONAL ACTS, ERRORS OR
          OMISSIONS, NEGLIGENCE, INDEMNITY, STRICT LIABILITY OR OTHERWISE).

12.6      Limitation of Liability for Retail Tariff Actions. Subject to the
          -------------------------------------------------
          requirements set forth in the Retail Tariff and the Restructuring
          Settlement (as applied by the PUC) and Section 12.6.1 of this
          Agreement, PPL Electric, or its designated agent or contractor, shall
          remain the POLR for retail customers in its service territory and
          shall continue to perform the retail functions, services and
          customer-care responsibilities associated with PPL Electric's retail
          customers, including management of the Retail Tariff's Demand Free
          Days Program, Interruptible Service Rate and Price Response Service.
          Accordingly, except as provided in Section 12.6.1 of this Agreement,
          Supplier and PPL Electric agree that PPL Electric shall be entitled to
          take those actions that PPL Electric deems appropriate, in its sole
          discretion, in complying with its obligations under the Retail Tariff,
          the Restructuring Settlement and the laws of the Commonwealth of
          Pennsylvania. PPL Electric shall not be responsible to Supplier for
          any losses, claims, damages or liabilities of any kind for those
          actions it determines, in its sole discretion, are appropriate in
          meeting those obligations. Except as provided in Section 12.6.1 of
          this Agreement, PPL Electric shall not be responsible to Supplier for
          any losses, claims, damages or liabilities of any kind for any action
          or inaction taken pursuant to the load management provisions of the
          Retail Tariff, including Demand Free Days Program, Interruptible
          Service Rate and Price Response Service.

          12.6.1    Failure to Comply With Directions of Primary Supplier. PPL
                    -----------------------------------------------------
                    Electric shall institute Load Management Actions at such
                    times and for such duration as directed by the Primary
                    Supplier. If PPL Electric fails to institute a Load
                    Management Action when so directed by the Primary Supplier,

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       43

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 44
Rate Schedule FERC No. 9


                    and the implementation of the Load Management Action would
                    have been consistent with the requirements of the Retail
                    Tariff, PPL Electric shall pay Supplier, on the earlier of
                    the date payment would otherwise be due in respect of the
                    month in which the failure to call such Load Management
                    Action occurred or within five Business Days of invoice
                    receipt, an amount equal to the positive difference, if any,
                    obtained by subtracting: (a) the sum of the Monthly
                    Generation Revenue attributable to the Load Management
                    Energy and the amount of any advance payment attributable to
                    the Load Management Energy as calculated on a kilowatt-hour
                    basis and adjusted for seasonal variations; from (b) the
                    Load Management Energy Cost. The invoice submitted by
                    Supplier for these amounts shall include a written statement
                    explaining in reasonable detail the calculation of such
                    amount.

12.7      Limitation of Liability for Outages and Reliability Actions. Provided
          -----------------------------------------------------------
          that PPL Electric manages and maintains its transmission and
          distribution systems in accordance with Good Utility Practice, PPL
          Electric shall not be responsible to Supplier for any losses, claims,
          damages or liabilities associated with the failure to accept all or
          part of the Unforced Capacity and Energy under this Agreement or the
          interruption by PPL Electric of POLR Service due to: (a) outages or
          failures on PPL Electric's transmission or distribution system; or (b)
          actions taken by PPL Electric to protect the security and integrity of
          the PPL Electric transmission or distribution system.

12.8      RFP Information. No member of PPL Electric or its representatives made
          ---------------
          any representation or warranty as to the accuracy, reliability or
          completeness of the RFP and the information contained on the RFP
          Website (including forecasts), or shall have any liability for any
          information, representations or omissions from the RFP and the
          information contained on the RFP Website (including forecasts). Any
          discussion of legislation, regulation, Retail Tariff requirements, or
          Restructuring Settlement requirements in the RFP or the RFP Website
          was provided for convenience, and no representation was made that the

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       44

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 45
Rate Schedule FERC No. 9


          RFP or the information contained on the RFP Website provided a
          complete explanation of any legislation, regulation, Retail Tariff
          requirement, or Restructuring Settlement requirement.

                    ARTICLE 13: AUDITING AND CONFIDENTIALITY

13.1      Auditing. Each Party has the right, 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 requested,
          Supplier shall provide to PPL Electric statements evidencing the
          quantity of Unforced Capacity provided and Energy delivered at the
          Delivery Point. If any such examination reveals any inaccuracy in any
          statement, the necessary adjustments in such statement and the
          payments thereof will be made promptly and shall bear interest
          calculated at the Interest Rate from the date the overpayment or
          underpayment was made until paid; provided, however, that no
          adjustment for any statement or payment will be made unless objection
          to the accuracy thereof was made prior to the lapse of 12 months from
          the rendition thereof, and thereafter any objection shall be deemed
          waived.

13.2      PJM Requirements. In recognition of the importance of the Supplier
          ----------------
          complying fully with all applicable PJM Standards and the potential
          adverse impact on PPL Electric for failure to so comply, Supplier
          agrees, consents and authorizes PPL Electric to request PJM to advise
          or notify PPL Electric from time to time about the status of the
          Supplier's compliance with the PJM Standards, as well as Supplier's
          failure to provide or maintain during the term of this Agreement the
          Unforced Capacity and Energy resources in such amounts and of such
          type, nature and extent as represented to PPL Electric in this
          Agreement.

13.3      Confidentiality. Neither Party shall disclose information obtained
          ---------------
          under this Agreement and designated by the other Party as
          confidential, except: (a) to the Party's employees, lenders, counsel,
          accountants or advisors who have a need to know such information and


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       45

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 46
Rate Schedule FERC No. 9


          have agreed to keep such terms confidential; or (b) in order to comply
          with any applicable law, regulation, or any exchange, control area,
          independent system operator or Regional Transmission Organization
          rule, or in connection with any court or regulatory proceeding.
          However, each Party shall, to the extent practicable, use reasonable
          efforts to prevent or limit the disclosure and shall provide
          reasonable notice to the other Party prior to the disclosure. The
          Parties shall be entitled to all remedies available at law or in
          equity to enforce, or seek relief in connection with, this
          confidentiality obligation. Information designated as confidential and
          disclosed by either Party to the other Party as part of the RFP
          leading up to this Agreement shall be protected as confidential by
          both Parties under this provision.

                             ARTICLE 14: ASSIGNMENT

14.1      Assignment. Neither Party shall assign (including a merger,
          ----------
          consolidation or sale of all or substantially all of the assets of
          such Party), transfer, convey, pledge, or dispose of this Agreement in
          whole or in part, or any of the rights, interests, or obligations
          hereunder without the prior written consent of the other Party, which
          consent shall not be unreasonably withheld.

14.2      Release of Rights. No assignment (including a merger, consolidation or
          -----------------
          sale of all or substantially all of the assets of such Party),
          transfer, conveyance, pledge or disposition of rights, interests or
          obligations under this Agreement by a Party shall relieve that Party
          from liability and financial responsibility for the performance
          thereof after any such transfer, assignment, conveyance, pledge or
          disposition unless and until: (a) the non-assigning Party has
          consented in writing to such assumption and to a release of the
          assigning Party from such liability, such consent not to be
          unreasonably conditioned, delayed or withheld; and (b) the transferee
          or assignee shall agree in writing to assume the obligations and
          duties of the assigning Party under this Agreement and, in the case of
          the transferee or assignee of the Supplier, certify in writing that
          its Credit Rating is above or equal to "BBB-" (in the case of S&P),
          "Baa3" (in the case of Moody's), and "BBB-" (in the case of
          FitchIBCA).

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       46

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 47
Rate Schedule FERC No. 9


14.3      Non-complying Transfers. Any assignment, transfer, conveyance, pledge
          -----------------------
          or disposition of this Agreement or any rights, obligations or
          interests hereunder by any Party without the written consent of the
          Party shall be void and of no force or effect.

14.4      Successors and Assigns. This Agreement shall inure to the benefit of
          ----------------------
          and be binding upon the Parties and their valid and permitted
          successors and assigns.

                             ARTICLE 15: REGULATORY

15.1     Regulatory Approvals.
         --------------------

          15.1.1    Filings. Supplier and PPL Electric will make any filings of
                    -------
                    this Agreement with regulatory agencies that may be
                    necessary to enable it to become effective, including a
                    filing by Supplier with FERC and, if Supplier is an
                    Affiliate of PPL Electric, a filing by PPL Electric with the
                    PUC. Supplier's filing with FERC will be made no later than
                    two Business Days after execution of this Agreement, unless
                    otherwise agreed to by the Parties. Both Parties will
                    reasonably cooperate with each other with respect to such
                    filings and provide to each other any information reasonably
                    required to enable compliance with applicable filing and
                    regulatory requirements.

          15.1.2    Condition Precedent. This Agreement is expressly contingent
                    -------------------
                    on all required regulatory actions for all generation supply
                    agreements necessary for PPL Electric to meet its POLR
                    obligations from January 1, 2002 through December 31, 2009,
                    including: (a) the filing by suppliers with FERC of the
                    generation supply agreements with PPL Electric; (b) the
                    acceptance for filing by FERC of the generation supply
                    agreement, if any, between PPL Electric and an Affiliate;
                    and (c) the approval by the PUC of the generation supply
                    agreement, if any, between PPL Electric and an Affiliate. If
                    any of the regulatory actions identified in this section is

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       47

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 48
Rate Schedule FERC No. 9


                    not completed by July 16, 2001, in a form that is acceptable
                    to the parties to the agreement subject to the required
                    regulatory action, PPL Electric may, at its sole discretion,
                    terminate and make null and void this Agreement. If
                    terminated, the Parties to this Agreement shall have the
                    option, but not the obligation, to renegotiate a new
                    agreement or terminate their relationship.

15.2      EGS Status. Nothing in this Agreement is intended to preclude Supplier
          ----------
          from becoming an EGS or otherwise providing retail electricity
          services to end-use customers in Pennsylvania.

15.3      Future Laws. This Agreement is made subject to present or future state
          -----------
          or federal laws, regulations, or orders properly issued by state or
          federal bodies having jurisdiction.

15.4      Regulatory Risk. If the PUC issues one or more orders that have a
          ---------------
          material adverse effect on the Monthly Generation Revenue that would
          have been paid to Supplier over the life of the Agreement but for such
          PUC order(s), including orders that require or approve changes to the
          Retail Tariff or Restructuring Settlement (other than changes
          identified in this Agreement), then the Parties shall attempt, in good
          faith, to negotiate a resolution that allocates between the Parties
          the impact of such PUC order(s) in a manner consistent with the
          allocation of risk contemplated by the obligations of the Parties
          under this Agreement prior to such PUC order(s) as affected by the
          Restructuring Settlement, and the Retail Tariff and the PUC procedures
          and rules in effect as of the date of this Agreement. If the Parties
          are unable to reach a voluntary agreement, then either Party may
          require the issue of how to allocate the impact of such PUC order(s)
          in a manner consistent with the allocation of risk contemplated by the
          obligations of the Parties under this Agreement prior to such PUC
          order(s), as affected by the Restructuring Settlement, and the Retail
          Tariff and the PUC procedures and rules in effect as of the date of
          this Agreement, to be submitted to mandatory and binding arbitration
          in accordance with Article 11 of this Agreement; provided that neither
          Party may request that the arbitrator(s) terminate this Agreement due
          to such PUC order(s).

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       48

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 49
Rate Schedule FERC No. 9


15.5      Sections 205 and 206 of the Federal Power Act. Notwithstanding any
          ---------------------------------------------
          provision of this Agreement to the contrary, the rates and payments
          for services specified herein shall remain in effect during the term
          of this Agreement, and shall not be subject to change through
          application to the FERC pursuant to the provisions of Sections 205 or
          206 of the Federal Power Act. The Parties hereby waive any and all
          rights to seek to modify the provisions of this Agreement, including
          the rates and payments stated herein, under Sections 205 and 206 of
          the Federal Power Act.

                         ARTICLE 16: GENERAL PROVISIONS

16.1      Governing Law and Venue. This Agreement and the rights and duties of
          -----------------------
          the Parties hereunder shall be governed by and construed, enforced and
          performed in accordance with the laws of the Commonwealth of
          Pennsylvania, without regard to principles of conflicts of law. Any
          such proceeding shall be brought in the Courts of the Commonwealth of
          Pennsylvania, except to the extent that the Parties agree to
          arbitration under Article 11 or the FERC has exclusive jurisdiction
          over the subject matter of the proceeding. Nothing in this Agreement
          is intended to confer jurisdiction, power or authority in the PUC over
          this Agreement or Supplier.

16.2      Notices. Any notice, request, demand, statement, or payment provided
          -------
          for in this Agreement shall be in writing, unless otherwise noted, and
          shall be sent by hand delivery, overnight courier service, or
          certified mail; provided, however, that notices of interruption or
          curtailment may be sent verbally, effective immediately and, upon
          request, confirmed in writing. Notice by hand delivery shall be
          effective at the close of business on the day actually received, if
          received during business hours on a Business Day, and otherwise shall
          be effective at the close of business on the next Business Day. Notice
          by overnight courier service or certified mail shall be effective two
          Business Days after it was sent. Notices shall be addressed to the

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       49

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 50
Rate Schedule FERC No. 9


          Parties as follows or to such other address as PPL Electric or
          Supplier shall from time to time designate by letter properly
          addressed:

<TABLE>
<CAPTION>

          PPL Electric:
          NOTICES & CORRESPONDENCE                           INVOICES
          ------------------------                           --------

<S>                                                          <C>
          PPL Electric Utilities Corporation                 PPL Electric Utilities Corporation
          Two North Ninth Street                             Two North Ninth Street
          Allentown, PA  18101-1179                          Allentown, PA  18101-1179
          Attn:  CONTRACT ADMINISTRATION (GENA9-4)           Attn:  ACCOUNTS PAYABLE (GENTW-13)
          Fax: 610-774-5694                                  Fax: 610-774-4415

          Supplier:
          NOTICES & CORRESPONDENCE                           PAYMENTS
          ------------------------                           --------

          PPL ENERGYPLUS, LLC                                PPL ENERGYPLUS, LLC
          Two North Ninth Street                             Two North Ninth Street
          Allentown, PA  18101-1179                          Allentown, PA  18101-1179
          Attn: CONTRACT ADMINISTRATION (GENTW-7)            Attn: CASH RECEIPTS (GENTW-7)
          Fax:  610-774-5077                                 Fax: 610-774-4511
</TABLE>

16.3      Relationship. This Agreement shall not be construed to create an
          ------------
          association, trust, partnership, or joint venture, or to impose a
          trust or partnership duty, obligation, or liability or agency
          relationship on or with regard to either Party.

16.4      Entire Agreement. This Agreement contains the complete and exclusive
          ----------------
          agreement and understanding between the Parties as to its subject
          matter, and supersedes all prior written and oral proposals,
          confidentiality agreements, understandings, statements and
          representations, all of which are merged herein. There are no
          restrictions, promises, representations, warranties, covenants or
          undertakings other than those expressly set forth or referred to
          herein. This Agreement constitutes the definite agreement between the
          Parties as contemplated by the confidentiality agreements entered into
          as part of the RFP process.

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       50

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 51
Rate Schedule FERC No. 9


16.5      Waiver. The failure of either Party hereto to enforce at any time any
          ------
          provision of this Agreement shall not be construed to be a waiver of
          such provision, nor in any way to affect the validity of this
          Agreement or any part hereof or the right of a Party thereafter to
          enforce each and every such provision. A waiver under this Agreement
          must be in writing and state that it is a waiver. No waiver of any
          breach of this Agreement shall be held to constitute a waiver of any
          other or subsequent breach.

16.6      Interpretation of Agreement.
          ---------------------------

          16.6.1    Headings. The headings used herein are for convenience and
                    --------
                    reference purposes only and shall in no way affect the
                    meaning or interpretation of the provisions of this
                    Agreement.

          16.6.2    Experienced Parties. The Parties agree that this Agreement
                    -------------------
                    is between two commercially experienced parties. Therefore,
                    in the event an ambiguity or question of intent or
                    interpretation arises, no presumption or burden of proof
                    shall arise favoring or disfavoring any Party by virtue of
                    authorship of any of the provisions of this Agreement.

          16.6.3    Include. The words "include" "including" or "includes" or
                    -------
                    any form thereof shall be interpreted to mean "including
                    without limitation" or "includes without limitation"
                    whenever used in this Agreement.

16.7      Counterparts. This Agreement may be executed in counterparts, each of
          ------------
          which shall be deemed an original, but all of which together shall
          constitute one and the same instrument.

16.8      Severability. Except as otherwise stated herein, any provision,
          ------------
          article or section of this Agreement that is declared or rendered
          unlawful by a court of law or regulatory agency with jurisdiction over
          the Parties, or deemed unlawful because of statutory change, will not

Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001


                                       51

<PAGE>

PPL EnergyPlus, LLC                                        Original Sheet No. 52
Rate Schedule FERC No. 9


          otherwise affect the lawfulness, enforceability and applicability of
          the remaining provisions, articles or sections of this Agreement, nor
          shall it affect the obligations that arise under this Agreement.

16.9      No Third Party Beneficiaries. This Agreement is intended to be solely
          ----------------------------
          for the benefit of the Parties and their valid successors and
          permitted assigns and is not intended to and shall not confer any
          rights or benefits on any third party not a signatory hereto.

          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement to
be effective as of the day and year first written above.

PPL Electric Utilities Corporation      PPL EnergyPlus, LLC


By:     /s/ Michael E. Bray             By:      /s/ John F. Cotter
        -----------------------------            -------------------------------

Name:   Michael E. Bray                 Name:    John F. Cotter
        -----------------------------            -------------------------------

Title:                                  Title:   Vice President - Energy
        President                                Marketing and Trading
        -----------------------------            -------------------------------


Issued by:    John F. Cotter                          Effective: January 1, 2002
              Vice President - Energy Marketing and Trading
Issued on:    June 20, 2001

                                       52