Document:

<PAGE>

                                                                   Exhibit 10(E)

________________________________________________________________________________

                             ASSET SALE AGREEMENT

                                    BETWEEN

                             NEVADA POWER COMPANY,

                               NRG ENERGY, INC.

                                      AND

                             DYNEGY HOLDINGS INC.

                                      FOR

                            THE CLARK ASSET BUNDLE

________________________________________________________________________________
<PAGE>

                               TABLE OF CONTENTS

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                                   ARTICLE I
                                  DEFINITIONS.............................   1

1.1  Definitions..........................................................   1

                                  ARTICLE II
                             PURCHASE AND SALE............................  13

2.1  The Sale.............................................................  13
2.2  Excluded Assets......................................................  14
2.3  Assumed Liabilities..................................................  14
2.4  Excluded Liabilities.................................................  17
2.5  License of Non-Transferred Intangible Assets.........................  20

                                  ARTICLE III
                               PURCHASE PRICE.............................  20

3.1  Purchase Price.......................................................  20
3.2  Purchase Price Adjustment............................................  21
3.3  Allocation of Purchase Price.........................................  22
3.4  Proration............................................................  23

                                  ARTICLE IV
                                THE CLOSING...............................  24

4.1  Time and Place of Closing............................................  24
4.2  Payment of Purchase Price............................................  24
4.3  Deliveries by Seller.................................................  24
4.4  Deliveries by Buyer..................................................  25

                                   ARTICLE V
                  REPRESENTATIONS AND WARRANTIES OF SELLER................  27

5.1  Organization; Qualification..........................................  27
5.2  Authority Relative to this Agreement.................................  27
5.3  Consents and Approvals; No Violation.................................  27
5.4  Reports..............................................................  28
5.5  Financial Statements.................................................  29
5.6  Undisclosed Liabilities..............................................  29
</TABLE>

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5.7      Absence of Certain Changes or Events.............................  29
5.8      Title to Real Property...........................................  29
5.9      Leasehold Interests..............................................  30
5.10     Improvements.....................................................  30
5.11     Insurance........................................................  30
5.12     Environmental Matters............................................  30
5.13     Labor Matters....................................................  31
5.14     ERISA; Benefit Plans.............................................  32
5.15     Real Property Encumbrances.......................................  32
5.16     Condemnation.....................................................  33
5.17     Certain Contracts and Arrangements...............................  33
5.18     Legal Proceedings, etc...........................................  33
5.19     Permits..........................................................  34
5.20     Regulation as a Utility..........................................  34
5.21     Taxes............................................................  34
5.22     Title to Personal Property.......................................  34
5.23     Water............................................................  35

                                       ARTICLE VI
                         REPRESENTATIONS AND WARRANTIES OF BUYER..........  35

6.1      Organization.....................................................  35
6.2      Authority Relative to this Agreement.............................  36
6.3      Consents and Approvals; No Violation.............................  36
6.4      Regulation as a Utility..........................................  37
6.5      Availability of Funds............................................  37

                                       ARTICLE VII
                                COVENANTS OF THE PARTIES..................  37

7.1      Conduct of Business of the Seller................................  37
7.2      Access to Information............................................  40
7.3      Expenses.........................................................  41
7.4      Further Assurances...............................................  41
7.5      Public Statements................................................  42
7.6      Consents and Approvals...........................................  42
7.7      Fees and Commissions.............................................  44
7.8      Use of Pollution Control Facilities..............................  44
7.9      Tax and Withholding Matters......................................  44
7.10     Supplements to Schedules.........................................  46
7.11     Employees........................................................  46
7.12     Risk of Loss.....................................................  48
7.13     Additional Covenants of the Buyer................................  49
</TABLE>

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7.14     Surveys and Certain Title Matters......................................................... 49
7.15     Documentation............................................................................. 50
7.16     Separation Issues......................................................................... 50
7.17     Additional Covenants of the Parties....................................................... 51

                                      ARTICLE VIII
                                   CLOSING CONDITIONS.............................................. 52

8.1      Conditions to Each Party's Obligations to Effect the Transactions
         Contemplated Hereby....................................................................... 52
8.2      Conditions to Obligations of Buyer........................................................ 53
8.3      Conditions to Obligations of Seller....................................................... 55

                                       ARTICLE IX
                                     INDEMNIFICATION............................................... 57

9.1      Indemnification........................................................................... 57
9.2      Defense of Claims......................................................................... 59

                                        ARTICLE X
                               TERMINATION AND ABANDONMENT......................................... 61

10.1     Termination............................................................................... 61
10.2     Procedure and Effect of Termination....................................................... 62

                                       ARTICLE XI
                                MISCELLANEOUS PROVISIONS........................................... 62

11.1     Amendment and Modification................................................................ 62
11.2     Waiver of Compliance; Consents............................................................ 62
11.3     No Survival of Representations and Warranties............................................. 62
11.4     Notices................................................................................... 63
11.5     Assignment................................................................................ 64
11.6     Arbitration............................................................................... 66
11.7     Governing Law............................................................................. 67
11.8     Counterparts.............................................................................. 67
11.9     Interpretation............................................................................ 67
11.10    Entire Agreement.......................................................................... 67
11.11    Bulk Sales or Transfer Laws............................................................... 67
</TABLE>

                                      iii
<PAGE>

                             ASSET SALE AGREEMENT

          ASSET SALE AGREEMENT, dated as of November 16, 2000 (the "Agreement"),
between Nevada Power Company, a Nevada corporation (the "Seller"), NRG Energy,
Inc., a Delaware corporation ("NRG"), and Dynegy Holdings Inc. ("Dynegy") a
Delaware corporation (collectively, the "Buyer").

          WHEREAS, the Seller owns and operates the "Purchased Assets" (as
defined herein); and

          WHEREAS, the Buyer desires to purchase and assume from the Seller, and
the Seller desires to sell to the Buyer, the Purchased Assets and certain
associated liabilities upon the terms and conditions hereinafter set forth in
this Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the parties hereto agree as follows:

                                   ARTICLE I
                                   ---------
                                  DEFINITIONS
                                  -----------

          1.1    Definitions. As used in this Agreement, the following terms
                 -----------
have the meanings specified or referred to in this Section 1.1:

          (1)  "Adjustment Amount" shall have the meaning set forth in Section
3.2(a) hereof.

          (2)  "Adjustment Statement" shall have the meaning set forth in
Section 3.2(a) hereof.

          (3)  "Affiliate" shall have the meaning set forth in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.

          (4)  "Agreement" means the Asset Sale Agreement, dated as of November
16, 2000, together with the Schedules and Exhibits thereto.

          (5)  "Ancillary Agreements" means the Interconnection Agreement, the
Transitional Power Purchase Agreement, the Operating Easement Agreements, the
Waste Water Treatment Agreement and the Water Supply Agreement.
<PAGE>

          (6)  "Assignment of Leases" means the Assignment of Leases in the form
of Exhibit A hereto.

          (7)  "Assumed Liabilities" shall have the meaning set forth in Section
2.3 hereof.

          (8)  "Benefit Plans" shall have the meaning set forth in Section
2.4(i) hereof.

          (9)  "Benefit Plans of Buyer" shall have the meaning set forth in
Section 7.11(d) hereof.

          (10) "Bill of Sale" means the Bill of Sale to be delivered at the
Closing with respect to the Purchased Assets which constitute personal property
and which are to be transferred at the Closing, substantially in the form of
Exhibit B hereto.

          (11) "Bonds" means the Pollution Control bonds, which were used to
finance the Pollution Control Facilities, as more fully described in Schedule
5.15.

          (12) "Business Day" means any day other than Saturday, Sunday and any
day which is a legal holiday or a day on which banking institutions in the State
of New York are authorized by law or other governmental action to close.

          (13) "Buyer" shall have the meaning set forth in the preface hereto.

          (14) "Buyer Representatives" means the Buyer's accountants, counsel,
environmental consultants, financial advisors and other authorized
representatives.

          (15) "Buyer Required Regulatory Approvals" shall have the meaning set
forth in Section 6.3(b) hereof.

          (16) "Buyer's Easements" shall have the meaning set forth in Section
4.3(f) hereof.

          (17) "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. (S)9601, et seq., as amended.
                                                           -------

          (18) "Clark Bundle" means the Clark Generating Station located in
Clark County, Nevada.

                                       2
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          (19) "Closing" shall have the meaning set forth in Section 4.1 hereof.

          (20) "Closing Date" shall have the meaning set forth in Section 4.1
hereof.

          (21) "COBRA" means the Consolidated Omnibus Reconciliation Act of
1985, as amended.

          (22) "Code" means the Internal Revenue Code of 1986, as amended.

          (23) "Collective Bargaining Agreements" shall have the meaning set
forth in Section 7.11(a) hereof.

          (24) "Confidentiality Agreement" means the Confidentiality and Auction
Protocols Agreement, dated March 14, 2000, between the Seller and NRG Energy,
Inc., and the Confidentiality and Auction Protocols Agreement dated April 7,
2000, between the Seller and Dynegy Power Corp. (a wholly owned subsidiary of
Dynegy Holdings Inc.).

          (25) "CPUC" means the California Public Utility Commission or any
successor thereto.

          (26) "CSFB" shall have the meaning set forth in Section 7.7 hereof.

          (27) "Direct Claim" shall have the meaning set forth in Section 9.2(c)
hereof.

          (28) "Dispute" shall have the meaning set forth in Section 11.6
hereof.

          (29) "Encumbrances" means any mortgages, pledges, liens, security
interests, conditional and installment sale agreements, activity and use
limitations, conservation easements, deed restrictions, encumbrances and charges
of any kind.

          (30) "Environmental Audit Agreement" means the proposed Environmental
Audit Agreement which Seller has been seeking to execute with the Nevada
Division of Environmental Protection ("NDEP") relating to the Clark Bundle.

                                       3
<PAGE>

          (31) "Environmental Laws" means all federal, state and local laws,
regulations, rules, ordinances, codes, decrees, judgments, directives, or
judicial or administrative orders relating to pollution or protection of the
environment, natural resources or human health and safety, including, without
limitation, laws relating to Releases or threatened Releases of Hazardous
Substances (including, without limitation, ambient air, surface water,
groundwater, land, surface and subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, Release,
transport or handling of Hazardous Substances, laws relating to record keeping,
notification, disclosure and reporting requirements respecting Hazardous
Substances, and laws relating to the management and use of natural resources.

          (32) "Environmental Permits" shall have the meaning set forth in
Section 5.12(a) hereof.

          (33) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.

          (34) "ERISA Affiliate" shall have the meaning set forth in Section
2.4(i) hereof.

          (35) "ERISA Affiliate Plans" shall have the meaning set forth in
Section 2.4(i) hereof.

          (36) "Estimated Adjustment Amount" means (i) the Estimated Maintenance
and Capital Expenditures Amount plus (ii) the Estimated Inventory Adjustment
Amount plus (iii) the Estimated Materials and Supplies Adjustment Amount.

          (37) "Estimated Closing Payment" shall have the meaning set forth in
Section 4.2 hereof.

          (38) "Estimated Inventory Adjustment Amount" means the book value, as
determined by an independent evaluator designated by the Seller and approved by
the Buyer, which approval shall not be unreasonably withheld, of the fuel
inventory priced as the Seller's weighted average fuel costs used at or in
connection with the Purchased Assets as of the date that is ten (10) days before
the Closing Date, which valuation shall be provided to the Buyer by the Seller
no later than five (5) days before the Closing Date.

          (39) "Estimated Maintenance and Capital Expenditures Amount" means the
Seller's estimate of the Maintenance and Capital Expenditures Amount, which
estimate shall be the Seller's good faith reasonable estimate of the Mainte-

                                       4
<PAGE>

nance and Capital Expenditures Amount actually incurred, as set forth in
Schedule 1.1(39) attached hereto as of the date set forth in such Schedule
1.1(39).

          (40) "Estimated Materials and Supplies Adjustment Amount" means the
Seller's good faith reasonable estimate of the book value of materials and
supplies used at or in connection with the Purchased Assets on the Materials and
Supplies Valuation Date.

          (41) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

          (42) "Excluded Assets" shall have the meaning set forth in Section 2.2
hereof.

          (43) "Excluded Liabilities" shall have the meaning set forth in
Section 2.4 hereof.

          (44) "Federal Power Act" means the Federal Power Act of 1935, as
amended.

          (45) "FERC" means the Federal Energy Regulatory Commission or any
successor thereto.

          (46) "Final Order" shall have the meaning set forth in Section 8.1(c)
hereof.

          (47) "Governmental Authority" means any executive, legislative,
judicial, regulatory or administrative agency, body, commission, department,
board, court, tribunal, arbitrating body or authority of the United States or
any foreign country, or any state, local or other governmental subdivision
thereof.

          (48) "Hazardous Substances" means (i) any petrochemical or petroleum
products, oil or coal ash, radioactive materials, radon gas, asbestos in any
form that is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contain dielectric fluid which may contain
levels of polychlorinated biphenyls; (ii) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "restricted hazardous materials," "extremely
hazardous substances," "toxic substances," "contaminants" or "pollutants" or
words of similar meaning and regulatory effect; or (iii) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any applicable Environmental Law.

                                       5
<PAGE>

          (49) "Holding Company Act" means the Public Utility Holding Company
Act of 1935, as amended.

          (50) "Hourly Employees" shall have the meaning set forth in Section
7.11(a) hereof.

          (51) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.

          (52) "Income Tax" means any federal, state, local or foreign Tax (i)
based upon, measured by or calculated with respect to net income, profits or
receipts (including, without limitation, capital gains Taxes and minimum Taxes)
or (ii) based upon, measured by or calculated with respect to multiple bases
(including, without limitation, corporate franchise taxes) if one or more of the
bases on which such Tax may be based, measured by or calculated with respect to,
is described in clause (i), in each case together with any interest, penalties,
or additions to such Tax.

          (53) "Indemnifiable Losses" shall have the meaning set forth in
Section 9.1(a) hereof.

          (54) "Indemnifying Party" shall have the meaning set forth in Section
9.1(c) hereof.

          (55) "Indemnitee" shall have the meaning set forth in Section 9.1(c)
hereof.

          (56) "Indenture" means Indenture of Mortgage and Deed of Trust dated
as of October 1, 1953, as amended from time to time, between the Seller and
Bankers Trust Company, as successor trustee.

          (57) "Independent Accounting Firm" means Deloitte & Touche LLP or such
other independent accounting firm of national reputation mutually appointed by
the Seller and the Buyer.

          (58) "Independent Appraiser" shall have the meaning set forth in
Section 3.3 hereof.

          (59) "Instrument of Assumption" means the Instrument of Assumption in
the form of Exhibit C attached hereto.

          (60) "Interconnection Agreement" means the Interconnection Agreement,
dated as of November 16, 2000, between the Seller and the Buyer.

                                       6
<PAGE>

          (61) "Inventory Adjustment Amount" shall have the meaning set forth in
Section 3.2(a) hereof.

          (62) "Knowledge" means the actual knowledge of the directors and
executive officers of the specified Person, which directors and executive
officers are charged with the responsibility for the particular function as of
the date of the Agreement, or with respect to any certificate delivered pursuant
to the Agreement, the date of delivery of such certificate.  In the case of
Seller, "executive officer" includes (i) any person listed on Schedule 1.1(62),
and (ii) any person who replaces a person listed on Schedule 1.1(62) between the
date of this Agreement and the Closing Date in a listed position or the
successor to that position.

          (63) "Leased Assets" shall have the meaning set forth in Section 7.4
hereof.

          (64) "Leases" shall have the meaning set forth in Section 5.9 hereof.

          (65) "Local 396 LOA" shall have the meaning set forth in Section
7.11(a) hereof.

          (66) "Maintenance and Capital Expenditures Adjustment Amount" shall
have the meaning set forth in Section 3.2(a) hereof.

          (67) "Maintenance and Capital Expenditures Amount" means the aggregate
amount of all funds actually expended on, or for which liabilities were accrued
in accordance with generally accepted accounting principles applied on a
consistent basis with respect to any maintenance expenditures and capital
expenditures beginning on the date of this Agreement and ending on the Closing
Date,  excluding (i) any unscheduled maintenance expenditures or capital
expenditures which are made by the Seller with the Buyer's consent, which shall
not be unreasonably withheld (ii) any maintenance expenditures or capital
expenditures made by Seller in breach of Section 7.1, but including (i) any
Scheduled Maintenance Expenditures or Scheduled Capital Expenditures, made with
respect to the Purchased Assets by the Seller, and (ii) any maintenance
expenditures and capital expenditures which were made by the Seller at the
Buyer's request, beginning on the date of this Agreement and ending on the
Closing Date.

          (68) "Management Employee" shall have the meaning set forth in Section
7.11(b) hereof.

                                       7
<PAGE>

          (69) "Management Transition Plan" means the Management Transition
Plan, Generation Bundled Employees, as detailed in the Generation Divestiture
Severance Packet of the Seller dated July, 2000.

          (70) "Material Adverse Effect" means any change or changes in or
effect on the Purchased Assets that is materially adverse to the business,
results of operations, financial condition or physical condition of the
Purchased Assets, individually or in the aggregate, except for (i) any change or
effect resulting from changes in the international, national, regional or local
wholesale or retail markets for electric power, (ii) any change or effect
resulting from changes in the international, national, regional or local markets
for any fuel used at the Purchased Assets, (iii) any change or effect resulting
from changes in the North American, national, regional or local electric
transmission systems, (iv) any change in applicable laws, judgments, orders or
decrees, (v) any conditions imposed by a Governmental Authority in connection
with the consents or approvals required for the transactions contemplated
hereby, and (vi) any materially adverse change in or effect on the Purchased
Assets which is cured (including by the payment of money) by the Seller before
the Termination Date.

          (71) "Materials and Supplies Adjustment Amount" shall have the meaning
set forth in Section 3.2 hereof.

          (72) "Materials and Supplies Valuation Date" means the date that is
ten (10) days prior to the Closing Date.

          (73) "Necessary Capital Expenditures" shall have the meaning set forth
in Section 7.1(c) hereof.

          (74) "Necessary Maintenance Expenditures" shall have the meaning set
forth in Section 7.1(e) hereof.

          (75) "Off-Site Location" means any real property other than the Real
Property.

          (76) "Operating Easement Agreements" means the operating easements
providing the right to continue operating and maintaining certain generation and
transmission facilities at the Purchased Assets, each in substantially the form
of Exhibit D or Exhibit E attached hereto.

          (77) "Operating Easements" means the Seller's Easements and/or Buyer's
Easements granted pursuant to the Operating Easement Agreements.

                                       8
<PAGE>

          (78) "OPUC" means the Oregon Public Utility Commission or any
successor thereto.

          (79) "Permits" shall have the meaning set forth in Section 5.19
hereof.

          (80) "Permitted Encumbrances" means (i) those exceptions to title to
the Purchased Assets listed on Schedule 5.8; (ii) subject to (S)(S) 7.14 and
8.2(g) any state of facts that a current survey of the Real Property would
disclose; (iii) with respect to any date before the Closing Date, Encumbrances
under the Indenture or under the pollution control bond indentures of trust
listed in Schedule 5.15; (iv) mortgages, liens, pledges, charges, Encumbrances
and restrictions incurred in connection with the Seller's purchase of properties
and assets after the date of the Seller Balance Sheet, but only if and to the
extent that such mortgage, lien, pledge, charge, Encumbrance or restriction is
against such properties or assets and secures all or a portion of the purchase
price therefor; (v) the Buyer's Easements and the Seller's Easements (in
accordance with the Operating Easement Agreements applicable to such easements
and the Interconnection Agreement); (vi) statutory liens for current Taxes,
assessments or other governmental charges not yet due or delinquent or the
validity of which is being contested in good faith by appropriate proceedings
and with respect to which Seller pays the Taxes, assessments or other government
charges under protest; (vii) mechanics', carriers', workers', repairers' and
other similar liens arising or incurred in the ordinary course of business
relating to obligations which are not yet due and payable or the validity of
which are being contested in good faith by appropriate proceedings in which
Seller has posted an appropriate bond to secure payment or placed sufficient
Funds in escrow pending the outcome of such dispute; (viii) zoning, entitlement,
conservation restriction and other land use and environmental regulations by
Governmental Authorities; and (ix) such other liens, imperfections in or failure
of title, charges, easements, restrictions and Encumbrances which do not
materially detract, individually or in the aggregate, from the value of or
materially interfere with the present use of the Purchased Assets and do not, in
the aggregate, have a Material Adverse Effect.

          (81) "Person" means any individual, partnership, joint venture,
corporation, limited liability company, limited liability partnership, trust,
unincorporated organization or Governmental Authority or any department or
agency thereof.

          (82) "Plan" shall have the meaning set forth in Section 7.11(d).

          (83) "Pollution Control Facilities" means pollution control facilities
relating to the Clark Bundle as more fully described in Schedule 5.15.

                                       9
<PAGE>

          (84) "PUCN" means the Public Utilities Commission of Nevada or any
successor thereto.

          (85) "Purchase Price" shall have the meaning set forth in Section 3.1
hereof.

          (86) "Purchased Assets" means, subject to the Permitted Encumbrances,
all of the right, title and interest in, to and under the real and personal
property, tangible or intangible, of the Seller constituting the Clark Bundle or
used principally for generation purposes in connection with such sites
including, without limitation, all of the Seller's right, title and interest in
the following assets:  (i) the Real Property described on Schedule 1.1(86)(i) as
associated with the Clark Bundle (the "Clark Bundle Real Property"); (ii) all
inventories of fuels, supplies, materials and critical spares located on or in
transit to the Clark Bundle Real Property on the Closing Date; (iii) the
machinery, equipment, vehicles, furniture and other personal property located on
or in transit to the Clark Bundle Real Property on the Closing Date, including,
without limitation, the items of personal property included in Schedule
1.1(86)(iii) as being associated with the Clark Bundle, and all warranties
against manufacturers or vendors relating thereto, to the extent that such
warranties are transferable without consent or with consent obtained through
Seller's commercially reasonable efforts pursuant to Section 7.6(b); (iv) the
contracts, agreements and personal property leases listed on Schedule
1.1(86)(iv) as being associated with  the Clark Bundle and which are assignable
without consent or with consent obtained through Seller's commercially
reasonable efforts pursuant to Section 7.6(b); (v) the Permits listed on
Schedule 1.1(86)(v) as being associated with the Clark Bundle, to the extent
transferable without consent or with consent obtained through Seller's
commercially reasonable efforts pursuant to Section 7.6(b); (vi) all books,
operating records, operating, safety and maintenance manuals, engineering design
plans, blueprints and as-built plans, specifications, procedures and similar
items of the Seller relating specifically to the aforementioned assets other
than books of account and associated with the Clark Bundle; (vii) the SO2
Allowances identified on Schedule 1.1(86)(vii) and associated with the Clark
Bundle; and (viii) any assets purchased or to be purchased by the Seller
pursuant to Section 7.4 and associated with the Clark Bundle; (ix) all
telephones, computer hardware, firmware, software, and associated licenses
located at and used in the operation of the Clark Bundle, including but not
limited to the computer assets listed on Schedule 1.1(86)(iii) but excluding
non-material licenses that cannot be transferred and other intangible assets to
be licensed by the Buyer pursuant to Section 2.5 of this Agreement; and (x) all
water rights specifically associated with the Clark Bundle, including but not
limited to the water rights listed on Schedule 5.19(a).

          (87) "Qualifying Offer of Employment" shall have the meaning set forth
in Section 7.11(b) hereof.

                                       10
<PAGE>

          (88) "Real Property" means each parcel of real property owned by the
Seller (or to which the Seller holds an interest therein), including, but not
limited to, buildings, structures and improvements located thereon, fixtures
contained therein and appurtenances thereto and easements and other rights
relating thereto and as more fully described on Schedule 5.8.

          (89) "Release" means release, spill, leak, discharge, dispose of,
pump, pour, emit, empty, inject, leach, dump or allow to escape into or through
the environment.

          (90) "Remediation" means an action of any kind to address a Release of
Hazardous Substance or the presence of Hazardous Substances at the Purchased
Assets or an Off-Site Location, including any or all of the following activities
to the extent they relate to or arise from the presence of a Hazardous Substance
at the Purchased Assets or an Off-Site Location:  (i) monitoring, investigation,
assessment, treatment, cleanup, containment, removal, mitigation, response or
restoration work; (ii) obtaining any permits, consents, approvals or
authorizations of any Governmental Authority necessary to conduct any such
activity; (iii) preparing and implementing any plans or studies for any such
activity; (iv) obtaining a written notice from a Governmental Authority with
jurisdiction over the Purchased Assets or an Off-Site Location under
Environmental Laws that no material additional work is required by such
Governmental Authority; (v) the use, implementation, application, installation,
operation or maintenance of removal actions on the Purchased Assets or an Off-
Site Location, remedial technologies applied to the surface or subsurface soils,
excavation and treatment or disposal of soils at an Off-Site Location, systems
for long-term treatment of surface water or ground water, engineering controls
or institutional controls; and (vi) any other activities reasonably determined
by a party to be necessary or appropriate or required under Environmental Laws
to address the presence or Release of Hazardous Substances at the Purchased
Assets or an Off-Site Location.

          (91) "Rules" shall have the meaning set forth in Section 11.6 hereof.

          (92) "Scheduled Capital Expenditures" means those capital expenditures
included on Schedule 1.1(92).

          (93) "Scheduled Maintenance Expenditures" means those maintenance
expenditures included on Schedule 1.1(93).

          (94) "SEC" means the Securities and Exchange Commission or any
successor thereto.

                                       11
<PAGE>

          (95)   "Securities Act" means the Securities Act of 1933, as amended.

          (96)   "Seller" shall have the meaning set forth in the preface
hereto.

          (97)   "Seller Agreements" means those agreements listed on Schedule
5.17(a), the Collective Bargaining Agreements and the Management Transition
Plan.

          (98)   "Seller Balance Sheet" shall have the meaning set forth in
Section 5.5 hereof.

          (99)   "Seller Required Regulatory Approvals" shall have the meaning
set forth in Section 5.3(b) hereof.

          (100)  "Seller's Easements" shall have the meaning set forth in
Section 4.4(d) hereof.

          (101)  "Separation Schedule" means the schedule to be delivered to the
Buyer by the Seller by the earlier of March 14, 2001 or thirty (30) days prior
to the Closing Date, which shall delineate the Purchased Assets from the
Seller's other assets and which shall be consistent with the separation schedule
summary and one line drawing attached hereto as Exhibit F.

          (102)  "SO2 Allowance" means an authorization by the Administrator of
the USEPA under the Clean Air Act, 42 U.S.C. (S)7401, et seq., to emit one ton
                                                      -------
of sulfur dioxide during or after a specified calendar year.

          (103)  "Subsidiary," when used in reference to any other person means
any corporation of which outstanding securities having ordinary voting power to
elect a majority of the Board of Directors of such corporation are owned
directly or indirectly by such other person.

          (104)  "Tax" means any tax, charge, fee, levy, penalty or other
assessment (other than any Income Tax) imposed by any U.S. federal, state, local
or foreign taxing authority, including, but not limited to, any excise,
property, sales, transfer, franchise, payroll, withholding, social security or
other tax, including any interest, penalties or additions attributable thereto.

          (105)  "Tax Return" means any return, report, information return,
declaration, claim for refund or other document (including any related or
supporting

                                       12
<PAGE>

information) supplied or required to be supplied to any authority with respect
to Taxes and including any supplement or amendment thereof.

          (106)  "Termination Date" shall have the meaning set forth in Section
10.1(b) hereof.

          (107)  "Third Party Claim" shall have the meaning set forth in Section
9.2(a) hereof.

          (108)  "Transitional Power Purchase Agreement" means Transitional
Power Purchase Agreement, dated as of November 16, 2000, between the Buyer and
the Seller.

          (109)  "TPPA Amount" shall have the meaning set forth in Section 3.1.
hereof.

          (110)  "USEPA" means the United States Environmental Protection
Agency, or any successor agency thereto.

          (111)  "WARN Act" means the Federal Worker Adjustment Retraining and
Notification Act of 1988, as amended.

          (112)  "Waste Water Treatment Agreement" means a Waste Water Treatment
Agreement, to be negotiated and executed between Seller, Buyer and the buyer of
the Sunrise Bundle located in Clark County, Nevada, pursuant to Section 7.17(d).

          (113)  "Water Supply Agreement" means a Water Supply Agreement, to be
negotiated and executed between Buyer and the buyer of the Harry Allen Bundle
located in Clark County, Nevada, pursuant to Section 7.17(d).

                                  ARTICLE II
                                  ----------
                               PURCHASE AND SALE
                               -----------------

          2.1    The Sale. Upon the terms and subject to the satisfaction of the
                 --------
conditions contained in this Agreement, at the Closing, the Seller shall sell,
assign, convey, transfer and deliver to the Buyer, and the Buyer shall purchase
and acquire from the Seller, free and clear of all Encumbrances (except for
Permitted Encumbrances and the Operating Easement(s) granted in accordance with
the Operating Easement Agreements and the Interconnection Agreement), the
Purchased Assets.

                                       13
<PAGE>

          2.2    Excluded Assets.   Notwithstanding any provision herein to the
                 ---------------
contrary, the Purchased Assets shall not include the following (collectively,
the "Excluded Assets"):

          (a)  all cash, cash equivalents, bank deposits, accounts receivable,
and any income, sales, payroll or other tax receivables;

          (b)  the names "Sierra Pacific Resources," "Sierra Pacific Power
Company," "Sierra Pacific," "Nevada Power Company" and "Nevada Power" or any
related or similar trade names, trademarks, service marks or logos;

          (c)  transmission, substation and communication facilities and related
support equipment described in Schedule 2.2(c);

          (d)  any refund, credit penalty payment, adjustment or reconciliation
(i) related to Real Property, personal property or other Taxes paid prior to the
Closing Date in respect of the Purchased Assets, whether such refund, adjustment
or reconciliation is received as a payment or as a credit against future Taxes
payable, or (ii) arising under the Seller Agreements and relating to a period
before the Closing Date;

          (e)  except to the extent specifically required by law and except such
personnel records set forth on Schedule 2.2(e), the personnel records relating
to any employees of the Seller;

          (f)  the rights and assets described in the Separation Schedule as not
part of the Purchased Assets; and

          (g)  the SO2 Allowances identified on Schedule 2.2(g);

          (h)  any agreement between Seller and an Affiliate of Seller, except
as disclosed on Schedule 2.2(h); and

          (i)  any agreement for the purchase or sale of energy, capacity or
ancillary services from the Clark Bundle, other than the Transitional Power
Purchase Agreement, Interconnection Agreement or as disclosed on Schedule
2.2(i).

          2.3    Assumed Liabilities. On the Closing Date, the Buyer shall
                 -------------------
deliver to the Seller the Instrument of Assumption pursuant to which the Buyer
shall assume and agree to discharge to the maximum extent permitted by law, all
of the liabilities and obligations of the Seller, direct or indirect, known or
unknown, absolute or contingent, which relate to the Purchased Assets, other
than Excluded Liabilities, in accordance with the respective terms and subject
to the respective

                                       14
<PAGE>

conditions thereof, including, without limitation, the following liabilities and
obligations:

          (a)  all liabilities and obligations of the Seller to be paid or
performed after the Closing Date arising under (i) the Seller Agreements, the
Environmental Permits, the Permits, the Leases, contracts and any other
agreements assigned to the Buyer pursuant to this Agreement in accordance with
the terms thereof, and (ii) the leases, contracts and other agreements entered
into by the Seller with respect to the Purchased Assets after the date hereof
consistent with the terms of this Agreement (including in the case of (i) and
(ii), without limitation, agreements with respect to liabilities for real or
personal property taxes or other Taxes on any of the Purchased Assets); except,
in each case, to the extent such liabilities and obligations, but for a breach
or default by the Seller, would have been paid, performed or otherwise
discharged on or prior to the Closing Date or to the extent the same arise out
of any such breach or default;

          (b)  all liabilities and obligations associated with the Purchased
Assets in respect of Taxes for which the Buyer is liable pursuant to Section 7.9
hereof;

          (c)  any liabilities and obligations for which the Buyer has
indemnified the Seller pursuant to Section 9.1 hereof;

          (d)  all liabilities to employees for which the Buyer is liable
pursuant to Section 7.11 hereof, including the Collective Bargaining Agreements
and the Management Transition Plan;

          (e)  any liability, obligation or responsibility under or related to
former, current or future Environmental Laws or the common law, whether such
liability or obligation or responsibility is known or unknown, contingent or
accrued, arising as a result of or in connection with (i) any violation or
alleged violation of Environmental Law, prior to the Closing Date, with respect
to the ownership or operation of the Purchased Assets, including, without
limitation, any fines or penalties that arise in connection with the ownership
or operation of the Purchased Assets prior to the Closing Date or the costs
associated with correcting any such violations; (ii) loss of life, injury to
persons or property or damage to natural resources (whether or not such loss,
injury or damage arose or was made manifest before the Closing Date or arises or
becomes manifest after the Closing Date), caused (or allegedly caused) by the
presence or Release of Hazardous Substances at, on, in, under, discharged from,
emitted from or migrating from the Purchased Assets prior to the Closing Date,
including, without limitation, Hazardous Substances contained in building
materials at the Purchased Assets or in the soil, surface water, sediments,
groundwater, landfill cells, or in other environmental media at the

                                       15
<PAGE>

Purchased Assets; and (iii) the investigation and/or Remediation (whether or not
such investigation or Remediation commenced before the Closing Date or commences
after the Closing Date) of Hazardous Substances that are present or have been
Released prior to the Closing Date at, on, in, under, discharged from, emitted
from or migrating from the Purchased Assets, including, without limitation,
Hazardous Substances contained in building materials at the Purchased Assets or
in the soil, surface water, sediments, groundwater, landfill cells, or in other
environmental media at the Purchased Assets; provided, as to all of the above,
that nothing set forth in this Section 2.3(e) shall require the Buyer to assume
any liabilities that are expressly excluded in Section 2.4 hereof;

          (f)  any liability, obligation or responsibility under or related to
former, current or future Environmental Laws or the common law, whether such
liability or obligation or responsibility is known or unknown, contingent or
accrued, arising as a result of or in connection with (i)  any violation or
alleged violation of Environmental Law, on or after the Closing Date, with
respect to the ownership or operation of the Purchased Assets; (ii)  compliance
with applicable Environmental Laws on or after the Closing Date with respect to
the ownership or operation of the Purchased Assets; (iii)  loss of life, injury
to persons or property or damage to natural resources caused (or allegedly
caused) by the presence or Release of Hazardous Substances at, on, in, under,
discharged from, emitted from or migrating from the Purchased Assets on or after
the Closing Date, including, without limitation, Hazardous Substances contained
in building materials at the Purchased Assets or in the soil, surface water,
sediments, groundwater, landfill cells, or in other environmental media at the
Purchased Assets; (iv)  loss of life, injury to persons or property or damage to
natural resources caused (or allegedly caused) by the off-site disposal,
storage, transportation, discharge, Release, recycling, or the arrangement for
such activities, of Hazardous Substances, on or after the Closing Date, in
connection with the ownership or operation of the Purchased Assets; (v)  the
investigation and/or Remediation of Hazardous Substances that are present or
have been released on or after the Closing Date at, on, in, under, discharged
from, emitted from or migrating from the Purchased Assets, including, without
limitation, Hazardous Substances contained in building materials at the
Purchased Assets or in the soil, surface water, sediments, groundwater, landfill
cells or in other environmental media at the Purchased Assets; and (vi)  the
investigation and/or Remediation of Hazardous Substances that are disposed,
stored, transported, discharged, Released, recycled, or the arrangement of such
activities, on or after the Closing Date, in connection with the ownership or
operation of the Purchased Assets, at any Off-Site Location; provided, that
nothing set forth in this Section 2.3(f) shall require the Buyer to assume any
liabilities that are expressly excluded in Section 2.4 hereof;

          (g)  all liabilities and obligations of the Seller with respect to the
Purchased Assets under the agreements or consent orders set forth on Schedule
5.12;

                                       16
<PAGE>

          (h)  subject to Sections 7.1(c) and (e), all liabilities incurred by
the Seller with respect to the Maintenance and Capital Expenditures Amount made
with respect to the Purchased Assets by the Seller except for any liabilities
that Buyer has already paid to Seller at Closing as an accrued liability
included in the Estimated Adjustment Amount;

          (i)  all liabilities or obligations relating to leases for the
Purchased Assets; and

          (j)  all other liabilities or obligations exclusively relating to the
Purchased Assets no matter when the events or occurrences giving rise to such
liabilities or obligations took place.

All of the foregoing liabilities and obligations to be assumed by the Buyer
hereunder (excluding any Excluded Liabilities) are collectively referred to
herein as the "Assumed Liabilities."  It is understood and agreed that nothing
in this Section 2.3 shall constitute a waiver or release of any claims arising
out of the contractual relationships between the Seller and the Buyer.  Nothing
in this Section 2.3 shall be construed to require Buyer to assume any liability
excluded by Section 2.4.

          2.4    Excluded Liabilities. The Buyer shall not assume or be
                 --------------------
obligated to pay, perform or otherwise discharge the following liabilities
(collectively, the "Excluded Liabilities"):

          (a)  any liabilities or obligations of the Seller in respect of any
Excluded Assets or other assets of the Seller which are not Purchased Assets;

          (b)  any liabilities or obligations in respect of Taxes attributable
to the Purchased Assets for taxable periods ending on or prior to the Closing
Date, except for Taxes for which the Buyer is liable pursuant to Section 7.9(a)
hereof;

          (c)  any liabilities, obligations or responsibilities relating to the
disposal, storage, transportation, discharge, Release, recycling, or the
arrangement for such activities, by the Seller, of Hazardous Substances that
were generated at the Purchased Assets, at any Off-Site Location, where the
disposal, storage, transportation, discharge, Release, recycling or the
arrangement for such activities at such Off-Site Location occurred prior to the
Closing Date, provided that for purposes of this Section 2.4(c), "Off-Site
Location" does not include any location to which Hazardous Substances disposed
of, discharged from, emitted from or Released at the Purchased Assets have
migrated from the Purchased Assets including, but not limited to, surface waters
that have received waste water discharges from the Purchased Assets;

                                       17
<PAGE>

          (d)  any liabilities, obligations or responsibilities relating to (i)
the transmission facilities delineated in the Interconnection Agreement or
Operating Easement Agreements or (ii) any Seller's operations on, or usage of,
the operating easements, including, without limitation, liabilities, obligations
or responsibilities arising as a result of or in connection with (A) any
violation or alleged violation of Environmental Laws and (B) loss of life,
injury to persons or property or damage to natural resources, except to the
extent caused by the Buyer;

          (e)  any liabilities or obligations required to be accrued by the
Seller in accordance with generally accepted accounting principles and the FERC
Uniform System of Accounts on or before the Closing Date with respect to
liabilities related to the Purchased Assets other than any liability assumed by
the Buyer under Sections 2.3(a), (e) or (f) hereof;

          (f)  any liabilities or obligations relating to any personal injury to
an employee or a third party (including, without limitation, workers'
compensation claims), discrimination, wrongful discharge, unfair labor practice,
property damage, breach of contract or tort filed with or pending before any
court or administrative agency on the Closing Date, or any claim arising out of
an actual event or events of which Seller has Knowledge as of the Closing Date
if it is reasonably foreseeable that such event or events will give rise to a
claim that may be filed with any court or administrative agency, with respect to
liabilities affecting the Purchased Assets, other than any liabilities or
obligations assumed by the Buyer under Section 2.3(e) hereof;

          (g)  any payment obligations of the Seller for goods delivered or
services rendered prior to the Closing;

          (h)  any liabilities or obligations imposed upon, assumed or retained
by the Seller pursuant to the Interconnection Agreement, Operating Easement
Agreements or any other Ancillary Agreement;

          (i)  any liabilities, obligations or responsibilities relating to any
"employee pension benefit plan" (as defined in Section 3(2) of ERISA) maintained
by the Seller and any trade or business (whether or not incorporated) which are
or have ever been under common control, or which are or have ever been treated
as a single employer, with the Seller under Sections 414(b), (c), (m) or (o) of
the Code (an "ERISA Affiliate") or to which the Seller and any ERISA Affiliate
contributed thereunder (the "ERISA Affiliate Plans"), including any
multiemployer plan, maintained by, contributed to, or obligated to contribute
to, at any time, by the Seller or any ERISA Affiliate (hereinafter referred to
as "Benefit Plans"), including any liability (i) to the Pension Benefit Guaranty
Corporation under Title IV of ERISA;

                                       18
<PAGE>

(ii) with respect to non-compliance with the notice and benefit continuation
requirements of COBRA; (iii) with respect to any non-compliance with ERISA or
any other applicable laws; or (iv) with respect to any suit, proceeding or claim
which is brought against any Benefit Plan, ERISA Affiliate Plan, any fiduciary
or former fiduciary of any such Benefit Plan or ERISA Affiliate Plan;

          (j)  liabilities or obligations under Section 2.3(e) that are the
subject of a claim filed with or pending before any court or administrative
agency on or before November 16, 2000, to the extent that any such claim is not
disclosed on Schedule 5.18;

          (k)  liabilities arising under any material intercompany agreement
between Seller and an Affiliate of Seller that is not disclosed on a Schedule to
this Agreement;

          (l)  liabilities arising under any agreement for the purchase or sale
of energy, capacity or ancillary services from the Purchased Assets, other than
the Transitional Power Purchase Agreement, the Interconnection Agreement or as
disclosed on a Schedule to this Agreement;

          (m)  any accrued liability included in the Estimated Adjustment Amount
for which Seller is paid at Closing;

          (n)  any liabilities paid or incurred in connection with obtaining
consents to assignment of Seller Agreements;

          (o)  any liabilities for borrowed money or guarantees of third party
obligations, except purchase money security interests;

          (p)  liabilities with respect to the pollution control Bonds listed on
Schedule 5.15, except for the obligations arising out of the covenants of Buyer
set forth in Section 7.8;

          (q)  liabilities with respect to any accrued payment obligations
incurred by Seller prior to the Closing Date;

          (r)  any liability for which Seller is entitled to payment under any
applicable insurance policy before the application of Section 2.3, to the extent
of such payment; and

          (s)  any allocation of charges to Seller or the owner of the Purchased
Assets by Southwest Gas Corporation of El Paso Natural Gas Company's

                                       19
<PAGE>

Risk Sharing Revenue Stability Charges based on gas transportation or purchases
with respect to the Purchased Assets that occurred before the Closing Date.

          2.5   License of Non-Transferred Intangible Assets.  It is understood
                --------------------------------------------
by the parties that trade names of Seller are Excluded Assets, however, such
names appear on certain of the Purchased Assets, such as certain fixtures and
equipment, and on supplies, materials and similar consumable items that will be
on hand at the Purchased Assets at Closing. Notwithstanding that such trade
names are Excluded Assets, Buyer shall be entitled to use such consumable items
for a period of three (3) months following the Closing and shall have up to six
(6) months following the Closing to remove such names from fixed Purchased
Assets, provided that Buyer shall not send correspondence or other materials to
third parties on any stationery that contains a trade name or trademark of
Seller or any Affiliate of Seller. Seller hereby grants to Buyer a license to
use, solely in connection with the operation of the Clark Bundle on and after
Closing, such proprietary computer software of Seller located at the Clark
Bundle as is presently used at the Clark Bundle exclusively in connection with
the operation of the Clark Bundle and that would otherwise be an Excluded Asset,
except for such computer software that is designed to be part of a networked
computer system providing data processing capabilities or services beyond the
Clark Bundle and any licenses which are not transferable and provided that in no
event shall Buyer or any successor have access under such license to Seller's
own computer networks. The rights and obligations relating to the licenses
contained in this Section 2.5 will be made the subject of a separate software
and trademark licensing agreement between the parties which shall address the
terms and conditions affecting the irrevocable, fully paid up, royalty-free,
transferable, non-exclusive rights and licenses granted therein, in which case
the parties shall negotiate such terms and conditions in good faith and deliver
such agreement at Closing.

                                  ARTICLE III
                                  -----------
                                PURCHASE PRICE
                                --------------

          3.1   Purchase Price. The purchase price for the Purchased Assets
                --------------
shall be an amount equal to the sum of (i) Three Hundred Forty Two Million Two
Hundred Thousand Dollars ($342,200,000), (ii) the Estimated Adjustment Amount,
(iii) the Adjustment Amount, and (iv) any amounts paid by the Seller with
respect to Leased Assets pursuant to Section 7.4 hereof (the "Purchase Price").
Notwithstanding any other provision of this Agreement, the Purchase Price
includes all applicable sales and similar taxes. As a result of the execution of
the Transitional Power Purchase Agreement, the amount to be paid by Buyer to
Seller at Closing shall be reduced by One Hundred Fifty Eight Million Dollars
($158,000,000) (the "TPPA Amount"), and such reduction is reflected in Section
4.2(iv).

                                       20
<PAGE>

          3.2   Purchase Price Adjustment.  (a)  Within sixty (60) days after
                -------------------------
the Closing, the Seller shall prepare and deliver to the Buyer a statement
(the "Adjustment Statement") which reflects (i) the difference between (A) the
book value, as determined by an independent evaluator designated by the Seller
and approved by the Buyer as of the Closing Date, of all fuel inventory used at
or in connection with the Purchased Assets and (B) the Estimated Inventory
Adjustment Amount (such difference is referred to as the "Inventory Adjustment
Amount"), (ii) the difference between (A) the book value, as determined by an
independent evaluator designated by the Seller and approved by the Buyer as of
the Closing Date, of the materials and supplies used at or in connection with
the Purchased Assets and (B) the Estimated Materials and Supplies Adjustment
Amount (such difference is referred to as the "Materials and Supplies Adjustment
Amount") and (iii) the difference between (A) the Maintenance and Capital
Expenditures Amount and (B) the Estimated Maintenance and Capital Expenditures
Amount (such difference is referred to as the "Maintenance and Capital
Expenditures Adjustment Amount").  The Inventory Adjustment Amount, the
Materials and Supplies Adjustment Amount and the Maintenance and Capital
Expenditures Adjustment Amount are referred to collectively as the "Adjustment
Amount."  The Adjustment Statement shall be prepared using the same generally
accepted accounting principles, policies and methods as the Seller has
historically used in connection with the calculation of the items reflected on
the Adjustment Statement.  The Buyer agrees to cooperate with the Seller in
connection with the preparation of the Adjustment Statement and related
information, and shall provide to the Seller such books, records and information
as may be reasonably requested from time to time.

          (b)  The Buyer may dispute the Inventory Adjustment Amount, the
Materials and Supplies Adjustment Amount or the Maintenance and Capital
Expenditures Amount; provided, however, that the Buyer shall notify the Seller
                     --------  -------
in writing of the disputed amount, and the basis of such dispute, within ten
(10) Business Days of the Buyer's receipt of the Adjustment Statement.  In the
event of a dispute with respect to the Inventory Adjustment Amount, the
Materials and Supplies Adjustment Amount or the Maintenance and Capital
Expenditures Amount, the Buyer and the Seller shall attempt to reconcile their
differences and any resolution by them as to any disputed amounts shall be
final, binding and conclusive on the parties.  If the Buyer and the Seller are
unable to reach a resolution of such differences within thirty (30) days of
receipt of the Buyer's written notice of dispute to the Seller, the Buyer and
the Seller shall submit the amounts remaining in dispute for determination and
resolution to the Independent Accounting Firm, which shall be instructed to
determine and report to the parties, within thirty (30) days after such
submission, upon such remaining disputed amounts, and such report shall be
final, binding and conclusive on the parties hereto with respect to the amounts
disputed.  The fees and disbursements of the Independent Accounting Firm shall
be allocated between the Buyer and the Seller so that the Buyer's share of such
fees and disbursements shall be

                                       21
<PAGE>

in the same proportion that the aggregate amount of such remaining disputed
amounts so submitted by the Buyer to the Independent Accounting Firm that is
unsuccessfully disputed by the Buyer (as finally determined by the Independent
Accounting Firm) bears to the total amount of such remaining disputed amounts so
submitted by the Buyer to the Independent Accounting Firm.

          (c)  Within ten (10) Business Days after the Buyer's receipt of the
Adjustment Statement, the Buyer shall pay all undisputed portions of the
Adjustment Amount.  If there is a dispute with respect to any amount on the
Adjustment Statement, within five (5) Business Days after the final
determination of such disputed amounts on the Adjustment Statement, the Buyer
shall pay to the Seller an amount equal to the disputed portion of the
Adjustment Amount as finally determined to be payable with respect to the
Adjustment Statement; provided, however, that if such amount shall be less than
                      --------  -------
zero, then the Seller shall pay to the Buyer the amount by which such amount is
less than zero within five (5) Business Days of such final determination.  All
payments made pursuant to this Section 3.2(c) shall be paid together, with
interest thereon for the period commencing on the Closing Date through the date
of payment, calculated at the prime rate of The Chase Manhattan Bank in effect
on the Closing Date, in cash by federal or other wire transfer of immediately
available funds.

          (d)  Buyer acknowledges that if the Closing occurs after the closing
of the transactions contemplated by the Reid Gardner Asset Sales Agreement,
Buyer shall make the payment contemplated by Section 3.2(d) of the Reid Gardner
Asset Sales Agreement pursuant to the Reid Gardner Asset Sales Agreement in
accordance with the terms of the Reid Gardner Asset Sales Agreement.

          3.3   Allocation of Purchase Price. The Buyer and the Seller shall use
                ----------------------------
their good faith best efforts to agree upon an allocation among the Purchased
Assets of the sum of the Purchase Price consistent with Section 1060 of the Code
and the Treasury Regulations thereunder within one-hundred twenty (120) days of
the date of this Agreement but in no event less than thirty (30) days prior to
the Closing. The Buyer and the Seller may jointly agree to obtain the services
of an independent appraiser (the "Independent Appraiser") to assist the parties
in determining fair value of the Purchased Assets for purposes of such
allocation. If such an appraisal is made, both the Buyer and the Seller agree to
accept the Independent Appraiser's determination of the fair value of the
Purchased Assets. The parties shall jointly select the Independent Appraiser.
The cost of the appraisal shall be borne equally by the Buyer and the Seller.
Each of the Buyer and the Seller agrees to file Internal Revenue Service Form
8594, and all federal, state, local and foreign Tax Returns, in accordance with
such agreed allocation. Each of the Buyer and the Seller shall report the
transactions contemplated by this Agreement for federal Income Tax and all other
tax purposes in a manner consistent with the allocation determined pursuant

                                       22
<PAGE>

to this Section 3.3. Each of the Buyer and the Seller agrees to provide the
other promptly with any other information required to complete Form 8594. Each
of the Buyer and the Seller shall notify and provide the other with reasonable
assistance in the event of an examination, audit or other proceeding regarding
the agreed upon allocation of the Purchase Price.

          3.4   Proration.  (a) The Buyer and the Seller agree that all of the
                ---------
items normally prorated, including those listed below, relating to the business
and operation of the Purchased Assets shall be prorated as of the Closing Date,
with the Seller liable to the extent such items relate to any time period
through the Closing Date, and the Buyer liable to the extent such items relate
to periods subsequent to the Closing Date:

               (i)   personal property, real estate, occupancy and any other
     Taxes, assessments and other charges, if any, on or with respect to the
     business and operation of the Purchased Assets.  In addition, in the event
     that the Seller is subject to Taxes, assessments and other charges on
     property of which the Purchased Assets comprises only a portion, the
     portion of such Taxes, assessments and other charges allocated to the
     Purchased Assets and subject to proration by this Section 3.4 shall be
     determined by reference to the relative value of the Purchased Assets, as
     determined by the Purchase Price paid by the Buyer, compared with the value
     of the Seller's property subject to such Taxes, assessments and other
     charges, as assessed by the relevant taxing authority;

               (ii)  rent, Taxes and other items payable by or to the Seller
     under any of the Seller Agreements to be assigned to and assumed by the
     Buyer hereunder;

               (iii) any permit, license or registration fees with respect to
     any Environmental Permit or other Permit; and

               (iv)  sewer rents and charges for water, telephone, electricity
     and other utilities.

          (b)  In connection with such proration, in the event that actual
figures are not available at the Closing Date, the proration shall be based upon
the actual amount of such Taxes or fees for the preceding year (or appropriate
period) for which actual Taxes or fees are available and such Taxes or fees
shall be reprorated upon request of either the Seller or the Buyer made within
sixty (60) days of the date that the actual amounts become available.  The
Seller and the Buyer agree to furnish each other with such documents and other
records as may be reasonably

                                       23
<PAGE>

requested in order to confirm all adjustment and proration calculations made
pursuant to this Section 3.4.

                                  ARTICLE IV
                                  ----------
                                  THE CLOSING
                                  -----------

          4.1   Time and Place of Closing. Upon the terms and subject to the
                -------------------------
satisfaction of the conditions contained in this Agreement, the closing of the
transactions contemplated by this Agreement (the "Closing") shall take place at
the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New
York, New York, at 10:00 a.m., local time, on the first Business Day following
the date on which all of the conditions to each party's obligations hereunder
have been satisfied or waived, or such other place or time as the parties may
mutually agree, provided that such date shall not occur prior to June 1, 2001,
unless the parties mutually agree to an earlier date. The date and time at which
the Closing actually occurs is hereinafter referred to as the "Closing Date."

          4.2   Payment of Purchase Price. Upon the terms and subject to the
                -------------------------
satisfaction of the conditions contained in this Agreement, in consideration of
the aforesaid sale, assignment, conveyance, transfer and delivery of the
Purchased Assets, the Buyer shall pay or cause to be paid to the Seller the
Purchase Price. The portion of the Purchase Price to be paid at Closing shall be
as follows: (i) an amount equal to the sum of $342,200,000, plus (ii) any
amounts with respect to Leased Assets to be paid pursuant to Section 7.4 hereof,
plus (iii) the Estimated Adjustment Amount for the Closing, and less (iv) the
TPPA Amount (the "Estimated Closing Payment"), by wire transfer of immediately
available funds or by such other means as are agreed to by the Seller and the
Buyer. If, at the time of Closing, there is a payment required to be made
pursuant to Section 3.2(d) of the Reid Gardner Asset Sales Agreement, such
payment shall be made at Closing.

          4.3   Deliveries by Seller. At the Closing, the Seller shall deliver
                --------------------
to the Buyer the following:

          (a)  The Bill of Sale, duly executed by the Seller for the personal
property included in the Purchased Assets;

          (b)  The executed consents to transfer the Seller Agreements, the
Environmental Permits and the Permits, to the extent required hereunder or under
applicable law;

          (c)  Each Ancillary Agreement required to be delivered under this
Agreement, duly executed by the Seller;

                                       24
<PAGE>

          (d)  The certificate and opinion of counsel as contemplated by Section
8.2 hereof;

          (e)  One or more deeds of conveyance transferring the Seller's
interest in the Real Property to the Buyer, without covenant or warranty of
title other than as provided in the Form of Grant, Bargain, Sale Deed attached
as Exhibit G hereto, duly executed and acknowledged by the Seller and in
recordable form subject to Permitted Encumbrances and retaining to the extent
necessary any existing easements in favor of the Seller with respect to Real
Property conveyed to the Buyer, each substantially in the form of Exhibit G
attached hereto;

          (f)  One or more easements to the extent necessary to evidence the
right of the Buyer to use the Real Property of the Seller (the "Buyer's
Easements") associated with the Purchased Assets, duly executed and acknowledged
by the Seller and in recordable form, each substantially in the form of Exhibit
E attached hereto;

          (g)  The Assignment of Leases, in the form of Exhibit A attached
hereto, assigning to the Buyer all of the Seller's right, title and interest as
lessor (or lessee, as the case may be) under the Leases;

          (h)  Copies of the resolutions adopted by the board of directors of
the Seller, certified by the secretary of the Seller, as having been duly and
validly adopted and as being in full force and effect, authorizing the execution
and delivery by the Seller of this Agreement, the Ancillary Agreements, the Bill
of Sale and other closing documents described in this Agreement to which the
Seller is a party, and the performance by the Seller of its obligations
hereunder and thereunder;

          (i)  All such other instruments of assignment or conveyance as shall,
in the reasonable opinion of the Buyer and its counsel, be necessary to transfer
to the Buyer the Purchased Assets in accordance with this Agreement and the
Ancillary Agreements, and where necessary or desirable, in recordable form; and

          (j)  Such other agreements, documents, instruments and writings as are
required to be delivered by the Seller at or prior to the Closing Date pursuant
to this Agreement, the Ancillary Agreements or otherwise required in connection
herewith or therewith.

          4.4   Deliveries by Buyer. At the Closing, the Buyer shall deliver to
                -------------------
the Seller the following:

                                       25
<PAGE>

          (a)  The Estimated Closing Payment by wire transfer of immediately
available funds or by such other means as are agreed to by the Seller and the
Buyer;

          (b)  Each Ancillary Agreement required to be delivered under this
Agreement, duly executed by the Buyer;

          (c)  The certificate and opinion of counsel as contemplated by Section
8.3 hereof;

          (d)  One or more easements to the extent necessary to evidence the
right of Seller to use the Real Property of Buyer (the "Seller's Easements"), to
the extent necessary for the Seller to continue and maintain its transmission
and distribution business, in favor of the Seller with respect to Real Property
conveyed to the Buyer, duly executed and acknowledged by the Buyer, each
substantially in the form of Exhibit D attached hereto, and the Buyer shall bear
any transfer or similar tax incurred in connection herewith as set forth in
Section 7.9 hereof;

          (e)  The Instrument of Assumption, duly executed by the Buyer
providing for the assumption of all of the Seller's right, title and interest as
lessor (or lessee as the case may be) under the Leases;

          (f)  All such other instruments of assumption as shall, in the
reasonable opinion of the Seller and its counsel, be necessary for the Buyer to
assume the Assumed Liabilities in accordance with this Agreement;

          (g)  Copies of the resolutions adopted by the board of directors of
the Buyer, certified by the secretary of the Buyer, as having been duly and
validly adopted and as being in full force and effect, authorizing the execution
and delivery by the Buyer of this Agreement, the Ancillary Agreements and other
closing documents described in this Agreement to which the Buyer is a party, and
the performance by the Buyer of its obligations hereunder and thereunder; and

          (h)  Such other agreements, documents, instruments and writings as are
required to be delivered by the Buyer at or prior to the Closing Date pursuant
to this Agreement, the Ancillary Agreements or otherwise required in connection
herewith or therewith.

                                       26
<PAGE>

                                   ARTICLE V
                                   ---------
                   REPRESENTATIONS AND WARRANTIES OF SELLER
                    ----------------------------------------

          The Seller represents and warrants to the Buyer as follows:

          5.1   Organization; Qualification. The Seller is a corporation duly
                ---------------------------
organized, validly existing and in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority to own, lease, and
operate its properties and to carry on its business as is now being conducted.
The Seller is duly qualified or licensed to do business as a foreign corporation
and is in good standing in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so duly qualified or
licensed and in good standing would not have a Material Adverse Effect. The
Seller has heretofore delivered to the Buyer complete and correct copies of its
Certificate of Incorporation and Bylaws as currently in effect.

          5.2   Authority Relative to this Agreement. The Seller has full
                ------------------------------------
corporate power and authority to execute and deliver this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by the board of directors of the
Seller and no other corporate proceedings on the part of the Seller are
necessary to authorize this Agreement or the Ancillary Agreements or to
consummate the transactions contemplated hereby and thereby. This Agreement and
the Ancillary Agreements have been duly and validly executed and delivered by
the Seller, and assuming that this Agreement and the Ancillary Agreements
constitute valid and binding agreements of the Buyer, subject to the receipt of
the Seller Required Regulatory Approvals and the Buyer Required Regulatory
Approvals, constitute valid and binding agreements of the Seller, enforceable
against the Seller in accordance with their terms, except that such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium
or other similar laws affecting or relating to enforcement of creditors' rights
generally or general principles of equity.

          5.3   Consents and Approvals; No Violation. (a) Except as set forth in
                ------------------------------------
Schedule 5.3(a), and other than obtaining the Seller Required Regulatory
Approvals and the Buyer Required Regulatory Approvals, neither the execution and
delivery of this Agreement or the Ancillary Agreements by the Seller nor the
sale by the Seller of the Purchased Assets pursuant to this Agreement or the
Ancillary Agreements shall (i) conflict with or result in any breach of any
provision of the Certificate of Incorporation or Bylaws of the Seller, (ii)
require any consent, approval, authorization or permit of, or filing with or
notification to, any

                                       27
<PAGE>

Governmental Authority or regulatory authority, except (x) where the failure to
obtain such consent, approval, authorization or permit, or to make such filing
or notification, would not have a Material Adverse Effect or (y) for those
requirements which become applicable to the Seller as a result of the specific
regulatory status of the Buyer (or any of its Affiliates) or as a result of any
other facts that specifically relate to the business or activities in which the
Buyer (or any of its Affiliates) is or proposes to be engaged; (iii) result in a
default (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which the
Seller is a party or by which the Seller, or any of the Purchased Assets may be
bound, except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained or
which, in the aggregate, would not have a Material Adverse Effect; or (iv)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Seller, or any of its assets, which violation would have a
Material Adverse Effect.

          (b)  Except as set forth in Schedule 5.3(b) and except for (i) any
required approvals under the Federal Power Act, (ii) approvals or other actions
by the PUCN, the CPUC, and/or the OPUC, (iii) the approval, if required, of the
SEC pursuant to the Holding Company Act, and (iv) the filings by the Seller and
the Buyer required by the HSR Act and the expiration or earlier termination of
all waiting periods under the HSR Act (the filings and approvals referred to in
clauses (i) through (iv) above are collectively referred to as the "Seller
Required Regulatory Approvals"), no declaration, filing or registration with, or
notice to, or authorization, consent or approval of any Governmental Authority
or regulatory authority is necessary for the consummation by the Seller of the
transactions contemplated hereby, other than such declarations, filings,
registrations, notices, authorizations, consents or approvals which, if not
obtained or made, shall not, in the aggregate, have a Material Adverse Effect
and other than the Permits and Environmental Permits.

          5.4   Reports. Since January 1, 1996, the Seller, pursuant to the
                -------
Securities Act, the Exchange Act, the applicable State public utility laws, the
Federal Power Act and the Holding Company Act, has filed or caused to be filed
with the SEC, the applicable state or local utility commissions or regulatory
bodies, or the FERC, as the case may be, all material forms, statements, reports
and documents (including all exhibits, amendments and supplements thereto)
required to be filed by them with respect to the business and operations of the
Seller as it relates to the Purchased Assets under each of the Securities Act,
the Exchange Act, the applicable State public utility laws, the Federal Power
Act and the Holding Company Act and the respective rules and regulations
thereunder, all of which complied in all material

                                       28
<PAGE>

respects with all applicable requirements of the appropriate act and the rules
and regulations thereunder in effect on the date each such report was filed.

          5.5   Financial Statements. The Seller has previously furnished to the
                --------------------
Buyer (i) balance sheets of the Seller as of June 30, 2000, and (ii) the related
statements of income and retained earnings and changes in financial position of
the Seller for the fiscal year then ended. The balance sheet of the Seller as of
June 30, 2000 is referred to herein as the "Seller Balance Sheet." Each of the
balance sheets included in the financial statements referred to in this Section
5.5 (including the related notes thereto) presents fairly the financial position
of the Seller as of their respective dates, and the other related statements
included therein (including the related notes thereto) present fairly the
results of operations and changes in financial position for the periods then
ended, all in conformity with generally accepted accounting principles applied
on a consistent basis, except as otherwise noted therein.

          5.6   Undisclosed Liabilities. Except as set forth in Schedule 5.6,
                -----------------------
the Seller has no liability or obligation relating to the business or operations
of the Purchased Assets, secured or unsecured (whether absolute, accrued,
contingent or otherwise, and whether due or to become due), of a nature required
by generally accepted accounting principles to be reflected in a corporate
balance sheet or disclosed in the notes thereto, which are not accrued or
reserved against in the Seller Balance Sheet or disclosed in the notes thereto
in accordance with generally accepted accounting principles, except those which
either were incurred in the ordinary course of business, whether before or after
the date of the Seller Balance Sheet, or those which in the aggregate are not
material to the Purchased Assets.

          5.7   Absence of Certain Changes or Events. Except as set forth in
                ------------------------------------
Schedule 5.7, or in the reports, schedules, registration statements and
definitive proxy statements filed by the Seller with the SEC, and except as
otherwise contemplated by this Agreement, since the date of the Seller Balance
Sheet there has not been: (i) any Material Adverse Effect; (ii) any damage,
destruction or casualty loss, whether covered by insurance or not, which had a
Material Adverse Effect; (iii) any entry into any agreement, commitment or
transaction (including, without limitation, any borrowing, capital expenditure
or capital financing) by the Seller, which is material to the business or
operations of the Purchased Assets, except for non-material agreements,
commitments or transactions in the ordinary course of business or as
contemplated herein; or (iv) any change by the Seller, with respect to the
Purchased Assets, in accounting methods, principles or practices except as
required or permitted by generally accepted accounting principles.

          5.8   Title to Real Property. Set forth in Schedule 5.8 is a true and
                ----------------------
complete list of the Real Property of the Seller which is part of the Purchased
Assets.

                                       29
<PAGE>

The Seller has good and marketable title to all of the Real Property (including
easements for access and utilities), subject only to Permitted Encumbrances.

          5.9   Leasehold Interests. Schedule 5.9 lists, as of the date of this
                -------------------
Agreement, all Real Property leases (the "Leases") relating to the Purchased
Assets under which the Seller is a lessee, lessor or under which Seller
otherwise has any interest and which are to be assigned to, and assumed by, the
Buyer on the Closing Date. Except as set forth in Schedule 5.9, to the Seller's
Knowledge, all such Leases are valid, binding and enforceable in accordance with
their terms, and are in full force and effect; there are no existing material
defaults by the Seller thereunder; and no event has occurred which (whether with
or without notice, lapse of time or both) would constitute a material default
thereunder. Subject only to Permitted Encumbrances, Seller has valid and
effective leasehold rights in each Lease in which Seller is the lessee.

          5.10  Improvements. Except as set forth in Schedule 5.10, the Seller
                ------------
has not received any written notices from any Governmental Authority stating or
alleging that any improvements with respect to the Purchased Assets have not
been constructed in compliance with applicable law. Except as set forth in
Schedule 5.10, no written notice has been received by the Seller from any
Governmental Authority requiring or advising as to the need for any repair,
alteration, restoration or improvement in connection with the Purchased Assets.

          5.11  Insurance. Except as set forth in Schedule 5.11, all material
                ---------
policies of fire, liability, workers' compensation and other forms of insurance
purchased or held by and insuring the Purchased Assets are in full force and
effect, all premiums with respect thereto covering all periods up to and
including the date as of which this representation is being made have been paid,
and no notice of cancellation or termination has been received with respect to
any such policy which was not replaced on substantially similar terms prior to
the date of such cancellation. Except as described in Schedule 5.11, as of the
date of this Agreement, the Seller has not been refused any insurance with
respect to the Purchased Assets nor has its coverage been limited by any
insurance carrier to which it has applied for any such insurance or with which
it has carried insurance during the last twelve (12) months.

          5.12  Environmental Matters. (a) Except as set forth in Schedule 5.12,
                ---------------------
in any public filing by the Seller pursuant to the Securities Act or the
Exchange Act, or in any environmental site assessment prepared by or for the
Seller and made available to the Buyer, the Seller holds, and is in substantial
compliance with, all material permits, licenses and governmental authorizations
(the "Environmental Permits") required for the Seller to operate the Purchased
Assets under applicable Environmental Laws, and to the Knowledge of the Seller,
the Seller is otherwise in compliance with applicable Environmental Laws with
respect to the Purchased

                                       30
<PAGE>

Assets except for such failures to hold or comply with required Environmental
Permits, or such failures to be in compliance with applicable Environmental
Laws, which, in the aggregate, are not reasonably likely to have a Material
Adverse Effect. The Seller's Environmental Permits are set forth on Schedule
5.12.

          (b)  To Seller's knowledge and except as set forth in Schedule 5.12,
Seller has not received any request for information, or been notified in writing
or orally that it is a potentially responsible party, under CERCLA or any
similar state law with respect to any of the Purchased Assets, except for such
liability under such laws as would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect.

          (c)  Except as set forth in Schedule 5.12, with respect to the
Purchased Assets, the Seller has not entered into or agreed to any consent
decree or order, and is not subject to any judgment, decree, or judicial order
relating to compliance with any Environmental Law or to investigation or cleanup
of Hazardous Substances under any Environmental Law, except such consent decrees
or orders, judgments, decrees or judicial orders that would not, individually or
in the aggregate, be reasonably likely to have a Material Adverse Effect and has
no Knowledge of any pending investigation under any Environmental Law related to
the Purchased Assets, other than as contemplated by the Environmental Audit
Agreement, if applicable, between Nevada Power Company and the Nevada Division
of Environmental Protection related to the Clark Bundle except for such
investigations that would not, individually or in the aggregate, be reasonably
willing to have a Material Adverse Effect and further, Seller shall disclose to
Buyer in writing any Remediation or investigation relating to the Purchased
Assets that is commenced after the date of this Agreement and prior to the
Closing Date.

          (d)  To Seller's Knowledge, Seller has disclosed and made available to
Buyer true, complete and correct copies of any material report, study,
investigation, audit, analysis, test or monitoring in the possession of or
initiated or prepared by Seller within the 5 years preceding the date of this
Agreement pertaining to any environmental matter relating to the Purchased
Assets, including without limitation, compliance with Environmental Laws or
employee safety.

          (e)  The representations and warranties made in this Section 5.12 are
the Seller's exclusive representations and warranties relating to environmental
matters.

          5.13   Labor Matters. The Seller has previously delivered to the Buyer
                 -------------
copies of all labor union and Collective Bargaining Agreements relating to the
Purchased Assets to which the Seller is a party or is subject. With respect to
its employees at the Purchased Assets, except to the extent set forth in
Schedule 5.13

                                       31
<PAGE>

and except for such matters as shall not have a Material Adverse Effect, to the
Seller's Knowledge: (i) the Seller is in compliance with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours; (ii) the Seller has not received written notice
of any unfair labor practice charge or complaint against the Seller pending
before the National Labor Relations Board; (iii) there is no labor strike,
slowdown or stoppage actually pending or threatened against or affecting the
Seller; (iv) the Seller has not received notice that any representation petition
respecting the employees of the Seller has been filed with the National Labor
Relations Board; (v) no arbitration proceeding arising out of or under
collective bargaining agreements is pending against the Seller; and (vi) the
Seller has not experienced any primary work stoppage since at least December 31,
1995.

          5.14  ERISA; Benefit Plans. (a) Except as set forth in Schedule
                --------------------
5.14(a)(i), with respect to its employees at the Purchased Assets, the Seller
has fulfilled its obligations under the minimum funding requirements of Section
302 of ERISA, and Section 412 of the Code, with respect to each "employee
pension benefit plan" (as defined in Section 3(2) of ERISA) and each such plan
is in compliance in all material respects with the presently applicable
provisions of ERISA and the Code. The Seller has not incurred any liability
under Section 4062(b) of ERISA to the Pension Benefit Guaranty Corporation in
connection with any employee pension benefit plan relating to employees at the
Purchased Assets which is subject to Title IV of ERISA. Except as set forth in
Schedule 5.14(a)(ii), the Internal Revenue Service has issued a letter for each
employee pension benefit plan determining that such plan is exempt from United
States Federal Income Tax under Sections 401(a) and 501(a) of the Code, and
there has been no occurrence since the date of any such determination letter
which has adversely affected such qualification, and no withdrawal liability has
been incurred by or asserted against the Seller with respect to any employee
pension benefit plan which is a "multiemployer plan" (as defined in Section
3(37) of ERISA).

          (b)  Schedule 5.14(b) lists, as of the date of this Agreement, all
deferred compensation, pension, profit-sharing and retirement plans, including
multiemployer plans, and all material bonus and other employee benefit or fringe
benefit plans maintained or with respect to which contributions are made by the
Seller in respect of employees who are the employees of the Seller who work at
the Purchased Assets.  Accurate and complete copies of all such plans, other
than multiemployer plans, have been made available to the Buyer.

          5.15  Real Property Encumbrances. Schedule 5.15 describes the
                --------------------------
indentures of trust concerning the Pollution Control Facilities at the Clark
Bundle (the "Bond Indentures") and the Indenture. At or before Closing, Seller
shall cause the Purchased Assets to be released from the liens of the Indenture
and the Bond

                                       32
<PAGE>

Indentures. Copies of any surveys in the Seller's possession or any policies of
title insurance currently in force and in the possession of the Seller with
respect to the Real Property will be delivered by the Seller to the Buyer
pursuant to Section 7.14.

          5.16  Condemnation. Neither the whole nor any part of the Real
                ------------
Property or any other real property or rights leased, used or occupied by the
Seller in connection with the ownership or operation of the Purchased Assets is
subject to any pending suit for condemnation or other taking by any public
authority, and, to the Knowledge of the Seller, no such condemnation or other
taking is threatened or contemplated.

          5.17  Certain Contracts and Arrangements. (a) Except for (i) the
                ----------------------------------
Seller Agreements listed in Schedule 5.17(a) or any other Schedule hereto, (ii)
contracts, agreements, personal property leases, commitments, understandings or
instruments which shall expire prior to the Closing Date, (iii) non-material
agreements with suppliers, distributors and sales representatives entered into
in the ordinary course of business, and (iv) contracts, agreements, personal
property leases, commitments, understandings or instruments with a value less
than $250,000 or with annual payments less than $50,000 the Seller is not a
party to any written contract, agreement, personal property lease, commitment,
understanding or instrument which is material to the business or operations of
the Purchased Assets.

          (b)  Except as disclosed in Schedule 5.17(b), each material Seller
Agreement constitutes a valid and binding obligation of the parties thereto and
is in full force and effect and may be transferred to the Buyer pursuant to this
Agreement and shall continue in full force and effect thereafter, in each case
without breaching the terms thereof or resulting in the forfeiture or impairment
of any rights thereunder.

          (c)  Except as set forth in Schedule 5.17(c), there is not, under any
of the Seller Agreements, any default or event which, with notice or lapse of
time or both, would constitute a default on the part of the Seller, except, with
respect to the Seller Agreements only, such events of default and other events
as to which requisite waivers or consents have been obtained or which would not,
in the aggregate, have a Material Adverse Effect.  Except as set forth in
Schedule 5.17(c), Seller has not received written or other notice of a default
concerning a Seller Agreement, nor has Seller received any written or other
notice that a party intends to cancel or terminate a Seller Agreement.

          5.18  Legal Proceedings, etc. Except as set forth in Schedule 5.18 or
                -----------------------
in any filing made by the Seller pursuant to the Securities Act or the Exchange
Act, there are no claims, actions, proceedings, or investigations pending, and
to Seller's Knowledge no claims, actions, proceedings or investigations
threatened, against the Seller relating to the Purchased Assets before or by any
court, Governmental

                                       33
<PAGE>

Authority or regulatory authority or body acting in an adjudicative capacity,
which, if adversely determined, would have a Material Adverse Effect. Except as
set forth in Schedule 5.18, the Seller is not subject to any outstanding
judgment, rule, order, writ, injunction or decree of any court, Governmental
Authority or regulatory authority relating to the Purchased Assets which has a
Material Adverse Effect.

          5.19  Permits. The Seller has all material permits, licenses,
                --------
franchises and other governmental authorizations, consents and approvals (other
than with respect to the Environmental Permits addressed in Section 5.12)
(collectively, "Permits"), as set forth in Schedule 5.19(a), necessary to
operate the Purchased Assets as presently operated, except where the failure to
have such Permits does not have a Material Adverse Effect. Except as set forth
in Schedule 5.19(b), with respect to the Purchased Assets, the Seller has not
received any written notification, and does not otherwise have Knowledge, that
it is in violation of any of such Permits, or any law, statute, order, rule,
regulation, ordinance or judgment of any Governmental Authority or regulatory
body or authority applicable to the Purchased Assets, except for notifications
of violations which would not, in the aggregate, have a Material Adverse Effect.
The Seller is in compliance with all Permits, laws, statutes, orders, rules,
regulations, ordinances, or judgments of any Governmental Authority or
regulatory body or authority applicable to the Purchased Assets, except for
violations which, in the aggregate, do not have a Material Adverse Effect.

          5.20  Regulation as a Utility. The Seller and certain of its
                -----------------------
affiliates are regulated as public utilities in the States of Nevada and
California. Except as set forth on Schedule 5.20, the Seller is not subject to
regulation as a public utility or public service company (or similar
designation) by the United States, any State of the United States, any foreign
country or any municipality or any political subdivision of the foregoing.

          5.21  Taxes. The Seller has, in respect of the Purchased Assets, (i)
                -----
filed all Tax Returns required to be filed other than those Tax Returns the
failure of which to file would not have a Material Adverse Effect, and (ii) paid
in full or all material Taxes shown to be due on such Tax Returns. Except as set
forth in Schedule 5.21, the Seller has not received any notice of deficiency or
assessment from any taxing authority with respect to liabilities for Taxes of
the Seller in respect of the Purchased Assets, which have not been fully paid or
finally settled, and any such deficiency shown in such Schedule 5.21 is being
contested in good faith through appropriate proceedings. Except as set forth in
Schedule 5.21, there are no outstanding agreements or waivers extending the
applicable statutory periods of limitation for Taxes associated with the
Purchased Assets for any period.

          5.22  Title to Personal Property. Schedule 1.l(86)(iii) sets forth a
                --------------------------
true and complete list of the material machinery, equipment, vehicles, furniture
and other

                                       34
<PAGE>

tangible personal property located on the Real Property and used in the
operation of the Clark Bundle as of the date of this Agreement ("Personal
Property"). The Seller has good and marketable title to the Personal Property
(or valid and effective leasehold rights in the case of leased Personal
Property).

          5.23  Water. (a) Seller holds rights, by contract, permit, easement,
                -----
resolution, ordinance and otherwise, sufficient to enable Seller to legally
take, transport and deliver water to the Clark Bundle at rates and in quantities
sufficient to operate the Clark Bundle in the manner in which it has
historically been operated. Without limiting the generality of the foregoing,
Seller represents and warrants that (i) its right to receive water at Clark
Station from the Clark County Sanitation District ("CCSD") derives exclusively
from permit #21728-S-1 (cert # 6885) and CCSD Resolution No. 88-002 and 99-004
and (ii) with the exception of pipeline operations and maintenance agreements
listed on Schedule 5.17(a) there are no other contracts or agreements affecting
Seller's right to receive water for Clark Station from CCSD.

          (b)  To Seller's Knowledge there are no facts or circumstances that
would prevent Buyer from performing its obligations under the terms and
conditions of the proposed form of Waste Water Supply Agreement and the proposed
form of Water Supply Agreement.

          (c)  There has been sufficient pond capacity and brine concentration
treatment plant capacity to support the unit capacity factors set forth in
Schedule 5.23(c), and as of the Closing Date there will have been no material
reduction in the pond or brine concentrator treatment plant capacity from
historical levels.

                                  ARTICLE VI
                                  ----------
                    REPRESENTATIONS AND WARRANTIES OF BUYER
                    ---------------------------------------

          The Buyer represents and warrants to the Seller as follows:

          6.1   Organization. Each of NRG and Dynegy is a corporation duly
                ------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as is now being conducted.
Each of NRG and Dynegy is duly qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be so duly
qualified or licensed and in good standing would not have a Material Adverse
Effect. Each of NRG and Dynegy has heretofore delivered to the Seller complete
and correct copies of its Certificate of

                                       35
<PAGE>

Incorporation and Bylaws (or other similar governing documents), as currently in
effect.

          6.2   Authority Relative to this Agreement. Each of NRG and Dynegy has
                ------------------------------------
full corporate power and authority to execute and deliver this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by the board of directors of NRG
and Dynegy and no other corporate proceedings on the part of NRG or Dynegy are
necessary to authorize this Agreement or the Ancillary Agreements or to
consummate the transactions contemplated hereby and thereby. This Agreement and
the Ancillary Agreements have been duly and validly executed and delivered by
NRG and Dynegy, and assuming that this Agreement and the Ancillary Agreements
constitute valid and binding agreements of the Seller, subject to the receipt of
the Buyer Required Regulatory Approvals and the Seller Required Regulatory
Approvals, constitute valid and binding agreements of NRG and Dynegy,
enforceable against NRG and Dynegy in accordance with their terms, except that
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally or general principles of equity.

          6.3   Consents and Approvals; No Violation. (a) Except as set forth in
                ------------------------------------
Schedule 6.3(a), and other than obtaining the Buyer Required Regulatory
Approvals and the Seller Required Regulatory Approvals, neither the execution
and delivery of this Agreement or the Ancillary Agreements by NRG or Dynegy nor
the purchase by NRG or Dynegy of the Purchased Assets pursuant to this Agreement
or the Ancillary Agreements shall (i) conflict with or result in any breach of
any provision of the Certificate of Incorporation or Bylaws (or other similar
governing documents) of NRG or Dynegy, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority or regulatory authority, except (x) where the failure to obtain such
consent, approval, authorization or permit, or to make such filing or
notification, would not have a Material Adverse Effect or (y) for those
requirements which become applicable to NRG or Dynegy as a result of the
specific regulatory status of the Seller (or any of its Affiliates) or as a
result of any other facts that specifically relate to the business or activities
in which the Seller (or any of its Affiliates) is or proposes to be engaged;
(iii) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, agreement, lease or other instrument or
obligation to which NRG or Dynegy or any of their respective subsidiaries is a
party or by which any of their respective assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained.

                                       36
<PAGE>

          (b)  Except as set forth in Schedule 6.3(b) and except for (i) filings
and approvals required by Section 203 of the Federal Power Act, (ii) a specific
determination by the appropriate state commission(s) that allowing the Purchased
Assets to be an eligible facility (1) will benefit consumers, (2) is in the
public interest, and (3) does not violate State law, as contemplated by Section
32(c) of the Holding Company Act, 15 USC section 79z-5a(c), (iii) an Exempt
Wholesale Generator determination made by FERC under Section 32 of the Holding
Company Act, 15 USC Section 79z-5a, and (iv) the filings by NRG and Dynegy and
the Seller required by the HSR Act and the expiration or earlier termination of
all waiting periods under the HSR Act (the filings and approvals referred to in
Schedule 6.3(b) and clauses (i), (ii) and (iii) are collectively referred to as
the "Buyer Required Regulatory Approvals"), no declaration, filing or
registration with, or notice to, or authorization, consent or approval of any
Governmental Authority or regulatory body or authority is necessary for the
consummation by the Buyer of the transactions contemplated hereby, other than
such declarations, filings, registrations, notices, authorizations, consents or
approvals which, if not obtained or made, shall not, in the aggregate, have a
Material Adverse Effect.

          6.4   Regulation as a Utility. NRG Energy, Inc., is a subsidiary of a
                -----------------------
public utility holding company registered under the Holding Company Act. Dynegy
Holdings Inc. is neither a public utility company nor a public utility holding
company under the Holding Company Act. Except as set forth in Schedule 6.4, the
Buyer is not subject to regulation as a public utility or public service company
(or similar designation) by the United States, any State of the United States,
any foreign country or any municipality or any political subdivision of the
foregoing.

          6.5   Availability of Funds. The Buyer has sufficient funds available
                ---------------------
to it or has received binding written commitments from responsible financial
institutions to provide sufficient funds on the Closing Date to pay the Purchase
Price.

                                  ARTICLE VII
                                  -----------
                           COVENANTS OF THE PARTIES
                            ------------------------

          7.1   Conduct of Business of the Seller. Except as described in
                ---------------------------------
Schedule 7.1, during the period from the date of this Agreement to the Closing
Date, the Seller shall operate and maintain the Purchased Assets according to
its ordinary and usual course of business consistent with good industry practice
and with Schedules 1.1(94) (Scheduled Capital Expenditures) and 1.1(95)
(Scheduled Maintenance Expenditures). Without limiting the generality of the
foregoing, and, except as contemplated in this Agreement or as described in
Schedule 7.1, prior to the Closing

                                       37
<PAGE>

Date, without the prior written consent of the Buyer (unless such consent would
be prohibited by law), the Seller shall not with respect to the Purchased
Assets:

          (a)  (i)  create, incur or assume any material amount of indebtedness
for money borrowed, other than in the ordinary course of business, including
obligations in respect of capital leases but excluding purchase money mortgages
granted in connection with the acquisition of property in the ordinary course of
business; or (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person except in the ordinary course of business;

          (b)  make any material change in the operations of the Purchased
Assets including, without limitation, the levels of fuel inventory and materials
and supplies customarily maintained by the Seller;

          (c)  except as set forth in Schedule 1.1(92), make any capital
expenditures with respect to the Purchased Assets, except that the Seller shall
make any capital expenditures (i) requested by the Buyer, provided that the
Buyer shall reimburse the Seller for such capital expenditures as part of the
Adjustment Amount and (ii) deemed necessary by the Seller and consented to by
the Buyer, whose consent shall not be unreasonably withheld ("Necessary Capital
Expenditures"); provided, however, that if the Buyer requests that the Seller
                --------  -------
make enhancements with a cost in excess of the cost of any Necessary Capital
Expenditure, the Buyer shall reimburse the Seller for the cost of such
enhancement to the extent that the cost of such enhancement exceeds the cost of
the Necessary Capital Expenditures as part of the Adjustment Amount;

          (d)  sell, lease (as lessor), transfer or otherwise dispose of, any of
the Purchased Assets, other than assets used, consumed or replaced in the
ordinary course of business consistent with good industry practice and not
mortgage or pledge, or impose or suffer to be imposed any Encumbrance on, any of
the Purchased Assets other than Permitted Encumbrances;

          (e)  except as set forth in Schedule 1.1(93), make any maintenance
expenditures, except that the Seller shall make any maintenance expenditures (i)
requested by the Buyer, provided that the Buyer shall reimburse the Seller for
such maintenance expenditures as part of the Adjustment Amount and (ii) deemed
necessary by the Seller and consented to by the Buyer, whose consent shall not
be unreasonably withheld ("Necessary Maintenance Expenditures"); provided,
                                                                 --------
however, that if the Buyer requests that the Seller make enhancements/upgrades
-------
with a cost in excess of the cost of any Necessary Maintenance Expenditure, the
Buyer shall reimburse the Seller for the cost of such enhancements/upgrades to
the extent the

                                       38
<PAGE>

cost of such enhancements/upgrades exceeds the cost of the Necessary Maintenance
Expenditure as part of the Adjustment Amount;

          (f)  amend any of the Seller Agreements;

          (g)  enter into or amend any real or personal property Tax agreement,
treaty or settlement;

          (h)  execute, enter into or amend any agreement, order, decree or
judgment relating to any Permit other than non-material renewals of Permits in
the ordinary and usual course of business consistent with past practice;

          (i)  enter into any commitment for the purchase or sale of fuel
(whether commodity or transportation) that Seller intends to assign to Buyer
having a term of greater than ninety (90) days that extends beyond December 31,
2001 if the aggregate payment under such commitment is expected to exceed
$500,000 or if the aggregate payments under such commitment and all other then
outstanding commitments not previously consented to by the Buyer would be
expected to exceed $1,000,000;

          (j)  except for the Transitional Power Purchase Agreement, enter into
any wholesale sales agreements having a term extending beyond the Closing Date,
where the sale of energy is expected to be supplied via the Purchased Assets;

          (k)  sell, lease or otherwise dispose of SO2 Allowances, except those
listed in Schedule 2.2(g) or to the extent necessary to operate the Purchased
Assets in accordance with this Section 7.1; or

          (l)  enter into (i) any contract, agreement, commitment or
arrangement, whether written or oral, with respect to any of the transactions
set forth in the foregoing paragraphs (a) through (k) or (ii) otherwise enter
into any material new contract, agreement, commitment or arrangement affecting
the Purchased Assets that will survive Closing other than contracts, agreements,
commitments or arrangements entered into in the ordinary and usual course of
business consistent with Good Utility Practice (as defined in the Transitional
Power Purchase Agreement) and having a term of twelve (12) months or less and a
value of $250,000 or less ($1 million in the aggregate) provided that such per
contract and aggregate limitations imposed in this subparagraph (l) shall not
apply to commitments for the purchase or sale of fuel pursuant to subparagraph
(i) of this section (with Buyer's consent to a contract, agreement or commitment
that otherwise complies with this subsection (ii) but exceeds the preceding term
and value limits not to be unreasonably withheld or delayed) except that in no
event shall Seller enter into the Waste Water Treatment Agreement or the Water
Supply Agreement with a third party prior to Closing

                                       39
<PAGE>

without Buyer's consent, and (iii) Seller shall provide Buyer with prompt notice
with respect to any contract, agreement, commitment or arrangement entered into
in accordance with the provisions of subsection (ii) of this paragraph.

          7.2   Access to Information. (a) Between the date of this Agreement
                ---------------------
and the Closing Date, the Seller shall, during ordinary business hours and upon
reasonable notice (i) give the Buyer and the Buyer Representatives reasonable
access to all books, records, plants, offices and other facilities and
properties constituting the Purchased Assets to which access by Buyer is not
prohibited by law excluding information relating to employee records other than
the information described on Schedule 2.2(e), (ii) subject to Seller's approval
of Buyer's selection (not to be unreasonably withheld) Buyer shall appoint a
representative and beginning sixty (60) days prior to Closing such
representative shall be permitted to make reasonably frequent visits on
reasonable notice to the Purchased Assets for the purpose of performing
reasonable inspections thereof; (iii) cause those persons in the positions
listed on Schedule 1.1(62) and its advisors to furnish the Buyer with such
financial and operating data and other information with respect to the Purchased
Assets as the Buyer may from time to time reasonably request; (iv) cause those
persons in the positions listed on Schedule 1.1(62) and its advisors to furnish
the Buyer a copy of each report, schedule or other document filed or received by
them with the SEC, PUCN, CPUC or FERC with respect to the Purchased Assets; and
(v) at Buyer's reasonable request, make those persons in the positions listed on
Schedule 1.1(62) and its advisors available during regular business hours for
reasonable time periods to answer Buyer's questions concerning the Purchased
Assets and their operation; provided, however, that (A) any such investigation
                            --------  -------
shall be conducted in such a manner as not to interfere unreasonably with the
operation of the Purchased Assets, (B) the Seller shall not be required to take
any action which would constitute a waiver of the attorney-client privilege and
(C) the Seller need not supply the Buyer with any information which the Seller
is under a legal obligation not to supply.  Notwithstanding anything in this
Section 7.2 to the contrary, (i) the Seller shall only furnish or provide such
access to medical records as is required by law and (ii) the Buyer shall not
have the right to perform or conduct any environmental sampling or testing at,
in, on or underneath the Purchased Assets.

          (b)  All information furnished to or obtained by the Buyer and the
Buyer Representatives pursuant to this Section 7.2 shall be subject to the
provisions of the Confidentiality Agreement and shall be treated as "Evaluation
Material" (as defined in the Confidentiality Agreement) except for items
acquired by Buyer as part of the Purchased Assets including but not limited to
any books, operation records, operating, safety and maintenance manuals,
engineering design plans, blueprints and as-built plans, specifications and
procedures.

                                       40
<PAGE>

          (c)  Subject to Buyer's rights under the last sentence of this Section
7.2(c), for a period of ten (10) years after the Closing Date, the Seller and
its representatives shall have reasonable access to all of the books and records
of the Purchased Assets, as the case may be, transferred to the Buyer hereunder
to the extent that such access may reasonably be required by the Seller in
connection with matters relating to or affected by the operation of the
Purchased Assets prior to the Closing Date.  Such access shall be afforded by
the Buyer upon receipt of reasonable advance notice and during normal business
hours.  The Seller shall be solely responsible for any costs or expenses
incurred by them pursuant to this Section 7.2(c).  If the Buyer shall desire to
dispose of any such books and records prior to the expiration of such ten-year
period, the Buyer shall, prior to such disposition, give the Seller a reasonable
opportunity at the Seller's expense, to segregate and remove such books and
records as the Seller may select.

          7.3   Expenses. Except to the extent specifically provided herein,
                --------
whether or not the transactions contemplated hereby are consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the party incurring such costs and
expenses except that the costs, expenses and premium incurred to obtain title
insurance shall be shared equally by Buyer and Seller at Closing.

          7.4   Further Assurances. Subject to the terms and conditions of this
                ------------------
Agreement, each of the parties hereto shall use all commercially reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the sale of the Purchased Assets
pursuant to this Agreement including, without limitation, the use of the
Seller's and the Buyer's commercially reasonable efforts to obtain all Permits
and Environmental Permits necessary for the Buyer to operate the Purchased
Assets. From time to time after the date hereof, without further consideration,
the Seller shall, at its own expense, execute and deliver such documents to the
Buyer as the Buyer may reasonably request in order more effectively to vest in
the Buyer good title to the Purchased Assets. From time to time after the date
hereof, the Buyer shall, at its own expense, execute and deliver such documents
to the Seller as the Seller may reasonably request in order to more effectively
consummate the sale of the Purchased Assets pursuant to this Agreement. To the
extent that any personal property lease, relating to any assets (the "Leased
Assets") which are principally used by the Seller for generation purposes at the
Purchased Assets, cannot be assigned to the Buyer, the Seller shall, with
Buyer's written consent (which consent shall not be unreasonably withheld), use
its commercially reasonable efforts to acquire title to such Leased Assets and
to include them in the Purchased Assets before the Closing Date. The Seller's
reasonable costs associated with acquiring title to such Leased Assets shall be
paid by the Buyer as part of

                                       41
<PAGE>

the Purchase Price. The Leased Assets are identified as such on Schedule
1.1(86)(iii).

          7.5   Public Statements. The parties shall consult with each other
                -----------------
prior to issuing any public announcement, statement or other disclosure with
respect to this Agreement or the transactions contemplated hereby and neither
party may issue any such public announcement, statement or other disclosure
without having first received the written consent of the other party, except as
may be required by law and except that the parties may make public
announcements, statements or other disclosures with respect to this Agreement
and the transactions contemplated hereby to the extent and under the
circumstances in which the parties are expressly permitted by the
Confidentiality Agreement to make disclosures of "Evaluation Material" (as
defined in the Confidentiality Agreement).

          7.6   Consents and Approvals. (a) The Seller and the Buyer shall each
                ----------------------
file or cause to be filed with the Federal Trade Commission and the United
States Department of Justice any notifications required to be filed under the
HSR Act and the rules and regulations promulgated thereunder with respect to the
transactions contemplated hereby. The parties shall consult with each other as
to the appropriate time of filing such notifications and shall use their best
efforts to make such filings at the agreed upon time, to respond promptly to any
requests for additional information made by either of such agencies, and to
cause the waiting periods under the HSR Act to terminate or expire at the
earliest possible date after the date of filing.

          (b)  The Seller and the Buyer shall cooperate with each other and (i)
promptly prepare and file all necessary documentation, (ii) effect all necessary
applications, notices, petitions and filings and execute all agreements and
documents, (iii) use all commercially reasonable efforts to obtain the transfer
or reissuance to the Buyer of all necessary Environmental Permits, Permits,
consents, approvals and authorizations of all governmental bodies and (iv) use
all commercially reasonable efforts to obtain all necessary consents, approvals
and authorizations of all other parties, in the case of each of the foregoing
clauses (i), (ii), (iii) and (iv), necessary or advisable to consummate the
transactions contemplated by this Agreement (including, without limitation, the
Seller Required Regulatory Approvals and the Buyer Required Regulatory
Approvals, all consents, approvals and authorizations of all governmental bodies
to the transfer, reissuance or modification of the Permits and Environmental
Permits as necessary to enable Buyer to operate the Purchased Assets at and
after Closing substantially as they had been operated immediately prior to the
Closing Date, and FERC approval of the Ancillary Agreements and the Generation
Tariff applicable to the Purchased Assets)  or required by the terms of any
note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument to which the Seller or the Buyer
is a party or by which either of them is bound.  The Seller shall have the right
to review and approve

                                       42
<PAGE>

in advance all characterizations of the information relating to Purchased
Assets; and each of the Seller and the Buyer shall have the right to review and
approve in advance all characterizations of the information relating to the
transactions contemplated by this Agreement which appear in any filing made in
connection with the transactions contemplated hereby. The parties hereto agree
that they shall consult with each other with respect to the transferring to the
Buyer or the obtaining by the Buyer of all such necessary Environmental Permits,
Permits, consents, approvals and authorizations of all third parties and
governmental bodies. The Seller and the Buyer shall designate separate counsel
with respect to all applications, notices, petitions and filings (joint or
otherwise) relating to this Agreement and the transactions contemplated hereby
on behalf of the Seller, on the one hand and the Buyer on the other hand, with
all governmental bodies.

          (c)  To the extent that a consent to an assignment of any material
Seller Agreement cannot be obtained before the Closing Date, the Seller shall
enter into all such agreements with the Buyer as are necessary to give the Buyer
the rights, obligations and burdens of such Seller Agreements.

          (d)  The parties hereto shall consult with each other prior to
proposing or entering into any stipulation or agreement with any federal, state
or local Governmental Authority or agency or any third party in connection with
any federal, state or local governmental consents and approvals legally required
for the consummation of the transactions contemplated hereby and shall not
propose or enter into any such stipulation or agreement without the other
party's prior written consent, which consent shall not be unreasonably withheld.

          (e)  Seller shall use commercially reasonable efforts to defend and
support the form of Generation Tariff applicable to the Purchased Assets in the
form on file with FERC as of November 14, 2000.  Seller shall file with FERC and
use commercially reasonable efforts to defend and support the Transitional Power
Purchase Agreement and Interconnection Agreement.  Seller shall, at Buyer's
request, file a certificate of concurrence in and shall use all commercially
reasonable efforts to support (i) any filing with the FERC that Buyer is
required to make in order to sell energy, capacity and ancillary service
pursuant to the Transitional Power Purchase Agreement, and (ii) any tariff filed
by Buyer with FERC and containing terms and conditions equivalent to the
applicable terms and conditions of the Generation Tariff, previously filed by
Seller with FERC and applicable to the Purchased Assets, provided, however,
Seller's obligation to support such filings shall continue only until such
filings have been approved by FERC.  Seller shall not propose or enter into any
stipulation or agreement except for any stipulation pending as of the date of
this Agreement modifying the form of such tariffs or agreements without Buyer's
consent, which Buyer shall not unreasonably withhold.  Buyer and Seller shall
cooperate in defending and supporting such tariffs and agreements.

                                       43
<PAGE>

          (f)  The Seller shall prepare and submit an application to the PUCN in
which the Seller shall seek approval of the sale of both the Purchased Assets
hereunder and the Reid Gardner Bundle and at Buyer's request Seller shall
include in such application a statement reflecting Buyer's preferences and
priorities with respect to the transactions contemplated by this Agreement and
the Asset Sale Agreement relating to the Reid Gardner Bundle of even date
herewith.

          7.7   Fees and Commissions. The Seller and the Buyer each represent
                --------------------
and warrant to the other that, except for Credit Suisse First Boston ("CSFB"),
which is acting for and at the expense of the Seller, no broker, finder or other
Person is entitled to any brokerage fees, commissions or finder's fees in
connection with the transaction contemplated hereby by reason of any action
taken by the party making such representation. The Seller and the Buyer shall
pay to the other or otherwise discharge, and shall indemnify and hold the other
harmless from and against, any and all claims or liabilities for all brokerage
fees, commissions and finder's fees (other than as described above) incurred by
reason of any action taken by such party.

          7.8   Use of Pollution Control Facilities. (a) Prior to June 1, 2019,
                -----------------------------------
the Buyer shall not use any of the Pollution Control Facilities in any manner
which would cause (i) interest on any of the Bonds to become includible in the
gross income of the owners of such Bonds for purposes of federal income taxation
or (ii) the disallowance of any deductions for interest expense payable by the
Seller to which the Seller would otherwise be entitled; provided, however, that
                                                        --------  -------
no violation of this Section 7.8 shall be deemed to have occurred solely as a
result of such facilities being (A) unused, (B) abandoned or (C) sent to a
landfill.

          (b)  The Buyer shall give the Seller reasonable access to any
Pollution Control Facilities included in the Purchased Assets and the books and
records with respect to such facilities.

          (c)  The Buyer shall fully cooperate with the issuers of the Bonds and
the Seller and its counsel in connection with any audit, investigation or
proceeding with respect to the Bonds or the Seller's interest expense deduction
with respect thereto by the Internal Revenue Service, the SEC or any other
entity.

          7.9   Tax and Withholding Matters. (a) Notwithstanding any other
                ---------------------------
provision of this Agreement, the Purchase Price includes all applicable sales
and similar taxes (but not real property transfer taxes) imposed by the State of
Nevada as the result of the transaction ("Included Taxes"). Buyer shall bear all
real estate transfer taxes. At the Closing, Seller shall deliver to Buyer a
receipt for Buyer's payment of Included Taxes, and a separate closing
certificate setting forth Seller's calculation of the purchase price for that
portion of the Purchased Assets with respect

                                       44
<PAGE>

to which Included Taxes are anticipated by Seller to be due, as well as Seller's
calculation, in the exercise of reasonable judgment, of the amount of those
Included Taxes. Seller shall also include in this certificate its unqualified
representation, warranty and covenant, which shall survive Closing
notwithstanding any other provision of this Agreement, that the amount of taxes
so established is in fact the entire and correct amount of Included Taxes.
Seller is aware that, because of Seller's familiarity with the Purchased Assets
and their previous treatment for tax, accounting and other purposes, Buyer is
relying on Seller's calculation of such Included Taxes. Seller shall, as
provided by the laws of the State of Nevada, pay over to the Nevada Department
of Taxation the Included Taxes. To the extent, if any, that the State of Nevada
requires payment of Included Taxes in an amount higher than that certified by
Seller, after all opportunity for challenge or rehearing or appeal has been
exhausted (provided that Seller bears the costs thereof as incurred), Seller
           --------
shall immediately adjust its books, nunc pro tunc, by decreasing the purchase
price of the Purchased Assets by an amount equal to such additional Included
Taxes, which amount shall constitute Included Taxes collected by Seller from
Buyer. Seller shall then deliver to Buyer a corrected receipt for payment of
Included Taxes and remit to the Nevada Department of Taxation the additional
Included Taxes due. The foregoing is in addition to Buyer's right to recover
damages for breach of Seller's representation, warranty and covenant in an
amount equal to any Included Taxes required to be paid by Buyer (after
exhausting all opportunity for appeal or rehearing, provided that Seller bears
                                                    --------
the costs thereof as incurred). Seller represents and warrants that this Section
7.9(a) is enforceable (which representation and warranty shall survive Closing
notwithstanding any contrary provision in this Agreement) and shall deliver a
reasoned opinion at Closing confirming that this provision will be enforceable
against Seller. The party responsible for remitting a Tax, shall, at its own
expense, file, to the extent required by law, all necessary Tax Returns,
receipts and other documentation with respect to the Tax. If reasonably
requested by the party responsible for paying a Tax the other party shall join
in the execution of any such Tax Returns, receipts or other documentation.
Notwithstanding the foregoing, the parties shall work together in good faith and
each at its own expense to minimize all transfer, sales and similar taxes and
shall not make any payment to the Nevada Department of Taxation if the amount of
payment is being disputed by either party until all opportunity for challenge or
rehearing or appeal has been exhausted (provided that Seller bears the costs
                                        --------
thereof as incurred).

          (b)  With respect to Taxes to be prorated in accordance with Section
3.4 hereof only, the Buyer shall prepare and timely file all Tax Returns
required to be filed with respect to the Purchased Assets, if any, and shall
duly and timely pay all such Taxes shown to be due on such Tax Returns.  The
Buyer's preparation of any such Tax Returns shall be subject to the Seller's
approval, which approval shall not be unreasonably withheld.  The Buyer shall
make such Tax Returns available for the Seller's review and approval no later
than twenty (20) days

                                       45
<PAGE>

prior to the due date for filing such Tax Return. Within ten (10) days after
receipt of such Tax Return, the Seller shall pay to the Buyer its proportionate
share of the amount shown as due on such Tax Return determined in accordance
with Section 3.4 hereof. In addition to any amount of reimbursement due in
accordance with Section 3.4 hereof, Buyer shall reimburse Seller for any Nevada
property taxes incurred by Seller which relate to the Purchased Assets and have
a lien date after the Closing Date. The amount of such reimbursement shall be
determined based upon the proportion of (i) the "historical cost less
depreciation" of the Purchased Assets to (ii) the total historical cost less
depreciation of all the assets reported on Seller's Nevada Operating Property
Appraisal Report.

          (c)  Each of the Buyer and the Seller shall provide the other with
such assistance as may reasonably be requested by the other party in connection
with the preparation of any Tax Return, any audit or other examination by any
taxing authority, or any judicial or administrative proceedings relating to
liability for Taxes, and each shall retain and provide the requesting party with
any records or information which may be relevant to such return, audit or
examination, proceedings or determination. Any information obtained pursuant to
this Section 7.9 or pursuant to any other section hereof providing for the
sharing of information or review of any Tax Return or other schedule relating to
Taxes shall be kept confidential by the parties hereto. The provisions of
Section 7.9 shall survive for a period of two years.

          (d)  The provisions of Section 7.9 shall survive until 30 days after
the expiration of all applicable tax statutes of limitation.

          7.10   Supplements to Schedules. Prior to the Closing Date, the Seller
                 ------------------------
shall promptly supplement or amend the Schedules required by Article V with
respect to any matter hereafter arising which, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described in
such Schedules. No supplement or amendment of any Schedule made pursuant to this
Section 7.10 shall be deemed to cure any breach of any representation or
warranty made in this Agreement unless the parties agree thereto in writing.

          7.11   Employees. (a) Schedule 7.11(a) sets forth all collective
                 ---------
bargaining agreements to which the Seller is a party in connection with the
Purchased Assets (the "Collective Bargaining Agreements"), as well any Letters
of Agreement between Seller and IBEW Local 396 ("Local 396 LOA"), letters of
intent, or other such agreements or understandings related to the sale and
transfer of certain plants. The Buyer shall offer employment to begin as of the
Closing Date to the Seller's employees who work at the Purchased Assets and who
are included in the bargaining units covered by the Collective Bargaining
Agreements ("Hourly Employees"). The Buyer shall assume the Collective
Bargaining Agreements, and all of the Seller's obligations under such
agreements.

                                       46
<PAGE>

          (b)  Continued Employment.  The Buyer shall, as of the Closing Date,
               --------------------
make a Qualifying Offer of Employment (as defined herein) to each employee of
Seller who (i) worked at or directly serviced the Purchased Assets and (ii) was
an employee of the Seller immediately prior to the Closing Date, other than (x)
Hourly Employees and (y) Directors (each such employee who accepts a Qualifying
Offer of Employment is a "Management Employee").  An offer of employment shall
be deemed a "Qualifying Offer of Employment" if (A) the proposed base salary and
level of incentive compensation is at least 90% of the employee's base salary
and level of incentive compensation immediately prior to the Closing Date and
(B) the proposed principal place of employment is within one hundred (100) miles
of the employee's principal place of employment immediately prior to the Closing
Date.

          (c)  Benefit Continuation.  Subject to applicable law, the Buyer shall
               --------------------
maintain for a period of at least one year after the Closing Date, without
interruption, such employee compensation, welfare and benefit plans, programs,
policies and fringe benefits covering Management Employees that will be as
economically similar, in the aggregate, as those provided pursuant to those
employee compensation, welfare and benefit plans, programs, policies and fringe
benefits of the Seller and their subsidiaries as in effect immediately prior to
the Closing Date.  To the extent permissible under the terms of the Benefit
Plans of Buyer and required by applicable law, the Buyer shall waive all
limitations as to preexisting conditions exclusions and waiting periods with
respect to participation and coverage requirements applicable to the Management
Employees under any Benefit Plans of Buyer that are welfare benefit plans that
such employees may be eligible to participate in after the Closing Date, other
than limitations or waiting periods that are already in effect with respect to
such employees and that have not been satisfied as of the Closing Date under any
welfare benefit plan maintained for the Management Employees immediately prior
to the Closing Date.

          (d)  Service Credit. The Management Employees shall be given credit
               --------------
for all service with the Seller or its subsidiaries (and service credited by
Seller or such subsidiary), to the same extent as such service was credited for
such purpose by Seller or such subsidiary, under all employee benefit plans,
programs and policies of the Buyer in which they become participants (the
"Benefit Plans of Buyer") for purposes of eligibility, vesting, benefit accrual
and determination of level of benefits. Notwithstanding the foregoing, such
service with the Seller shall be recognized for purposes of benefit accrual
under a defined benefit pension plan or a retiree medical plan (a "plan")
sponsored by the Buyer only if assets and liabilities are transferred to the
Buyer's plan and trust from the Seller's plan and trust.

          (e)  Assumptions.  The Buyer shall assume only those obligations that
               -----------
are required to be assumed by the Buyer under the Collective Bargaining

                                       47
<PAGE>

Agreement or obligations for which there was a transfer of assets and
liabilities to the Buyer's plan and trust from the Seller's plan and trust.
Absent such transfer of plan assets and liabilities, benefits accrued under such
Benefits Plans of Seller and all benefits currently payable as of the Closing
Date shall be and shall remain the obligation of the Seller.  Any individual
covered under any such Benefit Plan of Seller that is a Group Health Plan (as
defined in Section 4980B(g)(2) of the Code and Section 607(l) of ERISA) and who
is eligible for continued coverage under such Group Health Plan as of the
Closing Date, shall continue to be covered under such Group Health Plan after
Closing pursuant to the provisions of COBRA.

          (f)  Severance Plan.  The Buyer shall maintain the Management
               --------------
Transition Plan for a period of eighteen (18) months following the Closing Date
and shall give all Management Employees service credit for purposes of
determining the level of benefits thereunder in the same manner as set forth in
Section 7.11(d) hereof.  Each of the Buyer and the Seller shall be responsible
for 50% of any payments required under the Management Transition Plan for any
Management Employee terminated without Cause (as defined in the Management
Transition Plan) within eighteen (18) months following the Closing Date.

          (g)  WARN Act.  The Seller shall perform timely and discharge all
               --------
requirements, if any, under the WARN Act and under applicable state and local
laws and regulations for the notification of its employees arising from the sale
of the Purchased Assets to the Buyer up to and including the Closing Date.  The
Buyer shall cooperate with the Seller to provide the Seller with such
information as may be needed from the Buyer for inclusion in such notices,
including providing the Seller at least ninety (90) days prior to the date on
which the Closing is anticipated to occur (or such date to which the Buyer and
the Seller mutually agree) with a list of all of the Seller's employees to whom
the Buyer shall make offers of employment.  After the Closing Date, the Buyer
shall be responsible for performing and discharging all requirements under the
WARN Act and under applicable state and local laws and regulations for the
notification of its employees with respect to the Purchased Assets.

          7.12   Risk of Loss. (a) From the date hereof through the Closing
                 ------------
Date, all risk of loss or damage to the property included in the Purchased
Assets shall be borne by the Seller.

          (b)  If, before the Closing Date all or any portion of the Purchased
Assets are taken by eminent domain, or is the subject of a pending or (to the
Knowledge of the Seller) contemplated taking which has not been consummated, the
Seller shall notify the Buyer promptly in writing of such fact.  If such taking
would have a Material Adverse Effect, the Buyer and the Seller shall negotiate
in good faith to settle the loss resulting from such taking (including, without
limitation, by making a fair and equitable adjustment to the Purchase Price)
and, upon such settlement,

                                       48
<PAGE>

consummate the transaction contemplated by this Agreement pursuant to the terms
of this Agreement. If no such settlement is reached within sixty (60) days after
the Seller has notified the Buyer of such taking, then the Buyer or the Seller
may, if such taking relates to the Purchased Assets, terminate this Agreement
pursuant to Section 10.1(f) hereof.

          (c)  If, before the Closing Date all or any material portion of the
Purchased Assets are damaged or destroyed by fire or other casualty, the Seller
shall notify the Buyer promptly in writing of such fact.  If such damage or
destruction would have a Material Adverse Effect and the Seller has not notified
the Buyer of its intention to cure such damage or destruction within fifteen
(15) days after its occurrence, the Buyer and the Seller shall negotiate in good
faith to settle the loss resulting from such casualty (including, without
limitation, by making a fair and equitable adjustment to the Purchase Price)
and, upon such settlement, consummate the transactions contemplated by this
Agreement pursuant to the terms of this Agreement.  If no such settlement is
reached within sixty (60) days after the Seller has notified the Buyer of such
casualty, then the Buyer or the Seller may terminate this Agreement pursuant to
Section 10.1(f) hereof.

          7.13   Additional Covenants of the Buyer.  Notwithstanding any other
                 ---------------------------------
provision hereof, Buyer covenants and agrees that, for a period of five (5)
years commencing on the Closing Date, Buyer shall not transfer the Purchased
Assets, or any material portion of the Purchased Assets, to any entity or
Affiliate of such entity who at that time is the owner of any bundle of
generation assets previously owned by Seller within the southern regions of
Nevada, as such regions are described in the Offering Memorandum dated as of
March 2000, as supplemented from time to time. Buyer further covenants and
agrees that, in the event that Buyer transfers the Purchased Assets or any
material portion of the Purchased Assets during such five (5) year period, Buyer
shall obtain from its transferee a covenant and agreement which restricts such
transferee's ability to transfer the Purchased Assets that is substantially
similar to Buyer's covenant and agreement in the first sentence of this Section
7.13 and an additional covenant and agreement that is substantially similar to
that of this sentence, and each such covenant and agreement shall survive and
remain in effect until five (5) years from the Closing Date as defined in this
Agreement. The covenants and agreements contained in this Section 7.13 shall
survive Closing and shall continue in effect for a period of five (5) years
commencing on the Closing Date.

          7.14   Surveys and Certain Title Matters. Within thirty (30) days
                 ---------------------------------
after the date of this Agreement, Seller shall deliver to Buyer final surveys of
the Real Property showing the location of (a) all exceptions listed in the
preliminary title reports referred to in Schedule 5.8, (b) the easements to be
retained and granted as described in Schedule 5.8, (c) all rights-of-way and
easements for water and gas

                                       49
<PAGE>

pipelines owned or used in connection with the operation of the Clark Bundle,
and (d) all roads, rail spurs, and crossing and other access routes owned or
controlled by Seller used in connection with the operation of the Clark Bundle.
On or before the thirtieth (30th) day (the "Notice Date") after Buyer has
received the final surveys of the Real Property, Buyer may notify Seller in
writing that Buyer disapproves of any matter disclosed by the final surveys
that, individually or in the aggregate, (in Buyer's reasonable judgment)
materially interferes with the operation and maintenance of the Clark Bundle, or
that, individually or in the aggregate, has a Material Adverse Effect. Buyer's
failure to so notify Seller on or before the Notice Date shall be deemed an
approval of matters disclosed by and located in the final surveys; likewise, any
matters not disapproved in a notice from Buyer to Seller on or before the Notice
Date shall be deemed approved by Buyer as disclosed by and located in the final
surveys. If any new matters are disclosed by a revised survey, supplemental
preliminary title report or title commitment, Buyer shall have fifteen (15) days
from the date on which it receives a notice disclosing the new matter(s) in
reasonable detail to approve or disapprove of the new matter(s) as set forth
above. Seller shall cooperate with the Title Insurer and Buyer, to the extent
necessary, to clear any such disapproved matters. The exceptions shown in the
preliminary title reports that are approved by the Buyer as of the date of this
Agreement are listed in Schedule 5.8, subject to Buyer's review of final
surveys. If Buyer and Seller disagree about whether Buyer has properly
disapproved a matter under this Section 7.14, the parties shall meet within ten
(10) Business Days of the Notice Date to negotiate in good faith to settle their
disagreement. In addition, Seller and Buyer shall cooperate in good faith to
create and describe such Operating Easements as may be reasonably required or
desirable to serve the Purchased Assets or Seller's property to the extent not
already covered by the Operating Easements described in Schedule 5.8.

          7.15   Documentation. Within sixty (60) days after the date of this
                 -------------
Agreement, Seller shall make available to Buyer copies of all material
contracts, leases and permits including all amendments thereto (in either
electronic or hard copy format) pertaining to the Purchased Assets which to
Seller's Knowledge are a complete set.

          7.16   Separation Issues. (a) Seller shall cause the purchaser of the
                 -----------------
Sunrise/Sunpeak Bundle to accept a partial assignment of the Firm Transportation
Agreement dated February 1, 1995 ("FTA"), between Seller and Southwest Gas, such
that the purchaser of the Sunrise/Sunpeak Bundle would receive an allocation of
4,725 MMBtu/Hour of transportation capacity under the FTA. Buyer shall accept a
partial assignment of the FTA such that it would receive an allocation of 7,275
MMBtu/Hour of transportation capacity under the FTA. Capacity, demand and other
charges payable under the FTA would be allocated proportionately, such that the
owner of the Sunrise/Sunpeak Bundle would bear 4,725/12,000 of such charges and
Buyer would bear 7,275/12,000 of such charges.

                                       50
<PAGE>

          (b)  Buyer shall have no duty to make its employees available to
provide services to any asset other than the Clark Bundle.

          (c)  To the extent that any contract, agreement, permit, easement or
other right serves generation assets other than the Purchased Assets, Seller
shall before Closing prepare such partial assignments and separation agreements
with the purchaser of the Sunrise/Sunpeak Bundle and the Harry Allen Bundle as
may be necessary to separate such rights.  All such partial assignments and
separation agreements shall be subject to Buyer's consent (which shall not be
unreasonably withheld).

          7.17   Additional Covenants of the Parties. (a) The parties shall work
                 -----------------------------------
together in good faith to address transition issues and to identify any
transition services that Seller will provide for a reasonable period after
Closing. If any such services are identified, the parties shall enter into an
agreement to be delivered at Closing describing the terms and conditions on
which Seller shall provide such transition services, including a provision which
limits the charges for such services to Seller's actual reasonable costs.

          (b)  Buyer and Seller shall negotiate in good faith to agree upon a
clearance procedure at least thirty (30) days before the expected Closing Date
that could make unnecessary certain disconnect switches shown in the one line
drawing included in Exhibit F that have not yet been installed.  If Buyer and
Seller so agree, they shall promptly amend the one line drawing, the Separation
Schedule and the separation schedule summary to reflect their agreement.  In any
event Seller shall be solely responsible for all costs associated with the
acquisition and installation of any such switches and related equipment.

          (c)  Seller shall use its commercially reasonable efforts to enter
into the Environmental Audit Agreement before Closing.

          (d)  Within fifteen (15) Business Days of the date of this Agreement
Buyer agrees to cooperate with Seller to develop a form of agreement, in a form
and substance acceptable to Buyer for execution, for each of the Waste Water
Treatment Agreement and the Water Supply Agreement which substantially reflect
the provisions set forth in Exhibit H and Exhibit I, respectively.  Seller shall
use its commercially reasonable best efforts to present such forms of agreement
to the buyer of the Harry Allen Bundle and the buyer of the Sunrise/Sunpeak
Bundle as soon as practicable thereafter.  Seller shall include a provision in
each of the Asset Sale Agreements relating to the Harry Allen Bundle and the
Sunrise/Sunpeak Bundle that would commit the respective buyers of such asset
bundles to execute definitive agreements in substantially the form developed by
Seller and Buyer.  Seller and

                                       51
<PAGE>

Buyer shall execute such definitive agreements, which will also be executed by
the respective buyers of the Harry Allen Bundle and the Sunrise/Sunpeak Bundle,
within 30 Business Days of the date of each of the Asset Sale Agreements
relating to the Harry Allen Bundle and the Sunrise/Sunpeak Bundle, respectively.

                                 ARTICLE VIII
                                 ------------
                              CLOSING CONDITIONS
                              ------------------

          8.1   Conditions to Each Party's Obligations to Effect the
                ----------------------------------------------------
Transactions Contemplated Hereby.  The respective obligations of each party to
--------------------------------
effect the transactions contemplated hereby or by the Ancillary Agreements shall
be subject to the fulfillment at or prior to the Closing Date of the following
conditions:

          (a)  The waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired or been
terminated;

          (b)  No preliminary or permanent injunction or other order or decree
by any federal or state court which prevents the consummation of the
transactions contemplated hereby or by the Ancillary Agreements shall have been
issued and remain in effect (each party agreeing to use its reasonable best
efforts to have any such injunction, order or decree lifted) and no statute,
rule or regulation shall have been enacted by any state or federal government or
Governmental Authority in the United States which prohibits the consummation of
the transactions contemplated hereby or by the Ancillary Agreements;

          (c)  All federal, state and local government consents and approvals
required for the consummation of the transactions contemplated hereby or by the
Ancillary Agreements, including, without limitation, the Seller Required
Regulatory Approvals, the Buyer Required Regulatory Approvals, and all approvals
of FERC required to enable the parties to perform their respective obligations
under the Ancillary Agreements shall have become Final Orders (a "Final Order"
for purposes of this Agreement means a final order after all opportunities for
rehearing are exhausted (whether or not any appeal thereof is pending) that has
not been revised, stayed, enjoined, set aside, annulled or suspended, with
respect to which any required waiting period has expired; and as to which all
conditions to effectiveness prescribed therein or otherwise by law, regulation
or order have been satisfied) with such terms and conditions as shall have been
imposed by the Governmental Authority issuing such Final Order and such Final
Orders shall not have imposed terms and conditions which would have a material
adverse effect on the business, results of operations or financial condition of
the Purchased Assets; and

                                       52
<PAGE>

          (d)  All consents and approvals required under the terms of any note,
bond, mortgage, indenture, contract or other agreement to which the Seller or
the Buyer, or any of their subsidiaries, is a party for the consummation of the
transactions contemplated hereby shall have been obtained, other than those (i)
which if not obtained, would not, in the aggregate, have a Material Adverse
Effect, or (ii) for which an agreement which is described in Section 7.6(c)
hereof has been entered into.

          8.2   Conditions to Obligations of Buyer. The obligation of the Buyer
                ----------------------------------
to effect the transactions contemplated by this Agreement shall be subject to
the fulfillment at or prior to the Closing Date of the following additional
conditions:

          (a)  There shall not have occurred and be continuing, a Material
Adverse Effect;

          (b)  The Seller shall have performed and complied with in all material
respects the covenants and agreements contained in this Agreement required to be
performed and complied with by it on or prior to the Closing Date, and the
representations and warranties of the Seller set forth in this Agreement shall
be true and correct in all material respects as of the date of this Agreement
and as of the Closing Date as though made at and as of the Closing Date, and the
Buyer shall have received a certificate to that effect signed by an authorized
officer of the Seller;

          (c)  The Buyer shall have received a certificate from an authorized
officer of the Seller, dated the Closing Date, to the effect that to the best of
such officer's knowledge, the conditions set forth in Sections 8.2(a) and (b)
hereof have been satisfied;

          (d)  The Buyer shall have received an opinion from Woodburn & Wedge,
P.C., dated the Closing Date and satisfactory in form and substance to the Buyer
and its counsel, substantially to the effect that:

               (1)  The Seller is a corporation organized, existing and in good
standing under the laws of the State of Nevada and has the corporate power and
authority to execute and deliver this Agreement and the Ancillary Agreements and
to consummate the transactions contemplated hereby and thereby; and the
execution and delivery of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by requisite corporate action taken on the part of the Seller;

               (2)  This Agreement and the Ancillary Agreements have been
executed and delivered by the Seller and (assuming that the Seller Required
Regulatory Approvals and the Buyer Required Regulatory Approvals are obtained)

                                       53
<PAGE>

are valid and binding obligations of the Seller, enforceable against the Seller
in accordance with their terms, except that such enforcement thereof may be
limited by (A) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally, and (B) general principles
of equity (regardless of whether enforceability is considered in a proceeding at
law or in equity) and except to the extent that the right to indemnification and
contribution contained therein may be limited by state or federal securities
laws or the public policy underlying such laws;

               (3)  The execution, delivery and performance of this Agreement
and the Ancillary Agreements by the Seller shall not constitute a violation of
the Certificate of Incorporation or Bylaws of the Seller; and

               (4)  No declaration, filing or registration with, or notice to,
or authorization, consent or approval of any Governmental Authority is necessary
for the consummation by the Seller of the Closing other than (i) the Seller
Required Regulatory Approvals, (ii) such declarations, filings or registrations
with, or notices to, or authorizations, consents or approvals relating to
Permits and Environmental Permits and (iii) such declarations, filings or
registrations with, or notices to, or authorizations, consents or approvals
which, if not obtained or made, would not, in the aggregate have a Material
Adverse Effect.

          As to any matter contained in such opinion which involves the laws of
any jurisdiction other than the federal laws of the United States or the laws of
the State of Nevada, such counsel may rely upon opinions of counsel admitted in
such other jurisdictions.  Any opinions relied upon by such counsel as aforesaid
shall be delivered together with the opinion of such counsel.  Such opinion may
expressly rely as to matters of fact upon certificates furnished by the Seller
and appropriate officers and directors of the Seller and by public officials;
and

          (e)  The Seller shall have executed and delivered as of the Closing,
each of the Ancillary Agreements to be executed by the Seller and all required
approvals and conditions relating to the Ancillary Agreements shall have been
obtained or satisfied;

          (f)  Neither the PUCN nor the Nevada legislature shall have issued any
order or passed any legislation the effect of which would be to cause the Buyer,
as the owner of the Purchased Assets or the seller of electric power, energy or
capacity therefrom, to be regulated as to the wholesale pricing of such electric
power, energy or capacity, or to be regulated for any purposes as a public
utility under Nevada law; and

                                       54
<PAGE>

          (g)  First American Title Company (or an Affiliate thereof) or another
Title Insurer acceptable to Buyer (the "Title Insurer") shall be willing to
issue at regular rates ALTA owner's, or lessee's, as the case may be, extended
coverage policies of title insurance (1990 Form B) (the "Title Policies"), with
the general survey and creditors' rights exceptions removed, in amounts equal to
the portion of the Purchase Price allocated to such interests, showing title to
the Real Property vested in Buyer, subject to transfer of the Real Property to
Buyer.  The Title Policies shall show title vested in Buyer subject only to
Permitted Encumbrances (not including the lien of the Indenture and the Bond
Indentures, from which the Purchased Assets are to be released at or before
Closing).  Seller shall cooperate with the Title Insurer and Buyer, to the
extent necessary, to clear any defects of title.  The first sentence of this
paragraph shall be deemed to be satisfied either by (i) the issuance of the
Title Policies, subject only to Permitted Encumbrances, at Closing, or (ii) by
the Title Insurer's delivery at the Closing of written commitments or binders
(dated as of the Closing but insuring title as of the date title conveyance
documents are recorded), to issue the Title Policies, subject only to Permitted
Encumbrances, within a reasonable time after the Closing Date, subject to actual
transfer of the Real Property.  If the Title Insurer is unwilling to issue any
such Title Policy, it shall be required to provide Buyer and Seller, in writing,
with notice setting forth the reason(s) for such unwillingness as soon as
practicable.  Seller shall have the right to seek to cure any defect which is
the reason for such unwillingness, and to extend the Closing and the Termination
Date, if necessary, for a period of up to thirty (30) Business Days to provide
to Seller the opportunity to cure; and

          (h)  Without limiting the generality of Section 8.1(a) of this
Agreement, Buyer shall have received the necessary consents, approvals and
authorizations required to transfer, re-issue or modify Permits and
Environmental Permits as needed to enable Buyer to operate the Purchased Assets
at and after the Closing Date substantially consistent with Seller's historical
operation.

          8.3   Conditions to Obligations of Seller. The obligation of the
                -----------------------------------
Seller to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions:

          (a)  The Buyer shall have performed in all material respects its
covenants and agreements contained in this Agreement required to be performed on
or prior to the Closing Date;

          (b)  The representations and warranties of the Buyer set forth in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date as though made at and as of the
Closing Date;

                                       55
<PAGE>

          (c)  The Seller shall have received a certificate from an authorized
officer of the Buyer, dated the Closing Date, to the effect that, to the best of
such officer's knowledge, the conditions set forth in Sections 8.3(a) and (b)
hereof have been satisfied; and

          (d)  The Seller shall have received an opinion from Stoel Rives LLP
and/or Lionel Sawyer & Collins, counsel for the Buyer, dated the Closing Date
and satisfactory in form and substance to the Seller and its counsel,
substantially to the effect that:

               (1)  Each of NRG and Dynegy is a corporation organized, existing
and in good standing under the laws of the State of Delaware and has the
corporate power and authority to execute and deliver this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby; and the execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby have
been duly authorized by all requisite corporate action taken on the part of the
Buyer;

               (2)  this Agreement and the Ancillary Agreements have been
executed and delivered by the Buyer and (assuming that the Seller Required
Regulatory Approvals and the Buyer Required Regulatory Approvals are obtained)
are valid and binding obligations of the Buyer, enforceable against the Buyer in
accordance with their terms, except that such enforcement thereof may be limited
by (A) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and (B) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefore may be brought;

               (3)  the execution, delivery and performance of this Agreement
and the Ancillary Agreements by the Buyer shall not constitute a violation of
the Certificate of Incorporation or Bylaws (or other similar governing
documents), as currently in effect, of the Buyer; and

               (4)  no declaration, filing or registration with, or notice to,
or authorization, consent or approval of any Governmental Authority is necessary
for the consummation by the Buyer of the Closing other than the Buyer Required
Regulatory Approvals, all of such Buyer Required Regulatory Approvals having
been obtained and being in full force and effect with such terms and conditions
as shall have been imposed by any applicable Governmental Authority.

          As to any matter contained in such opinion or opinions which involve
the laws of any jurisdiction other than the federal laws of the United States
and the

                                       56
<PAGE>

States of Oregon and Nevada, such counsel may rely upon opinions of counsel
admitted to practices in such other jurisdictions. Any opinions relied upon by
such counsel as aforesaid shall be delivered together with the opinion of such
counsel. Such opinion may expressly rely as to matters of facts upon
certificates furnished by appropriate officers and directors of the Buyer and
its subsidiaries and by public officials; and

          (e)  The Buyer shall have executed and delivered, as of the Closing,
each of the Ancillary Agreements to be executed by the Buyer and all required
approvals and conditions relating to the Ancillary Agreements have been obtained
or satisfied and provided that the Buyer shall be satisfied that the obligations
assumed under each of the Water Supply Agreement and the Waste Water Treatment
Agreement are not inconsistent with Seller's historical operation of the
Purchased Assets as it relates to waste water and water treatment.

                                  ARTICLE IX
                                  ----------
                                INDEMNIFICATION
                                ---------------

          9.1   Indemnification.  (a) The Seller shall indemnify, defend and
                ---------------
hold harmless the Buyer from and against any and all claims, demands or suits
(by any Person), losses, liabilities, damages (including consequential or
special damages), obligations, payments, costs, Taxes and expenses (including,
without limitation, the costs and expenses of any and all actions, suits,
proceedings, assessments, judgments, settlements and compromises relating
thereto and reasonable attorneys' fees and reasonable disbursements in
connection therewith) to the extent the foregoing are not paid by insurance,
(collectively, "Indemnifiable Losses"), asserted against or suffered by the
Buyer relating to, resulting from or arising out of (i) any breach by the Seller
of any covenant or agreement of the Seller contained in this Agreement or (ii)
the Excluded Liabilities.

          (b)  The Buyer shall indemnify, defend and hold harmless the Seller
from and against any and all Indemnifiable Losses asserted against or suffered
by the Seller relating to, resulting from or arising out of (i) any breach by
the Buyer of any covenant or agreement of the Buyer contained in this Agreement
or the Ancillary Agreements or (ii) the Assumed Liabilities.

          (c)  Either the person required to provide indemnification under this
Agreement (the "Indemnifying Party") or the person entitled to receive
indemnification under this Agreement (the "Indemnitee") may assert any offset or
similar right in respect of its obligations under this Section 9.1 based upon
any actual or alleged breach of any covenant or agreement contained in this
Agreement or the Ancillary Agreements.

                                       57
<PAGE>

          (d)  Any Indemnitee having a claim under these indemnification
provisions shall make a good faith effort to recover all losses, damages, costs
and expenses from insurers of such Indemnitee under applicable insurance
policies so as to reduce the amount of any Indemnifiable Loss hereunder.  The
amount of any Indemnifiable Loss shall be reduced (i) to the extent that the
Indemnitee receives any insurance proceeds with respect to an Indemnifiable Loss
and (ii) to take into account any Tax or Income Tax benefit recognized by the
Indemnitee arising from the recognition of the Indemnifiable Loss, net of any
Tax or Income Tax detriment, and any payment actually received with respect to
an Indemnifiable Loss.

          (e)  The expiration, termination or extinguishment of any covenant,
agreement, representation or warranty shall not affect the parties' obligations
under this Section 9.1 if the Indemnitee provided the Indemnifying Party with
proper notice of the claim or event for which indemnification is sought prior to
such expiration, termination or extinguishment.

          (f)  The rights and remedies of the Seller and the Buyer under this
Article IX are exclusive and in lieu of any and all other rights and remedies
which the Seller and the Buyer may have under this Agreement or otherwise for
monetary relief with respect to (i) any breach or failure to perform any
covenant or agreement set forth in this Agreement or (ii) the Assumed
Liabilities or the Excluded Liabilities, as the case may be.  Without limiting
the foregoing, with respect to the Purchased Assets, the Buyer, for itself and
its Affiliates, does hereby irrevocably release, hold harmless and forever
discharge the Seller from any and all claims of any kind or character, whether
known or unknown, hidden or concealed, resulting from or arising out of or in
connection with Hazardous Substances or any Environmental Law, other than those
liabilities and obligations set forth in Section 2.4(c) hereof.  In furtherance
of the foregoing, the Buyer, for itself and on behalf of its Affiliates, hereby
irrevocably waives any and all rights and benefits with respect to such claims
that it now has, or in the future may have conferred upon it by virtue of any
statute, regulation or common law principle which provides that a general
release does not extend to claims which a party does not know or suspect to
exist in its favor at the time of executing the release, if knowledge of such
claims would have materially affected such party's settlement with the obligor.
In this connection, the Buyer hereby acknowledges that it is aware that factual
matters now unknown to it may have given, or hereafter may give, rise to claims
that are presently unknown, unanticipated and unsuspected, and it further agrees
that this release has been negotiated and agreed upon in light of that
awareness, and the Buyer, for itself and on behalf of its Affiliates,
nevertheless hereby intends irrevocably to release the Seller from the claims
described in this Section 9.1(f).

                                       58
<PAGE>

          9.2   Defense of Claims. (a) If any Indemnitee receives notice of the
                -----------------
assertion of any claim or of the commencement of any claim, action, or
proceeding made or brought by any Person who is not a party to this Agreement or
any Affiliate of a party to this Agreement (a "Third Party Claim") with respect
to which indemnification is to be sought from an Indemnifying Party, the
Indemnitee shall give such Indemnifying Party reasonably prompt written notice
thereof, but in any event not later than ten (10) calendar days after the
Indemnitee's receipt of notice of such Third Party Claim. Such notice shall
describe the nature of the Third Party Claim in reasonable detail and shall
indicate the estimated amount, if practicable, of the Indemnifiable Loss that
has been or may be sustained by the Indemnitee. The Indemnifying Party shall
have the right to participate in or, by giving written notice to the Indemnitee,
to elect to assume the defense of any Third Party Claim at such Indemnifying
Party's own expense and by such Indemnifying Party's own counsel, and the
Indemnitee shall cooperate in good faith in such defense at such Indemnitee's
own expense.

          (b)  If within ten (10) calendar days after an Indemnitee provides
written notice to the Indemnifying Party of any Third Party Claim the Indemnitee
receives written notice from the Indemnifying Party that such Indemnifying Party
has elected to assume the defense of such Third Party Claim as provided in the
last sentence of Section 9.2(a) hereof, the Indemnifying Party shall not be
liable for any legal expenses subsequently incurred by the Indemnitee in
connection with the defense thereof; provided, however, that if the Indemnifying
                                     --------  -------
Party fails to take reasonable steps necessary to defend diligently such Third
Party Claim within twenty (20) calendar days after receiving notice from the
Indemnitee that the Indemnitee believes the Indemnifying Party has failed to
take such steps, the Indemnitee may assume its own defense, and the Indemnifying
Party shall be liable for all reasonable expenses thereof.  Without the prior
written consent of the Indemnitee, the Indemnifying Party shall not enter into
any settlement of any Third Party Claim which would lead to liability or create
any financial or other obligation on the part of the Indemnitee for which the
Indemnitee is not entitled to indemnification hereunder.  If a firm offer is
made to settle a Third Party Claim without leading to liability or the creation
of a financial or other obligation on the part of the Indemnitee for which the
Indemnitee is not entitled to indemnification hereunder and the Indemnifying
Party desires to accept and agree to such offer, the Indemnifying Party shall
give written notice to the Indemnitee to that effect.  If the Indemnitee fails
to consent to such firm offer within ten (10) calendar days after its receipt of
such notice, the Indemnitee may continue to contest or defend such Third Party
Claim and, in such event, the maximum liability of the Indemnifying Party as to
such Third Party Claim shall be the amount of such settlement offer, plus
reasonable costs and expenses paid or incurred by the Indemnitee up to the date
of such notice.

                                       59
<PAGE>

          (c)  Any claim by an Indemnitee on account of an Indemnifiable Loss
which does not result from a Third Party Claim (a "Direct Claim") shall be
asserted by giving the Indemnifying Party reasonably prompt written notice
thereof, stating the nature of such claim in reasonable detail and indicating
the estimated amount, if practicable, but in any event not later than ten (10)
calendar days after the Indemnitee becomes aware of such Direct Claim, and the
Indemnifying Party shall have a period of thirty (30) calendar days within which
to respond to such Direct Claim.  If the Indemnifying Party does not respond
within such thirty (30) calendar day period, the Indemnifying Party shall be
deemed to have accepted such claim.  If the Indemnifying Party rejects such
claim, the Indemnitee shall be free to seek enforcement of its rights to
indemnification under this Agreement.

          (d)  If the amount of any Indemnifiable Loss, at any time subsequent
to the making of an indemnity payment in respect thereof, is reduced by
recovery, settlement or otherwise under or pursuant to any insurance coverage,
or pursuant to any claim, recovery, settlement or payment by or against any
other entity, the amount of such reduction, less any costs, expenses or premiums
incurred in connection therewith (together with interest thereon from the date
of payment thereof at the prime rate then in effect of The Chase Manhattan
Bank), shall promptly be repaid by the Indemnitee to the Indemnifying Party.
Upon making any indemnity payment, the Indemnifying Party shall, to the extent
of such indemnity payment, be subrogated to all rights of the Indemnitee against
any third party in respect of the Indemnifiable Loss to which the indemnity
payment relates; provided, however, that (i) the Indemnifying Party shall then
                 --------  -------
be in compliance with its obligations under this Agreement in respect of such
Indemnifiable Loss and (ii) until the Indemnitee recovers full payment of its
Indemnifiable Loss, any and all claims of the Indemnifying Party against any
such third party on account of such indemnity payment are hereby made expressly
subordinated and subjected in right of payment to the Indemnitee's rights
against such third party. Without limiting the generality or effect of any other
provision hereof, each such Indemnitee and Indemnifying Party shall duly execute
upon request all instruments reasonably necessary to evidence and perfect the
foregoing subrogation and subordination rights. Nothing in this Section 9.2(d)
shall be construed to require any party hereto to obtain or maintain any
insurance coverage.

          (e)  A failure to give timely notice as provided in this Section 9.2
shall not affect the rights or obligations of any party hereunder except if, and
only to the extent that, as a result of such failure, the party which was
entitled to receive such notice was actually prejudiced as a result of such
failure.

                                       60
<PAGE>

                                   ARTICLE X
                                   ---------
                          TERMINATION AND ABANDONMENT
                          ---------------------------

          10.1   Termination. (a) This Agreement may be terminated at any time
                 -----------
prior to the Closing Date, by mutual written consent of the Buyer and the
Seller.

          (b)  This Agreement may be terminated by the Seller or the Buyer if
(i) the transactions contemplated hereby shall not have been consummated on or
before eighteen (18) months from the date of this Agreement (the "Termination
Date"); provided, however, that the right to terminate this Agreement under this
        --------  -------
Section 10.1(b) shall not be available to either Seller or Buyer if its failure
to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing Date to occur on or before such date;
provided, further, that if on the Termination Date the conditions to the Closing
--------  -------
set forth in Section 8.1(c) shall not have been fulfilled but all other
conditions to the Closing shall be fulfilled or shall be capable of being
fulfilled, then the Termination Date shall be the date which is twenty-four (24)
months from the date of this Agreement.

          (c)  This Agreement may be terminated by either the Seller or the
Buyer if (i) any Governmental Authority or regulatory body, the consent of which
is a condition to the obligations of the Seller and the Buyer to consummate the
transactions contemplated hereby, shall have determined not to grant its consent
and all appeals of such determination shall have been taken and have been
unsuccessful, or (ii) any court of competent jurisdiction in the United States
or any State shall have issued an order, judgment or decree permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such order, judgment or decree shall have become final and
nonappealable.

          (d)  This Agreement may be terminated by the Buyer, if there has been
a material violation or breach by the Seller of any agreement, representation or
warranty contained in this Agreement which has rendered the satisfaction of any
condition to the obligations of the Buyer impossible and such violation or
breach has not been waived by the Buyer.

          (e)  This Agreement may be terminated by the Seller, if there has been
a material violation or breach by the Buyer of any agreement, representation or
warranty contained in this Agreement which has rendered the satisfaction of any
condition to the obligations of the Seller impossible and such violation or
breach has not been waived by the Seller.

          (f)  This Agreement may be terminated by either the Seller or the
Buyer in accordance with the provisions of Sections 7.12(b) or (c) hereof.

                                       61
<PAGE>

          10.2  Procedure and Effect of Termination. In the event of termination
                -----------------------------------
of this Agreement and abandonment of the transactions contemplated hereby by
either or both of the parties pursuant to Section 10.1 hereof, written notice
thereof shall forthwith be given by the terminating party to the other party and
this Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:

          (a)  such termination shall be the sole remedy of the parties hereto
with respect to breaches of any agreement, representation or warranty contained
in this Agreement and none of the parties hereto nor any of their respective
trustees, directors, officers or Affiliates, as the case may be, shall have any
liability or further obligation to the other party or any of their respective
trustees, directors, officers or Affiliates, as the case may be, pursuant to
this Agreement, except in each case as stated in this Section 10.2 and in
Sections 7.2(b), 7.3 and 7.7 hereof; and

          (b)  all filings, applications and other submissions made pursuant to
this Agreement, to the extent practicable, shall be withdrawn from the agency or
other person to which they were made.

                                  ARTICLE XI
                                  ----------
                           MISCELLANEOUS PROVISIONS
                           ------------------------

          11.1  Amendment and Modification.  Subject to applicable law, this
                --------------------------
Agreement may be amended, modified or supplemented only by written agreement of
the Seller and the Buyer.

          11.2  Waiver of Compliance; Consents. Except as otherwise provided in
                ------------------------------
this Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled to
the benefits thereof only by a written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.

          11.3  No Survival of Representations and Warranties. Each and every
                ---------------------------------------------
representation and warranty contained in this Agreement and each and every
covenant contained in this Agreement (other than the covenants in Sections 2.5,
3.2, 3.3, 3.4, 7.1(d), 7.1(f), 7.1(g), 7.1(h), 7.1(i), 7.1(j), 7.1(k), 7.1(l)(i)
and 7.1(1)(ii), 7.2(b), 7.2(c), 7.3, 7.4, 7.5, 7.6(e), 7.7, 7.8, 7.9, 7.11,
7.13, 7.17(b) (which covenants shall survive for a period of one year or
otherwise in accordance with their terms), 9.1 and 9.2 hereof ) shall expire
with, and be terminated and extinguished by, (i) the

                                       62
<PAGE>

consummation of the sale of the Purchased Assets and the transfer of the Assumed
Liabilities pursuant to this Agreement and shall not survive the Closing Date,
or (ii) the termination of this Agreement pursuant to Section 10.1 hereof or
otherwise; and none of the Seller, the Buyer or any officer, director, trustee
or Affiliate of either of them shall be under any liability whatsoever with
respect to any such representation or warranty.

          11.4  Notices. All notices and other communications hereunder shall be
                -------
in writing and shall be deemed given if delivered personally or by facsimile
transmission, telexed or mailed by overnight courier or registered or certified
mail (return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice, provided that notices of a change of address shall be effective
only upon receipt thereof):

          (a)  If to the Seller, to:

               Nevada Power Company
               c/o Sierra Pacific Resources
               6100 Neil Road
               Reno, Nevada 89511
               Attention: William E. Peterson
               Telecopy:  (775) 834-5959

               with copies to:

               Skadden, Arps, Slate, Meagher & Flom LLP
               4 Times Square
               New York, New York 10036-6522
               Attention: Sheldon S. Adler, Esq.
               Telecopy:  (212) 735-2000

          (b)  if to the Buyer, to:

               NRG Energy, Inc.
               Symphony Towers
               Suite 2740
               750 "B" Street
               San Diego, CA 92101-8129
               Attention: David Lloyd, Esq.
               Telecopy:  (619) 615-7663

                                       63
<PAGE>

               Dynegy Holdings Inc.
               1000 Louisiana Street, Suite 5800
               Houston, TX 77002
               Attention: Alisa B. Johnson, Esq.
               Telecopy:  (713) 767-8508

               with copies to:

               Stoel Rives LLP
               900 SW Fifth Avenue
               Suite 2300
               Portland, OR 97204-1268
               Attention:  William H. Holmes, Esq.
               Telecopy:  503-220-2480

          11.5  Assignment. This Agreement and all of the provisions hereof
                ----------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but, except as provided in Section
11.5, neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party hereto, including by operation of law
without the prior written consent of the other party, nor is this Agreement
intended to confer upon any other Person except the parties hereto any rights or
remedies hereunder.

          For purposes of this Agreement, subject to Section 7.13, the term
"Affiliate Assignee" shall refer to any direct or indirect subsidiary of Buyer
and any constituent partner or participant in Buyer (if Buyer is a partnership,
joint venture, consortium or other association or organization) to whom any of
Buyer's rights and obligations under this Agreement are assigned in compliance
with the requirements of this Section.  For purposes of this Agreement,
"Financing Entity" shall mean any Person designated by Buyer to Seller as a
lessor in connection with any Off-Balance Sheet Lease Facility, and "Permitted
Assignee" shall mean any Affiliate Assignee or Financing Entity, as the case may
be.  For purposes of this Agreement, "Off-Balance Sheet Lease Facility" shall
mean any long-term lease of the Purchased Assets, where the lease is accounted
for by Buyer on its financial statements, prepared in accordance with GAAP, as
an operating lease, whether or not such transaction is a leveraged lease (in
which the Financing Entity is the owner of the Purchased Assets for U.S. federal
income tax purposes), or a synthetic lease, tax ownership operating lease, tax
retention Operating lease or similar lease transaction where Buyer is treated as
owner of the leased property for U.S. federal income tax purposes.
Notwithstanding any contrary provisions contained in this Agreement, the parties
agree that, before and after the Closing, Buyer, in its sole discretion, may
assign any or all of its rights and obligations arising under this Agreement or
any Ancillary Agreement to one or more Permitted Assignees, provided that,
                                                            --------
unless Seller shall

                                       64
<PAGE>

agree to alternative arrangements in writing, no such assignment shall relieve
Buyer of any obligation or liability to Seller under this Agreement or under any
Ancillary Agreement, and provided further that, unless Seller shall agree to
                         -------- -------
alternative arrangements in writing, the following shall apply:

          (a)  Buyer shall provide Seller with prompt written notice of any such
assignment.

          (b)  No such assignment shall be effected if the making of the
assignment will result in Seller's or Buyer's inability to obtain any consent or
authorization reasonably required to consummate the transactions contemplated by
this Agreement or to avoid economic detriment to the Seller arising from the
consummation of such transactions.

          (c)  Irrespective of any such assignment or the identity of the party
or parties executing any Ancillary Agreements:

                    (i)  Buyer shall remain jointly and severally liable to
     Seller and to third parties with respect to any Assumed Liabilities
     transferred to or undertaken by a Permitted Assignee, and shall remain
     jointly and severally liable to Seller with respect to any other covenant,
     obligation or liability to Seller under this Agreement or under an
     Ancillary Agreement that is transferred to, or undertaken by, a Permitted
     Assignee, including without limitation, the payment of all sums due to
     Seller hereunder or under an Ancillary Agreement, it being understood that
     all such covenants, obligations and liabilities shall constitute the direct
     and primary obligation of Buyer to Seller (and to third parties in the case
     of the Assumed Liabilities); and

                    (ii) Without limiting the generality of the foregoing, if
     and to the extent that the application of any principle of law or of common
     law would construe the retention by Buyer of the direct and primary
     obligation to perform any and all obligations, liabilities or covenants
     assigned to or assumed or undertaken by a Permitted Assignee to be a
     guaranty by the Buyer of the Permitted Assignee's performance, then the
     Buyer hereby irrevocably, absolutely and unconditionally guarantees to
     Seller the full, prompt and faithful performance by such Permitted Assignee
     of all covenants and obligations to be performed by such Permitted Assignee
     under this Agreement and any Ancillary Agreement assigned to such Permitted
     Assignee.

          (d)  Buyer further hereby agrees that a separate action or actions may
be brought and prosecuted against Buyer for any such covenant, obligation or
liability assigned to a Permitted Assignee, whether action is brought against
the pertinent Permitted Assignee or whether such Permitted Assignee is joined in
any

                                       65
<PAGE>

such action or actions (Buyer hereby waiving any right to require Seller to
proceed against a Permitted Assignee).

          (e)  Buyer hereby authorizes Seller, without notice and without
affecting Buyer's liability hereunder, from time to time to (i) renew,
compromise, extend, accelerate, or otherwise change the terms of any obligation
of a Permitted Assignee hereunder or under any Ancillary Agreement with the
agreement of such Permitted Assignee, (ii) take and hold security for the
obligations of any such Permitted Assignee and exchange, enforce, waive and
release any such security, and (iii) apply such security and direct the order or
manner of sale thereof as Seller in its discretion may determine.

          (f)  Buyer hereby further waives:

               (i)   Any defense that may arise by reason of the incapacity or
     lack of authority of any Permitted Assignee;

               (ii)  Any defense based upon a statute or rule of law which
     provides that the obligations of a surety must be neither larger in amount
     nor in other respects more burdensome than those of the principal;

               (iii) Any duty on the part of Seller to disclose to Buyer any
     facts that Seller may now or hereafter know about a Permitted Assignee; and

          (g)  So long as Buyer has any obligation to Seller under this
Agreement or the Ancillary Agreements, as to any Affiliate Assignee (but not any
Financing Entity), any right to subrogation, reimbursement, exoneration or
contribution or any other rights that would result in Buyer being deemed a
creditor of a Permitted Assignee under the federal Bankruptcy Code or any other
law, in each case resulting from the existence or performance of obligations of
a Permitted Assignee hereunder or under any Ancillary Agreement.

          11.6  Arbitration. Any dispute, controversy or claim arising out of or
                -----------
relating to this agreement, or the breach, termination or validity hereof (a
"Dispute"), shall be finally settled by arbitration in accordance with the then-
prevailing Commercial Arbitration Rules of the American Arbitration Association,
as modified herein (the "Rules"). The place of arbitration shall be Nevada.
There shall be three arbitrators, of whom the Seller shall appoint one and of
whom the Buyer shall appoint one. The two arbitrators so appointed shall select
a third arbitrator who shall act as the chairman of the tribunal. If any
arbitrator is not appointed within the time limits provided herein or in the
Rules, such arbitrator shall be appointed by the American Arbitration
Association. The arbitral tribunal is not empowered to award damages in excess
of compensatory damages, and each party hereby irrevocably waives any

                                       66
<PAGE>

right to recover punitive, exemplary or similar damages with respect to any
dispute. Any arbitration proceedings, decision or award rendered hereunder and
the validity, effect and interpretation of this arbitration provision shall be
governed by the Federal Arbitration Act, 9 U.S.C. (S)(S) 1-16, and judgment upon
any award may be entered in any court of competent jurisdiction.

          11.7   Governing Law. This Agreement shall be governed by and
                 -------------
construed in accordance with the laws of the State of Nevada (regardless of the
laws that might otherwise govern under applicable Nevada principles of conflicts
of law) as to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.

          11.8   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.

          11.9   Interpretation. The article and section headings contained in
                 --------------
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.

          11.10  Entire Agreement. This Agreement, including the documents,
                 ----------------
exhibits, schedules, certificates and instruments referred to herein, and the
Confidentiality Agreement embody the entire agreement and understanding of the
parties hereto in respect of the transactions contemplated by this Agreement.
There are no restrictions, promises, representations, warranties, covenants or
undertakings, other than those expressly set forth or referred to herein or
therein. It is expressly acknowledged and agreed that there are no restrictions,
promises, representations, warranties, covenants or undertakings of the Seller
contained in any material made available to the Buyer pursuant to the terms of
the Confidentiality Agreement (including the Offering Memorandum, dated March
2000) as supplemented, or the correspondence relating to the divestiture of
Seller's generation assets previously made available to the Buyer by the Seller
and CSFB. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such transactions other than the
Confidentiality Agreement; (i) provided, however, that the paragraph in the
                               --------  -------
Confidentiality Agreement entitled "Non-Disclosure of Interest in Power
Generation Assets" is, only with respect to the Purchased Assets, superceded by
Section 7.5 of this Agreement, and (ii) in the event of any conflict between
Section 7.2(b) of this Agreement and the Confidentiality Agreement, Section
7.2(b) shall control

          11.11  Bulk Sales or Transfer Laws. The Buyer acknowledges that the
                 ---------------------------
Seller shall not comply with the provision of any bulk sales or transfer laws of

                                       67
<PAGE>

any jurisdiction in connection with the transactions contemplated by this
Agreement. The Buyer hereby waives compliance by the Seller with the provisions
of the bulk sales or transfer laws of all applicable jurisdictions.

                                       68
<PAGE>

          IN WITNESS WHEREOF, the Seller and the Buyer have caused this Asset
Sale Agreement for the Clark Asset Bundle to be signed by their respective duly
authorized officers as of the date first above written.

                                   NEVADA POWER COMPANY

                                   By:___________________________________
                                   Name:  William E. Peterson
                                   Title: Sr. Vice President, General Counsel
                                           And Corporate Secretary Title:

                                   NRG ENERGY, INC.

                                   By: ___________________________________
                                   Name:  Craig A. Mataczynski
                                   Title: Senior Vice President Title:

                                   DYNEGY HOLDINGS INC.

                                   By: ___________________________________
                                   Name:  Edward P. Hermann
                                   Title: Attorney-in-Fact<PAGE>

                                                                   Exhibit 10(F)

                     TRANSITIONAL POWER PURCHASE AGREEMENT

                                BY AND BETWEEN

                             NEVADA POWER COMPANY

                                      AND

                                CLARK POWER LLC

DATED:  NOVEMBER 16, 2000

ASSET BUNDLE:  CLARK

                                       1
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                                         Page
-------                                                                                                         ----
<S>                                                                                                             <C>
 1.      DEFINITIONS..............................................................................................1
 2.      TERM.....................................................................................................7
 3.      SECURITY.................................................................................................9
 4.      SUPPLY SERVICE..........................................................................................10
 5.      NOTIFICATION............................................................................................13
 6.      PRICING OF ENERGY AND ANCILLARY SERVICES................................................................15
 7.      INVOICING AND PAYMENTS..................................................................................15
 8.      REGULATORY APPROVALS....................................................................................19
 9.      COMPLIANCE..............................................................................................19
10.      INDEMNIFICATION.........................................................................................20
11.      LIMITATION OF LIABILITY.................................................................................21
12.      FORCE MAJEURE...........................................................................................22
13.      DISPUTES................................................................................................24
14.      NATURE OF OBLIGATIONS...................................................................................26
15.      SUCCESSORS AND ASSIGNS..................................................................................26
16.      REPRESENTATIONS.........................................................................................28
17.      DEFAULT AND REMEDIES....................................................................................28
18       FACILITY ADDITIONS AND MODIFICATIONS....................................................................29
19.      COORDINATION............................................................................................30
20.      EMERGENCY AND NONEMERGENCY CONDITION RESPONSE...........................................................30
21.      OUTAGE SCHEDULING.......................................................................................30
22.      REPORTS.................................................................................................32
23.      COMMUNICATIONS..........................................................................................32
24.      NOTICES.................................................................................................33
25.      MERGER..................................................................................................34
26.      HEADINGS................................................................................................34
27.      COUNTERPARTS AND INTERPRETATION.........................................................................34
28.      SEVERABILITY............................................................................................34
29.      WAIVERS.................................................................................................35
30.      AMENDMENTS..............................................................................................35
31.      TIME IS OF THE ESSENCE..................................................................................35
32.      APPROVALS...............................................................................................35
33.      PLR SERVICE.............................................................................................36
34.      CONFIDENTIALITY.........................................................................................36
35.      CHOICE OF LAW...........................................................................................38
</TABLE>

<TABLE>
<CAPTION>
Exhibits                                                                                                       Page
--------                                                                                                       ----
<S>                                                                                                            <C>
EXHIBIT A         ASSET BUNDLE CAPACITIES AND OPERATING PARAMETERS..............................................A-1
EXHIBIT B         PRICE FLOOR OF ENERGY, PRICE CEILING OF ENERGY, AND PRICE OF
                  ANCILLARY SERVICES............................................................................B-1
EXHIBIT C         SUPPLIER'S MONTHLY INVOICE....................................................................C-1
EXHIBIT D         BUYER'S MONTHLY INVOICE - REPLACEMENT COSTS...................................................D-1
EXHIBIT E         YEAR END TRUE-UP INVOICE......................................................................E-1
EXHIBIT F         NOTICES, BILLING AND PAYMENT INSTRUCTIONS.....................................................F-1
EXHIBIT G         FORM OF AVAILABILITY NOTICE...................................................................G-1
EXHIBIT H         FORM OF GUARANTEE.............................................................................H-1
EXHIBIT I         COMPANY OBSERVED HOLIDAYS.....................................................................I-1
EXHIBIT J         ADJUSTMENTS TO TPPA AMOUNT....................................................................J-1
EXHIBIT K         ADJUSTMENTS TO MINIMUM ANNUAL TAKE............................................................K-1
EXHIBIT L         ENERGY APPLICABLE TO MINIMUM ANNUAL TAKE......................................................L-1
</TABLE>

                                       i
<PAGE>

                     TRANSITIONAL POWER PURCHASE AGREEMENT

This Agreement is made and entered into as of November 16, 2000 by and between
Nevada Power Company, a Nevada corporation ("Buyer"), and Clark Power LLC, a
Delaware limited liability company (the "Supplier"). Buyer and Supplier are
referred to individually as a "Party" and collectively as the "Parties."

WITNESSETH:

WHEREAS, Buyer is selling its Clark generating station and other assets
associated therewith to NRG Energy, Inc. a Delaware corporation, and Dynegy
Holdings Inc., a Delaware corporation, both affiliates of Supplier (the "Asset
Sale");

WHEREAS, notwithstanding the Asset Sale, Buyer expects that it has been
designated as the Provider of Last Resort ("PLR") for its Nevada retail electric
customers who are unable to obtain electric service from an alternative seller
or who fail to select an alternative seller. The load required to serve such
customers, plus the customers under those wholesale sales agreements existing at
the Effective Date, is referred to herein as Buyer's Transitional Resource
Requirement; and

WHEREAS, as a result of the Asset Sale, Buyer will no longer have its interest
in the Clark generating station as a source of supply for its Transitional
Resource Requirement; and

WHEREAS, Supplier has or is willing to secure the necessary resources to provide
a portion of Buyer's Transitional Resource Requirement; and

WHEREAS, Buyer desires to purchase from Supplier and Supplier desires to sell
Energy and Ancillary Services under contract to Buyer; and

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

1.      DEFINITIONS

        1.1     Format.

                1.1.1   References to Articles and Sections herein are
                        cross-references to Articles and Sections, respectively,
                        in this Agreement, unless otherwise stated.

                1.1.2   Any parts of this Agreement which are incorporated by
                        reference shall have the same meaning as if set forth in
                        full text herein.

                                       2
<PAGE>

        1.2     Definitions. As used in this Agreement, the following terms
                -----------
                shall have the meanings set forth below:

                1.2.1   "Agreement" means this Agreement together with the
                         ---------
                        Exhibits attached hereto, as such may be amended from
                        time to time.

                1.2.2   "Adjusted Replacement Cost of Energy" means the
                         -----------------------------------
                        Replacement Cost of Energy that will be due from
                        Supplier after True-up in accordance with the provisions
                        of Section 7.5. Example determinations of the Adjusted
                        Replacement Cost of Energy are shown on Exhibit E.

                1.2.3   "Ancillary Services" means those capacity-related
                         ------------------
                        services as listed in Exhibit B as well as the Energy
                        component of such services. These services are defined
                        in Buyer's OATT.

                1.2.4   "Asset Bundle" means the Clark generating station(s) and
                         ------------
                        other assets associated therewith pursuant to the terms
                        of the Asset Sale Agreement.

                1.2.5   "Asset Bundle Capacity" means, with respect to each unit
                         ---------------------
                        listed in Exhibit A, the net generating capacity (in
                        megawatts ("MW")) of such unit, as modified from time to
                        time in accordance with Section 5.2, Section 20, and
                        Section 21, and not to exceed at any time the net
                        capacity for each unit listed in Exhibit A. Asset Bundle
                        Capacity shall also mean, as the context requires, the
                        Energy (in megawatt-hours ("MWh")) and the Ancillary
                        Services which the units would be capable of producing
                        if they operated at the capacity level described in the
                        first sentence of this Section 1.2.5.

                1.2.6   "Asset Sale" has the meaning set forth in the Recitals.
                         ----------

                1.2.7   "Asset Sale Agreement" means the Agreement between Buyer
                         --------------------
                        and Supplier's affiliates, NRG Energy, Inc., a Delaware
                        corporation, and Dynegy Holdings Inc., a Delaware
                        corporation, dated as of November 16, 2000, to purchase
                        Buyer's Asset Bundle.

                1.2.8   "Asset Sale Closing" means the transfer of Buyer's
                         ------------------
                        ownership of the Asset Bundle through the consummation
                        of the Asset Sale pursuant to the terms of the Asset
                        Sale Agreement.

                1.2.9   "Average Cost of Delivered Energy" means the total cost
                         --------------------------------
                        of Delivered Energy for the Contract Year after the
                        application of the Annual True-up Mechanism from Section
                        7.5 divided by the total Delivered Energy for the
                        Contract Year. Example determinations of Average Cost of
                        Delivered Energy are shown on Exhibit E.

                1.2.10  "Availability Notice" means a notice delivered from time
                         -------------------
                        to time by Supplier to Buyer pursuant to Section 5.2
                        notifying Buyer of changes in the availability of the
                        Asset Bundle.

                                       3
<PAGE>

                1.2.11  "Business Day" means any day other than Saturday,
                         ------------
                        Sunday, and any day that is an observed holiday by Buyer
                        as shown on Exhibit I.

                1.2.12  "Buyer's OATT" means Buyer's then-effective Open Access
                         ------------
                        Transmission Tariff, as it may be amended, which has
                        been accepted for filing by the FERC.

                1.2.13  "CALPX" means the California Power Exchange and any
                         -----
                        successor entity thereto.

                1.2.14  "Confidential Information" has the meaning set forth in
                         ------------------------
                        Section 34.

                1.2.15  "Contract Year" means, with respect to the first
                         -------------
                        Contract Year, the period beginning on the Effective
                        Date and, with respect to each subsequent Contract Year,
                        the period immediately following the end of the
                        preceding Contract Year, and in each case ending on the
                        earlier of the date which is twelve (12) months
                        thereafter or the termination date of this Agreement.

                1.2.16  "Control Area Operator" means an entity or organization,
                         ---------------------
                        and its representatives, which is responsible for
                        operating and maintaining the reliability of the
                        electric power system(s) within the Transmission System.
                        The Control Area Operator is also referred to as the
                        transmission operator.

                1.2.17  "Credit Amount" shall mean an amount equal to the TPPA
                         -------------
                        Amount, plus an additional amount equal to $40/MWh
                        multiplied by 395 megawatts, multiplied by the number of
                        hours remaining in this Agreement until March 1, 2003.

                1.2.18  "Delivered Amount" means, with respect to any Dispatch
                         ----------------
                        Hour, the Energy delivered by Supplier to Buyer at the
                        designated Point(s) of Delivery during such Dispatch
                        Hour, whether or not such Energy was generated by the
                        Asset Bundle, plus any additional amounts pursuant to
                        Section 4.1.2, Section 4.1.3 and the Ancillary Services
                        provided by Supplier for Buyer during any Dispatch Hour
                        pursuant to the terms of this Agreement.

                1.2.19  "Derating" means a reduction to the Asset Bundle
                         --------
                        Capacity.

                1.2.20  "Dispatch Hour" means the prescribed hour(s) when Energy
                         -------------
                        is to be delivered by Supplier to Buyer at the
                        designated Point(s) of Delivery and the prescribed
                        hour(s) when Ancillary Services are to be provided to
                        the ISA by Supplier on behalf of Buyer.

                                       4
<PAGE>

                1.2.21  "EDU" means electric distribution utility, the
                         ---
                        organization with the responsibility for the
                        distribution of energy over Buyer's distribution system
                        to retail end-users.

                1.2.22  "Effective Date" means the date that this Agreement
                         --------------
                        becomes effective which shall be the date on which the
                        Closing Date, as defined in the Asset Sale Agreement,
                        actually occurs.

                1.2.23  "Emergency Condition" shall mean a public declaration by
                         -------------------
                        the ISA or Control Area Operator that the Transmission
                        System is in danger of imminent voltage collapse or
                        uncontrollable cascading outages.

                1.2.24  "Energy" means electricity (measured in MWh) and
                         ------
                        associated power-producing capacity to be provided by
                        Supplier to Buyer pursuant to this Agreement. Also known
                        as "firm energy and associated firm capacity".

                1.2.25  "Event of Default" has the meaning set forth in Section
                         ----------------
                        17 hereof.

                1.2.26  "FERC" means the Federal Energy Regulatory Commission
                         ----
                        and any successor agency thereto.

                1.2.27  "Force Majeure" has the meaning set forth in Section 12
                         -------------
                        hereof.

                1.2.28  "GAAP" means Generally Accepted Accounting Principles
                         ----
                        for the United States.

                1.2.29  "Good Utility Practice" means the applicable practices,
                         ---------------------
                        methods, and act:

                        (i)     required by applicable Laws, permits and
                                reliability criteria, whether or not the Party
                                whose conduct at issue is a member thereof, and

                        (ii)    otherwise engaged in or approved by a
                                significant portion of the United States
                                electric utility industry during the relevant
                                time period, which, in the exercise of
                                reasonable judgement in light of the facts known
                                at the time the decision was made, could have
                                been expected to accomplish the desired result
                                at a reasonable cost consistent with good
                                business practices, safety, environmental
                                protection, economy and expediency. 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 practices, methods
                                or acts generally accepted in the United States
                                electric utility industry.

                1.2.30  "Governmental Authority" means any foreign, federal,
                         ----------------------
                        state, local, tribal or other governmental, regulatory
                        or administrative agency, court, commission, department,
                        board, or other governmental subdivision, legislature,
                        rulemaking board, tribunal, arbitrating body, or other
                        governmental authority.

                                       5
<PAGE>

                1.2.31  "Gross Replacement Costs of Energy" means Buyer's
                         ---------------------------------
                        Replacement Cost of Energy prior to adjustment for the
                        amount that Buyer would have paid for the Energy if
                        Supplier had delivered the Energy to Buyer. Example
                        determinations of Gross Replacement Costs of Energy are
                        shown on Exhibit D.

                1.2.32  "Guarantee" has the meaning set forth in Section 3.1.2
                         ---------
                        hereof.

                1.2.33  "Guarantor" has the meaning set forth in Section 3.1.2
                         ---------
                        hereof.

                1.2.34  "Invoiced Replacement Costs" means the Replacement Costs
                         --------------------------
                        which have been billed to Supplier or subtracted from
                        payments to Supplier in accordance with the provisions
                        of Section 4.2 and Section 7.4.

                1.2.35  "ISA" means the Mountain West Independent System
                         ---
                        Administrator, or the regional transmission organization
                        authorized with the responsibility for the scheduling
                        and administration of Energy and Ancillary Services
                        over, through and within the Transmission System in
                        coordination with other interconnected entities to
                        provide transmission services. The ISA is also referred
                        to herein as transmission administrator.

                1.2.36  "ISA's OATT" means the ISA's then-effective Open Access
                         ----------
                        Transmission Tariff, as it may be amended, which has
                        been accepted for filing by the FERC.

                1.2.37  "Law" means any law, treaty, code, rule, regulation,
                         ---
                        order, determination, permit, certificate,
                        authorization, or approval of an arbitrator, court or
                        other Governmental Authority which is binding on a Party
                        or any of its property.

                1.2.38  "Limit on Excused Energy" means the amount of energy
                         -----------------------
                        that can be excused under the provisions of Section 12.4
                        as shown on Exhibit A.

                1.2.39  "Market Price of Energy" has the meaning set forth in
                         ----------------------
                        Section 6.2.1.

                1.2.40  "Minimum Annual Energy Take" has the meaning set forth
                         --------------------------
                        in Section 4.1.2.

                1.2.41  "Minimum Investment Grade Rating" of a Person means that
                         -------------------------------
                        such Person has a minimum credit rating on its senior
                        unsecured debt securities of at least two of the
                        following ratings: (i) BBB as determined by Standard &
                        Poor's Corporation, (ii) Baa2 as determined by Moody's
                        Investors Service, Inc., or (iii) a comparable rating by
                        another nationally recognized rating service reasonably
                        acceptable to Buyer.

                                       6
<PAGE>

                1.2.42  "Minimum Tangible Net Worth" means the total book value
                         --------------------------
                        of shareholder's equity less the balance of goodwill, as
                        reported on the latest quarterly balance sheet prepared
                        in accordance with Generally Accepted Accounting
                        Principles (GAAP).

                1.2.43  "NERC" means the North American Electric Reliability
                         ----
                        Council and any successor entity thereto.

                1.2.44  "Nonemergency Condition" shall mean the determination,
                         ----------------------
                        direction or order by the ISA, or Control Area Operator
                        to Supplier and/or Buyer to change the Supply Amount
                        which is not a result of or due to an Emergency
                        Condition. A Nonemergency Condition includes an
                        insufficiency of Ancillary Services to securely operate
                        the Transmission System.

                1.2.45  "Operating Representatives" means the persons designated
                         -------------------------
                        to transmit and receive routine operating and emergency
                        communications required under this Agreement.

                1.2.46  "Party" has the meaning set forth in the preamble of
                         -----
                        this Agreement.

                1.2.47  "Permitted Deratings" means those reductions to the
                         -------------------
                        Asset Bundle Capacity of which Supplier may notify Buyer
                        from time to time in an Availability Notice pursuant to
                        Section 5.2.

                1.2.48  "Person" means any natural person, partnership, limited
                         ------
                        liability company, joint venture, corporation, trust,
                        unincorporated organization, or governmental entity or
                        any department or agency thereof.

                1.2.49  "Point of Delivery" means the point (s) which has (have)
                         -----------------
                        been specified as the Interconnection Point(s) in the
                        Interconnection Agreement between Buyer and Supplier,
                        dated November 16, 2000, as it may be amended from time
                        to time, as well as any alternative locations agreed
                        upon pursuant to Section 4.1.6.

                1.2.50  "Price Ceiling of Energy" means the ceiling price of
                         -----------------------
                        Energy as stated in Exhibit B.

                1.2.51  "Price Floor of Energy" means the floor price of Energy
                         ---------------------
                        as stated in Exhibit B.

                1.2.52  "Provider of Last Resort (PLR)" has the meaning set
                         -----------------------------
                        forth in the Recitals.

                1.2.53  "PUCN" means the Public Utilities Commission of Nevada
                         ----
                        and any successor entity thereto.

                                       7
<PAGE>

                1.2.54  "Replacement Costs" means with respect to a period of
                         -----------------
                        time, the difference between (a) the actual costs,
                        including without limitation related penalties and
                        transmission costs, incurred by Buyer to replace any
                        shortfall between (1) the Supply Amount and (2) the
                        Delivered Amounts of Energy, (or in the case of
                        Ancillary Services the Supplier's schedule of Ancillary
                        Services) during such period and (b) the payments the
                        Supplier would have been entitled to in respect of such
                        shortfall in delivery; provided that Replacement Costs
                        shall also be subject to the annual true-up mechanism
                        set forth in Section 7.5.

                1.2.55  "Supply Amount" means, with respect to each Dispatch
                         -------------
                        Hour, the amount of Energy and Ancillary Services, not
                        to exceed the Asset Bundle Capacity for such Dispatch
                        Hour, requested by Buyer to be delivered by Supplier
                        during any Dispatch Hour. The Supply Amount for any
                        Dispatch Hour shall be determined pursuant to Section
                        5.1.

                1.2.56  "Total Amount of Energy Replaced" means the summation of
                         -------------------------------
                        Replacement Energy as shown on Exhibit E.

                1.2.57  "TPPA Amount" means $158,000,000 as such amount may be
                         -----------
                        adjusted pursuant to Section 2.3.

                1.2.58  "Transitional Resource Requirement" or "TRR" means the
                         ---------------------------------
                        Energy and loss compensation necessary for Buyer to meet
                        its obligations as a Provider of Last Resort (PLR) for
                        Nevada and under those wholesale sales agreements
                        existing at the Effective Date.

                1.2.59  "Transmission System" means the transmission facilities
                         -------------------
                        constituting Buyer's control area, as of the date this
                        Agreement is executed, plus any modification, upgrade or
                        expansion of, or additions to, such facilities.

                1.2.60  "WSCC" means the Western Systems Coordinating Council
                         ----
                        and any successor entity thereto.

2.      TERM

        2.1     Term. Unless terminated earlier pursuant to the terms of this
                ----
                Agreement, the term of this Agreement shall commence on the
                Effective Date and continue until the earlier of the effective
                date of an order by a Governmental Authority terminating Buyer's
                PLR responsibility, or March 1, 2003. Supplier shall provide
                service under this Agreement commencing on the first hour on the
                day after the Effective Date.

        2.2     Termination.
                -----------

                2.2.1   Except pursuant to Sections 2.2.2 or 17.4, this
                        Agreement may not be terminated without the explicit
                        prior written approval of Buyer.

                2.2.2   If, prior to the Asset Sale Closing, the FERC or any
                        other

                                       8
<PAGE>

                        Governmental Authority places conditions on or requires
                        revisions of this Agreement which have a material
                        adverse effect on Supplier or Buyer, the Parties agree
                        to negotiate in good faith those amendments to the
                        Agreement reasonably needed to preserve the bargain
                        between the Parties. If the Parties fail to negotiate
                        mutually acceptable amendments to this Agreement within
                        sixty (60) days of such action by the FERC or other
                        Governmental Authority, either Party may terminate the
                        Agreement after first notifying the other Party in
                        writing at least ten (10) Business Days prior to the
                        termination date; provided that neither Party may
                        exercise a right of termination pursuant to this Section
                        2.2.2 after the Asset Sale Closing.

                2.2.3   This Agreement may be terminated with the mutual
                        agreement of the Parties.

                2.2.4   Any termination of this Agreement pursuant to this
                        Section 2 shall not take effect until FERC either
                        authorizes the termination or accepts a written notice
                        of termination.

        2.3     Effect of Termination.
                ---------------------

                2.3.1   Adjustment of TPPA Amount. If the Effective Date of this
                        -------------------------
                        Agreement is before June 1, 2001, the TPPA Amount shall
                        be adjusted to equal (1) the TPPA Amount multiplied by
                        (2) 100% plus the sum of the monthly adjustments from
                        Exhibit J for each month or portion thereof between the
                        Effective Date and June 1, 2001. An example calculation
                        is shown on Exhibit J.

                        If the Effective Date of this Agreement is after June 1,
                        2001, the TPPA Amount shall be adjusted to equal (1) the
                        TPPA Amount multiplied by (2) 100% minus the sum of the
                        monthly adjustments from Exhibit J for each month or
                        portion thereof between June 1, 2001 and the Effective
                        Date. An example calculation is shown on Exhibit J.

                        If this Agreement is terminated before March 1, 2003,
                        Supplier shall pay to Buyer an amount, in accordance
                        with the provisions of Section 7, equal to the TPPA
                        Amount which existed before any adjustment in accordance
                        with the first or second paragraph of this Section
                        2.3.1, multiplied by the sum of the monthly adjustments
                        for each month or portion thereof between the date on
                        which this Agreement is terminated and March 1, 2003. An
                        example calculation is shown on Exhibit J.

                2.3.2   Any default or termination of this Agreement shall not
                        release either Party from any applicable provisions of
                        this Agreement with respect to:

                        2.3.2.1 The payment of liquidated damages pursuant to
                            Sections 4.2, 12, 17, 18, or 21.

                        2.3.2.2 Indemnity obligations contained in Section 10,
                            to the extent

                                       9
<PAGE>

                             of the statute of limitations period applicable to
                             any third party claim.

                        2.3.2.3 Limitation of liability provisions contained in
                             Section 11.

                        2.3.2.4 Payment of any unpaid amounts in respect of
                             obligations arising prior to or resulting from
                             termination.

                        2.3.2.5 For a period of one (1) year after the
                             termination date, the right to raise a payment
                             dispute and the resolution thereof pursuant to
                             Section 13.

                        2.3.2.6 The resolution of any dispute submitted pursuant
                             to Section 13 prior to, or resulting from,
                             termination.

3.      SECURITY

        3.1     Supplier Certification; Guarantee. As a condition of Buyer's
                ---------------------------------
                execution of, and continuing compliance with, this Agreement,
                Supplier shall at Supplier's option comply with the provisions
                of either Section 3.1.1 or Section 3.1.2.

                3.1.1   Supplier Certification. Supplier shall (a) provide a
                        ----------------------
                        certificate from a duly authorized corporate officer of
                        Supplier certifying that, as of the Effective Date,
                        Supplier has a credit rating equal to or higher than the
                        Minimum Investment Grade Rating; or (b) post a letter of
                        credit in a form reasonably acceptable to Buyer in the
                        amount of the Credit Amount from a financial institution
                        with each of: (i) a credit rating of A2 or better from
                        Moody's Investors Service, Inc., (ii) a credit rating of
                        A or better from Standard & Poor's Corporation, and
                        (iii) a Minimum Tangible Net Worth ("MTNW") of one (1)
                        billion dollars.

                3.1.2   Guarantee. In the alternative to the provisions of
                        ---------
                        Section 3.1.1, the Supplier may provide a corporate
                        guarantee, in form and substance as set forth in Exhibit
                        H, made by an entity (the "Guarantor") that:

                        3.1.2.1 has a credit rating equal to or higher than the
                             Minimum Investment Grade Rating, together with a
                             certificate from a duly authorized corporate
                             officer of such Guarantor certifying that, as of
                             the Effective Date, such Guarantor has a credit
                             rating equal to or higher than the Minimum
                             Investment Grade Rating; or

                        3.1.2.2 has a MTNW of no less than one (1) billion
                             dollars, together with a certificate from a duly
                             authorized corporate officer of such Guarantor
                             certifying that, as of the Effective Date, such
                             Guarantor has a MTNW of no less than one (1)
                             billion dollars; or

                        3.1.2.3 posts a letter of credit in a form reasonably
                             acceptable to Buyer in the amount of the Credit
                             Amount from a financial

                                       10
<PAGE>

                             institution with each of: (i) a credit rating of A2
                             or better from Moody's Investors Service, Inc.,
                             (ii) a credit rating of A or better from Standard &
                             Poor's Corporation, and (iii) a Minimum Tangible
                             Net Worth ("MTNW") of one (1) billion dollars.

        3.2     Compliance.
                ----------

                3.2.1   Reporting. If at any time during the term of this
                        ---------
                        Agreement, Standard & Poor's Corporation, Moody's
                        Investors Service, Inc. or another nationally recognized
                        firm downgrades the credit rating of Supplier, the
                        Guarantor, or the financial institution that issued the
                        letter of credit, as applicable, then Supplier shall
                        provide Buyer with written notice of such change of
                        circumstance within two (2) Business Days of any such
                        change. In the event such a downgrade also constitutes
                        an Event of Default pursuant to Section 17, the
                        requirements of this Section 3.2.1 are in addition to,
                        and not in lieu of, the requirements of Section 17.

4.      SUPPLY SERVICE

        4.1     Obligations of the Parties.
                --------------------------

                4.1.1   Supply Amount. Supplier shall be required to provide the
                        -------------
                        Supply Amount in any Dispatch Hour. As provided in
                        Section 5.1, Buyer shall makereasonable efforts to
                        ensure that the Supply Amount is no greater than
                        necessary to satisfy Buyer's TRR.

                        4.1.1.1 With the Buyer's prior consent, not to be
                             unreasonably withheld or delayed, Supplier shall be
                             entitled to generate or otherwise procure the
                             Supply Amount from sources other than the Asset
                             Bundle.

                        4.1.1.2 Supplier shall deliver the Supply Amount to
                             Buyer during the Dispatch Hour on a continuous
                             basis at the Point(s) of Delivery and shall
                             schedule the Supply Amount in accordance with the
                             Buyer's OATT or the ISA's OATT, as applicable.

                        4.1.1.3 The Buyer at its sole discretion shall designate
                             the allocation of the Supply Amount between Energy
                             and Ancillary Services in accordance with the
                             notification provisions of Section 5.

                                4.1.1.3.1 The Parties recognize that operation
                                          of the Asset Bundle is subject to, and
                                          thus the Supply Amount at times may be
                                          limited by, the operational parameters
                                          of the Asset Bundle. The Parties
                                          further recognize that the
                                          consolidation of two or more
                                          generating units into an Asset Bundle
                                          precludes contractual provisions
                                          addressing such operational

                                       11
<PAGE>

                                        parameters in a matter normally applied
                                        to Energy purchases from specified
                                        generating units. Consequently, Supplier
                                        will have the right to raise concerns
                                        regarding the effect of such operational
                                        parameters upon Buyer's scheduling
                                        requests, and Buyer will make good faith
                                        efforts to alleviate Supplier's
                                        concerns.

                4.1.2   Minimum Annual Energy Take. The Buyer shall accept a
                        --------------------------
                        minimum annual energy take during each Contract Year.
                        The Minimum Annual Energy Take shall be set forth on
                        Exhibit A.

                        4.1.2.1 Buyer's Obligation to Take. If Buyer is
                                --------------------------
                           unwilling to accept the Minimum Annual Energy Take
                           for any Contract Year, as may be adjusted pursuant to
                           Section 4.1.2.2, the difference (in MWh) between the
                           Supply Amount of Energy (including consideration for
                           Energy that would have been taken but was unavailable
                           due to Permitted Deratings or Force Majeure, as well
                           as the Total Amount of Energy Replaced) and the
                           Minimum Annual Energy Take shall be billed at the
                           Price Ceiling of Energy less the Price Floor of
                           Energy. An example of the monthly determination of
                           the amount of Energy to be credited against the
                           Minimum Annual Energy Take is shown on Exhibit L.

                        4.1.2.2 Adjustments to Minimum Annual Energy Take. Buyer
                                -----------------------------------------
                           shall have the right to reduce the Minimum Annual
                           Energy Take if the number of customers taking
                           electric service from Buyer falls below the number of
                           customers on December 31, 2000. Adjustments will be
                           applicable, on a pro rata basis, on the first (1/st/)
                           day of the month immediately following Supplier's
                           receipt of Buyer's notice of adjustment. Buyer shall
                           provide supporting data in reasonable detail to
                           support its calculations. An example of the
                           calculation of a revised Minimum Annual Energy Take
                           is shown on Exhibit K.

                4.1.3   Supplier Rights to Output. Supplier may sell to others
                        -------------------------
                        any portion of the Asset Bundle Capacity in excess of
                        the Supply Amount.

                4.1.4   Point(s) of Delivery. Supplier shall deliver, and Buyer
                        --------------------
                        shall take delivery of, the Supply Amount of Energy at
                        the Point(s) of Delivery. Subject to Section 4.1.6.2,
                        Supplier shall be responsible for all costs associated
                        with delivery of the Supply Amount of Energy to the
                        Point(s) of Delivery.

                4.1.5   Alternative Points of Delivery. For any Dispatch Hour,
                        ------------------------------
                        either Party may designate one or more alternative
                        Points of Delivery, subject to the other Party's prior
                        approval and consistent with the Buyer's OATT or

                                       12
<PAGE>

                        the ISA's OATT, as applicable, such approval not to be
                        unreasonably withheld or delayed.

                        4.1.5.1 If Supplier has designated an alternative Point
                             of Delivery, Supplier shall be responsible for all
                             costs of delivery to such alternative Point of
                             Delivery.

                        4.1.5.2 If Buyer has designated an alternative Point of
                             Delivery, Buyer shall be responsible for all costs
                             of delivery to such alternative Point of Delivery.

                4.1.6   Fuel. Buyer shall have no responsibility for any fuel
                        ----
                        procurement or fuel transportation costs or activities
                        associated with the Asset Bundle during the term of this
                        Agreement.

                4.1.7   Resale. Except as provided in the next sentence, the
                        ------
                        Supply Amount may be resold by Buyer only as necessary
                        to satisfy Buyer's TRR. If, after submitting the request
                        of the Supply Amount pursuant to Section 5.1, the Buyer
                        determines that the scheduled Supply Amount, together
                        with purchases scheduled under Buyer's other
                        Transitional Power Purchase Agreements, exceeds Buyer's
                        most current projected TRR, then the Buyer also shall
                        resell at wholesale that amount of Energy in excess of
                        Buyer's actual TRR as necessary to balance its load and
                        resources.

                4.1.8   Right to Review. Buyer and Supplier each shall have the
                        ---------------
                        right to review during normal business hours the
                        relevant books and records of the other Party to confirm
                        the accuracy of such as it pertains to transactions
                        under this Agreement. The review shall be consistent
                        with standard business practices and shall follow
                        reasonable notice to the other Party. Reasonable notice
                        for a review of the previous month's records shall be at
                        least a twenty-four (24) hour period from a Business Day
                        to a subsequent Business Day. If a review is requested
                        of other than the previous month's records, then notice
                        of that request shall be provided with a minimum of
                        seven (7) calendar days written notice by the requesting
                        Party. The notice shall specify the period to be covered
                        by the review. The Party providing records can make
                        reasonable requests that the receiving Party keep the
                        records confidential, and the receiving Party shall take
                        reasonable steps to accommodate such requests.

        4.2     Liquidated Damages.
                ------------------

                4.2.1   If the Delivered Amount of Energy is less than the
                        Supply Amount of Energy in any Dispatch Hour during a
                        month, and Replacement Costs computed in respect of such
                        month are greater than zero, then Supplier shall
                        reimburse Buyer for such Replacement Costs. If
                        Supplier's schedule of Ancillary Services is less than
                        the Supply Amount of

                                       13
<PAGE>

                        Ancillary Services in any Dispatch Hour during a month,
                        Supplier shall reimburse Buyer for such Replacement
                        Costs for the difference between Supplier's schedule and
                        the Supply Amount of Ancillary Services. An example of
                        the methodology used to calculate Replacement Costs is
                        provided in Exhibit D.

                4.2.2   Supplier also shall be responsible for any costs
                        incurred by Buyer associated with a violation of
                        reliability criteria (including but not limited to
                        imbalance costs or penalties) due to a deviation between
                        the Supply Amount and Delivered Amount.

                4.2.3   The Parties recognize and agree that the payment of such
                        amounts by Supplier pursuant to this Section 4.2 is an
                        appropriate remedy in the event of such a failure and
                        that any such payment does not constitute a forfeiture
                        or penalty of any kind, but rather constitutes actual
                        costs to Buyer under the terms of this Agreement.

        4.3     Supplier Operating Representative. Supplier shall provide and
                ---------------------------------
                maintain a twenty-four (24) hour seven (7) day per week
                communication link with Buyer's control center and with Buyer's
                schedulers. Supplier's Operating Representatives shall be
                available to address and make decisions on all operational
                matters under this Agreement on a twenty-four (24) hour seven
                (7) day per week basis.

5.      NOTIFICATION

        5.1     Scheduling Notification. Buyer shall provide Supplier with a
                -----------------------
                request of the Supply Amount no later than twenty-four (24)
                hours before day-ahead bids must be submitted to the CALPX.
                Buyer shall make reasonable efforts to ensure that the request
                of the Supply Amount is no greater than that amount then
                projected to be necessary to satisfy Buyer's TRR. In addition,
                for each Supply Amount request, the change in the Supply Amount
                from one (1) hour to the next hour shall be no greater than the
                ramping capability of the units within the Asset Bundle as shown
                in Exhibit A.

        5.2     Availability Notification.
                -------------------------

                5.2.1   No later than 5:00 a.m. (Pacific Time) of each day,
                        Supplier shall deliver to Buyer an Availability Notice
                        in the form set forth in Exhibit G.

                5.2.2   Availability Notices shall provide, for the ninety-six
                        (96) hour period starting at 6:00 a.m. (Pacific Time)
                        that day, Supplier's hourly projection of the
                        unavailability or derating ("Derating") of the Asset
                        Bundle compared to the Asset Bundle Capacity figures
                        stated for each unit in Exhibit A. Each Availability
                        Notice also shall contain, as applicable:

                                       14
<PAGE>

                        (a)  the units which are subject to a Derating;
                        (b)  the magnitude of the Derating;
                        (c)  the hours during which the Derating is expected to
                             apply;
                        (d)  the cause of the Derating;
                        (e)  the extent, if any, to which the Derating is
                             attributable to a Permitted Derating;
                        (f)  the projected Asset Bundle Capacity for each
                             unit during the period covered by the
                             Availability Notice, pursuant to Section 5.2.4
                             below; and
                        (g)  remaining freeboard of each of the Asset Bundle
                             water treatment storage ponds and the forecast
                             inlet flow rate to the brine concentrator treatment
                             plant.

                5.2.3   If and to the extent a Derating is the result of one or
                        more of the following causes, it shall be a Permitted
                        Derating:

                        (a)  approved planned outages pursuant to Section 21;
                        (b)  response to an Emergency Condition as described in
                             Section 20;
                        (c)  subject to the limitations expressed in Section
                             12.5, a Force Majeure event;
                        (d)  a Control Installation Outage pursuant to Section
                             21.3; or
                        (e)  lack of water treatment pond storage capacity at
                             the Asset Bundle; provided that such lack of water
                             treatment pond storage capacity is not due to
                             Supplier's sales to parties other than Buyer;
                             provided further that (i) Buyer shall have the
                             option to augment the Asset Bundle's brine
                             concentrator treatment plant capacity at Buyer's
                             cost and (ii) notwithstanding subsection
                             5.2.3(e)(i), Supplier shall pay for the costs of
                             augmenting such brine concentrator treatment plant
                             capacity to the extent that the lack of water
                             treatment pond storage capacity at the Asset Bundle
                             is caused by Supplier's sales to parties other than
                             Buyer.

                5.2.4   In respect of any Dispatch Hour, the Asset Bundle
                        Capacity of each unit shall be the Asset Bundle Capacity
                        figure stated in Exhibit A minus any Permitted Derating
                        applicable during such hour.

                5.2.5   Neither the Asset Bundle Capacity nor the Supply Amount
                        shall be reduced by Deratings which are not Permitted
                        Deratings. Supplier shall be responsible for all
                        Replacement Costs, pursuant to Section 4.2.1, caused by
                        Deratings that are not Permitted Deratings.

                                       15
<PAGE>

6.      PRICING OF ENERGY AND ANCILLARY SERVICES

        6.1     Overview. The price of Energy paid by Buyer to Supplier shall be
                --------
                based upon a designated hourly market price, subject to monthly
                floor, monthly ceiling, and annual true-up provisions. The Price
                Floor of Energy will ensure that Supplier will receive an
                average price for Energy for each month which is not less than
                the price stated in Exhibit B. The Price Ceiling of Energy
                provision provides that the average price of Energy paid to
                Supplier each month and for each year shall not exceed the price
                stated in Exhibit B.

        6.2     Price of Energy.
                ---------------

                6.2.1   Market Price of Energy. In respect of any Dispatch Hour,
                        ----------------------
                        the designated Market Price of Energy shall be the South
                        of Path 15 ("SP 15") hourly market-clearing price in the
                        day-ahead market from the CALPX as published at the
                        following Web Site (or its successor web site)
                        http://www.calpx.com/prices/index_prices_dayahead_
                        --------------------------------------------------
                        trading.html. Should this hourly market in the day-ahead
                        ------------
                        market not exist for the entire term, the Parties shall
                        agree upon a similar market price index.

                6.2.2   Price Floor of Energy. The Price Floor of Energy is
                        ---------------------
                        stated in Exhibit B and shall not change during the term
                        of this Agreement.

                6.2.3   Price Ceiling of Energy. The Price Ceiling of Energy is
                        -----------------------
                        stated in Exhibit B and shall not change during the term
                        of this Agreement.

        6.3     Pricing of Ancillary Services. The price of the capacity
                -----------------------------
                component of Ancillary Services is stated in Exhibit B. The
                price of Ancillary Services shall not change during the term of
                the Agreement. Supplier shall make available to Buyer and Buyer
                shall offer to pass through the Energy portion of Ancillary
                Services with respect to the Supply Amount to the ISA, or
                Control Area Operator, at the Price Ceiling of Energy (plus
                expected direct transaction costs). The net proceeds shall be
                credited to the Supplier pursuant to Section 7.

        6.4     Price Revisions. The Parties waive any and all rights to seek to
                ---------------
                revise the provisions of this Agreement, including the prices
                stated, pursuant to Sections 205 and/or 206 of the Federal Power
                Act.

7.      INVOICING AND PAYMENTS

        7.1     Invoicing and Payment. On or before the tenth (10/th/) day of
                ---------------------
                each month, Supplier shall send to Buyer an invoice setting
                forth the Supply Amount, Delivered Amount, the Market Price of
                Energy pursuant to Section 6.2.1 for each Dispatch Hour in the
                previous month, any amount due in accordance with Section 7.13
                and the total due from Buyer. The invoice shall be calculated
                based upon data available to Supplier and shall be in accordance
                with this Section 7 and Exhibit C. Buyer shall promptly notify
                Supplier if Buyer in good faith disputes any portion

                                       16
<PAGE>

                of the invoice, stating in reasonable detail the reason for the
                dispute.

        7.2     Monthly Invoice Calculation. On each monthly invoice, Supplier
                ---------------------------
                shall calculate the following amounts:

                7.2.1   The Delivered Amount in respect of each Dispatch Hour
                        multiplied by the corresponding Market Price of Energy
                        pursuant to Section 6.2.1, summed over the billing
                        period;

                7.2.2   Sum of the Delivered Amounts in respect of all Dispatch
                        Hours of the billing period multiplied by the Price
                        Ceiling of Energy;

                7.2.3   Sum of the Delivered Amounts in respect of all Dispatch
                        Hours of the billing period multiplied by the Price
                        Floor of Energy;

                7.2.4   For each Dispatch Hour of the billing period, the
                        shortfall, if any, between the Supply Amount and the
                        Delivered Amount (and in the case of Ancillary Services
                        the shortfall between the Supply Amount of Ancillary
                        Services and Supplier's schedule of Ancillary Services);

                7.2.5   The Supply Amount of Ancillary Service for each dispatch
                        hour multiplied by the price of Ancillary Services as
                        stated in Exhibit B; and

                7.2.6   The Delivered Amount of Energy related to Ancillary
                        Services for each dispatch hour multiplied by the Price
                        Ceiling of Energy as stated in Exhibit B.

                7.2.7   If applicable, any amount to be calculated in accordance
                        with Section 7.13.

        7.3     Supplier's Invoice. Supplier will invoice the lesser of the
                ------------------
                amounts calculated in Sections 7.2.1 and 7.2.2, provided that if
                the amount calculated in Section 7.2.1 is less than the amount
                calculated in Section 7.2.3, Supplier shall invoice Buyer the
                amount calculated in Section 7.2.3. Supplier shall also include
                in its invoice the amounts calculated in Sections 7.2.5, 7.2.6
                and 7.2.7. If the Delivered Amount exceeds the Supply Amount,
                Buyer shall not be obligated to pay for the excess amount. Buyer
                shall pay Supplier for the amounts invoiced pursuant to Section
                7.2.6 upon Buyer's receipt of payment from ISA or Control Area
                Operator. Examples of this monthly invoice calculation (and
                annual true-up process) are contained in Exhibit C.

        7.4     Buyer's Invoice. In the event any shortfall occurs pursuant to
                ---------------
                Section 7.2.4 or payment is due to Buyer pursuant to Section
                7.13, Buyer shall within ten (10) Business Days of receipt of
                Supplier's invoice deliver to Supplier a Buyer's invoice
                detailing any Replacement Costs or other payment due. Buyer
                shall provide supporting data in reasonable detail to support
                its calculations of Replacement Costs. Supplier shall promptly
                notify Buyer if Supplier in good faith disputes any portion of
                the invoice, stating in reasonable detail the reason for the
                dispute. If the Buyer's invoice results in an amount due from
                Supplier to

                                       17
<PAGE>

                Buyer, Buyer may offset such amount from its payment of
                Supplier's corresponding invoice.

                Buyer shall have the right to adjust the invoices issued in
                accordance with this Section 7.4 if Buyer incurs Replacement
                Costs that were not known when earlier invoices were issued.
                Adjusted invoices shall be issued within thirty (30) days of the
                date on which the additional Replacement Costs become known.
                Buyer shall provide supporting data in reasonable detail to
                support its calculations of Replacement Costs. Supplier shall
                promptly notify Buyer if Supplier in good faith disputes any
                portion of the invoice, stating in reasonable detail the reason
                for the dispute. If the Buyer's adjusted invoice results in an
                amount due from Supplier to Buyer, Buyer may offset such amount
                from its payment of Supplier's corresponding invoice.

        7.5     Annual True-Up Mechanism for Energy.
                -----------------------------------

                7.5.1   The annual true-up mechanism will provide adjustments
                        among the Parties with respect to each Contract Year in
                        the following scenarios:

                        (a)     If (i) the Price Ceiling of Energy multiplied by
                                the hourly Delivered Amount of Energy summed
                                over the Contract Year is less than or equal to
                                (ii) the Market Price of Energy for each hour
                                pursuant to Section 6.2.1 multiplied by the
                                Delivered Amount of Energy for each hour during
                                the Contract Year, Supplier shall subtract (x)
                                the amount invoiced by Supplier for Energy
                                pursuant to Section 7.3 summed of over the
                                Contract Year from (y) the Price Ceiling of
                                Energy multiplied by the hourly Delivered Amount
                                of Energy summed over the Contract Year. If the
                                difference calculated in accordance with the
                                preceding sentence is greater than or equal to
                                zero, Buyer shall pay the difference to
                                Supplier. If the difference is less than zero,
                                Supplier shall refund the difference to Buyer.

                        (b)     If (i) the Price Ceiling of Energy multiplied by
                                the hourly Delivered Amount of Energy summed
                                over the Contract Year is greater than or equal
                                to (ii) the Market Price of Energy for each hour
                                pursuant to Section 6.2.1 multiplied by the
                                Delivered Amount of Energy for each hour during
                                the Contract Year, Supplier shall subtract (x)
                                the amount invoiced by Supplier for Energy
                                pursuant to Section 7.3 summed of over the
                                Contract Year from (y) the Market Price of
                                Energy multiplied by the hourly Delivered Amount
                                of Energy summed over the Contract Year. If the
                                difference calculated in accordance with the
                                preceding sentence is greater than or equal to
                                zero, Buyer shall pay the difference to
                                Supplier. If the difference is less than zero,
                                Supplier shall refund the difference to Buyer.

                                       18
<PAGE>

                        (c)     If Buyer incurred Replacement Costs for energy
                                during the Contract year, Supplier shall
                                multiply the Total Amount of Energy Replaced
                                during the Contract Year by the Average Cost of
                                Delivered Energy after true-up as determined in
                                accordance with Section 7.5.1 (a) or 7.5.1 (b).
                                If the amount so obtained is greater than the
                                sum of the monthly Gross Replacement Costs of
                                Energy from Buyer's Invoices for the Contract
                                Year, the Adjusted Replacement Cost of Energy
                                for the Contract Year shall be zero. If the
                                amount so obtained is less than the sum of the
                                monthly Gross Replacement Costs of Energy from
                                Buyer's Invoices for the Contract Year, the
                                Adjusted Replacement Cost of Energy for the
                                Contract Year shall be the sum of the monthly
                                Gross Replacement Costs of Energy less the
                                amount obtained in accordance with the first
                                sentence of this Section 7.5.1(c).

                                If the Adjusted Replacement Cost of Energy is
                                greater than the sum of the monthly Invoiced
                                Replacement Costs of Energy from Buyer's
                                Invoices for the Contract Year, Supplier shall
                                pay the difference to Buyer. If the sum of the
                                monthly Invoiced Replacement costs of Energy is
                                greater than the Adjusted Replacement Cost of
                                Energy, Buyer shall pay the difference to
                                Seller.

                7.5.2   True-up adjustments will be calculated by Supplier
                        within twenty (20) days after each Contract Year.
                        Examples of the true-up calculations and invoice form
                        are set forth in Exhibit E. Interest shall be calculated
                        pursuant to 18 CFR Section 35.19a and shall be included
                        in the true-up invoice. Invoices for true-up adjustments
                        shall be submitted by Supplier within thirty (30) days
                        after the end of the Contract Year. Payments for such
                        invoices shall be due from Buyer thirty (30) days from
                        receipt of the true-up invoice.

        7.6     Invoice Disagreements. Should there be a good faith dispute over
                ---------------------
                any invoice, the Parties shall promptly seek resolution pursuant
                to Section 13. Pending resolution of the invoice dispute,
                payment shall be made or offsets or credits taken, as
                applicable, based upon the undisputed portion of the invoice.

        7.7     Adjustments. Upon resolution of the dispute, the prevailing
                -----------
                Party shall be entitled to receive the disputed amount, as
                finally determined to be payable along with interest (calculated
                pursuant to 18 C.F.R. (S) 35.19a through the date of payment. No
                invoice (or payment covered thereby) shall be subject to
                adjustment unless notice or request for adjustment is given
                within one (1) year of the date payment thereunder was due.

        7.8     Method of Payment. Subject to Sections 7.3, 7.6 and 7.7, Buyer
                -----------------
                shall remit all amounts due by wire or electronic fund transfer,
                pursuant to Supplier's invoice instructions, no later than
                thirty (30) days after receipt of the invoice.

                                       19
<PAGE>

        7.9     Overdue Payments. Overdue payments shall bear interest from and
                ----------------
                including, the due date to the date of payment on the unpaid
                portion calculated pursuant to 18 C.F.R.(S) 35.19a.

        7.10    Buyer Right to Offset. Buyer shall have the right to offset any
                ---------------------
                amounts Supplier owes to Buyer, including Replacement Costs
                (except for such amounts disputed in good faith by Supplier),
                against the amounts owed by Buyer to Supplier.

        7.11    Taxes. Each Party shall pay ad valorem and other taxes
                -----
                attributed to its facilities and services provided. Supplier
                shall not include any taxes of any kind in its invoices to
                Buyer. The prices of Energy and Ancillary Services shall not
                change during the term of this Agreement as a result of any
                changes in local, state or federal taxes, fees or levies.

        7.12    Late Invoices. If either Party submits an invoice outside of the
                -------------
                time deadlines set forth herein, that Party shall not forfeit
                its rights to collect the amounts due thereunder, provided that
                such invoice is no more than six (6) months late, and provided
                that changes to invoices remain subject to the deadline in
                Section 7.7.

        7.13    Termination Prior to March 1, 2003. Notwithstanding any other
                ----------------------------------
                provision herein, in the event that this Agreement is terminated
                before March 1, 2003 and as a result of such termination Buyer
                is entitled to a payment in accordance with Section 2.3.1,
                Supplier shall include an amount calculated in accordance with
                Section 2.3.1 and Exhibit J, to be paid by Supplier to Buyer in
                the next monthly invoice submitted to Buyer following such
                termination.

8.      REGULATORY APPROVALS

        8.1     This Agreement will be filed with the FERC and any other
                appropriate regulatory agencies by the appropriate Party as may
                be required.

9.      COMPLIANCE

        9.1     Each Party shall comply with all relevant Laws and shall, at its
                sole expense, maintain in full force and effect all relevant
                permits, authorizations, licenses, and other authorizations
                material to the maintenance of facilities and the performance of
                obligations under this Agreement.

        9.2     Each Party and its representatives shall comply with all
                relevant requirements of any authorized Control Area Operator,
                ISA, and/or EDU to ensure the safety of its employees and the
                public, and to ensure electric system reliability and integrity,
                material to the performance of this Agreement.

        9.3     Buyer and Supplier shall perform or cause to be performed, their
                obligations under this Agreement in all material respects in
                accordance with Good Utility

                                       20
<PAGE>

                Practices. Supplier covenants and agrees that as of the
                Effective Date it or its permitted assignee shall (a) have the
                right to control the operation of the Asset Bundle and (b) be
                willing and able to perform its obligations under this
                Agreement.

10.     INDEMNIFICATION

        10.1    To the fullest extent permitted by law, a Party to this
                Agreement ("the Indemnifying Party") shall indemnify, defend and
                hold harmless the other Party, its parent, affiliates, and
                successors and agents (each an "Indemnified Party") from and
                against any and all claims, demands, suits, obligations,
                payments, liabilities, costs, judgments, damages, losses or
                expenses asserted by third parties against an Indemnified Party
                and arising out of, relating to, or resulting from the
                Indemnifying Party's breach of, or the negligent performance of
                its obligations under this Agreement.

                10.1.1  Such indemnity shall also extend to actual courts costs,
                        attorneys' fees, expenses and other liabilities incurred
                        in the defense of any claim, action or proceeding,
                        including negotiation, settlement, defense and appeals,
                        to which this indemnification obligation applies. In
                        furtherance of the foregoing indemnification and not by
                        way of limitation thereof, the Indemnifying Party hereby
                        waives any defense it otherwise might have against the
                        Indemnified Party under applicable workers' compensation
                        laws.

                10.1.2  In claims against any Indemnified Party by an agent of
                        the Indemnifying Party, or anyone directly or indirectly
                        employed by them or anyone for whose acts they may be
                        liable, the indemnification obligation under this
                        Section 10 shall not be limited by a limitation on
                        amount or type of damages, compensation or benefits
                        payable by or for the Indemnifying Party or a
                        subcontractor under workers' or workmen's compensation
                        acts, disability benefit acts or other employee benefit
                        acts.

                10.1.3  Such indemnity shall also extend to all costs and
                        expenses incurred by the Indemnified Party in any action
                        or proceeding to enforce the provisions of this
                        Agreement, but only if and to the extent the Indemnified
                        Party prevails in such action or proceeding.

        10.2    No Negation of Existing Indemnities; Survival. Each Party's
                ---------------------------------------------
                indemnity obligations hereunder shall not be construed to
                negate, abridge or reduce other rights or obligations or
                indemnity which would otherwise exist at law or equity. The
                obligations contained herein shall survive any termination,
                cancellation, or suspension of this Agreement to the extent that
                any third party claim is commenced during the applicable statute
                of limitations period.

        10.3    Indemnification Procedures.
                --------------------------

                                       21
<PAGE>

                10.3.1  Any Party seeking indemnification under this Agreement
                        shall give the other Party notice of such claim promptly
                        but in any event on or before thirty (30) days after the
                        Party's actual knowledge of such claim or action. Such
                        notice shall describe the claim in reasonable detail,
                        and shall indicate the amount (estimated if necessary)
                        of the claim that has been, or may be sustained by, said
                        Party. To the extent that the other Party will have been
                        actually and materially prejudiced as a result of the
                        failure to provide such notice, such notice will be a
                        condition precedent to any liability of the other Party
                        under the provisions for indemnification contained in
                        this Agreement.

                10.3.2  In any action or proceeding brought against an
                        Indemnified Party by reason of any claim indemnifiable
                        hereunder, the Indemnifying Party may, at its sole
                        option, elect to assume the defense at the Indemnifying
                        Party's expense, and shall have the right to control the
                        defense thereof and to determine the settlement or
                        compromise of any such action or proceeding.
                        Notwithstanding the foregoing, an Indemnified Party
                        shall in all cases be entitled to control its defense in
                        any action if it:

                        (i)     may result in injunctions or other equitable
                                remedies in respect of the Indemnified Party
                                which would affect its business or operations in
                                any materially adverse manner;

                        (ii)    may result in material liabilities which may not
                                be fully indemnified hereunder; or

                        (iii)   may have a significant adverse impact on the
                                business or the financial condition of the
                                Indemnified Party (including a material adverse
                                effect on the tax liabilities, earnings or
                                ongoing business relationships of the
                                Indemnified Party) even if the Indemnifying
                                Party pays all indemnification amounts in full.

                10.3.3  Subject to Section 10.3.2, 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, however, said consent shall not
                        be unreasonably withheld or delayed.

                                       22
<PAGE>

11.     LIMITATION OF LIABILITY

        11.1    Responsibility for Damages: Except as otherwise provided herein
                --------------------------
                or to the extent of the other Party's negligence or willful
                misconduct, each Party shall be responsible for all physical
                damage to or destruction of the property, equipment and/or
                facilities owned by it and its affiliates and any physical
                injury or death to natural Persons resulting therefrom,
                regardless of who brings the claim and regardless of who caused
                the damage, and shall not seek recovery or reimbursement from
                the other Party for such damage; provided, that in any such case
                the Parties will exercise Due Diligence to remove the cause of
                any disability at the earliest practicable time.

        11.2    No Consequential Damages: To the fullest extent permitted by law
                ------------------------
                and notwithstanding other provisions of this Agreement, in no
                event shall a Party, or any of its Agents, be liable to the
                other Party, whether in contract, warranty, tort, negligence,
                strict liability, or otherwise, for special, indirect,
                incidental, multiple, consequential (including but not limited
                to lost profits or revenues and lost business opportunities), or
                punitive damages related to or resulting from performance or
                nonperformance of this Agreement or any activity associated with
                or arising out of this Agreement. For purposes of clarification,
                Replacement Costs shall not be considered consequential or
                incidental damages under this Section 11.2. In addition, this
                limitation on liability shall not apply with respect to claims
                pursuant to Section 10 hereof.

        11.3    Survival: The provisions of this Section 11 shall survive any
                --------
                termination, cancellation, or suspension of this Agreement.

12.     FORCE MAJEURE

        12.1    An event of "Force Majeure" shall be defined as any interruption
                or failure of service or deficiency in the quality or quantity
                of service or any other failure to perform any of its
                obligations hereunder to the extent such failure occurs without
                fault or negligence on the part of that Party and is caused by
                factors beyond that Party's reasonable control, which by the
                exercise of reasonable diligence that Party is unable to
                prevent, avoid, mitigate or overcome, including:

                (i)     acts of God or the public enemy, such as storms, flood,
                        lightning, and earthquakes,

                (ii)    failure, threat of failure, or unscheduled withdrawal of
                        facilities from operation for maintenance or repair, and
                        including unscheduled transmission and distribution
                        outages,

                (iii)   sabotage of facilities and equipment,

                (iv)    civil disturbance,

                (v)     strike or labor dispute,

                                       23
<PAGE>

                (vi)    action or inaction of a court or public authority, or

                (vii)   any other cause of similar nature beyond the reasonable
                        control of that Party.

        12.2    Economic hardship of either Party shall not constitute Force
                Majeure under this Agreement. Notwithstanding this, if Buyer
                suffers an event of Force Majeure it shall be relieved of its
                obligation to take delivery of, or otherwise pay for, Energy and
                Ancillary Services under this Agreement for the duration of the
                event of Force Majeure. In addition, if Buyer is unable to have
                Energy and Ancillary Services delivered from the Point(s) of
                Delivery to its service territory due to an outage on the
                Transmission System, that shall be considered a Force Majeure
                event and shall relieve Buyer of performance for the extent of
                the event.

        12.3    In the event of a Force Majeure, neither Party shall be
                considered in default under this Agreement or responsible to the
                other Party in tort, strict liability, contract or other legal
                theory for damages of any description, and affected performance
                obligations shall be extended by a period equal to the term of
                the resultant delay, but in no event shall exceed the term of
                the Agreement, provided that the Party relying on a claim of
                Force Majeure:

                (i)     provides prompt written notice of such Force Majeure
                        event to the other Party, giving an estimate of its
                        expected duration and the probable impact on the
                        performance of its obligations hereunder;

                (ii)    exercises all reasonable efforts to continue to perform
                        its obligations under this Agreement;

                (iii)   expeditiously takes action to correct or cure the event
                        or condition excusing performance so that the suspension
                        of performance is no greater in scope and no longer in
                        duration than is dictated by the problem; provided,
                        however, that settlement of strikes or other labor
                        disputes will be completely within the sole discretion
                        of the Party affected by such strike or labor dispute;

                (iv)    exercises all reasonable efforts to mitigate or limit
                        damages to the other Party; and

                (v)     provides prompt notice to the other Party of the
                        cessation of the event or condition giving rise to its
                        excuse from performance.

        12.4    Notwithstanding the above provisions, a Force Majeure event
                shall excuse Supplier from its obligation to deliver the Supply
                Amount pursuant to Section 4 of this Agreement only for the
                first twenty-four (24) hours of the Force Majeure event;
                provided that the total amount of energy excused in accordance
                with this Section 12.4 during any Contract Year shall not exceed
                the Limit on Excused Energy set forth in Exhibit A. After such
                twenty-four (24) hour period, Supplier

                                       24
<PAGE>

                must either deliver the Supply Amount at the Point(s) of
                Delivery or pay liquidated damages pursuant to Section 4.2 of
                this Agreement. Provided further, to the extent a Force Majeure
                event is caused by an outage on the Transmission System,
                Supplier shall be excused from its obligations to deliver the
                Supply Amount for the duration of the outage.

        12.5    If Supplier has notified Buyer of an event of Force Majeure, and
                if Supplier so requests, Buyer will attempt to replace the
                Supply Amount that is not excused in accordance with Section
                12.4 with Energy or Ancillary Services from another Asset
                Bundle. However, Buyer's inability to acquire such replacement
                Energy or Ancillary Services shall not excuse Supplier from
                Supplier's obligation to deliver the Supply Amount not otherwise
                excused in accordance with Section 12.4

13.     DISPUTES

        13.1    Any action, claim or dispute which either Party may have against
                the other arising out of or relating to this Agreement or the
                transactions contemplated hereunder, or the breach, termination
                or validity thereof (any such claim or dispute, a "Dispute")
                shall be submitted in writing to the other Party. The written
                submission of any Dispute shall include a concise statement of
                the question or issue in dispute together with a statement
                listing the relevant facts and documentation that support the
                claim.

        13.2    The Parties agree to cooperate in good faith to expedite the
                resolution of any Dispute. Pending resolution of a Dispute, the
                Parties shall proceed diligently with the performance of their
                obligations under this Agreement.

        13.3    The Parties shall first attempt in good faith to resolve any
                Dispute through informal negotiations by the Contract
                Representatives. In the event that the Contract Representatives
                are unable to satisfactorily resolve the Dispute within thirty
                (30) days from the receipt of notice of the Dispute, either
                Party may by written notice to the other Party refer the Dispute
                to its respective senior management for resolution as promptly
                as practicable. If the Parties' senior management are unable to
                resolve the Dispute within forty-five (45) days from the date of
                such referral, thereafter the Parties may agree in writing to
                extend the time period of such senior management negotiations.
                In the event the Parties' senior management do not resolve the
                dispute within the prescribed or extended time period, either
                Party may initiate arbitration through the serving and filing of
                a demand for arbitration and the Parties expressly agree that
                arbitration in accordance with this Section 13 shall be the
                exclusive means to further resolve any Dispute and hereby
                irrevocably waive their right to a jury trial with respect to
                any Dispute, provided that at any time:

                13.3.1  A request made by a Party for provisional remedies
                        requesting preservation of the Parties' respective
                        rights and obligations under the Agreement may be
                        resolved by a court of law located in the County of the
                        principal place of business of Buyer.

                                       25
<PAGE>

                13.3.2  Nothing in this Agreement shall preclude, or be
                        construed to preclude, any Party from filing a petition
                        or complaint with the FERC or PUCN with respect to any
                        arbitrable Dispute over which said agency has
                        jurisdiction. In such case, the other Party may request
                        the FERC or PUCN, as applicable, to reject or to waive
                        jurisdiction. If jurisdiction is rejected or waived with
                        respect to all or a portion of the Dispute, the portion
                        of the Dispute not so accepted by the FERC or PUCN, as
                        applicable, shall be resolved through arbitration in
                        accordance with this Agreement. To the extent that the
                        FERC or PUCN, as applicable, asserts or accepts
                        jurisdiction over the Dispute, the decision, finding of
                        fact or order of FERC shall be final and binding,
                        subject to judicial review under the Federal Power Act
                        or Nevada Revised Statutes and subject to the provisions
                        of Section 2.2.2. Any arbitration proceedings that may
                        have commenced with respect to the Dispute prior to the
                        assertion or acceptance of jurisdiction by the FERC or
                        PUCN, as applicable, shall be terminated to the extent
                        the FERC or PUCN accepts or asserts jurisdiction over
                        such Dispute.

        13.4    Unless otherwise agreed by the Parties, any arbitration
                initiated under this Agreement shall be conducted in accordance
                with the following:

                13.4.1  Arbitrations shall be held within the County of the
                        principal place of business of Buyer.

                13.4.2  Except as otherwise modified herein, the arbitration
                        shall be conducted in accordance with the "Commercial
                        Arbitration Rules" of the American Arbitration
                        Association ("AAA") then in effect.

                13.4.3  Arbitration shall be conducted by one neutral arbitrator
                        who shall be selected pursuant to the AAA rules and the
                        following:

                        13.4.3.1  The Parties agree that the list of potential
                           arbitrators provided by the AAA shall, if available,
                           contain twenty (20) candidates, and at least fifty
                           percent (50%) of the candidates shall be members of
                           the AAA National Energy Panel.

                        13.4.3.2  The Parties also agree that each shall be
                           allowed to strike the names of five candidates before
                           ranking the remaining candidates and returning the
                           list to the AAA in accordance with the Commercial
                           Arbitration Rules. If the Parties are unable to agree
                           on an arbitrator, such arbitrator shall be appointed
                           by the AAA.

                        13.4.3.3  The arbitrator shall not have any current or
                           past substantial business, financial, or personal
                           relationships with either Party (or their Affiliates)
                           and shall not be a vendor, supplier, customer,
                           employee, consultant, or competitor to either of the
                           Parties or their Affiliates.

                                       26
<PAGE>

                    13.4.3.4  The arbitrator shall be authorized only to
                         interpret and apply the provisions of this Agreement or
                         any related agreements entered into under this
                         Agreement and shall have no power to modify or change
                         any provision of this Agreement. The arbitrator shall
                         have no authority to award punitive or multiple damages
                         or any damages inconsistent with this Agreement. The
                         arbitrator shall within thirty (30) days of the
                         conclusion of the hearing, unless such time is extended
                         by agreement of the Parties, notify the Parties in
                         writing of his or her decision, stating his or her
                         reasons for such decision and separately listing his or
                         her findings of fact and conclusions of law. Judgment
                         on the award may be entered in any court having
                         jurisdiction.

        13.5    The Parties shall proceed with the arbitration expeditiously,
                and the arbitration shall be concluded within five (5) months of
                the filing of the demand for arbitration pursuant to this
                Section 13 in order that the decision may be rendered within six
                (6) months of such filing, unless the arbitrator extends such
                time at the request of a Party upon a showing of good cause or
                upon agreement of the Parties.

        13.6    Any arbitration proceedings, decision or award rendered
                hereunder and the validity, effect and interpretation of any
                arbitration agreement shall be governed by the Federal
                Arbitration Act of the United States, 9 U.S.C. (S)(S) 1 et seq.

        13.7    The decision of the arbitrator shall be final and binding on
                both Parties and may be enforced in any court having
                jurisdiction over the Party against which enforcement is sought.

        13.8    The fees and expenses of the arbitrator shall be shared by the
                Parties equally, unless the decision of the arbitrator shall
                specify some other apportionment of such fees and expenses. All
                other expenses and costs of the arbitration shall be borne by
                the Party incurring the same.

14.     NATURE OF OBLIGATIONS

        14.1    Except where specifically stated in this Agreement to be
                otherwise, the duties, obligations, and liabilities of the
                Parties shall be several; not joint or collective. The
                provisions of this Agreement shall not be construed to create an
                association, trust, partnership, or joint venture; to impose a
                trust or partnership duty, obligation, or liability or agency
                relationship on or with regard to either Party.

        14.2    Nothing in this Agreement nor any action taken hereunder shall
                be construed to create any duty, liability, or standard of care
                to any person not a Party to this Agreement. Each Party shall be
                individually and severally liable for its own obligations under
                this Agreement.

        14.3    By this Agreement, neither Party dedicates any part of its
                facilities or the service provided under this Agreement to the
                public.

                                       27
<PAGE>

15.     SUCCESSORS AND ASSIGNS

        15.1    This Agreement may be assigned, without express written consent
                of the other Party, as follows:

                15.1.1  Buyer may assign this Agreement or assign or delegate
                        its rights and obligations under this Agreement, in
                        whole or in part, if such assignment is made to an
                        affiliate, parent, subsidiary, successor or any party,
                        provided that such assignee operates all or a portion of
                        the PLR or if such assignment is required by Law or
                        applicable regulations.

                15.1.2  Supplier also may assign this Agreement as provided in
                        Section 11.5 of the Asset Sale Agreement; provided that
                        such assignment is to an entity that (a) has the right
                        to control the operation of the Asset Bundle and (b) is
                        willing and able to perform its obligations under this
                        Agreement.

        15.2    Supplier may, without the consent of Buyer, assign, transfer,
                pledge or otherwise dispose of its rights and interests
                hereunder to a trustee, lending institution, or any Person for
                the purposes of financing or refinancing the Asset Bundle,
                including upon or pursuant to the exercise of remedies under
                such financing or refinancing, or by way of assignments,
                transfers, conveyances of dispositions in lieu thereof;
                provided, however, that no such assignment or disposition shall
                relieve or in any way discharge Supplier or such permitted
                assignee from the performance of its duties and obligations
                under this Agreement. Buyer agrees to execute and deliver such
                documents as may be reasonably necessary to accomplish any such
                assignment, transfer, conveyance, pledge or disposition of
                rights hereunder for purposes of the financing or refinancing of
                the Asset Bundle, so long as Buyer's rights under this Agreement
                are not thereby materially altered, amended, diminished or
                otherwise impaired.

        15.3    Either Party may, without the consent of the other Party, assign
                this Agreement to a successor to all or substantially all of the
                assets of such Party by way of merger, consolidation, sale or
                otherwise, provided such successor assumes and becomes liable
                for all of such Party's duties and obligations hereunder
                including Section 3 hereof.

        15.4    Except as stated above, neither this Agreement nor any of the
                rights, interests, or obligations hereunder shall be assigned by
                either Party, including by operation of law, without the prior
                written consent of the other Party, said consent not to be
                unreasonably withheld. Any assignment of this Agreement in
                violation of the foregoing shall be, at the option of the
                non-assigning Party, void.

        15.5    Except as set forth above, no assignment or transfer of rights
                or obligations under this Agreement by a Party shall relieve
                said Party from full liability and financial responsibility for
                the performance thereof after any such transfer or assignment
                unless and until the transferee or assignee shall agree in
                writing to assume the obligations and duties of said Party under
                this Agreement and the other Party has

                                       28
<PAGE>

                consented in writing to such assumption; said consent not to be
                unreasonably withheld.

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

16.     REPRESENTATIONS

        16.1    Representations of the Parties. The Parties represent and
                ------------------------------
                warrant each to the other as follows:

                16.1.1  Incorporation. Buyer is a corporation duly incorporated,
                        -------------
                        validly existing and in good standing under the laws of
                        the State of Nevada. Supplier is a limited liability
                        company duly organized, validly existing and in good
                        standing under the laws of the State of Delaware. Both
                        Buyer and Supplier have all requisite corporate power
                        and authority to own, lease and operate their material
                        assets and properties and to carry on their business as
                        now being conducted.

                16.1.2  Authority. The Party has full corporate power and
                        ---------
                        authority to execute and deliver this Agreement and,
                        subject to the procurement of applicable regulatory
                        approvals, to carry out the actions required of it by
                        this Agreement. The execution and delivery of this
                        Agreement and the transactions contemplated hereby have
                        been duly and validly authorized by all necessary
                        corporate action required on the part of the Party. The
                        Agreement has been duly and validly executed and
                        delivered by the Party and, assuming that it is duly and
                        validly executed and delivered by the other Party,
                        constitutes a legal, valid and binding agreement of the
                        Party.

                16.1.3  Compliance With Law. The Party represents and warrants
                        -------------------
                        that it is not in violation of any applicable Law, or
                        applicable regulation, which violation could reasonably
                        be expected to materially adversely affect the other
                        Party's performance of its obligations under this
                        Agreement. The Party represents and warrants that it
                        will comply with all Laws, and regulations applicable to
                        its compliance with this Agreement, non-compliance with
                        which would reasonably be expected to materially
                        adversely affect either Party's performance of its
                        obligations under this Agreement.

                16.1.4  Representations of Both Parties. The representations in
                        -------------------------------
                        this Section 16 shall continue in full force and effect
                        for the term of this Agreement.

17.     DEFAULT AND REMEDIES

        17.1    An Event of Default hereunder shall be deemed to have occurred
                upon a Party's (Defaulting Party) failure to comply with any
                material obligation imposed upon it by this Agreement. Examples
                of an Event of Default include, but are not limited

                                       29
<PAGE>

                to the following:

                (i)     Failure to make any payments due under this Agreement;

                (ii)    Failure to deliver the Supply Amount for a period of
                        five (5) consecutive days;

                (iii)   Failure to follow the directions of a Control Area
                        Operator, ISA, EDU, WSCC, NERC, PUCN, FERC, or any
                        successor thereto where following such directions is
                        required hereunder;

                (iv)    Supplier not being in compliance with Section 3; and

                (v)     Failure of the Guarantor to be in compliance with the
                        terms of the Guarantee delivered under Section 3.1.2.

        17.2    An Event of Default shall be excused:

                17.2.1  In the event such Event of Default was caused by Force
                        Majeure provided that the Party claiming a Force Majeure
                        complies with the requirements of Section 12; and

                17.2.2  In the event such Event of Default was caused by
                        transmission and distribution outages or disruptions.

        17.3    Unless excused, in an Event of Default the Non-Defaulting Party
                shall be entitled to provide written notice (or verbal notice in
                case of emergency followed by written notice) of the Event of
                Default to the Defaulting Party and to specify a cure period,
                which cure period shall be a minimum of thirty (30) days.

        17.4    If an Event of Default is not cured by the Defaulting Party
                during the cure period specified by the Non-Defaulting Party,
                the Non-Defaulting Party shall be entitled to those remedies
                which are not inconsistent with the terms of this Agreement,
                including termination and the payment of liquidated damages. A
                Defaulting Party shall not be liable to the Non-Defaulting Party
                for any punitive, consequential or incidental damages. For
                purposes of clarification, Replacement Costs shall not be
                considered consequential or incidental damages under this
                Section 17.4.

        17.5    Notwithstanding this Section 17, liquidated damages shall be
                paid to Buyer pursuant to Sections 4.2, 12, 18, and 21.

18.     FACILITY ADDITIONS AND MODIFICATIONS

        18.1    Supplier shall be entitled to make additions and modifications
                to the Asset Bundle subject to the following:

                18.1.1  To the extent additions and modifications interfere with
                        the operation of the Asset Bundle in providing the
                        Supply Amount to Buyer beyond the limits for planned
                        outages set forth in Section 21, liquidated

                                       30
<PAGE>

                        damages shall be paid to Buyer pursuant to Section 4.2.

                18.1.2  Supplier shall use reasonable efforts to minimize any
                        adverse impact on Buyer during the course of making such
                        additions and modifications.

                18.1.3  Such additions and modifications shall be conducted in
                        accordance with Good Utility Practice, and all
                        applicable Laws, regulations, reliability criteria and
                        the Interconnection Agreement between Buyer and
                        Supplier, dated November 16, 2000, as it may be amended
                        from time to time.

        18.2    Supplier shall seek Buyer's prior written approval for all
                Supplier's additions or modifications to the Asset Bundle which
                might reasonably be expected to have an adverse effect upon
                Buyer with respect to operations or performance under this
                Agreement.

19.     COORDINATION

        19.1    Upon knowledge thereof, each Party shall promptly give notice to
                the other Party of any labor dispute which is delaying or
                threatens to delay the timely performance of this Agreement,
                which shall include a description of the general nature of the
                dispute.

20.     EMERGENCY AND NONEMERGENCY CONDITION RESPONSE

        20.1    Buyer and Supplier shall comply with any applicable requirement
                of any Governmental Authority, NERC, WSCC, ISA, Control Area
                Operator, transmission operator, EDU or any successor of any of
                them, regarding the reduced or increased generation of the Asset
                Bundle in the event of an Emergency Condition or Nonemergency
                Condition.

        20.2    Supplier shall not be obligated to deliver the Supply Amount and
                no liquidated damages shall become due, if the Supply Amount is
                reduced in the event of an Emergency Condition or a Nonemergency
                Condition.

        20.3    Each Party shall provide prompt verbal notice to the other Party
                of any Emergency Condition or Nonemergency Condition.

        20.4    Either Party may take reasonable and necessary action to
                prevent, avoid or mitigate injury, danger, damage or loss to its
                own equipment and facilities, or to expedite restoration of
                service; provided, however, that the Party taking such action
                shall give the other Party prior notice if at all possible
                before taking any action. However, this Section 20.4 shall not
                be construed to supersede Sections 20.2 and 20.3.

21.     OUTAGE SCHEDULING

        21.1    Supplier shall request Buyer's approval prior to any
                inspections, proposed

                                       31
<PAGE>

                planned outages or other non-forced outages (all hereinafter
                referred to as "planned outages") of the Asset Bundle so as to
                minimize the impact on the availability of the Asset Bundle.
                Under no circumstances shall Supplier conduct a planned outage
                without the express prior consent of Buyer pursuant to this
                Section 21.

        21.2    Planned Outages.
                ---------------

                21.2.1  Within sixty (60) days following the Effective Date of
                        this Agreement and on or before October 1 of each
                        Contract Year, Supplier shall provide Buyer with a
                        schedule of proposed planned outages for the period
                        beginning on the date of such proposed schedule for the
                        following twelve (12) months. The proposed planned
                        outage schedule will designate days for each unit in
                        which the Asset Bundle Capacity will be reduced in part
                        or total for each such unit. Each proposed schedule
                        shall include all applicable information, including but
                        not limited to the following: Month, day and time of
                        requested outage; facilities impacted (such as Unit and
                        description); duration of outage; purpose of outage;
                        amount of capacity (in MWs) which is derated; other
                        conditions and remarks; and name of contact and phone
                        number.

                21.2.2  Buyer shall promptly review Supplier's proposed schedule
                        and shall either require modifications or approve the
                        proposed schedule. Supplier shall use its best efforts
                        to accomplish all planned outages in accordance with the
                        approved schedule. Supplier shall be responsible to
                        Buyer for Replacement Costs (i) if any outage period
                        exceeds its approved schedule, provided that changes to
                        the approved schedule may be requested by either Party
                        and each Party shall make reasonable efforts to
                        accommodate such changes, provided further the Buyer
                        shall have no obligation to agree to Supplier's
                        revisions to the approved planned outage schedule; and
                        (ii) if Supplier conducts a planned outage without the
                        consent of Buyer as provided herein.

        21.3    Control Installation Outages
                ----------------------------

                21.3.1  Supplier also may schedule such unit outages (each, a
                        "Control Installation Outage") as required to install at
                        the Asset Bundle new or retrofit emission control
                        equipment to the existing Asset Bundle necessary to
                        continue operating the Asset Bundle without sanctions or
                        operating restrictions threatened or imposed by a
                        Governmental Authority. Supplier shall make diligent
                        efforts to include any Control Installation Outage
                        within the proposed planned outage schedule pursuant to
                        Section 21.2.1; provided that, if Supplier is required
                        by such Governmental Authority having jurisdiction over
                        the matter to perform a Control Installation Outage
                        within a specific timeframe and, therefore, Supplier
                        cannot comply with the provisions of the preceding
                        sentence, Supplier at a minimum will provide the
                        following notice:

                                       32
<PAGE>

                        i)      Three (3) weeks for each Control Installation
                                Outage with an expected duration of less than
                                one (1) day;

                        ii)     Five (5) weeks for each Control Installation
                                Outage with an expected duration between one (1)
                                and five (5) days; and,

                        iii)    Fifteen (15) weeks for each Control Installation
                                Outage with an expected duration of longer than
                                five (5) days.

                        Moreover, if Supplier is required to perform a Control
                        Installation Outage within a specific timeframe, Buyer,
                        after consultation with Supplier and in accordance with
                        Good Utility Practice, at its sole discretion may
                        designate the period within such timeframe in which a
                        Control Installation Outage may occur.

                21.3.2  Supplier also shall: (i) coordinate and cooperate with
                        Buyer regarding the scheduling of each proposed Control
                        Installation Outage in order to minimize the economic
                        effect on Buyer resulting from such Control Installation
                        Outage; (ii) advise Buyer of its meetings and
                        communications with the Governmental Authority having
                        jurisdiction over the matter and, in its discretion,
                        will invite Buyer to participate in such meetings and
                        communications; and, (iii) take commercially reasonable
                        steps to seek review of any decision of such
                        Governmental Authority requiring a Control Installation
                        Outage during the months of June through September.

22.     REPORTS

        22.1    Supplier shall promptly provide Buyer with copies of any orders,
                decrees, letters or other written communications to or from any
                Governmental Authority asserting or indicating that Supplier
                and/or its Asset Bundle is in violation of Laws which relate to
                Supplier, or operations or maintenance of the Asset Bundle and
                which may have an adverse effect on Buyer. Supplier shall use
                reasonable efforts to keep Buyer appraised of the status of any
                such matters.

23.     COMMUNICATIONS

        23.1    Supplier's Operating Representatives shall be available
                twenty-four (24) hours per day for communications with the
                Control Area Operator and/or the ISA and Buyer to facilitate the
                operations contained in this Agreement.

        23.2    Supplier shall, at its expense, maintain and install real-time
                communications equipment at the Asset Bundle to maintain
                communications between personnel on site at the Asset Bundle,
                Buyer and the Control Area Operator at all times. Supplier shall
                provide at its expense:

                (i)     Ringdown voice telephone lines, and

                (ii)    Equipment to transmit to and receive telecopies from
                        Buyer and the Control Area Operator.

                                       33
<PAGE>

        23.3    Supplier shall immediately report to Buyer any "Abnormal
                Condition" that has or may occur, and provide all pertinent
                information, including but not limited to the following:

                (i)     A description of the "Abnormal Condition" and the
                        actions to be taken to alleviate the "Abnormal
                        Condition";

                (ii)    The expected duration including the beginning and ending
                        time of the "Abnormal Condition"; and

                (iii)   The amount of any adjustment to the current (real time)
                        level of Energy and Ancillary Services.

        23.4    Cause of the Condition.
                -----------------------

                23.4.1  An "Abnormal Condition" shall include without limitation
                        any conditions that, to Supplier's knowledge, have or
                        are reasonably likely to:

                        (i)     Adversely affect Supplier's ability to provide
                                Energy and Ancillary Services to Buyer;

                        (ii)    Cause an unplanned reduction in the amount of
                                delivery of Energy and Ancillary Services to
                                Buyer; or

                        (iii)   Cause an unplanned isolation of the Asset Bundle
                                from the transmission system.

        23.5    Supplier shall immediately notify Buyer after such "Abnormal
                Condition" has been alleviated.

24.     NOTICES

        24.1    All notices hereunder shall, unless specified otherwise, be in
                writing and shall be addressed, except as otherwise stated
                herein, to the Parties as set forth in Exhibit F.

        24.2    All written notices or submittals required by this Agreement
                shall be sent either by hand-delivery, regular first class U.S.
                mail, registered or certified U.S. mail postage paid return
                receipt requested, overnight courier delivery, electronic mail
                or facsimile transmission and will be effective and deemed to
                have been received on the date of receipt personally, on the
                date and time as documented by method of delivery if during
                normal business hours or on the next succeeding Business Day, or
                on the third (3/rd/) Business Day following deposit with the
                U.S. mail if sent regular first class U.S. mail.

                                       34
<PAGE>

        24.3    Notices of an Event of Default pursuant to Section 17 and or
                Force Majeure pursuant to Section 12 may not be sent by regular
                first class U.S. mail.

        24.4    Any payments required to be made under this Agreement shall be
                made to the Party as set forth in Exhibit F.

        24.5    Each Party shall have the right to change, at any time upon
                written notice to the other Party, the name, address and
                telephone numbers of its representatives under this Agreement
                for purposes of notices and payments.

25.     MERGER

        25.1    The Agreement contains the entire agreement and understanding
                between the Parties with respect to all of the subject matter
                contained herein, thereby merging and superseding all prior
                agreements and representations by the Parties with respect to
                such subject matter.

        25.2    In the event of any conflict between this Agreement and the
                Asset Sale Agreement, the terms of the Asset Sale Agreement
                shall govern.

26.     HEADINGS

        26.1    The headings or section titles contained in this Agreement are
                inserted solely for convenience and do not constitute a part of
                this Agreement between the Parties, nor should they be used to
                aid in any manner in the construction of this Agreement.

27.     COUNTERPARTS AND INTERPRETATION

        27.1    This Agreement may be executed in any number of counterparts,
                each of which shall be deemed an original.

        27.2    In the event an ambiguity or question of intent or
                interpretation arises, this Agreement shall be construed as if
                drafted jointly by the Parties and 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.

        27.3    Any reference to any federal, state, local, or foreign statute
                or law shall be deemed also to refer to all rules and
                regulations promulgated thereunder, unless the context requires
                otherwise.

        27.4    The word "including" in this Agreement shall mean "including
                without limitation".

28.     SEVERABILITY

        28.1    If any term, provision or condition of this Agreement is held to
                be invalid, void or unenforceable by a court or Governmental
                Authority of competent jurisdiction

                                       35
<PAGE>

                and such holding is subject to no further appeal or judicial
                review, then such invalid, void, or unenforceable term,
                provision or condition shall be deemed severed from this
                Agreement and all remaining terms, provisions and conditions of
                this Agreement shall continue in full force and effect, unless,
                however, the effect of the severance would vitiate the intent of
                the Parties hereto, as determined by either Party in its
                reasonable discretion.

        28.2    The Parties shall endeavor in good faith to replace such
                invalid, void, or unenforceable provisions with a valid and
                enforceable provision which achieves the purposes intended by
                the Parties to the greatest extent permitted by law.

29.     WAIVERS

        29.1    No failure or delay on the part of a Party in exercising any of
                its rights under this Agreement or in insisting upon strict
                performance of provisions of this Agreement, no partial exercise
                by either Party of any of its rights under this Agreement, and
                no course of dealing between the Parties shall constitute a
                waiver of the rights of either Party under this Agreement. Any
                waiver shall be effective only by a written instrument signed by
                the Party granting such waiver, and such shall not operate as a
                waiver of, or estoppel with respect to, any subsequent failure
                to comply therewith.

30.     AMENDMENTS

        30.1    The Parties shall negotiate in good faith to determine necessary
                amendments, if any, to this Agreement, provided that in
                negotiating such amendments the Parties shall attempt, in good
                faith, to reasonably preserve the bargain initially struck in
                this Agreement if any Governmental Authority, FERC, any state or
                the PUCN, implements a change in any Law or applicable
                regulation that materially affects or is reasonably expected to
                materially affect Buyer's PLR service under this Agreement.

        30.2    The Parties shall meet to discuss the impact of any changes in
                Buyer's OATT or the ISA's OATT, as applicable, or any rule or
                practice of NERC, WSCC, or any other Governmental Authority on
                the terms of this Agreement upon request by either Party during
                the term of this Agreement.

        30.3    In the event that it is deemed necessary to amend this
                Agreement, the Parties will attempt to agree upon such amendment
                and will submit such mutually agreed upon amendment(s) to the
                FERC for filing and acceptance.

        30.4    Amendments to this Agreement shall be in writing and shall be
                executed by an authorized representative of each Party.

31.     TIME IS OF THE ESSENCE

        31.1    Time is of the essence of this Agreement and in the performance
                of all of the covenants and conditions hereof.

                                       36
<PAGE>

32.     APPROVALS

        32.1    Each Party's performance under this Agreement is subject to the
                condition that all requisite governmental and regulatory
                approvals for such performance are obtained in form and
                substance satisfactory to the other Party in its reasonable
                discretion. Each Party shall use best efforts to obtain all
                required approvals and shall exercise due diligence and shall
                act in good faith to cooperate and assist each other in
                acquiring any regulatory approval necessary to effectuate this
                Agreement. Further, the Parties agree to reasonably support the
                other Party in any associated regulatory proceedings, including
                by being a witness on behalf of the other Party.

        32.2    Notwithstanding the provisions of Section 2.2.2 of this
                Agreement, if any Governmental Authority in its review of the
                Agreement places conditions on or requires revisions of the
                Agreement that have no more than a de minimus effect on Supplier
                or Buyer, the Parties agree to execute an amendment to this
                Agreement reasonably acceptable to each Party incorporating such
                conditions or revisions.

        32.3    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.

        32.4    The Parties hereto agree to execute and deliver promptly, at the
                expense of the Party requesting such action, any and all other
                and further instruments, documents and information which may
                reasonably be necessary or appropriate to give full force and
                effect to the terms and intent of this Agreement.

33.     PLR SERVICE

        33.1    The Agreement is premised on Buyer providing PLR service.
                Notwithstanding anything to the contrary contained herein, if
                Nevada retail electricity restructuring (including
                implementation of retail customer choice of electricity
                suppliers) is delayed beyond the Effective Date of this
                Agreement, the Parties shall continue to perform this Agreement
                in all respects pursuant to the terms and conditions hereof as
                if Buyer was the PLR and Buyer's retail and wholesale customers
                shall be considered as the TRR.

34.     CONFIDENTIALITY

        34.1    Confidential Information. Certain information provided by a
                ------------------------
                Party (the "Disclosing Party") to the other Party (the
                "Receiving Party") in connection with the negotiation or
                performance of this Agreement may be considered confidential
                and/or proprietary (hereinafter referred to as "Confidential
                Information") by the Disclosing Party. To be considered
                Confidential Information hereunder, such information must be
                clearly labeled or designated by the Disclosing Party as
                "confidential" or "proprietary" or with words of like meaning.
                If disclosed orally, such information shall be clearly
                identified as confidential and such status shall be

                                       37
<PAGE>

                confirmed promptly thereafter in writing.

        34.2    Treatment of Confidential Information. The Receiving Party shall
                -------------------------------------
                treat any Confidential Information with at least the same degree
                of care regarding its secrecy and confidentiality as the
                Receiving Party's similar information is treated within the
                Receiving Party's organization. The Receiving Party shall not
                disclose the Confidential Information of the Disclosing Party to
                third parties (except as stated hereinafter) nor use it for any
                purpose other than the negotiation or performance of this
                Agreement, without the express prior written consent of the
                Disclosing Party. The Receiving Party further agrees that it
                shall restrict disclosure of Confidential Information as
                follows:

                34.2.1  Disclosure shall be restricted solely to its agents as
                        may be necessary to enforce the terms of this Agreement
                        after advising those agents of their obligations under
                        this Section 34.2.

                34.2.2  In the event that the Receiving Party is requested,
                        pursuant to or as required by applicable Law or by legal
                        process, to disclose any Confidential Information, the
                        Receiving Party shall provide the Disclosing Party with
                        prompt notice of such request or requirement in order to
                        enable Disclosing Party to seek an appropriate
                        protective order or other remedy and to consult with
                        Disclosing Party with respect to Disclosing Party taking
                        steps to resist or narrow the scope of such request or
                        legal process. The Receiving Party agrees not to oppose
                        any action by the Disclosing Party to obtain a
                        protective order or other appropriate remedy. In the
                        absence of such protective order, and provided that the
                        Receiving Party is advised by its counsel that it is
                        compelled to disclose the Confidential Information, the
                        Receiving Party shall:

                        (i)     furnish only that portion of the Confidential
                                Information which the Receiving Party is advised
                                by counsel is legally required; and

                        (ii)    use its commercially reasonable best efforts, at
                                the expense of the Disclosing Party, to ensure
                                that all Confidential Information so disclosed
                                will be accorded confidential treatment.

        34.3    Excluded Information. Confidential Information shall not be
                --------------------
                deemed to include the following:

                34.3.1  information which is or becomes generally available to
                        the public other than as a result of a disclosure by the
                        Receiving Party;

                34.3.2  information which was available to the Receiving Party
                        on a non-confidential basis prior to its disclosures by
                        the Disclosing Party; and

                34.3.3  information which becomes available to the Receiving
                        Party on a non-confidential basis from a person other
                        than the Disclosing Party or its

                                       38
<PAGE>

                        representative who is not otherwise bound by a
                        confidentiality agreement with Disclosing Party or its
                        agent or is otherwise not under any obligation to
                        Disclosing party or its agent not to disclose the
                        information to the Receiving Party.

        34.4    Injunctive Relief Due to Breach. The Parties agree that remedies
                -------------------------------
                at law may be inadequate to protect each other in the event of a
                breach of this Section 34, and the Receiving Party hereby in
                advance agrees that the Disclosing Party shall be entitled to
                seek and obtain, without proof of actual damages, temporary,
                preliminary and permanent injunctive relief from any court or
                Governmental Authority of competent jurisdiction restraining the
                Receiving Party from committing or continuing any breach of this
                Section 34.

35.     CHOICE OF LAW

        35.1    This Agreement and the rights and obligations of the Parties
                shall be construed and governed by the Laws of: (i) the State of
                Nevada as if executed and performed wholly within that state;
                and (ii) the Federal Power Act, to the extent the rights and
                obligations of the Parties are covered by such act.

IN WITNESS WHEREOF, the Parties hereto have caused this Transitional Power
Purchase Agreement for the Clark Asset Bundle to be executed by their duly
authorized representative on the date set forth below.

NEVADA POWER COMPANY                            CLARK POWER LLC

--------------------------                      --------------------------
By:     William E. Peterson                     By:    Edward P. Hermann
Title:  Senior Vice President,                  Title: Vice President
General Counsel, and Corporate Secretary
Date:   November 16, 2000                       Date:  November 16, 2000

                                       39
<PAGE>

                                   EXHIBIT A
                                 CLARK BUNDLE
                ASSET BUNDLE CAPACITY AND OPERATING PARAMETERS

<TABLE>
<CAPTION>
                   NET SUMMER    NET WINTER                 MINIMUM HOURLY
                   CAPABILITY    CAPABILITY    RAMP RATE      ENERGY TAKE
      UNIT           (MW)          (MW)         (MW/hr)          (MWh)
-----------------------------------------------------------------------------
     <S>           <C>           <C>           <C>          <C>
     Unit 1           42             42            42

     Unit 2           66             69            69

     Unit 3           67             70            70

     Unit 4           50             59            59

     Unit 5           73             81            81

     Unit 6           73             81            81

     Unit 7           73             81            81

     Unit 8           73             81            81

     Unit 9           85             88            88

    Unit 10           85             88            88
-----------------------------------------------------------------------------
Total                687            740           740             n/a
=============================================================================
</TABLE>

Minimum Annual Energy Take:                             2,700,000 Mwh
Limit on Excused Energy:*                 Annual:          40,000 MWh
                               +   Winter Months:           2,500 MWh per month

*The 40,000 MWh Limit on Excused Energy is an annual amount, to be prorated in
any Contract Year that is less than a twelve month period, that can be called on
in any month(s). The additional Limit on Excused Energy for Winter months is in
excess of the annual amount for the particular month and is not carried forward
if not otherwise used during the month. For example, in the month of April,
Supplier will have a Limit on Excused Energy of 2,500 MWh plus the unused amount
of the 40,000 MWh annual Limit on Excused Energy.

For purposes of this Exhibit A, the summer months shall consist of the months of
June through September. The winter months shall consist of the months of January
through May and the months of October through December.

                                      A-1
<PAGE>

                                   EXHIBIT B
                                 CLARK BUNDLE
                      ENERGY AND ANCILLARY SERVICE PRICES

       Energy Prices*
       -------------

                 Price Floor of Energy:       $22.77 per MWh
                 Price Ceiling of Energy:     $42.65 per MWh

       Ancillary Service Prices*
       ------------------------

            Regulation and Frequency Response:
                 Summer On-Peak:              $25.75 per MW-reserved per hour
                 Summer Off-Peak:             $14.71 per MW-reserved per hour
                 Winter On-Peak:              $13.59 per MW-reserved per hour
                 Winter Off-Peak:             $ 7.77 per MW-reserved per hour

            Operating Reserve- Spinning Reserve:
                 Summer On-Peak:              $23.45 per MW-reserved per hour
                 Summer Off-Peak:             $13.40 per MW-reserved per hour
                 Winter On-Peak:              $12.52 per MW-reserved per hour
                 Winter Off-Peak:             $ 7.16 per MW-reserved per hour

            Operating Reserve- Supplemental Reserve:
                 Summer On-Peak:              $ 8.82 per MW-reserved per hour
                 Summer Off-Peak:             $ 5.04 per MW-reserved per hour
                 Winter On-Peak:              $ 4.26 per MW-reserved per hour
                 Winter Off-Peak:             $ 2.44 per MW-reserved per hour

        For purposes of this Exhibit B, the summer months shall consist of the
        months of June through September. The winter months shall consist of the
        months of January through May and the months of October through
        December.

        The On-Peak periods shall consist of Hour Ending (HE) 0700 through HE
        2200 PPT, Monday through Saturday. The Off-Peak periods shall consist of
        HE 0100 through HE 0600, HE 2300 and HE 2400 PPT, Monday through
        Saturday; HE 0100 through HE 2400 PPT Sunday and additional Off-Peak
        days (holidays) as designated annually by the WSCC.

        * SUBJECT TO FERC APPROVAL
          ------------------------

                                      B-1
<PAGE>

                                   EXHIBIT C
                                 CLARK BUNDLE
                          SUPPLIER'S MONTHLY INVOICE

      A       Price Ceiling of Energy                   $  42.65  /MWh
      B       Price Floor of Energy                     $  22.77  /MWh

MONTH 1 - ENERGY
----------------

<TABLE>
<CAPTION>
                      C                  D                E                 F                    G                     H
  Dispatch       Asset Bundle        Delivered        Supplier        Market Price        Market Price x        Market Price x
    Hour        Capacity (MWh)     Energy (MWh)    Shortfall (MWh)  of Energy ($/MWh)    Delivered Energy     Asset Bundle Capacity
    ----        --------------     ------------    ---------------  -----------------    ----------------     ---------------------
                                                       (C - D)                                (D x F)            (C x F)
  <S>            <C>                <C>             <C>              <C>                  <C>                  <C>

      1              687                687               0               40.00             $ 27,480.00            $ 27,480.00

      2              687                687               0               40.00               27,480.00              27,480.00

      3              687                627              60               40.00               25,080.00              27,480.00

      4              687                627              60               40.00               25,080.00              27,480.00

      5              557                547              10               30.00               16,410.00              16,710.00

      6              587                587               0               30.00               17,610.00              17,610.00

      7              677                657              20               20.00               13,140.00              13,540.00

      8              687                687               0               20.00               13,740.00              13,740.00

      9              687                687               0               20.00               13,740.00              13,740.00

     10              687                687               0               25.00               17,175.00              17,175.00
------------------------------------------------------------------------------------------------------------------------------------
                    6,630              6,480             150                                $196,935.00            $202,435.00

I.  Sum of (Delivered Energy times corresponding hourly Market Price)   Sec 7.2.1           $196,935.00
       IT.     Sum of (Asset Bundle Capacity times corresponding hourly Market Price)                              $202,435.00

J. Sum of hourly Delivered Energy multiplied by the Price Ceiling of Energy  Sec 7.2.2      $276,372.00
        JT.     Sum of hourly Asset Bundle Capacity multiplied by the Price
                 Ceiling of Energy                                                                                 $282,769.50

K.  Sum of hourly Delivered Energy multiplied by the Price Floor of Energy   Sec 7.2.3      $147,549.60
       KT.     Sum of hourly Asset Bundle Capacity multiplied by the Price Floor of Energy                         $150,965.10

L. Invoiced Amount - Energy            Sec 7.3                               (K ** I ** J)  $196,935.00

M. Theoretical Amount for Expected Performance                              (KT ** IT ** JT)                       $202,435.00

<CAPTION>
MONTH 1 - ANCILLARY SERVICE CAPACITY - REGULATION AND FREQUENCY RESPONSE
------------------------------------------------------------------------

                    N                      O                P                   Q                  R                    S
 Dispatch   Schedule of Ancillary  Ancillary Capacity    Supplier       Capacity Price of   Price x Ancillary    Price x Schedule
  Hour        Capacity (MW)         Supplied (MW)      Shortfall (MW)    Services ($/MW)    Capacity Supplied  of Ancillary Services
  ----        -------------         -------------      --------------    ---------------    -----------------  ---------------------
                                                          (N - O)                                (O x Q)               (N x Q)
 <S>        <C>                    <C>                 <C>              <C>                 <C>                <C>
    1               0                    0                  0                 14.71                 $0.00                $0.00

    2               0                    0                  0                 14.71                 0.00                  0.00

    3               0                    0                  0                 25.75                 0.00                  0.00

    4               0                    0                  0                 25.75                 0.00                  0.00

    5               30                  30                  0                 25.75                772.50                772.50

    6               0                    0                  0                 25.75                 0.00                  0.00

    7               0                    0                  0                 25.75                 0.00                  0.00

    8               0                    0                  0                 25.75                 0.00                  0.00

    9               0                    0                  0                 25.75                 0.00                  0.00
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

** Less Than

                                      C-1

<PAGE>

                                   EXHIBIT C
                                 CLARK BUNDLE
                          SUPPLIER'S MONTHLY INVOICE

<TABLE>
   <S>             <C>                 <C>                  <C>               <C>                  <C>                 <C>
   10               0                    0                  0                 25.75                   0.00                0.00
------------------------------------------------------------------------------------------------------------------------------------
                   30                   30                  0                                      $772.50             $772.50

T.  Invoiced Amount - Ancillary Service Capacity - Regulation and Frequency Response  Sec 7.2.5    $772.50

U.  Theoretical Amount for Expected Performance                                                                        $772.50

<CAPTION>
MONTH 1 - ANCILLARY SERVICE CAPACITY - SPINNING RESERVE
-------------------------------------------------------

                     V                    W                 X                Y                    Z                    AA
 Dispatch  Schedule of Ancillary  Ancillary Capacity    Supplier      Capacity Price of   Price x Ancillary      Price x Schedule
   Hour      Capacity (MW)          Supplied (MW)      Shortfall (MW)  Services ($/MW)    Capacity Supplied   of Ancillary Services
   ----      -------------          -------------      --------------  ---------------    -----------------  ----------------------
                                                          (V - W)                              (W x Y)               (V x Y)
 <S>       <C>                    <C>                  <C>            <C>                 <C>                <C>
   1                0                    0                   0               13.40             $    0.00             $    0.00

   2                0                    0                   0               13.40                  0.00                  0.00

   3                0                    0                   0               23.45                  0.00                  0.00

   4                0                    0                   0               23.45                  0.00                  0.00

   5               80                   80                   0               23.45              1,876.00              1,876.00

   6               80                   60                  20               23.45              1,407.00              1,876.00

   7                0                    0                   0               23.45                  0.00                  0.00

   8                0                    0                   0               23.45                  0.00                  0.00

   9                0                    0                   0               23.45                  0.00                  0.00

  10                0                    0                   0               23.45                  0.00                  0.00
------------------------------------------------------------------------------------------------------------------------------------
                  160                  140                  20                                 $3,283.00             $3,752.00

AB.    Invoiced Amount - Ancillary Service Capacity - Spinning Reserve Sec 7.2.5               $3,283.00

AC.    Theoretical Amount for Expected Performance                                                                   $3,752.00

<CAPTION>
MONTH 1 - ANCILLARY SERVICE CAPACITY - SUPPLEMENTAL RESERVE
-----------------------------------------------------------

                  AD                     AE                AF                AG                 AH                   AI
Dispatch  Schedule of Ancillary   Ancillary Capacity    Supplier      Capacity Price of  Price x Ancillary     Price x Schedule
 Hour       Capacity (MW)           Supplied (MW)      Shortfall (MW)   Services ($/MW)   Capacity Supplied   of Ancillary Services
 ----       -------------           -------------      --------------   ---------------   -----------------   ---------------------
                                                          (AD - AE)                           (AE x AG)             (AD x AG)
<S>       <C>                     <C>                  <C>            <C>                <C>                  <C>
   1               0                      0                  0                 5.04              $  0.00              $  0.00

   2               0                      0                  0                 5.04                 0.00                 0.00

   3               0                      0                  0                 8.82                 0.00                 0.00

   4               0                      0                  0                 8.82                 0.00                 0.00

   5              10                     10                  0                 8.82                88.20                88.20

   6              10                     10                  0                 8.82                88.20                88.20

   7              10                     10                  0                 8.82                88.20                88.20

   8               0                      0                  0                 8.82                 0.00                 0.00

   9               0                      0                  0                 8.82                 0.00                 0.00

  10               0                      0                  0                 8.82                 0.00                 0.00
------------------------------------------------------------------------------------------------------------------------------------
                  30                     30                  0                                   $264.60              $264.60

AJ.    Invoiced Amount - Ancillary Service Capacity - Supplemental Reserve    Sec 7.2.5          $264.60
</TABLE>

                                      C-2
<PAGE>

                                   EXHIBIT C
                                 CLARK BUNDLE
                          SUPPLIER'S MONTHLY INVOICE

<TABLE>
<S>                                                                                                                   <C>
AK.    Theoretical Amount for Expected Performance                                                                    $264.60

MONTH 1 - ANCILLARY SERVICE ENERGY
----------------------------------

<CAPTION>
                    AL                   AM               AN                AO                  AP                   AQ
Dispatch    Schedule of Ancillary  Ancillary Energy     Supplier      Price Ceiling of    Price x Ancillary    Price x Schedule
  Hour           Energy (MWh)       Supplied (MWh)    Shortfall (MWh)   Energy ($/MWh)     Energy Supplied    of Ancillary Energy
  ----           -----------        --------------    ---------------   --------------     ---------------    -------------------
                                                         (AL - AM)                            (AM x AO)            (AL x AO)
<S>         <C>                    <C>                <C>             <C>                 <C>                 <C>
    1                 0                   0                  0               42.65             $      0.00           $    0.00

    2                 0                   0                  0               42.65                    0.00                0.00

    3                 0                   0                  0               42.65                    0.00                0.00

    4                 0                   0                  0               42.65                    0.00                0.00

    5                40                  40                  0               42.65                1,706.00            1,706.00

    6                30                  10                 20               42.65                  426.50            1,279.50

    7                10                  10                  0               42.65                  426.50              426.50

    8                 0                   0                  0               42.65                    0.00                0.00

    9                 0                   0                  0               42.65                    0.00                0.00

   10                 0                   0                  0               42.65                    0.00                0.00
------------------------------------------------------------------------------------------------------------------------------------
                     80                  60                 20             $426.50             $  2,559.00           $3,412.00

AR.    Invoiced Amount - Ancillary Services Energy     Sec 7.2.6                               $  2,559.00

AS.    Theoretical Amount for Expected Performance                                                                   $3,412.00

MONTH 1 - TOTAL INVOICE AMOUNT                     Sec 7.3   (L + T + AB + AJ + AR)            $203,814.10
====================================================================================================================================

<CAPTION>
MONTH 2 - ENERGY
----------------

                      C                  D                E                 F                  G                  H
  Dispatch       Asset Bundle        Delivered        Supplier        Market Price        Market Price x      Market Price x
    Hour        Capacity (MWh)     Energy (MWh)    Shortfall (MWh)  of Energy ($/MWh)    Delivered Energy   Asset Bundle Cap.
    ----        --------------     ------------    ---------------  -----------------    ----------------   -----------------
                                                       (C - D)                                (D x F)            (C x F)
  <S>           <C>                <C>             <C>              <C>                  <C>                <C>
      1               687                687              0               45.00             $ 30,915.00        $ 30,915.00

      2               687                687              0               45.00               30,915.00          30,915.00

      3               687                627             60               45.00               28,215.00          30,915.00

      4               687                627             60               55.00               34,485.00          37,785.00

      5               557                547             10               55.00               30,085.00          30,635.00

      6               587                587              0               55.00               32,285.00          32,285.00

      7               677                657             20               35.00               22,995.00          23,695.00

      8               687                687              0               35.00               24,045.00          24,045.00

      9               687                687              0               35.00               24,045.00          24,045.00

     10               687                687              0               40.00               27,480.00          27,480.00
------------------------------------------------------------------------------------------------------------------------------------
                    6,630              6,480            150                                 $285,465.00        $292,715.00

I.  Sum of (Delivered Energy times corresponding hourly Market Price)   Sec 7.2.1           $285,465.00
       IT.   Sum of (Asset Bundle Capacity times corresponding hourly Market Price)                            $292,715.00

J.  Sum of hourly Delivered Energy multiplied by the Price Ceiling of Energy    Sec 7.2.2   $276,372.00
        JT.  Sum of hourly Asset Bundle Capacity multiplied by the Price Ceiling of Energy                     $282,769.50
</TABLE>

                                      C-3
<PAGE>

                                   EXHIBIT C
                                 CLARK BUNDLE
                          SUPPLIER'S MONTHLY INVOICE

<TABLE>
<S>                                                                                           <C>                 <C>
K.  Sum of hourly Delivered Energy multiplied by the Price Floor of Energy   Sec 7.2.3        $147,549.60
       KT.   Sum of hourly Asset Bundle Capacity multiplied by the Price Floor of Energy                          $150,965.10

L. Invoiced Amount - Energy                     Sec 7.3                       (I *** J)       $276,372.00

M. Theoretical Amount for Expected Performance                               (IT *** JT)                          $282,769.50
</TABLE>

MONTH 3 - ENERGY
----------------

<TABLE>
<CAPTION>
                      C                 D                E                 F                       G                  H
  Dispatch       Asset Bundle       Delivered        Supplier        Market Price           Market Price x      Market Price x
    Hour        Capacity (MWh)     Energy (MWh)    Shortfall (MWh)  of Energy ($/MWh)      Delivered Energy   Asset Bundle Cap.
    ----        --------------     ------------    ---------------  -----------------      ----------------   -----------------
                                                       (C - D)                                  (D x F)            (C x F)
  <S>           <C>                <C>             <C>              <C>                    <C>                <C>
      1               687                687              0               30.00              $ 20,610.00        $ 20,610.00

      2               687                687              0               20.00                13,740.00          13,740.00

      3               687                627             60               20.00                12,540.00          13,740.00

      4               687                627             60               20.00                12,540.00          13,740.00

      5               557                547             10               15.00                 8,205.00           8,355.00

      6               587                587              0               15.00                 8,805.00           8,805.00

      7               677                657             20               15.00                 9,855.00          10,155.00

      8               687                687              0               15.00                10,305.00          10,305.00

      9               687                687              0               15.00                10,305.00          10,305.00

     10               687                687              0               15.00                10,305.00          10,305.00
------------------------------------------------------------------------------------------------------------------------------------
                    6,630              6,480            150                                  $117,210.00        $120,060.00

I.     Sum of (Delivered Energy times corresponding hourly Market Price)  Sec 7.2.1          $117,210.00
          IT.   Sum of (Asset Bundle Capacity times corresponding hourly Market Price)                          $120,060.00

J.     Sum of hourly Delivered Energy multiplied by the Price Ceiling of Energy   Sec 7.2.2  $276,372.00
           JT.  Sum of hourly Asset Bundle Capacity multiplied by the Price Ceiling of Energy                   $282,769.50

K.     Sum of hourly Delivered Energy multiplied by the Price Floor of Energy   Sec 7.2.3    $147,549.60
          KT.   Sum of hourly Asset Bundle Capacity multiplied by the Price Floor of Energy                     $150,965.10

L.    Invoiced Amount - Energy                     Sec 7.3                      (I ** K)     $147,549.60

M.    Theoretical Amount for Expected Performance                              (IT ** KT)                       $150,965.10
</TABLE>

For the purposes of this example, the portions of the monthly invoices
attributable to Ancillary Services for the second and third months were assumed
to be the same as the corresponding portions for the first month.

**  Less Than
*** Greater Than

                                      C-4
<PAGE>

                                   EXHIBIT D

                                 CLARK BUNDLE

                  BUYER'S MONTHLY INVOICE - REPLACEMENT COSTS

MONTH 1 - ENERGY
----------------

<TABLE>
<CAPTION>
                              A                   B *                  C *                  D

      Dispatch           Replacement       Replacement Cost      Replacement Cost   Gross Replacement
        Hour            Energy (MWh)       of Energy ($/MWh)        of Energy         Cost of Energy
        ----            ------------       -----------------        ---------         --------------
<S>                     <C>                <C>                   <C>                <C>
                                                                                       (A x B) + C

         1                    0                       na            $  0.00           $      0.00

         2                    0                       na               0.00                  0.00

         3                   60                    35.00             100.00              2,200.00

         4                   60                    30.00              50.00              1,850.00

         5                   10                    30.00              50.00                350.00

         6                    0                       na               0.00                  0.00

         7                   20                    25.00               0.00                500.00

         8                    0                       na               0.00                  0.00

         9                    0                       na               0.00                  0.00

         10                   0                       na               0.00                  0.00
--------------------------------------------------------------------------------------------------
                             150                                                      $  4,900.00

E.     Gross Replacement Cost of Energy                                               $  4,900.00

F.     Theoretical Supplier's Invoice Amount for Expected Performance                 $202,435.00

G.     Actual Supplier's Invoice Amount                                                196,935.00
                                                                                      ------------
H.     Avoided Payment to Supplier                               (F - G)              $  5,500.00

I.     Invoiced Replacement Cost - Energy                        (E ** H)             $      0.00

<CAPTION>
MONTH 1 - ANCILLARY SERVICE CAPACITY - REGULATION AND FREQUENCY RESPONSE
------------------------------------------------------------------------

                              J                   K *                  L *                  M

      Dispatch           Replacement       Replacement Cost      Replacement Cost   Gross Replacement
        Hour            Capacity (MW)     of Capacity ($/MW)       of Capacity       Cost of Capacity
        ----            -------------     ------------------       -----------       ----------------
<S>                     <C>               <C>                    <C>                <C>
                                                                                       (J x K) + L

         1                    0                   na                  $0.00             $  0.00

         2                    0                   na                   0.00                0.00

         3                    0                   na                   0.00                0.00

         4                    0                   na                   0.00                0.00

         5                    0                   na                   0.00                0.00

         6                    0                   na                   0.00                0.00

         7                    0                   na                   0.00                0.00

         8                    0                   na                   0.00                0.00

         9                    0                   na                   0.00                0.00

         10                   0                   na                   0.00                0.00
------------------------------------------------------------------------------------------------
                              0                                                         $  0.00

N.     Gross Replacement Cost of Ancillary Capacity - Regulation and Frequency          $  0.00
       Response

O.     Theoretical Supplier's Invoice Amount for Expected Performance                   $772.50

P.     Actual Supplier's Invoice Amount                                                  772.50
                                                                                        --------
Q.     Avoided Payment to Supplier                                   (O - P)            $  0.00

R.     Invoiced Replacement Cost - Ancillary Capacity                (N = Q)            $  0.00
</TABLE>

** Less Than

                                      D-1

<PAGE>

                                   EXHIBIT D

                                 CLARK BUNDLE

                  BUYER'S MONTHLY INVOICE - REPLACEMENT COSTS

MONTH 1 - ANCILLARY SERVICE CAPACITY - SPINNING RESERVE
-------------------------------------------------------

<TABLE>
<CAPTION>
                              S                   T *                  U *                  V

      Dispatch           Replacement       Replacement Cost      Replacement Cost   Gross Replacement
        Hour            Capacity (MW)     of Capacity ($/MW)       of Capacity       Cost of Capacity
        ----            -------------     ------------------       -----------       ----------------
<S>                     <C>               <C>                    <C>                 <C>
                                                                                       (S x T) + U

         1                    0                       na             $  0.00            $    0.00

         2                    0                       na                0.00                 0.00

         3                    0                       na                0.00                 0.00

         4                    0                       na                0.00                 0.00

         5                    0                       na                0.00                 0.00

         6                   20                    40.00              100.00               900.00

         7                    0                       na                0.00                 0.00

         8                    0                       na                0.00                 0.00

         9                    0                       na                0.00                 0.00

         10                   0                       na                0.00                 0.00
--------------------------------------------------------------------------------------------------
                             20                                                         $  900.00

W.     Gross Replacement Cost of Ancillary Capacity - Spinning Reserve                  $  900.00

X.     Theoretical Supplier's Invoice Amount for Expected Performance                   $3,752.00

Y.     Actual Supplier's Invoice Amount                                                  3,283.00
                                                                                        ----------
Z.     Avoided Payment to Supplier                                   (X - Y)            $  469.00

AA.    Invoiced Replacement Cost - Ancillary Capacity                (W GREATER THAN Z) $  431.00

<CAPTION>
MONTH 1 - ANCILLARY CAPACITY - SUPPLEMENTAL RESERVE
---------------------------------------------------

                             AB                  AC *                  AD *                 AE

      Dispatch           Replacement       Replacement Cost      Replacement Cost   Gross Replacement
        Hour            Capacity (MW)     of Capacity ($/MW)       of Capacity       Cost of Capacity
        ----            -------------     ------------------       -----------       ----------------
<S>                     <C>               <C>                    <C>                <C>
                                                                                      (AB x AC) + AD

         1                    0                    na                 $0.00              $  0.00

         2                    0                    na                  0.00                 0.00

         3                    0                    na                  0.00                 0.00

         4                    0                    na                  0.00                 0.00

         5                    0                    na                  0.00                 0.00

         6                    0                    na                  0.00                 0.00

         7                    0                    na                  0.00                 0.00

         8                    0                    na                  0.00                 0.00

         9                    0                    na                  0.00                 0.00

         10                   0                    na                  0.00                 0.00
--------------------------------------------------------------------------------------------------
                              0                                                          $  0.00

AF.     Gross Replacement Cost of Ancillary Capacity - Supplemental Reserve              $  0.00

AG.     Theoretical Supplier's Invoice Amount for Expected Performance                   $264.60

AH.     Actual Supplier's Invoice Amount                                                  264.60

AI.     Avoided Payment to Supplier                                 (AG - AH)            $  0.00

AJ.     Invoiced Replacement Cost - Ancillary Capacity              (AF = AI)            $  0.00
</TABLE>

                                      D-2
<PAGE>

                                   EXHIBIT D

                                 CLARK BUNDLE

                  BUYER'S MONTHLY INVOICE - REPLACEMENT COSTS

MONTH 1 - ANCILLARY SERVICE ENERGY
----------------------------------

<TABLE>
<CAPTION>
                             AK                  AL *                  AM *                 AN

      Dispatch           Replacement       Replacement Cost      Replacement Cost   Gross Replacement
        Hour            Energy (MWh)       of Energy ($/MWh)       of Energy **       Cost of Energy
        ----            ------------       -----------------       ------------       --------------
<S>                     <C>                <C>                   <C>                <C>
                                                                                      (AK x AL) + AM

         1                    0                      na              $ 0.00                    0.00

         2                    0                      na                0.00                    0.00

         3                    0                      na                0.00                    0.00

         4                    0                      na                0.00                    0.00

         5                    0                      na                0.00                    0.00

         6                   20                   50.00               20.00                1,020.00

         7                    0                      na                0.00                    0.00

         8                    0                      na                0.00                    0.00

         9                    0                      na                0.00                    0.00

         10                   0                      na                0.00                    0.00
----------------------------------------------------------------------------------------------------
                             20                                                           $1,020.00

AO.     Gross Replacement Cost of Ancillary Energy                                        $1,020.00

AP.     Theoretical Supplier's Invoice Amount for Expected Performance                    $3,412.00

AQ.     Actual Supplier's Invoice Amount                                                   2,559.00
                                                                                          ----------
AR.     Avoided Payment to Supplier                                 (AP - AQ)             $  853.00

AS.     Invoiced Replacement Cost - Ancillary Energy                (AO ** AR)            $  167.00

MONTH 1 - TOTAL INVOICE AMOUNT                    (I + R + AA + AJ + AS)                  $  598.00
====================================================================================================

<CAPTION>
MONTH 2 - ENERGY
----------------

                              A                   B *                  C *                  D

      Dispatch           Replacement       Replacement Cost      Replacement Cost   Gross Replacement
        Hour            Energy (MWh)       of Energy ($/MWh)        of Energy         Cost of Energy
        ----            ------------       -----------------        ---------         --------------
<S>                     <C>                <C>                   <C>                <C>
                                                                                       (A x B) + C

         1                    0                      na             $  0.00                  0.00

         2                    0                      na                0.00                  0.00

         3                   60                   40.00              200.00              2,600.00

         4                   60                   55.00              100.00              3,400.00

         5                   10                   48.00              200.00                680.00

         6                    0                      na                0.00                  0.00

         7                   20                   35.00              300.00              1,000.00

         8                    0                      na                0.00                  0.00

         9                    0                      na                0.00                  0.00

         10                   0                      na                0.00                  0.00
--------------------------------------------------------------------------------------------------
                             150                                                      $  7,680.00

E.     Gross Replacement Cost of Energy                                               $  7,680.00

F.     Theoretical Supplier's Invoice Amount for Expected Performance                 $282,769.50

G.     Actual Supplier's Invoice Amount                                                276,372.00
                                                                                      ------------
</TABLE>

** Less Than

                                      D-3
<PAGE>

                                   EXHIBIT D

                                 CLARK BUNDLE

                  BUYER'S MONTHLY INVOICE - REPLACEMENT COSTS

<TABLE>
<S>                                                                  <C>                  <C>
H.     Avoided Payment to Supplier                                   (F - G)              $6,397.50

I.      Invoiced Replacement Cost - Energy                           (E ** H)             $1,282.50
</TABLE>

MONTH 3 - ENERGY
----------------

<TABLE>
<CAPTION>
                              A                   B *                  C *                  D

      Dispatch           Replacement       Replacement Cost      Replacement Cost   Gross Replacement
        Hour            Energy (MWh)       of Energy ($/MWh)        of Energy         Cost of Energy
        ----            ------------       -----------------        ---------         --------------
<S>                     <C>                <C>                   <C>                <C>
                                                                                       (A x B) + C

         1                    0                      na              $  0.00                  0.00

         2                    0                      na                 0.00                  0.00

         3                   60                   27.00               100.00              1,720.00

         4                   60                   22.00                50.00              1,370.00

         5                   10                   22.00                 0.00                220.00

         6                    0                      na                 0.00                  0.00

         7                   20                   22.00                50.00                490.00

         8                    0                      na                 0.00                  0.00

         9                    0                      na                 0.00                  0.00

         10                   0                      na                 0.00                  0.00
---------------------------------------------------------------------------------------------------
                             150                                                       $  3,800.00

E.     Gross Replacement Cost of Energy                                                $  3,800.00

F.     Theoretical Supplier's Invoice Amount for Expected Performance                  $150,965.10

G.     Actual Supplier's Invoice Amount                                                 147,549.60
                                                                                       ------------
H.     Avoided Payment to Supplier                              (F - G)                $  3,415.50

I.     Invoiced Replacement Cost - Energy                       (E *** H)              $    384.50
</TABLE>

For the purposes of this example, the portions of the monthly invoices
attributable to Ancillary Services for the second and third months were assumed
to be the same as the corresponding portions for the first month.

**  Less Than
*** Greater Than

                                      D-4
<PAGE>

                                   EXHIBIT E
                                 CLARK BUNDLE
                           YEAR END TRUE-UP INVOICE

       A        Price Ceiling of Energy                           $42.65  /MWh

       B        Price Floor of Energy                             $22.77  /MWh

EXAMPLE 1
---------

<TABLE>
<CAPTION>
                       C                 D                    E                   F                       G

                   Delivered       Market Price x      Price Ceiling x      Price Floor x        Supplier's Invoiced
     Month       Energy (MWh)     Delivered Energy    Delivered Energy     Delivered Energy         Amount - Energy
     -----       ------------     ----------------    ----------------     ----------------         ---------------
                                                           (A x C)             (B x C)
<S>              <C>              <C>                 <C>                  <C>                   <C>
       1             6,480         $  196,935.00        $  276,372.00      $  147,549.60            $  196,935.00
       2             6,480            285,465.00           276,372.00         147,549.60               276,372.00
       3             6,480            117,210.00           276,372.00         147,549.60               147,549.60
       4             6,870            329,760.00           293,005.50         156,429.90               293,005.50
       5             6,870            302,280.00           293,005.50         156,429.90               293,005.50
       6             6,670            293,480.00           284,475.50         151,875.90               284,475.50
       7             6,870            316,020.00           293,005.50         156,429.90               293,005.50
       8             6,870            322,890.00           293,005.50         156,429.90               293,005.50
       9             6,330            303,840.00           269,974.50         144,134.10               269,974.50
      10             6,870            309,150.00           293,005.50         156,429.90               293,005.50
      11             6,870            370,980.00           293,005.50         156,429.90               293,005.50
      12             6,570            321,930.00           280,210.50         149,598.90               280,210.50
------------------------------------------------------------------------------------------------------------------
     Total          80,230         $3,469,940.00        $3,421,809.50      $1,826,837.10            $3,213,550.10

(Total of Column D) GREATER THAN  (Total of Column E) therefore Annual True-up calculated under Section 7.5.1(a)
----------------------------------------------------------------------------------------------------------------

H.    Annual True-up - Delivered Energy                                  (Total E - Total G)          $208,259.40

I.    Average Cost of Delivered Energy after True-up ($/MWh)             (Total E / Total C)               $42.65

<CAPTION>
                       J                 K                    L                   M                         N

                  Replacement    Replacement Energy   Gross Replacement  Adjusted Replacement      Invoiced Replacement
     Month       Energy (MWh)      x Average Cost      Cost of Energy       Cost of Energy            Cost of Energy
     -----       ------------      --------------      --------------       --------------            --------------
                                       (I x J)
<S>              <C>             <C>                  <C>                <C>                       <C>
       1              150                                $ 4,900.00                                     $    0.00

       2              150                                  7,680.00                                      1,282.50

       3              150                                  3,800.00                                        384.50

       4                0                                      0.00                                          0.00

       5                0                                      0.00                                          0.00

       6                0                                      0.00                                          0.00

       7                0                                      0.00                                          0.00

       8                0                                      0.00                                          0.00

       9                0                                      0.00                                          0.00

      10                0                                      0.00                                          0.00

      11                0                                      0.00                                          0.00

      12                0                                      0.00                                          0.00
------------------------------------------------------------------------------------------------------------------
     Total            450            $19,192.50          $16,380.00               $0.00               $  1,667.00

O.    Annual True-up - Replacement Costs                                 (Total N - Total M)          $  1,667.00
</TABLE>

                                      E-1
<PAGE>

                                   EXHIBIT E
                                 CLARK BUNDLE
                           YEAR END TRUE-UP INVOICE

<TABLE>
<CAPTION>
Total Annual True-up *                                                         (H + O)            $209,926.40
===================================================================================================================

EXAMPLE 2
---------
                       C                 D                    E                   F                    G

                   Delivered       Market Price x      Price Ceiling x      Price Floor x     Supplier's Invoiced
     Month       Energy (MWh)     Delivered Energy    Delivered Energy     Delivered Energy     Amount - Energy
     -----       ------------     ----------------    ----------------     ----------------     ---------------
                                                           (A x C)             (B x C)
<S>              <C>              <C>                 <C>                  <C>                <C>
       1             6,480        $  196,935.00       $  276,372.00        $  147,549.60        $  196,935.00

       2             6,480           285,465.00          276,372.00           147,549.60           276,372.00

       3             6,480           117,210.00          276,372.00           147,549.60           147,549.60

       4             6,870           261,060.00          293,005.50           156,429.90           261,060.00

       5             6,870           254,190.00          293,005.50           156,429.90           254,190.00

       6             6,670           226,780.00          284,475.50           151,875.90           226,780.00

       7             6,870           329,760.00          293,005.50           156,429.90           293,005.50

       8             6,870           233,580.00          293,005.50           156,429.90           233,580.00

       9             6,330           240,540.00          269,974.50           144,134.10           240,540.00

      10             6,870           240,450.00          293,005.50           156,429.90           240,450.00

      11             6,870           302,280.00          293,005.50           156,429.90           293,005.50

      12             6,570           256,230.00          280,210.50           149,598.90           256,230.00
--------------------------------------------------------------------------------------------------------------
     Total          80,230        $2,944,480.00       $3,421,809.50        $1,826,837.10        $2,919,697.60

(Total of Column E) GREATER THAN (Total of Column D) therefore Annual True-up calculated under Section 7.5.1(b)
--------------------------------------------------------------------------------------------------------------

H.    Annual True-up - Delivered Energy                                  (Total D - Total G)    $   24,782.40

I.    Average Cost of Delivered Energy after True-up ($/MWh)             (Total D / Total C)    $       36.70

<CAPTION>
                       J                 K                    L                   M                    N

                  Replacement    Replacement Energy   Gross Replacement  Adjusted Replacement      Invoiced Replacement
     Month       Energy (MWh)      x Average Cost      Cost of Energy       Cost of Energy            Cost of Energy
     -----       ------------      --------------      --------------       --------------            --------------
                                      (I x J)
<S>              <C>             <C>                  <C>                <C>                       <C>
       1              150                                $ 4,900.00                                    $     0.00

       2              150                                  7,680.00                                      1,282.50

       3              150                                  3,800.00                                        384.50

       4                0                                      0.00                                          0.00

       5                0                                      0.00                                          0.00

       6                0                                      0.00                                          0.00

       7                0                                      0.00                                          0.00

       8                0                                      0.00                                          0.00

       9                0                                      0.00                                          0.00

      10                0                                      0.00                                          0.00

      11                0                                      0.00                                          0.00

      12                0                                      0.00                                          0.00
------------------------------------------------------------------------------------------------------------------
     Total            450            $16,515.22          $16,380.00             $0.00                  $ 1,667.00

O.    Annual True-up - Replacement Costs                                 (Total N - Total M)           $ 1,667.00

Total Annual True-up *                                                         (H + O)                 $26,449.40
===================================================================================================================
</TABLE>

                                      E-2
<PAGE>

                                   EXHIBIT E

                                 CLARK BUNDLE

                           YEAR END TRUE-UP INVOICE

<TABLE>
<CAPTION>
EXAMPLE 3
---------
                       C                 D                    E                   F                    G
                   Delivered       Market Price x      Price Ceiling x      Price Floor x        Supplier's Invoiced
     Month       Energy (MWh)     Delivered Energy    Delivered Energy     Delivered Energy        Amount - Energy
     -----       ------------     ----------------    ----------------     ---------------         ---------------
                                                           (A x C)             (B x C)
<S>              <C>              <C>                 <C>                  <C>                   <C>
       1             6,480         $  196,935.00        $  276,372.00        $  147,549.60          $  196,935.00
       2             6,480            285,465.00           276,372.00           147,549.60             276,372.00
       3             6,480            117,210.00           276,372.00           147,549.60             147,549.60
       4             6,870            219,840.00           293,005.50           156,429.90             219,840.00
       5             6,870            206,100.00           293,005.50           156,429.90             206,100.00
       6             6,670            186,760.00           284,475.50           151,875.90             186,760.00
       7             6,870            178,620.00           293,005.50           156,429.90             178,620.00
       8             6,870            185,490.00           293,005.50           156,429.90             185,490.00
       9             6,330            158,250.00           269,974.50           144,134.10             158,250.00
      10             6,870            171,750.00           293,005.50           156,429.90             171,750.00
      11             6,870            144,270.00           293,005.50           156,429.90             156,429.90
      12             6,570            144,540.00           280,210.50           149,598.90             149,598.90
-----------------------------------------------------------------------------------------------------------------
     Total          80,230         $2,195,230.00        $3,421,809.50        $1,826,837.10          $2,233,695.40

(Total of Column E) > (Total of Column D) therefore Annual True-up calculated under Section 7.5.1(b)
----------------------------------------------------------------------------------------------------

H.    Annual True-up - Delivered Energy                                  (Total D - Total G)        $  (38,465.40)

I.    Average Cost of Delivered Energy after True-up ($/MWh)             (Total D / Total C)        $       27.36
</TABLE>

<TABLE>
<CAPTION>
                       J                 K                    L                   M                         N
                  Replacement    Replacement Energy   Gross Replacement  Adjusted Replacement      Invoiced Replacement
     Month       Energy (MWh)      x Average Cost      Cost of Energy       Cost of Energy            Cost of Energy
     -----       ------------      --------------      --------------       --------------            --------------
                                      (I x J)
<S>              <C>             <C>                  <C>                <C>                       <C>
       1              150                              $  4,900.00                                   $       0.00
       2              150                                 7,680.00                                       1,282.50
       3              150                                 3,800.00                                         384.50
       4                0                                     0.00                                           0.00
       5                0                                     0.00                                           0.00
       6                0                                     0.00                                           0.00
       7                0                                     0.00                                           0.00
       8                0                                     0.00                                           0.00
       9                0                                     0.00                                           0.00
      10                0                                     0.00                                           0.00
      11                0                                     0.00                                           0.00
      12                0                                     0.00                                           0.00
------------------------------------------------------------------------------------------------------------------
     Total            450           $ 12,312.77        $ 16,380.00                 $ 4,067.23        $   1,667.00

O.    Annual True-up - Replacement Costs                                 (Total N - Total M)         $  (2,400.23)
</TABLE>

                                      E-3
<PAGE>

                                   EXHIBIT E

                                 CLARK BUNDLE

                           YEAR END TRUE-UP INVOICE

Total Annual True-up *                             (H + O)       $   (40,865.63)
================================================================================

EXAMPLE 4
---------

<TABLE>
<CAPTION>
                       C                 D                    E                   F                    G
                   Delivered       Market Price x      Price Ceiling x      Price Floor x     Supplier's Invoiced
     Month        Energy (MWh)    Delivered Energy    Delivered Energy     Delivered Energy     Amount - Energy
     -----        ------------    ----------------    ----------------     ----------------     ---------------
                                                           (A x C)             (B x C)
<S>               <C>             <C>                 <C>                  <C>                <C>
       1             6,480         $   196,935.00      $   276,372.00       $   147,549.60      $   196,935.00
       2             6,480             285,465.00          276,372.00           147,549.60          276,372.00
       3             6,480             117,210.00          276,372.00           147,549.60          147,549.60
       4             6,870             151,140.00          293,005.50           156,429.90          156,429.90
       5             6,870             116,790.00          293,005.50           156,429.90          156,429.90
       6             6,670             153,410.00          284,475.50           151,875.90          153,410.00
       7             6,870             158,010.00          293,005.50           156,429.90          158,010.00
       8             6,870              96,180.00          293,005.50           156,429.90          156,429.90
       9             6,330             113,940.00          269,974.50           144,134.10          144,134.10
      10             6,870             130,530.00          293,005.50           156,429.90          156,429.90
      11             6,870              82,440.00          293,005.50           156,429.90          156,429.90
      12             6,570             124,830.00          280,210.50           149,598.90          149,598.90
---------------------------------------------------------------------------------------------------------------
     Total          80,230         $ 1,726,880.00      $ 3,421,809.50       $ 1,826,837.10      $ 2,008,159.10

(Total of Column E) > (Total of Column D) therefore Annual True-up calculated under Section 7.5.1(b)
----------------------------------------------------------------------------------------------------

H.    Annual True-up - Delivered Energy                                  (Total F - Total G)    $  (181,322.00)

I.    Average Cost of Delivered Energy after True-up ($/MWh)             (Total F / Total C)    $        22.77
</TABLE>

<TABLE>
<CAPTION>
                       J                 K                    L                    M                      N
                  Replacement    Replacement Energy   Gross Replacement   Adjusted Replacement   Invoiced Replacement
     Month        Energy (MWh)      x Average Cost      Cost of Energy       Cost of Energy          Cost of Energy
     -----        ------------      --------------      --------------       --------------          --------------
                                        (I x J)
<S>               <C>            <C>                  <C>                 <C>                    <C>
       1              150                              $  4,900.00                                  $        0.00
       2              150                                 7,680.00                                       1,282.50
       3              150                                 3,800.00                                         384.50
       4                0                                     0.00                                           0.00
       5                0                                     0.00                                           0.00
       6                0                                     0.00                                           0.00
       7                0                                     0.00                                           0.00
       8                0                                     0.00                                           0.00
       9                0                                     0.00                                           0.00
      10                0                                     0.00                                           0.00
      11                0                                     0.00                                           0.00
      12                0                                     0.00                                           0.00
-------------------------------------------------------------------------------------------------------------------
     Total            450           $ 10,246.50        $ 16,380.00                 $ 6,133.50       $    1,667.00

O.    Annual True-up - Replacement Costs                                 (Total N - Total M)        $   (4,466.50)
===================================================================================================================
</TABLE>

                                      E-4
<PAGE>

                                   EXHIBIT E

                                 CLARK BUNDLE

                           YEAR END TRUE-UP INVOICE

Total Annual True-up *                      (H + O)           $    (185,788.50)
================================================================================

* Positive Total Annual True-up is indicative of a payment form Buyer to
Supplier; Negative Total Annual True-up is indicative of a payment form Supplier
to Buyer.

                                      E-5
<PAGE>

                                   EXHIBIT F
                   NOTICES, BILLING AND PAYMENT INSTRUCTIONS

Supplier:
--------

a)  Agreement Notices:          Name and Address:______________________
    ------------------          Phone:_________________________________
                                Fax:___________________________________

b)  Payment Check:              Name and Address:______________________
    --------------

c)  Payment Wire Transfer:      Bank:__________________________________
    ----------------------      ABA#:__________________________________
                                For: Supplier's Name __________________
                                Account No: ___________________________
                                For:___________________________________

d)  Invoices:                   Name and Address:______________________
    ---------                   Phone:_________________________________
                                Fax:___________________________________

e)  Operating Notifications:
    ------------------------
    i)   (Management, if required)

    ii)  Pre-Schedule:          Phone:_________________________________
                                Fax:___________________________________

    iii) Real Time:             Phone:_________________________________
                                Fax:___________________________________

    iv)  Monthly Checkout       Phone:_________________________________
         Person:                Fax:___________________________________

                                      F-1
<PAGE>

Buyer:

a) Agreement Notices:
   -----------------
        Address:  Gary Craythorn
                  Manager, Resource Contracts
                  Nevada Power Company
                  6226 West Sahara Avenue, M/S 26A
                  Las Vegas, Nevada 89146
        Phone:    702/367-5425
        Fax:      702/227-2455
        E-mail:   gcraythorn@nevp.com

<TABLE>
<S>                                         <C>
b) Invoices:
   --------
    US Post Office: (Via Certified Mail)    Overnight Delivery
    --------------                          ------------------
    Address:   Nevada Power Company         Address:   Nevada Power Company
               Attn: Kathy Crews                       Attn: Kathy Crews
               P.O. Box 230, M/S 20                    6226 West Sahara Ave., M/S 20
               Las Vegas, Nevada 89151                 Las Vegas, Nevada 89146
    Telephone: 702/227-2476
    Fax: 702/367-5096
    E-mail: kcrews@nevp.com

c) Schedules:
    i) Pre-Schedule:        Primary Name:   Rick Engebretson     Phone: 702/862-7195
                                                                 E-mail: rengebretson@nevp.com
                        Alternate Name:     Tim Schuster         Phone: 702/862-7194
                                                                 E-mail: tschuster@nevp.com
                                                                 Fax: 702/227-2404
   ii) Real Time:                                                Phone: 702/862-7106
                                                                 Fax: 702/227-2404
  iii) Monthly Checkout:                 Kathy Crews             Phone:702/227-2476
                                                                 Fax:702/367-5096
                                                                 E-mail:kcrews@nevp.com
d) Control Area/Transmission:
    i) Reliability Dispatch:       Phone: (702) 451-2026
                                   Fax: (702) 862-7113
   ii) Transmission Dispatch:      Phone: (702) 451-8346
                                   Fax: (702) 862-7113
</TABLE>

                                      F-2
<PAGE>

                                    EXHIBIT G

                          FORM OF AVAILABILITY NOTICE*

Date of Notice:

Time of Notice:

Supplier:

Name of Supplier's Representative:

Buyer:

Asset Bundle:

Availability Dates (96 hours total):

<TABLE>
<CAPTION>
                          A                   B                C             D                E              F             G
Availability  Hour   Available from   Total Derating of    Permitted    Asset Bundle    Available    Total Derating  Permitted
  Date       Ending   Valmy   Unit     Valmy Unit (MW)    Derating       Capacity of    from Valmy   of    Valmy     Derating of
  ----       ------           ----     --------------     Unit 1 (MW)    Unit 1 (MW)     Unit 2 (MW)   Unit 2 (MW)     Unit 2 (MW)
                      1 (MW)                              -----------    -----------     ----------    -----------     -----------
                      -----

<S>          <C>     <C>              <C>               <C>             <C>          <C>             <C>            <C>
                     (A ** or = ____) (___ - A)         (C) ** or = B)    (A - C)    (E ** or = ___) (___ - E)      (B ** or = F)

              0600

              0700

              0800

              0900

              1000

              1100

              1200

              1300

              1400

              1500

              1600

              1700

              1800

              1900

              2000

              2100

              2200

              2300

              2400

              0100

              0200

              0300

              0400

              0500

              0600

              0700

               :

         (96 hours total)

               :

              300

              400

              500

<CAPTION>

                             H              I**                     J

                         Asset bundle    Alternative    Cause and Expected Duration of
Availability  Hour         Capacity of     Point(s) of    Deratings and Identification
   Date      Ending       Unit 2 (MW)       Delivery       Permitted Deratings
   ----      ------        ----------       -------        -------------------
<S>         <C>         <C>              <C>            <C>
                             (G - E)

              0600

              0700

              0800

              0900

              1000

              1100

              1200

              1300

              1400

              1500

              1600

              1700

              1800

              1900

              2000

              2100

              2200

              2300

              2400

              0100

              0200

              0300

              0400

              0500

              0600

              0700

               :

         (96 hours total)

               :

              300

              400

              500
</TABLE>
*   The Parties' operational personnel shall develop a similar form for the
    other generating units in the bundle.

**  The Parties' operational personnel shall develop the necessary procedure
    to document requests and responses to utilize Alternative Point(s) of
    Delivery.

                                      G-1
<PAGE>

                                   EXHIBIT H

                               FORM OF GUARANTEE

     This Guarantee is entered into as of November 16, 2000 by NRG Energy, Inc.,
a Delaware corporation, and Dynegy Holdings Inc., a Delaware corporation (each,
a "Guarantor"), on behalf of Clark Gardner Power LLC, a Delaware limited
liability company ("Supplier"), in favor of and for the benefit of Nevada Power
Company, a Nevada corporation ("NPC"). NPC is sometimes referred to herein as
"Beneficiary".

     WHEREAS, Supplier and NPC are entering into a Transitional Power Purchase
Agreement dated as of November 16, 2000 (the "TPPA") by which Supplier has
agreed to sell and NPC has agreed to buy Energy and Ancillary Services (as
defined in the TPPA) produced by the Clark generating station being sold by NPC;
and

     WHEREAS, it is a condition to the obligation of NPC to enter into the TPPA
for Guarantor to guarantee the Supplier's obligations under the TPPA in an
amount not to exceed the Credit Amount (as defined in the TPPA) (the "Guarantied
Obligations").

     1.  Guarantee. Each Guarantor jointly and severally, and irrevocably and
unconditionally, guaranties, as primary obligor and not merely as surety, the
due and punctual payment in full of all Guarantied Obligations (including
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. (S) 362(a)).

     In the event that all or any portion of the Guarantied Obligations is paid
by Supplier, the obligations of Guarantor hereunder shall continue and remain in
full force and effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) is rescinded or recovered directly or
indirectly from the Beneficiary as a preference, fraudulent transfer or
otherwise, and any such payments that are so rescinded or recovered shall
constitute Guarantied Obligations (to the extent such payments, in the
aggregate, do not exceed the Credit Amount).

     Subject to the other provisions of this Section 1, upon failure of Supplier
to pay any of the Guarantied Obligations when and as the same shall become due,
the Guarantors will upon demand pay, or cause to be paid, in cash, to NPC, an
amount equal to the aggregate of the unpaid Guarantied Obligations to the extent
due. In the event the Guarantors fail to pay the Guarantied Obligations, each
and every default in the payment shall give rise to a separate cause of action
and separate causes of action may be brought hereunder as each such cause of
action arises. In no event shall the amount recoverable hereunder by Beneficiary
from the Guarantors, singly or jointly, ever exceed the Credit Amount (as
defined in the TPPA).

     2.  Expenses. Each Guarantor agrees to reimburse NPC for all reasonable
costs and expenses (including, without limitation, the reasonable fees and
expenses of legal counsel) in connection with (i) any default by such Guarantor
hereunder and any enforcement or collection proceeding resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with bankruptcy, insolvency, receivership, foreclosure, winding up
or liquidation proceedings of or involving the Guarantor, judicial or regulatory
proceedings of or

                                      H-3
<PAGE>

involving the Guarantor and workout, restructuring or other negotiations or
proceedings of or involving the Guarantor (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 2.

     3.  Guarantee Absolute; Continuing Guarantee. The obligations of each
Guarantor hereunder are joint and several, irrevocable, absolute, independent
and unconditional, and shall not be affected by any circumstance which
constitutes a legal or equitable discharge of a guarantor or surety other than
payment in full of the Guarantied Obligations. In furtherance of the foregoing
and without limiting the generality thereof, the Guarantors agree that: (a) this
Guarantee is a guarantee of payment when due and not of collectibility; (b) the
obligations of each Guarantor hereunder are independent of the obligations of
Supplier under the TPPA and a separate action or actions may be brought and
prosecuted against either Guarantor whether or not any action is brought against
the Supplier and whether or not the Supplier is joined in any such action or
actions; and (c) either Guarantor's payment of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge the
Guarantors' liability for any portion of the Guarantied Obligations that has not
been paid. This Guarantee is a continuing guarantee and shall be binding upon
the Guarantors and its successors and assigns.

     4.  Actions by Beneficiary. The Beneficiary may from time to time, without
notice or demand and without affecting the validity or enforceability of this
Guarantee or giving rise to any limitation, impairment or discharge of the
Guarantors' liability hereunder, (a) renew, extend, accelerate or otherwise
change the time, place, manner or terms of payment of the Guarantied
Obligations, (b) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guarantied
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations, (c) request and accept other
guaranties of the Guarantied Obligations and take and hold security for the
payment of this Guarantee or the Guarantied Obligations, (d) release, exchange,
compromise, subordinate or modify, with or without consideration, any security
for payment of the Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any Person with respect to
the Guarantied Obligations, (e) enforce and apply any security hereafter held by
or for the benefit of the Beneficiary in respect of this Guarantee or the
Guarantied Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that the Beneficiary may have against any
such security, and (f) exercise any other rights available to NPC under the
TPPA.

     5.  No Discharge. This Guarantee and the obligations of each Guarantor
hereunder shall be valid and enforceable and shall not be subject to any
limitation, impairment or discharge for any reason (other than payment in full
of the Guarantied Obligations), including without limitation the occurrence of
any of the following, whether or not Guarantor shall have had notice or
knowledge of any of them: (a) any failure to assert or enforce or agreement not
to assert or enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise or enforcement of, any claim or demand or
any right, power or remedy with respect to the Guarantied Obligations or any
agreement relating thereto, or with respect to any other guarantee of or
security for the payment of the Guarantied Obligations, (b) any waiver or

                                      H-4
<PAGE>

modification of, or any consent to departure from, any of the terms or
provisions of any other guarantee or security for the Guarantied Obligations,
(c) the Guarantied Obligations, or any agreement relating thereto, at any time
being found to be illegal, invalid or unenforceable in any respect, (d) the
application of payments received from any source to the payment of indebtedness
other than the Guarantied Obligations, even if the Beneficiary might have
elected to apply such payment to any part or all of the Guarantied Obligations,
(e) any failure to perfect or continue perfection of a security interest in any
collateral which secures any of the Guarantied Obligations, (f) any defenses,
set-offs or counterclaims which the Supplier may assert against the Beneficiary
in respect of the Guarantied Obligations, including but not limited to failure
of consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction (other than the right to set off or recoup
overdue undisputed payments due from Beneficiary under the TPPA), and (g) any
other act or thing or omission, or delay to do any other act or thing, which may
or might in any manner or to any extent vary the risk of either Guarantor as an
obligor in respect of the Guarantied Obligations.

     6.  Waivers for the Benefit of Beneficiary. Each Guarantor waives, for the
benefit of Beneficiary, until the Guarantied Obligations are paid in full: (a)
any right to require the Beneficiary, as a condition of payment or performance
by the Guarantors, to (i) proceed against the Supplier, any other guarantor of
the Guarantied Obligations or any other Person, (ii) proceed against or exhaust
any security held from the Supplier, any other guarantor of the Guarantied
Obligations or any other Person, or (iii) pursue any other remedy in the power
of the Beneficiary; (b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of the Supplier including, without
limitation, any defense based on or arising out of the lack of validity or the
unenforceability of the Guarantied Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of the Supplier
from any cause other than payment in full of the Guarantied Obligations; (c) any
defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in other respects more
burdensome than that of the principal; (d) (i) any principles or provisions of
law, statutory or otherwise, that are or might be in conflict with the terms of
this Guarantee and any legal or equitable discharge of Guarantors' obligations
hereunder, (ii) the benefit of any statute of limitations affecting Guarantors'
liability hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that the Beneficiary protect, secure, perfect or insure any lien on
any property subject thereto; (e) notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guarantee; and (f) to the fullest extent permitted
by law, any defenses or benefits that may be derived from or afforded by law
which limit the liability of or exonerate guarantors or sureties, or which may
conflict with the terms of this Guarantee.

     7.  Waiver of Rights Against Supplier. Until the Guarantied Obligations are
paid in full, each Guarantor waives any claim, right or remedy, direct or
indirect, that such Guarantor now has or may hereafter have against the Supplier
or any of its assets in connection with this Guarantee or the performance by
such Guarantor of its obligations hereunder, in each case whether such claim,
right or remedy arises in equity, under contract, by statute, under common law
or otherwise and including without limitation (a) any right of subrogation,
reimbursement or

                                      H-5
<PAGE>

indemnification that such Guarantor now has or may hereafter have against the
Supplier, (b) any right to enforce, or to participate in, any claim, right or
remedy that the Beneficiary now has or may hereafter have against the Supplier,
and (c) any benefit of, and any right to participate in, any collateral or
security hereafter held by the Beneficiary. Each Guarantor further agrees that,
to the extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement and indemnification as set forth herein is found by a
court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Guarantor may have
against the Supplier or against any collateral or security shall be junior and
subordinate to any rights the Beneficiary may have against Supplier, to all
right, title and interest the Beneficiary may have in any such collateral or
security, and to any right the Beneficiary may have against such other
guarantor.

     8.  Representations and Warranties of Guarantor. Each Guarantor represents
and warrants to NPC as follows:

     (a) it is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation. Such Guarantor has the
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.

     (b) it has the corporate power and authority to execute and deliver this
Guarantee and to consummate the transactions contemplated hereby. The execution
and delivery of this Guarantee and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of such Guarantor, and no other corporate proceedings on the part of
such Guarantor, including the approval of its shareholders, are necessary to
authorize this Guarantee or to consummate the transactions so contemplated. This
Guarantee has been duly and validly executed and delivered by such Guarantor and
constitutes a valid and binding agreement of such Guarantor, enforceable against
such Guarantor in accordance with its terms.

     (c) There are no legal or arbitral proceedings by or before any
governmental or regulatory authority or agency, now pending or (to such
Guarantor's knowledge) threatened against such Guarantor or its subsidiaries
that could reasonably be expected to have a material adverse effect on the
consolidated financial condition, operations or business taken as a whole of it
and its subsidiaries, except as set forth in periodic filings by such Guarantor
with the Securities and Exchange Commission.

     (d) The representations and warranties made herein will remain true until
such Guarantor has fulfilled its obligations to pay in full the Guaranteed
Obligations.

     9.  Set Off. In addition to any other rights the Beneficiary may have under
law or in equity, if any amount shall at any time be due and owing by either
Guarantor to the Beneficiary under this Guarantee, the Beneficiary is authorized
at any time or from time to time, without notice (any such notice being
expressly waived), to set off and to appropriate and to apply any indebtedness
of the Beneficiary owing to such Guarantor and any other property of such

                                      H-6
<PAGE>

Guarantor held by the Beneficiary to or for the credit or the account of such
Guarantor against and on account of the Guarantied Obligations and liabilities
of such Guarantor to the Beneficiary under this Guarantee.

     10. Disputes. Any action, claim or dispute arising out of or relating to
this Guarantee (any such action, claim or dispute, a "Dispute") shall be
submitted in writing to the other Party. In the event the Guarantors and NPC are
unable to resolve the Dispute satisfactorily within thirty (30) days from the
receipt of notice of the Dispute, either the Guarantors or NPC may initiate
arbitration through the serving and filing of a demand for arbitration. The
Guarantors and NPC expressly agree that such arbitration shall be the exclusive
means to further resolve any Dispute and hereby irrevocably waive their right to
a jury trial with respect to any Dispute, provided that at any time a request
made for provisional remedies requesting preservation of respective rights and
obligations under the Guarantee may be resolved by a court of law located in the
County of the principal place of business of NPC. Arbitration shall be conducted
in accordance with Sections 13.4, 13.5, 13.6, 13.7, and 13.8 of the TPPA.

     11. Amendments and Waivers. No amendment, modification, termination or
waiver of any provision of this Guarantee, and no consent to any departure by
either Guarantor therefrom, shall in any event be effective without the written
concurrence of NPC and, in the case of any such amendment or modification,
either Guarantor. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.

     12. Miscellaneous. It is not necessary for Beneficiary to inquire into the
capacity or powers of either Guarantor or Supplier or the officers, directors or
any agents acting or purporting to act on behalf of any of them.

     The rights, powers and remedies given to Beneficiary by this Guarantee are
cumulative and shall be in addition to and independent of all rights, powers and
remedies given to Beneficiary by virtue of any statute or rule of law or in the
TPPA. Any forbearance or failure to exercise, and any delay by Beneficiary in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.

     In case any provision in or obligation under this Guarantee shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

     This Guarantee shall inure to the benefit of Beneficiary and its respective
successors and assigns.

     13. Notices. All notices, requests, demands, waivers, consents and other
communications hereunder shall be in writing, shall be delivered either in
person, by telegraphic, facsimile or other electronic means, by overnight air
courier or by mail, and shall be deemed to have been duly given and to have
become effective (a) upon receipt if delivered in person or by telegraphic,
facsimile or other electronic means, (b) one (1) business day after having been

                                      H-7
<PAGE>

delivered to an air courier for overnight delivery or (c) three (3) business
days after having been deposited in the U.S. mails as certified or registered
mail, return receipt requested, all fees prepaid, directed to the parties at the
following addresses:

     If to Guarantors, addressed to:  David Lloyd, Esq.
                                      NRG Energy, Inc.
                                      Symphony Towers
                                      Suite 2740
                                      750 "B" Street
                                      San Diego, CA 92101-8129
                                      Facsimile: (619) 615-7663

                                      Alisa B. Johnson, Esq.
                                      Dynegy Holdings Inc.
                                      1000 Louisiana Street, Suite 5800
                                      Houston, TX 77002
                                      Facsimile:(713) 767-8508

             with copies to:          William H. Holmes, Esq.
                                      Stoel Rives LLP
                                      900 SW Fifth Avenue
                                      Suite 2300
                                      Portland, OR 97204-1268
                                      Facsimile: 503-220-2480

        If to NPC, addressed to:      William E. Peterson
                                      Nevada Power Company
                                      6100 Neil Road
                                      Reno, Nevada 89511
                                      Facsimile: (775) 834-5959

     IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed
and delivered by its officers thereunto duly authorized as of the date first
written above.

NRG ENERGY, INC.                               DYNEGY HOLDINGS INC.

________________________________        __________________________________
By:    Craig A. Mataczynski             By:    __________________
Title: President                        Title: __________________
Address: 901 Marquette Ave., Suite 2300 Address: 1000 Louisiana St., Suite 5800
         Minneapolis, MN 55402                   Houston, TX 77002

                                      H-8
<PAGE>

                                   EXHIBIT I
                           COMPANY OBSERVED HOLIDAYS

         New Year's Day                       January 1/st/
         Martin Luther King's Day             Third Monday in January
         President's Day                      Third Monday in February
         Memorial Day (observed)              Last Monday in May
         Independence Day                     July 4/th/
         Labor Day                            First Monday in September
         Veteran's Day                        November 11/th/
         Thanksgiving Day                     Fourth Thursday in November
         Thanksgiving Friday                  Friday after Thanksgiving
         Christmas Eve                        December 24/th/
         Christmas Day                        December 25/th/

Holidays falling on Saturday will be observed on the preceding Friday and those
falling on Sunday will be observed on the following Monday.

                                      I-1
<PAGE>

                                   EXHIBIT J

                                 CLARK BUNDLE

                          ADJUSTMENTS TO TPPA AMOUNT

<TABLE>
<CAPTION>
                              Monthly                                             Monthly
              Month          Adjustment                       Month              Adjustment
            ----------------------------                    ---------------------------------
            <S>              <C>                             <C>                 <C>
                Mar-01              2.9%                        Mar-02                   2.3%
                Apr-01              3.3%                        Apr-02                   2.8%
                May-01              4.3%                        May-02                   3.6%
                Jun-01              5.1%                        Jun-02                   4.2%
                Jul-01             11.7%                        Jul-02                   9.5%
                Aug-01             11.5%                        Aug-02                   8.4%
                Sep-01              9.0%                        Sep-02                   6.6%
                Oct-01              3.2%                        Oct-02                   2.5%
                Nov-01              2.9%                        Nov-02                   2.1%
                Dec-01              3.3%                        Dec-02                   2.4%
                Jan-02              2.5%                        Jan-03                   2.2%
                Feb-02              2.1%                        Feb-03                   2.1%
</TABLE>

    Example 1 - Effective Date of Agreement is April 15, 2001
    ---------------------------------------------------------

    A.    TPPA Amount:                              $15,000,000

                             B                    C                   D
                          Monthly             Applicable          Applicable
         Month          Adjustment            Portion *           Adjustment
    ------------------------------------------------------------------------
                                                                   (B x C)
              Apr-01              3.3%                    50.0%         1.7%
              May-01              4.3%                   100.0%         4.3%
    ------------------------------------------------------------------------
         Total                                                          6.0%

<TABLE>
    <S>                                                           <C>                     <C>
    E.  Total of Monthly Applicable Adjustments                                                   6.0%
    F   Adjusted TPPA Amount                                      (A x (1+D))             $15,900,000
    =================================================================================================
</TABLE>

    Example 2 - Effective Date of Agreement is September 15, 2001
    -------------------------------------------------------------

    G.    TPPA Amount:                              $15,000,000

                             H                    I                   J
                          Monthly             Applicable          Applicable
         Month          Adjustment            Portion *           Adjustment
    ------------------------------------------------------------------------

                                      J-1
<PAGE>

                                   EXHIBIT J

                                 CLARK BUNDLE

                          ADJUSTMENTS TO TPPA AMOUNT
<TABLE>
<CAPTION>
                                                                   (H x I)
    <S>                           <C>                    <C>             <C>                     <C>
              Jun-01              5.1%                   100.0%           5.1%

              Jul-01             11.7%                   100.0%          11.7%

              Aug-01             11.5%                   100.0%          11.5%

              Sep-01              9.0%                    50.0%           4.5%
    -------------------------------------------------------------------------
         Total                                                           32.8%

    K.  Total of Monthly Applicable Adjustments                                                         32.8%

    L   Adjusted TPPA Amount                                     (G x (1-K))                     $10,080,000
    ========================================================================================================
</TABLE>

    Example 3 - Termination Date of December 31, 2002
    -------------------------------------------------

    M.    TPPA Amount:                              $15,000,000

<TABLE>
<CAPTION>
                             N                    O                   P
                          Monthly             Applicable          Applicable
         Month          Adjustment            Portion **          Adjustment
    ----------------------------------------------------------------------------
         <S>            <C>                   <C>                 <C>                               <C>
                                                                  (N x O)
              Jan-03              2.2%                   100.0%           2.2%
              Feb-03              2.1%                   100.0%           2.1%
    ----------------------------------------------------------------------------
         Total                                                            4.3%

    Q.  Total of Monthly Applicable Adjustments                                                          4.3%
    R   Payment Amount                                             (M x Q)                          $645,000
    ========================================================================================================
</TABLE>

    *   The applicable portion of the month is the number of days in the month
    during which deliveries of energy from Supplier to Buyer were made divided
    by the number of days in the month.

    **  The applicable portion of the month is the number of days in the month
    during which deliveries of energy from Supplier to Buyer would have been
    made divided by the number of days in the month.

                                      J-2
<PAGE>

                                   EXHIBIT K
                                 CLARK BUNDLE
                      ADJUSTMENTS TO MINIMUM ANNUAL TAKE

<TABLE>
<CAPTION>
        A                   B                  C                D                  E                F
                       Base Number        Base Energy       Sales per       Current Number   Adjusted Energy
     Class *           of Customers       Sales (MWh)     Customer (MWh)     of Customers      Sales (MWh)
----------------------------------------------------------------------------------------------------------------------
                                                             (C / B)                            (D x E) **
<S>                     <C>               <C>             <C>               <C>              <C>
Residential                      475,000      5,800,000            12           470,000           5,738,947
Commercial                        65,000      2,800,000            43            60,000           2,584,615
Industrial                         1,000      4,900,000                             800           3,600,000
Street Lighting                        5        130,000                               5             130,000
Other Retail                          50        600,000                              50             600,000
Wholesale                              5        850,000                               5             850,000
--------------------------------------------------------------------------------------------------------------------
                                 541,060     15,080,000                         530,860          13,503,563

G.  Adjustment to Minimum Annual Take                                      (F / C)                    89.55%
H.  Minimum Annual Take from Exhibit A (MWh)                                                         40,000
I.  Revised Minimum Annual Take (MWh)                                      (G x H)                   35,820

<CAPTION>
        J                   K
  Month During       Applicable Min.
  Contract Year     Annual Take (MWh)
-----------------------------------------
<S>                 <C>
        1                        40,000
        2                        40,000
        3                        40,000
        4                        40,000
        5                        35,820
        6                        35,820
        7                        35,820
        8                        34,000
        9                        34,000
       10                        32,000
       11                        32,000
       12                        32,000
-----------------------------------------
      Total                     431,460

L.  Minimum Take for Contract Year (MWh)                             (Total of K / 12)           35,955
</TABLE>

*       As reported on Buyer's FERC Form 1
**      Adjusted Energy Sales for the remaining Industrial, Street Lighting,
        Other Retail, and Wholesale customers will be based upon actual sales
        during the base period.

                                      K-1
<PAGE>

                                    EXHIBIT L
                                  CLARK BUNDLE
                    ENERGY APPLICABLE TO MINIMUM ANNUAL TAKE

<TABLE>
<CAPTION>
    A              B                C                D               E *               F              G **
 Dispatch       Supply          Delivered        Permitted          Force         Replacement      Applicable
   Hour      Amount (MWh)     Energy (MWh)     Derating(MWh)     Majeure(MWh)     Energy(MWh)     Energy(MWh)
----------------------------------------------------------------------------------------------------------------
                                                                                                   (C+D+E+F)
<S>          <C>              <C>              <C>               <C>              <C>             <C>
         1           687             687                                                                687
         2           687             687                                                                687
         3           687             687                                                                687
         4           687             687                                                                687
         5           687             687                                                                687
         6           687             667                20                                              687
         7           687             667                20                                              687
         8           687             667                                                  20            687
         9           687             687                                                                687
        10           687             687                                                                687
        11           687             687                                                                687
        12           687             687                                                                687
        13           687               0                                687                             687
        14           687               0                                687                             687
        15           687               0                                687                             687
        16           687               0                                687                             687
        17           687             637                                                  30            667
        18           687             687                                                                687
        19           687             687                                                                687
        20           687             687                                                                687
        21           687             687                                                                687
        22           687             687                                                                687
        23           687             687                                                                687
        24           657             657                                                                657
        25           637             637                                                                637
        26           607             607                                                                607
        27           637             607                30                                              637
        28           657             657                                                                657
        29           687             687                                                                687
        30           687             687                                                                687
        31           687             687                                                                687
        32           687             687                                                                687
        33           687             687                                                                687
        34           687             687                                                                687
        35           687             687                                                                687
        36           687             687                                                                687
----------------------------------------------------------------------------------------------------------------
</TABLE>

                                      K-2
<PAGE>

                                    EXHIBIT L
                                  CLARK BUNDLE
                    ENERGY APPLICABLE TO MINIMUM ANNUAL TAKE

<TABLE>
     <S>          <C>             <C>                   <C>           <C>                 <C>        <C>
     total        24,492          21,604                70            2,748               50         24,472
</TABLE>

*       Includes energy excused because of Supplier's and Buyer's events of
        Force Majeure
**      G cannot be greater than B

                                      L-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}]]