Document:

Exhibit 10.3.42

                AMENDMENT NO. 1 TO AGREEMENT ADDRESSING RENEWABLE
                -------------------------------------------------

                        ENERGY PRICING AND PAYMENT ISSUES
                        ---------------------------------

                                     between

                            HEBER GEOTHERMAL COMPANY

                                  QFID No.3001

                                       and

                       SOUTHERN CALIFORNIA EDISON COMPANY

1.   PARTIES.

     The Parties to this Amendment No. 1 ("Amendment") to the Agreement
     Addressing Renewable Energy Pricing and Payment Issues ("Agreement") are
     Heber Geothermal Company ("SELLER"), a California partnership, and Southern
     California Edison Company ("EDISON"), a California corporation. EDISON and
     SELLER are hereinafter sometimes referred to individually as a "Party" and
     jointly as the "Parties."

2.   RECITALS.

     This Amendment to the Agreement is entered into between the Parties with
     reference to the following facts:

2.1  On August 26, 1983, SELLER'S predecessor and EDISON executed a power
     purchase agreement (the "Contract"), which establishes, among other things,
     the terms and conditions pursuant to which EDISON purchases electric power
     from SELLER and SELLER sells electric power to EDISON.

2.2  On or about August 26, 1983, EDISON consented to an assignment of the
     Contract from SELLER'S predecessor to SELLER and such assignment was made.

2.3  On or about June 19, 2001, EDISON and SELLER entered into the Agreement.

2.4  On or about October 2, 2001, EDISON and the California Public Utilities
     Commission ("Commission") entered into a settlement agreement (the "Rate
     Doctrine Settlement Agreement") pursuant to which EDISON and the Commission
     agreed to settle certain litigation pending in the United States District
     Court for the Central District of California, entitled "Southern California
     Edison Company v. Loretta M. Lynch et al.," USDC Case No. 00-12056-RSWL
     (Mcx) (the "Federal Litigation").

2.5  On or about October 5, 2001, the Court in the Federal Litigation approved
     the Rate Doctrine Settlement Agreement and entered judgment for EDISON
     against the Commission (the "Judgement") in accordance with the terms of
     the Rate Doctrine Settlement Agreement.

2.6  The Parties desire to amend the Agreement in order to account for the
     foregoing developments and circumstances.

3.   AGREEMENT

     In consideration of promises, mutual covenants and agreements hereinafter
     set forth, and for other good and valuable consideration, as set forth
     herein, the Parties agree to amend the Agreement as follows:

3.1  In Section 3.2.1 of the Agreement, replace "Section 3.2.5" with "Section
     3.2.4."

3.2  Section 3.2.3 of the Agreement is hereby replaced, in its entirety, with
     the following revised Section 3.2.3:

     "3.2.3 PARTIAL PAYMENTS OF THE STIPULATED AMOUNT.

     "3.2.3.1 On the Initial Interest Payment Date, EDISON shall also pay to
     SELLER ten percent (10%) of the Stipulated Amount (the "Initial Partial
     Payment").

     "3.2.3.2 Except as provided in Section 3.2.3.3, EDISON shall not be
     required to make any partial payments of the Stipulated Amount other than
     the Initial Partial Payment; provided, however, that nothing herein shall
     preclude EDISON from, at any time, electing to make partial payments of the
     Stipulated Amount that are in addition to those required under Section
     3.2.3.1, and those, if any, made pursuant to Section 3.2.3.3.

     "3.2.3.3 During the Partial Payment Period, as defined below, EDISON shall
     make a further partial payment or payments, as applicable, of the
     Stipulated Amount to SELLER if (i) Commission Approval, as defined in
     Section 4.1.1 of Amendment No. 1 to this Agreement (hereinafter, the
     "Amendment") has been either obtained or waived by EDISON, and (ii) EDISON
     makes a payment of Specified Indebtedness (as defined in Schedule I to the
     Amendment) that, together with all other payments, if any, of Specified
     Indebtedness during the Partial Payment Period, exceeds $100 million (the
     "Partial Payment Threshold"). EDISON shall make any partial payment of the
     Stipulated Amount required to be made to SELLER under this Section 3.2.3.3
     within five (5) business days after the later of (a) if Commission Approval
     of the Amendment has already been obtained or waived, the date on which any
     payment of Specified Indebtedness is made that causes the Partial Payment
     Threshold to be exceeded or (b) if a payment of Specified Indebtedness that
     has caused the Partial Payment Threshold to be exceeded has previously
     occurred, the date on which Commission Approval of the Amendment has been
     obtained or waived by EDISON. The amount of any payment required to be made
     to SELLER as specified above in this Section 3.2.3.3 shall be calculated by
     (x) dividing the aggregate amount of the payments of Specified Indebtedness
     made by EDISON from the commencement of the Partial Payment Period through
     the date on which such aggregate payments of Specified Indebtedness have
     caused the Partial Payment Threshold to be exceeded by the total amount of
     the Specified Indebtedness shown on Schedule I to Amendment No.1 to this
     Agreement, and (y) multiplying the Stipulated Amount applicable to SELLER
     by the ratio derived by the calculation in (x) above.

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     Thereafter, should EDISON continue to make a payments of Specified
     Indebtedness through the balance of the Partial Payment Period, EDISON
     shall be required to make corresponding, additional partial payments of the
     Stipulated Amount to SELLER as provided for this Section 3.2.3.3 except
     that in calculating the required amount of such additional partial
     payments, if any, and in determining the due date for payment of such
     additional partial payments, EDISON shall not be required to take into
     account any prior payments of Specified Indebtedness that were previously
     taken into account in calculating any previous partial payment to SELLER
     under this Section 3.2.3.3. Accordingly, for the purpose of determining the
     amount of any additional partial payment determined to be due SELLER under
     this Section 3.2.3.3, the ratio defined in (x) above shall be calculated by
     dividing the aggregate payments of Specified Indebtedness that were made
     subsequent to the payments that were used in calculating all previous
     partial payments to SELLER under this Section 3.2.3.3 and which have again
     caused the Partial Payment Threshold to be exceeded by the total amount of
     Specified Indebtedness shown on Schedule I. The "Partial Payment Period" is
     the period commencing on December 1, 2001 and ending on the earlier of (A)
     the Final Payment Date, as defined in Section 3.2.4 of this Agreement, or
     (B) September 30, 2002. In no event shall the payments made to SELLER
     pursuant to this Section 3.2.3.3 and Section 3.2.4 of this Agreement, taken
     together, exceed 100% of the Stipulated Amount.

     "3.2.3.4 After the date hereof, EDISON shall not make any partial payments
     to one "class of qualifying facility," as defined below, without making an
     equivalent (by percentage of the Stipulated Amount) partial payment to each
     member of the other "class of qualifying facility" that is a party to an
     agreement and amendment with EDISON that is similar to the Agreement and
     the Amendment. For the purpose of implementing this Section 3.2.3.4, the
     following shall constitute a "class of qualifying facility": (i) the class
     of qualifying facilities under contract with EDISON that use natural gas as
     their primary fuel source; (ii) the class of qualifying facilities under
     contract with EDISON that do not use natural gas as their primary fuel
     source."

3.3  Section 3.2.4 of the Agreement is hereby replaced in its entirety, with the
     following revised Section 3.2.4:

     "3.2.4 FINAL PAYMENT.

     "The Final Payment Amount, as defined below, shall become due and payable
     by EDISON to SELLER on the Final Payment Date; provided, however, that
     EDISON shall be permitted a grace period of five (5) business days
     following the Final Payment Date to calculate the Final Payment Amount,
     process the Final Payment, and wire-transfer the Final Payment to SELLER.
     The "Final Payment Amount" is the amount, calculated on the Final Payment
     Date, as defined herein, that is equal to (i) the Stipulated Amount; (ii)
     plus all accrued but unpaid Interest (if any) pursuant to Section 3.2.2
     calculated through and including the date on which the Final Payment Amount
     is actually wire-transferred to SELLER; (iii) less all partial payments of
     the Stipulated Amount made by EDISON to SELLER pursuant to Section 3.2.3.1,
     Section 3.2.3.3 or otherwise. The "Final Payment

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     Date" means the earliest of (a) the date on which EDISON makes one or more
     payments of the Specified Indebtedness during the Partial Payment Period,
     as defined in Section 3.2.3.3, which together with all previous payments of
     Specified Indebtedness during the Partial Payment Period, causes the total
     amount of Specified Indebtedness paid during the Partial Payment Period to
     equal or exceed $3 billion; (b) the date on which EDISON makes payments
     and/or restructures the obligations (other than the $1.65 billion of bank
     indebtedness) constituting the Specified Indebtedness such that Edison is
     no longer in arrears or in a condition of default with respect to 80% or
     more of the obligations (other than the $1.65 billion of bank indebtedness)
     constituting the Specified Indebtedness; or (c) the date on which EDISON
     first obtains funds in an aggregate amount of $600 million or greater from
     any financing after the commencement of the Partial Payment Period, as
     defined in Section 3.2.3.3. Notwithstanding the foregoing, nothing in this
     Section 3.2.4 shall be construed to require EDISON to make the Final
     Payment before Commission Approval, as defined in Section 4.1.1 of the
     Amendment, has been either obtained or waived by EDISON."

3.4  Section 3.2.5 of the Agreement is hereby deleted in its entirety.

3.5  The definition of "Standstill Period" contained in Section 3.3.1 of the
     Agreement is hereby deleted in its entirety, and replaced with the
     following revised definition:

     "3.3.1 STANDSTILL.

     ""Standstill Period," as used herein, means the period commencing with the
     date on which both the Initial Interest Payment and Initial Partial Payment
     have been made and ending on the earliest of the following dates: (i)
     default by EDISON under any of the payment provisions contemplated by this
     Agreement (as amended by the Amendment) or the Contract with respect to
     payments for energy and capacity delivered after March 26, 2001 under the
     Contract; (ii) the fifth business day after Final Payment Date if EDISON
     pays the Final Payment Amount; (iii) the date on which EDISON files a
     petition for protection under the bankruptcy laws or an involuntary
     petition for relief in bankruptcy is filed against EDISON and an order for
     relief is entered with respect to such petition; (iv) September 30, 2002 at
     11:59 p.m. Notwithstanding the foregoing, nothing in this Section 3.3.1
     shall prohibit EDISON from pursuing or participating in judicial and/or
     regulatory proceedings pertaining to any other qualifying facility that has
     not executed this form of Agreement or another form of agreement providing
     for forbearance of claims against EDISON."

3.6  Section 3.4.1 of the Agreement is hereby replaced, in its entirety, with
     the following revised Section 3.4.1:

     "3.4.1 INTERIM ENERGY PRICE.

     "Unless otherwise established in the Contract, for the period (herein, the
     "Interim Period") commencing with the date on which this Agreement has been
     executed by the Parties and ending on the last minute of April 30, 2002,
     the SRAC upon which SELLER's energy payment is calculated shall be
     determined in accordance

                                       4

     with the SRAC formula approved by the Commission in D.96-12-028, as
     modified by D.01-03-067 (hereafter referred to as the "Monthly SRAC"),
     which formula, for purposes of this Agreement, shall not be subject to
     further change by the Commission, by any other regulatory authority, or by
     any court with jurisdiction in the matter; provided, however, that, in lieu
     of payments calculated pursuant to the SRAC formula described in the
     preceding sentence, SELLER may, for energy deliveries commencing on the
     first day of the next calendar month following the date that Amendment No.
     1 to this Agreement has been executed by the Parties, but no earlier than
     December 1, 2001, and for the balance of the Interim Period, elect to
     receive an alternative fixed price of $0.0325 per kWh (the "Alternative
     Interim Energy Price") for energy delivered by SELLER to EDISON. The
     Alternative Interim Energy Price shall be weight-adjusted by the
     Time-of-Delivery ("TOD") factors set forth in EDISON'S Time-of-Use rate
     schedule "TOU-8." SELLER hereby elects to be paid according to the
     following method during the balance of the Interim Period in accordance
     with this section 3.4.1:

     [_]  Alternative Interim Energy Price

     [X]  Monthly SRAC

     (check one of the above).

     "If SELLER elects to receive the Alternative Interim Energy Price, and
     Amendment No. 1 to this Agreement is terminated pursuant to Section 4.13 of
     such Amendment as a result of Commission Approval not having been timely
     obtained or waived, then SELLER shall not be paid for energy deliveries at
     the Alternative Interim Energy Price established above and shall instead be
     paid for energy deliveries during the Interim Period in accordance with the
     Monthly SRAC. If such termination occurs, the net difference in payments
     made by EDISON to SELLER calculated, on a monthly basis, by subtracting the
     payments that were made by EDISON for the month in question based on the
     Alternative Interim Energy Price from the payments that SELLER would have
     received during the same month if such payments had been based on Monthly
     SRAC, plus interest (calculated in the manner described below in this
     section), shall, if such net monthly net difference is positive, be added
     to the first payment due SELLER following termination of Amendment No. 1 to
     this Agreement, and if such monthly net difference is negative, deducted
     from such payment (and from any subsequent payments as may be necessary to
     fully recoup any excess payments made at the Alternative Interim Energy
     Price rate). Interest on the net difference shall be calculated at the
     Federal Reserve Board three-month prime commercial paper rate as to each
     monthly payment made based on the Alternative Interim Energy Price
     commencing on the day on which such payment was mailed and ending on the
     date on which any statement reflecting the adjustment described in the
     preceding sentence is mailed."

3.7  Sections 3.4.2 and 3.4.3 of the Agreement are hereby replaced, in their
     entirety, with the following revised Sections 3.4.2 and 3.4.3:

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     "3.4.2 FIXED ENERGY PRICE.

     "Notwithstanding any provision of the Contract to the Contrary, commencing
     on the first minute of May 1, 2002, and for a period of five (5) years
     thereafter (such five-year period being referred to herein as the "Fixed
     Rate Period"), SELLER hereby elects that the SRAC for energy delivered to
     EDISON by SELLER, if SELLER's Contract provides for payment for energy
     based on SRAC, shall be a "fixed" price of 5.37 cents/kWh (the "Fixed
     Rate"), in lieu of the Commission-Approved SRAC Methodology; provided,
     however, that if the Contract terminates in accordance with its own terms,
     or for any other lawful reason, prior to the end of the Fixed Rate Period,
     then the Fixed Rate Period shall likewise terminate; and provided further,
     however, that if the Contract concerns a solar thermal facility that
     augments its energy input with fossil fuel, and such SELLER's Contract
     provides for payment for energy based on SRAC, EDISON shall pay for 75% of
     the energy delivered to EDISON by such SELLER during the Fixed Rate Period
     at the Fixed Rate and 25% of the energy delivered to EDISON by such SELLER
     at the rate described in Exhibit 3.4.2 to this Agreement. During the Fixed
     Rate Period, the Fixed Rate shall be weight-adjusted by Time-of-Delivery
     ("TOD") factors set forth in EDISON's Time-of-Use rate schedule "TOU-8." In
     the event that SELLER's Contract is still in the forecast energy payment
     period as of the Effective Date of this Agreement and provided that such
     forecast energy payment period expires no later than March 1, 2002, the
     rate for energy delivered by SELLER to EDISON shall be (i) the applicable
     forecast rate provided in the Contract through the conclusion of the
     forecast energy payment period; (ii) from the conclusion of the forecast
     energy payment period through the last minute of April 30, 2002, Monthly
     SRAC, or, if elected by SELLER at the time it executes this Amendment, the
     Alternative Interim Energy Price; and (iii) during the Fixed Rate Period,
     the Fixed Rate. Any SELLER not paid the Fixed Rate in the place of SRAC
     under one of the circumstances described in this Section 3.4.2 shall be
     paid for its energy deliveries in accordance with the then-current
     Commission-approved SRAC and, if SELLER's Contract provides for a rate
     other than the Commission-approved SRAC, then at such other rate as
     specified in SELLER's Contract.

     "3.4.3 On the first day after the last day of the Fixed Rate Period, the
     SRAC price payable to SELLER if it has received the Fixed Rate as provided
     above shall, for the remaining term of the Contract; be established in
     accordance with the Commission-approved SRAC methodology then in effect and
     as may thereafter be updated by the Commission from time to time,
     including, but not limited to, the TOD factors and energy loss adjustment
     factor."

3.8  Section 3.5 of the Agreement is hereby replaced, in its entirety, with the
     following revised Section 3.5:

     "3.5 ENERGY LOSS ADJUSTMENT FACTORS.

          "Unless otherwise specifically provided in the Contract, during the
     Fixed Rate Period, the energy loss adjustment factor ("ELAF") applicable to
     energy

                                        6

     deliveries to EDISON from SELLER will be 1.0. During the Interim Period,
     the ELAF applicable to energy deliveries from SELLER to EDISON for which
     EDISON pays SELLER Monthly SRAC shall be determined in accordance with the
     methodology approved by the Commission in D.01-01-007, and, for purposes
     of this Agreement, shall not be subject to further change by the
     Commission, by any other regulatory authority, or by any court with
     jurisdiction in the matter during the Interim Period; provided, however,
     that if SELLER elects to be paid the Alternative Interim Energy Price
     pursuant to Section 3.4.1, then the ELAF applicable to energy deliveries
     made by SELLER to EDISON and paid for at such Alternative Interim Energy
     Price shall be 1.0."

3.9  Section 3.6 of the Agreement is hereby replaced, in its entirety, with the
     following revised Section 3.6:

     "3.6 MUTUAL RELEASES; DISMISSAL OF LITIGATION.

     "Effective upon and subject to EDISON paying the Final Payment Amount to
     SELLER:

          "(a) The Parties release and discharge each other and their respective
     affiliates, parents, officers, directors, employees, agents, insurers,
     attorneys and assigns from any and all claims, debts, liens, causes of
     action or damages of any kind whatsoever existing at any time on or before
     the date on which this Agreement has been executed by the Parties (or, in
     the case of claims, debts, etc., arising from EDISON's suspension of
     payments for energy and capacity delivered by SELLER during the period
     November 1, 2000 through March 26, 2001, existing at any time on or before
     the Final Payment Date), whether in law or in equity, whether known or
     unknown, arising from or related to either Party's performance or
     non-performance under the Contract; provided, however, that, except with
     respect to claims arising from or related to EDISON's suspension of
     payments as referenced above, nothing herein shall be deemed to release or
     waive any claim arising from or related to either Party's performance or
     non-performance under the Contract from and after the day following the
     date on which this Agreement has been executed by the Parties regardless of
     whether such performance or non-performance, insofar as it also existed
     before the date on which this Agreement has been executed by the Parties,
     is released pursuant to this Section 3.6 for such prior period.
     Notwithstanding the foregoing, nothing contained in this Agreement shall
     release any person or entity other than SELLER itself from any claims,
     causes of action, or rights EDISON may now have, or may obtain in the
     future, for illegal or otherwise actionable conduct that resulted in
     increases in the prices EDISON paid or was required to pay for electricity,
     natural gas, or both.

          "(b) As to claims that are released pursuant to this Section 3.6,
     SELLER and EDISON waive the application of California Civil Code Section
     1542, which provides: "A general release does not extend to claims which
     the creditor does not know or suspect to exist in his favor at the time of
     executing the release, which if known by him must have materially affected
     the settlement with the debtor."

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          "(c) The Parties shall promptly cause to be dismissed with prejudice
     all claims in the Litigation [if applicable] that would be barred by the
     foregoing mutual release."

3.10 Section 4.13 of the Agreement is hereby replaced, in its entirety, with the
     following revised Section 4.13:

     "4.13 TERMINATION.

     "Except as provided herein, this Agreement shall terminate automatically on
     September 30, 2002 at 11:59 p.m. if the Final Payment Amount, as defined in
     Section 3.2.4, has not yet been paid to SELLER. Notwithstanding the
     foregoing, the second sentence of Section 3.2.1 and the entirety of
     Sections 3.3.2, 3.3.3, 3.4.1, 3.4.2, 3.4.3, 3.5, 4.11 and 4.13 shall
     survive any termination of this Agreement (assuming that all conditions
     precedent to the effectiveness of such Sections, including, but not limited
     to, Commission Approval, have been satisfied)."

4.   OTHER TERMS AND CONDITIONS.

4.1  COMMISSION APPROVAL.

     4.1.1 With the exception of Sections 3.5 and 4.1.2 of this Amendment, this
     Amendment, or in the alternative, the form amendment upon which this
     Amendment is based if EDISON submits that form instead to the Commission,
     is subject to Commission Approval as to reasonableness for purposes of rate
     recovery by EDISON, and shall not become effective until Commission
     Approval has been obtained or waived by EDISON, as provided herein.
     "Commission Approval," as used in this Amendment, shall mean that the
     Commission has issued a final decision, no longer subject to appeal,
     approving this Amendment or the standardized form, as appropriate, without
     condition or modification unacceptable to the Parties and containing
     findings and conclusions confirming the reasonableness of this Amendment
     (or the standardized form) comparable to those pertaining to the Agreement
     set forth in D.01-06-015 and D.01-07-031, including, but not limited to,
     findings that EDISON's entry into this Amendment (or any amendment based
     substantially on the standardized form) are reasonable and prudent for all
     purposes, including, but not limited to, recovery of all payments made
     pursuant hereto in rates, subject only to review with respect to the
     reasonableness of EDISON's future administration of the Contract, the
     Agreement, and this Amendment. EDISON shall file with the Commission the
     appropriate request for approval of this Amendment or the standardized
     form, as appropriate, and seek such approval expeditiously. SELLER shall
     use reasonable efforts in cooperation with EDISON for the purpose of
     obtaining Commission Approval.

     4.1.2 During the period commencing on the date that this Amendment has been
     executed by each of the Parties and ending on the earliest of (i) March 1,
     2002 if Commission Approval has not then been obtained or waived by EDISON,
     (ii) the date, if any, on which the Commission issues a decision that
     expressly denies

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     Commission Approval or (iii) the expiration of the Standstill Period, as
     defined in Section 3.5 above, the Parties, and each of them, shall refrain
     from asserting any claim or demand against the other or from commencing any
     litigation or other proceeding against the other, including, but not
     limited to claims for declaratory relief, specific performance, and breach
     of contract, (a) concerning or arising from the issue of whether the "MOU
     Effective Date," as defined in Section 3.2.3 of the Agreement, has occurred
     and/or (b) which would be rendered moot upon the amending of the Agreement
     in accordance with this Amendment if Commission Approval of this Amendment
     is either timely obtained or waived within the period established in
     Section 4.13 below.

4.2  WAIVER OF COMMISSION APPROVAL.

     In its sole discretion, EDISON may waive Commission Approval as to all or
     any individual aspect of this Amendment requiring Commission Approval at
     any time by giving notice of such waiver in writing to SELLER.

4.3. SEMI-MONTHLY PAYMENTS WAIVER.

     Notwithstanding any provisions to the contrary in the Agreement concerning
     the timing or method of payments for energy and capacity delivered by
     SELLER to EDISON, the first payment due SELLER for energy and capacity
     delivered to EDISON after it pays the Final Payment Amount shall be paid in
     accordance with the payment provisions of the Contract or the Agreement, as
     applicable, and SELLER hereby waives, commencing with such first payment,
     any right that it might have pursuant to D.01-03-067 to receive
     accelerated or semi-monthly payments in lieu of monthly payments pursuant
     to the Contract.

4.4  EFFECT ON CONTRACT AND THE AGREEMENT.

     Except as expressly provided herein, all provisions of the Agreement and
     the Contract, as modified by the Agreement, including but not limited to
     the capacity payment provisions, shall remain in effect and unchanged and
     shall not be affected by the terms and conditions of this Amendment.
     Nothing herein shall be read to extend the term of the Contract.

4.5  NO WAIVER.

     None of the provisions of this Amendment, including this paragraph, shall
     be considered waived by either Party unless such waiver is given in
     writing. The failure of either Party to insist in any one or more instances
     upon strict performance of any of the provisions of this Amendment or to
     take advantage of any of its rights hereunder shall not be construed as a
     waiver of any such provisions or the relinquishment of any such rights for
     the future, but the same shall continue and remain in full force and
     effect.

4.6  FURTHER AGREEMENTS.

     This Amendment shall not be amended, changed, modified, abrogated or
     superseded by a subsequent agreement unless such subsequent agreement is in
     the form of a written instrument signed by the Parties.

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4.7  ENTIRE AGREEMENT.

     This Amendment, taken together with those provisions of the Agreement that
     have not been amended by this Amendment, constitutes the entire agreement
     of the Parties as to the matters set forth herein and in the Agreement, and
     supersedes any and all prior negotiations, correspondence, undertakings,
     and agreements between the Parties concerning the subject matter of this
     Amendment and Agreement.

4.8  SUCCESSORS AND ASSIGNS: NO PRIOR ASSIGNMENTS.

     This Amendment shall be binding upon and inure to the benefit of the
     Parties hereto and their respective successors and assigns. SELLER hereby
     warrants and represents that prior to its entry into this Amendment, it has
     not assigned or otherwise transferred, directly or indirectly, voluntarily,
     involuntarily by or operation of law, any rights, claims or causes of
     action it may have against EDISON, or any damages, liabilities, losses and
     costs that would be released pursuant to the Agreement upon the
     satisfaction of the conditions stated therein.

4.9  CONSTRUCTION.

     This Amendment is the result of negotiation and each Party has participated
     in the preparation of this Amendment. Accordingly, any rules of
     construction to the effect that an ambiguity is to be resolved against the
     drafting Party shall not be employed in the interpretation of this
     Amendment. Furthermore, the underlined headings used in this Agreement are
     for reference purposes only and do not themselves constitute any of the
     terms of this Amendment.

4.10 GOVERNING LAW.

     This Amendment shall be interpreted, governed, and construed under the laws
     of the State of California as if executed and to be performed wholly within
     the State of California.

4.11 NO PRECEDENT: USE IN LITIGATION.

     Each Party agrees that this Amendment arises from unique facts and
     circumstances and, as such, without limiting the effect of this Section
     4.11, various provisions of this Amendment, such as, but not limited to,
     the Fixed Rate, the Alternative Interim Energy Price, Energy Loss
     Adjustment Factors, and the Stipulated Amount, shall not be used as
     evidence, or the basis for disputing the validity or appropriateness of
     such values, rates or prices, or for determination of avoided costs before
     FERC, the Commission, or any court or other judicial or quasi-judicial
     body, and nothing herein may be used as an admission against any Party.
     Further, nothing herein shall constitute or be deemed an admission by
     either Party with respect to whether the conditions set forth in the
     Agreement that would obligate EDISON to make the Second Partial Payment or
     to pay the Final Payment Amount, as each of those terms is defined in the
     Agreement, have been satisfied, it being expressly understood that this
     Amendment is the result of negotiation and compromise and further that, in
     the event that Commission

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     Approval of this Amendment has not been either obtained or waived within
     the period of time specified in Section 4.1.2 of this Amendment, the
     Parties shall be restored to their respective positions vis-a-vis the
     interpretation of and performance under the Agreement without regard to
     this Amendment. Except as provided in Section 4.1.1 of this Amendment,
     neither Party will introduce or otherwise use this Amendment or any of its
     terms or conditions in any judicial or administrative proceeding or to
     influence any governmental action, other than for the purpose of enforcing
     the terms and conditions of this Amendment.

4.12 AUTHORIZED SIGNATURES: NOTICES.

     Each Party represents and warrants that the person who signs below on
     behalf of that Party has received all requisite authorizations required to
     execute this Amendment on behalf of such Party and to bind such Party to
     this Amendment. All notices given under this Amendment shall be in writing
     and shall be effective on the same day if delivered by personal delivery or
     facsimile transmission, one day after sending if delivered by overnight
     delivery service, or five days after sending if delivered by first class
     U.S. mail. Notices shall be directed to the individual or individuals who
     are designated to receive notices under the Contract.

4.13 TERMINATION.

     Except as provided herein, this Amendment shall terminate automatically one
     hundred twenty (120) days from the date on which this Amendment has been
     executed by the Parties if Commission Approval, as defined in Section 4.1.1
     of this Amendment, has not been obtained or waived by EDISON; otherwise,
     this Amendment shall terminate concurrently with the termination of the
     Agreement. Termination of this Amendment as the result of failure to obtain
     Commission Approval, as provided above, shall not itself cause the
     termination of the Agreement, which shall instead continue in accordance
     with its own terms as though this Amendment had not been entered into.
     Notwithstanding the foregoing, the provisions of this Amendment that are
     not subject to Commission Approval, the provisions in Section 3.6 providing
     for a payment adjustment in the event the Alternative Interim Energy Price
     is not approved by the Commission, and the entirety of Sections 4.11 and
     4.13 shall survive any termination of this Amendment.

                                       11

4.14 EFFECTIVE DATE; COUNTERPARTS.

     This Amendment shall be effective on the date has been executed by the duly
     authorized representatives of the Parties. This Amendment may be executed
     in one or more counterparts, each of which shall be deemed an original
     document and which together shall constitute a single instrument.

HEBER GEOTHERMAL COMPANY,
a California partnership

By: ERC Energy, Inc.                     ERC Energy II
a Delaware corporation,                  a Delaware corporation,
a General Partner                        a General Partner

By: /s/ Richard E. Dyer                  By: /s/ Richard E. Dyer
    ----------------------------------       -----------------------------------
Name: Richard E. Dyer, Jr.               Name: Richard E. Dyer, Jr.
Title: Vice President                    Title: Vice President
Date: November 30, 2001                  Date: November 30, 2001

SOUTHERN CALIFORNIA EDISON COMPANY,
a California corporation

By: /s/ Stephen E. Frank
    ----------------------------------
Stephen E. Frank
Chairman, President and Chief Executive Officer

Date: 11.30.01

                                       12

                                   SCHEDULE I

                             SPECIFIED INDEBTEDNESS

For purposes of Section 3.2.3.3 of this Agreement, as modified by Amendment No.
1 to this Agreement, the term "Specified Indebtedness" shall mean the
outstanding principal of the following obligations of EDISON:

--------------------------------------------------------------------------------
OBLIGATION                                            PRINCIPAL AMOUNT (APPROX.)
--------------------------------------------------------------------------------
Bank Credit Facilities                                            $1,650,000,000
--------------------------------------------------------------------------------
Overdue PX/ISO Obligations                                           940,000,000
--------------------------------------------------------------------------------
Defaulted Commercial Paper                                           531,000,000
--------------------------------------------------------------------------------
Defaulted Senior Unsecured Notes                                     400,000,000
--------------------------------------------------------------------------------
Overdue ESP Payments                                                 231,000,000
--------------------------------------------------------------------------------
Defaulted Preferred Stock Dividends                                   17,000,000
--------------------------------------------------------------------------------
                                                           Total: $3,769,000,000
--------------------------------------------------------------------------------

Specified Indebtedness does not include imbalance energy payments to the
California Department of Water Resources.

The principal amounts shown above are stated solely for the purpose of
determining if partial payments of the Stipulated Amount are to be made under
this Agreement and do not constitute an admission that any amounts are legally
owed to any party by Southern California Edison Company or its affiliates.Exhibit 10.3.43

                            ENERGY SERVICES AGREEMENT
                                     BETWEEN
                          IMPERIAL IRRIGATION DISTRICT
                                       AND
                                   ORMESA, LLC

1    PARTIES

     1.1  This Energy Services Agreement is entered into this 11th day of
          February, 2003, between Irrigation District ("IID"), an irrigation
          district organized under the Water Code of the State of California,
          and ORMESA, LLC ("ORMESA"), a Delaware limited liability company.

     1.2  IID and ORMESA are sometimes referred to in This Agreement
          individually as "Party" and collectively as "Parties".

2    RECITALS

     2.1  On March 8, 1999, IID and East Mesa Geothermal, LLC, ("EMG") entered
          into an Interim Distribution Service Agreement ("Interim Agreement")
          whereby EMG selected to self serve the electrical load of certain
          geothermal electric generating facilities located east of the City of
          Holtville, (as more particularly described herein) rather than
          purchasing such service from IID, as it had previously done. In place
          at that time were plant connection and transmission service agreements
          for IID to wheel the gross output of these facilities to various
          parties.

     2.2  On April 15, 2002, the previous owners of EMG transferred their
          interest in the above-described geothermal facilities to subsidiaries
          of Ormat Nevada Inc. which renamed EMG to ORMESA, and, as a result,
          ORMESA succeeded to East Mesa's rights, duties and obligations arising
          under the Interim Agreement, as well as the plant connection and
          transmission service agreements.

     2.3  IID and ORMESA now desire to replace the Interim Agreement with this
          Energy Service Agreement in order to redefine their relationship from
          and after The Effective Date (defined in Section 4.1, below), relating
          to the availability of certain IID facilities, and the furnishing of
          IID services to ORMESA's facilities. Further, IID and ORMESA desire to
          resolve certain disputes which arose between IID and EMG ("The
          Disputes"), regarding performance of and payment for activities of
          IID, in the one hand, and ORMESA and EMG, on the other, during the
          term of the Interim Agreement and to establish and define the terms of
          the settlement of The Disputes.

     2.4  To facilitate monitoring the activities of The Parties at the
          Facilities, contemplated in This Agreement, as well as the services
          provided pursuant to the plant connection and transmission service
          agreements, The Parties have agreed that a new, simplified metering
          scheme, as described in Exhibit A which will be installed at IID's
          Highline Substation. This equipment will become the master meter for
          the subject facilities.

                                                                               1

     2.5  Nothing in This Agreement affects the rights and obligations of IID
          and ORMESA created by the existing plant connection and transmission
          service agreements.

     2.6  The Interim Distribution Service Agreement is hereby extended to
          December 31, 2002. Thereafter, except as otherwise herein provided,
          this Energy Services Agreement shall become effective.

3    DEFINITIONS

     The words and terms used in This Agreement, when initially capitalized,
     whether in singular or plural, shall have the meanings specified:

     3.1  "Activities" All activities of The Parties at The Facilities,
          conducted pursuant to the terms of This Agreement or the Interim
          Agreement.

     3.2  "This Agreement" This Energy Service Agreement and all Exhibits
          attached hereto.

     3.3  "Authorized Representative" The representative of a Party designated
          in accordance with Section 12.

     3.4  "Capital Addition Costs" The cost of capital additions to, and
          replacements for components of the Distribution Facilities, at the
          actual cost incurred by IID, plus 10% to allow IID to provide services
          to the Facilities, as (i) required pursuant to generally accepted
          engineering and operating practices in the electric utility industry,
          (ii) used solely to provide services to the Facilities, and (iii)
          provided or contracted for pursuant to IID's standard practices;

     3.5  "Compromise Payment" Seven Hundred Twenty Four Thousand Dollars
          ($724,000), an amount established after negotiations between the
          Parties which, when paid to IID as herein required, shall resolve all
          issues relating to the Special Charge, Distribution Facilities Charge,
          Operation and Maintenance Charges (with the exception of the O & M
          Charges of Section 5.1.3.1, below), Standby Service and Ancillary
          Charges, and represent payment in full of all disputed and undisputed
          balances due IID, for these services relating to the Interim
          Agreement, projected through December 31, 2002, and the Consumed
          Energy Charges, through August 31, 2002.

     3.6  "Connection and Transmission Service Agreements" Agreements, titled,
          respectively, "Plant Connection Agreement" and "Transmission Service
          Agreement," (hereafter, respectively, "TSA" and "PCA") between IID and
          ORMESA to provide infrastructure to support IID's wheeling the gross
          output of The Facilities to Southern California Edison, as further
          described in Exhibit B to This Agreement.

     3.7  "Consumed Energy Charge" A charge, billed to and paid by ORMESA to
          IID, in accordance with IID's A-2 tariff rate, as specified in the
          PCA, for electricity provided by IID and consumed at the Facilities.

                                                                               2

     3.8  "Distribution Facilities" Existing IID substations (identified by IID
          as East Mesa 1, East Mesa 2, and East Mesa 3), distribution circuits,
          vaults, switches, breakers, fuses, relays, and other equipment owned
          by IID to exclusively serve the Loads.

     3.9  "Distribution Facilities Charge" The balance of the charge set forth
          in the Interim Agreement, in the amount of One Million Nine Hundred
          and Fifty Four Thousand Seven Hundred and Ninety Two Dollars
          ($1,954,792), payable in thirty (30) monthly installments of Sixty
          Five Thousand One Hundred and Sixty Dollars ($65,160), commencing on
          The Effective Date.

     3.10 "Facilities" The geothermal facilities known as ORMESA I (including IE
          and IH), ORMESA II, GEM 2, and GEM 3 located in the Holtviile area of
          Imperial County, California.

     3.11 "New Metering Installation" Any new metering equipment which may be
          required as a result of the circumstances described in Section 2.4,
          above, approved by the Parties, the cost of which shall be borne by
          ORMESA.

     3.12 "Operation and Maintenance Charges" Charges for operation and
          maintenance costs incurred by IID prior to The Effective Date,
          calculated as an allocation to the direct labor and non-labor costs
          using standard factors determined reasonably by IID, which standard
          factors are applied generally for other IID activities and purposes.
          Overhead costs shall include, but not be limited to, costs such as
          employee benefits, general and administrative costs, engineering
          overhead, and purchasing and warehousing costs.

     3.13 "Parasitic Load" The electric demand required to be served at the
          Facilities.

     3.14 "Release" The document entitled "Mutual Release," attached hereto as
          Exhibit C.

     3.15 "Uncontrollable Force" Any cause beyond the control of a Party
          including, but not restricted to, failure of or threat of failure of a
          Party's facilities which have been constructed, operated, and
          maintained in accordance with generally - accepted engineering and
          operating practices in the electric utility industry; flood, drought,
          earthquake, tornado, storm, fire, pestilence, lightning, and other
          natural catastrophes; epidemic, war, riot, civil disturbance or
          disobedience, strike, labor dispute, labor or material shortage,
          sabotage, government priorities, and restraint by court order or
          public authority (whether valid or invalid); and inability of a Party
          to obtain or keep the necessary authorizations or approvals from any
          governmental agency or authority, which inability such Party could not
          reasonably have been expected to avoid and which by exercise of due
          diligence it has been unable to overcome.

     3.16 "Willful Action" Action which is knowingly or intentionally taken or
          not taken with conscious indifference to the consequences thereof or
          with intent that injury or damage would result or would probably
          result there from; which has been determined by final arbitration
          award or final judgment or judicial decree to be a material default
          under This Agreement and which occurs or continues beyond the time
          specified in such arbitration award or judgment or judicial decree for
          curing

                                                                               3

          such default or, if no time to cure is specified therein, occurs or
          continues thereafter beyond a reasonable time to cure such default; or
          which is knowingly or intentionally taken or not taken with the
          knowledge that does not include any act or failure to act which is
          merely involuntary, accidental, or negligent.

     The words and terms used in This Agreement, when initially capitalized,
     whether in singular or plural, that are not defined in This Agreement shall
     have the meanings specified in the Interim Agreement.

4    EFFECTIVE DATE, TERM OF AGREEMENT

     4.1  Effective Date The Effective Date of This Agreement ("The Effective
          Date") shall be January 1, 2003, unless ORMESA's compliance with the
          preconditions described in Sections 5.1.1, 5.1.2 and 13.1
          ("Preconditions") is excused by either the following circumstances:

          4.1.1 ORMESA is delayed in performing the Preconditions by the
                occurrence of an Uncontrollable Force; provided, however, that
                such excused delay shall not exceed fifteen (15) days after such
                occurrence, at which time ORMESA, within five (5) days, shall
                nonetheless perform said Preconditions; or

          4.1.2 The Parties have mutually agreed to extend the time for
                compliance.

     4.2  Termination of Interim Agreement On The Effective Date, the Interim
          Agreement shall terminate and be of no further force and effect. On
          The Effective Date, IID will notify ORMESA in writing its confirmation
          that This Agreement is in effect and the Interim Agreement has been
          terminated.

     4.3  Effect of Failure to Meet Deadlines Unless their performance has been
          excused, or, if excused, they have not been performed by the extended
          deadlines as described in Section 4.1 above, then This Agreement shall
          be of no force and effect, and, notwithstanding any provisions in This
          Agreement to the contrary, all Activities shall be governed by the
          terms and conditions of the Interim Agreement. In that event, the
          Interim Agreement shall remain in effect, without the necessity of
          further extensions, so long as IID provides the services to The
          Facilities.

     4.4  Term. The initial term of This Agreement shall commence on The
          Effective Date and terminate fifteen (15) calendar years thereafter.
          This Agreement may be extended by mutual agreement of the Parties.

5    OBLIGATIONS AND ENTITLEMENTS OF THE PARTIES

     5.1  Terms Relating to Payment

          5.1.1 ORMESA will make the Compromise Payment to IID, within five (5)
                business days following execution of This Agreement. Upon
                receipt of the Compromise Payment, IID will cancel and return to
                ORMESA the FPL Bond identified as a $500,000 Bond No. 23-46-15
                posted by GEM

                                                                               4

               Resources LLC on July 24, 2000. Thereafter, ORMESA will provide
               security for performance of This Agreement in accordance with
               IID's established policies relating to new commercial accounts.
               Such security shall not exceed more than 3 months' billing under
               This Agreement, and shall be in a form of a corporate guarantee
               of Ormat Funding Corp. (which owns 100% of Ormesa LLC) and reduce
               every year until elimination at the end of year 3.

         5.1.2 ORMESA will pay for the cost of the new metering scheme and
               capital improvement charges thereof (if any) prior to The
               Effective Date of This Agreement, if the cost has already been
               determined, unless the time for such payments has been mutually
               extended by the Parties.

         5.1.3 ORMESA will pay for the following services provided prior to The
               Effective Date, as billed, after completion of the services,
               within thirty (30) business days of receipt of IID's Invoice:

               5.1.3.1 Any O and M Charges attributable to O and M services
                       provided prior to The Effective Date, including, but not
                       limited to the charge for insulation cleaning Five
                       Thousand Eighty Three Dollars and Fifty One Cents
                       ($5,083.51), performed on October 22, 2002; and

               5.1.3.2 Charges incurred for energy provided by IID and consumed
                       in The Facilities; and

          5.1.4 After The Effective Date, IID will provide and ORMESA will pay:

               5.1.4.1 The Consumed Energy Charge;

               5.1.4.2 The remaining balance of the Facilities Distribution
                       Charge;

               5.1.4.3 All charges described in the TSA and PCA, provided,
                       however, that until June 1, 2003, in lieu of payment for
                       IID's services relating to frequency/regulation,
                       reactives/voltage support, reserves and imbalance
                       support, ORMESA will pay the sum of ten thousand dollars
                       ($10,000) per month; thereafter; ORMESA will pay for
                       actual consumption or allocation of costs for these
                       services, as provided in the TSA or PCA, as applicable
                       to all FACA participants.

               5.1.4.4 Capital Improvement Charges; and

     5.2  Special Charge Termination On The Effective Date, the Special Charge,
          Operation & Maintenance Charge and Ancillary Charge, as described in
          the Interim Agreement will terminate.

                                                                               5

6    OPERATING TERMS

     6.1  Compliance with Interruptions  Should there be an interruption as
          described in Section 6.3, ORMESA, immediately after being orally
          notified by IID, shall comply with directions given by IID's
          schedulers, dispatchers, or troubleshooters.

     6.2  Power Quality  The quality of the power delivered from the Facilities
          to the Loads, including but not limited to voltage, stability, and
          phase imbalance, shall be the sole responsibility of ORMESA.

     6.3  Interruptions  IID reserve the right to interrupt the distribution
          service provided hereunder if any of the conditions described in
          Sections 6.4 or 6.5 exists on the Distribution Facilities utilized to
          provide said service. The existence of the described conditions shall
          be as determined by IID in its sole judgment; provided that such
          determination shall be consistent with prudent operating procedures
          and with generally accepted engineering and operating practices in the
          electric utility industry. Should there be an interruption, as
          described, in Sections 6.4 or 6.5, IID shall employ reasonable efforts
          to expeditiously eliminate the cause and minimize the duration of such
          interruption.

     6.4  Danger to Life or Property  IID may interrupt the distribution service
          provided hereunder as necessary to avoid or alleviate danger to life
          or property. The operation of automated equipment designed to protect
          Distribution Facilities from damage may interrupt without warning the
          services provided hereunder.

     6.5  Work  IID may interrupt the services provided hereunder to the extent
          necessary to construct, install, maintain, repair, replace, remove,
          inspect, or investigate any part of the Distribution Facilities
          utilized to provide such service. IID shall coordinate with ORMESA
          such interruption to the extent practicable, and IID shall notify
          ORMESA of such interruption as far in advance as practicable, but in
          no event less than forty-eight (48) hours in advance of such
          interruption.

     6.6  Compliance With Applicable Operating Standards  At all times during
          the term, The Parties will abide by and comply with operating policies
          and procedures, established from time to time by the Western
          Electrical Coordinating Council ("WECC"), and, without limitation,
          good utility business practices.

7    TERMS REGARDING BILLING & PAYMENT

     7.1  Billing Procedure  IID shall render monthly bills to ORMESA for the
          services provided to Ormesa as described in Section 5.1.4. Bills shall
          be due and payable not later than twenty-five (25) calendar days after
          the date of issuance.

          All payments by ORMESA shall be sent to:

          Imperial Irrigation District
          c/o Manager, Finance and Accounting
          P. O. Box 937
          Imperial, California 92251

                                                                               6

          All billings by IID shall be sent to:

          ORMESA, LLC
          c/o Rany Raviv
          980 Greg Street
          Sparks, Nevada 89431

     7.2  Change of Billing Addresses  At any time, a Party's Authorized
          Representative may change the address to which payments or billings
          shall be sent by giving written notice to the other Party's Authorized
          Representative.

     7.3  Interest on Unpaid Bills  Bills which are not paid in full by the due
          date shall thereafter bear interest at the rate of one and one-half
          percent (1 1/2%) per month or the maximum legal rate of interest,
          whichever is less, compounded monthly on the unpaid amount. Interest
          shall be prorated by days from the due date to the date payment is
          received by IID.

8    EXHIBITS MADE PART OF THIS AGREEMENT

     8.1  Exhibits Incorporated  The Exhibits attached to This Agreement are by
          reference incorporated herein and made a part thereof, and remain in
          full force and effect in accordance with their respective provisions
          until superseded by a subsequent exhibit.

     8.2  Subsequent Exhibits  Any subsequent exhibit shall be executed by the
          signatories.

     8.3  Subsequent Exhibits Requirements  Each superseding exhibit must
          contain the date it becomes effective and must be attached to This
          Agreement, and when so attached, is incorporated herein and becomes a
          part thereof.

9    BILLING DISPUTES; BILLING DISPUTE RESOLUTION

     9.1  Claims Re Incorrect Billings  If ORMESA makes a claim that IID has
          issued an incorrect billing, while full and timely payment of the bill
          or bills is not excused, and ORMESA shall pay the entire amount(s)
          billed by the due date, the basis for such claim shall be presented to
          the Authorized Representatives.

     9.2  Authorized Representative Agreement  Within fifteen (15) days pursuant
          to ORMESA's claim, If the Authorized Representatives agree that there
          was no incorrect billing, the Parties shall accept the matter as
          resolved. If, however, an incorrect billing has occurred and the
          Authorized Representatives agree that there was an incorrect billing,
          the billing shall be forthwith corrected and any amounts owed relating
          thereto shall be refunded to ORMESA plus interest, as in Section 9.4.

     9.3  Effect of Failure to Agree  If the Authorized Representatives within
          thirty (30) calendar days after receipt of an incorrect billing claim,
          the Authorized Representatives cannot agree on the issue, a dispute
          shall be declared.

                                                                               7

     9.4  Dispute Resolution  In the event a billing dispute is declared, the
          Parties shall endeavor to agree on a process to resolve the dispute.
          If no such dispute resolution process is established by the Parties
          within thirty (30) calendar days after a dispute is declared, the
          dispute shall be resolved by binding arbitration in accordance with
          the rules of the American Arbitration Association. If a determination
          is made that an incorrect billing has been issued, and an overpayment
          has occurred, the amount of the overpayment shall be paid to ORMESA by
          IID. Overpayments shall bear interest at the rate of seven percent
          (7%) per annum. Interest shall be prorated, by days from the date of
          payment by ORMESA to the date the refund is mailed by IID to ORMESA.

10   LIABILITY AND INDEMNITY

     10.1 Indemnity for Agreement Activities  A given Party, its directors,
          officers, agents, and employees shall not be liable to the other
          Party, its directors, officers, agents, and employees, for claims or
          losses (including consequential losses) resulting from the given
          Party's Agreement Activities, except for those claims or losses
          (including consequential losses) attributable to the Willful Action of
          the given Party, its directors, officers, agents, or employees. The
          other Party expressly releases the given Party, its directors,
          officers, agents, and employees, from any liabilities, claims, or
          losses (including consequential losses) resulting from the given
          Party's Agreement Activities, except for those liabilities, claims, or
          losses (including consequential losses) which result from the Willful
          Action of the given Party, its directors, officers, agents, or
          employees.

     10.2 Indemnity for Third Party Claims  Each Party shall indemnify and hold
          the other Party, its directors, officers, agents, and employees
          harmless against all liabilities to any person or entity not a Party
          to This Agreement, which liabilities arise as a result of the subject
          matter of This Agreement and which result from the sole negligence or
          Willful Action of the indemnifying Party, its directors, officers,
          agents, or employees, which liabilities involve death, bodily injury,
          or property damage, and whether such liabilities are direct, indirect,
          or consequential. The indemnity obligation described in this Section
          10.2 shall include a Party's liabilities to third parties, as set
          forth herein, as well as its reasonable costs, expenses, and
          attorneys' fees incurred in negotiating, settling, or defending
          against such liabilities.

11   AUTHORIZED REPRESENTATIVES

     11.1 Initial Designation  At the time This Agreement is executed, each Party
          shall designate by written notice to the other Party, an Authorized
          Representative who is authorized to act on its behalf in the
          implementation of This Agreement.

          11.1.1 IID's Authorized Representative:

                 Name:
                         --------------------------------
                 Tel:
                         --------------------------------
                 Fax:
                         --------------------------------
                 E-mail:
                         --------------------------------

                                                                               8

          11.1.2 ORMESA's Authorized Representative:
                 Name: Ran Raviv
                 Tel: (775)356-9029
                 Fax: (775) 356-9039
                 E-mail: rraviv@ormat.com

     11.2 Change In Designation  Either Party may change at any time the
          designation of its Authorized Representative by written notice to the
          other Party.

     11.3 No Authority to Amend Agreement  The Authorized Representatives shall
          not have the authority to amend This Agreement.

12   SETTLEMENT OF PRIOR DISPUTES

     12.1 Agreement As Settlement Document

          12.1.1 On The Effective Date, all disputes between IID and ORMESA
                 relating to the Facilities, arising from obligations between or
                 among IID and ORMESA), shall be deemed settled and resolved. To
                 reflect such settlement, IID and ORMESA shall execute a mutual
                 release, in the form attached hereto and marked Exhibit C. This
                 mutual release, when executed by The Parties, will settle and
                 resolve all such disputes, including, but not limited to those
                 which may have arisen prior to the April 15, 2002 transaction
                 between the owners of EMG (now ORMESA) regarding The
                 Facilities, as described in the foregoing Recitals. ORMESA
                 represents and warrants that it has full authority to settle
                 and resolve such disputes by executing This Agreement and the
                 attached mutual release.

13   GENERAL PROVISIONS

     13.1 Prior Communications Superseded  This Agreement contains the entire
          agreement and understanding between the Parties as to the subject
          matter of This Agreement and supersedes all prior agreements,
          commitments, representations, and discussions between the Parties as
          to said subject matter.

     13.2 No Dedication of Facilities

          13.2.1 Performance of a given Party pursuant to This Agreement,
                 including but not limited to undertakings by a Party to the
                 other Party under any provision of This Agreement, shall not
                 constitute the dedication of the Party's facilities or any
                 portion thereof to the public or to the other Party.

          13.2.2 It is understood and agreed that any undertaking by a Party
                 under any provision of This Agreement shall cease upon the
                 termination of This Agreement, unless such obligations survive
                 This Agreement's term.

     13.3 Written Waiver Required  Remedies of a given Party upon the other
          Party's default or other failure to perform any obligation set forth
          in This Agreement shall not be waived, nor shall a given Party's
          failure to require strict performance of any of the provisions of This
          Agreement or to exercise any of its rights hereunder constitute a
          waiver of such provisions or rights, unless an express written waiver
          from the given Party shall have been given to the other Party.

                                                                               9

     13.4 No Partnership or Joint Venture  Created The Parties do not intend to
          create or establish, nor shall This Agreement or any performance or
          undertaking by a Party or the Parties pursuant to This Agreement be
          deemed to create or establish, a partnership, joint venture, or other
          similar relationship between them.

     13.5 No Third Party Rights  The Parties do not intend to create rights in
          or to grant remedies to any third party as a beneficiary of This
          Agreement.

     13.6 Performance Excused by Occurrence of Uncontrollable Force

          13.6.1 Neither Party shall be considered to be in default in the
          performance of any of its obligations under This Agreement when a
          failure of performance is due to an Uncontrollable Force.

          13.6.2 A Party rendered unable to fulfill any of its obligations under
          This Agreement by reason of an Uncontrollable Force shall give prompt
          telephonic notice followed by written notice of such condition to the
          other Party and shall exercise due diligence to remove such condition
          with all reasonable dispatch.

     13.7 Strike or Labor Dispute  If a Party's performance is affected by a
          strike or labor dispute, nothing contained herein shall be construed
          to require the Party to settle any such strike or labor dispute.

     13.8 Assignments  Any assignment by ORMESA of its interest in This
          Agreement which is made without the written consent of IID, which such
          consent shall not be unreasonably withheld, shall not relieve ORMESA
          of its liability for performance of any of its duties and obligations
          hereunder, and in the event of any such assignment ORMESA shall
          continue to remain liable for payment of any and all money due IID
          hereunder and for the performance and observance of all other
          covenants, duties, and obligations to be performed and observed
          hereunder by ORMESA to the same extent as though no assignment has
          been made; provided, however, that ORMESA will have the right to
          assign This Agreement for security purposes, to a bank or other entity
          which provides financing or refinancing for construction, repair,
          maintenance and operation of The Facilities or any portion thereof or
          to an affiliate that has ownership or operational interests in The
          Facilities and IID shall promptly consent to such assignment in
          writing. IID shall approve an assignment to a lender or affiliate, so
          long as any such assignee(s) agrees, in writing, to be bound by the
          terms and conditions of This Agreement, and such agreement is
          furnished to IID in advance of the assignment. In the case of a
          lender, IID, in its sole discretion, may waive the application of some
          or all of the duties and obligations of This Agreement, so long as the
          lender agrees that, in the event of foreclosure, the successor shall
          be bound by the terms hereof to the same extent as ORMESA. For
          purposes of this Section 13.8, the term "affiliate" refers to an
          entity which is directly or indirectly owned or controlled by an
          entity which owns or controls fifty percent (50%) or more of the
          equity interest in ORMESA.

     13.9 Agreement Binding on Successors  All of the provisions of This
          Agreement shall be binding upon and inure to the benefit of the
          Parties and their respective successors, permitted assignees, and
          legal representatives.

                                                                              10

     13.10 Governing Law and Venue

          13.10.1 Laws governing any court proceedings or actions commenced in
                  connection with interpretation or enforcement of This
                  Agreement shall be the laws of the State of California.

          13.10.2 Venue for any court proceedings or action commenced in
                  connection with the interpretation or enforcement of This
                  Agreement shall be in Imperial County, California.

     13.11 Severability  If any provision of This Agreement is determined to be
           void for any reasons, then the remaining provisions of This Agreement
           must be severed there from and remain in full force and effect. The
           remaining provisions shall be interpreted and enforced so as to give
           full meaning to such provisions without reference to those provisions
           determined to be void.

     13.12 Modifications  No modifications, changes, or amendments of This
           Agreement shall be effective unless made in writing and signed by the
           authorized signatories to This Agreement.

     13.13 Notices  Any notice, demand, or request provided for in This
           Agreement or served, given, or made in connection with it shall be in
           writing and shall be deemed properly served, given, or made if
           delivered in person or sent by United States mail, postage prepaid,
           or by facsimile, to the persons specified below unless otherwise
           provided for in This Agreement:

               Imperial Irrigation District
               c/o General Manager
               P.O. Box 937
               Imperial, California 92251
               Fax: (760) 339-9392

               ORMESA, LLC
               c/o Rany Raviv
               980, Greg Street
               Sparks, Nevada 89431
               Fax: (775) 356-9039

          Either Party may at any time, by notice to the other Party, change the
          designation or address of the person so specified as the one to
          receive notices pursuant to This Agreement.

     13.14 Headings and Labels  The headings and labels contained in This
           Agreement are for the convenience of the reader and are not intended
           to be used in the interpretation of This Agreement.

     13.15 Interpretation  In case of a conflict between the procedures or
           standards performed by IID relative to WECC, the provisions of This
           Agreement shall govern. 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

                                                                              11

           presumption or burden of proof shall arise favoring or disfavoring
           any Party by virtue of authorship of any of the provisions of This
           Agreement.

     13.16 Further Assurances  The Parties agree to execute such documents that
           may be reasonably necessary and required to carry out the intent of
           this Agreement.

14   AUTHORITY TO EXECUTE

     14.1 Representations

          14.1.1 Each Party represents and warrants that it has the authority to
          enter into and bind itself to all applicable parts and provisions of
          This Agreement.

          14.1.2 The signatory has been duly authorized to execute and deliver
          This Agreement on behalf of the Party for which the signatory signed.

          14.1.3 ORMESA specifically represents and warrants that it has the
          authority to enter into This Agreement in connection with the
          Holtville Plants and the Loads.

15   EXECUTION

     IN WITNESS WHEREOF, the Parties have caused this Energy Services Agreement
     to be executed on this ___ day of February, 2003.

IMPERIAL IRRIGATION DISTRICT             ORMESA, LLC

                                         By ORMAT FUNDING CORP.
                                            Sole Member of ORMESA, LLC

By                                          By
     ---------------------------------         ---------------------------------

Name                                        Name: Connie Stechman
     ---------------------------------

Title: President, Board of Directors        Title: Controller

Date:                                       Date:
      --------------------------------            ------------------------------

                                                                              12

                                   EXHIBIT A
                           SIMPLIFIED METERING SCHEME

                                                                 November_, 2002

Darrell Stovall
Ormesa, LLC - Plant Engineer
3300 East Evan Hewes Hwy
Holtville, CA 92250

Darrell:

The following is a basic description of the proposed simplified metering scheme
to interface Imperial Irrigation District and Ormesa, LLC (OG) Facilities. This
scheme will be created to simplify export metering and to capture and register
electrical services provided to OG as described in the "Energy Services
Agreement" (ESA) due to be effective January 1, 2003.

OG plans to self serve its station service load. OG will also generate to
fulfill any export or line loss schedule obligations per the ESA. As indicated
in the attached Simplified Metering Scheme, East Highline's "Master Meter" (M-1)
referenced to the 92 KV HL4-Line will be utilized to meter the net export from
0G. The existing OG-2 meter (M-2) will continue to meter the net generation from
the Ormesa Geothermal-2 facility. The net generation from OG-1 can be determined
from the difference of the meters i.e. OG-1=(M-1)-(M-2).

Further, IID will provide standby service (all components) up to 2 MW at the A2
Rate. Any additional requirements by OG will be charged at the penalty rate of
$18/KW-MO. Associated energy will be charged at the thermal heat rate of 14,000
MMBTU/KWH multiplied by the Southern California Border Gas price as published in
Platt's "Gas Daily," on a two day lag for the month during which energy was
provided.

Below is a description and components breakdown of these two schedules. Please
note that an official "Penalty Rate" does not exist. My intentions here are to
demonstrate how electric service component's costs from the A2 rate will change
if OG exceeds 2 MW. Also, for each component I have included in brackets and in
red, a description of the algorithm(s) used to appropriately capture usage.
These algorithms will be created on a display of our Advanced Control's Energy
Management System. Inputs to EMS to be provided by Supervisory Control and Data
Acquisition (SCADA).

Please confirm that this is generally agreeable to Ormesa, LLC.

Harvey Esparza
Supt., Energy Mgmt.
Imperial Irrigation District

Enc.

                           Simplified Metering Scheme

           [Graphic: Simplified Metering Scheme to Interface Imperial
                   Irrigation District and Ormesa Facilities]

                                    EXHIBIT B
          EXISTING PLANT CONNECTION AND TRANSMISSION SERVICE AGREEMENTS

     A. Background: On December 16, 2002 ORMESA further reorganized the Ormesa
Projects' holding structure in order to make them more efficient and streamline
the relationship with IID. All of the properties of Ormesa Geothermal, a
California General Partnership, Ormesa Geothermal II, a California General
Partnership and Gem Resources, LLC a Delaware corporation - which are entities
wholly owned by Ormesa LLC were merged into and are now held by ORMESA,
directly. For convenience we have attached the previous ownership structure
(Annex B.1) and the effect of the merger (Annex B.2).

     ORMESA, LLC will therefore require a SINGLE Plant Connection Agreement
("PCA") and a single Transmission Services Agreement ("TSA") for EACH of its
Power Purchase Agreements with Southern California Edison, to be achieved by
paragraphs B and C, as follows:

     B. Consolidation & Assignment of Agreements: The Parties to This Agreement
hereby agree that the following agreements are assigned and re-designated as
held by Ormesa LLC:

     1.  PCA for the Ormesa Geothermal Plant between IID and Ormesa Geothermal
         dated October 1, 1985.

     2.  The following two agreements should be consolidated into the PCA of
         Ormesa Geothermal:-

         i.  PCA for the Ormesa IE Geothermal Plan between IID and Geothermal
             dated October 21, 1988.

         ii. PCA for the Ormesa IH Geothermal Plant between IID and Ormesa
             Geothermal dated October 3, 1989.

     3.  PCA for the Ormesa Geothermal Plant No. 2 between IID and Ormesa
         Geothermal II dated May 26, 1987.

     4.  TSA for the Ormesa I, Ormesa IE and Ormesa IH Geothermal Power Plants
         between IID and Ormesa Geothermal dated October 3, 1989.

     5.  TSA for the Ormesa II Geothermal Power Plant between IID and Ormesa
         Geothermal II dated August 25, 1987.

     C. Termination of Agreements: The Parties to This Agreement hereby agree
to terminate the following agreements as they are no longer necessary for the
operation of the Projects:

     1.  PCA for the Geo East Mesa Limited Partnership Unit No. 2 between IID
         and Geo East Mesa Limited Partnership dated March 21, 1989.

     2.  PCA for the Geo East Mesa Limited Partnership Unit No. 3 between IID
         and Geo East Mesa Limited Partnership dated March 21, 1989.

In addition, upon consolidation of the PCAs mentioned in 2(i) and 2(ii) above
into Ormesa Geothermal, terminate the following:

     1.  PCA for the Ormesa IE Geothermal Plan between IID and Geothermal dated
         October 21, 1988.

                                                                             15

     2.  PCA for the Ormesa IH Geothermal Plant between IID and Ormesa
         Geothermal dated October 3, 1989.

     3.  TSA for the Geo East Mesa LP Unit No. 2 Plant between IID and Geo East
         Mesa Limited Partnership dated March 21, 1989.

     4.  TSA for the Geo East Mesa LP Unit No. 3 Plant between IID and Geo East
         Mesa Limited Partnership dated March 21, 1989.

     D. Notices :

         o     Any payment related communications should be addressed to:

               Mrs. Connie Stechman, Controller
               ORMESA, LLC
               980, Greg Street
               Sparks, NV 89431
               T (775) 356-9029
               F (775) 356-9039
               E cstechman@ormat.com

         o     Any Contract & Legal communications should be addressed to:

               Mr. Ran Raviv, Vice President
               ORMAT Nevada, Inc.
               980, Greg Street
               Sparks, NV 89431
               T (775) 356-9029
               F (775) 356-9039
               E rraviv@ormat.com

         o     Any Technical communication should be communicated to:

               Mr. Don Campbell, Plant Manager
               ORMESA, LLC
               PO Box 86
               Holtville, CA 92250
               T (760) 356-3023
               F (760) 356-3035
               E dcampbell@ormat.com

                                                                             16

                                   Annex B.1:

        [Graphic: Simplified Organization Chart of Ormat Nevada Inc. and
    its Subsidiaries and the relationship with Imperial Irrigation District]

                                       2

                                    Annex B.2

            [Graphic: Simplified Ownership Structure Between Imperial
                       Irrigation District and Ormesa LLC]

                                        3

                                    EXHIBIT C
                                     FORM OF
                                 MUTUAL RELEASE

This Release, by and between ORMESA, LLC ("ORMESA"), a Delaware limited
liability company and Imperial Irrigation District ("IID"), is being executed
and delivered on February 11th, 2003, (the "Release Date"). ORMESA and IID are
hereinafter collectively referred to as the "Parties" and individually as a
"Party".

BACKGROUND

On March 8, 1999, IID and East Mesa Geothermal, LLC, ("EMG") entered into an
Interim Distribution Service Agreement ("Interim Agreement") whereby EMG elected
to self serve the electrical load of certain geothermal electric generating
facilities located East of the City of Holtville, rather than purchasing such
service from IID, as it had previously done.

On April 15, 2002, the previous owners of EMG transferred their interests in the
above-described geothermal facilities to subsidiaries of Ormat Nevada Inc., who
renamed EMG to ORMESA, and, as a result, ORMESA succeeded to EMG's rights,
duties and obligations arising under the Interim Agreement.

IID and ORMESA desire to resolve certain disputes which arose between them ("The
Disputes"), regarding performance of and payment for activities of IID, on the
one hand, and ORMESA on the other, during the term of the Interim Agreement and
to establish and define the terms of the settlement of The Disputes, pursuant to
the Energy Services Agreement between IID and ORMESA, to which this Release is
attached as Exhibit C.

IID and ORMESA represent to each other, their respective officers, directors,
successors and assigns, that their agreement to execute and be bound by the
terms of the Energy Services Agreement and this Mutual Release are based, in
part, on their warranty and representation that each has full authority to
settle The Disputes in accordance with the terms of the Energy Services
Agreement applicable to The Disputes, and that, by executing this Release, the
terms hereof will bind IID and ORMESA.

RELEASE TERMS

In consideration of the mutual benefits that they will receive as a result of
the resolution of their disputes arising under the Interim Agreement and the
terms of this Release, the Parties, intending to be legally bound, hereby agree
as follows:

     1. Each Party, on behalf of itself and its affiliates and each of their
respective past, present and future officers, directors, board members,
attorneys, employees, agents, servants, consultants, advisors, shareholders,
successors and assigns (the "Releasing Party"), irrevocably and unconditionally
releases, acquits and forever discharges the other Party and its affiliates and
its past, present and future officers, directors, board members, attorneys,
employees, agents, servants, consultants, advisors, shareholders, successors and
assigns (the "Released Party") from any and all charges, complaints, claims,
actions, suits, demands, liabilities, obligations, promises, agreements,
contracts, damages, costs, debts and expenses

                                       1

(including attorney fees and legal and court costs) whatsoever, whether known or
unknown, suspected or unsuspected, both at law and in equity (individually,
"Claim"; collectively, "Claims") that the Releasing Party now has, has ever had
or may hereafter have against the Released Party arising out of or in connection
with the Interim Agreement or the relationship between the Parties created
thereby. Each Party expressly waives and relinquishes all rights and benefits
that it may have under any state or federal statute, court or administrative
decision, or common law principle that would otherwise limit the effect of this
Release to claims known or suspected prior to the Release Date, and it does so
understanding and acknowledging the significance and consequences of such
specific waiver.

     2. Except with respect to the obligations and performance required by the
terms and provisions of this Release, the Parties each acknowledge that they are
aware of the facts, and that it is their intention that execution of this
Release shall be effective as a full and final settlement of, and as a bar to,
each and every Claim. The Parties acknowledge that they are aware that if they
hereafter discover facts different from, or in addition to, the facts which they
now know or believe to be true, it is nevertheless their intention hereby to
settle finally, and fully, each and every Claim. In furtherance of such
intention, the Release herein shall become effective upon the events described
herein, and will remain in effect as releases notwithstanding the discovery of
any such different or additional facts.

     The Parties further understand and agree that the Release may extend to
matters which have not yet been discovered, and that such possibility has been
explicitly taken into account in determining the consideration to be given for
this Release and in entering into the Release herein which is intended to
include all Claims, whether known or unknown arising from the Interim Agreement.

     The Parties acknowledge that they are familiar with, and expressly waive,
all of the rights and/or privileges provided by California Civil Code section
1542 which states;

     "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
     KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECTUING THE RELEAES,
     WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
     DEBTOR."

     The Parties being aware of this Civil Code section 1542 hereby expressly
waive any and all rights that they might have thereunder and statutes of similar
effect throughout the world. The Parties understand and acknowledge the
significance and consequence of the specific waiver of California Civil Code
section 1542 and hereby assume full responsibility for any injuries, damages,
losses or liabilities that they may hereafter discover as possibly resulting
from the release Claims.

     3. Each Party hereby irrevocably and unconditionally agrees to refrain,
directly and indirectly, from asserting any claim or demand, or commencing,
instituting or causing to be commenced or instituted, any suit, proceeding,
arbitration or other action of any kind against any person or entity released
pursuant to the releases granted in Section 1 based upon any matter purported to
be released by this Release.

     4. Without in any way limiting any of the rights and remedies otherwise
available to the Released Party, the Releasing Party shall indemnify and hold
harmless the Released Party from and against all losses, liabilities, claims,
damages or expenses (including costs of

                                        2

investigation and attorney fees and legal and court costs), whether or not
involving third party claims, arising directly or indirectly from or in
connection with (i) the assertion by or on behalf of the Releasing Party of any
Claim or other matter purported to be released pursuant to this Release and (ii)
the assertion by any third party of any claim or demand against any Released
Party that arises directly or indirectly from, or in connection with, any
assertion by or on behalf of the Releasing Party against such third party of any
matters purported to be released pursuant to this Release.

     5. If any court of competent jurisdiction holds any provision of this
Release invalid or unenforceable, the parties to this Release intend for the
other provisions of this Release to remain in full force and effect. Any
provision of this Release held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable.

     6. This Release may not be modified except by a writing signed by the
persons against whose interest such modification shall operate. This Release
shall be governed by and construed under the laws of the State of California
without regard to principles of conflicts of law.

IN WITNESS WHEREOF, each of the undersigned have executed and delivered this
Release as of February  , 2003.

IMPERIAL IRRIGATION DISTRICT            ORMESA, LLC

                                        By  ORMAT FUNDING CORP.
                                            Sole Member of ORMESA, LLC

By                                          By
  ------------------------------              ------------------------------

Name                                        Name : Connie Stechman
    ----------------------------

Position                                    Position : Controller
        ------------------------

                                       3

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