Document:

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                                                                   Exhibit 10(K)

                                                                [EXECUTION COPY]

________________________________________________________________________________

                             ASSET SALE AGREEMENT

                                    BETWEEN

                             NEVADA POWER COMPANY

                                      AND

                          RELIANT ENERGY SUNRISE, LLC

                                      FOR

                          THE SUNRISE/SUN-PEAK BUNDLE

                               December 9, 2000

________________________________________________________________________________
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                               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..........................................     13
               2.3      Assumed Liabilities......................................     14
               2.4      Excluded Liabilities.....................................     16

ARTICLE III  PURCHASE PRICE......................................................     18
               3.1      Purchase Price...........................................     18
               3.2      Purchase Price Adjustment................................     18
               3.3      Allocation of Purchase Price.............................     20
               3.4      Proration................................................     20

ARTICLE IV   THE CLOSING.........................................................     21
               4.1      Time and Place of Closing................................     21
               4.2      Payment of Purchase Price................................     22
               4.3      Deliveries by Seller.....................................     22
               4.4      Deliveries by Buyer......................................     23

ARTICLE V    REPRESENTATIONS AND WARRANTIES OF SELLER............................     24
               5.1      Organization; Qualification..............................     24
               5.2      Authority Relative to this Agreement.....................     24
               5.3      Consents and Approvals; No Violation.....................     25
               5.4      Reports..................................................     26
               5.5      Financial Statements.....................................     26
               5.6      Undisclosed Liabilities..................................     26
               5.7      Absence of Certain Changes or Events.....................     27
               5.8      Title to Real Property...................................     27
               5.9      Leasehold Interests......................................     27
               5.10     Improvements.............................................     27
               5.11     Insurance................................................     28
               5.12     Environmental Matters....................................     28
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               5.13     Labor Matters............................................     29
               5.14     Intentionally Left Blank.................................     29
               5.15     Real Property Encumbrances...............................     29
               5.16     Condemnation.............................................     29
               5.17     Certain Contracts and Arrangements.......................     29
               5.18     Legal Proceedings, etc...................................     30
               5.19     Permits..................................................     30
               5.20     Regulation as a Utility..................................     31
               5.21     Taxes....................................................     31
               5.22     Sufficiency of Assets....................................     31

ARTICLE VI   REPRESENTATIONS AND WARRANTIES OF BUYER.............................     31
               6.1      Organization.............................................     31
               6.2      Authority Relative to this Agreement.....................     32
               6.3      Consents and Approvals; No Violation.....................     32
               6.4      Regulation as a Utility..................................     33
               6.5      Availability of Funds....................................     33

ARTICLE VII  COVENANTS OF THE PARTIES............................................     33
               7.1      Conduct of Business of the Seller........................     33
               7.2      Access to Information....................................     35
               7.3      Expenses.................................................     36
               7.4      Further Assurances.......................................     36
               7.5      Public Statements........................................     37
               7.6      Consents and Approvals...................................     37
               7.7      Fees and Commissions.....................................     38
               7.8      Use of Pollution Control Facilities......................     38
               7.9      Tax Matters..............................................     39
               7.10     Supplements to Schedules.................................     40
               7.11     Employees................................................     40
               7.12     Risk of Loss.............................................     42
               7.13     Additional Covenants of the Buyer........................     42
               7.14     Additional Covenants of the Parties......................     43

ARTICLE VIII CLOSING CONDITIONS..................................................     45
               8.1      Conditions to Each Party's Obligations to Effect the
                          Transactions Contemplated Hereby.......................     45
               8.2      Conditions to Obligations of Buyer.......................     46
               8.3      Conditions to Obligations of Seller......................     48
</TABLE>

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ARTICLE IX   INDEMNIFICATION.....................................................     50
               9.1      Indemnification..........................................     50
               9.2      Defense of Claims........................................     51

ARTICLE X    TERMINATION AND ABANDONMENT.........................................     53
               10.1     Termination..............................................     53
               10.2     Procedure and Effect of Termination......................     54

ARTICLE XI   MISCELLANEOUS PROVISIONS............................................     55
               11.1     Amendment and Modification...............................     55
               11.2     Waiver of Compliance; Consents...........................     55
               11.3     No Survival of Representations and Warranties............     55
               11.4     Notices..................................................     55
               11.5     Assignment...............................................     57
               11.6     Arbitration..............................................     57
               11.7     Governing Law............................................     57
               11.8     Counterparts.............................................     57
               11.9     Interpretation...........................................     57
               11.10    Entire Agreement.........................................     58
               11.11    Bulk Sales or Transfer Laws..............................     58
</TABLE>

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<PAGE>

                             ASSET SALE AGREEMENT

          ASSET SALE AGREEMENT, dated as of December 9, 2000 (the "Agreement"),
between Nevada Power Company, a Nevada corporation (the "Seller"), and Reliant
Energy Sunrise, LLC, a Delaware limited liability company (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 December 9,
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 Guaranty relating to performance under
this Agreement to be executed by Reliant Energy Power Generation, Inc. in favor
of the Seller (the "Guaranty").
<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)  "Intentionally Left Blank";

          (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, as more fully
described in Schedule 5.15, which were used to finance the Pollution Control
Facilities.

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

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

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

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

          (22) "Intentionally Left Blank";

          (23) "Confidentiality Agreement" means the Confidentiality and Auction
Protocols Agreement, dated March 28, 2000, between the Seller and the Buyer.

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

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

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

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

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

          (29) "Intentionally Left Blank";

          (30) "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

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respecting Hazardous Substances, and laws relating to the management and use of
natural resources.

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

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

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

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

          (35) "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.

          (36) "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.

          (37) "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 Maintenance
and Capital Expenditures Amount actually incurred, as set forth in Schedule
1.1(37) attached hereto as of the date set forth in such Schedule 1.1(37).

          (38) "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.

          (39) "Estimated Purchase Price" shall have the meaning set forth in
Section 4.2 hereof.

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

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

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

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

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

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

          (46) "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.

          (47) "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.

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

          (49) "Intentionally Left Blank";

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

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          (51) "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.

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

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

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

          (55) "Indenture" means the 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.

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

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

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

          (59) "Interconnection Agreement" means the Interconnection Agreement,
dated as of December 9, 2000, between the Seller and the Buyer.

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

          (61) "Intentionally Left Blank";

          (62) "Knowledge" means the actual knowledge of the directors and
executive officers of the specified Person, and in the case of the Seller, the
Director of Southern Generation - Maintenance, responsible for maintenance of
the Purchased Assets, which directors and executive officers are charged with
the responsibility for

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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.

          (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) "Intentionally Left Blank";

          (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 any unscheduled maintenance expenditures or capital
expenditures which are made by the Seller with the Buyer's consent, which shall
not be unreasonably withheld, 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) "Intentionally Left Blank";

          (69) "Intentionally Left Blank";

          (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

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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(a) 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) "NSLP" means Nevada Sun-Peak Limited Partnership, a Nevada
Limited Partnership.

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

          (77) "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.

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

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

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

          (81) "Permitted Encumbrances" means (i) those exceptions to title to
the Purchased Assets contained in the documents listed on Schedule 5.8; (ii) all
exceptions, restrictions, easements, covenants, charges, rights of way and
monetary and non-monetary Encumbrances filed in the official records in the
Clark County Recorder's office and listed in the Title Report in Schedule 5.8,
or that are set forth in an applicable FERC project license, except for such
Encumbrances which secure indebtedness; (iii) any state of facts that the survey
of the Real Property in Schedule

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5.8 discloses; (iv) with respect to any date before the Closing Date,
Encumbrances under the Indenture; (v) 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 securing all
or a portion of the purchase price therefor which are acquired pursuant to the
terms of this Agreement; (vi) the Buyer's Easements and the Seller's Easements
(in accordance with the Operating Easement Agreements applicable to such
easements and the Interconnection Agreement); (vii) 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, with sufficient bonds or security being posted to cover such
amounts; (viii) 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; (ix) zoning, entitlement,
conservation restriction and other land use and environmental regulations by
Governmental Authorities; and (x) such other minor imperfections in or failure
of title, easements, restrictions and Encumbrances (excluding mortgages,
pledges, liens, security interests and charges dischargeable by the payment of
money) which do not materially or actually detract from the value of or
materially interfere with the present use of the Purchased Assets and do not
actually, in the aggregate, have a Material Adverse Effect.

          (82) "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.

          (83) "Intentionally Left Blank";

          (84) "Pollution Control Facilities" means pollution control facilities
relating to the Sunrise Station, as more fully described in Schedule 5.15.

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

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

          (87) "Purchased Assets" means, subject to the Permitted Encumbrances,
the real and personal property, tangible or intangible, used by the Seller in
connection with the Sunrise Station (provided, however, that, if any of the
foregoing is used by the Seller pursuant to a lease or other contractual
arrangement, the relevant "Purchased Asset" shall be the lease or other
contractual arrangement and not title), including, without limitation, the
following assets owned by the Seller: (i)

                                       9
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the Real Property; (ii) all inventories of fuels, supplies, materials and
material spares located on or in transit to the Real Property on the Closing
Date; (iii) the machinery, equipment, vehicles, furniture and other personal
property constituting, or used for generation purposes in connection with, the
Sunrise Station on the Closing Date, including, without limitation, the items of
personal property included in Schedule 1.1(87)(iii) and designated to be
associated with Sunrise Station, and all warranties from third parties relating
thereto, to the extent that such warranties are transferable; (iv) the Sun-Peak
Power Purchase Agreement and the other contracts, agreements and personal
property leases listed on Schedules 1.1(87)(iv) and designated to be associated
with Sunrise Station and to the extent assignable; (v) the Permits listed on
Schedule 1.1(87)(v) and designated to be associated with Sunrise Station, to the
extent transferable; (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 relating to the Seller
and not to the aforementioned assets; (vii) the SO2 Allowances identified on
Schedule 1.1(87)(vii) and designated to be associated with Sunrise Station;
(viii) any assets purchased or to be purchased by the Seller pursuant to Section
7.4 ; (ix) the items designated to be "Purchased Assets" on the Separation
Schedule; and (x) the name of the Sunrise Station.

          (88) "Intentionally Left Blank";

          (89) "Real Property" means each parcel of real property owned by the
Seller associated with the Sunrise Station (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.

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

          (91) "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

                                       10
<PAGE>

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.

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

          (93)  "Scheduled Capital Expenditures" means those capital
expenditures included on Schedule 1.1(93).

          (94)  "Scheduled Maintenance Expenditures" means those maintenance
expenditures included on Schedule 1.1(94).

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

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

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

          (98)  "Seller Agreements" means those agreements listed on Schedule
5.17(a).

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

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

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

          (102) "Separation Schedule" means the schedule to be delivered to the
Buyer by the Seller by the earlier of April 9, 2001 or thirty days prior to the
Closing Date, which shall delineate the Purchased Assets from the Seller's other

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assets and which shall be consistent with the separation schedule summary
attached hereto as Exhibit F.

          (103)  "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.

          (104)  "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.

          (105)  "Sunrise Station" means the Sunrise generating station located
in Clark County Nevada.

          (106)  "Sun-Peak Power Purchase Agreement" means the Amended and
Restated Power Purchase Contract dated as of October 29, 1998 by and between
NSLP and the Seller.

          (107)  "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.

          (108)  "Tax Return" means any return, report, information return,
declaration, claim for refund or other document (including any related or
supporting information) supplied or required to be supplied to any authority
with respect to Taxes and including any supplement or amendment thereof.

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

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

          (111)  "Transitional Power Purchase Agreement" means the Transitional
Power Purchase Agreement, dated as of December 9, 2000, between the Buyer and
the Seller.

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

                                       12
<PAGE>

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

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

          (115)  "Waste Water Treatment Agreement" means a Waste Water Treatment
Agreement, to be negotiated and executed between the Seller, the Buyer and the
buyer of the Clark Bundle located in Clark County, Nevada, pursuant to Section
7.14(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), all of the
Seller's right, title and interest in, to and under the real and personal
property, tangible or intangible, owned by the Seller and constituting the
Purchased Assets.

          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

                                       13
<PAGE>

(ii) arising under the Seller Agreements and relating to a period before the
Closing Date;

          (e)  "Intentionally Left Blank";

          (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).

          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 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)  "Intentionally Left Blank";

          (e)  any liability, obligation or responsibility under or related to
former, current or future Environmental Laws or the common law, whether such

                                       14
<PAGE>

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, adjacent to,
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 or
adjacent to the 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,
adjacent to, 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 or
adjacent to 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,
adjacent to, 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 or adjacent to 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

                                       15
<PAGE>

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, adjacent to,
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 or adjacent to 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;

          (h)  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;

          (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.

          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;

                                       16
<PAGE>

          (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 or from the Purchased Assets, at any Off-Site Location, where
the transportation to 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 including, but
not limited to, surface waters that have received waste water discharges from
the Purchased Assets;

          (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 Section 2.3(a), (e) or (f) hereof;

          (f) any liabilities or obligations relating to any personal injury
(including, without limitation, workers' compensation claims), discrimination,
wrongful discharge, or unfair labor practice filed with or pending before any
court or administrative agency on the Closing Date, with respect to liabilities
principally relating to 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, any other Ancillary Agreement, the Bill of Sale, the deeds of
conveyance required by Section 4.3(e), the Assignment of Leases or the
Instrument of Assumption; and

                                       17
<PAGE>

               (i) any liabilities, obligations or responsibilities relating to
any "employee benefit plan" (as defined in Section 3(3) of ERISA) sponsored or
maintained by the Seller and any trade or business or entity (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 Section
414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA (collectively, 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; (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.

                                  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) One Hundred Six Million Dollars
($106,000,000), (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"). The amount to be paid by
Seller to Buyer for the Transitional Power Purchase Agreement being entered into
by Buyer and Seller hereunder shall be Seventy Three Million Dollars
($73,000,000) as adjusted in accordance with Section 2.3.1 of the Transitional
Power Purchase Agreement (the "TPPA Amount").

          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 priced at
the Seller's weighted average fuel costs located on or in transit to the Real
Property 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

                                       18
<PAGE>

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. If the Seller does not provide
the Adjustment Statement within 60 days after the Closing, the Buyer shall have
the right to provide the Adjustment Statement for the Seller's review.

          (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 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

                                       19
<PAGE>

Amount; provided, however, that if such portions shall be less than zero, then
the Seller shall pay to the Buyer the amount by which such portions are less
than zero. 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. 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.

          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 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:

                                       20
<PAGE>

               (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.

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

          (c)  In connection with any proration of property taxes, in the event
that the Purchased Assets are not separately valued and assessed, the proration
of such property taxes shall be determined based upon the proportion of (i) the
"historic cost less depreciation" of the Purchased Assets to (ii) the total
historic cost less depreciation of all the assets reported on the applicable
Nevada Operating Property Appraisal Report.

                                  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, subject to
Section 7.14(e), 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 at such other
place or time as the parties

                                       21
<PAGE>

may agree. 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 Purchase Price shall be paid as follows: (i) an amount at
Closing equal to the sum of One Hundred Six Million Dollars ($106,000,000), 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 pursuant
to Section 3.2 hereof and less (iv) the TPPA Amount (the "Estimated Purchase
Price"), by wire transfer of immediately available funds or by such other means
as are agreed to by the Seller and the Buyer.

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

          (a)  The Bill of Sale, duly executed and acknowledged 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 specifically required
hereunder;

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

          (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 (but including warranty of good and
marketable title as to water rights), substantially in the form of Exhibit G
attached 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, subject to arrangements for splitting such easements being made in
the same manner contemplated in Section 7.14(b);

          (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;

                                       22
<PAGE>

          (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)  The executed partial assignment of the current Southwest Gas
contract to the Buyer pursuant to Section 7.14(a) hereof;

          (j)  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, the
Ancillary Agreements, and where necessary or desirable, in recordable form; and

          (k)  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:

          (a)  The Estimated Purchase Price 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 the Seller to use the Real Property of the 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;

                                       23
<PAGE>

          (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.

                                   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 Agree-

                                       24
<PAGE>

ments 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 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, individually or in the
aggregate, 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

                                       25
<PAGE>

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 and by the Ancillary Agreements, 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 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 September 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 September 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. To Seller's Knowledge and 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

                                       26
<PAGE>

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. To Seller's Knowledge and
               ------------------------------------
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 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. The Seller has insurable title to all of the Real Property, 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 against the Seller and, to the Seller's Knowledge, against every
other party thereto, and are in full force and effect; there are no existing
material defaults thereunder by the Seller or, to the Seller's Knowledge, by any
party thereto; and no event has occurred which (whether with or without notice,
lapse of time or both) would constitute a material default thereunder by the
Seller or, to the Seller's Knowledge, by any other party thereto.

          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

                                       27
<PAGE>

improvement in connection with the Purchased Assets. Except as set forth in
Schedule 5.10, to Seller's Knowledge , with respect to the Purchased Assets,
Seller has complied in all material respects with applicable zoning, land use
and subdivision requirements.

          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 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)  Except as set forth in Schedule 5.12, the Seller has not received
any written request for information, or been notified in writing 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,

                                       28
<PAGE>

judgments, decrees or judicial orders that would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect.

          (d)  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 no full time employees assigned to
               -------------
the Purchased Assets. Accordingly, except as set forth in Schedule 5.13 there
are no labor union and/or collective bargaining agreements relating to the
Purchased Assets to which the Seller is a party or is subject. With respect to
any employees who have ever been associated with the Purchased Assets, 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 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 Intentionally Left Blank.
               ------------------------

          5.15 Real Property Encumbrances. Schedule 5.15 describes any Permitted
               --------------------------
Encumbrances on the Real Property. 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 such Real Property have been delivered
by the Seller to the Buyer.

          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 (i) the Seller
               ----------------------------------
Agreements listed in Schedule 5.17(a) or any other Schedule hereto, (ii) for
contracts, agreements, personal property leases, commitments, understandings or
instruments which shall expire prior to the Closing Date, (iii) for agreements
with

                                       29
<PAGE>

suppliers, distributors and sales representatives entered into in the ordinary
course of business, and (iv) for 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 listed on Schedule 5.17(a) 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 listed on Schedule 5.17(a), 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.

          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, or proceedings pending or investigation
pending, and to Seller's Knowledge no claims, actions, proceedings or
investigations threatened against the Seller relating to the Purchased Assets
before any court, Governmental 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 Environmental Laws (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

                                       30
<PAGE>

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 (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 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, 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 and with diligence through appropriate proceedings.
Except as set forth in Schedule 5.21, there are no outstanding agreements or
waivers extending or having the effect of extending or waiving the applicable
statutory periods of limitation for assessment or collection of Taxes associated
with the Purchased Assets for any period (nor will such agreements or waivers be
entered into or executed prior to the close of business on the Closing Date),
and the Seller has not executed or entered into (nor will execute or enter into
on or prior to the close of business on the Closing Date) any closing agreement
pursuant to Section 7121 of the Code, or any predecessor provision thereof or
any similar provision of state, local or foreign tax law that relates to the
Purchased Assets. Seller is not a foreign person within the meaning of Section
1445 of the Code.

          5.22 Sufficiency of Assets. The Purchased Assets are sufficient for
               ---------------------
the operation of Sunrise Station as it has been operated, and the Purchased
Assets are all the assets required to operate Sunrise Station as it has been
operated by the Seller.

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

          The Buyer represents and warrants to the Seller as follows:

          6.1  Organization. The Buyer is a limited liability company organized,
               ------------
validly existing and in good standing under the laws of the State of

                                       31
<PAGE>

Delaware and has all requisite limited liability company power and authority to
own, lease and operate its properties and to carry on its business as is now
being conducted. The Buyer is duly qualified or licensed to do business as a
foreign limited liability company 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 Buyer has heretofore delivered to the Seller
complete and correct copies of its certificate of formation (or other similar
governing documents), as currently in effect.

          6.2  Authority Relative to this Agreement. The Buyer has full limited
               ------------------------------------
liability company power and authority to execute and deliver this Agreement and
the Ancillary Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Ancillary Agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by the sole member of the Buyer and no other limited
liability company proceedings on the part of the Buyer are necessary to
authorize this Agreement or the Ancillary Agreements to which it is a party or
to consummate the transactions contemplated hereby and thereby. This Agreement
and the Ancillary Agreements to which it is a party have been duly and validly
executed and delivered by the Buyer, and assuming that this Agreement and the
Ancillary Agreements to which it is a party 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 the Buyer, enforceable against the Buyer 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 the Buyer nor the
purchase by the Buyer 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 formation (or other similar governing documents)
of the Buyer, (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,
individually or in the aggregate, a Material Adverse Effect or (y) for those
requirements which become applicable to the Buyer as a result of the specific
regulatory status of the Seller (or any of its

                                       32
<PAGE>

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 the Buyer or any of its 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.

          (b)  Except as set forth in Schedule 6.3(b) and except for (i) FERC
approval of the Seller's disposition of FERC jurisdictional facilities to Buyer
under Section 203 of the Federal Power Act, (ii) FERC acceptance of the
Interconnection Agreement to be filed by Seller, (iii) FERC acceptance of the
Transition Power Purchase Agreement, and (iv) the filings by the Buyer and the
Seller required by the HSR Act, (the filings and approvals referred to in
Schedule 6.3(b) and clauses (i) through (iv) 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 and by the Ancillary
Agreements, 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. Except as set forth in Section 6.3(b)
               -----------------------
and 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. Without limiting the generality of the foregoing, and, except as
contemplated in this Agree-

                                       33
<PAGE>

ment or as described in Schedule 7.1, prior to the Closing 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(93), make any capital
expenditures with respect to the Purchased Assets or enter into any contract or
commitment therefor, 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(94), 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

                                       34
<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;

          (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 agreement having a term extending beyond the Closing Date,
where the sales of energy are 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;

          (l)  enter into commitments to sell power from the Purchased Assets
beyond the Closing Date; or

          (m)  enter into 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 (l).

          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 the Buyer is permitted
access by law, (ii) permit the Buyer to make such reasonable inspections thereof
as the Buyer may reasonably request; (iii) cause its officers and 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 its officers and advisors

                                       35
<PAGE>

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; 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).

          (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.

          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

                                       36
<PAGE>

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 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 costs associated with
acquiring title to such Leased Assets (to the extent approved by the Buyer)
shall be paid by the Buyer as part of the Purchase Price.

          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 the Buyer
shall not issue any such public announcement, statement or other disclosure
without having first received the written consent of the Seller, 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

                                       37
<PAGE>

advisable to consummate the transactions contemplated by this Agreement
(including, without limitation, the Seller Required Regulatory Approvals and the
Buyer Required Regulatory Approvals) 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 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. 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.

          (c)  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.

          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

                                       38
<PAGE>

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 (to the extent required in connection with the
Bonds or under this Agreement) 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 Matters. (a) Notwithstanding any other provision of this
               -----------
Agreement, all transfer, sales and similar Taxes (other than Nevada real
property transfer taxes) incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the Buyer, and the Buyer
shall, at its own expense, file, to the extent required by law, all necessary
Tax Returns and other documentation with respect to all such Taxes, and, if
required by applicable law, the Seller shall join in the execution of any such
Tax Returns or other documentation. If governing law does not allow Buyer, but
requires Seller, to file a Tax Return with respect to a transfer, sales, or
similar Tax for which Buyer bears liability under this Agreement, Buyer shall
prepare such Tax Return, present such Tax Return to Seller within 10 days of the
due date of such Tax Return, and Seller shall sign and file such Tax Return as
prepared by Buyer unless filing such Tax Return in the manner prepared by Buyer
would violate governing law. Any Nevada Tax on the transfer of real property
incurred in connection with this Agreement or the transactions contemplated
hereby (including the recordation of transfer of title to the Real Property)
shall be borne by the Seller, and the Seller shall, at its own expense, file, to
the extent required by law, all necessary Tax Returns and other documentation
with respect to the Nevada Tax on the transfer of real property, and, if
required by applicable law, the Buyer shall join in the execution of any such
Tax Returns or other documentation. The Buyer shall at its expense control the
defense and settlement of any audit or other examination by any taxing
authority, and any judicial or administrative proceeding, relating to liability
for transfer, sales and similar Taxes incurred in connection with this Agreement
and the transactions contemplated hereby that are borne by the Buyer.

                                       39
<PAGE>

          (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 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.

          7.10 Supplements to Schedules. Prior to the Closing Date, the Seller
               ------------------------
shall 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) Subject to federal labor law requirements, if
               ---------
Buyer hires employees at the Sunrise Station whose duties are significantly the
same duties covered under the Generation Collective Bargaining Agreement between
Nevada Power Company and Local Union 396 of the IBEW (the "Union") that was
effective June 25, 1999, then the Buyer shall notify the Union of this
circumstance and, upon written request by the Union:

                                       40
<PAGE>

               (1)  Allow representatives of the Union reasonable access to the
Sunrise Station for the purpose of informing such employees of their rights to
form and join organizations of their own choosing for the purpose of
representation with their employer with respect to wages, hours, and other terms
and conditions of employment and to explain the benefits of membership in and
representation for such purposes by the Union.  "Reasonable access" shall
include the right to meet with employees on at least three (3) occasions at the
Sunrise Station on non-work time (e.g., lunch hour) during normal business
hours.

               (2)  Buyer shall supply the Union with a list of such employees.
Such list shall contain the names, home addresses and home phone numbers of such
employees. The Union shall at all times maintain the confidentiality of any such
list.

               (3)  Buyer shall submit to a card check election to determine the
desires of such employees to be represented for the purpose of collective
bargaining by the Union.  If a majority of such employees have signed cards
authorizing the Union to act as their collective bargaining representative, and
such authorization card majority is verified by the Federal Mediation and
Conciliation Service, then the Buyer shall recognize the Union as the exclusive
bargaining representative of such employees.

               (4)  If the Union is selected by a majority of such employees as
their collective bargaining representative, then the Buyer shall, immediately
upon the request by the Union, bargain in good faith with the Union for the
purpose of concluding a collective bargaining agreement.

               (5)  At all times Buyer shall remain neutral with regard to any
question concerning the representation of such employees by the Union.
"Neutral" shall mean that the Buyer or its affiliate(s) shall take no official
position, nor shall it direct or condone any of its agents or representatives,
including any attorneys or consultants, to take any position against the
exercise by its employees of their right to select the Union as their collective
bargaining representative or to oppose the selection of the Union as the
employees' collective bargaining representative.

          (b)  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.

                                       41
<PAGE>

          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, 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 has no Material Adverse Effect, Seller shall make such repairs or
replacements (i) as necessary, consistent with Good Utility Practice (as such
term is defined in the Interconnection Agreement) to cure such damage or
destruction as soon as reasonably practicable, or (ii) if Good Utility Practice
would not otherwise dictate that such repairs or replacements should be made but
such repairs or replacements are covered by Seller's insurance in effect at the
time of such damage or destruction.  If Seller makes any repairs or replacements
in accordance with subparagraph (ii) in the preceding sentence, Buyer shall
reimburse Seller for any amount not covered by Seller's insurance plus the
applicable deductible under such insurance.  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

                                       42
<PAGE>

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 Additional Covenants of the Parties. (a) Buyer hereby agrees to
               -----------------------------------
accept an assignment of a portion of Seller's rights under the Firm
Transportation Agreement dated February 1, 1995 ("FTA"), between Seller and
Southwest Gas such that it would receive an allocation of 4,725 MMBtu/Hour of
transportation capacity under the FTA.  Capacity, demand and other charges
payable under the FTA would be allocated proportionately, such that the Buyer
would bear 4,725/12,000 of such charges and purchaser of the Clark Bundle would
bear 7,275/12,000 of such charges.  Seller and Buyer shall cooperate in good
faith to effect such an assignment (in the form of a partial assignment,
bifurcation, new agreement or other structure) on terms acceptable to Seller and
Buyer and to obtain Southwest Gas's consent to such assignment.

          (b)  To the extent that any contract, agreement, permit, easement or
other right serves or benefits generation assets other than the Purchased
Assets, Seller shall, before Closing, prepare such assignments to or agreements
with (in whole or in part) the purchaser of the other generation assets served
or such third party as may be necessary to separate such rights or benefits.
All such assignments and agreements shall be subject to Buyer's consent (which
shall not be unreasonably withheld).  Each agreement or contract with a third
party shall be bifurcated into separate agreements or contracts for each bundle
of generation assets served or affected by it such that (i) none can be affected
in any way by others, (ii) the rights, benefits and obligations provided for
under the agreement or contract prior to bifurcation are allocated fairly among
the generation assets to which it related, and (iii) there are no changes
materially adverse to the Buyer as compared with the agreement or contract prior
to bifurcation insofar as such agreement or contract related to Sunrise Station.

                                       43
<PAGE>

          (c)  Seller shall use its commercially reasonable efforts to negotiate
with Nevada Sun-Peak Limited Partnership to bifurcate the Sun-Peak Power
Purchase Contract in order to separate the rights, benefits and obligations
related to power generation on the one hand and transmission and interconnection
on the other hand.  If, however, the Sun-Peak Power Purchase Contract has not
been bifurcated by the earlier of April 30, 2001 or the date that is 60 days
from the expected Closing Date, Buyer and Seller shall negotiate in good faith
either (i) an assignment to Buyer of the relevant portions of the Sun-Peak Power
Purchase Contract, or (ii) an agreement between Buyer and Seller pursuant to
which Seller shall supply the power (together with all the rights, benefits and
obligations associated therewith) to Buyer and Buyer shall purchase the power
from Seller on the terms and conditions of the Sun-Peak Power Purchase Contract,
provided, that any assignment or agreement executed pursuant to clause (i) or
(ii) of this sentence shall contain a provision whereby Buyer and Seller would
each agree to hold the other party harmless for any obligation, liability, claim
or event which would not have been such other party's responsibility if the Sun-
Peak Power Purchase Contract had been bifurcated prior to Closing.

          (d)  Within fifteen (15) Business Days of the date of this Agreement,
Buyer agrees to cooperate with Seller in the development of a form of waste
water treatment agreement which substantially reflects the provisions set forth
in Exhibit H hereto.  Seller shall use its commercially reasonable best efforts
to present such form of agreement to the buyer of the Clark Bundle as soon as
practicable thereafter.  Seller and Buyer shall execute such definitive
agreement, which will also be executed by the buyer of the Clark Bundle, within
thirty (30) Business Days of the date of this Agreement.

          (e)  Seller hereby agrees to make certain filings with the PUCN and,
if required, with the OPUC and CPUC, which shall indicate Seller's acceptance of
Buyer's bid for and its disposition to Buyer of the Purchased Assets and request
findings by the PUCN and, if required, the OPUC and CPUC, necessary for Buyer to
obtain EWG status with respect to its ownership and operation of the Purchased
Assets, provided, however, that the Closing Date shall not occur until the
earlier of (i) seventy-five days from the date of receipt of all required state
certification pursuant to Section 32 of the Holding Company Act, or (ii) the
date of FERC's determination that Buyer is an Exempt Wholesale Generator, under
Section 32 of the Holding Company Act ("EWG").

          (f)  To the extent Seller has entered into an agreement or agreements
pursuant to the last sentence of Section 7.6(b) Seller shall continue, for as
long as shall be reasonably necessary, to seek any necessary consents required
to assign the underlying Seller Agreement or Agreements to Buyer.

                                       44
<PAGE>

          (g)  The Seller shall make the repairs or modifications, if any,
necessary for the Purchased Assets to comply, as of the Closing Date, with
applicable noise regulations.

          (h)  The Seller owns the necessary easements, permits, leases and
rights-of-way covering all of the water and effluent pipelines, pumps and
related facilities (as generally described in Schedule 5.8) which are to be
transferred or conveyed to Buyer and which are located offsite of Sunrise
Station, and shall convey, assign and deliver the same (together with any
surveys or line drawings) to the Buyer at Closing.

                                 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 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 and the Buyer Required Regulatory Approvals, 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

                                       45
<PAGE>

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 Purchased Assets; and

          (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 the last sentence
of Section 7.6(b) hereof has been entered into.

          (e)  There shall have been no changes in applicable Laws, judgements,
orders or decrees which would, in the aggregate, have a material adverse effect
on the business, results of operations, financial condition or physical
condition of the Purchased Assets.

          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

                                       46
<PAGE>

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)
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, all of such Seller 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,
(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;

                                       47
<PAGE>

          (e)  The Seller shall have executed and delivered, as of the Closing,
(i) the documents and instruments required pursuant to 4.3(a), 4.3(e), 4.3(g),
4.3(i), 4.3(j), and 4.3(k); (ii) either (x) a bifurcated Sun Peak Power Purchase
Contract related to power generation as described in Section 7.14(c), (y) an
assignment pursuant to clause (i) of Section 7.14(c) or (z) an agreement
pursuant to clause (ii) of Section 7.14(c); (iii) the partial assignment of the
current Southwest Gas contract (or bifurcation, new agreement or other structure
as the case may be) as described in Section 7.14(a); (iv) the assignments and
conveyances described in Section 7.14(h); and (v) 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, and no termination thereof shall have occurred;

          (f)  A title company approved by the Buyer be committed to issue to
the Buyer an ALTA policy of title insurance satisfactory to the Buyer and with
such endorsements selected by Buyer including, without limitation, a legal
parcel endorsement, all at regular rates; and

          (g)  Buyer shall have received a final survey of the Real Property in
form and substance satisfactory to the Buyer.

          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;

          (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;

          (d)  The Seller shall have received an opinion from Jones Vargas,
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) the Buyer is a limited liability company organized, existing
and in good standing under the laws of the State of Delaware and has the

                                       48
<PAGE>

limited liability company 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 limited liability
company 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) 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 Buyer shall not constitute a violation of the
certificate of formation (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 (i) 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,
(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 and the State
of 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

                                       49
<PAGE>

          (e)  The Buyer shall have executed and delivered, as of the Closing,
(i) the documents and instruments required pursuant to 4.4(e), 4.4(f) and
4.4(h); and (ii) 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.

                                  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, but only if awarded in respect of a Third Party Claim), 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 covered 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 (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.

          (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

                                       50
<PAGE>

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 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).

          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

                                       51
<PAGE>

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.

          (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

                                       52
<PAGE>

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.

                                   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

                                       53
<PAGE>

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 Section 7.12(b) or (c) hereof.

          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,

                                       54
<PAGE>

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 Section 3.2,
3.3, 3.4, 7.2(b), 7.2(c), 7.3, 7.4, 7.6(b), 7.7, 7.8, 7.9, 7.12(c), 7.13,
7.14(f), 9.1 and 9.2 hereof (which covenants shall survive in accordance with
their terms)) shall expire with, and be terminated and extinguished by, (i) the
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, warranty or covenant.

          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):

                                       55
<PAGE>

               (a)  If to the Seller, to:

                    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:

                    Reliant Energy Sunrise, LLC
                    Attention: J. Douglas Divine
                    Telecopy:  (713) 207-9605

                    (For courier delivery)
                    1111 Louisiana Street, 16/th/ Floor
                    Houston, Texas 77002

                    (For mail delivery)
                    P.O. Box 286
                    Houston, Texas 77001-0286

                    with copies to:

                    Reliant Energy Sunrise, LLC
                    Attention: Michael L. Jines
                    Telecopy:  (713) 207-0116

                    (For courier delivery)
                    1111 Louisiana Street, 43/th/ Floor
                    Houston, Texas 77002

                                       56
<PAGE>

                    (For mail delivery)
                    P.O. Box 61867
                    Houston, Texas 77002-1867

          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 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. Notwithstanding the
foregoing, the Buyer shall have the right to assign its rights under this
Agreement to a lender in connection with a financing.

          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 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

                                       57
<PAGE>

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.

          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
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.

                                       58
<PAGE>

          IN WITNESS WHEREOF, the Seller and the Buyer have caused this
Agreement 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

                                   RELIANT ENERGY SUNRISE, LLC

                                   By: _______________________________________
                                   Name:  J. Douglas Divine
                                   Title: Senior Vice President

                                       59<PAGE>

                                                                   Exhibit 10(L)

                     TRANSITIONAL POWER PURCHASE AGREEMENT

                                BY AND BETWEEN

                             NEVADA POWER COMPANY

                                      AND

                          RELIANT ENERGY SUNRISE, LLC

ASSET BUNDLE:  SUNRISE
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                                       Page
-------                                                                                                       ----
<S>                                                                                                           <C>
 1.      DEFINITIONS...............................................................................               1
 2.      TERM......................................................................................               8
 3.      SECURITY..................................................................................               9
 4.      SUPPLY SERVICE............................................................................              10
 5.      NOTIFICATION..............................................................................              14
 6.      PRICING OF ENERGY AND ANCILLARY SERVICES..................................................              15
 7.      INVOICING AND PAYMENTS....................................................................              16
 8.      REGULATORY APPROVALS......................................................................              19
 9.      COMPLIANCE................................................................................              20
10.      INDEMNIFICATION...........................................................................              20
11.      LIMITATION OF LIABILITY...................................................................              22
12.      FORCE MAJEURE.............................................................................              22
13.      DISPUTES..................................................................................              24
14.      NATURE OF OBLIGATIONS.....................................................................              27
15.      SUCCESSORS AND ASSIGNS....................................................................              27
16.      REPRESENTATIONS...........................................................................              28
17.      DEFAULT AND REMEDIES......................................................................              29
18       FACILITY ADDITIONS AND MODIFICATIONS......................................................              30
19.      COORDINATION..............................................................................              30
20.      EMERGENCY AND NONEMERGENCY CONDITION RESPONSE.............................................              30
21.      OUTAGE SCHEDULING.........................................................................              31
22.      REPORTS...................................................................................              32
23.      COMMUNICATIONS............................................................................              32
24.      NOTICES...................................................................................              33
25.      MERGER....................................................................................              33
26.      HEADINGS..................................................................................              34
27.      COUNTERPARTS AND INTERPRETATION...........................................................              34
28.      SEVERABILITY..............................................................................              34
29.      WAIVERS...................................................................................              34
30.      AMENDMENTS................................................................................              35
31.      TIME IS OF THE ESSENCE....................................................................              35
32.      APPROVALS.................................................................................              35
33.      PLR SERVICE...............................................................................              36
34.      CONFIDENTIALITY...........................................................................              36
35.      CHOICE OF LAW.............................................................................              37

Exhibits                                                                                                       Page
--------                                                                                                       ----
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 GUARANTY.................................................................             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
EXHIBIT M         ASSET BUNDLE CONTRACTUAL AND OPERATIONAL CONSTRAINTS.............................             M-1
</TABLE>
<PAGE>

                     TRANSITIONAL POWER PURCHASE AGREEMENT

This Agreement is made and entered into as of December 9, 2000 by and between
Nevada Power Company, a Nevada corporation ("Buyer"), and Reliant Energy
Sunrise, 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 Sunrise/Sunpeak generating station and other
assets associated therewith to Supplier or an affiliate thereof (the "Asset
Sale");

WHEREAS, notwithstanding the Asset Sale, Buyer expects that it has been
designated as the Provider of Last Resort ("PLR") for its Southern 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 Sunrise/Sunpeak 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.

                                       1
<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 Sunrise/Sunpeak generating stations
                  ------------
                 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 Asset Sale Agreement between
                  --------------------
                 Buyer and Supplier or Supplier's affiliate dated as of December
                 9, 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.

                                       2
<PAGE>

          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.

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

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

          1.2.14  "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.

          1.2.15  "Control Area" has the meaning set forth in the OATT.
                   ------------

          1.2.16  "Control Area Operator" means an entity and its agents which
                   ---------------------
                  are responsible for the operation of the Transmission System
                  and for maintaining reliability of the electrical transmission
                  system(s), including the Transmission System, within the
                  Control Area.

          1.2.17  "Credit Amount" shall mean an amount equal to the TPPA Amount,
                   -------------
                  plus an additional amount equal to $40/MWh multiplied by 378
                  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 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.

                                       3
<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  "El Dorado Delivery Point" means the Delivery Point as defined
                   ------------------------
                  in the 230kV Facilities Interconnection Agreement between
                  Buyer and El Dorado Energy, L.L.C., dated October 1, 1998, as
                  may be amended.

          1.2.24  "El Dorado Generating Station" means the 480 MW (nominal)
                   ----------------------------
                  electricity generating station located in Boulder City,
                  Nevada.

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

          1.2.26  "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".

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

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

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

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

          1.2.31  "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

                                       4
<PAGE>

                       generally accepted in the United States electric utility
                       industry.

          1.2.32  "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.

          1.2.33  "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.

          1.2.34  "Guaranty" has the meaning set forth in Section 3.1.2 hereof.
                   --------

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

          1.2.36  "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.

          1.2.37  "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.

          1.2.38  "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.

          1.2.39  "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.

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

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

          1.2.42  "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

                                       5
<PAGE>

                  by Moody's Investors Service, Inc., or (iii) a comparable
                  rating by another nationally recognized rating service
                  reasonably acceptable to Buyer.

          1.2.43  "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).

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

          1.2.45  "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 Control Area.

          1.2.46  "OATT" means Buyer's, or the Control Area Operator's as its
                   ----
                  successor hereto, as applicable, then-effective Open Access
                  Transmission Tariff, or such entities' successor tariff, which
                  has been accepted for filing by the FERC.

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

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

          1.2.49  "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.

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

          1.2.51  "Point of Delivery" means the point(s) which has (have) been
                   -----------------
                  specified as the Interconnection Point(s) in the
                  Interconnection Agreement between Nevada Power Company and
                  Supplier, dated December 9, 2000, as it may be amended from
                  time to time, as well as any alternative locations agreed upon
                  pursuant to Section 4.1.5 and, with respect to any portion of
                  the Supply Amount delivered from the El Dorado Generating
                  Station, the El Dorado Delivery Point.

          1.2.52  "PPT" means Pacific Prevailing Time.
                   ---

                                       6
<PAGE>

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

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

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

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

          1.2.57  "Replacement Costs" means with respect to a period of time,
                   -----------------
                  the difference (whether positive or negative) between (a) the
                  actual costs, including without limitation related penalties
                  and transmission costs, incurred by Buyer to replace any
                  shortfall (whether secured directly by Buyer or indirectly by
                  the Control Area Operator) 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.

          1.2.58  "Sunpeak Power Purchase Contract Assignment (SPPCA)" means the
                   --------------------------------------------------
                  terms and conditions of the Amended and Restated Power
                  Purchase Contract between Nevada Sun-Peak Limited Partnership
                  and Buyer, dated October 29, 1998, assumed by or assigned to
                  Supplier pursuant to Section 7.14(c) of the Asset Sale
                  Agreement. For purposes of this Agreement, the terms and
                  conditions of the SPPCA shall be only those terms and
                  conditions existing as of the date of assumption or assignment
                  of the SPPCA and shall not include any modifications made to
                  the SPPCA after such date.

          1.2.59  "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.

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

          1.2.61  "TPPA Amount" means the amount paid by Buyer to Supplier in
                   -----------
                  consideration of this Agreement.

                                       7
<PAGE>

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

          1.2.63  "Transmission System" means the facilities owned, controlled,
                   -------------------
                  or operated by Buyer, or its successors and assigns, that are
                  used to provide transmission service under the OATT.

          1.2.64  "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, 2.2.3, 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
                 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 amendments to the Agreement 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  In the event the Asset Sale Agreement is terminated prior to
                 the Asset Sale Closing, this Agreement shall not become
                 effective and shall otherwise be considered terminated, and
                 neither Party shall have any rights or obligations hereunder.

                                       8
<PAGE>

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

          2.2.5  Any termination of this Agreement pursuant to this Section 2.2
                 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 after the Effective Date, but
                 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 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

                                       9
<PAGE>

                          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; Guaranty.  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  Guaranty.  In the alternative to the provisions of Section
                 --------
                 3.1.1, the Supplier may provide a corporate guaranty (the
                 "Guaranty"), 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 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)

                                       10
<PAGE>

                          billion dollars.

                  Upon receipt of a successor Guaranty executed by a successor
                  Guarantor that meets the requirements of this Section 3.1.2,
                  Buyer shall release any prior Guaranty.

     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 make reasonable 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; provided that,
                          such consent shall not be required if Supplier elects
                          to provide the Supply Amount from the El Dorado
                          Generating Station; provided further that, in the
                          event Supplier delivers the Supply Amount from the El
                          Dorado Generating Station, unless otherwise agreed by
                          the Parties, Supplier shall deliver such Supply Amount
                          at the El Dorado Delivery Point and also shall
                          provide, acquire, or otherwise pay for all
                          transmission costs and Firm Import Rights, as defined
                          in the OATT, necessary to deliver the Supply Amount to
                          that point immediately past the last FIR Interface, as
                          defined in the OATT, between the El Dorado Delivery
                          Point and the load pocket in which the Asset Bundle is
                          located.

                 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

                                       11
<PAGE>

                          Delivery and shall schedule the Supply Amount in
                          accordance with the applicable OATT.

                 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 and contractual parameters
                                    set forth in Exhibit M, as well as Good
                                    Utility Practices.

                         4.1.1.3.2  In addition, Buyer will pay to Supplier the
                                    cost for the peak firings, in excess of the
                                    six (6) cumulative peak firing hours per
                                    calendar year available without cost, of
                                    Sunpeak Units 3, 4 or 5 pursuant to the
                                    charges stated in the SPPCA if required to
                                    provide the Supply Amount; provided that,
                                    (i) Supplier cannot physically provide such
                                    capacity from each Sunpeak unit without peak
                                    firing (i.e., if either water injection or
                                    inlet guide vane adjustment cannot be used
                                    or is not sufficient); and provided further
                                    that, Supplier shall not perform more than
                                    thirty (30) cumulative peak firing hours per
                                    calendar year without first informing Buyer
                                    of the cost of each such additional peak
                                    fire. Supplier shall notify Buyer within a
                                    reasonable period when peak firing hours are
                                    required to provide the Supply Amount.

          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
                         (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

                                       12
<PAGE>

                          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.  Buyer shall resell all of the
                 -------------------------
                 Supply Amount delivered by Supplier under this Agreement, and
                 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.  Except as provided in Section 4.1.1.1,
                 --------------------
                 Supplier shall deliver, and Buyer shall take delivery of, the
                 Supply Amount at the Point(s) of Delivery. Subject to Section
                 4.1.5.2, 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 OATT, 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

                                       13
<PAGE>

                 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 net
                 Replacement Costs computed in respect of such Dispatch Hours
                 during the month are greater than zero, then Supplier shall
                 reimburse Buyer for net Replacement Costs. If Supplier's
                 schedule of Ancillary Services is less than the Supply Amount
                 of Ancillary Services in any Dispatch Hour during a month,
                 Supplier shall reimburse Buyer for Replacement Costs for the
                 difference between Supplier's schedule and the Supply Amount of
                 Ancillary Services during such month. An example of the
                 methodology used to calculate Replacement Costs is provided in
                 Exhibit D.

          4.2.2  If not otherwise recovered under Section 4.2.1, Supplier also
                 shall be responsible for any penalties imposed on Buyer by the
                 WSCC, the ISA, or the Control Area Operator that are caused by
                 Supplier's violation of reliability criteria due to a deviation
                 between the Supply Amount and Delivered Amount, as determined
                 by then current tariffs, operating agreements, or documents
                 governing such reliability criteria; provided that, if such
                 reliability penalty is escalated due to prior violations of
                 reliability criteria which were not caused by Supplier,
                 Supplier shall be responsible only for its equitable share of
                 such escalated penalty, taking into account the number and
                 scope of the reliability violations caused

                                       14
<PAGE>

                 by Supplier and the number and scope of the reliability
                 violations caused by others.

          4.2.3  The amounts payable to Supplier under Sections 4.2.1 and 4.2.2
                 shall be Buyer's exclusive remedy and Supplier's exclusive
                 liability with respect to any failure to deliver the Supply
                 Amount.

          4.2.4  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 day-
          -----------------------
          ahead 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, together with purchases scheduled under Buyer's other
          Transitional Power Purchase Agreements, is no greater than that amount
          then projected to be necessary to satisfy Buyer's TRR. In addition,
          for each day-ahead 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. PPT 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. PPT 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:

                 (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

                                       15
<PAGE>

                       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)   in the first Availability Notice to be provided for each
                       calendar month, the average transfer flow rate through
                       the waste water transfer line to the Clark generating
                       station over the prior month and the projected average
                       transfer flow rate for the upcoming month.

          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)   non-forced outages of Sunpeak Units 3, 4 and 5 either
                       scheduled by Buyer prior to the Effective Date or
                       otherwise contained in the final schedule approved by
                       September 30 of each year pursuant to the maintenance
                       scheduling provisions of the SPPCA; provided that,
                       subsequent changes to such final schedule shall not be
                       considered a Permitted Derating, unless agreed to by
                       Buyer, which agreement shall not be unreasonably
                       withheld;
                 (c)   response to an Emergency Condition as described in
                       Section 20;
                 (d)   subject to the limitations expressed in Section 12.5, a
                       Force Majeure event;
                 (e)   lack of water treatment pond storage at the Clark
                       generating station; provided that such lack of water
                       treatment pond storage capacity is not due to Supplier's
                       sales to parties other than Buyer; and
                 (f)   operation of Asset Bundle beyond the operational and
                       contractual parameters set forth in Exhibit M.

          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.

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

                                       16
<PAGE>

          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 and such price shall not
          change during the term of the Agreement.  If the Energy portion of
          Ancillary Services is called upon by the ISA or Control Area Operator,
          Buyer shall pay Supplier the Price Ceiling of Energy for the Delivered
          Amount of such Energy, as invoiced to Buyer pursuant to Section 7.3.

     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 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:

                                       17
<PAGE>

          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 Services for each dispatch hour
                 multiplied by the price of Ancillary Services as stated in
                 Exhibit B;

          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; and

          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.  Subject to confirmation that the ISA or Control Area
          Operator received the Delivered Amount of Energy related to Ancillary
          Services called upon by the ISA or Control Area Operator, Buyer shall
          pay Supplier for the amounts invoiced pursuant to Section 7.2.6.
          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 Buyer, Buyer may offset such
          amount from its payment of Supplier's corresponding invoice.

                                       18
<PAGE>

          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 greater of the Market Price of Energy multiplied by
                       the hourly Delivered Amount of Energy summed over the
                       Contract Year or the Price Floor 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.

                                       19
<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.

                                       20
<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 be responsible
           for any and all taxes applicable to the transaction under this
           Agreement arising prior to and at delivery of the Delivered Amount at
           the Point of Delivery. Buyer shall be responsible for any and all
           taxes applicable to the transactions after delivery of the Delivered
           Amount at the Point of Delivery. To the extent there is a change in
           Law that imposes any material increase in taxes relating to delivery
           of the Delivered Amount at the Point of Delivery, Buyer shall be
           responsible for such increase in tax.

     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.

                                       21
<PAGE>

     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 Practices.

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  indemnity rights or obligations 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.
          --------------------------

                                       22
<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.

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

                                       23
<PAGE>

           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 apply with respect to
           claims pursuant to Section 10 hereof arising from the failure of
           Supplier to deliver the Supply Amount.

     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,

           (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

                                       24
<PAGE>

           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 transmission outages, 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, 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
           must either deliver the Supply Amount at the Point(s) of Delivery or
           pay liquidated damages pursuant to Section 4.2 of this Agreement.

     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

                                       25
<PAGE>

           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 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 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 Clark County, Nevada.

           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

                                       26
<PAGE>

                   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 three neutral arbitrators
                  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. From the remaining list, each
                            Party shall appoint one arbitrator and those two
                            arbitrators shall select a third arbitrator who
                            shall act as chairman of the tribunal. If any
                            arbitrator is not appointed within the time limits
                            provided herein or in the AAA rules, such arbitrator
                            shall be appointed by the AAA, which shall appoint
                            the arbitrator with the combined highest rating.

                  13.4.3.3  Each of the arbitrators 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.

                  13.4.3.4  The tribunal 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 tribunal shall have
                            no authority to award punitive or multiple damages
                            or any damages inconsistent with this Agreement. The
                            tribunal shall within thirty (30) days of

                                       27
<PAGE>

                            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 tribunal 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 tribunal 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 tribunal shall be shared by the Parties
           equally, unless the decision of the tribunal 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.

15.  SUCCESSORS AND ASSIGNS

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

                                       28
<PAGE>

           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 such assignee
                   (or its guarantor) shall have a credit rating equal or
                   superior to that of Buyer.

           15.1.2  Buyer also may assign this Agreement, in whole or in part, as
                   necessary to comply with orders of the PUCN regarding the
                   assumption of all or a portion of the PLR by other entities
                   or as otherwise required by Law or applicable regulations.

     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 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

                                       29
<PAGE>

           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 to the following:

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

                                       30
<PAGE>

           (ii)    Failure to deliver the Supply Amount for a period of one
                   hundred twenty (120) consecutive hours;

           (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 Guaranty 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; or

           17.2.2  In the event such Event of Default was caused by transmission
                   or 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 as provided in and subject to
           Section 4.2. 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

                                       31
<PAGE>

                   the limits for planned outages set forth in Section 21,
                   liquidated 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 Nevada Power Company and
                   Supplier, dated December 9, 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

                                       32
<PAGE>

     21.1  Supplier shall request Buyer's approval prior to any inspections,
           proposed 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,
                   including the non-forced outages scheduled for Sunpeak Units
                   3, 4, and 5 (as provided for in the SPPCA). 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 be responsible to Buyer for
                   Replacement Costs to the extent provided in Section 4.2 (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.

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

                                       33
<PAGE>

            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.

      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

                                       34
<PAGE>

     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.

     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

                                       35
<PAGE>

            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 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

                                       36
<PAGE>

           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.

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  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.

     32.3  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

                                       37
<PAGE>

     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 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, and to its
                   shareholders, directors, officers, employees, advisors,
                   lenders and representatives as necessary to approve,
                   negotiate, consummate, perform and finance the acquisition
                   and operation of the Asset Bundle, in each case 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

                                       38
<PAGE>

                         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 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.

                                       39
<PAGE>

IN WITNESS WHEREOF, the Parties hereto have caused this Transitional Power
Purchase Agreement for the Sunrise/Sunpeak generating station to be executed by
their duly authorized representative on the date first stated above:

NEVADA POWER COMPANY                     RELIANT ENERGY SUNRISE, LLC

By:    ________________________          By:  ________________________
       William E. Peterson                    J. Douglas Divine
Title: Senior Vice President, General    Title: Senior Vice President
       Counsel, and Corporate Secretary
<PAGE>

                                   EXHIBIT A
                                SUNRISE BUNDLE
  ASSET BUNDLE CAPACITY AND OPERATING PARAMETERSEXHIBIT ASUNRISE BUNDLEASSET
                   BUNDLE CAPACITY AND OPERATING PARAMETERS

==========================================================================
   UNIT      NET SUMMER          NET            RAMP RATE     MINIMUM
             CAPABILITY   WINTERCAPABILI TY     (MW)/HOUR      HOURLY
                (MW)             (MW)                       ENERGY TAKE
                                                                 (MW)
--------------------------------------------------------------------------
Sunrise 1          80              80               80
Sunrise 2          69              76               76
Sunpeak 3          74              74               74
Sunpeak 4          74              74               74
Sunpeak 5          74              74               74
--------------------------------------------------------------------------
Total             371             378              378            n/a
==========================================================================

                           Minimum Annual Energy Take:    310,000 MWh
                           Limit on Excused Energy:       20,000 MWh

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

                                      A-1
<PAGE>

                                   EXHIBIT B
                                 SUNRISE BUNDLE
                     ENERGY AND ANCILLARY SERVICES PRICES

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

     Price Floor of Energy:    $ 32.68  per MWh
     Price Ceiling of Energy:  $ 46.38  per MWh

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

     Operating Reserve - Spinning Reserve:
       Summer On-Peak:   $12.86 per MW-reserved per hour
       Summer Off-Peak:  $7.35 per MW-reserved per hour
       Winter On-Peak:   $7.34 per MW-reserved per hour
       Winter Off-Peak:  $4.19 per MW-reserved per hour

     Operating Reserve - Supplemental Reserve:
       Summer On-Peak:   $1.53 per MW-reserved per hour
       Summer Off-Peak:  $0.87 per MW-reserved per hour
       Winter On-Peak:   $0.82 per MW-reserved per hour
       Winter Off-Peak:  $0.47 per MW-reserved per hour

For purposes of this Exhibit B, summer months shall consist of the months of
June through and September, and 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 WSCC.

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

                                      B-1
<PAGE>

                                   EXHIBIT C

                          SUPPLIER'S MONTHLY INVOICE

<TABLE>
<CAPTION>
             A                   Price Ceiling of Energy              $46.38            /MWh

             B                    Price Floor of Energy               $32.68            /MWh

MONTH 1 - 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  Capacity
      -----         -------------     -----------     --------------    -----------------  ----------------   ----------------------
                                                         (C - D)                                (D x F)               (C x F)
      <S>           <C>               <C>             <C>               <C>                <C>                <C>
         1                 371             371                                  50.00          $ 18,550.00        $ 18,550.00

         2                 371             371               0                  50.00            18,550.00          18,550.00

         3                 371             311              60                  50.00            15,550.00          18,550.00

         4                 371             311              60                  50.00            15,550.00          18,550.00

         5                 241             231              10                  40.00             9,240.00           9,640.00

         6                 271             271               0                  40.00            10,840.00          10,840.00

         7                 361             341              20                  30.00            10,230.00          10,830.00

         8                 371             371               0                  30.00            11,130.00          11,130.00

         9                 371             371               0                  30.00            11,130.00          11,130.00

        10                 371             371               0                  35.00            12,985.00          12,985.00
-----------------------------------------------------------------------------------------------------------------------------
                         3,470           3,320             150                                 $133,755.00        $140,755.00

I.     Sum of (Delivered Energy times corresponding hourly Market Price)        Sec 7.2.1      $133,755.00
         IT.     Sum of (Asset Bundle Capacity times corresponding hourly Market Price)                           $140,755.00
J.     Sum of hourly Delivered Energy multiplied by the Price Ceiling of Energy Sec 7.2.2      $153,981.60
         JT.     Sum of hourly Asset Bundle Capacity multiplied by the Price Ceiling of Energy                    $160,938.60
K.     Sum of hourly Delivered Energy multiplied by the Price Floor of Energy   Sec 7.2.3      $108,497.60
         KT.     Sum of hourly Asset Bundle Capacity multiplied by the Price Floor of Energy                      $113,399.60
L.    Invoiced Amount - Energy                        Sec 7.3                    (K ** I ** J) $133,755.00
M.    Theoretical Amount for Expected Performance                              (KT ** IT ** JT)                   $140,755.00

**  less than
*** Greater than

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

                    N                      O                P               Q                    R                  S
                                        Ancillary
    Dispatch   Schedule of 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              7.35            $      0.00           $      0.00

        2              0                     0               0              7.35                   0.00                  0.00

        3              0                     0               0             12.86                   0.00                  0.00

        4              0                     0               0             12.86                   0.00                  0.00

        5             80                    80               0             12.86               1,028.80              1,028.80

        6             80                    60              20             12.86                 771.60              1,028.80

        7              0                     0               0             12.86                   0.00                  0.00

        8              0                     0               0             12.86                   0.00                  0.00

        9              0                     0               0             12.86                   0.00                  0.00

       10              0                     0               0             12.86                   0.00                  0.00
-----------------------------------------------------------------------------------------------------------------------------
                     160                   140              20                              $  1,800.40           $  2,057.60

T. Invoiced Amount - Ancillary Service Capacity - Spinning Reserve   Sec 7.2.5              $  1,800.40
</TABLE>

                                      C-1
<PAGE>

                                   EXHIBIT C

                          SUPPLIER'S MONTHLY INVOICE

<TABLE>
<S>                                                                                               <C>
U.    Theoretical Amount for Expected Performance                                                 $  2,057.60

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

                    V                      W                X               Y                    Z                 AA
                                        Ancillary
    Dispatch   Schedule of 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               0.87           $      0.00        $      0.00

         2              0                    0               0               0.87                  0.00               0.00

         3              0                    0               0               1.53                  0.00               0.00

         4              0                    0               0               1.53                  0.00               0.00

         5             10                   10               0               1.53                 15.30              15.30

         6             10                   10               0               1.53                 15.30              15.30

         7             10                   10               0               1.53                 15.30              15.30

         8              0                    0               0               1.53                  0.00               0.00

         9              0                    0               0               1.53                  0.00               0.00

        10              0                    0               0               1.53                  0.00               0.00
--------------------------------------------------------------------------------------------------------------------------
                       30                   30               0                              $     45.90        $     45.90

 AB.  Invoiced Amount - Ancillary Service Capacity - Supplemental Reserve   Sec 7.2.5       $     45.90

 AC.  Theoretical Amount for Expected Performance                                                              $     45.90

<CAPTION>
MONTH 1 - ANCILLARY SERVICE ENERGY
----------------------------------

                       AD                   AE              AF               AG                AH                 AI
                                         Ancillary
    Dispatch   Schedule of Ancillary     Capacity        Supplier      Capacity Price of  Price x Ancillary    Price x Schedule
       Hour      Capacity (MW)         Supplied (MW)   Shortfall (MW)     Energy ($/MW)   Energy Supplied    of Ancillary Services
       ----      ------------          ------------    -------------    ---------------   -----------------  ---------------------
                                                         (AD - AE)                             (AE x AG)          (AD x AG)
    <S>          <C>                   <C>             <C>              <C>               <C>                <C>
          1             0                    0               0                46.38         $      0.00          $      0.00

          2             0                    0               0                46.38                0.00                 0.00

          3             0                    0               0                46.38                0.00                 0.00

          4             0                    0               0                46.38                0.00                 0.00

          5            40                   40               0                46.38            1,855.20             1,855.20

          6            30                   10              20                46.38              463.80             1,391.40

          7            10                   10               0                46.38              463.80               463.80

          8             0                    0               0                46.38                0.00                 0.00

          9             0                    0               0                46.38                0.00                 0.00

         10             0                    0               0                46.38                0.00                 0.00
----------------------------------------------------------------------------------------------------------------------------
                       80                   60              20              $463.80         $  2,782.80          $  3,710.40

AJ.    Invoiced Amount - Ancillary Services Energy   Sec 7.2.6                              $  2,782.80

AK.    Theoretical Amount for Expected Performance                                                               $  3,710.40

               MONTH 1 - TOTAL INVOICE AMOUNT        Sec 7.3       (L + T + AB + AJ)        $138,384.10
==================================================================================================================================
</TABLE>

                                      C-2
<PAGE>

MONTH 2 - 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               371              371              0               50.00                $ 18,550.00     $   18,550.00
      2               371              371              0               50.00                  18,550.00         18,550.00
      3               371              311             60               50.00                  15,550.00         18,550.00
      4               371              311             60               60.00                  18,660.00         22,260.00
      5               241              231             10               60.00                  13,860.00         14,460.00
      6               271              271              0               60.00                  16,260.00         16,260.00
      7               361              341             20               40.00                  13,640.00         14,440.00
      8               371              371              0               40.00                  14,840.00         14,840.00
      9               371              371              0               40.00                  14,840.00         14,840.00
     10               371              371              0               45.00                  16,695.00         16,695.00
--------------------------------------------------------------------------------------------------------------------------------
                    3,470            3,320            150                                    $161,445.00     $  169,445.00

I.  Sum of (Delivered Energy times corresponding hourly Market Price)         Sec 7.2.1      $161,445.00
       IT.     Sum of (Asset Bundle Capacity times corresponding hourly Market Price)                        $  169,445.00

J.  Sum of hourly Delivered Energy multiplied by the Price Ceiling of Energy  Sec 7.2.2      $153,981.60
       JT.     Sum of hourly Asset Bundle Capacity multiplied by the Price Ceiling of Energy                 $  160,938.60

K.  Sum of hourly Delivered Energy multiplied by the Price Floor of Energy    Sec 7.2.3      $108,497.60
       KT.     Sum of hourly Asset Bundle Capacity multiplied by the Price Floor of Energy                   $  113,399.60

L.  Invoiced Amount - Energy                   Sec 7.3                 (I > J)               $153,981.60

M.  Theoretical Amount for Expected Performance                       (IT > JT)                              $  160,938.60
</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               371              371              0               40.00                $ 14,840.00        $14,840.00
      2               371              371              0               30.00                  11,130.00         11,130.00
      3               371              311             60               30.00                   9,330.00         11,130.00
      4               371              311             60               30.00                   9,330.00         11,130.00
      5               241              231             10               25.00                   5,775.00          6,025.00
      6               271              271              0               25.00                   6,775.00          6,775.00
      7               361              341             20               25.00                   8,525.00          9,025.00
      8               371              371              0               25.00                   9,275.00          9,275.00
      9               371              371              0               25.00                   9,275.00          9,275.00
     10               371              371              0               25.00                   9,275.00          9,275.00
-------------------------------------------------------------------------------------------------------------------------------
                     3,470            3,320            150                                   $ 93,530.00       $ 97,880.00

I.     Sum of (Delivered Energy times corresponding hourly Market Price)        Sec 7.2.1    $ 93,530.00
         IT.   Sum of (Asset Bundle Capacity times corresponding hourly Market Price)                          $ 97,880.00

J.     Sum of hourly Delivered Energy multiplied by the Price Ceiling of Energy Sec 7.2.2    $153,981.60
         JT.   Sum of hourly Asset Bundle Capacity multiplied by the Price Ceiling of Energy                   $160,938.60

K.     Sum of hourly Delivered Energy multiplied by the Price Floor of Energy    Sec 7.2.3   $108,497.60
</TABLE>

                                      C-3
<PAGE>

<TABLE>
<S>                                                                                                            <C>
         KT.   Sum of hourly Asset Bundle Capacity multiplied by the Price Floor of Energy                     $113,399.60

L.    Invoiced Amount - Energy                   Sec 7.3               (I ** K)             $  108,497.60

M.    Theoretical Amount for Expected Performance                      (IT ** KT)                               $113,399.60
</TABLE>
**  Less than
*** Greater than
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.

                                      C-4
<PAGE>

                                   EXHIBIT D
                  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
          ---                -----------                ----------------               ---------            --------------
                                                                                                             (A x B) + C
          <S>                <C>                        <C>                         <C>                   <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                                        $140,755.00
G.     Actual Supplier's Invoice Amount                                                                       133,755.00
                                                                                                     -----------------------
H.     Avoided Payment to Supplier                                  (F - G)                                  $  7,000.00
I.     Invoiced Replacement Cost - Energy                           (E ** H)                                 $      0.00
</TABLE>

**  Less than
*** Greater than

MONTH 1 - ANCILLARY SERVICE CAPACITY - SPINNING RESERVE
-------------------------------------------------------

<TABLE>
<CAPTION>
                                  J                           K *                         L *                     M
        Dispatch             Replacement                Replacement Cost           Replacement Cost       Gross Replacement
          Hour              Capacity (MW)              of Capacity ($/MW)             of Capacity          Cost of Capacity
          ----              -------------              ------------------             -----------          ----------------
                                                                                                            (J x K) + L
        <S>                 <C>                        <C>                         <C>                    <C>
            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

N.     Gross Replacement Cost of Ancillary Capacity - Spinning Reserve                                     $    900.00
O.     Theoretical Supplier's Invoice Amount for Expected Performance                                      $  2,057.60
P.     Actual Supplier's Invoice Amount                                                                       1,800.40
                                                                                                  -----------------------
Q.     Avoided Payment to Supplier                                              (O -  P)                   $    257.20
R.     Invoiced Replacement Cost - Ancillary Capacity                           (N > Q)                    $    642.80
</TABLE>

                                     D-1
<PAGE>

                                   EXHIBIT D
                  BUYER'S MONTHLY INVOICE - REPLACEMENT COSTS

MONTH 1 - ANCILLARY CAPACITY - SUPPLEMENTAL 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 x T) + U
        <S>                 <C>                        <C>                         <C>                    <C>

            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

W.     Gross Replacement Cost of Ancillary Capacity - Supplemental Reserve                                 $      0.00

X.     Theoretical Supplier's Invoice Amount for Expected Performance                                      $     45.90
Y.     Actual Supplier's Invoice Amount                                                                          45.90
                                                                                                    -----------------------
Z.     Avoided Payment to Supplier                                  (X - Y)                                $      0.00

AA.    Invoiced Replacement Cost - Ancillary Capacity               (W = Z)                                $      0.00
</TABLE>

MONTH 1 - ANCILLARY SERVICE ENERGY
----------------------------------

<TABLE>
<CAPTION>
                                 AB                          AC *                       AD *                     AE
        Dispatch            Replacement                Replacement Cost           Replacement Cost       Gross Replacement
          Hour              Energy (MWh)              of Energy ($/MWh)             of Energy **           Cost of Energy
          ----              ------------              -----------------             ------------           --------------
                                                                                                           (AB x AC) + AD
        <S>                 <C>                       <C>                         <C>                    <C>
            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

AF.     Gross Replacement Cost of Ancillary Energy                                                         $  1,020.00
AG.     Theoretical Supplier's Invoice Amount for Expected Performance                                     $  3,710.40
AH.     Actual Supplier's Invoice Amount                                                                      2,782.80
                                                                                                          -----------------------
AI.     Avoided Payment to Supplier                                        (AG - AH)                       $    927.60

AJ.  Invoiced Replacement Cost - Ancillary Energy                          (AF > AI)                       $     92.40
</TABLE>

                                     D-2
<PAGE>

                                   EXHIBIT D
                  BUYER'S MONTHLY INVOICE - REPLACEMENT COSTS

<TABLE>
<CAPTION>
MONTH 1 - TOTAL INVOICE AMOUNT                                                      (I + R + AA + AJ)              $    735.20
=================================================================================================================================

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
          ----            ------------              -----------------               ---------            --------------
                                                                                                          (A x B) + C
        <S>               <C>                       <C>                         <C>                    <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                                    $  160,938.60
G.     Actual Supplier's Invoice Amount                                                                     153,981.60
                                                                                                    -----------------------
H.     Avoided Payment to Supplier                                                    (F - G)            $    6,957.00

I.     Invoiced Replacement Cost - Energy                                             (E > H)            $      723.00
</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
          ----            ------------              -----------------               ---------            --------------
                                                                                                           (A x B) + C
        <S>               <C>                       <C>                         <C>                    <C>
            1                  0                                   na                 $  0.00                   0.00
            2                  0                                   na                    0.00                   0.00
            3                 60                                37.00                  100.00               2,320.00
            4                 60                                34.00                   50.00               2,090.00
            5                 10                                34.00                    0.00                 340.00
            6                  0                                   na                    0.00                   0.00
            7                 20                                31.00                   50.00                 670.00
            8                  0                                   na                    0.00                   0.00
            9                  0                                   na                    0.00                   0.00
           10                  0                                   na                    0.00                   0.00
-----------------------------------------------------------------------------------------------------------------------------
                             150                                                                        $   5,420.00

E.     Gross Replacement Cost of Energy                                                                 $   5,420.00
F.     Theoretical Supplier's Invoice Amount for Expected Performance                                   $ 113,399.60
                                                                                                        ------------
</TABLE>

                                      D-3
<PAGE>

                                   EXHIBIT D
                  BUYER'S MONTHLY INVOICE - REPLACEMENT COSTS

<TABLE>
<S>                                                                                    <C>               <C>
G.     Actual Supplier's Invoice Amount                                                                           108,497.60
                                                                                                          -----------------------
H.     Avoided Payment to Supplier                                                     (F - G)             $          4,902.00
I.     Invoiced Replacement Cost - Energy                                              (E > H)             $            518.00
</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.

                                   EXHIBIT E
                           YEAR END TRUE-UP INVOICE

    A    Price Ceiling of Energy       $       46.38/MWh
    B    Price Floor of Energy         $       32.68/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                    3,320          $  133,755.00        $  153,981.60          $  108,497.60        $  133,755.00
             2                    3,320             161,445.00           153,981.60             108,497.60           153,981.60
             3                    3,320              93,530.00           153,981.60             108,497.60           108,497.60
             4                    3,710             185,500.00           172,069.80             121,242.80           172,069.80
             5                    3,710             170,660.00           172,069.80             121,242.80           170,660.00
             6                    3,510             161,460.00           162,793.80             114,706.80           161,460.00
             7                    3,710             178,080.00           172,069.80             121,242.80           172,069.80
             8                    3,710             181,790.00           172,069.80             121,242.80           172,069.80
             9                    3,170             158,500.00           147,024.60             103,595.60           147,024.60
            10                    3,710             174,370.00           172,069.80             121,242.80           172,069.80
            11                    3,710             207,760.00           172,069.80             121,242.80           172,069.80
            12                    3,410             173,910.00           158,155.80             111,438.80           158,155.80
-------------------------------------------------------------------------------------------------------------------------------
           Total                 42,310          $1,980,760.00        $1,962,337.80          $1,382,690.80        $1,893,883.60

(Total of Column D) > (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)                  $   68,454.20
I.    Average Cost of Delivered Energy after True-up ($/MWh)                 (Total E / Total C)                  $       46.38
</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                                  723.00
             3             150                                         5,420.00                                  518.00
             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
</TABLE>

                                      D-4
<PAGE>

                                   EXHIBIT E
                           YEAR END TRUE-UP INVOICE

<TABLE>
<S>         <C>            <C>        <C>                     <C>                  <C>                  <C>
            10               0                                         0.00                                    0.00
            11               0                                         0.00                                    0.00
            12               0                                         0.00                                    0.00
-------------------------------------------------------------------------------------------------------------------
           Total           450        $   20,871.00           $   18,000.00        $   0.00             $  1,241.00

O.    Annual True-up - Replacement Costs                               (Total N - Total M)              $  1,241.00

Total Annual True-up *                                                         (H + O)                  $ 69,695.20
===================================================================================================================
</TABLE>

EXAMPLE 2
---------

<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                      3,320        $  133,755.00           $  153,981.60        $  108,497.60        $  133,755.00
             2                      3,320           161,445.00              153,981.60           108,497.60           153,981.60
             3                      3,320            93,530.00              153,981.60           108,497.60           108,497.60
             4                      3,710           140,980.00              172,069.80           121,242.80           140,980.00
             5                      3,710           137,270.00              172,069.80           121,242.80           137,270.00
             6                      3,510           119,340.00              162,793.80           114,706.80           119,340.00
             7                      3,710           185,500.00              172,069.80           121,242.80           172,069.80
             8                      3,710           192,920.00              172,069.80           121,242.80           172,069.80
             9                      3,170           120,460.00              147,024.60           103,595.60           120,460.00
            10                      3,710           129,850.00              172,069.80           121,242.80           129,850.00
            11                      3,710           163,240.00              172,069.80           121,242.80           163,240.00
            12                      3,410           132,990.00              158,155.80           111,438.80           132,990.00
--------------------------------------------------------------------------------------------------------------------------------
           Total                   42,310        $1,711,280.00           $1,962,337.80        $1,382,690.80        $1,684,503.80

(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)                  $   26,776.20
I.    Average Cost of Delivered Energy after True-up ($/MWh)                  (Total D / Total C)                  $       40.45
</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                                    723.00
             3                150                                         5,420.00                                    518.00
             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        $   18,200.80               $   18,000.00        $        0.00        $    1,241.00
</TABLE>

                                      E-2
<PAGE>

                                   EXHIBIT E
                           YEAR END TRUE-UP INVOICE

<TABLE>
<S>                                                                                     <C>                    <C>
O.    Annual True-up - Replacement Costs                                               (Total N - Total M)     $    1,241.00

Total Annual True-up *                                                                        (H + O)          $   28,017.20
==================================================================================================================================
</TABLE>

EXAMPLE 3
---------

<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             3,320          $  133,755.00        $  153,981.60        $  108,497.60        $  133,755.00
             2             3,320             161,445.00           153,981.60           108,497.60           153,981.60
             3             3,320              93,530.00           153,981.60           108,497.60           108,497.60
             4             3,710             133,560.00           172,069.80           121,242.80           133,560.00
             5             3,710             126,140.00           172,069.80           121,242.80           126,140.00
             6             3,510             112,320.00           162,793.80           114,706.80           114,706.80
             7             3,710             111,300.00           172,069.80           121,242.80           121,242.80
             8             3,710             129,850.00           172,069.80           121,242.80           129,850.00
             9             3,170             104,610.00           147,024.60           103,595.60           104,610.00
            10             3,710             122,430.00           172,069.80           121,242.80           122,430.00
            11             3,710             107,590.00           172,069.80           121,242.80           121,242.80
            12             3,410             102,300.00           158,155.80           111,438.80           111,438.80
----------------------------------------------------------------------------------------------------------------------
           Total          42,310          $1,438,830.00        $1,962,337.80        $1,382,690.80        $1,481,455.40

(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)      $  (42,625.40)
I.  Average Cost of Delivered Energy after True-up ($/MWh)                      (Total D / Total C)      $       34.01
</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                                    723.00
             3               150                                     5,420.00                                    518.00
             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         $   15,303.08          $   18,000.00        $    2,696.92        $    1,241.00

O.    Annual True-up - Replacement Costs                                       (Total N - Total M)        $   (1,455.92)
========================================================================================================================
</TABLE>

                                      E-3
<PAGE>

                                   EXHIBIT E
                             YEAR TRUE-UP INVOICE

<TABLE>
<S>                                                                       <C>                  <C>
Total Annual True-up *                                                    (H + O)              $  (44,081.32)
==================================================================================================================================
</TABLE>

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                    3,320          $  133,755.00        $  153,981.60        $  108,497.60        $  133,755.00
             2                    3,320             161,445.00           153,981.60           108,497.60           153,981.60
             3                    3,320              93,530.00           153,981.60           108,497.60           108,497.60
             4                    3,710              81,620.00           172,069.80           121,242.80           121,242.80
             5                    3,710              63,070.00           172,069.80           121,242.80           121,242.80
             6                    3,510              80,730.00           162,793.80           114,706.80           114,706.80
             7                    3,710              85,330.00           172,069.80           121,242.80           121,242.80
             8                    3,710              51,940.00           172,069.80           121,242.80           121,242.80
             9                    3,170              57,060.00           147,024.60           103,595.60           103,595.60
            10                    3,710              70,490.00           172,069.80           121,242.80           121,242.80
            11                    3,710              44,520.00           172,069.80           121,242.80           121,242.80
            12                    3,410              64,790.00           158,155.80           111,438.80           111,438.80
-----------------------------------------------------------------------------------------------------------------------------
           Total                 42,310          $  988,280.00        $1,962,337.80        $1,382,690.80        $1,453,432.20

(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)            $  (70,741.40)
I.    Average Cost of Delivered Energy after True-up ($/MWh)                     (Total F / Total C)            $       32.68
</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                                    723.00
             3                     150                                        5,420.00                                    518.00
             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        $   14,706.00              $   18,000.00        $    3,294.00        $    1,241.00

O.    Annual True-up - Replacement Costs                                         (Total N - Total M)               $   (2,053.00)

Total Annual True-up *                                                                 (H + O)                     $  (72,794.40)
==================================================================================================================================
</TABLE>

* 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-4
<PAGE>

                                   EXHIBIT F
                   NOTICES, BILLING AND PAYMENT INSTRUCTIONS

<TABLE>
<CAPTION>
Supplier:
--------
<S>                                     <C>                            <C>
a) Agreement Notices:                   Reliant Energy Sunrise, LLC
   -----------------                    Contract Administration
                                        Mail:   P.O. Box 4455          Courier:   1111 Louisiana Street
                                                Houston, TX  77210-4455           Houston, TX 77002
                                        Phone:  (703) 207-1300
                                        Fax:    (703) 207-9562

                        Copies to:      Reliant Energy, Incorporated
                                        Attention: General Counsel, Wholesale Group
                                        Mail:   P.O. Box 61867         Courier:   1111 Louisiana St, 43 Floor
                                                Houston, TX 77208                 Houston, TX 77002
                                        Fax:    (713) 207-0116

b) Payment Check:                       Reliant Energy Sunrise, LLC
   -------------                        P.O. Box 201142
                                        Houston, TX 77216-1142

c) Payment Wire Transfer:               Bank:   Chase Bank of Texas
   ---------------------                ABA #:  113 000 609
                                        For:    Reliant Energy Sunrise, LLC
                                        Account No:  0010-261-2158

d) Invoices:                            Reliant Energy Sunrise, LLC
   --------                             Power Accounting
                                        Mail:   P.O. Box 4455          Courier:   1111 Louisiana Street
                                                Houston, TX 77210-4455            Houston, TX 77002
                                        Phone:  (713) 207-3573
                                        Fax:    (713) 207-9975

e) Operating Notifications:
   -----------------------
     i)  Pre-Schedule:                  Phone:  (713) 207-1215
                                        Fax:    (713) 207-1135
     ii) Real Time:                     Phone:  (713) 207-1215
                                        Fax:    (713) 207-1224

    iii) Monthly Checkout               Phone:  (713) 207-3845
         Person: Matt Griffin           Fax:    (713) 207-9975
</TABLE>

                                      F-1
<PAGE>

Buyer:
-----

<TABLE>
<S>                                      <C>                                         <C>
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

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
Availability                Hour        Available from     Total Derating      Permitted        Asset Bundle    Available from
    Date                    Ending       Unit 1 (MW)       of Unit 1 (MW)     Derating of     Capacity of Unit   Unit 2 (MW)
    ----                    ------      ------------       -------------     of Unit 1 (MW)               ----   -----------
                                                                             --------------        1 (MW)
                                                                                                   -----
<S>                         <C>         <C>                <C>               <C>              <C>              <C>
                                       (A  ** or = ___)    (___ - A)          (C ** or = B)         (A - C)    (E  ** or = ___)
                             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>
                                         F                 G                H              I**                      J
Availability        Hour         Total Derating of     Permitted       Asset Bundle    Alternative   Cause and Expected Duration of
  Date            Ending            Unit 2 (MW)       Derating of       Capacity of    Point(s) of   Deratings and Identification of
  ----            ------            -----------       Unit 2 (MW)      Unit 2 (MW)      Delivery          Permitted Deratings
                                                      -----------      ------------     --------          -------------------
                                     (___ - E)       (B ** or = F)         (G - E)
<S>               <C>            <C>                  <C>              <C>             <C>            <C>
                    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 will 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.
**  Less than
*** Greater than
                                      G-1
<PAGE>

                                   EXHIBIT H
                               FORM OF GUARANTY

       This Guaranty is entered into as of December 9, 2000 by Reliant Energy
Power Generation, Inc., a Delaware corporation ("Guarantor"), on behalf of
Reliant Energy Sunrise, 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 December 9, 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 Sunrise/Sunpeak 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 guaranty the Supplier's obligations under the TPPA in an
amount not to exceed the Credit Amount (as defined in the TPPA) (the "Guaranteed
Obligations").

       1.  Guaranty. Guarantor irrevocably and unconditionally guaranties, as
primary obligor and not merely as surety, the due and punctual payment in full
of all Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations when and as the same shall
become due, Guarantor will upon demand pay, or cause to be paid, in cash, to
NPC, an amount equal to the aggregate of the unpaid Guaranteed Obligations.  In
the event Guarantor fails to pay the Guaranteed 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.

       2. Expenses.  The 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 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 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.

                                      H-1
<PAGE>

       3.  Guaranty Absolute; Continuing Guaranty.  The obligations of Guarantor
hereunder are 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 Guaranteed
Obligations.  In furtherance of the foregoing and without limiting the
generality thereof, Guarantor agrees that:  (a) this Guaranty is a guaranty of
payment when due and not of collectibility; (b) the obligations of Guarantor
hereunder are independent of the obligations of Supplier under the TPPA and a
separate action or actions may be brought and prosecuted against 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) Guarantor's payment of
a portion, but not all, of the Guaranteed Obligations shall in no way limit,
affect, modify or abridge Guarantor's liability for any portion of the
Guaranteed Obligations that has not been paid.  This Guaranty is a continuing
guaranty and shall be binding upon Guarantor 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 Guaranty or giving rise to any limitation, impairment or discharge of
Guarantor's liability hereunder, (a) renew, extend, accelerate or otherwise
change the time, place, manner or terms of payment of the Guaranteed
Obligations, (b) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guaranteed
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 Guaranteed Obligations and take and hold security for the
payment of this Guaranty or the Guaranteed Obligations, (d) release, exchange,
compromise, subordinate or modify, with or without consideration, any security
for payment of the Guaranteed Obligations, any other guaranties of the
Guaranteed Obligations, or any other obligation of any Person with respect to
the Guaranteed Obligations, (e) enforce and apply any security  hereafter held
by or for the benefit of the Beneficiary in respect of this Guaranty or the
Guaranteed 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 Guaranty and the obligations of 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 Guaranteed 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 Guaranteed Obligations or any
agreement relating thereto, or with respect to any other guaranty of or security
for the payment of the Guaranteed Obligations, (b) any waiver or modification
of, or any consent to departure from, any of the terms or provisions of any
other guaranty or security for the Guaranteed Obligations, (c) the Guaranteed
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
Guaranteed Obligations, even if the Beneficiary might have elected to apply such
payment to any part or all of the Guaranteed Obligations, (e) any failure to
perfect or continue perfection of a security interest in any collateral which
secures any of the Guaranteed

                                      H-2
<PAGE>

Obligations, (f) any defenses, set-offs or counterclaims which the Supplier may
assert against the Beneficiary in respect of the Guaranteed Obligations,
including but not limited to failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction, 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 Guarantor as
an obligor in respect of the Guaranteed Obligations.

       6. Waivers for the Benefit of Beneficiary.  Guarantor waives, for the
benefit of Beneficiary:  (a) any right to require the Beneficiary, as a
condition of payment or performance by Guarantor, to (i) proceed against the
Supplier, any other guarantor of the Guaranteed Obligations or any other Person,
(ii) proceed against or exhaust any security held from the Supplier, any other
guarantor of the Guaranteed 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 Guaranteed 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
Guaranteed 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 Guaranty and any legal or equitable discharge of
Guarantor's obligations hereunder, (ii) the benefit of any statute of
limitations affecting Guarantor's 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 Guaranty; 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 Guaranty.

       7.  Waiver of Rights Against Supplier. Guarantor waives any claim, right
or remedy, direct or indirect, that Guarantor now has or may hereafter have
against the Supplier or any of its assets in connection with this Guaranty or
the performance by 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 indemnification that 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. 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 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.

                                      H-3
<PAGE>

       8.  Representations and Warranties of Guarantor.  Guarantor represents
and warrants to NPC as follows:

       (a) Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation.  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) Guarantor has the corporate power and authority to execute and
deliver this Guaranty and to consummate the transactions contemplated hereby.
The execution and delivery of this Guaranty and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Guarantor, and no other corporate proceedings on the part
of Guarantor, including the approval of its shareholders, are necessary to
authorize this Guaranty or to consummate the transactions so contemplated.  This
Guaranty has been duly and validly executed and delivered by Guarantor and
constitutes a valid and binding agreement of Guarantor, enforceable against
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 Guarantor's
knowledge) threatened against 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.

       (d) The representations and warranties made herein will remain true until
Guarantor has fulfilled all 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
Guarantor to the Beneficiary under this Guaranty, 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 Guarantor and any other property of Guarantor held
by the Beneficiary to or for the credit or the account of Guarantor against and
on account of the Guaranteed Obligations and liabilities of Guarantor to the
Beneficiary under this Guaranty.

       10.  Disputes.  Any action, claim or dispute arising out of or relating
to this Guaranty (any such action, claim or dispute, a "Dispute") shall be
submitted in writing to the other Party.  In the event Guarantor and NPC are
unable to resolve the Dispute satisfactorily within thirty (30) days from the
receipt of notice of the Dispute, either Guarantor or NPC may initiate
arbitration through the serving and filing of a demand for arbitration.
Guarantor 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 Guaranty 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.

                                      H-4
<PAGE>

       11.  Amendments and Waivers.  No amendment, modification, termination or
waiver of any provision of this Guaranty, and no consent to any departure by
Guarantor therefrom, shall in any event be effective without the written
concurrence of NPC and, in the case of any such amendment or modification,
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 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 Guaranty 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.

          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 case any provision in or obligation under this Guaranty 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 Guaranty 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
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 Guarantor, addressed to:

                Reliant Energy Power Generation, Inc.
                Attention: Vice President - Finance
                Mail:      P.O. Box 286
                           Houston, TX 77001-0286
                Courier:   1111 Louisiana Street
                           Houston, TX  77002

                                      H-5
<PAGE>

            Facsimile:  (713) 207-9916

      with a copy to:
              Reliant Energy, Incorporated
              Attention: General Counsel, Wholesale Group
              Mail:      P.O. Box 61867
                         Houston, TX 77210-1867
              Courier:   1111 Louisiana Street, 43/rd/ Floor
                         Houston, TX 77002
      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.

                                ____________________
                    By:         J. Douglas Divine
                    Title:      Senior Vice President
                                Reliant Energy Power Generation, Inc.
                    By Mail:    P.O. Box 286
                                Houston, TX 77001-0286
                    By Courier: 111 Louisiana Street
                                Houston, TX 77002

                                      H-6
<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/

                                      I-1
<PAGE>

                                   EXHIBIT J
                          ADJUSTMENTS TO TPPA AMOUNT

                    Monthly                                     Monthly
    Month          Adjustment                 Month           Adjustment
---------------------------------      -------------------------------------
    Mar-01               0.0%               Mar-02                   2.4%
    Apr-01               3.0%               Apr-02                   3.2%
    May-01               3.3%               May-02                   2.9%
    Jun-01               6.1%               Jun-02                   5.4%
    Jul-01              11.2%               Jul-02                  12.7%
    Aug-01              13.2%               Aug-02                  13.0%
    Sep-01               7.2%               Sep-02                  10.8%
    Oct-01               1.3%               Oct-02                   1.6%
    Nov-01               0.6%               Nov-02                   0.0%
    Dec-01               0.7%               Dec-02                   0.1%
    Jan-02               3.3%               Jan-03                   0.8%
    Feb-02               2.6%               Feb-03                   0.9%

Example 1 - Effective Date of Agreement is April 15, 2001

A.  TPPA Amount:                                $
                    B              C               D
                 Monthly        Applicable     Applicable
    Month       Adjustment       Portion *     Adjustment
----------------------------------------------------------
                                                 (B x C)
     Apr-01         3.0%              50.0%         1.5%
     May-01         3.3%             100.0%         3.3%
-----------------------------------------------------------
    Total                                           4.8%

E.  Total of Monthly Applicable Adjustments                                4.8%
F   Adjusted TPPA Amount                    (A x (1+D))            $15,720,000
===============================================================================

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
-------------------------------------------------------------
                                                 (H x I)
     Jun-01          6.1%           100.0%            6.1%
     Jul-01         11.2%           100.0%           11.2%
     Aug-01         13.2%           100.0%           13.2%
     Sep-01          7.2%            50.0%            3.6%
--------------------------------------------------------------
    Total                                            34.1%

                                     J-1
<PAGE>

                                   EXHIBIT J
                          ADJUSTMENTS TO TPPA AMOUNT

K.  Total of Monthly Applicable Adjustments                                34.1%
L   Adjusted TPPA Amount                      (G x (1-K))           $ 9,885,000
================================================================================

Example 3 - Termination Date of December 31, 2002

M.  TPPA Amount:                 $  15,000,000

                        N              O                 P
                      Monthly       Applicable        Applicable
     Month           Adjustment     Portion **        Adjustment
--------------------------------------------------------------------
                                                       (N x O)
      Jan-03            0.8%           100.0%                0.8%
      Feb-03            0.9%           100.0%                0.9%
---------------------------------------------------------------------
     Total                                                   1.7%

Q.  Total of Monthly Applicable Adjustments                                1.7%
R   Payment Amount                               (M x Q)           $   255,000
===============================================================================
*  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
                      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)                                                             310,000
I.  Revised Minimum Annual Take (MWh)                                        (G x H)                     277,605

             J                        K
        Month During            Applicable Min.
        Contract Year          Annual Take (MWh)
------------------------------------------------
             1                           310,000
             2                           310,000
             3                           310,000
             4                           310,000
             5                           277,605
             6                           277,605
             7                           277,605
             8                           263,500
             9                           263,500
            10                           248,000
            11                           248,000
            12                           248,000
------------------------------------------------
           Total                       3,343,815

L.  Minimum Take for Contract Year (MWh)                           (Total of K / 12)                     278,651
</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
                   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                  371           371                                                     371
 2                  371           371                                                     371
 3                  371           371                                                     371
 4                  371           371                                                     371
 5                  371           371                                                     371
 6                  371           351             20                                      371
 7                  371           351             20                                      371
 8                  371           351                                         20          371
 9                  371           371                                                     371
10                  371           371                                                     371
11                  371           371                                                     371
12                  371           371                                                     371
13                  371             0                          371                        371
14                  371             0                          371                        371
15                  371             0                          371                        371
16                  371             0                          371                        371
17                  371           321                                         30          351
18                  371           371                                                     371
19                  371           371                                                     371
20                  371           371                                                     371
21                  371           371                                                     371
22                  371           371                                                     371
23                  371           371                                                     371
24                  341           341                                                     341
25                  321           321                                                     321
26                  291           291                                                     291
27                  321           291             30                                      321
28                  341           341                                                     341
29                  371           371                                                     371
30                  371           371                                                     371
31                  371           371                                                     371
32                  371           371                                                     371
33                  371           371                                                     371
34                  371           371                                                     371
35                  371           371                                                     371
36                  371           371                                                     371
---------------------------------------------------------------------------------------------
total            13,116        11,492             70         1,484            50       13,096
</TABLE>

                                      L-1
<PAGE>

                                   EXHIBIT L
                   ENERGY APPLICABLE TO MINIMUM ANNUAL TAKE

*  Includes energy excused because of Supplier's and Buyer's events of Force
   Majeure
** G cannot be greater than B

                                      L-2

<PAGE>

                                   EXHIBIT M
                    CONTRACTUAL AND OPERATIONAL CONSTRAINTS

1.   For the purposes of this Exhibit M, "Constrained Capacity" shall mean that
     portion of the capacity available from Sunpeak Units 3, 4 and 5 that is
     subject to contractual and operational constraints identified in this
     Exhibit M.  The contractual and operational constraints of the SPPCA
     constituting Constrained Capacity are:
     (a)    The Sunpeak units shall be deemed to operate at 3,495 hours per
            calendar year based on the physical availability of natural gas,/1/
            whether or not generated at the Asset Bundle, the El Dorado
            Generating Station, or another source in accordance with Section
            4.1.1.1; provided that, for the first calendar year in which the
            Effective Date occurs, any Constrained Capacity used prior to the
            Effective Date shall count against such annual limit;
     (b)    Each Sunpeak unit shall not operate for greater than twelve (12)
            operating hours per day; and
     (c)    Each Sunpeak unit may operate at reduced capacity resulting from a
            Performance Test (as defined in the SPPCA); provided that, such
            reduction in capacity shall only be deemed Constrained Capacity
            during Non-Peak Periods (as defined in the SPPCA).

2.   To the extent Supplier has delivered Buyer's calendar year annual limit of
     Constrained Capacity in accordance with Buyer's requests hereunder, then
     the Asset Bundle Capacity (i) shall be reduced by 222 MWs and such
     reduction shall be a Permitted Derating and (ii) the reduction in the Asset
     Bundle Capacity associated with Constrained Capacity shall occur regardless
     of whether or not any of the delivered Constrained Capacity was actually
     generated at the Asset Bundle, the El Dorado Generating Station, or another
     source in accordance with Section 4.1.1.1.  The capacity of Sunpeak Units
     3, 4, and 5 beyond Constrained Capacity limitations identified in
     paragraphs 1(b) and 1(c) above also shall be a Permitted Derating.

3.   To the extent Buyer's requested Supply Amount during any hour does not
     exceed the total capacity of Sunrise Units 1 and 2 not otherwise subject to
     a Permitted Derating, the operational constraints of this Exhibit M shall
     not apply to such Supply Amount.  Rather, the Supply Amount shall be deemed
     to have been delivered from units other than Sunpeak Units 3, 4 and 5,
     regardless of the actual source of generation.

________________________
/1/The number of operating hours per unit shall be decreased in accordance with
   the environmental permits for the SunPeak Units if those units are operated
   on oil.

                                      M-1

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