Document:

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                                                                   Exhibit 10(O)

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                           Financing Agreement No. 1

                           Dated as of June 1, 2000

                                By and Between

                             Clark County, Nevada

                                      and

                             Nevada Power Company

                                  Relating To
                Industrial Development Refunding Revenue Bonds
                        (Nevada Power Company Project)
                                 Series 2000A

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         The amounts payable to the Issuer (except for amounts payable to, and
certain rights and privileges of, the Issuer under Sections 4.2(e), 4.2(g), 5.3
and 6.4 hereof and any rights of the Issuer to receive any notices,
certificates, requests, requisitions or communications hereunder) and certain
other rights of the Issuer under this Financing Agreement No. 1 have been
pledged and assigned under the Indenture of Trust No. 1 dated as of June 1,
2000, between the Issuer and The Bank of New York, as Trustee.
<PAGE>

                           Financing Agreement No. 1

                                --------------

                               TABLE OF CONTENTS

            (This Table of Contents is not a part of this Agreement
                  and is only for convenience of reference).

<TABLE>
<CAPTION>
Section                                                Heading                                            Page
<S>                   <C>                                                                                 <C>
Article I             Definitions.......................................................................     1

Article II            Representations...................................................................     4

       Section 2.1.   Representations and Covenants by the Issuer.......................................     4
       Section 2.2.   Representations by the Company....................................................     5

Article III           Issuance of The Bonds.............................................................     6

       Section 3.1.   Agreement to Issue Bonds; Application of Bond Proceeds............................     6
       Section 3.2.   Deposit of Additional Funds by Company; Redemption of Prior Bonds.................     6
       Section 3.3.   Investment of Moneys in the Bond Fund and the Prior Bonds Redemption
                          Fund..........................................................................     6
       Section 3.4.   Tax Exempt Status of Bonds........................................................     7

Article IV            Loan and Provisions for Repayment.................................................     8

       Section 4.1.   Loan of Bond Proceeds.............................................................     8
       Section 4.2.   Loan Repayments and Other Amounts Payable.........................................     8
       Section 4.3.   No Defense or Set-Off.............................................................    10
       Section 4.4.   Payments Pledged and Assigned.....................................................    10
       Section 4.5.   Payment of the Bonds and Other Amounts............................................    10

Article V             Special Covenants and Agreements..................................................    11

       Section 5.1.   Company to Maintain its Corporate Existence; Conditions Under Which
                          Exceptions Permitted..........................................................    11
       Section 5.2.   Annual Statement..................................................................    11
       Section 5.3.   Maintenance and Repair; Insurance; Taxes; Disposition.............................    11
       Section 5.4.   Recordation and Other Instruments.................................................    12
       Section 5.5.   No Warranty by the Issuer.........................................................    12
       Section 5.6.   Agreement as to Ownership of the Project..........................................    12
       Section 5.7.   Company to Furnish Notice of Adjustments of Interest Rate Periods.................    12
       Section 5.8.   Information Reporting, Etc........................................................    12
       Section 5.9.   Limited Liability of Issuer.......................................................    13
</TABLE>
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<TABLE>
<S>                   <C>                                                                                   <C>
       Section 5.10.  Inspection of Project.............................................................    13

Article VI            Events of Default and Remedies....................................................    13

       Section 6.1.   Events of Default Defined.........................................................    13
       Section 6.2.   Remedies on Default...............................................................    15
       Section 6.3.   No Remedy Exclusive...............................................................    16
       Section 6.4.   Agreement to Pay Fees and Expenses of Counsel.....................................    16
       Section 6.5.   No Additional Waiver Implied by One Waiver; Consents to Waivers...................    16

Article VII           Options and Obligations of Company; Prepayments; Redemption of Bonds..............    17

       Section 7.1.   Option to Prepay..................................................................    17
       Section 7.2.   Obligation to Prepay..............................................................    17
       Section 7.3.   Notice of Prepayment..............................................................    17

Article VIII          Miscellaneous.....................................................................    18

       Section 8.1.   Notices...........................................................................    18
       Section 8.2.   Assignments.......................................................................    18
       Section 8.3.   Severability......................................................................    18
       Section 8.4.   Execution of Counterparts.........................................................    18
       Section 8.5.   Amounts Remaining in Bond Fund....................................................    18
       Section 8.6.   Amendments, Changes and Modifications.............................................    19
       Section 8.7.   Governing Law.....................................................................    19
       Section 8.8.   Authorized Issuer and Company Representatives.....................................    19
       Section 8.9.   Term of the Agreement.............................................................    19
       Section 8.10.  Cancellation at Expiration of Term................................................    19
       Section 8.11.  Bond Insurance....................................................................    20

Signature...............................................................................................    21
</TABLE>

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     This Financing Agreement No. 1 made and entered into as of June 1, 2000, by
and between Clark County, Nevada, a political subdivision of the State of
Nevada, party of the first part (hereinafter referred to as the "Issuer"), and
Nevada Power Company, a corporation duly organized and existing under the laws
of the State of Nevada, party of the second part (hereinafter referred to as the
"Company"),

                             W i t n e s s e t h:

     In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided, that in
the performance of the agreements of the Issuer herein contained, any obligation
it may thereby incur shall not constitute or give rise to a pecuniary liability
or a charge upon its general credit or against its taxing powers but shall be
payable solely out of the Revenues (as hereinafter defined) derived from this
Financing Agreement and the Bonds, as hereinafter defined):

                                   Article I

                                  Definitions

     The following terms shall have the meanings specified in this Article
unless the context clearly requires otherwise.  The singular shall include the
plural and the masculine shall include the feminine.

     "Act" means the County Economic Development Revenue Bond Law, as amended,
contained in Sections 244A.669 to 244A.763, inclusive, of the Nevada Revised
Statutes.

     "Act of Bankruptcy" means the filing of a petition in bankruptcy by or
against the Company or the Issuer under the Bankruptcy Code.

     "Administrative Expenses" means the reasonable and necessary expenses
(including the reasonable value of employee services and fees of Counsel)
incurred by the Issuer in connection with the Bonds, this Agreement, the
Indenture and any transaction or event contemplated by this Agreement or the
Indenture.

     "Agreement" means this Financing Agreement No. 1 by and between the Issuer
and the Company, as from time to time amended and supplemented.

     "Auction Agent" means the auction agent appointed in accordance with
Section 2.03(e)(iv) of the Indenture.

     "Authorized Company Representative" means any person who, at the time,
shall have been designated to act on behalf of the Company by a written
certificate furnished to the Issuer, the Remarketing Agent and the Trustee
containing the specimen signature of such person and
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signed on behalf of the Company by any officer of the Company. Such certificate
may designate an alternate or alternates.

     "Authorized Issuer Representative" means any person at the time designated
to act on behalf of the Issuer by a written certificate furnished to the Company
and the Trustee containing the specimen signature of such person and signed on
behalf of the Issuer by its Chairman.  Such certificate may designate an
alternate or alternates.

     "Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978, as
amended from time to time, or any substitute or replacement legislation.

     "Bond" or "Bonds" means the Issuer's bonds identified in Section 2.02 of
the Indenture.

     "Bond Counsel" means the Counsel who renders the opinion as to the tax-
exempt status of interest on the Bonds or other nationally recognized municipal
bond counsel mutually acceptable to the Issuer and the Company.

     "Bond Fund" means the fund created by Section 6.02 of the Indenture.

     "Code" means the United States Internal Revenue Code of 1986, as amended,
and regulations promulgated or proposed thereunder.

     "Company" means Nevada Power Company, a Nevada corporation, and its
successors and assigns and any surviving, resulting or transferee corporation as
permitted in Section 5.1 hereof.

     "Counsel" means an attorney at law or a firm of attorneys (who may be an
employee of or counsel to the Issuer or the Company or the Trustee) duly
admitted to the practice of law before the highest court of any state of the
United States of America or of the District of Columbia.

     "Extraordinary Services" and "Extraordinary Expenses" means all services
rendered and all expenses (including fees and expenses of Counsel) incurred
under the Indenture and the Tax Agreement other than Ordinary Services and
Ordinary Expenses.

     "Force Majeure" means acts of God, strikes, lockouts or other industrial
disturbances; acts of public enemies; orders or restraints of any kind of the
governments of the United States or of the State, or any of their departments,
agencies or officials, or any civil or military authority; insurrections; riots;
landslides; lightning; earthquakes; fires; tornadoes; volcanoes; storms;
droughts; floods; explosions, breakage, or malfunction or accident to machinery,
transmission lines, pipes or canals, even if resulting from negligence; civil
disturbances; or any other cause not reasonably within the control of the
Company.

     "Governing Body" means the Board of County Commissioners of the Issuer.

                                      -2-
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     "Hereof," "herein," "hereunder" and other words of similar import refer to
this Agreement as a whole.

     "Indenture" means the Indenture of Trust No. 1 relating to this Agreement
between the Issuer and The Bank of New York, as Trustee, of even date herewith,
pursuant to which the Bonds are authorized to be issued, including any
indentures supplemental thereto or amendatory thereof.

     "Insider" shall have the meaning set forth in the Bankruptcy Code.

     "Issuer" means Clark County, Nevada, and any successor body to the duties
or functions of the Issuer.

     "Moody's" means Moody's Investors Service, Inc., a corporation organized
and existing under the laws of the State of Delaware, its successors and their
assigns, and, if such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, "Moody's" shall be
deemed to refer to any other nationally recognized securities rating agency
designated by the Company and acceptable to the Bank Agent, with notice to the
Trustee.

     "Ordinary Services" and "Ordinary Expenses" means those services normally
rendered and those expenses including fees and expenses of Counsel, normally
incurred by a trustee or paying agent under instruments similar to the Indenture
and the Tax Agreement.

     "Owner" or "owner of Bonds" means the Person or Persons in whose name or
names a Bond shall be registered on books of the Issuer kept by the Registrar
for that purpose in accordance with the terms of the Indenture.

     "Person" means natural persons, firms, partnerships, associations,
corporations, trusts and public bodies.

     "Prior Agreement" means the Financing Agreement, dated as of June 1, 1990,
between the Issuer and the Company relating to the Prior Bonds.

     "Prior Bonds" means the Issuer's Industrial Development Revenue Bonds
(Nevada Power Company Project) Series 1990, currently outstanding in the
aggregate principal amount of $100,000,000.

     "Prior Bond Fund" means the fund established pursuant to Section 5.02 of
the Prior Indenture.

     "Prior Indenture" means the Indenture of Trust, dated as of June 1, 1990,
between the Issuer and the Prior Trustee, pursuant to which the Prior Bonds were
issued.

     "Prior Trustee" means United States Trust Company of New York, as trustee
under the Prior Indenture.

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<PAGE>

     "Project" means the Project as defined in the Prior Agreement.

     "Project Certificate" means the Company's Project and Refunding
Certificate, delivered concurrently with the issuance of the Bonds, with respect
to certain facts which are within the knowledge of the Company and certain
reasonable assumptions of the Company, to enable Chapman and Cutler, as Bond
Counsel, to determine that interest on the Bonds is not includable in the gross
income of the Owners of the Bonds for federal income taxes purposes.

     "Rebate Fund" means the Rebate Fund, if any, created and established
pursuant to the Tax Agreement.

     "Remarketing Agent" means the remarketing agent appointed in accordance
with Section 4.08 of the Indenture and any permitted successor thereto.

     "S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., a corporation organized and existing under the laws of the State of New
York, its successors and their assigns, and if such division or corporation
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Company and acceptable to
the Bank Agent, with notice to the Trustee.

     "State" means the State of Nevada.

     "Tax Agreement" means the Tax Exemption Certificate and Agreement No. 1
with respect to the Bonds, dated the date of delivery of the Bonds, among the
Company, the Issuer and the Trustee, as from time to time amended and
supplemented.

     "Trust Estate" means the property conveyed to the Trustee pursuant to the
Granting Clauses of the Indenture.

     "Trustee" means The Bank of New York, as Trustee under the Indenture, and
any successor Trustee appointed pursuant to Section 10.06 or 10.09 of the
Indenture at the time serving as Trustee thereunder, and any separate or co-
trustee serving as such thereunder.

     All other terms used herein which are defined in the Indenture shall have
the same meanings assigned them in the Indenture unless the context otherwise
requires.

                                  Article II

                                Representations

  Section 2.1. Representations and Covenants by the Issuer. The Issuer makes the
following representations and covenants as the basis for the undertakings on its
part herein contained:

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            (a) The Issuer is a duly organized and existing political
     subdivision of the State of Nevada.  Under the provisions of the Act, the
     Issuer is authorized to enter into the transactions contemplated by this
     Agreement, the Indenture and the Tax Agreement and to carry out its
     obligations hereunder and thereunder.  The Issuer has duly authorized the
     execution and delivery of this Agreement, the Indenture and the Tax
     Agreement.

            (b) The Bonds are to be issued under and secured by the Indenture,
     pursuant to which certain of the Issuer's interests in this Agreement and
     the Revenues derived by the Issuer pursuant to this Agreement will be
     pledged and assigned as security for payment of the principal of, premium,
     if any, and interest on, the Bonds.

            (c) The Governing Body of the Issuer has found that the issuance of
     the Bonds will further the public purposes of the Act.

            (d) The Issuer has not assigned and will not assign any of its
     interests in this Agreement other than pursuant to the Indenture.

            (e) No member of the Governing Body of the Issuer, nor any other
     officer of the Issuer, has any interest, financial (other than ownership of
     less than one-tenth of one percent (.1%) of the publicly traded securities
     issued by the Company or its affiliated corporations), employment or other,
     in the Company or in the transactions contemplated hereby.

   Section 2.2.  Representations by the Company.  The Company makes the
following representations as the basis for the undertakings on its part herein
contained:

            (a) The Company is a corporation duly incorporated under the laws of
     the State and is in good standing in the State, is qualified to do business
     as a foreign corporation in all other states and jurisdictions wherein the
     nature of the business transacted by the Company or the nature of the
     property owned or leased by it makes such licensing or qualification
     necessary, has power to enter into and by proper corporate action has been
     duly authorized to execute and deliver this Agreement and the Tax
     Agreement.

            (b) Neither the execution and delivery of this Agreement or the Tax
     Agreement, the consummation of the transactions contemplated hereby and
     thereby, nor the fulfillment of or compliance with the terms and conditions
     of this Agreement and the Tax Agreement, conflicts with or results in a
     breach of any of the terms, conditions or provisions of any corporate
     restriction or any agreement or instrument to which the Company is now a
     party or by which it is bound, or constitutes a default under any of the
     foregoing, or results in the creation or imposition of any lien, charge or
     encumbrance whatsoever upon any of the property or assets of the Company
     under the terms of any instrument or agreement other than the Indenture.

            (c) The statements, information and descriptions contained in the
     Project Certificate and the Tax Agreement, as of the date hereof and at the
     time of the delivery of

                                      -5-
<PAGE>

     the Bonds to the Underwriter, are and will be true, correct and complete,
     do not and will not contain any untrue statement or misleading statement of
     a material fact, and do not and will not omit to state a material fact
     required to be stated therein or necessary to make the statements,
     information and descriptions contained therein, in the light of the
     circumstances under which they were made, not misleading.

                                  Article III

                             Issuance of the Bonds

   Section 3.1.  Agreement to Issue Bonds; Application of Bond Proceeds. In
order to provide funds to lend to the Company to refund the Prior Bonds as
provided in Section 4.1 hereof, the Issuer agrees that it will issue under the
Indenture, sell and cause to be delivered to the Underwriter, its Bonds in the
aggregate principal amount of $100,000,000, bearing interest and maturing as set
forth in the Indenture. The Issuer will thereupon deposit the proceeds received
from the sale of the Bonds as follows: (1) in the Bond Fund, a sum equal to any
accrued interest, if any, paid by the Underwriter; and (2) $100,000,000 in the
Prior Bonds Redemption Fund to be remitted by the Trustee to the Prior Trustee
for deposit in the Prior Bond Fund to be used to pay to the owners thereof the
principal of the Prior Bonds upon redemption thereof.

   Section 3.2.  Deposit of Additional Funds by Company; Redemption of Prior
Bonds. The Company covenants that such additional amounts as may be required to
redeem the Prior Bonds will be deposited with the Prior Trustee pursuant to the
Prior Indenture for such purpose. Income derived from the investment of the
proceeds of the Bonds deposited in the Prior Bonds Redemption Fund will be used
to satisfy the obligations of the Company specified in this Section 3.2. The
Company covenants that it will cause the Prior Bonds to be redeemed within 90
days after the issuance and delivery of the Bonds.

   Section 3.3.  Investment of Moneys in the Bond Fund and the Prior Bonds
Redemption Fund. Except as otherwise herein provided, any moneys held as a part
of the Bond Fund and the Prior Bonds Redemption Fund shall be invested or
reinvested by the Trustee at the specific written direction of an Authorized
Company Representative as to specific investments, to the extent permitted by
law, in:

            (a) bonds or other obligations of the United States of America;

            (b) bonds or other obligations, the payment of the principal of and
     interest on which is unconditionally guaranteed by the United States of
     America;

            (c) obligations issued or guaranteed as to principal and interest by
     any agency or person controlled or supervised by and acting as an
     instrumentality of the United States of America pursuant to authority
     granted by the Congress of the United States of America;

                                      -6-
<PAGE>

            (d) obligations issued or guaranteed by any state of the United
     States of America, or any political subdivision of any such state, or in
     funds consisting of such obligations to the extent described in Treasury
     Regulation 1.148-8(e)(3)(iii);

            (e)  prime commercial paper;

            (f)  prime finance company paper;

            (g) bankers' acceptances drawn on and accepted by commercial banks;

            (h) repurchase agreements fully secured by obligations issued or
     guaranteed as to principal and interest by the United States of America or
     by any person controlled or supervised by and acting as an instrumentality
     of the United States of America pursuant to authority granted by the
     Congress of the United States of America;

            (i) certificates of deposit issued by commercial banks, including
     banks domiciled outside of the United States of America; and

            (j) units of taxable government money market portfolios composed of
     obligations guaranteed as to principal and interest by the United States of
     America or repurchase agreements fully collateralized by such obligations.

     The investments so purchased shall be held by the Trustee and shall be
deemed at all times a part of the fund for which they were made and the interest
accruing thereon and any profit realized therefrom shall be credited to such
fund, subject to the provisions of the Tax Agreement.  The Company agrees that
to the extent any moneys in the Bond Fund represent moneys held for the payment
of particular Bonds or moneys held for the payment of the purchase price of
Bonds pursuant to Article IV of the Indenture, such moneys shall not be
invested.

   Section 3.4.  Tax Exempt Status of Bonds.  The Company covenants and agrees
that it has not taken or permitted and will not take or permit any action which
results in interest paid on the Bonds being included in gross income of the
holders or beneficial owners of the Bonds for purposes of federal income
taxation (other than a holder or beneficial owner who is a "substantial user" of
the Project or a "related person" within the meaning of Section 147(a) of the
Code). The Company covenants that none of the proceeds of the Bonds or the
payments to be made under this Agreement, or any other funds which may be deemed
to be proceeds of the Bonds pursuant to Section 148(a) of the Code, will be
invested or used in such a way, and that no actions will be taken or not taken,
as to cause the Bonds to be treated as "arbitrage bonds" within the meaning of
Section 148(a) of the Code. Without limiting the generality of the foregoing,
the Company covenants and agrees that it will comply with the provisions of the
Tax Agreement and the Project Certificate.

                                      -7-
<PAGE>

                                  Article IV

                       Loan and Provisions for Repayment

   Section 4.1.  Loan of Bond Proceeds.  (a) The Issuer agrees, upon the terms
and conditions in this Agreement, to lend to the Company the proceeds (exclusive
of accrued interest, if any) received by the Issuer from the sale of the Bonds
in order to refund the Prior Bonds and the Company agrees to apply the gross
proceeds of such loan to the refunding of the Prior Bonds.

      (b) The Issuer and the Company expressly reserve the right to enter into,
to the extent permitted by law, an agreement or agreements other than this
Agreement, with respect to the issuance by the Issuer, under an indenture or
indentures other than the Indenture, of obligations to provide additional funds
to refund all or any principal amount of the Bonds.

   Section 4.2.  Loan Repayments and Other Amounts Payable.  (a) On each date
provided in or pursuant to the Indenture for the payment (whether at maturity or
upon redemption or acceleration) of principal of, and premium, if any, and
interest on, the Bonds, until the principal of, and premium, if any, and
interest on, the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, the Company shall
pay to the Trustee in immediately available funds, for deposit in the Bond Fund,
as a repayment installment of the loan of the proceeds of the Bonds pursuant to
Section 4.1(a) hereof, a sum equal to the amount payable on such date (whether
at maturity or upon redemption or acceleration) as principal of, and premium, if
any, and interest on, the Bonds as provided in the Indenture; provided, however,
that the obligation of the Company to make any such repayment installment shall
be reduced by the amount of any moneys then on deposit in the Bond Fund and
available for such payment.

      (b) The Company shall pay to the Trustee amounts equal to the amounts to
be paid by the Trustee for the purchase of Bonds pursuant to Article IV of the
Indenture.  Such amounts shall be paid by the Company to the Trustee in
immediately available funds on the date such payments pursuant to Section 4.05
of the Indenture are to be made; provided, however, that the obligation of the
Company to make any such payment shall be deemed to be satisfied and discharged
to the extent moneys are available from the source described in clause (i) of
Section 4.05(a) of the Indenture.

      (c) The Company agrees to pay to the Trustee (i) the fees of the Trustee
for the Ordinary Services rendered by it and an amount equal to the Ordinary
Expenses incurred by it under the Indenture and the Tax Agreement, as and when
the same become due, and (ii) the reasonable fees, charges and expenses of the
Trustee for reasonable Extraordinary Services and Extraordinary Expenses, as and
when the same become due, incurred under the Indenture and the Tax Agreement.
The Company agrees that the Trustee, its officers, agents, servants and
employees, shall not be liable for, and agrees that it will at all times
indemnify and hold harmless the Trustee, its officers, agents, servants and
employees against, and pay all expenses of the Trustee, its

                                      -8-
<PAGE>

officers, agents, servants and employees, relating to any lawsuit, proceeding or
claim and resulting from any action or omission taken or made by or on behalf of
the Trustee, its officers, agents, servants and employees pursuant to this
Agreement, the Indenture or the Tax Agreement, that may be occasioned by any
cause (other than the negligence or willful misconduct of the Trustee, its
officers, agents, servants and employees). In case any action shall be brought
against the Trustee in respect of which indemnity may be sought against the
Company, the Trustee shall promptly notify the Company in writing and the
Company shall be entitled to assume control of the defense thereof, including
the employment of Counsel and the payment of all expenses. The Trustee shall
have the right to employ separate Counsel in any such action and participate in
the defense thereof, but the fees and expenses of such Counsel shall be paid by
the Trustee unless the employment of such Counsel has been authorized by the
Company. The Company shall not be liable for any settlement of any such action
without its consent, but if any such action is settled with the consent of the
Company or if there be final judgment for the plaintiff in any such action, the
Company agrees to indemnify and hold harmless the Trustee from and against any
loss or liability by reason of such settlement or final judgment. The Company
agrees that the indemnification provided herein shall survive the termination of
this Agreement or the Indenture or the resignation of the Trustee.

      (d) The Company agrees to pay all costs incurred in connection with the
issuance of the Bonds from sources other than Bond proceeds and the Issuer shall
have no obligation with respect to such costs.

      (e) The Company agrees to indemnify and hold harmless the Issuer and any
member, officer, official or employee of the Issuer against any and all losses,
costs, charges, expenses, judgments and liabilities created by or arising out of
this Agreement, the Indenture, the Remarketing Agreement, the Auction Agreement,
the Bond Purchase Agreement, any Broker-Dealer Agreement or the Tax Agreement or
otherwise incurred in connection with the issuance of the Bonds.  The Company
agrees to pay the Issuer its Closing Fee in connection with the issuance of the
Bonds in the amount of $50,000.  The Issuer may submit to the Company periodic
statements, not more frequently than monthly, for its Administrative Expenses
and the Company shall make payment to the Issuer of the full amount of each such
statement within 30 days after the Company receives such statement.

      (f) The Company agrees to pay (i) to the Remarketing Agent the reasonable
fees, charges and expenses of such Remarketing Agent and (ii) to the Auction
Agent the reasonable fees, charges and expenses of such Auction Agent, and the
Issuer shall have no obligation or liability with respect to the payment of any
such fees, charges or expenses.

      (g) In the event the Company shall fail to make any of the payments
required by (a) or (b) of this Section 4.2, the payment so in default shall
continue as an obligation of the Company until the amount in default shall have
been fully paid and the Company will pay interest to the extent permitted by
law, on any overdue amount at the rate of interest borne by the Bonds on the
date on which such amount became due and payable until paid.  In the event that
the Company shall fail to make any of the payments required by (c), (d), (e) or
(f) of this Section 4.2, the payment so in default shall continue as an
obligation of the Company until the amount in default shall have been fully
paid, and the Company agrees to pay the same with interest thereon to the extent
permitted by law at a rate 1% above the rate of interest then charged by the
Trustee on 90-day commercial loans to its prime commercial borrowers until paid.

                                      -9-
<PAGE>

   Section 4.3.  No Defense or Set-Off.  The obligation of the Company to make
the payments pursuant to this Agreement shall be absolute and unconditional
without defense or set-off by reason of any default by the Issuer under this
Agreement or under any other agreement between the Company and the Issuer or for
any other reason, it being the intention of the parties that the payments
required hereunder will be paid in full when due without any delay or diminution
whatsoever.

   Section 4.4.  Payments Pledged and Assigned.  It is understood and agreed
that all payments required to be made by the Company pursuant to Section 4.2
hereof (except payments made to the Trustee pursuant to Section 4.2(c) hereof,
to the Remarketing Agent and the Auction Agent pursuant to Section 4.2(f)
hereof, to the Issuer pursuant to Section 4.2(e) hereof and to any or all the
Issuer and the Trustee and the Remarketing Agent pursuant to Section 4.2(g)
hereof) and certain rights of the Issuer hereunder are pledged and assigned by
the Indenture. The Company consents to such pledge and assignment. The Issuer
hereby directs the Company and the Company hereby agrees to pay or cause to be
paid to the Trustee all said amounts except payments to be made to the
Remarketing Agent and the Auction Agent pursuant to Section 4.2(f) hereof and
payments to be made to the Issuer pursuant to Sections 4.2(e) and (g) hereof.
The Project will not constitute any part of the security for the Bonds.

   Section 4.5.  Payment of the Bonds and Other Amounts.  The Bonds and interest
and premium, if any, thereon shall be payable solely from (i) payments made by
the Company to the Trustee under Section 4.2(a) hereof and (ii) other moneys on
deposit in the Bond Fund and available therefor.

     Payments of principal of, and premium, if any, or interest on, the Bonds
with moneys in the Bond Fund constituting proceeds from the sale of the Bonds or
earnings on investments made under the provisions of the Indenture shall be
credited against the obligation to pay required by Section 4.2(a) hereof.

     Whenever any Bonds are redeemable in whole or in part at the option of the
Company, the Trustee, on behalf of the Issuer, shall redeem the same upon the
request of the Company and such redemption (unless conditional) shall be made
from payments made by the Company to the Trustee under Section 4.2(a) hereof
equal to the redemption price of such Bonds.

     Whenever payment or provision therefor has been made in respect of the
principal of, or premium, if any, or interest on, all or any portion of the
Bonds in accordance with the Indenture (whether at maturity or upon redemption
or acceleration or upon provision for payment in accordance with Article VIII of
the Indenture), payments shall be deemed paid to the extent such payment or
provision therefor has been made and is considered to be a payment of principal
of, or premium, if any, or interest on, such Bonds.  If such Bonds are thereby
deemed paid in full, the Trustee shall notify the Company and the Issuer that
such payment requirement has been satisfied.  Subject to the foregoing, or
unless the Company is entitled to a credit under this Agreement or the
Indenture, all payments shall be in the full amount required by Section 4.2(a)
hereof.

                                      -10-
<PAGE>

                                  Article V

                       Special Covenants and Agreements

   Section 5.1.  Company to Maintain its Corporate Existence; Conditions Under
Which Exceptions Permitted. The Company agrees that during the term of this
Agreement, it will maintain its corporate existence and its good standing in the
State, will not dissolve or otherwise dispose of all or substantially all of its
assets and will not consolidate with or merge into another corporation unless
(a) the acquirer of its assets or the corporation with which it shall
consolidate or into which it shall merge shall (i) be a corporation organized
under the laws of one of the states of the United States of America, (ii) be
qualified to do business in the State, (iii) be a public utility, and (iv)
assume in writing all of the obligations of the Company under this Agreement and
the Tax Agreement.

     Any transfer of all or substantially all of the Company's generation
assets shall not be deemed to constitute a "disposition of all or substantially
all of the Company's assets" within the meaning of the preceding paragraph. Any
such transfer of the Company's generation assets shall not relieve the Company
of any of its obligations under this Agreement.

   Section 5.2. Annual Statement. The Company agrees to have an annual audit
made by its regular independent certified public accountants and to furnish the
Trustee (within 30 days after receipt by the Company) with a balance sheet and
statement of income and surplus showing the financial condition of the Company
and its consolidated subsidiaries, if any, at the close of each fiscal year and
the results of operations of the Company and its consolidated subsidiaries, if
any, for each fiscal year, accompanied by a report of said accountants that such
statements have been prepared in accordance with generally accepted accounting
principles. The Company's obligations under this Section 5.2 may be satisfied by
delivering a copy of the Company's Annual Report to the Trustee at the same time
that it is mailed to stockholders.

     Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on officer's certificates).

   Section 5.3.  Maintenance and Repair; Insurance; Taxes; Disposition. For so
long as the Company shall own the Project, (i) the Company shall maintain or
cause to be maintained the Project in good repair and keep it properly insured
and shall promptly pay or cause to be paid all costs thereof, and (ii) the
Company shall promptly pay or cause to be paid all installments of taxes,
installments of special assessments, and all governmental, utility and other
charges with respect to the Project, when due. The Company may, at its own
expense and in its own name in good faith contest or appeal any such taxes,
assessments or other charges, or installments thereof, but shall not permit any
such taxes, assessments or other charges, or installments thereof, to remain
unpaid if such nonpayment shall subject the Project or any part thereof to loss
or forfeiture. The Company, subject to the provisions of Section 3.4 hereof, is
not required by this

                                      -11-
<PAGE>

Agreement to operate, or cause to be operated, any portion of the Project after
the Company shall deem in its discretion that such continued operation is not
advisable, and in such event the Company may sell, lease or retire all or any
such portion of the Project. Subject to the provisions of Section 3.4 hereof,
the net proceeds from such sale, lease or other disposition, if any, shall
belong to, and may be used for any lawful purpose by, the Company. Upon
disposition of the Project in its entirety by the Company in accordance with
this Section 5.3, the Company shall be discharged from its obligations to
operate, maintain, repair and insure the Project as set forth in this Section
5.3. Any such sale, lease or other disposition shall comply with the
requirements of the Tax Agreement. Under any and all circumstances, the Issuer
shall have no obligation whatsoever with respect to the operation, maintenance,
repair or insurance of the Project.

   Section 5.4. Recordation and Other Instruments. The Company shall cause such
security agreements, financing statements and all supplements thereto and other
instruments as may be required from time to time to be kept, to be recorded and
filed in such manner and in such places as may be required by law in order to
fully preserve, protect and perfect the security of the Owners of the Bonds and
the rights of the Trustee, and to perfect the security interest created by the
Indenture. The Company agrees to abide by the provisions of Section 5.11 of the
Indenture to the extent applicable to the Company.

   Section 5.5. No Warranty by the Issuer. The Issuer makes no warranty, either
express or implied, as to the Project or that it will be suitable for the
purposes of the Company or needs of the Company.

   Section 5.6.  Agreement as to Ownership of the Project. The Issuer and the
Company agree that title to the Project shall not be in the Issuer, and that the
Issuer shall have no interest in the Project.

   Section 5.7.  Company to Furnish Notice of Adjustments of Interest Rate
Periods. The Company is hereby granted the option to designate from time to time
changes in Rate Periods (and to rescind such changes) in the manner and to the
extent set forth in Section 2.03 of the Indenture. In the event the Company
elects to exercise any such option, the Company agrees that it shall cause
notices of adjustments of Rate Periods (or rescissions thereof) to be given to
the Issuer, the Trustee and the Remarketing Agent in accordance with Section
2.03(a), (b), (c), (d) or (e) of the Indenture, and a copy of each such notice
shall also be given at such time to S&P and Moody's.

   Section 5.8.  Information Reporting, Etc..  The Issuer covenants and agrees
that, upon the direction of the Company or Bond Counsel, it will mail or cause
to be mailed to the Secretary of the Treasury (or his designee as prescribed by
regulation, currently the Internal Revenue Service Center, Ogden, Utah) a
statement setting forth the information required by Section 149(e) of the Code,
which statement shall be in the form of the Information Return for Tax-Exempt
Private Activity Bond Issues (Form 8038) of the Internal Revenue Service (or any
successor form) and which shall be completed by the Company and Bond Counsel
based in part upon information supplied by the Company and Bond Counsel.

                                      -12-
<PAGE>

   Section 5.9.  Limited Liability of Issuer.  Any obligation or liability of
the Issuer created by or arising out of this Agreement or otherwise incurred in
connection with the issuance of the Bonds (including without limitation any
liability created by or arising out of the representations, warranties or
covenants set forth herein or otherwise) shall not impose a debt or pecuniary
liability upon the Issuer or the State or any political subdivision thereof, or
a charge upon the general credit or taxing powers of any of the foregoing, but
shall be payable solely out of the Revenues or other amounts payable by the
Company to the Issuer hereunder or otherwise (including without limitation any
amounts derived from indemnifications given by the Company).

     Neither the issuance of the Bonds nor the delivery of this Agreement shall,
directly or indirectly or contingently, obligate the Issuer or the State or any
political subdivision thereof to levy any form of taxation therefor or to make
any appropriation for their payment.  Nothing in the Bonds or in the Indenture
or this Agreement or the proceedings of the Issuer authorizing the Bonds or in
the Act or in any other related document shall be construed to authorize the
Issuer to create a debt of the Issuer or the State or any political subdivision
thereof within the meaning of any constitutional or statutory provision of the
State.  The principal of, and premium, if any, and interest on, the Bonds shall
be payable solely from the funds pledged for their payment in accordance with
the Indenture and available therefor under this Agreement.  Neither the State
nor any political subdivision thereof shall in any event be liable for the
payment of the principal of, premium, if any, or interest on, the Bonds or for
the performance of any pledge, obligation or agreement of any kind whatsoever
which may be undertaken by the Issuer.  No breach of any such pledge, obligation
or agreement may impose any pecuniary liability upon the Issuer or the State or
any political subdivision thereof, or any charge upon the general credit or
against the taxing power of the Issuer or the State or any political subdivision
thereof.

   Section 5.10.  Inspection of Project.  The Company agrees that the Issuer and
the Trustee and their duly authorized representatives shall have the right at
all reasonable times to enter upon and examine and inspect the Project property
and shall also be permitted, at all reasonable times, to examine the books and
records of the Company insofar as they relate to the Project.

                                  Article VI

                        Events of Default and Remedies

   Section 6.1.  Events of Default Defined.  The following shall be "events of
default" under this Agreement and the terms "event of default" or "default"
shall mean, whenever they are used in this Agreement, any one or more of the
following events:

            (a) Failure by the Company to pay when due any amounts required to
     be paid under Section 4.2(a) hereof, which failure results in an event of
     default under subparagraph (a) or (b) of Section 9.01 of the Indenture; or

                                      -13-
<PAGE>

            (b) Failure by the Company to pay or cause to be paid any payment
     required to be paid under Section 4.2(b) hereof, which failure results in
     an event of default under subparagraph (c) of Section 9.01 of the
     Indenture; or

            (c) Failure by the Company to observe and perform any covenant,
     condition or agreement on its part to be observed or performed in this
     Agreement, other than as referred to in (a) and (b) above, for a period of
     90 days after written notice, specifying such failure and requesting that
     it be remedied and stating that such notice is a "Notice of Default"
     hereunder, given to the Company by the Trustee or to the Company and the
     Trustee by the Issuer, unless the Issuer and the Trustee shall agree in
     writing to an extension of such time prior to its expiration; provided,
     however, if the failure stated in the notice cannot be corrected within the
     applicable period, the Issuer and the Trustee will not unreasonably
     withhold their consent to an extension of such time if corrective action is
     instituted within the applicable period and diligently pursued until the
     failure is corrected and such corrective action or diligent pursuit is
     evidenced to the Trustee by a certificate of an Authorized Company
     Representative; or

            (d) A proceeding or case shall be commenced, without the application
     or consent of the Company, in any court of competent jurisdiction seeking
     (i) liquidation, reorganization, dissolution, winding-up or composition or
     adjustment of debts, (ii) the appointment of a trustee, receiver,
     custodian, liquidator or the like of the Company or of all or any
     substantial part of its assets, or (iii) similar relief under any law
     relating to bankruptcy, insolvency, reorganization, winding-up or
     composition or adjustment of debts, and such proceeding or cause shall
     continue undismissed, or an order, judgment, or decree approving or
     ordering any of the foregoing shall be entered and shall continue in effect
     for a period of 90 days; or an order for relief against the Company shall
     be entered against the Company in an involuntary case under the Bankruptcy
     Code (as now or hereafter in effect) or other applicable law; or

            (e) The Company shall admit in writing its inability to pay its
     debts generally as they become due or shall file a petition in voluntary
     bankruptcy or shall make any general assignment for the benefit of its
     creditors, or shall consent to the appointment of a receiver or trustee of
     all or substantially all of its property, or shall commence a voluntary
     case under the Bankruptcy Code (as now or hereafter in effect), or shall
     file in any court of competent jurisdiction a petition seeking to take
     advantage of any other law relating to bankruptcy, insolvency,
     reorganization, winding-up or composition or adjustment of debts, or shall
     fail to controvert in a timely or appropriate manner, or acquiesce in
     writing to, any petition filed against it in an involuntary case under such
     Bankruptcy Code or other applicable law; or

            (f) Dissolution or liquidation of the Company; provided that the
     term "dissolution or liquidation of the Company" shall not be construed to
     include the cessation of the corporate existence of the Company resulting
     either from a merger or consolidation of the Company into or with another
     corporation or a dissolution or liquidation of the Company following a
     transfer of all or substantially all of its assets as

                                      -14-
<PAGE>

     an entirety, under the conditions permitting such actions contained in
     Section 5.1 hereof; or

            (g) The occurrence of an "event of default" under the Indenture.

The foregoing provisions of Section 6.1(c) are subject to the following
limitations:  If by reason of Force Majeure the Company is unable in whole or in
part to carry out its agreements on its part herein contained, other than the
obligations on the part of the Company contained in Article IV and Sections 5.3
and 6.4 hereof, the Company shall not be deemed in default during the
continuance of such inability.  The Company agrees, however, to remedy with all
reasonable dispatch the cause or causes preventing the Company from carrying out
its agreements; provided that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Company
and the Company shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the opposing
party or parties when such course is in the sole judgment of the Company
unfavorable to the Company.

   Section 6.2.  Remedies on Default.  Whenever any event of default referred to
in Section 6.1 hereof shall have happened and be continuing, the Trustee, as
assignee of the Issuer:

            (a) shall, by notice in writing to the Company, declare the unpaid
     indebtedness under Section 4.2(a) hereof to be due and payable immediately,
     if concurrently with or prior to such notice the unpaid principal amount of
     the Bonds shall have been declared to be due and payable, and upon any such
     declaration the same (being an amount sufficient, together with other
     moneys available therefor in the Bond Fund, to pay the unpaid principal of,
     premium, if any, and interest accrued on, the Bonds) shall become and shall
     be immediately due and payable as liquidated damages; and

            (b) may take whatever action at law or in equity as may appear
     necessary or desirable to collect the payments and other amounts then due
     and thereafter to become due hereunder or to enforce performance and
     observance of any obligation, agreement or covenant of the Company under
     this Agreement.

     Any amounts collected pursuant to action taken under this Section 6.2 shall
be paid into the Bond Fund (unless otherwise provided in this Agreement) and
applied in accordance with the provisions of the Indenture.  No action taken
pursuant to this Section 6.2 shall relieve the Company from the Company's
obligations pursuant to Section 4.2 hereof.

     No recourse shall be had for any claim based on this Agreement against any
officer, director or stockholder, past, present or future, of the Company as
such, either directly or through the Company, under any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or by
any legal or equitable proceeding or otherwise.

     Nothing herein contained shall be construed to prevent the Issuer from
enforcing directly any of its rights under Sections 4.2(e), 4.2(g), 5.3 and 6.4
hereof.

                                      -15-
<PAGE>

          Section 6.3.  No Remedy Exclusive.  No remedy herein conferred upon or
reserved to the Issuer is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute.  No delay or omission to exercise
any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power
may be exercised from time to time and as often as may be deemed expedient.  In
order to entitle the Issuer or the Trustee to exercise any remedy reserved to it
in this Article, it shall not be necessary to give any notice, other than such
notice as may be herein expressly required.  Subject to the provisions of the
Indenture and hereof, such rights and remedies as are given the Issuer hereunder
shall also extend to the Trustee.  The Owners of the Bonds, subject to the
provisions of the Indenture, shall be entitled to the benefit of all covenants
and agreements herein contained.

          Section 6.4.  Agreement to Pay Fees and Expenses of Counsel.  In the
event the Company should default under any of the provisions of this Agreement
and the Issuer or the Trustee should employ Counsel or incur other expenses for
the collection of the indebtedness hereunder or the enforcement of performance
or observance of any obligation or agreement on the part of the Company herein
contained, the Company agrees that it will on demand therefor pay to the
Trustee, the Issuer or, if so directed by the Issuer, to the Counsel for the
Issuer, the reasonable fees and expenses of such Counsel and such other expenses
so incurred by or on behalf of the Issuer or the Trustee.

          Section 6.5.  No Additional Waiver Implied by One Waiver; Consents to
Waivers.  In the event any agreement contained in this Agreement should be
breached by either party and thereafter waived by the other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to
waive any other breach hereunder.  No waiver shall be effective unless in
writing and signed by the party making the waiver.  The Issuer shall have no
power to waive any default hereunder by the Company without the consent of the
Trustee to such waiver.  The Trustee shall have the power to waive any default
by the Company hereunder, except a default under Section 3.4, 4.2(e), 4.2(g),
5.3 or 6.4 hereof, in so far as it pertains to the Issuer, without the prior
written concurrence of the Issuer.  Notwithstanding the foregoing, if, after the
acceleration of the maturity of the outstanding Bonds by the Trustee pursuant to
Section 9.02 of the Indenture, (i) all arrears of principal of and interest on
the outstanding Bonds and interest on overdue principal and (to the extent
permitted by law) on overdue installments of interest at the rate of interest
borne by the Bonds on the date on which such principal or interest became due
and payable and the premium, if any, on all Bonds then Outstanding which have
become due and payable otherwise than by acceleration, and all other sums
payable under the Indenture, except the principal of and the interest on such
Bonds which by such acceleration shall have become due and payable, shall have
been paid, (ii) all other things shall have been performed in respect of which
there was a default, (iii) there shall have been paid the reasonable fees and
expenses of the Trustee and of the Owners of such Bonds, including reasonable
attorneys' fees paid or incurred and (iv) such event of default under the
Indenture shall be waived in accordance with Section 9.09 of the Indenture with
the consequence that such acceleration under Section 9.02 of the Indenture is
rescinded, then the Company's default hereunder shall be deemed to have been
waived and its consequences rescinded and no further action or consent by the
Trustee or the Issuer shall be required; provided that there has been furnished
an opinion of

                                      -16-
<PAGE>

Bond Counsel to the effect that such waiver will not adversely affect the
exemption from federal income taxes of interest on the Bonds.

                                  Article VII

                      Options and Obligations of Company;
                        Prepayments; Redemption of Bonds

          Section 7.1.  Option to Prepay.  The Company shall have, and is hereby
granted, the option to prepay the payments due hereunder in whole or in part at
any time or from time to time (a) to provide for the redemption of Bonds
pursuant to the provisions of Section 3.01(A) of the Indenture or (b) to provide
for the defeasance of the Bonds pursuant to Article VIII of the Indenture.  In
the event the Company elects to provide for the redemption of Bonds as permitted
by this Section, the Company shall notify and instruct the Trustee in accordance
with Section 7.3 hereof to redeem all or any portion of the Bonds in advance of
maturity.  If the Company so elects, any redemption of Bonds pursuant to Section
3.01(A) of the Indenture may be made conditional.

          Section 7.2.  Obligation to Prepay.  The Company covenants and agrees
that if all or any part of the Bonds are unconditionally called for redemption
in accordance with the Indenture or become subject to mandatory redemption, it
will prepay the indebtedness hereunder in whole or in part, prior to the date on
which notice of such redemption is given to the owners of such Bonds, in an
amount sufficient to redeem such Bonds on the date fixed for the redemption of
the Bonds.

          Section 7.3.  Notice of Prepayment.  Upon the exercise of the option
granted to the Company in Section 7.1 hereof, or upon the Company having
knowledge of the occurrence of any event requiring mandatory redemption of the
Bonds in accordance with Section 3.01(B) of the Indenture, the Company shall
give written notice to the Issuer, the Bank, the Remarketing Agent, the Auction
Agent and the Trustee.  The notice shall provide for the date of the application
of the prepayment made by the Company hereunder to the retirement of the Bonds
in whole or in part pursuant to call for redemption and shall be given by the
Company not less than 45 days prior to the date of the redemption which is to
occur as a result of such prepayment (or such later date as is acceptable to the
Trustee and the Issuer), and in the case of a redemption of Bonds pursuant to
Section 3.01(B) of the Indenture shall be given on a date which will permit the
redemption of the Bonds within the time required by Section 3.01(B) of the
Indenture.

                                 Article VIII

                                 Miscellaneous

          Section 8.1.  Notices.  Except as otherwise provided herein, all
notices, certificates or other communications hereunder shall be sufficiently
given if in writing and shall be deemed given when mailed by first class mail,
postage prepaid, or by qualified overnight courier service, courier charges
prepaid, or by facsimile (receipt of which is orally confirmed) addressed as

                                      -17-
<PAGE>

follows:  if to the Issuer, at 500 South Grand Central Parkway, 6th Floor
(89106), P.O. Box 551601, Las Vegas, Nevada 89155-1601, or to telecopy number
(702) 455-3558, Attention: County Manager; if to the Company, at P.O. Box 230,
6226 West Sahara Avenue, Las Vegas, Nevada 89146, or to telecopy number (702)
367-5864, Attention: Treasurer; if to the Trustee, at 101 Barclay Street - 8W,
New York, New York 10286, or to telecopy number (212) 815-5096, Attention:
Corporate Trust Trustee Administration; if to the Remarketing Agent, at Lehman
Brothers, Inc., 200 Vesey Street, New York, New York 10285, Attention: Steve
Peters, or to telecopy number (212) 526-3738; and if to the Auction Agent, at
The Bank of New York, 100 Church Street, 14th Floor, New York, New York, 10286,
Attention: Dealing & Trading Group, Auction Desk, or to telecopy number (212)
437-7255.  In case by reason of the suspension of regular mail service, it shall
be impracticable to give notice by first class mail of any event to the Issuer,
to the Company, to the Remarketing Agent, to the Auction Agent when such notice
is required to be given pursuant to any provisions of this Agreement, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be sufficient giving of such notice.  The Issuer, the Company, the
Trustee, the Remarketing Agent and the Auction Agent may, by notice pursuant to
this Section 8.1, designate any different addresses to which subsequent notices,
certificates or other communications shall be sent.

          Section 8.2.  Assignments.  This Agreement may not be assigned by
either party without consent of the other and the Trustee, except that the
Issuer shall assign to the Trustee its rights under this Agreement (except under
Sections 4.2(e), 4.2(g), 5.3, and 6.4 hereof) as provided by Section 4.4 hereof,
and the Company may assign its rights under this Agreement to any transferee or
any surviving or resulting corporation as provided by Section 5.1 hereof.

          Section 8.3.  Severability.  If any provision of this Agreement shall
be held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to
any extent whatever.

          Section 8.4.  Execution of Counterparts.  This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.

          Section 8.5.  Amounts Remaining in Bond Fund.  It is agreed by the
parties hereto that after payment in full of (i) the Bonds (or provision for
payment thereof having been made in accordance with the provisions of the
Indenture), (ii) the fees, charges and expenses of the Trustee in accordance
with the Indenture, (iii) the Administrative Expenses, (iv) the fees and
expenses of the Remarketing Agent, the Auction Agent and the Issuer and (v) all
other amounts required to be paid under this Agreement and the Indenture, any
amounts remaining in the Bond Fund shall belong to and be paid to the Company by
the Trustee.

          Section 8.6.  Amendments, Changes and Modifications.  This Agreement
may be amended, changed, modified, altered or terminated only by written
instrument executed by the Issuer and the Company, and only if the written
consent of the Trustee thereto is obtained.  Subject to the written consent of
the Trustee, the Issuer and the Company agree to enter into such amendments,
changes and modifications to this Agreement (i) as may be required by the

                                      -18-
<PAGE>

provisions of this Agreement or the Indenture, (ii) for the purpose of curing
any ambiguity, formal defect or omission in this Agreement, (iii) so as to add
additional rights acquired in accordance with the provisions of this Agreement,
(iv) to preserve the exemption from federal income taxes of interest on the
Bonds, or any of them, or (v) in connection with any other change herein which
is not to the prejudice of the Trustee or the Owners of the Bonds; provided,
however, that the Issuer shall not thereby incur any monetary obligation or
liability (except only to the extent that the same shall be payable solely and
only out of funds provided or to be provided by the Company) or surrender or
abdicate in whole or in part any of its essential governmental functions or
powers or any of its discretion in exercising the same.

          Section 8.7.  Governing Law.  This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the
State.

          Section 8.8.  Authorized Issuer and Company Representatives.  Whenever
under the provisions of this Agreement the approval of the Issuer or the Company
is required to take some action at the request of the other, such approval of
such request shall be given for the Issuer by the Authorized Issuer
Representative and for the Company by the Authorized Company Representative, and
the other party hereto and the Trustee shall be authorized to act on any such
approval or request and neither party hereto shall have any complaint against
the other or against the Trustee as a result of any such action taken.

          Section 8.9.  Term of the Agreement.  This Agreement shall be in full
force and effect from its date to and including such date as all of the Bonds
issued under the Indenture shall have been fully paid or retired (or provision
for such payment shall have been made as provided in the Indenture), provided
that all representations and certifications by the Company as to all matters
affecting the tax-exempt status of the Bonds and the covenants of the Company in
Sections 4.2(c), 4.2(d), 4.2(e), 4.2(f) and 4.2(g) hereof shall survive the
termination of this Agreement.

          Section 8.10.  Cancellation at Expiration of Term.  At the
acceleration, termination or expiration of the term of this Agreement and
following full payment of the Bonds or provision for payment thereof and of all
other fees and charges having been made in accordance with the provisions of
this Agreement and the Indenture, the Issuer shall deliver to the Company any
documents and take or cause the Trustee to take such actions as may be necessary
to effectuate the cancellation and evidence the termination of this Agreement.

          Section 8.11.  Bond Insurance.  The payment of the principal of and
interest on the Bonds when due is to be insured under, and to the extent
provided in, the municipal bond insurance policy, including the endorsements
thereto, to be issued by Ambac Assurance Corporation, and the Issuer and the
Company agree to be bound by the provisions contained in Appendix C to the
Indenture.  In the event of any conflict between the provisions of Appendix C to
the Indenture and the provisions of this Agreement, the provisions of Appendix C
shall govern and control.

                                      -19-
<PAGE>

     In Witness Whereof, the Issuer and the Company have caused this Agreement
to be executed in their respective corporate names and their respective
corporate seals to be hereunto affixed and attested by their duly authorized
officers, all as of the date first above written.

                                        CLARK COUNTY, NEVADA

                                        By
                                                        Chairman
                                             Board of County Commissioners
(SEAL)

Attest:

________________________________
               County Clerk

                                        NEVADA POWER COMPANY

                                        By
                                            _____________________________
(SEAL)

Attest:

________________________________
               Secretary

                                      -20-<PAGE>

                                                                   Exhibit 10(P)

================================================================================

                           FINANCING AGREEMENT NO. 2

                           Dated as of June 1, 2000

                                By and Between

                             CLARK COUNTY, NEVADA

                                      and

                             NEVADA POWER COMPANY

                                  RELATING TO
                   POLLUTION CONTROL REFUNDING REVENUE BONDS
                        (NEVADA POWER COMPANY PROJECT)
                                 SERIES 2000B

================================================================================

         The amounts payable to the Issuer (except for amounts payable to, and
certain rights and privileges of, the Issuer under Sections 4.2(e), 4.2(g), 5.3
and 6.4 hereof and any rights of the Issuer to receive any notices,
certificates, requests, requisitions or communications hereunder) and certain
other rights of the Issuer under this Financing Agreement No. 2 have been
pledged and assigned under the Indenture of Trust No. 2 dated as of June 1,
2000, between the Issuer and The Bank of New York, as Trustee.
<PAGE>

                           Financing Agreement No. 2

                                --------------

                               Table of Contents

            (This Table of Contents is not a part of this Agreement
                  and is only for convenience of reference).

<TABLE>
<CAPTION>
Section                                                 Heading                                          Page
<S>                  <C>                                                                                 <C>
Article I            Definitions........................................................................    1

Article II           Representations....................................................................    4

       Section 2.1.  Representations and Covenants by the Issuer........................................    4
       Section 2.2.  Representations by the Company.....................................................    5

Article III          Issuance of the Bonds..............................................................    6

       Section 3.1.  Agreement to Issue Bonds; Application of Bond Proceeds.............................    6
       Section 3.2.  Deposit of Additional Funds by Company; Redemption of Prior Bonds..................    6
       Section 3.3.  Investment of Moneys in the Bond Fund and the Prior Bonds Redemption
                         Fund...........................................................................    6
       Section 3.4.  Tax Exempt Status of Bonds.........................................................    7

Article IV           Loan and Provisions for Repayment..................................................    8

       Section 4.1.  Loan of Bond Proceeds..............................................................    8
       Section 4.2.  Loan Repayments and Other Amounts Payable..........................................    8
       Section 4.3.  No Defense or Set-Off..............................................................   10
       Section 4.4.  Payments Pledged and Assigned......................................................   10
       Section 4.5.  Payment of the Bonds and Other Amounts.............................................   10

Article V            Special Covenants and Agreements...................................................   11

       Section 5.1.  Company to Maintain its Corporate Existence; Conditions Under Which
                         Exceptions Permitted...........................................................   11
       Section 5.2.  Annual Statement...................................................................   11
       Section 5.3.  Maintenance and Repair; Insurance; Taxes; Disposition..............................   11
       Section 5.4.  Recordation and Other Instruments..................................................   12
       Section 5.5.  No Warranty by the Issuer..........................................................   12
       Section 5.6.  Agreement as to Ownership of the Project...........................................   12
       Section 5.7.  Company to Furnish Notice of Adjustments of Interest Rate Periods..................   12
       Section 5.8.  Information Reporting, Etc.........................................................   12
       Section 5.9.  Limited Liability of Issuer........................................................   13
</TABLE>
<PAGE>

<TABLE>
<S>                   <C>                                                                                   <C>
       Section 5.10.  Inspection of Project............................................................     13

Article VI            Events of Default and Remedies...................................................     13

       Section 6.1.   Events of Default Defined........................................................     13
       Section 6.2.   Remedies on Default..............................................................     15
       Section 6.3.   No Remedy Exclusive..............................................................     16
       Section 6.4.   Agreement to Pay Fees and Expenses of Counsel....................................     16
       Section 6.5.   No Additional Waiver Implied by One Waiver; Consents to Waivers..................     16

Article VII           Options and Obligations of Company; Prepayments; Redemption of Bonds.............     17

       Section 7.1.   Option to Prepay.................................................................     17
       Section 7.2.   Obligation to Prepay.............................................................     17
       Section 7.3.   Notice of Prepayment.............................................................     17

Article VIII          Miscellaneous....................................................................     18

       Section 8.1.   Notices..........................................................................     18
       Section 8.2.   Assignments......................................................................     18
       Section 8.3.   Severability.....................................................................     18
       Section 8.4.   Execution of Counterparts........................................................     18
       Section 8.5.   Amounts Remaining in Bond Fund...................................................     18
       Section 8.6.   Amendments, Changes and Modifications............................................     19
       Section 8.7.   Governing Law....................................................................     19
       Section 8.8.   Authorized Issuer and Company Representatives....................................     19
       Section 8.9.   Term of the Agreement............................................................     19
       Section 8.10.  Cancellation at Expiration of Term...............................................     19
       Section 8.11.  Bond Insurance...................................................................     20

Signature..............................................................................................     21
</TABLE>

                                     -ii-
<PAGE>

     This Financing Agreement No. 2 made and entered into as of June 1, 2000, by
and between Clark County, Nevada, a political subdivision of the State of
Nevada, party of the first part (hereinafter referred to as the "Issuer"), and
Nevada Power Company, a corporation duly organized and existing under the laws
of the State of Nevada, party of the second part (hereinafter referred to as the
"Company"),

                             W i t n e s s e t h:

     In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided, that in
the performance of the agreements of the Issuer herein contained, any obligation
it may thereby incur shall not constitute or give rise to a pecuniary liability
or a charge upon its general credit or against its taxing powers but shall be
payable solely out of the Revenues (as hereinafter defined) derived from this
Financing Agreement and the Bonds, as hereinafter defined):

                                   Article I

                                  Definitions

     The following terms shall have the meanings specified in this Article
unless the context clearly requires otherwise.  The singular shall include the
plural and the masculine shall include the feminine.

     "Act" means the County Economic Development Revenue Bond Law, as amended,
contained in Sections 244A.669 to 244A.763, inclusive, of the Nevada Revised
Statutes.

     "Act of Bankruptcy" means the filing of a petition in bankruptcy by or
against the Company or the Issuer under the Bankruptcy Code.

     "Administrative Expenses" means the reasonable and necessary expenses
(including the reasonable value of employee services and fees of Counsel)
incurred by the Issuer in connection with the Bonds, this Agreement, the
Indenture and any transaction or event contemplated by this Agreement or the
Indenture.

     "Agreement" means this Financing Agreement No. 2 by and between the Issuer
and the Company, as from time to time amended and supplemented.

     "Auction Agent" means the auction agent appointed in accordance with
Section 2.03(e)(iv) of the Indenture.

     "Authorized Company Representative" means any person who, at the time,
shall have been designated to act on behalf of the Company by a written
certificate furnished to the Issuer, the Remarketing Agent and the Trustee
containing the specimen signature of such person and
<PAGE>

signed on behalf of the Company by any officer of the Company. Such certificate
may designate an alternate or alternates.

     "Authorized Issuer Representative" means any person at the time designated
to act on behalf of the Issuer by a written certificate furnished to the Company
and the Trustee containing the specimen signature of such person and signed on
behalf of the Issuer by its Chairman.  Such certificate may designate an
alternate or alternates.

     "Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978, as
amended from time to time, or any substitute or replacement legislation.

     "Bond" or "Bonds" means the Issuer's bonds identified in Section 2.02 of
the Indenture.

     "Bond Counsel" means the Counsel who renders the opinion as to the tax-
exempt status of interest on the Bonds or other nationally recognized municipal
bond counsel mutually acceptable to the Issuer and the Company.

     "Bond Fund" means the fund created by Section 6.02 of the Indenture.

     "Code" means the United States Internal Revenue Code of 1986, as amended,
and regulations promulgated or proposed thereunder.

     "Company" means Nevada Power Company, a Nevada corporation, and its
successors and assigns and any surviving, resulting or transferee corporation as
permitted in Section 5.1 hereof.

     "Counsel" means an attorney at law or a firm of attorneys (who may be an
employee of or counsel to the Issuer or the Company or the Trustee) duly
admitted to the practice of law before the highest court of any state of the
United States of America or of the District of Columbia.

     "Extraordinary Services" and "Extraordinary Expenses" means all services
rendered and all expenses (including fees and expenses of Counsel) incurred
under the Indenture and the Tax Agreement other than Ordinary Services and
Ordinary Expenses.

     "Force Majeure" means acts of God, strikes, lockouts or other industrial
disturbances; acts of public enemies; orders or restraints of any kind of the
governments of the United States or of the State, or any of their departments,
agencies or officials, or any civil or military authority; insurrections; riots;
landslides; lightning; earthquakes; fires; tornadoes; volcanoes; storms;
droughts; floods; explosions, breakage, or malfunction or accident to machinery,
transmission lines, pipes or canals, even if resulting from negligence; civil
disturbances; or any other cause not reasonably within the control of the
Company.

     "Governing Body" means the Board of County Commissioners of the Issuer.

                                      -2-
<PAGE>

     "Hereof," "herein," "hereunder" and other words of similar import refer to
this Agreement as a whole.

     "Indenture" means the Indenture of Trust No. 2 relating to this Agreement
between the Issuer and The Bank of New York, as Trustee, of even date herewith,
pursuant to which the Bonds are authorized to be issued, including any
indentures supplemental thereto or amendatory thereof.

     "Insider" shall have the meaning set forth in the Bankruptcy Code.

     "Issuer" means Clark County, Nevada, and any successor body to the duties
or functions of the Issuer.

     "Moody's" means Moody's Investors Service, Inc., a corporation organized
and existing under the laws of the State of Delaware, its successors and their
assigns, and, if such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, "Moody's" shall be
deemed to refer to any other nationally recognized securities rating agency
designated by the Company and acceptable to the Bank Agent, with notice to the
Trustee.

     "Ordinary Services" and "Ordinary Expenses" means those services normally
rendered and those expenses including fees and expenses of Counsel, normally
incurred by a trustee or paying agent under instruments similar to the Indenture
and the Tax Agreement.

     "Owner" or "owner of Bonds" means the Person or Persons in whose name or
names a Bond shall be registered on books of the Issuer kept by the Registrar
for that purpose in accordance with the terms of the Indenture.

     "Person" means natural persons, firms, partnerships, associations,
corporations, trusts and public bodies.

     "Prior Agreement" means the First Supplemental Sublease Agreement, dated as
of October 1, 1989, between the Issuer and the Company relating to the Prior
Bonds.

     "Prior Bonds" means the Issuer's Pollution Control Revenue Bonds (Nevada
Power Company Project) Series 1989, currently outstanding in the aggregate
principal amount of $15,000,000.

     "Prior Bond Fund" means the fund established pursuant to Section 5.02 of
the Prior Indenture.

     "Prior Indenture" means the Indenture of Trust dated as of March 1, 1974
between the Issuer and Commerce Union Bank as trustee, as supplemented by the
First Supplemental Indenture of Trust dated as of October 1, 1989 between the
Issuer and Sovran Bank/Central South as successor trustee, pursuant to which the
Prior Bonds were issued.

                                      -3-
<PAGE>

     "Prior Trustee" means The Bank of New York, as current trustee under the
Prior Indenture.

     "Project" means the Project as defined in the Prior Agreement.

     "Project Certificate" means the Company's Project and Refunding
Certificate, delivered concurrently with the issuance of the Bonds, with respect
to certain facts which are within the knowledge of the Company and certain
reasonable assumptions of the Company, to enable Chapman and Cutler, as Bond
Counsel, to determine that interest on the Bonds is not includable in the gross
income of the Owners of the Bonds for federal income taxes purposes.

     "Rebate Fund" means the Rebate Fund, if any, created and established
pursuant to the Tax Agreement.

     "Remarketing Agent" means the remarketing agent appointed in accordance
with Section 4.08 of the Indenture and any permitted successor thereto.

     "S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., a corporation organized and existing under the laws of the State of New
York, its successors and their assigns, and if such division or corporation
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Company and acceptable to
the Bank Agent, with notice to the Trustee.

     "State" means the State of Nevada.

     "Tax Agreement" means the Tax Exemption Certificate and Agreement No. 2
with respect to the Bonds, dated the date of delivery of the Bonds, among the
Company, the Issuer and the Trustee, as from time to time amended and
supplemented.

     "Trust Estate" means the property conveyed to the Trustee pursuant to the
Granting Clauses of the Indenture.

     "Trustee" means The Bank of New York, as Trustee under the Indenture, and
any successor Trustee appointed pursuant to Section 10.06 or 10.09 of the
Indenture at the time serving as Trustee thereunder, and any separate or co-
trustee serving as such thereunder.

     All other terms used herein which are defined in the Indenture shall have
the same meanings assigned them in the Indenture unless the context otherwise
requires.

                                      -4-
<PAGE>

                                  Article II

                                Representations

   Section 2.1.  Representations and Covenants by the Issuer.  The Issuer makes
the following representations and covenants as the basis for the undertakings on
its part herein contained:

            (a) The Issuer is a duly organized and existing political
     subdivision of the State of Nevada.  Under the provisions of the Act, the
     Issuer is authorized to enter into the transactions contemplated by this
     Agreement, the Indenture and the Tax Agreement and to carry out its
     obligations hereunder and thereunder.  The Issuer has duly authorized the
     execution and delivery of this Agreement, the Indenture and the Tax
     Agreement.

            (b) The Bonds are to be issued under and secured by the Indenture,
     pursuant to which certain of the Issuer's interests in this Agreement and
     the Revenues derived by the Issuer pursuant to this Agreement will be
     pledged and assigned as security for payment of the principal of, premium,
     if any, and interest on, the Bonds.

            (c) The Governing Body of the Issuer has found that the issuance of
     the Bonds will further the public purposes of the Act.

            (d) The Issuer has not assigned and will not assign any of its
     interests in this Agreement other than pursuant to the Indenture.

            (e) No member of the Governing Body of the Issuer, nor any other
     officer of the Issuer, has any interest, financial (other than ownership of
     less than one-tenth of one percent (.1%) of the publicly traded securities
     issued by the Company or its affiliated corporations), employment or other,
     in the Company or in the transactions contemplated hereby.

   Section 2.2.  Representations by the Company.  The Company makes the
following representations as the basis for the undertakings on its part herein
contained:

            (a) The Company is a corporation duly incorporated under the laws of
     the State and is in good standing in the State, is qualified to do business
     as a foreign corporation in all other states and jurisdictions wherein the
     nature of the business transacted by the Company or the nature of the
     property owned or leased by it makes such licensing or qualification
     necessary, has power to enter into and by proper corporate action has been
     duly authorized to execute and deliver this Agreement and the Tax
     Agreement.

            (b) Neither the execution and delivery of this Agreement or the Tax
     Agreement, the consummation of the transactions contemplated hereby and
     thereby, nor the fulfillment of or compliance with the terms and conditions
     of this Agreement and the

                                      -5-
<PAGE>

     Tax Agreement, conflicts with or results in a breach of any of the terms,
     conditions or provisions of any corporate restriction or any agreement or
     instrument to which the Company is now a party or by which it is bound, or
     constitutes a default under any of the foregoing, or results in the
     creation or imposition of any lien, charge or encumbrance whatsoever upon
     any of the property or assets of the Company under the terms of any
     instrument or agreement other than the Indenture.

            (c) The statements, information and descriptions contained in the
     Project Certificate and the Tax Agreement, as of the date hereof and at the
     time of the delivery of the Bonds to the Underwriter, are and will be true,
     correct and complete, do not and will not contain any untrue statement or
     misleading statement of a material fact, and do not and will not omit to
     state a material fact required to be stated therein or necessary to make
     the statements, information and descriptions contained therein, in the
     light of the circumstances under which they were made, not misleading.

                                  Article III

                             Issuance of the Bonds

   Section 3.1.  Agreement to Issue Bonds; Application of Bond Proceeds. In
order to provide funds to lend to the Company to refund the Prior Bonds as
provided in Section 4.1 hereof, the Issuer agrees that it will issue under the
Indenture, sell and cause to be delivered to the Underwriter, its Bonds in the
aggregate principal amount of $15,000,000, bearing interest and maturing as set
forth in the Indenture. The Issuer will thereupon deposit the proceeds received
from the sale of the Bonds as follows: (1) in the Bond Fund, a sum equal to any
accrued interest, if any, paid by the Underwriter; and (2) $15,000,000 in the
Prior Bonds Redemption Fund to be remitted by the Trustee to the Prior Trustee
for deposit in the Prior Bond Fund to be used to pay to the owners thereof the
principal of the Prior Bonds upon redemption thereof.

   Section 3.2.  Deposit of Additional Funds by Company; Redemption of Prior
Bonds. The Company covenants that such additional amounts as may be required to
redeem the Prior Bonds will be deposited with the Prior Trustee pursuant to the
Prior Indenture for such purpose. Income derived from the investment of the
proceeds of the Bonds deposited in the Prior Bonds Redemption Fund will be used
to satisfy the obligations of the Company specified in this Section 3.2. The
Company covenants that it will cause the Prior Bonds to be redeemed within 90
days after the issuance and delivery of the Bonds.

   Section 3.3.  Investment of Moneys in the Bond Fund and the Prior Bonds
Redemption Fund. Except as otherwise herein provided, any moneys held as a part
of the Bond Fund and the Prior Bonds Redemption Fund shall be invested or
reinvested by the Trustee at the specific written direction of an Authorized
Company Representative as to specific investments, to the extent permitted by
law, in:

            (a) bonds or other obligations of the United States of America;

                                      -6-
<PAGE>

            (b) bonds or other obligations, the payment of the principal of and
     interest on which is unconditionally guaranteed by the United States of
     America;

            (c) obligations issued or guaranteed as to principal and interest by
     any agency or person controlled or supervised by and acting as an
     instrumentality of the United States of America pursuant to authority
     granted by the Congress of the United States of America;

            (d) obligations issued or guaranteed by any state of the United
     States of America, or any political subdivision of any such state, or in
     funds consisting of such obligations to the extent described in Treasury
     Regulation 1.148-8(e)(3)(iii);

            (e) prime commercial paper;

            (f) prime finance company paper;

            (g) bankers' acceptances drawn on and accepted by commercial banks;

            (h) repurchase agreements fully secured by obligations issued or
     guaranteed as to principal and interest by the United States of America or
     by any person controlled or supervised by and acting as an instrumentality
     of the United States of America pursuant to authority granted by the
     Congress of the United States of America;

            (i) certificates of deposit issued by commercial banks, including
     banks domiciled outside of the United States of America; and

            (j) units of taxable government money market portfolios composed of
     obligations guaranteed as to principal and interest by the United States of
     America or repurchase agreements fully collateralized by such obligations.

     The investments so purchased shall be held by the Trustee and shall be
deemed at all times a part of the fund for which they were made and the interest
accruing thereon and any profit realized therefrom shall be credited to such
fund, subject to the provisions of the Tax Agreement.  The Company agrees that
to the extent any moneys in the Bond Fund represent moneys held for the payment
of particular Bonds or moneys held for the payment of the purchase price of
Bonds pursuant to Article IV of the Indenture, such moneys shall not be
invested.

   Section 3.4.  Tax Exempt Status of Bonds.  The Company covenants and agrees
that it has not taken or permitted and will not take or permit any action which
results in interest paid on the Bonds being included in gross income of the
holders or beneficial owners of the Bonds for purposes of federal income
taxation (other than a holder or beneficial owner who is a "substantial user" of
the Project or a "related person" within the meaning of Section 103(b)(13) of
the Code-1954). The Company covenants that none of the proceeds of the Bonds or
the payments to be made under this Agreement, or any other funds which may be
deemed to be proceeds of the Bonds pursuant to Section 148(a) of the Code, will
be invested or used in such a way, and that no actions will be taken or not
taken, as to cause the Bonds to be treated as

                                      -7-
<PAGE>

"arbitrage bonds" within the meaning of Section 148(a) of the Code. Without
limiting the generality of the foregoing, the Company covenants and agrees that
it will comply with the provisions of the Tax Agreement and the Project
Certificate.

                                  Article IV

                       Loan and Provisions for Repayment

   Section 4.1.  Loan of Bond Proceeds.  (a) The Issuer agrees, upon the terms
and conditions in this Agreement, to lend to the Company the proceeds (exclusive
of accrued interest, if any) received by the Issuer from the sale of the Bonds
in order to refund the Prior Bonds and the Company agrees to apply the gross
proceeds of such loan to the refunding of the Prior Bonds.

      (b) The Issuer and the Company expressly reserve the right to enter into,
to the extent permitted by law, an agreement or agreements other than this
Agreement, with respect to the issuance by the Issuer, under an indenture or
indentures other than the Indenture, of obligations to provide additional funds
to refund all or any principal amount of the Bonds.

   Section 4.2.  Loan Repayments and Other Amounts Payable.  (a) On each date
provided in or pursuant to the Indenture for the payment (whether at maturity or
upon redemption or acceleration) of principal of, and premium, if any, and
interest on, the Bonds, until the principal of, and premium, if any, and
interest on, the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, the Company shall
pay to the Trustee in immediately available funds, for deposit in the Bond Fund,
as a repayment installment of the loan of the proceeds of the Bonds pursuant to
Section 4.1(a) hereof, a sum equal to the amount payable on such date (whether
at maturity or upon redemption or acceleration) as principal of, and premium, if
any, and interest on, the Bonds as provided in the Indenture; provided, however,
that the obligation of the Company to make any such repayment installment shall
be reduced by the amount of any moneys then on deposit in the Bond Fund and
available for such payment.

      (b) The Company shall pay to the Trustee amounts equal to the amounts to
be paid by the Trustee for the purchase of Bonds pursuant to Article IV of the
Indenture.  Such amounts shall be paid by the Company to the Trustee in
immediately available funds on the date such payments pursuant to Section 4.05
of the Indenture are to be made; provided, however, that the obligation of the
Company to make any such payment shall be deemed to be satisfied and discharged
to the extent moneys are available from the source described in clause (i) of
Section 4.05(a) of the Indenture.

      (c) The Company agrees to pay to the Trustee (i) the fees of the Trustee
for the Ordinary Services rendered by it and an amount equal to the Ordinary
Expenses incurred by it under the Indenture and the Tax Agreement, as and when
the same become due, and (ii) the reasonable fees, charges and expenses of the
Trustee for reasonable Extraordinary Services and Extraordinary Expenses, as and
when the same become due, incurred under the Indenture and the Tax Agreement.
The Company agrees that the Trustee, its officers, agents, servants and

                                      -8-
<PAGE>

employees, shall not be liable for, and agrees that it will at all times
indemnify and hold harmless the Trustee, its officers, agents, servants and
employees against, and pay all expenses of the Trustee, its officers, agents,
servants and employees, relating to any lawsuit, proceeding or claim and
resulting from any action or omission taken or made by or on behalf of the
Trustee, its officers, agents, servants and employees pursuant to this
Agreement, the Indenture or the Tax Agreement, that may be occasioned by any
cause (other than the negligence or willful misconduct of the Trustee, its
officers, agents, servants and employees).  In case any action shall be brought
against the Trustee in respect of which indemnity may be sought against the
Company, the Trustee shall promptly notify the Company in writing and the
Company shall be entitled to assume control of the defense thereof, including
the employment of Counsel and the payment of all expenses.  The Trustee shall
have the right to employ separate Counsel in any such action and participate in
the defense thereof, but the fees and expenses of such Counsel shall be paid by
the Trustee unless the employment of such Counsel has been authorized by the
Company.  The Company shall not be liable for any settlement of any such action
without its consent, but if any such action is settled with the consent of the
Company or if there be final judgment for the plaintiff in any such action, the
Company agrees to indemnify and hold harmless the Trustee from and against any
loss or liability by reason of such settlement or final judgment.  The Company
agrees that the indemnification provided herein shall survive the termination of
this Agreement or the Indenture or the resignation of the Trustee.

      (d) The Company agrees to pay all costs incurred in connection with the
issuance of the Bonds from sources other than Bond proceeds and the Issuer shall
have no obligation with respect to such costs.

      (e) The Company agrees to indemnify and hold harmless the Issuer and any
member, officer, official or employee of the Issuer against any and all losses,
costs, charges, expenses, judgments and liabilities created by or arising out of
this Agreement, the Indenture, the Remarketing Agreement, the Auction Agreement,
the Bond Purchase Agreement, any Broker-Dealer Agreement or the Tax Agreement or
otherwise incurred in connection with the issuance of the Bonds.  The Company
agrees to pay the Issuer its Closing Fee in connection with the issuance of the
Bonds in the amount of $15,000.  The Issuer may submit to the Company periodic
statements, not more frequently than monthly, for its Administrative Expenses
and the Company shall make payment to the Issuer of the full amount of each such
statement within 30 days after the Company receives such statement.

      (f) The Company agrees to pay (i) to the Remarketing Agent the reasonable
fees, charges and expenses of such Remarketing Agent and (ii) to the Auction
Agent the reasonable fees, charges and expenses of such Auction Agent, and the
Issuer shall have no obligation or liability with respect to the payment of any
such fees, charges or expenses.

      (g) In the event the Company shall fail to make any of the payments
required by (a) or (b) of this Section 4.2, the payment so in default shall
continue as an obligation of the Company until the amount in default shall have
been fully paid and the Company will pay interest to the extent permitted by
law, on any overdue amount at the rate of interest borne by the Bonds on the
date on which such amount became due and payable until paid.  In the event that
the Company shall fail to make any of the payments required by (c), (d), (e) or
(f) of this Section 4.2, the

                                      -9-
<PAGE>

payment so in default shall continue as an obligation of the Company until the
amount in default shall have been fully paid, and the Company agrees to pay the
same with interest thereon to the extent permitted by law at a rate 1% above the
rate of interest then charged by the Trustee on 90-day commercial loans to its
prime commercial borrowers until paid.

   Section 4.3.  No Defense or Set-Off.  The obligation of the Company to make
the payments pursuant to this Agreement shall be absolute and unconditional
without defense or set-off by reason of any default by the Issuer under this
Agreement or under any other agreement between the Company and the Issuer or for
any other reason, it being the intention of the parties that the payments
required hereunder will be paid in full when due without any delay or diminution
whatsoever.

   Section 4.4.  Payments Pledged and Assigned.  It is understood and agreed
that all payments required to be made by the Company pursuant to Section 4.2
hereof (except payments made to the Trustee pursuant to Section 4.2(c) hereof,
to the Remarketing Agent and the Auction Agent pursuant to Section 4.2(f)
hereof, to the Issuer pursuant to Section 4.2(e) hereof and to any or all the
Issuer and the Trustee and the Remarketing Agent pursuant to Section 4.2(g)
hereof) and certain rights of the Issuer hereunder are pledged and assigned by
the Indenture. The Company consents to such pledge and assignment. The Issuer
hereby directs the Company and the Company hereby agrees to pay or cause to be
paid to the Trustee all said amounts except payments to be made to the
Remarketing Agent and the Auction Agent pursuant to Section 4.2(f) hereof and
payments to be made to the Issuer pursuant to Sections 4.2(e) and (g) hereof.
The Project will not constitute any part of the security for the Bonds.

   Section 4.5.  Payment of the Bonds and Other Amounts.  The Bonds and interest
and premium, if any, thereon shall be payable solely from (i) payments made by
the Company to the Trustee under Section 4.2(a) hereof and (ii) other moneys on
deposit in the Bond Fund and available therefor.

     Payments of principal of, and premium, if any, or interest on, the Bonds
with moneys in the Bond Fund constituting proceeds from the sale of the Bonds or
earnings on investments made under the provisions of the Indenture shall be
credited against the obligation to pay required by Section 4.2(a) hereof.

     Whenever any Bonds are redeemable in whole or in part at the option of the
Company, the Trustee, on behalf of the Issuer, shall redeem the same upon the
request of the Company and such redemption (unless conditional) shall be made
from payments made by the Company to the Trustee under Section 4.2(a) hereof
equal to the redemption price of such Bonds.

     Whenever payment or provision therefor has been made in respect of the
principal of, or premium, if any, or interest on, all or any portion of the
Bonds in accordance with the Indenture (whether at maturity or upon redemption
or acceleration or upon provision for payment in accordance with Article VIII of
the Indenture), payments shall be deemed paid to the extent such payment or
provision therefor has been made and is considered to be a payment of principal
of, or premium, if any, or interest on, such Bonds.  If such Bonds are thereby
deemed paid in full, the Trustee shall notify the Company and the Issuer that
such payment requirement has been

                                      -10-
<PAGE>

satisfied. Subject to the foregoing, or unless the Company is entitled to a
credit under this Agreement or the Indenture, all payments shall be in the full
amount required by Section 4.2(a) hereof.

                                   Article V

                       Special Covenants and Agreements

     Section 5.1. Company to Maintain its Corporate Existence; Conditions Under
Which Exceptions Permitted. The Company agrees that during the term of this
Agreement, it will maintain its corporate existence and its good standing in the
State, will not dissolve or otherwise dispose of all or substantially all of its
assets and will not consolidate with or merge into another corporation unless
(a) the acquirer of its assets or the corporation with which it shall
consolidate or into which it shall merge shall (i) be a corporation organized
under the laws of one of the states of the United States of America, (ii) be
qualified to do business in the State, (iii) be a public utility, and (iv)
assume in writing all of the obligations of the Company under this Agreement and
the Tax Agreement.

     Any transfer of all or substantially all of the Company's generation assets
shall not be deemed to constitute a "disposition of all or substantially all of
the Company's assets" within the meaning of the preceding paragraph.  Any such
transfer of the Company's generation assets shall not relieve the Company of any
of its obligations under this Agreement.

     Section 5.2. Annual Statement. The Company agrees to have an annual audit
made by its regular independent certified public accountants and to furnish the
Trustee (within 30 days after receipt by the Company) with a balance sheet and
statement of income and surplus showing the financial condition of the Company
and its consolidated subsidiaries, if any, at the close of each fiscal year and
the results of operations of the Company and its consolidated subsidiaries, if
any, for each fiscal year, accompanied by a report of said accountants that such
statements have been prepared in accordance with generally accepted accounting
principles. The Company's obligations under this Section 5.2 may be satisfied by
delivering a copy of the Company's Annual Report to the Trustee at the same time
that it is mailed to stockholders.

     Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on officer's certificates).

     Section 5.3. Maintenance and Repair; Insurance; Taxes; Disposition. For so
long as the Company shall own the Project, (i) the Company shall maintain or
cause to be maintained the Project in good repair and keep it properly insured
and shall promptly pay or cause to be paid all costs thereof, and (ii) the
Company shall promptly pay or cause to be paid all installments of taxes,
installments of special assessments, and all governmental, utility and other
charges with respect to the Project, when due. The Company may, at its own
expense and in its own name in

                                      -11-
<PAGE>

good faith contest or appeal any such taxes, assessments or other charges, or
installments thereof, but shall not permit any such taxes, assessments or other
charges, or installments thereof, to remain unpaid if such nonpayment shall
subject the Project or any part thereof to loss or forfeiture. The Company,
subject to the provisions of Section 3.4 hereof, is not required by this
Agreement to operate, or cause to be operated, any portion of the Project after
the Company shall deem in its discretion that such continued operation by the
Company is not advisable, and in such event the Company may sell, lease or
retire all or any such portion of the Project. Subject to the provisions of
Section 3.4 hereof, the net proceeds from such sale, lease or other disposition,
if any, shall belong to, and may be used for any lawful purpose by, the Company.
Upon disposition of the Project in its entirety by the Company in accordance
with this Section 5.3, the Company shall be discharged from its obligations to
operate, maintain, repair and insure the Project as set forth in this Section
5.3. Any such sale, lease or other disposition shall comply with the
requirements of the Tax Agreement. Under any and all circumstances, the Issuer
shall have no obligation whatsoever with respect to the operation, maintenance,
repair or insurance of the Project.

     Section 5.4. Recordation and Other Instruments. The Company shall cause
such security agreements, financing statements and all supplements thereto and
other instruments as may be required from time to time to be kept, to be
recorded and filed in such manner and in such places as may be required by law
in order to fully preserve, protect and perfect the security of the Owners of
the Bonds and the rights of the Trustee, and to perfect the security interest
created by the Indenture. The Company agrees to abide by the provisions of
Section 5.11 of the Indenture to the extent applicable to the Company.

     Section 5.5. No Warranty by the Issuer. The Issuer makes no warranty,
either express or implied, as to the Project or that it will be suitable for the
purposes of the Company or needs of the Company.

     Section 5.6. Agreement as to Ownership of the Project. The Issuer and the
Company agree that title to the Project shall not be in the Issuer, and that the
Issuer shall have no interest in the Project.

     Section 5.7. Company to Furnish Notice of Adjustments of Interest Rate
Periods. The Company is hereby granted the option to designate from time to time
changes in Rate Periods (and to rescind such changes) in the manner and to the
extent set forth in Section 2.03 of the Indenture. In the event the Company
elects to exercise any such option, the Company agrees that it shall cause
notices of adjustments of Rate Periods (or rescissions thereof) to be given to
the Issuer, the Trustee and the Remarketing Agent in accordance with Section
2.03(a), (b), (c), (d) or (e) of the Indenture, and a copy of each such notice
shall also be given at such time to S&P and Moody's.

     Section 5.8. Information Reporting, Etc.. The Issuer covenants and agrees
that, upon the direction of the Company or Bond Counsel, it will mail or cause
to be mailed to the Secretary of the Treasury (or his designee as prescribed by
regulation, currently the Internal Revenue Service Center, Ogden, Utah) a
statement setting forth the information required by Section 149(e) of the Code,
which statement shall be in the form of the Information Return for

                                      -12-
<PAGE>

Tax-Exempt Private Activity Bond Issues (Form 8038) of the Internal Revenue
Service (or any successor form) and which shall be completed by the Company and
Bond Counsel based in part upon information supplied by the Company and Bond
Counsel.

     Section 5.9. Limited Liability of Issuer. Any obligation or liability of
the Issuer created by or arising out of this Agreement or otherwise incurred in
connection with the issuance of the Bonds (including without limitation any
liability created by or arising out of the representations, warranties or
covenants set forth herein or otherwise) shall not impose a debt or pecuniary
liability upon the Issuer or the State or any political subdivision thereof, or
a charge upon the general credit or taxing powers of any of the foregoing, but
shall be payable solely out of the Revenues or other amounts payable by the
Company to the Issuer hereunder or otherwise (including without limitation any
amounts derived from indemnifications given by the Company).

     Neither the issuance of the Bonds nor the delivery of this Agreement shall,
directly or indirectly or contingently, obligate the Issuer or the State or any
political subdivision thereof to levy any form of taxation therefor or to make
any appropriation for their payment.  Nothing in the Bonds or in the Indenture
or this Agreement or the proceedings of the Issuer authorizing the Bonds or in
the Act or in any other related document shall be construed to authorize the
Issuer to create a debt of the Issuer or the State or any political subdivision
thereof within the meaning of any constitutional or statutory provision of the
State.  The principal of, and premium, if any, and interest on, the Bonds shall
be payable solely from the funds pledged for their payment in accordance with
the Indenture and available therefor under this Agreement.  Neither the State
nor any political subdivision thereof shall in any event be liable for the
payment of the principal of, premium, if any, or interest on, the Bonds or for
the performance of any pledge, obligation or agreement of any kind whatsoever
which may be undertaken by the Issuer.  No breach of any such pledge, obligation
or agreement may impose any pecuniary liability upon the Issuer or the State or
any political subdivision thereof, or any charge upon the general credit or
against the taxing power of the Issuer or the State or any political subdivision
thereof.

     Section 5.10. Inspection of Project. The Company agrees that the Issuer and
the Trustee and their duly authorized representatives shall have the right at
all reasonable times to enter upon and examine and inspect the Project property
and shall also be permitted, at all reasonable times, to examine the books and
records of the Company insofar as they relate to the Project.

                                  Article VI

                        Events of Default and Remedies

     Section 6.1. Events of Default Defined. The following shall be "events of
default" under this Agreement and the terms "event of default" or "default"
shall mean, whenever they are used in this Agreement, any one or more of the
following events:

                                      -13-
<PAGE>

            (a) Failure by the Company to pay when due any amounts required to
     be paid under Section 4.2(a) hereof, which failure results in an event of
     default under subparagraph (a) or (b) of Section 9.01 of the Indenture; or

            (b) Failure by the Company to pay or cause to be paid any payment
     required to be paid under Section 4.2(b) hereof, which failure results in
     an event of default under subparagraph (c) of Section 9.01 of the
     Indenture; or

            (c) Failure by the Company to observe and perform any covenant,
     condition or agreement on its part to be observed or performed in this
     Agreement, other than as referred to in (a) and (b) above, for a period of
     90 days after written notice, specifying such failure and requesting that
     it be remedied and stating that such notice is a "Notice of Default"
     hereunder, given to the Company by the Trustee or to the Company and the
     Trustee by the Issuer, unless the Issuer and the Trustee shall agree in
     writing to an extension of such time prior to its expiration; provided,
     however, if the failure stated in the notice cannot be corrected within the
     applicable period, the Issuer and the Trustee will not unreasonably
     withhold their consent to an extension of such time if corrective action is
     instituted within the applicable period and diligently pursued until the
     failure is corrected and such corrective action or diligent pursuit is
     evidenced to the Trustee by a certificate of an Authorized Company
     Representative; or

            (d) A proceeding or case shall be commenced, without the application
     or consent of the Company, in any court of competent jurisdiction seeking
     (i) liquidation, reorganization, dissolution, winding-up or composition or
     adjustment of debts, (ii) the appointment of a trustee, receiver,
     custodian, liquidator or the like of the Company or of all or any
     substantial part of its assets, or (iii) similar relief under any law
     relating to bankruptcy, insolvency, reorganization, winding-up or
     composition or adjustment of debts, and such proceeding or cause shall
     continue undismissed, or an order, judgment, or decree approving or
     ordering any of the foregoing shall be entered and shall continue in effect
     for a period of 90 days; or an order for relief against the Company shall
     be entered against the Company in an involuntary case under the Bankruptcy
     Code (as now or hereafter in effect) or other applicable law; or

            (e) The Company shall admit in writing its inability to pay its
     debts generally as they become due or shall file a petition in voluntary
     bankruptcy or shall make any general assignment for the benefit of its
     creditors, or shall consent to the appointment of a receiver or trustee of
     all or substantially all of its property, or shall commence a voluntary
     case under the Bankruptcy Code (as now or hereafter in effect), or shall
     file in any court of competent jurisdiction a petition seeking to take
     advantage of any other law relating to bankruptcy, insolvency,
     reorganization, winding-up or composition or adjustment of debts, or shall
     fail to controvert in a timely or appropriate manner, or acquiesce in
     writing to, any petition filed against it in an involuntary case under such
     Bankruptcy Code or other applicable law; or

            (f) Dissolution or liquidation of the Company; provided that the
     term "dissolution or liquidation of the Company" shall not be construed to
     include the

                                      -14-
<PAGE>

     cessation of the corporate existence of the Company resulting either from a
     merger or consolidation of the Company into or with another corporation or
     a dissolution or liquidation of the Company following a transfer of all or
     substantially all of its assets as an entirety, under the conditions
     permitting such actions contained in Section 5.1 hereof; or

            (g) The occurrence of an "event of default" under the Indenture.

The foregoing provisions of Section 6.1(c) are subject to the following
limitations:  If by reason of Force Majeure the Company is unable in whole or in
part to carry out its agreements on its part herein contained, other than the
obligations on the part of the Company contained in Article IV and Sections 5.3
and 6.4 hereof, the Company shall not be deemed in default during the
continuance of such inability.  The Company agrees, however, to remedy with all
reasonable dispatch the cause or causes preventing the Company from carrying out
its agreements; provided that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Company
and the Company shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the opposing
party or parties when such course is in the sole judgment of the Company
unfavorable to the Company.

     Section 6.2. Remedies on Default. Whenever any event of default referred to
in Section 6.1 hereof shall have happened and be continuing, the Trustee, as
assignee of the Issuer:

            (a) shall, by notice in writing to the Company, declare the unpaid
     indebtedness under Section 4.2(a) hereof to be due and payable immediately,
     if concurrently with or prior to such notice the unpaid principal amount of
     the Bonds shall have been declared to be due and payable, and upon any such
     declaration the same (being an amount sufficient, together with other
     moneys available therefor in the Bond Fund, to pay the unpaid principal of,
     premium, if any, and interest accrued on, the Bonds) shall become and shall
     be immediately due and payable as liquidated damages; and

            (b) may take whatever action at law or in equity as may appear
     necessary or desirable to collect the payments and other amounts then due
     and thereafter to become due hereunder or to enforce performance and
     observance of any obligation, agreement or covenant of the Company under
     this Agreement.

     Any amounts collected pursuant to action taken under this Section 6.2 shall
be paid into the Bond Fund (unless otherwise provided in this Agreement) and
applied in accordance with the provisions of the Indenture.  No action taken
pursuant to this Section 6.2 shall relieve the Company from the Company's
obligations pursuant to Section 4.2 hereof.

     No recourse shall be had for any claim based on this Agreement against any
officer, director or stockholder, past, present or future, of the Company as
such, either directly or through the Company, under any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or by
any legal or equitable proceeding or otherwise.

                                      -15-
<PAGE>

          Nothing herein contained shall be construed to prevent the Issuer from
enforcing directly any of its rights under Sections 4.2(e), 4.2(g), 5.3 and 6.4
hereof.

     Section 6.3. No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Issuer is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise any
right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the Issuer or the Trustee to exercise any remedy reserved to it in this
Article, it shall not be necessary to give any notice, other than such notice as
may be herein expressly required. Subject to the provisions of the Indenture and
hereof, such rights and remedies as are given the Issuer hereunder shall also
extend to the Trustee. The Owners of the Bonds, subject to the provisions of the
Indenture, shall be entitled to the benefit of all covenants and agreements
herein contained.

     Section 6.4. Agreement to Pay Fees and Expenses of Counsel. In the event
the Company should default under any of the provisions of this Agreement and the
Issuer or the Trustee should employ Counsel or incur other expenses for the
collection of the indebtedness hereunder or the enforcement of performance or
observance of any obligation or agreement on the part of the Company herein
contained, the Company agrees that it will on demand therefor pay to the
Trustee, the Issuer or, if so directed by the Issuer, to the Counsel for the
Issuer, the reasonable fees and expenses of such Counsel and such other expenses
so incurred by or on behalf of the Issuer or the Trustee.

     Section 6.5. No Additional Waiver Implied by One Waiver; Consents to
Waivers. In the event any agreement contained in this Agreement should be
breached by either party and thereafter waived by the other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to
waive any other breach hereunder. No waiver shall be effective unless in writing
and signed by the party making the waiver. The Issuer shall have no power to
waive any default hereunder by the Company without the consent of the Trustee to
such waiver. The Trustee shall have the power to waive any default by the
Company hereunder, except a default under Section 3.4, 4.2(e), 4.2(g), 5.3 or
6.4 hereof, in so far as it pertains to the Issuer, without the prior written
concurrence of the Issuer. Notwithstanding the foregoing, if, after the
acceleration of the maturity of the outstanding Bonds by the Trustee pursuant to
Section 9.02 of the Indenture, (i) all arrears of principal of and interest on
the outstanding Bonds and interest on overdue principal and (to the extent
permitted by law) on overdue installments of interest at the rate of interest
borne by the Bonds on the date on which such principal or interest became due
and payable and the premium, if any, on all Bonds then Outstanding which have
become due and payable otherwise than by acceleration, and all other sums
payable under the Indenture, except the principal of and the interest on such
Bonds which by such acceleration shall have become due and payable, shall have
been paid, (ii) all other things shall have been performed in respect of which
there was a default, (iii) there shall have been paid the reasonable fees and
expenses of the Trustee and of the Owners of such Bonds, including reasonable
attorneys' fees paid or incurred and (iv) such event of default under the
Indenture shall be waived in accordance with Section 9.09 of the Indenture with
the consequence that such acceleration

                                      -16-
<PAGE>

under Section 9.02 of the Indenture is rescinded, then the Company's default
hereunder shall be deemed to have been waived and its consequences rescinded and
no further action or consent by the Trustee or the Issuer shall be required;
provided that there has been furnished an opinion of Bond Counsel to the effect
that such waiver will not adversely affect the exemption from federal income
taxes of interest on the Bonds.

                                  Article VII

                      Options and Obligations of Company;
                       Prepayments; Redemption of Bonds

     Section 7.1. Option to Prepay. The Company shall have, and is hereby
granted, the option to prepay the payments due hereunder in whole or in part at
any time or from time to time (a) to provide for the redemption of Bonds
pursuant to the provisions of Section 3.01(A) of the Indenture or (b) to provide
for the defeasance of the Bonds pursuant to Article VIII of the Indenture. In
the event the Company elects to provide for the redemption of Bonds as permitted
by this Section, the Company shall notify and instruct the Trustee in accordance
with Section 7.3 hereof to redeem all or any portion of the Bonds in advance of
maturity. If the Company so elects, any redemption of Bonds pursuant to Section
3.01(A) of the Indenture may be made conditional.

     Section 7.2. Obligation to Prepay. The Company covenants and agrees that if
all or any part of the Bonds are unconditionally called for redemption in
accordance with the Indenture or become subject to mandatory redemption, it will
prepay the indebtedness hereunder in whole or in part, prior to the date on
which notice of such redemption is given to the owners of such Bonds, in an
amount sufficient to redeem such Bonds on the date fixed for the redemption of
the Bonds.

     Section 7.3. Notice of Prepayment. Upon the exercise of the option granted
to the Company in Section 7.1 hereof, or upon the Company having knowledge of
the occurrence of any event requiring mandatory redemption of the Bonds in
accordance with Section 3.01(B) of the Indenture, the Company shall give written
notice to the Issuer, the Bank, the Remarketing Agent, the Auction Agent and the
Trustee. The notice shall provide for the date of the application of the
prepayment made by the Company hereunder to the retirement of the Bonds in whole
or in part pursuant to call for redemption and shall be given by the Company not
less than 45 days prior to the date of the redemption which is to occur as a
result of such prepayment (or such later date as is acceptable to the Trustee
and the Issuer), and in the case of a redemption of Bonds pursuant to Section
3.01(B) of the Indenture shall be given on a date which will permit the
redemption of the Bonds within the time required by Section 3.01(B) of the
Indenture.

                                      -17-
<PAGE>

                                 Article VIII

                                 Miscellaneous

          Section 8.1. Notices. Except as otherwise provided herein, all
notices, certificates or other communications hereunder shall be sufficiently
given if in writing and shall be deemed given when mailed by first class mail,
postage prepaid, or by qualified overnight courier service, courier charges
prepaid, or by facsimile (receipt of which is orally confirmed) addressed as
follows: if to the Issuer, at 500 South Grand Central Parkway, 6th Floor
(89106), P.O. Box 551601, Las Vegas, Nevada 89155-1601, or to telecopy number
(702) 455-3558, Attention: County Manager; if to the Company, at P.O. Box 230,
6226 West Sahara Avenue, Las Vegas, Nevada 89146, or to telecopy number (702)
367-5864, Attention: Treasurer; if to the Trustee, at 101 Barclay Street - 8W,
New York, New York 10286, or to telecopy number (212) 815-5096, Attention:
Corporate Trust Trustee Administration; if to the Remarketing Agent, at Lehman
Brothers Inc., 200 Vesey Street, New York, New York 10285, Attention: Steve
Peters, or to telecopy number (212) 526-3738; and if to the Auction Agent, at
The Bank of New York, 100 Church Street, 14th Floor, New York, New York 10286,
Attention: Dealing & Trading Group, Auction Desk, or to telecopy number (212)
437-7255. In case by reason of the suspension of regular mail service, it shall
be impracticable to give notice by first class mail of any event to the Issuer,
to the Company, to the Remarketing Agent, to the Auction Agent when such notice
is required to be given pursuant to any provisions of this Agreement, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be sufficient giving of such notice. The Issuer, the Company, the
Trustee, the Remarketing Agent and the Auction Agent may, by notice pursuant to
this Section 8.1, designate any different addresses to which subsequent notices,
certificates or other communications shall be sent.

          Section 8.2.  Assignments.  This Agreement may not be assigned by
either party without consent of the other and the Trustee, except that the
Issuer shall assign to the Trustee its rights under this Agreement (except under
Sections 4.2(e), 4.2(g), 5.3, and 6.4 hereof) as provided by Section 4.4 hereof,
and the Company may assign its rights under this Agreement to any transferee or
any surviving or resulting corporation as provided by Section 5.1 hereof.

          Section 8.3.  Severability.  If any provision of this Agreement shall
be held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to
any extent whatever.

          Section 8.4.  Execution of Counterparts.  This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.

          Section 8.5.  Amounts Remaining in Bond Fund.  It is agreed by the
parties hereto that after payment in full of (i) the Bonds (or provision for
payment thereof having been made in accordance with the provisions of the
Indenture), (ii) the fees, charges and expenses of the Trustee in accordance
with the Indenture, (iii) the Administrative Expenses, (iv) the fees and

                                      -18-
<PAGE>

expenses of the Remarketing Agent, the Auction Agent and the Issuer and (v) all
other amounts required to be paid under this Agreement and the Indenture, any
amounts remaining in the Bond Fund shall belong to and be paid to the Company by
the Trustee.

     Section 8.6. Amendments, Changes and Modifications. This Agreement may be
amended, changed, modified, altered or terminated only by written instrument
executed by the Issuer and the Company, and only if the written consent of the
Trustee thereto is obtained. Subject to the written consent of the Trustee, the
Issuer and the Company agree to enter into such amendments, changes and
modifications to this Agreement (i) as may be required by the provisions of this
Agreement or the Indenture, (ii) for the purpose of curing any ambiguity, formal
defect or omission in this Agreement, (iii) so as to add additional rights
acquired in accordance with the provisions of this Agreement, (iv) to preserve
the exemption from federal income taxes of interest on the Bonds, or any of
them, or (v) in connection with any other change herein which is not to the
prejudice of the Trustee or the Owners of the Bonds; provided, however, that the
Issuer shall not thereby incur any monetary obligation or liability (except only
to the extent that the same shall be payable solely and only out of funds
provided or to be provided by the Company) or surrender or abdicate in whole or
in part any of its essential governmental functions or powers or any of its
discretion in exercising the same.

     Section 8.7. Governing Law. This Agreement shall be governed exclusively by
and construed in accordance with the applicable laws of the State.

     Section 8.8. Authorized Issuer and Company Representatives. Whenever under
the provisions of this Agreement the approval of the Issuer or the Company is
required to take some action at the request of the other, such approval of such
request shall be given for the Issuer by the Authorized Issuer Representative
and for the Company by the Authorized Company Representative, and the other
party hereto and the Trustee shall be authorized to act on any such approval or
request and neither party hereto shall have any complaint against the other or
against the Trustee as a result of any such action taken.

     Section 8.9. Term of the Agreement. This Agreement shall be in full force
and effect from its date to and including such date as all of the Bonds issued
under the Indenture shall have been fully paid or retired (or provision for such
payment shall have been made as provided in the Indenture), provided that all
representations and certifications by the Company as to all matters affecting
the tax-exempt status of the Bonds and the covenants of the Company in Sections
4.2(c), 4.2(d), 4.2(e), 4.2(f) and 4.2(g) hereof shall survive the termination
of this Agreement.

     Section 8.10. Cancellation at Expiration of Term. At the acceleration,
termination or expiration of the term of this Agreement and following full
payment of the Bonds or provision for payment thereof and of all other fees and
charges having been made in accordance with the provisions of this Agreement and
the Indenture, the Issuer shall deliver to the Company any documents and take or
cause the Trustee to take such actions as may be necessary to effectuate the
cancellation and evidence the termination of this Agreement.

     Section 8.11. Bond Insurance. The payment of the principal of and interest
on the Bonds when due is to be insured under, and to the extent provided in, the
municipal bond

                                     -19-
<PAGE>

insurance policy, including the endorsements thereto, to be issued by Ambac
Assurance Corporation, and the Issuer and the Company agree to be bound by the
provisions contained in Appendix C to the Indenture. In the event of any
conflict between the provisions of Appendix C to the Indenture and the
provisions of this Agreement, the provisions of Appendix C shall govern and
control.

                                      -20-
<PAGE>

     In Witness Whereof, the Issuer and the Company have caused this Agreement
to be executed in their respective corporate names and their respective
corporate seals to be hereunto affixed and attested by their duly authorized
officers, all as of the date first above written.

                                        Clark County, Nevada

                                        By
                                                        Chairman
                                             Board of County Commissioners
(SEAL)

Attest:

________________________________
               County Clerk

                                        Nevada Power Company

                                        By
                                             _____________________________
(SEAL)

Attest:

________________________________
               Secretary

                                      -21-

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