Document:

Exhibit 10.10

 

WPS RESOURCES CORPORATION

DEFERRED COMPENSATION PLAN

As Amended and Restated Effective January 1, 2005

 

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WPS RESOURCES CORPORATION

DEFERRED COMPENSATION PLAN

    The WPS Resources Corporation Deferred Compensation Plan (the
"Plan") has been adopted to promote the best interests of WPS
Resources Corporation (the "Company") and the stockholders of the
Company by attracting and retaining key management employees and non-employee
directors possessing a strong interest in the successful operation of the
Company and its subsidiaries or affiliates and encouraging their continued
loyalty, service and counsel to the Company and its subsidiaries or affiliates.
The Plan is amended and restated effective January 1, 2005 as set forth herein
to reflect, among other things, the requirements of the American Jobs Creation
Act of 2004 and for the purpose of presenting the Plan to the Company's
shareholders for approval with respect to the number of shares of WPS Resources
Stock authorized for issuance under the Plan.

    Except as expressly provided herein, the Plan, as herein amended and restated
effective January 1, 2005, applies to (i) those employees who are actively
employed by the Company or a Participating Employer on January 1, 2005, and who
have been designated for participation by the Committee, and (ii) non-employee
directors of the Company and designated subsidiaries and affiliates. Except as
expressly provided herein, distribution of benefits to an employee who retired
from or terminated employment with the Company prior to January 1, 2005, or a
director who terminated from service with the Company prior to January 1, 2005,
shall be governed by the terms of the Plan (or predecessor plan) as in effect on
the date of the employee's or director's retirement or termination of
employment or service.

 

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ARTICLE I. DEFINITIONS AND CONSTRUCTION

    Section  1.01. Definitions.

    The following terms have the meanings indicated below unless the context in
which the term is used clearly indicates otherwise:

    (a) Account: The record keeping account or accounts maintained to
record the interest of each Participant under the Plan. An Account is
established for record keeping purposes only and not to reflect the physical
segregation of assets on the Participant's behalf. To the extent relevant with
respect to any Participant, the Participant's overall Account shall include
the subaccounts and balances identified in Section 5.01, and may consist of such
other subaccounts or balances as the Committee may determine to be necessary or
appropriate.

    (b) Act: The Securities Act of 1933, as interpreted by regulations and
rules issued pursuant thereto, all as amended and in effect from time to time.
Any reference to a specific provision of the Act shall be deemed to include
reference to any successor provision thereto.

    (c) Affiliate: A corporation, trade or business that, with the
Company, forms part of a controlled group of corporations, group of trades or
businesses under common control, or affiliated service group within the meaning
of Code Section 414(b), (c) or (m).

    (d) Annual Bonus Deferral: See Section 1.01(m)(iii).

    (e) Available Investment Option: See Section 6.01(a).

    (f) Base Compensation: The base salary or wage payable by a
Participating Employer to an Eligible Employee for services performed prior to
reduction for contributions by the Eligible Employee to this Plan or pre-tax or
after-tax contributions by the Eligible Employee to any other employee benefit
plan maintained by a Participating Employer, but exclusive of extraordinary
payments such as overtime, bonuses, meal allowances, reimbursed expenses,
termination pay, moving pay, commuting expenses, severance pay, non-elective
deferred compensation payments or accruals, stock options, or the value of
employer-provided fringe 

 

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 benefits or coverage, all as determined in accordance
with such uniform rules, regulations or standards as may be prescribed by the
Committee.

    (g) Base Compensation Deferral: See Section 1.01(m)(i).

    (h) Beneficiary: The person or entity designated by a Participant to
be his or her beneficiary for purposes of this Plan. If a Participant designates
his or her spouse as a beneficiary, such beneficiary designation automatically
shall become null and void on the date of the Participant's divorce or legal
separation from such spouse. If a valid designation of beneficiary is not in
effect at time of the Participant's death, the estate of the Participant is
deemed to be the sole beneficiary. If a beneficiary dies while entitled to
receive distributions from the Plan, any remaining payments shall be paid to the
estate of that beneficiary. Beneficiary designations shall be in writing, filed
with the Committee, and in such form as the Committee may prescribe for this
purpose.

    (i) Board: The Board of Directors of the Company.

    (j) Code: The Internal Revenue Code of 1986, as interpreted by
regulations and rulings issued pursuant thereto, all as amended and in effect
from time to time. Any reference to a specific provision of the Code shall be
deemed to include reference to any successor provision thereto.

    (k) Committee: The Compensation Committee of the Board (with respect
to Eligible Employee participation) or the Governance Committee of the Board
(with respect to Director participation).

    (l) Company: WPS Resources Corporation, or any successor corporation.

    (m) Deferral: An amount credited, in accordance with a Participant's
election, to the Participant's Account under the Plan in lieu of the current
payment of an equal amount of cash compensation to the Participant. Deferrals
made after June 30, 2001 include the following:

            
            (i) Base Compensation Deferral: A Deferral of all or a
            portion of an Eligible Employee's Base Compensation in accordance
            with Section 3.02.

 

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            (ii) Director Deferral. A Deferral by a Director of all or
            a portion of his or her Director Fees in accordance with Section
            4.02.

            
            (iii) Annual Bonus Deferral: A Deferral of all or a
            portion of an Eligible Employee's annual bonus award in accordance
            with Section 3.03.

            
            (iv) LTIP Deferral: A Deferral of all or a portion of the
            performance shares or other stock-based compensation awarded to an
            Eligible Employee under the Omnibus Plan, in accordance with Section
            3.04.

    (n) Director: A non-employee member of the Board, a non-employee
member of the board of directors of an Affiliate who is designated for
participation by the Board, and where the context so requires, a former director
entitled to receive a benefit hereunder

    (o) Director Deferral: See Section 1.01(m)(ii).

    (p) Director Fees: Those fees, other than fees designated for the
Deferred Stock Unit Account, payable to a Director for services rendered on the
Board (including attendance fees and fees for serving as a committee chair) or
for service on the board of directors of an Affiliate.

    (q) Disability: The inability of a Participant to engage in any
substantial gainful activity by reason of a medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, as determined by the
Committee.

    (r) Eligible Employee: Subject to Section 2.02, a common law employee
of a Participating Employer who has been designated by the Committee as being
eligible to participate in this Plan and, where the context so requires, a
former employee entitled to receive a benefit hereunder.

    (s) ERISA: The Employee Retirement Income Security Act of 1974, as
interpreted by regulations and rulings issued pursuant thereto, all as amended
and in effect from time to 

 

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 time. Any reference to a specific provision of ERISA
shall be deemed to include reference to any successor provision thereto.

    (t) Exchange Act: The Securities Exchange Act of 1934, as interpreted
by regulations and rules issued pursuant thereto, all as amended and in effect
from time to time. Any reference to a specific provision of the Exchange Act
shall be deemed to include reference to any successor provision thereto.

    (u) Investment Options: The hypothetical investment accounts described
in Article V and such other investment options as the Committee may from time to
time determine (which may, but need not, be based upon one or more of the
investment options available under the Wisconsin Public Service Corporation
Administrative Employees Savings Plan).

    (v) LTIP Deferral: See Section 1.01(m)(iv).

    (w) Omnibus Plan: The WPS Resources Corporation 2001 Omnibus Incentive
Compensation Plan or the WPS Resources Corporation 2005 Omnibus Incentive
Compensation Plan, as required by the context.

    (x) Participant: A Director and/or an Eligible Employee, as required
by the context.

    (y) Participating Employer: The Company and each Affiliate that, with
the consent of the Committee, participates in the Plan for the benefit of one or
more Participants.

    (z) "Pre-2005 Account: See Section 5.01(a).

    (aa) "Post-2004 Account: See Section 5.01(b).

    (bb) Stock Unit Accounts: The Incentive Stock Unit Account described
in Section 5.04, the Deferred Stock Unit Account described in Section 5.05, the
Base Stock Unit Account described in Section 5.06, and the Prior Plan WPS Stock
Unit Account described in Section 5.07.

    (cc) Trust: The WPS Resources Corporation Deferred Compensation Trust
or other funding vehicle which may from time to time be established, as amended
and in effect from time to time.

 

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    (dd) Valuation Date: See Section 6.01(e).

    (ee) WPS Resources Stock: The common stock, $1.00 par value, of the
Company.

    (ff) WPS Resources Stock Units: The hypothetical shares of WPS
Resources Stock that are credited to the Stock Unit Accounts in accordance with
Sections 5.04, 5.05, 5.06 and 5.07.

   
Section  
1.02. Construction
and Applicable Law.

    (a) Wherever any words are used in the masculine, they shall be
construed as though they were used in the feminine in all cases where they would
so apply; and wherever any words are use in the singular or the plural, they
shall be construed as though they were used in the plural or the singular, as
the case may be, in all cases where they would so apply. Titles of articles and
sections are for general information only, and the Plan is not to be construed
by reference to such items.

    (b) This Plan is intended to be a plan of deferred compensation
maintained for a select group of management or highly compensated employees as
that term is used in ERISA, and shall be interpreted so as to comply with the
applicable requirements thereof. In all other respects, the Plan is to be
construed and its validity determined according to the laws of the State of
Wisconsin to the extent such laws are not preempted by federal law. In case any
provision of the Plan is held illegal or invalid for any reason, the illegality
or invalidity will not affect the remaining parts of the Plan, but the Plan
shall, to the extent possible, be construed and enforced as if the illegal or
invalid provision had never been inserted.

 

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ARTICLE II. PARTICIPATION

    Section  2.01. Eligibility.

    (a) A Director shall be eligible to participate in the Plan.

    (b) An employee shall be eligible to participate in the Plan only if
the employee is employed by a Participating Employer and if the employee has
been designated as an Eligible Employee by the Committee. When designating an
employee as an Eligible Employee, the Committee, in its sole discretion, may
designate the employee for participation in the entire Plan or any part thereof.

   
Section  
2.02. Certain
Transfers of Employment.

    If determined by the Committee to be consistent with the requirements of Code
Section 409A and if directed by the Committee, a Participant whose employment is
transferred to a corporation or other entity (the "Transferee
Employer") that is not a Participating Employer, but in which the Company
or an Affiliate holds an ownership interest, then until the earliest to occur of
(a) the date on which the Participant ceases to be employed by such Transferee
Employer, (b) the date on which the Company or an affiliate of the Company no
longer holds an ownership interest in the Transferee Employer, or (c) such other
date determined by the Committee, the Participant shall be treated as if he or
she were still actively employed by a Participating Employer. The foregoing rule
shall apply only for the purpose of determining whether the Participant has
terminated employment for purposes of the distribution provisions of Articles
VII and VIII; it shall not apply, and the Participant shall not be entitled to
make additional Deferrals, with respect to remuneration attributable to services
rendered with the Transferee Employer. The Committee may promulgate such
additional rules as may be necessary or desirable in connection with any such
transfer of employment.

 

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ARTICLE III. EMPLOYEE DEFERRED COMPENSATION

    Section  3.01. Application.
This Article III applies to Participants other than Directors.

   
Section  
3.02. Deferrals
Of Base Compensation.

    (a) Amount. A Participant may elect, in such form and manner as
the Committee may prescribe, to defer payment of a portion of the Base
Compensation that would otherwise be paid to the Participant. A Participant's
election shall specify the percentage (in increments of 1% to a maximum of 100%
or such lesser amount or percentage as may be established by the Committee, or
as may be necessary in order to comply with applicable withholding obligations,
whether attributable to withholdings required under applicable law or other
authorized withholdings) of the Participant's Base Compensation that the
Participant wishes to defer.

    (b) Initial Deferral Election. In the case of a Participant who
has been designated for participation for the first time and who completes a
Deferral election within 30 days of becoming eligible to participate in the
Plan, the Participant's validly executed Deferral election shall become
effective with respect to services to be performed subsequent to the election or
on such later date as determined by the Committee for reasons of administrative
convenience. If the Participant does not submit a Deferral election during the
initial 30 day election period, the Participant may thereafter elect to defer
payment of Base Compensation by submitting a validly executed Deferral election
to the Committee, but the election shall become effective and shall apply only
to Base Compensation for services performed on or after January 1 of the
calendar year following the calendar year during which the election is received
and accepted by the Committee, or as soon thereafter as practicable. A
Participant's Deferral election, once effective, shall remain in effect until
modified by the Participant in accordance with subsection (c) below or otherwise
revoked in accordance with Plan rules.

    (c) Revised Deferral Election. Except to the extent that the
Committee is permitted to give earlier effect to a Participants revocation or
revision to his or her Deferral election in accordance with regulations
promulgated by the Secretary of the Treasury under Code Section 409A, a
Participant's Deferral election, once effective with respect to a calendar
year, may not be revoked or modified with respect to Base Compensation for
services performed in that calendar 

 

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 year. A Participant may modify his or her
then current Deferral election by filing a revised Deferral election form,
properly completed and signed, with the Committee. However, except to the extent
that the Committee is permitted to give earlier effect to a Participant's
revised election in accordance with regulations promulgated by the Secretary of
the Treasury under Code Section 409A, the revised election will be effective
only with respect to Base Compensation for services performed on or after
January 1 of the calendar year following the calendar year during which the
revised election is received and accepted by the Committee, or as soon
thereafter as practicable. A Participant's revised Deferral election, once
effective, shall remain in effect until again modified by the Participant under
this subsection (c) or otherwise revoked in accordance with Plan rules.

   
Section  
3.03. Deferrals
of Annual Bonus Awards.

    A Participant may irrevocably elect, in such form and manner as the Committee
may prescribe, to defer payment of a portion of the annual cash bonus that is
awarded and that would otherwise be paid to the Participant with respect to any
year. A Participant's election shall specify the percentage (in increments of
1% to a maximum of 100% or such lesser amount or percentage as may be
established by the Committee, or as may be necessary in order to comply with
applicable withholding obligations, whether attributable to withholdings
required under applicable law or other authorized withholdings) of the
Participant's annual cash bonus that the Participant wishes to defer. In the
case of any award that is not performance-based compensation for purposes of
Code Section 409A, a validly executed Deferral election shall be effective only
if the Deferral election is received and accepted by the Committee prior to the
last day of the calendar year preceding the calendar year for which the annual
bonus is paid, or by such other time as provided in regulations promulgated by
the Secretary of the Treasury. In the case of any award that is
performance-based compensation for purposes of Code Section 409A, a validly
executed Deferral election shall become effective with respect to the annual
bonus that may be awarded to the Participant with respect to a calendar year if
the Participant's Deferral election is received and accepted by the Committee
at least 6 months prior to the end of the (calendar year) performance period for
the bonus, or by such earlier (but not later) date as the Committee may
establish. A Participant's election to defer an annual bonus award shall be
effective only for the year to which the election relates, and shall not carry
over from year to 

 

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 year. Notwithstanding the foregoing, a Participant's
election to defer all or a portion of an award shall not be effective with
respect to an award paid after the Participant's termination of employment if
distribution to the Participant in accordance with Article VII or Article VIII
has commenced.

   
Section  
3.04. Deferral
of LTIP Share Awards.

    A Participant may irrevocably elect, in such form and manner as the Committee
may prescribe, to defer payment of a portion of any performance share or other
stock-based compensation awarded to the Participant under the Omnibus Plan. A
Participant's election shall specify the whole number of shares (up to 100% of
such shares or such lesser number or percentage as may be established by the
Committee, or as may be necessary in order to comply with applicable withholding
obligations, whether attributable to withholdings required under applicable law
or other authorized withholdings) of the Participant's award that the
Participant wishes to defer. In the case of any award that is not
performance-based compensation for purposes of Code Section 409A, a validly
executed Deferral election shall be effective only if the Deferral election is
received and accepted by the Committee prior to the last day of the Participant's
tax year preceding the year during which the service period for the award
begins, or by such other time as provided in regulations promulgated by the
Secretary of the Treasury. In the case of any award that is performance-based
compensation for purposes of Code Section 409A, a validly executed Deferral
election shall become effective with respect to shares to be earned by the
Participant with respect to any Omnibus Plan performance period if the
Participant's Deferral election is received and accepted by the Committee at
least 6 months prior to the end of such performance period or by such earlier
(but not later) date as the Committee may establish. A Participant's election
to defer an award shall be effective only for the Omnibus Plan service period or
performance period to which the election relates, and a Participant's election
does not carry over from performance period to performance period or from
service period to service period. A Participant's LTIP Deferral will be
automatically credited to the Participant's Incentive Stock Unit Account.
Notwithstanding the foregoing, (a) a Participant's election to defer all or a
portion of an award shall not be effective with respect to an award paid after
the Participant's termination of employment if distribution to the Participant
in accordance with Article VII or Article VIII has commenced, and (b) a
Participant may defer the receipt of 

 

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 shares upon exercise of a stock option or
stock appreciation right only if and to the extent authorized by the Committee
and in accordance with procedures designated by the Committee for purposes of
complying with the requirements of Code Section 409A.

   
Section  
3.05. Matching
Contribution Credits.

    (a) Allocation of Credits. A Participant who is a participant
in the Wisconsin Public Service Corporation Administrative Employees' Savings
Plan ("Savings Plan") and who makes Base Compensation Deferrals and/or
Annual Bonus Deferrals under this Plan shall be entitled to a matching
contribution credit, determined as of December 31 of each year, equal to the
difference (if any) between:

            
            (i) The value of the matching contribution that the
            Participant would have received under the Savings Plan, if Base
            Compensation Deferrals and Annual Bonus Deferrals made by the
            Participant under this Plan were instead treated as
            "compensation" under the Savings Plan for purposes of
            applying the Participant's Deferral election under the Savings
            Plan; provided that all limits and restrictions otherwise imposed
            under the Savings Plan, including the maximum compensation limit
            under Section 401(a)(17) of the Code, shall continue to apply; and

            
            (ii) The value of the matching contribution actually
            received by the Participant for that year under the Savings Plan.

    (b) Investment of Credits. A Participant's matching
contribution credit will be automatically credited to the Participant's
Incentive Stock Unit Account.

   
Section  
3.06. Other
Deferrals and Credits. The Committee, in its discretion, may, with respect
to any Participant, determine that the Participant is eligible to make Deferrals
with respect to additional components of the Participant's remuneration or
receive employer contribution credits in addition to the credits described
herein. In no event, however, shall the Committee authorize such additional
Deferrals or credits unless the Committee has first 

 

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 determined that the
Deferrals or credits have been elected or authorized in a manner that will not
result in the imposition of tax under Code Section 409A.

   
Section  
3.07. Involuntary
Termination of Deferral Elections.

    A Participant's Deferral elections shall be automatically revoked upon the
Participant's termination of employment from the Participating Employers,
unless the Committee determines otherwise in accordance with the requirements of
Code Section 409A. In addition, and subject to Code Section 409A, a Participant's
Deferral election will terminate if the Committee determines that the
Participant is no longer eligible to participate in the Plan or that revocation
of a Participant's eligibility is necessary or desirable in order for the Plan
to qualify under ERISA as a plan of deferred compensation for a select group of
management or highly compensated employees.

   
Section  
3.08. 2005
Transitional Rules. Notwithstanding the rules otherwise set forth in this
Article III regarding the timing of Deferral elections, and in accordance with
Internal Revenue Service Notice 2005-1:

    (a) A Participant, no later than March 1, 2005 (or such earlier date
as the Committee may prescribe), may prospectively revise (upward or downward)
his or her prior Deferral election with respect to 2005 Base Compensation that
has not been paid or become payable at the time of the revised election. This
includes the revision of a prior Deferral election (or deemed Deferral election)
in which the Participant elected not to defer any amount.

    (b) A Participant, no later than March 1, 2005 (or such earlier date
as the Committee may prescribe), may revise (upward or downward) his or her
prior Deferral election with respect to (i) the 2004 annual bonus (the
Participant's right to and amount of which is determined, and absent a
Deferral election would be payable, in 2005), (ii) the 2005 annual bonus (the
Participant's right to and amount of which is determined, and absent a
Deferral election would payable, in 2006), (iii) the 2002-2004 Omnibus Plan
bonus (the Participant's right to and the amount of which is determined, and
absent a Deferral election would be payable, in 2005), and (iv) the 2003-2005
Omnibus Plan bonus (the Participant's right to and the amount of which is
determined, and absent a Deferral election would be payable, in 2006). Each of
the foregoing 

 

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 incentive bonus amounts (if awarded) is subject to the
requirements of Code Section 409A and, absent a Deferral election, would be
payable after the latest election date established for that bonus award. The
right to revise a prior Deferral election includes the revision of a prior
Deferral election (or deemed Deferral election) in which the Participant elected
not to defer any amount.

    (c) On or before December 31, 2005, the Committee may (but need not)
permit a Participant who has made a Deferral election with respect to one or
more of the compensation categories described in subsections (a) and (b) above,
to cancel any such Deferral election, in whole or in part, in accordance with
Code Section 409A.

 

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ARTICLE IV. DIRECTOR DEFERRED COMPENSATION

    Section  4.01. Application.
This Article IV applies only to Directors.

   
Section
 
4.02. Deferrals
Of Director Fees.

    (a) Amount. A Director may elect, in such form and manner as
the Committee may prescribe, to defer payment of all or a portion of the
Director Fees that would otherwise be paid to the Director. A Director's
election shall specify the percentage (in increments of 1% to a maximum of 100%
or such lesser amount or percentage as may be established by the Committee, or
as may be necessary in order to comply with applicable withholding obligations,
whether attributable to withholdings required under applicable law or other
authorized withholdings) of the Director Fees that the Director wishes to defer.

    (b) Initial Deferral Election. In the case of a Director who
has become eligible for participation for the first time, and who completes a
Deferral election within 30 days of becoming eligible to participate in the
Plan, the Director's validity executed Deferral election shall become
effective with respect to services to be performed subsequent to the election or
on such later date as determined by the Committee for reasons of administrative
convenience. If the Director does not submit an initial Deferral election during
the initial 30 day election period, the Director may thereafter elect to defer
the payment of Director Fees by submitting a validly executed Deferral election
to the Committee, but the election shall become effective and shall apply only
to Directors Fees for services performed on or after January 1 of the calendar
year following the calendar year in which the election is received and accepted
by the Committee, or as soon thereafter as practicable. A Director's Deferral
election, once effective, shall remain in effect until modified by the Director
in accordance with subsection (c) below or otherwise revoked in accordance with
Plan rules.

    (c) Revised Deferral Election. Except to the extent that the
Committee is permitted to give earlier effect to a Director's revocation or
revision to his or her Deferral election in accordance with regulations
promulgated by the Secretary of the Treasury under Code Section 409A, a Director's
Deferral election, once effective with respect to a calendar year, may not be
modified or revoked with respect to Director Fees for services performed in that
calendar year. A Director may modify his or her then current Deferral election
by filing a revised Deferral 

 

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 election form, properly completed and signed, with
the Committee. However, except to the extent that the Committee is permitted to
give earlier effect to a Participants revision to his or her Deferral election
in accordance with regulations promulgated by the Secretary of the Treasury
under Code Section 409A, the revised election will be effective with respect to
Director Fees for services performed on or after January 1 of the calendar year
following the calendar year during which the revised election is received and
accepted by the Committee, or as soon thereafter as practicable. A Director's
revised Deferral election, once effective, shall remain in effect until again
modified by the Director in accordance with this subsection (c) or otherwise
revoked in accordance with Plan rules.

   
Section

 
4.03. Deferred
Stock Units.

    The Board may from time to time direct that a portion of the remuneration to
be earned by a Director for service on the Board shall be credited under this
Plan in the form of Deferred Stock Units. Except to the extent that the
Committee is permitted to give earlier effect to a direction in accordance with
regulations promulgated by the Secretary of the Treasury under Code Section
409A, any such direction shall be effective with respect to remuneration to be
earned by the Director on and after January 1 of the calendar year following the
date of such direction, and shall continue in effect through December 31 of the
calendar year in which modified or revoked by a subsequent direction of the
Board. The Board's direction may provide either for the direct credit of
Deferred Stock Units or for the mandatory deferral of a prescribed amount of
cash remuneration that will be converted into WPS Stock Units in accordance with
Section 5.05(b) below.

    
Section  
4.04. Involuntary
Termination of Deferral Elections.

    A Director's Deferral elections shall be automatically revoked upon the
Director's termination of service with the Participating Employers, unless the
Committee determines otherwise in accordance with Code Section 409A. In
addition, and subject to Code Section 409A, a Director's Deferral election
will terminate if the Committee determines that the Director is no longer
eligible to participate in the Plan.

 

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Section  
4.05. 2005
Transitional Rules. Notwithstanding the rules otherwise set forth in this
Article IV regarding the timing of Deferral elections, and in accordance with
Internal Revenue Service Notice 2005-1:

    (a) A Director, no later than March 1, 2005 (or such earlier date as
the Committee may prescribe), may prospectively revise (upward or downward) his
or her prior Deferral election with respect to 2005 Director Fees that has not
been paid or become payable at the time of the revised election. This includes
the revision of a prior Deferral election (or deemed Deferral election) in which
the Director elected not to defer any amount.

    (b) On or before December 31, 2005, the Committee may (but need not)
permit a Director who has made a Deferral election with respect to 2005 Director
Fees, to cancel such Deferral election, in whole or in part.

 

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ARTICLE V. ACCOUNTS AND HYPOTHETICAL INVESTMENT OPTIONS

    Section  5.01. Participant
Accounts.

    To the extent relevant, a Participant's Account shall consist of the
following subaccounts or balances:

    (a) The "Pre-2005 Account", to record the Participant's
interest with respect to Deferrals or contribution credits made prior to January
1, 2005, together with any earnings or loss thereon through the date of
distribution from the Plan, and which shall consist of the following:

            
            (i) "Reserve Account A", reflecting the
            Participant's entire interest in Reserve Account A;

            
            (ii) "Pre-July 1, 2001 Reserve Account B",
            reflecting the portion of the Participant's balance in Reserve
            Account B that is attributable to Deferrals made through June 30,
            2001, together with all credits of interest equivalent on such
            Deferrals through the date of distribution from the Plan;

            
            (iii) "July 1, 2001 Through December 31, 2004 Reserve
            Account B", reflecting the portion of the Participant's
            balance in Reserve Account B that is attributable to Deferrals made
            after June 30, 2001 and through December 31, 2004, together with all
            credits of interest equivalent on such Deferrals through the date of
            distribution from the Plan;

            
            (iv) "Pre-2005 Incentive Stock Unit Account",
            reflecting the portion of the Participant's balance in the
            Incentive Stock Unit Account that is attributable to Annual Bonus
            Deferrals, LTIP Deferrals and matching contribution credits made
            after June 30, 2001 and through December 31, 

 

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             2004, together with
            earnings or loss thereon through the date of distribution from the
            Plan;

            
            (v) "Pre-2005 Deferred Stock Unit Account",
            reflecting the portion of the Participant's Deferred Stock Unit
            Account that is attributable to Deferred Stock Units allocated to a
            Director through December 31, 2004, and any earnings or loss thereon
            through the date of distribution from the Plan;

            
            (vi) "Pre-2005 Base Stock Unit Account",
            reflecting the portion of the Participant's balance in the Base
            Stock Unit Account that is attributable to Deferrals made after June
            30, 2001 and through December 31, 2004, and any earnings or loss
            thereon through the date of distribution from the Plan;

            
            (vii) "Prior Plan WPS Stock Unit Account",
            reflecting the Participant's entire interest in the Prior Plan WPS
            Stock Unit Account; and

            
            (viii) Pre-2005 Other Investments Account",
            reflecting the Participant's balance in any other Investment
            Option that is attributable to Deferrals made after June 30, 2001
            and through December 31, 2004, and any earnings or loss thereon
            through the date of distribution from the Plan.

    (b) The "Post-2004 Account", to record the Participant's
interest with respect to Deferrals or contribution credits made after December
31, 2004, together with any earnings or loss thereon through the date of
distribution from the Plan, and which shall consist of the following:

            
            (i) "Post-2004 Reserve Account B", reflecting
            the portion of the Participant's balance in Reserve Account B that
            is attributable to Deferrals made after December 31, 2004, 

 

18

<PAGE>

 

             

             together
            with all credits of interest equivalent on such Deferrals through
            the date of distribution from the Plan;

            
            (ii) "Post-2004 Incentive Stock Unit Account",
            reflecting the portion of the Participant's balance in the
            Incentive Stock Unit Account that is attributable to Annual Bonus
            Deferrals, LTIP Deferrals and matching contribution credits made
            after December 31, 2004, and any earnings or loss thereon through
            the date of distribution from the Plan;

            
            (iii) "Post-2004 Deferred Stock Unit Account",
            reflecting the portion of the Participant's Deferred Stock Unit
            Account that is attributable to Deferred Stock Units allocated to a
            Director after December 31, 2004, and any earnings or loss thereon
            through the date of distribution from the Plan;

            
            (iv) "Post-2004 Base Stock Unit Account",
            reflecting the portion of the Participant's balance in the Base
            Stock Unit Account that is attributable to Deferrals made after
            December 31, 2004, and any earnings or loss thereon through the date
            of distribution from the Plan; and

            
            (v) "Post-2004 Other Investments Account",
            reflecting the Participant's balance in any other Investment
            Option that is attributable to Deferrals made after December 31,
            2004, and any earnings or loss thereon through the date of
            distribution from the Plan.

   
Section  
5.02. Reserve
Account A.

    (a) Limited Purpose Account. Reserve Account A is limited to
compensation or director fees deferred by a Participant prior to January 1,
1996, together with attributed earnings on such deferrals. Except for attributed
earnings as described below, no further deferrals, contributions or credits of
any kind will be made to this account on behalf of a Participant.

 

19

<PAGE>

 

    (b) Crediting of Interest Equivalent. Reserve Account A will be
credited with an interest equivalent on the balance in the account from time to
time during the year. Unless the Committee prescribes an alternate method, the
annual interest equivalent rate (on a non-compounded basis) will be the greater
of:

            
            (i) six percent (6.0%); or

            
            (ii) a rate equal to the consolidated return on common
            shareholders' equity of the Company and all consolidated
            subsidiaries (ROE); provided, however, that unless the Committee
            determines otherwise, this Paragraph (ii) will not apply to a
            Participant following termination of employment if the Participant's
            termination of employment with the Company and its Affiliates occurs
            prior to attainment of age 55 and prior to the occurrence of a
            Change in Control (as defined in Section 10.01). For the months of
            April through September, ROE means the consolidated return on equity
            of the Company and all consolidated subsidiaries for the twelve (12)
            months ended on the preceding February 28 (or 29) as calculated
            pursuant to the Company's standard accounting procedure for
            financial reporting to shareholders. For the months October through
            March, ROE means return on equity as described above for the twelve
            (12) months ended on the preceding August 31.

    (c) Revised Rate. Subject to Article X, the Committee may
revise the interest equivalent rate or the manner in which it is calculated, but
in no event shall the rate be less than six percent (6%) per annum. Any such
revised rate shall be effective with the calendar month following such action by
the Committee.

 

20

<PAGE>

 

    
Section  
5.03. Reserve
Account B.

    (a) Availability. Reserve Account B is an Available Investment
Option with respect to the deemed investment of Base Compensation Deferrals,
Director Deferrals and Annual Bonus Deferrals. The Account is credited with
earnings equivalent based upon a percentage of the Company's return on equity
for the year.

    (b) Crediting of Interest Equivalent. Reserve Account B will be
credited with an interest equivalent on the balance in the account from time to
time during the year. Unless the Committee prescribes an alternate method, the
annual interest equivalent rate (on a non-compounded basis) will be the greater
of:

            
            (i) six percent (6.0%); or

            
            (ii) a rate equal to seventy percent (70%) of the
            consolidated return on common shareholders equity of the Company and
            all consolidated subsidiaries (ROE); provided, however, that unless
            the Committee determines otherwise, this Paragraph (ii) will not
            apply to a Participant following termination of employment if the
            Participant's termination of employment with the Company and its
            Affiliates occurs prior to attainment of age 55 and prior to the
            occurrence of a Change in Control (as defined in
            Section 10.01). For the months of April through September, ROE
            means the consolidated return on equity of the Company and all
            consolidated subsidiaries for the twelve (12) months ended on the
            preceding February 28 (or 29) as calculated pursuant to the Company's
            standard accounting procedure for financial reporting to
            shareholders. For the months October through March, ROE means return
            on equity as described above for the twelve (12) months ended on the
            preceding August 31.

 

21

<PAGE>

 

    (c) Revised Rate. Subject to Article X, the Committee may
revise the interest equivalent rate or the manner in which it is calculated, but
in no event shall the rate be less than six percent (6%) per annum. Any such
revised rate shall be effective with the calendar month following such action by
the Committee.

   
Section  
5.04. Incentive
Stock Unit Account.

    (a) Limited Purpose "Buy Only" Account. The Incentive
Stock Unit Account is a "buy only" account limited to (i) Annual Bonus
Deferrals that are made after June 30, 2001 pursuant to Section 3.03 and that
the Participant elects to be credited to the Incentive Stock Unit Account in
accordance with Section 6.01(c), (ii) LTIP Deferrals made after June 30, 2001
pursuant to Section 3.04, and (iii) matching contribution credits made after
June 30, 2001 pursuant to Section 3.05.

    (b) Conversion to WPS Stock Units. All eligible Deferrals made
by or on behalf of a Participant and allocated to the Incentive Stock Unit
Account and all of a Participant's matching contribution credits under Section
3.05 (the "Incentive Stock Unit Convertible Amount") are converted,
for record keeping purposes, into whole and fractional WPS Resources Stock
Units, with fractional units calculated to four decimal places. The conversion
shall be accomplished by dividing each Participant's Incentive Stock Unit
Convertible Amount by the closing price of a share of WPS Resources Stock on the
date on which the Deferral or credit would otherwise have been paid to the
Participant, as reported in the Wall Street Journal's New York Stock Exchange
Composite Transaction listing. Likewise, any dividends that would have been
payable on the WPS Resources Stock Units credited to a Participant's Incentive
Stock Unit Account had such Units been actual shares of WPS Resources Stock
shall be converted, for record keeping purposes, into whole and fractional WPS
Resources Stock Units based on the closing price of a share of WPS Resources
Stock on the dividend date.

   
Section
 
5.05. Deferred
Stock Unit Account.

    (a) Limited Purpose "Buy Only" Account. A Director's
Deferred Stock Unit Account is a "buy only" account limited to
Deferred Stock Units allocated to the Director in 

 

22

<PAGE>

 

 accordance with Section 4.03.
The Director is not able to exercise investment discretion with respect to his
or her Deferred Stock Unit Account.

    (b) Conversion to WPS Stock Units. All Deferred Stock Unit
amounts directed by the Board in accordance with Section 4.03 shall be credited
to the Director's Deferred Stock Unit Account. If the Board directs that a
Director be credited with a prescribed number of WPS Resources Stock Units, the
number of units so prescribed shall be credited to the Director's Deferred
Stock Unit Account. If the Board directs that a Director be credited with WPS
Resources Stock Units with a prescribed value, the value to be credited (the
"Deferred Stock Unit Convertible Amount") will be converted, for
record keeping purposes, into whole and fractional WPS Resources Stock Units,
with fractional units calculated to four decimal places. The conversion shall be
accomplished by dividing each Director's Deferred Stock Unit Convertible
Amount by the closing price of a share of WPS Resources Stock on the effective
date of the grant, as reported in the Wall Street Journal's New York Stock
Exchange Composite Transactions listing. Any dividends that would have been
payable on the WPS Resources Stock Units credited to a Director's Deferred
Stock Unit Account had such Units been actual shares of WPS Resources Stock
shall be converted, for record keeping purposes, into whole and fractional WPS
Resources Stock Units based on the purchase price at which shares of WPS
Resources Stock were purchased under the WPS Resources Corporation Stock
Investment Plan on the purchase date that is coincident with or closest to the
dividend date.

   
Section  
5.06. Base
Stock Unit Account.

    (a) Availability. The Base Stock Unit Account is an Available
Investment Option with respect to the deemed investment of Base Compensation
Deferrals, Director Deferrals and Annual Bonus Deferrals that are made after
June 30, 2001 and that the Participant elects to have credited to the Base Stock
Unit Account in accordance with Section 6.01(b) and (c).

    (b) Conversion to WPS Stock Units. All eligible Deferrals made
by or on behalf of a Participant and allocated to the Base Stock Unit Account
(the "Base Stock Unit Convertible Amount") are converted, for record
keeping purposes, into whole and fractional WPS Resources Stock Units, with
fractional units calculated to four decimal places. The conversion shall be
accomplished by dividing each Participant's Base Stock Unit Convertible Amount
by the closing 

 

23

<PAGE>

 

 price of a share of WPS Resources Stock on the date on which the
Deferral would otherwise have been paid to the Participant, as reported in the
Wall Street Journal's New York Stock Exchange Composite Transaction listing.
Likewise, any dividends that would have been payable on the WPS Resources Stock
Units credited to a Participant's Base Stock Unit Account had such Units been
actual shares of WPS Resources Stock shall be converted, for record keeping
purposes, into whole and fractional WPS Resources Stock Units based on the
closing price of a share of WPS Resources Stock on the dividend date.

    (c) Conversion from WPS Stock Units. If a Participant elects
under Section 6.01(f) to reallocate all or any portion of his or her Base Stock
Unit Account among the other Available Investment Options, the WPS Resources
Stock Units to which such election relates shall be converted, for record
keeping purposes, into an amount equal to the product of such units and the
closing price of a share of WPS Resources Stock, on the effective date of such
reallocation, as reported in the Wall Street Journal's New York Stock Exchange
Composite Transaction listing.

    (d) Securities Law Restrictions. Notwithstanding anything to
the contrary herein, all reallocation elections under Section 6.01(f) by a
Participant who is subject to Section 16 of the Exchange Act are subject to
review by the Committee prior to implementation. Further, the following
reallocation transactions under Section 6.01(f) by a Participant who is subject
to Section 16 of the Exchange Act are prohibited: (i) elections to reallocate
the deemed investment of the affected Participant's Account into WPS Resources
Stock Units within six (6) months of an election to reallocate deemed
investments out of WPS Resources Stock Units; and (ii) elections to reallocate
the deemed investment of the affected Participant's Account out of WPS
Resources Stock Units within six (6) months of an election to reallocate deemed
investments into WPS Resources Stock Units (collectively, "Prohibited
Transactions"). All Prohibited Transactions are void. In accordance with
Section 11.02, the Committee may restrict additional transactions, or impose
other rules and procedures, to the extent deemed desirable by the Committee in
order to comply with the Exchange Act, including, without limitation,
application of the review and approval provisions of this Section 5.06(d) to
Participants who are not subject to Section 16 of the Exchange Act.

 

24

<PAGE>

 

   
Section  
5.07. Prior
Plan WPS Stock Unit Account.

    (a) Limited Purpose Account. The Prior Plan WPS Stock Unit
Account is limited to WPS Resources Stock Units credited to a Participant under
the Plan (or a predecessor plan) through June 30, 2001, together with such
additional WPS Resources Stock Units as are credited in accordance with
subsection (b) below based on deemed dividends on such WPS Resources Stock
Units.

    (b) Dividend Credits. Any dividends that would have been
payable on the WPS Resources Stock Units credited to a Participant's Prior
Plan WPS Stock Unit Account had such Units been actual shares of WPS Resources
Stock shall be converted, for record keeping purposes, into whole and fractional
WPS Resources Stock Units, and shall be credited to the Prior Plan WPS Stock
Unit Account, based on the closing price of a share of WPS Resources Stock on
the dividend date.

 

25

<PAGE>

 

ARTICLE VI. ACCOUNTING AND HYPOTHETICAL INVESTMENT
ELECTIONS

    Section  6.01. Hypothetical
Investment of Participant Accounts.

    (a) Available Investment Options.

            
            (i) For purposes of directing the deemed investment of
            Base Compensation Deferrals and Director Deferrals under subsection
            (b) below and for purposes of reallocating the deemed investment of
            the Participant's Account under subsection (f) below, the
            Available Investment Options shall be all of the Investment Options
            other than Reserve Account A, the Prior Plan WPS Stock Unit Account,
            the Incentive Stock Unit Account and the Deferred Stock Unit
            Account.

            
            (ii) For purposes of directing the deemed investment of
            Annual Bonus Deferrals under subsection (c) below, the Available
            Investment Options shall be all of the Investment Options other than
            Reserve Account A, the Prior Plan WPS Stock Unit Account and the
            Deferred Stock Unit Account.

    (b) Deemed Investment of Base Compensation Deferrals and Director
Deferrals. In accordance with uniform rules prescribed by the Committee,
each Participant shall designate, in writing or in such other manner as the
Committee may prescribe, how Base Compensation Deferrals or Director Deferrals
made while the designation is in effect are credited among the Available
Investment Options. When selecting more than one Available Investment Option,
the Participant shall designate, in whole multiples of 1% or such other
percentage determined by the Committee, the percentage of his or her Base
Compensation Deferrals or Director Deferrals to be credited to each Available
Investment Option. If the Participant fails to make a timely and complete
investment designation, he or she shall be deemed to have elected that 100% of
his or her Base Compensation Deferrals or Director Deferrals be credited to
Reserve Account B or such other of the Available Investment Options specified by
the Committee for this purpose. A 

 

26

<PAGE>

 

 Participant's investment election or deemed
investment election shall become effective beginning with the first payroll
period commencing or payment date occurring on or after the date on which the
election is received and accepted by the Committee, or such other date
established by the Committee for this purpose, and shall remain in effect unless
and until modified by a subsequent election that becomes effective in accordance
with the rules of this subsection.

    (c) Deemed Investment of Annual Bonus Deferrals. In accordance
with uniform rules prescribed by the Committee, each Participant shall
designate, in writing or in such other manner as the Committee may prescribe,
how Annual Bonus Deferrals made while the designation is in effect are credited
among the Available Investment Options. When selecting more than one Available
Investment Option, the Participant shall designate, in whole multiples of 1% or
such other percentage determined by the Committee, the percentage of his or her
Annual Bonus Deferrals to be credited to each Available Investment Option;
provided, that with respect to any portion of the Annual Bonus Deferral that the
Participant allocates to the Incentive Stock Unit Account, the amount allocated
to such account will be 105% of the amount designated by the Participant for
deferral into the Incentive Stock Unit Account. If the Participant fails to make
a timely and complete investment designation, he or she shall be deemed to have
elected that 100% of his or her Annual Bonus Deferral be credited to Reserve
Account B or such other Investment Option specified by the Committee for this
purpose. A Participant's investment election or deemed investment election
shall become effective with respect to annual bonus amounts awarded on or after
the date on which the election is received and accepted by the Committee, and
shall remain in effect unless and until modified by a subsequent election that
becomes effective in accordance with the rules of this subsection.

    (d) Deemed Investment of LTIP Deferrals. LTIP Deferrals under
Section 3.04 and matching contribution credits under Section 3.05 are credited
to the Incentive Stock Unit Account. The Participant is not permitted to make an
investment election with respect to LTIP Deferrals and matching contribution
credits.

    (e) Allocation of Deemed Investment Gain or Loss. On each day
that the New York Stock Exchange is open for business, or at such other times as
the Committee may prescribe (the 

 

27

<PAGE>

 

 "Valuation Date"), the Account of
each Participant will be credited (or charged) based upon the investment gain
(or loss) that the Participant would have realized with respect to his or her
Account since the immediately preceding Valuation Date had the Account been
invested in accordance with the terms of the Plan and where applicable, the
Participant's election. Subject to the special rules set forth in Article V
with respect to Reserve Account A, Reserve Account B, the Incentive Stock Unit
Account, the Deferred Stock Unit Account, the Base Stock Unit Account and the
Prior Plan WPS Stock Unit Account, the credit (or charge) shall be the sum,
separately calculated for each of the Investment Options, of the product
obtained by multiplying (i) the portion (if any) of the Participant's Account
as of the immediately prior Valuation Date that is deemed to have been invested
in each Investment Option, and (ii) the rate of return experienced by that
Investment Option since the immediately preceding Valuation Date. The Committee,
in its discretion, may prescribe alternate rules for the valuation of
Participant Accounts, including, without limitation, the application of unit
accounting principles.

    (f) Reallocation of Account. Subject to Section 5.06(d), and in
accordance with rules prescribed by the Committee (which may include limitations
on the timing or frequency of reallocation transactions initiated by some or all
Participants), each Participant may elect to reallocate his or her Account
(other than the portion deemed to be invested in Reserve Account A, the Pre-July
1, 2001 Reserve Account B, the Prior Plan WPS Stock Unit Account, the Incentive
Stock Unit Account and the Deferred Stock Unit Account) among the Available
Investment Options. When selecting more than one Investment Option, the
Participant shall designate, in whole multiples of 1% or such other percentage
determined by the Committee, the percentage of his or her available Account that
is deemed to be invested in each Available Investment Option after the
investment reallocation is given effect. Once effective, a Participant's
reallocation shall remain in effect unless and until modified by a subsequent
election that becomes effective in accordance with the rules prescribed by the
Committee. Other than a reallocation of a Participant's Account pursuant to a
revised investment election submitted by the Participant, the deemed investment
allocation of a Participant will not be adjusted to reflect differences in the
relative investment return realized by the various hypothetical Investment
Options that the Participant has designated.

 

28

<PAGE>

 

   
Section  
6.02. Accounts
are For Record Keeping Purposes Only.

    Plan Accounts and the record keeping procedures described herein serve solely
as a device for determining the amount of benefits accumulated by a Participant
under the Plan, and shall not constitute or imply an obligation on the part of a
Participating Employer to fund such benefits. In any event, a Participating
Employer may, in its discretion, set aside assets and/or contribute to the Trust
assets equal to part or all of such account balances and invest such assets in
Company stock, life insurance or any other investment deemed appropriate. Any
such assets held by the Company or the Trust shall be and remain the sole
property of the Company or the Trust, as applicable, and except to the extent
that the Trust authorizes a Participant to direct the trustee with respect to
the voting of WPS Resources Stock held in the Trust, a Participant shall have no
proprietary rights of any nature whatsoever with respect to such assets.

 

29

<PAGE>

 

 

ARTICLE VII. DISTRIBUTION OF PRE-2005 ACCOUNT

    Section  7.01. Distribution
Election.

    (a) Election. A Participant, at the time he or she commenced
participation in the Plan, made a distribution election with respect to his or
her Pre-2005 Account. The election specified the distribution commencement date,
the distribution period, and the distribution method applicable following the
Participant's death. Any such election was required to be consistent with the
following rules (or if the Participant failed to make a selection with respect
to a particular item, in accordance with the default rules set forth below):

            
            (i) Distribution Commencement Date. Unless the
            Participant has selected a later commencement date, which in no
            event shall be later than the first distribution period following
            the Participant's attainment of age 72, distribution of a
            Participant's Pre-2005 Account will commence either (A) within 60
            days following the end of the calendar year in which the Participant
            terminates employment or service from the Company and all
            Affiliates, or (B) if determined by the Committee to be consistent
            with the "grand-father" rules of Code Section 409A and if
            directed by the Committee for purposes of creating administratively
            consistency between the distribution provisions of Articles VII and
            VIII, within 60 days following the end of the calendar year in which
            occurs the 6 month anniversary of the date on which the Participant
            terminates employment or service from the Company and all
            Affiliates. For purposes of this Plan, a Participant who is Disabled
            shall be deemed to have retired or terminated at the conclusion of
            benefits under all disability income plans sponsored by a
            Participating Employer or to which a Participating 

 

30

<PAGE>

             

             Employer
            contributes, unless otherwise determined by the Committee.

            
            (ii) Distribution Period. Distributions will be
            made in 1 to 15 annual installments, as elected by the Participant.

            
            (iii) Distribution of Remaining Account Following
            Participant's Death. In the event of the Participant's
            death, the Participant's remaining undistributed interest will be
            distributed to the Participant's Beneficiary in accordance with
            the distribution election (single sum payment or installments)
            elected by the Participant. If the Participant had elected a single
            sum, the payment shall be made no later than March 1 following the
            calendar year in which occurs the Participant's death. If the
            Participant had elected an installment distribution, (A) any
            installments previously commenced to the Participant shall continue
            to the Beneficiary and (B) if installment distributions had not
            commenced as of the date of the Participant's death, payments over
            the installment period elected by the Participant shall commence to
            the Beneficiary no later than March 1 following the calendar year in
            which occurs the Participant's death.

    (b) Effectiveness of Election. A distribution election shall be
deemed made only when it is received and accepted as complete by the Committee,
and shall remain in effect until modified by the Participant in accordance with
Section 7.02 below or otherwise revoked in accordance with Plan rules.

   
Section  
7.02. Modified
Distribution Election.

    A Participant may from time to time modify his or her distribution election
by filing a revised distribution election, properly completed and signed, with
the Committee. However, a 

 

31

<PAGE>

 

 revised distribution election will be given effect
only if the Participant remains employed by a Participating Employer for twelve
(12) consecutive months following the date that the revised election is received
and accepted as complete by the Committee.

   
Section  
7.03. Calculation
of Annual Distribution Amount.

    (a) Pre-2001 Retirees. For any Participant who retired or
terminated employment or service prior to January 1, 2001, distribution of the
Participant's Account will be calculated and made under the distribution
provisions of the Plan applicable to the Participant on the date of the
Participant's retirement or termination of employment or service.

    (b) Post-2000 Retirees. For a Participant who retires or
terminates employment or service after December 31, 2000, the annual
distribution amount for the Pre-2005 Account, unless the Committee specifies a
different or alternate method and such different or alternate method does not
result in the imposition of tax under Code Section 409A, shall be calculated as
follows:

            
            (i) The annual distribution amount for the Participant's
            Pre-2005 Account, other than the portion of the Pre-2005 Account
            that is deemed to be invested in the Stock Unit Accounts (the
            "Distributable Account"), shall be determined by dividing
            (A) the aggregate balance in the Distributable Account as of January
            1 of the year for which the distribution is being made, by (B) the
            number of installment payments remaining to be made under the
            distribution period selected by the Participant. Distributions shall
            be made in cash. The amount of any distribution under this Paragraph
            (i) will be charged pro-rata against the Participant's interest in
            each Investment Option comprising the Distributable Account.
            Notwithstanding the foregoing, the last installment payment of the
            Distributable Account shall be adjusted to take into account deemed
            investment gains or losses for the 

 

32

<PAGE>

 

             

             period between the January 1
            valuation date and the date of actual payment according to such
            methods and procedures adopted by the Committee.

            
            (ii) The annual distribution amount for the portion of the
            Participant's Pre-2005 Account that is credited to each of the
            Stock Unit Accounts shall be determined on a share basis by dividing
            (A) the number of WPS Resources Stock Units credited to the relevant
            Stock Unit Account as of January 1 of the year for which the
            distribution is being made (subject to subsequent adjustment under
            Section 9.02), by (B) the number of installment payments
            remaining to be made under the distribution period selected by the
            Participant. The Participant will receive shares of WPS Resources
            Stock equal to the annual distribution amount, subject only to the
            distribution of cash in lieu of any fractional WPS Resources Stock
            Unit. The cash payment for any fractional WPS Resources Stock Unit
            shall be determined based upon the closing price of a share of WPS
            Resources Stock on January 21 of the year in which the distribution
            is being made, as such share price is reported in the Wall Street
            Journal's New York Stock Exchange Composite Transactions listing.
            If January 21 falls on a Saturday, Sunday or holiday, the
            calculation of the cash portion of the distribution will be made
            based upon the closing price as reported for the immediately
            preceding business day.

    
Section  
7.04. Time
of Distribution.

    Subject to the provisions of Sections 9.02 and 10.02, each distribution
of WPS Resources Stock made to a Participant (or Beneficiary) shall be
distributed on January 22 (or if January 22 

 

33

<PAGE>

 

 falls on a Saturday, Sunday or
holiday, the immediately following business day). For distribution and tax
reporting purposes, the value of WPS Resources Stock distributed shall equal the
number of shares distributed multiplied by the closing price of WPS Resources
Stock on January 21 (or if January 21 falls on a Saturday, Sunday or holiday,
the immediately preceding business day) of the year in which the distribution is
being made as reported in the Wall Street Journal's New York Stock Exchange
Composite Transaction listing. The cash portion of any distribution will be made
no later than March 1 of the year for which the distribution is being made.

    
Section
 
7.05. Single
Sum Distribution at the Committee's Option.

    (a) In the case of a Participant whose employment with the Company and
its Affiliates is involuntarily terminated by the Company or an Affiliate, or
whose employment with the Company and its Affiliates is mutually terminated in
accordance with a separation agreement and release between the Company or an
Affiliate and such Participant, the Committee may (but need not) direct that the
Participant's Pre-2005 Account be distributed in the form of a single sum
payment in lieu of distribution over any installment distribution period that
would otherwise apply. If so directed by the Committee, the single sum
distribution shall be made in cash and/or shares of WPS Resources Stock (as
determined in accordance with Section 7.03) and shall be made at the time
specified in Section 7.04.

    (b) In the case of any other Participant or Beneficiary whose Pre-2005
Account and Post-2005 Account, in the aggregate, has a value of $100,000 or less
as of the valuation date that immediately precedes the date on which
distribution would first be made to the Participant or Beneficiary, the
Committee may (but need not) direct that the Participant's Pre-2005 Account be
distributed in the form of a single sum payment in lieu of any installment
distribution period that would otherwise apply. If so directed by the Committee,
the single sum distribution shall be made in cash and/or shares of WPS Resources
Stock (as determined in accordance with Section 7.03) and shall be made at the
time specified in Section 7.04.

 

34

<PAGE>

 

 ARTICLE VIII. DISTRIBUTION OF POST-2004 ACCOUNT

    Section  8.01. Distribution
Election.

    (a) Election. A Participant, on or before December 31, 2005 or
if later, at the time he or she commences participation in the Plan, shall make
a distribution election with respect to his or her Post-2004 Account. The
election shall be in such form as the Committee shall prescribe, and shall
specify the distribution commencement date, the distribution period, and the
distribution method applicable following the Participant's death. Any such
election shall be consistent with the following rules (or if the Participant
fails to make a selection with respect to a particular item, in accordance with
the default rules set forth below):

            
            (i) Distribution Commencement Date. Unless the
            Participant has selected a later commencement date, distribution of
            a Participant's Post-2004 Account will commence within 60 days
            following the end of the calendar year in which occurs the 6 month
            anniversary of the date on which the Participant terminates
            employment or service from the Company and all Affiliates. For
            purposes of this Plan, a Participant who is Disabled shall be deemed
            to have retired or terminated at the conclusion of benefits under
            all disability income plans sponsored by the Company or an Affiliate
            or to which the Company or an Affiliate contributes.

            
            (ii) Distribution Period. Distributions will be
            made in 1 to 15 annual installments, as elected by the Participant.

            
            (iii) Distribution of Remaining Account Following
            Participant's Death. In the event of the Participant's
            death, the Participant's remaining undistributed interest in his
            or her Post-2004 Account will be distributed to the Participant's
            Beneficiary in accordance with the distribution election 

 

35

<PAGE>

 

             

             (single sum
            payment or installments) elected by the Participant. If the
            Participant had elected a single sum, the payment shall be made no
            later than March 1 following the calendar year in which occurs the
            Participant's death. If the Participant had elected an installment
            distribution, (A) any installments previously commenced to the
            Participant shall continue to the Beneficiary and (B) if installment
            distributions had not commenced as of the date of the Participant's
            death, payments over the installment period elected by the
            Participant shall commence to the Beneficiary no later than March 1
            following the calendar year in which occurs the Participant's
            death.

    (b) Effectiveness of Election. A distribution election shall be
deemed made only when it is received and accepted as complete by the Committee,
and shall remain in effect until modified by the Participant in accordance with
Section 8.02 below or otherwise revoked in accordance such circumstances as the
Plan is permitted to accept without resulting in the imposition of tax under
Code Section 409A.

   
Section  
8.02. Modified
Distribution Election.

    A Participant may from time to time modify his or her distribution election
with respect to his or her Post-2004 Account by filing a revised distribution
election, properly completed and signed, with the Committee. However, except to
the extent permitted under regulations promulgated by the Secretary of the
Treasury under Code Section 409A, a revised distribution election must comply
with the following rules:

    (a) The revised distribution election may not accelerate either the
time or form of payment. For example, the revised distribution election may not
change from an installment payment to a single sum payment, or from a longer
installment period to a shorter installment period. Similarly, the revised
distribution election may not elect a distribution commencement date earlier
than the distribution commencement date applicable under the Participant's
prior 

 

36

<PAGE>

 

 distribution election. A revised election that does not comply with these
rules will be null and void, and will be disregarded by the Plan.

    (b) The revised distribution election may (i) change the form of
payment from a single sum payment to installment distributions, (ii) change the
form of payment from a shorter installment period to a longer installment
period, or (iii) defer the distribution commencement date, and such a revised
election will be given effect 12 months after the date on which the election is
made, but only if (i) in the case of an election related to payment at a
specified time, the revised election is made at least 12 months prior to the
date on which payment would be made or commence in the absence of the revised
election, and (ii) in the case of any election other than one related to payment
on account of Disability or death, the first payment that is made pursuant to
the revised election is deferred for at least 5 years from the date payment
would otherwise have been made. A revised election that does not comply with
these rules will be null and void, and will be disregarded by the Plan.

   
Section  
8.03. Calculation
of Annual Distribution Amount.

    The annual distribution amount for the Post-2004 Account shall be calculated
as follows:

    (a) The annual distribution amount for the Participant's Post-2004
Account, other than the portion of the Post-2004 Account that is deemed to be
invested in the Stock Unit Accounts (the "Distributable Account"),
shall be determined by dividing (A) the aggregate balance in the Distributable
Account as of January 1 of the year for which the distribution is being made, by
(B) the number of installment payments remaining to be made under the
distribution period selected by the Participant. Distributions shall be made in
cash. The amount of any distribution under this subsection (a) will be charged
pro-rata against the Participant's interest in each Investment Option
comprising the Distributable Account. Notwithstanding the foregoing, the last
installment payment of the Distributable Account shall be adjusted to take into
account deemed investment gains or losses for the period between the
January 1 valuation date and the date of actual payment according to such
methods and procedures adopted by the Committee.

 

37

<PAGE>

 

    (b) The annual distribution amount for the portion of the Participant's
Post-2004 Account that is credited to each of the Post-2004 Stock Unit Accounts
shall be determined on a share basis by dividing (A) the number of WPS Resources
Stock Units credited to the relevant Stock Unit Account as of January 1 of the
year for which the distribution is being made (subject to subsequent adjustment
under Section 9.02), by (B) the number of installment payments remaining to
be made under the distribution period selected by the Participant. The
Participant will receive shares of WPS Resources Stock equal to the annual
distribution amount, subject only to the distribution of cash in lieu of any
fractional WPS Resources Stock Unit. The cash payment for any fractional WPS
Resources Stock Unit shall be determined based upon the closing price of a share
of WPS Resources Stock on January 21 of the year in which the distribution is
being made, as such share price is reported in the Wall Street Journal's New
York Stock Exchange Composite Transactions listing. If January 21 falls on a
Saturday, Sunday or holiday, the calculation of the cash portion of the
distribution will be made based upon the closing price as reported for the
immediately preceding business day.

    
Section  
8.04. Time
of Distribution.

    Subject to the provisions of Sections 9.02 and 10.02, each distribution
of WPS Resources Stock made to a Participant (or Beneficiary) shall be
distributed on January 22 (or if January 22 falls on a Saturday, Sunday or
holiday, the immediately following business day). For distribution and tax
reporting purposes, the value of WPS Resources Stock distributed shall equal the
number of shares distributed multiplied by the closing price of WPS Resources
Stock on January 21 (or if January 21 falls on a Saturday, Sunday or holiday,
the immediately preceding business day) of the year in which the distribution is
being made as reported in the Wall Street Journal's New York Stock Exchange
Composite Transaction listing. The cash portion of any distribution will be made
no later than March 1 of the year for which the distribution is being made.

   
Section  
8.05. Automatic
Single Sum Distribution. In the case of any Participant or Beneficiary whose
Pre-2005 Account and Post-2004 Account, in the aggregate, has a value of
$100,000 or less as of the valuation date that immediately precedes the date on
which distribution would first be made to the Participant or Beneficiary, the
Participant's Post-2004 

 

38

<PAGE>

 

 Account will be distributed in the form of a single
sum payment on the date on which distributions would otherwise commence, and
such single sum payment shall be in lieu of any installment distribution period
that would otherwise apply; provided that the Post-2004 Account will be so
distributed only if the Participant's Pre-2005 Account is distributed in
accordance with Section 7.05. Unless otherwise directed by the Committee, the
single sum distribution shall be made in cash and/or shares of WPS Resources
Stock (as determined in accordance with Section 8.03).

 

 

39

<PAGE>

 

ARTICLE IX. RULES WITH RESPECT TO WPS RESOURCES STOCK

AND WPS RESOURCES STOCK UNITS

    Section  9.01. Shares
Authorized.

    (a) Subject to adjustment as provided in Section 9.02 below, the total
number of shares of WPS Resources Stock which may be distributed to Participants
or Beneficiaries pursuant to the Plan shall be seven hundred fifty thousand
(750,000), which includes two hundred fifty thousand (250,000) shares that were
previously approved by shareholders in connection with employee and director
deferred compensation plans, and five hundred thousand (500,000) shares for
which shareholder approval will be sought at the Company's 2005 annual
meeting.

            
            (i) The two hundred fifty thousand (250,000) shares, as
            adjusted as provided in Section 9.02 below ,that were previously
            approved by shareholders and to the extent not heretofore utilized,
            may be used to satisfy any obligation under the Plan.

            
            (ii) Of the five hundred thousand (500,000) shares for
            which shareholder approval will be sought at the Company's 2005
            annual meeting, no more than two hundred thousand (200,000) shares,
            subject to adjustment as provided in Section 9.02 below, will be
            issued to satisfy obligations with respect to (i) the five percent
            (5%) premium on Annual Bonus Deferrals that are allocated to the
            Incentive Stock Unit Account in accordance with Section 6.01(c), or
            (ii) employer contribution credits under Sections 3.05 and 3.06 of
            this Plan (or under the provisions of any predecessor plan) that are
            granted to a Participant without the requirement that the
            Participant execute a Deferral

 

40

<PAGE>

 

             

             election to forego an equal amount of
            cash compensation as a condition of receiving such credits.

    (b) The number of available shares shall not be reduced by or as a
result of (i) any cash distributions pursuant to the Plan or (ii) by
distributions of shares of WPS Resources Stock that are attributable to LTIP
Deferrals that relate to an award that was made under the Omnibus Plan and
either has been or will be charged against the pool of available shares under
the Omnibus Plan, i.e., the plan under which the share award was originally
granted and the plan from which the share award would have been paid except for
the Participant's election to defer delivery of the shares.

   
Section  
9.02. Transactions
Affecting WPS Resources Stock.

    In the event of any merger, share exchange, reorganization, consolidation,
recapitalization, stock dividend, stock split or other change in corporate
structure of the Company or a Participating Employer affecting WPS Resources
Stock, the Committee may make appropriate equitable adjustments with respect to
the WPS Resources Stock Units (if any) credited to the Stock Unit Accounts of
each Participant, including without limitation, adjusting the date as of which
such units are valued and/or distributed, as the Committee determines is
necessary or desirable to prevent the dilution or enlargement of the benefits
intended to be provided under the Plan.

   
Section  
9.03. No
Shareholder Rights With Respect to WPS Resources Stock Units.

    Participants shall have no rights as a stockholder pertaining to WPS
Resources Stock Units credited to their Accounts. No WPS Resources Stock Unit
nor any right or interest of a Participant under the Plan in any WPS Resources
Stock Unit may be assigned, encumbered, or transferred, except by will or the
laws of descent and distribution. The rights of a Participant hereunder with
respect to any WPS Resources Stock Unit are exercisable during the Participant's
lifetime only by the Participant or his or her guardian or legal representative.

 

41

<PAGE>

 

 

ARTICLE X. SPECIAL RULES APPLICABLE IN THE EVENT OF A
CHANGE IN CONTROL OF THE COMPANY

    Section  10.01.
Definitions.

    For purposes of this Article X, the following terms shall have the following
respective meanings:

    (a) An "Affiliate" of, or a person "affiliated"
with, a specified person is a person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the person specified and the term "Associate" used to indicate a
relationship with any person, means (i) any corporation or organization (other
than the registrant or a majority-owned subsidiary of the registrant) of which
such person is an officer or partner or is, directly or indirectly, the
beneficial owner of 10 percent or more of any class of equity securities, (ii)
any trust or other estate in which such person has a substantial beneficial
interest or as to which such person serves as trustee or in a similar fiduciary
capacity, and (iii) any relative or spouse of such person, or any relative of
such spouse, who has the same home as such person or who is a director or
officer of the registrant or any of its parents or subsidiaries.

    (b) A person shall be deemed to be the "Beneficial Owner" of
any securities:

            
            (i) which such Person or any of such Person's Affiliates
            or Associates has the right to acquire (whether such right is
            exercisable immediately or only after the passage of time) pursuant
            to any agreement, arrangement, or under-standing, or upon the
            exercise of conversion rights, exchange rights, or other rights,
            warrants or options, or otherwise; provided, however,
            that a Person shall not be deemed the Beneficial Owner of, or to
            beneficially own, (A) securities tendered pursuant to a tender or
            exchange offer made by or on behalf of such Person or any of such
            Person's Affiliates or Associates until such tendered securities
            are accepted for purchase or (B) securities issuable upon exercise
            of Rights 

 

42

<PAGE>

 

             

             pursuant to the terms of the Company's Rights Agreement
            with American Stock Transfer & Trust Company, originally dated
            as of December 12, 1996 between the Company and Firstar Trust
            Company, as the same may be amended from time to time (or any
            successor to such Rights Agreement) at any time before the issuance
            of such securities;

            
            (ii) which such Person or any of such Person's
            Affiliates or Associates, directly or indirectly, has the right to
            vote or dispose of or has "beneficial ownership" of (as
            determined pursuant to Rule 13d-3 of the General Rules and
            Regulations under the Act), including pursuant to any agreement,
            arrangement or understanding; provided, however, that
            a Person shall not be deemed the Beneficial Owner of, or to
            beneficially own, any security under this subparagraph (ii) as a
            result of an agreement, arrangement or understanding to vote such
            security if the agreement, arrangement or understanding: (A) arises
            solely from a revocable proxy or consent given to such Person in
            response to a public proxy or consent solicitation made pursuant to,
            and in accordance with, the applicable rules and regulations under
            the Act and (B) is not also then reportable on a Schedule 13D under
            the Act (or any comparable or successor report); or

            
            (iii) which are beneficially owned, directly or
            indirectly, by any other Person with which such Person or any of
            such Person's Affiliates or Associates has any agreement,
            arrangement or understanding for the purpose of acquiring, holding,
            voting (except pursuant to a revocable proxy as 

 

43

<PAGE>

 

             

             described in
            Paragraph (ii) above) or disposing of any voting securities of the
            Company.

    (c) A "Change in Control" shall be deemed to have occurred
if:

            
            (i) any Person (other than any employee benefit plan of
            WPS Resources Corporation or of any subsidiary of WPS Resources
            Corporation, any Person organized, appointed or established pursuant
            to the terms of any such benefit plan or any trustee, administrator
            or fiduciary of such a plan) is or becomes the Beneficial Owner of
            securities of WPS Resources Corporation representing at least 30% of
            the combined voting power of the WPS Resources Corporation's then
            outstanding securities;

            
            (ii) one-half or more of the members of the Board are not
            Continuing Directors;

            
            (iii) there shall be consummated any merger,
            consolidation, or reorganization of WPS Resources Corporation with
            any other corporation as a result of which less than 50% of the
            outstanding voting securities of the surviving or resulting entity
            are owned by the former shareholders of WPS Resources Corporation
            other than a shareholder who is an Affiliate or Associate of any
            party to such consolidation or merger;

            
            (iv) there shall be consummated any merger of WPS
            Resources Corporation or share exchange involving WPS Resources
            Corporation in which WPS Resources Corporation is not the continuing
            or surviving corporation other than a merger of WPS Resources
            Corporation in which each of the holders of WPS Resources
            Corporation's Common Stock 

 

44

<PAGE>

 

             

             immediately prior to the merger have
            the same proportionate ownership of common stock of the surviving
            corporation immediately after the merger;

            
            (v) there shall be consummated any sale, lease, exchange
            or other transfer (in one transaction or a series of related
            transactions) of all, or substantially all, of the assets of WPS
            Resources Corporation to a Person which is not a wholly owned
            subsidiary of WPS Resources Corporation; or

            
            (vi) the shareholders of WPS Resources Corporation approve
            any plan or proposal for the liquidation or dissolution of WPS
            Resources Corporation.

    (d) "Continuing Directors" means (i) any member of the
Board of Directors of WPS Resources Corporation who was a member of such Board
on May 1, 1997, (ii) any successor of a Continuing Director who is
recommended to succeed a Continuing Director by a majority of the Continuing
Directors then on such Board, and (iii) additional directors elected by a
majority of the Continuing Directors then on such Board.

    (e) "Person" means any individual, firm, partnership,
corporation or other entity, including any successor (by merger or otherwise) of
such entity, or a group of any of the foregoing acting in concert.

   
Section  
10.02.
Amendments in Connection with a Change in Control.

    (a) Board Authority to Amend Plan. Prior to the occurrence of a
Change in Control, the Board may exercise its authority under Section 11.06 to
amend the Plan, including, to the extent deemed necessary or desirable by the
Board in anticipation of a Change in Control, to amend the Plan
to eliminate WPS Resources Stock Units and cause the value of such units as
of the Amendment Date (such value to be determined under Section 5.06(c))
to be reallocated to Reserve Account B. The term "Amendment Date"
means the date on which an amendment to

 

45

<PAGE>

 

the Plan is validly adopted or the date
on which the amendment is or purports to be effective, whichever is later.

    (b) Automatic Amendments. The Plan shall automatically be
amended upon a Change in Control to provide that:

            
            (i) the rate of interest equivalent to be credited with
            respect to Reserve Account A for each month following the Change in
            Control shall be the greater of (A) the rate of interest equivalent
            otherwise applicable with respect to Reserve Account A if such
            amount were calculated based upon the consolidated return on common
            shareholders equity of the Company (including for this purpose any
            successor corporation that is the survivor of a merger with the
            Company or any successor to that corporation) and all subsidiaries,
            or (B) a rate equal to two (2) percentage points above the prime
            lending rate at US Bank Milwaukee, Milwaukee, Wisconsin (or any
            successor thereto) as of the last business day of that month; and

            
            (ii) the rate of interest equivalent to be credited with
            respect to Reserve Account B for each month following the Change in
            Control shall be the greater of (A) the rate of interest equivalent
            otherwise applicable with respect to Reserve Account B if such
            amount were calculated based upon the consolidated return on common
            shareholders equity of the Company (including for this purpose any
            successor corporation that is the survivor of a merger with the
            Company or any successor to that corporation) and all subsidiaries,
            or (B) a rate equal to two (2) percentage points above the prime
            lending rate at US Bank Milwaukee, Milwaukee, Wisconsin (or any
            successor thereto) as of the 

 

46

<PAGE>

 

             last business day of that month. The
            minimum rate of interest equivalent under clause (B) shall cease to
            apply on the third anniversary of the Change in Control in the event
            that the Participant is actively employed by the Company (including
            for this purpose any successor corporation or entity that is the
            survivor of a merger with the Company), or by any subsidiary or
            affiliate of the Company or such successor, on such date.

    (c) Prohibition on Certain Amendments. Notwithstanding the
foregoing, on or after a Change in Control, the Board or Company (including for
this purpose any successor corporation or entity that is the survivor of a
merger with the Company or to which sponsorship of the Plan is transferred
following a Change in Control, or the board of directors or other managing body
of any such entity)may not, without the written consent of the affected
Participant (or in the case of a deceased Participant, the Participant's
Beneficiary) amend the Plan or take an action to terminate the Plan that would:

            
            (i) Result in a decrease in the number of, or a change in
            the type of, Available Investment Options that were made available
            under the Plan immediately prior to the Change of Control; or

            
            (ii) Cause the Accounts to be valued under Section 6.01(e)
            less frequently than quarterly; or

            
            (iii) Impair or otherwise limit a Participant's rights
            to reallocate his or her Accounts under Section 6.01(f) as in effect
            on the date immediately prior to the Change in Control; or

            
            (iv) Decrease the interest rate credited under Reserve
            Account A or Reserve Account B as determined pursuant to subsection
            (b) above, except as specifically provided therein;

 

47

<PAGE>

 

             

            
            (v) Eliminate or reduce the distribution options made
            available under Articles VII and VIII or otherwise terminate any
            distribution elections then in effect; or

            
            (vi) Modify the provisions of Sections 10.03 and 10.04 in
            a manner detrimental or potentially detrimental to a Participant (or
            Beneficiary), except and only to the extent that modification is
            necessary to comply with applicable law.

   
Section  
10.03.
Maximum Payment Limitation.

    (a) Limit on Payments. Except as provided in subsection (b)
below, if any portion of the payments or benefits described in this Plan or
under any other agreement with or plan of the Company (in the aggregate,
"Total Payments"), would constitute an "excess parachute
payment", then the Total Payments to be made to the Participant shall be
reduced such that the value of the aggregate Total Payments that the Participant
is entitled to receive shall be one dollar ($1) less than the maximum amount
which the Participant may receive without becoming subject to the tax imposed by
Section 4999 of the Code or which the Company may pay without loss of deduction
under Section 280G(a) of the Code; provided that this Section shall not apply in
the case of a Participant who has in effect a valid employment contract
providing that the Total Payments to the Participant shall be determined without
regard to the maximum amount allowable under Section 280G of the Code. The terms
"excess parachute payment" and "parachute payment" shall
have the meanings assigned to them in Section 280G of the Code, and such
"parachute payments" shall be valued as provided therein. Present
value shall be calculated in accordance with Section 280G(d)(4) of the Code.
Within forty (40) days following delivery of notice by the Company to the
Participant of its belief that there is a payment or benefit due the Participant
which will result in an excess parachute payment as defined in Section 280G of
the Code, the Participant and the Company, at the Company's expense, shall
obtain the opinion (which need not be unqualified) of nationally recognized tax
counsel selected by the Company's independent auditors and acceptable to the
Participant in his or her sole discretion (which may be regular outside counsel
to the Company), which opinion sets forth (A) the amount of the Base Period 

 

48

<PAGE>

 

Income, (B) the amount and present value of Total Payments and (C) the amount
and present value of any excess parachute payments determined without regard to
the limitations of this Section. As used in this Section, the term "Base
Period Income" means an amount equal to the Participant's
"annualized includible compensation for the base period" as defined in
Section 280G(d)(1) of the Code. For purposes of such opinion, the value of any
noncash benefits or any deferred payment or benefit shall be determined by the
Company's independent auditors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code, which determination shall be evidenced in a
certificate of such auditors addressed to the Company and the Participant. Such
opinion shall be addressed to the Company and the Participant and shall be
binding upon the Company and the Participant. If such opinion determines that
there would be an excess parachute payment, the payments hereunder that are
includible in Total Payments or any other payment or benefit determined by such
counsel to be includible in Total Payments shall be reduced or eliminated as
specified by the Participant in writing delivered to the Company within thirty
days of his or her receipt of such opinion or, if the Participant fails to so
notify the Company, then as the Company shall reasonably determine, so that
under the bases of calculations set forth in such opinion there will be no
excess parachute payment. If such legal counsel so requests in connection with
the opinion required by this Section, the Participant and the Company shall
obtain, at the Company's expense, and the legal counsel may rely on in
providing the opinion, the advice of a firm of recognized executive compensation
consultants as to the reasonableness of any item of compensation to be received
by the Participant. If the provisions of Sections 280G and 4999 of the Code (or
any successor provisions) are repealed without succession, then this Section
shall be of no further force or effect.

    (b) Employment Contract Governs. The provisions of subsection
(a) above shall not apply to a Participant whose employment is governed by an
employment contract that provides for Total Payments in excess of the limitation
described in subsection (a) above.

   
Section  
10.04.
Resolution of Disputes.

    If, after a Change in Control, (a) a dispute arises with respect to the
enforcement of the Participant's rights under the Plan, or (b) any legal
proceeding shall be brought to enforce or interpret any provision contained in
the Plan or to recover damages for breach of the Plan, in 

 

49

<PAGE>

 

 either case so long as
the Participant is not acting in bad faith or otherwise pursuing a course of
action that a reasonable person would determine to be frivolous, the Participant
shall recover from the Company any reasonable attorneys' fees and necessary
costs and disbursements incurred as a result of such dispute or legal proceeding
("Expenses"), and prejudgment interest on any money judgment obtained
by the Participant calculated at the rate of interest announced by US Bank
Milwaukee, Milwaukee, Wisconsin (or any successor thereto), from time to time as
its prime or base lending rate from the date that payments to the Participant
should have been made under this Plan. Within ten (10) days after the
Participant's written request therefor, the Company shall pay to the
Participant, or such other person or entity as the Participant may designate in
writing to the Company, the Participant's Expenses in advance of the final
disposition or conclusion of any such dispute or legal proceeding. In the case
of a deceased Participant, this Section shall apply with respect to the
Participant's Beneficiary or estate.

 

50

<PAGE>

 

 

ARTICLE XI. GENERAL PROVISIONS

    Section  11.01.
Administration.

    The Committee shall administer and interpret the Plan and supervise
preparation of Participant elections, forms, and any amendments thereto. To the
extent necessary to comply with applicable conditions of Rule 16b-3, the
Committee shall consist of not less than two members of the Board, each of whom
is also a director of the Company and qualifies as a "non-employee
director" for purposes of Rule 16b-3. If at any time the Committee shall
not be in existence or not be composed of members of the Board who qualify as
"non-employee directors", then all determinations affecting
Participants who are subject to Section 16 of the Exchange Act shall be made by
the full Board, and all determinations affecting other Participants shall be
made by the Board or a duly designated officer of the Board. The Committee may,
in its discretion, delegate any or all of its authority and responsibility;
provided that the Committee shall not delegate authority and responsibility with
respect to non-ministerial functions that relate to the participation by
Participants who are subject to Section 16 of the Exchange Act at the time any
such delegated authority or responsibility is exercised. To the extent of any
such delegation, any references herein to the Committee shall be deemed
references to such delegee. Interpretation of the Plan shall be within the sole
discretion of the Committee and shall be final and binding upon each Participant
and Beneficiary. The Committee may adopt and modify rules and regulations
relating to the Plan as it deems necessary or advisable for the administration
of the Plan. If any delegee of the Committee shall also be a Participant or
Beneficiary, any determinations affecting the delegee's participation in the
Plan shall be made by the Committee.

   
Section  
11.02.
Restrictions to Comply with Applicable Law.

    (a) General Restrictions. Notwithstanding any other provision
of the Plan, the Company shall have no liability to deliver any shares of WPS
Resources Stock under the Plan or make any payment unless such delivery or
payment would comply with all applicable laws and the applicable requirements of
any securities exchange or similar entity. In addition, transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3 under
the Exchange Act. The Committee shall administer the Plan so that transactions
under the Plan will be exempt from Section 16 of the Exchange Act, and shall
have the right to restrict any 

 

51

<PAGE>

 

 transaction, or impose other rules and
requirements, to the extent it deems necessary or desirable for such exemption
to be met.

    (b) Restriction on Transfer. Shares of WPS Resources Stock
issued under the Plan may not be sold or otherwise disposed of except (i)
pursuant to an effective registration statement under the Act, or in a
transaction which, in the opinion of counsel for the Company, is exempt from
registration under the Act; and (ii) in compliance with state securities laws.
Further, as a condition to issuance of shares of WPS Resources Stock under the
Plan, the Participant, his or her Beneficiary or his or her heirs, legatees or
legal representatives, as the case may be, shall, if the Committee deems it
necessary, execute and deliver to the Company a restrictive stock transfer
agreement in such form, and subject to such terms and conditions, as shall be
reasonably determined or approved by the Committee, which agreement, among other
things, may impose certain restrictions on the sale or other disposition of any
shares of stock acquired under the Plan. The Committee may waive the foregoing
restrictions, in whole or in part, in any particular case or cases or may
terminate such restrictions whenever the Committee determines that such
restrictions afford no substantial benefit to the Company.

    (c) Additional Restrictions; Legends. All shares of WPS
Resources Stock delivered under the Plan shall be subject to such stock transfer
orders and other restrictions as the Committee may deem advisable under the Plan
and any applicable federal or state securities laws, and the Committee may cause
a legend or legends to be put on any certificates to make appropriate references
to such restrictions.

   
Section  
11.03.
Claims Procedures.

    (a) If a Participant, or Beneficiary (the "claimant")
believes that he is entitled to a benefit under the Plan that is not provided,
the claimant or his or her legal representative shall file a written claim for
such benefit with the Committee. The Committee shall review the claim within 90
days following the date of receipt of the claim; provided that the Committee may
determine that an additional 90-day extension is necessary due to circumstances
beyond the Committee's control, in which event the Committee shall notify the
claimant prior to the end of the initial period that an extension is needed, the
reason therefor and the date by which the Committee expects to render a
decision. If the claimant's claim is denied in whole or part, the 

 

52

<PAGE>

 

 Committee
shall provide written notice to the claimant of such denial. The written notice
shall include the specific reason(s) for the denial; reference to specific Plan
provisions upon which the denial is based; a description of any additional
material or information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and a description
of the Plan's review procedures (as set forth in subsection (b)) and the time
limits applicable to such procedures, including a statement of the claimant's
right to bring a civil action under section 502(a) of ERISA following an adverse
determination upon review.

    (b) The claimant has the right to appeal the Committee's decision by
filing a written appeal to the Committee within 60 days after claimant's
receipt of the decision or deemed denial. The claimant will have the
opportunity, upon request and free of charge, to have reasonable access to and
copies of all documents, records and other information relevant to the claimant's
appeal. The claimant may submit written comments, documents, records and other
information relating to his or her claim with the appeal. The Committee will
review all comments, documents, records and other information submitted by the
claimant relating to the claim, regardless of whether such information was
submitted or considered in the initial claim determination. The Committee shall
make a determination on the appeal within 60 days after receiving the claimant's
written appeal; provided that the Committee may determine that an additional
60-day extension is necessary due to circumstances beyond the Committee's
control, in which event the Committee shall notify the claimant prior to the end
of the initial period that an extension is needed, the reason therefor and the
date by which the Committee expects to render a decision. If the claimant's
appeal is denied in whole or part, the Committee shall provide written notice to
the claimant of such denial. The written notice shall include the specific
reason(s) for the denial; reference to specific Plan provisions upon which the
denial is based; a statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to and copies of all documents,
records, and other information relevant to the claimant's claim; and a
statement of the claimant's right to bring a civil action under section 502(a)
of ERISA.

 

53

<PAGE>

 

   
Section  
11.04.
Participant Rights Unsecured.

    (a) Unsecured Claim. The right of a Participant or the
Participant's Beneficiary to receive a distribution hereunder shall be an
unsecured claim, and neither the Participant nor any Beneficiary shall have any
rights in or against any amount credited to his or her Account or any other
specific assets of a Participating Employer. The right of a Participant or
Beneficiary to the payment of benefits under this Plan shall not be assigned,
encumbered, or transferred, except by will or the laws of descent and
distribution. The rights of a Participant hereunder are exercisable during the
Participant's lifetime only by the Participant or his or her guardian or legal
representative.

    (b) Contractual Obligation. The Company may authorize the
creation of a trust or other arrangements to assist it in meeting the
obligations created under the Plan. However, any liability to any person with
respect to the Plan shall be based solely upon any contractual obligations that
may be created pursuant to the Plan. No obligation of a Participating Employer
shall be deemed to be secured by any pledge of, or other encumbrance on, any
property of a Participating Employer. Nothing contained in this Plan and no
action taken pursuant to its terms shall create or be construed to create a
trust of any kind, or a fiduciary relationship between a Participating Employer
and any Participant or Beneficiary, or any other person.

   
Section  
11.05.
Income Tax Withholding.

    The amount actually distributed to the Participant will be reduced by
applicable income tax withholding (if any). Unless the Participant has made a
contrary election with the consent of the Committee, income tax on the entire
annual distribution amount will be withheld from the cash portion of the
distribution, and WPS Resources Stock will be used to satisfy withholding
obligations only to the extent that the cash portion of the distribution is
insufficient for this purpose. Further, no later than the date as of which an
amount first becomes includible in the income of the Participant for employment
tax purposes, the Participant shall pay or make arrangements satisfactory to the
Committee regarding the payment of any such tax.

   
Section  
11.06.
Amendment or Termination of Plan.

    (a) There shall be no time limit on the duration of the Plan.

 

54

<PAGE>

 

    (b) Except as otherwise limited pursuant to Section 10.02, the
Board (or where specified herein, the Committee) may at any time amend the Plan,
including but not limited to modifying the terms and conditions applicable to
(or otherwise eliminating) Deferrals or contribution credits to be made on or
after the amendment date; provided, however, that no amendment or termination
may reduce or eliminate any Account balance accrued to the date of such
amendment or termination (except as such Account balance may be reduced as a
result of investment losses allocable to such Account).

    (c) Subject to Section 10.02, the Board may terminate the Plan in
accordance with and subject to the following rules:

            
            (i) Prior to January 1, 2006, the Board at any time may
            terminate the Plan and require that all benefits accrued be
            currently distributed to Participants and Beneficiaries in a single
            sum without regard to a Participant's prior election as to the
            form and timing of benefit payments.

            
            (ii) Effective January 1, 2006, and except as provided in
            Paragraph (iii) below or except as otherwise permitted in
            regulations promulgated by the Secretary of the Treasury under Code
            Section 409A, any action that purports to terminate the Plan shall
            instead be construed as an amendment to discontinue further
            Deferrals and contributions credits, but the Plan will continue to
            operate, in accordance with its terms as from time to time amended
            in accordance with Sections 10.02 and 11.06, and in accordance with
            applicable Participant elections, with respect to the Participant's
            Account as accumulated through the date of termination and as
            thereafter adjusted to reflect post-termination earnings or losses.
            Except as provided in Paragraph (iii) below or except as otherwise
            permitted in regulations promulgated by the Secretary of 

 

55

<PAGE>

 

             

             the
            Treasury under Code Section 409A, in no event shall any such action
            purporting to terminate the Plan form the basis for accelerating
            distributions to Participants and Beneficiaries.

            
            (iii) The Committee may (but need not) terminate the Plan
            and require that all benefits accrued be currently distributed to
            Participants and Beneficiaries in a single sum without regard to a
            Participant's prior election as to the form and timing of benefit
            payments, if such termination and distribution occurs within 12
            months of a "change in control event", or within such
            other period as permitted under regulations promulgated by the
            Secretary of the Treasury under Code Section 409A. For purposes of
            this Paragraph (iii), the term "change in control event"
            has the meaning specified by the Secretary of the Treasury for
            purposes of Code Section 409A, and a Change in Control (as defined
            in Section 10.01 does not necessarily constitute a "change in
            control event" as defined for purposes of Code Section 409A. A
            Change in Control (as defined in Section 10.01 shall be a
            permissible basis for terminating the Plan and distributing the
            value of Accounts only if such transaction or event also constitutes
            a "change in control event" as that term is defined for
            purposes of Code Section 409A.

   
Section  
11.07.
Administrative Expenses.

    Costs of establishing and administering the Plan will be paid by the
Participating Employers.

 

56

<PAGE>

 

   
Section  
11.08.
Effect on Other Employee Benefit Plans.

    Deferrals credited to a Participant's Account under this Plan shall not be
considered "compensation" for the purpose of computing benefits under
any qualified retirement plan maintained by a Participating Employer, but shall
be considered compensation for welfare benefit plans, such as life and
disability insurance programs sponsored by a Participating Employer, unless
otherwise specifically provided by the terms of such plan.

   
Section  
11.09.
Successors and Assigns.

    This Plan shall be binding upon and inure to the benefit of the Participating
Employers, their successors and assigns and the Participants and their heirs,
executors, administrators, and legal representatives.

   
Section  
11.10.
Right of Offset.

    The Company shall have the right to offset from the benefits payable
hereunder any amount that the Participant owes to the Company or Affiliate or
other entity in which the Company or an Affiliate maintains an ownership
interest. The Company may effectuate the offset without the consent of the
Participant (or the Participant's spouse or Beneficiary, in the event of the
Participant's death).

 

57

<PAGE>EXHIBIT 10.19

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED.

CONFIDENTIAL INFORMATION HAS BEEN DESIGNATED BY ***

JOINT PLANT AGREEMENT

between

Wisconsin Public Service Corporation

and

Dairyland Power Cooperative

 

    THIS AGREEMENT is made and entered into
this 23rd day of November, 2004, by and between Wisconsin Public Service
Corporation, a Wisconsin corporation (hereinafter called "WPSC"), and
Dairyland Power Cooperative, a Wisconsin cooperative association (hereinafter
called "DPC"), the parties hereinafter sometimes being collectively
called the "Companies", and individually called a "Company".

    WHEREAS, each of the Companies owns
electric facilities and is engaged in the generation, purchase and sale of
electric power.

    WHEREAS, the Companies, for the purposes
of obtaining economies of scale, making the most effective use of power
generation, and assuring and supplying economical and reliable electric power to
their respective customers, desire to share in the ownership of Weston 4, which
is to be constructed at the Weston Generating Station (as those terms are
defined below).

    NOW, THEREFORE, in consideration of the
premises and of the mutual covenants herein set forth, the Companies agree as
follows:

<PAGE> 

   Section 1. Definitions.

    "A&G Facilities" shall mean those
buildings, improvements, equipment, facilities and other assets, liabilities and
property not located at the Weston Generating Station that will be used in the
overall conduct of the business and affairs of WPSC, as more specifically
described in Section 06 of the Joint Operating Manual, and all renewals, repairs
and replacements thereof; provided, however, that the A&G
Facilities shall not include the Legner Facility.

    "Affiliate" shall mean
with respect to any entity, any other Person which directly or indirectly,
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with such entity.

    "Applicable Laws"
shall mean any and all laws, rules, regulations, ordinances, requirements,
guidelines, permits, licenses, judgments, decrees and orders of any federal,
state or local legislative body, agency, court or other governmental body having
jurisdiction that apply to or affect the Weston Generating Station, Weston 4,
the Common Facilities, the construction, operation or maintenance of Weston 4 or
of the Common Facilities, or any other transaction contemplated hereby
(including without limitation any of the foregoing which concern health, safety,
environmental protection, non-discrimination or the payment of prevailing
wages).

    "ATC" shall mean the
American Transmission Company LLC.

    "Average Cost Basis" shall mean an
allocation of all costs associated with all applicable activities that support
overall operating Company operations to all users on an equitable basis. This
contrasts with an incremental or marginal cost basis, which identifies as
relevant only those additional costs incurred as a result of the addition of a
facility (Weston 4 in this circumstance).

2

<PAGE>

 

 

    "Code" shall mean the
Internal Revenue Code of 1986, as amended.

    "Common Facilities" shall mean,
collectively, the Weston New Common Facilities, the Weston Existing Common
Facilities and the A&G Facilities.

    "Confidentiality Agreement" shall mean that
certain Confidentiality Agreement between WPSC and DPC described in Section 34.

    "Control" shall mean the possession, whether
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person (whether through the ownership of
securities, by agreement or otherwise).

    "DNR" shall mean the
Wisconsin Department of Natural Resources, or any successor agency thereto.

    "DPC's Secured Lender(s)" shall mean the RUS
and any other lender(s) providing interim or permanent financing to DPC, which
financing is secured, in part, by DPC's interest in this Agreement, Weston 4 and
the Weston New and Existing Common Facilities.

    "Easement" shall mean the easement between
WPSC as grantor and DPC as grantee in the form of Attachment 1 hereto, to be
entered into by the Companies on the Ownership Date.

    "Easement Property" shall mean the land
owned by WPSC that will be subject to the Easement, as described in more detail
in the Easement.

3

<PAGE>

 

 

 

    "EI Agreement" shall mean the Environmental
Indemnity Agreement in the form of Attachment 2 hereto, to be entered into by
the Companies on the Ownership Date.

    "Escrow Agent" shall mean a bank with trust
powers and a Standard & Poor's credit rating of at least A that does not
hold accounts of either WPSC or DPC that has been appointed as escrow agent
pursuant to the Escrow Agreement.

    "Escrow Agreement" shall mean an escrow
agreement to be entered into by the Companies with the Escrow Agent prior to the
Ownership Date, or an escrow agreement entered into by the Companies with a
successor escrow agent.

    "Existing Common Ownership Date" shall mean
the date on which DPC has paid to WPSC its share (based upon DPC's Existing
Common Ownership Share) of the *** Weston Existing Common Facilities and of
WPSC's unrecovered costs associated with the retirement of assets due to the
construction of Weston 4. The Existing Common Ownership Date shall be the first
day of the month following the month in which the "first fire on coal"
milestone in the Weston 4 construction process is achieved; the Existing Common
Ownership Date is presently estimated to be October 1, 2007.

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

4

<PAGE>

 

     

    "Existing Common Ownership Shares" shall
mean, beginning on the Existing Common Ownership Date, the shares to be owned by
the Companies as undivided interests as tenants in common in the Weston Existing
Common Facilities, excluding any fee interest in the land appurtenant thereto,
with undivided interests as follows: The shares to be owned by the Companies
will differ depending upon the usage category of the facility. As described in
more detail in the Joint Operating Manual, there will be different usage
categories, based upon which generating unit(s) will be using the facility in
common with Weston 4 and an equitable determination of Weston 4's projected use
of the facility. The Existing Common Ownership Shares and the New Common
Ownership Shares for each usage category of facilities will be identical. The
Companies' respective Existing Common Ownership Shares in the various categories
of Weston Existing Common Facilities are set forth in Appendix C to the
Joint Operating Manual. These Shares are based upon the 2003 MAIN summer
capacity ratings for the generating units currently located at the Weston
Generating Station and (to the extent applicable) at WPSC's Pulliam Station, and
upon Weston 4's estimated summer capacity rating of 531 MW. The Existing Common
Ownership Shares are subject to adjustment pursuant to Sections 8(i) and 12,
below.

    "Facility Lay-Up"
shall mean the cessation of operations or the shutdown of a facility with the
ability to return the facility to operations, but without there being a decision
to return the facility to operations by a specific date or to permanently close
or abandon the facility.

    "FFB" shall mean the
Federal Financing Bank.

    "First Approval" shall have the meaning
assigned to that term in Section 3(e) of the Agreement.

5

<PAGE>

 

    "Fixed Charges" shall
mean, without limitation, charges for return, taxes other than income taxes, and
depreciation on an investment or allocated portion thereof. The charges for
return will be calculated at the WPSC Cost of Capital.

    "Force Majeure" shall
mean in respect of any Person ("Excused Party") an event beyond the
reasonable control of such Excused Party which prevents or delays, in whole or
in part, such Excused Party from performing any of its obligations under this
Agreement, the Joint Operating Manual, the Ground Lease or the Easement (except
for the obligation to pay money when due) including, without limitation, war,
hostilities, terrorist acts, civil disturbances, any kind of local or national
emergency, riot, fire, flood, hurricane, blizzard, storm, earthquake, concealed
or subterranean conditions at the Weston Generating Station unknown to WPSC's
Environmental Department as of the date of this
Agreement, power failure or power surge, epidemic, explosion, sabotage, act of
God, acts or failures to act or delays in action by governmental authorities
(including but not limited to failure to issue, delays in issuing, or revocation
of permits or licenses, except to the extent any such failure, delay or
revocation is due to the negligence or intentional misconduct of the Person
claiming Force Majeure), transmission constraints, delays in finalizing and
implementing the Interconnection Agreement, acts or failures to act of a third
party (including, in the case of WPSC, failure of its Subcontractor(s) to
perform or deliver on a timely basis, to the extent such failure is due to a
force majeure condition (as defined herein) affecting the Subcontractor or any
other cause beyond WPSC's reasonable control), strike, slowdown or other labor
unrest or dispute (including, in the case of WPSC, strikes, slowdowns or other
labor unrest or disputes of or by employees of WPSC, any Subcontractor or their
respective affiliates), delay of carriers, failure of the usual modes of
transportation, embargo, unavailability of necessary equipment, changes in
Applicable Laws from those in effect on the 

6

<PAGE>

 

 date of this Agreement, any
condition at the Weston Generating Station that requires remediation under any
Applicable Law related to the environment (except any such condition that
constitutes a violation of Applicable Law of which WPSC's
Environmental Department has
knowledge on the date of this Agreement), or expropriation or confiscation of
facilities. Force Majeure shall not, however, include events that would have
been avoided by the claiming Person's following of Good Utility Practice, and if
not completely so avoidable, the extent of Force Majeure relief shall be reduced
to the extent that the consequences of the Force Majeure event would have been
avoided or reduced by the following of Good Utility Practice. Force Majeure
shall also include, in the case of WPSC, any event beyond the reasonable control
of WPSC, such as a physical transmission constraint or limitation or the terms
of a governmental permit, license or order, or an order
of the Transmission Authority or market authority having
jurisdiction, that has the effect of limiting the
aggregate output or operation of Weston 4 and any one or more of the other units
at the Weston Generating Station, in which case WPSC shall not be required to
operate Weston 4 to the extent doing so would have a material adverse effect on
WPSC's ability to operate its other unit(s) at the Weston Generating Station. In
the event of such a constraint, limitation, permit, license or order that has
the effect of limiting the aggregate output or operation of Weston 4 and any one
or more of the other units at the Weston Generating Station, the Companies shall
reduce the dispatch of their respective shares of the Weston Generating Station
generation in accordance with Section 13 of the Joint Operating Manual, as it
may be modified from time to time by the JPOC to reflect the then-current
practices of the Transmission Authority or market authority having jurisdiction.

    "Fully-Loaded Direct Costs" shall mean those
costs that are directly identifiable with activities associated with the
construction, operation, fueling and maintenance of Weston 4 or the 

7

<PAGE>

 

 Weston New
Common Facilities or Weston Existing Common Facilities. These costs shall
include, but are not limited to, productive labor costs loaded with benefits,
payroll taxes and non-productive time, contracted costs, and materials and
supplies, including the associated warehousing costs.

    "GDP-IPD" shall mean the Gross Domestic
Product Implicit Price Deflator published by the Bureau of Economic Analysis, US
Level, which is more specifically titled "NIPA: Implicit Price Deflator -
GDP, Index 2000=100".

    "Good Utility Practice" shall mean any of
those designs, practices, methods, acts and equipment, as may change from time
to time, that are commonly used, engaged in or approved by prudent electric
generation utilities to design, construct, install, operate and maintain their
electric generating, transmission and distribution equipment lawfully and with
safety, dependability, efficiency and economy, including but not limited to
compliance with those standards developed by the American Society of Mechanical
Engineers, the Institute of Electrical and Electronic Engineers and the American
National Standards Institute that are applicable to activities and procedures at
Weston 4 and the Weston New and Existing Common Facilities, and those applicable
standards developed by other similar organizations conducting affairs that are
relevant to activities and procedures at Weston 4 and the Weston New and
Existing Common Facilities; and that are in accordance with or
required by any Applicable Laws in effect as of the
date hereof, and as such may be changed from time to time. "Good
Utility Practice" is not intended to be limited to the optimum design,
practice, method, act or equipment to the exclusion of all others, but rather to
be designs, practices, methods, acts and equipment generally accepted in the
electric utility industry.

8

<PAGE>

 

 

    "Ground Lease" shall
mean the agreement between WPSC as landlord and DPC as tenant in the form of
Attachment 3 hereto, to be entered into by the Companies on the Ownership Date.

    "Indirect Costs" shall mean those costs that
represent normal, routine, recurring services, including without limitation
administrative and general costs, which benefit multiple areas of the operating
Company and may not be easily identified or directly charged to a facility, thus
requiring an allocation methodology, as described in Section 06 of the Joint
Operating Manual, including but not limited to SERVCO, GENCO, ES&C and
A&G Facilities costs. This contrasts with direct costs, which can be
specifically identified as being incurred for or in connection with the facility
receiving the charge.

    "In-Service Date" shall
mean the first date on which Weston 4 (i) is capable of being operated for the
purpose of generating electricity in a safe and proper manner in accordance with
all Applicable Laws, all applicable federal, state and local permits and
licenses, and Good Utility Practice, and (ii) has commenced generating
electricity for sale, excluding electricity generated during trial
operation/test generation. The In-Service Date shall be determined by the Joint
Plant Operating Committee.

 

9

<PAGE>

 

 

    "Joint Operating Manual"
shall mean the detailed procedures document developed by the Companies for use
in administering this Agreement, as such document may be amended or modified
from time to time by the JPOC (it being understood that the JPOC's amendments
and modifications may include, without limitation, adding or deleting sections
or provisions to or from the Joint Operating Manual). The initial version of the
Joint Operating Manual is attached hereto as Attachment 4. The Joint Operating
Manual, as it may be amended from time to time by the JPOC, shall be binding
upon the Companies. The Joint Operating Manual shall, to the greatest extent
possible, be construed to be complementary to the terms of this Agreement, but
in the event of any conflict between the terms of this Agreement and the
provisions of the Joint Operating Manual, this Agreement shall control.
Capitalized terms that are defined in this Agreement shall have the same
meanings when used in the Joint Operating Manual.

    "Joint Plant Operating
Committee" or "JPOC" shall mean a committee which
shall include representatives of each of the Companies and which shall provide
policy supervision and direction with respect to the design, engineering,
procurement, construction, modification, operation, maintenance, repair,
licensing, permitting, accounting matters, interconnection, fuel procurement and
decommissioning of Weston 4 and the Weston New and Existing Common Facilities in
accordance with the terms and conditions of this Agreement and the Joint
Operating Manual.

 

10

<PAGE>

 

 

    "JPOC Threshold" shall
mean individual projects exceeding $*** in capitalized expenditures or fuel
contracts exceeding $*** in expenditures, or individual projects (excluding fuel
contracts) exceeding $*** in expensed expenditures; these dollar amounts shall
be subject to escalation on an annual basis beginning in 2005 in accordance with
changes in the GDP-IPD during the preceding calendar year (for example, if the
GDP-IPD increases by 1% during 2004, the JPOC Threshold amounts shall be $***,
$*** and $***, respectively, during 2005, and if the GDP-IPD then increases by
2% during 2005, the JPOC Threshold amounts shall be $***, $*** and $***,
respectively, during 2006, and so on).

    "Lead Lender" shall mean that one of DPC's
Secured Lender(s) that has been designated by DPC's Secured Lender(s) as being
responsible for forwarding communications received from WPSC under this
Agreement to the other DPC's Secured Lender(s). Promptly after being designated
by DPC's Secured Lender(s), the Lead Lender shall confirm to WPSC in writing
that it is willing to serve in this capacity. If DPC notifies WPSC that there
are only two DPC Secured Lender(s), then each of such DPC's Secured Lender(s)
shall be deemed to be the Lead Lender for purposes of this Agreement.

    "Legner Facility" shall mean WPSC's Legner
solid waste facility located in the Town of Knowlton, Marathon County,
Wisconsin.

    "MAIN" shall mean the Mid-America
Interconnected Network, Inc. or its successor organization.

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

11

<PAGE>

     

  
     

  

    "Major Construction Decisions" shall have
the meaning assigned to that term in Section 5 of this Agreement.

    "Major Operating Decisions" shall have the
meaning assigned to that term in Section 12 of this Agreement.

    "MAPP" shall mean the
Mid-Continent Area Power Pool or its successor reliability organization.

    "New Common Ownership Shares" shall mean,
beginning on the Ownership Date, the shares to be owned by the Companies as
undivided interests as tenants in common in the Weston New Common Facilities,
excluding any fee interest in the land appurtenant thereto, with undivided
interests as follows: The shares to be owned by the Companies will differ
depending upon the usage category of the facility. As described in more detail
in the Joint Operating Manual, there will be different usage categories, based
upon which generating unit(s) will be using the facility in common with Weston 4
and an equitable determination of Weston 4's projected use of the facility. The
Existing Common Ownership Shares and the New Common Ownership Shares for each
usage category of facilities will be identical. The Companies' respective New
Common Ownership Shares in the various categories of Weston New Common
Facilities are set forth in Appendix C to the Joint Operating Manual.
These Shares are based upon the 2003 MAIN summer capacity ratings for the
generating units currently located at the Weston Generating Station and (to the
extent applicable) at WPSC's Pulliam Station, and upon Weston 4's estimated
summer capacity rating of 531 MW. The New Common Ownership Shares are subject to
adjustment pursuant to Sections 8(i) and 12, below.

12

<PAGE>

 

 

    "Ownership Date" shall mean the first date
on which all of the following have occurred: (a) the
Financing Contingency and the Transmission Contingency have
been waived; (b) WPSC and DPC have
each received all Required Permits, and have executed the Ground Lease, Easement
and EI Agreement, and all Required Permits are in full force and effect; (c) DPC
has paid to WPSC (i) its share (based upon DPC's Ownership Share) of all costs
incurred in connection with the design, engineering, procurement, licensing,
permitting, pre-certification activities, administrative and general,
interconnection, fueling, construction, operation and maintenance of Weston 4 on
or prior to such date, plus a return on those costs at the WPSC Cost of Capital
pursuant to Section 3(c), and (ii) its share (based upon DPC's New Common
Ownership Share) of all costs incurred in connection with the design,
engineering, procurement, licensing, permitting, pre-certification activities,
administrative and general, interconnection, construction, operation and
maintenance of the Weston New Common Facilities on or prior to such date, plus a
return on those costs at the WPSC Cost of Capital pursuant to Section 3(c); and
(iii) its share (based upon DPC's Existing Common Ownership Share) of all costs
incurred on or prior to such date in connection with those modifications of the
Weston Existing Common Facilities that are being made in conjunction with and as
part of the Weston 4 project, plus a return on those costs at the WPSC Cost of
Capital pursuant to Section 3(c); and (d) DPC has paid to WPSC an amount equal
to the Fixed Charges associated with WPSC's investment in the Site and the
Easement Property, calculated from the date construction begins on Weston 4
until the date the Companies execute the Ground Lease and the Easement.

    "Ownership Shares"
shall mean, beginning on the Ownership Date, the shares to be owned by the
Companies as undivided interests as tenants in common in Weston 4, excluding any
fee interest in the land appurtenant thereto, with undivided interests as
follows:

	 Wisconsin Public Service Corporation	70%
	 Dairyland Power Cooperative	30%

13

<PAGE>

    The Companies may change their
respective Ownership Shares, or their respective New or Existing Common
Ownership Shares, from time to time, but only as provided herein or otherwise
upon their mutual written agreement and their receipt of any and all
governmental and regulatory permits, licenses and approvals necessary to allow
such a change. In the event of any such change in Ownership Shares, New Common
Ownership Shares or Existing Common Ownership Shares, as the case may be, any
and all rights and responsibilities of the Companies under this Agreement, the
Joint Operating Manual, the Ground Lease, the EI Agreement and the Easement that
are based upon Ownership Shares, New Common Ownership Shares or Existing Common
Ownership Shares, as appropriate, shall, beginning effective on the effective
date of the change, be changed in proportion to the change in Ownership Shares,
New Common Ownership Shares or Existing Common Ownership Shares, as appropriate
(but the Companies' respective rights and responsibilities for periods prior to
the effective date of the change in Ownership Shares, New Common Ownership
Shares or Existing Common Ownership Shares, as appropriate, shall not be
affected).

    "Partial Taking" shall mean any Taking of
the Site or the Easement Property, as the case may be, that is not either a
Total Taking or a Substantial Taking.

    "Permitted Liens"
shall mean (a) liens for current taxes and assessments
not yet due and payable or being contested in good faith by appropriate
procedures; (b) liens, easements, licenses, restrictions, covenants,
rights-of-way and other encumbrances as reflected in title records relating to
the Site or the Easement Property that exist as of the date of this Agreement
and other such liens, easements, licenses, restrictions, covenants,
rights-of-way and other encumbrances that have been disclosed to and accepted by
DPC, other than the lien of the trustee under WPSC's First Mortgage and Deed of
Trust and Supplemental Indentures; (c) liens (except liens securing borrowed
money), easements, leases, licenses, restrictions, covenants, rights-of-way and
other encumbrances arising or granted by WPSC after the date of this Agreement
that do not materially interfere with the operation of Weston 4 or the Weston
New or Existing 

14

<PAGE>

Common Facilities or with DPC's rights under this Agreement, the
Ground Lease, the EI Agreement or the Easement, provided that any such liens,
restrictions, covenants or encumbrances under this subsection (c) do not attach
to DPC's ownership interest in Weston 4 itself or DPC's ownership interest in
the Weston New or Existing Common Facilities (it being
understood that DPC does not and will not have an ownership interest in the Site
or the Easement Property); (d) liens of Subcontractors, contractors,
carriers, warehousemen, processors, mechanics and materialmen, and similar liens
arising by operation of law or pursuant to the terms of contracts in the
ordinary course of business associated with the construction, modification,
operation, maintenance or development of Weston 4 or the
Weston New or Existing Common Facilities for amounts not yet due or not overdue
for a period of more than thirty (30) calendar days; and (e) the terms and
conditions of this Agreement, the Ground Lease, the Easement, the EI Agreement
and the written releases to be provided by WPSC to DPC pursuant to Section 4(b).

    "Person" shall mean
any individual, firm, company, association, general partnership, limited
partnership, limited liability company, trust, business trust, corporation,
cooperative, public body, or other legal entity.

    "PSCW" shall mean the
Public Service Commission of Wisconsin, or any successor agency thereto.

    "Required Permits" shall mean those permits,
licenses, orders and approvals that must be obtained from federal, state and
local governmental or regulatory agencies or authorities in order to allow WPSC
to lawfully transfer to DPC, and DPC to lawfully acquire from WPSC, DPC's
Ownership Share in Weston 4, DPC's New Common Ownership Share in the Weston New
Common Facilities and DPC's Existing Common Ownership Share in the Weston
Existing Common Facilities, and to allow the Companies to enter into the Ground
Lease, the EI 

15

<PAGE>

 Agreement and the Easement, including but not limited to the
Second Approval. The Required Permits as of the date of this Agreement are
identified on Attachment 5 hereto.

    "RUS" shall mean the United States Rural
Utilities Service, or any successor agency thereto.

    "Second Approval" shall have the meaning
assigned to that term in Section 3(e) of this Agreement.

    "Site" shall mean the land in which a
leasehold interest will be granted by WPSC to DPC under the Ground Lease; Weston
4 will be built on said land.

    "Subcontractor" shall
mean every Person (other than employees of WPSC), of whatever tier, employed or
engaged by WPSC to provide labor, materials, equipment, components or services
of any kind in connection with the design, engineering, construction,
modification, repair, licensing, permitting, interconnection, operation,
maintenance or fuel procurement of Weston 4 or the Common Facilities. Upon
mutual agreement of the Companies, DPC may serve as a Subcontractor in
appropriate circumstances.

    "Substantial Taking" shall mean, with
respect to the Site, the Taking of so much of the Site that the portion thereof
not taken cannot reasonably be used for the efficient operation of Weston 4, and
shall mean with respect to the Easement Property, the Taking of so much of the
Easement Property that the portion thereof not taken cannot reasonably be used
for the efficient operation of the Weston New and Existing Common Facilities,
considered in the aggregate.

16

<PAGE>

    "Taking" shall mean the taking or damaging
of the Site or the Easement Property, as the case may be, or any part or parts
thereof, including severance damage, by eminent domain, by inverse condemnation,
or for any public or quasi-public use under any statute.

    "Total Taking" shall mean, with respect to
the Site, the taking of title to the entire Site, and shall mean, with respect
to the Easement Property, the taking of title to the entire Easement Property.

    "Transmission Authority"
shall mean the entity having responsibility for maintaining the integrity of the
transmission system in the region in which the Weston Generating Station is
located.

    "Treasury Regulations"
shall mean the income tax regulations promulgated under the Code.

    "Variable Dispatch Cost" shall mean the
actual incremental cost, determined hourly, of fuel plus chemicals and/or
emission credits, necessary to comply with the then-in-effect emission
requirements, for the requested energy schedule.

    "Weston Existing Common Facilities" shall
mean those buildings, improvements, equipment, facilities and other property
existing at the Weston Generating Station on the date of this Agreement that
will be used in common by Weston 4 and one or more of the other generating units
at the Weston Generating Station, as more specifically described in Exhibit I
to the Joint Operating Manual, and all modifications, renewals, repairs and
replacements thereof.

    "Weston 4" shall mean
the supercritical pulverized coal base load electric generating unit having a
net nominal rating of approximately 500 MW, and all systems, equipment,
structures 

17

<PAGE>

 and facilities ancillary thereto, including but not limited to all
systems, equipment, structures and facilities necessary to deliver the output of
the generator to the high side(s) of the point(s) of interconnection between
said unit and the ATC transmission system, that are existing or are proposed to
be constructed at the Weston Generating Station (but excluding the land
appurtenant thereto), as described in WPSC's Application for a Certificate of
Public Convenience and Necessity ("CPCN"), PSCW Docket No.
6690-CE-187. The Companies acknowledge that the substation and other network
transmission facilities to be built as part of the interconnection agreement
between WPSC and ATC relating to Weston 4 dated December 22, 2003 (the
"Interconnection Agreement"), if owned by a Person other than WPSC,
shall not be deemed to be part of Weston 4. The Companies further acknowledge
that the Interconnection Agreement is between ATC and WPSC in its capacity as
operator of Weston 4, and not on behalf of the co-owners of Weston 4, and that
WPSC is solely responsible for such Interconnection Agreement.

    "Weston Generating Station"
shall mean all power plant and generator interconnection facilities located or
to be located at the site owned by WPSC along Business Highway 51 in the
villages of Rothschild and Kronenwetter in Marathon County, Wisconsin, presently
including three coal units (Weston 1, Weston 2 and Weston 3) and two smaller
natural gas-fired turbines (W31 and W32), and which will include Weston 4, and
which may include other unit(s) in the future, and all related facilities
(including but not limited to the Weston Existing and New Common Facilities).
The Weston Generating Station is more particularly described in Attachment 6 to
this Agreement.

    "Weston New Common Facilities" shall mean
those buildings, improvements, equipment, facilities and other property proposed
to be constructed at the Weston Generating Station in conjunction with the
construction of Weston 4 that will be used in common by Weston 4 and one or more
of the other generating units at the Weston Generating Station, as more
specifically described in Exhibit I to the Joint Operating Manual, and
all modifications, renewals, repairs and replacements thereof. The term Weston
New Common Facilities shall also include those 

18

<PAGE>

 buildings, improvements,
equipment, facilities and other property constructed at the Weston Generating
Station after the construction of Weston 4 that will be used in common by Weston
4 and one or more of the other generating units at the Weston Generating
Station, and all modifications, renewals, repairs and replacements thereof.

    "WPSC Cost of Capital"
shall mean WPSC's pre-tax overall cost of capital that is in effect from time to
time, as reflected in the then-most recent rate order issued by the PSCW
(referred to in those orders as the "economic cost of capital").

    Section 2. Scope. Weston 4 shall be unit train served
and fossil-fueled, and shall have a net nominal rating of approximately 500 MW.
Weston 4 shall be designed and constructed at the Weston Generating Station as
described in this Agreement, and operated and maintained in accordance with this
Agreement and the Joint Operating Manual.

    Section 3. Contingencies. (a)
DPC shall use its best efforts to obtain permanent
financing for its share of Weston 4 costs through the RUS, and interim financing
for its share of such costs through a lender that may require a DPC/RUS mortgage
lien accommodation. If, despite DPC's best efforts, DPC has not obtained by
January 16, 2006 RUS approval of DPC's participation in Weston 4 and an
unconditional RUS commitment to guarantee long-term FFB financing of 100% of the
DPC participation in Weston 4 for a term of at least 35 years at rate(s) of
interest no greater than the then-current long-term FFB rates plus one-eighth of
one percent, and with financial performance covenants not materially more
onerous than those contained in DPC's RUS mortgages existing on the date of this
Agreement (as supplemented), DPC may terminate this Agreement by providing
written notice of termination to WPSC by no later than January 16, 2006 (the
"Financing Contingency"). For purposes of this section, such an

 

19

<PAGE>

"unconditional RUS commitment" shall mean a
commitment the execution of which is conditioned solely on execution of the
usual and customary RUS-guaranteed FFB loan documentation and closing
requirements. If DPC terminates this Agreement pursuant to the Financing
Contingency, DPC's obligation to contribute to the costs of Weston 4 shall be
cancelled, and DPC shall thereafter have the right (which right must be
exercised on or before ***, 2006  or be conclusively deemed waived) to
elect the Partial Requirements Service PPA alternative, as described in more
detail in Attachment 7 hereto. If DPC wishes to elect the Partial Requirements
Service PPA alternative, it must notify WPSC of its election in writing by no
later than ***, 2006. If, on the other hand, DPC obtains the RUS approval and
the unconditional commitment described above on or before
January 16, 2006, DPC shall promptly notify WPSC thereof in writing and thereby
waive the Financing Contingency. DPC in its discretion may
also waive the Financing Contingency by written notice to WPSC on or before
January 16, 2006, even if it has not received the RUS approval and unconditional
commitment described above. Any waiver of the Financing Contingency shall, once
made or given, be irrevocable. If DPC does not provide
WPSC with notice of termination as described above on or prior to January 16,
2006, and if DPC has not waived the Financing Contingency
in writing on or before January 16, 2006, this Agreement shall be deemed to have
been terminated by DPC pursuant to the Financing Contingency, effective on
January 16, 2006.

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

     

20

<PAGE>

  
     

  

    (b) DPC shall use efforts consistent
with Good Utility Practice to obtain transmission service and MAPP accreditation
for firm delivery of DPC's share of the energy to be generated at Weston 4 to
the DPC transmission network at commercially reasonable cost and risk. If
despite such efforts, DPC determines in its sole discretion that it cannot
obtain transmission service and/or accreditation at commercially reasonable cost
and risk, DPC shall have the right to terminate this Agreement by providing
written notice of termination to WPSC on or before January 16, 2006 (the
"Transmission Contingency"). DPC's commercially reasonable cost and
risk of transmission shall include consideration of, among other things, the
likelihood and cost of additions or improvements to the ATC, DPC, or other
transmission systems required to provide firm delivery to the DPC transmission
network, and the cost and availability
of firm transmission service,
including reservation charges, anticipated transmission congestion relief costs
and the associated cost to DPC, if any, to obtain financial transmission rights
and/or redispatch services to offset such costs. If DPC exercises the
Transmission Contingency and terminates this Agreement, it shall disclose to
WPSC in writing the steps DPC has taken to obtain transmission service and
accreditation and the factors in its decision. If DPC terminates this Agreement
pursuant to the Transmission Contingency, DPC's obligation to contribute to the
costs of Weston 4 shall be cancelled. The Transmission Contingency may be waived
by DPC on or prior to January 16, 2006 by providing written notice of waiver to
WPSC; if DPC obtains transmission service and MAPP accreditation at what DPC
deems to be commercially reasonable cost and risk as described above, it shall
promptly notify WPSC thereof in writing and thereby waive the Transmission
Contingency. Any waiver of the Transmission Contingency shall,
once made or given, be irrevocable.  If DPC does not
provide either a written notice of termination or a written notice of waiver of
the Transmission Contingency to WPSC by January 16, 2006, this Agreement shall
be deemed to have been terminated by DPC pursuant to the Transmission
Contingency, effective on January 16, 2006. WPSC shall reasonably cooperate with
DPC (at 

21

<PAGE>

 DPC's expense) and provide DPC with such testing data and other
information as DPC shall reasonably request in order for DPC to obtain the
transmission service and MAPP accreditation for DPC's share of capacity and
energy from Weston 4.

    (c) Notwithstanding anything to the
contrary herein, assuming the Financing and Transmission Contingencies have been
waived and this Agreement has not been terminated pursuant to Section 3(e)
below, DPC's payment of its share of Weston 4 and Weston New Common Facilities
costs and Weston Existing Common Facilities modification costs may be delayed in
whole or in part until the earlier of (i) the date DPC has closed on its interim
or permanent financing, or (ii) ***. Assuming the
Financing and Transmission Contingencies have been waived and this Agreement has
not been terminated pursuant to Section 3(e) below, WPSC shall finance DPC's
unpaid Weston 4 and Weston New Common Facilities costs, and DPC's share of the
costs of those modifications of the Weston Existing Common Facilities that are
being made in conjunction with and as part of the Weston 4 project, until DPC
has closed on its interim or permanent financing and DPC has paid its share
of Weston 4 and Weston New Common Facilities costs
and Weston Existing Common Facilities modification costs; provided, however,
that DPC must pay its share of the Weston 4 and Weston New Common Facilities
costs and Weston Existing Common Facilities modification costs by no later than
***. WPSC shall earn the WPSC Cost of Capital in effect in each of the time
periods covered by expenditures made by WPSC prior to the initial billing on the
financing provided to DPC hereunder, and DPC shall pay the amount accrued at the
WPSC Cost of Capital, together with its share of the Weston 4 and Weston New
Common Facilities costs and Weston Existing Common Facilities

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

22

<PAGE>

 

modification costs that have accrued through the date on
which the Companies close on the transfer by WPSC to DPC of DPC's interest in
Weston 4 and in the Weston New Common Facilities. The Companies shall close on
the transfer by WPSC to DPC of DPC's interest in Weston 4 and in the Weston New
Common Facilities as soon as reasonably possible. Notwithstanding anything to
the contrary herein, DPC shall not have any ownership interest in Weston 4 or in
any of the Weston New Common Facilities until the Ownership Date.

    (d) The Companies acknowledge and agree
that time is of the essence with respect to the January 16, 2006 deadline in
connection with the Financing and Transmission Contingencies, and in connection
with the provisions of Section ***, and with respect to the *** 2006 deadlines
in connection with the provisions of Sections 3(e)(iv) and (v). The
Companies specifically agree that, if and when the Financing Contingency and the
Transmission Contingency have both been waived, and if this Agreement has not
been terminated pursuant to Section 3(e) on or before *** 2006, then DPC shall
have an unconditional obligation to pay for its share of all Weston 4 and Weston
New Common Facilities costs, and Weston Existing Common Facilities modification
costs, then accrued by no later than ***, regardless of whether or not DPC has
closed on its interim or permanent financing by said date, and regardless of any
action or failure to act on the part of RUS, the FFB, DPC's Secured Lender(s),
any other DPC lender, or any other Person having jurisdiction over or affiliated
with DPC. In such case, if DPC has not paid for its share of Weston 4 and Weston
New Common Facilities costs, and Weston Existing Common Facilities modification
costs then accrued on or before *** (for any reason other than the failure of
WPSC to comply with condition(s) to one or more of the Required Permits such
that said Required Permit(s) are not in full force and effect on ***), then DPC
shall be in material breach of this Agreement and beginning on ***, WPSC in its
sole discretion shall be entitled to terminate this

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

23

<PAGE>

     

Agreement upon written notice to DPC and hold DPC liable for
any and all damages incurred by WPSC as a result of DPC's breach (subject to the
limitation of liability set forth in Section 13). If DPC has not paid for its
share of Weston 4 and Weston New Common Facilities costs and Weston Existing
Common Facilities modification costs then accrued on or before ***, due to the
failure of WPSC to comply with condition(s) to one or more of the Required
Permits such that said Required Permit(s) are not in full force and effect on
***, then WPSC in its sole discretion shall be entitled to terminate this
Agreement upon written notice to DPC, but DPC shall not in this instance be
liable for damages incurred by WPSC. A "failure of WPSC to comply with
condition(s) to one or more of the Required Permits" for purposes of the
immediately preceding two sentences, however, shall not be deemed to include any
such failure that is caused by DPC's acts or omissions.

    e)
On October 7, 2004, WPSC received a CPCN (PSCW Docket No. 6690-CE-187) from the
PSCW to allow the construction of Weston 4 (the "First Approval"). As
soon as reasonably practicable after the date of this Agreement, DPC and WPSC
shall submit to the PSCW all materials necessary to obtain PSCW approval to
allow WPSC to transfer a 30% interest in Weston 4 to DPC and to allow DPC to
acquire said interest (this PSCW approval to be sought by WPSC and DPC is
referred to herein as the "Second Approval"). The Companies shall use
reasonable best efforts to obtain, and shall cooperate to facilitate and
expedite receipt of, the Second Approval and all other Required Permits
associated with the Weston 4 project, including without limitation by
coordination with the RUS, the PSCW, the DNR and other federal, state and local
agencies for compliance with all Applicable Laws, including but not

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

 

24

<PAGE>

 

limited to the National Environmental Policy Act and the
Wisconsin Environmental Policy Act. The costs of obtaining the Second Approval
shall be shared by the Companies in accordance with their respective Ownership
Shares. WPSC shall consult with DPC before making any commitments, entering into
any voluntary agreements, or agreeing to any permit or approval condition that
would have the effect of materially increasing DPC's costs or regulatory
obligations with regard to DPC's other generation units or utility system.

    Notwithstanding anything to the
contrary herein (but subject to the last sentence of this Section 3(e) dealing
with expiration of termination rights): (i) if WPSC has not received on or
before *** the necessary air permit for Weston 4 from the
DNR or any other material governmental or regulatory permit, license, order or
approval that is reasonably necessary for the construction, operation or
maintenance of Weston 4 or the Weston New Common Facilities, or if the First
Approval or any such air permit and/or other permit, license, order or approval
has been received by such date but has been suspended, withdrawn or revoked, or
is subject to restriction(s), condition(s) or qualification(s) that, in the sole
discretion of either WPSC or DPC, have or may have a material adverse impact
upon the Weston 4 project or its usefulness or value to WPSC or DPC, as the case
may be, then either DPC or WPSC, in its sole discretion, shall be entitled to
terminate this Agreement upon written notice to the other Company, so long as
such notice is received by no later than ***; (ii) if the Companies have not
received the Second Approval on or before ***, or if the Second Approval has
been received by such date but has been suspended, withdrawn or revoked or is
subject to restriction(s), condition(s) or qualification(s) that, in the sole
discretion of either of the Companies, have or may have a material adverse
impact upon the Weston 4 project or its usefulness or value to such Company,
then either such Company, in its sole discretion, shall be entitled to terminate
this Agreement

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

25

<PAGE>

     

upon written notice to the other Company, so long as such
notice is received by no later than ***; (iii) if all Required Permits have not
been received on or before *** 2006, or if one or more of the Required Permits
has been received on or before *** 2006 but has been suspended, withdrawn or
revoked, this Agreement shall automatically terminate effective on said date
unless the Companies have mutually agreed in writing to waive this subsection
(iii) prior to *** 2006; (iv) if all Required Permits have been received, but
one or more of them has been suspended, withdrawn or revoked or is subject to
restriction(s), condition(s) or qualification(s) that, in the sole discretion of
either of the Companies, have or may have a material adverse impact upon the
Weston 4 project or its usefulness or value to such Company, or if the Second
Approval or any other Required Permit is being challenged before the PSCW or in
a court of competent jurisdiction, and such challenge is determined by either
Company in its sole discretion to have a material adverse impact upon the Weston
4 project or its usefulness or value to such Company, then either Company, in
its sole discretion, shall be entitled to terminate this Agreement upon written
notice to the other Company, so long as such notice is received by *** 2006; (v)
if the First Approval, the necessary air permit for Weston 4 from the DNR, or
any other material governmental or regulatory permit, license, order or approval
that is reasonably necessary for the construction, operation or maintenance of
Weston 4 or the Weston New Common Facilities is being challenged before the DNR
or the PSCW or in a court of competent jurisdiction, and such challenge is
determined by either Company in its sole discretion to have a material adverse
impact upon the Weston 4 project or its usefulness or value to such Company,
then either Company, in its sole discretion, shall be entitled to terminate this
Agreement upon written notice to the other Company, so long as such notice is
received by *** 2006 (it being understood that WPSC may terminate this Agreement
under this subsection (v) only if it also abandons the

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

26

<PAGE>

    

Weston 4 project); and (vi) WPSC, in its sole discretion,
shall be entitled to terminate this Agreement upon written notice to DPC at any
time prior to the Ownership Date if WPSC decides not to proceed with the Weston
4 project. If WPSC intends to exercise its
termination right under subsection (vi) of this
Section 3(e), and WPSC's exercise of such termination right will occur
more than 30 calendar days after the date the Second Approval
is obtained, and WPSC has decided to pursue an
alternative generation resource or resources instead of Weston 4, then
before WPSC may exercise its termination right under subsection (vi) of this
Section 3(e), WPSC will
notify DPC of such intended termination and
consult with DPC concerning the possibility of DPC participating in such
alternative resource(s); provided,
however, that any such DPC participation shall be subject to the Companies
reaching mutual agreement with respect thereto.
The termination rights identified in Sections 3(e)(i) through (vi) shall each
expire automatically if and when the Ownership Date has occurred.

    Section 4. Title to Property and
Rights of Use; Risk of Loss; Condemnation.

    (a) Effective on the Ownership Date,
DPC and WPSC shall be tenants in common (as undivided interests) in
Weston 4 and in the Weston New Common Facilities (excluding any interest in the
land underlying the same other than the rights created by the Ground Lease and
the Easement), with undivided interests in Weston 4 in proportion to their
respective Ownership Shares, and undivided interests in the Weston New Common
Facilities in proportion to their respective applicable New Common Ownership
Shares. WPSC shall solely own and continue to own the A&G Facilities, and
any and all buildings, improvements, equipment, facilities and other property at
the Weston Generating Station that are not used in common by Weston 4 and one or
more of the other generating units at the Weston Generating Station. The Site
shall be owned solely by WPSC, subject to the Ground Lease, with DPC as tenant
in proportion to DPC's Ownership Share in Weston 4. The Easement Property shall
be owned solely by WPSC, subject to the Easement. Effective on the Existing
Common Ownership Date, DPC and WPSC shall be tenants in common (as undivided
interests) in the Weston Existing Common Facilities (excluding 

27

<PAGE>

 any interest in
the land underlying the same other than the rights created by the Easement),
with undivided interests in the Weston Existing Common Facilities in proportion
to their respective applicable Existing Common Ownership Shares. All titles and
interests of the Companies as tenants in common as described above shall be
subject to the provisions of Section 17 of this Agreement. The Companies agree
that the Common Facilities will be made reasonably available to carry out the
purposes and intent of this Agreement.

     (b) WPSC shall transfer to DPC its
share of ownership in Weston 4, the Weston New Common Facilities and the Weston
Existing Common Facilities by bill of sale or other documents of transfer
reasonably satisfactory to DPC's counsel and the RUS, with warranties of title,
free and clear of liens or encumbrances other than Permitted Liens.
On or before the Ownership Date, WPSC shall also provide to DPC a written
release from those indenture trustees holding liens on
Weston 4, the Weston New Common Facilities, the Site and the Easement Property,
substantially in the form of the Partial Release of Mortgage attached as Schedule
II to the Ground Lease, or such other form as is reasonably acceptable to
WPSC and DPC. On or before the Existing Common
Ownership Date, WPSC shall also provide to DPC a written release or consent from
the indenture trustees holding liens on the Weston Existing Common Facilities,
analogous in form to the Partial Release of Mortgage attached as Schedule II
to the Ground Lease, or such other form as is reasonably acceptable to WPSC and
DPC.

    (c) Risk of loss of Weston 4, the
Weston New Common Facilities and the Weston Existing Common Facilities
(including but not limited to any risk of loss or other liability or cost
associated with any governmental or regulatory permit, license, approval or
order necessary for the construction, creation, operation or maintenance of
Weston 4 or the Weston New or Existing Common Facilities, or necessary in
connection with the Ground Lease or the Easement, or otherwise related to
compliance with Applicable Laws or obtaining approvals as contemplated 

28

<PAGE>

 by
Section 25) shall be shared by WPSC and DPC in proportion to their respective
Ownership Shares, New Common Ownership Shares or Existing Common Ownership
Shares, as the case may be. Loss of or damage to A&G Facilities will,
under normal circumstances, involve a retirement and a replacement of the
equipment as a capital expenditure. In these circumstances, WPSC and DPC will
share in the premature retirement of the damaged facilities through depreciation
expense as certified by the PSCW. If for some reason WPSC is required to record
a book loss on such facilities, or to the extent a
loss results in an expenditure that is expensed, such loss will
be shared by DPC and WPSC as provided in the Joint Operating
Manual.

    (d) In the event of a Total Taking or a Substantial Taking of
the Site, the term of the Ground Lease shall terminate as of the date of said
Total or Substantial Taking; DPC shall pay rent under the Ground Lease up to
such date, with an appropriate refund by WPSC of such rent as may have been paid
in advance for any period subsequent to such date; and that portion of the award
or other compensation relating to the Site (the portion of the award or
compensation relating to Weston 4 itself is addressed below), whether pursuant
to judgment or by agreement or otherwise, with respect to such Total or
Substantial Taking shall be paid directly to WPSC and be WPSC's sole property.
In the event of a Total Taking or Substantial Taking of the Easement Property,
the Easement shall terminate as of the date of said Total or Substantial Taking;
and that portion of the award or other compensation relating to the Easement
Property (the portion of the award or compensation relating to the Weston New or
Existing Common Facilities themselves is addressed below), whether pursuant to
judgment or by agreement or otherwise, with respect to such Total or Substantial
Taking shall be paid directly to WPSC and be WPSC's sole property. In the event
of a Partial Taking of the Site or the Easement Property, WPSC shall, unless the
Companies agree otherwise in writing, within six (6) months restore the Site or
the Easement Property, as the case may be, to a condition reasonably equivalent
to that existing prior to such Partial Taking; the award or other compensation
relating to the Site or the Easement Property, as the case may be, whether
pursuant to judgment or by agreement or otherwise, with respect to 

29

<PAGE>

 such Partial
Taking shall be paid to WPSC and be WPSC's sole property; provided, however,
that such award or compensation shall first be applied, if necessary, toward any
costs incurred for such restoration. The award or other compensation arising
from any Taking relating to Weston 4 (exclusive of all land comprising the Site
itself and value relating solely to such land), if any, shall belong to DPC and
WPSC, in accordance with their then-respective Ownership Shares in Weston 4. The
award or other compensation arising from any Taking relating to the Weston New
or Existing Common Facilities (exclusive of all land comprising the Easement
Property itself and value relating solely to such land), if any, shall belong to
DPC and WPSC, in accordance with their then-respective applicable New Common
Ownership Shares or Existing Common Ownership Shares, as the case may be.
Nothing herein shall prevent WPSC or DPC from pursuing a claim against the
condemning authority for relocation costs.

    Section 5. Construction.
WPSC shall, in accordance with Good Utility Practice and subject to the
decisions of the JPOC, have sole responsibility for the design, licensing,
procurement, installation, construction, interconnection,
administration and commissioning of Weston 4 and the Weston New Common
Facilities, including the other new and modified facilities associated with such
construction, and any modification or replacements thereof or additions thereto,
and for the modifications to the Weston Existing Common Facilities. These tasks
may be performed directly by WPSC employees or by Subcontractors with which WPSC,
directly or indirectly, has entered into contracts. WPSC shall use all
commercially reasonable efforts to complete construction of Weston 4, such that
the In-Service Date occurs by June 1, 2008, subject to
the effects of Force Majeure. Throughout the construction phase, WPSC shall
provide DPC with a copy of each monthly project status report for the Weston 4
project promptly after such report is completed.

30

<PAGE>

 

    Beginning on the Ownership Date, WPSC shall also provide DPC
with reasonable access to the "Expedition" and "PowerTrak"
software tools used by WPSC in connection with the management of the Weston 4
project. To the extent not accessible through such software, WPSC will also upon
request arrange for DPC to obtain copies of any critical path schedules and
other schedules provided by Weston 4 construction Subcontractors showing their
planned construction schedule to meet the estimated In-Service Date, the WPSC
internally-prepared schedules that monitor the progress of Weston 4
construction, and copies of materials provided to WPSC by its prime Weston 4
construction Subcontractors or other Subcontractors and suppliers to document
invoices presented to WPSC for payment. Also beginning on the Ownership Date,
WPSC will provide to DPC reasonably promptly copies of verification/approval
reports issued by Black & Veatch and the Washington Group International with
respect to invoices from equipment and construction Subcontractors. WPSC will
also use commercially reasonable efforts to respond to questions reasonably
posed by DPC with respect to information and materials provided pursuant to this
section. WPSC shall also provide DPC with such information in WPSC's possession
as DPC may reasonably request to permit DPC to determine the status of work on
the Weston New and Existing Common Facilities, start-up and commissioning,
training, permitting, interconnections, project budgets and construction budgets
(including change orders). DPC shall be responsible for any increased costs
incurred by WPSC in providing DPC access to software tools, reports, schedules
and other information pursuant to this section.

    WPSC shall notify DPC if and when WPSC has actual knowledge
that suggests the In-Service Date of Weston 4 will be delayed beyond June 1,
2008. If WPSC notifies DPC that it expects such a delay to occur, then
WPSC shall inform DPC in writing of the remedial steps to be taken to minimize
the delay, and provide DPC with copies of any remedial action plans 

31

<PAGE>

 obtained
from WPSC's Subcontractors, including reasonable forecasts of when all necessary
work can be completed to allow the In-Service Date to occur.

    Subject to the terms, conditions and restrictions of the
Confidentiality Agreement, DPC may provide any of the above information
(including without limitation reasonable access to the software tools described
above) to its authorized representative, including the engineering consultant
for DPC's Secured Lender(s). DPC shall be responsible for any increased costs
incurred by WPSC in connection with the provision of such information and
software access to DPC's authorized representative.

    During the construction phase, WPSC shall maintain an
owner-controlled insurance program that will provide workers' compensation and
general liability coverage for incidents occurring at the Weston 4 site, or will
make arrangements for comparable coverages. WPSC also shall maintain a builder's
risk policy applicable to loss of property that occurs at the Weston 4 site
during construction, or will make arrangements for comparable coverage. The cost
of these insurance coverages shall be shared by the Companies as provided in
this Agreement and the Joint Operating Manual.

    Notwithstanding anything to the
contrary contained in this Section 5 or elsewhere in this Agreement, none of the
following actions (which shall be referred to herein as "Major Construction
Decisions") may be taken on or after the Ownership Date without the
unanimous approval of the Joint Plant Operating Committee: (i) abandonment of
the Weston 4 project or the Facility Lay-Up of Weston 4 prior to the In-Service
Date; (ii) any modification to the Weston 4 project occurring prior to the In-Service
Date that would reduce the rated megawatt capability of Weston 4 by more than 30
MW (specifically excluding expected variations due to
normal operating constraints, seasonal variations, and other temporary unit
deratings); or (iii) a voluntary
decision by WPSC to delay the In-Service
Date by an aggregate period of more than 60 calendar 

32

<PAGE>

 days, due
to circumstances within the control of WPSC,
and specifically not including any delays arising from Force Majeure events.

    Prior to and after the Ownership Date, DPC may elect, at its
sole cost and responsibility, to have DPC staff member(s) or representative
engineer(s) on-site during the design and construction phase for Weston 4 to
observe and provide WPSC with input on project management and administration.
WPSC shall consider any such input in good faith, but shall not be required to
act upon such input unless it determines in its reasonable discretion and in
accordance with Good Utility Practice that it is appropriate to do so. Also
prior to and after the Ownership Date, DPC staff members or representative
engineers may upon mutual agreement of the Companies perform work associated
with the design and construction of Weston 4.

    Section 6. Contracts and
Authorizations. In general, WPSC as the operating co-owner shall have
responsibility for the construction, operation and maintenance of Weston 4.
Subject to the provisions in this Agreement dealing with Major Construction
Decisions and Major Operating Decisions, WPSC was, is and on an ongoing basis
shall be authorized to act for the co-owners of Weston 4 and the Weston New and
Existing Common Facilities, in accordance with Good Utility Practice and subject
to the general oversight of the JPOC, by negotiating and entering into (i)
contracts related to the design, engineering, procurement, licensing,
permitting, interconnection, administration
or construction of Weston 4 or the Weston New or Existing Common Facilities, or
to the replacement of, addition to, modification of, or repair or refurbishment
of, any items of property of or associated with Weston 4 or with the Weston New
or Existing Common Facilities, or to transportation or fuel procurement for
Weston 4, and contracts for operation, maintenance and modification services for
Weston 4 or for the Weston New or Existing Common Facilities, and amendments to
all such contracts, and (ii) settlements of and judgments related to any
asserted rights, claims, demands, actions or penalties of any third Person
associated with the design, engineering, procurement, licensing, permitting,
interconnection, administration, construction, operation, maintenance,
modification, repair, 

33

<PAGE>

 transportation or fuel procurement of Weston 4 or of the
Weston New or Existing Common Facilities, so long as the estimated cost of any
such contract (as amended), judgment or settlement entered into on or after the
date of this Agreement is less than the JPOC Threshold. Effective on and after
the Ownership Date, DPC's cost responsibility under this Agreement shall reflect
the terms and conditions of, and DPC shall be responsible under this Agreement
for the costs and liabilities arising from, all such contracts (as amended),
judgments and settlements (whether entered into before, on or after the
Ownership Date (or, with respect to the Weston Existing Common Facilities, the
Existing Common Ownership Date)) in proportion to DPC's Ownership Share, New
Common Ownership Share or Existing Common Ownership Share, as the case may be.
The Companies further acknowledge and confirm that, effective on the Ownership
Date, DPC's cost responsibility under this Agreement shall reflect the terms and
conditions of, and DPC shall be responsible under this Agreement for the costs
and liabilities arising from, all such contracts (as amended), judgments and
settlements entered into by WPSC prior to the date of this Agreement, in
proportion to DPC's Ownership Share, New Common Ownership Share or Existing
Common Ownership Share, as the case may be, whether the estimated cost of any
such contract, amendment, judgment or settlement is below, at or above the JPOC
Threshold. WPSC also is and on an ongoing basis shall be authorized to act for
the co-owners of Weston 4 and the Weston New and Existing Common Facilities, in
accordance with Good Utility Practice, by
negotiating and entering into contracts, amendments, judgments and settlements
associated with the design, engineering, procurement, licensing, permitting,
interconnection, administration,
construction, modification, repair, operation, maintenance, transportation or
fuel procurement of Weston 4 or of the Weston New or Existing Common Facilities
as provided in Sections 7 or 12 below. Consistent with the scope of WPSC's
authority to act for the co-owners of Weston 4 and the Weston New and Existing
Common Facilities under this Agreement, at WPSC's request DPC shall confirm in
writing to WPSC and to Subcontractors engaged on work for Weston 4 or the Weston
New or Existing Common Facilities, or other third Persons as appropriate, that
as a co-owner of Weston 4 and the Weston New and Existing 

34

<PAGE>

 Common Facilities, DPC
will not assert any claims with regard to or in connection with contracts or
settlements entered into by WPSC as authorized or confirmed by this Agreement
that are inconsistent with or foreclosed by the terms and conditions of those
contracts or settlements. In appropriate circumstances involving significant or
longer-term contracts, WPSC may request that DPC contract directly with a
third-party vendor or other third Person, or that DPC authorize WPSC to bind DPC
directly to said vendor or Person, for DPC's proportionate share of
responsibility under a contract, judgment or settlement, and DPC shall do as
reasonably requested, subject, however, to receiving any required approval from
RUS for such authorization or such contract. DPC shall otherwise not be
authorized to enter into any contract, judgment or settlement associated with
the design, engineering, procurement, licensing, permitting, interconnection,
administration, construction, modification, repair,
operation, maintenance, transportation or fuel procurement of Weston 4 or of the
Weston New or Existing Common Facilities without the express, prior written
approval of the JPOC. Contracts for the purchase of materials or services that
will exceed the sum of $1,500,000 shall contain clauses that allow compliance
with RUS mandates for "Buy American" requirements, debarment
certification and equal opportunity requirements, so as to facilitate approval
for DPC's RUS financing for its share of the costs of such contracts. Any
charges for goods or services from Affiliates
of WPSC that are not regulated by the PSCW shall not exceed the lesser of the
actual cost to the Affiliate or the fair market value of
such goods or services (based upon the PSCW's affiliated interest policies and
practices in effect on the date of this Agreement).

    The Companies agree that, subject to
the provisions of this Agreement dealing with the Required Permits and the
Financing Contingency, WPSC shall have the sole right and responsibility to
apply for such governmental permits, licenses, orders and approvals, and to
conduct such regulatory proceedings, and to make such filings, as may be
required in connection with the design, engineering, procurement, licensing,
permitting, interconnection, administration,
construction, modification, repair, operation, maintenance, transportation or
fuel procurement of

35

<PAGE>

 Weston 4 or of the Weston New or Existing Common Facilities.
DPC shall cooperate fully with all such efforts by WPSC; provided that WPSC
shall consult with DPC before making any commitments, entering into voluntary
agreements, or agreeing to any permit or approval condition that would have the
effect of materially increasing DPC's costs or regulatory obligations with
regard to DPC's other generation units or utility system.

    Within thirty (30) calendar days after
entry into any contract, amendment, cancellation, judgment or settlement in its
capacity as the operating co-owner of Weston 4 that meets or exceeds the JPOC
Threshold, WPSC shall give notice thereof to DPC and shall provide such copies
or summaries as may be necessary for the accounting and other records of the
Companies. In addition, to facilitate DPC's applications for regulatory and
financing approvals, WPSC shall provide to DPC a listing of all contracts,
amendments, cancellations, judgments or settlements relating to Weston 4, and
copies or summaries as may be reasonably necessary for such applications and
approvals.

    Section 7. Joint Plant Operating
Committee. The JPOC will be formed upon the execution of this Agreement.
Both Companies shall be represented on the Joint Plant Operating Committee. The
names and contact information of the initial members of the JPOC, and the
procedures by which the Companies may replace their respective JPOC members, are
set forth in the Joint Operating Manual. Each Company shall have voting rights
on the JPOC in proportion to its respective Ownership Share in Weston 4; provided,
however, that while the DPC members may participate in the meetings and
discussions of the JPOC prior to the Ownership Date, DPC shall not be entitled
to vote on any matter being considered by the JPOC until the Ownership Date; and
provided, further,
that on and after the Ownership Date, Major Construction Decisions and Major
Operating Decisions may be implemented only upon the unanimous vote of the WPSC
and DPC members of the JPOC (except for certain Major Operating Decisions
described in clauses (iii), (iv) and (v) of Section 12, which may be implemented
in the absence of 

36

<PAGE>

 unanimity under the circumstances described in Section 12).
The Companies will exercise their JPOC voting rights timely and in accordance
with Good Utility Practice.

    The JPOC shall meet on a quarterly
basis, or more frequently if requested by one or both of the Companies, and it
shall serve as a means of direct exchange and reporting of items of mutual
interest between the Companies in the operating, accounting and budget areas.
The JPOC shall have the authority to form subcommittees as and when the JPOC
deems necessary or appropriate, it being understood that the JPOC may not confer
upon any such subcommittee any right or authority that the JPOC itself does not
possess. The JPOC shall establish and modify the
membership, duties and responsibilities of any such subcommittee from time to
time; the JPOC shall have the authority to dissolve any such subcommittee if and
when it deems it appropriate to do so. The JPOC shall review operating,
maintenance, environmental compliance, training and safety issues, among others,
and it shall establish general policies for the operation and maintenance of
Weston 4. The JPOC shall have the power to amend or modify the Joint Operating
Manual from time to time in its discretion; provided, however,
that those provisions of the Joint Operating Manual that are expressly stated to
be subject to modification only upon the unanimous vote of the WPSC and DPC
members of the JPOC may not be amended except by a unanimous vote of the JPOC.
The Joint Plant Operating Committee shall establish the details of the cost
accounting for Weston 4 utilizing general accounting, property accounting, and
tax accounting support; such details shall be included in the Joint Operating
Manual. The JPOC will accommodate the reasonable requests of the Companies for
accounting information to enable each Company to comply with its respective
required uniform systems of accounts. Other rights, tasks and duties of the JPOC
are set forth in the Joint Operating Manual. JPOC members will have access to
all information relevant to Weston 4 operations and performance (except for any
attorney-client privileged information) at all reasonable times.

    With respect to all contracts (and
amendments thereto), judgments and settlements associated with the design,
engineering, procurement, licensing, permitting, interconnection, 

37

<PAGE>

 construction,
administration, modification, repair, operation, maintenance, transportation or
fuel procurement of Weston 4 or of the Weston New or Existing Common Facilities
the estimated cost of which is at or above the JPOC Threshold, and with respect
to all other matters that are within the scope of the JPOC's authority pursuant
to this Agreement or the Joint Operating Manual, the Joint Plant Operating
Committee will consider and vote on such contracts, amendments, judgments,
settlements and matters and, except as provided expressly herein with respect to
Major Construction Decisions and Major Operating Decisions, in the event the
vote is not unanimous, the vote of the Company that holds the majority of
Ownership Shares shall prevail; provided, however, that prior to
the Ownership Date, WPSC is and on an ongoing basis shall be authorized to act
for the co-owners of Weston 4 and the Weston New and Existing Common Facilities,
in accordance with Good Utility Practice, by
negotiating and entering into any such contract, amendment, judgment or
settlement the estimated cost of which is at or above the JPOC Threshold without
a vote by the JPOC, so long as it notifies all JPOC members of its action within
a reasonable time thereafter. Effective on and after the Ownership Date, DPC's
cost responsibility under this Agreement shall reflect the terms and conditions
of, and DPC shall be responsible under this Agreement for the costs and
liabilities arising from, all contracts, amendments, judgments and settlements
entered into by WPSC either in accordance with the prevailing vote of the JPOC,
or without a JPOC vote (but only to the extent authorized in this paragraph),
whether entered into before, on or after the Ownership Date (or in the case of
the Weston Existing Common Facilities, the Existing Common Ownership Date), in
proportion to DPC's Ownership Share, New Common Ownership Share or Existing
Common Ownership Share, as the case may be, and the Companies shall similarly be
bound by the decisions of the JPOC on all other matters, whether made before, on
or after the Ownership Date. WPSC will provide reasonable advance notice of any
planned, non-emergency construction,
operation or maintenance contracts and commitments if
WPSC reasonably expects the value of such contracts and commitments
to exceed $25,000,000 in the
aggregate in any particular calendar
year,
to enable DPC to obtain financing for its share of such costs. The dollar amount
identified in the 

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<PAGE>

 immediately preceding sentence shall be subject to escalation
on an annual basis beginning in 2005 in accordance with changes in the GDP-IPD
during the preceding calendar year (for example, if the GDP-IPD increases by 1%
during 2004, said dollar amount shall be $25,250,000 in 2005).

    If a multi-year contract, the
estimated costs of which meet or exceed the JPOC Threshold, is approved by the
JPOC, the annual renewals of such contract shall be subject to JPOC review or
approval to the extent the costs of such renewals exceed the JPOC Threshold.
Notwithstanding anything to the contrary herein, the JPOC Threshold concept
shall not apply to labor contracts between WPSC and its employees who will be
employed in the design, engineering, procurement, licensing, permitting,
interconnection, construction, administration, modification, repair, operation,
maintenance, transportation or fuel procurement of Weston 4 or the Weston New or
Existing Common Facilities; WPSC shall have the sole right and discretion to
negotiate and enter into all such labor contracts; and WPSC shall be solely
responsible for supervising, directing and controlling the activities of all
such employees and the details of their work.

    Section 8. Payment of Costs.
The intent of this Agreement is to create a cost-sharing mechanism that fairly
allocates the costs of Weston 4 and related Common Facilities among the
Companies. DPC will pay its proportionate share of the Fully-Loaded Direct Costs
incurred by WPSC to construct, operate, fuel and maintain Weston 4 and related
Common Facilities. DPC shall pay a fair allocation of WPSC's Indirect Costs,
including but not limited to administrative and general costs, related to the
construction, modification, repair, operation, fueling and maintenance of Weston
4 and related Common Facilities ***. Costs that are not specifically

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

39

<PAGE>

     

  
     

  

identifiable to the Weston 4 unit but are fairly chargeable
to its ownership or operation shall be allocated on an Average Cost Basis, as
opposed to a marginal or incremental cost basis. The Companies acknowledge that
the Joint Operating Manual in effect on the date of this Agreement, a copy of
which is attached hereto as Attachment 4, represents a full and fair allocation
of costs, and incorporates Average Cost Basis allocation methodologies that, as
of the date of this Agreement, are commercially reasonable within the electric
utility industry and do not result in a disproportionate allocation of costs to
DPC; these allocation methodologies are intended to establish a precedent for
future evaluation of proposed new allocation methodologies or methodology
changes.

        (a) General. Costs will be paid in the manner
described in this Section 8 depending upon the nature of the facilities. All
costs shall be determined in accordance with the Uniform System of Accounts
prescribed by the PSCW. "All costs" as used herein
is meant to be broadly construed, and it shall
include, without limitation, the Fully-Loaded Direct Costs and Indirect Costs of
the design, engineering, procurement, licensing, permitting, interconnection,
construction, fueling, modification, repair, administrative and general,
operation and maintenance (including without limitation pre-In-Service Date
operation and maintenance) of Weston 4, the new facilities to be used
exclusively by Weston 4, and the Common Facilities, and it
shall also include taxes and pre-certification expenses, and costs associated
with or arising out of the negligence, errors or omissions of Subcontractors or
the employees and agents of either of the Companies who are involved in the
design, engineering, procurement, licensing, permitting, interconnection,
construction, modification, repair, administrative and general, operation,
fueling or maintenance of Weston 4 or the Common Facilities. Fully-Loaded
Direct Costs and Indirect Costs include labor costs with loadings which shall
include labor costs for such tasks as recording costs and invoicing DPC, the
costs of materials and supplies, return of and on the
cost of property employed, and payments to Subcontractors and
contractors, plus all overheads directly associated
with any and all of these costs.  Any charges for goods
or services from non-

40

<PAGE>

regulated Affiliates of WPSC, however, shall not exceed the
lesser of the actual cost to the Affiliate or the fair market value of such
goods or services (based upon the PSCW's affiliated interest policies and
practices in effect on the date of this Agreement).

         (b) Weston 4, New Facilities for
the Exclusive Use of Weston 4, and Weston New and Existing Common Facilities.
For Weston 4 itself, for all new facilities that will be used solely by Weston
4, as described in Exhibit I of the Joint Operating Manual, and for the
Weston New and Existing Common Facilities, the following shall apply:

            
1. Facilities Costs. Each
Company shall be liable for and pay for all costs, other than fuel and variable
unit train costs and the costs of transmission and delivery of Weston 4 energy
after the point of interconnection with the ATC transmission system, incurred in
connection with such facilities in proportion to their Ownership Shares in
Weston 4, or in the case of the Weston New or Existing Common Facilities, in
proportion to their New Common Ownership Shares or Existing Common Ownership
Shares, as applicable. Such costs shall include, but are not limited to, costs
for site preparation, design, engineering, procurement, installation,
construction, modification, repair, ownership, insurance, pre-certification
expenses, licensing, permitting, recruiting, training, testing, administrative
and general, fees and other governmental charges, taxes other than income taxes
and assessments with respect to such facilities, accounting and records audits,
shutdown, decommissioning, demolition and disposal.

            
2. Fixed
Operation and Maintenance Costs. Operation and maintenance costs (including
without limitation pre-In-Service Date operation and maintenance costs), other
than fuel and related expenses (including without limitation ash and waste
disposal expenses) which are defined per Section 02 of the Joint Operating
Manual, will be considered fixed O&M and will be shared by the Companies in
proportion to their Ownership Shares in Weston 4. The only exception to this
arrangement will be the O&M costs associated with lime, ammonia and sorbent
injection materials, other chemicals or materials consumed in a like 

41

<PAGE>

 manner for
future environmental compliance, and their associated waste streams, and
then-applicable chemical or emission credits necessary or used to comply with
then-applicable legal requirements. These chemicals, materials and other items
will be treated similar to coal and transportation costs. Each of these
chemicals, materials and other items will be maintained in a separate inventory
account. When the product is received it will be allocated to the Companies
based upon the Weston 4 Receipts Ratio described in Section 02 of the Joint
Operating Manual and billed as part of the billing package. When the chemicals,
materials or items are used, each Company's inventory will on a monthly basis be
reduced based on the amount of product used and the costs thereof will then be
allocated to the Companies based on their respective take of that month's
energy. These costs will be identified separately through use of sub-accounts.

           
3. Fuel and Transportation Costs. Fuel and
transportation costs and expenses, unit train operation and maintenance, lease
costs, and taxes other than income taxes, will be paid initially in accordance
with the expected coal receipt ratios as defined in Section 02 of the Joint
Operating Manual. An adjustment will be made between the Companies after each
year-end to reflect the actual coal receipt ratios. The fuel expense costs for
each month are borne in accordance with each Company's take of the total net
kilowatt hours generated by Weston 4 for that month; provided, however,
that if Weston 4 generates no net kilowatt hours in any given month, any fuel
expense costs for that month shall be allocated and paid in accordance with the
Companies' respective Ownership Shares.

            
4. Property Taxes. If any of
these facilities should become subject to a property tax, special assessment or
other similar charge, other than the gross receipts tax, each Company shall be
liable for and pay all such taxes, assessments and charges in proportion to
their Ownership Shares in Weston 4, or in the case of the Weston New or Existing
Common Facilities, in proportion to their New Common Ownership Shares or
Existing Common Ownership Shares, as applicable. In addition, each Company shall
be liable for and pay all costs related to any challenge or defense of an
assessment of the facilities or of any such tax, 

42

<PAGE>

 assessment or charge in
proportion to their Ownership Shares in Weston 4, or in the case of the Weston
New or Existing Common Facilities, in proportion to their New Common Ownership
Shares or Existing Common Ownership Shares, as applicable.

        (c) Weston Generating Station
Facility Modifications Due to Construction or Existence of Weston 4. Each of
the Companies shall share any and all of the following costs in accordance with
its Ownership Share in Weston 4:

           
1. The costs of the destruction or removal of existing
facilities at the Weston Generating Station that are made necessary by the
construction of Weston 4, less salvage value;

           
2. The costs of construction or modification of facilities at
the Weston Generating Station that are made necessary by the construction of
Weston 4, although such facilities will not be used by Weston 4; and

           
3. If due to a change in Applicable Laws or the enactment or
promulgation of new Applicable Law(s) after the date of this Agreement, the
Weston Generating Station facilities become subject to increased or new
restrictions on emissions, output, operation or maintenance that affect Weston 4
and/or other generating unit(s) on the Weston site, and that are due in whole or
in part to the existence of Weston 4, the Companies shall investigate
technically feasible and commercially reasonable measures that allow compliance
with such restrictions in accordance with Good Utility Practice and the goal of
achieving best value and efficiency. The JPOC shall adopt measures that allow
compliance in accordance with Good Utility Practice and the goal of achieving
best value and efficiency, and consistent with the operation of Weston 4 as a
baseload generating unit. To the extent that such measures increase the costs of
operating or maintaining Weston Generating Station facilities that are not used
by 

43

<PAGE>

 Weston 4, the portion of such increased costs as is due to the existence of
Weston 4 shall be shared by the Companies in accordance with their Ownership
Shares.

         (d) A&G Facilities. The
following shall apply to the A&G Facilities. WPSC is entitled to receive a
rate of return at the WPSC Cost of Capital on and of its investment in general
and common plant support facilities (exclusive of the Weston New and Existing
Common Facilities), net of accumulated depreciation and associated deferred
income taxes. The Companies will generally bear all
costs of the A&G Facilities using the appropriate allocators to reflect
Weston 4's use of such facilities as detailed in this Agreement and the Joint
Operating Manual ***.

         Each Company shall pay its share of all
Fixed Charges on such facilities in proportion to its Ownership Share of Weston
4 and the proportion of the A&G Facilities allocable to the total Weston 4
usage responsibility. Such responsibility will be based on an appropriate
allocation depending upon the specific A&G Facilities and their use. The
original allocators shall be set forth in the Joint Operating Manual. The Joint
Plant Operating Committee shall modify such allocators thereafter as
appropriate. Operation and maintenance expenses (including without limitation
pre-In-Service Date operation and maintenance expenses) will be shared on the
same basis as the Fixed Charges.

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

     

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<PAGE>

  
     

  

        (e) Common Facilities. WPSC
will keep all Common Facilities operating in accordance with Good
Utility Practice and Applicable Laws
in effect from time to time. In the event that the Applicable Laws to which the
Common Facilities are subject are amended or supplemented, or new Applicable
Laws are enacted or promulgated, after the date of this Agreement, and as a
result of such changes or new Applicable Laws WPSC's costs
of compliance increase, the Companies will bear the added costs of such
compliance equitably on the basis of Weston 4's use of such facilities (or in
proportion to the Companies' respective New or Existing Common Ownership Shares
of such facilities as are co-owned, as appropriate), as detailed in this
Agreement and the Joint Operating Manual.

         (f) Land
Costs. The Site and the Easement Property are and shall continue to be
solely owned by WPSC, in fee simple. The Ground Lease, the EI Agreement and the
Easement will be entered into between the Companies effective on the Ownership
Date. The Ground Lease will provide for DPC's rights to usage of the land
occupied by Weston 4 for DPC's Ownership Share. DPC will pay rent under the
Ground Lease equal to the Fixed Charges (as calculated by WPSC from time to
time) associated with WPSC's investment in the land leased pursuant to the
Ground Lease. DPC will pay a charge associated with the Easement recognizing the
non-exclusive rights for possession and access related to the Easement Property.
If in the future WPSC acquires additional lands contiguous or near to the Weston
Generating Station that are intended to be used as buffer property for the
Weston Generating Station or for the siting of Weston New or Existing Common
Facilities, the JPOC may from time to time determine that such lands should be
subject to the terms of the Easement, and in that event, the Companies shall
amend the Easement accordingly, and DPC shall pay the charge associated with the
Easement with respect to such additional lands.

45

<PAGE>

         (g) Increased Operating Costs at
the Weston Generating Station During Construction. WPSC will manage the
construction of Weston 4 so as to reasonably minimize the impact of construction
on the operation of the balance of facilities at the Weston Generating Station,
consistent with maintenance of the Weston 4 construction budget and schedule.
DPC shall reimburse WPSC in accordance with DPC's
Ownership Share for any and all additional
operating costs, including damage to property, third party claims, cost of
replacement energy due to outages to accommodate the Weston 4 construction
and/or startup, and the like incurred by WPSC at the Weston
Generating Station during the construction of Weston
4 through the In-Service Date to
the extent same are caused by the construction and/or start-up of Weston 4, are
not reasonably recoverable from vendors or other Subcontractors working on
Weston 4, and are not due to failure
by WPSC to act in accordance with Good Utility
Practice. Recovery under this Section 8(g) shall not include any WPSC loss of
revenues or profits. In the event that WPSC will need such replacement energy
and WPSC has a reasonable opportunity to provide DPC with advance written notice
of such need, WPSC shall provide DPC with such notice, and DPC shall have the
option to supply to WPSC DPC's Ownership Share of such replacement energy provided
that DPC's supply of such replacement energy does not require WPSC to incur
additional costs and does not adversely affect system reliability or security.

        (h) Impact of Other Generating Unit(s) at Weston
Generating Station. If WPSC, by itself or together with other Person(s),
intends to add an additional generating unit to the Weston Generating Station
("New Unit"), WPSC, on behalf of the owner(s) of the New Unit, will
consult with DPC on the potential impact of the New Unit on Weston 4 and the
Common Facilities, including the potential impact on facility costs, operations
and maintenance costs, permit provisions, operating and dispatch procedures and
transmission. DPC will not be charged for any expenditures resulting from the
construction of the New Unit from which it will not benefit.
Facility costs resulting from the addition of the New Unit will be
addressed in a manner that corresponds to the treatment of impacts to the Weston
Generating Station caused by the 

46

<PAGE>

 addition of Weston 4 under Section 8(g). On
behalf of the owner(s) of the New Unit, WPSC shall reimburse DPC for DPC's share
of any and all additional Weston 4 operating costs, including damage to
property, third party claims, and for DPC's cost of replacement energy due to
outages of Weston 4 to accommodate the New Unit construction and/or startup, and
the like, to the extent that same are caused by the construction and/or startup
of the New Unit, are not reasonably recoverable from third Persons, and are not
due to failure by DPC to act in accordance with Good Utility Practice. Recovery
under this Section 8(h) shall not include any DPC loss of revenues or profits. In
the event that DPC will need such replacement energy and DPC has a reasonable
opportunity to provide WPSC with advance written notice of such need, DPC shall
provide WPSC with such notice, and WPSC shall have the option to supply to DPC
such replacement energy provided that the cost to DPC of having WPSC
supply the replacement energy is less than or equal to DPC's cost to supply the
replacement energy, and provided that WPSC's supply of such replacement
energy does not adversely affect system reliability or security.

    (i) Changes to Existing and New Common Ownership
Shares. Weston 4's initial MAIN summer capacity rating is expected to be
established in the year in which the In-Service Date occurs. If this capacity
rating is either less than 501 MW, or more than 561 MW, the JPOC shall
re-calculate the Existing and New Common Ownership Shares based upon the
allocation principles set forth in this Agreement and the Joint Operating
Manual, and based upon Weston 4's established summer capacity rating and the
then-most recent summer capacity ratings of the other generating units at the
Weston Generating Station and (to the extent applicable) at WPSC's Pulliam
Station. One Company shall thereafter sell to the other Company an appropriate
share of its interest in the affected Weston Existing and New Common Facilities,
and the other Company shall buy said share, in accordance with the JPOC's
re-calculation. In addition, if a New Unit is added to the Weston Generating
Station (or to WPSC's Pulliam Station), or if a generating unit at the Weston
Generating Station (or at WPSC's Pulliam Station) 

47

<PAGE>

 is retired, Weston 4's
proportionate usage of the various Common Facilities will likely change. In any
such event, based upon the cost allocation principles set forth herein and in
the Joint Operating Manual and based upon the then-most recent summer capacity
ratings of the generating units at the Weston Generating Station and (to the
extent applicable) at WPSC's Pulliam Station, the JPOC shall adjust affected
cost allocations on an equitable basis and shall, if and as appropriate,
identify what changes should be made to the Companies' respective Existing
Common and New Common Ownership Shares to reflect that usage. One Company shall
thereafter sell to the other Company an appropriate share of its interest in the
affected Weston Existing and New Common Facilities, and the other Company shall
buy said share, in accordance with the JPOC's determination. The sales price of
any share of a Company's interest in the Weston Existing and New Common
Facilities sold pursuant to this section or pursuant to Section 12 below shall
be determined as follows: the *** of the Weston Existing or New Common
Facilities in question immediately prior to the sale shall be divided by the New
or Existing Common Ownership Share of WPSC applicable to those facilities
immediately prior to the sale. The result shall then be multiplied by the
following quantity: [(the New or Existing Common Ownership Share of DPC in such
facilities after the sale takes place, as determined by the JPOC) minus (the New
or Existing Common Ownership Share of DPC in such facilities immediately prior
to the sale)]. If the resulting product is a positive number, DPC shall pay that
amount of dollars to WPSC (in this situation, DPC is acquiring a larger
percentage interest in those Weston New or Existing Common Facilities). If the
resulting product is negative, WPSC shall pay the absolute value of that amount,
in dollars, to DPC (in this situation, WPSC is acquiring a larger percentage
interest in those Weston New or Existing Common Facilities).

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

     

48

<PAGE>

  
     

  

    (j) Cost
Estimates. WPSC will provide DPC with reports of estimated costs as required
by the Joint Operating Manual, together with estimated time schedules for
material events with regard to Weston 4 completion and operation. Such reports
shall, to the extent possible, reflect revised estimates as they are
established.

    (k) Insurance. The Joint Operating
Manual sets forth provisions governing the allocation of insurance policy
premiums and self-insured retentions between the Companies, and Section 06
thereof describes the types of policies that will be applicable to Weston 4.

    (l) Changes to Cost Allocation Methodologies. If WPSC
from time to time proposes to change an existing cost allocation methodology, or
to impose a new cost allocation methodology, or to change the allocated
percentage of ownership of the Weston New Common Facilities or the Weston
Existing Common Facilities under Section 8(i) above or Section 12 below, it
shall first provide the JPOC with a written explanation of the need and purpose
for the allocation methodology change or addition or ownership change, which
shall include as applicable an estimate of the effect such change or addition
will have on the annual costs to the Companies and a description of how the
proposed new or changed methodology fairly allocates costs. If the proposed
ownership change or methodology change or addition (the "Subject
Change") is adopted by the JPOC over DPC's objection, the Subject Change
shall be applied and implemented upon its adoption by the JPOC, but the Subject
Change may be challenged by DPC under the circumstances described in the next
two sentences. If such Subject Change, either individually or in
conjunction with any other proposed ownership change(s) or methodology change(s)
or addition(s) that have been adopted by the JPOC over DPC's objection during
the 365-day period immediately preceding the date the Subject Change is adopted
("Other Changes"), may reasonably be expected to result in an
imposition on DPC of additional costs exceeding $750,000 per year (when compared
to the costs that would have been imposed upon 

49

<PAGE>

 DPC in the absence of the Subject
Change and the Other Change(s), if any), such Subject Change and the Other
Change(s), if any, may be challenged by DPC through the dispute resolution
mechanism set forth in Section 21 if the Subject Change or Other Change(s):
(i) are inconsistent with the cost allocations expressly stated in this
Agreement, (ii) are commercially unreasonable within the electric utility
industry, (iii) would result in an inequitably disproportionate allocation of
costs to DPC, or (iv) if adopted, would result in the cost allocation
methodologies under this Agreement and the Joint Operating Manual, considered in
the aggregate, being inconsistent with the cost allocations expressly stated in
this Agreement, or being commercially unreasonable within the electric utility
industry, or causing an inequitably disproportionate allocation of costs to DPC.
Any such challenge must be raised by DPC, if at all, within thirty (30) calendar
days after the Subject Change is adopted by the JPOC and reflected in a billing
to DPC; provided, however, that if one or more other proposed
ownership change(s) or methodology change(s) or addition(s) are adopted by the
JPOC over DPC's objection during the 365-day period immediately following the
date the Subject Change is adopted (each, a "Subsequent Change"), the
Subject Change (if it was not challenged previously) may be challenged through
the dispute resolution mechanism set forth in Section 21 if the Subject
Change and the Subsequent Change(s) may reasonably be expected to result in an
imposition on DPC of additional costs exceeding $750,000 per year (when compared
to the costs that would have been imposed upon DPC in the absence of such
Subject Change and Subsequent Change(s)) and if the Subject Change
or the Subsequent Change(s) would meet the requirements of clause (i), (ii),
(iii) or (iv) of this Section 8(l). Notwithstanding anything to the contrary
herein, once a proposed ownership change or methodology change or addition has
been challenged pursuant to this Section 8(l), it may not be challenged again,
nor may the expected cost impact of any change or addition that has previously
been combined with the expected cost impact of any other change(s) or addition(s)
in order to reach the $750,000 threshold and allow a challenge to occur be
subsequently combined with the expected cost impact of other change(s) or
addition(s) to reach the $750,000 threshold in order to allow a subsequent
challenge of any change(s) or 

50

<PAGE>

addition(s). If any such cost allocation
methodology change or addition or ownership percentage change is rejected or
modified through the dispute resolution process, the change or addition shall be
deemed to have been rejected or modified (as the case may be) retroactively, as
of the date of its original implementation, and any amounts paid by the
Companies in excess of the amounts that would have been due under the prior
methodology or ownership percentage (if the change or addition was rejected
through dispute resolution) or under the modified methodology or ownership
percentage (if the change or addition was modified through dispute resolution)
shall be repaid with interest at the rates applicable to billings and refunds
under Section 03 of the Joint Operating Manual. The failure to challenge a cost
allocation methodology addition or change or ownership percentage change
pursuant to this Section 8(l) shall not preclude any later assertion under the
audit rights under this Agreement that the cost allocation methodology addition
or change or ownership percentage change was improperly applied; any such
assertion, however, may challenge only whether the change or addition has been
improperly applied, and may not challenge the change or addition itself. The
dollar thresholds set forth in this Section 8(l) shall be subject to escalation
on an annual basis beginning in 2005 in accordance with changes in the GDP-IPD
during the preceding calendar year (for example, if the GDP-IPD increases by 1%
during 2004, the dollar thresholds in this Section 8(l) shall be $757,500 during
2005, and if the GDP-IPD then increases by 2% during 2005, the dollar thresholds
in this Section 8(l) shall be $772,650 during 2006, and so on).

    (m) As of the date of this Agreement, WPSC intends to dispose
of the ash and other wastes generated by the operation of Weston 4 at one or
more third-party commercial disposal facilities; to the extent this occurs, the
Companies will share disposal-related costs as provided in this Agreement and
the Joint Operating Manual. If, however, at some time in the future the JPOC
determines that it is necessary or appropriate for Weston 4 ash or other wastes
to be disposed of at the Legner Facility, WPSC shall have the option to require
DPC to purchase a share of the Legner Facility as a tenant in common, and if
WPSC exercises this option, DPC 

51

<PAGE>

shall purchase such share; provided, however,
that DPC shall be given a reasonable opportunity to conduct reasonable
environmental due diligence with respect to the Legner Facility, and to address
with WPSC any material concerns that are identified during such due diligence
effort, prior to purchasing such share. The share to be purchased shall be
determined by the JPOC, taking into account what other generating unit(s), if
any, are or will be utilizing the Legner Facility in common with Weston 4. The
sales price of the share shall be based upon the *** of the Legner Facility.
Following any such sale and purchase, the Legner Facility shall be a Weston New
Common Facility for purposes of this Agreement and the other contracts between
the Companies associated herewith, including but not limited to the EI
Agreement, and the EI Agreement shall be amended accordingly. If WPSC exercises
the option set forth in this section, the Companies shall cooperate in good
faith to obtain all access rights, permits, licenses, and modifications to
permits and licenses necessary to allow WPSC to sell, and DPC to purchase, own
and utilize for purposes of disposal of Weston 4 wastes, a share of the Legner
Facility.

    Section 9. Books and Records.
As a co-owner of Weston 4, DPC is entitled to collect information, and to
receive information collected, maintained or generated by WPSC, as is necessary
to monitor DPC's investment, satisfy DPC's reporting requirements to
governmental and other entities, and verify the services provided by WPSC and
their costs and quantity, on both an historical and forecasted basis, all as
provided in this Agreement. Books of account and records containing details of
the items of cost applicable to the design, engineering, procurement, licensing,
permitting, interconnection, construction, administration, taxes, fueling,
transportation, modification, repair, operation and maintenance of Weston 4 or
of the Common Facilities shall

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

52

<PAGE>

  
     

  

be kept by WPSC and shall, except for any attorney-client
privileged materials, be open to examination by DPC during normal business hours
after reasonable notice to WPSC. To the extent that any such books of account or
records are kept by DPC, they shall, except for any attorney-client privileged
materials, be open to examination by WPSC during normal business hours after
reasonable notice to DPC. WPSC shall furnish DPC, to the extent of its interest
affected, with non-privileged summaries or counterparts of such books of account
and records as may be necessary to satisfy all applicable regulatory
requirements. As promptly as practicable after the end of each month, WPSC shall
send to DPC a statement in reasonable detail of all expenditures for such month
and the amount of each Company's share thereof.

    Section 10. Accounting and Audit
Responsibilities.

    (a) Accounting. All expenditures in respect of Weston
4 and the Common Facilities shall be accounted for in accordance with the
Uniform System of Accounts prescribed by the PSCW for Public Utilities and
Licensees (Class A and B Electric Utilities). WPSC will undertake commercially
reasonable efforts to supply DPC with such records as may be required to satisfy
the accounting requirements of the RUS or other applicable regulatory
requirements.

    (b) Contract Administration Review. WPSC shall arrange
for a contract administration review consistent with the scope of work attached
to this Agreement as Attachment 8 by a firm unanimously selected by the JPOC,
with the cost of such review, which shall not exceed $50,000 in the aggregate,
to be shared equally between WPSC and DPC. This review will be performed once,
and the review period will cover either the first complete calendar year after
the In-Service Date, or the second complete calendar year after the In-Service
Date, at DPC's option; provided, however, that the JPOC may by a
vote of the majority of Ownership Shares decide whether or not to conduct
similar, subsequent review(s).

    (c) Financial Audit. Each Company shall have the right
from time-to-time to conduct an audit, at its own cost, of the financial monthly
billings under this Agreement, including audits of 

53

<PAGE>

 all books, records and other
documents regarding operating costs and the cost of construction sufficient to
allow it to determine that such costs attributed to Weston 4 or the Common
Facilities by WPSC are consistent with this Agreement. For purposes of this
Agreement, the financial audit will be defined as a review and examination
performed by the Company's own accounting and internal audit staff or by an
agent or representative of the Company.

    No payment made by DPC shall constitute a waiver of the right
of DPC to question or contest in good faith the correctness of any charge or
credit under this Agreement, and no acceptance of partial payment by WPSC shall
constitute a waiver of WPSC's right to demand payment in full of all amounts
that WPSC in good faith believes are owed to it. WPSC shall cooperate with DPC
in the conduct of any such audit and, subject to the applicable regulations of
any regulatory agency having jurisdiction, provide DPC reasonable access to all
contracts, records and other documents relating to Weston 4 or related Common
Facilities with due regard for any confidentiality agreements between WPSC and
third parties, or between WPSC and DPC.

    Audit activity shall be coordinated through the respective
Companies' accounting departments in order to promote efficiency and reduce
costs. Audits shall be conducted only after reasonable notice to the respective
Company and during normal business hours.

    (d) Audit and Review Adjustments. If, as a result of
such review(s) or audits, errors are discovered in the amount or allocation of
any costs which have been billed under the Agreement, those costs shall be
adjusted to correct the error and reimbursements, or additional payments, as the
case may be, including a payment for interest as calculated per procedures
specified in Section 03 of the Joint Operating Manual, shall be made during the
next normal billing cycle following discovery of the error(s). Retroactive
adjustments of costs or allocations based upon such review(s) or audits shall be
limited to the period of two (2) years after the cost or allocation 

54

<PAGE>

 was
originally billed to DPC by WPSC, after which time the correctness of such costs
or allocations shall be conclusively presumed correct.

    WPSC will, within 30 calendar days after completion, make
available to the other Company copies of any audits, related only to Weston 4 or
the Weston New or Existing Common Facilities, by its own internal audit
department, independent external auditors, or auditors for any regulatory body
or jurisdiction. DPC will make available to WPSC copies of any audits, related
only to Weston 4 or the Weston New or Existing Common Facilities, conducted by
its staff or external auditors or consultants or regulatory bodies and will
provide such copies to WPSC within 30 calendar days after the final audit report
is issued.

    WPSC will provide to the other Company as soon as such
documents become available, variance analyses comparing monthly and year-to-date
actual billings with the respective budget items for Weston 4 and the Weston New
and Existing Common Facilities in accordance with the provisions of the Joint
Operating Manual.

    WPSC shall inform DPC of any significant or material
deficiency in any WPSC internal control which relates to any process or account
that may affect the billing process under this Agreement that WPSC discovers as
a consequence of WPSC's compliance with section 404 of the Sarbanes-Oxley Act of
2002 (Management Report on Controls).

    Section
11. Construction Period Invoices; Funds. (a) DPC shall promptly notify
WPSC as soon as DPC has waived the Financing Contingency and the Transmission
Contingency, and provide WPSC at least 90 calendar days'
prior written notice of the date planned for DPC's closing on its interim or
permanent financing. WPSC and DPC shall also promptly notify each other when
they have each received all Required Permits. Assuming DPC gives WPSC notice of
the impending closing as required above, then at least 60 calendar days prior to
the date planned for the closing on DPC's interim or permanent financing, WPSC
shall provide or make available to DPC all such information described in Section
18 of the Joint 

55

<PAGE>

 Operating Manual under the heading "Information for DPC's
Financing", as provided in that section. On the earlier of (i) the date DPC
closes on its interim or permanent financing; or (ii) the date that is ten (10)
business days prior to ***, WPSC shall invoice DPC for its share of all costs
determined in accordance with Section 8 incurred in connection with the design,
engineering, procurement, pre-certification expenses, licensing, permitting,
interconnection, administrative and general, fueling, transportation,
construction, operation and maintenance of Weston 4 and the Weston New Common
Facilities, or incurred in connection with those modifications of the Weston
Existing Common Facilities that are being made in conjunction with and as part
of the Weston 4 project, prior to the date of WPSC's invoice, plus a return on
those costs at the WPSC Cost of Capital pursuant to Section 3(c), and for the
Fixed Charges associated with WPSC's investment in the Site and the Easement
Property calculated from the date construction begins on Weston 4 until the date
the Companies execute the Ground Lease and the Easement. DPC shall pay said
invoice in full via ACH or electronic funds transfer to an account specified by
WPSC within ten (10)
business days after the receipt of WPSC's invoice.
It is understood and agreed that carrying costs shall continue to accrue on the
costs at the then-applicable WPSC Cost of Capital until the invoice is paid by
DPC in full.

    (b) After issuing the initial invoice
described in Section 11(a), WPSC shall bill DPC on a weekly basis through the In-Service
Date, and thereafter until all construction-related costs have been invoiced,
for DPC's share of all cash expenditures actually incurred in connection with
the design, engineering, procurement, licensing, permitting, interconnection,
administrative and general, fueling, transportation, construction, operation and
maintenance of Weston 4 and the Weston New Common Facilities, or incurred in
connection with those modifications of the

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

     

56

<PAGE>

Weston Existing Common Facilities that are being made in
conjunction with and as part of the Weston 4 project, since the immediately
preceding invoice. WPSC will make arrangements to give DPC prompt access to all
Subcontractor invoices that individually exceed $10,000. Information materials
supporting the invoices will be provided or made available to DPC in accordance
with the second paragraph of Section 5 of this Agreement. For any individual
Subcontractor invoice which exceeds $2,000,000 in amount, WPSC will issue a
separate invoice showing DPC's share and a due date that coincides with WPSC's
required payment date to the Subcontractor; DPC shall pay to WPSC via ACH or
electronic funds transfer to an account specified by WPSC an amount equal to
DPC's share of each such Subcontractor invoice on or prior to the date WPSC is
required to pay the Subcontractor's invoice. WPSC will invoice DPC weekly for
all other Subcontractor invoices that have been paid by WPSC, and WPSC will
invoice DPC monthly for all other WPSC direct and indirect costs incurred by
WPSC, and DPC shall pay WPSC in full via ACH or electronic funds transfer to an
account specified by WPSC within ten (10) business days after each such WPSC
invoice is received, but payments made after the date that is five (5) business
days after the date of receipt, but on or before the date that is ten (10)
business days after the date of receipt, shall be subject to interest at the
90-day non-financial commercial paper rate as of the last business day of the
immediately preceding calendar year, as published in the Federal Reserve
Statistical Release on the website identified in Section 03 of the Joint
Operating Manual. Past due payments shall bear interest at the rate specified in
Section 14 of this Agreement.

    As described in Section 8, on an ongoing basis WPSC shall
bill DPC for, and DPC shall pay its share of, non-construction related costs
incurred by WPSC under the post-In-Service
Date procedures specified in the
Joint Operating Manual.

 

57

<PAGE>

 

    (c) Ten (10) business days prior to the Existing Common
Ownership Date, WPSC shall invoice DPC for its share (based upon DPC's Existing
Common Ownership Share) of the *** Weston Existing Common Facilities (not
including the costs of those modifications to the Weston Existing Common
Facilities for which DPC has previously paid its share pursuant to Section 11(a)
or (b)) and of WPSC's unrecovered costs associated with the retirement of assets
due to the construction of Weston 4. DPC shall pay said invoice in full via ACH
or electronic funds transfer to an account specified by WPSC within ten (10)
business days after the receipt of WPSC's invoice.

    (d) As part of its right and
responsibility to operate and maintain Weston 4 and the Weston New and Existing
Common Facilities, WPSC is required to expend considerable capital each month on
a current and continuing basis. In order to reimburse WPSC for such expenditures
in accordance with the terms of this Agreement, DPC shall make an initial cash
deposit at the time, in the amount and in the manner specified in Section 14 of
the Joint Operating Manual. WPSC shall determine the amount of this initial
operating deposit based on the forecasted monthly expenditures for Weston 4 and
the Weston New and Existing Common Facilities, excluding insurance and purchased
natural gas costs. Subsequent to the initial calculation of this operating
deposit, DPC will be billed adjustments to this deposit as described in Section
14 of the Joint Operating Manual. WPSC shall determine these adjustments in
accordance with the procedures outlined in Section 14 of the Joint Operating
Manual.

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

58

<PAGE>

  
     

  

    Section 12. Operation and
Maintenance. WPSC shall be the operating owner of Weston 4. Subject to
Sections 6 and 7 hereof and the
provisions in this Agreement dealing with Major Operating Decisions, WPSC shall
have the sole right and responsibility to operate, maintain and procure fuel for
Weston 4. WPSC shall also have the sole right and responsibility to operate and
maintain the Common Facilities.

    Weston 4 will be directly operated and
maintained by WPSC, and WPSC shall procure fuel for Weston 4, in accordance with
Good Utility Practice, the provisions of this Agreement and the Joint Operating
Manual, and the decisions of the Joint Plant Operating Committee. Except to the
extent the express terms of this Agreement or the Joint Operating Manual, or the
decisions of the JPOC, require otherwise, WPSC shall operate and maintain Weston
4 with the same care, procedures and standards that it uses
in the operation of its own wholly-owned generating facilities,
utilizing its own employees and supervisory personnel, any independent technical
advisors or other Subcontractors which it may select, in the manner determined
by WPSC to be best under the circumstances. During operating conditions which
WPSC deems abnormal, WPSC shall take such action as it deems appropriate to
safeguard equipment, employees and third Persons and to maintain service of
Weston 4. Except to the extent WPSC determines otherwise, the workers employed
in the operation and maintenance of Weston 4 and the Common Facilities shall be
employees of WPSC. Notwithstanding anything to the contrary in this Agreement,
WPSC shall be solely responsible for supervising, directing and controlling the
activities of all such workers and the details of their work.

    DPC may elect, at its sole cost and responsibility, to have
DPC staff member(s) or representative engineer(s) on-site to observe and provide
WPSC with input on the operation and maintenance of Weston 4 and on safety,
training and fuel procurement practices/procedures. WPSC shall consider any such
input in good faith, but shall not be required to act upon such 

59

<PAGE>

 input unless it
determines in its reasonable discretion and in accordance with Good Utility
Practice that it is appropriate to do so.

    During operation and maintenance of Weston
4, WPSC shall maintain property insurance coverage for Weston 4 through the WPS
Resources corporate property insurance program (or will make arrangements for
comparable coverage), shall maintain workers' compensation insurance with
respect to its employees working at Weston 4 to the extent required by
Applicable Laws, and shall maintain such liability insurance coverage as is in
accordance with Good Utility Practice. The cost of these insurance coverages
shall be shared by the Companies as provided in this Agreement and the Joint
Operating Manual.

    Notwithstanding anything to the
contrary contained in this Section 12 or elsewhere in this Agreement, none of
the following actions (which shall be referred to herein as "Major
Operating Decisions") may be taken without the unanimous approval of the
Joint Plant Operating Committee: (i) abandonment, Facility Lay-Up, permanent
shutdown, or total or substantial demolition or disposal of Weston 4 after the
In-Service Date; (ii) any specific project occurring after the In-Service Date
that would reduce the rated megawatt capability of Weston 4 by more than 30 MW
(specifically excluding expected variations due to normal operating constraints,
seasonal variations, and other temporary unit deratings); (iii) approval of a
capital expenditure budget for Weston 4 for any calendar year after the
In-Service Date if capital cash outlays during

 

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<PAGE>

said calendar year are budgeted to exceed $***; (iv) a
material physical change in, or change in the method of operation of, Weston 4
after the In-Service Date, if WPSC has sought and the appropriate local, state
or federal regulatory agency has advised WPSC in writing that such a change
would, under Applicable Law, constitute a modification of Weston 4, and WPSC
determines under Applicable Law that such a modification would require
installation of Best Available Control Technology, Lowest Achievable Emission
Rate controls, or other emission-related controls costing in excess of $***; provided,
however, that WPSC shall not be required to request or obtain any such
advice from any local, state or federal regulatory agency; or (v) entry into any
contract or project for a substantial repair, refurbishment, modification or
improvement to Weston 4 after the In-Service Date, but only if the aggregate
estimated cost of such contract or project would exceed $***; provided, however,
that if the JPOC does not unanimously approve of a capital expenditure budget of
the type described in clause (iii) above that has been advocated by WPSC, or a
change of the type described in clause (iv) above that has been advocated by
WPSC, or a contract or project of the type described in clause (v) above that
has been advocated by WPSC, or, in any such case, if the JPOC has unanimously
approved such budget, change, contract or project but DPC is unable to pay its
full Ownership Share therefor, then WPSC shall nonetheless have the right in its
discretion to proceed with such budgeted capital expenditures, change, contract
or project at the sole cost of WPSC (or, if DPC is willing to contribute a
portion of such cost, at WPSC's cost less DPC's contribution), and if WPSC does
proceed with such budgeted capital expenditures, change, contract or project,
WPSC's Ownership Share shall be increased and DPC's Ownership Share shall be
decreased in an amount appropriate to reflect that WPSC has paid an amount for
such budgeted capital expenditures, change, contract or project that exceeds
WPSC's Ownership Share of the reasonable costs of

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

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such capital expenditures, change, contract or project. The
changes in the Companies' respective Ownership Shares shall be determined in
accordance with the methodology set forth in Attachment 9 to this Agreement, and
DPC shall thereafter transfer to WPSC, and WPSC shall accept from DPC, title to
an appropriate share of DPC's interest in Weston 4 in accordance with said
determination. If WPSC's Ownership Share is increased, and DPC's Ownership Share
is decreased, pursuant to this paragraph, then the JPOC shall also re-calculate
the Existing and New Common Ownership Shares based upon the allocation
principles set forth in this Agreement and the Joint Operating Manual, and based
upon the then-most recent summer capacity ratings of the generating units at the
Weston Generating Station and (to the extent applicable) at WPSC's Pulliam
Station, and utilizing in the calculations the Companies' respective
Post-Project Ownership Shares (as that term is used in Attachment 9 hereto) in
Weston 4. DPC shall thereafter sell to WPSC an appropriate share of its interest
in the Weston Existing and New Common Facilities, and WPSC shall buy said share,
in accordance with the JPOC's re-calculation. Notwithstanding the foregoing,
WPSC as the operating co-owner of Weston 4 may in emergency or exigent
circumstances take such actions as it deems necessary to protect lives and
property from injury or damage, without DPC's approval (but in such
circumstances WPSC shall notify DPC of the actions taken as soon as is
practical, and within no longer than two (2) business days). The dollar amounts
identified in clauses (iii), (iv) and (v) above shall be subject to escalation
on an annual basis beginning in 2005 in accordance with changes in the GDP-IPD
during the preceding calendar year (for example, if the GDP-IPD increases by 1%
during 2004, the dollar amounts shall be $***, $*** and $***, respectively, in
2005).

_______________

    *** Indicates that material has been omitted and confidential treatment
    has been requested therefore. All such omitted material has been filed
    separately with the Securities and Exchange Commission pursuant to Rule
    24b-2.

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    Section 13. Limitation of Liability.
NEITHER COMPANY SHALL BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT
OR CONTINGENT DAMAGES WHATSOEVER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, THE JOINT OPERATING MANUAL, THE GROUND LEASE OR THE EASEMENT, OR THE
PERFORMANCE OR BREACH OF ANY SUCH CONTRACT, REGARDLESS OF WHETHER IT HAS BEEN
INFORMED OF THE POSSIBILITY OF SUCH DAMAGES; provided that the
foregoing limitation shall not limit, restrict or affect either Company's
obligation to pay for its share of the costs, liabilities to third Persons, and
damages incurred in the design, engineering, procurement, licensing, permitting,
pre-certification activities, interconnection, construction, administrative and
general, modification, repair, transportation, fueling, operation, maintenance,
shutdown, decommissioning, demolition and disposal of Weston 4 and the Common
Facilities pursuant to the cost-sharing, allocation and payment provisions set
forth in this Agreement and the Joint Operating Manual; it is understood and
agreed, however, that the foregoing limitation shall apply to the portion
of any such costs, liabilities to third Persons and damages that is determined
to have been caused by the intentional misconduct of WPSC, or by the reckless
misconduct of WPSC's Weston 4 personnel at the superintendent (or equivalent)
level or higher, or by the reckless misconduct of WPSC corporate officers or
corporate management personnel at the superintendent level or higher who are
responsible for setting policy at Weston 4. Without limiting the generality of
the foregoing, and without limiting the terms of the EI Agreement, except as
provided in the cost-sharing, allocation and payment provisions of this
Agreement and the Joint Operating Manual as provided immediately above,
neither Company shall be liable to the other Company for errors or delays in the
design, engineering, procurement, licensing, permitting, pre-certification
activities, interconnection, construction, administrative and general,
modification, repair, transportation, fueling, operation or maintenance of
Weston 4 or the facilities utilized by Weston 4 (either 

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 exclusively or in common
with other generating unit(s) at the Weston Generating Station), loss of
generation capacity, reduced generation capacity, reduced output, cost of
replacement energy or capacity, or down-time, shut-down or slow-down costs.
Notwithstanding anything to the contrary herein, neither Company shall be liable
for claims by the other Company for lost profits or lost revenues, or for claims
of the other Company's customers for cost of replacement energy or capacity,
down-time, shut-down or slow-down costs, or lost profits or lost revenues.

    Section 14. Disputed Payments;
Default.

    (a) Disputed Payments. If either Company (the
"Disputing Company") in good faith disputes the amount owing by it
under any invoice, bill or other demand for payment issued by the other Company
(the "Non-Disputing Company") under this Agreement or any contract
entered into pursuant to this Agreement (including but not limited to the Ground
Lease, the Easement and the EI Agreement), then the Disputing Company
must take the following steps if it intends to withhold the amount disputed
pending resolution of the dispute: (i) the Disputing Company shall pay to the
Non-Disputing Company the undisputed portion of the invoice, bill or demand on
or before the due date therefor, and contemporaneously shall provide the
Non-Disputing Company with a statement that the Disputing Company disputes the
remainder of the invoice, bill or demand and intends to escrow the disputed
portion; (ii) the Disputing Company shall deposit a dollar amount equal to the
disputed portion of the invoice, bill or demand with the Escrow Agent pursuant
to the Escrow Agreement on or before the day that is five (5) calendar days
after the due date for the disputed payment; and (iii) the Disputing Company
shall also within ten (10) calendar days after said due date provide the
Non-Disputing Company with a written notice of dispute that includes reasonable
substantiation of the Disputing Company's position and a calculation identifying
the amount that the Disputing Company in good faith believes it owes. If the
Disputing Company (or DPC's Secured Lender(s) as provided in Section 14(c)(ii))
timely takes these steps, the dispute shall be submitted to dispute resolution
pursuant to Section 21, and the Disputing Company shall not be deemed to be in
default under the applicable 

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 contract for failure to make payment in full,
pending resolution of the dispute. If the disputed amount is deposited with the
Escrow Agent, that amount shall remain in escrow until the Escrow Agent receives
a written notice executed by both Companies, or a ruling of the arbitrators
pursuant to Section 21, at which time the Escrow Agent shall disburse the
escrowed funds in accordance with said notice or ruling.

    The Companies shall implement the determination reached
through the dispute resolution process. Without limiting the foregoing, if and
to the extent the dispute resolution process determines that the disputed amount
was owed to the Non-Disputing Company, then the relevant portion of the
disputed amount shall be promptly disbursed by the Escrow Agent to the
Non-Disputing Company, together with interest on said portion at a per annum
rate equal to the lesser of the prime rate of interest as published from time to
time in The Wall Street Journal plus one percent, or the highest rate then
permitted under Applicable Law, from the original due date until the date
payment is actually received by the Non-Disputing Company (and if the portion of
the interest to be disbursed by the Escrow Agent to the Non-Disputing Company in
accordance with the last sentence of this paragraph is insufficient for this
purpose, the Disputing Company shall pay the deficiency to the Non-Disputing
Company within ten (10) calendar days after receipt of a demand therefor). If
and to the extent the dispute resolution process determines that the disputed
amount was not owed to the Non-Disputing Company, then the relevant
portion of the disputed amount shall be promptly disbursed by the Escrow Agent
to the Disputing Company, together with interest on said portion at a per annum
rate equal to the lesser of the prime rate of interest as published from time to
time in The Wall Street Journal plus one percent, or the highest rate then
permitted under Applicable Law, from the date the amount was deposited with the
Escrow Agent until the date the disbursement is received by the Disputing
Company (and if the portion of the interest to be disbursed by the Escrow Agent
to the Disputing Company in accordance with the 

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 last sentence of this paragraph
is insufficient for this purpose, the Non-Disputing Company shall pay the
deficiency to the Disputing Company within ten (10) calendar days after receipt
of a demand therefor). Interest earned on amounts deposited in escrow shall be
disbursed by the Escrow Agent to the Companies in the same proportion as the
amount deposited in escrow is disbursed to the Companies in accordance with the
determination of the dispute resolution process; provided, however,
that interest on escrowed funds paid to a Company shall be credited against the
interest otherwise owed to it by the other Company under this subsection.

    Consistent with Section 10 above, either Company may also in
good faith dispute pursuant to Section 21 any amount paid by it under any
invoice, bill or other demand for payment issued by the other Company,
notwithstanding the timely payment of such invoice, bill or other demand,
provided that the dispute is asserted in writing to the other Company within the
period of two years after the date of the invoice, bill or demand in question.
If as a result of any such dispute it is determined that error(s) have been made
in the amount or allocation of costs that have been billed and paid, those costs
shall be adjusted to correct the error(s), and reimbursements or additional
payments, as the case may be, including a payment for interest as calculated per
procedures specified in Section 03 of the Joint Operating Manual, shall be made
during the next normal billing cycle following the determination that error(s)
were made.

    If either Company makes a demand for payment on the other
Company for alleged default of a non-payment provision of this Agreement or any
contract entered into pursuant to this Agreement, and a final judgment or
arbitral award has not been entered ordering payment of monetary damages for
such alleged default, then the Company upon which the demand had been made, if
it wishes to dispute the demand or alleged default, shall not be required to
deposit an amount equal to the amount demanded with the Escrow Agent in order to
dispute such demand 

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 or alleged default. The dispute shall be submitted to
dispute resolution pursuant to Section 21, and the Company disputing the demand
or alleged default shall not be deemed to be in default under the applicable
contract for failure to make payment in full, pending resolution of the dispute.

    (b) Failure To Pay or Perform by DPC. (i) If DPC fails
to make when due any payment required by, or defaults on any other obligation
under, this Agreement or any other contract entered into pursuant to this
Agreement (including but not limited to the Ground Lease, the Confidentiality
Agreement or the Easement), DPC shall have fifty (50) calendar days after
written notice of such failure or default is received from WPSC in which to cure
such failure or default (except that this 50-calendar day period may be reduced
as provided in Section 14(b)(ii)).

           
(ii) Subject to Section 14(a), in the event that DPC fails to
make when due any payment required by this Agreement or by any contract entered
into pursuant to this Agreement (including but not limited to the Ground Lease
or the Easement) to be made to WPSC, the past due payment shall bear interest
from the due date until paid at a per annum rate equal to the lesser of the WPSC
Cost of Capital or the highest rate then permitted under Applicable Law. If any
such failure to make payment when due has continued for more than
fifty (50) calendar days after written notice of such failure is received
by DPC from WPSC and for more than the additional fifteen (15)-day period set
forth in Section 14(c)(ii), then DPC shall cease to have any rights in the
capacity or energy of Weston 4 until such time as the failure has been
completely cured, and WPSC shall have the right to dispatch and sell DPC's share
of the capacity and energy of Weston 4; provided, however, that
any profits earned on sales by WPSC of DPC's share of capacity and energy shall
be retained by WPSC and credited to the outstanding liability owed by DPC to
WPSC; and provided, further, that this right to dispatch and sell
DPC's 

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 share of the capacity and energy of Weston 4 shall cease immediately when
DPC's liability to WPSC resulting from DPC's failure to make payment has been
fully satisfied. If more than two failures by DPC to make payment when due under
this Agreement or under any contract entered into pursuant to this Agreement
occur in any twelve (12)-month period (not counting any situation in which DPC
does not make a payment in full because it is disputing that payment in good
faith pursuant to Section 14(a)), then beginning with the third such failure the
fifty (50)-day cure period set forth in this paragraph and in Section 14(b)(i)
shall be reduced to ten (10) calendar days, and DPC's cure period shall remain
at ten (10) calendar days unless and until DPC timely makes all payments under
this Agreement and each contract entered into pursuant to this Agreement for a
period of two (2) consecutive years. For purposes of this paragraph, a failure
by DPC to make payment when due under this Agreement or under any contract
entered into pursuant to this Agreement shall include, without
limitation, a failure by DPC to make when due a payment under any invoice, bill
or demand for payment issued by WPSC, or a failure by DPC to pay any judgment or
arbitral award for monetary damages for default of any provision, term or
condition of this Agreement or any contract entered into pursuant to this
Agreement within the time period specified in such judgment or arbitral award.

           
(iii) No such failure referred to in Section 14(b)(i) or
(ii) shall relieve DPC from any of its obligations hereunder or under any
contract entered into pursuant to this Agreement. The remedies of WPSC
identified in this Section 14(b) are not intended to be exclusive or to
limit any other rights or remedies that WPSC may have under the circumstances
(except that (A) the circumstances in which DPC will cease to have any rights in
the capacity and energy from Weston 4 shall be limited to those specified in
this Section 14(b), unless such cessation is caused by a termination of this
Agreement under Section 22 imposed by an 

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 arbitration panel in a dispute
resolution proceeding pursuant to Section 21, and (B) WPSC will not exercise any
rights or remedies that are inconsistent with the rights granted to DPC's
Secured Lender(s) in Section 14(c)), or to limit the right of either Company to
pursue dispute resolution in good faith as provided in Section 21, below. DPC
shall pay to WPSC all reasonable attorneys' fees and legal expenses arising from
the enforcement of WPSC's rights hereunder in the event of a failure to make
payment or other material default by DPC that is not cured within the applicable
time periods provided in this Section 14 or that is not subjected to dispute
resolution pursuant to Section 14(a) in accordance with the terms thereof; this
provision shall not, however, supersede the provisions in Sections 21(b) and
21(c) governing responsibility for costs incurred in dispute resolution.

    (c) Lender Notice and Step-In Rights. DPC's Secured
Lender(s) shall have the following rights with respect to a DPC default or other
failure to perform under this Agreement (it being understood that WPSC shall owe
no duties or obligations to DPC's Secured Lender(s) except as expressly provided
in this Section 14(c) and with respect to the provisions for liens and
foreclosure in Sections 17(c)(2) and (3)):

            (i) At the same time that WPSC provides any
            written notice of default or failure to DPC pursuant to
            Section 14(b), above, it shall provide a copy of said notice to
            the Lead Lender. No notice of failure or default by DPC under this
            Agreement shall be effective unless and until a copy of that notice
            is also given to the Lead Lender.

            (ii) DPC's Secured Lender(s) shall have the right
            to cure any defaults by DPC on DPC's behalf, and WPSC agrees to
            accept any such cure by DPC's Secured Lender(s), provided that such
            cure is timely effected as set forth 

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<PAGE>

             in this paragraph: if DPC fails
            to cure a failure or default within the period and in the manner
            provided in Section 14(b)(i) or (ii), DPC's Secured Lender(s)
            shall have fifteen (15) calendar days immediately following the
            end of DPC's cure period (which DPC cure period shall be (a) fifty
            (50) calendar days, unless reduced to ten (10) calendar days
            pursuant to Section 14(b)(ii), or (b) with respect to payment of a
            deficiency with respect to the amount to be disbursed to WPSC from
            escrow pursuant to Section 14(a) based upon the determination of the
            dispute resolution process, ten (10) calendar days after receipt of
            demand for such payment) in which to make such payment in full or
            cure such other failure or default on DPC's behalf. Without limiting
            the foregoing, if DPC states that it disputes all or a portion of an
            invoice, bill or demand for payment in accordance with Section
            14(a)(i) but fails to deposit the disputed amount with the Escrow
            Agent within the time period specified in Section 14(a)(ii), DPC's
            Secured Lender(s) may make such deposit and submit the written
            notice of dispute required under Section 14(a)(iii) within the time
            period specified in Section 14(a)(iii) for provision of such notice
            of dispute, in which case the provisions of Section 14(a) shall be
            applicable to the dispute. If DPC's Secured Lender(s) make such
            escrow deposit or if DPC's Secured Lender(s) cure a payment default
            by DPC in accordance with this Section 14(c)(ii), WPSC agrees to
            recognize the right of DPC's Secured Lender(s) to dispute on behalf
            of DPC, pursuant to Section 14(a) or otherwise as permitted under
            this Agreement, such 

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             payment and subsequent invoices, bills and
            demands for payment submitted to DPC, upon receipt of written notice
            from the Designated Secured Lender (as that term is defined below),
            stating that the DPC Secured Lender(s) is/are authorized to exercise
            that right. However, if (A) DPC is then a debtor in bankruptcy, or
            if DPC becomes a debtor in bankruptcy after DPC's Secured Lender(s)
            shall have begun to exercise such right, or (B) apart from DPC's
            bankruptcy status, DPC disputes whether such authorization to
            exercise DPC's rights is then valid or enforceable, then WPSC shall
            not be required to observe any said notice from the Designated
            Secured Lender unless, in the case of the circumstances described in
            clause (A), the notice and authority have been approved by a
            specific order (i.e., one referencing this subsection of this
            Agreement) of the bankruptcy court having jurisdiction over DPC's
            bankruptcy proceeding, the effectiveness of which order has not been
            stayed or vacated, or such bankruptcy court determines, by an order
            the effectiveness of which has not been stayed or vacated, that such
            approval is not necessary; or in the case of the circumstances
            described in clause (B), the DPC Secured Lender(s) exercising such
            right either (I) agrees in writing to reimburse WPSC, and does
            reimburse WPSC within five (5) business days after receipt of a
            written demand and substantiation of amounts incurred by WPSC for
            which reimbursement is sought, for any and all costs, expenses,
            damages, claims, losses and liabilities whatsoever incurred by WPSC
            arising from its allowing DPC's Secured Lender(s) to 

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<PAGE>

             exercise that
            right in reliance upon such notice, or (II) furnishes WPSC with an
            order from a court of competent jurisdiction, the effectiveness of
            which has not been stayed or vacated, that specifically (by
            reference to this subsection of this Agreement) authorizes DPC's
            Secured Lender(s) to exercise that right. Such right to exercise
            those rights of DPC with regard to disputes concerning payment and
            subsequent invoices, bills and demands for payment shall continue
            until WPSC receives a written notice from the Designated Secured
            Lender terminating that substitution, or if the right was authorized
            or approved by court order pursuant to this subsection, the court
            order in question expires or is vacated, overruled, countermanded or
            otherwise overturned by the issuing court or an appellate court. DPC
            acknowledges and agrees that WPSC shall not be liable for any
            damages, claims, losses, liabilities, costs or expenses whatsoever
            arising from its allowing DPC's Secured Lender(s) to exercise those
            rights pursuant to the terms of this subsection 14(c)(ii).

            (iii) If a DPC default is by its nature incurable
            by DPC's Secured Lender(s) (e.g., an attempted assignment in
            violation of Section 17 of this Agreement may not be curable by
            DPC's Secured Lender(s)), and (A) the default does not materially
            adversely affect WPSC's operation of Weston 4 or the Weston New or
            Existing Common Facilities, or WPSC's rights to capacity and energy
            from Weston 4, and (B) DPC's Secured Lender(s) otherwise timely cure
            any and all payment defaults and other curable defaults by DPC, then
            WPSC agrees that such "incurable default" shall not

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<PAGE>

             terminate DPC's Secured Lender(s)' rights with respect to this
            Agreement, and that such "incurable default" (unless it is
            a material breach of Section 17 by DPC that is not considered
            curable in accordance with the last sentence of this Section
            14(c)(iii)) may not serve as the basis for a termination of this
            Agreement by WPSC, for so long as (and only for so long as) all of
            DPC's payment obligations under this Agreement continue to be timely
            satisfied, either by DPC or DPC's Secured Lender(s), it being
            understood that, for purposes of this paragraph only, a payment
            obligation shall be deemed to be "timely satisfied" only
            if it is paid in full by no later than the date that is five (5)
            business days after the due date of such payment. For purposes of
            this paragraph, a default of a non-payment provision, term or
            condition that leads to a judgment or arbitral decision specifying
            that an award of monetary damages is the sole remedy for said
            default shall be considered to be a default that is curable by DPC's
            Secured Lender(s), and not an incurable default, provided that DPC's
            Secured Lender(s)' obligation to pay a judgment or arbitral award
            for monetary damages shall be deemed timely satisfied only if it is
            paid in full by no later than five (5) business days after the date
            provided in such judgment or award.

            (iv) In the event that in any bankruptcy
            proceeding in which DPC is the debtor, the bankruptcy court approves
            DPC's rejection of this Agreement by final order, the effectiveness
            of which is not stayed or vacated, WPSC will, at the option of DPC's
            Secured Lender(s) (which option must be exercised (if 

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             at all) by no
            later than the date that is sixty (60) calendar days after the court
            approves of DPC's rejection), and upon the curing by DPC's Secured
            Lender(s) of any and all payment defaults, and any and all other
            defaults which have resulted in a final judgment or arbitral award
            ordering payment of monetary damages, that were outstanding under
            this Agreement at the time of said rejection and the payment by
            DPC's Secured Lender(s) to WPSC of all amounts owing by DPC to WPSC
            under the terms of this Agreement at the time the option is
            exercised, enter into a new agreement with DPC's Secured Lender(s)
            or its/their transferee or nominee having terms substantially the
            same as the terms of this Agreement. Notwithstanding the foregoing,
            WPSC shall have no obligation to enter into any such new agreement
            if the bankruptcy court having jurisdiction over DPC's bankruptcy
            proceeding has issued an order, the effectiveness of which has not
            been stayed or vacated, approving a transfer by DPC of its interest
            in all or part of this Agreement, or all or part of DPC's interest
            in Weston 4 or the Weston New or Existing Common Facilities, to a
            Person other than DPC's Secured Lender(s).

            (v) WPSC agrees to recognize the right of the
            Designated Secured Lender to exercise DPC's rights on the JPOC,
            including but not limited to DPC's rights to obtain information and
            to vote DPC's Ownership Share, upon receipt of written notice from
            the Designated Secured Lender (as that term is defined below),
            stating that the Designated Secured Lender is authorized to exercise
            those rights. However, if (A) DPC is then a debtor 

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             in bankruptcy, or
            if DPC becomes a debtor in bankruptcy after the Designated Secured
            Lender shall have begun to exercise such rights, or (B) apart from
            DPC's bankruptcy status, DPC disputes whether such authorization to
            exercise DPC's rights is then valid or enforceable, then WPSC shall
            not be required to observe any said notice from the Designated
            Secured Lender unless, in the case of the circumstances described in
            clause (A), the notice and authority have been approved by a
            specific order (i.e., one referencing this subsection of this
            Agreement) of the bankruptcy court having jurisdiction over DPC's
            bankruptcy proceeding, the effectiveness of which order has not been
            stayed or vacated, or such bankruptcy court determines, by an order
            the effectiveness of which has not been stayed or vacated, that such
            approval is not necessary; or in the case of the circumstances
            described in clause (B), the Designated Secured Lender either (I)
            agrees in writing to reimburse WPSC, and does reimburse WPSC within
            five (5) business days after receipt of a written demand and
            substantiation of amounts incurred by WPSC for which reimbursement
            is sought, for any and all costs, expenses, damages, claims, losses
            and liabilities whatsoever incurred by WPSC arising from its
            allowing the Designated Secured Lender to exercise those rights in
            reliance upon such notice, or (II) furnishes WPSC with an order from
            a court of competent jurisdiction, the effectiveness of which has
            not been stayed or vacated, that specifically (by reference to this
            subsection of this Agreement) authorizes the Designated Secured 

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<PAGE>

            
            Lender to exercise those rights. Such right to exercise DPC's rights
            on the JPOC shall continue until WPSC receives a written notice from
            the Designated Secured Lender terminating that substitution, or if
            the right was authorized or approved by court order pursuant to this
            subsection, the court order in question expires or is vacated,
            overruled, countermanded or otherwise overturned by the issuing
            court or an appellate court. DPC acknowledges and agrees that WPSC
            shall not be liable for any damages, claims, losses, liabilities,
            costs or expenses whatsoever arising from its allowing the
            Designated Secured Lender to exercise DPC's rights on the JPOC
            pursuant to the terms of this subsection 14(c)(v).

                Upon the closing on the Ownership Date, DPC and
            DPC's Secured Lender(s) shall supply to WPSC a written designation,
            irrevocable by DPC, in which DPC designates one of DPC's Secured
            Lender(s) as authorized to give the notice(s) referred to in
            subsection 14(c)(ii) with respect to exercise of DPC's right to
            dispute payments and subsequent invoices, bills and demands for
            payment submitted to DPC, and in the first paragraph of this
            subsection 14(c)(v), above, with respect to exercise of DPC's rights
            on the JPOC (the "Designated Secured Lender"). Such
            designation shall remain in effect until the Designated Secured
            Lender provides written notice to WPSC that it is no longer
            effective (which notice such Designated Secured Lender shall in any
            event give when it ceases to be one of DPC's Secured Lender(s)). DPC
            and DPC's Secured Lender(s) shall then supply to WPSC a new written
            designation, 

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             irrevocable by DPC, designating one of DPC's Secured
            Lender(s) as the Designated Secured Lender authorized to give such
            notice(s).

DPC shall provide WPSC with a list of the names of all of
DPC's Secured Lender(s) on or before the Ownership Date, and will update such
list from time to time as appropriate. DPC's Secured Lender(s) shall furnish
WPSC with the address of the Lead Lender. The Lead Lender may change its address
for notices by providing written notice to the representatives of WPSC and DPC
designated pursuant to Section 26 and/or Section 27 hereof. Any communication
that WPSC is required to send to the Lead Lender pursuant to the terms of this
Agreement shall be effective if it is sent to the address for said Lead Lender
that has been furnished to WPSC by DPC's Secured Lender(s), unless said address
has been changed by the Lead Lender in accordance with the terms of this
paragraph, in which latter case WPSC's communication shall be effective if sent
to the address most-recently furnished to WPSC's designated representative by
the Lead Lender.

        (d) Failure To Pay or Perform by WPSC. (i) If WPSC
fails to make when due any payment required by, or defaults on any other
obligation under, this Agreement or any other contract entered into
pursuant to this Agreement (including but not limited to the Ground Lease, the
Confidentiality Agreement or the Easement), WPSC shall have sixty-five (65)
calendar days after written notice of such failure or default is received from
DPC in which to cure such failure or default (except that this 65-calendar day
period may be reduced as provided in Section 14(d)(ii)).

           
(ii) Subject to Section 14(a), in the event that WPSC fails
to make when due any payment required by this Agreement or by any contract
entered into pursuant to this Agreement (including but not limited to the EI
Agreement) to be made to DPC, the past due 

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 payment shall bear interest from the
due date until paid at a per annum rate equal to the lesser of the WPSC Cost of
Capital or the highest rate then permitted under Applicable Law. If any such
failure to make payment when due has continued for more than sixty-five (65)
calendar days after written notice of such failure has been received by WPSC
from DPC, then WPSC shall cease to have any rights in the capacity or energy of
Weston 4 until such time as the failure has been completely cured; provided,
however, that if more than two failures by WPSC to make payment when due
under this Agreement or under any contract entered into pursuant to this
Agreement occur in any twelve (12)-month period (not counting any situation in
which WPSC does not make a payment in full because it is disputing that payment
in good faith pursuant to Section 14(a)), then beginning with the third such
failure the sixty-five (65)-day cure period set forth in this paragraph and
Section 14(d)(i) shall be reduced to ten (10) calendar days, and WPSC's cure
period shall remain at ten (10) calendar days unless and until WPSC timely makes
all payments under this Agreement and each contract entered into pursuant to
this Agreement for a period of two (2) consecutive years. For purposes of this
paragraph, a failure by WPSC to make payment when due under this Agreement or
under any contract entered into pursuant to this Agreement shall include,
without limitation, a failure by WPSC to make when due a payment under any
invoice, bill or demand for payment issued by DPC, or a failure by WPSC to pay
any judgment or arbitral award for monetary damages for default of any
provision, term or condition of this Agreement or any contract entered into
pursuant to this Agreement within the time period specified in such judgment or
arbitral award.

           
(iii) If WPSC fails to cure any failure to make payment by it
within the applicable cure period identified in Section 14(d)(ii), then DPC
shall have the right to petition a court for appointment of a temporary
replacement operator to operate Weston 4 and facilitate the 

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 implementation of
remedies on behalf of DPC. Such remedies may include the right to dispatch and
sell WPSC's share of the capacity and energy of Weston 4; provided, however,
that any profits earned on sales by DPC of WPSC's share of capacity and energy
shall be retained by DPC and credited to the outstanding liability owed by WPSC
to DPC; and provided, further, that this right to dispatch and
sell WPSC's share of the capacity and energy of Weston 4, and the replacement
operator's right to operate Weston 4, shall cease immediately when WPSC's
liability to DPC resulting from WPSC's failure to make payment has been fully
satisfied. Any replacement operator appointed pursuant to this paragraph must be
qualified by experience to operate Weston 4 in accordance with Good Utility
Practice.

           
(iv) No such failure or default referred to in
Section 14(d)(i) or (ii) shall relieve WPSC from any of its obligations
hereunder or under any contract entered into pursuant to this Agreement. The
remedies of DPC identified in this Section 14(d) are not intended to be
exclusive or to limit any other rights or remedies that DPC may have under the
circumstances (except that the circumstances in which WPSC will cease to have
any rights in the capacity and energy from Weston 4 shall be limited to those
specified in this Section 14(d), unless such cessation is caused by a
termination of this Agreement under Section 22 imposed by an arbitration panel
in a dispute resolution proceeding pursuant to Section 21, and except that the
circumstances in which a replacement operator for Weston 4 may be appointed
shall be limited to those specified in this Section 14(d)), or to limit the
right of either Company to pursue dispute resolution in good faith as provided
in Section 21, below. WPSC shall pay to DPC all reasonable attorneys' fees and
legal expenses arising from the enforcement of DPC's rights hereunder in the
event of a failure to make payment or other material default by WPSC that is not
cured within the applicable time periods provided in this Section 14 or that is
not subjected to 

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 dispute resolution pursuant to Section 14(a) in accordance with
the terms thereof; this provision shall not, however, supersede the provisions
in Sections 21(b) and 21(c) governing responsibility for costs incurred in
dispute resolution.

    (e) Right to Cure Other Company's Default. If either
Company fails to make when due any payment required by this Agreement or any
contract entered into pursuant to this Agreement to be made to any third Person,
then the other Company may, in addition to any other rights or remedies that it
may have, and if it so elects, make such payment and it shall, upon making such
payment, be entitled to recover the amount of such payment upon demand from the
defaulting Company, together with interest from the date of payment by the
non-defaulting Company to the date of reimbursement by the defaulting Company
calculated at a per annum rate equal to the lesser of the WPSC Cost of Capital
or the highest rate then permitted under Applicable Law.

Section 15. Renewals, Replacements, Additions and
Retirements.

    (a) Renewals and Replacements. Renewals and
replacements necessary for the operation of Weston 4 or the Weston New or
Existing Common Facilities shall be made as required by Good Utility Practice,
and shall be subject to WPSC's receipt of all necessary licenses, permits and
approvals as contemplated by Section 25. Renewals, replacements, additions and
retirements (and related dispositions and sales) shall be effected by WPSC
subject to the terms of this Agreement and the Joint Operating Manual, and the
general policies established by the Joint Plant Operating Committee.
Retirements, sales and other dispositions of Weston 4 property shall be effected
only in a manner consistent with the Companies' respective mortgage instruments
or indentures, if any.

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    (b) Permanent Decommissioning;
Repowering. At such time as it deems appropriate,
the JPOC, or a delegated subcommittee thereof, shall undertake a study to
evaluate and determine a plan, schedule and estimated
cost for the decommissioning of Weston 4,
in accordance with Good Utility Practice and the requirements of Applicable Law.
The scope and expense of such study, and the identity of the
Person(s) who will undertake such study (whether employees of one or both of the
Companies or otherwise), shall be determined
by the JPOC in its discretion. The
decommissioning study may, if the JPOC
so determines, consider the
potential repowering of Weston 4,
and/or other feasible alternatives to decommissioning.
The study may be updated from time
to time when and as deemed
appropriate by the JPOC. Based upon the study as it may be updated and other
information that the JPOC deems relevant, the JPOC shall determine and implement
a plan of decommissioning,
when and as the JPOC deems appropriate. The Companies
shall be responsible for the decommissioning, demolition and disposal of Weston
4, in accordance with the requirements of Applicable Law.

    Section 16. Mutual Confirmation of Title. Each of the
Companies shall have the right to obtain title insurance verifying ownership of
its respective interests in Weston 4. The cost of such title insurance shall be
paid by the Company requesting the same. Within sixty (60) calendar days after
the date of this Agreement, WPSC shall provide DPC with evidence of WPSC's
current title to Weston 4, the Site and the Easement Property, as well as WPSC's
title to the Weston Existing and New Common Facilities and the real estate on
which they are (or will be) located.

    Section 17. Transferability of
Interests.

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    (a) Policy. The relationship
of the Companies as tenants in common in Weston 4, the Weston New Common
Facilities and the Weston Existing Common Facilities, and as landlord (in the
case of WPSC) and tenant (in the case of DPC) under the Ground Lease, and as
grantor (in the case of WPSC) and grantee (in the case of DPC) under the
Easement, as provided by this Agreement, and the agreements herein for the
construction, operation and maintenance of Weston 4 and associated Weston New
and Existing Common Facilities by WPSC, are each undertaken in mutual trust and
confidence in the financial responsibility, engineering and operating
competence, efficiency and common objectives of the Companies. As used herein,
the term "Subject Properties" shall mean the Companies' respective
interests as tenants in common in Weston 4, the Weston New Common Facilities and
the Weston Existing Common Facilities, DPC's interests in the Ground Lease and
the Easement, and WPSC's ownership interest in the Site and the Easement
Property, and the Companies' respective rights under this Agreement and under
the EI Agreement. Because the effects of transfers of the interests of either of
the Companies upon the rights and interests of the other Company over the long
term of this Agreement cannot be determined at this time, it must be presumed
that such effects might be adverse. Therefore, each of the Companies, for the
protection of itself and the other Company, agrees that its interests in this
Agreement and its rights, title and interests in and to all Subject Properties
shall at all times during the term of this Agreement be subject to the
provisions of this Section 17.

     (b) Restrictions on Transfer--General.
Each Company agrees that during the term of this Agreement: (i) except as
specifically permitted under Section 17(c) below, neither its interest in this
Agreement nor its interest in any of the Subject Properties shall be assigned,
transferred or otherwise disposed of or permitted or required to be partitioned,
or shall be permitted to be subject to any lien or encumbrance of any character,
whether voluntarily or by operation of law, without the express, prior written
consent of the other Company; and (ii) no such assignment, transfer or disposal
shall take place unless and until all governmental or 

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 regulatory permits,
licenses or approvals necessary to effectuate such assignment, transfer or
disposal have first been obtained.

     (c) Restrictions on Transfer--Exceptions.
The provisions of Section 17(b)(i) above shall not restrict any of the
following, which may occur without the consent of the non-transferring Company:
(1) dispositions and sales incident to renewals or replacements of equipment or
components of Weston 4, the Weston New Common Facilities or the Weston Existing
Common Facilities in the normal course of business; or (2) the right of any
Company to subject its own interest in the Subject Properties to the lien of any
mortgage upon all or substantially all of its physical electric utility
property; or (3) the right of any purchaser on foreclosure of any such mortgage
to acquire any interest subject to any such mortgage; or (4) the right of any
Company to transfer voluntarily its interest in this Agreement or in the Subject
Properties as an incident of any sale, merger or other transfer of all or
substantially all of its electric facilities as an operating entirety, if the
transferee expressly assumes in writing all of the obligations of the transferor
under this Agreement and is qualified by experience to perform the transferor's
obligations under this Agreement in accordance with Good Utility Practice; or
(5) a change in Control of either Company, whereby a Company becomes Controlled
by Person(s) not in Control of said Company immediately prior to the change, but
the Company continues to maintain its interest in this Agreement and the Subject
Properties; or (6) the right of any Company to transfer its interest in this
Agreement or in the Subject Properties to any Affiliate of said Company, if the
Affiliate expressly assumes in writing all of the obligations of the transferor
Company under this Agreement and is qualified by experience
to perform the transferor's obligations under this Agreement in accordance with
Good Utility Practice, and provided
that the Affiliate (or any guarantor
of all of said Affiliate's obligations under this
Agreement) has a credit rating from Standard & Poor's Rating Group (a
division of McGraw Hill, Inc.)
or its successor that is no less than BBB+, or from Moody's Investor Services,
Inc., or its successor that is no less than Baa1, with stable outlook; or (7)
the granting of liens (except liens securing borrowed 

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 money), easements, leases,
licenses, restrictions, covenants, rights-of-way and other encumbrances by WPSC
after the date of this Agreement that do not materially interfere with the
operation of Weston 4 or the Weston New or Existing Common Facilities or with
DPC's rights under this Agreement, the Ground Lease, the EI Agreement or the
Easement, provided that any such liens, restrictions, covenants or encumbrances
under this subsection (7) do not attach to DPC's ownership interest in Weston 4
itself or DPC's ownership interest in the Weston New or Existing Common
Facilities (it being understood that DPC does not and will not have an ownership
interest in the Site or the Easement Property); or (8) sales or other transfers
by WPSC to the co-owner(s) of any New Unit that may be built at the Weston
Generating Station of a portion of WPSC's interests in the Weston New or
Existing Common Facilities, or in the land on which said New Unit may be built,
so long as such sale or transfer does not materially interfere with the
operation of Weston 4 or the Weston New or Existing Common Facilities or with
DPC's rights under this Agreement, the Ground Lease, the EI Agreement or the
Easement; the impact of any such New Unit upon Weston 4 and the Weston New and
Existing Common Facilities is governed by Sections 8(h) and 8(i) of this
Agreement. The exceptions in the foregoing Sections
17(c)(2), (3), (4), (5), (6), (7) or (8) shall not be deemed to allow either of
the Companies to grant, extend, transfer or permit to any mortgagee, purchaser
on foreclosure or other transferee of its interest in any of the Subject
Properties, any right to partition or to require partitioning of any of the
Subject Properties.

    In the event of a transfer by WPSC of the type described in
Section 17(c)(4), or a change in Control of WPSC of the type described in
Section 17(c)(5), in either case occurring after the In-Service Date, then the
aggregate cost allocations to DPC with respect to Indirect Costs shall not,
during the first full calendar year following the effective date of said
transfer or change of Control or in either of the next two succeeding calendar
years, exceed the Indirect Cost Cap (as that term is defined below) for that
calendar year. In the event of a transfer by WPSC of the type described in
Section 17(c)(6) occurring after the In-Service Date, then the

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 aggregate cost
allocations to DPC with respect to Indirect Costs shall not, during any calendar
year (beginning with the first full calendar year following the effective date
of said transfer), exceed the Indirect Cost Cap for that calendar year. For the
period between the effective date of any such transfer or change of Control and
January 1 of the first calendar year following such effective date (the
"Period"), the aggregate cost allocations to DPC with respect to
Indirect Costs shall not exceed an adjusted Indirect Cost Cap, determined by
multiplying the Indirect Cost Cap for the first full calendar year following
such effective date by a fraction, the numerator of which is the number of
calendar days in the Period and the denominator of which is 365.

    For any transfer by WPSC, or any change in Control of WPSC,
of the types described in the immediately preceding paragraph, the
"Indirect Cost Cap" for the first full calendar year following the
effective date of such transfer or change shall be an amount equal to 120% of
the aggregate cost allocations to DPC with respect to Indirect Costs under
Section 06 of the Joint Operating Manual during the twelve-month period ending
on the effective date of said transfer or change (the "Initial Indirect
Cost Cap"). The Indirect Cost Cap for each succeeding calendar year shall
be equal to the Initial Indirect Cost Cap escalated by the aggregate percentage
change in the Employment Cost Index for Private Industry, All Workers, Wages and
Salaries, Index Number, Seasonally Adjusted - ECS20002I, issued by the Bureau
of Labor Statistics of the United States Department of Labor, from January 1 of
the first calendar year following the effective date of said transfer or change
through the December 31 immediately preceding the calendar year for which the
Indirect Cost Cap is being calculated. If this Employment Cost Index is no
longer published, the JPOC shall identify an appropriate replacement index.

     (d) Consent as Necessary for
Bonding. Each of the Companies hereby consents that the restrictions of this
Section 17 on transfer and on any right of partition, and any 

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 other restriction,
term or condition of this Agreement, shall be and hereby are waived and shall be
inapplicable to the extent (but only to the extent) that it shall be finally
determined, by a court of competent jurisdiction or an arbitrator(s) in an
action or proceeding to which the Companies and their respective mortgagees are
parties, that such restriction, term or condition would disqualify the interest
of one of the Companies in the Subject Properties from eligibility as the basis
for the issuance of additional bonds under their respective mortgage indentures
as in effect as of the date of this Agreement.

     (e) Other Properties; Common
Facilities. Subject to the last sentence of this Section 17(e), nothing in
this Section 17 or elsewhere in this Agreement shall restrict in any way WPSC's
ability to sell, assign or otherwise transfer any of its right, title or
interest in any real property, equipment, facilities or assets of or at the
Weston Generating Station other than the Subject Properties. Any transfer of
right, title or interest to any Weston New or Existing Common Facilities shall
be expressly made subject to the rights of use of such Weston New or Existing
Common Facilities by the co-owners of Weston 4 as set forth herein, and the
Companies shall record an appropriate memorandum or other notice of this
restriction in the appropriate land records.

    Section 18. Power and Energy. Except
to the extent provided otherwise in this Agreement or in the Joint Operating
Manual, each Company, from and after the In-Service
Date of Weston 4, shall at all times have full ownership of and entitlement to
its Ownership Share of Weston 4 capacity and the associated amount of net Weston
4 energy that is transmitted and delivered from Weston 4 to the ATC transmission
system. Weston 4 shall be dispatched in accordance with Good Utility Practice,
the operating characteristics of the unit and the limits and practices imposed
by the owner or operator of the transmission system or market authority having
jurisdiction. Specific dispatch principles are set forth in Section 13 of the
Joint Operating Manual. These principles may be modified by the JPOC from time
to time as needed to reflect industry changes. If the dispatch principles are
modified by the JPOC over DPC's objection, the 

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 modification will become
effective upon adoption, but it may be challenged by DPC on a prospective basis
through the dispute resolution mechanism set forth in Section 21 if such
modification would conflict with the dispatch principles set forth in this
section, or would result in a disproportionate limitation on DPC's Ownership
Share of the capacity and energy from Weston 4. Notwithstanding anything to the
contrary in this Agreement or the Joint Operating Manual, however, there is no
guarantee that either of the
Companies will be able to obtain transmission for its
share of the net Weston 4 energy once it has been delivered to the ATC
transmission system.

    DPC shall keep WPSC informed as to the
amount of power it requests to be generated for it from Weston 4. Subject to its
capability, operating conditions, and necessary or unavoidable outages, Weston 4
shall be operated so as to produce a minimum output equal to the sum of the
power requirements of the Companies therefrom. WPSC shall keep DPC informed as
to the maximum amount of power available from Weston 4 from time to time. WPSC
shall also provide DPC with such generation output testing data and other
information as DPC shall reasonably require in order to obtain and maintain
accreditation of DPC's share of capacity from Weston 4 by MAPP.

    Weston 4 will be dispatched by each
Company in accordance with the dispatch principles set forth herein or in the
Joint Operating Manual (except as may be otherwise permitted by the JPOC),
subject in any event to the minimum dispatch limits of the unit, and dispatch
limits imposed by the owner or operator of the transmission system or market
authority having jurisdiction. Minimum dispatch limits will be set with the
general intent of maintaining supercritical operation, but will provide the
right for either Company to dispatch Weston 4 at a lower power level provided
that such Company compensates the other Company for any increased costs due to
the reduced efficiency of the unit, except when the lower power levels are the
result of limits imposed by the transmission system owner or operator. Such
dispatch principles will allow for the Companies' ability to set hourly
schedules on a day-ahead basis and 

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 will include provisions for reasonably
changing those hourly schedules to accommodate changing needs. The Companies
shall have a proportional interest in Weston 4's ramp rate. If a Company will
not be dispatching all or a portion of its share of Weston 4 and transmission is
available, the other Company shall have the right to dispatch the portion that
is not being dispatched. The compensation for a Company's dispatch of all or a
portion of the other Company's share of Weston 4 shall be based upon the
Variable Dispatch Cost of operating Weston 4, plus an adder of 15% of Variable
Dispatch Cost for energy dispatched by one Company that exceeds an agreed-upon
threshold from the other Company's share of Weston 4; this compensation amount
or methodology may be changed from time to time as unanimously agreed by the
JPOC, or as required to be compliant with compensation practices of any market
authority having jurisdiction; moreover, nothing in this Section restricts the
Companies from agreeing to sell excess energy to each other at
mutually-agreeable prices. The Companies acknowledge that
each Company shall be entitled to its respective Ownership Share of any
compensation paid by the Midwest ISO for ancillary services furnished to the
Midwest ISO by Weston 4. The Companies specifically agree to cooperate
reasonably through the JPOC in creating and modifying as necessary dispatch
principles that are appropriate in a developing
market.

    Section 19. Additional System
Transmission Requirements; Certain Transmission Issues. Expenditures will be
necessary for generator interconnection facilities and substation(s) to assure
the required availability of Weston 4 capability, as described in Section 04 of
the Joint Operating Manual.

    The Companies shall jointly bear all
costs, liabilities and risks associated with the transmission and delivery of
Weston 4 energy to the high side(s) of the point(s) of interconnection between
Weston 4 and the ATC transmission system, in proportion to their Ownership
Shares in Weston 4. The Companies shall dispatch their respective shares of
Weston 4 in accordance with the dispatch principles set forth in Section 13 of
the Joint Operating 

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 Manual, as it may be modified from time to time by the JPOC.
WPSC shall bear all costs, liabilities and risks associated with the
transmission and delivery of Weston 4 energy from the ATC transmission system to
its own distribution system. DPC shall bear all costs, liabilities and risks
associated with the transmission and delivery of Weston 4 energy from the ATC
transmission system to its own distribution system.

    Section 20. Waivers. In order
to be effective, any waiver at any time by either Company of any
of its rights or remedies
with respect to a default under this Agreement, the Joint Operating Manual, the
Ground Lease, the EI Agreement, the Confidentiality Agreement or the Easement,
or with respect to any other matter arising in connection with this Agreement,
the Joint Operating Manual, the Ground Lease, the EI Agreement, the
Confidentiality Agreement or the Easement, must be made in a writing signed by
such Company, and any such waiver shall not be deemed to be a waiver with
respect to any subsequent default or matter. Any delay, short of the statutory
period of limitation, in asserting or enforcing any right or remedy under this
Agreement, the Joint Operating Manual, the Ground Lease, the EI Agreement, the
Confidentiality Agreement or the Easement shall not be deemed a waiver of such
right or remedy.

    Section 21. Dispute Resolution.

    (a) Consensual Resolution. The
Companies undertake to work together in good faith to resolve by negotiation and
agreement any claim or dispute that may arise out of this Agreement, the Joint
Operating Manual, the Ground Lease, the EI Agreement, the Confidentiality
Agreement or the Easement. The initial discussions shall be conducted by the
Companies' respective representatives on the JPOC or their designees with
knowledge of the subject matter of the claim or dispute. If, notwithstanding the
good faith efforts of these representatives, these discussions do not resolve
the dispute within fifteen (15) calendar days after one Company first notifies
the 

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 other Company of the existence of the claim or dispute, the matter shall be
referred to a senior management representative of each Company to try to reach
consensual resolution of the dispute.

    (b) Mediation. Any claim or dispute between the
Companies arising out of or relating to this Agreement, the Joint Operating
Manual, the Ground Lease, the EI Agreement, the Confidentiality Agreement or the
Easement that is not settled through the good faith negotiations of the senior
management representatives of the Companies within fifteen (15) calendar days
after the claim or dispute is referred to them pursuant to subsection (a) above
shall be submitted to mediation upon the written request of either of them. Any
such request by a Company shall be delivered to the other Company, and shall
specify the issue or issues in dispute and summarize the claim with respect
thereto. Within five (5) business days after receipt of such a request,
authorized representatives of both Companies shall meet and attempt to agree
upon appointment of a mediator. If such agreement is not reached promptly,
either Company may request assistance from the CPR Institute for Dispute
Resolution in the selection of a mediator in accordance with the CPR Mediation
Procedure then in effect, which procedure shall govern the conduct of the
mediation in the absence of contrary agreement by both Companies. The costs of
the mediation shall be shared equally by the Companies, and each Company shall
bear its own attorneys' fees and costs incurred in connection with the mediation
proceedings.

    (c) Arbitration. If any claim
or dispute is not resolved through mediation pursuant to subsection (b) above
within sixty (60) calendar days after the mediator is appointed, the claim or
dispute shall be resolved through binding arbitration by a panel of three (3)
independent and impartial arbitrators; each Company shall choose one of the
arbitrators, and the two arbitrators so chosen shall choose the third. The
arbitration shall be conducted under the CPR Institute for Dispute Resolution
Rules for Non-Administered Arbitration. The arbitrators shall have full power
and authority to enforce this Agreement, the Joint Operating Manual, the Ground
Lease, the EI Agreement, the Confidentiality Agreement and the Easement
according to their respective express terms, but not to alter or add to or
disregard those terms. Subject to the express 

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 limitations on liability and
disclaimers set forth in this Agreement, the Joint Operating Manual, the Ground
Lease, the EI Agreement, the Confidentiality Agreement and the Easement, the
arbitrators may award any remedy or relief that a court with jurisdiction over
the matter might award. The arbitrators shall promptly conduct a hearing in
Wisconsin, and, within thirty (30) calendar days thereafter, unless such time is
extended by agreement of all parties involved, shall notify the Companies in
writing of their decision. The costs of the arbitration shall be shared equally
by the Companies, and each Company shall bear its own attorneys' fees and costs
incurred in connection with the arbitration proceedings. Judgment on the award
rendered by the arbitrators may be entered by any court having jurisdiction
thereof. This Section 21 shall not, however, impair the right of either Company
to seek interlocutory relief from any court of competent jurisdiction, pending
and/or in aid of mediation or arbitration, in the event that Company is
confronted with a genuine risk that it will suffer irreparable injury before
relief can reasonably be anticipated in the mediation or arbitral forum.

    Section 22. Term of Agreement.
This Agreement shall continue in full force and effect until the earliest to
occur of: (a) the date, if any, that either DPC or WPSC exercises any of its
respective termination rights set forth in Section 3; (b) the date, if any, the
Companies mutually agree to terminate this Agreement (in which case the
Companies must also at that time address post-termination issues and liabilities
and the disposition of their respective interests in Weston 4 and the Weston New
and Existing Common Facilities); (c) subject
to the limitation on the ability of WPSC to terminate set forth in Section
14(c)(iii), the date, if any, following a material breach of this Agreement by a
Company that is not timely cured pursuant to Section 14 that a final decision of
the arbitrators under Section 21 concludes that termination of this Agreement is
an appropriate remedy (in this event, however, the decision of the arbitrators
must also address post-termination issues and liabilities and the appropriate
disposition of the Companies' respective interests in Weston 4 and the Weston
New and Existing Common Facilities, and under the Ground Lease and the
Easement); or (d) the date on which the total or

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 substantial demolition or
disposal of Weston 4 is completed and paid for. Termination
of this Agreement shall not affect those rights and obligations of the Companies
that accrued prior to termination; without limiting
the foregoing, termination (except for a termination pursuant to Section 3)
shall not affect the Companies' responsibility for the decommissioning,
demolition and disposal of Weston 4. Any generating unit at the Weston
Generating Station other than Weston 4 may be retired by WPSC in its sole
discretion, but in that event suitable post-retirement arrangements will be made
with the owner(s) of Weston 4 regarding any Common Facilities affected by such
retirement.

    Section 23. Amendments. This
Agreement may be amended from time to time only by an instrument or instruments
in writing signed by the Companies (or by their respective permitted successors
or permitted assigns).

    Section 24. Successors and Assigns.
This Agreement shall inure to the benefit of and bind the Companies and their
respective permitted successors and permitted assigns, but it may be assigned in
whole or in part only in accordance with Section 17 above.

    Section 25. Regulatory Authority.
This Agreement, and all of its provisions, shall be subject to the approval of
the RUS, and to the authority of the PSCW and of any other governmental
authority(ies) having jurisdiction over the Companies, Weston 4, or the subject
matter of this Agreement. The exercise of each Company's respective rights,
duties and obligations under this Agreement, the Joint Operating Manual, the
Ground Lease, the Easement and the EI Agreement shall at all times be subject to
the receipt of all licenses, permits and approvals that are necessary from time
to time from all governmental and regulatory bodies having jurisdiction.

    Section 26. Representatives.
Each Company, by written notice signed by an executive officer and delivered to
the other Company, shall designate one representative and one alternate to
receive notices and communications from the other Company with respect to the
subject 

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 matter of this Agreement, the Ground Lease, the Easement and the EI
Agreement and to deliver to the other Company, on behalf of the representative's
Company, notices, communications, decisions and approvals concerning the subject
matter of this Agreement, the Ground Lease, the Easement and the EI Agreement.
The manner of making any decision by any Company or giving any approval by a
Company shall be determined by such Company for itself; but any communication
received by a Company from a Person designated as a representative of the other
Company pursuant to the preceding sentence (unless such designation shall have
been previously revoked as provided in Section 27) may be conclusively relied
upon by the recipient as having been authorized by said other Company.

    Section 27. Change of
Representatives. Any designation by a Company pursuant to Section 26 may be
revoked by such Company by designating a substitute representative or alternate
by a written notice signed by an executive officer and delivered to the other
Company.

    Section 28. Relationship of
Companies. The Companies do not intend to create by this Agreement or by any
grant, lease or license related hereto any association, joint venture, trust,
fiduciary relationship or partnership, or to impose or confer on any Person
other than the Companies any rights or obligations hereunder. Following the
Ownership Date, the Companies shall, in accordance with
Section 1.761-2(b)(2)(i) of the Treasury Regulations, make an election
under Section 761(a) of the Code not to be treated as a partnership for federal
and Wisconsin income taxation. DPC shall not have by virtue of this Agreement,
the Joint Operating Manual or any such grant, lease or license any right or
power to bind WPSC in any respect without WPSC's express, prior written consent.
Except as expressly provided in this Agreement, WPSC shall not have by virtue of
this Agreement, the Joint Operating Manual, or any such grant, lease or license
the right or power to bind DPC without DPC's express, prior written consent.

 

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    Section 29. Force Majeure.
Neither Company shall be liable to the other for any failure of or delay in
performance under this Agreement, the Joint Operating Manual, the Ground Lease
or the Easement (other than any failure to make any payment at the time it is
due and owing) to the extent said Company is an Excused Party and the failure or
delay is due to the occurrence of Force Majeure. The Excused Party shall notify
the other Company of the occurrence and estimated duration of the Force Majeure
event with reasonable promptness after the Excused Party becomes aware of said
event. The Excused Party shall use commercially reasonable efforts to overcome
the effects of the Force Majeure event and resume full performance as soon as
reasonably practicable.

    Section 30. Agent for Scheduling
and Dispatch. The Companies agree that either Company may appoint a
third-party agent for purposes of scheduling and dispatch of its respective
share of the output of Weston 4; provided, however, that such
agent must be disclosed to the other Company and must sign and agree to be bound
by a confidentiality, non-use and non-disclosure agreement as provided under the
Confidentiality Agreement. WPSC recognizes that DPC intends to appoint GEN-SYS
Energy as its agent for that purpose.

      Section 31. WPSC
  Representations. WPSC represents and warrants to DPC that
  as of the date of this Agreement:

   (a) Organization and
  Qualification. WPSC is a corporation duly organized and in existence under
  the laws of the State of Wisconsin. WPSC has all necessary power and authority
  to carry on its business as presently conducted, to own or hold its properties
  and to enter into and perform its obligations under this Agreement.

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   (b) Authorizations, Approvals,
  No Defaults. The execution, delivery and performance of this Agreement by
  WPSC (i) have been duly authorized by all requisite corporate action, (ii) do
  not require any approval, except as has been heretofore obtained, from the
  board of directors or shareholders of WPSC, (iii) to the best of WPSC's
  knowledge will not conflict with any provisions of any Applicable Laws and
  (iv) will not conflict with, result in the material breach of, constitute a
  material default under, or accelerate performance required by any material
  covenant, agreement, understanding, decree or order to which it is a party or
  by which it or any of its properties or assets is bound or affected.
  This Agreement has been duly executed and delivered by WPSC, and it
  constitutes the valid and binding obligation of WPSC, enforceable against WPSC
  in accordance with its terms, except as enforceability may be limited by
  bankruptcy, insolvency, reorganization and other similar laws affecting the
  rights of creditors generally.

   (c) Governmental Approvals. Except
  as otherwise expressly provide herein, the execution and delivery by WPSC of
  this Agreement do not require the consent or approval of, the giving of notice
  to, the registration with, the recording or filing of any document with, or
  the taking of any other action in respect of any governmental or regulatory
  authority which has not previously been obtained or accomplished.

   (d) Legal Proceedings. Other
  than any proceedings challenging the First Approval or the air permit for
  Weston 4 that are pending on the date of this Agreement, there is no action,
  suit or proceeding, at law or in equity, or official investigation by or
  before any governmental or regulatory authority, arbitral tribunal or other
  body pending or, to the actual knowledge of WPSC threatened, against or
  affecting WPSC or any of its properties, rights or assets, which could
  reasonably be expected to result in a material adverse effect on 

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   WPSC's
  ability to perform its obligations under this Agreement or on the validity or
  enforceability of this Agreement.

   (e) Environmental Warranties.
  Except for the conditions described in Attachment 10
  hereto, and bearing in mind that WPSC's Environmental
  Department has not conducted a formal environmental assessment of the Site or
  of the Easement Property (collectively, the "Property"), WPSC's
  Environmental Department has no knowledge of
  (i) the release or disposal of any hazardous wastes
  or toxic substances on the
  Property in a quantity, concentration
  or amount that would present a threat to human health or the environment,
  (ii) the existence of any underground or aboveground
  storage tanks on the Property, or
  (iii) the presence of asbestos or polychlorinated
  biphenyls ("PCBs") on the Property (but WPSC emphasizes that
  asbestos and/or PCBs may be or may have been incorporated
  into certain products or materials in such a way that WPSC's Environmental
  Department would have no knowledge of their presence). Except in connection
  with certain of the conditions described in Attachment 10 hereto, with respect
  to the Property, neither WPSC's Environmental Department nor WPSC's managers
  of the Weston Generating Station have made, filed or caused to be made or
  filed any report of a release or spill pursuant to Section 292.11(2),
  Wis. Stats., and/or NR 706, Wis. Admin. Code or 42 U.S.C. Section 9603(a).
  The Property is not listed or proposed for listing, and
  WPSC's Environmental Department has received no notice
  or information that the Property is
  threatened to be listed, on the
  National Priorities List by the United States Environmental
  Protection Agency or on any similar listing maintained by the State of
  Wisconsin, and WPSC's Environmental Department has had
  no discussions with state or
  federal officials concerning the possibility of such listings.

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      Section 32. DPC
  Representations. DPC represents and warrants to
  WPSC that as of the date of this Agreement:

   (a) Organization and
  Qualification. DPC is a cooperative association duly organized and in
  existence under the laws of the State of Wisconsin. DPC has all necessary
  power and authority to carry on its business as presently conducted, to own or
  hold its properties and to enter into and perform its obligations under this
  Agreement.

   (b) Authorizations, Approvals,
  No Defaults. The execution, delivery and performance of this Agreement by
  DPC (i) have been duly authorized by all requisite corporate action, (ii) do
  not require any approval, except as has been heretofore obtained, from the
  board of directors or members of DPC, (iii) to the best of DPC's knowledge
  will not conflict with any provisions of any Applicable Laws and (iv) will not
  conflict with, result in the material breach of, constitute a material default
  under, or accelerate performance required by any material covenant, agreement,
  understanding, decree or order to which it is a party or by which it or any of
  its properties or assets is bound or affected. This
  Agreement has been duly executed and delivered by DPC, and it constitutes the
  valid and binding obligation of DPC, enforceable against DPC in accordance
  with its terms, except as enforceability may be limited by bankruptcy,
  insolvency, reorganization and other similar laws affecting the rights of
  creditors generally.

   (c) Governmental Approvals.
  Except as otherwise expressly provided herein, and except for the express
  approval of the RUS, the execution and delivery by DPC of this Agreement do
  not require the consent or approval of, the giving of notice to, the
  registration with, the recording or filing of any document with, or the taking
  of any other action 

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   in respect of any governmental or regulatory authority
  which has not previously been obtained or accomplished.

   (d) Legal Proceedings. Other
  than any proceedings challenging the First Approval or the air permit for
  Weston 4 that are pending on the date of this Agreement, there is no action,
  suit or proceeding, at law or in equity, or official investigation by or
  before any governmental or regulatory authority, arbitral tribunal or other
  body pending or, to the actual knowledge of DPC threatened, against or
  affecting DPC or any of its properties, rights or assets, which could
  reasonably be expected to result in a material adverse effect on DPC's ability
  to perform its obligations under this Agreement or on the validity or
  enforceability of this Agreement.

    Section 33. Survival of
  Warranties and Representations. The warranties and representations of the
  Companies shall survive the closing of the transfer by WPSC
  to DPC of DPC's
  Ownership Share in Weston 4.

       Section 34. Confidentiality
  Agreement. The Companies are entering into a Confidentiality Agreement of
  even date herewith. This Confidentiality Agreement shall apply to, without
  limitation, all information, data and materials exchanged between the
  Companies under or in connection with this Agreement, the Joint Operating
  Manual, the Ground Lease, the EI Agreement or the Easement.

    Section 35. Taxes. Whether or not any Section of this
Agreement specifically refers to taxes, with respect to all transactions arising
under or contemplated by this Agreement or any contract entered into pursuant to
this Agreement, each of WPSC and DPC shall be liable for its Ownership Share (or
Existing or New Common Ownership Share, as 

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 applicable), at the time the taxable
event occurred, for any and all applicable sales and use taxes or transfer fees
under Chapter 77, Wis. Stats., and any and all federal or state excise, car-line
or similar taxes; provided, however, that in any transfer of
property between the Companies that is subject to said Chapter 77, the tax or
fee shall be the obligation of the transferee in its entirety. The Companies
shall cooperate in good faith to provide such certificates, design such systems
and seek such administrative guidance as may be required or helpful to properly
charge and report the minimum taxes legally due under this Agreement or any
contract entered into pursuant to this Agreement. Income taxes and license fee
taxes under section 76.28 and section 76.48 Wis. Stats. shall be the obligation
of the Company subject to such taxes. The Companies further agree to cooperate
in the audit and assessment of taxes shared under this Section 35 and to share
the costs thereof based upon their respective Ownership Shares (or Existing or
New Common Ownership Shares, as applicable), at the time the event giving rise
to the tax occurred.

      Section 36. Governing Law; Entire Agreement. This
  Agreement shall be governed by and construed in accordance with the laws of
  the State of Wisconsin (without regard to principles of conflicts of laws).
  This Agreement, together with the Joint Operating Manual and the
  Confidentiality Agreement referenced in Section 34,
  constitutes the entire agreement between WPSC and DPC, superseding all prior
  oral and written agreements, policies, understandings, representations and
  negotiations between the Companies on the subject matter hereof, including but
  not limited to that certain Letter of Intent between the Companies dated
  February 9, 2004, as amended;
  and there are no conditions affecting this Agreement that are not expressed
  herein or in the Joint Operating Manual.

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    IN WITNESS WHEREOF, each of the
Companies has caused this Agreement to be executed by its duly authorized
officer as of the day and year first above written.

  
    
      
 WISCONSIN PUBLIC SERVICE CORPORATION

 By: /s/ Charles A. Schrock

 Name: Charles A. Schrock

 Title: President and COO - Generation

    

  

Attest:

/s/ Barth J. Wolf

Secretary

  
    
      
 DAIRYLAND POWER COOPERATIVE

 By: /s/ William L. Berg

 Name: William L. Berg

 Title: President and CEO

Attest:

    

  

/s/ Laurie A. Engen

Assistant Secretary

<PAGE>

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