Document:

<PAGE>

                                                                   Exhibit 10(S)

                               Table of Contents

<TABLE>
<CAPTION>
Article                                                                     Page
<S>                                                                         <C>
Preface                                                                       3
Article No. 1:    Introduction/Continuity of Service/Non Discrimination       3
Article No. 2:    Union Security                                              5
Article No. 3:    Exclusive Functions of Management                           5
Article No. 4:    Union Activity                                              6
Article No. 5:    Status of Employees                                         7
Article No. 6:    Working Hours and Rates of Pay                             11
Article No. 7:    Seniority and Promotions                                   21
Article No. 8:    Grievance Procedure                                        24
Article No. 9:    Working Safety Committee                                   26
Article No. 10:   Inclement Weather Practice                                 27
Article No. 11:   Holidays                                                   28
Article No. 12:   Vacations                                                  30
Article No. 13:   Sick Leave                                                 32
Article No. 14:   Employee Benefit Plans                                     34
Article No. 15:   Leaves of Absence                                          42
Article No. 16:   Working Rules                                              44
Article No. 17:   Term of Agreement                                          47

                                   Exhibits

Exhibit I:        Classification Descriptions                                50
Exhibit II:       Schedule of Wage Rates                                     54
Exhibit III:      Check Off Authorization                                    58
Exhibit IV:       Sick Leave Agreement                                       59
Exhibit V:        Temporary Layoff Provisions                                60

                           Letters of Understanding

Letter of Understanding: Article 14.4                                        62
Letter of Understanding: Discipline Relative to Tardiness and Attendance     64
Letter of Understanding: Labor/Management Meetings                           65
Letter of Understanding: Organization Study                                  66
Letter of Understanding: Work/Family Issues                                  67
Letter of Understanding: Working Foreman Classification                      68
Letter of Understanding: Red Circle Rates                                    69
Letter of Understanding: Maintenance Technician Classification               70
</TABLE>

                                       1
<PAGE>

<TABLE>
<S>                                                                         <C>
Letter of Understanding: Organizational Restructuring                        71
Letter of Understanding: Operations Working In Maintenance                   72
Letter of Understanding: Operations Lead Classification                      73
Letter of Understanding: Operations Training                                 74
Letter of Understanding: Retail Customer Representative                      75
Letter of Understanding: 10 Hour Rest Period                                 76
Letter of Understanding: Vacation/Sick Leave Bonus                           77
Letter of Understanding: Sick Leave Buy Back                                 78
Letter of Understanding: Severance Allowance Plan                            79
Letter of Understanding: Journeyman, Electrical & Instrumentation            80
Letter of Understanding: Overtime Equalization Amendment                     81

                             Letters of Agreement

Letter of Agreement: Status of Maintenance Utility Technicians
   And Maintenance Technicians                                               82
Letter of Agreement: Overtime Equalization                                   83
Letter of Agreement: Flexibility Language                                    84
Letter of Agreement: Newly Hired Journeymen                                  85
Letter of Agreement: Status of Utility Operators                             86
Letter of Agreement: Power Delivery Apprenticeship Committee                 87
Letter of Agreement: Movement of Existing Employees From One
   Position to Another                                                       88
Letter of Agreement: Contract Education and Intent                           89
Letter of Agreement: E/I Classification                                      90
Letter of Agreement: Contractors for Generation                              91
Letter of Agreement: Performance Evaluations Regarding Seniority             93
Letter of Agreement: 1994 - Thirty Year Employees Lost Vacation              94
Letter of Agreement: 36 For 40 Holidays                                      95
Letter of Agreement: Tier II Wages                                           96

                          Alternative Shift Schedules

Thirty-Six For Forty Weekend Crew                                            97
Four Ten Hour Shift Schedule                                                101
Twelve Hour Shift Schedule                                                  111
</TABLE>

                                       2
<PAGE>

                             Generation Agreement

This agreement, made and entered into as of June 25, 1999, by and between Nevada
Power Company, a corporation, hereinafter referred to as the Company, and Local
Union No. 396 of the International Brotherhood of Electrical Workers, an
affiliate of the A.F.L./C.I.O., hereinafter referred to as the Union.

WITNESSETH

Whereas, for the purpose of facilitating the peaceful adjustments of differences
that may arise from time to time between the parties hereto, and to promote
harmony and efficiency to the end that the Company, the Union and the general
public may mutually benefit.

Now therefore, in consideration of the provisions, covenants and conditions
herein contained, the parties hereto agree as follows, to wit:

Article No. 1 - Introduction, Continuity of Service, Non-Discrimination

1.1  INTRODUCTION: The Company, in Clark and Nye counties, in the state of
     Nevada, a public utility engaged in the service of generating electric
     power, hereby recognizes Local Union No. 396 of the International
     Brotherhood of Electrical Workers, A.F.L./C.I.O., as the exclusive
     bargaining agent for its employees who are employed in Generation,
     excluding all supervisory, confidential and professional employees within
     the meaning of the National Labor Relations Act, such covered employees
     more specifically defined in Exhibit I (CLASSIFICATION DESCRIPTIONS), for
     the purpose of collective bargaining with respect to rates of pay, wages,
     hours of employment and other conditions of employment which may be subject
     to collective bargaining.

1.2  CONTINUITY OF SERVICE: It is mutually recognized that the interest of the
     Company, the Union and the welfare of the general public, requires the
     continuous rendering of service by the Company, and the parties agree that
     recognition of such obligations of continuous service is imposed upon both
     the Company and its employees.

     The Company, to facilitate the continuous performance of such service,
     agrees to meet with the Business Manager of the Union or his designated
     representative in reference to any matter within the scope of the
     Agreement, and agrees that it will cooperate with the Union in its efforts
     to promote harmony and efficiency among all of the employees of the
     Company.

     The Union agrees that the employees covered by this Agreement, will not be
     called upon or permitted to cease or abstain from the continuous
     performance of the duties pertaining to the positions held by them with the
     Company. The Company agrees to do nothing to provoke interruption of or to
     prevent such continuity of performance as required in the normal and usual
     operations of the Company's property. It is mutually agreed that any
     difference that may arise between the above parties shall be settled in the
     manner hereinafter provided.

     The Union agrees that the employees covered by this agreement will
     individually and collectively perform loyal and efficient work and service
     and that they will cooperate in promoting and advancing the welfare of the
     Company and the protection of its service to the public at all times.

     The Union agrees that there will be no strikes, stoppages of work or
     slowdowns of the Company's operations during the term of this Agreement,
     and the Company agrees that there will be no lockouts during the term of
     this Agreement.

                                       3
<PAGE>

1.3  NON-DISCRIMINATION: Neither the Company nor the Union will discriminate
     against any employee in the application of the terms of this agreement
     because of race, religion, sex, age, color, national origin, veteran
     status, disability or any other legally protected status. It is understood
     that job titles used in this agreement which indicate the male gender are
     not intended to restrict classifications to employees of the male gender.

1.4  LAWS: It is understood and agreed that if mandatory laws or government
     rules or regulations applicable to or in conflict with any of the
     provisions of this Agreement become effective and binding upon the parties,
     such conflicting provisions of this Agreement shall be subject to
     modification as required and the parties shall meet and confer to determine
     mutually agreeable language to conform to the laws, government rules and/or
     regulations.

     If laws, government rules and/or regulations hereafter enacted require
     changes in the structure and/or services provided by the Company, then the
     Company and Union will, upon mutual consent, reopen negotiations concerning
     the terms of this Agreement that are directly affected by the changes.

1.5  AMENDMENT: This Agreement shall be subject to amendment at any time by
     mutual consent of the parties. Such amendment must be written, state the
     effective date of the amendment, and be executed in the same manner as this
     Agreement.

                                       4
<PAGE>

Article No. 2 - Union Security

2.1  UNION DUES: The Company shall deduct money from Union employees' wages and
     pay it to the proper officers of the Union, provided the employee who is a
     member of the Union individually and voluntarily authorized such deduction
     to be made. The form of the check-off authorization is attached to this
     Agreement as Exhibit III (CHECK OFF AUTHORIZATION). The Union shall hold
     the Company free and harmless from any claims or damages from any party
     whatsoever for making deductions and shall indemnify the Company against
     any and all claims or damages which may originate from the dues check-off
     process.

2.2  NEW EMPLOYEES: The Company agrees to notify the Union of the name and
     address of new employees within thirty (30) days of their date of hire.

Article No. 3 - Exclusive Functions of Management

3.1  BUSINESS MANAGEMENT: The supervision and control of all operations and the
     direction of all working forces, including the right to hire, to suspend or
     discharge for proper cause, to transfer employees, to relieve employees
     from duty because of lack of work and for other legitimate reasons, is
     vested exclusively in the Company.

3.2  DISCIPLINE: The Company retains the right to exercise discipline in the
     interest of good service and the proper conduct of its business, provided
     an employee who has been laid off, discharged, or disciplined shall be
     advised of the reason or reasons for such action and shall be allowed
     suitable representation, if so desired, at the time such reasons are
     provided. Furthermore, should the employee or the Union feel that the terms
     or conditions of this Agreement have been violated, either shall be
     entitled to grieve such action in accordance with the provisions set forth
     in Article 8 (GRIEVANCE PROCEDURE) of the Agreement.

                                       5
<PAGE>

Article No. 4 - Union Activity

4.1  UNION BUSINESS: An employee who requests time off for Union activities, in
     addition to regular time off, shall be granted such request if such time
     off will not inconvenience the operations of the Company or increase its
     operating expenses; provided further, that such employee shall receive no
     compensation from the Company for such time off.

4.2  BULLETIN BOARDS: The Company agrees to permit the Union to use reasonable
     space for the purpose of posting officially signed Union bulletins upon the
     bulletin boards which are furnished by the Company.

4.3  CONTRACTING WORK: In case the Company should contract any type of work
     customarily performed by bargaining unit employees, the Company shall,
     before awarding such contract, advise the contractor that the work is to be
     done under not less than the terms and conditions pertaining to hours and
     wages set forth in this Agreement. Upon award of such contract, the Company
     shall notify the Union of such contractor and the nature of the work being
     performed. The Company will not contract any of its construction and
     maintenance work while having available competent employees to do such
     work. In the event the Company has employees on layoff with recall rights,
     the Company will not establish contracts for work that is customarily
     performed by such bargaining unit employees unless the affected employees
     are not qualified to perform the work (as defined in Article 5.4 [LAYOFF
     PROVISIONS]), or the work requires the use of special construction or other
     equipment which the Company does not possess. If the Company has employees
     in layoff status who are qualified to perform work which the Company
     intends to contract, the Company may recall these employees for the term of
     the contracted work without creating the liability for an additional
     severance in accordance with Article 5 (STATUS OF EMPLOYEES) of this
     agreement.

4.4  UNION/STEWARD BUSINESS: The Union steward shall, upon request to the
     supervisor, be allowed reasonable time during regular working hours,
     without loss of pay, to attend to Union matters on the job, provided such
     time is not used for solicitation of membership or collection of dues, and
     does not interfere with regular work schedules.

                                       6
<PAGE>

Article No. 5 - Status of Employees

5.1  STATUS DESIGNATION: Employees shall be designated as temporary,
     probationary, or regular.

     TEMPORARY: A temporary employee is one who is hired to fill a position for
     which there is temporary authorization. After working 1,040 straight time
     hours, a temporary employee shall be eligible for group life and medical
     insurance (excluding dental and vision), covering the employee only. If a
     temporary employee is offered and accepts a regular position, an adjusted
     date of hire, crediting actual time worked, will be calculated. If the
     temporary employee has worked at least 1,040 straight time hours, without
     cumulative absences of thirty (30) days or more at the time the regular
     position is awarded, the employee shall be eligible for all applicable
     benefits on the effective date of the award.

     If a temporary employee is offered and accepts a regular position that the
     employee has not previously occupied while at the Company, the employee
     must complete a probationary period to evaluate work performance. If,
     however, the employee has previously occupied the position being awarded,
     the employee shall receive credit toward the probationary period for actual
     time worked in that position.

     If an employee works at least 1,500 straight time hours during a twelve
     (12) month period in the same temporary position, the position will become
     authorized and the employee will be offered regular status in that
     position.

     PROBATIONARY: A probationary employee is one who is hired to fill an
     authorized position. After six (6) months of employment, a probationary
     employee shall be eligible for all benefits in accordance with this
     agreement.

     During the probationary period, the employee may be terminated at the
     discretion of the Company as long as the termination is not discriminatory
     and is not for the purpose of keeping jobs filled with probationary
     employees. Probationary employees who have not satisfactorily completed a
     formal departmental training and appraisal program may, at the discretion
     of supervision, have their probationary period extended by up to three (3)
     months. Supervisors shall not extend the probationary period if they do not
     have a formal training and appraisal program in place or have failed to use
     those programs. No later than two (2) weeks prior to the completion of the
     first six (6) months, the supervisor must notify the employee and the Union
     Business Manager in writing, if the probationary period will be extended.

     In computing the effective date of a change in status from a probationary
     to regular employee, interruptions in employment, caused by the following
     circumstances, shall not be credited:

            .   Discharge
            .   Resignation
            .   Absence for more than an accumulative total of thirty (30) days
                due to:
                                      .    Lay off
                                      .    Sickness
                                      .    Industrial disability
                                      .    Other causes.
     If the employee's combined absences, during the probationary period, are
     for a period greater than the employee's combined actual work time, the
     employee shall be terminated. The transfer of a probationary employee from
     one job to another without interruption of work time shall not be
     considered a break in employment. At the end of the probationary period as
     defined above, the employee will become a regular employee and will rank in
     seniority from the original date of hire.

                                       7
<PAGE>

     REGULAR: A regular employee is one who has completed a probationary period,
     is benefit eligible, and is in an authorized position.

5.2  APPLICATION REFERRAL: The Company recognizes the Union as a valuable source
     for employment referrals, due to the mutual interest in the profitability
     of the Company. As such, when additional employees are needed to do work
     which comes under this agreement, the Company will indicate its
     requirements, relative to knowledge, skills, and abilities, and will give
     the Union an equal opportunity to refer applicants for employment. The
     Company retains the right to evaluate each candidate and make the final
     hiring decision.

5.3  TEMPORARY LAYOFF PROVISIONS: In recognition of the competitive nature of
     the utility business, innovative solutions are required when unforeseen
     challenges present themselves. Accordingly, there may be operational
     circumstances that would permit the temporary layoff of employees for
     short-term periods of time, out of line of seniority, on a voluntary basis.
     These provisions are detailed in Exhibit V (TEMPORARY LAYOFF PROVISIONS) of
     this agreement.

5.4  LAYOFF PROVISIONS:
     DEFINITION OF QUALIFIED: For purposes of defining "qualified", as used in
     -----------------------
     this Article, the definition shall be that an employee is qualified to
     perform any position, in either collective bargaining agreement, which the
     employee has previously occupied at the Company or any position that is an
     equal or lower classification which has been identified as being part of
     the employee's current trade/department progression. The progressions are
     detailed in a memorandum of understanding that is held by both the Company
     and the Union.

     NOTIFICATION: If it becomes necessary for the Company to layoff regular
     ------------
     employees due to lack of work, the Company shall give affected employees as
     much notice as possible; but in no event shall employees receive less than
     fourteen (14) calendar days notice of layoff. Where temporary and
     probationary employees are involved, no notice of layoff is required.

     SENIORITY: Layoff in all cases due to lack of work will be determined by
     ---------
     Company seniority within the classification affected by the layoff. If two
     (2) or more employees have the same Company seniority date, the highest
     score on the most recent performance appraisal will break the tie.
     Employees who are to be laid-off will be permitted to displace a less
     senior person in any classification for which they are qualified.

     RETURN TO BARGAINING UNIT: A member of the bargaining unit being
     -------------------------
     transferred to a non-represented position shall retain Company seniority
     for all purposes including layoff, if the employee is returned to the
     bargaining unit within one (1) year of the initial transfer.

     FOUR (4) YEAR QUALIFIER: Any MPAT employee who accepts a position in the
     -----------------------
     bargaining unit will establish a new date of seniority for the purpose of
     future layoffs, except as defined above. This date will reflect the day in
     which these employees accept such a position and will be effective for four
     (4) years. If there is a reduction in classifications in the bargaining
     unit, these employees will use the above mentioned date as their seniority
     date for the purpose of this reduction or layoff. After four (4) years of
     service in the bargaining unit, any employee impacted by this language,
     will be credited with all Company seniority for the purposes of reduction
     in classification or layoff.

                                       8
<PAGE>

       RECALL: In the event of a recall, the Company shall provide notification
       ------
       to affected employees by certified mail to their address of record. Such
       employees must keep the Company informed of the address where they can be
       reached. Recalled employees must report to work no later than fourteen
       (14) calendar days from the date the certified letter was mailed.
       Employees who do not report to work within fourteen (14) days from the
       date the letter was mailed will be considered a voluntary quit. Employees
       will only be considered for recall to the classification from which they
       were laid-off, unless they make a written application within fourteen
       (14) calendar days from the date of notification of layoff, to human
       resources, for any other position for which they are qualified.
       Applications that do not meet this time frame will only be considered
       after all timely applications have been honored. Employees must submit a
       written notice to human resources to rescind their application for
       consideration for previously held positions prior to formal notification
       of return to work. Any employee who refuses a recall to any requested
       position will be considered a voluntary quit and will waive all recall
       rights to any other position. Employees who have displaced a less senior
       person in any classification shall be given an offer to return to their
       former jobs if the vacancy is in their former classification. Recall
       rights shall cease on any layoff in excess of twelve (12) months.

       TEMPORARY RECALL: In the event of a temporary recall, in accordance with
       ----------------
       Article 4.3 (CONTRACTING WORK), an employee may decline such temporary
       recall without waiving their rights for recall to a regular position,
       provided the temporary assignment is for less than ninety (90) days. If
       an employee accepts a temporary assignment, all benefits will be
       reinstated upon return to work and they will have recall rights for one
       (1) year from the date of any subsequent layoff. This right does not
       expire until the employee has returned to work or refused an offer to
       return to work. Any subsequent layoff will not create a liability for an
       additional severance benefit in accordance with this Article.

       EMPLOYMENT STATUS: Any regular employee who is laid-off due to lack of
       -----------------
       work has a right to replace any temporary employee within (5) working
       days after notification of layoff, provided the regular employee is
       qualified to perform the duties of the position filled by the temporary
       employee. If a regular employee is laid-off because of lack of work and
       is subsequently offered and accepts the first recall for employment
       within one (1) year after layoff, the employee shall resume the status of
       regular employee and shall be credited with Company seniority previously
       accrued. Employees who are recalled in a classification previously held,
       or for one in which they are qualified, will not be required to serve
       another probationary period and will be eligible for benefits
       immediately. However, employees who leave the service of the Company due
       to voluntary severance in accordance with this Article, or layoff and who
       are re-hired after one (1) year from the date of layoff or severance
       shall not be credited with Company seniority at the time of re-employment
       and shall be required to serve a new probationary period. Upon completion
       of five (5) years of subsequent service, an adjusted date of hire will be
       calculated crediting actual time worked with the Company. This date will
       be used for the purposes of Company seniority and all related benefits.

  5.5  SEVERANCE: Employees who have been notified of a layoff or a reduction in
       their classification which would cause them to be displaced from that
       classification may be eligible for severance benefits. The following
       define the severance benefit:

       ELIGIBILITY: Employees must have completed one (1) year of service to be
       -----------
       eligible for the minimum severance benefit.

       BENEFIT AMOUNT: Employees will be paid forty (40) hours at their straight
       --------------
       time rate for each year of service up to a maximum of three hundred
       twenty (320) hours. If eligible employees have completed nine (9) months
       of service since their most recent anniversary date, they will be
       considered to have completed an additional year of service for the
       purpose of calculating this benefit.

                                       9
<PAGE>

       If an employee exercises the right to displace a less-senior employee who
       occupies a lower paying classification and is laid-off from that
       classification within sixty (60) calendar days of this assignment, the
       severance benefit will be calculated at the rate of the employee's
       original classification.

       MEDICAL COVERAGE: Employees' current medical coverage, excluding dental
       ----------------
       and vision, will be continued at the applicable employee contribution for
       three (3) months following the effective date of layoff or severance.

       EMPLOYMENT STATUS: Employees who accept severance in lieu of bumping,
       -----------------
       waive any recall rights and will be considered a voluntary quit with the
       payment of the appropriate severance benefit. Employees presented this
       option must notify human resources of their decision within forty-eight
       (48) hours of the notification of layoff. Employees who do not have the
       option of bumping, and accept severance benefits, will retain recall
       rights for one (1) year from the date of layoff.

       Employees may agree in writing to waive their bumping rights as well as
       the appropriate severance benefit, thereby maintaining recall rights to
       the classification from which they were laid-off for a period of one (1)
       year. This decision must be made at the time of the initial notification
       of layoff and, once submitted, is irrevocable.

       Employees who have accepted severance and are subsequently recalled, will
       use that recall date for the purposes of calculating any severance
       benefit in the future.

       PAYMENT: Any severance payment will be paid within five (5) calendar days
       -------
       of the date of layoff.

  5.6  AFFILIATE COMPANY: It shall not be deemed a severance for the purposes of
       -----------------
       this Article if an employee is transferred to a wholly owned affiliate of
       the Employer which is bound to this agreement provided that the
       Employee's new position is covered by the Collective Bargaining Agreement
       and is the same as the position held before the transfer.

                                       10
<PAGE>

Article No. 6 - Working Hours and Rates of Pay

6.1    DEFINITIONS:
       SHIFT: Hours of work.
       -----

       SCHEDULE: Days and hours of work.
       --------

       WORK DAY: Eight (8) hours in any one (1) day shall constitute the work
       --------
       day; however the Company and Union may enter into agreements which
       establish alternative work schedules involving work days which have more
       than eight hours.

       WORK WEEK: Five (5) consecutive work days, regularly scheduled between
       ---------
       the hours of 12:01 am, Monday, and 12:00 midnight, Sunday, shall
       constitute the basic work week. The basic workweek of regular day-shift
       employees shall be from Monday through Friday and reflect a schedule of
       forty (40) hours of straight-time work.

       REGULAR DAYS OFF: Days off shall be consecutive, however, they may not be
       ----------------
       within the basic workweek.

       REGULAR DAY-SHIFT EMPLOYEES: Regular day shift employees are those
       ---------------------------
       employees who are assigned to shifts which are established on a Monday
       through Friday schedule and work a shift which begins between the hours
       of 7:00 am and 11:59 am. When mutually agreed to by the Union and
       Company, the day shift starting time may be scheduled as early as 6:00 am
       to take advantage of daylight hours.

       SEVEN DAY COVERAGE: A schedule of fixed or rotating shifts that cover
       ------------------
       seven (7) days per week, twenty-four (24) hours per day.

       SHIFT EMPLOYEES: Shift employees are all employees not defined as regular
       ---------------
       day-shift employees. This includes employees
       assigned to fixed shifts and seven (7) day coverage.

       SHIFT DESIGNATIONS: No shift periods shall start between the hours of
       ------------------
       12:01 am and 5:59 am, unless mutually agreed to by memorandum of
       understanding between the Company and the Union The follow designations
       shall apply:

           FIRST SHIFT: All eight (8) hour shift periods regularly scheduled to
           -----------
           begin at 6:00 a.m., or thereafter but before 12:00 noon shall be
           designated as first shifts.

           SECOND SHIFT: All eight (8) hour shift periods regularly scheduled
           ------------
           to begin at 12:00 noon or thereafter but before 8:00 p.m., shall be
           designated as second shifts.

           THIRD SHIFT: All eight (8) hour shift periods regularly scheduled to
           -----------
           begin at 8:00 p.m., or thereafter but before 12:01 a.m., shall be
           designated as third shifts.

       SHIFT DIFFERENTIAL: An incremental increase for working on a second or
       ------------------
       third shift.

       SHIFT PREMIUM: An incremental increase for all hours worked outside of
       -------------
       the employee's previous schedule for the first five (5) working days of a
       newly established permanent, temporary or emergency schedule.

       SHORT CHANGE: A transfer from one established schedule to another with
       ------------
       only one shift off between schedules.

       COMPANY HEADQUARTERS: Any headquarters established for the purpose of
       --------------------
       engaging in work covered by this Agreement when such work will continue
       for an indeterminate period of time.

                                       11
<PAGE>

6.2    BREAK PERIODS: A fifteen (15) minute relief period shall be provided for
       all employees not working seven day coverage during each one-half (1/2)
       of the shift. Work conditions permitting, each break period shall be
       given as near the middle of each one-half (1/2) of the shift as possible.

6.3    LUNCH PERIODS: Supervisors will establish a meal period without pay,
       approximately four (4) hours after the start of a shift. Employees who
       are required to begin their lunch more than one (1) hour before or after
       the regular start of lunch time shall be paid during the lunch period at
       the straight time rate. There are three (3) pay possibilities for
       employees with an unpaid lunch. For this example the employees shift is
       from 7:00 am to 3:30 pm with a one-half (1/2) hour lunch from 11:30 am to
       noon.

<TABLE>
<CAPTION>
       ------------------------------------------------------------------------------------------------------------------
              EXAMPLE #1                               EXAMPLE #2                             EXAMPLE #3
       <S>                                   <C>                                    <C>
       Employees who are required to         Employees who work through their       Employees who eat their lunch
       eat their lunch at 2:00 p.m.          lunch from 3:00 pm to 3:30 pm would    lunch and complete their shift (work
       would be paid eight and               be paid eight (8) hours at             until 3:30 pm) without taking a break
       one-half (8 1/2) hours of             straight time and one-half (1/2)       for lunch would be paid eight (8)
       straight-time pay.                    hour at time and one-half (1 1/2).     hours at straight-time and one (1)
                                                                                    hour at time and one-half (1 1/2).
       ------------------------------------------------------------------------------------------------------------------
</TABLE>

       REGULAR DAY-SHIFT AND SHIFT EMPLOYEES: The unpaid lunch period shall not
       -------------------------------------
       exceed one-half (1/2) hour unless mutually agreed to by the Company and
       the Union.

       SEVEN DAY COVERAGE EMPLOYEES: These employees will be considered to have
       ----------------------------
       a paid lunch period as part of their regular shift.

                                    EXAMPLE

           An employee whose shift is from 7:00 am to 3:00 pm will
          have a thirty (30) minute paid lunch period to be taken in
                   accordance with operational efficiencies.

6.4   OVERTIME: In computing overtime, intermission taken out for meals served
      other than on the job shall be deducted, and any holiday or vacation paid
      in that pay period will be considered as time worked.

      TIME AND A HALF: Except as otherwise provided in this Article, the
      ---------------
      following situations shall require payment at one and one-half (1 1/2)
      times the regular established wage rate:

           .   Time worked in excess of eight (8) hours per day.

           .   Time worked in excess of any five (5) scheduled work days in that
               work week.

           .   Work scheduled in the three (3) hours immediately preceding the
               normal starting time.

           .   Employees who are scheduled to work on an observed holiday.

           .   Employees on seven- (7) day coverage who are scheduled or called
               out for overtime except as defined in "Double Time."

           .   Employees who are scheduled for overtime and such is canceled per
               Article 6.9 (REQUIRED NOTICE FOR OVERTIME).

                                       12
<PAGE>

       DOUBLE TIME: Except as otherwise provided in this Article, the following
       -----------
       situations shall require payment at two (2) times the regular established
       wage rate:

           .   Employees, other than those assigned to seven (7) day coverage
               who are scheduled to work within the first five (5) hours of the
               eight (8) hour period immediately preceding the normal starting
               time regardless of the day of the week.

           .   Employees who are called -out for work on an observed holiday.

           .   Employees who work on the second day of a two days off period, or
               on the second or fourth days off of a four days off period with
               an overtime minimum as provided in Article 6.7 (CALL-OUTS).

           .   Employees, other than those assigned to seven (7) day coverage
               who are called out for overtime work within the eight (8) hour
               period immediately preceding their normal starting time,
               regardless of the day of the week with an overtime minimum as
               provided in Article 6.7 (CALL-OUTS).

           .   Employees who are assigned to seven (7) day coverage and are
               called out for work to cover all or part of the third shift, with
               an overtime minimum as provided in Article 6.7 (CALL-OUTS).

           .   Employees called out while on vacation per the provision of
               Article 12.10 (CALL-OUT WHILE ON VACATION).

       DOUBLE TIME AND A HALF: Except as otherwise provided in this Article, the
       ----------------------
       following situations shall require payment at two and one-half (2 1/2)
       times the regular established wage rate:

           .   For all time worked in excess of sixteen (16) consecutive hours.

           .   BREAK PERIOD: Employees entitled to pay at this rate will
               ------------
               continue at this rate until they have been released for a period
               of at least six (6) continuous hours. Any break of six (6) hours
               will be considered an interruption of continuous work time. It is
               understood that any employee may be returned to work exactly six
               (6) hours from their most recent release, satisfying the required
               break. It is also understood that any employee released for such
               a break may be called back to work before six (6) hours have
               elapsed.

                                           EXAMPLE

                     If an employee's normal quitting time is 4:30 P.M. and
                       who is called back and including travel time, takes
                       their time back before 10:00 , will receive two and
                          one-half (2 1/2) for all time after 10:00 P.M.

           .   MEAL PERIODS: Meal periods while working overtime will not be
               ------------
               considered as part of the six (6) hour break and will not be
               considered time worked, unless employees are directed to work
               through their meal period. Employee's unpaid meal period which
               occurs during regular work hours will be included in the
               computation of the six (6) hour break, when this break is
               calculated from the end of the employee's last regular shift.
               Accordingly, an employee may be called out five and one-half (5
               1/2) hours from the end of their last regular shift without
               creating a requirement for this rate.

           .   STRAIGHT TIME PAY: Employees sent home for a six (6) hour break
               -----------------
               will not lose any straight time pay for normally scheduled
               hours, as a result of such a break.

                                          EXAMPLE

                   Employees assigned to a 7:00 am to 3:30 pm shift and
                  released two (2) hours early so they may have a six (6)
                  hour break before a scheduled outage would be paid for
                   the two (2) hours at the straight time rate and this
                          would satisfy the six (6) hour break.

                                       13
<PAGE>

       Employees must use any rest time pay accumulated as a result of an
       overtime assignment before these provisions would apply. If an employee's
       accumulated rest time does not cover the entire six (6) hour break, the
       employee will receive straight time pay for any regularly scheduled hours
       not worked due to this break.

6.5    OVERTIME EQUALIZATION: The Company will endeavor to distribute overtime
       work as evenly as possible among those employees qualified to perform
       such work. For the purpose of distributing overtime, the Company will
       maintain and post overtime lists in each sub-department indicating time
       offered and time worked. Each department will create policies and
       procedures (as defined by Article 6.1, BY LOCATION, SHIFT AND
       CLASSIFICATION), for overtime equalization through labor/management
       meetings.

6.6    PAY PROVISIONS:
       PAY DAYS: Pay days shall be at biweekly intervals.
       --------

       WAGES: The schedule of job classifications and wage rates, as mutually
       -----
       agreed to, are made a part of this agreement, and are marked "Exhibits I
       and II."

       Wages shall be paid at biweekly intervals on the Thursday following the
       close of the two week pay period provided that if the regular pay day
       falls on a holiday, payment shall be made on the preceding work day.

       SPECIAL PAY REQUESTS: The Company recognizes there will be circumstances
       --------------------
       such as weeks of vacation and vacation in association with holidays which
       will create special requests of the payroll department. Unless the
       situation is an emergency, all special checks will be limited to
       individuals who are absent for at least the Wednesday through Friday of a
       pay week. Exceptions to this practice will require written approval from
       the department manager and must be presented to payroll no later than
       forty-eight (48) hours in advance of the requested time for payment.

       RECOVERING OVERPAYMENTS: Deductions from an employee's wages, to recover
       -----------------------
       overpayments made in error, will not be made unless the employee is
       notified prior to the end of the month following the month in which the
       check in question was delivered to the employee. A schedule for
       re-payment will be agreed upon by the Company and the employee.

6.7    CALL-OUTS:
       TWO HOUR MINIMUM: Employees called out for overtime duty shall receive at
       ----------------
       least two (2) hours pay. Reasonable travel time (defined below) to and
       from home will be considered as time worked for the purpose of satisfying
       the two (2) hour minimum, and will be paid at the appropriate overtime
       rate.

<TABLE>
<CAPTION>
       ---------------------------------------------------------------------------------------------------------------
                  EXAMPLE #1                           EXAMPLE #2                            EXAMPLE #3
       <S>                                    <C>                                    <C>
       Employees called out who work two      Employees called out who work          Employees called out who work one
       (2) hours and travel one (1) hour      four (4) hours and travel one (1)      (1) hour and travel one (1) hour
       (round trip) will be paid for three    hour (round trip) will be paid for     (round trip) will be paid for two (2)
       (3) hours.                             five (5) hours.                        hours.
       ---------------------------------------------------------------------------------------------------------------
                          EXAMPLE #4                                EXAMPLE #5
                     Employees called out            Employees called out who work into their
                     who work fifteen (15)           regular shift shall be paid the appropriate
                     minutes and travel one          overtime premium for at least two (2)
                     (1) hour (round trip) will      hours, which includes travel time to work
                     be paid for two (2)             only. This does not change the normal
                     hours.                          starting time for the purpose of extending
                                                     the shift.
       -----------------------------------------------------------------------------------------
</TABLE>

                                       14
<PAGE>

       MULTIPLE CALL-OUTS: Employees called-out more than once in the twenty-
       ------------------
       four (24) hour period from midnight one day to midnight the following day
       shall be paid at least the two (2) hour minimum mentioned above for the
       first call. For subsequent calls, employees shall be paid for a one (1)
       hour minimum with the same travel time considerations mentioned above.
       For the purpose of this section, concurrent calls or successive calls
       without a break in work time shall be considered as a single call.

       TRAVEL TIME: Employees are entitled to travel time according to the
       -----------
       following chart:

           WORK LOCATIONS
           ---------------------------------------------------------
                                Las Vegas Valley        Reid Gardner
           ---------------------------------------------------------
           Las Vegas Valley          .5 hour                1 hour
           ---------------------------------------------------------
           Moapa Valley               1 hour               .5 hour
           ---------------------------------------------------------
           Boulder City             .75 hour              1.5 hours
           ---------------------------------------------------------
           St. George/Alamo           2 hours             1.5 hours
           ---------------------------------------------------------
           Mesquite                 1.5 hours             .75 hour
           ---------------------------------------------------------
           Henderson                .75 hour              1.5 hours
           ---------------------------------------------------------

6.8    REST TIME: Employees who are required to work overtime within the eight
       (8) hour period immediately preceding their scheduled starting time on a
       regular work day, shall be entitled to time off with straight time pay
       equal to time worked during this time frame. This is not applicable to a
       call out or scheduled overtime of three (3) hours or less immediately
       proceeding the employee's normal starting time.

       If an employee is entitled to rest time off, such time off would normally
       begin at the start of the regular shift. By mutual agreement between the
       supervisor and the employee, rest time may be taken during the last part
       of the regular shift. An employee shall not be required to work during
       his rest period provided adequate relief is available, however, should an
       employee be required to work during this period, he shall receive
       straight time for all time worked during his rest period in addition to
       his rest period pay.

6.9    REQUIRED NOTICE FOR OVERTIME:
       SCHEDULED OVERTIME: In scheduling overtime work, a minimum of fourteen
       ------------------
       (14) hours notice is required, prior to the start of any overtime for a
       particular day, and before leaving the work site on a regular work day.
       Without this notice, such work will be considered as a call-out. It is
       understood that overtime, when worked as an extension of a regular shift,
       does not require such notification.

                                        EXAMPLE
                                        -------
              An employee assigned to a 7:00 am to 3:30 pm shift and held
            over for overtime and is notified to work the next day (his/her
              day off) at 7:00 am. If notification is given in the first
                 two (2) hours of held over overtime, this  overtime is
                               considered scheduled.

                                       15
<PAGE>

       CANCELING OVERTIME: A minimum of twelve (12) hours notice is required on
       ------------------
       canceling pre-scheduled overtime. When customer arrangements are
       involved, the Company must provide twelve (12) hours notice prior to the
       employee's next normal starting time.

       When such notice of cancellation of pre-scheduled overtime work is not
       given in accordance with the above, employees involved will be paid for
       two (2) hours at established overtime rates if they report and are
       retained for work. When such notice of cancellation is not given in
       accordance with the above, but employees are later notified of work
       cancellation, they will be paid for two (2) hours at time and one-half (1
       1/2). If they report and are not retained for work, they shall receive
       pay for two (2) hours at time and one-half (1 1/2).

6.10   SHIFT DIFFERENTIAL: Seven (7) day coverage employees will be paid the
       shift differential applicable to the shift under which any hours worked
       may fall. Fixed shift employees will be paid their shift differential for
       all hours worked on that day.

                                      EXAMPLE
                 A second shift employee who works ten (10) hours on
                 a particular day would be paid ten (10) hours of
                             second shift differential.

       FIRST SHIFT: No shift differential shall be paid for the first shift.
       -----------

       SECOND SHIFT: A differential shall be paid for the second shift according
       ------------
       to the following schedule:
       February 1, 2000................. $1.30 per hour
       February 1, 2001................. $1.35 per hour

       THIRD SHIFT: A differential shall be paid for the third shift according
       -----------
       to the following schedule:
       February 1, 2000................. $1.45 per hour
       February 1, 2001................. $1.50 per hour

       The appropriate overtime rate will be applied to the shift differential.
       Shift differentials shall be payable only for hours actually worked and
       shall not be payable for non-work time such as holidays, sick leave,
       vacation and rest time.

6.11   ESTABLISHING PERMANENT SCHEDULES: The right to establish working
       --------------------------------
       schedules and methods of shift rotation for employees, to assign
       individuals to schedules and to make changes in schedules, rests with the
       Company. Whenever the Company assigns an employee to a schedule which is
       different than the schedule they are regularly assigned and such
       assignment is expected to last ninety (90) days or more, the following
       conditions shall apply:

       NOTIFICATION: Employees will be given as much notice as possible and in
       ------------
       all cases, at least twenty four (24) hours and prior to the end of their
       last regular shift. In this notification, the employee will be informed
       of the hours of work, including the days off and meal periods if
       applicable, work location, expected duration of the shift if other than
       indefinite, estimated composition of the work force, and the type of the
       shift (regular day, fixed shift, or rotating). The Company will limit
       days off to days inclusive of or in conjunction with Saturday or Sunday
       providing that such schedules will not interfere with the continuous
       rendering of service by the Company. If the Company fails to satisfy the
       twenty-four (24) hour notification requirement, the premium for the first
       five (5) days of the new shift will be extended until the notification
       requirement has been satisfied.

                                       16
<PAGE>

       STAFFING OF SCHEDULES:
       VOLUNTEERS: When new shifts are announced, the Company will permit
       ----------
       affected employees to volunteer for these assignments. The highest
       Company seniority will be used to select from the volunteers and these
       employees will not receive a premium for their first five (5) days of
       this new assignment.

       LEAST SENIOR QUALIFIED: The least senior, qualified employee in the
       ----------------------
       classification affected, may be assigned. Any employee so assigned will
       receive a premium of time and one-half (1 1/2) for the first five (5)
       days of this assignment for all hours worked outside of their previous
       schedule.

       RIGHT OF ASSIGNMENT: The Company may assign employees to these schedules
       -------------------
       for operational efficiency purposes. Any employee so assigned will
       receive a premium of time and one-half (1 1/2) for the first five (5)
       days of this assignment for all hours worked outside of their previous
       schedule.

       SHIFT DIFFERENTIAL: The appropriate shift differential, if any, shall
       ------------------
       apply immediately to all hours worked for those who volunteer for these
       shifts. For those employees paid a premium for the first five (5) days of
       such an assignment, the shift differential will apply beginning on the
       sixth day of the assignment, or the first day on which the premium is not
       paid.

       RETURN TO ORIGINAL OR OTHER SCHEDULE: Employees who are assigned to a new
       ------------------------------------
       schedule and are returned to their original schedule before five (5) days
       have elapsed, will be entitled to the premium mentioned above for the
       five (5) day period. Employees assigned to a second, new schedule during
       the initial five (5) day premium payment period will receive an
       additional five (5) days of premium from the date the new schedule
       begins.

<TABLE>
<CAPTION>
       ----------------------------------------------------------------------------------------------------------------
                           EXAMPLE                                                 EXAMPLE
       <S>                                                       <C>
       Employees who receive four (4) hours of premium per       Employees who have worked only two (2) days of a
       day who are returned to their former shift after only     new schedule and are notified they will start a
       two (2) days, would continue to receive this premium      second, new schedule on the fourth day, will receive
       for three (3) additional work days.                       eight (8) days of premium pay (three [3] for the first
                                                                 schedule and five [5] for the second).
       ----------------------------------------------------------------------------------------------------------------
</TABLE>

                                        EXAMPLE
           Employees who are assigned a new schedule during their regular
           work schedule are entitled to premium pay as outlines in Article
           6.0 for the next 40 regular straight time hours.

       TRAINING EXCEPTIONS: The Company may, for the purposes of training only,
       change schedules without incurring the premium penalties mentioned above.
       The Company will notify all employees as far in advance as possible, but
       not later than the end of their last scheduled work day in the week prior
       to such training. This notification will detail the nature, location, and
       duration of the training. If such notification is not given, and an
       employee is called at home and informed of a change in schedule for
       training purposes, this employee will be paid time and one-half (1 1/2)
       for the first two (2) days of the training for all hours worked outside
       of their normal schedule.

       TRAVEL TIME FOR OUT OF TOWN TRAINING: Any employee who is required to
       ------------------------------------
       travel out of town on a normal day off or after normal working hours for
       the purpose of Company training, will be paid actual driving time to and
       from the training site. When flying to such training, employees will be
       paid one (1) hour from their home to the airport, actual flying time to
       the destination, and one (1) hour from the airport to the hotel. All
       compensation for such travel time will be at a straight time rate and
       will not be considered time worked.

                                       17
<PAGE>

       SCHEDULE PREFERENCE AGREEMENTS: The Company recognizes that in
       ------------------------------
       departments where multiple schedules exist, there may be a desire to
       create a mechanism for movement between such schedules, while protecting
       the operational efficiencies of the organization. To satisfy these mutual
       interests, departments are encouraged to create shift preference
       agreements, which will define the terms and conditions for the transfer
       from one schedule to another. Under no circumstances, would such
       transfers create premium pay liability in accordance with the provisions
       of this Article. Each schedule preference agreement will be created
       through labor/management meetings within the affected work group and will
       be acknowledged by memorandum of agreement between the Company and the
       Union.

6.12   ASSIGNMENT TO AN ESTABLISHED SCHEDULE: When seven (7) day coverage
       employees, other than relief employees, are transferred from one schedule
       of work days or work hours to another established and populated schedule,
       they shall not be entitled to overtime compensation for work performed
       during regular work hours of any day involved in the transfer, provided
       that:

           .   They have been notified of such transfer not less than twenty-
               four (24) hours in advance of the starting time of the new shift
               or work period;

           .   They have had a minimum of one shift off between schedules;

           .   As a result of such transfer they have not been required to work
               more than forty (40) hours at the straight time rate in any work
               week involved;

           .   They have not been required to work more than one (1) short
               change in the work week involved, provided, however, that such
               short change was not the result of a voluntary action on the part
               of an employee, (i.e., Calling in sick, taking an unauthorized
               day off for personal reasons, etc.).

6.13   EMERGENCY OR TEMPORARY SCHEDULES: The Company may schedule employees to
       work for periods other than their regular work hours when additional
       schedules are required for emergency or temporary conditions. Such
       conditions are expected to last for less than ninety (90) days and, if
       they exceed this time frame they will be considered to be established
       schedules requiring compliance with the procedures for staffing and
       establishing schedules defined above, unless mutual agreement to extend
       such schedules is established by the Company and Union.

       NOTIFICATION: The Company shall communicate the hours of work, meal
       ------------
       periods, days off, location, nature of the work, estimated composition of
       the workforce, and expected duration of this schedule.

       STAFFING OF EMERGENCY OR TEMPORARY SCHEDULES:
       --------------------------------------------

       VOLUNTEERS: The Company may solicit volunteers for assignment to these
       ----------
       schedules. If employees volunteer for these assignments, they will
       receive a premium of time and one-quarter (1 1/4) for all straight time
       hours worked outside of their normal schedule or shift for the first five
       (5) days of this assignment. When there are more volunteers than required
       for the shift, the most senior, qualified employees will be assigned.

       LEAST SENIOR QUALIFIED: The least senior, qualified employee in the
       ----------------------
       classification affected, may be assigned. Any employee so assigned will
       receive a premium of time and one-half (1 1/2) for the first five (5)
       days of this assignment for all hours worked outside of their previous
       schedule.

       RIGHT OF ASSIGNMENT: The Company may assign employees to these shifts for
       -------------------
       operational efficiency purposes. Any employee so assigned will receive a
       premium of time and one-half (1 1/2) for the first five (5) days of this
       assignment for all hours worked outside of their previous schedule.

       SHIFT DIFFERENTIAL: After the five (5) day premium requirement has been
       ------------------
       fulfilled, the appropriate shift differential shall apply.

                                       18
<PAGE>

       RATE OF PAY AND ROTATION: On the first day that there is no requirement
       ------------------------
       for a premium and each day thereafter, the appropriate rate of pay and
       shift differential, if applicable, will be provided for all hours worked.
       If any such schedule extends beyond forty-five (45) days, the Company and
       the Union may agree to rotate the assigned employees. Employees returned
       to their former schedule as a result of this rotation will not be
       entitled to the premium mentioned above.

       RETURN TO ORIGINAL SCHEDULE: At the completion of this assignment,
       ---------------------------
       employees will be returned to their original schedule without a
       requirement for any additional premium payment. Employees who are
       assigned to an emergency or temporary schedule and are returned to their
       original schedule before five (5) days have elapsed, will be entitled to
       the premium mentioned above for the five (5) day period.

                                  EXAMPLE
          Employees who are assigned a new schedule during their regular
          work schedule are entitled to premium pay as outlined in Article
          6.0 for the next 40 regular hours straight time hours.

6.14   OUT OF TOWN WORK:
       BOARD AND LODGING: The Company will furnish adequate board and lodging
       -----------------
       for all employees sent on out-of-town work. This rule does not apply to
       noon day meals where employees start from and return to headquarters
       everyday, nor does it apply to employees hired for any particular job
       which may be outside the city or where employees travel to and from
       regularly assigned headquarters on Company time.

       EQUALIZING ASSIGNMENTS: When making temporary out of town assignments,
       ----------------------
       the Company will endeavor to distribute such assignments equally among
       all employees qualified to perform such work.

       PER DIEM: Employees temporarily assigned to established headquarters
       --------
       located more than forty (40) miles from their regularly established
       headquarters who elect not to stay at the assigned work locations will be
       furnished transportation for the initial trip and final trip at Company
       expense, and shall receive forty-three dollars ($43.00) for each day they
       are assigned to and work at a temporary location. If work extends beyond
       the weekend, the Company may, at its option, pay travel to home base
       Friday night and return to work location Monday morning.

       MILEAGE ALLOWANCE: Except as provided herein, employees electing to
       -----------------
       travel to and from their assigned work locations shall do so at their own
       expense. When an employee is authorized to drive his own car to conduct
       Company business, he will receive a mileage allowance equal to Internal
       Revenue Services (IRS) maximum allowable mileage expense. Requests for
       the allowance described herein shall be submitted to, and distributed by
       the Company every two (2) weeks and in accordance with procedures
       established by the Company.

6.15   MEALS:
       MEAL TIMES: When working overtime before or after the regular day, or
       ----------
       shift, or when called out for overtime work, and such work is continuous
       for two (2) hours or more, the Company shall provide all meals unless
       employees are released before the meal time. The normal unpaid meal times
       shall be:

           .   one and one-half (1 1/2) hours before the employee's normal
               starting time,

           .   eight (8) hours before the employee's normal starting time,

           .   four (4) hours after the normal starting time, and

           .   two (2) hours after the normal quitting time,

                                       19
<PAGE>

                                    EXAMPLE
               If an employee's normal quitting time is 4:30 P.M. and is
               held over until 6:00 A.M. the meal times will be 6:30
               P.M., 10:00 P.M. and 4:30 A.M.

                                    EXAMPLE
               If an employee is called out on his normal day off
               (example Saturday) and has a normal schedule of 6:00 A.M.
               to 4:30 P.M. and reports to work at 6:00 A.M. and works
               until 6:30 P.M. that day, the meal times will be 12:00
               P.M. and 6:30 P.M.

                                    EXAMPLE
               If an employee is scheduled on his normal day off
               (example Saturday), has a normal schedule of 6:00 A.M. to
               4:30 P.M. reports to work at 6:00 A.M. and works until
               6:30 P.M. the meal times will be 6:30 P.M. That employee
               does not get the noon time meal ticket when his day is
               scheduled.

       Meals will be provided as close to these times as circumstances of the
       work will permit. Employees may elect to complete their assignment and
       take their meal period upon completion of their task. This meal period
       would be unpaid time unless directed by supervision to work through the
       meal period and such work continues more than one (1) hour from the
       stated meal time. This paid meal period will be limited to one-half (1/2)
       hour at the appropriate rate of pay.

       CALL OUT: When an employee is called out one and one-half (1 1/2) hours
       --------
       or more previous to his starting time, the Company shall provide
       breakfast and a reasonable time to eat same.

       MEAL RATES: When employees are released on or after a normal meal period,
       ----------
       or periods as outlined above, and do not elect to eat a Company provided
       meal, they shall be given a meal allowance of $9.00. These allowances
       will be paid through the payroll system in the employee's next paycheck.
       The meal allowance shall be increased to:

           .   nine dollars and fifty cents ($9.50) effective February 1, 2000

           .   nine dollars and seventy-five cents ($9.75) effective February 1,
               2001.

       ACTUAL COST: If an employee elects to consume a meal in lieu of the
       -----------
       allowance, the cost of any meal shall not exceed two (2) times the
       allowance as provided for above. If the cost of the meal exceeds this
       amount, the employee will be notified of the amount of the difference and
       the employee must reimburse the amount within thirty (30) calendar days
       after receipt of such notification. These limitations may be waived by
       the department's Vice President if such limitations place an undue
       hardship on the employee.

6.16   REPORTING LOCATION: Employees in the bargaining unit shall report for
       work at regularly established Company headquarters, shall travel from job
       to job and between job and headquarters on Company time and shall return
       to the regularly established Company headquarters at the conclusion of
       the day's work.

6.17   EARLY RELEASE: Employees relieved from duty, for reasons other than
       misconduct, during the first half of the regular day or regular shift
       shall be paid for not less than one-half (1/2) of the shift; if relieved
       after having been on duty more than one-half (1/2) of the regular day,
       they shall be paid for a full shift, except that if they are relieved at
       their own request they shall be paid only for time worked. These
       provisions do not apply to overtime assignments.

                                       20
<PAGE>

Article No. 7 - Seniority and Promotions

7.1  SENIORITY: There shall be one (1) type of seniority, namely, Company
     seniority. Company seniority shall be considered in such matters as
     retirement, lay off, and whenever provisions of this agreement refer to
     seniority. In cases where two or more employees have the same Company
     seniority, the employee with the higher total score on the most recent
     performance appraisal shall have the greater seniority.

7.2  SENIORITY POSTINGS: The Company shall post a Company seniority list on
     bulletin boards every six (6) months and shall mail a copy of this list to
     the Union when the list is posted and after any corrections are made. Any
     seniority corrections should be made in writing to human resources.

7.3  STAFFING VACANCIES:

     POSTING REQUIREMENT:  When there are no qualified employees who have
     --------------------
     requested an intra-departmental work location change into job vacancies
     which are expected to last for more than ninety (90) days, the Company
     shall post such job vacancies or new jobs on bulletin boards for a period
     of seven (7) calendar days. It shall be the duty of the Company to set
     forth in said bulletins the nature of the job, its location and duties,
     reasonable qualifications required and the rate of pay, unless such
     information is listed in the collective bargaining agreement. At the same
     time, the Company will furnish the Union a copy of this bulletin. Employees
     may file their applications in the Human Resources department by Company
     mail or by U.S. Mail. However, the Company may not consider any application
     received after the job bid closing date. All job vacancies must be awarded
     within twenty-one (21) calendar days of the job bid closing date. If the
     award is not made within twenty-one (21) calendar days, and is not delayed
     due to vacations or bid hearings, the successful employee will be paid the
     new rate for the period from the twenty-one (21) days to the date of the
     award. This does not apply to the time frame of up to three (3) weeks after
     the award for the purpose of transitioning responsibilities.

     JOB POSTING SYSTEM:  The Company shall publish job posting and awarding
     -------------------
     procedures which, at a minimum, comply with the provisions of this
     agreement. These procedures will constitute the Company's job posting
     system. Any bargaining unit employee covered by either the clerical or
     plant collective bargaining agreements may apply and compete equally for
     any position within the Company. Employees are disqualified from bidding if
     their most recent performance appraisal total score is less than 2.5 or if
     they have a letter of discipline which is less than one (1) year old in
     their Human Resources personnel file.

     SELECTION CRITERIA:  Exclusive of the provisions of Articles 7.9 (INTRA-
     -------------------
     DEPARTMENTAL WORK LOCATION CHANGE), in filling vacancies the following
     factors shall be considered:

          .    Trade Knowledge
          .    Training
          .    Past Performance with the Company
          .    Ability, skill, adaptability, efficiency
          .    Performance appraisal scores
          .    In addition, the Company retains the right to administer equally
               fair tests, demonstrations, or physical assessments when such
               tests will assist materially in determining the qualifications of
               employees.

     When, in the discretion of the Company, all factors are substantially
     equal, Company seniority shall govern.

                                       21
<PAGE>

     HEARING PROCEDURES:  In lieu of any grievance procedure concerning Article
     -------------------
     7.3 (STAFFING VACANCIES), the Company shall offer the three (3) most senior
     bidders (if applicable) and the employee with the second highest matrix
     score (if applicable) who are more senior than the successful bidder a
     hearing before the bid committee with the steward for the department, the
     senior person or persons and one (1) other Union member. If the number of
     senior bidders exceeds the parameters mentioned above, a group meeting will
     be conducted with the remaining senior bidders to explain the decision and
     answer any relevant questions. The Company shall not assume any penalty for
     bid hearings that are delayed.

     NO QUALIFIED BIDDERS:  If no applications are received from any qualified
     ---------------------
     bargaining unit employees within the posting period, the Company may then
     fill the job from outside the bargaining units.

7.4  TEMPORARY APPOINTMENTS: Wherever a vacancy occurs in any job
     classification, the Company may, at its discretion, temporarily fill such
     vacancy. If practical, any such temporary appointment shall be given to an
     employee who would be eligible under the provisions of this agreement.

7.5  MOVING EXPENSES: Should the Company assign an employee, who has not
     volunteered for reassignment, to an established Company headquarters
     located more than thirty (30) driving miles by the most reasonable route
     from his regularly established Company headquarters, and such assignment is
     not temporary in nature, the Company will pay the employee $1200 for moving
     expenses, for the purpose of establishing a new primary residence, within a
     two (2) year period immediately following such assignment. In addition, the
     Company shall pay the actual costs to relocate a mobile home which is the
     employee's primary residence.

7.6  SUB-DEPARTMENTS: When employees are awarded bids in the sub-department in
     which they are working, in accordance with Article 7.3 (STAFFING VACANCIES)
     of this agreement, their rate of pay for the awarded job shall be the rate
     established for the classification as listed in the appropriate agreement.
     If the awarded job has more than one rate, such rates being based on time
     spent in classification, the employees shall be assigned the lowest rate in
     the classification which will provide an increase to the employees.
     Employees thus assigned a rate step above the starting rate will not
     advance to a higher step until they have served the time indicated by the
     assigned step. Should no rate in the classification provide an increase,
     the employee shall be assigned the "there-after" rate of the new
     classification.

                                    EXAMPLE

        A Maintenance Technician being paid $21.81 per hour, enters an
         apprentice program which has eight (8) annual step rates. The
          Maintenance Technician will receive the rate of $22.07 and
         remain at that step for two (2) years before advancing to the
                                  next step.

     For purposes of this Article, "sub-departments" are Operations,
     Maintenance, Warehouse, Clerical.

7.7  DELETE

7.8  TRIAL PERIOD: Employees promoted or transferred in accordance with this
     Article shall be

                                       22
<PAGE>

     employed on the job to which they were promoted or transferred for a
     reasonable trial period not to exceed six (6) months. If, following the
     trial period, they are still unable to perform the job to which they are
     promoted or transferred, they shall be returned to the former job
     classification they held or to their former or another job classification
     of similar requirements and the previous rate of pay, as determined by the
     Company. Employees who are returned to another classification in accordance
     with this Article shall not be permitted to bid on another position for six
     (6) months from the time they are returned.

7.9  INTRA-DEPARTMENTAL WORK LOCATION CHANGE: Employees desiring to change work
     locations within the same sub-department and classification shall submit a
     work location change form to the appropriate department head. Through
     labor/management meetings, departments shall develop procedures for work
     location changes.

7.10 TRANSFERS/POSITION CHANGES: At the time the short list of buyers is
     finalized, employees will only have the ability to transfer via lateral
     request or bid on position openings as they occur within generation or
     within Sierra Pacific Resources. An official vacancy in generation would be
     posted.

     This goes into effect at the time the short list of buyers is created..
     After the short list, movement between facilities will be prohibited.
     Employee will be locked into the bundle where they reside.

                                       23
<PAGE>

Article No. 8 - Grievance Procedure

8.1  DEFINITION: A grievance shall be defined as a dispute regarding the
     interpretation and application of the provisions of this Agreement filed by
     the Union or by an employee covered by this Agreement alleging a violation
     of the terms and provisions of this Agreement. However, disputes
     specifically excluded in other Articles of this Agreement from the
     Grievance Procedure shall not be construed as within the definition set
     forth above.

8.2  TIME LIMITATIONS: The Company and the Union recognize the mutual gains
     process as an effective tool in resolving differences in the work place.
     Once timely notification of a grievance has been given, the Union and
     Company may mutually agree to extend the time limitations to ensure that
     interests are clearly defined, witnesses and all persons involved receive
     proper notification and are able to attend, evidence is accurate, and
     remedies are thoroughly explored before moving to the next step. However,
     it is in the interest of both the Company and the Union to expedite the
     process and encourage the timely resolution of the issue in order to
     satisfy established time constraints.

     The Union and Company, by mutual agreement, may elect to bypass certain
     steps, due to the nature of the grievance.

     Except by mutual agreement to extend the time limitations, an arbitrator
     shall not have the authority to excuse a failure by the Union, the Company
     or the aggrieved employee to comply with the time limitations set forth,
     regardless of the reason given for such failure.

8.3  GRIEVANCE PROCESS:

     NOTIFICATION: When a dispute arises relative to the administration of the
     -------------
     provisions of this agreement, the employee and/or Union steward must
     complete a mutual gains issue form and submit it to the appropriate
     supervisor for signature no later than thirty (30) calendar days after the
     grievance first arises. The time period shall start from the first day the
     Company can show that the Union or an employee affected by the Company's
     action knew or should have known of the situation.

     At each step in the process, the Union shall officially sign off on the
     mutual gains issue and grievance forms, verifying that their interests have
     been satisfied or to pursue resolution at the next step.

     STEP ONE (MUTUAL GAINS MEETING - SUPERVISOR): The supervisor shall schedule
     ---------------------------------------------
     a meeting with the grievant and steward within seven (7) calendar days of
     receipt of the mutual gains issue form. The grievant and the supervisor
     will define interests and work on resolving the issue in a manner
     satisfying those interests. If the issue is not resolved at step one (1),
     the mutual gains issue form may be referred by the Union to the next level
     of supervision within three (3) calendar days of the step one (1) meeting.

     STEP TWO (MUTUAL GAINS MEETING - LEVEL II SUPERVISION): The next level of
     -------------------------------------------------------
     supervision shall schedule a meeting with the grievant, steward, and
     supervisor within seven (7) calendar days of receipt of the mutual gains
     issue form. The grievant and supervision will define interests further and
     work on resolving the issue at this level. If they are unable to satisfy
     interests, the Union may request a formal hearing within three (3) calendar
     days of the step two (2) meeting.

                                       24
<PAGE>

     STEP THREE (MUTUAL GAINS HEARING): The level II supervisor shall schedule a
     ----------------------------------
     hearing with the grievant, steward, supervisor, and official Union and
     Employee Relations representatives within seven (7) calendar days of
     receipt of the mutual gains issue form. Witnesses will be designated to
     testify and related evidence shall be submitted. Those in attendance shall
     discuss possible remedies, which will be implemented upon final approval by
     the official Union and Employee Relations representatives. This joint
     decision shall be final and binding on all parties. If, at the conclusion
     of step three (3), the two (2) parties are unable to resolve the issue, the
     grievance shall be reduced to writing on the grievance report form, citing
     the Article and/or section of this agreement which has been allegedly
     violated, and the Company shall sign, date, and acknowledge receipt of such
     grievance.

     STEP FOUR (UNION/COMPANY MEETING): The Union Business Manager and the
     ----------------------------------
     corresponding level of management shall schedule a meeting within ten (10)
     calendar days of receipt of the grievance report form. The department
     supervisor and/or manager, and the grievant and/or Union steward may be
     present at the request of either party. The Company and Union shall review
     the information provided, conduct further investigation if necessary, and
     shall render a joint decision which shall be final and binding on all
     parties. If the grievance is not settled at step four (4), the Company will
     communicate its position in writing within five (5) calendar days of the
     step four (4) meeting. This written notification will be sent via certified
     mail.

     STEP FIVE (ARBITRATION): Within fifteen (15) calendar days of receipt of
     ------------------------
     management's position, the Union may request arbitration by delivering a
     written notice to the labor office of its intent to arbitrate the dispute.
     If the Union does not respond within fifteen (15) calendar days, the issues
     involved in the grievance will be considered resolved and the matter
     closed.

     Within five (5) working days after receipt of the notice of intent to
     arbitrate, the parties will request the Federal Mediation and Conciliation
     Service to furnish a list of five (5) arbitrators from the southwest region
     of the United States from which the arbitrator shall be selected. Such
     selection shall be accomplished by the Union and the Company striking one
     (1) name from the list in turn until only one (1) name remains.

     In recognition of the magnitude of such decisions, arbitration relative to
     termination grievances shall be expedited whenever possible. Unless
     mutually agreed to extend the time limitations in writing, these grievances
     should be arbitrated within six (6) months of the termination date.

     The arbitrator's decision shall be submitted in writing and shall be final
     and binding on all parties to this Agreement. Nothing contained in this
     contract or any part thereof shall affect or apply to the Union in action
     it may take against the Company for failure to comply with any legally
     enforceable decision reached through arbitration.

     The cost of the arbitrator and the cost of necessary expenses required to
     pay for facilities and recording of the hearing of cases, shall be borne
     equally by the Company and the Union.

     The arbitrator shall not have the authority to modify, amend, alter, add
     to, or subtract from any provision of this Agreement.

                                       25
<PAGE>

Article No. 9 - Working Safety Committee

9.1  MUTUAL INTERESTS: The Company and the Union share a mutual interest in
     fostering safe working conditions for all employees. The Company and Union
     will endeavor to create programs, procedures and policies which will define
     Nevada Power Company and IBEW Local No. 396 as leaders in providing and
     promoting a safe workplace. The Company shall make reasonable provisions
     for the safety of employees in the performance of their work. The Union
     shall cooperate in promoting the realization of the responsibility of the
     individual employee with regard to the prevention of accidents.

9.2  SAFETY COMMITTEE: Each department shall have their own Safety Sub-
     committee, and at least one (1) representative from each departmental
     Safety Sub-committee shall serve on the Company's Safety Committee. The
     selection of the Company's Safety Committee members shall be made jointly
     by the Chairman of the committee and the Business Manager of the Union. The
     Chairman of this committee shall be selected by the Company. Each year
     thirty three and one third percent (33-1/3%) of the committee members shall
     be replaced in accordance with the selection provision.

9.3  REPORTING DEFICIENCIES: Each member of the Safety Committee shall be
     expected to actively participate in identifying and reporting to the area
     safety representative any deficiency or unsafe condition discovered in the
     assigned work area. Recommendations to improve the operational safety shall
     be made to the manager, safety services, and to the department supervisor.
     A copy shall also be presented to the Chairman at the next Safety Committee
     meeting.

9.4  SAFETY MEETINGS: Safety meetings shall be held at reasonable intervals
     subject to call by the Chairman.

9.5  SEMI-ANNUAL INSPECTIONS: Every six (6) months the Safety Committee chairman
     shall appoint at least three (3) members to perform an inspection of the
     Company facilities. If required, these inspections may occur more often at
     particular facilities. The Committee Chairman may request additional
     employees who work at the site to assist in the inspection. The Company
     will allow the appointees reasonable time, as determined by the Chairman,
     to perform this inspection. They will prepare a written report including
     recommendations for corrective actions and forward it to the Committee
     Chairman and Company President.

9.6  RULE VIOLATIONS: In the event employees violate safety rules published by
     the Company, the Company reserves the right to administer appropriate
     disciplinary action.

9.7  SAFETY INVESTIGATIONS: When a lost time disabling injury occurs as a result
     of a suspected careless act or unsafe working condition, a safety
     investigating committee shall be chaired by Safety Services to review the
     facts and reconcile safety deficiencies and recommend corrective action. A
     safety committee member designated by the Union and assigned to the work
     area in which the injury occurred, shall serve on the investigating
     committee.

                                       26
<PAGE>

Article No. 10 - Inclement Weather Practice

10.1 REGULAR EMPLOYEES: Regular employees who report for work on a scheduled
     work day and who, because of inclement weather or other similar cause, are
     unable to work in the field that day, shall receive pay for the full day.
     However, they may be held pending emergency calls and may be given first-
     aid, safety or other instruction, or they may be required to perform
     miscellaneous work in the yard, warehouse, or other sheltered locations.
     Through labor/management meetings, and in conjunction with safety services,
     each department shall establish policies which clarify safe work procedures
     during inclement weather.

10.2 PROBATIONARY AND TEMPORARY EMPLOYEES: These employees shall receive pay for
     time worked or time held on Company property or two (2) hours, which ever
     is greater.

10.3 RAIN GEAR: Employees who are required to work in the field will be assigned
     appropriate rain gear which will be maintained by the employees and
     replaced by the Company when such gear is worn out in the course of
     employment and returned to the Company by the employee.

10.4 ENERGIZED PANELS: Employees who are assigned to work in the field will not
     be required to work on exposed and energized metering panels during rainy
     weather but may be assigned related duties as necessary.

                                       27
<PAGE>

Article No. 11 - Holidays

11.1 ELIGIBLE EMPLOYEES: Regular employees and probationary employees who are
     eligible for benefits, shall be entitled to holidays off with pay.
     Employees on leaves of absence or disability leave are not entitled to
     holiday pay, except if the employee begins leave or returns from leave
     during the week of a holiday.

11.2 WORKED HOLIDAYS: Shift employees may be permitted to take holidays off
     which fall on their scheduled work days. Employees scheduled to work on a
     holiday shall be paid at the rate of time and one-half (1 1/2) for time
     worked during regular working hours in addition to holiday pay. Employees
     who are called out to work on a holiday shall be paid at the rate of double
     time for time worked in addition to holiday pay. Time worked in excess of
     the regular work day will be paid at the appropriate overtime premium.
     Except for shift employees, holidays listed below shall not be considered
     scheduled workdays.

11.3 COMPANY HOLIDAYS: When a holiday falls on a Saturday, the preceding Friday
     shall be observed, and when a holiday falls on a Sunday the following
     Monday shall be observed. Whenever an employee's regular days off are other
     than Saturday and Sunday, the first day off within the work week shall be
     considered as Saturday and the second day off within the work week shall be
     considered as Sunday for the purpose of this Article. A rotating shift
     employee working on a schedule which provides four (4) consecutive days off
     shall observe the day prior to the four (4) days if the holiday falls on
     the first of the four (4) days, and shall observe the day following the
     four (4) days if the holiday falls on any of the other three (3) days for
     the purpose of this Article.

          -----------------------------------------------------------
                   The following are to be considered holidays:
          -----------------------------------------------------------
                                         COMPANY           HOLIDAYS
          -----------------------------------------------------------
                                           2000              2001
          -----------------------------------------------------------
                New Year's Day        Dec 31, 1999           Jan 1
          -----------------------------------------------------------
              Martin Luther King's
                     Day                 Jan 17             Jan 15
          -----------------------------------------------------------
                President's Day          Feb 21             Feb 19
          -----------------------------------------------------------
             Memorial Day (observed)     May 29             May 28
          -----------------------------------------------------------
                Independence Day         July 4             July 4
          -----------------------------------------------------------
                   Labor Day             Sept 4             Sept 3
          -----------------------------------------------------------
                 Veteran's Day           Nov 10             Nov 12
          -----------------------------------------------------------
                Thanksgiving Day         Nov 23             Nov 22
          -----------------------------------------------------------
               Thanksgiving Friday       Nov 24             Nov 23
          -----------------------------------------------------------
                Christmas Eve Day        Dec 22             Dec 24
          -----------------------------------------------------------
                  Christmas Day          Dec 25             Dec 25
          -----------------------------------------------------------
                   Floating
                Birthday/Holiday               See Article 11.4
          -----------------------------------------------------------

                                       28
<PAGE>

11.4 FLOATING BIRTHDAY/HOLIDAY: An employee may observe the floating holiday on
     any work day of the year with mutual agreement by the employee and
     supervisor. Or, with seven (7) calendar days notice, an employee shall
     observe the floating holiday on any work day which falls in the same
     calendar week as the employee's birthday. For the purpose of this Article,
     the calendar week begins Sunday and ends Saturday. Should an employee be
     called in or required to work on a previously approved "holiday," the
     employee shall be paid the applicable overtime rate, except if both the
     employee and supervisor mutually agree to change the observance of the
     holiday.

     Employees who request to use their floating holiday for the purpose of
     recognizing a religious observance, will be accommodated whenever possible.
     Any difficulties in this regard should be forwarded to the Employee
     Relations area of Human Resources.

11.5 BANKED HOLIDAYS: If eligible employees are required to work on any day
     observed as a holiday and are authorized to work for the straight time
     hourly rate of pay, then an equal number of hours will be allocated to
     their banked holiday account. With written consent of the Company,
     employees may carry over up to sixteen (16) hours of banked holidays to the
     next year.

11.6 TEMPORARY AND BENEFIT INELIGIBLE EMPLOYEES: Temporary, and
     probationary employees who are not eligible for benefits will not receive
     pay for holidays not worked but shall be paid the appropriate overtime
     premium for all time worked on holidays.

11.7 SICK LEAVE IN CONJUNCTION WITH A HOLIDAY: An employee who does not report
     for work either the day before and/or the day after a paid holiday, and who
     has not been excused by his or her supervisor for either the day before
     and/or the day after a paid holiday shall receive no pay for the holiday.
     The Company may require satisfactory evidence of an employee's illness or
     injury before holiday pay will be granted. If the Company requires medical
     evidence, the Company must inform the employee of the requirement to
     provide evidence no later than two (2) hours after the employee's regular
     starting time on the day of the absence. If required and the employee does
     not comply with this request, the employee will not be paid for the holiday
     or the day of absence, and may be subject to disciplinary action.

11.8 ALTERNATIVE SCHEDULES: As a result of the implementation of alternative
     work schedules, any issues associated with the provisions of Article 11
     will be resolved by memorandum of understanding between the Company and
     Union.

                                       29
<PAGE>

Article No. 12 - Vacations

12.1 CONSIDERATIONS: Vacation with pay may be granted at any time during the
     calendar year in which it is earned, subject to the following
     considerations.

          .    Desirability of scheduling in such a manner as will cause a
               minimum of interference with service to the Company's customers,
               and;

          .    The selection of all vacation periods based on the employee's
               Company seniority, provided the selection is made no later than
               March 31st.

12.2 FIRST TWO (2) CALENDAR YEARS OF EMPLOYMENT: Probationary and regular
     employees shall earn vacation during the first two (2) calendar years of
     their employment according to the month in which they are hired.
     Probationary and regular employees may request and be granted vacation
     anytime during this period.

     Month Hired                                            Vacation Hours
     -----------                                            --------------
     January......................................................... 80 hours
     February........................................................ 77 hours
     March........................................................... 73 hours
     April........................................................... 70 hours
     May............................................................. 67 hours
     June............................................................ 63 hours
     July............................................................ 60 hours
     August.......................................................... 57 hours
     September....................................................... 53 hours
     October......................................................... 50 hours
     November........................................................ 47 hours
     December........................................................ 43 hours

12.3 ACCRUED VACATION: Regular employees will be granted vacations, with
     straight time pay, according to the following schedule:

     After Continuous Service of                            Vacation Hours
     ---------------------------                            --------------
     2 years thru 5 years...........................................  80 hours
     6 years thru 12 years.......................................... 120 hours
     13 years thru 20 years......................................... 160 hours
     21 years thru 30 years......................................... 200 hours
     31 years and above............................................. 240 hours

                                       30
<PAGE>

12.4   VACATION ADJUSTMENTS: An employee's vacation accrual shall be adjusted
       for all periods of leave of absence including leaves for illness or
       injury as defined elsewhere in this agreement by reducing the number of
       vacation hours accrued in direct proportion to the number of hours of
       leave within the employee's anniversary year. Such reductions shall be
       applied to any accrued and unused vacation available in the calendar year
       the adjustment is made, or when such adjustment exceeds the employee's
       available vacation, the excess shall be applied against the employee's
       next vacation accrual or the employee's final paycheck, whichever occurs
       first. It is understood that no adjustment to vacation accrual will be
       made for sick leave or during the first sixty (60) calendar days of any
       disability leave.

12.5   VACATION BONUS: In addition to the vacation accrued in accordance with
       the above schedule, any employee who completes ten (10) years continuous
       service and each five (5) years of continuous service thereafter, shall
       be granted a vacation bonus of forty (40) hours in the year such term of
       employment is attained. The vacation bonus will accrue, and may be taken
       subject to the provisions of this Article.

12.6   UNUSED VACATION: All unused or carried over vacation time accumulated in
       the year of termination after an employee's first anniversary date, up to
       and including the employee's last day worked, shall be paid at
       termination of employment, at the employee's current base rate. This does
       not apply to the vacation bonus when the employee has not completed the
       minimum service specified.

       It is understood that employees may not carry vacation time over to the
       following year without the written consent of the Company.

       A regular employee who has been laid off for lack of work and is recalled
       within one (1) year, who has in excess of one (1) year Company seniority,
       shall accrue vacation in accordance with Article 12.4 (VACATION
       ADJUSTMENTS).

12.7   DEPARTMENTAL POLICIES: Each department will develop standards and
       procedures for scheduling vacations which, at a minimum comply with
       Article 12.1 (CONSIDERATIONS).

12.8   HOLIDAY WHILE ON VACATION: If a holiday occurs on a work day during an
       employee's vacation, it shall not be counted as hours of vacation. The
       employee shall receive straight time pay for the holiday.

12.9   HOSPITALIZED WHILE ON VACATION: Employees on vacation who become
       hospitalized for at least one day, shall not be required to use vacation
       time during the period of incapacitation. Employees who are capable of
       completing any light duty must choose to remain on vacation or report for
       light duty.

12.10  CALL-OUT WHILE ON VACATION: An employee shall not be expected to work on
       his regularly scheduled days off immediately preceding or following pre-
       scheduled vacation. However, if an employee is called out and accepts
       such an assignment on the regularly scheduled days off immediately
       preceding or following pre-scheduled vacation, the employee shall receive
       the appropriate overtime rate for this work. An employee called out
       during scheduled vacation will be paid double time for all hours worked
       and the employee may reschedule the unused portion of his vacation hours
       in accordance with Article 12.1 (CONSIDERATIONS) above, if the call-out
       was for work during the employee's normal work hours. Additionally, if
       the call-out creates rest time, the employee may reschedule vacation
       equal to the rest time earned from this assignment.

                                       31
<PAGE>

Article No. 13 - Sick Leave

13.1   ELIGIBILITY: A regular employee and a temporary employee with more than
       1040 hours shall be entitled to accumulate sick leave with pay at the
       rate of eight (8) hours of sick leave for each month worked.

13.2   NOTIFICATION AND VALIDATION: The Company may require satisfactory
       evidence of an employee's illness or disability before sick leave will be
       granted. If an employee abuses the sick leave provisions of this
       Agreement by misrepresentation or falsification, the employee shall
       restore to the Company all sick leave payments received as a result of
       such abuse. An employee must notify their supervisor or a member of
       management, or see that their supervisor is notified, as soon as it is
       apparent that the employee will be unable to report for work. The
       employee must provide this notification before the beginning of the
       normal work day. The employee should notify the supervisor as far in
       advance as possible of the expected date of return. Lack of notification
       without a reasonable explanation will result in denial of sick pay
       benefits.

13.3   EXCLUSIONS AND EXCEPTIONS. Employees shall not be entitled to sick leave
       while on vacations (except as provided in Article 12.9 [HOSPITALIZED
       WHILE ON VACATION]), while temporarily laid off by the Company, during
       the period of notice of severance of employment, upon severance of
       employment, or while receiving disability payments or industrial
       compensation. Exhibit IV (SICK LEAVE AGREEMENT) of this Agreement
       establishes other rules and interpretations for the administration of
       these sick leave provisions.

13.4   SICK LEAVE BONUS: Employees who are eligible for sick leave in accordance
       with Article 13.1 (ELIGIBILITY), who use no more than two hundred twenty
       (220) hours of sick leave each five (5) years, shall be granted a bonus
       of five (5) days vacation in addition to that granted under the
       provisions of Article 12.3 (ACCRUED VACATION), each five (5) years based
       on the following considerations:

           .   On January 1, 1987, and January 1, of each fifth year thereafter,
               the sick leave records of those employees with hire dates prior
               to August 1, 1981, will be audited. Those employees who have used
               no more than two hundred twenty (220) hours of sick leave during
               the five (5) year period immediately preceding the audit will be
               granted five (5) days vacation to be taken within the twelve (12)
               month period immediately following the audit date and in
               accordance with the provisions of Article 12 (VACATIONS).

           .   For employees hired after July 31, 1981, their sick leave records
               will be audited as of the first day following the completion of
               five (5) years and six (6) months of service and each fifth year
               following the initial audit. Those employees who have used no
               more than two hundred twenty (220) hours of sick leave during the
               five (5) year period immediately preceding the audit will be
               granted five (5) days vacation to be taken within the next twelve
               (12) month period immediately following the audit in accordance
               with Article 12 (VACATIONS).

           .   All unused vacation accumulated under the provisions of this sick
               leave bonus plan shall be paid at termination of employment as
               provided under Article 12.6 (UNUSED VACATION) except that no pro
               rata of vacation entitlements will be allowed for time periods of
               less than five (5) years.

                                       32
<PAGE>

13.5   LIGHT DUTY: Injured employees who are temporarily unable to perform the
       functions of their own jobs but are capable of performing light duty work
       shall be released for light duty assignments either within their own
       department or another area of the Company where work is available. In the
       interest of effective case management, the light duty work program shall
       be administered by the human resources department. Employees working in
       light duty assignments shall be eligible for a percentage of their base
       pay according to the following schedule:

           .   100% of base for the first fourteen (14) calendar days

           .   95% of base for the second fourteen (14) calendar days

           .   90% of base for the third fourteen (14) calendar days

           .   85% of base thereafter

       Employees who are injured on the job and are unable to perform their
       regular duties indefinitely due to partial disability, may be subject to
       the provisions outlined in Article 14.3 (JOB INCURRED INJURY/PARTIALLY
       DISABLED EMPLOYEES).

13.6   RE-OPENER: The Company and Union may reopen the issue of salary
       protection relative to sick leave and address common interests at a
       future date. The request to discuss these issues will be made in
       accordance with the provisions of Article 17 (TERM OF AGREEMENT).

                                       33
<PAGE>

Article No. 14 - Employee Benefit Plans

14.1   GENERAL: The Nevada Power Company Self-Funded Medical Benefit Plan shall
       be incorporated, by reference, into the Agreement for purposes of
       establishing the levels of benefits for each of these plan features:

                    .  loss of time

                    .  medical expense

                    .  vision expense

                    .  dental expense

                    .  life insurance and accidental death and dismemberment.

       The Company agrees to maintain all of these benefits for eligible
       employees and will provide medical expense, vision expense, and dental
       expense coverage for eligible dependents for the life of this Agreement.
       The Company reserves the right to select any insurance carrier or to self
       insure for all or any portion of these benefits.

       PRESCRIPTIVE DRUG BENEFIT: The Company will provide to all eligible
       -------------------------
       employees and eligible dependents a discounted prescription drug service
       that allows participants to obtain prescription drugs through preferred
       pharmaceutical outlets. A service fee of ten dollars ($10.00) per trade
       name prescription or five dollars ($5.00) for generic prescription will
       be charged by the druggist. No claim forms need to be presented.

       The prescriptive drug benefit will continue to allow all eligible
       employees and dependents to obtain up to three (3) months of maintenance
       prescription drugs by mail. A service fee of $3.00 per prescription
       ($1.00 for generic) is charged, and claim forms need not be presented for
       these drugs.

       TERM LIFE INSURANCE: The Company will continue to provide a supplemental
       -------------------
       life insurance program that allows employees desiring such coverage to
       purchase term life insurance for their dependents or additional life
       insurance for themselves at group rates. Such life insurance premiums
       will be paid for by the employees through payroll deduction. All
       administrative expenses, exclusive of carrier expense normally absorbed
       in the rates, will be paid by the Company.

       DENTAL BENEFIT: The Company will continue to provide a dental care
       --------------
       benefit, expanded to include a dental PPO and an orthodontic benefit for
       all eligible employees and dependents. Coverage includes the following:

                    .  Maximum payable per year is $1,000 per person.

                    .  Preventative care is covered 100%, with the deductible
                       waived.

                    .  All other treatments are covered at the rate of 80/20 and
                       are subject to the dental exclusions noted in the Nevada
                       Power Company Self-Funded Medical Benefit Plan. Covered
                       treatments are also subject to a $25 per person
                       deductible.

       VISION BENEFIT: A vision care program will continue to be available for
       --------------
       eligible employees and eligible dependents. This plan covers professional
       services; examinations every twelve (12) months, lenses every twelve (12)
       months if needed, frames every twelve (12) months if needed, with a
       deductible amount of twenty-five dollars ($25.00) to be paid by the
       employee for each covered examination and fitting. The vision care
       program also provides one pair of prescription safety glasses to
       employees whose job duties require eye protection in accordance with the
       Company's established safety standards, once every twelve (12) months, if
       needed.

                                       34
<PAGE>

       BENEFIT ELIGIBILITY: Eligible employees are all employees who have
       -------------------
       satisfied the requirements defined in Article 5 (STATUS OF EMPLOYEES) of
       this agreement. Eligible dependents are those dependents of eligible
       employees which meet the definitions of dependents as contained in the
       Nevada Power Company Self-Funded Medical Benefit Plan referenced above.

       EMPLOYEE CONTRIBUTIONS: Employee contributions are defined below. These
       ----------------------
       rates are the maximum rates which employees would be required to pay.
       They reflect a ninety/ten (90/10) cost sharing arrangement between the
       Company and its employees. The rates listed below define a maximum
       increase of ten percent (10%) from the previous year's contribution. If
       the actual experience of the medical plan reflects an increase of less
       than ten percent (10%), the monthly contributions will be reduced to
       reflect an accurate cost sharing arrangement. If the actual experience of
       the medical plan reflects an increase of greater than ten percent (10%),
       the Company will absorb that percentage increase. The Company will
       communicate the actual monthly contribution no later than December 1st
       for the following year. The monthly contributions may change on January
       1st of each subsequent year.

<TABLE>
<CAPTION>
 -------------------------------------------------------------------------------------------------
                               1/1/2000 thru 1/1/2001                 1/1/2001 thru 1/1/2002
 -------------------------------------------------------------------------------------------------
                              HMO                 NPC Plan           HMO                NPC Plan
                           (Option C)           (Option A/B)      (Option C)          (Option A/B)
 -------------------------------------------------------------------------------------------------
 <S>                       <C>                  <C>               <C>                 <C>
  Employee Only               22.00                34.00             24.00                37.50
 -------------------------------------------------------------------------------------------------
 Employee & Spouse            45.00                71.50             49.50                78.50
 -------------------------------------------------------------------------------------------------
 Employee & Children          41.00                61.00             45.00                67.00
 -------------------------------------------------------------------------------------------------
 Employee, Spouse &
      Children                69.50                98.50             76.50               108.50
 -------------------------------------------------------------------------------------------------
   Deductible/Co-
   Insurance Limit            None                400/5500            None              400/5500
 -------------------------------------------------------------------------------------------------
</TABLE>

       PRE-TAX Account: The Company will continue to provide a pre-tax health
       ---------------
       care contributions account for employees to reduce their taxable income
       by the amount of their health care contribution.

       OPTIONS A, B AND C:
       ------------------
       The Company will continue to permit employees to select between the
       following health care plan options:

       Open enrollment period will take place as of August 1, 1998 and every 12
       months thereafter.

       Option A:

                      .    80/20 Co-insurance factor
                      .    5500.00 Co-insurance limit
                      .    400.00 Individual deductible
                      .    Family deductible (Employee & Spouse; Employee &
                           Children; Employee, Spouse & Children) equal to two
                           (2) times the individual deductible
                      .    Hospital deduction - $400.00

                                       35
<PAGE>

       Option B:

       PREFERRED PROVIDER PROGRAM: The Company will continue its Hospital
       --------------------------
       Preferred Provider Organization (HPPO) for voluntary employee
       participation, which includes a minimum of three hospitals in the Las
       Vegas, Nevada area. Employees who elect to utilize a PPO hospital will
       receive reimbursement of hospital expenses at the rate of 90/10 and the
       hospital deductible will be waived.

       The Company will continue its Physician Preferred Provider Organization
       (PPPO) for voluntary employee participation, which includes a minimum of
       400 physicians in Southern Nevada. An employee who elects to utilize a
       PPO physician will pay a service fee in accordance with the PPO medical
       expense benefit schedule incorporated in the Nevada Power Company Self-
       Funded Medical Benefit Plan referenced above. No claim forms need to be
       filed and the PPO physician will bill the Company for the remainder of
       the office visit charge.

       HOSPITAL DEDUCTIBLE: The hospital deductible will be waived for those
       -------------------
       employees who reside more than fifty (50) miles from a PPO hospital and
       use a local hospital which is not a PPO hospital. However, employees who
       elect to travel to Las Vegas and use a non-PPO hospital will pay the
       hospital deductible and receive reimbursement for hospital charges at the
       80/20 rate.

       MENTAL HEALTH BENEFIT: The Company will include outpatient mental health
       ---------------------
       counseling in its comprehensive medical plans, subject to utilization
       review. Substance abuse rehabilitation will be limited to $50,000.

       Option C:

       HEALTH MAINTENANCE ORGANIZATION: The Company will continue to permit
       -------------------------------
       eligible employees to enroll in a Health Maintenance Organization plan
       (HMO) for the purpose of providing comprehensive medical and prescription
       drug coverage.

       GENERAL BENEFIT PROVISIONS:
       --------------------------

          .  The lifetime maximum medical benefit is $1,000,000.

          .  Mandatory utilization review will be instituted for a variety of
             in-patient and out-patient services. Employees who fail to receive
             the appropriate pre-authorization for these services will receive a
             fifty percent (50%) penalty, in lieu of the stated reimbursement.

          .  All benefits are subject to the deductible and/or co-pay plus
             percentage, thereby eliminating any first dollar coverage.

          .  The Nevada Power Company Self-Funded Medical Benefit Plan will pay
             benefits only to the percentage of coverage under its plan. It will
             not provide reimbursement beyond the stated coverage in this plan,
             if it is the secondary provider to another group health plan.

          .  An orthodontic benefit of $1,500 is provided.

          .  A dental PPO is established.

          .  A hearing aid benefit of $500 every five (5) years is for the
             employee only.

       DEPENDENT CARE ACCOUNT: The Company will continue its flexible spending
       ----------------------
       account program that allows pre-tax funding of dependent care and child
       care expenses.

                                       36
<PAGE>

14.2   JOB INCURRED INJURIES/SALARY PROTECTION: Any employee who suffers a job
       incurred injury during the term of this Agreement and who is awarded
       temporary total compensation benefits as defined in the Nevada Industrial
       Insurance Act shall receive supplemental disability payments in such
       amounts and under such conditions as described below:

           .   The combined amount of disability compensation to which the
               employee is entitled under any federal, state, and local law, and
               from the Company shall not exceed the percent of the employee's
               weekly earnings, from the table listed below, where such earnings
               are computed at the employee's regular rate for a forty (40)
               hour, seven (7) day period.

           .   Supplemental payments shall be made for the first day recognized
               by the State Industrial Insurance System (SIIS), and shall
               terminate with the date of the last day of disability recognized
               by the SIIS, as evidenced by the remittance portion of the
               disability check from the SIIS, which must be presented to the
               Company, for a maximum period of benefits as defined in the
               following schedule of benefits, for any one accident regardless
               of the various periods of disability which may be compensated for
               the one accident.

                                      MAXIMUM            PERCENT OF
                   LENGTH              PERIOD               BASE
                 OF SERVICE         OF BENEFITS           EARNINGS
                 ----------         -----------           --------

                  6 months           13 weeks                55
                   5 years           26 weeks                60
                  10 years           52 weeks                65
                  15 years           60 weeks                70
                  20 years           65 weeks                75

           .   For a job incurred disability of less than five (5) days which
               does not qualify for SIIS compensation, employees must use any
               accrued sick leave, and upon exhaustion of such accrued sick
               leave shall receive disability benefits as defined above.

           .   No supplemental disability payments shall be made for any
               disabling accident caused by the injured employee's violation of
               any safety rule.

           .   Any employee who performs activities for which compensation is
               received or which exceed the scope of the prescribed physical
               limitation pertaining to such disability while receiving
               disability compensation described in this section, shall forfeit
               his entitlement to all disability benefits and his employment
               shall be terminated.

14.3   JOB INCURRED INJURY/PARTIALLY DISABLED EMPLOYEES: When, in the opinion of
       the Company's doctor after consultation with the employees' doctor,
       regular employees with at least one (1) year of Company service cannot
       perform their regular work because of partial disability, but can perform
       other work, the following plan shall be applicable:

       Each case shall be considered on its merits by a committee consisting of
       the Business Manager of the Union and an Employee Relations
       representative, and two (2) additional members, one (1) of whom shall be
       designated by the Union and the other by the Company. The committee shall
       have the authority to waive the seniority and bidding provisions of this
       Agreement in order to place the disabled employee, and it shall determine
       the seniority rights of such employee. This committee may call on anyone
       who may be able to furnish pertinent information.

       In no event will this Article apply if the employee's disability occurs
       while self-employed or working for others, for remuneration (except on
       Union business), or is involved in misconduct or an extreme violation of
       Company safety rules.

                                       37
<PAGE>

       The panel shall complete an evaluation of the type of work the employee
       is able to perform or may be able to perform in the future. Evaluation of
       the employee's capabilities may include but shall not be limited to a
       physical examination and doctors reports, the employee's physical and
       mental ability, willingness to work, and trainability.

       Depending upon the evaluation of the employee and where necessary and
       practical, the Company shall provide job related education and training.
       The panel shall also conduct periodic review of these cases to determine
       if an employee's condition has changed; if the employee's condition has
       changed, the panel will reevaluate the employee's job assignment.

       The panel will determine the job classification which is appropriate for
       the work the employee is able to perform, as well as the proper pay rate,
       taking into account the new classification pay rate or the rate indicated
       on the following schedule, whichever is greater.

               Years Of Company Service       A Pay Rate That Is Not Less Than
               ------------------------       --------------------------------
                1 to 4 years inclusive           70% base rate when injured
                5 to 14 years inclusive          80% base rate when injured
               15 to 24 years inclusive          85% base rate when injured
                  25 years and over              90% base rate when injured

       As long as such employee is paid more than the maximum rate for the job
       classification in which the employee is placed, the employee shall
       receive only fifty (50) percent of any base wage increase or lump sum
       payment in lieu of a base wage increase. Such fifty (50) percent shall be
       calculated on the employee's personal rate at the time of the increase.

       The placing of a disabled employee in a different job shall not
       constitute an increase in the Company's normal work force. However, the
       Company may temporarily increase the number of authorized positions to
       accommodate an individual when a future vacancy is clearly defined and
       recognizable.

       If the committee is unable to place an individual in accordance with
       these provisions they would be eligible for vocational rehabilitation
       training, and benefits through the State Industrial Insurance System.
       Upon this determination, the individual's employment with the Company
       will be terminated, and any accrued benefits will be paid at the time of
       termination.

       The parties agree that the provisions of this Article may be suspended
       with sixty (60) days written notice, documenting the reasons for this
       request and the interests which would need to be addressed for the
       continuance of this program.

14.4   SHORT TERM DISABILITY BENEFIT: A regular employee, or a temporary
       employee who has worked more than one thousand forty (1040) straight time
       hours who shall suffer any disabling illness or injury while not in work
       status, shall be entitled to disability payments in such amounts and
       under such conditions as described herein:

            .   An eligible employee shall be entitled to receive payments not
                to exceed the percent of the employee's weekly straight time
                earnings, such earnings to be computed on the employee's regular
                rate for a forty (40) hour, seven (7) day period, for a maximum
                period of benefits at the percent of earnings as defined in the
                following schedule of benefits.

                                       38
<PAGE>

                                      MAXIMUM            PERCENT OF
                   LENGTH              PERIOD               BASE
                 OF SERVICE         OF BENEFITS           EARNINGS
                 ----------         -----------           --------

                  6 months*           13 weeks               55
                   5 years            26 weeks               60
                  10 years            52 weeks               65
                  15 years            60 weeks               70
                  20 years            65 weeks               75

       *  Employees in this category may be granted up to thirteen (13)
          additional weeks of leave without pay for continued disability.

            .   No disability payments for an illness shall be made until at
                least a three (3) days waiting period has been observed,
                however, an employee must use accrued sick leave to satisfy the
                waiting period or to extend the waiting period to the maximum of
                the amount of accrued sick leave.

            .   Any female employee who becomes pregnant and is unable to work
                shall be entitled to disability benefits under this Article, as
                described above, subject to the following conditions. She must
                present a document from her attending physician saying that she
                is under the doctor's care because of the pregnancy and is
                unable to work. The period of the disability shall begin at
                least three (3) days after the attending physician declares the
                employee disabled and shall end when the employee is no longer
                disabled as determined by the attending physician. Pregnant
                employees must use all accumulated sick leave before disability
                payments will start. A female employee will not be eligible for
                pregnancy related disability benefits except for her own
                disability. An employee who is on maternity leave and recovering
                from disability may request to have her leave extended for up to
                three (3) months after termination of pregnancy for child care
                or other reasons.

            .   Any employee who performs activities for which compensation is
                received or which exceed the scope of the prescribed physical
                limitation pertaining to such disability while receiving
                disability compensation described in this section, shall forfeit
                their entitlement to all disability benefits and their
                employment shall be terminated.

            .   Any employee who returns to work in a light-duty status from
                short-term disability will not create a new benefit eligibility
                until they have had a full-duty release and worked for thirty
                (30) calendar days from the time of that release. If an employee
                returns to short-term disability without satisfying this
                requirement, their short-term disability benefit will reflect
                their prior usage and continue until expiration of such
                benefits.

            .   Any employee who is unable to perform the duties of their
                position as a result of a non-job-incurred injury, would be
                considered for any vacancy for which they are qualified. If
                awarded a position in accordance with Article 7 (SENIORITY AND
                PROMOTIONS), the employee would receive the appropriate rate of
                pay for that position.

            .   Any employee that exhausts their short-term disability benefit
                and is unable to return to work at that time, may request one
                unpaid leave of absence for up to ninety (90) days to allow time
                for further recuperation or possible vacancies for which they
                are qualified. Such employees will be allowed to continue their
                medical coverage at the appropriate COBRA rate for this period
                of time. If this individual is unable to return to work at the
                expiration of this unpaid leave, their employment with the
                Company will be terminated and all accrued benefits will be paid
                at the time of termination.

14.5   RETIREMENT BENEFIT: The Sierra Pacific Resources Retirement Plan, the
       successor to the Company Retirement Plan, a defined benefit pension plan
       shall be incorporated by reference into this Agreement. The Company has,
       since January 1, 1976, been paying the entire cost of this retirement
       plan. All participants in the pension plan which was in effect before
       January 1, 1976, have and are guaranteed all accrued benefits under that
       pension plan as computed on December 31, 1975.

       Effective February 1, 1990, the pension plan was amended to delete the
       provision that the

                                       39
<PAGE>

       selection of a surviving spouse benefit will revert to a single life
       annuity if the spouse predeceases the retired employee.

       Effective February 1, 2002, the popup provision contained in the plan
       will be increased to a five-year window. The popup provision is currently
       one year where an employee who at designation of retirement, elects to
       only receive a portion of money available in order to provide for the
       surviving spouse at employees death. In some instances a spouse will pass
       away prior to the retired employee causing the employee to now continue
       with the reduced benefit. This popup will allow the retired employee to
       elect to return to 100% retirement pay in the instance a spouse passes
       away first.

       Effective February 1, 1994, the pension plan was improved to provide for
       early retirement benefit reductions of 5% per year from age sixty-two
       (62).

       Effective January 1, 1989, the pension plan was changed from a social
       security offset plan to a step rate plan. Effective February 1, 1998, the
       formula for calculating benefits will be 1.35% of final five-year average
       earnings up to Social Security Covered Compensation, plus 1.8% of final
       five-year average earnings exceeding covered compensation, times service
       up to 35 years, plus 1.35% of final five-year average earnings, times
       service over 35 years. For this purpose, final five-year average earnings
       is the average of the highest sixty (60) consecutive months of earnings.

       Effective February 1, 2001, the formula for calculating benefits will be
       1.365% of final five-year average earnings up to Social Security Covered
       Compensation, plus 1.8% of final five-year average earnings exceeding
       covered compensation, times service up to 35 years, plus 1.65% of final
       five-year average earnings, times service over 35 years. For this
       purpose, final five-year average earnings is the average of the highest
       sixty (60) consecutive months of earnings.

       Effective February 1, 2002, the pension formula will be increased to
       1.4325.

       Effective February 1, 1987, entry into the pension plan shall be on the
       first day of the month coincident with, or following completion of one
       year of service and attainment of age twenty-one. Participants in the
       plan prior to February 1, 1987, shall enter the plan on the first day of
       the month coincident with, or following completion of one (1) year of
       eligibility service and attainment of age twenty-one, unless those
       participants had declined enrollment under the eligibility rules in
       effect when they had first become eligible.

       Effective February 1, 1987, vesting service shall be measured from the
       employee's date of hire or age eighteen, whichever is later. The Company
       shall make such modifications in the plan as may be required by 1) the
       Internal Revenue Service in order to qualify said benefits under the
       applicable provisions of the Internal Revenue Code and/or related rules
       and regulations; or 2) any other governmental agency having jurisdiction.
       Other modifications may be made as needed but in no event shall any
       benefits be reduced during the term of this Agreement.

       Effective February 2, 1998, all sick leave accrued at time of retirement
       will be added to the years of service for fully vested participants only.

                                    EXAMPLE
         If an employee retires June 5, 1998 and has 400 hours of sick
         leave on
         the books, the calculation would be as follows:
         1. They would still officially leave the company on June /5th/.
         2. When the pension is calculated, it would be increased to read
            that the employee received income until August 14, 1998 (400
            hours divided by 8 hours a day equals 50 days)
         3. The employee would receive a pension calculated through August
            14, 1998.

                                       40
<PAGE>

     At close of transaction of a bundle, and thereafter any employee who is at
     least 55 and still employed with the Company with 80 total points (55 +
     years of service + bonus points = 80+), can retire with full benefits as if
     they were 62. Bonus points will be added to years of service for
     calculations of retirement benefits and are awarded according to the
     following scale:

               Years of Service*                  Bonus Points
               0-9                                0
               10-14                              3
               15-19                              4
               20 plus                            5

     *Years of service will be calculated from actual hire date for purpose of
     bonus point calculation. However, the first year of actual service is not
     included in the retirement calculation.

14.6 401(K) CONTRIBUTION/COMPANY MATCH: In accordance with 401(k) documentation,
     effective July 1, 1998, the Company will provide a matching contribution of
     55 cents of the employee's contribution, to a maximum of 7% of gross
     income, to the Nevada Power Company 401(k) plan. Company contributions will
     be invested in Nevada Power Company stock.

     Effective on February 1, 1999, the Company will provide a matching
     contribution of 60 cents of the employee's contribution, to a maximum of 7%
     of gross income, to the Nevada Power Company 401(k) plan. Company
     contributions will be invested in Nevada Power Company stock.

     Effective on January 31, 2000, the Company will provide a matching
     contribution of 60 cents of the employee's contribution, to a maximum of 8%
     of gross income, to the Nevada Power Company 401(k) plan. Company
     contributions will be invested in Nevada Power Company stock.

     Effective on January 29, 2001, the Company will provide a matching
     contribution of 65 cents of the employee's contribution, to a maximum of 8%
     of gross income, to the Nevada Power Company 401(k) plan. Company
     contributions will be invested in Nevada Power Company stock.

     Effective at the expiration of the current contract, February 2002, the
     buyer will be required to provide a 401k or similar plan that is comparable
     to a 70% match up to 8% of gross income.

     Accrued benefits in each employee's account will be available for rollover
     at each employee's discretion to buyer's qualified plan, a qualified IRA,
     or may remain in the Sierra Pacific Resources 401k plan. All federal rules
     must be followed which includes not being able to add more money into the
     account once you are no longer with the company and being required to take
     the money beginning at the age of 70 1/2.

14.7 ACCIDENTAL LIFE INSURANCE: All employees covered by this Agreement will be
     covered by an accidental death and dismemberment policy in the amount of
     $50,000. This policy shall apply only when an employee is a passenger in an
     aircraft either fixed wing or helicopter, and while traveling on Company
     business. Benefits from this policy shall be in addition to any other
     insurance plan.

14.8 LONG-TERM DISABILITY INSURANCE: The Company will provide a long term
     disability (LTD) plan, to extend disability benefits at a reduced rate upon
     termination of benefits described in Article 14 .2 (JOB INCURRED
     INJURIES/SALARY PROTECTION) or 14.4 (SHORT TERM DISABILITY BENEFIT) above.
     Premiums for such coverage will be paid for by the employee, through
     payroll deduction. All administrative expenses, exclusive of carrier
     expense normally absorbed in the rates, will be borne by the Company.

                                       41
<PAGE>

Article No. 15 - Leaves of Absence

15.1 SHORT TERM LEAVES: Provided the needs of the Company will permit, time off
     without pay for any period of thirty (30) calendar days or less may be
     granted employees upon a written application to their department head
     showing good and sufficient reason for such request. This shall not be
     construed as a leave of absence without pay, as the term is used in this
     Agreement. A leave of absence without pay is defined as a period of
     authorized absence from service in excess of thirty (30) days.

15.2 JUSTIFICATION: Leaves of absence shall be granted to regular employees for
     urgent substantial personal reasons, provided adequate arrangements can be
     made to take care of the employee's duties without undue interference with
     the normal routine of work. Leave will not be granted if the purpose for
     which it is requested may lead to the employee's resignation.

15.3 DURATION: A leave shall commence on and include the first work day on which
     an employee is absent and terminate with and include the work day preceding
     the day the employee's leave expires. The conditions under which an
     employee shall be restored to employment on the termination of his leave of
     absence shall be clearly stated by the Company on the form on which
     application for leave is made.

15.4 SENIORITY: Except as otherwise provided herein, an employee's seniority
     shall not accrue while on leave without pay. However, an employee's status
     as a regular employee shall not be impaired by a leave of absence. Any
     period of authorized absence without pay for thirty (30) days or less shall
     not affect an employee's seniority status. Upon return from leave, an
     employee shall return to regular status.

15.5 UNION OFFICE: The Company shall, at the request of the Union, grant a leave
     of absence without pay for four (4) years or less to an employee who is
     appointed or elected to any office or position in the Union whose services
     are required by the Union. The seniority of an employee who is granted a
     leave of absence under the provisions of this Section shall accrue during
     the period of such leave. Upon mutual agreement with the Union, the Company
     may extend the leave of the incumbent for additional terms up to four (4)
     years per request. The Company will provide medical coverage for this
     individual at the single coverage rate. This individual must make the
     established monthly employee contribution for health coverage.

15.6 PUBLIC OFFICE: Employees elected or appointed to public office shall be
     granted a leave of absence for the duration of such appointment or
     election. Such absence shall not affect accrual rates for seniority
     purposes; however, sick leave and vacation shall not accrue during this
     period and group medical benefits shall be paid by the employee at the
     Company's current premium rate.

15.7 MILITARY LEAVE: A leave of absence shall be granted to employees who enter
     the armed forces of the United States, however, any such leave of absence
     and the reinstatement of any such employee shall be subject to the terms of
     the Selective Training and Service Act of 1940, as amended. Employees who
     are members of the armed services who are drafted and are called to active
     duty shall accrue Company seniority while they are absent on military duty.

     A regular employee, or a temporary employee who has worked more than one
     thousand forty (1040) straight time hours, who is a member of the armed
     forces reserve units, or the National Guard, and who is required to attend
     annual training sessions, will be granted a leave of absence for the
     duration of such assignment. In addition, the Company will pay such
     employee the amount, if any, by which the remuneration received from the
     government is less than the base straight time earnings the employee would
     have received for the same period, not to exceed eighty (80) hours in a
     calendar year. Such items as subsistence, travel, uniform and other
     allowances will not be included in computing the remuneration received from
     the government. The Company will require satisfactory evidence of
     attendance and remuneration received.

                                       42
<PAGE>

15.8  FAILURE TO RETURN FROM LEAVE: If employees fail to return immediately on
      the expiration of their leave of absence, or if they accept other
      employment while on leave, they shall forfeit the leave of absence and
      terminate their employment with the Company.

15.9  FUNERAL LEAVE: A regular employee, or a temporary employee who has worked
      more than one thousand forty (1040) straight time hours, who is absent
      from duty due to a death in the employee's immediate family will be
      excused without loss of regular pay for the time required not to exceed
      thirty-six (36) hours for making funeral arrangements and attending the
      funeral, provided the employee attends the funeral, furnishes a death
      certificate to the payroll department within thirty (30) days. Additional
      time may be taken to insure four working days off; any hours in excess of
      36 hours can be taken as vacation or personal time off without pay.
      Immediate family shall mean the employee's grandparents, mother, father,
      step-mother, step-father, brother, sister, spouse's grandparents, spouse's
      parents, spouse's children, spouse, son, daughter, or grandchildren.

15.10 JURY DUTY: When regular employees, or temporary employees who have worked
      more than one thousand forty (1040) straight time hours, are absent from
      work in order to serve as a juror or to report to the court in person in
      response to a jury duty summons or to report for jury examination, they
      shall be granted pay for those hours spent in such service during their
      regular work day or regular work week less the fee or other compensation
      paid them with respect to such jury duty. Employees shall furnish the
      Company with a statement from an officer of the court setting forth the
      time and days on which they reported for jury duty and their compensation
      due or received for jury duty.

15.11 SUBPOENA: If employees are absent from work, in order to serve as a
      witness in a case in a court of law to which they are not a party, either
      directly or as a member of a class action suit, and where such absence is
      in response to a legally valid subpoena or its equivalent, the employee
      shall be granted leave with pay for those hours for which the employee is
      absent from work during the employee's regularly scheduled working hours,
      provided the employee submits evidence of such service as a witness,
      detailing the time required to testify.

15.12 FAMILY LEAVE: Employees who are eligible for benefits but have less than
      one year of service with the Company are entitled to forty-five (45)
      calendar days of unpaid family leave to use for the birth or adoption of a
      child. Vacation pay may be used for a portion of this leave of absence but
      will not extend the leave to more than forty-five (45) days.

15.13 FAMILY AND MEDICAL LEAVE: Employees who are eligible for benefits and have
      one year or more of Company service may be entitled to twelve (12) weeks
      of unpaid leave in accordance with the Federal Family and Medical Leave
      Act of 1993.

                                       43
<PAGE>

Article No. 16 - Working Rules

16.1  SAFETY GEAR: Protective safety equipment such as rubber gloves, hose,
      hoods and blankets shall be used to make as safe as possible any work
      performed on any equipment having uninsulated energized parts, in
      addition, hot line tools may be used when applicable. The safety
      precautions taken by the crew are the direct responsibility of the foreman
      in charge. The Occupational Safety and Health Standards as contained in
      1910.269 sub-part "R" of the Occupational Safety and Health Act (OSHA)
      shall be considered minimum standards for work performed on electrical
      transmission and distribution equipment.

16.2  TWO MAN CREW: two (2) competent electrical workers together on the same
      fixture shall be required when performing work on wires or equipment
      carrying voltages in excess of 600 volts. One (1) of them shall serve
      principally as a standby person to render assistance in case of an
      accident. In no case when working in pairs shall they work simultaneously
      on wires or parts of different phases or polarities. One qualified
      employee shall stand by and serve principally as a safety observer to the
      other person.

16.3  DELETE

16.4  APPRENTICE PROGRAM: The Nevada Power Company Apprenticeship Training
      Program, Revision I, dated December 20, 1982, shall be incorporated by
      reference into this Agreement and any modifications or amendments must be
      handled in accordance with Article 17 (TERM OF AGREEMENT).

      Joint apprenticeship programs shall be established by the Company and the
      Union. The programs which are to be included in the training programs
      require the recommendation of the applicable Joint Apprenticeship
      Committee(s) and approval and acceptance by the President of the Company,
      and the Business Manager of the Union.

      JOINT APPRENTICESHIP COMMITTEE: Each Joint Apprenticeship Committee shall
      -------------------------------
      be composed of an equal number of members appointed by the Company and the
      Union, and an apprentice training supervisor appointed by the Company who
      will serve as Chairman of the Committees to develop, coordinate and
      administer the programs. The Joint Apprenticeship Committees shall have
      the responsibility for investigating problems of apprenticeship training
      such as standards of progress, methods of testing and scoring progress of
      apprentices and procedures for demotion or termination when apprentices
      fail to meet established standards or requirements.

      The Committee members appointed by the Union shall receive their regular
      straight time rate of pay for actual time spent in Joint Apprenticeship
      Committee meetings called by the Chairman, but limited to eight (8)
      straight time hours in one (1) day.

      APPRENTICE/JOURNEYMAN RATIO: The ratio of apprentices to journeymen shall
      ----------------------------
      not exceed one to two (1:2) or a major fraction thereof. The work
      performed by apprentices shall be assigned and reviewed by the appropriate
      working foreman or designated journeyman, subject to the approval of the
      appropriate supervisor.

      FIRST YEAR APPRENTICE: An apprentice who has been in the apprenticeship
      ----------------------
      for a period of less than twelve (12) months shall not be assigned any
      work which, in the opinion of the immediate supervisor, is hazardous.

                                       44
<PAGE>

            .  EIGHTEEN (18) MONTH APPRENTICE: Any apprentice who has been in
               -------------------------------
               the apprenticeship for a period of less than eighteen (18)
               months, shall not work on conductors energized in excess of four
               hundred eighty volts (480). After that period, the apprentice may
               work under the direct supervision of a journeyman on all voltages
               which, in the opinion of the immediate supervisor, would not
               create an undue hazard at that stage of the training.

16.5  DELETE

16.6  TOOLS, EQUIPMENT AND WORK CLOTHES: An employee shall furnish initially all
      tools and equipment which are acceptable to the Company and necessary for
      the work to be performed. The Company will furnish a suitable standard
      pair of gloves and coveralls bearing Company identification to a regular
      employee, when required in the performance of the employee's work and
      Company will replace such gloves and coveralls worn out in the Company
      service. When a safety strap or hook strap is worn out in the Company
      service or is condemned by the Company, it shall be replaced at no cost to
      the employee.

16.7  WELDING REQUIREMENTS: When an employee does welding work above ground
      floor, there shall be another employee present.

16.8  DELETE

16.9  UPGRADE: When an employee relieves an employee of a higher classification
      for two (2) or more hours, the employee shall receive the rate of pay for
      the higher classification for the time worked in the higher
      classification. However, an employee will not be upgraded when employees
      of that classification who normally report for work at the same location
      are able and available to do the work for which the upgrade is intended.

      If a shift employee, for reasons other than a scheduled vacation, is
      unable to report to work, an employee (who is on the designated days off)
      from the same classification, including relief employees in that
      classification, who normally reports for work at the same location will be
      called by telephone to cover the vacant shift. If an employee, who is on
      the designated days off, holding the same classification who normally
      reports for work at the same location is not available, the employee of
      the same classification who normally reports for work at the same location
      on the previous shift will work half of the vacant shift and the employee
      of the same classification who normally reports for work at the same
      location on the shift following the vacant shift will work the remaining
      half of the vacant shift. If for any reason these arrangements cannot be
      made, the Company may upgrade to cover the vacant shift.

      The Company may upgrade a shift employee for scheduled vacations, provided
      that all overtime involved from such upgrade be worked by an employee
      holding the classification who normally reports for work at the same
      location from which the vacation was granted. If the relief operator is
      available, that operator may be used to relieve as described under
      "Exhibit I (CLASSIFICATION DESCRIPTIONS)".

                                       45
<PAGE>

16.10  SUPERVISORY RESPONSIBILITIES IN EMERGENCY CONDITIONS: It is the intention
       of the Company that supervisors shall generally confine their activities
       to the supervision of the work or operations being performed. In certain
       instances, should emergency conditions arise, it may be necessary for
       them to perform those tasks normally assigned to bargaining unit
       employees. Under ordinary circumstances, such instances will very rarely
       occur, but since the safety of personnel or Company property may be in
       jeopardy, it must remain management's prerogative to determine when
       conditions require the actions described above.

       In the same manner it is the intention of management that the "chain of
       command" be adhered to, by both supervisors and bargaining unit
       employees. However, in the case of emergencies, there will be occasions
       when it may be necessary for a senior supervisor to bypass normal chain
       of command in order to prevent difficulties. Common sense and good
       judgment must be exercised in applying these paragraphs.

16.11  NEW CLASSIFICATIONS/WAGES: Any new rate covering work normally performed
       by employees within the bargaining unit shall first be discussed with the
       Union and the rate established for such work shall be that mutually
       agreeable to both parties.

16.12  REMOVING LETTERS OF DISCIPLINE: Any employee who receives a written
       letter of reprimand which is a part of the personnel file maintained in
       the Company's Human Resources office may, after three (3) years from the
       date of such letter, request in writing to have the letter removed. Upon
       such written request, the Company shall remove the letter and return it
       to the employee. If the behavior that warranted the letter has changed or
       been corrected, the employee's current supervisor can remove the letter
       from the employee's personnel file by documenting this change in behavior
       and providing written authorization to Human Resource Partner or labor
       representative.

16.13  REQUIRED LICENSES, PERMITS, CDL's: Employees required to operate any
       motorized vehicle or equipment on public roadways in the normal course of
       employment shall be required to possess and maintain all licenses and
       permits required by state and/or federal laws. The Company will provide
       suitable training to all employees required to operate equipment or
       vehicles where a commercial drivers license (CDL) is required and shall
       issue a certificate upon satisfactory completion of the driver training
       and testing program. Employees who by their regular work assignments, may
       be required, as a condition of employment and Nevada Revised Statue, to
       maintain an active commercial drivers license (CDL), shall be provided
       reasonable time with pay during their regular working hours, to obtain or
       renew such licenses provided such activities are not a result of the
       employees violation of any state or federal law or public policy.

16.14  VESSEL CONDITIONS: No unprotected employee will be required to enter a
       vessel or compartment where the temperature inside exceeds one hundred
       fifty degrees (150o) Fahrenheit.

                                       46
<PAGE>

Article No. 17 - Term of Agreement

17.1   DURATION: This Agreement shall take effect on June 25, 1999, and shall
       continue in effect until February 1, 2002, and shall continue in full
       force and effect from year to year thereafter unless written notice of
       termination shall be given by either party to the other at least sixty
       (60) days prior to the end of the then current term.

17.2   AMENDMENTS: If either party desires to amend this agreement, it shall
       give notice thereof to the other party at least sixty (60) days but not
       more than seventy (70) days, prior to the end of the then current term,
       and the party desiring to amend or revise this Agreement shall submit to
       the party so notified a detailed outline of the Articles and Sections to
       be amended or revised at the time the notice is given, except and unless
       otherwise mutually agreed to by the parties during this period of notice
       defined herein. Negotiations on the amendments or revisions shall take
       place, so far as possible, in the sixty (60) day period prior to the end
       of the then current term. Failure of the parties to agree on such
       proposed amendment or revision shall not cause termination of this
       Agreement unless either party has given notice of termination as provided
       in Section 1 above.

17.3   PROVISIONS IN CONFLICT WITH THE LAW: In the event that any provision of
       this Agreement shall at any time be made invalid by applicable
       legislation, or be declared invalid by any court of competent
       jurisdiction, such action shall not invalidate the entire Agreement, it
       being the express intention of the parties that all other provisions not
       made invalid shall remain in full force and effect.

17.4   CHANGE IN COMPANY STATUS: This Agreement shall be binding upon the
       successors and assigns of the Company, and no provisions, terms or
       obligations herein contained shall be affected, modified, altered or
       changed in any respect whatsoever by the consolidation, merger, sale,
       transfer, reorganization or assignment of the Company, or by any change
       in the legal status, ownership or management thereof.

       JOB SECURITY: The buyer of a bundle will be required to retain all
       represented employees physically assigned to that bundle at the close of
       transaction. Employees are assured of continued employment with their
       original NPC hire date, and their benefits are carried over to
       economically similar plans of the buyer. Effective at the close of
       transaction of a bundle and effects the assigned employees at that
       bundle.

       PENSION: Prior to the close of transaction by the bundle, negotiations
       between the Company, IBEW #396, and the buyer of the bundle will be
       conducted to consider the treatment of pension funds. Options for review
       are the transfer all required pension money to the buyer, retain the
       funds by the seller, or other options agreed to by the parties above.

       VACATION: All unused vacation will be transferred to the new owner at
       close of transaction to be used per the existing
       Collective Bargaining Agreement.

       MEDICAL/DENTAL/VISION: At the close of transaction by the bundle, the
       buyer will be required to provide Medical/Dental/Vision coverage that is
       comparable in overall value of benefit to the coverage provided under the
       present Agreement as outlined in Article 14. All current employees and
       their currently covered dependents shall be covered immediately upon
       close of transaction. There will be a seamless transition and no
       interruption of service

17.5   EFFECTIVE DATE OF AGREEMENT: It is mutually agreed by and between the
       parties signatory hereto that the Agreement dated February 1, 1994, is
       superseded by this Agreement dated as of February 1, 1998. Except as
       otherwise expressly provided herein, the provisions of this Agreement
       shall be effective February 1, 1998. The agreement of February 1, 1998 is
       superceded by this Agreement dated as of June 25, 1999. Except as
       otherwise expressly provided herein, the provisions of this Agreement
       shall be effective June 25, 1999.

                                       47
<PAGE>

17.6   CONTRACT: a new generation contract will be created at ratification of
       these term and conditions to include the items contained in the
       supplemental agreement and exclude items which are not related to
       generation as agreed to by the Company and the Union.

       The contract will include an eighteen-month extension beyond the close of
       transaction by the bundle, or after the expiration of the existing
       contract which expires in February 2002. There will be no layoff for an
       eighteen-month period of time from close of transaction by facility or at
       least February 2002.

       The Company will facilitate communications and negotiations via meetings
       between the Union and the buyer to discuss labor issues and interests.

       The buyer will become signatory with Local 396 for this Generation
       Contract at close of transaction by facility.

17.7   RETENTION BONUS: Effective at the close of transaction, bundled employees
       who remain at the plants until close of transaction of their bundle will
       receive a lump sum retention check of $2500 (grossed up for taxes).

       In addition, if the contract is ratified by July 15, 1999, employees
       assigned to generation will receive a $500 net check (grossed up for
       taxes), within two pay periods of ratification.

17.8   INCENTIVE BASED PAY: The following incentive-based pay calculation will
       be implemented for the remainder of the contract beyond February 2002.

       .  There will be 2% base wage increase for the eighteen month
          extension of the contract
       .  There is an incentive increase bonus potential of up to 4% for the
          first twelve months
       .  There is an incentive increase bonus potential of up to 2% for the
          remaining six months

       Topics to be evaluated for incentive based pay are lost time injuries,
       safety, equipment reworks, parts availability, heat rate (within
       control), capacity factor, and environmental compliance. Criteria will be
       created and incentive pay will be based on percentage of goals attained.

       Incentive based pay will be implemented January of 2000. The Company and
       Union agree to create a committee comprising of union stewards, union
       members and company representatives to define the details of the
       Incentive Based Pay program. The program details will include
       percentages, criteria, evaluation and as well as payout schedule.

       .  There is an incentive increase bonus potential of up to 4% for each
          year 2000 and 2001.

       Implementation of this program in 2000 will not effect the existing
       agreement for 3% base wage increase in 2000 and 2001.

                                       48
<PAGE>

In witness whereof, the parties hereto have executed this Agreement on June 25,
1999.

Local Union #396 of the International
Brotherhood of Electrical Workers (AFL-CIO)

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

James C. Anzinger
Business Manager and
Financial Secretary, IBEW Local 396

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

Mary Jane Willier-Reed
Vice President, Human Resources

               NEGOTIATING COMMITTEE
               ---------------------
                IBEW, Local No. 396               Nevada Power
                -------------------               ------------
                Jim Anzinger                      Mary Jane Willier-Reed
                Dennis Banfill                    Trudy Haszlauer
                Dennis Crouse                     Gerry Mikesell
                Earl Evans                        Mark Sandoval
                Adam Morrison
                Ernie Moyes
                Randy Postma
                Michael Solis
                John Workman
                Paul Turner

                                       49
<PAGE>

Exhibit I - Classification Descriptions

APPRENTICE EQUIPMENT MECHANIC

Assists the equipment mechanic while undergoing training for the journeyman
level. Does such work as tuning motors, adjusting valves and ignitions, cleaning
fuel systems and radiators, adjusting clutches, brakes and carburetors, tests
compression of oil and fuel pressure.

APPRENTICE ELECTRICAL/INSTRUMENT TECHNICIAL

Assists the generation plant electrical/instrument technician while in training
for journeyman. Assists the journeyman in the installation, maintenance, repair
and testing of electrical equipment in a generating station. Renews and
calibrates gauges and control devices on control boards; repairs and calibrates
transmitters, receivers, and control drives; and does other repair work as
directed by journeyman instrument technicians while learning trouble shooting
techniques for electronic, solid state and pneumatic instrument servicing. Will
perform additional duties as required by the electrical/instrument technician.

APPRENTICE MECHANICAL TECHNICIAN / MACHINIST

Assists the machinist while in training for journeyman; assists the journeyman
in precision work on any type of machine as well as work on the floor in tearing
down, repairing and placing into operation any plant equipment and may be
required to perform other duties as assigned.

APPRENTICE MECHANICAL TECHNICIAN / MECHANIC

Assists the mechanic while in training for journeyman; assists the journeyman in
doing general mechanic work associated with installing or repairing any plant
equipment, and will be required to work with other journeymen to learn basic
rigging, machining and welding, and may be required to perform other duties as
assigned.

APPRENTICE MECHANICAL TECHNICIAN / WELDER

Assists the welder while in training for journeyman; assists the journeyman in
performing all types of gas or electrical welding, and may be required to
perform other duties as assigned.

ASSISTANT CONTROL OPERATOR

Assists the control operator during operational emergencies, startups, shutdowns
and fuel changes. The primary function will be the manual and control work
involved in the light-off and shutdown of boilers, start-up and shutdown of
turbines and operational procedures required in changing of fuels. May also be
required to operate any or all plant mechanical or electrical equipment as
directed. Must be familiar with the trip functions and testing of all equipment
and keep records and logs as required. When necessary, will work as part of the
maintenance crew during plant shutdowns, or any emergency when necessary, may be
required to work in any position in the plant. Employees will perform any and
all tasks for which they are properly trained and can competently and safely
perform.

AUXILIARY OPERATOR

Assists control operator in all phases of operations. Inspects and operates
plant auxiliary equipment and water treatment equipment at water treatment
plant. Monitors and reads gauges, meters, and water treatment control panels to
make adjustments that ensure equipment is operating properly. Does switching in
and out of breakers. Performs good housekeeping as a matter of clean and safe
operations. When necessary will work as part of the maintenance crew during shut
downs. Leaves shift upon proper relief and performs other duties as required.
Employees will perform any and all tasks for which they are properly trained and
can competently and safely perform.

                                       50
<PAGE>

COAL YARD EQUIPMENT OPERATOR

Operates and maintains all equipment assigned to the coal yard including
railroad locomotives and cars, shakers, conveyors, separators, feeders and
crushers and such other supplemental equipment as may be assigned to the coal
yard. Will be required to work intermittently in any other classification when
assigned. Employees will perform any and all tasks for which they are properly
trained and can competently and safely perform.

CONTROL OPERATOR

Operates the controls of gas, oil or coal fired boilers and auxiliaries such as
boiler feed water and other pumps, compressors, condensers, fan motors and all
other equipment necessary for the operations of the plant. Clears boilers,
generating units and auxiliaries during outages, cooperates with the system
dispatcher's relative to load voltage changes, frequency and switch
requirements, adjusting controls of generating equipment according to operating
conditions and synchronizes the equipment with the system; maintains daily
operating log, a record of all dispatcher and trouble calls, and visitors
record; maintains in a clean and orderly manner control room, all equipment and
panels; informs his relief fully on existing and preceding operating conditions
of the plant and system; acts as part of overhaul crew during plant shutdown, or
any emergency when necessary, may be required to work in any position in the
plant. Employees will perform any and all tasks for which they are properly
trained and can competently and safely perform.

ELECTRICAL/INSTRUMENT TECHNICIAN

Performs a wide variety of skilled electrical and instrumentation work in the
installation, maintenance, repair and testing of electrical and electronic
equipment in a generation facility. Performs a wide variety of precision tests,
repairs, calibrations, modifications, maintenance and inputs on numerous
electronics, pneumatic and hydraulic systems. Must have thorough knowledge of
computer based process and electrical control systems and skill level to
troubleshoot and repair these systems. Employees will perform any and all tasks
for which they are properly trained and can competently and safely perform.

GENERATION CUSTOMER REPRESENTATIVE

Performs fairly sophisticated functions defined by regular application of office
equipment and business software systems. Extensive customer interaction and a
significant degree of decision making authority is required. Performs other
related duties as required for which the employee is capable and qualified to
perform as assigned.

LABORATORY TECHNICIAN

The laboratory technician is directly responsible for all phases of chemical
analysis and the treatment of all waters in the plant vital to the production of
steam. Must perform daily analysis on the plant's boiler water, feed water and
cooling water systems and implement proper treatment to control corrosion or
scale formation in all water pipe systems and to insure steam purity. The
laboratory technician must have a thorough knowledge of Zeolite softeners, mixed
bed demineralizers, chlorine room, and clarifier operation. Takes monthly
inventory of all chemicals and chemical supplies throughout the plant and
laboratory and makes analysis standards and plots graphs for control limits on
all chemically treated water as directed. Unloads caustic, acid and chlorine and
maintains a supply of chemicals inside the plant as necessary. The laboratory
technician at gas fired plants will calibrate all conductivity meters and
replace corrosion coupons and will perform additional duties as required.
Employees will perform any and all tasks for which they are properly trained and
can competently and safely perform.

The laboratory technician at a coal fired plant will sample and perform analysis
of coal at that plant. Sampling and analysis include collection of the sample,
riffling, pulverizing, and actual burning of the sample in the bomb calorimeter.
Analysis of the sample includes determination of the external moisture, internal
moisture, percent of ash, BTU's per pound, percent of sulfur and ash fusion.
Performs normal housekeeping duties to insure a clean laboratory and recommends
chemical supplies and materials to insure an adequately supplied laboratory.

                                       51
<PAGE>

LEAD

In the absence of appropriate supervision and when directed, leads, assists, and
works with other departmental personnel to ensure the efficient operation of
related activities. May be required to develop schedules, direct work
assignments, prepare job related reports, complete other administrative duties,
function in a journeyman capacity, and perform other work as needed. Employees
will perform any and all tasks for which they are properly trained and can
competently and safely perform.

MAINTENANCE TECHNICIAN

Performs a variety of skilled work including operating equipment, insulating,
painting, lubricating and carpentry. Will be required to perform any of the
above tasks if necessary. May be required to assist or perform work in any lower
classification. Employees will perform any and all tasks for which they are
properly trained and can competently and safely perform.

MAINTENANCE UTILITY TECHNICIAN

Does unskilled work as necessary; keeps journeyman or apprentice supplied with
tools, materials, and supplies while assisting with a specific job; cleans
working area and equipment. Operates other special equipment including
jackhammer as required and drives truck or pickup in performance of duties. A
maintenance utility technician shall not displace an apprentice or a journeyman.
Employees will perform any and all tasks for which they are properly trained and
can competently and safely perform.

MATERIAL SPECIALIST

Performs manual and clerical duties in connection with receiving, storing and
issuing supplies, tools, and equipment; unloads and unpacks incoming materials;
places, shelves and racks stock of machine, hand and construction tools;
measures, counts, cuts, crates, marks and stencils materials, supplies, tools
and equipment; keeps the premises clean; drives a car or pickup in local
purchases of materials and equipment.

MATERIAL UTILITY TECHNICIAN

Performs unskilled and semi-skilled labor as necessary. Keeps warehouse and
outside areas clean. May operate forklift for loading and unloading of materials
for deliveries. Drives warehouse vehicles for material deliveries and local
purchases of material and equipment. Two hours minimum upgrade if material is to
be purchased during town run. Must be able to obtain a CDL within 90 days of
hire date. May assist Material Specialist in putting away material and loading
material for crews. The ratio should not exceed 1 Material Utility Technician
for 7 Material Specialists (1:7). A Material Utility Technician shall not
displace a Material Specialist.

MECHANIC SPECIALIST

Maintains all types of construction and transportation equipment and
accessories. Diagnoses mechanical, hydraulic and electrical problems, makes and
recommends repairs. Designs equipment modifications. Constructs and installs
parts and similar apparatus, including booms and winches, to accommodate the
required changes. Performs pressure and structural welding, operates metal
lathes, and other precision machinery, and does other related mechanical work as
required. Maintains work and vehicle records as required by the Company.
Performs all the duties of an Equipment Mechanic or Equipment Mechanic B or
other work as assigned.

MECHANICAL TECHNICIAN / MACHINIST

Must be able to do precision work on any type machine as well as actual work on
the floor in tearing down, repairing and putting into operation any plant
equipment. Will be required to work intermittently in any of the maintenance
classifications if necessary. Employees will perform any and all tasks for which
they are properly trained and can competently and safely perform.

                                       52
<PAGE>

MECHANICAL TECHNICIAN / MECHANIC

Capable of doing general mechanical work attached to installing or repairing any
plant equipment, be familiar with work on high pressure boilers and their
auxiliaries. Will be required to work intermittently in any of the maintenance
classifications if necessary. Employees will perform any and all tasks for which
they are properly trained and can competently and safely perform.

MECHANICAL TECHNICIAN / WELDER

Performs all types of high pressure, gas and electrical welding and layout and
must have satisfactorily completed welding tests as designed by, and in
accordance with, state boiler safety requirements for high pressure vessels
operated by the Company. Will be required to work intermittently in any of the
maintenance classifications if necessary. Employees will perform any and all
tasks for which they are properly trained and can competently and safely
perform.

RELIEF ASSISTANT CONTROL OPERATOR

Performs the duties of an assistant control operator as described in this
Exhibit I. The relief assistant control operator shall be assigned to any shift
other than the usual schedule for purposes of providing relief to, or coverage
for an absent assistant control operator. Employees will perform any and all
tasks for which they are properly trained and can competently and safely
perform.

RELIEF AUXILIARY OPERATOR

Performs the duties of an auxiliary operator as described in this Exhibit I. The
relief auxiliary operator shall be assigned to any shift other than the usual
schedule for purposes of providing relief to, or coverage for an absent
auxiliary operator. Employees will perform any and all tasks for which they are
properly trained and can competently and safely perform.

RELIEF CONTROL OPERATOR

Performs the duties of control operator as described in this Exhibit I. The
relief control operator shall be assigned to any shift other than the usual
schedule for purposes of providing relief to, or coverage for an absent control
operator. Employees will perform any and all tasks for which they are properly
trained and can competently and safely perform.

TRAINER - POWER DELIVERY

Responsible for development, administration and evaluation of Power Delivery's
apprenticeship and Mechanical, Electrical and Instrumentation Journeyman
classification cross-training and refresher training. Provides classroom and
field training for existing mechanical and electrical and instrumentation
employees within Power Delivery. Assists with testing as a pre-qualifier for
prospective new hires and promotions. Accountable for testing, documenting and
providing regular updates to Power Delivery Management and others as required on
progress and qualifications of apprentices and Mechanical, Electrical and
Instrumentation Journeymen. Will work in conjunction with Power Delivery
apprenticeship committee.

                                       53
<PAGE>

Exhibit II - Schedule of Wage Rates

                             GENERATION WAGE TABLE

<TABLE>
<CAPTION>
CLASSIFICATION                        Eff 1/31/2000    Eff1/29/2001    Eff 1/29/2001
                                      T1               T1              T2
<S>                                   <C>              <C>             <C>
Materials
---------
Lead Material Specialist                      24.56           25.30            20.75

Material Specialist
   1st six months                             20.67           21.29            17.50
   2nd six months                             21.46           22.10            18.15
   Thereafter                                 22.33           23.00            18.90
   (Red Circle)                               23.02           23.71

Warehouse Utility Technician
   1st six months                             15.33           15.79            12.95
   2nd six months                             15.92           16.40            13.45
   Thereafter                                 16.51           17.00            13.95

Generation
----------

Lead Coal Yard Operator                       28.07           28.91            23.75

Lead Laboratory Technician                    27.56           28.39            23.30

Maintenance Technician
   1st six months                             18.27           18.82            15.45
   2nd six months                             18.87           19.43            15.95
   3rd six months                             19.45           20.04            16.45
   4th six months                             20.05           20.65            16.95
   5th six months                             20.63           21.25            17.45
   6th six months                             21.23           21.87            17.95
   Thereafter*                                21.81           22.47            18.45
   (Red Circle)                               24.67           25.41
   (Red Circle)                               25.12           25.88
   (Red Circle)                               27.05           27.87

Lead                                          30.36           31.27            25.65

Mechanical                                    27.62           28.45            23.35
Technician/Machinist
   (Red Circle)                               30.12           31.02
</TABLE>

                                       54
<PAGE>

<TABLE>
<S>                                            <C>            <C>               <C>
Mechanical                                     27.62          28.45             23.35
Technician/Mechanic
   (Red Circle)                                30.12          31.02

Mechanical Technician/Welder                   27.62          28.45             23.35
   (Red Circle)                                30.12          31.02

Electrical/Instrument                          27.62          28.45             23.35
Technician
   (Red Circle)                                30.12          31.02
   (Red Circle)                                30.73          31.65

Coal Yard Equipment Operator                   25.53          26.30             21.60

Relief Control Operator                        28.62          29.48             24.20

Control Operator
   1st six months                              27.16          27.98             22.95
   Thereafter                                  27.95          28.79             23.65

Relief Assistant Control                       25.75          26.52             21.75
Operator

Assistant Control Operator
   1st six months                              24.37          25.10             20.60
   Thereafter                                  25.09          25.84             21.20

Relief Auxiliary Operator                      24.57          25.31             20.75

Auxiliary Operator
   1st six months                              23.39          24.00             19.70
   Thereafter                                  23.93          24.65             20.25

Apprentice Mechanical
Apprentice
Electrical/Instrument
   Technician
   1st six months                              20.51          21.13             17.35
   2nd six months                              21.34          21.98             18.05
   3rd six months                              22.07          22.73             18.65
   4th six months                              22.83          23.51             19.30
   5th six months                              23.60          24.31             19.95
   6th six months                              24.35          25.08             20.60
   7th six months                              25.12          25.88             21.25
   8th six months                              25.88          26.66             21.90
   Thereafter*                                 27.62          28.45             23.35
</TABLE>

                                       55
<PAGE>

<TABLE>
<S>                                            <C>            <C>               <C>
Generation Customer                            16.99          17.49
Representative
Laboratory Technician
   1st six months                              22.50          23.17             19.00
   2nd six months                              23.34          24.04             19.75
   3rd six months                              24.20          24.92             20.45
   Thereafter                                  25.09          25.84             21.20

Maintenance Utility Technician
   1st six months                              11.20          11.53                NA
   2nd six months                              11.79          12.15                NA
   3rd six months                              12.38          12.75                NA
   4th six months                              12.98          13.36                NA
   5th six months                              13.56          13.97                NA
   6th six months                              14.14          14.57                NA
   Thereafter                                  14.74          15.18                NA

Trainer - Power Delivery                       30.36          31.27             25.65
</TABLE>

                                       56
<PAGE>

                                  EXHIBIT II

                        SCHEDULE OF WAGE RATES (Cont.)

NOTE: THIS LANGUAGE RELATIVE TO THE COST-OF-LIVING ADJUSTMENT REMAINS HEREIN,
----
HOWEVER, IT IS INOPERABLE AND WILL NOT BE REFERENCED REGARDING ANY MATTERS
DURING THE TERM OF THIS AGREEMENT EFFECTIVE FEBRUARY 1, 1994, BUT SHALL BE
SUBJECT TO NEGOTIATION UPON TERMINATION OF THIS AGREEMENT.

THE RATES SHOWN FOR FEBRUARY 1, 1991 ARE MINIMUM RATES. THESE RATES SHALL BE
INCREASED IF THE CONSUMER PRICE INDEX FOR URBAN WAGE EARNERS AND CLERICAL
WORKERS (CPI-W), OF DECEMBER 1990 HAS INCREASED BY MORE THAN FIVE PERCENT (5%)
WHEN COMPARED TO THE CPI-W OF DECEMBER 1989. INCREASES WILL BE GRANTED ON
FEBRUARY 1, 1991, AT THE RATE OF ONE ADDITIONAL CENT ($.01) PER HOUR, FOR EACH
FULL.125% BY WHICH THE CPI-W HAS INCREASED MORE THAN FIVE PERCENT (5%).

THE RATES SHOWN FOR FEBRUARY 1, 1992 ARE MINIMUM RATES. THESE RATES SHALL BE
INCREASED IF THE CONSUMER PRICE INDEX FOR URBAN WAGE EARNERS AND CLERICAL
WORKERS (CPI-V\I) OF DECEMBER 1991 HAS INCREASED BY MORE THAN FIVE PERCENT (5%)
WHEN COMPARED TO THE CPI-W OF DECEMBER 1990. INCREASES WILL BE GRANTED ON
FEBRUARY 1, 1992, AT THE RATE ON ONE ADDITIONAL CENT (S.01) PER HOUR, FOR EACH
FULL.125% BY WHICH THE CPI-W HAS INCREASED MORE THAN FIVE PERCENT (5%).

THE RATES SHOWN FOR FEBRUARY 1, 1993 ARE MINIMUM RATES. THESE RATES SHALL BE
INCREASED IF THE CONSUMER PRICE INDEX FOR URBAN WAGE EARNERS AND CLERICAL
WORKERS (CPI-V\I) OF DECEMBER 1992 HAS INCREASED BY MORE THAN FIVE PERCENT (5%)
WHEN COMPARED TO THE CPI-W OF DECEMBER 1991. INCREASES WILL BE GRANTED ON
FEBRUARY 1, 1993, AT THE RATE OF ONE ADDITIONAL CENT ($.01) PER HOUR, FOR EACH
FULL.125% BY WHICH THE CPI-W HAS INCREASED MORE THAN FIVE PERCENT (5%).

                                       57
<PAGE>

                                  EXHIBIT III

               International Brotherhood of Electrical Workers
                              Local Union No. 396

                            CHECK OFF AUTHORIZATION

I, _______________________________________________________, herewith authorize
                 (print name)         (employee no.)

Nevada Power Company to deduct initiation and/or reinstatement fees and monthly
dues owing to the Union, in accordance with the Constitution and By-Laws of the
Union, and direct such amounts so deducted be sent to the Secretary-Treasurer of
the Union for and on my behalf.

     When the full amount of the initiation or reinstatement fee has been
withheld from my earnings, such authorization for deduction of initiation or
reinstatement fee only shall be null and void, and shall thereafter have no
further force or effect.

     This authorization shall be irrevocable for the period of the applicable
agreement between the Union and the Company, or for one (1) year, whichever is
lesser, and shall automatically renew itself for successive yearly or applicable
agreement periods thereafter, whichever is lesser, unless I give written notice
to the Union, registered, Return Receipt Requested, of my desire to revoke the
same. The Union will notify the Company on a biweekly basis if necessary of
those employees who wish to revoke this deduction; such deductions will cease in
the pay period following receipt of such notice from the Union.

     It is recognized that neither the Company nor the Union shall be under any
liability to me, the undersigned, with respect to the deductions provided
herein.

Signed

________________________________________________________________________________

Date

________________________________________________________________________________

                                       58
<PAGE>

                                  EXHIBIT IV
                             SICK LEAVE AGREEMENT

INTRODUCTION

The Union agrees to share the responsibility in protecting the sick leave plan
from abuses by any of its members, recognizing that the plan is intended to
provide pay coverage under situations of actual need.

MEDICAL ATTENTION

Sick leave may be used for obtaining medical information or treatment including
exams or treatments for care of the eyes or teeth of eligible employees. Such
absences should be approved in advance where possible and limited to the time
necessary for treatment or examination or recovery.

ALCOHOL AND DRUG ABUSE

An employee who seeks professional treatment to correct a problem of excessive
use or dependence on a alcohol or other controlled substances will be placed on
medical leave of absence for such treatment. Available unused sick leave may be
used while under professional treatment. Arrangements for treatment must be made
with the EAP Provider and the Company and such treatments will be kept as
confidential as possible. Employees who receive such treatment will be expected
to observe all conditions and attend all meetings which are required as part of
the total rehabilitation program. Evidence of abstinence may be required as a
follow-up and negative findings may result in termination.

                                       59
<PAGE>

                                   EXHIBIT V
                          TEMPORARY LAYOFF PROVISIONS

The following provisions shall apply relative to a temporary layoff, as
referenced in Article 5.4 (LAYOFF PROVISIONS):

NOTIFICATION: Should the Company initiate a temporary layoff, affected employees
shall be notified in writing as soon as possible, and will have three (3) days
to indicate their interest for consideration in the layoff.

ELIGIBILITY: Temporary layoffs, out of line of seniority, shall be strictly
voluntary. If there are more volunteers than needed within a classification,
selection shall be determined by highest Company seniority of the interested
employees. If two (2) or more employees have the same Company seniority date,
the highest score on the most recent performance appraisal will break the tie.
If there are no volunteers, the Company shall explore other alternatives that
may satisfy the temporary layoff situation.

TIME FRAME: A temporary layoff shall be for the stated time period or less, as
indicated in writing at the time of notification. If, during the temporary
layoff, the Company recognizes that the layoff may extend beyond the original
time frame, employees in layoff status shall be given the option to extend or
return to work. If the temporary layoff ends before the stated time frame,
employees will be notified immediately, and expected to return to work the next
day unless other arrangements are approved by management.

PAY: Employees shall be paid approximately 70% of their current income, which
includes income received from unemployment compensation as a result of the
layoff. The following formula shall be used to calculate an employee's gross
wages while on temporary layoff:

     Base rate x 40 Hrs. x 70% - Unemployment Income = Weekly Gross Wages

For the purpose of this calculation, the unemployment compensation amount will
be subtracted to arrive at gross wages even if the employee does not receive
this benefit. The exception to this provision will be for the first week of the
temporary layoff, when employees will be required to serve a waiting week for
unemployment compensation. For this initial week, employees will be paid 70% of
their base rate.

VACATION: No adjustment to vacation accrual shall be made during the first sixty
(60) calendar days of a temporary layoff. However, once the sixty (60) day
period has elapsed, an employee's vacation accrual shall be adjusted and treated
as any other leave, as outlined in Article 12.4 (VACATION ADJUSTMENTS). If
employees are in layoff status and unable to use their vacation allotment for
that year, the unused vacation shall be automatically carried over to the next
year.

SICK LEAVE: Employees shall continue to accrue sick leave monthly, as if they
were working. However, employees will not be eligible to use sick leave or
short-term disability during the period for which they are on temporary layoff.

                                       60
<PAGE>

HOLIDAYS: Employees shall not be entitled to holiday pay while on temporary
layoff. The only situation that would warrant holiday pay is if they began or
were recalled from temporary layoff during the week of a holiday.

                                  EXAMPLE
                                  -------

          If the temporary layoff begins on Tuesday of a week with a
          Monday holiday, the employee would receive holiday pay for that
          day.

These provisions do not apply to the floating holiday, as the employee would be
allowed to reschedule the day at a future time. If as a result of a temporary
layoff, an employee is unable to schedule their floating holiday, they will be
allowed to carry this holiday into the following year.

SENIORITY: An employee's seniority shall continue to accrue during the period of
layoff.

BENEFITS: An employee's benefits shall remain the same during the period of
layoff. Employees monthly contribution will be deducted from these bi-weekly
checks.

PROMOTIONAL OPPORTUNITIES: Employees shall be eligible to indicate their
interest in promotional opportunities that may arise during the period of
layoff. However, they must individually assume the responsibility of meeting
appropriate deadlines for consideration. Any employee awarded a promotion or
transfer while on temporary layoff, will be returned to work immediately.

RECALL: Should the Company need to recall employees in a specific classification
prior to the previously stated date, employees shall be recalled by Company
seniority on a volunteer basis. If there are no volunteers to return, inverse
seniority will be used to satisfy these requirements. Any issues delaying an
employee's return to work will be addressed on an individual basis. However, the
monetary benefits associated with a temporary layoff will end on the date of
recall.

                                       61
<PAGE>

May 20, 1988

Mr. James Brimer
International Brotherhood of
Electrical Workers, Local 396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF UNDERSTANDING - ARTICLE 14.4
--------------------------------------

Dear Mr. Brimer:

Prior to January 1, 1976, employee participants in the Nevada Power Company
Retirement Plan were required to contribute slightly less than 3% of their
straight time earnings to defray the Company cost of retirement benefits.
Effective January 1, 1976, the Company paid the full cost of the retirement
benefits plan.

On January 1, 1988, twenty-eight (28) employees covered by the Clerical
Collective Bargaining Agreement were active employees and had made contributions
toward their retirement benefits. Records have been maintained on the amount of
each of the twenty-eight (28) employees showing the accumulation of the direct
contributions made by these employees and the earnings, through investments on
their contributions through December 31, 1975. The Company has, in accordance
with IRS regulations, agreed to credit the 12/31/75 account balances with five
percent (5%) interest per year until disposition of these funds was made
individually with each of these employees.

The Company has now agreed to standardize the retirement plans in the area of
funding for retirement benefits. To standardize, the Company has agreed to
return monies contributed prior to January 1, 1976, by the twenty-eight (28)
employees to the employees plus earnings and interest at five percent (5%) per
year if the employee requests return. The Company is permitting the selection of
several options which are described in the following paragraphs:

OPTION I:        Participants in the Nevada Power Company Retirement and
EMPLOYEE         Thrift Plan actively employed on January 1, 1988, may elect
--------
CONTRIBUTION     to receive their employee contribution to the Plan, along
------------                      --------
                 with earnings and interest, computed at 5% per annum from
                 January 1, 1976 through April 30, 1988. If the employee's
                 contributions are withdrawn, the monthly benefit that is
                 calculated using final average earnings, credited service
                 and social security benefit will not be reduced.

                                       62
<PAGE>

OPTION II:       Participants in the Nevada Power Company Retirement and
EMPLOYEE         Thrift Plan actively employed on January 1, 1988, may
--------
CONTRIBUTION     choose to leave their employee contributions in the Plan,
------------                           --------
                 along with earnings and interest computed at 5% per annum
                 from January 1, 1976, until retirement or termination from
                 Nevada Power Company and receive a lump sum payment of
                 their employee account at that time. This withdrawal of
                 the employee's contributions will not reduce his monthly
                 benefit.

OPTION III:      At the time of termination or retirement, participants in
EMPLOYER         Nevada Power Company Retirement and Thrift Plan actively
--------
CONTRIBUTION     employed on January 1, 1988, may elect to withdraw the
------------     employee contribution to the Plan which will include
                 --------
                 interest computed at 5% per annum from January 1, 1976,
                 until the date of termination or retirement. This election
                 will be available whether they have withdrawn the employee
                 contribution in 1988 or at the time of termination. If the
                 employer's contribution is withdrawn, the employee's
                 annuity would be reduced by an equivalent amount
                 calculated by accumulating the total employer account
                 value with 5% interest to normal Retirement Date dividing
                 by 120 and multiplying by the ratio of actual years of
                 credited service to years of credited service at normal
                 retirement.

OPTION IV:       Participants in the Nevada Power Company Retirement and
EMPLOYER         Thrift Plan actively employed on January 1, 1988, may
--------
CONTRIBUTION     elect to leave the employer's contribution in the Plan,
------------
                 along with earnings and interest computed at 5% per annum
                 from January 1, 1976, until the date of termination or
                 retirement. If the employer's contribution is not
                 withdrawn, there will be no reduction of the employee's
                 monthly benefit.

Very truly Yours,

/s/ Cynthia K. Gilliam
Vice President, Human Resources

ACCEPTED:

/s/ James Brimer
Business Manager and Financial
Secretary, IBEW Local 396

                                       63
<PAGE>

January 6, 1994

Mr. James Anzinger
International Brotherhood of Electrical Workers, Local 396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF UNDERSTANDING:
-----------------------

DISCIPLINE RELATIVE TO TARDINESS AND ATTENDANCE

Dear Mr. Anzinger:

Both the Company and Union recognize that having reliable employees with good
attendance is central to achieving the Company's goals and mission. Both parties
also recognize that the majority of employees have good attendance records and
display a true commitment to their occupation and work groups. However, in an
effort to assist those employees who may have an attendance problem and minimize
the burden placed on fellow employees, the Company and Union have agreed to
waive the time off the job (i.e. one (1) day suspension, three (3) day
suspension) and document those steps of progressive discipline on paper only.

It is incumbent on both parties to communicate that although employees will not
be subject to lost time, this should in no respect minimize the seriousness of
this action. This agreement will remain in effect until February 1995, at which
time the Company and Union will reconvene to discuss extending or discontinuing
this agreement.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local

                                       64
<PAGE>

January 6, 1994

Mr. James Anzinger
International Brotherhood of Electrical Workers, Local 396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF UNDERSTANDING-
------------------------

LABOR/MANAGEMENT MEETINGS

Dear Mr. Anzinger:

Both the Company and Union recognize the value in formally convening to discuss
issues that affect departmental policies, procedures, and collective bargaining
provisions. As such, during the negotiations of the Plant agreement, which
expires in February 1994, the Company and Union agreed to continue holding
departmental labor/management meetings as a forum to clarify, address interests,
and problem solve solutions that mutually benefit all employees. Attendees shall
include stewards, team leaders, and other employees reporting to that department
or location, and meetings shall be held as needed, but not less than every sixty
(60) days.

The Company recognizes the value of participation and input from all its
employees and the Union's facilitation of this process is critical to our mutual
success.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

                                       65
<PAGE>

January 6, 1994

Mr. James Anzinger
International Brotherhood of Electrical Workers, Local 396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF UNDERSTANDING:
-----------------------

ORGANIZATION STUDY

Dear Mr. Anzinger:

In May of 1993, the Board of Directors provided the necessary approval for the
Company to begin on an Organization Study. This study has provided us with an
opportunity to take a fresh look at Nevada Power Company, assess the way our
work is organized to provide faster, more efficient service to our customers,
and evaluate the way we communicate with each other to resolve problems more
efficiently.

During the negotiations of the Plant agreement, which expires in February 1994,
the Company and Union agreed that as the Company streamlines work processes,
there will be occasions which will require the Company and Union to reconvene to
discuss issues of flexibility, changes in technology, and maximizing resources.
Both parties recognize that changes promoting efficiencies in the work place
benefit all employees, and the Company and Union will continue to promote and
support ideas that meet those interests.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

                                       66
<PAGE>

January 6, 1994

Mr. James Anzinger

International Brotherhood of Electrical Workers. Local 396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF UNDERSTANDING:
-----------------------

WORK/FAMILY ISSUES

Dear Mr. Anzinger:

During the negotiations of the Plant agreement, which expires in February 1994,
the Company and Union recognize that work/family issues will continue to be at
the forefront of workplace activities. As such, the Company and Union have
agreed to address the issues of job sharing, telecommuting and other alternative
work schedules or programs which allow both the Company and employee maximum
flexibility without jeopardizing customer service.

These issues will be addressed through labor/management meetings and may be
initiated on a case by case basis.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

                                       67
<PAGE>

January 6, 1994

Mr. James Anzinger
International Brotherhood of Electrical Workers, Local 396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF UNDERSTANDING:
-----------------------

WORKING FOREMAN CLASSIFICATION

Dear Mr. Anzinger:

Both the Company and Union agree that significant changes in the generation and
warehousing departments have resulted in a redistribution of work originally
assigned to working foremen. As a result, during negotiations of the Plant
agreement, which expires in February 1994, the Company and Union agreed to
discuss working foreman pay provisions commensurate to responsibilities and the
possibility of a lump sum buyout in the form of Company stock in the employees'
401 K account. These issues and other remedies shall be discussed with the Union
and affected employees by February 1995.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local

                                       68
<PAGE>

August 12, 1996

Mr. Jim Anzinger
Intemational Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF UNDERSTANDING
-----------------------

RED CIRCLE RATES

Dear Mr. Anzinger:

This letter will document the agreement between the International Brotherhood of
Electrical Workers, Local #396, and Nevada Power Company relative to
compensation for employees paid at the red circle' rate who are reclassified to
lower-level positions outside of the job posting system (i.e., voluntary
transfers to lower-level positions, etc.).

When employees, who are paid a 'red circle' rates are reclassified to a
lower-level position, the 'thereafter" rate of the lower-level position will be
assigned.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       69
<PAGE>

December 4, 1996

 Mr. Jim Anzinger
 International Brotherhood of Electrical Workers
 Local Union #396
 3520 Boulder Highway
 Las Vegas, Nevada 89121

 LETTER OF UNDERSTANDING
 -----------------------

 Dear Mr. Anzinger:

 This letter will document the agreement between the International Brotherhood
 of Electrical Workers, Local #396, and Nevada Power Company relative to the
 Maintenance Technician Classification at Reid Gardncr.

 Both the IBEW and the Company agree to expand the role of the Maintenance
 Technician to include lubricating coal conveying equipment such as conveyors,
 feeders, etc. This is specifically non-mobile coal yard equipment.

 In addition, the following is an attempt to clarify the equipment the
 Maintenance Technicians will be authorized to operate - vacuum truck, back hoe,
 water truck, dump truck, crane, anything other than dozers, shakers and trains
 (which are the responsibility of the Coal Yard Equipment Technicians). When the
 water truck is required to be used in the coal yard on the coal pile, Coal Yard
 Equipment Operators will perform this function.

 Very truly yours,

 /s/ Daniel S. Potter
 Director Employee Relations and Diversity

 Agreed:

 /s/ James Anzinger
 Business Manager and Financial Secretary
 IBEW Local #396

                                       70
<PAGE>

March 31, 1997

Mr. Jim Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF UNDERSTANDING
-----------------------

Dear Mr. Anzinger:

This letter will document the agreement between the International Brotherhood of
Electrical Workers, Local #396, and Nevada Power Company made regarding the
movement and status of employees who were displaced during the organizational
restructuring during NP2000 in 1993/94.

The following list is an updated list to show who is still eligible for movement
and under what conditions. (NOTE: Employees who have been removed off the
original list are those who have received promotions into positions other than
those they held during the original restructuring process.)

Welders:                   Larry Eilers
                           Wilbur Tarr
Mechanics:                 Mike Solis
                           Terry Dickson
                           Dennis Banfill
Auxiliary Operator:        Clay Pulley

Should any assignment, in the above identified classifications, last longer than
90 days, the people listed above in their respective classifications will
receive the assignment based on company seniority date.

Very truly yours,

/s/ Daniel S. Potter
Director, Employee Relations and Diversity

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       71
<PAGE>

March 31, 1997
Mr. Jim Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF UNDERSTANDING
-----------------------

Dear Mr. Anzinger:

This letter will document the agreement between the International Brotherhood of
Electrical Workers, Local #396, and Nevada Power Company relative to the use of
Operations working in Maintenance at Reid Gardner.

Both the IBEW and the Company agree that it is mutually beneficial to agree to
changes that allow operations to work in maintenance and go from 12's to 10's
while assisting maintenance with required work. The following are the specifics:

1. The Company will provide seven (7) days calendar days notice. This will
result in no monetary penalty to the company. If the seven (7) days is not
followed, then penalties will be handled as identified in the CBA.

2. With regard to overtime equalization, operations will be placed in their own
classification for the purposes of overtime. This includes control operators,
auxiliary operators, and assistant control operators. Operations will also be
included on their respective overtime list for weekend coverage as long as it
doesn't interfere with the scheduled maintenance work.

The hours that they have in their current OT pool will merely be moved over.
This classification will be called after MUT's.

3. Individuals will first be asked to volunteer. If we receive no volunteers,
then we will use reverse seniority. This will be done by seniority by
classification by crew.

4. The time frame/period for pulling employees from operations to maintenance
will be throughout the duration of an outage season. This will continue for 90
consecutive days or can be extended if a person volunteers to do so. (There are
two outage seasons: January through June and July through December). This will
occur for a maximum of 180 days within a twelve month period.

5. Upon completion of the assignment, the individual will go back to the
original shift with no penalty to the employee and will fall right back into
their normal rotation.

6. In emergency situation, operators could be called back to do operations work.

7. Operators assigned to Maintenance will be paid shift differential (78 cents).

The above changes reflect the Company and Union's interest in working together
to provide a future for our employees and the ultimate success of the Company.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       72
<PAGE>

June 14, 1999

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union 9396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF UNDERSTANDING

Dear Mr. Anzinger:

This letter is to document the agreement between the Company and the Union
regarding the "Lead" classification. It is agreed that we will utilize this
classification for the Operations department at Clark/Sunrise/Harry Allen and
Reid Gardner work schedule for the position will be Monday through Thursday
0600 - 1630 with a corresponding rate of pay of $29.48.

The position description as defined in the Collective Bargaining Agreement is as
follows:

"In the absence of appropriate supervision and when directed, leads, assists and
works with other departmental personnel to ensure the efficient operation of
related activities. May be required to develop schedules, direct work
assignments, prepare job related reports, complete other administrative duties,
function in a journeyman capacity, and perform other work as needed. Employees
will perform any an all tasks for which they are properly trained and can
competently and safely perform."

Some of the duties will include maintenance of the red tag database, function as
red tag operator, coordination of the outage schedule with maintenance, and
issuing of clearances.

In addition, this individual must be highly proficient at the Combined Cycle
Control Operator position. This person will assist with unit operation and
training. Functional requirements include unit monitoring and trending for
optimum unit operational efficiencies.

The need for this lead position will be jointly re-evaluated twelve months after
its inception.

Very truly yours,

/s/ Mark Sandoval Director, Plant Operations

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW #396

                                       73
<PAGE>

July 26, 1999

Mr. James Anzinger:
International Brotherhood of Electrical Workers
Local Union 4396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF UNDERSTANDING
-----------------------

Dear Mr. Anzinger:

This letter is to document the agreement between Nevada Power Company and the
International Brotherhood of Electrical Workers, Local Union #396, regarding
training being conducted for operations and lab employees at the Reid Gardner
and Clark Sunrise / Harry Allen generation facilities on an individuals day off.

An individual or individuals that voluntarily come to the plant site for the
specific intent of receiving formalized training shall receive such training, on
straight time.

This job specific training must be formally outlined and documented. This
training may include application of an operating procedure, such as the startup
of a unit or rolling a turbine, etc., where the trainee is receiving on the job
training by assisting another with a specific assignment that has been formally
outlined for the purpose of being documented. This does not apply to instances
where an employee is called out to assist another with a specific assignment due
to operational needs.

Very truly yours,

/s/ Mark Sandoval
Director
Power Delivery Operations

AGREED:

/s/ James Anzinger

Business Manager and Financial Secretary
IBEW #396

                                       74
<PAGE>

August 23, 1999

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF UNDERSTANDING
-----------------------

Dear Mr. Anzinger:

This letter is to document the agreement between the Company and the Union
regarding the Retail Customer Representative position currently located at Reid
Gardner Station, which supports Clark Station as well. This position is
currently held by Debbie Hardy.

It is agreed that with the creation of the generation-specific contract, this
position will become a part of the Generation Collective Bargaining Agreement,
eliminating the need for the clerical agreement at the plants.

The position title is Generation Customer Representative. The position job
description is as follows- Performs fairly sophisticated functions defined by
regular application of office equipment and business software systems. Extensive
customer interaction and a significant degree of decision-making authority is
required., Performs other related duties as required for which the employee is
capable and qualified to perform as assigned.

The type of work performed includes but is not limited to:

 .  Administer blanket PO's by ordering and receiving
 .  Verify billings and process payments
 .  Input requisitions
 .  Conduct research on issues
 .  Assist Accounts Payable
 .  Assist with drafting, including organizing and maintaining the prints library
 .  Create indexes, file and organize areas as needed
 .  Create and prepare various reports and spreadsheets as required

The wage for the position will be:
Remainder of 1999 = $16.50 per hour
1/31/2000 = $16.99 per hour
1/29/2001 = $17.49 per hour

Very Truly Yours,

/s/ Mark Sandoval
Director, Power Delivery

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
I BEW #396

                                       75
<PAGE>

September 9, 1999

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF UNDERSTANDING
-----------------------

Dear Mr. Anzinger:

This letter is to document the agreement between the Company and the Union
regarding clarification of the rest period for the ten hour shift.

Article 6.8 of the Collective Bargaining Agreement states, " Employees who are
required to work overtime within the eight (8) hour period immediately preceding
their scheduled starting time on a regular work day, shall be entitled to time
off with straight time pay equal to time worked during this time frame." In the
case of the Ten Hour Shift Agreement, it is agreed that the eight (8) hour rest
period will be replaced with a ten (10) hour rest period.

Very truly yours,

/s/ Mark Sandoval
Director, Power Delivery Operations

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW #396

                                       76
<PAGE>

January 6, 1994

Mr. James Anzinger
International Brotherhood of Electrical Workers,
Local 396 3520
Boulder Highway
Las Vegas, NV 89121

LETTER OF UNDERSTANDING:
-----------------------

VACATION/SICK LEAVE BONUS

Dear Mr. Anzinger-

During negotiations of the Plant agreement, which expires in February 1994, both
the Company and Union recognize that our ability to succeed in a competitive
environment is the result of effectively utilizing material and human resources.
As such, in an effort to minimize increases in manpower resulting from scheduled
time off, the Company and Union agreed to explore an additional option for
consideration by employee's eligible for the vacation and sick leave bonus.
Issues relative to a buy-out in the form of Company stock placed in the
employee's 401K account, or cash, shall be discussed and addressed, including
the possible tax ramifications.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

                                       77
<PAGE>

September 13, 1999

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF UNDERSTANDING
-----------------------

Dear Mr. Anzinger:

This letter is to document the agreement between the Company and the Union
regarding sick leave buyback. The cut off date for the sick leave balance that
will be used is September 19th.

The second vote for sick leave buy back indicated that employees unanimously
wanted a sick leave buy back at 75 cents on the dollar.

The amount will come in a separate check and be available by the end of the day
September 20th. The amount will be subject to 401K match and appropriate
withholding.

Very truly yours,

/s/ Trudy Haszlauer
HR Business Partner, Generation

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW #396

                                       78
<PAGE>

June 25, 1999

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF UNDERSTANDING:
-----------------------

SEVERANCE ALLOWANCE PLAN

The Company and Union agree that the sale of the generating facilities will not
trigger the Severance Allowance Plan. The Severance Allowance Plan will no
longer be included in the Generation Collective Bargaining Agreement. The
Company will require the buyer to maintain the employment of bargaining unit
employees assigned to the plants and require the additional terms and conditions
indicated in this settlement.

This Severance Allowance Plan agreement does not impact the Severance Plan
outlined in Article 5.5.

Very truly yours.

/s/ Mark Sandoval
Director, Southern Operations

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       79
<PAGE>

November 25, 1997

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF UNDERSTANDING
-----------------------

Dear Mr. Anzinger:

This letter is to document the agreement between the Company and the Union
regarding the classifications of Electrical and Instrument Technician. They are
currently identified in the contract as two separate classifications. There is,
however, a separate classification called Apprentice Electrical/Instrument
Technician. These apprentices are within six months of journeying out. In order
to accommodate their appropriate reclassification, we agree to create a new and
separate classification called Journeyman, Electrical/Instrumentation.

These apprentices, once journeyed out, will fall into this category. The
description will be as follows:

Performs a wide variety of skilled electrical and instrumentation work in the
installation, maintenance and repair of a generation facility. Will perform any
and all tasks for which they are properly trained and can competently and safely
perform.

This document will create a new classification to be added to the Plant
Collective Bargaining Agreement called Electrician/Instrument Technician. The
rate of pay will be $25.03 per hour until a new contract and new wages are
negotiated.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW#396

                                       80
<PAGE>

February 1, 1999

Mr. Jim Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF UNDERSTANDING
-----------------------

Overtime Equalization Amendment

Dear Mr. Anzinger:

A) The updated overtime list will be made available every Tuesday afternoon

B) There will be three equalization groups: 1) Instrument/Electrical 2)
   Mechanic/Machinist 3) Welder

C) The lowest Mechanic, Machinist, Welder, Electrician and Instrument Technician
   will be notified. If accepted. they will be the first contacted for call
   outs, weekend call outs and/or Holiday coverage.

D) Job continuity will apply to all weekend work. The same individuals will work
   the same job all three days of the weekend.

F) If the individuals in paragraph C- cannot be contacted. the overtime list
   will be used to fill the vacancy as usual.

G) Red hours will be charged for a missed call, a refused call and to all those
   wit- equal or less hours than the individual with the lowest hours that
   agreed to work,

H) In the event of an error during a call out. the individual(s) "affected" will
   be offered work equal to the number of overtime hours missed within two weeks
   following notification of the mistake

1) Each January 1. the overtime list will be returned to zero in it's current
   order (to maintain the current order hundredths of an hour will be issued).

Agreed:

___________________________________
/s/ Mark Sandoval
Director, Power Delivery Operations

___________________________________
/s/ James Anzinger
Business Manager and Financial Secretary
IBEVV Local 396

                                       81
<PAGE>

May 4, 1998

Mr. James Anzinger Business Manager
International Brotherhood of Electrical Workers, Local #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT
-------------------

STATUS OF MAINTENANCE UTILITY TECHNICIANS AND MAINTENANCE TECHNICIANS

This letter is to document the agreement between the Company and the Union
regarding the status of MT's and MUT's, effective February 1, 1998.

If an MT or a MUT decide to go through an apprenticeship program, they will be
able to decide which program based on the previous skills sets they have
acquired. If they do not have any previous skill sets in the journeyman
capacity, they will choose from the mechanical field.

They will be evaluated where they are in the apprenticeship program. The program
will be adjusted to the time required for the individual to complete their
apprenticeship program not to exceed 4 (four) years. This will be based on the
initial assessment completed by the trainer in conjunction with the power
delivery apprenticeship committee.

This apprenticeship program will be open only to MT's and MUT's in generation
and will not be open to anyone else in the company.

The majority of the apprenticeship program will be done on the individuals' own
time.

If they cannot complete the apprenticeship program for any reasons, they will
revert back to their previous position (i.e. MUT will go back to MUT and MT will
go back to MT).

If a person has to revert back to their previous position, they will be returned
to the rate of pay they had with their previous position.

A written and skills assessment will be done on a one on one basis with the
trainer and the power delivery apprenticeship committee.

Very truly yours,

/s/ Gloria Banks Weddle Vice President, Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       82
<PAGE>

May 4, 1998

Mr. James Anzinger
Business Manager
Brotherhood of Electrical Workers
Local #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT:
-------------------

OVERTIME EQUALIZATION

This letter is to document the agreement between the Union and the Company
regarding Overtime Equalization.

The Company and the Union agree that the power delivery overtime equalization
committee will gather to discuss and finalize overtime equalization within the
second quarter of 1998.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       83
<PAGE>

May 4, 1998

Mr. James Anzinger
International Brotherhood of Electrical Workers, Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT
-------------------

FLEXIBILITY LANGUAGE

This letter is to document the agreement between the Company and the Union
regarding the intent of the flexibility language for positions as stated.

"Employees will perform any and all tasks for which they are properly trained
and can competently and safely perform."

This language has been added to all generation classifications currently in the
contract.

* all training must be formally documented
* employee must feel competent about doing the work requested
* OSHA requires certain jobs and functions to be performed and certified every
  year -these will be defined at a later time
* refresher courses may be required
* must be able to perform job safely

For example: Lab Technicians will work at the RCC and Water Treatment if needed
(both at Clark and Reid).

This clause allows the Company to offer training to the employees to expand
their knowledge. The Company will ask for volunteers first. The interest is in
placing training efforts into those individuals who have a desire to take
advantage of this training and then put into action what they have learned.

Documentation means book work in addition to practical and demonstrated
application as well.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

/s/ James Anzinger
IBEW Local #396

January 6, 1994

                                       84
<PAGE>

                             AMENDED June 25, 1999

May 4, 1998

Mr. James Anzinger
International Brotherhood of Electrical Workers, Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT:
-------------------

NEWLY HIRED JOURNEYMEN IN GENERATION

This letter is to document the agreement between the Company and the Union
regarding all new hires into Maintenance and Operations classifications. This
letter contains supplemental information to the job description contained in the
Collective Bargaining Agreement.

1.  The newly hired employees will be hired into the existing vacancy
    classifications.

2.  At ratification of contract a two-tiered wage will be in effect. This will
    only effect any new hire. This will not effect any current employees and
    will not convert to newly hired wage rates in case of a transfer or
    promotion. The new language will require an 18% decrease in hourly wages
    with the last cent being rounded up to 0 or 5.

3.  These individuals will be expected to successfully complete their three and
    five month evaluation.

4.  All newly hired personnel in Operations and/or Maintenance will be required
    to transfer between plants provided there is 48 hours notice. There must be
    notice when transferring people. Otherwise, the Company will pay the penalty
    of movement, which will be two (2) hours of pay at straight time rate.
    Operations can work in Maintenance and Maintenance can work in Operations
    when the units are in outage.

5.  These individuals can work any established shift recognized by the Company
    and Union (i.e., weekend coverage, 4-10's, 8's, rotating, etc. as assigned)
    provided 48 hours notice is met. They will receive the appropriate shift
    differential.

6.  These individuals will be required to purchase and supply their own tools.

7.  Maintenance Journeymen (existing or newly hired) shall not be authorized to
    do operation work and operations will not be authorized to do maintenance
    work while on shift. Operations will be allowed to perform some intermediate
    maintenance tasks on shift when properly trained (i.e., lubrication, packing
    adjustments, filter changes, painting, etc.).

8.  Training will be offered to the existing employees first concerning the
    cross training of crafts. This will be done before any training is offered
    to the newly hired individuals concerning cross training. We will not force
    any existing employees to participate.

9.  Any existing journeymen have the ability to volunteer for either the shift
    changes or plant transfers provided they accept the terms and conditions
    outlined in this document. No existing employees will be forced to
    participate in any of these duties as outlined in this document.

Very truly yours.

/s/ Mark Sandoval
Director, Southern Operations

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       85
<PAGE>

May 4, 1998

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT-
--------------------

STATUS OF UTILITY OPERATORS

This letter is to document the agreement between the Company and the Union
regarding the status of Utility Operators at Reid Gardner Station.

The Company and the Union agree to promote the existing Utility Operators at
Reid Gardner to the position of Auxiliary Operator effective the ratification of
the contract.

With this transfer, we agree to eliminate the positions of Coal Yard Technician
and Utility Operator within Power Delivery.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       86
<PAGE>

May 4, 1998

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT:
-------------------

POWER DELIVERY APPRENTICESHIP COMMITTEE

This letter is to document the agreement between the Company and the Union
regarding the creation of a power delivery apprenticeship committee.

A committee will be formed and convened before June 1998.

The committee will define the rules, requirements, etc. and will create (revise
existing) the apprenticeship handbook.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       87
<PAGE>

May 4, 1998

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT:
-------------------

MOVEMENT OF EXISTING EMPLOYEES FROM ONE POSITION TO ANOTHER

This letter of agreement is to document the agreement between the Company and
the Union regarding the moving from one position to another on an involuntary
basis within power delivery.

If a person is involuntarily required to move from their existing position into
another position in power delivery, the person will retain their existing
salary, and when applicable, will be red circled.

Very truly yours,

/s/ Gloria Banks Weddle

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       88
<PAGE>

May 4, 1998

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT:
-------------------

CONTRACT EDUCATION AND INTENT

This letter is to document the agreement between the Company and the Union
regarding the education of appropriate individuals of the intent, interpretation
and administration of the new CBA. This education will take place within sixty
(60) days of the signing of the contract.

After the contract is voted and ratified, we agree to conduct labor/management
joint meetings to discuss and define the intent of the newly voted contract as
it applies to management and the Union.

Minutes will be taken of these meetings and published upon joint approval.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       89
<PAGE>

May 4, 1998

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT:
-------------------

E/I CLASSIFICATION

This letter is to document the agreement between the Union and the Company
regarding the E/I Classification.

The Company and the Union agree to the following with regard to the joint
classification:

 .  Start with a fair review of E and I skills.

 .  Refresher course will occur every three to five years in order to maintain
   current skill sets.

 .  Employees will be rotated through schools.

 .  Both crafts will work together on each others' jobs and provide cross
   training.

 .  Advanced training should be the same for both classifications.

 .  When employees are sent to school, every effort will be made to send E and I
   together.

 .  There will be a semi-annual review to see where people are. A test will be
   administered by a training individual that will be used as a tool and not as
   a disciplinary measure.

 .  Every current Electrician or Instrumentation technician will be merged into
   the E and I Classification. Each individual will then be identified by their
   specialty within this classification for the length of this contract.

 .  There will be input from the E and I Department to make up the test for the
   Journeymen.

 .  A list of schools that can be attended will be prepared.

 .  Holiday coverage/weekend coverage for 1998/1999 will use electric and
   instrument separate classifications.

It is understood that if someone needs to be called out, it will be in the
vacancy which was originated, until we are certain that cross training has been
provided and documented. The individual called out must be properly trained and
can fulfill the work requirements.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       90
<PAGE>

May 4, 1998

Mr. James Anzinger
Business Manager
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT:
-------------------

CONTRACTORS FOR GENERATION

Dear Mr. Anzinger:

This letter is to document the agreement between the Company and the Union
regarding the use of contractors within Generation.

The following are the agreements that were reached:

       .  time and material jobs, continuing service agreements, still need to
          remain at journeyman wage rate; other than during Yearly Scheduled
          Published Outages.

       .  union will have buy-in into the list of capital projects every year -
          a committee will be established (These lists indicate far enough in
          advance the kind of work that might have to be contracted out)

       .  if there are big jobs that we can absolutely not do; then they will be
          contracted out (prior union discussion and input)

       .  wage rates for capital projects will be $20.50 for journeymen or
          $10.16 for MUT's (wages will increase with ratification of the
          contract)

       .  4.3 does not apply to air conditioning and air handling units;
          janitorial; statewide fire protection (subcontracting will be at
          appropriate contract rate); and ponds (cleaning and lining repair)

       *  $100,000 triggers review by IBEW before it goes out to contractor.
          Will evaluate 396 first, utilize third party union agreements next and
          NPC lead with contractors last.

       *  Union and Company to review list and agreement must be reached and
          decision must be lived with. Cannot agree to disagree.

       .  System to be established to audit payroll records.

       .  If contractor is found not to be paying prevailing wages:

          1st offense    make restitution

          2nd offense    make restitution and contractor will not be
                         allowed top bid on NPC jobs for one year;
                         including subcontractors

          3rd offense    make restitution and won't be able to bid for
                         two years

          4th offense    make restitution and won't ever be able to bid
                         again

If contractor would be required to leave plant site, the Company would find an
appropriate juncture to remove them from the plant site to ensure a smooth
transition.

                                       91
<PAGE>

New plant construction is not work we normally do (i.e. Harry Allen Unit #2)

Employee Relations in conjunction with Plant Directors will have the
responsibility of auditing and ensuring full compliance with the requirements of
contract development, interpretation and administration (with regards to actual
contractors and also internal customers' issues with interpretation and
administration).

Contractors will not work overtime on jobs within our scope unless NPC regular
employees are also at work.

Yearly Published Scheduled Outages
----------------------------------

          .    Using contractors for scheduled outages $20.50 set price for
               contractors -any schedule (wage rate will increase at
               ratification on the contract)

          .    Use contractors for Yearly Published Scheduled Outages and with
               Union approval for emergencies

          .    NPC journeymen do the higher skilled work or run the job

          .    Overtime still applies

          .    No shift restrictions

          .    Suspend Article 6: with regards to wages, shifts (i.e. the
               contractor can work 2-12's and NPC will work 1-12 with the same
               number of Journeymen), shift differential, rest time, etc. other
               than what is required by law- power delivery only

          .    Don't have contractors do regular work - out of scope of contract
               bid

          .    Will continue and expand three party contract with other local
               unions

          .    The outage rate is applicable to any work that is outage related
               (pre and post) like cleanup or warranty

Contractors can have a 1 to 4 ratio of Journeymen to Maintenance Utility
Technician's excluding plant cleanup.

When a contractor comes on plant site, they need to know what their pay scale is
and then publish it when they are on plant site.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       92
<PAGE>

May 27, 1998

Mr. Jim Anzinger

International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF AGREEMENT:
-------------------

PERFORMANCE EVALUATIONS REGARDING SENIORITY

Dear Mr. Anzinger:

This letter will document the agreement between the International Brotherhood of
Electrical Workers, Local #396, and Nevada Power Company relative to performance
evaluations scoring and rating as referenced in a couple of places in the
contract.

We have jointly agreed not to use performance evaluations that utilize a
numbered rating system. Therefore, in the contract where is states that for a
tie breaker we will use the most recent performance evaluation and the highest
score will break the tie, shall be disregarded. Articles 5.4 and 7.1, both
dealing with Seniority, are impacted.

In the future, if two or more employees have the same Company seniority, the one
with the best-documented evaluation shall break the tie.

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       93
<PAGE>

May 27, 1998

Mr. Jim Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, Nevada 89121

LETTER OF AGREEMENT-
--------------------

1994 - THIRTY YEAR EMPLOYEES LOST VACATION

Dear Mr. Anzinger:

This letter will document the agreement between the International Brotherhood of
Electrical Workers, Local #396, and Nevada Power Company relative to employees
who achieved 30 years of employment in 1994.

The following employees shall have returned to them the one week (40 hours) of
vacation that they lost.

               Kent Aldrich

               Richard Leonard

               Elmer Miller

               Wilmon Morgan Jr.

               Bruce Ream

Very truly yours,

/s/ Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       94
<PAGE>

January 8, 1999

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local 1396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT:
-------------------
36 for 40 Weekend Crew Holidays

Dear Mr. Anzinger:

This letter is to document the agreement between the Company and the Union
regarding the holidays that will be observed by the 36 for 40 weekend crew for
the next two years. This is an amendment to 11.2A contained in the original
document.

11.2A COMPANY HOLIDAYS:

The following are to be considered holidays for this schedule:

                               1999                 2000

New Year's Day                 January 1            January 1
President's Day                February 14          February 20
Easter Day                     April 4              April 23
Memorial Day                   May 30               May 28
Independence Day               July 4               July 2
Labor Day                      September 5          September 3
Veteran's Day                  November 12          November 11
Christmas Day                  December 25          December 24

Note- It is understood that the holiday will be worked with the appropriate
premium pay.

Very truly yours,

/s/ Daniel S. Potter
Director, Employee Relations & Diversity

AGREED:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

                                       95
<PAGE>

January 20, 2000

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway
Las Vegas, NV 89121

LETTER OF AGREEMENT
-------------------

Tier II Wages

This letter is to document the agreement between the Company and the Union
regarding the temporary postponement of the Tier II wage schedule for employees
in the Generation Contract.

The Tier II wage schedule is suspended until December 31, 2000 or when a
facility is sold, which ever comes first. When a facility is sold, the Tier II
language immediately goes into effect for that facility upon the close of that
transaction.

The Company and Union will meet and must mutually agree to renew this agreement
in January 2001.

Very Truly Yours,

/s/ Mark Sandoval
Director, Southern Operations
Nevada Power Company

Agreed:

/s/ James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                       96
<PAGE>

                                  EXHIBIT XIV
                           REID GARDNER MAINTENANCE
                             Thirty-Six for Forty

ARTICLE NO 6A
WORKING HOURS AND RATES OF PAY

6.1A   DEFINITIONS:

SHIFT: Hours of work. FOR THE PURPOSE OF THIS AGREEMENT, THE HOURS OF WORK WILL
BE 6:00 AM TO 6:00 PM.

SCHEDULE:  Days and hours of work.

WORK DAY:  TWELVE (12) hours in any one (1) day shall constitute the work day;

WORK WEEK: Except as provided for part-time employees, the basic work week shall
consist of THREE (3) consecutive work days regularly scheduled between the hours
of 12:01 am Monday, and 12:00 midnight Sunday, shall constitute the basic work
week. The basic workweek of THIS SHIFT SHALL BE FORM FRIDAY, SATURDAY AND SUNDAY
AND REFLECTS A SCHEDULE OF FORTY (40) HOURS OF STRAIGHT-TIME WORK.

REGULAR DAYS OFF: Days off shall be consecutive, however, they may not be within
the basic workweek.

6.2A   BREAK PERIODS: A fifteen-minute relief period shall be provided for all
employees during each one-half (1/2) of the shift. Work conditions permitting,
each break period shall be given as near the middle of each one-half (1/2) of
the shift as possible. WHEN EMPLOYEES WHO ARE ASSIGNED TO THESE SCHEDULES ARE
HELD BEYOND THEIR NORMAL QUITTING TIME, THEY WILL RECEIVE AN ADDITIONAL FIFTEEN
(15) MINUTE BREAK, AS QUICKLY AS OPERATIONALLY POSSIBLE.

6.3A   LUNCH PERIODS: THREE-TWELVE (3/12) EMPLOYEES: These employees will be
considered to have a THIRTY (30) MINUTE paid lunch period as part of their
regular shift.

6.4A   OVERTIME: In computing overtime, intermission taken out for meals served
other than on the job shall be deducted, and any holiday or vacation paid in
that pay period will be considered as time worked.

TIME AND A HALF: Except as otherwise provided in this Article, the following
situations shall require payment as one and one-half (1-1/2) times the regular
established wage rate:

       .  Time worked in excess of TWELVE (12) hours per day.
       .  Time worked in excess of any of the THREE (3) scheduled workdays.
       .  Work scheduled in the three hours immediately preceding the normal
          starting time.
       .  Employees who are scheduled to work an observed holiday.
       .  Employees on THREE-TWELVE (3-1/2)'s who are scheduled or called out
          for overtime except as defined in "Double Time."
       .  Employees who are scheduled for overtime and such is canceled per
          Article 6.9 (REQUIRED NOTICE FOR OVERTIME).

DOUBLE TIME: Except as otherwise provided in this article, the following
             situations shall require payment at two (2) times the regular
             established wage rate:

                                       97
<PAGE>

       .  Employees, who are scheduled to work within the first five (5)
          hours of the eight (8) hour period immediately preceding the
          normal starting time regardless of the day of the week.
       .  EMPLOYEES WHO ARE CALLED-OUT FOR WORK ON AN OBSERVED HOLIDAY AS
          DEFINED IN ARTICLE 11A OF THIS AGREEMENT.
       .  EMPLOYEES WHO WORK ON THE FIRST DAY (MONDAY) OF A SCHEDULED FOUR (4)
          DAY OFF PERIOD.
       .  Employees, who are called out for overtime work within the eight (8)
          hours period immediately preceding their normal starting time,
          regardless of the day of the week with an overtime minimum as provided
          in Article 6.7A (CALL-OUTS).
       .  Employees who are called-out while on vacation per the provisions of
          Article 12.10A (CALL-OUT WHILE ON VACATION).

6.8    REST TIME: EMPLOYEES WHO ARE REQUIRED TO WORK OVERTIME WITHIN THE EIGHT
       (8) HOUR PERIOD IMMEDIATELY PRECEDING THEIR SCHEDULED STARTING TIME ON A
       REGULAR WORK DAY, SHALL BE ENTITLED TO TIME OFF AT THE RATE OF ONE AND
       ONE-HALF (1-1/2) TIMES THE ACTUAL HOURS WORKED. THIS WOULD CREATE THE
       POTENTIAL FOR 12 HOURS OF REST TIME. THIS IS NOT APPLICABLE TO A CALL OUT
       OR SCHEDULED OVERTIME OF THREE (3) HOURS OR LESS IMMEDIATELY PRECEDING
       THE EMPLOYEE'S NORMAL STARTING TIME.

6.9A   REQUIRED NOTICE FOR OVERTIME:
       SCHEDULED OVERTIME: In scheduling overtime work, a minimum of TWELVE (12)
hours notice is required, prior to the start of any overtime for a particular
day, and before leaving the work site on a regular work day. Without this
notice, such work will be considered as a call out. It is understood that
overtime, when work as an extension of a regular shift, does not require such
notification.

EXAMPLE

       An employee assigned to a 6:00 am to 6:00 PM shift and is
       notified to work the next day (their day off) at 6:00 am. If
       notification is given by the end of shift (6:00 PM), this
       overtime is scheduled.

6.11A  TRAINING EXCEPTIONS: The Company, may, for the purposes of training only,
change schedules (REVERT BACK TO EIGHT (8) HOURS - MONDAY - FRIDAY) WHEN
MUTUALLY AGREED UPON BETWEEN THE UNION AND THE COMPANY, WITHOUT INCURRING THE
PREMIUM PENALTIES MENTIONED PREVIOUSLY.

STAFFING FOR THE TWELVE (12) HOURS SCHEDULE:

 .  VOLUNTEERS: THE COMPANY WILL SOLICIT VOLUNTEERS FOR ASSIGNMENT TO THIS
   SCHEDULE.
 .  A WAITING LIST (IN ORDER FROM THE MOST SENIOR QUALIFIED TO THE LEAST SENIOR
   QUALIFIED) OF VOLUNTEERS WILL BE KEPT FOR THE TWELVE (12) HOURS SCHEDULE.
   THIS LIST WILL BE USED TO STAFF ANY CHANGES IN THE PERSONNEL ON THE THREE-
   TWELVE'S (3-12's).

 .  VOLUNTEERS WILL BE ON A THREE (3) MONTH COMMITMENT TO THE 3-12 SCHEDULE IF
   ANOTHER VOLUNTEER EMPLOYEE CANNOT BE FOUND.
 .  IF THERE ARE NO VOLUNTEERS FOUND IN THE CLASSIFICATION, THE TWO LOW SENIORITY
   IN THAT CLASSIFICATION WILL BE ASSIGNED TO A 4-10 SPLIT WEEKEND SCHEDULE.
 .  HOLIDAY HOURS WILL BE TRACKED TO ENSURE EVERYONE HAS AN OPPORTUNITY TO USE
   THEIR 96 HOURS WHEN ROTATING BETWEEN 4-10'S AND 36 FOR 40 SCHEDULED.
 .  SCHEDULE ADJUSTMENTS WILL BE MADE TO FACILITATE PAYROLL AS NEEDED.

                                       98
<PAGE>

6.15A  MEALS:
MEAL TIMES: When working overtime before or after the regular day, or shift, or
when called out for overtime work, and such work is continuous for two 92) hours
or more, the Company shall provide all meals unless employees are released
before the meal time. The normal unpaid meal times shall be:

 .  One and one-half (1-1/2) hours before the employee's normal starting time,
 .  Eight (8) hours before the employee's normal starting time,
 .  SIX (6) hours after the normal starting time, and
 .  ONE (1) HOUR after the normal quitting time,

Meals will be provided as close to these times as circumstances of the work will
permit. Employees may elect to complete their assignment and take their meal
period upon completion of their task. This meal period would be unpaid time
unless directed by their supervision to work through their meal period. This
paid lunch period will be limited to one-half (1/2) hour at the appropriate rate
of pay.

ARTICLE NO. 11A
Holidays

11.2A  COMPANY HOLIDAYS:

FOLLOWING ARE TO BE CONSIDERED HOLIDAYS FOR THIS SCHEDULE:

                                   2000--      2001

NEW YEAR'S DAY - JAN.                 1           1

PRESIDENT'S DAY- FEB.                20          18

EASTER - APRIL                       23          15

MEMORIAL DAY - MAY                   28          27

INDEPENDENCE DAY - JUL.               2           6

LABOR DAY - SEPT.                     3           2

VETERAN'S DAY - NOV.                 11          11

CHRISTMAS - DEC.                     24          23

NOTE: IT IS UNDERSTOOD THAT THE HOLIDAYS WILL BE WORKED WITH THE APPROPRIATE
PREMIUM PAY.

11.3A  FLOATING BIRTHDAY/HOLIDAY: EMPLOYEES ASSIGNED TO THIS SCHEDULE DO NOT
RECEIVE A FLOATING/BIRTHDAY HOLIDAY AS THE HAVE 96 HOURS OF HOLIDAY DESIGNATED
AS DEFINED ABOVE.

11.4A  BANKED HOLIDAYS: THE PROVISION TO BANK DOES NOT APPLY TO INDIVIDUALS
WORKING THIS SCHEDULE.

                                       99
<PAGE>

ARTICLE NO. 12.A
VACATIONS

NOTE: VACATION HOURS WILL BE CHARGED AGAINST THE EMPLOYEE'S ACCRUED HOURS AS
FOLLOWS:

       FRIDAY     =   THIRTEEN (13) HOURS OF VACATION TIME
       SATURDAY   =   THIRTEEN (13) HOURS OF VACATION LEAVE
       SUNDAY     =   FOURTEEN (14) HOURS OF VACATION LEAVE

ARTICLE NO. 13A
---------------
SICK LEAVE

NOTE: SICK LEAVE HOURS WILL BE CHARGED AGAINST THE EMPLOYEE'S ACCRUED
HOURS AS FOLLOWS:

       FRIDAY     =   THIRTEEN (13) HOURS OF SICK LEAVE
       SATURDAY   =   THIRTEEN (13) HOURS OF SICK LEAVE
       SUNDAY     =   FOURTEEN (14) HOURS OF SICK LEAVE

                                      100
<PAGE>

                         Alternative Shift Agreements
                    Four-Ten Hour Shift Schedule Agreement

The following provisions shall supersede the corresponding articles of the Plant
Collective Bargaining Agreement for the purpose of establishing working
conditions applicable to those employees assigned to the four-ten hour shift
(4/10) schedule.

ARTICLE NO. 6A
--------------
WORKING HOURS AND RATES OF PAY
------------------------------

6.1A - DEFINITIONS:
SHIFT: Days and hours of work.
-----

WORK DAY: Ten (10) hours in any one (1) day shall constitute the work day.
--------

WORK WEEK: Four (4) consecutive work days, regularly scheduled between the hours
---------
of 12:01 am, Monday, and 12:00 midnight, Sunday, shall constitute the basic work
week. The basic work week of regular day-shift employees shall be from Monday
through Friday and reflect a schedule of forty (40 hours of straight time work.

REGULAR DAYS OFF: Days off shall be consecutive, however, they may not be within
----------------
the basic work week.

REGULAR DAY-SHIFT EMPLOYEES: Regular day shift employees are those employees who
---------------------------
are assigned to shifts which are established on a Monday through Friday schedule
and work a shift which begins between the hours of 6:00 am and 11:59 am. When
mutually agreed to by the Union and Company, the day shift starting time may be
scheduled as early as 5:00am to take advantage of daylight hours.

SHIFT EMPLOYEES: Shift employees are all employees not defined as regular day-
---------------
shift employees.

SHIFT DESIGNATIONS: No shift periods shall start between the hours of 12:01am
------------------
and 5:59am, unless mutually agreed to by memorandum of understanding between the
Company and the Union. The following designations shall apply:
 .   FIRST SHIFT: All ten (10) hour shift periods regularly scheduled to begin
    at 5:00am, or thereafter but before 12:00 noon shall be designated as first
    shifts.
 .   SECOND SHIFT: All ten (10) hour shift periods regularly scheduled to begin
    at 12:00 noon or thereafter but before 8:00pm, shall be designated as
    second shifts.
 .   THIRD SHIFT: All ten (10) hour shift periods regularly scheduled to begin
    at 8:00pm, or thereafter but before 12:01am, shall be designated as third
    shifts.

SHIFT DIFFERENTIAL: An incremental increase for working on a second or third
------------------
shift.

SHIFT PREMIUM: An incremental increase for all hours worked outside of the
-------------
employee's previous schedule for the first four (4) working days of a newly
established permanent, temporary or emergency schedule.

SHORT CHANGE: A transfer from one established schedule to another with only one
------------
shift off between schedules.

COMPANY HEADQUARTERS: Any headquarters established for the purpose of engaging
--------------------
in work covered by this Agreement when such work will continue for an
indeterminate period of time.

                                      101
<PAGE>

6.2A - BREAK PERIODS: A fifteen (15) minute relief period shall be provided for
--------------------
all employees not working seven day coverage during each one-half (1/2) of the
shift. Work conditions permitting, each break period shall be given as near the
middle of each one-half (1/2) of the shift as possible.

6.3A - LUNCH PERIODS: Supervisors will establish a meal period without pay,
--------------------
approximately five (5) hours after the start of a shift. Employees who are
required to begin their lunch more than one (1) hour before or after the regular
start of lunch time shall be paid during the lunch period at the straight time
rate.

REGULAR DAY-SHIFT AND SHIFT EMPLOYEES: The unpaid lunch period shall not exceed
-------------------------------------
one-half (1/2) hour unless mutually agreed to by the Company.

6.4A - OVERTIME: In computing overtime, intermission taken out for meals served
---------------
other than on the job shall be deducted, and any holiday or vacation paid in
that pay period will be considered as time worked.

TIME AND A HALF: Except as otherwise provided in this Article, the following
---------------
situations shall require payment at one and one-half (1 1/2) time the regular
established wage rate:
 .   Time worked in excess of ten (10) hours per day.
 .   Time worked in excess of any four (4) scheduled work days in that work
    week.
 .   Work scheduled in the three (3) hours immediately preceding the
    normal starting time.
 .   Employees who are scheduled to work on an observed holiday.
 .   Employees who are scheduled for overtime and such is canceled per Article
    6.9 (REQUIRED NOTICE FOR OVERTIME).

DOUBLE TIME: Except as otherwise provided in this Article, the following
-----------
situations shall require payment at two (2) times the regular established wage
rate:
 .              Employees, who are scheduled to work within the first five (5)
    hours of the eight (8) hour period immediately preceding the normal starting
    time regardless of the day of the week.
 .              Employees who are called out for work on an observed holiday.
 .              Employees who work on Sundays, with an overtime minimum as
    provided in Article 6.7 (CALLOUTS).
 .              Employees, who are called out for overtime work within the eight
    (8) hour period immediately preceding their normal starting time, regardless
    of the day of the week with an overtime minimum as provided in Article 6.7
    (CALLOUTS).
 .              Employees who are called out for work to cover all or part of the
    thrid shift, with an overtime minimum as provided in Article 6.7 (CALLOUTS).

 .              Employees called out while on vacation per the provision of
     Article 12.10 (CALLOUT WHILE ON VACATION).

DOUBLE TIME AND A HALF: Except as otherwise provided in this Article, the
----------------------
following situations shall require payment at two and one-half (2 1/2) times the
regular established wage rate:
    .          For all time worked in excess of sixteen (16) consecutive hours.

BREAK PERIOD: Employees entitled to pay at this rate will continue at this rate
------------
until they have been released for a period of at least six (6) continuous hours.
Any break of six (6) hours will be considered an interruption of continuous work
time. It is understood that any employee may be returned to work exactly six (6)
hours from their most recent release, satisfying the required break. It is also
understood that any employee released for such a break may be called back to
work before six (6) hours have elapsed.

    EXAMPLE
If an employee's normal quitting time is 4:30 P.M. and who is called back and
including travel time, takes their time back before 10:00 P.M., will receive 2
1/2 for all time after 10:00 P.M.

                                      102
<PAGE>

MEAL PERIODS: Meal periods while working overtime will not be considered as part
------------
of the six (6) hour break and will not be considered time worked, unless
employees are directed to work through their meal period. Employee's unpaid meal
period which occurs during regular work hours will be included in the
computation of the six (6) hour break, when this break is calculated form the
end of the employee's last regular shift. Accordingly, an employee may be called
out five and one-half (5 1/2) hours from the end of their last regular shift
without creating a requirement for this rate.

STRAIGHT TIME PAY: Employees sent home for a six (6) hour break will not lose
-----------------
any straight time pay for normally scheduled hours, as a result of such a break.

6.5A - OVERTIME EQUALIZATION: The Company will endeavor to distribute overtime
----------------------------
work as evenly as possible among those employees qualified to perform such work.
For the purpose of distributing overtime, the Company will maintain and post
overtime lists in each sub-department indicating time offered and time worked.
Each department will create policies and procedures for overtime equalization
through labor/management meetings.

6.6A - PAY PROVISIONS
PAY DAYS: Paydays shall be at biweekly intervals.
--------

WAGES: The schedule of job classifications and wage rates as mutually agreed to,
-----
are made a part of this agreement, and are marked "Exhibits I and II"
respectively.

Wages shall be paid at biweekly intervals on the Thursday following the close of
the two week pay period provided that if the regular payday falls on a holiday,
payment shall be made on the preceding work day.

SPECIAL PAY REQUESTS: The Company recognizes there will be circumstances such as
--------------------
weeks of vacation and vacation in association with holidays which will create
special requests of the payroll department. Unless the situation is an
emergency, all special checks will be limited to individuals who are absent for
at least the Wednesday through Friday of a pay week. Exceptions to this practice
will require written approval from the department manager and must be presented
to payroll no later than forty-eight (48) hours in advance of the requested time
for payment.

RECOVERING OVERPAYMENTS: Deductions from an employee's wages, to recover
-----------------------
overpayments made in error, will not be made unless the employee is notified
prior to the end of the month following the month in which the check in question
was delivered to the employee. A schedule for repayment will be agreed upon by
the Company and the employee.

6.7A - CALLOUTS
TWO HOUR MINIMUM: Employees called out for overtime duty shall receive a least
----------------
two (2) hours pay. Reasonable travel time (defined below) to and from home will
be considered as time worked for the purpose of satisfying the two (2) hour
minimum, and will be paid at the appropriate overtime rate.

<TABLE>
<CAPTION>
         EXAMPLE #1                             EXAMPLE #2                              EXAMPLE #3
   <S>                                    <C>                                    <C>
   Employees called out who               Employees called out who               Employees called out who
   work two (2) hours and travel          work four (4) hours and travel         work one (1) hour and travel
   one (1) hour (round trip) will be      one (1) hour (round trip) will be      one (1) hour (round trip) will be
   paid three (3) hours.                  paid five (5) hours.                   paid two (2) hours.

                          EXAMPLE #4                                  EXAMPLE #5
                    Employees called out who                 Employees called out who work
                    work fifteen (15) minutes and            into their regular shift shall be paid
                    travel one (1) hour (round trip)         the appropriate overtime premium for
                    will be paid two (2) hours.              at least two (2) hours, which includes
                                                             travel time to work only. This does
                                                             not change the normal starting time
                                                             for the purpose of extending the shift.
</TABLE>

                                      103
<PAGE>

MULTIPLE CALLOUTS: Employees called out more than once in the twenty-four (24)
-----------------
hour period from midnight one day to midnight the following day shall be paid at
least the two (2) hour minimum mentioned above for the first call. For
subsequent calls, employees shall be paid for a one (1) hour minimum with the
same travel time considerations mentioned above. For the purpose of this
section, concurrent calls, or successive calls without a break in work time
shall be considered as a single call.

TRAVEL TIME: Employees are entitled to time according to the following chart:
-----------
travel

   -------------------------------------------------------------
                              WORK LOCATIONS
   -------------------------------------------------------------
                              Las Vegas Valley      Reid Gardner
   -------------------------------------------------------------
   Las Vegas Valley           .5 hour               1 hour
   -------------------------------------------------------------
   Moapa Valley                1 hour               .5 hour
   -------------------------------------------------------------
   Boulder City               .75 hour              1.5 hours
   -------------------------------------------------------------
   St. George/Alamo            2 hours              1.5 hours
   -------------------------------------------------------------
   Mesquite                   1.5 hours             .75 hour
   -------------------------------------------------------------
   Henderson                  .75 hour              1.5 hours
   -------------------------------------------------------------

6.8A - REST TIME: Employees who are required to work overtime within the ten
----------------
(10) hour period immediately preceding their scheduled starting time on a
regular work day, shall be entitled to time off with straight time pay equal to
time worked during this time frame. This is not applicable to a call out or
scheduled overtime of three (3) hours or less immediately preceding the
employee's normal starting time.

If an employee is entitled to rest time off, such time off would normally begin
at the start of the regular shift. By mutual agreement between the supervisor
and the employee, rest time may be taken during the last part of the regular
shift. An employee shall not be required to work during his rest period provided
adequate relief is available, however, should an employee be required to work
during this period, he shall receive straight time for all time worked during
his rest period in addition to his rest period pay.

6.9A - REQUIRED NOTICE FOR OVERTIME:
SCHEDULED OVERTIME: In scheduling overtime work, a minimum of fourteen (14)
------------------
hours notice is required, prior to the start of any overtime for a particular
day, and before leaving the worksite on a regular work day. Without this notice,
such work will be considered as a call-out. It is understood that overtime, when
worked as an extension of a regular shift, does not require such notification.

CANCELING OVERTIME: A minimum of twelve (12) hours notice is required on
------------------
canceling pre-scheduled overtime. When customer arrangements are involved, the
Company must provide twelve (12) hours notice prior to the employee's next
normal starting time.

When such notice of cancellation of pre-scheduled overtime work is not given in
accordance with the above, employees involved will be paid for two (2) hours at
established overtime rates if they report and are retained for work. When such
notice of cancellation is not given in accordance with the above, but employees
are later notified of work cancellation, they will be paid for two (2) hours at
time and on-half (1 1/2).

6.10A - SHIFT DIFFERENTIAL: Fixed shift employees will be paid their shift
differential for all hours worked on that day.

                                      104
<PAGE>

EXAMPLE
A second shift employee who works ten (10) hours on a particular day would be
paid ten (10) hours of second shift differential.

FIRST SHIFT: No shift differential shall be paid for the first shift.
-----------

SECOND SHIFT: A differential shall be paid for the second shift according to the
------------
following schedule:
February 1, 2000........... $1.30 per hour
February 1, 2001........... $1.35 per hour

THIRD SHIFT: A differential shall be paid for the third shift according to the
-----------
following schedule:
February 1, 2000........... $1.45 per hour
February 1, 2001........... $1.50 per hour

The appropriate overtime rate will be applied to the shift differential. Shift
differentials shall be payable only for hours actually worked and shall not be
payable for non-work time such as holidays, sick leave, vacation and rest time.

6.11A - ESTABLISHING PERMANENT SCHEDULES: The right to establish working
schedules and methods of shift rotation for employees, to assign individuals to
schedules and to make changes in schedules, rests with the Company.

Company may schedule employees to work for periods of ten (10) hours per day for
a minimum period of four (4) days at other than their regular work hours when
additional shifts are required for emergency conditions involving the
maintenance of repair of plant or station equipment.

Company shall pay overtime compensation for all work performed outside of the
regular work hours for the first four () work days of any such situations. After
the first four (4) day overtime requirement has 1 been fulfilled, the
appropriate shift differential shall apply. On the fifth (5th) day and
thereafter for the duration of any such situation, Company shall pay the
straight time rate of pay for work performed on work days during the hours of
work established under this section. If any such situation extends beyond four
(4) work weeks, Company and the Union may agree to rotate the assignments of
employees thereto, but in such event the overtime compensation herein provided
for will not be paid to any employee for more than the first four (4) work day
period worked outside of regular work hours.

TRAINING EXCEPTIONS: The Company may, for the purposes of training only, change
schedules without incurring the premium penalties mentioned above. The Company
will notify all employees as far in advance as possible, but not later than the
end of their last scheduled work day in the week prior to the training. If such
notification is not given, and an employee is called at home and informed of a
change in schedule for training purposes, this employee will be paid time and
one-half (1 1/2) for the first two (2) days of the training for all hours worked
outside of their normal schedule.

TRAVEL TIME FOR OUT OF TOWN TRAINING: Any employee who is required to travel out
------------------------------------
of town on a normal day off or after normal working hours for the purpose of
Company training, will be paid actual driving time to and from the training
site. When flying to such training, employees will be paid one (1) hour from
their home to the airport, actual flying time to the destination, and one (1)
hour from the airport to the hotel. All compensation for such travel time will
be at a straight time rate and will not be considered time worked.

SCHEDULE PREFERENCE AGREEMENTS: The Company recognizes that in departments where
------------------------------
multiple schedules exist, there may be a desire to create a mechanism for
movement between such schedules, while protecting the operational efficiencies
of the organization. To satisfy these mutual interests, departments are
encouraged to create shift preference agreements which will define the terms and
conditions for the transfer from one schedule to another. Under no
circumstances, would such transfers create premium pay liability in accordance
with the provisions of this Article. Each schedule preference agreement will be
created through labor/management meetings within the affected work group and
will be acknowledged by memorandum of agreement between the Company and the
Union.

                                      105
<PAGE>

6.13 - EMERGENCY OR TEMPORARY SCHEDULES: The Company may schedule employees to
work for periods other than their regular work hours when additional schedules
are required for emergency or temporary conditions. Such conditions are expected
to last for less than ninety (90) days and, if they exceed this time frame they
will be considered to be established schedules requiring compliance with the
procedures for staffing and establishing schedules defined above, unless mutual
agreement to extend such schedules is established by the Company and Union.

NOTIFICATION: The Company shall communicate the hours of work, meal periods,
------------
days off, location, nature of the work, estimated composition of the workforce,
and expected duration of this schedule.

STAFFING OF EMERGENCY OR TEMPORARY SCHEDULES:
--------------------------------------------

VOLUNTEERS: The Company may solicit volunteers for assignment to these
----------
schedules. If employees volunteer for these assignments, they will receive a
premium of time and one-quarter (1 1/4) for all straight time hours worked
outside of their normal schedule or shift for the first five (5) days of this
assignment. When there are more volunteers than required for the shift, the most
senior, qualified employees will be assigned.

LEAST SENIOR QUALIFIED: The least senior, qualified employee in the
----------------------
classification affected, may be assigned. Any employee so assigned will receive
a premium of time and one-half (1 1/2) for the first five (5) days of this
assignment for all hours worked outside of their previous schedule.

RIGHT OF ASSIGNMENT: The Company may assign employees to these shifts for
-------------------
operational efficiency 3 purposes. Any employee so assigned will receive a
premium of time and one-half (1 1/2) for the first five (5) days of this
assignment for all hours worked outside of their previous schedule.

SHIFT DIFFERENTIAL: After the five (5) day premium requirement has been
------------------
fulfilled, the appropriate shift differential shall apply.

RATE OF PAY AND ROTATION: On the first day that there is no requirement for a
------------------------
premium and each day thereafter, the appropriate rate of pay and shift
differential, if applicable, will be provided for all hours worked. If any such
schedule extends beyond forty-five (45) days, the Company and the Union may
agree to rotate the assigned employees. Employees returned to their former
schedule as a result of this rotation, will not be entitled to the premium
mentioned above.

RETURN TO ORIGINAL SCHEDULE: At the completion of this assignment, employees
---------------------------
will be returned to their original schedule without a requirement for any
additional premium payment. Employees who are assigned to an emergency or
temporary schedule and are returned to their original schedule before five (5)
days have elapsed, will be entitled to the premium mentioned above for the five
(5) day period.

EXAMPLE
     Employees who are assigned a new schedule during their regular work
     schedule are entitled to premium pay as outlined in Article 6.0 for
     the next 40 regular straight time hours..

6.14A - OUT OF TOWN WORK:
BOARD AND LODGING: The Company will furnish adequate board and lodging for all
-----------------
employees sent on out-of-town work. This rule does not apply to noon day meals
where employees start from and return to headquarters everyday, nor does it
apply to employees hired for any particular job which may be outside the city or
where employees travel to and from regularly assigned headquarters on Company
time.

                                      106
<PAGE>

EQUALIZING ASSIGNMENTS: When making temporary out of town assignments, the
----------------------
Company will endeavor to distribute such assignments equally among all employees
qualified to perform such work.

PER DIEM: Employees temporarily assigned to established headquarters located
--------
more than forty (40) miles from their regularly established headquarters who
elect not to stay at the assigned work locations will be furnished
transportation for the initial trip and final trip at Company expense, and shall
receive forth-three dollars ($43.00) for each day they are assigned to and work
at a temporary location. If work extends beyond the weekend, the Company may, at
its' option, pay travel to home base Friday night and return to work location
Monday morning.

MILEAGE ALLOWANCE: Except as provided herein, employees electing to travel to
-----------------
and from their assigned work locations shall do so at their own expense. When an
employee is authorized to drive his own car to conduct Company business, he will
receive a mileage allowance equal to Inter Revenue Services (IRS) maximum
allowable mileage expense. Requests for the allowance described herein shall be
submitted to, and distributed by the Company every two (2) weeks and in
accordance with procedures established by the Company.

6.15A - MEALS
-------------
MEAL TIMES: When working overtime before or after the regular day, or shift, or
when called out for overtime work, and such work is continuous for two (2) hours
or more, the Company shall provide all meals unless employees are released
before the meal time. The normal unpaid meal times shall be:

    .  one and one-half (1 1/2) hours before the employee's normal starting
       time,

    .  eight (8) hours before the employee's normal starting time,

    .  six (6) hours after the normal starting time, and

    .  two (2) hours after the normal quitting time,

Meals will be provided as close to these times as circumstances of the work will
permit. Employees may elect to complete their assignment and take their meal
period upon completion of their task. This meal period would be unpaid time
unless directed by supervision to work through the meal period and such work
continues more than one (1) hour from the stated meal time. This paid meal
period will be limited to one-half (1/2) hour at the appropriate rate of pay.

CALL OUT: When an employee is called out one and one-half (1 1/2) hours or more
--------
previous to his starting time, the Company shall provide breakfast and a
reasonable time to eat same.

MEAL RATES: When employees are released on or after a normal meal period, or
----------
periods as outlined above, and do not elect to eat a Company provided meal, they
shall be given a meal allowance of $9.00. These allowances will be paid through
the payroll system in the employee's next paycheck. The meal allowance shall be
increased to:

    .  nine dollars and fifty cents ($9.50) effective February 1, 2000

    .  nine dollars and seventy-five cents ($9.75) effective February 1, 2001.

ACTUAL COST: If an employee elects to consume a meal in lieu of the allowance,
-----------
the cost of any meal shall not exceed two (2) times the allowance as provided
for above. If the cost of the meal exceeds this amount, the employee will be
notified of the amount of the difference and the employee must reimburse the
amount within thirty (30) calendar days after receipt of such notification.
These limitations may be waived by the department's Vice President if such
limitations place an undue hardship on the employee

6.16A - REPORTING LOCATION: Employees in the bargaining unit shall report for
--------------------------
work at regularly established Company headquarters, shall travel from job to job
and between job and headquarters on Company time and shall return to the
regularly established Company headquarters at the conclusion of the day's work.

                                      107
<PAGE>

6.17A - EARLY RELEASE: Employees relieved from duty, for reasons other than
---------------------
misconduct, during the first half of the regular day or regular shift shall be
paid for not less than one-half (1/2) of the shift; if relieved after having
been on duty more than one-half (1/2) of the regular day, they shall be paid for
a full shift, except that if they are relieved at their own request they shall
be paid only for time worked. These provisions do not apply to overtime
assignments.

ARTICLE NO. 11A
Holidays

ALL PARAGRAPHS NOT LISTED BELOW SHOULD BE CONSIDERED UNCHANGED FROM THE PLANT
COLLECTIVE BARGAINING AGREEMENT.

11.7A - ALTERNATIVE SCHEDULES: As a result of the implementation of alternative
-----------------------------
work schedules, any issues associated with the provisions of Article 11 will be
resolved by memorandum of understanding between the Company and Union. IT IS
UNDERSTOOD THAT EMPLOYEES MAY, AT THEIR DISCRETION, USE TWO (2) HOURS OF
VACATION TIME ON HOLIDAYS TO ENSURE A FULL EIGHTY (80) HOUR PAY PERIOD.

When a Holiday falls on an employee's regularly scheduled day off, the last
scheduled non-overtime work day immediately preceding the Holiday or the
non-overtime work day immediately following the Holiday shall be observed as the
Holiday for the purpose of this Article. Notice of the date that the Holiday
will be observed shall be posted within the work group a minimum of one week
prior to the Holiday itself.

ARTICLE NO. 12A
Vacations

ALL PARAGRAPHS NOT LISTED BELOW SHOULD BE CONSIDERED UNCHANGED FROM THE PLANT
COLLECTIVE BARGAINING AGREEMENT.

12.6A - UNUSED VACATION: All unused or carried over vacation time accumulated in
-----------------------
the year of termination after an employee's first anniversary date, up to and
including the employee's last day worked, shall be paid at termination of
employment, at the employee's current base rate. This does not apply to the
vacation bonus when the employee has not completed the minimum service
specified.

It is understood that employees may not carry vacation time over to the
following year without the written consent of the Company.

ARTICLE 13A
Sick Leave
----------

ALL PARAGRAPHS NOT LISTED BELOW SHOULD BE CONSIDERED UNCHANGED FROM THE PLANT
COLLECTIVE BARGAINING AGREEMENT.

13.4A - SICK LEAVE BONUS: Employees who are eligible for sick leave in
------------------------
accordance with Article 15.1 who use no more than an average of
two-hundred-twenty (220) hours of sick leave each five (5) years shall be
granted a bonus of forty (40) hours vacation in addition to that granted under
the provisions of Article 14.1, each five (5) years based on the following
considerations:

                                      108
<PAGE>

a)  On January 1, 1987, and January 1, of each fifth year thereafter, the sick
    leave records of those employees with hire dates prior to August 1, 1981,
    will be audited. Those hours of sick leave during the five (5) year period
    immediately preceding the audit will be granted forty (40) hours vacation to
    be taken within the twelve (12) month period immediately following the audit
    date and in accordance with the provisions of Article 14.

b)  For employees hired after July 31, 1981, their sick leave records will be
    audited as of the first day following the completion of five (5) years and
    six (6) months of service and each fifth year following the initial audit.
    Those employees who have used no more than two-hundred-twenty (220) hours of
    sick leave during the five (5) year period immediately preceding the audit
    will be granted forty (40) hours vacation to be taken within the next twelve
    (12) month period immediately following the audit.

c)  All unused vacation accumulated under the provisions of this sick leave
    bonus plan shall be paid at termination of employment as provided under
    Article 14.2 except that no pro rata of vacation entitlements will be
    allowed for time periods of less than five (5) years.

ARTICLE NO. 14A
---------------
EMPLOYEE BENEFIT PLANS
----------------------

ALL PARAGRAPHS NOT LISTED BELOW SHOULD BE CONSIDERED UNCHANGED FROM THE PLANT
COLLECTIVE BARGAINING AGREEMENT.

14.2A - JOB INCURRED INJURIES/SALARY PROTECTION: For a job incurred disability
-----------------------------------------------
of less than forty (40 hours which does not qualify for SIIS compensation,
employees must use any accrued sick leave, and upon exhaustion of such accrued
sick leave shall receive disability benefits as defined earlier in Article 14.2.

ARTICLE NO. 15A
---------------
LEAVES OF ABSENCE
-----------------

15.9A - FUNERAL LEAVE: A regular employee, or a temporary employee who has
---------------------
worked more than one thousand forty (1040) straight time hours, who is absent
from duty due to a death in the employee's immediate family will be excused
without loss of regular pay for the time required not to exceed thirty-six (36)
hours for making funeral arrangements and attending the funeral, provided the
employee attends the funeral and furnishes a death certificate to the payroll
department within thirty (30) days. Immediate family shall mean the employee's
grandparents, mother, father, step-mother, step-father, brother, sister,
spouse's grandparents, spouse's parents, spouse's children, spouse, son,
daughter, or grandchildren. IF AN EMPLOYEE'S TIME OFF EXCEEDS THIRTY-SIX (36)
HOURS, THE EMPLOYEE MAY USE VACATION OR TIME OFF WITHOUT PAY TO MAKEUP THE
ADDITIONAL FOUR (4) HOURS.

ARTICLE NO. 15A
---------------
WORKING RULES
-------------

ALL PARAGRAPHS NOT LISTED BELOW SHOULD BE CONSIDERED UNCHANGED FROM THE PLANT
COLLECTIVE BARGAINING AGREEMENT.

                                      109
<PAGE>

16.4A - WORKING RULES: The Committee members, appointed by the Union, shall
---------------------
receive their regular straight time rate of pay for actual time spent in Joint
Apprenticeship Committee meetings called by the Chairman, but limited to ten
(10) straight time hours in one day and thirty (30) straight time hours in one
(1) year.

Ten Hour Shift Schedule
Reid Gardner Maintenance

            M T W T F S S    M T W T F S S    M T W T F S S   M T W T F S  S
Crew 1      D D D D - - -    D D D D - - -    D D D D - - -   D D D D - -  -
Crew 2      - D D D D - -    - D D D D - -    - D D D D - -   - D D D D- -

                                      110
<PAGE>

                         Alternative Shift Agreements
                          Twelve Hour Shift Schedule

The following provisions shall supersede the corresponding articles of the Plant
Collective Bargaining Agreement for the purpose of establishing work conditions
applicable to those employees assigned to the twelve hour shift (THS) schedule.

ARTICLE NO. 7A
--------------
HOURS OF WORK - OVERTIME
------------------------
Twelve Hour Shift (THS) Schedule

7.1A   Twelve (12) consecutive hour days shall constitute the work shift. The
day shift shall begin at 6:00am, the night shift shall begin at 6:00pm.

7.2A   A meal period of no more than one-half hour without pay will be
established approximately four hours after the start of a shift. The straight
time rate shall be paid to employees who are required to start their meal period
more than one (1) hour beyond the established starting time for such meal
period. This meal provision will not apply to employees who are assigned to the
THS schedule.

7.3A   6:01pm Sunday to 6:00pm on the next following Sunday shall constitute the
regular workweek.

7.4A   DELETE

7.5A   Four (4) twelve (12) hour shifts (48 hours) and three (3) twelve (12)
hour shifts (36 hours) as described in Exhibit V-A shall constitute the basic
work schedule.

7.6A   The right to establish the working schedule for employees and method of
shift rotation, to assign individuals to shift schedules and to make changes as
required by operations, rests with the Company.

7.7A   Time worked in excess of forty (4) hours within a regular workweek shall
be considered overtime and will be paid for at one and one-half (1 1/2) times
the regular established wage rate except as otherwise provided in this article.

DELETE

Employees shall be paid at the double time and one-half (2 1/2) rate of pay for
all time worked in excess of sixteen (16) hours. Employees who, under the
provisions of this clause, would be entitled to pay at the double time and
one-half (2 1/2) rate will not have such right nullified by an interruption of
continuous work time of six (6) hours or less. (Any break in continuous work
time of more than six (6) hours will be considered to be an interruption of
continuous work time).

Under the provisions of this article, the employees may be sent home for a
specified break and shall not lose any normal time pay for the regular time
which they are required to lose by reasons of such break. (It is understood that
employees on any such break may be called back to work). Meal periods will not
be considered as an interruption of continuous work time and will not be
considered as work time except when paid for by the Company. The meal period
which occurs during employees' regular work hours will be included in the
computation of the break period.

All employees included in special or rotating schedules will receive the
following consideration:

When an employee "DELETE" is transferred from one schedule of work days or work
hours to another schedule provided the schedule is an established schedule or
shift for the employee's work group, he shall not be entitled to overtime
compensation for work performed during regular work hours of any day involved in
the transfer, provided that (a) he has been notified of such transfer not less
than twenty-four (24) hours in advance of the starting time of the new shift or
work period; (b) he has had a minimum of twelve (12) hours off between shifts or
work periods; (c) as a result of such transfer he has

                                      111
<PAGE>

not been required to work more than forty (40) hours at the straight rate in any
regular pay period involved; and (d) he has not been required to work more than
one (1) short change in the regular pay period involved, provided, however, that
such short change was not the result of a voluntary action on the part of an
employee, i.e., calling in sick, taking an unauthorized day off for personal
reason, etc. (A short change is defined as a transfer from one schedule to
another with but twelve (12) hours off between shifts or work periods).

Employees who are called for work on an observed holiday or who work anytime
during the oe (1) day off period, on the last day of the two (2), four (4) or
five (5) day off period, the second day of the three day off period, or the
fourth day of the seven (7) day off period, shall receive double time for all
time worked with an overtime minimum as provided in 7.9.

7.8A   In computing overtime, intermission taken out for meals served other than
on the job shall be deducted. In computing overtime, any holiday not worked will
be considered as twelve (12) hours worked, as defined in Article 13.5A.

In scheduling overtime work, a minimum of twelve (12) hours notice, prior to the
start of said overtime, but prior to leaving the last shift shall be required,
otherwise such work will be considered as a callout. It is understood that this
excludes overtime when worked as an extension of a regular shift.

A minimum of twelve (12) hours notice is required on canceling prescheduled
overtime, or where customer arrangements are involved, twelve (12) hours notice
prior to the employee's next normal starting time. The foreman will be notified
by telephone, or if unavailable, by message delivered to his residence. The crew
assigned to the work are to check in with the foreman or with the Company
switchboard between 8:30 pm and 9:00 pm the previous evening to determine
whether the work has been canceled. Saturdays and Sundays shall be considered as
normal workdays for interpreting the intent of this section.

When such notice of cancellation of prescheduled overtime work is not given in
accordance with the above, employees involved will be paid for two (2) hours at
established overtime rates if they report and are retained for work. When such
notice of cancellation is not given in accordance with the above, but they are
later notified of work cancellation, they will be paid for two (2) hours at time
and one-half (1 1/2). If they report and are not retained for work, they shall
receive pay for two (2) hours at time and one-half (1 1/2).

The Company will endeavor to distribute overtime work as evenly as possible
among those employees qualified to perform such work. For the purpose of
distributing overtime, the company will maintain and post overtime lists in each
sub-department indicating time offered and time worked.

7.9A   If an employee is called for emergency work more than once in the
twenty-four (24) hour period from midnight one day to midnight the following
day, minimum overtime compensation shall be paid for two (2) hours only for the
first call outside of such employee's regular work hours on work days, or at any
time on his on-work days. For subsequent calls, minimum overtime compensation
shall be paid for one (1) hour and travel time as herein provided.

For the purpose of this section, concurrent calls or successive calls without a
break in work time shall be considered as a single call. If by reason of a call,
an employee works less than the minimum time and into regular work hours, the
minimum overtime provisions will apply into his regular work hours and thereby
postpone starting time.

DELETE

Employees who are called for overtime duty shall receive at least two (2) hours
pay, and reasonable travel time to and from home will be considered as time
worked for the purpose of satisfying the two hour minimum cited herein.

DELETE

                                      112
<PAGE>

Employees (DELETE) who are called out for overtime work within the eight (8)
hour period immediately preceding normal starting time shall receive double time
for all time worked during that period with an overtime minimum as provided
above.

7.10A  The Company will furnish board and lodging for all employees sent on
out-of-town work, adequate meals and lodging to be provided. This rule is not to
apply to noon day meals where employees start from and return to headquarters
everyday, nor does it apply unless by special arrangement to employees hired for
any particular job which may be outside the city or where employees travel to
and from regularly assigned headquarters on Company time.

7.11A  When working overtime before or after the regular shift, or when called
out for work after the completion of their regular shift, or when called out on
the employee's regularly scheduled days off, or holidays, and such work is
continuous for one and one-half (1 1/2) hours or more, the company shall provide
all meals unless the employee is released before meal time. The normal meal
times shall be one and one-half (1 1/2) hours before the employee's normal
starting time, six (6) hours after the normal starting time, fourteen (14) hours
after the normal starting time, and eight (8) hours before the normal starting
time; and meals will be provided as close to these times as circumstances of
work will permit.

When an employee is released on or after a normal meal period, or periods as
outlined above, and does not elect to eat a company provided meal, he shall be
given a meal allowance (DELETE) of $9.50. The Company will endeavor to pay the
meal allowance within thirty (30) calendar days following receipt of the
employee's meal voucher.

The meal allowance shall be increased to:

     .   nine dollars and fifty cents ($9.50) effective February 1, 2000

     .   nine dollars and seventy-five cents ($9.75) effective February 1, 2001.

(DELETE) The cost of any meal consumed by employees in accordance with this
provision shall not exceed two (2) time the meal allowance as provided for
above. If the cost of the meal exceeds this amount, the employee will be
notified of the amount of the difference and the employee must reimburse the
amount within thirty (30 calendar days after receipt of such notification. These
limitations may be waived by the department's Vice President if such limitation
place an undue hardship on the employee.

When an employee is called out one and one-half (1 1/2) hours or more previous
to his starting time, the Company shall provide breakfast and a reasonable time
to eat same.

7.12A  Employees in the bargaining unit shall report for work at regularly
established Company headquarters, shall travel from job to job and between job
and headquarters on Company time, and shall return to the regularly established
Company headquarters at the conclusion of the day's work. "The regularly
established Company headquarters" is defined as any headquarters established for
the purpose of engaging in work covered by this Agreement when such work will
continue for an indeterminate period of time.

7.13A  DELETE

7.14A  Employees relieved from duty during the first half of the day or shift,
shall be paid for not less than one-half (1/2) the day's time; if relieved after
having been on duty more than on-half (1/2) day, they shall be paid for a full
day's time, except that if they are relieved at their own request they shall be
paid only for time worked.

7.15A  All employees who are required to work emergency overtime within the
eight (8) hour period immediately preceding their scheduled starting time shall,
after the emergency, be entitled to time off

                                      113
<PAGE>

with straight time pay equal to time worked. This is not applicable to a callout
or scheduled overtime of three (3) hours or less immediately preceding the
employee's normal starting time.

If an employee is entitled to time off under "A" above, such time off which
would normally begin at the start of the regular shift maybe taken during the
last part of the regular shift. An employee shall not be required to work during
his rest period provided adequate relief is available, however, should an
employee be required to work during this period, he shall receive straight time
for all time worked during his rest period in addition to his rest period pay.

7.16A  DELETE

7.17A  A premium of fifty-eight and one third cents ($.5833) per hour shall be
paid for all hours worked.

Effective February 1, 1991, this provision shall be increased to sixty-one and
two thirds cents ($.6166).
Effective February 1, 1992, this provision shall be increased to sixty-five
cents ($.65).
Effective February 1, 1993, this provision shall be increased to sixty-eight and
one third cents ($.6833).

7.18A  DELETE

7.19A  The appropriate overtime rate will be applied to the shift premium.

7.20A  Shift premiums shall be payable only for hours actually worked and shall
not be payable for non-work time such as holidays, sick leave and vacation.

ARTICLE NO. 13A
---------------
Holidays

13.1A  DELETE

13.2A  Regular employees and temporary employees with more than six (6) months
continuous service who are assigned to the THS schedule may be permitted to take
holidays off which fall on their scheduled work days; however, if they are not
permitted time off, they shall be paid at the rate of time and one-half (1 1/2 )
in addition to the holiday pay for the time worked on such day during regular
working hours.

Following are to be considered holidays:

Martin Luther King's Day      3/rd/ Monday in January
Good Friday                   Friday before Easter Sunday
Memorial Day                  Last Monday in May
Independence Day              July 4/th/
Labor Day                     First Monday in September
Veteran's Day                 November 11/th/
Thanksgiving Day              fourth Thursday in November
Christmas Day                 December 25/th/

If a regular employee or a temporary employee with more than six (6) months of
continuous service is required to work on any day observed as a holiday and
agrees in advance of that observed holiday to work for the straight time hour
rate of pay rather than the premium rate of pay, then the holiday pay of twelve
(12) hours may be traded for 12 hours to be added to that employee's vacation
entitlement for that calendar year. No more than thirty-six (36) hours may be
acquired in this manner.

13.3A  Probationary employees and temporary employees with less than six (6)
months of continuous service will not receive pay for holidays not worked, but
shall be paid time and one-half (1 1/2) for all time worked on such days.

                                      114
<PAGE>

13.4A  An employee who does not report for work either the day before and/or the
day after a paid holiday, and who has not been excused by his supervisor for
either the day before and/or the day after a paid holiday shall receive no pay
for said holiday. Company may require satisfactory evidence of an employee's
illness or injury before holiday pay will be granted.

13.5A  When a holiday falls on an employee's regularly scheduled work day, or on
an employee's regularly scheduled day off, the holiday may be observed on
another work day within the same pay period which maybe in conjunction with the
employee's regularly scheduled days off, or any other day within that pay
period. This accommodation must be by mutual agreement between the employee and
the Company and scheduled as far in advance as possible. It is understood that
if any employee requests that they be excused on the fourth day of their four
day work week, they will be compensated with twelve (12) hours of straight time
pay. If the holiday falls on an employee's regularly scheduled day off, or the
fourth day of the four-day work week, and no other accommodations are made, the
last scheduled, non-overtime work day, immediately preceding the holiday, shall
be observed as the holiday for the purpose of this article.

ARTICLE NO. 14A
---------------
Vacations
---------

14.1A  All regular employees and temporary employees with more than twelve (12)
months of continuous service covered by this Agreement will be granted
vacations, with straight time pay as follows:

    After Continuous Service Of            Working Hours of Vacation
        1 year                                     40 hours
        2 through 5 years                          80 hours
        6 years                                    88 hours
        7 through 11 years                        120 hours
        12 through 15 years                       128 hours
        16 years                                  136 hours
        17 years                                  152 hours
        18 through 20 years                       160 hours
        21 through 25 years                       200 hours
        26 through 28 years                       224 hours
        29 years                                  240 hours
        30 years                                  280 hours

An employee's vacation accrual shall be adjusted for all periods of leave of
absence without pay as defined elsewhere in this Agreement by reducing the
number of vacation days accrued in direct proportion to the number of days of
leave without pay within the employee's anniversary year. Such reductions shall
be applied to any accrued and unused vacation available in the calendar year the
adjustment is made, or when such adjustment exceeds the employee's available
vacation, the excess shall be applied against the employee's next vacation
accrual or the employee's final paycheck, whichever occurs first. It is
understood that no adjustment to vacation accrual will be made due to use of
paid sick leave.

In addition to the vacation accrued in accordance with the above schedule, any
employee who completes ten (10) years continuous service and each five (5) years
of continuous service thereafter, shall be granted a vacation bonus of forth
(40) hours in the year such term of employment is attained. (DELETE) The
vacation bonus will accrue, and maybe taken subject to the provisions of Article
14.2.

                                      115
<PAGE>

14.2A  All unused vacation time accumulated in any year after an employee's
first anniversary date up to and including the employee's last day worked, shall
be paid at termination of employment, at the employee's current base rate. This
does not apply to the vacation bonus when the employee has not completed the
minimum service specified.

A THS employee may carry up to twelve (12) hours of vacation over to the
following year with the written consent of the Company. A regular employee who
has been laid off for lack of work and is recalled within one (1) year, that has
in excess of one (1) year Company seniority, shall accrue vacation in accordance
with above.

14.3A  Vacation may be granted at any time during the calendar year in which it
is earned, however, it may not be taken during the first 12 months of
employment, and shall be subject to the following considerations.

14.4A  Vacation periods shall normally commence on Monday except for employees
whose work week starts on days of the week other than Monday, the vacation
period shall commence with the starting days of their respective work weeks.
However, by prior arrangement with the employee" supervisor, an employee shall
be allowed vacation in increments of one shift or more on any day of the week,
except where prohibited by operations needs or where necessary relief cannot be
provided, or where payment of overtime to another employee would be required.

14.5A  If a holiday occurs on a work day during an employee's vacation, it shall
not be counted as one day of vacation. The employee shall receive straight time
pay for the holiday as such.

If an employee assigned to a THS requests, and is granted vacation on the first,
second, or third day of their forty-eight hour work schedule, the employee will
have those hours considered as time worked for the purpose of calculating their
pay on the fourth day of that work schedule. It is understood that vacation
granted for the entire week (i.e., forth-eight hours) or on the fourth day of
the four-day workweek will be paid on a straight time basis.

14.6A  An employee shall not be required to use vacation, if while on vacation,
he or she becomes sick or disabled and has been hospitalized for at least one
day, provided that unused sick leave has been accumulated.

14.7A  An employee shall not be expected to work on his regularly scheduled days
off immediately preceding or following prescheduled vacation. An employee called
out during his scheduled vacation will be paid the same as a callout on a
holiday and the employee may reschedule the unused portion of his vacation hours
in accordance with Article 14.3 above.

ARTICLE NO. 17A
---------------
Leave of Absence
----------------

17.1A  Provided the needs of the service will permit, time off without pay for
any period of thirty (30) days or less, including non-work days, may be granted
any employee upon a written application to his department head showing good and
sufficient reason for such request. This shall not be construed as a leave of
absence without pay, as the term is used in the Agreement. A leave of absence
without pay is defined as a period of authorized absence from service in excess
of thirty (30) days.

17.2A  Leave of absence shall be granted to regular employees for urgent
substantial personal reasons, provided adequate arrangements can be made to take
care of the employee's duties without undue interference with the normal routine
of work. Leave will not be granted if the purpose for which it is requested may
lead to the employee's resignation.

                                      116
<PAGE>

17.3A  A leave shall commence on and include the first workday on which an
employee is absent and terminate with and include the work day preceding the day
his leave expires. The conditions under which an employee shall be restored to
employment on the termination of his leave of absence shall be clearly stated by
the Company on the form on which application for leave is made.

17.4A  Except as otherwise provided herein, an employee's seniority shall not
accrue while he is on leave without pay. However, an employee's status as a
regular employee shall not be impaired by a leave of absence.

17.5A  Company shall at request of Union grant a leave of absence without pay
for four (4) years or less to an employee who is appointed or elected to any
office or position in the Union whose services are required by the Union. The
seniority of an employee who is granted a leave of absence under the provisions
of this Section shall accrue during the period of such leave.

17.6A  Employees elected or appointed to public office shall be granted a leave
of absence for the duration of such appointment or election or six (6) months
whichever is sooner. Such absence shall not affect accrual rates for seniority
purposes; however, sick leave and vacation shall not accrue during this period
and group insurance benefits shall be paid by the employee at the Company's
current premium rate.

17.7A  A leave of absence under the foregoing conditions shall be granted to
employees who enter the armed forces of the United States, provided, however,
that any such employee shall be subject to the terms of the Selective Training
and Service Act o 1940, as amended.

A regular employee or a temporary employee with more than six (6) months of
continuous service who is a member of the armed forces reserve units, or the
National Guard, and who is required to attend annual training sessions, will be
granted a leave of absence for the duration of such assignment. In addition, the
company will pay such employee the amount, if any, by which the remuneration
received from the government is less than the base straight time earnings the
employee would have received for the same period, not to exceed ten (10) working
days in a calendar year. Such items as subsistence, travel, uniform and other
allowances will not be included in computing the remuneration received from the
government. The Company will require satisfactory evidence of attendance and
remuneration received.

17.8A  If an employee fails to return immediately on the expiration of his leave
of absence, or if he accepts other employment while on leave, he shall thereby
forfeit the leave of absence and terminate his employment with the Company.

17.9A  Any period of authorized absence without pay for thirty (30) days or less
shall not affect an employee's seniority status.

17.10A A regular employee or a temporary employee with more than six (6) months
continuous service who is absent from duty due to a death in the employee's
immediate family will be excused without loss of regular pay for the time
required not to exceed thirty-six (36) hours for making funeral arrangements and
attending the funeral, provided the employee attends the funeral and furnished a
death certificate to the payroll department within thirty (30) days. Immediate
family shall mean the employee's grandparents, mother, father, brother, sister,
spouse's grandparents, spouse's parents, spouse's children, spouse, son,
daughter, or grandchildren.

17.11A When a regular employee or a temporary employee with more than six (6)
months of continuous service is absent from work in order to serve as a juror or
to report for jury examination, he shall be granted pay for those hours spent in
such services during his regular twelve (12) hour day less the fee or other
compensation paid him with respect to such jury duty. Each employee shall
furnish to the company with a statement from an officer of the court setting
forth the time and days on which he reported for jury duty and his compensation
due or received for jury duty.

                                      117
<PAGE>

ARTICLE NO. 18A
---------------
Working Rules
-------------

18.1A  DELETE

18.2A  DELETE

18.3A  DELETE

18.4A  DELETE

18.5A  DELETE

18.6A  DELETE

18.7A  DELETE

18.8A  An employee shall furnish initially all tools and equipment, which are
acceptable to the Company and necessary for the work to be performed. The
company will furnish a suitable standard pair of gloves and coveralls bearing
company identification to a regular employee, when required in the performance
of the employee's work and Company will replace such gloves and coveralls worn
out in the company service. When a safety strap or hook strap is worn out in the
Company service or is condemned by the Company, it shall be replaced at no cost
to the employee.

18.9A  When a employee relieves an employee of a higher classification for two
(2) or more hours, he shall receive the rate of pay for the higher
classification for the time worked in the higher classification. However, an
employee will not be upgraded when employees of that classification who normally
report for work at the same location are able and available to do the work for
which the upgrade is intended.

The Company may upgrade a qualified employee or utilize a relief employee to
provide coverage for a vacant shift due to a scheduled or an unscheduled absence
provided such situation does not result in overtime for any employee in a lower
classification, or may elect to not cover the shift when sufficient qualified
personnel are available to perform the required functions safety.

1. If these arrangements cannot be made and it is necessary to work an employee
   overtime, either:
2. An employee who is on his or her day off who has and will have at least
   twelve (12) hours off between shifts, shall be called to fill the vacant
   shift; or
3. The shift may be split by working an employee in the same classification
   (first) or other qualified employee (second) from both the shifts
   immediately preceding and immediately following the vacant shift.

It is the intent of the company not to work employees assigned to the THS
schedule beyond their regularly scheduled work hours, however, all employees
shall be expected to respond to overtime assignments as necessary.

                                      118
<PAGE>

EXHIBIT V-A
REID GARDNER PLANT
     TWELVE HOUR SHIFT (THS) SCHEDULE

            M T W T F S S   M T W T F S S    M T W T F S S   M T W T F S S
Crew #1     D D D - - - N   N N N - - - -    - - - D D D D   - - - N N N -
Crew #2     N N N - - - -   - - - - D D D    - - - N N N -   D D D - - - N
Crew #3     - - - D D D D   - - - N N N -    D D D - - - N   N N N - - - -
Crew #4     - - - N N N -   D D D - - - N    N N N - - - -   - - - D D D D

D= Day Shift      6:00am (same day) - 6:00pm (same day)

N= Night Shift    7:00pm (preceding day) - 6:00am (same day)

                                      119
<PAGE>

                                     Index

<TABLE>
<S>                                                                      <C>
-------------------------------------------------------------------------------
                                       4
-------------------------------------------------------------------------------
401K                                                                         41

-------------------------------------------------------------------------------
                                       A
-------------------------------------------------------------------------------
Accidental Life Insurance                                                    41
Alcohol and Drug Abuse .See Sick Leave                                        8
Application Referral                                                         44
Apprentice Program                                                           25
Arbitration                                                                  32
Attendance & Sick Leave See Article 13

-------------------------------------------------------------------------------
                                       B
-------------------------------------------------------------------------------
Benefit Eligibility                                                          35
Benefit Plans                                                                35
Benefits Employee Contributions                                              35
Board and Lodging                                                            19
Break Periods                                                                12
Bulletin Boards                                                               6
Business Management                                                           5

-------------------------------------------------------------------------------
                                       C
-------------------------------------------------------------------------------
Call Out Rest Time                                                           15
Call Out Travel Time                                                         15
Call-Outs                                                                    14
CDL's                                                                        46
Change in Status                                                              9
Classification
   Regular Employee                                                           8
Classification
   Probationary Employees                                                     7
   Temporary Employees                                                        7
Continuity of Service                                                         3
Contract Education                                                           89
Contracting Work                                                              6

-------------------------------------------------------------------------------
                                       D
-------------------------------------------------------------------------------
Dental Benefit                                                               34
Dependent Care Account                                                       36
Disability Benefits                                                      37, 38
Discipline                                                                5, 46
Dues See Union Dues

-------------------------------------------------------------------------------
                                       E
-------------------------------------------------------------------------------
E/I Classification                                                           90
Emergency Staffing                                                           18
Employees Lost Vacation See Vacation
Employees, New                                                                5
Evalutations Regarding Seniority
   See Exhibit V, Article 7.1, Article 5.4

Leaves of Absence                                                            51
Licenses                                                                     59

Exhibit I Classification Descriptions                                        50
Exhibit II Wage Rates                                                        54
Exhibit III Check Off Authorization                                          58
Exhibit IV Sick Leave Agreement                                              59
Exhibit V Temporary Layoff Provisions                                        60
See Sick Leave

-------------------------------------------------------------------------------
                                       F
-------------------------------------------------------------------------------
Family & Medical Leave                                                        4
Family Leave                                                                 43
Floating Birthday/Holiday                                                    29
Funeral Leave                                                                43

-------------------------------------------------------------------------------
                                       G
-------------------------------------------------------------------------------
Generation Apprenticeship Committee                                          87
Generations Contractors                                                      91
Grievance                                                                    24
Definition                                                                   24
Time Limitations                                                             24
Grievance Process                                                            24

-------------------------------------------------------------------------------
                                       H
-------------------------------------------------------------------------------
Hearing Procedures                                                           25
Holidays                                                                     28
Banked                                                                       29
Holidays Worked                                                              28

-------------------------------------------------------------------------------
                                       I
-------------------------------------------------------------------------------
Inclement Weather Practice                                                   32
Injuries                                                                     45
Insurance                                                               41, 113
Accidental Life Insurance                                                    51
Long-Term Disability Insurance                                               51
Investigation                                                                30
Safety                                                                       32
Incentive Pay                                                                48

-------------------------------------------------------------------------------
                                       J
-------------------------------------------------------------------------------
Job Descriptions                                                             50
Job Incurred Injuries                                                        45
Job Posting                                                                  25
Job Posting Selection Criteria                                               26
Jury Duty                                                                    43
Job Security                                                                 47

-------------------------------------------------------------------------------
                                       L
-------------------------------------------------------------------------------
Layoff, No                                                                   48
Layoff Eligibility See Article 5.4
Layoff Provisions                                                             8

-------------------------------------------------------------------------------
                                       S
-------------------------------------------------------------------------------
 Safety                                                                  26, 44
</TABLE>
<PAGE>

<TABLE>
<S>                                                                    <C>
Life Insurance See Term Life Insurance
Light Duty                                                                  33
Long Term Disability Insurance                                              41
Lunch Periods                                                               14
Letters of Understanding                                               62 - 81
Letters of Agreement                                                   82 - 96

------------------------------------------------------------------------------
                                      M
------------------------------------------------------------------------------
Maintenance Utility Technicians                                             82
Meal Rates                                                                  20
Meals                                                                       19
Medical Attention See Sick Leave
Mileage Allowance                                                           19
Military Leave                                                              42
Moving Expenses                                                             22

------------------------------------------------------------------------------
                                       N
------------------------------------------------------------------------------
New Classification/Wages                                                    50
Newly Hired Journeymen/Generation                                           85
Non-Discrimination                                                           4

------------------------------------------------------------------------------
                                       O
------------------------------------------------------------------------------
Out of Town Work                                                            19
Overtime                                                                    12
   Cancellation                                                             16
   Required Notice                                                          16
Overtime Equalization                                                       14

------------------------------------------------------------------------------
                                       P
------------------------------------------------------------------------------
Pay Provisions                                                              14
Pension                                                                     47
Per Diem                                                                    19
Permanent Schedules                                                         16
Permits                                                                     46
Prescriptive Drug Benefit                                                   34
Probationary                                                             7 - 9
   See Classification                                                    7 - 9
Promotion/Transfer Trial Period                                             23

------------------------------------------------------------------------------
                                       R
------------------------------------------------------------------------------
Rates of Pay                                                                11
Recall Rights                                                             6, 9
Removing Letters of Discipline                                              46
Reporting Location                                                          20
Rest Time                                                                   15
Retention Bonus                                                             48
Retirement Benefit                                                          39
Retirement Plan See Article 14.4                                            62
Retirement, Magic 80                                                        41

Work Location Change                                                        20
Work Week                                                                   11
Working Hours                                                               11
Working rules                                                               44
Schedule Assignment                                                         17
Schedule Staffing                                                           18
Seniority                                                                   21
Seniority and Promotions                                                    21
Seniority Postings                                                          21
Severance                                                                    9
Shift                                                                       11
Shift Designations                                                          11
Shift Differential                                                          16
Shift Premium                                                               11
Short Term Disability Benefit                                               42
Sick Leave                                                                  32
Sick Leave Bonus                                                            32
Staffing Vacancies                                                          21
Status of Employees                                                          7
Steward Business                                                             6
Sub-Departments                                                             22
Subpoena                                                                    43

------------------------------------------------------------------------------
                                       T
------------------------------------------------------------------------------
Temporary Appointments                                                      22
Temporary Employees                                                          7
Term Life Insurance                                                         34
Term of Agreement                                                           47
Two Man Crew                                                                44
Travel Time                                                                 15

------------------------------------------------------------------------------
                                       U
------------------------------------------------------------------------------
Union Activity                                                               6
Union Business                                                               6
Union Dues                                                                   5
Union Security                                                               5
Union/Steward Business                                                       6
Upgrade See Article 16.9                                                    45
Utility Operators                                                           86

------------------------------------------------------------------------------
                                       V
------------------------------------------------------------------------------
Vacancies                                                                   21
Vacation Bonus                                                              31
Vacation Unused                                                             31
Vacations                                                                   30
Vision Benefit                                                              34
------------------------------------------------------------------------------
                                       W
------------------------------------------------------------------------------
Wages                                                              12, 46, 48,
                                                                    54, 69, 96
Work Day                                                               11, 97,
                                                                      101, 111
</TABLE>
<PAGE>

<TABLE>
<S>                                                                          <C>
  Emergency Conditions                                                       46
  Safety Gear                                                                44
  Tools, Equipment & Work Clothes                                            45
  Vessel Conditions                                                          46
  Two Man Crew                                                               44
  Upgrade                                                                    45
  Welding Requirements                                                       45
Working Safety Committee                                                     26
</TABLE><PAGE>

                                                                   Exhibit 10(T)

                   LOS ANGELES - NEVADA POWER NOB to MCC500

                   50 MW FIRM TRANSMISSION SERVICE AGREEMENT

                              (DWP No. BP 00-001)

1.   PARTIES: The Parties to this Los Angeles - Nevada Power NOB to MCC500 50 MW
     --------
     Transmission Service Agreement, DWP No. BP 00-001 (Agreement), are Nevada
     Power Company ("Nevada Power"), a Nevada corporation, and The Department of
     Water and Power of the City of Los Angeles ("Los Angeles"), a department
     organized and existing under the Charter of the City of Los Angeles, a
     municipal corporation of the State of California, hereinafter referred to
     individually as "Party" and collectively as "Parties".

2.   RECITALS:   This Agreement is made with reference to the following facts,
     ---------
     among others:

     2.1  Nevada Power desires to purchase 50 MW of firm uni-directional
     transmission service from the Point of Receipt where Los Angeles' Control
     Area interconnects with Bonneville Power Administration's (BPA's) Control
     Area at the Nevada - Oregon Border, to the point of delivery at MCC500, for
     a period of 15 months, beginning October 12, 2000 through December 31,
     2001.

     2.2  Los Angeles is willing to provide such transmission service to Nevada
     Power under this Agreement.

3.   AGREEMENT:  In consideration of the mutual covenants and agreements
     ----------
     contained herein, the Parties hereby agree as follows.

4.   DEFINITIONS:  The following terms, whether in the singular or in the
     ------------
     plural, when used herein, and initially capitalized, shall have the
     following meanings specified:

     4.1  Account: The internal record dedicated for the purpose of maintaining
     a statement of Schedules or corresponding transmission loss, and for
     determining Inadvertent Energy.

     4.2  Agreement: This Los Angeles - Nevada Power NOB to MCC500 50 MW Firm
     Transmission Service Agreement.

     4.3  Authorized Representative: The individual(s) named and appointed by
     each Party pursuant to this Agreement who are authorized to represent the
     interest of such appointing Party.

     4.4  BPA: The Bonneville Power Administration, a federal Power Marketing
     Administration serving the states of Oregon, Washington, Idaho, and
     portions of Montana.

     4.5  Control Area: All or part of an electric utility's, power pool's, or
     generating agency's electric generation, transmission, and distribution
     facilities, or combination thereof with those of Third Parties, to which a
     common automatic generation scheme is applied.

                                       1
<PAGE>

     4.6   Control Area Services: Those tasks which a Control Area operator must
     perform to establish, execute, and maintain Schedules between Control Areas
     in accordance with WSCC minimum operating reliability criteria which
     include, but are not limited to: (i) Prescheduling energy interchange
     between interconnected Control Areas; (ii) verification of preschedules
     prior to execution of the next day' Schedules; (iii) hourly execution and
     verification of Schedules as necessary; (iv) making Schedule adjustments
     due to uncontrollable force or other curtailment events and notification of
     affected parties; (v) reconciliation of Inadvertent Energy; and (vi) all
     accounting activities associated with these tasks.

     4.7   Dispatcher: An employee of a Party who has responsibility for the 7
     day by 24-hour operation of such Party's electric system.

     4.8   Inadvertent Energy: For any hour, the difference between the sum of
     net actual energy interchange and the sum of net scheduled energy
     interchange at a Point of Interconnection.

     4.9   MCC500: The 500 kV bus at McCullough Switching Station in the state
     of Nevada.

     4.10  NOB: The point of interconnection between Los Angeles and BPA at the
     Nevada - Oregon Border.

     4.11  PDCI: The +/- 500 kV Pacific Direct Current Intertie between Sylmar
     Converter Station and BPA's Celilo Converter Station.

     4.12  Point of Delivery: A Point of Interconnection where Los Angeles is
     empowered to cause Schedules to be made available to Nevada Power.

     4.13  Point of Interconnection: The points where the electrical system of a
     Control Area interconnects with the electrical system of another Control
     Area.

     4.14  Point of Receipt: A Point of Interconnection where Los Angeles is
     empowered to cause Schedules to be accepted from Nevada Power.

     4.15  Preschedule Period: The day or group of days during which future
     Schedules have been arranged by the Parties' Schedulers.

     4.16  Real-Time Schedule: Hourly Schedules accepted and included in Los
     Angeles' interchange schedule by Los Angeles' Dispatchers after expiration
     of the Preschedule Period.

     4.17  Schedule: An intentional, prearranged interchange of energy transfers
     at a specified Point of Interconnection which has been agreed upon between
     the Control Areas involved.

     4.18  Schedulers: An employee of a Party who has, among other duties, the
     responsibility for preparing preliminary interchange energy Schedules.

                                       2
<PAGE>

     4.19  Scheduling Ability: A Party's maximum ability, expressed in megawatts
     per hour, to schedule transfers of energy over transmission facilities.

     4.20  Third Party: An electric utility, power pool, or generating agency,
     power marketer, power broker, or other entity, not a party to this
     Agreement.

     4.21  WSCC: The Western Systems Coordinating Council of the North American
     Reliability Council (NERC) or successor organization.

5.   EFFECTIVE DATE and TERM:
     ------------------------

     5.1   Effective Date: This Agreement shall become effective when duly
     executed by the Parties.

     5.2   Termination Date: This Agreement shall continue in full force and
     effect until the earlier of: (i) 23:59 hours on December 31, 2001; (ii)
     termination by mutual agreement of the Parties; or (iii) termination by Los
     Angeles under Section 11.7 or Section 11.10.

6.   TRANSMISSION SERVICE:
     ---------------------

     6.1   Commencing October 12, 2000, Los Angeles shall provide, and Nevada
     Power shall purchase, 50 MW of firm uni-directional transmission service
     (and associated transmission losses pursuant to Section 9) from the Point
     of Receipt at NOB to the Point of Delivery at MCC500 for the period between
     00:00 hours on October 12, 2000 through 23:59 hours on December 31, 2001.

     6.2   Nevada Power shall have to right to re-sell the firm transmission
     service explained in Section 6.1 to a Third Party on a short term basis
     when Nevada Power is not using the transmission service. Nevada Power shall
     submit schedules/preschedules to Los Angeles consistent with Section 8.8
     hereunder. Nevada Power shall notify Los Angeles as soon as possible after
     the re-sale occurs and prior to the provision of service. Compensation to
     Nevada Power by a Third Party shall not exceed the monthly rate paid by
     Nevada Power to Los Angeles as pro-rated for the time period of the
     transmission re-sale. Nevada Power shall remain solely liable for the
     performance of obligations under this Agreement, regardless of the amount
     or duration of firm transmission service Nevada Power re-sells to Third
     Parties.

     6.3   During any hour when Nevada Power is not scheduling energy on the
     transmission service provided hereunder, Los Angeles shall have the right
     to schedule energy on a nonfirm basis over such transmission service at no
     cost to Los Angeles.

     6.4   Nevada Power shall have the right to request, during the Preschedule
     Period, a change of either the Point of Receipt or Point of Delivery on a
     nonfirm, as available basis during the term of this Agreement. However,
     Nevada Power shall not request a change of both the Point of Receipt and
     Point of Delivery at the same time nor shall

                                       3
<PAGE>

     Nevada Power schedule more than one Point of Receipt/Point of Delivery
     combination (including NOB/MCC500, respectively) for any single day.

     6.5  If at the end of the contract term, Los Angeles cannot accommodate all
     requests for transmission service on the PDCI, Nevada Power shall have the
     right of first refusal to continue taking the firm transmission service
     purchased under this Agreement by accepting a rate and contract term at
     least equal to those of competing requests.

7.   TRANSMISSION CURTAILMENTS:
     --------------------------

     7.1  Los Angeles may curtail Nevada Power's Scheduling Ability hereunder in
     response to limitations on the facilities providing service hereunder due
     to: (i) uncontrollable force, as defined in Section 13; (ii) operational
     conditions such as unscheduled flow or transmission nomograms applicable to
     facilities providing service hereunder; or (iii) transmission limitations
     which are necessary or desirable in the sole judgment of Los Angeles for
     the purpose of maintenance, repairs, replacements, installation,
     investigations, and inspections of equipment and facilities which are
     operated by Los Angeles.

     7.2  For the purposes of Section 7.1, the curtailment priority for Nevada
     Power shall be the same as the curtailment priority for Los Angeles.
     Curtailments shall be allocated proportionally among Los Angeles, Nevada
     Power, and all Third Parties for whom Los Angeles is providing firm
     transmission service between NOB and MCC500.

     7.3  In the event continuity of service within Los Angeles' Control Area is
     being jeopardized or any element of Los Angeles' electrical system
     providing service hereunder is at risk of damage as determined by Los
     Angeles in its sole judgment, Los Angeles may curtail Nevada Power's
     Scheduling Ability to the extent necessary to avoid or eliminate such
     jeopardy or risk of damage while maintaining the curtailment priority
     described in Section 7.2.

     7.4  No curtailment credit will be given for any curtailments occurred
     under conditions described under Section 7 herein.

8.   SCHEDULING PROVISIONS:
     ----------------------

     8.1  Nevada Power shall endeavor to preschedule energy in the manner
     described hereunder. Nevada Power may modify existing preschedules or
     submit Real-Time schedules subject to provisions under Section 8.4, 8.5 and
     8.6 hereunder.

     8.2  Los Angeles shall establish one energy Account and one corresponding
     energy loss Account for Nevada Power's use for scheduling under this
     Agreement.

     8.3  Schedules shall be submitted to Los Angeles' Schedulers for inclusion
     in the Los Angeles interchange preschedule by 1100 hours (Pacific Time) on
     the day prior to the effective date of the Schedule. Schedules for weekend,
     NERC holiday and national holidays shall be submitted in accordance with
     prevailing WSCC procedures, or as determined by Los Angeles' Schedulers,
     whichever calls for the earlier submittal.

                                       4
<PAGE>

     Nevada Power shall submit NERC transaction tags corresponding to each
     Schedule as required by WSCC.

     8.4  If Nevada Power desires to modify its Schedule after the Preschedule
     period or to submit Real-Time Schedules, Nevada Power shall notify Los
     Angeles' Dispatcher at least one hour in advance of the hour when such
     Schedules are to become effective, provided that an Account for such
     transmission path has been previously established.

     8.5  At those times when Nevada Power requests that the Schedule be
     modified or submits a Real-Time Schedule due to an emergency on Nevada
     Power's electric system, Los Angeles will make best efforts to accommodate
     Nevada Power's request as soon as possible.

     8.6  In the event Nevada Power's Scheduling Ability is curtailed in real
     time pursuant to Section 7 herein, Nevada Power shall, immediately after
     oral notification by Los Angeles' Dispatcher, reduce Nevada Power's
     Schedule in the amount determined by Los Angeles.

     8.7  Whenever Nevada Power becomes aware of any condition, external to Los
     Angeles' Control Area, which requires that Nevada Power reduce its
     Schedules hereunder, Nevada Power shall orally notify Los Angeles'
     Dispatcher of such condition and Los Angeles' Dispatcher shall reduce
     Nevada Power's Schedules in the amount determined by Nevada Power.

     8.8  Los Angeles shall not be obligated to perform any scheduling and or
     accounting for any Third Party.

     8.9  Los Angeles reserves the right to curtail Schedules under this
     Agreement whenever Los Angeles determines, in its sole judgement, that such
     Schedules do not correspond precisely to other simultaneous Schedules at
     the Point of Receipt and the Point of Delivery, that such Schedules are
     part of an incomplete or insufficient transaction path, or that such
     Schedules violate WSCC scheduling policies.

     8.10 As an inclusion in the transmission service rates pursuant to Section
     10 hereunder, Nevada Power is entitled to submit one NERC transaction tag
     per day free of charge during the entire period of this Agreement. Los
     Angeles reserves the right to charge up to $87.36 per revision whenever
     Nevada Power desires to make a request to modify its existing Schedule
     during the day. For the purposes of this section, a single Schedule or
     revision, which prevailing WSCC procedures may require to be presented on
     multiple NERC tags, shall be counted as one tag.

     8.11 The Authorized Representatives shall coordinate changes to the
     scheduling and dispatching procedures in this Section 8 to conform to Los
     Angeles' overall system operation as such may be changed from time to time.

9.   TRANSMISSION LOSSES:
     --------------------

                                       5
<PAGE>

     9.1   Transmission losses associated with the energy scheduled pursuant to
     this Agreement shall be the responsibility of Nevada Power. The amount of
     such losses shall be deemed to be 6.36 percent of the energy transmitted
     between NOB and MCC500.

     9.2   Transmission loss shall be settled financially unless it is mutually
     agreed to settle pursuant to Section 9.3 hereunder. Nevada Power shall pay
     Los Angeles, for each month, an amount equal to the hourly California Power
     Exchange Market Clearing Price in the "day of" market at Eldorado/MCC500
     multiplied by the losses incurred hereunder during each hour of the month.

     9.3   Nevada Power shall have the right to request that the transmission
     loss incurred hereunder during the month be returned to Los Angeles with
     the actual energy provided by Nevada Power in accordance with Los Angeles's
     schedule/accounting procedure. In that event, unless otherwise notified,
     Nevada Power is assumed to return the losses concurrent with the scheduled
     energy. Nevada Power may need to purchase additional transmission to cover
     such losses.

10.  TRANSMISSION SERVICE AND ANCILLARY SERVICE RATES:
     -------------------------------------------------

     10.1  As payment for the transmission service provided hereunder, Nevada
     Power shall pay Los Angeles $150,000.00 each month.

     10.2  The above-mentioned fee of $150,000 per month shall include only the
     following services: (i) 50 MW of firm uni-direction transmission service,
     from NOB to MCC500 (ii) VAR and Voltage support service for up to 12,000
     MWh per month (an additional charge of $0.33 per MWh will be applied if
     12,000 MWh is exceeded), and (iii) one Schedule per day, with additional
     revision charges applied pursuant to Section 8.10.

     10.3  Other ancillary services, as defined by the Federal Energy Regulatory
     Commission (FERC) or the North America Electric Reliability Council (NERC)
     or WSCC, including, but not limited to, operating reserve-spinning,
     operating reserve-supplemental, replacement reserve, regulation and
     frequency response service, shall be the responsibility of Nevada Power,
     and as such they will be provided separately by Nevada Power as required.

11   BILLINGS, PAYMENTS:
     -------------------

     11.1  Commencing October 12, 2000, as soon as practicable after the last
     day of each month, Los Angeles shall render a monthly billing to Nevada
     Power for services provided hereunder during that month. Nevada Power shall
     pay such bill within twenty (20) calendar days after receipt thereof.

     11.2  If all or portion of a bill is disputed, the entire amount of the
     bill shall be paid when due and Los Angeles' Authorized Representative
     shall be concurrently provided written notice of the disputed amount and
     the basis for the dispute. Los Angeles shall reimburse any amount
     determined to have been correctly disputed, with interest calculated in
     accordance with Section 11.3 hereof, within ten (10) calendar days after
     such determination.

                                       6
<PAGE>

     11.3  Amounts which are not paid when due shall bear interest at a rate
     equal to one percent (1%) per month, prorated by the days from the date
     payment was due until the date payment is received. Payments received by
     mail shall be accepted without assessment of such interest provided the
     postmark indicates the payment was mailed on or before the due date.

     11.4  Bills shall be submitted by Los Angeles to Nevada Power at the
     following address:

               Sierra Pacific Power / Nevada Power
               Director, Transmission Business Services
               P.O. Box 10100
               Reno, Nevada 89520-0024

     11.5  Nevada Power shall make remittance to Los Angeles at the following
     address:

               Department of Water and Power
               of the City of Los Angeles
               Accounting Business Unit - Invoice Collectible Section
               P.O. Box 51111, Room 445
               Los Angeles, CA 90051-0100

     11.6  Either Party may, at any time by written notice to the other Party,
     change their respective addresses as specified in Section 11.4 or Section
     11.5.

     11.7  Los Angeles shall have the right, upon not less than fifteen (15)
     calendar days' advance written notice, to suspend the transmission service
     provided hereunder for nonpayment of bills, and to refuse to resume such
     service so long as any part of the amount due remains unpaid. Such a
     suspension of service shall not relieve Nevada Power of liability for any
     other charges which accumulate during the time that service is suspended.
     The rights reserved by and to Los Angeles shall be in addition to all other
     remedies available to Los Angeles either by law or in equity for the breach
     of any of the terms hereof.

           11.7.1  Nevada Power shall have thirty (30) calendar days
           from the notice of suspension of service to remit payment
           of the delinquent bill.

           11.7.2  If Nevada Power does not remit payment within the
           allowed time, Los Angeles may unilaterally terminate this
           Agreement.

     11.8  From time to time, for the purpose of determining the ability of
     Nevada Power to meet its obligations to make payments hereunder, Los
     Angeles may initiate a reasonable creditworthiness review, to be performed
     in accordance with standard commercial practices.

     11.9  If Los Angeles has suspended service due to Nevada Power's nonpayment
     of bills or if a creditworthiness review reveals that Nevada Power is
     subject to, or operating under, bankruptcy laws, judgments, or any other
     conditions which could materially affect Nevada Power's ability to make
     payments hereunder, Los Angeles may require Nevada Power to

                                       7
<PAGE>

     furnish a satisfactory payment bond or alternative security, acceptable to
     Los Angeles and consistent with commercial practices established under the
     Uniform Commercial Code.

     11.10 Nevada Power shall have sixty (60) calendar days from the date of
     written notification to forward the required security to Los Angeles. If
     Nevada Power does not provide the required security by the allowed time,
     Los Angeles may unilaterally terminate this Agreement upon any nonpayment
     of bills by Nevada Power.

12   LIABILITY:
     ----------

     12.1  Los Angeles shall not be liable to Nevada Power and Nevada Power
     hereby releases Los Angeles from, and agrees to hold harmless Los Angeles
     against, any claim, demand, liability, loss or damage, whether direct,
     indirect, or consequential incurred by either Nevada Power or any customers
     of Nevada Power, which results from the provisions of service under this
     Agreement.

     12.2  Nevada Power shall not be liable to Los Angeles and Los Angeles
     hereby releases Nevada Power from, and agrees to hold harmless Nevada Power
     against, any claim, demand, liability, loss or damage, whether direct,
     indirect, or consequential incurred by either Los Angeles or any customers
     of Los Angeles, which results from the provisions of service under this
     Agreement.

13   UNCONTROLABLE FORCE:
     --------------------

     13.1  Neither Party shall be considered to be in default in the performance
     of any of its obligations under this Agreement (other than obligations to
     make payment for bills rendered pursuant to this Agreement) when a failure
     of performance shall be due to an uncontrollable force. The term
     "uncontrollable force" shall mean any cause beyond the control of the Party
     unable to perform such obligations, including, but not limited to, failure
     of or threat of failure of facilities, flood, earthquake, storm, drought,
     fire, pestilence, lightning, and other natural catastrophes, epidemic, war,
     riot, civil disturbance, or disobedience, strike, labor dispute, labor or
     material shortage, sabotage, government priority, restraint by court order
     or public authority, and action or nonaction by, or inability to obtain the
     necessary authorizations or approvals from any governmental agency or
     authority which, by exercise of due diligence, such Party could not
     reasonably have been expected to avoid and which, by exercise of due
     diligence, it has been unable to overcome. Nothing contained in this
     Section 13 shall be construed as to require either Party to settle a strike
     or labor dispute in which it may be involved.

14   EFFECT OF SECTION HEADINGS: Section headings appearing in this Agreement
     ---------------------------
     are inserted for convenience only and shall not be construed as
     interpretations of text.

15   TRANSFER OF INTEREST:
     ---------------------

     15.1  Except as provided in Section 6.2, neither Party shall voluntarily
     assign or transfer this Agreement, in whole or in part, or any of its
     interest hereunder to any other person or entity, without the prior written
     consent of the other Party; provided, however, such

                                       8
<PAGE>

     consent shall not be unreasonably withheld. Any attempt to transfer or
     assign this Agreement, or any privilege hereunder without such prior
     written consent, except as provided herein, shall be void and confer no
     right to any party that is not a Party to this Agreement.

     15.2  Any successor to or assignee of the rights of either Party, whether
     by voluntary transfer, judicial sale, foreclosure sale, or otherwise, shall
     be subject to all the provisions and conditions of this Agreement to the
     same extent as though such successor or assignee were an original Party to
     this Agreement.

16   NO DEDICATION OF FACILITIES: Any undertaking by one Party to the other
     ----------------------------
     Party under any provisions of this Agreement shall not constitute the
     dedication of the system or any portion thereof of either Party to the
     public or to the other Party or any other person or entity, and it is
     understood and agreed that any such undertaking by either Party shall cease
     upon the termination of such Party's obligations under this Agreement.

17   WAIVERS: Any waiver at any time by either Party of its rights with respect
     --------
     to a default under this Agreement, or with respect to any other matter
     arising in connection with this Agreement, shall not be deemed a waiver
     with respect to any subsequent default or other matter arising in
     connection therewith. Any delay, short of the statutory period of
     limitation in asserting or enforcing any right, shall not be deemed a
     waiver of such right.

18   RELATIONSHIP OF PARTIES: The covenants, obligations, and liabilities of the
     ------------------------
     Parties are intended to be several and not joint or collective, and nothing
     contained in this Agreement shall ever be construed to create an
     association, joint venture, trust or partnership, or to impose a trust or
     partnership covenant, obligation, or liability, on or with regard to either
     Party. Each Party shall be individually responsible for its own covenants,
     obligations, and liabilities as provided in this Agreement. Neither Party
     shall be under the control of or shall deem to control the other Party.
     Neither Party shall be the agent of or have a right or power to bind the
     other Party without such other Party's written consent.

19   DISPUTES: Disputes on any matter relating to this Agreement shall be
     ---------
     discussed and resolved by the Authorized Representatives, who shall use
     their best efforts to amicably and promptly resolve such disputes. Should
     the Authorized Representatives be unable to resolve a dispute, the matter
     shall be referred to the individuals who are specified to receive written
     notices at such time pursuant to Section 23.

20   NO THIRD-PARTY RIGHTS: The Parties do not intend to create rights in, or to
     ----------------------
     grant remedies to, any Third Party as a beneficiary of this Agreement or of
     any duty, covenant, obligation, or undertaking established herein.

21   AUTHORIZED REPRESENTATIVE:
     --------------------------

     21.1  Each Party, within thirty (30) calendar days after the effective date
     of this Agreement, shall appoint and designate a person to be its
     Authorized Representative. Such appointment and designation shall be in
     writing and shall be forwarded by each Party to the other.

                                       9
<PAGE>

     21.2  Each Authorized Representative shall be authorized and empowered by
     the appointing Party to carry out the provisions of this Agreement on
     behalf of and for the benefit of such Party, and to provide liaison between
     the Parties.

     21.3  The Authorized Representatives shall have no authority to alter,
     modify or delete any of the provisions of this Agreement.

22   GOVERNING LAW: This Agreement shall be interpreted, governed by, and
     --------------
     construed under the laws of the State of California with venue in the City
     of Los Angeles.

23   NOTICES: Notifications under this Agreement, except written notices
     --------
     required or authorized herein, shall be made by telephone or such other
     means as mutually agreed to between the Parties' Dispatchers or Schedulers.
     Any written notices required or authorized under this Agreement shall be
     delivered in person or sent by registered or certified mail, postage
     prepaid, to the persons specified below:

     If to Los Angeles, the notice shall be sent to:
           Department of Water and Power
             of the City of Los Angeles
           c/o Director of Bulk Power, (or any successor thereto)
           P.O. Box 51111, Room 1149
           Los Angeles, California 90051-0100

     If to Nevada Power:
           Director of Transmission Business (or any successor thereto)
           Sierra Pacific Power / Nevada Power(
           6100 Neil Road
           P.O. Box 10100
           Reno, Nevada 89520-0024

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

24   ENTIRE AGREEMENT: This Agreement contains the entire agreement and
     -----------------
     understanding between the Parties, their agents, and employees as to the
     subject matter of this Agreement. This Agreement may be amended only by a
     written document signed by the Parties. It is understood by the Parties
     that the terms and conditions of this Agreement are unique to the
     transactions described herein and shall not, therefore, be considered as
     precedent for any future transactions between the Parties or between any of
     the Parties and a Third Party. Each Party acknowledges that each Party was
     represented by counsel in the negotiation and that it has been authorized
     to execute this Agreement. Nevada Power represents and warrants that it is
     free to enter into this Agreement and to perform each of the terms and
     covenants of it. Nevada Power represents and warrants that it is not
     restricted or prohibited, contractually or otherwise, from entering into
     and performing this Agreement, and that the execution and performance of
     this Agreement by Nevada Power will not constitute a violation or breach of
     any other Agreement between it and any other person or entity.

                                       10
<PAGE>

25   ATTORNEY FEES AND COSTS: Both Parties agree that in any action to enforce
     ------------------------
     the terms of this Agreement that each Party shall be responsible for its
     own attorney fees and costs.

/
/
/

26.  SIGNATURE CLAUSE: The signatories hereto represent that they have been
     -----------------
     appropriately authorized to enter in this Los Angeles - Nevada Power NOB to
     MCC500 50 MW Firm Transmission Service Agreement (DWP No. BP 00-001) on
     behalf of the Party for whom each signs. This Agreement is hereby executed
     as of the ______ day of _________________, 2000.

                              DEPARTMENT OF WATER AND POWER
                                OF THE CITY OF LOS ANGELES

                              By

                              BOARD OF WATER AND POWER COMMISSIONERS
                              OF THE CITY OF LOS ANGELES

Date:_________________        By:______________________________________________

                              And:_____________________________________________
                                            Secretary

                              NEVADA POWER

                              By: _____________________________________________

                              Typed name: Gary L. Porter
                                          -------------------------------------

                              Title: Exectutive Director, Transmission
                                     ------------------------------------------

                              Date signed: ____________________________________

                                       11

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