Document:

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                                                                   Exhibit 10(Q)

                                Plant Agreement

                               Table of Contents

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Item                                                                                                      Page
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Preface                                                                                                       2
ARTICLES
Article No. 1:  Introduction/Continuity of Service/Non-Discrimination                                         2
Article No. 2:  Union Security                                                                                4
Article No. 3:  Exclusive Functions of Management                                                             4
Article No. 4:  Union Activity                                                                                4
Article No. 5:  Status of Employees                                                                           6

Article No. 6:  Working Hours and Rates of Pay                                                                8
Article No. 7:  Seniority and Promotions                                                                     23
Article No. 8:  Grievance Procedure                                                                          27
Article No. 9:  Working Safety Committee                                                                     29
Article No. 10:  Inclement Weather Practice                                                                  30

Article No. 11:  Holidays                                                                                    31
Article No. 12:  Vacations                                                                                   33
Article No. 13:  Sick Leave                                                                                  36
Article No. 14:  Employee Benefit Plans                                                                      38
Article No. 15:  Leaves of Absence                                                                           49

Article No. 16:  Working Rules                                                                               51
Article No. 17:  Term of Agreement                                                                           55

EXHIBITS
Exhibit I:  Classification Descriptions                                                                      57
Exhibit II:  Schedule of Wage Rates                                                                          62
Exhibit III:  Check Off Authorization                                                                        65
Exhibit IV:  Sick Leave Agreement                                                                            66
Exhibit V:  Temporary Layoff Provisions                                                                      67

LETTERS OF UNDERSTANDING
Letter of Understanding - Article 14.4                                                                       69
Letter of Understanding:  Discipline Relative to Tardiness and Attendance                                    71
Letter of Understanding:  Working Foreman Classification                                                     72
Letter of Understanding:  Labor/Management Meetings                                                          73
Letter of Understanding:  Vacation/Sick Leave Bonus                                                          74

Letter of Understanding:  Organization Study                                                                 75
Letter of Understanding:  Work/Family Issues                                                                 76
Letter of Understanding:  Districts                                                                          77
Letter of Understanding:  Non-Bid Classifications                                                            78
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Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
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                                  Page 1 of 78
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                           GENERATION ONLY AGREEMENT

This agreement, made and entered into as of February 1, 1998, 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, 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 the Generation organization,
           excluding all clerical, 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.

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Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
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                                  Page 2 of 78
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           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.

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.

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.

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Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
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                                  Page 3 of 78
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                                 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.

                                  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.

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Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
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                                  Page 4 of 78
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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.

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                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
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                                  Page 5 of 78
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                                  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 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.

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                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
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                                  Page 6 of 78
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           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 o 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.

           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.

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Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
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                                  Page 7 of 78
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           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.

           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.

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Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                  Page 8 of 78
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           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.

           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.

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Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                  Page 9 of 78
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           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.

                                  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 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.

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                                 Page 10 of 78
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           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.

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Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
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                                 Page 11 of 78
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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 eat their lunch    Employees who work through
             eat their lunch at 2:00 p.m.       from 3:00 pm to 3:30 pm          their lunch and complete their
             would be paid eight and            would be paid eight (8) hours    shift (work until 3:30 pm)
             one-half (8 1/2) hours of          at straight time and one-half    without taking a break for
             straight-time pay.                 (1/2) hour at time and           lunch would be paid eight (8)
                                                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
                                    -------

             A line troubleman 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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 12 of 78
<PAGE>

           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).

           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
                  (excluding line troubleman), 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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 13 of 78
<PAGE>

           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.

           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.

           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 (BY LOCATION, SHIFT - as defined by Article
           6.1 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" respectively.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 14 of 78
<PAGE>

           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        Employees called out who work    Employees called out who work one (1) hour
             work two (2) hours and travel one    four (4) hours and travel one    and travel one (1) hour (round trip) will be
             (1) (round trip) will be             (1) hour (round trip) will be    paid for two (2)hours
             paid for three (3) hours.            paid for five (5)

                       EXAMPLE #4                         EXAMPLE #5
                       ----------                         ----------

             Employees called out who work        Employees called out who work
             fifteen (15) minutes and             into their regular shift
             travel one (1) hour (round           shall be paid the appropriate
             trip) will be paid for two (2)       overtime premium for at least
             hours.                               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>

           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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 15 of 78
<PAGE>

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

<TABLE>
<CAPTION>
             ----------------------------------------------------------------------------
                                           WORK LOCATIONS
             ----------------------------------------------------------------------------
                                     ----------------------------------------------------
                                         Las Vegas Valley            Reid Gardner

                                     ----------------------------------------------------
             <S>                         <C>                          <C>
             ----------------------------------------------------------------------------
             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
             ----------------------------------------------------------------------------
</TABLE>

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 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.

6.9        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 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.

                                          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 scheduled.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 16 of 78
<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, 1998  ....................  $1.20 per hour
                  February 1, 1999  ....................  $1.25 per hour
                  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, 1998  ....................  $1.35 per hour
                  February 1, 1999  ....................  $1.40 per hour
                  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:

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 17 of 78
<PAGE>

           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.

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

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 18 of 78
<PAGE>

           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.

           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.).

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 19 of 78
<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 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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 20 of 78
<PAGE>

           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.

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,

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 21 of 78
<PAGE>

           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 twenty five cents ($9.25) effective February
                  1, 1999

                . 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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 22 of 78
<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,
           and the classifications involved do not fall under the provisions of
           Article 7.5 (non-bid classifications), 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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 23 of 78
<PAGE>

           SELECTION CRITERIA: Exclusive of the provisions of Articles 7.5
           ------------------
           (NON-BID CLASSIFICATIONS) and 7.10 (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.

           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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 24 of 78
<PAGE>

7.5        NON-BID CLASSIFICATIONS: When vacancies occur in the classifications
           listed below, the Company shall fill the vacancies with the most
           senior employees who are qualified and request the position in
           accordance with the Company job posting system. To be qualified
           employees must do the following prior to the vacancies being
           announced:

                . Pass a skills qualification test

                . Complete a prescribed course of study (where applicable)

                . Have an overall score of at least 2.5 on their most recent
                  performance appraisal

                . Have no letter(s) of discipline which is less than one (1)
                  year old in their human resources personnel file

           Prior to awarding positions, employees must pass a physical
           assessment relating to the new position. These requirements apply to
           the following job classifications (classifications may be added or
           deleted upon mutual consent of the Company and Union):

               . Coal Yard Technician

               . Communications Groundman

               . Customer Support Representative

               . Fleet Utility Technician

               . Lines Groundman

               . Maintenance Utility Technician

               . Meter Reader

               . Office Support Representative

               . Rodman-Chainman

               . Substation Groundman

               . Utility Operator

           Employees awarded a position under the provisions of this Article may
           not request and be awarded a new position for a minimum of six (6)
           months.

7.6        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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 25 of 78
<PAGE>

7.7        SUB-DEPARTMENTS: When employees are awarded bids in the
           sub-department in which they are working, in accordance with Articles
           7.3 (STAFFING VACANCIES) and 7.5 (NON-BID CLASSIFICATIONS) 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
                                         -------

7.8        TIME IN CLASSIFICATION PAY: When employees are awarded bids in a
           different sub-department from which they are working, their rate of
           pay for the awarded job shall be the rate established for the
           classification as listed in the appropriate agreement. If an employee
           has previously occupied the position, the employee shall be given
           credit for time spent in that position for the purposes of
           establishing the new rate. Where the awarded job has more than one
           rate, such rates being based on time spent in classification,
           employees shall be assigned the starting rate for the new
           classification unless such rate will result in a lesser rate than
           their former classification. If assigning the starting rate to
           employees awarded the job would result in a lesser rate than their
           last rate, employees shall be granted one year of credit or the
           amount of their Company seniority, which ever is less, as time spent
           in the new classification for the purpose of establishing their new
           rate of pay.

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

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 26 of 78
<PAGE>

7.10       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.

                                  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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 27 of 78
<PAGE>

           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.

           STEP THREE (MUTUAL GAINS HEARING): The level II supervisor shall
           ----------------------------------
           schedule a hearing with the grievant, steward, supervisor, and
           official Union and Human Resources 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
           Human Resources 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
           ---------------------------------
           _______________________ 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 ___________________ 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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 28 of 78
<PAGE>

           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.

                                  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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 29 of 78
<PAGE>

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.

                                 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

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 30 of 78
<PAGE>

           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.

                                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 work days.

           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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 31 of 78
<PAGE>

           Following are to be considered holidays:

<TABLE>
<CAPTION>

                                                  ----------------------------------------------------
                                                                   COMPANY HOLIDAYS
                                                  ----------------------------------------------------
                                                  ----------------------------------------------------
                                                      1998         1999         2000         2001
                                                  ----------------------------------------------------
             <S>                                  <C>              <C>          <C>          <C>
             -----------------------------------------------------------------------------------------
             New Year's Day                          Jan 1
             -----------------------------------------------------------------------------------------
             Martin Luther King's Day
             -----------------------------------------------------------------------------------------
             President's Day
             -----------------------------------------------------------------------------------------
             Memorial Day (observed)
             -----------------------------------------------------------------------------------------
             Independence Day
             -----------------------------------------------------------------------------------------
             Labor Day
             -----------------------------------------------------------------------------------------
             Veteran's Day
             -----------------------------------------------------------------------------------------
             Thanksgiving Day
             -----------------------------------------------------------------------------------------
             Thanksgiving Friday
             -----------------------------------------------------------------------------------------
             Christmas Eve Day
             -----------------------------------------------------------------------------------------
             Christmas Day
             -----------------------------------------------------------------------------------------
             Floating Birthday/Holiday                                See Article 11.3
             -----------------------------------------------------------------------------------------
</TABLE>

11.3       FLOATING BIRTHDAY/HOLIDAY: An employee may observe the floating
           holiday 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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 32 of 78
<PAGE>

11.4       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.

11.5       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.

11.6       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.

11.7       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.

                                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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 33 of 78
<PAGE>

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.

<TABLE>
<CAPTION>
           Month Hired                                                                               Vacation Hours
           -----------                                                                               --------------
           <S>                                                                                       <C>
           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
</TABLE>

12.3       ACCRUED VACATION: Effective January 1995, regular employees will be
           granted vacations, with straight time pay, according to the following
           schedule:

<TABLE>
<CAPTION>
           After Continuous Service of                                                               Vacation Hours
           ---------------------------                                                               --------------
           <S>                                                                                       <C>
           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
</TABLE>

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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 34 of 78
<PAGE>

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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 35 of 78
<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 an
           average of 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).

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 36 of 78
<PAGE>

                . 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.

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).

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 37 of 78
<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 the prescription card service (PCS)
           which is 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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 38 of 78
<PAGE>

           DENTAL BENEFIT: The Company will continue to provide a dental care
           --------------
           benefit, expanded to include a dental PPO (effective January 1, 1994)
           and an orthodontic benefit (effective April 1, 1994), 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. Effective February 1,
           1994, 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, with a deductible amount of twenty-five dollars ($25.00) to
           be paid by the employee.

           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
           rate listed for 1994 will be effective August 1, 1994 and remain
           until January 1, 1996. The monthly contributions will change on
           January 1st of each subsequent year.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 39 of 78
<PAGE>

<TABLE>
<CAPTION>
                                            ------------------------------------------------------------------------
                                                                     MONTHLY CONTRIBUTIONS
                                            ------------------------------------------------------------------------

                                                     8/1/94 thru 1/1/96                  1/1/96 thru 1/1/97
                                                    HMO            NPC Plan            HMO            NPC Plan
                                                (Option C)       (Option A/B)       (Option C)      (Option A/B)
          ----------------------------------------------------------------------------------------------------------
          <S>                                <C>                 <C>                <C>             <C>
                    Employee Only                   32                24                35              26.50
          ----------------------------------------------------------------------------------------------------------

                  Employee & Spouse                 65                49              71.50              54
          ----------------------------------------------------------------------------------------------------------

                 Employee & Children                59                44                65              48.50
          ----------------------------------------------------------------------------------------------------------

             Employee, Spouse & Children            97                72              106.50             79
          ----------------------------------------------------------------------------------------------------------

            Deductible/Co-Insurance Limit                 250/4000                            300/4500
          ----------------------------------------------------------------------------------------------------------

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

                                                     1/1/97 thru 1/1/98                  1/1/98 thru 1/1/99
                                                    HMO            NPC Plan            HMO            NPC Plan
                                                (Option C)       (Option A/B)       (Option C)      (Option A/B)
          ----------------------------------------------------------------------------------------------------------

                    Employee Only                  38.50              29              42.50              32
          ----------------------------------------------------------------------------------------------------------

                  Employee & Spouse                78.50             59.50            86.50             65.50
          ----------------------------------------------------------------------------------------------------------

                 Employee & Children               71.50             53.50            78.50              59
          ----------------------------------------------------------------------------------------------------------

             Employee, Spouse & Children            117               87              128.50            95.50
          ----------------------------------------------------------------------------------------------------------

            Deductible/Co-Insurance Limit                   350/5000                            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 to be effective by August 1, 1994:

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 40 of 78
<PAGE>

           Option A:
                . 80/20 Co-insurance factor

                . $4000.00 Co-insurance limit

                . $250.00 Individual deductible

                . Family deductible (Employee & Spouse; Employee & Children;
                  Employee, Spouse & Children) equal to two (2) times the
                  individual deductible

                . Hospital deductible - $300.00. The hospital deductible shall
                  be increased to $400.00 effective January 1, 1997.

           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. The lifetime benefit for mental health and
           substance abuse rehabilitation will be limited to $50,000. The
           accumulation towards this lifetime limit will begin no later than
           August 1, 1994.

           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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 41 of 78
<PAGE>

           GENERAL BENEFIT PROVISIONS:
           ---------------------------
                . Effective August 1, 1994, the lifetime maximum medical benefit
                  will be increased to $1,000,000.

                . Effective August 1, 1994, 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%) reimbursement, in lieu of the stated
                  reimbursement percentage.

                . Effective August 1, 1994, all benefits are subject to the
                  deductible and/or co-pay plus percentage, thereby eliminating
                  any first dollar coverage.

                . Effective August 1, 1994, 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.

                . Effective April 1, 1994, an orthodontic benefit of $1,500 will
                  be provided.

                . Effective January 1, 1994, a dental PPO will be established.

                . Effective August 1, 1994, a hearing aid benefit of $500 every
                  five (5) years will established 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.

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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 42 of 78
<PAGE>

<TABLE>
<CAPTION>
                                                             MAXIMUM                          PERCENT OF
                            LENGTH                          PERIOD OF                            BASE
                          OF SERVICE                        BENEFITS                           EARNINGS
                          ----------                        --------                           --------
                         <S>                                <C>                               <C>
                          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
</TABLE>

                . 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 the Director of Employee
           Relations, or their designated 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.

           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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 43 of 78
<PAGE>

           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.

<TABLE>
<CAPTION>
                    Years Of Company Service                       A Pay Rate That Is Not Less Than
                    ------------------------                       --------------------------------
                    <S>                                            <C>
                     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
</TABLE>

           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:

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 44 of 78
<PAGE>

                . 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.

<TABLE>
<CAPTION>
                                                             MAXIMUM                          PERCENT OF
                            LENGTH                          PERIOD OF                            BASE
                          OF SERVICE                        BENEFITS                           EARNINGS
                          ----------                        --------                           --------
                          <S>                               <C>                                <C>
                           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
</TABLE>

                *  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) day 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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 45 of 78
<PAGE>

                . 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 Nevada Power Company Retirement Plan, a
           defined benefit pension plan bearing No. 003, including the
           amendments dated March 5, 1980, 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 selection of a surviving spouse benefit will
           revert to a single life annuity if the spouse predeceases the retired
           employee.

           Effective February 1, 1994, the pension plan will be 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

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<PAGE>

           five-year average earnings is the average of the highest sixty (60)
           consecutive months of earnings.

           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.

           401K CONTRIBUTION/COMPANY MATCH: Effective on March 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 401k 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 401k plan. Company
           contributions will be invested in Nevada Power Company stock.

           Effective on February 1, 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 401k plan. Company
           contributions will be invested in Nevada Power Company stock.

           Effective on February 1, 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 401k plan. Company
           contributions will be invested in Nevada Power Company stock.

14.6       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.

14.7       LONG-TERM DISABILITY INSURANCE: The Company will provide a long term
           disability (LTD) plan by February 1, 1991, 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

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<PAGE>

           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.

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<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.

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<PAGE>

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.

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-two (32) 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.

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.

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<PAGE>

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.

                                 ARTICLE NO. 16

                                  Working Rules

16.1       SAFETY GEAR: Rubber gloves, hose, hoods and blankets may be used to
           make as safe as possible any work performed on any equipment having
           conductors energized in excess of 750 volts, in addition, hot line
           tools may be used where 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 sub-part "v"
           of the Occupational Safety and Health Act (OSHA) shall be considered
           minimum standards for work performed on power transmission and
                   ------------------------------------------------------
           distribution equipment.
           ----------------------

16.2       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

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<PAGE>

           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.

           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 seven hundred fifty
           volts (750). 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.

           APPRENTICE LINEMAN: An apprentice lineman who has completed at least
           ------------------
           twelve (12) months as an apprentice with the Company may be used to
           install and maintain private area lighting on existing poles and will
           be assisted by a groundman for this work, contrary to language
           elsewhere in this Agreement. Private area lighting, which requires
           the excavation for an installation of a pole, shall be accomplished
           by a special line crew. The assignment of any apprentice to the
           private area lighting program shall be on a non-permanent basis and
           rotated in accordance with the apprentice program.

16.3       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.

16.4       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

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           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)".

16.5       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.

16.6       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.

16.7       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

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           personnel file by documenting this change in behavior and providing
           written authorization to Human Resources.
                                    ---------------

16.8       REQUIRED LICENSES, PERMITS, CDLs: 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.

16.9       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.

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<PAGE>

                                 ARTICLE NO. 17

                                Term of Agreement

17.1       DURATION: This Agreement shall take effect on February 1, 1998, and
           shall continue in effect for the term February 1, 1998 to 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.

17.5       EFFECTIVE DATE OF AGREEMENT: It is mutually agreed by and between the
           parties signatory hereto that the Agreement dated February 1, 1990,
           is superseded by this Agreement dated as of February 1, 1994. Except
           as otherwise expressly provided herein, the provisions of this
           Agreement shall be effective February 1, 1994.

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<PAGE>

In witness whereof, the parties hereto have executed this Agreement on January
30, 1998.

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

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

_____________________________________________________________
Gloria Banks Weddle
Vice President,
Human Resources and Corporate Services

                            NEGOTIATING COMMITTEES
                            ----------------------

             IBEW, Local No. 396             Nevada Power
             -------------------             ------------
             Jim Anzinger                    Gloria Banks Weddle

             Steve Hitchcock                 Dan Potter

                                             Vanessa Farias

                                             Trudy Haszlauer

                                             Flory Marzan

                                             Jose Villa

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<PAGE>

                                   EXHIBIT I

                          CLASSIFICATION DESCRIPTIONS

                                (Alphabetical)

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 TECHNICIAN
Assists the steam plant electrician while in training for journeyman. Assists
the journeyman in the installation, maintenance, repair and testing of
electrical equipment in a generating station, and may be required to perform
other duties as assigned.

APPRENTICE INSTRUMENT TECHNICIAN
Will assist the journeyman instrument technician while training for journeyman.
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 instrument and
control supervisor.

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.

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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 guages, 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.

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

GENERATION TECHNICIAN
Employees will perform any and all tasks for which they are properly trained and
can competently perform at the intermediate level in generation classifications.
The ratio should not exceed 1 Generation Technician for 4 Maintenance Journeymen
(1:4).

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

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 58 of 78
<PAGE>

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.

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.

LINES GROUNDMAN
Assists a lineman in a crew in the laboring work involved in the setting up of
overhead transmission lines and overhead and underground distribution lines;
digs holes; clears rights-of-way; handles tools and materials; steadies poles as
they are raised by winch and tamps dirt around the pole to hold it in place:
passes work tools, equipment and material from ground to lineman on the poles;
may be required to drive a truck; may be permitted to climb. A groundman shall
be permitted to climb only in established training sites which are not energized
and may be required to perform other duties as assigned.

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
or generation technician. Employees will

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 59 of 78
<PAGE>

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. Operates special pole yard crane to
receive, load and unload poles, large transformers and cable reels, switches and
other heavy equipment, and determines location and reordering of same.
Supervises the orderly accumulation and removal of scrap materials in the pole
yard.

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.

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.

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

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 60 of 78
<PAGE>

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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 61 of 78
<PAGE>

                                  EXHIBIT II

                            SCHEDULE OF WAGE RATES

<TABLE>
<CAPTION>
                                                                                              Newly         Newly
                                                   Existing      Existing     Effective       Hired         Hired
                                                    EMPL.         EMPL.        7/15/99        Empl.         Empl.
                                                  Effective     Effective                    Effective    Effective
CLASSIFICATIONS:                                  1/31/2000     1/29/2001                    1/31/2000    1/31/2000
<S>                                               <C>           <C>            <C>         <C>            <C>
MATERIALS
Lead Material Specialist                            24.56         25.30         20.13         20.13         20.75

Material Specialist
           1/st/ six months                         20.67         21.29         16.45         16.95         17.46
           2/nd/ six months                         21.46         22.10         17.08         17.60         18.12
           Thereafter                               22.33         23.00         17.78         18.31         18.86
           (Red Circle)                             23.02         23.71         18.33         18.88         19.44

Warehouse Utility Technician
           1/st/ six months                         15.33         15.79         12.20         12.57         12.95
           2/nd/ six months                         15.92         16.40         12.68         13.05         13.45
           Thereafter                               16.51         17.00         13.14         13.54         13.94

GENERATION
Lead Coal Yard Operator                             28.07         28.91         22.35         23.02         23.71

Lead Laboratory Technician                          27.56         28.39         21.94         22.60         23.28

Maintenance Technician
           1/st/ six months                         18.27         18.82         14.55         14.98         15.43
           2/nd/ six months                         18.87         19.43         15.02         15.47         15.93
           3/rd/ six months                         19.45         20.04         15.49         15.95         16.43
           4/th/ six months                         20.05         20.65         15.96         16.44         16.93
           5/th/ six months                         20.63         21.25         16.42         16.92         17.43
           6/th/ six months                         21.23         21.87         16.90         17.41         17.93
           Thereafter*                              21.81         22.47         17.37         17.88         18.43
           (Red Circle)                             24.67         25.41         19.64         20.23         20.84
           (Red Circle)                             25.12         25.88         20.00         20.60         21.22
           (Red Circle)                             27.05         27.87         21.54         22.18         22.85

Lead                                                30.36         31.27         24.17         24.90         25.64

Mechanical Technician/Machinist                     27.62         28.45         21.98         22.65         23.33
           (Red Circle)                             30.12         31.02         23.98         24.70         25.44

Mechanical Technician/Mechanic                      27.62         28.45         21.98         22.65         23.33
           (Red Circle)                             30.12         31.02         23.98         24.70         25.44

Mechanical Technician/Welder                        27.62         28.45         21.98         22.65         23.33
           (Red Circle                              30.12         31.02         23.98         24.70         25.44
</TABLE>

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 62 of 78
<PAGE>

<TABLE>
<CAPTION>
                                                                                              Newly         Newly
                                                   Existing      Existing     Effective       Hired         Hired
                                                    Empl.         empl.        7/15/99        Empl.         Empl.
                                                  Effective     Effective                   Effective     Effective
CLASSIFICATIONS:                                  1/31/2000     1/29/2001                   1/31/2000     1/29/2001
<S>                                               <C>           <C>            <C>          <C>          <C>
Electrical/Instrument Technician                    27.62         28.45         21.98         22.65         23.33
           (Red Circle)                             30.12         31.02         23.98         24.70         25.44
           (Red Circle)                             30.73         31.65         24.46         25.20         25.95

Coal Yard Equipment Operator                        25.53         26.30         20.33         20.93         21.57

Relief Control Operator                             28.62         29.48         22.79         23.47         24.17

Control Operator
           1/st/ six months                         27.16         27.98         21.62         22.27         22.94
           Thereafter                               27.95         28.79         22.25         22.92         23.61

Relief Assistant Control Operator                   25.75         26.52         20.50         21.12         21.75

Assistant Control Operator
           1/st/ six months                         24.37         25.10         19.40         19.98         20.58
           Thereafter                               25.09         25.84         19.98         20.57         21.19

Relief Auxiliary Operator                           24.57         25.31         19.57         20.15         20.75

Auxiliary Operator
           1/st/ six months                         23.29         23.99         18.54         19.10         19.67
           Thereafter                               23.93         24.65         19.05         19.62         20.21

Apprentice Mechanical (Machinist, Mechanic, Welder)
Apprentice Electrical/Instrument Technician
           1/st/ six months                         20.51         21.13         16.33         16.82         17.33
           2/nd/ six months                         21.34         21.98         16.99         17.50         18.02
           3/rd/ six months                         22.07         22.73         17.56         18.10         18.64
           4/th/ six months                         22.83         23.51         18.19         18.72         19.28
           5/th/ six months                         23.60         24.31         18.79         19.35         19.93
           6/th/ six months                         24.35         25.08         19.38         19.97         20.57
           7/th/ six months                         25.12         25.88         20.00         20.60         21.22
           8/th/ six months                         25.88         26.66         20.61         21.22         21.86
           Thereafter*                              27.62         28.45         21.98         22.65         23.33

Laboratory Technician
           1/st/ six months                         20.51         21.13         17.91         16.81         17.33
           2/nd/ six months                         23.34         24.04         18.58         19.14         19.71
           3/rd/ six months                         24.20         24.92         19.26         19.84         20.43
           Thereafter                               25.09         25.84         19.98         20.57         21.19
</TABLE>

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 63 of 78
<PAGE>

<TABLE>
<CAPTION>
                                                                                              NEWLY         NEWLY
                                                   Existing      Existing                     HIRED         HIRED
                                                    Empl.         Empl.                       EMPL.         EMPL.
                                                  Effective     Effective                   EFFECTIVE     EFFECTIVE
CLASSIFICATIONS:                                  1/31/2000     1/29/2001                   1/31/2000     1/29/2001
<S>                                               <C>           <C>                         <C>           <C>
Maintenance Utility Technician (Red Circle)
           1/st/ six months                         14.94         15.39                       14.94         15.39
           2/nd/ six months                         15.45         15.91                       15.45         15.91
           3/rd/ six months                         15.94         16.42                       15.94         16.42
           4/th/ six months                         16.55         17.05                       16.55         17.05
           5/th/ six months                         17.20         17.72                       17.20         17.72
           6/th/ six months                         17.85         18.39                       17.85         18.39
           Thereafter                               18.47         19.02                       18.47         19.02
           (Red Circle)                             20.12         20.73                       20.12         20.73

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

Trainer - Power Delivery                            30.36         31.27                       24.90         25.64
</TABLE>

* Subject to satisfactory completion of apprentice program.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 64 of 78
<PAGE>

                                  EXHIBIT III

                International Brotherhood of Electrical Workers
                              Local Union No. 396

                            CHECK OFF AUTHORIZATION

     I, _____________________________________________________________, herewith
                     (print name)                   (employee no.)
authorize 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 ____________________________________________________________________

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 65 of 78
<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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 66 of 78
<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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 67 of 78
<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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 68 of 78
<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 Thrift
EMPLOYEE      Plan actively employed on January 1, 1988, may elect to receive
--------
CONTRIBUTION  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.

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 69 of 78
<PAGE>

OPTION II:    Participants in the Nevada Power Company Retirement and Thrift
EMPLOYEE      Plan actively employed on January 1, 1988, may choose to leave
--------
CONTRIBUTION  their employee contributions in the Plan, along with earnings and
------------        --------
              interest computed at 5% per annum from January 1, 1976,
              untilretirement 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 Nevada
EMPLOYER      Power Company Retirement and Thrift Plan actively employed on
--------
CONTRIBUTION  January 1, 1988, may elect to withdraw the employer 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 Thrift
EMPLOYER      Plan actively employed on January 1, 1988, may elect to leave the
CONTRIBUTION  employer's contribution in the Plan, along with earnings and
              interest computed at 5% per annum from January 1, 1976, until
              thedate 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

ACCEPTED:

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

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 70 of 78
<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,

Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 71 of 78
<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 buy-out in the form of Company stock in the employees'
401K account. These issues and other remedies shall be discussed with the Union
and affected employees by February 1995.

Very truly yours,

Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 72 of 78
<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,

Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 73 of 78
<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,

Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 74 of 78
<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,

Gloria Banks Weddle
Vice President,  Human Resources and Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 75 of 78
<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,

Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 76 of 78
<PAGE>

January 6, 1994

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

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

DISTRICTS

Dear Mr. Anzinger:

During the negotiations of the Plant agreement, which expires in February 1994,
the Company and Union agreed to reconvene and further discuss district issues
including the Developer Contracts Administration program, underground
inspection, clerk dispatcher/planner schedule redundancies, in an effort to
promote operational efficiencies by evaluating job responsibilities of both
bargaining unit and non-bargaining unit positions.

In an effort to allow the districts sufficient time to become operational, the
Company and Union will meet to discuss these issues by September 1, 1994.

Very truly yours,

Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 77 of 78
<PAGE>

January 6, 1994

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

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

NON-BID CLASSIFICATIONS

Dear Mr. Anzinger:

During the negotiations of the Plant agreement, which expires in February 1994,
the Company and Union created a non-bid selection process for specific
classifications listed in Article 7.5. Employees who are interested in these
positions must complete a curriculum that pre-qualifies them for consideration.

The Union and Company have agreed that the development and coordination of this
curriculum will be accomplished through labor/management meetings, and that the
information must be available and communicated to employees by August 1, 1994.
The non-bid selection process for each classification will be effective on the
date that an employee has completed the pre-qualifying curriculum for that
classification.

Very truly yours,

Gloria Banks Weddle
Vice President, Human Resources and Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local 396

<TABLE>
<S>                                  <C>             <C>         <C>                   <C>
                                     ____________    ________    _______________       _______
Initials indicating approval:         JA (Union)       Date       GBW (Company)         Date
</TABLE>

                                 Page 78 of 78<PAGE>

                                                                   Exhibit 10(R)

                              Clerical Agreement
                               Table of Contents

<TABLE>
<CAPTION>
Article                                                                                     Page

                                    Articles
<S>                                                                                         <C>
Preface..................................................................................      3

Article No. 1:   Introduction/Continuity of Service/Non-Discrimination...................      3

Article No. 2:   Union Security..........................................................      5

Article No. 3:   Functions of Management.................................................      5

Article No. 4:   Union Activity..........................................................      6

Article No. 5:   Status of Employees.....................................................      6

Article No. 6:   Working Hours and Rates of Pay..........................................     12

Article No. 7:   Seniority and Promotions................................................     19

Article No. 8:   Grievance Procedure.....................................................     22

Article No. 9:   Working Safety Committee................................................     25

Article No. 10:  Inclement Weather Practice..............................................     26

Article No. 11:  Holidays................................................................     27

Article No. 12:  Vacations...............................................................     29

Article No. 13:  Sick Leave..............................................................     32

Article No. 14:  Employee Benefit Plans..................................................     34

Article No. 15:  Leaves of Absence.......................................................     53

Article No. 16:  General Provisions......................................................     56

Article No. 17:  Term of Agreement.......................................................     58
</TABLE>

                                    Page #1
<PAGE>

                                   Exhibits

Exhibit I:  Classification Descriptions..................................    60

Exhibit II:  Wage Rates - Tier 1.........................................    63

Exhibit II-A:  Wage Rates - Tier 2.......................................    68

Exhibit III:  Check Off Authorization....................................    70

Exhibit IV:  Sick Leave Agreement........................................    71

Exhibit V:  Temporary Layoff Provisions..................................    72

                           Letters of understanding

Article 14.4.............................................................    75

Discipline Relative to Tardiness and Attendance..........................    77

Injuries Relative to Dog Bites...........................................    78

Vacation/Sick Leave Bonus................................................    79

Organization Study.......................................................    80

Labor/Management Meetings................................................    81

Work/Family Issues.......................................................    82

Memorandum of Settlement.................................................    83

Flex Scheduling..........................................................    84

Telephone Service Operations.............................................    86

Performance Evaluations Regarding Seniority..............................    87

Alternate Field, Field Service, Field Service Investigator...............    88

1994 - Thirty Year Employees Lost Vacation...............................    89

Incentive Programs.......................................................    90

No Layoffs...............................................................    91

Reclassification of Retail Operations Representatives....................    92

                                     Index

Index....................................................................    93

                                    page #2
<PAGE>

                              Clerical AGREEMENT

This agreement, made and entered into as of February 1, 1998, 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, transmitting
     and distributing electric power and energy, 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 Customer Service, Energy Services, Major Customer Services (LGS
     Billing), Field Service, Meter Shop, Districts, Material/Warehousing,
     Reprographic Services and Mail Room/Receiving Departments 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.

                                    Page #3
<PAGE>

     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.

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.

                                    Page #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.

                                    Page #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  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.

4.4  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.

                                 ARTICLE NO. 5
                              Status Of Employees

5.1  STATUS DESIGNATION: Employees shall be designated as part-time, \
     temporary, probationary, or regular.

     PART-TIME: A part-time employee is one who is hired for a job that is of
     indefinite duration and whose regular work schedule is not more than thirty
     (30) hours per week. The number of part-time employees shall not exceed the
     rate of one part-time employee to five regular employees (1:5) within the
     same classification. A part-time employee shall not displace any regular
     employee covered under the terms of this agreement and shall be limited to
     non-field type activities. After working 1,040 straight time hours, a part-
     time employee shall be eligible for group life and medical insurance
     (excluding dental and vision), covering the employee only. If a part-time
     employee is offered and accepts a regular position, an adjusted date of
     hire, crediting actual time worked, will be calculated. If the part-time
     employee has worked at least 1,040 straight time hours at the time the
     regular position is awarded, the employee shall be eligible for all
     applicable benefits on the effective date of the award.

                                    Page #6
<PAGE>

     The ratio for part-time Meter Readers will be five (5) full-time employees
     for every one (1) part-time employee.

     The ratio for part-time Customer Service - Retail Customer Representatives
     will be five (5) full-time for every one (1) part-time employee.

     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 1,040 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
     at completion of that twelve month period.

     If an leased/agency employee works at least 1,040 straight-time hours
     during a twelve (12) month period in the same temporary position, the
     position will become authorized. The selection for the position will be
     made in accordance with Article 7, Seniority and Promotions.

     The Company will endeavor to provide the Union with a list of temporary and
     leased/agency employees and hours worked.

     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.

                                    Page #7
<PAGE>

     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.

     REGULAR: A regular employee is one who has completed a probationary period
     and is in an authorized position. At that time, the employee is eligible
     for the benefits included in this agreement.

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.

                                    Page #8
<PAGE>

     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, part-time
     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 following
     process will be used for breaking the tie: Alphabetically by Last Name ...
     if last names are the same, then First Name ... if last name and first name
     are the same, Middle Name; if last name, first name and middle name are the
     same, month, day of birth, and year will be used. 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 of the company 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.

     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.

                                    Page #9
<PAGE>

     EMPLOYMENT STATUS: Any regular employee who is laid-off due to lack of work
     -----------------
     has a right to replace any part-time or 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: Full time employees hired on or before November 18, 1998, and
     who are laid off during the fourth (4th) year of the Agreement will receive
     the following benefits:

     ----------------------------------------------------------------
           Continuous Service with      Severance Benefit Period
                 Nevada Power
     ----------------------------------------------------------------
             6 months to 5 years                 6 months
     ----------------------------------------------------------------
             6 years to 10 years                 9 months
     ----------------------------------------------------------------
            11 years to 20 years                12 months
     ----------------------------------------------------------------
            21 years or more                    18 months
     ----------------------------------------------------------------

     The employee shall be entitled to receive the same medical and life
     insurance coverage that the employee had prior to the layoff for the same
     period as the Severance Benefit Period above.

     All other employees who are laid off will receive the following severance
     benefits:

     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.

     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.

                                   Page #10
<PAGE>

           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 an
           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.

                                           EXAMPLE
                                           -------
                 If Customer Service becomes a wholly owned affiliate of Nevada
                 Power Company severance under this article 5.5, represented
                 employees will not receive severance pay; this will not be
                 considered a break in service.

                                   Page #11
<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: Except as provided for part-time employees, the basic work
           ---------
           week shall consist of five (5) consecutive work days, regularly
           scheduled between the hours of 12:01 am, Monday, and 12:00 midnight,
           Sunday, provided that no employee shall be assigned, as part of a
           regular work schedule, to work on Saturday or Sunday, unless such
           employee voluntarily requests to work such schedule, or is hired or
           has requested reclassification for such purpose, and provided
           further, that employees in the Field Service Representative and
           Service Dispatcher classifications may be required, as part of their
           regular work schedule, to work on Saturday.. 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 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.

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

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

           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 following
           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.

                                   Page #12
<PAGE>

                    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.

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: With the exception of part-time employees, supervisors
           will establish a meal period, without pay, of either one-half (1/2)
           or one (1) hour.

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.

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

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

           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 the second day of a two days off
                    period, with an overtime minimum as provided in Article 6.8
                    (CALL-OUTS).

                .   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 6.8 (CALL-OUTS).

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

                                   Page #13
<PAGE>

6.5        OVERTIME EQUALIZATION: The Company will endeavor to distribute
           overtime work as evenly as possible among those employees qualified
           and desiring such work. Each department will create policies and
           procedures for overtime equalization through labor/management
           meetings.

           For purposes of distributing overtime, the Company will maintain and
           post overtime lists in each major sub-department office indicating
           time offered, time worked and other information for inspection by the
           employees and the Union.

6.6        BI-LINGUAL REPRESENTATIVES: Employees in Customer Service who are
           designated as bi-lingual representatives shall be paid a thirty
           dollar ($30) bonus on a bi-weekly basis. This bonus will be paid when
           the employee uses sick leave or vacation, but will not be paid when
           the employee is on disability or using Employers Insurance Company of
           Nevada benefits.

6.7        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, II and II-A 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 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.

                                   Page #14
<PAGE>

6.8        CALL-OUTS:
           TWO HOUR MINIMUM: Employees called out for overtime duty shall
           ----------------
           receive at least two (2) hours pay. Employees called out who work
           into their regular shift shall be paid the appropriate overtime
           premium for at least two (2) hours and straight time for the
           remainder of the shift. The two (2) hour call-out minimum applies but
           does not change the normal starting time.

            -------------------------------------------------------
                                    EXAMPLE
                                    -------

                    An employee who is called out one (1) hour
                    before the shift would be paid two (2) hours of
                    double time and seven hours of straight time.
            -------------------------------------------------------

6.9        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.

6.10       CHANGE IN WORK SCHEDULE: Employees shall be provided at least
           twenty-four (24) hours notice of any change in work schedule. The
           notification period begins twenty-four (24) hours prior to the start
           of the changed work schedule. Employees who do not receive such
           notice shall be paid at one and one-half (1 1/2) times the employee's
           base rate for all hours worked outside their normal work schedule
           until such notice requirements have been satisfied. No notice is
           required to return employees to their regular work schedule.

           TRAINING EXCEPTIONS: The Company may for the purposes of training
           only, change schedules without incurring the premium penalties
           mention 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.

                                   Page #15
<PAGE>

           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.

6.11       SHIFT DIFFERENTIAL: Fixed shift employees will be paid their shift
           differential for all hours worked on that day. For 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, 1998  ....................  $1.20 per hour
                  February 1, 1999  ....................  $1.25 per hour
                  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, 1998  ....................  $1.35 per hour
                  February 1, 1999  ....................  $1.40 per hour
                  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.

6.12       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,

           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.

                                   Page #16
<PAGE>

           For purposes of this Article, no meal allowances will be provided for
           any scheduled overtime work on an employee's usual days off when the
           Company has given advance notice more than twelve (12) hours prior to
           the start of scheduled overtime and prior to the end of the last
           shift.

           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 twenty-five cents ($9.25) effective February
                  1, 1999

                . 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.

6.13       VEHICLE USAGE: No employee shall be required to operate a personal
           vehicle in the course of employment as a condition of employment.
           Employees shall be required to obtain a Nevada driver's license
           whenever operation of a Company provided vehicle is a requirement of
           the job.

           Employee's who are authorized to use personal vehicles in the course
           of their employment shall be compensated for use of the vehicle at a
           rate equal to the Internal Revenue Service (IRS) maximum mileage
           expense.

--------------------------------------------------------------------------------
Example 1: If employees are assigned to work at an office other than their
     normal base reporting point, after they have already reported for work at
     their normal base reporting point, and no Company vehicle is available,
     they shall be compensated for use of their vehicles for the actual miles
     traveled from office-to-office as designated on the chart attached at the
     rate equal to the Internal Revenue Service (IRS) maximum mileage expense.
     If they return home directly from that office, they shall not be
     compensated for the miles traveled from the office to their home.

Example 2: If employees report for work at an office other than their normal
     base reporting point directly from home, they shall not be compensated for
     the miles traveled from their home to the office nor from the office to
     their home. Only those miles traveled from are office-to-office
     compensable.
--------------------------------------------------------------------------------

                                   Page #17
<PAGE>

           Any employee who is authorized the use of a private vehicle during
           the course of his or her employment shall be provided liability
           protection under the terms of the public liability and property
           damage insurance policy maintained by the Company as if the employee
           were operating a Company-owned vehicle except that if the laws of the
           State of Nevada establish that the personal insurance policy of the
           employee shall be the primary insurance, then such consideration
           shall be first applied. In the event of an accident involving an
           uninsured motorist where damages to the employee's private vehicle
           are not recoverable from the responsible party, then costs of
           repairing such damage shall be reimbursed by the Company.

Mileage Chart:

              CLK DI HCUST HSVC IND  LGHLN NLV PRSN RG RYAN SPRNG SNRIS
Clark          0   5    7     5  13         13   14 64   19    14     6
Desert Inn     5   0   14    16   6          9    6 59   14     9     4
Hend Cust      7  14    0     2  14         22   22 71   23    20    13
Hend SVC       5  16    2     0  12         12   20 69   21    18    11
Indust Rd     13   6   14    12   0         10    4 54    9     6     7
Laughlin                                 0      107
NLV           13   9    5    20  10          0   10 51    6    11     9
Pearson       14   6   22    29   4    107  10    0 58   13     3    12
RG Plant      64  59   71    69  54         51   58  0   45    56    58
Ryan SVC      19  14   23    21   9          6   13 45    0    17    13
SV SVC        14   9   20    18   6         11    3 58   17     0    13
Sunrise        6   4   13    11   7          9   12 58   13    13     0

6.14       REQUIRED NOTICE: The Company will provide two (2) days' notice when
           an employee is assigned to work in an office other than the
           employee's base reporting point. If the Company does not provide two
           (2) days notice, the employee shall be paid one (1) hour at time and
           one-half (1 1/2) for each day until the two (2) day notice period has
           been satisfied.

                                   Page #18
<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.

                                   Page #19
<PAGE>

           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

                . 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.

           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        JOB DESCRIPTIONS: When advances in technology or other changes that
           materially affect job duties and responsibilities, IBEW and NPC will
           agree to revise job descriptions as needed.

7.6        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.

                                   Page #20
<PAGE>

7.7        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 Fleet Utility Technician being paid $16.00 per hour,
             enters an apprentice program which has four (4) annual
             step rates of $14.50, $15.50, $16.50, and $17.50. The
             Fleet Utility Technician will receive the rate of $16.50
             and remain at that step for three (3) years before
             advancing to the next step.

           For purposes of this Article, "sub-departments" are the Customer
           Service/Energy Services, Major Customer Services (LGS Billing), Field
           Service, Meter Shop, Districts, Material/Warehousing, Reprographic
           Services and Mail Room/Receiving Departments.

7.8        TIME IN CLASSIFICATION PAY: When employees are awarded bids in a
           different sub-department from which they are working, their rate of
           pay for the awarded job shall be the rate established for the
           classification as listed in the appropriate agreement. If an employee
           has previously occupied the position, the employee shall be given
           credit for time spent in that position for the purposes of
           establishing the new rate. Where the awarded job has more than one
           rate, such rates being based on time spent in classification,
           employees shall be assigned the starting rate for the new
           classification unless such rate will result in a lesser rate than
           their former classification. If assigning the starting rate to
           employees awarded the job would result in a lesser rate than their
           last rate, employees shall be granted one year of credit or the
           amount of their Company seniority, which ever is less, as time spent
           in the new classification for the purpose of establishing their new
           rate of pay.

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

                                   Page #21
<PAGE>

7.10       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.

                                 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.

                                   Page #22
<PAGE>

           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.

           STEP THREE (MUTUAL GAINS HEARING): The level II supervisor shall
           --------------------------------
           schedule a hearing with the grievant, steward, supervisor, and
           official Union and Employee Relation 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 Relation 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
           --------------------------------
           Director of Employee Relations & Diversity 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 Employee Relations & Diversity
           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.
<PAGE>

           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.

                                   Page #24
<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.

                                   Page #25
<PAGE>

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.

                                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.

                                   Page #26
<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 work days.

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.

                                   Page #27
<PAGE>

           The following are to be considered holidays:

                           --------------------------------------------------
                                          COMPANY holidays
                           --------------------------------------------------

                           --------------------------------------------------
                             1998         1999         2000         2001
                           --------------------------------------------------
-----------------------------------------------------------------------------
New Year's Day              Jan 1        Jan 1     Dec 31, 1999    Jan 1
-----------------------------------------------------------------------------
Martin Luther King's Day    Jan 19       Jan 18       Jan 17       Jan 15
-----------------------------------------------------------------------------
President's Day             Feb 16       Feb 15       Feb 21       Feb 19
-----------------------------------------------------------------------------
Memorial Day (observed)     May 25       May 31       May 29       May 28
-----------------------------------------------------------------------------
Independence Day            July 3       July 5       July 4       July 4
-----------------------------------------------------------------------------
Labor Day                   Sept 7       Sept 6       Sept 4       Sept 3
-----------------------------------------------------------------------------
Veteran's Day               Nov 11       Nov 11       Nov 10       Nov 12
-----------------------------------------------------------------------------
Thanksgiving Day            Nov 26       Nov 25       Nov 23       Nov 22
-----------------------------------------------------------------------------
Thanksgiving Friday         Nov 27       Nov 26       Nov 24       Nov 23
-----------------------------------------------------------------------------
Christmas Eve Day           Dec 24       Dec 24       Dec22        Dec 24
-----------------------------------------------------------------------------
Christmas Day               Dec 25       Dec 27       Dec 25       Dec 25
-----------------------------------------------------------------------------
Floating Birthday/Holiday                 See Article 11.4
-----------------------------------------------------------------------------

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.

                                   Page #28
<PAGE>

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       PART-TIME, TEMPORARY AND BENEFIT INELIGIBLE EMPLOYEES: Part-time,
           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.

                                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.

                                   Page #29
<PAGE>

           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

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.

                                   Page #30
<PAGE>

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.

                                   Page #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).

                                   Page #32
<PAGE>

                . 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.

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).

                                   Page #33
<PAGE>

                                ARTICLE NO. 14
                            Employee Benefit Plans
                                   Tier One
                Employees Hired On or Before November 18, 1998

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.

                                   Page #34
<PAGE>

           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.

           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.

                                   Page #35
<PAGE>

<TABLE>
<CAPTION>

                                --------------------------------------------------------------
                                                     MONTHLY CONTRIBUTIONS
                                --------------------------------------------------------------
                                    1/01/98 thru 1/01/99            1/1/99 thru 1/1/2000
                                    HMO            NPC Plan        HMO            NPC Plan
                                (Option C)       (Option A/B)   (Option C)      (Option A/B)
------------------------------------------------------------------------------------------------
<S>                             <C>              <C>            <C>             <C>
         Employee Only             18.50             28.00        20.00             31.00
--------------------------------------------------------------  --------------------------------

       Employee & Spouse           37.00             59.00        41.00             65.00
--------------------------------------------------------------  --------------------------------

      Employee & Children          34.00             50.50        37.50             55.50
--------------------------------------------------------------  --------------------------------

  Employee, Spouse & Children      57.00             81.50        63.00             89.50
--------------------------------------------------------------  --------------------------------

 Deductible/Co-Insurance Limit     None            400/5500        None           400/5500
--------------------------------------------------------------  --------------------------------
</TABLE>

<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.

                                   Page #36
<PAGE>

           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.

           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 lifetime maximum.

           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.

                                   Page #37
<PAGE>

          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.

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 Employers Insurance Company Of Nevada, and
                  shall terminate with the date of the last day of disability
                  recognized by the Employers Insurance Company of Nevada, as
                  evidenced by the remittance portion of the disability check
                  from the Employers Insurance Company Of Nevada, 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.

                                   Page #38
<PAGE>

                                             MAXIMUM         PERCENT OF
                            LENGTH          PERIOD OF          BASE
                          OF SERVICE        BENEFITS          EARNINGS
                          ----------        --------          --------
                          6 months          13 weeks             55
                          5 years           26 weeks             60
                          10 years          52 weeks             65
                          20 years          60 weeks             70
                                            65 weeks             75

                . For a job incurred disability of less than five (5) days which
                  does not qualify for Employers Insurance Company of Nevada
                  compensation, employees must use any accrued sick leave, and
                  upon exhaustion of such accrued sick leave shall receive
                  disability benefits as defined above. Any medical absence of
                  five (5) calendar days or more related to a work related
                  injury or illness will only be paid by the Workers
                  Compensation Plan; not with accrued sick leave.

                . 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 the Director of Employee
           Relations, or their designated 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.

           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.

                                   Page #39
<PAGE>

           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 Employers Insurance Company of
           Nevada. 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:

                                   Page #40
<PAGE>

          . 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.

                                         MAXIMUM             PERCENT OF
                  LENGTH                 PERIOD OF              BASE
                OF SERVICE               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.

                                   Page #41
<PAGE>

          . 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 Nevada Power Company Retirement Plan, a defined
      benefit pension plan bearing No. 003, including the amendments dated March
      5, 1980, 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 selection of a surviving spouse benefit will revert to
      a single life annuity if the spouse predeceases the retired employee.

      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.

                                   Page #42
<PAGE>

      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 1.365% 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, 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 they 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.
         ----------------------------------------------------------------

14.6  401(K) CONTRIBUTION/COMPANY MATCH: In accordance with 401(k)
      documentation, effective January 1, 1999, 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.

                                   Page #43
<PAGE>

      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.

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.

                            Employee Benefit Plans
                                   Tier Two
                 Employees Hired On or After November 19, 1998

14.9  GENERAL: The Nevada Power Company Medical Benefit Plans 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 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 twelve dollars ($12.00) per trade
      name prescription or six dollars ($6.00) for generic prescription will be
      charged by the druggist. No claim forms need to be presented.

                                   Page #44
<PAGE>

      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 twenty-four (24) months, lenses every twenty-
      four (24) months if needed, frames every twenty-four (24) 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.

      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.

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

      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 lifetime
      maximum.

                                   Page #45
<PAGE>

      EMPLOYEE CONTRIBUTIONS: Employee contributions are defined below. These
      ----------------------
      rates are the maximum rates which employees would be required to pay. They
      reflect an eighty-five/fifteen (85/15) cost sharing arrangement between
      the Company and its employees.

      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.

      GENERAL BENEFIT PROVISIONS:
      --------------------------
          .  The lifetime maximum medical benefit is no less than $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.

          .  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.

      Mid Level and HMO OPTIONS:
      -------------------------
      The Company will continue to permit employees to select between health
      care plan options offered in Tier One except for the NPC Self-Funded Plan:

      Mid Level Plan Option:

      This option will provide an employer premium that is between the highest
      level plan and the HMO offered option.

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

      HMO Option:

      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.

                                   Page #46
<PAGE>

14.10 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 Workers Compensation Insurance Plan and shall terminate with the
            date of the last day of disability recognized by the Workers
            Compensation Insurance Plan, as evidenced by the remittance portion
            of the disability check from the Workers Compensation Insurance
            Plan, 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 OF             BASE
                  OF SERVICE          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 Workers Compensation Insurance Plan compensation,
            employees must use any accrued sick leave, and upon exhaustion of
            such accrued sick leave shall receive disability benefits as defined
            above. Any medical absence of five (5) calendar days or more related
            to a work related injury or illness will only be paid by the Workers
            Compensation Plan; not with accrued sick leave.

          . 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.

                                   Page #47
<PAGE>

14.11 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 the Director of Employee Relations,
      or their designated 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.

      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.

                                   Page #48
<PAGE>

      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.

14.12 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.

                                    MAXIMUM         PERCENT OF
                   LENGTH          PERIOD OF           BASE
                 OF SERVICE        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

                                   Page #49
<PAGE>

            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.

14.13 RETIREMENT BENEFIT: The Nevada Power Company Retirement Plan, a defined
      benefit pension plan bearing No. 003, including the amendments dated March
      5, 1980, 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 selection of a surviving spouse benefit will revert to
      a single life annuity if the spouse predeceases the retired employee.

      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

                                   Page #50
<PAGE>

     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 1.365% 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, 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:
          4. They would still officially leave the company on June
             5/th/.
          5. When the pension is calculated, it would be increased to
             read that they received income until August 14, 1998
             (400 hours divided by 8 hours a day equals 50 days).
          6. The employee would receive a pension calculated through
             August 14, 1998.
          -----------------------------------------------------------

14.14  401(K) CONTRIBUTION/COMPANY MATCH: In accordance with 401(k)
       documentation, effective January 1, 1999, 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

                                   Page #51
<PAGE>

       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.

14.15  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.

14.16  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.

                                   Page #52
<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.

                                   Page #53
<PAGE>

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.

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.

                                   Page #54
<PAGE>

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.

                                   Page #55
<PAGE>

                                ARTICLE NO. 16
                              General Provisions

16.1   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.

16.2   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.

16.3   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 resources.

16.4   FACILITIES: The Company will provide on its premises clean, sanitary and
       reasonably comfortable rest and wash rooms, including first aid cots for
       female employees, together with a proper place for storing lunches
       carried by employees, and reasonably safeguarding employee's out-of-door
       clothing and necessary personal effects on the Company's property during
       the time employees are on duty. The Union agrees to cooperate with the
       Company in the maintenance of these facilities.

16.5   HEALTH AND SAFETY: The parties hereto agree to cooperate in using all
       reasonable means to eliminate conditions of danger to either the general
       public, the Company or its employees. No employee shall knowingly engage
       in an unsafe act.

                                   Page #56
<PAGE>

       Whenever it becomes necessary to employ day shift employees assigned to
       the Company's business offices, where security personnel are assigned,
       outside the normal work hours, and such work is during the hours of
       darkness, all arrivals and departures from Company owned parking
       facilities shall be observed and controlled by security personnel.
       Parking facilities shall, when possible, be adjacent to the Company's
       business offices.

       The Company agrees to furnish such safety devices and equipment including
       first aid kits, as may be reasonable and necessary for the health and
       safety of its employees, and the Union agrees, on behalf of the
       employees, that such equipment will be used.

16.6   LABOR/MANAGEMENT MEETINGS: The parties agree to hold periodic meetings to
       discuss matters which are covered by the Agreement. These meetings will
       be held on Company premises during work time and shall, where possible,
       be scheduled mutually each sixty (60) days. The number of employee
       attendees who are covered by the agreement shall be limited to the
       stewards and other employees reporting to the Company premises designated
       as the site of a particular meeting.

16.7   UPGRADE: When an employee relieves an employee of a higher
       classification, 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.

       All red circle employees when upgraded to Lead positions will receive a
       5% wage increase for any time worked in this position.

       All employees when upgraded for an authorized training capacity will
       receive a 5% wage increase for any time worked in this position.

                                   Page #57
<PAGE>

                                ARTICLE NO. 17
                               Term of Agreement

17.1   DURATION: This Agreement shall take effect on February 1, 1998, and shall
       continue in effect for the term February 1, 1998 to 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.

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.

                                   Page #58
<PAGE>

In witness whereof, the parties hereto have executed this Agreement on Date
February 1, 1999.

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

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

________________________________________________________________________________
Gloria Banks Weddle
Vice President, Corporate Services
Nevada Power Company

                             NEGOTIATING COMMITTEE
                             ---------------------

                IBEW, Local No. 396              Nevada Power
                -------------------              ------------
                Jim Anzinger                     Gloria Banks Weddle
                Adam Morrison                    Dan Potter
                Jeff Ambuehl                     Gerald Mikesell
                Madeline Anzinger                Vanessa Farias
                John Caruso                      Trudy Haszlauer
                Helen Jenkins                    Flory Marzan
                Juan Samayoa                     Jose Villa

                                   Page #59
<PAGE>

                                   EXHIBIT I
                          CLASSIFICATION DESCRIPTIONS
                                (Alphabetical)

ALTERNATE FIELD REPRESENTATIVE
Performs various assignments relating to Customer Field and Metering activities,
including the duties of LGS Meter Reader, Field Service Representative and Meter
Reader. May be required to perform semi-skilled work in the Meter Shop and other
duties as assigned.

CUSTOMER SERVICE SPECIALIST
Performs very sophisticated clerical tasks which require extensive
decision-making authority and independent judgment. Employees in this
classification work in the following areas:

     . Head Cashier
     . Service Dispatching
     . LGS Billing
     . Control Analyst

CUSTOMER SUPPORT REPRESENTATIVE
Performs intermediate clerical tasks which require the use of typing and
personal computer skills. Customer Contact and service skills will be used
regularly, requiring a moderate degree of decision-making authority. Employees
in this classification work in the following areas:

     . Commercial Office Support
     . PBX
     . Customer Credit and Accounting

FIELD SERVICE INVESTIGATOR
Performs specialized assignments relating to current diversion and meter
tampering. Will perform technical investigations with established procedures on
Company equipment; does not include instrument metering. Will be required to
work closely with low voltage electricity, while investigating, with various
testing equipment. Will be familiar with associated office equipment, and work
with and have knowledge of other department's functions, relating to detection
and billing. Will drive a Company vehicle and be assigned to the Department of
Meter Validity.

FIELD SERVICE REPRESENTATIVE
Performs a variety of assignments related to the metering function on an
individual basis as requested by the commercial department and customer service
orders including, but not limited to, turn-ons and turn-offs, check readings,
miscellaneous testing of electrical equipment, both customer and Company; drives
Company vehicle, acts as field representative in limited capacity and does other
related work as required.

                                   Page #60
<PAGE>

LEAD
In the absence of appropriate supervision or 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 customer or field service capacity, and perform other work as
needed.

MAIL ROOM TECHNICIAN
Performs a variety of mail room functions related to overall mail processes and
procedures. Pick up, sort and distribute all facets of Company mailings.
Coordinate postal pick-ups, deliveries and courier services. Operate mail
processing equipment. Responsible for receiving, processing and distributing
materials for the Pearson Building. Reconcile mainframe billing with bills
processed. Responsible for loading and programming mail machines to process
billings; apply necessary postage, monitor and recommend stock levels of machine
supplies. May be required to relieve Office Supplies Specialist and drive light
vehicles. Performs other duties as assigned.

METER READER

Reads meters in Company service areas and records readings and miscellaneous
information on proper forms. Indicates abnormal or unusual conditions relative
to meters and facilities. Prepares reports and performs related duties as
required. May be required to operate vehicle for Company. The ratio for
part-time Meter Readers will be five (5) full-time employees for every one (1)
part-time employee.

Meter Readers have the opportunity to be promoted to Alternate Field
Representative positions with no bid process, provided prerequisites are met as
follows: 1) One year of experience as a Meter Reader, 2) Basic Electricity
Class, 3) Hand Tools Class, 4) Basic Math, and 5) satisfactory personnel record,
no disciplinary action or at-fault safety/vehicle accidents in the past twelve
(12) months in the Human Resources file. Selections for those who satisfy these
prerequisites will be made by Company seniority.

OFFICE SUPPLY SPECIALIST
Performs a variety of duties related to ordering, receiving, storing and issuing
office supplies and materials and maintaining related inventories. Receives and
distributes bulk items and materials delivered to the administrative offices.
Maintains related files and performs other duties as assigned.

OFFICE SUPPORT REPRESENTATIVE
Performs elementary and repetitive clerical tasks, defined by minimal training
requirements on applicable business machines and a lack of, or a minimal amount
of office equipment and business software application utilization. Employees in
this classification work in the following areas:

     . Payment Processing
     . Customer Credit and Accounting
     . Customer Information Center

                                   Page #61
<PAGE>

REPROGRAPHIC TECHNICIAN
Will be responsible for the production of in-plant printed and copied material.
Operates all printing plant equipment, including: lithograph machines, camera,
lithograph plate makers, binding machines, type composing machines, photographic
developing equipment, offset 2 color presses, offset 1 color presses, collators,
plate developer, power cutter, electric hole puncher, electric stitcher, PMT
developer, dark room dryer, jogging machine, padding machine, light table for
stripping, computerized copying equipment, laminators and folding equipment. Is
responsible for maintaining machines in clean and operating condition and will
make some maintenance adjustments to the equipment. Will maintain control over
printing plant and copying supplies and will perform all related duties as
required.

RETAIL CUSTOMER REPRESENTATIVE
Performs fairly sophisticated clerical 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.
Employees in this classification work in the following areas:

     . Customer and Field Operations
     . Customer Information Center
     . Districts
     . Material Management
     . Customer Credit and Accounting (Edit, Carry File, Collections functions)

RETAIL OPERATIONS REPRESENTIVE
Responsible for support of customer product/service development. Coordinates and
schedules internal/external contractors, suppliers and customers. Extensive
marketing functions including but not limited to: contacting customers,
contractors, financial institutions, credit reports, suppliers and sales.
Performs sophisticated functions defined by regular application of office
equipment, business software systems and financial reconciliations. Prepares
reports and performs other duties as required.

TRAINING ASSISTANT
Assists management and the Customer Service Training Department by identifying
training needs, participating in job/task analyses, providing small group and/or
one-on-one and just-in-time training support, and actively participating in
planning the Training Assistant In-Service Program. Responsible for performing
regular Customer Service functions and working with training staff on training
goals and self-development in training capacity. This position will support the
Customer Service Department including, but not limited to: Telephone Service
Operations, Meter Reading, and the commercial offices. May be required to work
various shifts and at various locations.

                                   Page #62
<PAGE>

                                  EXHIBIT II
                       SCHEDULE OF WAGE RATES/ TIER ONE
                Employees Hired On or Before November 18, 1998

                                    EFFECTIVE EFFECTIVE EFFECTIVE   EFFECTIVE
CLASSIFICATIONS:                     2/2/98    2/1/99   1/31/2000   1/29/2001
                                     ------    ------   ---------   ---------

CUSTOMER SERVICE

Customer Service Specialist           16.54     17.04       17.55       18.08

Lead Retail Customer Representative

                                      16.34     16.83       17.33       17.85
Red Circle                            16.93     17.44       17.96       18.50

Training Assistant - TSO              16.93     17.44       17.96       18.50

Retail Customer Representative

     First six months                 13.61     14.02       14.44       14.87
     Next six months                  14.10     14.52       14.96       15.41
     Next six months                  14.59     15.03       15.48       15.94
     Next six months                  15.07     15.52       15.99       16.47
     Thereafter                       15.56     16.03       16.51       17.01
     Red Circle                       16.07     16.55       17.05       17.56

Retail Operations Representative

     First six months                 13.61     14.02       14.44       14.87
     Next six months                  14.10     14.52       14.96       15.41
     Next six months                  14.59     15.03       15.48       15.94
     Next six months                  15.07     15.52       15.99       16.47
     Thereafter                       15.56     16.03       16.51       17.01
     Red Circle                       16.07     16.55       17.05       17.56

                                   Page #63
<PAGE>

                                    EFFECTIVE EFFECTIVE EFFECTIVE   EFFECTIVE
CLASSIFICATIONS:                     2/2/98    2/1/99   1/31/2000   1/29/2001
                                     ------    ------   ---------   ---------

Lead Customer Support Representative

                                      15.56     16.03       16.51       17.01
     Red Circle                       16.93     17.44       17.96       18.50

Customer Support Representative

     First six months                 11.18     11.52       11.87       12.23
     Next six months                  11.89     12.25       12.62       13.00
     Next six months                  12.60     12.98       13.37       13.77
     Next six months                  13.31     13.71       14.12       14.54
     Next six months                  14.03     14.45       14.88       15.33
     Thereafter                       14.76     15.20       15.66       16.13
     Red Circle                       16.07     16.55       17.05       17.56

Office Support Representative

     First six months                  9.44      9.73       10.02       10.32
     Next six months                  10.23     10.54       10.86       11.19
     Next six months                  11.02     11.35       11.69       12.04
     Next six months                  11.81     12.16       12.52       12.90
     Thereafter                       12.60     12.98       13.37       13.77
     Red Circle                       13.72     14.13       14.55       14.99
     Red Circle                       14.76     15.20       15.66       16.13
     Red Circle                       16.07     16.55       17.05       17.56

                                   Page #64
<PAGE>

                                    EFFECTIVE EFFECTIVE EFFECTIVE   EFFECTIVE
CLASSIFICATIONS:                     2/2/98    2/1/99   1/31/2000   1/29/2001
                                     ------    ------    --------   ---------

METER READING

Lead Meter Reader                     17.20     17.72       18.25       18.80

Meter Reader

     First three months               11.63     11.98       12.34       12.71
     Next three months                11.76     12.11       12.47       12.84
     Next six months                  11.96     12.32       12.69       13.07
     Next six months                  12.37     12.74       13.12       13.51
     Next six months                  12.78     13.16       13.55       13.96
     Next six months                  13.24     13.64       14.05       14.47
     Next six months                  13.67     14.08       14.50       14.94
     Next six months                  14.18     14.61       15.05       15.50
     Thereafter                       14.76     15.20       15.66       16.13
     Red Circle                       16.30     16.79       17.29       17.81
     Red Circle                       17.41     17.93       18.47       19.02
     Red Circle                       17.80     18.33       18.88       19.45

Training Assistant - Meter Reading

                                      17.20     17.72       18.25       18.80

                                   Page #65
<PAGE>

                                    EFFECTIVE EFFECTIVE EFFECTIVE   EFFECTIVE
CLASSIFICATIONS:                     2/2/98    2/1/99   1/31/2000   1/29/2001
                                     ------    ------   ---------   ---------

FIELD SERVICE

Lead Field Service Investigator

                                      20.66     21.28       21.92       22.58
     Red Circle                       21.54     22.19       22.86       23.55

Field Service Investigator

     First six months                 16.71     17.21       17.73       18.26
     Next six months                  17.44     17.96       18.50       19.06
     Next six months                  18.11     18.65       19.21       19.79
     Thereafter                       18.78     19.34       19.92       20.52
     Red Circle                       20.44     21.05       21.68       22.33

Lead Field Service Representative

                                      20.36     20.97       21.60       22.25
     Red Circle                       21.26     21.90       22.56       23.24

Field Service Representative

     First six months                 16.43     16.92       17.43       17.95
     Next six months                  17.16     17.67       18.20       18.75
     Next six months                  17.83     18.36       18.91       19.48
     Thereafter                       18.50     19.06       19.63       20.22
     Red Circle                       20.16     20.76       21.38       22.02
     Red Circle                       20.36     20.97       21.60       22.25
     Red Circle                       21.13     21.76       22.41       23.08

Alternate Field Representative

                                      16.12     16.60       17.10       17.61

                                   Page #66
<PAGE>

                                    EFFECTIVE EFFECTIVE EFFECTIVE   EFFECTIVE
CLASSIFICATIONS:                     2/2/98    2/1/99   1/31/2000   1/29/2001
                                     ------    ------   ---------   ---------

REPROGRAPHIC SERVICES

Reprographic Technician

     First six months                 13.61     14.02       14.44       14.87
     Next six months                  14.10     14.52       14.96       15.41
     Next six months                  14.59     15.03       15.48       15.94
     Next six months                  15.07     15.52       15.99       16.47
     Thereafter                       15.56     16.03       16.51       17.01
     Red Circle                       16.07     16.55       17.05       17.56
     Red Circle                       17.80     18.33       18.88       19.45
     Red Circle                       19.09     19.66       20.25       20.86

MAIL ROOM & RECEIVING

Office Supply Specialist

     First six months                 13.61     14.02       14.44       14.87
     Next six months                  14.10     14.52       14.96       15.41
     Next six months                  14.59     15.03       15.48       15.94
     Next six months                  15.07     15.52       15.99       16.47
     Thereafter                       15.56     16.03       16.51       17.01
     Red Circle                       16.07     16.55       17.05       17.56
     Red Circle                       21.73     22.06       22.39       22.73

Mail Room Technician

     First six months                 11.18     11.52       11.87       12.23
     Next six months                  11.89     12.25       12.62       13.00
     Next six months                  12.60     12.98       13.37       13.77
     Next six months                  13.31     13.71       14.12       14.54
     Next six months                  14.03     14.45       14.88       15.33
     Thereafter                       14.76     15.20       15.66       16.13
     Red Circle                       16.07     16.55       17.05       17.56

                                   Page #67
<PAGE>

                                 EXHIBIT II-A
                       SCHEDULE OF WAGE RATES - TIER TWO
                 Employees Hired On or After November 19, 1998

                                    EFFECTIVE EFFECTIVE EFFECTIVE  EFFECTIVE
CLASSIFICATIONS:                     2/2/98    2/1/99   1/31/2000  1/29/2001
                                     ------    ------   ---------  ---------

CUSTOMER SERVICE

Customer Service Specialist           13.99     14.41       14.84      15.29

Retail Customer Representative
Office Supply Specialist
Reprograhic Technician

   First six months                    9.75     10.04       10.34      10.65
   Next six months                    10.61     10.93       11.26      11.60
   Next six months                    11.47     11.81       12.16      12.52
   Next six months                    12.33     12.70       13.08      13.47
   Thereafter                         13.19     13.59       14.00      14.42

Customer Support Representative
Mail Room Technician

   First six months                    8.06      8.30        8.55       8.81
   Next six months                     8.80      9.06        9.33       9.61
   Next six months                     9.57      9.86       10.16      10.46
   Next six months                    10.36     10.67       10.99      11.32
   Next six months                    11.33     11.67       12.02      12.38
   Thereafter                         12.48     12.85       13.24      13.64

                                   Page #68
<PAGE>

                                    EFFECTIVE EFFECTIVE EFFECTIVE  EFFECTIVE
CLASSIFICATIONS:                     2/2/98    2/1/99   1/31/2000  1/29/2001
                                     ------    ------   ---------  ---------

CUSTOMER SERVICE

Meter Readers

   First three months                 10.50     10.82       11.14      11.47
   Next three months                  10.88     11.21       11.55      11.90
   Next six months                    11.26     11.60       11.95      12.31
   Next six months                    11.64     11.99       12.35      12.72
   Next six months                    12.02     12.38       12.75      13.13
   Next six months                    12.40     12.77       13.15      13.54
   Next six months                    12.78     13.16       13.55      13.96
   Next six months                    13.16     13.55       13.96      14.38
   Thereafter                         13.50     13.91       14.33      14.76

FIELD SERVICE

Alternate Field Representatives

   First six months                   14.37     14.80       15.24      15.70
   Next six months                    15.25     15.71       16.18      16.67
   Thereafter                         16.12     16.60       17.10      17.61

                                   Page #69
<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 ______________________________________________________________________

                                   Page #70
<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 an 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.

                                   Page #71
<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 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.

                                   Page #72
<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.

                                   Page #73
<PAGE>

              Letters of Agreement Continuing to Remain in Effect

The following Letters of Agreement shall remain in force and be included in the
Clerical Collective Bargaining Agreement which is effective February 1, 1998 and
will continue to remain in effective through February 1, 2002.

     .    Letter of Agreement 14.4 (1988) -- Regarding Retirement
          Plans (Brimer/Gilliam)

     .    Letter of Agreement (1994) -- Discipline Relative to
          Tardiness and Attendance (Anzinger/Weddle)

     .    Letter of Agreement (1994) - Injuries Relative to Dog Bites
          (Anzinger/Weddle)

     .    Letter of Agreement (1994) - Vacation/Sick Leave Bonus
          (Anzinger/Weddle)

     .    Letter of Agreement (1994) - Organization Study (Anzinger/Weddle)

     .    Letter of Agreement (1994) - Labor/Management Meetings
          (Anzinger/Weddle)

     .    Letter of Agreement (1994) - Work/Family Issues  (Anzinger/Weddle)

     .    Memorandum of Settlement (1995) - Part - Time Employees
          (Anzinger/Horvath)

     .    Letter of Understanding (1995) - Flex Scheduling (Anzinger/Potter)

     .    Letter of Agreement (1996) - Show of Interest (Anzinger/Potter)

Copies of these letters are provided on the next twelve pages, page #75 through
#86.

                                   Page #74
<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 Thrift
EMPLOYEE      Plan actively employed on January 1, 1988, may elect to receive
--------
CONTRIBUTION  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.

                                   Page #75
<PAGE>

OPTION II:    At the time of termination or retirement, Participants  in the
EMPLOYEE      Nevada Power Company  Retirement and Thrift Plan actively employed
--------
CONTRIBUTION  on January 1, 1988, may 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 Nevada
EMPLOYER      Power Company Retirement  and Thrift Planer actively employed on
--------
CONTRIBUTION  January 1, 1988, may elect to withdraw the employer 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 Plan
EMPLOYER      actively employed elect to leave the employer's contribution in
--------
CONTRIBUTION  the Plan, along ted at 5% per annum from January 1, 1976, until
              the date. 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

ACCEPTED:

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

                                   Page #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:
-----------------------

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

                                   Page #77
<PAGE>

January 6, 1994

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

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

INJURIES RELATIVE TO DOG BITE

Dear Mr. Anzinger:

During the negotiations of the Clerical agreement, which expires in May 1994,
the Company and Union discussed meter reading injuries relative to dog bites.
The Company and Union agreed to communicate and reinforce, with representative
from the CIC and Commercial Offices, the importance of their initial contact
with the customer in annotating relevant information regarding animals. The
Company will endeavor to locate and provide a list of local attorneys who might
be interested in representing employees negatively impacted by dog bites.

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

                                   Page #78
<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

                                   Page #79
<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 Clerical agreement, which expires in May of 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

                                   Page #80
<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

                                   Page #81
<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

                                   Page #82
<PAGE>

---------------------------------
    MEMORANDUM OF SETTLEMENT
           between
        IBEW LOCAL 396
             and
     NEVADA POWER COMPANY
----------------------------------

     Nevada Power Company, hereinafter referred to as the employer, and the
International Brotherhood of Electrical Workers, Local 396, hereinafter referred
to as the Union, are parties to a collective bargaining agreement which
establishes wages and working conditions for certain covered employees. This
agreement is described as the Clerical and Plant agreements and contains
procedures for the meaning and interpretation of the agreement.

The following language covers Clerical, part-time employees:

 .    At least two (2) days off shall be consecutive during the work week,
     however, the days off may not be Saturday and Sunday.

     Example:  The employee's day off may be Wednesday and Thursday.

 .    At least two (2) hours in any one day shall constitute the work day.

 .    Shift differential will apply as usual.

 .    Bilingual pay will apply at $15.00 per pay period.

 .    Call outs - full-time employees will be called out first.

     During emergency situations, full-time employees may not be called-out
     first in the interest of coverage.

 .    At least twenty-four (24) hour notice will be given for change in work
     schedule.

 .    All language relative to meals in Article 6.12 would apply after completing
     eight (8) hours of continuous work.

 .    For the purpose of processing step increases, 1040 hours worked will be
     considered equivalent to "six months," as stated in Exhibit II, Schedule of
     Wage Rates.

IN WITNESS HEREOF, the parties hereto executed this agreement on the 20/th/ day
of June, 1995.

/s/ Fred Horvath                            /s/ James Anzinger
NEVADA POWER COMPANY                        IBEW LOCAL 396

                                   Page #83
<PAGE>

September 28, 1995

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

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

FLEX SCHEDULING

Dear Mr. Anzinger:

This is to confirm our agreement made relative to flex scheduling and
establishing a program which is available to all departments in the Company
(Plant & Clerical Agreements).

With prior approval of immediate supervision, regular employees will be allowed
flexibility in the starting and quitting times of their regularly scheduled
eight (8) hour shifts. The purpose of the program is to enable employees to
attend to family, medical, community and other needs which may occasionally
arise by reporting to work later than scheduled or leaving work earlier than
scheduled, and to make up the scheduled time not worked.

The program will be administered subject to service requirements of the Company
and the following conditions:

1.   An employee who works less than a regular scheduled shift will be paid only
     for the time actually worked on that shift.

2.   Make-up hours must be worked within the work week in which a flex schedule
     is granted. Also, make-up hours shall not be denied once the flex time has
     been taken off.

3.   Corresponding make-up hours shall be reflected as such in the employee's
     time card.

4.   No more than twenty (20) flex hours will be allowed in any thirty (30) day
     period.

5.   Make-up hours available but not worked within the work week will be treated
     as an unpaid absence and shall be subject to the attendance policy.

6.   Employees may use vacation time as make-up time with supervisory approval.

7.   Make-up hours will be paid at straight time regardless of the shift or day
     on which they are worked.

No grievance will be filed asserting that the program violates any provision of
the Labor Agreement which may conflict or be inconsistent with the program.

                                   Page #84
<PAGE>

This agreement will remain in effect from September 28, 1995 through February 2,
1998, unless canceled in writing by either the Company or the Union with two (2)
week's notice.

Very truly yours,

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

ACCEPTED:

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

                                   Page #85
<PAGE>

November 25, 1996

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

Dear Mr. Anzinger:

This letter will document an agreement between the International Brotherhood of
Electrical Workers (IBEW), Local #396, and Nevada Power Company regarding
assignments within Telephone Service Operations (TSO).

As job functions within TSO become available, TSO employees will be asked to
indicate interest for those functions through a "show of interest" process.
Information regarding the available function will be published, including:
function, shift, description of major duties, skills and knowledge, deadline and
means for responding to the show of interest. All TSO employees who indicate an
interest will be considered for assignment based on skills, knowledge and
Company seniority. When knowledge and skills are substantially equivalent,
Company seniority shall govern.

This process for assigning functions within the TSO will remain in effect until
such time that either party gives written notice to the other party of its
desire to discontinue this process. This process will then be discontinued and
all vacancies that arise subsequently will be filled in accordance with the
applicable job posting system in effect at that time.

Very truly yours,

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

AGREED:

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

                                   Page #86
<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 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, 7.1 and Exhibit V,
all dealing with Seniority, are impacted.

The Company and the Union agree to meet to determine a tie breaker.

Very truly yours,

Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

James Anzinger

Business Manager and Financial Secretary
IBEW Local #396

                                   Page #87
<PAGE>

November 4, 1998

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

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

Alternate Field Representative, Field Service Representative, Field Service
Investigator

Dear Mr. Anzinger:

This letter will document the agreement between Nevada Power Company (NPC) and
the International Brotherhood of Electrical Workers (IBEW) Local #396 regarding
Alternate Field Representatives (AFR), Field Service Representatives (FSR), and
Field Service Investigators (FSI).

NPC and IBEW agree that AFRs will replace FSRs through attrition. Selections
will be made in accordance with Article 7, Seniority and Promotions, of the
current Clerical Collective Bargaining Agreement (CCBA).

In addition, if a FSR accepts an apprenticeship, their FSR rate of pay will be
frozen until the step wage increase in the new classification reaches their
current rate of pay. Also, CCBA increases will be paid in lump sum.

Finally, future FSI positions will be filled exclusively from the FSR
classification. Once, FSR positions are exhausted or no candidates are available
then AFRs will fill the vacant positions. Selections will be made in accordance
with Article 7, Seniority and Promotions, of the current CCBA.

Very truly yours,

Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                   Page #88
<PAGE>

November 4, 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.

                  Donald Duszynski
                  Gwendolyn Mabry

Very truly yours,

Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                   Page #89
<PAGE>

November 9, 1998

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

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

Incentive Programs

This letter will document the agreement between the International Brotherhood of
Electrical Workers, Local #396, and Nevada Power Company relative to incentive
programs. NPC and IBEW will agree to discuss any and all incentive programs
which are an addition to base wages.

Very truly yours,

Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                   Page #90
<PAGE>

November 19, 1998

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway

Las Vegas, Nevada 89121

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

NO LAYOFFS

Dear Mr. Anzinger:

This letter will document the agreement between the International Brotherhood of
Electrical Workers, Local #396, and Nevada Power Company relative to layoffs for
Clerical employees.

If a full-time Clerical employee was hired on or before November 18, 1998, both
the Union and Company agree that there will be no layoffs of those employees for
the first three years of the Clerical CBA. If there is a layoff on the fourth
year of the contract, the terms and conditions are detailed in Articles 5.4
LAYOFF PROVISIONS and 5.5 SEVERANCE.

The Company may utilize clerical employees in MPAT positions to maximize
employee's skills and meet business needs. The employee would remain in the
Union and keep their seniority.

This is not to conclude that the MPAT position would be covered under the
Clerical CBA.

This agreement will remain in effect until February 1, 2001.

Very truly yours,

Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                   Page #91
<PAGE>

November 19, 1998

Mr. James Anzinger
International Brotherhood of Electrical Workers
Local Union #396
3520 Boulder Highway

Las Vegas, Nevada 89121

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

RECLASSIFICATION OF RETAIL OPERATIONS REPRESENTATIVES (ROR)

Dear Mr. Anzinger:

This letter will document the agreement between the International Brotherhood of
Electrical Workers, Local #396 (IBEW), and Nevada Power Company (NPC) relative
to the Retail Operations Representative classification.

In a Letter of Understanding dated August 20, 1996, between NPC and IBEW, the
ROR classification was created. This letter confirms our agreement that the ROR
classification and associated duties have been eliminated. However, the duties
performed by these employees prior to the creation of the ROR classification
will remain under the jurisdiction of the IBEW.

All ROR's will be reclassified as Retail Customer Representatives (RCR)
effective immediately. The Company will notify ROR's in advance of the
reclassification. Following their reclassification to RCR, NPC may transfer them
to the Telephone Service Operations by inverse seniority. The employees affected
will maintain their seniority and wages.

Very truly yours,

Gloria Banks Weddle
Vice President, Corporate Services

AGREED:

James Anzinger
Business Manager and Financial Secretary
IBEW Local #396

                                   Page #92
<PAGE>

                                      Index

==============================================================================
                                     401(K)
==============================================================================
401(K) - Tier One, 43
401(K) - Tier Two, 51

==============================================================================
                                        A
==============================================================================
Accidental Life Insurance - Tier One, 44
Accidental Life Insurance - Tier Two, 52

==============================================================================
                                        B
==============================================================================
Benefits - Tier One, 34
Benefits - Tier Two, 44
Bi-Lingual Representatives, 14
Break Periods, 13
Bulletin Boards, 6

==============================================================================
                                        C
==============================================================================
Call-Outs, 15
Check Off Authorization, 70
Classification Descriptions, 60
Continuity of Service, 3
Contracting Work, 6

==============================================================================
                                        D
==============================================================================
Dental Benefit - Tier One, 35
Dental Benefit - Tier Two, 45
Discipline, 5
Dues. See Union Dues

==============================================================================
                                        E
==============================================================================
Employee
   Part-Time, 6
   Status, 6
Employee
   Probationary, 7
   Regular, 8
   Temporary, 7

==============================================================================
                                        F
==============================================================================
Family and Medical Leave, 55
Funeral Leave, 54

==============================================================================
                                        G
==============================================================================
Grievance Procedure, 22

==============================================================================
                                        H
==============================================================================
HMO - Tier One, 37
HMO - Tier Two, 46
Holidays, 27

==============================================================================
                                        I
==============================================================================
Inclement Weather, 26

==============================================================================
                                        J
==============================================================================
Jury Duty, 54

==============================================================================
                                        L
==============================================================================
Labor/Management Meetings, 57
Layoff Provisions, 8
Leaves of Absence, 53
Light Duty, 33
Long Term Disability - Tier Two, 52
Long-Term Disability Insurance - Tier One, 44
Lunch Periods, 13

==============================================================================
                                        M
==============================================================================
Meals, 16
Mileage Chart, 18
Moving Expenses, 20
Mutual Gains Meetings, 23

==============================================================================
                                        N
==============================================================================
Non-Discrimination, 4

==============================================================================
                                        O
==============================================================================
Overtime, 13
Overtime Equalization, 14

==============================================================================
                                        P
==============================================================================
Partial Disability - Tier One, 39
Partial Disability - Tier Two, 48
Pay Provisions, 14
Preferred Provider Program - Tier One, 37

                                   Page #93
<PAGE>

==============================================================================
                                        R
==============================================================================

Rain Gear, 26
Rate of Pay, 12
Recall Rights, 9
Rest Time, 15
Retirement Benefit - Tier One, 42
Retirement Benefit - Tier Two, 50

==============================================================================
                                        S
==============================================================================

Seniority, 19
Severance, 10
Shift Differential, 16
Short Term Disability - Tier One, 40
Short Term Disability - Tier Two, 49
Sick Leave, 32
Sick Leave Agreement, 71
Sick Leave Bonus, 32
Staffing Vacancies, 19
Sub-Departments, 21

==============================================================================
                                        T
==============================================================================

Temporary Layoff Provisions, 8, 72
Term Life Insurance - Tier One, 34
Term Life Insurance - Tier Two, 45
Term of Agreement, 58
Training Exceptions, 15

==============================================================================
                                        U

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

Union Business, 6
Union Dues, 5
Union Steward Business, 6
Upgrade, 57

==============================================================================
                                        V

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

Vacation Bonus, 30
Vacations, 29
Vehicle Usage, 17
Vision Benefit - Tier One, 35
Vision Benefit - Tier Two, 45

==============================================================================
                                        W
==============================================================================

Wage Rates - Tier One, 63
Wage Rates - Tier Two, 68
Working Hours, 12
Working Safety Committee, 25

                                   Page #94

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