Document:

EE EX_10.04  2014.03.31 Amendment No.14

EXHIBIT 10.04

AMENDMENT NO. 14 TO FOUR CORNERS PROJECT OPERATING AGREEMENT
THIS AMENDMENT NO. 14 TO FOUR CORNERS PROJECT OPERATING AGREEMENT (this “Amendment”) is made and entered into as of December 30, 2013, by and among ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation (“Arizona”); EL PASO ELECTRIC COMPANY, a Texas corporation (“El Paso”); PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (“New Mexico”); SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an agricultural improvement district, organized and existing under the laws of the State of Arizona (“Salt River Project”); SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation (“Edison”); and TUCSON ELECTRIC POWER COMPANY, an Arizona corporation (“Tucson”).  Arizona, El Paso, New Mexico, Salt River Project, Edison and Tucson are herein collectively referred to as the “Parties”.
RECITALS
The Parties entered into the Four Corners Project Operating Agreement, effective as of March 1, 1967, and amendments thereto through Amendment No. 13, dated December 1, 2010 (as amended by such amendments, the “Operating Agreement”), providing, among other things, for the operation and management of the Four Corners Project.
Arizona and Edison are parties to a Purchase and Sale Agreement, dated as of November 8, 2010 (the “Purchase Agreement”), providing, among other things, for the sale by Edison to Arizona, and the purchase by Arizona from Edison, of Edison’s interests in the Four Corners Project and the Facilities Switchyard (the “Edison Interest Transfer”). 
Following the Edison Interest Transfer, Arizona, the owner of the Initial Four Corners Plant, intends to retire Units 1, 2 and 3 of the Initial Four Corners Plant.
This Amendment will take effect on the Amendment No. 14 Effective Date, as defined herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.Defined Terms.  Defined terms used but not defined in this Amendment shall have the respective meanings ascribed to such terms in the Operating Agreement.

2.Amendment of Section 1.  Section 1 is hereby amended to delete “SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation (hereinafter referred to as “Edison”);” from the eighth line thereof.

3.Amendment of Section 2.5.  Section 2.5 is hereby amended to substitute “Southern California Edison Company, a California corporation (hereinafter referred to as “Edison”)” for “Edison” in the first line thereof, and to add the following sentence immediately 

following the last sentence thereof:  “Amendment No. 14 to this Agreement provides, among other things, for updated ownership percentages as they existed following the consummation of the transfer to Arizona by Edison of Edison’s interests in the Four Corners Project pursuant to that certain Purchase and Sale Agreement, dated as of November 8, 2010 (the “Purchase Agreement”).  As of the effective date of Amendment No. 14 to this Agreement, Edison will no longer be a party to this Agreement, and all references to Edison as well as Edison’s designation as a Participant, as that term is defined in Section 5.56 herein, are limited to facts or matters occurring or agreements entered into prior to the effective date of Amendment No. 14 to this Agreement.”

4.Amendment of Section 5.23.  Section 5.23 is hereby amended to substitute “and as amended from time to time” for the clause “and as amended by Amendment No. 3 executed contemporaneously with Amendment No. 6 to this Operating Agreement.”

5.Amendment of Section 5.47.  Section 5.47 is hereby amended to add after the word “Agreement” the following: 
“, as amended from time to time.  References in the Operating Agreement to the effective date thereof or of a particular provision shall mean the effective date of the original Operating Agreement or of the particular provision when first referenced in the original Operating Agreement, as then amended.
6.Amendment of Section 5.56.  Section 5.56 is hereby amended to delete “, Edison” in the second line thereto, and to add the following clause immediately following “Project” in the third line thereof:  “, and, when referring specifically to facts or matters occurring or agreements entered into prior to the effective date of Amendment No. 14 to this Agreement, Edison”, and to add the following sentence immediately following the last sentence thereof:  “The term “Original Participants” shall refer to Arizona, El Paso, New Mexico, Salt River Project, Edison and Tucson.”

7.Amendment of Section 6.2.  Section 6.2 is hereby amended to delete “, Edison” from the first line thereof.

8.Amendment of Section 8A.3.2.  Section 8A.3.2 is hereby amended to add the following sentence at the end thereof:

“Upon the retirement of each of Units 1, 2 and 3, this Section 8A.3.2 shall be of no force and effect.”
9.Amendment of Section 8.2.3.  Section 8.2.3 is hereby amended to read in full as follows: 
    
“Establish procedures for the delivery of coal to the Minimum Coal Storage Pile if one is maintained.”
10.Deletion of Section 8.2.9.  Section 8.2.9 is hereby deleted in its entirety and Section 8.2.10 is renumbered Section 8.2.9.

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11.Amendment of Section 17.1.1.2.  Section 17.1.1.2 is hereby amended to substitute “63%” for “15%” in the first line thereof, and to delete “Edison 48%” in the second line thereof.

12.Amendment of Section 17.1.1.3.  Section 17.1.1.3 is hereby amended to substitute “75.33%” for “43.33%” in the first line thereof, and to delete “Edison 32%” in the second line thereof.

13.Amendment of Section 17.1.1.4.  Section 17.1.1.4 is hereby amended to substitute “52.23%” for “40.23%” in the first line thereof, and to delete “Edison 12%” in the second line thereof.

14.Amendment of Section 17.1.1.6.  Section 17.1.1.6 is hereby amended to substitute “57.90%” for “54.44%” in the first line thereof, and to delete “Edison 3.46%” in the second line thereof.

15.Amendment of Section 17.1.1.7.  Section 17.1.1.7 is hereby amended to substitute “63%” for “15%” in the first line thereof, and to delete “Edison 48%” in the second line thereof.

16.Amendment of Section 17.1.1.8.  Section 17.1.1.8 is hereby amended to substitute “62.45%” for “19.25%” in the first line thereof, and to delete “Edison 43.2%” in the second line thereof.

17.Amendment of Section 17.1.1.9.  Section 17.1.1.9 is hereby amended to read in full as follows:

“17.1.1.9(a)    Common Facilities and Related Facilities - for Operating Costs incurred prior to, or required to satisfy liabilities related to operation of the Common and Related Facilities, prior to the effective date of Amendment No. 14.
Arizona            73.20%
El Paso             5.07%
New Mexico             9.42%
Salt River Project        7.24%
Tucson                5.07%

17.1.1.9(b)    Common Facilities and Related Facilities - for all Operating Costs not covered by Section 17.1.1.9(a).
Arizona             63%
El Paso            7%
New Mexico            13%
Salt River Project        10%
Tucson                7%

provided, that if any of Units 1, 2 or 3 of the Initial Four Corners Plant is operated for a period after the effective date of Amendment No. 14, the Operating Agent shall adjust the percentages in this Section 17.1.1.9(b) during such period to reflect the operation of such Unit(s) at the Initial Four Corners Plant, subject to review by the Auditing Committee. 

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 Operating Costs which cannot be assigned to any generating Unit or facility but apply to all units shall be shared among all Participants at the Enlarged Four Corners Generating Station in the same said percentages as the Common Facilities and Related Facilities.”
18.Amendment of Section 17.12.  Section 17.12 is hereby amended to read in full as follows:

“17.12    The Participants shall reimburse Arizona for other costs incurred in operating the Four Corners Project which are not specifically delineated in the Operating Agreement.  Such reimbursement shall be shared by the Participants in proportion to their respective Participant Share(s).  The reimbursement methodology shall be determined pursuant to the guidelines presented in Sections 17.9.3, 17.9.4 and 17.9.5.”
19.Amendment of Section 19.19.  Section 19.19 is hereby amended to substitute “81.50%” for “57.50%” in the fifth line thereof, and to delete “Edison 24.00%” from the ninth line thereof.

20.Amendment of Section 21.1.4.  Section 21.1.4 is hereby amended to read in full as follows

“21.1.4. Physical damage insurance, covering the Four Corners Project”

21.Amendment of Section 24.1.1.  Section 24.1.1 is hereby amended to add the following sentence after the final sentence thereof:  “Normal delivery points for Arizona shall also be where Arizona’s 500kV transmission line is attached to the 500kV bus in the 500kV switchyard.  Such point is shown on Exhibit 2 hereof as position #9.”

22.Amendment of Section 24.1.2.  Section 24.1.2 is hereby amended to substitute “[Reserved]” for the text thereof.

23.Amendment of Section 24.2.1.  Section 24.2.1 is hereby amended to add the following sentence after the final sentence thereof:  “Arizona shall also be entitled to sufficient Capacity in the 345kV switchyard to permit 21.6 megawatts of its entitlement of Power and Energy from Units 4 and 5 to be delivered from said units, or from position #9 in the 500kV switchyard, to the point where the Connection to 345kV Switchyard Facilities is attached to the 345kV bus in the 345kV switchyard (positions #1 and #3).”

24.Amendment of Section 24.2.4.  Section 24.2.4 is hereby amended to substitute “[Reserved]” for the text thereof.

25.Amendment of Section 24.4.  Section 24.4 is hereby amended to substitute “57.90%” for “54.44%” in the third line thereof, and to delete “Edison 3.46%” in the fourth line thereof.

26.Deletion of Sections 26.3, 26.4, 26.5 and 26.6.  Sections 26.3, 26.4, 26.5 and 26.6 are hereby deleted in their entirety. 

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27.Amendment of Section 32.1.3.  Section 32.1.3 is hereby amended to read in full as follows:

“32.1.3.  Public Service Company of New Mexico
               c/o Secretary
               Main Offices
               Albuquerque, New Mexico 87158-1245”

28.Amendment of Section 32.1.5.  Section 32.1.5 is hereby amended to substitute “[Reserved]” for the text thereof.

29.Amendment of Exhibit 2.  Exhibit 2 is hereby amended as follows:

To substitute “63%” for “15%” in the first line of the “PROJECT ALLOCATION” table relating to the “CONNECTION TO RESERVE AUXILIARY POWER SOURCE,” and to delete “Edison 48%” from the second line thereof.
To substitute “57.90%” for “54.44%” in the first line of the “COST ALLOC. & OWNERSHIPS” table relating to the “NO.1 230/345KV BUS TIE TRANSFORMER,” and to delete “Edison 3.46%” from the second line thereof.
To substitute “62.45%” for “19.25%” in the first line of the “COST ALLOCATION & OWNERSHIPS” table relating to the “CONNECTION TO 345KV SWITCHYARD FACILITIES,” and to delete “Edison 43.20%” from the second line thereof.
To substitute “75.33%” for “43.33%” in the first line of the “COST ALLOCATION & OWNERSHIPS” table relating to the “500KV SWITCHYARD LIMITS,” and to delete “Edison 32.00%” from the second line thereof.
To substitute “52.23%” for “40.23%” in the first line of the “COST ALLOCATION & OWNERSHIPS” table relating to the “345KV SWITCHYARD LIMITS,” and to delete “Edison 12.00%” from the second line thereof.
To substitute “63%” for “15%” in the first line of the “PROJECT ALLOCATION” table relating to the “345/500KV, 4-16 250MVA EA.” diagram on the lower right corner of Exhibit 2, and to delete “Edison 48.00%” from the second line thereof.
30.Deletion of Exhibit 4.  Exhibit 4 is hereby deleted in its entirety.

31.Amendment No. 14 Effective Date; Termination.  The “Amendment No. 14 Effective Date” means the date of consummation of the Edison Interest Transfer pursuant to the Purchase Agreement (the “Edison Transfer Closing Date”); provided, however, that this Amendment will terminate if (a) Arizona or Edison provides written notice to the Parties to the effect that the Edison Transfer Closing Date will not occur, (b) the Purchase Agreement is terminated, or (c) the Edison Transfer Closing Date does not occur on or prior to December 31, 2013.

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32.Notices.  Any notice provided for in this Amendment shall be deemed properly served, given or made if delivered in person or sent by registered or certified mail, postage prepaid, to the persons specified below:
Arizona Public Service Company
c/o Secretary
P.O. Box 53999
Phoenix, Arizona 85072‐3999

El Paso Electric Company
c/o Secretary
P.O. Box 982
El Paso, Texas 79960

Public Service Company of New Mexico
c/o Secretary
Main Offices
Albuquerque, New Mexico 87158-1245

Salt River Project Agricultural
Improvement and Power District
c/o Secretary
P.O. Box 1980
Phoenix, Arizona 85281

Southern California Edison Company
c/o Secretary
P.O. Box 800
Rosemead, California 91770

Tucson Electric Power Company
c/o Secretary
P.O. Box 711
Tucson, Arizona 85702

33.Effect of Amendment.  The Parties acknowledge and agree that (a) except as specifically amended by this Amendment, the Operating Agreement is unamended, and (b) the Operating Agreement, as amended by this Amendment, remains in full force and effect.

34.Counterparts; Facsimile.  This Amendment may be executed in any number of counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument.  Any facsimile copies hereof or signature hereon shall, for all purposes, be deemed originals.

6EE EX_10.05 2014.03.31 Amendment No. 1

EXHIBIT 10.05

AMENDMENT NO. 1 TO SHIPROCK - FOUR CORNERS PROJECT 345-KV SWITCHYARD INTERCONNECTION AGREEMENT
THIS AMENDMENT NO. 1 TO SHIPROCK - FOUR CORNERS PROJECT 345-KV SWITCHYARD INTERCONNECTION AGREEMENT (this “Amendment”) is made and entered into as of December 30, 2013, by and among ARIZONA PUBLIC SERVICE COMPANY (“Arizona”), an Arizona corporation; El PASO ELECTRIC COMPANY (“El Paso”), a Texas corporation; PUBLIC SERVICE COMPANY OF COLORADO (“PSCo”), a Colorado corporation; PUBLIC SERVICE COMPANY OF NEW MEXICO (“PNM”), a New Mexico corporation; SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT (“Salt River Project”), an agricultural improvement district, organized and existing under the laws of the State of Arizona; SOUTHERN CALIFORNIA EDISON COMPANY (“Edison”), a California corporation; TRI‐STATE GENERATION AND TRANSMISSION ASSOCIATION, INC. (“Tri-State”), a Colorado cooperative corporation doing business in the states of Colorado, Nebraska, New Mexico, and Wyoming; TUCSON ELECTRIC POWER COMPANY (“Tucson”), an Arizona corporation; and THE UNITED STATES OF AMERICA acting by and through the Administrator, Western Area Power Administration, Department of Energy (“Western”), represented by the officer executing this Agreement or a duly appointed successor; individually referred to as “Party” and collectively as “Parties”. 
RECITALS
The Parties entered into the Shiprock - Four Corners Project 345-kV Switchyard Interconnection Agreement, accepted by the Federal Energy Regulatory Commission on September 23, 2002 (the “Interconnection Agreement”), providing, among other things, the terms and conditions relating to the relocation and upgrade of the Four Corners Project transmission line.
Arizona and Edison are parties to a Purchase and Sale Agreement, dated as of November 8, 2010 (the “Purchase Agreement”), providing, among other things, for the sale by Edison to Arizona, and the purchase by Arizona from Edison, of Edison’s interests in the Four Corners Project and the Switchyard Facilities (the “Edison Interest Transfer”).
This Amendment will take effect on the Amendment No. 1 Effective Date, as defined herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1.Defined Terms.  Defined terms used but not defined in this Amendment shall have the respective meanings ascribed to such terms in the Interconnection Agreement.

2.Amendment of Cover Page.  The cover page of the Interconnection Agreement is hereby amended to delete “SOUTHERN CALIFORNIA EDISON COMPANY” therefrom.

3.    Amendment of Section 1.  Section 1 is hereby amended to delete “SOUTHERN CALIFORNIA EDISON COMPANY (“SCE”), a California corporation;” from the eighth line thereof.

4.    Amendment of Section 2.  Section 2 is hereby amended to add the following as Section 2.8 to the Interconnection Agreement:

		
	“2.8
	As of the effective date of Amendment No. 1 to the Interconnection Agreement, Southern California Edison Company, a California corporation (“SCE”), is no longer a party to the Interconnection Agreement or a Four Corners Participant as defined in Section 4.21 of the Interconnection Agreement following the consummation of the transfer to APS by SCE of SCE’s interests in the Four Corners Project pursuant to that certain Purchase and Sale Agreement, dated as of November 8, 2010.  The term “Original Parties” shall refer to APS, EPE, PSCO, PNM, SRP, SCE, Tri-State, TEP and Western.”

5.    Amendment of Section 4.15.  Section 4.15 is hereby amended to delete “SCE,” from the second line thereof.

6.    Amendment of Section 4.21.  Section 4.21 is hereby amended to delete “SCE,” from the first line thereof.

7.    Amendment of Section 4.32.  Section 4.32 is hereby amended to delete “SCE,” from the second line thereof.

8.    Amendment of Section 35.1.  Section 35.1 is hereby amended to delete the following:

“Southern California Edison Company
  Attn: Secretary
  P.O. Box 800
  Rosemead, California 91770”

9.    Amendment of Exhibit 1.  Exhibit 1 is hereby amended to substitute the following “Ownership” table in its entirety for the “Ownership” table in the bottom right-hand corner of the exhibit:

	
				
	Ownership

	APS
	52.23%
	SRP
	10.00%

	EPE
	10.50%
	TEP
	4.65%

	PNM
	22.62%
	 
	 

	 
	 
	 
	 

10.    Amendment of Exhibit 4.  Exhibit 4 is hereby amended to include the following paragraph following the “Notes” section thereof:

“This Exhibit 4 reflects the historical allocations of the Common Facilities Costs which were incurred under the Interconnection Agreement.  Amendment No. 1 to the

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Interconnection Agreement (“Amendment No. 1”), provides, among other things, for updated ownership percentages as they existed following the consummation of the transfer to APS by SCE of SCE’s interests in the Four Corners Project pursuant to that certain PURCHASE AND SALE AGREEMENT, dated as of November 8, 2010 (the “Purchase Agreement”).  As of the effective date of Amendment No. 1, SCE is no longer a party to the Interconnection Agreement.”
11.    Amendment of Exhibit 8.  Exhibit 8 is hereby replaced by Attachment 1 to this Amendment.

12.    Amendment of Exhibit 10.  Exhibit 10 is hereby replaced by Attachment 2 to this Amendment.

13.    Amendment No. 1 Effective Date; Termination.  The “Amendment No. 1 Effective Date” means the date of consummation of the Edison Interest Transfer pursuant to the Purchase Agreement (the “Edison Transfer Closing Date”); provided, however, that this Amendment will terminate if (a) Arizona or Edison provides written notice to the Parties to the effect that the Edison Transfer Closing Date will not occur, (b) the Purchase Agreement is terminated, and Edison hereby agrees to provide written notice to the other Parties of such termination, within five (5) days of such termination, or (c) the Edison Transfer Closing Date does not occur on or prior to December 31, 2013.

14.    Notices.  Any notice provided for in this Amendment shall be deemed properly served, given or made if delivered in person or sent by registered or certified mail, postage prepaid, to the persons specified below:
Arizona Public Service Company
c/o Secretary
P.O. Box 53999
Phoenix, Arizona 85072‐3999

El Paso Electric Company
c/o Secretary
P.O. Box 982
El Paso, Texas 79960

Public Service Company of Colorado
c/o Manager Transmission Operations West
P.O. Box 1078
Golden, Colorado 80402-1078

Public Service Company of New Mexico
c/o Secretary
Main Offices
Albuquerque, New Mexico 87158-1245

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Salt River Project Agricultural
Improvement and Power District
c/o Secretary
P.O. Box 1980
Phoenix, Arizona 85281

Southern California Edison Company
c/o Secretary
P.O. Box 800
Rosemead, California 91770

Tri-State Generation and Transmission Association, Inc.
c/o Executive Vice President and General Manager
P.O. Box 33695
Denver, Colorado 80233

Tucson Electric Power Company
c/o Secretary
P.O. Box 711
Tucson, Arizona 85702

The United States of America
Western Area Power Administration
Colorado River Storage Project Management Center
c/o CRSP Manager
P.O. Box 11606
Salt Lake City, Utah 84147

15.    Compliance with Section 28 of Interconnection Agreement.  Pursuant to Section 28.2 of the Interconnection Agreement, Edison hereby provides notice to the other Parties of Edison’s assignment of its interest in the Interconnection Agreement to Arizona.  Arizona agrees to assume all obligations and duties of Edison under the Interconnection Agreement.

16.    Effect of Amendment.  The Parties acknowledge and agree that (a) except as specifically amended by this Amendment, the Interconnection Agreement is unamended, and (b) the Interconnection Agreement, as amended by this Amendment, remains in full force and effect.

17.    Counterparts; Facsimile.  This Amendment may be executed in any number of counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument.  Any facsimile copies hereof or signature hereon shall, for all purposes, be deemed originals.

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