Document:

Exhibit 10.3.3

                             POWER PURCHASE CONTRACT

                                     BETWEEN

                       SOUTHERN CALIFORNIA EDISON COMPANY

                                       AND

                               ORMAT SYSTEMS INC.

                                TABLE OF CONTENTS
SECTION                          TITLE                                      PAGE

1                PROJECT SUMMARY                                              1

2                DEFINITIONS                                                  2

3                TERM                                                         8

4                GENERATING FACILITY                                          9

5                OPERATING OPTIONS                                           18

6                INTERCONNECTION FACILITIES                                  19

7                METERING                                                    20

8                POWER PURCHASE PROVISIONS                                   21

9                PAYMENT AND BILLING PROVISIONS                              42

10               TAXES                                                       44

11               TERMINATION                                                 45

12               SALE OF GENERATING FACILITY                                 45

13               ABANDONMENT OF PROJECT                                      46

14               LIABILITY                                                   47

15               INSURANCE                                                   50

16               UNCONTROLLABLE FORCES                                       52

17               NONDEDICATION OF FACILITIES                                 54

18               PRIORITY OF DOCUMENTS                                       54

19               NOTICES AND CORRESPONDENCE                                  54

20               PREVIOUS COMMUNICATIONS                                     55

                                      - i -

21              THIRD PARTY BENEFICIARIES                                    55

22              NONWAIVER                                                    55

23              DISPUTES                                                     56

24              SUCCESSORS AND ASSIGNS                                       57

25              EFFECT OF SECTION HEADINGS                                   58

26              TRANSMISSION                                                 58

27              AMENDMENT                                                    59

28              GOVERNING LAW                                                59

29              CONFIDENTIALITY                                              59

30              MULTIPLE ORIGINALS                                           60

                 SIGNATURES                                                  60

                 APPENDIX                                                   A-1

                 APPENDIX B                                                 B-1

                 APPENDIX C                                                 C-1

                                     - ii -

I.  PROJECT SUMMARY
    ---------------

              This Contract is entered into between Southern California Edison
Company ("Edison") and Ormat Systems Inc., a Massachusetts Corporation
("Seller"). Seller is willing to construct, own, and operate a Qualifying
Facility and sell electric power to Edison and Edison is willing to purchase
electric power delivered by Seller to Edison at the Point of Interconnection
pursuant to the terms and conditions set forth as follows:

              1.1  All Notices shall be sent to Seller at the following address:

              Ormat Systems Inc.
              98 South Street
              Hopkinton, MA 01748
              Attn:  President

              1.2  Seller's Generating Facility:
              a.  Nameplate Rating:  18,500 kw.
              b.  Location:  East Mesa, Imperial County, California
              c.  Type (Check One):
                    Cogeneration Facility
                X   Small Power Production Facility

              1.3  Contract Capacity:  15,000 kW

              1.3.1  Estimated as-available capacity:  0 kW.

              1.4  Expected annual production:  120,000,000 kWh.

              1.5  Expected Date of Firm Operation:  September 1, 1985

              1.6  Contract Term:  30 years

              1.7  Operating Options pursuant to Section 5:  (Check One)

              X  Operating Option I. Excess Generator output dedicated to
Edison. No electric service or standby service required from Edison.

                 Operating Option II. Entire Generator output dedicated to
Edison with separate electric service required from Edison.

              1.8 The Capacity Payment option selected by Seller pursuant to
Section 8.1 shall be: (Check One)

                 Option A As-available capacity based upon:

                 Standard Offer No. 1 Capacity Payment Schedule, or

                 Forecast of Annual As-Available Capacity Payment Schedule

              X  Option B - Firm Capacity

              X  Standard Offer No. 2 Capacity Payment Schedule in effect at
time of Contract execution

                 Standard Offer No. 2 Capacity Payment Schedule in effect at
time of Firm Operation

              a. The Contract Capacity Price:  $147 kW-yr.  (Firm Capacity)

             1.9 The Energy Payment Option selected by Seller pursuant to
Section 8.2 shall be: (Check One)

              X  Option I - Forecast of Annual Marginal Cost of Energy in effect
at date of execution of this Contract.  (Appendix B)

                  Option 2 - Levelized Forecast of Marginal Cost of Energy in
effect at date of execution of this Contract.  (Appendix C)

                                       2

              For the energy payment refund pursuant to Section 8.5 under Option
2, Edison's Incremental Cost of Capital is 15 %.

              Seller may change once between Options 1 and 2, provided Seller
delivers written notice of such change at least 90 days prior to the date of
Firm Operation.

              For Option 1 or 2, Seller elects to receive the following
percentages in 20% increments, the total of which shall equal 100%:

              100 percent of Forecast of Annual Marginal Cost of Energy, and

              0 percent of Edison's published avoided cost of energy as updated
periodically and accepted by the Commission.

                          GENERAL TERMS AND CONDITIONS

              2.   DEFINITIONS

              When used with initial capitalizations, whether in the singular or
in the plural, the following terms shall have the following meanings:

              2.1 Adjusted capacity Price: The $/kW-yr capacity purchase price
based on the Capacity Payment Schedule in effect at the time of Contract
execution for the time period beginning on the date of Firm Operation for the
first generating unit and ending on the date of termination or reduction of
Contract Capacity under Capacity Payment Option B.

              2.2 Appendix A: Capacity Payment Schedule - Forecast of Annual As-
Available Capacity

                                       3

              2.3 Appendix B: Energy Payment Schedule - Forecast of Annual
Marginal Cost of Energy

              2.4 Appendix C: Energy Payment Schedule - Levelized Forecast of
Marginal Cost of Energy

              2.5 Capacity Payment Schedule(s): Published capacity payment
schedule(s) as authorized by the commission and in effect at the time of
execution of this Contract for as-available or firm capacity.

              2.6 Commission: The Public Utilities Commission of the State of
California.

              2.7 Contract: This document and Appendices, as amended from time
to time.

              2.8 Contract Capacity: The electric power producing capability of
the Generating Facility which is committed to Edison.

              2.9 Contract Capacity Price: The capacity purchase price from the
Capacity Payment Schedule approved by the commission and in effect on the date
of execution of this Contract for Capacity Payment Option B.

              2.10 Contract Term: Period in years commencing with date of Firm
Operation during which Edison shall purchase electric power from Seller.

              2.11 Current Capacity Price: The $/kw-yr capacity price provided
in the Capacity Payment Schedule determined by the year of termination or
reduction of Contract Capacity, and the number of years from such termination or
reduction to the expiration of the Contract Term for Capacity Payment Option B.

                                       4

              2.12 Edison:  The Southern California Edison Company.

              2.13 Edison Electric System Integrity: The state of operation of
Edison's electric system in a manner which is deemed to minimize the risk of
injury to persons and/or property and enables Edison to provide adequate and
reliable electric service to its customers.

              2.14 Emergency: A condition or situation which in Edison's sole
judgment affects Edison Electric System Integrity.

              2.15 Energy: Kilowatthours generated by the Generating Facility
which are purchased by Edison at the Point of Interconnection.

              2.16 Firm Operation: The date agreed on by the Parties on which
each generating unit of the Generating Facility is determined to be a reliable
source of generation and on which such unit can be reasonably expected to
operate continuously at its effective rating (expressed in kW).

              2.17 First Period: The period of the Contract Term specified in
Section 3.1.

              2.18 Forced Outage: Any outage other than a scheduled outage of
the Generating Facility that fully or partially curtails its electrical output.

              2.19 Generating Facility: All of Seller's generators, together
with all protective and other associated equipment and improvements, necessary
to produce electrical power at Seller's Facility excluding associated land, land
rights, and interests in land.

                                       5

              2.20 Generator: The generator(s) and associated prime mover(s),
which are a part of the Generating Facility.

              2.21 Interconnection Facilities: The electrical interconnection
facilities furnished, at no cost to Edison, by Seller, or by the Interconnecting
Utility on the Seller's behalf, which are appurtenant to, and/or incidental to,
the Project. The Interconnection Facilities shall include, but are not Limited
to, transmission lines and/or distribution lines between the Project and
transmission lines and/or distribution lines of the Interconnecting Utility,
relays, power-circuit breakers, metering devices, telemetering devices, and
other control and protective devices specified by the Interconnecting Utility as
necessary for operation of the Project in parallel with the Interconnecting
Utility's electric system.

              2.22 Interconnecting Utility: The electric utility, or any other
utility which takes delivery of electric energy generated by the Generating
Facility.

              2.23 Operate: To provide the engineering, purchasing, repair,
supervision, training, inspection, testing, protection, operation, use,
management, replacement, retirement, reconstruction, and maintenance of and for
the Generating Facility in accordance with applicable California utility
standards and good engineering practices.

              2.24 Operating Representatives: Individual(s) appointed by each
Party for the purpose of securing effective cooperation and interchange of
information between the Parties in connection with administration and technical
matters related to this Contract.

              2.25 Parties: Edison and Seller.

              2.26 Party: Edison or Seller.

                                       6

              2.27 Peak Months: Those months which the Edison annual system peak
demand could occur. Currently, but subject to change with notice, the peak
months for the Edison system are June, July, August, and September.

              2.28 Point of Interconnection: The point where the electrical
energy generated by the Seller, at the Project, is delivered to the Edison
electric system.

              2.29 Project: The Generating Facility and Interconnection
Facilities required to permit the Generator to deliver electric energy and make
capacity available to Interconnecting Utility.

              2.30 Qualifying Facility: Cogeneration or Small Power Production
Facility which meets the criteria as defined in Title 18, Code of Federal
Regulations, Section 292.201 through 292.207.

              2.31 Renewable Resources: Wind parks, small hydroelectric, solar,
and geothermal resources which produce electric power.

              2.32 Second Period: The period of the Contract Term specified in
Section 3.2.

              2.33 Seller. The Party identified in Section 1.0.

              2.34 Seller's Facility: The premises and equipment of Seller
located as specified in Section 1.2.

              2.35 Small Power Production Facility: The facilities and equipment
which use biomass, waste, or Renewable Resources, including wind, solar,
geothermal, and

                                       7

water, to produce electrical energy as defined in Title 18, Code of Federal
Regulations, Section 292.201 through 292.207.

              2.36 Summer Period: Defined in Edison's Tariff Schedule No. TOU-8
as now in effect or as may hereafter be authorized by the Commission.

              2.37 Tariff Schedule No. TOU-8: Edison's time-of-use energy tariff
for electric service exceeding 500 kW, as now in effect or as may hereafter be
authorized by the Commission.

              2.38 Uncontrollable Forces: Any occurrence beyond the control of a
Party which causes that Party to be unable to perform its obligations hereunder
and which a Party has been unable to overcome by the exercise of due diligence,
including but not limited to flood, drought, earthquake, storm, fire,
pestilence, lightning and other natural catastrophes, epidemic, war, riot, civil
disturbance or disobedience, strike, labor dispute, action or inaction of
government or other proper authority, which may conflict with the terms of this
Contract, or failure, threat of failure or sabotage of facilities which have
been maintained in accordance with good engineering and operating practices in
California. The failure of the Interconnecting Utility to deliver electrical
energy to the Point of Interconnection shall be an Uncontrollable Force only if
such failure is beyond the control of the Interconnecting Utility.

              2.39 Winter Period: Defined in Edison's Tariff Schedule No. TOU-8
as now in effect or as may hereafter be authorized by the commission.

                                       8

              3.  TERM

              This Contract shall be effective upon execution by the Parties and
shall remain effective until either Party gives 90 days prior written notice of
termination to the other Party, except that such notice of termination shall not
be effective to terminate this Contract prior to expiration of the Contract Term
specified in Section 1.6.

              3.1 The First Period of the Contract Term shall commence upon date
of Firm Operation but not later than 5 years from the date of execution of this
Contract.
              a. If the Contract Term specified in Section 1.6 is 15 years, the
First Period of the Contract Term shall be for 5 years.

              b. If the Contract Term specified in Section 1.6 is 20, 25, or 30
years, the First Period of the Contract term shall be for 10 years.

              3.2 The Second Period of the Contract Term shall commence upon
expiration of the First Period and shall continue for the remainder of the
Contract Term.

              4.  GENERATING FACILITY

              4.1 Ownership

              The Generating Facility shall be owned by Seller.

              4.2 Design

              4.2.1 Seller, at no cost to Edison, shall:

              a. Design the Generating Facility.

              b. Acquire all permits and other approvals necessary for the
construction, operation, and maintenance of the Generating Facility.

                                       9

              c. Complete all environmental impact studies necessary for the
construction, operation, and maintenance of the Generating Facility.

              4.2.2 Edison shall have the right to review the design of the
Generating Facility's electrical system and the Seller's Interconnection
Facilities. Edison shall have the right to request modifications to the design
of the Generating Facility's electrical system and the Seller's Interconnection
Facilities. Such modifications shall be required if necessary to maintain Edison
Electric System Integrity. If Seller does not agree to such modifications,
resolution of the difference between the Parties shall be made pursuant to
Section 23.

              4.3 Construction

              Edison shall have the right to review, consult with, and make
recommendations regarding Seller's construction schedule and to monitor the
construction and start-up of the Project. Seller shall notify Edison, as far in
advance of Firm Operation as reasonably possible, of changes in Seller's
Construction Schedule which may affect the date of Firm Operation.

              4.4 Operation

              4.4.1 Edison shall have the right to monitor operation of the
Project and may require changes in Seller's method of operation if such changes
are necessary, in Edison's sole judgment, to maintain Edison Electric System
Integrity.

                                       10

              4.4.2 Seller shall notify, in writing, Edison's Operating
Representative at least 14 days prior to the initial delivery of electrical
energy from the Project to the Point of Interconnection.

              4.4.3 Edison shall have the right to require Seller to curtail or
reduce the delivery of electrical energy from the Project to the Edison electric
system whenever Edison determines, in its sole judgement, that such curtailment
or reduction is necessary to facilitate maintenance of Edison's facilities, or
to maintain Edison Electric System Integrity. If Edison requires Seller to
curtail or reduce the delivery of electrical energy from the Project to the
Edison electric system pursuant to this Section 4.4.3, Seller shall have the
right to continue to serve its total electrical requirements. Each Party shall
endeavor to correct, within a reasonable period, the condition on its system
which necessitates the curtailment or the reduction of delivery of electrical
energy from the Project. The duration of the curtailment or the reduction shall
be limited to the period of time such a condition exists.

              4.4.4 Each Party shall keep the other Party's Operating
Representative informed as to the operating schedule of their respective
facilities affecting each other's operation hereunder, including any reduction
in Contract Capacity availability. In addition, Seller shall provide Edison with
reasonable advance notice regarding its scheduled outages including any
reduction in Contract Capacity availability. Reasonable advance notice is as
follows:

                                       11

               SCHEDULED OUTAGE                   ADVANCE NOTICE
              EXPECTED DURATION                     TO EDISON

       Less than one day                             24 Hours
       One day or more (except major overhauls)        1 Week
       Major overhaul                                6 Months

              4.4.5 Notification by each Party's Operating Representative of
outage date and duration should be directed to the other Party's operating
Representative by telephone.

              4.4.6   Seller shall not schedule major overhauls during Peak
Months.

              4.4.7 Seller shall maintain an operating log at Seller's Facility
with records of: real and reactive power production; changes in operating
status, outages, Protective Apparatus operations; and any unusual conditions
found during inspections. Changes in setting shall also be logged for Generators
which are "block loaded" to a specific kW capacity. In addition, Seller shall
maintain records applicable to the Generating Facility, including the electrical
characteristics of the Generator and settings, adjustments of the Generator
control equipment, and well-field information. Information maintained pursuant
to this Section 4.4.7 shall be provided to Edison, within 30 days of Edison's
request.

              4.4.8 At Edison's request, Seller shall make all reasonable effort
to deliver power at an average rate of delivery at least equal to the Contract
Capacity during periods of Emergency. In the event that the Seller has
previously scheduled an outage coincident

                                       12

with an Emergency, Seller shall make all reasonable efforts to reschedule the
outage. The notification periods listed in Section 4.4.4 shall be waived by
Edison if Seller reschedules the outage.

              4.4.9 Seller shall demonstrate the ability to provide Edison the
specified Contract Capacity within 30 days of the date of Firm Operation.
Thereafter, at least once per year at Edison's request, Seller shall demonstrate
the ability to provide Contract Capacity for a reasonable period of time as
required by Edison. Seller's demonstration of Contract Capacity shall be at
Seller's expense and conducted at a time and pursuant to procedures mutually
agreed upon by the Parties. If Seller fails to demonstrate the ability to
provide the Contract Capacity, the Contract Capacity shall be reduced by
agreement of the Parties pursuant to Section 8.1.2.5.

              4.4.10 The Seller warrants that the Generating Facility meets the
requirements of a Qualifying Facility as of the effective date of this Contract
and continuing through the Contract Term.

              4.4.11 The Seller warrants that the Generating Facility shall, at
all times, conform to all applicable laws and regulations. Seller shall obtain
and maintain any governmental authorizations and permits for the continued
operation of the Generating Facility. If, at any time, Seller does not hold such
authorizations and permits, Seller agrees to reimburse Edison for any loss which
Edison incurs as a result of the Seller's failure to maintain governmental
authorization and permits.

                                       13

              4.4.12 In the event electrical energy from the Project is
curtailed or reduced pursuant to Sections 4.4.3, 16 or 8.4, the Seller, in its
sole discretion, may elect to (i) sell said electrical energy to a third party
or (ii) deliver said electrical energy to a third party for future delivery to
Edison at times and at amounts agreeable to Edison. The Seller shall be
responsible for making all such arrangements. The provisions in this Section
4.4.12 shall only apply for the duration of the curtailment or reduction.

              4.4.13 Seller shall maintain operating communications with the
Edison switching center designated by the Edison Operating Representative. The
operating communications shall include, but not be limited to, system
paralleling or separation, scheduled and unscheduled shutdowns, equipment
clearances, levels of operating voltage or power factors, and daily capacity and
generation reports.

              4.5 Maintenance

              4.5.1 Seller shall maintain the Generating Facility in accordance
with applicable California utility industry standards and good engineering and
operating practices. Edison shall have the right to monitor such maintenance of
the Generating Facility. Seller shall maintain and deliver a maintenance record
of the Generating Facility to Edison's Operating Representatives upon request.

              4.5.2 Seller shall make a reasonable effort to schedule routine
maintenance during Off-Peak Months and expected minimal generation periods for
renewable resources. Outages for scheduled maintenance shall not exceed a total
of 30 peak hours for the Peak Months.

                                       14

              4.5.3   The allowance for scheduled maintenance is as follows:

              a. Outage periods for scheduled maintenance shall not exceed 840
hours (35 days) in any 12-month period. This allowance may be used in increments
of an hour or longer on a consecutive or nonconsecutive basis.

              b. Seller may accumulate unused maintenance hours on a
year-to-year basis up to a maximum of 1,080 hours (45 days). This accrued time
must be used consecutively and only for major overhauls.

              4.6 Any review by Edison of the design, construction, operation,
or maintenance of the Project is solely for the information of Edison. By making
such review, Edison makes no representation as to the economic and technical
feasibility, operational capability, or reliability of the Project. Seller shall
in no way represent to any third party that any such review by Edison of the
Project, including, but not limited to, any review of the design, construction,
operation, or maintenance of the Project by Edison, is a representation by
Edison as to the economic and technical feasibility, operational capability, or
reliability of said facilities. Seller is solely responsible for economic and
technical feasibility, operational capability, and reliability thereof.

              4.7 Edison shall have access to the Seller's geothermal field and
power-generating facilities for the purpose of gathering technical information
and records. The technical information and records shall include, but not be
limited to, drilling data, well-testing data, well-production data and design,
power plant performance data and design,

                                       15

environmental data, brine handling design, and operation and maintenance data.
Edison agrees not to interfere with Seller's rules and operating regulations.

              5. OPERATING OPTIONS

              5.1 Seller shall elect in Section 1.7 to Operate its Generating
Facility pursuant to one of the following options:

              a. Operating Option I: Seller dedicates the excess Generator
output to Edison with no electrical service or standby service required from
Edison.

              b. Operating Option II: Seller dedicates the entire Generator
output to Edison with electrical service required from Edison.

              5.2 After expiration of the First Period of the Contract Term,
Seller may change the Operating Option, but not more than once per year upon at
least 90 days prior written notice to Edison. A reduction in Contract Capacity
as a result of a change in operating options shall be subject to Section
8.1.2.5. Edison shall not be required to remove or reserve capacity of
Interconnection Facilities made idle by a change in operating options. Edison
may dedicate any such idle Interconnection Facilities at any time to serve other
customers or to interconnect with other electric power sources. Edison shall
process requests for changes of operating option in the chronological order
received.

                                       16

              6. INTERCONNECTION FACILITIES

              6.1 Seller shall design, engineer, procure, construct, and test
the Interconnection Facilities in accordance with applicable California utility
standards and good engineering practices and the rules and regulations of the
Interconnecting Utility.

              6.2 The design, installation, operation, maintenance, and
modifications of the Interconnection Facilities shall be at Seller's expense.

              6.3 Seller, at no cost to Edison, shall acquire all permits and
approvals and complete all environmental impact studies necessary for the
design, installation, operation, and maintenance of the Interconnection
Facilities.

              7. METERING

              7.1 All meters and equipment used for the measurement of
electrical power for determining Edison's payments to Seller pursuant to this
Contract shall be provided, owned, and maintained by Edison and/or the
Interconnecting Utility at Seller's expense.

              7.2 If Seller's Generating Facility is rated at a Capacity of 500
kW or greater, then Edison, at its option, may install at Seller's expense,
generation metering and/or telemetering equipment.

              7.3 Edison's or the Interconnecting Utility's meters shall be
sealed and the seals shall be broken only when the meters are to be inspected,
tested, or adjusted by Edison or Interconnecting Utility. Seller shall be given
reasonable notice of testing and have the right to have its Operating
Representative present on such occasions.

                                       17

              7.4 Edison's or Interconnecting Utility's meters installed
pursuant to this Contract shall be tested by Edison or Interconnecting Utility,
at Edison's or Interconnecting Utility's expense, at least once each year and at
any reasonable time upon request by either Party, at the requesting Party's
expense. If Seller makes such request, Seller shall reimburse said expense to
Edison or Interconnecting Utility within thirty days after presentation of a
bill therefor.

              7.5 Metering equipment found to be inaccurate shall be repaired,
adjusted, or replaced by Edison or Interconnecting Utility such that the
metering accuracy of said equipment shall be within plus or minus two percent.
If metering equipment inaccuracy exceeds plus or minus two percent, the correct
amount of Energy and capacity delivered during the period of said inaccuracy
shall be estimated by Edison and agreed upon by the Parties.

              8. POWER PURCHASE PROVISIONS

              Prior to the date of Firm operation, Seller shall be paid for
Energy only pursuant to Edison's published avoided cost of energy based on
Edison's full avoided operating cost as periodically updated and accepted by the
Commission. If at any time electrical energy can be delivered to Edison and
Seller is contesting the claimed jurisdiction of any entity which has not issued
a license or other approval for the Project, Seller, in its sole discretion and
risk, may deliver electrical energy to Edison and for any electrical energy
purchased by Edison Seller shall receive payment from Edison for (i) Energy
pursuant to this Section, and (ii) as-available capacity based on a capacity
price

                                       18

from the Standard Offer No. 1 Capacity Payment Schedule as approved by the
Commission. Unless and until all required licenses and approvals have been
obtained, Seller may discontinue deliveries at any time.

              8.1 Capacity Payments

              Seller shall sell to Edison and Edison shall purchase from Seller
capacity pursuant to the Capacity Payment option selected by Seller in Section
1.8. The Capacity Payment Schedules will be based on Edison's full avoided
operating costs as approved by the Commission throughout the life of this
Contract.

              8.1.1 Capacity Payment Option A -- As-Available Capacity.

              If Seller selects capacity Payment Option A, Seller shall be paid
a Monthly Capacity Payment calculated pursuant to the following formula:

              Monthly Capacity   Payment = (A x D)+(B x D)+(C x D)

              Where A = kWh purchased by Edison during on-peak periods defined
in Edison's Tariff Schedule No. TOU-8.

              B = kWh purchased by Edison during mid-peak periods defined in
Edison's Tariff Schedule No. TOU-8.

              C = kWh purchased by Edison during off-peak periods defined in
Edison's Tariff Schedule No. TOU-8.

              D = The appropriate time differentiated capacity price from either
the Standard Offer No. 1 Capacity Payment Schedule or Forecast of Annual
As-Available Capacity Payment Schedule as specified by Seller in Section 1.8.

                                       19

              8.1.1.1 If Seller specifies the Standard Offer No. 1 Capacity
Payment Schedule in Section 1.8, then the formula set forth in Section 8.1.1
shall be computed with D equal to the appropriate time differentiated capacity
price from the Standard Offer No. 1 Capacity Payment Schedule for the Contract
Term.

              8.1.1.2 If Seller specifies the Forecast of Annual As-Available
Capacity Payment Schedule in Section 1.8, the formula set forth in Section 8.1.1
shall be computed as follows:

              a. During the First Period of the Contract Term, D shall equal the
appropriate time differentiated capacity price from the Forecast of Annual
As-Available Capacity Payment Schedule.

              b. During the Second Period of the Contract Term, the formula
shall be computed with D equal to the appropriate time differentiated capacity
price from Standard Offer No. 1 Capacity Payment Schedule, but not less than the
greater of (i) the appropriate time differentiated capacity price from the
Forecast of Annual As-Available Capacity Payment Schedule for the last year of
the First Period, or (ii) the appropriate time differentiated capacity price
from the Standard Offer No. 1 Capacity Payment Schedule for the first year of
the Second Period.

              8.1.2 Capacity Payment Option B--Firm Capacity Purchase

              If Seller selects Capacity Payment Option B, Seller shall provide
to Edison for the Contract Term the Contract Capacity specified in Section 1.3,
or as adjusted pursuant to Section 8.1.2.6, and Seller shall be paid as follows;

                                       20

              8.1.2.1 If Seller meets the performance requirements set forth in
Section 8.1.2.2, Seller shall be paid a Monthly Capacity Payment, beginning from
the date of Firm Operation equal to the sum of the on-peak, mid-peak, and
off-peak Capacity Period Payments. Each capacity period payment is calculated
pursuant to the following formula:

              Monthly Capacity Period = A x B x C x D

              Payment

              Where A = Contract Capacity Price specified in Section 1.8 based
on the Standard Offer No. 2 Capacity Payment Schedule as approved by the
Commission and in effect on the date of the execution of this Agreement.

               B = Conversion factors to convert annual capacity prices to
monthly payments by time of delivery as specified in Standard Offer No. 2
Capacity Payment Schedule and subject to periodic modifications as approved by
the Commission.

               C = Contract Capacity specified in Section 1.3.

               D =   Period Performance Factor, not to exceed 1.0, calculated as
follows:

              Period Performance Factor = [Period kWh Purchased by Edison
(Limited by the Level of Contract Capacity)]

              [0.8 x Contract Capacity x (Period Hours minus Maintenance Hours
Allowed in Section 4.5.)]

              8.1.2.2   Performance Requirements

              To receive the Monthly Capacity Payment in Section 8.1.2.1, Seller
shall provide the Contract Capacity in each Peak Month for all on-peak hours as
such peak hours are defined in Edison's Tariff Schedule No. TOU-8 on file with
the Commission,

                                       21

except that Seller is entitled to a 20% allowance for Forced
Outages for each Peak Month. Seller shall not be subject to such performance
requirements for the remaining hours of the year.

              a. If Seller fails to meet the requirements specified in Section
8.1.2.2, Seller, in Edison's sole discretion, may be placed on probation for a
period not to exceed 15 months. If Seller fails to meet the requirements
specified in Section 8.1.2.2 during the probationary period, Edison may derate
the Contract Capacity to the greater of the capacity actually delivered during
the probationary period, or the capacity at which Seller can reasonably meet
such requirements. A reduction in Contract Capacity as a result of this Section
8.1.2.2 shall be subject to Section 8.1.2.5.

              b. If Seller fails to meet the requirements set forth in this
Section 8.1.2.2 due to a Forced Outage on the Edison system, or a request to
reduce or curtail delivery under Section 8.4, Edison shall continue Monthly
Capacity Payments pursuant to Capacity Payment Option B. The Contract Capacity
curtailed shall be treated the same as scheduled maintenance outages in the
calculation of the Monthly Capacity Payment.

              8.1.2.3 If Seller is unable to provide Contract Capacity due to
Uncontrollable Forces, Edison shall continue Monthly Capacity Payments pursuant
to Capacity Payment Option B for 90 days from the occurrence of the
Uncontrollable Force. Monthly Capacity Payments payable during a period of
interruption or reduction by reason of an Uncontrollable Force shall be treated
the same as scheduled maintenance outages.

                                       22

              8.1.2.4   Capacity Bonus Payment

              For Capacity Payment Option B, Seller may receive a Capacity Bonus
Payment as follows:

              a.   Bonus During Peak Months

              For a Peak Month, Seller shall receive a Capacity Bonus Payment if
(i) the requirements set forth in Section 8.1.2.2 have been met, and (ii) the
on-peak capacity factor exceeds 85%.

              b.   Bonus During Non-Peak Months

              For a non-peak month, Seller shall receive a Capacity Bonus
Payment if (i) the requirements set forth in Section 8.1.2.2 have been met, (ii)
the on-peak capacity factor for each Peak Month during the year was at least
85%, and (iii) the on-peak capacity factor for the non-peak month exceeds 85%.

              c. For any eligible month, the Capacity Bonus Payment shall be
              calculated as follows:

              Capacity Bonus Payment = A x B x C x D
              Where A = (1.2 x On-Peak Capacity Factor)-1.02

                                       23

              Where the On-Peak Capacity Factor, not to exceed 1.0, is
calculated as follows:

              [Period kWh Purchased by Edison (Limited by the Level of Contract
              Capacity)]

              On-Peak Capacity Factor  =  ((Contract Capacity) x (Period Hours
minus Maintenance Hours Allowed in Section 4.5))

              B = Contract Capacity Price specified in Section 1.8 for Capacity
              Payment Option B

              C = 1/12

              D = Contract Capacity specified in section 1.3

              d. When Seller is entitled to receive a Capacity Bonus Payment,
the Monthly Capacity Payment shall be the sum of the Monthly Capacity Payment
pursuant to Section 8.1.2.1 and the Monthly Capacity Bonus Payment pursuant to
this Section 8.1.2.4.

              8.1.2.5   Capacity Reduction

              a. Seller may reduce the Contract Capacity specified in Section
1.3, provided that Seller gives Edison prior written notice for a period
determined by the amount of Contract Capacity reduced as follows:

  Amount of Contract Capacity
            Reduced                  Length of Notice Required
------------------------------     ----------------------------
      25,000 kW or under                    12 months
      25,001 - 50,000 kW                    36 months
      50,001 - 100,000 kW                   48 months
        over 100,000 kW                     60 months

                                       24

              b. Seller shall refund to Edison with interest at the current
published Federal Reserve Board three months prime commercial paper rate, an
amount equal to the difference between (i) the accumulated Monthly Capacity
Payments paid by Edison pursuant to Capacity Payment Option B up to the time the
reduction notice is received by Edison, and (ii) the total capacity payments
which Edison would have paid if based on the Adjusted Capacity Price.

              c. From the date the reduction notice is received to the date of
actual capacity reduction, Edison shall make capacity payments based on the
Adjusted Capacity Price for the amount of Contract Capacity being reduced.

              d. Seller may reduce Contract Capacity without the notice
prescribed in Section 8.1.2.5(a), provided that Seller shall refund to Edison
the amount specified in Section 8.1.2.5(b) and an amount equal to: (i) the
amount of Contract Capacity being reduced, times (ii) the difference between the
Current Capacity Price and the Contract Capacity Price, times (iii) the number
of years and fractions thereof (not less than one year) by which the Seller has
been deficient in giving the prescribed notice. If the Current Capacity Price is
less than the Contract Capacity Price, only payment under Section 8.1.2.5(b)
shall be due to Edison.

              8.1.2.6 The Parties may agree in writing at any time to adjust the
Contract Capacity. Seller may reduce the Contract Capacity pursuant to Section
8.1.2.5. Seller may increase the Contract Capacity with Edison's approval and
thereafter receive

                                       25

payment for the increased capacity in accordance with the Contract capacity
Price for the Capacity Payment Option selected by Seller for the remaining
Contract Term.

              8.1.2.7 For Capacity Payment Option B, Seller shall be paid for
capacity in excess of Contract Capacity based on the as-available capacity price
in Standard Offer No. 1 Capacity Payment Schedule, as updated and approved by
the Commission.

              8.2   Energy Payments - First Period

              During the First Period of the Contract Term, Seller shall be paid
a Monthly Energy Payment for the electrical energy delivered by the Seller and
purchased by Edison at the Point of Interconnection pursuant to the Energy
Payment Option selected by the Seller in Section 1.9, as follows.

              8.2.1   Energy Payment Option 1 -- Forecast of Annual Marginal
Cost of Energy.

              If Seller selects Energy Payment Option 1, then during the First
Period of the Contract Term, Seller shall be paid a Monthly Energy Payment for
electrical energy delivered by Seller and purchased by Edison at the Point of
Interconnection during each month in the First Period of the Contract Term
pursuant to the following formula:

              Monthly Energy Payment = [(A x D) + (B x D) + (C x D)] x E

              Where A =  kWh purchased by Edison during on-peak periods defined
in Edison's Tariff Schedule No. TOU-8.

              B = kWh purchased by Edison during mid-peak periods defined in
              Edison's Tariff Schedule No. TOU-8.

                                       26

              C = kWh purchased by Edison during off-peak periods defined in
Edison's Tariff Schedule No. TOU-8.

              D =  The sum of:

              (i) the appropriate time differentiated energy price from the
Forecast of Annual Marginal Cost of Energy, multiplied by the decimal equivalent
of the percentage of the forecast specified in Section 1.9, and (ii) the
appropriate time differentiated energy price from Edison's published avoided
cost of energy multiplied by the decimal equivalent of the percentage of the
published energy price specified in Section 1.9.

              E   Energy Loss Adjustment Factor For Remote Generating Sites*

              8.2.2 Energy Payment Option 2 -- Levelized Forecast of Marginal
Cost of Energy. If Seller selects Energy Payment Option 2, then during the First
Period of the Contract Term, Seller shall be paid a Monthly Energy Payment for
electrical energy delivered by Seller and purchased by Edison each month during
the First Period of the Contract Term pursuant to the following formula:

              Monthly Energy Payment = [(A x D) + (B x D) + (C x D)) x E

              Where A = kWh purchased by Edison during on-peak periods defined
in Edison's Tariff schedule No. TOU-8.

----------------------
* The Energy Loss Adjustment Factor For Remote Generating Sites shall be 1.0,
  subject to adjustment by Commission orders and rulings.

                                       27

              B =   kWh purchased by Edison during mid-peak periods defined in
Edison's Tariff Schedule No. TOU-8.

              C =  kWh purchased by Edison during off-peak periods defined in
Edison's Tariff Schedule No. TOU-8.

              D =  The sum of:

              (i) the appropriate time differentiated energy price from the
Levelized Forecast of Marginal Cost of Energy, for the First Period of the
Contract Term multiplied by the decimal equivalent of the percentage of the
levelized forecast specified in Section 1.9, and (ii) the appropriate time
differentiated energy price from Edison's published avoided cost of energy
multiplied by the decimal equivalent of the percentage of the published energy
price specified in section 1.9.

              E =  Energy Loss Adjustment Factor For Remote Generating Sites*

              8.2.2.1   Performance Requirement for Energy Payment Option 2

              During the First Period when the annual forecast referred to in
Section 8.2.1 is greater than the levelized forecast referred to in Section
8.2.2, Seller shall deliver to Edison at least 70 percent of the average annual
kWh delivered to Edison during those previous periods when the levelized
forecast referred to in Section 8.2.2 is greater than

----------------------
* The Energy Loss Adjustment Factor For Remote Generating Sites shall be 1.0,
  subject to adjustment by Commission orders and rulings.

                                       28

the annual forecast referred to in Section 8.2.1. If Seller does not meet the
performance requirements of this Section 8.2.2.1, Seller shall be subject to
Section 8.5.

              8.3 Energy Payment - Second Period

              During the Second Period of the Contract Term, Seller shall be
paid a Monthly Energy Payment for electrical energy delivered by Seller and
purchased by Edison at the Point of Interconnection at a rate equal to 100% of
Edison's published avoided cost of energy as updated periodically and accepted
by the Commission, pursuant to the following formula:

              Monthly Energy Payment  =  kWh purchased by Edison for each
on-peak, mid-peak, and off-peak time period defined in Edison's Tariff Schedule
No. TOU-8
              x Edison's published avoided cost of energy by time of delivery
              for each time period

              x Energy Loss Adjustment Factor for Remote Generating Sites*

              8.4 Edison shall not be obligated to accept or pay for electrical
energy generated by the Generating Facility, and may request Seller whose
Generating Facility is one (1) MW or greater to discontinue or reduce delivery
of electric energy, for not more than 300 hours annually during off-peak hours
when (i) purchases would result in costs

----------------------
* The Energy Loss Adjustment Factor For Remote Generating Sites shall be 1.0,
  subject to adjustment by Commission orders and rulings.

                                       29

greater than those which Edison would incur if it did not purchase
electrical energy from Seller but instead utilized an equivalent amount of
electrical energy generated from another Edison source, or (ii) the Edison
Electric System demand would require that Edison hydro-energy be spilled to
reduce generation.

              8.5   Energy Payment Refund

              If Seller elects Energy Payment Option 2, Seller shall be subject
              to the following:

              8.5.1 If Seller fails to perform the Contract obligations for any
reason during the First Period of the Contract Term, or fails to meet the
performance requirements set forth in section 8.2.2.1, and at the time of such
failure to perform, the net present value of the cumulative Energy payments
received by Seller pursuant to Energy Payment Option 2 exceeds the net present
value of what Seller would have been paid pursuant to Energy Payment Option 1,
Seller shall make an energy payment refund equal to the difference in such net
present values in the year in which the refund is due. The present value
calculation shall be based upon the rate of Edison's incremental cost of capital
specified in Section 1.9.

              8.5.2 Not less than 90 days prior to the date Energy is first
delivered to the Point of Interconnection, Seller shall provide and maintain a
performance bond, surety bond, performance insurance, corporate guarantee, or
bank letter of credit, satisfactory to Edison, which shall insure payment to
Edison of the Energy Payment Refund at any time during the First Period. Edison
may, in its sole discretion, accept another form of

                                       30

security except that in such instance a 1-1/2 percent reduction shall then apply
to the levelized forecast referred to in Section 8.2.2 in computing payments for
Energy. Edison shall be provided with certificates evidencing Seller's
compliance with the security requirements in this Section which shall also
include the requirement that Edison be given 90 days prior written notice of the
expiration of such security.

              8.5.3 If Seller fails to provide replacement security not less
than 60 days prior to the date of expiration of existing security, the Energy
Payment Refund provided in Section 8.5 shall be payable forthwith. Thereafter,
payments for Energy shall be 100 percent of the Monthly Energy Payment provided
in Section 8.2.1.

              8.5.4 If Edison at any time determines the security to be
otherwise inadequate, and so notifies Seller, payments thereafter for Energy
shall be 100 percent of the Monthly Energy Payment provided in Section 8.2.1. If
within 30 days of the date Edison gives notice of such inadequacies, Seller
satisfies Edison's security requirements, Energy Payment Option 2 shall be
reinstated. If Seller fails to satisfy Edison's security requirements within the
30-day period, the Energy Payment Refund provided in Section 8.5 shall be
payable forthwith.

              9.   PAYMENT AND BILLING PROVISIONS

              9.1   For Energy and capacity purchased by Edison:

              9.1.1 Edison shall mail to Seller no later than thirty days after
the end of each monthly billing period (1) a statement showing the Energy and
capacity delivered to Edison during the on-peak, mid-peak, and off-peak periods,
as those periods are specified

                                       31

in Edison's Tariff Schedule No. TOU-8 for that monthly billing period, (2)
Edison's computation of the amount due Seller, and (3) Edison's check in payment
of said amount.

              9.1.2 If the monthly payment period involves portions of two
different published Energy payment schedule periods, the monthly Energy payment
shall be prorated on the basis of the percentage of days at each price.

              9.1.3 If the payment period is less than 27 days or greater than
33 days, the capacity payment shall be prorated on the basis of the average days
per month per year.

              9.1.4 If, within thirty days of receipt of the statement, Seller
does not make a report in writing to Edison of an error, Seller shall be deemed
to have waived any error in Edison's statement, computation, and payment, and
they shall be considered correct and complete.

              9.2 Edison shall bill the Seller, on a monthly basis, for the
costs Edison has incurred in the transmission of the electrical energy from the
Project to the Point of Interconnection pursuant to the provisions of Section
26.

              9.3   Payments Due to contract Capacity Reduction

              9.3.1 The Parties agree that the refund and payments provided in
Section 8.1.2.5 represent a fair compensation for the reasonable losses that
would result from such reduction of Contract Capacity.

              9.3.2 In the event of a reduction in Contract Capacity, the
quantity, in kW, by which the Contract Capacity is reduced shall be used to
calculate the refunds and payments due Edison in accordance with Section
8.1.2.5, as applicable.

                                       32

              9.3.3 Edison shall provide invoices to Seller for all refunds and
payments due Edison under this Section 9 which shall be due within 60 days.

              9.3.4 If Seller does not make payments as required in Section
9.2.3, Edison shall have the right to offset any amounts due it against any
present or future payments due Seller and may pursue any other remedies
available to Edison as a result of Seller's failure to perform.

              9.4   Energy Payment Refund

              Energy Payment Refund is immediately due and payable upon Seller's
failure to perform the contract obligations as specified in Section 8.5.

              10. TAXES

              10.1 Seller shall pay ad valorem taxes and other taxes properly
attributable to the Project. If such taxes are assessed or levied against
Edison, Seller shall pay Edison for such assessment or levy.

              10.2 Seller shall pay ad valorem taxes and other taxes properly
attributed to land, land rights, or interest in land for the Project. If such
taxes are assessed or levied against Edison, Seller shall pay Edison for such
assessment or levy.

              10.3 Seller or Edison shall provide information concerning the
Project to any requesting taxing authority.

              11.   TERMINATION

              This Contract shall terminate if Firm Operation does not occur
within 5 years of the date of Contract execution.

                                       33

              12.   SALE OF GENERATING FACILITY

              12.1 If Seller desires to sell the Generating Facility, Seller
shall promptly offer to Edison, or any entity designated by Edison in its sole
discretion, the right to purchase the Generating Facility. Edison, or any such
entity designated by Edison, shall have up to sixty days following the offer to
accept Seller's offer or reach agreement with Seller.

              12.2 If the Parties are unable to reach a satisfactory agreement
within sixty days following the offer pursuant to Section 12.1, and the
Generating Facility is offered to any third party or parties, Edison, or any
such entity designated by Edison, has the right for thirty days following each
offer to agree to purchase the Generating Facility under the same terms and
conditions, if such terms and conditions are better to Edison than those offered
in Section 12.1. Any offers to sell made more than two years after Edison's
failure to accept a previous offer to sell under Section 12.1, shall again be
subject to the terms of Sections 12.1 and 12.2

              12.3 Notwithstanding the foregoing, Seller shall have the right at
any time to sell or transfer the Generating Facility to an affiliate of Seller
and an affiliate of Seller may sell, transfer, or lease to Seller without giving
rise to any right of first refusal of Edison. An "affiliate" of Seller shall
mean a Party's parent, a Party's subsidiary, or any company of which a Party's
parent is a parent. An "affiliate" of Seller shall also mean a partnership or
joint venture from which the Seller leases and operates the Generating

                                       34

Facility. A "parent" shall mean a company which owns directly or indirectly not
less than 51% of the shares entitled to vote in an election of directors of
another company.

              13.   ABANDONMENT OF PROJECT

              13.1 The Generating Facility shall be deemed to be abandoned if
Seller discontinues operation of the Generating Facility with the intent that
such discontinuation be permanent. Such intent shall be conclusively presumed by
either (i) Seller's notice to Edison of such intent, or (ii) Seller's operation
of the Generating Facility in such a manner that no Energy is generated
therefrom for 200 consecutive days during any period after Firm Operation of the
first generating unit, unless otherwise agreed to in writing by the Parties. If
the Project is prevented from generating Energy due to an Uncontrollable Force,
then such period shall be extended for the duration of the Uncontrollable Force,
not to exceed one year.

              13.2 If Seller abandons the Generating Facility during the term of
this Agreement, Edison, or any entity designated by Edison in its sole
discretion, shall have the right to purchase the Generating Facility pursuant to
the provisions of Section 12.

              14.   LIABILITY

              14.1 Each Party (First Party) releases the other Party (Second
Party), its directors, officers, employees and agents from any loss, damage,
claim, cost, charge, or expense of any kind or nature (including any direct,
indirect or consequential loss, damage, claim, cost, charge, or expense),
including attorney's fees and other costs of litigation incurred by the First
Party, in connection with damage to property of the First

                                       35

Party caused by or arising out of the Second Party's construction, engineering,
repair, supervision, inspection, testing, protection, operation, maintenance,
replacement, reconstruction, use or ownership of its facilities, to the extent
that such loss, damage, claim, cost, charge, or expense is caused by the
negligence of Second Party, its directors, officers, employees, agents, or any
person or entity whose negligence would be imputed to Second Party.

              14.2 Each Party shall indemnify and hold harmless the other Party,
its directors, officers, and employees or agents from and against any loss,
damage, claim, cost, charge, or expense of any kind or nature (including direct,
indirect or consequential loss, damage, claim, cost, charge, or expense),
including attorney's fees and other costs of litigation, incurred by the other
Party in connection with the injury to or death of any person or damage to
property of a third party arising out of the indemnifying Party's construction,
engineering, repair, supervision, inspection, testing, protection, operation,
maintenance, replacement, reconstruction, use, or ownership of its facilities,
to the extent that such loss, damage, claim, cost, charge, or expense is caused
by the negligence of the indemnifying Party, its directors, officers, employees,
agents, or any person or entity whose negligence would be imputed to the
indemnifying Party; provided, however, that each Party shall be solely
responsible for and shall bear all cost of claims brought by its contractors or
its own employees and shall indemnify and hold harmless the other Party for any
such costs including costs arising out of any workers compensation law. Seller
releases and shall defend and indemnify Edison from any claim, cost, loss,
damage, or

                                       36

liability arising from any contrary representation concerning the effect of
Edison's review of the design, construction, operation, or maintenance of the
Project.

              14.3 The provisions of this Section 14 shall not be construed so
as to relieve any insurer of its obligations to pay any insurance claims in
accordance with the provisions of any valid insurance policy.

              14.4 Neither Party shall be indemnified by the other Party under
Section 14.2 for its liability or loss resulting from its sole negligence or
willful misconduct.

              15.   INSURANCE

              15.1 Until Contract is terminated, Seller shall obtain and
maintain in force as hereinafter provided comprehensive general liability
insurance, including contractual liability coverage, with a combined single
limit of not less than $1,000,000 each occurrence. The insurance carrier or
carriers and form of policy shall be subject to review and approval by Edison.

              15.2 Prior to the date Seller's generating facility first delivers
electrical energy to the Point of Interconnection, Seller shall (i) furnish
certificate of insurance to Edison, which certificate shall provide that such
insurance shall not be terminated nor expire except on thirty days prior written
notice to Edison, (ii) maintain such insurance in effect for so long as Seller's
Generating Facility is delivering electrical energy to the Point of
Interconnection, and (iii) furnish to Edison an additional insured endorsement
with respect to such insurance in substantially the following form:
"In consideration of the premium charged, Southern California Edison Company
(Edison)

                                       37

is named as additional insured with respect to all Liabilities arising
out of Seller's use and ownership of Seller's Generating Facility.

              "The inclusion of more than one insured under this policy shall
not operate to impair the rights of one insured against another insured and the
coverages afforded by this policy will apply as though separate policies had
been issued to each insured. The inclusion of more than one insured will not,
however, operate to increase the limit of the carrier's liability. Edison will
not, by reason of its inclusion under this policy, incur liability to the
insurance carrier for payment of premium for this policy.

              "Any other insurance carried by Edison which may be applicable
shall be deemed excess insurance and Seller's insurance primary for all purposes
despite any conflicting provisions in Seller's policy to the contrary."

              15.3 If Seller fails to comply with the provisions of this Section
15, Seller shall, at its own cost, defend, indemnify, and hold harmless Edison,
its directors, officers, employees, agents, assigns, and successors in interest
from and against any and all loss, damage, claim, cost, charge, or expense of
any kind or nature (including direct, indirect or consequential loss, damage,
claim, cost, charge, or expense, including attorney's fees and other costs of
litigation) resulting from the death or injury to any person or damage to any
property, including the personnel and property of Edison, to the extent that
Edison would have been protected had Seller complied with all of the provisions
of this Section 15.

                                       38

              16.   UNCONTROLLABLE FORCES

              16.1 Neither Party shall be considered to be in default in the
performance of any of the agreements contained in this Contract, except for
obligations to pay money, when and to the extent failure of performance shall be
caused by an Uncontrollable Force.

              16.2 If either Party, because of an Uncontrollable Force, is
rendered wholly or partly unable to perform its obligations under this Contract,
the Party shall be executed from whatever performance is affected by the
Uncontrollable Force to the extent so affected provided that:

              (1) The non-performing Party, within two weeks after the
occurrence of the Uncontrollable Force, gives the other Party written notice
describing the particulars of the occurrence;

              (2)   The suspension of performance is of no greater scope and of
no longer duration than is required by the Uncontrollable Force;

              (3) The non-performing Party uses its best efforts to remedy its
inability to perform (this subsection shall not require the settlement of any
strike, walkout, lockout or other labor dispute on terms which, in the sole
judgment of the party involved in the dispute, are contrary to its interest. It
is understood and agreed that the settlement of strikes, walkouts, lockouts or
other labor disputes shall be at the sole discretion of the Party having the
difficulty);

                                       39

              (4) When the non-performing Party is able to resume performance of
its obligations under this Contract, that Party shall give the other Party
written notice to that effect; and

              (5) Capacity payments during such periods of Uncontrollable Force
on Seller's part shall be governed by Section 8.1.2.3.

              16.3 In the event that either Party's ability to perform cannot be
corrected when the Uncontrollable Force is caused by the actions or inactions of
legislative, judicial or regulatory agencies or other proper authority, this
Contract may be amended to comply with the legal or regulatory change which
caused the nonperformance.

              If a Loss of Qualifying Facility status occurs due to an
Uncontrollable Force and Seller fails to make the changes necessary to maintain
its Qualifying Facility status, the Seller shall compensate Edison for any
economic detriment incurred by Edison as a result of such failure.

              17.   NONDEDICATION OF FACILITIES

              Neither Party, by this Contract, dedicates any part of its
facilities involved in this Project to the public or to the service provided
under the Contract, and such service shall cease upon termination of the
Contract.

              18.   PRIORITY OF DOCUMENTS

              If there is a conflict between this document and any Appendix, the
provisions of this document shall govern. Each Party shall notify the other
immediately upon the determination of the existence of any such conflict.

                                       40

              19.   NOTICES AND CORRESPONDENCE

              All notices and correspondence pertaining to this Contract shall
be in writing and shall be sufficient if delivered in person or sent by
certified mail, postage prepaid, return receipt requested, to Seller as
specified in Section 1.1, or to Edison as follows:

              Southern California Edison Company
              Post Office Box 800
              Rosemead, California 91770
              Attention:   Secretary

              All notices sent pursuant to this Section 19 shall be effective
when received, and each Party shall be entitled to specify as its proper address
any other address in the United States upon written notice to the other Party.

              20.   PREVIOUS COMMUNICATIONS

              This Contract contains the entire agreement and understanding
between the Parties, their agents, and employees as to the subject matter of
this contract, and merges and supersedes all prior agreements, commitments,
representations, and discussions between the Parties. No Party shall be bound to
any other obligations, conditions, or representations with respect to the
subject matter of this Contract.

              21.   THIRD PARTY BENEFICIARIES

              This Contract is for the sole benefit of the Parties and shall not
be construed as granting any rights to any person or entity other than the
Parties or imposing obligations on either Party to any person or entity other
than the Parties.

                                       41

              22.   NONWAIVER

              None of the provisions of the Contract shall be considered waived
by either Party except when such waiver is given in writing. The failure of
either Edison or Seller to insist in any one or more instances upon strict
performance of any of the provisions of the Contract or to take advantage of any
of its rights hereunder shall not be construed as a waiver of any such
provisions or the relinquishment of any such rights for the future, but the same
shall continue to remain in full force and effect.

              23.   DISPUTES

              23.1. Any dispute arising between the Parties relating to
interpretation of the provisions of this Contract or to performance of the
Parties hereunder, other than matters which may not be settled without the
consent of an involved insurance company, shall be reduced to writing stating
the complaint and proposed solution and submitted to the appropriate Edison
manager, whose interpretation and decision thereon shall be incorporated into a
written document which shall specify Edison's position and that it is the final
decision of such manager. A copy of such document shall be furnished to Seller
within ten days following the receipt of Seller's written complaint.

              23.2 The decision of such manager pursuant to Section 23.1 shall
be final and conclusive from the date of receipt of such copy by the complaining
Party, unless within thirty days Seller furnishes a written appeal to such
manager. Following receipt of such appeal, a joint hearing shall be held within
fifteen days of said appeal, at which time the Parties shall each be afforded an
opportunity to present evidence in support of their

                                       42

respective positions. Such joint hearing shall be conducted by one authorized
representative of Seller and one authorized representative of Edison and other
necessary persons. Pending final decision of a dispute hereunder, the Parties
shall proceed diligently with the performance of their obligations under this
Contract and in accordance with Edison's position pursuant to Section 23.1.

              23.3 The final decision by the Parties' authorized representatives
shall be made within fifteen days after presentation of all evidence affecting
the dispute, and shall be reduced to writing. The decision shall be final, and
conclusive.

              23.4 If the authorized representatives cannot reach a final
decision within the fifteen-day period, any remedies which are provided by law
may be pursued.

              24.   SUCCESSORS AND ASSIGNS

              Neither Party shall voluntarily assign its rights nor delegate its
duties under this Contract, or any part of such rights or duties, without the
written consent of the other Party, except in connection with the sale or merger
of a substantial portion of its properties. Any such assignment or delegation
made without such written consent shall be null and void. Consent for assignment
shall not be unreasonably withheld. Such assignment shall include, unless
otherwise specified therein, all of Seller's rights to any refunds which might
become due under the Contract. Seller may assign all or any part of its interest
under this Contract to a financing institution to facilitate financing for the
Project by the Seller.

                                       43

              25.   EFFECT OF SECTION HEADINGS

              Section headings appearing in this Agreement are inserted for
convenience only, and shall not be construed as interpretations of text.

              26.   TRANSMISSION

              26.1 Edison shall endeavor to make arrangements with third parties
for the necessary transmission of the electrical energy from the Project to the
Point of Interconnection. Seller shall be responsible for all costs associated
with such transmission of electrical energy, including the cost of transmission
losses from the Project to the Point of Interconnection as determined by Edison
in its sole judgement.

              26.2 If Edison is unable to secure firm transmission service or
equivalent arrangements from third parties which are required to transmit the
electrical energy from the Project to the Point of Interconnection at terms and
conditions satisfactory to Edison in its sole judgement, then Edison shall not
be liable to the Seller for any damages arising from Edison's failure to secure
said transmission service or arrangements nor will Edison be required to
purchase Energy which is not delivered or capacity which is not made available
at the Point of Interconnection.

              27.   AMENDMENT

              If at any time during the term of this Agreement a change in
circumstances not anticipated at the time this Agreement was executed
significantly alters the rights or obligations of either Party, the terms of the
Agreement which are directly affected by the change shall be amended by mutual
agreement of Parties.

                                       44

              28.   GOVERNING LAW

              This Contract shall be interpreted, governed, and construed under
the laws of the State of California as if executed and to be performed wholly
within the State of California.

              29.   CONFIDENTIALITY

              29.1. Except as provided herein, the Parties shall hold all
information in this Contract and all informatin related to or received pursuant
to this Contract as confidential.

              29.2 Neither Party shall disclose any part nor the whole of this
Contract to any third party without the express prior written consent of the
other Party; such consent shall not be unreasonably withheld.

              29.3 From time to time governmental and/or regulatory agencies may
request disclosure of the Contract or Contract-related information from either
Party or both Parties and if such is the case either Party or both Parties may
consent to such disclosure provided, that (i) the requestor(s) be notified by
the disclosing Party that the information being released is confidential, and
that (ii) the disclosing Party inform the other Party, in writing, as to the
nature of the information disclosed and to whom disclosed.

              30.   MULTIPLE ORIGINALS

              This Contract is executed in two counterparts, each of which shall
be deemed an original.

                                       45

                                   SIGNATURES

     IN WITNESS WHEREOF, the Parties hereto have executed this Contract this
13th of June, 1984.

                       SOUTHERN CALIFORNIA EDISON COMPANY

                       By  /s/ Edward A. Myers, Jr.
                          --------------------------------------
                          Name   Edward A. Myers, Jr.
                              ----------------------------------
                          Title  Vice President
                               ---------------------------------

                       ORMAT SYSTEMS INC.

                       By  /s/ Barbara M. Christopher
                          --------------------------------------
                          Name   Barbara M. Christopher
                              ----------------------------------
                          Title  Vice President
                               ---------------------------------

                                       46Exhibit 10.3.4

                       POWER PURCHASE AND SALES AGREEMENT

                                     BETWEEN

                               CHEVRON U.S.A. INC.

                                       AND

                       SOUTHERN CALIFORNIA EDISON COMPANY

                                TABLE OF CONTENTS
                                -----------------

 SECTION    TITLE                                                          PAGE
 -------    -----                                                          ----
 1          PARTIES                                                          1

 2          RECITALS                                                         1

 3          DEFINITIONS                                                      1

 4          TERM AND TERMINATION -- Modified by Amendment 1                  7

 5          CURTAILMENT                                                     11

 6          DESIGN AND CONSTRUCTION OF THE PROJECT                          11

 7          OPERATION OF THE PROJECT                                        13

 8          SALE OF THE PROJECT                                             17

 9          ABANDONMENT                                                     19

 10         DISCLAIMER                                                      20

 11         METERING                                                        21

 12         AVAILABILITY                                                    23

 13         POWER PURCHASE AND SALE                                         23

 14         PAYMENTS FOR ENERGY - Replaced by Amendment 1                   27

 15         PAYMENTS FOR CAPACITY - Replaced by Amendment 1                 33

 16         TAXES                                                           43

 17         LIABILITY                                                       44

 18         INSURANCE                                                       46

 19         REGULATORY AUTHORITY                                            48

 20         DISPUTES                                                        48

 21         NOTICES                                                         49

 22         NON-DEDICATION OF FACILITIES                                    50

 23         PREVIOUS COMMUNICATIONS                                         50

 24         NON-WAIVER                                                      50

 25         SUCCESSORS & ASSIGNS                                            51

 26         ASSIGNMENT                                                      51

 27         NO THIRD PARTY BENEFICIARIES                                    53

 28         EFFECT OF SECTION HEADINGS                                      53

 29         GOVERNING LAW                                                   53

 30         CONFIDENTIALITY                                                 53

 31         UNCONTROLLABLE FORCES                                           54

 32         PUBLICITY                                                       56

 33         WATER                                                           56

 34         TRANSMISSION COST - Replaced by Amendment 1                     57

 35         RECORDS AND AUDITS                                              59

 36         CONDITIONS PRECEDENT                                            61

 37         AGREEMENT AND SIGNATURES                                        62

     1. PARTIES

         The Parties to this Agreement are Chevron U.S.A., Inc. a Delaware
corporation, hereinafter referred to as "Seller", and Southern California Edison
Company, a California corporation, hereinafter referred to as "Edison;"
individually, "Party," and collectively, "Parties."

     2. RECITALS

         2.1 Seller is willing to construct and operate an electrical generating
facility with a nameplate capacity rating of 52,000 kW (47,000 kW Net) located
at Heber, California, and sell the capacity and associated net energy to Edison.

         2.2 Edison is willing to purchase from the Seller, the Capacity made
available and all Net Energy delivered to Edison at the Point of Interconnection
on the terms and conditions set forth herein.

     3. DEFINITIONS

         When used with initial capitalizations, whether in the singular on in
the plural, the following terms shall have the following meanings:

         3.1 Adjusted Capacity Price: The capacity purchase price, expressed in
$/kw/year, in the Capacity Payment Schedule for the period beginning on the Date
of Firm Operation and ending on the date of termination of this Agreement or
reduction in Capacity.

         3.2 Agreement: This Power Purchase and Sales Agreement as it may be
amended from time to time.

                                       1

         3.3 Avoided Operating Cost: Edison's incremental cost of electric
energy, that but for this Agreement, Edison would have generated from sources of
electric energy within the Edison electric system. In the event any federal or
state legislation, future Commission orders, rulings or guidelines are in
conflict with the definition contained in this Section 3.3, this definition
shall take precedence over such federal or state legislation, Commission orders,
rulings or guidelines.

         3.4 Capacity Payment Schedule: Edison's published Capacity Payment
Schedule as authorized by the Commission and in effect at the time of execution
of this Agreement.

         3.5 Commission: The Public Utilities Commission of the State of
California.

         3.6 Capacity: That portion of the Project's electric power producing
capability (initially 47,000 KW) which is dedicated to Edison and made available
to Edison at the Point of Interconnection.

         3.7 Capacity Price: The capacity purchase price, expressed in
$/kW/year, in the Capacity Payment Schedule for the Contract Term and Date of
Firm Operation.

         3.8 Contract Term: The term of this Agreement shall be thirty (30)
years beginning on the Date of Firm Operation.

         3.9 Control: To regulate the electrical output of the Project.

         3.10 Current Capacity Price: The capacity price, expressed in
$/kW/year, in the Capacity Payment Schedule in effect at the time Edison
receives a termination of this Agreement or reduction in Capacity notice for a
term equal to the number of years from

                                       2

the date of termination of this Agreement or reduction in Capacity to the end of
the Contract Term.

         3.11 Date of Firm Operation: The date established by the Operating
Representatives on which the Project is determined to be a reliable source of
generation as determined by a seventy-two (72) hour continuous demonstration
test at 80% of the capacity rating (47,000 KW).

         3.12 Edison Electric System Integrity: Operation of the Edison electric
system in a manner which minimizes unreasonable risk of injury to persons and/or
damage to property and enables Edison to provide safe, adequate and reliable
electric service.

         3.13 Emergency: A condition or situation which in Edison's sole
judgment affects Edison's ability to maintain Edison Electric System Integrity.

         3.14 Forced Outage: Any unscheduled outage on either the Edison
electric system or the Project which results in a complete or partial
curtailment in either the generation of Net Energy or the acceptance of Net
Energy from the Project.

         3.15 Generating Facilities: All of Seller's Generators and all
protective and other associated equipment and improvements necessary for the
Project to produce electrical energy, excluding associated land, land rights,
geothermal leases, or interests in land.

         3.16 Generator: The generator(s) and associated prime mover(s), which
are a part of the Generating Facilities.

                                       3

         3.17 Interconnecting Utility: The electric utility or any other utility
that is directly connected with the Project and which receives delivery of Net
Energy from the Project.

         3.18 Interconnection Facilities: The electrical interconnection
facilities furnished, at no cost to Edison, by Seller, or by the Interconnecting
Utility on Seller's behalf, which is appurtenant to, and/or incidental to, the
Project. The Interconnection Facilities shall include, but are not limited to,
transmission lines and/or distribution lines between the Project and
transmission lines and/or distribution lines of the Interconnecting Utility,
relays, power circuit breakers, metering devices, telemetering devices, and
other control and protective devices specified by the Interconnecting Utility as
necessary for operation of the Project in parallel with the Interconnecting
Utility's electric system.

         3.19 Net Energy: Kilowatthours generated by the Project which are
purchased by Edison at the Point of Interconnection pursuant to this Agreement.

         3.20 Operate: To provide the engineering, purchasing, repair,
supervision, training, inspection, testing, protection, operation, use,
management, replacement, retirement, reconstruction, and maintenance of, and for
the Generating Facility in accordance with applicable utility standards and good
engineering practices.

         3.21 Operating Representatives: Individual(s) appointed by each Party
to secure effective cooperation and interchange of information between the
Parties in connection with this Agreement.

                                       4

         3.22 Peak Months: Those months during which the annual system peak
demand of the Edison electric system may occur. Currently, those months are
June, July, August and September. Such designation is subject to change upon
written notice consistent with Commission guidelines.

         3.23 Point of Interconnection: The point where the transfer of Net
Energy from Seller to Edison occurs.

         3.24 Project: The Generating Facilities, Interconnection Facilities,
the site for the Generating Facilities, and metering equipment necessary to
permit the Generator to deliver Net Energy and make Capacity available to Edison
at the Point of Interconnection.

         3.25 Qualifying Facility: A Small Power Production Facility as defined
in Title 18, Code of Federal Regulations Section 292.201 through 292.207 or a
geothermal power producer under California Public Utilities Code Section 2801
and following.

         3.26 Renewable Resources: Wind parks, small hydroelectric, solar and
geothermal resources which produce electric power.

         3.27 Summer Period: The Summer Period as defined in Tariff Schedule No.
TOU-8 now in effect or as may hereafter be authorized by the Commission to be
revised.

         3.28 Tariff Schedule No. TOU-8: Edison's time-of-use energy tariff for
electric loads of 500 kW or more as now in effect or as may hereafter be revised
as authorized by the Commission.

                                       5

         3.29 Winter Period: The Winter Period as defined in Tariff Schedule No.
TOU-8 now in effect or as may hereafter be authorized by the Commission to be
revised.

     4. TERM AND TERMINATION

         4.1 This Agreement shall become effective upon execution and remain in
effect for the Contract Term (30 years from Date of Firm Operation) unless
sooner terminated as provided herein.

         4.2 This Agreement shall terminate if the Date of Firm Operation does
not occur by December 31, 1987. In the event the Date of Firm Operation is
delayed due to an uncontrollable force, such date shall be extended for the
period of such delay, not to exceed one (1) year.

         4.3 This Section 4.3 shall apply if this Agreement is terminated or
Capacity is reduced or terminated prior to the expiration of the Contract Term.
The Parties agree that the amount Edison pays Seller for Capacity is based on
the agreed value of Seller's performance of its obligations to provide Capacity
during the full Contract Term.

         4.3.1 The Parties agree that the refund and payments provided in
     Sections 4.4 and 4.5 represent a fair compensation for the reasonable
     losses that would result from termination of this Agreement or reduction in
     Capacity, and shall represent Edison's sole and exclusive remedy resulting
     from such termination of this Agreement or reduction in Capacity.

                                       6

         4.3.2 Edison shall provide Seller invoices for all amounts due Edison
     pursuant to this Section. Such amounts shall be due on presentation and
     paid within sixty (60) days of the invoice date.

         4.3.3 If Seller does not make payments as specified in Section 4.3.2,
     Edison shall have the right to offset any amounts Seller owes Edison
     against any amounts Edison owes Seller or declare that all sums then due
     Edison under this Agreement are immediately due and payable.

     4.4 Seller may terminate this Agreement or reduce Capacity, provided that
Seller gives Edison (i) 12 months prior written notice for the reduction of all
or part of the first 25,000 KW of Capacity and (ii) 36 months prior written
notice for the termination of this Agreement or any reduction to Capacity which
results in a total aggregate reduction in Capacity in excess of 25,000 KW. [See
Amendment 1, Page 3 of Exhibit 10.3.5]

         4.4.1 Upon termination of this Agreement or reduction in Capacity,
     Seller shall pay Edison, for the amount of Capacity reduction, an amount
     equal to the difference between (i) the total Capacity payments paid by
     Edison up to and including the date of receipt of notice and (ii) Capacity
     payments which Edison would have paid Seller for the period of Seller's
     actual performance at the Adjusted Capacity Price with interest compounded
     monthly at the current published Federal Reserve Board three (3) months
     prime commercial paper rate up to the date of the termination of this
     Agreement or reduction in Capacity.

                                       7

         4.4.2 From the date of receipt of a termination or reduction notice to
     the date of termination of the Agreement or reduction in Capacity, Edison
     shall pay Seller until the effective date of such termination or reduction
     at the Adjusted Capacity Price for the amount of Capacity reduced or
     terminated by said notice.

         4.4.3 Edison shall pay Seller for the amount of Capacity not
     terminated, if any, at the Capacity Price.

         4.5 If Seller terminates this Agreement or reduces the Capacity without
providing the notice specified in Section 4.4, the provisions of Section 4.4
shall apply, and additionally Seller shall pay Edison an amount equal to the
product of: (i) the amount of Capacity reduced or terminated times (ii) the
difference between the Current Capacity Price and the Capacity Price times (iii)
the period in years and fractions thereof (not less than one year) that the
Seller was deficient in providing notice pursuant to Section 4.4. If the Current
Capacity Price is less than the Capacity Price, no payment under this Section
4.5 shall be required.

         4.6 In the event this Agreement is terminated and Capacity is
immediately made available to Edison under the terms of a new agreement, the
Seller's payments due Edison, pursuant to Sections 4.4 and 4.5 herein, may be
repaid over the first eight (8) years of the new agreement term at the Seller's
option. The unpaid balance of the Seller's payments shall draw interest monthly
at an annual rate equal to the current published Bank of America prime
commercial rate plus 1%.

                                       8

     5. CURTAILMENT

         Edison may interrupt or reduce the acceptance of Net Energy from the
Project if such an interruption or reduction is required (i) to allow Edison to
perform scheduled maintenance, tests, or repairs on the Edison electric system
as required, in Edison's sole judgement, to maintain Edison Electric System
Integrity or (ii) during an Emergency or Forced Outage on the Edison electric
system when acceptance of Net Energy from the Project in Edison's sole judgment,
would jeopardize Edison Electric System Integrity. Upon such Interruptions or
reductions of the acceptance of Net Energy from the Project, Edison shall
continue to make capacity payments pursuant to Sections 15.7.2 and 15.7.3. Each
Party shall use its best efforts to correct, within a reasonable period, the
conditions on its system or in its facilities necessitating such interruption or
reduction of the acceptance of Net Energy from the Project. Such interruption or
reduction shall be limited to the period of time such a condition exists.

6. DESIGN AND CONSTRUCTION OF THE PROJECT

         6.1 Seller, at no cost to Edison, shall design, engineer, procure,
construct and test the Project in accordance with applicable utility standards
and good engineering practices

         6.2 Seller, at no cost to Edison, shall design, engineer, procure,
construct and test the Interconnection Facilities in accordance with applicable
utility standards and good engineering practices and the rules and regulations
of the Interconnecting Utility.

                                       9

         6.3 Except to the extent as previously obtained by Edison pursuant to
the agreement between Edison and Chevron in the Contract for the Engineering and
Construction of Heber Geothermal Generating Plant No. 1, executed on February 4,
1982 (E&C Contract), Seller, at no cost to Edison, shall acquire all permits and
approvals, and complete, or have completed, all environmental impact studies
necessary for the construction, operation, and maintenance of the Project.

         6.4 Edison shall have the right to review the construction schedule and
to monitor the construction, start-up, operation and maintenance of the Project.
Seller shall notify Edison as far in advance of the Date of Firm Operation as
reasonably possible, of changes in the construction schedule which may affect
the Date of Firm Operation. Edison shall have the right to review technical data
and technical records of the operation of the Project. Edison agrees not to
interfere with the Seller's operations, and agrees to adhere to Seller's work
rules and operating regulations. All information or data received by Edison
under this Section 6 shall be treated in accordance with Section 30.

         6.5 Seller, at no cost to Edison, shall make modifications to the
Interconnecting Facilities as required to maintain Edison Electric System
Integrity so that Edison can continue to accept Net Energy from the Project.

7. OPERATION OF THE PROJECT

         7.1 Seller shall Operate, Control and maintain the Project in
accordance with applicable utility standards and good engineering practices and
shall produce the maximum electrical output from the Project consistent with
such standards and practices.

                                       10

         7.2 Each Party shall keep the other Party's Operating Representative
informed regarding the operating schedule of their respective facilities which
affect the other Party's operations hereunder, including any reduction in
Capacity availability. Each Party shall use its best efforts to provide the
other Party with reasonable advance notice regarding scheduled outages of its
facilities, including any reduction in Capacity availability as follows, unless
otherwise agreed to by the Parties:

     Scheduled Outage                                        Advance Notice
     Expected Duration                                         Required
     -----------------                                       --------------

     Less than one day                                           24 Hours

     One day or more (except major overhaul)                     1 Week

     Major overhaul                                              6 Months

         7.3 The Operating Representatives shall notify each other by telephone
regarding outage dates and durations and shall use their best efforts to
coordinate the schedule of such outages as to facilitate the maximum output of
the Project.

         7.4 Neither Seller nor Edison shall schedule major overhauls during
Peak Months and shall make reasonable efforts to avoid scheduling routine
maintenance during the Peak Months. Seller's and Edison's outages for scheduled
maintenance shall not exceed an aggregate of 30 peak hours during the entire
period encompassed by the Peak Months per year.

         7.5 Seller shall maintain an operating log at Seller's Generating
Facility with records of real and reactive power production, changes in
operating status, outages,

                                       11

protective apparatus operations and any unusual conditions found during
inspections. Seller shall also maintain records applicable to the Generating
Facility, including records regarding the electrical characteristics of the
Generator and settings or adjustments of the Generator control equipment and
protective devices. Seller shall, under provisions of Section 30 herein, make
such information available to Edison upon request and provide copies of such
logs and records, if requested, to Edison within thirty (30) days of Edison's
request.

         7.6 Seller shall use reasonable efforts to notify Edison at least 14
calendar days prior to initial energizing of the Point of Interconnection and
initial parallel operation of the Project with the Edison electric system.
Edison shall have the right to have a representative present at such times.

         7.7 Seller shall use reasonable efforts to obtain Qualifying Facility
status for the Project prior to the Date of Firm Operation and maintain such
status during the term of this Agreement. If Seller fails to maintain Qualifying
Facility status, Seller, at its sole discretion, may elect to (i) suspend the
deliveries of Net Energy until such time the Qualified Facility status is
reestablished, subject to the provisions of Sections 9 and 15 or (ii) continue
the delivery of Net Energy and shall hold Edison harmless from any and all
liability, loss, damage, claim, action, cause of action, cost, charge or expense
resulting from such loss of Qualifying Facility status.

         7.8 Seller and Edison, as applicable, shall obtain and maintain
necessary government authorization(s) and permit(s). The Seller or Edison shall
hold the other

                                       12

party harmless from any and all liability, loss, damage, claim, action, cause of
action cost, charge or expense resulting from the failure to obtain or maintain
the necessary government authorization(s) and permit(s). Seller may elect to
suspend the delivery of Net Energy until all necessary government
authorization(s) and permit(s) are obtained or maintained by the Seller subject
to Sections 9 and 15.

         7.9 At Edison's request, Seller shall make all reasonable efforts to
deliver Net Energy at an average rate of delivery at least equal to the Capacity
during periods of Emergency. If the Seller has previously scheduled an outage
coincident with an Emergency, Seller shall make all reasonable efforts to
reschedule the outage. Edison shall waive the notification specified in Section
7.2 if Seller reschedules an outage.

8. SALE OF THE PROJECT

         8.1 If Seller offers to sell its interest in the Project or relinquish
its interest under any lease of the Project, Seller shall promptly offer to
Edison, or any Edison subsidiary, the right to be substituted for Seller under
the lease of the Project or the right to purchase Seller's interest in the
Project. Edison shall have up to 60 days following any such offer to accept
Seller's offer or otherwise reach agreement with Seller.

         8.2 If the Parties are unable to reach a satisfactory agreement as
specified in Section 8.1, and Seller offers to Sell its interest in the Project
to any third party, Edison, or any Edison subsidiary, shall have the right for
30 days following each offer to agree to purchase Seller's interest in the
Project under the same terms and conditions, if such terms and conditions are
better to Edison than those offered in Section 8.1 herein. Any

                                       13

offers to sell made more than two years after Edison's failure to accept a
previous offer to sell, under Section 8.1, shall again be subject to the terms
of Section 8.1 and 8.2.

         8.3 Seller shall have the right to require Edison to purchase the
Project if the average cost of electric energy and capacity to Edison based on
the purchase price for the Project, and a projected price for geothermal heat
would result in a cost to Edison of electric energy and capacity delivered to
Edison's electric system in the aggregate below avoided costs for a consecutive
three hundred sixty-five day period which is reasonably representative of a
longer term. Such a purchase of the Project by Edison shall be subject to prior
regulatory approval (e.g. Commission Certificate of Public Convenience and
Necessity and rate base treatment of the investment) as required in Edison's
sole judgment, and subject to prior negotiation and execution of contracts
between Edison and Seller for the purchase of the Project and geothermal heat
for the Project consistent with such objective.

         8.4 If the Project is sold to a third party and said third party does
not assume the obligations of this Agreement, as specified in Section 26, then
this Agreement shall be considered terminated and the provisions set forth in
Sections 4.4 and 4.5 shall apply.

         8.5 If the Seller offers to sell the Project to Edison, or any Edison
subsidiary, under the provisions of Section 8, then Edison, or any Edison
subsidiary, shall establish a value of the Project to Edison. When determining
the value of the Project, Edison shall take into consideration any and all
monies due Edison under the terms of this Agreement in event of a termination.

                                       14

9. ABANDONMENT

         9.1 The Project shall be deemed abandoned if Seller terminates
operation of the Project with the intent that such termination be permanent.
Such intent shall be presumed by either Seller's written notice to Edison of
such intent or operation of the Project so that no Energy is generated therefrom
for 730 consecutive days during any period after the Date of Firm Operation,
unless otherwise agreed to in writing by the Parties. If the Project is
prevented from generating energy due to an uncontrollable force, then such
period shall be extended for the duration of the uncontrollable force, not to
exceed one (1) year.

         9.2 If Seller abandons the Project during the term of this Agreement,
Edison, or any Edison subsidiary shall have the right to substitute itself for
Seller under the Seller's lease arrangement with its lender or in the event the
Project is to be sold subsequent to such abandonment, Edison shall have the
right to purchase the Seller's interest in the Project under the terms of
Section 8.1 and 8.2.

         9.3 If Seller abandons the Project, this Agreement may be terminated
and the provisions of Sections 4.4 and 4.5, as applicable, will control unless
otherwise provided herein.

10. DISCLAIMER

         Any review by Edison of the design, engineering, construction,
operation, control, or maintenance of the Project is solely for the information
of Edison. By making such review, Edison makes no representation as to the
economic or technical feasibility,

                                       15

operational capability, or reliability of the Project. Seller shall in no way
represent to any third party that any such review by Edison of the Project ,
including but not limited to, any review of the design, engineering,
construction, operation, or maintenance of the Project by Edison is a
representation by Edison as to the economic or technical feasibility,
operational capability, or reliability of the Project. Seller is solely
responsible for economic feasibility, technical feasibility, operational
capability or reliability of the Project. Edison shall not be liable to Seller
for, and Seller shall, at its cost, defend, indemnify and hold harmless Edison,
its directors, officers, employees, agents, assigns and successors from and
against any loss, damage, claim, action, cause of action, cost, charge or
expense arising from any contrary representation concerning the effect of
Edison's review of the design, engineering, construction, operation or
maintenance of the Project.

11. METERING

         11.1 Seller shall install or shall cause the Interconnecting Utility to
install and maintain metering equipment as specified and provided by the
Interconnecting Utility at the Point of Interconnection, pursuant to an
interconnection agreement to be entered into between Seller and the
Interconnecting Utility, to allow monitoring by the Parties and the
Interconnecting Utility and to record and measure kilowatthours and time. Edison
shall not be liable or responsible for any costs of acquisition, installation,
ownership or maintenance of such metering equipment, including costs incurred by
Seller for inspecting and calibrating such equipment. This metering equipment
shall be utilized for

                                       16

the measurement of Net Energy and Capacity in order to determine Edison's
payments to Seller pursuant to this Agreement.

         11.2 Edison shall install, as required by Edison Electric System
Integrity, at Seller's cost, generation telemetering equipment to monitor the
Project's net generation. Seller shall install as required by Edison Electric
System Integrity in order that Edison can accept Net Energy from the Project,
additional meters at the Project to enable Seller to make daily telephone
reports in the event telemetering equipment is inoperative. Seller shall bear
all costs of additional meter equipment, installation, ownership and
administration and all costs for inspecting and testing such equipment.

         11.3 The Parties shall seal all meters used to determine billings
hereunder. The seals shall be broken only when the meters are to be inspected,
calibrated or adjusted. Edison shall, at Seller's cost, inspect and calibrate,
or shall request that the Interconnecting Utility inspect and calibrate, all
meters upon their installation and annually thereafter. If requested to do so by
Seller, or if at any reading, the metering inaccuracy exceeds 2%, the meters
shall be calibrated promptly. Each Party shall give reasonable notice, both oral
and written, to the other Party, of at least five (5) working days of when any
inspection or calibration is to take place. The other Party may have
representatives present at the calibration or inspection. If metering equipment
inaccuracy exceeds 2%, the Operating Representatives shall estimate and agree
upon the correct amount of Net Energy delivered during the period of inaccuracy.

                                       17

         11.4 Each Party shall within ten (10) days after written notice to the
other Party have the right of access during regular business hours to all
metering and billing records relevant to the purchase of Net Energy under this
Agreement.

12. AVAILABILITY

         12.1 Seller shall make all reasonable efforts to limit Project outages.

         12.2 If Seller fails to meet the performance requirements specified in
Section 15, Edison shall have the right to require the Seller to demonstrate the
ability of the Project to generate Capacity once a year and to observe said
demonstration. The Seller shall, at its expense, conduct said demonstration at a
time and under procedures mutually agreed upon by the Parties.

     13. POWER PURCHASE AND SALE

         13.1 Seller hereby agrees to sell to Edison, and Edison hereby agrees
to accept and purchase from Seller, all Net Energy delivered by Seller to Edison
hereunder at the Point of Interconnection regardless of economic dispatch or
hydro-spill consideration. Edison may interrupt or reduce such deliveries due to
scheduled or Forced Outages, Emergencies, and uncontrollable forces only. During
any such interruption or reduction, Edison shall continue to make capacity
payments to the Seller pursuant to Sections 15.7.2 and 15.7.3.

         13.1.1 Seller shall begin delivery of Net Energy on or before the Date
     of Firm Operation.

                                       18

         13.1.2 If at any time, Seller can physically deliver Net Energy to
     Edison while it is contesting the claimed jurisdiction of any entity which
     has not issued a license or other approval for the Project, Seller, at its
     sole discretion and risk, shall have the right to deliver Net Energy to
     Edison. Edison shall pay Seller for Net Energy pursuant to Section 14.
     However, unless and until all required licenses and approvals have been
     obtained, Seller may discontinue deliveries at any time, at no cost or
     liability to Seller.

         13.1.3 In the event there has been an interruption or reduction in the
     deliveries of Net Energy pursuant to Section 5 and during such period
     Seller makes deliveries, with notice to Edison, of Net Energy to the
     Interconnecting Utility which are subsequently delivered to Edison pursuant
     to schedules agreed upon by Edison and the Interconnecting Utility, Edison
     shall notify Seller of such scheduled deliveries within thirty (30)
     business days of such scheduled deliveries, Edison shall pay Seller for
     such Net Energy at the price applicable at the time of scheduled delivery
     to Edison. In the event of an interruption or reduction in the deliveries
     of Net Energy pursuant to Section 5 and the Interconnecting Utility is
     either unable or unwilling to accept such Net Energy, the Seller may sell
     such Net Energy to a third party. During any such sale of Net Energy to a
     third party, Edison shall continue to make capacity payments to the Seller
     pursuant to Sections 15.7.2 and 15.7.3.

                                       19

         13.2 Seller shall sell to Edison, and Edison shall purchase from
Seller, Capacity as specified in Section 2.1 or Capacity as adjusted pursuant to
Section 13.3.

         13.3 Seller may, with Edison's approval, which shall not be
unreasonably withheld, increase the amount of Capacity. Edison shall pay for
such additional Capacity at a rate equal to current Capacity Price for the
remaining Contract Term. Seller may reduce the amount of Capacity at any time by
giving written notice thereof to Edison pursuant to Section 4.4. Edison may
reduce the amount of Capacity as a result of demonstration tests or prior
performance. The amount by which Capacity is reduced shall be deemed a reduction
in Capacity pursuant to Section 4. Either Party may request the other Party to
agree in writing to a revised Capacity whenever it appears that Capacity has
changed.

         13.4 Monthly Payment

         13.4.1 Edison shall determine from monthly meter readings Net Energy
     and Capacity purchased by Edison during the periods specified in Tariff
     Schedule No. TOU-8 for the preceding monthly billing period, and calculate
     the amount due Seller. Edison shall use its best efforts to read the meter
     on a regular, monthly interval

         13.4.2 If a monthly payment period involves portions of different
     published Energy payment schedule periods, Edison shall prorate the monthly
     Energy payment on the basis of the percentage of days at each price.

                                       20

         13.4.3 Within 20 business days of each monthly meter reading, Edison
     shall mail a statement to Seller indicating the amount of Net Energy and
     Capacity purchased during the billing period and the amount to be paid.
     Edison shall prepare and mail a check to Seller within ten (10) business
     days of mailing of the statement.

     14. PAYMENTS FOR ENERGY

         14.1 Seller shall receive a monthly payment for Net Energy received and
accepted by Edison at the Point of Interconnection. Seller shall have the
option, to be exercised by the Seller prior to Date of Firm Operation, to elect
to sell Net Energy at a price based on the payment provisions described in
Section 14.2, 14.3 or 14.4.

         14.2 Edison's Standard Offer No. 2 for Firm Power Purchases (effective
date February 14, 1983).

         14.2.1 Seller shall receive monthly payments for Net Energy, based on
     Edison's Avoided Operating Cost, received by Edison during the on-peak,
     mid-peak and off-peak periods. These periods are defined and published in
     Edison Tariff Schedule No. TOU-8.

         14.2.2 Monthly payment for Net Energy shall be calculated as follows:

         Monthly Payment for Net Energy = A + B + C

         where:

         A = on-peak energy payment

         B = mid-peak energy payment

                                       21

         C = off-peak energy payment

         where, for each period:

         Period Energy Payment = (Avoided Operating Cost/KwH) x (Period Net
     Energy, KwH) x energy loss adjustment factor.*

         14.3 Edison's Standard Offer No. 5 for Firm Power Purchases. This
option is valid only if Standard Offer No. 5 is approved and implemented by the
Commission prior to the Date of Firm Operation.

         14.4 Net Energy Payment Option No. 3.

         14.4.1 For the first 15 years of the Contract Term, Seller shall
     receive monthly payments for Net Energy based on the pricing provisions
     specified in Section 14.4.2. For the second 15 years of the contract term,
     Seller shall receive monthly payments for Net Energy equal to 98% of
     Edison's full Avoided Operating Costs as specified in Section 14.2.

         14.4.2 For the first 15 years of the Contract Term, Seller shall
     receive monthly payments for Net Energy based on the higher of (i) Edison's
     full Avoided Operating Cost as specified in Section 14.2 or (ii) the floor
     price. The floor price payments shall be calculated as follows:

--------
*    The energy loss adjustment factor shall be one (1), subject to adjustment
     by Commission orders or rulings.

                                       22

         Monthly Floor Payment (floor price/kwh) x (Net Energy, kwh) x energy
     loss adjustment factor*

         where, the floor price is:

         Year                         Floor Price
         ----                         -----------

         1985                         4.6(cent)/kwh

         1986                         5.1

         1987                         5.4

         1988                         5.4

         1989                         5.9

         1990                         5.9

         1991                         5.9

         1992                         7.0

         1993                         7.5

         1994                         7.5

         1995                         8.0

         1996                         8.0

         1997                         8.5

--------

*    The energy loss adjustment factor shall be one (1), subject to adjustment
     by Commission orders or rulings.

                                       23

         1998                         8.5

         1999                         8.5

         14.4.3 If Seller elects the payment provision specified in Section
     14.4, then Edison shall pay for the transmission service costs, as
     specified in Section 34, which are incurred in delivering the Net Energy to
     the Point of Interconnection, for the first 5 years of the Contract Term
     and simultaneously enter an identical amount as a debit in the Payment
     Tracking Account specified Section 14.4.4.

         14.4.4 Payment Tracking Account

         14.4.4.1 Edison shall establish a Payment Tracking Account (PTA) to
     account for (i) transmission service costs described in Section 14.4.3 and
     (ii) the amount by which Edison's monthly payment for Net Energy to Seller
     exceeds the payment which would have been paid the Seller under Section
     14.2. These entries shall be considered debits in the PTA. Sums in the PTA
     will draw interest monthly at an annual rate equal to the current published
     Bank of America prime commercial rate plus 1%.

         14.4.4.2 The balance in the PTA, including accrued interest, shall not
     exceed $5,000,000.

               14.4.4.3 Whenever a balance exists in the PTA, the Seller shall
         repay the balance using credits in the form of reductions to Edison's
         monthly

                                       24

     payment for Net Energy to Seller. PTA credits shall include, but not be
     limited to the following:

         a.    When Edison's full Avoided Operating Cost exceeds the floor
               price, Edison shall make a monthly payment for Net Energy equal
               to one-half (1/2) of the sum of monthly payments calculated using
               Edison's full Avoided Operating Cost and the floor price. The
               difference between the monthly payment made in accordance with
               this Section 14.4.4.3 and the monthly payment pursuant to Section
               14.2 shall be credited against the PTA balance.

         b.    Seller shall at any time have the option of paying to Edison part
               or all of the existing balance in the PTA without incurring any
               penalties. To implement this each month, Seller shall notify
               Edison in writing within 20 business days after the monthly meter
               reading of its election to receive a reduced monthly payment for
               Net Energy and credit that reduction against the PTA balance.

         c.    If the PTA balance reaches the $5,000,000 limit, Edison's monthly
               payment for Net Energy to Seller shall be reduced by an amount
               which ensures the PTA balance does not exceed $5,000,000. At no
               time shall the credits to the PTA exceed the current balance.
               When the PTA balance is zero, the monthly

                                       25

               payment for Net Energy to the Seller shall be made pursuant to
               Section 14.4.2.

         14.4.4. If at the end of the first fifteen years the Contract Term a
     PTA balance remains, the said PTA balance shall be due and payable and paid
     within 60 days, including interest up to the date of payment.

15. PAYMENTS FOR CAPACITY

         15.1 If the Seller selects the net energy payment provisions in Section
14.3, then the Seller shall be paid for Capacity delivered pursuant to he
provision of Edison's Standard Offer No. 5 for Firm Power Purchases. This option
is valid only if Standard Offer No. 5 is approved and implemented by the
Commission prior to the Date of Firm Operation.

         15.2 If the Seller selects the net energy payment provisions in either
Section 14.2 or 14.4, then the Seller shall receive monthly payments for
Capacity pursuant to Section 15.3.

         15.3 Seller shall receive monthly payments for Capacity made available
at the Point of Interconnection. Seller shall have the option, to be exercised
prior to the Date of Firm Operation, to elect to sell the Capacity pursuant to
the payment provisions specified in Section 15.4 or 15.5.

         15.4 Payment Option 1 -- Performance Based on
Availability/Dispatchability

         15.4.1 Minimum Performance Requirement in Option 1 to receive full
     capacity payments.

                                       26

         15.4.1.1 The Generating Facility must be dispatchable to Edison upon
     request, and meet the following conditions:

               (i) The Generating Facility must be available during all on-peak
         hours of each Peak Month except during hours of allowable Forced Outage
         as specified in Section 15.4.1.3.

               (ii) The Generating Facility must be available for all other
         hours of the year except during hours of allowable maintenance as
         specified in Section 15.6 and during hours of allowable maintenance as
         specified in Section 15.4.1.3.

         15.4.1.2 The measure of availability shall be the performance during
     the hours that the Generating Facility is dispatched, ignoring energy
     produced in any hour in excess of the Capacity of the Generating Facility.
     Dispatching requests can only increase power production, and only up to
     Capacity.

         15.4.1.3 The Seller is allowed a 20% Forced Outage rate for the on-peak
     hours of each Peak Month, a 20% Forced 20% Outage rate for the mid- and
     off-peak hours of each Peak Month, and 20% Forced Outage rate for the hours
     of each non-Peak Month. Except during the Peak Months, Seller may
     accumulate and apply the 20% allowance for Forced Outage for any
     consecutive three month period.

         15.4.2 Payment Provision in Option 1

                                       27

         15.4.2.1 When the requirements of Section 15.4.1 are met, the monthly
     payment is:

         Monthly Capacity Payment =

         (Capacity Price) x (1/12) x (Capacity)

         15.4.2.2 When the requirements of Section 15.4.1 are not met, the
     monthly payment is:

         Monthly Capacity Payment*

         (Capacity Price) x (1/12)  x (Capacity)  x (Availability/.8)*

         15.4.3 Payments in excess of 100% of Capacity Price.

              15.4.3.1. Bonus During Peak Months

                    For a Peak Month, the Seller will receive a bonus if

                    1)  The performance requirements of Section 15.4.1 have
                        been met; and,

                    2)  The on-peak availability exceeds 85%.

              15.4.3.2  Bonus During Non-Peak Months

                    In a non-Peak Month, the Seller will receive a bonus if

--------
* (Availability/.8) cannot be greater than 1.0.

                                       28

                  1)  The performance requirements of Section 15.4.1 have been
                      met;

                  2)  The on-peak availability for each of the year's Peak Month
                      was at least 85%; and

                  3)  The on-peak availability exceeds 85%.

         15.4.3.3 Bonus Payment

                  For any eligible month, the bonus payment will be calculated
                    according to the fol1owing formula.

                  Monthly Bonus Payment = [(1.2 x on-peak availability) - 1.02]
                    x (1/12) Capacity Price x Capacity

                  Where:

                  Availability =

                  kWh Purchased by Edison
                  --------------------------------------------------------------
                  (Capacity) x (Hours dispatched - Allowable Maintenance Hours)

         15.4.3.4 Total monthly Capacity payment when a bonus is earned shall be
     the sum of the monthly Capacity payments specified in Section 15.4.2.1 and
     15.4.3.3.

         15.4.4 Only by mutual agreement can the kilowatthours used in the
     calculation of capacity payments specified in Section 15.4 be greater than
     a delivery rate equal to Capacity.

         15.5 Payment Option 2 -- Performance Based on Capacity Factor

                                       29

         15.5.1 Minimum performance Requirement in Option 2 to receive full
capacity payments.

         15.5.1.1 The Capacity shall be available for all of the on-peak hours
     as defined in Tariff Schedule No. TOU-8 in each of the Peak Months subject
     to a 20% allowance for Forced Outages for each month.

         15.5.1.2 There is no minimum performance requirement for the rest of
     the year.

         15.5.2 Payment Provision in Option 2.

               The monthly capacity payment shall be calculated as the sum of
         the on-peak, mid-peak, and off-peak capacity payments. Each capacity
         period payment is calculated as follows:

               Monthly Capacity Period Payment =

               (Capacity Price) x (Conversion to Monthly Payment) x (Capacity)
         x (Period Performance Factor)

               Where:

               Period Performance Factor =

               kWh Purchased by Edison
          -------------------------------------------------------------
          0.8 x (Capacity) x (Period Hrs. - Allowable Maintenance Hrs.)

               The Period Performance Factor cannot exceed

               1. When the allowable maintenance hours equals the period hours,
         the period performance factor shall equal 1.0.

                                       30

     Conversion to Monthly Payments: The following factors convert Capacity
Price to monthly payments by time period of delivery. These conversion factors
will be subject to periodic change as approved by the Commission.

                                         Summer Period     Winter Period
                                         -------------     -------------

                  On-peak                 .13125                 .02094

                  Mid-peak                .00267                 .01054

                  Off-peak                .00000                 .00127

                  15.5.3  Payments in Excess of 100% of Capacity Price

                        15.5.3.1  Bonus During Peak Months

                        For a Peak Month, the Seller will receive a bonus if

                        1)  The Performance Requirements of Section 15.5.1 have
                            been met;

                            and

                        2)  The on-peak capacity factor exceeds 85%.

                        15.5.3.2  Bonus During Non-Peak Months

                        1)  The performance requirements of Section 15.5.1 have
                            been met;

                        2)  The on-peak capacity factor for each of the year's
                            Peak Months was at least 85%;

                            and

                        3)  The on-peak capacity factor exceeds 85%.

                        15.5.3.3  Bonus Payment

                  For any eligible month, the bonus payment is the following:

                  Bonus Payment =

                                       31

                  [(1.2 x on-peak capacity factor) - 1.02]

                  x Capacity Price

                  x (1/12)

                  x Capacity

     Where:

                  On-peak Capacity Factor =

                  kWh Purchased by Edison
         -------------------------------------------------------
         (Capacity) x (Period Hrs. - Allowable Maintenance Hrs.)

                        15.5.3.4 The monthly capacity payment when a bonus is
               earned shall be the sum of the monthly capacity payment (Section
               15.5.2) and the monthly bonus payment (Section 15.5.3.3).

                  15.5.4 Only by mutual agreement can the kilowatthours used in
         the calculation of capacity payments specified in Section 15.5 be
         greater than a delivery rate equal to Capacity.

         15.6  Scheduled Maintenance Allowances

         The a1lowance for scheduled maintenance is as follows:

                  15.6.1 Outage periods for scheduled maintenance shall not
         exceed 840 hours (35 days) in any 12-month period. This allowance may
         be used in increments of an hour or longer on a consecutive or
         non-consecutive basis.

                  15.6.2 Seller may accumulate unused maintenance hours on a
         year-to-year basis up to a maximum of 1,080 hours (45 days). This
         accrued time must be

                                       32

         used only for major overhauls, as such major overhauls are reasonably
         defined by the Seller.

         15.7   Failure to Meet Minimum Performance Requirements

                  15.7.1 Except when caused by uncontrollable forces, if Seller
         fails to meet the minimum performance requirements as set forth in
         Sections 15.4.1 and 15.5.1. The following shall apply:

                        15.7.1.1 Seller may be placed on probation for a period
               not to exceed 15 months or as otherwise agreed to by the Parties.
               During this period, the monthly capacity payment will be based on
               the level of Capacity actually made available as calculated in
               Sections 15.4.2.2 and 15.5.2, as app1icable.

                        15.7.1.2 If Seller meets or demonstrates to Edison
               pursuant to Section 12.2 that it can meet its minimum requirement
               during the probationary period, Edison shall reinstate regular
               capacity payments.

                        15.7.1.3 If Seller fails to meet its minimum
               requirements during the probationary period, Edison may derate
               the Capacity to the greater of the Capacity actually made
               available when the minimum requirements stated in Sections 15.4.1
               and 15.5.1 were not met, or the Capacity at which Seller is
               reasonably likely to meet the minimum requirements. In either
               case, the quantity by which the Capacity is reduced shall be
               considered terminated without prescribed notice as provided in
               Section 4.4.

                                       33

                  15.7.2 If Seller is prevented from meeting the minimum
         performance requirement because of a schedule outage, a Forced Outage
         or an Emergency on the Edison electric system, Edison shall continue to
         make capacity payments to Seller. Under Option 2, the calculations of
         capacity payments will treat hours of Forced Outage and Emergency on
         the Edison system the same as scheduled maintenance outages.

                  15.7.3 If deliveries are interrupted or reduced because of
         uncontrollable forces, Edison shall continue to make capacity payments
         to Seller for 90 days from the occurrence of the uncontrolled force
         event. Under Option 2, the calculation of capacity payments will treat
         hours of interruption or reduction by reason of an uncontrollable
         force, the same as scheduled maintenance outages with reductions in
         Capacity treated on a pro rata basis.

16. TAXES: Seller shall pay ad valorem taxes and other taxes properly attributed
to the Project. If such taxes are assessed or levied against Edison, Seller
shall pay Edison the amount of such assessment or levy within thirty (30) days
of presentation of documentation thereof. The Parties shall provide information
concerning the Project to any requesting taxing authority.

17. LIABILITY

         17.1 As used in this Section 17, the word "liability"shall mean "all
liability, damages, costs, losses, claims, demands, actions, causes of action,
attorneys' fees and expenses, or any of them."

                                       34

         17.2 Seller shall defend at its own cost and indemnify and hold
harmless Edison, its officers, directors, employees, agents, contractors and
subcontractors from and against any and all liability resulting directly or
indirectly from or connected with the development and/or furnishing of Net
Energy by Seller as provided herein (including but not limited to such liability
arising from the death of or injury to an officer, director, agent or employee
of Seller or Edison or damage to property of Seller or Edison or of any officer,
director, agent or employee of Seller or Edison) to the extent caused by the
negligent acts of Seller.

         17.3 Edison shall defend at its own cost and indemnify and hold
harmless Seller, its officers, directors, employees, agents, contractors and
subcontractors from and against any and all liability resulting directly or
indirectly from or connected with the utilization of Net Energy by Edison as
provided herein (including but not limited to such liability arising from the
death or injury to an officer, director, agent or employee of Seller or Edison
or damage to property of Seller or Edison or of any officer, director, agent or
employee of Seller or Edison) to the extent caused by the negligent acts of
Edison.

         17.4 Seller shall defend at its own cost and indemnify and hold
harmless Edison, its officers, directors, employees, agents, contractors and
subcontractors from or connected with an infringement of a patent by Seller in
the performance or non-performance of this Agreement.

                                       35

         17.5 Edison shall defend at its own cost and indemnify and hold
harmless Seller, its officers, directors, employees, agents, contractors and
subcontractors from and against any and all liability resulting directly or
indirectly from or connnected with an infringement of a patent by Edison in the
performance or non-performance of this Agreement.

         17.6 Notwithstanding anything in this Agreement to the contrary, under
no circumstances, whether arising in contract, equity, tort (including
negligence) or otherwise, shall either Party hereto be responsible or liable to
the other for loss of profit, loss of operating time or loss of use or reduction
in the use of any equipment or facilities or any portion thereof, increased
expense of operation or maintenance, cost of replacement power, claims of
customers, third parties or for any special, indirect, incidental or
consequential damages.

18. INSURANCE

         18.1 During the term of this Agreement, Seller shall obtain and
maintain in force as hereinafter provided comprehensive general liability
insurance, including contractual liability coverage, with a combined single
limit of not less than $5,000,000 each occurrence. The insurance carrier or
carriers and form of policy shall be subject to review and approval by Edison.

         18.2 Prior to the date the Project is first operated in parallel with
the Edison electric system, Seller shall furnish to Edison: (i) a certificate of
insurance providing that such insurance shall not be terminated nor expire
except on thirty (30) days prior written

                                       36

notice to Edison, and (ii) an additional insured endorsement with respect to
such insurance in substantially the following form:

         "In consideration of the premium charged, Southern California Edison
         Company ("Edison") is named as additional insured with respect to all
         liabilities arising out of Seller's use and ownership of Seller's
         Generating Facility.

         "The inclusion of more than one insured under this policy shall not
         operate to impair the rights of one insured against another insured and
         the coverages afforded by this policy will apply as though separate
         policies had been issued to each insured. The inclusion of more than
         one insured will not, however, operate to increase the limit of the
         carrier's liability. Edison will not, by reason of its inclusion under
         this policy, incur liability to the insurance carrier for payment of
         premium for this policy.

         "Any other insurance carried by Edison which may be applicable shall be
         deemed excess insurance and Seller's insurance primary for all purposes
         despite any conflicting provisions in Seller's policy to the contrary."

         18.3 Seller shall maintain such insurance in effect for so long as
Seller's Generating Facility is operated in parallel with Edison's electric
system. If Seller fails to comply with the provisions of this Section 18, Seller
shall, at its own cost, defend, indemnify, and hold harmless Edison, its
directors, officers, employees, agents, assigns, and successors from and against
any and all liability, loss, damage, claim, action, cause of action, cost,
charge, or expense of any kind of nature including attorneys' fees and other
costs of litigation, resulting from death of, or injury to, any person or damage
to any property, including the personnel and property of Edison, to the extent
that Edison would have been protected had Seller complied with all of the
provisions of this Section 18.

                                       37

19. REGULATORY AUTHORITY

         Seller and Edison shall at all times conform to all applicable laws and
regulations.

20. DISPUTES

         20.1 Any dispute arising between the Parties relating to interpretation
of the provisions of this Agreement or to performance of the Parties hereunder,
other than matters which may not be settled without the consent of an involved
insurance company, shall be reduced to writing by the complaining party stating
the complaint and proposed solution and submitted to the other party's manager
responsible for the administration of this Agreement. Such manager's
interpretation and decision shall be incorporated into a written document
outlining his interpretation and decision and specifying that it is the final
decision of such manager. A copy of such document shall be furnished to the
complaining party within ten (10) days following the receipt of the complaining
party's written complaint.

         20.2 The decision of such manager pursuant to Section 20.1 shall be
final and conclusive from the date of receipt of such copy by the complaining
Party, unless, within a thirty (30) day period the complaining party furnishes a
written appeal to such manager delivered pursuant to Section 21. The Parties
shall hold a joint hearing within 15 days of receipt of such appeal. The Parties
shall each be afforded an opportunity to present evidence in support of their
respective positions at the hearing. One authorized representative of Seller and
one authorized representative of Edison and other necessary

                                       38

persons shall conduct such hearing. Pending final decision of a dispute
hereunder, the Parties shall proceed diligently with the performance of their
obligations under this Agreement

         20.3 The authorized representatives shall make their final decision
within 15 days of presentation of all evidence affecting the dispute and shall
reduce their decision to writing. The decision shall be final and conclusive.

         20.4 If the authorized representatives cannot reach a final decision
within the 15 day period, any remedies which are provided by law may be pursued.

21. NOTICES

         Except as otherwise specifically provided herein, any notice from one
Party to the other, shall be given in writing and shall be deemed to be given as
of the date the same is enclosed in a sealed envelope, addressed to the other by
certified first class mail, postage prepaid, and deposited in the United States
Mail. For the purposes of this Section 21, such notices shall be mailed to the
following respective addresses or to such others as may be hereafter designated
by either Party:

         Southern California Edison Company
         Post Office Box 800
         Rosemead, California  9177O
         Attention:  Secretary

                           Seller:     Chevron U.S.A. Inc.
                                       c/o Chevron Geothermal Company

                           Address:    P.O. Box 7147
                                       San Francisco, California 94119

                           Attention:  Manager, Geothermal Operations

                                       39

22. NON-DEDICATION OF FACILITIES

         Neither Party by this Agreement dedicates any part of its facilities
involved in this Project to the public or to the service provided under this
Agreement, and such service shall cease upon termination of this Agreement.

23. PREVIOUS COMMUNICATIONS

         This Agreement contains the entire agreement and understanding between
the Parties, their agents and employees as to the subject matter of this
Agreement, and merges and supersedes all prior agreements, commitments,
representations and discussions between the Parties. No Party shall be bound to
any other obligations, conditions, or representations with respect to the
subject matter of this Agreement.

24. NON-WAIVER

         None of the provisions of this Agreement shall be considered waived by
either Party except when such waiver is given in writing. The failure of either
Party to insist in any one or more instances upon strict performance of any of
the provisions of this Agreement or to take advantage of any of its rights
hereunder shall not be construed as a waiver of any such provisions or the
relinquishment of any such rights for the future, but the same shall continue
and remain in full force and effect.

25. SUCCESSORS & ASSIGNS

         This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Parties subject to the limitations on
assignments set forth in Section 26.

                                       40

26. ASSIGNMENT

         26.1 A Party may assign all or part of its interests under this
Agreement to an affiliate. An "Affiliate" shall mean a Party's parent, a Party's
subsidiary, or any company of which a Party's parent is a parent. A "parent"
shall mean a company which owns directly or indirectly more than 50% of the
shares entitled to vote in an election of directors of another company.

         26.2 Any assignment to a third party of all or any part of its interest
under this Agreement shall be subject to the prior written consent of the
non-assigning party. Consent shall not be unreasonably withheld. Any such
assignment shall be to an assignee that (a) is a financially responsible entity,
(b) is an experienced and prudent operating entity, and (c) has the rights,
title and interest necessary to perform the assigned obligations. In this regard
Seller intends to assign this Agreement to the Heber Geothermal Company (HGC)
and by execution of this Agreement, Edison hereby consents to this assignment
pursuant to this Section 26.2.

         26.3 Any assignment by Chevron of its interest in this Agreement shall
not relieve Chevron as the assigning Party from liability for the duties and
obligations of Seller under this Agreement, except to the extent such duties and
obligations are expressly assumed by HGC, a general partnership of Centennial
Geothermal, a wholly owned subsidiary of Centennial Energy, Inc. and Dravo
Energy, Inc., a wholly owned subsidiary of Dravo Corporation under the
assignment agreement between Chevron and HGC.

                                       41

         26.4 Whenever an assignment of a Party's interest in this Agreement is
made, the assigning Party's assignee shall expressly assume in writing the
duties and obligations of the assigning Party pursuant to this Agreement and,
within 30 days after any such assignment and assumption of duties and
obligations, the assigning Party shall furnish, or cause to be furnished, to the
other Party a true and correct copy of such assignment and assumption of duties
and obligations. Seller, or its assignee, may assign all or any part of its
interest under this Agreement to a financing institution to facilitate financing
for the project by Seller or its assignee.

27. NO THIRD PARTY BENEFICIARIES

         Except as otherwise specifically provided in this Agreement or under
separate agreements creating such rights, the Parties do not intend to create
rights in, or grant remedies to, any third party as a beneficiary of this
Agreement or of any duty, covenant, obligation or understanding established
under this Agreement.

28. EFFECT OF SECTION HEADINGS

         Section headings appearing in this Agreement are inserted for
convenience only, and shall not be construed as interpretations of text.

29. GOVERNING LAW

         This Agreement shall be interpreted, governed and construed under the
laws of the State of California or the United States as applicable as if
executed and to be performed wholly within the State of California.

                                       42

30. CONFIDENTIALITY

         30.1 Except as provided herein, the Parties shall hold all information
in this Agreement and all information related to or received pursuant to this
Agreement as proprietary and confidential.

         30.2 Neither Party shall disclose any part nor the whole of this
Agreement to any third party without the express prior written consent of the
other Party, such consent shall not be unreasonably withheld.

         30.3 From time to time governmental and/or regulatory agencies may
request disclosure of the Agreement or Agreement-related information from either
Party or both Parties and if such is the case either Party or both Parties may
consent to such disclosure provided, that (i) the requestor(s) be notified by
the disclosing Party that the information being released is confidential, and
that (ii) the disclosing Party inform the other Party, in writing, as to the
nature of the information disclosed and to whom disclosed.

31. UNCONTROLLABLE FORCES

         31.1 Neither Party shall be considered to be in default in the
performance of any of its obligations under this Agreement, other than an
existing obligation to pay money, when, and to the extent, failure of
performance shall be due to an uncontrollable force. The term "uncontrollable
force" means any cause beyond the control of the Party failing to perform,
including, but not limited to, flood, earthquake, storm, lightning, fire,
epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor or
material shortage, sabotage, restraint by court order or public authority, and
action or nonaction

                                       43

by, or inability to obtain and maintain the necessary authorizations or
approvals from, any governmental agency or authority, which by the exercise of
due diligence such Party could not reasonably have been expected to avoid and
which, by exercise of due diligence it has not overcome. Either Party rendered
unable to fulfill any of its obligations under this Agreement by reason of an
uncontrollable force shall give prompt written notice of such facts to the other
Party and shall exercise due diligence to remove such inability. Nothing
contained herein shall be construed so as to require a Party to settle any
strike or labor dispute in which it may be involved.

         31.2 The failure of the Commission to approve the pass through to
Edison's ratepayers of monies paid to Seller for Net Energy and Capacity under
this Agreement, subject to the limitations of Sections 7.7 and 7.8, shall not be
deemed to be an uncontrollable force.

         31.3 In the event the applicable provisions of this Section 31 are
invoked by Seller, Seller shall not be obligated to deliver Net Energy and Net
Capacity and may interrupt or reduce deliveries to Edison, and Edison shall not
be obligated to make any payments hereunder. In the event the applicable
provisions of this Section 31 are invoked by Edison, except as provided in
Section 15.7.3, Edison shall not be obligated to accept or pay for, and may
require Seller to interrupt or reduce, deliveries of Net Energy.

32. PUBLICITY

         Except as required for compliance with Commission rules and
regulations, Edison shall not make any press releases, statements or other
disclosures to the public

                                       44

regarding the construction, construction schedule, start-up, operation and
maintenance of the Project without the prior written consent of Seller.

33. WATER

         Edison has entered into a Water Supply Agreement with Imperial
Irrigation District (IID) dated December 22, 1981 which provides that IID will
permit Edison to take from the Daffodil Canal, Delivery No. 1, water sufficient
to satisfy the reasonable requirements of the Project. Pursuant to the E&C
Contract referred to in Section 6.3 herein, Edison is required to assign the
Water Supply Agreement to Seller. If for any reason whatsoever, Edison is unable
to assign such Water Supply Agreement to Seller, then Edison shall maintain such
Water Supply Agreement in effect and provide water to the Project in accordance
with its terms. In such event, the cost of water for the Project paid by Edison
shall be a credit against payments due Seller as calculated in accordance with
Section 13.4

34. TRANSMISSION COST

         34.1 Seller shall select the method for determining transmission
service costs specified in Sections 34.2 or 34.3. Seller shall make this
selection prior to the Date of Firm Operation.

         34.2 Edison, with Seller's assistance, shall seek to contract with
third parties in order to secure the most economic transmission path and service
costs for the delivery of Net Energy from the Project to the Point of
Interconnection at terms and conditions

                                       45

acceptable to Seller. Seller shall be responsible for all costs incurred in the
delivery of the Net Energy from the Project to the Point of Interconnection.

         34.3 For the first 5 years of the Contract Term, the Seller shall pay
for the transmission of the Net Energy from the Project to the Path of
Interconnection at a transmission service cost based on a method comparable to
the method which is in effect or will be negotiated for Edison's geothermal
facilities at Brawley and Salton Sea. The exact, mutually agreed upon
transmission service cost shall be established prior to the Date of Firm
Operation and may be adjusted periodically as necessary. The transmission
service cost shall consist of (i) a flat monthly service cost expressed in $ per
kilowatt per month and (ii) transmission losses expressed in % of Net Energy or
delivery to the Point of Interconnection. The Seller may elect this Section 34.3
subject to the following conditions:

         34.3.1 The date of initial delivery of Net Energy shall occur on or
     before August 1, 1985.

         34.3.2 Seller shall upgrade Edison's 115/92 kV interconnnection
     substation with the Interconnecting Utility by increasing its capacity by
     25,000 kW. Seller shall pay the capital cost of the upgrade and pay the
     monthly charges related to the upgrade facilities under the terms and
     conditions of Edison's Rule No. 2 H for added facilities. If the Seller is
     unable to use the upgraded facilities, at any time, then Edison shall have
     the option to use such facilities and reduce the Seller's monthly charges
     accordingly. The upgrade must be complete prior

                                       46

     to Date of Firm Operation. At the end of 5 years, the transmission service
     costs shall be handled under the provisions of Section 34.2, unless the
     Seller elects to continue to use the provisions specified in is Section
     34.3 after the first 5 years of the Contract Term absent the transmission
     service cost methodology contained in this Section 34.3. In the event of
     such election Section 34.4 shall not apply.

         34.4 If the Seller exercises the provisions specified in Section 34.3
then for said five (5) year period, the applicable portion of the
Interconnecting Utility electric system shall be considered part of the Edison
electric system but only to the extent that the capacity payment provisions
specified in Sections 15.7.2 and 15.7.3 apply.

35. RECORDS AND AUDITS

         35.1 Edison and Seller shall maintain true and correct records in
connection with this Agreement and all transactions related thereto and shall
retain all such records for at least 24 months after termination of this
Agreement.

         35.2 No director, employee or agent of either Party shall give or
receive any commission, fee, rebate, gift or entertainment of significant cost
or value in connection with this Agreement, on enter into any business
arrangement with any director, employee or agent of the other Party, except as a
representative of one of the Parties, without prior written notification thereof
to both Parties. Any representative(s) authorized by either Party may audit any
and all records of the other Party pertaining to the administration of this
Agreement for the sole purpose of determining whether there has been compliance
with this Section 35.2

                                       47

         35.3 Any representative(s) authorized by either party may from time to
time and at any time after the date of this Agreement until 24 months after its
termination make an audit of all records of the other Party in connection with
payments made on a cost reimbursement basis under this Agreement. Audit may also
cover procedures and controls with respect to such reimbursable costs. Upon
completion of the audit, the Parties shall pay each other any amounts shown due
by the audit. If the audited Party disagrees with the results of the audit, it
may have an independent audit conducted, at its expense, by a third party
acceptable to both Parties and pursuant to auditing instructions acceptable to
both Parties. The findings of the audit shall be binding upon both Parties.

36. CONDITIONS PRECEDENT

         This Agreement shall be effective upon execution of all the following
documents:

     36.1 1983 Geothermal Energy Contract between Chevron Geothermal Company of
California and Southern California Edison.

     36.2 Corporate Guarantee from Dravo Constructors, Inc. to Southern
California Edison for the repayment of the Payment Tracking Account pursuant to
Section 14.4.4.

     36.3 Geothermal Sales Agreement between Chevron Geothermal Company of
California and Heber Geothermal Company.

     36.4 Geothermal Energy Agreement between Chevron Geothermal Company of
California and Dravo Energy, Inc.

                                       48

     36.5 Assignment and Assumption Agreement between Chevron U.S.A., Inc. and
Heber Geothermal Company.

     36.6 The acceptance and execution of the final commitment letter from
General Electric Credit Corporation to Heber Geothermal Company.

     36.7 The approval of this Agreement by the Board of Directors or Management
Committee, as appropriate, of the following entities:

          36.7.1 Centennial Energy, Inc.

          36.7.2 Dravo Corporation

          36.7.3 General Electric Credit Corporation

37. AGREEMENT AND SIGNATURE

     This Agreement is executed in multiple counterparts, each of which shall be
deemed an original. The signatories hereto represent that they have been
appropriately authorized to enter into this Agreement on behalf of the Party for
whom they sign. This Agreement is hereby executed as of this 26th day of August,
1983.

                                       SOUTHERN CALIFORNIA EDISON COMPANY

                                       By /s/ Indecipherable
                                         ---------------------------------------
                                                  Vice President

                                       CHEVRON U.S.A., INC., represented by
                                       its agent, Chevron Resources Company

                                       49

                                       By /s/ Indecipherable
                                         ---------------------------------------

                                       Title       Vice President
                                            ------------------------------------

                                       50

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]