Document:

Exhibit 10.2

 

AMENDMENT NUMBER 16

TO THE ARIZONA NUCLEAR POWER PROJECT

PARTICIPATION AGREEMENT

 

1.                                      PARTIES:

 

The Parties to this Amendment Number 16 to the Arizona Nuclear Power Project Participation Agreement, hereinafter referred to as “Amendment Number 16,” are: ARIZONA PUBLIC SERVICE COMPANY, a corporation organized and existing under and by virtue of the laws of the State of Arizona, hereinafter referred to as “Arizona”; SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an agricultural improvement district organized and existing under and by virtue of the laws of the State of Arizona, hereinafter referred to as “Salt River Project”; SOUTHERN CALIFORNIA EDISON COMPANY, a corporation organized and existing under and by virtue of the laws of the State of California, hereinafter referred to as “Edison”; PUBLIC SERVICE COMPANY OF NEW MEXICO, a corporation organized and existing under and by virtue of the laws of the State of New Mexico, hereinafter referred to as “PNM”; EL PASO ELECTRIC COMPANY, a corporation organized and existing under and by virtue of the laws of the State of Texas, hereinafter referred to as “El Paso”; SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, a joint powers agency organized and existing under and by virtue of the laws of the State of California, doing business  in the State of Arizona as SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ASSOCIATION, hereinafter referred to as “SCPPA”; and DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES, a municipal corporation organized and existing under and by virtue of the laws of the State of California, hereinafter referred to as “LADWP”; all hereinafter individually referred to as “Party” and collectively as “Parties.”

 

2.                                      RECITALS:

 

2.1.                Arizona, Salt River Project, Edison, PNM, El Paso, SCPPA and LADWP are parties to a certain agreement entitled Arizona Nuclear Power Project Participation Agreement, dated as of August 23, 1973, as amended by: Amendment Number 1, dated as of January 1, 1974; Amendment Number 2, dated as of August 28,1975; Amendment Number 3, dated as of July 22, 1976; Amendment Number 4, dated as of December 15, 1977; Amendment Number 5, dated as of December 5, 1979; Amendment Number 6, effective as of October 16, 1981; Amendment Number 7, effective as of April 1, 1982; Amendment Number 8, executed as of September 12, 1983; Amendment Number 9, executed as of June 12, 1984 Amendment Number 10, executed as of November 21, 1985; Amendment Number 11, effective January 10, 1987; Amendment Number 12, effective August 5, 1988; Amendment Number 13, effective June 15, 1991; Amendment Number 14, effective June 20, 2000, retroactive to January 1, 1993; and Amendment Number 15, effective January 13, 2011, hereinafter, as so amended, collectively referred to as the “Participation Agreement.”

 

2.2.                On April 21, 2011, the NRC, by letter to Arizona, confirmed the issuance of Renewed Facility Operating License Nos. NPF-41 (Unit 1), NPF-51 (Unit 2), and NPF -74 (Unit 3) for Palo Verde Station (collectively, the “License Extensions”).

 

2.3.                Pursuant to the License Extensions, (i) Renewed Facility Operating License No. NPF-41 (Unit 1) expires at midnight on June 1, 2045; (ii) Renewed Facility Operating License No. NPF-51 (Unit 2) expires at midnight on April 24, 2046; and (iii) Renewed Facility Operating License No. NPF-74 (Unit 3) expires at midnight on November 25, 2047

 

 

(collectively, the “Extended License”).  The latest expiration date of the original licenses previously had been November 25, 2027.

 

2.4.                Pursuant to Section 35.7 of the Participation Agreement, the latest termination date of the Participation Agreement currently is December 31, 2027, which does not include the License Extensions.

 

2.5                   Section 8A.4.4 of the Participation Agreement currently requires each Participant to accumulate Termination Funds over “the remaining license term (as specified in the original license issued for each Generating Unit . . . .” (emphasis added)

 

2.6.                Arizona, PNM and El Paso (in Texas, not New Mexico) have already included in their cost of service the amounts for contributions to their decommissioning trust that reflect the Extended License (“60 Year Termination Funding Curves”), rather than the Original License (“40 Year Termination Funding Curves”), and collect from their respective ratepayers on that basis.

 

2.7                   The Termination Funding Committee currently uses the 40 Year Termination Funding Curves to measure compliance of the Participants with the termination funding requirements set forth in the Participation Agreement and the Termination Funding Committee Manual.  Therefore, the ability of Arizona, PNM and El Paso to meet their termination funding obligations is adversely impacted by the reduced recovery from their ratepayers under the 60 Year Termination Funding Curves, and their continuing obligation to maintain their Termination Funds at the higher levels required by the 40 Year Termination Funding Curves.

 

2.8                   On June 18, 2012, the Termination Funding Committee held its annual meeting to submit its Annual Funding Status Reports and to resolve the foregoing termination funding curve issues.  At the meeting, the Termination Funding Committee resolved, upon proper motion, that the 60 Year Termination Funding Curves were technically correct, and conditionally adopted the 60 Year Termination Funding Curves subject to the Administrative Committee’s extension of the Participation Agreement term.

 

2.9                   On October 19, 2012, the Administrative Committee unanimously voted to adopt this Amendment Number 16.

 

3.                                      AGREEMENT:

 

For and in consideration of the premises and the mutual obligations of and undertakings by the Parties as hereinafter provided in this Amendment Number 16 to the Participation Agreement, the Parties agree as set forth below.

 

4.                                      EFFECTIVE DATE:

 

This Amendment Number 16 shall become effective on the date that the Party which last in time executes this Amendment Number 16.  The amended termination funding curves that are associated with this Amendment Number 16 shall be applied retroactively to January 1, 2012.

 

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5.                                      DEFINED TERMS:

 

5.1.                The Capitalized and italicized words and phrases used in this Amendment Number 16 shall have the meanings ascribed to them in the Participation Agreement as amended by this Amendment Number 16.

 

5.2.                All references to a “Section” or “Sections” in this Amendment Number 16 shall mean a Section or Sections of the Participation Agreement unless the text expressly states otherwise.

 

6.                                      AMENDMENTS TO THE ARIZONA NUCLEAR POWER PROJECT MADE BY THIS AMENDMENT NUMBER 16:

 

6.1.                Amend Section 8A.4.4, by deleting the strikethrough text and substituting therefore the underlined text:

 

“Within six months after the date on which Amendment No. 13 shall become effective or such other date established by the Administrative Committee, the Termination Funding Committee shall establish criteria and standards, consistent with applicable law, including the rules and regulations of the NRC [including without limitation such discount factors, allowances for inflation, bases for estimating future net earnings on accumulations in the Termination Fund(s) of the Participants and other elements as may be appropriate to provide reasonable assurance that each Participant will accumulate in its Termination Fund(s) over the then-applicable remaining license term for each Generating Unit (as specified in the original license issued for each Generating Unit authorizing fuel load and low power operation of such unit) sufficient funds to pay such Participant’s share of the most current estimate of the Termination Costs of such unit)] that will be used by the committee to determine whether or not the periodic deposits made by each Participant in its Termination Fund(s) have been adequate and the accumulations in its Termination Funds will be adequate to meet the requirements of Section 8A.7.2.3 hereof and to comply with applicable laws. At least once every three years the Termination Funding Committee shall review such criteria and standards and make such adjustments thereto as are warranted by the circumstances then existing or as may be required by applicable law. Additionally, the Termination Funding Committee shall establish the format, content and time for submission of the funding status reports and certificates that Participants are required to submit pursuant to Section 8A.7.2.4 hereof.”

 

6.2.                Amend Section 35.7, by deleting the strikethrough text and substituting therefore the underlined text:

 

“This Participation Agreement shall terminate on the earlier of:  (i) the expiration date of the longest operating license period authorized by the NRC (or any governmental agency that is a successor to the NRC) for Palo Verde StationDecember 31, 2027, or (ii) the date on which all Generating Units shall have been permanently removed from service and all Termination Work in respect of all Generating/Terminated Units has been completed; provided, however, that . . .”

 

6.3.                            Except as amended by this Amendment Number 16, the remaining terms of the Participation Agreement shall remain in full force and effect.

 

7.                                      EXECUTION BY COUNTERPARTS:

 

This Amendment Number 16 may be executed in any number of counterparts, whether by facsimile, electronic signature or otherwise, and upon execution by all Participants, each executed counterpart shall have the same force and effect as an original instrument and as if all Participants had signed the same instrument. Any signature page of this Amendment Number 16 may be detached from any

 

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counterpart of the Amendment Number 16 without impairing the legal effect of any signature thereon, and may be attached to another counterpart of this Amendment Number 16 identical in form hereto but having attached to it one or more signature pages.

 

8.                                      SIGNATURE CLAUSE:

 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 16 on behalf of the Party for which he/she signs.

 

	
 
    	
ARIZONA   PUBLIC SERVICE COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Randall K. Edington
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
Executive   Vice President/Chief Nuclear Officer
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
4/28/14
    

 

 

	
STATE   OF ARIZONA
    	
)
    
	
 
    	
)   ss.
    
	
County   of Maricopa
    	
)
    

 

On this 28th day of April, 2012, before me, the undersigned Notary Public, personally appeared Randall K. Edington who acknowledged him/herself to be the Executive Vice President/Chief Nuclear Officer of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such Executive Vice President/Chief Nuclear Officer.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

	
 
    	
/s/   Jennifer R. Stokic
    
	
 
    	
Notary   Public
    
	
 
    	
 
    
	
 
    	
 
    
	
My   Commission Expires:
    	
 
    
	
 
    	
 
    
	
1-17-2015
    	
 
    	
 
    
			

 

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8.                                      SIGNATURE CLAUSE:

 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 16 on behalf of the Party for which he/she signs.

 

	
 
    	
SALT   RIVER PROJECT AGRICULTURAL
    
	
 
    	
IMPROVEMENT   AND POWER DISTRICT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Michael Hummel
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
AGM&   Chief Power System Executive
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
April 10,   2014
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ATTEST   AND COUNTERSIGN:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Its:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    	
 
    

 

	
STATE   OF ARIZONA
    	
)
    
	
 
    	
)   ss.
    
	
County   of Maricopa
    	
)
    

 

On this 10th day of  April, 2014, before me, the undersigned Notary Public, personally appeared Michael Hummel who acknowledged him/herself to be the AGM& Chief Power System Executive of SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an Arizona corporation, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such AGM& Chief Power System Executive.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

	
 
    	
/s/ Christina M. Hallows
    
	
 
    	
Notary   Public
    

 

 

	
My   Commission Expires:
    	
 
    
	
 
    	
 
    
	
September 5,   2014
    	
 
    	
 
    
			

 

5

 

8.                                      SIGNATURE CLAUSE:

 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 16 on behalf of the Party for which he/she signs.

 

	
 
    	
SOUTHERN   CALIFORNIA EDISON
    
	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas J. Palmisano
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
Vice-President   & CNO
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
3/16/2014
    

 

 

	
STATE   OF CALIFORNIA
    	
)
    
	
 
    	
)   ss.
    
	
County   of Los Angeles
    	
)
    

 

On this 16th day of April, 2014, before me, the undersigned Notary Public, personally appeared Thomas J. Palmisano who acknowledged him/herself to be the Vice-President of SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such Southern California Edison.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

	
 
    	
/s/   Brad Meindertsma
    
	
 
    	
Notary   Public
    
	
 
    	
 
    
	
 
    	
 
    
	
My   Commission Expires:
    	
 
    
	
 
    	
 
    
	
12-1-2015
    	
 
    	
 
    
			

 

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8.             SIGNATURE CLAUSE:

 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 16 on behalf of the Party for which he/she signs.

 

	
 
    	
PUBLIC   SERVICE COMPANY OF NEW
    
	
 
    	
MEXICO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ronald E. Talbot
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
SVP   and COO
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
April 16,   2014
    

 

 

	
STATE   OF NEW MEXICO
    	
)
    
	
 
    	
)   ss.
    
	
County   of Bernalillo
    	
)
    

 

On this 16th day of April, 2014, before me, the undersigned Notary Public, personally appeared Ronald E. Talbot who acknowledged him/herself to be the SVP and COO of PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such SVP and COO.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

	
 
    	
/s/   Susan G. Gordon
    
	
 
    	
Notary   Public
    
	
 
    	
 
    
	
 
    	
 
    
	
My   Commission Expires:
    	
 
    
	
 
    	
 
    
	
September 12,   2016
    	
 
    	
 
    
			

 

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8.             SIGNATURE CLAUSE:

 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 16 on behalf of the Party for which he/she signs.

 

	
 
    	
EL   PASO ELECTRIC COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   T.V. Shockler
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
March   17, 2014
    

 

 

	
STATE   OF TEXAS
    	
)
    
	
 
    	
)   ss.
    
	
County   of El Paso
    	
)
    

 

On this 17th day of March, 2014, before me, the undersigned Notary Public, personally appeared T.V. Shockler who acknowledged him/herself to be the Chief Executive Officer of EL PASO ELECTRIC COMPANY, a Texas corporation, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such Chief Executive Officer.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

	
 
    	
/s/   Hilda Vargas
    
	
 
    	
Notary   Public
    
	
 
    	
 
    
	
 
    	
 
    
	
My   Commission Expires:
    	
 
    
	
 
    	
 
    
	
July   1, 2017
    	
 
    	
 
    
			

 

8

 

8.             SIGNATURE CLAUSE:

 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 16 on behalf of the Party for which he/she signs.

 

	
 
    	
SOUTHERN   CALIFORNIA PUBLIC POWER AUTHORITY, doing business in the State of Arizona as   SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ron Davis
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
December 20,   2012
    

 

 

	
STATE   OF CALIFORNIA
    	
)
    
	
 
    	
)   ss.
    
	
County   of Los Angeles
    	
)
    

 

On this 20th day of  December, 2012, before me, the undersigned Notary Public, personally appeared Ron Davis who acknowledged him/herself to be the President of SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, doing business in the State of Arizona as SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ASSOCIATION, a California joint powers agency, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such                                                         .

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

	
 
    	
/s/   Salpi Ortiz
    
	
 
    	
Notary   Public
    
	
 
    	
 
    
	
 
    	
 
    
	
My   Commission Expires:
    	
 
    
	
 
    	
 
    
	
February 20,   2015
    	
 
    	
 
    
			

 

9

 

8.             SIGNATURE CLAUSE:

 

Each of the signatories below represents that he/she is appropriately authorized to enter into this Amendment Number 16 on behalf of the Party for which he/she signs.

 

	
 
    	
DEPARTMENT   OF WATER AND
    
	
 
    	
POWER   OF THE CITY OF LOS
    
	
 
    	
ANGELES
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Marcie L. Edwards
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
General   Manager
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
March 31,   2014
    
	
 
    	
 
    	
 
    
	
 
    	
And
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Barbara E. Moschos
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
Board   Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
March 31,   2014
    

 

 

	
STATE   OF CALIFORNIA
    	
)
    
	
 
    	
)   ss.
    
	
County   of Los Angeles
    	
)
    

 

On this 31st day of March, 2014, before me, the undersigned Notary Public, personally appeared Marcie L. Edwards who acknowledged him/herself to be the General Manager of DEPARTMENT OF WATER AND POWER  OF THE CITY OF LOS ANGELES, a California joint powers agency, and that he/she as such officer, being authorized to do, executed the foregoing instrument for the purposes therein contained by signing the name of the company by him/herself as such General Manager.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

	
 
    	
/s/   Reynan L. Ledesma
    
	
 
    	
Notary   Public
    
	
 
    	
 
    
	
 
    	
 
    
	
My   Commission Expires:
    	
 
    
	
 
    	
 
    
	
July 17,   2014
    	
 
    	
 
    
			

 

10Exhibit 10.3

 

AMENDMENT NO. 7 TO FOUR CORNERS PROJECT CO-TENANCY AGREEMENT

 

THIS AMENDMENT NO. 7 TO FOUR CORNERS PROJECT CO-TENANCY AGREEMENT (this “Amendment”) is made and entered into as of December 30, 2013, by and among ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation (“Arizona”); EL PASO ELECTRIC COMPANY, a Texas corporation (“El Paso”); PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (“New Mexico”); SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an agricultural improvement district, organized and existing under the laws of the State of Arizona (“Salt River Project”); SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation (“Edison”); and TUCSON ELECTRIC POWER COMPANY, an Arizona corporation (“Tucson”).  Arizona, El Paso, New Mexico, Salt River Project, Edison and Tucson are herein collectively referred to as the “Parties”.

 

RECITALS

 

The Parties entered into the Four Corners Project Co-Tenancy Agreement, effective as of July 19, 1966, and amendments thereto through Amendment No. 6, dated February 3, 2000 (as amended by such amendments, the “Co-Tenancy Agreement”), providing, among other things, for the allocation of ownership in the Four Corners Project.

 

Arizona and Edison are parties to a Purchase and Sale Agreement, dated as of November 8, 2010 (the “Purchase Agreement”), providing, among other things, for the sale by Edison to Arizona, and the purchase by Arizona from Edison, of Edison’s interests in the Four Corners Project and the Facilities Switchyard (the “Edison Interest Transfer”).

 

Following the Edison Interest Transfer, Arizona, the owner of the Initial Four Corners Plant, intends to retire Units 1, 2 and 3 of the Initial Four Corners Plant.

 

This Amendment will take effect on the Amendment No. 7 Effective Date, as defined herein.

 

STATEMENT OF AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

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

 

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

 

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

 

 

the last sentence thereof:  “Amendment No. 7 to this Agreement (“Amendment No. 7”) provides, among other things, for updated ownership percentages as they existed following the consummation of the transfer to Arizona by Edison of Edison’s interests in the Four Corners Project pursuant to that certain Purchase and Sale Agreement, dated as of November 8, 2010 (the “Purchase Agreement”).  As of the effective date of Amendment No. 7, Edison is no longer a party to this Agreement, and all references to Edison as well as Edison’s designation as a Participant, as that term is defined in Section 5.27 herein, are limited to facts or matters occurring or agreements entered into prior to the effective date of Amendment No. 7.”

 

4.                                      Amendment of Section 5.11(a).  Section 5.11(a) is hereby amended to delete the language after “Clerk,” in the sixth line and replace it with “as amended from time to time.”  References in the Co-Tenancy Agreement to the effective date thereof or of a particular provision or instrument shall mean the effective date of the original Co-Tenancy Agreement or of the particular provision or instrument when first referenced in the original Co-Tenancy Agreement as then amended.”

 

5.                                      Amendment of Section 5.27.  Section 5.27 is hereby amended to delete “, Edison” in the second line thereof, to add the following clause immediately following “Project” in the third line thereof:  “, and, when referring specifically to facts or matters occurring or agreements entered into prior to the effective date of Amendment No. 7, Edison”,” and to add the following sentence immediately following the last sentence thereof:  “The term “Original Participants” shall refer to “Arizona, El Paso, New Mexico, Salt River Project, Edison and Tucson.”.

 

6.                                      Amendment of Section 6.2.  Section 6.2 is hereby amended to read in full as follows:

 

“6.2  The Participants shall hold title to and own as tenants in common all the facilities forming part of the Four Corners Project (excluding the Common Facilities, the Switchyard Facilities, the New Facilities, the Related Facilities not included in the New Facilities, and the Reserve Auxiliary Power Source) as follows:

 

6.2.1  Arizona shall own an undivided 63% interest therein.

 

6.2.2  El Paso shall own an undivided 7% interest therein.

 

6.2.3  New Mexico shall own an undivided 13% interest therein.

 

6.2.4  Salt River Project shall own an undivided 10% interest therein.

 

6.2.5  Tucson shall own an undivided 7% interest therein.”

 

7.                                      Amendment of Section 6.2(a).  Section 6.2(a) is hereby amended to read in full as follows:

 

“6.2(a)  The Participants shall hold title to and own as tenants in common the Related Facilities not included in the New Facilities existing on the effective date of Amendment No. 7 as follows:

 

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6.2(a)1  Arizona shall own an undivided 73.20% interest therein.

 

6.2(a)2  El Paso shall own an undivided 5.07% interest therein.

 

6.2(a)3  New Mexico shall own an undivided 9.42% interest therein.

 

6.2(a)4  Salt River Project shall own an undivided 7.24% interest therein.

 

6.2(a)5  Tucson shall own an undivided 5.07% interest therein.

 

The Participants shall hold title to and own as tenants in common all Related Facilities, including improvements thereto, acquired or constructed after the effective date of Amendment No. 7 as follows:

 

6.2(a)6  Arizona shall own an undivided 63% interest therein.

 

6.2(a)7  El Paso shall own an undivided 7% interest therein.

 

6.2(a)8  New Mexico shall own an undivided 13% interest therein.

 

6.2(a)9  Salt River Project shall own an undivided 10% interest therein.

 

6.2(a)10  Tucson shall own an undivided 7% interest therein.”

 

8.                                      Amendment of Section 6.3.1.  Section 6.3.1 is hereby amended to substitute “63%” for “15%” in the first line thereof.

 

9.                                      Amendment of Section 6.3.2.  Section 6.3.2 is hereby amended to substitute “[Reserved]” for the text thereof.

 

10.                               Amendment of Section 6.3(a)1.  Section 6.3(a)1 is hereby amended to substitute “Arizona” for “Edison” in the first line thereof.

 

11.                               Amendment of Section 6.4.1.  Section 6.4.1 is hereby amended to substitute “63%” for “15%” in the first line thereof.

 

12.                               Amendment of Section 6.4.2.  Section 6.4.2 is hereby amended to substitute “[Reserved]” for the text thereof.

 

13.                               Amendment of Section 6.5.  Section 6.5 is hereby amended read in full as follows:

 

“6.5  The Participants shall hold title to and own as tenants in common the Common Facilities and the Existing Related Facilities included in the New Facilities, in both cases, existing on the effective date of Amendment No. 7 as follows:

 

6.5.1  Arizona shall own an undivided 73.20% interest therein.

 

6.5.2  El Paso shall own an undivided 5.07% interest therein.

 

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6.5.3  New Mexico shall own an undivided 9.42% interest therein.

 

6.5.4  Salt River Project shall own an undivided 7.24% interest therein.

 

6.5.5  Tucson shall own an undivided 5.07% interest therein.

 

The Participants shall hold title to and own as tenants in common all Future Related Facilities, including improvements thereto, acquired or constructed after the effective date of Amendment No. 7 as follows:

 

6.5.6  Arizona shall own an undivided 63% interest therein.

 

6.5.7  El Paso shall own an undivided 7% interest therein.

 

6.5.8  New Mexico shall own an undivided 13% interest therein.

 

6.5.9  Salt River Project shall own an undivided 10% interest therein.

 

6.5.10  Tucson shall own an undivided 7% interest therein.”

 

14.                               Amendment of Section 6.6.1.  Section 6.6.1 is hereby amended to substitute “63%” for “15%” in the first line thereof.

 

15.                               Amendment of Section 6.6.2.  Section 6.6.2 is hereby amended to substitute “[Reserved]” for the text thereof.

 

16.                               Amendment of Section 6.7.  Section 6.7 is hereby amended to delete “Edison,” from the second line thereof.

 

17.                               Amendment of Section 6.8.  Section 6.8 is hereby amended to delete “Edison,” from the second line thereof.

 

18.                               Amendment of Section 6.9.  Section 6.9 is hereby amended to delete “Edison,” from the third line thereof.

 

19.                               Amendment of Section 7.1.1.  Section 7.1.1 is hereby amended to substitute “75.33%” for “43.33%” in the first line thereof.

 

20.                               Amendment of Section 7.1.2.  Section 7.1.2 is hereby amended to substitute “[Reserved]” for the text thereof.

 

21.                               Amendment of Section 7.2.1.  Section 7.2.1 is hereby amended to substitute “52.23%” for “40.23%” in the first line thereof.

 

22.                               Amendment of Section 7.2.2.  Section 7.2.2 is hereby amended to substitute “[Reserved]” for the text thereof.

 

23.                               Amendment of Section 7.3.1.  Section 7.3.1 is hereby amended to substitute “63%” for “15%” in the first line thereof.

 

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24.                               Amendment of Section 7.3.2.  Section 7.3.2 is hereby amended to substitute “[Reserved]” for the text thereof.

 

25.                               Amendment of Section 7.4.1.  Section 7.4.1 is hereby amended to substitute “57.90%” for “54.44%” in the first line thereof.

 

26.                               Amendment of Section 7.4.2.  Section 7.4.2 is hereby amended to substitute “[Reserved]” for the text thereof.

 

27.                               Amendment of Section 7.5.1.  Section 7.5.1 is hereby amended to substitute “62.45%” for “19.25%” in the first line thereof.

 

28.                               Amendment of Section 7.5.2.  Section 7.5.2 is hereby amended to substitute “[Reserved]” for the text thereof.

 

29.                               Amendment of Section 7.7.  Section 7.7 is hereby amended to delete “Edison,” from the second line thereof.

 

30.                               Amendment of Section 8.1.1.  Section 8.1.1 is hereby amended to substitute “63%” for “15%” in the first line thereof.

 

31.                               Amendment of Section 8.1.2.  Section 8.1.2 is hereby amended to substitute “[Reserved]” for the text thereof.

 

32.                               Amendment of Section 10.1.  Section 10.1 is hereby amended to read in full as follows:

 

“10.1                  If, because of emergency or planned shutdowns of Common Facilities or Related Facilities or the curtailment for any cause in the use thereof, Units 1, 2, 3 (prior to their respective retirements), 4 and 5 are not all operable simultaneously and continuously at their Net Effective Generating Capacity, then the reduced capacity entitlement of each Participant, because of the inability to operate said Units simultaneously and continuously at their Net Effective Generating Capacity, shall be determined as follows:

 

Reduced Capacity Entitlement of 
  Initial Four Corners Plant

 

C = N x NEGC1
               NEGC2

 

Reduced Capacity Entitlement of
  Four Corners Project

 

CD1U = N x (NEGC2 — NEGC1) x P
                               NEGC2

 

5

 

Where:

 

C = Reduced capacity entitlement of Arizona in Initial Four Corners Plant.

 

CD 1U = With respect to each Participant, the reduced capacity entitlement of such Participant in the Four Corners Project.

 

N = Reduced Net Effective Generating Capacity of the Enlarged Four Corners Generating Station.

 

NEGC1 = The Net Effective Generating Capacity of the Initial Four Corners Plant at the time of such emergency or planned shutdown or curtailment.

 

NEGC2 = The Net Effective Generating Capacity of the Enlarged Four Corners Generating Station at the time of such emergency or planned shutdown or curtailment.

 

P = With respect to each Participant, such Participant’s percentage of Net Effective Generation under Section 8.1.”

 

33.                               Amendment of Section 10.3.  Section 10.3 is hereby amended to read in full as follows:

 

“10.3                  Except as otherwise provided in this Section 10, no Participant shall exercise its rights relating to the Common Facilities or Related Facilities so as to endanger or unreasonably interfere with the operation of the Initial Four Corners Plant (prior to the retirement of each of Units 1, 2 and 3 of the Initial Four Corners Plant) or the Four Corners Project.”

 

34.                               Compliance with Section 13.11.2 and Section 13.12 of the Co-Tenancy Agreement.  In accordance with Section 13.11.2 of the Co-Tenancy Agreement, Arizona agrees to assume from and after the Amendment No. 7 Effective Date the obligations and duties of Edison under the Project Agreements.  In accordance with Section 13.12 of the Co-Tenancy Agreement, Arizona agrees that it shall not transfer or assign all or any portion of the Transfer Interest acquired by Arizona upon consummation of the Edison Interest Transfer without complying with Section 13 of the Co-Tenancy Agreement.

 

35.                               Amendment of Section 23.1.3.36.           Section 23.1.3 is hereby amended to read in full as follows:

 

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

 

36.                               Amendment of Section 23.1.537.              .  Section 23.1.5 is hereby amended to substitute “[Reserved]” for the text thereof.

 

6

 

37.                               Amendment of Exhibit 2, Figure 1.  Figure 1 of Exhibit 2 is hereby replaced in its entirety by Figure 1 attached to this Amendment.

 

38.                               Amendment No. 7 Effective Date; Termination.  The “Amendment No. 7 Effective Date” means the date of consummation of the Edison Interest Transfer pursuant to the Purchase Agreement (the “Edison Transfer Closing Date”); provided, however, that this Amendment will terminate if (a) Arizona or Edison provides written notice to the Parties to the effect that the Edison Transfer Closing Date will not occur, or (b) the Purchase Agreement is terminated, or (c) the Edison Transfer Closing Date does not occur on or prior to December 31, 2013.

 

39.                               Notices.  Any notice provided for in this Amendment shall be deemed properly served, given or made if delivered in person or sent by registered or certified mail, postage prepaid, to the persons specified below:

 

Arizona Public Service Company

c/o Secretary

P.O. Box 53999

Phoenix, Arizona 85072 3999

 

El Paso Electric Company

c/o Secretary

P.O. Box 982

El Paso, Texas 79960

 

Public Service Company of New Mexico

c/o Secretary

Main Offices

Albuquerque, New Mexico 87158-1245

 

Salt River Project Agricultural

Improvement and Power District

c/o Secretary

P.O. Box 1980

Phoenix, Arizona 85281

 

Southern California Edison Company

c/o Secretary

P.O. Box 800

Rosemead, California 91770

 

Tucson Electric Power Company

c/o Secretary

P.O. Box 711

Tucson, Arizona 85702

 

7

 

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

 

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

 

8

 

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the day and year first above written.

 

	
 
    	
ARIZONA   PUBLIC SERVICE COMPANY
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   David A. Hansen
    
	
 
    	
Its:   
    	
V.P.   Fossil Generation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EL   PASO ELECTRIC COMPANY
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   T V Shockley
    
	
 
    	
Its:   
    	
Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PUBLIC   SERVICE COMPANY OF NEW MEXICO
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Chris Olson
    
	
 
    	
Its:   
    	
Vice   President, PNM Generation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SALT   RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Mike Hummel
    
	
 
    	
Its:   
    	
Associate   General Manager & Chief
    
	
 
    	
 
    	
Power   System Executive
    
	
 
    	
 
    
	
 
    	
Reviewed   by SRP Legal Services
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Karilee S. Ramaley
    
	
 
    	
Its:   
    	
Senior   Attorney
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SOUTHERN   CALIFORNIA EDISON COMPANY
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Robert C. Boada
    
	
 
    	
Its:   
    	
Vice   President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TUCSON   ELECTRIC POWER COMPANY
    
	
 
    	
By:   
    	
/s/   Mark Mansfield
    
	
 
    	
Its:   
    	
VP   Generation
    

 

Signature Page to

Amendment No. 7 to Project Co-Tenancy Agreement

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