Document:

Exhibit 10.17

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

         This ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") is dated as
of the 31st day of July, 2001 by and between GEORGIA POWER COMPANY, a Georgia
corporation ("Assignor"), and SOUTHERN POWER COMPANY, a Delaware corporation
("Assignee").

                              W I T N E S S E T H:

         WHEREAS, Assignor and Assignee are parties to that certain Asset
Purchase and Sale Agreement dated as of July 31, 2001 (the "Purchase
Agreement"), providing for, among other things the sale of Assignor's interest
in Plant Dahlberg from Assignor to Assignee, the assignment by Assignor to
Assignee of the Seller's Agreements, the Operating Permits and the Environmental
Permits along with all other general intangibles associated with Plant Dahlberg
and the assumption of the Assumed Liabilities by Assignee;

         WHEREAS, Assignor and Assignee now desire to carry out the intent and
purposes of the Purchase Agreement by the execution and delivery of this
instrument.

         NOW, THEREFORE, for and in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

         1. Assignor does hereby sell, transfer, convey, assign and deliver to
Assignee all of the right, title and interest of Assignor in, to and under the
Seller's Agreements, including, without limitation, those Seller's Agreements
listed on Schedule 1, along with all claims, warranties, rights and guarantees
in, and all claims for damages arising under such Seller's Agreements and the
right to compel performance of the terms of such Seller's Agreements, as well as
all other general intangibles associated with Plant Dahlberg.

         2. Assignor does hereby sell, transfer, convey, assign and deliver to
Assignee all of the right, title and interest of Assignor in, to and under the
Operating Permits and Environmental Permits to the extent the same are not
retained by Assignor as operator of the Assets pursuant to the Operating
Agreement and to the extent that the same may lawfully be transferred by this
Agreement.

         3. Assignee does hereby accept all of the right, title and interest of
Assignor in, to and under the Seller's Agreements, Operating Permits and
Environmental Permits assigned by Assignor above, and does hereby assume and
agree to pay, perform and discharge promptly and fully when and as required all
of the Assumed Liabilities.

<PAGE>

         4. The parties hereto agree to do, execute, acknowledge and deliver, or
cause to be done, executed, acknowledged and delivered, all such further acts,
instruments, assignments, transfers, and assurance as may be required in order
to carry out the intent of this Agreement.

         5. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

         6. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.

         7. Capitalized terms not defined herein shall have the respective
meanings assigned to such terms in the Purchase Agreement.

         IN WITNESS WHEREOF, the parties hereto have caused their respective
duly authorized representatives to execute this Agreement as of the day and year
first above written.

                      "Assignor"

                      GEORGIA POWER COMPANY

                      By:
                         ---------------------------------------
                      Name:
                           -------------------------------------
                      Title:
                            ------------------------------------

                      "Assignee"

                      SOUTHERN POWER COMPANY

                      By:
                         --------------------------------------
                        C.B. Harreld
                        Vice President, Comptroller and Chief Financial Officer

                                       2

<PAGE>

                                   Schedule 1

                               Seller's Agreements

1    Purchased Power Agreement between Georgia Power Company and LG&E Energy
     Marketing,  Inc., dated as of November 24, 1998, as amended by letter dated
     May 10, 1999.

2    Purchased Power Agreement between Georgia Power Company and LG&E Energy
     Marketing, Inc., dated as of September 23, 1999.

3    Purchased  Power Agreement between Georgia Power Company and Dynegy Power
     Marketing, Inc., dated as of March 2, 2000.

4    Agreement for the  Design,  Supply and Construction of Power Generation
     Facility at Jackson County,  Georgia (Units 1-8)  between Georgia  Power
     Company and General Electric Company, dated January 8, 1999.

5    Agreement for Purchase and Sale of Simple Cycle Gas Turbines for Plant
     Dahlberg Units 9 and 10 between Georgia Power Company and General Electric
     Company, dated September 16, 1999.

6    Equipment Purchase Orders (see attached list)

7    Water Supply Agreement dated as of March 17, 1999 by and between Georgia
     Power Company and the Jackson County Water and Sewerage Authority,  as
     amended by Amendment to Water Supply Agreement, dated as of October 5,
     1999.

8    Transcontinental Gas Pipe Line Corporation Interconnect Reimbursement and
     Operating  Agreement by and between Transcontinental Gas Pipe Line
     Corporation and Georgia Power Company, dated as of July 22, 1999.

9    Pipeline  Operating Agreement by and between Georgia Power Company and
     Atlanta Gas Light  Company, entered into as of August 11, 2000, as amended
     by Amendment No.1 to Pipeline Operating Agreement,  dated as of March 1,
     2001.

10   Transcontinental Gas Pipe Line  Corporation Precedent Agreement between
     Transcontinental Gas Pipe Line Corporation and Georgia Power Company, dated
     February 9, 1999, as amended by letter dated February 3, 2000.

                                       3
<PAGE>

11   Rate Agreement for Firm Transportation Service between Transcontinental Gas
     Pipe Line Corporation and Southern Company Services,  Inc. as agent for
     Georgia Power Company,  Alabama Power Company,  Mississippi Power Company,
     Gulf Power Company and Savannah Electric and Power Company,  dated February
     3, 2000, as amended by letter dated May 26, 2000.

12   Service Agreement between Transcontinental Gas Pipe Line Corporation and
     Southern Company Services,  Inc.,  as agent for Georgia Power Company,
     Alabama Power Company,  Mississippi  Power Company,  Gulf Power Company and
     Savannah Electric and Power Company, dated May 23, 2000.

13   Contract for Combustion Turbine Project for Units 9 & 10 at Plant Dahlberg
     of Georgia Power Company between TIC - The Industrial Company and Georgia
     Power Company, dated July 17, 2000

14   Long Term Service Agreement for Units 1-10 at Plant Dahlberg between
     General Electric  International,  Inc. and Georgia Power Company,  dated
     December, 2000.

                                       4Exhibit 10.18
                                                       Public Release Version

                            POWER PURCHASE AGREEMENT

                                     BETWEEN

                              ALABAMA POWER COMPANY

                                       AND

                             SOUTHERN POWER COMPANY

                                  June 1, 2001

<PAGE>

<TABLE>
<CAPTION>

                                                Original Sheet No. 76

                                TABLE OF CONTENTS

ARTICLE 1
<S>                                                                                                              <C>
         DEFINITIONS..............................................................................................6
                  1.1        Certain Definitions..................................................................6

ARTICLE 2
         TERM OF AGREEMENT.......................................................................................16
                  2.1        Term................................................................................16
                  2.2        Survival............................................................................16
                  2.3        Early Termination...................................................................16

ARTICLE 3
         REPRESENTATIONS, WARRANTIES AND COVENANTS...............................................................18
                  3.1        Mutual Representations, Warranties and Covenants....................................18
                  3.2        Covenants of the Seller.............................................................19
                  3.3        Taxes...............................................................................20

ARTICLE 4
         REGULATORY APPROVALS....................................................................................21
                  4.1        APSC................................................................................21
                  4.2        FERC................................................................................21
                  4.3        ADEM................................................................................21
                  4.4        Other Approvals.....................................................................21

ARTICLE 5
         DELIVERY OF CAPACITY AND ENERGY.........................................................................22
                  5.1        Agreement to Provide Capacity and Energy............................................22
                  5.2        Calculation of Monthly Capacity Payments............................................22
                  5.3        Calculation of Monthly Energy Payments..............................................22

ARTICLE 6
         BILLING AND COLLECTION..................................................................................22
                  6.1        Capacity and Energy Billing and Payment.............................................22
                  6.2        Billing Disputes and Final Accounting...............................................23
                  6.3        Interest............................................................................24
                  6.4        Billing and Payment Records.........................................................25

ARTICLE 7
         FACILITY IMPLEMENTATION AND CONSTRUCTION................................................................25
                  7.1        Project Implementation..............................................................25
                  7.2        Failure to Achieve Required Threshold Date..........................................26
                  7.3        Cover Period Energy.................................................................27
                  7.4        Failure to Meet Required Commercial Operation Date..................................29

ARTICLE 8
         INTERCONNECTION AND METERING............................................................................29
                  8.1        Interconnection.....................................................................29
                  8.2        Delay in Interconnection............................................................29
                  8.3        Protective Devices..................................................................30
                  8.4        Meters..............................................................................30

ARTICLE 9
         COMMERCIAL OPERATION, TESTING AND DESIGNATION OF CAPACITY...............................................32
                  9.1        Initial Synchronization.............................................................32
                  9.2        Commercial Operation Test...........................................................32
                  9.3        Capacity Examination................................................................33
                  9.4        Disputes Concerning Capacity Tests..................................................34

ARTICLE 10
         OPERATION AND MAINTENANCE...............................................................................35
                  10.1       Operation and Maintenance...........................................................35
                  10.2       Scheduled and Maintenance Outages...................................................35
                  10.3       Access to the Site and the Facility.................................................37
                  10.4       Availability of Records.............................................................37
                  10.5       Disclaimer..........................................................................38
                  10.6       Air Permits.........................................................................38

ARTICLE 11
         FUEL SUPPLY.............................................................................................38
                  11.1       Overview............................................................................38
                  11.2       Transportation Capacity.............................................................40

ARTICLE 12
         DISPATCH, SCHEDULING, AND TRANSMISSION..................................................................43
                  12.1       Scheduling..........................................................................44
                  12.2       Scheduling Alternate Resources......................................................44
                  12.3       Transmission........................................................................44
                  12.4       Emergencies.........................................................................44
                  12.5       Disconnection.......................................................................45

ARTICLE 13
         FORCE MAJEURE...........................................................................................46
                  13.1       Definition of Force Majeure Event...................................................46
                  13.2       No Breach or Liability..............................................................46
                  13.3       Capacity and Energy Payments........................................................46
                  13.4       Mitigation..........................................................................46
                  13.5       Suspension of Performance...........................................................47
                  13.6       Extended Force Majeure Events.......................................................47

ARTICLE 14
         FAILURE OF PERFORMANCE AND REMEDIES.....................................................................48
                  14.1       Notice of Failure of Performance....................................................48
                  14.2       Failure of Performance by Seller....................................................49
                  14.3       Failure of Performance by Buyer.....................................................52
                  14.4       Remedies............................................................................54
                  14.5       Discharge of Obligations Upon Termination...........................................55
                  14.6       Suspension of Performance...........................................................55
                  14.7       No Consequential Damages............................................................55
                  14.8       No Interruption.....................................................................55
                  14.9       No Warranties.......................................................................56
                  14.10      Liquidated Damages..................................................................56

ARTICLE 15
         COMPLIANCE WITH LAWS, RULES AND REGULATION..............................................................56
                  15.1       Compliance..........................................................................56
                  15.2       Change of Law.......................................................................57
                  15.3       NOx Emissions.......................................................................59

ARTICLE 16
         ASSIGNMENT AND TRANSFERS OF INTERESTS...................................................................59
                  16.1       Assignment and Assumption of Obligations............................................59
                  16.2       Assignment to Lenders...............................................................59

ARTICLE 17
         INDEMNIFICATION.........................................................................................59
                  17.1       Indemnity...........................................................................60
                  17.2       Notice of Proceedings...............................................................60

ARTICLE 18
         MISCELLANEOUS PROVISIONS................................................................................61
                  18.1       Amendments..........................................................................61
                  18.2       Access to Facility Documents........................................................61
                  18.3       Binding Effect......................................................................61
                  18.4       Counterparts........................................................................61
                  18.5       Notices.............................................................................61
                  18.6       Entire Agreement....................................................................62
                  18.7       Governing Law.......................................................................63
                  18.8       Non-Waiver..........................................................................63
                  18.9       Headings Not Affecting Meaning......................................................63
                  18.10      Third Parties.......................................................................63
                  18.11      Severability........................................................................63
                  18.12      Cooperation.........................................................................64
                  18.13      Confidentiality.....................................................................64
                  18.14      Replacement Index...................................................................64

APPENDIX A
         CAPACITY PAYMENT CALCULATION............................................................................66

APPENDIX B
         ENERGY PAYMENT CALCULATION..............................................................................67

APPENDIX C
         DESIGN PARAMETERS AND SCHEDULING PROCEDURES.............................................................68

APPENDIX D
         PERFORMANCE TESTING PROCEDURES AND DISPATCH.............................................................69

APPENDIX E
         DETERMINATION OF CERTAIN LIQUIDATED DAMAGES.............................................................70

APPENDIX F
         DAILY DAMAGE FOR FAILURE TO MEET THE REQUIRED COMMERCIAL OPERATION DATE.................................71

APPENDIX G
         HIGHER HEATING VALUE GUARANTEED HEAT RATE CURVES For Normal Mode........................................73

APPENDIX H
         SCOPE OF INTERCONNECTION FACILITIES.....................................................................73

</TABLE>

<PAGE>

                            CONTRACT FOR THE PURCHASE
                           OF FIRM CAPACITY AND ENERGY

         THIS POWER PURCHASE AGREEMENT ("Agreement"), dated as of June 1, 2001,
is made by and between Alabama Power Company, a corporation organized and
existing under the laws of the State of Alabama ("Buyer") with its principal
place of business in Birmingham, Alabama, and Southern Power Company, a
corporation organized and existing under the laws of the State of Delaware
("Seller") with its principal place of business in Birmingham, Alabama
(individually a "Party" or collectively the "Parties").

                              W I T N E S S E T H:

                  WHEREAS,  Buyer is engaged in the  distribution and sale of
electricity for heat, light and power to the public in the State of Alabama;

                  WHEREAS,  Seller is  authorized  to,  among other  things,
own and operate  electric  generating facilities and sell electric capacity
and associated energy from such facilities; and

                  WHEREAS, Buyer has agreed to purchase from Seller and Seller
has agreed to sell to Buyer electric capacity and associated energy all in
accordance with the provisions of this Agreement.

                  NOW, THEREFORE, in consideration of the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller each intending to
be legally bound, hereby agree as follows:

<PAGE>

                                    ARTICLE 1
DEFINITIONS

         1.1......Certain Definitions. The following capitalized terms and
phrases, in addition to those defined above, as and when used in this Agreement
shall have the respective meanings set forth below:

                  1.1.1    "ADEM" - means the Alabama  Department of
Environmental  Management or any Governmental Authority succeeding to the
powers and functions thereof.

                  1.1.2    "Adjustment Period" - shall have the meaning set
forth in Section 8.4.3.

                  1.1.3    "Affiliate" - means any other entity  directly or
indirectly  controlling  or controlled

by or under direct or indirect common control of a specified entity. For
purposes of this definition, "control" means the power to direct the management
and policies of such entity, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise. The terms
"controlling" and "controlled" have meanings correlative to the foregoing.

                  1.1.4 "After-Tax Basis" - means, with respect to any payment
received or deemed to have been received by any Person, the amount of such
payment (the base payment) supplemented by a further payment (the additional
payment) to that Person so that the sum of the base payment plus the additional
payment shall, after deduction of the amount of all Taxes required to be paid by
such Person in respect of the receipt or accrual of the base payment and the
additional payment (taking into account any credits or deductions arising from
the underlying loss, the base payment and the additional payment and the timing
thereof), be equal to the amount required to be received. Such calculations
shall be made on the basis of the assumption that the recipient is subject to
U.S. federal income taxation at the highest applicable statutory rate applicable
to corporations for the relevant period or periods, and is subject to state and
local income taxation at the highest applicable statutory rates applicable to
corporations in the taxing jurisdiction of Autauga County, Alabama for the
relevant period or periods.

     1.1.5 "Air Permits" - shall have the meaning as set forth in Section 10.6.

     1.1.6  "Annual  Period" - means any one of a succession  of twelve
(12) month periods, the first of which shall begin on June 1, 2003 and end on
May 31, 2004.

     1.1.7  "APSC"  -  means  the  Alabama  Public  Service  Commission  or  any
Governmental Authority succeeding to the powers and functions thereof.

     1.1.8 "Business Day" - means any calendar day excluding Saturdays,  Sundays
and NERC-defined holidays.

     1.1.9 "Capacity Availability  Performance Adjustment" or "CAPA" - means the
adjustment to the capacity  payments  performed  pursuant to Section 5.2 and the
calculation set forth in Section C of Appendix A.

     1.1.10  "Change  of Law" - shall  have the  meaning as set forth in Section
15.2.

     1.1.11  "Commercial  Operation  Date" - means  the date on  which  the Unit
achieves commercial operation,  which shall be deemed to have occurred when: (i)
start-up and testing of such Unit has been completed in accordance  with Section
9.2 and  Appendix  D; and  (ii) the Unit is  capable  of  producing  energy  and
delivering same to the Transmission System through the Interconnection  Point on
a reliable basis.

                  1.1.12 "Confidential Information" - means business or
technical information rightfully in the possession of either Party, which
information derives actual or potential commercial value from not being
generally known or readily ascertainable through independent development or
reverse engineering by persons who can obtain economic value from its disclosure
and use, and which information is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy. Confidential Information
consists of information designated as confidential and furnished or disclosed to
the other Party in connection with this Agreement.

                  1.1.13 "Consent" - means any permit, approval, consent,
authorization or other requirement that is required from any Governmental
Authority in connection with Seller's performance of its obligations under this
Agreement, including, without limitation all applicable environmental
certificates, licenses, permits and approvals.

                  1.1.14 "Consumer Price Index" or "CPI" - means the measure of
the average change in prices paid by urban consumers for a fixed market basket
of goods and services approved by the Bureau of Labor Statistics or any
Governmental Authority succeeding to the powers and functions thereof.

     1.1.15  "Contract  Capacity" - means the capacity range of the Unit (in MW)
at Rated Conditions being made available to Buyer pursuant to this Agreement, as
specified in Section A.1 of Appendix A.

     1.1.16 "Cover  Amount" - means  [redacted]  for delivery in any hour during
the applicable Summer Seasonal Performance Period.

     1.1.17  "Delivery  Point" - means the point on the  Transmission  System at
which Seller shall  deliver the energy and shall be as follows:  (i) if from the
Unit, the Delivery Point shall be the Interconnection Point, and (ii) if from an
alternate  resource,  the Delivery Point shall be any point on the  Transmission
System designated by Seller at the time of delivery.

     1.1.18 "Demonstrated  Capability" - means demonstrated capacity of the Unit
at  [redacted],  as adjusted to Rated  Conditions,  resulting  from a test under
Article 9.

     1.1.19  "Designated  Capacity"  - means  the  amount  of  capacity  (in MW)
nominated by Seller at Rated Conditions.  Designated Capacity shall be nominated
by Seller for each Annual  Period by  [redacted]  prior to the beginning of each
such Annual Period, and may not exceed the Demonstrated Capability.

     1.1.20  "Dispatch  Center"  - means  the  control  and  dispatching  center
designated  by Seller from time to time in writing as being the primary  control
point for Scheduling instructions to Seller.

                  1.1.21 "Emergency" - means a condition or situation that, in
the sole reasonable judgment of Buyer, based on information available to Buyer
at the time, (i) may impair the safety of or cause damage or injury to Buyer's
employees, agents or property or (ii) adversely affects or is likely to
adversely affect Buyer's ability to maintain safe, adequate, and continuous
electric service to its customers and/or the customers of any member of the
Transmission System.

                  1.1.22 "Environmental Termination Notice" - means a written
notice from Seller to Buyer stating that Seller has discovered a condition on,
in or below the surface of the Site or any adjacent property which in the
commercially reasonable opinion of Seller would have a material adverse effect
on the time to develop, cost of developing, cost of operations or the value of
the Facility.

                  1.1.23 "Facility" - means the land, rights-of-way, Unit and
related equipment and facilities of the electric generating plant to be or being
constructed by Seller on the Site in connection with the Unit. The Facility
shall include, without limitation, the Unit and all auxiliary equipment and
facilities installed at the Site necessary or used for the production, control,
delivery or monitoring of electricity produced on the Site by such Unit. All
equipment and facilities installed on Seller's side of the Interconnection Point
in connection with the Unit are considered to be part of the Facility except
those that constitute Interconnection Facilities.

     1.1.24  "Failure of  Performance"  - shall have the meaning as set forth in
Section 14.1.

     1.1.25  "FERC" - means the  Federal  Energy  Regulatory  Commission  or any
Governmental Authority succeeding to the powers and functions thereof under the
Federal Power Act.

     1.1.26  "Force  Majeure  Event" - shall  have the  meaning  as set forth in
Section 13.1.

     1.1.27  "Fuel" - means  natural gas  referenced  to a higher  heating value
basis.

     1.1.28  "Governmental  Authority"  - means any local,  state,  regional  or
federal administrative,

legal, judicial or executive agency, court, commission, department or other such
entity, but excluding any such agency, court, commission, department or other
such entity acting in its capacity as lender, guarantor or mortgagee.

     1.1.29  "Guaranteed  Heat  Rate" - shall  have  the  meaning  set  forth in
Appendix G referenced to a higher heating value basis.

     1.1.30 "Incremental  Replacement Cost" - means the positive difference,  if
any,  between  the  Replacement  Cost and the amount  calculated  under  Section
7.3.2.2.

     1.1.31 "Interconnection Facilities" - means those facilities that Buyer, in
its reasonable  judgment,  determines  must be installed or modified in order to
electrically connect the Unit to the Transmission System.

     1.1.32  "Interconnection  Point" - means  the point of  connection  between
electrical  facilities  owned  by  Seller  and  Buyer's  230 kV  Interconnection
Facilities.

     1.1.33 "Interest Rate" - [redacted].

     1.1.34 "Invoice" - shall have the meaning as set forth in Section 6.1.1.

     1.1.35 "kW" - means kilowatt(s).

     1.1.36 "Legal  Requirement" - means any law, code,  status regulation rule,
ordinance  judgment,  injunction,  order or other  requirement of a Governmental
Authority having  jurisdiction  over the matter in question,  which is valid and
applicable  to the  matter  in  question  at the  time of the  execution  of the
Agreement or any time thereafter during the Term.

     1.1.37  "Maintenance  Outage" - means a planned  interruption of a
portion  or  all  of  the  Unit's  generation  capability  that:  (i)  has  been
coordinated  in advance with Buyer with a mutually  agreed start date,  time and
duration or to which Buyer has consented pursuant to Section 10.2.2; and (ii) is
for the purpose of performing work on specific components of the Unit that would
limit the power output of the Unit but should not, in the reasonable judgment of
Seller, be postponed until the next Scheduled Outage.

         1.1.38 "Metering System" - means all meters, metering devices
and related instruments used to measure and record electric capacity and energy
and to determine the amount of such electric capacity and energy that is being
made available or delivered to Buyer at the Interconnection Point.

     1.1.39 "Monthly  Capacity Payment" - means the monthly amount to be paid by
Buyer to Seller for Buyer's  purchase of  Designated  Capacity  from Seller,  as
calculated in accordance with Appendix A.

     1.1.40  "Monthly  Energy  Payment" - means the monthly amount to be paid by
Buyer to Seller for the  purchase  of energy  delivered  during  such month from
Seller, as calculated in accordance with Appendix B.

     1.1.41 "MW"- means megawatt(s).

     1.1.42 "MWh"- means megawatt-hour(s).

     1.1.43  "NERC" - means  the North  American  Electric  Reliability  Council
including any successor thereto and subdivisions thereof.

     1.1.44 "Operating  Representative(s)" - means the individual or individuals
designated  by  each of the  Parties  who  shall  be  authorized  to act on each
Parties'  respective behalf regarding day to day matters arising hereunder which
are the functions and  responsibilities  of the  Operating  Representatives.  At
least sixty (60) days prior to the commencement of service under this Agreement,
each  Party  shall  give  written  notice  to the other  Party of its  Operating
Representative(s)  designation  and shall  therein  identify the  functions  and
responsibilities of such Operating Representative(s).  Each Party shall promptly
notify  the other  Party of any  subsequent  changes  in such  designation.  The
Operating  Representative(s)  shall  have  no  authority  to  modify  any of the
provisions of this Agreement.

     1.1.45  "Payment Due Date" - shall have the meaning as set forth in Section
6.1.2.

     1.1.46 "Primary Gas Delivery Point" - means the primary  delivery point for
Fuel  located  at the point of  interconnection  between  Southern  Natural  Gas
Company's (SNG) pipeline system and the pipeline lateral serving the Facility.

     1.1.47 "Project" - means the design, engineering,  financing, construction,
testing  and  commissioning  of  the  Facility  and  the  ownership,  operation,
management  and  maintenance  of the  Facility,  all of which  being  reasonably
expected to enable Seller to fulfill its obligations under this Agreement.

     1.1.48 "Prudent  Utility  Practices" - means, at a particular  time, any of
the practices,  methods and acts engaged in or approved by a significant portion
of the electric utility industry in the United States prior to such time, or any
of the practices, methods and acts which, in the exercise of reasonable judgment
in light of the facts known at the time the decision  was made,  could have been
expected to accomplish the desired  results at a reasonable cost consistent with
good business  practices,  reliability,  safety and expedition.  Prudent Utility
Practices is not intended to be limited to the optimum  practice,  method or act
to the  exclusion  of all  others,  but  rather  to be a  spectrum  of  possible
practices,  methods or acts expected to accomplish the desired  results,  having
due  regard  for,  among  other  things,   manufacturers'   warranties  and  the
requirements  of  Governmental  Authorities  of competent  jurisdiction  and the
requirements of this Agreement.

     1.1.49  "PSD  Permit"  -  means  the  "Prevention  of  Significant
Deterioration   (PSD)  Permit"  for  air  emissions   issued  by  ADEM  and  the
Environmental   Protection   Agency  as  a  precondition   to   commencement  of
construction and initial operation of the Facility.

     1.1.50  "Rated  Conditions" - means the conditions for performance
testing, as set forth in Appendix D.

     1.1.51  "Replacement  Cost" - means:  (i) the cost at which Buyer,
acting in a commercially  reasonable manner, produces or purchases the Shortfall
Amount,  plus transactional costs reasonably incurred by Buyer in purchasing the
Shortfall  Amount  and  additional  transmission  charges,  if  any,  reasonably
incurred by Buyer to deliver such Shortfall Amount to the  Transmission  System;
or (ii) at Buyer's  option,  the market price at which Buyer could have acquired
an  amount  of  energy  equal  to  the  Shortfall  Amount  for  delivery  to the
Transmission System, as determined by Buyer in a commercially reasonable manner.
In no event shall  Replacement  Cost include any penalties,  ratcheted demand or
similar  charges,  nor  shall  Buyer  be  required  to  utilize  or  change  its
utilization  of its owned or controlled  assets or market  positions to minimize
Seller's liability.

         .........1.1.52 "Required Commercial Operation Date" - means June 1,
2003; provided, however, that such date may be extended due to a Force Majeure
Event for a term equal to the period of the delay caused by said Force Majeure
Event or as adjusted pursuant to Section 8.2.1.

         .........1.1.53   "Required Threshold Date" - means October 1, 2001.

     .........1.1.54 "Schedule" - when used as a noun, means an energy schedule,
including: (i) economic dispatch of the Unit using automatic generation control;
or (ii) submission of a manual or electronic  schedule of energy to the Dispatch
Center for delivery of energy from the Unit or alternate resources, as submitted
by Buyer in accordance  with the provisions of Article 12 and Appendix C of this
Agreement.  When  used as a verb,  "Schedule"  means  the  act of  submitting  a
Schedule in accordance  with the provisions of Article 12 and Appendix C of this
Agreement.

         .........1.1.55 "Scheduled Outage" - means a planned interruption of a
portion or all of the generation capability of the Unit that has been
coordinated in advance with Buyer with a mutually agreed start date, time and
duration or to which Buyer has consented pursuant to Section 10.2.1.

     .........1.1.56  "Seasonal Performance Period" - means one of the following
periods during the Annual Period: [redacted].

     .........1.1.57  "SERC"  -  means  the  Southeastern  Electric  Reliability
Council, including any successor thereto and subdivisions thereof.

     .........1.1.58  "Site" - means the land in  Autauga  County,  Alabama,  on
which the Facility is to be located.

         .........1.1.59 "Shortfall Amount" - means the excess of (rounded to
the nearest whole MWh) (i) the amount of energy (up to [redacted]) Scheduled by
Buyer in any hour during a Cover Period, over (ii) the amount of energy that
Seller causes to be delivered to the Transmission System in such hour in
response to such Schedule.

     .........1.1.60  "Station Service" - means energy produced by the Unit that
is used to serve the electrical requirements of the Facility.

     .........1.1.61  "Taxes" - means  all  taxes,  fees,  levies,  licenses  or
charges imposed by any  Governmental  Authority,  together with any interest and
penalties thereon.

     .........1.1.62  "Technical  Limits - means the Design Parameters set forth
in Appendix C.

     .........1.1.63  "Term" - means the duration of this Agreement as specified
in Article 2.

     .........1.1.64  "Threshold  Date" - means the date on which Seller obtains
the PSD Permit.

     .........1.1.65  "Transmission  System" - means the high  voltage  electric
transmission system of Alabama

Power Company, either singularly or as part of the integrated transmission
systems of the electric utility operating companies of Southern Company
(currently Alabama Power Company, Georgia Power Company, Gulf Power Company,
Mississippi Power Company, and Savannah Electric and Power Company), as modified
or expanded from time-to-time, as well as any successor in function.

     .........1.1.66  "Unit" - means the first  natural-gas fired combined cycle
generating  unit at the Facility to achieve the Commercial  Operation  Date. The
Unit will be comprised of two  combustion  turbines with two heat recovery steam
generators and a common steam turbine generator.

                                    ARTICLE 2

                                TERM OF AGREEMENT
         2.1......Term. Subject to the termination and survival provisions
herein, this Agreement shall be effective and remain in full force and effect
from the date first written above until the end of the Unit Operating Term
("Term"). The Parties agree to be bound by this Agreement until its termination
according to the terms of this Agreement. Seller's obligation to deliver and
Buyer's obligation to accept capacity and associated energy from the Unit shall
extend from the later of (i) June 1, 2003; or (ii) the Commercial Operation
Date, through May 31, 2010 ("Unit Operating Term").

         2.2......Survival. All provisions of this Agreement that expressly or
by implication come into or continue in force and effect following the
expiration or termination of this Agreement shall remain in effect and be
enforceable following such expiration or termination.

         2.3......Early Termination. Without limiting the operation of other
provisions of this Agreement respecting termination, this Agreement is subject
to termination under the following circumstances.

     .........2.3.1  On or before  October 2, 2000,  Seller may  terminate  this
Agreement by providing the  Environmental  Termination  Notice to Buyer.  Notice
under this provision shall be deemed  effective upon actual receipt by Buyer. In
the event of termination by Seller under this Section 2.3.1, neither Party shall
have any further liability to the other under this Agreement.

         .........2.3.2 If, by July 2, 2001, the APSC has not approved this
Agreement through the granting of a Certificate of Public Convenience and
Necessity in a form suitable to Buyer in its sole discretion ("APSC
Certificate"), then either Party may terminate this Agreement at any time
thereafter upon written notice to the other Party; provided, however, that upon
receipt of such written notice of termination by Seller, Buyer may elect to
waive this condition by providing written notice to Seller within fifteen (15)
Business Days of Seller's notice, in which case the Agreement shall not
terminate and the Parties' obligations shall continue in effect as if the
condition had been satisfied. In the event of termination by either Party under
this Section 2.3.2, neither Party shall have any further liability to the other
under this Agreement. This right of termination, if unexercised, shall expire
upon the issuance of the APSC Certificate.

     .........2.3.3  If this  Agreement  is not  accepted  for  filing  by FERC,
without suspension,  hearing or modification  ("FERC Order"),  then either Party
may terminate this Agreement at any time  thereafter  upon written notice to the
other Party.  Notice under this provision shall be deemed  effective upon actual
receipt by the other Party.  In the event of  termination  by either Party under
this Section 2.3.3,  neither Party shall have any further liability to the other
under this Agreement.  This right of termination,  if unexercised,  shall expire
upon the issuance of the FERC Order.

         .........2.3.4 If, despite diligent efforts, Seller has been unable to
obtain the PSD Permit as of July 2, 2001, and, as of that date, Seller
reasonably determines that, despite best efforts, it will not be able to obtain
such PSD Permit by October 1, 2001, then Seller may elect to terminate this
Agreement by providing written notice to Buyer. This notice must actually be
received by Buyer no later than July 8, 2001. In the event Seller elects to
terminate under this Section 2.3.4, Seller shall immediately pay to Buyer an
amount equal to [redacted] and neither Party shall have any further liability to
the other under this Agreement. This right of termination, if unexercised, shall
expire upon the issuance of the PSD Permit.

     .........2.3.5  Unless,  by December 31, 2001,  FERC has issued and SNG has
accepted a  Certificate  of Public  Convenience  and Necessity  authorizing  the
construction,  ownership and operation of the facilities necessary to effectuate
the Buyer's  executed firm  transportation  agreement(s)  to deliver Fuel to the
Facility  ("FERC  Certificate"),  then Buyer may  terminate  this  Agreement  by
providing written notice to Seller.  Notice under this provision shall be deemed
effective  upon actual  receipt by Seller.  In the event of termination by Buyer
under this Section 2.3.5,  neither Party shall have any further liability to the
other under this  Agreement.  This right of termination,  if unexercised,  shall
expire upon SNG's receipt and acceptance of the FERC Certificate.

                                    ARTICLE 3

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     3.1  Mutual   Representations,   Warranties  and   Covenants.   Each  Party
represents, warrants, and covenants to the other Party that:

          (a) it is and will be duly organized,  and validly  existing under the
     laws of the  state of its  formation;

          (b) it has all requisite corporate power to own, operate and lease its
     properties,  carry  on its  business  as now  conducted,  enter  into  this
     Agreement,  carry out the transactions contemplated hereby, and perform and
     carry out all covenants and  obligations on its part to be performed  under
     and pursuant to this Agreement;

                  (c) it shall use diligent efforts to obtain and maintain all
regulatory authorizations, including any required authorization, from the APSC
and the FERC necessary for it to legally perform its obligations under this
Agreement;

                  (d) the execution, delivery and performance of this Agreement
has been duly authorized by all necessary corporate action, does not and will
not require any further consents or approvals of the Seller's or Buyer's Boards
of Directors or shareholders other than that which has been obtained, and does
not and will not violate any of the terms or conditions of any contract or other
agreement to which it is a party or any Legal Requirements applicable to it;

                  (e) this Agreement constitutes each Party's legally valid and
binding obligation enforceable against it in accordance with the terms thereof,
subject to any equitable defenses;

          (f) there are no bankruptcy  proceedings pending or being contemplated
     by it or, to its knowledge, threatened against it;

                  (g) to its knowledge, there are no pending or threatened
actions or proceedings affecting it before any Governmental Authority which
purports to affect the legality, validity or enforceability of this Agreement or
would be reasonably likely to materially adversely affect its ability to perform
this Agreement; and

                  (h) the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, and the fulfillment of and
compliance with the provisions of this Agreement do not and will not conflict
with or constitute a breach of or a default under, any of the terms, conditions
or provisions of any Legal Requirements, or any partnership agreement, deed of
trust, mortgage, loan agreement, other evidence of indebtedness or any other
agreement or instrument to which it is a party or by which it or any of its
property is bound, or result in a breach of or a default under any of the
foregoing.

         3.2      Covenants of the Seller.
                  -----------------------
                  3.2.1 Seller shall: (i) construct or cause to be constructed;
(ii) own, lease, or control the entire electrical output of; and (iii) operate
and maintain, the Facility, all in accordance with this Agreement for the Term.

                  3.2.2 Seller shall obtain and maintain at all times during the
Term all Consents as and when required by applicable Legal Requirements for the
construction, operation and maintenance of the Facility as contemplated pursuant
to this Agreement except for any such Consents that are required or necessary to
be possessed by Buyer in connection with the supply of Fuel to the Primary Gas
Delivery Point.

                  3.2.3 Seller shall at all times during the Term of this
Agreement construct, operate and maintain the Facility in accordance with
Prudent Utility Practices.

         3.3      Taxes.
                  -----

                  3.3.1 Seller shall pay, or cause to be paid, all Taxes on or
with respect to the production and delivery of energy pursuant to this Agreement
arising prior to delivery to the Interconnection Point (including Taxes related
to the ownership and/or operation of the Facility and income derived therefrom).
Buyer shall pay, or cause to be paid, all Taxes on or with respect to energy
delivered pursuant to this Agreement at and from the Interconnection Point
(including all sales, use, excise or other similar Taxes on the sale to Buyer
and purchase from Seller of capacity and energy pursuant to this Agreement).
Buyer shall also be responsible for all sales, use, excise or other similar
Taxes directly related to the purchase, ownership or use of the Fuel used to
deliver energy to Buyer at the Interconnection Point.

                  3.3.2 Each Party shall use diligent efforts to implement and
administer the provisions of this Agreement in accordance with the intent of the
Parties to minimize Taxes so long as neither Party is materially adversely
affected by such efforts.

                  3.3.3 In the event Seller is required by law or regulation to
remit or pay Taxes that are Buyer's responsibility hereunder, Seller may include
such Taxes in the next monthly Invoice and Buyer shall remit payment thereof in
accordance with Article 6. Conversely, if Buyer is required by law or regulation
to remit or pay Taxes that are Seller's responsibility hereunder, Buyer may
deduct the amount of any such Taxes from the sums otherwise due to Seller under
this Agreement. Any refunds associated with such Taxes will be handled in the
same manner. Nothing herein shall obligate or cause a Party to pay or be liable
to pay any Taxes from which it is exempt under applicable Legal Requirements.

                                    ARTICLE 4

                              REGULATORY APPROVALS
         4.1 APSC. Buyer shall use its diligent efforts to obtain the APSC
Certificate in accordance with Section 2.3.2. Seller agrees to assist and
support Buyer, in a timely manner and to the extent reasonably requested by
Buyer, in obtaining the APSC Certificate.

         4.2 FERC. Seller shall use its diligent efforts to obtain the FERC
Order. Buyer agrees to assist and support Seller, in a timely manner and to the
extent reasonably requested by Seller, in obtaining the FERC Order.

         4.3 ADEM. Seller shall use its diligent efforts to obtain the PSD
Permit in accordance with Section 2.3.4. Buyer agrees to assist and support
Seller, in a timely manner and to the extent reasonably requested by Seller, in
obtaining the PSD Permit.

         4.4 Other Approvals. Seller shall diligently pursue any and all other
Consents required to be possessed by Seller under this Agreement in a manner
that is reasonably expected to enable Seller to perform its obligations under
this Agreement. Buyer agrees to assist and support Seller, in a timely manner
and to the extent reasonably requested by Seller, in obtaining such Consents.

                                    ARTICLE 5

DELIVERY OF CAPACITY AND ENERGY
         5.1      Agreement to Provide Capacity and Energy.
                  ----------------------------------------
                  5.1.1 During the Unit Operating Term, Seller shall sell to
Buyer and Buyer shall purchase from Seller up to the entire electrical output of
the Unit, net of Station Service, except during periods of Scheduled Outages,
Maintenance Outages, and Force Majeure Events.

                  5.1.2 Seller shall deliver to Buyer, and Buyer shall accept
from Seller, at the Delivery Point, the energy Scheduled by Buyer pursuant to
this Agreement: (i) from the Unit; or (ii) when the Unit is unavailable, from an
alternate resource other than the Unit; or (iii) any combination of (i) and
(ii).
                  5.1.3 To the extent that the Unit is capable of producing
energy in excess of the Designated Capacity, Buyer shall be entitled to Schedule
such energy during the Unit Operating Term.

         5.2 Calculation of Monthly Capacity Payments. Except as otherwise
provided herein, Seller shall receive the Monthly Capacity Payment calculated in
accordance with Appendix A. In addition, following [redacted] (as shown in Table
A-1 of Appendix A), a Capacity Availability Performance Adjustment shall be
calculated in accordance with Section C of Appendix A.

          5.3  Calculation  of  Monthly  Energy  Payments.  Except as  otherwise
provided herein, Seller shall receive the Monthly Energy Payment calculated
in accordance with Appendix B.

                                    ARTICLE 6

BILLING AND COLLECTION

         6.1      Capacity and Energy Billing and Payment.
                  ---------------------------------------

                  6.1.1 Subject to the provisions of Section 6.2, by the tenth
(10th) Business Day of each month during the Unit Operating Term, Seller shall
send Buyer an invoice ("Invoice") stating the Monthly Capacity Payment and the
Monthly Energy Payment for the immediately previous month. In addition by the
[redacted] (as shown in Table A-1 of Appendix A), Seller shall invoice or credit
Buyer, as the case may be, for the Capacity Availability Performance Adjustment
described in Appendix A. The provisions of this Section 6.1.1 shall not limit
either Party's right to invoice the other Party for amounts due under other
provisions of this Agreement.

                  6.1.2 All Invoices shall be due and payable by the receiving
Party on or before the tenth (10th) Business Day after such Party's receipt of
such Invoice ( "Payment Due Date"). If any such Payment Due Date is not a
Business Day, then the Payment Due Date shall be the next succeeding Business
Day. Seller may render Invoices by means of facsimile or electronic mail, and
receipt shall be deemed to have occurred upon transmission if confirmed in
writing (by manual or machine-generated confirmation notice). Subject to the
provisions of Section 6.2, the Party receiving an Invoice shall make payment to
the other Party in accordance with such Invoice on or before the Payment Due
Date in immediately available funds, through wire transfer of funds to an
account designated by the other Party, or other means acceptable to the other
Party. Each Invoice shall contain a statement explaining in reasonable detail
how the Invoice payment amounts were calculated.

         6.2      Billing Disputes and Final Accounting.
                  -------------------------------------
                  6.2.1 If a Party questions or contests the amount or propriety
of any payment claimed by the other Party to be due pursuant to this Agreement,
the questioning or contesting Party shall make payment to the other Party
[redacted] until after the settlement of such question or contest in accordance
with this Section 6.2. At the time of any such withholding, the questioning or
contesting Party shall provide the other Party with a written explanation of the
reasons for withholding payment; provided, [redacted].

                  6.2.2 In the event a Party questions or contests the
correctness of any charge or credit, such Party shall provide the other Party
with written notice of such amount and the basis for the question or contest.
The other Party shall promptly review the questioned charge or credit and shall
notify the questioning or contesting Party of any error in the determination of
amounts owed and issue an amended invoice in the amount of any payment that the
questioning or contesting Party is required to make in respect of such
redetermination. If the questioning or contesting Party disputes in good faith
the amended invoice amount, then if agreed by the Parties, such Party may submit
the matter for dispute resolution. To the extent a Party disagrees with the
other Party's basis for questioning the original invoice, it shall provide a
written explanation of its position.

                  6.2.3 Each Party shall have until the end of one (1) year
after the delivery of an invoice to correct or dispute the invoice. If a Party
has made payment under an invoice and thereafter questions or contests the
correctness thereof, the other Party shall not be required to refund any payment
received until such time as it is finally determined that the invoice was in
error.

         6.3 Interest. If either Party does not make a payment required by this
Agreement on or before the Payment Due Date, the amount owed and not paid shall
bear interest (compounded monthly) at the Interest Rate from the Payment Due
Date until such payment, together with interest, is paid. If either Party makes
a payment that is not required by this Agreement, the over payment amount shall
bear interest (compounded monthly) at the Interest Rate from the date the over
payment was received until such over payment, together with interest, is
refunded. If payment by mail is acceptable to the invoicing Party under Section
6.1.2, payment will be accepted without interest if such payment is postmarked
on or before the Payment Due Date. If the Payment Due Date falls on a day other
than a Business Day, the next succeeding Business Day shall be the last day on
which payment can be made or postmarked without interest charges being incurred
pursuant to this Section 6.3.

         6.4 Billing and Payment Records. Until the end of one (1) year after
its receipt of any Invoice, each Party shall make available to the other Party,
and each Party may audit, such books and records of the other Party as are
reasonably necessary for such Party to calculate the Monthly Capacity Payments,
the Monthly Energy Payments or other amounts shown on such Invoice and thereby
to verify the accuracy of the amounts billed. The Parties shall maintain such
respective books and records in accordance with generally accepted accounting
principles applicable from time-to-time.

                                    ARTICLE 7

                    FACILITY IMPLEMENTATION AND CONSTRUCTION
         7.1 Project Implementation. Seller shall: (i) arrange for the
acquisition of or use of the Site for the Term; (ii) apply for, and use diligent
efforts to obtain and maintain, all Consents (including renewals thereof) and
any other approvals of Governmental Authorities that are required in connection
with the Project, including the transactions contemplated under this Agreement;
(iii) comply with Prudent Utility Practices in all aspects of the Project; and
(iv) use diligent efforts to meet the Required Commercial Operation Date and to
otherwise carry out the transactions contemplated under this Agreement.

         7.2      Failure to Achieve Required Threshold Date.
                  ------------------------------------------

                  7.2.1 If the Threshold Date is not achieved on or before the
Required Threshold Date and Seller did not file all required initial
applications for the PSD Permit prior to 90 days after the date of this
Agreement ("PSD Permit Application Deadline") or did not diligently seek to
obtain the PSD Permit through the Required Threshold Date, then, in addition to
Buyer pursuing other remedies available under this Agreement, Seller shall pay
to Buyer [redacted] and neither Party shall have any further obligations to the
other under this Agreement.

                  7.2.2 If the Threshold Date will not occur on or before the
Required Threshold Date and Seller filed all required initial applications for
the PSD Permit by the PSD Permit Application Deadline and diligently sought to
obtain the PSD Permit through the Required Threshold Date, then Seller shall
elect, upon written notice to Buyer on or before the Required Threshold Date
(but no more than ten (10) Business Days prior to the Required Threshold Date)
either: (i) to continue to perform in accordance with the Agreement
("Performance Election"); or (ii) to perform under the provisions of Section 7.3
("Cover Election"). In the event Seller elects the Cover Election, Buyer shall
have thirty (30) days from receipt of Seller's notice in which to accept or
reject such election. In the event that Buyer does not accept Seller's Cover
Election, then this Agreement shall immediately terminate and neither Party
shall have any further liability to the other under this Agreement. The Parties
shall proceed under Section 7.2.3 if the Seller has made the Performance
Election or under Section 7.2.4 if the Seller has made (and Buyer has accepted)
the Cover Election.

                  7.2.3 If Seller elects the Performance Election, then the
Required Threshold Date shall be extended to April 2, 2002 and Seller shall
continue to diligently attempt to obtain the PSD Permit. In the event that the
Threshold Date is not achieved by the extended Required Threshold Date, then
Seller shall promptly pay to Buyer [redacted], and Buyer may pursue any other
remedies under Section 14.4.1 of this Agreement (other than the payment of
further liquidated damages). At any time prior to the extended Required
Threshold Date, Seller may provide written notice that it cannot achieve the
Threshold Date by the extended Required Threshold Date. If Seller provides such
notice, Seller shall promptly pay to Buyer [redacted], and Buyer may pursue any
other remedies under Section 14.4.1 of this Agreement (other than the payment of
further liquidated damages). Upon payment of liquidated damages under this
Section 7.2.3, this Agreement shall immediately terminate and neither Party
shall have any further obligations to the other under this Agreement.

                  7.2.4 If Seller elects the Cover Election and Buyer accepts
such election, then Buyer shall notify Seller in its notice of acceptance to
Seller whether Seller shall be required to provide energy in an amount not to
exceed the Cover Amount to Buyer for: [redacted] ("Cover Period"). If Buyer has
accepted Seller's Cover Election, then Seller will provide energy in an amount
not to exceed the Cover Amount to Buyer in accordance with Section 7.3 for the
Cover Period selected by Buyer under this Section.

         7.3      Cover Period Energy.
                  -------------------

                  7.3.1 If Seller becomes obligated pursuant to Section 7.2 to
provide energy during the Cover Period, Seller shall (i) on the first Business
Day of the Cover Period, take such action necessary to assume all of Buyer's
obligations after the Cover Period, if any, related to the firm transportation
agreement(s) executed by Buyer in order to deliver Fuel to the Facility,
including any and all payment obligations; and (ii) promptly reimburse Buyer for
expenditures that are not otherwise recovered by Buyer (including those related
to improvements to the Transmission System) to the extent such expenditures are
reasonably made by Buyer in preparation for the receipt and transmission of
energy from the Unit.

          7.3.2  During any Cover  Period,  Buyer and Seller  agree as  follows:
     7.3.2.1 Buyer shall issue  Schedules in accordance  with the  provisions of
     this
Agreement (but not in excess of the Cover Amount), and Seller shall, at its
expense, deliver or cause to be delivered all energy so Scheduled to any points
on the Transmission System (including interfaces) that are capable of receiving
such energy pursuant to Southern Companies' Open Access Transmission Tariff (or
its successor in function). Buyer shall make Monthly Capacity Payments in
accordance with Appendix A; provided, however, that for purposes of the Capacity
Availability Performance Adjustment calculation during the Cover Period: (i)
Designated Capacity shall equal [redacted]; and (ii) if Seller achieves an
Actual Demand Availability of at least [redacted] for a Cover Period based on
Seller's deliveries in response to Buyer's Schedule, the Capacity Adjustment
Factor for the applicable Cover Period shall be [redacted]. If such Actual
Demand Availability is less than [redacted], the Capacity Adjustment Factor for
the applicable Cover Period shall be [redacted].

          7.3.2.2  Buyer will pay Seller in  accordance  with Appendix B for the
     Scheduled energy delivered during the Cover Period.

          7.3.2.3 If Seller fails to deliver any Scheduled energy,  Seller shall
     pay to Buyer,

within ten (10) Business Days of receipt of an invoice therefor, an amount equal
to Buyer's Incremental Replacement Costs. Buyer will submit such invoices on a
monthly basis unless the accrued amount of unpaid Incremental Replacement Costs
exceeds [redacted], in which case Buyer may invoice Seller in its discretion.

          7.3.2.4 At the end of the Cover Period, this Agreement shall terminate
     and neither Party shall have any further  liability to the other under this
     Agreement.

         7.4      Failure to Meet Required Commercial Operation Date.
                  --------------------------------------------------

                  7.4.1 Unless Buyer has accepted Seller's Cover Election
pursuant to Section 7.2.2, if the Unit does not achieve the Commercial Operation
Date on or before the Required Commercial Operation Date, Seller shall pay
liquidated damages to Buyer in the amount of the daily damage for each day of
the delay in achieving the Commercial Operation Date determined pursuant to
Appendix F.

                  7.4.2 Buyer shall be entitled to daily damage amounts pursuant
to Section 7.4.1 and Appendix F until the earlier of : (i) the date Buyer
receives written notice from Seller that the Unit cannot achieve a Commercial
Operation Date within [redacted] of the Required Commercial Operation Date; (ii)
the Commercial Operation Date of the Unit; or (iii) [redacted] the Required
Commercial Operation Date. Under the circumstances described in (i) or (iii)
above, Seller shall pay Buyer [redacted] and the Agreement shall terminate
immediately.
                                    ARTICLE 8

                          INTERCONNECTION AND METERING
         8.1 Interconnection. Buyer shall construct the Interconnection
Facilities in order to electrically connect the Unit to the Transmission System
at the Interconnection Point. Seller shall be responsible, and shall reimburse
Buyer, for actual costs incurred by Buyer in constructing the Interconnection
Facilities, so long as the Interconnection Facilities that are actually
constructed do not materially deviate from those described in the attached
Appendix H. Buyer shall have ownership of the Interconnection Facilities at all
times.

         8.2      Delay in Interconnection

                  8.2.1 If for any reason by September 2, 2002: (i) Buyer fails
to complete the Interconnection Facilities necessary to interconnect the Unit to
the Transmission System; or (ii) the Transmission System is not capable of
providing or receiving energy to accommodate Seller's start up and testing
activities for the Unit, the Required Commercial Operation Date shall, subject
to Section 8.2.2, be changed to a date that is [redacted] after the date such
conditions are satisfied. If the Required Commercial Operation Date is so
changed, the Monthly Capacity Payments shall commence [redacted] as if such
change had not occurred. The receipt of such capacity payments shall be Seller's
sole and exclusive remedy for Buyer's failure to complete the Interconnection
Facilities by the stated deadline.

                  8.2.2 The Required Commercial Operation Date shall change
pursuant to Section 8.2.1 only to the extent that Seller, despite due diligence,
is rendered unable to meet the original Required Commercial Operation Date as a
consequence of Buyer's delay in the completion of the Interconnection
Facilities.

         8.3 Protective Devices. Seller shall, at its own cost, provide, install
and maintain internal breakers, relays, switches, synchronizing equipment and
other associated protective control equipment necessary to maintain the
reliability, quality and safety of the electric power production of the Facility
in accordance with Prudent Utility Practices.

         8.4      Meters.
                  ------

                  8.4.1 Seller shall design, locate, construct, install, own,
operate and maintain the Metering System in accordance with Prudent Utility
Practices in order to measure and record the amount of energy and capacity
delivered from the Unit to Buyer at the Interconnection Point. The meters shall
be of a mutually acceptable accuracy range and type. The methods for adjusting
for all applicable transformer losses and station service loads shall be
mutually acceptable. Buyer may, at its own cost, install additional meters or
other such facilities, equipment or devices on Buyer's side of the
Interconnection Point as Buyer deems necessary or appropriate to monitor the
measurements of the Metering System. The Parties shall mutually agree on the
telemetering equipment that is appropriate to coordinate the Facility with the
Dispatch Center and Seller shall, at its sole cost, install such telemetering
equipment. The telemetered data shall be delivered by Seller to the electrical
switchyard of the Facility.

                  8.4.2 Seller shall inspect and test all meters at such times
as will conform to Prudent Utility Practices, but not less often than once every
year. Seller shall be responsible for all costs and expenses incurred in
connection with such inspections or tests.

                  8.4.3 If the Metering System fails to register, or if the
measurement made by a metering device is found upon testing to vary by more than
[redacted] from the measurement made by the standard meter used in the test, an
adjustment shall be made correcting all measurements of energy made by the
Metering System during: (i) the actual period when inaccurate measurements were
made by the Metering System, if that period can be determined to the mutual
satisfaction of the Parties; or (ii) if such actual period cannot be determined
to the mutual satisfaction of the Parties, the later half of the period from the
date of the last test of the Metering System to the date such failure is
discovered or such test is made ("Adjustment Period"). If the Parties are unable
to agree on the amount of the adjustment to be applied to the Adjustment Period,
the amount of the adjustment shall be determined: (i) by correcting the error if
the percentage of error is ascertainable by calibration, tests or mathematical
calculation; or (ii) if not so ascertainable, by estimating on the basis of
deliveries under similar conditions during the period since the last test.
Within thirty (30) days after the determination of the amount of any adjustment,
Buyer shall pay Seller any additional amounts then due for energy or Designated
Capacity during the Adjustment Period or Buyer shall be entitled to a credit
against any subsequent payments for energy or Designated Capacity, as the case
may be.

                  8.4.4 Buyer and its representatives shall be entitled to be
present at any test, inspection, maintenance and replacement of any part of the
Metering System performed by Seller relating to obligations under this
Agreement.

                                    ARTICLE 9

            COMMERCIAL OPERATION, TESTING AND DESIGNATION OF CAPACITY
         9.1 Initial Synchronization. Seller shall not operate the Unit in
parallel with the Transmission System without the prior written acknowledgment
of Buyer that the Unit meets Buyer's requirements for parallel operation. Such
acknowledgment pursuant to this Agreement shall not be unreasonably withheld or
delayed. Seller shall notify Buyer of the initial synchronization of the Unit to
the Transmission System at least forty-five (45) days prior to the proposed date
of such initial synchronization or such shorter period as the Parties may agree.

         9.2      Commercial Operation Test.
                  -------------------------

                  9.2.1 The initial Demonstrated Capability of the Unit shall be
established in accordance with the performance testing procedures set forth in
Appendix D. Seller shall nominate the initial Designated Capacity following such
performance testing, but not later than the day before the Commercial Operation
Date. Such nomination may not exceed the Demonstrated Capability.

                  9.2.2 Seller may, at its option, perform additional capacity
tests prior to ninety (90) days after the later of the Required Commercial
Operation Date and the Commercial Operation Date. If such additional tests
result in a Demonstrated Capability greater than the Designated Capacity, Seller
may re-nominate the Designated Capacity at such Demonstrated Capability. If the
additional capacity tests (or the initial capacity test when no additional tests
are performed) of the Unit indicate that the Demonstrated Capability is less
than the lower end of the total Commercial Operation Test Capacity Range set
forth in Table D-1 of Appendix D ("Commercial Operation Test Range"), Seller
shall submit, within 15 Business Days after the capacity test, a cure plan to
Buyer in order to raise such Demonstrated Capability to at least the lower end
of such range. If Seller fails to timely submit such cure plan or implement the
cure plan (including implementing such actions as Buyer may reasonably request),
or if the Demonstrated Capability of the Unit remains below the lower end of the
Commercial Operation Test Range [redacted] after the Required Commercial
Operation Date ("Cure Period"), then: (i) Seller shall pay Buyer as liquidated
damages an amount determined under Section 1 of Appendix E for the difference
between the Demonstrated Capability and the lower end of the Commercial
Operation Test Range; and (ii) the lower end of the Contract Capacity shall be
set at a level equal to the lesser of: (a) 10 MW below the most recent
Demonstrated Capability; or (b) the lower end of the current Contract Capacity.
Seller shall make the above-described payment within five (5) Business Days of
Buyer's request for payment.

         9.3      Capacity Examination.
                  --------------------
                  9.3.1 Upon Seller's declaration of the Designated Capacity,
Buyer may examine the performance of the Unit over the previous Annual Period to
determine if the actual capacity [redacted] based on historic operating data, as
adjusted for Rated Conditions, is less than the then current Designated
Capacity. If such actual capacity is less than the Designated Capacity, Buyer
may, on or before May 10 annually, require Seller to re-demonstrate the capacity
of the Unit in accordance with the procedure set forth in Appendix D. If the
performance test indicates that the Unit's Demonstrated Capability, is less than
the lower end of the then current Contract Capacity for the Unit, then: (i)
Seller may conduct additional capacity tests on or before May 20 annually; and
(ii) if the Demonstrated Capability established by the most recent capacity
examination is less than the lower end of the current Contract Capacity, then
Seller shall pay Buyer as liquidated damages an amount determined under Section
1 of Appendix E for the difference between such Demonstrated Capability
established by the most recent capacity examination and the lower end of the
current Contract Capacity. In addition, the lower end of the current Contract
Capacity shall be reset at a level 10 MW below such Demonstrated Capability.
Seller shall make the above-described payment within five (5) Business Days of
Buyer's request for payment.

                  9.3.2 Any reduction in the Demonstrated Capability of the Unit
through a capacity examination will result in a reduction of the Designated
Capacity of the Unit to the Demonstrated Capability and a corresponding
reduction in capacity payments in accordance with the Monthly Capacity Payment
calculation set forth in Appendix A.

                  9.3.3 Subject to Section 14.2.8 of this Agreement, the payment
of liquidated damages pursuant to this Article 9 shall be Buyer's sole and
exclusive remedy for a reduction in the lower end of the Contract Capacity.
         9.4 Disputes Concerning Capacity Tests. In the event the Parties
disagree with the performance test results of any capacity test, representatives
from both Parties shall meet to resolve the dispute. If the dispute cannot be
resolved between the Parties, an independent third party expert shall be chosen
that is acceptable to both Parties to make a determination concerning the test
results. If such dispute is not resolved by May 31, the Designated Capacity for
the upcoming Annual Period may not exceed the Demonstrated Capability of the
Unit based on the most recent undisputed capacity examination, subject to the
outcome of this dispute resolution process. The independent third party expert's
determination shall be applied to establish the Demonstrated Capability as if no
dispute had arisen and all capacity billing under Section 5.2 shall (if
necessary) be adjusted retroactively to reflect Designated Capacity equal to
such determination. Seller may, however, nominate a different amount of
Designated Capacity for prospective application consistent with other provisions
of this Agreement.

                                   ARTICLE 10

                            OPERATION AND MAINTENANCE

         10.1 Operation and Maintenance. Seller shall manage, control, operate
and maintain all parts of the Facility in a manner consistent with Prudent
Utility Practices, taking into account Buyer's right to Schedule the Unit.
Seller shall also operate the Facility in accordance with applicable reliability
criteria and guides of the SERC and NERC.

         10.2     Scheduled and Maintenance Outages.
                  ---------------------------------

                  10.2.1 Commencing in 2002 and each year thereafter, Seller
shall submit to Buyer, before September 1, maintenance schedules and outage
plans ("Scheduled Outages Plans") for the remaining Term or the next four Annual
Periods, whichever is less. Seller shall not schedule maintenance of the Unit
during the months of June through September of any year that would decrease the
capacity output of the Unit below the Designated Capacity without the prior
written consent of Buyer. Buyer shall have thirty (30) days to review the
proposed Scheduled Outage Plans and may approve or reject the Scheduled Outage
Plans in whole or in part. The Scheduled Outage Plans are subject to the
approval of Buyer, which approval shall not be unreasonably withheld or delayed.
Seller shall resubmit revised Scheduled Outage Plans to Buyer within thirty (30)
days of Buyer's rejection and Buyer and Seller agree to use best efforts to
promptly develop Scheduled Outage Plans that are mutually acceptable to the
Parties.

                  10.2.2 In addition to Scheduled Outages, Seller may request an
unlimited number of Maintenance Outages during any Annual Period. Seller shall
submit a written request to the Buyer for each Maintenance Outage at least
twenty-four (24) hours in advance. Such request shall identify the equipment and
capacity that will not be available for Scheduling and the proposed start time
and duration for the Maintenance Outage. Buyer shall respond to Seller's request
as soon as reasonably practicable. Seller shall not take a Maintenance Outage
without Buyer's prior written consent, and such consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that the
Parties acknowledge that it shall be reasonable for Buyer to deny any request
for a Maintenance Outage if Buyer reasonably believes that it may Schedule the
Unit to a level that would require the availability of the equipment that is
proposed to be unavailable during the Maintenance Outage. Buyer shall have the
right to revoke its consent to a Maintenance Outage if changed conditions
require Scheduling of the capacity scheduled to be unavailable during such
Maintenance Outage; provided, however, that Buyer may only revoke its consent if
it provides Seller with notice of revocation prior to the scheduled start of the
Maintenance Outage and agrees to cover the reasonable cost (if any) of
revocation. In addition, if Buyer reasonably requests Seller to return all or
part of that portion of the Unit that is affected by the Maintenance Outage to
full availability status, Seller shall comply as soon as reasonably practical.

                  10.2.3 If Seller has a Scheduled Outage or Maintenance Outage,
and such Scheduled Outage or Maintenance Outage occurs or would occur coincident
with an Emergency, Buyer shall notify Seller of the Emergency. Buyer may request
Seller to reschedule the outage or, if the outage has begun, to expedite the
completion thereof, and Seller shall make all good faith efforts to comply with
such request.

         10.3 Access to the Site and the Facility Seller grants Buyer and its
designated employees and agents the right to enter the plant Site with such
prior notice to Seller as is reasonable to: (i) install, operate, maintain,
replace and/or remove the Interconnection Facilities; (ii) inspect, maintain,
and test meters and other Buyer equipment; (iii) interconnect, interrupt,
monitor, or measure energy generated by the Facility in accordance with the
terms of this Agreement; (iv) monitor performance tests; (v) inspect the
Facility; and (vi) take such action as may be reasonably necessary to exercise
Buyer's rights under this Agreement.

         10.4 Availability of Records. Seller shall keep accurate records and
all other data necessary for the purposes of proper administration of this
Agreement in accordance with the following guidelines:

                  10.4.1 All such records shall be maintained for a minimum of
four (4) years after the creation of such record or data and for any additional
period of time required by regulatory agencies with jurisdiction over Seller.

                  10.4.2 Seller shall maintain an accurate and up-to-date
operating log at the Facility with records of: (i) real and reactive power
production for each clock hour; (ii) changes in operating status; (iii)
Scheduled Outages, Maintenance Outages, and forced outages; (iv) any unusual
conditions found during inspections; and (v) any significant events related to
the operation of the Facility.

                  10.4.3 Buyer shall have the right from time to time, upon
reasonable notice to Seller, to examine the records and data of Seller relating
to this Agreement.

         10.5 Disclaimer. Seller understands and agrees that Buyer's receipt and
review of any material related to the Project or any physical inspection of the
Facility conducted by Buyer under any of the provisions of this Agreement is
solely for its own information. By conducting such reviews or inspections, Buyer
makes no endorsement of the design or representation or warranty of the safety,
durability or reliability of the Facility, all of which are the sole
responsibility of Seller in accordance with the terms of this Agreement and
Buyer shall not be deemed to have accepted any condition of the Facility which
is not in full compliance with the requirements of this Agreement. Seller shall
in no way represent to any third party that, as a result of the Buyer's receipt
and review of any material or any inspections, Buyer is in any way responsible
for the engineering or construction soundness of the Facility.

         10.6 Air Permits. Seller shall be obligated to file for, obtain and
maintain, for the periods required by Legal Requirements during the Term, the
PSD Permit, the Title V Permit and all other Consents pertaining to air
emissions necessary for the performance of Seller's obligations under this
Agreement ("Air Permits"). The Air Permits shall authorize the operation of the
Unit for a minimum of [redacted] per year during the Unit Operating Term
("Minimum Level"). The Minimum Level shall be exclusively dedicated to Buyer's
use in accordance with its Schedule. If at any time during the Unit Operating
Term Seller is not authorized to operate the Unit at the Minimum Level, the
Parties shall mutually agree on an arrangement whereby Seller shall provide
additional energy to Buyer in order to compensate Buyer for the inability to
operate the Unit at the Minimum Level. So long as Seller complies with such
agreement, Seller shall be deemed to have satisfied the requirement under this
Section 10.6 with respect to the Air Permits.

                                   ARTICLE 11

                             FUEL SUPPLY
         11.1     Overview.
                  --------
                  11.1.1 At all times during the Unit Operating Term, the Unit
shall be capable of utilizing Fuel as Scheduled by Buyer in order to produce the
energy committed to Buyer under this Agreement. Buyer shall have the
responsibility for procuring at its sole cost and making available at the
Primary Gas Delivery Point the quantities of Fuel at the rates of delivery
required to accommodate Buyer's Scheduling instructions. To determine the
quantities of Fuel to be scheduled by Buyer for transportation to the Primary
Gas Delivery Point in order to satisfy Buyer's Scheduling instructions, Buyer
shall calculate the quantities of Fuel to be delivered by multiplying the
Guaranteed Heat Rate set forth in Appendices D & G (or a greater or lesser rate
agreed to by the Parties) by the number of kWh Scheduled by Buyer plus the
quantity of Fuel agreed upon as necessary for start-up, ramp up and ramp down
(such total quantity is hereinafter referred to as the "Transportation
Quantity").

                  11.1.2 Buyer shall pay, in accordance with Appendix B, for all
Fuel used to generate energy that is delivered to Buyer pursuant to Buyer's
Scheduling instructions, including energy received during periods of ramp up and
ramp down. Seller shall pay for Fuel used at the Facility for all other
purposes, including (but not limited to) Station Service, initial start-up,
testing and synchronization of the Unit, Unit start-up, capacity examinations
and sales to third parties. Seller shall be responsible for the cost of Fuel for
start-up of the Unit through the operation of the Monthly Fuel Cost Adjustment
under Section E of Appendix B.

                  11.1.3 The Parties acknowledge the possibility that, through
future discussions, they may be able to agree upon a mutually beneficial
arrangement whereby Seller would assume all of the Fuel (and related
transportation) management responsibilities under this Agreement. In such event,
the Parties shall negotiate any necessary modifications to this Agreement to
effectuate this transfer of responsibilities. It is expressly understood,
however, that nothing in this Section 11.1.3 imposes any obligation on either
Party to enter into discussions or agreements with respect to any modifications
to this Agreement.

         11.2     Transportation Capacity.
                  -----------------------
                  11.2.1 The Parties recognize that Buyer, through its agent,
Southern Company Services, Inc., has subscribed to[redacted] of firm
transportation on SNG's pipeline system, which will be used by Buyer to
transport Fuel to the Primary Gas Delivery Point for the Term (such firm
capacity is hereinafter referred to as the "Firm Capacity"). Except as otherwise
provided in this Section 11, Buyer shall bear all of the costs incurred under
the firm transportation agreement providing for such Firm Capacity; provided,
however, that in the event Seller fails to achieve the Commercial Operation Date
by June 1, 2003, unless such failure is due to the circumstances described in
Section 8.2, then Buyer shall release to Seller pursuant to Section 22.6(d) of
the General Terms and Conditions contained in SNG's FERC Gas Tariff (or any
successor provision) and Seller shall assume the Firm Capacity, and shall bear
all of the costs of such transportation. Seller shall release such Firm Capacity
back to Buyer when the Unit achieves the Commercial Operation Date. The release
of the Firm Capacity is also subject to the provisions of Section 7.3.1 related
to the Parties' obligations in connection with the Cover Period. In addition to
the costs associated with the Firm Capacity, Buyer shall bear all of the costs
associated with any other transportation capacity required in order to deliver
the Fuel necessary to meet Buyer's Schedule. To the extent Buyer desires to have
or use storage capacity in order to better manage the Fuel requirements of the
Unit, Buyer shall be obligated to obtain such capacity, at its cost. Following
the expiration or termination of this Agreement, Buyer shall take appropriate
action to convey to Seller the sole and exclusive right to utilize the Firm
Capacity, in consideration for Seller's agreement to bear all of the costs
thereafter incurred under the firm transportation agreement providing for such
Firm Capacity.

                  11.2.2 Buyer may cause to be acquired, constructed, owned,
operated and maintained, at Seller's expense, all facilities, infrastructures
and property interests that are necessary for Seller to receive, measure and use
Fuel delivered at the Primary Gas Delivery Point on behalf of Buyer so as to
enable the Unit to produce energy as committed to Buyer under this Agreement.

                  11.2.3 Buyer shall be responsible for making the necessary
arrangements, including the scheduling of the Transportation Quantity and,
during such time as Buyer is designated the downstream operator pursuant to
Section 11.2.8, the confirmation of the Transportation Quantity, to cause the
delivery of the Transportation Quantity to the Primary Gas Delivery Point and
shall promptly communicate to Seller the details of such scheduling
arrangements. Seller shall be responsible for transporting or arranging for the
transportation of the Transportation Quantity from the Primary Gas Delivery
Point to the Unit.

                  11.2.4 Seller agrees to accept at the Primary Gas Delivery
Point any Transportation Quantity meeting the minimum quality requirements for
delivered Fuel under SNG's FERC Gas Tariff and the applicable transportation
agreement(s).

                  11.2.5 The Parties shall exercise diligent efforts to minimize
any imbalances or other penalties or charges from transporters of Fuel delivered
to the Facility ("Imbalance Charges"). If Buyer or Seller receives an invoice
from a transporter for Imbalance Charges, the Parties shall determine the cause
for such charges. If the Imbalance Charges were incurred as a result of Buyer's
actions or inaction (which shall include (without limitation) Buyer's failure to
schedule or make available to transporter the Transportation Quantity), then
Buyer shall pay such Imbalance Charges. If the Imbalance Charges were incurred
as a result of Seller's actions or inaction (which shall include, without
limitation, Seller's failure to accept the Transportation Quantity or its
acceptance of quantities of Fuel in excess of the Transportation Quantity unless
such excess was rescheduled by Buyer), then Seller shall pay such Imbalance
Charges. Imbalance Charges that are not due to the action or inaction of Buyer
or Seller or whose cause cannot be determined, including (but not limited) to
Force Majeure Events or forced outage events, shall be shared equally by Buyer
and Seller. In the event any entity other than Buyer causes the delivery of Fuel
to or utilizes Fuel delivered at the Primary Gas Delivery Point, the Parties
agree that the following principles shall apply: (i) to the extent Buyer has
scheduled deliveries of Fuel, Buyer's scheduled deliveries of Fuel shall be
deemed to be the first through the meter and shall be used exclusively to
generate energy in accordance with Buyer's Scheduling instructions; (ii) any
Imbalance Charges incurred by Buyer as a result of deliveries of Fuel at the
Primary Gas Delivery Point in excess of the Transportation Quantity (unless such
excess was scheduled by Buyer) shall be borne exclusively by Seller; (iii) in
the event Seller uses any Fuel scheduled by Buyer for delivery for its account
for any purpose other than the generation of energy on behalf of Buyer pursuant
to Buyer's Scheduling instructions (including ramp up and ramp down associated
with such Scheduling instructions), Seller shall pay Buyer for each quantity of
Fuel so used by Seller an amount calculated in accordance with Section E of
Appendix B; and (iv) Seller shall otherwise indemnify and hold Buyer harmless
from any and all losses, costs, damages and expenses incurred by Buyer as a
result of the use of the Primary Gas Delivery Point by Seller or any other
entity to deliver Fuel for the generation of energy for any entity other than
Buyer.

     11.2.6  Buyer has or will  secure  the right for it (or its  designee),  to
install,  own and operate telephone  line(s),  monitoring  equipment,  necessary
appurtenances, and right(s) of way at or near the Primary Gas Delivery Point and
to install,  own, maintain and operate facilities to remotely monitor and record
the Fuel flows through the SNG meter  station  recording the delivery of Fuel to
the Primary Gas Delivery  Point.  11.2.7 All Fuel supplied by Buyer  pursuant to
this Agreement shall be measured at the Primary Gas Delivery Point. Risk of loss
of Fuel supplied by Buyer pursuant to this  Agreement  shall transfer from Buyer
to Seller at the Primary Gas Delivery Point.

                  11.2.8 Until the earlier of: (i) the expiration or termination
of this Agreement; or (ii) such time as additional gas fired electric generating
units at the Site achieve commercial operation, Seller agrees to delegate to
Buyer its rights and obligations under SNG's FERC Gas Tariff as the "downstream
operator" at the Primary Gas Delivery Point in order that Buyer may administer
the transportation of Fuel through such point. Except as otherwise provided
herein, Buyer shall indemnify and hold Seller harmless from any and all losses,
costs, damages and expenses incurred by Seller as a result of actions or
omissions of Buyer as the "downstream operator". As the designated downstream
operator, Buyer shall be responsible for confirming all Fuel flow through the
Primary Gas Delivery Point, serving as the point of contact with SNG with
respect to operation of such point and allocating all Fuel flow through such
point. The implementation of this Section 11.2.8 shall be subject to such
further procedures as the Parties may develop through the Operating
Representatives. Following the date on which additional electric generating
units at the Site achieve commercial operation, Buyer and Seller will negotiate
whether there should be any change in the designation of the downstream
operator.

                                   ARTICLE 12

DISPATCH, SCHEDULING AND TRANSMISSION
         12.1 Scheduling. Seller shall ordinarily permit Buyer to place the Unit
under Buyer's automatic generation control in normal mode operation and call
upon Seller's operation of the Unit in economic dispatch; however, Buyer or
Seller reserves the right to require Buyer to Schedule the dispatch of the Unit
in accordance with the procedures set forth in Appendix C.

     12.2 Scheduling Alternate Resources.  In the event that alternate resources
are  utilized  by Seller to supply  energy,  Buyer shall  follow the  procedures
established by the Operating Representatives.

         12.3     Transmission.
                  ------------
                  12.3.1 Buyer shall be responsible for all costs associated
with and for making all necessary transmission arrangements, including tagging
and any required ancillary services, with the transmission service provider for
delivery of capacity and energy from and beyond the Delivery Point.

                  12.3.2 Seller shall bear all costs and losses and shall be
responsible for making all arrangements for transmission service, including
tagging and any required ancillary services, with respect to delivery of
capacity and energy from an alternate resource to the Delivery Point. To the
extent the Delivery Point is not the Interconnection Point; Seller: (i) assumes
all risk associated with the availability and scheduling of the transmission
capability required for delivery beyond the Delivery Point; and (ii) shall
compensate Buyer for any losses on the Transmission System beyond those that
would have occurred had the Delivery Point been the Interconnection Point. In no
event shall Buyer be required to provide compensation to Seller for a reduction
in losses occasioned by such deliveries from alternate resources.

         12.4     Emergencies.
                  -----------

                  12.4.1 The Parties recognize that Buyer is a member of NERC
and that, to ensure continuous and reliable electric service, Buyer operates its
system in accordance with the operating criteria and guidelines of NERC. If an
Emergency is declared, the Dispatch Center will notify Seller's personnel and,
if requested, Seller's personnel shall immediately place the energy of the Unit
within the exclusive control of the Dispatch Center for the duration of such
Emergency. Without limiting the generality of the foregoing, the Dispatch Center
may require Seller's personnel to raise or lower production of energy generated
by the Unit to maintain safe and reliable load levels and voltages on the
Transmission System.

                  12.4.2 Seller shall cooperate with Buyer in establishing
Emergency plans, including (without limitation) recovery from a local or
widespread electrical blackout, voltage reduction in order to effect load
curtailment, and other such plans that may be necessary or appropriate under the
circumstances.

         12.5.    Disconnection.
                  -------------

                  12.5.1 Seller shall control and operate the Unit consistent
with Buyer's Schedule; provided, however, that, Buyer may direct that the Unit
be immediately disconnected from the Transmission System during an Emergency or
if, in Buyer's sole discretion, it is necessary to construct, install, maintain,
repair, replace, remove, investigate, inspect or test any part of the
Interconnection Facilities or the Transmission System. Upon receipt of notice
directing disconnection, Seller shall carry out the required action without
undue delay. Buyer shall not Schedule energy during a disconnection.

                  12.5.2 For any disconnection or reconnection caused by
Seller's negligence or willful misconduct, Seller shall bear any reasonable cost
incurred by Buyer as a result thereof, and the Unit shall be deemed to be in an
Unplanned (Forced) Outage during the time any such disconnection is in effect
for purposes of the Actual Demand Availability calculation in Appendix A.

                  12.5.3 Buyer shall bear any reasonable cost incurred by Seller
as a result of any disconnection or reconnection caused by Buyer's negligence or
willful misconduct.

                                   ARTICLE 13
<
                                  FORCE MAJEURE

         13.1 Definition of Force Majeure Event. For the purposes of this
Agreement, a "Force Majeure Event" as to a Party means any occurrence,
nonoccurrence or set of circumstances that is beyond the reasonable control of
such Party and is not caused by such Party's negligence or lack of due
diligence, which prevents the Party from being able to perform its obligations
hereunder, including, without limitation, strike or stoppage of labor; flood,
ice, earthquake, windstorm or eruption; fire; explosion; invasion, riot or civil
war, commotion or insurrection; sabotage, terrorism or vandalism; military or
usurped power; or act of God or of a public enemy. The term Force Majeure Event
shall not include: [redacted].

         13.2 No Breach or Liability. Either Party shall be excused from
performance and shall not be construed to be in default in respect of any
obligation hereunder for so long as failure to perform such obligation shall be
due to a Force Majeure Event.

         13.3 Capacity and Energy Payments. Buyer shall have no obligation to
make Monthly Capacity Payments and Monthly Energy Payments during the suspension
of performance due to or resulting from a Force Majeure Event; [redacted].

     13.4  Mitigation.  Following the occurrence of a Force Majeure  Event,  the
affected Party shall:

          (i) give the other Party notice thereof, followed by written notice if
     the first notice is
not written, as promptly as possible after such Party becomes aware of such
Force Majeure Event, describing the particulars of such Force Majeure Event;

                  (ii) use diligent efforts to remedy its inability to perform
as soon as practicable; provided, however, that this Section 13.4 shall not
require the settlement of any non site-specific strike, walkout, lockout or
other general labor dispute on terms which, in the sole judgment of the Party
involved in the dispute, are contrary to its interest; and

                  (iii) when it is able to resume performance of its obligations
under this Agreement, give the other Party written notice to that effect.

         13.5 Suspension of Performance. The suspension of performance due to a
Force Majeure Event shall be of no greater scope and of no longer duration than
is required by such Force Majeure Event. No Force Majeure Event shall extend
this Agreement beyond its Term.

         13.6     Extended Force Majeure Events.
                  -----------------------------
                  13.6.1 If a Party has reason to believe that a Force Majeure
Event which is preventing the other Party from performing its obligations
hereunder will result in a suspension of such performance for a term of six (6)
months or longer, that Party may request that the other Party submit a "Force
Majeure Remedy Plan," which the other Party shall submit to the requesting Party
within thirty (30) days of the request. If the Party claiming an excuse under
this Article 13 has reason to believe that the Force Majeure Event will result
in a suspension of such performance for a term of six (6) months or longer, it
shall notify the other Party promptly and shall submit a Force Majeure Remedy
Plan to the other Party within thirty (30) days thereafter. The Force Majeure
Remedy Plan shall set forth a course of repairs, improvements, changes to
operations or other actions which should permit the affected Party to perform
its obligations under this Agreement as soon as reasonably practicable.

                  13.6.2 While a Force Majeure Remedy Plan is in effect, upon
request the Party prevented from performing its obligations due to the Force
Majeure Event shall provide a single or periodic status report(s) to the other
Party notifying the other Party of the steps which have been taken to remedy the
Force Majeure Event and the expected remaining duration of the Party's inability
to perform its obligations.

                  13.6.3 The Party not prevented from performing its obligations
due to the Force Majeure Event may at any time terminate this Agreement upon ten
(10) Business Days prior written notice if: (i) the affected Party fails to
provide a Force Majeure Remedy Plan as provided for in this Section 13.6; (ii)
the affected Party fails to carry out the Force Majeure Remedy Plan in a method
reasonably designed to cause that Party to be able to perform its obligations
hereunder; or (iii) the affected Party remains unable to perform its obligations
hereunder nine (9) months following the submission of the Force Majeure Remedy
Plan.

                  13.6.4 Upon termination of this Agreement as provided in
Section 13.6.3, the Parties shall have no further liability or obligation to
each other except for any obligation arising prior to the date of such
termination.
                                   ARTICLE 14

                       FAILURE OF PERFORMANCE AND REMEDIES

         14.1 Notice of Failure of Performance. If a Party becomes aware of a
Failure of Performance by the other Party, it may give the other Party written
notice of the Failure of Performance.

         14.2 Failure of Performance by Seller. A "Failure of Performance" by
Seller shall be deemed to have occurred as described in the following
subsections, except to the extent caused by a Force Majeure Event:

                  14.2.1 Seller fails to make any payment due to Buyer hereunder
for any undisputed amount or fails to comply with Section 6.2 hereof with
respect to any disputed amount within ten (10) Business Days of receiving a
written demand from Buyer, which demand shall be received no earlier than the
Business Day following the Payment Due Date.

                  14.2.2 A court having jurisdiction shall enter: (i) a decree
or order for relief in respect of Seller in an involuntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency, reorganization or
other similar law, or (ii) a decree or order adjudicating Seller bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of Seller under any
applicable Federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of Seller
or of any substantial part of its affairs.

                  14.2.3 Seller: (i) commences or files a voluntary case or
proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or any other case or proceeding to be
adjudicated a bankrupt or insolvent; (ii) consents to the entry of a decree or
order for relief in respect of Seller in any involuntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it; (iii) files any petition, answer or consent seeking
reorganization or relief under any applicable Federal or state law; (iv)
consents to the filing of any petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of Seller or of any substantial part of its property; (v)
makes an assignment for the benefit of creditors; (vi) is unable, or admits in
writing its inability, to generally pay its debts as they become due; or (vii)
takes any action in furtherance of any of the foregoing.

                  14.2.4 Seller assigns this Agreement or any of Seller's rights
or obligations under this Agreement in violation of Article 16 or Seller assigns
or transfers any interest in the Facility in violation of Article 16; provided,
however, that Seller shall not be in default if Seller cures, or Buyer consents
to, an unauthorized transfer of such interest within thirty (30) days of such
transfer.
                  14.2.5 Any representation or warranty made by Seller herein
shall prove to be incorrect in any material respect, unless Seller promptly
commences and diligently pursues action to cause such representation or warranty
to become true and does so within sixty (60) days after notice thereof has been
given to Seller by Buyer and such cure removes any material adverse effect on
Buyer of such representation or warranty having been incorrect.

                  14.2.6 Seller fails both: (i) to perform or observe any of its
material obligations under this Agreement due to its failure to comply with a
Legal Requirement; and (ii) to promptly commence and diligently pursue action to
cure and cures such failure to perform within sixty (60) days unless such cure
is not capable of being effected within such sixty (60) day period, in which
case Seller shall have an additional sixty (60) day period in which to perform
such cure. Seller agrees to give Buyer notice as promptly as practicable after
Seller becomes aware that a Legal Requirement will prohibit Seller from
performing. Seller shall submit a plan for curing such inability or failure as
soon as reasonably practicable, but in no event more than thirty (30) days after
Seller's failure first arose. If Seller fails to deliver such cure plan within
such thirty (30) day period or implement such cure plan (including implementing
such actions as Buyer may reasonably request), Buyer shall have the right to
declare a Failure of Performance.

                  14.2.7 The Actual Demand Availability as calculated in
Appendix A [redacted]. In that event, Seller may, within fifteen (15) Business
Days after the end of such Seasonal Performance Period, submit a cure plan that
is reasonably expected to resolve the cause of the unsatisfactory Actual Demand
Availability as soon as practicable, but in no event [redacted] from the end of
such Seasonal Performance Period. If Seller fails to submit such a cure plan in
a timely manner or fails to diligently pursue implementation of the cure plan,
or if the unsatisfactory Actual Demand Availability is not, in fact, cured
[redacted], then Buyer shall have the right to declare a Failure of Performance.
The cause of the unsatisfactory Actual Demand Availability shall be deemed cured
if the Actual Demand Availability, determined prospectively on a monthly and
next full seasonal basis, is at least [redacted].

                  14.2.8 The Demonstrated Capability of the Unit, at any time
after the Commercial Operation Date, is [redacted] of the lower end of the
original Contract Capacity, and Seller fails to promptly commence and diligently
pursue action to cure and cures such inadequate Demonstrated Capability within
sixty (60) days (unless such cure is not capable of being effected within such
sixty (60) day period, in which case Seller shall have an additional sixty (60)
day period, or such additional period as mutually agreed by the Operating
Representatives, in which to perform such cure). Seller shall submit a plan for
curing such inadequate Demonstrated Capability as soon as reasonably
practicable, but in no event more than fifteen (15) Business Days after the
performance test revealing such inadequate Demonstrated Capability. If Seller
fails to deliver the cure plan within such fifteen (15) Business Day period or
implement the cure plan (including implementing such actions as Buyer may
reasonably request), Buyer shall have the right to declare a Failure of
Performance.

                  14.2.9 Seller fails to perform or observe any material
obligation of Seller under this Agreement, other than those obligations
specifically addressed in this Section 14.2, which failure materially and
adversely affects ability of Seller or Buyer to perform their respective
obligations under this Agreement and continues for a period of thirty (30) days
after written notice thereof from Buyer unless such cure is not capable of being
effected within such thirty (30) day period, which case Seller shall have an
additional thirty (30) day period in which to perform such cure.

          14.3 Failure of  Performance  by Buyer.  The  occurrence of any of the
     following events shall constitute a "Failure of Performance" by Buyer:

                  14.3.1 Buyer fails to make any payment due to Seller hereunder
for any undisputed amount or fails to comply with Section 6.2 hereof with
respect to any disputed amount within ten (10) Business Days of receiving a
written demand from Seller, which demand shall be received no earlier than the
Business Day following the Payment Due Date.

                  14.3.2 A court having jurisdiction shall enter: (i) a decree
or order for relief in respect of Buyer in an involuntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency, reorganization or
other similar law, or (ii) a decree or order adjudicating Buyer bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of Buyer under any
applicable Federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of Buyer
or of any substantial part of its affairs.

                  14.3.3 Buyer: (i) commences or files a voluntary case or
proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or any other case or proceeding to be
adjudicated a bankrupt or insolvent; (ii) consents to the entry of a decree or
order for relief in respect of Buyer in any involuntary case or proceeding under
any applicable Federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it; (iii) files any petition, answer or consent seeking
reorganization or relief under any applicable Federal or state law; (iv)
consents to the filing of any petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of Buyer or of any substantial part of its property; (v)
makes an assignment for the benefit of creditors; (vi) is unable, or admits in
writing its inability, to generally pay its debts as they become due; or (vii)
takes any action in furtherance of any of the foregoing.

                  14.3.4 Buyer assigns this Agreement or any of Buyer's rights
or obligations under this Agreement in violation of Article 16; provided,
however, that Buyer shall not be in default if Seller thereafter consents to
such assignment.

                  14.3.5 Any representation or warranty made by Buyer herein
shall prove to be incorrect in any material respect, unless Buyer promptly
commences and diligently pursues action to cause such representation or warranty
to become true and does so within sixty (60) days after notice thereof has been
given to Buyer by Seller and such cure removes any material adverse effect on
Seller of such representation or warranty having been incorrect.

                  14.3.6 Buyer fails to perform or observe any material
obligation of Buyer under this Agreement, other than those obligations
specifically addressed in this Section 14.3, which failure materially and
adversely affects the ability of Seller or Buyer to perform their respective
obligations under this Agreement and continues for a period of thirty (30) days
after written notice thereof from Seller unless such cure is not capable of
being effected within such thirty (30) day period, in which case Seller shall
have an additional thirty (30) day period in which to perform such cure.

         14.4     Remedies.
                  --------

                  14.4.1 Remedies of Buyer. If a Failure of Performance by
Seller has occurred, then, Buyer may, in its discretion, take either or both of
the following actions: (i) terminate this Agreement by giving written notice
thereof to Seller; and/or (ii) proceed by appropriate proceedings (judicial,
administrative, or otherwise) at law, in equity or otherwise, to protect and
enforce its right, to recover any damages to which it may be entitled and/or to
enforce performance by Seller, including specific performance of Seller's
obligations under this Agreement. In the event that Buyer terminates the
Agreement pursuant to (i) above, Seller shall promptly pay the applicable amount
set forth in Section 2 of Appendix E to Buyer as liquidated damages. If Buyer
seeks to recover damages pursuant to (ii) above with respect to a Failure of
Performance for which Seller has paid liquidated damages pursuant to any
provision of this agreement, then: (a) Buyer shall be required to demonstrate
Seller's gross negligence, wantonness, or intentional misconduct in order to
recover damages under (ii) above; and (b) the liquidated damages paid by Seller
shall be credited against any amount so recovered under (ii) above; provided,
however, that in no event shall any portion of the liquidated damages be
returned to Seller.

                  14.4.2 Remedies of Seller. If a Failure of Performance by
Buyer has occurred, then Seller may, at its discretion, take either or both of
the following actions: (i) proceed by appropriate proceedings (judicial,
administrative or otherwise) at law, in equity or otherwise, to protect and
enforce its rights, to recover any damages to which it may be entitled
hereunder, and to enforce performance by Buyer, including specific performance
of Buyer's obligations hereunder; and/or (ii) terminate this Agreement by giving
written notice thereof to Buyer.

         14.5 Discharge of Obligations Upon Termination. Except as otherwise
provided herein, in the event of termination of this Agreement, the Parties
shall be released and discharged from any further obligation arising or accruing
hereunder from and after the date of termination; provided, however, that
termination shall not discharge or relieve either Party from any obligations or
liabilities for any act or failure to act which may have accrued prior to such
termination.

         14.6 Suspension of Performance. In addition to the remedies set forth
above, whenever any Failure of Performance shall have occurred and is
continuing, the performing Party, to the extent permitted by law and to the
extent of such Failure of Performance, shall be entitled to suspend immediately
its performance under this Agreement until such Failure of Performance is cured.

         14.7 No Consequential Damages. Notwithstanding any other provision of
this Agreement, except for the obligations in Section 17, in no event shall
Buyer or Seller or their Affiliates, contractors or consultants, or the
officers, directors, shareholders, employees or consultants of any of them be
liable for punitive, special, indirect, incidental or consequential damages
under, arising out of, due to or in connection with the performance or
non-performance of this Agreement or any of the obligations herein, whether
based on contract, tort (including without limitation negligence), strict
liability, warranty, indemnity or otherwise.

         14.8 No Interruption. Except as otherwise provided in this Agreement,
unless and until this Agreement has been terminated, neither Party shall, as a
result of any breach or alleged breach by the other Party, refuse to deliver, or
suspend or delay any delivery of, capacity or associated energy to be provided
under this Agreement; refuse to take energy to the extent required under this
Agreement; suspend, delay or refuse to make, any of the payments required under
this Agreement.

          14.9 NO  WARRANTIES.  THERE ARE NO  WARRANTIES  UNDER  THIS  AGREEMENT
     EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH IN THE TEXT HEREOF. THE PARTIES
     HEREBY SPECIFICALLY DISCLAIM AND EXCLUDE ALL IMPLIED WARRANTIES,  INCLUDING
     THE IMPLIED WARRANTIES OF  MERCHANTABILITY  AND OF FITNESS FOR A PARTICULAR
     PURPOSE.

         14.10 Liquidated Damages. The Parties acknowledge and agree that Buyer
is relying on the availability of the Contract Capacity and associated energy
for the Unit Operating Term and that in the event of termination of this
Agreement due to a Failure of Performance by Seller, Buyer will be damaged and
the amount of such damages are not susceptible to an accurate determination. The
Parties further acknowledge and agree that the liquidated damages set forth in
this Agreement as compensation to Buyer upon the occurrence of such events are
not intended as a penalty and represent a fair and reasonable approximation of
the damages Buyer may incur in each particular case.

                                   ARTICLE 15
                   COMPLIANCE WITH LAWS, RULES AND REGULATION

          15.1 Compliance.  Seller covenants that for the Term,  Seller shall be
     in compliance with all Legal Requirements with respect to the Project.

         15.2     Change of Law.
                  -------------

                  15.2.1 A "Change of Law" means a change in Legal Requirement
constituting a new environmental or tax law, or regulation or a new
interpretation of such law or regulation, which change is enacted after the
execution date of this Agreement that generally affects the cost of electrical
generation. The provisions of Sections 15.2.3 and 15.2.4 shall not apply to a
Change of Law that has been reflected in Buyer's capacity and/or energy payments
through the previous operation of those sections.

                  15.2.2 The Parties acknowledge that, except as provided in
Sections 15.2.3 and 15.2.4, the capacity and energy payments made by Buyer shall
not be altered as a result of a Change in Law that causes either Party to incur
additional costs or realize savings in carrying out its obligations under this
Agreement.

                  15.2.3 If a Change of Law [redacted], then Seller may notify
Buyer of the Change of Law and the Seller's proposed increase in capacity or
energy payments under this Agreement. [redacted]. This calculation will
represent the total cost associated with the identified addition or
modification, including depreciation, carrying costs, and any other cost or
expense item related to capital investments. Upon receipt of such notice, Buyer
will within thirty (30) Days make a good faith determination whether Seller's
proposed price increase results from a Change of Law as specified in this
Agreement. In the event Buyer concurs that the proposed price increase results
from a Change in Law, the proposed increased rates will take effect consistent
with the timing of the additional cost incurrance (but in no event earlier than
the end of the thirty (30) day period). If Buyer determines that the Change of
Law is not applicable to some or all of the proposed price increase, Seller's
sole remedy will be to present the issue to an independent third party expert
that is acceptable to both Parties who shall make the determination as to
whether a Change of Law (or cumulative Changes of Law) has occurred causing
Seller to incur an increase in costs and whether there should be an associated
increase in capacity or energy payments by Buyer to Seller. The independent
third party expert's determination shall be retroactively applied (with interest
at the Interest Rate) to reflect any such increase in Seller's costs. If the
independent third party expert adopts the position of one of the Parties, then
the other Party shall pay the reasonable fees and expenses of such expert.
Otherwise, these fees and expenses will be shared equally by the Parties.

                  15.2.4 If a Change of Law [redacted], then Buyer may notify
Seller of the Change of Law and Buyer's proposed decrease in capacity or energy
payments under this Agreement. Upon receipt of such notice, Seller will within
thirty (30) days make a good faith determination whether Buyer's proposed price
decrease results from a Change of Law as specified in this Agreement. In the
event that Seller concurs that the proposed price decrease results from a Change
in Law, the proposed decreased rates will take effect consistent with the timing
of the additional cost reduction (but in no event earlier than the end of the
thirty (30) day period). If Seller determines that the Change of Law is not
applicable to some or all of the proposed price decrease, Buyer's sole remedy
will be to present the issue to an independent third party expert that is
acceptable to both Parties who shall make the determination as to whether a
Change of Law (or cumulative Changes of Law) has occurred causing Seller to
incur a reduction in costs and whether there should be an associated reduction
in capacity or energy payments by Buyer to Seller. The independent third party
expert's determination shall be retroactively applied (with interest at the
Interest Rate) to reflect any such reduction in Seller's costs. If the
independent third party expert adopts the position of one of the Parties, then
the other Party shall pay the reasonable fees and expenses of such expert.
Otherwise, these fees and expenses will be shared equally by the Parties.

                  15.2.5 Under no circumstances can Buyer's determination
regarding the applicability of the Change of Law provision to a proposed price
increase or Seller's determination regarding the applicability of the Change of
Law provision to a proposed price decrease constitute a Failure of Performance
under Article 14 of this Agreement.
         15.3     NOx Emissions. [redacted]
                  -------------

                                   ARTICLE 16
                      ASSIGNMENT AND TRANSFERS OF INTERESTS

         16.1 Assignment and Assumption of Obligations. Seller may not assign
its obligations under this Agreement or any portion thereof to any entity other
than a creditworthy Affiliate without the written permission of Buyer; provided,
however, (i) any assignee shall expressly assume assignor's obligations
hereunder, and (ii) unless otherwise expressly approved by the APSC, no
assignment, whether or not consented to, shall relieve the assignor of its
obligations hereunder in the event its assignee fails to perform.

         16.2 Assignment to Lenders. Notwithstanding Section 16.1, Seller may,
without the consent of Buyer, assign this Agreement to a Lender for collateral
security purposes in connection with any financing or the refinancing of the
Facility.

                                   ARTICLE 17
                                 INDEMNIFICATION

         17.1 Indemnity. Each Party (the "Indemnifying Party") expressly agrees
to indemnify, hold harmless and defend the other Party and its Affiliates,
trustees, agents, officers, directors, employees and permitted assigns (the
"Indemnified Party") against all claims, liabilities, costs or expenses (on an
After Tax Basis) for loss, damage or injury to the person or property of third
parties in any manner directly or indirectly related to activities on its
respective side of (i) the Delivery Point (in the case of such loss, damage or
injury related to the generation, transmission or distribution of energy); or
(ii) the Primary Gas Delivery Point (in the case of such loss, damage or injury
related to the transportation or distribution of Fuel), unless such loss, damage
or injury is the result of the gross negligence or willful misconduct of the
Party seeking indemnification.

         17.2 Notice of Proceedings. An Indemnified Party which becomes entitled
to indemnification under the Agreement shall promptly notify the other Party of
any claim or proceeding in respect of which it is to be indemnified. Such notice
shall be given as soon as reasonably practicable after the Indemnified Party
obligated to give such notice becomes aware of such claim or proceeding. The
Indemnifying Party shall assume the defense thereof with counsel designated by
the Indemnifying Party; provided, however, that if the defendants in any such
action include both the Indemnified Party and the Indemnifying Party and the
Indemnified Party reasonably concludes that there may be legal defenses
available to it that are different from or additional to, or inconsistent with,
those available to the Indemnifying Party, the Indemnified Party shall have the
right to select and be represented by separate counsel. The Indemnified Party
shall be responsible for the expenses associated with such separate counsel,
unless a liability insurer will pay the expenses of such separate counsel. If
the Indemnifying Party fails to assume the defense of a claim, the
indemnification of which is required under this Agreement, the Indemnified Party
may, at the expense of the Indemnifying Party, contest, settle, or pay such
claim; provided, however, that settlement or full payment of any such claim may
be made only with the Indemnifying Party's consent or, absent such consent,
written opinion of the Indemnified Party's counsel that such claim is
meritorious or warrants settlement.

                                   ARTICLE 18

                            MISCELLANEOUS PROVISIONS

         18.1 Amendments. This Agreement may be amended by and only by a written
instrument duly executed by each of Buyer and Seller, which has received all
approvals of Governmental Authorities of competent jurisdiction necessary for
the effectiveness thereof.

         18.2 Access to Facility Documents. Each Party shall provide the other
Party reasonable access to any material documents concerning the Project with
respect to such matters as affect the rights and obligations of the Parties
hereunder.

     18.3 Binding  Effect.  This Agreement and any extension  shall inure to the
benefit of and shall be binding upon the Parties and their respective  permitted
successors and assigns.

     18.4 Counterparts.  This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and
the same instrument.

         18.5 Notices. Where written notice is required by this Agreement, such
notice shall be in writing and shall be deemed given (i) when delivered by
United States registered or certified mail, postage prepaid, return receipt
requested, or delivered by recognized courier addressed as follows:

       To Seller:       Vice President
                        Energy Marketing
                        270 Peachtree Street
                        Atlanta, Georgia  30303
                        Telephone:  404-506-0357
                        Fax: 404-506-0368

       with a copy to:  Contract Administrator & Financial Services Director
                        Southern Company Services, Inc.
                        270 Peachtree Street
                        Atlanta, Georgia  30303
                        Telephone: 404-506-5100
                        Fax:  404-506-0304

       To Buyer:        Executive Vice President and Chief Financial Officer
                        Alabama Power Company
                        600 North 18th Street
                        Birmingham, Alabama  35203
                        Telephone:  205-257-2905
                        Fax:  205-257-2176

       with a copy to:  Manager, Resource Planning
                        Southern Company Services, Inc.
                        600 North 18th Street
                        Birmingham, Alabama  35203
                        Telephone:  205-257-2905
                                    Fax:  205-257-6746

or to such other address as may be designated by the Parties; or (ii) when sent
by facsimile transmission or electronic mail, provided receipt of such facsimile
transmission or electronic mail is confirmed by facsimile transmission,
electronic mail, or otherwise in writing at the time of transmission.

         18.6 Entire Agreement. This Agreement (including Appendices A through
H, inclusive) constitutes the entire understanding between the Parties
concerning the subject matter hereof and supersedes any previous agreements
concerning the subject matter hereof between the Parties. The Parties have
entered into this Agreement in reliance upon the representations and mutual
undertakings contained herein and not in reliance upon any oral or written
representations or information provided by one Party to the other Party not
contained or incorporated herein.

         18.7 Governing Law. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Alabama, without giving
effect to conflict of laws principles, which may direct the application of the
laws of another jurisdiction.

         18.8 Non-Waiver. No provision of this Agreement shall be deemed waived
and no breach shall be deemed excused unless such waiver or consent is in
writing and signed by a duly authorized representative of the Party waiving such
provision or excusing such breach. No such consent to, or waiver of a breach
hereof, whether express or implied shall constitute a consent to, waiver of, or
excuse for any subsequent or different breach.

         18.9 Headings Not Affecting Meaning. The descriptive headings of the
various Sections and Articles of the Agreement have been inserted for
convenience of reference only and shall in no way modify or restrict any of the
terms and provisions hereof. References to "Articles", "Sections" and
"Appendices" in this Agreement shall mean the Articles, Sections and Appendices
of this Agreement unless otherwise expressly noted.

         18.10 Third Parties. This Agreement is intended solely for the benefit
of the Parties hereto. The provisions of this Agreement shall not impart rights
enforceable by any person or entity not a Party or not a permitted successor or
permitted assignee of a Party bound by this Agreement.

         18.11 Severability. All provisions of this Agreement are severable. In
the event any provision of this Agreement, or a portion thereof, is ruled void,
invalid, unenforceable or contrary to public policy by a court of competent
jurisdiction, then any remaining portion of such provision and all other
provisions of this Agreement shall survive and be applied and any invalid and
unenforceable portion shall be construed or performed to preserve as much of the
original words, terms, purpose and intent to the fullest extent permitted by
law.

         18.12 Cooperation. Upon the execution of this Agreement and thereafter,
each Party to this Agreement agrees to do such things as may be reasonably
requested by the other Party in order more effectively to consummate or document
the transactions contemplated by this Agreement.

         18.13    Confidentiality.
                  ---------------
                  18.13.1 Each Party agrees that for a period of five (5) years
from the date of termination of the Agreement it will not, without the written
consent of the other Party or as otherwise provided herein, disclose
Confidential Information to any third party (other than, when permitted by all
applicable Legal Requirements, to affiliates or to consultants, advisors and
lenders who need to know such information in connection with the performance of
their duties or services for the disclosing Party or its affiliates), except to
the extent that disclosure is required by law, or by a court or by an
administrative agency having jurisdiction over the disclosing Party.

                  18.13.2 Seller intends to seek confidential treatment of the
Confidential Information in this Agreement from FERC, and Buyer will provide
reasonable cooperation in connection with such request. Notwithstanding the
foregoing, the parties acknowledge that certain Confidential Information may
need to be disclosed in Seller's filings with FERC which may become publicly
available.

         18.14 Replacement Index. Whenever any published index or tariff is
referenced herein, the Parties intend to track those costs as faithfully as
commercially practicable. Should any such index or tariff be discontinued or no
longer published, the Parties will cooperate in establishing substitute
benchmarks through reference to equivalent indices or tariffs.

            [THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK.]

<PAGE>

         IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.

FOR ALABAMA POWER COMPANY

By:
         --------------------------------------------------------------
         William B. Hutchins, III
         Executive Vice President, Chief Financial Officer
         and Treasurer

FOR SOUTHERN POWER COMPANY

By:
         --------------------------------------------------------------
         Anthony J. Topazi
         Executive Vice President

<PAGE>

                                   APPENDIX A
                          CAPACITY PAYMENT CALCULATION

                                   [redacted]

<PAGE>

                             APPENDIX B

                           ENERGY PAYMENT CALCULATION

                                   [redacted]

<PAGE>

                                   APPENDIX C
                   DESIGN PARAMETERS AND SCHEDULING PROCEDURES

                                                             [redacted]

<PAGE>

                                   APPENDIX D

                   PERFORMANCE TESTING PROCEDURES AND DISPATCH

        [redacted]

<PAGE>

                                  APPENDIX E
                   DETERMINATION OF CERTAIN LIQUIDATED DAMAGES

                                                         [redacted]

<PAGE>

                                   APPENDIX F

                      DAILY DAMAGE FOR FAILURE TO MEET THE
                       REQUIRED COMMERCIAL OPERATION DATE

                                                         [redacted]

<PAGE>

                            Appendix G - Page 76 of 1

                                   APPENDIX G

                              HIGHER HEATING VALUE
                           GUARANTEED HEAT RATE CURVES
                                 For Normal Mode

                                   [redacted]

<PAGE>

                                   APPENDIX H

                            SCOPE OF INTERCONNECTION
                                   FACILITIES

                                   [redacted]

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