Document:

<PAGE>   1
                                                                   EXHIBIT 10.53

                       TRANSITION POWER PURCHASE AGREEMENT
                        (HUNTLEY 65 or 66 SECONDARY CALL)

       This Transition Power Purchase Agreement (the "Agreement") is entered
into as of this 11th day of June, 1999 between Niagara Mohawk Power Corporation
("Niagara Mohawk"), a New York corporation, and Huntley Power LLC, a Delaware
limited liability company ("Producer") (each individually a "Party", or
collectively the "Parties").

       WHEREAS in November 1997 and on March 6, 1998 Niagara Mohawk filed its
Plan for Divestiture of it's Non-Nuclear Electric Generating Facilities (the
"Plan") with the New York State Public Service Commission;

       WHEREAS on May 6, 1998 the New York State Public Service Commission
approved the Plan subject to certain conditions;

       WHEREAS Niagara Mohawk has conducted a Non-Nuclear Generation Divestiture
Auction ("Auction") to divest itself of its non-nuclear electrical generating
facilities, including it's Huntley generating facility;

       WHEREAS Producer has entered into an agreement ("Asset Sales Agreement",
or "ASA") to acquire certain facilities from Niagara Mohawk, consisting of it's
Huntley generating facility located in the Town of Tonawanda, New York; and

       WHEREAS pursuant to the ASA Niagara Mohawk and Producer agreed to enter
into Transition Power Purchase Agreements pursuant to which; for a certain
period of time, Niagara Mohawk is to have the option to purchase from Producer
certain quantities of electricity generated by the facility

       NOW THEREFORE, in consideration of the mutual representations, covenants
and agreements set forth herein, and intending to be legally bound hereby, the
Parties agree as follows:

                                   ARTICLE 1.
                                   DEFINITIONS

       Whenever used in this Agreement with initial capitalization, the
following terms shall have the meanings specified or referred to in this Article
1.

       "Agreement" shall mean this Transition Power Purchase Agreement (Huntley
65 or 66 Secondary Call) dated as of the Closing Date, between Niagara Mohawk
Power Corporation and Producer.

       "Asset Sales Agreement" or "ASA" shall mean the Asset Sales Agreement
dated as of December 23, 1998, between Niagara Mohawk Power Corporation and NRG
Energy, Inc.

                                     - 1 -
<PAGE>   2

       "Business Day" shall mean any day other than Saturday, Sunday and any day
which is a legal holiday or a day on which banking institutions in New York City
are authorized by law or other governmental action to close; and a Business Day
shall open at 8:00 a.m. and close at 5:00 p.m. Eastern Standard (or Daylight)
time.

       "Closing" shall mean the closing of the transactions contemplated by the
ASA.

       "Closing Date" shall mean the date and time at which the Closing actually
occurs.

       "Delivery Point" shall mean the point at which the interconnection
facility is connected to the transmission system as is indicated on a one-line
diagram included as part of Exhibit A of the Interconnection Agreement.

       "Force Majeure" means (with respect to Firm Transactions) an event not
anticipated as of the Closing Date which is not within the reasonable control of
the Party claiming Force Majeure (the "Claiming Party"), and which, by the
exercise of due diligence, the Claiming Party, is unable to overcome or avoid or
cause to be avoided. Force Majeure includes, but is not restricted to: acts of
God; fire; civil disturbance; labor dispute, labor or material shortage;
sabotage; action or restraint by court order to public or governmental authority
(so long as the Claiming Party has not applied for or assisted in the
application for, and has opposed where and to the extent reasonable, such
government action); provided, however, that an event of Force Majeure shall not
include (i) the loss of Niagara Mohawk's power markets; (ii) Niagara Mohawk's
inability economically to use or resell Power purchased hereunder, (iii) the
loss or failure of Producer's Power supply unless however the Producer provides
written documentation acceptable to Niagara Mohawk definitively describing the
loss or failure and that such loss or failure is within Good Utility Practice.

       "Good Utility Practice" shall mean any of the practices, methods and acts
engaged in or approved by a significant portion of the electric utility industry
during the relevant time period, 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
result at the lowest reasonable cost consistent with good business practices,
reliability, safety and expedition. Good Utility Practice is not intended to be
limited to the optimum practice, method, or act, to the exclusion of all others,
but rather to be acceptable practices, methods, or acts generally accepted in
the region and consistently adhered to by Niagara Mohawk. Good Utility Practices
shall include, but not be limited to North American Electric Reliability Council
("NERC") Criteria & Guidelines, Northeast Power Coordinating Council ("NPCC")
Criteria & Guidelines, New York State Reliability Council ("NYSRC") if any, and
New York Power Pool ("NYPP") criteria, rules and standards, as they may be
amended from time to time including the rules, guidelines and criteria of any
successor organization to the foregoing entities.

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<PAGE>   3

       "Interconnection Agreement" shall mean a separate Interconnection
Agreement between Niagara Mohawk Power Corporation and NRG Energy, Inc., or its
permitted assigns.

       "Interest Rate" means, for any date, the interest equal to the Prime Rate
as may from time to time be published in The Wall Street Journal under "Money
Rates".

       "Interval": means one hour.

       "Market Price" means prior to the commencement of the NYISO, Niagara
Mohawk's weighted average purchases and sales in the NYPP for each hour as found
in the Niagara Mohawk's Energy Management System log line 6033-19, and on or
after the commencement of the NYISO, the real time locational based market price
("LBMP") paid to Producers for energy for each hour, at the Unit's bus bar or
the region in which the Unit's bus bar is located, specified and published by
the NYISO.

       "New York Independent System Operator" or "NYISO" shall mean an
organization formed in accordance with orders of the Federal Energy Regulatory
Commission to administer the operation of the transmission system of New York
State, to provide equal access to the bulk power-transmission system and to
maintain the reliability of the transmission system of New York State.

       "Power" means electric operating capacity as measured in MW or KW and/or
energy as measured in MWh or KWh. Energy purchased hereunder will include
applicable reserves (operating capacity), unless the Parties expressly agree
otherwise.

       "Price" means the price to be paid per unit as specified by Niagara
Mohawk to Producer for the purchase of Power, including the energy price, demand
charges, transmission charges and any other charges pursuant to Article 2.

       "Quantity" means that quantity of Power that Producer agrees to make
available or sell and deliver, or cause to be delivered, to Niagara Mohawk, and
that Niagara Mohawk agrees to purchase and receive, or cause to be received,
from Producer pursuant to Article 3.

       "Scheduling" or "Schedule" means the acts of Producer, Niagara Mohawk
and/or their designated representatives, including each Party's Transmission
Providers, if applicable, of notifying, requesting and confirming to each other
the quantity and type of Power to be delivered on a given hour, day or days at a
specified Delivery Point.

       "Start-Up Notification" shall mean 11 hours when the Unit has not been
on-line for the previous 10 hours and shall mean 7 hours when the Unit has been
on-line within the previous 10 hours.

       "Transmission Providers" means the entity or entities transmitting or
transporting the Power on behalf of Producer or Niagara Mohawk from the Delivery
Point.

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<PAGE>   4

       "Units" each of two steam generating units, Huntley 65 and 66, with unit
Maximum Capacity, Minimum Capacity, and Minimum Down Times as set for the in
Schedule A.

                                   ARTICLE 2.
                                  TRANSACTIONS

2.1    Term of Agreement. Term of Agreement will begin upon the Closing Date of
the ASA and will end on the 4th anniversary of the Closing Date.

2.2.   Compensation. For each month during the term, Niagara Mohawk shall pay
Producer the aggregate sum of the payments due for each hour of the respective
month less any penalties included in Article 3.1.2. For each hour, Niagara
Mohawk shall pay Producer the greater of (i) the product of the hourly Call
Quantity (Article 3.1.1) multiplied by the Market Price at the Delivery Point or
(ii) the sum of (A) the product of the hourly Call Quantity multiplied by the
$/MWh identified in Schedule B.

2.3    Delivery Point. Producer will make all of the operating capacity and
energy of the Units available to Niagara Mohawk at the Delivery Point.

                                   ARTICLE 3.
                                   SCHEDULING

3.1    Purchase and Sale of Entitlement to Output of Units

       3.1.1  Niagara Mohawk may exercise the Call Option with respect to any
Interval by delivery of an exercise notice to Producer (which may be delivered
orally, including by telephone). At that time, Producer will provide the fuel
factor ("F" in Schedule B) - inclusive of all actual fuel costs and
environmental effluent costs - that will be used to determine the cost of the
Power delivered. If any notice is delivered orally, Niagara Mohawk will execute
and deliver a written confirmation confirming the substance of that notice
within two Business Days of that notice. Failure to provide that written
confirmation will not affect the validity of that oral notice.

Niagara Mohawk shall have the right to require Producer to commit, schedule, and
generate electrical output by the Units up to a quantity ("Call Quantity") not
to exceed 90 MW for any one hour during the calendar months of June through
September and December through February. Producer shall have the right to
decline to deliver to Niagara Mohawk in the event Producer is generating with
Unit 65 or 66 and selling to a third party. If Unit 65 or 66 is generating for
Niagara Mohawk, Producer shall have the right to "recall" the Unit in order to
facilitate a sale to a third party. If a "recall" occurs, Niagara Mohawk will
pay for the Power it received up to the "recall" point. However, if a "recall"
occurs Niagara Mohawk will not have to pay for the original Unit start.

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<PAGE>   5

       3.1.2  Producer shall comply with Niagara Mohawk's exercise of rights
under Article 3.1.1 in accordance with Good Utility Practice. In the event,
unless excused pursuant to Article 5, Producer fails to meet the Call Quantity
request of Niagara Mohawk, Producer shall compensate Niagara Mohawk. For each
month during the term, Producer shall pay Niagara Mohawk the aggregate sum of
the product of (i) the Service Classification Number 1 ("SC-1") rate minus the
Interval Market Price ($/MWh), times (ii) the Interval Call Quantity not
provided by Producer. If the Market Price during an hour is greater than the
SC-1 rate, then the charge for that hour will be zero. Payment of this Article
3.1.2 shall be made in accordance with Article 4. Such payment shall begin in
the first hour of notification plus the Start-Up Notification.

3.2    Commitment, Scheduling and Dispatch. If so required under Article 3.1.1,
Producer shall commit and deliver power from one or more of the Units. For the
Unit(s) Producer elects to designate to meet the on-peak energy requirement
under Article 3.1.1, Niagara Mohawk shall be obligated at the request of
Producer, to receive and pay for energy off-peak at the Minimum Capacity
(Schedule A) of the Units.

                                    ARTICLE 4.
                                     PAYMENT

4.1    Payment. Producer shall provide Niagara Mohawk with an invoice setting
forth the quantity of power which was delivered to Niagara Mohawk, during the
preceding calendar month, the total amount due from Niagara Mohawk, and any
applicable supporting documentation. Niagara Mohawk shall remit the amount due
by wire transfer, or as otherwise agreed, pursuant to Producer's invoice
instructions, on the later of fifteen days from receipt of Producer's invoice or
the twenty-fifth (25th) day of the calendar month in which the invoice is
rendered.

4.2    Overdue Payments. Overdue payment shall accrue interest at the Interest
Rate plus 2% from, and including, the due date to, but excluding, the date of
payment.

4.3    Billing Dispute. If Niagara Mohawk, in good faith, disputes an invoice,
Niagara Mohawk shall immediately notify Producer of the basis for the dispute
and pay the portion of such statement conceded to be correct no later than the
due date. If any amount withheld under dispute by Niagara Mohawk is ultimately
determined (under the terms herein) to be due to Producer, it shall be paid
within one (1) Business Day of such determination along with interest accrued at
the Interest Rate until the date paid. Inadvertent overpayments shall be
returned by Producer upon request or deducted by Producer from subsequent
payments, with interest accrued at the Interest Rate from the date originally
paid until the date paid or deducted.

4.4    Set-off. In the event Producers fails to make payment to Niagara Mohawk
for Article 3.1.2, Niagara Mohawk may set off any or all amounts which Producer
owes to it under the Agreement or under the Swap Transaction, against any or all
amounts which it owes to Producer.

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<PAGE>   6

                                   ARTICLE 5.
                                  FORCE MAJEURE

5.1    Performance Excused. If either Party is rendered unable by an event of
Force Majeure to carry out, in whole or part, its obligations under the
Agreement, then, for only the pendency of such Force Majeure, the Party affected
by the event (other than the obligation to make payments then due or becoming
due with respect to performance which occurred prior to the event) shall be
temporarily relieved of its obligations insofar as they are affected by Force
Majeure but for no longer period. The Party affected by an event of Force
Majeure shall provide the other Party with written notice setting forth the full
details thereof within two (2) Business Days after the occurrence of such event
and shall take all reasonable measures to mitigate or minimize the effects of
such event of Force Majeure; provided, however, that this provision shall not
require Producer to deliver, or Niagara Mohawk to receive, Power at points other
than the Delivery Point.

                                   ARTICLE 6.
                            TITLE TRANSFER; LIABILITY

6.1    Title and Risk of Loss. Title to and risk of loss related to the Quantity
shall transfer from Producer to Niagara Mohawk at the Delivery Point. Producer
warrants that it will deliver to Niagara Mohawk the Quantity free and clear of
all liens, claims and encumbrances arising prior to the Delivery Point.

6.2    Indemnity. Each Party shall indemnify, defend and hold harmless the other
Party from any Claims arising from any act or incident occurring during the
period when control and title to Power is vested, as between the Parties as
provided in Article 6.1, in the indemnifying Party. "Claims" means all claims or
actions, threatened or filed and, whether groundless, false or fraudulent, that
directly or indirectly relate to the subject matter of an indemnity, and the
resulting losses, damages, expenses, attorneys' fees and court costs, whether
incurred by settlement or otherwise, and whether such claims or actions are
threatened or filed prior to or after the termination of this Agreement.

6.3    Duty to Mitigate. Each Party agrees that it has a duty to mitigate
damages and covenants that it will use commercially reasonable efforts to
minimize any damages it may incur as a result of the other Party's performance
or non-performance of this Agreement.

                                    ARTICLE 7.
                                       LAW

7.1    Governing Law and Jurisdiction. THIS AGREEMENT AND THE RIGHTS AND DUTIES
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED AND
PERFORMED IN ACCORDANCE WITH THE LAWS

                                     - 6 -
<PAGE>   7

OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Any
law suits arising under this AGREEMENT shall be instituted in the Federal or
State courts of New York located in the City of Syracuse and each party hereby
irrevocably submits to the in personam jurisdiction of such courts. Each Party
herein waives its respective right to a jury trial with respect to any
litigation arising under or in connection with this Agreement or any
Transaction.

                                   ARTICLE 8.
                                  MISCELLANEOUS

8.1    Assignment. Neither Party shall assign this Agreement or its rights
hereunder without the prior written consent of the other Party; provided,
however, either Party may, without the consent of the other Party (and without
relieving itself from liability hereunder), (i) transfer, sell, pledge, encumber
or assign this Agreement or the accounts, revenues or proceeds hereof in
connection with any financing or other financial arrangements, (ii) transfer or
assign this Agreement to an affiliate of such Party either (A) which affiliate's
creditworthiness is not materially different than that of such Party, or (B) in
connection with the assignment of the rights under the ASA to acquire the
Huntley Station, or (iii) transfer or assign this Agreement to any person or
entity succeeding to all or substantially all of the assets of such Party;
provided, however, that in each such case, any such assignee shall agree to in
writing be bound by the terms and conditions hereof and creditworthiness is not
materially different than that of such Party.

8.2    Notices. All Notices and other communications hereunder shall be in
writing and shall be deemed given (as of the time of delivery or, in the case of
a telecopied communication, as of confirmation), if delivered personally, if
sent by telecopy (which is confirmed) or if sent by overnight courier (providing
proof of delivery) to the Parties at the following addresses (or at such other
addresses for a Party as shall be specified by like Notice). Scheduling and
dispatching Notices can be given orally as outlined in Article 3.

TO NIAGARA MOHAWK:
<TABLE>
<S>                                                    <C>
NOTICES & CORRESPONDENCE:                               SCHEDULING:
Niagara Mohawk Power Corporation                        (315) 460-2468
Supply Services - HCB#3                                 (315) 460-2425
300 Erie Boulevard West                                 Fax - (315) 460-2122
Syracuse, New York 13202-4250
Phone: (315) 460-2341                                   DISPATCHERS:
Phone: (315) 460-2271                                   (315) 460-2120
Fax: (315) 460-2660                                     (315) 460-2130
                                                        Fax - (315) 460-2197
</TABLE>

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<PAGE>   8
<TABLE>
<S>                                      <C>
INVOICES:                                 CHECK PAYMENTS:
Niagara Mohawk Power Corporation          Niagara Mohawk Power Corporation
Power Scheduling and Billing - HCB#3      Misc. Accounts Receivable C-3
300 Erie Boulevard West                   300 Erie Boulevard West
Syracuse, New York 13202-4250             Syracuse, New York 13202-4250
Phone: (315) 460-2190
Fax:   (315) 460-2494                     PAYMENTS BY WIRE:
                                          Citibank New York
                                          Account #:  40662754
                                          ABA #:      021000089
                                          Credit To: Niagara Mohawk Power Corp.

TO PRODUCER:

NOTICES & CORRESPONDENCE:                 PAYMENTS:
Huntley Power LLC                         LaSalle National Bank, Chicago
1221 Nicollet Mall                        ABA #:       071 000 505
Minneapolis, MN 55403                     Account #:   58 000 768 52
Attn:       President                     Beneficiary: NRG Energy, Inc.
Fax No.:   (612) 373-5430
Phone No.: (612) 373-8864

INVOICES:                                 SCHEDULING:
Attn:       Dan Hudson                    Attn:       Dan Hudson
Fax No.:    (612) 373-5430                Fax No.:    (612) 373-5430
Phone No.:  (612) 373-8864                Phone No.:  (612) 373-8864
</TABLE>

8.3    General. This Agreement (including the Schedules attached hereto)
constitutes the entire agreement between the Parties with respect to the subject
matter contemplated by this Agreement. The Agreement shall be considered for all
purposes as prepared through the joint efforts of the parties and shall not be
construed against one party or the other as a result of the preparation,
substitution, submission or other event of negotiation, drafting or execution
hereof. No amendment or modification to this Agreement shall be enforceable
unless reduced to writing and executed by both Parties. This Agreement shall not
impact any rights enforceable by any third-party (other than a permitted
successor or assignee bound to this Agreement). No waiver by a Party of any
default by the other Party shall be construed as a waiver of any other default.
Any provision declared or rendered unlawful by any applicable court of law or
regulatory agency or deemed unlawful because of a statutory change will not
otherwise affect the remaining lawful obligations that arise under this
Agreement. The term "including" when used in this Agreement shall be by way of
example only and shall not be considered in any way to be in limitation. The
headings used herein are for

                                     - 8 -
<PAGE>   9

convenience and reference purposes only. All indemnity and audit rights shall
survive the termination of this Agreement for six years.

8.4.   Audit. If requested, a Party shall provide to the other Party statements
evidencing the Quantities of Power delivered at the Delivery Point and the cost
based actual fuel factor ("F" in Schedule B) used to produce the Power. If any
such examination reveals any inaccuracy in any statement, the necessary
adjustments in such statement and the payments thereof will be made promptly and
shall bear interest calculated at the Interest Rate from the date the
overpayment or underpayment was made until paid; provided, however, that no
adjustment for any statement or payment will be made unless objection to the
accuracy thereof was made prior to the lapse of one (1) year from the rendition
thereof.

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<PAGE>   10

                       TRANSITION POWER PURCHASE AGREEMENT
                        (HUNTLEY 65 OR 66 SECONDARY CALL)

       The Parties have executed this Master Power Agreement in multiple
counterparts to be construed as one effective as of the Closing Date.

<TABLE>
<S>                                       <C>
HUNTLEY POWER LLC                           NIAGARA MOHAWK POWER CORPORATION

By:  /s/ Michael O'Sullivan                 By:  /s/ Clement E. Nadeau
   ----------------------------                ---------------------------------
Name:  Michael O'Sullivan                   Name:  Clement E. Nadeau
     --------------------------                  -------------------------------

Title:  Vice President                      Title: Vice President Energy Delivery

Date:   6/11/99                             Date:    6/9/99
     --------------------------                  -------------------------------
</TABLE>

                                     - 10 -<PAGE>   1
                                                                   EXHIBIT 10.56

                      TRANSITION POWER PURCHASE AGREEMENT
                                    (OSWEGO)

       This Transaction Power Purchase Agreement (the "Agreement") is entered
into as of this 1st day of April 1999 between Niagara Mohawk Power Corporation
("Niagara Mohawk"), a New York corporation, and Oswego Harbor Power LLC,
("Producer") (each individually a "Party", or collectively the "Parties").

       WHEREAS in November 1997 and on March 6, 1998 Niagara Mohawk filed its
Plan for Divestiture of it's Non-Nuclear Electric Generating Facilities (the
"Plan") with the New York State Public Service Commission;

       WHEREAS on May 6, 1998 the New York State Public Service Commission
approved the Plan subject to certain conditions;

       WHEREAS Niagara Mohawk has conducted a Non-Nuclear Generation
Divestiture Auction ("Auction") to divest itself of its non-nuclear electrical
generating facilities, including it's Oswego generating facilities;

       WHEREAS Producer has entered into an agreement ("Asset Sales Agreement",
or "ASA") to acquire certain facilities from Niagara Mohawk, consisting of it's
Oswego generating facilities located in the City of Oswego, New York; and

       WHEREAS pursuant to the ASA Niagara Mohawk and Producer agreed to enter
into Transition Power Purchase Agreements pursuant to which; for a certain
period of time, Niagara Mohawk is to have the option to purchase from Producer
certain quantities of electricity generated by the facilities

       NOW THEREFORE, in consideration of the mutual representations, covenants
and agreements set forth herein, and intending to be legally bound hereby, the
Parties agree as follows:

                                   ARTICLE 1.
                                  DEFINITIONS

       Whenever used in this Agreement with initial capitalization, the
following terms shall have the meanings specified or referred to in this
Article 1.

       "Asset Sales Agreement" or "ASA" shall mean the Asset Sales Agreement
dated as of April 1, 1999, between Niagara Mohawk Power Corporation, Rochester
Gas and Electric, NRG Energy, Inc., and Oswego Harbor Power LLC.

                                       1

<PAGE>   2

       "Business Day" shall mean any day other than Saturday, Sunday and any
day which is a legal holiday or a day on which banking institutions in New York
City are authorized by law or other governmental action to close; and a
Business Day shall open at 8:00 a.m. and close at 5:00 p.m. Eastern Standard
(or Daylight) time.

       "Closing" shall mean the closing of the transactions contemplated by the
ASA.

       "Closing Date" shall mean the date and time at which the Closing
actually occurs.

       "Delivery Point" shall mean the point at which the interconnection
facility is connected to the transmission system as is indicated on a one-line
diagram included as part of Exhibit A of the Interconnection Agreement.

       "Electricity" shall have the same meaning as Power.

       "Force Majeure" means (with respect to Firm Transactions) an event not
anticipated as of the Effective Date which is not within the reasonable control
of the Party claiming Force Majeure (the "Claiming Party"), and which, by the
exercise of due diligence, the Claiming Party, is unable to overcome or avoid
or cause to be avoided. Force Majeure includes, but is not restricted to: acts
of God; fire; civil disturbance; labor dispute, labor or material shortage;
sabotage; action or restraint by court order to public or governmental
authority (so long as the Claiming Party has not applied for or assisted in the
application for, and has opposed where and to the extent reasonable, such
government action); provided, however, that an event of Force Majeure shall not
include (i) the loss of Niagara Mohawk's power markets; (ii) Niagara Mohawk's
inability economically to use or resell Power purchased hereunder, (iii) the
loss or failure of Producer's Power supply; (iv) Producer's ability to sell
Power to a market at a more advantageous price.

       "Good Utility Practice" shall mean any of the practices, methods and
acts engaged in or approved by a significant portion of the electric utility
industry during the relevant time period, 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 result at the lowest reasonable cost consistent with good business
practices, reliability, safety and expedition. Good Utility Practice is not
intended to be limited to the optimum practice, method, or act, to the
exclusion of all others, but rather to be acceptable practices, methods, or
acts generally accepted in the region and consistently adhered to by Niagara
Mohawk. Good Utility Practices shall include,

                                       2

<PAGE>   3

but not be limited to North American Electric Reliability Council ("NERC")
Criteria & Guidelines, Northeast Power Coordinating Council ("NPCC") Criteria &
Guidelines, New York State Reliability Council ("NYSRC") if any, and New York
Power Pool ("NYPP") criteria, rules and standards, as they may be amended from
time to time including the rules, guidelines and criteria of any successor
organization to the foregoing entities.

       "Interconnection Agreement" shall mean a separate Interconnection
Agreement between Niagara Mohawk Power Corporation and Oswego Harbor Power LLC,
or its permitted assigns.

       "Interest Rate" means, for any date, the interest equal to the Prime
Rate as may from time to time be published in The Wall Street Journal under
"Money Rates".

       "Market Price": Means, prior to the commencement of the NYISO, NIAGARA
MOHAWK's weighted average purchases and sales in the NYPP for each hour as
found in the NIAGARA MOHAWK's Energy Management System log line 6033-19, and on
or after the commencement of the NYISO, the real time locational based market
price ("LBMP") paid to Producers for energy for each hour, at the Unit's bus
bar or the region in which the Unit's bus bar is located, specified and
published by the NYISO.

       "New York Independent System Operator" or "NYISO" shall mean an
organization formed in accordance with orders of the Federal Energy Regulatory
Commission to administer the operation of the transmission system of New York
State, to provide equal access to the bulk power-transmission system and to
maintain the reliability of the transmission system of New York State.

       "Power" means electric operating capacity as measured in MW or KW and/or
energy as measured in MWh or KWh. Energy purchased hereunder will include
applicable reserves (operating capacity), unless the Parties expressly agree
otherwise.

       "Price" means the price to be paid per unit as specified by Niagara
Mohawk to Producer for the purchase of Power, including the energy price,
demand charges, transmission charges and any other charges pursuant to Article
2.

       "Quantity" means that quantity of Power that Producer agrees to make
available or sell and deliver, or cause to be delivered, to Niagara Mohawk, and
that Niagara Mohawk agrees to purchase and receive, or cause to be received,
from Producer pursuant to Article 3.

                                       3

<PAGE>   4

       "Scheduling" or "Schedule" means the acts of Producer, Niagara Mohawk
and/or their designated representatives, including each Party's Transmission
Providers, if applicable, of notifying, requesting and confirming to each other
the quantity and type of Power to be delivered on a given hour, day or days at
a specified Delivery Point.

       "Start-Up Notification" shall mean 24 hours when the Unit has not been
on-line for the previous 36 hours and shall mean 11 hours when the Unit has
been on-line within the previous 36 hours but has not been on-line within the
previous 10 hours and shall mean 7 hours if the unit has been on-line within
the previous 10 hours.

       "Transmission Providers" means the entity or entities transmitting or
transporting the Power on behalf of Producer or Niagara Mohawk from the
Delivery Point.

       "Units" each of two steam generating units, Oswego 5 and 6, with unit
Maximum Capacity, Minimum Capacity, and Minimum Down Times as set forth in
Schedule A.

                                   ARTICLE 2
                                  TRANSACTIONS

2.1    Term of Agreement. Term of NIAGARA MOHAWKs obligations to pay for energy
and/or capacity and/or installed capacity and/or Power and PRODUCER's
obligations to deliver energy and/or capacity and/or installed capacity and/or
Power will begin upon the Closing Date of the ASA and will end on the fourth
anniversary of the Closing Date. Term of PRODUCER's obligations under Article 9
will begin upon the fourth annivarsary of the Closing Date and end on the eight
annivarsay of the Closing Date.

2.2    Compensation. On each date on which payment is due pursuant to Article
4.1 ("Payment Date"):

(I)    NIAGARA MOHAWK shall pay to PRODUCER one-twelfth of the Fixed Payment
       for the preceding month.

(II)   In addition to the foregoing, if NIAGARA MOHAWK has exercised the
       Electricity Call Option with respect to any hour during a month, then on
       the Payment Date immediately after such month NIAGARA MOHAWK shall pay
       to PRODUCER (i) for each hour an aggregate amount equal to the product
       of (X) the Electricity Call Quantity for such hour multiplied by (Y) the
       Fixed Price ("P(c)") for such hour set forth in Schedule C hereto, plus

                                       4

<PAGE>   5
       (ii) the aggregate Start-Up Fee as set forth in Schedule C for each such
       hour, provided that (x) a warm Start-Up Fee shall apply and a cold start
       Start-Up Fee shall not apply with respect to an hour if the respective
       Unit has been off-line for the preceding 1 hour, but was on-line during
       any time in the preceding 36 hours, and (y) a cold Start-Up Fee shall
       apply, and a warm Start-up Fee shall not apply, if the Unit has been
       off-line for the preceding 36 hours. Notwithstanding the provision of (x)
       and (y), a Start-Up Fee shall not apply if the Unit was on-line in the
       preceding hour.

(III)  In addition to the foregoing, if NIAGARA MOHAWK has exercised the
       Installed Capacity Call Option with respect to any month, then on the
       Payment Date immediately after such month, NIAGARA MOHAWK shall pay to
       PRODUCER the product of (X) $1.67/kw-mo, times (Y) the Installed Capacity
       Call Quantity.

Compensation Adjustment. In the event Producer fails to deliver the full
Electricity Call Quantity and fails to use Good Utility Practice, Niagara Mohawk
shall reduce the Fixed Payments due by an amount equal to the product of (X) the
portion of the Electricity Call Quantity not delivered, times (Y) the difference
between the Market Price and Pc as identified in Schedule C, for the respective
hour.

2.3    Delivery Point. Except as provided in Article 3.1.1, Producer will make
all of the operating capacity and energy of the Units available to Niagara
Mohawk at the Delivery Point.

                                    ARTICLE3
                                   SCHEDULING

3.1    Purchase and Sale of Entitlement to Output of Units

3.1.1  Electricity Call Option. With respect to each hour, NIAGARA MOHAWK shall
have the right, but not the obligation, to specify a quantity of electricity to
be delivered at the Delivery Point (the "Electricity Call Quantity").
Notwithstanding the foregoing, provided PRODUCER uses Good Utility Practice to
keep the Units available, PRODUCER shall retain the right to refuse the portion
of an Electricity Call Quantity for a Unit if the Unit is unexpectedly
unavailable or derated sufficiently to be unable to fulfill the portion of the
Electricity Call Quantity. PRODUCER shall immediately notify NIAGARA MOHAWK of
any such refusal, the reason for such refusal and the Electricity Call Quantity
refused. At the request of NIAGARA MOHAWK, PRODUCER shall provide evidence of
such Unit unavailability or derate. Any exercise that is refused in accordance
herewith shall be deemed not to have been exercised to the extent of the
Electricity Call Quantity so refused.

                                       5
<PAGE>   6
       Electricity Call Quantities shall be subject to the following
limitations: (i) no individual Unit Electricity Call Quantity nomination
schedule can change in succeeding hours by more than its response rate (set
forth in Schedule A hereto); (ii) Minimum Capacity and Minimum Down Time (set
forth in Schedule A hereto), must be adhered to in the nomination of Call
Quantities (e.g. to adhere to the Minimum Down Time, if a Electricity Call
Quantity is scheduled to zero, the Electricity Call Quantity cannot exceed zero
again until the Minimum Down Time is met), (iii) the Electricity Call Quantity
for an hour is limited to the sum of (A) the lesser of 850 MW or the dependable
maximum net capability ("DMNC") of the Unit 5 from the summer 1999 test ("Unit 5
Capacity") for a maximum of four consecutive hours in one day, or 90% of Unit 5
Capacity at all other times, plus (B) Installed Capacity Call Quantity, (iv) the
aggregate contract year Electricity Call Quantity cannot exceed the amount set
forth in Schedule B hereto.

       PRODUCER shall have the right to supply the Electricity from other
sources adjusted for any differences in value between the Delivery Point and
the actual point of delivery. Such value differences may include, but not
limited to, electrical line losses and congestion. In the event PRODUCER
chooses an alternate source and delivery point, the start-up fee, if
applicable, shall be the lesser of the Start-Up Fee defined in Article 2.2 (II)
or the actual start-up cost incurred by Producer in connection with the
alternate supply source.

3.1.2  Electricity Call Option Exercise Procedure. NIAGARA MOHAWK may exercise
the Electricity Call Option with respect to any hour by delivery of an exercise
notice to PRODUCER (which may be delivered orally, including by telephone). Any
such notice shall specify the relevant hour and Electricity Call Quantity (in
MWh), and shall be given prior to notification to the NYISO for day ahead first
settlement bids and schedule requests. If any notice is delivered orally,
NIAGARA MOHAWK will execute and deliver a written confirmation confirming the
substance of that notice within two Business Days of that notice. Failure to
provide that written confirmation will not affect the validity of that oral
notice.

      In the event PRODUCER plans to enter into a bilateral transaction which
would limit its ability to honor NIAGARA MOHAWK's exercise of its option,
PRODUCER shall notify NIAGARA MOHAWK (which may be delivered orally, including
by telephone) of the applicable period and NIAGARA MOHAWK shall respond with a
notice (which may be delivered orally, including by telephone) whether to elect
to exercise its option with respect to such restricted period. Niagara Mohawk
shall provide such response notice within 4 business hours with respect to a
period commencing within 7 days of the initial notice and 1 day otherwise. In
the event the bilateral transaction does not occur, NIAGARA MOHAWK shall have
the right to exercise its call option during that period. At

                                       6

<PAGE>   7

the request of Niagara Mohawk, Producer must provide evidence of such bilateral
transaction.

3.2.1  Installed Capacity. NIAGARA MOHAWK shall retain the right to claim the
Unit 5 Capacity at the Delivery Point, and PRODUCER must provide such installed
capacity, for NIAGARA MOHAWK's capacity requirements to the NYPP or the NYISO.
In the event the PRODUCER is unable to provide installed capacity acceptable to
the NYPP or NYISO in the amount claimed by NIAGARA MOHAWK from its own sources,
the PRODUCER must procure the installed capacity from the market and provide it
to NIAGARA MOHAWK at no additional cost to NIAGARA MOHAWK. In the event the
PRODUCER fails to provide such capacity, PRODUCER shall be charged a penalty
equivalent to the greater of (i) the penalty rate assessed by the NYPP or
NYISO, or (ii) the capacity rate component of NIAGARA MOHAWK's Service
Classification Number 6 Tariff. It is understood that no penalty shall be
assessed for the unit unavailability during the Fall 1999 outage.

3.3.1  Installed Capacity Call Option. With respect to each month, NIAGARA
MOHAWK shall have the right, but not the obligation, to specify a quantity of
installed capacity (the "Installed Capacity Call Quantity") up to 350 MW.

3.3.2  Installed Capacity Call Option Exercise Procedure. NIAGARA MOHAWK may
exercise the Installed Capacity Call Option with respect to any month by
delivery of an exercise notice to PRODUCER (which may be delivered orally,
including by telephone). Any such notice shall specify the relevant month and
Electricity Call Quantity (in MW), and shall be given prior to the start of each
Capability Period (the summer Capability Period shall include the calendar
months of May, June, July, August, September, and October, and the winter
Capability Period shall include all other calendar months). If any notice is
delivered orally, NIAGARA MOHAWK will execute and deliver a written confirmation
confirming the substance of that notice within two Business Days of that notice.
Failure to provide that written confirmation will not affect the validity of
that oral notice.

                                   ARTICLE 4
                                    PAYMENT

4.1    Payment. Producer shall provide Niagara Mohawk with an invoice setting
forth the quantity of Power which was delivered to Niagara Mohawk, during the
preceding calendar month, the total amount due from Niagara Mohawk, and any
applicable supporting documentation. Niagara Mohawk shall remit the amount due
by wire transfer, or as otherwise agreed, pursuant to Producer's invoice

                                       7

<PAGE>   8

instructions, on the later of fifteen days from receipt of Producer's invoice
or the twenty-fifth (25th) day of the calendar month in which the invoice is
rendered.

4.2    Overdue Payments. Overdue payment shall accrue interest at the Interest
Rate plus 2% from, and including, the due date to, but excluding, the date of
payment.

4.3    Billing Dispute. If Niagara Mohawk, in good faith, disputes an invoice,
Niagara Mohawk shall immediately notify Producer of the basis for the dispute
and pay the portion of such statement conceded to be correct no later than the
due date. If any amount withheld under dispute by Niagara Mohawk is ultimately
determined (under the terms herein) to be due to Producer, it shall be paid
within one (1) Business Day of such determination along with interest accrued
at the Interest Rate until the date paid. Inadvertent overpayments shall be
returned by Producer upon request or deducted by Producer from subsequent
payments, with interest accrued at the Interest Rate from the date originally
paid until the date paid or deducted.

                                   ARTICLE 5
                                 FORCE MAJEURE

5.1    Performance Excused. If either Party is rendered unable by an event of
Force Majeure to carry out, in whole or part, its obligations under the
Agreement, then, for only the pendency of such Force Majeure, the Party
affected by the event (other than the obligation to make payments then due or
becoming due with respect to performance which occurred prior to the event)
shall be temporarily relieved of its obligations insofar as they are affected
by Force Majeure but for no longer period. The Party affected by an event of
Force Majeure shall provide the other Party with written notice setting forth
the full details thereof within two (2) Business Days after the occurrence of
such event and shall take all reasonable measures to mitigate or minimize the
effects of such event of Force Majeure; provided, however, that this provision
shall not require Producer to deliver, or Niagara Mohawk to receive, Power at
points other than the Delivery Point.

                                   ARTICLE 6
                           TITLE TRANSFER; LIABILITY

6.1    Title and Risk of Loss. Title to and risk of loss related to the
Quantity shall transfer from Producer to Niagara Mohawk at the Delivery Point.
Producer

                                       8

<PAGE>   9

warrants that it will deliver to Niagara Mohawk the Quantity free and clear of
all liens, claims and encumbrances arising prior to the Delivery Point.

6.2    Indemnity. Each Party shall indemnify, defend and hold harmless the other
Party from any Claims arising from any act or incident occurring during the
period when control and title to Power is vested, as between the Parties as
provided in Article 6.1, in the indemnifying Party. "Claims" means all claims or
actions, threatened or filed and, whether groundless, false or fraudulent, that
directly or indirectly relate to the subject matter of an indemnity, and the
resulting losses, damages, expenses, attorneys' fees and court costs, whether
incurred by settlement or otherwise, and whether such claims or actions are
threatened or filed prior to or after the termination of this Agreement.

6.3    Duty to Mitigate. Each Party agrees that it has a duty to mitigate
damages and covenants that it will use commercially reasonable efforts to
minimize any damages it may incur as a result of the other Party's performance
or non-performance of this Agreement

                                   ARTICLE 7
                                      LAW

7.1    Governing Law and Jurisdiction. THIS AGREEMENT AND THE RIGHTS AND DUTIES
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED AND
PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WiTHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. Any law suits arising under this AGREEMENT
shall be instituted in the Federal or State courts of New York located in the
City of Syracuse and each party hereby irrevocably submits to the in personam
jurisdiction of such courts. Each Party herein waives its respective right to a
jury trial with respect to any litigation arising under or in connection with
this Agreement or any Transaction.

                                   ARTICLE 8
                                 MISCELLANEOUS

8.1    Assignment. Neither Party shall assign this Agreement or its rights
hereunder without the prior written consent of the other Party; provided,
however, either Party may, without the consent of the other Party (and without
relieving itself from liability hereunder), (i) transfer, sell, pledge,
encumber or assign this Agreement or the accounts, revenues or proceeds hereof
in

                                       9

<PAGE>   10

connection with any financing or other financial arrangements, (ii) transfer or
assign this Agreement to an affiliate of such Party either (A) which affiliate's
creditworthiness is not materially different than that of such Party, or (B) in
connection with the assignment of the rights under the ASA to acquire the Oswego
Station, or (iii) transfer or assign this Agreement to any person or entity
purchasing or otherwise succeeding to all or substantially all of the assets of
such Party; provided, however, that in each such case, any such assignee shall
agree to in writing be bound by the terms and conditions hereof.

8.2  Notices.

TO NIAGARA MOHAWK:

NOTICES & CORRESPONDENCE:                  SCHEDULING:
-------------------------                  -----------
Niagara Mohawk Power Corporation           (315) 460-2468
Supply Services - HCB#3                    (315) 460-2425
300 Erie Boulevard West                    Fax - (315) 460-2122
Syracuse, New York 13202-4250
Phone: (315) 460-2341                      DISPATCHERS:
Phone: (315) 460-2271                      ------------
Fax: (315) 460-2660                        (315) 460-2120
                                           (315) 460-2130
INVOICES:                                  Fax - (315) 460-2197
----------
Niagara Mohawk Power Corporation           CHECK PAYMENTS:
                                           ---------------
Power Scheduling and Billing - HCB#3       Niagara Mohawk Power Corporation
300 Erie Boulevard West
Syracuse, New York 13202-4250              Misc. Accounts Receivable C-3
Phone: (315) 460-2190                      300 Erie Boulevard West
Fax: (315) 460-2494                        Syracuse, New York 13202-4250

                                           PAYMENTS BY WIRE:
                                           -----------------
                                           Citibank New York
                                           Account #: 40662754
                                           ABA Routing #: 021000089
                                           Credit To: Niagara Mohawk Power Corp.

TO PRODUCER:

NOTICES & CORRESPONDENCE:                  PAYMENTS:
-------------------------                  --------
Oswego Harbor Power LLC                    Oswego Harbor Power LLC
C/o NRG Power Marketing, Inc.

                                       10
<PAGE>   11
<TABLE>
<S>                                <C>
1221 Nicollet Mall                  1221 Nicollet Mall
Suite 700                           Suite 700
Minneapolis, Minnesota 55403        Minneapolis, Minnesota 55403
Attn: Dan Hudson                    Attn: Mark Anderson
Fax No.: (612) 373-5430             Fax No.: (612) 373-5430
Phone No.: (612)373-8864            Phone No.: (612) 373-5450

INVOICES:                           SCHEDULING:
---------                           -----------

Oswego Harbor Power LLC             Oswego Harbor Power LLC
                                    C/o NRG Power Marketing, Inc.
1221 Nicollet Mall                  1221 Nicollet Mall
Suite 700                           Suite 700
Minneapolis, Minnesota 55403        Minneapolis, Minnesota 55403
Attn: Mark Anderson                 Attn: Dan Hudson
Fax No.: (612) 373-5430             Fax No.: (612) 373-5430
Phone No.: (612) 373-5450           Phone No.: (612) 373-8864
</TABLE>

8.3 General. The Agreement shall be considered for all purposes as prepared
through the joint efforts of the parties and shall not be construed against one
party or the other as a result of the preparation, substitution, submission or
other event of negotiation, drafting or execution hereof. No amendment or
modification to this Agreement shall be enforceable unless reduced to writing
and executed by both Parties. This Agreement shall not impact any rights
enforceable by any third party (other than a permitted successor or assignee
bound to this Agreement). No waiver by a Party of any default by the other Party
shall be construed as a waiver of any other default. Any provision declared or
rendered unlawful by any applicable court of law or regulatory agency or deemed
unlawful because of a statutory change will not otherwise affect the remaining
lawful obligations that arise under this Agreement. The term "including" when
used in this Agreement shall be by way of example only and shall not be
considered in any way to be in limitation. The headings used herein are for
convenience and reference purposes only. All indemnity and audit rights shall
survive the termination of this Agreement for six years.

8.4.  Audit. If requested, a Party shall provide to the other Party statements
      evidencing the Quantities of Power delivered at the Delivery Point. If any
      such examination reveals any inaccuracy in any statement, the necessary
      adjustments in such statement and the payments thereof will be made
      promptly and shall bear interest calculated at the Interest Rate from the
      date the overpayment or underpayment was made until paid; provided,
      however, that no adjustment for any statement or payment will be made

                                       11
<PAGE>   12
      unless objection to the accuracy thereof was made prior to the
      lapse of one (1) year from the rendition thereof.

                                    ARTICLE 9
                         ADDITIONAL CONTINGENT PAYMENTS

9.1    Additional Contingent Payments. Beginning on the fourth annivarsary of
the Closing Date, and ending on the eighth anniversary of the Closing Date,
PRODUCER shall pay to NIAGARA MOHAWK monthly an amount equal to one-half of (i)
the Unit 5 Capacity, multiplied by (ii) the amount by which the net capacity
payment received by PRODUCER for such month (as calculated on a kW-yr basis)
exceeds $30/kW-yr (in 1999 dollars). This payment is based upon the assumption
that post 2004 property taxes would not exceed $3.5 million dollars annually and
each payment would be reduced by one-twelfth of the amount of any such excess
property tax. At Niagara Mohawks request PRODUCER shall provide written
documentation of capacity payments. The intent of this Article 9 is to measure
the market value of capacity and, for determination of this obligation, PRODUCER
shall not subsidize capacity sales through sale of other services (for example
energy and/or ancillary services). Payment terms shall be consistent with
Article 4.

                                       12

<PAGE>   13

      The Parties have executed this Transition Power Purchase Agreement in
multiple counterparts to be construed as one effective as of the Closing Date.

<TABLE>
<S>                                     <C>
OSWEGO HARBOR POWER LLC                  NIAGARA MOHAWK POWER
-----------------------                  CORPORATION

By: /s/ Michael O'Sullivan                By: /s/ Clement E. Nadeau
   -------------------------------           ----------------------
Name: Michael O'Sullivan                 Name: Clement E. Nadeau
     -----------------------------
Title: Authorized Representative         Title: Vice President Electric Delivery

Date:                                    Date: 4/1/99
     -----------------------------             --------------------
</TABLE>

                                       13
<PAGE>   14

                 TRANSITION POWER PURCHASE 1ST AMENDMENT
                                    (OSWEGO)

      This 1st Amendment ("1st Amendment") to the Transaction Power Purchase
Agreement dated April 1, 1998 (the "Agreement") is entered into as of this 21st
day of July 1999 between Niagara Mohawk Power Corporation ("Niagara Mohawk"), a
New York corporation, and Oswego Harbor Power LLC, ("Producer") (each
individually a "Party", or collectively the "Parties").

      WHEREAS in November 1997 and on March 6, 1998 Niagara Mohawk filed its
Plan for Divestiture of it's Non-Nuclear Electric Generating Facilities (the
"Plan") with the New York State Public Service Commission;

      WHEREAS on May 6, 1998 the New York State Public Service Commission
approved the Plan subject to certain conditions;

      WHEREAS Niagara Mohawk has conducted a Non-Nuclear Generation Divestiture
Auction ("Auction") to divest itself of its non-nuclear electrical generating
facilities, including it's Oswego generating facilities;

      WHEREAS Producer has entered into an agreement ("Asset Sales Agreement",
or "ASA") to acquire certain facilities from Niagara Mohawk, consisting of it's
Oswego generating facilities located in the City of Oswego, New York; and

      NOW THEREFORE, in consideration of the mutual representations, covenants
and agreements set forth herein, and intending to be legally bound hereby, the
Parties agree as follows:

1.    Terms used with initial capitalization in this 1st Amendment shall have
the meanings specified or referred to in the Agreement.

2.    Article 1 of the Agreement shall be amended by adding the following terms
and definitions thereto in appropriate alphabetical order:

             "Market Mitigation Installed Capacity Call Option(s)" shall mean
      the option to purchase installed capacity set forth in Article 9.2
      hereof.

             "Mitigation Year" shall mean, for the period commencing on the day
      following the fourth anniversary of the Closing Date and ending on the
      eighth anniversary of the Closing Date, the annual period commencing on
      the day following an anniversary of the Closing Date and ending on the
      next succeeding anniversary of the Closing Date. The term "First
      Mitigation Year" shall mean the Mitigation Year commencing on the day
      following the fourth anniversary of the Closing Date and ending on the
      fifth

<PAGE>   15

      anniversary of the Closing Date, and the terms "Second Mitigation Year,"
      "Third Mitigation Year" and "Fourth Mitigation Year" shall have the
      corresponding meanings for subsequent annual periods.

           "Qualifying Bid" shall have the meaning set forth in the second
      paragraph of Article 9.2.

3.    Article 2.2 of the Agreement shall be amended by adding the following
clause (IV) thereto:

      (IV) In addition to the foregoing, if NIAGARA MOHAWK has exercised a
           Market Mitigation Installed Capacity Call Option with respect
           to any applicable Mitigation Year, then on the Payment Date
           immediately after each respective month during such Mitigation
           Year, NIAGARA MOHAWK shall pay to PRODUCER $1,772,250.

4.    Article 9 of the Agreement shall be amended by adding the following
Article 9.2 thereto:

      9.2  Oswego Market Mitigation.. With respect to each Mitigation Year,
      NIAGARA MOHAWK shall have the right, but not the obligation, to
      purchase 425 MW of installed capacity. NIAGARA MOHAWK may exercise the
      Market Mitigation Installed Capacity Call Option with respect to any
      Mitigation Year by delivery, at any time prior to the date which is
      three months prior to the commencement of such Market Mitigation
      Installed Capacity Call Option, of an exercise notice to PRODUCER. Any
      such notice shall be in writing and shall specify the relevant
      Mitigation Year.

      PRODUCER shall have the right to terminate a Market Mitigation
      Installed Capacity Call Option at any time if it has presented NIAGARA
      MOHAWK a Qualifying Bid. A "Qualifying Bid" is any bone fide offer or
      offers by one or more third parties, not affiliated with PRODUCER, in
      the form of either an option to purchase or a firm purchase, of at
      least 425 MW of capacity for the applicable Mitigation Year at a fixed
      price. If the strike price of such Qualifying Bid is less than or equal
      to $4.17/kW-mo, Niagara Mohawk shall have the right, exercisable
      within 2 business days of receipt of the notice of the Qualifying Bid
      from PRODUCER, to enter into a binding agreement with PRODUCER on
      substantially the same terms and conditions as the Qualifying Bid. If
      the strike price of the Qualifying Bid is greater than $4.17/kW-mo,
      Niagara Mohawk shall have the right, exercisable within 2 days of
      receipt of the notice of the Qualifying Bid from PRODUCER to either (i)
      enter into a binding agreement with PRODUCER on substantially the same
      terms and conditions as the Qualifying Bid or (ii) exercise such Market
      Mitigation Installed Capacity Call Option. All remaining unexercised
      Market Mitigation Installed Capacity Call Options
<PAGE>   16
Shall automatically terminate upon the determination by the New York Public
Service Commission (or other applicable regulatory body) that circumstances have
sufficiently changed so that the Market Mitigation Installed Capacity Call
Options are no longer needed as market power mitigation measures.

PRODUCER shall have the right to substitute any capacity located or deliverable
into Western New York for the Oswego capacity subject to the Market Mitigation
Installed Capacity Call Options.

Capacity revenues resulting from the exercise by NIAGARA MOHAWK of any Market
Mitigation Installed Capacity Call Option shall not be subject to the provisions
of Article 9.1.

<PAGE>   17

       The Parties have executed this 1st Amendment in multiple counterparts to
be construed as one effective as of the Closing Date.

<TABLE>
<S>                                        <C>
OSWEGO HARBOR POWER LLC                     NIAGARA MOHAWK POWER
                                            CORPORATION

By:  /s/ CRAIG A. MATACZYNSKI               By:  /s/ CLEMENT E. NADEAU
   ----------------------------                ---------------------------------
Name: Craig A. Mataczynski                  NAME: Clement E. Nadeau
Title: President                            Title: Vice President Electric Delivery

Date:    July 26, 1999                      Date:    7/26/99
     ----------------------------                -------------------------------
</TABLE>

<PAGE>   18

                     TRANSITION POWER PURCHASE 2nd AMENDMENT
                                    (OSWEGO)

       This 2nd Amendment ("2nd Amendment") to the Transition Power Purchase
Agreement dated April 1, 1999, as amended by and the Transition Power Purchase
1st Amendment dated July 21, 1999 (collectively the "Agreement") is entered into
as of this 19th day of October 1999 between Niagara Mohawk Power Corporation
("Niagara Mohawk"), a New York corporation, and Oswego Harbor Power LLC
"Producer") (each individually a "Party", or collectively the "Parties").

       WHEREAS in November 1997 and on March 6, 1998 Niagara Mohawk filed its
Plan for Divestiture of it's Non-Nuclear Electric Generating Facilities (the
"Plan") with the New York State Public Service Commission;

       WHEREAS on May 6, 1998 the New York State Public Service Commission
approved the Plan subject to certain conditions;

       WHEREAS Niagara Mohawk has conducted a Non-Nuclear Generation Divestiture
Auction ("Auction") to divest itself of its non-nuclear electrical generating
facilities, including it's Oswego generating facilities;

       WHEREAS Producer has entered into an agreement ("Asset Sales Agreement",
or "ASA") to acquire certain facilities from Niagara Mohawk, consisting of it's
Oswego generating facilities located in the City of Oswego, New York; and

       NOW THEREFORE, in consideration of the mutual representations, covenants
and agreements set forth herein, and intending to be legally bound hereby, the
Parties agree as follows:

1.     Terms used with initial capitalization in this 2nd Amendment shall have
       the meanings specified or referred to in the Agreement.

2.     The first sentence of the second paragraph of Article 9.2 of the
       Agreement shall be deleted and replaced with "PRODUCER shall have the
       right to terminate a Market Mitigation Installed Capacity Call Option at
       any time if it has presented NIAGARA MOHAWK a Qualifying Bid, NIAGARA
       MOHAWK has declined or failed to exercise this Option pursuant to this
       paragraph and PRODUCER accepts Qualifying Bid".

<PAGE>   19

       The Parties have executed this 2nd Amendment in multiple counterparts to
be construed as one effective as of the Closing Date.

<TABLE>
<S>                                        <C>
OSWEGO HARBOR POWER LLC                     NIAGARA MOHAWK POWER
                                            CORPORATION

By:  /s/ CRAIG A. MATACZYNSKI               By:  /s/ CLEMENT E. NADEAU
   ----------------------------                ---------------------------------
Name: Craig A. Mataczynski                  NAME: Clement E. Nadeau
Title: Authorized Representative            Title: Vice President Electric Delivery

Date:    October 19, 1999                   Date:    10/19/99
     ----------------------------                -------------------------------
</TABLE>

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