MASTER POWER PURCHASE and SALE AGREEMENT CONFIRMATION LETTER BETWEEN Counterparty And

Firm Energy

MASTER POWER PURCHASE AND SALE AGREEMENT CONFIRMATION LETTER BETWEEN [COUNTERPARTY] AND SOUTHERN CALIFORNIA EDISON COMPANY

This confirmation letter (“Confirmation”) confirms the Transaction between [Counterparty] (“Seller”) and Southern California Edison Company (“Buyer” or “SCE”) dated as of [Date] (“Confirmation Effective Date”) regarding the sale and purchase of Firm Energy in accordance with and subject to the terms and provisions of the EEI Master Power Purchase & Sale Agreement (“Master Agreement”) dated as of [Date] between the Parties under the following terms and conditions. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Master Agreement, including Paragraph 10 to the Collateral Annex to the EEI Master Power Purchase and Sale Agreement (Paragraph 10 and the Collateral Annex are both referred to herein as the “Collateral Annex”), and the tariff and protocol provisions (as amended from time to time, the “Tariff”) of the California Independent System Operator or any successor control area operator/regional transmission operator (“CAISO”).

ARTICLE 1 TRANSACTION DEFINITIONS

1.1 Seller [Counterparty].

1.2 Buyer SCE.

1.3 Term [Start Date] through [End Date], inclusive (“Term”).

1.4 Product Firm Energy, as defined below, of the Quantity of Energy supported by Seller’s system, as set forth in the “Product Table” below. [For CAISO Energy deliveries: Article Four of the Master Agreement shall apply in the event that Seller fails to schedule and deliver, or Buyer fails to schedule and receive, all or any part of the applicable Quantity of Firm Energy] [For WSPP Schedule C deliveries: The methodology for calculating the payments for failure to deliver or receive shall be in accordance with Section 21.3 of the WSPP Agreement (rather than Article Four of the Master Agreement); provided, that the “Accelerated Payment of Damages” addressed in Article Four of the Master Agreement shall continue to apply].

PRODUCT TABLE [Energy Fixed Price: To be completed by SCE if an offer from the Counterparty is awarded in SCE’s final selection] ID# Term Quantity Energy Fixed Delivery Period Price (Inclusive) (in 25 MW increments) ($/MWh)

ABC -001 07/01/2008 7x16 [Example to be – 75 $10.00 non-standard on-peak deleted] 09/30/2010 Jul–Sep

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[Gas Index Price: To be completed by SCE if an offer from the Counterparty is awarded in SCE’s final selection] ID# Term Quantity Heat Rate Variable O&M Delivery Period

(Inclusive) (in 25 MW (MMBtu/MWh) ($/MWh) increments)

ABC -001 07/01/2008 7x16 [Example to be – 75 10.0 $10.00 non-standard on-peak deleted] 09/30/2010 Jul–Sep

[Power Index Price: To be completed by SCE if an offer from the Counterparty is awarded in SCE’s final selection] ID# Term Quantity Fixed Price Delivery Period Adder (Inclusive) (in 25 MW increments) ($/MWh)

ABC -001 07/01/2008 7x16 [Example to be – 75 $0.25 non-standard on-peak deleted] 09/30/2010 Jul–Sep

[FOR INSTRUCTIONAL PURPOSES ONLY – These instructions shall be deleted prior to execution.

SCE to complete the applicable “Product Table” above with the awarded Firm Energy Offer from the selection provided in the attached Excel file (one Confirmation per awarded Offer):

(a) ID# – SCE will assign the unique ID after an indicative Offer has been submitted in the attached Excel file; (b) Term – Seller shall indicate start date through end date, inclusive; (c) Quantity – Seller shall indicate quantity offer, in 25 MW increments; (d) Seller shall indicate one of the following pricing methods: FOR NON SP15 Deliveries: (i) Energy Fixed Price: expressed in units of $/MWh, (ii) Gas Index Price: a Product Heat Rate expressed in units of MMBtu/MWh, and a variable O&M charge expressed in units of $/MWh, or (iii)Power Index Price: a Fixed Price Adder (positive, negative, or zero expressed in $/MWh) to the Power Index (as defined below).] FOR SP15 Deliveries (only fixed price): (i) Energy Fixed Price: expressed in units of $/MWh,

1.5 Delivery Period The Delivery Period shall be defined as follows [For each Product in the “Product Table”, Seller shall indicate one of the following Delivery Periods:]

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[___] 7x8 super-peak: HE13-HE20 for each day of the Term, including NERC Holidays. [___] 7x16 non-standard on-peak: HE7-HE22, for each day of the Term, including NERC Holidays. [___] 6x8 super-peak: HE13-HE20 Monday through Saturday during the Term, excluding NERC Holidays. [___] 6x16 non-standard on-peak: [one of the following: HE8-HE23 or HE9-HE24], Monday through Saturday during the Term, excluding NERC Holidays. [___] 6x16 standard on-peak: HE7-HE22 Monday through Saturday during the Term, excluding NERC Holidays. 1.6 Delivery Point [For SP15 deliveries: The Delivery Point for Energy shall be the SP15 Zone; provided, however, if the CAISO implements trading hubs under a locational marginal pricing design during the Term, the Delivery Point shall be the Existing Zone Generation SP15 Trading Hub (“SP15 EZ Gen Hub”), as such trading hub is contemplated by the CAISO in its filing made to the FERC dated March 15, 2005 (“Comprehensive Design Proposal for Inter-Scheduling Coordinator Trades Under the CAISO Corporation’s Market Redesign and Technology Upgrade, Docket No. ER02-1656-025”) and approved in principle by FERC pursuant to an Order issued June 10, 2005; provided further, if the SP15 EZ Gen Hub (under any name) is not established as part of a market redesign that is implemented during the Term, the Parties agree to promptly work together in good faith to designate an alternate Delivery Point to reasonably approximate the characteristics of the SP15 Zone.]

[For non-SP15 deliveries: The Delivery Point for Energy shall be [one of the following: COB, NOB, Palo Verde, Mead, Four Corners, or Victorville (LADWP – LA4) to be negotiated.]

1.7 Scheduling For each day during the Delivery Period, Seller shall deliver and schedule the Quantity of Firm Energy, in accordance with the “Product Table” in Section 1.4, to SCE [for SP15 deliveries: as an Inter-Scheduling Coordinator Energy Trade (“SC Trade”), pursuant to the provisions of the Tariff] [for non-SP15 deliveries: pursuant to the provisions of the applicable Transmission Owner tariff]. Seller is responsible for all charges and penalties related to transmission of Energy up to and including the Delivery Point, including imbalance energy and penalties assessed by the applicable Transmission Owner or any other control area operator. SCE will be responsible for all charges and penalties related to transmission of Energy from the Delivery Point.

1.8 Definitions For purposes of this Confirmation, the following definitions apply:

“ NERC Holidays” shall be the holidays as set forth or described on the NERC website at http://www.nerc.com. “ Pacific Prevailing Time” or “PPT” shall mean Pacific Daylight Time when California observes Daylight Savings Time and Pacific Standard Time otherwise. “CAISO Energy” means a Product under which the Seller shall sell and the Buyer shall purchase a quantity of energy equal to the hourly quantity without Ancillary Services (as defined in the Tariff) that is or will be scheduled as a schedule coordinator to schedule coordinator transaction pursuant to the Tariff for which the only excuse for failure to deliver or receive is an Uncontrollable Force (as defined in the Tariff). “Firm Energy” means (a) for SP15 deliveries, CAISO Energy as defined below; or (b) for non- SP15 deliveries, WSPP Schedule C as defined within this Confirmation.

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“ Governmental Authority” means any federal, state, local, municipal, or other governmental, executive, administrative, judicial, or regulatory entity, and the CAISO or any other transmission authority, having or asserting jurisdiction over a Party, this Confirmation or the Master Agreement. “Resource Adequacy” has the meaning as set forth in the Resource Adequacy Rulings. “ Resource Adequacy Benefits” means the rights and privileges attached to any generating resource that satisfy any entity’s Resource Adequacy obligations under any Resource Adequacy Rulings. “Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04- 040, 06-06-064, and 06-07-031 and/or any subsequent CPUC ruling or decision, or any other Resource Adequacy laws, rules or regulations enacted, adopted or promulgated by any applicable Governmental Authority, as such decisions, rulings, laws, rules or regulations may be amended or modified from time to time during the Term. “West Firm” or “WSPP Schedule C” means with respect to a Transaction, a Product that is or will be scheduled as firm energy and consistent with the most recent rules adopted by the Western Electricity Coordinating Council (“WECC”) for which the only excuses for failure to deliver or receive are if an interruption is (i) due to an Uncontrollable Force as provided in Section 10 of the Western Systems Power Pool Agreement (the “WSPP Agreement”, as amended from time to time); or (ii) where applicable, to meet Seller’s public utility or statutory obligations to its customers. Notwithstanding any other provision in this Master Agreement, if Seller exercises its right to interrupt to meet its public utility or statutory obligations, Seller shall be responsible for payment of damages for failure to deliver firm energy as provided in Article Four of this Master Agreement.

ARTICLE 2 COMPENSATION

2.1 Contract Price [Select the applicable Contract Price:]

[Indexed to SoCalGas or any other negotiated gas index – ONLY FOR NON-S15 PRODUCTS]]

For each day during the delivery Period, the Contract Price shall be the sum of:

(a) the Product Heat Rate multiplied by the Gas Index (as defined below) for that day; and (b) the Variable Charge, if applicable. The “Product Heat Rate” is specified in the “Product Table” in Section 1.4 and the “Gas Index” shall be [Seller to select either: monthly index price (expressed in $/MMBtu) for the applicable month as reported by NGI’s Bidweek Survey Supplement to NGI’s Weekly Gas Price Index published by Natural Gas Intelligence in the table for Gas Traded for Baseload Delivery under sub-table for “California” under the listing for “Southern Cal. Bdr. Avg.”] [or the index price (expressed in $/MMBtu) for the applicable flow date published by Platts Gas Daily (in the internet publication currently accessed through www.platts.com) in the table entitled “Daily Price Survey” under the heading “Midpoint” for SoCalGas] [or any other gas index negotiated between Seller and SCE]. Gas Index Restructuring. Notwithstanding anything in Section 3.4 of the Master Agreement, if, for any reason (including the restructuring of the gas industry resulting from the implementation of any recommendations that may result from the application of the Southern California Gas Company (“SoCalGas”) that was directed to be submitted to the CPUC under Rulemaking 04-01-025 dated September 2, 2004 or SoCalGas Application 04-12-004 dated December 2, 2004), the Gas Index ceases to be published,

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or either Party reasonably believes that the Gas Index is substantially changed so that it does not adequately reflect the aggregate market price of gas at various receipt points on the SoCalGas system, then either Party may provide the other with notice to such effect and the Parties shall negotiate in good faith to determine an alternative method or methods for determining the Gas Index in order to maintain the balance of economic benefits and burdens that the Parties agreed to with respect to the Gas Index as of the Confirmation Effective Date. Any substitute index or indices must be recognized in the industry as a measure of aggregate daily prices for gas delivered to the various receipt points on the SoCalGas system. If the Parties are unable to agree on a successor market, index, or methodology within thirty (30) days of the date of the notice, the dispute resolution procedures of the Master Agreement shall apply.

[or Energy Fixed Price – option available for either SP15 and non-SP15 products]

The Contract Price shall be the Energy Fixed Price as set forth in the “Product Table” in Section 1.4.

[or indexed to Megawatt Daily or any other negotiated power index – ONLY FOR NON-SP15 PRODUCTS]

For each day during the Delivery Period, the Contract Price shall be the sum of:

(a) the Power Index (as defined below) for that day; and (b) the Fixed Price Adder as set forth in the “Product Table” in Section 1.4., if applicable. The “Power Index” for the applicable delivery day shall be the price calculated as follows [or any other power index negotiated between Seller and SCE]: Using the day-ahead SP15 on-peak index (“On-Peak Index”) and the day-ahead SP15 off-peak index (“Off-Peak Index”) published daily in Platts Megawatt Daily for a particular energy delivery day (“d”), the Power Index shall be derived in the following manner:

Power Indexd = Off-Peak Indexd when d = any Sunday or any NERC Holiday;

or Power Indexd = {[(On-Peak Indexd) x 16] + [(Off-Peak Indexd) x 8]} ÷ 24 when d = any applicable delivery day other than Sunday or NERC Holiday.

Power Index Restructuring. Notwithstanding Section 3.4 of the Master Agreement, if, for any reason Platts Megawatt Daily ceases to publish the On-Peak Index and Off-Peak Index, then the On-Peak Index and Off-Peak Index will be obtained from The Wall Street Journal’s Dow Jones Electricity Price Indexes publication. If neither publication reports the On-Peak Index or Off-Peak Index, then the Parties shall negotiate in good faith to determine an alternative source for determining the Power Index. Any substitute index or indices must be recognized in the industry as a measure of aggregate daily prices for Energy. If the Parties are unable to agree on a successor market, index, or methodology within thirty (30) days of the date that the On-Peak Index or Off-Peak Index cease to be published, then the dispute resolution procedures of Section 10.6(b) of the Master Agreement shall apply.

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2.2 Energy Payment For each day that [CAISO Energy or WSPP Schedule C Energy] is scheduled and received for the Product specified in the “Product Table” in Section 1.4, SCE shall pay to Seller, in accordance with Section 6.1 of the Master Agreement, the product of:

(a) the Contract Price for the Product for that day; and (b) the amount of [CAISO Energy or WSPP Schedule C Energy] scheduled and received for that Product during such day.

ARTICLE 3 SPECIAL TERMS AND CONDITIONS

3.1 California Climate Action Registry In accordance with CPUC Rulemaking 06-04-009, upon modification of the protocols of the California Climate Action Registry to allow generation facility-specific registration, Seller shall promptly (i) register with the California Climate Action Registry and (ii) send SCE Notice of such registration.

3.2 Resource Adequacy Benefits [ONLY FOR NON-SP15 PRODUCTS]

Seller grants, pledges, assigns, and otherwise commits to SCE the full Quantity of the Product in order for SCE to meet its Resource Adequacy Requirement (“RAR”) under any Resource Adequacy Rulings. Seller represents, warrants, and covenants to SCE that Seller (a) has not used, granted, pledged, assigned, or otherwise committed, and (b) will not use, grant, pledge, assign, or otherwise commit any portion of the Quantity of the Product to meet the RAR of, or confer Resource Adequacy Benefits upon, any entity other than SCE during the Term. The Parties shall take all actions (including amending this Agreement and complying with all current and future Tariff provisions and decisions of the CPUC and/or any other Governmental Authority that address Resource Adequacy performance obligations and penalties) and execute all documents or instruments necessary to effect the use of the Resource Adequacy Benefits of the Quantity of the Product for SCE’s sole benefit throughout the Term.

3.3 Mark-to-Market [For Products using Heat Rate pricing]

Notwithstanding anything in Sections 8.1(c) or 8.2(c) of the Master Agreement or in Paragraphs 1 and 3 of the Collateral Annex to the contrary, for purposes of determining Exposure, the Parties shall calculate the Current Mark-to-Market Value of this Transaction using the following methodology (unless otherwise defined, capitalized terms in this Mark-to-Market section are used with the meanings ascribed to them in the Collateral Annex):

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On any Calculation Date, the Current Mark-to-Market Value will be calculated by taking the sum of the present values for each remaining full or partial month in the Term using the equation below:

n Current Mark-to-Market Value =  MVt,i - MVo,i i Where:

MVt,i = [(Pt,i - Gt,i x HRi) x Qi] x CFt

MVo,i = [(Po,i - Go,i x HRi) x Qi] x CFo - 7 days

Variable Description Units n The number of forward months included in the mark-to-market calculation. i A forward month. For the balance of the month of the Calculation Date, i=0. For the month following the month of the Calculation Date, i=1, etc.

Pt,i The midpoint from a Forward Price Assessment for SP15 on- $/MWh peak for the relevant forward month i on the Calculation Date. If the product being valued is a super-peak product, then the on-peak price will be multiplied by 1.20. In the event a Forward Price Assessment cannot be obtained for a forward period on the Calculation Date, then the prices for all forward periods for which there are no Forward Price Assessments shall be set equal to the Forward Price Assessment for the last available year.

Po,i The midpoint from a Forward Price Assessment for SP15 on- $/MWh peak for the relevant forward month i on the Confirmation Effective Date. If the product being valued is a super-peak product, then the on-peak price will be multiplied by 1.20. In the event a Forward Price Assessment cannot be obtained for a forward period on the Confirmation Effective Date, then the prices for all forward periods for which there are no Forward Price Assessments shall be set equal to the Forward Price Assessment for the last available year.

Gt,i The midpoint from a Forward Price Assessment for Southern $/MMBtu California Border natural gas (i.e., closing price for NYMEX Henry Hub + Henry Hub to SoCal Border Basis) for the relevant forward month i on the Calculation Date. In the event a Forward Price Assessment cannot be obtained for a forward period on the Calculation Date, then the prices for all forward periods for which there are no Forward Price Assessments shall be set equal to the Forward Price Assessment for the last available year.

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Variable Description Units

Go,i The midpoint from a Forward Price Assessment for Southern $/MMBtu California Border natural gas (i.e., closing price for NYMEX Henry Hub + Henry Hub to SoCal Border Basis) for the relevant forward month i on the Confirmation Effective Date. In the event a Forward Price Assessment cannot be obtained for a forward period on the Confirmation Effective Date, then the prices for all forward periods for which there are no Forward Price Assessments shall be set equal to the Forward Price Assessment for the last available year.

HRi The Strike Heat Rate specified in the “Product Table” above for MMBtu/MWh the relevant forward month

Qi The Quantity specified in the “Product Table” above multiplied MW * Hours by the hours remaining under the Transaction for the relevant forward month

CFt The capacity factor on the Calculation Date, determined by % dividing the power price (Pt,i) by the natural gas price (Gt,i) for the relevant forward months, to generate a market heat rate (“MHR”) curve and calculating what percent of the relevant forward months the Strike Heat Rate (“SHR”) is below the MHR. This is formulaically equal to the quotient of (a) the number of months SHR

CFo – 7 days The capacity factor on December 6, 2006, determined by % dividing the power price (Po – 7 days,i) by the natural gas price (Go – 7 days,i) for the relevant forward months, to generate a market heat rate (“MHR”) curve and calculating what percent of the relevant forward months the Strike Heat Rate (“SHR”) is below the MHR. This is formulaically equal to the quotient of (a) the number of months SHR

For present value purposes, the discount rate should use the appropriate yield curve using U.S. Treasury constant maturities securities as posted by the Federal Reserve in their H.15 daily update at the following address: http://www.ustreas.gov/offices/domestic-finance/debt-management/interest- rate/yield.html. A positive Current Mark-to-Market Value implies SCE has the potential for realization of market gains and thus has Exposure to Seller’s default or non- performance. Notwithstanding anything to the contrary contained in the Collateral Annex or this Confirmation, the Parties shall determine the Settlement Amount for this Transaction in accordance with Section 5.2 of the Master Agreement. [For power indexed and energy fixed price Transactions]

[TO BE NEGOTIATED]

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3.4 Credit Terms The credit terms in the Master Agreement and the Collateral Annex shall govern this Transaction; provided, however, that for purposes of calculating a Party's Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, if Seller has Exposure to SCE in respect of the Transaction, then the amount of Exposure for this Transaction is deemed to be zero dollars ($0).

ARTICLE 4 MISCELLANEOUS

4.1 Contact Information SELLER BUYER Phone/Fax Phone/Fax

Day Ahead Trading: [xxx-xxx-xxxx / xxx-xxx-xxxx] 626-307-4487 / 626-307-4430

Real Time Trading: [xxx-xxx-xxxx / xxx-xxx-xxxx] 626-307-4453 / 626-307-4416

Day Ahead Scheduling: [xxx-xxx-xxxx / xxx-xxx-xxxx] 626-307-4425 / 626-307-4413

Real Time Scheduling: [xxx-xxx-xxxx / xxx-xxx-xxxx] 626-307-4405 / 626-307-4416

Settlements: [xxx-xxx-xxxx / xxx-xxx-xxxx] 626-302-3277 / 626-302-3276

ACKNOWLEDGED AND AGREED TO AS OF [Date]:

[Counterparty] Southern California Edison Company

By: By:

Name: Name:

Title: Title:

Date: Date: