(Index to Sections Cont.)

Section

10. Adjustment for Change of Conditions...

Assignment of Agreement..

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This AGREEMENT, executed

as of January 13

1969, by the UNITED STATES OF AMERICA (hereinafter called "the Government"), Department of the Interior, acting by and through the BONNEVILLE POWER ADMINISTRATOR (hereinafter called "the Administrator"), THE CITY OF EUGENE, OREGON (Eugene), a municipal corporation of the State of Oregon; THE CITY OF SEATTLE, WASHINGTON (Seattle), a municipal corporation of the State of Washington; THE CITY OF TACOMA, WASHINGTON (Tacoma), a municipal corporation of the State of Washington; PUBLIC UTILITY DISTRICT NO. 2 OF GRANT COUNTY, WASHINGTON (Grant PUD), a municipal corporation of the State of Washington; PUBLIC UTILITY DISTRICT NO. 1 OF CHELAN COUNTY, WASHINGTON (Chelan PUD), a municipal corporation of the State of Washington; PUBLIC UTILITY DISTRICT NO. 1 OF PEND OREILLE COUNTY, WASHINGTON (Pend Oreille PUD), a municipal corporation of the State of Washington; PUBLIC UTILITY DISTRICT NO. 1 OF DOUGLAS COUNTY, WASHINGTON (Douglas PUD), a municipal corporation of the

State of Washington; PUBLIC UTILITY DISTRICT NO. 1 OF COWLITZ COUNTY, WASHINGTON (Cowlitz PUD), a municipal corporation of the State of Washington; PUGET SOUND POWER & LICHT COMPANY (Puget), a corporation; PORTLAND CENERAL ELECTRIC COMPANY (Portland General), a corporation; PACIFIC POWER & LIGHT COMPANY (Pacific), a corporation; THE WASHINGTON WATER POWER COMPANY (Washington Water Power), a corporation; THE MONTANA POWER COMPANY (Montana), a corporation; IDAHO POWER COMPANY (Idaho), a corporation;

WITNESS ETH:

WHEREAS the Government and the City of Los Angeles ("the City") are constructing a d-c transmission line with a nominal voltage of 750 kv from the Government's Celilo substation to the City's Sylmar Switching Station, and related terminal facilities, the portion located in Oregon being constructed by the Government and the remaining portion being constructed by the City; and

WHEREAS two 500 kv a-c transmission lines and related facilities from the Government's John Day substation to the Lugo substation near Los Angeles, California, have been constructed by the Government, Portland General, Pacific, and by utilities located in the State of California; and

WHEREAS the 750 kv and 500 kv transmission lines are a part of the Pacific Northwest-Pacific Southwest Intertie program as recommended to Congress by the Secretary of the Interior and approved by the Congress by making appropriations for the construction of the Government portion thereof; and

WHEREAS the Pacific Northwest-Pacific Southwest Intertie

program contemplates arrangements to provide transmission capacity

between the Government's system and utility systems of the Pacific Northwest and the Government's system and the systems of entities in the Pacific Southwest; and

WHEREAS this agreement is one of a series of agreements relating to the use of a part of the Pacific Northwest-Pacific Southwest Intertie, which agreement implements such program; and

WHEREAS the parties hereto from time to time will have Exportable Energy (hereinafter defined) available on their respective systems for sale to California entities; and

WHEREAS capacity available in the Oregon sections of the

two 500 kv a-c transmission lines and the 750 kv d-c transmission line ("Transmission Facilities") will be used, among other purposes, to deliver electric energy to or for each of the parties hereto in the manner set forth in this agreement; and

WHEREAS Pacific and Portland General have heretofore entered into agreements with the Administrator designated as Contract No. 14-03-56379 and Contract No. 14-03-55063, respectively, which provide that use of capacity in the Administrator's intertie facilities, pursuant to such agreements, terminate at the time in each calendar year whenever deliveries (hereinafter referred to herein as "Priority Deliveries"): (1) by Pacific to California entities reach a total of 270,000,000 kilowatt-hours and Pacific has currently a 300,000,000 kilowatt-hour entitlement under the Agreement with Pacific Gas and Electric Company dated September 20, 1967, and (2) by Portland General to California entities reach 1,100,000,000 kilowatt-hours or as such amount is reduced pursuant to Contract No. 14-03-55063; and