1. THIS CONTRACT, made this 29th day of May, 1941, pursuant to the Act of Congress approved June 17, 1902 (32 Stat. 388), and acts amendatory thereof

or supplementary thereto, all of which acts are commonly known and referred to as the Reclamation Law, and particularly pursuant to the Act of Congress approved December 21, 1928 (45 Stat. 1057), designated the Boulder Canyon Project Act (hereinafter referred to as the "Project Act”), and to the Act of Congress approved July 19, 1940 (54 Stat. 774), designated the Boulder Canyon Project Adjustment Act (hereinafter referred to as the "Adjustment Act"), between THE UNITED STATES OF AMERICA (hereinafter referred to as the "United States"), acting for this purpose by Harold L. Ickes, Secretary of the Interior hereinafter referred to as the "Secretary"), and THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, a public corporation organized and existing under the laws of the State of California (hereinafter referred to as the "District"):

WITNESSETH THAT:

EXPLANATORY RECITALS

2. WHEREAS, pursuant to the provisions of the Project Act, the United States entered into a certain contract designated as "Contract for Lease of Power Privilege", dated April 26, 1930, with severally, The City of Los Angeles and its Department of Water and Power (hereinafter collectively referred to as the "City") and Southern California Edison Company Ltd. (hereinafter referred to as "Edison Company") which contract was thereafter amended by two certain contracts between the same parties, dated May 28, 1930, and September 23, 1931, and was also modified by a certain contract between the United States and the City, dated July 6, 1938, and consented to by Edison Company, which Contract for Lease of Power Privilege, dated April 26, 1930, together with said amendatory and modifying contracts, are hereinafter collectively referred to as the "Lease"; and

3. WHEREAS, under date of April 26, 1930, the parties hereto entered into a certain contract for electrical energy, which contract was amended under date of May 31, 1930, and was also modified by a certain contract between the parties hereto, dated July 13, 1938, such contract as so amended and modified being hereinafter collectively referred to as the "Original Contract"; and

4. WHEREAS, by the terms of the Adjustment Act it is provided, among other things, that the Secretary is authorized to negotiate for and enter into a contract for the termination of the existing Lease of the Boulder Power Plant, and that the Secretary, in consideration of such termination of the Lease, is authorized to designate the City and Edison Company as the agents of the United States for the operation of Boulder Power Plant; and

5. WHEREAS, under date of May 29, 1941, the United States and the City and Edison Company (hereinafter collectively referred to as "Operating Agents") have executed a contract designated "Contract for the Operation of Boulder Power Plant", a copy of which said contract is attached hereto, marked "Exhibit 1"; and

6. WHEREAS, under date of May 20, 1941, the Secretary approved and promulgated "General Regulations for Generation and Sale of Power in Accordance with the Boulder Canyon Project Adjustment Act", a copy of which is attached hereto, marked "Exhibit 2";

7. Now, THEREFORE, in consideration of the provisions, covenants and conditions herein contained, the parties hereto agree as follows, to wit:

REGULATIONS AND AGENCY CONTRACTS

8. (a) This contract is subject to all the terms and provisions of Exhibit 2 hereof which is hereby made a part hereof as fully and completely as though set out herein at length, and this contract is subject to such other rules and regulations as hereafter may be promulgated by the Secretary pursuant to law and to Article 27 of Exhibit 2 hereof.

(b) The District hereby consents that the United States shall, and the United States agrees that it shall, cause the energy agreed to be delivered hereunder to be generated and delivered in accordance with the provisions of Exhibit 1; and the parties hereto agree that the rights and obligations of the District under this contract shall be controlled by the provisions of Exhibit 1 to the extent that such provisions are applicable to the District as an allottee or contractor for electrical energy; provided, however, that in the event that such Exhibit 1 shall be terminated as to either or both of the Operating Agents therein named, the United States thereafter shall itself generate and deliver the energy agreed by the United States to be generated and delivered through the agent or agents as to which said Exhibit 1 shall have been terminated.

DELIVERY OF ENERGY

9. (a) The United States agrees to deliver at transmision voltage at Boulder Power Plant, and the District agrees to take and/or pay for, electrical energy in accordance with the provisions of Article 8 hereof, for the period from the effective date of this contract to May 31, 1987, inclusive, in accordance with the allocation of energy contained in Exhibit 2; provided, that the United States shall have the right to interchange energy from its hydroelectric plants on the Colorado River below Boulder Dam with energy allocated to the District and generated at Boulder Power Plant, and to deliver energy at the point of connection of such other hydroelectric plants to the District's transmission line in lieu of delivering energy at Boulder Power Plant, in so far as such interchange can be effected without interfering with service to, or increasing the charges against, the District and without impairing or extending the rights or obligations, respectively of other allottees. The District agrees that the United States may so interchange energy in so far as practicable, as a means of effecting integration of operations as between Boulder Power Plant and other projects on the Colorado River owned

and operated by the United States at which power is or may be developed, as the primary step in any program of integration of operations agreed upon, decided or determined pursuant to Article 20 (b) of Exhibit 1. For the purpose of effectuating such interchange, the United States shall have the right to connect, without cost to the District, such other hydroelectric plants with the transmission system of the District, and the right to use, without cost to the United States, any power transmission capacity of said transmission system which for the time being may be in excess of the District's requirements; provided, that the use of such excess capacity at all times shall be subject to reasonable operating conditions fixed by the District. The District shall have the opportunity to present its views to the Secretary or his representative on the electrical characteristics of the generating and transforming equipment to be used to supply energy from power plants other than Boulder Power Plant under this Article 9(a) before proposals for the furnishing of the same are invited. The design and specifications of any connections with the District's transmission system shall conform to specifications approved by the General Manager and Chief Engineer of the District.

(b) Section G-2 and T-2, described in Exhibit 2, shall be used solely for the service of the District, subject to Article 15 of Exhibit 1 and Article 20 of Exhibit 2. If, after giving the District an oportunity to present its views, the Secretary shall find it to be necessary or economically advantageous to provide service to resale consumers of energy allocated to but unused by the District, by means of equipment herein designated for service to the District, or any additions thereto necessary for such service to the District and to such resale consumers, the District hereby consents to such use of said equipment, and to such additions thereto. The District further agrees to pay the generating charges in the manner prescribed by Exhibit 2, attributable to equipment so used for the service of such resale consumers, less payments therefor made to the United States by such resale consumers.

DELIVERY OF WATER FOR GENERATION OF ELECTRICAL ENERGY

10. (a) Subject to:

(i) the statutory requirement that Boulder Dam and the reservoir created thereby shall be used: First, for river regulation, improvement of navigation, and flood control; second, for irrigation and domestic uses and satisfaction of perfected rights mentioned in Section 6 of the Project Act; and third, for power; and

(ii) the further statutory requirement that this contract is made upon the express condition and with the express covenant that the rights of the District, as a contractor for electrical energy, to the use of the waters of the Colorado River, or its tributaries, shall be subject to and controlled by the Colorado River Compact;

the United States will deliver to the District energy in the manner required by this contract, in the quantity to which the District is entitled hereunder, and in accordance with the District's load requirements.

(b) The United States reserves the right temporarily to discontinue or reduce the delivery of water for the generation of electrical energy at any time for the purpose of maintenance, repairs and/or replacements, or installation of equip ment, at the project, and for investigations and inspections necessary thereto; provided, however, that the United States shall, except in case of emergency, give to the District reasonable notice in advance of such temporary discontinuance or reduction, and that the United States shall make such inspections and perform such maintenance and repair work, after consultation with the District, at such times and in such manner as to cause the least inconvenience to the District and that the United States shall prosecute such work with diligence, and, without unnecessary delay, resume delivery of water so discontinued or reduced.

(c) Should the delivery of water, for any reason or cause, other than any act or omission of the District, be discontinued or (after application of the agreement for interchange of energy as hereinabove set out) be reduced below the amount required for the generation of firm energy in accordance with the provisions of this contract, the total number of hours of such discontinuance or reduction in any year shall be determined by taking the sum of the number of hours during which the delivery of water is totally discontinued, plus the product of the number of hours during which the delivery of water is partially reduced and the percentage of said partial reduction below the actual quantity of water required for generation of firm energy. Total or partial reductions in the delivery of water which do not reduce the power output below the amount required at the time for generation of firm energy will not be considered in determining the total hours of discontinuance in any year. The minimum annual payment specified in Article 14 hereof shall be reduced by the ratio that the total number of hours of such discontinuance bears to eight thousand seven hundred sixty (8,760).

(d) In no event shall any liability accrue against the United States, its officers, agents and/or employees, for any damage, direct or indirect, arising on account of drought, hostile diversion, Act of God, or the public enemy, or other similar cause, nevertheless interruptions in delivery of water occasioned by such causes. shall be governed as provided in this Article 10. In the event of shortage of electrical energy at Boulder Power Plant due to shortage of water, the available electrical energy shall be prorated among all allottees concerned, on the basis of their respective obligations to take and/or pay for firm energy in the year of operation in which the shortage occurs.

MEASUREMENT OF ENERGY

11. All electrical energy delivered at Boulder Power Plant shall be measured at generator voltage. Suitable correction shall be made in the amounts of energy as measured at generator voltage to cover step-up transformer losses. The electrical energy delivered hereunder during any period in which the meters furnished to measure such electrical energy fail to register shall, for billing purposes,