Loading...
HomeMy WebLinkAbout18 SMR Power Sales ContractAgenda Item 918 To: Board of Directors From: Stephen Hollabaugh Date: April 4, 2018 Subject: Consideration of a Power Sales Contract for the UAMPS Carbon Free Power Project using Small Modular Nuclear Reactors 1. WHY THIS MATTER IS BEFORE THE BOARD Consideration of a Power Sales Contract with UAMPS for the Carbon Free Power Project (CFPP) in Idaho requires Board Action 2. HISTORY Conservation is considered first resource for all new energy purchases. District forecast assumes that load increases by 1 % annually in future years. Conservation is expected to account for 1-3% of total load, therefore conservation will offset some of the growth that would otherwise require additional resources. The District forecast load will be approximately Y2% per year going forward taking into account the conservation offset of most of the growth. The District is seeking baseload carbon free resource with the ability to ramp and follow a wind resource to fill the need to balance rates, renewables and reliability. The Board has held several workshops and action items concerning the CFPP over the last two years. The three phases of the CFPP are Study and Siting Phase, Licensing Phase and Construction Phase. Below is a list of these meetings: • April 15, 2015; Introduced the project to the Board; • August 19, 2015; Board approved to enter into an agreement with UAMPS for the study phase of the project and a 4 MW site share of the CFPP; • September 12-13, 2016; Staff and two Board members attended UAMPS Informational Session concerning the project; • January 19, 2017; Board Workshop to discuss carbon -free hedge, outreach plan, and the start of the Licensing Phase of the project and the three sub -phases of the Licensing Phase. • February 1, 2017; Board Workshop to discuss Small Modular Reactor (SMR) technology, CFPP licensing phase and financial and environmental performance; and • February 7, 2018; Workshop to discuss CFPP and Small Modular Reactor (SMR), why it works, project structure, technology, alternatives, integration, team, contract and permits, and power sales contract; • March 7, 2018; Board Workshop to discuss Power Sales Contract, nuclear fuel cycle and upcoming schedule of project. District staff has been attending monthly UAMPS Project Management Committee (PMC) meetings regarding the CFPP. The CFPP has completed the study phase and is considering participation in the licensing phase. As stated before, there remains numerous off ramps for this project going forward. 3. NEW INFORMATION The next step is consideration of approval of the Power Sales Contract (PSC). The PSC will bring us to the beginning of the license phase in March of 2019. Schedules from the Budget and Plan of Finance are presented below: Truckee (the "Participant"): Interim Period (4 MlM 2.1751 % 150 MW Subscribed (4 MM 206667% Fully Subscribed (4 MlM 006667% Estimated Costs to Completion of )evelopment: Interim Period (FY2018) Licensing Period - 1st Phase (Maximum) Licensing Period - 1st Phase (Remaining) Licensing Period - 2nd Phase (Preliminary) Participant Net of Cost Share Start $ 18,975 40,000 438,954 31308,687 $ 3,806,616 Price Target (2017) Estimated range (per MWh): April 2017 April 2018 April 2019 June 2020 Finish March 2018 March 2019 May 2020 June 2023 April 2017 June 2023 $45.00 to $65.00 As seen above, there is very little financial risk in the Licensing Period —1St Phase through March 2019. Staff supports approval of the PSC as it keeps the District's options open and there will be another decision point in March 2019 before submitting the Combined Operating License Application (COLA) to NERC. The cost estimate for this resource is between $45 to $65 per MWh. This is an excellent price for a resource that can act as a carbon free base load resource and also ramp to follow wind resources such as Horse Butte Wind. The following documents are included in the Board package: 1. Talking Points and Abridged FAQ's highlighting the CFPP business points. 2. The Power Sales Contract and Initial Budget and Plan of Finance 3. An Executive Summary of the Power Sales Contract that provides information regarding the Contract for District review 4. The Resolution to be adopted by the District approving the Power Sales Contract, Initial Budget and Plan of Finance and related matters, 5. The form of the Certificate covering District approval and execution of the Power Sales Contract, and 6. The form of the legal Opinion with respect to the Power Sales Contract to be delivered by the District's attorney. The Board executive summary provides Cl" excellent project overview which includes: • OVERVIEW • BASIC TERMS AND PROVISIONS • PROJECT MANAGEMENT COMMITTEE (PMC) • PROJECT PERIODS AND PHASES • DEVELOPMENT WORK DURING THE LICENSING PERIOD • BUDGET AND PLAN OF FINANCE • PARTICIPANT WITH RIGHTS DURING THE LICENSING PERIOD FINANCING FOR DEVELOPMENT COSTS DURING THE LICENSING PERIOD • FINANCING FOR COST OF ACQUISITION AND CONSTRUCTION • LEGAL SUMMARY OF POWER SALES CONTRACTS 4. FISCAL IMPACT Signing the Power Sales Contract: The decision to proceed with signing the Power Sales Contracts for the CFPP is not a decision to construct the CFPP utilizing NuScale's small modular reactor technology; rather, the decision to sign the Power Sales Contracts gives the District the ability to preserve the option to participate in this project if further development warrants continuation. The next decision point after signing the PSC will be in March 2019, when each Participant has a unilateral right to decide whether to continue with the project. This decision to continue will be predicated on the PMC deciding to amend the Budget Plan of Finance to increase the budget above the $6M spend. In the immediate development term (April 2018 through March 2019), the first $6 million of additional total project development costs will be subject to 100% reimbursement. These moneys will be spent only on additional development work on the project, and this work will help evaluate whether further development of the project is in the best interest of UAMPS' participating members. UAMPS plans to continue to have development costs subject to 100% reimbursement up until UAMPS decides to submit its Nuclear Regulatory Commission license application in the summer of 2020. The decision to submit its NRC license application will be dependent upon the level of contractual cost certainty NuScale and Fluor are able to provide. If the level of contractual cost certainty is not sufficient in the eyes of a UAMPS member participating in the project, then that member will have the option to discontinue its participation in the project, with no obligation for further development costs, at the time that the NRC license application is submitted. The Power Sales Contracts provide contractual caps to a Participant's cost exposure during this development period. The CFPP will represent a portion of the electric power supply portfolio that might otherwise be purchased from the market or from abase -load fossil fuel resource. The District's 4 MW subscription will represent just under 20% of the electric supply portfolio. This type of resource will be necessary to achieve any 100% carbon free goal or mandate in the future. The base load and flexible ramping speed of this resource make it very valuable within the portfolio. The forecast price between $45 and $65 per MWh helps the District maintain stable and competitive rates. The CFPP is a hedge against a base load generation cost and a hedge against carbon dioxide regulation that may impose cost burdens on existing fossil fuel resources. The CFPP also provides greater diversification in our resource portfolio. 5. RECOMMENDATION Authorize the Board President to sign Resolution 201&03 authorizing the Carbon Free Power Project Power Sales Contract with Utah Associated Power Systems; and related matters in substantially the form attached and approved by District counsel. Stephen Hollabaugh Michael D. Holley Assistant General Manager General Manager Resolution Igo. 2018-03 A RESOLUTIObq AUTHORIZING AND APPROVING I "Im CARBON FREE MUNICIPAL P01NER S1 STEMS9 THE IC\1041AL BUDGET AND PLAN OF FINANCE FOR THE PROJECTS AND RELATED MATTERS WHEREAS, Truckee Donner Public Utility District, California (the "Participant") is a member of Utah Associated Municipal Power Systems ( "UAMPS ") pursuant to the provisions of the Utah Associated Municipal Power Systems Amended and Restated Agreement for Joint and Cooperative Action, as amended (the "Joint Action Agreement "); WHEREAS, one of the purposes of UAMPS under the Joint Action Agreement is the acquisition and construction of electric generating, transmission and related facilities in order to secure reliable, economic sources of electric power and energy for its members; WHEREAS, UAMPS proposes to acquire and construct a nuclear generating facility plant known as the Carbon Free Power Project (the "Project") to be located at a site within the Idaho National Laboratory near the City of Idaho Falls, Idaho; WHEREAS, the Governing Body has reviewed (or caused to be reviewed on its behalf) certain descriptions and summaries of the Project, the Power Sales Contract and the Project Agreements ("Project Agreements" and other capitalized terms used and not defined herein shall have the meanings assigned to them in the Power Sales Contract), and representatives of the Participant have participated in discussions and conferences with UAMPS and others regarding the Project and have received from UAMPS all requested information and materials necessary for the decision of the Governing Body to authorize and approve the Power Sales Contract; WHEREAS, the Participant acknowledges that the obligation of the Partant to make the payments provided for in the Power Sales Contract will be a special obligation of the Participant and an operating expense of the Participant's electric system, payable from the revenues and other available funds of the electric system, and that the Participant shall be unconditionally obligated to make the payments required under the Power Sales Contract whether or not the Project or any portion thereof is acquired, constructed, completed, operable or operating and notwithstanding the suspension, interruption, interference, reduction or curtailment of the output thereof for any reason whatsoever; WHEREAS, the Governing Body has reviewed (or caused to be reviewed on its behalf) the initial Budget and Plan of Finance for the Project prepared by UAMPS setting forth, among other things, preliminary estimates of the Development Costs, Cost of Acquisition and Construction, the estimated timeline for the development and construction of the Project, the estimated target price range for Project output, and now desires to approve the initial Budget and Plan of Finance; and WHEREAS, the Participant now desires to authorize and approve the Power Sales Contract; Now, THEREFORE, BE IT RESOLVED by the Governing Body of Truckee Donner Public Utility District, California, as follows: Section 1. Approval of Power Sales Contract and Budget and Plan of Finance; Entitlement Share. (a) The Power Sales Contract, in substantially the form attached hereto as Annex A, is hereby authorized and approved, and the President is hereby authorized, empowered and directed to execute and deliver the Power Sales Contract on behalf of the Participant, and the Clerk is hereby authorized, empowered and directed to attest and countersign such execution and to affix the corporate seal of the Participant to the Power Sales Contract, with such changes to the Power Sales Contract from the form attached hereto as Annex A as shall be necessary to conform to the Participant's legal status, to complete the form of the Power Sales Contract or to correct any minor irregularities or ambiguities therein and as are approved by the President, his execution thereof to constitute conclusive evidence of such approval. (b) The initial Budget and Plan of Finance attached hereto as Annex B is hereby approved. (c) An Entitlement Share representing up to 4,000 kW of capacity, as such capacity amount may be rounded upon the approval of the Project Management Committee and the Participant's Representative pursuant to the Power Sales Contract to provide a whole number of small modular reactors is hereby authorized and approved. Section 2. Participant's Representative. (a) The appointment of Stephen Hollabaugh as the Participant's Representative to UAMPS and of Joseph Horvath as alternate Representatives is hereby confirmed. (b) Such Representative (or, in his or her absence, such alternate(s)) is hereby delegated full authority to (i) approve any appendix to the Pooling Agreement between UAMPS and the Participant that may be necessary or desirable in connection with the utilization of the Participant's Entitlement Share, and (ii) act on all matters that may come before the Project Management Committee established by the Power Sales Contract, and shall be responsible for reporting regularly to the Governing Body regarding the activities of the Project Management Committee; provided that the Representative shall not deliver a Notice of Withdrawal or a Notice of Reduction under the Power Sales Contract without prior consultation with, and prior approval from, the Governing Body. Section 3. Compliance with Tax Covenants. The Participant agrees in the Power Sales Contract that it will apply all of the electric power and energy acquired under the Power Sales Contract to a Qualified Use and that it will not take or omit to take any action which could adversely affect the Tax Status of any Bond or Bonds theretofore issued or thereafter issuable by UAMPS. In furtherance of that agreement, the Governing Body of the Participant hereby agrees that it will observe and comply with such instructions as may be provided from time to time by DAMPS with respect to the Qualified Use of the electric power and energy acquired under the Power Sales Contract, Section 4. Further Authority. (a) The President and the Clerk are hereby authorized, empowered and directed to (i) execute the Certificate of the Participant in substantially the form attached as Exhibit III to the Power Sales Contract and to deliver the same to UAMPS, and (ii) from time thereafter and upon the request of DAMPS, execute the Bring -Down Certificate of the Participant in substantially the form attached as Exhibit IV to the Power Sales Contract and to deliver the same to UAMPS. (b) The Participant's legal counsel is hereby authorized, empowered and directed to (i) execute the Opinion of Counsel to the Participant in substantially the form attached as Exhibit V to the Power Sales Contract and to deliver the same to DAMPS, and (ii) from time thereafter and upon the request of UAMPS, execute the Bring -Down Opinion of Counsel to the Participant in substantially the form attached as Exhibit VI to the Power Sales Contract and to deliver the same to UAMPS. Section 5. Miscellaneous; Effective Date. (a) This resolution shall be and remain irrepealably until the expiration or termination of the Power Sales Contract in accordance with its terms. (b) All previous acts and resolutions in conflict with this resolution or any part hereof are hereby repealed to the extent of such conflict. (c) In case any provision in this resolution shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. (d) This resolution shall take effect immediately upon its adoption and approval. (e) The Utah Associated Municipal Power Systems Amended and Restated Agreement for Joint and Cooperative Action dated as of March 209 2009 and all amendments thereof and supplements thereto (the "Joint Action Agreement") is hereby authorized, approved, ratified and confirmed, and the officers of and attorney for the Participant authorized above are hereby authorized and directed to execute and deliver the Joint Action Agreement for and on behalf of the Participant. PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District in a meeting duly called and held within said District on the fourth day of April, 2018 by the following roll call vote: AYES: Directors: Ellis, Aguera, Warmerdam, Bender, and President Laliotis, NOES: None. TRUCKEE DONNER PUBLIC UTILITY DISTRICT By: Tony LaIIOtIS, President of the Board ATTEST: Shanna D. Kuhlemier1 CMC, District Clerk Dated CFPP Talking Points Why the CFPP? UAMPS' members are developing the Carbon Free Power Project ( CFPP") as a zero carbon emitting resource option to meet the long term resource needs of UAMPS' member communities. The electric industry is quickly evolving due to revolutionary technology, and developing the CFPP will provide UAMPS members participating in this project with the optionality to meet the needs of a future new energy economy significantly penetrated by renewable resources. Signing the Power Sales Contracts. The decision to proceed with signing the Power Sales Contracts for the CFPP is not a decision to construct the CFPP utilizing NuScale's small modular reactor technology; rather, the decision to sign the Power Sales Contracts gives the member the ability to preserve the option to participate in this project if further development demonstrates the prudence of doing so. In the immediate development term, the first $6 million of additional development costs will be subject to 100% reimbursement. These moneys will be spent only on additional development work on the project, and this work will help us evaluate whether further development of the project is in the best interest of UAMPS' participating members. UAMPS plans to continue to have development costs subject to 100% reimbursement up until UAMPS decides to submit its Nuclear Regulatory Commission license application in the summer of 2020. The decision to submit its NRC license application will be dependent upon the level of contractual cost certainty NuScale and Fluor are able to provide. If the level of contractual cost certainty is not sufficient in the eyes of a UAMPS member participating in the project, then that member will have the option to discontinue its participation in the project, with no obligation for further development costs, at the time that the NRC license application is submitted. The Power Sales Contracts provide contractual caps to a Participant's cost exposure during this development period. CFPP Abridged FAQ How will the CFPP not suffer the same cost overruns as experienced by the two AP1000 nuclear reactor proiects in Georgia and South Carolina? UAMPS is taking a phased development approach to developing the project that address cost overrun risk in two ways. First, the two AP1000 reactor projects were developed in a parallel fashion, where the utilities shouldered NRC licensing risk by making contractual and financial commitments to build these projects prior to the resolution of major design and licensing issues. UAMPS' decision on whether to submit its NRC license application will be made after the NRC has spent over three years evaluating NuScale's design application, which will allow UAMPS to assess any licensing issues that may have arisen prior to submitting its license application to the NRC. Second, UAMPS is requiring contractual cost certainty from Fluor and NuScale before UAMPS makes its decision to submit its NRC license application. To meet this demand, Fluor and NuScale will need to complete significantly more engineering work than Oat was completed for the two AP1000 projects. What is the cost exposure to a member in n signing the Power Sales Contracts? Each member will be responsible for costs associated with its Entitlement Share for the developing the project. The Budget and Plan of Finance contains a cap on the amount of development costs that can be 1 incurred during the first phase of the development and licensing period, and will contain a capon the amount of development costs that can be incurred during the second phase of the development and licensing period that will be set before the beginning of the second phase. Accordingly, a Participant's cost exposure for each phase will be in a fixed amount that is based on these caps and its Entitlement Share. UAMPS is happy to provide the specific cost exposure for a participant's desired Entitlement Share. It is important to keep in mind that for the near term development the UAMPS and the participants have the ability to terminate the project for any reason and seek 100% reimbursement from NuScale, subject to a cap of $3 million dollars. What is the cost of the resource? The projected cost of the resource is $45-65/MWh in current dollars. UAMPS and NuScale have agreed to a price ceiling of $65/MWh. The cost of resource will be continually evaluated as development proceeds in order to evaluate this resource option against other alternatives. Who are the partners in the project outside of the UAMPS members? The Department of Energy is a key partner in the developing the project. DOE is currently paying for 50% of the cost to develop the NRC license application for the project. In addition, the DOE is investigating leasing the first two modules out of the facility for research and development purposes. UAMPS and the DOE are also investigating other funding pathways to reduce UAMPS' participant cost exposure to further developing the resource. UAMPS is also working with Energy Northwest, a public power entity that operates the Columbia Generating Station —an 1100 MW nuclear generating station located in Washington that has been in operation since 1984—to be the operating agent for the CFPP. UAMPS is also working with the Tennessee Valley Authority, which is also pursuing a small modular reactor project, to assist UAMPS' development of the CFPP. 2 TOWER Eons 02 CARBON FREE POWER PROJECT POWER SALES CONTRACT BETWEEN UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS' TRUCKEE DONNER PUBLIC UTILITY DISTRICT, CALIFORNIA. DATED AS OF APRIL I, 2O 1 g Power Sales Contract 4813-1414-2287 v.37.docx 8706715/JB/mo TABLE OF CONTENTS PAGE RECITALS................................................1 ARTICLE I DEFINITIONS ANp RULES OF CONSTRUCTION..........................................................2 Section 101. Definitions. . 4 4 9 a 0 a 0 0 0 a 4 o a a a a a a a a 0 a a a 4 5 a 4 0 0 0 0 a a a a a W a 6 A 0 a 9 0 5 6 a 4 Section ion 102Rules of Construct . ..........................................................................17 ARTICLE II ENTITLEMENT SHARE; CONTRACT EFFECTIVE DATE, TERM AND TERMINATION; PARTICIPANT WITHDRAWAL.................................................................18 Section 201. Effective Date......................................................................................18 Section 202. Contract Term......................................................................................18 Section 203. Contract Termination...........................................................................19 Section 204. Participant Withdrawal........................................................................19 ARTICLE III ENTITLEMENT SHARE............................................................................................21 Section 301. Entitlement Share.................................................................................21 Section 302. Participant Surplus; Lay -Off Power Sales Agreements .......................22 Section 303. Assignment of Entitlement Share to Other Participants ......................22 Section 304. Ass bonment of Entitlement Share to Non -Participants ........................23 ARTICLE IV PROJECT MANAGEMENT COMMITTEE....................................................................24 Section 401. Confirmation of Project Management Committee...............................24 Section 402. Procedures and Voting Rights.............................................................25 Section 403.. Duties of Project Management Committee.........................................25 ARTICLE V DEVELOPMENT, ACQUISITION AND CONSTRUCTION OF THE PROJECT ...................27 Section 501. The Initial Facilities.............................................................................27 Section 502. Licensing Period and Development Work...........................................27 Section 503. Excess Power Sales Agreements, Joint Ownership Agreements and Adjustments to Entitlement Shares......................................................28 Section 504. Suspension or Termination of the Project During the Licensing Period ..............................................................................................................29 Section 505. Completion of Development................................................................30 Section 506. Construction Period.............................................................................32 Section 507. Additional Facilities..........................................................................06033 Section 508. Separate Phases of the Project.............................................................33 ARTICLE VI FINANCING OF THE PROJECT.................................................................................634 Section 601. Budget and Plan of Finance.................................................................34 Section 602. Financing of the Project.......................................................................36 Section 603. Capital Contributions; Calculation of Capital Contribution Percentage, Debt Service Percentage and Debt Service Share................................37 Section 604. DOE -Guaranteed Loan; Special Purpose Entity. Section 605. Tax Credits; Tax Credit Agreements...................................................40 Section 606. Special Obligations..............................................................................40 Section 607. Additional Bonds and Refunding Bonds.............................................41 Section 608. Pledge of Payments..............................................................................41 ARTICLE VII PROJECT OPERATIONS AND DELIVERY OF OUTPUT...............................................41 Section 701. Operation and Maintenance and Management of the Project..............41 Section 702. Scheduling of Electric Energy; Coordination with UAMPS Pool .......42 Section 703. Point of Delivery; Transmission Contracts..........................................43 Section704. Risk of Loss. d a 0 4 4 4 a & a a 1 9 0 a a a a 0 a 0 a 9 a a a a 0 a 4 0 a a 6 a a a 0 a am a b a 0 6 a a a 0 0 a a a a 6 0 a 0 a a 0 a a a 6 6 0 0 a a a a 5 0 a a 6 4 a 6 a a a a 6 0 0 043 Section 705. Interruption or Reduction of Deliveries...............................................44 Section 706. Availability of Electric Energy............................................................44 Section 707. Environmental Attributes ..................................................................... Section 708. Reserve and Contingency Fund........................................................00945 Section709. Insurance..............................................................................................45 Section 710. Damage, Destruction or Condemnations......... so &Assess 045 Section 711. Decommissioning................................................................................45 Section 712. Disposition or Termination of the Project...........................................46 ARTICLE VIII BUDGET, BILLING AND PAYMENT.........................................................................46 Section 801. Annual Budget; Accounting................................................................46 Section 802. Records and Accounting............................:.........................................47 Section803. Billing Periods.....................................................................................47 Section804. Billings.................................................................................................48 Section 805. Participant's Payment Obligations.......................................................49 Section 806. Disputed Billings.................................................................................50 Section 807. Audit Rights.........................................................................................50 Section 901. Representations and Warranties..........................................................951 Section 902. Information to Be Made Available......................................................52 Section 903. Covenants and Agreements of the Participant...................................6053 ARTICLE X DEFAULT AND REMEDIES......................................................................................55 Section 1001. Default by Participant..........................................................................55 Section 1002. Continuing Obligation of Participant; Right of UAMPS to Discontinue Service.................................................................................................. 5 5 Section 1003. Transfer of Entitlement Share Following Default; Other Actions by Section 1004. Other Default by Participant................................................................60 Section 1005. Default by UAMPS; Dispute Resolution. . a 0 0 0 a 6 a 9 V 0 0 a 0 0 0 a a a G a b R 9 4 a 0 9 a 0 0 V 0 a a a a 0 a 6 0 a a 060 Section 1006. Abandonment of Remedy...... 60946409444t 0*0414 906096409%mma 60U Section 1007. Waiver of Default................................................................................60 ARTICLE XI GENERAL PROVISIONS...........................................................................................60 Section 1101. Relationship to and Compliance with Other Instruments ....................60 Section 1102. Liability of Parties...............................................................................461 Section1103. Assignment..........................................................................................61 Section 1104. Amendments........................................................................................62 Section 1105. Notices and Computation of Time.......................................................63 Section 1106. Relationship of UAMPS and the Participant; Relationship Among Parti cip ants........................................................................................... 6 3 Section 1107. No Recourse Against Officers, Etc. of UAMPS or Participant ...........63 Section 1108. Contract Beneficiaries..........................................................................64 Section 1109. Governing Law; Jurisdiction and Venue.............................................64 Section 1110. Severability; No Merger......................................................................64 SCHEDULE I Schedule of Participants, Entitlement Shares, Capital Contribution Percentages, Debt Service Percentages and Debt Service Shares EXHIBIT I Description of the Initial Facilities ExHiBIT II Form of Participant's Annual Information Report EXHIBIT III Form of Participant's Certificate EXHIBIT IV Form of Participant's Bring -Down Certificate EXHIBIT V Form of Opinion of Counsel to the Participant EXHIBIT VI Form of Bring -Down Opinion of Counsel to the Participant EXHIBIT VII Form of Notice of Withdrawal E)iiBIT VIII Form of Notice of Reduction CARBON FREE POWER PROJECT POWER SALES CONTRACT This CARBON FREE POWER PROJECT POWER SALES CONTRACT made and entered into as of April 1, ZU185 is by and between UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS, a pocal subdivision of the State of Utah ("UAMPS") and Truckee Donner Public Utility District, a public utility district organized under the laws of the State of California (the "Participant" ). RECITALS: WHEREAS, UAMPS was organized by the Members under the Act and the Joint Action Agreement as a separate legal entity to accomplish the Members' joint and cooperative action, including securing power supply and transmission resources for the Members' present and future needs; WHEREAS, UAMP5 is organized as an energy services interlocal entity under the Act with the power, among other things, to (i) acquire supplies of electric power and energy by the acquisition or construction of electric generation and transmission facilities or by contracting for the purchase of electric power and energy and (ii) enter into contracts for the sale of the output, services and other benefits provided by such facilities or contracts to public agencies and others inside or outside the State of Utah; WHEREAS, in order to develop along -term source of reliable, cost-effective electricity with low or zero -carbon emissions for the benefit of its participating Members and other purchasers, UAMPS has examined and is continuing to examine the feasibility of an electric generating project to be known as the "Carbon Free Power Project," a small modular reactor generating facility to be located at the site determined under the Site Use Permit; WHEREAS, UAMPS will continue with its examination of the feasibility and development of the Project and, if the Project Management Committee determines the Project to be feasible, UAMPS will proceed to acquire, construct, operate, retire and decommission the Project and sell Electric Energy from the Project to the Participant pursuant to this Contract and to the other Participants pursuant to other Power Sales Contracts substantially similar to this Contract; WHEREAS, in order to finance the Cost of Acquisition and Construction, UAMPS will issue Bonds that are special and limited obligations of UAMPS, payable solely from a pledge of the revenues derived by UAMPS from the payments to be made by the Participants under the Power Sales Contracts and other amounts pledged pursuant to the Financing Documents; WHEREAS, the Participant desires to enter into this Contract in order to participate in the development of the Project and to obtain along -term, cost -based supply of carbon -free Electric Power, Electric Energy and any associated Environmental Attributes by the acquisition of an Entitlement Share pursuant to the terms and conditions of this Contract; and * Capitalized terms used and not defined in the recitals have the meanings assigned to them in Section I. WHEREAS, UAMPS and the Participant are duly authorized under applicable provisions of law, to execute, deliver and perform this Contract and their respective governing bodies have taken all necessary actions and all Required Approvals have been obtained in order to constitute this Contract as the legal, valid and binding obligation of the parties. Now, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, it is agreed by and between the parties to this Contract as follows: ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 101. Definitions. As used in this Contract and in the recitals set out above: "Act" means the Interlocal Cooperation Act, Title 11, Chapter 13, Utah Code Annotated 1953, as amended, and other applicable provisions of law. "Additional Bonds" means additional Bonds fiom time to time issued by UAMP5 pursuant to the Financing Documents and in accordance with Section 607. "Additional Facilities" means capital additions, betterments and replacements and other capital facilities directly and functionally related to the Project, whether located at the Project site or another site, all as approved by the Project Management Committee. Additional generating units that are not undertaken as Additional Facilities may be undertaken as a separate phase or phases of the Project as provided in Section 508. "Annual Budget" means the budget adopted by DAMPS for each Contract Year pursuant to the provisions of Section 801. "Authorized Officer of DAMPS" means the Chairman or Vice -Chairman of the Board, or thUP Secretary, Treasurer, General Manager, or other officer or employee of DAMPS authorized or having delegated authority to perform specific acts or duties under the Power Sales Contracts by resolution duly adopted by the Board. "Billing Period" means such period of time as shall be established fiom time to time by DAMPS for the preparation, calculation and billing of the amounts payable by the Participant hereunder. "Board" means the Board of Directors of DAMPS or such other governing body of DAMPS as maybe established from time to time pursuant to the Joint Action Agreement and the Act. All actions or determinations by the Board with respect to the Project shall be taken or made upon the recommendation of the Project Management Committee as and to the extent provided in the Joint Action Agreement. -2- "Bond Counsel" means a firm of attorneys of recognized standing in matters relating to the tax status of municipal bonds, experienced in matters relating to public power systems and selected by UAMPS. "Bond Fund" means, collectively, the funds and accounts created by the Financing Documents for the payment of and reserves for debt service on Bonds. "Bonds" means (i) bonds, notes, commercial paper, repayment obligations under Loan agreements and lines of credit, and other debt obligations issued or incurred from time to time by DAMPS pursuant to the Financing Documents to finance the Cost of Acquisition and Construction, regardless of whether such bonds, notes and other obligations are senior or subordinated obligations, (ii) the repayment obligations of UAMPS or a Special Purpose Entity under any DOE -Guaranteed Loan, and (iii) Additional Bonds and Refunding Bonds. "Budget and Plan of Fina�zce "means the comprehensive budget and plan of finance for the Development Costs, the Construction Costs and other items of the Cost of Acquisition and Construction approved from time to time by the Project Management Committee, together with proposed financing arrangements for Development Costs during the Licensing Period and Construction Costs during the Construction Period, all as more fully described in Section 601. "Capital Contribution " means (i) a capital contribution in respect of the Development Costs of, or the Cost of Acquisition and Construction of, the Initial Facilities that is paid to UAMPS by the Participant pursuant to Section 603 and (ii) a capital contribution paid to UAMPS in connection with the issuance of Additional Bonds or Refunding Bonds as authorized by the Project Management Committee pursuant to Section 603(g). "Capital Cont�°ibution Percentage " means with respect to each series of Bonds, a percentage calculated by UAMPS obtained by dividing (i) the dollar amount of the Capital Contribution made by the Participant, by (ii) the Reference Project Costs, all as more fully provided in Section 603. "Code" means the Internal Revenue Code of 1986, as amended. References herein to the Code include all corresponding and applicable U.S. Treasury Regulations. "Commercial Opefqation" means, with respect to the Initial Facilities, the date on which the Inal Facies (i) have been substantially completed pursuant to the EPC Contract and any other Construction Agreements, including the satisfaction of all required performance tests thereunder, (ii) are capable of continuous firm operation, (iii) are interconnected and synchronized with, and capable of delivering Electric Energy to, the transmission grid, (iv) have received all Permits and Approvals required for their operation, and (v) meet such additional requirements as may be established by the Project Management Committee; provided that the Project Management Committee may make Commercial Operation determinations with respect to individual generating units as provided in Section 301(f). The criteria and standards for the Commercial Operation of any Additional Facilities shall be developed by UAMPS and submitted to the Project Management Committee for its review and approval. -3- "Commercial Operation Date " means, with respect to the Initial Facilities and any Additional Facilities, the date on which all of the Initial Facilities and any Additional Facilities achieve Commercial Operation, as determined by the Project Management Committee. "Commercially Reasonable" or "Commercially Reasonable Efforts" means, wish respect to any action required to be made, attempted or taken by a party under this Contract or one of the Project Agreements, such efforts as a reasonably prudent business would undertake, consistent with Prudent Utility Practice and the past practices of such party, for the protection of its own interest under the conditions affecting such action, including the amount of notice of the need to take such action, the duration and type of the action, the competitive environment in which such action occurs, the terms and provisions of the Project Agreements and the Financing Documents, the contractual and legal obligations of, and the risk to, such party in connection with such action; provided, however, an obligation to act in a "Commercially Reasonable" manner or to exercise "Commercially Reasonable Efforts" does not include taking actions that would, individually or in the aggregate, cause the party subject to such obligation to incur costs, or suffer any other detriment, that is out of reasonable proportion to the benefits to the other party under this Contract or the Project Agreements. "Completion of Development" means, with respect to the Initial Facilities (i) the completion of all Development Work, (ii) the receipt of the COL and all other Permits and Approvals necessary for the construction and operation of the Project, (iii) the completion of definitive forms of the principal Construction Agreements for the Initial Facilities, (iv) the completion of the definitive Budget and Plan of Finance for the Cost of Acquisition and Construction of the Initial Facilities, and (v) a determination by the Project Management Committee that the Project is feasible and that the construction of the Initial Facilities should proceed, all as more fully described in Section 505. "Construction Agreement" means the EPC Contract and each other contract or agreement providing for the acquisition or construction of any part of the Initial Facilities and any Additional Facilities, including all design, engineering, procurement and construction agreements. "Construction and Operating License " or "COL " means a combined construction and operating license issued with respect to the Project by the NRC. "Construction and Operating License Application" or "COLA" means the application for the COL submitted to the NRC by or on behalf of UAMPS. "Construction Costs" means all of the Cost of Acquisition and Construction of the Initial Facilities incurred during the Construction Period. "Construction Period" means the period beginning on the date that the Project Management Committee determines that the Completion of Development has occurred and ending on the Commercial Operation Date. -4- "Contract" means this Carbon Free Power Project Power Sales Contract dated as of April 1, 2018, between UAMPS and the Participant and any amendments permitted pursuant to Section 1104. "Contract Resolution" means the resolution of the Participant's governing body approving and authorizing the execution of this Contract and approving the initial Budget and Plan of Finance, in substantially the form attached to EXHIBIT III. "Conti act Year" means the Fiscal Year, except that the first Contract Year shall begin on the Effective Date and shall end on the last day of the then -current Fiscal Year. In the event that DAMPS changes its Fiscal Year for accounting purposes, the Contract Year shall, without farther action, be amended to conform to such Fiscal Year. "Cont�•actof•"means, collectively, NuScale and Fluor Enterprises. "Cost of Acquisition and Const�•uction "means all costs and expenses paid or incuurred by UAMPS in connection with the acquisition and construction of the Initial Facilities and any Additional Facilities, whether paid or incurred prior or subsequent to the Effective Date, including all Development Costs incurred by DAMPS. "Cost of Acquisition and Construction" includes all costs incurred by UAMPS in connection with the planning, designing, acquisition, construction and placing in operation the Initial Facilities, any Additional Facilities and amounts paid or payable under the Construction Agreements. As and to the extent properly allocable to the Project at any time, but without duplication of any item, "Cost of Acquisition and Construction" also includes: (i) payments to DAMPS or any Participant to reimburse advances and payments made or incurred for costs preliminary or incidental to the development, acquisition or construction of the Initial Facilities or any Additional Facilities; (ii) planning and development costs; engineering and contactors' fees; fiduciaries', auditors' and accountants' fees; costs of obtaining all Permits and Approvals; the cost of real property, labor, materials, equipment, supplies, training and testing costs; insurance premiums and other costs of insuring the Project; legal, financial advisory, fmancing and Bond issuance costs; amounts payable under the Project Agreements during or in connection with the acquisition or construction of the Initial Facilities or any Additional Facilities; administrative and general costs; costs relating to the interconnection of the Project; and all other costs properly allocable -to the acquisition or construction of the Initial Facilities or any Additional Facilities or placing the same in operation; interest on Bonds for such period as may be reasonably necessary for placing the Initial Facilities or any Additional Facilities in operation in accordance with the provisions of the Financing Documents; (iv) the payment of principal or redemption price of and interest on any Bonds issued as bond anticipation notes; -5- (v) working capital and reserve requirements of the Pr oj ect, including amounts for deposit into the Reserve and Contingency Fund, and reserves for Operation and Maintenance Costs and Decommissioning Costs, in each case as may be required by the Financing Documents or otherwise approved by the Project Management Committee; (vi) deposits into the Bond Fund and any other fund or account required to be funded by the Financing Documents; (vii) all costs relating to litigation, claims or judgments not otherwise covered by insurance and arising out of the acquisition, construction or operation of the Project or otherwise related to the Project, the Project Agreements, the Power Sales Contracts or the transactions contemplated thereby; (viii) federal, state and local taxes or payments in lieu of such taxes relating to the Project and incurred during the period of the acquisition or construction thereof; and (ix) all other costs incurred by UAMPS, and properly allocable to the acquisition and construction of the Project, including all costs financed by the issuance of Additional Bonds. "Debt Sewice Costs" means, for each Billing Period of each Contract Year, an amount calculated or estimated in accordance with the Financing Documents equal to the sum of. (i) the interest accruing on Bonds, except to the extent that amounts are on deposit under the Financing Documents to pay such interest, together with any other amounts required by the Financing Documents to be deposited into the Bond Fund in respect of the interest payments on the Bonds; (ii) the portion of the next due principal installment accruing on Bonds, together with any other amounts required by the Financing Documents to be deposited into the Bond Fund in respect of the principal payments on the Bonds; provided, however, that the amount included in Debt Service Costs pursuant to this clause (ii) shall not include the principal of Bonds becoming due and payable solely as a result of the acceleration of the maturity thereof, the amounts payable during such Billing Period under any Interest Rate Contract, including amounts payable as a result of the termination of an Interest Rate Contract; (iv) any amounts required by the Financing Documents to be deposited into the Bond Fund to meet or replenish debt service reserve requirements for Bonds; (v) Trustee, paying agent, escrow agent and other fiduciaries' fees and expenses payable under the Financing Documents; fees and expenses of remarketing agents, broker - dealers, auction agents and others providing services with respect to Bonds; and -6- (vi) the amounts required to be paid to maintain any credit or liquidity facilities for and ratings on the Bonds, including maintenance fees and other amounts payable under any DOE -Guaranteed Loan and other costs payable by UAMPS from time to time in connection with the Bonds; provided, however, that the additional interest expense on or in respect of any Bonds that are subject to federal income taxation (and not eligible for tax credits or interest subsidy payments) may, as determined by the Project Management Committee pursuant to Section 602(d), be allocated to those Participants whose legal status or use of the Project Capability or the Project Output adversely affects the Tax Status of such Bonds. In the event of such allocation, the Debt Service Costs payable by such Participants shall be increased to include amounts sufficient to pay any such additional interest expense. "Debt Service Percentage "means, with respect to each Participant and as of any date of determination, the percentage obtained by subtracting the Participant's Capital Contribution Percentage fiom the Participant's Entitlement Share. The Participant's initial Debt Service Percentage is set forth on SCHEDULE I. The Debt Service Percentages for the Participants may be calculated separately for each separate series of Bonds. "Debt Service Share " means, with respect to each Participant and as of any date of determination, the percentage of Debt Service Costs payable by the Participant, determined by dividing the Participant's Debt Service Percentage (expressed as a decimal) by the sum (expressed as a decimal) of the Debt Service Percentages of all Participants, including the Participant whose Debt Service Share is being determined. The Participant's ini Dtial Debt Service Share is set forth on SCHEDULE I. The Debt Service Shares for the Participants may be calculated separately for each separate series of Bonds. "Decommission"rneans all actions necessary to safely retire and remove the Project from service, restore the Project Site and comply with the requirements of the Site Use Permit, satisl the decommissioning requirements of the Permits and Approvals and satisfy all regulatory requirements of the NRC and other regulatory agencies having jurisdiction over the decommissioning of the Project. "Decommissioning Costs" means the costs and expenses of Decommissioning the Project. "Decommissioning Fund" means the fund or funds established by UAMPS for the payment of Decommissioning Costs as provided in Section 711. "Decommissioning Period" means the period beginning at the end of the Operating Period and continuing to the date on which the Project has been Decommissioned and all Decommissioning Costs have been paid. "Development Agreement" means the Development Agreement to be entered into by UAMPS and the Contractor which shall, among other things, provide for: -7- (i) the provision by the Contractor of estimating, design and engineering services with respect to the Initial Facilities to the point in time when the EPC Contract is fmalized and executed pursuant to task orders mutually agreed to by UAMPS and the Contractor; (H) the performance of an economic competitiveness test at certain milestones with respect to the projected levelized cost of energy from the Initial Facilities; (iii) the ability of each of DAMPS and the Contractor to terminate the Development Agreement upon certain circumstances set forth therein, including the ability of UAMPS to terminate the Development Agreement upon a failure of the economic competitiveness test; (iv) the obligation of the Contractor to reimburse some or all of the Development Costs incurred by UAMPS in the event that (A) UAMPS elects to terminate the Project upon a failure of the economic competitiveness test or for cause or (B) the Contractor elects to terminate the Development Agreement for its convenience, such reimbursement being in the amounts and paid at the times provided for in the Development Agreement; and (v) upon a termination of the Development Agreement by DAMPS upon a failure of the economic competitiveness test or for its convenience, the right of the Contractor to acquire the Development Work and all assets comprising the Project from DAMPS and to develop a small modular reactor project at the Project site for the consideration set forth in the Development Agreement. "Development Cost Share "means, with respect to each Participant and as of any date of determination, the percentage of Development Costs payable by the Participant during the Licensing Period, determined by dividing the Participant's Entitlement Share (expressed as a decimal) by the sum (expressed as a decimal) of the Entitlement Shares of all Participants, including the Participant whose Development Cost Share is being determined. The Participant's initial Development Cost Share is set forth on SCHEDULE I, and shall be adjusted from time to time to account for (i) increases or reductions in the Participant's Entitlement Share elected by the Participant, (ii) increases or reductions in the Entitlement Shares of, and as elected by, other Participants, (iii) withdrawals by other Participants pursuant to Section 204 of the Power Sales Contracts, (iv) the Entitlement Shares of power purchasers that execute Power Sales Contracts and become Participants after the Effective Date of this Contract, and (v) transfers of Entitlement Shares pursuant to Section 1003. "Development Costs" means all costs, fees and expenses incurred by DAMPS in performing the Development Work, including (i) costs, fees and expenses previously incurred by UAMPS pursuant to the Study Phase Siting Agreement, (ii) the amounts payable to the Contractor under the Development Agreement (other than amounts financed with the proceeds of Special Obligations), and (iii) pre -construction costs approved by the Project Management Committee, including deposits, advance payments and prepayments for items of the Cost of Acquisition and Construction of the Initial Facilities. -8- "Development Work" means the development work and services described in Section 502. "DOE Cost Share Agreement" means, collectively, (i) the Assistance Agreement, Award No. DE-NE0008369, effective August 11, 2015, from the U.S. Department of Energy, Office of Nuclear Energy to NuScale, (ii) the Subaward Agreement dated December 21, 2015 between UAMPS and NuScale, and (iii) the Agreement for a Cost Sharing Option associated with the Siting and Licensing of a Small Modular Reactor dated December 21, 2015 between UAMPS and NuScale. "DOE -Guaranteed Loan " means, collectively, (i) any loan made to or for the benefit of DAMPS to finance some or all of the Cost of Acquisition and Construction the repayment of which is guaranteed by the U.S. Department of Energy pursuant to Title XVII of the Energy Policy Act of 2005, and (ii) the guaranty, the security agreements and other instruments relating to the DOE - Guaranteed Loan. "Effective Date "means the date on which (i) this Contract has been executed and delivered to UAMPS by the Participant, (ii) all Required Approvals have been obtained, and (iii) this Contract has been executed by UAMPS (A) upon the declaration of the Effective Date by the Project Management Committee as provided in Section 201 or (B) in the event this Contract is executed by the Participant subsequent to such declaration, upon the approval of this Contract by the Project Management Committee. "Electric Powe3• "means electric power expressed in kilowatts (kW). "Elect<ic Energy" means electric energy expressed in kilowatt-hours (kWh). "Entitlement Share " means the Participant's entitlement (expressed as a percentage) to a portion of Project Capability and any Environmental Attributes as set forth on SCHEDULE I. as the same may be -increased or reduced pursuant to Section 301 or increased pursuant to Section 1003. "Environmental Attributes" means all environmental and carbon free energy allowances, benefits, certificates, credits, offsets or reductions resulting from the generation of renewable or carbon free energy and the resulting displacement of conventional energy generation. Environmental Attributes include avoided emissions of carbon dioxide, methane, sulfur oxides, nitrogen oxides, carbon monoxide, particulate matter or any other gas recognized as a greenhouse ,as or gas, solid or liquid recognized as a source of air, water or soil pollution. Units of Environmental Attributes shall be allocated to the Participants under standards and procedures approved by the Project Management Committee or otherwise utilized as provided in Section 707. "EPC Contract" means the contract or agreement between DAMPS and the Contractor with respect to the engineering, procurement and construction of the Initial Facilities. "Excess Power Sales Agreement" means a power sales agreement between DAMPS and a power purchaser for the sale of Project Capability that has not been sold to the Participants under the Power Sales Contracts. The power purchaser under an Excess Power Sales Agreement shall not be considered to be a Participant for any purpose under the Power Sales Contracts. -9- "Financing Documents" means (i) the bond resolution, indenture, trust agreement or other instrument or instruments providing for the issuance of and the security for Bonds and all amendments thereof and supplements thereto, and (ii) the loan agreement, guaranty agreement, security agreement, and other instruments relating to any DOE -Guaranteed Loan. cal Year" means the annual accounting period of DAMPS as from time to time in effect, initially a period commencing on April 1, of each calendar year and ending on March 31 of the next succeeding calendar year. "Fluor Enterprises" means Fluor Enterprises, Inc., awholly-owned subsidiary of Fluor Corporation, and its permitted successors and assigns. "Fuel Supply Agreement" means each contract for the acquisition, processing, design, fabrication, transportation, delivery, reprocessing, storage and disposal of nuclear material required as fuel for the operation of the Project, including any prepayment and hedging transactions relating to such fuel. "Initial Facilities" means the complete modular reactor generating station, generating units, transmission facilities, fuel and water handling and storage facilities and related facilities comprising the initial Project, together with all real and personal property, facilities, structures, improvements and equipment to be acquired and constructed in connection therewith, all as approved by the Project Management Committee. A description of the Initial Facilities shall be attached as ExHiBIT I to this Contract. "bzterconnection Agreement" means each agreement providing for the interconnection of the Project with the facilities of a transmission provider and all supplements and amendments thereto, together with any successor or replacement agreement providing for the interconnection of the Project with the transmission grid. "Interest Rate Contract" means an International Swap Dealers Association, Inc. (ISDA) Master Agreement, together with the schedules and confirmations thereto, or any comparable agreement entered into by UAMPS with respect to Bonds pursuant to the provisions of the State Money Management Act, Title 51, Chapter 7, Utah Code Annotated 1953, as amended. "JointAction Agreement" means the Utah Associated Municipal Power Systems Amended and Restated Agreement for Joint and Cooperative Action dated March 20, 2009, as amended and supplemented from time to time. "Joint Ownership Agreement" means (i) an agreement under which DAMPS and another entity own the Project or a portion thereof as tenants in common, (ii) agreements between DAMPS and another person or persons for the organization and operation of a Special Purpose Entity, and (iii) any other form of joint ownership arrangement approved by the Project Management Committee. "Lay -Off Power Sales Agreement" means a power sales agreement between DAMPS and a power purchaser for the sale of Proj ect Capability that has been sold to one or more Participants -10- under the Power Sales Contracts. The power purchaser under a Lay -Off Power Sales Agreement shall not be considered to be a Participant for any purpose under the Power Sales Contracts. "Licensing Period" means the period beginning on the Effective Date and ending on the date that the Project Management Committee determines that the Completion of Development has occurred, all as more fully described in Section 502. "Members" means, collectively, the parties to the Joint Action Agreement. "Month" means a calendar month. "Notice of Reduction" means a notice delivered to DAMPS by the Participant of its election to reduce its Entitlement Share as provided in Section 301(d), such notice to be in the form attached hereto as EXHIBIT VIII. "Notice of YVithdrawal" means a notice delivered to DAMPS by the Participant of its election to withdraw from the Project as provided in Section 204(a), such notice to be in the form attached hereto as EXHIBIT VII. "NPM Prepayment Agreement" means an agreement under which DAMPS makes a prepayment or an advance payment for the cost of acquisition of one or more of the nuclear power modules to be included in the Project. "NRC"means the U.S. Nuclear Regulatory Commission and any successor federal agency having regulatory jurisdiction over the construction and operation of the Project. "NuScale"means NuScale Power, LLC and its permitted successors and assigns. "©perating Agreement" means any di "Operating Period" means the period beginning on the Commercial Operation Date and continuing to the date on which the Project is retired and removed from service. "Operation and Maintenance Costs" means, with respect to each Billing Period, all costs and expenses (other than Transmission Costs and Debt Service Costs) attributable to the Project that are paid, payable, incurred or accrued by UAMPS during each Billing Period resulting from the ownership, operation, maintenance, Decommissioning and termination of, and repairs, renewals, replacements, additions, improvements, and betterments and modifications to, the Project, including amounts payable by UAMPS under the Project Agreements. Without limiting the generality of the foregoing (it being the intention and understanding of DAMPS and the Participants that "Operation and Maintenance Costs" shall include all of DAMPS costs with respect to the Project other than Transmission Costs, Debt Service Costs and the Cost of Acquisition and Construction financed with Bond proceeds), but without duplication of any item of cost, Operation and Maintenance Costs include: -11- (i) the costs of operating and maintaining the Initial Facilities and any Additional Facilities and of producing and delivering Electric Power and Electric Energy to the Point of Delivery during such Billing Period, including the operation and maintenance expenses of the Project and fees, expenses, incentives and other amounts payable under the Operating Agreement and the other Project Agreements and relating to the operation and maintenance of the Project; (ii) any amount which DAMPS may be required during such Billing Period to pay for the prevention or correction of any unusual loss or damage or for renewals, replacements, repairs, additions, improvements, modifications and betterments which arise out of or are required by the Project Agreements for which UAMPS shall be obligated, and amounts necessary to fund or replenish reserves therefor, but only to the extent not funded by Bonds or Capital Contributions; (iii) legally required federal, state and local taxes, including gross receipts taxes and ad valorem taxes or payments in lieu of ad valorem taxes, in each case related to the Proj ect; (iv) the Cost of Acquisition and Construction of Additional Facilities, but only to the extent (A) not paid or financed with Bond proceeds and (B) approved to be paid by the Project Management Committee as an item of Operation and Maintenance Costs; (v) Decommissioning Costs and amounts for deposit into the Decommissioning Fund; (vi) the portion of DAMPS' administrative and general expenses allocable or directly charged to the Project, working capital and reserves for the payment of operation and maintenance expenses, and all other costs and expenses (but excluding depreciation) not included in the costs specified in the other items of this definition and properly chargeable to the Project; (vii) amounts to be deposited into the Reserve and Contingency Fund established pursuant to Section 708; (viii) legal, engineering and accounting fees and expenses, the cost of any litigation related to the Project, the Project Agreements, the Power Sales Contracts and the interests and transactions contemplated by the Project Agreements and the Power Sales Contracts, and the costs of technical and advisory services, of all Permits and Approvals and of certifying, qualifying or registering Environmental Attributes associated with the Project, all to the extent allocable to the Project; (ix) the costs of insuring the Project, including all insurance required by the Permits and Approvals, and any defetred premiums payable pursuant to the Price - Anderson Nuclear Industries Indemnity Act, 42 U.S.C. §2210, and the NRC regulations thereunder; -12- (x) costs imposed upon the Project by a balancing authority, independent system operator, regional transmission organization or similar entity, costs of ancillary services and other operational costs necessary to comply with reliability and related requirements; and (xi) any other amount not specified in the other items of this definition which must be paid by UAMPS during such Billing Period under the Project Agreements or otherwise. "Participant" means the second party named in the preamble of this Contract and its permitted successors and assigns hereunder. "Participants" means the Participant and the other entities named on SCHEDULE I, as the same may be amended or supplemented from time to time as provided herein. "Participant's Representative" means (i) the officer, employee or other agent of the Participant designated from time to time by the Participant as the Representative of the Participant for purposes of the Joint Action Agreement, to whom all notices and other communications to be given by UAMPS to the Participant hereunder shall be sent or (ii) in the event that the individual appointed as the Participant's Representative is unavailable to act on behalf of the Participant, the individual duly appointed or designated by the Participant as its alternate Representative pursuant to the Joint Action Agreement. "Pei formance Tests "means all start-up and shalcedoum procedures and performance tests to be conducted under the Construction Contracts prior to the Commercial Operation Date. "Permits and Approvals" means Construction and Operating License and all other %certificates, permits, licenses, approvals, rulings, orders or other authorizations from any federal, state or local governmental body, board or agency having jurisdiction over UAMPS, the Project or both that are required to be obtained or maintained in connection with the acquisition, construction, operation, maintenance or repair of the Project or any component thereof. PermitteContrac" means (i) a contract wi "d I. th a term (including all renewal options) not longer than three years and (-U) requirements -type contracts, other than requirements contracts providing for electricity sales at wholesale, with retail consumers or other end users of electricity. "Point of delivery" means the point or points of physical interconnection of the Initial Facilities or Additional Facilities, as applicable, with the electric transmission grid, as determined pursuant to the Interconnection Agreement. "Pooling Agreement" means, collectively, the Power Pooling Agreements between DAMPS and the Members and certain other entities providing for the establishment and operation of the DAMPS Pool and related matters, including all supplements and appendices thereto. "Power Sales Contracts" means all of the Carbon Free Power Project Power Sales Contracts dated as of April 1, 2018, between DAMPS and the Participants (including this Contract -13- between UAMPS and the Participant), all of which are uniform in all material respects in their term, conditions and provisions, with the exception of the Entitlement Share, the Capital Contribution Percentage, the Debt Service Percentage and the Debt Service Share for each of the Participants and the other matters set forth in the Exhibits attached hereto. "Project" means the Carbon Free Power Project undertaken by DAMPS for the use and benefit of the Participants as provided in the Power Sales Contracts, consisting of the acquisition, construction, ownership, improvement, equipping, operation, and retirement and decommissioning of the Initial Facilities and any Additional Facilities, and the rights, interests, obligations and liabilities of UAMPS under the Project Agreements and the Permits and Approvals. "ProjectAgreements"means the Development Agreement, each Construction Agreement, Operating Agreement, Fuel Supply Agreement, Water Supply Agreement, Interconnection Agreement, Transmission Agreement and Right -of --Way, the DOE Cost Share Agreement, the Site Use Permit and all other agreements relating to the development, acquisition, construction, operation and Decommissioning of the Project. All references herein to the Project Agreements or any of them refer to the. Project Agreements as they may be amended or supplemented from time to time in accordance with their respective provisions and the provisions of Section 1101. "Project Capability" means the Electric Power and associated Electric Energy that the Initial Facilities, any Additional Facilities and, for purposes of Section 301(f), the individual generating units included in the Initial Facilities are capable of producing. The Project Capability available to UAMPS from (i) the Initial Facilities will be the aggregate nameplate rating of the generating units included in the Initial Facilities, and (ii) an individual generating unit will be the nameplate rating of such unit. "Project Management Committee " means the committee of the Participants previously established and confirmed in Section 401. All references in this Contract to decisions, approvals, determinations and other actions of the Project Management Committee include the approval of, or delegation of authority with respect to, such decision, approval, determination or action by the Board required by the Joint Action Agreement and the bylaws of DAMPS. "Project Output" means the amount of Electric Power and Electric Energy, if any, which is generated by the Project in any particular hour. "Prudent Utility Practice" means, as of any particular time, any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry which, in the exercise of reasonable judgment in light of facts known at such time, could have been expected to accomplish the desired results at the lowest reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others or to be limited to the lowest -cost practice, method or act, but rather to be a spectrum of possible practices, methods and acts, having due regard for manufacturers' warranties and the jurisdiction. -14- "Qualified Use means the sale of electricity to retail customers pursuant to (i) generally applicable and uniformly applied rate schedules or tariffs or (ii) a Permitted Contract; provided that Qualified Use shall not include any sale of electricity that gives rise to "private business use" or a "private loan" within the meaning of Section 141 of the Code; and provided further that "Qualified Use" shall include such additional uses of electricity as may be approved by UAMPS with a favorable opinion of Bond Counsel. "Rating Agency"has the meaning assigned to such term in the Indenture. "Reference Troject Costs" means, for purposes of calculating the amount of a Capital Contribution to be made by the Participant as provided in Section 603, (i) in the case of a Capital Contribution to be made with respect to Development Costs, the estimated Development Costs determined by UAMPS and approved by the Project Management Committee prior to the first issuance of Bonds to finance Development Costs, and (ii) in the case of a Capital Contribution to be made with respect to the Cost of Acquisition and Construction of the Initial Facilities or any Additional Facilities, the estimated Cost of Acquisition and Construction determined by UAMPS and approved by the Proj ect Management Committee prior to the first issuance of long-term Bonds to finance the Cost of Acquisition and Construction of the Initial Facilities or any Additional Facilities. Reference Proj ect Costs shall not include amounts for (iii) the costs of issuance of, debt service reserves for and capitalized interest on Bonds and (iv) any other items in the definitions of "Development Costs" or "Cost of Acquisition and Construction' not properly allocable to Reference Project Costs, as determined by the Project Management Committee. "Refunding Bo�zds"means refunding Bonds from time to time issued by DAMPS pursuant to the Financing Documents and in accordance with Section 607. "Requii•edApprovals"means all governmental, regulatory and lender approvals, consents and authorizations required or necessary for (i) the execution, delivery and performance of this Contract (or any amendment hereto) by the Participant and (ii) this Contract (or any amendment hereto) to be the legal, valid and binding obligation of the Participant; provided, however, that "Required Approvals" does not include the approval of this Contract by the Participant's governing board or body pursuant to the Contract Resolution. "Reserve and Contingency Fund" means the fund, if any, established pursuant to Section 708. "Right -of --Way" means each right -of --way, lease, grant or similar instrument for the use of the land necessary for the operation or interconnection of the Project. "Site Use Permit'.' means Use Permit No. DE-NE700065, effective February 17, 2016, from the United States of America, acting by and through the U.S. Department of Energy to DAMPS. "Special Obligations" means debt obligations issued or incurred from time to time by DAMPS pursuant to the Financing Documents (i) to finance Development Costs, the Cost of Acquisition and Construction or to refund or refinance Special Obligations, and (ii) which shall -15- not (a) constitute Bonds for any purpose under the Power Sales Contracts or the Financing Documents and (b) be secured by a pledge of or payable from the payments made by the Participants under the Power Sales Contracts, all as more fully described in Section 606. "Special Purpose Entity" means (i) a limited liability company, (n) a segment established by UAMPS pursuant to the Act, or (iii) any other special purpose legal entity organized to own all or a portion of the Project. "Study Phase Siting Agreement"means the Carbon Free Power Project Study Phase Siting Agreement dated September 1, 2015, between UAMPS and the participants named therein. "Super-Majorit)� Vote " means the affirmative vote of Participants' Representatives that represent 75% of (i) the number (per capita) of Participants' Representatives serving on the Project Management Committee, and (ii) the Entitlement Shares of all Participants. For the avoidance of doubt, in the event that a Super -Majority Vote is required when a Participant's Representative is not entitled to vote on matters before the Project Management Committee pursuant to Section 402(a)(i), such Participant's Representative and such Participant's Entitlement Share shall be disregarded in computing the percentages of Participants' Representatives and Entitlement Shares that have voted on the matter requiring a Super -Majority Vote. "System Point of Receipt" means (i) the points) of interconnection between the Participant's electric utility system and the transmission facilities of the applicable balancing authority or authorities, or (ii) such other point(s) for the receipt by the Participant of Electric Energy from the Project as may be agreed to by the parties. "Tax C�°edits" means any production tax credits, investment tax credits or other federal or state tax credits that may be received by DAMPS or credited to DAMPS pursuant to the Project Agreements. "Tax Cf•edit Agreement" means a contract or agreement under which DAMPS (i) sells, assigns or transfers Tax Credits to a third party or (ii) receives consideration from a third party in respect of Tax Credits. "Tax Status" means (i) the exclusion from gross income for federal income tax purposes of the interest on any Bonds issued as tax-exempt obligations, or (ii) the right of a bondowner (or other investor) to receive tax credits or the right of UAMPS to receive interest subsidy payments on any Bonds issued as tax credit bonds or interest subsidy bonds, respectively, in each case pursuant to the provisions of the Code. "Transmission Agreements" means each transmission contract, agreement or tariff entered into by DAMPS or the Participant that is used or necessary for the delivery of Electric Power and Electric Energy from the Point of Delivery to the Participant's System Point of Receipt, whether by direct transmission, displacement, exchange or otherwise. "Transmission Costs" means, for each Billing Period of each Contract Year, all capital, operating and other costs and expenses paid, payable, incurred or accrued by DAMPS during such -16- Billing Period for the transmission of Electric Energy from the Point of Delivery to the Participant's System Point of Receipt pursuant to the Transmission Agreements or otherwise. The Participant shall be responsible for the payment of Transmission Costs to UAMPS hereunder only to the extent that UAMPS has, at the request of the Participant, entered into or utilized Transmission Agreements for the transmission of Electric Energy from the Point of Delivery to the Participant's System Point of Receipt. "Trustee" means the bank or trust company acting as the trustee under the Financing Documents. "UAMPS" means the first party named in the preamble of this Contract. All references to UAMPS in this Contract shall include Authorized Officers of UAMPS acting pursuant to specific authorization by the Project Management Committee. "UAMPS Pool "means that certain electric power pool established pursuant to the Pooling Agreement under which UAMPS provides certain services with respect to the scheduling, dispatch and the sale of Electric Power and Electric Energy and other matters provided for in the Pooling Agreement. "Uncont�ollable Force "means any cause, event or force beyond the control of the parry affected, including, but not restricted to failure, or threat of failure of facilities, flood, earthquake, storm, fire, lightning, epidemic, war, terrorism, acts of a public enemy, riot, civil disturbance or disobedience, labor dispute, labor or material shortage, sabotage, and restraint by court or public authority and action or non -action by, or inability to obtain the necessary authorizations or approvals from, any governmental agency or authority, which by exercise of due diligence and foresight such party could not reasonably have been expected to avoid and which by exercise of due diligence it shall be unable to overcome. "Uncontrollable Force" includes any cause, event or force constituting "force majeure," "uncontrollable force" or similar term as defined in any Project Agreement. "Unifo�•m System of Accounts" means the Federal Energy Regulatory Commission Uniform Systems of Accounts Prescribed for Public Utilities and Licensees Subject to the Provisions of the Federal Power Act, 18 C.F.R. Part 101, as the same may be modified, amended or supplemented from time to time or such other system of accounting as may be applicable by law to UAMPS. "Water Supply Agreement" means each agreement providing for the purchase of water, water rights or shares or other interests in water necessary for the operation of the Project. Section 102. Rules of Construction. (a) References to Articles, Sections, Schedules and Exhibits are to the Articles and Sections of and Schedules and Exhibits to this Contract, unless otherwise provided. Article and Section headings are included herein for convenience of reference only and shall not constitute a part of this Contract for any other purpose or be given any substantive effect. Any of the defined terms may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. The use of the word "include" or its derivations shall not be construed as language of limitation. -17- (b) Any representation, warranty, certificate or legal opinion with respect to the enforceability of this Contract or any other contract or agreement made in or provided pursuant to this Contract shall be deemed to be qualified by reference to the effect of applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditor's rights generally and by the application of equitable principles, regardless of whether such qualification is expressly stated herein or therein. ARTICLE II CONTRACT EFFECTIVE DATES TERM AND TERMINATIONS PARTICIPANT WITHDRAWAL Section 201. Effective Date. (a) Promptly upon the approval of this Contract by its governing body's adoption of the Contract Resolution, the Participant shall (i) cause this Contract to be executed by its Authorized Officers, and (ii) deliver to UAMPS an executed counterpart of this Contract together with its completed certificate and the exhibits to it (in substantially the form attached hereto as EDIT III) and an opinion of counsel to the Participant in the form attached hereto as ExomIT V. (b) UAMPS shall give notice to the Project Management Committee upon its receipt of executed Power Sales Contracts and certificates and opinions from Participants that have requested Entitlement Shares totaling not less than 150,000 kW of Electric Power. Upon its receipt of such notice, the Project Management Committee may declare that the Effective Date of the Power Sales Contracts has occurred or may defer such declaration to a later date in its discretion. Upon the Project Management Committee's declaration of the Effective Date, UAMPS shall cause all such Power Sales Contracts to be executed by its authorized officers and shall give notice to the Participants that the Effective Date has occurred. Power Sales Contracts subsequently received by UAMPS shall become effective as provided in the definition of Effective Date. (c) UAMPS shall give notice to the Participant of the occurrence of the Effective Date and shall prepare and deliver to each Participant a completed SCHEDULE I that shows the Entitlement Shares of all Participants. The Study Phase Siting Agreement shall terminate on the Effective Date of the Power Sales Contracts, provided that (i) the Participants that are parties to the Study Phase Siting Agreement shall remain responsible for all costs, expenses and other amounts payable by them thereunder, and (ii) all costs previously incurred by UAMPS under the Study Phase Siting Agreement shall be included as an item of Development Costs. Section 202. Contract Term. This Contract shall become effective on and as of the Effective Date and will, unless this Contract is terminated pursuant to Section 203, continue in effect until the last to occur of: (i) the date on which all of the Project Agreements have terminated or expired in accordance with their respective terms and all obligations of UAMPS thereunder have been fully paid, satisfied or discharged; (ii) the date on which all Bonds have been paid in full as to principal, premium and interest, or sufficient funds shall have been irrevocably set aside for the full defeasance thereof and all other obligations of UAMPS under the Financing Documents have been paid or satisfied; and (iii) the date on which the Initial Facilities and any Additional Facilities shall be permanently removed from service and Decommissioned and all Decommissioning Costs shall have been paid or fully funded. -18- Section 203. Contract Termination. (a) This Contract shall not be terminated by either party under any circumstances, whether based upon the default of the other party under this Contract or any other instrument or otherwise, except as specifically provided in this Section. (b) The Project Management Committee may establish a date for the termination of the Power Sales Contracts upon its determination to terminate the Project at any time during the Licensing Period as provided in Section 504; provided, however, that any such termination date shall not occur until the later of: (i) the date on which all Project Agreements have been terminated or have expired in accordance with their respective terms, and all obligations of UAMPS thereunder have been fully paid, satisfied or discharged; (ii) the date on which all Bonds have been paid in full as to principal, premium and interest, or sufficient funds shall have been irrevocably set aside for the fall defeasance thereof and all other obligations of UAMPS under the Financing Documents have been paid or satisfied; and (iii) the date on which UAMPS shall have made a final accounting for, and shall have recovered from the Participants, all Development Costs previously incurred. Section 204. Participant Withdrawal (a) During the Licensing Period, the Participant shall have the right to withdraw from its participation in the Project as provided in this Section. The Participant may exercise its right to withdraw from the Project by delivering a Notice of Withdrawal to UAMPS upon the occurrence of any of the following events: (i) its receipt of notice from DAMPS pursuant to Section 601(e)(i) that the Project Management Committee has approved the updated Budget and Plan of Finance for the second phase of the Licensing Period; (ii) its receipt of notice from DAMPS pursuant to Section 601(f) that the Project Management Committee has approved an amendment to the Budget and Plan of Finance that increases the maximum amount of Development Costs that may be incurred for the then -current phase of the Licensing Period; (iii) its receipt of notice from DAMPS pursuant to Section 204(b) that withdrawals or Entitlement Share reductions elected by other Participants would result in an increase in its Development Cost Share; (iv) the determination of its governing body not to approve the definitive Budget and Plan of Finance at the end of the Licensing Period; or (v) its determination to withdraw from the Project at the end of the then -current phase of the Licensing Period. A withdrawal pursuant to clause (i), (iv) or (v) above shall be effective at and as of the last day of the then -current phase of the Licensing Period. A withdrawal pursuant to clause (ii) above shall be effective immediately prior to the effective date of an amendment to the Budget and Plan of Finance that increases the maximum amount of Development Costs. A withdrawal pursuant to clause (ill) above shall be effective immediately prior to the effective date of the increase in the Participants' Development Cost Shares. -19- (b) UAMPS shall give prompt notice to the Project Management Committee of its receipt of Notices of Withdrawal pursuant to paragraph (a) above and Notices of Reduction pursuant to Section 301(d). The Project Management Committee shall then determine the effect of such withdrawals or reductions on the development of the Project and whether to proceed with the development of the Project or to suspend or terminate the Project pursuant to Section 504(a). If the Project Management Committee determines to proceed with the Project and if such withdrawals or reductions would result in an increase in the Development Cost Share of any Participant, it shall direct UAMPS to give notice of such withdrawals and reductions and its determination to proceed with the Project to the Participants. Such notice shall include an updated SCHEDULE I reflecting all withdrawals and reductions elected by the Participants, and shall state that a Participant may elect to withdraw from the Project by delivering a Notice of Withdrawal to UAMPS or may elect to reduce its Entitlement Share by delivering a Notice of Reduction to UAMPS. A Participant may elect to withdraw from the Project by delivering a Notice of Withdrawal to UAMPS or may elect to reduce its Entitlement Shares by delivering a Notice of Reduction to UAMPS, in either case within such reasonable period of time as shall be approved by the Project Management Committee and specified in UAMPS' notice. (c) A Participant that elects to withdraw from the Project shall (i) except as provided in paragraph (d) below, waive any right to receive any reimbursement for Development Costs previously paid by it, and (ii) remain responsible for the payment of an amount equal to its Development Cost Share of all Development Costs incurred, including its Development Cost Share of the amounts necessary to repay all Bonds issued and outstanding, in each case up to the effective date of the Participant's withdrawal from the Project. (d) In the event that the Project is terminated during the Licensing Period and DAMPS receives third party reimbursement - for Development Costs paid prior to the date of termination (other than reimbursement received pursuant to the DOE Cost Share Agreement), UAMPS shall pay to each person that has withdrawn as a Participant its share, pro rata based on the amounts of Development Costs paid by all Participants and persons that have withdrawn as Participants, of the third -party reimbursement received by DAMPS, up to but not exceeding the amount of Development Costs paid by such person that has withdrawn as a Participant. (e) A Participant that elects to withdraw from the Project shall, within twelve months of the effective date of its withdrawal or within such longer period as may be permitted pursuant to the Financing Documents, repay the amounts described in paragraph (c)(ii) above together with any interest expense on such amounts and any other charges incurred by UAMPS under the Financing Documents. (f) From and after the effective date of its withdrawal (i) the Participant's Entitlement Share shall be terminated, (ii) the Participant's Representative shall have no right to participate in or vote at meetings of the Project Management Committee or meetings of the Board with respect to the Project, and (iii) this Contract will remain in effect only with respect to the Participant's repayment obligations described in paragraph (d) above. The Participant shall have no responsibility for the payment of Development Costs incurred or Bonds issued after the effective date of its withdrawal. -20- ARTICLE III ENTITLEMENT SHARE Section 301. Entitlement Share. (a) From and after the Effective Date, UAMPS shall sell to the Participant, and the Participant shall purchase from UAMPS, the Participant's Entitlement Share. (b) As of the Effective Date of its Power Sales Contract, a Participant's Entitlement Share (expressed as a percentage of all Entitlement Shares then in effect) shall not exceed 20 percent, unless otherwise approved by the Project Management Committee. (c) During the Licensing Period and for so long as less than all of the Project Capability has been sold pursuant to the Power Sales Contracts and any Excess Power Sales Agreements, the Participant may, by notice to UAMPS and upon the approval of the Project Management Committee, elect to increase its Entitlement Share by any amount, subject to (i) the limitation set forth in subsection (b) above, and (ii) such standards and procedures as may be established by the Project Management Committee. Any such increase in the Participant's Entitlement Share shall be effective at the beginning of the second phase of the Licensing Period or the Construction Period, as applicable. (d) At the times at which the Participant may deliver a Notice of Withdrawal to DAMPS pursuant to Section 204 and in lieu of delivering a Notice of Withdrawal, the Participant may elect to reduce its Entitlement Share by delivering a Notice of Reduction to UAMPS. Any Notice of Reduction shall be delivered at the same time and in the same manner as a Notice of Withdrawal. The effective date of an Entitlement Share reduction shall be the same as the corresponding effective date of a withdrawal pursuant to Section 203(a). (e) Upon a recommendation of UAIVirS pursuant to Section 503(d), and at any time up to the time of its determinations under Section 505(b), the Project Management Committee may determine to round the Participant's Entitlement Shares up or down so that the total Project Capability covered by all Entitlement Shares matches a whole number of the modular generating units included in the Project. The determination of the Project Management Committee shall be made in compliance with Section 503(d). Upon such determination of the Project Management Committee, UAMPS shall give notice to all Participants of the rounded Entitlement Shares. (f) In the event that the construction of the Initial Facilities provides for sequential Commercial Operation of individual generating units prior to the Commercial Operation Date of all of the Initial Facilities, the Project Management Committee may establish procedures and standards for (i) the Participants to make elections regarding the amounts of and dates on which they will receive Electric Power and Electric Energy from such generating units and (ii) the allocation of the costs and benefits of such generating units among the electing Participants. Such elections shall remain in effect until the Commercial Operation Date of all of the Initial Facilities. If the Project Management Committee determines not to establish such procedures and standards or if the Participant determines not to make an election under them, the Participant will purchase -21- and pay for its Entitlement Share (expressed as a percentage) of the Project Capability of each individual generating unit from and after the date that it achieves Commercial Operation. Section 302. Participant Surplus; Lay -Off Po-w�er Sales Agreements. (a) If the Participant has or projects that it will have, as of or following the Commercial Operation Date (or the date of Commercial Operation of individual generating units), Electric Power and Electric Energy that is surplus to its needs, it may request that UAMPS sell and deliver any or all of the Electric Power and Electric Energy attributable to the Participant's Entitlement Share pursuant to one or more Lay -Off Power Sales Agreements. (b) UAMPS shall use Commercially Reasonable Efforts in consultation with the Participant to attempt to sell such surplus at not less than a minimum price approved by the Participant: first, pro rata to any other Participants that indicate interest in purchasing any such surplus; second, pro rata, to any Members that are not Participants that indicate interest in purchasing any such surplus; and third, to any other power purchaser, on such terms and for such period as UAMPS determines to be appropriate and not adverse to the Tax Status of the Bonds or the interests of UAMPS or the other Participants. (c) If two or more Participants have made requests for surplus sales pursuant to this Section of the Power Sales Contracts, UAMPS (i) may aggregate the surplus amounts of Electric Power and Electric Energy for sale under one or more Lay -Off Power Sales Agreements, and (ii) shall allocate the credits for such sale pro r°ata to the requesting Participants. (d) UAMPS shall make recommendations to the Project Management Committee regarding (i) the terms and provisions of each Lay -Off Power Sales Agreement or a standard form of Lay -Off Power Sales Agreement, and (ii) the identity, operating experience and financial capability of each power purchaser under a Lay -Off Power Sales Agreement and its ability to meet its obligations thereunder, each of which shall be subject to the approval of the Project Management Committee. (e) The revenues (net of any expenses incurred by UAMPS in connection with the sale) received by UAMPS from sales pursuant to a Lay -Off Power Sales Agreement shall be credited to the Participant on its billing statements pursuant to Section 804, provided that the sale of surplus power and energy pursuant to a Lay -Off Power Sales Agreement shall not relieve such Participant from its primary obligation and liability under this Contract, unless and only to the extent that UAMPS shall receive payments from the purchaser under the Lay -Off Power Sales Agreement. Section 303. Assignment of Entitlement Share to Other Participants. (a) The Participant may assign this Contract and its rights hereunder, in whole or in part, to another Participant upon 60 day's prior notice to UAMPS and satisfaction of all of the following conditions: -22- (i) during the Licensing Period, UAMPS, by action of the Project Management Committee, consents in writing to such assignment, which consent shall not be unreasonably withheld; (ii) after the Licensing Period, UAMPS, by action of the Project Management Committee, (i) consents in writing to such assignment, which consent shall not be unreasonably withheld, and (H) reasonably determines that such assignment is not expected to result in any increase in the rates and charges payable by any other Participants under the Power Sales Contracts. (b) The Participant acknowledges and agrees that the ability of UAMPS to consent to such an assignment may be subject to additional requirements and limitations imposed under the Financing Documents. UAMPS and the Participant each agree to exercise Commercially Reasonable Efforts and to cooperate with one another to meet any such limitations and requirements. Section 304. Assig�zment of Entitlement Share to Non Pa�ticipants. (a) The Participant may assign this Contract and its rights hereunder, in whole or in respect of part of the Participant's Entitlement Share, to any power purchaser upon not less than 180 days' prior notice to UAMPS and satisfaction of each of the following conditions: (i) the Participant's notice to UAMPS shall include the name of any proposed assignee, the amount of the Participant's interests under this Contract proposed to be assigned, the consideration (if any) for the proposed assignment, and the material terms of the proposed assignment, including, copies of all written proposals, term sheets, letters of intent and assignment documents. (ii) UAMPS, by action of the Project Management Committee, consents in writing to such assignment, which consent shall not be unreasonably wit'held; (iii) the assignment shall be evidenced by a written instrument pursuant to which the assignee shall assume all obligations (except to the extent theretofore accrued) %J the Participant under this Contract or the Participant shall post an acceptable bond or other reasonably acceptable security to assure its obligations hereunder are fulfilled; (iv) if and to the extent necessary to reflect such assignment and assumption, UAMPS and such assignee shall enter into an agreement supplemental to this Contract to clarify the terms on which power and energy are to be sold hereunder by UAMPS to such assignee; (v) if the Entitlement Share to be assigned (expressed as percentage of all Entitlement Shares) equals or exceeds five percent, the senior debt of the assignee shall be rated in one of the four highest whole rating categories (without regard to gradations within such categories) by at least one nationally -recognized bond rating agency; -23- ARTICLE IX REPRESENTATIONS, WARRANTIES AND COVENANTS Section 901. Representations and Warranties. (a) The Participant represents and warrants to UAMPS as follows: (i) the Participant is a public utility district, duly created and validly existing under the laws of the State of California, and has all corporate power and authority necessary to enter into and perform its obligations under this Contract; (ii) this Contract has been duly authorized, executed and delivered by the Participant and constitutes its legal, valid and binding obligation enforceable in accordance i wth its terms; (iii) the execution, delivery and performance by the Participant of this Contract does not and will not (A) conflict with any constitutional, statutory or regulatory provision, judgment, decree or order applicable to the Participant and (B) constitute a breach of or a default under any bond ordinance, resolution or indenture or any contract or agreement to which the Participant is a party or to which any of the property, assets or revenues of its electric system is subject; (iv) all Required Approvals, if any, have been obtained; (v) to the Participant's knowledge, there is no pending or threatened action or proceeding affecting the Participant which purports to affect the authorization, legality, validity or enforceability of this Contract, the Joint Action Agreement or the Pooling Agreement; and (vi) prior to and in connection with its approval and execution of this Contract, the Participant conducted its own review of the descriptions, information and studies regarding the Project, the Project Agreement and this Contract provided by UAMPS and made an independent determination to enter into this Contract. (b) UAMPS represents and warrants to the Participant as follows: (i) UAMPS is a political subdivision of the State of Utah and an energy services interlocal entity, duly created and validly existing under the Act and the Joint Action Agreement; (ii) UAMPS has all corporate power and authority necessary to enter into and perform its obligations under this Contract; (Hi) This Contract has been duly approved by the Project Management Committee and the Board and has been duly authorized, executed and delivered by -51- DAMPS and constitutes its legal, valid and binding obligation enforceable in accordance with its terms; (iv) the execution, delivery and performance by UAMPS of this Contract does not and will not (A) conflict with any constitutional, statutory or regulatory provision, judgment, decree or order applicable to UAMPS and (B) constitute a breach of or a default under any bond ordinance, resolution or indenture or any contract or agreement to which UAMPS is a party or to which any of its property, assets or revenues is subject; (v) to DAMPS' knowledge, there is no pending or threatened action or proceeding affecting UAMPS which purports to affect the authorization, legality, validity or enforceability of this Contract, the Joint Action Agreement or the Pooling Agreement; and (vi) the descriptions, information and studies regarding the Project, the Project Agreement and this Contract provided to the Participant by UAMPS have been prepared in good faith based upon the facts and information known to UAMPS at the time, and DAMPS has no reason to believe that such descriptions, information and studies taken as a whole are incorrect or misleading in any material respect. Section 902. Information to Be Made Available. (a) DAMPS shall make available for examination by the Participant at reasonable times (subject to their availability to UAMPS under the applicable provisions of the Project Agreements). (i) all books of accounts, records, documentation and contracts in the possession of UAMPS relating to the Project; (ii) copies of all agreements and data in the possession of DAMPS relating to the financing of the Project; (iii) copies of all operating and financial records and reports relating to the - Project in the possession of DAMPS; (iv) copies of policies of inswance carried pursuant to Section 709; and (v) such other information and documents with respect to the Project as the Participant may reasonably request from time to time. To the extent that any of the foregoing items are subject to confidentiality restrictions or include non-public information, DAMPS shall exercise Commercially Reasonable Efforts to obtain a waiver of such restrictions for purposes of the Participant's examination and the Participant shall execute such non -disclosure agreements as may be reasonably requested by UAMPS. (b) The Participant acknowledges that the ability of DAMPS to issue and sell the Bonds depends upon, among other things, the credit standing ofthe Participants and their electric systems, and that it will be necessary for UAMPS to provide certain information with respect to the -52- Participants and their electric systems in connection with the sale of the Bonds (whether or not the Participant is making a Capital Contribution). In addition, UAMPS may be required to enter into continuing disclosure undertakings pursuant to Rule 15c242 of the Securities and Exchange Commission (or other law or regulation) to provide annual financial and operating information with respect to the Project and the Participants. The Participant covenants to and agrees with UAMPS that it will provide all information with respect to the Participant and its electric system, including financial and operating information and all contracts, documents, reports, bond resolutions and indentures, as may be requested by UAMPS or its counsel in connection with the financing of the Project, the issuance of the Bonds and compliance with such continuing disclosure undertakings. (c) The Participant covenants to and agrees with DAMPS that the Participant will fi�rnish to UAMPS (i) concurrently with its execution and delivery of this Contract and not later than 180 days after the end of each fiscal year of the Participant thereafter (or such later date as may be permitted by law), (A) a copy of the most recent annual financial statements of the Participant and iIs electric enterprise fund, audited by an independent certified public accountant or firm of such accountants, together with copies of all management letters and written recommendations and comments submitted by the accountants making such audit, and (B) the information and documents described in EXHMIT II attached hereto, and (ii) such other information and documents as UAMPS may reasonably request from time to time. (d) The Participant may notify DAMPS if non-public information is contained in the materials provided under EDIT II. DAMPS agrees to (i) classify any such non-public information as "protected records" within the meaning of, and to the extent permitted under, the Utah Government Records Access and Management Act, (ii) agrees to cooperate with the Participant to appropriately classify any such non-public information under such other public records laws that apply to the Participant and (iii) notify the Participant of any demand for disclosure of such information and will cooperate with the Participant in contesting any such disclosure demand. (e) Concurrently with its execution and delivery of this Contract, the Participant shall deliver to DAMPS (i) a certificate, together with attached exhibits, in substantially the form attached hereto as EmsIT III and (ii) an opinion of counsel in substantially the form attached hereto as ExHiBIT V. In connection with each issuance of Bonds by UAMPS and at such other times as UAMPS may reasonably request, the Participant shall deliver to UAMPS (iii) a bring - down certificate in substantially the form attached hereto as EDIT IV, and (iv) a bring -down opinion of counsel in substantially the form attached hereto as EXEBIT VI. Section 903. Covenants and Agreements of the Participant. The Participant covenants to and agrees with DAMPS as follows: (a) Maintenance of Rates. The Participant shall establish, maintain, revise, charge and collect rates for electric service rendered by it to its customers so that such rates shall provide revenues which, together with other funds reasonably estimated to be available, will be sufficient to meet the Participant's obligations to UAMPS under this Contract, to pay all other operating expenses of the Participant's electric system and to provide revenues sufficient to pay all -53- obligations of the Participant payable from, or constituting a charge or lien on, the revenues of its electric system and, to the extent being paid from the revenues of its electric system, all general obligation bonds of the Participant now or hereafter outstanding. (b) Maintenance of Revenues. The Participant shall promptly collect all charges due for electric utility services supplied by it as the same become due. The Participant shall at all times maintain and shall exercise Commercially Reasonable Efforts to enforce its rights against any person, customer or other entity that does not pay such charges when due. (c) Sale or Assignment of Electric System or Power Sales Contract. During the term of this Contract, the Participant shall not assign, sell, lease or otherwise dispose of all or substantially all of its electric system or this Contract, except upon compliance with the provisions of Sections 303 or 304, as applicable. (d) Prudent Utility Practice. The Participant shall, in accordance with Prudent Utility Practice, (i) at all times operate its electric system and the business thereof in an efficient manner, (ii) maintain its electric system in good repair, working order and condition, (ill) from time to time make all necessary and proper repairs, renewals, replacements, additions, betterments and improvements with respect to the electric system, so that at all times the business thereof shall be properly conducted, and (iv) duly perform its obligations under all power supply and transmission service agreements to which it is a party. (e) Operating Expenses. UAMPS and the Participant intend that the payments to be made by the Participant to UAMPS pursuant to this Contract will be payable (i) if and to the extent that any payments are required to be made prior to the Commercial Operation Date, from the revenues and income derived from the operation of the Participant's electric system as a cost of the development of a new long-term power supply resource, (ii) from and after the Commercial Operation Date as a cost of purchased electric power and energy, and (in) in each case as an operating expense of the Participant's electric system and a first charge, together with all other operating expenses, on the revenues derived from the operation of the Participant's electric system; provided that if any amount payable by the Participant under this Contract is prohibited from being paid as an operating expense of the Participant's electric system under applicable law or a binding contractual obligation, such amount shall be payable from the available revenues and income of the Participant's electric system. The Participant covenants to and agrees with UAMPS that it will, unless otherwise required by applicable law or under a binding contractual obligation, include the annual payments required to be made by it under this Contract as a cost of purchased electric power and energy as an operating expense in the annual operating budget of its electric system and in any resolution, ordinance or indenture providing for future borrowings for the Participant's electric system. (f) Tax Status. (i) The Participant agrees that it will apply all of the Electric Energy acquired under this Contract to a Qualified Use and that it will not take or omit to take any action (whether with respect to the Electric Energy or Environmental Attributes acquired under this Contract or otherwise) which could, either alone or in conjunction with any other -54- similar actions by the Participant or other Participants, adversely affect the Tax Status of any Bond or Bonds theretofore issued or thereafter issuable by UAMPS. Upon any breach of the foregoing covenants, the Participant shall take and pay the costs of all remedial actions as may be directed by UAMPS in order to maintain the Tax Status of the Bonds. (ii) The Participant represents and warrants that, as of the Effective Date, it has no contracts (and has no current expectation of entering into any contracts) other than Pennitted Contracts to provide electric service to any purchaser. At least thirty days prior to entering into any such contract, the Participant shall notify UAMPS of its intent to enter into such contract and provide copies of such contract to UAMPS. Within thirty days after receipt of such notice, UAMPS shall advise the Participant as to whether, in the opinion of Bond Counsel, such contract would result in a violation of the covenant in clause (i) above. The cost of such opinion and other reports necessary in connection therewith shall be borne by the Participant. (iii) The Participant agrees to provide such information as DAMPS may request and to comply with such additional instructions as may be provided by DAMPS in order to confi-rm and maintain the Qualified Use of the Electric Energy sold under this Contract and its use of Environmental Attributes in accordance with the provisions of this Section and Section 707. ARTICLE X DEFAULT AND REMEDIES Section. 1001. Default by Participant. Each of the following shall constitute a "default" by the Participant under this Contract: (a) failure of the Participant to make to DAMPS any of the payments for which provision is made m this Contract within five business days after the due date of any such payment; or (b) failure by the Participant to observe any of the covenants, agreements or obligations on its part contained herein and failure to remedy the same for a period of sixty days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given by or on behalf of UAMPS; or (c) bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, including proceedings under Title 11, Chapter 9, United States Code or other proceedings for relief under any federal or state bankruptcy law or similar law for the relief of debtors, are instituted by or against the Participant and, if instituted against the Participant, said proceedings are consented to or are not dismissed within thirty (30) days after such institution. Section 1002. Continuing Obligation of Participant; Right of DAMPS to Discontinue Service. (a) In the event of any default described in Section 1001, the Participant shall not be -55- relieved of its liability for payment of any amounts in default or its failure to observe its covenants, agreements and obligations hereunder and UAMPS shall have the right to recover from the Participant any amount in default. In enforcement of any such right of recovery, UAMPS may bring any suit, action, or proceeding in law or in equity, including mandamus and action for specific performance, as may be necessary or appropriate to enforce any covenant, agreement or obligation of the Participant hereunder or the obligation of the Participant to make any payment for which provision is made in this Contract. (b) In addition to proceeding with its rights against a defaulting Participant pursuant to paragraph (a) above, UAMPS may, upon not less than thirty (30) days' written notice from UAMPS to the defaulting Participant, suspend or terminate the Participant's right to receive its Entitlement Share under this Contract. Such notice shall be entitled "NOTICE OF DEFAULT UNDER CARBON FREE POWER PROJECT POWER SALES CONTRACT" and shall: (i) describe the type and amount of payments that are then due and unpaid (in the case of a default under Section 1001(a)) or the nature of such default (in the case of a default under Section 1001(b) or (c)); and (ii) state that the failure to make full and timely payment of all amounts due and payable hereunder, or otherwise to cure such default, within thirty (30) days from the date such notice is received by the defaulting Participant (as determined pursuant to .Section 1105) could result in the suspension or termination of its Entitlement Share, in whole or in part. UAMPS shall have no obligation to provide further notice of the default and its consequences to the defaulting Participant. UAMPS shall deliver promptly a copy of each notice delivered pursuant to this paragraph to the nondefaulting Participants. (c) If the defaulting Participant in good faith disputes the basis for or the validity of the default(s) described in the written notice of UAMPS, including any amounts stated in the notice as being due and unpaid, it shall nevertheless make such payment within said thirty (3 0)-day period under written protest directed to UAMPS specifying the basis upon which the protest is based. Protested payments shall be treated as a dispute in a monthly billing statement and UAMPS shall consider such dispute as provided in Section 806. All other disputes shall be addressed as provided in Section 1005(b). (d) In connection with its determination to suspend or terminate a defaulting Participant's Entitlement Share, UAMPS shall take into account, among such other matters as it shall deem relevant, the amounts and due dates of its payment obligations under the Project Agreements and the Financing Documents and the funds and revenues available to UAMPS to enable it to meet its obligations thereunder. (e) In the event that UAMPS has suspended (but not terminated) a defaulting Participant's right to receive the Electric Energy allocable to its Entitlement Share, such Participant may restore its right to receive such Electric Energy by (i) taking all actions on its part necessary to cure or remedy the default, (ii) paying all amounts necessary to compensate the nondefaulting Participants and UAMPS for fees, costs, expenses and losses incurred by them as a result of such default, and (i ii) taking such other action and paying such amounts, including providing such adequate assurances of performance (such as a prepayment or the posting of a security deposit) as may be reasonably required by the Project Management Committee. -56- (f) The suspension or termination of a defaulting Participant's right to receive its Entitlement Share and any actions taken by UAMPS pursuant to Section 902 shall not terminate, reduce or modify the defaulting Participant's obligations and liabilities under its Power Sales Contract. The defaulting Participant shall remain liable under all billing statements rendered by UAMPS, whether prior or subsequent to the default, and DAMPS for itself and on behalf of the nondefaulting Participants shall be entitled to recover from the defaulting Participant all damages, legal fees, costs and expenses incurred by UAMPS and the nondefaulting Participants as a result of such default. UAMPS shall exercise Commercially Reasonable Efforts to mitigate the damages resulting from the Participant's default. Section 1003a Transfer of Entitlement Share Following Default; Other Actions by DAMPS. (a) UAMPS and the Participant acknowledge that a default by any of the Participants under its Power Sales Contract could reduce the revenues available to UAMPS which are necessary in order for UAMPS to meet its obligations under the Project Agreements and the Financing Documents on a timely basis. In the event of an insufficiency of revenues and an inability of UAMPS to meet timely such obligations, the ability of UAMPS to deliver Electric Energy from the Project and the interests of all of the Participants will be materially and adversely affected. The provisions of this Section are intended to provide a means toassure the sufficiency of revenues to UAMPS following. a default by a Participant under its Power Sales Contract. The Participants agree that the provisions of this Section are reasonable and necessary in order for them to achieve the benefits of their joint and cooperative undertaking with respect to the Project. (b) In the event of a default by any Participant and suspension or termination of the Participant's right to receive its Entitlement Share pursuant to Section 1002, but only if the Project has not been terminated, UAMPS and the nondefaulting Participants shall take the following actions in the order set forth below: (i) DAMPS shall immediately allocate all of the defaulting Participant's Entitlement Share among all of the nondefaulting Participants, pro rata on the basis of their then -current Entitlement Shares, which shall remain in effect only until the completion of the procedures provided for in this paragraph (b). UAMPS shall provide written notice to the nondefaulting Participants of the initial allocation of the defaulting Participant's Entitlement Share which notice shall (A) set forth the date of the initial allocation, (B) include a revised SCHEDULE I showing the increased Entitlement Shares and (to the extent applicable) the revised Capital Contribution Percentages, Debt Service Percentages and Debt Service Shares of the nondefaulting Participants as a result of such allocation, (C) direct each of the nondefaulting Participants to make an election pursuant to subparagraph (2) below, and (D) set forth the date by which each of the nondefaulting Participants must notify UAMPS of such election. The initial allocation of the defaulting Participant's Entitlement Share and the increased Entitlement Shares and the revised Capital Contribution Percentages, Debt Service Percentages and Debt Service Shares of the nondefaulting Participants as a result of such allocation (as shown on the revised SCHEDULE I prepared by UAMPS) shall remain in effect until the completion of the procedures provided for in this paragraph (b). During such period, each of the nondefaulting Participants shall have all of the rights, benefits, obligations and responsibilities associated -57- with its increased Entitlement Share and its revised Capital Contribution Percentage, Debt Service Percentage and Debt Service Share as a result of such allocation. Within sixty days after the initial allocation of the defaulting Participant's Entitlement Share, each nondefaulting Participant shall notify UANTS in writing of its election to: (A) retain all of its initial allocation of the defaulting Participant's Entitlement Share; or (B) retain none or less than all of such allocation. Any Participant that elects to retain all of its initial allocation of the defaulting Participant's Entitlement Share shall be deemed to have fully satisfied its step-up obligations under this Section and shall not thereafter be required to accept any additional allocation of the defaulting Participant's Entitlement Share; provided that any such nondefaulting Participant may give notice to UAMPS of its request to acquire additional amounts of the defaulting Participant's Entitlement Share as may be available. (iii) Within thirty (30) days after its receipt of the elections of all nondefaulting Participants pursuant to subparagraph (ii), UAMPS shall determine whether the nondefaulting Participants have elected to retain all of the defaulting Participant's Entitlement Share. In the event that one or more of the nondefaulting Participants elected to retain less than all of the initial allocations of the defaulting Participant's Entitlement Share, UA IPS shall reallocate the remaining amounts of the defaulting Participant's Entitlement Share proportionally among those nondefaulting Participants that have requested additional amounts of the defaulting Participant's Entitlement Share. To the extent that any part of the defaulting Participant's Entitlement Share is then unallocated, UAMPS shall next reallocate the remaining portion of the defaulting Participant's Entitlement Share proportionally among those Participants that did not elect to retain all of their initial allocations of such Entitlement Share. Proportional reallocations shall be based upon the Entitlement Shares of the nondefaulting Participants in effect immediately prior to the defaulting Participant's default. (iv) In no event shall the final allocation of a defaulting Participant's Entitlement Share PULDLLant to subparagraph (iii) (or the total %J all such allocations in the event of multiple Participant defaults) cause any nondefaulting Participant's Entitlement Share to increase by more than 25% over its "Adjusted Entitlement Share" without such Participant's consent. The "Adjusted Entitlement Share" is the Participant's Entitlement Share shown on SCHEDULE I on and as of the Effective Date, as such Entitlement Share may have previously been increased upon an assignment to the Participant pursuant to Section 303. (v) Each allocation or reallocation of a defaulting Participant's Entitlement Share shall also allocate or reallocate the defaulting Participant's Capital Contribution Percentage and Debt Service Percentage to the nondefaulting Participants receiving such allocation or reallocation. The Capital Contribution Percentage and the Debt Service Percentage of the defaulting Participant shall be allocated to each of such nondefaulting Participants proportionally based upon the respective amounts of the defaulting Participant's Entitlement Share that are allocated or reallocated to them. The standards set forth in Section 603(e) shall apply to the foregoing computations. -58- (vi) UAMPS shall deliver, promptly after making the determinations and �. reallocations required by this paragraph (b), a notice to the nondefaulting Participants which notice shall (A) set forth the final allocation of the defaulting Participant's Entitlement Share pursuant to subparagraph (iii), and the effective date of the final allocation, and (B) include a revised ScxEDuLE I showing the revised Entitlement Shares, Capital Contribution Percentages, Debt Service Percentages and Debt Service Shares, respectively, of the nondefaulting Participants upon the final allocation pursuant to subparagraph (iii). The Entitlement Shares, Capital Contribution Percentages, Debt Service Percentages and Debt Service Shares shown on such revised SCEEDULE I shall thereafter be the Entitlement Shares, Capital Contribution Percentages, Debt Service Percentages and Debt Service Shares of the nondefaulting Participants. (vii) Any portion of the Entitlement Share of a defaulting Participant allocated or reallocated to a nondefaulting Participant pursuant to this paragraph (b) shall become a part of and shall be added to the Entitlement Share of the nondefaulting Participant, and from and after the date of such transfer the nondefaulting Participant shall be obligated to pay for its increased Entitlement Share pursuant to the terms and provisions of this Contract. The defaulting Participant shall remain liable to UAMPS and the nondefaulting Participants for costs incurred and damages suffered by them in connection with the actions taken with respect to the defaulting Participant's Entitlement Share provided for in this Section. (c) If, as a result of the limitation stated in subparagraph (b)(iv) above, any portion of a defaulting Participant's Entitlement Share remains unallocated or upon the request of any nondefaulting Participant, UAMPS shall use Commercially Reasonable Efforts to sell or dispose of the unallocated or designated Entitlement Share or the associated Project Capability and Environmental Attributes. In the event that UAMPS, based upon the advice of Bond Counsel, determines that any such sale or disposition could adversely affect the Tax Status of any Bonds, UAMPS will, in a Commercially Reasonable manner, take such remedial actions as% may be designated by Bond Counsel in order to maintain the Tax Status of such Bonds. The defaulting Participant shall be liable for the costs, fees and expenses incurred by UAMPS in connection with any such sale, disposition or remedial action. (d) In connection with any action taken by it pursuant to this Section, UAMPS shall take into account the proceeds received or to be received from such sale or disposition and shall, to the extent necessary, but subject to the limitation stated in paragraph (b)(iv) above, make adjustments to the Entitlement Share, Capital Contribution Percentage, Debt Service Percentage and Debt Service Share of each of the nondefaulting Participants to reflect such sale or disposition and to ensure the receipt of revenues sufficient to enable UAMPS to meet its obligations under the Project Agreements and the Financing Documents. The Participant acknowledges that such adjustments may, under certain circumstances, result in a change in the Participant's share of Operation and Maintenance Costs and Debt Service Costs without a corresponding change in the Participant's Entitlement Share. Upon the completion of the procedures provided for in this Section, UAMPS shall prepare and send to each of the Participants a final revised SCHEDULE I. setting forth the Entitlement Shares, the Capital Contribution Percentages, Debt Service Percentages and Debt -59- Service Shares, respectively, of the nondefaulting Participants reflecting the procedures and actions taken pursuant to this Section. Section 1004. Other Default by Participant. In the event of a failure of the Participant to observe, keep and perform any of the covenants, agreements or obligations on its part contained in this Contract, UAMPS may, in addition to its other rights hereunder, bring any suit, action, or proceeding in law or in equity, including mandamus, injunction and action for specific performance, as may be necessary or appropriate to enforce any covenant, agreement or obligation of this Contract against the Participant. Section 1005. Default by DAMPS; Dispute Resolution. (a) In the event of any default by UAMPS under any covenant, agreement or obligation of this Contract, the Participant's sole remedy for such default shall be limited to mandamus, injunction, action for specific performance or any other available equitable remedy as may be necessary or appropriate and in no event shall the Participant withhold or offset any payment owed to UAMPS hereunder. (b) Prior to and as a condition to the filing of any action with respect to this Contract under paragraph (a) above, the Participant shall first submit the dispute or matter in question to the Project Management Committee for mediation by giving notice in writing to UAMPS and the Chair of the Project Management Committee describing the dispute or matter and the issue or issues to be resolved. The Participant agrees to participate fully and in good faith in all mediation proceedings of the Project Management Committee. In the event that the Project Management Committee is unable to resolve or mediate such dispute or matter within 120 days after UAMPS has received written notice of the dispute, the Participant shall have the right to initiate such proceedings as it may deem necessary pursuant to paragraph (a). Section 1006. Abandonment of Remedy. In case any proceeding taken on account of any default shall have been discontinued or abandoned for any reason, the parties to such proceedings shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of UAMPS and the Participant shall continue as though no such proceedings had been taken. Section 1007. Waiver of Default. Any waiver at any time by either DAMPS or the Participant of its rights with respect to any default of the other parry hereto, or with respect to any other matter arising in connection with this Contract, shall not be a waiver with respect to any subsequent default, right or matter. ARTICLE XI GENERAL PROVISIONS Section 1101. Relationship to and Compliance with Other Instruments. (a) It is recognized by the parties hereto that DAMPS, in undertaking, or causing to be undertaken, the planning, financing, construction, acquisition, operation and maintenance of the Project, must comply with the requirements of the Financing Documents, the Project Agreements and all Permits and Approvals necessary therefor, and it is therefore agreed that this Contract is made subject to the -60- terms and provisions of the Financing Documents, the Project Agreements and all such Permits and Approvals. (b) The Participant acknowledges that (i) DAMPS' rights under the Project Agreements are limited to those specifically set forth therein, and (ii) upon any default or performance failure by the other parties to such Project Agreements, DAMPS' remedies will be limited to those set forth in the applicable Project Agreements. The Participant understands and agrees that, this Contract and UAMPS obligations under it are subject to the terms and requirements of the Project Agreements, the Financing Documents and the Permits and Approvals for the Project. (c) DAMPS covenants and agrees that it will use Commercially Reasonable Efforts for the benefit of the Participant to comply in all material respects with all terms, conditions and covenants applicable to it contained in the Financing Documents, the Project Agreements and all Permits and Approvals, and that it will not, without the consent of the Participant, enter into any amendment or modification of the Financing Documents or the Project Agreements which will change the Participant's Entitlement Share or which will materially and adversely affect the rights and obligations of the Participant hereunder. To the extent that the Power Sales Contracts provide chat UAMPS, the Board or the Project Management Committee has discretion over a particular matter, DAMPS (acting upon the recommendation of the Project Management Committee and the approval of the Board) may agree in the Financing Documents or the Project Agreements to limitations, conditions or restrictions on such discretion. Section 1102. Liability of Parties. DAMPS and the Participant shall assume full responsibility and liability for the maintenance and operation of their respective properties and each shall, to the extent permitted by law, indemnify and save harmless the other from all liability and expense on account of any and all damages, claims, or actions, including injury to or death of persons arising from any act or accident in connection with the installation, presence, maintenance and operation of the property and equipment of the indemnifying party and not caused in whole or in part,by the negligence of the other, party; provided that (i) any liability of the Participant shall be payable only from insurance coverage and the available income and revenues of its electric system, and (ii) any liability which is incurred by UAMPS through the acquisition, construction, operation and maintenance of the Project or pursuant to the Project Agreements and not covered, or not covered sufficiently, by insurance shall be paid solely from the revenues of UAMPS hereunder, and any payments made by UAMPS to satisfy such liability shall, except to the extent paid from proceeds of Bonds or Capital Contributions, become part of Operation and Maintenance Costs. Section 1103. Assignment. (a) This Contract shall inure to the benefit of and shall be binding upon the respective successors and assigns of the parties to this Contract; provided, however, that neither this Contract nor any interest herein shall be transferred or assigned by either party hereto except as follows: (i) DAMPS may assign its interests under this Contract or all or any portion of the amounts payable by the Participant hereunder pursuant to the Financing Documents as described in paragraph (b) below; -61- (ii) UAMPS may sell, transfer or reallocate all or any portion of the Participant's Entitlement Share following a default by the Participant and a discontinuance of service as provided in Section 1002, kw) after such point in time as all Bonds issued under the Financing Documents have been paid or deemed to have been paid as provided in the Financing Documents, DAMPS may, upon the approval of the Project Management Committee, assign this Contract and pledge the amounts payable by the Participant hereunder; (iv) the Participant shall assign the Electric Energy allocable to the Participant's Entitlement Share to the UAMPS Pool as provided in Section 702(b); and (v) the Participant may assign or transfer all or any portion of its Entitlement Share or its interests under this Contract only as provided in Sections 303 or 304, as applicable. (b) The Participant acknowledges and agrees that DAMPS may assign and pledge to the Trustee designated in the Financing Documents all or any portion of its right, title, and interest in and to the payments to be made to UAMPS under the provisions of this Contract, as security for the payment of the principal (including sinking fund installments) of, premium, if any, and interest on Bonds and, upon such assignment and pledge, UAMPS may grant to the Trustee any rights and remedies herein provided to UAMPS, and thereupon any reference herein to UAMPS shall be deemed, with the necessary changes in detail, to include the Trustee which on behalf of and together with the owners from time to time of the Bonds shall be third party beneficiaries of the covenants and agreements of the Participant herein contained. (c) The Participant acknowledges and agrees that it may not pledge, assign, encumber or transfer its interests under this Contract to secure any financing undertaken by or for it to fund any Capital Contribution to UAMPS. Section 1104. Amendments. (a) This Contract shall not be amended, modified, or otherwise altered in any manner that will adversely affect the security for the Bonds afforded by the provisions of this Contract. So long as any of the Bonds are outstanding or until adequate provisions for the payment thereof have been made in accordance with the provisions of the Financing Documents, this Contract shall not be amended, modified, or otherwise altered in any manner which will reduce the payments pledged as security for the Bonds or extend the time of such payments provided herein or which will in any manner impair or adversely affect the rights of the owners from time to time of the Bonds. For the avoidance of doubt, any actions taken by UAMPS or the Participant under or pursuant to this Contract that are required or permitted by this Contract shall not be deemed to constitute an amendment, modification or alteration of this Contract within the meaning of this paragraph. (b) No Power Sales Contract entered into between DAMPS and another Participant may be amended so as to provide terms and conditions that are substantially and materially different from those contained in this Contract except upon written notice to and written consent or waiver ipants, and upon similar amendment being made to the Power Sales by each of the other Partic -62- Contracts of any other Participants requesting such amendment after receipt by such Participants of notice of such amendment. No amendment to this Contract shall become effective until all Required Approvals have been obtained by or on behalf of the Participant. (d) In connection with any revision or amendment of the billing procedures provided for in Section 803, Section 804 or of any of the Exhibits attached hereto, UAMPS shall promptly provide a copy of the revision or amendment to the Participant. Section 1105. Notices and Computation of Time. (a) All notices, demands or other communications made pursuant to this Contract (each, a "Notice") may be sent by facsimile, electronic mail, other mutually acceptable electronic means, a nationally recognized overnight courier service, first class mail or hand delivery. Notice shall be deemed given when received by the addressee, unless received on a day that is not a business day or received after 5000 p.m. (receiving party's local time) on a business day, in which case Notice shall be deemed to have been received on the next following business day. In the absence of proof of the actual receipt date, the following presumptions will apply: (i) Notice sent by facsimile or electronic mail shall be deemed to have been received upon the sending party's receipt of electronic confirmation of successful transmission; (ii) Notice sent by overnight mail or courier- shall be deemed to have been received on the next business day after it was sent or such earlier time as is confirmed by the receiving party; and (iii) Notice sent by first class mail shall be deemed to have been received five business days after mailing. (b) All Notices shall be sent by DAMPS to the business address, facsimile address or e- mail address of the Participant's Representative. All Notices shall be sent by the Participant to the business address, facsimile address or designated e-mail address of DAMPS. Either party may change its Notice address(es) by Notice to the other party. Section 1106. Relationship of DAMPS and the Participant; Relationship Among Participants. (a) This Contract is not intended to create, nor shall it be deemed to create, any relationship between UAMPS and the Participant other than that of independent parties contracting with one another for the purpose of effectuating the provisions of this Contract. (b) The covenants, obligations; liabilities, rights and benefits of the Participant under this Contract are individual and not joint and several, or collective, with those of any other Participant. Other than giving effect to the joint and cooperative action of UAMPS on behalf of the Participants, the Power Sales Contracts shall not be construed to create an association, joint venture, trust or partnership, or to impose a trust or partnership covenant, obligation or liability on, between or among the Participant and any one or more of the Participants. No Participant shall be or be deemed to be under the control of, nor shall any Participant control or be deemed to control, any or all of the other Participants or the Participants as a group. No Participant shall be bound by the actions of any other Participant, nor shall any Participant be deemed to be the agent of any other Participant or have the right to bind any other Participant. Section 1107. No Recourse Against Officers, Etc. of DAMPS or Participant. No member � of the governing body, nor any officer or employee of IJAMPS or the Participant shall be individually or personally liable for any payment under this Contract or be subject to any personal -63- liability or accountability by reason of the execution of this Contracts provided, however, that this Of Section shall not relieve any officer or employee of UAMPS or the Participant from the performance of any official duty imposed by law. Section 1108. Contract Beneficiaries, This Contract is entered for the benefit of and as the binding agreement of UAMPS and the Participant. The Trustee and the owners of the Bonds are the only third -party beneficiaries of this Contract, as and to the extent provided in the Financing Documents, Section 1109. Governing Law; Jurisdiction and Venue. (a) This Contract is made under and shall be governed by the law of the State of Utah; provided, however, that if the Participant is organized or created pursuant to the laws of another state, then the authority of the Participant to execute and perform its obligations under this Contract shall be determined under the laws of such state. (b) All judicial proceedings brought against either party arising out of or relating hereto shall be brought exclusively in the courts of the State of Utah or of the United States of America for the District of Utah. By executing and delivering this Contract, each party, for itself and in connection with its properties, irrevocably accepts generally and unconditionally the nonexclusive jurisdiction and venue of such courts; waives any defense of forum non conveniens; agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to the party at its address provided in accordance with Section 1105; and agrees that service as provided above is sufficient to confer personal jurisdiction over the party in any such proceeding in any such court, and otherwise constitutes effective and binding service in every respect. Section 1110. Severability; No Merger. (a) If any section, paragraph, clause or provision of this Contract shall be fmally adjudicated by a court of competent jurisdiction to be invalid, the remainder of this Contract shall remain in fall force and effect as though such section, paragraph, Clause or provision or any part thereof so adjudicated to be invalid had not been included herein. (b) This Contract constitutes the entire and complete agreement of DAMPS and the Participant in respect of the Project and shall not be nor shall it be deemed to be modified, amended or superseded by any other agreement or contract between UAMPS and the Participant in respect of any other project or subject. (Signature pages follow. ) -64- IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by their proper officers respectively, being thereunto duly authorized, and their respective corporate seals to be hereto affixed, as of the day, month and year first above written. [SEAL] ATTEST AND COUNTERSIGN By: Title: Clerk Date of Execution and Delivery: Approved as to proper form and compliance with applicable law: By: Attorney for Participant T�ZUCKEE DONNER PUBLIC UTII,ITY DISTRICT, CALIFORNIA By: Its President -65- [SEAL] ATTEST AND COUNTERSIGN By: Secretary Date of Execution and Delivery: Approved as to proper form and compliance with applicable law: By: Attorney for DAMPS UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS By: Chairman -66- SCHEDULEI SCHEDULE OF PARTICIPANTS, ENTITLEMENT SHARES, CAPITAL CONTRIBUTION PERCENTAGES9 DEBT SERVICE PERCENTAGES AND DEBT SERVICE SHARES DEVELOPMENT PARTICIPANT KW ENTITLEMENT COST AMOUNT SHARE SHARE 0 TOTAL % ° 3:1 DESCRIPTION OF THE INITIAL FACILITIES The following is a preliminary and summary description of the Initial Facilities. This description is subject to change based upon selection of the Contractor, the negotiation of the final terms of the Construction Contracts and the construction of the Initial Facilities. The final description of the Initial Facilities will be approved by the Project Management Committee after the Project achieves commercial operation. I-1 PARTICIPANT FISCAL YEAR FORM OF PARTICIPANT'S ANNUAL INFORMATION REPORT* Incorporated area of municipality Service area of utility Transmission and distribution lines SYSTEM DESCRIPTION square miles. square miles. miles. Number of employees in electrical department (Include sum of shared employees' time in other city offices to determine equivalent full-time employees.) Number of customers served outside the city limits Service area outside of the city limits square miles. NUMBER OF ELECTRICAL CUSTOMERS Avis TVPF n1W T,nAri .CCF.RVF.D TYPE OF CUSTOMER NUMBER OF CUSTOMERS Residential Commercial Industrial Agricultural and Pumping Milit and Other Total Annual audit will be sent to UAMPS as soon as completed after the fiscal year. Eleciric Rate Schedules for the above classes of service are attached hereto. * Under Section 902(d) of the Power Sales Contract, UAMPS has agreed to classify certain of the information provided by the Participant on this Exhibit II as a "protected record", pursuant to the Participant's request. The Participant must also take any actions necessary on its part to appropriately classify and protect such information provided in this Exhibit. Customer Sales by Class Total sales to your customers Revenues from energy sales to your customers in $ kWh. KWH SALES REVENUES $ Residential Commercial Industrial Agricultural Other Total GENERATION PRODUCED FOR SYSTEM LOAD GENERATING UNIT PRODUCTION #1 42 43 #4 kW kWh kW kWh kW kWh kW kWh July August September October November December January February March April May June TOTAL, SYSTEM PEAK INCLUDING LOAD COVERED BY OWN GENERATION kW kW July January August February September March October Aril November May December June 1. 2. 3. 4. TYPE of BUSINESS FIVE LARGEST LOADS KWH SOLD ACHIEVEMENTS Provide below the achievements of your utility for the year. ELECTRICAL BILLINGS c EXHIBIT III FORM OF CERTIFICATE OF PARTICIPANT STATE OF ) ) COUNTY OF ) The undersigned hereby certify chat they are the [Executive Officer] and [Clerk/Recorder/Secretary] of (the "Participant"), a member of Utah Associated Municipal Power Systems ("UAMPS"), and that as such they are authorized to execute this Certificate on behalf of the Participant and hereby certify as follows: 1. This Certificate has been executed pursuant to Section 902(e) of the Carbon Free Power Project Power Sales Contract, dated as of April 1, 2018 (the "Power Sales Contract"), between the Participant and UAMPS, in connection with the execution and delivery of the Power Sales Contract. Capitalized terms used and not otherwise defined herein have the meanings assigned to them in. the Power Sales Contract. 2. The Participant is a ,duly created and validly existing under the laws of the State of , and is governed by a (the "Governing Body ") composed of «number» members. 3. Attached hereto as Exhibit A is a true, complete and correct copy of a resolution authorizing the execution and delivery of the Power Sales Contract and related matters (the "Contract Resolution"). The Contract Resolution was duly adopted by a majority of the Governing Body present and voting at a [regular/special] public meeting of the Governing Body held on , at which a quorum was present and acted throughout, all in accordance with law and applicable procedural rules of the Governing Body. The Contract Resolution is in full force and effect and has not been amended, modified, repealed or supplemented. 4. The names of the [Executive Officer] and the [Secretary/Clerk/Recorder] authorized to execute and deliver the Power Sales Contract on behalf of the Participant are as follows: NAvIE OFFICE «officer» «office» «officer» «office» 5. The meeting of the Governing Body in connection with the authorization of the Power Sales Contract was open to the public at all times and was duly called, noticed and held in conformity with applicable laws of the State and procedural rules of the Governing Body. 6. (a) No petition was filed with the Participant or any of its officers seeking to refer the Contract Resolution to the electors of the Participant in accordance with the provisions of state law; and (b) no litigation has been instituted, is pending or has been threatened to require a referendum election on the Contract Resolution. 7. The Participant owns and operates an electric utility system (the "System ") that distributes and furnishes electric energy to consumers located within the established service area of the System. 8. The Participant has previously executed the Utah Associated Municipal Power Systems Amended and Restated Agreement for Joint and Cooperative Action dated as of March 20, 2009 and all amendments thereof and supplements thereto (the "JointActionAgreement") and that certain Power Pooling Agreement (the "Pooling Agreement") between the Participant and UAMPS relating to the power pool administered by UAMPS. The Joint Action Agreement and the Pooling Agreement are each in full force and effect and constitute the legal, valid and binding agreements of the Participant. 9. «Rep» has been duly appointed by the Governing Body as the Participant's representative to UAMPS. 10. The representations and warranties of the Participant in Section 901(a) of the Power Sales Contract are true and correct on and as of the date of this certificate. 11. The Participant will use all of the electric energy from its Entitlement Share in a Qualified Use (as defined in the Power Sales Contract). 12. The information provided by the Participant to DAMPS pursuant to Section 902(b) and (c) of the Power Sales Contract and attached as Ex=T II thereto with respect to the Participant and the System is true, correct and complete. The Participant has duly authorized UAMPS to use such information in connection with the preparation of an official statement of UAMPS with respect to the bonds to be issued to provide financing for the costs of acquisition and construction of the Project and to provide such information to interested parties. [PARTICIPANT] [Executive Officer] By [ClerklRecorder/S ecretary] [Seal] EXHIBIT Ell [Form of Contract Resoluuonj RESOLUTION NO. A RESOLUTION AUTHORIZING AND APPROVING THE CARBON FREE POWER PROJECT POWER SALES CONTRACT WITH UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS; THE INITIAL BUDGET AND PLAN OF FINANCE FOR THE PROJECT; AND RELATED MATTERS. WHEREAS, (the "Participant") is a member of Utah Associated Municipal Power Systems ("UAWS") pursuant to the provisions of the Utah Associated Municipal Power Systems Amended and Restated Agreement for Joint and Cooperative Action, as amended (the "Joint Action Agreement "); WHEREAS, one of the purposes of DAMPS under the Joint Action Agreement is the acquisition and construction of electric generating, transmission and related facilities in order to secure reliable, economic sources of electric power and energy for its members; WHEREAS, DAMPS proposes to acquire and construct a nuclear generating facility plant known as the Carbon Free Power Project (the "Project") to be located at a site within the Idaho National Laboratory near the City of Idaho Falls, Idaho; WHEREAS, the Governing Body has reviewed (or caused to be reviewed on its behalf) certain descriptions and summaries of the Project, the Power Sales Contract and the Project Agreements ("Project Agreements" and other capitalized terms used and not defined herein shall have the meanings assigned to them in the Power Sales Contract), and representatives of the Participant have participated in discussions and conferences with UAMPS and others regarding the Project and have received from UAMPS all requested information and materials necessary for the decision of the Governing Body to authorize and approve the Power Sales Contract; WHEREAS, the Participant acknowledges that the obligation of the Participant to make the payments provided for in the Power Sales Contract will be a special obligation of the Participant and an operating expense of the Participant's electric system, payable from the revenues and other available funds of the electric system, and that the Participant shall be unconditionally obligated to make the payments required under the Power Sales Contract whether or not the Project or any portion thereof is acquired, constructed, completed, operable or operating and notwithstanding the suspension, interruption, interference, reduction or curtailment of the output thereof for any reason whatsoever; WHEREAS, the Governing Body has reviewed (or caused to be reviewed on its behalf) the initial Budget and Plan of Finance for the Project prepared by DAMPS setting forth, among other A-1 things, preliminary estimates of the Development Costs, Cost of Acquisition and Construction, the estimated timeline for the development and construction of the Project, the estimated target price range for Project output, and now desires to approve the initial Budget and Plan of Finance; and WHEREAS, U Participant now desires to authorize and approve the Power Sales Contract; Now, THEREFORE, BE IT RESOLVED by the Governing Body of as follows: Section 1. Approval of Power Sales Contract and Budget and Plan of Finance; Entitlement Share. (a) The Power Sales Contract, in substantially the form attached hereto as Annex A, is hereby authorized and approved, and the [Executive Officer] is hereby authorized, empowered and directed to execute and deliver the Power Sales Contract on behalf of the Participant, and the [Clerk/Recorder/Secretary] is hereby authorized, empowered and directed to attest and countersign such execution and to affix the corporate seal of the Participant to the Power Sales Contract, with such changes to the Power Sales Contract from the form attached hereto as Annex A as shall be necessary to conform to the Participant's legal status, to complete the form of the Power Sales Contract or to correct any minor irregularities or ambiguities therein and as are approved by the [Executive Officer], his execution thereof to constitute conclusive evidence of such approval. (b) The initial Budget and Plan of Finance attached hereto as Annex B is hereby approved. (c) An Entitlement Share representing up to kW of capacity, as such capacity amount may be rounded upon the approval of the Project Management Committee and the Participant's Representative pursuant to the Power Sales Contract to provide a whole number of small modular reactors is hereby authorized and approved. Section 2. Participant's Representative. Participant's Representative to UAMPS and of Representatives is hereby confirmed. (a) The appointment of and as the as alternate (b) Such Representative (or, in his or her absence, such alternate(s)) is hereby delegated full authority to (i) approve any appendix to the Pooling Agreement between UAMPS and the Participant that may be necessary or desirable in connection with the utilization of the Participant's Entitlement Share, and (ii) act on all matters that may come before the Project Management Committee established by the Power Sales Contract, and shall be responsible for reporting regularly to the Governing Body regarding the activities of the Project Management Committee; provided that the Representative shall not deliver a Notice of Withdrawal or a Notice of Reduction under the Power Sales Contract without prior consultation with, and prior approval from, the Governing Body. Section 3. Compliance with Tax Covenants. The Participant agrees in the Power Sales Contract that it will apply all of the electric power and energy acquired under the Power Sales Contract to a Qualified Use and that it will not take or omit to take any action which could adversely affect the Tax Status of any Bond or Bonds theretofore issued or thereafter issuable by UAMPS. In furtherance of that agreement, the Governing Body of the Partici furpant hereby agrees A-2 that it will observe and comply with such instructions as may be provided from time to time by UAMPS with respect to the Qualified Use of the electric power and energy acquired under the Power Sales Contract. Section 4. Further Authority. (a) The [Executive Officer] and the [Clerk/Recorder/Secretary] are hereby authorized, empowered and directed to (i) execute the Certificate of the Participant in substantially the form attached as Exhibit III to the Power Sales Contract and to deliver the same to UAMPS, and (ii) from time thereafter and upon the request of UAMPS, execute the Bring -Down Certificate of the Participant in substantially the form attached as Exhibit IV to the Power Sales Contract and to deliver the same to UAMPS. (b) The Participant's legal counsel is hereby auihorized, empowered and directed to (i) execute the Opinion of Counsel to the Participant in substantially the form attached as Exhibit V to the Power Sales Contract and to deliver the same to UAMPS, and (ii) from time thereafter and upon the request of UAMPS, execute the Bring -Down Opinion of Counsel to the Participant in substantially the form attached as Exhibit VI to the Power Sales Contract and to deliver the same to UAMPS. Section S. Miscellaneous; Effective Date. (a) This resolution shall be and remain irrepealable until the expiration or termination of the Power Sales Contract in accordance with its terms. (b) All previous acts and resolutions in conflict with ibis resolution or any part hereof are hereby repealed to the extent of such conflict. (c) In case any provision in this resolution shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. (d) This resolution shall take effect immediately upon its adoption and approval. ADOPTED AND APPROVED this _ day of [PARTICIPANT] ATTEST: [Secretary/Clerlc/Recorder] [SEAL] ArrrrEx A [Attach Power Sales Contract] ANNEX B [Attach Budget and Plan of Finance] EXHIBIT IV FORM OF BRING DOWN CERTIFICATE OF THE PARTICIPANT STATE OF COUNTY OF «COUNTY» The undersigned hereby certify that they are the [Executive Officer] and [Clerk/Recorder/Secretary] of (the "Participant"), a member of Utah Associated Municipal Power Systems ("UAMPS"), and that as such they are authorized to execute this Certificate on behalf of the Participant and hereby certify as follows. 1. This certificate has been executed in connection with the issuance by UAMPS of its Carbon Free Power Project Revenue Bonds, Series (the "Bonds"), as more fully described in the Official Statement of UAMPS dated (the "Official Statement") prepared in connection with the offering and sale of the Bonds. 2. Pursuant to Section 902(e) of the Carbon Free Power Project Power Sales Contract, dated as of , between the Participant and UAMPS, in connection with the execution and delivery of the Carbon Free Power Project, the undersigned executed and delivered a certificate dated (the "Original Certificate "). The undersigned hereby reaffirm the statements made in the Original Certificate on and as of the date hereof. Capitalized terms used and not otherwise defined herein have the meanings assigned to them in the Original Certificate. [3. The undersigned have reviewed the statements and information relating to the Participant and its electric system contained m APPENDIX A to the Preliminary Official Statement and the Official Statement under the caption, "THE MAJOR PARTICIPANTS", and such statements and information, as of the respective dates of the Preliminary Official Statement and the Official Statement and as of the date hereof, (a) were and are true and correct in all material respects and fairly and accurately present the financial and operating position of the System for the periods and as of the dates presented and (b) did not and do not omit to state a material fact necessary in order to make such statements not misleading. Since the dates of the Preliminary Official Statement and the Official Statement, there has been no change in the business, financial position, results of operations or condition of the Participant or the System that would (x) materially affect the accuracy and completeness of such statements and information or (y) materially and adversely affect the ability of the Participant to meet its obligations under the Power Sales Contract.] Dated this day of [PARTICIPANT] Its [SEAL] EXHIBIT V FORM OF OPINION OF COUNSEL TO THE PARTICIPANT Utah Associated Municipal Power Systems [Address] Ladies and Gentlemen: I have acted as counsel to (the "Participant ") in connection with the Carbon Free Power Project Power Sales Contract, dated as of April 1, 2018 (the "Power Sales Contract"), between the Participant and Utah Associated Municipal Power Systems ("UAMPS"). Pursuant to the Power Sales Contract, UAMPS has undertaken the Project and has sold all of Electric Power and Electric Energy and Environmental Attributes (if any) of the Project to the Participant and others that have executed Power Sales Contracts with UAMPS. This opinion is being delivered to you pursuant to Section 902(e) of the Power Sales Contract in connection with the execution and delivery of the Power Sales Contract. Capitalized terms used and not defined herein have the meanings assigned to such terms in the Power Sales Contract. As counsel to the Participant, I have examined (i) those documents relating to the existence, organization and operation of the Participant and its electric utility system (the "System "), (ii) all resolutions and proceedings of the Participant relating to the due authorization, execution and delivery by the Participant of the Power Sales Contract, (iii) an executed counterpart of the Power Sales Contract, and (iv) such other documents, information, facts and matters of law as are necessary for me to render the opinions contained herein. Based upon the foregoing, I am of the opinion that: [l. The Participant is a [municipal corporation and/or political subdivision] of the State of (the "State "), duly created and validly existing under the laws of the State and duly qualified to own, operate and furnish electric service through the System.] [l. The Participant is a ,duly created and validly existing under the laws of the State of (the "State "), and duly qualified to own, operate and furnish electric service through the System.] 2. The Participant has full legal right, power and authority to enter into the Power Sales Contract and to carry out and consummate all of the transactions contemplated thereby, and the V-1 Participant has complied precedent to transactions. entering into with the provisions of applicable law which would be a condition the Power Sales Contract or carrying out and consummating such 3. Each of the Power Sales Contract, the Joint Action Agreement and the Pooling Agreement has been duly authorized, executed and delivered by the Participant and constitutes the legal, valid and binding obligation of the Participant and is enforceable under the present law of the State in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors' rights generally or usual equity principles in the event equitable remedies should be sought. 4. The Participant's obligation to make payments to UAMl'S under the Power Sales Contract is a special obligation payable solely from the revenues and other available income of the System as a cost of purchased electric energy and an operating expense of the System. The application of the revenues and other available funds of the System to make such payments is not subject to any prior lien, encumbrance or restriction. 5. [The Participant has obtained all Required Approvals] {or} [There are no Required Approvals]. 6. There is no pending or, to my knowledge, threatened, action or proceeding affecting the Participant (nor to my knowledge is there any basis therefor), which (a) purports to affect the authorization, legality, validity or enforceability of the Power Sales Contract, the Joint Action Agreement or the Pooling Agreement or (b) involves the possibility of any judgment or liability, not fully covered by insurance, which may result in any material adverse change in the business, affairs, properties or assets, or in the condition, financial or otherwise, of the System. 7. The execution, delivery and performance by the Participant of the Power Sales Contract will not conflict with or constitute a breach of or default under any agreement, indenture, bond, note, resolution or other instrument to which the Participant is a party or by which it or the properties of the System is bound or affected, or any applicable law, ruling, regulation, ordinance, judgment, order or decree to which the Participant (or any of its officers in their respective capacities as such) or its properties is subject. 8. No event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a material default or event of default under any agreement, indenture, bond, note, resolution or other instrument to which the Participant is a parry or by which it or the properties of the System is bound or affected, which breach or default would have a material adverse impact on UAWS' ownership or operation of the Project or the ability of the Participant to fully perform its obligations under the Power Sales Contract. 9. The Participant has lawful authority to fix and collect rates, fees and charges for the services provided by the System. Such rates, fees and charges for utility services provided to customers located within the corporate boundaries of the Participant are not subject to regulation by any authority of the State or the United States and have been duly and validly adopted by the Participant and are in full force and effect. V-2 10. The Participant has lawful authority to own the System and, to my knowledge, the Participant (a) has good and merchantable title to the properties comprising the System and (b) holds all permits, licenses and approvals necessary for the operation of the System. I hereby authorize [other reliance parties] and Chapman and Cutler LLP, as bond counsel, to rely on this opinion as though addressed to them. Respectfully submitted, V-3 .� i 10 ♦AR] FORM OF BRING-DOwN OPINION OF COUNSEL TO THE PARTICIPANT Utah Associated Municipal Power Systems [Address] Ladies and Gentlemen: I have acted as counsel to (the "Participant ") in connection with the Carbon Free Power Project Power Sales Contract dated as of (the "Power Sales Contract") between the Participant and Utah Associated Municipal Power Systems ("UAMPS"). I have been advised that UAMPS has made arrangements for the issuance and sale on the date hereof of its Carbon Free Power Project Revenue Bonds, Series (the "Bonds"). Pursuant to Section 902(e) of the Power Sales Contract in connection with the execution and delivery of the Carbon Free Power Project, I rendered to UAMPS an approving legal opinion, dated (the "Prior Opinion"), with respect to the Participant. In connection with the issuance and sale by UAMPS of the Bonds, I hereby reaffirm the Prior Opinion, as though it was dated the date hereof, in the form it was so rendered on [In addition to the foregoing, I have examined (i) the material describing the Participant and its electric system contained in APPENDIX A to each of the Preliminary Official Statement (together with any supplements or amendments thereto as of the date hereof, the "Preliminary Official Statement") and the Official Statement (together with any supplements or amendments thereto as of the date hereof, the "Official Statement") of UAMPS relating to the Bonds and (ii) such other documents, information, facts and matters of law as are necessary for me to render the following opinion. Based upon the foregoing, I am of the opinion that the statements and information with respect to the Participant and its electric system contained in APPENDIX A to the Preliminary Official Statement and the Official Statement were true and correct in all material respects as of the respective dates of the Preliminary Official Statement and the Official Statement and are true and correct in all material respects as of the date hereof, and no facts have come to my attention which would lead me to believe that such statements and information contained or contain any untrue statement of a material fact or omitted to state or omit to state any material fact necessary in order to make such statements, in the light of the circumstances under which they were made, not misleading; provided, however, that I express no view with respect to the tabular, financial and statistical information included therein.] I hereby authorize the reference to this opinion and to the Prior Opinion set forth under the caption, "APPROVAL OF LEGAL PROCEEDINGS," in the Official Statement. I hereby further authorize [Bond Counsel] and [other reliance parties] to rely on the Prior Opinion and on this opinion in each case as though addressed to them. Respectfully submitted, f FORM OF NOTICE OF WITHDRAWAL [Date] Utah Associated Municipal Power Systems 155 North 400 West, Suite 480 Salt Lake City, Utah 84103 Attention: General Manager General Counsel Re: Carbon Free Power Project Power Sales Contract [Ladies and] Gentlemen, Pursuant to Section 204 of the above -referenced Power Sales Contract (the "Power Sales Contract"), [name of Participant] (the "Participant") hereby gives notice of its election to withdraw from the Project. The Participant hereby acknowledges and agrees that: 1. This Notice of Withdrawal shall be effective at and as of the end of the last day of the current phase of the Licensing Period. delivering this Notice of Withdrawal, the Participant waives its right to receive any reimbursement for Development Costs previously paid by it, except as otherwise provided in the Power Sales Contract. 3. The Participant shall remain responsible for the payment of an amount equal to its Development Cost Share of all Development Costs incurred, including its Development Cost Share of the amounts necessary to repay all Bonds issued and outstanding, in each case up to the effective date of the Participant's withdrawal from the Project. 4. The Participant that shall, within twelve months of the effective date of its withdrawal, repay the amounts described in paragraph 3 above together with any interest expense on such amounts and any other charges incurred by UAMPS under the Financing Documents. 5. From and after the effective date of its withdrawal (a) the Participant's Entitlement Share shall be terminated, (b) the Participant's Representative shall have no right to participate in or vote at meetings of the Project Management Committee or VII-1 meetings of the Board with respect to the Project, and (iii) this Contract will remain in effect only with respect to the Participant's repayment obligations described in paragraph 4 above. 6. The Participant shall have no responsibility for the payment of Development Costs incurred or Bonds issued after the effective date of its withdrawal. Capitalized terms used and not otherwise defined herein have the meanings assigned to them in the Power Sales Contract. [NAME OF PARTICIPANT] Authorized Officer VII-2 FORM OF NOTICE OF REDUCTION [Date] Utah Associated Municipal Power Systems 155 North 400 West, Suite 480 Salt Lake City, Utah 84103 Attention: General Manager General Counsel Re: Carbon Free Power Project Power Sales Contract [Ladies and] Gentlemen, 'ursuant to Sectlo'��lydif the above -referenced Power Sales Contract (the "Power Sales Contract [name of Participant] (the "Participant") hereby gives notice of its election to reduce its Entitlement Share from (the "Original Entitlement Share ") to (the "Reduced Entitlement Share "). The Participant hereby acknowledges and agrees chat: 1. This Notice of Reduction shall be effective at and as of the end of the last day of the current phase of the Licensing Period. 2. The Participant shall remain responsible for the payment of an amount equal to its Development Cost Share of all Development Costs incurred, including its Development Cost Share of the amounts necessary to repay all Bonds issued and outstanding, in each case based in its Original Entitlement Share and up to the effective date of the Participant's withdrawal from the Project. 3. From and after the effective date of this Notice of Reduction, the Participant's Reduced Entitlement Share shall apply for all purposes of the Power Sales Contract, including the calculation of the Participant's Development Cost Share. Capitalized terms used and not otherwise defined herein have the meanings assigned to them in the Power Sales Contract. VIII=1 [NAME OF PARTICIPANT] Authorized Officer VIII-2 o c^-1 lD lD N N O W U z a z LL LL O z a a F- W 0 m U W O a W O a W W w LL 00 n p o CO N cai ro n i N m c s 00 m V) a y U 400 ° a Y a) z 4j} in o d• oo � � � o Ln oo r-, m 01 O Ol lD lD ° -° 00 0 00 00' io mr-q Kt m O o ° ,l tt m 00 p t� to y.. m O n ++ a) z 4j)- -Ul Ln v Ln 00 i-+ C 00 c CA rmi c r N ,U 0 OO i i m O a L +NJ aJ z V). vi ° 0 0 0 0 E E E N M d' *k I� N O (ID LD tf) O1 00 N C t�ii LD C V� m O lO w m i = y Ol �-{ O m ON m O LDm O m w m O Ln m M O LO p N N rl to m 0 C OO t N 0 C:) L Q. U °. U fl. U N N N CD Ln u Inm d 'U to OO L C 0 SEEM O C O N OS LL i N C E a Q) a C7 0` a (7 o lD o N O CD lD V1 t� o m m m N O 0) O N �n o Ct m m CD IN m w n 00 00 m Ln CrJ7 O N U., E c E m.E x E m a) a) n cn m m m � eI � ON Ln �-Ui N O O O O O L 'a Q) a o_ o_ a n 0n 0O eO � � C E V VI to i u U U J _I .J r t/? 0 O O {i m O m � lD LI') L a LD CD Ln 0 a)� CO CDN ROME*E o v U— — m O LL N Q Q 5 d O Q Q a .•1 is c 0 V} C tr? O u U L N o 0 U U a) 0� E a) +� E iv i En O U Q m O c 'a) Wow E o Ln a y a O +j 0 m D_ L 00 O L LL O U � N Qj c-i N 0 m LL t L E E •O O_ O_ d W O L L U a am o r i a) n. bA as u O Ov E C C : N E to Ln y i� m cn u 0 +' u u u p co N w J J U E D u O D_ U U LL Q U a d / a 4 \ \ § \ ru § § { \ \ / f / a 0 e § \ / s/ %/ �a /E 3 I / m 2 & _ fk \\ 0� �j ƒ* \E a \tr �00 0� C) 8* «/ 0 \f \\ ƒ\ \( o* 0% ®G ai E2 ƒ/ \ƒ /) $\ \/ \� ] t � U § / 2 / J ƒk « Co c & /t/ [o / E 0 f � " p / / §2° 0/ - { / \ \ \ E t # « / k / / ƒ� G$ 0* ua \ e E G \ « g a.m &$ u o c % cu e a i § / £ & 2 ; & E / 8 Q § m Utah Associated Municipal Power Systems Carbon Free Power Project Amended Budget & Plan of Finance February 21I 2018 This is an amended initial Budget and Plan of Finance pursuant to Section 601(c) of the Power Sales Contracts. The Project Management Committee has determined that to avoid exposing the Participants to a Net of Cost Share of $67,343,086 in Licensing Period - 1st Phase to amend the 100% Cost to $6,000,000 until additional subscription and/or funding become available. This amendment reduces the Net of Cost Share for Licensing Period - 1st Phase to $1,500,000. The Project Management Committee is fully aware that this does not provide the funding to get to a completed Construction and Operating License Application. The intent of this amended initial Budget and Plan of Finance is to allow the Project to move into the Power Sales Contract phase while limiting the maximum out of pocket liability of any Participant to their Cost Share of $1,500,000. This amendment equates to an option cost not to exceed $10 per requested kilowatt with a floor of $2.50 per requested kilowatt down from the Net of Cost Share of $115 per requested kilowatt. This amendment is anticipated to fund the Project for one year at which time the Project Management Committee will either terminate the Project or amend the Budget and Plan of Finance to allow additional Development work to proceed. If the Project Management Committee elects to continue the Project, then, upon a second amended Budget and Plan of Finance being approved by the Project Management Committee, each Participant will be noticed of such increase in the Budget and Plan of Finance and will have the right to withdraw from the Project pursuant to Section 204(a)(ii). This amended initial Budget and Plan of Finance pursuant to Section 601(c) of the Power Sales Contracts includes preliminary estimates of the information regarding the Carbon Free Power Project required by the Power Sales Contracts. This information is provided to assist prospective Participants in their evaluation of the Project in connection with their decisions to approve and execute the Power Sales Contracts. Except as indicated below, the cost estimates and time schedules set forth below are based on the information currently available to UAMPS, but are preliminary and subject to change. The estimates and schedules will be updated from time to time consistent with the provisions of the Power Sales Contracts. Section 601 (a) (i) Development Costs incurred through 3/31/2017: 100% Cost Net of Cost Share $3,069,943 $839,369 1 (v) Estimated Development Costs to the Completion of Development: 100% Cost Net of Cost Share Interim Period (FY 2018) $ 1,527,026 $ 872,360 Licensing Period —1" Phase (Max.) $6,00010001 $1,500,000 Licensing Period —1" Phase (Max.) 83,499,7642 65,843,086 Licensing Period — 2nd Phase (Prelim.) 496,303,067 496,303,067 $ 587,329,857 $ 564,518,513 Cost of Acquisition and Construction of the Initial Facilities (Preliminary Estimated Costs): Preliminary 100 % Cost Preliminary Net of Cost Share $41237,666,633 $4,212,624,715 CFPP Estimated Timeline for the Development &Construction of Initial Facilities: Start Finish # of Mos. Interim Period — FY 2018 (P.SC Executed) April 2017 March 2018 12 Licensing Period — Vt Phase (COLA Submittal) April 2018 May 2020 26 Licensing Period — 2nd Phase (COLA Issued) June 2020 June 2023 37 Construction Period (Commercial Operation Date) July 2023 November 20263 41 Price Target (2017) Estimated range: $45 to $65 per iviWh Proposed funding and financing arrangements —Licensing Period: During the Licensing Period, no revenue will be generated from the Project and major assumptions related to construction, development, licensing, and Federal support will still be in flux. As a result, obtaining long-term funding from the general capital markets will most likely be cost prohibitive. 1 This amount is the maximum amount of Development Costs that can be incurred during the first phase of the Licensing Period. Any increase in this amount requires an amendment to the Budget and Plan of Finance. z This amount is remaining estimated amount required to finishing compiling Combined Construction and Operating License Application. s The first module is anticipated to come online November 2026. All modules are anticipated to be online by September 2027, which will mark the Commercial Operation Date for the Project, as determined by the Project Management Committee. Therefore, the first sources of capital for the Development Costs of the CFPP will be cash contributions such as monies provided through DOE and NuScale cost share agreements and the APPA DEED grant. Cost sharing will occur periodically as the annual capital program is implemented, and additional funding will need to be provided through bank borrowings in the form of a Bank Line of Credit. Throughout this phase, interest will be capitalized to minimize any need for cash outlays from Participants. UAMPS will access the bank credit universe by soliciting proposals from a group of highly sophisticated banking institutions that understand the risk profile associated with extending short term loans to development -stage projects. The security for the bank loans will be the take - or -pay Power Sales Contracts between UAMPS and the Participants. UAMPS should be able to leverage its existing banking relationships and form new ones to create a syndicated bank line of credit ("LOC") with favorable terms and sizing. The primary objective of the LOC will be to create low-cost interim financing for Development Costs that can be refinanced with long-term debt at the Completion of Development and the commencement of construction. The financial products that are being considered during the Licensing Period of the Project would be as follows: Financial Products Amount Interest Rate Term Bank Line of Credit $ TBD Max Limit Bond Anticipation Note TBD DOE Cost share — COLA N/A N/A DOE Cost Share —Additional N/A N/A NuScale Cost Share — COLA N/A N/A NuScale Cost Share —Additional N/A N/A APPA Deed Grant 150,000 N/A N/A Capital Contributions — Participants N/A N/A Other $ This table will be updated from time to time during the Licensing Period. {vi) Proposed funding and financing arrangements —Construction Period: More certainty will be introduced for the Costs of Acquisition and Construction of the CFPP with the issuance of the COL, execution of a firm EPC Contract, and commencement of commercial operation of the nuclear power modules. While additional sources of capital will be available to UAMPS during this phase, fluctuating market conditions and construction risks will affect financing decisions. During the Construction Period, the goal will be to minimize interest cost by utilizing different sources of funding at different times. At this point, the bank loans from the Licensing Period will likely be nearing maximum capacity and will need to be refinanced with long term debt. Once the LOC has been reimbursed with the proceeds of long term debt, the borrowing capacity under the LOC will be restored and will become accessible to UAMPS again as a stand-by source of funding. [c? As construction continues and the capital program increases, "cash" sources from cost sharing agreements and capital contributions from CFPP Participants will continue to be available, but UAMPS will need to access the general capital markets to complete funding. Market conditions will be assessed and ongoing capital needs will either first be funded through the revolving line of credit and then refinanced with long-term debt, or funded immediately with long-term debt. The objective will be to find a balance between reducing interest cost with short term rates from the line of credit, and locking in long term rates at attractive levels. The primary source of long-term capital for the Costs of Acquisition and Construction of the CFPP will be fixed rate tax-exempt municipal bonds. However, depending on market conditions at the time of issuance, DOE Loan guarantees and variable rate debt will also be considered as part of an optimized portfolio of debt to reduce the overall interest cost of the CFPP. The financial products that are being considered during this phase of the Project would be as follows: Financial Project Amount Interest Rate Term Tax Exempt Municipal Bonds $ TBD 40 year Variable Rate Demand Obligations TBD 40 year DOE Loan Guarantees TBD 30 year Bank Line of Credit TBD Max Limit Bond Anticipation Note TBD LT Bond Additional DOE Cost Share N/A N/A Additional NuScale Cost Share N/A N/A Capital Contributions N/A N/A Other This table is anticipated to be completed at the time of Completion of Development and prior to the beginning of the Construction Period. (vii) Other information as required by the Project Management Committee: As the project moves forward, the preliminary numbers will be further refined and presented to the PMC for approval. The enclosed chart identifies the process for revising the Budget and Plan of Finance. 0 EXECUTIVE SUMMARY OF CARBON FREE POWER PROJECT POWER SALES CONTRACTS OVERVIEW The Power Sales Contracts for the Carbon Free Power Project are based upon the power sales contracts for UAMPS' other generating projects, and incorporate many of the same terms and provisions. New provisions have been added to address CFPP-specific items, including the management of and funding for the Development Work on the Project to the point in time when development is complete and the CFPP can move to construction. The Power Sales Contracts have been drafted by UAMPS legal counsel under the supervision of the Project Management Committee, with additional legal review by the Legal Committee, which included PMC Representatives, city attorneys and outside counsel. BASIC TERMS AND PROVISIONS "Participants": The power purchasers that participate in the Project under the Power Sales Contracts (PSCs) with UAMPS. "Project" or "CFPP": The Carbon Free Power• Project. "Entitlement Share": A specified percentage share of the output of the Project. Passes through benefits and burdens of ownership of the Project: Benefit: Specified share of Project Output at cost for the life of the Project, Burden: Obligation to pay a percentage of all ownership, operating and decommissioning costs, including debt service and contract obligations on a "take -or pay" basis, and Burden: Observing contract covenants and risk of Entitlement Share step-up. PSC terms that support Project operations and financings include: "Take -or -pay" payment obligation, the Participants are obligated to pay the amounts due under the PSCs regardless of whether the Project is completed, operable, operating, damaged, destroyed or terminated, -1- Payments made solely from each Participant's electric system revenues and as an operating expense of the Participant's electric system, Rate covenant: Participant agrees to charge and collect rates for electric service that produce revenues sufficient to meet its payment obligations under the PSC and other obligations payable from such revenues, and Step-up obligation, non -defaulting Participants can be required to take a portion of a defaulting Participant's Entitlement Share, subject to a maximum increase in the Entitlement Share over the term of the PSCs of 25%. PROJECT MANAGEMENT COMMITTEE (PMC) The Project Management Committee is established by the Power Sales Contracts and the DAMPS Joint Action Agreement. The PMC has complete and comprehensive decision -making authority over the Project and actions to be taken by UAMPS, including: Approving the Budget and Plan of Finance and all revisions, updates and amendments to it Approving the Development Agreement and all Project Agreements, Reviewing the results of each run of the Economic Competitiveness Test, Reviewing and authorizing all fmancings and Bond issues, Reviewing and determining whether and when to submit the COLA, Determining whether and when Completion of Development has occurred, including the feasibility of the Project, or whether the Project should be terminated or development be suspended, and If the Project proceeds to the Construction and Operating Periods, supervising the construction and operation %J the Project. Certain decisions of the PMC are required to be made by aSuper-Majority Vote (75% by number and Entitlement Share). PROJECT PERIODS AND PHASES Target Effective Date of PSCs is April 1, 2018 (PMC to determine). Licensing_Period: begins on Effective Date of PSCs and extends to Completion of Development, with two separate phases: -2- Phase l: Effective Date to completion of Construction and Operating License Application (COLA), and Phase 2: Submission of COLA to the NRC to the receipt of Construction and Operating License (COL) from the NRC and the PMC's determination that Completion of Development has occurred. Construction Period: begins upon Completion of Development and continues tlu•ough the construction of the Project to its Commercial Operation Date (COD). Operating Period: COD to end of operating life of the Project. Decommissioning Period: Project retirement to complete decommissioning. DEVELOPMENT WORK DURING THE LICENSING PERIOD The Development Work includes the following activities during the Licensing Period: Estimating, design and engineering work under the Development Agreement with Fluor and NuScale, and analyzing each run of the Economic Competitiveness Test, Completion of definitive Project Agreements, including the EPC contract, operating agreement, fuel, water supply and transmission agreements, Contracting with prospective Participants, co -owners and third -party power purchasers to achieve full subscription for all Project Output, Preparation, submission and processing of the COLA, Obtaining all required permits and approvals for the Project, and Updates to the Budget and Plan of Finance, finalization fail Project costs. BUDGET AND PLAN OF FINANCE The Budget and Plan of Finance for initial phase of the Licensing Period is approved by PMC and Participants' governing bodies at the same time as the PSCs are approved. The Budget and Plan of Finance is updated and approved by the PMC and Participants' governing bodies before the second phase of the Licensing Period. "Definitive" (i.e., final and complete) Budget and Plan of Finance is approved by PMC as a part of its determination that Completion of Development has occurred. ' Completion of Development would occur only if: -3 - The NRC issues the COL, UAMPS completes the negotiation of a final ETC contract for the construction of the Project, and The PMC determines the CFPP to be feasible. The contents of the Budget and Plan of Finance include: The estimated total Development Costs to the Completion of Development, The initial Budget and Plan of Finance and the updated Budget and Plan of Finance for the second phase of the Licensing Period, will include an estimate of and a cap on the Development Costs that can be incurred during each phase, The estimated total Cost of Acquisition and Construction, The estimated Commercial Operation Date, A pro forma analysis of the expected costs of constructing, financing and operating the CFPP, including a target price for Project Output, The proposed funding and financing arrangements for: Development Costs during the Licensing Period, and Cost of Acquisition and Construction during the Construction Period. PARTICIPANT WITHDRAWAL/REDUCTION RIGHTS DURING THE LICENSING PERIOD During the Licensing Period, Participants may withdraw from the Project or reduce their Entitlement Shares by action of their governing bodies: If the PMC approves an amendment to the Budget and Plan of Finance that increases the maximum amount of Development Costs that may be incurred during either phase of the Licensing Period, When the PMC approves the updated Budget and Plan of Finance for the second phase of the Licensing Period, When the PMC approves the definitive Budget and Plan of Finance at the Completion of Development, If withdrawals or Entitlement Share reductions by other Participants cause the Participant's share of Development Costs to increase, and -4- If the Participant's governing body determines to withdraw/reduce for any reason. Participant withdrawal terms include: Withdrawals are effective on the last day ofthen-current phase of the Licensing Period, A withdrawing Participant has no liability for the repayment of its Entitlement Share of Development Costs incurred or financings undertaken after the effective date of its withdrawal, and A withdrawing Participant remains liable for the repayment of its Entitlement Share of Development Costs incurred or financings undertaken before the effective date of its withdrawal: Repayment must be made within 12 months after the effective date of a Participant's withdrawal FINANCING FOR DEVELOPMENT COSTS DURING THE LICENSING PERIOD Financing arrangements during the Licensing Period include: Amounts available under cost -sharing agreements, grants, etc., Bank facilities, and Bond anticipation notes. PMC determines whether to finance all Development Costs or to bill Participants for some part oI Development Costs, Development Cost financings would be repaid with long-term Bonds issued by DAMPS after the Completion of Development has occurred. If all development and construction costs are financed as presently expected, Participants would not be required to make payments for debt service until after the commercial operation date of the CFPP. FINANCING FOR COST OF ACQUISITION AND CONSTRUCTION After Completion of Development has occurred, a range of financing instruments are permitted under the PSCs to finance the Cost of Acquisition and Construction of the Project: Bonds, both taxable and tax-exempt, with fixed or variable interest rates, ' DOE -guaranteed loan: -5- Will not finance all of the Cost of Acquisition and Construction, and The DOE-fmanced portion of the Project is required to be mortgaged to secure the guaranteed loan, Commercial paper, Bank facilities, and Special Obligations payable from CFPP revenues other than payments made by the Participants under the PSCs. Interest on all fmancings would be capitalized to the estimated commercial operation date of the Project. The PMC determines the types, timing and amounts of all fmancings. Bonds would be issued and loans would be secured under the Financing Documents. LEGAL SUMMARY OF POWER SALES CONTRACTS A detailed summary of the teams and provisions of the Power Sales Contracts has been provided to the Participants with this Executive Summary. -6- l RESOLUTION NO. A RESOLUTION AUTHORIZING AND APPROVING THE CARBON FREE POWER PROJECT POWER SALES CONTRACT WITH UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS; THE INITIAL BUDGET AND PLAN OF FINANCE FOR THE PROJECT; AND RELATED MATTERS. WHEREAS, Truckee Donner Public Utility District, California (the "Participant") is a member of Utah Associated Municipal Power Systems ("UAMPS") pursuant to the provisions of the Utah Associated Municipal Power Systems Amended and Restated Agreement for Joint and Cooperative Action, as amended (the "Joint Action Agreement"); WHEREAS, one of the purposes of UAMPS under the Joint Action Agreement is the acquisition and construction of electric generating, transmission and related facilities in order to secure reliable, economic sources of electric power and energy for its members; WHEREAS, UAMPS proposes to acquire and construct a nuclear generating facility plant known as the Carbon Free Power Project (the "Project") to be located at a site within the Idaho National Laboratory near the City of Idaho Falls, Idaho; WHEREAS, the Governing Body has reviewed (or caused to be reviewed on its behalf) certain descriptions and summaries of the Project, the Power Sales Contract and the Project Agreements ("Project Agreements" and other capitalized terms used and not defined herein shall have the meanings assigned to them in the Power Sales Contract), and representatives of the Participant have participated in discussions and conferences with UAMPS and others regarding the Project and have received from UAMPS all requested information and materials necessary for the decision of the Governing Body to authorize and approve the Power Sales Contract; WHEREAS, the Participant acknowledges that the obligation of the Participant to make the payments provided for in the Power Sales Contract will be a special obligation of the Participant and an operating expense of the Participant's electric system, payable from the revenues and other available funds of the electric system, and that the Participant shall be unconditionally obligated to make the payments required under the Power Sales Contract whether or not the Project or any portion thereof is acquired, constructed, completed, operable or operating and notwithstanding the suspension, interruption, interference, reduction or curtailment of the output thereof for any reason whatsoever; WHEREAS, the Governing Body has reviewed (or caused to be reviewed on its behalf) the initial Budget and Plan of Finance for the Project prepared by UAMPS setting forth, among other things, preliminary estimates of the Development Costs, Cost of Acquisition and Construction, the estimated timeline for the development and construction of the Project, the estimated target price range for Project output, and now desires to approve the initial Budget and Plan of Finance; and TDPUD Authorizing Resalution.Rev 8706715 WHEREAS, the Participant now desires to authorize and approve the Power Sales Contract; y Now, THEREFORE, BE IT RESOLVED by the Governing Body of Truckee Donner Public Utility District, California, as follows: Section T Approval of Power Sales Contract and Budget and Plan of Finance; Entitlement Share. (a) The Power Sales Contract, in substantially the form attached hereto as Annex A. is hereby authorized and approved, and the President is hereby authorized, empowered and directed to execute and deliver the Power Sales Contract on behalf of the Participant, and the Clerk is hereby authorized, empowered and directed to attest and countersign such execution and to affix the corporate seal of the Participant to the Power Sales Contract, with such changes to the Power Sales Contract from the form attached hereto as Annex A as shall be necessary to conform to the Participant's legal status, to complete the form of the Power Sales Contract or to correct any minor irregularities or ambiguities therein and as are approved by the President, his execution thereof to constitute conclusive evidence of such approval. (b) The initial Budget and Plan of Finance attached hereto as Annex B is hereby approved. (c) An Entitlement Share representing up to 4,000 kW of capacity, as such capacity amount may be rounded upon the approval of the Project Management Committee and the Participant's Representative pursuant to the Power Sales Contract to provide a whole number of small modular reactors is hereby authorized and approved. Section 2. Participant's Representative. (a) The appointment of Steve Hollabaugh as the Participant's Representative to UAMPS and of Joe Horvath as alternate Representatives is hereby confirmed. (b) Such Representative (or, in his or her absence, such alternate(s)) is hereby delegated full authority to (i) approve any appendix to the Pooling Agreement between UAMPS and the Participant that may be necessary or desirable in connection with the utilization of the Participant's Entitlement Share, and (ii) act on all matters that may come before the Project Management Committee established by the Power Sales Contract, and shall be responsible for reporting regularly to the Governing Body regarding the activities of the Project Management Committee; provided that the Representative shall not deliver a Notice of Withdrawal or a Notice of Reduction under the Power Sales Contract without prior consultation with, and prior approval from, the Governing Body. Section 3. Compliance with Tax Covenants. The Participant agrees in the Power Sales Contract that it will apply all of the electric power and energy acquired under the Power Sales Contract to a Qualified Use and that it will not take or omit to take any action which could adversely affect the Tax Status of any Bond or Bonds theretofore issued or thereafter issuable by UAMPS. In furtherance of that agreement, the Governing Body of the Participant hereby agrees that it will observe and comply with such instructions as may be provided from time to time by UAMPS with respect to the Qualified Use of the electric power and energy acquired under the Power Sales Contract. -2- Section 4. Further Authority. (a) The President and the Clerk are hereby authorized, empowered and directed to (i) execute the Certificate of the Participant in substantially the form attached as Exhibit III to the Power Sales Contract and to deliver the same to DAMPS, and (ii) from time thereafter and upon the request of DAMPS, execute the Bring -Down Certificate of the Participant in substantially the form attached as Exhibit IV to the Power Sales Contract and to deliver the same to DAMPS. (b) The Participant's legal counsel is hereby authorized, empowered and directed to (i) execute the Opinion of Counsel to the Participant in substantially the form attached as Exhibit V to the Power Sales Contract and to deliver the same to DAMPS, and (ii) from time thereafter and upon the request of DAMPS, execute the Bring -Down Opinion of Counsel to the Participant in substantially the form attached as Exhibit VI to the Power Sales Contract and to deliver the same to DAMPS. Section S. Miscellaneous; Effective Date. (a) This resolution shall be and remain irrepealable until the expiration or termination of the Power Sales Contract in accordance with its terms. (b) All previous acts and resolutions in conflict with this resolution or any part hereof are hereby repealed to the extent of such conflict. (c) In case any provision in this resolution shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. (d) This resolution shall take effect immediately upon its adoption and approval. (e) The Utah Associated Municipal Power Systems Amended and Restated Agreement for Joint and Cooperative Action dated as of March 20, 2009 and all amendments thereof and supplements thereto (the "Joint Action Agreement") is hereby authorized, approved, ratified and confirmed, and the officers of and attorney for the Participant authorized above are hereby authorized and directed to execute and deliver the Joint Action Agreement for and on behalf of the Participant. -3- ADOPTED AND APPROVED tills day of , 2018. r ATTEST: Clerk [SEAL] T'UCKEE DONNER PUBLIC UTILITY DISTRICT, CALIFORNIA President -4- ANNEX A [Attach Power Sales Contract] A-1 Exit) [Attach Budget and Plan of Finance] B-1 N 24 CERTIFICATE OF PARTICIPANT v STATE OF CALIFORNIA ) ) COUNTY OF NEVADA ) The undersigned hereby certify that they are the President and Clerk of Truckee Donner Public Utility District, California (the "Participant"), a member of Utah Associated Municipal Power Systems ("UAMPS"), and that as such they are authorized to execute this Certificate on behalf of the Participant and hereby certify as follows: 1. This Certificate has been executed pursuant to Section 902(e) of the Carbon Free Power Project Power Sales Contract, dated as of April 1, 2018 (the "Power Sales Contract"), between the Participant and UAMPS, in connection with the execution and delivery of the Power Sales Contract. Capitalized terms used and not otherwise defined herein have the meanings assigned to them in the Power Sales Contract. 2. The Participant is a public utility district duly created and validly existing under the laws of the State of California, and is governed by a Board of Directors (the "Governing Body I)) composed of five (5) members. 3. Attached hereto as Exhibit A is a true, complete and correct copy of a resolution authorizing the execution and delivery of the Power Sales Contract and related matters (the "Contract Resolution "). The Contract Resolution was duly adopted by a majority of the Governing Body present and voting at a [regular/special] public meeting of the Governing Body held on , 2018, at which a quorum was present and acted throughout, all in accordance with law and applicable procedural rules of the Governing Body. The Contract Resolution is in fall force and effect and has not been amended, modified, repealed or supplemented. 4. The names of the President and the Clerk authorized to execute and deliver the Power Sales Contract on behalf of the Participant are as follows: NAME OFFICE Tony Laliotis President Michael D. Holley Clerk 2018, meeting of the Governing Body in connection with the authorization of the Power Sales Contract was open to the public at all times and was duly called, noticed and held in conformity with applicable laws of the State and procedural rules of the Governing Body. {00724227.DOCX 1 }Certificate ofTDPUD 4812-6356-7967 v.2.docx 870671 6. (a) No petition was filed with the Participant or any of its officers seeking to refer the Contract Resolution to the electors of the Participant in accordance with the provisions of state laws and (b) no litigation has been instituted, is pending or has been threatened to require a referendum election on the Contract Resolution. 7. The Participant owns and operates an electric utility system (the "System distributes and furnishes electric energy to consumers located within the established service area of the System. 8. The Participant has previously executed the Utah Associated Municipal Power Systems Amended and Restated Agreement for Joint and Cooperative Action dated as of March 20, 2009 and all amendments thereof and supplements thereto (the "Joint Action Agreement") and that certain Power Pooling Agreement (the "Pooling Agreement") between the Participant and UAMPS relating to the power pool administered by DAMPS. The Joint Action Agreement and the Pooling Agreement are each in fall force and effect and constitute the legal, valid and binding agreements of the Participant. 9. Steve Hollabaugh has been duly appointed by the Governing Body as the Participant's representative to UAMPS. 10. The representations and warranties of the Participant in Section 901(a) of the Power Sales Contract are true and correct on and as of the date of this certificate. 11. The Participant will use all of the electric energy from its Entitlement Share in a Qualified Use (as defined in the Power Sales Contract). 12. The information provided by the Participant to DAMPS pursuant to Section 902(b) and (c) of the Power Sales Contract and attached as EXHIBIT II thereto with respect to the Participant and the System is true, correct and complete. The Participant has duly authorized DAMPS to use such information in connection with the preparation of an official statement of DAMPS with respect to the bonds to be issued to provide financing for the costs of acquisition and construction of the Project and to provide such information to interested parties. Dated: [Seal] TRUCKEE DONNER PUBLIC UTILITY DISTRICT, I� CaLiFORrrIa President Clerk {00724227.DOCX 1 }-2- E (IHBIT A [Attach Executed Contract Resolution] {oonazz�.00cx 1 }A-1 Louis A. Basile Aparna L. Reddy Kelley R. Carroll*t , Peter H. Cuttitta* / �'; �� ji� 1 �✓ � Steven Gross* Brian C.. Hanley* P O R Y E R S I M O N mes L. Porter, Jr.* A PROFESSIONAL CORPORATION James E. Simon Ravn R. Whitington* April 15 2018 Utah Associated Municipal Power Systems 155 North 400 West, Suite 480 Salt Lake City, Utah 84103 Ladies and Gentlemen: Stephen C. Lieberman, 1941-2016 Dennis W. De Cuir, A Law Corporation, Of Counsel t Certifred Specialist in Estate Planning, Trust & Probate Law *Also licensed in Nevada I have acted as counsel to Truckee Donner Public Utility District (the "Participant") in connection with the Carbon Free Power Project Power Sales Contract, dated as of April 1, 2018 (the "Power Sales Contract"), between the Participant and Utah Associated Municipal Power Systems ("UAMPS"). Pursuant to the Power Sales Contract, UAMPS has undertaken the Project and has sold all of Electric Power and Electric Energy and Environmental Attributes (if any) of the Project to the Participant and others that have executed Power Sales Contracts with UAMPS. This opinion is being delivered to you pursuant to Section 902(e) of the Power Sales Contract in connection with the execution and delivery of the Power Sales Contract. Capitalized terms used and not defined herein have the meanings assigned to such terms in the Power Sales Contract. As counsel to the Participant, I have examined (i) those documents relating to the existence, organization and operation of the Participant and its electric utility system (the "System "), (ii) all resolutions and proceedings of the Participant relating to the due authorization, execution and delivery by the Participant.of the Power Sales Contract, (iii) an executed counterpart of the Power Sales Contract, and (iv) such other documents, information, facts and matters of law as are necessary for me to render the opinions contained herein. Based upon the foregoing, I am of the opinion that: 1. The Participant is a public utility district duly created and validly existing under the laws of the State of California (the "State "), and duly qualified to own, operate and furnish electric service through the System. 2. The Participant has full legal right, power and authority to enter into the Power Sales Contract and to carry out and consummate all of the transactions contemplated thereby, and the Participant has complied with the provisions of applicable law which would be a condition precedent to entering into the Power Sales Contract or carrying out and consummating such transactions. 3. Each of the Power Sales Contract, the Joint Action Agreement and the Pooling {oonin�.00c i } TRUCKEE 4Q2Q0 Truckee Airport Road, Truckee, California 961b I phone {53Q) 5$7-2QQ2 fax {53Q) 587-I 316 I r,HDE CITY - I'.Ei�I� Page 2 of 3 April 1, 2018 Agreement has been duly authorized, executed and delivered by the Participant and constitutes the legal, valid and binding obligation of the Participant and is enforceable under the present law of the State in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors' rights generally or usual equity principles in the event equitable remedies should be sought. 4. The Participant's obligation to make payments to DAMPS under the Power Sales Contract is a special obligation payable solely from the revenues and other available income of the System as a cost of purchased electric energy and an operating expense of the System. The application of the revenues and other available funds of the System to make such payments is not subject to any prior lien, encumbrance or restriction. 5. There are no Required Approvals. 6. There is no pending or, to my knowledge, threatened, action or proceeding affecting the Participant (nor to my knowledge is there any basis therefor), which (a) purports to affect the authorization, legality, validity or enforceability of the Power Sales Contract, the Joint Action Agreement or the Pooling Agreement or (b) involves the possibility of any judgment or liability, not fully covered by insurance, which may result in any material adverse change in the business, affairs, properties or assets, or in the condition, financial or otherwise, of the System. 7. The execution, delivery and performance by the Participant of the Power Sales Contract will not conflict with or constitute a breach of or default under any agreement, indenture, bond, note, resolution or other instrument to which the Participant is a parry or by which it or the properties of the System is bound or affected, or any applicable law, ruling, regulation, ordinance, judgment, order or decree to which the Participant (or any of its officers in their respective capacities as such) or its properties is subject. 8. No event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a material default or event of default under any agreement, indenture, bond, note, resolution or other instrument to which the Participant is a parry or by which it or the properties of the System is bound or affected, which breach or default would have a material adverse impact on UAMPS' ownership or operation of the Project or the ability of the Participant to fully perform its obligations under the Power Sales Contract. 9. The Participant has lawful authority to fix and collect rates, fees and charges for the services provided by the System. Such rates, fees and charges for utility services provided to customers located within the corporate boundaries of the Participant are not subject to regulation by any authority of the State or the United States and have been duly and validly adopted by the Participant and are in full force and effect. 10. The Participant has lawful authority to own the System and, to my knowledge, the Participant (a) has good and merchantable title to the properties comprising the System and (b) holds all permits, licenses and approvals necessary for the operation of the System. {00711717.Doc i } Page 3 of 3 April I, 2018 The opinions expressed herein are limited to those expressly stated and no other opinions may be implied. The opinions expressed herein are based only on the laws of the State of California in effect as of the date of this opinion and in all respects are subject to and may be limited by future legislation, as well as developing case law. I undertake no duty to advise you of the same. This letter is furnished by me as General Counsel to the Participant. No attorney - client relationship has existed or exists between me and you in connection with the transactions provided for in the Power Sales Contract or by virtue of this letter. This letter, and the opinions provided herein, are delivered to you solely as required by Power Sales Contract and are not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person, except as set forth herein, without my prior written consent. I hereby authorize Chapman and Cutler LLP, as bond counsel, to rely on this opinion as though addressed to them. Respectfully submitted, PORTER SIMON Professional Corporation STEVEN C. GROSS gross(..,portersimon. com cc: Truckee Donner Pubic Utility District