RPS Bidders Workshop May 11, RPS Bidders Workshop Guidance for Inputs to PPA May 11, 2007

RPS Bidders Workshop May 11, Cover Sheet Contact Information for Parties Reference for key contract information New Generation Facility, Section 3.9 Credit and Collateral Requirements, Sections 8.2 and 8.4 No Fault Termination provisions, Sections 10.1(a) and (b) Production Tax Credit (“PTC”)/Investment Tax Credit (“ITC”) termination, Section 10.1(c). Confidentiality, Section 10.7 Article One: Definitions Article Two: Governing Terms and Term Cover Sheet & Articles One and Two

RPS Bidders Workshop May 11, No ModificationPG&E PPA Reference Bid Price CPUC Approval Article One Definitions, “Bid Price” Article One Definitions, “CPUC Approval” Green AttributesArticle One Definitions, “Green Attributes,” and Section 3.2 Green Attributes Market Price Referent Contract Term Article One Definitions, “Market Price Referent” Delivery Term options in Section 3.1(c) SEP Awards and ContingenciesSection 10.1(a) and (b) CEC CertificationSection 10.2(b) and Article One Definitions, “Eligible Renewable Energy Resource” AssignmentSection 10.6 ConfidentialitySections 10.7 and 10.8 Applicable LawSection These terms are highlighted in the online versions of the PPAs (see Non-Modifiable Standard Terms & Conditions

RPS Bidders Workshop May 11, Section 3.1(a) – Product –Select PPA for As-Available or for Baseload, Peaking, or Dispatchable Section 3.1(c) – Delivery Term –Select 10, 15, or 20 contract years –Other is allowed, but must justify to CPUC Section 3.1(d) – Delivery Point –PPA set up for NP15 in CAISO –Mark up PPA for delivery outside of NP15 Article Three: Obligations and Deliveries

RPS Bidders Workshop May 11, Section 3.1(e) – Contract Quantity –Enter the expected annual energy output –For As-Available, also enter % of Contract Quantity guaranteed over 24 month rolling period Example: for a 70% annual guarantee, enter 140% Section 3.1(f) – Contract Capacity –Enter the maximum capacity available for delivery Section 3.1(h) – Interconnection Facilities –Enter the interconnection point (substation or transmission line) Article Three: Obligations and Deliveries (continued)

RPS Bidders Workshop May 11, Section 3.4(b) – EIRP Requirements (for As- Available only; does not apply to Baseload) –Pick the applicable paragraph depending on EIRP eligibility as of execution date Section 3.9(c)(iii) – Guaranteed Project Milestones –Enter the Guaranteed Construction Start Date and the Guaranteed Commercial Operation Date Up to 180 day allowance for early COD Up to 90 day delay for Force Majeure Up to 60 day cure period for missing milestones Article Three: Obligations and Deliveries (continued)

RPS Bidders Workshop May 11, Section 4.1 – Contract Price –For each Contract Year, enter the price per MWh Price can be flat or vary by Contract Year Section 4.3 (As-Avail) or 4.4 (Baseload) – Monthly TOD Payment –Sum of each hour’s Scheduled Energy times the Contract Price times the TOD Factor –Example: 3-4 pm on a Tuesday in June 50 MW scheduled * $80/MWh contract price * TOD factor = $8148 Article Four: Compensation; Monthly Payments

RPS Bidders Workshop May 11, Section 4.6 (As-Avail) and 4.7 (Baseload) – Imbalance Energy –If in EIRP (As-Avail), all imbalances between Scheduled and Delivered Energy are settled between Seller and CAISO –If not in EIRP (As-Avail and Baseload), true-up between seller and buyer based on price differences for Imbalance Energy and the TOD- adjusted Contract Price –If Delivered > Scheduled (defined as Positive Imbalance Energy) and if the Imbalance Price > (Contract Price * TOD factor), Buyer’s monthly payment to Seller is reduced by the amount of the Imbalance times the price difference (Imbalance Price – Contract Price * TOD) –If Delivered < Scheduled (defined as Negative Imbalance Energy) and if the Imbalance Price < (Contract Price * TOD factor), Buyer’s monthly payment to Seller is reduced by the amount of the Imbalance times the price difference (Imbalance Price – Contract Price * TOD) Article Four: Compensation; Monthly Payments (continued)

RPS Bidders Workshop May 11, Example: Positive Imbalance Energy –50 MWh scheduled, 55 MWh delivered –Contract Price is $80/MWh, TOD factor is –Applicable Imbalance Price is $200/MWh –Buyer’s monthly payment to Seller is reduced by the amount of the Imbalance times (Imbalance Price – Contract Price * TOD) (55 MWh – 50 MWh)*($200/MWh - $80/MWh*2.037)= $ –If Imbalance Price < $80/MWh*2.037, then no true up Example: Negative Imbalance Energy –50 MWh scheduled, 45 MWh delivered –Contract Price is $80/MWh, TOD factor is –Applicable Imbalance Price is $100/MWh –Buyer’s monthly payment to Seller is reduced by the amount of the Imbalance times (Imbalance Price – Contract Price * TOD) (45 MWh – 50 MWh)*($100/MWh - $80/MWh*2.037)= $ –If Imbalance Price > $80/MWh*2.037, then no true up Article Four: Compensation; Monthly Payments (continued)

RPS Bidders Workshop May 11, Performance Adjustments for Baseload/Peaking PPA only Section Capacity Factor Section Performance Adjustment –For each of the TOD periods (Super-Peak, Shoulder, Night) within each of the months of Period A (June, July, August, and September), performance measured and settled monthly –For each of the TOD periods in Period B (Oct-Feb) and Period C (Mar- May), performance measured and settled monthly, but then trued up on an aggregated basis for each Period B or C Article Four: Compensation; Monthly Payments (continued)

RPS Bidders Workshop May 11, The first table (from Baseload Section 4.5) shows minimum required capacity factors (including maintenance allowance) for each period The second table (from Baseload Section 4.6) shows the % adjustment for each 1% that the actual capacity factor is below the minimum Performance Adjustments for Baseload/Peaking PPA Monthly Period1. Super-Peak2. Shoulder3. Night A.June – September95%90%80% B.Oct.– Dec.;Jan.&Feb.90%85%65% C.Mar.– May80%75%65% Performance Requirements: Capacity Factor For Each Period Monthly Period1. Super-Peak2. Shoulder3. Night A.June – September B.Oct.– Dec.,Jan.&Feb C.Mar.– May Performance Adjustment Factors For Each TOD Period

RPS Bidders Workshop May 11, Example: Super-Peak period in June –10 MW Contract Capacity, 1554 MWh Delivered –176 hours in TOD period, 8 Seller Excuse Hours –Contract Price $80/MWh, TOD factor Capacity Factor = Delivered Energy / (Contract Capacity x (Hours in TOD Period minus Seller Excuse Hours)) –= 1554 MWh / (10 MW x (176 hours – 8 hours)) = 92.5% Maximum Performance Adjustment = Contract Price x TOD Factor x x Contract Capacity x (Hours in applicable TOD Period minus Seller Excuse Hours) –= $80/MWh x x x 10 MW x (176 hours – 8 hours) = $273,773 Performance Adjustment = (Performance Requirement - Capacity Factor) x Performance Adjustment Factor x Maximum Performance Adjustment –= (95% %) x 3.00 x $273,773 = $20,533 Performance Adjustments for Baseload/Peaking PPA (cont’d)

RPS Bidders Workshop May 11, Payments and Performance Adjustments for Dispatchable PPA Section 4.10 –Capacity Payments based on Time of Availability (TOA) Factor and actual availability –Monthly Capacity Payment = Capacity Price x TOA Factor x Contract Capacity For months with minimum of 90% and 95% availability, 4% payment reduction for each 1% that actual is below minimum For months with minimum of 70% availability, 1.5% payment reduction for each 1% that actual is below minimum

RPS Bidders Workshop May 11, An outage resulting from Force Majeure that prevents the Project from delivering at least 60% of Contract Quantity to the Delivery Point for a consecutive 12 month period The failure to meet either of the “Guaranteed Project Milestones” after the 60-day cure period has expired For As-Available Products, the failure to achieve the Guaranteed Energy Production requirement For Baseload and Peaking Products, Capacity deficiency or Capacity Factor deficiency –Net Rated Output Capacity is less than specified amount at COD or specified percent after COD –Capacity Factor is less than specified percent for 12 consecutive months (reasons other than Seller Excuse Hours) For Dispatchable Products only, Availability Factor deficiency Article Five: Event of Default

RPS Bidders Workshop May 11, Article Six: Payment Article Seven: Limitations Article Eight: Credit and Collateral Requirements Article Nine: Governmental Charges Articles Six through Nine

RPS Bidders Workshop May 11, Article Ten: Miscellaneous –SEP Awards and Contingencies –Production Tax Credit (“PTC”)/Investment Tax Credit (“ITC”) termination –Representations, Warranties and Covenants –Indemnities –Assignment –Confidentiality –Audit –Insurance –Access to Financial Information Article Ten

RPS Bidders Workshop May 11, Article Eleven: Conditions Precedent Article Twelve: Dispute Resolution Article Thirteen: Notices Articles Eleven through Thirteen

RPS Bidders Workshop May 11, Appendix IForm of Letter of Credit Appendix IIInitial Energy Delivery Date Confirmation Letter Appendix IIIMilestones Schedule Appendix IVProject Description Including Description of Site Appendix VForm of Certification Appendix VICommercial Operation Certification Procedure and Procedure for Subsequent Capacity Terms Appendix VII Form of Monthly Progress Report Appendix VIIIOutage Notification Form Appendix IXCounterparty Notification Requirements for Outages and Generation Schedules. Appendix XResource Adequacy Appendices