1 q. and professional 2 background

Attachment WAG-RR--R-6 Page 4 of 19

Docket No. 51802

Southwest Power Pool, Inc. Rebuttal Testimony of Charles Locke Docket No. 49831

1 Q. PLEASE SUMMARIZE YOUR EDUCATIONAL AND PROFESSIONAL

2 BACKGROUND.

3 A. I received a Bachelor of Science Degree in Economics from Southwest Missouri State

4 University and a Master of Arts Degree in Economics from the University of Missouri-

5 Kansas City. Prior to being named Director of Transmission Policy and Rates in August

6 2017, I served as a Lead Regulatory Analyst at SPP from 2014 until 2017. Before

7 working at SPP, I was employed by Kansas City Power & Light Company for

8 approximately thirty-three years in a number of managerial and analytical positions,

9 primarily in the areas of state and federal regulatory affairs.

10 Q. HAVE YOU TESTIFIED BEFORE ANY REGULATORY COMMISSIONS?

11 A. Yes. I have provided testimony to the Federal Energy Regulatory Commission

12 ("FERC"), the Public Utilities Commission of Texas,1 the Missouri Public Service

13 Commission, and the Kansas Corporation Commission.

14 Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY?

15 A. In my testimony, I will address requirements for reporting Network Load in SPP. In

16 doing so, I will address certain assertions made in the Direct Testimony of Mr. Jeffry

17 Pollock ("Mr. Pollock on behalf of Texas Industrial Energy Consumers ("TIEC")).

18 II. NETWORK LOAD REPORTING REOUIREMENTS

19 Q. WHAT IS NETWORK LOAD? 20 21 A. In the SPP Tariff, Network Load is defined as: 22 23 The load that a Network Customer designates for Network Integration 24 Transmission Service under Part III of the Tariff. The Network 25 Customer's Network Load shall include all load served by the output of 26 any Network Resources designated by the Network Customer. A Network

See Direct Testimony of Charles Locke, Public Utility Commission of Texas Case No. 48400.

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1 Customer may elect to designate less than its total load as Network Load 2 but may not designate only part of the load at a discrete Point of Delivery. 3 Where an Eligible Customer has elected not to designate a particular load 4 at discrete points of delivery as Network Load, the Eligible Customer is 5 responsible for making separate arrangements under Part II of the Tariff 6 for any Point-To-Point Transmission Service that may be necessary for 7 such non-designated load.2 8 9 Q. WHAT IS SPP NETWORK INTEGRATION TRANSMISSION SERVICE?

10 A. Network Integration Transmission Service ('NITS") is described in Section 28.3 of the

11 SPP Tariff as the provision of "firm transmission service over the [SPPI Transmission

12 System to the Network Customer for the delivery of capacity and energy from its

13 designated Network Resources to service its Network Loads on a basis that is comparable

14 to the Transmission Owner(s') use of the Transmission System to reliably serve Native

15 Load Customers."3

16 Q. DOES SPS TAKE SPP NITS TO SERVE ITS NETWORK LOAD?

17 A. Yes.

18 Q. HOW IS NETWORK LOAD CALCULATED?

19 A.

20

21

In Order No. 888,4 the FERC set forth its baseline rule regarding calculation of Network

Load. FERC stated that "[blecause network service is load based, it is reasonable to

allocate costs on the basis of load for purposes of pricing network service."5 FERC

2 See SPP Tariff at Part I, Section 1 "N - Definitions".

3 See SPP Tariff at Section 28.3.

4 See Promoting Wholesale Competition Through Open Access Non-Discriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities and Transmitting Utilities, Order No. 888, FERC Stats. & Regs. 1[ 31,036 (1996), order on rehk, Order No. 888-A, FERC Stats. & Regs. 11 31 , 048 at 30 , 258 - 260 , order on reh ' g , Order No . 888 - B , 81 FERC 1 [ 61248 ( 1997 ), order on reh ' g , Order No . 888 - C , 82 FERC 1 [ 61 , 046 , ( 1998 ), aff~ in relevant part sub nom . Transmission Access Policy Study Group v . FERC , 225 F . 3d 667 ( D . C . Cir . 2000 ), affd sub nom . New York v . FERC , 535 U . S . 1 ( 2002 )

5 See Order No. 888 at 31,736.

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1 reaffirmed use of an average twelve-month coincident peak ("12 CP") allocation method,

2 6 which is consistent with the fact that utilities plan their transmission systems to meet

3 peak demands.

4 Consistent with Order No. 888, SPP utilizes the 12 CP load data provided by Network

5 Customers to bill for Network Service under Schedule 9 in most pricing zones under the

6 SPP Tariff. In zones 1 and 11, however, the coincident peak for each month is used

7 rather than the 12-month average. The same load reporting principles apply to Network

8 Load reporting in all pricing zones, regardless of whether the billing is based on the

9 coincident peak for each month or the 12 CP. The SPP Tariff and Membership

10 Agreement require that members shall submit data to SPP necessary for SPP to determine

11 the member's coincident loads necessary for network billing purposes.7 Additionally,

12 SPP's standard NITS Agreement obligates the Network Customer (whether member or

13 non-member) to submit complete, valid, and accurate information to allow SPP to

14 provide service.8 Neither FERC precedent nor the SPP Tariff requires or authorizes SPP

15 to verify the adequacy of the data submitted by Network Customers or imposes a penalty

16 for failure to provide sufficient data.

17 Q. DOES THE SPP TARIFF REQUIRE BEHIND-THE-METER ("BTM")

18 GENERATION TO BE INCLUDED IN THE CALCULATION OF NETWORK

19 LOAD?

20 A. Yes. The SPP Tariff"s treatment of Network Load and BTM generation implements the

21 rules set forth by FERC in Order Nos. 888 and 890. The SPP Tariff provides no

6 Id.

See generally Membership Agreement at § 3.5 (obligating the member to "provide such information necessary for SPP to perform its obligations... for [operational] purposes). See also SPP Tariff at § 34.4 (defining a Network Customer's Monthly Network Load as "its hourly load (60 minute, clock-hour)" and further providing that the monthly Network Load is the Network Customer's "hourly load coincident with the monthly peak of the Zone where the Network Customer load is physically located").

8 See SPP Tariff at Attachment F, Section 9.0.

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1 exception to exclude or "net" BTM generation from Network Load calculations. Nor in

2 the SPP Tariff is there any differentiation between retail and wholesale BTM generation.

3 Therefore, all Network Customers should be including loads served by BTM generation

4 in their Network Load calculations.

5 Q. CAN A SPP NETWORK CUSTOMER ELECT TO EXCLUDE LOAD SERVED

6 BY BTM GENERATION FROM THE CALCULATION OF ITS NETWORK

7 LOAD?

8 A. Yes, but only in the circumstances and manner defined by FERC. A SPP Network

9 Customer may elect to exclude from its Network Load, the load served by BTM

10 generation, by un-designating the entire load at that discrete point of delivery but the

11 Network Customer would then be required to utilize SPP point-to-point transmission

12 service to serve the load at that discrete point of delivery.

13 Q. WHAT IS THE FERC POLICY ON THE INCLUSION OF BTM GENERATION

14 IN NETWORK LOAD?

15 A. Generally, FERC policy under Order Nos. 888 and 890 requires generation, including

16 BTM generation that serves Network Load, to be included in the Network Customer's

17 load ratio share of costs.9 Regarding the inclusion of BTM generation in Network Load

18 calculations, FERC stated:

19 "[I]f a customer wishes to exclude a particular load at discrete points of 20 delivery from its load ratio share of the allocated cost of the transmission 21 provider's integrated system, it may do so. Customers that elect to do so, 22 however, must seek alternative transmission service for any such load that 23 has not been designated as network load for network service . This option 24 is also available to customers with load served by 'behind the meter'

9 See Order No. 888 at 31,736,31,743.

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1 generation that seek to eliminate the load from their network load ratio 2 calculation (emphasis added)."l0

3 Similarly, Order No. 890, which affirmed the decision in Order No. 888, prohibits the

4 netting of BTM generation from a Network Customer's Network Load calculations:

5 "The Commission is not persuaded to require transmission providers to 6 allow netting of behind the meter generation against transmission service 7 charges to the extent customers do not rely on the transmission system to 8 meet their energy needs .... The existing pro forma [ Open Access 9 Transmission Tariff] already permits transmission customers to exclude

10 the entirety of a discrete load from network service and serve such load 11 with the customer's behind the meter generation and through any needed 12 point-to-point service, thereby reducing the network customer's load ratio 13 share."11

14 Q. HAS FERC APPLIED THESE GENERAL POLICIES ADDRESSING THE

15 INCLUSION IN NETWORK LOAD OF BTM GENERATION IN ANY SPECIFIC

16 CASES?

17 A. Yes, FERC has applied these policies elsewhere. One such example is a case preceding

18 Order No. 888, in which FERC required the Florida Municipal Power Agency ("FMPA")

19 to report all of its BTM generation for network integration transmission service billing by

20 Florida Power & Light Company ("Florida Power") regardless of whether the BTM-

21 generated power entered the Florida Power transmission system. Unless the load

22 supplied by BTM generation is isolated from the remainder of load served on an

23 integrated network basis, it cannot be excluded from such network service. FERC stated:

24 'TMPA argues that Florida Power's local resources should be treated differently 25 because all are connected to the grid, while FMPA's generating units can meet 26 local loads without first entering the Florida Power grid. This is not a meaningful

io Id.

11 See Preventing Undue Discrimination and Preference in Transmission Service, Order No. %90, ¥ERC Stats. & Regs. 1[ 31,241, at P 1619, order on rehk, Order No. 890-A, FERC Stats. & Regs. 1[ 31,261 (2007), order on reh 'g and clarification, Order No. 890-B, 123 FERC 1[ 61,299 (2008), order on reh'g, Order No. 890 - C , 126 FERC 1 [ 61228 , order on clarification , Order No . 890 - D , 129 FERC 1 [ 61 , 126 ( 2009 )

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1 distinction. . If FMPA has a load and resources that it does not want to integrate, 2 it can isolate the load and resource from Florida Power's transmission system and 3 eliminate it from the request for full integration.',12

4 Q. WHAT ENTITY HAS THE DUTY TO ENSURE THAT A NETWORK

5 CUSTOMER IS REPORTING ITS NETWORK LOAD CORRECTLY?

6 A. FERC has been clear that it is the Network Customer's duty to ensure its reporting of

7 Network Load is consistent with precedent and compliant with the requirements of the

8 applicable tariff . In Ameren Services Company vs . Prairieland Energy , Inc ., another case

9 applying the Network Load reporting principles in Order Nos. 888 and 890, FERC found

10 that the transmission customer had the responsibility to designate the necessary BTM

11 generation when taking network service, and by failing to do so it under-calculated its

12 network load in violation ofthe tariff.13 FERC noted that the "[transmission customer did

13 not] seek alternative transmission service so as to obviate the need to report its BTM

14 generation, as required by the tariff.',14 FERC concluded that the transmission customer

15 violated its service agreement and the tariff, and was responsible for paying for its

16 network service based on gross load rather than net load.15

17 Q. HAS FERC APPROVED ANY ALTERNATIVE PROPOSALS FOR THE

18 NETTING OF BTM GENERATION IN THE CALCULATION OF NETWORK

19 LOAD?

20 A. Yes. FERC has stated that it would review alternative proposals for the treatment of BTM

21 generation on a case - by - case basis ( emphasis added ). 16 For example , FERC approved a

12 FERC Docket Nos. TX93-4 and EL93-51, Mate of order or FERC reference numberj, P. 23.

13 See Ameren Services Co ., 131 FERC 1 [ 61 , 125 ( 2010 ) OAmeren ")

14 Ameren at PP 27-28.

15 Id.

16 See Order No. 890 at P 1619. See also Order No. 890-A at P 970.

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Docket No. 51802


1 proposal by PJM Interconnection („PJM"f to allow netting of BTM generation in the

2 calculation of Network Load where the generating units are located with load at a single

3 electrical location (same site) such that no transmission or distribution facilities are used

4 to deliver energy from the generation unit to the load.18 This effectively limited the

5 specific application of PJM's exception to retail load served by BTM generation. PJM

6 subsequently has expanded participation in its BTM netting program to include a limited

7 amount of municipal, electric cooperative, and other utilities who take network service on

8 the PJM system.19

9 Q. HAS SPP SOUGHT APPROVAL FROM FERC OF AN ALTERNATIVE

10 PROPOSAL FOR THE TREATMENT OF BTM GENERATION USED IN THE

11 CALCULATION OF NETWORK LOAD?

12 A. No.

13 Q. HAS SPP CONSIDERED SEEKING APPROVAL FROM FERC OF AN

14 ALTERNATIVE PROPOSAL FOR THE TREATMENT OF BTM GENERATION

15 USED IN THE CALCULATION OF NETWORK LOAD?

16 A. Yes. In 2017, SPP and its stakeholders developed an alternative proposal in Revision

17 Request ("RR") 20 241. In RR 241, SPP's stakeholders proposed revisions to Section 34.4

18 of the SPP Tariff to provide an exception to the reporting requirement for generation

19 behind a retail meter less than 1 MW. However, RR 241 was not approved through the

17 PIM Interconnection is a regional transmission organization that coordinates the movement of wholesale electricity in all or parts o f Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

18 See PJM Interconnection , Inc ., 107 FERC 1 [ 61 , 113 ( 2004 )(" PIM 2004 Order ").

19 See generally PIM Interconnection, Inc., 113 FERC 1[61279 (2005) ('TJM 2005 Ordef')

20 Revision Request is a SPP process to make any additions, deletions, or changes to the SPP Tariff, Marketplace Protocols, Operating Criteria, Planning Criteria, Business Practices, Integrated Transmission Planning Manual, Revision Request Process, Reliability Coordinator and Balancing Authority Data Specifications, SPP Communications Protocols, and any attachments and exhibits to these documents.

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l SPP stakeholder process21 and consequently was never submitted to FERC for approval.

2 In 2018 and 2019, SPP staff conducted two stakeholder surveys on this topic. Based on

3 results of the two surveys, SPP staff is now considering development of another proposal

4 to bring before stakeholders in order to seek FERC approval of a set of exceptions to

5 FERC's general policy requiring inclusion of BTM generation in Network Load. If

6 exceptions to FERC's general policy are adopted by the SPP stakeholders and

7 subsequently approved by FERC, it would be appropriate for Network Customers to

8 adjust their reported Network Loads accordingly at that time.

9 III. MR. POLLOCK'S TESTIMONY

10 Q. HAVE YOU REVIEWED THE DIRECT TESTIMONY OF MR. POLLOCK

11 THAT WAS FILED ON BEHALF OF THE TIEC?

12 A. Yes.

13 Q. PLEASE SUMMARIZE MR. POLLOCK'S TESTIMONY REGARDING THE

14 REPORTING OF BTM GENERATION.

15 A. Mr. Pollock states that including retail BTM generation in the monthly peak demand for

16 purposes of Schedule 11 of the SPP Tariff is not required under the SPP Tariff. Mr.

17 Pollock testifies that SPS should immediately discontinue the practice of adding load

18 served by retail BTM generation in its reporting of monthly peak demands to SPP.

21 See MOPC Agenda and Background Materials, dated October 17-18, 2017 at Agenda Item 10 posted at: https://www.spp.org/documents/55018/mopc%20minutes%20and%20attachments%2020171017-18.pdf.

The MOPC consists of a representative officer or employee from each SPP Member and reports to the SPP Board of Directors. Its responsibilities include recommending modifications to the SPP Tariff. See Southwest Power Pool, Inc., Bylaws, First Revised Volume No. 4 at Section 6.1.

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Docket No. 51802


1 Q. DO YOU AGREE WITH MR. POLLOCK?

2 A. No. FERC policy under Order Nos. 888 and 890, as well as the SPP Tariff, require that

3 Network Customer load, including load that may be served by BTM generation, be

4 included in the calculation of Network Load. There is no differentiation between retail

5 and wholesale BTM generation in these requirements.

6 Q. MR. POLLOCK ASSERTS THAT IF A RETAIL BTM GENERATOR PROVIDES

7 ITS OWN ELECTRICITY AT THE SAME TIME AS THE MONTHLY

8 COINCIDENT PEAK USED TO CALCULATE THE CHARGE FOR NETWORK

9 LOAD, THEN THIS BTM GENERATION SHOULD NOT BE INCLUDED IN

10 THE CALCULATION OF NETWORK LOAD. DO YOU AGREE WITH THIS

11 ASSERTION?

12 A. No. If Network Customers are allowed to adjust the calculation of Network Load based

13 on the amount of electricity produced by BTM generation at the same hour as the

14 monthly coincident peak, this could result in inequity to the remaining Network

15 Customers in SPS's Zone and to other customers in the SPP region. As explained in

16 FERC Order No. 888-A,22 the netting of BTM generation from Network Load would

17 allow the customer of that BTM generator to reduce, if not eliminate, its load-ratio cost

18 responsibility for network service. Because network and native load customers bear

19 transmission system costs on a load-ratio basis, any cost responsibility evaded by a

20 network customer in this manner would be borne by the remaining network customers

21 and native load. While this customer could lower its coincident peak use of the

22 transmission system through generation in a handful of peak hours, it could be making

23 substantial use of the transmission system during all other hours of the month. This

24 would defeat the purpose of coincident peak load billing as established by FERC, which

25 is to provide that entities depending on the transmission system for reliable service bear a

26 proportionate share of the cost of that system. Similar to distribution system costs,

22 Order No. 888-A, p. 247-248.

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Docket No. 51802


1 transmission system costs are based on the need to meet high electrical demands and are

2 not necessarily reduced by the fact that a retail customer happens to self-supply energy in

3 one or more peak hours. Therefore, the system capacity costs should be recovered from

4 the load of the customers for which the system is designed and constructed. Just as a

5 utility should recover its distribution system capacity costs from the retail and wholesale

6 customers that benefit from distribution, the utility that constructs and maintains the

7 transmission system should recover the resulting costs from the retail and wholesale

8 customers that benefit from transmission. Again, such capacity costs cannot be

9 eliminated because a customer sometimes generates its own energy during a peak hour in

10 the month, particularly where the transmission provider has no long-term, firm

11 commitment and dispatch rights over that retail BTM generation. The system capacity

12 must be available to meet the demands of retail customers with BTM generation

13 whenever that generation is not running.

14 Q. DOES MR. POLLOCK CITE ANY LANGUAGE IN THE SPP TARIFF OR IN

15 FERC ORDERS EXPLICITLY SUPPORTING HIS POSITION THAT, AS A

16 GENERAL POLICY, WHOLESALE BTM GENERATION IS TO BE INCLUDED

17 IN NETWORK LOAD BUT RETAIL BTM GENERATION IS NOT TO BE

18 INCLUDED?

19 A. No. Mr. Pollock does not provide such support from either the SPP Tariff or FERC

20 orders. His position appears to be based primarily on his interpretation of the term

21 "Network Customer," an entity that he assumes has no system capacity responsibility for

22 the load supplied during the peak hour by the BTM generation of a retail customer.

23 However, this interpretation is not stated in Order Nos. 888 or 890 and he cites no direct

24 support for it from other FERC orders or the SPP Tariff.

13 104


Docket No. 51802


1 Q. DOES MR. POLLOCK MAKE AN APPROPRIATE DISTINCTION BETWEEN

2 WHOLESALE BTM GENERATION AND RETAIL BTM GENERATION?

3 A. No. Mr. Pollock's rationale for including wholesale BTM generation but excluding retail

4 BTM generation does not hold up under close examination. For example, Mr. Pollock

5 states that retail BTM generation is not "being delivered over SPS's transmission and

6 distribution system.', 23 However, a parallel statement could be made about a wholesale

7 BTM generator that is located on the distribution wires of a utility whose load is included

8 within the Network Load of the utility owning the transmission system. Such cases of

9 umbrella Network Load, which encompasses the load of multiple utilities, exist in

10 numerous places within the SPP region. Thus, Mr. Pollock's test does not clearly

11 differentiate between retail and wholesale BTM generation. FERC policy under Order

12 Nos. 888 and 890 requires the inclusion of BTM generation as a general matter and Mr.

13 Pollock does not provide sufficient basis to treat retail and wholesale loads differently.

14 Q. DO YOU HAVE FURTHER COMMENTS ABOUT MR. POLLOCK'S

15 ASSERTION THAT RETAIL BTM GENERATION SHOULD BE EXCLUDED

16 FROM NETWORK LOAD BASED ON GENERAL FERC POLICY?

17 A. Yes. As I described previously, PJM requested and received FERC approval of an

18 exceptions policy that first excluded from Network Load the BTM generation at the same

19 electrical location as the load, which allowed exclusion of retail BTM generation. The

20 exception was later extended to exclude a limited amount of wholesale BTM

21 generation.24 If FERC's general policy had been to exclude retail BTM generation from

22 Network Load, there would have been no need for PJM to request the exception for retail.

23 The fact that a request to FERC was deemed necessary by PJM, and that FERC accepted

24 it on such basis, demonstrates the general policy of including retail BTM generation

25 under Order No. 888.

23 See Direct Testimony of Jeffry Pollock, 12:21-23. Also see 13: 5-8 and 14:2-6. 24 See PIM 2004 Order and PIM 2005 Order.

14 105


Docket No. 51802


1 Q. MR. POLLOCK POINTS TO REVISION REQUEST 241 AS EVIDENCE THAT

2 INCLUDING LOAD SERVED BY RETAIL BTM GENERATION IS NOT

3 REQUIRED UNDER THE SPP TARIFF. DO YOU AGREE?

4 A. No. The SPP Tariff requirement that the reporting Network Load must include BTM

5 generation implements the rules set forth by FERC in Order Nos. 888 and 890. RR 241

6 proposed to add an exception to the reporting requirement for Network Load.

7 Specifically, RR 241 proposed to exclude from Network Load any generation behind a

8 retail meter of less than one MW, because the SPP Tariff provided no exception to

9 exclude or "net" BTM generation from Network Load calculations. RR 241 was not

10 approved through the SPP stakeholder process and, therefore, was not filed at FERC for

11 approval. In Order Nos. 890 and 890-A, FERC stated that it would review requests for

12 exceptions to its general policy on a case-by-case basis. Such exceptions would serve to

13 reduce, not increase, the load ratio share of the affected entity. However, Mr. Pollock

14 misconstrues the SPP stakeholder discussion as having considered a proposal to increase

15 load ratio shares ofthose entities with retail BTM generation. If his interpretation ofthe

16 stakeholder proposal were accurate, this proposal would not have fallen within the

17 bounds of what FERC allows for case-by-case consideration. Mr. Pollock's explanation

18 ofthe SPP stakeholder proposal is incorrect.

19 Q. MR. POLLOCK REFERENCED TWO SURVEYS CONDUCTED BY SPP

20 RELATED TO THE REPORTING OF BTM GENERATION IN NETWORK

21 CUSTOMERS' LOAD. PLEASE DESCRIBE THE SURVEYS THAT SPP HAS

22 CONDUCTED RELATED TO THE REPORTING OF BTM GENERATION IN

23 NETWORK LOAD.

24 A. SPP has conducted two surveys related to the reporting of BTM generation in Network

25 Load. The first, in 2017, was conducted for SPP to gain an understanding of the load

26 reporting practices of its Network Customers. The purpose of the second survey,

27 conducted in 2019, was to gauge SPP stakeholder interest in changes to the existing

28 network load reporting requirements.

15 106


Docket No. 51802


1 Q. DO YOU AGREE WITH MR. POLLOCK'S CHARACTERIZATION OF THE

2 2019 SPP SURVEY?

3 A. No. In Mr. Pollock's testimony, he cites to the results ofthe 2019 SPP survey as support

4 for his statement that the survey revealed "that a majority of respondents believed that at

5 least some load served by retail BTM generation should not be added to the Network

6 Customer's actual metered load.',25 This is a mischaracterization of the purpose of the

7 2019 survey. As I explained above, the purpose of the 2019 survey was to gauge SPP

8 stakeholder interest in changes to the network load reporting requirements, in view of

9 potentially developing an exceptions policy to file with FERC. The purpose was not to

10 give guidance as to what the current requirements are for each Network Customer's

11 report ofNetwork Load.

12 Q. MR. POLLOCK CLAIMS THAT MANY SPP MEMBERS STATED IN THE 2017

13 SPP SURVEY THAT THEY DO NOT REPORT THEIR RETAIL CUSTOMERS'

14 SELF-SUPPLIED ELECTRICITY IN CALCULATING THEIR LOADS. PLEASE

15 RESPOND.

16 A. As explained above, SPP conducted a survey in 2017 to gain an understanding ofthe load

17 reporting practices of its Network Customers. As a result of this survey, SPP provided

18 educational information to its stakeholders clarifying that FERC policy and the SPP

19 Tariff provide no exception to exclude or "net" BTM generation from Network Load

20 calculations.

21 Q. HAVE ANY NETWORK CUSTOMERS ADJUSTED THEIR NETWORK LOAD

22 REPORTING PRACTICES BASED ON THE EDUCATIONAL INFORMATION

23 PROVIDED TO STAKEHOLDERS AS A RESULT OF THE 2017 SPP SURVEY?

24 A. Yes. Several entities made adjustments to their load reporting practices.

25 Id. at 15.

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Docket No. 51802


1 Q. WHAT AUTHORITY DOES SPP HAVE TO ENFORCE CORRECT

2 REPORTING OF NETWORK LOAD BY NETWORK CUSTOMERS?

3 A. The SPP Tariff provides no authority for SPP to verify data submitted by Network

4 Customers or impose a penalty for failure to provide accurate data. FERC has been clear

5 that it is the Network Customer's duty to ensure its reporting of Network Load is

6 consistent with precedent and compliant with the requirements ofthe applicable tariff.

7 Q. WHAT ARE THE RISKS ASSOCIATED WITH NON-COMPLIANCE WITH

8 THE REQUIREMENTS IN THE SPP TARIFF?

9 A. Violations of the SPP Tariff can result in penalties of over one million dollars per day,

10 per violation, from the FERC Office of Enforcement.

11 IV. SUMMARY AND CONCLUSION

12 Q. MR. POLLOCK ATTEMPTS TO DISTINGUISH BETWEEN REPORTING

13 RETAIL AND WHOLESALE BTM GENERATION IN NETWORK LOAD. DO

14 YOU AGREE WITH HIS DISTINCTION?

15 A. No. FERC Order Nos. 888 and 890 do not distinguish between retail and wholesale loads

16 for purposes of reporting Network Load. Similarly, the SPP Tariff makes no distinction

17 between retail and wholesale BTM generation.

18 Q. DOES THIS CONCLUDE YOUR TESTIMONY?

19 A. Yes.

17 108


Docket No. 51802

AFFIDAVIT

STATE OF ARKANSAS ) COUNTY OF PULASKI )

I, Charles Locke, being duly sworn according to law, state under oath that the matters set forth in my Rebuttal Direct Testimony in this docket are true and correct to the best of my knowledge, information and belief.

/h 0 t Q <-E·Ukt,L-4-4 /,--

Charles Locke ..#bkc

Subscribed and sworn to before me, a Notary Public, on this ~r\3 2020.

day of March,

B n 1-J ti VL#701(/,-l-\>Yyn 1~ ~It,]\ ski Notark#ublic

My Commission Expires: 1 l| ID ~ 2023 & l,

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Z . OR %/ \ 4 ·& pUB\>©ts.02 / \'%0 4*Em 4177

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109


Docket No. 51802

CERTIFICATE OF SERVICE

I certify that on the 11th day of March 2020, a true and correct copy of the foregoing

rebuttal testimony was served on all parties of record by electronic service and by one of the

following methods: hand delivery, Federal Express, regular first class mail, certified mail, or

facsimile transmission.

jr-~

19

110

Attachment WAG-RR-R/7 Page 1 of 3

Docket No. 51802

SOAH DOCKET NO. 473-21-1892 PUC DOCKET NO. 51802

APPLICATION OF SOUTHWESTERN § PUBLIC SERVICE COMPANY FOR § AUTHORITY TO CHANGE RATES §

BEFORE THE STATE OFFICE OF

ADMINISTRATIVE HEARINGS

TEXAS INDUSTRIAL ENERGY CONSUMERS' RESPONSE TO SOUTHWESTERN PUBLIC SERVICE COMPANY'S

THIRD REOUEST FOR INFORMATION

SPS-TIEC 3-2. Please provide all communications between TIEC or on behalf of TIEC, or any of its members, and any person or organization outside of TIEC within the preceding five years concerning the treatment of retail load served by behind-the-meter generation in reporting of Network Load to the Southwest Power Pool.

Response:

Please see Attachment SPS-TIEC 3-2.

Preparer: Counsel

4

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Docket No. 51802

Attachment SPS-TIEC 3-2 Page 30 of 33

From: John Rogers <[email protected]> Sent: Wednesday, April 17, 2019 6:58 AM To: McTyre, Nick <Nicolas. [email protected]> Cc: VanMiddlesworth, Rex <[email protected]>; Coleman, Katie <[email protected]> Subject: RE: Adam Eldean's Contact: SPP Pre-Filing Matter Nick, Thanks for checking back. I did leave a VM for you last week-at least I thought I dialed correctly. I checked with other staff and although no one I spoke with remembers a specific conversation with Paul, and noting that we don't speak for the Commission, we think SPP is correct based on what the Commission has included in certain orders. See a 2004 MISO station power order (106 FERC 61,073 at P 26). This order cites Order No. 888, an FP&1 order, and an order I remembered-a Consumers Energy case-Opinion 456 that touches on this issue. Of course, if you need a definitive answer from the Commission, you'Il need to file a Petition for Declaratory order. Regards, John 202-502-8564

From: McTyre, Nick [mailto:Nicolas. [email protected] Sent: Tuesday, April 16, 2019 7:31 PM To: John Rogers <[email protected]> Cc: VanMiddlesworth, Rex <[email protected]>; Coleman, Katie <[email protected]> Subject: RE: Adam Eldean's Contact: SPP Pre-Filing Matter Hello John. I hope your week isgoing well. We spoke a few weeks ago about a SPP retail btmg issue. Thanks again for taking the time to talk with us. If you remember, we mentioned having a conversation with Paul Suskie, who told us SPP was changing its NITS reporting rules to require reporting of all gross load, including all retail load served by btmg. Paul told us SPP was making that change based on a conversation he had with FERC staffon this issue . He told us he could not remember with whom at FERC he spoke aboutthis. If I remember correctly, you graciously agreed to ask around in OEMR Central and see whether anyone remembered having that conversation with Paul Suskie. Were you able to find any additional information on this? Thanks again for your time. Best, Nick McTyre Nick McTyre 1 Thompson & Knight LLP Attorney 98 San Jacinto Boulevard, Suite 1900, Austin, Texas 78701 512-469-6146 (direct) I [email protected] This message may be confidential and attorney-client privileged. If received in error, please do not read. Instead, reply to me that you have received it in error and delete the message. Thank you.

From: McTyre, Nick Sent: Tuesday, April 02, 2019 4:00 PM To: 'John Rogers' <[email protected]> Cc: VanMiddlesworth, Rex <[email protected]>; Coleman, Katie <[email protected]> Subject: RE: Adam Eldean's Contact: SPP Pre-Filing Matter Hello John. Thank you so much for talking with ustoday. We look forward to hearing back from you next week. Best, Nick Nick McTyre 1 Thompson & Knight LLP Attorney 98 San Jacinto Boulevard, Suite 1900, Austin, Texas 78701 512-469-6146 (direct) I [email protected]

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Docket No. 51802

Attachment SPS-TIEC 3-2 Page 31 of 33

This message may be confidential and attorney-client privileged. If received in error, please do not read. Instead, reply to me that you have received it in error and delete the message. Thank you.

From: John Rogers <[email protected]> Sent: Tuesday, April 02, 2019 10:11 AM To: McTyre, Nick <[email protected]> Subject: RE: Adam Eldean's Contact: SPP Pre-Filing Matter Nick, Yes, I am available. Either 1 or 3pm is best. John 202-502-8564

From: McTyre, Nick [mailto:Nicolas. [email protected]] Sent: Tuesday, April 02, 2019 11:04 AM To: John Rogers <[email protected]> Subject: Adam Eldean's Contact: SPP Pre-Filing Matter Hello Mr. Rodgers. Sorry I missed your call yesterday, and thank you for following up with me. By way of introduction, I'm former trial attorney with FERC OAL, and spent five years there working under Ted Gerarden, Nils Nichols and Linda Patterson. Are you available this afternoon for a short call with myself and one of my colleagues? As Adam probably referenced, this regarding an SPP matter that is in the pre-filing stage. To the best of our understanding, our concern does not involve a pending SPP FERC docket. Regards, Nick McTyre Nick McTyre 1 Thompson & Knight LLP Attorney 98 San Jacinto Boulevard, Suite 1900, Austin, Texas 78701 512-469-6146 (direct) I [email protected] This message may be confidential and attorney-client privileged. If received in error, please do not read. Instead, reply to me that you have received it in error and delete the message. Thankyou.

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Attachment WAG-RR--R-8(CD) Page 1 of 1

Docket No. 51802

Southwestern Public Service Company

Workpapers of William A. Grant

Docket No. 51802

APPLICATION OF SOUTHWESTERN PUBLIC SERVICE COMPANY

FOR AUTHORITY TO CHANGE RATES

WAG-RR-R8(CD) is provided in electronic format

114

The following files are not convertible:

WAG-RR-Rl.xls

Please see the ZIP file for this Filing on the PUC Interchange in order to access these files.

Contact [email protected] if you have any questions.


Docket No. 51802

FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT

This FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is hereby made and entered into as of April _, 2017 by and among Invenergy Wind Development North America LLC, a Delaware limited liability company ("Seller"), Sagamore Wind Energy LLC, a Delaware limited liability company (the "Company"), and Southwestern Public Service Company, a New Mexico corporation ("Buyer").

WHEREAS, Buyer, Seller and the Company have entered into that certain Purchase and Sale Agreement, dated as of March 9,2017 (the "Purchase Agreement"), pursuant to which Buyer agreed to purchase from Seller and Seller agreed to sell to Buyer all of the outstanding equity interests ofthe Company; and

WHEREAS, Buyer, the Company and Seller (acting pursuant to Section 8.6 of the Purchase) have agreed to amend the Purchase Agreement as set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, Buyer, Company and Seller hereby agree as follows:

SECTION 1. Amendment. The date referenced in the first sentence of Section 2.2(a)(i) of the Purchase Agreement is hereby extended from May 1,2017 to June 30,2017.

SECTION 2. Defined Terms. All terms used herein, and not otherwise defined, shall have the same meaning as in the Purchase Agreement.

SECTION 3. Modifications. Except as otherwise specifically modified by this Amendment, all other terms and provisions of the Purchase Agreement shall remain unmodified and in full force and effect. Nothing contained in this Amendment shall in any way impair the validity or enforceability of the Purchase Agreement, as modified hereby, or alter, waive, annul, vary, affect or impair any provision, condition or covenant contained therein or any rights, power or remedy therein.

SECTION 4. Counterparts. This Amendment may be executed in any number of counterparts, each ofwhich will be deemed an original, but all of which together will constitute one and the same instrument. Any facsimile or portable document format (pdf) copies hereof or signature hereon will, for all purposes, be deemed originals.

SECTION 5. Governing Law. This Amendment will be governed by the laws of the State of New Mexico without giving effect to any conflict or choice of law provision.

SECTION 6. Effective Time. This Amendment shall become effective as of the date first above written.

Isignature pagefollowsl \

4826-2129-6177\7


Docket No. 51802

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written,

INVENERGY WIND DEVELOPMENT NORTH AMERICA LLC

e,Aev , B> «f Name: f'/' 1'. l©.''C ip /<ru Title : __ N t , t F ,¢%· t # e -, l .©

SOUTHWESTERN PUBLIC SERVICE COMPANY

By: (0=£1-f--. 1-U-Name: Dre.5,-UaA Title: 50 3*ku>e,4-err; Po6(;c Servi ce Cornp-Z)

SAGAMORUMIND ENERGY LLC ~

i egal j

Revie~

\ELF Name; *#V,

Title: // N

t,4 -~ (. EE-7'dtj-c: ( : €t)/ C.1' c ..L '

4826-2 I 29-6 I 77\7


Docket No. 51802

SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT

This SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is hereby made and entered into as of June 30, 2017 by and among Invenergy Wind Development North America LLC, a Delaware limited liability company ("Seller'*), Sagamore Wind Energy LLC, a Delaware limited liability company (the "Companf'), and Southwestern Public Service Company, a New Mexico corporation ("Buyer").

WHEREAS, Buyer, Seller and the Company have entered into that certain Purchase and Sale Agreement, dated as of March 9, 2017 (as amended, the "Purchase Agreement"), pursuant to which Buyer agreed to purchase from Seller and Seller agreed to sell to Buyer all of the outstanding equity interests ofthe Company; and

WHEREAS, Buyer, the Company and Seller (acting pursuant to Section 8.6 of the Purchase) have agreed to amend the Purchase Agreement as set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual agreements and t covenants hereinafter set forth, Buyer, Company and Seller hereby agree as follows:

SECTION 1. Amendment. The date referenced in the first sentence of Section 2.2(a)(i) of the Purchase Agreement is hereby extended from June 30,2017 to September 30, 2017.

SECTION 2. Defined Terms. All terms used herein, and not otherwise defined, shall have the same meaning as in the Purchase Agreement,


SECTION 4. Counterparts. This Amendment may be executed in any number of counterparts, each of which will be deemed an original, but all ofwhich together will constitute one and the same instrument, Any facsimile or portable document format (pdf) copies hei·eofor signature hereon will, for all purposes, be deemed originals.

SECTION 5. Governing Law. This Amendment will be governed by the laws of the State of New Mexico without giving efiect to any conflict or choice of law provision,


ISignature pagefollowsl

4816·2129·6177\7


Docket No. 51802

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as ofthe date first above written.

1NVENERGY WIND DEVELOPMENT NORTH - AMERICA LLC

90-0 By: 4 V Nanie: 1'\~~ABL j BA#r-?i Title: S<.Xw>r \Jtc,L J?r€.rhkud-

SOUTHWESTERN PUBLIC SERVICE COMPANY ~

By: (. Name: ba•A A -T. Uu-Jsc,a Title: e©*siouw~

SAGAMORE WIND ENERGY LLC

By: C %>* Naine: F\\ Ol,a,».tl iki'rJ Title: Sen:nr \Iic., Prcci,Lnk

4826·2 129-6 I 77W


Docket No. 51802 Execution Version

THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT

This THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is hereby made and entered into as of November 6, 2017 by and among Invenergy Wind Development North America LLC, a Delaware limited liability company ("Seller"), Sagamore Wind Energy LLC, a Delaware limited liability company (the "Companv"), and Southwestern Public Service Company, a New Mexico corporation ("Buvef')

WHEREAS, Buyer, Seller and the Company have entered into that certain Purchase and Sale Agreement, dated as of March 9,2017, as amended pursuant to that certain First Amendment to Purchase and Sale Agreement, dated in April, 2017, and that certain Second Amendment to Purchase and Sale Agreement, dated as of June 30, 2017 (as amended, the "Purchase Agreement"), pursuant to which Buyer agreed to purchase from Seller and Seller agreed to sell to Buyer all of the outstanding equity interests of the Company on the terms and subject to the conditions therein provided; and

WHEREAS, Buyer, the Company and Seller (acting pursuant to Section 8.6 ofthe Purchase Agreement) have agreed to amend the Purchase Agreement as set forth herein.


SECTION 1. Amendment. The Purchase Agreement is hereby amended as follows:

(a) The defined term "Project Area Trigger Event" is hereby deleted in its entirety and replaced with the following:

~ ' Project Area Trigger Event ' means that Buyer has concluded , acting reasonably and in good faith, that (and notified Seller in writing that) the Project Area delivered pursuant to Section 6.6(a)(xx) has resulted in, or will result in: (i) an increase by more than thirteen percent (13%) of the length of Buyer's collection system for the Project as measured in lineal feet, (ii) an increase by more than fifteen percent (15%) of the length of Buyer's roads for the Project as measured in lineal feet, (iii) a reduction of more than three-quarters percent (0.75%) of the Project's net capacity factor, (iv) an increase by more than fifty percent (50%) of the interconnection transmission line length as measured in lineal feet, (v) a requirement for a new interconnection point (other than the Crossroads Substation) or a requirement for two interconnection points and in either case the net cost increase for the new or additional interconnection substation and transmission line (minus the reduced collection line cost (if any) as compared to the original layout) exceeds the cost of the transmission line and interconnection costs estimates pursuant to the original layout by more than $1,500,000 or (vi) an increase by more than one and one-half percent (1.5%) ofthe levelized cost of energy in respect of the Project; provided, that no Project Area Trigger Event shall exist pursuant to clauses (i) through (v) above so long as, based on the net impact of all changes, the levelized cost of energy in respect of the Project does not increase; and provided further that Seller may in good faith dispute the existence of any Project Area Tngger Event.

OHSUSA:767372303.9


Docket No. 51802

(b) The defined term "Sufficient Project" is hereby deleted in its entirety and replaced with the following:

" Suf # cient Project ' means ( x ) a total of two hundred twenty four ( 224 ) 2 . 0 - megawatt wind turbines with an aggregate nameplate capacity of not less than the Expected Nameplate Capacity in a reasonably contiguous manner (plus, if the Expansion is accepted by Buyer, the additional number of 2.0-megawatt wind turbines required to achieve the aggregate nameplate capacity of the Proj ect after accounting for the Expansion) or (y) if Buyer exercises the Option, a total of one hundred forty nine (149) 2.0-megawatt wind turbines with an aggregate nameplate capacity of not less than the Reduced Nameplate Capacity in a reasonably contiguous manner, a number of alternate sites equal to the sum of (x) 5 for each 200 megawatts plus (y) for any remainder of megawatts exceeding the nearest achieved multiple of 200 megawatts, the product of (a) 5 multiplied by (b) the quotient of such remainder divided by 200 (but such product shall always be rounded up to the next whole number) for wind turbines that are reasonably contiguous to such planned turbine sites, in each case, consistent with and in accordance with all Laws, the Site Permit and prudent wind industry practices, and the ability to locate each of the following on the Real Property Interests in no particular manner: substations, collection circuits, an operations and maintenance building, transmission lines (that can service the Project), and other windpower-related facilities, in each case, consistent with and in accordance with all Laws, the Site Permit and prudent wind industry practices; provided that, in any event, a Sufficient Project shall not exist if the Project Area delivered pursuant to Section 6.6(a)(xx) causes a Project Area Trigger Event or exceeds the Project Boundary of the map set forth on Schedule 6.6(a)(iii) as a result of giving effect to the Third Amendment to Purchase and Sale Agreement dated as of November 6, 2017; provided, further, that in no case will the Project have failed to qualify as a Sufficient Project solely as a result of the fact that wind turbine sites are located on Chat 2 Turbines Sites so long as (i) Seller has complied with its obligations in Section 6.6(a)(xx) hereof and (ii) no more than fourteen (14) wind turbine sites are located on Chat 2 Turbine Sites.

(c) The following new defined terms are hereby inserted in alphabetical order in Section 1.1 of the Purchase Agreement:

"Chat 2 Buffer Zone" is defined in Section 6.6(a)(xx).

"Chat 2 Restricted Zone" is defined in Section 6.6(a)(xx).

"Chat 2 Turbine Site" is defined in Section 2.2(a)(iii).

"Required Chat 2 Turbine Site Utilization" is defined in Section 2.2(a)(iii).

'Unutilized Required Chat 2 Turbine Site" is defined in Section 2.2(a)(iii).

Cd) [Reserved]

(e) The phrase in the first sentence of Section 2.2(a)(i) of the Purchase Agreement reading "at any time prior to September 30, 2017," is hereby deleted in its entirety and replaced

OHSUSA:767372303.9


Docket No. 51802

with "at any time prior to the date that is 15 Business Days after the issuance by SPP of the DISIS 2016-002-001".

(f) A new Section 2.2(a)(iii) is hereby added to the Purchase Agreement as follows:

"(iii) If, notwithstanding Seller's commercially reasonable and good faith efforts, Seller must locate more than fourteen (14) wind turbine sites in the Chat 2 Restricted Zone or Chat 2 Buffer Zone (each such turbine location a "Chat 2 Turbine Site"), then Seller may request in writing permission from Buyer to reduce the number of wind turbines required to achieve a Sufficient Proj ect by up to the number of turbines otherwise so required to be located in the Chat 2 Restricted Zone or Chat 2 Buffer Zone, as applicable, which permission may be granted or refused in Buyer's sole discretion. If, notwithstanding its commercially reasonable and good faith efforts, Buyer is unable to avoid utilizing Chat 2 Turbines Sites in order to build a Sufficient Project (after accounting for the impact of any reduction ofthe Sufficient Project size pursuant to the immediately preceding sentence and without taking into consideration the final proviso of the definition thereof) (such scenario, a "Required Chat 2 Turbine Site Utilization"), and so long as Buyer did not voluntarily elect to utilize the subject Chat 2 Turbine Site solely for the purpose of managing its LPC and/or LPC habitat minimization and mitigation program (which election Buyer shall promptly disclose to Seller), then within ten (10) Business Days following the commercial operation date ofthe Project Seller shall pay Buyer by wire transfer of immediately available funds (to such account or accounts instructed by Buyer) an amount equal to the sum of (x) with respect to any such utilized Chat 2 Turbine Site in the Chat 2 Restricted Zone, the product of (1) one hundred thirty thousand dollars ($130,000) and (2) the sum ofthe Chat 2 Turbine Sites so utilized by Buyer and (y) with respect to any such Chat 2 Turbine Site in the Chat 2 Buffer Zone, the product of (1) ninety thousand dollars ($90,000) and (2) the sum of the Chat 2 Turbine Sites so utilized by Buyer. In a Required Chat 2 Turbines Site Utilization scenario, if Buyer determines in its sole discretion to not utilize one or more Chat 2 Turbine Sites, and to the extent such unutilized Chat 2 Turbine Sites results in a Proj ect that has a nameplate capacity smaller than that required to achieve a Sufficient Project (each such Chat 2 Turbine Site an "Unutilized Required Chat 2 Turbine Site"), then within ten (10) Business Days following the commercial operation date of the Project Seller shall pay Buyer by wire transfer of immediately available funds (to such account or accounts instructed by Buyer) an additional amount equal to the product of (1) one hundred thirty thousand dollars ($130,000) and (2) the sum ofthe subject Unutilized Required Chat 2 Turbine Sites.

(g) The reference in Section 2.7(a)(iii) of the Purchase Agreement to "June 30, 2018" is hereby deleted in its entirety and replaced with "September 30, 2018"

(h) Sections 2.3 and 8.1 of the Purchase Agreement are amended by replacing the address: "1301 McKinney Street, Houston, Texas 77010" with the address: "609 Main Street, 40th Floor, Houston, Texas 77002".

OHSUSA:767372303.9


Docket No. 51802

(i) Section 6.6(a)(iii) is hereby deleted in its entirety and replaced with the following:

"(iii) negotiate and complete all Land Contracts and obtain all Real Property Interests necessary to locate, interconnect, erect, construct and operate on the Site a Sufficient Project, including by using all commercially reasonable and good faith effort to mitigate the Project's collection and transmission line costs by procuring the necessary Real Property Interests for that purpose within the areas designated by the purple shaded area in the project boundary map set forth on Schedule 6.6(a)(iii) as a result of giving effect to the Third Amendment to Purchase and Sale Agreement dated as of November 6, 2017, and any Land Contract executed after the date hereof shall be, if a lease, substantially in the form of the Lease attached as Exhibit B or, if another form of Real Property Interest, in such other form reasonably agreed by Buyer and Seller and, with respect to Project Leases, shall include the amendments set forth in the form of Lease Amendment attached as Exhibit C-1 or C-2, as applicable (except for the Project Leases listed in Part 1 of Schedule 2.6(b)(xv)), or such other form reasonably agreed by Buyer and Seller; provided, however, that if a Project Area Trigger Event exists or would occur based on any then proposed Project Area pursuant to the terms of Section 6.6(a)(xx), Buyer's and Seller's mutual agreement shall be required, acting reasonably and in good faith, of the Project Area that meets the requirements of Section 6.6(a)(xx)."

(j) The project boundary map set forth on Schedule 6.6(a)(iii) to the Purchase Agreement is hereby deleted in its entirety and replaced with the proj ect boundary map set forth on Exhibit A hereto. This replacement of the project boundary map shall not be construed to constitute the delivery of, or acceptance of, (x) a new Proj ect Boundary map pursuant to the first sentence of Section 2.2(a)(i) of the Purchase Agreement or otherwise constitute the exercise by the Parties ofthe Expansion submission or approval procedures contemplated by Section 2.2(a)(i) of the Purchase Agreement or (y) a proposed, revised or final map depicting the Project Area as contemplated by Section 6.6(a)(xx) of the Purchase Agreement.

(k) The option boundary map set forth on Schedule 6.6(a)(iii)(2) to the Purchase Agreement is hereby deleted in its entirety and replaced with the option boundary map set forth on Exhibit B hereto. This replacement of the option boundary map shall not be construed to constitute (x) the delivery ofthe Option Boundary as contemplated by the last sentence of Section 2.2(a)(ii) or (y) the delivery of, or acceptance of, a proposed, revised or final map depicting the Project Area as contemplated by Section 6.6(a)(xx) of the Purchase Agreement.

(1) Section 6.6(a)(xx) is hereby amended by inserting immediately after the first period appearing therein the following sentence:

"In no case shall any proposed turbine locations be located in, or within 667 meters of, the LPC CHAT 1 habitat as identified by the Southern Great Plains Critical Habitat Assessment Tool or within 1.25 miles of any lek, defined as five or more lesser prairie-chickens (LPCs) observed clustered together in a group at any given time during a survey conducted in the years 2013, 2014, 2015, 2016, or 2017. Seller

OHSUSA:767372303.9


Docket No. 51802

shall use commercially reasonable and good faith efforts not to locate any proposed turbine (A) in the LPC CHAT 2 habitat as identified by the Southern Great Plains Critical Habitat Assessment Tool (the "Chat 2 Restricted Zone") or (B) within 667 meters of the Chat 2 Restricted Zone but otherwise outside of the Chat 2 Restricted Zone (the "Chat 2 Buffer Zone")."



SECTION 4. Incorporated Terms. Sections 8.1, Section 8.2 and Sections 8.5 through 8.14 of the Purchase Agreement are hereby incorporated into this Amendment as though fully set forth herein.


ISignature page follows-\

OHSUSA:767372303.9


Docket No. 51802


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INVENERGY WIND DEVELOPMEN AMERICA LLC

By. Name* ~/ AA,lef Ivd.j,»4 c Title: V kce f¢z i,2.. .z f


By: Name: Title:


By: Name: lf- Jib•w,f l,U. l l {'D v" & Title : W : U - ? ve c , t Atv~ *

OHSUSA:767372303.8


Docket No. 51802

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.


By: Name: Title:


By: ~31 L l -7 -1-l~ 1&6/' Name: TbcANhl -T. ·Uu-As tw·„ Title: ¢rdzst kt,,A-


By: Name: Title:


Docket No. 51802

Exhibit A

Proj ect Boundary Map

[see attached]

OHSUSA:767372303.9


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Docket No. 51802

Exhibit B

Option Boundary Map

[see attached]

OHSUSA:767372303.9


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Sagarnore Wind Energy Project 1 Roosevelt County, New Mexico A November 6,2017 Invenergy - -A./.Ai


Docket No. 51802

Execution Version

FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT

This FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is hereby made and entered into as of March 29, 2018 by and among Invenergy Wind Development North America LLC, a Delaware limited liability company ("Seller"), Sagamore Wind Energy LLC, a Delaware limited liability company (the "Comoanv"). and Southwestern Public Service Company, a New Mexico corporation ("Buyer").

WHEREAS, Buyer, Seller and the Company have entered into that certain Purchase and Sale Agreement, dated as of March 9, 2017, as amended pursuant to that certain First Amendment to Purchase and Sale Agreement, dated in April, 2017, that certain Second Amendment to Purchase and Sale Agreement, dated as of June 30, 2017, and that certain Third Amendment to Purchase and Sale Agreement, dated as of November 6,2017 (as amended, the "Purchase Agreement"), pursuant to which Buyer agreed to purchase from Seller and Seller agreed to sell to Buyer all of the outstanding equity interests o f the Company on the terms and subject to the conditions therein provided; and

WHEREAS, Buyer, the Company and Seller (acting pursuant to Section 8.6 of the Purchase Agreement) have agreed to amend the Purchase Agreement as set forth herein.

NOW, THEREFORE, in consideration o f the premises and the mutual agreements and covenants hereinafter set forth, Buyer, the Company and Seller hereby agree as follows:

SECTION 1. Amendment. The date referenced in Section 2.7(a)(iv) of the Purchase Agreement is hereby extended from March 3I, 2018 to April 30,2018.


SECTION 3. Modifications. Except as otherwise specifically modified by this Amendment, all other terms and provisions o f the Purchase Agreement shall remain unmodified and in full force and effect. Nothing contained in this Amendment shall in any way impair the validity or enforceability of the Purchase Agreement, as modified hereby, or alter, waive, annul, vary, affect or impair any provision, condition or covenant contained therein or any right, power or remedy therein.

SECTION 4. Incorporated Terms. Section 8.1, Section 8.2 and Sections 8.5 through 8.14 of the Purchase Agreement are hereby incorporated into this Amendment as though fully set forth herein.


Isignamre pagefollowsl

4129-9148-2386.2


Docket No. 51802

IN WITNESS WHEREOF. the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.


By: t- l«L Name: ' JameaW]illama Title: vl'le MBGI"O¢Int

SOUTHWESTERN PUBL[C SERVICE COMPANY

By: \:jcuJ.1J--E 1·lu,-Name: P,cwi J TF • Title: p <·r.,EA rl 81/l,i:;~

bj, t/l 25bn


By: L- l,Pdc Title: lamooW:Il'4~6

Vice Pmqlrf¢,nt


Docket No. 51802

Execution Version

FIFTH AMENDMENT TO PURCHASE AND SALE AGREEMENT

This FIFTH AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is hereby made and entered into as of April 27, 2018 by and among Invenergy Wind Development North America LLC, a Delaware limited liability company ("Seller' '), Sagamore Wind Energy LLC, a Delaware limited liability company (the "Company"), and Southwestern Public Service Company, a New Mexico corporation ("Buyer").

WHEREAS, Buyer, Seller and the Company have entered into that certain Purchase and Sale Agreement, dated as of March 9, 2017, as amended pursuant to that certain First Amendment to Purchase and Sale Agreement, dated in April, 2017, that certain Second Amendment to Purchase and Sale Agreement, dated as of June 30, 2017, that certain Third Amendment to Purchase and Sale Agreement, dated as of November 6, 2017, and that certain Fourth Amendment to Purchase and Sale Agreement, dated as of March 29,2018 (as amended, the "Purchase Agreement"), pursuant to which Buyer agreed to purchase from Seller and Seller agreed to sell to Buyer all of the outstanding equity interests of the Company on the terms and subject to the conditions therein provided; and


NOW, THEREFORE, in consideration ofthe premises and the mutual agreements and covenants hereinafter set forth, Buyer, the Company and Seller hereby agree as follows:

SECTION 1. Amendment. The date referenced in Section 2.7(a)(iv) of the Purchase Agreement is hereby extended from April 30,2018 to May 31,2018.


SECTION 3. Modifications. Except as otherwise specifically modified by this Amendment, all other terms and provisions of the Purchase Agreement shall remain unmodified and in full force and effect. Nothing contained in this Amendment shall in any way impair the validity or enforceability of the Purchase Agreement, as modified hereby, or alter, waive, annul, vary, affect or impair any provision, condition or covenant contained therein or any right, power or remedy therein.

SECTION 4. Incorporated Terms. Section 8.1, Section 8.2 and Sections 8.5 through 8.14 ofthe Purchase Agreement are hereby incorporated into this Amendment as though fully set forth herein.


ISignature pagefollowsl


Docket No. 51802



_LQ Ke~ * pd ) Maine : kl b < Got el rTEA - M )

Title: Clt r € f/.O,U-•A

ruh By: LID 2

SOUTHWESTERN PUBL]C SERVICE COMPANY

By: ~ja~-n #u£:L·u Name: 12>o·,vt,A 'T, Nu.40-Title: ~42.,gt,4 ,(,r.4-


LU «0 < legal ~ l Reviewed/ By:

Name : ~ . 1 c~AA . l 154 ; 3 t Title: Je #%.< «:- cv €(D st JL.-C-~


Docket No. 51802 Execution Version

SIXTH AMENDMENT TO PURCHASE AND SALE AGREEMENT

This SIXTH AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is hereby made and entered into as ofNovember 26, 2018 by and among Invenergy Wind Development North America LLC, a Delaware limited liability company ("Seller"), Sagamore Wind Energy LLC, a Delaware limited liability company (the "Companv"), and Southwestern Public Service Company, a New Mexico corporation ("Buver )

WHEREAS, Buyer, Seller and the Company have entered into that certain Purchase and Sale Agreement, dated as of March 9,2017, as amended pursuant to that certain First Amendment to Purchase and Sale Agreement, dated in April, 2017, that certain Second Amendment to Purchase and Sale Agreement, dated as of June 30, 2017, that certain Third Amendment to Purchase and Sale Agreement, dated as of November 6, 2017, that certain Fourth Amendment to Purchase and Sale Agreement, dated as of March 29, 2018, and that certain Fifth Amendment to Purchase and Sale Agreement, dated as of April 27, 2018 (as amended, the "Purchase Agreement'), pursuant to which Buyer agreed to purchase from Seller and Seller agreed to sell to Buyer all of the outstanding equity interests of the Company on the terms and subject to the conditions therein provided; and



SECTION 1. Amendment. The Purchase Agreement is hereby amended as follows:

(a) The phrase "development of minerals," is hereby deleted in its entirety from the defined term "Proforma Title Policy."

(b) The following new definitions are hereby added in the appropriate alphabetical location in Section 1.1 of the Purchase Agreement:

" Easement Rights " is defined in Section 6 . 17 ( b ).

" Injinity Project ' means the ( i ) the Infinity Queue Position , ( ii ) any real property interests located within the shaded boundary described as the "Infinity Area" on the map attached hereto as Exhibit F, and (iii) any other development assets related to any of the foregoing.

"In#nity Queue Action" is defined in Section 6.17(c)

" Infinity Queue Position " means GEN - 2015 position # 056 ( 101 . 2 MW ) in SPP.

" IQA Notice " is defined in Section 6 . 17 ( c )

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Docket No. 51802

" Payment ' is defined in Section 6 . 17 ( c )

"Reduction" is defined in Section 2.2(a).

"Savings Amount" is defined in Section 6.17(c)

(c) The defined term "Subsequent Wind Farm" is hereby deleted in its entirety and replaced with the following:

"" Subsequent Wind Farm " means ( x ) if the Infinity Project has been acquired by Seller or an Affiliate of Seller, and provided that Seller performs its obligations under, and in accordance with, Section 6.17, any wind farm of which any wind turbine is located or proposed to be located within a radius of 15 rotor diameters of any wind turbine included in, or proposed to be included in, the Proj ect, measured in rotor diameters of the turbines included in, or proposed to be included in, such subsequent wind farm, with such measurements to be made from the center point of each wind turbine included in, or proposed to be included in, the Project or (y) if clause (x) above is not fully satisfied, any wind farm of which any wind turbine is located or proposed to be located within five (5) miles of any wind turbine included in, or proposed to be included in, the Proj ect."

(d) The defined term "Sufficient Project" is hereby deleted in its entirety and replaced with the following:

"" Sujjicient Project ' means ( x ) a total of 206 wind turbines locations , corresponding to 180- 2.2 MW V120 80m HH locations and 26- 2.OMW V110 80m HH locations, with an aggregate nameplate capacity of not less than the Expected Nameplate Capacity in a reasonably contiguous manner, (y) if Buyer exercises the Option (and no Reduction has occurred in which case clause (x) of this definition shall apply), a total of 138 wind turbines locations, corresponding to 112- 2.2MW V120 80m HH locations and 26- 2.OMW V110 80m HH locations, with an aggregate nameplate capacity of not less than the Reduced Nameplate Capacity in a reasonably contiguous manner, or (z) if the Expansion is exercised (and no Reduction has occurred in which case clause (x) of this definition shall apply), up to a total of 240 wind turbine locations in a reasonably contiguous manner, corresponding to 214- 2.2MW V120 80m HH locations and 26- 2.0 MW V110 80m HH locations, and anumber of alternate sites equal tothe equivalent of 1/20 of the number of 2.2 MW turbines required to provide the target capacity of the project (rounded up to the next whole number, e.g. for a 522MW target, 12 alternate turbine locations will be provided) for wind turbines that are reasonably contiguous to such planned turbine sites, in each case, consistent with and in accordance with all Laws, the Site Permit and prudent wind industry practices, and the ability to locate each of the following on the Real Property Interests in no particular manner: substations, collection circuits, an

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Docket No. 51802

operations and maintenance building, transmission lines (that can service the Project), and other windpower-related facilities, in each case, consistent with and in accordance with all Laws, the Site Permit and prudent wind industry practices; provided that, in any event, a Sufficient Project shall not exist if the Project Area delivered pursuant to Section 6.6(a)(xx) causes a Project Area Trigger Event or exceeds the Project Boundary of the map set forth on Schedule 6.6(a)(iii) as a result of giving effect to the Third Amendment to Purchase and Sale Agreement dated as of November 6, 2017; provided, further, that in no case will the Project have failed to qualify as a Sufficient Project solely as a result ofthe fact that wind turbine sites are located on Chat 2 Turbines Sites so long as (i) Seller has complied with its obligations in Section 6.6(a)(xx) hereof and (ii) no more than fourteen (14) wind turbine sites are located on Chat 2 Turbine Sites."

(e) Section 2.2(a)(i) is hereby deleted in its entirety and replaced with the following:

"( i ) Unless Buyer has previously exercised the Option , at any fime prior to five (5) business days from execution of that certain Sixth Amendment to Purchase and Sale Agreement between the Parties amending this Agreement, Seller may provide written notice (together, ifnecessary, with an updated Project Boundary map) to Buyer that the expected nameplate capacity of the Proj ect exceeds the Expected Nameplate Capacity (but in no case in an amount to exceed 522 megawatts in the aggregate) pursuant to a determination mutually agreed by Seller and Buyer of such expected nameplate capacity, which in any case shall be consistent with the definition of Sufficient Project (the "Expansion"). Subject to Buyer' s agreement with and, if applicable, the Parties' finalization of the new Proj ect Boundary map submitted by Seller pursuant to the preceding sentence, Buyer may accept or reject in writing the Expansion in its reasonable discretion and, if it accepts the Expansion, shall, subject to Section 2.2(a)(ii), pay to Seller, in addition to the Closing Purchase Price, an amount equal to sixty-five thousand dollars ($65,000) per megawatt of nameplate capacity for each megawatt above the Expected Nameplate Capacity, up to a maximum of 74 megawatts; provided, if the Expansion is accepted and, on or before the day that is ten (10) Business Days following Buyer's receipt of the last jinai DISISs pertaining to the Project, the latest DISIS with respect to the 74 MW queue position for the Project reflects aper kilowatt cost of greater than eighty-five dollars ($85) with respect to such position (an "Expansion Excess Cost Event"), then (without prejudice to Buyer's rights to subsequently exercise the Option) (A) Buyer may elect to reduce the namepiate capacity of the Project to 448 MW by providing written notice thereof to Seller and upon such election Buyer shall be responsible for 100% of that portion of Interconnection Costs, if any, that are in excess of an aggregate amount equal to a rate ofeighty-five dollars ($85) per kilowattfor such 448 MWProject, provided that if Buyer has not provided such written notice prior to the earlier to occur of the Closing Date or the date that is ten (10) Business Days following Buyer's receipt of the last final DISISs pertaining to the Project, Buyer shaH be deemed to ha¥e irre¥ocabiy waived its right to effect a Reduction, and (B) if solely as a result of the last final DISISs pursuant to which the Expansion Excess Cost Event arose Buyer has either

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Docket No. 51802

exercised its right to terminate this Agreement pursuant to Section 2.7(a)(x) or exercised the Option, Seller may, within ten (10) Business Days after receipt of Buyer's termination notice or Option exercise notice, as applicable, elect to reduce the namepiate capacity of the Project to 448 MW by providing written notice thereof to Buyer and upon such election Seller shail be responsible for 100% of that portion of Interconnection Costs, if any, that are in excess of an aggregate amount equal to a rate of eighty-five dollars ($85) per kilowatt for such 448 MW Project, provided that if Seller has not provided such written notice within such ten (10) Business Days, Seller shall be deemed to have irre¥ocabiy waived its right to effect a Reduction (the exercise by Buyer or Seller of such namepiate reduction of the Project to 448 MW being a " Reduction "). Buyer shall pay sixty - five thousand dollars ($ 65 , 000 ) per megawatt of nameplate capacity for any megawatt (x) above the number of megawatts ultimately used as the basis for determining the Closing Purchase Price plus the Expansion purchase price and (y) that is constructed on the Real Property Interests as long as the commercial operation date of such additional megawatt occurs prior to the earlier of (A) the date that is three (3) years following the commercial operation date ofthe Project and (B) the date that either Buyer or any of its Affiliates ceases to own the Purchased Assets (the Subsequent Purchase Price " and together with the Closing Purchase Price and

the Expansion purchase price , the " Airchase Price "). Notwithstanding anything to the contrary contained herein, the Purchase Price shall not include any reimbursement from Buyerto Seller of any Interconnection Costs or unused study costs pursuant to Section 6.6(a)(i). In the event Buyer accepts the Expansion, the new map of the Project Boundary agreed to by the Parties in accordance with the foregoing (if applicable) shall be attached hereto as, and replace the then existing, Schedule 6.6(a)(iii) and shall be the Project Boundary hereunder."

(f) The reference in Section 2.7(a)(iii) of the Purchase Agreement to "September 30,2018" is hereby deleted in its entirety and replaced with "January 31, 2019"

(g) Section 6.5 ofthe Purchase Agreement is hereby deleted in its entirety and replaced with the following:

"Real Propertv Purchase Option. Buyer shall identify to Seller one (1) Parcel as its first priority for the location of an operating and maintenance facility and two (2) Parcels as its first priority for the location of substations. Seller shall use its commercially reasonable efforts to cause the Company to obtain from the landowners of each Parcel identified by Buyer as its first priority an option to purchase such Parcel, in each case at a price and on terms and conditions substantially similar to those set forth in the form of option agreement attached hereto as Exhibit I or such other price, terms and conditions as are acceptable to Buyer ( each a " Real Property Purchase Option "). If Seller approaches a landowner identified by Buyer and such landowner refuses to sell or to agree to a price or other terms and conditions acceptable to Buyer, Seller shall, by December 1, 2018, use its commercially reasonable efforts to cause the Company to obtain Real Property Purchase Option(s) from the landowner(s) of the Parcel(s) identified by Buyer as its second priority (if any). If requested by Buyer, Seller

4129-4546-6131.10


Docket No. 51802

shall so pursue such first and second priority Parcels simultaneously to preserve Buyer's flexibility regarding placement of the Project's substations and collection system and T-line route(s) pending completion ofthe last final DISISs pertaining to the Proj ect. The foregoing shall correspondingly apply to any Parcel identified by Buyer as its third or other subsequent priority; provided Seller shall not be required to pursue Real Property Purchase Options for greater than six (6) Parcels in aggregate under this Section 6.5. The Parties acknowledge and agree that there may be, as a result of the foregoing, Real Property Purchase Option negotiations proceeding at one time with respect to more than one of the Parcels identified by Buyer. In no case shall the Company become party to more than one Real Property Purchase Option for the operating and maintenance facility or either of the two (2) substations without the prior written consent of Buyer. If a Parcel landowner refuses to sell its Parcel or refuses to sell on terms and conditions that are acceptable to Buyer, Seller shall not be in breach of this Section 6.5 with respect to such Parcel"

(h) Section 6.6(a)(xix) is hereby deleted in its entirety and replaced with the following:

"(xix) complete native prairie habitat mapping and a review of United States Department of Agriculture Conservation Reserve Program with respect to certain proposed locations for portions ofthe Site determined as follows:

(i) the wind turbines as set forth in the Project Boundary Map,

(ii) collection system and operations and maintenance building locations delivered by Buyer on or before August 31, 2018 pursuant to Section 6.16,

(iii) project substations locations delivered by Buyer on or before August 15, 2018 pursuant to Section 6.5;

(iv) road locations delivered by Buyer on or before August 31, 2018 pursuant to Section 6.16; and

(v) generation tie transmission line(s) locations to the Projects interconnection point(s) delivered by Buyer on or before September 28, 2018;

which such mapping and review with respect to the foregoing Seller shall deliver on or before September 30, 2018. After receipt thereof, Buyer's may review and provide comment regarding constructability input (crane paths and building corridors) to the extent provided on or before October 15,2018. The Parties may mutually agree to modify the site layout based on such comment and cause all affected parcels to be noted in the Survey;"

(i) Section 6.6(a)(xx) is hereby amended by inserting immediately after the last sentence appearing therein the following sentence:

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Docket No. 51802

"Seller agrees (i) not to locate any proposed turbine location within a 1,000 foot radius of any active oil wells depicted on the map attached hereto as Schedule 6.6(a)(xx-A), (ii) to obtain a surface use agreement substantially in the form attached hereto as Exhibit H with respect to (A) any land subject to a Land Contract that is within 1,000 feet from the location of any active oil wells depicted on the map attached hereto as Schedule 6.6(a)(xx-A) and (B) any land subject to a Land Contract, for which such land is also subject to a valid oil and gas lease and which is within a two (2) miles from the location of a collector substation, and (iii) to cause to be prepared, at its sole cost and expense, and provide to Buyer true, correct and complete copies of (x) the mineral title reports prepared by J.L. Oboum, Jr. & Co. and covering the applicable Real Property Interests, which have been made available to Buyer, and (y) all New Mexico Oil & Gas Association data utilized in the preparation of Schedule 6.6(a)(xx-A).

(j) A new Section 6.16 is hereby added immediately following Section 6.15 and shall read as follows:

"Section 6.16 Collection and Road Design. On or before (i) August 31,2018 Buyer shall deliver to Seller preliminary collection and operation and maintenance building design for the Site, and (ii) August 31, 2018 road design for the Site, in each case reflecting a design that assumes the Expansion has been accepted (but which shall not in any case be construed as an actual assumption of the Expansion) and that the nameplate capacity of the project will be 522 MW.

(k) A new Section 6.17 is hereby added immediately following Section 6.16 and shall read as follows:

"Section 6.17. Infinitv Proiect Acquisition

(a) Acquisition of Infinitv Proi ect. Seller shall keep Buyer reasonably informed regarding the progress and status of Seller's or its Affiliate's proposed acquisition of the Infinity Project or any portion thereof, including without limitation by providing, to the extent reasonably requested by Buyer, information and documentation in Seller's or its Affiliates' possession, or otherwise reasonably available to Seller or its Affiliate, pertaining to the Easement Rights and the Infinity Queue Position.

(b) Grant of Easement. If Seller, or its Affiliate, acquires all or any portion of the Infinity Project, Seller, or its Affiliate, shall at or before Closing (and in any case at the time reasonably required by Buyer to facilitate the necessary interconnection studies and interconnection approval processes with SPP) at Buyer's option, either (i) to the extent Seller or Affiliate acquires such rights and interests, grant to the Company or the Buyer non-exclusive easements in, on, over, across, along and above the real property interests of Seller or its Affiliate comprising the Infinity Proj ect, for, among other things, the installation, construction, use, repair, replacement, relocation and removal of

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overhead and underground electrical collection, transmission and interconnection lines, including wires, cables, conduit and appurtenances, towers and poles, communication lines, footings, foundations, crossarms, and all other related equipment, facilities and improvements and the right of access, ingress and egress thereto (the foregoing "Easement Rights") and/or (ii) use its commercially reasonable efforts to cause the landowners holding the fee interests underlying such real property interests to grant such Easement Rights directly to the Company or the Buyer, and the Seller or such Seller Affiliate shall take all such other actions necessary to facilitate such direct Easement Rights grant, in each of the foregoing cases pursuant to documentation in form and substance reasonably acceptable to Buyer and Seller. Unless an IQA Notice has been delivered, Buyer or Company shall use commercially reasonable efforts to locate any such collection, transmission and interconnection lines and related property across the real property interests comprising the Infinity Proj ect as close together as feasible and along the boundaries of landowner properties, in each case in accordance with applicable Law and prudent wind industry practices.

(c) Infinitv Interconnection Oueue Position. If Seller or its Affiliate acquires the Infinity Queue Position then, at Buyer's written request (an "IQA Notice"), Seller shall, or shall cause its Affiliate to (as applicable), take all commercially reasonable actions necessary or desirable to effectuate one ofthe following: (i) if consented to in writing by Buyer, assign all of its right, title and interest in the Infinity Queue Position to Buyer or its designee or (ii) terminate the Infinity Queue Position (each of the foregoing, an "Infinity Queue Action"). The particular Infinity Queue Action taken shall be at Seller's written election, acting promptly (but in any case initiated within 10 Business Days following receipt of the IQA Notice), reasonably, and after giving due consideration to Buyer's preference (which shall be stated in the IQA Notice); provided, that if Seller has elected to assign the Infinity Queue Position to Buyer, such assignment shall be pursuant to an assignment agreement in form and substance satisfactory to both Buyer and Seller in their respective reasonable discretion, and ifthe Parties are unable to agree on such assignment agreement within thirty (30) days following Seller's delivery of its written election, then Seller shall promptly take all actions necessary to terminate the Infinity Queue Position. Notwithstanding anything to the contrary contained herein, at any time prior to the consummation of the assignment of the Infinity Queue Position to Buyer, Seller or its applicable Affiliate may, without Buyer's consent, terminate the Infinity Queue Position if Seller has determined, acting reasonably and in good faith, that such termination is reasonably necessary to avoid the imposition on Seller or its applicable Affiliate of material additional liability, or to mitigate such material additional liability, as a result of an SPP action, demand, process or other requirement; providei that Seller shall first provide prompt notice to Buyer of its intent to terminate the Infinity Queue Position, consult with Buyer regarding an acceleration of a mutually agreed assignment or other possible solutions to mitigate such additional liability, and provide to Buyer a reasonable opportunity under the circumstances to negotiate with Seller such assignment and/or implement such other mitigation plan. If

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Docket No. 51802

an Infinity Queue Action occurs or Seller otherwise causes the Infinity Queue Position to be terminated, and to the extent the actual aggregate direct Interconnection Costs for the Project are reduced solely as a result of the Infinity Queue Action or such termination (i.e., but for the Infinity Queue Action or such termination such cost savings would not have been realized) (such cost reduction, the "Savings Amount"), then Buyer shall pay to Seller an amount equal to fifty percent (50%) of the Savings Amount (the "Payment"). The Payment shall be in addition to the Purchase Price and shall be paid at the later of (i) Closing and (ii) ten (10) Business Days following the date on which the Generator Interconnection Agreement in respect of the Proj ect has been executed and delivered by all parties thereto.

(1) A new "Section 6.18"is hereby added immediately following Section 6.17 and shall read as follows:

"Section 6.18. Wind Data. Buyer shall cause Company to provide to Seller, and Seller shall agree to receive, Wind Data prepared prior to the Closing Date by executing a wind data license agreement in the form attached as Exhibit G.

(m) By adding as a new "Exhibit F" (Infinity Area) the Exhibit F attached hereto.

(n) By adding as a new "Exhibit G" (Wind Data License) the Exhibit G attached hereto.

(o) By adding as a new 'fExhibit H" (Surface Use Agreement) the Exhibit H attached hereto.

(p) By adding as a new "Exhibit I" (Option Agreement) the Exhibit I attached hereto.

(q) By adding as a new "Schedule 6.6(a)(xx-A)" the attached Schedule 6.6(a)(xx-A) hereto.



SECTION 4. Incorporated Terms. Sections 8.1, Section 8.2 and Sections 8.5 through 8.14 of the Purchase Agreement are hereby incorporated into this Amendment as though fully set forth herein.


ISignature page follows-\

4129-4546-6131.10


Docket No. 51802


INVENERGYWINDDEVELOPMENTNORTH AMERICA LLC

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4129-4546-6131,10


Docket No. 51802



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4129-4546-6131.10


Docket No. 51802

EXHIBIT F

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4129-4546-6131.10

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Docket No. 51802

EXHIBIT G

Form of Wind Data License

4129-4546-6131.10


Docket No. 51802

EXHIBIT G

DATA LICENSE AGREEMENT

This DATA LICENSE AGREEMENT (this "License Agreemenf') is effective as of [ 1, by Sagamore Wind Energy LLC, a Delaware limited liability company ("Licenser"), in favor of and for the benefit of Invenergy Wind Development North America LLC, a Delaware limited liability company (together with its permitted successors and assigns, the "Licensee"; and together with Licensor, each a "Par(p" and collectively, the "Parties").

RECITALS

WHEREAS, Southwestern Public Service Company, a New Mexico Corporation ¢' Buyer "), Licensee and Licensor entered into that certain Purchase and Sale Agreement , dated March 9,2017 (as amended, the "Purchase Agreemenf'), pursuant to which, among other things, Licensee has agreed to sell to Buyer the Shares;

WHEREAS, Licensor owns the certain historical wind speed data and other relevant wind characteristics identified on Schedule 1 attached hereto and the Reports (collectively, the "Data"); and

WHEREAS, it is a closing deliverable under the Purchase Agreement that the Parties execute and deliver this License Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Capitalized terms used herein which are not defined herein shall have the meanings ascribed to them in the Purchase Agreement. Effective on the date hereof, on and subject to the terms and conditions set forth herein, Licensor hereby grants to Licensee a perpetual, royalty-free non-exclusive license to use the Data for any purpose other than to Implement or cause to be Implemented, or to permit any Other Seller Entity to Implement or cause to be Implemented a Subsequent Wind Farm, subject to and in accordance with the terms of the Purchase Agreement and any build-out agreement entered into pursuant to the requirements thereof.

2. The rights hereby granted are granted only to the extent that Licensor has the right and authority to grant such rights. The license to use the Data hereunder may be assigned or sub-licensed by Licensee to its Affiliates (as such term is defined below), subject to Licensee's confidentiality obligations in Section 8 and the other terms and conditions of this License Agreement.

3. Licensee shall reproduce and include any confidentiality, copyright or other proprietary rights or disclaimer notices contained in the Data on all full and partial copies of the Data.

4143-7625-9090.4


Docket No. 51802

4. The Data is supplied "as is" without any warranty as to their efficacy, accuracy or usefulness and, to the extent permitted by law, Licensor excludes all warranties, conditions or other terms that may be implied whether by law, statute or otherwise including, without limitation, ownership, non-infringement, implied warranties of merchantability or fitness for a particular purpose and implied warranties of custom or usage. Licensee (including any of its successors, assigns, sublicensees or transferees) shall not have the benefit of any condition, warranty or other term whatsoever, either express or implied, including any condition, warranty or other term as to merchantability, satisfactory quality, fitness for a particular purpose, title guarantee or use of reasonable care and skill. Licensor assumes no responsibility to correct, update or supplement the Data after the date of their delivery. Licensor shall not be liable in contract, tort or otherwise (including negligence) for any loss or damage, howsoever arising in connection with the Data or this License Agreement. FURTHERMORE, LICENSOR SHALL HAVE NO LIABILITY FOR ANY LOSS OF PROFIT, REVENUE OR OTHER ECONOMIC LOSS, NOR FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, WHETHER SUCH LOSSES OR DAMAGES ARE KNOWN, FORESEEN, FORESEEABLE OR UNFORESEEN

5. This License Agreement shall only be amended or rescinded by the written agreement of the Parties, which amendment or rescission shall be effective without the consent of any third party, even if, as a result, any right of athird party to enforce aterm ofthis License Agreement will be varied or extinguished.

6. This License Agreement sets out the entire agreement between the Parties relating to its subject matter and supersedes all prior oral or written agreements, arrangements or understandings between the Parties relating to such subject matter. Licensee acknowledges that it is not relying on any representation, agreement, term or condition which is not set out expressly in this License Agreement.

7. Licensee (including any of its successors, assigns, sublicensees or transferees) shall have no rights against, and LICENSEE HEREBY IRREVOCABLY AND FOREVER WAIVES, RELEASES AND COVENANTS NEVER TO SUE OR OTHERWISE ASSERT ANY CLAIM AGAINST LICENSOR OR ANY OF ITS AFFILIATES, WHETHER BASED IN CONTRACT, TORT, RELIANCE, MISREPRESENTATION OR ANY OTHER THEORY OR BASIS OF LAW OR EQUITY, WHETHER STATUTORY, COMMON LAW OR OTHERWISE, BASED ON OR PERTAINING TO, IN WHOLE OR IN PART, ANY OR ALL DATA, INCLUDING ANY ERRORS OR DEFECTS IN, OR INCOMPLETENESS OF, ANY OR ALL OF THE DATA

8. Licensee (including any of its successors, assigns, sublicensees or transferees) agrees to keep confidential the Data, the content ofthis License Agreement and any confidential information received from Licensor under or as a result of the Parties entering this License Agreement (the "Confidential Information"). Notwithstanding the foregoing, Licensee shall be allowed to share the Confidential Information with (i) any assignee or sublicensee permitted under the terms of this License Agreement that is subject to this confidentiality obligation; and (ii) its employees, affiliates, attorneys, advisors, consultants and potential or actual lenders, buyers, investors, or power buyers for the purposes of performing work or reviewing information related to this License Agreement, so long as such parties are under an obligation

2


Docket No. 51802

to treat the Data as Confidential Information in accordance with and otherwise on terms at least as restrictive as those set forth in this License Agreement and provided that such parties shall not have the right to share such Confidential Information with any other parties.

9. THIS LICENSE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, ENFORCED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW MEXICO, WITHOUT REGARD TO CONFLICTS OF LAWS RULES THAT REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

10. In this License Agreement unless the context otherwise requires:

"Affiliate" means, in relation to Licensor or Licensee, any other entity which directly or indirectly Controls, is Controlled by, or is under direct or indirect common Control with, that Party from time to time;

"Control" means that a person possesses, directly or indirectly, the power to direct or cause the direction of some or all of the management and policies of another person, whether through the ownership of voting shares, by contract or otherwise, and "Controls" and "Controlled" shall be interpreted accordingly.

11. To facilitate execution, this License Agreement may be executed in as many separate counterparts as may be convenient or required. It shall not be necessary that the signature of each Party, or that the signature of all persons required to bind any Party, appear on each counterpart. All counterparts shall collectively constitute a single instrument.

12. A person who is not a Party to this License Agreement is neither intended to be nor shall be deemed a third party beneficiary of this License Agreement. For purposes of clarification, this preceding sentence shall not operate to restrict or limit the rights of any permitted assignee to exercise the rights and benefits conferred on such assignee by its assignor. Except as set forth herein, Licensee may not assign, sublicense or transfer in any manner any of its rights or obligations under this License Agreement without Licensor's prior written consent, except that Licensee may assign or transfer its rights and obligations under this License Agreement to an entity that acquires all or substantially all of its business or assets to which this License Agreement relates (whether by merger, direct or indirect change of control, share exchange, combination or consolidation of any type, operation of law, purchase or otherwise). Any permitted assignee, sublicensee or other transferee shall agree in writing to be bound by the terms hereof.

13. The headings ofthis License Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning or interpretation hereof.

14. Notwithstanding anything to the contrary contained herein, including in Section 2 or Section 12 hereof, the Parties acknowledge and agree that Licensee may, without the prior consent of Licensor, assign or pledge this License Agreement and any or all rights hereunder to lenders or other financing parties as collateral or security for financing relating to any project or facility in which the Data is used.

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Docket No. 51802

15. The Parties acknowledge that remedies at law may be inadequate to protect Licensor against any actual or threatened disclosure of Data by Licensee, and, without prejudice to any other rights and remedies otherwise available, agree to the immediate granting of preliminary and final injunctive relief (without priornotice and without posting any bond) in favor ofLicensor to enjoin and restrain any actual or anticipatory release of Data by Licensee or any assignee, sublicensee or other transferee of Licensee hereunder.

ISignatures On Following Pagesl

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Docket No. 51802

IN WITNESS WHEREOF, each of the undersigned has caused this License Agreement to be duly executed on its behalf as of the date first written above.

Licensor:

Sagamore Wind Energy LLC, a Delaware limited liability company

By: Name: Title:

Signature Page to Wind Data License Agreement


Docket No. 51802

Licensee:

Invenergy Wind Development North America LLC, a Delaware limited liability company

By: Name: Title:

Signature Page to Wind Data License Agreement


Docket No. 51802

SCHEDULE 1 TO

DATA LICENSE AGREEMENT

Met Tower and Wind Data

Mast

Site GPS Coordinates (NAD83) Elevation Above

Latitude Longitude Ground Level (ft)

Wind Speed Monitoring Heights (m)

Measurement Decommissioning Commencement Date

Date

Wind Data: All raw wind data collected from the foregoing met towers from the measurement commencement date described above, including but not limited to wind speed, direction, temperature, and barometric pressure.

-1-


Docket No. 51802

EXHIBIT H

Form of Surface Use Agreement

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Docket No. 51802

FORM OF SURFACE USE AGREEMENT

This Surface Use Agreement ("Agreement") is dated and effective as of this day of , 20 by and between (" Surface

Owner n. ("Operator") and SAGAMORE WIND ENERGY LLC, a Delaware limited liability company (" Sagamore") (Surface Owner, Operator and Sagamore may also be referred to herein individually as "Party" an collectively as "Parties").

RECITALS

A. Surface Owner owns the surface estate on certain lands in Roosevelt County, New Mexico, which lands are described on Exhibit A, attached hereto and incorporated herein by reference ("Property").

B. ("Mineral Owner") owns the mineral estate under portions of the Property as described on Exhibit B, attached hereto and incorporated herein by reference ("Mineral Lands"). Mineral Owner has entered into that certain [Oil and Gas Lease dated

, 20 , ("Oil Lease")] as to the Mineral Lands with Operator.

C. Operator has the right to use a reasonable portion of the surface estate of the Property for exploitation of the mineral estate therein ("Mineral Activities").

D. Sagamore and Surface Owner entered into that certain [Wind Energy Lease/Grant of Easement/Wind Lease and Easement Agreementl dated , 20 , as amended from time to time (the "Wind Lease") and evidenced by that certain Memorandum of [Wind Energy Lease/Grant of Easement/Wind Lease and Easement Agreementl dated

,20 and recorded , 20 in the real property records of Roosevelt County, New Mexico.

E. Surface Owner and Sagamore desire, and Operator is willing, to provide rights and obligations for use of the Property by Operator for mineral exploitation, by Sagamore for wind energy development under the Wind Lease and Surface Owner's use.

AGREEMENT

1. LAND USE BY OPERATOR

1.1 License. Surface Owner licenses to Operator the non-exclusive right to use the Mineral Lands for the purposes stated in Section 2.1 and under the terms set out in this Agreement.

1.2 Existing Agreements. This Agreement and Operator's rights in the Mineral Lands pursuant to this Agreement are subject to all easements, rights-of-way, licenses, leases and other agreements affecting the surface or subsurface ofthe Property that are of record or known to Operator, including specifically and without limitation, the Wind Lease.


Docket No. 51802

1.3 Future Grants. Surface Owner reserves the right to grant easements, rights-of-way, licenses, leases and other agreements to third parties covering the Mineral Lands, so long as they do not unreasonably interfere with the rights granted to Operator under this Agreement.

1.4 Surface Owner Reservations. Surface Owner, on behalf of itself and its tenants, and assigns, including without limitation, Sagamore, retains the right of ingress to and egress from the Mineral Lands and the right to use the Mineral Lands for any purposes to the extent they do not unreasonably interfere with Operator's rights under this Agreement.

1.5 Relinquishment of Surface Outside of the Mineral Lands. Operator, for itself, its agents, lessees, licensees, successors and assigns, including any operator or unit operator from time to time in charge of operations under a unitization agreement, and their respective successors and assigns, hereby waives, releases, relinquishes and quit claims to Surface Owner, all rights to enter the Property, for any purpose in connection with the exploration, development, or extraction of any oil, gas or minerals, except for the right to use the surface ofthe Mineral Lands on the terms and conditions ofthis Agreement.

2. PURPOSE

2.1 Permitted Purposes. Operator has the right to use the Mineral Lands solely for the following purposes:

(A) Operating and maintaining the facilities identified on Exhibit C;

(B) Maintaining and repairing roads identified on Exhibit C;

(C) Operating, maintaining, and abandoning the wells listed on Exhibit C at their specified surface location on the Mineral Lands as identified on Exhibit C; and

(D) Operating and maintaining any pipeline identified on Exhibit C.

2.2 Access. Surface Owner grants Operator the non-exclusive right of ingress and egress to, over, upon, through and across the Property at points identified on Exhibit A or as specified in writing by Sagamore on behalf of Surface Owner, for all purposes necessary or incidental to the exercise of Operator's rights under this Agreement. Operator does not have the right of ingress to or egress from the Mineral Lands other than as specified in accordance with the prior sentence. Prior to entering upon the Mineral Lands to conduct any non-routine operation or non-routine maintenance, Operator shall notify and coordinate access to the Mineral Lands with Sagamore. If Surface Owner at any time notifies Operator in writing that it wants notice of any access Operator makes for a specific purpose, said purpose will be deemed non-routine under this Agreement. Operator does not have the right to use any roads or facilities built and maintained by Sagamore without Sagamore's prior written consent.

2.3 Limited Rights. Except as stated herein, from and after the Effective Date, Operator does not have, and hereby releases, waives and relinquishes to Surface Owner, the right to drill wells or construct roads, pipelines or facilities on the Mineral Lands without Surface Owner's and Sagamore's prior written consent, that Surface Owner and Sagamore have the right to reasonably withhold or provide with conditions. To seek such consent, Operator shall provide Surface Owner and Sagamore with a survey plat of the


Docket No. 51802

proposed well locations, roads, pipelines or facilities prepared by a licensed surveyor, flag or stake the surveyed locations in the field, and attend any field review requested by Surface Owner and Sagamore. No such construction shall in any way interfere with any Windpower Facilities (as defined in the Wind Lease) constructed on the Property.

3. ACTIVITIES ON THE LAND

3.1 Prudent Operations. Operator shall perform all activities under this Agreement in a prudent, safe, and workmanlike manner. Operator shall keep the Mineral Lands, and all wells and facilities thereon in a good and safe condition and shall take all reasonable steps to ensure the Property outside of the Mineral Lands is not affected by its activities under this Agreement. If the Property outside of the Mineral Lands is affected by Operator's activities, Operator will remediate and restore the Property to Surface Owner's reasonable satisfaction.

3.2 No Interference with Surface Owner's or Sagamore's Use. Operator will build, maintain and operate on the Mineral Lands in such a manner that Operator's operations on the Mineral Lands do not unreasonably hinder or prevent the use and enjoyment of Surface Owner, Sagamore, or Surface Owner's lessees, licensees, grantees, permittees or invitees ofthe Property.

3.3 Notice of Planned Activities. Operator shall give ten days advance notice of Operator's planned construction or reclamation activities under this Agreement to all persons holding any rights, licenses, permits, and/or easements of record or if unrecorded, of which Operator has received notice oftheir right to use the Property.

3.4 Roads and Improvements.

(A) Operator shall promptly replace, rebuild or restore to Surface Owner's reasonable satisfaction any and all parts of any roads or other improvements damaged by Operator's activities.

(B) Operator shall immediately notify Sagamore and Surface Owner of any damage requiring Operator's action under this Section 3.4.

(C) Operator shall maintain all roads it is authorized to use under this Agreement in a manner to control dust and minimize erosion.

3.5 Activities to be Performed under this Agreement. All activities permitted pursuant to this Agreement shall be performed by or under the direction of Operator. Operator shall not permit any third party to use or benefit from any facilities it constructs hereunder; provided, however, Surface Owner acknowledges that non-operating owners of an interest in the oil, gas and other minerals covered by the Mineral Lands, may benefit from Operator's exercise of rights under this Agreement, but will not have any right to enter the Mineral Lands or conduct any activity under this Agreement.

3.6 Weeds. Operator shall control all invasive weed species on the Mineral Lands.

3.7 Good Repair: No Litter. Operator and its contractors, and their subcontractors, shall maintain the Mineral Lands in good repair, clear of debris, refuse and litter, and shall do the same for the Property if their activities under this Agreement affect the Property. If


Docket No. 51802

Surface Owner notifies Operator of any refuse, litter, or debris on the Mineral Lands or adjacent lands caused by Operator's operations, Operator shall remove it and clean the affected property within seven days of such notification.

3.8 Improvements. Operator shall maintain all improvements, fences, gates and cattle guards on the Mineral Lands.

3.9 Fences.

(A) Operator has the right to cross fences that intersect uses or access routes specified on Exhibit A. Operator shall maintain a proper enclosure at all times and shall restore fences to a condition equal to or better than their condition prior to Operator's crossing as soon as crossing is completed.

(B) Surface Owner reserves the right for itself and for any tenant, including without limitation, Sagamore, to fence the whole or any part of the boundaries of the Mineral Lands, and to build fences crossing the Mineral Lands to the extent such fences do not unreasonably interfere with Operator's rights under this Agreement. Surface Owner and Sagamore may deny Operator access to fenced areas containing Sagamore's facilities or Surface Owner's facilities unless access is necessary to carry out operations allowed under this Agreement.

(C) Surface Owner reserves the right for itself and for any tenant, including without limitation, Sagamore, to deny Operator access, by fence, gate, or other barricade, to any facilities associated with Sagamore's operations in accordance with the Wind Lease, so long as Operator does not require access to the inaccessible area in furtherance of its operations under this Agreement.

3.10 Liens. Operator shall pay all claims for labor and materials furnished on its behalf and shall defend, indemnify and hold Surface Owner harmless against all liens filed against Surface Owner's lands as a result of Operator's activities under this Agreement and all claims incurred and/or paid in connection with same.

4. COORDINATION AND CONSULTATION WITH TENANT

4.1 Coordination with Sagamore.

(A) Operator shall work in cooperation with Sagamore to coordinate all Operator's activities under this Agreement.

(B) At least ten days prior to beginning any work under this Agreement, Operator shall meet with Sagamore at a mutually agreeable time to review Operator's plans and timetable for such work. Prior to any construction activities by Operator, Operator and Sagamore will conduct a pre-construction walk through meeting with, at a minimum, Operator's representative(s) and construction contractor(s) hired by Operator to perform work hereunder.

(C) Operator shall arrange for Operator's representative(s) and construction contractor(s) to receive a site specific orientation from Sagamore and/or Surface Owner prior to accessing the Mineral Lands. During the orientation, Sagamore and/or Surface Owner shall address issues, including identification of access


Docket No. 51802

roads, lands that are and are not part of the Agreement and any other requirements for Operator's operations. Operator shall be responsible for ensuring that all employees, contractors, agents and any other parties performing work under this Agreement on behalf of Operator comply with directions from Sagamore and Surface Owner. Operator shall also participate in additional site specific orientations with Sagamore and/or Surface Owner as required by Sagamore and/or Surface Owner for construction and post construction activities. Any consultation with Operator, and any orientation or monitoring by Surface Owner or Sagamore of activities conducted by or under the direction of Operator, is for the sole benefit of Surface Owner and/or Sagamore, as applicable, and shall not create any duty or obligation to Operator or any other person.

4.2 Consultation with Agencies. At least thirty days prior to any consultation with any local, state or federal agency or authority whose rules or regulations govern Operator's actions on Surface Owner's lands; or agreeing to any condition or best management practice that may relate to any lands Surface Owner owns, Operator shall submit for Surface Owner's and Sagamore's review and approval all plans, presentations, conditions, or best management practices Operator intends to discuss or adopt. Operator shall invite and schedule all meetings to include Surface Owner and Sagamore who may attend at their discretion, and all required governmental agencies. Consultations will be scheduled at least thirty days in advance and at reasonable dates and times that will ensure the highest likelihood of all critical parties attending the meeting. Operator must record minutes of all consultations and send a copy of same to Surface Owner and Sagamore at addresses set out for notices under this Agreement.

4.3 Proposals That Impact Mineral Lands. All proposals involving or impacting use or designation of use of any portion of Surface Owner's lands require advance review and written approval of Surface Owner and Sagamore. Operator shall deliver a copy of any draft land use proposal to Surface Owner and Sagamore at least thirty days in advance of any consultation or submittal prior to consultation. Operator shall not conduct any work associated with such proposal until receiving both Surface Owner's approval and Sagamore's approval therefor, which Surface Owner and Sagamore has the right to withhold for any reason or no reason.

4.4 Emergencies. Notwithstanding anything in this Section 4 to the contrary, Operator and its representatives shall be permitted to access the Mineral Lands in order to conduct emergency operations in the event of any actual or threatened danger to human life, property or the environment without first providing Surface Owner or Sagamore notice; provided that Operator shall notify Surface Owner and Sagamore of such access within 48 hours thereof.

5. REMOVAL OF PROPERTY.

5.1 Disposition on Termination. Except as stated below, buildings, improvements, material, machinery, equipment and other property that may be constructed or placed on the Mineral Lands by Operator will remain the personal property of Operator and Operator has the right at any time during the term of this Agreement and for ninety (90) days thereafter to remove all or part of it without compensation to Surface Owner. All removal operations performed by Operator will be done in a manner that does not unreasonably


Docket No. 51802

interfere with Surface Owner's use or with Sagamore's use under the terms of the Wind Lease.

5.2 Failure to Remove. If Operator fails to remove all or part of its personal property as contemplated by Section 6.1, Surface Owner has the right to do so. If Surface Owner exercises such right, Operator shall reimburse Surface Owner for Surface Owner's costs to do so and restore the Mineral Lands to its original condition. If, within sixty days after Surface Owner removes Operator's personal property, Operator does not fully reimburse Surface Owner for any of such costs, then in addition to Surface Owner's other rights under this Agreement, Surface Owner may dispose of the removed personal property, retain any proceeds from the sale thereof, and recover from Operator any deficiency.

6. REMEDIES

6.1 If Operator defaults on any obligation or breaches any provision of this Agreement, Surface Owner may:

(A) Perform the obligations Operator has failed to perform, in which case, Operator will be liable to reimburse Surface Owner for all expenses incurred by Surface Owner in doing so and in enforcing that obligation; or

(B) Enter upon the Mineral Lands to cure any default with right of recovery against Operator for all expenses incurred in such cure.

6.2 All Surface Owner remedies are cumulative and Surface Owner retains the right to pursue any ofthe remedies without precluding pursuit of any other remedy.

6.3 If Operator, or any of Operator's agents, employees, or contractors, causes damage to any of Sagamore's facilities, either directly or indirectly, Operator shall compensate Sagamore for all resulting damages including, but not limited to the cost of repairing the affected facilities, any cost for expedited repairs, and any lost revenue resulting from the daniage.

7. RESTORATION AND RECLAMATION

7.1 Restoration Activities and Final Reclamation. Operator shall perform the following at its sole cost following any construction, surface disturbance, or upon termination of this Agreement:

(A) Restore and reclaim all areas disturbed as the result of activities permitted under this Agreement to their original condition or as near as practicable to their original condition within ninety (90) days of any completion of any construction or work that disturbs the surface ofthe Mineral Lands or upon termination ofthis Agreement, and fully restore the entire surface of the Mineral Lands to its original or better condition. Operator will conduct restoration and reclamation work in consultation with Surface Owner.

(B) Remove and replace top soil.

(C) To Surface Owner's reasonable satisfaction, properly backfill and compact disturbed ground, excavated pipeline trenches, and other excavations in


Docket No. 51802

connection with its activities on the Mineral Lands. Operator shall compact disturbed areas by using hydro-compaction or other method that accommodates compaction which meets or exceeds existing native soil compaction conditions, followed by replacement of topsoil, free of stones and other debris. Operator shall also permanently restore to field grade any settling or slumping in Surface Owner's fields and pastures caused by activities permitted under this Agreement.

(D) If any activity involves disposal of material, Operator shall consult with Surface Owner to determine agreed upon method and location for disposal material. No disposal of any material is allowed on the Property, Mineral Lands or other land owned by Surface Owner without Surface Owner' s written consent, which may be withheld for any reason or no reason, or granted with conditions. If consent is given subject to any conditions, Surface Owner shall in its sole discretion determine whether said conditions have been fulfilled. If Surface Owner determines the conditions are not fulfilled, the conditional consent will be void.

(E) Reseed the Mineral Lands and the Property if Operator's activities under this Agreement affect same, with mulch and seed mixes approved by Surface Owner.

7.2 Notice to Surface Owner. Operator shall notify Surface Owner by telephone within twenty-four (24) hours of the occurrence of any ground disturbance requiring restoration under this Section 8 and shall thereafter consult with Surface Owner regarding the action Operator is to take to conduct restoration in accordance with this Section 8 and the time by which restoration is to be complete.

COMPLIANCE WITH APPLICABLE LAW.

8.1 Compliance and Indemnitv.

Operator shall comply with all applicable federal, state, tribal and local laws and with all rules, regulations and orders of all regulatory authorities having jurisdiction that may be in effect from time to time. Without limiting such obligation, Operator shall not discharge, release, dump, bury or store on or adjacent to the Mineral Lands, or in any water or waters on, adjacent to or in the area of the Mineral Lands, for purposes of disposal, oil, chemicals, toxic substances or materials, and hazardous wastes or substances of any kind, except Operator has the right to store materials it will use during its drilling, completion, production, or re-completion activities. Operator shall maintain an inventory of such materials on location that will be available to Surface Owner upon request. OPERATOR INDEMNIFIES AND HOLDS SURFACE OWNER AND SAGAMORE HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS ARISING OUT OF OR CONNECTED WITH THE NON-COMPLIANCE WITH OR VIOLATION BY OPERATOR OF ANY OF THIS SECTION 9.

8.2 Governmental and Professional Authorizations. Operator shall, and shall cause its contractors, subcontractors, agents, and invites to, maintain all licenses, permits, consents, approvals or other authorizations from all governmental or professional or other bodies having jurisdiction which are necessary for the performance of activities permitted under this Agreement.


Docket No. 51802

9. INDEMNIFICATION AND INSURANCE

9.1 OPERATOR INDEMNIFIES AND HOLDS SURFACE OWNER AND SAGAMORE HARMLESS FROM LIABILITY, LOSS, DAMAGE, AND COST ARISING OUT OF CLAIMS BY PERSONS OR ENTITIES FOR INJURY TO PERSONS OR PROPERTY CAUSED BY OPERATOR OR ANY OF OPERATOR'S ASSIGNS, SUCCESSORS, EMPLOYEES, AGENTS, AND CONTRACTORS.

9.2 Operator shall keep its operations under the Oil Lease and this Agreement insured, or comply with applicable self-insurance laws and regulations, for automobile, liability, and workmen's compensation insurance, and for any damages incurred on the Mineral Lands. Operator shall provide proof of insurance to Surface Owner with coverage of at least the statutorily required amount for the workmen's compensation insurance and one million dollars with respect to the other policies, and with Surface Owner and Sagamore listed as additional insured parties on such policies (except the workmen's compensation policy) to the extent of the liabilities and obligations assumed by Operator under this Agreement. Operator shall require that its contractors and subcontractors carry similar classes of insurance at the same level, and certificates of such insurance shall be made available for inspection by Surface Owner upon request.

10. GOVERNING LAW, VENUE AND DISPUTE RESOLUTION

10.1 This Agreement is governed by and interpreted under the laws of the State of New Mexico, without regard to its choice of law rules.

11. NOTICES.

11.1 All notices provided for hereunder shall be in writing and shall be deemed given and received: (a) when personally delivered; (b) seventy-two (72) hours after the same is deposited in the United States mail, postage prepaid, registered or certified mail, return receipt requested; or (c) two (2) business days after the same is deposited with a reputable overnight courier such as Federal Express or UPS, addressed to the applicable party at the address indicated above for such Party.

11.2 The address listed for notice in this Agreement for each Party may be changed by said Party by sending written notice ofthe change to the other Parties hereto.

12. THIRD PARTY RIGHTS. No Person who is not a party to this Agreement has any rights under this Agreement or to enforce any provision in this Agreement.

13. GENERAL PROVISIONS

13.1 Amendment. This Agreement cannot be amended orally or by performance. No amendment to this Agreement is effective unless made in writing and signed by authorized representatives of all Parties (to the extent such Parties continue to have any recorded interest in the Property.)

13.2 Term. This Agreement shall be effective as of the date shown above in the first paragraph of this Agreement and shall remain in force and effect as to all of the Mineral Lands for so long as Operator, or any of Operator's successors and assigns, conducts operations in accordance with the Oil Lease; provided, however, that any obligation or


Docket No. 51802

liability of the Parties hereunder that arises or accrues during the term of this Agreement shall survive such termination.

13.3 Waiver. A Party' s failure to pursue remedies for breach of this Agreement does not constitute a waiver by that Party of any breach of this Agreement by any other Party or raise any defense against claims against the other Party for breach of this Agreement. The waiver or failure to require the performance of any covenant or obligation contained in this Agreement or pursue remedies for breach of this Agreement does not waive a later breach ofthat covenant or obligation.

13.4 Severabilitv. Each provision of this Agreement is severable and if any provision is determined to be invalid, unenforceable or illegal under any existing or future law by a court, arbitrator of competent jurisdiction or by operation of any applicable law, this invalidity, unenforceability or illegality does not impair the operation of or affect those portions of this Agreement that are valid, enforceable and legal, unless the deletion of such provision or provisions would result in such a material change so as to cause completion ofthe transactions contemplated herein to be unreasonable.

13.5 Time of Essence. Time is of the essence of this Agreement.

13.6 Drafting. This Agreement has been prepared as a joint effort of the Parties and the Agreement will not be construed more severely against one ofthe Parties than against the other.

13.7 Counterparts. This Agreement can be executed in counterparts, each of which is deemed an original of this Agreement, and which together constitutes one and the same instrument. When executed in counterparts, no Party is bound to this Agreement until all Parties have executed and delivered to each ofthe other Parties an executed counterpart.

13.8 Successors and Assigns. The provisions of this Agreement shall run with the Property, and shall bind and benefit the Parties' heirs, representatives, executors, successors and assigns.

13.9 Limitation on Indemnification. To the extent, if at all, a court of competent jurisdiction determines that Sections 56-7-1 or 56-7-2 NMSA 1978 apply to any indemnification provisions in this Mortgage, including certain types of insurance coverage as set forth in Sections 56-7-1 & -2 NMSA 1978, such provisions shall not extend to liability, claims, damages, losses or expenses, including attorney fees, arising out of bodily injury to persons or damage to property caused by or resulting from, in whole or in part, (i) the negligence, act or omission of the indemnitee or additional insured, as the case may be, its officers, employees or agents (ii) the sole or concurrent negligence of an independent contractor who is directly responsible to the indemnitee, or (iii) an accident that occurs in operations carried on at the direction or under the supervision of the indemnitee, an employee or representative of the indemnitee or in accordance with methods and means specified by the indemnitee or employees or representatives of the indemnitee. Further, should a court of competent jurisdiction determine that Sections 56-7-1 and/or 56-7-2 apply to any indemnification provision in this Agreement, such provision shall be modified, if required, by the provisions of 56-7-1(B) NMSA 1978.

\Signature pages follow-\


Docket No. 51802


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SURFACE OWNER:

STATE OF

COUNTY OF

This instrument was acknowledged before me on , by

(Seal) Notary Public

My commission expires:


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OPERATOR:

By Name: Title:

STATE OF

COUNTY OF

This instrument was acknowledged before me on , by as of

, a corporation.




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SAGAMORE:

SAGAMORE WIND ENERGY LLC, a Delaware limited liability company

By: Name: Title:

STATE OF

COUNTY OF

This instrument was acknowledged before me on , by as of

, a corporation.




Docket No. 51802

EXHIBIT A "Property"


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EXHIBIT B "Mineral Lands"


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EXHIBIT C Facilities, Roads, Wells and Pipelines located on Mineral Lands


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EXHIBIT I

Form of Option Agreement

4129-4546-6131.10


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OPTION AGREEMENT

This Option Agreement is made and entered into as of

201_ ("Effective Date"), by and between (collectively, "Seller"), and

[Sagamore Wind Energy LLC, a Delaware limited liability companyl ("Sagamore" or

"Purchaser").

Purchaser desires to secure the exclusive option to purchase certain real

property in Roosevelt County, New Mexico owned by Seller, and Seller desires to grant such

option to Purchaser, pursuant to the terms and conditions hereinafter set forth.

Accordingly, Seller and Purchaser agree as follows:

1. Definitions. The following terms shall have meanings set forth below:

1.1 Agreement. This Agreement, including the following exhibits

attached hereto and made a part hereof:

Exhibit A: Depiction or Legal Description of the Property Exhibit B: Form of Short Form Option Agreement

1.2 Approvals. As defined in Section 8.

1.3 Extended Term. If the initial Term of this Agreement is

extended pursuant to Section 4, the period for each such extension, which shall commence as

of the end of the initial Term or the immediately prior Extended Term, and end sixty (60)

days thereafter.

1.4 Option. The option to purchase the Property granted in

Section 2.

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1.5 Option Consideration. An initial payment of [Ten Thousand

Dollars ($10,000.00) to Twenty-five Thousand Dollars ($25,000.00)], made by Purchaser in

accordance with Section 3, together with any Term Extension Payments made by Purchaser.

If Purchaser proceeds to Closing, the Option Consideration, including Term Extension

Payments, will be applied against the Purchase Price, as provided herein.

1.6 Option Notice. The notice of exercise of the Option for the

Property.

1.7 Permitted Exceptions. Taxes not yet due and payable for the

year of Closing and the matters deemed to be "Permitted Exceptions" pursuant to Section 7.

1.8 Proi ect. The development of the Property for utility purposes,

including electric transmission and substation facilities.

1.9 Property. The real property, together with all improvements

located thereon, if any, located in Roosevelt County, New Mexico, and legally described on

Exhibit A, and consisting of approximately forty (40) acres.

1.10 Purchase Price. [Twenty Thousand Dollars ($20,000.00) to One

Hundred Thousand Dollars ($100,000.00)]

1.11 Term. The initial term of this Agreement, and the Option herein

granted, together with the Extended Term(s), if applicable. The initial Term is for a period of

three hundred and sixty-five (365) days, commencing on the Effective Date.

1.12 Term Extension Payment. Ione Thousand Dollars ($1,000.00)

to Five Thousand Dollars ($5,000.00)] as consideration for each Extended Term, if

applicable, pursuant to Section 4.

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1.13 Title Company. Chicago Title Insurance Company

1.14 Title Commitment. A commitment for a 2006 ALTA Owner's

Policy of Title Insurance for the Property, in the amount of the Purchase Price, issued by the

Title Company, showing Seller as fee owner of the Property and all encumbrances, liens and

other matters of record to which Seller's title to the Property is subject, and stating the

requirements to delete all standard exceptions to coverage.

2. Grant of Option. Upon and subject to the terms and conditions hereinafter set

forth, Seller hereby grants and sells to Purchaser, and Purchaser hereby accepts, the exclusive

and irrevocable option to purchase the Property. Prior to the exercise of the Option, this

Agreement shall constitute an option with respect to the Property. Upon exercise of the

Option, this Agreement will, without further act, be converted to a purchase agreement with

respect to the Property.

3. Consideration for Option. Within thirty (30) business days following mutual

execution of this Agreement, Purchaser shall pay the initial Option Consideration to Seller.

4. Extension of Term. Purchaser may extend the Term for up to three (3)

Extended Terms. Purchaser may exercise the option to extend prior to the expiration of the

initial Term or any Extended Term, as applicable, by: (a) delivering written notice to Seller;

and (b) delivering payment to Seller for the Term Extension Payment applicable to such

Extended Term.

5. Exercise of Option. The Option may be exercised by Purchaser giving written

notice of exercise of the Option (the "Option Notice") to Seller at any time prior to the end of

the Term. Notwithstanding anything contained herein, the Option shall not expire or lapse

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upon any failure of Purchaser to deliver the Option Notice or any Term Extension Payment in

accordance with Section 4 until Seller provides written notice to Purchaser of such failure

and Purchaser fails within ten (10) days after such notice to deliver to Seller the Option

Notice and/or any Term Extension Payment.

6. Closing.

6.1 Closing Date. The closing of the purchase of the Property (the

"Closing") shall occur on (a) the first business day which is sixty (60) days after the date of

exercise of the Option; or (b) an earlier date set for closing by Purchaser giving ten (10)

business days' notice to Seller any time after the exercise of the Option (the "Closing Date").

The Closing shall be held at 10:00 a.m. on the Closing Date at the offices of the Title

Company, or at such other place, date, and time as Seller and Purchaser may agree.

Purchaser and/or Seller at their option may deposit their respective Closing deliveries

described in the Sections entitled "Closing Deliveries by Seller" and "Closing Deliveries by

Purchaser" with Title Company, on or before the Closing Date, with appropriate instructions

for recording and disbursement consistent with this Agreement.

6.2 Closing Deliveries bv Seller. At the Closing, Seller shall

execute and, where appropriate, acknowledge, and/or deliver to Purchaser the following:

6.2.1 A special warranty deed to the Property, subject only to

Permitted Exceptions.

6.2.2 A settlement statement consistent with this Agreement.

6.2.2 Legal and actual possession of the Property.

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6.2.3 All customary documents and instruments which (a)

Purchaser or Title Company may reasonably determine are necessary to transfer the Property

to Purchaser subject only to the Permitted Exceptions, (b) Purchaser or Title Company may

reasonably determine are necessary to evidence the authority of Seller to enter into and

perform this Agreement and the documents and instruments required to be executed and

delivered by Seller pursuant to this Agreement, (c) Title Company may require as a condition

to issuing the Title Policy described in Section 7, including any seller's affidavits or

agreements; or (d) may be required of Seller under applicable law, including any revenue or

tax certificates or statements.

6.2.5 A transferor's certification, in form and substance

reasonably satisfactory to Purchaser, stating that Seller is not a foreign person, corporation,

partnership, trust or estate as those terms are defined in the Internal Revenue Code and

Income Tax Regulations.

6.2.6 Payment of the recording fees for the deed described in

6.2.1, and any applicable other tax on the conveyance of the Property.

6.3 Closing Deliveries bv Purchaser At Closing Purchaser will: (a)

pay the Purchase Price, as adjusted as provided in Section 6.4, less the amount of the Option

Consideration, by certified or bank cashier's check or by wire transfer of immediately

available funds; and (b) execute and deliver to Purchaser a settlement statement consistent

with this Agreement.

6.4 Closing Adiustments. The following adjustments shall be made

at the Closing:

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6.4.1 General real estate taxes in respect of the Property due

and payable in the year of closing shall be prorated on a daily basis as of the Closing Date,

with Seller responsible for those allocable to the period prior to the Closing Date and

Purchaser responsible for those allocable subsequent thereto. In the event the Property is not

a separate tax parcel as of the date of Closing, the tax liability allocable to the Property shall

be determined by the following formula: tax liability of the land value of the parcel

containing the Property x (gross land area of the Property + gross land area of the parcel

containing the Property). If the valuation for tax purposes for the parcel containing the

Property includes improvements, the tax liability for the improvements will be allocated to

Seller.

6.4.2 Seller shall pay in full at the Closing all general and

special assessments (and charges in the nature of or in lieu of such assessments) levied or

pending as of the Closing Date in respect of the Property.

6.4.3 Seller shall pay all title charges for the issuance of the

Title Commitment and the premium for an owner' s title insurance policy for the Property, in

the amount of the Purchase Price, including the deletion of pre-printed exceptions (the "Title

Policy"). Purchaser shall pay for any endorsements to the Title Policy requested by

Purchaser.

6.4.4 Any closing or escrow fee payable to the Title Company

shall be borne equally by Seller and Purchaser.

6.4.5 Each party will pay their own attorney fees, except as

provided in Section 13.

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If any of the amounts to be apportioned under this Section cannot be calculated

with complete precision because the amount or amounts of one or more items included in

such calculation are not then known, such calculation shall be made on the basis of

reasonable estimates of Seller and Purchaser, and such estimate shall be deemed a final

settlement of such items.

7. Title. Purchaser may obtain a Title Commitment for the Property. Purchaser

may object to any matter shown in the Title Commitment or in any survey obtained by

Purchaser (the "Survey") on or before the date which is seventy-five (75) days after the

Effective Date. Any matter shown as an exception in the Title Commitment and any matter

shown on the Survey and not objected to by Purchaser on or before the date which is seventy-

five (75) days after the Effective Date shall be deemed Permitted Exceptions. If any written

objections are so made, Seller shall be allowed thirty (30) days after receipt of the

Purchaser's objection notice to cure such objections and shall use best efforts to do so. If the

nature of the title defect is such that a cure cannot be effected within such thirty (30) day

period, Seller and Purchaser may mutually agree to a greater period of time in which to cure

the defect. Pending any such efforts, the Closing Date shall be postponed if the same would

occur prior to expiration of such time period. Purchaser shall also have the right to obj ect to

title or the Title Commitment from time to time within twenty (20) days after it receives any

subsequent endorsement, amended or supplemental Title Commitment or notice of any

additional recorded or unrecorded matter affecting title. Seller shall be given an opportunity

to cure such new objections and shall use best efforts to do so within thirty (30) days of

receipt of written notice from Purchaser, and the Closing Date shall be postponed if

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Docket No. 51802

necessary. At or before Closing, Seller will pay the premium for the Title Policy for

Purchaser in the amount of the Purchase Price for the Property. The Title Policy shall subject

only to the Permitted Exceptions.

If Purchaser' s obj ections are not cured to Purchaser' s satisfaction within the

time permitted, then Purchaser may either (a) terminate this Agreement (including, if

applicable, the agreement formed by exercise of the Option) by giving written notice thereof

to Seller on or before the Closing Date and thereupon the Option Consideration shall be

returned to Purchaser; (b) by mutual agreement with Seller extend the deadline for effecting a

cure; or (c) proceed to Closing, in which event such matters will be deemed Permitted

Exceptions. Notwithstanding the foregoing, Seller shall not, except with the agreement of

Purchaser, be allowed any additional time beyond the otherwise scheduled Closing Date to

cure any outstanding mechanics, broker's, mortgage or judgment liens, any special

assessments or deferred or delinquent real estate mortgage or other monetary encumbrance,

but shall pay and discharge or release the same of record at or prior to the Closing; if Seller

fails to do so, Purchaser shall have the right, but not the obligation, to deduct from the

Purchase Price funds necessary to satisfy any such outstanding lien or encumbrance.

8. Approvals. Following the Effective Date, Purchaser may, at any time before

or after the giving of the Option Notice, at its sole expense, apply for and pursue: (a)

approval of a final plat or recorded exemption which establishes the Property as a legally

conveyable parcel under applicable municipal and/or county subdivision regulations; and (b)

prepare and file any applications and do other actions necessary to obtain any permits or

approvals which Purchaser deems necessary, in its sole discretion, to construct and operate

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Docket No. 51802

the Project, including, without limitation, obtaining any special use permits, zoning

amendments, annexation or other approvals required, and or any other approvals pursuant to

any applicable local, state or federal statutes, ordinances or regulations (all of the foregoing,

collectively the "Approvals"). Seller shall reasonably cooperate with Purchaser, without

charge to Purchaser, in obtaining the Approvals, including the execution of applications and

other necessary documentation, and appearance at community meetings and/or public

hearings at the request of Purchaser to voice support of any application at issue. Without

limiting the generality of the foregoing, Seller understands and agrees that Purchaser may

apply for an exemption from applicable subdivision regulations related to the Property, and

Seller's cooperation shall include without limitation, if necessary, signing a written agreement

not to further subdivide the Property for five (5) years from the date of the exemption without

compliance with applicable subdivision regulations. Seller grants Purchaser the right to act as

Seller's agent in making applications for permits in those instances where only the owner of

record of the Property can apply for the same. If, as a result of the Approvals or the Survey,

the legal description of the Property is modified, Seller shall cause the Title Commitment to

be updated to reflect such modification and such description will be substituted for the

description set forth in Exhibit A for all purposes under this Agreement.

9. Right of Entry. During the Term and if the Option Notice is given, up until the

Closing Date, Purchaser, its assignees or proposed assignees and their agents and

independent contractors shall have the right to enter the Property to inspect the same, perform

environmental assessments, soil and other tests, field survey and mapping, field

reconnaissance for conceptual and preliminary design of the Proj ect, geotechnical

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Docket No. 51802

investigation, and/or all other necessary studies, investigations and activities consistent with

the purposes of this Agreement. Purchaser agrees to fill any test holes and restore the

Property to as near as reasonably practicable to its condition at the time of Purchaser' s entry,

in each case, to the extent caused by Purchaser. Purchaser, its assignees or proposed

assignees shall indemnify, defend and hold Seller harmless from all claims and damages

asserted against Seller arising out of any such entry on the Property, except that Purchaser

shall not have any obligation in respect of any Hazardous Materials or any other pre-existing

condition or to the extent arising out of entry by anyone other than through or under

Purchaser in, on, under or about the Property.

Purchaser may obj ect, in writing, to any condition on the Property that

Purchaser deems, in its sole discretion, unsatisfactory. If any written obj ections are so made,

Seller shall be allowed thirty (30) days after receipt of the Purchaser's objection notice to

cure such objections and shall use best efforts to do so. If the nature of the defect is such that

a cure cannot be effected within thirty (30) days, Seller and Purchaser may mutually agree to

a greater period of time in which to cure the defect. Pending any such efforts, the Closing

Date shall be postponed if the same would occur prior to expiration of such time period.

If the objections are cured within the time permitted, the Closing shall occur as

otherwise provided in this Agreement. If the obj ections are not cured to Purchaser' s

satisfaction within the time permitted, then Purchaser may either (a) terminate this

Agreement (including, if applicable, the agreement formed by exercise of the Option) by

giving written notice thereof to Seller on or before the Closing Date and thereupon the

Option Consideration shall be returned to Purchaser; (b) mutually extend the deadline for

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Docket No. 51802

effecting a cure; or (c) waive the obj ections and close the purchase contemplated hereby if, as

and when otherwise required pursuant to the terms hereof.

10. Seller's Representations and Warranties. Seller hereby represents and warrants

to Purchaser as follows:

10.1 Title. Seller holds good and marketable title to the Property in

fee simple absolute, subject to no liens, easements, restrictions, leases, license agreements or

other encumbrances or rights to use and occupy the Property other than disclosed in the Title

Commitment. Seller has not agreed to sell or lease the Property, or any portion thereof or

interest therein, to any person other than Purchaser.

10.2 Flood Hazard Area. No part of the Property is located in any

flood hazard area under the National Flood Insurance Act.

10.3 Eminent Domain. There is no pending and, to the best of

Seller's knowledge, no threatened eminent domain proceeding in respect of the Property or

any part thereof or access thereto.

10.4 Reports. Seller has delivered, or within five (5) days after the

Effective Date shall deliver, to Purchaser true and complete copies of all soils, environmental

and other reports and studies in respect of the physical condition of the Property, including

all drafts and letters and other documents which order, or describe or limit the scope of, such

reports and studies which are within the possession or control of Seller or its affiliates

(collectively, the "Reports").

10.5 Hazardous Materials; Storage Tanks. Except as may otherwise

be disclosed pursuant to the Reports, Seller has not stored, released, disposed of, nor

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Docket No. 51802

permitted any other party to store, release or dispose of, and to the best of Seller's knowledge

there has not been any storage, release or disposal of, any Hazardous Material in, on, about or

from the Property, and Seller has no knowledge of the existence in, on or about the Property

of any Hazardous Material. To the best of Seller' s knowledge, there are not any underground

or above ground storage tanks in, on or about the Property. The term "Hazardous Materials"

means asbestos, urea formaldehyde, polychlorinated biphenyls, nuclear fuel or materials,

radioactive materials, explosives, known carcinogens, petroleum products and by-products,

and any pollutant, contaminant, chemical, material or substance defined as hazardous or as a

pollutant or a contaminant in, or the release or disposal of which is regulated by, any federal,

state, county, municipal, local or other statute, ordinance or regulation which relates to or

deals with human health or the environment, including, without limitation, all regulations

promulgated by a regulatory body pursuant to any such statute, ordinance, or regulation,

including, but not limited to, the Comprehensive Environmental Response and Liability Act

of 1980 ("CERCLA"), 42 U. S.C. § 9601, as amended.

10.6 Authority. Seller has the requisite power and authority to enter

into and perform this Agreement and the documents and instruments required to be executed

and delivered by Seller pursuant hereto. Execution, delivery and performance of this

Agreement and the documents and instruments required to be executed and delivered by

Seller pursuant hereto do not, and will not, conflict with or result in a violation of any

judgment, order or decree of any court or arbiter to which Seller is a party, or any agreement

to which Seller and/or any of the Property is bound or subject.

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10.7 Formation. Seller has been duly formed and is in good standing

under the laws of the State of New Mexico and has the requisite power and authority to enter

into and perform this Agreement and the documents and instruments required to be executed

and delivered by Seller pursuant hereto. Execution, delivery and performance of this

Agreement and the documents and instruments required to be executed and delivered by

Seller pursuant hereto does and will not conflict with or result in a violation of any judgment,

order or decree of any court or arbiter to which Seller is a party, or any agreement to which

Seller and/or any of the Property is bound or subject. The individuals executing this

Agreement on behalf of Seller are duly authorized to execute this Agreement, and this

Agreement is a valid and binding obligation of Seller, enforceable in accordance with its

terms.

10.8 Violations of Law. Except as may otherwise be disclosed

pursuant to the Reports, Seller has not received any written notice of any violations of law,

statutes, rules, governmental ordinances, orders or requirements noted or issued by any

governmental authority having jurisdiction over or affecting the Property, nor does Seller

have any knowledge of any such violation.

10.9 Pending Litigation. There are no proceedings, actions, suits or

claims pending in any court or administrative or governmental body against or affecting the

Property or any part thereof. Seller has not received any notice that any investigation, action,

suit, proceeding or claim is threatened.

The foregoing representations and warranties shall be deemed remade by

Seller as of the Closing and, as so remade, shall survive the Closing. The foregoing

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Docket No. 51802

representations and warranties shall apply and be effective, and shall conclusively be deemed

to have been relied upon by Purchaser, notwithstanding any knowledge, determination,

investigation or inquiry (or failure to investigate or inquire) of Purchaser or any of its agents.

11. Brokers. Each of the parties represents that such party has not engaged any

broker or finder, has not negotiated with any broker or finder, and has not incurred any

brokerage commission or finder's fee as a result of the transactions described herein and each

party agrees to indemnify and hold the other harmless from any claim for such brokerage

commission or finder's fee incurred as a result of the actions of or otherwise claimed through

such party. The provisions of this Section 11 shall survive termination of this Agreement and

the Closing.

12. Short Form Option Agreement. Neither party shall record this Agreement.

Concurrently herewith, Seller and Purchaser have executed a Short Form Option Agreement

in the form of Exhibit B. Purchaser may, at its expense, record the Short Form Option

Agreement.

13. Default Termination. If Purchaser or Seller shall default in any of their

respective obligations under this Agreement (which term includes for purposes of this

Section 13 the agreement formed by exercise of the Option):

(a) If Purchaser is in default, Seller may, by written notice to Purchaser

specifying the nature of the default and the date on which this Agreement shall terminate

(which date shall be not less than ten (10) days after the giving of such notice), terminate the

Agreement, unless the default so specified shall have been cured; provided, however, if the

default cannot reasonably be cured within ten (10) days, then this Agreement shall not

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terminate so long as Purchaser is diligently proceeding to cure. Upon any such termination,

the Option Consideration made hereunder shall be forfeited to and retained by Seller as

agreed and final liquidated damages, as its sole and complete remedy, it being understood

and agreed that Seller is hereby releasing and/or waiving any right it might have to either

specifically enforce this Agreement or to sue for damages.

(b) If Seller is in default, which default is not cured within ten (10) days

after written notice specifying the default, Purchaser may elect to treat this Agreement as

canceled, in which case the Option Consideration and all things of value received hereunder

shall be returned and Purchaser may recover damages, or Purchaser may elect to treat this

Agreement as being in full force and effect and Purchaser shall have the right to specific

performance or damages or both.

(c) In any action or proceeding to enforce this Agreement or any provision

hereof, the prevailing party shall be awarded its costs and reasonable attorney fees.

14. Notices. Any notice, request or other communication required or provided to

be given under this Agreement shall be in writing and shall be sufficiently given and shall be

deemed given when (a) delivered personally; (b) three business days after being mailed by

certified or registered mail, return receipt requested, postage prepaid, or (c) the business day

following deposit with a nationally recognized overnight delivery service, in any event

addressed as follows:

If to Seller:

If to Purchaser: [Sagamore Wind Energy LLC 1 S. Wacker Drive, Suite 1800

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Chicago, Illinois 60606 Attn: Land Administrationl

Copy to: [Public Service Company of Colorado 1800 Larimer Street, Suite 1100 Attn: Legal Services Denver, Colorado 80202]

or to such party at such other address as such party, by ten (10) days prior written notice

given as herein provided, shall designate, provided that no party may require notice to be sent

to more than two (2) addresses. Any notice given in any other manner shall be effective only

upon receipt by the addressee.

15. Miscellaneous. This Agreement constitutes the entire agreement of the parties

hereto and may be modified only in writing. If any term or provision of this Agreement or

any application thereof shall be invalid and unenforceable, the remainder of this Agreement

and any other application of such term or provision shall not be affected thereby. This

Agreement shall be construed under and governed by the laws of the State in which the

Property is located. This Agreement shall attach to and run with the Property and shall inure

to the benefit of and shall bind the respective heirs, executors, administrators, successors and

assigns of the parties hereto. If Seller should sell any or all of the Property, Seller shall notify

Purchaser in writing before the closing of such sale. Payment of any amounts hereunder

shall be made to the owner of record on the date of such payment.

16. Limitation on Indemnification. To the extent, if at all, a court of competent

jurisdiction determines that Section 56-7-1 NMSA 1978 applies to any indemnification

provisions in this Agreement, including certain types of insurance coverage as set forth in

Section 56-7-1 NMSA 1978, such contractual indemnities shall not extend to liability,

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claims, damages, losses or expenses, including attorney fees, arising out of bodily injury to

persons or damage to property caused by or resulting from, in whole or in part, the

negligence, act or omission of the indemnitee or additional insured, as the case may be, its

officers, employees or agents and shall further be modified, if required, by the provisions of

Section 56-7-1(B) NMSA 1978.

(Signatures on next page)

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to

be executed and delivered as of the date first above written.

SELLER:

By:

PURCHASER:

[Sagamore Wind Energy LLC, a Delaware limited liability company]

By: Its:

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EXHIBIT A

DEPICTION OR LEGAL DESCRIPTION OF THE PROPERTY

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EXHIBIT B

SHORT FORM OPTION AGREEMENT

THIS Short Form Option Agreement, is made as of , 201__ by and between (collectively, "Seller"), and Sagamore Wind Energy LLC, a Delaware limited liability company ("Purchaser") with an address of 1 S. Wacker Drive, Suite 1800, Chicago, Illinois 60606.

For and in consideration of One Dollar ($1.00) and other valuable consideration paid Purchaser to Seller, Seller hereby grants to Purchaser the exclusive option to purchase (the "Option") the property described on Exhibit A attached hereto (the "Property") which shall run with the Property and shall inure to the benefit of and shall bind the respective heirs, executors, administrators, successors and assigns of the parties hereto. This Short Form Option Agreement is executed and is to be recorded for the purpose of giving notice of that certain Option Agreement entered into as of the date hereof and to run for a term of one (1) year, subject to extension at Purchaser's election for up to three (3) periods of sixty (60) days each, between Seller and Purchaser regarding the Option to purchase the Property (the "Option Agreement") and is in no way intended to supersede or vary the terms or conditions of the Option Agreement.

SELLER:

By:

PURCHASER:

[Sagamore Wind Energy LLC, a Delaware limited liability company]

By: Its:

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STATE OF NEW MEXICO) ) SS.

COUNTY OF )

This instrument was acknowledged before on ,2018, by as of

(SEAL)


Notary Public

STATE OF ) ) SS.

COUNTY OF )

This instrument was acknowledged before me on ,2018, by , as Vice President of

Sagamore Wind Energy LLC, a Delaware limited liability company.

(SEAL)


Notary Public

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EXHIBIT A LEGAL DESCRIPTION

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