Title Sheet

Southern California Edison Company FERC FPA Electric TariffTariff Title: Rate SchedulesTariff Record Title: Rate Schedule 485

WALNUT CREEK ENERGY GENERATION TIE-LINE FACILITIES AGREEMENT

BETWEEN

WALNUT CREEK ENERGY, LLC

AND

SOUTHERN CALIFORNIA EDISON COMPANY

Contract Effective Date: 06/21/11 Tariff Record Proposed Effective Date: 06/21/11905.485.0 Version Number:0.0.0 TOT135 Option Code: A

Page No. 1

WALNUT CREEK ENERGY GENERATION TIE-LINE FACILITIES AGREEMENT BETWEEN

WALNUT CREEK ENERGY, LLC AND

SOUTHERN CALIFORNIA EDISON COMPANYTable of Contents

SECTION TITLE PAGE

1. Parties:............................................................................................................................32. Recitals:..........................................................................................................................33. Agreement:.....................................................................................................................44. Definitions: ....................................................................................................................45. Effective Date and Term:...............................................................................................76. Tie-Line Construction and Ownership: .........................................................................87. Provision of Security: ....................................................................................................98. Capacity Entitlement and Losses: ..................................................................................99. Operation and Maintenance: ........................................................................................1010. Capital Additions: ........................................................................................................1111. Removal of Tie-Line:...................................................................................................1112. Taxes:...........................................................................................................................1113. Tax Status: ...................................................................................................................1614. Charges: .......................................................................................................................1615. Billing and Payment:....................................................................................................1716. Dispute Resolution:......................................................................................................2117. Audits:..........................................................................................................................2218. Authorized Representative:..........................................................................................2319. Regulatory Authority: ..................................................................................................2420. No Dedication of Facilities: .........................................................................................2521. No Third Party Rights:.................................................................................................2522. Assignment: .................................................................................................................2523. Relationship of Parties: ................................................................................................2624. Waivers: .......................................................................................................................2625. Governing Law: ...........................................................................................................2626. Notices: ........................................................................................................................2627. Severability: .................................................................................................................2728. Entire Agreement: ........................................................................................................2729. Ambiguities:.................................................................................................................2730. Force Majeure: .............................................................................................................2831. Indemnification: ...........................................................................................................2832. Signature Clause:………………………………………………………………..........30

Page No. 2

WALNUT CREEK ENERGY GENERATION TIE-LINE FACILITIES AGREEMENT BETWEEN

WALNUT CREEK ENERGY, LLC AND

SOUTHERN CALIFORNIA EDISON COMPANY

Table of Contents (Cont.)

Exhibit A Description of Tie-Line to be Constructed: .................................................................31Exhibit B Tie-Line Facilities Costs: .............................................................................................33Exhibit C Estimated Payment Schedule:......................................................................................36Exhibit D Tie-Line Facilities Charge: ..........................................................................................37Exhibit E One-Line Diagram: ......................................................................................................38

Page No. 3

WALNUT CREEK ENERGY GENERATION TIE-LINE FACILITIES AGREEMENT BETWEEN

WALNUT CREEK ENERGY, LLC AND

SOUTHERN CALIFORNIA EDISON COMPANY

1. Parties:

The Parties to this Walnut Creek Energy Generation Tie-Line Facilities Agreement are Walnut Creek Energy, LLC, a limited liability company, organized and existing under the laws of the State of Delaware (“WCE”), and Southern California Edison Company (“SCE”), a California corporation, hereinafter sometimes referred to individually as “Party” and collectively as “Parties.”

2. Recitals:

This Agreement is made with reference to the following facts, among others:2.1 SCE is a California public utility engaged in the business of generating and

transmitting electric energy in the States of Arizona, California, Nevada, and New Mexico. SCE is further engaged in the business of distributing such energy in the State of California.

2.2 WCE, a special purpose subsidiary of Edison Mission Energy, which is an indirect wholly-owned subsidiary of Edison International, intends to engineer, procure, construct, own, operate, and maintain the Walnut Creek Energy Park Project and interconnect it to the ISO Controlled Grid at SCE’s 220 kV Walnut Substation via a 220 kV transmission line originating at the Project’s switchyard.

2.3 SCE has analyzed the right-of-way in which the transmission line will travel, and has determined that a 220 kV generation tie-line from the Project’s switchyard to Walnut Substation could be constructed on existing SCE rights-of-way.

2.4 WCE and SCE entered into the Letter Agreement which provides for the design and engineering of the Tie-Line. The Design and Engineering Package specifies the facilities and the associated estimated costs and schedule required for SCE to procure, construct and install the Tie-Line.

2.5 The Parties desire to enter into this Agreement to provide for, among other things, (i) SCE to engineer, design, procure, construct, install, own, operate, and maintain the Tie-Line; (ii) SCE to apply to the CPUC for a CPCN and any other regulatory approvals required for construction of the Tie-Line; and (iii) WCE to pay SCE to engineer, design, procure, construct, install, own, operate, and maintain the Tie-Line and to apply to the CPUC for a CPCN for construction of the Tie-Line.

2.6 Separately, WCE, SCE, and the ISO have executed a Large Generator Interconnection Agreement for the purpose of interconnecting the Project to SCE’s electrical system.

Page No. 4

3 Agreement:

In consideration of the premises, covenants, and conditions contained in this Agreement, the Parties agree as follows:

4 Definitions:

The following terms when used herein with initial capitalization, whether in the singular or the plurals, shall have the following meanings:

4.1 Accounting Practice: Generally accepted accounting principles and practices applicable to electric utility operations.

4.2 Agreement: This Walnut Creek Energy Generation Tie-Line Facilities Agreement between Walnut Creek Energy, LLC and Southern California Edison Company.

4.3 Applicable Reliability Council: The reliability council applicable to the transmission system to which the Project is directly interconnected.

4.4 Applicable Reliability Standards: The requirements and guidelines of NERC, the Applicable Reliability Council, and the Balancing Authority Area of the Participating TO’s Transmission System to which the Walnut Creek Energy Park Project is directly connected, including requirements adopted pursuant to Section 215 of the Federal Power Act.

4.5 Authorized Representative: The representative of a Party designated in accordance with Section 18.

4.6 Balancing Authority: The responsible entity that integrates resource plans ahead of time, maintains load-interchange-generation balance within a Balancing Authority Area, and supports Interconnection frequency in real time.

4.7 Balancing Authority Area: The collection of generation, transmission, and loads within the metered boundaries of the Balancing Authority. The Balancing Authority maintains load-resource balance within this area.

4.8 Breach: The failure of a Party to perform or observe any material term or condition of this Agreement.

4.9 Breaching Party: A Party that is in Breach of this Agreement.4.10 Capital Additions: Any additions, enlargements, modifications, betterments, or

replacements to the Tie-Line for which the cost would be capitalized in accordance with Accounting Practice and have not previously been included in the Tie-Line Facilities Cost. Such modifications may be (i) any Units of Property which are added to the Tie-Line; (ii) the enlargement, modification or betterment of any Units of Property constituting a part of the Tie-Line; or (iii) the replacement of any Units of Property constituting a part of the Tie-Line, irrespective of whether such replacement constitutes an enlargement, modification or betterment of that which it replaces.

Page No. 5

4.11 Capital Additions Cost: All costs, excluding One-Time Cost, determined by SCE to be associated with the design, engineering, procurement, construction and installation of Capital Additions.

4.12 Capital Additions Payment: The sum of the Capital Additions Cost and associated One-Time Cost.

4.13 CEC: California State Energy Resources and Development Commission, or its regulatory successor.

4.14 CPCN: Certificate of Public Convenience and Necessity.4.15 CPUC: The California Public Utilities Commission, or its regulatory successor.4.16 Customer-Financed Monthly Rate: The rate most recently adopted by the CPUC

for application to SCE’s retail electric customers for added facilities, which does not compensate SCE for replacement of added facilities as shown in SCE’s retail tariff book, Rule 2, Part H, Section 2(c), paragraph 3 under the heading “Customer Financed With Replacement at Additional Cost.” The Customer-Financed Monthly Rate is also shown in Exhibit D of this Agreement.

4.17 Default: The failure of a Breaching Party to cure its Breach in accordance with Section 15.4 of this Agreement.

4.18 Design and Engineering Package: The engineering and design report transmitted to WCE on April 23, 2007, pursuant to the Letter Agreement.

4.19 FERC: Federal Energy Regulatory Commission, or its regulatory successor.4.20 Force Majeure: Any act of God, labor disturbance, act of the public enemy, war,

insurrection, riot, fire, storm or flood, explosion, breakage or accident to machinery or equipment, any order, regulation or restriction imposed by governmental, military or lawfully established civilian authorities, or any other cause beyond a Party’s control. A Force Majeure event does not include acts of negligence or intentional wrongdoing by the Party claiming Force Majeure.

4.21 Good Utility Practice: Any of the practices, methods, and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety, and expedition. Good Utility Practice is not intended to be any one of a number of the optimum practices, methods, or acts to the exclusion of all others, but rather to be acceptable practices, methods, or acts generally accepted in the region.

4.22 IRS: The Internal Revenue Service.4.23 ISO: The California Independent System Operator Corporation, a state

chartered, non-profit corporation.4.24 ISO Controlled Grid: The system of transmission lines and associated facilities

of participating transmission owners that have been placed under the operational control of the ISO.

4.25 ITCC: The ITCC is equal to the estimated tax liability described in Section 12 the Agreement, and is the Income Tax Component of Contribution specified in the Preliminary Statement, Part M of SCE’s tariff on file with the CPUC,

Page No. 6

applicable to the Tie-Line Facilities Cost. The ITCC applicable to the Tie-Line Facilities Cost is described in Exhibit B of the Agreement.

4.26 Large Generator Interconnection Agreement (“LGIA”): The agreement among WCE, SCE, and the ISO, Service Agreement No. 50, made effective by FERC March 13, 2007 under SCE’s Transmission Owner Tariff, FERC Electric Tariff Volume No. 6, that specifies the terms for SCE and the ISO to provide interconnection service for the Walnut Creek Energy Park Project; for SCE to engineer, design, construct, install, own, operate and maintain certain interconnection facilities, other than the Tie-Line, and any reliability upgrades required for such interconnection service; and for WCE to pay for such service and facilities.

4.27 Letter Agreement: The agreement between WCE and SCE, Service Agreement No. 46 under SCE’s Transmission Owner Tariff, that specifies the terms for SCE to design, engineer and prepare specifications for the Tie-Line.

4.28 Loss: Any and all damages, losses, and claims, including claims and actions relating to injury to or death of any person or damage to property, demand, suits, recoveries, costs and expenses, court costs, attorney fees, and all other obligations by or to third parties.

4.29 One-Time Cost: All costs determined by SCE to be associated with the installation of the Tie-Line and Capital Additions which are not capitalized. The One-Time Cost applicable to the Tie-Line is provided in Exhibit B.

4.30 Point of Change of Ownership: The point, as set forth in Exhibit A to this Agreement, where WCE-constructed facilities connect to SCE’s Tie-Line Facilities.

4.31 Point of Interconnection: The point, as set forth in Exhibit A to this Agreement, where the Tie-Line Facilities connect to SCE’s transmission system.

4.32 Reasonable Efforts: With respect to an action required to be attempted or taken by a Party under this Agreement, efforts that are timely and consistent with Good Utility Practice and are otherwise substantially equivalent to those a Party would use to protect its own interests.

4.33 Removal Cost: The actual cost SCE incurs for the removal of the Tie-Line, or any portion thereof, which is calculated as the amount, if positive, of the costs of removal minus the salvage value of the Tie-Line.

4.34 Tie-Line: The 220 kV transmission line and related facilities, as specified in Exhibit A and shown in Exhibit E, to be constructed by SCE to connect the Project’s switchyard to the interconnection at SCE’s Walnut Substation, as such facilities may be modified during the term of this Agreement.

4.35 Tie-Line Facilities Charge: The monthly charge to WCE to recover the revenue requirements for the Tie-Line Facilities, calculated as the product of the Customer-Financed Monthly Rate and the Tie-Line Facilities Cost. The Tie-Line Facilities Charge is shown in Exhibit D

4.36 Tie-Line Facilities Cost: All costs, excluding One-Time Cost, determined by SCE to be associated with the engineering, design, procurement, licensing, permitting, construction and installation of the Tie-Line, including, without

Page No. 7

limitation, costs of acquisition of necessary land rights. The Tie-Line Facilities Cost is provided in Exhibit B.

4.37 Tie-Line Facilities Payment: The sum of the Tie-Line Facilities Cost and associated One-Time Cost. The Tie-Line Facilities Payment is provided in Exhibit B.

4.38 Tie-Line In-Service Date: The date upon which the Tie-Line is complete, successfully tested, and ready for service as determined by SCE.

4.39 Units of Property: As described in FERC's "List of Units of Property for Use in Connection with Uniform System of Accounts Prescribed for Public Utilities and Licensees" in effect as of the date of this Agreement, and as such list may be amended from time to time.

4.40 Walnut Creek Energy Park Project (“Project”): The 500,500 kW (net) generating facility located at 911 Bixby Avenue, Industry, California 91745, comprised of the project’s equipment and facilities, including but not limited to, five GE LMS100 102,500 kW (gross) synchronous 3-phase gas turbine generators, with a Brush rotating AC alternator exciter with non-controlled (diode) rectifiers and a General Electric digital power system stabilizer.

4.41 Walnut Substation: SCE’s 220kV substation located at 16333 Gale Avenue, Industry, California.

5 Effective Date and Term:

5.1 This Agreement shall become effective upon the effective date ordered by FERC (“Effective Date”).

5.2 This Agreement shall terminate on the earliest of: (i) the termination date of the LGIA; (ii) the date specified by WCE upon thirty (30) calendar days written notice to SCE if the notice of termination is received by SCE before the Tie-Line In-Service Date; (iii) the date specified by WCE upon one hundred eighty (180) calendar days advance written notice to SCE if the notice of termination is received by SCE on or after the Tie-Line In-Service Date; or (iv) the date specified pursuant to Section 6.1 and 15.4.

5.3 Upon termination of this Agreement, WCE shall pay SCE any remaining balance owed for SCE’s costs incurred or irrevocably committed to be incurred pursuant to this Agreement as of the effective date of termination, within sixty (60) calendar days following receipt of a billing from SCE requiring such payment. Such billing shall reflect all payments received by SCE, which shall be credited against the amount of SCE’s costs and expenses incurred or irrevocably committed to be incurred in accordance with this Agreement.5.3.1 In the event that SCE has taken delivery of material and equipment, or

irrevocably committed to incur cost for material and equipment procured pursuant to this Agreement, at SCE’s option, SCE shall either (i) retain such material and equipment in its inventory for future use by SCE, in which case SCE shall refund to WCE the full cost of such material and equipment, or (ii) salvage such material and equipment, in which case

Page No. 8

SCE shall refund to WCE the salvage value of such material and equipment, or (iii) transfer ownership of such material and equipment to WCE, in which case WCE shall be responsible for any costs associated with such transfer.

5.3.2 With respect to any portion of the Tie-Line Facilities already installed or constructed pursuant to the terms of this Agreement, WCE shall be responsible for all costs associated with the removal, relocation or other disposition or retirement of such materials, equipment, or facilities.

5.4 Any obligations of one Party to the other, including payment obligations, as a result of this Agreement, which accrued prior to or as a result of termination of this Agreement, shall survive termination.

5.5 If WCE has given notice of termination and a filing with FERC is required to terminate this Agreement, WCE shall support such filing before the FERC if requested by SCE.

5.6 The Letter Agreement shall terminate upon the Effective Date of this Agreement.

6 Tie-Line Construction and Ownership:

6.1 SCE shall use commercially reasonable efforts to obtain all necessary regulatory approvals from the CPUC and challenge any adverse CPUC ruling, as appropriate in SCE’s reasonable discretion, and from the CEC, if applicable, for SCE to construct the Tie-Line. Such approvals shall include, without limitation, a CPCN from the CPUC. If the application for a CPCN is denied or the CPUC issues an order, rule or condition that would, in the sole reasonable judgment of SCE, adversely affect SCE if SCE pursues SCE’s obligations under this Agreement, then SCE may terminate this Agreement by providing fifteen (15) calendar days notice to WCE; provided, however, that prior to filing with FERC to terminate this Agreement, SCE shall offer WCE the opportunity to work with SCE with the intent of removing any such adverse effect of the CPUC order, rule or condition to enable SCE to construct the Tie-Line in a manner consistent with the intent of this Agreement. In the event that the Parties are not able to agree upon some remedial course of action within fifteen (15) calendar days of WCE’s receipt of notice from SCE, then SCE may terminate this Agreement, provided that SCE shall notify WCE of the CPUC’s decision promptly after receiving the CPUC order, rule or condition, but in no event later than ten (10) business days of the CPUC’s issuance of the same.

6.2 SCE shall, subject to receiving necessary regulatory approvals and any other approvals, if required, procure, construct, and install the Tie-Line. SCE shall design the Tie-Line to the specifications set forth in the Design and Engineering Package, as such specifications may be modified to comply with any conditions attached to the regulatory approvals and approval of any other entity.

6.3 SCE shall use Reasonable Efforts to complete construction and installation of the Tie-Line within sixteen (16) months after the Agreement becomes effective, which date is estimated to be August 1, 2012. Such date is the estimated in-

Page No. 9

service date of the SCE-owned interconnection facilities provided for in the LGIA. However, WCE understands and acknowledges that such date is only an estimate and that equipment and material lead times, labor availability, outage coordination, regulatory approvals, permits or other unforeseen events could delay the actual in-service date beyond that specified.

6.4 The Tie-Line shall be owned, operated and maintained by SCE.SCE shall have the right to convert any part of the Tie-Line to its own use to provide electrical service to other customers, provided that: (i) such use does not adversely impact WCE’s ability to use its capacity entitlement pursuant to Section 8.1; (ii) all necessary regulatory approvals are received; and (iii) such modification of use is subject to the terms of Section 14.3. SCE shall use commercially reasonable efforts to support WCE in discussions with the CAISO regarding line losses and WCE’s claim to be held harmless from losses created by other generators connecting to the Tie-Line.

6.5 SCE shall have the right to utilize the Tie-Line, including any rights of way, easements, or other property rights acquired for the Tie-Line, for secondary use (other than for the provision of electrical service) by SCE or a third party, provided that (i) such secondary use does not adversely impact WCE’s ability to use its capacity entitlement pursuant to Section 8.1; and (ii) any necessary regulatory approvals are received.

7 Provision of Security:

7.1 Within thirty (30) calendar days of the Effective Date, WCE shall provide to SCE at WCE’s option, a guarantee, a surety bond, letter of credit or other form of security that is reasonably acceptable to SCE and is consistent with the Uniform Commercial Code of the State of California. Such security for payment shall be in an amount equal to $7,611,461.71, sufficient to cover (a) the costs for constructing, procuring and installing the Tie-Line and shall be reduced on a dollar-for-dollar basis for payments made to SCE for these purposes; (b) four (4) months of the Tie-Line Facilities Charge; and (c) the estimated Removal Cost. In addition:7.1.1 The guarantee must be made by an entity that meets the creditworthiness

requirements of SCE, and contain terms and conditions that guarantee payment of any amount that may be due from WCE, up to an agreed-to maximum amount, as noted in Section 7.1 above.

7.1.2 The letter of credit must be issued by a financial institution reasonably acceptable to SCE and must specify a reasonable expiration date.

7.1.3 The surety bond must be issued by an insurer reasonably acceptable to SCE and must specify a reasonable expiration date.

8 Capacity Entitlement and Losses:

Page No. 10

8.1 WCE’s entitlement to Tie-Line capacity from the Project to the ISO Controlled Grid shall be 500.5 MW; provided, however, such entitlement shall be increased through an amendment to this Agreement and additions to the Tie-Line facilities, if required pursuant to an engineering study, in the event that the LGIA is amended to increase the Project’s capacity. WCE’s entitlement to Tie-Line capacity from the ISO Controlled Grid to the Project shall be 20 MW.

8.2 WCE shall be responsible for Tie-Line transmission losses attributable to the Project, between the Project and the ISO Controlled Grid.

9 Operation and Maintenance:

9.1 SCE shall operate and maintain the Tie-Line in accordance with Good Utility Practice.

9.2 Subsequent to the Tie-Line In-Service Date, SCE shall coordinate scheduling of maintenance and other planned outages of the Tie-Line with WCE, subject to Good Utility Practice and SCE’s operating procedures, with a goal of scheduling any such activities at times which would not interfere with WCE’s scheduled energy deliveries, or its obligations under its power purchase agreement with SCE. SCE will work with WCE pursuant to a jurisdictional operating bulletin, to schedule planned outages of the Tie-Line in accordance with Good Utility Practice. WCE shall notify SCE by January 1, May 1, and September 1 of each year of its schedule of Project maintenance outages for the succeeding four months. SCE will exercise Reasonable Efforts to schedule Tie-Line maintenance outages to coincide with WCE's scheduled Project maintenance outages. In accordance with Good Utility Practice and SCE’s operating procedures, SCE shall limit the duration of Tie-Line outages.

9.3 SCE shall notify WCE of all emergency Tie-Line outages as soon as practicable in accordance with Good Utility Practice, and provide, as soon as practical, an estimated time to return the Tie-Line to service, if known.

9.4 WCE and SCE shall provide to each other a copy of its switching and tagging rules that are applicable to the other Party’s activities. In order to protect SCE’s personnel from injury, SCE’s switching and tagging rules shall include a provision for SCE to place its locks on WCE’s interconnection facilities (specifically disconnect switches and/or circuit breakers on the eastern terminus of the Tie-Line) to prevent inadvertent energization of the Tie-Line while SCE is performing maintenance and/or repair work on SCE’s interconnection facilities and other facilities at Walnut Substation as may be required. In order to protect WCE’s personnel from injury, WCE’s switching and tagging rules shall include a provision for WCE to place its locks on SCE’s interconnection facilities (specifically disconnect switches and/or circuit breakers) to prevent inadvertent energization of the Tie-Line while WCE is performing maintenance and/or repair work on WCE’s interconnection facilities and other facilities at WCE’s Substation as may be required.

Page No. 11

10 Capital Additions:

10.1 SCE shall engineer, design, construct, install, own, operate and maintain all Capital Additions pursuant to Good Utility Practice.

10.2 Except as otherwise provided in Section 10.3, whenever Capital Additions are required by SCE pursuant to Good Utility Practice (which may include compliance with system or regulatory requirements), WCE shall pay all charges associated with such Capital Additions in accordance with Sections 14 and 15. If such Capital Additions result in a change in the Tie-Line investment, the Tie-Line Facilities Cost shall be adjusted on the basis of the revised net investment effective as of the date such Capital Additions are installed and ready for service.

10.3 In the event that Capital Additions are required in order to benefit SCE or a third party (including, but not limited to, the accommodation of additional shippers of electricity or interconnection, transmission, or distribution customers), or because of damage caused by negligence or willful misconduct of SCE, WCE shall not bear cost responsibility for such Capital Additions. No adjustment will be made to the Tie-Line Facilities Cost or the Tie-Line Facilities Charge, and no Capital Additions Cost, or One-Time Cost will be charged to WCE for such Capital Additions.

11 Removal of Tie-Line:

11.1 Following termination of this Agreement, SCE will remove the Tie-Line from service to WCE.

11.2 On or before the date one year following termination of this Agreement, SCE shall notify WCE, in writing, whether SCE intends to physically remove the Tie-Line or any part thereof. If SCE intends to physically remove the Tie-Line or any part thereof, then SCE shall physically remove such facilities within two years from the date of notification of intent, and WCE shall pay the Removal Cost in accordance with Sections 14.1 and 15.2. If SCE does not intend to physically remove the Tie-Line or any part thereof, then WCE shall have no obligation to pay such Removal Cost.

12 Taxes:

12.1 WCE Payments Not Taxable. The Parties intend that all payments or property transfers made by WCE to SCE for the installation of the Tie-Line and Capital Additions shall be non-taxable, either as contributions to capital, or as a refundable advance, in accordance with the Internal Revenue Code and any applicable state income tax laws and shall not be taxable as contributions in aid of construction or otherwise under the Internal Revenue Code and any applicable state income tax laws.

Page No. 12

12.2 Representations And Covenants. In accordance with IRS Notice 2001-82 and IRS Notice 88-129, WCE represents and covenants that (i) ownership of the electricity generated at the Project will pass to another party prior to the transmission of the electricity on the ISO Controlled Grid, (ii) for income tax purposes, the amount of any payments and the cost of any property transferred to SCE for SCE's Tie-Line will be capitalized by WCE as an intangible asset and recovered using the straight-line method over a useful life of twenty (20) years, and (iii) WCE reasonably expects that the amount of electricity carried in the direction of the Project on any portion of the Tie-Line that is a “dual-use intertie” within the meaning of IRS Notice 88-129, to be a de minimis amount. For this purpose, “de minimis amount” means no more than 5 percent of the total power flows in both directions, calculated in accordance with the “5 percent test” set forth in IRS Notice 88-129. This is not intended to be an exclusive list of the relevant conditions that must be met to conform to IRS requirements for non-taxable treatment.

At SCE’s request, WCE shall provide SCE with a report from an independent engineer confirming its representation in clause (iii), above. SCE represents and covenants that the cost of the Tie-Line paid for by WCE without the possibility of refund or credit will have no net effect on the base upon which rates are determined.

12.3 Indemnification for the Cost Consequence of Current Tax Liability Imposed Upon SCE. Notwithstanding Section 12.1, WCE shall protect, indemnify and hold harmless SCE from the cost consequences of any current tax liability imposed against SCE as the result of payments or property transfers made by WCE to SCE under this Agreement, as well as any interest and penalties, other than interest and penalties attributable to any delay caused by SCE.

SCE shall not include a gross-up for the cost consequences of any current tax liability in the amounts it charges WCE under this Agreement unless (i) SCE has determined, in good faith, that the payments or property transfers made by WCE to SCE should be reported as income subject to taxation or (ii) any Governmental Authority directs SCE to report payments or property as income subject to taxation; provided, however, that SCE may require WCE to provide security for the Tie-Line, in a form reasonably acceptable to SCE (such as a parental guarantee or a letter of credit), in an amount equal to the cost consequences of any current tax liability under this Section 12. WCE shall reimburse SCE for such costs on a fully grossed-up basis, in accordance with Section 12.4, within thirty (30) calendar days of receiving written notification from SCE of the amount due, including detail about how the amount was calculated.

Page No. 13

The indemnification obligation shall terminate at the earlier of: (1) the expiration of the ten year testing period and the applicable statute of limitation, as it may be extended by SCE upon request of the IRS, to keep these years open for audit or adjustment, or (2) the occurrence of a subsequent taxable event and the payment of any related indemnification obligations as contemplated by this Section 12.

WCE shall not be obligated to indemnify SCE from the cost consequences of any current tax liability imposed against SCE as the result of a disqualification event as described in IRS Notice 88-129 that was caused by SCE or any third party unrelated to WCE.

12.4 Tax Gross-Up Amount. WCE's liability for the cost consequences of any current tax liability under this Section 12 shall be calculated on a fully grossed-up basis. Except as may otherwise be agreed to by the parties, this means that WCE will pay SCE, in addition to the amount paid for the Tie-Line, an amount equal to (1) the current taxes imposed on the SCE (“Current Taxes”) on the excess of (a) the gross income realized by SCE as a result of payments or property transfers made by WCE to SCE under this Agreement (without regard to any payments under this Section 12) (the “Gross Income Amount”) over (b) the present value of future tax deductions for depreciation that will be available as a result of such payments or property transfers (the “Present Value Depreciation Amount”), plus (2) an additional amount sufficient to permit SCE to receive and retain, after the payment of all Current Taxes, an amount equal to the net amount described in clause (1).

For this purpose, (i) Current Taxes shall be computed based on SCE’s composite federal and state tax rates at the time the payments or property transfers are received and SCE will be treated as being subject to tax at the highest marginal rates in effect at that time (the “Current Tax Rate”), and (ii) the Present Value Depreciation Amount shall be computed by discounting the SCE ’s anticipated tax depreciation deductions as a result of such payments or property transfers by the SCE ’s current weighted average cost of capital. Thus, the formula for calculating WCE's liability to SCE pursuant to this Section 12.4 can be expressed as follows: (Current Tax Rate x (Gross Income Amount – Present Value of Tax Depreciation))/(1-Current Tax Rate). WCE’s estimated tax liability in the event taxes are imposed shall be stated in Exhibit B Tie-Line Facilities Cost.

12.5 Private Letter Ruling or Change or Clarification of Law. At WCE's request and expense, SCE shall file with the IRS a request for a private letter ruling as to whether any property transferred or sums paid, or to be paid, by WCE to SCE under this Agreement are subject to federal income taxation. WCE will prepare

Page No. 14

the initial draft of the request for a private letter ruling, and will certify under penalties of perjury that all facts represented in such request are true and accurate to the best of WCE 's knowledge. SCE and WCE shall cooperate in good faith with respect to the submission of such request, provided, however, WCE and SCE explicitly acknowledge (and nothing herein is intended to alter) SCE’s obligation under law to certify that the facts presented in the ruling request are true, correct and complete.

12.6 SCE shall keep WCE fully informed of the status of such request for a private letter ruling and shall execute either a privacy act waiver or a limited power of attorney, in a form acceptable to the IRS, that authorizes WCE to participate in all discussions with the IRS regarding such request for a private letter ruling. SCE shall allow WCE to attend all meetings with IRS officials about the request and shall permit WCE to prepare the initial drafts of any follow-up letters in connection with the request.

Subsequent Taxable Events. If, within 10 years from the date on which SCE 's Tie-Line facilities are placed in service, (i) WCE Breaches the covenants contained in Section 12.2, (ii) WCE causes a "disqualification event" within the meaning of IRS Notice 88-129, or (iii) this Agreement terminates and SCE retains ownership of the Tie-Line, WCE shall pay a tax gross-up for the cost consequences of any current tax liability imposed on SCE, calculated using the methodology described in Section 12.4 and in accordance with IRS Notice 90-60.

12.7 Contests. In the event any Governmental Authority determines that SCE’s receipt of payments or property constitutes income that is subject to taxation, SCE shall notify WCE, in writing, within thirty (30) Calendar Days of receiving notification of such determination by a Governmental Authority. Upon the timely written request by WCE and at WCE's sole expense, SCE may appeal, protest, seek abatement of, or otherwise oppose such determination. Upon WCE's written request and sole expense, SCE may file a claim for refund with respect to any taxes paid under this Section 12, whether or not it has received such a determination. SCE reserves the right to make all decisions with regard to the prosecution of such appeal, protest, abatement or other contest, including the selection of counsel and compromise or settlement of the claim, but SCE shall keep WCE informed, shall consider in good faith suggestions from WCE about the conduct of the contest, and shall reasonably permit WCE or a WCE representative to attend contest proceedings.

WCE shall pay to SCE on a periodic basis, as invoiced by SCE, SCE’s documented reasonable costs of prosecuting such appeal, protest, abatement or other contest, including any costs associated with obtaining the opinion of independent tax counsel described in this Section 12.7. SCE may abandon any

Page No. 15

contest if WCE fails to provide payment to SCE within thirty (30) Calendar Days of receiving such invoice.

At any time during the contest, SCE may agree to a settlement either with WCE's consent or, if such consent is refused, after obtaining written advice from independent nationally-recognized tax counsel, selected by SCE, but reasonably acceptable to WCE, that the proposed settlement represents a reasonable settlement given the hazards of litigation. WCE 's obligation shall be based on the amount of the settlement agreed to by WCE, or if a higher amount, so much of the settlement that is supported by the written advice from nationally-recognized tax counsel selected under the terms of the preceding paragraph. The settlement amount shall be calculated on a fully grossed-up basis to cover any related cost consequences of the current tax liability. SCE may also settle any tax controversy without receiving WCE's consent or any such written advice; however, any such settlement will relieve WCE from any obligation to indemnify SCE for the tax at issue in the contest (unless the failure to obtain written advice is attributable to WCE’s unreasonable refusal to the appointment of independent tax counsel).

12.8 Refund. In the event that (a) a private letter ruling is issued to SCE which holds that any amount paid or the value of any property transferred by WCE to SCE under the terms of this Agreement is not subject to federal income taxation, (b) any legislative change or administrative announcement, notice, ruling or other determination makes it reasonably clear to SCE in good faith that any amount paid or the value of any property transferred by WCE to SCE under the terms of this Agreement is not taxable to SCE, (c) any abatement, appeal, protest, or other contest results in a determination that any payments or transfers made by WCE to SCE are not subject to federal income tax, or (d) if SCE receives a refund from any taxing authority for any overpayment of tax attributable to any payment or property transfer made by WCE to SCE pursuant to this Agreement, SCE shall promptly refund to WCE the following:

(i) any payment made by WCE under this Section 12 for taxes that is attributable to the amount determined to be non-taxable, together with interest thereon,

(ii) interest on any amounts paid by WCE to SCE for such taxes which SCE did not submit to the taxing authority, calculated in accordance with the methodology set forth in FERC’s regulations at 18 C.F.R. §35.19a(a)(2)(iii) from the date payment was made by WCE to the date SCE refunds such payment to WCE, and

(iii) with respect to any such taxes paid by SCE, any refund or credit SCE receives or to which it may be entitled from any Governmental Authority,

Page No. 16

interest (or that portion thereof attributable to the payment described in clause (i), above) owed to SCE for such overpayment of taxes (including any reduction in interest otherwise payable by SCE to any Governmental Authority resulting from an offset or credit); provided, however, that SCE will remit such amount promptly to WCE only after and to the extent that SCE has received a tax refund, credit or offset from any Governmental Authority for any applicable overpayment of income tax related to SCE's Tie-Line.

The intent of this provision is to leave the Parties, to the extent practicable, in the event that no taxes are due with respect to any payment for the Tie-Line hereunder, in the same position they would have been in had no such tax payments been made.

12.9 Taxes Other Than Income Taxes. Upon the timely request by WCE, and at WCE’s sole expense, SCE may appeal, protest, seek abatement of, or otherwise contest any tax (other than federal or state income tax or property tax assessed on SCE’s facilities) asserted or assessed against SCE for which WCE may be required to reimburse SCE under the terms of this Agreement. WCE shall pay to SCE on a periodic basis, as invoiced by SCE, SCE’s documented reasonable costs of prosecuting such appeal, protest, abatement, or other contest. WCE, and SCE shall cooperate in good faith with respect to any such contest. Unless the payment of such taxes is a prerequisite to an appeal or abatement or cannot be deferred, no amount shall be payable by WCE to SCE for such taxes until they are assessed by a final, non-appealable order by any court or agency of competent jurisdiction. In the event that a tax payment is withheld and ultimately due and payable after appeal, WCE will be responsible for all taxes, interest and penalties, other than penalties attributable to any delay caused by SCE.

13Tax Status:

Each Party shall cooperate with the other to maintain the other Party’s tax status. Nothing in this Agreement is intended to adversely affect any of SCE’s tax exempt status with respect to the issuance of bonds including, but not limited to, local furnishing bonds.

14Charges:

14.1 WCE shall pay to SCE the following charges in accordance with this Agreement: a) Tie-Line Facilities Payment; b) Tie-Line Facilities Charge; c) Capital Additions Payment; d) any FERC fees pursuant to Section 19.3; e) Removal Cost pursuant to Section 11; f) other taxes pursuant to Section 12; g) termination

Page No. 17

charges pursuant to Section 5.3; and h) any mitigation costs prescribed by federal, state or local agencies, which could be categorized as One-Time Cost.

14.2 The Tie-Line Facilities Cost, One-Time Cost, Removal Cost and Capital Additions Cost shall be compiled in accordance with established Accounting Practice.

14.3 If, during the term of this Agreement, SCE executes an agreement to provide service to another entity which contributes to the need for the Tie-Line, the charges due hereunder shall be reviewed and if appropriate, be adjusted to appropriately reflect such service based on SCE’s cost allocation principles in effect at such time and shall be subject to FERC approval, provided that such adjustments are made consistent with Sections 6.5 and 10.3.

15 Billings and Payment:

15.1 Billing Procedure.

15.1.1 Except as otherwise specifically provided herein, commencing on or following the Effective Date, SCE will render bills to WCE for charges and payments under this Agreement and WCE shall pay such bills within thirty (30) calendar days of receipt of such bills. All payments shall be made in immediately available funds payable to SCE, or by wire transfer to a bank named by SCE.

15.1.2 WCE shall make payments to SCE for the Tie-Line Facilities Payment according to the payment schedule shown in Exhibit C. The amount of such Tie-Line Facilities Payment is based on SCE’s cost estimates and shall be subject to later adjustment pursuant to Section 15.1.8.

15.1.3 Commencing on or following the Tie-Line In-Service Date, SCE will render bills to WCE for the Tie-Line Facilities Charge. The Tie-Line Facilities Charge payments shall initially be based on the estimated Tie-Line Facilities Cost, and such payments shall be subject to later adjustment pursuant to Sections 15.1.8.3 and 15.1.8.4. The Tie-Line Facilities Charge for the first and last month of service hereunder shall be pro-rated based on the number of days in which service was provided during said months.

15.1.4 SCE will bill WCE for the Capital Additions Payment prior to commencing any work on any Capital Additions in accordance with Section 10.2; provided that, at SCE’s sole discretion, SCE may bill WCE for the Capital Additions Payment after commencing such work if SCE determines that Capital Additions are required in accordance with safety or regulatory requirements or to preserve system integrity or reliability. Such billing shall initially be based on SCE's cost estimates and shall be subject to later adjustment pursuant to Sections 15.1.8.1 and 15.1.8.2.

15.1.5 Except as otherwise provided in Section 10.3, if certain Tie-Line facilities are removed to accommodate such Capital Additions and such removal results in a change in the Tie-Line Facilities Cost, the Tie-Line Facilities Charge shall be

Page No. 18

adjusted as of the in-service date of such Capital Additions to reflect the change in the Tie-Line Facilities Cost.

15.1.6 Except as otherwise provided in Section 10.3, if such Capital Additions result in an increase in the Tie-Line Facilities Cost, then the Tie-Line Facilities Charge shall be adjusted as of the in-service date of such Capital Additions to reflect the change in the Tie-Line Facilities Cost.

15.1.7 Commencing on the Effective Date, SCE will render bills to WCE for any reimbursable FERC fees in accordance with Section 19.3. Such billing shall be for any reimbursable FERC fees or costs incurred since the preceding billing.

15.1.8 Within twelve (12) months following the Tie-Line In-Service Date, or the in-service date of any Capital Additions, as the case may be, SCE shall determine the actual recorded Tie-Line Facilities Cost or the Capital Additions Cost, including the associated One-Time Cost, and provide WCE with a final invoice.15.1.8.1 If the amounts paid for the estimated Tie-Line Facilities Payment or

the Capital Additions Payment are less than the amount due for the Tie-Line Facilities Payment or the Capital Additions Payment as determined from the actual recorded Tie-Line Facilities Cost or the Capital Additions Cost, including the associated One-Time Cost, SCE will bill WCE for the difference between the amount previously paid by WCE and the actual recorded costs, without interest, within thirty (30) calendar days of the date of such invoice.

15.1.8.2 If the amounts paid for the estimated Tie-Line Facilities Payment or the Capital Additions Payment are greater than the amount due for the Tie-Line Facilities Payment or the Capital Additions Payment as determined from the actual recorded Tie-Line Facilities Cost or the Capital Additions Cost, including the associated One-Time Cost, SCE will refund WCE the difference between the amount previously paid by WCE and the actual recorded costs, without interest, within thirty (30) calendar days of the date of such invoice.

15.1.8.3 If the amounts paid for the Tie-Line Facilities Charge are less than the amounts due for the Tie-Line Facilities Charge as determined from the actual recorded Tie-Line Facilities Cost, SCE will bill WCE for the difference between the amounts previously paid by WCE and the amounts which would have been paid based on actual recorded costs, without interest, on the next regular billing.

15.1.8.4 If the amounts paid for the Tie-Line Facilities Charge are greater than the amounts due for the Tie-Line Facilities Charge as determined from the actual recorded Tie-Line Facilities Cost, SCE will credit WCE the difference between the amounts previously paid by WCE and the amounts which would have been paid based on actual recorded costs, without interest, on the next regular billing.

15.1.9 Charges for payments upon termination shall be billed and paid as provided in Section 5.

Page No. 19

15.2 Removal Costs.

15.2.1 If, in accordance with Section 11.2, SCE decides to physically remove the Tie-Line, SCE shall render a bill to WCE for the Removal Cost. WCE shall pay the Removal Cost in accordance with Section 14.1. Such billing shall be initially based on SCE’s estimate of the Removal Cost. Within 12 months following the removal of the Tie-Line, SCE shall determine the recorded Removal Cost and provide WCE with a final invoice.

15.2.2 If the amount paid for the Removal Cost is less than the amount due for the Removal Cost as determined from the actual recorded Removal Cost, SCE will bill WCE for the difference between the amount previously paid by WCE and the amount which would have been paid based on actual recorded costs, without interest, within thirty (30) calendar days of the date of such invoice.

15.2.3 If the amount paid for the Removal Cost is greater than the amount due for the Removal Cost as determined from the actual recorded Removal Cost, SCE will refund WCE the difference between the amount previously paid by WCE and the amount which would have been paid based on actual recorded costs, without interest, within thirty (30) calendar days of the date of such invoice.

15.3 Interest on Unpaid Balances.

Interest on any past due amounts shall be calculated in accordance with the methodology specified for interest on refunds in FERC’s regulations at 18 C.F.R. Section 35.19a(a)(2)(iii). Interest on delinquent amounts shall be calculated from the due date of the bill to the date of payment. Bills shall be considered as having been paid on the date of receipt by SCE.

15.4 Default.

No Default shall exist where such failure to discharge an obligation (other than the payment of money) is the result of Force Majeure of this Agreement or the result of an act or omission of the other Party. Upon a Breach, the affected non-Breaching Party shall give written notice of such Breach to the Breaching Party. The Breaching Party shall have thirty (30) calendar days from receipt of the Default notice within which to cure such Breach; provided however, if such Breach is not capable of cure within thirty (30) calendar days, the Breaching Party shall commence such cure within thirty (30) calendar days after notice and continuously and diligently complete such cure within ninety (90) calendar days from receipt of the Default notice; and, if cured within such time, the Breach specified in such notice shall cease to exist.

Page No. 20

15.5 Right to Terminate.

If a Breach is not cured as provided in Section 15.4, or if a Breach is not capable of being cured within the period provided for in Section 15.4, the affected non-Breaching Party shall have the right to declare a Default and terminate this Agreement by written notice at any time until cure occurs, and be relieved of any further obligation hereunder and, whether or not such Party terminates this Agreement, to recover from the Breaching Party all amounts due hereunder, plus all other damages and remedies to which it is entitled at law or in equity. The provisions of this Section will survive termination of this Agreement.

15.6 Billing Dispute.

In the event WCE desires to dispute all or any part of any bill submitted by SCE, and without regard to whether SCE submitted such bill during the term or after the termination of this Agreement, WCE shall nevertheless pay the full amount of the bill when due and give written notification to SCE's Authorized Representative within one hundred eighty (180) calendar days from the date of the billing stating the grounds for the dispute and the amount in dispute. WCE shall not be entitled to an adjustment on any bill not brought to the attention of SCE within the time and in the manner herein specified. For any payments to WCE resulting from dispute resolutions, interest calculated in accordance with the methodology specified for interest on refunds in FERC's regulations at 18 C.F.R. Section 35.19a(a)(2)(iii) shall be added to the amount of any overpayment, and the entire amount refunded to WCE.

15.7 Addresses For Billing And Payment.

All payments to be made by WCE to SCE shall be sent to:

Southern California Edison CompanyAccounts ReceivableBox 600Rosemead, California 91770-0600(626) 302-9448(626) 302-9392 (Fax)

SCE may, at any time, by written notice to WCE pursuant to Section 26, change the address to which payments will be sent.

All billings to be presented by SCE to WCE shall be sent to:

Walnut Creek Energy, LLCPO Box 25176

Page No. 21

Lehigh Valley, PA 18002-5176Fax: (610) 599-8644Email: EMEInvoices@work2berk.com

WCE may, at any time, by written notice to SCE pursuant to Section 26, change the address to which billings will be sent.

16 Dispute Resolution:

16.1 Internal Dispute Resolution Procedures.

Any dispute between WCE and SCE regarding this Agreement (excluding applications for rate changes which shall be presented directly to the FERC for resolution) shall be referred to a designated senior representative of SCE and a designated senior representative of WCE to attempt, on an informal basis, to resolve the dispute as promptly as practicable. In the event the designated representatives are unable to resolve the dispute by mutual agreement within thirty (30) calendar days, or such other longer period as the Parties may mutually agree, after one Party has provided notice of a dispute and requested to use the informal procedures set forth in this Section 16.1 to resolve the dispute, such dispute shall, if both Parties so agree, be submitted to arbitration and resolved in accordance with the arbitration procedures set forth below. Absent such agreement, neither Party shall be required to submit any such dispute to arbitration, and either Party may proceed to seek any other available administrative or judicial remedy.

16.2 External Arbitration Procedures.

Any arbitration initiated under the Agreement shall be conducted before a single neutral arbitrator appointed by the Parties. If the Parties fail to agree upon a single arbitrator within thirty (30) calendar days of the referral of the dispute to arbitration, pursuant to Section 16.1, each Party shall choose one arbitrator who shall sit on a three-member arbitration panel. The two arbitrators so chosen shall within twenty (20) calendar days select a third arbitrator to chair the arbitration panel. In either case, the arbitrators shall be knowledgeable in electric utility matters, including electric transmission, distribution, and bulk power issues, and shall not have any current or past substantial business or financial relationships with any party to the arbitration (except prior arbitration). The arbitrator(s) shall provide each of the Parties an opportunity to be heard and, except as otherwise provided herein, shall generally conduct the arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association and any applicable FERC regulations.

Page No. 22

16.3 Arbitration Decisions.

Unless otherwise agreed, the arbitrator(s) shall render a decision within 90 calendar days of appointment and shall notify the Parties in writing of such decision and the reasons therefore. The arbitrator(s) shall be authorized only to interpret and apply the provisions of the Agreement and shall have no power to modify or change any of the above in any manner. The decision of the arbitrator(s) shall be final and binding upon the Parties, and judgment on the award may be entered in any court having jurisdiction. The arbitration decision shall be based on (i) the evidence in the record, (ii) the terms of the Agreement, (iii) applicable United States federal law, including the Federal Power Act and any applicable FERC regulations and decisions, and international treaties or agreements as applicable, and (iv) applicable state law. The decision of the arbitrator(s) may be reviewed solely on the grounds set forth in California law. The final decision of the arbitrator must also be filed with the FERC if it affects jurisdictional rates, terms and conditions of service or facilities.

16.4 Costs:

Each Party shall be responsible for its own costs incurred during the arbitration process and for the following costs, if applicable:16.4.1 the cost of the arbitrator chosen by the Party to sit on the three member

panel and one half of the cost of the third arbitrator chosen; or16.4.2 one half the cost of the single arbitrator jointly chosen by the Parties.

16.5 Rights Under The Federal Power Act.

Nothing in this section shall restrict the rights of any party to file a complaint with the FERC under relevant provisions of the Federal Power Act.

17 Audits:

17.1 SCE will maintain records and accounts of all costs incurred in sufficient detail to allow verification of all costs incurred, including, but not limited to, labor and associated labor burden, material and supplies, outside services, and administrative and general expenses.

17.2 WCE shall have the right, upon reasonable notice, at a reasonable time at SCE’s offices and at its own expense, to audit SCE’s records and accounts as necessary and as appropriate in order to verify costs incurred by SCE. Any audit requested by WCE shall be limited to the costs reflected in the final invoice as set forth in Sections 15.1.8 and 15.2, and shall be completed, and written notice of any audit dispute provided to SCE’s Authorized Representative, within one hundred eighty (180) calendar days following receipt by WCE of such final invoice.

Page No. 23

18 Authorized Representative:

18.1 In order to provide for the exchange of information and preparation of any necessary operating procedures or revisions to operating procedures regarding the activities required under this Agreement, each Party shall have an Authorized Representative as provided below.

18.2 Following execution of this Agreement and prior to the Tie-Line In-Service Date, the Authorized Representatives shall be as follows:

Southern California Edison Company:Deshawn SpencerProject Manager, Project Management Organization2244 Walnut Grove AvenueRosemead, CA 91770Phone (626) 302-8134(Fax) 626) 302-8262

Walnut Creek Energy, LLCKris KjellmanDirector, Engineering & ConstructionWalnut Creek Energy, LLC3 MacArthur Place, Suite 100Santa Ana, CA 92707Phone (714) 513-8105Phone (714) 513-8105Fax (949) 225-2798Email: kkjellman@edisonmission.com

Upon and subsequent to the Tie-Line In-Service Date, the Authorized Representatives shall be as follows:

Southern California Edison Company:Mr. William LawManager, Grid Contracts Administration and Billing Southern California Edison CompanyP. O. Box 8002244 Walnut Grove Ave.Rosemead, California 91770Phone (626) 302-9640Facsimile (626) 302-1152

Page No. 24

Kris KjellmanDirector, Engineering & ConstructionWalnut Creek Energy, LLC3 MacArthur Place, Suite 100Santa Ana, CA 92707Phone (714) 513-8105

Phone (714) 513-8105Fax (949) 225-2798Email: kkjellman@edisonmission.com

18.3 The Authorized Representatives are authorized to act on behalf of the Party they represent in the implementation of this Agreement. Any action taken or determination made by the Authorized Representatives in the implementation of this Agreement will be in writing.

18.4 The Authorized Representatives shall have no authority or power to modify, add, waive or eliminate any terms or conditions of this Agreement.

18.5 Either Party may at any time change the designation of its Authorized Representative by written notice to the other Party pursuant to Section 26.

19 Regulatory Authority:

19.1 No later than thirty (30) calendar days following the execution of this Agreement, SCE shall tender this Agreement for filing with FERC with a request that it be made effective upon acceptance without suspension, and WCE shall support SCE in obtaining all necessary authorizations and approvals for this Agreement.

19.2 Nothing contained herein will be construed as affecting in any way: (i) the right of SCE to unilaterally make application to the FERC for a change in rates, charges, classification, or service, or any rule, regulation, or contract relating thereto, under Section 205 of the Federal Power Act and pursuant to the Rules and Regulations promulgated by FERC thereunder; (ii) the right of WCE to oppose such changes under Section 205 of the Federal Power Act; (iii) the right of WCE to file a complaint requesting a change in rates, charges, classification, or service, or any rule, regulation , or contract relating thereto, or rate methodology or design relating to services provided hereunder, under Section 206 of the Federal Power Act and pursuant to the rules and regulations promulgated by the FERC thereunder; or (iv) the right of SCE to oppose such complaint by WCE under Section 206 of the Federal Power Act. Any change shall become effective pursuant to Section 205 of the Federal Power Act.

Page No. 25

19.3 WCE shall reimburse SCE for all fees and charges related to the FERC fees and annual charges provided in Sections 381 and 382 of the FERC’s regulations (18 C.F.R. § 381 and 382), as such regulation may from time to time be amended, that are imposed on SCE attributable to the service provided under this Agreement, or any amendments thereto. SCE will render bills to WCE for any such fees and charges incurred since the preceding billing. As of the Effective Date, no such fees and charges have been imposed on SCE attributable to the service provided under this Agreement.

19.4 Compliance with Applicable Reliability Standards: WCE shall comply with all Applicable Reliability Standards for the WCE-constructed facilities and the Walnut Creek Energy Park Project. SCE will not assume any responsibility for complying with mandatory reliability standards for such facilities and offers no opinion whether WCE must register with NERC. If required to register with NERC, WCE shall be responsible for complying with all Applicable Reliability Standards for the WCE-constructed facilities up to the Point of Change of Ownership as described in Exhibit A of this Agreement.

No Dedication of Facilities:

Except as explicitly provided herein any undertaking by one Party to the other Party under any provision of this Agreement shall not constitute the dedication of either Party's electrical system, or any portion thereof, to the public or to the other Party. It is understood and agreed that any such undertaking by either Party shall cease upon the termination of its obligations hereunder.

21 No Third Party Rights:

Unless otherwise specifically provided in this Agreement, the Parties do not intend to create rights in, or to grant remedies to, any third party as a beneficiary either of this Agreement or of any duty, covenant, obligation, or undertaking established herein.

22 Assignments:

This Agreement may be assigned by a Party only with the written consent of the other Party; provided that a Party may assign this Agreement without the consent of the other Party to any Affiliate of the assigning Party with an equal or greater credit rating and with the legal authority and operational ability to satisfy the obligations of the assigning Party under this Agreement; and provided further that WCE shall have the right to assign this Agreement, without the consent of SCE , for collateral security purposes to aid in providing financing for the large generating facility, provided that WCE will promptly notify SCE of any such assignment. Any financing arrangement entered into by WCE pursuant to this Section 22 Assignment will provide that prior to or upon the exercise of the secured party’s, trustee’s or mortgagee’s assignment rights pursuant to said

Page No. 26

arrangement, the secured creditor, the trustee or mortgagee will notify SCE of the date and particulars of any such exercise of assignment right(s), including providing SCE with proof that it meets the requirements of Section 7. Any attempted assignment that violates this Section 22 Assignment is void and ineffective. Any assignment under this Agreement shall not relieve a Party of its obligations, nor shall a Party’s obligations be enlarged, in whole or in part, by reason thereof. Where required, consent to assignment will not be unreasonably withheld, conditioned or delayed.

23 Relationship of Parties:

The covenants, obligations, and liabilities of the Parties are intended to be several and not joint or collective, and nothing contained in this Agreement shall ever be construed to create an association, joint venture, or partnership, or to impose a partnership covenant, obligation, or liability on or with regard to either Party. Each Party shall be individually responsible for its own covenants, obligations, and liabilities as provided in this Agreement. Neither Party shall be under the control of the other Party. Neither Party shall be the agent of or have a right or power to bind the other Party without such other Party's express written consent.

Waivers:

Any waiver at any time by either Party of its rights with respect to a default under this Agreement, or with respect to any other matter arising from this Agreement, shall not be deemed a waiver with respect to any subsequent default or other matter arising in connection therewith. Any delay, with the exception of the statutory period of limitation in assessing or enforcing any right, shall not be deemed a waiver of such right.

25 Governing Law:

Except as otherwise provided by federal law, this Agreement shall be governed by and construed in accordance with, the laws of the State of California.

26 Notices:

26.1 Any notice, demand, or request provided for in this Agreement, or served, given, or made in connection with it, shall be in writing and deemed properly served, given, or made if delivered in person, transmitted by facsimile (followed by written confirmation) or sent by United States mail, postage prepaid, to the person specified herein unless otherwise provided in this Agreement:

Southern California Edison CompanyMr. William Law

Page No. 27

Manager, Grid Contracts Administration and Billing Southern California Edison CompanyP. O. Box 8002244 Walnut Grove Ave.Rosemead, California 91770Phone (626) 302-9640Facsimile (626) 302-1152

Walnut Creek Energy, LLCGeneral Counsel3 MacArthur Place, Suite 100Santa Ana, CA 92707Phone (714) 513-8105Phone (714) 513-8000Fax (714) 513-8916Email: DMCDEVITT@MWGEN.COM

26.2 Either Party may, at any time by notice to the other Party, change the designation or address of the person so specified as the one to receive notices pursuant to this Agreement.

27 Severability:

In the event that any term, provision, covenant, or condition of this Agreement or the application of any such term, covenant, or condition shall be held invalid as to any person, entity, or circumstance by any court, arbitration, or regulatory authority having jurisdiction, the invalidity of such term, covenant or condition shall not affect the validity of any other term, provision, condition or covenant and such term, provision, covenant or condition shall remain in force and effect as applied to the Agreement to the maximum extent permitted by law. The Parties hereto further agree to negotiate in good faith to establish new and valid terms, conditions and covenants to replace any found invalid so as to place each Party as nearly as possible in the position contemplated by this Agreement.

28 Entire Agreement:

This Agreement constitutes the complete and final expression of the agreement between the Parties and is intended as a complete and exclusive statement of the terms of their agreement which supersedes all prior and contemporaneous offers, promises, representations, negotiations, discussions, communications, and other agreements which may have been made in connection with the subject matter of this Agreement.

29 Ambiguities:

Page No. 28

Ambiguities or uncertainties in the wording of this Agreement shall not be construed for or against any Party, but shall be construed in the manner that most accurately reflects the Parties’ intent as of the date they executed this Agreement.

30 Force Majeure:

30.1 No Party shall be considered to be in Default with respect to any obligation hereunder other than the obligation to pay money when due, if prevented from fulfilling such obligation by Force Majeure. A Party unable to fulfill any obligation hereunder (other than an obligation to pay money when due) by reason of Force Majeure shall give notice and the full particulars of such Force Majeure to the other Party in writing or by telephone as soon as reasonably possible after the occurrence of the cause relied upon. Telephone notices given pursuant to this Section shall be confirmed in writing as soon as reasonably possible and shall specifically state full particulars of the Force Majeure, the time and date when the Force Majeure occurred and when the Force Majeure is reasonably expected to cease. The Party affected shall exercise due diligence to remove such disability with reasonable dispatch, but shall not be required to accede or agree to any provision not satisfactory to it in order to settle and terminate a strike or other labor disturbance.

30.2 Economic hardship is not considered a Force Majeure event.

31 Indemnification:

Each Party shall at all times indemnify, defend, and hold the other Party harmless from, any and all Losses arising out of or resulting from the other Party's action or inactions of its obligations under this Agreement on behalf of the indemnifying Party, except in cases of gross negligence or intentional wrongdoing by the indemnified Party.

Page No. 29

31.1 Indemnified Party. If an indemnified Party is entitled to indemnification under this Section 32 as a result of a claim by a third party, and the indemnifying Party fails, after notice and reasonable opportunity to proceed under Section 32.1, to assume the defense of such claim, such indemnified Party may at the expense of the indemnifying Party contest, settle or consent to the entry of any judgment with respect to, or pay in full, such claim.

31.2 Indemnifying Party. If an indemnifying Party is obligated to indemnify and hold any indemnified Party harmless under this Section 32, the amount owing to the indemnified Party shall be the amount of such indemnified Party’s actual Loss, net of any insurance or other recovery.

31.3 Indemnity Procedures. Promptly after receipt by an indemnified Party of any claim or notice of the commencement of any action or administrative or legal proceeding or investigation as to which the indemnity provided for in Section 32.1 may apply, the indemnified Party shall notify the indemnifying Party of such fact. Any failure of or delay in such notification shall not affect a Party's indemnification obligation unless such failure or delay is materially prejudicial to the indemnifying Party.

The indemnifying Party shall have the right to assume the defense thereof with counsel designated by such indemnifying Party and reasonably satisfactory to the indemnified Party. If the defendants in any such action include one or more indemnified Parties and the indemnifying Party and if the indemnified Party reasonably concludes that there may be legal defenses available to it and/or other indemnified Parties which are different from or additional to those available to the indemnifying Party, the indemnified Party shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on its own behalf. In such instances, the indemnifying Party shall only be required to pay the fees and expenses of one additional attorney to represent an indemnified Party or indemnified Parties having such differing or additional legal defenses.

The indemnified Party shall be entitled, at its expense, to participate in any such action, suit or proceeding, the defense of which has been assumed by the Indemnifying Party. Notwithstanding the foregoing, the indemnifying Party (i) shall not be entitled to assume and control the defense of any such action, suit or proceedings if and to the extent that, in the opinion of the indemnified Party and its counsel, such action, suit or proceeding involves the potential imposition of criminal liability on the indemnified Party, or there exists a conflict or adversity of interest between the indemnified Party and the indemnifying Party, in such event the indemnifying Party shall pay the reasonable expenses of the indemnified Party, and (ii) shall not settle or consent to the entry of any judgment in any action, suit or proceeding without

Page No. 30

the consent of the indemnified Party, which shall not be unreasonably withheld, conditioned or delayed.

32 Signature Clause:

The signatories hereto represent that they have been appropriately authorized to enter into this Agreement on behalf of the Party for whom they sign. This Agreement is hereby executed as of the 25 day of April , 2011.

SOUTHERN CALIFORNIA EDISON COMPANY

By: _____________/s/_________________

Name: David MeadTitle: Vice President,

Engineering and Technical Services

WALNUT CREEK ENERGY, LLC

By: ______________/s/_______________

Name: Steven D. EisenbergTitle: President

Page No. 31

Exhibit AScope of Work

Design and EngineeringDesign, engineer, and prepare specifications for the Tie-Line required for interconnection of the Walnut Creek Energy Park Project. This work commenced under the Letter Agreement.

RegulatoryApply for a CPCN from the CPUC.

Procurement and Construction1. Procure materials and hardware assemblies per engineering specifications to construct a

new 220 kV transmission line which will terminate at the Walnut Creek Energy Park Project dead end structure and at the new 220kV switch rack located at SCE’s Walnut Substation position 1x.

2. The length of the Tie-Line is 0.4 circuit miles. 3. The Tie-Line will be energized at 220,000 volts nominal.4. The Tie-Line will be constructed of 2B - 1590 kcmil ACSR “Lapwing” conductor per

phase, ½ inch extra high strength overhead ground wire (OHGW), or optical ground wire (OPGW) as needed, supported by three tubular steel poles (CONST.1 thru CONST. 3), and two terminal rack structures; one located at the SCE Walnut Substation position 1x, and the other located at the Walnut Creek Energy Park Project.

5. Cross over twelve SCE-owned 66kV sub-transmission lines.6. Install new foundations and poles along the proposed Tie-Line route.7. Install new polymer insulators, new conductor, and dead end hardware at new structure

locations from the Walnut Creek Energy Park to Walnut Substation position 1x.8. Install approximately 0.1 circuit miles of OHGW from the Walnut 220kV switch rack

position 1x to structure location CONST.1.9. Install new OHGW deadend hardware assemblies and required dampers from the Walnut

220kV rack position 1x to CONST.1.10. Install approximately 0.3 circuit miles of OPGW from CONST.1 to the Walnut Creek

Energy Park deadend rack 11. Install new OPGW deadend hardware assemblies from the structure CONST.1 to the

Walnut Creek Energy Park deadend rack12. Install new splice boxes as required at structure locations CONST.1 and CONST.2.

Point of Interconnection: SCE’s Walnut Substation

Point of Change of Ownership: Walnut Creek Energy Park Project switchyard dead-end structure

Convert Overhead Circuits to Underground Circuits at Walnut Substation

Page No. 32

Underground two existing 66kV sub-transmission lines (Walnut-Bassett-Proctor and Walnut-Hillgen-Industry-Mesa-Reno) at Walnut Substation. This includes installation of 1200 feet of copper cable each, a tubular steel pole riser and a substructure (vault/conduit).

Replace One Circuit Breakers at Walnut SubstationReplace 66 kV 1200A circuit breaker number 63 with a new, higher ampere rated circuit breaker. The 66kV 1200 ampere circuit breaker is violated due to the undergrounding.

Replace Two Circuit Breakers at Proctor SubstationReplace two 66kV 1200A circuit breakers at Proctor Substation.

Real Properties1. Procure rights for portions of the Tie-Line path where no current property rights exist, such as with the adjacent railroad and water company property.WCE-constructed facilitiesThe deadend rack located at the Walnut Creek Energy Park Project will be engineered,procured, constructed, owned, operated, and maintained by WCE.

Page No. 33

Exhibit BTie-Line Facilities Cost

Estimated Cost

ElementTie-Line

Facilities CostsOne-Time

Cost Total Cost ITCC Cost

Design and Engineering $ 200,000.00 $ - $ 200,000.00 $ 70,000.00 CEC and CPUC related work $ 275,000.00 $ - $ 275,000.00 $ 96,250.00

Procure and construct a 0.4 circuit mile, 220 kV generation tie-line $ 3,050,000.00 $ - $ 3,050,000.00 $ 1,067,500.00

Convert overhead circuits Walnut-Basset-Proctor 66kV and Walnut-Hillgen-Industry-Mesa-Reno 66kV to underground circuits inside the Walnut Substation $ 1,380,000.00 $ 40,000.00 $ 1,420,000.00 $ 483,000.00 Replace two 66kV circuit breakers at Walnut Substation $ 1,680,000.00 $ - $ 1,680,000.00 $ 588,000.00 Replace two 66kV circuit breakers at Proctor Substation $ 430,000.00 $ 50,000.00 $ 480,000.00 $ 150,500.00 Real Properties $ 75,560.00 $ - $ 75,560.00 $ 14,000.00 Total $ 7,090,560.00 $ 90,000.00 $ 7,180,560.00 $ 2,481,696.00

Tie-Line Facilities Payment = (Tie-Line Facilities Cost + One-Time Cost ) = $7,090,560.00+ $90,000.00= $7,180,560.00

Estimated Tax Liability: Pursuant to Section 12.4 of the Agreement: WCE’s estimated tax liability shall be as follows:

Estimated tax liability =35% * Tie-Line Facilities Cost = 35% * $7,090,560.00 = $2,481,696.00

Based upon the estimated tax liability, WCE shall provide SCE security in the amount of $2,481,696.00

Page No. 34

Exhibit BTie-Line Facilities Cost

Actual Cost

ElementTie-Line

Facilities CostsOne-Time

Cost Total Cost ITCC CostDesign and Engineering CEC and CPUC related work Procure and construct a 0.4 circuit mile, 220 kV generation tie-line

Convert overhead circuits Walnut-Basset-Proctor 66kV and Walnut-Hillgen-Industry-Mesa-Reno 66kV to underground circuits inside the Walnut Substation Replace two 66kV circuit breakers at Walnut Substation Replace two 66kV circuit breakers at Proctor Substation Relocate vehicle fueling station at Walnut Substation Real Properties Total

Tie-Line Facilities Payment = (Tie-Line Facilities Cost + One-Time Cost = $ + $ = $

Estimated Tax Liability: Pursuant to Section 12.4 of the Agreement: WCE’s estimated tax liability shall be as follows:

(Current Tax Rate x (Gross Income Amount – Present Value of Tax Depreciation)) / (1-Current Tax Rate) = 35%

Estimated tax liability =35% * Tie-Line Facilities Cost = 35% * $ = $

Page No. 35

Based upon the estimated tax liability, WCE shall provide SCE security in the amount of $

Page No. 36

Exhibit CEstimated Payment Schedule

Payment Number

Payment Due Date

Tie-Line Facilities Cost

One-Time Cost Total Payment ITCC

1 6/1/2006* $ 200,000.00 $ 200,000.00* $ 70,000.00 2 5/1/2011** $ 95,000.00 $ 95,000.00 $ 33,250.00 3 6/1/2011 $ 195,000.00 $ 5,000.00 $ 200,000.00 $ 68,250.00 4 7/1/2011 $ 240,000.00 $ 5,000.00 $ 245,000.00 $ 84,000.00 5 8/1/2011 $ 300,000.00 $ 5,000.00 $ 305,000.00 $105,000.00 6 9/1/2011 $ 415,560.00 $ 5,000.00 $ 420,560.00 $145,446.00 7 10/1/2011 $ 485,000.00 $ 5,000.00 $ 490,000.00 $169,750.00 8 11/1/2011 $ 555,000.00 $ 5,000.00 $ 560,000.00 $194,250.00 9 12/1/2011 $ 585,000.00 $ 5,000.00 $ 590,000.00 $204,750.00

10 1/1/2012 $ 600,000.00 $ 5,000.00 $ 605,000.00 $210,000.00 11 2/1/2012 $ 615,000.00 $ 10,000.00 $ 625,000.00 $215,250.00 12 3/1/2012 $ 615,000.00 $ 10,000.00 $ 625,000.00 $215,250.00 13 4/1/2012 $ 590,000.00 $ 10,000.00 $ 600,000.00 $206,500.00 14 5/1/2012 $ 540,000.00 $ 5,000.00 $ 545,000.00 $189,000.00 15 6/1/2012 $ 455,000.00 $ 5,000.00 $ 460,000.00 $159,250.00 16 7/1/2012 $ 340,000.00 $ 5,000.00 $ 345,000.00 $119,000.00 17 8/1/2012 $ 195,000.00 $ 5,000.00 $ 200,000.00 $ 68,250.00 18 9/1/2012 $ 70,000.00 $ 70,000.00 $ 24,500.00 Totals $ 7,090,560.00 $ 90,000.00 $ 7,180,560.00 $ 2,481,696.00

Notes:*Paid pursuant to the Letter Agreement.**Due date for the first payment is thirty (30) days after the Effective Date.

Page No. 37

Exhibit DTie-Line Facilities Charge

Estimated Actual

Effective Date

Customer-Financed Monthly

Rate

Tie-Line Facilities

Cost

Tie-Line Facilities Charge

Tie-Line Facilities

Cost

Tie-Line Facilities Charge

As of the Tie-Line In-Service Date 0.38% $7,090,560.00 $26,944.13.000

[to be inserted

after true-up]

[to be inserted

after true-up]

Page No. 38

Exhibit ESingle Line Diagram

Point of Change of Ownership

Point of Interconnection