[RELIANT ENERGY LOGO] Exhibit 10.22
05/23/2002
Commonwealth Energy Corporation
15901 Red Hill Avenue, Suite 100
Tustin, CA 92780
Fax No. (714) 259-2553
CONFIRMATION LETTER, 001
This confirmation letter is being provided pursuant to and in accordance with
the Master Power Purchase and Sale Agreement dated May 18, 2002 (the "Master
Agreement") between Reliant Energy Services, Inc. ("RES") and Commonwealth
Energy Corporation ("Counterparty"). Terms used but not defined herein shall
have the meanings ascribed to them in the Master Agreement. This Confirmation
Letter shall confirm the Transaction agreed to on May 23, 2002 ("Trade Date")
regarding the sale of the Product under the terms and conditions that follow:
Seller: RES
Buyer: Counterparty
Product: CAISO Energy
Delivery
Period: [Confidential treatment requested]*
Hours ending 0100 through 2400, Pacific Prevailing
Time, Monday through Sunday, including NERC holidays.
Contact
Quantity: Varies by the day and hour during the Delivery
Period, as specified in Attachment A
Delivery Point: SP-15, however, in the event that SP-15 is split into
multiple zones or otherwise redefined, deliveries will
be made to the Zone(s), Node(s) and/or Delivery
Point(s) that most nearly resemble SP-15 as it exists
on the Trade Date.
Contract Price: [Confidential treatment requested]* per MWh
Special Provisions
1. As a condition precedent to the obligation of the Seller of this Transaction,
within five (5) Business Days following the Trade Date, Counterparty shall
provide RES with a letter of credit which shall be in form and substance
acceptable to RES ("Letter of Credit"). The Letter of Credit shall be in the
amount of [Confidential treatment requested]*, and must be maintained with RES
through July 31, 2002. For the remaining months in the Contract Term (see
below). Counterparty shall provide RES with a new Letter of Credit or amend the
original Letter of Credit, in any event no later than ten (10) Business Days
before the beginning of each month so that RES is in possession of a Letter of
Credit in an amount which corresponds to the applicable month. The Letter of
Credit must be maintained with RES throughout each month, for the amount
specified below.
Should the Letter of Credit ever cease to be in effect for the relevant Letter
of Credit Amount during the Contract Term for any reason, this shall constitute
an Event of Default pursuant to Section 5 1(c) of the Master Agreement. For the
purposes of this Confirmation Letter 001, and Confirmation Letter 002, the
three (3) Business Day "grace period" set forth in Section 5.1(c) shall be
deemed not to apply and Counterparty shall be considered the "Defaulting Party".
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* The omitted information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
[RELIANT ENERGY LOGO]
<Table>
<Caption>
CONTRACT TERM LETTER OF CREDIT AMOUNT IN $US
- ------------- ------------------------------
[Confidential treatment requested]* [Confidential treatment requested]*
</Table>
2. Notwithstanding 6.1 of the Master Agreement, Counterparty shall pay RES for
any amounts due under this Transaction every two weeks rather than a calendar
month, pursuant to the following payment schedule:
<Table>
<Caption>
TWO WEEK PAYMENT SCHEDULE
- ------------------------------------------------------------------------------------------------
DELIVERY PERIOD
- -----------------------------------
START END INVOICE DATE **PAYMENT DUE DATE
----- --- ------------ -----------------
1. [Confidential treatment requested]*
2. [Confidential treatment requested]*
3. [Confidential treatment requested]*
4. [Confidential treatment requested]*
5. [Confidential treatment requested]*
6. [Confidential treatment requested]*
7. [Confidential treatment requested]*
8. [Confidential treatment requested]*
9. [Confidential treatment requested]*
10. [Confidential treatment requested]*
11. [Confidential treatment requested]*
12. [Confidential treatment requested]*
</Table>
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* The omitted information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.
** Prior Business Day convention
[RELIANT ENERGY LOGO]
3. Collateral Threshold: Notwithstanding Section 6.1(c) and 8.2(c) of the
Master Agreement, neither party shall be required to provide performance
Assurance in an amount in excess of [Confidential treatment requested]*.
Please confirm that the terms stated herein accurately reflect the agreement
reached on the Trade Date between you and RES by returning an executed copy of
this Confirmation by facsimile to RES at (713) 393-0212. Your responses should
reflect the appropriate party in your organization who has the authority to
enter into this transaction. If you have any questions, please call
(713) 207-5855.
RELIANT ENERGY SERVICES COMMONWEALTH ENERGY CORPORATION
By: [Signature Illegible] By: [Signature Illegible]
------------------------------- ------------------------------------
Name: [Illegible] Name: [Illegible]
----------------------------- ----------------------------------
Title: V.P. Title: C.O.O.
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* The omitted information has been filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2.