1 EXHIBIT 10.13 ENERGY MANAGEMENT SERVICE AGREEMENT WITH ILLINOVA ENERGY PARTNERS, INC. 2 [LETTERHEAD OF ILLINOVA] April 5, 1999 Mr. Joel Dickson Vice President of Customer Service and Operations Support Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 Dear Mr. Dickson: This letter constitutes an Agreement ("Agreement") between ILLINOVA ENERGY PARTNERS, INC. ("IEPI"), a Delaware corporation, and the Southern California Water Company (SCWC) and its Bear Valley Electric Division (BEAR VALLEY). IEPI and SCWC are each sometimes referred to herein as "Party" and are collectively referred to as "Parties." The purpose of this Agreement is to enable a Party to purchase, sell or exchange capacity, energy, and/or other services (a "Transaction") from, to, or with the other Party in accordance with the terms and conditions provided herein. This Agreement is not intended to obligate either Party to purchase, sell or exchange any amount of such capacity, energy, and/or other services from, to or with the other Party except as provided herein. Term and Conditions 1. Term of Agreement This Agreement shall become effective upon execution by both Parties and commence on May 1, 1999, and shall remain in effect until April 30, 2002; provided, however, that this Agreement shall remain in effect as to any Transaction agreed upon by the Parties prior to termination until the completion of and final payment for such Transaction. 2. Availability for Purchase, Sale or Exchange of Capacity, Energy and/or Other Services a. IEPI shall provide services under this section pursuant to the terms and conditions of the Scheduling Coordination and Real-Time Services Agreement between IEPI and SCWC, dated April 5, 1999. 3 Mr. Joel Dickson April 5, 1999 Page 2 3. Compensation for Capacity, Energy and/or Other Services The compensation to be paid with respect to a Transaction hereunder shall be as specified in the agreement entered into pursuant to Section 2(b) or Section(c); provided, however, that the compensation for a sale of capacity, energy and/or other services by IEPI shall be pursuant to IEPI's then current FERC Electric Rate Schedule. IEPI's current schedule, Schedule No. 1, is attached hereto as Exhibit A and made a part hereof. Such Schedule may be amended from time to time. 4. Reliability Both IEPI and SCWC shall comply with the operation and scheduling guidelines specified by the North American Electric Reliability Council and the Western Systems Coordinating Council. 5. Billing and Payment a. All power Transactions hereunder shall be accounted for on the basis of scheduled hourly quantities. Each Party shall maintain records of hourly schedules for accounting and operating purposes. The billing period for Transactions hereunder shall be one (1) calendar month. b. A bill shall be submitted within approximately ten (10) days following the last day of each month covering Transactions during that month. Payment shall be due within twenty (20) days of the date the bill was received. Payment shall be made by electronic wire transfer to the address set forth in this Section 5. c. Amounts not paid on or before the due date shall accrue interest at one and one half percent (1 1/2%) per month or the maximum rate permitted by law, whichever is less, from the due date until payment is made. d. In the event any portion of a bill is in dispute, the disputed amount shall be paid under protest when due. The dispute shall be discussed and resolved by the Authorized Representatives, who shall use their best efforts to amicably and promptly resolve the dispute. Upon determination of the correct billing amount, the proper adjustment shall be paid or refunded promptly with interest accrued in accordance with Section 5(c) and computed from the date payment was received to the date the adjustment is made. 4 Mr. Joel Dickson April 5, 1999 Page 3 e. All billings to SCWC shall be sent to: Mr. Raymond P. Juels Manager of Energy Resources Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 or to such address as SCWC may specify by written notice given as provided herein. f. All payments to IEPI greater than $50,000 shall be by wire transfer to: American National Bank 2000 South Naperville Road Wheaton, IL 60187 ABA#: 071000770 Account#: 1818-0752 For Illinova Energy Partners All payments to IEPI less than $50,000 may be made by check to: Illinova Power Marketing, Inc. Attention: Jennifer Hughey, Controller 6955 Union Park Center, Suite 300 Midvale, Utah 84047 or to such other address as IEPI may specify by written notice given as provided herein. 6. Authorized Representatives Within thirty (30) days after execution of this Agreement, each Party shall designate in writing its Authorized Representative(s) for purposes of this Agreement. Either Party may, by written notice to the other given as provided herein, change its Authorized Representative(s). 5 Mr. Joel Dickson April 5, 1999 Page 4 7. Tax Liability All transactions are subject to any applicable sales, use, franchise, excise, ad valorem or other similar tax. Receipt of satisfactory evidence of exemption is required to avoid any applicable taxation. 8. Notices All written notices under this Agreement (except bills given pursuant to Section 5) shall be deemed effective upon receipt if delivered in person or sent by facsimile, express courier, or registered or certified mail, postage prepaid, to the address specified below: If to IEPI: Illinova Power Marketing, Inc. Attention: Jennifer Hughey, Controller 6955 Union Park Center, Suite 300 Midvale, Utah 84047 Fax No.: (801) 568-2104 If to SCWC: Mr. Raymond P. Juels Manager of Energy Resources Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 A Party may, by notice given as provided in this Section, change the address to which notice is to be given. 9. Necessary Authorization Each Party represents that it has the necessary corporate and/or legal authority to enter into this Agreement and to perform each and every duty and obligation imposed herein, and that this Agreement constitutes a valid, binding and enforceable obligation of such Party. Each individual affixing a signature to this Agreement represents and warrants that he or she has been duly authorized to execute this Agreement on behalf of the Party he or she represents. 6 Mr. Joel Dickson April 5, 1999 Page 5 10. indemnification Each party agrees to protect, indemnify and hold harmless the other Party, its directors, officers, employees and agents, against and from any and all losses, claims, actions, suits and proceedings (including attorneys fees and costs) for or on account of injury to or death of persons or damage to property resulting from or arising out of the indemnifying Party's actions or facilities, excepting only such injury, death, or damage as may be caused by the fault or negligence of the other Party, its directors, officers, employees, or agents. This Section 10 is not intended to impose on a Party an obligation to protect, indemnify and defend the other Party with respect to injury or death of persons or damage to property, resulting from or arising out of the fault or negligence of entities or persons other than a Party, its directors, officers, employees or agents. 11. Uncontrollable Forces Neither Party shall be considered to be in default in the performance of any obligations under this Agreement (other than obligations to pay bills) when and to the extent such failure of performance shall be due to any uncontrollable force. The term "uncontrollable force" shall mean any cause beyond the control of the Party affected, including but not restricted to, failure or threat of failure of facilities, flood, earthquake, geohydraulic subsidence, tornado, storm, fire, or other catastrophe, civil disobedience, labor dispute, or sabotage, restraint by court order or public authority (whether valid or invalid), and action or non-action by or inability to obtain or maintain the necessary authorizations or approvals from any governmental agency or authority. An "uncontrollable force" must be a cause which by exercise of due diligence the affected Party could not reasonably have been expected to avoid and which by exercise of due diligence it shall not be able to overcome. The failure to perform for any reason of any supplier of capacity, energy or other services to IEPI shall constitute an uncontrollable force affecting IEPI and entitling IEPI to relief under this Section 11. No Party shall, however, be relieved of liability for failure of performance if such failure is due to causes arising out of its own negligence or due to removable or remediable causes which it fails to remove or remedy within a reasonable time period. Nothing contained herein shall be construed so as to require a Party to settle any strike or labor dispute in which it may be involved. A Party rendered unable to fulfill any of its obligations under this Agreement by reason of uncontrollable force shall give prompt written notice of such fact to the other Party and shall exercise due diligence to remove such inability with all reasonable dispatch. 7 Mr. Joel Dickson April 5, 1999 Page 6 12. Audit Rights Upon prior notice, SCWC shall have the right to designate its own employee representative(s) or its contracted representative(s) with a certified public accounting firm who shall have the right to examine those accounts, books, records, or supporting documentation to verify the accuracy of any statement, charge, computation or demand made under or pursuant to any agreement and related capacity, energy, transmission or other electric services agreements. Any such audit(s) shall be at the auditing Party's expense and undertaken at responsible times and in conformance with generally accepted auditing standards. The IEPI agrees to fully cooperate with any such audit(s). The right to audit shall extend during the length of any agreement and for a period of not more than one (1) year following the month in which services were performed. The Parties shall retain all necessary records and documentation for the entire length of this audit period. 13. Control and Payment of Subordinates SCWC retains IEPI on an independent contractor basis and not as an employee. The personnel performing the services contemplated by this agreement on behalf of SCWC shall at all times be under IEPI's exclusive direction and control and are not employees of SCWC. IEPI shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of services under any agreement and as required by law. IEPI shall be responsible for all reports and obligations regarding such personnel including, but not limited to: social security taxes, income tax withholding, unemployment insurance, and worker's compensation insurance. 14. Fair Employment Parties agree not to unlawfully discriminate in its employment practices against any employee, applicant for employment, or group of people on the basis of race, religion, color, sex, age, physical condition or national origin. 15. Assignment No transfer or assignment of all or any part of this Agreement or of any rights, benefits, or duties hereunder by any Party shall be effective without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, that this Section 15 shall not apply to interests which arise by reason of security agreements 8 Mr. Joel Dickson April 5, 1999 Page 7 heretofore granted or executed by a Party, or to an assignment to the successor of a Party by merger or corporate reorganization. 16. No Dedication of Facilities Any undertaking by one Party under any provisions of this Agreement shall not constitute the dedication of the system or any portion thereof of such Party to the public or to the other Party or any other person or entity, and it is understood and agreed that any such undertaking by either Party shall cease upon the termination of such Party's obligations under this Agreement. 17. Choice of Laws This Agreement shall be governed by and construed in accordance with the laws of the State of California, except to the extent preempted by the Federal Power Act and the rules and regulations of the FERC. 18. Binding Effect The terms and provisions of this Agreement, and the respective rights and obligations hereunder of each Party, shall be binding upon, and inure to the benefits of, its successors and permitted assigns. 19. Non-Waiver of Defaults No waiver by either Party of any default of the other Party under this Agreement shall operate as a waiver of a future default, whether of a like or different character. 20. Written Amendments No modification of the terms and provisions of this Agreement shall be or become effective except by written amendment executed by the Parties. 21. Severability Should any provision of this Agreement for any reason be declared invalid or unenforceable by final and applicable order of any court or regulatory body having jurisdiction, such decision shall not affect the validity of the remaining portions, and the remaining portions shall remain in force and effect as if this Agreement had been executed without the invalid 9 Mr. Joel Dickson April 5, 1999 Page 8 portion. This Agreement is subject to review by the California Public Utilities Commission "CPUC". The Agreement may be terminated if disapproved by the CPUC: however, SCWC shall be liable for any economic damages to IEPI with respect to any power transactions made under this Agreement with IEPI. 22. Survival Any provisions(s) of this Agreement that expressly or by implication comes into or remains in force following the termination or expiration of this Agreement shall survive the termination or expiration of this Agreement. If the foregoing terms are acceptable to SCWC, please sign and return one copy of this Agreement. The remaining copy is for your files. Sincerely, /s/ MARK V. ALLEN ----------------------- Mark V. Allen Director, Regional Marketing Illinova Energy Partners, Inc. Accepted as of this 5 day of April, 1999 for: The Southern California Water Company /s/ JOEL A. DICKSON ------------------------ Joel A. Dickson By: Mr. Joel Dickson Title: Vice President of Customer Service and Operations Support 10 EXHIBIT A ILLINOVA ENERGY PARTNERS, INC. FERC TARIFF NO. 1 1. Availability: Illinova Energy Partners, Inc. ("IEPI") makes electric energy and capacity available for resale under this Rate Schedule to any purchaser. 2. Applicability: This schedule is applicable to all sales of energy or capacity by IEPI not otherwise subject to a particular rate schedule of IEPI. 3. Rates: All sales shall be made at rates established by agreement between the purchaser and IEPI. 4. Other Terms and Conditions: All other terms and conditions shall be established by agreement between the purchaser and IEPI. 5. Affiliate Sales and Purchases Prohibited: No sale or purchase may be made pursuant to this Rate Schedule to or from any IEPI affiliate. 6. Effective Date: This Rate Schedule is effective on and after May 20, 1995. 11 [ILLINOVA LETTERHEAD] Mr. Raymond P. Juels Manager of Energy Resources Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 RE: Illinova Energy Partners, Inc. (IEP) Agreements with Southern California Water Company (SCWC) for Electric Power Management Services Dear Ray: IEP hereby submits its originals of our three-year Daily Purchasing Agreement. Please execute both originals for each agreement, keep one for your records and forward one executed original back to IEP per my attention. I look forward to our transition meeting at 2:00 p.m. in IEP's Irvine offices on Friday, April 23, 1999. If you have any questions, please call myself at (801) 568-2126. Thank you again for your business, and Illinova looks forward to commencing service for you. Sincerely, /s/ MARK V. ALLEN Mark V. Allen Director, Regional Marketing 12 [ILLINOVA LETTERHEAD] VIA FACSIMILE April 5, 1999 IEP REF# S- S-BEAR VALLEY - SCWC-001 Mr. Joel Dickson Vice President of Customer Service and Operations Support Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 This letter agreement outlines the terms and conditions of a transaction between the Southern California Water Company, its Bear Valley Electric Division and Illinova Energy Partners, Inc. (IEP). BUYER: Southern California Water Company SELLER: Illinova Energy Partners, Inc. PRODUCT: Firm Energy TERM: May 1, 1999 through April 30, 2000. HOURS: Monday through Sunday, Hour Ending (HE) 0100 through Hour Ending (HE) 2400, Pacific Prevailing Time (PPT), including NERC Holidays. AMOUNT: MW PER HOUR DAYS HOURS PER DAY TOTAL MWh ----------- ---- ------------- --------- 12 365 24 105,120 PRICE: US DOLLARS $28.00/MWh POINT OF DELIVERY: Delivered at California PX location take-out points, including Victorville-Lugo midpoint and Vista Substation. SCHEDULING: IEP will schedule energy based upon the amounts above. IEP's telephone numbers for real-time coverage of this agreement are (801) 568-2151 and 1-800-500-3260. CURTAILMENTS: Curtailments are only permitted for system emergencies due to UNCONTROLLABLE FORCES (unanticipated events that prevent a Party from performing it's obligations at the Delivery Point to deliver or receive energy, which is not within the reasonable control and which by the exercise of all commercial efforts such Party has been unable to overcome or obtain or cause to be obtained substitute performance therefore). Curtailments shall not be made for economic reasons. DAMAGES: If SELLER fails to deliver the Amount, where such failure was not excused by uncontrollable forces (as defined under Curtailments) or by Buyer, Seller shall be liable to Buyer for all such energy. The liability shall be calculated as the difference between 13 April 5, 1999 1) Buyer's reasonably incurred cost of replacing the comparable energy Seller failed to deliver (per megawatt-hour) and 2) the PRICE times the total Contract energy not delivered, to the extent that the calculation resulted in a positive number. If BUYER fails to accept delivery of the Amount, where such failure was not excused by uncontrollable forces (as defined under Curtailments) or by Seller, Buyer shall be liable to Seller for all such energy. The liability shall be calculated as the difference between 1) the PRICE and 2) the revenue (per megawatt-hour) that Seller receives in selling the capacity and energy Buyer failed to accept times the total Contract energy not accepted, to the extent that the calculation resulted in a positive number. Neither party shall be liable to the other for any consequential, incidental, punitive, or special damages for failure to take or receive energy in accordance with the conditions stated above. IEP CONTACTS: Primary Contact Secondary Contact Gaston Mejia Layne Brown Short Term Trader Director Power Operations Phone: (801) 568-2129 Phone: (801) 568-2150 GENERAL TERMS: This confirmation letter is provided pursuant to and in accordance with The Illinova-Southern California Water Company Enabling Agreement and constitutes part of and is subject to all of the terms and provisions of such Agreement. Terms used but not defied herein shall have the meanings ascribed to them in the Agreement. BILLING: Billings and payment shall be in accordance with the terms specified in Section 9 of the WSPP Agreement. Information for SCWC and IEP are provided below. Billings shall be mailed to: Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 Attention: Mr. Raymond P. Juels Payments shall be mailed to: Payments over $50,000 shall be wired to: Illinova Energy Partners, Inc. American National Bank 6955 Union Park Center, Suite 300 2000 South Naperville Road Midvale, UT 84047 Wheaton, IL 60187 Attn: Jennifer Hughey ABA #: 071000770 Account #: 1818-0752 For Illinova Energy Partners ARTICLE II: DEFAULT AND FINANCIAL RESPONSIBILITY Should a party have a reasonable basis to believe that the creditworthiness or financial responsibility of the other Party has become unsatisfactory at any time during which this Agreement is in effect, satisfactory security may be required before further deliveries are made. In the event either Party shall (i) Make an assignment or any general arrangement for the benefit of creditors; (ii) file a petition or otherwise commence, authorize, or 14 April 5, 1999 acquiesce in the commencement of a proceeding or cause under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; (iii) otherwise become bankrupt or insolvent (however evidenced); (iv) be unable to pay its debts as they fall due; or (v) default in its payment or performance of any obligation to the other Party under this Agreement and fail to give adequate security, or assurance of, its ability to perform its further obligation under this Agreement within forty-eight (48) hours of a reasonable request by the other Party, then the other party shall have the right, without prior notice, to withhold payment or suspend deliveries or terminate this Agreement, in addition to any and all other remedies available hereunder or pursuant to the law. If the terms and conditions shown above accurately reflect your understanding of our agreement, please indicate by signing and returning a facsimile copy of this Agreement to IEP at (801) 568-2103. Sincerely, Illinova Energy Partners Southern California Water Company /s/ MARK V. ALLEN /s/ JOEL DICKSON - ---------------------------------- --------------------------------------- Mark V. Allen Mr. Joel Dickson Director, Regional Marketing Vice President of Customer & Operations Support 15 [ILLINOVA LETTERHEAD] VIA FACSIMILE APRIL 7, 1999 IEP REF# S-BEAR VALLEY - SCWC-DAILY PURCHASING AGREEMENT Mr. Joel Dickson Vice President of Customer Service and Operations Support Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 This letter agreement outlines the terms and conditions of a transaction between the Southern California Water Company, its Bear Valley Electric Division and Illinova Energy Partners, Inc. (IEP). BUYER: Southern California Water Company (SCWC) SELLER: Illinova Energy Partners, Inc. PRODUCT: Daily Energy Purchasing: the total amount of energy required to satisfy SCWC load for Bear Valley Electric during the term of this agreement on a daily, to monthly forward, basis, less any forward purchase made under separate confirmation by SCWC with IEP. TERM: May 1, 1999 through April 30, 2002. HOURS: Monday through Sunday, Hour Ending (HE) 0100 through Hour Ending (HE) 2400, Pacific Prevailing Time (PPT), including NERC Holidays. AMOUNT: VARIES 1096 24 VARIES PRICE: The price for the Product supplied to SCWC will be on a total pass through basis to purchase from various power sources including the California Power Exchange. All fees, charges, including but not limited to ISO ancillary services, PX fees and losses shall be included in the price. PERFORMANCE: IEP will be paid monthly based on a Performance Benchmark Incentive Payment, for energy purchased under this agreement, on a daily basis as follows: 40% of the daily savings for taking the positive resultant between [the product total of {the Power Exchange Clearing Price "Day Ahead Zonal Price Constrained "LA 4" (as listed on the calpx.com website), plus the daily purchasing administrative charge for the California Power Exchange, plus the applicable ISO Wheeling Access Charges, plus Grid Management Charges, plus Spin and Non-Spin Charges} multiplied by hourly load during the period in excess of any firm energy purchased from IEP under a separate agreement for the same period] minus IEP's Delivered Cost at the Victorville-Lugo Midpoint. Such calculations of performance shall identify all applicable line items when billed. 16 April 9, 1999 POINT OF DELIVERY: Delivered at California PX location take-out points, including Victorville-Lugo midpoint and Vista Substation. SCHEDULING: Unless otherwise instructed by SCWC, IEP will schedule energy based upon historical energy usage for the previous year's monthly load adjusted daily for current year representation of common weekend and week day loads. IEP's telephone numbers for real-time coverage of this agreement are (801) 568-2151 and 1-800-500-3260. CURTAILMENTS: Curtailments are only permitted for system emergencies due to UNCONTROLLABLE FORCES (unanticipated events that prevent a Party from performing it's obligations at the Delivery Point to deliver or receive energy, which is not within the reasonable control and which by the exercise of all commercial efforts such Party has been unable to overcome or obtain or cause to be obtained substitute performance therefore). Curtailments shall not be made for economic reasons. DAMAGES: If SELLER fails to deliver the Amount, where such failure was not excused by uncontrollable forces (as defined under Curtailments) or by Buyer, Seller shall be liable to Buyer for all such energy. The liability shall be calculated as the difference between 1) Buyer's reasonably incurred cost of replacing the comparable energy Seller failed to deliver (per megawatt-hour) and 2) the PRICE times the total Contract energy not delivered, to the extent that the calculation resulted in a positive number. If BUYER fails to accept delivery of the Amount, where such failure was not excused by uncontrollable forces (as defined under Curtailments) or by Seller, Buyer shall be liable to Seller for all such energy. The liability shall be calculated as the difference between 1) the PRICE and 2) the revenue (per megawatt-hour) that Seller receives in selling the capacity and energy Buyer failed to accept times the total Contract energy not accepted, to the extent that the calculation resulted in a positive number. Neither party shall be liable to the other for any consequential, incidental, punitive, or special damages for failure to take or receive energy in accordance with the conditions stated above. IEP CONTACTS: Primary Contact Secondary Contact Gaston Mejia Layne Brown Short Term Trader Director Power Operations Phone: (801) 568-2129 Phone: (801) 568-2150 GENERAL TERMS: This confirmation letter is provided pursuant to and in accordance with The Illinova-Southern California Water Company Enabling Agreement and constitutes part of and is subject to all of the terms and provisions of such Agreement. Terms used but not defined herein shall have the meanings ascribed to them in the Agreement. 17 April 9, 1999 BILLING: Billings and payment shall be in accordance with the terms specified in The Illinova-Southern California Water Company Enabling Agreement. Information for SCWC and IEP are provided below. Billings shall be mailed to: Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91733 Attention: Mr. Raymond P. Juels Payments shall be mailed to: Payments over $50,000 shall be wired to: Illinova Energy Partners, Inc. American National Bank 6955 Union Park Center, Suite 300 2000 South Naperville Road Midvale, UT 84047 Wheaton, IL 60187 Attn: Jennifer Hughey ABA#: 071000770 Account#: 1818-752 For Illinova Energy Partners ARTICLE II: DEFAULT AND FINANCIAL RESPONSIBILITY Should a party have a reasonable basis to believe that the creditworthiness or financial responsibility of the other Party has become unsatisfactory at any time during which this Agreement is in effect, satisfactory security may be required before further deliveries are made. In the event either Party shall (i) Make an assignment or any general arrangement for the benefit of creditors; (ii) file a petition or otherwise commence, authorize, or acquiesce in the commencement of a proceeding or cause under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; (ii) otherwise become bankrupt or insolvent (however evidenced); (iv) be unable to pay its debts as they fall due; or (v) default in its payment or performance of any obligation to the other Party under this agreement and fail to give adequate security for or assurance of its ability to perform its further obligation under this agreement within forty-eight (48) hours of a reasonable request by the other Party, then the other Party shall have the right, without prior notice, to withhold or suspend deliveries to Party, then the other Party shall have the right, without prior notice, to withhold or suspend deliveries or terminate this Agreement, in addition to any and all other remedies available the hereunder or pursuant to the law. If the term and conditions shown above accurately reflect your understanding of our agreement, please indicate by signing and returning a facsimile copy of this Agreement to IEP at (801) 568-2103. Sincerely, Illinova Energy Partners Southern California Water Company /s/ MARK V. ALLEN /s/ JOEL DICKSON - ---------------------------------- ---------------------------------- Mark V. Allen Mr. Joel Dickson Director, Regional Marketing Vice President of Customer & Operations Support 18 [ILLINOVA LETTERHEAD] Mr. Joel Dickson Vice President of Customer Service and Operations Support Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 RE: SCHEDULING COORDINATION & REAL-TIME SERVICES AGREEMENT -- METERING & COMMUNICATIONS Dear Mr. Dickson: This represents an amendment to the Scheduling Coordination & Real-Time Services (Agreement) between Illinova Energy Partners, Inc. (IEP) and the Southern California Water Company for its Division Bear Valley Electric Services (Customer) dated April 7, 1999. Pursuant to Section 8 Metering and Communications of the subject agreement, IEP is to provide Customer with the proposed costs for metering and communications prior to billing for such services. Accordingly, IEP has had a few visits to Bear Valley with one of its Meter Service Providers and designed a metering interrogation scheme that I believe is better than the prior configuration by our predecessor. In addition, this considers a permanent installation owned by Customer. The Exhibit A attached provides you with the detail of such installation, and the total cost for this service is a one-time charge of $7,200 (billable in the first month in which the equipment was installed. IEP's monthly charge for metering interrogation is hereby quoted as $35.00 per month. If the above pricing meets with your approval, please so indicate by signing this Agreement in the space provided below and return a faxed copy to my attention at (801) 568-2103. Sincerely, /s/ MARK V. ALLEN - ----------------------- Mark V. Allen Director, Regional Marketing California & Desert Southwest Accepted as of this 13th day of May, 1999, for Southern California Water Company /s/ JOEL A. DICKSON - ----------------------- Mr. Joel Dickson Vice President of Customer & Support Services 19 [ILLINOVA LETTERHEAD] EXHIBIT A BEAR VALLEY ELECTRIC SERVICE - METERING CONVERSION PROPOSAL DESCRIPTION QTY DATA STAR, TYPE D-102,32K, 4-CHANNEL, SOLID STATE PULSE RECORDER - WITH 2 TELEPHONE MODEM PULSE SPLITTING RELAY - MERCURY WETTED WITH 3 RELAYS INSTALLED - 1 IN, 4 2 OUT FUSE BLOCKS WITH DIRECT MOUNTING BASE AND TUBULAR SCREWS, SIMILAR OR 2 EQUAL TO BUCHANAN CAT. #342 - INCLUDES TYPE 'KTK' OR 'KLM' FUSES FASTENERS - CONNECTORS - TERMINALS - COUPLINGS 1 PROVIDE ALL LABOR NECESSARY TO INSTALL A COMPLETED METERING INSTALLATION 32 VEHICLE MILES TO AND FROM PROJECT 400 TECHNICIANS TRAVEL TIME FROM THEIR BASE TO THE JOB SITE AND RETURN 8 COSTS INCURRED FOR PERFORMING A SITE INSPECTION TO DETERMINE COMPONENTS 4 NECESSARY TO COMPLETE PROJECT PROJECT ENGINEERING AND COMPONENT ACQUISITION 3 TOTAL $7,200.00 20 [DIAGRAM OF SUB-METERING SPECIFICATION FOR "GOLDHILL" SUBSTATION] 21 [DIAGRAM OF SUB-METERING SPECIFICATION FOR "HARNISH" SUBSTATION] 22 [ILLINOVA LETTERHEAD] Mr. Joel Dickson Vice President of Customer Service and Operations Support Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 RE: SCHEDULING COORDINATION & REAL-TIME SERVICES AGREEMENT Dear Mr. Dickson: This agreement for Scheduling Coordination & Real-Time Services (Agreement) sets forth the rates, terms, and conditions under which Illinova Energy Partners, Inc. (Illinova) agrees to provide twenty four (24) hour real-time services and Schedule Coordination to Southern California Water Company for its Division Bear Valley Electric Services (Customer). Illinova and Customer are hereinafter collectively referred to as "Parties" or individually as "Party", and hereby agree as follows: 1. TERM AND EFFECTIVE DATE This Agreement shall become effective on Hour Ending 0100 (Pacific Prevailing Time) May 1, 1999, and shall remain in force and effect until April 30, 2002. 2. SERVICES TO BE PROVIDED BY ILLINOVA Illinova will provide the following hourly services for Customer: Illinova shall act as Scheduling Coordinator, in accordance with the requirements of the California Independent System Operator ("ISO") tariff, for Customer's loads at associated take-out points. Develop Customer's pre-schedules based on load forecasts or load profiles provided by Customer, or Illinova under a separate Daily Purchasing Agreement dated April 7, 1999, or any applicable Utility Distribution Company ("UDC"). Coordinate pre-schedules with any applicable UDC, Independent System Operator ("ISO"), Power Exchange ("PX") and/or other suppliers. Maintain Customer's schedules every hour. Each transaction will describe the delivery of power from a supplying party's control area (the generator), through all intermediate Purchase Sale Entities, to a receiving party's control area (load). A full path must be included detailing all entities that take title to the energy and all transmission paths. 23 CONFIDENTIAL Monitor schedules in effect during the term of the Agreement twenty-four (24) hours per day. Confirm scheduled transactions as required. It is anticipated that schedules will be confirmed on a pre-scheduled basis within twenty-four (24) hours prior to the transaction. Illinova shall confirm schedule start and stop times with each entity Customer is purchasing from and delivering to. If conditions require a modification to a pre-scheduled transaction, Illinova will, as directed, make sales and purchase decisions for Customer on a best effort basis to minimize losses, scheduling inconsistencies, and imbalances. In the event that such a service is requested Illinova will not be held liable for any losses that may be incurred due to its marketing transactions. Provide Customer an hourly accounting of each day's transactions, including any changes to pre-scheduled transactions. Use reasonable efforts to resolve any discrepancies with other parties. 3. SERVICES PROVIDED BY CUSTOMER. Customer shall furnish Illinova, in a timely manner, with all information necessary for Illinova to carry out its responsibilities as Scheduling Coordinator in accordance with the ISO tariff, and shall carry out all directives from Illinova in performance of its role as Scheduling Coordinator in accordance with the ISO tariff. If required by Illinova, Customer shall acquire and maintain, throughout the term of this agreement, a form and amount of credit protection acceptable to Illinova, not to exceed $3,000,000, for the performance of this Agreement. This will include any additional charges by Illinova to maintain credit for Customer schedules with the ISO. By 3:00 PM (Pacific Time) on every normal work day observed by both parties, Customer, or Illinova as Customer representative under separate Daily Energy Purchasing Agreement dated April 7, 1999, shall provide Illinova with an hourly listing of all changes to standard pre-scheduled transactions for the following day or days. Provide Illinova with a twenty-four (24) hour emergency contact and pager number. Page 2 24 SCWC/Illinova Scheduling Coordination Contract CONFIDENTIAL 4. CHARGES The charge for the services described above will be billed according to the following: 4.1 Illinova Charges 1. Initial setup charge (one time): $7,000.00 Due and payable upon execution of this Agreement 2. Monthly Base Fee: $2,500.00 3. Customer shall pay a Monthly Variable Fee equal to. Monthly Variable Fee: $0.35/MWH 4. Monthly Administration and Billing Charge: $500.00 5. Illinova Re-marketing fee: $0.15/MWH 4.2 Imbalance Fees, Penalties, and Re-marketing If Customer's actual energy usage exceeds the forecasted amount, Customer shall receive the ex-post price for this excess energy, and if such situation is expected to exist for any length of time, and Illinova can re-market this excess energy to other Scheduling Coordinators or counter-parties, Illinova will inform Customer of such an opportunity, and upon Customer concurrence, Illinova will re-market said excess. Customer will pay Illinova, the Energy Re-Marketing Fee listed above, for energy re-marketed. Customer shall also be responsible for any additional penalties or imbalance charges imposed by the ISO for imbalances due to Customer's energy usage deviating from the actual monthly energy amount defined by the forecast. 4.3 Pass-Through Costs Unless specified under a separate power transaction between Customer and IEP, Customer shall be responsible for, and shall pay Illinova or any other provider of the service as applicable, for all charges imposed by the ISO, Automated Power Exchange (APX) and the California Power Exchange ("PX") in connection with the service provided under this Agreement, including but not limited to, charges for transmission (including Grid Management Charges, Grid Operations Charges, Ancillary Services Charges, Imbalance Energy Charges, Usage Charges, Wheeling Access Charges, Voltage Support and Black Start Charges, and Reliability Must-Run Charges, Losses, or Taxes imposed by the ISO), distribution, ancillary services (including costs for ancillary services purchased by Illinova from third parties for purpose of this Agreement), access charges, PX administration charges, whether such charges are billed directly to Customer or are billed to Illinova; provided, that Illinova shall be responsible for payment to the ISO of any imbalance charges as imposed by the ISO as a result of Illinova's failure to deliver energy to the ISO provided to Illinova by Customer. Any such imbalance charge for which Illinova is responsible shall be based on the difference between (i) the total energy scheduled by Page 3 25 SCWC/Illinova Scheduling Coordination Contract CONFIDENTIAL Illinova to, and received by, the ISO and (ii) Illinova's total customer load within the Zone or Take-Out Points, as defined in the ISO tariff, where such imbalances occur. Where charges are billed to Illinova by the ISO, or PX in respect of service provided to Customer under this Agreement and to other scheduling clients, Illinova shall make appropriate allocations of such billed amounts to all scheduling clients inclusive of Customer. 4.4 Losses Illinova shall bill Customer for energy losses provided in accordance with delivery of Customer energy under this Agreement based on the hourly registrations of energy on the meters installed at the Customer Direct Access Account interconnection points, increased by the corresponding percentage points to account for losses between the interconnection point or points at which Illinova delivers or schedules Customer supplied energy deliveries to the ISO Controlled Grid and the Customer interconnection points. If the amount of energy scheduled or delivered by Illinova to the interconnection point or points on the ISO Controlled Grid does not equal the amount of energy registered on the meters at the Customer interconnection points plus the appropriate loss factor in an hour, the variance shall be reconciled and billed in accordance with Section 7 of this Agreement. 7. PAYMENT Illinova will submit its invoices to Customer on a monthly basis. All billings to Customer will be sent to: Mr. Raymond P. Juels Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 or to such address as Customer may specify by written notice given as provided herein. IEP and SCWC will develop an acceptable invoicing format and include quarterly fuel mix for supply, as can be determined with suppliers. Invoices should include line items to clearly identify charges herein. Invoices submitted by Illinova to Customer shall be due and payable 20 days after the date of the invoice. Customer agrees to pay interest at the rate of 1.5% per month, or the maximum rate as permitted by law, on any invoiced amounts which are not paid on or before the due date, until the date of payment. Payments to Illinova shall be Payments over $50,00 shall be mailed to: wired to: Illinova Energy Partners, Inc. American National Bank 6955 Union Park Center, Suite 300 2000 South Naperville Road Midvale, UT 84047 Wheaton, IL 60187 Attn: Jennifer Hughey ABA #: 071000770 Account #: 1818-0752 For Illinova Energy Partners account Page 4 26 SCWC/Illinova Scheduling Coordination Contract CONFIDENTIAL Illinova hereby represents that its bills will be based upon some estimated amounts. For example, ISO charges will be billed to Scheduling Coordinators, such as Illinova, on a quarterly basis. Accordingly, Illinova shall bill, or credit, for any adjustments to past billings for estimated amounts being reconciled with actual amounts. All correspondence with regard to payment shall be made to the same address. 8. METERING & COMMUNICATION Customer shall be responsible for the cost of establishing and maintaining communication equipment necessary to conduct the scheduling coordination services for energy management pursuant to this agreement. Such costs shall include meters, monthly communication & maintenance costs and other necessary equipment. Such costs shall be discussed and agreed to before they are actually incurred. 9. AUDIT Either Party, at its own expense, shall have the right, at all reasonable times, to review and audit the books, records, documents of the other Party, directly pertaining to the billing and power delivery data required to administer this Agreement. The foregoing shall not be construed to permit either Party to conduct a general audit of the other Party's records. Information obtained by either Party's representatives in examining the other Party's applicable records to verify such billings and power delivery data shall not be disclosed to third parties without prior written consent of the audited Party, or unless in response to compulsory judicial or regulatory processes and after giving the other Party as much advance written notice as possible, with such time not to be less than (15) days. The right to audit shall extend for a period of one (1) year following the date of each payment. It will be incumbent upon the Parties to retain all necessary records and documentation during this audit period. 10. FORCE MAJEURE Neither Party shall be liable for any delay or failure in performance of any part of this Agreement (other than obligations to pay money) from any cause beyond its reasonable control, including but not limited to flood, fire, lightning, epidemic, quarantine restriction, war, sabotage, act of a public enemy whether foreign or domestic, earthquake, insurrection, riot, civil disturbance, strike, work stoppage caused by jurisdictional or similar disputes, restraint by court order or public authority, action or non-action by or inability to obtain necessary authorization or approval from any governmental authority, or failure or inability of the ISO or the UDC to accept energy from Illinova or to deliver energy to Customer in amounts received from Illinova, or any combination of these causes, whether affecting the Party or the Party's suppliers, which by the exercise of due diligence and foresight such Party could not reasonably have been expected to avoid and which by the exercise of due diligence the Party has been unable to overcome. The Party claiming a force majeure condition shall give the other Party such notice of the condition as is reasonable under the circumstances. Upon notice of the force majeure condition being provided, the obligations of the Party invoking the force majeure, to the extent they are affected by the force majeure condition, shall be suspended during the continuation of such condition and Page 5 27 SCWC/Illinova Scheduling Coordination Contract CONFIDENTIAL shall, so far as is possible, be remedied with all reasonable dispatch. 11. INDEMNIFICATION 11.1 To the fullest extent permitted by law, and subject to the limitations set forth in Section 21, "Limitation of Liability to Amount of Direct Damages", of this Agreement, each Party (the "Indemnifying Party") shall indemnify and hold harmless the other Party, its parent company or companies and affiliates, and their shareholders, officers, directors, employees, agents, servants, and assigns (collectively, the "Indemnified Party"), and at the Indemnified Party's option, the Indemnifying Party shall defend the Indemnified Party from and against any and all claims and liabilities for losses, expenses, damage to property, injury to or death of any person, including, but not limited to, the Indemnified Party's employees and its parent company's and affiliates' employees, subcontractors and subcontractors' employees, or any other liability incurred by the Indemnified Party, which shall include reasonable attorney fees, caused wholly or in part by any negligent, grossly negligent or willful act or omission by the Indemnifying Party, its officers, directors, employees, agents or assigns arising out of this Agreement, except to the extent such claim, liability, loss, expense, damage to property, injury or death is caused by any negligent, grossly negligent or willful act or omission of the Indemnified Party. 11.2 If any claim covered by Section 11.1 is brought against the Indemnified Party, then the Indemnifying Party shall be entitled to participate in, and unless in the opinion of counsel for the Indemnified Party a conflict of interest between the Parties may exist with respect to such claim, assume the defense of such claim, with counsel reasonably acceptable to the Indemnified Party. Even if the Indemnifying Party assumes the defense of the Indemnified Party pursuant to this subsection b, the Indemnified Party, at its sole option, may participate in the defense, at its own expense, with counsel of its own choice without relieving the Indemnifying Party of any of its obligations hereunder. 11.3 The Indemnifying Party's obligation to indemnify under this Section 10 shall survive termination of this Agreement, and shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for the Indemnifying Party under any statutory scheme, including, without limitation, under any worker's compensation acts, disability benefit acts or other employee benefit acts. 12. GOVERNING LAW This Agreement shall be governed by, and interpreted and construed in accordance with, the laws of the State of California, and shall exclude any choice of law rules that direct the application of the laws of another jurisdiction, irrespective of the place or places of execution or of the order in which signatures of the parties are affixed or of the place or places of performance; provided, that any provision of this Agreement that is subject to the jurisdiction of the Federal Energy Regulatory Commission ("FERC") shall be governed by, and interpreted and construed in Page 6 28 SCWC/Illinova Scheduling Coordination Contract CONFIDENTIAL accordance with, the regulations of the FERC and such other laws of the United States as are applicable to that provision. 13. AMENDMENT This Agreement may be modified only upon mutual written agreement of the Parties. 14. WAIVER Any waiver at any time by either Party with respect to any of its rights under this Agreement or the failure of a Party to insist on the performance by the other Party of an obligation under this Agreement shall not be deemed an amendment or modification of this Agreement and shall not be deemed a waiver of such right, or acquiescence to non-performance of such obligation, during the remainder of the term of this Agreement. 15. PROPRIETARY INFORMATION Illinova considers pricing information contained in this Agreement to be proprietary and confidential. Disclosure of any pricing information contained in this Agreement shall require the prior written consent of Illinova. Customer considers all information provided to Illinova under Section 3 of this Agreement and all information that Illinova obtains in carrying out the services described in Section 2 of this Agreement to be proprietary and confidential. Disclosure or use of any of the aforementioned information contained in this Agreement other than to carry out the services outlined in Section 2 of this Agreement shall require the prior written consent of Customer. 16. ASSIGNMENT AND DELEGATION 16.1 Neither Party shall assign any of its rights or obligations under this Agreement except with the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. No assignment of any right or obligation under this Agreement shall relieve the assigning Party of any of its obligations under this Agreement until such obligations have been assumed in writing by the assignee. When duly assigned in accordance with the preceding two sentences, any obligation so assigned shall be binding upon the assignees, and the assignor shall be relieved of its rights and obligations that have been duly assigned. Any assignment in violation of this Section 16.1 shall be void. 16.2 Notwithstanding the provisions of subsection 16.1, either Party may delegate any of its duties under this Agreement to an agent or subcontractor, provided that the delegating Party shall remain fully responsible for performance of any delegated duties, shall serve as the point of contact between the delegatee and the other Party, and shall provide the other Party with 30 days prior written notice of any such delegation, which notice shall contain such information about the delegatee as the other Party shall reasonably require. Page 7 29 SCWC/Illinova Scheduling Coordination Contract CONFIDENTIAL 17. AUTHORITY TO EXECUTE AGREEMENT Each Party acknowledges that it has read this Agreement and that the Party fully understands its rights and obligations under this Agreement. Each Party further acknowledges that it has had an opportunity to consult with an attorney of its own choosing to explain the terms of this Agreement and the consequences of signing it. Each Party represents and warrants (i) that it has the full power and authority to execute and deliver this Agreement and to perform its terms, (ii) that execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate or other action by such Party, and do not conflict with the Party's articles of incorporation or by-laws, or cause a default under any contract or other agreement to which such Party is subject, and (iii) that this Agreement constitutes such Party's legal, valid and binding obligation and is enforceable against such Party in accordance with its terms. Each person executing this Agreement for a Party represents and warrants that he or she has the authority to bind the Party on whose behalf he or she is executing this Agreement. 18. CONSTRUCTION SHALL NOT BE FOR OR AGAINST DRAFTER No provision of this Agreement shall be construed or interpreted for or against any Party because that Party drafted or caused its legal representative to draft the provision. 19. DISPUTE RESOLUTION PROCEDURES Any dispute between the Parties concerning the provisions, interpretation or implementation of this Agreement which remains unresolved for a period of six months shall, upon written notice given by one Party to the other Party, be forwarded to Customer's Chief Financial Officer and to Illinova's Vice President of the Western Region ("Executive" or "Executives"), who shall meet within 30 days following the date of the notice, or at such other time as agreed upon by the Executives, to discuss and attempt to resolve the dispute. Any resolution agreed upon by the Executives shall be binding upon the Parties. A resolution reached by the Executives shall not be effective until set forth in a writing signed by both Executives. If the Executives cannot resolve the dispute within 30 days following their initial meeting either Party may pursue any remedy available to the Party at law, in equity or under this Agreement to resolve the dispute. If the title of either Executive position referred to in this Section 19 is eliminated or changed, or if this Agreement is assigned pursuant to Section 16, the Party subject to the change, or the assignee of such Party, shall substitute a comparable executive for the purpose of this Section 19 and shall promptly notify the other Party in writing. Each Party shall bear its own attorney fees and other costs incurred in connection with any dispute, except as otherwise (i) agreed by the Parties in the resolution of the dispute, (ii) ordered Page 8 30 SCWC/Illinova Scheduling Coordination Contract CONFIDENTIAL by a court or administrative agency of competent jurisdiction, or (iii) determined by the arbitrator or other neutral in any alternative dispute resolution process used by the Parties, in accordance with the rules and procedures adopted and agreed to by the Parties for purposes of that process. 20. ENTIRE AGREEMENT This Agreement, including all attachments hereto and agreements contemplated herein, constitutes the entire agreement and understanding between the Parties as to the subject matter of this Agreement, and merges and supersedes all prior oral or written agreements, understandings, commitments, representations and discussions between the Parties. The Agreement may be amended, modified or supplemented only in accordance with Section 13 or Section 16 of this Agreement. 21. LIMITATION OF LIABILITY TO AMOUNT OF DIRECT DAMAGES Each Party's liability to the other Party for any loss, cost, claim, injury, liability or expense, including any reasonable attorney fees to which the other Party is entitled, relating to or arising from an act or omission in the Party's performance of this Agreement, shall be limited to the amount of direct damage actually incurred. In no event shall either Party be liable to the other Party for any indirect, special, consequential or punitive damages of any kind whatsoever, whether in contract, tort or strict liability. 22. LIMITATION ON TIME TO MAKE CLAIMS With the exception of claims for indemnity under Section 11, "Indemnification", of this Agreement, no claims may be made under this Agreement, or submitted to dispute resolution pursuant to Section 19, "Dispute Resolution Procedures", of this Agreement, more than three years after the date the claim accrued. The Parties agree that failure to make any claim falling within the scope of this Section 22 within three years shall bar any cause of action. Provided, however, that claims for indemnity under Section 11, "Indemnification", of this Agreement shall not be limited by the three year limitation of this Section, but shall be governed by the applicable statute of limitations. 23. NOTICES AND DEMANDS Unless another means of notice is expressly provided for in another Section of this Agreement, all notices and demands given or made by a Party under this Agreement shall be sent by the sending Party by facsimile with a copy sent, by United States Mail, to the designated recipient of the receiving Party at the addresses set forth below. to SCWC: Southern California Water Company 630 E. Foothill Blvd. San Dimas, CA 91773 31 SCWC/Illinova Scheduling Coordination Contract CONFIDENTIAL Attention: Mr. Raymond P. Juels If to Illinova: Illinova Power Marketing, Inc. Attention: Jennifer Hughey, Controller Union Park Center, Suite 300 Midvale, Utah 84047 Fax No.: (801) 568-2104 A Party may, by notice to the other Party provided in accordance with this Section, change the name of designated recipient, address, and facsimile number to which notices and demands shall thereafter be sent. Any notice provided pursuant to this Section shall be effective upon confirmation of receipt of the sending party's facsimile, if between the hours of 8:00 A.M. and 4:00 P.M. Pacific Time, and at 8:00 A.M. Pacific Time on the next business day if at any other time. 24. REMEDIES CUMULATIVE Except as expressly provided otherwise in this Agreement, all remedies in this Agreement, including the right of termination, are cumulative, and use of any remedy shall not preclude any other remedy in this Agreement. 25. SECTION HEADINGS The headings placed at the start of each Section of this Agreement are solely for the convenience of reference of the Parties, are not and shall not be deemed to be a part of this Agreement, shall in no way define, modify, or restrict any of the terms or provisions of this Agreement, and shall not be used in any manner in the interpretation or construction of this Agreement. 26. TAXES Unless expressly provided otherwise in the Section or Sections of this Agreement establishing charges, the charge or charges specified in this Agreement for services and products provided hereunder do not include any amounts in respect of any State or local taxes that are assessed, imposed or owing as a function of the revenues, billings, purchase price, deliveries or usage under this Agreement. Illinova shall add the amount of any such taxes that are applicable to services or products for which Illinova is rendering an invoice to Customer to the amount of the billing stated on such invoice, with such amount to be calculated at the applicable rate or rates of tax. Customer shall be responsible for payment of any such taxes, and for the filing of returns, with respect to any tax not added to Customer's invoice by Illinova. Customer shall also be responsible to pay any penalties, interest or other charges resulting from Customer's failure to timely pay any such tax, or resulting from Illinova's failure to timely pay any such tax due to Customer's failure to timely provide Illinova with information necessary to determine or compute such tax or file a return. Page 10 32 SCWC/Illinova Scheduling Coordination Contract CONFIDENTIAL 27. THIRD-PARTY BENEFICIARIES The provisions of this Agreement are for the benefit of the Parties and not for any other person or third party beneficiary. The provisions of this Agreement shall not impart rights enforceable by any person, firm or organization other than a Party, or a successor or assignee of a Party, to this Agreement. 28. SEVERABILITY Should any provision of this Agreement for any reason be declared invalid or unenforceable by final and applicable order of any court or regulatory body having jurisdiction, such decision shall not affect the validity of the remaining portions, and the remaining portions shall remain in force and effect as if this Agreement had been executed without the invalid portion. This Agreement is subject to review by the California Public Utilities Commission "CPUC". The Agreement may be terminated if disapproved by the CPUC: however, SCWC shall be liable for any economic damages to IEP with respect to any power transactions made or service cost incurred under this Agreement with IEP. 29. TIME OF ESSENCE The Parties agree that time is of the essence for all portions of this Agreement. If the above accurately reflects your understanding of the agreement reached by representatives of Illinova and Customer, please so indicate by signing both originals of this Agreement in the space provided below and return one fully executed original to me. Sincerely, /s/ MARK V. ALLEN - ----------------------- Mark V. Allen Director, Regional Marketing California & Desert Southwest Accepted as of this 16th day of April, 1999, for Southern California Water Company /s/ JOEL DICKSON - ----------------------- Mr. Joel Dickson Vice President of Customer & Support Services Page 11