Common use of and Appendix B Clause in Contracts

and Appendix B. Adverse Tax Action Determination A determination by a Tax Exempt Participating TO, as supported by (i) an opinion of its (or its joint action agency's) nationally recognized bond counsel, or (ii) the IRS (e.g., through a private letter ruling received by a Tax Exempt Participating TO or its joint action agency), that an Impending Adverse Tax Action or an Actual Adverse Tax Action has occurred. AGC (Automatic Generation Control) Generation equipment that automatically responds to signals from the ISO's EMS control in real time to control the power output of electric generators within a prescribed area in response to a change in system frequency, tieline loading, or the relation of these to each other, so as to maintain the target system frequency and/or the established interchange with other areas within the predetermined limits. Ancillary Services Regulation, Spinning Reserve, Non-Spinning Reserve, Replacement Reserve, Voltage Support and Black Start together with such other interconnected operation services as the ISO may develop in cooperation with Market Participants to support the transmission of Energy from Generation resources to Loads while maintaining reliable operation of the ISO Controlled Grid in accordance with Good Utility Practice. Applicable Reliability Criteria The reliability standards established by NERC, WSCC, and Local Reliability Criteria as amended from time to time, including any requirements of the NRC. Applicants Pacific Gas and Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company and any others as applicable. Approved Maintenance Outage A Maintenance Outage which has been approved by the ISO through the ISO Outage Coordination Office. Available Transfer Capacity For a given transmission path, the capacity rating in MW of the path established consistent with ISO and WSCC transmission capacity rating guidelines, less any reserved uses applicable to the path. Black Start The procedure by which a Generating Unit self-starts without an external source of electricity thereby restoring power to the ISO Controlled Grid following system or local area blackouts. Business Day Monday through Friday, excluding federal holidays and the day after Thanksgiving Day. Congestion A condition that occurs when there is insufficient Available Transfer Capacity to implement all Preferred Schedules simultaneously. "Congested" shall be construed accordingly. Congestion Management The alleviation of Congestion in accordance with applicable ISO Protocols and Good Utility Practice. Control Area An electric power system (or combination of electric power systems) to which a common AGC scheme is applied in order to: i) match, at all times, the power output of the Generating Units within the electric power system(s), plus the Energy purchased from entities outside the electric power system(s), minus Energy sold to entities outside the electric power system, with the Demand within the electric power system(s); ii) maintain scheduled interchange with other Control Areas, within the limits of Good Utility Practice; iii) maintain the frequency of the electric power system(s) within reasonable limits in accordance with Good Utility Practice; and iv) provide sufficient generating capacity to maintain operating reserves in accordance with Good Utility Practice. CPUC The California Public Utilities Commission, or its successor. Critical Protective System Facilities and sites with protective relay systems and Remedial Action Schemes that the ISO determines may have a direct impact on the ability of the ISO to maintain system security and over which the ISO exercises Operational Control. Day-Ahead Market The forward market for Energy and Ancillary Services to be supplied during the Settlement Periods of a particular Trading Day that is conducted by the ISO, the PX and other Scheduling Coordinators and which closes with the ISO's acceptance of the Final Day-Ahead Schedule. Demand The rate at which Energy is delivered to Loads and Scheduling Points by Generation, transmission or distribution facilities. It is the product of voltage and the in-phase component of alternating current measured in units of ▇▇▇▇▇ or standard multiples thereof, e.g., 1,000W=1kW, 1,000kW=1MW, etc. Eligible Customer (i) any utility (including Participating TOs, Market Participants and any power marketer), Federal power marketing agency, or any person generating Energy for sale or resale; Energy sold or produced by such entity may be Energy produced in the United States, Canada or Mexico; however, such entity is not eligible for transmission service that would be prohibited by Section 212(h)(2) of the Federal Power Act; and (ii) any retail customer taking unbundled transmission service pursuant to a state retail access program or pursuant to a voluntary offer of unbundled retail transmission service by the Participating TO. EMS (Energy Management System) A computer control system used by electric utility dispatchers to monitor the real time performance of the various elements of an electric system and to control Generation and transmission facilities. Encumbrance A legal restriction or covenant binding on a Participating TO that affects the operation of any transmission lines or associated facilities and which the ISO needs to take into account in exercising Operational Control over such transmission lines or associated facilities if the Participating TO is not to risk incurring significant liability. Encumbrances shall include Existing Contracts and may include: (1) other legal restrictions or covenants meeting the definition of Encumbrance and arising under other arrangements entered into before the ISO Operations Date, if any; and (2) legal restrictions or covenants meeting the definition of Encumbrance and arising under a contract or other arrangement entered into after the ISO Operations Date. End-Use Customer or End-User A purchaser of electric power who purchases such power to satisfy a Load directly connected to the ISO Controlled Grid or to a Distribution System and who does not resell the power. Energy The electrical energy produced, flowing or supplied by generation, transmission or distribution facilities, being the integral with respect to time of the instantaneous power, measured in units of watt-hours or standard multiples thereof, e.g., 1,000 Wh=1kWh, 1,000 kWh=1MWh, etc. Entitlements The right of a Participating TO obtained through contract or other means to use another entity's transmission facilities for the transmission of Energy. Existing Contracts The contracts which grant transmission service rights in existence on the ISO Operations Date (including any contracts entered into pursuant to such contracts) as may be amended in accordance with their terms or by agreement between the parties thereto from time to time. Existing Rights Those transmission service rights defined in Section 2.4.4.1.1 of the ISO Tariff. Facilities Study Agreement An agreement between a Participating TO and either a Market Participant, Project Sponsor, or identified principal beneficiaries pursuant to which the Market Participants, Project Sponsor, and identified principal beneficiaries agree to reimburse the Participating TO for the cost of a Facility Study. Facility Study An engineering study conducted by a Participating TO to determine required modifications to the Participating TO's transmission system, including the cost and scheduled completion date for such modifications that will be required to provide needed services. FERC The Federal Energy Regulatory Commission or its successor. FIITC (Firm Import Interconnection Transmission Capacity) The amount of firm transmission capacity in MW associated with transmission facilities owned by a Participating TO or contracted to the Participating TO under an Existing Contract, which allows Generating Units that are not directly interconnected with that Participating TO's transmission or distribution system to deliver Energy to that Participating TO. For each month of the Self-Sufficiency Test Period, FIITC shall include the maximum amount of requirements and bundled power sale capacity purchased by the Participating TO from the transmission owner to which it is physically interconnected during the hour in which the Monthly Peak Load of the Participating TO occurs. Forced Outage An Outage for which sufficient notice cannot be given to allow the Outage to be factored into the Day-Ahead Market or Hour-Ahead Market scheduling processes. FPA Parts II and III of the Federal Power Act, 16 U.S.C. § 824 et seq., as they may be amended from time to time. Generating Unit An individual electric generator and its associated plant and apparatus whose electrical output is capable of being separately identified and metered or a Physical Scheduling Plant that, in either case, is: (a) located within the ISO Control Area; (b) connected to the ISO Controlled Grid, either directly or via interconnected transmission, or distribution facilities; and (c) that is capable of producing and delivering net Energy (Energy in excess of a generating station's internal power requirements). Generation Energy delivered from a Generating Unit. Generator The seller of Energy or Ancillary Services produced by a Generating Unit. 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. Hour-Ahead Market The forward market for Energy and Ancillary Services to be supplied during a particular Settlement Period that is conducted by the ISO, the PX and other Scheduling Coordinators which opens after the ISO's acceptance of the Final Day-Ahead Schedule for the Trading Day in which the Settlement Period falls and closes with the ISO's acceptance of the Final Hour-Ahead Schedule. Hydro Spill Generation Hydro-electric Generation in existence prior to the ISO Operations Date that: i) has no storage capacity and that, if backed down, would spill; ii) has exceeded its storage capacity and is spilling even though the generators are at full output, or iii) has inadequate storage capacity to prevent loss of hydro-electric Energy either immediately or during the forecast period, if hydro-electric Generation is reduced; iv) has increased regulated water output to avoid an impending spill. Impending Adverse Tax Action A proposed plan, tariff, operating protocol, action, order, regulation or law that, if issued, adopted, implemented, approved, made effective, taken or enacted by the ISO, the FERC, the IRS or the United States Congress, as applicable, likely would adversely affect the tax-exempt status of any Tax Exempt Debt issued by, or for the benefit of, a Tax Exempt Participating TO if the affected facilities were to remain under the Operational Control of the ISO; provided, however, that with respect to a proposed federal law, such proposed law must first have been approved by (i) one of the houses of the United States Congress and (ii) at least one committee or subcommittee of the other house of the United States Congress; provided further, however, no Impending Adverse Tax Action shall result with respect to a Tax Exempt Participating TO that initiates such a plan, tariff provision, operating protocol, action, order, regulation or law; provided further, however, that the immediately preceding proviso shall not include private letter ruling requests or related actions; provided further, that no Impending Adverse Tax Action shall result in connection with Local Furnishing Bonds if the adverse effect on the tax-exempt status of the Local Furnishing Bonds reasonably could be avoided by application of the procedures set forth in Section 4.1.2 or in Section 2.3.2 and Appendix B. Interconnection Transmission facilities, other than additions or replacements to existing facilities that: i) connect one system to another system where the facilities emerge from one and only one substation of the two systems and are functionally separate from the ISO Controlled Grid facilities such that the facilities are, or can be, operated and planned as a single facility; or ii) are identified as radial transmission lines pursuant to contract; or iii) produce Generation at a single point on the ISO Controlled Grid; provided that such interconnection does not include facilities that, if not owned by the Participating TO, would result in a reduction in the ISO's Operational Control of the Participating TO's portion of the ISO Controlled Grid. Interconnection Agreement A contract between a party requesting interconnection and the Participating TO that owns the transmission facility with which the requesting party wishes to interconnect. IRS The United States Department of Treasury, Internal Revenue Service, or any successor thereto. ISO (Independent System Operator) The California Independent System Operator Corporation, a state chartered, nonprofit corporation that controls the transmission facilities of all Participating TOs and dispatches certain Generating Units and Loads. ISO ADR Procedures The procedures for resolution of disputes or differences set out in Section 13 of the ISO Tariff, as amended from time to time. ISO Code of Conduct For employees, the code of conduct for officers, employees and substantially full-time consultants and contractors of the ISO as set out in Exhibit A to the ISO bylaws; for Governors, the code of conduct for governors of the ISO as set out in Exhibit B to the ISO bylaws. ISO Control Center The Control Center established, pursuant to Section 2.3.1.1 of the ISO Tariff. ISO Controlled Grid The system of transmission lines and associated facilities of the Participating TOs that have been placed under the ISO's Operational Control. ISO Governing Board The Board of Governors established to govern the affairs of the ISO. ISO Grid Operations Committee A committee appointed by the ISO Governing Board pursuant to Article IV, Section 4 of the ISO bylaws to advise on additions and revisions to its rules and protocols, tariffs, reliability and operating standards and other technical matters. ISO Operations Date The date on which the ISO first assumes Operational Control of the ISO Controlled Grid. ISO Outage Coordination Office The office established by the ISO to coordinate Maintenance Outages in accordance with Section 2.3.3 of the ISO Tariff. ISO Protocols The rules, protocols, procedures and standards promulgated by the ISO (as amended from time to time) to be complied with by the ISO Scheduling Coordinators, Participating TOs and all other Market Participants in relation to the operation of the ISO Controlled Grid and the participation in the markets for Energy and Ancillary Services in accordance with the ISO Tariff. ISO Register The register of all the transmission lines, associated facilities and other necessary components that are at the relevant time being subject to the ISO's Operational Control. ISO Tariff The California Independent System Operator Agreement and Tariff, dated March 31, 1997, as it may be modified from time to time. Load An end-use device of an End-Use Customer that consumes power. Load should not be confused with Demand, which is the measure of power that a Load receives or requires. Local Furnishing Bond Tax-exempt bonds utilized to finance facilities for the local furnishing of electric energy, as described in section 142(f) of the Internal Revenue Code, 26 U.S.C. § 142(f). Local Furnishing Participating TO Any Tax-Exempt Participating TO that owns facilities financed by Local Furnishing Bonds. Local Regulatory Authority The state or local governmental authority responsible for the regulation or oversight of a utility. Local Reliability Criteria Reliability criteria established at the ISO Operations Date, unique to