Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. AMENDED AND RESTATED LIGNITE SUPPLY AGREEMENT By and Between NRG Texas Power LLC and Texas Westmoreland Coal Co. Dated as of...

Exhibit 10.1

Execution Version

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

AMENDED AND RESTATED

LIGNITE SUPPLY AGREEMENT

By and Between

NRG Texas Power LLC

and

Texas Xxxxxxxxxxxx Coal Co.

Dated as of

September 28, 2007

TABLE OF CONTENTS

		Page
1. DEFINITIONS; CONSTRUCTION			2
1.1 Definitions			2
1.2 Construction			12
2. SALE AND PURCHASE; STANDARD OF PERFORMANCE			12
2.1 Lignite Supply			12
2.2 Standard of Performance			13
3. LSA TERM; LIGNITE SUPPLY TERM; SUPPLY SUSPENSION			14
3.1 LSA Term			14
3.2 Lignite Supply Term			14
3.3 Supply Suspension			15
4. GOVERNANCE; REPRESENTATIVES; RELATIONSHIP OF PARTIES			15
4.1 Nature of Governance			15
4.2 Representatives			16
4.3 Relationship of the Parties			16
4.4 NRG Governance Role			16
5. ANNUAL OPERATING PLAN			17
5.1 Mine Plan			17
5.2 Operations Pursuant to AOP			17
5.3 Purpose and Components of AOP			17
5.4 Review and Approval of AOP			17
5.5 Capital Investments			18
5.6 Revisions to the Approved AOP			19
5.7 Reporting on Approved AOP			19
5.8 Commodities Costs			20
5.9 Insurance			20
6. RESOLUTION OF DISPUTES			20
6.1 Negotiation of Disputes			20
6.2 Arbitration Resolution			21
6.3 Applicable Law and Arbitration Act			22
6.4 Continuation of Services			23
6.5 Injunctive Relief			23
7. PRICE AND PAYMENT			23
7.1 Price Components			23
7.2 Mine Cost			23
7.3 Management Fee			26
7.4 Adjustments			26
7.5 [Intentionally Omitted.]			30
7.6 Invoices			30

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		Page
8. DELIVERY AND TITLE; SCHEDULING; STOCKPILE MANAGEMENT; NO LIENS			31
8.1 Delivery; Title			31
8.2 Scheduling			31
8.3 Mine Lignite Inventory			32
8.4 No Liens			32
9. WEIGHTS; SAMPLING AND ANALYSIS; LIGNITE QUALITY			33
9.1 Weights			33
9.2 Sampling and Analysis			33
9.3 Lignite Quality			34
10. REPORTING			34
10.1 Production Reporting			34
11. LAND AND MINERAL LEASES			36
11.1 Subleases			36
11.2 Lignite Leases			36
11.3 Houston Lignite Royalty			36
11.4 Percentage Royalty Leases			36
11.5 Surface Use Agreement			36
12. FINAL RECLAMATION			37
12.1 Final Reclamation			37
12.2 NRG Obligation to Pay and Hold Harmless			37
12.3 Cost of Final Reclamation to Include Contract Fee			37
12.4 Reclamation Bonds			38
13. FORCE MAJEURE			38
13.1 Effect; Notice; Obligation to Mitigate			38
13.2 Lignite Deliveries			39
14. WAIVERS AND REMEDIES			39
14.1 Non-Waiver			39
14.2 NO CONSEQUENTIAL DAMAGES			39
15. DELIVERY FAILURE; EVENTS OF DEFAULT			39
15.1 Delivery Failure			39
15.2 Notice of Delivery Failure			40
15.3 Remedies for Delivery Failure			40
15.4 TWCC Events of Default			41
15.5 Remedies Following a TWCC Event of Default			42
15.6 NRG Event of Default			43
15.7 Remedies Following an NRG Event of Default			43
15.8 Payment			43
15.9 Specific Performance			43
15.10 Step-In Rights			44

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		Page
15.11 Mitigation			45
15.12 Effect of Xxxxxxxxxxx			00
00. REPRESENTATIONS AND WARRANTIES			45
16.1 TWCC Representations and Warranties			45
16.2 NRG Representations and Warranties			46
16.3 Reliance			47
17. INDEMNITIES			47
17.1 TWCC Indemnity			47
17.2 NRG Indemnity			47
18. ASSIGNMENT			47
19. GOVERNING LAW			47
20. NOTICES AND REPORTS			47
21. RECORDS			48
22. EXISTING EQUIPMENT AND ASSETS; OPERATIONS THROUGH DECEMBER 31, 2007			48
22.1 Existing Equipment and Assets			48
22.2 Operations through December 31, 2007			49
23. UNION PACIFIC RAIL SPUR			49
24. EMPLOYMENT; SUBCONTRACTORS			49
24.1 Nondiscrimination			49
24.2 TWCC Personnel; Subcontractors			50
24.3 Xxxxxxxxxxxxx			00
00. RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES			51
26. WARRANTY DISCLAIMER			51
27. MISCELLANEOUS PROVISIONS			51
27.1 Entire Agreement			51
27.2 Amendments or Modifications			52
27.3 Severability			52
27.4 Construction			52
27.5 No Third-Party Beneficiaries			52
27.6 Remedies Cumulative			52
27.7 Confidentiality			52
27.8 Policies and Procedures			53
27.9 Captions			53
27.10 Counterparts			53

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LIST OF EXHIBITS

Exhibit 1		Mine (§1.1)
Exhibit 2		Mine Plan (§1.1)
Exhibit 3		2008 Preliminary AOP (§5.4(b))
Exhibit 4		AOP Components (§5.3)
Exhibit 5		List of Experts (§1.1)
Exhibit 6		Surge Bin (§1.1)
Exhibit 7		Corporate Support Allowance (§7.2(c))
Exhibit 8		Form of Invoice (§7.6(a))
Exhibit 9		Post Execution Savings Actions (§1.1)
Exhibit 10		Typical Lignite Quality and Characteristics (§9.3(a))
Exhibit 11		Insurance (§5.9)
Exhibit 12		[Intentionally Omitted]
Exhibit 13		Form of Monthly Report Production Summary (§10.1(b))
Exhibit 14		Form of Monthly Costs Report (§10.1(b))
Exhibit 15		Form of Monthly and Quarterly Variance Report (§10.1(c))
Exhibit 16		Information Provided To Xxxxxx Mine Percentage Leases Royalty Owners Regarding Calculation Of Royalties Under Percentage Leases In Connection With Royalty Proposal (§11.4)
Exhibit 17		Cost Incentive Adjustment Sample Calculations (§7.4(a)(v))
Exhibit 18		Certain Escalation Adjustments (§7.4(a))
Exhibit 19		Equipment Maintenance Schedule (§22.2)
Exhibit 20		Prior LSA Provisions (§27.1)

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AMENDED AND RESTATED

LIGNITE SUPPLY AGREEMENT

     This Amended and Restated Lignite Supply Agreement (this “LSA”) is entered into as of September 28, 2007 (the “Effective Date”), by and between NRG TEXAS POWER LLC, a Delaware limited liability company (“NRG”), and TEXAS XXXXXXXXXXXX COAL CO., a Montana corporation (“TWCC”). NRG and TWCC may hereinafter be referred to, collectively, as the “Parties” and each, individually, as a “Party.”

R E C I T A L S

     WHEREAS, NRG and TWCC previously entered into that certain Lignite Supply Agreement, dated as of August 29, 1979 (the “Original LSA”), which was modified by: (i) that certain Construction and Operation Agreement, dated December 17, 1985 (the “C&O Agreement”); (ii) that certain Amendment No. 1 to the Original LSA dated August 1, 1989 (“Amendment No. 1”); (iii) that certain Settlement Agreement and Amendment of Existing Contracts, dated August 2, 1999 (the “Settlement Agreement”); (iv) that certain Letter Agreement, dated June 18, 2002 (the “2002 Supplemental Agreement”); (v) that certain Supplemental Settlement Agreement, dated January 30, 2004 (the “2004 Supplemental Agreement”); (vi) that certain Letter Agreement dated March 11, 2005 (the “Surcharge Agreement”); (vii) that certain Letter Agreement dated July 26, 2005 (the “Capital Investment Agreement”; and (viii) that certain Letter Agreement dated September 21, 2005 (collectively with the Original LSA, C&O Agreement, Amendment No. 1, the Settlement Agreement, the 2002 Supplemental Agreement, the 2004 Supplemental Agreement, the Surcharge Agreement, and the Capital Investment Agreement, the “Prior LSA”);

     WHEREAS, the Parties desire to amend and restate the Prior LSA in its entirety as of the Effective Date (except as provided in Section 3.1);

     WHEREAS, NRG desires to secure a flexible and economically competitive supply of lignite for NRG’s Limestone Electric Generating Station (“LEGS”) to be produced in accordance with agreed mining and reclamation plans and budgets;

     WHEREAS, TWCC desires to produce and sell lignite at a reasonable cost plus management fees, subject to adjustments based upon TWCC performing the Mining Work (as hereinafter defined) specified in the agreed mining plans and budgets and delivering lignite meeting specified standards; and

     WHEREAS, NRG and TWCC desire to enter into this LSA to set forth their agreement regarding such production and sale of lignite.

     NOW, THEREFORE, in consideration of the mutual covenants, undertakings and conditions set forth below, the receipt and sufficiency of which are acknowledged by both Parties, the Parties, intending to be legally bound, hereby agree as follows:

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A G R E E M E N T

1. DEFINITIONS; CONSTRUCTION.

     1.1 Definitions. Unless otherwise required by the context in which any defined term appears, the following defined terms shall have the meanings specified in this Section 1.1:

     “Accounting Expert” shall mean the Person that may be agreed to by the Parties after the date hereof and added to Exhibit 5 upon such agreement or any other certified public accountant that (a) is familiar with coal and/or lignite mining, (b) has no past or present relationship with either Party, and (c) is mutually agreed by both Parties or is selected by the CPR in accordance with Section 6.2(a)(ii).

     “Affiliate” shall mean, with respect to any Entity (the “applicable Entity”), (a) each Entity that the applicable Entity Controls, (b) each Person that Controls the applicable Entity, and (c) each Entity that is under common Control with the applicable Entity.

     “AOP” shall mean an annual operating plan for the Mine conforming to the requirements of Section 5.3.

     “AOP Volumes” shall mean, for any Year, the volumes of lignite to be produced and delivered by TWCC in such Year in accordance with the Approved AOP applicable to such Year, as the Approved AOP may be adjusted from time to time in accordance with this LSA, and shall mean for any day, week, or Month the volumes of lignite to be produced and/or delivered for such day, week, or Month in accordance with Section 8.2, in each case stated in TBtu.

     “Approved AOP” shall mean, with respect to any Year during the Term commencing with 2009, the AOP applicable to such Year and approved in accordance with Section 5.4, and for 2008, the AOP consistent with the preliminary AOP attached hereto as Exhibit 3 and approved in accordance with Section 5.4, as each such Approved AOP may be modified from time to time in accordance with Section 5.6.

     “As Received” shall mean the quality of lignite at the Delivery Point and otherwise as defined by ASTM.

     “ASTM” shall mean the American Society for Testing and Materials.

     “Bankruptcy” shall mean, with respect to any Person, any proceeding or set circumstances in which (i) such Person shall file a voluntary petition in bankruptcy or shall be adjudicated as bankrupt or insolvent, or shall file any petition or answer or consent seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under the present or future applicable federal, state or other statute or law relative to bankruptcy, insolvency, or other relief for debtors, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver, conservator or liquidator of such Person or of all or any substantial part of its properties

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(the term “acquiesce” as used in this definition includes the failure to file a petition or motion to vacate or discharge any order, judgment or decree within fifteen (15) days after entry of such order, judgment or decree); (ii) a court of competent jurisdiction shall enter an order, judgment or decree approving a petition filed against such Person seeking a reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future federal bankruptcy act, or any other present or future applicable federal, state or other statute or law relating to bankruptcy, insolvency, or other relief for debtors, and such Person shall acquiesce and such decree shall remain unvacated and unstayed for sixty (60) consecutive days from the date of entry thereof, or a trustee, receiver, conservator or liquidator of such Person shall be appointed with the consent or acquiescence of such Person and such appointment shall remain unvacated and unstayed for sixty (60) consecutive days; (iii) such Person shall admit in writing its inability to pay its debts as they mature; (iv) such Person shall give notice to any other Person of insolvency or pending insolvency, or suspension or pending suspension of operations; or (v) such Person shall make a general assignment for the benefit of its creditors or take any other similar action for the protection or benefit of its creditors.

     “Btu” shall mean a British Thermal Unit, which is the amount of energy required to raise the temperature of one pound of pure water one degree Fahrenheit.

     “Btu Adjustment” shall have the meaning assigned to such term in Section 7.4(c).

     “Business Day” shall mean any day other than a Saturday or Sunday or a national bank holiday.

     “Capital Investment” shall mean the purchase of equipment or the making of another investment that would be capitalized as an asset under generally accepted accounting practices (or the lease of such equipment or asset in lieu of the purchase thereof).

     “Change Order” shall have the meaning assigned to such term in Section 5.6.

     “Change Order Request” shall have the meaning assigned to such term in Section 5.6.

     “Claims” shall mean any and all liabilities (including negligence, warranty, statutory, product, strict or absolute liability, liability in tort or otherwise), obligations, losses, damages, penalties, fines, sanctions, claims, Environmental Claims, actions, or suits of whatever kind or nature, investigations, judgments, Liens (including any Lien in favor of any Governmental Authority upon LEGS or the Mine for environmental liabilities and costs or violations of any Environmental Laws) and shall include all reasonable costs, expenses and disbursements in connection therewith or related thereto, of any kind or nature, including reasonable legal fees and expenses and costs of investigation.

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     “Commodities” shall mean diesel fuel, electricity, tires, and steel used by TWCC in the ordinary course of operating the Mine.

     “Control” shall mean the possession, directly or indirectly, through one or more intermediaries, of either of the following:

     (a) (i) in the case of a corporation, 50% or more of the outstanding voting securities thereof; (ii) in the case of a limited liability company, partnership, limited partnership or venture, the right to 50% or more of the distributions therefrom (including liquidating distributions); (iii) in the case of a trust or estate, including a business trust, 50% or more of the beneficial interest therein; and (iv) in the case of any other Entity, 50% or more of the economic or beneficial interest therein; or

     (b) in the case of any Entity, the power or authority, through ownership of voting securities, by contract or otherwise, to exercise a controlling influence over the management of the Entity.

     “Corporate Support Allowance” shall have the meaning assigned to such term in Section 7.2(a)(viii).

     “Cost Components” shall be the actual types of costs incurred by TWCC to operate the Mine, as further described under Section 7.2 and subject to the exclusions set forth in Section 7.2.

     “Cost Incentive Adjustment” shall have the meaning assigned to such term in Section 7.4(a)(iii).

     “CPR” shall have the meaning assigned to such term in Section 6.2.

     “Current Bonding Level” shall have the meaning assigned to such term in Section 12.4(a).

     “Daily Fee” shall have the meaning assigned in Section 7.4(c)(iii).

     “Daily Reports” shall mean the reports to be delivered to NRG in accordance with Section 10.1(a).

     “Default Termination Date” shall mean the date on which this LSA is terminated by either Party prior to scheduled expiration of the Term pursuant to Section 15.

     “Delivery Day” shall mean a calendar day in which lignite is delivered by TWCC to LEGS.

     “Delivery Failure” shall have the meaning assigned such term in Section 15.1.

     “Delivery Point” shall mean the Surge Bin.

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     “Dispute Date” shall have the meaning assigned to such term in Section 6.1.

     “Effective Date” shall have the meaning assigned to such term in the introductory paragraph.

     “Entity” shall mean a corporation, limited liability company, partnership (including a general partnership, joint venture, limited partnership, limited liability partnership or partnership association), trust (including a business trust), estate, Governmental Authority or any other entity.

     “Environmental Claims” shall mean any claim, action, cause of action, investigation conducted by a Governmental Authority or written notice by any Person or entity alleging potential liability (including potential liability for cleanup costs, Remedial Action, Releases, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (a) a presence or Release of any Hazardous Material or (b) circumstances forming the basis of any obligation under, or alleged violation of, any Environmental Law.

     “Environmental Laws” shall mean all applicable United States Federal, state and local laws and regulations pertaining to the environment, natural resources, health and safety, including (a) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 X.X.X. §0000 et seq.) (“CERCLA”), (b) Emergency Planning and Community Right to Know Act (EPCRA, XXXX Title III) and the Superfund Amendments and Reauthorization Act of 1986, (c) the Solid Waste Disposal Act (42 U.S.C. §6901 et seq.), (d) the Resource Conservation and Recovery Act of 1976, (e) the Hazardous and Solid Waste Amendment Acts of 1984, (f) the Clean Air Act (42 X.X.X. §0000 et seq.), (g) the Clean Water Act (33 X.X.X. §0000 et seq.), (g) the Federal Water Pollution Control Act, (h) the Toxic Substances Control Act (15 U.S.C. §2601 et seq.), (i) the Safe Drinking Water Act, (j) the Mine Safety and Health Act of 1970 (42 X.X.X. §00000 et seq.), (k) the Oil Pollution Act of 1990, (l) the Hazardous Substances Transportation Act (49 U.S.C. §1801 et seq.), and (m) the Federal Mine Safety and Health Act of 1977 (30 U.S.C. §801 et seq.), and any similar or analogous statutes, regulations and decisional law of any Governmental Authority, as each of the foregoing may have been or are in the future amended or supplemented, in each case to the extent applicable with respect to the property and operation to which application of the term “Environmental Laws” relates.

     “Event of Default” shall mean an NRG Event of Default or a TWCC Event of Default.

     “Expert” shall mean an Accounting Expert, a Mining Expert or a Legal Expert, as the context requires.

     “Fee Adjustment Basis AOP” shall have the meaning given such term in Section 7.4(a)(i).

     “Fee Per Ton” shall have the meaning given such term in Section 7.3.

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     “Final Reclamation” shall mean the activities described in Section 12.1.

     “Force Majeure” shall mean any event that (a) renders the affected Party unable to perform its obligations under the LSA, in whole or in part, (b) is beyond the reasonable control of the affected Party, (c) is not due to the fault or negligence of the affected Party or the failure of the affected Party to carry out its obligations under this Agreement, and (d) cannot be avoided by the affected Party by the exercise of due diligence and the expenditure of a reasonable sum of money. Subject to the satisfaction of the conditions set forth in sections (a) through (d) above, Force Majeure shall include:

     (i) fires or serious accidents affecting the Mine, LEGS or the equipment or facilities of the affected Party;

     (ii) acts of God, exceptional and unpredictable meteorological conditions, declared or undeclared wars, acts of the public enemy, sabotage, terrorist acts, commercial embargoes, demonstrations, earthquakes, civil disturbances, revolts, and insurrections;

     (iii) transportation disasters, whether by waterways, rail, land, or air;

     (iv) strikes or other labor disputes (provided that said disputes are not due to the breach of the labor contracts or applicable laws by the Party claiming Force Majeure);

     (v) one of the Parties is unable, despite its best efforts, to obtain in a timely and appropriate manner any governmental authorization necessary to enable such Party to comply with its obligations under the LSA;

     (vi) any changes to laws or regulations that would require NRG to reduce or cease lignite use or significantly modify LEGS to continue to use lignite;

     (vii) any changes to laws or regulations that would require TWCC to reduce or cease lignite production; and

     (viii) breakdowns of or damage to LEGS, Mine equipment or facilities.

Force Majeure shall not include (A) economic hardship, (B) changes in market conditions, or (C) late delivery of machinery, equipment, materials or consumable goods except when such late delivery is due to Force Majeure.

     “GAAP” shall mean generally accepted accounting principles in effect in the United States from time to time.

     “Governmental Authority” shall mean a federal, state, local or foreign governmental authority; a state, province, commonwealth, territory or district thereof; a county or parish; a city, town, township, village or other municipality; a district, xxxx or other subdivision of any of the foregoing; any executive, legislative or other governing

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body of any of the foregoing; any agency, authority, board, department, office, commission, committee, council or other administrative body of any of the foregoing; and any court or other judicial body.

     “Group” shall mean the NRG Group or the TWCC Group, as the context requires.

     “Guaranty” shall mean each of (i) the Guaranty executed by Xxxxxxxxxxxx Coal Company guaranteeing the obligations of TWCC under this LSA as of the date hereof, and (ii) the Guaranty to be executed by Xxxxxxxxxxxx Mining LLC in the same form as (i) and delivered as part of the Security Document Delivery.

     “Hazardous Materials” shall mean (a) any hazardous materials, hazardous wastes, hazardous substances, toxic wastes, solid wastes, and toxic substances as those or similar terms are defined under any Environmental Laws; (b) any asbestos or any material which contains any hydrated mineral silicate, including chrysolite, amosite, crocidolite, tremolite, anthophylite and/or actinolite, whether friable or non-friable; (c) polychlorinated biphenyls (“PCBs”), or PCB-containing materials or fluids; (d) any other hazardous, radioactive, toxic or noxious substance, material, pollutant, contaminant, constituent, or solid, liquid or gaseous waste; (f) any petroleum, petroleum hydrocarbons, petroleum products, crude oil and any fractions or derivatives thereof, and any natural gas, synthetic gas and any mixtures thereof; and (g) any substance that, whether by its nature or its use, is subject to regulation under any Environmental Laws or with respect to which any Environmental Laws or Governmental Authority requires environmental investigation, monitoring or remediation.

     “Independent Contractor” shall have the meaning assigned to such term in Section 15.10.

     “Independent Lab” shall have the meaning assigned to such term in Section 9.2(a).

     “Interest Rate” shall mean the lesser of (a) the U.S. Treasury ten year annual rate (as published in The Wall Street Journal) plus 3%, with such rate determined on the first Business Day of each Quarter for calculations for that Quarter, and (b) the highest rate permitted by applicable Law.

     “Launched” shall have the meaning assigned to such term in Section 3.2(e).

     “Law” shall mean any applicable constitutional provision, statute, act, code, law (including common law), regulation, rule, ordinance, order, writ, judgment, decree, ruling, decision or other legal or regulatory determination of a Governmental Authority having valid jurisdiction.

     “Legal Expert” shall mean the Person that may be agreed to by the Parties after the date hereof and added to Exhibit 5 upon such agreement or any other lawyer that (a) is familiar with coal and/or lignite mining, (b) has no past or present relationship with

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either Party, and (c) is mutually agreed by both Parties or is selected by the CPR in accordance with Section 6.2(a)(ii).

     “LEGS” shall have the meaning assigned to such term in the Recitals.

     “LEGS Representative” shall have the meaning assigned to such term in Section 4.2.

     “Lien” shall mean any lien, mortgage, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, mechanic’s liens and other liens arising under law, and any agreement to give any security interest).

     “Lignite Supply Term” shall have the meaning assigned to such term in Section 3.2(a).

     “LSA” shall have the meaning assigned to such term in the introductory paragraph.

     “Major Dispute” shall mean any dispute that is not a Minor Dispute.

     “Management Fee” shall have the meaning assigned to such term in Section 7.3.

     “Mine” shall mean the Xxxxxx lignite mine as permitted and/or controlled by TWCC in the areas of Xxxx, Limestone, and Freestone Counties in the State of Texas and included within the boundaries shown on Exhibit 1.

     “Mine Costs” shall have the meaning assigned such term in Section 7.1.

     “Mine Manager” shall have the meaning assigned to such term in Section 24.2(a).

     “Mine Plan” shall mean the mine plan attached hereto as Exhibit 2, as amended, supplemented or otherwise modified from time to time in accordance with this LSA.

     “Mine Stockpile” shall mean the lignite stored and managed at the Mine at or near the Delivery Point.

     “Minimum Criteria” shall have the meaning assigned such term in Section 5.4(b).

     “Mining Expert” shall mean the Person that may be agreed to by the Parties after the date hereof and added to Exhibit 5 upon such agreement or any other mining engineer that (a) is experienced with coal and/or lignite mining in the western United States, (b) has no past or present relationship with either Party, and (c) is mutually agreed by both Parties or is selected by the CPR in accordance with Section 6.2(a)(ii).

     “Mining Work” shall mean all work required to be carried out by TWCC in order to operate and maintain the Mine, produce and deliver lignite, and perform reclamation

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activities, in each case in accordance with the Mine Plan, each Approved AOP, and this LSA, and otherwise to perform its obligations under this LSA.

     “Minor Dispute” shall mean any dispute between the Parties under this Agreement (i) in respect of which the amount in dispute is less than $500,000 or (ii) involving the approval of or any failure to approve any AOP, any revision to an Approved AOP, or the Fee Adjustment Basis AOP (regardless of the amount in dispute).

     “MMBtu” shall mean million Btus.

     “Month” shall mean a calendar month.

     “Monthly Fee” shall have the meaning assigned such term in Section 7.4(b)(iii).

     “Mortgage and Security Agreements” shall mean (i) the Deed of Trust, Fixture Filing and Assignment of Rents to Secure Performance and (ii) the Security Agreement in each case, entered into by TWCC in favor of NRG and collectively covering all real and personal property (including coal reserves and Permits) owned or leased by TWCC.

     “Non-Performing Party” shall have the meaning assigned to such term in Section 13.1.

     “NRG” shall have the meaning assigned to such term in the introductory paragraph.

     “NRG Event of Default” has the meaning assigned to such term in Section 15.6.

     “NRG Group” shall mean (a) NRG; (b) the Affiliates of NRG; (c) any other members, shareholders, partners or other equity owners of NRG or any of its Affiliates (other than holders of publicly-traded stock of NRG or any of its Affiliates); (d) the LEGS Representative; and (e) the respective successors and assigns of the Persons described in the foregoing clause (a), (b), (c) or (d).

     “Officer” shall mean a duly authorized executive officer for either NRG or TWCC, as applicable.

     “Optional Supply Termination Date” shall have the meaning assigned to such term in Section 3.2(c).

     “Party” and “Parties” shall have the respective meanings assigned to such terms in the introductory paragraph.

     “Permits” shall mean any permit, certificate, license, franchise, authorization, approval, variance, exemption, concession, lease, instrument or order issued or granted by any Governmental Authority, or any amendment thereto.

     “Person” shall mean any natural person or any Entity.

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     “Post Execution Savings Actions” means the actions and periods for implementation set forth in Exhibit 9.

     “PRB” shall mean coal from the Powder River Basin in Wyoming.

     “Prior LSA” shall have the meaning assigned to such term in the Recitals.

     “Prudent Mining Practices” shall mean those procedures, methods, techniques, and acts that are consistent with professional standards used by the lignite mining industry for the operation and maintenance of mines similar in type to the Mine. Prudent Mining Practices are intended to result in the safe, reliable, lawful, economic, and prudent operation and maintenance of the Mine to maximize lignite production and minimize Mine Costs in a manner consistent with long-term reliable exploitation of the Mine and the rights and obligations of the Parties under this LSA. Prudent Operating Practices are not intended to be limited to optimum practice or methods to the exclusion of all others, but rather to be a spectrum of reasonable and prudent practices and methods that must take into consideration the conditions specific to the Mine.

     “Quarter” shall mean each calendar quarter, commencing on January 1, April 1, July 1 and October 1.

     “RCT” shall mean the Railroad Commission of the State of Texas.

     “Registration Statement” shall have the meaning assigned to such term in Section 3.2(e).

     “Release” shall mean the release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migrating into the environment of any Hazardous Material through or in the air, soil, surface water or ground water.

     “Remedial Action” shall mean actions required by any Governmental Authority to (i) clean up, remediate, remove or treat Hazardous Materials in the environment, (ii) prevent the Release or further Release or minimize the further Release of Hazardous Materials or (iii) investigate and determine if a remedial response is needed, to design such a response and post-remedial investigation, monitoring, operation and maintenance.

     “Reserves” shall mean all of the lignite reserves owned by or leased to TWCC or that TWCC otherwise has the right to mine for its own account within the boundaries shown on Exhibit 1, including all of the lignite reserves covered by the Subleases.

     “Scheduled Supply Termination Date” shall have the meaning assigned to such term in Section 3.2(b).

     “Security Document Delivery” shall occur if and only if (i) Xxxxxxxxxxxx Mining LLC shall have executed and delivered to NRG a Guaranty and the Xxxxxxxxxxxx Pledge Agreement and (ii) TWCC shall have executed, acknowledged and delivered to NRG in proper form for recording or filing, as applicable, the Mortgage and Security Agreements

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(together with all related UCC-1 financing statements) and a period of 95 days shall have elapsed from the date of their delivery to NRG.

     “Special TWCC Default Termination” means a termination of the LSA pursuant to Article 15 due to a TWCC Event of Default if (a) such TWCC Event of Default could reasonably be expected to result in material loss or liability to NRG and (b) such TWCC Event of Default arises from (i) the willful misconduct, intentional act or negligence of TWCC or (ii) a breach of a Guaranty by one or more of the guarantors thereunder. Without limiting the generality of the foregoing, for the purposes hereof, the failure of the guarantors to cause TWCC to be funded so as to be able to perform its obligations under the LSA shall be deemed an intentional breach by TWCC.

     “Standby Purchase Agreement” shall have the meaning assigned to such term in Section 3.2(d).

     “Subcontractor” shall mean any Person with whom TWCC enters into a subcontract for the carrying out any part of the Mining Work, including Persons at any level with whom any Subcontractor has further subcontracted any part of the Mining Work, and the legal or personal representatives, agents, successors, and assigns of any such Person.

     “Subleases” shall mean that certain Sublease of Coal and Lignite Leases dated January 10, 1985, recorded in Volume 593 at Page 868 in the Official Records of Xxxx County, Texas, recorded in Volume 716 at Page 95 in the Deed Records of Freestone County, Texas, and recorded in Volume 752 at Page 214 in the Deed Records of Limestone County, Texas; and (ii) that certain Sublease of Coal Lease dated April 23, 1996 in Volume 0983 at page 703 in the Deed Records of Freestone County, Texas.

     “Subsections G1 and G2” shall have the meaning assigned to such term in Section 27.1

     “Supply Suspension” shall have the meaning assigned such term in Section 3.3.

     “Surface Use Agreement” shall have the meaning assigned to such term in Section 11.5.

     “Surge Bin” shall mean the surge bin at LEGS described more specifically in Exhibit 6.

     “TBtu” shall mean trillion Btus.

     “Term” shall have the meaning assigned to such term in Section 3.1.

     “Ton” shall mean a unit of weight equal to 2,000 pounds avoirdupois.

     “TWCC” shall have the meaning assigned to such term in the introductory paragraph.

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     “TWCC Event of Default” shall have the meaning assigned to such term in Section 15.4.

     “TWCC Group” shall mean (a) TWCC; (b) the Affiliates of TWCC; (c) any other members, shareholders, partners or other equity owners of TWCC or any of its Affiliates (other than holders of publicly-traded stock of TWCC or any of its Affiliates); and (d) the respective successors and assigns of the Persons described in the foregoing clause (a), (b) or (c).

     “TWCC Lien” shall have the meaning assigned to such term in Section 8.4(a).

     “TWCC Personnel” means all employees of TWCC who will perform the Mining Work.

     “Xxxxxxxxxxxx Pledge Agreement” shall mean the Pledge Agreement pursuant to which Xxxxxxxxxxxx Mining LLC pledges 100% of all ownership interests in TWCC to NRG.

     “Year” shall mean a calendar year commencing January 1 and ending December 31.

     1.2 Construction. Unless the context of this LSA otherwise requires, (a) references to “this LSA” or any other agreement or document shall be construed as a reference to such agreement or document as amended, modified, or otherwise supplemented from time to time; (b) references to any Person shall include such Person’s successors and assigns; (c) references to “Sections” and “Exhibits” are to Sections of, and Exhibits to, this LSA, each of which is made a part of this LSA for all purposes; (d) the meanings specified are applicable to both the singular and plural; (e) wherever the words “include,” “includes,” or “including” are used in this LSA, they shall be deemed to be followed by the words “without limitation”; (f) all references to “herein,” “hereof,” “hereunder,” and similar terms shall be deemed to refer to this entire LSA; (g) references to any gender include all others if applicable in the context, and (h) the text of this LSA and the Exhibits hereto shall be construed consistently, but in the event of any irreconcilable conflicts the text of this LSA shall control over any Exhibit.

2. SALE AND PURCHASE; STANDARD OF PERFORMANCE.

     2.1 Lignite Supply.

     (a) During each Year of the Lignite Supply Term, TWCC shall sell and deliver, and NRG shall take and pay for, the AOP Volumes for such Year, upon the terms and subject to the conditions set forth in this LSA.

     (b) All lignite to be delivered by TWCC under this LSA shall be produced at the Mine.

     (c) TWCC hereby dedicates the Reserves and all lignite produced from the Reserves to the satisfaction of TWCC’s lignite delivery obligations under this LSA, and

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TWCC shall not sell any portion of such lignite to any Person other than NRG during the Term.

     (d) Without the prior written consent of NRG, which consent may not be unreasonably withheld, TWCC shall not and shall not permit any of its Affiliates to acquire or attempt to acquire any additional reserves of lignite within any of Limestone, Xxxx, Xxxxxxxxx or Xxxxxxxxx Counties if such acquisition could reasonably be expected to (i) either extend the Term of this LSA or increase the Mine Costs under this LSA, (ii) increase the Mine Costs for reclamation or increase NRG’s obligations relating to reclamation, or (iii) materially interfere with any efforts of NRG to acquire lignite reserves for LEGS. The preceding sentence shall not preclude TWCC or Affiliates of TWCC from acquiring an active mining operation in any of such Counties. For the avoidance of doubt, if TWCC or one of its Affiliates acquires any such additional reserves of lignite, unless NRG otherwise agrees in writing such reserves shall not become part of the Mine.

     2.2 Standard of Performance.

     (a) TWCC shall perform the Mining Work in all respects in a good and workmanlike manner and in accordance with (i) the Mine Plan, (ii) the applicable Approved AOP, (iii) all applicable Laws, and (iv) Prudent Mining Practices. TWCC shall obtain all Permits required to do business or perform the Mining Work. Consistent with the Mine Plan and its other responsibilities and limitations hereunder, TWCC shall use all reasonable efforts to maximize the gross output of lignite from the Mine, while minimizing Mine Costs.

     (b) Except as set forth herein, all vehicles, machinery and other equipment reasonable and necessary to the operation of the Mine that are owned, used, or held for use by TWCC shall be kept at the Mine and employed solely in providing Mining Work under this Agreement. If in connection with the approval of an AOP for any Year or in connection with any Change Order or Supply Suspension it is determined by the Parties that any of such vehicles, machinery, or other equipment belonging to TWCC are unnecessary to the performance of the Mining Work, TWCC shall have the right to deploy any such vehicles, machinery, or equipment owned by it to another facility owned or operated by TWCC or any Affiliate of TWCC, subject to the prior written consent and approval of NRG, such consent and approval not to be unreasonably withheld; provided, however, that it is agreed that a reasonable basis for NRG’s withholding such consent shall be that the future operating costs of such deployed vehicles, machinery, or equipment, at such time as such vehicles, machinery, or equipment is redeployed to the Mine, would be materially increased as a result of such deployment. At such time as the then-current Approved AOP reasonably requires the use of any vehicles, machinery, or equipment that have been deployed to another facility, TWCC at its cost shall return such vehicles, machinery, or equipment to the Mine in substantially the same operating condition as when it was removed, ordinary wear and tear excepted. Unless otherwise agreed by the Parties, all mining equipment purchased with NRG funds or the acquisition cost of which has been reimbursed with NRG funds shall be titled in the name of NRG, except for equipment identified on Exhibit 9.

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3. LSA TERM; LIGNITE SUPPLY TERM; SUPPLY SUSPENSION.

     3.1 LSA Term. This Agreement shall be binding and effective as of the Effective Date, but the terms of the Prior LSA as to the supply and sale of, and payment for, lignite (and as to certain operations as more particularly specified in Section 22.2) shall apply through December 31, 2007 and are hereby incorporated by reference for such purpose. The term of this LSA (the “Term”) shall commence on the Effective Date and shall continue through the earlier to occur of (a) the occurrence of a Special TWCC Default Termination unless Security Document Delivery has previously occurred; and (b) the completion and termination of all Final Reclamation activities, including final bond release by all relevant Governmental Authorities, as further described under Section 12. If a Special TWCC Default Termination occurs prior to Security Document Delivery, then NRG shall not have any financial liability or responsibility for the Final Reclamation as set forth under Section 12.1(b).

     3.2 Lignite Supply Term.

     (a) Notwithstanding the Term of the LSA as provided under Section 3.1, the “Lignite Supply Term” shall commence on January 1, 2008, and shall terminate on the earliest to occur of (i) the Scheduled Supply Termination Date, (ii) the Optional Supply Termination Date, (iii) the Default Termination Date, (iv) as provided in Section 3.2(d) or (v) as provided in Section 3.2(e).

     (b) The “Scheduled Supply Termination Date” shall be December 31, 2018; provided, however, that NRG shall have the right, exercisable by notice to TWCC on or prior to the 365^th day prior to the then-effective Scheduled Supply Termination Date, (i) to extend the Scheduled Supply Termination Date to December 31, 2023, and (ii) if it exercises such right to extend the Scheduled Supply Termination Date, to extend the Scheduled Supply Termination Date a second time to December 31, 2028, with each such date becoming the “Scheduled Supply Termination Date” upon such exercise, and further provided that exhaustion of the Reserves at the Mine has not occurred. When the exhaustion of the Reserves at the Mine shall occur, the Scheduled Supply Termination Date shall be deemed to have occurred.

     (c) NRG shall have the right, exercisable by notice to TWCC on or prior to the 180^th day prior to December 31 of any Year, to terminate the Lignite Supply Term on the last day of such Year (the “Optional Supply Termination Date”).

     (d) NRG shall have the right, exercisable by written notice to TWCC on or after January 1, 2008, to terminate the Lignite Supply Term effective as of a date at least 60 days after the date of such written notice if Xxxxxxxxxxxx Coal Company has not entered into, on or before October 15, 2007, an amendment to the Standby Purchase Agreement dated May 2, 2007 (as subsequently amended on July 3, 2007, the “Standby Purchase Agreement”) pursuant to which Tontine Capital Partners, L.P. agrees, among other things, to extend the termination date contained in Section 12(b)(ii) of such Standby Purchase Agreement to at least May 5, 2008, on terms that are expected to provide substantially the same net proceeds to Xxxxxxxxxxxx Coal Company as were expected to have been provided under the initial terms of the Standby Purchase Agreement.

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     (e) NRG shall have the right, exercisable by written notice to TWCC on or after March 1, 2008, to terminate the Lignite Supply Term effective as of a date at least 60 days after the date of such written notice if on or before February 29, 2008,(i) the rights offering has not been Launched which shall mean both (A) Xxxxxxxxxxxx Coal Company’s registration statement ( the “Registration Statement”) in connection with the rights offering described in its Proxy Statement dated July 19, 2007 (as the terms of such rights offering are amended pursuant to the amendment to the Standby Purchase Agreement referenced in the preceding subparagraph) has been declared effective by the Securities and Exchange Commission and (B) the prospectus included in the Registration Statement and all other necessary offering materials have been sent to Xxxxxxxxxxxx Coal Company’s shareholders commencing the period for consideration of the rights offering, or (ii) such rights offering has been Launched by such date but one of the following has occurred: (x) an event has occurred that could reasonably be expected to prevent Xxxxxxxxxxxx Coal Company from successfully completing such rights offering by April 30, 2008, or (y) an event has occurred that could reasonably be expected to cause or permit the Standby Purchasers to not timely consummate the share purchase contemplated by the Standby Purchase Agreement.

     (f) In the event NRG exercises its right of termination pursuant to Section 3.2(d) or Section 3.2(e), such termination shall not be considered a Special TWCC Default Termination and NRG shall continue to be responsible for all costs of Final Reclamation pursuant to Section 12.2 hereof.

     3.3 Supply Suspension. NRG shall have the right to reduce the AOP Volumes to zero either (a) with respect to any Year, by notice to TWCC on or prior to the 180^th day prior to January 1 of any Year, and (b) otherwise pursuant to a Change Order in accordance with Section 5.6 (either such action being herein called a “Supply Suspension”), in each case for a definite or indefinite period. A Supply Suspension shall not constitute a termination of the Lignite Supply Term. During any period of Supply Suspension, (i) TWCC shall continue ongoing reclamation work and shall to the extent reasonable and in accordance with all applicable laws and regulations maintain the Mine in a condition such that it may reasonably re-commence operations and lignite deliveries within a reasonable time, and in any event not less than ninety (90) days or such longer period as NRG may specify, after a request therefor by NRG (and Supply Suspension shall not entitle TWCC to permanently shut down the Mine), and (ii) NRG shall be obligated to pay Mine Costs incurred in connection with so maintaining the Mine, including ongoing reclamation work, together with the Corporate Support Allowance then in effect. In no event shall TWCC be required to maintain the Mine in a Supply Suspension mode if such Supply Suspension is contrary to its regulatory obligations or negatively affects in any material way the permitting of any of the coal or lignite mining operations of any TWCC Affiliate.

4. GOVERNANCE; REPRESENTATIVES; RELATIONSHIP OF PARTIES.

     4.1 Nature of Governance. Subject to the terms of this LSA, the Mine Plan and Approved AOP’s, as operator of the Mine, TWCC has the discretion to operate the Mine as it determines is necessary and appropriate to ensure the safety of its workforce and to comply with all applicable Laws and leases and to fulfill all of its obligations and rights hereunder. NRG may

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monitor TWCC’s performance and shall have the right to approve or disapprove AOP’s in accordance with the terms of this LSA.

      4.2 Representatives. NRG shall name a representative (the “LEGS Representative”) to represent NRG in development of the AOP’s in coordination and cooperation with the President of TWCC or his designee. NRG and TWCC shall each name a senior corporate Officer (which may be an executive of such Party’s parent) to whom disagreements or disputes shall be directed, as further provided in Section 6.

      4.3 Relationship of the Parties. Nothing contained in this LSA shall be deemed or construed to create the relationship of principal and agent, master and servant, partnership or joint venture or of any association whatsoever except as expressly provided herein. Neither Party shall have the right to bind or obligate the other in any manner unless expressly stated herein. In fulfilling its obligations hereunder, TWCC shall be an independent contractor with respect to NRG and not the agent of NRG for any purposes other than those specifically described herein.

      4.4 NRG Governance Role. NRG shall participate with TWCC in the financial planning, financial review and cost control measures relating to Mine operations. NRG shall:

     (a) provide TWCC with the information specified in Section 5.4(a) for use by TWCC in developing the AOP’s;

     (b) have the right to approve each AOP (including all components thereof) and proposed revisions to each Approved AOP as provided in Sections 5.4 and 5.6, approve capital acquisitions and investments as provided in Section 5.5;

     (c) have the right to full access to the Mine (provided that such access does not unreasonably interfere with or impede the Mining Work and shall be carried out in accordance with applicable safety rules and regulations; and provided that any incremental cost will be borne by NRG) and the right to monitor TWCC’s operations, performance and results relative to each Approved AOP and the individual components of such Approved AOP, including the following rights:

	(i)		daily inspection;
	(ii)		daily interface with Mine management;
	(iii)		oversight of maintenance programs;
	(iv)		monitoring capital and operating expenditures;
	(v)		monitoring dragline and equipment performance and availability;
	(vi)		oversight of mine safety programs;
	(vii)		oversight of warehouse inventory;

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       (viii)    oversight of insurance and warranty claims (to the extent not limited by attorney client privileged communications but the Parties shall cooperate to provide such information which does not result in a loss of attorney client privilege (including taking advantage of joint defense arrangements, etc.));

	(ix)		monitoring of reclamation activities; and
	(x)		auditing of books and records.

5. ANNUAL OPERATING PLAN.

     5.1 Mine Plan.

     (a) The Parties acknowledge that each AOP (and each of its constituent components) shall be based upon the Mine Plan, as modified from time to time, as the guiding principle for operation of the Mine.

     (b) The Mine Plan will be updated on an annual basis in connection with the approval of the AOP for each Year and may be otherwise amended, modified or supplemented only by mutual agreement of the Parties; provided, however, that in connection with any such amendment, modification, or supplement, NRG shall have the sole authority with respect to material business decisions, such as projected volumes and delivery schedules, subject only to the operational feasibility of such business decisions.

     5.2 Operations Pursuant to AOP. TWCC shall, in consultation with NRG, prepare an AOP for each Year beginning 2008, as further provided below, pursuant to this Section 5, including any Year after the Lignite Supply Term. An AOP must be approved by NRG and TWCC or through the dispute resolution procedures in Section 6 to become effective. Unless otherwise mutually agreed in writing between the Parties, no Approved AOP shall obligate TWCC to supply lignite from sources other than the Mine. TWCC shall conduct all operations, incur expenses, and direct capital expenditures pursuant to the Approved AOP for the applicable Year.

     5.3 Purpose and Components of AOP. The purposes of each AOP shall be to provide TWCC and NRG with the means to describe the Mining Work to be conducted by TWCC during the Year to which such AOP is applicable, as set forth in the Mine Plan, and to reasonably control Mine Costs to projected AOP levels. Each AOP shall consist of the components described in Exhibit 4. Each AOP will include an updated Mine Plan (which, for the avoidance of doubt, will be approved as part of the Approved AOP pursuant to the process set out in this LSA), such that the AOP for any Year will be consistent with the Mine Plan at the time of approval of such AOP.

     5.4 Review and Approval of AOP.

     (a) On or before March 15 of each Year beginning in 2008, NRG shall provide TWCC with the following information that will assist TWCC with the preparation of the AOP applicable to the following Year:

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     (i) non-binding, good faith estimates of demand for volumes of lignite by Month for the upcoming two Years, which volumes may be in any amount from zero to the reasonable capacity of the Mine (considering the prior Year’s actual production, work performed, and existing Mine equipment fleet and work force);

     (ii) the timing of any planned outages at LEGS during the upcoming two Years; and

     (iii) such other information as NRG may deem relevant or that is reasonably requested by TWCC in connection with the preparation of the AOP applicable to the upcoming Year.

      (b) On or before May 1 of each Year beginning in 2008, and in the case of the 2008 AOP, on or before October 4, 2007, TWCC shall submit to NRG for its approval a proposed AOP applicable to the following Year for the estimated volumes for such year supplied by NRG. The proposed AOP for 2008 shall be consistent with and contain AOP Volumes not less than and Mine Costs not greater than those set forth in the proposed AOP attached hereto as Exhibit 3 (except that Tons produced for 2008 shall be 70,000 Tons less than Exhibit 3 and Mine Costs will be reduced accordingly), and, notwithstanding anything to the contrary contained herein, unless agreed by NRG, the Approved AOP for 2008 shall contain AOP Volumes not less than and Mine Costs not greater than those set forth in the proposed AOP. If NRG does not approve any such AOP and the Parties are unable to agree on any aspect of such AOP on or before July 1 of the relevant Year, or in the case of the 2008 AOP, on or before October 22, 2007, any issues not resolved shall promptly be submitted to dispute resolution pursuant to Section 6. For the avoidance of doubt, the Parties intend for the Mining Expert to resolve any such dispute in a way that meets the following minimum criteria (the “Minimum Criteria”): (i) does not impose on TWCC an obligation to carry out Mining Work that could not reasonably possibly be performed by a mine operator consistent with applicable Laws and Prudent Mining Practices, without regard to the reasonableness of incurring the cost therefor (since the Mine Costs for such Mining Work are to be borne by NRG hereunder) and (ii) is consistent with a fair and reasonable opportunity for TWCC to earn the Management Fee for Tons actually delivered to NRG, subject to adjustment as provided in Section 7.4.

      (c) Notwithstanding that the AOP is based on the projected consumption of the lignite produced and delivered hereunder at LEGS, nothing in this Agreement shall restrict the use by NRG of the lignite produced and delivered hereunder to consumption at LEGS, the right of NRG to resell in its sole discretion any lignite produced and delivered to it hereunder, or the right of NRG to purchase lignite from any other source whatsoever or any other fuel for LEGS.

      5.5 Capital Investments. NRG shall have the right to approve all Capital Investments whether or not included in the Approved AOP. Prior to any such Capital Investment, TWCC shall submit the purchase order therefor to NRG for its approval, and all such approved purchase orders shall become part of the AOP. NRG shall respond to any

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submitted request for a Capital Investment within fifteen (15) Business Days after receipt of such request; failing which such request shall be deemed approved. In connection with each such Capital Investment, NRG shall have the right (a) to have TWCC make such Capital Investment, in which case NRG shall remit to TWCC the cost of such Capital Investment as part of the Mine Costs, or (b) to make such Capital Investment itself and acquire such capital asset, in which case such capital asset shall be made available to TWCC in accordance with Section 22.1.

     5.6 Revisions to the Approved AOP. NRG may at any time propose that the Approved AOP applicable to any Year be revised for any reason (specifically including a desire by NRG to increase or decrease AOP Volumes for the remainder of such Year) by submitting to TWCC a request for a change to such AOP (a “Change Order Request”). As soon as reasonably practical but in no event later than the 15^th Business Day after such Change Order Request, TWCC shall submit to NRG a proposed change to the Approved AOP (such change, a “Change Order”) that sets forth in reasonable detail the changes to the Approved AOP necessary to implement the modification requested in the Change Order Request, which changes will include changes to the Mine Costs. If TWCC believes that the Change Order Request or any part thereof would impose on TWCC an obligation to carry out Mining Work that does not meet the Minimum Criteria, TWCC shall so inform NRG. If NRG believes that the Change Order proposed by TWCC does not correctly reflect the changes to the Approved AOP necessary to implement the Change Order Request or disagrees with any such determination by TWCC that any Mining Work does not meet the Minimum Criteria, and if TWCC and NRG are unable to agree on changes to the proposed Change Order within 10 Business Days after TWCC’s receipt of same, NRG shall have the right to have the changes to the AOP required to implement the Change Order Request be determined by the Mining Expert in accordance with Section 6.2(a); provided, however, that NRG may always decide in its sole discretion whether or not to approve a proposed Change Order. For the avoidance of doubt, the Parties do not intend for the Mining Expert to resolve any such dispute in a way that imposes on TWCC an obligation to carry out Mining Work that does not meet the Minimum Criteria. Such Change Order, as modified as the Parties may agree, shall be implemented only if and when accepted by NRG, and the Approved AOP shall be modified as set forth in such Change Order from and after such acceptance. With respect to any Change Order implementing a change in the AOP Volumes, the AOP Volumes for the Approved AOP for such Year shall be adjusted to take into account the change in volumes effected by such Change Order, and the daily, weekly, and Monthly AOP Volumes shall be reduced or increased, as applicable, in accordance with such Change Order from and after its effectiveness. The Approved AOP may not be amended, modified, or supplemented otherwise than as set forth in this Section 5.6 except by the mutual agreement of the Parties.

     5.7 Reporting on Approved AOP. In addition to other reports TWCC is required to provide under this LSA, TWCC shall provide the following reports to the LEGS Representative: (a) budget variance reports that show budget-to-actual expenditures for the preceding Month and Quarter; and (b) Quarterly budget projection reports that show projected expenditures versus budgeted amounts for the following Quarter. Such reports shall keep the LEGS Representative notified of TWCC’s performance and of material anticipated departures for the Year from the Approved AOP applicable to that Year.

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     5.8 Commodities Costs. In accordance with Section 7.4, each AOP shall state the quantities of each of the Commodities that are budgeted to be purchased in connection with performing the Mining Work contemplated by such AOP. Notwithstanding any other provision of this LSA, TWCC shall act in accordance with Prudent Mining Practices in trying to minimize Commodities costs incurred by TWCC and its subcontractors.

     5.9 Insurance.

     (a) TWCC shall maintain insurance written in the kinds and minimum limits of liability specified in Exhibit 11.

     (b) TWCC shall furnish NRG with certificates of insurance acceptable to NRG evidencing the required coverages, as well as the terms and conditions specified by this LSA upon execution of this LSA. The policies required by this Section 5.9 shall contain a provision that coverages afforded under the policies shall not be canceled until thirty (30) days prior written notice has been provided to NRG. The failure by TWCC to provide NRG with Certificates of Insurance, or NRG to insist upon Certificates of insurance, shall not be deemed a waiver of any rights of NRG under this LSA or under any applicable amendment hereto. The inclusions, coverage and limits required hereby are minimum inclusions, coverage and limits, and shall not be construed as a limitation of NRG’s rights under the noted policies. TWCC is responsible for determining what additional coverage, terms or limits are required to perform this LSA, even though those requirements may be in addition to, or excess of, the minimum requirements set forth herein. If TWCC fails to maintain or pay for the insurance coverages required herein, and TWCC does not acquire such insurance within twenty (20) days after receipt of written notice of such from NRG, NRG shall have the right (but not the obligation) to secure same in the name of and for the account of TWCC, in which event, TWCC shall pay the cost thereof and shall furnish upon demand, all information that may be required to procure such insurance(s). NRG shall have the right to off-set the costs of procuring the foregoing insurance(s) against any funds due and owing to TWCC. If no funds are due and owing, then NRG shall have the right to back-charge the costs of the acquired insurance(s) to TWCC.

6. RESOLUTION OF DISPUTES.

     6.1 Negotiation of Disputes. In the event of any dispute arising out of or relating to the implementation or performance of this LSA that the Parties have been unable to settle within a period of fifteen (15) days after written notice by one Party that the dispute or disagreement has arisen (such date hereinafter referred to as the “Dispute Date”), each Party shall nominate an Officer to meet at a mutually agreed time and place, not later than twenty (20) days after the Dispute Date, to attempt to resolve such dispute or disagreement. Should a resolution of such dispute or disagreement not be obtained within five (5) Business Days after the meeting of Officers for such purpose, either Party may then by notice to the others submit the dispute to arbitration in accordance with the provisions of Section 6.2. The negotiation requirements of this Section 6.1 shall not apply to disputes regarding the approval of an AOP, which are instead covered by the procedures set forth in
Section 5.4(b).

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     6.2 Arbitration Resolution. Any claim, dispute, or controversy arising out of or relating to this LSA or the breach or termination thereof, not settled in accordance with the provisions of Section 6.1 (or Section 5.4(b) in the case of disputes regarding the approval of an AOP) shall be submitted to binding arbitration, which arbitration shall apply the Rules for Non-Administered Arbitration of the International Institute for Conflict Prevention & Resolution (“CPR”) in effect on the date hereof and, to the extent not inconsistent therewith, the procedural laws of the State of Texas, unless the Parties mutually agree otherwise.

     (a) Minor Disputes shall be resolved in the following manner:

     (i) The Party that wishes to submit a Minor Dispute that the Parties are unable to resolve pursuant to Section 6.1 (or Section 5.4(b) in the case of disputes regarding the approval of an AOP) to arbitration under this Section 6.2 shall notify the other Party of the object of the Minor Dispute.

     (ii) Within five (5) days after such notice, the Parties shall jointly notify the applicable Expert. Minor Disputes related solely to accounting issues shall be referred to an Accounting Expert. Minor Disputes related solely to legal issues shall be referred to a Legal Expert. All disputes regarding the approval of an AOP and all other Minor Disputes, including any Minor Disputes that involve accounting and/or legal issues together with other non-accounting/non-legal issues, shall be referred to a Mining Expert. If the Parties are unable to agree on the selection of the Expert or if either Party fails to join in the joint notification of the selected Expert, then the Expert shall be selected by the CPR using the criteria set forth above and/or notified by the CPR.

     (iii) Within fifteen (15) days after the notice to such Expert, each Party shall submit to the Expert a written position statement with respect to the issues in dispute. Such statements shall include a short summary of the Party’s position along with a statement of such Party’s last best offer with respect to the resolution of the issue, if any. Any applicable accounting guidelines or other materials may be included with the submission. If required by the Expert, on a day determined by the Expert on or before the 10^th day after the notice to the Expert, the Parties shall meet with the Expert at a place in Houston, Texas, determined by the Expert and shall make such presentation and/or shall answer such queries as the Expert shall determine. The Expert shall render his or her decision within 24 hours of the conclusion of such meeting or, if no such meeting is required by the Expert, on or before the 10^th day after the notice to the Expert, it being understood that the Expert shall select either the last best offer made by TWCC or the last best offer made by NRG with respect to a particular issue and that the Expert shall have no discretion to award any other relief. The Expert shall resolve each of the Submitted Issues separately and shall issue a written award (the “Award”).

     (iv) The Award issued by the Expert shall be final and binding upon the Parties without the right of appeal to the courts and judgment thereon may be entered by any court having jurisdiction thereof, unless the Expert fails to comply

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with the requirement to select a last best offer as required by Section 6.2(a)(iii) or as otherwise set forth in the Federal Arbitration Act. If the Expert fails to select a last best offer submitted by one of the Parties, then any award entered shall be invalid and the matter shall be resubmitted to arbitration.

     (v) The costs and expenses of the arbitrator(s) shall be borne by the losing Party. Any other fees and costs shall be the responsibility of the Party incurring them.

     (b) Major Disputes shall be resolved in the following manner:

     (i) The Party that wishes to appeal to an arbitration panel shall notify the other of the object of the dispute and the name of the arbitrator that it appoints.

     (ii) Within a maximum of ten (10) days after such notice, the other Party shall notify the first Party of the name of the arbitrator that it appoints. If this information is lacking at the end of the period agreed to, the interested Party shall send an application to the CPR requesting the appointment of the second arbitrator for the silent Party.

     (iii) The arbitrators so appointed shall name a third within a maximum period of fifteen (15) days as of the date of the last appointment, to chair the proceedings. If within this period no agreement is reached, this appointment should be requested to be made by the CPR.

     (iv) The aforementioned arbitration panel shall sit in Houston, Texas.

     (v) The arbitrators shall issue a written decision stating the basis for any award. The decision of the arbitrators shall be based upon the substantive laws of Texas and shall be final and binding upon the Parties without the right of appeal to the courts, except as set forth in the Federal Arbitration Act. The award rendered by the arbitration shall be final and judgment thereon may be entered by any court having jurisdiction thereof.

     (vi) The costs and expenses of the arbitration (including reasonable attorney’s fees) shall be borne by the losing Party. Any other fees and costs shall be the responsibility of the Party incurring them.

     6.3 Applicable Law and Arbitration Act. Any arbitral award hereunder shall be enforceable in any court having jurisdiction. All procedural aspects of this agreement to arbitrate, including the construction and interpretation of this agreement to arbitrate, the scope of the arbitrable issues and allegations of waiver, delay, appeals, or defenses as to arbitrability, shall be governed by and construed pursuant to the United States Arbitration Act, 9 U.S.C. 1-16 (“Federal Arbitration Act”). In deciding the substance of any such claim, dispute or disagreement, the arbitrators shall have no authority to award punitive damages under any circumstances (whether it be exemplary damages, treble damages, or any other penalty or

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punitive type of damages) regardless of whether such damages may be available under Texas law, the Parties hereby waiving their right, if any, to recover punitive damages in connection with any such claims, disputes or disagreements.

     6.4 Continuation of Services. Pending final resolution of any dispute, whether or not submitted to arbitration hereunder, TWCC and NRG shall continue to fulfill their respective obligations hereunder.

     6.5 Injunctive Relief. Notwithstanding any provision of this LSA to the contrary, each Party hereby reserves the right to seek a temporary restraining order or other injunctive relief, including an order compelling specific performance as contemplated in Section 15.9 and an order compelling compliance with the step-in rights contemplated in Section 15.10, from a court of competent jurisdiction in the event of an Event of Default or a material breach by the other Party of its obligations under this LSA in order to enforce the obligations of such other Party under this LSA during the pendency of any dispute resolution proceeding.

7. PRICE AND PAYMENT.

     7.1 Price Components. NRG shall reimburse TWCC for all costs actually incurred in mining the AOP Volumes and delivering the AOP Volumes to the Delivery Point during the Lignite Supply Term pursuant to an Approved AOP or as otherwise expressly allowed under this LSA, as more specifically set forth in Section 7.2, provided that such costs are consistent with Prudent Mining Practices (the “Mine Cost”). No cost or credit in one Cost Component shall be duplicated in another Cost Component or Capital Investment. In addition, NRG shall pay to TWCC the Management Fee as set forth in Section 7.3. The Management Fee is subject to adjustment as provided in Section 7.4.

     7.2 Mine Cost.

     (a) The Mine Cost shall be equal to TWCC’s actual cash costs for operating the Mine in a manner consistent with the Approved AOP, including the following items determined and allocated in accordance with GAAP, unless specifically agreed upon otherwise by the Parties.

     (i) Costs of mine labor and supervision, including wages and salaries, overtime, shift differentials (of miners and supervisory personnel), costs of Subcontractors and contract laborers, severance costs (only to the extent that (A) such severance costs are consistent with written plans or policies of TWCC in existence as of the Effective Date, that have been provided to NRG on or prior to the Effective Date or are otherwise consistent with amendments, supplements or modifications to such plans that have been approved by NRG, in writing, after the Effective Date and (B) such severance costs are caused directly by a material decrease in AOP Volumes that is not consistent with the Mine Plan (including NRG’s exercise of its Supply Suspension rights under subsection 3.3 of this LSA), but in no event shall severance costs associated with terminating employees at or in anticipation of the end of the Lignite Supply Term be Mine Costs), payroll taxes (including social security taxes, workers’ compensation, and

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other taxes levied by local, state, and federal governmental bodies on wages and salaries) and fringe benefits (including holidays, vacations, sick leave, long-term disabilities costs, health, welfare and group insurance plans, and (subject to the provisions of Section 7.2(e)) pension benefits and post-retirement medical benefits, and other fringe benefits generally provided in the coal and lignite mining industries, in each case to the extent that such fringe benefits are consistent with written plans or policies of TWCC in existence as of the Effective Date that have been provided to NRG on or prior to the Effective Date or are otherwise consistent with amendments, supplements or modifications to such plans that have been approved by NRG, in writing, after the Effective Date); provided, however, that any unfunded pension obligations with respect to TWCC employees as of the Effective Date shall remain the obligation of TWCC and NRG shall have no liability therefor;

     (ii) Materials and supplies, including consumables expended or consumed in the mining, processing, and/or delivery of lignite and in the performance of reclamation (including Final Reclamation) activities, costs of maintenance and repair of equipment and facilities reasonable and necessary to the operation of the Mine, costs of electric power, including both consumption of electricity and costs associated with electricity infrastructure, consumed in the course of mining, processing, and/or delivery of lignite and in the performance of reclamation (including Final Reclamation) activities, costs of tools, machinery, and equipment uncapitalized that are consumed in the course of mining, processing, and/or delivery of lignite and in the performance of reclamation (including Final Reclamation) activities;

     (iii) Lease and/or rental costs (inclusive of applicable interest) for vehicles, equipment and machinery reasonable and necessary to the operation of the Mine and located at the Mine;

     (iv) Local, state, and federal taxes, including production taxes and ad valorem taxes (imposed on the real and personal property of TWCC necessary to the operation of the Mine) but excluding income taxes and franchise taxes;

     (v) Royalties, overriding royalties, advance royalties (provided that royalties are paid in advance only to the extent required by the terms of the applicable lease), rentals, damage payments payable under the terms of surface and mineral leases, subject to this LSA, and other costs or payments required to acquire and maintain necessary leases for lignite mineral rights, surface rights, rights-of-way, and water rights payable to third parties (but not to TWCC or its Affiliates or NRG or its associates);

     (vi) Administrative and general expenses, including salaries, wages and related fringe benefits for non-coal producing Mine management, supervisory, technical and clerical employees of TWCC directly supporting the Mine, including functions for general mine management, human resources, legal (including outside counsel expenses directly related to providing service to NRG

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or administration of the Mine) land management, permitting and regulatory compliance, engineering, sales and contract management and administration, and clerical support among others, whether or not located at the Mine, including costs of office supplies and travel and training costs;

     (vii) Mine overheads, including all costs for permitting, regulatory compliance, and engineering, insurance, and bonding; and

     (viii) a corporate support allowance for each Year in the amount set forth for such Year in Exhibit 7 (the “Corporate Support Allowance”), allocated in equal semi-monthly installments to each invoice issued in accordance with Section 7.6(a).

     (b) The Mine Costs shall be reimbursed semi-Monthly in accordance with Section 7.6(a). TWCC shall supply underlying documentation, satisfactory to NRG, supporting all capital expenditures, and documentation supporting other costs shall be made available for audit.

     (c) The Corporate Support Allowance referred to in Section 7.2(a)(viii) shall be the sole compensation payable for the services specified in Exhibit 7 as being covered by the Corporate Support Allowance, and no additional Mine Costs therefor shall be reimbursable under Section 7.2(a)(vi) or any other provision of this LSA.

     (d) Mine Costs shall include cash accruals incurred by TWCC, including the following:

     (i) all unrecouped pre-paid royalties for the privilege of conducting mining operations on the property of a third party which have been paid prior to the commencement of the Lignite Supply Term by TWCC shall be treated as a Mine Costs at such time as such royalty would have been payable from lignite production (i.e., had such royalties not been paid in advance) and appropriate accounting entries are made for the expensing of such prepaid amount; and

     (ii) the cost of any equipment and parts inventory purchased by TWCC existing as of the Effective Date shall be treated as Mine Costs (at an amount equal to the lower of cost or market) at such time as the equipment or part is taken from inventory and utilized in the Mining Work.

     (e) The pension benefits and post retirement medical benefits referred to in Section 7.2(a)(i) shall be fixed at (i) $1,990,000 in the aggregate for 2008 and shall be payable in equal semi-monthly installments at the time each invoice is paid pursuant to Section 7.6(a) and (ii) the total wages paid to pension eligible employees multiplied by a pension and post-retirement medical benefits factor of 8.35% in all future Years.

     (f) Notwithstanding anything herein to the contrary, the following are specifically excluded from Mine Costs and remain the liability of TWCC with no right to collect any portion thereof from NRG: (i) any liabilities or obligations of TWCC (or any

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of its Affiliates) incurred prior to the commencement of the Lignite Supply Term, except as otherwise provided herein; (ii) any noncash items, including depletion, amortization, and depreciation, except as otherwise provided herein, (iii) any interest costs not specifically approved by NRG except for interest costs related to any equipment that is currently or in the future (if approved by NRG) procured on a capital lease basis, (iv) costs for obsolete warehouse inventory purchased by TWCC prior to the Effective Date, (v) any costs for terminating or cancelling any equipment leases entered into as contemplated in Exhibit 9, (vi) any costs, including all attorneys fees and other litigation costs incurred as a result of the negligence, gross negligence or willful misconduct of TWCC; (vii) any penalty or fine imposed by any Governmental Authority for a failure of TWCC to comply with any applicable Law (unless arising out of NRG’s failure to comply with its express contractual obligations regarding funding Final Reclamation activity) unless incurred at the express direction of NRG, (viii) any amounts payable to any Affiliate of TWCC (other than the Corporate Support Allowance and those amounts specified in Exhibit 7 as being paid in addition to the Corporate Support Allowance) and not expressly approved as such in the relevant AOP, (ix) any costs related to any dispute resolution pursuant to Section 6 of this LSA or other litigation between TWCC (or any of its Affiliates) and NRG, (x) any costs related to financing activities involving TWCC (or any of its Affiliates) or pledge of the assets of TWCC (or any of its Affiliates), (xi) any costs related to negotiation of this LSA or any other agreement or document between TWCC (or any of its Affiliates) and NRG, (xii) any liabilities or obligations related to the bankruptcy or insolvency of TWCC (or any of its Affiliates) and (xiii) costs and expenses expressly excluded or beyond limits expressly provided by this Section 7.2.

     7.3 Management Fee. For each Year during the Lignite Supply Term, NRG shall pay to TWCC a fee (the “Management Fee”) equal to the product of the number of Tons of lignite delivered in such Year multiplied by either (a) [****] or (b) if the Post Execution Savings Actions are not timely implemented, then the lower amount as described in Exhibit 9, escalated annually from January 1, 2008 (such that the first adjustment is applied as early in 2009 as information is available), based on the annual increase in the U.S. Gross Domestic Product Implicit Price Deflator (“GDP-IPD”) published by the Bureau of Economic Analysis of the United States Department of Commerce, using the first published index values for each Fourth Quarter (October, November and December) with Fourth Quarter 2007 as the base index value (as so escalated from time to time, the “Fee Per Ton”), subject to the adjustments set forth in Section 7.4 hereof; provided, however, that if the AOP Volumes for any Year are reduced by one or more Change Orders to an amount less than 80% of the AOP Volumes as stated in the original Approved AOP for such year, TWCC shall be entitled to a Management Fee based on AOP Volumes equal to 80% of such originally approved AOP Volumes, but subject to adjustment in all respects as provided in this Agreement. For each semi-Monthly period during such Year, NRG shall pay TWCC in accordance with Section 7.6(a) an amount equal to the product of the number of Tons of lignite delivered in such semi-Monthly period multiplied by applicable Fee Per Ton, but subject to the adjustments set forth in Section 7.4 hereof.

     7.4 Adjustments. NRG shall pay to TWCC, or TWCC shall pay to NRG, as may be applicable, the following adjustments to the Fee Per Ton during the Lignite Supply Term.

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     (a) Cost Incentive Adjustment. Fee Adjustment Basis AOP’s shall be approved as set forth below to be the bases against which to compare actual Mine Costs for the determination of Cost Incentive Adjustments, as follows:

     (i) Fee Adjustment Basis AOP. On or before the 10^th Business Day of each Year, commencing with 2009, TWCC shall prepare and deliver to NRG a proposed adjustment to the Approved AOP applicable to the prior Year (such adjustment to the AOP being called the “Fee Adjustment Basis AOP”) which shall reflect (1) the actual unit cost for Commodities incurred by TWCC during the immediately preceding Year in accordance with Section 7.4(a)(ii); (2) changes in the Mining Work resulting from any Change Orders; (3) any Mining Work in the Approved AOP not actually performed; and (4) changes in the Mining Work as otherwise provided in this LSA. On or before the 10^th Business Day after receipt from TWCC of the proposed Fee Adjustment Basis AOP, NRG shall have the right to propose changes to the proposed Fee Adjustment Basis AOP, and if NRG does so propose such changes, the Parties shall discuss and cooperate in good faith to reach a mutual agreement on the Fee Adjustment Basis AOP. If the Parties have not agreed on the Fee Adjustment Basis AOP on or before the 10^th day after TWCC’s receipt of NRG’s proposal, either Party shall have the right to refer the determination of the Fee Adjustment Basis AOP to the Mining Expert in accordance with Section 6.2(a). The Fee Adjustment Basis AOP as ultimately agreed to by the Parties or determined by the Mining Expert shall be the Fee Adjustment Basis AOP for such Year for purposes of the Management Fee adjustments pursuant to this Section 7.4(a).

     (ii) Commodities. Adjustments shall be made in the Fee Adjustment Basis AOP’s so that Cost Incentive Adjustments shall not be affected by changes in the actual unit costs of Commodities incurred by TWCC (whether incurred through Capital Investments, operating expenses, or other costs) in comparison to Approved AOP’s. Such adjustments shall be as provided in below.

     (A) Electricity and Diesel. The unit costs projected for electricity and diesel in the Approved AOP for any Year shall be adjusted in the Fee Adjustment Basis AOP for such Year to reflect any differences in unit costs between the unit costs reflected in the Approved AOP and the actual unit costs incurred by TWCC. The AOP adjustment will be the difference between actual average unit costs incurred and the expected unit costs in the Approved AOP multiplied by the original units in the Approved AOP. No adjustments will be made for changes in unit volumes.

     (B) Tires. Each Approved AOP shall contain a total tire budget (“Tire Budget”) consisting of categories of tires, the number of tires to be procured in each category, and the projected cost per tire in each category. The costs per tire in each category in the Approved AOP for any Year shall be adjusted in each Fee Adjustment Basis AOP in such Year to reflect the actual average costs per tire in each category as

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actually incurred by TWCC. In addition, in the event that TWCC purchases up to ten percent (10%) more tires or ten percent (10%) fewer tires than the total number of tires in the Tire Budget in a given Approved AOP, the Fee Adjustment Basis AOP for such Year shall be adjusted to reflect the total cost for such overage or underage, as the case may be, of up to ten percent (10%). There shall be no adjustment(s) in the Fee Adjustment Basis AOP for tire procurement overages or underages, as the case may be, exceeding ten percent (10%) of the total number of tires in the Tire Budget in a given Approved AOP, unless such tire procurement overages or underages were first approved by NRG in a Change Order. An example of the foregoing calculation is set forth in Exhibit 18.

     (C) Steel. Each Approved AOP shall contain a steel budget (“Steel Budget”) calculated as (1) seventy percent (70%) of budgeted wear component costs, and (2) fifty percent (50%) of budgeted parts costs. The Steel Budget in the Approved AOP for any Year shall be adjusted in each Fee Adjustment Basis AOP in such Year to reflect the difference in the inflation rate assumed in the Steel Budget versus the percent change in the Steel Index, which shall be the PPI-Steel Mill Products, U.S. Bureau of Labor Statistics Series Id WPU1017 Not Seasonally Adjusted, Group: Metals and metal products, Base Date: 8200, first published index value (the “Steel Index”), as follows. The average Steel Index value for each calendar Quarter shall be compared to the Steel Index value for July of the prior Year to arrive at a percent change per Quarter. The percent changes per Quarter in the Steel Index shall be averaged and compared to the percent increase assumed in the Approved AOP. If the Steel Index average is greater than the inflation rate assumed in the Approved AOP, the Steel Budget shall be increased in the Fee Adjustment Basis AOP by the difference in the respective percentages. If the Steel Index average is less than the inflation rate assumed in the Approved AOP, the Steel Budget shall be decreased in the Fee Adjustment Basis AOP by the difference in the respective percentages. An example of the foregoing calculation is set forth in Exhibit 18.

     (iii) Annual Adjustment Amount. If the Mine Costs for any Year paid to TWCC in accordance with Section 7.2 hereof exceed 103% of the total Mine Costs budgeted in the Fee Adjustment Basis AOP for that Year, then an adjustment amount equal to one-half of such excess, but not to exceed a total adjustment amount of [***] per Ton of lignite delivered by TWCC to NRG during such Year, shall be payable by TWCC to NRG as set forth in Section 7.4(a)(iv). If the total Mine Costs budgeted in the Fee Adjustment Basis AOP exceed 103% of the Mine Costs for the applicable Year paid to TWCC in accordance with Section 7.2 hereof, then an adjustment amount equal to one-half of such excess, but not to exceed a total adjustment amount of [***] multiplied by the lesser of (A) the total number of Tons of lignite delivered by TWCC to

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NRG during such Year and (B) the total number of Tons included in the original Approved AOP applicable to such Year, without taking into account any Change Orders shall be payable by NRG to TWCC as set forth in Section 7.4(a)(iv) provided, however, such total number of Tons shall take into consideration any Change Order, if NRG has requested unreasonably low AOP Volumes and then later implemented a Change Order for the purpose of depriving TWCC of any Adjustment Amounts. The amount payable by TWCC to NRG or by NRG to TWCC in accordance with this Section 7.4(a)(iii) is referred to herein as the “Cost Incentive Adjustment”.

     (iv) Payment of Adjustment Amount. If NRG is the Party obligated to pay such Cost Incentive Adjustment, then the Cost Incentive Adjustment shall be paid together at the time the next semi-monthly invoice is paid in accordance with Section 7.6(a). If TWCC is the Party obligated to pay such Cost Incentive Adjustment, then the Cost Incentive Adjustment credited against the next semi-monthly invoice or invoices until such time as such Cost Incentive Adjustment has been fully recovered by NRG through such credits.

     (v) Sample Calculations. Attached hereto as Exhibit 17 are sample calculations relating to the Cost Incentive Adjustment.

     (b) Monthly Inventory Adjustment. The “Monthly Inventory Adjustment” is calculated as follows:

     (i) For each of the Months of December 2007 through April 2008, the Monthly Inventory Adjustment shall be calculated by reducing the Monthly Fee for each such Month by an amount equal to the product of the Monthly Fee for such Month multiplied by 0.10% for each 1.00% by which the measured actual Month-end inventory for such Month is less than the respective stated amounts: December 31, 2007, 170,000 Tons; January 31, 2008, 187,200 Tons; February 29, 2008, 204,400 Tons; March 31, 2008, 221,600 Tons; and April 30, 2008, 238,800 Tons.

     (ii) Thereafter, the Monthly Inventory Adjustment for each Month shall be calculated by reducing the Monthly Fee for such Month by an amount equal to the product of such Monthly Fee multiplied by 0.10% for each 1.00% by which the measured actual average Month-end inventory for the greater of such Month or the average of such Month and the previous two Months is less than one twenty-sixth of the AOP Volumes for the Year then in effect (or such smaller inventory target as NRG may elect in its sole discretion to approve in an Approved AOP). NRG shall receive a credit against the Management Fee in the next semi-Monthly invoice or invoices until such time as such Monthly Inventory Adjustment has been fully recovered by NRG through such credits.

     (iii) “Monthly Fee” shall mean, for any Month during the Lignite Supply Term, the product of the Fee Per Ton multiplied by the number of Tons of lignite delivered in such Month.

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     (c) Btu Adjustment. TWCC shall be subject to Premiums and Penalties, in addition to reject penalties, based upon the As Received Btu content of lignite delivered, as provided below (the “Btu Adjustment”).

     (i) Btu Adjustments shall be based on seven (7) day rolling averages weighted by delivered Volumes (“Rolling Average”), and calculated by multiplying the Daily Fee on the seventh day of the Rolling Average by 0.1% for each 1 Btu per pound by which the Rolling Average Btu content is either more than 300 Btu per pound above (“Premium”) or more than 300 Btu per pound below (“Penalty”) the target Btu of 6,500 Btu per pound, As Received, for volumes delivered on such seventh day of the Rolling Average.

     (ii) In addition to the Rolling Average Premium and Penalty Btu Adjustments above, TWCC shall be subject to a Btu reject quality penalty, which shall be calculated by multiplying [***] per Ton by the total Tons delivered on each Delivery Day in which the weighted average Btu content of the lignite so delivered is less than 6,000 Btu per pound, As Received and by multiplying an additional [***] per Ton by the total Tons delivered on each Delivery Day in which the weighted average Btu content of the lignite so delivered is less than 5,800 Btu per pound, As Received.

     (iii) “Daily Fee” shall mean, for any calendar day during the Lignite Supply Term, the product of the Fee Per Ton multiplied by the number of Tons of lignite delivered on such day; and

     (iv) The Btu Adjustment for a given Month shall be summed and if the resulting sum is a credit, NRG shall pay TWCC the resulting amount along with the next invoice. If the resulting sum is a debit, NRG shall receive a credit on the next invoice or invoices until such time as such resulting amount has been fully recovered by NRG through such credits.

     (d) Each Party hereby stipulates that the payment obligations set forth in Section 7.4(a), 7.4(b), and 7.4(c) are reasonable in light of the anticipated harm and the difficulty of estimation or calculation of actual damages. Each Party hereby waives the right to contest such payments as an unreasonable penalty.

7.5 [Intentionally Omitted.]

7.6 Invoices.

     (a) NRG Payments to TWCC. TWCC shall prepare invoices and submit such invoices to NRG on the first (1^st) business day of each Month and on the first business day after the sixteenth (16^th) calendar day of each Month (or, if earlier, ten (10) Business Days prior to the end of such Month), and, assuming timely receipt of such invoices, NRG shall use commercially reasonable efforts to make payments on or before the fifteenth (15^th) day (or, if such day is not a Business Day, the next Business Day) and the last Business Day of each Month to TWCC by wire transfer or other usual and customary

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means as TWCC may direct in writing to NRG from time-to-time. Invoices shall be in the form attached hereto as Exhibit 8. TWCC shall invoice separately for capital costs and non-capital operating expenses. For the avoidance of doubt, invoices for capital costs shall be on a full cash basis, rather than a depreciated or amortized basis. Late payments shall bear interest at a rate per annum equal to the Interest Rate. In the event that NRG disputes the amount of any invoice, NRG shall render payment for the full amount of such invoice when such payment would otherwise be due under this Section 7.6(a); provided, however, that NRG shall be entitled to withhold payment any portion of the invoiced amount other than for Mine Costs to the extent it disputes such amounts in good faith. With respect to disputed invoiced amounts or payments, NRG shall notify TWCC in writing within fourteen (14) calendar days of receipt of the disputed invoice stating the reason for such dispute, and such dispute shall be settled by the respective representatives of the Parties or as provided in Section 6.

     (b) TWCC Payments to Third Parties. TWCC shall promptly pay all valid accounts and indebtedness incurred in connection with the operations of the Mine so that no lien can be sustained against the Mine or equipment or facilities employed at the Mine; provided that TWCC shall have the right to contest any such lien by proceedings that do not prejudice title to the Mine or equipment and facilities employed at the Mine. NRG shall not be liable to reimburse TWCC for penalties or charges assessed against TWCC for late payment(s) to vendors or contractors.

8. DELIVERY AND TITLE; SCHEDULING; STOCKPILE MANAGEMENT; NO LIENS.

     8.1 Delivery; Title.

     (a) Title to and risk of loss of the lignite purchased and sold under this LSA shall pass from TWCC to NRG at the time such lignite is delivered at the Delivery Point.

     (b) TWCC hereby warrants title to all lignite delivered by TWCC during the Term pursuant to this LSA and the right to sell the same to NRG, free and clear of all liens and other encumbrances. TWCC shall indemnify and hold NRG harmless from any and all Claims of every kind resulting from or arising out of any breach of this warranty.

     8.2 Scheduling. Consistent with the Approved AOP, TWCC and NRG shall cooperate in scheduling daily, weekly, and Monthly deliveries of AOP Volumes in order to accommodate NRG’s fuel requirements and consistent with TWCC’s abilities to meet such requirements. Such AOP Volumes shall be scheduled on a TBtu basis. The Parties shall also cooperate in the same manner in notifying each other in advance of scheduled outages or downtime in order to avoid unnecessary inconvenience and delay and to facilitate efficient use of said downtime. TWCC shall maintain the capability of reasonably continuous delivery of AOP Volumes as provided under each Approved AOP, and NRG shall maintain the capability of reasonably continuous receipt of such AOP Volumes; provided, however, that the Parties acknowledge that unloading of trains delivering boiler fuel acquired from other suppliers may temporarily restrict NRG’s ability to receive lignite from the Xxxxxx Mine, and such restriction

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shall not constitute a failure to maintain the capability of reasonably continuous receipt of AOP volumes.

     8.3 Mine Lignite Inventory. The Parties recognize the need to maintain substantial lignite inventory at the Mine.

     (a) TWCC shall conduct Mine Stockpile and pit inventory surveys once each Month during the Lignite Supply Term. The survey process shall include on the ground measurement of the profile of the lignite, engineering estimates of lignite density, and calculations of the tonnage in each location. TWCC shall report Mine Stockpile and in-pit inventories to NRG on a weekly and Monthly basis.

     (b) Throughout the Lignite Supply Term, TWCC shall use best efforts to maintain, subject to Prudent Mining Practices, a target total lignite inventory of no less than one twenty-fourth of the AOP Volumes for the Year then in effect.

     8.4 No Liens.

     (a) Creation of Liens. TWCC shall not directly or indirectly create, incur, assume, or suffer to be created by it or any subcontractor, employee, laborer, materialman, or other supplier of goods or services any Lien on the Mine, the Reserves, any mining equipment owned, used, or held for use by TWCC and/or procured with NRG funds, or any part thereof or interest therein (a “TWCC Lien”), except for liens of carriers, warehousemen, landlords, mechanics, vendors, laborers, and materialmen arising solely by operation of law incurred in the ordinary course of business for sums not yet due or being diligently contested in good faith, other than the Liens created by the Mortgage and Security Agreement, and TWCC shall pay or discharge and discharge of record any TWCC Lien or other charges that, if unpaid, might be or become a TWCC Lien, if any such TWCC Lien has been of record for more than 120 days (or earlier if it creates an imminent risk of foreclosure resulting therefrom) or is, when added to all other TWCC Liens, in excess of $1,000,000. TWCC shall immediately notify the LEGS Representative of the assertion of any TWCC Lien.

     (b) Indemnity from Liens. TWCC shall indemnify, defend, and hold harmless the NRG Group from and against TWCC Liens and, provided that TWCC is being paid on a current basis pursuant to this LSA, all other claims, demands, and causes of action in connection with any subcontractor’s provision of design, labor, materials, equipment, supplies, and/or services under this LSA.

     (c) Discharge of Liens. Upon the failure of TWCC to promptly pay, discharge, or provide security reasonably acceptable to NRG for any TWCC Lien within thirty (30) days of notice of the existence thereof from any source, NRG may, but shall not be obligated to, pay or discharge such TWCC Lien and, upon the payment or discharge thereof, shall be entitled to immediately recover from TWCC the amount thereof together with expenses incurred by it in connection with such payment or discharge or to set off all such amounts against any such sums owed by NRG to TWCC.

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9. WEIGHTS; SAMPLING AND ANALYSIS; LIGNITE QUALITY.

     9.1 Weights. The lignite delivered hereunder shall be weighed upon delivery to the Delivery Point by TWCC using equipment and procedures agreed upon by the Parties. TWCC shall conduct semi-annual (or more frequently as needed) belt scale tests and calibrate said equipment as necessary to maintain an accuracy consistent with then-current standards set forth in Handbook 44 published by the National Institute of Standards and Technology (or any successor to such handbook or such agency), and furnish copies of such calibration reports to the LEGS Representative. A Ton shall be the unit of measurement. NRG shall have the right to check the accuracy of said equipment and procedures used in weighing the lignite and calibrating said equipment, and the right to have a representative present at the calibration and weighing. If upon calibration any scale is are found to be in error by an amount greater than 0.25%, such scale shall be recalibrated for future shipments and the amount of lignite delivered during the period affected by such error or inaccuracy shall be corrected. The Parties shall agree upon the total weight of lignite delivered hereunder since the date of the last calibration and TWCC shall charge or credit NRG, as appropriate, for one half of the difference in weight of lignite measured by the scale in question, including any adjustments to prior periods. Should the Parties fail to agree within ninety (90) days of the discovery of the error upon the allowable error in calibration or the total weight of lignite delivered since the last calibration, the matter shall immediately be submitted to dispute resolution for determination pursuant to Section 6.

     9.2 Sampling and Analysis.

     (a) At least one (1) representative sample from the Delivery Point from each day’s shipment of lignite shall be taken by TWCC and delivered to an independent third party laboratory mutually agreed upon by the Parties (the “Independent Lab”) for analysis. The Independent Lab shall analyze the daily samples from the Delivery Point and shall promptly submit a copy of the report to NRG and TWCC. Sampling and analysis shall be performed in accordance with then-current ASTM standards and procedures, or such other methods as the Parties may agree upon. NRG shall have the right to have a representative present to observe the sampling, and both NRG and TWCC shall have the right to have a representative present to observe the analysis.

     (b) The Independent Lab shall divide each daily sample into no less than (4) parts. The first part shall be tested by the Independent Lab per Section 9.2(a). The second, third, and fourth parts shall be stored in suitable airtight containers in each case to be held available by the Independent Lab for a period of at least sixty (60) calendar days after the end of the Month in which such sample was taken.

     (c) One part of each sample shall be for NRG’s analysis; one part shall be available for TWCC’s analysis.

     (i) If either Party takes exception to the Independent Lab’s analysis of the first part within sixty (60) calendar days after the end of the Month in which such sample was taken, then such Party shall send a notice of exception to the other Party and both Parties shall direct the Independent Lab to analyze such Party’s portion of the applicable sample. Each Party hereto assumes the cost of

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analysis of its respective sample. The Independent Lab shall average the results of the analysis of the original sample and the analyses of the Parties’ samples. The Independent Lab shall then disregard the result farthest from the resulting average of the three samples, and shall then average the remaining two results. Such resulting average shall be provided to both Parties and shall be deemed conclusive.

     (ii) If no Party takes exception to the Independent Lab analysis within sixty (60) calendar days after the end of the Month in which such sample was taken, the Independent Lab’s analysis shall be deemed conclusive.

     9.3 Lignite Quality.

     (a) The lignite shall be of a quality consistent with the reserve computer modeling projections of the Mine Plan, as modified from time to time, and shall in any event meet the quality requirements set forth in Exhibit 10, unless the Parties otherwise agree. Such lignite shall be reasonably free of partings and extraneous materials and TWCC shall otherwise comply with the provisions of Sections 9.3(b) and 9.3(c). Unless stated otherwise, all qualities identified in this LSA shall be determined on a weighted average Delivery Day As Received basis.

     (b) Each Approved AOP shall contain TWCC’s best estimate of the ferric oxide content of the lignite to be mined in such year. TWCC shall use commercially reasonable efforts to deliver lignite during any hour of such day with ferric oxide content that does not exceed 13.00%, dry basis ash, based on the sampling and analysis program in effect on the Effective Date.

     (c) Each Approved AOP shall contain TWCC’s best estimate of the sulfur content of the lignite to be mined in such year. TWCC shall use commercially reasonable efforts to deliver lignite on each day with sulfur content that does not exceed 5.00 pounds sulfur dioxide (SO₂) per MMBtu.

10. REPORTING.

     10.1 Production Reporting. TWCC shall provide each of the following reports in an electronic format approved by NRG:

     (a) Daily Reports. TWCC shall, prior to 8:00 a.m. on each day, deliver to NRG a written report describing the Mining Work carried out by TWCC during the previous day, which report shall include the following:

     (i) the Tons delivered for the day and the estimated quality of such Tons;

     (ii) details of the operational or maintenance status of the draglines;

     (iii) details of any accidents and incidents occurring in carrying out the Mining Work whether involving lost time, injury or otherwise;

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     (iv) details of any breakdowns or failure of equipment or facilities; and

     (v) climatic conditions encountered.

     (b) Monthly Reports. TWCC shall, not later than ten (10) Business Days following each Month, deliver to NRG a written report describing the Mining Work carried out by TWCC during the previous Month, which report shall include the following:

     (i) a production summary covering period production statistics and equipment availability/performance and cumulative year to date statistics, as shown on Exhibit 13;

     (ii) monthly cost reports by mining function as shown on Exhibit 14;

     (iii) staffing report, salaried and hourly employees;

     (iv) reports required by any Governmental Authority;

     (v) a report on major maintenance activities;

     (vi) safety report;

     (vii) environmental audit report;

     (viii) report on current reclamation;

     (ix) report on production and sale of lignite tonnage for each lease;

     (x) report on lignite quality;

     (xi) report on lignite inventory; and

     (xii) any other reports requested from time to time by NRG for monitoring of the Mining Work.

     (c) Variance Reports. TWCC shall, not later than fifteen (15) Business Days following the end of each Month and each Quarter, provide the detailed budget and variance information as set forth in Exhibit 15.

     (d) Other Reports and Information. TWCC shall prepare and deliver to NRG such other written reports and information regarding the Mine, lignite reserves, the Mine Plan, and the Mining Work as NRG shall reasonably request from time to time. In addition, TWCC shall work with NRG to provide information to enable joint use of web-based tools to facilitate monitoring of mining progress.

     (e) Financial and other Reports. TWCC shall provide to NRG all reports and notices that TWCC or Xxxxxxxxxxxx Mining LLC provides to any lender to

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Xxxxxxxxxxxx Mining LLC, allowing redaction or omission of any and all information specific to any Xxxxxxxxxxxx Mining LLC subsidiary other than TWCC.

11. LAND AND MINERAL LEASES.

     11.1 Subleases. NRG and TWCC agree to, and do hereby ratify and confirm the Subleases.

     11.2 Lignite Leases. NRG has subleased part of the Reserves to TWCC pursuant to the Subleases, thereby granting to TWCC the possessory interest in such leases. The Subleases provide that TWCC shall assume the obligations of the primary leases, and that TWCC shall maintain those leases in good standing. For the purposes of this LSA, primary leases are defined as those instruments executed by the owner of the lignite reserves, under the authority of which the reserves are to be mined. Such lignite shall be produced only in furtherance of the purposes of this LSA, and the Subleases shall terminate at such time as this LSA is terminated or expires. TWCC shall not cause or allow any Liens or claims to attach to the interests covered by the Subleases other than Liens or claims resulting from the actions of NRG. NRG waives any and all royalty claims on production and/or sales and any other payment from its interests in fee property, lignite leases and lignite royalties within the Mine. The parties agree that NRG can file amendments of record to the Subleases to reflect the provisions of this Section 11.2.

     11.3 Houston Lignite Royalty. TWCC shall not be obligated to pay the overriding royalty reserved in that certain Assignment of Coal and Lignite Leases, dated August 31, 1979 by and between The Dow Chemical Company (f/k/a Destec now d.b.a. Houston Lignite), as Assignor and Houston Lighting & Power Company, now NRG, as Assignee, recorded in Volume 540, Page 518, of the Official Records of Freestone County, Texas. NRG shall have the obligation to satisfy this overriding royalty.

     11.4 Percentage Royalty Leases. With respect to all leases held by TWCC wherein the royalty payable to the lessor(s) is to be calculated based on a percentage of proceeds received by TWCC, such royalties shall be calculated in accordance with the royalty calculation methodology set forth in that certain Information Provided To Xxxxxx Mine Percentage Leases Royalty Owners Regarding Calculation Of Royalties Under Percentage Leases In Connection With Royalty Proposal attached hereto as Exhibit 16, or as established by a valid enforceable court decree. TWCC shall also include the calculation of such percentage royalties any amounts paid by NRG with respect to the Houston Lignite Royalty in accordance with Section 11.3 above. NRG shall provide TWCC on a Quarterly basis, for the purpose of calculating the percentage royalties, the cost component for the return on and return of the mining equipment and mining facilities owned by NRG at the Mine, and any amounts paid by NRG with regard to the Houston Lignite Royalty.

     11.5 Surface Use Agreement. NRG and TWCC agree that the Surface Use Agreement by and between Houston Lighting & Power Company, now NRG and Northwestern Resources Co., now TWCC, dated February 12, 1998 and recorded in Volume 987, Page 803, of the Deed Records of Freestone County (the “Surface Use Agreement”) continues to be in full force and effect unless terminated by the provisions contained therein.

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12. FINAL RECLAMATION.

     12.1 Final Reclamation.

     (a) Final Reclamation shall include any and all reclamation and remediation obligations of TWCC at the Mine as required under any Permit issued by any Governmental Authority, any state, federal or local law, regulation or rule, or otherwise. Final Reclamation of the Mine will be required at the end of its useful life, upon termination of lignite deliveries pursuant to Section 3.2, and/or in areas where all lignite deliveries have ceased prior to the end of lignite deliveries from the Mine as a whole. Final Reclamation costs are categorized as final pit restoration, facility removal, and post-mine management. Final pit costs are the costs incurred for the reduction of the final highwall, regrade of spoil/spoils, drainage reconstruction, topsoil replacement, rebuilding of public and private roads and facilities, and revegetation of the final pit areas. Facility removal costs are the costs associated with the removal and reclamation of permanent facilities such as buildings, haul roads, rail lines, power lines, ponds, crushing facilities, other infrastructure, etc. Post mine management costs are the costs incurred for erosion control, water control, monitoring, and management of reclaimed lands which includes agricultural activities required until final bond release. TWCC shall from time to time at the request of NRG and in each AOP include a reclamation plan, reclamation schedule, and estimate of Final Reclamation costs based on the Mine Plan, which plan and cost estimates shall be sufficient to substantiate accrual and liability estimates under the applicable regulations of the Securities and Exchange Commission.

     (b) NRG shall be responsible for the payment of the Final Reclamation and shall have the right to approve all costs associated therewith and the schedule of work related thereto, subject to the requirements of Law, the Permits and prudent practices. If, however, (i) this LSA shall terminate as a result of a Special TWCC Default Termination, and (ii) TWCC has not completed the Security Document Delivery prior to such termination, NRG shall be relieved of any further obligation regarding Final Reclamation and the Final Reclamation obligation shall become the responsibility of TWCC.

     12.2 NRG Obligation to Pay and Hold Harmless. Except as provided in Section 12.1(b), NRG shall be responsible for all of the costs of Final Reclamation and shall reimburse TWCC for such costs pursuant to invoices delivered in accordance with Section 7.6(a) and shall otherwise indemnify and hold TWCC harmless against any costs or claims related to Final Reclamation liabilities, in each case other than costs or claims arising through the negligent acts or omissions by TWCC in the course of performing its Final Reclamation obligations hereunder.

     12.3 Cost of Final Reclamation to Include Contract Fee. The cost of Final Reclamation paid by NRG shall include a profit component to TWCC equal to [*]% of the actual costs incurred by TWCC for work performed by TWCC (as opposed to work performed by any subcontractor to TWCC) in performing all Final Reclamation; provided, however, that no profit component shall be paid if (a) NRG has terminated the Lignite Supply Term by January 1, 2010, and (b) Security Document Delivery has not occurred prior to such termination. For the avoidance of doubt, TWCC shall comply with the requirement to minimize Mine Costs when deciding whether such work shall be performed by TWCC or a subcontractor.

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     12.4 Reclamation Bonds.

     (a) TWCC shall maintain in full force and effect and/or replace such bonds and in such amounts as it has provided to the RCT on or prior to the Effective Date, including third-party bonding in the amount of approximately $26,000,000 and self-bonding (supported by the corporate guarantee referred to in Section 12.4(b)(i)) in the amount of approximately $50,000,000 (the “Current Bonding Level”) to secure TWCC’s reclamation obligations under its mining permits for the Mine.

     (b) NRG shall (i) maintain and/or replace the corporate guarantee provided under Article G, subsection 1, of the Settlement Agreement for TWCC’s self-bonding included within the Current Bonding Level and (ii) provide to the RCT any and all additional bonds, additional bond amounts or bond collateral over and above the Current Bonding Level (the “Additional Bonds”) that are necessary to secure TWCC’s reclamation obligations under TWCC’s mining permits for the Mine, unless and until a Special TWCC Default Termination has occurred. In the event that a Special TWCC Default Termination has occurred, NRG shall have the right to withdraw any credit support for any Current Bonding Level obligation, and TWCC shall as soon as is commercially practical replace such credit support (including with additional third-party bonds) and any Additional Bonds provided by NRG. The Additional Bonds may be provided in any form permitted by the RCT regulations.

     (c) If any Special TWCC Default Termination occurs and Security Document Delivery has not occurred prior to such termination, any Additional Bond is forfeited or there is otherwise a drawing under such Additional Bond and NRG incurs any reimbursement obligation in connection therewith, then TWCC shall (i) immediately reimburse the issuer of such Additional Bond for the amount of such forfeiture or drawing and (ii) defend and indemnify NRG against any and all claims by any such issuer of such Additional Bond in connection with any such forfeiture or drawing.

13. FORCE MAJEURE.

     13.1 Effect; Notice; Obligation to Mitigate.

     (a) If either Party (a “Non-Performing Party”) is rendered unable by Force Majeure to carry out, in whole or part, its obligations (other than the obligation to make payments then due or becoming due with respect to performance prior to the event) under this LSA, such Non-Performing Party shall give notice orally to the other Party as soon as reasonably practicable, followed within five Business Days thereafter by a written notice setting forth, in reasonable detail, the cause or causes constituting such Force Majeure. The obligations of the Party affected by such Force Majeure (other than the obligation to make payments then due or becoming due with respect to performance prior to the event) shall be suspended to the extent made necessary, and for no longer than is required, by the cause or causes constituting such Force Majeure.

     (b) The Non-Performing Party shall initiate and continue commercially reasonable good faith efforts to remedy the Force Majeure with all reasonable dispatch;

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provided, however, that the settlement of strikes, lockouts or other labor disputes shall be totally within the sole discretion of the Non-Performing Party.

     (c) In the event of partial Force Majeure which reduces the ability or capacity of TWCC to mine or deliver lignite to NRG, or reduces the ability or capacity of NRG to receive or transport lignite, or reduces the ability or capacity of LEGS to utilize lignite, then to such extent the Non-Performing Party is able to continue its operations, it shall do so. However, nothing in the foregoing shall require the Party affected by such partial Force Majeure to continue its operations if to do so would, in its sole discretion, place its employees in any jeopardy or constitute a violation of Law.

     (d) In the event of a Force Majeure event at LEGS that prevents LEGS from utilizing lignite or reduces LEGS’ ability or capacity to utilize lignite, such event shall excuse NRG’s obligations to take delivery of lignite hereunder.

     13.2 Lignite Deliveries.

     (a) Deficiencies in shipments or deliveries that are due to Force Majeure shall not be made up except as the Parties mutually agree.

     (b) Notwithstanding any provision in this LSA to the contrary, during any period when Force Majeure claimed by TWCC results in a reduction of lignite deliveries under this LSA, NRG shall have the right, in its sole discretion, to purchase lignite from other sources to satisfy the operational requirements of LEGS.

14. WAIVERS AND REMEDIES.

     14.1 Non-Waiver. The failure of any Party to insist in any one or more instances upon strict performance of any of the provisions of this LSA or take advantage of any right hereunder shall not be construed as a waiver of any such provisions or their relinquishment of any such right, but the same shall continue and remain in full force and effect.

     14.2 NO CONSEQUENTIAL DAMAGES. EXCEPT TO THE EXTENT INCLUDED WITHIN THE REMEDIES SET FORTH IN SECTIONS 15.3, 15.5, OR 15.7, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST REVENUES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE; PROVIDED, HOWEVER, THAT THIS SECTION SHALL NOT LIMIT AN INDEMNIFIED PARTY’S RIGHT TO INDEMNIFICATION FOR ANY SUCH DAMAGES THAT THE INDEMNIFIED PARTY IS LEGALLY REQUIRED TO PAY TO A THIRD PARTY AS A RESULT OF A CLAIM OR PROCEEDING.

15. DELIVERY FAILURE; EVENTS OF DEFAULT.

     15.1 Delivery Failure. Any of the following events shall constitute a “Delivery Failure”:

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     (a) TWCC fails during any period of seven (7) consecutive Delivery Days to deliver lignite with total weighted average lignite quality values for heat content and sulfur equal to or greater than 6,000 Btus per pound or equal to or less than six (6) pounds SO₂ per MMBtu;

     (b) TWCC fails to deliver at least 80% of the then-current delivery schedule for any rolling 30-day period, or 90% of the then-current delivery schedule for any Quarter, or 98% of the then-current delivery schedule for any calendar year (with such figures calculated on a Btu basis); or

     (c) TWCC gives notice to NRG of any potential or actual Delivery Failure.

     15.2 Notice of Delivery Failure. Whenever a Delivery Failure occurs, TWCC will provide NRG with notification specifying the details of the cause and extent of the Delivery Failure, TWCC’s mitigation plan to mitigate and remedy the Delivery Failure, and the expected duration of the Delivery Failure.

     15.3 Remedies for Delivery Failure. In the event of a Delivery Failure NRG shall have the right to exercise all rights and remedies to it in accordance with applicable law. Without limiting the generality of the foregoing, if as a result of a Delivery Failure NRG either (a) purchases replacement fuel to cover lignite not delivered or not conforming to quality specifications or (b) curtails or reduces power deliveries from LEGS, TWCC shall be liable for payment of compensatory damages to NRG in the amount of one or more of the following:

     (i) To the extent replacement fuel is purchased (including replacement fuel consisting of inventories on hand acquired from other suppliers), the excess of the cost (including purchase price and procurement and delivery costs) of such replacement fuel on a heat content basis over the average per MMBtu cost for lignite invoiced over the preceding twelve (12) calendar months (for the avoidance of doubt, NRG shall have the right to cover any delivery shortfalls through the purchase of replacement fuels at its sole discretion, but damages are payable only when the NRG makes purchases to replace fuel that was not delivered (or outside quality ranges) in a Delivery Failure);

     (ii) To the extent power deliveries from LEGS are curtailed or reduced and such power sales are covered by purchases of power made by NRG, the excess of the cost of such purchases of power over the variable cost of generation of a like amount of power at LEGS; or

     (iii) To the extent power deliveries from LEGS are curtailed and such power sales are not covered or replaced, the amount of all damages and penalties incurred by NRG as a result of the failure to deliver such quantities of power plus the amount of profits of NRG foregone as a result of such failure to deliver such quantities of power.

Notwithstanding the foregoing, if, in accordance with prudent practices in the power industry and reasonable management of its fuel stockpile NRG can use replacement fuel on hand instead

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of curtailing or reducing power deliveries from LEGS, NRG shall use all reasonable efforts to do so.

     15.4 TWCC Events of Default. The following events shall each be a “TWCC Event of Default”:

     (a) Any failure by TWCC to pay compensatory damages following a Delivery Failure in accordance with Section 15.3 or any failure by TWCC to pay any other amounts it is required to pay within thirty (30) days of when due to NRG under this LSA, and in either case such failure is not cured by or on behalf of TWCC within fifteen (15) days of written notice from NRG to TWCC demanding such cure;

     (b) Any failure by TWCC to comply with a mitigation plan required by Section 15.2 following a Delivery Failure;

     (c) Any Delivery Failure consisting of a failure to deliver lignite with total weighted average lignite quality values for heat content and sulfur equal to or greater than 6,000 Btus per pound or equal to or less than six (6) pounds per SO₂ per MMBtu over a period of ten (10) consecutive days or a failure to deliver at least 75% of 1/12^th of the then-current AOP Volumes over any rolling 30-day period

     (d) Any failure by TWCC to comply in any material respect with the AOP and the other standards of performance set forth in Section 2.2 of this LSA, unless TWCC has cured such failure on or before the 10^th day after notice thereof by NRG;

     (e) Any material inaccuracy in any representation or warranty made by TWCC herein or in the Mortgage and Security Agreement or in any representation or warranty made by Xxxxxxxxxxxx Coal Company or Xxxxxxxxxxxx Mining LLC in either a Guaranty or the Xxxxxxxxxxxx Pledge Agreement;

     (f) Any failure by TWCC to perform any of its obligations hereunder (including operating the Mine in material violation of permit requirements or applicable governmental requirements) not specifically referred to in the other provisions of Section 15.1 or this Section 15.4, any failure by Xxxxxxxxxxxx Coal Company or Xxxxxxxxxxxx Mining LLC to perform any of its obligations under either a Guaranty or the Xxxxxxxxxxxx Pledge, unless in any such case such failure has been cured on or before the 20^th day after notice thereof by NRG or such cure has been initiated and is being diligently pursued; provided that such cure is effected within forty-five (45) days from the receipt of such notice by TWCC, Xxxxxxxxxxxx Coal Company, or Xxxxxxxxxxxx Mining LLC, as applicable (or, notwithstanding the foregoing, such shorter period of time as may be necessary to avoid the payment of penalties or the loss of any permit, authorization, license, or concession);

     (g) Failure of a Guaranty, the Mortgage and Security Agreements, or the Xxxxxxxxxxxx Pledge Agreement to be in full force and effect after the date executed, or Xxxxxxxxxxxx Coal Company or Xxxxxxxxxxxx Mining LLC repudiates or denies liability under or seeks to terminate any of a Guaranty, the Mortgage and Security

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Agreements, or the Xxxxxxxxxxxx Pledge Agreement or seeks to have any thereof found to be, or claims that any thereof is, void or of no force and effect;

     (h) Bankruptcy of TWCC, Xxxxxxxxxxxx Mining LLC, or Xxxxxxxxxxxx Coal Company;

     (i) TWCC, Xxxxxxxxxxxx Mining LLC, or Xxxxxxxxxxxx Coal Company fails to pay any indebtedness for borrowed money owed by such Person in excess of fifty thousand dollars ($50,000) in aggregate principal amount or any interest or premium thereon when due or within any applicable grace period specified in the agreement or instrument related to such indebtedness (provided that, unless the failure to pay any such amount has the effect of accelerating the maturity of such indebtedness, such failure to pay shall not be a TWCC Event of Default if TWCC, Xxxxxxxxxxxx Mining LLC, or Xxxxxxxxxxxx Coal Company is disputing in good faith its obligation to pay such amounts); or any other material default under any agreement or instrument relating to any such indebtedness, or any other event, occurs and continues after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate the maturity of such indebtedness; or any such indebtedness is declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof;

     (j) a final judgment or judgments shall be entered against TWCC, Xxxxxxxxxxxx Mining LLC, or Xxxxxxxxxxxx Coal Company in the aggregate amount of five hundred thousand dollars ($500,000) or more individually and in the aggregate (net of insurance proceeds) (other than (i) a judgment which is fully covered by insurance or discharged within thirty (30) days after its entry, or (ii) a judgment, the execution of which is effectively stayed within thirty (30) days after its entry but only for thirty (30) days after the date on which such stay is terminated or expires) or that could reasonably be expected to constitute a material adverse effect;

     (k) immediately, if the LSA (or any portion thereof) is repudiated by TWCC or shall for any reason cease to be valid, binding and enforceable;

     (l) if TWCC fails to make prompt payment of undisputed invoices due to Subcontractors or for materials or labor or otherwise repudiates or is in default with respect to any of its obligations to any Subcontractor and such failure, repudiation, or default would reasonably likely be expected to have a material adverse effect on (i) the ability of TWCC to perform its obligations under the LSA, or (ii) the Mine and such failure is not cured on or before the 20^th day after the earlier to occur of notice by NRG to TWCC of such failure or TWCC becoming aware of such failure.

     15.5 Remedies Following a TWCC Event of Default. Upon the occurrence of a TWCC Event of Default, NRG shall have the right to exercise any and all rights available to it under applicable law, including, but not limited to, the following:

     (a) Terminate the Lignite Supply Term (or the LSA as provided in Section 3.1);

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     (b) Make and pursue a claim for compensatory damages arising from such TWCC Event of Default and any termination of the LSA or Lignite Supply Term arising therefrom;

     (c) Make and pursue a claim under a Guaranty;

     (d) Exercise remedies under the Mortgage and Security Agreement and/or the Xxxxxxxxxxxx Pledge Agreement;

     (e) The remedy of specific performance; and

     (f) Exercise step-in rights in accordance with Section 15.10.

     15.6 NRG Event of Default. The following events shall be “NRG Events of Default”:

     (a) the Bankruptcy of NRG;

     (b) the failure by NRG to pay within thirty (30) days of when due all amounts owed to TWCC and not disputed in good faith by NRG, and such failure is not cured by or on behalf of NRG within fifteen (15) days of written notice from TWCC to NRG demanding such cure;

     (c) if there is a material breach by NRG of any representation or warranty made by NRG herein; or

     (d) if there is a material failure by NRG to perform its non-payment obligations hereunder, unless NRG has cured such breach on or before 20^th day after notice thereof by TWCC or NRG has initiated and is diligently pursuing the cure of such breach and thereafter continues to diligently pursue such cure; provided that such cure is effected within forty-five (45) days from the receipt of such notice by NRG.

     15.7 Remedies Following an NRG Event of Default. Upon the occurrence of an NRG Event of Default, TWCC shall have the right to exercise any and all rights available to it under applicable law. Without limiting the generality of the foregoing, upon the occurrence of an NRG Event of Default, TWCC may terminate this LSA and collect the following amounts from NRG: including, but not limited to, the following

     (a) any amounts due and payable to TWCC under the LSA prior to the date of such termination; and

     (b) the actual cost of completing Final Reclamation.

     15.8 Payment. Damages determined under this Section 15 shall be payable within thirty (30) days after the terminating Party calculates and submits the calculations, including workpapers and documentation, to the other Party.

     15.9 Specific Performance. TWCC acknowledges and agrees that because of the unique value to NRG of and the special nature of the Mining Work TWCC is obligated to render

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to NRG hereunder, a TWCC Event of Default hereunder will cause irreparable harm to NRG that cannot be calculated and remedied solely through the payment of monetary damages, and accordingly TWCC agrees that the remedy of specific performance is an appropriate remedy for a TWCC Event of Default.

     15.10 Step-In Rights. Without limiting the generality of any other provisions for remedies for a TWCC Event of Default, TWCC hereby agrees that, upon the occurrence of a TWCC Event of Default that could reasonably be expected to result in material loss or liability to NRG, NRG shall have the right (but not the obligation) to retain a qualified contractor (“Independent Contractor”) (which could be an affiliate of NRG) to take possession of the Mine to operate the Mine at NRG’s cost and to resume or continue deliveries of lignite from the Mine to LEGS. If NRG chooses to retain an Independent Contractor, TWCC will fully cooperate in connection with retaining such Independent Contractor. The Independent Contractor would operate the Mine and perform the obligations of TWCC under this LSA for the remainder of the Term, or for such period of time as NRG believes is appropriate, provided however, that:

     (a) NRG may not seek damages from TWCC as a result of any breach by the Independent Contractor of any term of this LSA;

     (b) NRG shall continue to have the obligation to pay all current reclamation and Final Reclamation associated with the Mine (until such time, if any, as a Special TWCC Default Termination occurs);

     (c) The Independent Contractor will conduct its operations as a “contract operator” under and in compliance with TWCC’s applicable mining permits and licenses or under an alternative permitting arrangement that is consistent with Law and, if necessary, approved by the Texas Railroad Commission, and TWCC shall cooperate with NRG and the Independent Contractor to obtain any regulatory approvals required;

     (d) TWCC shall make available to the Independent Contractor for its use in performing the Mining Work the vehicles, machinery, and other mining equipment owned by TWCC and previously used in connection with performing the Mining Work;

     (e) TWCC and NRG will cooperate to ensure proper transition of the Mine and of TWCC’s vehicles, machinery, and equipment to the use of the Independent Contractor, and to that end will cooperate with TWCC’s lenders (if any), lessors (including mineral lessors), regulators, and/or any other party claiming a right in TWCC assets, or the power to direct the use or disposition of TWCC’s assets;

     (f) TWCC shall cooperate with NRG or the Independent Contractor regarding the provision of employees, and NRG and the Independent Contractor shall conduct all operations in accordance with all applicable regulatory permits and laws, including labor laws and (if applicable) collective bargaining agreements; and

     (g) NRG’s obligation to make payments of any kind under this LSA shall cease upon the retention of the Independent Contractor, except for any amounts properly

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due and owing and any claims pending as of the date of retention of the Independent Contractor, and except as otherwise provided in this Section 15.10.

     15.11 Mitigation. Each Party shall act reasonably to mitigate its damages in the event of a breach of this LSA by the other Party, including a Delivery Failure, TWCC Event of Default, and NRG Event of Default. When calculating compensatory damages, if the remedy described in Section 15.10 is exercised by NRG, the following factors shall be taken into account, (i) the reasonableness of the fee payable to the Independent Contractor, taking into consideration the fee paid to TWCC at the time of exercise of the remedy and the bids received from other contractors, (ii) the market value of any royalties payable to TWCC in connection with any reserves in the Mine owned by TWCC at the time of the Event of Default which are expected to be mined during the period covered by the exercise of the remedy described in Section 15.10, (iii) the value of any supplies owned by TWCC that are transferred to the Independent Contractor, and (iv) such other factors as may be equitable under the circumstances.

     15.12 Effect of Termination. Sections 2.2, 5.9, 6, 8.4, 12, 14, 17, 19 and 27.7 shall survive any termination of this LSA, notwithstanding that such termination may have arisen from an Event of Default; provided, however, that the obligations of NRG under Section 12.2 shall not survive a Special TWCC Default Termination, unless a Security Document Delivery has been previously completed.

16. REPRESENTATIONS AND WARRANTIES.

     16.1 TWCC Representations and Warranties. TWCC represents and warrants to NRG that:

     (a) it is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and is qualified to conduct its business in those jurisdictions necessary to perform this LSA;

     (b) it has or reasonably expects to have all material Permits necessary for it to perform its obligations under this LSA;

     (c) the execution, delivery and performance of this LSA are within its powers, have been duly authorized by all necessary action and do not violate any of the terms or conditions in its certificate of incorporation, bylaws or other governing documents or any contract to which it is a party or by which any of its properties is bound or any law, rule, regulation, order, writ, judgment, decree or other legal or regulatory determination of any Governmental Authority applicable to it;

     (d) this LSA constitutes the legal, valid and binding obligation of TWCC, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, bankruptcy reorganization, receivership and other Laws affecting creditors’ rights generally, and with regard to equitable remedies, to the discretion of the court before which proceedings to obtain same may be pending;

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     (e) no bankruptcy, insolvency, bankruptcy reorganization, receivership or other similar arrangement proceedings are pending or being contemplated by it or, to its knowledge, threatened against it;

     (f) no suits, proceedings, judgments, rulings or orders by or before any Governmental Authority that could reasonably be expected to materially adversely affect the ability of such Party to perform this LSA are pending or, to its knowledge, threatened or contemplated;

     (g) TWCC has or, immediately prior to delivery to NRG, will have, good title to all lignite delivered to NRG, free and clear of all liens, adverse claims and encumbrances, including all royalties, taxes, black lung fees, and pension reserves; and

     (h) TWCC is in material compliance with all laws and regulations regarding the mining, transportation and sale of lignite.

     16.2 NRG Representations and Warranties. NRG represents and warrants to TWCC that:

     (a) it is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and is qualified to conduct its business in those jurisdictions necessary to perform this LSA;

     (b) it has all material Permits necessary for it to perform its obligations under this LSA;

     (c) the execution, delivery and performance of this LSA are within its powers, have been duly authorized by all necessary action and do not violate any of the terms or conditions in its limited partnership agreement or other governing documents or any contract to which it is a party or by which any of its properties is bound or any law, rule, regulation, order, writ, judgment, decree or other legal or regulatory determination of any Governmental Authority applicable to it;

     (d) this LSA constitutes the legal, valid and binding obligation of NRG, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, bankruptcy reorganization, receivership and other Laws affecting creditors’ rights generally, and with regard to equitable remedies, to the discretion of the court before which proceedings to obtain same may be pending;

     (e) no bankruptcy, insolvency, bankruptcy reorganization, receivership or other similar arrangement proceedings are pending or being contemplated by it or, to its knowledge, threatened against it; and

     (f) no suits, proceedings, judgments, rulings or orders by or before any Governmental Authority that could reasonably be expected to materially adversely affect the ability of such Party to perform this LSA are pending or, to its knowledge, threatened or contemplated.

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     16.3 Reliance. Each of the Parties acknowledges that it has entered into this LSA and is contracting for the lignite to be supplied by TWCC and purchased by NRG in reliance upon the express representations and warranties set forth in this LSA and not upon any other representations or warranties of the other Party hereto.

17. INDEMNITIES.

     17.1 TWCC Indemnity. TWCC shall indemnify and hold harmless NRG Group from any Claim resulting from or attributable to (a) TWCC’s breach of any representation or warranty contained or failure to perform any obligation herein, or (b) TWCC’s negligence or willful acts or omissions or such acts or omissions of its employees or agents.

     17.2 NRG Indemnity. NRG shall indemnify and hold harmless TWCC Group from any Claim resulting from or attributable to (a) NRG’s breach of any representation or warranty contained herein or failure to perform an obligation, or (b) NRG’s negligence or willful acts or omissions or such acts or omissions of its employees or agents.

18. ASSIGNMENT.

     Neither Party may assign or otherwise transfer (collectively, an “Assignment”) this LSA or any of its rights or obligations hereunder, in whole or in part, without the prior written consent of the other Party, and any purported Assignment made without such prior written consent shall be void. Notwithstanding the foregoing, no such consent shall be required where the Assignment is (a) to a successor in interest of all or substantially all of the assets of such Party by way of merger, consolidation, sale of substantially all of its assets, divestiture pursuant to an order or decree of a court, or similar corporate reorganization; (b) to an affiliated corporate entity; or (c) to a purchaser of LEGS. No such Assignment shall be effective unless and until such assignee shall assume in writing all of the obligations of the assignor hereunder and under any related agreements.

19. GOVERNING LAW.

     This LSA shall be governed by, and construed and enforced in accordance with, the laws of the State of Texas.

20. NOTICES AND REPORTS.

     Any notice or other communication required or permitted under this LSA shall be in writing and effective upon receipt if hand-delivered or sent by certified mail, postage pre-paid, return receipt requested, by commercial overnight delivery service, or by facsimile transmission (provided a conforming copy is mailed the same day and any facsimile copy sent after 5:00 p.m. central time on a Business Day, or on a day that is not a Business Day, shall not be effective until the next Business Day).

     If directed to NRG, notices and other communications shall be sent to the following:

NRG Texas Power LLC
Attn: Lignite Manager, Limestone Station

-00-

Xxxxx 0, Xxx 00
Xxxxxx, XX 00000
Fax: (000) 000-0000

     With a copy to:

NRG Texas Power LLC
Attn: General Counsel
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000

     If directed to TWCC, notices and other communications shall be sent to the President of TWCC at:

Texas Xxxxxxxxxxxx Coal Co.
0000 XX 00 Xxxxx
X.X. Xxx 000
Xxxxxx, Xxxxx 00000
Attn: President/General Manager
Fax: (000) 000-0000

With a copy to:

Xxxxxxxxxxxx Coal Company
0 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000

     The Parties shall further designate to each other, in writing at the earliest time practicable after the Effective Date, the names and contact information for emergency representatives in the event of non-availability of the representatives named above. Either Party may change its contact information by giving notice of such change to the other Party as above.

21. RECORDS.

     NRG shall have the right at all reasonable times to examine the records kept by TWCC concerning this LSA. NRG shall have the right to assign accounting personnel in a supervisory capacity to review the accounting policies and procedures followed by TWCC and to perform general audit functions in a commercially reasonable manner.

22. EXISTING EQUIPMENT AND ASSETS; OPERATIONS THROUGH DECEMBER 31, 2007.

     22.1 Existing Equipment and Assets. NRG agrees to make available to TWCC for use in the performance of the Mining Work the vehicles, machinery and other equipment owned by

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NRG that is currently being used at the Mine and such other items of equipment as are acquired by NRG in accordance with this LSA for use in the Mining Work. TWCC shall maintain such vehicles, machinery, and equipment in reasonable condition and in accordance with Prudent Mining Practices. When TWCC and NRG together determine that any such vehicles, machinery, or equipment is no longer needed at the Mine, TWCC shall return or make available to NRG such equipment, vehicles, or equipment. NRG shall have a reasonable right to inspect and monitor the use and maintenance of the vehicles, machinery, and equipment made available by NRG to TWCC.

     22.2 Operations through December 31, 2007. To assure that the Mine is properly maintained through the remainder of 2007, TWCC agrees to (i) operate the Mine and to maintain all vehicles, machinery, and equipment utilized at the Mine in a manner that is consistent with the Prior LSA, Prudent Mining Practices, the preliminary 2008 AOP, and the Approved AOP for 2008, and (ii) conduct and complete all reclamation obligations in accordance with the Prior LSA, Prudent Mining Practices, and all applicable Permits and Laws. Additionally, TWCC agrees that all maintenance of vehicles, machinery, and equipment utilized at the Mine, whether owned by TWCC, owned by NRG, or leased, will be conducted in accordance with the maintenance schedule attached to this LSA as Exhibit 19. NRG shall have the right to conduct an audit of the Mine and such vehicles, machinery, and equipment at any and all reasonable times to determine TWCC’s compliance with the foregoing obligations, provided that such audit does not unreasonably interfere with the operation of the Mine and is in compliance with all safety Laws and requirements.

23. UNION PACIFIC RAIL SPUR.

     TWCC agrees to cooperate with and accommodate NRG’s activities, including siting, land acquisition, permitting, design and construction activities, in connection with the siting, design, construction, operation and maintenance of a rail spur routed generally southward from LEGS to the Union Pacific Railroad mainline through lands forming a part of the Mine that are not suitable for future lignite mining by TWCC. Such cooperation and accommodation shall include taking reasonable steps to help make or secure any necessary filings with or approvals of the RCT with respect to a post-mining land use of any such impacted properties that is compatible with the existence, operation and maintenance of such rail spur. NRG agrees that it shall reimburse TWCC as Mine Costs for all direct out-of-pocket costs and expenses reasonably incurred by TWCC in providing the cooperation and accommodation required under this Section 23, provided that TWCC shall have, to the extent possible, first notified NRG of the need to incur such costs and NRG shall have approved in writing such costs prior to their incurrence, such approval not to be unreasonably withheld.

24. EMPLOYMENT; SUBCONTRACTORS.

     24.1 Nondiscrimination. NRG and TWCC warrant and represent that they are Equal Opportunity Employers, and in the performance of this LSA, they shall not engage in any conduct or practice that violates any applicable law, order or regulation prohibiting discrimination against any person by reason of his or her race, color, religion, national origin, sex or age.

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     24.2 TWCC Personnel; Subcontractors.

     (a) TWCC shall appoint an individual representative who shall have general supervisory authority over the Mine and the Mining Work (the “Mine Manager”). NRG shall be entitled to rely upon the authority of the Mine Manager to act on behalf of, and to commit, TWCC with regard to all matters under this LSA (other than modification of this LSA). Any orders, notices, or instructions given to the Mine Manager shall be deemed to have been given to TWCC. The Mine Manager shall act on behalf of TWCC as the principal interface with the LEGS Representative with respect to day-to-day operational matters.

     (b) Within ten (10) days after TWCC selects any replacement of the Mine Manager, TWCC shall notify NRG and provide the replacement Mine Manager’s qualifications to NRG. NRG shall within ten (10) days after receipt of the replacement Mine Manager’s qualifications submit in writing to TWCC any objections as to the qualifications of the replacement Mine Manager. The NRG Representative and the TWCC Representative shall meet to attempt to resolve the concerns raised by NRG. If the representatives are unable to reach agreement, then the issue of whether the replacement Mine Manager is qualified shall be resolved as a Minor Dispute pursuant to Section 6.2(a).

     (c) TWCC shall provide and make available the Mine Manager and all professional, supervisory and managerial personnel as are required to carry out the Mining Work. Such personnel shall be qualified and experienced in the duties to which they are assigned and shall be capable of carrying out the Mining Work in accordance with Prudent Mining Practices. All individuals employed by TWCC in the performance of the Mining Work shall be the employees of TWCC or its Subcontractor. TWCC shall retain sole responsibility with respect to labor matters in connection with carrying out the Mining Work. With respect to hiring of personnel and its employment policy, TWCC shall comply with all applicable labor and employment Laws and shall exercise control over labor relations in a reasonable manner consistent with the intent and purpose of this LSA.

     (d) TWCC may have any part of the Mining Work carried out by Subcontractors pursuant to written subcontracts between TWCC and such Subcontractors. TWCC shall be solely responsible for the engagement, supervision, and management of such Subcontractors. The creation of any Subcontractor relationship shall not (i) relieve TWCC of any of its obligations under this LSA, (ii) relieve TWCC of its responsibility for Mining Work carried out by any such Subcontractor, or (iii) create any relationship between NRG and any Subcontractor. Insofar as reasonably practicable, NRG shall communicate with any Subcontractor only through TWCC. In no event shall any Subcontractor be an Affiliate of TWCC, nor shall any Subcontractor make any payment or provide any other thing of value (other than the services to be provided under the subcontract or pursuant to arms-length unrelated transactions) to TWCC or any Affiliate thereof unless such amount is deducted from Mine Costs.

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     (e) No Subcontractor is intended to be, nor shall any Subcontractor be deemed to be, a third-party beneficiary of this LSA. As a condition of any subcontract and to the extent permitted by applicable Law, TWCC shall require any Subcontractor to waive any claim it might have, in law or equity or otherwise, directly or indirectly, against NRG, including any right of such Subcontractor to place a lien or similar encumbrance upon the Mine or other property of NRG. TWCC shall in all of its contracts pertaining to operations require all Subcontractors to perform their services in connection with operations of the Mine in accordance with Prudent Mining Practices.

     24.3 Reimbursement. Notwithstanding anything to the contrary in this LSA, in no event shall NRG be liable to reimburse TWCC for costs related to liability to its current or former employees or contractors for employer liability (e.g., wrongful termination, sexual harassment, failure to supervise, etc.) or failure to pay or otherwise honor contractual or statutory commitments.

25. RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES.

     NRG shall not be liable for and TWCC shall not seek reimbursement for any expenditure related to a transaction between TWCC and any affiliate of TWCC unless (a) such proposed transaction (including the material terms thereof) was disclosed to NRG in writing and (b) NRG approved such transaction in writing.

26. WARRANTY DISCLAIMER.

     TWCC MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS TO THE FITNESS OF THE LIGNITE SUPPLIED HEREUNDER FOR A PARTICULAR PURPOSE AND DISCLAIMS ALL WARRANTIES AND REPRESENTATIONS OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS LSA.

27. MISCELLANEOUS PROVISIONS

     27.1 Entire Agreement. This LSA, the Surface Use Agreement, and the Subleases constitute the entire understanding and agreement between the Parties with respect to the subject matter hereof, and, except as provided below, all prior agreements, understandings, or representations with respect to its subject matter are hereby canceled in their entirety and are of no further force and effect, except that the Prior LSA has been amended and restated in its entirety as this LSA. From and after 11:59 p.m. on December 31, 2007, the provisions of the Prior LSA shall be of no further force and effect and neither Party shall be liable under the provisions thereof, except (i) for defaults arising prior thereto, and (ii) for the provisions thereof that are amended and restated as obligations hereunder, which provisions include the provisions of Article G, Reclamation, subsections 1 and 2, of the Settlement Agreement that are restated in Exhibit 20 (“Subsections G1 and G2”). TWCC and NRG (and their respective predecessors in interest under the Prior LSA) shall continue (as part of this LSA) to have the same rights and obligations as existed under the Prior LSA with respect to Subsections G1 and G2, except as such rights and obligations of TWCC and NRG are modified as provided in Article 12 (which modifications shall benefit their respective predecessors in interest under the Prior LSA but shall

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not be construed to impose greater obligations thereon) and except that the process for the determination and payment of Final Reclamation costs shall be as provided in Section 12 and the other relevant provisions hereof (including the AOP process).

     27.2 Amendments or Modifications. No amendment, modification, or change of this LSA shall be binding upon the Parties unless and until such amendment, modification, or change is in writing and executed by the Parties.

     27.3 Severability. If any provision of this LSA shall be adjudicated to be invalid, illegal, or unenforceable, then such provision shall be considered severed from the rest of this LSA, and the remaining provisions shall continue in full force and effect as if the invalid provision had not been included.

     27.4 Construction. No understandings or agreements not expressly stated herein shall be binding on the Parties in the construction or fulfillment hereof unless such understandings or agreements are reduced to writing and signed by the respective parties. The rule of construction that ambiguous provisions shall be interpreted against the drafter shall not apply to this LSA.

     27.5 No Third-Party Beneficiaries. This LSA shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. This LSA is not intended to, and shall not, create rights, remedies, or any benefits of any character whatsoever in favor of any Person other than the Parties.

     27.6 Remedies Cumulative. Except as otherwise specifically provided herein, each remedy provided for under this LSA shall be taken and construed as cumulative and in addition to every other remedy provided for herein or available at law or in equity.

     27.7 Confidentiality. Each Party shall maintain the terms of this LSA in confidence and shall not disclose any information concerning the terms, performance or administration of this LSA to any other Person; provided that (a) either Party may disclose such information: (i) to any of such Party’s Group, (ii) to any prospective member of such Party’s Group, and (iii) to any Person providing or evaluating a proposal to provide financing to the recipient Party or any direct or indirect owner of such Party and (b) NRG or TWCC may provide copies of this LSA, with pricing information redacted, to purchasers or potential purchasers of LEGS or the Mine, as the case may be, or all or any portion of the electric output from LEGS; provided in each case that the recipient Party shall provide to each Person to which disclosure is made a copy of this Section 27.7 and direct such Person to treat such information confidentially, and the recipient Party shall be liable for any breach of the terms of this Section 27.7 by such Persons to which it makes any such disclosure. The foregoing restrictions will not apply (A) to information that is or becomes generally available to the public otherwise than as a result of disclosure by the recipient Party, (B) to information that is already in, or subsequently comes into, the recipient Party’s possession, provided that the source of such information was not, to the recipient Party’s knowledge, obligated to keep such information confidential, or (C) to information that is required to be disclosed pursuant to Law or stock exchange rules and regulations or is otherwise subject to legal, judicial, regulatory or self-regulatory requests for information or documents. If either Party is required to disclose any information required by this Section 27.7 to be maintained as confidential in a judicial, administrative or governmental proceeding, such Party shall give the

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other Party at least ten (10) Business Days’ prior written notice (unless less time is permitted by the applicable proceeding) before disclosing any such information in any said proceeding and, in making such disclosure, the Party required to disclose the information shall disclose only that portion thereof required to be disclosed and shall take all commercially reasonable efforts to preserve the confidentiality thereof, including obtaining protective orders and supporting the other Party in intervention. Nothing contained herein shall obligate either Party to disclose to the other Party any information that would be prohibited from disclosure under confidentiality agreements with third parties, including licenses; and any such information shall only be disclosed to the other Party after appropriate confidentiality agreements have been entered into or appropriate consents obtained.

     27.8 Policies and Procedures. The Parties shall cooperate in good faith and use reasonable efforts to agree on, within one hundred eighty (180) days of the Effective Date, a detailed policies and procedures manual for the activities and operations contemplated by this LSA (provided that any failure to so agree shall not affect the rights or obligations of either Party hereunder, and that this LSA shall control over any contrary provisions in such policies and procedures).

     27.9 Captions. The captions to the Sections of this LSA are for convenience of reference only and shall not be taken or construed to define or limit any of the terms or provisions of this LSA.

     27.10 Counterparts. This LSA may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Delivery of the executed signature pages by facsimile transaction will constitute effective and binding execution and delivery of this LSA.

     27.11 Binding Signatures. This LSA shall not be binding on either Party hereto unless executed by both Parties hereto. NRG’s signature shall no longer be valid and binding on NRG if on or before September 28, 2007: (i) this LSA is not executed by TWCC, (ii) the Guaranty and related letter agreement are not executed by Xxxxxxxxxxxx Coal Company and (iii) each of (i) and (ii) are not delivered to NRG by October 1, 2007.

[Remainder of Page Intentionally Left Blank. Signature Pages Begin on Next Page.]

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     IN WITNESS WHEREOF, the Parties, through their duly authorized representatives, have executed this LSA effective as of the date first written above.

		TEXAS XXXXXXXXXXXX COAL CO.
		By:		/s/ Xxxxxx X. Xxxxxxxxxx
		Name:		Xxxxxx X. Xxxxxxxxxx
		Title:		President

[Signature Page to Lignite Supply Agreement]

		NRG TEXAS POWER LLC
		By:		/s/ Xxxx Xxxx
		Name:		Xxxx Xxxx
		Title:		President

[Signature Page to Lignite Supply Agreement]

EXHIBIT 1

Mine

[Exhibit 1 consists of a two-page graphic depiction of the Mine.]

Exhibit 1 — Page 1

Exhibit 2

Mine Plan Insert

While this Mine Plan is specific with regard to qualities and quantities of lignite available, annual quantities of lignite to be mined and sold, the mining sequence by and in each area, the projected mining costs and the equipment and staffing resources to be employed, the Parties recognize this information is based on projections and that details herein may be subject to adjustment in an Approved AOP.

XXXXXXXXXXXX COAL COMPANY

14th Floor, 0 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxx Xxxxxxx, XX 00000
Phone: [719] 000-0000 • Fax: [719] 000-0000 or 5825

June 1, 0000

Xxxx Xxxx, Xxxxxxxxx
XXX Xxxxx
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000

Dear Xxxx,

As promised, I have enclosed the life of mine projections for the Xxxxxx Mine. This report was prepared by Xxxx Xxxxxx and his staff and they can certainly provide additional detail should your people need it.

This projection was prepared on the basis of maximum efficiency and, as such, actually scales down production over the remaining life of the mine to maximize use of the draglines. It is my understanding that this approach is consistent with the recommendations of consultants who were engaged to study this matter. Also, this projection assumes that approximately five million tons of reserves are not mined as they lay beneath power towers that would have to be relocated. Given the current market for coal, this is not economically feasible, but future market conditions might change that. Finally, this mine plan pushes final reclamation out to its further point possible.

The capital requirements for the mine are also detailed. Tub work on the draglines is the major expenditure listed.

Feel free to contact me if you have any questions. Xxxx and his staff would probably be more helpful.

I look forward to hearing your thoughts on the long term options that we might pursue.

Sincerely,

/s/

Xxxxx X. Xxxxxx
Chief Executive Officer

Life of Mine Cost Projection: 2008-2018

Strictly Confidential

Report Date: May 2007

Scope:

The purpose of this report is to provide an economic review and mining details for the Life of Deposit Plan (LOD) of the Xxxxxx Mine. This mine plan and cost forecast will be presented to NRG for review in the context of negotiating a long term “cost plus” lignite supply agreement. The mine plan and costing presented herein was compiled utilizing historical costs of equipment, maintenance, and the operational experience of the Xxxxxx Mine coupled with best engineering practices.

Executive Summary:

Operationally this study reflects an ascending strip ratio sequence, maximizing the use of the three 8200 and the 8750 series Xxxxxx draglines. Use of mobile stripping equipment is minimized in the LOD mine plan, which leads to a step down of annual lignite sales beginning in 2012. 89.0 TBtu is scheduled for delivery for all years 2008 through 2011; deliveries reduce to 67 TBtu in years 2012 through 2014, and further reduce to 46 TBtu for years 2015 through 2018 (The option to continue mining 89 TBtu through 2015, rather than the step down delivery schedule of the LOD remains viable; however, mining costs will increase incrementally with a larger portion of stripping being completed with mobile mining equipment. Depending on the market at the time, NRG could very well have the option to incur those additional costs and purchase larger volumes of lignite). A table of projected deliveries and mining costs (without capital dollars) are included in Table 1 below.

Table 1. Production and Operating Expense Summary

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Strip Ratio

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

Tons Sold (Mton)

6.808

6.854

6.947

6.961

5.152

5.113

5.111

3.567

3.52

3.517

3.441

TBtu Sold

89.0

89.0

89.0

89.0

67.0

67.0

67.0

46.2

46.2

46.2

46.1

Cost ($MM)

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

$/Ton

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

$/mmbtu

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

Note: All values in constant 2007 dollars.

Capital Expense:

Major civil projects for this study are primarily related to Area BX development and include the construction of haulroads, construction of one major sediment control pond, relocation of highway FM 39, along with other associated drainage projects. A table of all forecasted capital expenditures is shown in Table 2 below:

Table 2. Forecasted Capital Expenditures

($ MM)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Sediment Control

[****]

Haulroads

[****]

[****]

[****]

[****]

Relocations

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

Major Support Equipment

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

Office / Equip.

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

Land

[****]

[****]

[****]

Total Capital

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

[****]

Note: All values in constant 2007 dollars.

Table 3. Projected Depreciation Schedule for Forecasted Capital

($ MM)		2008				2009				2010				2011				2012				2013				2014				2015				2016				2017				2018				2019				2020
NRG DD&A			[****]				[****]				[****]				[****]				[****]				[****]				[****]				[****]				[****]				[****]				[****]				[****]				[****]

Note: Approximately [******] of non-depreciated NRG assets remain after 2020, primarily due to assumed dragline component life of 25-years.

Key Assumptions:

     The following key engineering assumptions were made for this mine plan.

Bonding

Current bond held for Permit 32F includes $50M secured by NRG (CenterPoint Energy) and $7.5M by TWCC. For Permit 00X, XXXX currently holds bonding of $17.5M and TWCC will acquire an additional $1M in bonding for Area F (Permit 47F) in 2007. Future bonding requirements are projected at [****] in 2008 and [****] in 2009. With a [***] collateralization required for bonding, restricted cash requirements are [****] and [****] in years 2008 and 2009 respectively.

Dragline Operations

DL25

	•		87% availability
	•		14-days of downtime per year except in 2012 when 60-days are allowed for tub replacement
	•		Maximum digging depth = 180 feet
	•		2,480 BCY per operating hour

DL26

	•		87% availability
	•		14-days of downtime per year except in 2010 when 60-days are allowed for tub replacement
	•		Maximum digging depth = 180 feet
	•		2,510 BCY per operating hour

DL27

	•		87% availability
	•		14-days of downtime per year except in 2011 when 60-days are allowed for tub replacement
	•		Maximum digging depth = 180 feet
	•		2,510 BCY per operating hour

DL28

	•		80% availability
	•		14-days of downtime per year plus 20-days in 2008 for drum hardening
	•		Maximum digging depth = 165 feet
	•		2,700 BCY per operating hour

Dragline Walks/Delays

	•		28-days allowed for DL 25 to reopen Area B-South pit, 2009
	•		45-days allowed for DL 26 to walk from Area F-North to Area BX, 2010

Mining Limits & Utility Relocations

Expanded limits within Areas BX and Area E are included. Previously planned limits for Area F-North and Area F-South are unchanged. Gas xxxxx (3 in total) located in Area BX are removed due to depletion. Relocation of a 16” aviation fuel pipeline and 138kV power line in Area E is planned and included in the capital forecast.

Miscellaneous Assumptions

	•		Quality, recovery and dilution assumptions are consistent with 2007 AMP, and historical values.
	•		All mining sequences are scheduled with dragline positions as of May 1, 2007.
	•		Water rights requirements are assumed to be granted as planned from the TCEQ.
	•		Royalties payable to NRG are not included in this cost plus projection, and those projected royalties are listed in Table 4.

Table 4. Projected NRG Royalties

($ 1000’s)		2008				2009				2010				2011				2012				2013				2014				2015				2016				2017				2018
NRG Royalties			[****]				[****]				[****]				[****]				[****]				[****]				[****]				[****]				[****]				[****]				[****]

Dragline Sequence:

The mining sequence for each dragline is shown graphically in the mine progression maps found in Appendix B. A general description of the dragline movements are described below:

	•		Dragline 25 (DL 25) is shown to move to Area B-South in 2009 from its current location in Area B-North. A 28-day delay has been assumed to allow for the required walk as well as to allow DL 25 time to clean the abandoned pit in B-South. Mining continues in B-South until 2012 when DL 25 moves to Area BX to work in tandem with DL 26. This arrangement continues until 2017 when DL 25 moves back to B-South and mines until the end of 2018.
	•		Dragline 26 is currently located in Area F-North and continues to mine this area until 2009. From Area F-North, DL 26 walks to Area BX and mines until 2018. The walk from F-North to BX is planned to take 45-days, and is included as a capital project.
	•		Dragline 27 continues to mine the Area F-South until it is mined out in 2014. At the completion of mining in X-Xxxxx, XX 00 walks to Area E replacing DL-28. DL27 continues mining in Area E through the term of the LOD, 2018.
	•		Dragline 28 continues mining in Area E through 2014, at which time DL27 takes over mining in Area E and DL-28 is retired.

Final Pit Schedule:

Reclamation of final pits generally occurs in phases, with, one or more newly created ponds, and with at least 2-years of added time to allow for water rights issues to be resolved. The following table lists the years in which final pit reclamation is forecasted.

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

C Area Phase I of II

X

D/DX Area

X

C Area Phase II of II

X

B-North Area Phase I of III

X

B-North Area Phase II of III

X

F-North Area

X

F-South Area

X

E-North Area

X

E-Mid Area

X

E-South Area

X

B-North Area Phase III of III

X

BX Area

X

B-South Area

X

Detailed Cost Report:

A detailed operating expense forecast and a detailed capital scheduled is provided in Appendix A. All costs are in constant 2007 dollars.

Mine Plan Sequence Maps:

LOD Mine Plan sequence maps are provided in Appendix B.

Appendix A: Operating Expense and Capital Forecast

Appendix B: Mine Plan Sequence Maps

Texas Xxxxxxxxxxxx Coal Co.
2007 Life of Deposit Capital Forecast
Detail Report for Years 2008 — 2018

2007 Constant Dollars

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Total

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

SEDIMENT CONTROL

Construct Pond 36

[******]

[******]

BX1 Diversion

[******]

[******]

Total Sediment Control

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

HAUL ROADS

[******]

BX-1 Haul Road

[******]

[******]

BX-2 Haul Road

[******]

[******]

[******]

DL27 Walkway (F-South to E)

[******]

[******]

[******]

X-0 Xxxx Xxxx

[******]

[******]

XX00 Xxxxxxx (X-XX)

[******]

[******]

DL26 Walkway (F-BX)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Haul Roads

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

RELOCATIONS

Magellan 16” Pipeline

[******]

[******]

FM 39 Relocation:

[******]

Construction

[******]

[******]

SWB Telephone Reloc

[******]

[******]

NAV Elec 12.5 Kv Reloc

[******]

[******]

SWB Fiber Optic Reloc

[******]

[******]

Brazos Valley 138Kv Reloc

[******]

[******]

Enbridge:

[******]

6” Pipeline (abandon)

[******]

[******]

8” Pipeline (lowering)

[******]

[******]

12” Pipeline (lowering)

[******]

[******]

20” Pipeline (lowering)

[******]

[******]

4” Pipeline (low)-North end

[******]

[******]

FM39 Surety Bond

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

TXU 138kV Reloc

[******]

[******]

Substation connect to TXU 138kv

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Relocations

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 1

Texas Xxxxxxxxxxxx Coal Co.
2007 Life of Deposit Capital Forecast
Detail Report for Years 2008 — 2018

2007 Constant Dollars

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

Total

MAJOR/SUPPORT EQUIPMENT

Engine Replacements

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Light Vehicles

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Swing Bearing 5130

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Tools & Small Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

(2) Barge Pumps-6” Diesel

[******]

[******]

[******]

[******]

[******]

DL Bucket 8200

[******]

[******]

[******]

[******]

Cable Tractor

[******]

[******]

[******]

DL Bucket-8760

[******]

[******]

Replace Boom/Weld Truck

[******]

[******]

Replace Motor Grader

[******]

[******]

[******]

[******]

Replace D-10’s (2)

[******]

[******]

[******]

Replace D-9

[******]

[******]

Replace 992/5130 Backhoe

[******]

[******]

Replace 5130 Backhoe Boom

[******]

[******]

[******]

DL Repairs (Contingency) Mechanic

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Boom Support Ropes – 8200

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Boom Support Ropes – 8750

[******]

[******]

[******]

Dragline Tub Replace – 8200

[******]

[******]

[******]

[******]

DL Production Monitor

[******]

[******]

[******]

Crusher Belt Replacement

[******]

[******]

[******]

[******]

[******]

*New Flt-785 E Dumps (4)

[******]

[******]

Total Major Equip

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

(Note: * = Capital lease equip.)

OFFICE & COMPUTER EQUIP.

Imaging Server

[******]

[******]

[******]

[******]

Data File Server

[******]

[******]

[******]

[******]

DNS/DHCP Server

[******]

[******]

[******]

[******]

Plotter Replacement

[******]

[******]

[******]

[******]

[******]

Replace Color Laser

[******]

[******]

[******]

[******]

Replace GPS Data Collector

[******]

[******]

[******]

Replace GPS Equipment

[******]

[******]

Total Office

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 2

Texas Xxxxxxxxxxxx Coal Co.
2007 Life of Deposit Capital Forecast
Detail Report for Years 2008 — 2018

2007 Constant Dollars

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

TOTAL

Total

LANDS

Refurbish Adm., Eng., & Shop roofs

[******]

[******]

[******]

[******]

Tract Purchases/Bonus-BX

[******]

[******]

[******]

[******]

Total Lands

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Capital

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Additional Bond Collateralization

[******]

[******]

[******]

Note: Civil Projects are based on flight topography and survey is pending

LOD Cost Report Cap Detail.xls

Page 3

Texas Xxxxxxxxxxxx Coal Co.
Cost Report for Life Of Deposit

Costs Billed Thru to NRG

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Stripping

Dragline — Cost Center 514

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Dragline Stripping

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Yard

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Mobile — Cost Center 515

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Mobile Stripping

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Yard

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Stripping

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Yard

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Lignite Handling

Lignite Loading — Cost Center 536

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Lignite Loading

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Lignite Hauling — Cost Center 537

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Lignite Hauling

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Lignite Crushing — Cost Center 539

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Lignite Crushing

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 1

Texas Xxxxxxxxxxxx Coal Co.
Cost Report for Life Of Deposit

Costs Billed Thru to NRG

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Total Lignite Handling

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Roads

Road Maintenance – Cost Centers 551 & 552

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Road Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total roads

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Dewatering

Surface Dewatering – Cost Center 571

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Surface Dewatering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Overburden Dewatering – Cost Centers 575 & 576

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Surface Dewatering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Dewatering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Maintenance

Support Equipment – Cost Center 675

Pickups/Trucks

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Cranes

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

KV Systems

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Light Plants

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Pumps & Barges

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

LOD Cost Report Cap Detail.xls/Cost Plus Cost Report

Page 2

Texas Xxxxxxxxxxxx Coal Co.
Cost Report for Life Of Deposit

Costs Billed Thru to NRG

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Total Support Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other Maintenance – Cost Centers 679 & 690

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rents

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Other Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

General/Production

Clearing – Cost Centers 596 & 597

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Clearing

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Warehouse – Cost Center 595

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Freight

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Hotshot Fees

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rent

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Purchases

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Inventory Adjustment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Restocking Fees

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Education & Training

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Warehouse

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Production Taxes

State Sales & Use Tax

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Federal Reclamation Tax

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Real Estate & Personal Property T

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Production Taxes

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Relocations – Cost Center 598

Page 3

Texas Xxxxxxxxxxxx Coal Co.
Cost Report for Life Of Deposit

Costs Billed Thru to NRG

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Relocations

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

General – Other-Cost Centers 592 & 590

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total General – Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total General Production

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

TOTAL PRODUCTION

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Current Reclamation

Regarding – Cost Center 715

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Regrading

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Revegetation – Cost Center 717

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Revegetation

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Current Reclamation

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Post Mine Reclamation

Final Pit – Cost Center 431

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Final Pit

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 4

Texas Xxxxxxxxxxxx Coal Co.
Cost Report for Life Of Deposit

Costs Billed Thru to NRG

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Facility Removal – Cost Center 432

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Facility Removal

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Post Mine Management – Cost Center 439

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Post Mine Management

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Post Mine Reclamation

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Compliance

Permitting – Cost Center 748

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Permitting

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Monitoring-General – Cost Center 742

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Monitoring – Engineering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Monitoring – Haz Mat – Cost Center 743

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Monitoring – Haz Mat

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Sediment Control – Pond Treatment – Cost Center 741

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Sediment Control – Pond

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Sediment Control – Engineering-Cost Center 745

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Sediment Control – Engin

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Sediment Control – Erosion Control Cost Center 746

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Sediment Control

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 5

Texas Xxxxxxxxxxxx Coal Co.
Cost Report for Life Of Deposit

Costs Billed Thru to NRG

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Sediment Control – Hay – Cost Center 747

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Sediment Control

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other – Cost Center 749

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Compliance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

TOTAL RECLAMATION

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Administrative & Engineering

Engineering – Cost Center 580

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Engineering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Safety – Cost Center 952

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Awards

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Safety

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Facilities – Cost Center 953

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Utilities

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Education & Training

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Association Dues/Fees

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Small Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Facilities

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 6

Texas Xxxxxxxxxxxx Coal Co.
Cost Report for Life Of Deposit

Costs Billed Thru to NRG

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Security – Cost Center 955

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Security

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Business/Administration – Cost Centers 951 & 959

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Gainsharing

Travel & Auto

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Communications

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental Equipment/Building

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Discounts

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Industry/Association Dues

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Education & Training

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Parent Company Allocated Overhe

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Business

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

D,D, & A

Deprec. Depl. Amort

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total D, D, & A

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Purchasing – Cost Center 954

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Education & Training

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Purchasing

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Employee Relations – Cost Center 957 plus 959160

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Personal Issue Allowance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Post Employment Benefits

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Awards

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 7

Texas Xxxxxxxxxxxx Coal Co.
Cost Report for Life Of Deposit

Costs Billed Thru to NRG

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Industry/Association Dues

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Education & Training

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Employee Relations

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Information Systems – Cost Center 956

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Telephone

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Small Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Education & Training

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Information Systems

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Lands – Cost Center 956

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Industry/Association Dues

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Education & Training

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Surface Leases

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Lands

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Insurance

Insurance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Insurance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

TOTAL ADMIN. & ENGINEERING

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Royalties & Damages

Surface Damages

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Delay Rentals

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Minimum Royalties

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Mineral Royalties

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Overriding Royalties

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Royalties & Damages

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 8

Texas Xxxxxxxxxxxx Coal Co.
Cost Report for Life Of Deposit

Costs Billed Thru to NRG

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Non-operating Income/Deductions

Donations

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Interest Expense

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Non-operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Grand Total

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

TWCC Tons

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

NRG Tons

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Tons

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/MMBTU

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Yards:

Dragline

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

BWE

Mobile

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Reclamation Acres

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 9

[The last two pages of Exhibit 2 consist of a two-page graphic depiction of the Mine.]

EXHIBIT 3

2008 Preliminary AOP

See attached. Note that although the attached preliminary form contains a line for D.D. &A (Depreciation, depletion and amortization), such amounts are not included in Mine Costs.

Exhibit 3 — Page 1

Exhibit 3
Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP — Mine Costs

Final 8/22/07

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Stripping

Dragline — Cost Center 514

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Maintenance

[******]

Total Dragline Stripping

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Yard

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Mobile — Cost Center 515

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rent Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Additional Equipment Costs

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Mobile Stripping

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Yard

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Stripping

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Yard

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Lignite Handling

Lignite Loading — Cost Center 536

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

Rent Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Lignite Loading

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Lignite Hauling — Cost Center 537

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Additional Equipment Costs

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Maintenance

[******]

Total Lignite Hauling

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Lignite Crushing — Cost Center 539

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 1

Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP — Mine Costs

Final 8/22/07

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

Equipment Rental

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Maintenance

[******]

Total Lignite Crushing

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Lignite Handling

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Roads

Road Maintenance — Cost Center 551 & 552

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rent

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Road Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Roads

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Dewatering

Surface Dewatering — Cost center 571

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Surface Dewatering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Overburden Dewatering — Cost Centers 575 & 576

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental Equipment

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Maintenance

[******]

Page 2

Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP — Mine Costs

Final 8/22/07

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Total Overburden Dewatering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Dewatering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Maintenance

Support Equipment — Cost Center 675

[******]

Labor (including fringe & tax)

[******]

Pickup/Trucks

[******]

Travel

[******]

Materials & Supplies/Equip Operating

[******]

Contract

[******]

Rental Equipment

[******]

Cranes

[******]

KV Systems

[******]

Reclamation Equipment

[******]

Light Plants

[******]

Pumps & Barges

[******]

Equipment Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Support Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other Maintenance — Cost Centers 679 & 690

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Gainsharing

[******]

Travel & Auto

[******]

Materials & Supplies

[******]

Contract

[******]

Electricity

[******]

Rents

[******]

Total Other Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Maintenance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

General Production

Clearing-Cost Centers 596 & 597

[******]

Labor (including fringe & tax)

[******]

Materials & Supplies

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Clearing

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Warehouse- Cost Center 595

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 3

Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP — Mine Costs

Final 8/22/07

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Freight

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Hotshot Fees

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rent

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Purchases

[******]

Restocking Fees

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Warehouse

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Production Taxes

State Sales & Use Tax

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Federal Reclamation Tax

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Real Estate & Personal Property Tax

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Production Taxes

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Relocations- Cost/Center 598

Materials & Supplies

[******]

Contract

[******]

Total Relocations

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

General — Other- Cost Centers 592 & 590

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total General — Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total General Production

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

TOTAL PRODUCTION

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Current Reclamation

Regrading- Cost Center 715

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Regrading

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Revegetation- Cost Center 717

Page 4

Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP — Mine Costs

Final 8/22/07

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Revegetation

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Current Reclamation

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Post Mine Reclamation

Final Pit- Cost Center 431

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental Equipment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Equipment Operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Final Pit

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Facility Removal- Cost Center 432

Labor (including fringe & tax)

[******]

Materials & Supplies

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Facility Removal

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Post Mine Management- Cost Center 439

Labor (including fringe & tax)

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Post Mine Management

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Post Mine Reclamation

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Compliance

Permitting- Cost Center 748

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Travel & Auto

[******]

Bond & Insurance

[******]

Total Permitting

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Monitoring- General- Cost Center 742

Labor (including fringe & tax)

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 5

Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP — Mine Costs

Final 8/22/07

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Small Equipment

[******]

Electricity

[******]

Other

[******]

Total Monitoring- Engineering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Monitoring- HazMat- Cost Center 743

Labor (including fringe & tax)

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Monitoring- Haz Mat

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Sed Control- Pond Treatment- CC 741

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

Total Sediment Control- Pont Treatment

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Sediment Control-Engineering- Cost Center 745

Labor (including fringe & tax)

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

Equipment Operating

[******]

Equipment Maintenance

[******]

Total Sediment Control- Engineering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Sediment Control- Erosion Control- Cost Center 746

Labor (including fringe & tax)

[******]

Materials & Supplies

Total Sediment Control

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Sediment Control- Hay- Cost Center 747

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Sediment Control

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Acre

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other- Cost Center 749

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 6

Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP — Mine Costs

Final 8/22/07

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Gainsharing

[******]

Awards

[******]

Travel & Auto

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Industry/Association Dues

[******]

Education & Training

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Compliance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

TOTAL RECLAMATION

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Administrative & Engineering

Engineering- Cost Center 580

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract Services

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Engineering

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Safety- Cost Center 952

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Gainsharing

[******]

Awards

[******]

Travel & Auto

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Small Equipment

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Safety

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Facilities- Cost Center 953

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Gainsharing

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Utilities

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Small Equipment

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Facilities

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 7

Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP — Mine Costs

Final 8/22/07

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Security- Cost Center 955

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Security

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Business/Administration- Cost Centers 951 & 959

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Gainsharing

[******]

Travel & Auto

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Electricity

[******]

Communications

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental Equipment/Building

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Parent Company Allocated Overhead

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Business

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

D.D.&A-TWCC Existing Assets Only

Deprec, Depl, Amort.

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total D, D, & A

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Purchasing- Cost Center 954

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Gainsharing

[******]

Travel & Auto

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Purchasing

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Employee Relations- Cost Center 957 plus 959160

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Employee Relations

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Information Systems-Cost Center 956

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Gainsharing

[******]

Travel & Auto

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 8

Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP — Mine Costs

Final 8/22/07

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Rental Equipment

[******]

Telephone

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Small Equipment

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Information Systems

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Lands-Cost Center 958

Labor (including fringe & tax)

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Gainsharing

[******]

Travel & Auto

[******]

Materials & Supplies

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Contract

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Industry/Association Dues

[******]

Education & Training

[******]

Surface Leases

[******]

Other

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Lands

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Insurance & Workers Compensation

Insurance

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Ins. & Workers Comp.

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

TOTAL ADMIN. & ENGINEERING

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Royalties & Damages

Writeoff of nonrecoupable adv xxx

[******]

Drilling Damages

[******]

Surface Damages

[******]

Delay Rentals

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Minimum Royalties

[******]

Credit for Recoup of A/R Pd by REI

[******]

Mineral Royalties

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Overriding Royalties

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Budget Adjustment

[******]

Total Royalties & Damages

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Page 9

Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP — Mine Costs

Final 8/22/07

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Non-operating income/Deductions

Other Non-operating

[******]

Donations

[******]

Interest Expense

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Interest Income

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Non-operating

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Grand Total

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

$/Ton

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

TWCC Tons

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

NRG Tons

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total Tons

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

S/MMBTU

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Yards:

Dragline

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

BWE

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Mobile

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Total

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Reclamation Acres

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

MMBTU

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

Avg Btu

[******]

Page 10

Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP Capital Budget

2008 Constant Dollars

Jan

Feb

March

April

May

June

July

Aug

Sept

Oct

Nov

Dec

TOTAL

SEDIMENT CONTROL

Pond 36

[******]

[******]

BX1 Diversion

[******]

[******]

[******]

[******]

[******]

[******]

HAUL ROADS

(None)

[******]

RELOCATIONS

Magellan 16” Pipeline

[******]

[******]

FM39 Relocation Construction

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

FM39 XX Xxxx

[******]

[******]

[******]

[******]

FM39 Navasota Electric

[******]

[******]

[******]

[******]

FM39 XX Xxxx Fiber Optic

[******]

[******]

[******]

[******]

FM39 Brazos 138 kV

[******]

[******]

[******]

[******]

Enbridge 6” Pipeline

[******]

[******]

Enbridge 8” Pipeline

[******]

[******]

[******]

Enbridge 12” Pipeline

[******]

[******]

[******]

[******]

Pinnacle 20” Pipeline

[******]

[******]

[******]

[******]

Enbridge 4”

[******]

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FM39 Surety Bond

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Texas Xxxxxxxxxxxx Coal Co.
2008 Preliminary AOP Capital Budget

2008 Constant Dollars

Jan

Feb

March

April

May

June

July

Aug

Sept

Oct

Nov

Dec

TOTAL

MAJOR/SUPPORT EQUIP

Engine Replacements

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Light Vehicles

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Tools & Small Equipment

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(2) Barge Pumps-6” Diesel

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(2) Cable Tractors

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Replace Motor Grader

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DL Repairs (Contingency)

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Boom Support Ropes — 8200

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DL Production Monitor

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SAFETY EQUIPMENT

20’ Enclosed Trailer

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Safety Rescue Equipment

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OFFICE & COMPUTER EQUIP.

DNS/DHCP Server

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LANDS

FM 39 ROW

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Tract Purcases/Bonus

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Admin Roof Restoration

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Admin A/C Unit Replace

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Grand Total

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Additional Bond Collateralization

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Note: Civil Projects are based on flight topography and survey is pending. Sales Tax has not been included.

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EXHIBIT 4

AOP Components

Each AOP shall include details of the lignite reserve quantities and quality, mining and reclamation plans, the maximum capacity of the Mine for the relevant Year, operations, assumptions and estimated costs required to produce and deliver AOP Volumes proposed by NRG, and to perform agreed reclamation and other work during a suspension of production or after production ceases. The AOP shall contain initial capital estimates and justification, including development and construction plans and budget quotations. Without limiting the generality of the foregoing, each AOP shall contain the components set forth in the attachment hereto titled “Exhibit – AOP and Other Information Requirements” and shall be of a scope and level of detail similar to the attachment hereto entitled “Northwestern Resources Co. 1999 Annual Mine Plan”.

Exhibit 4 — Page 1

EXHIBIT 4

AOP and OTHER INFORMATION REQUIREMENTS

In the course of developing an Annual Operating Plan (AOP), NRG requests TWCC use, maintain, and make available for review by NRG the following information, provided such information is readily available:

I. Life of Mine Plan Information Requirements

The information provided each year for the updated Life of Mine Plan should include the following items plus any other information required to substantiate Seller assumptions or any other Buyer inquiries. The Life of Mine Plan shall be based on engineered estimates of annual quantities and work effort and shall provide reasonable details of assumptions, annual production and operations statistics, and annual production and capital cost estimates as follows.

1)		The updated Life of Mine Plan should be based on an updated geological model that reflects all available geological and lignite quality data. The updated geological model should be provided including drill hole collar surveys, drill hole logs, sample quality analyses and all other information collected from drilling and sampling programs. The geological model should be provided in electronic form in a format convenient for use by Buyer.
2)		Mapping in Mincom, Vulcan, SurvCadd, Microstation, Auto Cad or some other useable electronic format including the current:

	a)		most recent topographic mapping and digital terrain model and updated aerial photography, if any; mining limits and mined out areas;
	b)		boundaries including subcrop, burn, oxidized, washout, and other geologic limits;
	c)		property, lease and other relevant boundaries;
	d)		drainage;
	e)		land use and final reclamation status;
	f)		current and planned mine infrastructure (i.e. access and haul roads, surface facilities, sediment ponds, soil storage areas, coal loadouts, etc.);
	g)		dragline and other mining cut layouts; and other areas of mine disturbance planned during the Life of Mine Plan period.

3) Schedule of production volumes and lignite tonnages showing all major quantities and other relevant data including:

	a)		Dragline virgin stripping and rehandle volumes (bcy) by machine and by dig method;
	b)		Haulback and topsoil removal volumes (bcy) by fleet (wheel loader or easi-miner);
	c)		Parting removal volumes (bcy) by fleet (loader or easi-miner) & % direct cast;
	d)		Pre-stripping volumes (bcy) by fleet (shovel/truck or dozer);
	e)		Lignite tonnage by mining area and by fleet (loader or easi-miner);
	f)		Clearing and grubbing acres
	g)		Land grading and shaping acres

4)		Summary of operating costs by mining function (e.g. dragline stripping, lignite hauling, current reclamation,, supervision, etc.) or cost center and also by major cost component (e.g., wages, salaries, payroll burdens, diesel fuel, parts, tires, etc.).
5)		Summary of operating costs by Seller object account (e.g. hourly labor, salaried labor, maintenance, G&A, production taxes and royalties, and etc.
6)		Mine plan layout and design parameters including:

	a)		Mine plan design parameters including wall angles, spoil angle of repose, densities of lignite, overburden and parting materials, waste material swell factors, lignite swell factor, parting/dilution quality
	b)		Lignite recovery assumptions including methodology for estimating delivered recovered tonnages and quality from modeled in situ reserves (i.e. minimum recoverable lignite thickness, minimum separable parting thickness, lignite roof and floor loss thickness, roof and floor dilution thickness)
	c)		Pit designs including geotechnical and slope stability work, range diagrams, mining conditions and unit operations
	d)		Mine plan pit widths
	e)		Plan method of boxcut development (dragline, shovel/truck, other)
	f)		Boxcut design parameters (pit width, low wall angle, high wall angle), boxcut range diagrams, and boxcut spoil placement location
	g)		Dragline specifications and operating parameters
	h)		Dragline operational range diagrams and rehandle curves
	i)		Maximum dragline stripping depth
	j)		Pre-stripping fleet waste allocation methodology
	k)		Topsoil storage locations
	l)		Metered hour to scheduled hour conversion

7) Equipment productivities including:

	a)		Dragline stripping rates (bcy/hour) by mode (e.g., side-casting, extended benching, chop-cutting, spoil-side)
	b)		Parting and haulback removal rates (bcy/hour)
	c)		Wheel loader parting, haulback, and topsoil removal rates (bcy/hour)
	d)		Hydraulic excavator pre-stripping rate (bcy/hour)
	e)		Lignite loading rate (tons/hour)
	f)		Wheel loader lignite and sludge loading rates (tons/hour)
	g)		Dozer push stripping (bcy/hr) and land grading rates (acre/hour)

8)		Availabilities and operational efficiency by equipment fleet. Include definitions of availability, utilization and distance.
9)		Lignite haulage efficiency from each area and haul distances.
10)		Scheduled and meter hours by equipment type.
11)		Summary of hourly operating costs for major production equipment detailing the cost per meter hour of diesel fuel, parts, major components, tracks/tires/wire rope and vendor labor.

12)		Life-of-mine capital schedule showing planned mine development, equipment descriptions, additions, replacements and costs.
13)		Schedule of planned major component replacement costs by fleet and component documented with equipment and major component life reports showing accumulated frame hours for each piece of major production equipment and component lives, exchange intervals, and other relevant information.
14)		Depreciation lives (years) for the different equipment and asset classes.
15)		Life-of-mine depreciation and lease cost schedule for existing assets.
16)		Schedule and description of other fixed costs.
17)		Summary of salaried and hourly Mine labor requirements by grade/job description and equipment type showing operations and maintenance personnel separately.

II. Annual Operating Plan/Annual Mine Plan and Budget Information Requirements

The Annual Mine Plan should be a more detailed plan and budget for the first year of the Life of Mine Plan. In the Annual Mine Plan, the mining sequence, production statistics and budget operating and capital cost estimates shown in Item 1 above should be provided on a monthly basis. In addition, major capital requests should be reasonably justified each year and accompanied by full details on the budgeted item and its proposed service and life. Additional information to be included in the Annual Mine Plan is as follows.

1)		Mine operating schedule — scheduled operating days per month, shifts per day, number of paid holidays, etc.
2)		Labor

	a)		Labor costing parameters including total paid hours per year, paid non-working hours, overtime hours and rates, etc.
	b)		Shift schedules (12-hour shifts, 8-hour shifts, other).
	c)		Description of workers included in each pay grade.
	d)		Hourly wage rates by pay grade ($/hour).
	e)		Shift differentials ($/hour).
	f)		Site-specific labor conventions or assumptions; i.e., number of dragline crew members, maintenance requirements (i.e., mechanics/welders per dragline shift, field maintenance workforce scheduling parameters, etc.), warehouse, etc.
	g)		Salary cost for salaried positions i.e., superintendent, xxxxxxx, engineer, technician, etc.
	h)		Organization chart

3) Benefits

a) Variable payroll tax/fringe benefits factors (%) for hourly and salaried personnel as a percentage of total base pay (with base pay defined as total paid hours x rate per hour + shift differential).

b) Fixed payroll tax/fringe benefits factors ($/person/year) for hourly and salaried personnel.

4) Supplies

	a)		Assumed delivered unit consumables prices for diesel fuel ($/gallon) including only applicable off-road taxes.
	b)		Tire costs.
	c)		Any other major consumables items.

5) Equipment

	a)		Current equipment list detailing the manufacturer and model number for all production equipment, service vehicles, and support equipment.
	b)		Rated bucket capacity (cubic yards) for draglines, hydraulic excavators, and front-end loaders.
	c)		Diesel fuel consumption rates for major production equipment (gallon/hour).
	d)		Typical truck payloads in bcy and tons and number of loading machine passes to fill truck.
	e)		Typical truck dumping times, queuing delays, and other operating parameters.
	f)		Mine haulroad speed limits (mph) and typical ramp grades.

6) Mine Overheads

	a)		Property tax — basis for calculation or monthly amount
	b)		Insurance — basis for calculation or monthly amount
	c)		Permitting Fees — monthly cost
	d)		Legal and auditing expenses — monthly cost or $/ton
	e)		Outside services expenses — monthly cost or $/ton
	f)		Exploration Drilling — monthly cost or $/ton
	g)		Employee related expenses — monthly cost or $/ton
	h)		Governmental/environmental relations — monthly cost or $/ton
	i)		Publications, memberships, and dues — monthly cost or $/ton
	j)		Freight and postage — monthly cost or $/ton
	k)		Other expenses — monthly cost or $/ton

7)		Production taxes and royalties — for each provide basis and cost.
8)		Production Plans and Statistics

	a)		Annual mine progress map for dragline mining areas and overall disturbed area.
	b)		Annual rough grading, final grading, SPGM removal/stockpiling/replacement, initial and permanent vegetation, and bond release plans including maps and production statistics.
	c)		Summary of current and planned equipment quantities and assignments (e.g., one D375 dozer with dragline).

9) Cost and Cash Flow Estimates

	a)		Capital schedule including budgeted prices for equipment replacements and additions; infrastructure additions and other development expenses. Major capital requests should include reasonable justification by item as may be requested by Buyer.
	b)		Loan and Lease Obligations list showing all equipment under lease, the lease payment, the remaining lease term and lease buyout amount.

10)		Beginning and end of year capital assets listing showing cost, life, depreciation, accumulated depreciation, remaining life, and remaining net book value.
11)		Variance analysis — a comparison of key production statistics, major equipment production rates, labor productivity, and major costs for the Annual Mine Plan with actual statistics and costs from the previous year.

NRG also request this information, all or in part along with any other information requested by NRG be included in the following three reports to be produced by TWCC:

	A)		Annual Mine Plan: Five Year Mine Plan with the 1st year by the month, 2nd year by the quarter and the 3rd, 4th, and 5th years on an annual basis.
	B)		Annual Capital and Operating Budgets: Five Year Budgets with the 1st year by the month, 2nd year by the quarter and the 3rd, 4th, and 5th years on an annual basis.
	C)		Life of Mine Plan: On an annual basis as determined by NRG.

TWCC is to follow a similar format used in the 1999 Xxxxxx Mine AMP and Budget Reports for Items A & B and the 2008 — 2018 LOMP for future LOMP.

Northwestern Resources Co.

1999

ANNUAL MINE
PLAN

October 1998

[LOGO]

HL&P Limestone

Xxxxxx Mine
1999 Annual Mine Plan

TABLE OF CONTENTS

I. OVERVIEW			1-1
II. ASSUMPTIONS
2.1 Lignite Delivery Schedule			2-1
2.2 General			2-2
2.3 Lignite Recover & Quality			2-2
2.4 Equipment Operation			2-3
2.5 Equipment Hours and Availability			2-5
2.6 Planned Equipment Downtime			2-5
2.7 Geotechnical Parameters			2-6
III. GEOLOGY			3-1
IV. MINE DESIGN
4.1 Stripping			4-1
4.2 Clearing			4-3
4.3 Lignite and Overburden Quantities			4-3
V. DEVELOPMENT
5.1 Overburden Dewatering			5-1
5.2 Mine Electrical System			5-3
5.3 Civil Development Activities			5-4
5.4 Development Projects			5-5
VI. COMPLIANCE
6.1 Regrade / Reclamation Cover			6-1
6.2 Final Surface Preparation			6-1
6.3 Drainage Control			6-3
6.4 1999 Current Revegetation Schedule			6-4
6.5 Extended Responsibility Period			6-4
VII. LAND			7-1
VIII. EQUIPMENT/MANPOWER			8-1
IX.-X. EXHIBITS

i 

Xxxxxx Mine
1999 Annual Mine Plan

LIST OF TABLES

Table 2.1 Lignite Delivery Schedule			2-1
Table 2.2 Dragline Rates			2-3
Table 2.3 Equipment Availability			2-5
Table 3.1 Production Drilling Program			3-3
Table 4.1 DL25 - Area B Quantities			4-4
Table 4.2 DL26 - Area C & BX Quantities			4-5
Table 4.3 DL27 Quantities			4-6
Table 4.4 DL28 Quantities			4-7
Table 4.5 Combined Mining Area Quantities			4-8
Table 4.6 Inventory Schedule			4-9
Table 4.7 Lignite Quality			4-10
Table 5.1 Dewatering Installation Table			5-1
Table 6.1 Acres Regraded And Reclaimed			6-2
Table 7.1 Projected Deliveries by Lease for 1999			7-3
Table 7.2 Sales Tonnage Projections			7-4
Table 8.1 Xxxxxx Mine Staffing Plan			8-1
Table 8.2 Major Equipment Requirements			8-2
Table 8.3 Major Equipment Replacement Schedule			8-3
Table 8.4 Equipment Hours			8-4
Table 8.5 Equipment Hours — Fleet Summary			8-6

I. OVERVIEW

     The 1999 Annual Mine Plan (99 AMP) was prepared to address mining and support issues in sufficient detail, to enable preparation of the 1999 Capital and Expense Budgets for the Xxxxxx Mine.

     There has been a significant increase in delivery requirements since the publication of the 1998 Annual Mine Plan (98 AMP). This increase is being made up in several ways.

     One of the changes is the application of the BWE in tandem with a dragline. This is expected to raise the annual BWE production from 10.5 to 14 million bcy/yr. A geotechnical evaluation of this operation currently is being performed. Blasting is also being tried, on a limited basis, to increase dragline productivity. Finally, our truck fleet will begin using larger trucks and eventually more of them.

     Reserve calculations are based on the latest geologic models, 1999 East and 1998 West. In some parts of Area C the lower seams (5 and 6) have been combined due to minimal parting thickness and acceptable quality. Mining sequences follow those contained in Plan K quite closely.

     A permit renewal / revision was approved on June 30, 1998 and the order became final on July 23, 1998. This renewal extended the permit term for another five years and allows for mining in Area DX. All stripping advances conform to the existing disturbance boundaries.

 1-1 

II. ASSUMPTIONS

2.1 DELIVERY SCHEDULE

TABLE 2.1
LIGNITE DELIVERY SCHEDULE
HL&P Delivery Schedule (Xxxxx to Xxxxx, Xxxxx 2, 1998)

Period		Tons				BTU/Ib.				TBTUs
January			754				6508				9.81
February			668				6428				8.59
March			471				6662				6.28
April			587				6694				7.86
May			820				6694				10.98
June			800				6694				10.71
July			830				6694				11.11
August			830				6694				11.11
September			800				6694				10.71
October			820				6694				10.98
November			800				6694				10.71
December			820				6694				10.98
1998 Total			9,000				6657				119.83
January			840				6579				11.05
February			760				6579				10.00
March			590				6579				7.76
April			420				6579				5.53
May			570				6579				7.50
June			830				6579				10.92
July			860				6579				11.32
August			860				6579				11.32
September			830				6579				10.92
October			860				6579				11.32
November			830				6579				10.92
December			850				6579				11.18
1999 Total			9,100				6579				119.74
1st Qtr			2,500				6590				32.95
2nd Qtr			2,100				6590				27.68
3rd Qtr			2,500				6590				32.95
4th Qtr			2,600				6590				34.27
2000 Total			9,700				6590				127.85
1st Qtr			2,400				6563				31.50
2nd Qtr			2,400				6563				31.50
3rd Qtr			2,500				6563				32.82
4th Qtr			2,600				6563				34.13
2001 Total			9,900				6563				129.95
2002			10,000				6473				129.46
2003			9,700				6411				124.37
2004			9,800				6493				127.26
2005			10,200				6399				130.54
2006			9,900				6544				129.57
2007			9,600				6520				125.18
2008			9,900				6428				327.27

 2-1 

2.2 GENERAL

     Draglines are given highest priority, they are scheduled at 100% of available hours. The BWE is always scheduled in tandem with a dragline so the BWE is not sequenced as a separate unit. The mobile fleet size is levelized to meet capacity needed after using all DL/BWE hours.

     Working inventory capacities are assumed to be approximately 110,000 tons per dragline pit. Lignite Handling Facility & mine area stockpile capacities are assumed to be limited to 1,150,000 tons. Minimum total inventory is targeted at 700,000 tons.

     Interburden with a maximum thickness of 10 feet is assigned to mobile equipment for removal. Interburden with thickness greater than 10 feet is assigned to the draglines for removal.

2.3 EQUIPMENT OPERATION

Dragline Rates

The dragline targets were the following annualized rates:

Rate for the 8200		20,000,000 cy/yr
Rate for the 8750		28,000,000 cy/yr
Tandem rate for 8750 & BWE		42,000,000 bcy/yr		(80% for the first 6 months)
Tandem rate for 8200 & BWE		32,000,000 bcy/yr

The Table 2.2 represents the dragline rates used in the equipment scheduling process.

TABLE 2.2
1999 ANNUAL MINE PLAN
DRAGLINE RATES

BCY/YR x 1000

Mode		Xxxxxx 8200				Xxxxxx 8750
Normal			24,900				37,100
Top Pass			19,500				28,600
Chop			20,100				28,600
Spoilside			18,800				28,600
Rehandle			18,800				28,600
Key			20,100				30;400
Tandem			18,000				28,000

     Xxxxxx 8200 rates assume either hi-pro or modified hi-pro buckets ore in service on all machines. Xxxxxx 8750 rates assume a 128 cyd bucket is in use.

 2-2 

     Dragline rehandle will vary by seam structure, depth & digging mode. The volume of rehandle (cy/ft of pit) was calculated for various cases using Pitplan/Pitboss. For depths up to 150 ft., rehandle is assumed to be included in DL rates. For depths from 150 ft. to 180 ft. as much as an additional 19% rehandle is added. Dragline boxcut volumes were calculated based on profile volumes from Pitplan/Pitboss.

Dragline Operating Parameters

•		Draglines 25, 26 & 27 will strip overburden to a maximum depth of 180 feet
•		Dragline 28 will strip overburden to a maximum depth of 165 feet
•		In tandem with the BWE, Dragline 28 will strip overburden to a maximum depth of 185 feet
•		Dragline pit widths are assumed to be 100 ft. minimum; 140 ft. normal; 200 ft. maximum

Dragline Scheduling Parameters

				Oper. Delay		Mech./Elec							Dig		Mech./Elec
Machine		Dig Hrs		Hrs		Hrs		Holiday		Total			Avail.		Avail.
8200		6,080		1,520		1,136		24		8,760			80%		87%
8750		5,941		1,485		1,310		24		8,760			80%		85%

Dragline Moving Delays

	1.		From Area DX to Area E     1 week
	2.		From Area E to Area F      1 week
	3.		From Area C to Area BX     1 week

BWE

     The BWE works in tandem with draglines for the 10 years covered in this mineplan, except for the first eight months of 2008. The BWE is assumed to produce 14 million bcy/yr except the first six months when it produces at 80%. When the BWE digs it is always in tandem with a dragline, no sequence was done for the BWE alone. The BWE move from Area DX to B causes a production delay of two weeks.

Mobile Fleet

     Mining areas with overburden depths averaging 50 feet or less were reserved in separate blocks to create mobile pits. In the event of low inventory release by the draglines, supplemental release will come from the mobile pits using the following assumptions:

•		Dozers: 40% of total overburden (topsoil is removed by trucks; dozers then push burden into open pit).
•		Trucks: 60% of total overburden (topsoil and remaining burden down to coal)

 2-3 

•		100 ton end dump trucks are sized with an average annual capacity of 1,200,000 bcy/yr/truck.
•		150 ton end dump trucks are sized with an average annual capacity of 1,700,000 bcy/yr/truck.
•		Overburden in excess of 180 or 185 feet will be removed by mobile equipment.

2.4 LIGNITE RECOVERY & QUALITY

Lignite Recovery Parameters

Minimum Seam Thickness							1.5 ft.
Coal Loss Per Seam
Seams		1.5 - 2.0 ft.					50	%		(3 & 4 seam)
Seams							25	%		(5 & 6 seam)
Seams		2.0 - 4.0 ft.					10	%
Seams		4.0 - 7.0 ft.					7.5	%
Seams		> 7.0 ft.					5.0	%

Underground Mines: 6 seam only: 50 % of in-place modeled reserves loaded into Minestar; plus normal mining recovery losses based on seam thickness listed above to calculate ROM tonnage. Other seams: Normal recovery adjustments.

     50% of C51 seam in Areas D & DX is wasted (assumed to be poor quality)

Lignite Quality Parameters

Coal Loss Per Seam		0.5 feet
Maximum Allowable In-Seam Parting		6 inches
Moisture Adjustment			-1.5	%
Dilution Added Per Seam		3 inches

2.5 EQUIPMENT HOURS AND AVAILABILITY

     A detailed listing of the equipment operating hours used to determine the equipment requirements and replacement schedule for the 1999 Budget is shown in Tables 8.4 & 8.5. Equipment availability is shown in the following table.

 2-4 

TABLE 2.3
1999 ANNUAL MINE PLAN
EQUIPMENT AVAILABILITY

EQUIPMENT		1997 ACTUAL				1999-2008 PROJECTED
8200 Dragline			89.1				87
8750 Dragline			92.3				85
BWE			84.1				80
Cat 5130 Backhoe			88.9				87
EX1100 Backhoe			90.5				87
Cat 992C FEL			86.9				85
330M End Dump Truck			84.8				85
325M Water Track			91.3				90
CH120 Hauler			85.8				85
16G Grader			92.8				90
D9/RT Dozer			89.3				88
D10 / Komatsu Dozer			88.9				88
D11 Dozer			88.0				88
657E Scraper			85.2				83

2.6 PLANNED EQUIPMENT DOWNTIME

	DL25	–	Nov. 1999 for rail/roller repairs (estimated downtime = 21 days) Dec. 1999 for Hoist drum ends (estimated downtime = 20 days)
	DL26	–	Nov. 1998 for rail/roller repairs & boomfeet (estimated downtime = 21 days)
	DL27	–	Mar. 1999 swing rack repairs (estimated downtime = 25 days) Nov. 2000 for rail/roller repairs (estimated downtime = 21 days) Dec. 2000 for Hoist drum ends (estimated downtime = 20 days)
	DL28	–	Aug. 1999 for Point Sheaves (estimated downtime = 9 days)

2.7 GEOTECHNICAL PARAMETERS

     Figures 2.1 through 2.3 illustrate typical highwall and spoil angles and bench heights used in the 1999 Annual Mine Plan. These criteria were developed based on the several reports on highwall and slope stability prepared by Law Engineering in 1990. The areal extent of each highwall configuration may be seen in the Law Study, Phase III, Fig. 5-1. A summary of general assumptions follows.

 2-5 

Single Seam Areas

	Spoil:		50’ safety bench at 40’ to 80’ height Individual slope angles of 35° with safety bench Steepened slope angle of 38° when lower slope is excavated
	Highwall:		Maximum chop height of 90’ Lower slope angle 45° to max. 90’ height with 50’ wide safety bench Intermediate slope angle 50° to max. 90’ height with 50’ wide safety bench Upper slope angle 50° to maximum 90’ height

Multiple Seam Areas

	Spoil:		50’ safety bench at 40’ to 80’ height Individual slope angles of 35° with safety bench Steepened slope angle of 38° when lower slope is excavated
	Highwall:		Slope angle above 6 seam 55° not to exceed 90’ height 50’ wide safety bench at 4 seam level Slope angle 60° for 3-4 interburden Slope angle 55° above 3 seam not to exceed 90’ without safety bench

Impediments/Highwalls & Endwalls

Slopes 45° with 50’ safety bench at 4 seam or maximum of 90’ from pit floor

NOTE: Dragline setback: 15’ from tub to highwall crest
20’ from tub to spoilside crest

     An additional geotechnical evaluation is underway to develop criteria for future mining areas and new equipment utilization such as the BWE/dragline tandem system.

 2-6 

XXXXXX ANNUAL MINE PLAN
GEOTECHNICAL PARAMETERS

FIGURE 2.1

Area B

Highwall		-		all slope angles 45º (Area I), 50º (Area II)
				50’ safety bench at max 120’ height above 6 seam
				50’ safety bench at max 180’ height above 6 seam
				maximum total overburden depth 180’ (maximum 90’ chop)
				maximum dragline operating bench height 120’
				dragline setback 15’ minimum
Spoil		-		normal slope angles 35º, modified spoilside slope angles 38º
				50’ safety bench at 65’ to 85’ height when operating spoilside
				dragline setback 30’ minimum

TYPICAL TWO PASS MINING WITH ADVANCE CHOP
SINGLE SEAM MULTIPLE SEAM

[GRAPHIC MATERIAL]

TYPICAL THREE PASS MINING WITH ADVANCE CHOP
MULTIPLE SEAM

[GRAPHIC MATERIAL]

 2-7 

XXXXXX ANNUAL MINE PLAN
GEOTECHNICAL PARAMETERS

FIGURE 2.2

Area C

Highwall		-		all slope angles 45º (Area I), 50º (Area II), 55º (Area III)
				30’ safety bench at 4 seam bench level
				30’ safety bench at min 3 seam bench or 120’ height above 6 seam
				50’ safety bench at max 180’ height above 8 seam
				maximum total overburden depth 180’ (maximum 90’ chop)
				maximum dragline operating bench height 120’
				dragline setback 15’ minimum
Spoil		-		normal slope angles 35º, modified spoilside slope angles 38º
				50’ safety bench at 65’ to 80’ height when operating spoilside
				dragline setback 30’ minimum

TYPICAL THREE PASS MULTIPLE SEAM WITH CHOP

[GRAPHIC MATERIAL]

 2-8 

XXXXXX ANNUAL MINE PLAN
GEOTECHNICAL PARAMETERS

FIGURE 2.3

Area D

Highwall		-		all slope angles 45º (Area I), 50º (Area II), 55º (Area III)
				All XXX xxxxx xxxxxx 00x
				00’ safety bench at 4 seam bench level
				dragline setback 15’ minimum
Spoil		-		normal slope angles 35º, modified spoilside slope angles 38º
				50’ safety bench at 65’ to 85’ height when operating spoilside
				dragline setback 30’ minimum

TYPICAL BOTTOM PASS WITH CHOPCUT

[GRAPHIC MATERIAL]

TYPICAL 5/6 INTERBURDEN SPOILSIDE REMOVAL

[GRAPHIC MATERIAL]

 2-9 

III. GEOLOGY

PRODUCTION DRILLING PROGRAM

 3-1 

IV. MINE DESIGN

4.1 STRIPPING

DL25 (Area B)

     DL25 starts in the southwestern end of Area B and works to the northeast. Areas where depths are less than 100 feet will be mined using a simple sidecast method. Areas that contain a single lignite seam and overburden in excess of 100 feet will be mined using a two-pass method of chopcut, keyway and spoilside modes of digging. Multiple seam areas will utilize a three-pass method incorporating a top pass into the sequence. DL25 productivity is based on actual historical rates adjusted to reflect the full-time use of high-pro buckets.

     The abandoned underground mines will be mined by dragline during the 1999 — 2008 time frame. A ground control plan has been approved by MSHA. Exhibit 9.1 shows the DL25 sequence.

XX 00 (Xxxxx X & XX)

     XX00 will remain in the northern C pits through 1999 and move to the south pits in 2000. Overburden will be mined using a three-pass method; including chopcut, top pass and spoilside modes of digging. In the far eastern portion of Area C, only the 3 and 4 seams will be mined and a chopcut/bottom pass mode of operation will be used. In early 2005, DL26 finishes Area C and moves to the north end of Area BX where it continues mining to the south. Exhibit 9.2 shows the DL26 sequence.

DL27 (Areas D & DX & E & F)

     DL27 starts the sequence working half pits in Area D with DL28. These Area D pits have been designed with changing widths, to realign them to a straight pit as soon as possible. In the third quarter of 1998, DL27 moves to the east-west pits before beginning in Area DX in mid-1999.

     DL27 begins mining the 4 and 5 seam area on the western end of the DX block, with pits that run generally north-south. It will continue on this alignment through pit 22 and then boxcut in on the southwestern corner of DX and mine down to 6 seam heading east. After Pit 14, DL27 moves to Area E.

     The move to Area E is in the second quarter of 2001. The boxcut is in the southwestern xxxxx along the cropline and under the current alignment of SH164. Mining will proceed to the northeast until Demney is reached. The dragline then moves to the north end of Area F.

     DL27 arrives in Area F in the 2nd quarter of 2004. The pits run east-west and progress from the north end of Area F to the south. Exhibits 9.2 and 9.3 show the sequence for DL27.

DL28 (Areas D & DX & E & DX & E)

 4-1 

     DL28 continues mining to the east in Area D, following the BWE. The BWE has been leaving 20 to 40 feet of its material for DL28 to remove in a chop mode. This was done to give the dragline as much overburden as possible while still maintaining proper lignite inventories. In mid-1998 the BWE leaves its prebench working face and begins working in tandem with DL28. A typical range diagram for the tandem operation may be seen in Figure 4.1. Once the eastern edge of mining is reached in Area D, the dragline boxcuts the east-west pit to the south and mines south into Area DX. When the dragline reaches the shorter pits, in the 2nd quarter 2003, it makes the first of its three moves.

     The first move is up to the middle of Area E. The pits run northeast-southwest and the mobile fleet is scheduled to take the first 12 pits. The trucks will have prepared a boxcut for the dragline as it starts digging pit 13. DL28 digs 23 more pits to the southeast and in the 1st quarter of 2005 makes its second move.

     DL28 goes back to the southwestern end of DX and resumes mining where DL27 stopped. Mining continues to the northeast in DX until it is finished in late 2006. At that point the dragline moves back to Area E.

     This third move gets the dragline to the north pits in Area E. The dragline starts at the north end and works to the south. Once this part of Area E is exhausted the machine goes back to the pit that it left in 2005 and resumes mining to the east in Area E. Exhibit 9.2 shows the sequence for DL28.

BWE (Areas D & DX & E & DX & B & BX)

     The BWE will always be operating in tandem with a dragline. It is scheduled to produce 14 million bcy/yr. In “tandem” means that those components of the BWE system which are working will be in the same pit as the dragline. Usually, the BWE, and the spreader will be in use and possibly the beltwagon if extra reach is needed.

     The BWE works with DL28 until mid-2006 when it moves to DL25 in Area B. At the end of 2007, the BWE moves to Area BX. It is idle until the 3rd quarter, 2008 when it begins working with DL26.

4.2 CLEARING

1999 ANNUAL MINE PLAN

ESTIMATED CLEARING ACRES

Year		1999				2000				2001				2002				2003				2004				2005				2006				2007				2008
Acres			250				280				280				250				250				250				250				250				250				250

4-2

4.3 LIGNITE AND OVERBURDEN QUANTITIES

     From the sequences discussed in Section 4.1, the lignite and levelized overburden quantities were calculated and categorized by dragline as shown in Tables 4.2 through 4.5. Table 4.6 summarizes these quantities for all of the areas combined.

     A summary of tons uncovered by dragline and delivered to HL&P, along with expected inventory fluctuations is shown in Table 4.6. Lignite quality is summarized in Table 4.7.

4-3

TABLE 4.1
XXXXXX MINE — 1999 ANNUAL MINE PLAN
AREA B QUANTITIES — DL25 & MOBB (1000 C.Y.)

LEVELIZED

		1000									DL				TOTAL									TRUCK				DOZER				TRUCK				DOZER								TOTAL				CONTRACT					TOTAL				XXXXX
		XXXX					XX XXX				XXXXXXXX				XX					PRE-BENCH				IN-PIT				IN-PIT				5/6 LB				5/6 LB				SPGM				MOBILE				MOBILE					BANK				YARDS
Mar.			—					—				—				—					—				—				—				—				—				—				—									—				—
Apr.			209					1,995				—				1,995					68				—				—				—				—				129				197									2,192				2,192
May			181					1,984				—				1,984					99				—				—				—				—				84				183									2,167				2,167
Jun.			70					1,625				12				1,637					44				—				—				—				—				63				107									1,732				1,744
Jul.			49					1,684				13				1,697					38				—				—				—				—				3				41									1,725				1,738
Aug.			87					1,608				79				1,687					130				—				—				—				—				30				160									1,768				1,847
Sep.			83					1,557				76				1,633					52				—				—				—				—				14				66									1,623				1,699
Oct.			122					1,631				54				1,685					129				—				—				—				—				56				185									1,816				1,870
Nov.			96					1,517				110				1,627					51				—				—				—				—				41				92									1,609				1,719
Dec.			109					1,547				81				1,628					—				—				—				—				—				—				—									1,547				1,628
1998			1,006					15,148				425				15,573					611				—				—				—				—				420				1,031				—					16,179				16,604
Jan.			89					1,595				93				1,688					—				—				—				—				—				—				—									1,595				1,688
Feb.			98					1,448				74				1,522					42				—				—				—				—				49				91									1,539				1,613
Mar.			105					1,614				72				1,636					—				—				—				—				—				—				—									1,614				1,686
Apr.			114					1,576				54				1,630					9				—				—				—				—				50				59									1,635				1,689
May			92					1,570				113				1,683					—				—				—				—				—				6				6									1,576				1,689
Jun.			88					1,514				113				1,627					15				—				—				—				—				17				32									1,546				1,659
Jul.			136					1,613				67				1,680					1				—				—				—				—				11				12									1,625				1,692
Aug.			40					1,647				50				1,697					9				—				—				—				—				40				49									1,696				1,746
Sep.			108					1,497				126				1,623					—				—				—				—				—				—				—									1,497				1,623
Oct.			141					1,619				63				1,682					—				—				—				—				—				—				—									1,619				1,682
Nov.			50					437				63				500					7				—				—				—				—				50				57									494				557
Dec.			61					652				—				652					—				—				—				—				—				—				—									652				652
1999			1,122					16,782				888				17,670					83				—				—				—				—				223				306				—					17,088				17,976
1st Qtr.			447					5,033				—				5,033					8				—				—				—				—				107				115									5,148				5,148
2nd Qtr.			630					4,925				—				4,925					22				900				600				—				—				382				1,904									6,829				6,829
3rd Qtr.			554					4,978				—				4,978					17				550				367				—				—				228				1,162									6,140				6,140
4th Qtr.			1,005					4,784				134				4,918					150				2,008				1,339				—				—				338				3,835									8,619				8,753
2000			2,636					19,720				134				19,854					197				3,458				2,306				—				—				1,055				7,016				—					26,736				26,870
1st Qtr.			814					4,703				151				4,854					55				968				645				—				—				319				1,987									6,690				6,841
2nd Qtr.			356					4,685				244				4,929					13				—				—				—				—				120				133									4,818				5,062
3rd Qtr.			380					4,737				252				4,989					46				—				—				—				—				116				162									4,899				5,151
4th Qtr.			315					4,723				210				4,933					170				—				—				—				—				151				321									5,044				5,254
2001			1,865					18,848				857				19,705					284				968				645				—				—				706				2,603				—					21,451				22,308
2002			1,787					19,102				588				19,690					430				—				—				—				—				603				1,033									20,135				20,723
2003			1,482					19,281				395				19,676					731				—				—				—				—				597				1,328									28,609				21,044
2004			1,670					18,829				855				19,684					4,290				632				421				—				—				768				6,111									24,940				25,795
2005			1,655					18,301				1,427				19,728					493				1,469				979				—				—				835				3,776									22,077				23,504
2006			1,557					25,373				957				26,330					388				—				—				—				—				674				1,062									26,435				27,392
2007			2,224					31,981				—				31,981					424				—				—				—				—				941				1,365									33,346				33,346
2008			1,546					19,605				445				20,050					421				—				—				—				—				653				1,074									20,679				21,124
TOTAL			18,550					222,970				6,971				229,941					8,352				6,527				4,351				—				—				7,475				26,705				—					249,675				256,646

     Note: The BWE produces 14 million bcy/yr in tandem with the dragline. It works with DL25 from mid-2006 through the end of 2007.

4-4

TABLE 4.2
XXXXXX MINE — 1999 ANNUAL MINE PLAN
AREA B QUANTITIES — DL25 & MOBB (1000 C.Y.)

LEVELIZED

		1000									DL				TOTAL									TRUCK				DOZER				TRUCK				DOZER								TOTAL				CONTRACT					TOTAL				XXXXX
		XXXX					XX XXX				XXXXXXXX				XX					PRE-BENCH				IN-PIT				IN-PIT				5/6 LB				5/6 LB				SPGM				MOBILE				MOBILE					BANK				YARDS
Mar.			—					—				—				—					—				—				—				—				—				—				—									—				—
Apr.			88					1,647				—				1,647					20				—				—				—				—				9				29									1,676				1,676
May			200					1,383				238				1,621					7				—				—				14				5				—				25									1,408				1,646
Jun.			206					1,503				95				1,598					137				—				—				1				0				26				164									1,667				1,762
Jul.			203					1,453				190				1,643					—				—				—				15				5				—				20									1,473				1,663
Aug.			195					1,508				143				1,651					—				—				—				1				0				—				1									1,509				1,652
Sep.			122					1,530				89				1,619					—				—				—				15				5				—				20									1,550				1,639
Oct.			226					1,359				266				1,625					—				—				—				4				1				—				5									1,364				1,630
Nov.			32					496				—				496					—				—				—				—				—				—				—									496				496
Dec.			206					1,355				222				1,577					—				—				—				20				7				—				27									1,382				1,604
1998			1,478					12,234				1,243				13,477					164				—				—				69				23				35				291				—					12,525				13,768
Jan.			155					1,537				133				1,670					—				—				—				7				2				—				9									1,546				1,679
Feb.			220					1,158				293				1,451					—				—				—				25				8				—				33									1,191				1,484
Mar.			116					1,588				94				1,682					—				—				—				11				4				9				24									1,612				1,706
Apr.			176					1,370				215				1,585					71				—				—				10				3				51				135									1,505				1,720
May			159					1,420				225				1,645					—				—				—				18				6				—				24									1,444				1,669
Jun.			106					1,587				45				1,632					105				—				—				—				—				51				156									1,743				1,788
Jul.			189					1,412				225				1,637					105				—				—				24				8				48				185									1,597				1,822
Aug.			152					1,484				172				1,656					—				—				—				32				11				—				43									1,527				1,699
Sep.			104					1,591				43				1,634					77				—				—				4				1				49				131									1,722				1,765
Oct.			150					1,479				172				1,651					—				—				—				28				9				—				37									1,516				1,688
Nov.			139					1,472				130				1,602					—				—				—				21				7				—				28									1,500				1,630
Dec.			72					1,627				21				1,648					90				—				—				—				—				121				211									1,838				1,859
1999			1,738					17,725				1,768				19,493					448				—				—				180				60				329				1,017				—					18,742				20,210
1st Qtr.			759					4,098				151				4,249					—				—				—				13				4				—				17									4,115				4,266
2nd Qtr.			689					3,861				—				3,861					—				—				—				—				—				—				—									3,861				3,861
3rd Qtr.			654					3,903				—				3,903					—				—				—				—				—				—				—									3,903				3,903
4th Qtr.			440					3,803				113				3,916					6				—				—				1				0				1				8									3,811				3,924
2000			2,542					15,665				264				15,929					6				—				—				14				5				1				26				—					15,691				15,955
1st Qtr.			467					3,503				339				3,842					48				—				—				6				2				4				60									3,563				3,902
2nd Qtr.			506					3,611				258				3,869					83				—				—				4				1				6				94									3,705				3,963
3rd Qtr.			532					3,855				400				4,255					129				—				—				8				3				6				146									4,001				4,401
4th Qtr.			418					4,440				418				4,858					338				—				—				18				6				47				409									4,849				5,267
2001			1,923					15,409				1,415				16,824					598				—				—				36				12				63				709				—					16,118				17,533
2002			2,065					18,237				1,226				19,463					2,970				—				—				126				42				536				3,674									21,911				23,137
2003			1,768					17,186				2,269				19,455					5,082				—				—				225				75				1,296				6,678									23,864				26,133
2004			1,589					17,753				1,742				19,495					3,509				—				—				192				64				1,052				4,817									22,570				24,312
2005			1,481					18,700				860				19,560					4,250				—				—				72				24				726				5,072									23,772				24,632
2006			2,417					18,352				857				19,209					1,545				—				—				171				57				1,133				2,906									21,258				22,115
2007			2,729					18,693				597				19,290					1,235				—				—				246				82				1,269				2,832									21,525				22,122
2008			3,318					22,663				290				22,953					5,251				—				—				241				80				3,898				9,470									32,133				33,423
TOTAL			23,048					192,617				12,531				205,148					25,058				—				—				1,572				524				10,338				37,492				—					230,109				242,640

Note: The BWE produces 14 million bcy/yr in tandem with the dragline. It starts with DL26 in 3^rd quarter, 2004. DL26 moves to the south C pits in Jan. 2000 and then to Area BX in late 2005.

4-5

TABLE 4.3
XXXXXX MINE — 1999 ANNUAL MINE PLAN
QUANTITIES — DL27 & MOBE & MOBF (1000 C.Y.)

LEVELIZED

		1000									DL				TOTAL									TRUCK				DOZER				TRUCK				DOZER								TOTAL				CONTRACT					TOTAL				XXXXX
		XXXX					XX XXX				XXXXXXXX				XX					PRE-BENCH				IN-PIT				IN-PIT				5/6 LB				5/6 LB				SPGM				MOBILE				MOBILE					BANK				YARDS
Mar.			—					—				—				—					—				—				—				—				—				—				—									—				—
Apr.			203					1,830				—				1,830					—				—				—				—				—				106				106									1,936				1,936
May			260					1,810				—				1,810					—				—				—				—				—				35				35									1,845				1,845
Jun.			244					1,739				—				1,739					—				—				—				—				—				229				229									1,968				1,968
Jul.			229					1,697				—				1,697					—				—				—				—				—				443				443									2,140				2,140
Aug.			133					1,661				—				1,661					150				—				—				—				—				167				317									1,978				1,978
Sep.			125					1,634				—				1,634					152				—				—				—				—				237				389									2,023				2,023
Oct.			168					1,670				—				1,670					200				—								—				—				106				306									1,976				1,976
Nov.			226					1,598				141				1,739					—				347				231				8				3				—				589									2,187				2,328
Dec.			220					1,619				—				1,619					—				—				—				—				—				454				454									2,073				2,073
1998			1,808					15,258				141				15,399					502				347				231				8				3				1,772				2,868				—					18,126				18,267
Jan.			263					1,650				—				1,650					400				—				—				—				—				41				441									2,091				2,091
Feb.			244					1,519				—				1,519					—				—				—				—				—				416				416									1,935				1,935
Mar.			60					304				—				304					300				—				—				5				2				200				506									810				810
Apr.			225					1,597				—				1,597					200				—				—				—				—				166				366									1,963				1,963
May			125					1,831				—				1,831					100				—				—				—				—				153				253									2,084				2,084
Jun.			141					1,743				—				1,743					200				—				—				—				—				152				352									2,095				2,095
Jul.			149					1,809				—				1,809					—				—				—				—				—				140				140									1,949				1,949
Aug.			183					1,852				—				1,852					—				—				—				—				—				74				74									1,926				1,926
Sep.			162					1,752				—				1,752					—				—				—				—				—				55				55									1,807				1,807
Oct.			149					1,855				—				1,855					—				—				—				—				—				69				69									1,924				1,924
Nov.			186					1,742				—				1,742					—				—				—				—				—				71				71									1,813				1,813
Dec.			165					1,807				—				1,807					—				—				—				5				2				86				93									1,900				1,900
1999			2,052					19,461				—				19,461					1,200				—				—				10				3				1,623				2,836				—					22,297				22,297
1st Qtr.			420					4,620				201				4,821					450				—				—				206				69				4				729									5.349				5,550
2nd Qtr.			211					4,491				337				4,828					160				—				—				312				104				120				696									5,187				5,524
3rd Qtr.			350					4,578				281				4,859					827				—				—				538				179				204				1,748									6,326				6,607
4th Qtr.			139					2,352				288				2,640					150				—				—				200				67				71				487									2,839				3,127
2000			1,120					16,041				1,107				17,148					1,587				—				—				1,256				419				399				3,660				—					19,701				20,808
1st Qtr.			346					4,366				394				4,760					—				—				—				412				137				230				779									5,145				5,539
2nd Qtr.			817					5,360				106				5,466					—				—				—				—				—				234				234									5,594				5,700
3rd Qtr.			991					5,654				—				5,654					—				—				—				37				12				388				437									6,091				6,091
4th Qtr.			1,117					5,749				—				5,749					—				—				—				77				26				270				372									6,121				6,121
2001			3,271					21,129				500				21,629					—				—				—				525				175				1,122				1,822				—					22,951				23,451
2002			3,714					22,212				14				22,226					3,000				—				—				148				49				1,715				4,912									27,124				27,138
2003			3,316					21,150				100				21,250					—				4,226				2,817				—				—				1,500				8,543									29,693				29,793
2004			2,403					20,213				150				20,363					2,743				950				634				29				10				1,596				5,962									26,175				26,325
2005			3,023					20,589				473				21,062					2,250				1,584				1,056				190				63				490				5,633									26,222				26,695
2006			4,120					20,358				803				21,161					6,487				4,751				3,168				150				50				2,007				16,613									36,971				37,774
2007			3,402					19,825				1,254				21,079					9,436				2,176				1,451				108				36				1,561				14,768									34,593				35,847
2008			2,755					20,859				473				21,332					5,720				—				—				157				52				965				6,894									27,753				28,226
TOTAL			30,984					117,095				5,015				222,110					32,925				14,035				9,356				2,580				860				14,755				74,511				0					291,606				296,621

Note: DL27 moves to Area DX in April 99, the west end of Area E in April 2001 and the north end of Area F in Mid-2004.

4-6

TABLE 4.4
XXXXXX MINE — 1999 ANNUAL MINE PLAN
AREA B QUANTITIES — DL28 (1000 C.Y.)

LEVELIZED

		1000									DL				TOTAL									TRUCK				DOZER				TRUCK				DOZER								TOTAL				CONTRACT					TOTAL				XXXXX
		XXXX					XX XXX				XXXXXXXX				XX					PRE-BENCH				IN-PIT				IN-PIT				5/6 LB				5/6 LB				SPGM				MOBILE				MOBILE					BANK				YARDS
Mar.			—					—				—				—					—				—				—				—				—				—				—									—				—
Apr.			244					2,599				—				2,599					205				—				—				—				—				25				230									2,829				2,829
May			220					2,558				—				2,558					328				—				—				—				—				26				354									2,912				2,912
Jun.			234					2,489				—				2,489					—				—				—				—				—				—				—									2,489				2,489
Jul.			307					2,582				—				2,582					—				—				—				—				—				1				1									2,583				2,583
Aug.			418					2,862				—				2,862					22				—				—				—				—				—				22									2,884				2,884
Sep.			406					2,771				—				2,771					25				—				—				—				—				5				30									2,801				2,801
Oct.			378					2,862				—				2,862					—				—				—				—				—				5				5									2,867				2,867
Nov.			342					2,771				—				2,771					50				—				—				—				—				3				53									2,824				2,824
Dec.			349					2,771				—				2,771					—				—				—				—				—				26				26									2,797				2,797
1998			2,898					24,265				—				24,265					630				—				—				—				—				91				721				—					24,986				24,986
Jan.			437					3,551				—				3,551					—				—				—				—				—				155				155									3,706				3,706
Feb.			394					3,231				—				3,231					—				—				—				—				—				12				12									3,243				3,243
Mar.			425					3,577				—				3,577					—				—				—				—				—				78				78									3,655				3,655
Apr.			392					3,464				—				3,464					10				—				—				—				—				10				20									3,484				3,484
May			278					3,577				—				3,577					273				—				—				—				—				46				319									3,896				3,896
Jun.			435					3,464				—				3,464					1				—				—				—				—				36				37									3,501				3,501
Jul.			465					3,577				—				3,577					109				—				—				—				—				139				248									3,825				3,825
Aug.			319					2,538				—				2,538					258				—				—				—				—				183				441									2,979				2,979
Sep.			306					3,464				—				3,464					213				—				—				—				—				179				392									3,856				3,856
Oct.			287					3,577				—				3,577					281				—				—				—				—				218				499									4,076				4,076
Nov.			301					3,464				—				3,464					182				—				—				—				—				246				428									3,892				3,892
Dec.			227					3,464				—				3,464					79				—				—				—				—				196				275									3,739				3,739
1999			4,266					40,948				—				40,948					1,406				—				—				—				—				1,498				2,904				—					43,852				43,852
1st Qtr.			892					10,386				—				10,386					2,200				—				—				—				—				462				2,662									13,048				13,048
2nd Qtr.			898					10,499				—				10,499					588				—				—				—				—				366				954									11,453				11,453
3rd Qtr.			828					10,619				—				10,619					336				—				—				—				—				383				719									11,338				11,338
4th Qtr.			1,000					10,499				—				10,499					1,209				—				—				—				—				283				1,492									11,991				11,991
2000			3,618					42,003				—				42,003					4,333				—				—				—				—				1,494				5,827				—					47,830				47,830
1st Qtr.			755					10,386				—				10,386					1,391				—				—				—				—				17				1,408									11,794				11,794
2nd Qtr.			774					10,499				—				10,499					2,498				—				—				—				—				492				2,990									13,489				13,489
3rd Qtr.			691					10,619				—				10,619					2,088				—				—				—				—				632				2,720									13,339				13,339
4th Qtr.			664					10,499				—				10,499					1,679				—				—				—				—				701				2,380									12,879				12,879
2001			2,884					42,003				—				42,003					7,656				—				—				—				—				1,842				9,498				—					51,501				51,501
2002			2,883					42,003				—				42,003					2,503				—				—				—				—				1,769				4,272									46,275				46,275
2003			3,539					42,003				—				42,003					37				—				—				—				—				2,306				2,343									44,346				44,346
2004			4,300					42,003				—				42,003					515				—				—				146				49				1,278				1,987									43,990				43,990
2005			3,802					42,003				—				42,003					2,986				—				—				2,815				938				541				7,280									49,283				49,283
2006			1,804					30,011				776				30,787					479				—				—				—				—				915				1,394									31,405				32,181
2007			1,668					25,429				46				28,475					—				—				—				—				—				1,304				1,304									29,733				29,779
2008			2,319					28,058				634				28,692					620				—				—				13				4				762				1,399									29,457				30,091
TOTAL			33,981					403,729				1,456				405,185					21,165				—				—				2,973				991				13,800				38,929				—					442,658				444,114

Note: The BWE produces 14 million bcy/yr in tandem with the dragline. It works with DL28 to DL25 in mid-2006.
DL28 moves to Area E in 2^nd Qtr. 2003, back to DX in 1^st Qtr. 2005, and to north Area E pits in late 2006.

4-7

TABLE 4.5
XXXXXX MINE — 1999 ANNUAL MINE PLAN
COMBINED MINING AREA QUANTITIES (1000 C.Y.)

LEVELIZED

		1000									DL				TOTAL									TRUCK				DOZER				TRUCK				DOZER								TOTAL				CONTRACT					TOTAL				XXXXX
		XXXX					XX XXX				XXXXXXXX				XX					PRE-BENCH				IN-PIT				IN-PIT				5/6 LB				5/6 LB				SPGM				MOBILE				MOBILE					BANK				YARDS
Mar.			—					—				—				—					—				—				—				—				—				—				—				—					—				—
Apr.			744					8,071				—				8,071					293				—				—				—				—				269				562				—					8,633				8,633
May			861					7,735				238				7,973					434				—				—				14				5				145				597				—					8,332				8,570
Jun.			754					7,356				107				7,463					181				—				—				1				0				318				500				—					7,856				7,963
Jul.			788					7,416				203				7,619					38				—				—				15				5				447				505				—					7,921				8,124
Aug.			833					7,639				222				7,861					302				—				—				1				0				197				500				—					8,139				8,361
Sep.			736					7,492				165				7,657					229				—				—				15				5				256				505				—					7,997				8,162
Oct.			894					7,522				320				7,842					329				—				—				4				1				167				501				—					8,023				8,343
Nov.			696					6,382				251				6,633					101				347				231				8				3				44				734				—					7,116				7,367
Dec.			884					7,292				303				7,995					—				—				—				20				7				480				507				—					7,799				8,102
1998			7,190					66,905				1,809				48,714					1,907				347				231				77				26				2,323				4,911				—					71,816				73,625
Jan.			944					8,333				226				8,559					400				—				—				7				2				196				605				—					8,938				9,164
Feb.			956					7,356				367				7,723					42				—				—				25				8				477				552				—					7,908				8,275
Mar.			706					7,083				166				7,249					300				—				—				16				5				287				608				—					7,691				7,857
Apr.			907					8,007				269				8,276					290				—				—				10				3				277				580				—					8,587				8,856
May			654					8,398				338				8,736					373				—				—				18				6				205				602				—					9,000				9,338
Jun.			770					8,308				158				8,466					321				—				—				—				—				256				577				—					8,885				9,043
Jul.			939					8,411				292				8,703					215				—				—				24				8				338				585				—					8,996				9,288
Aug.			694					7,521				222				7,743					267				—				—				32				11				297				607				—					8,128				8,350
Sep.			680					8,304				169				8,473					290				—				—				4				1				283				578				—					8,882				9,051
Oct.			727					8,530				235				8,765					281				—				—				28				9				287				605				—					9,135				9,370
Nov.			676					7,115				193				7,308					189				—				—				21				7				367				584				—					7,699				7,892
Dec.			525					7,550				21				7,571					169				—				—				5				2				403				579				—					8,129				8,150
1999			9,178					94,916				2,656				97,572					3,137				—				—				190				63				3,673				7,963				—					101,979				104,635
1st Qtr.			2,518					24,137				352				24,489					2,658				—				—				219				73				575				3,523				—					27,660				28,012
2nd Qtr.			2,428					23,776				337				24,113					770				900				600				312				104				868				3,354				—					27,330				27,667
3rd Qtr.			2,386					24,078				281				24,359					1,180				550				367				538				179				815				3,629				—					27,707				27,988
4th Qtr.			2,584					21,438				535				21,973					1,515				2,008				1,339				201				67				693				5,823				—					27,261				27,796
2000			9,916					93,429				1,505				94,934					6,123				3,458				2,306				1,270				423				2,949				16,529				—					109,958				111,463
1st Qtr.			2,382					22,958				884				23,842					1,494				968				645				418				139				570				4,234				—					27,192				28,076
2nd Qtr.			2,453					24,155				608				24,763					2,594				—				—				4				1				852				3,451				—					27,606				28,214
3rd Qtr.			2,594					24,865				652				25,517					2,263				—				—				45				15				1,142				3,465				—					28,330				28,982
4th Qtr.			2,514					25,411				628				26,039					2,187				—				—				95				32				1,169				3,432				—					28,893				29,521
2001			9,943					97,389				2,772				109,161					8,538				968				645				561				187				3,733				14,632				—					112,021				114,793
2002			10,449					101,554				1,828				103,382					8,903				—				—				274				91				4,623				13,891				—					115,445				117,273
2003			10,105					99,620				2,764				102,384					5,850				4,226				2,817				225				75				5,699				18,892				—					118,512				121,276
2004			9,962					98,798				2,747				101,545					11,057				1,582				1,055				367				122				4,694				18,877				—					117,675				120,422
2005			9,961					99,593				2,760				102,353					9,979				3,053				2,035				3,077				1,026				2,592				21,761				—					121,354				124,114
2006			9,898					94,094				3,393				97,487					8,899				4,751				3,168				321				107				4,729				21,975				—					116,069				119,462
2007			10,023					93,928				1,897				100,825					11,095				2,176				1,451				354				118				5,075				20,269				—					119,197				121,094
2008			9,938					91,185				1,842				93,027					12,012				—				—				411				137				6,278				18,837				—					110,022				111,864
TOTAL			186,563					1,036,411				25,973				1,062,384					87,500				20,561				13,708				7,125				2,378				46,368				177,637				—					1,214,048				1,240,021

4-8

TABLE 4.6
XXXXXX MINE — 1999 ANNUAL MINE PLAN
INVENTORY SCHEDULE

																																							TBtu				TBtu				TBtu
		UNCOVERED TONS (1000’s)																								Delivered				Inventory					ROM				Uncovered				Delivered				Inventory
		XX 00				XX 00				XX 00				XX 00				Mobile				Total				Total				Total					Quality				Total				Total				Total
MAR.																															358					6,673												4.78
APR.			209				88				203				244				0				744				619				483					6,351				9.45				7.86				6.37
MAY			181				200				260				220				0				861				834				510					6,585				11.34				10.98				6.73
JUNE			70				206				244				234				0				754				804				461					6,664				10.05				10.71				6.07
JULY			49				203				229				307				0				788				800				449					6,942				10.94				11.11				5.90
AUG.			87				195				133				418				0				833				818				464					6,795				11.32				11.11				6.11
SEPT.			83				122				125				406				0				736				797				403					6,719				9.89				10.71				5.29
OCT.			122				226				368				378				0				894				815				482					6,739				12.05				10.98				6.36
NOV.			96				32				119				342				107				696				806				372					6,643				9.25				10.71				4.90
DEC.			109				206				220				349				0				884				824				432					6,663				11.78				10.98				5.70
1998 Tot.			1,006				1,478				1,701				2,898				107				7,190				7,116				432					6,681				96.07				95.15				5.70
JAN.			89				155				263				437				0				944				823				553					6,711				12.67				11.05				7.32
FEB.			95				220				244				394				0				956				745				764					6,715				12.84				10.00				10.16
MAR.			105				116				60				425				0				706				576				894					6,735				9.51				7.76				11.91
APR.			114				176				225				392				0				907				410				1,391					6,742				12.23				5.53				18.61
MAY			92				159				125				278				0				654				566				1,480					6,628				8.67				7.50				19.78
JUNE			88				106				141				435				0				770				816				1,433					6,688				10.30				10.92				19.16
JULY			136				189				149				465				0				939				844				1,528					6,704				12.59				11.32				20.43
AUG.			40				152				183				319				0				694				866				1,356					6,535				9.07				11.32				18.18
SEPT.			108				104				162				306				0				680				834				1,201					6,544				8.90				10.92				16.16
OCT.			141				150				149				287				0				727				853				1,076					6,637				9.65				11.32				14.49
NOV.			50				139				186				301				0				676				818				933					6,672				9.02				10.92				12.59
DEC.			61				72				165				227				0				525				868				590					6,438				6.76				11.18				8.17
1999 Tot.			1,122				1,738				2,052				4,266				0				9,178				9,019				590					6,658				122.21				119.74				8.17
1st Qtr.			447				759				420				892				0				2,518				2,502				606					6,585				33.16				32.95				8.38
2nd Qtr.			393				689				211				898				237				2,428				2,102				932					6,586				31.98				27.68				12.68
3rd Qtr.			408				654				350				828				146				2,386				2,524				794					6,526				31.14				32.95				10.87
4th Qtr.			475				440				139				1,000				530				2,584				2,616				762					6,550				33.85				34.27				10.45
2000 Tot.			1,723				2,542				1,120				3,618				913				9,916				9,744				762					6,562				130.13				127.85				10.45
1st Qtr.			437				467				346				755				377				2,382				2,414				729					6,524				31.08				31.50				10.03
2nd Qtr.			356				506				817				774				0				2,453				2,415				768					6,523				32.00				31.50				10.53
3rd Qtr.			380				532				991				691				0				2,594				2,545				817					6,448				33.45				32.82				11.16
4th Qtr.			315				418				1,117				664				0				2,514				2,688				643					6,348				31.92				34.13				8.95
2001 Tot.			1,488				1,923				3,271				2,884				377				9,943				10,062				643					6,459				128.45				129.95				8.95
2002			1,787				2,065				3,714				2,883				0				10,449				9,971				1,120					6,492				135.66				129.46				15.15
2003			1,482				1,768				2,481				3,539				835				10,105				9,826				1,399					6,329				127.90				124.37				18.68
2004			1,396				1,589				2,103				4,300				574				9,962				10,042				1,319					6,337				126.25				127.26				17.67
2005			1,247				1,481				2,523				3,802				908				9,961				10,090				1,191					6,469				128.87				130.54				16.00
2006			1,557				2,417				2,620				1,804				1,500				9,898				10,080				1,008					6,427				127.23				129.57				13.66
2007			2,224				2,729				2,712				1,668				690				10,023				9,931				1,101					6,303				126.34				125.18				14.82
2008			1,546				3,318				2,755				2,319				0				9,938				9,944				1,094					6,399				127.19				127.27				14.74
TOTAL			16,578				23,048				27,052				33,981				5,904				106,653				105,825				1,094					6,458				1,376.30				1,366.34				14.74

4-9

TABLE 4.7
XXXXXX MINE — 1999 ANNUAL MINE PLAN
LIGNITE QUALITY

		IN-PLACE																					RUN OF MINE
		TONS
PERIOD		(1000)				BTU/LB				SULFUR				ASH				MOISTURE					TONS (1000)				BTU/LB				SULFUR				ASH				MOISURE				TBTU
Mar.			0				—				—				—				—					0				0
Apr.			828				6,709				1.33				15.10				32.40					744				6,351				1.24				20.33				29.86				9.45
May			942				6,878				1.22				14.10				32.40					861				6,585				1.16				18.59				30.02				11.34
June			819				6,908				1.26				14.40				31.90					754				6,664				1.20				18.46				29.67				10.05
July			844				7,173				1.20				12.10				32.60					788				6,942				1.16				15.88				30.33				10.94
Aug.			902				7,029				1.23				13.30				32.20					833				6,795				1.18				17.23				30.01				11.32
Sept.			804				6,999				1.28				13.20				32.40					736				6,719				1.22				17.53				30.11				9.89
Oct.			966				6,987				1.18				13.40				32.30					894				6,739				1.14				17.53				30.06				12.05
Nov.			760				6,968				1.24				13.40				32.10					696				6,643				1.19				18.11				29.75				9.25
Dec.			957				6,930				1.14				13.20				32.70					884				6,663				1.10				17.42				30.39				11.78
1998			7,822				6,953				1.23				13.60				32.30					7,190				6,681				1.17				17.87				30.03				96.07
Jan.			1,025				7,001				1.18				12.70				32.80					944				6,711				1.13				17.13				30.40				12.67
Feb.			1,044				6,944				1.14				13.10				32.90					956				6,715				1.10				17.14				30.51				12.84
Mar.			769				7,025				1.31				13.00				32.50					706				6,735				1.25				17.37				30.16				9.51
Apr.			985				7,013				1.18				12.50				32.90					907				6,742				1.14				16.71				30.57				12.23
May			717				6,940				1.40				13.60				32.20					654				6,628				1.33				18.14				29.84				8.67
June			838				6,996				1.37				13.30				32.20					770				6,688				1.30				18.73				29.22				10.30
July			1,015				6,952				1.27				12.90				32.80					939				6,704				1.22				17.02				30.48				12.59
Aug.			755				6,828				1.24				13.30				33.20					694				6,535				1.20				17.89				30.72				9.07
Sept.			738				6,854				1.28				13.30				33.10					680				6,544				1.23				17.94				30.62				8.90
Oct.			791				6,912				1.21				13.50				32.50					727				6,637				1.16				17.84				30.08				9.65
Nov.			739				6,961				1.22				13.00				32.50					676				6,672				1.18				17.57				30.11				9.02
Dec.			585				6,838				1.28				14.10				32.30					525				6,438				1.21				19.89				29.67				6.76
1999			10,001				6,945				1.25				13.10				32.70					9,178				6,658				1.20				17.67				30.23				122.21
1st Qtr.			2,753				6,885				1.15				13.90				32.60					2,518				6,585				1.10				18.69				30.21				33.16
2nd Qtr.			2,406				6,925				1.23				13.90				32.60					2,428				6,586				1.19				18.68				30.02				31.98
3rd Qtr.			2,469				6,888				1.25				14.10				32.60					2,386				6,526				1.19				19.88				29.88				31.14
4th Qtr.			3,232				6,736				1.23				14.00				33.20					2,584				6,550				1.19				18.94				30.60				33.85
2000			10,860				6,850				1.21				14.00				32.80					9,916				6,562				1.17				19.04				36.19				130.13
1st Qtr.			2,635				6,882				1.15				13.10				33.20					2,382				6,524				1.09				19.63				30.32				31.08
2nd Qtr.			2,686				6,806				1.05				14.10				32.80					2,453				6,523				1.00				17.64				30.58				32.00
3rd Qtr.			2,880				6,740				0.96				14.40				32.80					2,594				6,448				0.94				19.38				30.28				33.45
4th Qtr.			2,785				6,701				1.00				14.70				32.70					2,514				6,348				0.96				20.01				30.17				31.92
2001			10,986				6,780				1.04				14.10				32.90					9,943				6,459				1.00				19.17				30.34				128.45
2002			11,527				6,897				0.94				13.40				32.70					10,449				6,492				0.91				18.82				30.11				135.66
2003			11,414				6,567				0.81				15.10				33.00					10,105				6,329				0.79				20,73				30.25				127.90
2004			11,178				6,735				0.87				14.10				32.90					9,962				6,337				0.84				19.82				30.05				126.25
2005			11,239				6,814				1.00				13.80				32.50					9,961				6,469				0.95				19.05				30.03				128.87
2006			11,092				6,717				1.02				14.80				32.40					9,898				6,427				0.97				21.07				29.00				127.23
2007			11,290				6,648				1.00				15.80				31.80					10,023				6,303				0.98				21.29				29.20				126.34
2008			11,398				6,719				1.01				15.40				31.70					9,938				6,399				0.98				20.43				29.16				127.19
TOTAL			118,806				6,779				1.03				14.32				32.52					106,563				6,458				0.99				19.60				29.87				1,376.30

4-10

[GRAPHIC MATERIAL]

4-11

V. DEVELOPMENT

5.1 OVERBURDEN DEWATERING

General

     All xxxxx to be drilled will have dewatering targets of 10 to 20 feet above 6 seam depending on material type encountered. These targets were developed from previous slope stability studies. Well spacing requirements will vary and are driven by subsurface structures, material thickness, relative quality of material and potentiometric levels. At selected sites, 4” monitoring xxxxx will be installed to conduct mini-pump tests for determination of localized aquifer characteristics. The mini-pump test data will be used with piezometric data for well field planning activities. The dewatering depressurization xxxxx scheduled for 1999 typically have an operational life of 12 months, but vary based on well field conditions, dewatering programs, etc. Table 5.1 lists the total number of xxxxx to be installed

Table 5.1
1999 ANNUAL MINE PLAN
6 “ DEWATERING WELL INSTALLATION TABLE

Year		1999				2000				2001				2002				2003				2004				2005				2006				2007				2008
# of xxxxx			450				375				425				450				400				475				475				300				350				400

Area B

     The initial overburden saturated thickness for the 1999 drilling area ranges from 30 to 100 feet. Overburden dewatering xxxxx installed will be placed on 200 feet centers well to well and 150 feet row to row. All xxxxx are designed to xxxxxxx the material above the 6 seam and in some cases 4/5 IB. The Area B dewatering well installation area is shown on Exhibit 9.1.

Area C

     In multiple seam areas, the designed well field will provide depressurization and ultimately, dewatering of the overburden material between the 4 seam and 5 seam. Well spacing is 300 feet well to well and 150 feet row to row. Typically, the sand unit is confined and thickness rarely exceeds 40 feet, with approximately 20 to 40 feet of excess head. The 1999 Area C dewatering well installation area is delineated on Exhibit 9.1. In the eastern portion of Area C where the 4 seam is the deepest seam to be mined, underburden xxxxx to depressurize the material below the 6 seam are no longer necessary.

5-1

Area D Dragline

     Xxxxx shown on the 1999 dewatering plan are spaced 300 feet well to well and 150 feet row to row. The well spacing has decreased (density has increased) due to underburden pressure and the 5/6 seam split. The dragline is progressing down dip and into an area of significant underburden pressure. The interburden between the 5 and 6 seam is becoming thinner and developing into a significant water bearing sand that will require more dewatering than in the past. The xxxxx should be designed to xxxxxxx the material between the 4 and 5 seams and the 5 and 6 seams. The sand above the 3 seam where there is a perched layer may require dewatering. The Area D 1999 dewatering well installation area is shown on Exhibit 9.2.

Area DX

     The 1999 dewatering well installation area for mine area DX is delineated on Exhibit 9.2. The well-spacing shown is 250 from well to well and 300 feet from row to row. Underburden xxxxx are shown only in areas of deeper cover. A pump test will be performed in Area DX before well installation to determine if the well spacing should be changed.

Underburden Depressurization

     Pit floor depressurization will be maintained by the installation of xxxxx installed on 800 to 1000 feet centers. Specific site selection for underburden xxxxx is based on material quality and structural conditions. Depressurization targets for underburden control are based upon clay thickness at the base of the 6 seam. The excess head within the areas to be mined ranges from 30 to 120 feet.

Piezometers

     Piezometers may be installed in all mining areas to monitor aquifer response. Generally, piezometer locations will have two to three two-inch xxxxx per site. Piezometers are planned to facilitate future mine planning activities and groundwater modeling efforts.

5.2 MINE ELECTRICAL SYSTEM

     Three main systems make up the mine electrical requirement. The first is the 12.5 KV system for the mine facilities. High voltage (12.5 KV) is distributed underground to the three primary buildings. Pad mounted transformers reduce the voltage to 480 volts for use in the buildings and miscellaneous structures.

5-2

     The second provides power for the crushing facility and is provided by HL&P. A 35 KV overhead line parallels the HL&P conveyor belt and is used to supply power to both HL&P’s surge bin and NWR’s facility.

     The third serves the draglines, BWE and pit areas. This system consists of nineteen miles of overhead 138 KV radial line running both east and west from a central switch yard. Three miles of line serve Area B and five miles serve Area C. Two 10 MVA skid mounted substations (one in Area B and one in Area C) reduce the voltage to 22.9 KV for the draglines. Secondary pad mounted transformers are required to further reduce the voltage from 22.9 KV to 480 volts to serve auxiliary loads such as dewatering xxxxx. Power for Area D is supplied by an eleven mile overhead 138 KV radial line from the Beargrass switch yard. A 15 MVA, a 12.5 MVA and a 10 MVA skid mounted substations reduce the voltage to 22.9 KV for the BWE and two draglines. Additional feeds to dewatering xxxxx consist of secondary pad mounted transformers required to reduce voltage to 480 KV.

     Additionally, two 12.5 KV lines (one in Area B and one in Area D) from Navasota Valley Electric Cooperative supply 480 volt power for dewatering xxxxx and a dust control water tank pump.

5.3 CIVIL DEVELOPMENT ACTIVITIES

SH 164 Grade Separator/Road Relocation (1997/2000)

     Preliminary planning and design for this relocation began in 1996 with a contract agreement between TxDOT and NWR finalized on October 3, 1996. Due to the grade separator part of this relocation, NWR will allow twenty months for design, public comment, TxDOT approval and bidding, with construction to begin in 1999. NWR has contracted with an outside consulting firm to design the roadway and grade separator. Right-of-way maps and documents will be prepared by NWR. Construction is anticipated to begin in the third quarter of 1999 with completion prior to the end of 2000.

D-E Haulroad (2000)

     In conjunction with the construction of the SH 164 Grade Separator, we will also begin construction on the approximate 1.5 miles of haulroad and dragline walkway to Area E.

5-3

NWR Regrade Equipment / Civil Construction

     The following construction projects will be planned and budgeted to be built by the NWR regrade operation:

Relocations
(99-01) Mine Creek Permanent Channel
Reclamation Ponds
1999 B-1 Reclamation Pond		1999 D4 Reclamation Pond
2000 X-0 Xxxxxxxxxxx Xxxx		0000 X-0 Reclamation Pond
2000 X-00 Xxxxxxxxxxx Xxxx		0000 X-0 Reclamation Pond
2002 B-3 Reclamation Pond

5-4

5.4  DEVELOPMENT PROJECTS

     Following is a list and brief description of the development projects scheduled between 1999 - 2008:

1999 ANNUAL MINE PLAN CIVIL DEVELOPMENT PROJECTS

MINE ROADS
YEAR				PROJECT		LENGTH		XXXXX		XXXX
Xxxx X
0000		X		X-0 Xxxxxxxx		1.19		Mi.		4
2004		C		B-3 Haulroad		1.02		Mi.		7
2005		E		B-3 Extension [Ramp]		0.15		Mi.		6
2006		E		B-3 Extension [Ramp]		0.15		Mi.		5
2007		E		B-3 Extension [Ramp]		0.19		Mi.		4
2008		E		B-3 Extension [Ramp]		0.15		Xx.		0
Xxxx XX
0000		X		XX-0 Xxxxxxxx		2.96		Mi.		8
0000		X		XX-0 Xxxxxxxx [Ramp]		0.12		Mi.		5
Area C
0000		X		X Xxxxx Xxxxxxxx Extension		0.57		Mi.		3
Xxxx X
0000		X		X-X Xxxxxxxx [Spoilside]		1.46		Mi.		LOM
Area DX
1999		E		DX Haulroad		0.41		Mi.		9
2000		E		DX-1 Extension [Ramp]		0.42		Mi.		8
2006		E		DX-2 Extension [Ramp]		0.40		Mi.		2
2007		E		DX-2 Extension [Ramp]		0.51		Mi.		2
Area B-F
2003		C		E-F Haulroad		5.40		Mi.		10
2004		E		E-F Extension		0.67		Mi.		2
Area E
2003		E		E-1 Haulroad [Ramp]		0.57		Mi.		9
2004		E		E-1 Haulroad [Ramp]		0.38		Mi.		8
2005		E		E-1 Haulroad [Ramp]		0.38		Mi.		7
2008		E		E-1 Haulroad [Ramp]		0.20		Mi.		5
2003		E		E-2 Haulroad [Ramp]		0.57		Mi.		7
2004		E		E-2 Haulroad [Ramp]		0.27		Mi.		6
2005		E		E-2 Haulroad [Ramp]		0.27		Mi.		5
2008		E		E-2 Haulroad [Ramp]		0.10		Mi.		3
Area F
0000		X		X-0 Xxxxxxxx		0.50		Mi.		2
0000		X		X-0 Xxxxxxxx		0.80		Mi.		2
0000		X		X-0 Xxxxxxxx		0.81		Mi.		2
0000		X		X-0 Xxxxxxxx		0.85		Mi.		2

5-5

SEDIMENT PONDS
YEAR				PROJECT		SIZE		UNITS		LIFE
Area C
2004		C		Sediment Pond P01-C		800		Ac-Ft		LOM
Area D
1999		E		Sediment Pond P01-D		250		Ac-Ft		LOM
1999		E		Sediment Pond P02-D		850		Ac-Ft		LOM
2001		C		Sediment Pond 026 Mod.		500		Ac-Ft		LOM
2004		C		Sediment Pond 024 Mod		950		Ac-Ft		LOM
Area E
0000		X		Xxxxxxxx Xxxx X00-X		150		Ac-Ft		LOM
0000		X		Xxxxxxxx Xxxx X00-X		60		Ac-Ft		LOM
0000		X		Xxxxxxxx Xxxx X00-X		155		Ac-Ft		LOM
2002		C		Sediment Pond P04-E		600		Ac-Ft		LOM
2006		C		Sediment Pond P05-E		250		Ac-Ft		LOM
Area F
2003		C		Sediment Pond P01-F		700		Ac-Ft		LOM
2005		C		Sediment Pond P02-F(incised)		500		Ac-Ft		LOM

RECLAMATION PONDS
YEAR				PROJECT		SIZE		UNITS		LIFE
1999		E		RP-B1 Reclamation Pond		10		ac-ft		perm
0000		X		XX-X0 Reclamation Pond		10		ac-ft		perm
0000		X		XX-X0 Reclamation Pond		10		ac-ft		perm
0000		X		XX-X0 Reclamation Pond		10		ac-ft		perm
0000		X		XX-X0 Reclamation Pond		10		ac-ft		perm
0000		X		XX-X0 Reclamation Pond		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X00 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X00 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X00 Xxx Xxxx		000		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm
0000		X		XX-X0 Xxxxxxxxxxx Xxxx		10		ac-ft		perm

5-6

DIVERSIONS
YEAR				PROJECT		LENGTH		UNITS		LIFE
Area A
99/2001		E		Mine Creek Permanent Channel		5,600		ft		perm
Area B/BX
2003		E		B-2 Diversion		8,000		ft		10
2006		E		BX-1 Clean Water Diversion		9,500		ft		2
Area C
2004		E		C-3 Clean Water Diversion		7,000		ft		perm
Area D
1999		E		D02-D Permanent Diversion		2,500		ft		perm
1999		E		D03-D Diversion		3,800		ft		4
1999		E		D04-D Clean Water Diversion		7,300		ft		LOM
2000		E		D05-D Diversion		3,000		ft		1.5
2001		E		D06-D Diversion		3,000		ft		2
2006		E		D07-D Diversion Clean Water		2,000		ft		6
2006		E		D08-D Diversion		3,500		ft		LOM
Area E
2000		E		D01-E Diversion		2,500		ft		10
0000		X		X00-X Xxxxxxxxx		1,500		ft		10
0000		X		X00-X Xxxxxxxxx / Embankment		5,000		ft		LOM
Area F
2003		E		D01-F Diversion / Embankment		4,000		ft		LOM
0000		X		X00-X Xxxxxxxxx / Embankment		7,400		ft		LOM
0000		X		X00-X Xxxxxxxxx / Embankment		5,500		ft		LOM
0000		X		X00-X Xxxxxxxxx / Embankment		6,500		ft		LOM

FACILITIES
YEAR				PROJECT		SIZE		UNITS		LIFE
2004		C		Area F Maint Fac w/Water Tank		1		Ea.		perm

DRAGLINE WALKWAYS
YEAR				PROJECT		LENGTH		UNITS		LIFE
0000		X		X-XX Xxxxxxxx Xxxxxxx - XX00		2,000		ft
0000		X		XX-X Xxxxxxxx Xxxxxxx - XX00*		11,300		ft
0000		X		X-X Xxxxxxxx Xxxxxxx - XX00*		13,400		ft
2004		C		E-F Dragline Walkway - DL27		22,700		ft
0000		X		X-XX Xxxxxxxx Xxxxxxx - XX00*		6,800		ft
0000		X		X-XX Xxxxxxxx Xxxxxxx - XX00*		6,500		ft
0000		X		XX-X Xxxxxxxx Xxxxxxx - XX00*		8,800		ft
				Note: * = highway crossing
				required

5-7

POWERLINE/TELEPHONE RELOCATIONS

YEAR				PROJECT		LENGTH		UNITS		LIFE
Area BX
2005		E		SWB Relocation (FM 39)		3.70		Mi.		Perm
0000		X		Xxxxxxxx Elect Relocation (FM 39)		3.70		Mi.		Perm
Area C
0000		X		XX&X 69KV Relocation		1.30		Mi.		Perm
Area D/DX
2000		C*		GTE Tele. Relocation (SH 164-1)		3.60		Mi.		Perm
2000		C*		Navasota Elec. 15KV (SH 164-1)		3.60		Mi.		Perm
2002		E		GTE Tele Reloc (Xxxxxxxxx)		0.60		Mi.		Perm
2005		C*		GTE Tele Relocation (SH 164-2)		2.50		Mi.		Perm
2005		C*		Navasota Elec. 15KV (SH 164-2)		2.50		Mi.		Perm
Area E
0000		X		XX 000 XX Xxxxxxxxxx		1.04		Mi.		Perm
0000		X		XX 000 XX Xxxxxxxxxx		3.70		Mi.		Perm

PUBLIC ROAD RELOCATIONS

YEAR				PROJECT		LENGTH		UNITS		LIFE
Area BX
01/03		E		FM 39 Relocation		3.60		Mi.		Perm
Area D/DX
97/00		C*		SH164 Relocation - Phase I		3.50		Mi.		LOM
1999		E		FCR 780 (Old Zion)		0.41		Mi.		Perm
0000		X		Xxxx 000/Xxxxxxx Xx		0.45		Mi.		LOM
2001		E		FCR 310 Reconstruction		1.70		Mi.		Perm
01/04		C*		SH164 Relocation - Phase II		2.50		Mi.		LOM
Area F
2006		E		Xxxxxxx Cemetery Relocation		1		Ea.		LOM
				Note: *=NWR Capital

OIL & GAS PIPELINE/GASWELL RELOCATIONS

YEAR				PROJECT		LENGTH		XXXXX		XXXX
Xxxx X
0000		X		Xxxx 0” Xxxxx (Xxxxx B) {100%}		5,000		ft		Perm
Area D
2001		E		Xxxx 4” Reloc (Xxxxx Xxx 1) {0%}		6,500		ft		Perm
Area DX
2006		E		Xxxx 4” Reloc (Xxxxxxx 1) {0%}		5,000		ft		Perm
2006		E		ARCO 20” Relocation {100%}		10,000		ft		Perm
2006		E		Xxxxxxxx 30” Relocation {100%}		9,000		ft		Perm
Area E
2000		E		Xxxxxxxx 30” (Pond P01-E) {100%}		2,000		ft		Perm
0000		X		Xxxx 0” Xxxxxxxxxx {24%}		2,500		ft		Perm
2002		E		Texaco 16” Relocation {100%}		19,000		ft		Perm
0000		X		Xxxx 00” Xxxxxxxxxx {0%}		10,500		ft		Perm
Area F
2004		E		Xxxx 8” Relocation {24%}		15,600		ft		Perm
2004		E		Xxxx Compressor Station {24%}		LS		ea		Perm

5-8

VI. COMPLIANCE

6.1 REGRADE/RECLAMATION COVER

     The direct haulback operation and the rough regrade operation are currently working together to place SPGM on mined acres well within the time frame allowed by RCT permit. This situation is not expected to change during the period addressed by this AMP. Occasionally, the Truck/Shovel operation may be required to accomplish other tasks besides placing SPGM cover (i.e., rock removal, pond cleanouts, haulroad construction, prebench).

     In addition, the regrade operation has been called on to work outside of normal rough regrade activities. SPGM placement normally occurs within three months of rough regrade as opposed to the permitted nine months.

     Table 6.1 shows acres and cubic yards estimated for regrade and reclamation cover by area for the period (1999-2008) addressed by this mine plan.

6.2 FINAL SURFACE PREPARATION

     During final material placement operations, each area will be reconnaissance cored. The reconnaissance coring will help to verify that an area has four feet of suitable topsoil material. Once it is determined a cored area is suitable, final surface shaping, Rome disking, Xxxxxx plowing and terrace and drop structure installation will occur as needed and as directed by the Environmental Services department. Temporary terraces or diversions and drop structures will be used extensively around boxcut areas, ramp areas and areas of long or steep slopes.

     Acres requiring final surface preparation correspond approximately to the projected acres of reclamation cover as reported in Table 6.1.

6-1

TABLE 6.1
ACRES REGRADED AND RECLAIMED
ALL AREAS COMBINED

		Regrade				Reclamation Cover				Reclamation Cover
Period		Acres				Acres				CY (x1000)
Jan.			20				20				145.2
Feb.			20				20				145.2
Mar.			20				20				145.2
Apr.			59				59				428.3
May			59				59				428.3
June			60				60				435.6
July			59				59				428.3
Aug.			59				59				428.3
Sept.			60				60				435.6
Oct.			20				20				145.2
Nov.			20				20				145.2
Dec.			20				20				145.2
1999 Total			476				476				3,455.8
1st Qtr			138				138				1,001.9
2nd Qtr			150				150				1,089.0
3rd Qtr			150				150				1,089.0
4th Qtr			137				137				994.6
2000 Total			575				575				4,174.5
1st Qtr			102				102				740.5
2nd Qtr			125				125				907.5
3rd Qtr			125				125				907.5
4th Qtr			103				103				747.8
2001 Total			455				455				3,303.3
2002			532				532				3,862.3
2003			788				788				5,720.9
2004			711				711				5,161.9
2005			743				743				5,394.2
2006			591				591				4,290.7
2007			662				662				4,806.1
2008			503				503				3,651.8

6 - 2

6.3 DRAINAGE CONTROL

AREA A/B

     The FM 1512 relocation right-of-way is approximately the divider for the drainage in Area A. Drainage to the south and east of the right-of-way flow into Pond 023. Drainage to the north and west of the right-of-way and pit water flow into Mine Creek and Pond 009. Mine Creek permanent channel is being built as the pit advances. A gap is being left in the spoils and shaped during regrade. The diversion will channel run-off into Pond 009. Water will be controlled by pit dewatering and pumped into Mine Creek diversion. A spoil ridge will protect the pit and the spoil configuration will drain water away from the pit and regrade. Drainage in the reclaimed areas is controlled by ponds. Reclamation Ponds RP-A2 and A9 flow into Pond 023. Reclamation Ponds RP-A1, A3, A4, A5, A6 and A7 flow into Pond 009. Sediment Pond 027 was constructed in 1998 to allow for emergency reserves in Area B to be mined. Sediment Pond 028 will he complete in the fall of 1998 and will contain the overland drainage as mining progresses in Area B.

Area C

     In Area C south, Lambs Creek Phase III channels pit water south into Pond 016 and Pond 018. Phase III diverts Lambs Creek through the spoil ridges parallel to the pit. The runoff from the regrade is channeled into this diversion and discharged into Pond 016 and Pond 018.

     During the next several years, inactive pits in the south half of the Area C pit will be left open as needed for more than a year. A spoil ridge will be left to control run-off into these pits.

Area D

     As mining progresses to the east and begins to impact Pond 026 and Sediment Pond P01-D will be constructed to reduce the drainage area of Pond 026. Sediment Pond P02-D will be located at the end pit of the east-west pits and will be utilized in conjunction with P01-D to significantly reduce the volume of drainage on Pond 026 and on Pond 024 as mining progresses to the south. A spoilside diversion will be built to the north of the east-west pits. This diversion will channel surface runoff to the south during the mining of the east-west pits.

6 - 3

6.4 1999 CURRENT REVEGETATION SCHEDULE

				A/B				C				D				Total
Temporary		warm season			42				42				41				125
		cool season			41				42				42				125
		Total Temporary															250
Permanent		tame			108				108				119				335
		native			83				83				134				300
		Total Permanent															635
Replant		tame			8				8				9				25
		native			8				8				9				25
		temporary			8				8				9				25
		Total Replant															75
1999 Revegetation Summary		temporary															250
		permanent															635
		Total															885

6.5 EXTENDED RESPONSIBILITY PERIOD

     ERP Block A-lb has changed in acreage since the 1994 submittal due to vegetation cover in the area which will allow for bond release consideration (Fig. 6.2). Pond 009 and it’s drainage are excluded due to the runoff from mining activities. Adequate acreage has been included with the Pond 009 area to allow for additional cleanouts and downsizing of the pond when necessary. The areas shown on Fig. 6.2 also show the acreage. The RCT requirements for the removal of all temporary structures and downsizing of ponds have pushed these projected dates as shown on Fig. 6.2.

     Since the two year requirement for establishment of trees ended in 1997, NWR has experienced extreme drought conditions during 1996 and 1998. These droughts have forced NWR to implement irrigation practices to insure against a substantial death loss in those trees which were planted. Water is very crucial to the success rate of these young trees during the first two years of development, however with the extreme conditions experienced in 1998, a third year was necessary to keep these trees alive. This practice has proven to be successful, however RCT rules does not allow for “augmentation” practices to take place during bond release phases. Irrigation is one such measure which is not approved.

     In discussions with RCT officials during the fall of 1997, NWR was informed that ERP requirements were being changed to try and enhance acreages to be submitted for bond release.

6 - 4

One major change was the removal of all temporary structures (terraces, rock drops, wooden drop structures) and downsizing of ponds. The 1994 submittal allowed up to the third year once entered into ERP to have this work complete.

     Since this new ruling, NWR initiated the removal of these structures in the Spring of 1998. A substantial amount of disturbance was created and the drought we have experienced in 1998 has delayed the regrowth of grasses necessary to control erosion in theses areas. NWR is monitoring these areas closely and if enough fall rain allow irrigation of trees to cease and repaired areas are adequately covered to control erosion, a resubmitted package will he forwarded to RCT in the fall of 1998. However, if weather conditions are not conducive for fall grass cover, then a Spring, 1999 submittal is necessary. NWR is currently looking at future mining activities which will impact the release of land back to the original land owners in areas C and D.

6 - 5

[GRAPHIC MATERIAL]

6 - 6

[GRAPHIC MATERIAL]

6 - 7

Table 8.1
Xxxxxx Mine — 1999 Annual Mine Plan
Staffing Summary

		1998				1998
		1st Qtr				Year End				1999																Year End Estimates
		Actuals				Estimate				First				Second				Third				Fourth				2000				2001				2002
Operations Engineering			4				4				5				5				5				5				5				5				5
Environmental Services			6				6				6				6				6				6				6				6				6
Operators			206				206				206				206				206				206				206				206				206
Mechanics / Electricians			97				97				97				97				97				97				97				97				97
Warehouse			5				5				5				5				5				5				5				5				5
TOTAL HOURLY			318				318				319				319				319				319				319				319				319
Administration               (A)			2				2				2				2				2				2				2				2				2
Lands                             (C)			3				3				3				3				3				3				3				3				3
Environmental Services			16				17				17				17				17				17				17				17				17
Operations Engineering			5				5				5				5				5				5				5				5				5
Human Resources			5				6				6				6				6				6				6				6				6
Business                        (B)			22				22				22				22				22				22				22				22				22
Production/Maintenance			27				27				27				27				27				27				27				27				27
TOTAL SALARY			80				82				82				82				82				82				82				82				82
TOTAL XXXXXX MINE			398				400				401				401				401				401				401				401				401

(A)		Includes VP General Manager not billable
(B)		Includes one Accountant not billable
(C)		Includes 1/2 Senior Xxxxxxx not billable

8-1

Table 8.2
Northwestern Resources Co.
Xxxxxx Mine — 1999 Annual Mine Plan
Major Equipment Requirements

																																																			Front End								Coal
											Dozers																								Scraper				Graders								Water				Loaders								Haulers				Backhoes												End Dumps
					Draglines		BWE				D9N				D10N				D11N				D7				834B				583K				657				16G				24H				Trucks				992D				Small				150 Ton				8.5				Lg				Sm				100 Ton				150 Ton
1998		December			4			1				4				6				2				2				1				2				1				4				0				2				1				1				14				2				2				1				5				0
1999		January			4			1				4				6				2				2				1				2				1				4				0				2				1				1				14				2				2				1				5				0
		February			4			1				4				6				2				2				1				2				1				4				0				2				1				1				14				2				2				1				5				0
		March			4			1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				5				0
		April			4			1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		May			4			1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		June			4			1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		July			4			1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		August			4			1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		September			4			1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		October			4			1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		November			4			1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		December			4			1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
2000		1st Quarter			4			1				4				6				2				2				1				2				1				2				2				2				1				1				14				2				2				1				3				6
		2nd Quarter			4			1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
		3rd Quarter			4			1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
		4th Quarter			4			1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
2001		1st Quarter			4			1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
		2nd Quarter			4			1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
		3rd Quarter			4			1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
		4th Quarter			4			1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
2002					4			1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
2003					4			1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				2				8
2004-2008					4			1				4				7				2				2				1				2				1				2				2				2				1				1				14				0				4				1				0				11

8-2

Table 8.3
Xxxxxx Mine — 1999 Annual Mine Plan
Major Equipment Replacements

End

Backhoes

Coal

Dozers

Dump

Graders

Loaders

Scrapers

Water

8.5

Large

Small

Xxxxxxx

000X

X0

X0X

X00X

X00X

85/150 Ton

16G

992C

657

Trucks

1999

January

February

March

D904

D103/104

T003/004**

G003*

April

May

June

July

August

September

October

November

December

2000

1st Quarter

D905/906

G004*

2nd Quarter

B007

D702

D907

D105/106

Add 4

L007

S503

3rd Quarter

4th Quarter

2001

0xx Xxxxxxx

0xx Xxxxxxx

X000

3rd Quarter

4th Quarter

2002

2003

T005/Add

2004

B008/L501

Add

D111

Add

2005

D107

T006/T007

2006

D904/905

D108

2007

D908/104

G005/006

2008

*		Replace G003 and G004 with new 24H motorgraders.
**		Replace with 150 ton end dump trucks.

8-3

Table 8.4
1999 Annual Mine Plan — Equipment Operating Hours

		JAN				FEB				MAR				APR				MAY				JUNE				JULY				AUG				SEPT				OCT				NOV				DEC				Total
******STRIPPING****** STRIPPING DRAGLINE
DRAGLINES-8200			1,942				1,754				1,414				1,879				1,942				1,879				1,942				1,942				1,879				1,942				1,434				1,942				21,891
DRAGLINE - 8750			632				571				632				612				632				612				632				442				612				632				612				632				7,256
DOZER — D9			400				220				400				400				400				400				400				400				400				400				400				400				4,620
DOZER — D10			2,832				2,558				2,251				2,740				2,832				2,740				2,832				2,623				2,740				2,832				2,251				2,832				32,061
DOZER-834			20				20				20				20				20				20				20				20				20				20				20				20				240
DOZER-D11			500				500				500				500				500				500				500				500				500				500				500				500				6,000
STRIPPING BWE
BWE			595				538				595				576				595				576				595				595				576				595				576				595				7,008
SCRAPER			25				25				25				25				25				25				25				25				25				25				25				25				300
DOZER-D7			595				538				595				576				595				576				595				595				576				595				576				595				7,008
DOZER-D9			250				250				250				250				250				250				250				250				250				250				250				250				3,000
DOZER-D10			600				600				600				600				600				620				620				600				600				600				600				600				7,240
SMALL BACKHOE			10				10				10				10				10				10				10				10				10				10				10				10				120
STRIPPING MOBILE
SCRAPER			50				50				50				50				50				50				50				50				50				50				50				50				600
END DUMP			2,530				2,285				2,530				2,448				2,530				2,448				2,530				2,530				2,448				2,530				2,448				2,530				29,787
BACKHOE-8.5 cu. yd.			932				842				932				902				932				902				932				932				902				932				902				932				10,975
FEL			0				0				0																																								0
DOZER-D9			655				591				655				634				655				634				655				655				634				655				634				655				7,712
DOZER-D10			300				300				300				300				300				300				300				300				300				300				300				300				3,600
DOZER-D11			50				50				50				50				50				50				50				50				50				50				50				50				600
DOZER-834			15				15				15				15				15				15				15				15				15				15				15				15				180
***LIGNITE LOADING*** LIGNITE LOADING
5130 BACKHOE			1,165				1,052				1,165				1,128				1,165				1,128				1,165				1,165				1,128				1,165				1,128				1,165				13,718
BACKHOE-8.5 cu. yd.			0				0				0				0				0				0				0				0				0				0				0				0				0
FEL			557				503				557				539				557				539				557				557				539				557				539				557				6,552
DOZER-D10			50				50				50				50				50				50				50				50				50				50				50				50				600
LIGNITE HAULING
HAULER			5,755				5,198				5,755				5,569				5,755				5,569				5,755				5,755				5,569				5,755				5,569				5,755				67,759
DOZER — D10			100				100				100				100				100				100				100				100				100				100				100				100				1,200
LIGNITE CRUSHING
DOZER — D9			500				500				500				500				500				500				500				500				500				500				500				500				6,000
DOZER-834			250				250				250				250				250				250				250				250				250				250				250				250				3,000
********ROADS******** ROADS
GRADER			2,196				1,984				1,647				1,594				1,647				1,594				1,647				1,647				1,063				1,647				1,594				1,647				19,908
WATER TRUCK			700				700				700				700				700				700				700				700				700				700				700				700				8,400
SCRAPER			55				55				55				55				55				55				55				55				55				55				55				55				660
DOZER-D9			120				120				120				120				120				120				120				120				120				120				120				120				1,440
***WATER CONTROL*** WATER CONTROL PIT
DOZER-D9			100				100				100				90				90				90				90				90				90				100				100				100				1,140
SMALL BACKHOE			225				225				225				225				225				225				225				225				225				225				225				225				2,700
DOZER-D7			200				200				200				200				200				200				200				200				200				200				200				200				2,400
O.B. DEWATERING
DOZER-D9			50				50				50				50				50				50				50				50				50				50				50				50				600
****RECLAMATION**** RECLAIM CURRENT
SCRAPER			50				50				50				50				50				50				50				50				50				50				50				50				600
DOZER-D11			576				520				576				558				576				558				576				576				558				576				558				576				6,784
DOZER-D10			200				200				200				200				200				200				200				200				200				200				200				200				2,400
DOZER-D9			150				150				150				150				150				150				150				150				150				150				150				150				1,800
DOZER-D7			75				75				75				75				75				75				75				75				75				75				75				75				900

8-4

Table 8.4
1999 Annual Mine Plan — Equipment Operating Hours

				1ST				2ND				3RD				4TH				2000				1ST				2ND				3RD				4TH				2001				2002				2003				2004				2005				2006				2007				0000
****XXXXXXXXX****
XXXXXXXXX XXXXXXXX
		XXXXXXXX - 0000			5,638				5,700				5,763				5,318				22,419				5,638				5,700				5,763				5,318				22,419				22,419				22,419				22,419				22,419				22,419				22,419				22,419
		DRAGLINE - 8750			1,620				1,856				1,877				1,856				7,210				1,620				1,856				1,877				1,856				7,210				7,210				7,210				7,210				7,210				7,210				7,210				7,210
		DOZER — D9			1,020				1,200				1,200				1,200				4,620				1,020				1,200				1,200				1,200				4,620				4,620				4,620				4,620				4,620				4,620				4,620				4,620
		DOZER — D10			7,640				8,312				8,195				7,914				32,061				7,640				8,312				8,195				7,914				32,061				32,061				32,061				32,061				32,061				32,061				32,061				32,061
		DOZER-834			60				60				60				60				240				60				60				60				60				240				240				240				240				240				240				240				240
		DOZER-D11			1,500				1,500				1,500				1,500				6,000				1,500				1,500				1,500				1,500				6,000				6,000				6,000				6,000				6,000				6,000				6,000				6,000
SHIPPING BWE
		BWE			1,728				1,747				1,766				1,766				7,008				1,728				1,747				1,766				1,766				7,008				7,008				7,008				7,008				7,008				7,008				7,008				7,008
		SCRAPER			75				75				75				75				300				75				75				75				75				300				300				300				300				300				300				300				300
		DOZER-D7			1,728				1,747				1,766				1,766				7,008				1,728				1,747				1,766				1,766				7,008				7,008				7,008				7,008				7,008				7,008				7,008				7,008
		DOZER-D9			750				750				750				750				3,000				750				750				750				750				3,000				3,000				3,000				3,000				3,000				3,000				3,000				3,000
		DOZER-D10			1,800				1,820				1,820				1,800				7,240				1,800				1,820				1,820				1,800				7,240				7,240				7,240				7,240				7,240				7,240				7,240				7,240
		SMALL BACKHOE			30				30				30				30				120				30				30				30				30				120				120				120				120				120				120				120				120
STRIPPING MOBILE
		SCRAPER			150				150				150				150				600				150				150				150				150				600				600				600				600				600				600				600				600
		END DUMP			7,345				7,426				7,508				7,508				29,787				7,345				7,426				7,508				7,508				29,787				29,787				29,787				29,787				29,787				29,787				29,787				29,787
		BACKHOE-8.5 cu. yd.			2,706				1,026				1,056				1,056				5,845				1,056				1,026				1,056				1,056				4,195				4,195				4,195				4,195				4,195				4,195				4,195				4,195
		BACKHOE-5130			0				1,710				1,710				1,710				5,130				1,710				1,710				1,710				1,710				6,840				6,840				6,840				6,840				6,840				6,840				6,840				6,840
		DOZER-D9			1,901				1,923				1,944				1,944				7,712				1901				1,923				1,944				1,944				7,712				7,712				7,712				7,712				7,712				7,712				7,712				7,712
		DOZER-D10			900				900				900				900				3,600				900				900				900				900				3,600				3,600				3,600				3,600				3,600				3,600				3,600				3,600
		DOZER-834			45				45				45				45				180				45				45				45				45				180				180				180				180				180				180				180				180
*LIGNITE LOADING*
LIGNITE LOADING
		5130 BACKHOE			3,383				3,420				3,458				3,458				13,718				3,383				3,420				3,458				3,458				13,718				13,718				13,718				13,718				13,718				13,718				13,718				13,718
		BACKHOE-8.5 cu. yd.			0				0				0				0				0				0				0				0				0				0				0				0				0				0				0				0				0
		FEL			1,616				1,634				1,652				1,652				6,552				1,616				1,634				1,652				1,652				6,552				6,552				6,552				6,552				6,552				6,552				6,552				6,552
		DOZER-D10			150				150				150				150				600				150				150				150				150				600				600				600				600				600				600				600				600
LIGNITE HAULING
		HAULER			16,708				16,893				17,079				17,079				67,759				16,708				16,893				17,079				17,079				67,759				67,759				67,759				67,759				67,759				67,759				67,759				67,759
		DOZER — D10			300				300				300				300				1,200				300				300				300				300				1,200				1,200				1,200				1,200				1,200				1,200				1,200				1,200
LIGNITE CRUSHING
		DOZER — D9			1,500				1,500				1,500				1,500				6,000				1,500				1,500				1,500				1,500				6,000				6,000				6,000				6,000				6,000				6,000				6,000				6,000
		DOZER-834			750				750				750				750				3,000				750				750				750				750				3,000				3,000				3,000				3,000				3,000				3,000				3,000				3,000
*****ROADS*****
ROADS
		GRADER			5,827				4,835				4,357				4,889				19,908				5,827				4,835				4,357				4,889				19,908				19,908				19,908				19,908				19,908				19,908				19,908				19,908
		WATER TRUCK			2,100				2,100				2,100				2,100				8,400				2,100				2,100				2,100				2,100				8,400				8,400				8,400				8,400				8,400				8,400				8,400				8,400
		SCRAPER			165				165				165				165				660				165				165				165				165				660				660				660				660				660				660				660				660
		DOZER-D9			360				360				360				360				1,440				360				360				360				360				1,440				1,440				1,440				1,440				1,440				1,440				1,440				1,440
**WATER CONTROL**
WATER CONTROL PIT
		DOZER-D9			300				270				270				300				1,140				300				270				270				300				1,140				1,140				1,140				1,140				1,140				1,140				1,140				1,140
		SMALL BACKHOE			675				675				675				675				2,700				675				675				675				675				2,700				2,700				2,700				2,700				2,700				2,700				2,700				2,700
		DOZER-D7			600				600				600				600				2,400				600				600				600				600				2,400				2,400				2,400				2,400				2,400				2,400				2,400				2,400
O.B. DEWATERING
		DOZER-D9			150				150				150				150				600				150				150				150				150				600				600				600				600				600				600				600				600
***RECLAMATION***
RECLAIM CURRENT
		SCRAPER			150				150				150				150				600				150				150				150				150				600				600				600				600				600				600				600				600
		DOZER-D11			1,673				1,691				1,710				1,710				6,784				1,673				1,691				1,710				1,710				6,784				6,784				6,784				6,784				6,784				6,784				6,784				6,784
		DOZER-D10			600				600				600				600				2,400				600				600				600				600				2,400				2,400				2,400				2,400				2,400				2,400				2,400				2,400
		DOZER-D9			450				450				450				450				1,800				450				450				450				450				1,800				1,800				1,800				1,800				1,800				1,800				1,800				1,800
		DOZER-D7			225				225				225				225				900				225				225				225				225				900				900				900				900				900				900				900				900

8-5

TABLE 8.5
1999 ANNUAL MINE PLAN
EQUIPMENT OPERATING HOURS SUMMARY

		JAN				FEB				MAR				APR				MAY				JUN				JUL				AUG				SEP				OCT				NOV				DEC				TOTAL
DRAGLINES - 8200			1,942				1,754				1,414				1,879				1,942				1,879				1,942				1,942				1,879				1,942				1,434				1,942				21,891
DRAGLINE - 8750			632				571				632				612				632				612				632				442				612				632				612				632				7,256
BWE			595				538				595				576				595				576				595				595				576				595				576				595				7,008
SCRAPER			180				180				180				180				180				180				180				180				180				180				180				180				2,160
END DUMP			2,530				2,285				2,530				2,448				2,530				2,448				2,530				2,530				2,448				2,530				2,448				2,530				29,787
5130 BACKHOE			1,165				1,052				1,165				1,128				1,165				1,128				1,165				1,165				1,128				1,165				1,128				1,165				13,718
BACKHOE - 8.5 cu. Yd.			932				842				932				902				932				902				932				932				902				932				902				932				10.975
FEL			557				503				557				539				557				539				557				557				539				557				539				557				6,552
DOZER D11			1,076				1,020				1,076				1,058				1,076				1,058				1,076				1,076				1,058				1,076				1,058				1,076				12,784
DOZER D10			4,082				3,808				3,501				3,990				4,082				4,010				4,102				3,873				3,990				4,082				3,501				4,082				47,101
DOZER D9			2,075				1,831				2,075				2,044				2,065				2,044				2,065				2,065				2,044				2,075				2,054				2,075				24,512
DOZER D7			870				813				870				851				870				851				870				870				851				870				851				870				10,308
DOZER - 834			285				285				285				285				285				285				285				285				285				285				285				285				3,420
HAULER			5,755				5,198				5,755				5,569				5,755				5,569				5,755				5,755				5,569				5,755				5,569				5,755				67,759
GRADER			2,196				1,984				1,647				1,594				1,647				1,594				1,647				1,647				1,063				1,647				1,594				1,647				19,808
WATER TRUCK			700				700				700				700				700				700				700				700				700				700				700				700				8,400
SMALL BACKHOE			235				235				235				235				235				235				235				235				235				235				235				235				2,820

8-6

TABLE 8.5
1999 ANNUAL MINE PLAN
EQUIPMENT OPERATING HOURS SUMMARY

		1ST				2ND				3RD				4TH				2000				1ST				2ND				3RD				4TH				2001				2002				2003				2004				2005				2006				2007				2008
DRAGLINES - 8200			5,638				5,700				5,763				5,318				22,419				5,638				5,700				5,763				5,318				22,419				22,419				22,419				22,419				22,419				22,419				22,419				22,419
DRAGLINE-8750			1,620				1,856				1,877				1,856				7,210				1,620				1,856				1,877				1,856				7,210				7,210				7,210				7,210				7,210				7,210				7,210				7,210
BWE			1,728				1,747				1,766				1,766				7,008				1,728				1,747				1,766				1,766				7,008				7,008				7,008				7,008				7,008				7,008				7,008				7,008
SCRAPER			540				540				540				540				2,160				540				540				540				540				2,160				2,160				2,160				2,160				2,160				2,160				2,160				2,160
END DUMP			7,345				7,426				7,508				7,508				29,787				7,345				7,426				7,508				7,508				29,787				29,787				29,787				29,787				29,787				29,787				29,787				29,787
5130 BACKHOE			3,383				3,420				3,458				3,458				13,718				3,383				3,420				3,458				3,458				13,718				13,718				13,718				13,718				13,718				13,718				13,718				13,718
BACKHOE-8.5 cu.yd.			2,706				1,026				1,056				1,056				5,845				1,056				1,026				1,056				1,056				4,195				4,195				4,195				4,195				4,195				4,195				4,195				4,195
FEL			1,616				3,344				3,362				3,362				11,682				3,326				3,344				3,362				3,362				13,392				13,392				13,392				13,392				13,392				13,392				13,392				13,392
DOZER D11			3,173				3,191				3,210				3,210				12,784				3,173				3,191				3,210				3,210				12,784				12,784				12,784				12,784				12,784				12,784				12,784				12,784
DOZER D10			11,390				12,082				11,965				11,664				47,101				11,390				12,082				11,965				11,664				47,101				47,101				47,101				47,101				47,101				47,101				47,101				47,101
DOZER D9			5,981				4,653				4,674				4,704				18,512				4,481				4,653				4,674				4,704				18,512				18,512				18,512				18,512				18,512				18,512				18,512				18,512
DOZER D7			2,553				2,572				2,591				2,591				10,308				2,553				2,572				2,591				2,591				10,308				10,308				10,308				10,308				10,308				10,308				10,308				10,308
DOZER-834			855				855				855				855				3,420				855				855				855				855				3,420				3,420				3,420				3,420				3,420				3,420				3,420				3,420
HAULER			16,708				16,893				17,079				17,079				67,759				16,708				16,893				17,079				17,079				67,759				67,759				67.759				67,759				67,759				67.759				67,759				67,759
GRADER			5,827				4,835				4,357				4,889				19,908				5,827				4,835				4,357				4,889				19,908				19,908				19,908				19,908				19,908				19,908				19,908				19,908
WATER TRUCK			2,100				2,100				2,100				2,100				8,400				2,100				2,100				2,100				2,100				8,400				8,400				8,400				8,400				8,400				8,400				8,400				8,400
SMALL BACKHOE			705				705				705				705				2,820				705				705				705				705				2,820				2,820				2,820				2,820				2,820				2,820				2,820				2,820

0-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.

Xxxxxx Mine

Capital and Operations Budget

1999 — 2008

This document contains the Xxxxxx Mine Capital and Operations Budget for the years 1999 through 2008 as approved by Houston Lighting & Power. Due to the confidential nature of its contents, disclosure of information contained in the budget should be restricted to employees of NWR or HL&P, and used only for purposes related to the Xxxxxx Mine.

Presented to

Houston Lighting & Power

December, 1998

Distribution List:

		HL&P Houston		HL&P Xxxxxx		NWR Xxxxxx
		X. Xxxxxxx		X. Xxxxxx		X. Xxxxxx		X. Xxxxxxx
		X. Xxxxxx		X. Xxxxx		X. Xxxxx		X. Xxxxxxxxx
				X. Xxxxxx		X. Xxxxxxx		X. Xxxxx
				X. Xxxxxxxxx		X. Xxxxxxxx		X. Xxxxxx
				Limestone Site File				File

C-I

Northwestern Resources Co.
Xxxxxx Mine
1999 — 2008 Capital and Operations Budget

Table of Contents

Overview		II
Capital Budget
Overview		C - 1
Budget:
Summary		C - 3
Ten Year Spread		C - 4
1999 By Month		C - 6
2000 - 2003		C - 7
Escalation:
Method		C - 8
Applied Indices		C - 9
1999 Capital Budget Items		CI - 1
Operations Budget
Overview		O - 1
Budget:
Summary		O - 7
Lignite Supply Agreement Format		O - 9
Categorical Format		O - 10
Ten Year Spread		O - 11
1999 By Month		O - 17
2000 - 2003		O - 20
Escalation:
Method		O - 23
Applied Indices		O - 24
Assumptions
Tonnage Projections:		A - 1
Bank Cubic Yards		A - 2
Major Equipment Requirements		A - 3
Major Equipment Replacements		A - 4
Average Equipment Lives		A - 5
Major Hourly Equipment Rates		A - 6
Support Equipment Rates		A - 8
Wage Projection and Overtime Assumptions		A - 9
Payroll Loading Factors		A - 10
Staffing Summary		A - 12
Constant Dollar Budgets
Capital		CD - 1
Operations		CD - 5

I

Northwestern Resources Co.

Overview of the Xxxxxx Mine

     This document contains the 1999 — 2008 Capital and Operations Budget for the Xxxxxx Mine located in Xxxx, Limestone, and Freestone Counties, Texas. This mine supplies fuel to Houston Lighting and Power, the owner and operator of the Limestone Electric Generating Station (two 820 mw generators).

     Mine construction began late in 1983, and initial overburden stripping commenced in June 1985. Full production of approximately 8.1 million tons per year was reached in 1989 with an expected mine life of thirty years. Production in 1999 will exceed 9.0 million tons. Three 78 cubic yard capacity draglines, one 128 cubic yard capacity dragline, and one bucketwheel excavator system (BWE) are the primary pieces of overburden stripping equipment. In deep overburden areas, end-dump and truck prebenching are used to supplement dragline and BWE production capabilities.

     Reserves incorporated in the Xxxxxx Mine Plan include over 240 million tons. Additional reserves are available in the area to increase production or operate for a longer term. Five lignite seams, varying from 2 to 15 feet thick, will be mined. The principle coal raining method utilizes large backhoes and front-end loaders to load bottom dump trucks for extraction and haulage of lignite to a central crushing facility.

     An extensive post-rnine reclamation program, including spoilpile grading and revegetation, is in place to assure the mined out lands are restored to at least their premining productivity levels. Post-mine land use will typically be for cattle grazing and wildlife habitat.

II

Northwestern Resources Co.

1999 Capital Budget Overview

     The 1999 — 2008 Capital Budget was prepared on the basis of costs to be incurred by NWR for work performed in the same period. Escalation has been applied according to the schedule on page C - 9. No contingency has been included, except where specifically identified. Salvage value for replacement equipment is not included in the requested amount.

     The Capital Budget is assembled into three major categories for 1999:

6 Facility Modification & Addition

6 Equipment

0 Xxxxx

X-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
0000 — 2008 Capital Budget
Major Categories

Facility Modification &Addition

	6		Haulroads & Ponds:
			This item includes construction of haulroads and drainage control structures at the mine. Included as haulroad construction are those roads used primarily for coal haulage. The engineering cost for surveying, construction testing, and inspection of these activities are not included. They are considered expense for the 1999 Budget. All service roads are expensed.

Equipment

	6		Major Equipment — Additions and Replacements
			The primary pieces of overburden stripping equipment are three Xxxxxx 8200 (78 cubic yard) electric walking draglines, one Xxxxxx 8750 (128 cubic yard) electric walking dragline, and a bucketwheel excavator system (BWE).
	6		Mobile Equipment — Additions and Replacements
			This category includes the cost of major mobile equipment required for clearing, stripping, coal removal, coal hauling, and regrading. A listing of equipment replacements is shown on page A — 4 of the Assumptions section. The useful life of the different types of mobile equipment may be seen on page A — 5 of the Assumptions section.
	6		Support Equipment — Additions Items in this category include support equipment not directly used in production.
	6		Support Equipment — Replacements and Other Equipment
			In this category are the costs of maintenance and support equipment such as fuel/lube trucks, welding trucks, service trucks, forklifts, light plants, reclamation implements, in-pit and overburden dewatering equipment, and pickup trucks. Also included are the costs of shop and service tools, and safety/training equipment as well as other miscellaneous equipment.
	6		Office Furniture and Equipment — Additions and Replacements This category includes various types of furniture, office and computer equipment.

Lands

	6		Tract Purchases
			This category includes funds for purchases of tracts needed for the Life of Mine operations. Other leased properties will be recommended for purchase in order to provide for ancillary operations.
	6		Surface Improvements
			Included here are payments to the respective landowner of the fair market value for buildings, fences, tanks, and other improvements that will be destroyed or rendered useless by the mining operations. These payments are required under the provisions of the respective coal leases.

X-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
0000 Capital Budget Summary
Escalated Dollars

		1999				2000				2001				2002				2003				2004				2005				2006				2007				2008				Total
Mine Facilities		$	—			$	788,214			$	1,467,798			$	1,616,897			$	7,203,497			$	4,664,866			$	4,160,182			$	—			$	918,212			$	—			$	20,819,666
Mine Equipment			646,000				6,554,309				569,194				326,805				919,088				5,525,787				1,567,065				2,468,026				4,833,533				130,725				23,540,532
Land			250,000				193,795				311,800				379,641				—				—				—				—				—				—				1,135,236
Total		$	896,000			$	7,536,318			$	2,348,792			$	2,323,343			$	8,122,585			$	10,190,653			$	5,727,247			$	2,468,026			$	5,751,745			$	130,725			$	45,495,434

C-3

XXXXXX CAPITAL BUDGET ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’S)

		TOTAL				TOTAL				TOTAL				TOTAL				TOTAL				5 YEAR
		1999				2000				2001				2002				2003				TOTAL
* EQUIPMENT
** MAJOR EQUIP DRAGLINE			520.0				0.0				0.0				0.0				133.5				653.5
** Subtotal			520.0				0.0				0.0				0.0				133.5				653.5
** MOBILE EQUIP REPLACEMENT			0.0				5,944.0				0.0				0.0				0.0				5,944.0
** Subtotal			0.0				5,944.0				0.0				0.0				0.0				5,944.0
** SHOP & SERV SUPP EQUIP REP			0.0				507.7				463.9				218.7				674.3				1,864.6
TOOLS & EQUIP			126.0				102.8				105.2				108.1				111.2				553.3
** Subtotal			126.0				610.5				569.1				326.8				785.5				2,417.9
* Total			646.0				6,554.5				569.1				326.8				919.0				9,015.4
* FACILITIES
** ROAD & DRAIN HAULROADS			0.0				788.2				677.5				0.0				5,285.0				6,750.7
PONDS			0.0				0.0				790.3				1,616.9				1,918.4				4,325.6
** Subtotal			0.0				788.2				1,467.8				1,616.9				7,203.4				11,076.3
* Total			0.0				788.2				1,467.8				1,616.9				7,203.4				11,076.3
* LANDS
** ACQUISITION TRACT PURCHASES			200.0				193.8				311.8				379.6				0.0				1,085.2
** Subtotal			200.0				193.8				311.8				379.6				0.0				1,085.2
** SURFACE IMPROVEMENT			50.0				0.0				0.0				0.0				0.0				50.0
** Subtotal			50.0				0.0				0.0				0.0				0.0				50.0
* Total			250.0				193.8				311.8				379.6				0.0				1,135.2
Grand Total			896.0				7,536.5				2,348.7				2,323.3				8,122.4				21,226.9

C-4

XXXXXX CAPITAL BUDGET ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’S)

		TOTAL				TOTAL				TOTAL				TOTAL				TOTAL				5 YEAR
		2004				2005				2006				2007				2008				TOTAL
* EQUIPMENT
** MAJOR EQUIP DRAGLINE			0.0				71.1				0.0				0.0				0.0				71.1
** Subtotal			0.0				71.1				0.0				0.0				0.0				71.1
** MOBILE EQUIP REPLACEMENT			5,264.4				817.5				2,317.6				4,443.0				0.0				12,842.5
** Subtotal			5,264.4				817.5				2,317.6				4,443.0				0.0				12,842.5
** SHOP & SERV SUPP EQUIP REP			146.7				560.0				27.8				263.7				0.0				998.2
TOOLS & EQUIP			114.7				118.5				122.6				126.8				130.7				613.3
** Subtotal			261.4				678.5				150.4				390.5				130.7				1,611.5
* Total			5,525.8				1,567.1				2,468.0				4,833.5				130.7				14,525.1
* FACILITIES
** MINE BLDGS MODIF & ADDS			780.4				0.0				0.0				0.0				0.0				780.4
** Subtotal			780.4				0.0				0.0				0.0				0.0				780.4
* ROAD & DRAIN HAULROADS			1,384.4				1,847.7				0.0				0.0				0.0				3,232.1
PONDS			2,500.1				2,312.5				0.0				918.2				0.0				5,730.8
** Subtotal			3,884.5				4,160.2				0.0				918.2				0.0				8,962.9
* Total			4,664.9				4,160.2				0.0				918.2				0.0				9,743.3
Grand Total			10,190.7				5,727.3				2,468.0				5,751.7				130.7				24,268.4

C-5

XXXXXX CAPITAL BUDGET ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’S)

		1999																																																1999
		JAN				FEB				MARCH				APRIL				MAY				JUNE				JULY				AUG				SEPT				OCT				NOV				DEC				TOTAL
* EQUIPMENT
** MAJOR EQUIP DRAGLINE			0.0				0.0				0.0				0.0				0.0				0.0				0.0				520.0				0.0				0.0				0.0				0.0				520.0
** Subtotal			0.0				0.0				0.0				0.0				0.0				0.0				0.0				520.0				0.0				0.0				0.0				0.0				520.0
** SHOP & SERV TOOLS & EQUIP			5.0				12.4				5.0				19.0				10.0				19.6				10.0				10.0				10.0				10.0				10.0				5.0				126.0
** Subtotal			5.0				12.4				5.0				19.0				10.0				19.6				10.0				10.0				10.0				10.0				10.0				5.0				126.0
* Total			5.0				12.4				5.0				19.0				10.0				19.6				10.0				530.0				10.0				10.0				10.0				5.0				646.0
* LANDS
** ACQUISITION TRACT PURCHASE			0.0				0.0				10.0				0.0				40.0				0.0				80.0				0.0				40.0				0.0				30.0				0.0				200.0
** Subtotal			0.0				0.0				10.0				0.0				40.0				0.0				80.0				0.0				40.0				0.0				30.0				0.0				200.0
** SURFACE IMPROVEMENT			0.0				0.0				20.0				0.0				0.0				20.0				0.0				0.0				10.0				0.0				0.0				0.0				50.0
** Subtotal			0.0				0.0				20.0				0.0				0.0				20.0				0.0				0.0				10.0				0.0				0.0				0.0				50.0
* Total			0.0				0.0				30.0				0.0				40.0				20.0				80.0				0.0				50.0				0.0				30.0				0.0				250.0
Grand Total			5.0				12.4				35.0				19.0				50.0				39.6				90.0				530.0				60.0				10.0				40.0				5.0				896.0

C-6

XXXXXX CAPITAL BUDGET ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’S)

		2000																2000				2001																2001				2002				2003				5-YEAR
		QTR 1				QTR 2				QTR 3				QTR 4				TOTAL				QTR 1				QTR 2				QTR 3				QTR 4				TOTAL				TOTAL				TOTAL				TOTAL
* EQUIPMENT
** MAJOR EQUIP DRAGLINE			0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				133.5				653.5
** Subtotal			0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				133.5				653.5
** MOBILE EQUIP REPLACEMENT			1226.7				4717.3				0.0				0.0				5944.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				5,944.0
** Subtotal			1226.7				4717.3				0.0				0.0				5944.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				5,944.0
** SHOP & SERV SUPP EQUIP REP			121.1				355.8				12.3				18.5				507.7				162.3				182.5				100.1				19.0				463.9				218.7				674.3				1,864.6
TOOLS & EQUIP			25.7				25.7				25.7				25.7				102.8				26.3				26.3				26.3				26.3				105.2				108.1				111.2				553.3
** Subtotal			146.8				381.5				38.0				44.2				610.5				188.6				208.8				126.4				45.3				569.1				326.8				785.5				2,417.9
* Total			1373.5				5098.8				38.0				44.2				6554.5				188.6				208.8				126.4				45.3				569.1				326.8				919.0				9,015.4
* FACILITIES
** ROAD & DRAIN HAULROADS			0.0				394.1				394.1				0.0				788.2				0.0				0.0				421.5				256.0				677.5				0.0				5285.0				6,750.7
PONDS			0.0				0.0				0.0				0.0				0.0				474.2				316.1				0.0				0.0				790.3				1616.9				1918.4				4,325.6
** Subtotal			0.0				394.1				394.1				0.0				788.2				474.2				316.1				421.5				256.0				1467.8				1616.9				7203.4				11,076.3
** Total			0.0				394.1				394.1				0.0				788.2				474.2				316.1				421.5				256.0				1467.8				1616.9				7203.4				11,076.3
* LANDS
** ACQUISITION TRACT PURCHASE			51.1				0.0				142.7				0.0				193.8				55.3				55.3				107.5				93.7				311.8				379.6				0.0				1,085.2
** Subtotal			51.1				0.0				142.7				0.0				193.8				55.3				55.3				107.5				93.7				311.8				379.6				0.0				1,085.2
** SURFACE IMPROVEMENT			0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				50.0
** Subtotal			0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				0.0				50.0
* Total			51.1				0.0				142.7				0.0				193.8				55.3				55.3				107.5				93.7				311.8				379.6				0.0				1,135.2
Grand Total			1424.6				5492.9				574.8				44.2				7536.5				718.1				580.2				655.4				395.0				2348.7				2323.3				8322.4				21,226.9

C-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
0000 Xapital Budget Escalation

     The escalation rates used in the Capital Budget were taken from the 1998 Houston Industries, Inc. Cost Escalation Study, dated May, 1998. HL&P provided this study to NWR. NWR then determined the appropriate indices to be used for each budget item. The following page shows the selected indices for the 1999 Capital Budget.

     Capital dollars are based on 1999 dollars; consequently, no escalation was applied for 1999. The budget is then escalated quarterly for 2000 and 2001, and annually for 2002 through 2008, to derive the escalated dollar budget. The method used gives an effective annual rate after compounding equal to the stated escalation rates.

C-8

Northwestern Resources Co.
1999 Capital Budget
Applied Indices

					RATE APPLIED
DESCRIPTION		1999 2008 INDEX			1999					2000					2001					2002					2003					2004					2005					2006					2007					2000
Xxxx Xxxxxxxxx		Xxxxxxxxx Xonstruction Costs				1.9					2.2					2.2					2.2					2.4					2.5					2.9					2.9					2.7					2.6
Lignite Handling Facility		Coal & Ash Handling Equipment				1.2					2.3					2.9					2.5					2.5					2.9					3.1					3.1					3.2					2.9
Electrical Distribution System		Total Distribution Plant				1.4					1.6					1.8					1.8					2.3					2.5					2.9					3.0					2.4					2.1
Roads & Drainage		Heavy Construction Trades				3.0					2.9					2.4					2.3					1.7					2.5					2.9					2.8					3.0					3.1
Draglines, Mobile Equipment, Shop & Service Inventory		Mining (PPI 3532)				1.7					2.6					2.7					2.6					2.9					3.1					3.3					3.5					3.4					3.1
Land		GDP Implicit Deflator				1.9					2.2					2.1					2.2					2.4					2.5					2.6					2.8					2.8					2.9

1999 costs are based on 1998 current dollars plus escalation. 1999 — 2008 are escalated from the basis by the indicated rate as taken from the HII Cost Escalation Study (May, 1998).

C-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
Xxxxxx Xine
1999 Capital Budget

Page

MAJOR EQUIPMENT

CI-2

99MJE001

Purchase Rails and rollers for DL25

$

520,000

520,000

VEHICLE/SUPPORT EQUIPMENT — ADDITIONS

CI-4

99STE001

Tools & Small Equipment

126,000

126,000

TRACT PURCHASES

CI-6

99TPS001

Tract Purchases

200,000

200,000

SURFACE IMPROVEMENTS

CI-8

99SF1001

Surface Improvements

50,000

50,000

Total 1999 Capital

$

896,000

CI-1

Houston Industries Power Generation
1999 Project Evaluation / Approval Form

Location:		Xxxxxx Mine				Sponsor:		Xxxx Xxxxxxxxxx
Project Title:		Purchase Rails and Rollers for DL25				Phone No:		000-000-0000
Project ID:		99MJE001               Prog Elem: HFCL01		Year: 1999		Submit Date: 6/29/98

PROJECT DESCRIPTION AND SCOPE:

Purchase new rails and rollers for 8200 dragline DL25.

PROJECT JUSTIFICATION AND ALIGNMENT TO HIPG STRATEGY:

     At present, there is one set of spare rails and rollers for a Xxxxxx 8200 dragline at the Xxxxxx Mine. In November 1998, this set will be used for DL26, and no spare set will be on site.

     DL25’s rails and rollers are 13 years old. The rails are showing signs of fatigue, and the rollers have been replaced as needed. If the rails and rollers fail on this machine, the lead-time on the parts is six months. Limestone Electric Generating Station fuel deliveries could be severely impacted. This project supports the HIPG strategy of availability improvement.

Category: Rehabilitation-in-kind
Start Date: January, 1999 New or Carried Forward:
New Completion Date: June 1999 Capital or O&M: Capital

Cost or Project:		Prior Yrs.				Budget Yr.				Year +1				Future Yrs.				Budget				Actuals				Difference
HIPG Labor		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Material			—				—				—				—				—				—				—
Contracts			—				—				—				—				—				—				—
Other			—				520,000				—				—				—				—				—
Totals		$	—			$	520,000				—				—				—				—				—

FINANCIAL DATA

Benefit/Cost Radio:		NPV Selected:		NPV Alternative 1:
Payback Period:		NPV Rejected:		NPV Alternative 2:
% Ret on Investment:		NPV Deferred:		NPV Alternative 3:

FINANCIAL SUMMARY:

CI-2

Houston Industries Power Generation
1999 Project Evaluation / Approval Form

Location:		Xxxxxx Mine				Sponsor:		Xxxx Xxxxxxxxxx
Project Title:		Purchase Rails and Rollers for DL25				Phone No:		000-000-0000
Project ID:		99MJE001               Prog Elem: HFCL01		Year: 1999		Submit Date: 6/29/98

SENSITIVITY ANALYSIS:

     If the rails and rollers fail on DL25 without the Xxxxxx Mine having spares on site, the fuel supply to the Limestone Electric Generating Station could be impacted. The lead-time on this item is six months.

PROJECT SCHEDULE AND MILESTONES:

Estimated Start Date: January, 1999 Estimated Completion Date: June, 1999

Milestones:

DEFERRAL ANALYSIS:

     Deferral is not an option.

PCA PLAN:

     The purpose of this project is to ensure that the rails and rollers on DL25 do not cause more than 21 days of downtime. By purchasing this item and having a spare set on site, when the rollers are ready for change out, the dragline will be placed back into service in 21 days or less.

PCA RESULTS:

APPROVALS:

Sponsor:				Date:
Vice President:				Date:

CI-3

Northwestern Resources Co.
1998 Operations Budget Overview

     The 1999 — 2008 Operations Budget was prepared on the basis of the cost incurred by NWR and the work being in the same period.

     Costs were calculated using primarily historical information. Equipment rates used were adjusted based on the age of the fleet. Costs were developed using tons and yards from the 1999 Annual Mine Plan.

     Escalation was then added according to the schedule on page O-24.

     No contingency has been included.

     The Operations Budget is assembled into six major categories:

		6		Production
		6		Environmental
		6		Engineering
		6		Administration
		6		Lease Obligations
		6		Xxxx

X-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
0000 Xperations Budget Summary
1999 – 2003
(Escalated $,000’s)

		1999									2000									2001									2002									2003
Stripping Bank Yards							101,979									109,958									112,021									115,445									118,512
Tons Sold							9,019									9,739									10,062									9,971									10,056
Stripping – cost per yard						$	0.26								$	0.24								$	0.24								$	0.24								$	0.24
						$/Ton									$/Ton									$/Ton									$/Ton									$/Ton
Stripping		$	26,169				2.90				$	26,746				2.75				$	27,381				2.72				$	27,995				2.81				$	28,480				2.83
Lignite Handling			10,925				1.21					10,946				1.12					11,067				1.10					11,211				1.12					11,376				1.13
Roads			2,720				0.30					2,838				0.29					2,764				0.27					2,800				0.28					3,509				0.35
Water Control			3,379				0.37					2,875				0.30					3,149				0.31					3,325				0.33					3,146				0.31
Maintenance			5,034				0.56					5,109				0.52					5,189				0.52					5,269				0.53					5,360				0.53
General			6,674				0.74					7,321				0.75					7,651				0.76					8,390				0.84					10,124				1.01
Current Reclamation			2,277				0.25					2,321				0.24					2,367				0.24					2,413				0.24					2,465				0.25
Post Mine Reclamation			978				0.11					985				0.10					960				0.10					1,020				0.10					1,074				0.11
Compliance			4,805				0.53					4,534				0.47					5,049				0.50					3,667				0.37					5,954				0.59
Total			62,960				6.98					63,674				6.54					65,577				6.52					66,089				6.63					71,488				7.11
Engineering			973				0.11					909				0.09					955				0.09					920				0.09					1,039				0.10
Administration			4,229				0.47					4,421				0.45					4,503				0.45					4,556				0.46					4,635				0.46
Lease Obligations			19,460				2.16					18,121				1.86					13,668				1.36					13,967				1.40					17,870				1.78
Fees			23,356				2.59					31,343				3.22					39,778				3.95					39,751				3.99					31,459				3.13
Grand Total		$	110,977			$	12.30				$	118,468			$	12.16				$	124,481			$	12.37				$	125,282			$	12.56				$	126,491			$	12.58

X-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
0000 Operations Budget Summary
2004 – 2008
(Escalated $,000’s)

		2004									2005									2006									2007									2008
Stripping Bank Yards							117,675									121,354									116,069									119,197									110,022
Tons Sold							10,042									10,090									10,080									9,931									9,944
Stripping – cost per yard						$	0.25								$	0.25								$	0.26								$	0.26								$	0.29
						$/Ton									$/Ton									$/Ton									$/Ton									$/Ton
Stripping		$	29,053			$	2.89				$	29,740			$	2.95				$	30,261			$	3.00				$	31,166			$	3.14				$	31,547			$	3.17
Lignite Handling			11,558				1.15					11,758				1.17					11,977				1.19					12,197				1.23					12,405				1.25
Roads			3,803				0.38					3,692				0.37					3,701				0.37					3,856				0.39					3,290				0.33
Water Control			3,778				0.38					3,889				0.39					3,046				0.30					3,335				0.34					3,788				0.38
Maintenance			5,459				0.54					5,568				0.55					5,687				0.56					5,808				0.58					5,923				0.60
General			6,909				0.69					7,101				0.70					10,632				1.05					7,142				0.72					7,309				0.73
Current Reclamation			2,523				0.25					2,586				0.26					2,656				0.26					2,725				0.27					2,791				0.28
Post Mine Reclamation			1,257				0.13					1,598				0.16					1,412				0.14					1,326				0.13					1,480				0.15
Compliance			5,185				0.52					6,787				0.67					6,466				0.64					4,422				0.45					4,199				0.42
Total			69,526				6.92					72,720				7.21					75,838				7.52					71,977				7.25					72,731				7.31
Engineering			1,188				0.12					974				0.10					991				0.10					890				0.09					903				0.09
Administration			4,571				0.46					4,657				0.46					4,752				0.47					4,850				0.49					4,947				0.50
Lease Obligations			19,152				1.91					17,381				1.72					22,160				2.20					18,095				1.82					19,700				1.98
Fees			28,546				2.84					30,685				3.04					25,168				2.50					30,368				3.06					27,920				2.81
Grand Total		$	122,982			$	12.25				$	126,418			$	12.53				$	128,909			$	12.79				$	126,180			$	12.71				$	126,202			$	12.69

O-8

XXXXXX MINE BUDGET BY LSA CATEGORY

NORTHWESTERN RESOURCES CO.
*** 1999 BUDGET ***
(000’s)

				JAN																																																TOTAL
				1999				FEB				MARCH				APRIL				MAY				JUNE				JULY				AUG				SEPT				OCT				NOV				DEC				1999
**10.2
10.2a P		PRODUCTION			2,196,103				2,068,438				2,358,135				2,427,664				2,487,299				2,413,542				2,340,284				2,438,864				2,275,583				2,227,269				2,289,933				2,088,310				27,611,824
10.2a S		STRIPPING			2,268,998				2,057,992				2,023,417				2,203,926				2,270,798				2,212,926				2,271,298				2,130,747				2,212,826				2,268,298				2,001,918				2,245,498				28,168,642
10.2b		ROYALTIES			1,610,500				1,782,580				1,198,320				926,260				1,182,350				1,673,250				1,740,750				1,784,000				1,770,880				1,764,120				1,694,040				1,722,420				18,849,500
10.2c		OP TAX			82,300				74,500				57,600				41,000				56,600				81,600				84,400				86,600				83,400				85,300				81,800				86,800				901,900
10.2d		GENERAL			487,751				466,015				532,127				465,804				538,349				589,589				584,517				521,234				498,587				495,172				426,169				484,900				6,090,214
** Subtotal					6,645,652				6,449,525				6,169,599				6,064,654				6,535,426				6,971,307				7,021,249				6,961,445				6,841,276				6,840,159				6,493,860				6,627,928				79,622,080
**10.3
10.3a		POST MINE			34,162				36,862				72,863				110,651				123,060				125,050				121,856				118,210				99,641				51,645				44,153				39,370				977,523
10.3b		RENT & ADV			49,340				38,240				71,340				64,040				23,540				27,040				331,440				65,754				41,540				34,840				26,990				57,163				831,267
10.3c		RELOCATION			0				0				0				0				0				0				30,000				36,600				0				0				0				0				66,600
10.3d		AD VAL TAX			33,300				33,300				33,400				33,300				33,300				33,400				33,300				33,300				33,400				33,300				33,300				33,400				400,000
10.3e		COMPLIANCE			190,356				197,571				331,160				205,333				234,111				663,778				766,679				1,053,071				518,810				215,269				178,031				250,539				4,804,708
10.3f		INSURANCE			37,200				37,200				37,200				37,200				37,200				37,200				37,200				37,200				37,200				37,200				37,200				37,200				446,400
** Subtotal					344,358				343,173				545,963				450,524				451,211				886,468				1,320,475				1,344,135				730,591				372,254				319,674				417,672				7,526,498
**10.4
10.4		DED FEES			602,140				545,020				421,260				301,140				415,860				599,890				624,190				641,060				616,960				634,040				607,420				646,140				6,655,120
** Subtotal					602,140				545,020				421,260				301,140				415,860				599,890				624,190				641,060				616,960				634,040				607,420				646,140				6,655,120
**10.5
10.5		MGMT FEES			1,506,090				1,363,350				1,054,080				754,400				1,041,440				1,501,440				1,569,840				1,610,760				1,551,240				1,595,110				1,529,660				1,623,160				16,700,570
** Subtotal					1,506,090				1,363,350				1,054,080				754,400				1,041,440				1,501,440				1,569,840				1,610,760				1,551,240				1,595,110				1,529,660				1,623,160				16,700,570
**99
99		WK CAP			40,300				40,300				40,100				39,900				39,700				39,500				39,400				39,200				38,900				38,700				38,600				38,300				472,900
** Subtotal					40,300				40,300				40,100				39,900				39,700				39,500				39,400				39,200				38,900				38,700				38,600				38,300				472,900
Grand Total					9,138,540				8,741,368				8,231,002				7,610,618				8,483,637				9,998,605				10,375,154				10,596,600				9,778,967				9,480,263				8,989,214				9,353,200				110,977,168

X-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
0000 Operations Budget
Categorical Format
(000’s)

		Budget
Hourly Labor		$	13,697
Salary			3,893
Fringe & Tax			6,478
Materials & Supplies			3,753
Vehicles w/ Labor			695
Contract			11,561
Equipment Operation			12,126
Equipment Maintenance Parts			10,074
Taxes & Insurance			3,304
Royalties & Fees			42,816
Other			2,580
Total		$	110,977

O-10

XXXXXX OPERATIONS BUDGET ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’S)

		TOTAL				TOTAL				TOTAL				TOTAL				TOTAL				5 YEAR
		1999				2000				2001				2002				2003				TOTAL
* PRODUCTION
** STRIPPING
DRAGLINES			15,044.4				15,436.8				15,715.0				15,993.4				16,308.9				78,498.5
BLASTING			2,843.4				2,878.3				3,081.5				3,296.3				3,327.3				15,426.8
BWE			3,742.0				3,818.0				3,881.6				3,945.3				4,017.6				19,404.5
MOBILE			4,538.8				4,612.3				4,703.4				4,760.4				4,825.6				23,440.5
** Subtotal			29,168.6				26,745.4				27,381.5				27,995.4				28,479.4				136,770.3
** LIGNITE
LOADING			2,116.2				2,023.3				2,025.5				2,051.8				2,082.2				10,299.0
HAULING			7,253.8				7,351.7				7,454.4				7,556.2				7,672.9				37,289.0
CRUSHING			1,555.2				1,570.4				1,586.8				1,602.8				1,621.2				7,936.4
** Subtotal			10,925.2				10,945.4				11,066.7				11,210.8				11,376.3				55,524.4
** ROADS
MAINT. OTHER			133.9				129.8				133.3				136.7				140.6				674.3
MAINT. ROADS			2,464.7				2,598.5				2,631.1				2,663.7				2,701.0				13,059.0
CONST. ROADS			121.3				110.3				0.0				0.0				666.9				898.5
** Subtotal			2,719.9				2,838.6				2,764.4				2,800.4				3,508.5				14,631.8
** WATER CTRL
PIT – SURFACE			599.6				606.9				614.9				622.8				631.9				3,076.1
OVERBURDEN			2,780.1				2,268.3				2,533.9				2,701.9				2,514.1				12,798.3
** Subtotal			3,379.7				2,875.2				3,148.8				3,324.7				3,146.0				15,874.4
** MAINTENANCE
SUPPORT			1,381.2				1,410.8				1,442.4				1,473.4				1,508.9				7,216.7
MAINT. OTHER			3,652.5				3,697.5				3,746.3				3,795.2				3,850.8				18,742.3
** Subtotal			5,033.7				5,108.3				5,188.7				5,268.6				5,359.7				25,959.0
** GENERAL
CLEARING			198.6				228.0				234.0				214.3				220.5				1,095.4
DRILLING			578.8				641.2				658.7				337.9				0.0				2,216.6
WAREHOUSE			1,238.0				1,264.2				1,293.7				1,324.1				1,358.3				6,478.3
PROD. TAXES			2,857.8				2,979.7				3,068.1				3,117.2				3,191.0				15,213.8
RELOCATIONS			66.6				457.8				629.0				1,611.9				3,551.6				6,316.9
SUPV. OTHER			1,734.3				1,750.3				1,768.0				1,784.3				1,802.5				8,839.4
** Subtotal			6,674.1				7,321.2				7,651.5				8,389.7				10,123.9				40,160.4
* Total			54,901.2				55,834.1				57,201.6				58,989.6				61,993.8				288,920.3

O-11

XXXXXX OPERATIONS BUDGET ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		TOTAL				TOTAL				TOTAL				TOTAL				TOTAL				5 YEAR
		1999				2000				2001				2002				2003				TOTAL
* ENVIRONMENT
** CURRENT RECL
REGRADE			1,997.9				2,034.3				2,072.8				2,111.0				2,154.6				10,370.6
REVEGETATION			279.3				286.5				294.3				301.9				310.7				1,472.7
** Subtotal			2,277.2				2,320.8				2,367.1				2,412.9				2,465.3				11,843.3
** POST MINE
FACIL REMOVAL			74.6				6.3				5.2				18.5				22.0				126.6
MINE MANGEMEN			903.2				978.9				954.7				1,001.2				1,052.4				4,890.4
** Subtotal			977.8				985.2				959.9				1,019.7				1,074.4				5,017.0
** COMPLIANCE
PERMITS			334.6				388.9				387.8				96.5				69.5				1,277.3
MONITORING			532.4				538.1				555.2				575.2				593.7				2,794.6
SEDIMENT CTRL			2,420.0				2,113.9				1,960.2				1,330.1				3,727.0				11,551.2
COMPL. OTHER			1,518.0				1,493.0				2,145.8				1,664.8				1,564.0				8,385.6
** Subtotal			4,805.0				4,533.9				5,049.0				3,666.6				5,954.2				24,008.7
* Total			8,060.0				7,839.9				8,376.0				7,099.2				9,493.9				40,869.0
* ENGINEER
** ENGINEERING
OPERATIONS ENG			500.8				508.3				505.7				510.3				515.6				2,540.7
CIVIL ENGINEER			161.8				86.1				130.2				98.1				206.9				683.1
SURVEYING			310.0				314.8				318.9				311.9				316.3				1,571.9
** Subtotal			972.6				909.2				954.8				920.3				1,038.8				4,795.7
* Total			972.6				909.2				954.8				920.3				1,038.8				4,795.7
* ADMIN
** ADMIN
BUSINESS			3,379.2				3,424.6				3,485.8				3,542.4				3,606.4				17,438.4
LANDS			220.6				192.8				201.2				185.0				185.7				985.3
EMPLOYEE REL			628.6				803.4				815.9				828.3				842.5				3,918.7
** Subtotal			4,228.4				4,420.8				4,502.9				4,555.7				4,634.6				22,342.4
* Total			4,228.4				4,420.8				4,502.9				4,555.7				4,634.6				22,342.4

O-12

XXXXXX OPERATIONS BUDGET ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		TOTAL				TOTAL				TOTAL				TOTAL				TOTAL				5 YEAR
		1999				2000				2001				2002				2003				TOTAL
* LEASE OBL
** LEASE OBL
DAMAGES			807.1				578.1				807.7				666.6				6.8				2,866.3
RENTALS			312.1				272.1				272.1				272.1				72.1				1,200.5
ROYALTIES			18,340.8				17,270.9				12,588.2				13,028.0				17,791.5				79,019.4
** Subtotal			19,460.0				18,121.1				13,668.0				13,966.7				17,870.4				83,086.2
* Total			19,460.0				18,121.1				13,668.0				13,966.7				17,870.4				83,086.2
* FEES
** FEES
DEDICATION			6,655.1				13,130.9				20,862.1				21,104.8				12,654.2				74,507.1
MANAGEMENT			16,700.6				18,211.9				18,816.1				18,645.8				18,804.7				91,179.1
** Subtotal			23,355.7				31,355.8				39,778.2				39,750.6				31,458.9				165,686.2
* Total			23,355.7				31,342.8				39,778.2				39,750.6				31,458.9				165,686.2
Grand Total			110,977.9				118,467.9				124,481.5				125,282.1				126,490.4				605,699.8

O-13

XXXXXX OPERATIONS BUDGET ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		TOTAL				TOTAL				TOTAL				TOTAL				TOTOAL				5 YEAR
		2004				2005				2006				2007				2008				TOTAL
* PRODUCTION
** STRIPPING
DRAGLINES			16,656.1				17,037.0				17,454.4				17,874.1				18,269.7				87,291.3
BLASTING			3,402.2				3,542.7				3,464.4				3,766.1				3,579.3				17,754.7
BWE			4,097.2				4,184.5				4,280.1				4,376.3				4,446.9				21,405.0
MOBILE			4,897.4				4,976.2				5,062.5				5,149.2				5,231.0				25,316.3
** Subtotal			29,052.9				29,740.4				30,261.4				31,165.7				31,546.9				151,767.3
** LIGNITE
LOADING			2,115.7				2,152.4				2,192.6				2,230.0				2,271.1				10,964.8
HAULING			7,801.3				7,942.1				8,096.4				8,251.6				8,397.9				40,489.3
CRUSHING			1,641.5				1,663.8				1,688.2				1,712.7				1,735.8				8,442.0
** Subtotal			11,558.5				11,758.3				11,977.2				12,197.3				12,404.8				59,896.1
** ROADS
MAINT. OTHER			145.0				149.8				155.0				160.3				165.2				775.3
MAINT. ROADS			2,742.7				2,787.7				2,837.1				2,886.8				2,933.6				14,187.9
CONST. ROADS			915.3				754.4				708.8				808.9				190.7				3,378.1
** Subtotal			3,803.0				3,691.9				3,700.9				3,856.0				3,289.5				18,341.3
** WATER CTRL
PIT – SURFACE			642.0				653.0				665.1				677.2				688.6				3,325.9
OVERBURDEN			3,136.3				3,236.5				2,381.3				2,657.5				3,099.4				14,511.0
** Subtotal			3,778.3				3,889.5				3,046.4				3,334.7				3,788.0				17,836.9
** MAINTENANCE
SUPPORT			1,547.9				1,590.8				1,637.7				1,684.9				1,729.4				8,190.7
MAINT. OTHER			3,911.6				3,977.5				4,049.6				4,123.1				4,193.9				20,255.7
** Subtotal			5,459.5				5,568.3				5,687.3				5,808.0				5,923.3				28,446.4
** GENERAL
CLEARING			227.4				234.9				243.1				251.4				259.2				1,216.0
WAREHOUSE			1,394.8				1,432.7				1,474.1				1,518.2				1,564.2				7,384.0
PROD. TAXES			3,259.2				3,336.4				3,414.4				3,483.8				3,572.9				17,066.7
RELOCATIONS			205.3				254.3				3,635.8				0.0				0.0				4,095.4
SUPV. OTHER			1,821.9				1,842.3				1,864.6				1,888.2				1,912.4				9,329.4
** Subtotal			6,908.6				7,100.6				10,632.0				7,141.6				7,308.7				39,091.5
* Total			60,560.8				61,749.0				65,305.2				63,503.3				64,261.2				315,379.5

O-14

XXXXXX OPERATIONS BUDGET ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		TOTAL				TOTAL				TOTAL				TOTAL				TOTOAL				5 YEAR
		2004				2005				2006				2007				2008				TOTAL
* ENVIRONMENT
** CURRENT RECL
REGRADE			2,202.6				2,255.3				2,313.1				2,371.2				2,425.9				11,568.1
REVEGETATION			320.3				330.9				342.5				354.1				365.1				1,712.9
** Subtotal			2,522.9				2,586.2				2,655.6				2,725.3				2,791.0				13,281.0
** POST MINE
FACIL REMOVAL			32.2				26.7				94.5				25.4				26.1				204.9
MINE MANGEMEN			1,225.0				1,571.1				1,317.1				1,301.0				1,453.7				6,867.9
** Subtotal			1,257.2				1,597.8				1,411.6				1,326.4				1,479.8				7,072.8
** COMPLIANCE
PERMITS			338.9				101.3				362.4				395.0				85.6				1,283.2
MONITORING			613.3				638.8				657.4				684.4				700.9				3,294.8
SEDIMENT CTRL			2,655.5				4,508.4				3,899.8				1,781.8				1,837.1				14,682.6
COMPL. OTHER			1,577.6				1,538.7				1,546.4				1,560.9				1,575.8				7,799.4
** Subtotal			5,185.3				6,787.2				6,466.0				4,422.1				4,199.4				27,060.0
* Total			8,965.4				10,971.2				10,533.2				8,483.8				8,470.2				47,413.8
* ENGINEER
** ENGINEERING
OPERATIONS ENG			521.2				527.2				533.7				540.5				547.5				2,670.1
CIVIL ENGINEER			345.6				120.6				124.8				11.8				12.2				615.0
SURVEYING			321.1				326.4				332.2				338.1				343.6				1,661.4
** Subtotal			1,187.9				974.2				990.7				890.4				903.3				4,946.5
* Total			1,187.9				974.2				990.7				890.4				903.3				4,946.5
* ADMIN
** ADMIN
BUSINESS			3,675.7				3,749.4				3,830.2				3,913.9				3,997.5				19,166.7
LANDS			186.5				187.4				188.3				189.3				190.2				941.7
EMPLOYEE REL			708.8				720.5				733.2				746.4				759.6				3,668.5
** Subtotal			4,571.0				4,657.3				4,751.7				4,849.6				4,947.3				23,776.9
* Total			4,571.0				4,657.3				4,751.7				4,849.6				4,947.3				23,776.9

O-15

XXXXXX OPERATIONS BUDGET ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		TOTAL				TOTAL				TOTAL				TOTAL				TOTOAL				5 YEAR
		2004				2005				2006				2007				2008				TOTAL
* LEASE OBL
** LEASE OBL
DAMAGES			7.0				5.0				5.0				5.0				5.0				27.0
RENTALS			72.1				72.1				72.1				72.1				72.1				360.5
ROYALTIES			19,072.4				17,304.2				22,083.3				18,017.9				19,623.0				96,100.8
** Subtotal			19,151.5				17,381.3				22,160.4				18,095.0				19,700.1				96,488.3
* Total			19,151.5				17,381.3				22,160.4				18,095.0				19,700.1				96,488.3
* FEES
** FEES
DEDICATION			9,767.1				11,816.9				6,318.6				11,797.5				9,324.3				49,024.4
MANAGEMENT			18,778.5				18,868.3				18,849.6				18,571.0				18,595.3				93,662.7
** Subtotal			28,545.6				30,685.2				25,168.2				30,368.5				27,919.6				142,687.1
* Total			28,545.6				30,685.2				25,168.2				30,368.5				27,919.6				142,687.1
Grand Total			122,982.2				126,418.2				128,909.4				126,180.6				126,201.7				630,692.1

O-16

XXXXXX OPERATIONS BUDGET – ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		1999																																																1999
		JAN				FEB				MARCH				APRIL				MAY				JUNE				JULY				AUGUST				SEPT				OCT				NOV				DEC				TOTAL
* PRODUCTION
** STRIPPING
DRAGLINES			1,318.0				1,191.2				1,109.9				1,281.1				1,318.0				1,281.1				1,318.0				1,204.2				1,281.1				1,318.0				1,105.8				1,318.0				15,044.4
BLASTING			250.2				221.2				212.7				240.4				252.0				249.4				252.5				225.8				249.3				249.5				213.7				226.7				2,843.4
BWE			316.1				294.1				316.1				308.8				316.1				308.8				316.1				316.1				308.8				316.1				308.8				316.1				3,742.0
MOBILE			384.7				351.5				384.7				373.6				384.7				373.6				384.7				384.7				373.6				384.7				373.6				384.7				4,538.8
** Subtotal			2,269.0				2,058.0				2,023.4				2,203.9				2,270.8				2,212.9				2,271.3				2,130.8				2.,212.8				2,268.3				2,001.9				2,245.5				26,168.6
** LIGNITE
LOADING			179.4				163.6				179.4				174.2				179.4				174.2				179.4				179.4				174.2				179.4				174.2				179.4				2,116.2
HAULING			615.9				557.3				615.9				596.3				615.9				596.3				615.9				615.9				596.3				615.9				596.3				615.9				7,253.8
CRUSHING			129.6				129.6				129.6				129.6				129.6				129.6				129.6				129.6				129.6				129.6				129.6				129.6				1,555.2
** Subtotal			924.9				850.5				924.9				900.1				924.9				900.1				924.9				924.9				900.1				924.9				900.1				924.9				10,925.2
** ROADS
MAINT. OTHER			7.2				7.2				14.7				7.2				7.2				19.2				21.2				21.2				7.2				7.2				7.2				7.2				133.9
MAINT. ROADS			235.9				223.0				202.5				199.2				210.4				207.2				212.9				202.5				166.9				202.5				199.2				202.5				2,464.7
CONST. ROADS			0.0				0.0				0.0				0.0				101.3				20.0				0.0				0.0				0.0				0.0				0.0				0.0				121.3
** Subtotal			243.1				230.2				217.2				206.4				318.9				246.4				234.1				223.7				274.1				209.7				206.4				209.7				2,719.9
** WATER CTRL
PIT – SURFACE			50.0				50.0				50.0				49.1				56.1				47.1				49.1				49.1				49.1				50.0				50.0				50.0				599.6
OVERBURDEN			193.5				159.5				274.8				267.0				251.3				301.7				251.1				218.9				245.0				188.5				300.6				98.2				2,780.1
** Subtotal			243.5				209.5				324.8				316.1				307.4				348.8				300.2				298.0				294.1				238.5				350.6				148.2				3,379.7
** MAINTENANCE
SUPPORT			115.1				115.1				115.1				115.1				115.1				115.1				115.1				115.1				115.1				115.1				115.1				115.1				1,381.2
MAINT. OTHER			297.7				297.8				300.6				320.3				302.0				300.6				297.7				334.6				305.1				297.7				297.8				300.6				3,652.5
** Subtotal			412.8				412.9				415.7				435.4				417.1				415.7				412.8				449.7				420.2				412.8				412.9				415.7				5,033.7
**GENERAL
CLEARING			15.9				15.9				15.9				23.8				23.8				23.8				15.9				15.9				15.9				15.9				15.9				0.0				198.6
DRILLING			0.0				0.0				70.1				70.1				70.1				70.1				70.1				70.1				70.1				70.1				9.0				9.0				578.8
WAREHOUSE			104.6				102.7				105.3				104.7				102.1				103.3				102.3				104.2				104.1				103.0				101.0				100.7				1,238.0
PROD. TAXES			240.3				234.8				219.2				202.8				221.1				253.8				256.4				253.3				245.1				250.8				240.0				240.2				2,857.8
RELOCATIONS			0.0				0.0				0.0				0.0				0.0				0.0				30.0				36.6				0.0				0.0				0.0				0.0				66.6
SUPV. OTHER			134.5				134.5				136.0				179.0				134.5				134.5				134.5				207.7				134.6				134.5				135.5				134.5				1,734.3
** Subtotal			495.3				487.9				546.5				580.4				551.6				585.5				609.2				687.8				569.8				574.3				501.4				484.4				6,674.1
* Total			4,588.6				4,249.0				4,452.5				4,642.3				4,790.7				4,709.4				4,752.5				4,714.9				4,571.1				4,628.5				4,373.3				4,428.4				54,901.2

O-17

XXXXXX OPERATIONS BUDGET – ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		1999																																																1999
		JAN				FEB				MARCH				APRIL				MAY				JUNE				JULY				AUGUST				SEPT				OCT				NOV				DEC				TOTAL
* ENVIRONMENT
** CURRENT RECL
REGRADE			149.2				143.1				149.9				188.0				190.2				188.7				182.5				181.5				185.7				147.7				144.7				146.7				1,997.9
REVEGETATION			8.0				9.5				38.5				44.0				38.0				22.0				2.5				2.5				15.6				9.0				52.4				37.3				279.3
** Subtotal			157.2				152.6				188.4				232.0				228.2				210.7				185.0				184.0				201.3				156.7				197.1				184.0				2,277.2
** POST MINE
FACIL REMOVAL			0.0				0.0				0.0				10.0				0.0				4.6				30.0				30.0				0.0				0.0				0.0				0.0				74.6
MINE MANAGEMEN			34.2				36.9				72.9				100.7				123.1				120.5				91.9				88.2				99.6				51.6				44.2				39.4				903.2
** Subtotal			34.2				36.9				72.9				110.7				123.1				125.1				121.9				118.2				99.6				51.6				44.2				39.4				977.8
** COMPLIANCE
PERMITS			18.0				13.0				47.2				11.7				13.7				51.7				15.2				7.7				73.2				14.7				20.5				48.0				334.6
MONITORING			26.5				37.2				60.8				33.3				48.4				61.1				33.1				50.5				68.9				29.1				28.4				55.1				532.4
SEDIMENT CTRL			33.1				18.1				44.2				34.0				56.5				388.1				606.6				870.7				264.0				52.8				18.2				33.7				2,420.0
COMPL. OTHER			112.8				129.2				178.9				126.4				115.5				163.0				111.8				124.2				112.8				118.7				111.0				113.7				1,518.0
** Subtotal			190.4				197.5				331.1				205.4				234.1				663.9				766.7				1,053.1				518.9				215.3				178.1				250.5				4,805.0
* Total			381.8				387.0				592.4				548.1				585.4				999.7				1,073.6				1,355.3				819.8				423.6				419.4				473.9				8,060.0
* ENGINEER
** ENGINEERING
OPERATIONS ENG			36.3				48.3				46.4				42.9				36.3				53.4				41.8				49.9				36.4				36.4				36.3				36.4				500.8
CIVIL ENGINEER			17.0				17.0				7.5				7.5				20.0				25.0				28.8				20.0				7.5				7.5				2.0				2.0				161.8
SURVEYING			33.9				21.2				26.2				22.0				24.2				24.2				35.7				24.8				21.2				20.2				21.2				35.2				310.0
** Subtotal			87.2				86.5				80.1				72.4				80.5				102.6				106.3				94.7				65.1				64.1				59.5				73.6				972.6
* Total			87.2				86.5				80.1				72.4				80.5				102.6				106.3				94.7				65.1				64.1				59.5				73.6				972.6
* ADMIN
** ADMIN
BUSINESS			257.1				244.4				316.0				251.5				321.6				344.4				300.7				241.9				299.7				286.3				236.1				279.5				3,379.2
LANDS			15.1				17.1				18.8				15.3				17.2				16.1				15.1				37.0				17.0				19.7				16.4				15.8				220.6
EMPLOYEE REL			55.8				45.3				45.0				50.6				42.2				41.0				76.0				88.4				42.7				49.7				42.9				49.0				628.6
** Subtotal			328.0				306.8				379.8				317.4				381.0				401.5				391.8				367.3				359.4				355.7				295.4				344.3				4,228.4
* Total			328.0				306.8				379.8				317.4				381.0				401.5				391.8				367.3				359.4				355.7				295.4				344.3				4,228.4
* LEASE OBL
** LEASE OBL
DAMAGES			0.0				69.9				70.9				121.0				70.9				70.9				70.9				70.9				120.9				70.9				69.9				0.0				807.1

O-18

XXXXXX OPERATIONS BUDGET – ESCALATED DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		1999																																																1999
		JAN				FEB				MARCH				APRIL				MAY				JUNE				JULY				AUGUST				SEPT				OCT				NOV				DEC				TOTAL
RENTALS			13.8				6.2				43.5				14.2				4.8				3.2				212.6				0.8				2.0				8.1				2.9				0.0				312.1
ROYALTIES			1,630.9				1,727.6				1,136.4				839.8				1,113.0				1,610.1				1,773.6				1,741.1				1,672.5				1,700.2				1,631.8				1,763.8				18,340.8
** Subtotal			1,644.7				1,803.7				1,250.8				975.0				1,188.7				1,684.2				2,057.1				1,812.8				1,795.4				1,779.2				1,704.6				1,763.8				19,460.0
* Total			1,644.7				1,803.7				1,250.8				975.0				1,188.7				1,684.2				2,057.1				1,812.8				1,795.4				1,779.2				1,704.6				1,763.8				19.460.0
* FEES
** FEES
DEDICATION			602.1				545.0				421.3				301.1				415.9				599.9				624.2				641.1				617.0				634.0				607.4				646.1				6,655.1
MANAGEMENT			1,506.1				1,363.4				1,054.1				754.4				1,041.4				1,501.4				1,569.8				1,610.8				1,551.2				1,595.1				1,529.7				1,623.2				16,700.6
** Subtotal			2,108.2				1,908.4				1,475.4				1,055.5				1,457.3				2,101.3				2,194.0				2,251.9				2,168.2				2,229.1				2,137.1				2,269.3				23,355.7
* Total			2,108.2				1,908.4				1,475.4				1,055.5				1,457.3				2,101.3				2,194.0				2,251.9				2,168.2				2,229.1				2,137.1				2,269.3				23,355.7
Grand Total			9,138.5				8.741.4				8,231.0				7,610.7				8,483.6				9,998.7				10,575.3				10,596.9				9,779.0				9,480.2				8,889.3				9,353.3				110,977.9

O-19

XXXXXX OPERATIONS BUDGET – ESCALATED
DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		2000																2000				2001																2001				2002				2003				5-YEAR
		QTR 1				QTR 2				QTR 3				QTR 4				TOTAL				QTR 1				QTR 2				QTR 3				QTR 4				TOTAL				TOTAL				TOTAL				TOTAL
* PRODUCTION
** STRIPPING
DRAGLINES			3728.3				3947.3				3964.8				3796.4				15436.8				3795.5				4018.4				4036.3				3864.8				15715.0				15993.4				16308.9				78,498.5
BLASTING			743.5				732.5				741.7				660.6				2878.3				726.3				764.3				787.0				803.9				3081.5				3296.3				3327.3				15,426.8
BWE			944.2				953.6				961.1				959.1				3818.0				959.9				969.5				977.1				975.1				3881.6				3945.3				4017.6				19,404.5
MOBILE			1117.4				1157.5				1168.7				1168.7				4612.3				1165.4				1171.8				1183.1				1183.1				4703.4				4760.4				4825.6				23,440.5
** Subtotal			6533.4				6790.9				6836.3				6584.8				26745.4				6647.2				6924.0				6983.5				6826.9				27381.5				27995.4				28479.4				136,770.3
** LIGNITE
LOADING			517.5				498.4				503.7				503.7				2023.3				499.7				505.0				510.4				510.4				2025.5				2051.8				2082.2				10,299.0
HAULING			1813.2				1832.9				1852.8				1852.8				7351.7				1838.5				1858.5				1878.7				1878.7				7454.4				7556.2				7672.9				37,289.0
CRUSHING			392.6				392.6				392.6				392.6				1570.4				396.7				396.7				396.7				396.7				1586.8				1602.8				1621.2				7,936.4
** Subtotal			2723.3				2723.9				2749.1				2749.1				10945.4				2734.9				2760.2				2785.8				2785.8				11066.7				11210.8				11376.3				55,524.4
** ROADS
MAINT. OTHER			22.2				34.5				50.9				22.2				129.8				22.8				35.4				52.3				22.8				133.3				136.7				140.6				674.3
MAINT. ROADS			691.6				650.3				622.5				634.1				2598.5				699.9				658.6				630.7				641.9				2631.1				2663.7				2701.0				13,059.0
CONST. ROADS			0.0				110.3				0.0				0.0				110.3				0.0				0.0				0.0.				0.0				0.0				0.0				666.9				898.5
** Subtotal			713.8				795.1				673.4				656.3				2838.6				722.7				694.0				683.0				664.7				2764.4				2800.4				3508.5				14,631.8
** WATER CTRL
PIT – SURFACE			151.8				154.2				149.1				151.8				606.9				153.8				156.3				151.0				153.8				614.9				622.8				631.9				3,076.1
OVERBURDEN			590.3				662.9				580.9				434.2				2268.3				605.3				763.5				595.6				569.5				2533.9				2701.9				2514.1				12,798.3
** Subtotal			742.1				817.1				730.0				586.0				2875.2				759.1				919.8				746.6				723.3				3148.8				3324.7				3146.0				15,874.4
**MAINTENANCE
SUPPORT			352.7				352.7				352.7				352.7				1410.8				360.6				360.6				360.6				360.6				1442.4				1473.4				1508.9				7,216.7
MAINT. OTHER			907.3				934.2				948.7				907.3				3697.5				919.4				946.5				961.0				919.4				3746.3				3795.2				3850.8				18,742.3
** Subtotal			1260.0				1286.9				1301.4				1260.0				5108.3				1280.0				1307.1				1321.6				1280.0				5188.7				5268.6				5359.7				25,959.0
** GENERAL
CLEARING			57.0				57.0				57.0				57.0				228.0				58.5				58.5				58.5				58.5				234.0				214.3				220.5				1,095.4
DRILLING			79.4				238.2				232.0				91.6				641.2				81.6				244.7				238.3				94.1				658.7				337.9				0.0				2,216.6
WAREHOUSE			319.3				316.7				317.1				311.1				1264.2				326.8				324.0				324.5				318.4				1293.7				1324.1				1358.3				6,478.3
PROD. TAXES			742.3				719.0				764.0				754.4				2979.7				747.2				767.1				782.2				771.6				3068.1				3117.2				3191.0				15,213.8
RELOCATIONS			266.8				128.3				62.7				0.0				457.8				22.1				316.1				290.8				0.0				629.0				1611.9				3551.6				6,316.9
SUPV. OTHER			408.6				452.4				480.2				409.1				1750.3				413.5				456.3				486.3				411.9				1768.0				1784.3				1802.5				8,839.4
** Subtotal			1873.4				1911.6				1913.0				1623.2				7321.2				1649.7				2166.7				2180.6				1654.5				7651.5				8389.7				10123.9				40,160.4
* Total			13846.0				14325.5				14203.2				13459.4				55834.1				13793.5				14771.8				14701.1				13935.2				57201.6				58989.6				61993.8				288,920.3

O-20

XXXXXX OPERATIONS BUDGET – ESCALATED
DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		2000																2000				2001																2001				2002				2003				5-YEAR
		QTR 1				QTR 2				QTR 3				QTR 4				TOTAL				QTR 1				QTR 2				QTR 3				QTR 4				TOTAL				TOTAL				TOTAL				TOTAL
* ENVIRONMENT
** CURRENT RECL
REGRADE			450.0				577.6				560.1				446.6				2034.3				458.1				589.1				571.1				454.5				2072.8				2111.0				2154.6				10,370.6
REVEGETATION			57.5				106.7				21.1				101.2				286.5				59.0				109.6				21.7				104.0				294.3				301.9				310.7				1,472.7
** Subtotal			507.5				684.3				581.2				547.8				2320.8				517.1				698.7				592.8				558.5				2367.1				2412.9				2465.3				11,843.3
** POST MINE FACIL REMOVAL			0.0				0.0				6.3				0.0				6.3				0.0				0.0				5.2				0.0				5.2				18.5				22.0				126.6
MINE MANAGEMENT			157.6				382.9				291.3				147.1				978.9				167.2				434.3				196.9				156.3				954.7				1001.2				1052.4				4,890.4
** Subtotal			157.6				382.9				297.6				147.1				985.2				167.2				434.3				202.1				156.3				959.9				1019.7				1074.4				5,017.0
** COMPLIANCE
PERMITS			75.4				107.0				92.7				113.8				388.9				85.3				115.7				95.7				91.1				387.8				96.5				69.5				1,277.3
MONITORING			136.3				130.2				147.9				123.7				538.1				140.1				136.1				151.9				127.1				555.2				575.2				593.7				2,794.6
SEDIMENT CTRL			102.2				500.3				1398.6				112.8				2113.9				105.0				429.5				1309.9				115.8				1960.2				1330.1				3727.0				11,551.2
COMPL. OTHER			416.6				360.8				360.4				355.2				1493.0				420.8				362.9				604.6				757.5				2145.8				1664.8				1564.0				8,385.6
** Subtotal			730.5				1098.3				1999.6				705.5				4533.9				751.2				1044.2				2162.1				1091.5				5049.0				3666.5				5954.2				24,008.7
* Total			1395.6				2165.5				2878.4				1400.4				7839.9				1435.5				2177.2				2957.0				1806.3				8376.0				7099.2				9493.9				40,869.0
* ENGINEER
** ENGINEERING
OPERATIONS ENG			132.4				116.3				149.9				109.7				508.3				133.8				117.2				144.3				110.4				505.7				510.3				515.6				2,540.7
CIVIL ENGINEER			10.3				32.7				32.8				10.3				86.1				12.6				50.2				54.8				12.6				130.2				98.1				206.9				683.1
SURVEYING			78.1				78.9				79.7				78.1				314.8				79.1				79.9				80.8				79.1				318.9				311.9				316.3				1,571.9
** Subtotal			220.8				227.9				262.4				198.1				909.2				225.5				247.3				279.9				202.1				954.8				920.3				1038.8				4,795.7
** Total			220.8				227.9				262.4				198.1				909.2				225.5				247.3				279.9				202.1				954.8				920.3				1038.8				4,795.7
* ADMIN
** ADMIN
BUSINESS			829.6				921.9				854.8				818.3				3424.6				842.8				947.7				868.5				826.8				3485.8				3542.4				3606.4				17,438.4
LANDS			47.2				47.3				47.7				50.6				192.8				46.4				58.1				46.9				49.8				201.2				185.0				185.7				985.3
EMPLOYEE REL			196.0				171.3				256.8				179.3				803.4				198.9				173.4				261.9				181.7				815.9				828.3				842.5				3,918.7
** Subtotal			1072.8				1140.5				1159.3				1048.2				4420.8				1088.1				1179.2				1177.3				1058.3				4502.9				4555.7				4634.6				22,342.4
* Total			1072.8				1140.5				1159.3				1048.2				4420.8				1088.1				1179.2				1177.3				1058.3				4502.9				4555.7				4634.6				22,342.4

O-21

XXXXXX OPERATIONS BUDGET – ESCALATED
DOLLARS

NORTHWESTERN RESOURCES CO.
BUDGET SUMMARY REPORT
1999 BUDGET
(000’s)

		2000																2000				2001																2001				2002				2003				5-YEAR
		QTR 1				QTR 2				QTR 3				QTR 4				TOTAL				QTR 1				QTR 2				QTR 3				QTR 4				TOTAL				TOTAL				TOTAL				TOTAL
* LEASE OBL
** LEASE OBL
DAMAGES			83.3				205.8				205.7				83.3				578.1				140.8				263.1				263.0				140.8				807.7				666.6				6.8				2,866.3
RENTALS			73.4				72.2				65.4				61.1				272.1				73.4				72.2				65.4				61.1				272.1				272.1				72.1				1,200.5
ROYALTIES			4530.8				3739.2				4450.0				4550.9				17270.9				3113.5				3013.5				3224.7				3236.5				12588.2				13028.0				17791.5				79,019.4
** Subtotal			4687.5				4017.2				4721.1				4695.3				18121.1				3327.7				3348.8				3553.1				3438.4				13668.0				13966.7				17870.4				83,086.2
* Total			4687.5				4017.2				4721.1				4695.3				18121.1				3327.7				3348.8				3553.1				3438.4				13668.0				13966.7				17870.4				83,086.2
* FEES
** FEES
DEDICATION			3373.5				2799.9				3380.7				3576.8				13130.9				5028.8				5031.2				5302.2				5599.9				20962.1				21104.8				12654.2				74,507.1
MANAGEMENT			4678.7				3884.0				4690.0				4959.2				18211.9				4514.2				4516.1				4759.2				5026.6				18816.1				18645.8				18804.7				91,179.1
** Subtotal			8052.2				6683.9				8070.7				8536.0				31342.8				9543.0				9547.3				10061.4				10626.5				39778.2				39750.6				31458.9				165,686.2
* Total			8052.2				6683.9				8070.7				8536.0				31342.8				9543.0				9547.3				10061.4				10626.5				39778.2				39750.6				31458.9				165,686.2
Grand Total			29274.9				28560.5				31295.1				29337.4				118467.9				29413.3				31271.6				32729.8				31066.8				124481.5				125282.1				126490.4				605,699.8

O-00

Xxxxxxxxxxxx Xxxxxxxxx Xx.
0000 Xperations Budget Escalation

     The escalation rates used in the Operations Budget were taken from the 1998 Houston Industries, Inc. Cost Escalation Study, dated May 1998. This study was provided by HL&P to NWR. NWR then determined the appropriate indices to be used for each budget item, and weighted them based on the percentage of dollars in each item associated with a particular index. The following page shows the selected indices for the 1999 Operations Budget.

     Budget dollars are calculated as of July 1998. The budget is then escalated quarterly for 2000 and 2001, and annually for 2002 through 2008, to derive the escalated dollar budget. The method used gives an effective annual rate after compounding equal to the stated escalation rates.

O-00

Xxxxxxxxxxxx Xxxxxxxxx Xx.
0000 Xperations Budget
Applied Indices

													RATE APPLIED
DESCRIPTION			1999 INDEX					2000 – 2008 INDEX					1999					2000					2001					2002					2003					2004					2005					2006					2007					2008
Hourly Labor			NWR Wage Study					Bituminous Coal & Lignite						2.6					2.1					2.7					2.7					2.7					2.8					2.9					2.9					3.0					3.0
Salaried Labor			NWR Wage Study					Bituminous Coal & Lignite						2.6					2.1					2.7					2.7					2.7					2.8					2.9					2.9					3.0					3.0
Travel Expenses			None					Total Admin & General (Materials)						3.2					3.2					3.5					3.5					3.8					3.9					3.9					4.1					4.2					4.2
Equipment Costs			Mining PPI 3532					Mining PPI 3532						1.7					2.6					2.7					2.6					2.9					3.1					3.3					3.5					3.4					3.1
Permits, Fees, Bonds & Insurance			None (Agency Survey)					GDP Deflator						1.9					2.2					2.1					2.2					2.4					2.5					2.6					2.8					2.8					2.9
Contract Services, Tools & Supplies			Mining PPI 3532					Mining PPI 3532						1.7					2.6					2.7					2.6					2.9					3.1					3.3					3.5					3.4					3.1
Management & Dedication Fee			GDP Deflator					GDP Deflator						1.9					2.2					2.1					2.2					2.4					2.5					2.6					2.8					2.8					2.9

1999 costs are based on 1998 current dollars plus escalation. 1999 – 2008 are escalated from the basis by the indicated rate as taken from the HII Cost Escalation Study (May, 1998)

O-24

Northwestern Resources Co.
Xxxxxx Mine
Sales Tonnage Projections
1999 Budget
(000’s)

			Sales Tons by Ownership
Period			NWR				HL&P				Other					Total
January				253				570				0					823
February				229				516				0					745
March				177				399				0					576
April				126				284				0					410
May				174				392				0					566
June				251				565				0					816
July				259				585				0					844
August				266				600				0					866
September				256				578				0					834
October				262				591				0					853
November				251				567				0					818
December				267				601				0					868
1999 Total				2,771				6,248				0					9,019
1st Quarter				1,394				1,108				0					2,502
2nd Quarter				1,157				920				0					2,077
3rd Quarter				1,397				1,111				0					2,508
4th Quarter				1,478				1,174				0					2,652
2000 Total				5,426				4,313				0					9,739
1st Quarter				2,078				336				0					2,414
2nd Quarter				2,079				336				0					2,415
3rd Quarter				2,191				354				0					2,545
4th Quarter				2,314				374				0					2,688
2001 Total				8,662				1,400				0					10,062
2002 Total				8,721				1,250				0					9,971
2003 Total				5,229				4,827				0					10,056
2004 Total				4,036				6,006				0					10,042
2005 Total				4,883				4,405				802					10,090
2006 Total				2,611				7,302				167					10,080
2007 Total				4,875				5,049				7					9,931
2008 Total				3,853				6,091				0					9,944
Grand Total				51,067				46,891				976					98,934

A-1

Northwestern Resources Co.
Xxxxxx Mine
Bank Cubic Yards
1999 Budget
(000’s)

			Stripping Bank Cubic Yards
Period			Dragline/BWE				Mobile				Contract					Total
January				8,333				605				0					8,938
February				7,356				552				0					7,908
March				7,083				609				0					7,692
April				8,007				580				0					8,587
May				8,398				602				0					9,000
June				8,308				577				0					8,885
July				8,411				585				0					8,996
August				7,521				607				0					8,128
September				8,304				578				0					8,882
October				8,530				605				0					9,135
November				7,115				584				0					7,699
December				7,550				579				0					8,129
1999 Total				94,916				7,063				0					101,979
1st Quarter				24,137				3,523				0					27,660
2nd Quarter				23,776				3,554				0					27,330
3rd Quarter				24,078				3,629				0					27,707
4th Quarter				21,438				5,823				0					27,261
2000 Total				93,429				16,529				0					109,958
1st Quarter				22,958				4,234				0					27,192
2nd Quarter				24,155				3,451				0					27,606
3rd Quarter				24,865				3,465				0					28,330
4th Quarter				25,411				3,482				0					28,893
2001 Total				97,389				14,632				0					112,021
2002 Total				101,554				13,891				0					115,445
2003 Total				99,620				18,892				0					118,512
2004 Total				98,798				18,877				0					117,675
2005 Total				99,593				21,761				0					121,354
2006 Total				94,094				21,975				0					116,069
2007 Total				98,928				20,269				0					119,197
2008 Total				91,185				18,837				0					110,022
Grand Total				969,506				172,726				0					1,142,232

A-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
Xxxxxx Xine
Major Equipment Requirements
1900 Xxxxxx

																																																						Xxxxx Xxx																								Xxx Xumps
														Dozers																								Scraper				Graders								Water				Loaders								Coal				Backhoes												100				150
						Draglines				BWE				D9N				D10N				D11N				D7				834B				583K				657				16G				24H				Tracks				992D				Small				Haulers				8.5				Lg				Sm				Ton				Ton
1998		December					4				1				4				6				2				2				1				2				1				4				0				2				1				1				14				2				2				1				5				0
1999		January					4				1				4				6				2				2				1				2				1				4				0				2				1				1				14				2				2				1				5				0
		February					4				1				4				6				2				2				1				2				1				4				0				2				1				1				14				2				2				1				5				0
		March					4				1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				5				0
		April					4				1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		May					4				1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		June					4				1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		July					4				1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		August					4				1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		September					4				1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		October					4				1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		November					4				1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
		December					4				1				4				6				2				2				1				2				1				3				1				2				1				1				14				2				2				1				3				2
2000		1st Qtr					4				1				4				6				2				2				1				2				1				2				2				2				1				1				14				2				2				1				3				6
		2nd Qtr					4				1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
		3rd Qtr					4				1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
		4th Qtr					4				1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
2001		1st Qtr					4				1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
		2nd Qtr					4				1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
		3rd Qtr					4				1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
		4th Qtr					4				1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
2002							4				1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				3				6
2003							4				1				4				6				2				2				1				2				1				2				2				2				1				1				14				1				3				1				2				8
2004-2008							4				1				4				7				2				2				1				2				1				2				2				2				1				1				14				0				4				1				0				11

X-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
Xxxxxx Xine
Major Equipment Replacements
1999 Budget

Backhoes

Coal

Dozers

End

Graders

Loaders

Scrapers

Water

8.5

Large

Small

Haulers

834B

D7

D9N

D10N

D11N

Dump

16G

992C

657

Trucks

1999

January

February

March

April

May

June

July

August

September

October

November

December

2000

1st Quarter

D905/906

G004*

2nd Quarter

B007

D702

D907

D105/106

L007

S503

3rd Quarrter

4th Quarter

2001

1st Quarter

2nd Quarter

D701

3rd Quarter

4th Quarter

2002

2003

2004

B008/LS01

Add

D111

2005

D107

2006

D904/905

D108

2007

D908/104

G005/006

2008

* Replace G003 and G004 with new 24H motorgraders.

A-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
Xxxxxx Xine
Average Equipment Lives
1999 Budget

Equipment		Life
2 – 2 1/2 Ton Service Truck (2WD)		7 Years
2 – 2 1/2 Ton Service Truck (4WD)		7 years
Air Compressor		10 Years
Backhoe – 8.5 CY		50,000 Hours
Backhoe – Cat 5130		60,000 Hours
Backhoe – Small		35,000 Hours
Belting – BWE Overland Conveyor		4 Years
Belting – LHF Conveyor		6 Years
Cable Reeler		15 Years
Crane – Large (45 & 75 ton)		15 Years
Dozer		55,000 Hours
Dozer – D7		55,000 Hours
Dozer – Pipelayer		LOM
Dozer – Rubber Tire		40,000 Hours
End Dump		55,000 Hours
Forklift – 15 Ton		15 Years
Forklift – 4 Ton		15 Years
Front End Loader – 992C		40,000 Hours
Front End Loader – Small (2-5 Yard)		7 Years
Fuel / Lube Truck		5 Years
Fuel / Lube Truck – Bed		10 Years
Grader		80,000 Hours
Hauler		100,000 Hours
Light Plant		10 Years
Lowboy — Tractor		10 Years
Lowboy – Trailer		LOM
Pickup		100,000 Miles
Portable Welder		10 Years
Pump – Diesel		10 Years
Pump – Electric		5 Years
Pump Barge		Rebuilt @ 5 & 15 Years
Scraper		40,000 Hours
Suburban / Van		100,000 Miles
Water Truck		LOM

A-5

Northwestern Resources Co.
Xxxxxx Mine
Major Equipment Hourly Rates
1999 Budget
(in 1999 dollars)

		Operating																Maintenance
		Fuel/				Lube/				Wear				Total												Total				Total Hourly				18 Months
Fleet		Electricity				Other				Components				Operating				Parts				Labor (#)				Maintenance				Cost				Actual
HOURLY RATES
8200 Dragline		$	93.20			$	7.39			$	44.62			$	145.21			$	58.13			$	45.43			$	103.56			$	248.77			$	243.21
8750 Dragline			162.78				16.30				120.60				299.68				68.65				86.39				155.04				454.72				493.84
Backhoe — 8.5 CY			6.00				2.50				12.00				20.50				12.50				8.00				20.50				41.00				29.83
Backhoe — Cat 5130			13.50				5.00				10.00				28.50				20.00				9.00				29.00				57.50				46.30
Backhoe — Small			6.00				1.50				10.00				17.50				25.75				12.85				38.60				56.10				73.17
BWE			40.20				6.77				22.26				69.23				157.07				48.56				205.63				274.86				389.33
Dozer — 834B			6.50				1.40				2.50				10.40				10.65				6.25				16.90				27.30				22.98
Dozer — D7H			5.00				1.00				7.95				13.95				11.50				7.45				18.95				32.90				38.22
Dozer — D9N			8.75				1.50				13.00				23.25				19.00				8.05				27.05				50.30				49.70
Dozer — D9L, D10N, 375			11.15				1.60				13.00				25.75				23.50				8.05				31.55				57.30				56.50
Dozer — D11N			13.25				1.65				20.45				35.35				24.50				8.95				33.45				68.80				57.00
Dozer — Pipelayer			6.25				1.50				10.00				17.75				16.75				20.25				37.00				54.75				52.31
End Dump			11.00				3.50				4.45				18.95				18.50				9.00				27.50				46.45				48.52
End Dump — 150 ton			20.00				4.00				3.50				27.50				5.00				5.00				10.00				37.50				—
Front End Loader-992			14.50				3.00				5.65				23.15				18.75				7.75				26.50				49.65				53.68
Front End Loader-Small			4.00				2.85				2.00				8.85				9.00				7.00				16.00				24.85				27.10
Grader — 16G			4.80				0.90				2.50				8.20				9.50				4.00				13.50				21.70				19.96
Grader — 24H			5.76				1.35				3.00				10.11				7.13				3.00				10.13				20.24				—
Hauler			9.20				3.22				12.42				24.84				29.21				11.85				41.06				65.90				78.54
Scraper			19.00				2.50				15.10				36.60				42.45				18.25				60.70				97.30				116.08
Water Truck			9.50				3.50				8.00				21.00				18.50				9.00				27.50				48.50				107.18
Water Wagon			8.50				2.50				6.25				17.25				15.00				9.50				24.50				41.75				80.21
MONTHLY RATES
8200 Bucket			n/a				n/a				2,825.00				2,825.00				42,908.00				18,800.00				61,708.00				64,533.00				88,085.90
8750 Bucket			n/a				n/a				490.00				490.00				9,000.00				5,000.00				14,000.00				14,490.00				**
Crusher			n/a				800.00				1,025.00				1,825.00				20,050.00				15,475.00				35,525.00				37,350.00				36,831.30

#		Maintenance labor rates include fringe and tax.
**		8750 buckets have only been in use since September 1997.

Note: These rates exclude any allowance for catastrophic failures or accidents.

Fuel costs per hour are based on $.52 per gallon for diesel, and $.0397 per KWH for electricity.

A-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
Xxxxxx Xine
Major Equipment Hourly Rates
1999 Budget
(in 1999 dollars)

						2000													2001													2002													2003
Fleet		Operating				Maintenance				Total					Operating				Maintenance				Total					Operating				Maintenance				Total					Operating				Maintenance				Total
HOURLY RATES
8200 Dragline		$	145.21			$	103.56			$	248.77				$	145.21			$	103.56			$	248.77				$	145.21			$	103.56			$	248.77				$	145.21			$	103.56			$	248.77
8750 Dragline			299.68				155.04				454.72					299.68				155.04				454.72					299.68				155.04				454.72					299.68				155.04				454.72
Backhoe — 8.5 CY			20.50				20.50				41.00					20.50				20.50				41.00					20.50				20.50				41.00					20.50				20.50				41.00
Backhoe — Cat. 5130			28.50				29.00				57.50					28.50				29.00				57.50					28.50				29.00				57.50					28.50				29.00				57.50
Backhoe — Small			17.50				38.60				56.10					17.50				38.60				56.10					17.50				38.60				56.10					17.50				38.60				56.10
BWE			69.23				205.63				274.86					69.23				205.63				274.86					69.23				205.63				274.86					69.23				205.63				274.86
Dozer — 834B			10.40				16.90				27.30					10.40				16.90				27.30					10.40				16.90				27.30					10.40				16.90				27.30
Dozer — D7H			13.95				18.95				32.90					13.95				18.95				32.90					13.95				18.95				32.90					13.95				18.95				32.90
Dozer — D9N			23.25				27.05				50.30					23.25				27.05				50.30					23.25				27.05				50.30					23.25				27.05				50.30
Dozer — D9L,D10N,375			25.75				31.55				57.30					25.75				31.55				57.30					25.75				31.53				57.30					25.75				31.55				57.30
Dozer — D11N			35.35				33.45				68.80					35.35				33.45				68.80					35.35				33.45				68.80					35.35				33.45				68.80
Dozer — Pipelayer			17.75				37.00				54.75					17.75				37.00				54.75					17.75				37.00				54.75					17.75				37.00				54.75
End Dump			18.95				27.50				46.45					18.95				27.50				46.45					18.95				27.50				46.45					18.95				27.50				46.45
End Dump — 150 ton			27.50				10.00				37.50					27.50				10.00				37.50					27.50				10.00				37.50					27.50				10.00				37.50
Front End Loader 992			23.15				26.50				49.65					23.15				26.50				49.65					23.15				26.50				49.65					23.15				26.50				49.65
Front End Loader Small			8.85				16.00				24.85					8.85				16.00				24.85					8.85				16.00				24.85					8.85				16.00				24.85
Grader — 16G			8.20				13.50				21.70					8.20				13.50				21.70					8.20				13.50				21.70					8.20				13.50				21.70
Grader — 24H			10.11				10.13				20.24					10.11				10.13				20.24					10.11				10.13				20.24					10.11				10.13				20.24
Hauler			24.84				41.06				65.90					24.84				41.06				65.90					24.84				41.06				65.90					24.84				41.06				65.90
Scraper			36.60				60.70				97.30					36.60				60.70				97.30					36.60				60.70				97.30					36.60				60.70				97.30
Water Truck			21.00				27.50				48.50					21.00				27.50				48.50					21.00				27.50				48.50					21.00				27.50				48.50
Water Wagon			17.25				24.50				41.75					17.25				24.50				41.75					17.25				24.50				41.75					17.25				24.50				41.75
MONTHLY RATES
8200 Bucket			2,825				61,708				64,533					2,825				61,708				64,533					2,825				61,708				64,533					2,825				61,708				64,533
8750 bucket			490				14,000				14,490					490				14,000				14,490					490				14,000				14,490					490				14,000				14,490
Crusher			1,825				35,525				37,350					1,825				35,525				37,350					1,825				35,525				37,350					1,825				35,525				37,350

# Maintenance labor rates include fringe and tax.

Note:    These rates exclude any allowance for catastrophic failures or accidents.
Fuel costs per hour are based on $.52 per gallon for diesel, and $.0397 per KWH for electricity. (Years 2004 — 2008 will utilize the 2003 rates.)

A-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
Xxxxxx Xine
Support Equipment Rates
1999 Budget

The following is a summary, by fleet, of support equipment utilized at the Xxxxxx Mine. Certain fleets have been split into greater detail where quantities and costs of individual units significantly influence the overall fleet cost.

				Monthly
Number of				O & M Cost				18 Month
Units - 1999				Per Unit				Actuals
1		Cable Reeler		$	2,290			$	1,872
1		Crane – 45 ton			3,135				3,390
1		Crane – 75 ton			2,080				1,296
3		Forklifts			490				684
13		Light Plants			1,135				1,030
1		Lowboy Tractor & Trailer			12,800				12,965
48		Pickups			1,185				1,295
3		Pump Buggies			1,005				1,008
6		Pumps – Diesel 4”			815				727
11		Pumps – Diesel 6”			1,285				1,212
2		Pumps – Electric 6”			420				438
6		Pumps – Electric 8”			655				647
3		Trucks – Mech/Elec (4wd, 2 1/2 ton)			2,375				2,142
2		Trucks – Fuel / Lube			5,760				5,452
3		Trucks – Mechanic’s Boom			2,240				2,027
3		Trucks – Pumpers (2 1/2 ton)			1,475				1,307
3		Vans (Crew Change)			680				630

X-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
Xxxxxx Xine
Wage Projection and Overtime Assumptions
1999 Budget

														Number of
		Wage Rates ($ / Hour)												Employees
Title		Step A				Step B				Step C				As of 7/1/99
Dragline Operator BWE System Operator		$	21.52			$	21.84			$	22.22				24
Dragline/BWE Oiler Operator I Mechanic I Electrician I		$	20.98			$	21.23			$	21.48				24 8 9 2
Operator II Mechanic II Electrician II		$	20.25			$	20.48			$	20.75				115 63 14
Operator III Mechanic III Electrician III Surveyor I		$	17.96			$	18.46			$	18.94				19 5 0 1
Operator IV Mechanic IV Electrician IV Surveyor II Warehouse		$	16.72			$	17.28			$	17.82				17 3 0 2 5
Surveyor III Laborer I		$	12.36			$	13.62			$	14.86				0 0
Surveyor IV Laborer II		$	9.05			$	10.56			$	11.26				0 0
						Total Employees									311

Note: Wage rates are escalated, and do not include shift differential or loading. This is the expected distribution as of July 1, 1999.

Overtime Assumptions:

The overtime rate used for budgeting in 1999 is 9.4%. The shifts cause a scheduled overtime rate of 10%, however, not all hourly personnel work the 12 hour shifts. That fact, combined with vacation and other absences, reduces the 10% rate to the 9.4% projected for 1999.

A-0

Xxxxxxxxxxxx Xxxxxxxxx Xx.
Xxxxxx Xine
Payroll Loading Factors
(as of % of Payroll)
1999 Budget

										BUDGET
FRINGE BENEFITS										RATES
Health & Life Insurance											10.76	%
Pension											2.01	%
Payroll Savings											3.11	%
Total Fringe Benefits											15.88	%
TAXES
		1999*
		Statutory
		Rates				Limit
FICA			7.65	%		$	68,400				8.50	%
State Unemployment			0.78	%			9,000				0.16	%
Federal Unemployment			0.80	%			7,000				0.13	%
Total Payroll Taxes											8.79	%
Total Fringe & Tax											24.67	%
NON-WORKED COMPENSATION
Vacation											5.67	%
Sick Leave											1.45	%
Holidays											3.87	%
Other											0.15	%
Total Non-Worked Compensation											11.14	%
		TOTAL PAYROLL LOADING									35.81	%
OTHER BENEFITS NOT LOADED WITH PAYROLL
Workers Compensation			0.74	%
Post Retirement Benefits			2.07	%
Post Employment Benefits			0.16	%

* 1999 Statutory rates are based on 1998 and subject to change.

A-10

Northwestern Resources Co.
Xxxxxx Mine
Payroll Loading Factors
1999 Budget

Calculation

Fringe benefits, payroll taxes, and non-worked compensation rates are calculated based on total payroll dollars. Payroll taxes are forecasted for future years based on 1998 statutory rates and on 1999 budgeted staffing and payroll.

Hospitalization is based on projected staffing and on projected premiums for 1999.

Pensions are based on staffing, payroll, and an actuarial study performed in June, 1998.

Payroll savings is based on historical costs and forecasted for the coming years using 1999 budgeted staffing levels.

Non-worked compensation is based on NWR policies and historical experience and forecasted for future periods.

Application

For accounting purposes, payroll taxes are not expensed at the effective budget rate, but at the statutory rates and limits. When non-worked compensation occurs, the charge is against the liability recognized when payroll was originally loaded. Total costs are consistent between budget and accounting methods.

Post Retirement/Post Employment benefits are calculated as a % of payroll for accrual, but billed on an incurred basis.

A-00

Xxxxxxxxxxxx Xxxxxxxxx Xx.
Xxxxxx Xine Staffing Summary
1999 Budget

						1998				1998
						1st Qtr				Year End				1999																Year End Estimates
						Actuals				Estimate				First				Second				Third				Fourth				2000				2001				2002				2003
Operations Engineering							4				4				5				5				5				5				5				5				5				5
Environmental Services							6				6				6				6				6				6				6				6				6				6
Operators							206				201				201				201				201				201				201				201				201				201
Mechanics / Electricians							97				95				94				94				94				94				94				94				94				94
Warehouse							5				5				5				5				5				5				5				5				5				5
TOTAL HOURLY							318				311				311				311				311				311				311				311				311				311
Administration			(A	)			2				2				2				2				2				2				2				2				2				2
Lands			(C	)			3				3				3				3				3				3				3				3				3				3
Environmental Services							16				17				17				17				17				17				17				17				17				17
Operations Engineering							5				5				5				5				5				5				5				5				5				5
Human Resources							5				6				6				6				6				6				6				6				6				6
Business			(B	)			22				22				22				22				22				22				22				22				22				22
Production/Maintenance							27				27				27				27				27				27				27				27				27				27
TOTAL SALARY							80				82				82				82				82				82				82				82				82				82
TOTAL XXXXXX MINE							398				393				393				393				393				393				393				393				393				393

(A)		Includes VP General Manager not billable
(B)		Includes one Accountant not billable
(C)		Includes 1/2 Senior Xxxxxxx not billable

A-00

XXXXX XXXXXXXXXXXX XXXX XX.
XXXXXX XINE
P.X. Xxx 000
Xxxxxx, XX 00000

NRG Texas Power LLC		INVOICE NO: 2
P.O. Box
Princeton, NJ		INVOICE DATE:		February 1, 2008
Attn:

INVOICE, LSA Article 7.5

Period:     January 16 to 31, 2008

New LSA Art.				Item		Tons				Amount				$ per Ton
	7.2			Cost of Production			274,318.00			$	3,959,086.50			$	14.432
	7.3			Management Fee, per ton		$	[***]			$	[***]			$	[***]
	7.4a			Cost Incentive Adjustment						$	—			$	—
	7.4b			Inventory Adjustment						$	(1,249.65	)		$	(0.005	)
	7.4c			Heating Value Adjustment						$	(7,217.05	)		$	(0.026	)
				Total, Cost						$	[***]			$	[***]

               Credits

Please wire funds on or before February 16, 2008 as follows:

     BANK INFORMATION

A-13

Cost Incentive Adjustment (Annual)
LSA Section 7.4(a)(ii)
Bonus/Penalty Calculation
8-17-07 draft

		LSA Section
Item		Reference		Amount				Units
Calculation Input
Volume Delivered, Actual		7.4(a)(v)			6,550,000			tons
Mine Cost, Actual		7.2			[***]			$s
Volume Delivered, Approved Original Annual Operation Plan (AOP)		5.4			6,500,000			tons
Mine Cost, Approved Revised AOP		5.4 or 5.6			[***]			$s
Work Scope Adjustments, Net		7.4(a)(ii)			[***]			$s
Commodity Adjustments, Net		7.4(a)(iii)			[***]			$s
Fee Adjusted Basis (FAB) AOP		7.4(a)(ii)			[***]			$s
Penalty Calculation
Mine Cost as % of FAB AOP Cost		7.4(a)(v)			92.9	%		%
Penalty Threshold, Actual Mine Cost as % of FAB AOP		7.4(a)(v)			103.0	%		%
Penalty Applies?		7.4(a)(v)		no
Penalty Threshold		7.4(a)(v)		[***]				$s
Mine Cost Applicable to Penalty		7.4(a)(v)		[***]				$s
Delivered Volume		7.4(a)(v)		na				Tons
Mine Cost Applicable to Penalty per Delivered Ton		7.4(a)(v)		[***]				$s/Ton
One-Half of Applicable Mine Cost per Delivered Ton		7.4(a)(v)		[***]				$s/Ton
Penalty Limit per Delivered Ton		7.4(a)(v)		[***]				$s/Ton
Applicable Penalty per Delivered Ton		7.4(a)(v)		[***]				$s/Ton
Penalty		7.4(a)(v)			[***]			$s
Bonus Calculation
FAB AOP Cost as % of Mine Cost		7.4(a)(v)			107.6	%		%
Bonus Threshold, FAB AOP as % of Actual Mine Cost		7.4(a)(v)			103.0	%		%
Bonus Applies?		7.4(a)(v)		yes
Bonus Threshold		7.4(a)(v)			[***]			$s
Mine Cost Applicable to Bonus		7.4(a)(v)			[***]			$s
Applicable Volume		7.4(a)(v)(A)&(B)			6,500,00			0 Tons
Mine Cost Applicable to Bonus per Applicable Ton		7.4(a)(v)			[***]			$s/Ton
One-Half of Applicable Mine Cost per Applicable Ton		7.4(a)(v)			[***]			$s/Ton
Bonus Limit Per Applicable Ton		7.4(a)(v)			[***]			$s/Ton
Applicable Bonus per Applicable Ton		7.4(a)(v)			[***]			$s/Ton
Bonus		7.4(a)(v)			[***]			$s
Total, Bonus or Penalty
Bonus or (Penalty)		7.4(a)(vi)(4)			[***]			$s

EXHIBIT 5

List of Experts

A.      Accounting Expert

TBD

B.      Legal Expert

TBD

C.      Mining Expert

TBD

Exhibit 5 — Page 1

EXHIBIT 6

Surge Bin

[Exhibit 6 consists of a graphic depiction of the Surge Bin.]

Exhibit 6 — Page 1

EXHIBIT 7

Corporate Support Allowance

     Section 7.2(c) of the LSA provides for Mine Costs to include a Corporate Support Allowance as specified in this Exhibit 7. The Corporate Support Allowance amounts provided herein are the result of negotiations between the Parties and are not subject to audit or other justification.

     Corporate Support Allowance amounts shall be as provided in the table below. All figures shown in this table are expressed in 2008 constant dollars and shall be adjusted by the percent change in the GDP-IPD index from a Fourth Quarter 2007 base value as compared to the Fourth Quarter index value for the Year prior to the Year in which payment is made; provided, however, in no event shall the percentage change be less than zero. “GDP-IPD” shall mean the Gross Domestic Product Implicit Price Deflator index as first published as the advance number by the U.S. Department of Commerce, Bureau of Economic Analysis (base period of 2000 = 100). The percent change in GDP-IPD shall be rounded to the nearest third decimal point. The resulting inflation-adjusted amount shall be paid over twenty-four (24) equal installments during the Year and invoiced as provided under Section 7.6(a).

2008		Constant Dollars
2008			[***********]
2009			[***********]
2010			[***********]
2011			[***********]
2012			[***********]
2013			[***********]
2014			[***********]
2015			[*********]
2016			[*********]
2017			[*********]
2018			[*********]

     For example, where the following GDP-IPD index figures are hypothetical only:

Fourth Quarter 2007 First Published Index Value = 120
Xxxxxx Xxxxxxx 0011 First Published Index Value = 140
2012 Corporate Support Allowance in Constant 2008 Dollars = [***********]

Exhibit 7 — Page 1

Therefore, to calculate the 2012 adjusted Corporate Support Allowance amount:

( 140 / 121 ) = 1.157 * [**********] = [**********]
[**********] / 24 invoices per Year = [**********] per invoice

                               ***************

Notwithstanding the fact that the Corporate Support Allowance amounts above are not subject to audit or justification, the Corporate Support Allowance is intended to reflect the following areas and types of support provided to TWCC by its parent(s):

(i) general corporate management; (ii) corporate capital and financial management; (iii) human resources policy and management including management costs related to TWCC’s 401K plans; (iv) sales and marketing; (v) corporate insurance; (vi) corporate auditing and Xxxxxxxx-Xxxxx compliance, including periodic audits of TWCC, including as may be required by the applicable regulatory bodies; (vii) investor relations; (viii) corporate legal activities; (ix) corporate governance; (x) corporate development; (xi) corporate accounting; (xii) corporate government relations; (xiii) corporate-wide operations policy management; (xiv) corporate engineering; (xv) corporate IT systems and support; server and WAN maintenance and support, software maintenance, licensing or training (xvi) corporate records management; and (xvii) corporate travel and lodging.

The following items, whether incurred and paid directly by TWCC or satisfied by TWCC as a parent company charge, are agreed to be in addition to the Corporate Support Allowance and therefore considered Mine Costs under the relevant provisions of Section 7.2 of the LSA, so long as such costs are directly related to the business and operations of TWCC and approved by NRG in an annual AOP.

	1.		IT contract costs for SurvCad, AutoCad, Caterpillar Troubleshooting Software, Anti-virus, Spyware, and all software licensing; and, maintenance needs exclusive to TWCC.
	2.		IT training at TWCC for IT staff and for software set forth in 1. above.

Exhibit 7 — Page 2

EXHIBIT 8

Form of Invoice

See attached.

Exhibit 8 - Page 1

Exhibit 8

TEXAS XXXXXXXXXXXX COAL CO.
XXXXXX MINE
P. O. Xxx 000
Xxxxxx, XX 00000

NRG Texas Power LLC		INVOICE NO:
P. O. Box
Princeton, NJ		INVOICE DATE:		June 16, 2008
Attn:

INVOICE, LSA Section 7.6

Period: June 1 to 15, 2008

Agmnt Section		Item		Tons				Amount				$ per Ton
7.2		Cost of Production			280,000.00			$	4,000,000.00			$	14.286
7.3		Management Fee, per ton						$	[***]			$	[***]
7.4 a		Cost Incentive Adjustment						$	—			$	—
7.4.b		Inventory Adjustment *						$	(48,000.00	)		$	(0.171	)
7.4 c		Heating Value Adjustment **						$	(30,427.71	)		$	(0.109	)
		Total, Cost						$	[***]			$	[***]

*		Based on May’s fees and applicable ending inventory, pursuant to Section 7.4(b).
**		Based on fees and lignite heating values for deliveries made in the last half of the May, pursuant to Section 7.4(c).

Please wire funds on or before June 30, 2008 as follows:

BANK INFORMATION

7.4 Adjustments

7.4b Monthly Inventory Adjustment

		Prior Month
Annual Quantity (AOP tons)			6,650,000
Inventory Target (1/26th of Annual Quantity)			255,769
Actual Month-end Inventory (tons)			0
Inventory Shortfall (tons)			(255,769	)
Incremental Fee Adjustment Factor, 0.1% per 1.0%			0.001	%
Month-End Fee Adjustment Factor			(0.10000	)
Deliveries (tons)			400,000
Base Fee per Ton		$	[***]
Fee Per Ton Adjustment for Inventory		$	[***]
Fee Adjustment for Inventory		$	[***]

7.4 Adjustments
7.4 c Daily Heating Value Adjustment

May

																										Seven-
		Average								6000 Btu				5800 Btu				5800 &				5800 &				Day				Btus								Base								Rolling
		Daily								Fee per				Fee per				6000 Fee				6000 Btu				Weighted				Above or				Base Fee				Fee				Fee				Average,				Total, Base
Day of		Heat				Tons				Ton				Ton				per Ton				Fee				Average				(Below)				Adjustment,				per				Adjustment				Fee				Fee
Month		Content				Delivered				Adjustment				Adjustment				Adjustment				Adjustment				Btu				Deadband				%				Ton				per Ton				Adjustment				Adjustment
1			6500				18,000			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
2			6600				17,500			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
3			6700				16,800			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
4			6800				18,500			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
5			6900				17,500			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
6			7000				18,000			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
7			7100				17,500			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
8			7200				16,800			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
9			7100				18,500			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
10			7000				17,500			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
11			6900				18,000			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
12			6800				18,000			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
13			7100				18,000			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
14			6800				18,000			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
15			6700				18,000			na *				na *				na *				na *				na *				na *				na *				na *				na *				na *				na *
16			6500				17,000				—				—				—				—				6845				45				4.50				1.2000				0.0540				917.59				917.59
17			6400				17,000				—				—				—				—				6762				—				—				1.2000				0.0000				—				—
18			6300				17,000				—				—				—				—				6678				—				—				1.2000				0.0000				—				—
19			6200				17,000				—				—				—				—				6593				—				—				1.2000				0.0000				—				—
20			6100				17,000				—				—				—				—				6449				—				—				1.2000				0.0000				—				—
21			6000				17,000				—				—				—				—				6318				—				—				1.2000				0.0000				—				—
22			5700				17,550				(0.20	)			(0.20	)			(0.40	)			(7,020.00	)			6169				(31	)			(3.07	)			1.2000				(0.0369	)			(647.39	)			(7,667.39	)
23			5900				17,200				(0.20	)			—				(0.20	)			(3,440.00	)			6084				(116	)			(11.64	)			1.2000				(0.1396	)			(2,401.82	)			(5,841.82	)
24			6000				17,500				—				—				—				—				6027				(173	)			(17.33	)			1.2000				(0.2079	)			(3,638.54	)			(3,638.54	)
25			6100				17,230				—				—				—				—				5999				(201	)			(20.13	)			1.2000				(0.2416	)			(4,163.00	)			(4,163.00	)
26			6200				17,000				—				—				—				—				5999				(201	)			(20.13	)			1.2000				(0.2416	)			(4,107.43	)			(4,107.43	)
27			6300				17,000				—				—				—				—				6027				(173	)			(17.31	)			1.2000				(0.2077	)			(3,531.73	)			(3,531.73	)
28			6400				17,000				—				—				—				—				6083				(117	)			(11.67	)			1.2000				(0.1400	)			(2,380.34	)			(2,380.34	)
29			6500				17,320				—				—				—				—				6199				(1	)			(0.07	)			1.2000				(0.0009	)			(15.04	)			(15.04	)
30			6600				17,000				—				—				—				—				6299				—				—				1.2000				0.0000				—				—
31			6700				17,518				—				—				—				—				6401				—				—				1.2000								—				—
Total							540,918															$	(10,480.00	)																						$	(19,967.71	)		$	(30,427.71	)

* The heating value adjustment, if any, for the first half of May was addressed in the prior (June 1) invoice for lignite delivered in the last half of May.

EXHIBIT 9

Post Execution Savings Actions

Section 7.3 provides that the Management Fee shall be (a) [****] per Ton escalated annually, or (b) a lower amount escalated annually, as provided in this Exhibit 9. Specifically, in the negotiation of the Management Fee, NRG agreed to increase its offer of [****] per Ton by an additional [****] per Ton based upon certain Mine Cost savings presented by TWCC. The Parties acknowledge that certain of these cost savings can be demonstrated to NRG by TWCC through Post-Execution Savings Actions, while other savings are derived from cost projection assumptions (“Projection Assumptions”) that NRG agrees to accept without further recourse upon execution of this LSA, notwithstanding the adjustments provided under Section 7.4.

The Mine Cost savings categories are provided below along with their respective portions of the total [****] per Ton. The initial Management Fee shall be [****] per Ton. TWCC shall demonstrate to NRG that TWCC, no later than March 31, 2008, has taken the actions necessary to implement the Post-Execution Savings Actions. If TWCC fails to make such demonstration by the stated time, the base Management Fee shall be decreased thereafter until such time that the demonstration is made, notwithstanding the adjustments provided under Section 7.4, by the corresponding value of each category. For example, if TWCC fails to demonstrate to NRG that Equipment Recapitalization action has been taken by March 31, 2008, the Management Fee shall decrease by [****] per Ton to [****].

Post-Execution Savings Actions:		%				$/Ton
1.   Equipment Recapitalization			[***]				[****]
2.   Retirement NRG Equipment			[***]				[****]
3.   Organization Restructure			[***]				[****]
4.   Capital Project Outside Services (Contractors) Reduced			[***]				[****]
Total Post-Execution Savings Actions [*******] per Ton:			[***]				[****]
Projection Assumptions:
5.   Inventory Management and Best Available Technology			[***]				[****]
6.   Bond Release			[***]				[****]
7.   Workers Compensation and Insurance Premium Reduction			[***]				[****]
Total Projection Assumptions [*******] per Ton:			[***]				[****]
TOTAL MINE COST SAVINGS			[***]				[****]

Exhibit 9 — Page 1

The following describes each Mine Cost savings category, along with the actions required by TWCC to demonstrate implementation to NRG.

Post-Execution Savings Actions:

	1.		Equipment Recapitalization: TWCC shall lease or otherwise provide (16) sixteen mining units, including: (7) D-10T dozers; (3) D-9T dozers; (2) two D-6LGP dozers; and (4) 100-Ton end dumps, or the equivalents thereof. The equipment leased or otherwise provided will be of a condition consistent with the equipment that was included and assumed in development of the preliminary 2008 AOP.
			Demonstration Action: Provide copies of executed lease documents to NRG, and provide written notice to NRG that the units are deployed at the Xxxxxx Mine.
	2.		Retirement of NRG Equipment: Cost savings on an net present value basis, shall be recognized for sale of 18 retired NRG mining units, replaced by units detailed in paragraph 1 “Equipment Recapitalization” as mentioned above.
			Demonstration Action: Provide copies of executed lease documents for equipment under 1. above to NRG and schedule for equipment retirement, and provide written notice to NRG that the NRG equipment has been retired.
	3.		Organization Restructure: TWCC salaried staff shall be reorganized on or before January 1, 2008, such that TWCC salaried staffing level shall equal (72) seventy-two. This staffing level does not include Xxxxxxxxxxxx Mining LLC employees, of which a portion of their time is allocated to TWCC.
			Demonstration Action: Eliminate 6 salaried staffing positions and have salaried staffing organization chart detailing seventy-two (72) positions as of January 1, 2008.
	4.		Capital Project Outside Services: TWCC shall perform work activities previously scheduled for contractors, resulting in savings as shown in 2008 AOP.
			Demonstration Action: 2008 Preliminary AOP to identify work activities to be performed by TWCC as previously scheduled to be performed by contractors. Provide letter, duly executed by the President of TWCC, stating that TWCC will not hire contractors to perform the work identified.

Savings Assumptions (No Demonstration Actions Required):

	5.		Inventory Management and Best Available Technology (“BAT”): TWCC shall use Prudent Mining Practices and reasonable commercial efforts to maintain lignite inventory per Sections 7.4(b) and 8.3 (b) and shall use best available technologies such as SurvCadd, dozer GPS guidance systems, and dragline line production monitors, to improve certain mining costs by [***].
	6.		Bond Release: TWCC shall make reasonable commercial efforts to obtain bond release as projected in the 2008 Preliminary AOP, and in subsequent AOP’s.

Exhibit 9 — Page 2

7. Workers Compensation and Insurance. Cost savings related to actual rates experienced and projected savings beginning in 2008. The savings are related to a lower premium modifier, relative to worker compensation and insurance claims.

Exhibit 9 — Page 3

EXHIBIT 10
Typical Lignite Quality and Characteristics

A. Proximate Analysis (Gross, As-received Basis):

Parameter		Units				Ranges				Typical
Heat Content		Btu/lb.					5600 - 7200				6500
Total Sulfur		% by weight					0.4 - 2.2				1.1
Ash		% by weight					12.0 - 25.0				16.5
Total Moisture		% by weight					28.0 - 36.0				31.7
Volatile Matter		% by weight					22.0 - 32.0				26.8
Fixed Carbon		% by weight					20.0 - 30.0				25.0

B. Ultimate Analysis (Gross, As-received Basis):

Parameter		Units				Ranges				Typical
Total Moisture		% by weight					28.0 - 36.0				31.7
Carbon		% by weight					33.0 - 42.0				38.2
Hydrogen		% by weight					1.5 - 3.2				2.6
Nitrogen		% by weight					0.4 - 1.0				0.6
Sulfur		% by weight					0.4 - 2.2				1.1
Ash		% by weight					12.0 - 25.0				16.5
Chlorine		% by weight					0.01 - 0.04				0.02
Oxygen (by diff.)		% by weight					5.0 - 13.0				9.5

Exhibit 10 — Page 1

C. Reporting Basis: Mineral Analysis of Ash (% by weight)

Parameter		Ranges				Typical
Silica (SiO2)			40.0 - 65.0				52.0
Alumina (Al2O3)			12.0 - 20.0				16.0
Titania (TiO2)			0.6 - 1.8				1.1
Ferric Oxide (Fe2O3)			5.0 - 18.0				7.8
Calcium (CaO)			7.0 - 20.0				9.5
Magnesium (MgO)			1.0 - 4.0				2.0
Sodium (Na2O)			0 - 1.0				0.3
Potassium (K2O)			0 - 1.5				1.0
Phosphorous (P2O5)			0 - 1.0				0.3
Magnesia (Mn3O4)			0 - 1.0				0.2
Sulfate (SO3)			5.0 - 18.0				8.2
Undetermined			0 - 4.0				1.6

		Range				Typical
X. Xxxxxxxxx Grindability Index			50 - 75				65
E. Size Analysis: 6” X 0”

Parameter		Minimum				Maximum
1. Coal Size Range (mm)			0				254
2. Coal Less than 1/4 inch (wt.%)			10				30

X. Xxx Fusion Temperatures — Reducing Atmosphere (Degrees, Fahrenheit):

Parameter		Ranges				Typical
Initial Deformation			1970 - 2550				2133
Softening			2030 - 2600				2195
Hemispherical			2060 - 2650				2247

X. Xxx Fusion Temperatures — Oxidizing Atmosphere (Degrees, Fahrenheit):

Parameter		Ranges				Typical
Initial Deformation			2080 - 2600				2230
Softening			2150 - 2650				2300
Hemispherical			2180 - 2700				2350

Exhibit 10 — Page 2

EXHIBIT 11

Insurance Requirements

(a) TWCC shall maintain insurance written in the kinds and minimum limits of liability specified below:

	1.	Workers’ Compensation (WC) -		Statutory, including temporary and leased workers.
		Employer’s Liability (EL) -		$1,000,000
	2.	Commercial General Liability (GL) -		$1,000,000 per occurrence for Bodily Injury, Property Damage, Personal Injury, including death; $2,000,000 Aggregate
	Inclusions: Contractual Liability (to include hold harmless coverage specified elsewhere in this Agreement); Broad Form Property; Independent Contractors; Premises & Operations, Products & Completed Operations, No exclusion for X.C. & U.
	3.	Automobile Liability (AL) -		$1,000,000 Combined Single Limit, including coverage for owned, non-owned and hired vehicles.
	Inclusions: Either GL or AL Policy must provide liability coverage that extends coverage for mobile equipment.
	4.	Excess Liability (Umbrella) -		$25,000,000 coverage that will respond excess of the underlying EL, GL, and AL policies on a following form basis.

(b) NRG, its parent company, subsidiaries and affiliates, as well as each of their respective officers, directors, managers, members and employees shall be included as Additional Insured’s on TWCC’s GL, AL, and Umbrella policies for injury or damage arising out of, resulting from, or in connection with TWCC’s performance of this Agreement and/or the terms and conditions of this LSA. The Additional Insured status noted in this Section shall be specifically endorsed to TWCC’s Policies, and with respect to the General Liability Policy shall be as broad as that provided by the ISO CG 20 10 11 85 endorsement form. The insurance provided by TWCC shall be primary, without right of contribution, with respect to any similar insurance maintained by NRG. Waiver of Subrogation shall be provided pursuant to this written contract for all

Exhibit 11 — Page 1

Insureds and Additional Insureds with respect to each of the coverages noted in subsection (a) of this Section.

(c) Provided NRG annually provides TWCC with a schedule of all NRG Property in the care, custody and control of TWCC, including the replacement value of all such property, TWCC shall maintain All Risk Property insurance at the replacement cost listed on the schedule to cover all risks of direct physical loss or damage to such NRG’s Property. Said coverage to include, but not be limited to Flood, Windstorm, Earth Movement, Boiler & Machinery Breakdown, Extra Expense, Time Element, Mobile Equipment, Debris Removal, Off-site Storage, Transit, subject to the terms and conditions and the form exclusions contained in the policy. The policy shall have no exclusions related to explosion, collapse, subsidence or underground/subsurface perils or any other perils that are standard to mining operations. NRG shall be included on TWCC’s All Risk Property insurance policy as a Loss Payee, as its interest may appear. TWCC shall be responsible for any deductibles. Deductibles shall not exceed $1,000,000 per occurrence.

Exhibit 11 — Page 2

EXHIBIT 12

[Intentionally Omitted]

Exhibit 12 — Page 1

EXHIBIT 13

Form of Monthly Report Production Summary

See attached.

Exhibit 13 — Page 1

Exhibit 13

JEWETT
SUMMARY
July, 2007

Safety
Lost Time Incidents			0
Days Since Last LTA			1,019
Hours Since Last LTA			2,146,042

		MONTH																YEAR TO DATE
COAL		Actual				Budget				Variance				%				Actual				Budget				Variance				%
Tons Sold			523,802				560,383				-36,581				-6.5	%			3,901,040				3,906,601				-5,570				-0.1	%
Tons Uncovered			482,420				469,000				13,420				2.9	%			3,802,697				4,146,000				-343,303				-8.3	%
BOM Inventory
Pit			78,100				387,201				-309,101				-79.8	%			78,100				387,201				-309,101				-79.8	%
Stockpile			20,445				165,943				-145,498				-87.7	%			20,445				165,943				-145,498				-87.7	%
Total			98,545				553,144				-454,599				-82.2	%			98,545				553,144				-454,599				-82.2	%
EOM Inventory
Pit			43,000				323,233				-280,233				-86.7	%			43,000				323,233				-280,233				-86.7	%
Stockpile			14,163				138,528				-124,365				-89.8	%			14,163				138,528				-124,365				-89.8	%
Total			57,163				461,761				-404,598				-87.6	%			57,163				461,761				-404,598				-87.6	%
Tons Produced			517,520				469,000				48,520				10.3	%			3,894,758				4,146,000				-251.242				-6.1	%
Insitu Tons Mined			623,587				505,000				118,587				23.5	%			4,288,553				4,472,000				-183,447				-4.1	%
Recovery			83.0	%			92.9	%			-9.9	%			-10.6	%			90.8	%			92.7	%			-1.9	%			-2.0	%
Quality/BTU			6.619				6,658				39				0.6	%			6,600				6,636				36				0.5	%
OVERBURDEN/INTERBURDEN
Overburden (BCY)			3,342,800				3,768,639				-425,839				-11.3	%			26,319,907				25,978,389				341,518				1.3	%
Interburden (BCY)			1,351,700				1,603,361				-251,661				-15.7	%			10,674,293				12,614,704				-1,940,411				-15.4	%
Total Bank Cubic Yards			4,694,500				5,372,000				-677,500				-12.6	%			36,994,200				38,593,093				-1,598,893				-4.1	%
Rehandled Overburden (CY)			1,429,650				0				1,429,650			#DIV/0!					8,822,244				7,938,769				883,475				11.1	%
Total Moved (CY)			6,124,150				5,372,000				752,150				14.0	%			45,816,444				46,531,862				-715,418				-1.5	%
Virgin Ratio			9.7				11.5				-1.7				-15.0	%			9.7				9.3				0.4				4.5	%
Effective Ratio			12.7				11.5				1.2				10.8	%			12.0				11.2				0.8				7.4	%
RECLAMATION
Acres Disturbed			46.0				24.0				22.0				91.7	%			323.30				236.0				87.0				36.9	%
Acres Graded			0.0				50.0				-50.0				-100.0	%			117.1				350.0				-232.9				-66.5	%
Acres Topsoil/SPGM			19.5				34.2				-14.7				-43.0	%			237.2				313.4				-76.2				-24.3	%
TS/SPGM Stripped Cu. Yds.
To Stockpile			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Direct Place			141,570				248,292				-106,722				-43.0	%			1,722,072				2,275,284				-553,212				-24.3	%
TS/SPGM From Xxxxxxxxx			0				0				0			#XXX/0!					0				0				0			#XXX/0!
TOTAL			141,570				248,292				-106,722				-43.0	%			1,722,072				2,275,284				-553,212				-24.3	%

JEWETT
COAL PRODUCTION
July, 2007

		MONTH																YEAR TO DATE
		Actual				Budget				Variance				%				Actual				Budget				Variance				%
AREA B
Tons Sold			93,363				156,525				-63,162				-40.4	%			845,737				892,715				-48,978				-5.3	%
Tons Uncovered			94.246				131,000				-36,754				-28.1	%			837,308				923,000				-85,692				-9.3	%
BOM Pit Inventory			0				108,152				-108,152				-100.0	%			0				108,152				-108,152				-100.0	%
EOM Pit Inventory			4,500				90,285				-85,785				-95.0	%			4,500				90,285				-85,785				-95.0	%
Tons Produced			89.746				131,000				-41,254				-31.5	%			839,825				923,000				-83,175				-9.0	%
Insitu Tons Mined			103,209				138,000				-34,791				-25.2	%			905,335				971,000				-65,665				-6.8	%
Recovery			87.0	%			94.9	%			-8.0	%			-8.4	%			92.8	%			95.1	%			-2.3	%			-2.4	%
AREA F NORTH
Tons Sold			128,636				144,576				-15,940				-11.0	%			886,240				860,842				25,393				3.0	%
Tons Uncovered			100.844				121,000				-20,156				-16.7	%			812,631				895,000				-82,469				-9.2	%
BOM Pit Inventory			31,100				99,896				-68,796				-68.9	%			31,100				99,896				-68,796				-68.9	%
EOM Pit Inventory			2,000				83,393				-81,393				-97.6	%			2,000				83,393				-81,393				-97.6	%
Tons Produced			129,944				121,000				8,944				7.4	%			558,274				895,000				-26,726				-3.0	%
Insitu Tons Mined			158,261				132,000				26,261				19.9	%			1,038,425				977,000				61,425				6.3	%
Recovery			82.1	%			91.7	%			-9.6	%			-10.4	%			83.6	%			91.6	%			-8.0	%			-8.7	%
AREA F SOUTH
Tons Sold			166,164				259,282				-93,118				-35.9	%			1,231,751				1,703,768				-472.017				-27.7	%
Tons Uncovered			152,419				217,000				-64,581				-29.8	%			1,266,232				1,782,000				-515,768				-28.9	%
BOM Pit Inventory			37,800				179,153				-141,353				-78.9	%			37,800				179,153				-141,353				-78.9	%
EOM Pit Inventory			30,100				149,555				-119,455				-79.9	%			30,100				149,555				-119,455				-79.9	%
Tons Produced			160,119				217,000				-56,881				-26.2	%			1,235,090				1,782,000				-546,091				-30.6	%
Insitu Tons Mined			196,283				235,000				-38,717				-16.5	%			1,334,455				1,930,000				-595,545				-30.9	%
Recovery			81.6	%			92.3	%			-10.8	%			-11.7	%			92.6	%			92.3	%			0.3	%			0.3	%
AREA E
Tons Sold			135,639				0				135,639			#DIV/0!					934,324				449,285				485,039				108.0	%
Tons Uncovered			134,911				0				134,911			#DIV/0!					886,626				546,000				340,626				62.4	%
BOM Pit Inventory			9,200				0				9,200			#DIV/0!					9,200				0				9,200			#DIV/0!
EOM Pit Inventory			6,400				0				6,400			#DIV/0!					6,400				0				6,400			#DIV/0!
Tons Produced			137,711				0				137,711			#DIV/0!					926,852				546,000				380,852				69.8	%
Insitu Tons Mined			165,834				0				165,834			#DIV/0!					1,010,338				594,000				416,338				70.1	%
Recovery			83.0	%		#DIV/0!				#DIV/0!				#DIV/0!					91.7	%			91.9	%			-0.2	%			-0.2	%
TOTAL
Tons Sold			523,802				560,383				-36,581				-6.5	%			3,901,040				3,906,610				-5,570				-0.1	%
Tons Uncovered			482,420				469,000				13,420				2.9	%			3,802,697				4,146,000				-343,303				-8.3	%
BOM Pit Inventory			78,100				387,201				-309,101				-79.8	%			78,100				387,201				-309,101				-79.8	%
EOM Pit Inventory			43,000				323,233				-280,233				-86.7	%			43,000				323,233				-280,233				-86.7	%
BOM Stock Inventory			20.445				165,943				-145,498				-87.7	%			20,445				165,943				-145,498				-87.7	%
EOM Stock Inventory			14,163				138,528				-124,365				-89.8	%			14,163				138,528				-124,365				-89.8	%
Tons Produced			517,520				469,000				48,520				10.3	%			3,894,758				4,146,000				-251,242				-6.1	%
Insitu Tons Mined			623,587				505,000				118,587				23.5	%			4,288,553				4,472,000				-183,447				-4.1	%
Recovery			83.0	%			92.9	%			-9.9	%			-10.6	%			90.8	%			92.7	%			-1.9	%			-2.0	%

JEWETT
OVERBURDEN
July, 2007

		MONTH																YEAR TO DATE
		Actual				Budget				Variance				%				Actual				Budget				Variance				%
AREA B
DL 25 8200
Overburden (BCY)			814,000				1,605,000				-791,000				-49.3	%			10,208,400				10,975,000				-766.600				-7.0	%
Interburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Bank Cubic Yards			814,000				1,605,000				-791,000				-49.3	%			10,208,400				10,978,000				-766,600				-7.0	%
Rehandled Overburden (CY)			470,950				0				470,950			#DIV/0!					2,566,645				1,79B,140				768,505				42.7	%
Total Overburden Moved (CY)			1,284,950				1,605,000				-320,050				-19.9	%			12,775,045				12,773,140				1,905				0.0	%
EXCAVATOR/TRUCKS
Overburden (BCY)			0				258,000				-258,000				-100.0	%			1,058,300				1,614.000				-555,700				-34.4	%
Interburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Bank Cubic Yards			0				258,000				-258,000				-100.0	%			1,058,300				1,614,000				-555,700				-34.4	%
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Overburden Moved (CY)			0				258,000				-258,000				-100.0	%			1,058,300				1,614,000				-555,700				-34.4	%
TRACTORS
Overburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Interburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Bank Cubic Yards			0				0				0			#DIV/0l					0				0				0			#DIV/0!
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Overburden Moved (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
TOTAL AREA B
Overburden (BCY)			814,000				1,863,000				-1,049,000				-56.3	%			11,266,700				12,589,000				-1,322,300				-10.5	%
Interburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Bank Cubic Yards			814,000				1,863,000				-1,049,000				-56.3	%			11,266,700				12,589,000				-1,322,300				-10.5	%
Rehandled Overburden (CY)			470,950				0				470,950			#DIV/0!					2,566,645				1,798,140				768,505				42.7	%
TOTAL			1,284,950				1,863,000				-578,050				-31.0	%			13,833,345				14,387,140				-553,795				-3.8	%
AREA X XXXXX
XX 00 0000
Xxxxxxxxxx (BCY)			533.600				828,240				-294,640				-35,6	%			3,765,559				5,664,060				-1,898,501				-33.5	%
Interburden (BCY)			361,500				795,760				-434,260				-54.6	%			3,478,341				5,441,940				-1,963,599				-36.1	%
Total Bank Cubic Yards			895,100				1,624,000				-728,900				-44.9	%			7,243,900				11,106,000				-3,862,100				-34.8	%
Rehandled Overburden (CY)			155,000				0				155,000			#DIV/0!					2,689,150				3,955,500				-1,266,350				-32.0	%
Total Overburden Moved (CY) 8200			1,050,100				1,624,000				-573,900				-35.3	%			9,933,050				15,061,500				-5.128,450				-34.1	%
EXCAVATOR/TRUCKS
Overburden (BCY)			0				77,755				-77,755				-100.0	%			547,800				218,939				328,861				150.2	%
Interburden (BCY)			44,400				24,245				20,155				83.1	%			44,400				171,524				-127,124				-74.1	%
Total Bank Cubic Yards			44,400				102,000				-57,600				-56.5	%			592,200				390,463				201,737				51.7	%
Rehandled Overburden (CY)			0				.0				0			#DIV/0!					0				0				0			#DIV/0l
Total Overburden Moved (CY)			44,400				102,000				-57,600				-56.5	%			592,200				390,463				201,737				51.7	%
TRACTORS
Overburden (BCY)			0				0				0			#DIV/0!					205,200				0				205,200			#DIV/0!
Interburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Bank Cubic Yards			0				0				0			#DIV/0!					205,200				0				205.200			#DIV/0!
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0l
Total Overburden Moved (CY)			0				0				0			#DIV/0!					205,200				0				205,200			#DIV/0!
TOTAL AREA F NORTH
Overburden (BCY)			0				0				0			#DIV/0!					4,518,559				5,882,999				-1,364,440				-23.2	%
Interburden (BCY)			0				0				0			#DIV/0!					3,522,741				5,613,464				-2,090,723				-37.2	%
Total Bank Cubic Yards			0				0				0			#DIV/0!					8,041,300				11,496,463				-3,455,163				-30.1	%
Rehandled Overburden (CY)			155,000				0				155,000			#DIV/0!					2,689,150				3,955.500				-1,266,350				-32.0	%
TOTAL			155,000				0				155,000			#DIV/0!					10,730,450				15,451,963				-4,721,513				-30.6	%

XXXXXX
OVERBURDEN
July, 2007

		MONTH																YEAR TO DATE
		Actual				Budget				Variance				%				Actual				Budget				Variance				%
AREA F SOUTH
DL 25 8200
Overburden (BCY)			1,027,200				876,960				150,240				17.1	%			4,663,168				5,184,774				-521,606				-10.1	%
Interburden (BCY)			359,600				747,040				-387,440				-51,9	%			3,283,332				4,416,660				-1,133,328				-25.7	%
Total Bank Cubic Yards			1,386,800				1,624,000				-237,200				-14,6	%			7,946,500				9,601,434				-1,654,934				-17.2	%
Rehandled Overburden (CY)			346,700				0				346,700			#DIV/0!					2,098,375				1,601,609				496,766				31.0	%
Total Overburden Moved			1,733,500				1,624,000				109,500				6.7	%			10,044,875				11,203,043				-1,158,168				-10.3	%
(CY) 8200
EXCAVATOR/TRUCKS
Overburden (BCY)			173,100				122,684				50,416				41.1	%			1,179,000				369,696				810,204				219.2	%
Interburden (BCY)			32,500				36,316				-3,816				-10.5	%			32,500				206,500				-174,000				-84.3	%
Total Bank Cubic Yards			205,600				159,000				46,600				29.3	%			1,212,400				576,196				636,204				110.4	%
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Overburden Moved (CY)			205,600				159,000				46,600				29.3	%			1,212,400				576,196				636,204				110.4	%
TRACTORS
Overburden (BCY)			125,000				0				125,000			#DIV/0!					566,900				0				566,900			#DIV/0!
Interburden {BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Bank Cubic Yards			125,000				0				125,000			#DIV/0!					566,900				0				566,900			#DIV/0!
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Overburden Moved (CY)			125,000				0				125,000			#DIV/0!					566,900				0				566,900			#DIV/0!
TOTAL AREA F SOUTH
Overburden (BCY)			1,325,300				999,644				325,656				32.6	%			6,409,988				5,554,470				855,498				15.4	%
Interburden (BCY)			392,100				783,356				-391,256				-49.9	%			3,315,832				4,623,160				-1,307,328				-28.3	%
Total Bank Cubic Yards			1,717,400				1,783,000				-65,600				-3.7	%			9,725,800				10,177,630				-451,830				-4.4	%
Rehandled Overburden (CY)			346,700				0				346,700			#DIV/0!					2,098,375				1,601,609				496,766				31.0	%
TOTAL			2,064,100				1,783,000				281,100				15.8	%			11,824,175				11,779,239				44,936				0.4	%
AREA E
DL 28 8750
Overburden (BCY)			559,000				0				559,000			#DIV/0!					3,195,180				1,833,920				1,361,260				74.2	%
Interburden (BCY)			527,200				0				527,200			#DIV/0!					3,793,520				2,334,080				1,464,440				62.7	%
Total Bank Cubic Yards			1,086,200				0				1,086,200			#DIV/0!					6,993,700				4,168,000				2,825,700				67.8	%
Rehandled Overburden (CY)			457,000								457,000			#DIV/0!					1,468,074				583,520				884,554				151.6	%
Total Overburden Moved (CY)			1,543,200				0				1,543,200			#DIV/0!					8,461,774				4,751,520				3,710,254				78.1	%
EXCAVATOR/TRUCKS
Overburden (BCY)			110,900				0				110,900			#DIV/0!					574-,00				0 0				574,000			#DIV/0!
Interburden (BCY)			26,500				0				26,500			#DIV/0!					37,200				44,000				-6,800				-15.5	%
Total Bank Cubic Yards			137,400				0				137,400			#DIV/0!					611,200				44,000				567,200				1289.1	%
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Overburden Moved (CY)			137,400				0				137,400			#DIV/0!					611,200				44,000				567,200				1289.1	%
BWE/TRUCKS
Overburden (BCY)			0				0				0			#DIV/0!					355,500				118,000				237,500				201.3	%
Interburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Bank Cubic Yards			0				0				0			#DIV/0!					355,500				118,000				237,500				201.3	%
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Overburden Moved (CY)			0				0				0			#DIV/0!					355,500				118,000				237,500				201.3	%
TRACTORS
Overburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Interburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Bank Cubic Yards			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Overburden Moved (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
TOTAL AREA E
Overburden (BCY)			669,900				0				669,900			#DIV/0!					4,124,680				1,951,920				2,172,760				111.3	%
Interburden (BCY)			553,700				0				553,700			#DIV/0!					3,835,720				2,378,060				1,457.640				61.3	%
Total Bank Cubic Yards			1,223,600				0				1,223,600			#DIV/0!					7,960,400				4,330,000				3,630,400				83.8	%
Rehandled Overburden (CY)			457,000				0				457,000			#DIV/0!					1,468,074				583,520				884,554				151.6	%
TOTAL			1,680,600				0				1,680,600			#DIV/0!					9,426,474				4,913,520				4,514,954				91.9	%

XXXXXX
OVERBURDEN
July, 2007

		MONTH																YEAR TO DATE
		Actual				Budget				Variance				%				Actual				Budget				Variance				%
TOTAL DRAGLINES
Overburden (BCY)			2,933,800				3,310,200				-376,400				-11.4	%			21,832,307				23,657,754				-1,825,447				-7.7	%
Interburden (BCY)			1,248,300				1,542,800				-294,500				-19.1	%			10,560,193				12,192,680				-1,632,487				-13.4	%
Total Bank Cubic Yards			4,182,100				4,853,000				-670,900				-13.8	%			32,392,500				35,850,434				-3,457,934				-9.6	%
Rehandled Overburden (CY)			1,429,650				0				1,429,650			#DIV/0!					8,822,244				7,938,769				883,475				11.1	%
TOTAL			5,611,750				4,853,000				758,750				15,6	%			41,214,744				43,789,203				-2,574,459				-5.9	%
TOTAL
EXCAVATOR/TRUCKS
Overburden (BCY)			284,000				458,438				-174,439				-38.1	%			3,360,000				2,202,635				1,157,365				52.5	%
Interburden (BCY)			103,400				60,561				42,839				70.7	%			114,100				422,024				-307,924				-73.0	%
Total Bank Cubic Yards			387,400				519,000				-131,600				-25.4	%			3,474,100				2,624,659				849,441				32.4	%
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
TOTAL			387,400				519,000				-131,600				-25.4	%			3,474,100				2,624,659				849,441				32.4	%
BWE/TRUCKS
Overburden (BCY)			0				0				0			#DIV/0!					355,500				118,000				237,500				201.3	%
Interburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Bank Cubic Yards			0				0				0			#DIV/0!					355,500				118,000				237,500				201.3	%
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
TOTAL			0				0				0			#DIV/0!					355,500				118,000				237,500				201.3	%
TOTAL TRACTORS
Overburden (BCY)			125,000				0				125,000			#DIV/0!					772,100				0				772,100			#DIV/0!
Interburden (BCY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
Total Bank Cubic Yards			125,000				0				125,000			#DIV/0!					772,100				0				772,100			#DIV/0!
Rehandled Overburden (CY)			0				0				0			#DIV/0!					0				0				0			#DIV/0!
TOTAL			125,000				0				125,000			#DIV/0!					772,100				0				772,100			#DIV/0!
TOTAL
Overburden (BCY)			3,342,800				3,768,639				-425,839				-11.3	%			26,319,907				25,978,389				341,518				1.3	%
Interburden (BCY)			1,351,700				1,603,361				-251,661				-15.7	%			10,674,293				12,614,704				-1,940,411				-15.4	%
Total Bank Cubic Yards			4,694,500				5,372,000				-677,500				-12,6	%			36,994,200				38,593,093				-1,598,893				-4.1	%
Rehandled Overburden (CY)			1,429,650				0				1,429,650			#DIV/0!					8,822,244				7,936,769				883,475				11.1	%
TOTAL			6,124,150				5,372,000				752,150				14.0	%			45,816,444				45,531,862				-715,418				-1.5	%
Virgin Ratio			9.7				11.5				-1.7				-15.0	%			9.7				9.3				0.4				4.5	%
Effective Ratio			12.7				11.5				1.2				10.8	%			12.0				11.2				0.8				7.4	%

XXXXXX
PRODUCTIVITY
July, 2007
PRODUCTIVITY

		MONTH																YEAR TO DATE
		Actual				Budget				Variance				%				Actual				Budget				Variance				%
Man-hours
Craft			49,306.0				50,930.0				-1,624.0				-3.2	%			347,632				348,295				-663.0				(0.002	)
Contractor			18,374.0				—				18,374.0			#DIV/0!					143,341				—				143,341.0			#DIV/0!
Salaried			12,062.0				12,729.0				-667.0				-5.2	%			87,062				87,047				15.0				0.000
Total			79742.0				63659.0				16083.0				25.3	%			576,035				435,342				142693.0				0.328
Tons Sold/Craft M-hour			7.74				11.00				-3.26				-29.7	%			7.95				11.22				-3.27				(0.292	)
Tons Produced/Craft M-Hour			7.13				9.21				-2.08				-22.6	%			7.75				11.90				-4.16				(0.349	)
OVERBURDEN/INTERBURDEN
DL 25 8200
BCY/OP HR			1,293				2,538				(1,245.1	)			-49.1	%			2,326				2,574				(248.1	)			(0.096	)
CY/OP HR Include Rehandle			2,041				2,538				(497.1	)			-19.6	%			2,911				2,995.8				(85.0	)			(0.028	)
DL 26 8200
BCY/OP HR			1,401				2,568				(1,167.0	)			-45.4	%			2,330				2,605				(274.8	)			(0.106	)
CY/OP HR Include Rehandle			1,644				2,568				(924.4	)			-36.0	%			2,636				3,532.6				(896.8	)			(0.254	)
DL 27 8200
BCY/OP HR			2,022				2,595				(573.2	)			-22.1	%			1,836				2,255				(419.4	)			(0.186	)
CY/OP HR Include Rehandle			2,527				2,595				(67.8	)			-2.6	%			2,321				2,631.7				(310.8	)			(0.118	)
DL 28 8750
BCY/OP HR			1,762			#DIV/0!				#DIV/0!				#DIV/0!					2,126				2,729				(602.7	)			(0.221	)
CY/OP HR Include Rehandle			2,503			#DIV/0!				#DIV/0!				#DIV/0!					2,573				3,111.2				(538.4	)			(0.173	)
Excavator OB-IB
BCY/OP HR			489.1				702.2				(213.1	)			-30.3	%			278.3				356.2				(77.9	)			(0.219	)
CY/OP HR include Rehandle			489.1				702.2				(213.1	)			-30.3	%			278.3				356.2				(77.9	)			(0.219	)
BWE OB-IB
BCY/OP HR		#DIV/0!				#DIV/0!				#DIV/0!				#DIV/0!					669.4				106.5				562.9				5.285
CY/OP HR Include Rehandle		#DIV/0!				#DIV/0!				#DIV/0!				#DIV/0!					669.4				106.5				562.9				5.285
Tractors
			93.3			#DIV/0!				#DIV/0!				#DIV/0!				#DIV/0!				#DIV/0!				#DIV/0!				#DIV/0!
			93.3			#DIV/0!				#DIV/0!				#DIV/0!				#DIV/0!				#DIV/0!				#DIV/0!				#DIV/0!
COAL
Excavator
Tons Loaded/OP HR			353				357				(3.6	)			-1.0	%			2,659				414				2,244.2				5,416

EXHIBIT 14

Form of Monthly Costs Report

See attached.

Exhibit 14 — Page 1

Exhibit 14

Texas Xxxxxxxxxxxx Coal Co.
Budget Variance Report Detail
For the Month of
March 2007

Current Month																		Year To Date
Actual				Budget				Variance								Description		Actual				Budget				Variance
																TONS
																Lignite:
	187.7				288.1				(100.4	)			-34.8	%		TWCC Tons			864.4				1,062.4				(198.0	)			-18.6	%
	349.8				268.0				81.8				30.5	%		NRG Tons			839.9				605.0				228.9				37.8	%
	537.5				556.1				(18.6	)			-3.3	%		Total Tons — Lignite			1,698.4				1,667.4				31.0				1.9	%
																Stripping BCY
	3,817.6				4,858.0				(1,035.4	)			-21.3	%		8200 Dragline			11,383.9				13,872.0				(2,488.1	)			-17.9	%
	835.5				396.0				439.5				111.0	%		8750 Dragline			2,797.9				1,8829.0				968.9				53.0	%
	761.5				626.0				135.5				21.6	%		Mobile			2,114.0				2,168.0				(54.0	)			-2.5	%
	5,414.6				5,875.0				(460.4	)			-7.8	%		Total Bank Cubic Yards			16,295.8				17,869.0				(1,573.2	)			-8.8	%
																Overburden Stripping:
$	44.2			$	33.9				10.3				30.3	%		Clearing		$	141.7			$	101.7				40.0				39.4	%
	0.0				0.0				0.0				0.0			Relocations			0.0				23.0				(23.0	)			-100.0	%
	0.0				0.0				0.0				0.0			Dozer-Overburden			0.6				0.0				0.6				100.0	%
	0.0				0.0				0.0				0.0			Scraper Overburden			0.0				0.0				0.0				0.0	%
	1,263.2				555.9				707.2				127.2	%		Truck/Loader-O.B.			2,485.2				2,316.6				168.7				7.3	%
	1,263.2				555.9				707.2				127.2	%		Total Mobile-Overburden			2,485.8				2,316.6				169.3				7.3	%
	1,259.9				1,010.6				249.3				24.7	%		Draglines			3,304.9				3,119.6				185.3				5.9	%
	10.1				0.0				10.1				100.0	%		BWE			161.4				191.9				(30.5	)			-15.9	%
	0.0				0.0				0.0				0.0			Contractor			0.0				0.0				0.0				0.0	%
	118.4				113.1				5.2				4.6	%		Pit/Surface Xxxxxxx			367.5				329.0				38.4				11.7	%
	71.2				130.3				(59.1	)			-45.4	%		OB Dewatering			335.4				384.1				(48.7	)			-12.7	%
	189.6				243.5				(53.9	)			-22.1	%		Total OB Water Control			702.9				713.1				(10.2	)			-1.4	%
	(151.3	)			0.0				(151.3	)			100.0	%		Deferred Stripping Adj			(114.1	)			0.0				(114.1	)			100.0	%
	2,615.6				1,843.9				771.8				41.9	%		Total Overburden			6,682.7				6,465.9				216.8				3.4	%
																Interburden Stripping
	30.1				54.9				(24.8	)			-45.1	%		Dozers			137.0				220.8				(83.8	)			-38.0	%
	1.1				0.0				1.1				100.0	%		Scaper			1.4				0.0				1.4				100.0	%
	0.1				75.5				(75.4	)			-99.9	%		Truck/Loader			3.6				303.6				(300.0	)			-98.8	%
	31.4				130.4				(99.0	)			-75.9	%		Total Mobile-Interburden			142.0				524.4				(382.4	)			-72.9	%
	602.1				519.4				82.8				15.9	%		Draglines			2,187.8				1,603.7				584.1				36.4	%
	0.0				0.0				0.0				0.0			Water Control			0.0				0.0				0.0				0.0	%
	633.5				649.8				(16.3	)			-2.5	%		Total Interburden			2,329.8				2,128.1				201.7				9.5	%
	3,249.2				2,493.6				755.5				30.3	%		Total Stripping Costs			9,012.5				8,594.1				418.5				4.9	%
																Coal Production
	12.8				0.0				12.8				100.0	%		Testing & Analysis			13.4				0.0				13.4				100.0	%
	1.1				0.0				1.1				100.0	%		Coal Cleaning			8.9				0.0				8.9				100.0	%
	234.5				253.7				(19.2	)			-7.6	%		Loading Lignite			764.2				760.7				3.5				0.5	%
	889.7				751.4				138.3				18.4	%		Hauling Lignite			2,664.4				2,255.2				408.2				18.1	%
	158.9				221.2				(62.3	)			-28.2	%		Crushing & Handling			417.8				560.4				(142.6	)			-25.4	%
	(52.9	)			0.0				(52.9	)			100.0	%		Coal Stockpile: Def. Adj			(41.2	)			0.0				(41.2	)			100.0	%
	1,244.1				1,226.3				17.8				1.5	%		Total Coal Production			3,827.5				3,577.2				250.3				7.0	%
	585.4				435.0				150.4				34.6	%		Roads:			1,478.2				1,303.4				174.8				13.4	%
	257.5				172.6				84.9				49.2	%		Production Supv.:			751.5				517.7				233.8				45.2	%
																Engineering:
	141.7				150.6				(8.9	)			-5.9	%		Mine Planning			395.9				455.6				(57.7	)			-13.1	%
	79.6				142.1				(62.5	)			-44.0	%		Civil & Environ. Eng.			349.9				453.1				(103.2	)			-22.8	%
	221.4				292.8				(71.4	)			-24.4	%		Total Engineering			745.8				908.7				(162.9	)			-17.9	%
																Current Reclamation:
	0.0				0.0				0.0				0.0	%		Engineering			0.5				0.0				0.5				100.0	%
	207.0				340.1				(133.1	)			-39.1	%		Regrade			503.0				1,080.0				(577.0	)			-53.4	%
	0.0				(152.9	)			152.9				-100.0	%		Recl. Arrearage Cr.			0.0				(458.7	)			458.7				-100.0	%
	13.4				0.0				13.4				100.0	%		Topsoiling			16.3				0.0				16.3				100.0	%
	22.0				95.4				(73.4	)			-76.9	%		Revegetation			49.1				302.1				(253.0	)			-83.7	%
	4.4				24.2				(19.8	)			-81.6	%		Pond Treatment			31.5				76.3				(44.7	)			-58.7	%
	41.6				29.3				12.3				42.1	%		Civil-Desilt Ponds/Div			43.2				68.3				(25.1	)			-36.8	%
	58.9				66.5				(7.6	)			-11.4	%		Sediment Control			59.8				121.0				(61.2	)			-50.6	%
	105.0				120.0				(15.0	)			-12.5	%		Total Erosion Control			134.4				265.5				(131.1	)			-49.4	%

Page 1 of 2

Texas Xxxxxxxxxxxx Coal Co.
Budget Variance Report Detail
For the Month of
March 2007

Current Month																		Year To Date
Actual				Budget				Variance								Description		Actual			Budget							Variance
	23.4				17.1				6.3				36.7	%		Resource Monitoring			88.0				48.4				39.6				81.7	%
	10.6				0.0				10.6				100.0	%		Well Monitoring			19.5				0.0				19.5				100.0	%
	9.2				40.1				(30.9	)			-77.1	%		HazMat Monitoring			10.8				100.2				(89.4	)			-89.2	%
	43.2				57.3				(14.1	)			-24.6	%		Total Compl. Monitoring			118.4				148.7				(30.3	)			-20.4	%
	11.0				35.4				(24.4	)			-68.9	%		Permint/Bonding			0.4				75.2				(74.8	)			-99.4	%
	401.6				495.2				(93.6	)			-18.9	%		Total Current Recl.			822.2				1,412.8				(590.7	)			-41.8	%
	231.3				172.0				59.3				34.5	%		Post Mine Accretion			693.8				515.9				177.8				34.5	%
																DD&A
	69.5				147.0				(77.5	)			-52.7	%		Amortization			219.8				462.8				(243.0	)			-52.5	%
	41.7				34.8				6.9				19.7	%		Depletion			181.7				175.4				5.3				3.0	%
	388.7				298.4				90.3				30.3	%		ARO Depletion			1,272.8				1,003.9				268.9				26.8	%
	166.6				83.6				83.0				99.4	%		Depreciation			521.2				269.4				251.8				93.5	%
	666.5				563.8				102.8				18.2	%		Total DD&A			2,195.5				1,912.4				283.1				14.8	%
																Safety Administration
	27.6				21.2				6.4				30.4	%		Safety Administration			73.8				90.5				(16.7	)			-18.5	%
	1.9				27.9				(26.0	)			-93.3	%		Training/Inspection			79.3				71.2				8.1				11.4	%
	101.6				98.1				3.5				3.5	%		Safety Awards			105.3				108.8				(3.5	)			-3.2	%
	131.1				147.1				(16.1	)			-10.9	%		Total Safety Admin.			258.4				270.6				(12.1	)			-4.5	%
	20.3				19.0				1.3				6.9	%		Purchasing			45.4				57.0				(11.5	)			-20.2	%
	46.9				94.2				(47.3	)			-50.2	%		Warehousing			264.6				277.1				(12.5	)			-4.5	%
																Facilities:
	75.6				100.8				(25.2	)			-25.0	%		Buildings			241.9				298.6				(56.7	)			-19.0	%
	14.0				17.1				(3.1	)			-18.3	%		Security			41.9				55.1				(13.2	)			-24.0	%
	89.6				117.9				(28.4	)			-24.0	%		Total Facilities			283.8				353.6				(69.9	)			-19.8	%
																Lands:
	33.0				28.5				4.5				15.7	%		Land Department			86.6				88.2				(1.5	)			-1.8	%
	0.6				0.6				(0.0	)			-0.1	%		Lease Rentals/Mineral			2.1				2.1				(0.0	)			0.0	%
	0.0				0.0				0.0				0.0	%		Lease Rentals/Surface			6.7				10.0				(3.3	)			-32.6	%
	110.7				110.7				(0.0	)			0.0	%		Adv. Xxx-Non Recoup.			314.4				314.4				0.0				0.0	%
	0.0				0.0				0.0				0.0	%		Right Of Way Costs			0.5				0.5				0.0				0.0	%
	0.1				0.0				0.1				100.0	%		Filing Fees			0.1				0.0				0.1				100.0	%
	144.4				139.9				4.5				3.3	%		Total Lands			420.4				415.1				(4.7	)			-1.1	%
																Royalty/Prod Tax Costs:
	53.7				44.2				9.5				21.6	%		Federal Reclamation			169.8				148.7				21.1				14.2	%
	171.5				200.0				(28.5	)			-14.3	%		Sales Tax			295.8				600.0				(304.2	)			-50.7	%
	225.2				244.2				(19.0	)			-7.8	%		Total Production Taxes			465.6				748.7				(283.1	)			-37.8	%
	105.3				143.9				(38.6	)			-26.8	%		Production Royalty			386.7				417.0				(30.3	)			-7.3	%
	(66.5	)			0.0				(66.5	)			100.0	%		Recoupment Cr.			(66.5	)			0.0				(66.5	)			100.0	%
	108.2				55.1				53.1				96.4	%		Overriding Royalty			340.8				286.5				54.3				19.0	%
	147.0				199.0				(51.9	)			-26.1	%		Total Royalties			661.0				703.5				(42.5	)			-6.0	%
	27.5				37.5				(10.0	)			-26.6	%		Property Taxes			110.0				112.5				(2.5	)			-2.2	%
$	399.8			$	480.7				(80.9	)			-16.8	%		Total Royalty/Prod Tax		$	1,236.7			$	1,564.7				(328.0	)			-21.0	%
	20.8				42.5				(21.7	)			-51.1	%		Human Resources:			114.0				128.2				(14.2	)			-11.1	%
	31.2				140.0				(108.7	)			-77.7	%		Information Technology			158.6				299.1				(140.5	)			-47.0	%
	178.3				192.3				(13.9	)			-7.2	%		Business:			550.1				559.2				(9.2	)			-1.6	%
	397.2				360.3				36.9				10.2	%		Executive:			495.0				498.8				(3.7	)			-0.8	%
	673.8				593.6				80.2				13.5	%		Equipment Costs:			1,902.1				1,780.9				121.2				6.8	%
$	8,990.3			$	8,178.6			$	811.7				9.9	%		Grand Total		$	25,246.0			$	24,946.5			$	299.5				1.2	%
																UNIT COSTS
$	16.73			$	14.71			$	2.02				13.7	%		Cost per Ton — Lignite		$	14.86			$	14.96				($0.10	)			-0.6	%
$	1.28			$	1.10			$	0.17				15.8	%		Cost per MMBTU — Lignite		$	1.12			$	1.12			$	0.00				0.3	%
$	0.60			$	0.42			$	0.18				41.4	%		Stripping Cost per BCY		$	0.55			$	0.48			$	0.07				15.0	%
$	0.40			$	0.29			$	0.11				37.3	%		Dragline Stripping $/BCY		$	0.39			$	0.30			$	0.09				28.7	%
$	1.71			$	1.10			$	0.62				56.3	%		Mobile Stripping $/BCY		$	1.32			$	1.40				($0.08	)			-5.7	%

Page 2 of 2

Texas Xxxxxxxxxxxx Coal Co.
Xxxxxx Mine
Performance Summary
March 2007

		Month													Year To Date
		Actual				0+12 Fcst				Budget					Actual				0+12 Fcst				Budget
QUANTITIES:
Sales Tons			537.5				556.1				556.1					1698.4				1667.4				1667.4
8200 Dragline Bcy			3,817.6				4,853.0				4,853.0					11,383.9				13,872.0				13,872.0
8750 Dragline Stripping			835.5				396.0				396.0					2,797.9				1,829.0				1,829.0
Mobile Stripping			761.5				626.0				626.0					2,114.0				2,168.0				2,168.0
Total Bcy			5,414.6				5,875.0				5,875.0					16,295.8				17,869.0				17,869.0
UNIT COSTS:
Overburden Stripping:										$/Bcy
Clearing		$	0.008			$	0.006			$	0.006				$	0.009			$	0.006			$	0.006
Relocations
Dozer-Overburden		$	0.000			$	0.000			$	0.000				$	0.000			$	0.000			$	0.000
Scraper-Overburden		$	0.000			$	0.000			$	0.000				$	0.000			$	0.000			$	0.000
Truck/Loader-O.B.		$	1.659			$	0.888			$	0.888				$	1.176			$	1.069			$	1.069
Total Mobile-Overburden		$	1.659			$	0.888			$	0.888				$	1.176			$	1.069			$	1.069
Draglines		$	0.271			$	0.193			$	0.193				$	0.233			$	0.199			$	0.199
Pit/Surface Xxxxxxx		$	0.022			$	0.019			$	0.019				$	0.023			$	0.018			$	0.018
OB Dewatering		$	0.013			$	0.022			$	0.022				$	0.021			$	0.021			$	0.021
Total OB Water Control		$	0.035			$	0.041			$	0.041				$	0.043			$	0.040			$	0.040
Deferred Stripping Adj		$	(0.028	)		$	0.000			$	0.000				$	(0.007	)		$	0.000			$	0.000
Total Overburden		$	0.483			$	0.314			$	0.314				$	0.410			$	0.362			$	0.362
Interburden Stripping:
Dozers		$	0.040			$	0.088			$	0.088				$	0.065			$	0.102			$	0.102
Scraper		$	0.001			$	0.000			$	0.000				$	0.001			$	0.000			$	0.000
Truck/Loader		$	0.000			$	0.121			$	0.121				$	0.002			$	0.140			$	0.140
Total Mobile-Interburden		$	0.041			$	0.208			$	0.208				$	0.067			$	0.242			$	0.242
Draglines		$	0.129			$	0.099			$	0.099				$	0.154			$	0.102			$	0.102
Water Control		$	0.000			$	0.000			$	0.000				$	0.000			$	0.000			$	0.000
Total Interbuden		$	0.117			$	0.111			$	0.111				$	0.143			$	0.119			$	0.119
Total Stripping Costs		$	0.600			$	0.424			$	0.424				$	0.553			$	0.481			$	0.481
										$/Ton
Coal Production:
Testing & Analysis		$	0.024			$	0.000			$	0.000				$	0.008			$	0.000			$	0.000
Coal Cleaning		$	0.002			$	0.000			$	0.000				$	0.005			$	0.000			$	0.000
Loading Lignite		$	0.436			$	0.456			$	0.456				$	0.450			$	0.456			$	0.456
Hauling Lignite		$	1.655			$	1.351			$	1.351				$	1.569			$	1.353			$	1.353
Crushing & Handling		$	0.296			$	0.398			$	0.398				$	0.246			$	0.336			$	0.336
Coal Stockpile: Def. Adj.		$	(0.098	)		$	0.000			$	0.000				$	(0.024	)		$	0.000			$	0.000
Total Coal Production		$	2.315			$	2.205			$	2.205				$	2.254			$	2.145			$	2.145
Roads:		$	1.089			$	0.782			$	0.782				$	0.870			$	0.782			$	0.782
Production Supervision:		$	0.479			$	0.310			$	0.310				$	0.442			$	0.310			$	0.310
Engineering:
Mine Planning		$	0.264			$	0.271			$	0.271				$	0.233			$	0.273			$	0.273
Civil & Environmental Eng.		$	0.148			$	0.256			$	0.256				$	0.206			$	0.272			$	0.272
Total Engineering		$	0.412			$	0.526			$	0.526				$	0.439			$	0.545			$	0.545
Current Reclamation:
Engineering		$	0.000			$	0.000			$	0.000				$	0.000			$	0.000			$	0.000
Regrade		$	0.385			$	0.612			$	0.612				$	0.296			$	0.648			$	0.648
Reclamation Arrearage Cr.		$	0.000			$	(0.275	)		$	(0.275	)			$	0.000			$	(0.275	)		$	(0.275	)
Topsoiling		$	0.025			$	0.000			$	0.000				$	0.010			$	0.000			$	0.000
Revegetation		$	0.041			$	0.172			$	0.172				$	0.029			$	0.181			$	0.181

Page 1 of 2

Texas Xxxxxxxxxxxx Coal Co.
Xxxxxx Mine
Performance Summary
March 2007

		Month													Year To Date
		Actual				0+12 Fcst				Budget					Actual				0+12 Fcst				Budget
Erosion Control		$	0.195			$	0.216			$	0.216				$	0.079			$	0.159			$	0.159
Compl. Monitoring		$	0.080			$	0.103			$	0.103				$	0.070			$	0.089			$	0.089
Permint/Bonding		$	0.020			$	0.064			$	0.064				$	0.000			$	0.045			$	0.045
Total Current Recl.		$	0.747			$	0.891			$	0.891				$	0.484			$	0.847			$	0.847
Post Mine Accretion:		$	0.430			$	0.309			$	0.309				$	0.408			$	0.309			$	0.309
DD&A:
Amortization		$	0.129			$	0.264			$	0.264				$	0.129			$	0.278			$	0.278
Depletion		$	0.078			$	0.063			$	0.063				$	0.107			$	0.106			$	0.106
ARO Depletion		$	0.723			$	0.537			$	0.537				$	0.749			$	0.602			$	0.602
Depreciation		$	0.310			$	0.150			$	0.150				$	0.307			$	0.162			$	0.162
Total DD&A		$	1.240			$	1.014			$	1.014				$	1.293			$	1.147			$	1.147
Safety Administration:
Safety Administration		$	0.051			$	0.038			$	0.038				$	0.043			$	0.054			$	0.054
Training/Inspection		$	0.003			$	0.050			$	0.050				$	0.047			$	0.043			$	0.043
Safety Awards		$	0.189			$	0.176			$	0.176				$	0.062			$	0.065			$	0.065
Total Safety Admin.		$	0.244			$	0.265			$	0.265				$	0.152			$	0.162			$	0.162
Purchasing:		$	0.038			$	0.034			$	0.034				$	0.027			$	0.034			$	0.034
Warehousing:		$	0.087			$	0.169			$	0.169				$	0.156			$	0.166			$	0.166
Facilities:
Building		$	0.141			$	0.181			$	0.181				$	0.142			$	0.179			$	0.179
Security		$	0.026			$	0.031			$	0.031				$	0.025			$	0.033			$	0.033
Total Facilities		$	0.167			$	0.212			$	0.212				$	0.167			$	0.212			$	0.212
Lands:
Land Department		$	0.061			$	0.051			$	0.051				$	0.051			$	0.053			$	0.053
Lease Rentals/Mineral		$	0.001			$	0.001			$	0.001				$	0.001			$	0.001			$	0.001
Lease Rentals/Surface		$	0.000			$	0.000			$	0.000				$	0.004			$	0.006			$	0.006
Adv. Xxx-Non Recoup.		$	0.206			$	0.199			$	0.199				$	0.185			$	0.189			$	0.189
Right Of Way Costs		$	0.000			$	0.000			$	0.000				$	0.000			$	0.000			$	0.000
Filing Fees		$	0.000			$	0.000			$	0.000				$	0.000			$	0.000			$	0.000
Total Lands		$	0.269			$	0.252			$	0.252				$	0.242			$	0.249			$	0.249
Royalty/Prod Tax Costs:
Federal Reclamation		$	0.100			$	0.079			$	0.079				$	0.100			$	0.089			$	0.089
Sales Taxes		$	0.319			$	0.360			$	0.360				$	0.174			$	0.360			$	0.360
Total Production Taxes		$	0.419			$	0.439			$	0.439				$	0.274			$	0.449			$	0.449
Production Royalty		$	0.196			$	0.259			$	0.259				$	0.228			$	0.250			$	0.250
Recoupment Cr.		$	(0.124	)		$	0.000			$	0.000				$	(0.039	)		$	0.000			$	0.000
Overriding Royalty		$	0.201			$	0.099			$	0.099				$	0.201			$	0.172			$	0.172
Total Royalties		$	0.274			$	0.358			$	0.358				$	0.389			$	0.422			$	0.422
Property Taxes		$	0.051			$	0.067			$	0.067				$	0.065			$	0.067			$	0.067
Total Xxx/Prod Tax Costs		$	0.744			$	0.864			$	0.864				$	0.728			$	0.938			$	0.938
Human Resources:		$	0.039			$	0.076			$	0.076				$	0.067			$	0.077			$	0.077
Information Technology:		$	0.058			$	0.252			$	0.252				$	0.093			$	0.179			$	0.179
Business:		$	0.332			$	0.346			$	0.346				$	0.324			$	0.335			$	0.335
Executive:		$	0.739			$	0.648			$	0.648				$	0.291			$	0.299			$	0.299
Equipment Costs:		$	1.254			$	1.068			$	1.068				$	1.120			$	1.068			$	1.068
Total Cost/Ton		$	16.728			$	14.708			$	14.708				$	14.865			$	14.961			$	14.961

Page 2 of 2

EXHIBIT 15

Form of Monthly and Quarterly Variance Report

See attached.

Exhibit 15 — Page 1

		Xxxxxxxxxxxx Coal Company		Page – 1
		Cost By Sub by Cat Code
		As of 31

Exhibit 15

		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
25100 Clearing
Contract Labor			44,168.38				33,885.00				10,283.38				.30				141,721.88				101,681.00				40,040.88				.39
Total Clearing			44,168.38				33,885.00				10,283.38				.30				141,721.88				101,681.00				40,040.88				.39
25200 Relocations
Contract Labor																							23,000.00				23,000.00-				1.00-
Total Relocations																							23,000.00				23,000.00-				1.00-
25300 Mobile
Total Mobile
25310 Dozers
Hourly Labor (Fringe & Tax)																			608.41								608.41
Total Dozers																			608.41								608.41
25320 Scrapers
Total Scrapers
25330 TK/Leader
Hourly Labor (Fringe & Tax)			262,709.07				148,069.00				114,640.07				.77				466,538.25				603,779.00				137,240.75-				.23-
Contract Labor			211,548.61				24,762.00				186,786.61				7.54				273,950.56				100,970.00				172,980.56				1.71
Equipment w/Maint Labor, F&T			788,892.81				383,092.00				405,800.81				1.06				1,597,136.96				1,530,889.00				66,247.96				.04
Equipment Rental/Lease																			147,611.38				80,947.00				66,664.38				.82
Total TK/Leader			1,263,150.49				55,923.00				707,227.49				1.27				2,485,237.15				2,316,585.00				168,652.15				.07
25400 Draglines
Hourly Labor (Fringe & Tax)			226,262.20				172,948.00				53,314.20				.31				634,446.24				529,680.00				104,755.24				.20
Contract Labor			1,404.38				10,890.00				9,485.62-				.87-				1,715.62				12,622.00				10,906.38-				.86-
Equipment w/Maint Labor, F&T			1,032,238.62				824,362.00				207,876.62				.25				2,664,943.68				2,570,87_.00				94,136.68				.04
Equipment Rental/Lease																			3,784.56								3,784.56
Materials and Supplies							2,360.00				2,360.00-				1.00-								6,490.00				6,490.00-				1.00-
Total Draglines			1,259,905.20				1,010,560.00				249,345.20				.25				3,304,890.10				3,119,599.00				185,291.10				.06
25500 Bucketwheel- OB
Hourly Labor (Fringe & Tax)			1,006.72								1,006.72								53,206.33				57,880.00				4,673.67-				.08-
Contract Labor																			26.70								26.70
Equipment w/Maint Labor, F&T			8,904.35								8,904.35								107,979.68				134,053.00				26,073.32-				.19-
Materials and Supplies			209.08								209.08								209.08								209.08
Total Bucketwheel- OB			10,120.15								10,120.15								161,421.79				191,933.00				30,511.21-				.16-
25600 Contractor- OB
Total Contractor- XX

		Xxxxxxxxxxxx Coal Company		Page – 2
		Cost By Sub by Cat Code
		As of 31

		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
25700 Drainage / water control OB
Total Drainage / water control OB
25710 Pit/Surface
Hourly Labor (Fringe & Tax)			85,052.43				79,261.00				5,791.43				.07				234,836.88				230,112.00				4,724.88				.02
Contract Labor			8,576.82				9,807.00				1,230.18-				.13-				25,559.19				28,472.00				2,912.81-				.10-
Equipment w/Maint Labor, F&T			23,482.28				18,680.00				4,802.28				.26				93,343.82				54,232.00				39,111.82				.72
Safety Supplies																			7.74								7.74
Materials and Supplies			1,246.47				5,400.00				4,153.53-				.77-				13,708.14				16,200.00				2,491.86-				.15-
Total Pit/Surface			118,358.00				113,148.00				5,210.00				.05				367,455.77				329,016.00				38,439.77				.12
25720 Overburden
Hourly Labor (Fringe & Tax)			15,913.62				13,836.00				2,077.62				.15				42,474.46				41,508.00				966.46				.02
Contact labor			27,406.96				78,000.00				50,593.04-				.65-				173,281.06				233,750.00				50,468.94-				.26-
Equipment w/Maint Labor, F&T			3,112.02								3,112.02								6,603.89								6,603.89
Materials and supplies			17,622.46				30,500.00				12,877.54-				.42-				83,143.14				84,850.00				1,706.86-				.02-
Electricity			7,155.16				8,000.00				8.44.84-				.11-				29,924.14				24,000.00				5,924.14				.25
Total Overburden			71,210.22				130,336.00				59,125.78-				.45-				335,426.69				384,108.00				48,681.31-				.13-
25800 OB Drill & BI
Total OB Drill&BI
30110 Dozers- IB
Hourly Labor (Fringe & Tax)			8,479.73				14,624.00				6,144.27-				.42-				31,134.92				59,632.00				28,497.08-				.48-
Contract Labor			3,795.15				2,446.00				1,349.15				.55				10,359.42				9,973.00				386.42				.04
Equipment w/Maint Labor, F&T			17,874.41				37,836.00				19,961.59-				.53-				89,947.08				151,199.00				61,251.92-				.41-
Equipment Rental/Lease																			5,542.11								5,542.11
Total Dozers- IB			30,149.29				54,905.00				24,756.71-				.45-				136,983.53				220,804.00				83,820.47-				.38-
30128 Scrapers- IB
Equipment w/Maint Labor, F&T			1,125.90								1,125.90								1,405.87								1,405.87
Total Scrapers- IB			1,125.90								1,125.90								1,405.87								1,405.87
30130 Track/Loader- IB
Hourly Labor (Fringe & Tax)			456.30				20,108.00				19,651.70-				.98-				1,695.32				81,996.00				80,300.68-				.98-
Contract Labor			107.27				3,363.00				3,255.73-				.97-				107.27				13,712.00				13,604.73-				.99-
Equipment w/Maint Labor, F&T			467.96-				52,025.00				52,492.96-				1.01-				1,767.06				207,899.00				206,131.94-				.99-
Equipment Rental/Lease																			55.20								55.20
Total Truck / Loader- IB			95.61				75,496.00				75,400.39-				1.00-				3,624.85				303,607.00				299,982.15-				.00-

		Xxxxxxxxxxxx Coal Company		Page – 3
		Cost By Sub by Cat Code
		As of 31

		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
30209 Draglines- IB
Hourly Labor (Fringe & Tax)			95,038.55				89,094.00				5,944.55				.07				334,051.27				272,866.00				61,185.27				.22
Contract Labor							5,610.00				5,610.00-				1.00-				316.13				6,503.00				6,186.87-				.95-
Equipment w/Maint Labor, F&T			307,106.91				424,672.00				82,434.91				.19				1,853,449.45				1,324,355.00				529,094.45				.40
Total Draglines- IB			602,145.46				519,376.00				82,769.46				.16				2,187,816.85				1,603,724.00				584,092.85				.36
30409 Draglines
Total Draglines
35100 Test&Analy
Hourly Labor (Fringe & Tax)			585.28								585.28								841.34								841.34
Contract Labor			12,105.08								12,105.08								12,426.98								12,426.98
Materials and Supplies			115.20								115.20								115.20								115.20
Total Test&Analy			12,805.56								12,805.56								13,383.52								13,383.52
35200 Coal Cleaning
Hourly Labor (Fringe & Tax)																			3,076.44								3,076.44
Equipment w/Maint Labor, F&T			1,093.94								1,093.94								5,838.25								5,838.25
Total Coal Cleaning			1,093.94								1,093.94								8,914.69								8,914.69
35400 Loading
Hourly Labor (Fringe & Tax)			70,742.50				67,237.00				3,505.50				.05				215,316.82				201,896.00				13,420.82				.07
Contract Labor			1,797.22				4,099.00				2,301.78-				.56-				4,278.72				12,309.00				8,030.28-				.65-
Equipment w/Maint Labor, F&T			161,914.50				182,351.00				20,436.50-				.11-				544,574.40				546,448.00				1,873.60-				0.00
Total Loading			234,454.22				253,637.00				19,232.78-				.08-				764,169.94				760,653.00				3,516.94				0.00
35500 Haulage
Hourly Labor (Fringe & Tax)			68,527.53				169,171.00				100,643,47-				.59-				203,039.80				508,037.00				304,997.20-				.50-
Contract Labor			161,528.45				32,471.00				129,057.45				3.97				355,275.69				97,501.00				257,774.69				2.64
Equipment w/Maint Labor, F&T			659,640.82				549,715.00				109,925.82				.20				2,104,098.00				1,650,632.00				453,466.00				.27
Equipment Rental/Lease																			1,963.49								1,963.49
Total Haulage			889,696.80				751,357.00				138,339.80				.18				2,664,376.98				2,256,170.00				408,206.98				.18
35600 Crush & Hand
Hourly Labor (Fringe & Tax)			77,334.65				74,172.00				3,162.65				.04				220,911.33				218,273.00				2,638.33				.01
Contract Labor			1,210.74				51,125.00				49,914.26-				.98-				7,610.38				54,373.00				46,762.62-				.86-
Equipment w/Maint Labor, F&T			80,395.62				94,441.00				14,045.38-				.15-				189,173.89				283,254.00				94,080.11-				.33-
Equipment Rental/Lease																			105.50								105.50
Materials and Supplies							1,495.00				1,495.00-				1.00-								4,485.00				4,485.00-				1.00-

		Xxxxxxxxxxxx Coal Company		Page – 4
		Cost By Sub by Cat Code
		As of 31

		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
Total Crush & Hand			158,941.01				221,233.00				62,291.99-				.28-				417,801.10				560,385.00				142,583.90-				.25-
40000 Roads
Hourly Labor (Fringe & Tax)			173,544.68				146,664.00				26,880.68				.18				449,223.51				440,389.00				8,834.51				.02
Contract Labor			18,932.52				27,651.00				8,718.48-				.32-				120,359.18				81,384.00				38,975.18				.48
Equipment w/Maint Labor, F&T			375,700.17				240,671.00				135,029.17				.56				835,609.36				722,665.00				112,944.36				.16
Equipment Rental/Lease			5,050.00-								5,050.00-								11,163.02								11,163.02
Materials and Supplies			17,464.29				18,105.00				640.71-				.04-				48,735.39				53,115.00				4,379.61-				.08-
Electricity			4,821.53				1,950.00				2,871.53				1.47				13,323.58				5,850.00				7,473.58				1.28
Freight																			175.04-								175.04-
Total Roads			585,413.19				435,041.00				150,372.19				.35				1,478,239.00				1,303,403.00				174,836.00				.13
45000 Prod Superv
Hourly Labor (Fringe & Tax)			122,258.29				28,611.00				93,647.29				3.27				228,770.44				85,833.00				142,937.44				1.67
Supervisor Labor (Fringe & Tax)			115,423.27				127,860.00				12,436.73-				.10-				361,290.66				383,580.00				22,289.34-				.06-
Contract Labor			1,955.78				7,500.00				5,544.22-				.74-				61,347.55				22,500.00				38,847.55				1.73
Equipment w/Maint Labor, F&T			7,314.90								7,314.90								71,447.30								71,447.30
Equipment Rental/Lease							1,500.00				1,500.00-				1.00-								4,500.00				4,500.00-				1.00-
Safety Supplies			3,347.62								3,347.62								8,902.74								8,902.74
Materials and Supplies			5,047.34				4,900.00				147.34				.03				14,285.61				14,700.00				414.39-				.03-
Electricity			1,916.06				1,520.00				796.06				.71				4,560.59				3,360.00				1,200.59				.36
Other			239.47				1,066.00				826.53-				.78-				892.54				3,198.00				2,305.46-				.72-
Total Prod Superv			257,502.73				172,557.00				84,945.73				.49				751,497.43				517,671.00				233,826.43				.45
50100 Mine Plan
Hourly Labor (Fringe & Tax)			20,700.59				23,423.00				2,722.41-				.12-				54,216.58				70,269.00				16,052.42-				.23-
Supervisor Labor (Fringe & Tax)			90,168.93				94,404.00				4,235.07-				.04-				263,758.32				283,212.00				19,453.68-				.07-
Contract Labor			28,320.08				29,258.00				937.92-				.03-				70,587.73				96,974.00				26,386.27-				.27-
Materials and Supplies			357.57				1,460.00				1,102.43-				.76-				2,436.40				3,060.00				623.60-				.20-
Other			2,195.04				2,100.00				95.04				.05				4,948.92				2,100.00				2,848.92				1.36
Total Mine Plan			141,742.21				150,645.00				8,902.79-				.06-				395,947.95				455,615.00				59,667.05-				.13-
50200 Civil Engineering
Supervisor Labor (Fringe & Tax)			4,271.13				68,673.00				64,400.87-				.94-				154,722.22				206,016.00				51,293.78-				.25-
Contract Labor			27,697.89				12,629.00				15,068.89				1.19				42,603.02				59,611.00				17,007.98-				.29-
Materials and Supplies			741.70				615.00				126.70				.21				759.32				6,845.00				6,085.68-				.89-
Legal			2,321.94				5,500.00				3,178.06-				.58-				17,101.74				16,500.00				601.74				.04
Other			44,575.73				54,700.00				10,124.27-				.19-				134,679.13				164,100.00				29,420.87-				.00-

		Xxxxxxxxxxxx Coal Company		Page – 5
		Cost By Sub by Cat Code
		As of 31

		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
Total Civil Engineering			79,608.39				142,116.00				62,507.61-				.44-				349,865.43				453,072.00				103,206.57-				.23-
53100 Engineering
Contract Labor																			475.00								475.00
Total Engineering																			475.00								475.00
53200 Regrading
Hourly Labor (Fringe & Tax)			41,931.24				45,338.00				3,406.76-				.05-				91,863.33				131,626.00				39,762.67-				.30-
Contract Labor			43,281.20				85,722.00				42,440.80-				.50-				102,777.29				302,272.00				199,494.71-				.66-
Equipment w/Maint Labor, F&T			121,790.84				100,277.00				21,513.84				.21				244,866.34				291,127.00				46,260.66-				.16-
Equipment Rental/Lease							48,151.00				48,151.00-				1.00-				63,383.50				139,793.00				76,409.50-				.55-
Safety Supplies																			80.07								80.07
Materials and Supplies							60,588.00				60,588.00-				1.00-				27.24				215,220.00				215,192.76-				1.00-
Total Regrading			207,003.28				340,076.00				133,072.72-				.39-				502,997.77				1,080,038.00				577,040.23-				.53-
55210 Topsoiling
Hourly Labor (Fringe & Tax)			5,419.32								5,419.32								6,963.77								6,963.77
Contract Labor																			316.13								316.13
Equipment w/Maint Labor, F&T			7,992.38								7,992.38								9,068.09								9,068.09
Total Topsoiling			13,411.70								13,411.70								16,347.99								16,347.99
55300 Revegetation
Contract Labor			15,480.99				71,535.00				56,054.01-				.78-				38,324.48				226,575.00				188,250.52-				.83-
Materials and Supplies			6,504.98				23,845.00				17,340.02-				.73-				10,769.14				75,525.00				64,755.86-				.86-
Total Revegetation			21,985.97				95,380.00				73,394.03-				.77-				49,093.62				302,100.30				253,006.38-				.84-
55400 Erosion control
Total Erosion control
55410 Ero ctrl- Pond Treat
Hourly Labor (Fringe & Tax)																			153.02								153.02
Contract Labor			4,401.90				2,800.00				1,601.90				.57				8,607.99				8,400.00				207.99				.02
Materials and Supplies							21,384.00				21,384.00-				1.00-				22,758.95				67,860.00				45,101.05-				.66-
Total Ero ctrl- Pond Treat			4,401.90				24,184.00				19,782.10-				.82-				31,519.96				76,260.00				44,740.04-				.59-
55420 Civil- Desilt Ponds
Contract Labor			41,629.74				23,820.00				17,809.74				.75				43,151.73				51,820.00				8,668.27-				.17-
Materials and Supplies							3,480.00				3,480.00-				1.00-								10,440.00				10,440.00-				1.00-
Electricity							2,000.00				2,000.00-				1.00-								6,000.00				6,000.00-				1.00-
Total Civil- Desilt Ponds			41,629.74				29,300.00				12,329.74				.42				43,151.73				68,260.00				25,108.27-				.00-

		Xxxxxxxxxxxx Coal Company		Page – 6
		Cost By Sub by Cat Code
		As of 31

		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
55430 Sediment Control- Base Recl
Contract Labor			58,932.86				29,000.00				29,932.86				1.03				59,531.24				83,500.00				23,968.76-				.29-
Materials and Supplies							37,500.00				37,500.00-				1.00-				227.55				37,500.00				37,272.45-				.99-
Total Sediment Control- Base Recl			58,932.86				66,500.00				7,567.14-				.11-				59,758.79				121,000.00				61,241.21-				.51-
55501 Resource Monitoring- Base Recl
Hourly Labor (Fringe & Tax)			444.44								444.44								1,041.89								1,041.89
Contract Labor			21,267.57				16,049.00				5,218.57				.33				74,630.15				47,147.00				27,503.15				.58
Materials and Supplies			1,722.83				1,100.00				622.83				.57				11,326.31				1,300.00				10,026.31				7.71
Electricity																			1,006.13								1,006.13
Total Resource Monitoring- Base Recl			23,434.84				17,149.00				6,285.84				.37				88,024.48				48,447.00				39,577.48				.82
55502 Well Monitoring- Base Recl
Contract labor			10,576.57								10,576.57								19,543.57								19,543.57
Total Well Monitoring- Base Recl			10,576.57								10,576.57								19,543.57								19,543.57
55503 HazMat Monitoring- Base Recl
Hourly Labor (Fringe & Tax)			294.70								294.70								294.70								294.70
Contract Labor			7,335.18				39,013.00				31,677.82-				.81-				2,911.08				91,947.00				89,035.92-				.97-
Materials and Supplies							1,100.00				1,100.00-				1.00-				2,653.87				8,300.00				5,646.13-				.68-
Legal			1,557.83								1,557.83								4,903.47								4,903.47
Other																			50.00								50.00
Total HazMat Monitoring- Base Recl			9,187.71				40,113.00				30,925.29-				.77-				10,813.12				100,247.00				89,433.88-				.89-
55310 Permit/Bonding
Contract Labor			4,557.79				20,925.00				16,367.21-				.78-				7,361.46-				48,725.00				56,086.46-				1.15-
Materials and Supplies							750.00				750.00-				1.00-								2,250.00				2,250.00-				1.00-
Legal			2,750.40				3,750.00				999.60-				.27-				2,750.40				12,250.00				9,499.60-				.78-
Other			3,700.00				10,000.00				6,300.00				.63-				5,040.00				12,000.00				6,960.00-				.58-
Total Permit/Bonding			11,008.19				35,425.00				24,416.81				.69-				428.94				475,225.00				74,796.06-				.99-
55610 Final Pit
Hourly Labor (Fringe & Tax)			15,487.39				123,959.00				108,481.61-				.88-				118,796.75				257,657.00				138,860.25-				.54-
Supervisor Labor (Fringe & Tax)			39,945.62								39,945.62								39,945.62								39,945.62
Contract Labor			89,756.54				47,236.00				42,520.54				.90				188,304.01				100,640.00				87,664.01				.87
Equipment w/Maint Labor, F&T			8,892.74				291,911.00				283,018.26-				.97-				354,039.57				597,417.00				243,377.43-				.00-

		Xxxxxxxxxxxx Coal Company		Page – 7
		Cost By Sub by Cat Code
		As of 31

		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
Equipment Rental/Lease							44,693.00				44,693.00-				1.00-				31,294.51				123,829.00				92,534.49-				.75-
Materials and Supplies			42.66				8,835.00				8,792.34-				1.00-				42.66				27,863.00				27,820.34-				1.00-
Total Final Pit			154,124.95				516,644.00				362,519.05-				.70-				732,423.12				1,107,406.00				374,982.88-				.34-
55620 Facil Remov
Total Facil Remov
55630 Res Monit
Contract Labor			4,098.94								4,098.94								10,148.44								10,148.44
Materials and Supplies			6,485.14-								4,685.14-								42,500.00-								42,500.00-
Total Res Monit			2,386.20-								2,386.20-								32,351.56-								32,351.56-
55640 Engineering
Supervisor Labor (Fringe & Tax)			62,473.85								62,473.85								62,473.85								62,473.85
Contract Labor																			20,497.96								20,497.96
Total Engineering			62,473.85								62,473.85								82,953.81								82,953.81
55650 Regrading
Hourly Labor (Fringe & Tax)			1,330.64								1,330.64								3,388.59								3,388.59
Contract Labor			47,920.67								47,920.67								207,339.17								207,339.17
Materials and Supplies			10,008.61								10,008.61								44,274.35								44,274.35
Total Regrading			59,259.92								59,259.92								255,002.11								255,002.11
55660 Revegetation
Contract Labor			48,978.88				162,388.00				113,409.12-				.70-				112,191.30				342,116.00				229,924.20-				.67-
Materials and Supplies			30,355.07				158,120.00				127,764.93-				.81-				31,816.48				188,905.00				157,688.52-				.83-
Other																			500.00								500.00
Total Revegetation			79,333.95				320,508.00				241,174.05-				.75-				144,508.28				531,021.00				386,512.72-				.73-
55670 Permit Bonding
Contract Labor			815.00								815.00								11,049.86								11,049.86
Total Permit/Bonding			815.00								815.00								11,049.86								11,049.86
00000 Xxxxxxxxx
Total Accretion
56100 Final Pit
Total Final Pit
56300 D, D, & A
Amortization			69,546.16				147,006.00				77,459.84-				.53-				219,768.17				462,767.00				242,998.83-				.53-
Depletion			41,671.07				34,800.00				6,871.07				.20				181,734.41				176,400.00				5,334.41				.03

		Xxxxxxxxxxxx Coal Company		Page – 8
		Cost By Sub by Cat Code
		As of 31

		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
ARO Depletion			388,724.45				298,394.00				90,330.45				.30				1,272,753.24				1,003,873.00				268,880.24				.27
Total D, D, & A			499,941.68				480,200.00				19,741.68				.04				1,674,255.82				1,643,040.00				31,215.82				.02
60058 Safety Admin
Supervisor Labor (Fringe & Tax)			19,920.51				17,088.00				2,832.51				.17				56,580.81				51,264.00				5,316.81				.10
Contract Labor			1,734.62				1,825.00				90.38-				.05-				2,635.28				10,075.00				7,439.72-				.74-
Safety Supplies			2,910.75				1,950.00				960.75				.49				5,368.74				17,800.00				12,431.26-				.70-
Materials and Supplies			196.49				100.00				96.49				.96				3,807.99				7,850.00				4,042.01-				.51-
Other			2,852.95				212.00				2,640.95				12.46				5,419.94				3,556.00				1,863.94				.52
Total Safety Admin			27,615.32				21,175.00				6,440.32				.30				73,812.76				90,545.00				16,732.24-				.18-
69100 Training/Insp
Hourly Labor (Fringe & Tax)			19,839.79				72,556.00				2,716.21-				.12-				62,994.14				65,504.00				2,909.86-				.04-
Contract Labor			19,325.27-								19,325.27-								14,346.06								14,346.06
Materials and Supplies																			631.05								631.05
Other			1,350.00				5,295.00				3,945.90-				.75-				1,350.00				5,295.00				3,945.00-				.75-
Total Training/Insp			1,864.52				27,851.00				25,986.48-				.93-				79,321.25				71,199.00				8,122.25				.11
60200 Awards
Other			101,589.56				98,110.00				3,479.56				.04				105,313.24				108,830.00				3,516.76-				.03-
Total Awards			101,589.56				98,110.00				3,479.56				.04				105,313.24				108,830.00				3,516.76-				.03-
65100 Purchasing
Supervisor Labor (Fringe & Tax)			23,970.24				20,102.00				3,868.24				.19				65,898.61				60,306.00				5,592.61				.09
Contract Labor							1,500.00				1,500.00-				1.00-								4,500.00				4,500.00-				1.00-
Materials and Supplies							300.00				300.00-				1.00-				205.92				1,100.00				894.03-				.81-
Discounts			3,667.39-				3,000.00-				667.39-				.22				13,266.99-				9,000.00-				4,286.99-				.48
Price Adjustments			179.80-								179.80-								7,621.34-								7,621.34-
Other			140.65				50.00				90.65				1.81				241.01				50.00				191.01				3.82
Total Purchasing			20,263.70				18,952.00				1,311.70				.07				45,437.21				56,956.00				11,518.79-				.20-
65200 Warehousing
Hourly Labor (Fringe & Tax)			49,540.15				47,151.00				2,389.15				.05				146,063.91				141,453.00				4,610.91				.03
Supervisor Labor (Fringe & Tax)			12,104.52				12,608.00				503.48-				.04-				37,588.55				37,824.00				235.45-				.01-
Equipment Rental/Lease			125.00				125.00												383.44				375.00				8.44				.02
Materials and Supplies							275.00				275.00-				1.00-				7.90				1,425.00				1,417.10-				.99-
Freight			24,177.81				25,000.00				822.19-				.03-				76,535.34				75,004.00				1,535.34				.02
Hot Shot Fees			2,791.63				5,000.00				2,208.37-				.44-				12,938.38				15,000.00				2,061.62-				.14-
Restocking Fees			633.56				1,000.00				366.44-				.37-				2,631.15				3,000.00				368.85-				.00-

		Xxxxxxxxxxxx Coal Company		Page – 9
		Cost By Sub by Cat Code
		As of 31

		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
Inventory Adjustments			37,956.22-				3,000.00				40,956.22-				13.65	-			8,727.50-				3,000.00				11,727.50-				3.91-
Price Adjustments			427.00								427.00								427.00								427.00
Other			4,940.80-								4,940.80-								3,251.61-								3,251.61-
Total Warehousing			46,902.65				94,159.00				47,256.35-				.50	-			264,596.56				277,077.00				12,480.44-				.05-
66100 Buildings
Hourly Labor (Fringe & Tax)			6,506.03				10,829.00				4,322.97-				.40	-			17,600.36				32,481.00				14,886.64-				.46-
Supervisor Labor (Fringe & Tax)			9,482.60				7,996.00				1,486.60				.19				26,107.49				23,981.00				2,119.49				.09
Contract Labor			12,225.32				21,000.00				8,774.68-				.42	-			46,171.79				68,000.00				21,828.21-				.32-
Equipment w/Maint Labor F&T			5.01-								5.01-								79.35								79.35
Safety Supplies			20.18								20.18								26.99								26.99
Materials and Supplies			3,019.12				6,275.00				3,255.88	-			.52	-			20,696.10				21,275.00				578.90	-			.03	-
Electricity			44,372.87				54,743.00				10,370.13-				.19	-			131,214.76				151,979.00				20,764.24-				.14-
Other																							850.00				850.00-				1.00-
Total Buildings			75,621.11				100,843.00				25,221.89-				.25	-			241,896.84				298,579.00				56,682.16-				.19-
66200 Security
Contract Labor			12,988.83				15,989.00				3,000.17-				.19	-			38,966.49				43,967.00				5,000.51-				.11-
Materials and Supplies																			166.73				7,800.00				7,633.27-				.98-
Other			968.39				1,100.00				131.61-				.12	-			2,723.41				3,340.00				576.59-				.17-
Total Security			13,957.22				17,039.00				3,131.78-				.18	-			41,856.63				55,067.00				13,210.37-				.24-
69100 Lands Department
Supervisor Labor (Fringe & Tax)			30,518.56				26,198.00				4,320.56				.16				82,011.80				78,594.10				3,417.80				.04
Materials and Supplies			235.00				100.00				135.00				1.35				267.00				2,500.00				2,233.00-				.89-
Legal			1,939.73				2,000.00				60.27-				.03	-			3,017.22				6,000.00				2,982.78-				.50-
Other			341.78				250.00				91.78				.37				1,309.52				1,060.00				249.52				.24
Total Lands Department			33,035.07				28,548.00				4,487.07				.16				86,605.54				88,154.00				1,548.46-				.02-
69200 Lease rentals / Mineral
Other			593.56				594.00				.44-				0.00				2,094.36				2,095.00				.64-				0.00
Total Lease rentals / Mineral			593.56				594.00				.44-				0.00				2,094.36				2,095.00				.64-				0.00
69300 Lease rentals / Surface
Other																			6,717.74				9,974.00				3,256.26-				.33-
Total Lease rentals / Surface																			6,717.74				9,974.00				3,256.26-				.33-
69500 Adv Royalties non recoup
Other			110,717.79				110,718.00				.21-				0.00				314,413.20				314,413.00				.20				0.00

		Xxxxxxxxxxxx Coal Company		Page – 10
		Cost By Sub by Cat Code
		As of 31

		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
Total Adv. Royalties non recoup			110,717.79				110,718.00				.21-				0.00				314,413.20				314,413.00				.20				0.00
00000 Xxxxx xx Xxx Cost
Other																			500.00				500.00
Total Right of Way Cost																			500.00				500.00
69800 Filing fees
Other			60.00								60.00								99.00								99.00
Total Filing Fees			60.00								60.00								99.00								99.00
70120 Federal Reclamation
Other			53,745.10				44,200.00				9,545.10				.22				169,836.30				148,700.00				21,136.30				.14
Total Federal Reclamation			53,745.10				44,200.00				9,545.10				.22				169,836.30				148,700.00				21,136.30				.14
70160 Sales Taxes
Other			171,474.94				200,000.00				28,525.06-				.14-				295,809.71				600,000.00				304,190.29-				.51-
Total Sales Taxes			171,474.94				200,000.00				28,525.06-				.14-				295,609.71				600,000.00				304,190.29-				.51-
70230 Royalties Private
Other			105,328.05				143,901.00				38,572.95-				.27-				386,707.18				417,041.00				30,333.82-				.07-
Total Royalties Private			105,328.05				143,901.00				38,572.95-				.27-				386,707.18				417,041.00				30,333.82-				.07-
70231 Royalties Private
Other			66,469.40-								66,469.40-								66,469.40-								66,469.40-
Total Royalties Private			66,469.40-								66,469.40-								66,469.40-								66,469.00-
70240 Overriding Royalties
Other			108,181.70				55,080.00				53,101.70				.96				340,788.80				286,480.00				54,308.80				.19
Total Overriding Royalties			108,181.70				55,080.00				55,101.70				.96				340,788.80				286,480.00				54,308.80				.19
70300 Property Taxes
Other			27,532.84				37,500.00				9,967.16-				.27-				109,998.64				112,500.00				2,501.36-				.02-
Total Property Taxes			27,532.84				37,500.00				9,967.16-				.27-				109,998.64				112,500.00				2,501.36-				.00-

		Xxxxxxxxxxxx Coal Company		Page – 11
		Cost By Sub by Cat Code
		As of 31

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		Current				Current
		Months				Months				Budget				%				YTD				YTD				Budget				%
Description		Actuals				Budgets				Variance				Variance				Actuals				Budgets				Variance				Variance
120110 XX
00   Hourly Labor (Fringe & Tax)							1,347.00				1,347.00-				1.00-				175.00				4,041.00				3,866.00-				.96-
04   Supervisor Labor (Fringe & Tax)			26,754.23				24,245.00				2,509.23				.10				78,395.08				72,735.00				5,660.08				.08
24   Materials and Supplies							450.00				450.00-				1.00-				463.45				1,350.00				880.55-				.66-
54   Legal			14,565.06-				6,000.00				20,565.06-				3.43-				20,412.47				18,000.00				2,412.47				.13
55   Outside Services			4,130.00				6,130.00				2,000.00-				.33-				7,524.94				18,390.00				10,865.06-				.59-
80   Other			4,484.42				4,351.00				133.42				.03				7,016.30				13,713.00				6,696.70-				.49-
			20,803.59				42,523.00				21,719.41-				.51-				113,987.24				128,229.00				14,241.76-				.11-
120115 IT
04   Supervisor Labor (Fringe & Tax)			24,847.99				21,283.00				3,564.99				.17				64,727.62				63,849.00				878.62				.01
16   Equipment Rental/Lease
24   Materials and Supplies			627.49				9,858.00				9,230.51-				.94-				46,034.73				61,626.00				15,391.27-				.25-
55   Outside Services			904.89				102,313.00				101,408.11-				.99-				25,770.00				160,727.00				134,957.00-