Section 4. DWR Revenues; Remittance of DWR Revenues.

4.1. DWR Revenues.

DWR Revenues required to be remitted to DWR under this Servicing Order shall be based upon DWR Charges in effect from time to time pursuant to Applicable Law and Attachments B and H hereto. Upon the Operating Order Effective Date, DWR Surplus Energy Sales Revenues shall be remitted based upon the terms of Attachment J hereto and consistent with the principles set forth in Exhibit C of the Operating Order.

4.2. Remittance of DWR Revenues.

Payment of Imbalance Energy remittances shall be made in accordance with Attachment I. On and after the Collection Curve Implementation Date, all DWR Revenues, including DWR Revenues attributable to Imbalance Energy and DWR Surplus Energy Sales Revenues, shall be held by Utility in trust for DWR (whether or not held together with other monies) and shall be remitted to DWR when due hereunder, all as set forth below and as further provided in Attachment B and Attachment J hereto.

On and after the Operating Order Effective Date, the immediately preceding paragraph shall no longer be in effect and payment of Imbalance Energy remittances shall be governed by the terms of the Operating Order; provided, however, all DWR Revenues shall continue to be held by Utility in trust for DWR (whether or not held together with other monies) and shall be remitted to DWR when due hereunder, all as set forth below and as further provided in Attachment B and Attachment J hereto.

(a) Within one Business Day after the Effective Date, Utility shall determine the Daily Remittance Amount, consisting of Power Charges in the manner set forth in Attachment B hereto and Bond Charges and other amounts authorized to be collected pursuant to Applicable Law in a manner consistent with Applicable Law (the "Daily Remittance Amount"). On the day of such determination (the "Initial Remittance Date"), Utility shall remit to DWR or its Assign(s) the Daily Remittance Amount, if any, for each day from the Effective Date up to and including the Initial Remittance Date. On each subsequent Business Day during the remainder of the Term, Utility shall determine and remit to DWR or its Assign(s) the Daily Remittance Amount for such Business Day. If the Utility determines that it has remitted amounts to DWR in error, Utility may provide notice of such event to DWR (accompanied by an explanation of the facts surrounding such erroneous deposit), and DWR agrees to review such notice and information as soon as practicable and promptly repay such funds if and to the extent DWR agrees with Utility, such agreement not to be unreasonably withheld or delayed.

(b) Each Remittance shall be accompanied by a written report substantially in the form of that set forth in Attachment C-1 hereto (the "Daily Remittance Report"). Utility will not be required at any time to advance or pay any of its own funds in the fulfillment of its responsibilities hereunder with respect to DWR Charges, except to the extent provided otherwise in the Attachments hereto.

(c) Utility, from time to time, will make adjustments regarding amounts remitted as described in Attachment B hereto. In addition, monthly reconciliation reports, as described in Attachments C-2 and C-3 hereto, shall be filed with DWR by Utility.

(d) Except as expressly provided in this Servicing Order (including the Attachments hereto), Utility shall not deduct from amounts due to DWR hereunder any amounts owing by DWR to Utility which relate to arrangements within or outside the scope of this Servicing Order , or any other amounts, and Utility expressly waives any right to do so. The foregoing shall not limit Utility's rights to seek any other remedies permitted under other arrangements with DWR.

(e) The Parties recognize that prior to June 1, 2001, Utility remitted DWR Charges to DWR based upon the interim remittance methodologies described in Decision 01-03-081, adopted by the Commission on March 27, 2001, and Decision 01-05-064, adopted by the Commission on May 15, 2001 (collectively the "Interim Remittance Methodologies"). Beginning on June 1, 2001, Utility remitted DWR Charges to DWR based on the "more precise billing methodology" referred to Decision 02-05-048 adopted on May 16, 2002 ("Original Servicing Order") and Attachment B attached thereto ("More Precise Remittance Methodology"). Utility shall remit pursuant to the More Precise Remittance Methodology at the time and in the manner set forth in Attachment B of the Original Servicing Order, and, on and after the Operating Order Effective Date, shall remit amounts to DWR pursuant to the post-transition remittance methodology as further described in Attachment B of this Agreement ("Post-Transition Remittance Methodology").

On and after the Operating Order Effective Date, the DWR Surplus Energy Sales Revenues shall be determined consistent with the Contract Allocation Order and pursuant to Attachment J hereto and Exhibit C of the Operating Order.

(f) On the first business day after the 20th of the month following each delivery month after the Operating Order Effective Date, Utility shall calculate and remit to DWR the Preliminary Monthly Surplus Energy Sales Revenues Remittance Amount in the manner set forth in Attachment J hereto (the "Monthly Remittance Amount").

(g) Each Monthly Remittance Amount for surplus Power sold on behalf of DWR shall be accompanied by a written report in a form to be developed by the Parties.

(h) On and after the Operating Order Effective Date, Utility will calculate and remit to DWR the Actual Monthly Surplus Energy Sales Revenues Remittance Amount on or prior to the first Business Day after the due date of the ISO Monthly Final Market Invoice for the delivery month, as set forth in Attachment J hereto. Each Actual Monthly Surplus Energy Sales Revenues Remittance Amount for surplus Power sold by Utility on behalf of DWR shall be accompanied by a written report in a form to be developed by the Parties.

(i) The percentage of Customer usage which is DWR Power shall be determined pursuant to Attachment B hereto, consistent with the Contract Allocation Order and as further provided in Exhibit C of the Operating Order. The percentage of surplus Power sales which is to be allocated to DWR by Utility shall be determined consistent with the Contract Allocation Order, Exhibit C of the Operating Order and Attachment J hereto.

4.3. 20/20 Program.

To the extent that the program established in the California Governor's Executive Order D-30-01, dated March 13, 2001, and Executive Order D-33-01, dated April 26, 2001, as the foregoing orders may be amended, supplemented, extended or otherwise modified (the "20/20 Program"), obligates DWR to make payments or extend credits to Customers or other third parties under such program, Remittances to DWR may be reduced by such payments to the extent of DWR's responsibility as required by Applicable Law and Applicable Tariffs. DWR agrees that Utility's reasonable initial implementation and recurring administrative costs associated with such program shall be paid by DWR in the same manner and at the same times as Utility's Set-Up Fee and Recurring Fees, respectively, as described in Sections 7.2 and 7.3 below. Additionally, Utility will invoice DWR for any other costs incurred by Utility under such program, and DWR agrees to pay such invoices as Additional Charges, in the manner contemplated in Section 7 below. The method for calculating reduced Remittances to DWR under this Section 4.3, as well as Utility's implementation and administration costs, shall be as set forth in Attachment F hereto.