DEFINITIONS

Section 1.01. Definitions. The following terms shall have the respective meanings in this Order:

The following terms, when used herein (and in the attachments hereto) with initial capitalization, shall have the meaning specified in this Section 1.01. Certain additional terms are defined in the attachments hereto. The singular shall include the plural and the masculine shall include the feminine and neuter, and vice versa. "Includes" or "including" shall mean "including without limitation." References to a section or attachment shall mean a section or attachment of this Order, as the case may be, unless the context requires otherwise, and reference to a given agreement or instrument shall be a reference to that agreement or instrument as modified, amended, supplemented or restated through the date as of which such reference is made (except as otherwise specifically provided herein). Unless the context otherwise requires, references to Applicable Laws or Applicable Tariffs shall be deemed references to such laws or tariffs as they may be amended, replaced or restated from time to time. References to the time of day shall be deemed references to such time as measured by prevailing Pacific time.

"Act" means Chapter 4 of Statutes of 2001 (Assembly Bill 1 of the First 2001-02 Extraordinary Session) of the State of California, as amended.

" "Allocated Contracts" means the long-term power purchase agreements operationally allocated to Utility under the Contract Allocation Order, without legal and financial assignment of such agreements to Utility, as provided in Schedule 1 attached hereto.

"Allocated Power" means all power and energy, including the use of such power or energy as ancillary services, delivered or to be delivered under the Contracts.

"Applicable Commission Orders" means such rules, regulations, decisions, opinions or orders as the Commission may lawfully issue or promulgate from time to time, which further define the rights and obligations of the Parties under this Order.

"Applicable Law" means the Act, Applicable Commission Orders and any other applicable statute, constitutional provision, rule, regulation, ordinance, order, decision or code of a Governmental Authority.

"Applicable Tariffs" means Utility's tariffs, including all rules, rates, schedules and preliminary statements, governing electric energy service to Utility's customers in its service territory, as filed with and approved by the Commission and, if applicable, the Federal Energy Regulatory Commission.

"Assign(s)" shall have the meaning set forth in Section 14.01.

"Bonds" shall have the meaning set forth in the Rate Agreement.

"Bond Charges" shall have the meaning set forth in the Rate Agreement.

"Business Day" means the regular Monday through Friday weekdays which are customary working days, excluding holidays, as established by Applicable Tariffs.

"Commission" means the California Public Utilities Commission.

"Confidential Information" shall have the meaning set forth in Section 11.01(c).

"Contracts" means the Allocated Contracts and the Interim Contracts.

"Contract Allocation Order" means Decision 02-09-053 of the Commission, issued on September 19, 2002, as such Decision may be amended or supplemented from time to time by the Commission.

"DWR Power" shall have the same meaning set forth in the Servicing Arrangement with such amendments to incorporate the Settlement Principles for Remittances and Surplus Revenues as provided in Exhibit C of this Order.

"DWR Revenues" means those amounts required to be remitted to DWR by Utility in accordance with this Order and as further provided in the Servicing Arrangement.

"Effective Date" means the effective date in accordance with Section 14.13, as such date is set forth on the cover page hereof.

"Fund" means the Department of Water Resources Electric Power Fund established by Section 80200 of the California Water Code.

"Good Utility Practice" means any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice does not require the optimum practice, method, or act to the exclusion of all others, but rather is intended to include acceptable practices, methods, or acts generally accepted in the Western Electric Coordinating Council region.

"Governmental Authority" means any nation or government, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to a government, including the Commission.

"Governmental Program" means any program or directive established by Applicable Law which directly or indirectly affects the rights or obligations of the Parties under this Order and which obligates or authorizes DWR to make payments or give credits to customers or other third parties under such programs or directives.

"Interim Contract Order" means Decision 02-08-071 of the Commission, issued on August 22, 2002, as such Decision may be amended or supplemented from time to time by the Commission.

"Interim Contracts" mean the power purchase or exchange arrangements between DWR and various Suppliers entered into by DWR at the request of Utility and consistent with the Interim Contract Order, as listed in Schedule 2 attached hereto.

"ISO" means the California Independent System Operator Corporation.

"Order" means Decision 02-12-069 of the Commission, issued on December 19, 2002 as such decision may be amended or supplemented from time to time by the Commission.

"Power Charges" shall have the meaning set forth in the Rate Agreement.

"Priority Long Term Power Contract" shall have the meaning set forth in the Rate Agreement.

"Rate Agreement" means the Rate Agreement between DWR and the Commission adopted by the Commission on February 21, 2001 in Decision 02-02-051.

"Remittance" means a payment by Utility to DWR or its Assign(s) in accordance with the Servicing Arrangement.

"Servicing Arrangement" means the [Amended and Restated] Servicing [Agreement, dated December 19, 2002, between DWR and Utility, as amended] / [Order as specified in the Commission Decision 02-05-048 dated May 16, 2002.]

"Supplier" means those certain third parties who are supplying power pursuant to the Contracts.

"Term" means term provided in Section 2.05 hereof.

"URG" means utility-retained generation, including without limitation Utility's portfolio of generation resources and power purchase agreements prior to or after the Effective Date by Utility.

Section 1.02. Undefined Terms. Capitalized terms not otherwise defined in Section 1.01 herein shall have the meanings set forth in the Act or the Servicing Arrangement.

ARTICLE II