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8 Southern California Edison Company Tariff Title: Transmission Owner Tariff Tariff Record Title: Service Agreement No. 92 FERC FPA Electric Tariff ENGINEERING, DESIGN AND PROCUREMENT LETTER AGREEMENT BETWEEN AV SOLAR RANCH 1, LLC AND SOUTHERN CALIFORNIA EDISON COMPANY AV SOLAR RANCH ONE PROJECT Contract Effective Date: Tariff Record Proposed Effective Date: Version Number: TOT345 Option Code: A

9 November 19, 2010 AV Solar Ranch 1, LLC 353 Sacramento Street, Suite 2100 San Francisco, CA Attn: Frank De Rosa Re: Engineering, Design and Procurement Letter Agreement for the AV Solar Ranch One Project Dear Mr. De Rosa: AV Solar Ranch 1, LLC ( AV Solar ) proposes to construct a 250 MW solar photovoltaic generation facility to be located in Kern County, California (the AV Solar Ranch One Project ), and interconnect the AV Solar Ranch One Project to Southern California Edison Company s ( SCE ) new Whirlwind Substation via a generation tie-line for the purpose of delivering Energy and/or Ancillary Services to the California Independent System Operator ( CAISO ) Controlled Grid. A Phase II Interconnection Study report containing the scope of work, estimated cost and estimated completion schedule for the Participating TO s Interconnection Facilities and Participating TO s Reliability Network Upgrades was completed for the AV Solar Ranch One Project, and tendered to AV Solar by the CAISO, on July 8, All capitalized terms used herein, and not otherwise defined, shall have the meaning ascribed to that term in the CAISO Tariff. AV Solar and SCE are hereinafter sometimes referred to individually as Party and collectively as Parties. SCE and AV Solar intend to execute a Large Generator Interconnection Agreement ( LGIA ) to provide for the interconnection of the AV Solar Ranch One Project. SCE has begun construction of the Whirlwind Substation, a new 500/220 kv substation which includes a 220kV switchyard with positions 1 though 4. The Parties agree that construction of this portion of the Whirlwind Substation must be coordinated with the work done pursuant to this Agreement on the Whirlwind Substation Expansion (consisting of 220 kv positions 5 though 17, one of which will be used to interconnect the AV Solar Ranch One Project), since positions 1 through 4 must be in service to allow for positions 5 though 17 to be placed in service. AV Solar originally requested an In-Service Date of January 1, 2011, but due to delays in the construction of SCE s Whirlwind Substation, AV Solar has deferred the targeted In-Service Date to March 1, SCE currently estimates that Whirlwind Substation will be in service by Page - 1 -

10 May 3, 2012, and that the Whirlwind Substation Expansion will be completed soon thereafter. Thus, AV Solar has requested that SCE complete the Participating TO s Interconnection Facilities and Participating TO s Reliability Network Upgrades necessary to support AV Solar s requested In-Service Date of May 3, SCE estimates that the in-service date of the Participating TO s Interconnection Facilities and Reliability Network Upgrades necessary for Interconnection Customer to interconnect to the Whirlwind Substation is within twenty-one months after execution by all parties of the LGIA. In the interest of timely completion of the Participating TO s Interconnection Facilities and Participating TO s Reliability Network Upgrades, the Parties enter into this letter agreement ("Agreement") to agree upon an interim arrangement pursuant to which SCE will, as soon as practicable, perform the engineering and design of, and procurement of material and equipment for, the Participating TO s Interconnection Facilities and the Participating TO s Reliability Network Upgrades specified in Exhibit A, as follows: 1. SCE will perform the engineering and design of, and procurement of material and equipment for, the Participating TO s Interconnection Facilities and Participating TO s Reliability Network Upgrades as specified in Exhibit A hereto. 2. AV Solar shall pay all of SCE s actual charges and expenses for the engineering and design of, and procurement of material and equipment for, the Participating TO s Interconnection Facilities and the Participating TO s Reliability Network Upgrades specified in Exhibit A. The charges and expenses incurred pursuant to this Agreement shall include, without limitation, SCE s costs of SCE employees and contractors, including all related overheads. Such charges and expenses are estimated to be $6,372,600, as identified in Exhibit B hereto. SCE estimates the income tax liability associated with such charges and expenses to be $480,410, as shown in Exhibit B. 3. Payments a. Upon execution of this Agreement, AV Solar shall initially pay to SCE a deposit of $2,842,600 ( Initial Deposit ) for SCE to commence work under the terms of this Agreement. AV Solar shall make additional payments to continue the work, in accordance with the schedule set forth in Exhibit C of this Agreement. The payments are to be paid quarterly in advance for charges and expenses SCE believes it will incur during the following quarter. The Initial Deposit and payments shall be applied exclusively toward SCE s charges and expenses incurred under this Agreement. Additionally, AV Solar shall post security to secure for any potential tax liability (the Tax Security Instrument ) in a form acceptable to SCE, in accordance with Section 9 herein and the schedule attached as Exhibit C hereto. Unless otherwise agreed in writing, this Tax Security Instrument shall be a letter of credit which AV Solar shall amend to increase the amount posted in accordance with the schedule attached as Page - 2 -

11 Exhibit C hereto. b. In accordance with the requirements of the CAISO Large Generator Interconnection Procedures ( LGIP ), AV Solar is required to maintain Interconnection Financial Security pursuant to LGIP Section 9.4. The Parties agree that the Initial Deposit and the additional payments made under this Agreement will be considered an acceptable form of security towards satisfying AV Solar s Interconnection Financial Security requirements under the LGIP. Therefore, upon receipt of the Initial Deposit and as any additional payments are made, SCE agrees to reduce any existing letter of credit posted by AV Solar as Interconnection Financial Security by an amount equal to the payments made under this Agreement. The amounts from each of the Initial Deposit and the additional payments to be applied as the Interconnection Financial Security for Participating TO s Interconnection Facilities and for Network Upgrades are shown in Exhibit C. The Parties also agree that, pursuant to LGIP Sections and , any amounts posted as Interconnection Financial Security for Network Upgrades or Participating TO s Interconnection Facilities is an acceptable form of collateral for securing AV Solar s obligations under this Agreement. c. If AV Solar does not make any of the payments or provide a Tax Security Instrument in the required amount by the due dates specified in Exhibit C of this Agreement, SCE shall tender a cure notice to AV Solar of such non-payment or failure to provide a Tax Security Instrument in the proper amount and a final deadline for making such payment or providing a Tax Security Instrument in the proper amount, which shall be fifteen (15) Business Days from the receipt of the notice. Subject to the foregoing sentence, if AV Solar does not pay the amounts and provide the Tax Security Instrument in the proper amount by the due dates specified in this Agreement, SCE may immediately draw upon any letter of credit posted as Interconnection Financial Security any amounts due, but not yet paid under this Agreement. If the amounts of the existing letters of credit are insufficient, upon written notice by SCE to AV Solar, SCE may stop work and terminate this Agreement, subject to acceptance or approval by FERC. d. SCE shall notify AV Solar in writing within a reasonable time if SCE learns that charges and expenses are likely to exceed the total estimated cost set forth in Exhibit B, which notification shall provide updated cost estimates in the form of Exhibit B and a new payment schedule in the form of Exhibit C. In such notification, SCE shall specify any additional payment amounts required to be paid by AV Solar and the amount by which the payments and Tax Security Instrument postings shall be increased for SCE to continue work under the terms of this Agreement. Upon agreement by both Parties, AV Solar shall pay any additional payment amounts and amend the Tax Security Instrument to conform with the revised Exhibit B and revised Exhibit C, subject to acceptance or approval by FERC. Page - 3 -

12 If AV Solar does not pay any additional payment amounts within thirty (30) calendar days of receipt of notification, AV Solar agrees that SCE will be entitled to immediately draw upon Interconnection Financial Security to the extent that SCE s estimated costs for the following ninety (90) calendar days exceed AV Solar s payments for the following ninety (90) calendar days. If the amount of the Interconnection Financial Security is insufficient, upon written notice by SCE to AV Solar, SCE may stop work once the Interconnection Financial Security has been exhausted and terminate this Agreement, subject to acceptance or approval by FERC. 4. SCE shall use commercially reasonable efforts to complete the engineering and design of, and procurement of materials and equipment for, the Participating TO s Interconnection Facilities and Participating TO s Reliability Network Upgrades in accordance with Good Utility Practice within nine (9) months of the Effective Date (as defined in Section 21 of this Agreement) and on a schedule which is intended to allow for completion of construction of the Participating TO s Interconnection Facilities and Participating TO s Reliability Network Upgrades by the time Whirlwind Substation commences operation; however, SCE does not warrant that such work will be completed within such time. AV Solar understands and acknowledges that such date is only an estimate and that various events could delay the actual completion of the engineering and design of, and procurement of materials and equipment for, the Participating TO s Interconnection Facilities and Participating TO s Reliability Network Upgrades. SCE shall not be liable for any cost or damage incurred by AV Solar because of any delay in the work provided for in this Agreement. On or before the last day of each month, SCE shall provide an update to AV Solar on the status and estimated completion date of its work under this Agreement. 5. SCE and AV Solar intend to enter into an LGIA that will state the terms for payment of SCE's costs incurred for performing the work included in this Agreement. AV Solar s Initial Deposit and additional payments under the terms of this Agreement shall be credited to amounts due under the LGIA. AV Solar and SCE understand that the AV Solar Ranch One Project is a Transition Cluster project subject to the Large Generator Interconnection Procedures for Clusters, Appendix Y of the CAISO Tariff; and as such, the costs of certain Participating TO s Reliability Network Upgrades have been allocated in the Phase II Interconnection Study to both AV Solar and other members of the Transition Cluster in accordance with the requirements of the LGIP. AV Solar and SCE further understand that Exhibit A sets forth Participating TO s Reliability Network Upgrades identified in the Phase II Interconnection Study which AV Solar will fund pursuant to this Letter Agreement. Exhibit B shows AV Solar s allocated share of the costs of these Participating TO s Reliability Network Upgrades. Exhibit B also sets forth additional costs that AV Solar will fund pursuant to this Letter Agreement for facilities in addition to AV Solar s allocated share of these Participating TO s Reliability Network Upgrades ( Additional Facilities ), such as for shares of the Participating TO s Reliability Network Upgrades allocated to other members of the Transition Cluster and for other Participating TO s Page - 4 -

13 Reliability Network Upgrades that have been assigned to members of the Serial Group, which preceded the Transition Cluster. If SCE enters into an agreement with a third party under which the third party is to pay for some or all of the Additional Facilities, then SCE shall credit AV Solar for any payments AV Solar has made for the Additional Facilities under this Agreement as SCE is paid for the Additional Facilities by the third party. In any event, AV Solar shall pay no more than $5,000,000 for the cost of the Participating TO s Reliability Network Upgrades under this Agreement. SCE shall apply credit for payments made under this Agreement toward the amount AV Solar is required to finance by LGIP Section (b) as set forth in the Phase II Interconnection Study, provided, however, that the amount of the credit will be reduced by the amount of any reimbursement provided to AV Solar for payments made under this Agreement. Upon termination of this Agreement, if the payments made under this Agreement for Participating TO s Reliability Network Upgrades plus the security posted by AV Solar for Network Upgrades exceed AV Solar s Interconnection Financial Security obligations for Network Upgrades, SCE shall reimburse the amount in excess within thirty (30) calendar days after termination of this Agreement. 6. Subject to Section 7 below, this Agreement shall terminate upon the earliest of the following to occur: (i) notice that this Agreement is not accepted for filing by FERC; (ii) acceptance by FERC of the LGIA as filed or, if FERC conditions acceptance upon making a compliance filing, upon acceptance by FERC of the compliance filing; (iii) written notice of termination from AV Solar to SCE at any time; or (iv) written notice of termination by SCE and acceptance of said notice by FERC, pursuant to Section 3 of this Agreement. In the event that AV Solar terminates this Agreement pursuant to this Section 6; such termination will become effective two (2) business days after SCE s receipt of AV Solar s notice of termination. 7. AV Solar s obligations to pay charges and expenses incurred or irrevocably committed to be incurred pursuant to this Agreement as of the termination date of this Agreement and SCE s obligations to provide credit or reimbursement shall survive termination of this Agreement, except insofar as payment of such charges and expenses is provided for in an LGIA that is accepted for filing by FERC and becomes effective. In the event of termination of this Agreement in the absence of an effective LGIA between the Parties, SCE shall submit an invoice to AV Solar for all incurred and irrevocably committed to be incurred unpaid charges and expenses as soon as reasonably practicable but within twelve (12) months from the date of termination of this Agreement. AV Solar shall have the same audit rights as would be afforded under Article 25 of the pro forma LGIA (currently Appendix Z of the CAISO Tariff) ( Pro Forma LGIA ). a. In the event that AV Solar s Initial Deposit and payments in accordance with Section 3 of this Agreement exceed the amount of SCE s charges and expenses incurred or irrevocably committed to be incurred pursuant to this Agreement, SCE shall return the excess amount to AV Solar, without interest, within thirty (30) calendar days after Page - 5 -

14 the date of the invoice provided in accordance with this Section 7 hereof, without offset for any amount which may be in dispute. In the event of any such dispute, the Parties shall promptly meet and attempt in good faith to resolve the dispute. In the event the Parties determine that AV Solar did not owe SCE the full amount paid, then SCE shall refund to AV Solar, without interest, the amount overpaid by AV Solar within thirty (30) calendar days of such determination. b. In the event that AV Solar s Initial Deposit and payments in accordance with Section 3 of this Agreement are less than the amount of SCE s charges and expenses incurred or irrevocably committed to be incurred pursuant to this Agreement, then AV Solar shall pay the difference, without interest, as reflected in the invoice, within thirty (30) calendar days of receipt of the invoice provided in accordance with this Section 7 hereof, without offset for any amount which may be in dispute. In the event of any such dispute, the Parties shall promptly meet and attempt in good faith to resolve the dispute. In the event the Parties determine that AV Solar did not owe SCE the full amount paid, then SCE shall refund to AV Solar, without interest, the amount overpaid by AV Solar within thirty (30) calendar days of such determination. c. With respect to the Participating TO s Interconnection Facilities, upon termination of this Agreement, SCE shall to the extent possible and with AV Solar's authorization cancel any pending orders of, or return, any materials or equipment for such facilities; provided that in the event AV Solar elects not to authorize such cancellation, AV Solar shall assume all payment obligations with respect to such material and equipment and SCE shall deliver such materials and equipment to AV Solar as soon as practicable, at AV Solar s expense. To the extent that AV Solar has already paid SCE for any or all such costs of materials or equipment not taken by AV Solar, SCE shall promptly refund such amounts to AV Solar, less any costs, including penalties, incurred by SCE to cancel any pending orders of or return such materials and equipment. SCE may, at its option, retain any portion of such materials, equipment or facilities that AV Solar chooses not to accept delivery of, in which case SCE shall be responsible for all costs associated with procuring such materials, equipment or facilities. d. In the event that AV Solar and SCE enter into an LGIA subsequent to the termination of this Agreement, then any applicable work product generated by SCE and any associated payments made by AV Solar pursuant to this Agreement not already credited or refunded shall be reflected in the scope of, and the amount due under, such LGIA. 8. For the purposes of this Agreement, Force Majeure shall mean any act of God, labor disturbance, act of the public enemy, war, insurrection, riot, fire, storm or flood, explosion, breakage or accident to machinery or equipment, any order, regulation or restriction imposed by governmental, military or lawfully established civilian authorities, or any other cause beyond a Party s control. A Force Majeure event does not include acts of negligence or intentional wrongdoing by the Party claiming Force Majeure. Economic hardship is not considered a Force Majeure event. Page - 6 -

15 9. The Parties intend that the Initial Deposit and payments made by AV Solar to SCE under this Agreement for the Participating TO s Interconnection Facilities and Participating TO s Reliability Network Upgrades shall be non-taxable, either as contributions to capital or as a refundable advance, in accordance with the Internal Revenue Code and any applicable state income tax laws, and shall not be taxable as contributions in aid of construction or otherwise under the Internal Revenue Code and any applicable state income tax laws. AV Solar shall provide a Tax Security Instrument for payment of possible tax obligations in the manner provided for in Paragraph 2 and Section of the Pro Forma LGIA. The obligation to post a Tax Security Instrument pursuant to this Agreement may be superseded by provisions of the LGIA. 10. No Party shall be considered to be in Default with respect to any obligation hereunder, other than the obligation to pay money when due, if prevented from fulfilling such obligation by Force Majeure. For the purposes of this Agreement, Default shall mean the failure of a breaching Party to cure its breach. A Party unable to fulfill any obligation hereunder (other than an obligation to pay money when due) by reason of Force Majeure shall give notice and the full particulars of such Force Majeure to the other Party in writing or by telephone as soon as reasonably possible after the occurrence of the cause relied upon. Telephone notices given pursuant to this Section shall be confirmed in writing as soon as reasonably possible and shall specifically state full particulars of the Force Majeure, the time and date when the Force Majeure occurred and when the Force Majeure is reasonably expected to cease. The Party affected shall exercise due diligence to remove such disability with reasonable dispatch, but shall not be required to accede or agree to any provision not satisfactory to it in order to settle and terminate a strike or other labor disturbance. 11. Each Party shall at all times indemnify, defend and hold the other Party harmless, from any and all Losses arising out of or resulting from the other Party s action or inactions of its obligations under this Agreement on behalf of the indemnifying Party, except in cases of gross negligence or intentional wrongdoing by the indemnified Party. For the purposes of this Agreement, Losses shall mean any and all damages, losses, and claims, including claims and actions relating to injury to or death of any person or damage to property, demand, suits, recoveries, costs and expenses, court costs, attorney fees, and all other obligations by or to third parties. 12. In no event shall any Party be liable under any provision of this Agreement for any losses, damages, costs or expenses for any special, indirect, incidental, consequential, or punitive damages, including but not limited to loss of profit or revenue, loss of the use of equipment, cost of capital, cost of temporary equipment or services, whether based in whole or in part in contract, in tort, including negligence, strict liability, or any other theory of liability; provided, however, that damages for which a Party may be liable to another Party under another agreement will not be considered to be special, indirect, Page - 7 -

16 incidental, or consequential damages hereunder. 13. This Agreement constitutes the complete and final expression of the agreement between the Parties and is intended as a complete and exclusive statement of the terms of their agreement which supersedes all prior and contemporaneous offers, promises, representations, negotiations, discussions, communications, and other agreements which may have been made in connection with the subject matter of this Agreement. Nothing in this Agreement is intended or shall be deemed to require SCE or AV Solar to enter into any other agreement, including without limitation, any interconnection agreement. 14. Any waiver at any time by either Party of its rights with respect to a default under this Agreement, or with respect to any other matter arising from this Agreement, shall not be deemed a waiver with respect to any subsequent default or other matter arising in connection therewith. Any delay, with the exception of the statutory period of limitation in assessing or enforcing any right, shall not be deemed a waiver of such right. 15. The covenants, obligations, and liabilities of the Parties are intended to be several and not joint or collective, and nothing contained in this Agreement shall ever be construed to create an association, joint venture, trust or partnership, or to impose a trust or partnership covenant, obligation, or liability on or with regard to either Party. Each Party shall be individually responsible for its own covenants, obligations, and liabilities as provided in this Agreement. Neither Party shall be under the control of the other Party. Neither Party shall be the agent of or have a right or power to bind the other Party without such other Party s express written consent. 16. The Parties do not intend to create rights in, or to grant remedies to, any third party as a beneficiary either of this Agreement or of any duty, covenant, obligation, or undertaking established herein. 17. This Agreement shall be interpreted by and in accordance with the laws of the State of California, without regard to the principles of conflict of laws thereof, or the laws of the United States, as applicable, as if executed and to be performed wholly within the United States. 18. This Agreement shall be binding upon the Parties and their successors and assigns. Either Party may assign this Agreement subject to the conditions set forth in Article 19 of the Large Generator Interconnection Agreement. 19. SCE will file this Agreement for acceptance by FERC. Upon request by SCE, AV Solar shall support acceptance of this Agreement as filed, including waiver of any necessary filing and notice requirements. Such support shall include a written statement of concurrence with such filing, if requested by SCE. 20. Ambiguities or uncertainties in the wording of this Agreement shall not be construed for or against any Party, but shall be construed in the manner that most accurately reflects the Page - 8 -

17 Parties intent as of the date they executed this Agreement. 21. This Agreement shall become effective on the date the Agreement is fully executed by both Parties and the Initial Deposit pursuant to Section 3 of this Agreement is received by SCE ("Effective Date"). If SCE does not receive the fully executed Agreement and Initial Deposit within thirty (30) calendar days of AV Solar s receipt of this Agreement, then the offer reflected in this Agreement will expire and this Agreement will be of no effect. 22. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. SOUTHERN CALIFORNIA EDISON COMPANY By /s/ David L. Mead David Mead Vice President of Engineering and Technical Services Agreed to this 19th day of November, 2010 AV SOLAR RANCH 1, LLC By /s/ Frank De Rosa Name: Frank De Rosa Title: President Agreed to this 22nd day of November, 2010 Page - 9 -

18 EXHIBIT A DESCRIPTION SUMMARY FOR ENGINEERING, DESIGN AND PROCUREMENT WORK Description of Work: The engineering, design and procurement work to be performed under this Agreement are for the following Participating TO s Interconnection Facilities and Participating TO s Reliability Network Upgrades to accommodate the AV Solar Ranch One Project: Transmission (Participating TO s Interconnection Facilities): AV Solar One-Whirlwind 220 kv Transmission Line One 220 kv dead-end structure, two spans of conductors and OPGW and twelve dead end insulator / hardware assemblies between the last AV Solar owned structure on the AV Solar One-Whirlwind 220 kv Transmission Line and the Whirlwind Substation s dead-end rack at the 220 kv switchyard. Whirlwind Substation Line Drop (Participating TO s Interconnection Facilities) A new 220 kv switchrack position to terminate the AV Solar Ranch One Project s 220 kv generation tie-line. This work includes: (a) One 65 ft. high by 50 ft. wide dead-end structure (b) Three 0.003MDF coupling capacitor voltage transformers with steel pedestal support structures (c) Three 60 ft. line tie-downs with KCMIL ACSR conductors Protection relays as follows: (a) One GE L90 line current differential relay with telecommunications channel to the Generating Facility via the AV Solar One-Whirlwind 220 kv Transmission Line s OPGW (b) One SEL-311L line current differential relay Whirlwind Substation Line Position (Plan of Service Participating TO s Reliability Network Upgrades) One 220 kv position at Whirlwind Substation to be equipped to terminate the gen-tie, including the following equipment at the 220 kv Switchyard: (a) One 80 foot high by 45 foot wide dead-end structure (b) Two 3000 A 63 ka circuit breakers (c) Four 3000 A 80 ka horizontal-mounted group-operated disconnect switches (d) One grounding switch attachments (for lines grounding) (e) Two GE C60 relays (f) Eighteen bus supports with associated steel pedestal Page

19 Whirlwind Substation - Extend the 220kV Bus (Positions 5-8) (Additional Participating TO s Reliability Network Upgrades) Expansion of the bus four (4) positions to the east with includes the following equipment: (a) Two (2) 45 foot high by 45 foot wide bus dead-end structures and foundations. (b) One (1) 210 foot segment of north bus equipped with KCMIL ACSR conductors per phase (c) One (1) 210 foot segment of south bus equipped with KCMIL ACSR conductors per phase (d) Extend the three cable trenches 250 feet to the east Whirlwind Substation - Extend the 220kV Bus (Positions 9-17) (16.13% Assigned Share of Participating TO s Reliability Network Upgrades 1 ) Expansion of the bus eight (8) additional positions to the east which includes the following equipment: (a) Six (6) 45 foot high by 45 foot wide bus dead-end structures and foundations. (b) Forty-eight (48) bus dead end insulator assemblies. (c) Two (2) 210 foot segments of north bus equipped with KCMIL ACSR conductors per phase (approximately 2,600 feet total length) (d) Two (2) 210 foot segments of south bus equipped with KCMIL ACSR conductors per phase (approximately 2,600 feet total length) (e) Two (2) 230 kv, 3000 A, 63 ka sectionalizing circuit breakers and foundations. (f) Four (4) sets of 230 kv, 3000 A disconnect switches with support structures (one on each side of the sectionalizing circuit breakers) (g) Extension of the three cable trenches 500 feet to the east (approximately 1,500 feet of cable trench) (h) Two GE C60 relays Telecommunications (100% Assigned Share of Participating TO s Reliability Network Upgrades) All required light-wave, channel and related terminal equipment to support the SPS. Power Systems Control (Participating TO s Reliability Network Upgrades) Relay protection status alarms. Power Systems Control (Participating TO s Interconnection Facilities) 1 The allocation percentages provided for the assigned share of the Participating TO s Reliability Network Upgrades are those provided in the Phase II Interconnection Study report. Page

20 ne (1) RTU at the AV Solar Ranch One Project to monitor the customer s generation data such as low side MW, MVAR, kv, circuit breaker status, auxiliary load MW and MVAR. Corporate Environment, Health and Safety (Participating TO s Interconnection Facilities) Review the Draft Environmental Impact Report and Final Environmental Impact Report in order to identify the extent of SCE scope of work and impact analysis incorporated into the document and identify applicable mitigation measures. Review California Natural Diversity Data Base maps for biological resources and Record Search for Cultural Resources, and conduct a site visit to identify potential overrides. Identify California Public Utilities Commission Licensing requirements for SCE scope of work Licensing (Participating TO s Interconnection Facilities) Perform all required activities related to the SCE portion of the AV Solar Ranch One Project gen-tie line and telecom route. Page

21 Element AV Solar One-Whirlwind 220 kv Transmission Line Whirlwind Substation Line Drop Whirlwind Substation Line Position (Plan of Service Upgrade) EXHIBIT B ESTIMATED COST SUMMARY FOR ENGINEERING, DESIGN AND PROCUREMENT WORK Estimated Participating TO s Interconnecti on Facilities Cost Estimated Assigned Participating TO s Reliability Network Upgrades Cost Estimated Additional Participating TO s Reliability Network Upgrades Cost Estimated Engineering, Design & Procurement Cost Estimated Tax Liability (1) $884,000 $703,600 $246,260 $699,000 $550,000 $192,500 $2,661,000 $1,649,000 Whirlwind Substation - Extend the 220kV Bus $610,000 $250,000 (Positions 5-8) (2) Whirlwind Substation - Extend the 220kV Bus (Positions 9-17) $688,000 $3,577,000 $2,986,000 Telecommunications $150,000 $100,000 Environmental Health and Safety (limited scope) $1,485,000 $50,000 $17,500 Power Systems Control (Participating TO s Interconnection Facilities) $87,000 $69,000 $24,150 Power Systems Control (Network Upgrades) $26,000 $15,000 Total Cost $6,372,600 $480,410 (1) The estimated tax liability is based on a tax rate of 35% of the payments under this Agreement regarding Participating TO s Interconnection Facilities only. (2) These upgrades are assigned to project in the CAISO s interconnection queue ahead of the Transition Cluster. AV Solar s share of these costs under the LGIA will be 0.0%. Page

22 EXHIBIT C SCHEDULE FOR INITIAL DEPOSIT AND PAYMENTS AND POSTING OF TAX SECURITY Period Initial Deposit and Payments for Participating TO s Interconnection Facilities Initial Deposit and Payments for Participating TO s Reliability Network Upgrades Combined Initial Deposit and Payment Amounts Tax Security Posting Amounts 1 $592,600 $2,250,000 $2,842,600 $207,410 Due Date for Initial Deposit and Payments and Tax Security Postings With return of the executed Agreement 2 $400,000 $1,500,000 $1,900,000 $140,000 February 1, $380,000 $1,250,000 $1,630,000 $133,000 May 1, 2011 Total $1,372,600 $5,000,000 $6,372,600 $480,410 Page