tion law, and particularly pursuant to the act of Congress approved December 21, 1928 (45 Stat. 1057), designated the Boulder Canyon

and depreciation of plant capacity rendered idle because of cessation of generation of such substitute energy until such time as such plant capacity would otherwise have been installed by the lessees, respectively, for their own requirements. If the district and the respective lessees fail to agree on such compensation, such energy shall nevertheless be released to the district, and the disagreement shall be determined in accordance with article thirty-five (35) (a) hereof. Such determination shall include allowance for items of cost, and overhead as specified in this paragraph. Pending such determination, energy so released shall be paid for by the district at the rate for firm energy, but the determination of compensation under article thirty-five (35) (a) hereof shall not be controlled by such rate.

During any year beginning June first, the district shall not use any secondary energy nor any unused State energy, until it has first used, subsequent to June first, next preceding, an amount of firm energy equivalent to one-twelfth of the amount of firm energy it is obligated to take and/or pay for annually multiplied by the number of months elapsed since June first next preceding.

(4) If, due to temporary deficiency in secondary energy regularly used by the district, substitute energy is requested by the district in excess of the energy made available under the foregoing subparagraph (3) (b) the city and/or the company may release so much energy as may be practicable on the same terms as provided in subsection (3) (b) preceding.

D. To the municipalities of Anaheim, Beverly Hills, Burbank, Colton, Fullerton, Glendale, Newport Beach, Pasadena, Riverside, San Bernardino, and Santa Ana (referred to herein as "the municipalities"), six per centum (6%) in all, to be allocated between them as they may agree; but if no agreement is submitted to the Secretary on or before April 15, 1931, the Secretary shall determine the allocation of each.

E. To the City of Los Angeles, thirteen per centum (13%).

F. To Southern California Edison Co. (Ltd.), the Southern Sierras Power Co.. the San Diego Consolidated Gas & Electric Co., and the Los Angeles Gas & Electric Corporation, referred to herein as the companies, nine per centum (9%) in all, division whereof between the companies shall be made according to mutual agreement among them, if possible. If no such agreement is submitted to the Secretary on or before April 15, 1931, the Secretary shall determine the allocation of each.

It is further agreed that—

(1) So much of the energy allocated to the States (thirty-six per centum (36%) of the firm energy) and not in use by them, or, failing their use, by the district for the above purposes, shall be taken and paid for one-half by the city and onehalf by the company.

In addition, all firm energy allocated to the city (thirteen per centum (13%)) shall be taken and paid for by the city.

(11) All of the energy allocated to the municipalities may be contracted for in compliance with regulations of the Secretary, by any one or more of them, as they may agree, on or before April 15, 1931. So much of the energy allocated to the municipalities as is not so contracted for, or, if contracted for, not used by them directly or under contract for municipal purposes and/or distribution to their inhabitants shall be taken and paid for by the city.

(III) So much of the energy allocated to the Southern Sierras Power Co. the San Diego Consolidated Gas & Electric Co., and the Los Angeles Gas & Electric Corporation as is not firmly contracted for by them, severally, in compliance with regulations of the Secretary on or before April 15, 1931, shall be taken and paid for by the company.

(IV) If any allottee is permitted by the United States to divert water from the reservoir at a time when the reservoir is not spilling, in consequence of which the amount of energy, which would have been utilized is diminished, such diminution shall be debited to the allocation of firm energy herein made to such allottee; and charge for the energy equivalent of such diversion shall be made, and the amount of energy which the allottee shall otherwise be obligated to take and pay for hereunder shall be correspondingly reduced.

The reservoir shall be considered as spilling whenever water is being discharged in excess of the amount used for the generation of power, whether such waste occurs over the spillway or otherwise.

150912-33-9

project act, between the United States of America, hereinafter referred to as the United States, acting for this purpose by Ray Lyman

(v) Each of the States of Arizona and Nevada may, from time to time within the period of this lease, contract for energy for use within such State in any amount until the total allocated, respectively, to each is in use as provided above; and may terminate such contract, or contracts, without prejudice to the right to again contract for such energy. All such contracts shall be executed with the Secretary. A contract requiring one thousand (1,000) horsepower (of maximum demand) or less may become effective or be terminated on six months' written notice of requirement of termination given the director by the State; provided, that the notice given shall be two years if in the twelve months preceding said notice of demand the total increment to such States has exceeded five thousand (5,000) horsepower of maximum demand or if in the twelve months preceding said notice of termination the decrement to such State has exceeded five thousand (5,000) horsepower of maximum demand. In all cases the director shall immediately transmit such notice to each lessee. Whenever the amount in use is in excess of five thousand (5,000) horsepower of maximum demand, the lessees respectively shall be compensated for property rendered idle by use of such excess in such amount as the Secretary shall determine to be equitable. Firm energy not contracted for by the States shall be available for use by the district as herein elsewhere provided, and if not in use by the States and/or the district, shall be taken and paid for equally by the two lessees. No right which may be available to a State under section five (5) (c) of the Boulder Canyon project act to execute a firm contract for electrical energy for use within the State shall be impaired by any provision of this lease; but if contract thereunder be executed with the Secretary no provision of this lease shall apply for the benefit of such State. If, in consequence of execution of such contract, the Secretary requires the allocation to either lessee or to an allottee using such lessee's main transmission lines to be diminished, such lessee may terminate its rights and obligations hereunder within two months thereafter on written notice to the Secretary. Provided, further, that the combined allocation of nineteen per centum (19%) as herein made to the city and the municipalities shall not be reduced because of any such firm contract with a State for energy.

Of secondary energy.

It is further agreed that the district shall have the right to purchase and use all secondary energy as provided in article fifteen (15) and article seventeen (17) hereof for the purposes stated in the first paragraph of subdivision (c) of this article. The city and the company shall each have the right to purchase and use one-half of all secondary energy not used by the district. Any such energy not used by one lessee shall be available, for the time being, to the other. If secondary energy is not taken by the city, the district, and/or the company, then and in such event, the United States reserves the right to take, use, and dispose of such energy, from time to time, as it sees fit, giving credit therefor as provided in article twelve (12) hereof.

Of firm energy allocated to but not used by the district.

It is further agreed that in the event the district shall fail for any reason to use all or any of the firm energy herein allotted to it for the only purpose for which said firm energy is allotted to it, that is, for pumping water into and in its aqueduct then the Secretary shall dispose of such unused energy until required by the district for said purpose, crediting on the district's obligation the proceeds of such disposition as received; provided, however, that no disposition of such firm energy shall be made by the Secretary without first giving to a successor to the district which may undertake to build or maintain a Colorado River Aqueduct the opportunity to take said firm energy for the same purpose and under the same terms as those to which the district was obligated; and provided further, that in the event no such successor takes said firm energy as provided above, then no disposition of such firm energy shall be made by the Secretary without first giving to each lessee the opportunity to contract on equal terms and conditions, to be prescribed by the Secretary, for one-half of such energy, together with such portion of the remainder as the other lessee shall not elect to take.

Of firm energy not hereinbefore disposed of.

It is further agreed that the United States reserves the right, in case the dam which it erects provides a maximum water surface elevation in excess of one thousand two hundred twenty-two (1,222) feet above sea level (U. S. Geological

Wilbur, Secretary of the Interior, hereinafter styled the Secretary, and, severally, the City of Los Angeles, a municipal corporation, and Survey datum), and thereby increases the quantity of firm energy above the quantity of four billion two hundred forty million (4,240,000,000) kilowatt-hours allocated above, to dispose of such increase, but not to exceed ninety million (90,000,000) kilowatt-hours per year (June 1 to May 31, inclusive), to any municipality or municipalities by firm contract executed with the Secretary on or before April 15, 1931. Such disposition shall be without prejudice to any provision of this lease or of the allocation above referred to. So much of such additional energy as is not so contracted for shall be taken and paid for by the city. Generation of such additional energy shall, in any event, be effected by the city.

MINIMUM ANNUAL PAYMENT

(10) Article seventeen (17) of the aforesaid contract of April 26, 1930, is hereby amended so as to read as follows, to wit:

Minimum annual payment

17. The minimum quantity of firm energy which the city shall take and/or pay for each year (June 1 to May 31, inclusive), under the terms of this contract and after same is ready for delivery to the city as provided in subdivision (a) of article eleven (11) hereof, shall be thirty-seven per centum (37%) of all firm energy as defined in article fifteen (15) hereof for the generation of which the United States makes water available in said year, except as reduced by amounts of firm energy contracted for by others, as provided in article fourteen (14). In addition, the city agrees to take and pay for, as provided in the last paragraph of article fourteen (14) hereof, all firm energy (not to exceed ninety million (90,000,000)) kilowatt-hours per year (June 1 to May 31, inclusive), made available over and above the firm energy defined in article fifteen (15) hereof, by the erection of a dam which provides a maximum water surface elevation in excess of one thousand two hundred and twenty-two (1,222) feet above sea level (U. S. Geological Survey data).

The minimum quantity of firm energy which Southern California Edison Co. (Ltd.) shall take and/or pay for each year (June 1 to May 31, inclusive), under the terms of this contract and after same is ready for delivery to the company as provided in subdivision (c) of article eleven (11) hereof, shall be twenty-seven per centum (27%) of all firm energy as defined in article fifteen (15) hereof for the generation of which the United States makes water available in said year, except as reduced by amounts of firm energy contracted for by others as provided in article fourteen (14).

The total payments made by each lessee for firm energy available in any year (June 1 to May 31, inclusive), whether any energy is generated or not, exclusive of its payments for use of machinery, shall be not less than the number of kilowatt-hours of firm energy available to said lessee and which said lessee is obligated to take and/or pay for during said year, multiplied by one and sixty-three hundredths mills ($0.00163), or multiplied by the adjusted rate of payment for firm energy in case the said rate is adjusted as provided in article sixteen (16) hereof, less credits on account of charges to other allottees, as provided for and referred to in article twelve (12) hereof.

For a fractional year at the beginning or end of the contract period, the minimum annual payment for firm energy shall be proportionately adjusted in the ratio that the number of days water is available for generation of energy in such fractional year bears to three hundred sixty-five (365). Provided, however, That in order to afford a reasonable time for the respective lessees to absorb the energy contracted for, the minimum annual payments by each for the first three (3) years after energy is ready for delivery to such lessees, respectively, as announced by the Secretary, as herein elsewhere provided, shall be as follows, in percentages of the ultimate annual obligation, to take and/or pay for firm energy:

During said absorption period, if the quantity of energy taken in any one year (June 1 to May 31, inclusive), is in excess of the above percentages of the ultimate

its department of water and power (said department acting herein in the name of the city, but as principal in its own behalf as well as

obligation during such year to take and/or pay for firm energy, such excess shall be paid for at the rate for secondary energy. Provided further, That the minimum annual payment shall be reduced in case of interruptions or curtailment of delivery of water as provided in article twenty-one (21) hereof.

CONTRACT AMENDED ONLY AS SPECIFICALLY PROVIDED

(11) Except as specifically amended hereby the aforesaid contract of April 26, 1930, shall remain in full force and effect, and said contract amended as herein provided is adopted and reaffirmed by the parties hereto as of the day and year first above written.

MEMBER OF CONGRESS CLAUSE

(12) No Member of or Delegate to Congress or Resident Commissioner shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom. Nothing, however, herein contained shall be construed to extend to this contract if made with a corporation for its general benefit.

In witness whereof, the parties hereto have caused this supplemental contract to be executed the day and year first above written.

Attest:

CLIFTON PETERS, Secretary.

SOUTHERN CALIFORNIA EDISON Co. (Ltd.)

By JOHN B. MILLER, Chairman.

SUPPLEMENTAL CONTRACT FOR LEASE OF POWER PRIVILEGE

SEPTEMBER 23, 1931

(1) This supplemental contract, made this twenty-third day of September, nineteen hundred thirty-one, pursuant to the act of Congress approved June 17, 1902 (32 Stat. 388), and acts amendatory thereof or supplementary thereto, all of which acts are commonly known and referred to as the reclamation law, and particularly pursuant to the act of Congress approved December 21, 1928 (45 Stat. 1057), designated the Boulder Canyon project act, between the United States of America, hereinafter referred to as the United States, acting for this purpose by Ray Lyman Wilbur, Secretary of the Interior, hereinafter styled the Secretary, and, severally, the city of Los Angeles, a municipal corporation, and its department of water and power (said department acting herein in the name of the city, but as principal in its own behalf as well as in behalf of the city; the term city as used in this contract being deemed to be both the city of Los Angeles and its department of water and power), and Southern California Edison Co. (Ltd.), a private corporation, hereinafter styled the company, both of said corporations being organized and existing under the laws of the State of California, and hereinafter styled the lessees.

Witnesseth:

in behalf of the city; the term city as used in this contract being deemed to be both the city of Los Angeles and its department of

EXPLANATORY RECITALS

(2) Whereas, under date of April 26, 1930, the parties hereto entered into a contract whereby, among other things, the United States agreed under the terms and conditions therein set forth to construct a dam as therein described in the main stream of the Colorado River at Black Canyon, and agreed also to construct in connection therewith outlet works, pressure tunnels, power plant building, and to furnish and install generating, transforming and high voltage switching equipment for the generation of the electrical energy allocated to the various allottees, respectively, as stated in article fourteen (14) thereof, which said agreement was amended in certain respects by supplemental contract of date May 28, 1930; and (3) Whereas, the said contract of April 26, 1930, amended as aforesaid, provides also, among other things, for the lease to the city and to the company of power plant units and corresponding plant facilities necessary to generate the energy allocated to them, and energy for those alottees therein named for whom the lessees are designated the generating agency, together with the right to generate such electrical energy; and

(4) Whereas, the Secretary has been requested to further amend the said contract of April 26, 1930, amended as aforesaid, in certain respects and particularly so in respect of the time within which the allottees mentioned in article fourteen (14) thereof shall be required to contract for the purchase of electrical energy allotted to them;

(5) Now, therefore, in consideration of the covenants contained herein and in said contract of April 26, 1930, amended as aforesaid, the parties hereto mutually covenant and agree as follows, to wit:

COMPENSATION FOR USE OF MACHINERY

(6) Article nine (a) (9a) of the said contract of April 26, 1930, amended as aforesaid, is hereby amended so as to read as follows, to wit:

9. (a) Compensation for the use, for the periods of lease thereof, of machinery and equipment furnished and installed by the United States, for each lessee, respectively, for the generation of electrical energy, equal to the cost thereof, including interest charges at the rate of four per centum (4%) per annum, compounded annually from the date of advances to the Colorado River Dam fund for the purchase of such equipment and machinery to June first of the year next preceding the year when the initial installment becomes due under this article, shall be paid to the United States by the lessees, severally, in ten (10) equal annual installments, so as to amortize the total cost (including interest as fixed above), and interest thereafter upon the unpaid balance of such total cost at the rate of four per centum (4%) per annum. The first installment payable by each lessee shall be due on June first next following the date the machinery leased by such lessee is ready for operation and water is available therefor, as announced by the Secretary, and the subsequent nine (9) installments shall be paid on June first of each year thereafter.

ALLOCATION OF ENERGY

(7) (a) Subdivision D of article fourteen (14) of the contract of April 26, 1930, amended as aforesaid, is hereby amended so as to read as follows, to wit:

D. To the municipalities of Anaheim, Beverly Hills, Burbank, Colton, Fullerton, Glendale, Newport Beach, Pasadena, Riverside, San Bernardino, and Santa Ana (referred to herein as "the municipalities"), six per centum (6%) in all, to be allocated between them as they may agree; but if no agreement is submitted to the Secretary on or before November 16, 1931, the Secretary shall determine the allocation of each.

(b) Subdivision F of said article fourteen (14) is hereby amended so as to read as follows, to wit:

F. To Southern California Edison Co. (Ltd.), the Southern Sierras Power Co., the San Diego Consolidated Gas & Electric Co., and the Los Angeles Gas & Electric Corporation, referred to herein as the companies, nine per centum (9%) in all, division whereof between the companies shall be made according to mutual agreement among them, if possible. If no such agreement is submitted to the Secretary on or before November 16, 1931, the Secretary shall determine the allocation of each.