Nancy,

Here are some come comments to the draft PPA:

As a general note, we would have these goals:

1.  Keep the PPA has streamlined as possible, putting as much as we can in 
the interconnection agreement.
2.  Minimize ties to specific unit.
3.  Maximize optionality, especially delivery points.
4.  Keep construction/ownership of the facility off the balance sheet.
5.  Signing the interconnection agreement must be simultaneous, or a CP.

More specifically we would like to:

Move start up/metering terms to interconnection agreement.
Megawatts will probably change due to change in equipment.  Bracket 192 for 
now.  The capacity will change for summer and winter, also, specifics to be 
determined.
Make sure we are protected from any liability caused by their delay.

Comments on specific articles:
Definition of emergency start up will belong in interconnection agreement.
2.2  Expiration is Dec. 31, 2004; move  bracketed language into interconnect.
2.3  We need an out in case we don't commence construction/achieve commercial 
operation as a result of Buyer's action/inaction, and the term "breach" 
should include failure to timely perform any of buyer's obligations under any 
of the agreements. Any reason why we shouldn't want an extension if there is 
a delay due to action/inaction of any governmental authority?  We can add 
change of law as an event which gives us schedule relief, but we might want 
to broaden the definition of change of law. Also, we don't have the site 
acquired yet, so we may need an out in case we encounter a problem, unless we 
will not sign this agreement before acquiring the site.
3.4  Peak period is July and August.
3.5 (b) Amount left over will depend on the summer and winter capacity.  
Might just leave blanks as placeholders.
3.5 (c) Let's try for 4 hours notice.
3.5 (d) suggest title "Start-Up Minimum Run Time".
3.5 (e)  add maximum of ___ per year.  
Need a minimum shut down time between start ups.
4.6 Note:  3.3 refers to alternate sources and market sources; 4.6 refers to 
the wholesale market.  We should pick a term, define it, and use it 
throughout. 
8.1 (c)  replace "covenant" with "obligation", and follow with "(other than 
payment)". Default isn't a remedy, so there's a disconnect in that sentence.  
8.1 (d) remove "shall" and conform grammar in romanettes.
8.3 refers to LD's, 4.8 but I didn't see any unless 4.8 is meant to encompass 
the concept. A little unclear to me.  How is this supposed to work with 4.8? 
Is there any reason the damage waiver can't be absolute?  Does the sole and 
exclusive language in 4.8 need to be conspicuous, or is it ok?
9.1  Is the demand charge included in the invoice, or is it due without an 
invoice?
10.1 On the third line, shouldn't the second "Seller" be "Buyer"?
15.  No mediation.
16.1  Delete oral amendment language.

Exhibits:
A. Megawatts, heat  rate to be confirmed.  Heat rate believed to be 10,600. 
Deleted bracketed language about implied cost of fuel from alternate source 
energy.  Start up costs:  $500.  Emergency start up to be addressed later.

Could we schedule a conference call for Friday or Monday to discuss any 
questions/issues.  Please let me know your availability.

Thanks,

Kay