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WHEREAS, for several months SCPPA has been in negotiations concerning the Power <br />Sales Agreements through which SCPPA will pass the project rights and benefits and the project <br />liabilities and costs to the Project Participants and, with the Project Participants, has recently <br />developed definitive Power Sales Agreements between SCPPA and the Project Participants <br />(collectively, the "Power Sales Agreements") with respect to the Milford Wind Corridor Phase I <br />Project in accordance with the respective interests of each Project Participant in the Project; and <br />WHEREAS, the Milford Wind Corridor Phase I Project currently is anticipated to entail a <br />200 MW wind project with energy to be delivered to SCPPA at the Intermountain Power Project <br />switching station located in Delta, Utah beginning on or about approximately December 31, <br />2008; and <br />WHEREAS, the Project Participants contemplate that SCPPA will issue bonds for the <br />purpose of prepaying for certain of the energy which is anticipated to be produced by the Milford <br />Wind Corridor Phase I Project generation facility and that each of the respective Project <br />Participants will assume the obligation for a share of the debt service associated with the Bonds <br />under the terms and conditions of the Power Sales Agreements and that, pursuant to the Power <br />Purchase Agreement and Power Sales Agreements additional energy produced by the facility in <br />excess of the prepaid energy is anticipated to be purchased by SCPPA on behalf of and for the <br />Project Participants on a monthly basis; and <br />WHEREAS, the Power Sales Agreements pass all rights, benefits, obligations and liabilities <br />of SCPPA under the Project to the Project Participants on a pro -rata basis and with the <br />prepayment bond financing, all SCPPA administrative costs are also charged to the Project <br />Participants; and <br />WHEREAS, the Project exists entirely in the State of Utah and is statutorily exempt under <br />the California Environmental Quality Act inasmuch at the Project is subject to review pursuant to <br />the National Environmental Policy Act as well as further environmental review pursuant to <br />certain Utah laws; and <br />WHEREAS, the Power Purchase Agreement provides for a a 20 -year term with various <br />options which, depending on potential contingencies, could result in the buyout of the facility; <br />and <br />WHEREAS, Lelunan Brothers has consummated a similar prepayment transaction associated <br />with a similar wind facility in Washington and has worked with SCPPA and the Project <br />Participants with respect to the financing structure and the transactional modeling necessary for <br />this Project; and <br />WHEREAS, now that the Power Sales Agreements have been negotiated the Finance <br />Committee has recommended their ratification and approval; and <br />WHEREAS the Finance Committee has previously recommended the selection of Lehman <br />Brothers as the lead underwriter for the issuance of the prepayment bonds; and <br />WHEREAS, the Project Participants in this Project Element of the SCPPA Renewable <br />Electric Energy Resource Project have expressed the desire to enter into final definitive Power <br />2 <br />