SOUTHERN CALIFORNIA EDISON COMPANY INTERCONNECTION FACILITIES AGREEMENT

Interconnection Agreement

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ZOND PANAERO WINDSYSTEM P | PAMC Management Corporation

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Title: SOUTHERN CALIFORNIA EDISON COMPANY INTERCONNECTION FACILITIES AGREEMENT
Governing Law: California Date: 6/29/2005

SOUTHERN CALIFORNIA EDISON COMPANY INTERCONNECTION FACILITIES AGREEMENT, Parties: zond panaero windsystem p , pamc management corporation

Exhibit 10.3

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SOUTHERN CALIFORNIA EDISON COMPANY

INTERCONNECTION FACILITIES AGREEMENT

------------------------------------

1. PARTIES:

The Parties to this Interconnection Facilities Agreement ("IFA") are

PAMC Management Corporation, a Colorado corporation, who is acting on

its own behalf and on behalf of all other owners and seller(s)

(collectively, referred to as "Seller"), and Southern California

Edison Company, a California corporation ("Edison"). Seller and Edison

are sometimes referred to herein individually as "Party," and

collectively as "Parties." All terms defined herein but not

capitalized herein shall have the definitions provided in that certain

Reformed Standard Offer 1 As-Available Energy and Capacity Power

Purchase Agreement, dated as of the date hereof, between the Edison

and Seller (the "PPA").

2. RECITALS:

2.1 Seller owns, operates, and controls a 30,000 kW (nameplate

capacity) Generating Facility which is operated in parallel

with Edison's electric system. Said Generating Facility is

described in Section 1 of the PPA.

2.2 The electrical facilities described in Exhibit A, attached

hereto and incorporated herein, are required to connect

Seller's Generating Facility to the Edison electric system

pursuant to Edison's Tariff Rule No. 21 and Edison'sWholesale

Generation Interconnection Technical Requirements. Such

electrical facilities are hereinafter referred to as

"Interconnection Facilities" or "Added Facilities" depending

on the financing and ownership arrangements selected by the

Parties.

2.3 Pursuant to Edison's Tariff Rule No. 21 all or a portion of

the Interconnection Facilities may be provided by Edison as

"Added Facilities" as defined in Edison's Tariff Rule No.

2.H.

2.4 The Parties' respective scopes of work, costs and ownership

responsibilities for the Interconnection Facilities are

identified in Exhibit A.

3. AGREEMENT:

The Parties agree as follows:

3.1 Definitions.

3.1.1 "Added Facilities" or "Interconnection Facilities"

means the electrical facilities described in

Exhibit A.

3.1.2 "Added Facilities Investment" has the meaning set

forth in Section 8.5.

3.1.3 "CPUC" means the California Public Utilities

Commission.

<PAGE>

3.1.4 "Edison-Financed Added Facilities" has the meaning

set forth in Section 3.2.1.

3.1.5 "ITCC" means the Income Tax Component of

Contributions pursuant to Edison's Preliminary

Statement as filed with the CPUC and as may be

revised from time to time.

3.1.6 "Monthly Charges" has the meaning set forth in

Section 10.2.

3.1.7 "One-Time Costs for Equipment or Services Provided

by Edison for Seller" has the meaning set forth in

Section 9.4.

3.1.8 "RCNLD" means the reconstruction cost for new

facilities, less the depreciation accrued for such

facilities.

3.1.9 "Seller Constructed and Conveyed Interconnection

Facilites" has the meaning set forth in Section

3.2.3.

3.1.10 "Seller Constructed and Owned Interconnection

Facilities" has the meaning set forth in Section

3.2.4.

3.1.11 "Seller-Financed Added Facilities" has the meaning

set forth in Section 3.2.2.

3.2 The Parties agree to one or more of the arrangements as

indicated in this Section 3.2 for the financing, design,

installation, operation, maintenance, and ownership of the

Interconnection Facilities described in Exhibit A.

Edison-Financed

---------------

X 3.2.1 To have Edison, at Seller's expense,

-- finance, install, own, operate, and maintain

all or a portion of the Interconnection

Facilities described as "Edison-Financed Added

Facilities" in Exhibit A; and/or

Seller-Financed

---------------

N/A 3.2.2 To have Edison, at Seller's expense,

--- install, own, operate, and maintain all or a

portion of the Interconnection Facilities

described as "Seller-Financed Added

Facilities" in Exhibit A; and/or

Seller-Constructed and Conveyed

-------------------------------

N/A 3.2.3 To have Seller finance, install, and

--- transfer ownership of all or a portion of the

Interconnection Facilities described as

"Seller Constructed and Conveyed

Interconnection Facilities" in Exhibit A, to

Edison for Edison to own, operate, and

maintain at Seller's expense as

"Seller-Financed Added Facilities"; and/or

<PAGE>

Seller-Constructed and Owned

----------------------------

N/A 3.2.4 To have Seller finance, install, own,

--- operate, and maintain all or a portion of the

Interconnection Facilities described as

"Seller-Constructed and Owned Interconnection

Facilities" in Exhibit A.

4. TERM AND TERMINATION:

4.1 This IFA shall be binding upon execution by the Parties and

shall remain in effect until termination of the PPA.

4.2 Seller agrees to utilize all Interconnection Facilities

described in Exhibit A, in accordance with good operating

practice. If Seller fails to so utilize said Interconnection

Facilities, Edison may terminate this IFA and remove the

Interconnection Facilities, pursuant to Section 10.10 herein.

5. PROJECT DEVELOPMENT MILESTONES:

[This section intentionally left blank.]

6. INTERCONNECTION FACILITIES PROVIDED AS EDISON-FINANCED ADDED FACILITIES:

If the Parties have agreed to provide all or a portion of the

Interconnection Facilities pursuant to the provisions of Section 3.2.1

herein, the following shall apply for that portion of the

Interconnection Facilities specified in Exhibit A, as "Edison-Financed

Added Facilities."

6.1 Edison shall, pursuant to Edison's Tariff Rule No. 21,

finance, engineer, design, procure equipment and materials,

construct, install, own, operate, and maintain the

Edison-Financed Added Facilities.

6.2 Seller shall pay a charge based on:

(1) The Added Facilities Investment in Edison-Financed

Added Facilities as set forth in Exhibit A, as may

be revised pursuant to Sections 10.2 and/or 10.3

herein; and

(2) The monthly rate established for the replacement

coverage option selected in this Section 6.2 for

"Company Financed Added Facilities" as set forth in

Edison's Tariff Rule No. 2.H, as filed with the CPUC

and as may be revised from time to time.

Whenever Added Facilities are replaced, the Added Facilities

Investment amount used as the basis for determining the

charge Seller pays Edison shall be subject to the conditions

set forth in Sections 10.6 and 10.7 herein. Seller hereby

selects a replacement coverage option for Edison-Financed

Added Facilities as follows:

<PAGE>

N/A (a) Replacement Coverage into Perpetuity

--- ------------------------------------

Under this option, Seller shall pay to Edison, at

Edison's sole option, either (Edison to select one):

__(1) A Monthly Charge determined by Edison

based upon an initial monthly rate of %

times the Added Facilities Investment

amount; or,

__(2) A One-Time Payment determined by Edison

representing the present value of the sum

of the Monthly Charges ($ per month) for

the Added Facilities Investment amount.

N/A (b) Replacement Coverage with 20-Year Term

--- --------------------------------------

Under this option, for a term of 20 years

beginning with the date said Added Facilities are

first made available for Seller's use. Seller

shall pay to Edison a Monthly Charge determined by

Edison based upon an initial monthly rate of %

times the Added Facilities Investment amount. At

the end of the 20-year term, this IFA shall

terminate. If the Parties elect to continue to

utilize the Added Facilities past the term of this

IFA, Seller and Edison may execute a new Added

Facilities agreement. If such an agreement is

formed, a new Added Facilities Investment amount

shall be determined by Edison based on the

reconstruction cost for new facilities, less the

depreciation accrued for such facilities (RCNLD).

X (c) Without Replacement Coverage

-- -----------------------------

Under this option, Seller shall pay Edison a

Monthly Charge based upon an initial monthly rate

of 1.35% times the Added Facilities Investment

amount.

6.3 For existing facilities which are allocated by Edison for

Seller's use as Added Facilities, the resulting charges paid

by the Seller under Section 6.2 herein shall be based upon

the Added Facilities' Investment amount set forth in Exhibit

A, and calculated on a RCNLD basis.

7. INTERCONNECTION FACILITIES PROVIDED AS SELLER-FINANCED ADDED FACILITIES:

If the Parties have agreed to provide all or a portion of the

Interconnection Facilities pursuant to the provisions of Section 3.2.2

herein, the following shall apply for that portion of the

Interconnection Facilities specified in Exhibit A, as "Seller-Financed

Added Facilities."

7.1 Edison shall, pursuant to Edison's Tariff Rule No. 21,

engineer, design, procure equipment and materials, construct,

install, own, operate, and maintain the Seller-Financed Added

Facilities.

<PAGE>

7.2 Seller shall pay to Edison in advance of construction, the

estimated Total Installed Cost of said Seller-Financed Added

Facilities, as set forth in Exhibit A, as may be revised

pursuant to Sections 10.2 and/or 10.3, herein. If applicable,

said cost shall include the estimated Income Tax Component of

Contributions ("ITCC"), pursuant to Edison's Preliminary

Statement as filed with the CPUC and as may be revised from

time to time.

7.3 In addition to the payment required under Section 7.2 herein,

Seller shall pay a charge based on:

(1) The Added Facilities Investment in Seller-Financed

Added Facilities as set forth in Exhibit A, as may be

revised pursuant to Sections 10.2 and/or 10.3 herein;

and

(2) The monthly rate established for the replacement

coverage option for "Customer-Financed Added

Facilities" selected in this Section 7.3 as set forth

in Edison's Rule No. 2.H as filed with the CPUC and as

may be revised from time to time.

Whenever Added Facilities are replaced, the Added Facilities

Investment amount used as the basis for determining the

charge Seller pays Edison shall be subject to the conditions

set forth in Section 10.6 or 10.7 herein. Seller hereby

selects a replacement coverage option for Seller-Financed

Added Facilities as follows:

N/A (a) Replacement Coverage into Perpetuity

--- ------------------------------------

Under this option, Seller shall pay to Edison, at

Edison's sole option, either (Edison to select one):

__(1) A Monthly Charge determined by Edison

based upon an initial monthly rate of %

times the Added Facilities Investment

amount; or,

__(2) A One-Time Payment determined by Edison

representing the present value of the sum

of the Monthly Charges ($ per month) for

the Added Facilities Investment amount.

N/A (b) Replacement Coverage with 20-Year Term

--- ------------------------------------

Under this Option, for a term of 20 years beginning

with the date said Added Facilities are first made

available for Seller's use, Seller shall pay to

Edison a Monthly Charge determined by Edison based

upon an initial monthly rate of % times the Added

Facilities Investment amount. At the end of the

20-year term, this IFA shall terminate. If the

Parties elect to continue to utilize the Added

Facilities past the term of this IFA, Seller and

Edison may execute a new Added Facilities agreement.

If such an agreement is formed, a

<PAGE>

revised Added Facilities Investment amount

shall be determined by Edison on a RCNLD basis.

N/A (c) Without Replacement Coverage

--- ----------------------------

Under this option, Seller shall pay Edison a

Monthly Charge determined by Edison based upon an

initial monthly rate of % times the Added

Facilities Investment amount.

8. INTERCONNECTION FACILITIES PROVIDED AS SELLER-CONSTRUCTED AND CONVEYED

INTERCONNECTION FACILITIES:

If the Parties have agreed to provide all or a portion of the

Interconnection Facilities pursuant to the provisions of Section 3.2.3

herein, the following shall apply for that portion of the

Interconnection Facilities specified in Exhibit A, as

"Seller-Constructed and Conveyed Interconnection Facilities:"

8.1 At Seller's expense, Seller shall finance, engineer, design,

construct, procure equipment and materials, and install

Seller-Constructed and Conveyed Interconnection Facilities.

Said Interconnection Facilities shall be engineered, designed

and constructed in accordance with Edison's written

specifications and Edison's Tariff Rule No. 21.

8.2 Edison shall, at Seller's expense:

(a) Prepare specifications including a list of approved

contractors for Seller to use in the engineering,

design and construction of the Seller-Constructed

and Conveyed Interconnection Facilities;

(b) Review Seller's design and require modifications

which Edison reasonably determines necessary to

conform to Edison's standards and specifications;

and

facilities before such facilities are accepted and

conveyed to Edison.

8.3 Title to those Seller-Constructed and Conveyed

Interconnection Facilities installed by Seller to be owned,

operated and maintained by Edison, shall be transferred by

Seller to Edison only after Edison's inspection of the

facilities to verify conformance to Edison's specifications

and standards. Such transfer shall be made in a manner

acceptable to Edison. In no event shall such transfer occur

later than the date said Interconnection Facilities are first

placed into operation. Edison shall have the right to refuse

such transfer of ownership if said Interconnection Facilities

or the documents for such transfer are unacceptable to

Edison. Seller shall be responsible to take the necessary

action to correct any deficiencies in order to effectuate the

transfer of said Interconnection Facilities to Edison.

<PAGE>

8.4 Seller shall pay to Edison, prior to the date the

Seller-Constructed and Conveyed Interconnection Facilities

are transferred to Edison, the ITCC charges based on Edison's

estimated value for said Interconnection Facilities as set

forth in Exhibit A. The estimated ITCC charges shall be

adjusted by Edison as provided in Sections 10.2 and 10.3

herein. Additional charges or credits resulting from such

adjustment shall, unless otherwise mutually agreed, be

payable to Edison or Seller, as appropriate, within thirty

(30) days after the date of presentation of a bill and

documentation therefor. The ITCC charges shall be in

accordance with Edison's Tariff Schedules' Preliminary

Statement Schedule M, as filed with the CPUC and as may be

revised from time to time.

8.5 For purposes of establishing the actual ITCC charges and the

charges to be made pursuant to Section 8.7 herein, Seller

shall, within sixty (60) days after installation, provide a

statement of the installed cost ("Added Facilities

Investment") of such Interconnection Facilities transferred

to Edison.

8.6 Edison shall have the right to review and audit Seller's

statement of the installed cost of such Interconnection

Facilities. If Edison disputes such cost, Seller shall be

responsible for providing satisfactory documentation of such

cost to Edison.

8.7 For the purposes of establishing ongoing ownership,

operation, maintenance, and replacement responsibilities and

charges, effective upon the transfer of title of any

Seller-Constructed and Conveyed Interconnection Facilities to

Edison, said Interconnection Facilities shall be treated as

Seller-Financed Added Facilities provided under Section 7

herein. Subject to the conditions set forth in Sections 10.2

and 10.3, herein, the value of said Interconnection

Facilities may initially be based upon Edison's estimate and

revised when the statement of installed costs provided

pursuant to Section 8.5 of this IFA is accepted by Edison.

9. INTERCONNECTION FACILITIES PROVIDED AS SELLER-CONSTRUCTED AND OWNED

INTERCONNECTION FACILITIES:

If the Parties have agreed to provide all or a portion of the

Interconnection Facilities pursuant to the provisions of Section 3.2.4

herein, Seller is subject to the following for that portion of the

Interconnection Facilities specified in Exhibit A, as

"Seller-Constructed and Owned Interconnection Facilities:"

9.1 At Seller's expense, Seller shall finance, engineer, design,

procure equipment and materials, construct, obtain

rights-of-way as necessary, install, own, operate, and

maintain the Seller-Constructed and Owned Interconnection

Facilities. Said Interconnection Facilities shall be

engineered, designed and constructed to be compatible with

Edison's electric system and in accordance with Edison's

Tariff Rule No. 21, as applicable.

<PAGE>

9.2 Edison shall, at Seller's expense, review Seller's design and

requ

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