AMENDMENT NO. 15 TO FOUR CORNERS PROJECT OPERATING AGREEMENT

THIS AMENDMENT NO. 15 TO FOUR CORNERS PROJECT OPERATING AGREEMENT (this “Amendment”) is made and entered into as of March 15, 2015, by and among ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation (“Arizona”); EL PASO ELECTRIC COMPANY, a Texas corporation (“El Paso”); PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (“New Mexico”); SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an agricultural improvement district, organized and existing under the laws of the State of Arizona (“Salt River Project”); and TUCSON ELECTRIC POWER COMPANY, an Arizona corporation (“Tucson”). Arizona, El Paso, New Mexico, Salt River Project, and Tucson are herein collectively referred to as the “Parties”.

The Parties, together with Southern California Edison, which sold its interest in the Four Corners Project to Arizona, entered into the Four Corners Project Operating Agreement, effective as of March 1, 1967, and amendments thereto through Amendment No. 14, dated December 30, 2013 (as amended by such amendments, the “Operating Agreement”), providing, among other things, for the operation and management of the Four Corners Project.

17, 2015 (the “Purchase Agreement”), providing, among other things, for the sale by El Paso to Arizona, and the purchase by Arizona from El Paso, of El Paso’s interests in the Four Corners Project and the Facilities Switchyard (the “El Paso Interest Transfer”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.Defined Terms. Defined terms used but not defined in this Amendment shall have the respective meanings ascribed to such terms in the Operating Agreement.

2.Amendment of Section 1. Section 1 is hereby amended to delete “EL PASO ELECTRIC COMPANY, a Texas corporation (hereinafter referred to as “El Paso”);” from the second line thereof.

3.Amendment of Section 2.2. Section 2.2 is hereby amended to substitute “El Paso” for “El Paso Electric Company (hereinafter referred to as “El Paso”)” in the first line thereof, and to add the following sentence immediately following the last sentence thereof: “Amendment No. 15 to this Agreement provides, among other things, for updated ownership percentages as they existed following the consummation of the transfer to Arizona by El Paso of El Paso’s interests in the Four Corners Project pursuant to that certain Purchase and Sale

Agreement, dated as of February 17, 2015 (the “Purchase Agreement”). As of the effective date of Amendment No. 15 to this Agreement, El Paso will no longer be a party to this Agreement, and all references to El Paso as well as El Paso’s designation as a Participant, as that term is defined in Section 5.56 herein, are limited to facts or matters occurring or agreements entered into prior to the effective date of Amendment No. 15 to this Agreement.”

4.Amendment of Section 5.56. Section 5.56 is hereby amended to delete “, El Paso” in the first line thereto, and to add the following clause immediately following “Project” in the third line thereof: “, and, when referring specifically to facts or matters occurring or agreements entered into prior to the effective date of Amendment No. 15 to this Agreement, El Paso.”.

5.Amendment of Section 6.2. Section 6.2 is hereby amended to delete “, El Paso”

from the first line thereof.

6.Amendment of Section 17.1.1.2. Section 17.1.1.2 is hereby amended to substitute

“70%” for “63%” in the first line thereof, and to delete “El Paso 7%” in the second line thereof.

7.Amendment of Section 17.1.1.3. Section 17.1.1.3 is hereby amended to substitute “80%” for “75.33%” in the first line thereof, and to delete “El Paso 4.67%” in the second line thereof.

8.Amendment of Section 17.1.1.4. Section 17.1.1.4 is hereby amended to substitute “62.73%” for “52.23%” in the first line thereof, and to delete “El Paso 10.50%” in the second line thereof.

9.Amendment of Section 17.1.1.6. Section 17.1.1.6 is hereby amended to substitute “58.40%” for “57.90%” in the first line thereof, and to delete “El Paso .50%” in the second line thereof.

10.Amendment of Section 17.1.1.7. Section 17.1.1.7 is hereby amended to substitute

“70%” for “63%” in the first line thereof, and to delete “El Paso 7%” in the second line thereof.

11.Amendment of Section 17.1.1.8. Section 17.1.1.8 is hereby amended to substitute “68.75%” for “62.45%” in the first line thereof, and to delete “El Paso 6.3%” in the second line thereof.

12.Amendment of Section 17.1.1.9. Section 17.1.1.9 is hereby deleted in its entirety and replaced to read in full as follows:

“17.1.1.9(a) Common Facilities and Related Facilities - for Operating Costs incurred prior to, or required to satisfy liabilities related to operation of the Common and Related Facilities, prior to the effective date of Amendment No. 15.

Operating Costs which cannot be assigned to any generating Unit or facility but apply to all units shall be shared among all Participants at the Enlarged Four Corners Generating Station in the same said percentages as the Common Facilities and Related Facilities.”.

13.Amendment of Section 19.19. Section 19.19 is hereby amended to substitute “85%” for “81.50%” in the fifth line thereof, and to delete “El Paso 3.5%” from the ninth line thereof.

14.Amendment of Section 24.1.3. Section 24.1.3. is hereby deleted.

15.Amendment of Section 24.4. Section 24.4 is hereby amended to substitute “58.40” for “57.90%” in the third line thereof, and to delete “El Paso .50%” in the fourth line thereof.

16.Amendment of Exhibit 2. Exhibit 2 is hereby amended as follows and is attached to this Amendment as Exhibit 2-A:

To substitute “70%” for “63%” in the first line of the “PROJECT ALLOCATION” table relating to the “CONNECTION TO RESERVE AUXILIARY POWER SOURCE,” and to delete “El Paso 7%” from the second line thereof.

To substitute “58.40%” for “57.90%” in the first line of the “COST ALLOC. & OWNERSHIPS” table relating to the “NO.1 230/345KV BUS TIE TRANSFORMER,” and to delete “El Paso .50%” from the second line thereof.

To substitute “68.75%” for “62.45%” in the first line of the “COST ALLOCATION & OWNERSHIPS” table relating to the “CONNECTION TO 345KV SWITCHYARD FACILITIES,” and to delete “El Paso 6.3%” from the second line thereof.

To substitute “80%” for “75.33%” in the first line of the “COST ALLOCATION & OWNERSHIPS” table relating to the “500KV SWITCHYARD LIMITS,” and to delete “El Paso 4.67%” from the second line thereof.

To substitute “62.73%” for “52.23%” in the first line of the “COST ALLOCATION & OWNERSHIPS” table relating to the “345KV SWITCHYARD LIMITS,” and to delete “El Paso 10.50%” from the second line thereof.

To substitute “70%” for “63%” in the first line of the “PROJECT ALLOCATION” table relating to the “345/500KV, 4-16 250MVA EA.” diagram on the lower right corner of Exhibit 2, and to delete “El Paso 7%” from the second line thereof.

17.Amendment No. 15 Effective Date; Termination. The “Amendment No. 15

18.Notices. Any notice provided for in this Amendment shall be deemed properly served, given or made if delivered in person or sent by registered or certified mail, postage prepaid, to the persons specified below:

19.Effect of Amendment. The Parties acknowledge and agree that (a) except as specifically amended by this Amendment, the Operating Agreement is unamended, and (b) the Operating Agreement, as amended by this Amendment, remains in full force and effect.

20.Counterparts; Facsimile and .PDF Signatures. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. Any signature page delivered by facsimile, telecopy, or .pdf file shall be binding to the same extent as an original signature page,

with regard to any agreement, subject to the terms hereof or any amendment thereto. Any Party who delivers such a signature page agrees to later deliver an original counterpart to any Party who requests it.