AMENDMENT NO. 2 TO PARTICIPATION AGREEMENT

Exhibit 10.1

AMENDMENT NO. 2 TO PARTICIPATION AGREEMENT

THIS AMENDMENT NO. 2 TO PARTICIPATION AGREEMENT (this “Amendment”) is dated as of December 31, 2004, between and among (i) OLD DOMINION ELECTRIC COOPERATIVE, a utility aggregation cooperative organized under the laws of the Commonwealth of Virginia (“Old Dominion”), (ii) U.S. BANK NATIONAL ASSOCIATION, SUCCESSOR TO STATE STREET BANK AND TRUST COMPANY, not in its individual capacity, but solely as trustee under the Trust Agreement (the “Owner Trustee”), (iii) WACHOVIA BANK, NATIONAL ASSOCIATION, FORMERLY KNOWN AS FIRST UNION NATIONAL BANK, SUCCESSOR BY MERGER TO FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association, as Owner Participant (the “Owner Participant”), (iv) UTRECHT-AMERICA FINANCE CO., a Delaware corporation, as Series A Lender and Agent for the Lenders (“Utrecht”), and (v) CEDAR HILL INTERNATIONAL CORP., a Delaware corporation, as Series B Lender (“Cedar Hill”).

WITNESSETH:

WHEREAS, Old Dominion, the Owner Trustee, the Owner Participant and Utrecht entered into certain Operative Documents, including, without limitation, that certain Participation Agreement dated as of February 29, 1996, which was amended by that certain Amendment No. 1 to Participation Agreement dated as of December 19, 2002, pursuant to which Cedar Hill became the Series B Lender (the “Participation Agreement”);

WHEREAS, Old Dominion has requested, and the other parties have agreed, to amend the covenant contained in Section 7.7 of the Participation Agreement, subject to the terms and conditions hereof;

NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged by the parties hereto, the parties hereto covenant and agree as follows:

“Section 7.7. Qualifying Letter of Credit. If at any time during the Term of the Equipment Operating Lease or the Foundation Operating Lease Old Dominion’s Bonds are either (a) rated below the Minimum Credit Rating

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(as defined herein), or (b) placed on negative credit watch by either S&P or Moody’s while rated at the Minimum Credit Rating for such agency, then Old Dominion shall, within 90 days of the first date on which Old Dominion’s Bonds meet the condition set forth in either (a) or (b) above, obtain for the benefit of the Owner Participant a Qualifying Letter of Credit. If at any time subsequent to the date referred to in the preceding sentence Old Dominion’s Bonds are again rated at the Minimum Credit Rating or above and are not on negative credit watch by either S&P or Moody’s while rated at the Minimum Credit Rating for such agency, then Old Dominion shall not be required to maintain a Qualifying Letter of Credit in accordance with this Section 7.7. If, at any time Old Dominion is required to maintain a Qualifying Letter of Credit pursuant to this Section 7.7, the bank issuing such Qualifying Letter of Credit shall cease to be a Qualifying Letter of Credit Bank, Old Dominion shall, within 90 days of the earlier of (i) having Actual Knowledge of such fact or (ii) receiving notice from the Owner Participant of such fact, replace such letter of Credit with a Qualifying Letter of Credit. As used herein, “Minimum Credit Rating” shall mean a rating for Old Dominion’s Bonds that is at least A- by S&P and Baa2 by Moody’s.”

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or event that with the passage of time or giving of notice or both would constitute an Event of Default or Event of Loss has occurred and is continuing.

IN WITNESS WHEREOF, each of the parties has caused this Amendment to be duly executed, under seal, by its duly authorized officer as of the day and year first written above.

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

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