CONSOLIDATED POWER PURCHASE AND OPERATING AGREEMENT FOR ROANOKE VALLEY UNITS 1 AND 2 BY AND BETWEEN WESTMORELAND PARTNERS AND VIRGINIA ELECTRIC AND POWER COMPANY CONSOLIDATED POWER PURCHASE AND OPERATING AGREEMENT CONSOLIDATED POWER PURCHASE AND OPERATING AGREEMENT Table of Contents ARTICLE 1:Definitions2 ARTICLE 2:Sale and Purchase of Energy and Capacity10 ARTICLE 3:Notices11 ARTICLE 4:Pre- and Post-Operation Period12 ARTICLE 5:Term and Termination13 ARTICLE 6:Representations and Warranties of Operator15 ARTICLE 7:Control and Operation of the Facility20 ARTICLE 8:Interconnection29 ARTICLE 9:Metering30 ARTICLE 10:Compensation, Payment, and Billings32 ARTICLE 11:Capacity Ratings34 ARTICLE 12:Insurance37 ARTICLE 13:Liability and Noncompliance39 ARTICLE 14:Force Majeure45 ARTICLE 15:Taxes and Claims for Labor and Materials46 ARTICLE 16:Choice of Law47 ARTICLE 17:Miscellaneous Provisions47 ARTICLE 18:Statutory and Regulatory Changes48 ARTICLE 19:Entirety49

For the operation and maintenance of the Facility; and

For Operator to perform its obligations under this Agreement.

Unless excused by Force Majeure as specified in Article 14, abandonment of operation of a Unit at any time;

A court having jurisdiction shall enter (i) a decree or order for relief in respect of Operator in an involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law, or (ii) a decree or order adjudicating Operator bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of Operator under any applicable Federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of Operator or of any substantial part of its affairs;

Operator shall (i) commence a voluntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law or any other case or proceeding to be adjudicated a bankrupt or insolvent, or (ii) consent to the entry of a decree or order for relief in respect of Operator in any involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or (iii) file any petition, answer or consent seeking reorganization or relief under any applicable Federal or state law, or (iv) consent to the filing of any petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of Operator or of any substantial part of its property, or (v) make an assignment for the benefit of creditors, or (vi) be unable or admit in writing its inability to pay its debts generally as they become due, or (vii) take any action in furtherance of any of the foregoing;

In connection with any event described in subsections (b) or (c) of this Section 5.2, this Agreement shall be rejected within the meaning of the Bankruptcy

Failure to post security as stipulated in Section 13.4; for which event a five (5) day cure period shall be permitted hereunder; Operator agrees that in no event shall Operator be entitled to any further extension of the deadline for the posting of security pursuant to Section 13.4, including by reason of Force Majeure pursuant to Article 14; or

Attempts by Operator, its employees, contractors or subcontractors of any tier, to operate, maintain, or tamper with the Interconnection Facilities without the prior written consent of DNCP.

Operator has a valid, legally binding contract (the “Rail Contract”) with the applicable Rail Carrier to deliver coal to the Facility that is in effect at the time that Operator fails to maintain the minimum supply of fuel required under this Section 6.1;

The applicable Rail Carrier’s refusal or inability to deliver coal is not attributable in any way to the fault of Operator, including Operator’s breach of the Rail Contract;

Operator gives the DNCP written notice describing the particulars of the actions of Rail Carrier within seventy-two (72) hours of the beginning of such actions.

The suspension of performance is of no greater scope and of no longer duration than is required by the Rail Carrier’s actions; and

Operator uses commercially reasonable efforts to remedy its inability to perform.

(i) The Operator is a partnership duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia; (ii) the general partners of Operator are Westmoreland Roanoke Valley, L.P., a limited partnership whose general partner is WEI Roanoke Valley, Inc., both of which are duly organized, validly existing and in good standing under the laws of the State of Delaware, and Westmoreland-North Carolina Power, L.L.C., a limited liability company that is duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia. Operator and the general partners of Operator are qualified to do business in North Carolina and in each other jurisdiction where the failure so to qualify would have a material adverse effect upon their business or financial condition; and each has all requisite power and authority to conduct its business, to own its properties, and to execute, to deliver, and to perform its obligations under this Agreement.

The execution, delivery and performance by the Operator of this Agreement have been duly authorized by all necessary partnership, limited liability company or corporate action as applicable, and do not and will not (i) require any consent or approval of the Operator’s Board of Directors, partners or shareholders as applicable, other than that which has been obtained (evidence of which shall be, if it has not heretofore been, delivered to DNCP), (ii) violate any provisions of the Operator’s corporate bylaws or other organic documents, any indenture, contract or agreement to which it is a party or by which it or its properties may be bound, or any law, rule, regulation, order, writ, judgment, injunction, decree, determination, or award presently in effect having applicability to the Operator, or (iii) result in a breach or constitute a default under the Operator’s corporate

No authorizations or approval by any governmental or other official agency is necessary for the due execution and delivery by the Operator of this Agreement as in effect on the date of this Agreement.

This Agreement is a valid and binding obligation of the Operator.

There is no pending or threatened action or proceeding affecting the Operator before any court, governmental agency or arbitrator that could reasonably be expected to affect materially and adversely the financial condition or operations of the Operator or the ability of the Operator to perform its obligations hereunder, or which purports to affect the legality, validity or enforceability of this Agreement (as in effect on the date of this Agreement).

If MW capacity per hour offered for a Unit exceeds the Minimum Operating Level, the Price Offer for the amount of such capacity per hour above the Minimum Operating Level shall be equal to or greater than Marginal Cost and in accordance with PJM rules.

For MW capacity per hour offered for a Unit that is equal to or less than the Minimum Operating Level, the Price Offer for such capacity per hour shall be at DNCP’s sole discretion and in accordance with PJM rules, subject to limitations in Section 7.4.

Periods related to PJM requested generation due to network reliability issues;

Any hours for a Unit during a Forced Outage, or in the 48 hours immediately preceding a Forced Outage of the Unit, for which the Unit’s Dispatch was equal to or less than Unit’s Minimum Operating Level; and

Periods of Operator requested generation.

NEO delivered to DNCP,

Substitute Energy delivered to DNCP, and

Substitute Energy made available to DNCP as to which DNCP did not exercise its right to take delivery.

All such records shall be maintained for a minimum of five (5) years after the creation of such record or data and for any additional length of time required by regulatory agencies with jurisdiction over the Parties; provided, however, that Operator shall not dispose of or destroy any such records even after the five (5) years without thirty (30) Days prior notice to DNCP.

Operator shall maintain an accurate and up-to-date operating log at the Facility with records of: (i) real and reactive power production for each clock hour; (ii) changes in operating status, Scheduled Outages, Maintenance Outages, and Forced Outages; and (iii) any unusual conditions found during inspections and operations.

Either Party shall have the right from time to time, upon fourteen (14) Days written notice to the other Party, to examine the relevant records and data of the other Party relating to this Agreement at any time during the period the records are required to be maintained.

DNCP shall have the right to monitor Operator’s operation and maintenance practices regarding the Facility and to conduct physical inspections of the Facility at reasonable intervals; provided that DNCP shall not conduct such inspections more frequently than once every Calendar Quarter, except during any Facility outage. Operator shall consider all reasonable requests by DNCP resulting from such monitoring and inspections. Operator shall cooperate in such operations and maintenance reviews and physical inspections of the Facility as may be reasonably requested by DNCP. DNCP’s reviews and inspections of the Facility and recommendations as a result thereof shall not be construed as endorsing the

DNCP has declared a system Emergency;

Force Majeure prevents DNCP from receiving the Net Electrical Output or the Substitute Energy;

It is necessary to construct, install, maintain, repair, replace, remove, investigate, inspect or test any part of the Interconnection Facilities or any other affected part of DNCP’s system; or

For any other reason consistent with Prudent Electrical Practices or Prudent Utility Practices.

For the purpose of telemetering, a telecommunication circuit to the operations center designated by DNCP.

A voice telephone extension for the purpose of accessing DNCP’s dial-up metering equipment and for communicating with the designated DNCP operations center.

An extension of DNCP’s SOC and MOC PBX system in the control room of the Facility.

Equipment to transmit and receive facsimiles, and emails for the purpose of administering this Agreement.

Testing shall last for six (6) hours during a Winter Period test and twelve (12) hours during a Summer Period test from the time set forth in the notice provided by DNCP pursuant to the notice provision of Section 11.2(c).

Normal station use and operation of: unit auxiliaries (including without limitation spray modules and cooling towers required by regulatory or governmental authority) using steam or electricity produced at the Facility.

DNCP shall provide notice to Operator for all tests. Such notice shall be provided to Operator in advance of the test and no later than necessary to allow the Unit, pursuant to the Design Limits, to reach the appropriate Summer Period or Winter Period Dependable Capacity for the appropriate Summer Period or Winter Period. Tests shall be initiated within fourteen days after the start of the appropriate Summer Demonstration Period or Winter Demonstration Period.

During all tests, Operator may operate the Unit at any level consistent with Prudent Utility Practices, Prudent Electrical Practices, all licenses and permits, and technical limits of the Unit’s equipment.

The lowest half-hour integrated kW demand reading from DNCP owned meters during any such test shall equal the tested level (the “Tested Level”).

DNCP shall not schedule a test for Dependable Capacity to be conducted during a Scheduled Outage or, if Operator notifies DNCP of a bona fide request for a Maintenance Outage before DNCP notifies Operator of a proposed test, during such Maintenance Outage. In addition, if Operator has notified DNCP prior to DNCP’s notice of commencement of a test that the Unit is experiencing a Forced Outage, then DNCP shall not schedule a test for Dependable Capacity to be conducted during that Forced Outage. Notwithstanding the immediately preceding sentence, if a Forced Outage occurs any time after DNCP has given notice of a test or during a test, then the test will be completed in its entirety and the results of that test will be used in the determination of Dependable Capacity in accordance with this Article 11. If during the last allowed test under any Section in this Article 11, the test is interrupted or affected by an event of Force Majeure, Operator shall be entitled to up to two additional tests for Dependable Capacity.

At least fourteen Days prior to the beginning of each Summer Period or Winter Period, Operator may notify DNCP of the level of generation (“Projected Dependable Capacity”) at which DNCP may Dispatch the Unit during the period before Operator sets the Dependable Capacity. Such Projected Dependable Capacity shall not exceed the Maximum Dependable Capacity for the appropriate Summer Period or Winter Period.

If Operator fails to notify DNCP of a Projected Dependable Capacity, the Dependable Capacity shall be the same level as the previous appropriate Summer Period or Winter Period, up to which DNCP may Dispatch the Unit.

Commencing with the start of each Summer Period or Winter Period for which Operator has notified DNCP of a Projected Dependable Capacity, DNCP may Dispatch the Unit up to the Projected Dependable Capacity and shall pay Operator for capacity at the Projected Dependable Capacity level.

Whether or not Operator sets a Projected Dependable Capacity, DNCP may require a test for Dependable Capacity and, if so, must do so within the first fourteen (14) Days of the appropriate Summer Demonstration Period or Winter Demonstration Period.

DNCP shall provide notice to Operator in accordance with Section 11.2(c) and shall monitor such test.

Within three (3) Business Days after the completion of the test, DNCP shall provide Operator the results of the test.

Within three (3) Business Days after receipt of the test results, Operator shall notify DNCP whether or not Operator accepts or rejects the test.

If Operator accepts the test, Operator shall stipulate in the notice pursuant to Section 11.3(g) the level at which the Dependable Capacity is set, and such level shall not exceed the lesser of (i) the Maximum Dependable Capacity for the appropriate Summer Period or Winter Period or (ii) the applicable Tested Level.

If Operator rejects the test, fails to accept the test, or fails to set the Dependable Capacity level in accordance with Section 11.3(h), the test is null and void. Operator may, within five (5) Business Days from receipt of test results, request up to two (2) additional tests. Each such additional test shall be conducted within fourteen Days of notice requesting such test, and each such additional test shall be conducted pursuant to the procedures established in Sections 11.3(a) through 11.3(h). No additional Operator requested tests will be allowed in any Summer Period or Winter Period other than the tests allowed in this Section 11.3(g) or pursuant to Section 11.2(f).

If, after testing, Operator sets the Dependable Capacity less than the Projected Dependable Capacity, payments for Dependable Capacity shall be decreased retroactive to the start of the appropriate Summer Period or Winter Period.

If, after testing, Operator sets the Dependable Capacity greater than the Projected Dependable Capacity, payments for Dependable Capacity shall be increased, effective the Day DNCP receives such notice, to reflect the new Dependable Capacity.

If, after testing, Operator sets the Dependable Capacity equal to the Projected Dependable Capacity, payments for Dependable Capacity continue and will not be adjusted.

If, after the completion of all testing for any Summer Period or Winter Period, Operator fails to set the Dependable Capacity pursuant to this Section 11.3 or Section 11.4, the Dependable Capacity shall be the lesser of (i) the projected Dependable Capacity for the appropriate Summer Period or Winter Period, (ii) the applicable Tested Level, or (iii) the Dependable Capacity level of the previous corresponding Summer Period or Winter Period.

Once per Summer Demonstration Period and once per Winter Demonstration Period, at DNCP’s sole discretion, and

At any time Operator fails two (2) consecutive times to either achieve or maintain the operating level of the Unit within 15% of the Dispatch level prescribed by DNCP. For tests pursuant to Sections 11.4(a) and 11.4(b), Operator may, at its sole discretion, request up to two additional tests within five (5) Days of the DNCP required test if Operator is not satisfied with the results of the DNCP required test. Upon completion of such test or tests, Operator shall set the Dependable Capacity at any level up to the highest Tested Level, except that the Operator may not set the Dependable Capacity at any level in excess of the applicable Maximum Dependable Capacity. Payments for Dependable Capacity shall be adjusted accordingly, effective the day after any such testing is performed pursuant to this Section 11.4.

Worker’s Compensation insurance which complies with the laws of the State of North Carolina and Employers’ Liability Insurance with a limit of $1,000,000; and

Comprehensive or Commercial General Liability insurance with bodily injury and property damage combined single limit of $5,000,000 per occurrence. Such insurance shall include, but not necessarily be limited to, specific coverage for contractual liability encompassing the indemnification provisions in Article 13, broad form property damage liability, personal injury liability, explosion and collapse hazard coverage, products/completed operations liability, and, where applicable, watercraft protection and indemnity liability; and

Comprehensive Automobile Liability insurance with bodily injury and property damage combined single limit of $5,000,000 per occurrence covering vehicles owned, hired or non-owned; and

Excess Umbrella Liability Insurance with a single limit of at least $5,000,000 per occurrence in excess of the limits of insurance provided in subparagraphs (a), (b), and (c) above.

DNCP, its directors, officers, and employees are additional insureds under this Policy for their liability arising out of Operator’s operation and not for their independent acts; and

This insurance is primary with respect to the interest of DNCP, its directors, officers, and employees and any other insurance maintained by them is excess and not contributory with this insurance; and

The following Cross Liability clause is made a part of the policy: “In the event of claims being made by reason of (i) personal and/or bodily injuries suffered by any employee or employees of one insured hereunder for which another insured hereunder is or may be liable, or (ii) damage to property belonging to any insured hereunder for which another insured is or may be liable, then this policy shall cover such insured against whom a claim is made or may be made in the same

Insurer hereby waives all rights of subrogation against DNCP, its officers, directors and employees; and

Notwithstanding any provision of the policy, this policy may not be canceled, non-renewed or materially changed by the insurer without giving thirty (30) Days prior written notice to DNCP. All other terms and conditions of the policy remain unchanged.

An unconditional and irrevocable direct pay letter of credit issued by a bank acceptable to DNCP in a form and with substance acceptable to DNCP;

A payment or performance bond issued by a company acceptable to DNCP for payment to DNCP in the event of a material breach by Operator in a form and with substance acceptable to DNCP;

A corporate guarantee which DNCP, at its discretion, deems to be equivalent in quality to the security detailed in (a) and (b) above in a form and with substance acceptable to DNCP.

Any subsidiary of Operator may merge or consolidate with or into Operator or any wholly-owned subsidiary of Operator so long as, in any such merger or consolidation, Operator shall be the surviving or continuing entity;

Operator may consolidate or merge with any other entity if (i) the successor formed by or resulting from such consolidation or merger shall be a solvent entity organized under the laws of the United States of America or a state thereof or the District of Columbia, (ii) after giving effect to such merger or consolidation, no default under this Agreement shall exist, (iii) such successor or transferee entity shall expressly assume in writing the due and punctual performance and observance of all the terms, covenants, agreements and conditions of this Agreement and shall furnish DNCP an opinion of independent counsel to the surviving entity to the effect that each of the entities participating in such consolidation or merger or transfer of assets was, at the time thereof, duly created, validly existing, in good standing and otherwise in compliance with the applicable provisions of the corporation, partnership, trust or limited liability company laws of its respective state of formation, that the surviving entity is duly formed, validly existing and in good standing, that the surviving entity has all requisite power and authority to assume and perform this Agreement, that such assumption and performance have been duly authorized by all necessary corporate, partnership, trust or limited liability company action, as the case may be, on the part of the surviving entity and that compliance by the surviving entity with the terms of this Agreement will not conflict with, or result in any breach of any of the provisions of, or constitute a default under any agreement to which it is a party, or result in the creation or imposition of a lien upon the property of the surviving entity.

The non-performing Party gives the other Party written notice describing the particulars of the occurrence within seventy-two (72) hours of the beginning of said occurrence.

The suspension of performance is of no greater scope and of no longer duration than is required by the Force Majeure;

The non-performing Party uses its best efforts to remedy its inability to perform;

When the non-performing Party is able to resume performance of its obligations under this Agreement, that Party shall give the other Party written notice to that effect; and

The Force Majeure was not caused by or connected with any negligent or intentional acts, errors, or omissions, or failure to comply with any law, rule, regulation, order or ordinance or any breach or default of this Agreement.

The validity, applicability or amount thereof is being contested in good faith by appropriate actions or proceedings which will prevent the forfeiture or sale of any property of Operator or any material interference with the use thereof by Operator and

Operator shall set aside on its books reserves deemed by it to be adequate with respect thereto.

Any assignee shall be a Transferee as defined in Section 13.6 and shall be obligated expressly to assume assignor’s obligations hereunder;

No assignment shall impair any security given by Operator hereunder; provided that if, as of the time of such assignment, Operator has posted an irrevocable, direct pay letter of credit with DNCP pursuant to Section 13.5(a) hereof, an assignee may provide a letter of credit in the same amount and from equivalent or better issuer quality in substitution for the letter of credit theretofore posted by Operator hereunder;

Unless expressly agreed by the other Party, no assignment, whether or not consented to, shall relieve the assignor of its obligations hereunder in the event its assignee fails to perform.

The Capacity Purchase Payment shall be payable monthly and shall be the product of the applicable (i) Dependable Capacity (expressed in kW), (ii) Capacity Unit Price, and (iii) the number of days in the Month.

Capacity Unit Price shall equal the O&M Capacity Component, plus the Fixed Capacity Component, where: