Public Utility District No 1 of Snohomish Co 12/6/2017 Amendment

II. Alternative Trigger for City Payment of Joint Costs of Project A. The provisions set forth in Article VI, Section 3 (Payment for Joint Costs for Sultan Project) of the 1981 Amended Agreement are hereby supplemented by providing an alternative event requiring City's payments for its $10 million share of Stage II. B. City shall pay its $10 million share of Stage II when a mass balance of water inflow and outflow of Spada Lake Reservoir indicates that City has, during three separate and distinct water years, exhausted the 11 billion gallons of capacity of Culmback Dam Stage I (34,245 ac-ft) as well as 2.6 billion gallons of storage within Lake Chaplain (8,000 ac-ft) ("Capacity Exhaustion"). Capacity Exhaustion will be determined by a hydrologic model of the Sultan/Culmback water system run using the Stage 1 storage, the Rendelman instream flow requirements, actual inflow, and actual water diversions. In making such determination,the following provisions apply: 1. Inflow to Spada Lake Reservoir is determined by a multiplier of the South Fork Sultan River Gage (USGS gage 12137290) or its successor gage. 2. Outflow from Spada Lake Reservoir is defined as the sum of(a) water delivered to City as measured at City's intake components (currently Lake Chaplain Portal 2 and Water Treatment Plant Bypass Valve), and (b) water released from Culmback Dam for fish flows under the 1971 Rendelman rule curve. 3. A water year is July 1 through June 30. 4. District will use a computerized hydrologic model of the actual daily volumetric changes to the Spada Lake Reservoir. 5. No payment is required upon the first year of Capacity Exhaustion. 6. City shall pay District$5 million within one year of the second year of - Capacity Exhaustion regardless of whether this year is consecutive to the first year of Capacity Exhaustion. 7. City shall pay District the remaining $5 million within one year of the third year of Capacity Exhaustion regardless of whether this year is consecutive to the second year of Capacity Exhaustion. 2017 Amended Agreement(Henry M.Jackson Hydroelectric Project) Page 2