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

8. If, at any time, Time of Minimum Water Usage (defined in Article I, 1981 Amended Agreement and used in Article IV, Section 3, 1981 Amended Agreement) occurs, City shall, within one year of the actual occurrence, pay District the remaining unpaid balance of its $10 million share of Stage II. 9. City's payment for Stage II of Culmback Dam does not alter or abridge District's sole responsibility for, and operation of, the Jackson Project including Spada Lake, which is subject to the District's license issued by the Federal Energy Regulatory Commission (FERC). III. Project Action and Cost Sharing A. Definitions. The following definitions apply to Part III, Project Action and Cost Sharing: Adjusted annually for inflation: Adjusted on or after April 1 of each year, beginning April 2018, and effective January 1 of said year,based on the percent change (up or down) in the Specified Index. Administrative: An action (other than Maintenance,Insurance, Construction, or Operation) that supports the delivery of water to the Parties. Administrative actions include payment of fees (e.g. lease fees paid to the State of Washington) and execution of an ongoing program required by industry standard or regulatory action (e.g. a dam safety emergency action plan). Component: A single element of a Facility, such as an individual manufactured piece of equipment or collection of equipment within a discrete element of a Facility. Construction: Action (other than Maintenance,Administrative,Insurance, or Operation) to erect new infrastructure of a functionality that did not previously exist, or to replace an existing Facility, Component, or portion thereof due to Level of Service failure when such replacement costs $50,000 or more (in 2017 dollars, adjusted annually for inflation) and is less expensive than repair, and which has Value to both City and District. Facility: A single element of the Project, having a specific independent functionality, as distinguished from other elements. Insurance: Costs to insure Stage I, Stage II, and Recreation Sites. Level of Service: Criteria for performance requirements set for a Facility or Component. The decision to repair or replace a Facility or portion thereof partly rests on whether it has failed one or more level of service criteria (e.g. the demand on a facility may exceed its capacity, the facility may no longer meet 2017 Amended Agreement(Henry M.Jackson Hydroelectric Project) Page 3