1.   POWER COST ADJUSTMENT:

APPLICABILITY:      Applicable to all rate schedules, unless noted in the rate schedule.

ADJUSTMENT OR THE COST OF PURCHASED POWER:       The foregoing charges shall be increased or decreased by the amount in cents, or fraction thereof, by which the average cost of power per kWh purchased was paid to suppliers of power during the previous month exceeds or is less than 57.00 mills and calculated in accordance with Formula (2):

P A =   A x (1 / 1-B)

Where:                        P.A =   Power cost adjustment to be made per kWh billed.

A =   The amount in cents or fraction thereof by which the average cost of power per kWh purchased was paid to suppliers of power by the utility during the previous month preceding the end of the billing period for which kWh usage is billed exceeds or is less than 57.00 mills per kWh.

B =   The average percentage of power losses expressed decimally for the year ending December 31^st preceding as shown on the REA Form 7.

2.   POWER FACTOR:

APPLICABILITY:      Applicable to Large Commercial and Large Power rate schedules, unless noted in the rate schedule.

POWER FACTOR ADJUSTMENT:            The consumer shall at all times take and use power in such a manner that the power factor shall be as near one hundred percent (100%) as practicable.  The total charges under this agreement shall be adjusted to correct the average power factor if lower than ninety percent (90%).  Such adjustment will be made by increasing the total charges by one-percent (1%) for each one-percent (1%) by which the average power factor is less than ninety percent (90%) lagging.

3.   DEBT COST ADJUSTMENT:

ADJUSTMENT FOR THE COST OF DEBT:         The foregoing charges shall be increased or decreased by the amount in cents or fraction thereof, by which the cost of debt per kWh sold exceeds or is less than $168,067 and calculated in accordance with the following formula:

                        D.C.A. =          ((AxB) + C) / D

Where:

                        D.C.A. =          Debt cost adjustment to be made per kWh sold.

  A =          The amount by which the most recent two quarters interest differs from one-half the interest expense identified in the most recent Cost of Service Study approved by the Board.

  B =          The Times Interest Earned Ratio authorized in the most recent rate study as approved by the Board.

  C =          Over or under collections of prior D.C.A. revenues.

  D =          Energy sales for the six month period, one year previous to the recovery period in which the debt adjustment factor will be in effect.

4.      GROSS RECEIPTS TAX CHARGE:

All charges are subject to the Gross Receipts Tax levied by the State of Oklahoma.  After the computation of all charges, the total bill so computed will be adjusted to recover this tax.  Currently, the tax is two percent (2%) as of December 25, 2004.  All charges, including minimum charges, will be multiplied by 0.02 in calculating the net bill.  If the State of Oklahoma changes the tax rate, a corresponding change will be made to the calculation for taxes applied to each bill.

5.      OTHER TAXES:

All taxes, other than Gross Receipts Tax, that have or will be levied by a governmental sub-division (i.e.: City, County or State taxing authorities) will be added as a separate item on the electric bills of only the customers within the governmental sub-division assessing the tax.