SMUD Debt Rating Further Clarified

Please use the following debt measurement for the Physical Power, ISDA, and
Enfolio Master Firm contracts for SMUD:

MAC occurs if any of the following occurs:
(1) uninsured, Electric Revenue Bonds are rated below BBB- or are no longer
rated by S&P
(2) SPUR (underlying rating) of any Electric Revenue Bonds below BBB-

Provision 2 above does not need to have the additional clause of "or is no
longer rated by S&P".

Please call w/any questions.

Thanks,
Tracy
503-464-8755