Stipulation 5-6-02.doc

DRAFT
5/6/02

STIPULATION AND SETTLEMENT AGREEMENT

FMC Corporation, Astaris LLC and Astaris Idaho LLC (hereinafter collectively referred to as “FMC/Astaris”), Idaho Power Company (“Idaho Power”), the Staff of the Idaho Public Utilities Commission (“Commission Staff”), the Industrial Customers of Idaho Power (“ICIP”), and the Idaho Irrigation Pumpers Association (“Irrigation Pumpers”) (all hereinafter collectively referred to as the “Parties”), by and through their undersigned representatives, hereby agree to the following Stipulation and Settlement Agreement in the above-captioned proceeding.
This Stipulation and Settlement Agreement addresses and resolves the disputes between the Parties regarding (a) the December 30, 1997 Electric Service Agreement (“ESA”) between Idaho Power and FMC/Astaris providing for the retail sale of electricity from Idaho Power to the FMC/Astaris Pocatello facility, (b) the March 15, 2001 Letter Agreement (“Letter Agreement”) amending the ESA to provide for Voluntary Load Reduction (“VLR”) payments from Idaho Power to FMC/Astaris with respect to 50 MW of electricity FMC/Astaris agreed to no longer consume at the Pocatello facility and (c) the declaratory judgment action filed by FMC/Astaris against Idaho Power (captioned as Case No. CV-OC-0108506D).
Resolution of the 120 MW take-or-pay commitment has been divided into two parts and will be referred to separately as: 70 MW of power and 50 MW of power.
WHEREFORE, the Parties stipulate and agree as follows:
1. FMC/Astaris will make the following payments to Idaho Power for 70 MW of take-or-pay power under the ESA and Letter Agreement:
One Week After Final Issuance
of Non-Appealable Order by Commission $5,377,681.25
September 30, 2002 $5,377,681.25
December 27, 2002 $5,377,681.25

2. The payments made by FMC/Astaris to Idaho Power for the take-or-pay 50 MW and the payments made by Idaho Power to FMC/Astaris for the voluntary load reduction of 50 MW will be as follows:

Billing Month * FMC/Astaris
To
Idaho Power
  Take-or-Pay   Idaho Power
To
FMC/Astaris
      VLR      
May $1,459,239.78 $2,356,405.18 June $1,418,570.58 $2,006,408.35 July $1,459,239.78 $4,184,737.66 August $1,459,239.78 $5,032.403.78 September $1,418,570.58 $4,272,137.30 October $1,460,934.33 $3,095,482.49 November $1,418,570.58 $2,971,732.71 December $1,459,239.78 $3,053,393.81 January $1,459,239.78 $2,695,078.80 February $1,337,232.18 $2,209,719.33 March $1,459,239.78 $2,184,122.16
* The amount for any billing month will be due on the 10th day of the succeeding month unless that day is a Saturday or Sunday, in which event the amount will be due the following Monday. For example, the amount for the billing month of May, 2002, will be due June 10, 2002.

3. Payment Procedure. All amounts owed by FMC/Astaris to Idaho Power or by Idaho Power to FMC/Astaris shall be due and payable on the due date or within ten (10) days following the issuance of an invoice (if an invoice is required to be issued) from the Party requesting payment. Payment will be made by electronic transfer of funds. Idaho Power will provide FMC/Astaris with current ABA routing numbers and other necessary instructions to facilitate the electronic transfer of funds. FMC/Astaris will provide Idaho Power with current ABA routing numbers and other necessary instructions to facilitate the electronic transfer of funds.
4. Interest/Late Payment. If any payment provided for in this Stipulation and Settlement Agreement is not paid by the due date, interest on the unpaid amount, both principal and interest, shall accrue daily at the rate of twelve percent (12%) per annum or one percent (1%) per month.
5. Once the Commission has issued its final non-appealable order in this proceeding, FMC/Astaris will obtain electric service for its Pocatello facility under the appropriate rate schedule(s) of Idaho Power. Since FMC/Astaris is consuming at the present time more than 1 MW, the appropriate tariff will be Schedule 19. FMC/Astaris will execute the standard Schedule 19 contract, a copy of which is attached. It is understood and agreed that charges to FMC/Astaris will be under applicable rate schedules.
6. Once the final non-appealable order of the Commission has been issued in this proceeding:
(a) the December 30, 1997 Electric Service Agreement between Idaho Power and FMC/Astaris providing for the retail sale of electricity from Idaho Power to the FMC/Astaris Pocatello facility, and
(b) the March 15, 2001 Letter Agreement amending the ESA to provide for Voluntary Load Reduction payments from Idaho Power to FMC/Astaris with respect to the 50 MW of electricity FMC/Astaris agreed to no longer consume at the Pocatello facility,
will be canceled, and neither FMC/Astaris nor Idaho Power will have any obligations under those Agreements. It is understood and agreed that there shall be no contract termination charges, demand management charges, exit fees or other costs or fees of any kind whatsoever imposed upon FMC/Astaris or affiliates by Idaho Power in connection with reduced electricity demand, shutdown or closure of the Pocatello facilities, or termination, cancellation or expiration of the ESA and Letter Agreement, except for inclusion of any such charges, costs or fees in standard tariff rates under which FMC/Astaris may take electric service. It is also understood and agreed that all obligations of Idaho Power to provide service to FMC/Astaris or any successor at the Pocatello site under the ESA or the ESA Letter Agreement shall be cancelled, and any facilities not required to provide electric service to FMC/Astaris or its successors or assigns under the ESA or the ESA Letter Agreement, except for facilities required to provide for tariff schedule service, may be removed by Idaho Power.
7. Once the Commission has issued its final non-appealable order, FMC/Astaris will dismiss with prejudice its declaratory judgment action now pending before the Idaho District Court.
8. The Parties agree that the term “final non-appealable order of the Commission” as used in this Stipulation and Settlement Agreement shall mean the final non-appealable order of the Commission issued after (1) either the time for filing petitions for reconsideration from the Commission’s initial order has expired, or (2) the order of the Commission ruling on any petitions for reconsideration that have been filed as a result of the Commission’s initial order has been issued by the Commission and the time for filing an appeal has expired.

REVENUE REQUIREMENT/RATEMAKING ISSUES

The Parties agree that resolution of certain revenue requirement/ ratemaking issues is necessary in order to effectuate the Stipulation and Settlement Agreement resolving the FMC/Astaris take-or-pay obligation and the Idaho Power Voluntary Load Reduction agreement with FMC/Astaris. Accordingly, the Parties agree that the Commission, in its order approving the Stipulation and Settlement Agreement, will provide for the resolution of the revenue requirement/ratemaking issues that are affected by the Agreement as follows:
9. The ESA between Idaho Power and FMC/Astaris and the Letter Agreement amending the ESA will be referred to as the ESA-Letter Agreement Obligation when setting forth the disposition of the revenue requirement/ ratemaking issues.
10. The FMC/Astaris ESA-Letter Agreement Obligation will be excluded from test year analyses for any general rate case.
11. Through March, 2003 the FMC/Astaris ESA-Letter Agreement Obligation of 120 MW will be reflected “as served” for Power Cost Adjustment purposes (i.e. no reduced load at $16.84 per megawatt hour).
12. After March, 2003 the FMC/Astaris ESA-Letter Agreement Obligation load will be removed from the Power Cost Adjustment normalized load.
13. After March, 2003, the FMC/Astaris ESA-Letter Agreement Obligation load of 120 MW will no longer be reflected “as served” for Power Cost Adjustment purposes.
14. The Idaho Power to FMC/Astaris VLR payments will be included in the 2002/2003 Power Cost Adjustment true-up.
15. Idaho Power has agreed that it will reduce the FMC/Astaris 70 MW take-or-pay requirement by $6 million. Idaho Power agrees that it will not seek to recover $5 million of this credit in any proceeding before the Idaho Public Utilities Commission. The parties agree that the remaining $1 million of FMC/Astaris take-or-pay credit will be included in the 2002/2003 Power Cost Adjustment true-up without any reduction as follows:
On September 30, 2002 $500,000.00
On December 27, 2002 $500,000.00

16. The Idaho jurisdictional Power Cost Adjustment VLR savings of Idaho Power will be credited monthly to the Power Cost Adjustment true-up as follows:

Month * Idaho Jurisdictional
VLR Credit
May, 2002 $29,401.78 June, 2002 $25,034.73 July, 2002 $52,214.59 August, 2002 $62,791.24 September, 2002 $53,305.11 October, 2002 $38,623.53 November, 2002 $37,079.46 December, 2002 $38,098.37 January, 2003 $33,627.54 February, 2003 $27,571.52 March, 2003 $27,252.14
TOTAL $425,000.00
* The credit will be applied to the Power Cost Adjustment account on the 10th day of the month following that month. For example, the VLR credit for May, 2002 will be credited to the Power Cost Adjustment on June 10, 2002.

17. The DSM amount will continue to be amortized at current levels until the next general rate proceeding, at which time the remaining DSM unamortized amount (including the FMC/Astaris portion) will be reallocated among existing customers of Idaho Power subject to the jurisdiction of the Idaho Public Utilities Commission.
18. Any securitization amount or Power Cost Adjustment change ordered by the Commission after May 1, 2002, will not apply to FMC/Astaris except for changes made to the rate schedules under which FMC/Astaris will receive electric service that are referenced in Paragraph 5 of this Stipulation and Settlement Agreement.
ADDITIONAL PROVISIONS

19. If any legal proceedings are instituted to enforce or interpret any term(s) of this Agreement, each prevailing Party shall be entitled to recover all litigation expenses, including but not limited to, reasonable attorneys’ fees, expert fees, disbursements, or any other costs or expenses. The Parties agree that this provision shall not apply to the State of Idaho, or the Idaho Public Utilities Commission.
20. Each of the respective Parties by their respective execution of this document acknowledge and agree that upon full and complete compliance of each and every term of this Agreement by the Party whose compliance is required, this Agreement shall constitute a release for each Party, and for each respective Party’s successor(s) and assign(s) and will forever discharge the other Parties together with that Party’s successor(s), and all other persons, firms, corporations, associations or partnerships of and from any and all claims, actions, causes of action, demands, rights, damages, costs, loss of service, expenses and compensation whatsoever, which any Party presently has, may have, or which any party may acquire on account of or in any way growing or arising out of the matters referenced above.
21. The Parties have negotiated this Stipulation and Settlement Agreement as an integrated whole. Accordingly, in the event this Stipulation and Settlement Agreement is not approved by the Commission in its entirety, then neither the Commission, nor any party to the Stipulation, shall be bound, or prejudiced by the terms of the Stipulation, and the Stipulation shall be null and void and each Party shall be entitled to proceed in any manner as it deems appropriate, except as provided in this paragraph. Notwithstanding the foregoing, if this Stipulation and Settlement Agreement is not approved by the Commission and an order is subsequently issued by the Commission acting upon the Staff’s petition to reduce the payments made by Idaho Power under the VLR, FMC/Astaris agrees that with respect to any issue it may raise as to retroactive ratemaking, such order shall be deemed to have been issued on April 16, 2002 rather than the date it is actually issued.
22. All negotiations related to this Stipulation and Settlement Agreement are privileged and no party shall be bound by any position asserted in negotiations. Neither the execution of this Stipulation and Settlement Agreement, nor any order adopting the Stipulation and Settlement Agreement shall be deemed to constitute the basis of an estoppel or waiver by any Party with respect to any matter not specifically addressed herein. Except as provided for in this Stipulation and Settlement Agreement, all Parties reserve the right to take any position they deem reasonable in any forum in any future proceeding involving Idaho Power and its rates and services.
23. This Stipulation may be executed in one or more identical counterparts. Upon execution by the Parties, each executed counterpart shall have the same force and effect as an original document signed by all Patties. Any signature page of this Stipulation may be detached from any counterpart of this Stipulation without impairing the legal effect of any signature thereon and may be attached to another counterpart of this Stipulation identical in form hereto but having attached to it one or more signature pages.
CONCLUSION
The Parties recognize the complexity of the issues presented in this case, the amount of resources and effort expended by the Parties thus far, and the length of time that has elapsed since this case was first initiated. Thus, the Parties agree that this Stipulation presents an opportunity to finally resolve the issues in this case. This Stipulation is made to compromise contested claims and is entered solely for the purpose of avoiding expense, inconvenience, and uncertainty of further litigation. Furthermore, the Parties agree that this Stipulation represents a reasonable resolution of the issues in this case and believe that it is in the public interest for the Commission to approve it.

DATED at Boise, Idaho, this _____ day of May, 2002.

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