HomeMy WebLinkAbout20060803IPC to ICIP 20-30.pdfAn IDACORP Company
IDAHO POWER COMPANY
O. BOX 70
BOISE, IDAHO 83707
RECEIVED
2006 AUG - 2 PH 4: 55
IDAHO PUBLIC
UTILITIES COMMISSION
Monica Moen
Attorney
August 2 , 2006
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise , Idaho 83720-0074
Re:Case No. IPC-06-
Idaho Power Company s Response to the Second Production Request
of the Industrial Customers of Idaho Power
Dear Ms. Jewell:
Please find enclosed for filing an original and two (2) copies of Idaho Power
Company s Response to the Second Production Request of the Industrial Customers of
Idaho Power regarding the above-described case.
I would appreciate it if you would return a stamped copy of this transmittal letter
to me in the enclosed self-addressed stamped envelope.
Very truly yours
(1;.
Monica B. Moen
MBM:sh
Enclosures
Telephone (208) 388-2692 Fax (208) 388-6936, E-mail MMoen~idahopower.com
BARTON L. KLINE ISB #1526
MONICA B. MOEN ISB #5734
Idaho Power Company
P. O. Box 70
Boise, Idaho 83707
Telephone: (208) 388-2682
FAX Telephone: (208) 388-6936
RECEIVED
2006 AUG - 2 PM 4:
IDAHO PUBliC
UTILITIES COMMISSION
Attorney for Idaho Power Company
Street Address for Express Mail
1221 West Idaho Street
Boise , Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A
CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY FOR THE RATE BASING
OF THE EV ANDER ANDREWS POWERPLANT.
CASE NO. IPC-06-
IDAHO POWER COMPANY'
RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF
IDAHO POWER
COMES NOW, Idaho Power Company ("Idaho Power" or "the Company
and , in response to the Second Production Request of the Industrial Customers of Idaho
Power to Idaho Power Company dated July 5 , 2006, herewith submits the following
information. By mutual agreement of the parties, the due date for responses to these
production requests has been extended to August 2 , 2006.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER Page
REQUEST FOR PRODUCTION NO. 20: Please provide a copy of the most
recent draft of Idaho Power s 2006 IRP.
RESPONSE TO REQUEST NO. 20: The requested information is
attached hereto as "Response to Request No. 20.
The response to this request was prepared by Karl E. Bokenkamp,
General Manager Power Supply Planning and Operations, Idaho Power Company, in
consultation with Monica 8. Moen , Attorney Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
Page 2
REQUEST FOR PRODUCTION NO. 20-A: Please explain the role gas
fired generation is expected to play in Idaho Power s 2006 IRP. Please provide all work
papers and documents in the Company s possession that address the role natural gas will
play in supplying the Company s load in the future.
RESPONSE TO REQUEST NO. 20-A: Gas-fired generation is principally
limited to a peaking role in Idaho Power s current draft of the 2006 IRP. In the draft
2006 IRP , Idaho Power s existing gas-fired peaking resources at the Evander Andrews
Power Complex and the Bennett Mountain facility continue to provide approximately
250 MW of peaking resource capacity. Beginning in 2008, the new peaking resource at
the Evander Andrews Power Complex (Danskin unit 1) will contribute approximately 170
MW of additional gas-fired peaking capacity, bringing the total gas-fired peaking
capacity to approximately 420 MW. Beginning in 2008, the 420 MW of natural gas-fired
combustion turbine peaking capacity will operate to meet summertime peak-hour loads
as well as providing capacity and energy to meet system needs throughout the year.
The four finalist portfolios selected for more detailed risk analysis in the
current draft of the 2006 IRP contain limited amounts of natural gas-fired generation.
With the possible exception of combined heat and power (CHP) projects, which are
likely to be natural-gas fired , there is only one natural gas-fired resource in the four
portfolios. Finalist portfolio F-3 calls for a 170 MW combustion turbine in 2018. The
preferred portfolio , F-2 does not include any resources specifically identified as natural
gas-fired , however, the portfolio includes 150 MW of CHP.
A document that outlines the composition of resources in each of the 2006
IRP finalist portfolios , and a graph indicating the levelized costs of several different
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
Page 3
types of resources, including a combined cycle combustion turbine, is also attached
hereto as "Response to Request No. 20-" The graph provides insight into future
resource decisions given a range of possible carbon adders and natural gas prices.
The response to this request was prepared by Karl E. Bokenkamp,
General Manager Power Supply Planning and Operations, Idaho Power Company, in
consultation with Monica B. Moen, Attorney II , Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
Page 4
REQUEST FOR PRODUCTION NO. 21: On page 19 of Mr. Said'
testimony, he states
While the Company is satisfied that the approximately $22.million
estimate for transmission and substation costs associated with this
Project is a reasonable upper limit estimate, no definitive studies
have been completed and the Company is not including
transmission costs in its Commitment Estimate.
Please provide a timeline and description of the definitive studies that must be completed
before the Company will be able to determine the actual amounts of transmission and
substation costs associated with this Project.
RESPONSE TO REQUEST NO. 21: The $22.8 million transmission cost
estimate was developed in accordance with the FERC-required Standard Large
Generation Interconnection Procedures (LGIP). This is the same procedure the
Company uses to develop transmission cost estimates for all transmission projects
whether for Idaho Power or for third parties. The details of the procedure are available
on Idaho Power s website. In summary, three studies are completed for a transmission
service application. The first is the Interconnection Feasibility Study. This study has
been completed for the proposed Evander Andrews facility and provided the cost
estimate that was used in the Company s selection process. The second study is the
System Impact Study. This study is underway and should be completed by October 1
2006. The final study is the Facilities Study. This study is the most detailed study that
uses the actual final design of the transmission line to establish the most definitive cost
estimate. It is anticipated that this final study should be available by the end of 2006.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
Page 5
The response to this request was prepared by F. Gregory Hall, Principal
Engineer, Idaho Power Company, in consultation with Monica B. Moen , Attorney II
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
Page 6
REQUEST FOR PRODUCTION NO. 21-A: Please explain and provide all
documentation relied upon that allowed the Company to conclude that it is "satisfied" that
the $22.8 million estimate is "reasonable.
RESPONSE TO REQUEST NO. 21-A: Please refer to the Company
response to the Commission Staff's Request for Production No. 28.
The response to this request was prepared by Roger Grim , Engineer
System Planning, Idaho Power Company, in consultation with Monica B. Moen
Attorney II , Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
Page 7
REQUEST FOR PRODUCTION NO. 22: On page 18 of Mr. Said'
testimony, he states that "(a)lthough the transmission system will require additional
investment in order to integrate the Project, those improvements will provide capacity
during all seasons and improve the reliability of the Company s transmission system.
Please provide all documents that Idaho Power relied on in making the determination, or
which demonstrate that the improvements will provide capacity during all seasons and
improve the reliability of the Company s transmission system.
RESPONSE TO REQUEST NO. 22: Please refer to the Company
Response to Staff Request for Production No. 72 in which the Company explained how
the transmission capacity would be provided and how transmission system reliability
would be improved by the facilities to be constructed with the proposed third unit at the
Evander Andrews Power Complex. This analysis is based on engineering judgment
and knowledge of the Company s transmission system.
The response to this request was prepared by Roger Grim , Engineer
System Planning, Idaho Power Company, in consultation with Monica B. Moen
Attorney II , Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
Page 8
REQUEST FOR PRODUCTION NO. 23: On page 15 of Mr. Said'
testimony, he states that "(f)orecasted natural gas prices from the 2004 IRP were used in
the bid evaluation." At any time during its evaluation of the various responses to Idaho
Power s RFP , did Idaho Power use an updated forecast of natural gas prices?
RESPONSE TO REQUEST NO. 23: Idaho Power did not use, nor was it
necessary to use, an updated forecast of natural gas prices to evaluate the responses
to the RFP. In bid evaluations, it is only necessary that the same gas price forecast be
used to calculate estimated variable operating costs for all of the bids to allow for a
consistent cost comparison among the bids.
The response to this request was prepared by Randy Henderson
Business Analyst, Idaho Power Company, in consultation with Monica B. Moen
Attorney II , Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
Page 9
REQUEST FOR PRODUCTION NO. 24: Should the Commission deny
Idaho Power s request for a certificate of public convenience and necessity, what supply or
demand reduction alternative options would the company turn to in the summer of 2008?
(If Idaho Power already answered , or intends to answer this question in response to ICIP'
Request for Production No. 18, please disregard this request.)
RESPONSE TO REQUEST NO. 24: Please refer to Idaho Power
Response to the Industrial Customers' Request for Production No. 18.
The response to this request was prepared by Monica Moen, Attorney II
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER Page 1 a
REQUEST FOR PRODUCTION NO. 25: On page 21 of Mr. Said'
testimony, he explains that "Siemens has located an existing, new Generator Step-
transformer (GSU) that is available for the Project at significant cost savings in comparison
to identical transformers that are being manufactured today." He also states that "(i)n
order to take advantage of the cost savings , the Company must act expeditiously." Please
provide copies of all documents that Idaho Power or its employees have reviewed that
demonstrate that the GSU is available at a significant cost savings in comparison to
identical transformers that are being manufactured today.
RESPONSE TO REQUEST NO. 25: Please see the documents attached
hereto as "Response to Request No. 25.
The response to this request was prepared by F. Gregory Hall , Principal
Engineer, Idaho Power Company, in consultation with Monica 8. Moen , Attorney II
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER Page
REQUEST FOR PRODUCTION NO. 26: Please provide all documents that
have been in the possession of Idaho Power which relate to the GSU referenced on page
21 of Mr. Said's testimony.
RESPONSE TO REQUEST NO. 26: Please refer to the Company
response to Request No. 25.
The response to this request was prepared by F. Gregory Hall , Principal
Engineer, Idaho Power Company, in consultation with Monica B. Moen , Attorney II
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER Page
REQUEST FOR PRODUCTION NO. 27: In Response to Request No. 41 of
Staff's First Production Request, the Company stated "(I)ast year during normal operations
the existing Danskin Power plant emitted a total of 0 tons Sulfur Dioxide, 5.72 tons of NOx
and 1.5 tons of CO." Please indicate the estimate of pollutant emissions for each plant if
both were operated to their full capacity under the existing air permits. Please indicate the
hours of operation for each plant if both were operated to their full capacity under the
existing air permits.
RESPONSE TO REQUEST NO. 27: The existing turbines at the Evander
Andrews Power Complex (the first two units at the Evander Andrews site) have a
combined emission allowance of 248 tons of NOx and 150 tons of CO per year. These
turbines could operate approximately 7000 hours per year before reaching this limit.
The proposed combustion turbine (the third unit at the Evander Andrews site) would be
granted an additional emission allowance of 248 tons per year for NOx and 248 tons of
CO per year. This third combustion turbine could operate approximately 5800 hours per
year.
The response to this request was prepared by F. Gregory Hall, Principal
Engineer, Idaho Power Company, in consultation with Monica B. Moen , Attorney II
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER Page
REQUEST FOR PRODUCTION NO. 28: In response to Request No. 61 of
Staff's First Production Request, the Company stated "Idaho Power did not receive any
bids in this RFP that would require energy to cross the Borah-West transmission
constraint." Assuming the plant is constructed , does the Company anticipate there will be
any impact on the Borah-West transmission constraint? If so , how much and what kind?
Please explain the answer fully.
RESPONSE TO REQUEST NO. 28: No, the Company does not
anticipate there will be any impact on the Borah-West transmission constraint if the
proposed plant is constructed.
The response to this request was prepared by Roger Grim, Engineer
System Planning, Idaho Power Company, in consultation Monica B. Moen , Attorney II
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER Page
REQUEST FOR PRODUCTION NO. 29: In response to Request no. 15 of
Staff's First Production Request, Idaho Power states
With the 2005 RFP, the Company was convinced that based upon
recent experience with the 2003 RFP process, it would receive
sufficient competitive bids, the Company has reasonable benchmarks
for peaking unit prices and that expenses associated with self-build
preparation could be avoided.
Please provide the "reasonable benchmarks for peaking unit prices" that the Company
had. Please provide a copy of all related documents, or, if none are available , a
description of what the reasonable benchmarks were and how they were calculated.
RESPONSE TO REQUEST NO. 29: The Company recently completed
an RFP that resulted in the selection of the Bennett Mountain Power Plant in Mountain
Home. The price information disclosed in the 2003 RFP , the actual costs of
constructing the Bennett Mountain Plant and the pricing information that the Company
received from the 31 competitive proposals during this RFP process provided
reasonable benchmarks for peaking unit prices. The documents containing the above-
described information are voluminous and may be reviewed in the Idaho Power Legal
Department.
The response to this request was prepared by F. Gregory Hall , Monica B.
Moen , Attorney II , Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER Page
REQUEST FOR PRODUCTION NO. 30: In Response to Request No. 40 of
Staff's First Production Request, Idaho Power describes the new permits that will need to
be obtained before constructing the Evander Andrews plant. Is the cost of obtaining these
permits included in the Company s Commitment Estimate of $60 million? Are the
expected costs of complying with permit conditions included in the Company
Commitment Estimate of $60 million?
RESPONSE TO REQUEST NO. 30: Yes, the costs of obtaining these
permits and the expected costs of complying with permit conditions are included in the
Company s Commitment Estimate of $60 million.
The response to this request was prepared by F. Gregory Hall , Principal
Engineer, Idaho Power Company, in consultation with Monica B. Moen , Attorney II
Idaho Power Company.
DATED at Boise, Idaho, this 2nd day of August 2006.
(fi.
MONICA 8. MOEN
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER Page
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 2nd day of August 2006 , I served a true and COlTect
copy of the within and foregoing IDAHO POWER COMPANY'S RESPONSE TO THE
SECOND PRODUCTION REQUEST OF INDUSTRIAL CUSTOMERS OF IDAHO
POWER upon the following named parties by the method indicated below, and addressed to the
following:
Commission Staff
Donovan Walker
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington (83702)
O. Box 83720
Boise, Idaho 83720-0074
X- Hand Delivered
u.s. Mail
Overnight Mail
FAX
Email Donovan.walker(g)uc,idaho.
Industrial Customers of Idaho Power
Peter 1. Richardson, Esq.
Richardson & O'Leary
515 N. 27m Street
O. Box 7218
Boise, Idaho 83702
Hand DeliveredX- u.s. Mail
Overnight Mail
FAX
Email eter(g)richardsonandolear com
Don Reading
Ben Johnson Associates
6070 Hill Road
Boise, Idaho 83702
Hand Delivered
-.::L u.S. Mail
Overnight Mail
FAX
--A- Email dreadin (g)minds rin com
(fi.
Monica B. Moen
CERTIFICATE OF SERVICE , Page
ID AH POWER CO MP ANY
CASE NO. IPC-06-
SECOND PRODUCTION REQUEST
OF IDAHO POWER CUSTOMERS
RESPONSE TO
REQUEST NO. 20
THE RESPONSE TO
REQUEST 20 2006 IRP
DRAFT , IS ON A DISC;
PLEASE SEE FILE
IDAHO POWER COMPANY
CASE NO. IPC-O6-
SECOND PRODUCTION REQUEST
OF IDAHO POWER CUSTOMERS
RES PONS E
REQUEST NO. 20-
:i
:
to
)
0:
:Q..
::
:
:
i
..
J
LE
V
E
L
I
Z
E
D
P
R
I
C
E
F
O
R
G
E
N
E
R
A
T
I
N
G
R
E
S
O
U
R
C
E
S
VS
.
CA
R
B
O
N
A
D
D
E
R
12
0
11
0
10
0
..
.
.
..
.
.
..
.
.
..
.
.
..
.
.
..
.
.
..
.
.
.
.
..
-
..
.
.
..
.
.
..
.
.
..
.
.
..
.
.
..
.
.
..
.
.
..
.
.
.
.
..
.
.
..
-
..
.
.
..
.
.
-
..
-
..
.
.
-
..
.
.
..
.
.
-
-
-
-
..
.
.
-
-
-
..
.
.
..
.
.
..
.
.
..
-
..
.
.
..
.
.
..
.
.
-I
G
C
C
..
.
.
-I
G
C
C
wI
C
O
2
S
e
q
u
e
s
t
r
a
t
i
o
n
-S
u
p
e
r
c
r
i
t
i
c
a
l
P
C
-S
u
b
c
r
i
t
i
c
a
l
P
C
-
-
-
C
C
C
T
-
2
0
0
6
1
R
P
E
X
P
G
A
S
L
E
V
E
L
I
Z
E
D
~
$
7
.
88
/
M
M
B
t
u
-
-
-
C
C
C
T
-
2
0
0
6
I
R
P
H
I
G
H
G
A
S
L
E
V
E
L
I
Z
E
D
~
$
1
0
.
4
8
/
M
M
B
t
u
..
.
.
CC
C
T
-
2
0
0
6
I
R
P
L
O
W
G
A
S
L
E
V
E
L
I
Z
E
D
(Q
J
$
6
.
19
/
M
M
B
t
u
30
CA
R
B
O
N
A
D
D
E
R
($
/
T
O
N
CO
2
E
M
I
S
S
I
O
N
)
IDAHO POWER COMPANY
CASE NO. IPC-O6-
SECOND PRODUCTION REQUEST
OF IDAHO POWER CUSTOMERS
RESPONSE TO
REQUEST NO. 25
Page 1 of 1
Hall Greg
From: Scott Ed C AS3 (ed.scott(g1siemens.com)Sent: Thursday, January 19 , 200611:45 AMTo: Hall, GregCc: Scott Ed C AS3; Pope Mark T E711; Howington Kendall M E711; Heller Jim W AS5
Subject: Inventoried Gen Step Up Transformer/Evander Andrews 501 F Project
Importance: High
Greg in follow up to our conversation this morning...
501 F GSU Transformer Evander Andrews Conceptual offering (subject to availability and final terms)
Price: -$700 000.
DownpaymenUholding fee: -$70 000.00 payable now
Balance due: -$ 630 000.00 by April 1 , 2006
Other costs: Acceptance testing !Warranty reinstatement IStoreage/Transportation - TBD and payable upon services rendered.
If Idaho Power utilizes this option, the impact to the $49 700 000.00 price as described per letter dated Dec 12, 2005 would be a
reduction of -$550 000.00.
Thanks and if you have any questions, please give me a calL...
81212006
SIEMENS Idaho Power
Idaho Power - Evander Andrews
GSU Transformer
Capitalized terms in this Appendix shall have the meanings set out in the Engineering,
Procurement and Construction Agreement ("Agreement"
1. Generator Purchase
a. Total Cost -- The cost of the Generator Step Up Transformer ("Equipment") is
$700,000 USD. Storage and warranty fees are $108 000 USD. The total cost
of purchasing. storing and warranting the Equipment is $808,000 USD.
b. Contractor Payments - To reserve the Equipment, Contractor agrees to pay a
ten percent (10%) down payment ($70,000 USD) on the cost of the Equipment
to Equisales Associates, Inc. of Houston , Texas ("Owner ) within thirty (30) days
after the Effective Date of the Agreement. The remaining balance ($630,000
US D) for the Equipment will be paid by Contractor to the Owner within ninety
(90) days after the Effective Date of the Agreement. Title to and the
associated risk of loss of the Equipment shall transfer to Contractor on the date
of the Contractor's $630,000 payment from Contractor to Owner.
c. Warranty and Storage - Upon the completion of payment of the Equipment cost
by Contractor to Owner and transfer of title and the associated risk of loss from
Owner to Contractor, the Equipment will be stored by Contractor. Upon
inclusion of the Equipment into the Project, Contractor will warrant the
Equipment in accordance with the Equipment warranty terms and conditions of
the Agreement. The storage and warranty fees of $108,000 USD is included in
the Agreement Purchase Price.
d. Transportation -Contractor will provide and coordinate the transportation of the
Equipment from the storage location identified in Paragraph 1 (c) herein to the
Project Site. The associated cost of said transportation is included as part of the
Agreement Purchase Price.
e. Ownership -
1. If (i) the Agreement is executed on or before March 31, 2006 or such date
as mutually agreed to by the Parties and (ii) Purchaser provides a Notice
to Proceed on or before June 30, 2006 or such date as mutually agreed to
by the Parties, then the Equipment will be provided in accordance with the
terms and conditions of the Agreement. Title and the associated risk of
Siemens Power Generation , Inc.
Confidential
Appendix Q, GSU Transformer
~/-
Page: 1 of 4
Q'I
\.-
Rev 2
dX"
SIEMENS Idaho Power
Idaho Power - Evander Andrews
loss of the Equipment will be transferred to Purchaser in accordance to the
terms of the Agreement, or
If the Purchaser does not provide a Notice to Proceed on or before
September 15, 2006, then Purchaser will purchase the Equipment from
Contractor no later than September 30, 2006. The sale of the Equipment is
predicated upon an "as is, where is" basis and Contractor offers no
warranties of any kind , whether statutory, express, or implied (including all
warranties of merchantability and fitness for a particular purpose and all
warranties arising from course. of dealing or usage of trade). Title and the
associated risk of loss of the Equipment will transfer to Purchaser upon
payment.
f. Purchaser Payment - Provided Purchaser issues Contractor a Notice to
Proceed on or before June 30, 2006 or such date as mutually agreed to by the
Parties, Purchaser agrees to pay Contractor $700,000 USD for the purchase of
the Equipment. Contractor will provide an invoice on June 30, 2006 for the
purchase price of the Equipment. Payment is due within 30 days of Purchaser's
receipt of invoice. However, if the Notice to Proceed is not executed by
Purchaser on or before September 15, 2006, or as mutually agreed to by the
Parties, Purchaser agrees to pay Contractor the $700,000 purchase price of the
Equipment and Contractor s reasonably-incurred storage expenses ~or the
Equipment. Five (5) days after September 30, 2006 or as amended by the
Parties, Contractor will provide to Purchaser an invoice, including
documentation for reasonably-incurred storage expenses, indicating the total
amount owed. Payment is due within 30 days of receipt of invoice.
Siemens Power Generation , Inc.
Confidential
Appendix Q, GSU Transformer
.-:::.
~IIA
Page: 2 of 4
~\
Rev 2