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Home My WebLink About20200218IPC to Staff Attachment No. 2 - JOOA.PDFJOINT OWNERSHIP AND OPERATING AGREEMENT BETWEEN IDAHO POWER COMPANY AND PACIFICORP DATED AUGUST 22, 2019 TABLE OF CONTENTS Page -i- ARTICLE I DEFINITIONS; RULES OF INTERPRETATION ............................................ 3 1.1 Definitions........................................................................................................ 3 1.2 Rules of Construction. ................................................................................... 11 ARTICLE II TERM .................................................................................................................. 12 2.1 Effectiveness of this Agreement. ................................................................... 12 2.2 Term. .............................................................................................................. 12 2.3 Termination. ................................................................................................... 12 2.4 Effect of Termination. .................................................................................... 12 ARTICLE III TRANSMISSION FACILITIES OWNERSHIP INTERESTS .................... 13 3.1 Ownership Interests. ...................................................................................... 13 3.2 Capacity Allocations. ..................................................................................... 13 3.3 Adjustment of Capacity Allocations and Ownership Interests. ..................... 14 3.4 Qualified Owner............................................................................................. 16 3.5 No Right to Use. ............................................................................................ 16 3.6 Payments. ....................................................................................................... 16 3.7 Waiver of Partition Rights. ............................................................................ 17 3.8 Nonexclusive License to Enter and Use Real Property. ................................ 17 ARTICLE IV OPERATOR OF TRANSMISSION FACILITIES ........................................ 19 4.1 Appointment of Operator. .............................................................................. 19 4.2 Authority of Operator. ................................................................................... 19 4.3 Delegation of Responsibilities. ...................................................................... 20 4.4 Governmental Authorizations. ....................................................................... 20 4.5 Audit. ............................................................................................................. 21 4.6 Insurance. ....................................................................................................... 22 4.7 Invoices. ......................................................................................................... 22 4.8 Disputed Amounts. ........................................................................................ 23 4.9 Assistance. ..................................................................................................... 24 4.10 Remedies. ....................................................................................................... 24 ARTICLE V OPERATION AND MAINTENANCE OF TRANSMISSION FACILITIES ................................................................................................ 24 5.1 Compliance; Standard of Work. .................................................................... 24 5.2 Operation and Maintenance; Outages and Outage Coordination; Capital Upgrades and Improvements. ............................................................ 25 5.3 Requests for Generation or Transmission Interconnection Service. .............. 27 5.4 Requests for Third-Party Joint-Use of Transmission Facilities. .................... 27 ARTICLE VI TRANSMISSION FACILITIES CAPITAL UPGRADES PROPOSED BY AN OWNER .................................................................... 28 6.1 Capital Upgrades. ........................................................................................... 28 6.2 McNary Transmission Project. ...................................................................... 30 TABLE OF CONTENTS (continued) Page -ii- ARTICLE VII PHYSICAL DAMAGE TO TRANSMISSION FACILITIES; CONDEMNATION ..................................................................................... 31 7.1 Rebuilding Damaged Facilities. ..................................................................... 31 7.2 Decision not to Rebuild. ................................................................................ 32 7.3 Purchase of Ownership Interest. .................................................................... 32 7.4 Cooperation. ................................................................................................... 33 7.5 Condemnation. ............................................................................................... 33 ARTICLE VIII RETIREMENT AND DECOMMISSIONING OF TRANSMISSION FACILITIES................................................................. 34 8.1 Decision to Retire Transmission Facilities. ................................................... 34 8.2 Costs of Decommissioning. ........................................................................... 34 8.3 Decommissioning Notice; Purchase of Ownership Interest. ......................... 34 8.4 Cooperation. ................................................................................................... 35 ARTICLE IX TRANSMISSION SYSTEM BOUNDARIES ................................................. 35 9.1 Points of Interconnection; Points of Balancing Authority Area Adjacency. ..................................................................................................... 35 9.2 E-Tags. ........................................................................................................... 35 9.3 Dynamic Transfer Capability Rights. ............................................................ 35 9.4 Jim Bridger Pseudo Tie. ................................................................................. 36 9.5 Electric Losses. .............................................................................................. 36 9.6 Jim Bridger Project Generation RAS. ............................................................ 36 ARTICLE X TRANSMISSION SYSTEMS OPERATION AND MAINTENANCE ......... 37 10.1 Service Conditions. ........................................................................................ 37 10.2 Survival. ......................................................................................................... 37 ARTICLE XI FORCE MAJEURE .......................................................................................... 38 11.1 Force Majeure Defined. ................................................................................. 38 11.2 Effect of Force Majeure. ................................................................................ 38 ARTICLE XII EVENTS OF DEFAULT ................................................................................. 39 12.1 Event of Default. ............................................................................................ 39 12.2 Cure by Non-Defaulting Party. ...................................................................... 40 12.3 Remedies. ....................................................................................................... 40 ARTICLE XIII REPRESENTATIONS AND WARRANTIES ............................................ 40 13.1 Representations and Warranties of Idaho Power. .......................................... 40 13.2 Representations and Warranties of PacifiCorp. ............................................. 41 ARTICLE XIV INDEMNIFICATION .................................................................................... 42 14.1 Indemnities. .................................................................................................... 42 14.2 Notice and Participation. ................................................................................ 42 TABLE OF CONTENTS (continued) Page -iii- 14.3 Net Amount. ................................................................................................... 44 14.4 No Release of Insurers. .................................................................................. 44 14.5 Mitigation. ...................................................................................................... 44 14.6 Assertion of Claims........................................................................................ 44 14.7 Survival of Obligation.................................................................................... 44 14.8 Limitation on Liability. .................................................................................. 44 ARTICLE XV PROPRIETARY INFORMATION ............................................................... 45 15.1 Disclosure of Proprietary Information Prohibited. ........................................ 45 15.2 Disclosure by Representatives. ...................................................................... 45 15.3 Permitted Disclosures. ................................................................................... 45 15.4 Injunctive Relief............................................................................................. 46 15.5 Publicity. ........................................................................................................ 46 15.6 Proprietary Information Defined.................................................................... 46 15.7 Survival. ......................................................................................................... 47 ARTICLE XVI TAXES ............................................................................................................. 47 16.1 No Partnership. .............................................................................................. 47 16.2 761 Election. .................................................................................................. 47 16.3 Responsibility for Taxes. ............................................................................... 47 16.4 Indemnification. ............................................................................................. 48 16.5 Determination of Depreciation and Other Matters. ....................................... 48 ARTICLE XVII DISPUTES ..................................................................................................... 48 17.1 Exclusive Procedure....................................................................................... 48 17.2 Dispute Notices. ............................................................................................. 48 17.3 Informal Dispute Resolution. ......................................................................... 48 17.4 Submission of Dispute to FERC or Approved Courts. .................................. 49 17.5 Continued Performance. ................................................................................ 49 ARTICLE XVIII ASSIGNMENT ............................................................................................ 49 18.1 Prohibited Transfers and Assignments. ......................................................... 49 18.2 Permitted Assignments and Transfers. .......................................................... 50 18.3 FERC Approval. ............................................................................................ 51 ARTICLE XIX MISCELLANEOUS ....................................................................................... 51 19.1 Notices. .......................................................................................................... 51 19.2 Parties Bound. ................................................................................................ 52 19.3 Amendments. ................................................................................................. 53 19.4 Waivers. ......................................................................................................... 53 19.5 Choice of Law. ............................................................................................... 53 19.6 Headings. ....................................................................................................... 54 19.7 Relationship of Parties. .................................................................................. 54 19.8 Severability. ................................................................................................... 54 TABLE OF CONTENTS (continued) Page -iv- 19.9 No Third Party Beneficiaries. ........................................................................ 54 19.10 Further Assurances......................................................................................... 54 19.11 Conflict of Interest. ........................................................................................ 54 19.12 Exhibits and Schedules. ................................................................................. 55 19.13 Counterparts. .................................................................................................. 55 19.14 Entire Agreement. .......................................................................................... 55 EXHIBITS Exhibit A [Reserved] Exhibit B [Reserved] Exhibit C Ownership Interests; Directional Capacity Allocations; Directional Capacity Allocation Percentages Exhibit D Monthly Transmission Facilities O&M Charge; Monthly Substation O&M Charge; Monthly Common Equipment Charge Exhibit E [Reserved] Exhibit F Acquisition Costs Exhibit G Joint Ownership Transmission Loss Calculation and Allocation Methodology SCHEDULES Schedule 13.1(f) Idaho Power Governmental Authorizations Schedule 13.2(f) PacifiCorp Governmental Authorizations JOINT OWNERSHIP AND OPERATING AGREEMENT This Joint Ownership and Operating Agreement, dated as of October 24, 2014, as amended and restated on October 30, 2015, as further amended and restated on April 27, 2016, and as further amended and restated on August 22, 2019, is between PacifiCorp, an Oregon corporation, (“PacifiCorp”), and Idaho Power, an Idaho corporation (“Idaho Power”). Each of PacifiCorp and Idaho Power are sometimes hereinafter referred to individually as “Party” and collectively as “Parties”. RECITALS: WHEREAS, Idaho Power is a transmission provider which owns, controls and operates, or in certain cases only operates, equipment for the transmission of electric power and energy located in Idaho, Oregon, Washington and Wyoming (the “Idaho Power Transmission System”); WHEREAS, Idaho Power uses the Idaho Power Transmission System, its distribution system and its generation resources to provide retail and wholesale electric services, and is the NERC recognized Balancing Authority Operator of one Balancing Authority Area; WHEREAS, PacifiCorp is a transmission provider which owns, control and operates, or in certain cases only operates, equipment for the transmission of electric power and energy located in Idaho, Oregon, Washington and Wyoming (the “PacifiCorp Transmission System”); WHEREAS, PacifiCorp uses the PacifiCorp Transmission System, its distribution system and its generation resources to provide retail and wholesale electric services, and is the NERC recognized Balancing Authority Operator of two Balancing Authority Areas (PACW and PACE); WHEREAS, the Idaho Power Transmission System and the PacifiCorp Transmission System interconnect at the Points of Interconnection and the Idaho Power and PacifiCorp Balancing Authority Areas are considered Adjacent Balancing Authority Areas at the Points of Balancing Authority Area Adjacency; WHEREAS, the Idaho Power Transmission System and the PacifiCorp Transmission System include certain equipment for the transmission of electric power and energy located in Idaho and Wyoming that are jointly owned and were operated pursuant to certain legacy agreements between the Parties; WHEREAS, the Parties previously desired to exchange with one another certain jointly- owned and wholly-owned equipment to provide each Party with transmission capacity that better aligns with the current configuration of its Transmission System and current load service obligations, each of which had changed since the jointly-owned and wholly-owned equipment were originally constructed; WHEREAS, in order to facilitate such an exchange, the Parties previously entered into a Joint Purchase and Sale Agreement (the “JPSA”), dated as of October 24, 2014 (the “Execution Date”), pursuant to which at the closing of the transaction contemplated by the JPSA: (i) the ownership of certain jointly-owned equipment was reallocated and the ownership of certain additional equipment was exchanged between the Parties; and (ii) certain legacy agreements 2 between the Parties were terminated and the transmission service contained therein converted to OATT service; WHEREAS, PacifiCorp individually owns additional equipment that serve and are a part of the PacifiCorp Transmission System and will not be part of the Transmission Facilities, but that PacifiCorp will make available to support the operation of the Transmission Facilities (as further defined in Section 1.1, the “PacifiCorp Common Equipment”); WHEREAS, Idaho Power individually owns additional equipment that serve and are a part of the Idaho Power Transmission System and will not be part of the Transmission Facilities, but that Idaho Power will make available to support the operation of the Transmission Facilities (as further defined in Section 1.1, the “Idaho Power Common Equipment” and, together with the PacifiCorp Common Equipment, the “Common Equipment”); and WHEREAS, in connection with the JPSA, the Parties previously entered into a Joint Ownership and Operating Agreement, dated as of the Execution Date (the “2014 Agreement”), in order to: (1) acknowledge each Party’s ownership interest in the jointly-owned Transmission Facilities; (2) allocate the transmission capacity of the jointly-owned Transmission Facilities; (3) allocate operational responsibility for the Transmission Facilities as between the Parties; (4) define the responsibility of the Operators with respect to the operation and maintenance of the Transmission Facilities and Common Equipment; and (5) define the responsibilities of the Owners with respect to the operation of their Transmission Systems in relation to the other. WHEREAS, pursuant to 9.5 of the 2014 Agreement, the Parties agreed to, on or before the Effective Date of the 2014 Agreement, develop an OATT-based losses methodology (the “Losses Methodology”); WHEREAS, the Parties developed the Losses Methodology and on October 31, 2015 amended and restated the 2014 Agreement in its entirety to, among other things, incorporate the Losses Methodology as Exhibit G thereto and make certain conforming revisions to Section 9.5 thereof (the “2015 Agreement”); WHEREAS, the Parties amended and restated the 2015 Agreement on April 27, 2016 to include certain additional Transmission Facilities and Common Equipment and to clarify the application of certain provisions of the 2015 Agreement with respect to Common Equipment and certain wholly-owned Transmission Facilities, subject to and on the terms and conditions provided for herein (the “2016 Agreement”); and WHEREAS, the Parties now seek to amend and restate the 2016 Agreement to: (i) remove the lists of Common Equipment for both Parties; (ii) revise certain provisions and Exhibits in relation to equipment that was formerly owned by the U.S. Department of Energy but is now jointly-owned by the Parties under this Agreement; (iii) revise each Party’s Ownership Interest and Directional Capacity Allocation and Directional Capacity Allocation Percentage in the Goshen-Jefferson 161 kV line pursuant to Article III; (iv) revise the jointly-owned mileage of the American Falls-Wheelon 138 kV line; (v) establish a process whereby an Operator may approve requests for certain third-party joint-use of the Owners’ Transmission Facilities; and (vi) update Exhibit G to reflect current information in Table 1 (the “2019 Agreement”). 3 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Idaho Power and PacifiCorp agree as follows: ARTICLE I DEFINITIONS; RULES OF INTERPRETATION 1.1 Definitions. Unless the context otherwise requires, the following capitalized terms have the meanings given to them below: “Adjacent Balancing Authority Area” has the meaning set forth in the Reliability Standards. “Affected Party” has the meaning given to such term in Section 11.1. “Affiliate” means, with respect to a Person, each other Person that, directly or indirectly, controls, is controlled by or is under common control with, such designated Person; provided, however, that in the case of PacifiCorp, the term “Affiliate” does not include Berkshire Hathaway Inc. or any of its affiliates (other than PacifiCorp and any direct or indirect subsidiaries of PacifiCorp), and no provision of this Agreement shall apply to, be binding on, create any liability of, or otherwise restrict the activities of, Berkshire Hathaway Inc. or any of its affiliates (other than PacifiCorp and any direct or indirect subsidiaries of PacifiCorp). For the purposes of this definition, “control” (including with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person. “AFUDC” means allowance for funds used during construction and has the meaning set forth in 18 CFR § 101, Electric Plant Instructions § 17 (2014), as amended from time-to-time. “Agreement” means this Joint Ownership and Operating Agreement (including all Exhibits and Schedules attached hereto), as the same may be amended and supplemented from time to time in accordance with the terms hereof. “Amendment” has the meaning given to such term in Section 6.1(a)(i). “Approved Courts” has the meaning given to such term in Section 17.4. “Automatic Generation Control” has the meaning set forth in the Reliability Standards. “Balancing Authority Area” means the collection of generation, transmission and loads within the metered boundaries of each Owner determined in accordance with the Reliability Standards. 4 “Bankrupt” means, with respect to any Person, that such Person: (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or commenced against it; (b) makes an assignment or any general arrangement for the benefit of creditors; (c) otherwise becomes insolvent (however evidenced); (d) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets; or (e) is generally unable to pay its debts as they fall due. “Business Days” means any day except a Saturday, Sunday and any day which is a legal holiday or a day on which banking institutions in New York, New York are authorized or obligated by Governmental Requirements to close. “Capital Upgrade Notice” has the meaning given to such term in Section 6.1(a). “Claims” has the meaning given to such term in Section 14.1(a). “Closing Date” has the meaning given to such term in the JPSA. “Code” has the meaning given to such term in Section 16.2. “Commercially Reasonable Efforts” means the level of effort that a reasonable electric utility would take in light of the then known facts and circumstances to accomplish the required action at a then commercially reasonable cost (taking into account the benefits to be gained thereby). “Common Equipment” has the meaning given to such term in the recitals and includes all ancillary equipment necessary to support the operation of the Substations, including land, site preparation, improvements (control building and other permanent buildings), communications equipment, control equipment, SCADA, relays, batteries, battery chargers, cable trench, cabling, local service, security equipment, fencing, yard gravel, and grounding. Each Party shall maintain an accurate and complete list, or otherwise designate in a reasonable manner in its records, Common Equipment that such Party owns and that is subject to this Agreement. “Continuing Owner” has the meaning given to such term in Section 7.3. “Costs” means, with respect to the construction, reconstruction or upgrade of the Transmission Facilities or Common Equipment by or on behalf of the Operator responsible for such Transmission Facilities or Common Equipment pursuant to this Agreement, including capital upgrades and improvements thereto, such Operator’s actual cost of: (a) preliminary surveys and investigations and property acquisitions in connection therewith; and (b) the development, design, engineering, procurement, construction, reconstruction and upgrade of such Transmission Facilities and Common Equipment, including an allowance for AFUDC and applicable overheads determined in accordance with such Operator’s customary practices, as calculated in accordance with FERC’s Uniform System of Accounts; provided, however, AFUDC shall be recovered by Operators, if at all, in accordance with Section 4.7(b). “Damage Notice” has the meaning given to such term in Section 7.1(a). 5 “Damaged Facilities” has the meaning given to such term in Section 7.1(a). “Decommissioning Notice” has the meaning given to such term in Section 8.3. “Defaulting Party” has the meaning given to such term in Section 12.1. “Delegate” has the meaning given to such term in Section 4.3. “Directional Capacity Allocation” has the meaning given to such term in Section 3.2(a). “Directional Capacity Allocation Percentage” has the meaning given to such term in Section 3.2(a). “Dispute” has the meaning given to such term in Section 17.1. “Dispute Notice” has the meaning given to such term in Section 17.2. “Dynamic Transfer Capability” means the intra-hour deviation from scheduled flow. “Effective Date” has the meaning given to such term in Section 2.1. “Energy Emergency” has the meaning set forth in the applicable version of NERC Reliability Standard EOP-002, which pertains to capacity and energy emergencies. “Event of Default” has the meaning given to such term in Section 12.1. “Execution Date” has the meaning given to such term in the preamble. “Executive(s)” has the meaning given to such term in Section 17.3(a). “Excluded Transmission Facilities Sites” has the meaning given to such term in Section 3.8(h). “FERC” means the Federal Energy Regulatory Commission. “FERC Methodology” has the meaning given to such term in Section 4.7(b). “FERC Uniform System of Accounts” means the Uniform System of Accounts Prescribed for Public Utilities and Licensees Subject to the Jurisdiction of the Federal Power Act prescribed by FERC, and codified as of the Execution Date at 18 C.F.R. Part 101, as the same may be amended from time to time. “Facilities Proposed for Retirement” means the Transmission Facilities or Common Equipment that are the subject of a Decommissioning Notice. “Force Majeure” has the meaning given to such term in Section 11.1. “Good Utility Practice” means any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or 6 any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, would have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but rather to be acceptable practices, methods, or acts generally accepted in the region, including those practices required by Federal Power Act section 215(a)(4), 16 U.S.C. § 824o(a)(4)(2014). “Governmental Authority” means any federal, state, local or municipal governmental body; any governmental, quasi-governmental, regulatory or administrative agency, commission, body or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power, including FERC, NAESB, NERC or any regional reliability council; or any court or governmental tribunal, in each case, having jurisdiction over the Person or matter in question, including either Owner (including in its capacity as Operator) or any of its Affiliates or the ownership, use, operation and maintenance, repair and reconstruction, or retirement and decommissioning of all or a portion of the Transmission Facilities or the Common Equipment. “Governmental Authorizations” means any license, permit, order, approval, filing, waiver, exemption, variance, clearance, entitlement, allowance, franchise, or other authorization from or by a Governmental Authority that is applicable to the Person or matter in question. “Governmental Requirements” means all laws, statutes, ordinances, rules, regulations, codes, and similar acts or promulgations or other legally enforceable requirements of any Governmental Authority that are applicable to the Person or matter in question. “Idaho Power” has the meaning given to such term in the preamble. “Idaho Power Common Equipment” means Idaho Power-owned Common Equipment. “Idaho Power License” has the meaning given to such term in Section 3.8(a)(i). “Idaho Power Real Property Rights” has the meaning given to such term in Section 3.8(a)(ii). “Idaho Power Sites” has the meaning given to such term in Section 3.8(a)(ii). “Idaho Power Transmission System” has the meaning given to such term in the recitals. “Impacted Party” means a Party whose Directional Capacity Allocation Percentage(s) or Directional Capacity Allocation(s) is reasonably expected to have a material adverse effect by the decision to be made. “Indemnified Party” has the meaning given to such term in Section 14.1(a). “Indemnifying Party” has the meaning given to such term in Section 14.1(a). “Interconnection Owner” has the meaning given to such term in Section 5.3. 7 “Interrupting Owner” has the meaning given to such term in Section 10.1(c). “Jim Bridger Project” means the four-unit Jim Bridger coal fired electric power plant and related facilities, of which Idaho Power’s ownership share is 1/3, and PacifiCorp’s ownership share is 2/3 and which is metered at the bus bar located at the Jim Bridger Project. “Jim Bridger Project Net Generation” means the gross generation output of the four Jim Bridger Project generators metered on the low side of the generator step up transformers, minus the calculated losses on the four step up transformers, minus the tertiary loads on the 345/230 kV transformers #1 and #2, minus the 230/34 kV transformer #5 load, as calculated below: Jim Bridger total generation – ((Jim Bridger Unit1)2 + (Jim Bridger Unit2)2 + (Jim Bridger Unit3)2 + (Jim Bridger Unit4)2) x (4.4 x 10-6) - 1.2 – XFMR1tertiary – XFMR2tertiary – XFMR5. “Jim Bridger Transmission Losses” means the calculated line losses on the Jim Bridger- Goshen, Jim Bridger-Populus #1 and #2, Populus-Kinport, and Populus-Borah #1 and #2 345 kV lines, and the transformer losses on the Jim Bridger 345/230 kV transformers #1, 2 and 3. “JPSA” has the meaning given to such term in the recitals. “Losses” mean any and all damages and losses, deficiencies, liabilities, taxes, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses, whether or not resulting from third party claims, including the costs and expenses of any and all actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder and costs and expenses of remediation (including, in the case of remediation, all expenses and costs associated with financial assurance); provided, however, that in no event shall Losses include lost profits or damages and losses excluded under Section 14.8(a). “Manager” has the meaning given to such term in Section 17.3(a). “McNary Transmission Project” has the meaning given to such term in Section 6.2. “McNary Transmission Project Agreements” has the meaning given to such term in Section 6.2. “Monthly Common Equipment Charge” has the meaning given to such term in Exhibit D. “Monthly Transmission Facilities O&M Charge” has the meaning given to such term in Exhibit D. “NAESB” means the North American Energy Standards Board. “Negotiation End Date” has the meaning given to such term in Section 6.2. “NERC” means the North American Electric Reliability Corporation. 8 “Non-Defaulting Party” means an Owner that is not a Defaulting Party. “Non-Operating Owner” means, in a given circumstance or context with respect to certain Transmission Facilities or Common Equipment, the Owner which is not also serving as the Operator in such circumstance or context with respect to such Transmission Facilities or Common Equipment. “Non-Proposing Owner” means the Party that receives a Capital Upgrade Notice from the Proposing Owner as such term is used in Section 6.1, or the Party that receives a Decommissioning Notice from the Proposing Owner as such term is used in Article VIII. “OATT” means, with respect to each Owner, the Owner’s Open Access Transmission Tariff on file with FERC. “Operating Owner” means, in a given circumstance or context with respect to certain Transmission Facilities or Common Equipment, the Owner which is also serving as the Operator in such circumstance or context with respect to such Transmission Facilities or Common Equipment. “Operator” means PacifiCorp or Idaho Power, in its capacity as Operator under this Agreement. “Other Costs” has the meaning given to such term in Section 4.7(a). “Other Costs Records” has the meaning given to such term in Section 4.5. “Owner” means PacifiCorp or Idaho Power, in its capacity as an owner of Transmission Facilities or Common Equipment under this Agreement. “Ownership Interest” means: (a) in respect of an Owner and a Segment, the ownership interest (expressed as a percentage) of such Owner in such Segment as described in Section 3.1(a) and set forth on Exhibit C, as the same may be adjusted from time to time pursuant to Section 3.3(b); and (b) in respect of an Owner and Common Equipment, the one hundred percent (100%) ownership interest of such Owner in such Common Equipment. “PacifiCorp” has the meaning given to such term in the preamble. “PacifiCorp Common Equipment” means PacifiCorp-owned Common Equipment. “PacifiCorp License” has the meaning given to such term in Section 3.8(a)(ii). “PacifiCorp Real Property Rights” has the meaning given to such term in Section 3.8(a)(i). “PacifiCorp Sites” has the meaning given to such term in Section 3.8(a)(i). “PacifiCorp Transmission System” has the meaning given to such term in the recitals. “Party” and “Parties” have the meanings given to such terms in the preamble. 9 “Paths” means the specific rated electric transmission paths within the Western Interconnection that are identified in the WECC path rating catalogue and that are identified in Exhibit C, which rated paths the Parties acknowledge may be comprised of transmission line or substation equipment that are in addition to those identified on Exhibit C. “Person” means an individual, partnership, corporation, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Authority, or other form of entity. “Points of Balancing Authority Area Adjacency” means the points at which Idaho Power’s Balancing Authority Area is an Adjacent Balancing Authority Area with each of PacifiCorp’s PACE and PACW Balancing Authority Areas. “Points of Interconnection” means the points of interconnection between Idaho Power’s Transmission System and PacifiCorp’s Transmission System. “Prior Projects” has the meaning given to such term in Section 5.2(e). “Pro Rata Share” or “Pro Rata Basis” means a proportionate allocation of a quantity between the Owners that is calculated by multiplying the quantity being allocated by each Owner’s Ownership Interest or Directional Capacity Allocation Percentage or other metric, as the context provides. “Proposing Owner” means the Party that desires to make a capital upgrade or improvement to Transmission Facilities or to Common Equipment as such term is used in Section 6.1, or the Party that desires to retire and decommission Transmission Facilities or Common Equipment as such term is used in Article VIII. “Proprietary Information” has the meaning given to such term in Section 15.6. “Qualified Owner” means an Owner that has an OATT on file with FERC under which it is authorized to provide transmission service on its transmission system. “Real Property Licenses” has the meaning given to such term in Section 3.8(a)(ii). “Real Property Rights” has the meaning given to such term in Section 3.8(a)(ii). “Regulations” has the meaning given to such term in Section 16.2. “Reliability Standards” means the electric reliability standards approved by FERC pursuant to Federal Power Act Section 215, 16 U.S.C. §824o(d) (2014). “Remaining Owner” has the meaning given to such term in Section 8.3. “Representatives” means, in respect of an Owner or Operator, the directors, officers, shareholders, partners, members, employees, agents, consultants, contractors or other representatives of such Owner or Operator. 10 “Segment” means a Substation Segment or a Transmission Segment. “Substations” means the substations that are identified on Exhibit C. “Substation Segment” means the Transmission Facilities that are identified on a specific row of Exhibit C as a Substation. “Transmission Segment” means the Transmission Facilities that are identified on a specific row of Exhibit C as a transmission line. “Tax Indemnifying Party” has the meaning given to such term in Section 16.4. “Tax Indemnitee Party” has the meaning given to such term in Section 16.4. “Taxes” has the meaning given to such term in Section 16.3. “Term” has the meaning given to such term in Section 2.2. “Terminated Transmission Facilities” has the meaning given to such term in Section 2.3(a). “Third-Party Facilities” has the meaning given to such term in Section 5.4. “Third-Party Requestor” has the meaning given to such term in Section 5.4. “Third-Party Use” has the meaning given to such term in Section 5.4. “Total Directional Capacity” has the meaning given to such term in Section 3.2(a). “Transfer” has the meaning given to such term in Section 18.1. “Transferee” has the meaning given to such term in Section 15.1. “Transferor” has the meaning given to such term in Section 15.1. “Transmission Facilities” means all items identified on Exhibit C. “Transmission Facilities Contracts” means, in respect of each Operator, each agreement, instrument or other contract relating to or in connection with the Transmission Facilities or Common Equipment it is responsible for, that such Operator enters into pursuant to this Agreement and, in respect of the Prior Projects, that the Operating Owner entered into prior to the Effective Date; but does not include transmission service agreements. “Transmission Facilities Sites” has the meaning given to such term in Section 3.8(a)(ii). “Transmission System” means, in the case of PacifiCorp, the PacifiCorp Transmission System, and, in the case of Idaho Power, the Idaho Power Transmission System. “WECC” means the Western Electricity Coordinating Council. 11 “WIS Agreement” has the meaning given to such term in Section 14.8(b). 1.2 Rules of Construction. The following rules of interpretation shall apply in this Agreement: (a) The masculine shall include the feminine and neuter. (b) References to “Articles,” “Sections,” “Exhibits” and “Schedule” shall be to articles, sections, exhibits and schedules of this Agreement. (c) The Exhibits and Schedules attached hereto are incorporated in and are intended to be a part of this Agreement. (d) This Agreement was negotiated and prepared by both Parties with the advice and participation of counsel. The Parties have agreed to the wording of this Agreement and none of the provisions hereof shall be construed against one Party on the ground that such Party is the author of this Agreement or any part hereof. (e) Each reference in this Agreement to any agreement or document or a portion or provision thereof shall be construed as a reference to the relevant agreement or document as amended, supplemented or otherwise modified from time to time with the written approval of both the Parties. (f) Each reference in this Agreement to Governmental Requirements and to terms defined in, and other provisions of, Governmental Requirements shall be references to the same (or a successor to the same) as amended, supplemented or otherwise modified from time to time. (g) The term “day” shall mean a calendar day, the term “month” shall mean a calendar month, and the term “year” shall mean a calendar year. Whenever an event is to be performed, a period commences or ends, or a payment is to be made on or by a particular date and the date in question falls on a day which is not a Business Day, the event shall be performed, or the payment shall be made, on the next succeeding Business Day; provided, however, that all calculations shall be made regardless of whether any given day is a Business Day and whether or not any given period ends on a Business Day. (h) Each reference in this Agreement to a Person includes its successors and permitted assigns; and each reference to a Governmental Authority includes any Governmental Authority succeeding to its functions and capacities. (i) In this Agreement, the words “include,” “includes” and “including” are to be construed as being at all times followed by the words “without limitation.” (j) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall, unless otherwise specified, refer to this Agreement as a whole and not to any particular provision of this Agreement. 12 ARTICLE II TERM 2.1 Effectiveness of this Agreement. This Agreement, including the Parties’ rights and obligations hereunder, shall become effective, if at all, on the Closing Date (the “Effective Date”). For the avoidance of doubt, no aspect of this Agreement, other than this Section 2.1, shall have any effect unless and until the Effective Date occurs. If the Effective Date does not occur and the JPSA is terminated, this Agreement, including this Section 2.1, shall become void ab initio. 2.2 Term. The term of this Agreement (“Term”) shall commence upon the Effective Date and shall continue in full force and effect until terminated in accordance with the provisions hereof. 2.3 Termination. (a) Subject to Section 2.4(a) and Section 2.4(b), this Agreement shall terminate solely with respect to certain Transmission Facilities and Common Equipment (each, “Terminated Transmission Facilities”), and not otherwise with respect to any other Transmission Facilities or Common Equipment or other obligations hereunder, if one or more of the following events occur: (i) The Terminated Transmission Facilities are damaged and destroyed and the Owners decide not to repair or rebuild (or cannot reach agreement to repair or rebuild) them in accordance with Article VII; or (ii) The Terminated Transmission Facilities are retired and decommissioned in accordance with Article VIII. (b) Subject to Section 2.4(c), this entire Agreement shall terminate if one or more of the following events occur: (i) Mutual agreement of the Parties to terminate this Agreement; or (ii) This Agreement is terminated by exercise of remedies pursuant to Section 12.3. 2.4 Effect of Termination. (a) If this Agreement is terminated pursuant to Section 2.3(a) with respect to any Terminated Transmission Facilities, then, except as for those provisions that are expressly intended to survive termination and, subject to Section 2.4(b) and receipt of any necessary Governmental Authorizations required by Governmental Requirements, this Agreement shall terminate and become void and of no further force and effect, without further action by either Party solely with respect to such Terminated Transmission Facilities, provided that neither Party shall be relieved from any of its obligations or liabilities hereunder accruing prior thereto. 13 (b) In the event that this Agreement is terminated pursuant to Section 2.3(a) with respect to any Terminated Transmission Facilities and the Non-Operating Owner continues to own all or a portion of the Ownership Interest(s) in such Terminated Transmission Facilities, then: (i) the Operator shall, upon written notice from the Non-Operating Owner delivered to the Operator no later than fifteen (15) Business Days after termination of this Agreement solely with respect to such Terminated Transmission Facilities pursuant to Section 2.3(a), continue to perform such of its obligations and covenants in Articles VI, VII, and VIII as are set forth in the notice; (ii) such obligations and covenants, together with Articles XI, XIV, XV, XVI, XVII, and XIX (to the extent applicable to the surviving covenants and obligations), shall continue in full force and effect notwithstanding the termination of this Agreement solely with respect to such Terminated Transmission Facilities pursuant to Section 2.3(a); and (iii) the Parties shall amend this Agreement to reflect such changes to this Agreement as shall be necessary and mutually acceptable to the Parties to conform this Agreement solely as it relates to such Terminated Transmission Facilities to the surviving provisions of this Agreement in accordance with this Section 2.4(b). (c) If this Agreement is terminated pursuant to Section 2.3(b), then, except as for those provisions that are expressly intended to survive termination of this Agreement and, subject to receipt of any necessary Governmental Authorizations required by Governmental Requirements, including FERC approval, this Agreement shall terminate and become void and of no further force and effect, without further action by either Party, provided that neither Party shall be relieved from any of its obligations or liabilities hereunder accruing prior thereto. ARTICLE III TRANSMISSION FACILITIES OWNERSHIP INTERESTS 3.1 Ownership Interests. (a) Pursuant to the JPSA, as of the Closing Date: (i) the percentage of ownership in a Segment that is owned by Idaho Power is set forth in column A of Exhibit C, and the percentage of ownership in a Segment that is owned by PacifiCorp is set forth in column B of Exhibit C; and (ii) when the Owners each own a percentage of a Segment, each of the Owners own an undivided ownership interest in such Segment as tenants-in-common. (b) The Owners agree that they shall enter into such additional documentation as shall reasonably be required to document the Owners’ Ownership Interests in the Transmission Facilities and any change in the Owners’ Ownership Interests in the Transmission Facilities as a result of the application of Section 3.3(b), provided that in no event shall an Owner be responsible for paying any amount to the other Owner as a result of any change in any Ownership Interest in the Transmission Facilities, except as expressly provided for in this Agreement or as otherwise agreed to in writing by the Parties. 3.2 Capacity Allocations. (a) Directional Capacity Allocation. The Parties agree that the total directional transmission capacity in megawatts of each Segment and Path is set forth in columns E and H of Exhibit C (the “Total Directional Capacity”), and is allocated to: (i) Idaho Power (A) as expressed in megawatts as set forth in columns C and F of Exhibit C and (B) as expressed as a percentage of 14 the total directional transmission capacity of each Segment and Path as set forth in columns I and K of Exhibit C; and (ii) PacifiCorp (A) as expressed in megawatts as set forth in columns D and G of Exhibit C and (B) as expressed as a percentage of the total directional transmission capacity of each Segment and Path as set forth in columns J and L of Exhibit C. Each of the allocations of directional transmission capacity of each of the Segments and Paths to each of the Owners expressed in megawatts in Sections 3.2(a)(i)(A) and 3.2(a)(ii)(A) is herein referred to as the “Directional Capacity Allocation” and each of the allocations of directional transmission capacity of each of the Segments and Paths to each of the Owners in percentages in Sections 3.2(a)(i)(B) and 3.2(a)(ii)(B) is herein referred to as the “Directional Capacity Allocation Percentage.” (b) Scheduling Over Segments which are Not Part of a Path. Each Owner shall have the right to post and sell its Directional Capacity Allocation over each Segment (which is not part of a Path) in accordance with its OATT, and each Owner shall schedule energy or make available for scheduling each Segment (which is not part of a Path) in each direction consistent with its applicable Directional Capacity Allocation Percentage of the Total Directional Capacity of the Segment in each direction and pursuant to Governmental Requirements and Governmental Authorizations; provided, however, that at no time shall an Owner be entitled to post, sell, schedule or make available for scheduling more than its applicable Directional Capacity Allocation Percentage of the Total Directional Capacity of any Segment (which is not part of a Path) in any direction, unless otherwise mutually agreed to in writing by the Owners. (c) Scheduling Over Segments which are Part of a Path. Each Owner shall have the right to post and sell its Directional Capacity Allocation over a Path in accordance with its OATT, and each Owner shall schedule energy or make available for scheduling a Path in each direction consistent with its applicable Directional Capacity Allocation Percentage of the Total Directional Capacity of the Path in each direction and pursuant to Governmental Requirements and Governmental Authorizations; provided, however, that at no time shall an Owner be entitled to post, sell, schedule or make available for scheduling more than its applicable Directional Capacity Allocation Percentage of the Total Directional Capacity of any Path over one or more of the Segments which are part of the Path in any direction, unless otherwise mutually agreed to in writing by the Owners. 3.3 Adjustment of Capacity Allocations and Ownership Interests. (a) Adjustment of Directional Capacity Allocations and Directional Capacity Allocation Percentages. (i) Each of the Owners shall be allocated their Pro Rata Share (based on their applicable Directional Capacity Allocation Percentages) of all temporary changes in the Total Directional Capacity of a Segment or Path. (ii) Permanent changes in the Total Directional Capacity of a Segment or Path occur when the first of the following occurs: (A) when the quantity and, if applicable, direction of change in Total Directional Capacity are agreed to by the Owners; or (B) when WECC or the applicable WECC committee recognizes the quantity and, if applicable, direction of change in Total Directional Capacity. 15 (iii) Each of the Owners shall be allocated their Pro Rata Share (based on their applicable Directional Capacity Allocation Percentages) of any permanent decrease or permanent increase (which is not the result of a capital upgrade or which is the result of a capital upgrade that both Owners participated in on a Pro Rata Basis (in accordance with their Ownership Interests)) in the Total Directional Capacity of a Segment or Path calculated pursuant to Section 3.3(a)(ii). In the event of a permanent increase in the Total Directional Capacity of a Segment or Path calculated pursuant to Section 3.3(a)(ii), then the increase in Total Directional Capacity shall be allocated to the Owners based on their participation in the capital upgrade established pursuant to Section 6.1. (iv) In the event there is a permanent increase or decrease in the Total Directional Capacity of a Segment or Path calculated pursuant to Section 3.3(a)(ii), the Owners shall promptly amend the Agreement to update Exhibit C to reflect revisions in the Total Directional Capacity of the Segment or Path as well as the Directional Capacity Allocations and Directional Capacity Allocation Percentages of the Owners in the Segment or Path calculated pursuant to Sections 3.3(a)(ii) and 3.3(a)(iii). (b) Adjustment of Ownership Interests in Segments. (i) Only permanent changes in the Total Directional Capacity of a Segment pursuant to Section 3.3(a)(ii) have the ability to affect the Owners’ Ownership Interests in a Segment. In the event that there is a permanent increase or decrease in the Total Directional Capacity of a Segment in accordance with Section 3.3(a)(ii), then the Ownership Interest for each Owner shall be calculated on the following basis: (A) Add both of the Owner’s Directional Capacity Allocations in the Segment (taking into account the Owner’s Pro Rata Share of the increase or decrease determined in accordance with Section 3.3(a)); (B) Add both of the Segment’s Total Directional Capacities (taking into account the increase or decrease of the Segment’s Total Directional Capacities determined in accordance with Section 3.3(a)); and (C) Divide the sum of clause A above by the sum of clause B above to produce the Owner’s revised Ownership Interest in the Segment. (ii) In the event that there is a permanent increase or decrease in the Total Directional Capacity of a Segment in accordance with Section 3.3(a)(ii), the Owners shall promptly amend the Agreement to update Exhibit C to reflect any revisions in the Ownership Interests of the Owners in any Segment calculated in accordance with this Section 3.3(b)(i). In addition, the Owners shall promptly amend the Agreement to update Exhibit C to reflect revisions in any Substation O&M Allocation as a result of changes in the Ownership Interests of the Owners in any Substation Segment calculated in accordance with Section 3.3(b)(i). (c) Reviews. (i) Subject to Section 3.3(c)(iii), the Owners shall meet periodically, but not less than every five (5) years beginning in the year 2020, to review: 16 (A) The Directional Capacity Allocations, the Directional Capacity Allocation Percentages and the Substation O&M Allocations set forth in Exhibit C; (B) The formulas for adjusting Directional Capacity Allocation Percentages and Ownership Interests set forth in this Section 3.3; (C) The definition of Pro Rata Share; (D) The treatment of electric losses set forth in Section 9.5; (E) The formulas describing the charges set forth in Exhibit D; and (F) Any other provisions of this Agreement as either Party may elect. (ii) Subject to Section 3.3(c)(iii), the Owners shall meet promptly and attempt to reach a mutually agreeable solution in the event that a Governmental Requirement or Governmental Authorization adversely affects: (A) the ability of an Owner to perform its obligations or exercise its rights under this Agreement; or (B) the treatment of assets of an Owner that are subject to or affected by this Agreement. (iii) In no event shall this Agreement be amended, supplemented or otherwise modified pursuant to Sections 3.3(c)(i) or 3.3(c)(ii), unless the Parties agree in writing to such amendment, supplement or modification. 3.4 Qualified Owner. Each Owner shall take all actions required to continue to be a Qualified Owner during the Term. If at any time during the Term an Owner ceases to be a Qualified Owner, then such Owner shall immediately provide notice thereof to the other Owner and take all actions required to resume being a Qualified Owner. 3.5 No Right to Use. For the avoidance of doubt, the provisions of this Agreement shall not confer upon either Owner the right to use or transmit energy over any transmission facilities owned by the other Owner (other than with respect to the Transmission Facilities and Paths as provided for herein). 3.6 Payments. All payments required to be made by or on behalf of the Owners under the terms of this Agreement, including payments to the Operators of the Monthly Transmission Facilities O&M Charge, the Monthly Substation O&M Charge, the Monthly Common Equipment Charge and Other Costs, shall be made to the account or accounts designated by the Owner or Operator to which the payment is owed, by wire transfer in immediately available funds in the lawful currency of the United States. 17 3.7 Waiver of Partition Rights. The Owners acknowledge that any exercise of the remedy of partition (whether at law or in equity) of the jointly-owned Transmission Facilities or any portion thereof would be impracticable in view of the purposes and requirements of this Agreement, would violate the spirit and intent of this Agreement, and would defeat the Owners’ intentions and reasonable expectations as well as the consideration upon which each Owner entered into this Agreement. Accordingly, each Owner agrees that during the Term it: (a) will not, directly or indirectly, commence, maintain, support or join in any action or proceedings of any kind to partition the jointly-owned Transmission Facilities or any portion thereof; and (b) waives, after consultation with its qualified legal counsel, any and all rights that it may have under this Agreement or Governmental Requirements (whether at law or in equity) or otherwise to commence, maintain, support or join in any such action or proceeding. Each Owner acknowledges that the other Owner has entered into and will perform the terms of this Agreement in reliance upon the other Owner’s agreement and adherence to the terms of this Section 3.7, and would not have entered into this Agreement but for such reliance; and that it would be unjust and inequitable for any Owner to violate or to seek relief from any provision of this Section 3.7. 3.8 Nonexclusive License to Enter and Use Real Property. (a) Subject to the terms and conditions of this Agreement, including this Section 3.8: (i) PacifiCorp hereby irrevocably grants to Idaho Power a nonexclusive license (the “Idaho Power License”) to use and access the real property to which Idaho Power’s Ownership Interests in the Transmission Facilities are affixed (the “PacifiCorp Sites”), but only to the extent of, and subject in all respects to, PacifiCorp’s real property interests (including fee, rights-of-way, easements and other real property interests) and other real property rights therein (collectively, the “PacifiCorp Real Property Rights”) and only to the extent such Idaho Power License is permitted by the PacifiCorp Real Property Rights and Governmental Requirements; and (ii) Idaho Power hereby irrevocably grants to PacifiCorp a nonexclusive license (the “PacifiCorp License” and, together with the Idaho Power License, the “Real Property Licenses”) to use and access the real property to which PacifiCorp’s Ownership Interests in the Transmission Facilities are affixed (the “Idaho Power Sites” and, together with the PacifiCorp Sites, the “Transmission Facilities Sites”), but only to the extent of, and subject in all respects to, Idaho Power’s real property interests (including fee, rights-of-way, easements and other real property interests) and other real property rights therein (collectively, the “Idaho Power Real Property Rights” and, together with the PacifiCorp Real Property Rights, the “Real Property Rights”) and only to the extent such PacifiCorp License is permitted by the Idaho Power Real Property Rights and Governmental Requirements. (b) Each Real Property License will be utilized by the grantee Owner and its Representatives for the use of, and rights of ingress, egress and access to, the applicable Transmission Facilities Sites to permit the Owner and its Representatives to exercise the Owner’s rights and obligations as to its Ownership Interests in the Transmission Facilities. 18 (c) The rights of the grantee Owner and its Representatives for use of, ingress, egress and access to the applicable Transmission Facilities Sites shall be governed by this Section 3.8 during the period the Real Property License is in effect, including during any period after this Agreement has been terminated but the surviving provisions identified in Section 10.2 (including Section 3.8) remain in effect. (d) Upon the termination or expiration of this Agreement, each Real Property License may be utilized by the grantee Owner and its Representatives for the right of ingress, egress and access to the Transmission Facilities Sites, for the sole purpose of inspection and as provided for in Section 3.8(f). (e) In the exercise of its rights under the Real Property License: (i) the grantee Owner and its Representatives shall not interfere with the construction, commissioning, operation and maintenance, capital upgrades and improvements to, repair and reconstruction of, and retirement and decommissioning of the Transmission Facilities (or any other equipment or facilities owned, controlled or operated by the grantor Owner on the Transmission Facilities Site) or any portion thereof by the Operator or pose a safety hazard; (ii) the grantee Owner and its Representatives shall comply with any requirements of the Real Property Rights applicable to the Transmission Facilities Sites as of the Effective Date and any other Real Property Rights arising after the Effective Date with respect to which it receives written notice; (iii) the grantee Owner shall provide reasonable prior written notice to the grantor Owner of its intent to exercise any right or privilege granted by the Real Property License; and (iv) the grantee Owner and its Representatives exercising any right or privilege under the Real Property License shall comply with the grantor Owner’s or any other contractor’s safety and operational procedures and security rules, provided that such procedures and rules are in writing and are delivered to the grantee Owner in advance. For the avoidance of doubt, the Owners acknowledge that no representations or warranties are made with respect to the Transmission Facilities Sites and that the Real Property Licenses are expressly subject in all respects to all Real Property Rights applicable to the Transmission Facilities Sites. (f) Each Real Property License includes a nonexclusive right of the grantee Owner for the location of equipment in which such Owner has an Ownership Interest, together with any replacements, capital upgrades or improvements thereto, on the Transmission Facilities Sites, to be utilized by such Owner to locate such equipment on such premises, together with the right to access such equipment over and across the Transmission Facilities Sites, provided that any replacements, capital upgrades or improvements to such equipment shall be made in accordance with the provisions of this Agreement prior to its expiration or termination. (g) Each Real Property License shall terminate, in whole or in part, if and to the extent the grantee Owner no longer requires the Real Property License for the uses described in this Section 3.8, including if and to the extent such Owner no longer has an Ownership Interest in the Transmission Facilities affixed to the respective Transmission Facilities Sites, written notice of which the grantee Owner shall promptly provide to the grantor Owner. (h) If and to the extent the Real Property Licenses are not permitted by any of the Real Property Rights with respect to all or any portion of the Transmission Facilities Sites (the “Excluded Transmission Facilities Sites”), then the Parties shall cooperate in good faith to identify 19 and use Commercially Reasonable Efforts to implement an alternative to the Real Property Licenses with respect to the Excluded Transmission Facilities Sites in order to attempt to provide each of the Parties with the rights that they would have been provided under the Real Property Licenses with respect to the Transmission Facilities Sites; provided, however, in no event shall an Owner be required to amend, revise or modify in any respect any of its Real Property Rights pursuant to this Section 3.8(h). ARTICLE IV OPERATOR OF TRANSMISSION FACILITIES 4.1 Appointment of Operator. (a) The Owners hereby appoint the Party set forth in column M of Exhibit C as the Operator of each of the Transmission Facilities associated with the Party’s name on Exhibit C, and the Party hereby accepts appointment, to serve as the Operator and to perform the other covenants and obligations of the Operator expressly set forth in this Agreement, in accordance with the terms and conditions of this Agreement. (b) Each of the Owners hereby authorizes the Operators to utilize its Common Equipment and wholly-owned Transmission Facilities to support the operation of the Transmission Facilities in accordance with the terms of this Agreement. (c) Notwithstanding anything to the contrary contained in this Agreement or Governmental Requirements, the Owners agree that the Operators shall have no obligations, responsibilities or duties to the Owners other than as are expressly provided for in this Agreement. (d) A sole Owner of Transmission Facilities that are operated by the other Party to this Agreement may unilaterally elect to supervise and perform, or cause to be supervised or performed, the physical operation and maintenance, interconnection, design of capital upgrades and improvements, repair and reconstruction, security, outage restoration, and retirement and decommissioning of the solely-owned Transmission Facilities. Should the sole Owner choose to resume operation or perform any of the above-listed items, the sole Owner will provide the Operator with sixty (60) days prior written notice describing the specific work the sole Owner is electing. The Operator will be relieved of this specific work, but will continue to perform all other covenants and obligations of the Operator as expressly set forth in this Agreement. 4.2 Authority of Operator. (a) Subject to the limitations set forth in Articles IV-VIII, each Operator shall be responsible in all respects for the Transmission Facilities and Common Equipment for which it is the Operator in accordance with the terms and conditions of this Agreement. Without limiting the foregoing, each Operator shall supervise and perform, or cause to be supervised and performed, the physical operation and maintenance of, interconnection to, design of, capital upgrades and improvements to, repair and reconstruction of, security of, outage restoration of, and retirement and decommissioning of, the Transmission Facilities and Common Equipment it is responsible for in accordance with this Article IV and Articles V-VIII. In the performance of its obligations under this Agreement, each Operator shall have authority, subject to the other terms of this Article IV 20 and Articles V-IX, to take any or all of the actions it reasonably determines are necessary to perform its obligations under this Agreement. (b) The Owners and the Operators agree that title to all capital upgrades and improvements to the Segments and Common Equipment constructed by or on behalf of the Operators pursuant to Articles V and VI shall vest with the Owner or Owners of such Segments or Common Equipment in accordance with their respective Ownership Interests in such Segments or Common Equipment, and, in the case of jointly-owned Segments, shall be jointly owned by the Owners as tenants-in-common in accordance with their respective Ownership Interests in the jointly-owned Segments. (c) Each Operator will exercise or enforce all of the benefits, rights and remedies under the Transmission Facilities Contracts for the benefit of the Owners without adverse distinction between the Owners. In furtherance and not in limitation of the immediately preceding sentence, and except as otherwise provided in Section 9.5 with respect to electric losses, each Operator agrees to transfer, assign, distribute, pay over or otherwise make available to the Non- Operating Owner, the Non-Operating Owner’s Pro Rata Share (based on its respective Ownership Interest(s), if any) of any payments or proceeds obtained pursuant to any Transmission Facilities Contract. Notwithstanding anything to the contrary contained in this Agreement, the Owners agree that only the Operators shall be entitled to exercise or enforce the benefits, rights and remedies under the Transmission Facilities Contracts. 4.3 Delegation of Responsibilities. An Operator may, in its sole and absolute discretion, utilize its employees and supervisory personnel, and any independent technical advisors, consultants, contractors and agents which it may select, as may be required to perform its obligations (each, a “Delegate”). Notwithstanding any such delegation, the Operator shall remain responsible and liable for all of its delegated obligations in accordance with the terms of this Agreement. If a non-operating Owner is amenable to such delegation, such non-operating Owner may be delegated certain responsibilities under this section. 4.4 Governmental Authorizations. (a) Each Operator is authorized to prepare and submit to all appropriate Governmental Authorities the necessary reports, applications, plans, specifications and other documents to procure all Governmental Authorizations required to perform its obligations under this Agreement with respect to the Transmission Facilities and Common Equipment it is responsible for or to comply with Governmental Requirements, provided that the Operator shall consult with the Non-Operating Owner prior to the submission of any such reports, application, plans, specification and other documents to the extent to which they relate to any jointly-owned Transmission Facilities. To the extent permitted by Governmental Requirements, each Operator shall use Commercially Reasonable Efforts to obtain and structure all Government Authorizations for which it applies after the Effective Date in such a way as to recognize each Owner’s applicable Ownership Interest(s) (and associated Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s)), if any, as contemplated by this Agreement. Notwithstanding anything to the contrary in this Agreement, except as set forth in Section 5.1(b), nothing in this 21 Section 4.4 shall obligate an Operator to prepare and submit to appropriate Governmental Authorities any reports, applications, plans, specifications and other documents to procure any Governmental Authorizations required by the Owners in connection with their ownership of an Ownership Interest in the Transmission Facilities or the Common Equipment or the recovery of any costs and expenses in connection therewith. (b) To the extent that an Operator cannot obtain a Governmental Authorization pursuant to Section 4.4(a) on behalf of one or both of the Owners, each such Owner shall: (i) be responsible for preparing and submitting to the appropriate Governmental Authority the necessary reports, applications, plans, specifications and other documents to procure such Governmental Authorization; and (ii) exercise all Commercially Reasonable Efforts to obtain such Governmental Authorization. Unless and until the Owner or Owners are able to obtain such Governmental Authorizations, the Operator shall not perform or continue to perform any of the obligations requiring such Governmental Authorizations if to do so would result in the Owner or Owners or the Operator being in violation of Governmental Requirements or Governmental Authorizations. (c) Each Owner shall, at its own cost: (i) reasonably cooperate and support the Operators in obtaining any Governmental Authorizations required pursuant to Section 4.4(a); and (ii) reasonably respond to inquiries or requests issued to it by any Governmental Authorities in respect of such Governmental Authorizations; provided, however, that an Owner shall not be obligated pursuant to this Section 4.4(c) to disclose Proprietary Information except to the extent that it is otherwise required to disclose such Proprietary Information: (A) by Governmental Requirements; (B) by any Governmental Authority; or (C) pursuant to the express terms of this Agreement. 4.5 Audit. Each Non-Operating Owner may, at its cost, at any time during normal business hours and with reasonable prior notice of not less than thirty (30) Business Days, but not more often than once in any twelve (12) month period, inspect and audit the books and records of the Operator and any of its Affiliates and Delegates (and the Operator shall secure such rights for the Non-Operating Owner from its Affiliates and Delegates) involved in the provision of services pursuant to this Agreement (“Other Costs Records”), to the extent reasonably relating to the determination of Monthly Transmission Facilities O&M Charges, Monthly Substation O&M Charges, Monthly Common Equipment Charges, and Other Costs for which the Non-Operating Owner is liable under this Agreement as shown on an invoice provided to the Non-Operating Owner pursuant to Section 4.7 within eighteen (18) months prior to the date of the audit notice. Each Operator shall, and shall cause any of its relevant Affiliates and Delegates, to keep and maintain all such Other Costs Records to the extent reasonably relating to the determination of Monthly Transmission Facilities O&M Charges, Monthly Substation O&M Charges, Monthly Common Equipment Charges, and Other Costs for which the Non-Operating Owner is liable under this Agreement and make such Other Costs Records available to the Non-Operating Owner in accordance with the terms of this Agreement. If any audit discloses that, during such eighteen (18) month period, an overpayment or underpayment of Monthly Transmission Facilities O&M Charges, Monthly Substation O&M Charges, Monthly Common Equipment Charges or Other Costs has been made by the Non- Operating Owner or the amount of any Monthly Transmission Facilities O&M Charges, Monthly Substation O&M Charges, Monthly Common Equipment Charges, or Other Costs allocated to the 22 Non-Operating Owner in an invoice is incorrect, then such overpayment, underpayment or incorrect amount shall be resolved pursuant to Section 4.8. The Non-Operating Owner requesting the audit shall reimburse one hundred percent (100%) of all reasonable costs and expenses (including internal costs and expenses) incurred by or on behalf of the Operator and any of its Affiliates and Delegates in complying with the provisions of this Section 4.6, provided that the Non-Operating Owner shall not be required to reimburse any such costs if the audit determines that the Non-Operating Owner has made more than Twenty-Five Thousand Dollars ($25,000) in overpayments of Monthly Transmission Facilities O&M Charges, Monthly Substation O&M Charges, Monthly Common Equipment Charges, or Other Costs or more than Twenty-Five Thousand Dollars ($25,000) in Monthly Transmission Facilities O&M Charges, Monthly Substation O&M Charges, Monthly Common Equipment Charges, or Other Costs have been incorrectly allocated to the Owner. 4.6 Insurance. (a) Owner Insurance. Each Owner shall be responsible for obtaining and maintaining during the Term insurance covering its respective legal liabilities related to its Ownership Interests in the Transmission Facilities and Common Equipment. Insurance required by this Section 4.6(a) will be placed with appropriate carriers and in amounts in accordance with Good Utility Practice and Governmental Requirements. (b) Property Insurance. Each Operator, on behalf of the Owners and any other named insureds or loss payees, will, with respect to Substations and equipment therein that is included as part of the jointly-owned Transmission Facilities it is responsible for: (i) determine the appropriate property insurance coverages, minimum amounts, self-insured amounts, deductibles and other insurance policy terms which shall be reasonable and customary for similarly situated utilities; (ii) obtain and maintain such property insurance during the Term; and (iii) be solely responsible for pursuing claims and/or negotiating settlements in respect of claims under such insurance coverages. The Operators shall be compensated for the costs of obtaining and maintaining such insurance (including any premiums, taxes and fees, but excluding deductibles, self-insurance or non-insured costs) through the Monthly Substation O&M Charge. Subject to Article VII, each Owner shall be responsible for its Pro Rata Share (based on its applicable Ownership Interest(s)) of any deductibles, self-insurance and non-insured costs, all of which shall be Other Costs. The Operators shall not be obligated to obtain or maintain any other insurance by or on behalf of the Owners with respect to the Transmission Facilities or Common Equipment for which they are responsible. 4.7 Invoices. (a) Each Non-Operating Owner shall pay the respective Operator the Monthly Transmission Facilities O&M Charge, the Monthly Substation O&M Charge, and the Monthly Common Equipment Charge calculated in accordance with Exhibit D as compensation for the Operator’s services under this Agreement. In addition, each Owner shall be responsible for its Pro Rata Share (based on its applicable Ownership Interest(s)) of costs incurred by or on behalf of the Operators pursuant to the terms of this Agreement, including Sections 4.2(a), 4.4(a), 4.6, 5.2, 6.1, 7.1, 7.5, 8.2 and 16.3 (collectively, the “Other Costs”). In the event that an Operator incurs, or 23 reasonably expects to incur, significant Other Costs in excess of One Hundred Thousand Dollars ($100,000), the Operator shall immediately notify the Owners in writing of such Other Costs. (b) Within thirty (30) days after the end of the first full calendar month during the Term, and within thirty (30) days after the end of each month thereafter during the Term, each Operator will deliver to the Non-Operating Owner an invoice which will show the total amount and each Owner’s Pro Rata Share (based on its Ownership Interests) of the Monthly Transmission Facilities O&M Charge, the Monthly Substation O&M Charge and the Monthly Common Equipment Charge determined in accordance with the terms and conditions of this Agreement. For purposes of clarity, the first such invoices will include amounts owed for the first full month and any partial month that precedes it during the Term. Within thirty (30) days after the end of the first calendar quarter first occurring during the Term (i.e., within 30 days of the first March 31st, June 30th, September 30th, or December 31st during the Term), and within thirty (30) days after the end of each calendar quarter thereafter during the Term, each Operator will deliver to the Non-Operating Owner an invoice which will show the total amount and each Owner’s Pro Rata Share (based on its Ownership Interests) of Other Costs determined in accordance with the terms and conditions of this Agreement; provided, however, that Other Costs associated with capital upgrades and improvements to, or repair and reconstruction of, Transmission Facilities: (a) shall not include AFUDC, provided, that the first Other Costs invoice may include accrued AFUDC on Prior Projects up to the Effective Date; and (b) that are a Substation Segment shall be invoiced using estimated Other Costs, provided that each Operator shall provide a final invoice showing a true-up of estimated Other Costs compared to actual Other Costs after the upgrade, improvement, repair or reconstruction is placed into service;. The Non-Operating Owner shall pay its Pro Rata Share (based on its Ownership Interests) of the Monthly Transmission Facilities O&M Charge, the Monthly Substation O&M Charge, the Monthly Common Equipment Charge and the Other Costs shown on the invoice no later than thirty (30) days after the date of the invoice. Any payment past due will accrue interest, per annum, calculated in accordance with the methodology specified for interest in the FERC regulations at 18 C.F.R. § 35.19a(a)(2)(iii) (the “FERC Methodology”). The failure by an Operator to timely deliver an invoice shall not relieve the Non-Operating Owner of its payment obligation in respect of its share of the Monthly Transmission Facilities O&M Charge, the Monthly Substation O&M Charge, the Monthly Common Equipment Charge and Other Costs as shown on such invoice, or release the Operating Owner of its responsibility for such invoice. 4.8 Disputed Amounts. If any Non-Operating Owner disputes any portion of any amount specified in an invoice delivered by an Operator pursuant to Section 4.7, the Non-Operating Owner shall pay its total amount of the invoice when due, and, if actually known at the time by the Non-Operating Owner, identify the disputed amount and state that the disputed amount is being paid under protest. Any disputed amount shall be resolved pursuant to the provisions of Article XVII. If it is determined pursuant to Article XVII that an overpayment or underpayment has been made by the Non- Operating Owner or the amount of any Monthly Transmission Facilities O&M Charge, Monthly Substation O&M Charge, Monthly Common Equipment Charge, or Other Costs allocated to the Non-Operating Owner on an invoice is incorrect, then: (i) in the case of any overpayment by the Non-Operating Owner, the Operator shall promptly return the amount of the overpayment (or credit the amount of the overpayment on the next invoice) to the Non-Operating Owner; (ii) in the case of an underpayment by the Non-Operating Owner, the Non-Operating Owner shall promptly 24 pay the amount of the underpayment to the Operator (for the benefit of the Operating Owner), otherwise, the Operator shall charge the Non-Operating Owner for the underpayment on the next invoice; and (iii) in the case of an incorrect allocation of Other Costs to an Owner, the allocations of Other Costs on the next invoice shall be adjusted to correct for such incorrect allocation, in each case, together with interest for the period from the date of overpayment, underpayment or incorrect allocation until such amount has been paid or credited against a future invoice calculated in the manner prescribed for calculating interest on refunds under the FERC Methodology. 4.9 Assistance. Each Non-Operating Owner shall cooperate with the Operator promptly, as and when reasonably requested by the Operator, to assist the Operator in the performance of its duties, responsibilities and obligations under this Agreement, including executing and delivering from time to time such additional documents, certificates or instruments, and taking such additional actions, as may be reasonably requested by the Operator. Each Non-Operating Owner shall bear its own costs for providing such cooperation and assistance as requested by the Operator unless the Owners agree otherwise in writing. 4.10 Remedies. (a) Notwithstanding any provision to the contrary contained in this Agreement, the Operators shall have no liability to the respective Non-Operating Owners in connection with the performance of their covenants and obligations under this Agreement, except as provided in this Section 4.10 and Section 14.1(c). The Non-Operating Owners agree that they have a duty to mitigate any damages and shall use Commercially Reasonable Efforts to minimize any damages they may incur as a result of an Operator’s failure to perform or breach of any of its covenants or obligations under this Agreement. (b) The Owners and Operators acknowledge that the obligations and covenants performed by the Operators hereunder are unique and that the Non-Operating Owners will be irreparably injured should such obligations and covenants not be performed in accordance with the terms and conditions of this Agreement. Consequently, the Non-Operating Owners will not have an adequate remedy at law if the Operators shall fail to perform their obligations and covenants hereunder. The Non-Operating Owners shall have the right, in addition to any other remedy available under this Agreement, to specific performance of the Operators’ obligations and covenants hereunder, and the Owners and Operators agree not to take a position in any proceeding arising out of this Agreement to the effect that the Non-Operating Owners have an adequate remedy at law. ARTICLE V OPERATION AND MAINTENANCE OF TRANSMISSION FACILITIES 5.1 Compliance; Standard of Work. (a) The Operator shall perform its obligations set forth in this Agreement: (i) without adverse distinction between the Owners; and (ii) in accordance with Good Utility Practice, Governmental Requirements, Governmental Authorizations and Reliability Standards. 25 (b) Without limiting the generality of Section 5.1(a), each Operator shall comply with Governmental Requirements and Reliability Standards applicable to an owner and an operator of the Transmission Facilities and Common Equipment for which it is responsible, regardless of whether any such Transmission Facilities and Common Equipment are solely owned by the Operating Owner, the Non-Operating Owner, or jointly owned by the Parties. 5.2 Operation and Maintenance; Outages and Outage Coordination; Capital Upgrades and Improvements. (a) Each Operator shall operate and maintain the Transmission Facilities and Common Equipment for which it is responsible in accordance with Good Utility Practice, Governmental Requirements, Governmental Authorizations and Reliability Standards. (b) Each Operator shall provide written notice of planned outages associated with the Transmission Facilities, Common Equipment and Paths for which it is responsible to the Non-Operating Owner’s outage coordinator as soon as outage schedules are known, but no later than the later of the period specified in the Operating Owner’s OATT or the Northwest Power Pool Processes document dated May 2014, as it is amended from time-to-time, regarding outage coordination and shall, subject to Good Utility Practice, Governmental Requirements, Governmental Authorizations and Reliability Standards, accommodate reasonable requests of the Non-Operating Owner to change the date or period of the planned outage. Each Operator shall promptly notify the Non-Operating Owner’s outage coordinator of any event or circumstance that results in a partial or total reduction of the transmission capacity of a Segment or Path set forth in Exhibit C, and shall use Commercially Reasonable Efforts to diligently: (i) coordinate operations during such event or circumstance; (ii) coordinate the restoration of the transmission capacity of such Segment from such event or circumstance with the Non-Operating Owner; and (iii) perform the actions necessary to restore the transmission capacity of such Segment or Path and otherwise recover from the event or circumstance. Notwithstanding any provision to the contrary contained in this Agreement, the Owners shall be allocated their share of a temporary reduction in the transmission capacity of the Transmission Facilities and the Paths pursuant to Section 3.3(a)(i), and shall be allocated their share of a permanent reduction in transmission capacity of the Transmission Facilities and the Paths pursuant to Sections 3.3(a)(ii) and 3.3(a)(iii). The Operator’s outage coordinator shall accommodate reasonable requests of the Non-Operating Owner’s outage coordinator, and Non-Operating Owner’s outage coordinator shall accommodate reasonable requests of the Operator’s outage coordinator, in the event of an actual or potential Energy Emergency to take extraordinary steps to protect reliability. (c) Each Operator shall make maintenance renewals and replacements to the Transmission Facilities and Common Equipment it is responsible for: (i) the costs of which are recordable as an operation and maintenance expense under the FERC Uniform System of Accounts; and (ii) that are necessary for the operation of the Transmission Facilities and Common Equipment in accordance with Good Utility Practice, Governmental Requirements, Governmental Authorizations and Reliability Standards. Such maintenance renewals and replacements to the Transmission Facilities are included in the services for which the Operator is compensated by the Monthly Transmission Facilities O&M Charge. The Operator shall not separately invoice the Owners for the costs of such maintenance renewals and replacements to the Transmission Facilities and Common Equipment. Notwithstanding anything to the contrary contained in this Agreement, 26 any maintenance renewals and replacements made pursuant to this Section 6.1(c) to Transmission Facilities shall be Transmission Facilities for purposes of this Agreement, and any maintenance renewals and replacements made pursuant to this Section 6.1(c) to Common Equipment shall be Common Equipment for purposes of this Agreement. (d) Each Operator shall make capital upgrades and improvements to the Transmission Facilities and Common Equipment it is responsible for: (i) the costs of which are recordable as capital expenditures under the FERC Uniform System of Accounts; and (ii) which are necessary for the operation of the Transmission Facilities and Common Equipment in accordance with Good Utility Practice, Governmental Requirements, Governmental Authorizations and Reliability Standards. The Operator shall consult with the Non-Operating Owner and receive prior approval, such approval not to be unreasonably withheld, delayed or conditioned, with respect to any capital upgrade or improvement for which the Non-Operating Owner shall have financial responsibility under this Agreement and which Operator reasonably expects to incur total project costs that exceed Five Hundred Thousand Dollars ($500,000). The Owners shall be responsible for their Pro Rata Share (based on their respective Ownership Interests, if any, in the Transmission Facilities and Common Equipment being upgraded or improved) of any Costs incurred by or on behalf of the Operator in making such capital upgrades or improvements. Such capital upgrades and improvements to the Transmission Facilities and Common Equipment are included in the services for which the Operator is compensated by the Other Costs charge. Notwithstanding anything to the contrary contained in this Agreement, any capital upgrades and improvements made pursuant to this Section 6.1(d) to the Transmission Facilities shall be considered Transmission Facilities for purposes of this Agreement, and any capital upgrades and improvements made pursuant to this Section 6.1(d) to Common Equipment shall be considered Common Equipment for purposes of this Agreement. (e) Each Operator shall assume responsibility for completion of “Idaho Power Extraordinary Items,” “PacifiCorp Extraordinary Items,” “Idaho Power Planned Improvements,” “PacifiCorp Planned Improvements” and completion of a “Casualty Loss” as each is defined in the JPSA (collectively, the “Prior Projects”), underway on the Effective Date on Segments for which it is responsible in accordance with the terms and conditions of this Agreement, and such capital upgrades, improvements, repairs or reconstruction shall not be subject to approval of the Non-Operating Owner. Such Prior Projects are included in the services for which the Operator is compensated by the Other Costs charge. The Owners shall be responsible for their Pro Rata Share (based on their respective Ownership Interests in the Segment being upgraded, improved, repaired or reconstructed) of any Costs incurred by or on behalf of: (i) the Prior Project’s Owner prior to the Effective Date; and (ii) the Operator commencing on the Effective Date through the completion of such capital upgrades, improvements, repairs or reconstruction. Notwithstanding anything to the contrary contained in this Agreement, any capital upgrades and improvements made pursuant to this Section 6.1(e) to the Transmission Facilities shall be considered Transmission Facilities for purposes of this Agreement. Insurance proceeds received by a Party related to the Prior Projects, shall be forwarded to the Operator, less an amount equal to that expended by the Party on the Prior Projects up to the Effective Date and not reflected in Net Book Value on the Effective Date. The Operator shall apply such proceeds (up to each Owner’s Pro Rata Share (based on its respective Ownership Interest(s) in the Segment being upgraded, improved, repaired or reconstructed)) to the completion of the Prior Projects, and return to the Owners their Pro Rata Share (based on their 27 respective Ownership Interest(s) in the Segment being upgraded, improved, repaired or reconstructed) of any excess insurance proceeds. 5.3 Requests for Generation or Transmission Interconnection Service. The Owners acknowledge and agree that all requests for interconnection to any of the jointly-owned Transmission Facilities must be coordinated with the Operator responsible for such Transmission Facilities and processed in a manner consistent with the Owner’s OATT pursuant to which the request was made (“Interconnection Owner”) and any Governmental Requirements. An Interconnection Owner in receipt of a request for interconnection with any jointly-owned Transmission Facilities will promptly notify the responsible Operator and the other Owner, and thereafter the Owners and the Operator will coordinate and cooperate to process the interconnection request. The Operator will coordinate and conduct any studies required to determine the impact of the interconnection request on the jointly-owned Transmission Facilities and other affected systems, including the Owners’ Transmission Systems, in accordance with the Interconnection Owner’s OATT and any Governmental Requirements. The Operator will notify the Owners and such affected systems of all meetings held with the entity requesting an interconnection. 5.4 Requests for Third-Party Joint-Use of Transmission Facilities. (a) Except as provided in subsection Section 5.4(c), all requests from a third- party (“Third-Party Requester”) for attachment of their facilities (“Third-Party Facilities”) to any of the jointly-owned Transmission Facilities (“Third-Party Use”) may be approved solely by the Operator of such Transmission Facilities; provided, however, that such approval shall be contingent on the Third-Party Requester and such Operator executing a separate agreement acceptable to the Operator that, among other things, is not inconsistent with the terms and conditions of this Agreement, and obligates the Third-Party Requester: (i) to protect against and avoid any unsafe operating conditions and negative impacts on or interference with current or future use, operations or maintenance of the Transmission Facilities that may result from such Third-Party Use; (ii) to pay all costs associated with the installation, operation and maintenance of any Third-Party Facilities, any upgrades or changes to the existing Transmission Facilities required to accommodate such Third-Party Use, and all costs incurred by the Owners or the Operator in connection with the Third-Party Use; (iii) to operate and maintain any Third-Party Facilities in a manner consistent with Good Utility Practice, this Section 5.4, and all applicable Governmental Requirements and Governmental Authorizations; (iv) to remove and permit the Owners or the Operator to remove any Third-Party Facilities following the termination or expiration of such agreement, all at the cost and expense of the Third-Party Requester; (v) to obtain and maintain during the term of such agreement insurance in such amounts as may be reasonably required by the Operator; and (vi) to indemnify and defend each of the Owners and the Operator and their respective Affiliates and their respective Representatives against damage to person or property of the Owners or the Operator or third parties. (b) Any revenues from Third-Party Use under this Section 5.4 will be allocated between the Owners in accordance with their respective Ownership Interest of the Transmission Facilities subject to such Third-Party Use as set forth in Exhibit C. 28 (c) Notwithstanding Section 5.4(a), the Owners acknowledge and agree that any request from a Third-Party Requester for Third-Party Use of the 500 kilovolt Midpoint to Hemingway to Summer Lake transmission line shall be approved by the Owners and subject to separate agreement among the Third-Party Requester and the Owners in form and substance mutually satisfactory to the Owners. (d) The Owners agree that the only Third-Party Uses and Third-Party Facilities permitted under this Agreement shall be for, or directly related to, the provision of communications services by a third party. ARTICLE VI TRANSMISSION FACILITIES CAPITAL UPGRADES PROPOSED BY AN OWNER 6.1 Capital Upgrades. (a) At any time during the Term, a Proposing Owner may elect to make a capital upgrade or improvement to the Transmission Facilities to which it has an Ownership Interest, provided that in no event shall a Proposing Owner be entitled to make a capital upgrade or improvement to any Transmission Facilities that reasonably would be expected to have a material adverse effect on the other Owner’s ownership, use or enjoyment of its Ownership Interest(s) in such Transmission Facilities (and associated Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s)) as contemplated in this Agreement. A Proposing Owner shall provide the other Owner no less than sixty (60) days’ prior written notice of its election, together with reasonable details about the proposed upgrade or improvement to the Transmission Facilities (each, a “Capital Upgrade Notice”). Within sixty (60) days of receipt of the Capital Upgrade Notice, the Non-Proposing Owner may notify the Proposing Owner in writing that it elects to participate in the capital upgrade or improvement to jointly owned Transmission Facilities. The Non-Proposing Owner may not participate in any capital upgrade or improvement to Transmission Facilities solely owned by the Proposing Owner, whether or not the Non-Proposing Owner is an Impacted Party. (i) If the Non-Proposing Owner delivers notice to the Proposing Owner within the sixty (60) day period that it elects to participate in the capital upgrade or improvement to the Transmission Facilities, then the Owners shall meet and agree on: (A) the final scope of the capital upgrade or improvement; (B) the allocation of increased transmission capacity, if any, associated with such capital upgrade and improvement between the Owners, including any change in the Owners’ Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s) which shall be determined in accordance with Section 3.3; (C) any change in each Owner’s Ownership Interest with respect to such Transmission Facilities and any applicable Substation O&M Allocation which shall be determined in accordance with Section 3.3; (D) each Owner’s share of the costs of such upgrade or improvement (which shall be based on the Owners’ respective Ownership Interests in the Transmission Facilities); (E) any change in the Monthly Transmission Facilities O&M Charge, the Monthly Substation O&M Charge, or the Monthly Common Equipment Charge, if any; and (F) such other matters as the Owners may agree upon, all of which shall be memorialized in an amendment to this Agreement executed by the Owners, including any amendments to the Exhibits hereto which shall be effective as set forth in Section 6.1(b) (the “Amendment”); provided, however, that any failure of the Owners to agree on 29 any of the matters specified in subparts (A) through (F) above shall be resolved pursuant to the provisions of Article XVII. Notwithstanding any provisions to the contrary in this Agreement, an Owner shall not be prohibited from making a capital upgrade or improvement to the Transmission Facilities pursuant to this Section 6.1(a) because the Owners fail to agree on any of the matters specified in subparts (A) through (F) of the immediately preceding sentence, and any such disagreement shall be resolved pursuant to Article XVII. (ii) If the Non-Proposing Owner elects not to participate in the capital upgrade or improvement to the Transmission Facilities (or fails to deliver a notice to the Proposing Owner within the sixty (60) day period) or is not entitled to participate in the capital upgrade or improvement to the Transmission Facilities pursuant to Section 6.1(a), then the Proposing Owner may proceed with the capital upgrade or improvement, provided that the Proposing Owner shall coordinate with the Operator responsible for the applicable Transmission Facilities on the final scope of the capital upgrade or improvement. (b) The applicable Operator shall design, permit, construct, install and commission any upgrades or improvements to the Transmission Facilities provided for in Section 6.1(a)(i) in accordance with the Amendment or, if applicable, any resolution pursuant to Article XVII, and otherwise in accordance with Good Utility Practice, Governmental Requirements and Governmental Authorizations. The Owners shall be responsible, based on the Amendment or, if applicable, any resolution pursuant to Article XVII, for all of the Costs incurred by or on behalf of the Operator in connection with such capital upgrade or improvement to the Transmission Facilities. Effective as of the date of successful commissioning of such capital upgrade or improvement, written notice of which the Operator shall provide to the Owners, the Owners’ Ownership Interests, Directional Capacity Allocation Percentages and Directional Capacity Allocations in respect of such Transmission Facilities any applicable Substation O&M Allocation shall be adjusted, if at all, in accordance with the Amendment or, if applicable, any resolution pursuant to Article XVII, and the Owners shall memorialize any revised Ownership Interests, Directional Capacity Allocation Percentages, Directional Capacity Allocations, and applicable Substation O&M Allocation in a revised Exhibit C, which shall be effective as of the date of successful commissioning of such upgrade or improvement. Notwithstanding anything to the contrary contained in this Agreement, any capital upgrades or improvements provided for in this Section 6.1(b) shall be Transmission Facilities for purposes of this Agreement. (c) The applicable Operator shall design, permit, construct, install and commission any upgrades or improvements to the Transmission Facilities provided for in Section 6.1(a)(ii) in accordance with the final scope of the capital upgrade or improvement established by the Proposing Owner pursuant to Section 6.1(a)(ii), and otherwise in accordance with Good Utility Practice, Governmental Requirements and Governmental Authorizations. Regardless of the foregoing, when an Owner of solely-owned Transmission Facilities that are operated by the other Party makes a capital upgrade or improvement, the Owner and Operator will jointly determine equipment specifications. Unless agreed to otherwise, replacement equipment shall be consistent with the original equipment specifications. The Proposing Owner shall be responsible for all of the Costs incurred by or on behalf of the Operator in connection with such capital upgrade or improvement to the Transmission Facilities and title to such capital upgrades or improvement shall vest solely with the Proposing Owner. Effective as of the date of successful commissioning of such capital upgrade or improvement, written notice of which the Operator shall 30 provide to the Owners: (i) the Owners’ Ownership Interests, Directional Capacity Allocation Percentages and Directional Capacity Allocations in respect of such Transmission Facilities and any applicable Monthly Transmission Facilities O&M Charge, Substation O&M Allocation, and Monthly Common Equipment Charge shall be adjusted, if at all, in accordance with Section 3.3; and (ii) the Operator shall operate and maintain such capital upgrade or improvement in accordance with Section 6.1(a). In addition, the Owners shall meet and agree on: (A) the allocation of increased transmission capacity, if any, associated with such capital upgrade and improvement between the Owners, including any change in the Owners’ Directional Capacity Allocation Percentages and Directional Capacity Allocations which shall be determined in accordance with Section 3.3; (B) any change in the Monthly Transmission Facilities O&M Charge, the Monthly Substation O&M Charge, or the Monthly Common Equipment Charge, if any; and (C) such other matters as the Owners may agree upon, all of which shall be memorialized in an amendment to this Agreement executed by the Owners, including any amendments to the Exhibits hereto which shall be effective as of the date of successful commissioning of such upgrade or improvement; provided, however, that any failure of the Owners to agree on any of the matters specified in subparts (A) through (C) above shall be resolved pursuant to the provisions of Article XVII. Notwithstanding anything to the contrary contained in this Agreement, any capital upgrades or improvements provided for in this Section 6.1(c) shall be Transmission Facilities for purposes of this Agreement. (d) Notwithstanding anything to the contrary contained herein, the provisions of this Section 6.1 shall not apply to capital upgrades or improvements made by an Operator pursuant to Section 6.1(c) which are necessary for the operation of the Transmission Facilities in accordance with Good Utility Practice or required by Governmental Requirements or Governmental Authorizations, which shall be governed by the provisions of Section 5.1(d). (e) Each Owner shall provide the applicable Operator prompt written notice of any request pursuant to its OATT from a customer to provide additional transmission capacity that will require one or more capital upgrades or improvements to any of the Transmission Facilities. If capital upgrades or improvements are required in accordance with such Owner’s OATT, then such capital upgrades and improvements shall be made by the Operator in accordance with the provisions of Section 6.1(a) and Section 6.1(b). 6.2 McNary Transmission Project. Within thirty (30) days after the earlier of the date on which: (a) Idaho Power notifies PacifiCorp in writing that it desires to proceed with negotiations regarding the development, construction, operation and joint ownership of a new transmission line from McNary-Walulla- Walla Walla with capacity to be determined based on future studies and needs (the “McNary Transmission Project”); or (b) PacifiCorp notifies Idaho Power that it plans to proceed with all or a part of the McNary Transmission Project, the Parties will meet and negotiate in good faith to reach agreement on the definitive terms and conditions of construction, ownership and operation agreements for the McNary Transmission Project (the “McNary Transmission Project Agreements”) pursuant to which the Parties will develop, design, engineer, procure, construct, test, commission, operate and jointly own the McNary Transmission Project. Any such negotiations shall automatically terminate if the Parties fail to reach agreement on the definitive terms and conditions of the McNary Transmission Project Agreements within ninety (90) days of receipt of 31 the earlier of the notice in Section 6.2(a) and Section 6.2(b) (the “Negotiations End Date”). The Parties will attempt, to the greatest extent possible, to base the Parties’ rights, duties, obligations, liabilities and remedies under the McNary Transmission Project Agreements on the Parties’ rights, duties, obligations, liabilities and remedies under this Agreement; provided that the Parties agree that PacifiCorp shall be the operator of and responsible for the design, engineering, procurement, construction, testing and commissioning of the McNary Transmission Project under any McNary Transmission Project Agreements and that the terms and conditions associated with PacifiCorp’s responsibilities as operator shall be definitively negotiated as part of any McNary Transmission Project Agreements. If the Parties fail to reach agreement by the Negotiations End Date on the definitive terms and conditions of the McNary Transmission Project Agreements pursuant to this Section 6.2, then PacifiCorp may proceed or not proceed with the McNary Transmission Project and Idaho Power will have no further right to participate with PacifiCorp in the development, construction, operation and joint ownership of the McNary Transmission Project. ARTICLE VII PHYSICAL DAMAGE TO TRANSMISSION FACILITIES; CONDEMNATION 7.1 Rebuilding Damaged Facilities. (a) If any of the Transmission Facilities or Common Equipment are materially damaged or destroyed (the “Damaged Facilities”), then within thirty (30) days of the date the damage or destruction occurred, the Operator responsible for such Transmission Facilities and Common Equipment shall deliver to the Owners a written notice (the “Damage Notice”) of the Operator’s good faith reasonable estimate of the cost to repair or rebuild the Damaged Facilities. (i) If the Damaged Facilities consist of Transmission Facilities that are jointly owned by the Owners and the Damage Notice indicates that the total project cost to repair or rebuild the Damaged Facilities is estimated to be Five Million Dollars ($5,000,000) or more, inclusive of insurance proceeds, then the Owners will determine whether the Damaged Facilities will be repaired or rebuilt within thirty (30) days of the date of the Damage Notice. (ii) If the Damaged Facilities consist of Transmission Facilities that are jointly owned and the Damage Notice indicates that the total project cost to repair or rebuild the Damaged Facilities is estimated to be less than Five Million Dollars ($5,000,000), inclusive of insurance proceeds, then, the Operator will determine in accordance with Good Utility Practice whether the Damaged Facilities will be repaired or rebuilt and provide notice thereof to the Owners within thirty (30) days of the date of the Damage Notice. (iii) If the Damaged Facilities consist of an Owner’s wholly-owned Transmission Facilities or Common Equipment, then, the Owner will determine in accordance with Good Utility Practice whether the Damaged Facilities will be repaired or rebuilt and provide notice thereof to the Operator within thirty (30) days of the date of the Damage Notice. (b) If the Owners, the Operator, or the Owner determines pursuant to Sections 7.1(a)(i), 7.1(a)(ii), or 7.1(a)(iii), respectively, to repair or rebuild the Damaged Facilities, then the Owners will, upon receipt of any insurance proceeds paid in connection with such Damaged Facilities, apply such proceeds (up to each Owner’s Pro Rata Share (based on its respective 32 Ownership Interest(s), if any, in the Damaged Facilities) in the amount to be paid) to the repair and reconstruction of the Damaged Facilities which will be carried out by the Operator. The Operator will be responsible for obtaining any necessary Governmental Authorizations to repair or rebuild the Damaged Facilities and determining the manner in which to repair and reconstruct the Damaged Facilities (including the equipment to be used). Each Owner shall reasonably cooperate with and support the Operator in obtaining any such Governmental Authorizations in accordance with Section 4.4(c). The Operator will cause such repairs or reconstruction to be made so that the Damaged Facilities will be repaired and restored to substantially the same general condition, character and use as existed prior to such damage or destruction. If the cost of such repairs or reconstruction exceeds the insurance proceeds required to be applied to the repair or reconstruction pursuant to this Section 7.1, then the Owners shall pay, in accordance with their applicable Ownership Interests, if any, the shortfall amount. 7.2 Decision not to Rebuild. If the Owners, the Operator, or the Owner determines pursuant to Sections 7.1(a)(i), 7.1(a)(ii), or 7.1(a)(iii), respectively, not to repair or rebuild the Damaged Facilities (or cannot reach agreement to repair or rebuild the Damaged Facilities), then, in each case: (a) each Owner shall: (i) be entitled to retain any insurance proceeds received pursuant to insurance maintained by it with respect to the Damaged Facilities; (ii) receive its Pro Rata Share (based on its respective Ownership Interest(s), if any, in the Damaged Facilities) of any revenues from the salvage or sale of the Damaged Facilities; and (iii) pay its Pro Rata Share (based on its respective Ownership Interest(s), if any, in the Damaged Facilities) of any costs of removal of parts and equipment from the Damaged Facilities; (b) the Operator shall pay to the Owners their Pro Rata Share (based on their respective Ownership Interest(s), if any, in the Damaged Facilities) of any insurance proceeds received from any property insurance obtained by the Operator pursuant to Section 4.6(b); and (c) subject to Section 7.3, this Agreement shall terminate pursuant to Section 2.3(a) solely with respect to such Damaged Facilities. 7.3 Purchase of Ownership Interest. If the Owners, the Operator, or the Owner determines pursuant to Sections 7.1(a)(i), 7.1(a)(ii), or 7.1(a)(iii), respectively, not to repair or rebuild the Damaged Facilities (or cannot reach agreement to repair or rebuild the Damaged Facilities) and, in each case, one Owner desires to repair or rebuild the Damaged Facilities (the “Continuing Owner”), then the Continuing Owner shall have the option to purchase all of the Ownership Interest(s) (and associated Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s)) of the other Owner in the Damaged Facilities. In order to exercise its option to purchase all of the Ownership Interest(s) (and associated Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s)) of the other Owner in the Damaged Facilities, the Continuing Owner must give written notice thereof to the other Owner within thirty (30) days of the Owners’ or Operator’s determination pursuant to Section 7.1 not to repair or rebuild the Damaged Facilities. The Owners shall enter into such documentation as the Continuing Owner shall reasonably request to document the purchase and sale of all of the Ownership Interest(s) (and associated Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s)) of the other Owner in the Damaged Facilities, provided that the purchase price of the Ownership Interest(s) (and associated Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s)) of the other 33 Owner shall be equal to the other Owner’s Pro Rata Share (based on its respective Ownership Interest(s) in the Damaged Facilities) of the salvage value of the Damaged Facilities. 7.4 Cooperation. If the Continuing Owner seeks to repair or rebuild the Damaged Facilities purchased from the other Owner pursuant to Section 7.3, then, at the Continuing Owner’s request and expense, the other Owner and the responsible Operator (if the Continuing Owner is not the responsible Operator) will, for a reasonable period of time, cooperate with and use Commercially Reasonable Efforts to assist the Continuing Owner in the repair or rebuilding of the Damaged Facilities. This Section 7.4 shall survive the expiration or termination of this Agreement pursuant to Section 2.3(a) solely with respect to such Damaged Facilities. 7.5 Condemnation. If there occurs a loss of title to, or ownership of, or use and possession of, all or any portion of any of the Transmission Facilities or Common Equipment as the result of the exercise of the right of condemnation or eminent domain by or on behalf of any Governmental Authority, then the Operator responsible for such Transmission Facilities or Common Equipment will promptly give notice thereof to the Owners, which notice shall generally describe the nature and extent of such condemnation or eminent domain proceedings (including any negotiations in connection with such proceedings). The Operator shall, in consultation with the Owners, use Commercially Reasonable Efforts to resist the loss of title to, or ownership of, or use and possession of, all or any portion of any of the Transmission Facilities or Common Equipment through condemnation or eminent domain. If, as a result of condemnation or eminent domain, the Owners shall lose title to, or ownership of, or use and possession of, all or any portion of any of the Transmission Facilities or Common Equipment, then the Owner or Owners shall determine whether: (a) the relevant portion of the Transmission Facilities or Common Equipment is no longer useful for the transmission of electric power and should be retired and decommissioned, in which case the provisions of Article VIII shall control; (b) the relevant portion of the Transmission Facilities or Common Equipment should be replaced or modified, in which case the Owners will, upon receipt of any awards paid in connection with such condemnation or eminent domain, apply such awards to the replacement or modification of the Transmission Facilities or Common Equipment which will be carried out by the Operator responsible for such Transmission Facilities or Common Equipment. The Operator will, consistent with the decision of the Owner or Owners, as applicable, determine the manner in which to replace or modify the Transmission Facilities or Common Equipment, and will cause such replacement and modifications to be made so that the Transmission Facilities or Common Equipment are replaced or modified in accordance with the decision of the Owner or Owners, as applicable. If the cost of replacement or modification of the Transmission Facilities or Common Equipment exceeds the awards received by the Owners in connection with such condemnation or eminent domain, then the Owners shall pay their Pro Rata Share (based on their respective Ownership Interest(s), if any, in the Transmission Facilities or Common Equipment) of the shortfall amount; or 34 (c) if the Owner or Owners, as applicable, do not reach agreement on one of the actions provided for in Section 7.5(a) and Section 7.5(b), or on another course of action, within sixty (60) days after the date of the notice provided by the Operator to the Owners pursuant to the first sentence of this Section 7.5, then each Owner shall receive its Pro Rata Share (based on its respective Ownership Interest(s), if any, in the Transmission Facilities or Common Equipment) of all awards received by the Owners (or their Affiliates) in connection with any such condemnation or eminent domain (less the actual cost, fees and expenses incurred by the Operator in collection thereof). ARTICLE VIII RETIREMENT AND DECOMMISSIONING OF TRANSMISSION FACILITIES 8.1 Decision to Retire Transmission Facilities. The Owners will determine in accordance with the terms of this Article VIII when any of the Transmission Facilities or Common Equipment are no longer useful for the transmission of electric power and should be retired and decommissioned. If the Owner or Owners decide to retire and decommission any of the Transmission Facilities or Common Equipment, then, subject to Section 8.2 and Section 8.3, this Agreement shall terminate pursuant to Section 2.3(a) solely with respect to such Transmission Facilities or Common Equipment once they are retired and decommissioned. 8.2 Costs of Decommissioning. Each of the Owners shall be responsible for paying its Pro Rata Share (based on its respective Ownership Interest(s), if any, in the Facilities Proposed for Retirement) of the aggregate amount of all costs incurred by or on behalf of the Operator to retire permanently the Facilities Proposed for Retirement from service, including decommissioning, dismantling, demolishing and removal of equipment, facilities and structures, security, maintenance, disposing of debris, abandonment and all other costs incurred by or on behalf of the Operator to retire permanently the Facilities Proposed for Retirement from service, net of any amounts recovered in connection with the sale of any retired equipment, facilities and structures. 8.3 Decommissioning Notice; Purchase of Ownership Interest. A Proposing Owner shall give written notice to the other Owner when it believes any of the Transmission Facilities or Common Equipment in which it has an Ownership Interest should be retired and decommissioned (each notice, a “Decommissioning Notice”). If the Non-Proposing Owner either (i) has an Ownership Interest in the Facilities Proposed for Retirement, or (ii) is an Impacted Party with respect to the Facilities Proposed for Retirement, and, in either case, desires to continue the operation of the Facilities Proposed for Retirement, then the Non-Proposing Owner shall have the option to purchase all of the Ownership Interest(s) (and associated Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s)), if any, of the Proposing Owner in the Facilities Proposed for Retirement. In order to exercise its option to purchase all of the Ownership Interest(s) (and associated Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s), if any) of the Proposing Owner in the Facilities Proposed for Retirement, the Non-Proposing Owner must give written notice thereof to 35 the Proposing Owner within ninety (90) days of receipt of the Decommissioning Notice. The Owners shall enter into such documentation as each Owner shall reasonably request to document the purchase and sale of the Ownership Interest(s) (and associated Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s)), if any, of the Proposing Party in the Facilities Proposed for Retirement, provided that the purchase price of the Ownership Interest(s) (and associated Directional Capacity Allocation Percentage(s) and Directional Capacity Allocation(s)) of the Proposing Party shall be equal to the Proposing Party’s Pro Rata Share (based on its respective Ownership Interest(s), if any, in the Facilities Proposed for Retirement) of the depreciated cost of the Facilities Proposed for Retirement. 8.4 Cooperation. If the Non-Proposing Owner seeks to purchase and continue the operation of the Facilities Proposed for Retirement, then, at the Non-Proposing Owner’s request and expense, the Proposing Owner and the responsible Operator (if the Non-Proposing Owner is not the responsible Operator) will, for a reasonable period of time, cooperate with and use Commercially Reasonable Efforts to assist the Non-Proposing Owner in the continued operation of the Facilities Proposed for Retirement. This Section 8.4 shall survive the expiration or termination of this Agreement pursuant to Section 2.3. ARTICLE IX TRANSMISSION SYSTEM BOUNDARIES 9.1 Points of Interconnection; Points of Balancing Authority Area Adjacency. (a) Each Owner’s Transmission System, which includes the Owner’s Ownership Interests in the Transmission Facilities, shall be considered interconnected at the Points of Interconnection, and the location and associated meter for each Point of Interconnection, and any other information required by Governmental Requirements to be agreed to by the Parties, shall have been mutually agreed to by the Parties in writing and included in operating procedures of the Parties on or before the Effective Date, which the Parties shall review and update annually as necessary. (b) Each Owner’s Balancing Authority Area shall be considered Adjacent Balancing Authority Areas at the Points of Balancing Authority Area Adjacency, and the location and associated meter for each Point of Balancing Authority Area Adjacency, and any other information required by Governmental Requirements to be agreed to by the Parties, shall have been mutually agreed to by the Parties in writing and included in operating procedures of the Parties on or before the Effective Date, which the Parties shall review and update annually as necessary. 9.2 E-Tags. Each Party shall cause the Operator of a Path to be included on all e-Tags as a scheduling entity. 9.3 Dynamic Transfer Capability Rights. 36 (a) Notwithstanding any provision of this Agreement to the contrary, Idaho Power authorizes PacifiCorp to utilize up to 400 MW of Dynamic Transfer Capability over the Idaho Power Transmission System in an east to west direction; provided, however, no schedule shall exceed the scheduling capability of any point of receipt and point of delivery combination. (b) Idaho Power’s grant of, and PacifiCorp’s utilization of, Dynamic Transfer Capability scheduling rights pursuant to this Section 9.3 are subject to Good Utility Practice and Governmental Requirements. (c) The Dynamic Transfer Capability rights provided for in this Section 9.3 does not include the Jim Bridger pseudo-tied generation provided for in Section 9.4 and recognizes that Jim Bridger Project generation does not utilize Automatic Generation Control. If the Parties desire to utilize Automatic Generation Control for Jim Bridger Project generation in the future, it will be designed to have no impact to the Dynamic Transfer Capability or any such impact will be mutually agreed to by the Parties. 9.4 Jim Bridger Pseudo Tie. (a) Idaho Power authorizes PacifiCorp to transfer its share of the electrical output of the Jim Bridger Project from the Jim Bridger Project bus bar meter into its PACW Balancing Authority Area utilizing a pseudo-tie. (b) Idaho Power’s grant of, and PacifiCorp’s utilization of, the pseudo-tie are subject to Good Utility Practice and Governmental Requirements. In addition, the pseudo-tie rights provided for in this Section 9.4 may not be sold or transferred by PacifiCorp to anyone without Idaho Power’s prior written consent. (c) To calculate the PacifiCorp pseudo tie, PacifiCorp shall subtract Jim Bridger Transmission Losses from PacifiCorp’s share of the Jim Bridger Project Net Generation. 9.5 Electric Losses. Each Party agrees that when it is the operator of the Balancing Authority Area containing a Segment for which the other Owner is the transmission provider for the Segment, that it will: (a) provide electric energy for transmission losses as needed to keep transmission service schedules whole within its Balancing Authority Area, consistent with Governmental Requirements and Reliability Standards; and (b) provide compensation for electric losses in accordance with Exhibit G “Joint Ownership Transmission Loss Calculation and Allocation Methodology.” 9.6 Jim Bridger Project Generation RAS. The Parties agree that the Jim Bridger Project shall be tripped to implement the Jim Bridger Project Generation RAS schemes according to protocols that shall have been mutually agreed to by the Parties and included in operating procedures of the Parties on or before the Effective Date, which operating procedures the Parties shall review and update annually as necessary. 37 ARTICLE X TRANSMISSION SYSTEMS OPERATION AND MAINTENANCE 10.1 Service Conditions. (a) Operation and Maintenance. Each Owner shall operate and maintain its Transmission System in a manner consistent with Good Utility Practice, Governmental Requirements, Governmental Authorizations and Reliability Standards; provided, however, that nothing in this Section 10.1(a) shall modify or amend such Party’s responsibility as an Operator under this Agreement. (b) Additional Services. This Article X is applicable only to the physical interconnection of the Owners’ Transmission Systems at the Points of Interconnection and does not obligate either Owner to receive or provide any service. Other services provided by one Owner to the other Owner shall be governed by such other agreements as the Owners may enter into from time to time. (c) Interruption of Service. The Owners shall use Commercially Reasonable Efforts, consistent with Good Utility Practice, Reliability Standards and Governmental Requirements, to provide a physical interconnection to be operated in continuous synchronization at the Points of Interconnection, provided that an Owner (“Interrupting Owner”) may temporarily interrupt or isolate the interconnected facilities under the following circumstances: (i) by operation of automatic equipment installed for power system protection; (ii) after consultation with the other Owner, other than in an emergency situation where consultation is not practicable, when an Owner deems it necessary for installation, maintenance, inspection, repairs or replacements of equipment on its Transmission System; (iii) at any time that, in the sole judgment of the Interrupting Owner, such action is necessary to preserve the integrity of, or to prevent or limit any instability on its Transmission System; (iv) where necessary to comply with documented directives from a Governmental Authority; (v) as a result of one or more events of Force Majeure; or (vi) where necessary to prevent: (A) death or serious injury to any person; (B) material damage or harm to any property; or (C) any material adverse effect to the security of, or damage to its Transmission System or the electric systems of others to which its Transmission System is directly connected, including the other Owner’s Transmission System. An Interrupting Owner shall use Commercially Reasonable Efforts to provide the other Owner (1) with reasonable advance notice of any planned interruption of the interconnection facilities in accordance with the notice requirements set forth in Section 5.2(b), and (2) with notice of any other interruption of the interconnected facilities as soon as practicable after the interruption. If synchronous operation is interrupted, the Owners shall cooperate so as to remove the cause of such interruption as soon as commercially practicable consistent with Good Utility Practice, Reliability Standards and Governmental Requirements. (d) Physical and Cyber Security. The Operators shall cooperate with the Owners in complying with any physical and cyber security or other security requirement established by Governmental Requirements or Reliability Standards applicable to the Owners and the Transmission Facilities and the Common Equipment, written notice of which the Owners shall provide to the Operators. 10.2 Survival. 38 The provisions of this Article X, together with other provisions of this Agreement (but only to the extent applicable to the surviving provisions of this Article X), shall continue in full force and effect notwithstanding the termination of this Agreement, provided that in the event of termination of this Agreement, the Parties shall amend this Agreement to reflect such changes to this Agreement as shall be necessary and mutually acceptable to the Parties to conform this Agreement to the surviving provisions of this Agreement in accordance with this Section 10.2. ARTICLE XI FORCE MAJEURE 11.1 Force Majeure Defined. For purposes of this Agreement, “Force Majeure” means an event or circumstance beyond the reasonable control of and without the fault or negligence of the Party claiming Force Majeure (“Affected Party”), which, despite the exercise of reasonable diligence, cannot be or be caused to be prevented, avoided or removed by such Affected Party including, to the extent satisfying the above requirements, acts of God; earthquake; abnormal weather condition; hurricane; flood; lightning; high winds; drought; peril of the sea; explosion; fire; war (declared or undeclared); military action; sabotage; riot; insurrection; civil unrest or disturbance; acts of terrorism; economic sanction or embargo; civil strike, work stoppage, slow-down, or lock-out that are of an industry or sector-wide nature and that are not directed solely or specifically at the Affected Party; the binding order of any Governmental Authority, provided that the Affected Party has in good faith reasonably contested such order; the failure to act on the part of any Governmental Authority, provided that such action has been timely requested and diligently pursued; unavailability of equipment, supplies or products, but only to the extent caused by Force Majeure; failure of equipment, provided that the equipment has been operated and maintained in accordance with Good Utility Practice; and transportation delays or accidents, but only to the extent otherwise caused by Force Majeure; provided, however, that neither insufficiency of funds, financial inability to perform nor changes in market conditions shall constitute Force Majeure. 11.2 Effect of Force Majeure. (a) If an Affected Party is rendered wholly or partly unable to perform its obligations under this Agreement or its performance is delayed because of Force Majeure, such Affected Party shall be excused from, and shall not be liable for, whatever performance it is unable to perform or delayed in performing due to the Force Majeure to the extent so affected, provided that: (i) The Affected Party, as soon as reasonably practical after the commencement of the Force Majeure, gives the other Party prompt written notice thereof, including a description of the particulars of the Force Majeure; (ii) The suspension of performance is of no greater scope and of no longer duration than is required by the Force Majeure; and (iii) The Affected Party uses Commercially Reasonable Efforts to overcome and remedy its inability to perform as soon as reasonably practical after the commencement of the Force Majeure. 39 (b) Notwithstanding anything in this Article XI to the contrary, no payment obligation arising under this Agreement prior to the date of an event of Force Majeure shall be excused by such event of Force Majeure. (c) Whenever an Affected Party is required to commence or complete any action within a specified period and is prevented or delayed by Force Majeure from commencing or completing such action within the specified period, such period shall be extended by an amount equal to the duration of such event of Force Majeure occurring or continuing during such period. ARTICLE XII EVENTS OF DEFAULT 12.1 Event of Default. Each of the following events shall constitute an event of default (“Event of Default”) by the defaulting Party (a “Defaulting Party”): (a) The failure to make, when due, any payment required pursuant to this Agreement, if such failure is not remedied within thirty (30) days after written notice thereof from the Non-Defaulting Party; (b) Any representation or warranty made by such Defaulting Party herein is false or misleading in any material respect when made, unless: (i) the fact, circumstance or condition that is the subject of such representation or warranty is made true within thirty (30) days after notice thereof from the Non-Defaulting Party, provided that if the fact, circumstance or condition that is the subject of such representation or warranty reasonably cannot be corrected within such thirty (30) day period, then the Defaulting Party shall have an additional period of time (not to exceed sixty (60) days) in which to correct the fact, circumstance or condition that is the subject of such representation or warranty; and (ii) such cure removes any adverse effect on the Non-Defaulting Party of such fact, circumstance or condition being otherwise than as first represented, or such fact, circumstance or condition being otherwise than as first represented does not materially adversely affect the Non-Defaulting Party; (c) A transfer, assignment or other disposition of its interest in this Agreement or its Ownership Interests (or Directional Capacity Allocation Percentages and Directional Capacity Allocations) in the Transmission Facilities, in each case, in violation of Article XIX; (d) The failure to perform or breach of its covenants and obligations in Section 3.7; (e) The failure to be a Qualified Owner, if such failure is not remedied within thirty (30) days after written notice thereof from the Non-Defaulting Party; (f) The failure to perform or breach of any material covenant or obligation set forth in this Agreement (other than provided for in Section 12.1(a), (b), (c), (d) or (e)), if such failure is not remedied within thirty (30) days after written notice thereof from the Non-Defaulting Party, provided that if such failure or breach cannot reasonably be cured within thirty (30) days, then the Defaulting Party shall have an additional period of time (not to exceed ninety (90) days) 40 in which to cure such failure or breach so long as the Defaulting Party commences good faith activities to cure the failure or breach during the initial 30-day cure period and continues to utilize Commercially Reasonable Efforts to effect a cure; or (g) The Defaulting Party becomes Bankrupt. 12.2 Cure by Non-Defaulting Party. If a Defaulting Party fails to cure an Event of Default, then the Non-Defaulting Party may, in its sole discretion, attempt to cure the Event of Default, provided that the Defaulting Party shall reimburse the Non-Defaulting Party for all costs and expenses incurred by or on behalf of the Non- Defaulting Party pursuant to this Section 12.2. 12.3 Remedies. (a) If an Event of Default occurs and is continuing, then the Non-Defaulting Party shall be entitled to exercise any of it remedies at law or in equity, including recovery from the Defaulting Party of any damages suffered as a result of the Event of Default, subject to Section 14.8. The Non-Defaulting Party shall use Commercially Reasonable Efforts to mitigate any damages suffered as a result of the Event of Default. (b) The Parties acknowledge that the obligations and covenants performed by each Party hereunder are unique and that the Non-Defaulting Party will be irreparably injured should such obligations and covenants not be consummated in accordance with the terms and conditions of this Agreement. Consequently, the Non-Defaulting Party will not have an adequate remedy at law if the other Party shall fail to perform its obligations and covenants hereunder. The Non-Defaulting Party shall have the right, in addition to any other remedy available under this Agreement, to specific performance of the Defaulting Party’s obligations and covenants hereunder, and the Parties agree not to take a position in any proceeding arising out of this Agreement to the effect that the Non-Defaulting Party has an adequate remedy at law. ARTICLE XIII REPRESENTATIONS AND WARRANTIES 13.1 Representations and Warranties of Idaho Power. Idaho Power represents and warrants to PacifiCorp as of the Execution Date as follows: (a) It is duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation. (b) It has all requisite corporate power necessary to own its assets and carry on its business as now being conducted or as proposed to be conducted under this Agreement. (c) It has all necessary corporate power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement, and the execution and delivery of this Agreement and the performance by it of this Agreement have been duly authorized by all necessary corporate action on its part. 41 (d) The execution and delivery of this Agreement and the performance by it of this Agreement do not: (i) violate its organizational documents; (ii) violate any Governmental Requirements; or (iii) result in a breach of or constitute a default of any material agreement to which it is a party. (e) This Agreement has been duly and validly executed and delivered by it and constitutes its legal, valid and binding obligation enforceable against it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency or other similar laws affecting creditors’ rights generally and by principles of equity regardless of whether such principles are considered in a proceeding at law or in equity. (f) Except as disclosed in Schedule 13.1(f), all material Governmental Authorizations required by Governmental Requirements to have been obtained by it prior to the date hereof in connection with the due execution and delivery of this Agreement, have been duly obtained or made and are in full force and effect. (g) It is a Qualified Owner. 13.2 Representations and Warranties of PacifiCorp. PacifiCorp represents and warrants to Idaho Power as of the Execution Date as follows: (a) It is duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation. (b) It has all requisite corporate power necessary to own its assets and carry on its business as now being conducted or as proposed to be conducted under this Agreement. (c) It has all necessary corporate power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement, and the execution and delivery of this Agreement and the performance by it of this Agreement have been duly authorized by all necessary corporate action on its part. (d) The execution and delivery of this Agreement and the performance by it of this Agreement do not: (i) violate its organizational documents; (ii) violate any Governmental Requirements; or (iii) result in a breach of or constitute a default of any material agreement to which it is a party. (e) This Agreement has been duly and validly executed and delivered by it and constitutes its legal, valid and binding obligation enforceable against it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency or other similar laws affecting creditors’ rights generally and by principles of equity regardless of whether such principles are considered in a proceeding at law or in equity. (f) Except as disclosed in Schedule 13.2(f), all material Governmental Authorizations required by Governmental Requirements to have been obtained by it prior to the date hereof in connection with the due execution and delivery of this Agreement, have been duly obtained or made and are in full force and effect. 42 (g) It is a Qualified Owner. ARTICLE XIV INDEMNIFICATION 14.1 Indemnities. (a) Subject to the provisions of Section 14.3 and Section 14.8, each Owner (the “Indemnifying Party”) shall indemnify, defend and hold harmless the other Owner (the “Indemnified Party”) and its Representatives, from and against any and all suits, actions, liabilities, legal proceedings, claims, demands, losses, costs and expenses of whatsoever kind or character (including reasonable attorneys’ fees and expenses) of third parties (collectively, “Claims”), for injury or death of persons or physical loss of or damage to property of Persons (other than the Indemnified Party and its Representatives) arising from the Indemnifying Party’s (including its Representatives’): (i) gross negligence or willful misconduct in connection with the performance of this Agreement; or (ii) failure to perform a material obligation under this Agreement. (b) In addition to and not in limitation of the indemnity provided in Section 14.1(a), but subject to the provisions of Section 14.3 and Section 14.8, each Owner, as Indemnifying Party, shall severally and not jointly, in accordance with its applicable Ownership Interest(s), indemnify, defend and hold harmless each Operator, as Indemnified Party, and its Representatives from and against any and all Claims for injury or death of persons or physical loss of or damage to property of Persons (other than the Indemnified Party and its Representatives), or fines or penalties levied or imposed by Governmental Authorities or other Losses incurred by the Indemnified Party and its Representatives, in each case, arising under or in connection with this Agreement, including in connection with the performance by the Operator of its obligations under this Agreement, except for such Claims or fines or penalties or other Losses arising from the Operator’s or its Representatives’: (i) gross negligence or willful misconduct in connection with the performance of this Agreement; or (ii) failure to perform a material obligation under this Agreement. (c) Subject to the provisions of Section 14.3 and Section 14.8, each Operator, as Indemnifying Party, shall indemnify, defend and hold harmless each Owner, as Indemnified Party, and its Representatives from and against any and all Claims for injury or death of persons or physical loss of or damage to property of Persons (including the Indemnified Party and its Representatives), or fines or penalties levied or imposed by Governmental Authorities or other Losses incurred by the Indemnified Party and its Representatives, in each case, arising from the Operator’s and its Representatives’: (i) gross negligence or willful misconduct in connection with the performance of this Agreement; or (ii) failure to perform a material obligation under this Agreement; provided, however, in no event shall the Operator be obligated to indemnify, defend or hold harmless an Owner and its Representatives from and against any such Claims or fines or penalties or Losses to the extent arising from such Owner’s or its Representatives’: (i) gross negligence or willful misconduct in connection with the performance of this Agreement; or (ii) failure to perform any material obligation under this Agreement. 14.2 Notice and Participation. 43 (a) If an Indemnified Party intends to seek indemnification under this Article XIV with respect to any Claims, the Indemnified Party shall give the Indemnifying Party prompt written notice of such Claims upon the receipt of actual knowledge or information by the Indemnified Party of any possible Claims or of the commencement of such Claims. The Indemnifying Party shall have no liability under this Article XIV for any Claim for which such notice is not provided, but only to the extent that the failure to give such notice materially impairs the ability of the Indemnifying Party to respond to or to defend the Claim. (b) The Indemnifying Party shall have the right to assume the defense of any Claim, at its sole cost and expense, with counsel designated by the Indemnifying Party and reasonably satisfactory to the Indemnified Party; provided, however, that if the defendants in any such proceeding include both the Indemnified Party and the Indemnifying Party, and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are in conflict with those available to the Indemnifying Party and that such conflict materially prejudices the ability of the counsel selected by the Indemnifying Party to represent both Parties, the Indemnified Party shall have the right to select separate counsel reasonably satisfactory to the Indemnifying Party, at the Indemnifying Party’s expense, to assert such legal defenses and to otherwise participate in the defense of such Claim on behalf of such Indemnified Party, and the Indemnifying Party shall be responsible for the reasonable fees and expenses of such separate counsel. (c) Should any Indemnified Party be entitled to indemnification under this Article XIV as a result of a Claim, and should the Indemnifying Party fail to assume the defense of such Claim within a reasonable period of time after the Indemnified Party has provided the Indemnifying Party written notice of such Claim, the Indemnified Party may, at the expense of the Indemnifying Party, contest or, with or without the prior consent of the Indemnifying Party, settle such Claim. (d) Except to the extent expressly provided herein, no Indemnified Party shall settle any Claim with respect to which it has sought or is entitled to seek indemnification pursuant to this Article XIV unless: (i) it has obtained the prior written consent of the Indemnifying Party; or (ii) the Indemnifying Party has failed to assume the defense of such Claim within a reasonable period of time after the Indemnified Party has provided the Indemnifying Party written notice of such Claim. (e) Except to the extent expressly provided otherwise herein, no Indemnifying Party shall settle any Claim with respect to which it may be liable to provide indemnification pursuant to this Section without the prior written consent of the Indemnified Party; provided, however, that if the Indemnifying Party has reached a bona fide settlement agreement with the plaintiff(s) in any such proceeding, which settlement includes a full release of the Indemnified Party for any and all liability with respect to such Claim and does not obligate the Indemnified Party to take or forbear to take any action, and the Indemnified Party does not consent to such settlement agreement, then the dollar amount specified in the settlement agreement, plus the Indemnified Party’s reasonable legal fees and other costs related to the defense of the Claim paid or incurred prior to the date of such settlement agreement, shall act as an absolute maximum limit on the indemnification obligation of the Indemnifying Party with respect to the Claim, or portion thereof, that is the subject of such settlement agreement. 44 14.3 Net Amount. Subject to the limitation in Section 14.2(e), if applicable, in the event that an Indemnifying Party is obligated to indemnify and hold any Indemnified Party harmless under this Article XIV, the amount owing to the Indemnified Party shall be the amount of such Indemnified Party’s actual Claims, fines or penalties or other Losses, as the case may be, net of any insurance or other recovery actually received by the Indemnified Party. 14.4 No Release of Insurers. The provisions of this Article XIV shall not be deemed or construed to release any insurer from its obligation to pay any insurance proceeds in accordance with the terms and conditions of valid and collectible insurance policies. 14.5 Mitigation. Each Indemnified Party entitled to indemnification hereunder shall use Commercially Reasonable Efforts to mitigate all Claims, fines, penalties or other Losses, as the case may be, after becoming aware of any event which could reasonably be expected to give rise to any Claims, fines, penalties or other Losses, as the case may be, that are indemnifiable or recoverable hereunder or in connection herewith. 14.6 Assertion of Claims. No Claim of any kind shall be asserted against any Owner or Operator pursuant to this Article XIV, whether arising out of contract, tort (including negligence), strict liability, or any other cause of or form of action, unless it is filed in a court of competent jurisdiction, or a demand for arbitration is made, within the applicable statute of limitations period for such Claim. 14.7 Survival of Obligation. The duty to indemnify under this Article XIV shall continue in full force and effect notwithstanding the expiration or termination of this Agreement, with respect to any Claim, fine, penalty or other Losses, as the case may be, arising out of an event or condition which occurred or existed prior to such expiration or termination. 14.8 Limitation on Liability. (a) Notwithstanding any provision in this Agreement to the contrary, neither Party shall be liable under this Agreement in any action at law or in equity, whether based on contract, tort or strict liability or otherwise, for any special, incidental, indirect, exemplary, punitive or consequential damages or losses, including any loss of revenue, income, profits or investment opportunities, loss of the use of equipment, or the cost of temporary equipment or services, provided that any fines or penalties or other Losses levied or imposed by Governmental Authorities shall not be excluded under this Section 14.8(a) as special, incidental, indirect, exemplary, punitive or consequential damages or losses. 45 (b) Notwithstanding any provision in this Agreement to the contrary, neither Party shall be liable under this Agreement if and to the extent that the Agreement Limiting Liability Among Western Interconnected Systems executed by Idaho Power on August 5, 1985 and by PacifiCorp on August 22, 1973 (the “WIS Agreement”) is then in effect between the Parties and expressly limits or precludes such liability. Nothing in this Agreement shall amend or otherwise affect in any way the terms and conditions of or liability of the Parties under the WIS Agreement. ARTICLE XV PROPRIETARY INFORMATION 15.1 Disclosure of Proprietary Information Prohibited. Any Proprietary Information of a Party (whether in its capacity as Owner or Operator) (the “Transferor”) which is disclosed to or otherwise received or obtained by the other Party (whether in its capacity as Owner or Operator) (the “Transferee”) incident to this Agreement shall be held in confidence and the Transferee shall not (subject to Sections 15.2, 15.3 and 15.5) publish or otherwise disclose any Proprietary Information of the Transferor to any Person for any reason or purpose whatsoever, or use any Proprietary Information for any purpose other than performance under this Agreement, without the prior written approval of the Transferor, which approval may be granted or withheld by the Transferor in its sole discretion. Without limiting the generality of the foregoing, each Transferee shall observe at a minimum the same safeguards and precautions with regard to the Transferor’s Proprietary Information which the Transferee observes with respect to its own information of the same or similar kind. 15.2 Disclosure by Representatives. Each Transferee agrees that it will make available Proprietary Information received from a Transferor to its own Representatives only on a need-to-know basis and in compliance with Governmental Requirements, and that all Persons to whom such Proprietary Information is made available will be made aware of the confidential nature of such Proprietary Information, and will be required to agree to hold such Proprietary Information in confidence in accordance with the terms hereof and in compliance with Governmental Requirements. 15.3 Permitted Disclosures. Notwithstanding anything to the contrary contained in this Article XV: (a) A Transferee may provide any Proprietary Information to any Governmental Authority having jurisdiction over or asserting a right to obtain such information, provided that: (i) such Governmental Authority orders that such Proprietary Information be provided; and (ii) unless prohibited from so doing by Governmental Requirements, the Transferee promptly advises the Transferor of any request for such information by such Governmental Authority and cooperates in giving the Transferor an opportunity to present objections, requests for limitation, and/or requests for confidentiality or other restrictions on disclosure or access, to such Governmental Authority. (b) A Transferee may, to the extent required, disclose Proprietary Information to any Governmental Authority in connection with the application for any Governmental 46 Authorization; provided that unless prohibited from so doing by Governmental Requirements, the Transferee shall provide the Transferor prior written advance notice of such disclosure and the Proprietary Information that is to be disclosed. (c) A Transferee may disclose such Proprietary Information regarding the existence and terms of this Agreement as such Transferee deems necessary to enable it to comply with the Securities Exchange Act of 1934, or the rules, regulations and forms of the Securities and Exchange Commission, issued thereunder or the applicable rules of any stock exchange, or as otherwise required by Governmental Requirements. 15.4 Injunctive Relief. In the event of a breach or threatened breach of the provisions of this Article XV by any Transferee, the Transferor shall be entitled to an injunction restraining the Transferee from such breach or threatened breach. Nothing contained herein shall be construed as prohibiting the Transferor from pursuing any other remedies available at law or equity for such breach or threatened breach of this Agreement. 15.5 Publicity. Any public relations matters, including public announcements and press releases or similar publicity, arising out of or in connection with the terms of this Agreement or the transactions contemplated herein, shall be coordinated and agreed to between the Parties prior to said announcement or release. 15.6 Proprietary Information Defined. For purposes of this Agreement, “Proprietary Information” means all information, written or oral, which has been or is disclosed by the Transferor, or by any Representative of the Transferor, or which otherwise becomes known to the Transferee, or to any Representative of such Transferee, or any other party in a confidential relationship with, the Transferee, in each case, incident to this Agreement, and which: (a) relates to matters such as patents, trade secrets, research and development activities, draft or final contracts or other business arrangements, books and records, budgets, cost estimates, pro forma calculations, engineering work product, environmental compliance, vendor lists, suppliers, manufacturing processes, energy consumption, pricing information, private processes, and other similar information, as they may exist from time to time; (b) and the Transferor expressly designates in writing to be confidential, provided that “Proprietary Information” shall exclude information falling into any of the following categories: (i) Information that, at the time of disclosure hereunder, is in the public domain, other than information that entered the public domain by breach of this Agreement by Transferee or any of its Representatives; (ii) Information that, after disclosure hereunder, enters the public domain, other than information that enters the public domain by breach of this Agreement by Transferee or any of its Representatives; 47 (iii) Information, other than that obtained from third-parties, that prior to disclosure hereunder, was already in Transferee’s possession, either without limitation on disclosure to others or subsequently becoming free of such limitation; (iv) Information obtained by Transferee from a third-party having an independent right to disclose the information; or (v) Information that is available through independent research without use of or access to the Proprietary Information. 15.7 Survival. The provisions of this Article XV shall continue in full force and effect during the Term and for a period of two (2) years thereafter, notwithstanding the termination of this Agreement, with respect to any Proprietary Information obtained by any Transferee prior to such termination. ARTICLE XVI TAXES 16.1 No Partnership. Nothing in this Agreement shall be deemed to create or constitute a partnership, joint venture or association between the Owners. Each Owner agrees and covenants that it shall not take or omit to take any action or reporting position with any Governmental Authority contrary to this Section 16.1. 16.2 761 Election. The Owners intend that, as tenants in common and owners of undivided Ownership Interests, for United States income tax purposes the Owners shall elect in accordance with the provisions of section 761 of the Internal Revenue Code of 1986, as amended (“Code”), and the applicable income tax regulations thereunder (“Regulations”), to be excluded from all of the provisions of Subchapter K of the Code upon the first occasion in which such election may be filed under these Regulations and that, if such election is not filed, this Agreement shall constitute an election under Regulations section 1.761-2(b)(2)(ii) to be excluded from all of the provisions of Subchapter K of the Code and the applicable Regulations, beginning with the first year of the creation of the tenancy in common as contemplated by this Agreement and that no Owner shall object to any such election. 16.3 Responsibility for Taxes. It is the intent of the Owners that so far as possible, each Owner shall separately report, promptly and timely file returns with respect to, be responsible for and pay all property, income, franchise, business, or other taxes or fees (“Taxes”), arising out of its Ownership Interests and the matters contemplated by this Agreement, that such Taxes shall be separately levied and assessed against each Owner severally and that each Owner shall be solely responsible for and shall pay all such Taxes so levied and assessed against it without any responsibility of the other Owner with respect thereto and without the amounts thereof being paid and apportioned between the Owners 48 under this Agreement. To the extent that Taxes (such as property, payroll, sales and use Taxes) may be levied or assessed against the Transmission Facilities, their operation or the Owners in such a manner as to make impossible the carrying out of the foregoing provisions of this Section 16.3, then either Operator shall report, file returns with respect to and pay such Taxes and each Owner shall immediately reimburse such Operator for each such Owner’s Pro Rata Share (based on its applicable Ownership Interest(s)) of such Taxes; provided, however, that sales and use tax included in Other Costs or in the Monthly Transmission Facilities O&M Charge, the Monthly Substation O&M Charge or the Monthly Common Equipment Charge shall be recovered by the Operator pursuant to Section 4.7. Neither Operator shall have any obligation to contest or to seek refund of such Taxes; provided, however, that each Operator may, by its personnel or counsel of its selection, pursue such administrative or court proceedings as the Operator may determine. Each Owner shall on request pay to the Operator such Owner’s Pro Rata Share (based on its applicable Ownership Interest(s)) of the costs of such proceedings and shall share in any savings resulting from such proceedings in the same proportion. Each Owner agrees to cooperate with the other Owner with respect to reasonable requests for information or other matters with respect to Taxes. 16.4 Indemnification. Each Owner (the “Tax Indemnifying Party”) shall indemnify and hold harmless the other Owner (the “Tax Indemnitee Party”), on an after-tax basis, from and against any Taxes (including any interest or penalties) imposed on such Tax Indemnitee Party or the Transmission Facilities or any part thereof, to the extent such Taxes are the responsibility of the Tax Indemnifying Party pursuant to this Article XVI. 16.5 Determination of Depreciation and Other Matters. Each Owner shall determine the basis and method it will use for purposes of depreciation and other matters where investment of the Transmission Facilities or Common Equipment is relevant. ARTICLE XVII DISPUTES 17.1 Exclusive Procedure. Any dispute, controversy or claim arising out of or relating to this Agreement or the breach, interpretation, termination, performance or validity of this Agreement (each, a “Dispute”) shall be resolved pursuant to the procedures of this Article XVII. 17.2 Dispute Notices. If a Dispute arises between the Parties, then either Party may provide written notice thereof to the other Party, including a detailed description of the subject matter of the Dispute (the “Dispute Notice”). Any Party may seek a preliminary injunction or other provisional judicial remedy if such action is necessary to prevent irreparable harm or preserve the status quo, in which case the Parties nonetheless will continue to pursue resolution of the Dispute pursuant to this Article XVII. 17.3 Informal Dispute Resolution. 49 (a) The Parties shall make a good faith effort to resolve any Dispute by prompt negotiations between the Party’s representative so designated in writing to the other Party (each a “Manager”). If the Managers are not able to resolve the Dispute within thirty (30) days after the date of the Dispute Notice, then they shall refer the matter to the designated senior officers of their respective companies (the “Executive(s)”), who shall have authority to settle the Dispute. If the Executives are not able to resolve the Dispute within sixty (60) days after the date of the Dispute Notice, then the Dispute shall be resolved pursuant to Section 17.4. (b) All negotiations, communications and writings exchanged between the Parties pursuant to this Article XVII shall be treated and maintained as Proprietary Information, shall be treated as compromise and settlement negotiations for purposes of the federal and state rules of evidence, and shall not be used or referred to in any subsequent adjudicatory process between the Parties, including at FERC, either with respect to the current Dispute or any future Dispute between the Parties. 17.4 Submission of Dispute to FERC or Approved Courts. If a Dispute cannot be settled amicably between the Parties pursuant to Section 17.3, then any Party may, in its sole discretion, within one (1) year after the conclusion of the time period for informal dispute resolution specified in Section 17.3, submit such Dispute (a) to FERC or (b) to the jurisdiction of the state courts situated in the State of Idaho or the United States District Court for the District of Idaho (the “Approved Courts”). Each of the Parties, in its capacity as an Owner and Operator, consents to and accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the Approved Courts and appellate courts from any appeal thereof, and irrevocably waives any objection which it may now or hereafter have to the jurisdiction of the Approved Courts. Each of the Parties, in its capacity as an Owner and Operator, further irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any suit, proceeding or other action brought pursuant to this Article XVII in any of the Approved Courts, and irrevocably waives, to the fullest extent permitted by law, and agrees not to plead or claim in any such Approved Court that any suit, proceeding or other action brought therein has been brought in an inconvenient forum. 17.5 Continued Performance. During the pendency of any Dispute, each Party shall continue to perform all of its respective obligations under this Agreement. ARTICLE XVIII ASSIGNMENT 18.1 Prohibited Transfers and Assignments. Neither Party shall have the right to transfer, assign, sell or otherwise dispose of (collectively, “Transfer”), in whole or in part, its interest in this Agreement, including its rights, duties and obligations hereunder, nor to Transfer, in whole or in part, its Ownership Interests (or Directional Capacity Allocation Percentages and Directional Capacity Allocations) in the Transmission Facilities or Common Equipment, except as permitted under this Article XVIII. 50 18.2 Permitted Assignments and Transfers. Subject to Section 18.3, the restrictions set forth in Section 18.1 shall not restrict: (a) Dispositions and sales of equipment or facilities by either Operator incident to renewals or replacements of the Transmission Facilities or Common Equipment; (b) The right of an Owner to subject any of its Ownership Interests (or Directional Capacity Allocation Percentages and Directional Capacity Allocations) to the lien of any mortgage upon all or a portion of its own physical electric utility property or to otherwise collaterally assign its rights and obligations in this Agreement to a lender or other person providing financing to the Owner; (c) The right of an Owner to Transfer voluntarily all of its Ownership Interests (and Directional Capacity Allocation Percentages and Directional Capacity Allocations) and all of its rights and obligations in this Agreement (including as part of such Transfer, all of its rights and obligations in this Agreement as an Operator) in connection with any sale, merger or other transfer of substantially all of such Owner’s electric transmission facilities as an operating entity; provided, however, that the effectiveness of such Transfer shall be conditioned upon the transferee: (i) agreeing in writing, in form and substance reasonably satisfactory to the other Owner, to assume all of the rights and obligations of the transferring Owner (including, all of its rights and obligations in this Agreement as an Operator) as of the transfer date; and (ii) qualifying as a Qualified Owner on the transfer date; (d) The right of an Owner to Transfer voluntarily all of its Ownership Interests (and Directional Capacity Allocation Percentages and Directional Capacity Allocations) and all of its rights and obligations in this Agreement (including as part of such Transfer, all of its rights and obligations in this Agreement as an Operator) to an Affiliate of such Owner which owns all or substantially all of the transmission facilities of such Owner; provided, however, that the effectiveness of such Transfer shall be conditioned upon the transferee: (i) agreeing in writing, in form and substance reasonably satisfactory to the other Owner, to assume all of the rights and obligations of the transferring Owner (including, all of its rights and obligations in this Agreement as an Operator) as of the transfer date; and (ii) qualifying as a Qualified Owner on the transfer date; (e) The right of any Owner to Transfer voluntarily all of its Ownership Interests (and Directional Capacity Allocation Percentages and Directional Capacity Allocations) and all of its rights and obligations in this Agreement (including as part of such Transfer, all of its rights and obligations in this Agreement as an Operator) to a third party; provided that: (i) the other Owner, in its sole discretion, approves such Transfer and approves the third-party purchaser as having demonstrated that it is financially and technically capable of performing the transferring Owner’s (and Operator’s) obligations under this Agreement; and (ii) the other Owner is offered the right of first refusal to purchase all of such Ownership Interests (and Directional Capacity Allocation Percentages and Directional Capacity Allocations) and Common Equipment and all of the transferring Owner’s rights and obligations in this Agreement (including as part of such Transfer, all of its rights and obligations in this Agreement as an Operator), on terms no less favorable than those offered to such proposed third-party purchaser; provided, however, that the effectiveness of 51 such Transfer shall be conditioned upon the third-party purchaser: (A) agreeing in writing, in form and substance reasonably satisfactory to the other Owner, to assume all of the rights and obligations of the transferring Owner (including as part of such Transfer, all of its rights and obligations in this Agreement as an Operator) as of the transfer date; and (B) qualifying as a Qualified Owner on the transfer date; and (f) The right of an Owner to post, sell or make available for scheduling transmission capacity or schedule energy in accordance with Sections 3.2(b) and 3.2(c), unless otherwise mutually agreed to in writing in advance by the other Owner. 18.3 FERC Approval. Any Transfer pursuant to Section 18.2 that is subject to FERC approval shall not take effect until FERC has approved such Transfer and has made it effective. ARTICLE XIX MISCELLANEOUS 19.1 Notices. (a) Any notice, demand, request or other communication required or permitted to be given pursuant to this Agreement shall be in writing and signed by the Owner or Operator giving such notice, demand, request or other communication and shall be hand delivered or sent by certified mail, return receipt requested, or overnight courier to the other Owner and/or Operator at the address set forth below: If to Idaho Power as Owner: Idaho Power Company 1221 West Idaho Street Boise, ID 83702 Attn: Director, Load Serving Operations Telephone: 208-388-2360 With a copy to: Idaho Power Company 1221 West Idaho Street Boise, ID 83702 Attn: Legal Department Telephone: 208-388-2300 If to Idaho Power as Operator: Idaho Power Company 1221 West Idaho Street Boise, ID 83702 Attn: Director, Load Serving Operations Telephone: 208-388-2360 52 With a copy to: Idaho Power Company 1221 West Idaho Street Boise, ID 83702 Attn: Legal Department Telephone: 208-388-2300 If to PacifiCorp as Owner: PacifiCorp 825 NE Multnomah Street, Suite 1600 Portland, OR 97232 Attn: Director, Transmission Service Telephone: 503-813-6712 With a copy to: PacifiCorp 825 NE Multnomah Street, Suite 2000 Portland, OR 97232 Attn: Legal Department Telephone: 503-813-5854 If to PacifiCorp as Operator: PacifiCorp 825 NE Multnomah Street, Suite 1600 Portland, OR 97232 Attn: Director, Transmission Service Telephone: 503-813-6712 With a copy to: PacifiCorp 825 NE Multnomah Street, Suite 2000 Portland, OR 97232 Attn: Legal Department Telephone: 503-813-5854 (b) Each Party shall have the right to change the place to which any notice, demand, request or other communication shall be sent or delivered by similar notice sent in like manner to the other Party. The effective date of any notice, demand, request or other communication issued pursuant to this Agreement shall be when: (i) delivered to the address of the Party personally, by messenger, by a nationally or internationally recognized overnight delivery service or otherwise; or (ii) received or rejected by the Party, if sent by certified mail, return receipt requested, in each case, addressed to the Party at its address and marked to the attention of the person designated above (or to such other address or person as a Party may designate by notice to the other Party effective as of the date of receipt by the other Party). 19.2 Parties Bound. This Agreement shall be binding upon each of the Parties and their respective successors and permitted assigns. 53 19.3 Amendments. (a) Except as otherwise provided in Section 19.3(c), this Agreement may not be amended, supplemented or otherwise modified, other than pursuant to an instrument in writing executed by the Parties. (b) Absent agreement of both Parties to the proposed change and except as otherwise provided in Section 19.3(c), the standard of review for changes to this Agreement proposed by a Party, or FERC acting sua sponte, shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956); provided that the standard of review for any modification to this Agreement requested by non-contracting third parties shall be the most stringent standard permissible under then-applicable Governmental Requirements. (c) Nothing contained in this Agreement shall be construed as affecting in any way the right of either Party to unilaterally make application to FERC under Section 205 or Section 206 of the Federal Power Act for a change in the charges set forth in this Agreement. It is the intent of the Parties that the standard of review that FERC will apply to any such unilateral application shall be the just and reasonable standard of review rather than the “public interest” standard of review. (d) An amendment that is subject to FERC approval shall not take effect until FERC has accepted such amendment for filing and has made it effective. 19.4 Waivers. No waiver by any Party of any one or more breaches or defaults by the other Party in the performance of any of the provisions of this Agreement shall be construed as a waiver of any other breaches or defaults whether of a like kind or different nature. Any delay, less than any applicable statutory period of limitations, in asserting or enforcing any rights under this Agreement shall not be deemed a waiver of such rights. Failure of any Party to enforce any provisions hereof shall not be construed to waive such provision, or to affect the validity of this Agreement or any part thereof, or the right of the other Party thereafter to enforce each and every provision thereof. 19.5 Choice of Law. (a) This Agreement, the rights and obligations of the Parties under this Agreement, and any claim or controversy arising out of this Agreement (whether based on contract, tort, or any other theory), including all matters of construction, validity, effect, performance and remedies with respect to this Agreement, shall be governed by and interpreted, construed, and determined in accordance with, the laws of the State of Idaho (regardless of the laws that might otherwise govern under applicable principles of conflicts of law). (b) TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHER WAIVES ANY 54 RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. 19.6 Headings. Article and Section headings used in this Agreement (including headings used in any Exhibits or Schedules attached hereto) are for convenience of reference only and shall not affect the construction of this Agreement. 19.7 Relationship of Parties. The covenants, obligations, and liabilities of the Owners are intended to be several and not joint or collective, and nothing herein contained shall be construed to create an association, joint venture, trust or partnership, or to impose a trust or partnership covenant, obligation or liability on or with regard to any of the Owners. Each Owner shall be individually responsible for its own covenants, obligations and liability as herein provided. No Owner shall be under the control of, or shall be deemed to control, the other Owner. Neither Owner shall have the right or power to bind the other Owner without its express written consent. 19.8 Severability. In the event that any provision of this Agreement or the application thereof becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the Parties. The Parties further agree to replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such illegal, void or unenforceable provision. 19.9 No Third Party Beneficiaries. Nothing expressed or implied in this Agreement is intended to nor shall be construed to confer upon or give to any Person (other than the Parties) any rights or remedies under or by reason of this Agreement or any transaction contemplated herein. 19.10 Further Assurances. Each Party agrees to execute and deliver from time to time such additional documents, and take such additional actions, as may be reasonably required by the other Party to give effect to the purposes and intent hereof. 19.11 Conflict of Interest. Nothing in this Agreement shall prohibit any Party from engaging in or possessing any interest in other projects or business ventures of any nature and description, independently or with others. 55 19.12 Exhibits and Schedules. The Exhibits and Schedules to this Agreement are identified as follows, and are incorporated herein by this reference: Exhibit A [Reserved] Exhibit B [Reserved] Exhibit C Ownership Interests; Directional Capacity Allocations; Directional Capacity Allocation Percentages Exhibit D Monthly Transmission Facilities O&M Charge; Monthly O&M Equipment Charge Exhibit E [Reserved] Exhibit F Acquisition Costs Exhibit G Joint Ownership Transmission Loss Calculation and Allocation Methodology Schedule 13.1(f) Idaho Power Governmental Authorizations Schedule 13.2(f) PacifiCorp Governmental Authorizations 19.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be original, and all of which together shall constitute one agreement. Electronic transmission of any signed original document, and retransmission of any signed electronic transmission, shall be the same as delivery of an original. At the request of either Party, the other Party will confirm electronically transmitted signatures by signing an original document. 19.14 Entire Agreement. This Agreement and the Exhibits and Schedules attached hereto, and the other documents between the Parties referenced herein constitute the entire agreement between the Parties and supersede all prior agreements and understandings, whether oral and written, between the Parties with respect to the subject matter hereof. There are no oral understandings, terms or conditions and the Parties have not relied upon any representation or warranty, expressed or implied, not contained in this Agreement. [SIGNATURE PAGE FOLLOWS] 56 IN WITNESS WHEREOF, each of the Parties has caused its duly authorized representative to execute this Joint Ownership and Operating Agreement as of the date first above written. PACIFICORP, AS OWNER AND OPERATOR By: Name: Title: IDAHO POWER COMPANY, AS OWNER AND OPERATOR By: Name: Title: 57 Exhibit A [Exhibit A has been intentionally deleted by the Parties.] EXHIBIT B [Exhibit B has been intentionally deleted by the Parties.] EXHIBIT C1 Ownership Interests; Directional Capacity Allocations; Directional Capacity Allocation Percentages A B C D E F G H I J K L M Transmission Lines Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Jim Bridger West Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Bridger-Goshen 345 kV 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% PAC Bridger-Populus #1 345 kV 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% PAC Bridger-Populus #2 345 kV 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% PAC BRIDGER WEST TOTAL (PAC Operator) 29.2% 70.8% 250.0 950.0 1200.0 800.0 1600.0 2400.0 20.8% 79.2% 33.3% 66.7% PAC Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator West of Populus Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Populus-Kinport 345 kV 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% PAC Populus-Borah #1 345 kV 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% PAC Populus-Borah #2 345 kV 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% PAC 1 An asterisk “*” following the description of an element signals that it is wholly owned by one Party and operated by the other Party. 2 A B C D E F G H I J K L M Transmission Lines Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Goshen-Kinport Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Goshen-Kinport 345 kV 18.3% 81.7% 83.3 872.7 956.0 266.7 689.3 956.0 8.7% 91.3% 27.9% 72.1% PAC Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Jim Bridger 230 kV Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Bridger-Point of Rocks 230 kV (IPC portion) 0.0% 100.0% 0.0 600.0 600.0 0.0 600.0 600.0 0.0% 100.0% 0.0% 100.0% PAC Bridger-Rock Springs 230 kV (IPC Portion) 0.0% 100.0% 0.0 600.0 600.0 0.0 600.0 600.0 0.0% 100.0% 0.0% 100.0% PAC Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Borah West Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Kinport-Midpoint 345 kV 73.2% 26.8% 521.5 0.0 521.5 470.1 363.3 833.4 100.0% 0.0% 56.4% 43.6% IPC Borah-Adelaide-Midpoint #1 345 kV 64.4% 35.6% 393.4 0.0 393.4 265.3 363.3 628.6 100.0% 0.0% 42.2% 57.8% IPC Borah-Adelaide-Midpoint #2 345 kV 64.4% 35.6% 393.4 0.0 393.4 265.3 363.3 628.6 100.0% 0.0% 42.2% 57.8% IPC BORAH WEST TOTAL (IPC Operator) 73.8% 26.2% 1600.0 0.0 1600.0 1467.0 1090.0 2557.0 100.0% 0.0% 57.4% 42.6% IPC A B C D E F G H I J K L M Transmission Lines Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) North-to-South MW South-to-North MW North-to-South % South-to-North % Goshen-Big Grassy Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Operator Goshen-Jefferson 161 kV 23.0% 77.0% 108.0 127.0 235.0 0.0 235.0 235.0 46.0% 54.0% 0.0% 100.0% PAC 3 Jefferson-Big Grassy 161 kV 37.8% 62.2% 108.0 35.0 143.0 0.0 143.0 143.0 75.5% 24.5% 0.0% 100.0% PAC Big Grassy-ID/MT state line 161 kV* 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% PAC A B C D E F G H I J K L M Transmission Lines Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Idaho-Northwest Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Hemingway-Summer Lake 500 kV 22.0% 78.0% 450.0 100.0 550.0 0.0 1500.0 1500.0 81.8% 18.2% 0.0% 100.0% IPC/PAC2 Walla Walla-Hurricane 230 kV 40.8% 59.2% 325.0 73.0 398.0 0.0 398.0 398.0 81.7% 18.3% 0.0% 100.0% PAC Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Midpoint-Hemingway Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Midpoint-Hemingway 500 kV 37.0% 63.0% 700.0 800.0 1500. 0 410.0 1090.0 1500.0 46.7% 53.3% 27.3% 72.7% IPC Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Antelope-Goshen Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Antelope-Goshen 161 kV (25 of 45 miles) 21.9% 78.1% 0.0 160.0 160.0 70.0 90.0 160.0 0.0% 100.0% 43.8% 56.3% PAC 2 IPC operates and maintains the line from Hemingway to the Oregon State line, including performing and coordinating the Hemingway-Summer Lake 500 kV line switching. PAC operates and maintains the line from the Oregon State line to Summer Lake and PAC is the Hemingway – Summer Lake 500 kV line (Path 75) operator. 4 A B C D E F G H I J K L M Transmission Lines Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) North-to-South MW South-to-North MW North-to-South % South-to-North % Operator American Falls-Wheelon Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC American Falls-Wheelon 138 kV (30 of 68 miles) 3.6% 96.4% 10.0 128.0 138.0 0.0 138.0 138.0 7.2% 92.8% 0.0% 100.0% PAC Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Antelope-Scoville Transmission IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Antelope-Scoville 138 kV 66.7% 33.3% 173.3 86.7 260.0 173.3 86.7 260.0 66.7 33.3 66.7% 33.3% PAC 5 A B C D E F G H I J K L M Substations Note: The capacity of a Transformer Terminal may be in only one direction. Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Three Mile Knoll 345 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Jim Bridger Terminal (Sh. Reactor) 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% PAC Jim Bridger Terminal (Series Cap) 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% Goshen Terminal 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% Transformer Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% 345 kV Bus Assets (Substation O&M Allocation) 19.4% 80.6% Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Goshen 345 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Three Mile Knoll Terminal 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% PAC Kinport Terminal 18.3% 81.7% 83.3 872.7 956.0 266.7 689.3 956.0 8.7% 91.3% 27.9% 72.1% Transformer Terminal #1 (345/161 kV) 5.6% 94.4% 25.0 423.0 448.0 5.6% 94.4% Transformer Terminal #2 (345/161 kV) 5.6% 94.4% 25.0 423.0 448.0 5.6% 94.4% 345 kV Bus Assets (Substation O&M Allocation) 14.7% 85.3% 6 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Goshen 161 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Transformer Terminal #1 (345/161 kV) 5.6% 94.4% 25.0 423.0 448.0 5.6% 94.4% PAC Transformer Terminal #2 (345/161 kV) 5.6% 94.4% 25.0 423.0 448.0 5.6% 94.4% Transformer Terminal #3 (161/138 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #4 (161/138 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #5 (161/69 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #6 (161/46 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Grace Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Wolverine Creek Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Drummond Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Swan Valley Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Sugarmill Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Rigby Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Antelope Terminal 21.9% 78.1% 0.0 160.0 160.0 70.0 90.0 160.0 0.0% 100.0% 43.8% 56.3% Jefferson Terminal 23.0% 77.0% 108.0 127.0 235.0 0.0 235.0 235.0 46.0% 54.0% 0.0% 100.0% Cinder Butte Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Blackfoot Terminal 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 161 kV Bus Assets (Substation O&M Allocation) 9.8% 90.2% 7 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Burns 500 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Hemingway Terminal (Sh. Reactor) 22.0% 78.0% 450.0 100.0 550.0 0.0 1500.0 1500.0 81.8% 18.2% 0.0% 100.0% PAC Summer Lake Terminal (Sh. Reactor) 22.0% 78.0% 450.0 100.0 550.0 0.0 1500.0 1500.0 81.8% 18.2% 0.0% 100.0% 500 kV Bus Assets (Substation O&M Allocation) 22.0% 78.0% 8 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Summer Lake 500 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Hemingway Terminal 22.0% 78.0% 450.0 100.0 550.0 0.0 1500.0 1500.0 81.8% 18.2% 0.0% 100.0% PAC Malin Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% 500 kV Bus Assets (Substation O&M Allocation) 11.0% 89.0% Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Jefferson 161 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Goshen Terminal 23.0% 77.0% 108.0 127.0 235.0 0.0 235.0 235.0 46.0% 54.0% 0.0% 100.0% PAC Big Grassy Terminal (Phase Shifter) 37.8% 62.2% 108.0 35.0 143.0 0.0 143.0 143.0 75.5% 24.5% 0.0% 100.0% Rigby Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #1 (161/69 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #2 (161/69 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% 161 kV Bus Assets (Substation O&M Allocation) 12.1% 87.9% 9 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Big Grassy 161 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Jefferson Terminal 37.8% 62.2% 108.0 35.0 143.0 0.0 143.0 143.0 75.5% 24.5% 0.0% 100.0% PAC Dillon Terminal 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% Transformer Terminal #1 (161/69 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% 161 kV Bus Assets (Substation O&M Allocation) 45.9% 54.1% 10 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Walla Walla 230 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Hurricane Terminal (Series Cap) 40.8% 59.2% 325.0 73.0 398.0 0.0 398.0 398.0 81.7% 18.3% 0.0% 100.0% PAC Vantage Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Wallula Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Talbot Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #1 (230/69 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #2 (230/69 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% 230 kV Bus Assets (Substation O&M Allocation) 6.8% 93.2% Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Hurricane 230 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Walla Walla Terminal 40.8% 59.2% 325.0 73.0 398.0 0.0 398.0 398.0 81.7% 18.3% 0.0% 100.0% PAC Hells Canyon Terminal 40.8% 59.2% 325.0 73.0 398.0 0.0 398.0 398.0 81.7% 18.3% 0.0% 100.0% Transformer Terminal #1 (230/69 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Hurricane 230 kV Bus Assets (Substation O&M Allocation) 27.2% 72.8% 11 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) North-to-South MW South-to-North MW North-to-South % South-to-North % Operator Antelope 230 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Brady Terminal 12.2% 87.8% 0.0 246.5 246.5 60.0 186.5 246.5 0.0% 100.0% 24.3% 75.7% PAC Lost River Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Anaconda Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #1 (230/161 kV) 26.8% 73.2% 60.0 164.0 224.0 26.8% 73.2% 230 kV Bus Assets (Substation O&M Allocation) 9.7% 90.3% Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Antelope 161 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Goshen Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% PAC Transformer Terminal (230/161 kV) 26.8% 73.2% 60.0 164.0 224.0 26.8% 73.2% Transformer Terminal #1 (161/138 kV) 66.7% 33.3% 68.5 34.2 102.7 66.7% 33.3% Transformer Terminal #2 (161/138 kV) 66.7% 33.3% 61.1 30.6 91.7 66.7% 33.3% 161 kV Bus Assets (Substation O&M Allocation) 40.0% 60.0% Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Antelope 138 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Scoville Terminal #1 66.7% 33.3% 86.7 43.3 130.0 66.7% 33.3% PAC Scoville Terminal #2 66.7% 33.3% 86.7 43.3 130.0 66.7% 33.3% Transformer Terminal #1 (161/138 kV) 66.7% 33.3% 68.5 34.2 102.7 66.7% 33.3% Transformer Terminal #2 (161/138 kV) 66.7% 33.3% 61.1 30.6 91.7 66.7% 33.3% 138 kV Bus Assets (Substation O&M Allocation) 66.7% 33.3% 12 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Populus 345 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Bridger #1 Terminal (Series Cap & Sh. Reactor) 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% PAC Bridger #2 Terminal (Series Cap & Sh. Reactor) 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% Kinport Terminal 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% Borah #1 Terminal 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% Borah #2 Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Ben Lomond #1 Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Ben Lomond #2 Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Terminal Terminal 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% 345 kV Bus Assets (Substation O&M Allocation) 14.6% 85.4% 13 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Bridger 345 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Three Mile Knoll Terminal (Sh. Reactor) 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% PAC Populus #1 Terminal (Sh. Reactor) 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% Populus #2 Terminal (Sh. Reactor) 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% Transformer Terminal #1 (345/230 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #2 (345/230 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #3 (345/230 kV) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Transformer Terminal #4 (345/22 kV) (GSU) 33.3% 66.7% 33.3% 66.7% 33.3% 66.7% Transformer Terminal #5 (345/22 kV) (GSU) 33.3% 66.7% 33.3% 66.7% 33.3% 66.7% Transformer Terminal #6 (345/22 kV) (GSU) 33.3% 66.7% 33.3% 66.7% 33.3% 66.7% Transformer Terminal #7 (345/22 kV) (GSU) 33.3% 66.7% 33.3% 66.7% 33.3% 66.7% 345 kV Bus Assets (Substation O&M Allocation) 22.1% 77.9% Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Bridger 230 kV Assets IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC IPC Owned 230 kV Substation Assets (Substation O&M Allocation) 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% PAC 14 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Kinport 345 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Goshen Terminal (Sh. Reactor) 18.3% 81.7% 83.3 872.7 956.0 266.7 689.3 956.0 8.7% 91.3% 27.9% 72.1% IPC Populus Terminal (Series Cap, Sh. Reactor) 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% Midpoint Terminal 73.2% 26.8% 521.5 0.0 521.5 470.1 363.3 833.4 100.0% 0.0% 56.4% 43.6% Transformer Terminal (345/230 kV) 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 345 kV Bus Assets (Substation O&M Allocation) 55.2% 44.8% Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Borah 345 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Populus #1 Terminal (Series Cap & Sh. Reactor) 29.2% 70.8% 83.3 316.7 400.0 266.7 533.3 800.0 20.8% 79.2% 33.3% 66.7% IPC Populus #2 Terminal (Series Cap & Sh. Reactor)* 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Midpoint #1 Terminal 64.4% 35.6% 393.4 0.0 393.4 265.3 363.3 628.6 100.0% 0.0% 42.2% 57.8% Midpoint #2 Terminal 64.4% 35.6% 393.4 0.0 393.4 265.3 363.3 628.6 100.0% 0.0% 42.2% 57.8% Transformer Terminal (345/230 kV) 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 345 kV Bus Assets (Substation O&M Allocation) 51.6% 48.4% 15 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Adelaide 345 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Borah/Midpoint #1 Terminal 64.4% 35.6% 393.4 0.0 393.4 265.3 363.3 628.6 100.0% 0.0% 42.2% 57.8% IPC Borah #2 Terminal 64.4% 35.6% 393.4 0.0 393.4 265.3 363.3 628.6 100.0% 0.0% 42.2% 57.8% Midpoint #2 Terminal 64.4% 35.6% 393.4 0.0 393.4 265.3 363.3 628.6 100.0% 0.0% 42.2% 57.8% Transformer Terminal #1 (345/138 kV) 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% Transformer Terminal #2 (345/138 kV) 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 345 kV Bus Assets (Substation O&M Allocation) 78.7% 21.3% 16 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Midpoint 345 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Kinport Terminal (Sh. Reactor) 73.2% 26.8% 521.5 0.0 521.5 470.1 363.3 833.4 100.0% 0.0% 56.4% 43.6% IPC Borah #1 Terminal (Sh. Reactor) 64.4% 35.6% 393.4 0.0 393.4 265.3 363.3 628.6 100.0% 0.0% 42.2% 57.8% Borah #2 Terminal (Sh. Reactor) 64.4% 35.6% 393.4 0.0 393.4 265.3 363.3 628.6 100.0% 0.0% 42.2% 57.8% Humboldt Terminal (Sh. Reactor) 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 500 kV Tie Terminal 63.7% 36.3% 1500.0 0.0 1500.0 410.0 1090.0 1500.0 100.0% 0.0% 27.3% 72.7% Transformer Terminal #1 (345/230 kV) 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% Transformer Terminal #2 (345/230 kV) 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 345 kV Bus Assets (Substation O&M Allocation) 80.8% 19.2% Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW W-E MW E-W MW Operator Midpoint 500 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Hemingway Terminal (Series Cap & Sh. Reactor) 63.7% 36.3% 1500.0 0.0 1500.0 410.0 1090.0 1500.0 100.0% 0.0% 27.3% 72.7% IPC Transformer Terminal (500/345 kV) 63.7% 36.3% 1500.0 0.0 1500.0 410.0 1090.0 1500.0 100.0% 0.0% 27.3% 72.7% 500 kV Bus Assets (Substation O&M Allocation) 63.7% 36.3% 17 A B C D E F G H I J K L M Substations Segment Ownership Interests Directional Capacity Allocation (MW) Directional Capacity Allocation (%) West-to-East MW East-to-West MW West-to-East % East-to-West % Operator Hemingway 500 kV Substation IPC % PAC % IPC PAC TOTAL IPC PAC TOTAL IPC PAC IPC PAC Midpoint Terminal 37.0% 63.0% 700.0 800.0 1500.0 410.0 1090.0 1500.0 46.7% 53.3% 27.3% 72.7% IPC Summer Lake Terminal (Sh. Reactor) 22.0% 78.0% 450.0 100.0 550.0 0.0 1500.0 1500.0 81.8% 18.2% 0.0% 100.0% Transformer Terminal (500/230 kV) 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 500 kV Bus Assets (Substation O&M Allocation) 53.0% 47.0% EXHIBIT D Monthly Transmission Facilities O&M Charge; Monthly Substation O&M Charge; Monthly Common Equipment Charge 1. Interpretation; Cooperation. (a) Capitalized terms not defined in this Exhibit D are defined in Article I of this Agreement. (b) The Parties shall cooperate as necessary to update this Exhibit D in the event that FERC formula rate filing references change over time. 2. Monthly Transmission Facilities O&M Charge. (a) The Monthly Transmission Facilities O&M Charge for each Transmission Segment each month during the Term shall be equal to: (i) the product of: (A) the Acquisition Cost of the Transmission Segment as of such month; and (B) the O&M Expense Factor as of such month; divided by (ii) twelve (12). (b) Beginning the first month after the Effective Date and each month thereafter throughout the Term, pursuant to Section 4.7 of this Agreement, each Operator shall invoice the Non-Operating Owner for its Pro Rata Share (based on its Ownership Interest in the Transmission Segment) of the Monthly Transmission Facilities O&M Charge with respect to each Transmission Segment for which it is responsible. The invoice shall show the total Monthly Transmission Facilities O&M Charge with respect to each Transmission Segment for which it is responsible as well as each Owner’s Pro Rata Share (based on its respective Ownership Interest in the Transmission Segment). 3. Monthly Substation O&M Charge. (a) The Monthly Substation O&M Charge for each Substation each month during the Term shall be calculated as follows: (i) If the description of any Substation Segment in such Substation on Exhibit C indicates that any Substation Segment contains Line Terminal Equipment, then the Monthly Substation O&M Charge for such Substation shall be calculated as the sum of the following: (A) For each Substation Segment in the Substation, the portion of the Monthly Substation O&M Charge for the Line Terminal Equipment in each such Substation Segment shall be equal to: (1) the product of: (x) the Acquisition Cost of the Line 2 Terminal Equipment in each such Substation Segment as of such month; and (y) the O&M Expense Factor as of such month; divided by (2) twelve (12); and (B) The portion of the Monthly Substation O&M Charge for the Substation Bus Equipment in the Substation shall be equal to: (1) the product of: (x) the Acquisition Cost of the Substation Bus Equipment of such Substation as of such month; and (y) the O&M Expense Factor as of such month; divided by (2) twelve (12).. (ii) If the description of the Substation Segments in the Substation on Exhibit C does not indicate that any of the Substation Segments contain Line Terminal Equipment, then the Monthly Substation O&M Charge for such Substation shall be equal to: (A) the product of: (1) the Acquisition Cost of the Substation Bus Equipment of such Substation as of such month; and (2) the O&M Expense Factor as of such month; divided by (B) twelve (12). (b) Beginning the first month after the Effective Date and each month thereafter throughout the Term, pursuant to Section 4.7 of this Agreement, each Operator shall invoice the Non-Operating Owner for its Pro Rata Share of the Monthly Substation O&M Charge with respect to each Substation it is responsible for as follows. (i) For any Monthly Substation O&M Charge calculated pursuant to Section 3(a)(i), the Non-Operating Owner’s Pro Rata Share of the Monthly O&M Substation Charge shall equal the sum of: (A) For each portion of the Monthly Substation O&M Charge calculated pursuant to Section 3(a)(i)(A), with respect to each Substation Segment, the Non-Operating Owner’s Pro Rata Share shall be based on its Ownership Interest in each Substation Segment in such Substation; and. (B) For the portion of the Monthly Substation O&M Charge calculated pursuant to Section 3(a)(i)(B), the Non-Operating Owner’s Pro Rata Share shall be based on the applicable Substation O&M Allocation. (ii) For any Monthly Substation O&M Charge calculated pursuant to Section 3(a)(ii), the Non-Operating Owner’s Pro Rata Share shall be based on the applicable Substation O&M Allocation. 4. Monthly Common Equipment Charge. (a) The Monthly Common Equipment Charge for the Common Equipment at each Substation each month during the Term shall be equal to: (i) the sum of the Return on Capital, the Recovery of Capital, the State and Federal Income Taxes, the Local Property Taxes 3 and the Transmission O&M Expense, in each case, with respect to the Common Equipment; divided by (ii) twelve (12). (b) Beginning the first month following the Effective Date and each month thereafter throughout the Term, pursuant to Section 4.7 of this Agreement, each Operator shall invoice the Non-Operating Owner for its Pro Rata Share (based on its Common Equipment Allocation Factor in the Substation) of the Monthly Common Equipment Charge with respect to each Substation for which it is responsible. The invoice shall show the total Monthly Common Equipment Charge with respect to each Substation for which it is responsible as well as each Owner’s Pro Rata Share (based on its respective Common Equipment Allocation Factor in the Substation). 5. Annual Adjustment. The following terms shall be adjusted each June (in the case of PacifiCorp) and each October (in the case of Idaho Power) following the Effective Date by the Operator responsible for the Transmission Segment, the Substation Segment or the Common Equipment, as appropriate, as follows (collectively, the “Annual Adjustment”): (a) the Acquisition Cost of the Common Equipment, the Acquisition Cost of the Line Terminal Equipment, the Acquisition Cost of the Substation Bus Equipment, the Acquisition Cost of the Substation Segment, the Acquisition Cost of the Transmission Segment, and Net Book Value, all of which shall: (i) exclude any costs included in CWIP; (ii) not be reduced for accumulated depreciation (except for Net Book Value); and (iii) be adjusted as follows: (1) Increased to reflect the cost of capital upgrades to such Transmission Segment, Substation Segment or Common Equipment placed in service during the months since the Effective Date or the last date of the immediate, prior annual adjustment; and (2) Decreased to reflect the cost of equipment comprising such Transmission Segment, Substation Segment or Common Equipment which has been retired (and no longer placed in service) during the months since the Effective Date or the date of the immediate, prior annual adjustment. (b) The following factors from each Party’s annual rate filing: (i) Return on Capital; (ii) Recovery of Capital; (iii) State and Federal Income Taxes; (iv) Local Property Taxes; (v) Accumulated Deferred Income Taxes: (1) Account 190; (2) Account 281; 4 (3) Account 282; (4) Account 283; (vi) Transmission Net Property, Plant & Equipment; and (vii) Transmission Plant in Service. Each of the Annual Adjustments shall be reasonably determined by the Operator responsible for such Transmission Segment, Substation Segment or Common Equipment. 6. Definitions. “Accumulated Deferred Income Taxes” means: (A) In respect of the Common Equipment at each Substation owned by Idaho Power, an amount equal to the sum of Sections (A)(1) and (A)(2) below: (1) Account 282 based on the product of: (a) Transmission-related Account 282 is the product of: (i) Total Account 282 (Idaho Power Rate Filing – Schedule 1, Line 4); and (ii) the sum of (1) Transmission Plant Allocator (Idaho Power Rate Filing – Schedule 1, Line 8) and (2) General & Intangible Plant Allocator (Idaho Power Rate Filing – Schedule 1, Line 47); and (b) The quotient of: (i) Net Book Value of the Common Equipment; and (ii) Transmission Rate Base (Idaho Power Rate Filing – Rate Calculation, Line 20). (2) Accounts 281, 283 and 190 based on the product of: (a) Transmission related Accounts 281, 283 and 190 is the product of: (i) Total Accounts 281, 283 and 190 (Idaho Power Rate Filing – Schedule 1, Lines 3, 5 and 6); and (ii) The sum of (1) Transmission Plant Allocator (Idaho Power Rate Filing – Schedule 1, Line 8) and (2) General & Intangible Plant Allocator (Idaho Power Rate Filing – Schedule 1, Line 47); and 5 (b) The quotient of: (i) The Acquisition Cost of the Common Equipment, and (ii) Acquisition Value of Transmission Plant, Property and Equipment (Idaho Power Rate Filing – Rate Calculation, the sum of Lines 1 through 8). (B) In respect of the Common Equipment at each Substation owned by PacifiCorp, an amount equal to the sum of Sections (B)(1) and (B)(2) below: (1) Account 282 based on the product of: (a) Transmission-related Account 282 is the product of: (i) Account 282 (PacifiCorp Rate Filing, Attachment 1A, Line 1); and (ii) The Allocator (PacifiCorp Rate Filing, Attachment 1A, Line 6); and (b) The quotient of: (aa) The Net Book Value of the Common Equipment; and (bb) Total Net Property, Plant & Equipment (PacifiCorp Rate Filing, Line 32). (2) Accounts 281, 283 and 190 based on the product of: (a) Transmission-related Accounts 281, 283 and 190 is the product of: (i) The sum of Accounts 281, 283 and 190 (PacifiCorp Rate Filing, Attachment 1A, Lines 2, 3 and 4); and (ii) The Allocator (PacifiCorp Rate Filing, Attachment 1A, Line 6); and (b) The quotient of: (aa) the Acquisition Cost of the Common Equipment; and (bb) Total Plant in Rate Base (PacifiCorp Rate Filing, Line 24). “Acquisition Cost of the Line Terminal Equipment” means, in respect of a Substation Segment, the cost of the Line Terminal Equipment in the Substation Segment as initially determined on the Effective Date and set forth on Exhibit F, as the same may be adjusted from time to time by the Annual Adjustment. 6 “Acquisition Cost of the Substation Bus Equipment” means, in respect of a Substation, the cost of the Substation Bus Equipment in the Substation as initially determined on the Effective Date and set forth on Exhibit F, as the same may be adjusted from time to time by the Annual Adjustment. “Acquisition Cost of the Substation Segment” means, in respect of a Substation, the cost of the Substation Segment as initially determined on the Effective Date and set forth on Exhibit F, as the same may be adjusted from time to time by the Annual Adjustment. “Acquisition Cost of the Transmission Segment” means, in respect of each Transmission Segment, the cost of the Transmission Segment as initially determined on the Effective Date and set forth on Exhibit F, as the same may be adjusted from time to time by the Annual Adjustment; provided, however, that (i) in the case of the Antelope-Goshen Transmission Segment, the Acquisition Cost of the Transmission Segment shall be reduced by 44.44% to account for the fact that only approximately 25 miles of the approximately 45-mile Antelope-Goshen Transmission Segment is jointly-owned Transmission Facilities and (ii) in the case of the American Fall – Malad Transmission Segment, the Acquisition Cost of the Transmission Segment shall be reduced by 57.28% to account for the fact that only approximately 29 miles of the approximately 68-mile American Fall – Malad Transmission Segment is jointly-owned Transmission Facilities. “Acquisition Cost of the Common Equipment” means, in respect of Common Equipment in a Substation, the cost to the Owner of such Common Equipment as initially determined on the Effective Date and set forth on Exhibit F, as the same may be adjusted from time to time by the Annual Adjustment. “Annual Adjustment” is defined in Section 5 of this Exhibit D. “Common Equipment Allocation Factor” means, in respect of each Substation and each Owner, a percentage equal to the quotient of (a) such Owner’s total Acquisition Value (as noted in Exhibit F) for such Substation and (b) both Owners’ total Acquisition Value (as noted in Exhibit F) for such Substation, in each case, as may be modified from time to time, by the Annual Adjustment. “CWIP” means Construction Work in Progress. “Idaho Power Rate Filing – Rate Calculation” means the rate calculation tab of Idaho Power’s current year annual FERC formula rate filing. “Idaho Power Rate Filing – Schedule 1” means the schedule 1 tab of Idaho Power’s current year annual FERC formula rate filing. 7 “Line Terminal Equipment” means all series capacitors, shunt reactors and phase shifters and all other equipment that the Parties mutually agree is “Line Terminal Equipment.” All Line Terminal Equipment which is part of a Substation Segment on the Effective Date, sorted by Substation Segment, is identified on Exhibit F. “Local Property Taxes” means, in respect of the Common Equipment at each Substation, an amount equal to the product of: (A) The Acquisition Cost of the Common Equipment; and (B) The Property Tax Rate for the State of Idaho. “Net Book Value” means, in respect of the Common Equipment at each Substation, an amount equal to: (A) The Acquisition Cost of the Common Equipment; (B) Less, the Accumulated Depreciation. “O&M Expense Factor” means, in respect of each Operator, an amount equal to the quotient of: (A) The Total Transmission O&M Expense of the Operator; and (B) The Transmission Plant in Service of the Operator. “PacifiCorp Rate Filing” means PacifiCorp’s current year formula rate true-up. “Rate Base” means, in respect of the Common Equipment at each Substation, an amount equal to: (A) The Net Book Value; (B) Less, the Accumulated Deferred Income Taxes. “Recovery of Capital” means, in respect of the Common Equipment at each Substation, an amount equal to the product of: (A) The Acquisition Cost of the Common Equipment; and (B) The FERC approved depreciation rate for Account 353 Transmission Plant Substation Equipment. “Return on Capital” means: 8 (A) In respect of the Common Equipment at each Substation owned by Idaho Power, an amount equal to the product of: (1) The Rate Base; and (2) The Rate of Return (Idaho Power annual FERC Formula Rate Filing, Rate Calculation, Line 23). (B) In respect of the Common Equipment at each Substation owned by PacifiCorp, an amount equal to the product of: (1) the Rate Base; and (2) the Rate of Return (PacifiCorp annual True-Up Rate Filing, Schedule 1, Line 126). “State and Federal Income Taxes” means: (A) In respect of the Common Equipment at each Substation owned by Idaho Power, an amount equal to the product of: (1) the Rate Base; and (2) the Composite Income Tax (Federal and State) (Idaho Power annual FERC Formula Rate Filing, Rate Calculation, Line 24). (B) In respect of the Common Equipment at each Substation owned by PacifiCorp, an amount equal to the product of: (1) the Rate Base; and (2) the Composite Income Tax (Federal and State) Factor, which shall be equal to the product of: (a) the weighted cost of preferred and common (PacifiCorp annual True-Up Rate Filing, Schedule 1, Lines 124 and 125); and (b) the income tax factor (PacifiCorp annual True-Up Rate Filing, Schedule 1, Line 132). “Substation Bus Equipment” means all equipment necessary to support the operation of the substation bus, including foundations, lally columns, bus conductor, fittings, circuit breakers, air break switches, shunt capacitor banks, potential transformers, current transformers, ground switches and enclosures attached to or associated with the bus. All Substation Bus Equipment 9 which is part of a Substation Segment on the Effective Date, sorted by Substation Segment, is identified on Exhibit F. “Substation O&M Allocation” means, with respect to each Substation, the “Substation O&M Allocation” set forth in Exhibit C, as the same may be amended from time to time pursuant to Section 3.3(b) of this Agreement. “Substation Segments” means, with respect to a Substation, the Substation Segments which are listed on specific rows under the Substation on Exhibit C. “Total Transmission O&M Expense” means: (A) In respect of Idaho Power, the amount calculated as follows based on items identified in Idaho Power’s annual FERC Formula Rate Filing: (1) the Transmission O&M Expense (Idaho Power annual FERC Formula Rate Filing, Rate Calculation, Line 33); (2) less, Account 561 (Load Dispatching) (Idaho Power annual FERC Formula Rate Filing, Rate Calculation, Line 34); (3) less, Account 565 (Transmission of Electricity By Others) (Idaho Power annual FERC Formula Rate Filing, Rate Calculation, Line 35); and (4) plus, O&M Expense: A&G (Idaho Power annual FERC Formula Rate Filing, Rate Calculation, Line 36). A sample calculation of Idaho Power’s Total Transmission O&M Expense based on Idaho Power’s 2013 FERC Formula Rate Filing is attached hereto as Attachment 1 for information purposes only. (B) In respect of PacifiCorp, the amount calculated as follows based on items identified in PacifiCorp’s annual FERC Formula True-Up Rate Filing: (1) the Transmission O&M Expense (PacifiCorp annual True-Up Rate Filing, Schedule 1, Line 53); (2) less, Cost of Providing Ancillary Services Accounts 561.0-5 (PacifiCorp annual True-Up Rate Filing, Schedule 1, Line 54); (3) less, Account 565 (PacifiCorp annual True-Up Rate Filing, Schedule 1, Line 55); 10 (4) plus, A&G Expense Allocated to Transmission (PacifiCorp annual True- Up Rate Filing, Schedule 1, Line 66); (5) plus, Accounts 928 and 930.1 - Transmission Related (PacifiCorp annual True-Up Rate Filing, Schedule 1, Line 69); and (6) plus, A&G Directly Assigned to Transmission (PacifiCorp annual True- Up Rate Filing, Schedule 1, Line 74). A sample calculation of PacifiCorp’s Total Transmission O&M Expense based on PacifiCorp’s 2013 FERC True-Up Rate Filing is attached hereto as Attachment 2 for information purposes only. “Transmission O&M Expense” means, in respect of the Common Equipment at each Substation, an amount equal to the product of: (A) the Acquisition Cost of the Common Equipment; and (B) the O&M Expense Factor. “Transmission Plant in Service” means: (A) in respect of Idaho Power, the amount calculated as follows based on items identified in Idaho Power’s annual FERC Formula Rate Filing: (1) the Transmission Plant in Service (Idaho Power Rate Filing – Rate Calculation, Line 1); (2) less, Generator Step-Up Facilities (Idaho Power Rate Filing – Rate Calculation Line 2); and (3) less, Large Generator Interconnects (Idaho Power Rate Filing – Rate Calculation, Line 3). (B) in respect of PacifiCorp, the amount calculated as follows based on items identified in PacifiCorp’s annual FERC Formula True-Up Rate Filing: (1) the Average Transmission Plant in Service (PacifiCorp Rate Filing, Line 15). EXHIBIT E [Exhibit E has been intentionally deleted by the Parties.] EXHIBIT F Acquisition Costs Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Segment Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Adelaide 345 kV Bus $2,548,016 $401,351 $2,949,367 78.67% 21.33% $2,320,267 $629,100 $2,212,221 $74,200 $2,286,421 $1,787,461 $95,195 $1,882,656 2 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Antelope 230 kV Bus $1,412,927 $106,065 $1,518,992 9.74% 90.26% $147,950 $1,371,042 Antelope 161 kV Bus $705,801 ($20,595) $685,207 40.03% 59.97% $274,288 $410,919 Antelope 138 kV Bus $62,555 ($2,640) $59,915 66.67% 33.33% $39,945 $19,970 Antelope 230/161 kV transformer $407,275 $0 $407,275 26.79% 73.21% $109,109 $298,166 Antelope 161/138 kV transformer $0 $0 $0 66.67% 33.33% $0 $0 Antelope Substation Totals $2,588,558 $82,831 $2,671,389 $571,292 $2,100,097 $1,762,855 ($17,310) $1,745,546 $1,285,625 ($7,772) $1,277,853 Joint Owned: Original Value from the US Department of Energy Common Equipment: Acquisition Value Net Book Value Substation (2019 Antelope Substation acquired DOE assets) Total Joint Owned @ 8/22/2019 DOE Original Value IPC % PAC % IPC Share – DOE Original Value PAC Share – DOE Original Value Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Antelope B103 $0 $133,979 66.67% 33.33% $89,319 $44,660 Antelope B164 $0 $93,979 40.03% 59.97% $37,592 $56,387 Antelope B162A $0 $51,346 40.03% 59.97% $20,538 $30,808 Antelope B165A $0 $51,346 40.03% 59.97% $20,538 $30,808 Antelope 161/138 $0 $158,794 66.67% 33.33% $105,863 $52,931 Antelope 161/138 $0 $570,478 66.67% 33.33% $380,319 $190,159 3 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Big Grassy (Sandune) $2,666,393 $0 $2,666,393 45.92% 54.08% $1,224,408 $1,441,985 $1,843,249 $495,279 $2,338,528 $1,468,249 $502,479 $1,970,728 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Borah 345 kV Bus $3,767,619 $0 $3,767,619 51.61% 48.39% $1,944,468 $1,823,151 Borah-Populus #1 Line Terminal $2,837,119 $0 $2,837,119 29.17% 70.83% $827,588 $2,009,532 Borah-Populus #2 Line Terminal $51,146 $10,354,396 $10,405,543 0.00% 100.0% $0 $10,405,543 Borah Substation Totals $6,655,884 $10,354,396 $17,010,281 $2,772,056 $14,238,225 $3,889,599 $759,728 $4,649,327 $2,880,791 $746,582 $3,627,373 4 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership3 PAC Ownership Total Common Equipment @ 10/30/20154 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Bridger Bus Equipment $10,262,428 $1,071,589 $11,334,017 22.08% 77.92% $2,502,551 $8,831,466 Bridger Line Equipment $1,376,761 $778,691 $2,155,452 29.17% 70.83% $628,745 $1,526,706 Bridger GSU Equipment $0 $18,062,107 $18,062,107 33.33% 66.67% $6,020,100 $12,042,007 Legacy Agreement Equipment $34,361,553 ($18,062,107) $16,299,446 22.08% 77.92% $3,598,918 $12,700,528 Bridger Substation Totals $46,000,742 $1,850,280 $47,851,022 $12,750,314 $35,100,707 $2,691,542 $11,068 $2,702,610 $2,247,378 $10,979 $2,258,357 3This is jointly owned equipment typically classified as Common Equipment. Idaho Power owns part of this equipment as part of previous Legacy Agreements. The Monthly Common Equipment Charge will not apply to this equipment. The Monthly Transmission Facilities O&M Charge will apply to these facilities base on Idaho Power’s Bridger 345 kV Ownership Interest. 4 Excludes the majority of the Jim Bridger substation common equipment which are jointly owned by Idaho Power as part of previous Legacy Agreements (as defined in the JPSA). The common equipment associated with the Jim Bridger substation in this Exhibit is 345 kV substation common equipment which Idaho Power did not participate in the construction of in the previous Legacy Agreements. Going forward, Idaho Power will continue to jointly own, and participate in the construction of, new common equipment associated with the Jim Bridger 345 kV bus. Idaho Power will participate at Idaho Power’s 345 kV bus Ownership Interest. 5 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Burns Reactor Station 500 kV $3,081,430 $0 $3,081,430 21.95% 78.05% $676,374 $2,405,056 Burns Line Equipment 500 kV $12,753,714 $0 $12,753,714 21.95% 78.05% $2,799,440 $9,954,274 Burns Substation Totals $15,835,144 $0 $15,835,144 $3,475,814 $12,359,330 $2,888,337 $0 $2,888,337 $2,232,180 $0 $2,232,180 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Goshen 345 kV Bus $8,829,849 $448,925 $9,278,774 14.66% 85.34% $1,360,268 $7,918,505 Goshen 161 kV Bus $5,076,709 $1,259,225 $6,335,935 9.75% 90.25% $617,754 $5,718,181 Goshen 345/161 kV Transformers $1,157,946 ($55,378) $1,102,568 5.58% 94.42% $61,523 $1,041,044 Goshen Totals $15,064,504 $1,652,772 $16,717,276 $2,039,545 $14,677,731 $10,275,265 $414,040 $10,689,305 $8,319,550 $442,68 5 $8,762,236 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Hemingway 500 kV Bus $15,705,196 $0 $15,705,196 52.98% 47.02% $8,320,613 $7,384,583 Hemingway-Summer Lake 500 kV Line Terminal $4,416,277 $0 $4,416,277 21.95% 78.05% $969,373 $3,446,904 Hemingway Substation Totals $20,121,472 $0 $20,121,472 $9,289,985 $10,831,487 $17,898,436 $88,099 $17,986,535 $16,622,676 $91,206 $16,713,882 6 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/201 5 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownershi p PAC Ownershi p Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipmen t @ 10/30/201 5 Change in Value Total Revised Common Hurricane Substation $277,183 $0 $277,183 27.22% 72.78% $75,449 $201,733 $195,477 ($932) $194,545 $143,533 ($902) $142,630 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Jefferson 161 kV Bus $616,144 $0 $616,144 12.15% 87.85% $74,861 $541,283 Jefferson- Big Grassy 161 kV Line Terminal $651,426 $0 $651,426 37.76% 62.24% $245,978 $405,448 Jefferson Substation Totals $1,267,570 $0 $1,267,570 $320,840 $946,730 $852,837 $10,739 $863,575 $386,762 $197,133 $583,895 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Kinport 345 kV Bus $13,712,610 $0 $13,712,610 55.16% 44.84% $7,563,876 $6,148,734 Kinport – Goshen Line Terminal $716,551 $0 $716,551 18.31% 81.69% $131,200 $585,351 Kinport – Populus Line Terminal $2,335,997 $0 $2,335,997 29.17% 70.83% $681,410 $1,654,587 Kinport Substation Totals $16,765,158 $0 $16,765,158 $8,376,486 $8,388,672 $6,172,990 $709,104 $6,882,094 $4,323,296 $694,209 $5,017,505 7 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Midpoint 345 kV Bus $7,104,512 $134,450 $7,239,962 80.82% 19.18% $5,851,337 $1,388,625 Midpoint-Kinport Line Terminal $696,010 $0 $696,010 73.18% 26.82% $509,340 $186,670 Midpoint-Borah #1 Line Terminal $487,527 $0 $487,527 64.45% 35.55% $314,211 $173,316 Midpoint-Borah #2 Line Terminal $732,526 $0 $732,526 64.45% 35.55% $472,113 $260,413 Midpoint 500 kV Substation $18,303,381 $143,353 $18,446,734 63.67% 36.33% $11,745,035 $6,701,698 Midpoint Substation Totals $27,323,956 $278,802 $27,602,758 $18,892,037 $8,710,722 $9,256,970 $2,539,732 $11,796,702 $6,768,777 $2,589,146 $9,357,923 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Populus 345 kV Bus $35,883,325 $0 $35,883,325 14.58% 85.42% $5,231,789 $30,651,536 Populus-Bridger #1 345 kV Line Terminal $9,471,187 $0 $9,471,187 29.17% 70.83% $2,762,745 $6,708,441 Populus-Bridger #2 345 kV Line Terminal $9,471,187 $0 $9,471,187 29.17% 70.83% $2,762,745 $6,708,441 Populus Substation Totals $54,825,698 $0 $54,825,698 $10,757,279 $44,068,419 $43,065,265 $101,747 $43,167,012 $40,070,104 $92,636 $40,162,740 8 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Summer Lake Switchyard (BPA) 500 kV $2,354,638 ($649,777) $1,704,862 10.98% 89.02% $258,539 $1,517,668 $2,178,024 $62,381 $2,240,405 $1,635,503 $62,978 $1,698,482 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Threemile Knoll 345 kV Bus $7,594,378 $1,015 $7,595,393 19.44% 80.56% $1,476,347 $6,118,849 Threemile Knoll $11,407,151 $0 $11,407,151 29.17% 70.83% $3,327,466 $8,079,685 Threemile Knoll $19,001,529 $1,015 $19,002,544 $4,803,813 $14,198,533 $11,364,772 $227 $11,365,000 $10,327,621 $209 $10,327,830 Joint Owned: Acquisition Value Common Equipment: Acquisition Value Net Book Value Substation Total Joint Owned @ 10/30/2015 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Total Common Equipment @ 10/30/2015 Change in Value Total Revised Common Walla Walla 230 kV $1,440,395 ($858) $1,439,537 6.80% 93.20% $98,087 $1,341,579 Walla Walla Line Equipment – Capacitor $1,054,357 $0 $1,054,357 40.83% 59.17% $430,485 $623,872 Walla Walla Substation Totals $2,494,752 ($858) $2,493,894 $528,502 $1,965,451 $3,972,788 $5,171 $3,977,959 $2,983,130 $4,986 $2,988,116 9 Transmission Segment Total Joint Owned @ 10/30/20155 Change in Asset Value Total Revised Joint Owned IPC % PAC % IPC Ownership PAC Ownership American Falls – Wheelon ID 138 kV (30 of 68 miles) (As of 9/2018) $2,713,279 $93,562 $2,806481 3.62% 96.38% $101,608 $2,705,233 Antelope – Scoville 138 kV $96,529 $12,271 $108,800 66.67% 33.33% $72,537 $36,263 Borah - Adelaide - Midpoint #1 345 kV $13,649,368 $172,918 $13,822,286 64.45% 35.55% $8,908,463 $4,913,823 Borah - Adelaide - Midpoint #2 345 kV $15,467,49 $256,902 $15,724,395 64.45% 35.55% $10,134,372 $5,590,022 Goshen – Antelope 161 kV (25 of 45 miles) $3,610,352 $0 $3,610,352 21.88% 78.13% $789,945 $2,820,768 Big Grassy – MT/ID state line 161 kV6 $295,350 $534,282 $829,631 100.0% 0.00% $829,632 $0 Goshen – Jefferson 161 kV (As of 12/2017) $9,290,865 $0 $9,290,865 22.98% 77.02% $2,135,041 $7,155,824 Goshen – Kinport 345 kV $3,125,340 $378,156 $3,503,496 18.31% 81.69% $641,490 $2,862,006 Hemingway – Summer Lake Hemingway – Idaho/Oregon State Line $8,509,821 ($10,499) $8,499,322 21.95% 78.05% $1,865,601 $6,633,721 Idaho/Oregon State Line – Summer Lake $76,930,148 $(94,913) $76,835,235 21.95% 78.05% $16,865,334 $59,969,901 Jefferson – Big Grassy 161 kV $147,675 $359,348 $507,023 37.76% 62.24% $191,452 $315,571 Jim Bridger – Goshen 345 kV $17,314,29 $1,308,763 $18,623,054 29.17% 70.83% $5,432,345 $13,190,709 Jim Bridger – Populus #1 345 kV $25,895,57 $0 $25,895,579 29.17% 70.83% $7,553,740 $18,341,839 Jim Bridger – Populus #2 345 kV $26,114,461 $36,071 $26,150,532 29.17% 70.83% $7,628,110 $18,522,422 Kinport – Midpoint 345 kV $28,437,066 $0 $28,437,066 73.18% 26.82% $20,810,245 $7,626,821 Midpoint – Hemingway 500 kV $46,550,137 $(56,861) $46,493,276 37.00% 63.00% $17,202,512 $29,290,764 Populus – Borah #1 345 kV $6,389,269 $13,992 $6,403,261 29.17% 70.83% $1,867,831 $4,535,430 Populus – Kinport 345 kV $7,116,043 $0 $7,116,043 29.17% 70.83% $2,075,750 $5,040,293 Walla Walla – Hurricane 230 kV $15,229,839 $155,806 $15,385,645 40.83% 59.17% $6,281,959 $9,103,686 5 The values in this chart are as of 10/30/2015, unless otherwise noted. 6 Idaho Power has a 100% Ownership Interest in the Big Grassy – MT/ID state line transmission line. The value in this exhibit is the sum of assets currently owned by both Idaho and PacifiCorp. Idaho Power will acquire the assets associated with this line, currently owned by PacifiCorp, in 2016/2017. The total asset value is provided in Exhibit F for the purposes of the Monthly Transmission Facilities O&M Charge. EXHIBIT G Joint Ownership Transmission Loss Calculation and Allocation Methodology PacifiCorp and Idaho Power agree that as joint Owners of certain Transmission Facilities, defined in this Agreement, the companies shall calculate, allocate and settle the electric losses associated with these Transmission Facilities in accordance with this Exhibit. Collection for Losses: This Exhibit G does not affect PacifiCorp’s and Idaho Power’s respective OATT-based losses methodologies. PacifiCorp and Idaho Power shall continue to collect for electric losses in accordance with their OATTs. Calculation of the Quantity of Losses: The quantity of losses for each jointly-owned transmission line or transformer will be calculated by implementing an I2R calculation based on measurements at one end of each transmission asset using existing metering equipment and assumed series resistance for each asset. The calculations and selection of inputs, such as which line or transformer terminal is metered, which quantities are used (amps or MVA/voltage), and what resistance values for each transmission element are used, will be agreed upon by each Party. In the case of jointly-owned transformers, a constant core loss value agreed upon by each Party shall be included in the calculation. The metering devices used to provide the inputs to the loss calculations may or may not be revenue quality. A metering device calibration process and schedule shall be agreed upon between the Parties. The Party responsible for the calculation of losses for each jointly-owned asset is described in Table 1, below. Calculations are to be developed for all hours each calendar month and results are to be shared with the other Party no later than the 7th working day of the following month. Allocation of Losses: The quantity of electric losses on each jointly-owned transmission line or transformer shall be allocated between each Party consistent with each Party’s asset ownership percentage. Losses for each asset will be calculated for each hour and multiplied by the asset Ownership Interest of each Party. Losses will be totaled on a monthly basis differentiating between on-peak hours and off-peak hours. The Idaho Power portion of losses for all assets located within a PacifiCorp Balancing Area will be summed and owed to PacifiCorp. The PacifiCorp portion of losses for all assets located within the Idaho Power Balancing Area will be summed and owed to Idaho Power. Table 1, below, defines the Balancing Area of each asset, the Party measuring the losses for the asset, and each Party’s Ownership Interest. Return of Losses to PacifiCorp: 2 Other than losses for the Jim Bridger generator main step-up transformers (which are described below), for each calendar month, if the losses owed to PacifiCorp are greater than the losses owed to Idaho Power, Idaho Power will choose to settle either financially or physically. If settled financially, Idaho Power’s will settle financially with PacifiCorp in accordance with PacifiCorp loss return business practice. If settled physically, Idaho Power will return losses to PacifiCorp. Losses to be returned are the amount owed from Idaho Power to PacifiCorp less the amount owed from PacifiCorp to Idaho Power. The loss return period will begin on the 15th of the next month and will continue until the 15th one month later. On-peak losses for the month will be evenly distributed across all on-peak hours in the loss return period and off-peak losses for the month will be evenly distributed across all off-peak hours in the loss return period. Return of Losses to Idaho Power: For each calendar month, if the losses owed to Idaho Power are greater than the losses owed to PacifiCorp, PacifiCorp will settle financially with Idaho Power in accordance with Idaho Power’s loss return business practice. Losses to be settled financially are the amount owed from PacifiCorp to Idaho Power less the amount owed from Idaho Power to PacifiCorp. Table 113 (1) (2) (3) (4) Asset Asset Balancing Area Party Asset Loss Calculation Performed By IPC Loss Allocation (Asset Ownership Interest) PAC Loss Allocation (Asset Ownership Interest) Kinport-Midpoint 345kV Line IPC IPC 73.2% 26.8% Borah-Adelaide Tap (Borah- Adelaide-Midpoint #1 345kV Line) IPC IPC 64.4% 35.6% Adelaide-Adelaide Tap (Borah- Adelaide-Midpoint #1 345kV Line) IPC IPC 64.4% 35.6% Midpoint-Adelaide Tap (Borah- Adelaide-Midpoint #1 345kV Line) IPC IPC 64.4% 35.6% Borah-Adelaide#2 345kV Line IPC IPC 64.4% 35.6% Adelaide-Midpoint#2 345kV Line IPC IPC 64.4% 35.6% Midpoint 500/345kV Transformer IPC IPC 63.7% 36.3% Midpoint-Hemingway 500kV Line IPC_ IPC 37.0% 63.0% Hemingway-Summer Lake 500kV Line PAC PAC 22.0% 78.0% 13 In the event of a conflict between the percentage of asset Ownership Interest set forth in columns (3) and (4) of this table and those set forth in Exhibit C for such asset, the Parties agree that the percentage of asset Ownership Interest set forth in Exhibit C shall control. 3 American Falls-Arbon Valley (American Falls-Malad 138kV Line) PAC IPC 3.6% 96.4% Hurricane-Walla Walla 230kV Line PAC PAC 40.8% 59.2% Goshen 345/161kV Transformer#1 PAC PAC 5.6% 94.4% Goshen 345/161kV Transformer#2 PAC PAC 5.6% 94.4% Goshen-Haven Tap (Goshen- Antelope 161kV Line) PAC PAC 21.9% 78.1% Antelope 230/161kV Transformer PAC PAC 26.8% 73.2% Antelope 161/138kV Transformer#1 PAC PAC 66.7% 33.3% Antelope 161/138kV Transformer#2 PAC PAC 66.7% 33.3% Antelope-Scoville#1 138kV Line PAC PAC 66.7% 33.3% Antelope-Scoville#2 138kV Line PAC PAC 66.7% 33.3% Goshen-Jefferson 161kV Line PAC PAC 23% 77% Jefferson-Big Grassy 161kV Line PAC PAC 37.8% 62.2% Jefferson 161kV Phase Shifting Transformer PAC PAC 37.8% 62.2% Bridger-Three Mile Knoll 345kV Line PAC PAC 29.2% 70.8% Goshen-Three Mile Knoll 345kV Line PAC PAC 29.2% 70.8% Bridger-Populus#1 345kV Line PAC PAC 29.2% 70.8% Bridger-Populus#2 345kV Line PAC PAC 29.2% 70.8% Populus-Borah#1 345kV Line PAC PAC 29.2% 70.8% Populus-Kinport 345kV Line PAC PAC 29.2% 70.8% Goshen-Kinport 345kV Line PAC PAC 18.3% 81.7% Jim Bridger Generator Main Step-up Transformer Losses: Losses on the Jim Bridger generator main step-up transformers shall be allocated each hour between Idaho Power and PacifiCorp based on each Party’s pro rata share of Jim Bridger project net generation for such hour. The calculation of such losses shall be in accordance with the following: 1) Jim Bridger #1 generator main step-up transformer loss = ((Jim Bridger #1 generation)2 x (4.4 x 10-6)) + 0.3 MWh 2) Jim Bridger #2 generator main step-up transformer loss = ((Jim Bridger #2 generation)2 x (4.4 x 10-6)) + 0.3 MWh 3) Jim Bridger #3 generator main step-up transformer loss = 4 ((Jim Bridger #3 generation)2 x (4.4 x 10-6)) + 0.3 MWh 4) Jim Bridger #4 generator main step-up transformer loss = ((Jim Bridger #4 generation)2 x (4.4 x 10-6)) + 0.3 MWh Jim Bridger main step-up transformer loss = Jim Bridger #1 step-up transformer loss + Jim Bridger #2 step-up transformer loss + Jim Bridger #3 step-up transformer loss + Jim Bridger #4 step-up transformer loss. Idaho Power’s share of Jim Bridger main step-up transformer losses shall be physically returned to PacifiCorp. Such losses shall be scheduled to PacifiCorp 168 hours after the hour in which such obligation for losses was incurred. SCHEDULE 13.1(f) Idaho Power Governmental Authorizations 1. Federal Power Act, Section 203 Approval 2. Federal Power Act, Section 205 Approval 3. Approval of the transaction by the Idaho Public Utilities Commission 4. Approval of the transaction by the Oregon Public Utility Commission SCHEDULE 13.2(f) PacifiCorp Governmental Authorizations 1. Federal Power Act, Section 203 Approval 2. Federal Power Act, Section 205 Approval 3. Approval of the transaction by the California Public Utilities Commission 4. Approval of the transaction by the Idaho Public Utilities Commission 5. Approval of the transaction by the Oregon Public Utility Commission 6. Approval of the transaction by the Utah Public Service Commission 7. Approval of the transaction by the Washington Utilities and Transportation Commission 8. Approval of the transaction by the Wyoming Public Service Commission