20031017Joint Petition for Power Purchase Agreement.pdf

THE LAW OFFICE OF
PAINE, HAMBLEN, COFFIN, BROOKE & MILLER LLP
R. Blair Strong
Partner
Ms. Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, ill 83720-0074
717 WEST SPRAGUE AVENUE
SUITE 1200
SPOKANE, WASHINGTON 99201-3505
[phone]
FAX: [phone]
www.painehamblen.com c:.
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August 22, 2003
Re:Potlatch Corporation v. Avista Utilities
IPUC Docket No. A VU-02-
Dear Ms. Jewell:
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Via Fedex
Enclosed please find an original plus seven (7) copies of A vista Corporation and Potlatch
Corporation s Joint Petition in the above-referenced matter.
Please acknowledge receipt by date-stamping the additional copy enclosed and return to me
in the self-addressed stamped envelope.
Should you have any questions regarding this filing, please do not hesitate to call me at
[phone]. Thank you in advance for your assistance.
Enclosurescc: David Meyer (w/encl.)
Conley Ward (w/encl.)
Pamela Mull (w/encl.)
I:\Spodocs\11150\O3086\ltr\OO132887WPD
Very truly yours
PAINE, HAMBLEN, COFFIN
BROOKE & MILLER LLP
R. ;5
k,M- f-~R. Blair Strong
A Limited Liability PartnershiP
Paine Hamblen Spokane. Paine Hamblen Spokane Valley. Paine Hamblen T ri-Cities . Paine Hamblen Coeur d' Alene
David J. Meyer
Senior Vice President and General Counsel
A vista Corporation
1411 East Mission Avenue
O. Box 3727
Spokane, W A 99220
Telephone: [phone]
Facsimile: [phone]
R. Blair Strong
Paine, Hamblen, Coffin
Brooke & Miller LLP
717 West Sprague Ave., Suite 1200
Spokane, W A 99201
Telephone: [phone]
Facsimile: [phone]
For A vista Corporation
Pamela Mull
Associate General Counsel
Potlatch Corporation
601 W. Riverside Ave., Suite 1100
Spokane, W A 99201
Telephone: [phone]
Facsimile: [phone]
Conley E. Ward
Givens Pursley LLP
277 N 6th Street, Suite 200
O. Box 2720
Boise, ill 83701
Telephone: [phone]
Facsimile: [phone]
For Potlatch Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
,"'
IN THE MATTER OF THE JOINT
PETITION OF AVISTA CORPORATION
AND POTLATCH CORPORATION FOR
APPROV AL OF POWER PURCHASE
AND SALE AGREEMENT
CASE No. A VU-02-
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JOINT PETITION c...-,
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Avista Corporation ("A vista ) and Potlatch Corporation ("Potlatch") (Avista and
Potlatch are referred to collectively as the "Parties ) hereby petition the Idaho Public
Utilities Commission ("Commission" or "IPUC") for an order approving the Power
Purchase and Sale Agreement between A vista Corporation and Potlatch Corporation
dated July 22 2003 Purchase and Sale Agreement") which is attached as Exhibit 1. In
support of this Petition, the Parties state as follows:
JOINT PETITION - 1
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Avista is a corporation created and organized under the laws of the State
of Washington with its principal office in Spokane, Washington. A vista is an investor-
owned utility principally engaged in the business of providing electric and natural gas
service in the states of Idaho and Washington, as well as natural gas service in the states
of Oregon and California.
Potlatch is a Delaware corporation that operates a wood pulp, paperboard
tissue and wood products manufacturing facility in Lewiston, Idaho (hereinafter referred
to as the "Lewiston Plant"
Potlatch owns and operates four generators at the Lewiston Plant that are
capable of generating approximately 130 megawatts of energy. These generators are
Qualifying Facilities ("QF") pursuant to the Public Utility Regulatory Policies Act of
1978, Pub. L. No. 95-617, 92 Stat. 3117 (1978) ("PURPA") and 18 c.F.R. Part 292
(2003).
Avista (formerly known as The Washington Water Power Company) has
provided electric service to the Lewiston Plant for many years. Beginning on January 1
1992, A vista purchased the Lewiston Plant generation output and provided electric
service to the Lewiston Plant pursuant to an Electric Service and Purchase Agreement
Between Potlatch Corporation and The Washington Water Power Company (" 1992
Agreement"). The Commission approved the 1992 Agreement in IPUC Case No. WWP-
91-, Order No. 23858 on August 16, 1991.
The 1992 Agreement had an expiration date of December 31 , 2001 and
contained no provisions regarding rates, terms or conditions for service after this
JOINT PETITION - 2
expiration date. Accordingly, prior to the expiration of the 1992 Agreement, the Parties
met on a number of occasions to attempt to negotiate a successor agreement.
The Parties were not able to reach agreement on a successor agreement
and Potlatch filed a Petition with the Commission on March 23 2001 for an order
determining the terms and conditions for Potlatch's purchase of electricity from A vista
Case No. A VU-OI-05. The Commission set Potlatch's Petition for public hearing.
On August 17 2001 , Potlatch and Avista filed a Joint Motion for an order
vacating the hearing in Case No. A VU-0l-05. The Parties also agreed that following
the expiration of the 1992 Agreement, Avista would serve the Lewiston Plant load at
Schedule 25 rates without prejudice to either Party s right to propose, or the Commission
to order in future rate proceedings, that Avista s service to Potlatch should be priced at
rates other than Schedule 25.
Since the expiration of the 1992 Agreement on December 31, 2001
Potlatch has used its Lewiston Plant generation to serve its Lewiston Plant load and
A vista has served the balance of the Lewiston Plant load at Schedule 25 rates.
On November 25 2002, Potlatch filed a complaint in the United States
District Court for the District ofIdaho, Case No. CIV02-0543-EJL, alleging that
Avista had violated certain terms of the 1992 Agreement.
10.On December 24, 2002, Potlatch filed a Compliant with the Commission
against Avista, Case No. A VU-02-, alleging that Avista had refused to purchase the
cogeneration output of the generation facilities at the Lewiston Plant.
11.The Parties have now reached agreement on a power purchase and sale
agreement that settles the issues raised in the various pending IPUC proceedings and the
JOINT PETITION - 3
litigation in Federal Court regarding electric service at Potlatch's Lewiston Plant. The
Purchase and Sale Agreement provides for both the purchase of the output of Potlatch'
generation at the Lewiston Plant and for the sale of energy to serve Potlatch's load at the
Lewiston Plant. In summary, the essential terms of the Agreement are as follows:
(a)The Purchase and Sale Agreement is for a ten-year term, beginning
July 1 , 2003 and ending June 30, 2013.
(b)The Purchase and Sale Agreement is conditioned upon approval by
this Commission of: (i) approval of the Purchase and Sale Agreement as a settlement of
all known existing disputes between the Parties, without precedential value and without
prejudice to the Parties' positions on similar issues in the future; (ii) direct assignment of
all power purchase costs paid by A vista to Potlatch under the Purchase and Sale
Agreement to A vista s Idaho operations; and (ui) deferral and recovery of 100% of all
power purchase costs paid by A vista to Potlatch under the Purchase and Sale Agreement
to Avista s Idaho Power Cost Adjustment ("PCA") or otherwise recovered by Avista
through base rates.
(c)Avista will be the sole purchaser of Potlatch's generation and such
purchase is intended to satisfy A vista s obligations to purchase power from the Lewiston
Plant pursuant to PURPA. Avista will pay Potlatch $42.92 per megawatt-hour for up to a
maximum Base Generation Amount of 543 120 megawatt-hours (544 608 during a leap
year) generated by Potlatch during each July 1 through June 30 period ("Operating
Year ) ofthe Agreement. This amount is equivalent to 62 average megawatts and is
referred to in the Agreement as the "Base Generation Amount." Amounts generated by
Potlatch in excess of the maximum Base Generation Amount each Operating Year
JOINT PETITION - 4
Excess Generation Amounts ) will either be purchased by Avista at 85% of the
applicable Mid-Columbia index price, with a price-cap of $55 per megawatt-hour, or
used by Potlatch to reduce its load requirements from Avista. The purchase of Potlatch'
Excess Generation Amounts by Avista is limited to 43 800 megawatt-hours (5 average
megawatts) each Operating Year.
Additionally, Potlatch has the capacity to generate additional amounts
Incremental Generation Amounts ) under certain circumstances. The Purchase and
Sale Agreement provides for the purchase by A vista of Incremental Generation Amounts
under the terms and conditions specified in the Agreement.
(d)Avista will serve Potlatch's load requirements at Potlatch'
Lewiston Plant under its Extra Large General Service Schedule 25 rates, including all
applicable rate adjustments, unless the Commission issues an order in the future
authorizing different billing rates.
WHEREFORE Avista and Potlatch respectfully request that the Commission
issue an order approving the Purchase and Sale Agreement, including provisions:
(1)approving the Purchase and Sale Agreement as a settlement of all known
existing disputes between the Parties, including without limitation, Case No. A VU-Ol-
05 and Case No. A VU-02-, without precedential value and without prejudice to the
Parties' positions on similar issues in the future;
(2)directly assigning all power purchase costs paid by A vista to Potlatch
under the Purchase and Sale Agreement to Avista s Idaho operations; and
JOINT PETITION - 5
(3)allowing deferral and recovery of 100% of all power purchase costs paid
by Avista to Potlatch under the Purchase and Sale Agreement to Avista s Idaho Power
Cost Adjustment ("PCA") or otherwise recovered by A vista through base retail rates.
The Parties request that the petition be processed by modified procedure, if the
Commission deems it appropriate.
DATED this 22nd day of August, 2003.
Potlatch Corporation Paine Hamblen, Coffin
Brooke & Miller LLP
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By:
R. Blair Strong
Attorneys for A vista Corporation
JOINT PETITION - 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 22nd day of August, 2003, I caused to be
served a true and correct copy of the foregoing by the method indicated below, and
addressed to the following:
Ms. Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83720-0074
Conley Ward
Givens Pursley LLP
277 North 6th Street, Suite 200
O. Box 2720
Boise, Idaho 83701
US, Mail
Hand Delivery
Facsimile
Overnight Mail
Electronic Mail
xxxxx S. Mail
Hand Delivery
Facsimile
Overnight Mail
Electronic Mail
xxxxx
xxxxx
00128415
R. Blair Strong
JOINT PETITION - 7
EXHIBIT
JOINT PETITION
POWER PURCHASE AND SALE AGREEMENT
BETWEEN
A VISTA CORPORATION
AND
POTLATCH CORPORATION
INDEX TO SECTIONS
Section
10.
11.
12.
13.
14.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
Definitions .........................................................
;......................................................""""""""'"
Representations...... .......... ........... ......... ....... .............. .... ............. ............. .........
........ "'" ...... .........
Term of Agreement .....................................................................................................................
Power Purthases (power Deliveries to A vista) ...........................................................................
Power Sales (power Deliveries to Potlatch) ................................................................................
Operation of Facility ......................................................................................................................
Scheduling ....................................................................................................................................
Billing and Payments ......................................................................................................................
Metering """""""""""'" """""'"
.................................. ................................. """""""""""""'"
Termination of Agreement.................................
..........................................................................
Forced Outage and Force Majeure ..............................................................................................
Indemnity ......................................................."""""""""""""""""""""""'
""""""""""""""'"
Limitation of Liability
..................................................................................................................
Insurance ......
"""""""" ........ ................................. ................. """"'" ............... ......... "" ...................
Assignment ................................................................. ..........................................................
.........
No Unspecified Third Party Beneficiaries...................................................................................
No Transmission Rights ................................................................................................................
Benefits for Renewable Fuels ........................................................................................................
Default ............................. ....................................... .....................................................................
Release by Avista .............................................
:..............................:..........................................
Release by Potlatch.......................................................................................................................
Governmental Authority .................................................
:...........................................................
Several Obligations.......................................................................................................................
Implementation ............................................................................................................................
Non-Waiver ................................................................................................................................
Entire Agreement and Amendment
..................................................................""""""""""""'"
Venue. Attorneys Fees and Choice of Law....................................................................................
Compliance with Laws ...............................................................................................................
Confidentiality .............................................................................................................................
Notices..........................................................................................................................................
Settlement of Litigation ............................................................,..................................................
Exhibits........................................................................................................................................
Page
POWER PURCHASE AND SALE AGREEMENT
BETWEEN
A VISTA CORPORATION
AND
POTLATCH CORPORATION
INDEX TO SECTIONS
Section Page
10.
11.
12.
13.
14.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
Definitions ............
... "'" ................ ............ ... ......;.. .......... .................... ........ ........... """'" ... ...........
Representations............................. ...............................................................................................
Term of Agreement .....................................................................................................................
Power Purchases (power Deliveries to Avista)
.............................................................................
Power Sales (power Deliveries to Potlatch) ................................................................................
Operation of Facility ....................................................................................................................
Scheduling ....................................................................................................................................
Billing and Payments....................................................................................................................
Metering...................... .......
............... """"""""" ........................ ............. ............ ............. ...........
Termination of Agreement.............................................................................................................
Forced Outage and Force Majeure .................................................................................................
Indemnity ......................................................................................................................................
Limitation of Liability
..................................................................................................................
Insurance ......................................................................................................................................
Assignment ..................................................................................................................................
No Unspecified Third Party Beneficiaries.........................................................................""""'"
No Transmission Rights ...............................................................................................................
Benefits for Renewable Fuels ......................................................................................................
Default... .................. ........ ......
........ ............................................... """"""""" """""'" """'" """"
Release by Avista ...............................................
;...........................................................................
Release by Potlatch................................................. ........ ..............................................................
Governmental Authority .................................................
:............................................................
Several Obligations.............................................. '" ................................ .....................................
Implementation .............................................................................................................................
Non-Waiver ................................................................................................................................
Entire Agreement and Amendment ..............................................................................................
Venue, Attorneys Fees and Choice of Law..................................................................................
Compliance with Laws ...............................................................................................................
Confidentiality .,...........................................................................................................................
Notices.........................................................................................................................................
Settlement of Litigation ...............................................................................................................
Exhibits........................................................................................................................................
22nd
This Power Purchase and Sale Agreement ("Agreement") is entered into as of this
day of July, 2003, by and between POTLATCH CORPORATION ("Potlatch"), a
corporation organized and existing under the laws of the State of Delaware, and A VISTA
CORPORATION ("Avista ) of Spokane, Washington, a corporation organized and existing
under the laws of the State of Washington, hereinafter sometimes referred to collectively as
Parties" and individually as "Party.
WITNESSETH:
WHEREAS, Potlatch owns and operates pulp, paperboard, tissue and wood products
manufacturing plants in Nez Perce County, Idaho, herein collectively referred to as the "Lewiston
Plant; "
WHEREAS, A vista is presently supplying electric power to Potlatch at the Lewiston
Plant;
WHEREAS, Potlatch owns and operates four thermal electric generating units located at
the Lewiston Plant;
WHEREAS, there is pending before the United States District Court for the District of
Idaho, Case No. CV02-543-EJL, a complaint by Potlatch against Avista;
WHEREAS, there is pending before the Idaho Public Utilities Commission, Case No.
A VU-02-, a complaint by Potlatch against Avista;
WHEREAS, the Parties desire to settle all litigation pending between them, pursuant to
the terms of this Agreement;
WHEREAS, Potlatch desires to sell, and A vista desires to purchase, the Net Facility
Power pursuant to the terms of this Agreement; and
WHEREAS, the Parties intend that, except for self generation by Potlatch to serve its
own Load, A vista shall be the sole purchaser of Net Facility Power and the sole supplier for
Potlatch Load.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Parties agree as follows:
- 1 -
DEFINITIONS . In addition to words .defined elsewhere in this Agreement as signified
by initial capitalization, whenever used in this Agreement, exhibits and attachments hereto, the
terms below shall have the following meanings:
(a)Bankrupt" With respect to either Party, when such Party (i) 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 and such petition is not dismissed within sixty (60) days
after it is filed, (ii) makes an assignment or any general arrangement for the benefit of creditors,
(iii) otherwise becomes bankrupt or insolvent (however evidenced), (iv) 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 (v) is generally unable to pay its debts as they fall
due.
(b) "Base Generation Amount(s)" That amount of Net Facility Power, expressed in
megawatt-hours, less any Incremental Generation Amount, for each hour and delivered by
Potlatch to A vista. The maximum Base Generation Amount for any July 1st through June 30
period (any such period referred to as the "Operating Year ) shall be 543,120 megawatt-hours
during a normal year or 544 608 megawatt-hours during a leap year.
(c) "Base Period Demand" The average kVa supplied during the 30-minute period of
maximum electricity use during the portion of the billing period up to and including the point
where the maximum Base Generation Amount is reached. Demand shall be calculated using a
rolling 30-minute demand interval with 5-minute sub-intervals.
(d) "Billing Period" That period which begins at 0000 hours on the first day of any month
during the term of the Agreement and ends at 2400 hours on the last day of such month.
(e)Effective Date" The date this Agreement becomes effective pursuant to Section 3(a) of
this Agreement.
- 2 -
(1) "Excess Generation Amount(s)" That amount of Net Facility Power, expressed in
megawatt-hours, generated by the Facility, less any Incremental Generation Amount, for each
hour that is in excess of the maximum Base Generation Amount of 543,120 megawatt-hours for
any Operating Year during a normal year or 544 608 megawatt-hours during a leap year.
(g) "
Excess Period Demand" The average kVa supplied during the 30-minute period of
maximum electricity use during the portion of the billing period after the point where the
maximum Base Generation Amount is reached. Demand shall be calculated using a rolling 30-
minute demand interval with 5-minute sub-intervals.
(h) "Facility" The electric generating facilities, including all equipment and structures
necessary to generate and supply power, more particularly described at Exhibit C (Description of
the Facility).
(i) "Facility Service Power" Electric power used by the Facility during its operation for
station service, including, but not necessarily limited to pumping, generator excitation and
cooling, as further defined in Exhibit A.
G) "Forced Outage" Any outage that either fully or partially curtails the electrical output
of the Facility caused by mechanical or electrical equipment failure, plant related structural
failure, or' unscheduled maintenance required to be performed to prevent equipment failure.
(k) "Good Industry Practice(s)" Good industry practice as defined in the Interconnection
Agreement, which definition is adopted by reference for purposes of this Agreement as though
set forth in full herein.
(I) "Governmental Authority" Any federal, state or local government political
subdivision thereof or other governmental, regulatory, quasi-governmental, judicial, public or
statutory instrumentality, authority, body, agency, department, bureau, or entity or any arbitrator
with authority to bind a Party at law.
- 3 -
(m) "Governmental Rule(s)" Any law, rule, regulation, ordinance, order, code, permit
judgment, or similar form of decision of any Governmental Authority having the effect of law or
regulation.
(n) "Heavy Load Hours
" ("
HLH") The hours ending 0700 through 2200 Pacific
Prevailing Time, Monday through Saturday inclusive, excluding NERC holidays.
(0)
' "
Incremental Generation Amount(s)" The amount of Net Facility Power expressed in
megawatt-hours for each hour that is in excess of the Nominal Generation Amount.
(p) "
Index" The daily price expressed in dollars per megawatt-hour for firm energy as
published by Dow Jones for the Mid-Columbia point of delivery for the applicable Heavy Load
Hours or Light Load Hours. If prices for any hour are not published for the Mid-Columbia point
of delivery, A vista may extrapolate such prices using reasonable commercial judgment; provided
~hat A vista shall notify Potlatch in writing of any such extrapolation and the basis thereof. In the
absence of this index, a comparable publication of firm energy prices at Mid-Columbia shall be
used as mutually agreed to by the Parties.
(q)
Interconnection Agreement" The Generation Interconnection Agreement between
Potlatch and A vista.
(r)Light Load Hours
" ("
LLH") All hours other than Heavy Load Hours.
(s) "Load" The hourly energy, expressed in megawatt-hours, consumed at Potlatch'
Lewiston Plant excluding Facility Service Power and Losses.
(t) "Losses " Electric power used by the Facility during its operation to transform or
transmit electric power to Points of Delivery. Losses shall be deemed to be 200 kW.
(u) "Net Facility Power" Electric power generated by the Facility and measured at the point
of generation less Facility Service Power and less electric power used to compensate for Losses.
- 4 -
If any adjustment to the meter readings is required hereunder to determine the Net Facility Power
actually delivered to the Points of Delivery, the electric power which the Parties agree is used by
the Facility in its operation and losses to the Points of Delivery is set forth in Exhibit A.
(v) "Nominal Generation Amount(s)" A calculation to be performed daily and shall be the
same for each hour of that day, but only used when the Parties execute a Power Purchase of
Incremental Generation Amounts, to be determined as follows: The amount of electric power
generated by the Facility, expressed in megawatts per hour, determined by averaging the hourly
Net Facility Power generation amounts less any Power Purchases of Incremental Generation
Amounts for each hour for the immediate past period counting backwards beginning two (2) days
prior to the current day and consisting of thirty (30) days, not necessarily contiguous, in which
the average Net Facility Power was greater than 720 megawatt-hours for each of these days (30
aMW). The Nominal Generation Amount shall be not less than fifty-five (55) megawatts per
hour. The Nominal Generation Amount shall be calculated as of the date of any transaction for a
Power Purchase of Incremental Generation Amounts and shall be the same amount for each hour
during the term of such transaction. If the Power Purchase transaction for an Incremental
Generation Amount is a prescheduled transaction, then the Nominal Generation Amount
calculation will serve to set the Base Generation Amount or Excess Generation Amount for the
duration of the Incremental Generation Transaction Period, and any Net Facility Power above
that amount shall be deemed the Incremental Generation Amount. The "Incremental Generation
Transaction Period" shall be all hours of each of the days specified for delivery of Incremental
Generation Amounts that are part of a single prescheduled transaction which is also the first such
transaction executed by the Parties for Incremental Generation Amount deliveries during those
same days. The Incremental Generation Amount shall be set equal to zero for the purpose of
calculating Base Generation Amounts (as defined in Subsection l(b)), Excess Generation
Amounts (as defined in Subsection 1(!)), and Nominal Generation Amounts during those hours
in which no Incremental Generation Amount is purchased by Avista, in accordance with
Section 4.
(w) "Pacific Prevailing Time" The Pacific Time, either standard time or daylight savings
time, whichever is in effect at the relevant time.
- 5 -
(x)Points of Delivery" The locations where the Facility is electrically interconnected with
Avista s electrical system
(y)
Power Purchase(s)" Power transactions in which Avista purchases from Potlatch
electric power generated by the Facility.
(z)Power Sale(s)" Power transactions in which Potlatch purchases electric power from
A vista.
(aa) "True-up Process" That process described in Section 3(f) for settling obligations
incurred under this Agreement in the event of termination.
(bb) "Week" The period of time beginning at 0000 hours on any Sunday during the term of
this Agreement and ending at 2400 hours on the immediately subsequent Saturday.
REPRESENTATIONS.
(a) Potlatch represents that it is the sole owner of the Facility, that all licenses or permits
required for the operation thereof have been or will be obtained in the name of, or assigned to
Potlatch, prior to the Effective Date and that the undersigned is authorized to execute this
Agreement in Potlatch's behalf. Potlatch also represents that each generating unit described at
Exhibit C (Description of the Facility) is a qualifying facility ("Qualifying Facility ) pursuant to
law and the rules of the Federal Energy Regulatory Commission.
(b)Each Party represents and warrants to the other:
(1) subject to the provisions of Subsections 3(b) and 3(c), it has all authorizations
from Governmental Authority necessary for it to legally perform its obligations under this
Agreement or will obtain such authorizations in a timely manner prior to the time at which any
performance by it requiring such authorizations becomes due;
(2) the execution , delivery and performance of this Agreement are within its statutory
and corporate powers, have been duly authorized by all necessary action and do not violate any of
- 6-
the terms or conditions in its governing documents, any material contract to which it is a party or
by which it or any of its properties may be affected or bound, or any Governmental Rule
applicable to it;
(3) this Agreement constitutes a legal, valid and binding obligation of the Party
enforceable against it in accordance with its terms, and the Party has all rights such that it can
and shall perform its obligations to the other Party in conformance with the terms and conditions
of this Agreement, subject to bankruptcy, insolvency, reorganization and other laws affecting
creditor s rights generally and general principles of equity;
(4) no Bankruptcy is pending against it, being contemplated by it, or to its knowledge
threatened against it; and
(5) subject to the provIsIons of Subsections 3(b) and 3(c) there are no suits,
proceedings , judgments, rulings or orders by or before any Governmental Authority that could
reasonably be expected to have a material adverse effect on its ability to perform this Agreement.
TERM OF AGREEMENT.
(a) Subject to the provisions of this Section 3, this Agreement shall be effective at 0000
hours on July 1 , 2003. Power Purchases and Sales pursuant to this Agreement shall be deemed
to have commenced upon the Effective Date.
'-.
(b) Potlatch and Avista shall jointly petition the Idaho Public Utility Commission ("IPUC"
for an order approving this Agreement. This Agreement is conditioned upon approval by the
IPUC of the following provisions:
(1) approval of the Agreement as a settlement of all known existing disputes between
the Parties, without precedential value and without prejudice to the Parties' positions on similar
issues in the future;
(2) direct assignment of all Power Purchase costs paid by A vista to Potlatch under
this Agreement to A vista s Idaho operations; and
- 7 -
(3) deferral and recovery of 100% of all Power Purchase costs paid by A vista
Potlatch under this Agreement to Avista s Idaho Power Cost Adjustment ("PCA") or otherwise
recovered by A vista through base rates.
In the event that the IPUC does not approve the Agreement or approves it upon
conditions that are unacceptable to A vista or Potlatch in their sole discretion, the Agreement
shall terminate upon the date of such order, subject to the True-Up Process described below.
After IPUC initial approval of this Agreement, should the IPUC revise regulatory
treatment of the Agreement in a manner unacceptable to A vista or Potlatch in their sole
discretion, the Agreement shall terminate upon the date of such order, without being subject to
the True-Up Process described below.
(c) This Agreement is conditioned upon the execution and filing with the Federal Energy
Regulatory Commission ("FERC") of the Interconnection Agreement between A vista and
Potlatch within sixty (60) days of the Effective Date of this Agreement. In the event that FERC
does not approve the Interconnection Agreement or approves it upon conditions that are
unacceptable to A vista or Potlatch in their sole discretion, this Agreement shall terminate upon
the date of such order, subject to the True-Up Process described below.
(d) In the event that any third person requests rehearing of an order of the IPUC that approves
the Agreement or appeals an order of the IPUC that approves this Agreement to a court
competent jurisdiction, the Agreement shall terminate upon the date of an order on rehearing or
order on appeal that disapproves the Agreement or approves it upon conditions that are
unacceptable to A vista or Potlatch in their sole discretion, subject to the True-Up Process
described below.
(e) In the event this Agreement is not finally approved by December 31, 2003, neither Party
shall have any further obligations hereunder, and this Agreement shall terminate, subject to the
True-Up Process described below.
- 8 -
(f) True-Up Process: In the event that this Agreement is terminated pursuant to
Subsections 3(b) through 3(e) except as otherwise provided, the Parties agree to refund amounts
paid and received hereunder that exceed amounts that would have been paid and received had
this Agreement not taken effect from the Effective Date to the date of termination ("Interim
Period"). Such refund amounts shall be calculated as the difference between the amounts paid
and received hereunder and the amounts that would have been paid and received if Potlatch had
utilized its Facility to generate electricity for its own Load at the Lewiston Plant during the
Interim Period and purchased its remaining electricity requirements at Schedule 25 rates. If the
amount of electricity generated by the Facility exceeds the Load at the Lewiston Plant during the
Interim Period, A vista shall be deemed to have purchased the amount in excess of the Load, and
such purchase shall be priced at the energy rates contained in Schedule 25, calculated for each
month of the Interim Period. Incremental Generation Amounts and prices paid therefor during
the Interim Period shall not be subject to this True-Up Process.
(g)
This Agreement shall terminate at 2400 hours on June 30, 2013.
POWER PURCHASES (POWER DELIVERI~S TO A VISTA)
(a) Potlatch shall sell and deliver and Avista shall purchase and accept delivery of Net
Facility Power in accordance with the terms and conditions of this Agreement. Such purchase by
Avista shall satisfy Avista s obligation to purchase power from the Facility pursuant to the Public
Utility Regulatory Policies Act for the term of this Agreement. All prices for Power Purchases
described in this Section 4 are all inclusive, and A vista shall not impose any charges or set-offs
for transmission, losses, ancillary services or other similar costs.
(b) Avista shall pay $42.92 per megawatt-hour for the Base Generation Amount generated by
the Facility each hour and delivered by Potlatch to Avista.
(c) A vista shall pay eighty-five percent (85%) of the applicable (HLH or LLH) Index price
per megawatt-hour, up to a maximum price paid to Potlatch of $55 per megawatt-hour, for
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Excess Generation Amounts generated by the Facility each hour and delivered by Potlatch to
Avista. Potlatch may choose to not schedule and deliver Excess Generation Amounts to Avista
and instead supply electric power to the Load during any Week; provided, however Potlatch
shall notify Avista of its election in accordance with Subsection 7(a) and such election shall be
binding for the Week. In the event Potlatch does not notify Avista of its election in accordance
with Subsection 7(a), Potlatch shall be deemed to have elected to supply the power to its Load
for the Week. A vista shall not pay Potlatch for such Excess Generation that is not scheduled and
delivered to A vista.
(d) The maximum Excess Generation Amount that Avista shall purchase for any Operating
Year shall be 43 800 megawatt-hours. Excess Generation Amounts in excess of the maximum
Excess Generation Amount shall be deemed used to serve Potlatch Load.
(e) Avista shall pay for Incremental Generation Amounts as set forth herein. Avista shall
make price offers for Incremental Generation Amounts to Potlatch, either upon its own initiative
or upon Potlatch's request, subject to Subsection 4(f) below. Prices offered by Avista shall
include all A vista costs, including but not limited to, unit contingency, transmission, losses
ancillary services and other costs , but excluding third party transmission costs. Potlatch may
request a price offer from A vista on a prescheduled basis for Incremental Generation Amounts
consistent with Section 7. Unless the Parties otherwise agree, Avista, using reasonable
commercial efforts, shall provide a price offer which shall be eighty-five percent (85%) of a unit
contingent sale price that A vista is able to execute with a third party for the Incremental
Generation Amount that Potlatch will make available to A vista on a prescheduled basis. If
A vista is unable, after using reasonable commercial efforts to execute a unit contingent sale, or is
unwilling, using reasonable commercial judgement to execute a unit contingent sale, then A vista
shall not be obligated to offer a prescheduled price to Potlatch. Any A vista purchases of firm,
rather than unit contingent, Incremental Generation Amounts shall be subject to separate
negotiation and mutual agreement at the time of such purchases.
If the Parties are unable to mutually agree upon a prescheduled price for Incremental
Generation Amounts and Potlatch desires to sell Incremental Generation Amounts to A vista
Potlatch may request a real-time price offer for the hour from A vista consistent with Section 7.
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Subject to Subsection 4(f) below, if the Parties are unable to mutually agree on a real-time price
for such hour, then Potlatch may elect, consistent with Section 7, to receive a price based on
eighty percent (80%) of the weighted average pnce of Avista s real-time hourly sales and
purchases for the hour in which the Parties agree that A vista will purchase Incremental
Generation Amounts. If A vista has no real-time hourly purchases or sales for the hour in which
Potlatch elects to sell Incremental Generation Amounts to A vista, then eighty percent (80%) of
the hourly real-time market price internally recorded by Avista based on information which
A vista generally discovers through its participation in the market shall be used as the price for the
Incremental Generation Amount for such hour.
(I) A vista shall use the same degree of care and effort to purchase and, if necessary, to resell
Incremental Generation Amounts as it uses in selling electric power from A vista owned
generating resources. Notwithstanding anything in this Agreement, A vista reserves the right to
refuse to purchase Incremental Generation Amounts due to commercially reasonable internal
policy limitations prohibiting purchases for resale or Governmental Rules prohibiting purchases
for resale. A vista shall make reasonable efforts to notify Potlatch in advance of such internal
policy limitations or Governmental Rules.
(g)
With regard to a prescheduled purchase of an Incremental Generation Amount, at the time
of execution of the transaction, A vista shall provide Potlatch with a facsimile copy of the
transaction confirmation that shall include the mutually agreed upon price and estimated
Incremental Generation Amount as provided by Potlatch. With regard to a real-time purchase of
an Incremental Generation Amount, at the time of execution of the transaction, A vista shall
provide Potlatch with a voice confirmation of either the price or Potlatch's election to take the
calculated price, in accordance with Subsection 4(e). Potlatch shall provide a voice confirmation
of the estimated Incremental Generation Amount. Potlatch may call Avista s real-time scheduler
in the hour following the hour of delivery of the Incremental Generation Amount and Avista
shall provide the real-time market price internally recorded in accordance with Subsection 4(e)
for Potlatch's information purposes only.
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(h) Multiple Incremental Generation Amount transactions within a single hour: Should
the Parties enter into more than one transaction for delivery in any hour of Incremental
Generation Amounts, then the actual Incremental Generation Amounts produced by Potlatch'
Facility will be first committed to the transaction entered into on the earliest date and time and
the remaining actual Incremental Generation Amounts will be committed to the remaining
transactions in the order in which the Parties entered into those transactions.
POWER SALES (POWE~RIES 1Q,pOTLA TCH)
(a) A vista shall sell and deliver and Potlatch shall purchase and accept delivery of electric
power and energy required for Potlatch's Load at the Lewiston Plant for the duration of the
Agreement in accordance with the terms and conditions of this Agreement, Avista s Rules and
Regulations in effect with the IPUC, applicable tariff schedules and orders of the IPUC in effect
at the time electric power is delivered hereunder, as they may be changed from time to time, and
any other requirements imposed by law, provided:
(1)A vista shall not be obligated to provide to Potlatch Facility Service Power or
Losses; and
(2) Any demand charge assessed to Potlatch for periods in which Power Purchases are
made shall be based on either:
(i) The coincident hourly sum of (1) Net Facility Power produced by the
Facility (expressed in kilowatts) and (2) electric power (expressed in kilowatts) that flows from
A vista s electric system to the Potlatch Load added vectorily to only the reactive power
kV ARs ) that flows from A vista s electric system to the Potlatch Load during periods when
A vista purchases from Potlatch either Base Generation Amounts or Excess Generation Amounts
or;
(ii) The coincident hourly sum of (1) Incremental Generation Amounts
produced by the Facility (expressed in kilowatts) and (2) electric power (expressed in kilowatts)
that flows from Avista s electric system to the Potlatch Load added vectorily to only the reactive
power ("kV ARs ) that flows from A vista s electric system to the Potlatch Load during periods
when Potlatch elects to use Excess Generation Amounts to serve its Load.
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Reactive power produced by the Facility as described in either of the cases under
Subsection 5(a)(2)(i) or 5(a)(2)(ii) above shall not be included in the demand calculation.
(3) Any demand charge assessed to Potlatch for periods in which no Power Purchases
are made shall be based only on kilowatts that flow from A vista s electric system to the Potlatch
Load added vectorily to only the reactive power that flows from A vista s electric system to the
Potlatch Load.
(b) Avista shall bill for all electric power delivered by Avista for Potlatch's Load at the rates
set forth in A vista s Extra Large General Service Schedule 25, including all adjustments thereto,
unless and until such time as the IPUC issues. an order authorizing A vista to bill at a different
rate. Nothing shall prejudice any Party s right to propose, or the Commission to order, in future
proceedings that Potlatch's service should be priced at rates other than Schedule 25 rates. This
Agreement shall not be construed as restricting the right of either Party to petition the IPUC to
establish, disestablish , amend or alter Avista s Rules and Regulations in effect with the IPUC,
applicable tariff schedules and orders of the IPUC, including but not limited to Schedule 25.
OPERA TION OF FACILITY.
(a) Potlatch shall construct, operate and maintain the Facility and associated electrical
equipment in compliance with Qualifying Facility status and in accordance with applicable laws
and regulations and in accordance with Good Industry Practice. Potlatch shall construct, operate
and maintain the Facility and other equipment associated with the Lewiston Plant at its own risk
and expense. A vista shall construct, operate and maintain its interconnection facilities, that
portion of its system that is interconnected to the Facility, and all equipment needed to receive
and transmit electric power in accordance with applicable laws and regulations and in accordance
with the Interconnection Agreement and Good Industry Practice.
(b) Interconnection of electrical systems under this Agreement shall be governed by the
Interconnection Agreement. Nothing herein is intended to amend or alter the Interconnection
Agreement as it may be amended or superceded. In the event that the Interconnection Agreement
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is superceded or amended as a consequence of a lawful order of the Federal Energy Regulatory
Commission, or other agency or court having jurisdiction thereof, the Parties agree to negotiate in
good faith such amendments to this Agreement as are necessary to preserve the intent of this
Agreement. Subject to Governmental Rules, in the event of a conflict between the terms of this
Agreement and the Interconnection Agreement, the terms of this Agreement shall take
precedence.
(c)Exhibit B (Communications), attached hereto, shall govern communications between
Potlatch and A vista for purposes of this Agreement.
(d)Potlatch shall provide A vista as much notice as is reasonably practicable under the
circumstances in the event of any planned increase to or reduction in its Load of more than
000 kilowatts. Potlatch shall also provide as much notice as is reasonably practicable under
the circumstances of any planned outages of the Facility and any planned increase or reduction of
generation from the Facility of more than 10 000 kilowatts. The notices shall specify the amount
and the expected duration of such outages, increases and reductions.
(e)Potlatch shall use its best efforts to maintain its Load on Avista s electric system (at the
Points of Delivery) at a power factor of 95% or higher throughout the term of this Agreement.
A vista shall not be liable for any loss or damage incurred by Potlatch resulting solely from
Potlatch's failure to maintain a power factor of 95% or higher.
(0 The Parties acknowledge that Avista s electric power system and delivery facilities, under
certain circumstances, may constrain power deliveries to Potlatch's Lewiston Plant. Potlatch
shall notify A vista of any intention to increase its energy and demand requirements at the
Lewiston Plant beyond the capacity of A vista s facilities. The Parties shall negotiate in good
faith the terms and conditions of a mutually acceptable separate agreement to install additional
facilities required to accommodate additional energy and demand requirements, subject to
approval by the IPUC and consistent with FERC rules and regulations.
(g)
Potlatch agrees to adhere to IEEE 519 guidelines for power quality.
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SCHEDULING.
(a)General Scheduling: Potlatch shall submit to A vista pre-schedulers its estimated hourly
schedules for Base Generation Amounts, Excess Generation Amounts, and Load for each Week
and shall make commercially reasonable efforts to deliver electric power as scheduled. Potlatch
shall also indicate, pursuant to Subsection 4(c), whether it will sell Excess Generation Amounts
to Avista or elects to instead supply Excess Generation Amounts to its Load for the Week.
Potlatch shall insure that such submission is received by A vista no later than 1700 hours Pacific
Prevailing Time of the second-to-the-last business day observed by both Parties of the Week
preceding the Week to be pre-scheduled by facsimile or other similar written form. Potlatch
shall also call Avista s real-time scheduler as soon as practical if there are material changes to
expected generation amounts or Load.
(b)Day-Ahead Incremental Generation Amount Scheduling Estimates: Potlatch shall
submit to A vista s pre-schedulers its best estimates of hourly Incremental Generation Amounts by
0600 hours Pacific Prevailing Time on the business day observed by both Parties immediately
preceding the day or days on which electric power is to be delivered, unless otherwise mutually
agreed by the Parties.
(c)Real- Time Incremental Generation Amount Schedules: Potlatch shall contact A vista
real-time schedulers no earlier than two hours and not later than one hour prior to the hour in
which power is to be delivered to communicate its best estimate of hourly Incremental
Generation Amounts and any material change in expected electric power deliveries or changes in
Load.
BILLING AND PAYMENTS.
(a) So long as there are Power Sales made and/or payments due hereunder, A vista shall
prepare monthly an itemized billing of the payment due, including the amounts of Power
Purchases, Power Sales, the appropriate rates, and any adjustments to the payment consistent
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with the provisions herein. Payments for amounts billed shall be received by the Party to be paid
on the due date, which shall be either the 20th day of the month following the Billing Period
ten (10) days after receipt of the bill, whichever is later ("Due Date
).
Payment shall be made at
the location designated by the Party to which payment is due. If the Due Date falls on a non-
business day of either Party, then the payment shall be due on the next following business day.
(b) Subject to Subsection (c) below, any payments by Avista to Potlatch or by Potlatch to
A vista, if not paid in full within the limitations set forth in Subsection (a), shall be late.
addition to the other remedies for such an Event of Default pursuant to this Agreement, the late-
paying Party shall be assessed a charge for late payment equal to the lesser of one percent (1
per whole or partial month, or the maximum rate allowed by the laws of the State of Idaho per
whole or partial month multiplied by the overdue amount. Each Party shall have the right to
offset any amounts due it against any present payments owed to the other Party.
(c) If a Party in good faith disputes a bill prepared by the other Party, the disputing Party may
payor withhold the amount in dispute. If a disputing Party elects to payor withhold the amount
in dispute, it shall provide a written notice to the other Party at the same time that payment would
be normally due, which notice shall specifically set forth the basis of the dispute. The Parties
agree as soon as practicable to negotiate the dispute and failing negotiation, to otherwise resolve
the dispute in the most expeditious manner practicable. If the disputing Party elects to withhold
the disputed amount, and if the billing dispute is resolved in favor of the Party that prepared the
bill, the disputing Party shall pay to the billing Party the amount withheld with interest accrued at
the rate set forth in Subsection (b) above, multiplied by the withheld amount, prorated by months
and partial months from the original date that the amount should have been paid to the actual
date of payment. If the disputing Party elects to pay the disputed amount, and the billing dispute
is resolved in favor of the disputing Party, the Party that prepared the bill shall refund the
disputed amount to the disputing Party, with interest accrued at the rate set forth in Subsection
(b) above multiplied by the disputed amount, prorated by months and partial months from the
date that the amount was paid to the date of refund.
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(d) Potlatch may verify information used in preparing invoices by examining Avista
documents in its Spokane office for a period up to ninety (90) days after the billing date. All
information, records and reports related to Power Purchases or Power Sales under the terms of
this Agreement, and the calculation of prices therefor, will be open to inspection by Potlatch
upon reasonable notice and provided that Potlatch shall keep all such information confidential
and use it only for purposes of this Agreement, and further provided that in any enforcement
proceedings, Potlatch shall avail itself of procedures to protect the confidentiality of such
information under the applicable Governmental Rules.
(e) Avista shall prorate amounts billed to Potlatch for demand and other charges, in
accordance with the provisions of this Section , during the initial month of Power Purchases and
Power Sales under this Agreement if such purchases and sales commence on any day other than
the first day of the month, and during any Billing Period in which Potlatch elects to use Excess
Generation Amounts to serve the Load as permitted in Section 4(c). The Power Sales demand
quantities, expressed in kilovolt-amperes ("kVa shall be prorated for the purposes
calculating the demand charge for the applicable Billing Periods. For the applicable Billing
Periods, the prorated demand quantity components shall be calculated as follows: (1) Base
Period Demand, expressed in kVa, during that portion of the Billing Period in which Avista
made Power Purchases of Base Generation Amounts from Potlatch multiplied by the number of
days (rounded to the nearest whole day) in the Billing Period in which A vista made Power
Purchases of Base Generation Amounts from Potlatch and then divided by the total number of
days in the Billing Period; (2) Excess Period Demand, expressed in kVa, during that portion of
the billing period in which A vista made no Power Purchases other than Incremental Generation
Amounts from Potlatch multiplied by the number of days (rounded to the nearest whole day) in
the Billing Period in which A vista made no Power Purchases other than Incremental Generation
Amounts from Potlatch and then divided by the total number of days in the Billing Period; (3)
Excess Period Demand, expressed in kVa, during that portion of the Billing Period in which
A vista purchased Excess Generation Amounts from Potlatch multiplied by the number of days
(rounded to the nearest whole day) in the Billing Period in which A vista made Power Purchases
of Excess Generation Amounts from Potlatch and then divided by the total number of days in the
Billing Period. Prorated total demand quantity, expressed in kVa, is calculated from the
- 17 -
arithmetic sum of (1), (2) and (3) above. The resultant total demand quantity shall be used for
calculation of the demand charge.
(0 Adjustments shall be made in billings for errors in a meter reading or in a billing
discovered within thirty-six (36) months of the error.
METERING.
(a)Metering shall be governed by the provisions of Exhibit A.
(b)A vista shall be responsible for any meter readings required by this Agreement.
10.TERMINA TION OF AGREEMENT.
Subject to the Force Majeure provision of this Agreement, the Agreement may be terminated at
A vista s sole option, if any of the following conditions occur.
(a)Potlatch abandons the Facility or otherwise renders the Facility incapable of generating
electric power; or
(b) There have been no electric power deliveries to Avista from the Facility for a period of
twelve (12) consecutive months; or
(c) The electric power deliveries from the Facility to A vista fail to exceed 175 200 megawatt-
hours during any rolling period of twenty-four (24) consecutive months, which rolling period
commences any time after the first twelve (12) consecutive months following the Effective Date.
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11.FORCED OUTAGE AND FORCE MAJEURE
(a) Neither Party shall be liable to the other Party for, or be considered to be in breach of or
default under this Agreement, on account of any delay in performance due to any of the following
events, which event or circumstance was not anticipated as of the Effective Date ("Force
Majeure
(1) Any cause or condition beyond such Party s reasonable control that such Party is
unable to overcome by the exercise of reasonable diligence, including but not limited to: fire
flood, earthquake, volcanic activity, wind, drought and other acts of the elements; court order and
act of civil, military or governmental authority; strike, lockout and other labor dispute; riot
insurrection, terrorism, sabotage or war; Governmental Rules; Forced Outage; breakdown of or
damage to facilities or equipment; electrical disturbance originating in or transmitted through
such Party electric system or any electric system with which such Party s system
interconnected; any interruption of transmission service required for the performance of this
Agreement that is excused by reason of force majeure or uncontrollable forces under a Party
contract with a transmission service provider; and, any act or omission of any person or entity
other than such Party, and Party s contractors or suppliers of any tier or anyone acting on behalf
of such Party; or
(2) Any action taken by such Party which is, in the sole judgment of such Party,
necessary or prudent to protect the operation, performance, integrity, reliability or stability of
such Party s electric system or any electric system with which such Party s electric system is
interconnected, whether such actions occur automatically or manually.
(b) In the event of any Force Majeure occurrence, the time for performance thereby delayed
shall be extended by a period . of time reasonably necessary to compensate for such delay.
Nothing contained in this paragraph shall require any Party to settle any strike, lockout or other
labor dispute. In the event of a Force Majeure occurrence, which will affect performance under
this Agreement, the nonperforming Party shall provide the other Party written notice as soon as
practicable after the occurrence of the Force Majeure event. Such notice shall include the
particulars of the occurrence, assurances that suspension of performance is of no greater scope
and of no longer duration than is required by the Force Majeure and that best efforts are being
- 19 -
used to remedy its inability to perform. The nonperforming Party shall remedy the Force
Majeure occurrence with all reasonable dispatch. The performing Party shall not be required to
perform or resume performance of its obligations to the nonperforming Party corresponding to
the obligations of the performing Party excused by the Force Majeure occurrence.
(c) Force Majeure does not include changes in the ownership, occupancy, or operation of the
Facility or A vista if such changes occur because of normal business occurrences which include
but are not limited to: changes in business economic cycles; recessions; bankruptcies; tax law
changes; sales of businesses; closure of businesses; changes in production levels; and, changes in
system operations.
(d) Force Majeure does not excuse any Party from making payments of money due under this
Agreement for power purchased prior to the Force Majeure event.
12.INDEMNITY.
(a)Potlatch's Dutv to Indemnifv Potlatch shall indemnify, hold harmless and defend
A vista, and its officers , directors, employees , affiliates, managers , members, trustees
shareholders, agents, contractors, subcontractors, affiliates' employees , invitees and successors,
from and against any and all third party claims, demands, suits, obligations, payments, liabilities
costs, losses , judgments, damages and expenses (including the reasonable costs and expenses of
any and all actions, suits, proceedings, assessments , judgments, settlements, and compromises
relating thereto, reasonable attorneys' and expert fees and reasonable disbursements in connection
therewith) for damage to property, injury to any person or entity, or death of any individual,
including A vista s employees and affiliates' employees, Potlatch's employees, or any other third
parties, to the extent caused wholly or in part by any act or omission, negligent or otherwise, by
Potlatch or its officers, directors, employees, agents, contractors, subcontractors and invitees
arising out of or connected with Potlatch's performance or breach of this Agreement, or the
exercise by Potlatch of its rights hereunder; provided, however that the provisions of this Section
shall not apply if any such injury, death or damage is held to have been caused by the sole
- 20-
negligence or intentional wrongdoing of Avista, its agents or employees. The foregoing
indemnification obligation shall not be limited in any way by workers' compensation laws or by
any limitation on the amount or type of damages, compensation or benefits payable by Potlatch
under applicable workers' compensation laws.
(b) Avista'Dutv to Indemnifv.Avista shall indemnify, hold harmless and defend Potlatch,
and its officers, directors, employees, affiliates, managers, members, trustees, shareholders
agents, contractors, subcontractors, invitees and successors, from and against any and all third
party claims, demands, suits, obligations, payments, liabilities, costs, losses, judgments, damages
and expenses (including the reasonable costs and expenses of any and all actions, suits
proceedings, assessments, judgments, settlements, and compromises relating thereto, reasonable
attorneys' and expert fees and reasonable disbursements in connection therewith) for damage to
property, injury to any entity or person, or death of any individual, including Potlatch'
employees and affiliates' employees , A vista s employees, or any other third parties, to the extent
caused wholly or in part by any act or omission, negligent or otherwise, by A vista or its officers
directors, employees, agents, contractors, subcontractors and invitees arising out of or connected
with Avista s performance or breach of this Agreement, or the exercise by Avista of its rights
hereunder; provided, however that the provisions of this Section shall not apply if any such
injury, death or damage is held to have been caused by the sole negligence or intentional
wrongdoing of Potlatch, its agents or employees. The foregoing indemnification obligation shall
not be limited in any way by workers' compensation laws or by any limitation on the amount or
type of damages, compensation or benefits payable by A vista under applicable workers
compensation laws.
(c) Notice. A Party seeking indemnification under this Agreement ("First Party ) shall give
the other Party ("Second Party ) notice of the claim or action giving rise to a right of
indemnification as soon as practicable, but in any event on or before the thirtieth (30th) day after
the First Party s actual knowledge of such claim or action. The notice shall describe the claim or
action in reasonable detail, and shall indicate the amount (estimated if necessary) of the claim or
action. Any failure of the First Party to provide the notice required by this Section shall not
affect the First Party s rights to indemnification except to the extent the Second Party is actually
- 21 -
and materially prejudiced as a result of such failure. Neither Party may settle or compromise any
claim for which indemnification is sought under this Agreement without the prior consent of the
other Party; provided, however said consent shall not be unreasonably withheld or delayed.
Each Party s indemnification obligation shall survive expiration, cancellation or early termination
of this Agreement.
(d) Acknowledl!ment to Nel!otiation. POTLATCH AND A VISTA SPECIFICALLY
WARRANT THAT THE TERMS AND CONDITIONS OF THE FOREGOING
INDEMNITY PROVISIONS ARE THE SUBJECT OF MUTUAL NEGOTIATION BY
THE PARTIES, AND ARE SPECIFICALLY AND EXPRESSLY AGREED TO IN
CONSIDERA TION OF THE MUTUAL BENEFITS DERIVED UNDER THE TERMS OF
THE AGREEMENT.
13.LIMITATION OF LIABILITY.
(a) Limitation of Liability. With respect to claims by and between the Parties under this
Agreement, the measure of damages at law or in equity in any action or proceeding shall be
limited to direct actual damages only.. Such direct actual damages shall be the sole and exclusive
remedy and all other remedies or damages at law or in equity are waived and neither Party shall
be liable in statute, contract, in tort (including negligence), strict liability, warranty or under any
other legal theory or otherwise to the other Party, its agents, representatives, and/or assigns, for
any special, incidental, punitive, exemplary or consequential loss or damage whatsoever,
including, but not limited to, loss of profits or revenue for work not performed, for loss of use of
or under-utilization of the other Party s facilities , loss of use of revenues, attorneys' fees
litigation costs, or loss of anticipated profits, resulting from either Party s performance or non-
performance of an obligation imposed on it by this Agreement, without regard to the cause or
causes related thereto, including the negligence of any Party. The Parties expressly acknowledge
and agree that this limitation shall not apply to any claims for indemnification under Section 12
of this Agreement. The provisions of this Section shall survive the termination or expiration of
this Agreement.
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(b) Limitation of Liabilitv for WIS Parties Notwithstanding the provisions of
Subsection (a) above, if both Avista and Potlatch are parties to the Western Interconnected
Systems Limitation of Liability ("WIS") Agreement, then the WIS Agreement shall control their
liabilities with respect to damages to the Facility, the interconnection facilities, or Avista
electric system.
14.INSURANCE.
(a) General Liabilitv. The Parties agree to maintain, at their own cost and expense, general
liability, workers' compensation , and other forms of insurance relating to their operations for the
life of this Agreement in the manner, and amounts, at a minimum, as set forth below.
(1) Workers' compensation insurance in accordance with all applicable state and
federal law, including Employer Liability Insurance in the amount of $1,000,000 per
occurrence;
(2) Commercial General Liability Insurance, including Contractual Liability Coverage
for liabilities assumed under this Agreement, and Personal Injury Coverage in the minimum
amount of $5 000,000 per occurrence for bodily injury and property damage. Potlatch's policy
shall include A vista as an additional insured.
(3) Where a Party has more than $100 million in assets it may, at its option, self-
insure all or part of the insurance required in this Section 14; provided, however the self-insuring
Party agrees that all other provisions of this Section 14, including, but not limited to, waiver of
subrogation, waiver of rights of recourse, and additional insured status, which provide or are
intended to provide protection for the other Party and its affiliated and associated companies
under this Agreement, shall remain enforceable. A Party s election to self-insure shall not impair,
limit, or in any manner result in a reduction of rights and/or benefits otherwise available to the
other Party and its affiliated and associated companies through formal insurance policies and
endorsements as specified in the above parts of this Section 14. The self-insuring Party agrees
that all amounts of self-insurance, retentions and/or deductibles are the responsibility of and shall
be borne by the self-insuring Party.
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(b) Certificates. Within fifteen (15) days of the Effective Date, and each anniversary of the
Effective Date, during the term of this Agreement, (including any extensions), each Party shall
provide to the other Party, properly executed and current certificates of insurance with respect to
all insurance policies required to be maintained by such Party under this Agreement. Certificates
of insurance shall provide the following information:
(1) Name of insurance company, policy number and expiration date;
(2) The coverage required and the limits on each, including the amount of deductibles
or self-insured retentions, which shall be for the account of the Party maintaining such policy;
(3) A statement indicating that the other Party shall receive at least thirty (30) days
prior written notice of cancellation or expiration of a policy, or reduction of liability limits with
respect to a policy; and
(4) A statement identifying and indicating that additional insureds have been named
as required by this Agreement.
(c) Policy Request.At a Party s request, in addition to the foregoing certifications, the other
Party shall deliver to the first Party a copy of applicable sections of each insurance policy.
(d) Inspection. Each Party shall have the right to inspect the original policies of insurance
applicable to this Agreement at the other Party s place of business during regular business hours.
(e)Claims Made" Insurance.If any insurance is written on a "claims made" basis, the
respective Party shall maintain the coverage for a minimum of seven years after the termination
of this Agreement.
(f) Waiver of Subro2ation.To the extent permitted by the insurer and commercially
reasonable, each Party shall obtain waivers of subrogation in favor of the other Party from any
insurer providing coverage that is required to be maintained under this Section 14. A Party shall
not be required to obtain a waiver of subrogation if the other Party is not able to obtain a waiver
of subrogation from its insurance carrier.
- 24-
15.ASSIGNMENT.
Neither Party shall voluntarily assign its rights or delegate its duties under this
Agreement, or any part of such rights or duties without the written consent of the other Party.
Such consent shall not unreasonably be withheld. Further, no assignment by either Party shall
relieve or release it to the extent of any of its obligations hereunder. Subject to the foregoing
restrictions on assignments, this Agreement shall be fully binding upon, inure to the benefit of
and be enforceable by the Parties and their respective successors, heirs and assigns.
16.NO UNSPECIFIED THIRD PARTY BENEFICIARIES.
Except as specifically provided in this Agreement, there are no third party beneficiaries of
this Agreement. Nothing contained in this Agreement is intended to confer any right or interest
on anyone other than the Parties, and their respective successors, heirs and assigns permitted
under Section 15.
17.NO TRANSMISSION RIGHTS.
Nothing in this Agreement shall be construed as granting Potlatch any right of access, or
any other rights, to A vista s transmission system.
18.BENEFITS FOR RENEWABLE FUELS.
Nothing in this Agreement shall affect Potlatch's rights to benefits attributable to
Potlatch's use of renewable fuels for generation. The Parties further agree to negotiate in good
faith should it be necessary at a later date, to develop a separate agreement in order to provide
Potlatch with those benefits.
- 25 -
19.DEFAULT.
(a) An "Event of Default" shall mean, with respect to a Party (a "Defaulting Party ), the
occurrence of any of the following:
(1) the failure to make, when due, any payment required pursuant to this Agreement if
such failure is not remedied within three (3) business days after delivery of written notice;
(2) any representation or warranty made by such Party herein is false or misleading in
any material respects when made or when deemed made or repeated;
(3) the failure to perform any material covenant or obligation set forth in this
Agreement (except to the extent constituting a separate Event of Default) if such failure is not
remedied within thirty (30) business days after delivery of written notice;
(4) such Party becomes Bankrupt; or
(5) such Party consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all of its assets to, another entity and, at the time of such consolidation
amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all
the obligations of such Party under this Agreement to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably satisfactory to the other Party.
(b)In the Event of Default, the following shall apply:
(1) The non-defaulting Party shall give written notice to the Defaulting Party of the
Event of Default in accordance with this Agreement.
(2) Except for an Event of Default that arises from failure to make money payments
or from a Party becoming bankrupt, if, after 30 days following receipt of such notice, the
Defaulting Party has not taken the steps necessary to cure the event of default, the non-defaulting
Party may, at its option, terminate this Agreement; provided, however that except for the failure
to pay sums which are due and payable, if the defaulting Party, within such 30-day period,
commences and thereafter proceeds with all due diligence to cure such default, such 30-day
period shall be extended up to six (6) months after written notice to the defaulting Party, as may
be necessary to cure the event of default with all due diligence. For an Event of Default that
arises from the failure to make money payments, the non-defaulting Party may, at its option,
terminate this Agreement if the Defaulting Party shall have failed to cure the failure to pay within
- 26-
three (3) business days following receipt of notice of such failure. For an Event of Default that
arises from a Party becoming bankrupt, the non-defaulting Party may, at its option, immediately
terminate this Agreement upon notice to the Defaulting Party.
(3) Upon the Event of Default and an expiration of any period to cure granted herein
the non-defaulting Party may, but has no obligation, to terminate this Agreement effective upon
notice to the Defaulting Party and may exercise all other rights and remedies available to the non-
defaulting Party under applicable law. Whether or not the non-defaulting Party elects to
terminate this Agreement, it may, in addition to other remedies provided for herein, pursue such
remedies as are available at law or in equity including suspension of its performance so long as
the Event of Default is continuing and has not been cured.
(c) Any right or remedy afforded to either Party under any provision of this Agreement on
account of the breach or default by the other Party is in addition to, and not in lieu of, all other
rights or remedies afforded to such Party under any other provisions of this Agreement, by law or
otherwise on account of the breach or default.
20.RELEASE BY A VISTA.
A vista releases Potlatch from any and all claims, losses, harm, liabilities, damages, costs
and expenses to the extent resulting from any disconnection, interruption, suspension
curtailment by Potlatch pursuant to terms of this Agreement.
21.RELEASE BY POTLATCH.
Potlatch releases Avista from any and all claims, losses , harm, liabilities, damages, costs
and expenses to the extent resulting from any disconnection, interruption, suspension or
curtailment by A vista pursuant to terms of this Agreement.
- 27-
22.GOVERNMENT AL A UTH 0 RITY .
This Agreement is subject to the Governmental Rules now or hereafter in effect, of all
Governmental Authorities having jurisdiction over the Facility, this Agreement, the Parties or
either of them. All Governmental Rules that are required to be incorporated in agreements of this
character are by this reference incorporated in this Agreement.
23.SEVERAL OBLIGATIONS.
Except where specifically stated in this Agreement to be otherwise, the duties, obligations
and liabilities of the Parties are intended to be several not joint or collective. This Agreement
shall not be interpreted or construed to create an association, joint venture or partnership between
the Parties or to impose any partnership obligations or liability upon either Party. Each Party
shall be individually and severally liable for its own obligations under this Agreement. Further,
neither Party shall have any rights, power or authority to enter into any agreement or undertaking
for or on behalf of, to act as or to be an agent or representative of, or to otherwise bind the other
Party..
24.IMPLEMENT A TION..
Each Party shall take such action (including, but not limited to, the execution
acknowledgement and delivery of documents) as may reasonably be requested by the other Party
for the implementation or continuing performance of this Agreement.
25.NON-WAIVER.
The failure of either Party to insist upon or enforce strict performance by the other Party
of any provision of this Agreement or to exercise any right under this Agreement shall not be
28 -
construed as a waiver or relinquishment to any extent of such Party s right to assert or rely upon
any such provision or right in that or any other instance; rather, the same shall be and remain in
full force and effect.
26.ENTIRE AGREEMENT AND AMENDMENT.
This Agreement together with its exhibits constitutes the entire agreement of the Parties
hereto and supersedes and replaces any prior agreements or understandings between said Parties,
entered into for the same or similar purposes, with the exception the Interconnection Agreement.
No change, amendment or modification of any provision of this Agreement shall be valid unless
set forth in a written amendment to this Agreement signed by both Parties.
27.VENUE. ATTORNEYS FEES AND CHOICE OF LAW
Venue of any action filed to enforce or interpret the provisions of this Agreement shall be
exclusively in the United States District Court for the District of Idaho or the District Court of
the State of Idaho encompassing Nez Perce County and the Parties irrevocably submit to the
jurisdiction of any such court. In the event of litigation to enforce the provisions of this
Agreement, the prevailing Party shall be entitled to reasonable costs and attorney s fees in
addition to any other relief allowed. Notwithstanding conflict of law rules, the laws of the State
of Idaho shall apply to disputes arising under this Agreement.
28.COMPLIANCE WITH LAWS.
Both Parties shall comply with all applicable laws and regulations of Governmental
Authorities having jurisdiction over the Facility and the operations of the Parties.
- 29-
29.CONFIDENTIALITY.
(a) Definition
. "
Confidential Information" shall mean any confidential, proprietary or trade
secret information or a plan, specification, pattern, procedure, design, device, list concept, policy
or compilation relating to the present or planned business of a Party, which is designated in good
faith as confidential by the Party supplying the information, whether conveyed orally,
electronically, in writing, through inspection or otherwise, except that the real-time in-plant data,
shall be considered Confidential Information without the need for designation.
(b)General Oblif!ations
(1) Each Party shall hold in confidence any and all Confidential Information unless:
(i) compelled to disclose such information by Governmental Rules or as otherwise provided for
in this Agreement; or (ii) to meet obligations imposed by Governmental Authority or by
membership in NERC or WECC (including other transmission providers). Information required
to be disclosed under (i) or (ii) above, does not, by itself, cause any information provided by
Potlatch to A vista to lose its confidentiality. To the extent it is necessary for either Party to
release or disclose such information to a third party in order to perform that Party s obligations
herein, such Party shall advise said third party of the confidentiality provisions of this Agreement
and use its best efforts to require said third party to agree in writing to comply with such
provisions.
(2) During the term of this Agreement, and for a period of three (3) years after the
expiration or termination of this Agreement, except as otherwise provided in this Section 29,
each Party shall hold in confidence and shall not disclose to any person Confidential Information.
(3) Each Party shall use at least the same standard of care to protect Confidential
Information it receives as it uses to protect its own Confidential Information from unauthorized
disclosure, publication or dissemination.
(c)Excluded Information. Confidential InformatiQn shall not include information that the
receiving Party can demonstrate: (i) is generally available to the public other than as a result of
disclosure by the receiving Party; (ii) was in the lawful possession of the receiving Party on a
non-confidential basis prior to receiving it from the disclosing Party; (iii) was supplied to the
- 30-
receiving Party without restriction by a third party, who, to the knowledge of the receiving party,
after due inquiry was under no obligation to the disclosing party to keep such information
confidential; (iv) was independently developed by the receiving party without reference to
Confidential Information of the disclosing party; (v) is, or becomes, publicly known, through no
wrongful act or omission of the receiving Party or Breach of this Agreement; or (vi) is required
in accordance with Subsection 29(d) of this Agreement, to be disclosed by any Governmental
Authority or is otherwise required to be disclosed by law or subpoena, or is necessary in any legal
proceeding establishing rights and obligations under this Agreement. Information designated as
Confidential Information will no longer be deemed confidential if the Party that designated the
information as confidential notifies the other Party that it no longer is confidential.
(d) Subpoena If a Governmental Authority or entity with the right, power, and apparent
authority to do so requests or requires either Party, by subpoena, oral deposition, interrogatories,
requests for production of documents, administrative order, or otherwise, to disclose Confidential
Information, that Party shall provide the other Party with prompt notice of such request(s) or
requirement(s) so that the other Party may seek an appropriate protective order or waive
compliance with the terms of this Agreement. The notifying Party shall have no obligation to
oppose or object to any attempt to obtain such production except to the extent requested to do so
by the disclosing Party and at the disclosing Party s expense. If either Party desires to object or
oppose such production, it must do so at its own expense. The disclosing Party may request a
protective order to prevent any Confidential Information from being made public.
Notwithstanding the absence of a protective order or waiver, the Party may disclose such
Confidential Information which, in the opinion of its counsel, the Party is legally compelled to
disclose. Each Party shall use reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded any Confidential Information so furnished.
(e) Use in Arbitration.Each Party may utilize information or documentation furnished by
the disclosing Party in any dispute resolution proceeding or in an administrative agency or court
of competent jurisdiction addressing any dispute arising under this Agreement, subject to a
confidentiality agreement with all participants (including, if applicable, any arbitrator) or a
protective order.
- 31 -
(I) Breach The Parties agree that monetary damages by themselves will be inadequate to
compensate a Party for the other Party s Breach of its obligations under this Section 29. Each
Party accordingly agrees that the other Party is entitled to equitable relief, by way of injunction or
otherwise, if it breaches or threatens to breach its obligations under this Section 29.
30.NOTICES All written legal notices required by this Agreement shall be mailed or
delivered as follows:
To A vista:A vista Corporation
Attention: Vice President, Energy Resources and Optimization
1411 East Mission
Spokane, W A 99202-2600
Mailing Address:
O. Box 3727
Spokane, W A 99220-3727
To Potlatch:Vice President, Pulp & Paperboard Division
Potlatch Corporation
805 Mill Road
P. O. Box 1016
Lewiston , ill 83501
Fax: [phone]
Vice President and General Counsel
Potlatch Corporation
601 West Riverside Ave., Suite 1100
Spokane, VV A 99201
Fax: [phone]
Changes in persons or addresses for submittal of written notices by a Party to this
Agreement shall be made in writing to the other Party and delivered in accordance with this
Section 30. Any verbal notice required hereby which affects the payments to be made hereunder
shall be confirmed in writing as promptly as practicable after the verbal notice is given.
- 32-
31.SETTLEMENT OF LITIGA TION.
Potlatch shall dismiss with prejudice its complaint in the United States District Court for
the District of Idaho, Case No. CVO2-543-EJL, and its complaint before the Idaho Public
Utilities Commission, Docket No. A VU-02-08, upon entry of a final order of the IPUC or
court of competent jurisdiction approving the Agreement.
32.EXHIBITS.
This Power Purchase Agreement includes the following exhibits, which are attached and
incorporated by reference herein:
Exhibit A
Exhibit B
- Metering
- Communications
Exhibit C - Description of the Facility
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the first date herein-above set forth:
POTLATCH CORPORATION A VISTA CORPORATION
:ff
5f1tlreX X
p~
~1(get ((Ml\~F~~~
P ~ pm- f5OOf fi Dl *:& mn
Name: Harry D. Seamans
Title: Vice President , Pulp &Paperboard Division
- 33 -
Exhibit A
Metering Specifications. Points and Locations
Utility Tie #1
Put!
QutI
Utilit
PutZ
Qut2
MeterMeter
LOAD LOAD !
Meter Meter Meter Meter
GEN #1 GEN #2 GEN #3 GEN #4
Simplified Metering Diagram
Definitions
Whenever used in this Exhibit the following terms shall have the following meanings:
1.1 "Net Facility Power (Gn). Expressed kW.
1.1.1 For the purposes of this Agreement, the Parties have agreed that
Facility Service Power is 125 kW per operating generating unit. Potlatch shall notify Avista
when substantial changes are made to the Facility that affect the amount of Facility Service
Power. Within a reasonable time the Parties shall select a mutually agreed upon third party
auditor and shall share equally the costs of such an audit of Facility Service Power. Unless
otherwise agreed, the value determined by such audit shall become the new amount for
Facility Service Power for the balance of the term of this Agreement.
1.1.
Losses are 200 kW.
For the purposes of this Agreement, the Parties have agreed that
2 "Power Generated" (Gt, Gz, G3, & G4). The electric power measured at each
operating unit expressed in kW.
3 "Energy Purchased" (Ep). The amount of energy that A vista purchases from
Potlatch generated by the Facility in kWh in each hour.
4 "Energy Sold" CBs
).
The amount of energy that Potlatch purchases from A vista
in kWh in each hour.
5 "Utility Tie Active Power (Put). The total active power delivered to Potlatch
measured at each of the two (2) Points of Delivery expressed in kW.
6 "Utility Tie Reactive Power" (Qut). The total reactive power delivered to
Potlatch, measured at each of the two (2) Points of Delivery expressed in kV AR.
Base Generation Amount" (Gb). Expressed in kW.
Base Period Demand" (DkVa-base). Expressed in kVa.
Excess Generation Amount" (Ge). Expressed in kW.
Excess Period Demand" (DkVa-excess). Expressed in kVa.
Incremental Generation Amount" (GJ Expressed in kW.
Nominal Generation Amount" (Gnom). Expressed in kW.
General Metering Formulas:
Put = Putt + PutZ (kW)
Qut = QutI + Qut2 (kV AR) Delivered to Potlatch
Gn = G1 + Gz + G3 + G4 - (125kW*(the number of operating generating units)) -
(Losses)
Gj = Gn - Gnom, where Gj ~ 0
Otherwise Gi = 0
Base Period Power Sales Formula (Time Period in which Base Generation Amount
has not been exceeded)
Energy Sold (Es) = (Put + Gn) * Time (kWh)
Base Period Demand (kVa)
kVa-baJe UI
)2
(QuI
Excess Period Power Sales Formula (Time Period After The Base Generation
Amount Is Exceeded) When The Maximum Excess Generation Amount Is Exceeded
Or When Potlatch Uses Excess Generation Amounts To Serve Load And A vista
Does Not Purchase Incremental Generation Amounts
Energy Sold (Es) = (Put)* Time (kWh)
Excess Period Demand (kVa)
kVa-excess
)2 (Qul
Excess Period Power Sales Formula (Time Period After The Base Generation
Amount Is Exceeded) When The Maximum Excess Generation Amount Is Exceeded
Or When Potlatch Uses Excess Generation Amounts To Serve Load And A vista
Purchases Incremental Generation Amounts
Energy Sold (Es) = (Put+GD* Time (kWh)
Excess Period Demand (kVa)
kVa-excess ul + G )2 +
(Qul
Excess Period Power Sales Formula (Time Period After The Base Generation
Amount Is Exceeded) When A vista Purchases Excess Generation Amounts from
Potlatch And A vista Does Not Purchase Incremental Generation Amounts
Energy Sold (Es) = (Put+ Gn)* Time (kWh)
Excess Period Demand (kVa)
kva-excess UI
)2 (Qul
Excess Period Power Sales Formula (Time Period After The Base Generation
Amount Is Exceeded) When A vista Purchases Excess Generation Amounts from
Potlatch And A vista Purchases Incremental Generation Amounts
Energy Sold (Es) = (Put+ 00)* Time (kWh)
Excess Period Demand (kVa)
kVa-excess ut
)2
(Qul
Base Period Power Purchase Formula
Base Generation Purchased (Gb) = Go * Time (kWh) where Gj = 0 or
Gb = Goom * Time (kWh) where Gj :;:. 0
Incremental Generation Purchased (Gj) = Go - Goom * Time (kWh) where Gj :;:. 0
otherwise Gj = 0
Excess Period Power Purchase Formula
Excess Generation Purchased (Ge) = Gn * Time (kWh) where Gj = 0
or Ge = Gnom where Gi :;:. 0
or Ge = 0 where Potlatch uses Excess Generation Amounts to serve Load
Incremental Generation Purchased (GD = Go - Gnom * Time (kWh) where Gj:;:' 0
otherwise Gj = 0
(b)
(c)
Exhibit B
Communications
Verbal Communications
(a)Verbal communications relating to electric power scheduling, generation or load level
changes between Potlatch and A vista shall be between the following personnel:
(1) Pre-Schedule (5:30 a.m. to approximately 1:30 p.m. on normal business days):
Avista Pre-Scheduler [phone]
Alternate Phone Number: [phone]
Potlatch Utility Supervisor [phone]
Alternate Phone Number: [phone]
(2)Real-Time Schedule (available 24 hours per day):
A vista Real-Time Scheduler [phone]
Potlatch Utility Supervisor [phone]
Alternate Phone Number: [phone]
During normal business hours, all verbal communications relating to interruptions and outages:
Avista System Operator [phone]
Alternate Phone Number: [phone]
Potlatch Utility Operator [phone]
Alternate Phone Number: [phone]
Outside of normal business hours (nights, weekends, and holidays), all verbal communications
relating to interruptions and outages shall take place between the following personnel:Avista System Operator [phone]
Alternate Phone Number: [phone]
Potlatch Utility Operator [phone]
Alternate Phone Number [phone]
Either Party may provide written notice to the other Party setting forth different contact numbers.
(a)
(b)
(a)
(b)
(a)
(b)
(a)
(b)
Exhibit C
Description of the Facilitv
Unit Number One Description
The unit number one turbine, General Electric serial number 197741, is a nine stage 3600 RPM,
600 PSIG steam turbine.
The unit number one generator, General Electric serial number 316X188, is nameplate rated at
500 kVA.
Unit Number Two Description
The unit number two turbine, General Electric serial number 83530, is a six stage 3600 RPM
600 PSIG steam turbine.
The unit number two generator, General Electric serial number 6784689, is nameplate rated at
188 kV A.
Unit Number Three Description
The unit number three turbine, General Electric serial number 197836, is a twelve stage, 3600
RPM, 1250 PSIG steam turbine.
The unit number three generator, General Electric serial number 316X374, is nameplate rated at
600 kV A (g) 30 PSIG H2.
Unit Number Four Description
The unit number four turbine, from ABB order number MB275226, is a 3600 RPM steam turbine.
The unit number four generator, ABB serial number HM300516, is nameplate rated at 66,916
kVA