20060831Joint petition approval agreement.pdf

THE LAW OFFICE OF
PAINE, HAMBLEN , COFFIN, BROOKE &MILLERLLP
R. Blair Strong
Partner
r. blair. strong(Q!painehamblen. com
717 WEST SPRAGUE AVENUE
SUITE 1200
SPOKANE, WASHINGTON 99201-3505
[phone]
FAX: [phone]
www.painehamblen.com
August , 2006
Ms. Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472 West Washington
Boise, Idaho 83702
RECEiVED
200& AUG 3 I AM 9:
IDAHO PUBLIC
UTILITIES COMMISSION
VIA FEDERAL EXPRESS
RE:Case No. A VU-O5-
Thompson River Cogen, LLC v. Avista Corporation
Dear Ms. Jewell:
Enclosed for filing please find the original and seven copies of the Joint Petition of
Thompson River Co-Gen, LLC and A vista Corporation in the above-referenced matter.
If you should have any questions, please do not hesitate to contact me. Please confonn
and return the additional copy in the enclosed self-addressed stamped envelope. Thank you for
your assistance.
Very truly yours
PAINE, HAMBLEN, COFFIN, BROOKE
& MILLER LLP
Y// ~
. / _
tc'Uf-
R. Blair Strong
I:\Spodocs\ll150\04137\1tr\OO441814.DOC
Enclosurecc: Service List
Siv.
Limited Liability ParmershiP
Offices in Spokane' Coeur d'Alene . Kennewick
For A vista Corporation
DA VID 1. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
A VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
RECEIVED
200& AUG 31 AM 9: 14
IDAHO PUBLIC
UTILITIES COMMISSION
For Thompson River Co-Gen, LLC
Peter J. Richardson
RICHARDSON & O'LEARY PLLC
515N.Street
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
peter~ri chardsonando I earv. com
MICHAELJ. UDA
44 W. 6TH A VB., STE. 200
HELENA, MT. 59601
TELEPHONE: [phone]
FACSIMILE: [phone]
muda~doneylaw.com
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MA ITER OF THE JOINT
PETITION OF A VISTA CORPORATION
AND THOMPSON RIVER CO-GEN
LLC FOR APPROVAL OF A POWER
PURCHASE AND SALE AGREEMENT
CASE NO. A VU-05-
JOINT PETITION OF
THOMPSON RIVER CO-GEN, LLC
AND A VISTA CORPORATION
Avista Corporation ("Avista ) and Thompson River Co-Gen, LLC ("TLC"
(Avista and TLC are referred to collectively as the "Parties ) hereby petition the Idaho
Public Utilities Commission ("Commission" or "IPUC") for an order approving the
JOINT PETITION - 1
Power Purchase and Sale Agreement between Avista Corporation and Thompson River
Co-Gen, LLC dated July, 2006 ("Agreement") which is attached as Exhibit I. In
support of this Petition, the Parties state as follows:
A vista 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.
TLC is a limited liability company created and organized under the laws
of the State of Montana that operates a thennal wood waste coal co-generation facility
power plant, at Thompson Falls, Montana (hereinafter referred to as the "Facility
TRC's Facility is capable of generating up to approximately 13 megawatts
of energy. The Facility is a Qualifying Facility ("QF") pursuant to the Public Utility
Regulatory Policies Act of 1978 , Pub. L. No. 95-617, 92 Stat. 3117 (1978) ("PURPA"
and 18 C.R. Part 292 (2003).
In January, 2005, Avista and TRC commenced exchanging
communications respecting a possible sale of power from the Facility to A vista.
The Parties were not able to reach agreement on a power purchase and
sale agreement and on August 30, 2005, TRC petitioned the Commission for an order
requiring Avista to purchase ofTRC's energy at the published non-levelized rates for
fueled projects that generate no more than 10 aMW monthly.
On or about March 13 , 2006, Deputy Attorney General Scott Woodbury
advised the Commission on behalf of the Commission Staff and the Parties that the
Parties had reached an agreement in principle that resolved the material issues in the case.
JOINT PETITION - 2
The Parties have now reached agreement on a power purchase and sale
agreement that settles the issues raised in the case and resolves other details of the
Agreement. In summary, the essential tenns of the Agreement are as follows:
(a)The Purchase and Sale Agreement is for a tenn of twenty (20)
years following the Operation Date of the Facility, unless tenninated earlier by tenns and
conditions contained in the Agreement. A vista may, at its sole discretion, tenninate the
Agreement should the Operation Date not be reached on or before October 31 , 2007.
(b)The Agreement shall not become effective until the Commission
detennines that the prices to be paid for electric power are just and reasonable, in the
public interest, and that the costs incurred by A vista for purchases of electric power from
Seller are legitimate expenses.
(c)Avista will be the sole purchaser ofTRC's generation, except in
exceptional circumstances where transmission is not available from the Facility to
Avista s service territory. For all Net Delivered Output received by Avista that is not
Surplus Energy, Avista shall pay $58.50 per megawatt-hour. For all Surplus Energy
received by Avista; Avista shall pay to the current month's Market Energy Cost per
megawatt-hour or the Net Delivered Output Purchase Price specified above, whichever is
lower. The power purchase rates are negotiated as a reasonable compromise to resolve
their dispute and do not represent a levelized rate calculated from published avoided cost
rates. Other tenns of the Agreement represent a settlement of other potential issues of
dispute.
WHEREFORE A vista and TRC respectfully request that the Commission issue
an order approving the Agreement, including provisions:
JOINT PETITION - 3
(1)approving the Agreement as a settlement of all known existing disputes
between the Parties raised in this case; and
(2)allowing deferral and recovery of all power purchase costs subject to
Avista s Idaho Power Cost Adjustment ("PCA") or as otherwise recovered by Avista
through base rates, and declaring that prices to be paid for energy and capacity are just
and reasonable, in the public interest, and that the cost incurred by A vista for purchasing
capacity and energy from TRC are legitimate expenses.
(3)approving the Agreement as satisfaction of the entirety of Avista
obligations under PURP A with regard to the Facility.
THE PARTIES FURTHER REQUEST that the Commission consider this
joint petition in accordance with Rule 201 , et seq. allowing for disposition by Modified
Procedure. IDAP A 31.01.01.201 et seq.
DATED this 25~ay of August, 2006.
Thompson River Co-Gen, LLC A vista Corporation
By:
o/
1/---
JOINT PETITION - 4
CERTIFICATE OF SERVICE
I hereby certify that on this ? oJ~ay of August, 2006, the Joint Petition of
Thompson River Co-Gen, LLC and A vista Corporation was sent to the following parties
as shown:
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 West Washington
Boise, Idaho 83702
iiewell~puc.state.id.
( ) U.S. Mail, Postage Prepaid
( ) Hand Delivered
(v)' Overnight Mail
( ) Facsimile
( ) Electronic Mail
Scott Woodbury
Idaho Public Utilities Commission
472 West Washington
Boise, Idaho 83702
swoodburv~puc. state. id. us
( ) U.S. Mail, Postage Prepaid
( ) Hand Delivered
(~Overnight Mail
( ) Facsimile
( ) Electronic Mail
Peter J. Richardson
Richardson & O'Leary PLLC
515 N. 27th St.
Boise, Idaho 83702
peter~ri chardsonando I eary. com
C..-)U.S. Mail , Postage Prepaid
( ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
(~ectronic Mail
( 'tiJ.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
(~lectronic Mail
Mike Uda
Doney Crowley Blumquist Payne & Uda
Suite 200
Diamond Block
Helena, Montana 59601
muda~doneylaw.com
R. Blair Strong
1:\Spodocs\11150\O4137\agree\OO438103.DOC
CERTIFICATE OF SERVICE
EXHIB IT
POWER PURCHASE AGREEMENT
BETWEEN
THOMPSON RIVER CO-GEN, LLC
FOR THE THOMPSON RIVER CO-GEN , LLC PROJECT
AND
AVISTA CORPORATION
INDEX
10.
DEFINITIONS......... ............ .......................
.......... ......................... ............... ..........
NO RELIANCE ON A VISTA................................................................................ 6
WARRANTIES .......................................... ............... .............................................
CONDITIONS TO ACCEPTANCE OF ENERGY............................................... 7
TERM OF AGREEMENT...................................................................................... 8
PURCHASE AND SALE OF POWER.................................................................. 9
SECURITY
.........................................................................................................
7.1 Business Insurance Prior to Operating the Facility...........
:.........................
Business Insurance Prior to Operation Date ............................................... 7.3 Engineering Certifications ......
..................... ..... .......... .................. ........."...
7.4 Lien and Step-In Rights .............................................................................. 15
INTERCONNECTION, TRANSMISSION AND DELNERY.............................
OPERATION ...,................ ..................................................... """"",,"""""""""" 19
MONTHLY, DAY-AHEAD AND REALTIME SCHEDULING
OF GENERATION.....................................................................................,........... 21
PURCHASE PRICE AND METHOD OF PAYMENT ......................................... 22
FORCE MAJEURE ........ ...
......... ..... .................. ............".......... ............... .............
INDEMNITY ......................................................................................................... 24
ASSIGNMENT....................................................................................................... 24
NO UNSPECIFIED THIRD PARTY BENEFICIARIES ......................................
DEFAULT
....... ............. ...." ..."... ..... ...... ............. ......
...............,......................... 25
ARBITRATION .............................................................................................,....... 26
RELEASE BY PROJECT DEVELOPER ..............................................................
GOVERNMENTAL AUTHORITY .......................................................................
EQUAL OPPORTlJNITY ...................................................................................... 27
SEVERAL OBLIGATIONS................................................................................... 27
IMPLEMENTATION ............................................................................................. 28
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
- 1 -
23.
24.
25.
26.
27.
28.
29.
30.
NON-AIVER....................................................................................................,.. 28
AMENDMENT....................................................................................................... 28
CHOICE OF LAWS ............................................................................................... 28
COMPLIANCE WITH LAWS...............................................................................
VENUE ..............................................................................."""","""""""'" 29
HEADINGS ......................................................................................................... 29
NOTICES ...................................................................................................,..... 29
EXHIBITS ........................................................................................"..........-.... 29
Exhibit A Communication and Reporting
Exhibit B Description of the Facility
Exhibit C FOIl11 of Engineer Certification of Design and Construction Adequacy
Exhibit D FOIl11 of Engineer s Certification of Operations and Maintenance Policy
- 2-
This Agreement, effective August~ 2006, is made by and between Avista
Corporation, a Washington corporation ("Avista ), and Thompson River Co-Gen, LLC ("Project
Developer ). A vista and Project Developer are sometimes referred to herein individually as a
Party" and collectively as the "Parties.
WITNESSETH:
WHEREAS , Project Developer is or shall be a Qualifying Facility within the meaning of
the Public Utility Regulatory Policies Act of 1978 and the rules and regulations thereunder;
WHEREAS, Project Developer owns, operates and maintains a thennal wood waste
coal co-generation facility power plant, as further identified in Exhibit B, hereto.
WHEREAS, Project Developer has entered into an agreement for the interconnection of
the Facility to NorthWestern Corporation, d/b/a NorthWestern Energy ("NorthWestern
WHEREAS , the Project Developer has entered or shall enter into an agreement
NorthWestern Transmission Agreement") under which NorthWestern shall provide finn
transmission of power to the Primary Point of Delivery;
WHEREAS, Avista is obligated under the Public Utility Regulatory Policies Act of 1978
and the rules and regulations of the IPUC to purchase power from Qualifying Facilities;
WHEREAS, the Energy Policy Act of 2005 requires that all costs associated with
purchase of power from Qualifying Facilities be recovered in the retail rates of the purchasing
utility;
WHEREAS, the Parties have negotiated a purchase and sale price for Net Delivered
Output, security, transmission and other provisions, to resolve a dispute between the Parties as to
the applicable avoided cost purchase rate and contract provisions applicable to the sale of power
from the Facility to Avista;
WHEREAS, A vista shall diligently prepare a filing and submit this Agreement to the
IPUC for approval after its execution by the Parties hereto;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Parties agree as follows.
- 3 -
DEFINITIONS
Whenever used in this Agreement and exhibits hereto, the following teffils shall have the
following meanings:
1.1 A2reement" means this Power Purchase Agreement, including all exhibits, and
any written amendments.
1.2 Alternative Point of Delivery" means any Bonneville Power Administration
transmission interconnection with A vista s transmission system at times when A vista is able to
receive Net Delivered Output at that location.
1.3 aMW" means average MW.
1.4 A vista
, "
Project Developer
, "
Party" and "Parties " shaH have their
respective meanings set forth above.
1.5 Facility" means the electric generating facilities, including all equipment and
structures necessary to generate and supply power, more particularly described at Exhibit B
(Description of the Facility).
1.6 "Facility Service Power" means the electric power used by the Facility during
its operation for facility service power, including, but not necessarily limited to. pumping,
generator excitation, cooling or otherwise related to the production of electricity by the Facility.
1.7 FERC" means the Federal Energy Regulatory Commission.
1.8 Independent En2ineerin2 Certifications" means certifications provided by a
professional engineer registered in Montana, Washington or Idaho, who has no direct or indirect
legal or equitable, ownership interest in the Facility.
Interconnection A2reement" means the agreement between Project Developer
and NorthWestern by which Net Available Output may be delivered into the transmission
system of NorthWestern at the Point ofInterconnection.
1.10 "Interconnection Facilities " means all facilities required to interconnect the
Facility for delivery of Net Available Output to the NorthWestern transmission system including
connection, transfonnation, switching, relaying and safety equipment. Interconnection Facilities
shall also include all telemetry, metering, cellular telephone, and/or communication equipment
required under this Agreement regardless of location.
1.11 IPDC" means the Idaho Public Utilities Commission or its successor.
1.12 " means megawatt. One thousand kilowatts equals one megawatt.
- 4-
1.13 "Market Enerey Cost" means eighty-five percent (85%) of the weighted
average of the daily On-Peak and Off-Peak Dow Jones Mid-Columbia Index (Dow Jones Mid-
Index) prices for non-firm energy. If the Dow Jones Mid-Columbia Index price is discontinued
by the reporting agency, both Parties shall mutually agree upon a replacement index, which is
similar to the Dow Jones Mid-C Index. The selected replacement index will be consistent with
other similar agreements and a commonly used index by the electric industry.
1.14 "Net Available Output" means all electric energy generated by the Facility, net
of Facility Service Power, net of power delivered to Thompson River Lumber Company, an
adjacent separately owned business, net of transformation losses..
1.15 "Net Delivered Output" means the amount of Net Available Output net of any
transmission losses associated with the scheduling and delivery of electric energy to A vista at the
Point of Delivery that is scheduled to and accepted at the Point of Delivery.
1.16 "Net Delivered Output Cost" means the rate in dollars per megawatt-hour, to be
paid by Avista for all Net Delivered Output, subject to any limitations under this Agreement.
The Net Delivered Output Cost is specified in Section 11.
1.17 Off-Peak" means all hours other than On-Peak hours.
1.18 "On-Peak" means the hours ending 0700 through 2200 Pacific Prevailing time
Monday through Sunday, including NERC holidays.
1.19 "Operating Year" means each 12-month period from January 1 through
December 31.
1.20 "Operation Date means the date, as confirmed in writing by A vista, upon
which the energy deliveries reliably commence. Project Developer shall have the duty to obtain
the confinnation from A vista. Such confirmation shall not be unreasonably withheld by A vista.
The Operation Date shall be the first day of the month following the later ofthe following dates:
20.1 The date following the day during which the Facility has reached a degree
of completion and reliability, such that it is capable of operating and continuously
delivering electric power to A vista.
1.20.2 The day following the day that Avista has verified that Project Developer
has fulfilled all of the conditions required by Sections 3 and 4, of the Agreement.
1.21 "Point of Delivery" means the Primary Point of Delivery, the Secondary Point of
Delivery or any Alternate Point of Delivery.
1.22 "Point of Interconnection" means the physical and metering interconnection of
the Facility to the NorthWestern transmission system at the high side of the 13.2kV/115kV step-
up transfonner at the Thompson River Co-Gen Substation.
- 5 -
23 "Primary Point of Delivery" means the point of interconnection between the
transmission systems of A vista and NorthWestern in Idaho at A vista s Burke substation.
1.24 "Prudent Utility Practices " means the practices , methods, and acts, including
but not limited to practices, methods, and acts engaged in or approved by a significant portion of
the electric power generation and transmission industry, in the exercise of reasonable judgment
in the light of the facts known or that should have been known at the time a decision was made
that would have been expected to accomplish the desired result in a manner consistent with law
regulation, reliability, safety, environmental protection, economy, and expedition.
1.25 "Scheduled Outage" means any outage which is scheduled by the Project
Developer to remove electrical or mechanical equipment from service for repair, replacement
maintenance, safety or any other reason, and which thereby limits the generating capability of the
Facility to less than its full tested capability.
26 "Secondary Point of Delivery" means A vista s transmission interconnection
with the NorthWestern transmission system at Hot Springs, Montana, at times when Avista is
able to receive Net Delivered Output at that location.
1.27 "Surplus Energy" means: (1) Net Delivered Output produced by the Project
Developer s Facility and delivered to the Avista electrical system during the month which
exceeds 110% of the monthly Net Delivered Output estimate for the coITesponding month
specified in Section 6.3; (2) If the Net Delivered Output produced by the Project Developer
Facility and delivered to the A vista electrical system during the month is less than 90% of the
monthly Net Delivered Output estimate for the coITesponding month specified in Section 6.
then all Net Delivered Output delivered by the Facility to the Avista electrical system for that
given month, or (3) All Net Delivered Output produced by the Project Developer s Facility and
delivered by the Facility to the A vista electric system prior to the Operation Date. For
clarification, Net Delivered Output that is Surplus Energy pursuant to this definition shall be sold
to A vista at the price set forth in Section 11.
1.28 "Transmitting Entity" means NorthWestern or its successors or assignees and
other third parties as necessary to provide transmission and interconnection service to deliver
power from the Facility to Avista s transmission system at the Point of Delivery.
1.29 "Transmission Agreements " means agreements entered into between Project
Developer and Transmitting Entities.
NO RELIANCE ON A VISTA
Project Developer Independent Investigation. Project Developer warrants and
represents to A vista that in entering into this Agreement and the undertaking by Project
Developer of the obligations set forth herein, Project Developer has investigated and determined
that it is capable of performing hereunder and has not relied upon the advice, experience or
expertise of A vista in connection with the transactions contemplated by this Agreement.
- 6 -
Project Developer Experts . All professionals or experts including, but not limited
, engineers, attorneys or accountants, that Project Developer may have consulted or relied on in
undertaking the transactions contemplated by this Agreement have been solely those of Project
Developer.
WARRANTIES
No WaITanty by Avista. Any review, acceptance or failure to review Project
Developer s design, specifications, equipment or facilities shall not be an endorsement or a
confirmation by_Avista, and Avista makes no waITanties , expressed or implied, regarding any
aspect of Project Developer s design, specifications, equipment or facilities, including, but not
limited to~ safety, durability, reliability, strength, capacity, adequacy or economic feasibility.
Qualifying Facility Status. Project Developer waITants that the Facility is a
Qualifying Facility , as that term is used and defined in 18 CFR ~292.207. After initial
qualification, Project Developer shall take such steps as may be required to adequately maintain
the Facility s Qualifying Facility status during the term of this Agreement, and Project
Developer s failure to adequately maintain Qualifying Facility status will be a material breach of
or default under this Agreement. A vista reserves the right to review the Project Developer
Qualifying Facility status and associated support and compliance documents at any time during
the term of this Agreement.
Previous Power Sale Agreement.The Project Developer waITants that its
obligations have terminated under a previous "Co-Generation Power Sale Agreement" between
the Project Developer and NorthWestem Energy, LLc.
CONDITIONS TO ACCEPTANCE OF ENERGY
Prior to the Project Developer requesting an Operation Date and an Operation Date being
assigned for this Agreement as specified in Section 1.20, the following actions must have occurred:
Licenses, Permits and Approvals. Project Developer shall have submitted proof to
Avista that all licenses, permits or approvals necessary for Project Developer s operations have
been obtained from applicable federal, state or local authorities, including, but not limited to
evidence of compliance with Subpart B, 18 CFR 292.207.
Opinion of Counsel. Project Developer shall have submitted to Avista an Opinion
Letter signed by an attorney admitted to practice and in good standing in the State ofldaho
Montana or Washington providing an opinion that Project Developer s licenses, permits and
approvals as set forth in Section 4.1 above are legally and validly issued, are held in the name of the
Project Developer, and based on a reasonable independent review of Project test operations by a
qualified engineer, counsel is of the opinion that Project Developer is in substantial compliance with
said permits as of the date of the Opinion Letter. The Opinion will be in a form acceptable to A vista
- 7 -
and will acknowledge that the attorney rendering the opinion understands that A vista is relying on
said opinion. A vista s acceptance of the form shall not be unreasonably withheld. The Opin.ion
Letter will be governed by and shall be interpreted in accordance with the legal opinion accord of the
American Bar Association Section of Business Law (1991).
Security. Project Developer shall have complied with Section 7, Security.
4.4 Transmission. Project Developer shall have provided Avista with a copies of the
firm transmission agreements providing for firm transmission of Net Delivered Output from the
Facility's Point oflnterconnection to the Primary Point of Delivery executed by the Project
Developer and the Transmitting Entity in a form acceptable to A vista. A vista s acceptance shall not
be umeasonably withheld.
Written Acceptance. Project Developer shall have obtained written confirmation
from A vista that all conditions to acceptance of electric energy have been fulfilled. Such written
confirmation shall not be unreasonably withheld by A vista.
WUC Approval. The IPUC shall have issued a final order approving this Agreement
and detennined that costs to be incurred by Avista in purchasing electric energy pursuant to the
Agreement are prudent for purposes of detennining A vista s retail rates in Idaho. A vista shall utilize
best efforts to obtain such approval.
Engineer s Certifications - This Facility is cuaently interconnected to the
NorthWestern system. The Project Developer shall have submitted an Engineer s Certification of
Operations and Maintenance ("O&M") Policy as described in IPUC Order No. 21690. This
certificate will be in the form specified in Appendix C but may be modified to the extent
necessary to recognize the different engineering disciplines providing the certificates.
Initial Year Monthly Net Delivered Outvut Estimates. Project Developer shall
have provided to A vista the Initial Year Monthly Net Delivered Output Estimates in accordance
with Section 6.
TERM OF AGREEMENT
This Agreement shall become effective on the date when all ofthe following
conditions are met:
1.1 Agreement has been executed by both Parties;
1.2 Project Developer has received FERC Qualifying Facility Certification;
1.3 Approval by the IPUC ("Effective Date ); provided, however, this
Agreement shall not become effective until the IPUC has determined that the prices to be
paid for electric power are just and reasonable, in the public interest, and that the costs
incurred by A vista for purchases of electric power from Seller are legitimate expenses.
- 8-
The term of the Agreement shall be for twenty (20) years following the Operation
Date, unless terminated earlier by terms and conditions contained herein.
5.3 Unless excused by Force Majeure, A vista may terminate this Agreement on thirty
(30) days prior written notice if Project Developer fails to deliver Net Delivered Output equal to
600 megawatt-hours during any rolling period of twenty-four (24) consecutive months.
5.4 Notwithstanding any other provision of this Agreement, A vista may, at its sole
discretion, terminate this Agreement should the Operation Date not be reached on or before
October 31 , 2007.
PURCHASE AND SALE OF POWER
Project Developer shall sell and deliver and A vista shall purchase all Net
Delivered Output.
The Facility is designed, and the Project Developer shall operate the Facility in a
manner such that the hourly scheduled amount of Net Delivered Output does not exceed 13 MW
in any hour. Avista shall have the right, but not the obligation, to purchase any Net Delivered
Output from the Facility in excess of 13 MW in any hour. The maximum annual amount
electric power that Avista is obligated to purchase hereunder shall be 105 000 megawatt-hours in
any Operating Year.
Net Delivered Output Amounts.
Initial Net Delivered Output Estimates. Project Developer shall provide to
A vista Net Delivered Output estimates for each of the twelve consecutive months that
begin with the month containing the Operation Date, counting the month during which
the Operation Date occurs as month one (Initial Year Monthly Net Delivered Output
Estimates). Project Developer shall provide to Avista such Initial Year Monthly Net
Delivered Output Estimates by written notice in accordance with Section 29 no sooner
than twenty (20) calendar days prior to the Operation Date and no later than seven (7)
calendar days prior to the Operation Date.
Subsequent Monthly Net Delivered Output Estimates. At the end of
month nine following the Operation Date, and at the end of every third month thereafter
Project Developer shall provide to Avista Net Delivered Output estimates pertaining to
each of the additional consecutive three months for which Project Developer has not yet
delivered to Avista Net Delivered Output estimates, so that Project Developer shall have
provided in advance on a rolling basis to Avista six months of Net Delivered Output
estimates. Project Developer shall provide such Net Delivered Output estimates to
- 9-
Avista by written notice in accordance with Section 29, no later than 5:00 p.m. of the last
business day of the month during which they are required to be provided.
Content orNet Delivered Output Estimates . All Net Delivered Output
estimates shall be expressed in kilowatt-hours by month.
3.4 Failure to Provide Net Delivered Output Estimates. If the Project
Developer fails to provide to Avista Net Delivered Output estimates when required herein
pertaining to any month or months, Avista shall detennine the Net Delivered Output
estimates pertaining to such month or months, and the Net Delivered Output estimates
shall be binding for purposes of the Agreement as though they were prepared by Project
Developer and provided to A vista as required by the Agreement..
3.5 Project Developer s Revisions of Net Delivered Output Estimates. At the
end of month three following the Operation Date, and at the end of every third month
thereafter, counting the month during which the Operation Date occurs as month one
Project Developer may provide Avista with revisions to Net Delivered Output estimates
previously provided to Avista, except Project Developer may not revise Net Delivered
Output estimates that pertain to the three consecutive months that immediately follow the
month during which Project Developer provides Avista notice of the revisions. If Project
Developer elects to revise Net Delivered Output estimates previously provided to A vista
then Project Developer must provide to A vista the revised Net Delivered Output
estimates by written notice in accordance with Section 29, no later than 5:00 p.m. of the
last business day of the month during which they are required to be provided.
Avista Adjustment of Net Delivered Output Estimate. If Avista is excused
from accepting the Project Developer s Net Delivered Output as specified in Section 9.2
or if the Project Developer declares a Suspension of Energy Deliveries as specified in
Section 9., and the Project Developer declared Suspension of Energy Deliveries is
accepted by Avista, the Net Delivered Output estimate as specified in Section 6.3 for the
specific month in which the reduction or suspension under Section 9.2 or 9.3 occurs will
be reduced in accordance with the following:
Where:
NDO=Current Month's Net Delivered Output estimate
(b)
If Avista is excused from accepting the Project Developer s Net
Delivered Output as specified in Section 9.2 this value will be
equal to the percentage of curtailment as specified by A vista
multiplied by the TOU as defined below.
If the Project Developer declares a Suspension of Net Delivered
Output as specified in Section 9.3 this value will be the sum of the
individual generation units size ratings as specified in Exhibit B
that are impacted by the circumstances causing the Project
Developer to declare a Suspension of Net Delivered Output.
sou = (a)
- 10-
TOO Sum of all of the individual generator ratings of the generation
units at this Facility as specified in Exhibit B of this Agreement.
RSH=Actual hours the Facility s Net Delivered Output was either
reduced or suspended under Sections 9.2 or 9.
TH=Actual total hours in the current month
Resulting fonnula being:
Adjusted
Net Delivered
Output
== NDO
- ( (
SOU x NDO ) X RSH
) )
TOU
This Adjusted Net Delivered Output estimate will be used in applicable Surplus Energy
calculations for only the specific month in which Avista was excused from accepting the
Net Delivered Output or the Project Developer declared a Suspension of Energy
SECURITY
Business Insurance Prior to Operating the Facility. Prior to operating the Facility,
Project Developer shall obtain and maintain insurance coverage of all of the following types with
limits as shown:
Minimum Coverage Limits Maximum Deductible
Liability $1 million, per occurrence Consistent with CUITent
insurance utility practices
for a similar property
Commercial general liability insurance for bodily injury and property
damage with limits equal to $1 000 000 for each occurrence, combined single limit. The
deductible for such insurance shall be consistent with current insurance utility practices
for a similar property.
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Business Insurance Prior to Operation Date. Prior to the Operation date
Project Developer shall obtain and maintain insurance coverage of all the following types with
limits as shown:
Type Minimum Coverage Limits Maximum Deductible
Catastrophic Perils 80% of plant cost Consistent with current
insurance utility practices
for a similar property
Boiler/Machinery 80% of equipment cost Consistent with current
insurance utility practices
for a similar property
Loss of Income (Business
Interruption)
Up to 20% annual Consistent with current
insurance utility practices
for a similar property
All Risk Property 80% of Facility cost Consistent with current
insurance utility practices
for a similar property.
All risk property insurance with minimum limits not less than eighty
percent (80%) of the total cost of the Facility. This insurance shall be written on a
replacement cost basis and shall include the following:
1.1 Standard fire policy;
1.2 Extended coverage endorsement; and
1.3 Vandalism and malicious mischief endorsement.
1.4 The deductible for this coverage shall be consistent with cunent
insurance utility practices for a similar property.
Boiler and machinery insurance with minimum limits not less than eighty
percent (80%) of the total cost of the equipment covered in Section 7.1 below. This
insurance shall include the following:
All boiler and machinery coverage must be written on a
comprehensive form" basis to provide coverage against the sudden and
. accidental breakdown of all boilers, machinery and electrical equipment, turbines
generators and switchgear;
cost basis;
Coverage under this coverage must be written on a replacement
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The deductible for this coverage shall be consistent with CUITent
insurance utility practices for a similar property.
Earthquake and flood (catastrophic perils) insurance with limits not less
than eighty percent (80%) of the total cost of the Facility. The deductible for this
insurance shall be consistent with CUITent insurance utility practices for a similar
property.
2.4 Business interruption (loss of income) insurance not less than twenty
percent (20%) of the Facility s estimated gross annual revenue. This insurance shall
include the following:
2.4.Coverage shaH include Project Developer s loss of earnings when
business operations are curtailed or suspended because of a loss due to an insured
peril.
2.4.Coverage may be written on an actual loss sustained basis.
2.4.This insurance must be endorsed to both the All Risk Property
Insurance policy and the Boiler and Machinery Insurance Policy.
2.4.4 The deductible for this insurance shall be consistent with CUITent
insurance utility practices for a similar property.
2.4.5 The estimated gross daily revenue and estimated gross annual
revenue shall be computed on the basis of the estimated kilowatt-hour production.
2.5 The form of all insurance policies, and the insurance companies issuing
the policies shall be acceptable to Avista, provided however, that any approval by Avista
shall not be unreasonably withheld, and must have an A.M. Best rating of A- or better.
Project Developer shall provide copies of all insurance policies to A vista as proof of
insurance. All insurance policies required to fulfill the requirements of Sections 7.1 and
2 shall include language requiring that any notice of cancellation or notice of change in
policy terms be sent to Avista by the insurance carrieres) at least sixty (60) days prior to
any change or termination of the policies.
In the event Project Developer fails to pay, when due, any premium
required to maintain the effectiveness of any insurance policy required under Sections 7.
and 7.2, A vista may at its option, pay such premiums. In the event that A vista exercises
its option to pay such premiums, the amount of such payments shall be immediately due
and payable to Avista by Project Developer. Payment shall be made pursuant to
Section 11.
7 A vista shall be named as an additional insured on all insurance policies
subordinate only to the Facility s primary lenders and shall also be named an additional
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loss payee on the policies for all risk property insurance, boiler and machinery insurance
catastrophic perils insurance, and business interruption insurance.
In the event of catastrophic or boiler/machinery failure, Project
Developer shall promptly notify A vista of such loss to the Facility. A vista may
make proof of loss if Project Developer fails to do so within forty-five (45) days
prior to the final day that the applicable insurance policy requires that the casualty
be reported to the insurer, or if the applicable insurance does not allow for forty-
five (45) or more days in which to report a casualty, fifteen (15) days prior to the
final day that the applicable insurance policy requires that a casualty be reported
to the insurer.
Unless the parties agree otherwise, Project Developer shall repair
or replace the damaged or destroyed Facility. Proceeds from said casualty
insurance policies shall be paid into an account with Avista and Project Developer
as joint signatories. Disbursements from such account shall be used first for
repairing or replacing the insured property unless otherwise agreed. Upon
completion of repairs or replacement of the Facility, the balance, including
accumulated interest, if any, remaining in such account shall become property of
Project Developer and shall promptly be released to Project Developer byA vista
subject to the rights of primary lenders.
In the event that the Parties agree the insured property cannot be
economically repaired or replaced, the amount, including accumulated interest, in
the joint account described in Section 7.2 above, shall be used first to satisfy
the Project Developer s obligations to primary lenders. Second, any balance shall
then be utilized to satisfy the Project Developer s obligations to Avista, if any, as
detennined herein. Third, any remaining balance, including accumulated interest
if any, remaining in such account shall become property of the Project Developer
and shall be promptly released to Project Developer by Avista.
At the end of every fifth Operating Year following the Operation Date, the
minimum coverage limits for the liability, catastrophic, and boiler/machinery insurance
shall be adjusted by increasing or decreasing the underlying original plant cost to reflect
changes in the appropriate regional heavy construction deflator as published by the
United States Department of Commerce.
All business insurance coverage listed in Sections 7.1 and 7.2 must remain
in place at all times during the contract tenn. Project Developer shall annually submit
evidence of such insurance coverages. Should any of the coverages above lapse, Project
Developer shall immediately notify A vista in writing of such lapse of coverage.
Engineering Certifications. Prior to the Operation Date, Project Developer shall
obtain and provide to Avista Independent Engineering Certifications as follows:
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as to the adequacy of the design and construction of the Facility to operate
reliably during the term of the Agreement in substantially the form shown in Exhibit C;
and
as to the adequacy of the Operations and Maintenance Policy substantially
in the form shown in Exhibit D.
7.4 Lien and Step-In Rights
7.4.Lien Rights. Prior to the Operation Date, Project Developer shall grant to
A vista lien rights in the Facility securing Project Developer s obligations under this Agreement
subordinate only to the rights of primary lenders.
7.4.1.1 Upon completion of the Facility, Project Developer shall deliver
a mortgagee s policy of title insurance in the face amount of$25 500 00O obtained
at Project Developer s expense insuring A vista s lien as prior to all other liens and
encumbrances, except a first mortgage lien granted by Project Developer in an
amount not to exceed $25 500 000.
1.2 Before Avista shall become obligated to make any payment to
Project Developer hereunder, Project Developer shall deliver a commitment from
primary lenders agreeing that in the event of a default under any primary lender
mortgage, such primary lenders will provide A vista with notice of the default and
an opportunity to cure the default. Project Developer agrees that an uncured
default under such mortgages shall also constitute a default under this Agreement.
7.4.1.3 Project Developer shall also execute and deliver to Avista such
financing statements, fixture filings, or other documents necessary to grant A vista
security interests in all personal property, fixtures, contract rights, water rights
permits, licenses, real property interests, or other rights or privileges which
Project Developer has obtained or will obtain in conjunction with the construction
or operation of the Facility, subject only to the rights of primary lenders to the
Project, and further subject to the limitation that the total value of any or all
security interests granted to A vista by Project Developer shall not exceed
$25 500 000.
7.4.1.4 Upon any default by Project Developer hereunder, A vista shall
have all rights and remedies available at law or in equity to holders of secured
interests in personal property or liens on real property, in addition to all rights and
remedies specifically provided for herein. A vista, at its option, may advance
sums to cure any default under Lender s first mortgage lien, and all such sums
advanced by Avista shall be secured by all security interests given by Project
Developer:. to A vista under this Agreement.
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7.4.1.5 A vista shall execute such documents as are necessary to release
its security interests in Project Developer s property at the completion of Project
Developer s obligations under this Agreement.
7.4.Step-In Ri2.hts . In addition to all of Avista s other rights hereunder, upon
the occurrence of an uncured material non-monetary breach of or default under this
Agreement by Project Developer, and provided that the operation of the Project has not
been assumed by any primary lender pursuant to financing documents applicable to such
lender, A vista shall have the right, but under no circumstances the obligation, to assume
operational responsibility for the Project in the place and stead and as agent for
Project Developer in order to complete construction, continue operation or complete any
necessary repairs so as to preserve Avista s right to purchase Net Delivered Output;
provided, however, that Avista s rights under this Section 7.4.2 shall be subordinate to the
rights of any primary lender. Avista shall give written notice to Project Developer and
primary lenders at least thirty (30) days in advance of the contemplated exercise of its
rights under this Section 7.4.2. Project Developer shall affirmatively cooperate to deliver
the Project and means of operation of the Project to Avista during the thirty (30) day
period. In no event shall Avista s election to operate the Project (in the case of
uncured material non-monetary breach of or default under this Agreement on the part
Project Developer) be deemed to be a transfer of title or a transfer of Project Developer
obligations as owner thereof. In the exercise of such operating rights, A vista shall be
Project Developer s agent, and all liabilities incurred in the operation of the Project shall
be incurred for Project Developer s account without liability to A vista, except for
liabilities incurred by Project Developer as a result of the gross negligence or willful
misconduct of Avista. For the purpose of implementing the foregoing, Project Developer
hereby appoints Avista as Project Developer s attorney in-fact, with power to operate the
Project if A vista elects to exercise such operating rights. This power being coupled with
an interest is irrevocable until this Agreement is terminated.
7.4.During any period that Avista is exercising the step-in rights
A vista shall comply with all applicable laws and shall operate and maintain the
Project in compliance with Prudent Utility Practice in the exercise of the step-
rights granted in this Subsection 7.4.
7.4.During any period that A vista is exercising the step-in rights
granted pursuant to this Subsection 7.4., A vista shall hold all amounts it would
otherwise pay to Project Developer hereunder. A vista shall distribute revenue
from such withheld payments in the following priority:
(i)first, in payment of all of the reasonable operating costs of the
Project;
(ii)second, in payment of insurance premiums to maintain insurance
as required by Subsections 7.1 and 7.2;
(iii)third, in.payment of real estate taxes assessed against the Project;
- 16 -
(iv)
(v)
(vi)
7.4.
(i)
(ii)
fourth, to primary lenders all then-due regularly-scheduled, non-
accelerated payments; and
fifth, to A vista in reimbursement for all reasonable expenses
actually incurred in exercising its step-in rights;
sixth, the balance to Project Developer; provided, however, in the
event of an acceleration of payment obligations by primary lenders
such revenue shall be distributed as directed by such primary
lenders.
During the period A vista exercises such step-in rights
Project Developer shall have no right or obligation to operate the
Project, nor any right to exercise any rights inconsistent with the
exercise by A vista of such rights, or any right to receive any
payment otherwise due from A vista in connection with the Project
other than in accordance with Subsection 7.4., and
Project Developer shall perform all steps reasonably requested by
A vista to facilitate the exercise by A vista of such step-in rights.
7.4.2.4 On each occasion on which Avista elects to exercise such step-
rights, A vista may exercise such rights until the later of:
(i)
(ii)
thirty (30) days after the date the uncured material non-monetary
breach of or default under this Agreement which gave rise to
A vista s right to exercise such rights, if any, is cured, or
the first anniversary of the date on which Avista began such
exercise of such rights; provided, however, A vista may elect at any
time to terminate its then exercise of such rights upon the date
specified by Avista in a notice to Project Developer (with a copy to
primary lenders) as the date on which it will cease exercising such
rights, which notice shall be given at least sixty (60) days before
such date (except to the extent inconsistent with clause (i), above),
unless such shorter period is approved by primary lenders;
provided, further, however, that such notice may be given no less
than ten (10) days before such date in the event primary lenders
accelerate Project Developer s payment obligations under the
applicable financing documents. Upon receipt of notice of
A vista s intent to tenninate its exercise of such rights, Project
Developer must notify A vista of its ability to operate the Project or
to permit A vista to exercise such other rights as A vista may have
under this Agreement.
- 17 -
7.4.Subordinate Riehts. A vista s rights under Section 7 shall be construed as
being subordinate only to the rights of primary lenders to the extent set forth in
Section 7.4.
INTERCONNECTION. TRANSMISSION AND DELIVERY
Project Developer shall design, construct, install, own, operate and maintain the
Interconnection Facilities so as to allow safe, reliable generation and delivery of Net Delivered
Output to A vista over the full term of the Agreement. Project Developer shall not consent to any
modification of the finn transmission agreement referred to in Section 4.4 without A vista
advance written approval, which approval shall not be unreasonably withheld. The Project
Developer shall bear the full responsibility and expense for transmission and all associated
ancillary services and losses from the Point of Interconnection to the Primary Point of Delivery,
Secondary Point of Delivery, and Alternate Point of Delivery.
In addition to the above costs where applicable, Project Developer shall reimburse
A vista for any costs or expenses, if any, incurred by A vista in accordance with the Transmission
Agreements including, but not necessarily limited to, any charges, reimbursable expenses or
other amounts payable by A vista to the Transmitting Entities. Further, to the fullest extent
permitted by applicable law, Project Developer releases and shall defend, indemnify and hold
harmless, A vista ITom all claims, losses, hann, liabilities, damages, costs, and expenses
including, but not necessarily limited to, reasonable attorneys' fees , arising out of any act or
omission of Project Developer in connection with the Transmission Agreements, including, but
not limited to, any breach of or default under any of the Transmission Agreements by Project
Developer.
A vista may require Project Developer to curtail, interrupt or reduce delivery of
Net Delivered Output to any Point of Delivery if, in accordance with Section 9., Avista
detennines that curtailment, interruption or reduction is necessary because of force majeure or to
protect persons and property from injury or damage, or because of emergencies, necessary
system maintenance, system modification or special operating circumstances. A vista shall use
its reasonable efforts to keep any period of curtailment, interruption, or reduction to a minimum.
In order not to interfere unreasonably with Project Developer operations, A vista shall give
Project Developer reasonable prior notice of any curtailment, interruption, or reduction, the
reason for its occurrence and its probable duration.
8.4 In the event that Project Developer is required to curtail, interrupt or reduce
deliveries of electric energy to the Primary Point of Delivery, Project Developer shall arrange at
its own expense to deliver Net Delivered Output to the Secondary Point of Delivery, and Avista
shall use reasonable commercial efforts to accept Net Delivered Output at such point.
8.5 In the event that Project Developer is unable to arrange delivery of electric energy
to the Primary Point of Delivery or Secondary Point of Delivery, Project Developer shall arrange
- 18 -
at its own expense to deliver Net Delivered Output to an Alternate Point of Delivery, and A vista
shall use reasonable commercial efforts to accept Net Delivered Output at such point.
The Project Developer shall arrange for the provision of all required generation
reserves and any other ancillary services associated with generation as are now or hereafter may
be required by the Western Electricity Coordinating Council (WECC) and/or as required by any
other governing agency or industry standard.
Avista is an intended third part beneficiary of the Transmission Agreement and a
default by Project Developer under the Transmission Agreement will be a default under this
Agreement.
OPERA TION
Communications and Reporting. Avista and the Project Developer shall maintain
appropriate operating communications through A vista s Designated Dispatch Facility in
accordance with Exhibit A of this Agreement.
Excuse From Acceptance of Delivery of Power.
1 A vista may interrupt, suspend or curtail delivery, receipt or acceptance of
delivery of power at the Primary Point of Delivery, the Secondary Point of Delivery, or
any Alternative Point of Delivery, if A vista reasonably determines consistent with
Prudent Utility Practice that the failure to do so:
1.1 May endanger any person or property, or Avista s electric system
or any electric system with which A vista s system is interconnected;
1.2 May cause, or contribute to, an imminent significant disruption of
electric service to A vista s or another utility s customers;
1.3 May interfere with any construction, installation, inspection
testing, repair, replacement, improvement, alteration, modification, operation, use
or maintenance of, or addition to, A vista s electric system or other property of
A vista.
Avista shall promptly notify Project Developer of the reasons for any such
interruption, suspension or curtailment provided for in Section 9., above. A vista shall
use reasonable efforts to limit the duration of any such disconnection, interruption
suspension or curtailment. In the event of any such disconnection, interruption
suspension or curtailment at the Point of Delivery, Project Developer shall use reasonable
efforts to arrange for delivery of Net Delivered Output to the Secondary Point of
Delivery. In the event of any such disconnection, interruption, suspension or curtailment
at the secondary Point of Delivery, Project Developer shall use reasonable efforts to
alTange for delivery of Net Delivered Output to an Alternative Point of Delivery. In the
- 19 -
event of any such disconnection, interruption, suspension or curtailment at an Alternative
Point of Delivery, Project Developer shall use reasonable efforts to arrange for delivery
of Net Delivered Output to another Alternative Point of Delivery. In the event that
Project Developer is unable to arrange for delivery of Net Delivered Output to another
Alternative Point of Delivery, after using reasonable efforts, the Net Delivered Estimate
Amount will be adjusted as set forth in Section 6.
Project Developer Declared Suspension of Energy Deliveries.
9.3.1 If the Project Developer s Facility experiences a force majeure or a forced
outage due to equipment failure which is not caused by an event of force majeure or by
neglect, disrepair or lack of adequate preventative maintenance of the Project Developer
Facility, Project Developer may, after giving notice as provided in Section 9.2 below
temporarily suspend all deliveries of Net Delivered Energy to A vista from the generating
unit within the Facility that is impacted by the force majeure or forced outage for a period
of not less than 48 hours to correct the force majeure or the forced outage condition
Declared Suspension of Energy Deliveries ). The Project Developer s Declared
Suspension of Energy Deliveries will begin at the start of the next full hour following the
Project Developer s telephone notification as specified in Section 9.2 and will continue
for the time as specified (not less than 48 hours) in the written notification provided by
the Project Developer. In the month(s) in which the Declared Suspension of Energy
occurred, the Net Delivered Energy Amount will be adjusted as specified in Section 6.3.
2 If the Project Developer desires to initiate a Declared Suspension of Energy
Deliveries as provided in Section 9.3.1 , the Project Developer shall notify the Designated
Dispatch Facility by telephone. The beginning hour of the Declared Suspension of
Energy Deliveries will be at the earliest the next full hour after making telephone
contact with A vista. The Project Developer shall, within 24 hours after the telephone
contact, provide A vista a written notice in accordance with Section 29 that will contain
the beginning hour and duration of the Declared Suspension of Energy Deliveries and a
description of the conditions that caused the Project Developer to initiate a Declared
Suspension of Energy Deliveries. Avista shall review the documentation provided by
the Project Developer to detennine A vista s acceptance of the described forced outage
as qualifying for a Declared Suspension of Energy Deliveries as specified in
Section 9.3. L Avista s acceptance of the Project Developer s forced outage as an
acceptable forced outage will be based upon the clear documentation provided by the
Project Developer that the forced outage is not due to neglect, disrepair or lack of
adequate preventative maintenance of the Project Developer s Facility.
9.4 Scheduled Maintenance.On or before January 31 of each calendar year, Project
Developer shall submit a written proposed maintenance schedule of significant Facility
maintenance for that calendar year and A vista and Project Developer shall mutually agree as to
the acceptability of the proposed schedule. The Parties detennination as to the acceptability of
the Project Developer s timetable for scheduled maintenance shall take into consideration
Prudent Utility Practices, Avista system requirements and the Project Developer s preferred
schedule. Neither Party shall unreasonably withhold acceptance of the proposed maintenance
- 20-
schedule. Project Developer shall reasonably attempt to schedule down times or maintenance
shutdowns in the April 15 through June 30 period.
Project Developer shall obtain and comply with all pennits, licenses
authorization and other rights required to own, operate, use and maintain the Facility, as they
may change from time to time. Project Developer shall furnish to A vista upon reasonable notice
by A vista, copies of all documents granting, evidencing or otherwise related to such pennits
licenses, authorizations and rights.
Project Developer shall own , operate, use and maintain the Facility at its own risk
and expense in compliance with all applicable laws, ordinances, rules, regulations, orders and
other requirements, now or hereafter in effect, of any governmental authority.
Project Developer shall pennit Avista to inspect the Facility or the operation, use
or maintenance of the Facility. Project Developer shall provide Avista reasonable advance
notice of any such test or inspection by or at the direction of Project Developer.
. 9.Project Developer shall design, construct, install, own, operate and maintain the
Facility and any Project Developer-owned Interconnection Facilities so as to allow reliable
generation and delivery of electric energy to the Transmitting Entity for the full term of the
Agreement, in accordance with Prudent Utility Practices.
If the Project Developer is unable to deliver Net Available Output at any Point of
Delivery or if A vista is unable to accept Net Available Output at any Point of Delivery despite
commercially reasonable efforts by the Project Developer, then the Project Developer, for such
specific period only, shall have the right to sell the output to third parties, subject to whatever rights
and obligations that A vista may otherwise have under this Agreement, subject further to A vista'
prior consent, which consent shall not be unreasonably withheld.
MONTHLY. DAY-AHEAD AND REALTIME SCHEDULING
OF GENERATION
10.
10.Monthly Scheduled Energy Deliveries. The Project Developer, or its agent
shall provide Avista with a schedule of the next month's hourly scheduled energy deliveries
a minimum of seven (7) days prior to the beginning of the month. The Project Developer
shall be excused from scheduling Net Available Output to Avista at the Points of Delivery if
the Transmitting Entity detennines that curtailment, interruption or reduction of Net Delivered
Output deliveries is necessary because of line construction or maintenance requirements
emergencies, electrical system operating conditions on its system, or as otherwise
required by Prudent Utility Practices.
10.Day-Ahead Net Delivered Output Estimates:Project Developer or its agent shall
provide to Avista s preschedulers its best estimates of hourly Net Delivered Output amounts by
0600 PPT 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.
- 21 -
10.Realtime Net Delivered Output Schedules: Project Developer or its agent shall
provide to A vista s realtime schedulers notice of any material change to the prescheduled
amounts of Net Delivered Output. Project Developer or its agent shall use reasonable efforts to
provide such changes at least one hour before the scheduled hour begins in which the charges are
to be in effect.
11.PURCHASE PRICE AND METHOD OF PAYMENT
11.1 Net Delivered Output Purchase Price. For all Net Delivered Output received by
Avista that is not Surplus Energy, Avista shall pay $58.50 per megawatt-hour.
11.2 Surplus Energy Price. For all Surplus Energy received by A vista, A vista shall
pay to the Project Developer the current month's Market Energy Cost per megawatt-hour or the
Net Delivered Output Purchase Price specified in Section 11.1 , whichever is lower.
11.3 Payments to Project Developer.For each month during the tenn of this
Agreement, so long as there are energy deliveries made and/or payments due hereunder, A vista
shall prepare a statement based upon Net Delivered Output and Surplus Energy received by
A vista. Payments by A vista for amounts owed shall be paid no later than the 25th day of the
month following the prior calendar month billing period. 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.
11.Payments to Avista.JfProject Developer is obligated to make any payment or
refund to Avista, Avista shall bill Project Developer for such payments. Project Developer shall
pay A vista on or before the 20th day of the month following the prior calendar month billing
period or ten (10) days after receipt of the bill, whichever is later.
11.Interest.Any payments by A vista to Project Developer or by Project Developer
to A vista, if not paid in full within the limitations set forth in Sections 11.3 and 11.4 above, shall
be late. In addition to the remedies for such an event of default pursuant to Section 16, the late-
paying Party shall be assessed a charge for late payment equal to the lesser of one percent per
month, or partial month, or the maximum rate allowed by the laws of the State of Idaho
multiplied by the overdue amount.
11.Set-Off.Project Developer agrees that A vista may set off any and all amounts
owed by Project Developer to Avista against any current or future payments due Project
Developer under this Agreement.
11.Wire Transfer. All payments shall be made by ACH or wire transfer in
accordance with mutual agreement of the Parties.
11.No Overpayment Obligation. The Parties agree that the prices set forth in Section
11.1 and 11.2 are mutually negotiated, and do not represent levelized rates that have been
- 22-
calculated from other rates. Therefore, Project Developer shall incur no overpayment obligation
under the Agreement as though the prices set forth in Section 11.1 and 11.2 were levelized rates.
11.9 Sale To Third Party. In the event that Project Developer sells electric power to a
third party pursuant to Section 9., Project Developer shall provide to Avista a copy of the
transaction record or other documentation reflecting such sale by the fifth (5th) business day
following the month during which such sale occurred. If the sale price to a third party during any
month exceeds the Net Delivered Output Purchase Price, Avista shall subtract from its payment to
Project Developer for Net Delivered Output during such month the amount of such excess, if any. If
after subtracting such excess from its payment to Project Developer for Net Delivered Output
delivered during such month, there results a negative balance, Project Developer shall pay the
amount of such negative balance to A vista pursuant to Section liA.
12.FORCE MAJEURE
12.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 or any delay or failure to produce Net Available Output, or to, receive or
accept Net Delivered Output due to any ofthe following events:
12.1 Any cause or condition beyond such Party s reasonable control which 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, sabotage or war; breakdown of or damage to
facilities or equipment; electrical disturbance originating in or transmitted through such
Party s electric system or any electric system with which such Party s system is
interconnected; and, 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
12.2 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
electric system is interconnected, whether such actions occur automatically or manually.
12.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. A vista shall not be required to pay for any electric power which, as a result of any force
majeure event, is not delivered. Nothing contained in this Section shall require any Party
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 within fourteen (14) days 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 used to remedy its inability to perform.
- 23 -
12.Force majeure shall include an electrical disturbance that simultaneously prevents
any electric deliveries from occuning at the Point of Delivery, Secondary Point of Delivery and
Alternative Points of Delivery.
13.INDEMNITY
13.Project Developer shall indemnify, defend and hold hannless Avista, its directors
officers, employees, agents, and representatives, against and from any and all losses, expenses
liabilities, claims or actions (hereafter "Loss ), based upon or arising out of bodily injuries or
damages to persons, including without limitation death resulting therefrom, or physical damages
to or losses of property caused by, arising out of or sustained in connection with the construction
operation or maintenance of the Facility. A vista shall indemnify, defend and hold hannless
Project Developer, its directors, officers, employees, agents, and representatives, against and
from any Loss, caused by, arising out of or sustained in connection with the construction
operation or maintenance of its electrical system. In the event that any such Loss is caused by
the negligence of both Project Developer and A vista, including their employees, agents
suppliers and subcontractors, the Loss shall be borne by Project Developer and Avista in the
proportion that their respective negligence bears to the total negligence causing the Loss.
13.2 TO THE EXTENT PERMITTED BY APPLICABLE LAW, PROJECT
DEVELOPER AND A VISTA EACH WAIVE ANY IMMUNITY UNDER EXISTING
WORKER'S COMPENSATION LAW APPLICABLE TO THE JURISDICTION
WHERE THE FACILITY IS TO BE LOCATED AS NECESSARY TO INDEMNIFY
AND HOLD HARMLESS THE OTHER FROM SUCH LOSS, TO THE EXTENT SET
FORTH IN SECTION 13., ABOVE.
13.3 PROJECT DEVELOPER 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 CONSIDERATION OF
THE MUTUAL BENEFITS DERIVED UNDER THE TERMS OF THE AGREEMENT.
14.ASSIGNMENT
14.Project Developer shall not voluntarily assign its rights or delegate its duties
under this Agreement, or any part of such rights or duties, except to secure Project Developer
obligations to primary lenders, as security for initial construction and financing ofthe Facility,
without the written consent of A vista. Such consent shall not unreasonably be withheld.
Further, no assignment by Project Developer 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.
- 24-
14.Project Developer shall have the right, subject to the obligation to provide
security hereunder, without the other Party s consent, but with a thirty (30) days prior written
notice to the other Party, to make collateral assignments of its rights under this Agreement to
satisfy the requirements of any development, construction, or other financing. A collateral
assignment shall not constitute a delegation of Project Developers' obligations under this
Agreement, and this Agreement shall not bind the collateral assignee. Any collateral assignee
succeeding to any portion of the ownership interest of Project Developer shall be considered
Project Developer s successor in interest and shall thereafter be bound by this Agreement.
15.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
pennitted under Section 14.
16.DEFAULT
16.In the event that either Party fails to perfonn the tenus and conditions set forth in
this Agreement (a breach of or default under this Agreement), including, without limitation, the
failure to provide Net Delivered Output at the times or in the amounts required by this
Agreement, the following shall apply:
16.1.1 The non-defaulting Party shall give written notice to the defaulting Party
of the breach of or default under this Agreement in accordance with this Agreement.
16.2 If, after thirty (30) days following receipt of such notice, the defaulting
Party has not taken the steps necessary to cure the breach or default, the non-defaulting
Party may, at its option, tenninate 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 breach
or default, such thirty (30)-day period shall be extended up to ninety (90) days after
written notice to the defaulting Party, as may be necessary to cure the breach or default
with all due diligence. Whether or not the non-defaulting Party elects to tenninate this
Agreement, it may, in addition to other remedies provided for herein, pursue such
remedies as are available at law or in equity.
16.Notwithstanding any claim of force majeure, Project Developer shall be in default
if:
16.1 Project Developer has abandoned the Facility; or
16.2 There have been no energy deliveries to A vista from the Facility for a
period of twelve (12) consecutive months; or
- 25 -
16.3 Net Delivered Output delivered to A vista fails to exceed
600 megawatt-hours during any rolling period of twenty-four (24) consecutive
calendar months; or
16.2.4 Facility ceases to be a Qualifying Facility.
16.5 With respect to Project Developer s default under Section 16., or
Section 16., above, A vista shall provide thirty (30) days notice of termination of the
Agreement, and Project Developer shall have the opportunity to cure its default only up
to and including the day of termination.
16.6 With respect to Project Developer s default under Section 16.2.3 or
Section 16.2.4, above, Avista shall provide notice oftermination of the Agreement and
Project Developer shall have the opportunity to cure the defect as specified in
Section 16.
16.For purposes of this Agreement, a Party shall also be in default if it:
16.1 Becomes insolvent (e., is unable to meet its obligations as they become
due or its liabilities exceed its assets); or
16.2 Makes a general assignment of substantially all of its assets for the benefit
of its creditors, files a petition for bankruptcy or reorganization or seeks other relief under
any applicable insolvency laws; or
16.3.3 Has filed against it a petition for bankruptcy, reorganization or other relief
under any applicable insolvency laws and such petition is not dismissed or stayed within
sixty (60) days after it is filed.
16.3.4 Is in default under any Transmission Agreement, provided that Avista
shall have the obligation to notify Project Developer of any default under any
Transmission Agreement, and provide Project Developer with seventy-two (72) hours
from the receipt of notice of default to cure such default under any Transmission
Agreement.
16.4 Any right or remedy afforded to either Party under any provision of this
Agreement on account of the breach of or default under this Agreement 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.
17.ARBITRATION
Each Party shall strive to resolve any and all differences during the term of the
Agreement. If a dispute cannot be resolved, each Party shall use arbitration before requesting a
- 26 -
hearing before the IPUc. The arbitration shall be conducted pursuant to the Unifonn Arbitration
Act, Chapter 9 of the Idaho Code, as the same may have been or may be amended. The Parties
agree that the IPUC shall have continuing jurisdiction over this Agreement.
18.RELEASE BY PROJECT DEVELOPER
Project Developer releases A vista from any and all claims, losses, hanD, liabilities
damages, costs and expenses to the. extent resulting from any:
18.Electric disturbance or fluctuation that migrates, directly or indirectly, from
A vista s electric system to the Facility;
18.2 Interruption, suspension or curtailment of electric service to the Facility or any
other premises owned, possessed, controlled or served by Project Developer, which interruption
suspension or curtailment is caused or contributed to by the Facility or the interconnection of the
Facility with any electric system; or
18.3 Disconnection, interruption, suspension or curtailment by Avista pursuant to
tenns of this Agreement.
18.4 Disconnection, interruption, suspension or curtailment of transmission service by
a Transmitting Entity or any unforeseen cost or increase in costs to Project Developer imposed
by a Transmitting Entity.
19.GOVERNMENTAL AUTHORITY
This Agreement is subject to the rules, regulations, orders and other requirements, now or
hereafter in effect, of all governmental authorities having jurisdiction over the Facility, this
Agreement, the Parties or either of them. All laws, ordinances, rules, regulations, orders and
other requirements, now or hereafter in effect, of governmental authorities that are required to be
incorporated in agreements of this character are by this reference incorporated in this Agreement.
20.EQUAL OPPORTUNITY
Project Developer shall comply with all applicable equal opportunity laws, ordinances
orders, rules and regulations.
21.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
- 27 -
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 to be an agent or representative of, or to otherwise bind the other
Party.
22.IMPLEMENTATION
Each Party shall promptly take such action (including, but not limited to, the execution
acknowledgement and delivery of documents) as may be reasonably requested by the other Party
for the implementation or continuing performance of this Agreement.
23.NON-WAIVER
23.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 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.
23.Execution of the Agreement shall not be deemed to waive any party s right to
object to the issuance of any water right or permit to or on account of Project Developer or
Thompson River Lumber Company.
24.AMEND MENT
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.
25.CHOICE OF LAWS
This Agreement shall be construed and interpreted in accordance with the laws of the
State ofIdaho.
26.COMPLIANCE WITH LAWS
Both Parties shall comply with all applicable laws and regulations of governmental
agencies having jurisdiction over the Project and the operations of the Parties.
- 28 -
27.VENUE
Any action at law or in equity to enforce the tenns and conditions of this Agreement shall
be brought in Idaho, except that A vista may file an action in Montana, if such action must be
filed in Montana in order to enforce the provisions of Section 7.4.
28.HEADINGS
The section headings in this Agreement are for convenience only and shall not be
considered part of or used in the interpretation of this Agreement.
29.NOTICES
All written notices required by this Power Purchase Agreement shall be mailed or
delivered as follows:
to A vista:Vice President Energy Resources
A vista Corporation
O. Box 3727
Spokane, Washington 99220
to TRC Mike Underwood
Thompson River Co-Gen, LLC
161GWynkoop St, Suite 100
Denver, CO 80202
Either Party may change its address specified above by giving the other Party notice of
such change in accordance with this Section. All notices, requests, authorizations, directions or
other communications by a Party shall be deemed delivered when mailed as provided in this
Section or personally delivered to the other Party. Any verbal notice required hereby which
affects the payments to be made hereunder shall be confinned in writing (certified mail) as
promptly as practicable after the verbal notice is given.
30.EXHIBITS
This Power Purchase Agreement includes the following exhibits which are attached and
incorporated by reference herein:
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Communications and Reporting
Description of the Facility
Fonn of Engineer s Certification of Design and Construction Adequacy
Fonn of Engineer s Certification of Operations and Maintenance Policy
- 29-
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.
STATE OF (br)L 0 j(A-ih)
: ss.
County of g1A f?1-t.
Signed and sworn to before me this d)5 day of /i" S--' , 2006 by t4A~fc. E
the t-Vlftv1 A:~~ofTHOM~ COGEN, LLC.
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THOMPSON RIVER COG EN, LLC
By: ttlrK.6' f -I' fd v&-z..,Ulch)j)
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(Type Name)
Title: /AAh Aj~
County of Spokane
A VISTA CORPORATION
By
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(TYP ame)
Title: Y\cuNV\I\CA.AI\ O-P 'BcovvcL
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Not Public in and for the State of
residingat ~\() l~~n ~;rrt-:#,~li C()
My COI11Il1lSSlOn explr : 200
Jenelle Cox, Notary Public
State of Colorado
My Commission Expires 2/3/2007
I certify that I know or have satisfactory evidence that Go-.r y G-. ~l is the person who
appeared before me, and said person acknowledged that slhe signed this ~rument, on oath
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stated that
slhe was authorized to execute the instrument, and acknowledged it as the (NI..
A VISTA CORPORATION, to be the free and voluntary act of such party for the uses and purposesmentioned in the instrument.
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2006.
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- 30-
EXHIBIT A
Communication and Reportine
(a)Verbal communications relating to electric power scheduling or generation level
changes between Project Developer and Avista shall be between the following personnel:
(1 )Pre-Schedule (5:30 a.m. to approximately I :30 p.m. on nomal business
days):
A vista Pre-Scheduler: [phone]
Alternate Phone Number: [phone]
Project Developer [phone]
Alternate Phone Nwnber: [phone]
(2)Real-Time Schedule (available 24 hours per day):
A vista Real-Time Scheduler [phone]
Project Developer [phone]
Alternate Phone Number [phone]
(b)During nonnal business hours, all verbal communications relating to interruptions and
outages:
A vista System Operator [phone]
Alternate Phone Number: [phone]
Project Developer [phone]
Alternate Phone Number: [phone]
(c)Outside ofnonnal business hours (nights, weekends, and holidays), all verbal
communications relating to interruptions and outages shall take place between the following
personnel:
A vista System Operator [phone]
Alternate Phone Number: [phone]
Project Developer [phone]
Alternate Phone Number: [phone]
Either Party may provide written notice to the other Party setting forth different contact
numbers.
EXHIBIT B
Description of the Facility
All real and personal property of Thompson River Co-Gen, LLC located in Section 13
Township 21 North, Range 29 West, P.M. Sanders County, Montana, commonly known as
real and personal property located at 249 Airport Road, Thompson Falls, Montana 59873
consisting of a thennal wood waste / coal co-generation electric power plant with a turbine
capacity of 13 MW and related equipment.
EXHIBIT C
ENGINEER'S CERTIFICATION
CONSTRUCTION ADEQUACY FOR A
PURPA QUALIFING FACILITY (QF)
am a Professional Engineer
(Name of Engineer)
registered to practice in the State of Idaho. I have substantial experience in the design,
construction and operation of electric power plants of the same type as
(plant),
(Title ofQF)
sited at
111
(Description of Project Sitc)
County, State of
I have made and/or supervised periodic inspections of the construction in progress
and of the completed plant, and it is my professional opinion that the plant was built substantially
in accordance with Plans and Specifications bearing the words "CERTIFIED FOR IDAHO
c. SECURITY ACCEPTANCE" and the Stamp of the Certifying Engineer of the Design,
and that the plant was built to commercially accepted standards for a plant of this type.
I have no economic relationship to the Designer of said plant and have made my
analysis of the Plans and Specifications independently.
I hereby CERTIFY that the above statements are complete, true, and accurate to
the best of my knowledge and I therefore set my hand and seal below.
Signed and Sealed
DATE:
SIGNA TORE:
EXHIBIT D
ENGINEER'S CERTIFICATION
OPERATIONS AND MAINTENANCE POLICY FOR A
PURP A QUALIFING FACILITY (QF)
am a Professional Engineer
(Name of Engineer)
registered to practice in the State of Idaho. I have substantial experience in the design,
construction and operation of electric power plants of the same type as
(plant),
(Title of QF)
sited at
(Description of Project Site)
County, State of
I have reviewed and/or supervised the review of the Policy for Operation and
Maintenance (O&M Policy) for the plant and it is my professional opinion that, provided said
plant has been designed and built to appropriate standards, adherence to said O&M Policy will
result in the plant's producing at or near the design electrical output, efficiency, and plant factor
years (length of the proposed Power Sales Contract), barring unforeseeablefor
Force Majeure.
I have no economic relationship to the Designer of said plant and have made my
analysis of the Plans and Specifications independently.4. I have supplied the owner of the plant with at least one copy of said O&M Policy
bearing my Stamp and the words "CERTIFIED FOR IDAHO P.C. SECURITY
ACCEPTANCE" on each sheet thereof.5. I hereby CERTIFY that the above statements are complete, true, and accurate to
the best of my knowledge and I therefore set my hand and seal below.
Signed and Sealed
DATE:
SIGNATURE:
SHORT FORM
POWER PURCHASE AGREEMENT
This SHORT FORM POWER PURCHASE AGREEMENT ("Agreement"), effective as of
August d-S-2006, is made by and between Avista Corporation, a Washington corporation
Avista ), and Thompson River Co-Gen, LLC ("Project Developer
Project Developer grants to Avista (i) a second priority lien on the Facility described on Exhibit
, attached hereto and made a part hereof by this reference, securing Project Developerobligations under this Agreement, and (ii) second priority security interests in all personalproperty, fixtures, contract rights, water rights, pennits, licenses, real property interests, or otherrights or privileges which Project Developer has obtained or will obtain in conjunction with the
construction or operation of the Facility, in both cases subject only to the rights of first mortgage
lien on the Facility, and further subject to the limitation that the total value of any or all of the
lien and security interests granted to A vista by Project Developer shall not exceed $25 500 000.
Project Developer shall execute and deliver such financing statements, fixture filings, or otherdocuments necessary to evidence and perfect the liens and security interests granted above and
hereby authorizes A vista to file and/or record such financing statements, fixture filings, or otherdocuments. The tenn of this Agreement shall be for twenty (20) years, unless tenninated earlierby tenns and conditions contained herein.
Upon any uncured default by Project Developer, A vista shall have all rights and remediesavailable at law or in equity to holders of secured interests in personal property or liens on real
property, in addition to all rights and remedies specifically provided for herein. A vista, at itsoption, may advance sums to cure any uncured default under Lender s first mortgage lien, and allsuch sums advanced by A vista shall be secured by all security interests given by ProjectDeveloper to A vista under this Agreement.
Upon the occurrence of uncured default under this Agreement by Project Developer, andprovided that the operation of the Facility has not been assumed by any primary lender pursuant
to financing documents applicable to such lender, A vista shall have the right, but under nocircumstances the obligation, to assume operational responsibility for the Facility in the place
and stead of, and as agent for, Project Developer in order to complete construction, continueoperation or complete any necessary repairs; provided however, in no event shall Avistaelection to operate the Facility be deemed to be a transfer of title or a transfer of ProjectDevelopers obligations as owner thereof. For the purpose of implementing the foregoing,Project Developer hereby appoints Avista as Project Developer s attorney in-fact, with power tooperate the Facility if A vista elects to exercise such operating rights. This power being coupledwith an interest is irrevocable until this Agreement is tenninated.
This Agreement is prepared and recorded for the purpose of providing record notice of certain of
the tenns and conditions of that certain Power Purchase Agreement ("Long Fonn Agreement"of even date by and between Avista and Project Developer. Additional tenns and conditions are
set forth in the Long Term Agreement, all of which are incorporated herein by this reference.
This Agreement be not be deemed to modify, supplement or supersede the terms and conditions
of the Long Form Agreement. If the terms and conditions of this Agreement conflict with the
terms and conditions of the Long Form Agreement, the terms and conditions of the Long Form
Agreement shall control.
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.
THOMPSON RIVER COGEN, LLC A VISTA CORPORATION
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(Type Name)
Title: A-vt ~ E7L
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Title: C:V\.a.vv-~ DP- -th~ 13 DOvY"ol
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STATE OF aLa ~frl)V
: ss.
County of Yt0-" tiel(,
Signed and sworn to before me this ......?5day
~4-l( 006 by /MJ:/.(t LI tr? j) ez;i)U~
the tJt1 I!-V1 A-je if:of THOMPSON RIVER COGEN, LLC.
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Il~ OF:' co~q\\\,Jenelle Cox, Notary Public~II'"""""",,\\\~ State of Colorado
My Commission Expires 2/3/2007STATE OF WASHINGTON)
: ss.
County of Spokane
I certify that I know or have satisfactory evidence that G(U"'y G. ~l is theperson who appeared before me, and said person acknowledged that slhe signed this instrument
on oath stated that slhe was authorized to execute the instrument, and acknowledged it as the
~"o"" e60 of A VISTA CORPORATION, to be the free and voluntary act of
such party for the uses and purposes mentioned in the instrument.
Dated: ::L 2006.
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0O431531.doc
EXHIBIT A
Description of the Facility
All real and personal property of Thompson River Co-Gen, LLC located in Section 13
Township 21 North, Range 29 West, P.M. Sanders County, Montana, commonly known asreal and personal property located at 249 Airport Road, Thompson Falls, Montana 59873consisting of a thennal wood waste / coal co-generation electric power plant with a turbinecapacity of 13 MW and related equipment.