20121123Renewal.pdf

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e: Joint Petition of Avista Corporation and Kootenai Electric Cooperative, Inc. for
Approval of Amendment to Power Purchase Agreement
IPUC Docket No. AVU-E-
Dear Ms. Jewell:
Please find enclosed for filing an original and seven copies of the Joint Petition of Avista
Corporation ("Avita") and Kootenai Electric Cooperative, Inc. ("KEC") for approval of the
amendment to the power purchase agreement between Avista and KEC ("PPA") extending the
term of the PPA through December 31, 2013. The amendment to the PPA and the PPA are
attached to the Joint Petition. Please let me know if you have any questions regarding this filing.
Sincerely,
Michael G. Andrea
Senior Counsel
Enclosures
cc: Greg Adams
L
For Avista Corporation
Michael G. Andrea (ISB No. 8308)
Senior Counsel
Avista Corporation
1411 East Mission Ave., MSC-23
Spokane, WA 99202
Phone: [phone]
Facsimile: [phone]
Email: [e-mail]
?9151 pq
10,1-H.0fl j! :j 'TIE
For Kootenai Electric Cooperative, Inc.
Greg Adams (ISB No. 7454)
Richardson & O'Leary PLLC
515 N. 27th St.
Boise, ID 83702
Phone: [phone]
Facsimile: [phone]
Email: [e-mail]
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT PETITION)
OF AVISTA CORPORATION AND )
KOOTENAI ELECTRIC COOPERATIVE, )
INC. FOR APPROVAL OF AMENDMENT )
TO POWER PURCHASE AND SALE )
AGREEMENT )
CASE NO. AVU-E- /L -
JOINT PETITION OF AVISTA
CORPORATION AND KOOTENAI
ELECTRIC COOPERATIVE, INC.
Avista Corporation ("Avista") and Kootenai Electric Cooperative, Inc. ("KEC")
(collectively, the "Parties") hereby jointly petition the Idaho Public Utilities Commission
("Commission") for an order approving the Amendment ("Amendment") to Power
Purchase Agreement ("Agreement") between KEC and Avista with a requested effective
date of January 1, 2013. The Amendment is attached hereto as Attachment A. The
Agreement is attached hereto as Attachment B.
Page -1 JOINT PETITION OF AVISTA CORPORATION AND KOOTENAI
ELECTRIC COOPERATIVE, INC.
Names and Addresses of Petitioners
Avista Corporation
1411 East Mission Avenue
Spokane, WA 99202
Kootenai Electric Cooperative, Inc.
2451 W. Dakota Avenue
Hayden, Idaho 83835-0278
2. Nature of Businesses
Avista is a corporation created and organized under the laws of the State of
Washington with its principal office in Spokane, Washington. Avista is an investor-
owned utility engaged in, among other things, the business of generating, transmitting,
and distributing electric power to wholesale and retail customers in Idaho and
Washington. Avista also provides natural gas service to customers in Idaho, Washington,
and Oregon. As such, Avista's rates, charges, services and practices are regulated, in
part, by this Commission.
KEC is electric cooperative with its headquarters in Hayden, Idaho, that will own
and operate a landfill gas electric power generating facility located at the Kootenai County
Solid Waste Facility near Bellgrove, Idaho ("Facility"). The Facility is capable of
generating up to approximately 3.2 megawatts of energy. The Facility is a Qualifying
Facility pursuant to the Public Utility Regulatory Policies of Act of 1978 ("PUIRPA").
Page -2 JOINT PETITION OF AVISTA CORPORATION AND KOOTENAI
ELECTRIC COOPERATIVE, INC.
3. Names of Representatives
All communications, pleadings, and orders with respect to this proceeding should
be directed to:
For Avista Corporation:
Steve Silkworth
Manager, Wholesale Marketing and
Contracts
Avista Corporation
1411 B. Mission Ave., MSC-7
Spokane, WA 99202
Phone: [phone]
Fax: [phone]
E-mail: [e-mail]
For Kootenai Electric Cooperative, Inc.:
Doug Elliott
General Manager
Kootenai Electric Cooperative, Inc.
2451 W. Dakota Avenue
Hayden, Id 83835-0278
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
4. Description of Agreement
Michael G. Andrea
Senior Counsel
Avista Corporation
1411 E. Mission Ave., MSC-23
Spokane, WA 99202
Phone: [phone]
Fax: [phone]
E-mail: [e-mail]
Greg Adams
Richardson & O'Leary PLLC
515 N. 27" St.
Boise, ID 83702
Phone: [phone]
Facsimile: [phone]
Email:greg(2irichardsonandoleary.com
The Agreement is a power purchase agreement under which KEC generates and
delivers the Net Output of its Facility to Avista's electric system on an as-available basis.
The Agreement was original approved by the Commission in Order No. 32459 issued in
Docket No. AVU-E-12-01 on February 15, 2012. The Term of the Agreement was
originally due to expire on December 31, 2012. The Amendment extends the Term of the
Agreement through December 31, 2013 and Exhibit D has also been updated to include
the Avoided Cost Rates for 2013.
Page -3 JOINT PETITION OF AVISTA CORPORATION AND KOOTENAI
ELECTRIC COOPERATIVE, INC.
For the Term of the Agreement, Avista will purchase the Net Output of the
Facility that is delivered to the Point of Delivery. Avista will purchase such Net Output
(up to a maximum of 10 aMW) pursuant to Schedule 62 of its Idaho tariff at the lesser of
(i) 85 percent (85%) of the weighted average of the daily on-peak and off-peak Dow Jones
Mid-Columbia Non-Firm Index, or (ii) the applicable rate based upon the On-Peak or Off-
Peak Avoided Cost Rates For Non-Fueled Projects Smaller Than Ten Average Megawatts -
Non-Levelized in effect on the Effective Date ("Avoided Cost Rates"). Pursuant to the
Amendment, the Term of the Agreement shall continue through December 31, 2013,
unless the Agreement is terminated earlier pursuant to its terms. KEC may terminate the
Agreement at any time during the Term by providing Avista written notice 30 days
before such termination.
Page -4 JOINT PETITION OF AVISTA CORPORATION AND KOOTENAI
ELECTRIC COOPERATIVE, INC.
5. Joint Request for Approval
Avista and KEC jointly request that the Commission issue an order (i) accepting
the Agreement as amended by the Amendment, without change or condition, with an
effective date of January 1, 2013, and (ii) declaring that all payments made by Avista for
purchases of energy under the Agreement be allowed as prudently incurred expenses for
ratemaking purposes.
Respectfully submitted this th day of November 2012.
AVISTA CORPORATION
Michael G. Andrea
Senior Counsel
KOOTENAI ELECTRIC
COOPERATIVE, INC.
Attorney for Kootenai Cooperative, Inc.
Page -5 JOINT PETITION OF AVISTA CORPORATION AND KOOTENAI
ELECTRIC COOPERATIVE, INC.
ATTACHMENT A
November 19, 2012
Kootenai Electric Cooperative
Attn: Doug Elliot
2451 W. Dakota Ave
P.O. Box 276
Hayden, 11) 83835-0278
Re: Amendment to the Power Purchase Agreement Between Kootenai Electric
Cooperative and Avista Corporation
Dear Mr. Elliot:
Kootenai Electric Cooperative, Inc. ("Seller") and Avista Corporation ("Avista"),
referred to herein individually as a "Party" and collectively as the "Parties," entered into that
certain Power Purchase Agreement dated January 5, 2012, ("Power Purchase Agreement") under
which Avista purchases energy from a 3 .2 MW nameplate capacity electric power generating
facility ("Facility") at the .Kootenai County Solid Waste Facility near Beligrove, Idaho. The
Power Purchase Agreement was originally approved by the Idaho Public Utilities Commission
("Commission") in Order No. 32459 issued in Docket No. AVU-E-1 2-01 on February 15, 2012.
The Power Purchase Agreement is due to expire by its terms on December 31, 2012. Avista
understands that Seller would like to amend the Power Purchase Agreement to extend the term.
The Parties hereby agree to amend the Power Purchase Agreement to extend the term
through December 31, 2013: Accordingly, Section 4.1 of the Power Purchase Agreement is
amended to change the expiration date of the Term from December 31, 2012 to December 31,
2013. Except as expressly provided herein, all other terms and conditions of the Power Purchase
Agreement remain in full force and effect, including Seller's right in Section 4.1 to terminate the
Agreement with 30 days prior written notice to Avista.
The Parties agree that this Amendment will be construed in accordance with Section 210 of
PURPA and other applicable laws and regulations. This Amendment shall become finally effective
upon the Commission's approval of all terms and provisions herein without change or condition,and
declaration that all payments to be made to Seller under the Power Purchase Agreement, as amended,
shall be allowed as prudently incurred expenses for ratemakhig purposes. This Amendment to the
Power Purchase Agreement shall, subject to such Commission approval, become effective on
January 1, 2013, or such other date set by Commission order. . IJpthi the effective date of this
1411 East Mission Avenue . . .800.2279187
P0 Box 3727 www.avfstautilities.com
Spokane, Washington 99220-3727 . [e-mail]
Amendment, this Amendment shall be incorporated in the Power Purchase Agreement and all
references to the Power Purchase Agreement shall be deemed to be references to the Power
Purchase Agreement as amended by this Amendment.
If the terms set forth herein for the extension of the term of the Power Purchase
Agreement are acceptable, please execute below and return an original executed copy of this
letter to me. Please call Steve Silkworthat 509 495-8093 if you have any questions.
Sincerely,
c --
Robert Lafferty
Director, Power Supply
ACCEPTED AND AGREED TO:
6 -
Name: e
Date: 0je,_\c\,
Kootenai Electric Cooperative
ATTACHMENT B
POWER PURCHASE AGREEMENT
BETWEEN
KOOTENAI ELECTRIC COOPERATIVE, INC.
AND
AVISTA CORPORATION
I
1. DEFINITIONS 4-
2. WARRANTIES -7 -
3. CONDITIONS PRIOR TO COMMERCIAL OPERATION -8-
4. TERM OF AGREEMENT AND COMMERCIAL OPERATION DATE -9-
5. NET OUTPUT AMOUNTS -9-
6. SCHEDUUNG -10-
7. PURCHASE PRICES AND PAYMENT -10
8. INSURANCE -11-
9. CURTAILMENT, INTERRUPTION OR REDUCTION OF DELIVERY -12 -
10. OPERATION -13-
II. INTERCONNECTION AND TRANSMISSION -14 -
12. FORCEMAJEURE -14-
13. INDEMNITY -15-
14. ASSIGNMENT -16-
15. NO UNSPECIFIED THIRD PARTY BENEFICIARIES -16 -
16. DEFAULT AND TERMINATION -16-
17. DISPUTE RESOLUTION -17-
18. RELEASE BY SELLER -17-
19. GOVERNMENTAL AUTHORITY - 18-
20. SEVERAL OBLIGATIONS -18-
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21.IMPLEMENTATION
22.NON-WAIVER
23.AMENDMENT
24.CHOICE OF LAWS AND VENUE
25.HEADINGS
26.SEVERABILITY
27.COUNTERPARTS
28.TAXES
29.NOTICES
30.SURVIVAL
31.ENTIRE AGREEMENT
EXHIBIT A
EXHIBITB
EXHIBITC
EXHIBITD
EXHIBITE
EXHIBITF
EXHIBITG
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sic
POWER PURCHASE AGREEMENT
This Agreement is made by and between Avista Corporation, a Washington corporation
("Avista"), and Kootenai Electric Cooperative, Inc. an Idaho corporation ("Seller"). Avista and
Seller are sometimes referred to individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Seller will design, construct, own, operate and maintain a 3.2 MW
nameplate capacity ("Expected Capacity") electric power generating facility ("Facility") at the
Kootenai County Solid Waste Facility near Bellgrove, Idaho, as more fully described in Exhibit
C; and
WHEREAS, Seller will operate the Facility as a Qualifying Facility, as defined by the
Public Utility Regulatory Policies Act of 1978 ("PURPA"); and
WHEREAS, Seller will deliver and sell, and Avista will purchase, Net Output generated
by the Facility on an non-firm as available basis subject to the terms ofthis Agreement; and
WHEREAS, Seller and Avista are parties to the Interconnection and Operating
Agreement dated November IS, 2011 (Avista Contract No. AV-TR11-020 5-1) ("Interconnection
and Operating Agreement"); and
WHEREAS, Seller and Avista are parties to the Facilities for Integration and Operation
of Fighting Creek Facility Letter Agreement dated December 5, 2011 (incorporated as Exhibit G)
which sets forth the scope of work and responsibilities ofthe Parties regarding the construction
and installation of the Parties' respective facilities for the integration and operation of Seller's
Facility.
NOW, THEREFORE, in consideration o fthe mutual agreements set forth herein, the
Parties agree as follows.
1. DEFINITIONS
Except as otherwise defined in this Agreement, whenever used in this Agreement and
exhibits hereto, the following terms shall have the following meanings:
1.1 "Agreement" means this Power Purchase Agreement, including all exhibits, and
any written amendments.
1.2 "Alternate Point of Delivery" shall have the meaning provided in Section 11.2
ofthis Agreement and is further clarified in Exhibit C of this Agreement.
1.3 "Ancillary Services" means those services that are necessary to support the
transmission of capacity and energy from resources to loads while maintaining reliable operation
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ofthe electrical systems in accordance with Prudent Utility Practices and any existing or future
WECC requirements.

1.4 "Avoided Cost Rates" shall have the meaning provided in Section 7.3 ofthis
Agreement.

1.5 "aMW" means average megawatt(s). An average megawatt is calculated by
dividing the total generation in MWh over a given period oftime (e.g., a calendar month) by the
number ofhours in that period oftime.

1.6 "Balancing Authority Area" means an electrical system or systems bounded by
interconnection metering and telemetry, capable of controlling generation to maintain its
interchange schedule with other Balancing Authority Areas and contributing to frequency
regulation of the interconnection. A Balancing Authority Area must be certified by the
applicable reliability council (such as WECC or other reliability council).

1.7 "Base Energy" means all monthly Net Output except Net Output that is Excess
Energy.

1.8 "Business Day" means every day other than a Saturday or Sunday or a national
holiday. National holidays shall be those holidays observed NERC.

1.9 "Commission" means the Idaho Public Utilities Commission, or its successor.
1.10 "Effective Date" shall have the meaning provided in Section 4.1 ofthis
Agreement.
1.11 "Excess Energy" shall have the meaning provided in Section 7.4 ofthis
Agreement.
1.12 "Expected Capacity" shall have the meaning provided in the recitals of this
Agreement.
1.13 "Facility" means the electric energy generating facilities, including all equipment
and structures necessary to generate and supply electric energy, more particularly described at
Exhibit C.
1.14 "Facility Output" means the capability and electric energy generated by the
Facility expressed in kilowatt-hours.
1.15 "Facility Service Power" means the electric energy generated and used by the
Facility during its operation to operate equipment that is auxiliary to primary generation
equipment including, but not limited to, pumping, generator excitation, cooling or other
operations related to the production of electric energy by the Facility.
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1.16 "Force Majeure" shall have the meaning provided in Section 12 ofthis
Agreement.
1.17 "FERC" means the Federal Energy Regulatory Commission, or its successor.
1.18 "Independent Engineering Certification" means certifications detailed in
Section 3.3 provided by a professional engineer registered in the state in which the Facility is
located and who has no direct or indirect, legal, or equitable ownership interest in the Facility.
1.19 "Initial Capacity Determination" shall have the meaning provided in Section
3.4 ofthis Agreement.
1.20 "Interconnection and Operating Agreement" means, as applicable, the
agreement between Seller and Avista or Seller and a Transmitting Entity that is providing
interconnection service which governs how the Net Output is delivered to Avista's or the
Transmitting Entity's electrical system at the point of interconnection during the Term ofthis
Agreement and that is attached hereto as Exhibit F.
1.21 "Losses" means the loss of electrical energy expressed in kilowatt hours (kWh),
including the Meter Location Adjustment Factor ("MLAF") as described in section 7.2,
occurring as a result ofthe transformation and transmission of energy between the point of
interconnection on Seller's system and the Point of Delivery.
1.22 "MW" means megawatt. One thousand kilowatts equals one megawatt.
1.23 "MWh" means megawatt-hour. One thousand kilowatt-hours equals one
megawatt-hour.
1.24 "Market Energy Rate" means an energy price that shall be 85 percent (85%) of
the weighted average ofthe daily on-peak and off-peak Dow Jones Mid-Columbia Non-Firm
Index (Dow Jones Mid-C Non-Firm Index), or its successor, or as agreed by the Parties ifno
successor exists.
1.25 "Nameplate Capacity Rating" means the maximum generating capacity o fthe
Facility, as determined by the manufacturer, and expressed in kilowatts (kW).
1.26 "NERC" means the North American Electric Reliability Corporation or its
successor.
1.27 Output" means the capability and electric energy generated by the Facility,
less Facility Service Power and Losses, that is delivered to the Point ofDelivery, or at the
Alternate Point of Delivery ifapplicable under Section 11.2, expressed in kilowatt-hours. Net
Output is further described in Section 7.2.
1.28 "Off-Peak" means all hours other than On-Peak hours.
1.29 "On-Peak" means the hours ending 0700 through 2200 Pacific Prevailing time,
Monday through Sunday, including national holidays.
1.30 "Point o f Delivery" means the location, as specified in Exhibit C ofthis
Agreement, where the electric energy produced by the Facility is delivered to Avista's electrical
system.
1.31 "Prudent Utility Practices" means the practices, methods, and acts commonly
and ordinarily used in electrical engineering and operations by a significant portion o fthe
electric power generation and transmission industry, in the exercise ofreasonable judgment in
the light ofthe 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.
1.32 "Qualifying Facility" or "Q" means a generating facility which meets the
requirements for "QF" status under PURPA and part 292 ofFERC's Regulations, 18 C.F.R. Part
292, and which has obtained certification of its QF status.
1.33 "Term" shall have the meaning provided in Section 4.1 ofthis Agreement.
1.34 "Transmitting Entity" means any entity or entities including Seller that provide
transmission and/or interconnection service to deliver electric energy from the Facility to
Avista's electrical system at the Point ofDelivery or at the Alternate Point of Delivery if
applicable under Section 11.2. For purposes ofthis Agreement, Seller is the Transmitting Entity.
1.35 "WECC" means the Western Electricity Coordinating Councilor its successor.
2. WARRANTIES

2.1 No Warranty by Avista. Avista makes no warranties, expressed or implied,
regarding any aspect of Seller's design, specifications, equipment or facilities, including, but not
limited to, safety, durability, reliability, strength, capacity, adequacy or economic feasibility, and
any review, acceptance or failure to review Seller's design, specifications, equipment or Facility
shall not be an endorsement or a confirmation by Avista Avista assumes no responsibility or
obligation with regard to any NERC and/or WECC reliability standard associated with the
Facility or the delivery of electric energy from the Facility to the Point of Delivery or at the
Alternate Point ofDelivery if applicable under Section 11.2.

2.2 Seller's Warranty. Seller warrants and represents that: (a) Seller has
investigated and determined that it is capable ofperforming and will perform the obligations
hereunder and has not relied upon the advice, experience or expertise ofAvista in connection
with the transactions contemplated by this Agreement; (b) all professionals and experts
including, but not limited to, engineers, attorneys or accountants, that Seller may have consulted
or relied on in undertaking the transactions contemplated by this Agreement have been solely
those of Seller; (c) Seller will comply with all applicable laws and regulations and shall obtain
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and comply with applicable licenses, pe=its and approvals in the design, construction, operation
and maintenance ofthe Facility; and (d) the Facility is, and during the Term of this Agreement
will remain, a Qualifying Facility as that te= is used in 18 C.F.R Part 292. Seller's failure to
maintain Qualifying Facility status will be a material breach ofthis Agreement. Avista reserves
the right to review the Seller's Qualifying Facility status and associated support and compliance
documents at anytime during the Te= ofthis Agreement.
3. CONDITIONS PRIOR IQ DELIVERY QE NET OUTPUT
3.1 Licenses. Permits and Approvals. Prior to the delivery of any Net Output to
Avista, Seller shall submit to Avista written proofthat all licenses, pe=its or approvals necessary
for Seller's operations have been obtained from applicable federal, state, tribal or local authorities,
including, but not limited to, evidence ofcompliance with Subpart B, 18 C.F.R. § 292.207, tribal,
state and local business licenses, environmental pe=its, easements, leases and all required
approvals by the Commission. Avista and Seller shall cooperate in petitioning the Commission
for any required approvals
3.2 Opinion o f Counsel. Prior to the delivery ofany Net Output to Avista, Seller shall
submit to Avista an opinion letter signed by an attorney admitted to practice and in good
standing in the state where the Facility is located providing an opinion that Seller's licenses,
pe=its and approvals as set forth in Section 3.1 above are legally and validly issued, are held in
the name ofthe Seller, and based on a reasonable independent review, counsel is ofthe opinion
that Seller is in substantial compliance with said pe=its as of the date of such opinion letter.
The opinion letter will be in a fo= acceptable to Avista and will acknowledge that the attorney
rendering the opinion understands that Avista is relying on said opinion. Avista's acceptance of
the fo= shall not be unreasonably withheld.
33 Independent Engineering Certifications. Prior to the delivery of any Net Output
to Avista, Seller shall submit to Avista applicable Independent Engineering Certifications for (a)
Construction Adequacy for a Qualifying Facility, and (b) Operations and Maintenance Policy for a
Qualifying Facility as described in Commission Order No. 21690. Each Independent Engineering
Certification shall be signed by a licensed professional engineer in good standing submitted in a
fo= acceptable to Avista and will acknowledge that the licensed professional engineer rendering
the opinion understands that Avista is relying on said opinion. Avista's acceptance ofsuch fo=s
shall not be unreasonably withheld.
3.4 Initial Capacity Determination. Seller shall design and operate the Facility in a
manner such that under no=al design conditions the Net Output does not exceed 10 aMW in
any calendar month. Prior to delivery of any Net Output, Seller shall submit to Avista the
maximum hourly generation capability ofthe Facility ("Initial Capacity Dete=ination"). Such
Initial Capacity Dete=ination shall be dete=ined by use ofthe Nameplate Capacity Rating and
shall be documented and submitted to Avista by Seller. Such documentation shall include the
info=ation listed in Exhibit E. Upon receipt of Seller's Initial Capacity Dete=ination, Avista
will review such determination within a reasonable time and, if acceptable to Avista, Avista shall
issue to Seller its written approval of the Initial Capacity Dete=ination. Ifthe Initial Capacity
KIM
Determination submitted by Seller is not acceptable to Avista, Avista will promptly notify Seller
that Avista will not accept its Initial Capacity Determination. In such event, Avista shall engage,
at Seller's sole expense, an independent qualified consultant to determine the Initial Capacity
Determination. During the Term ofthis Agreement, Seller shall not cause the capacity ofthe
Facility to be greater than the Initial Capacity Determination by any means, including by
addition, upgrade, or replacement of any turbines.
3.5 Ancillary Services. In the event that the Facility is located outside ofAvista's
Balancing Authority Area, Seller shall be responsible at its sole expense for obtaining any and all
necessary Ancillary Services. Seller shall demonstrate its compliance with this Section prior to the
delivery of any Net Output to Avista.
3.6 Insurance. Prior to the delivery ofany Net Output to Avista, Seller shall submit to
Avista evidence of compliance with Section 8, Insurance.
3.7 Network Resource Designation. At Avista's request, Seller shall provide to
Avista all data required by Avista to enable the Facility to be designated by Avista as a network
resource.
3.8 Written Acceptance. Prior to the delivery ofany Net Output to Avista, Seller shall
request and obtain from Avista written confmnation that all conditions to acceptance ofelectric
energy have been fulfilled. Avista shall use reasonable commercial efforts to promptly provide
Seller written confirmation that all conditions to acceptance ofelectric energy have been fulfilled or
provide notice that such conditions have not been fulfilled.
4.TERM OF AGREEMENT AND COMMERCIAL OPERATION DATE
4.1 This Agreement shall be effective on the date last signed below or such other date
set by Commission order (the "Effective Date") and shall continue until December 31, 2012
("Term"), unless terminated by Seller with 30 days prior written notice to Avista or otherwise
terminated as provided herein.
4.2 The Parties agree that this Agreement will be construed in accordance with
Section 210 ofPURPA and other applicable laws and regulations. This Agreement shall become
finally effective upon the Commission's approval of all terms and provisions herein without
change or condition and declaration that all payments to be made to Seller hereunder shall be
allowed as prudently incurred expenses for ratemaking purposes.
5.<Reserved)
S
6.SCHEDULING
6.1 Seller will make reasonable efforts to contact Avista Real-Time Scheduler to
update Avista Real-Time Scheduler regarding any schedule estimates for generation, outage
timeframes/duration, and return to service estimates.
6.2 Email contact information with regard to scheduling and telephone contact
information with regard to generation changes, interruptions or outages are specified in Exhibit
A, Communication and Reporting.
7.PURCHASE PRICES AND PAYMENT
7.1 Except when either Party's performance is excused as provided herein, for the
Term ofthis Agreement, Seller shall deliver all Net Output from the Facility to Avista at the
Point of Delivery, or at the Alternate Point of Delivery if applicable under Section 11.2. For all
Net Output delivered to Avista at the Point of Delivery, or at the Alternate Point of Delivery if
applicable under Section 11.2, Avista shall pay the applicable rate specified in Sections 7.3 and
7.4 ofthis Agreement.
7.2 Net Output. Net Output shall be determined by measuring the Facility Output
and reducing that amount by Facility Service Power and the Meter Location Adjustment Factor
("MLAF") which is the product of all applicable loss factors for the distribution system,
transformation and transmission system between the metering point and the Point ofDeliveiy.
Net Output shall be calculated in accordance with the following formula:
Net Output = (Facility Output) - (Facility Service Power) x MLAF
MLAF= I - [(Distribution Line Loss Factor of 0.0203)
• (Dower Transformer No Load Loss of 0.0030)
• (Dower Transformer Load Loss of 0.0010)
• (Transmission Line Loss ofO.0005)]
MLAF= 1 -0.0248
MLAF= 0.9752
7.3 Base Energy. For all Base Energy delivered to Avista at the Point ofDelivery, or
at the Alternate Point of Delivery ifapplicable under Section 11.2, Avista shall pay Seller the
lesser of the current month's Market Energy Rate or (ii) the applicable rate based upon the
On-Peak or Off-Peak Avoided Cost Rates For Non-Fueled Projects Smaller Than Ten Average
Megawatts - Non-Levelized in effect on the Effective Date ("Avoided Cost Rates") as specified
in Exhibit D.
7.4 Excess Energy. Excess Energy is Net Output, expressed in MWh, which Seller
delivers to Avista at the Point ofDelivery and/or at the Alternate Point of Delivery if applicable
under Section 11.2 that exceeds 10 aMW in a calendar Month. Avista, at its sole discretion, may
accept Excess Energy, but Avista will not pay for any Excess Energy. Where Avista does not
elect to accept Excess Energy, and Seller delivers such energy after notification by Avista in
accordance with Exhibit A, Seller shall pay Avista liquidated damages equal to $100 per MWh
of Excess Energy delivered to Avista. The Parties agree that the damages that Avista would
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incur due to Seller's delivery ofExcess Energy when Avista does not elect to accept Excess
Energy would be difficult or impossible to predict with certainty and the liquidated damages
contemplated by this provision are a fair and reasonable calculation of such damages and are not
a penalty.
7.5 Payments to Seller. Avista shall prepare and submit to Seller monthly
statements during the Term ofthe Agreement based upon Net Output delivered to Avista during
the previous month. Payments owed by Avista shall be paid no later than the 15 th day ofthe
month following the end ofthe monthly billing period or five days after the receipt of monthly
statement, whichever is later. Ifthe due date falls on a non-Business Day, then the payment shall
be due on the next Business Day.
7.6 Payments to Avista and Right of Set Qif. If Seller is obligated to make any
payment or refund to Avista, Seller agrees that Avista may set off such payment or refund
amount against any current or future payments due Seller under this Agreement. IfAvista does
not elect to set off, or ifno current or future payment is owed by Avista, Avista shall submit an
invoice to Seller for such payments. Seller shall pay Avista no later than the 15 th day ofthe
month following the end ofthe monthly billing period or five days after the receipt of monthly
statement, whichever is later. Ifthe due date falls on a non-Business Day, then the payment shall
be due on the next Business Day.
7.7 Interest. In addition to the remedies set forth in Section 16 ofthis Agreement,
any amounts owing after the due date specified in Sections 7.5 and 7.6 will be subject to interest
in the amount of one and one halfpercent (1.5%) per month, not to exceed the maximum rate
allowed by the law, multiplied by the unpaid balance.
7.8 Wire Transfer. All payments shall be made by ACH or wire transfer in
accordance with further agreement ofthe Parties.
8. INSURANCE
8.1 Insurance. Prior to operating the Facility, Seller, at its own cost, shall obtain and
maintain the following insurance in force over the term ofthis Agreement and shall provide
certificates of all insurance policies. All insurance policies required to fulfill the requirements of
this Section 8 shall include language requiring that any notice of cancellation or notice ofchange
in policy terms be sent to Avista by the insurance carrieres) at least sixty days prior to any change
or termination ofthe policies.
8.1.1 General Liability. Seller shall carry commercial general liability
insurance for bodily injury and property damage with a minimum limit equal to
$2,000,000 for each occurrence. The deductible shall not exceed the Seller's financial
ability to cover claims and shall not be greater than prevailing practices for similar
operations in the State ofidaho.
8.1.2 Property. Seller shall carryall-risk property insurance for repair or
replacement ofthe Facility. The limit ofproperty insurance shall be sufficient to restore
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operations in the event of reasonably foreseeable losses from natural, operational,
mechanical and human-caused perils. The deductible shall not exceed the Seller's
financial ability to fund the cost of losses and shall not be greater than prevailing
practices for similar operations in the State ofidaho.
8.1.3 Oualifying Insurance. The insurance coverage required by this Section 8
shall be obtained from an insurance company reasonably acceptable to Avista and shall
include an endorsement naming Avista as an additional insured and loss payee as
applicable.
8.1.4 Notice of Loss or Lapse ofinsurance by Seller. Ifthe insurance
coverage required by this Section 8 is lost or lapses for any reason, Seller will
immediately notify Avista in writing of such loss or lapse. Such notice shall advise
Avista of(i) the reason for such loss or lapse and (ii) the steps Seller is taking to replace
or reinstate coverage. Notice provided by the insurer required by Section 8.1 shall not
satisfy the notice requirement ofthis Section and Seller's failure to provide the notice
required by this Section and/or to promptly replace or reinstate coverage will constitute a
material breach ofthis Agreement.
8.2 Ongoing Security for Performance. For the Term ofthis Agreement, Seller will
provide Avista with the following:
8.2.1 Insurance. Upon Avista's request, Seller shall provide Avista evidence of
compliance with the provisions of Section 8.1. If Seller fails to comply, such failure will
be a material breach and may only be cured by Seller promptly supplying evidence that
the required insurance coverage has been replaced or reinstated.
8.3 Licenses and Permits. During the Term ofthis Agreement, Seller shall maintain
compliance with all permits and licenses described in Section 3.1 ofthis Agreement. In addition,
Seller will obtain, and supply Avista with copies of, any new or additional permits or licenses
that may be required for Seller's operations. If at any time Seller fails to maintain compliance
with the permits and licenses described in Section 3.1 or this Section, or to provide
documentation required by this Section, such failure will be a material breach ofthis Agreement
that may only be cured by Seller submitting to Avista evidence of compliance.
9. CURTAILMENT, INTERRUPTION OR REDUCTION OF DELIVERY
Avista may require Seller to curtail, interrupt or reduce delivery ofNet Output if, in
accordance with Section 10.2, Avista determines that curtailment, interruption or reduction is
necessary because ofa Force Majeure event or to protect persons or property from injury or
damage, or because of emergencies, necessary system maintenance, system modification or
special operating circumstances. Avista shall use commercially reasonable efforts to keep any
period ofcurtailment, interruption, or reduction to a minimum. In order not to interfere
unreasonably with Seller operations, Avista shall, to the extent practical, give Seller reasonable
prior notice of any curtailment, interruption, or reduction, the reason for its occurrence and its
probable duration. Seller understands and agrees that Avista may not be able to provide notice to
-12-
Seller prior to interruption, curtailment, or reduction of electrical energy deliveries to Avista in
emergency circumstances, real-time operations ofthe electric system, and/or unplanned events
10. OPERATION
10.1 Communications and Reporting. Avista and the Seller shall maintain
appropriate operating communications through the Communicating and Reporting Guidelines
specified in Exhibit A.
10.2 Excuse From Acceptance of Delivery of Energy.
10.2.1 Avista may curtail, interrupt, reduce or suspend delivery, receipt or
acceptance ofNet Output ifAvista, in its sole discretion, reasonably determines that such
curtailment, interruption, reduction or suspension is necessary, consistent with Prudent
Utility Practice, and that the failure to do so may:
(a)endanger any person or property, or Avista's electric system, or any
electric system with which Avista's system is interconnected;
(b)cause, or contribute to, an imminent significant disruption of electric
service to Avista's or another utility's customers;
(c)interfere with any construction, installation, inspection, testing, repair,
replacement, improvement, alteration, modification, operation, use or
maintenance of, or addition to, Avista's electric system or other property of
Avista; or
(d)cause, contribute to, or necessitate operation of any ofAvista's hydro
electric projects in violation of any license or other regulatory requirements.
10.2.2 Avista shall promptly notify Seller ofthe reasons for any such curtailment,
interruption, reduction or suspension provided for in Section 10.2. Avista shall use
reasonable efforts to limit the duration of any such curtailment, interruption, reduction or
suspension.
10.3 Seller's Risk. Seller shall design, construct, own, operate 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, ofany goverrunental
authority.
10.4 Avista's Right to Inspect. Seller shall permit Avista to inspect and audit the
Facility, any related production, delivery and scheduling documentation or the operation, use or
maintenance ofthe Facility at any reasonable time and upon reasonable notice.
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10.5 Seller Obligations in Accordance with Prudent Utility Practices. Seller shall
own, operate and maintain the Facility and any Seller-owned facilities in accordance with Prudent
Utility Practices.
11.0 INTERCONNECTION AND TRANSMISSION
11.1 Seller shall make all necessary arrangements and pay all costs to interconnect its
Facility with the electrical system ofthe Transmitting Entity. Attached as Exhibit F is the
Interconnection and Operating Agreement.
11.2 In the event that Seller or Avista is required to curtail, interrupt or reduce delivery
ofNet Output to the Point of Delivery, Seller may use reasonable commercial efforts to arrange,
at Seller's sole expense, for delivery ofNet Output at a secondary point of delivery ("Alternate
Point of Delivery"). Avista will use reasonable commercial efforts to accept Net Output at such
Alternate Point ofDelivery;provided, however, that the Parties have enabled and established the
use of such Alternate Point ofDelivery pursuant to Section 11.3.
11.3 Seller shall be responsible for any and all costs and expenses related to the
transmission ofNet Output to the Point of Delivery or any Alternate Point ofDelivery under this
Agreement, including but not limited to Ancillary Services and any costs or expenses incurred by
Avista resulting from enabling and establishing Avista's ability to accept Net Output at the Point
ofDelivery and any Alternate Point of Delivery. Such costs and expenses shall include those
for metering and other parallel operation facilities specified in Exhibit G.
12. FORCE MAJEURE
12.1 Neither Party shall be liable to the other Party, or be considered to be in breach of
or default under this Agreement, for delay in performance due to a cause or condition beyond
such Party's reasonable control which despite the exercise ofreasonable due diligence, such
Party is unable to prevent or overcome ("Force Majeure"), including but not limited to:
(a)fire, flood, earthquake, volcanic activity; court order and act of civil, military
or governmental authority; strike, lockout and other labor dispute; riot, insurrection,
sabotage or war; unanticipated electrical disturbance originating in or transmitted through
such Party's electric system or any electric system with which such Party's system is
interconnected; or
(b)an 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.
12.2 In the event of Force Majeure event, the time for performance shall be extended
by a period oftime reasonably necessary to overcome such delay. Avista shall not be required to
pay for Net Output which, as a result of any Force Majeure event, is not delivered.
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12.3 Nothing contained in this Section shall require any Party to settle any strike,
lockout or other labor dispute.
12.4 In the event of Force Majeure event, the delayed Party shall provide the other
Party notice by telephone or email as soon as reasonably practicable and written notice within
fourteen days after the occurrence ofthe Force Majeure event. Such notice shall include the
particulars ofthe occurrence. The suspension ofperformance shall be ofno greater scope and no
longer duration than is required by the Force Majeure and the delayed Party shall use its best
efforts to remedy its inability to perform.
12.5 Force Majeure shall include any unforeseen electrical disturbance that prevents
any electric energy deliveries from occurring at the Point of Delivery and at any Alternate Point
o fDelivery.
13. INDEMNITY
13.1 Each Party shall defend, indemnify and hold harmless, the other Party, its
directors, officers, employees, and agents (as the "Indemnitee") from and against all claims,
demands, causes ofaction, judgments, liabilities and associated costs and expenses (including
reasonable attorney's fees) to the extent arising from or attributable to the performance or non-
performance ofthat Party's (as the "Indemnitor") obligations under this Agreement, including
but not limited to, damage to tangible property and bodily injury or death suffered by any person
(including employees of Seller or Avista or the public), provided that:
(a)No Indemnitee shall be indemnified for any loss, liability, injury, or damage resulting
from its sole negligence, gross negligence, fraud or willful misconduct; and
(b)The Indemnitor shall be entitled, at its option, to assume and control the defense and
any settlement of such suit.
Each indemnity set forth in this Section is a continuing obligation, separate and independent of
the other obligations of each Party and shall survive the expiration or termination ofthis
Agreement.
13.2 SELLER AND AVISTA 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.
13.3 EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY
SHALL BE LIABLE UNDER ANY PROVISION OF THIS AGREEMENT FOR ANY
SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES,
INCLUDING BUT NOT LIMITED TO LOSS OF PROFIT, SAVINGS OR REVENUE,
LOSS OF THE USE OF EQUIPMENT, COST OF CAPITAL, OR COST OF
TEMPORARY EQUIPMENT OR SERVICES, WHETHER BASED IN WHOLE OR IN
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PART IN CONTRACT, IN TORT, INCLUDING NEGLIGENCE, STRICT LIABILITY,
OR ANY OTHER THEORY OF LIABILITY.
14.ASSIGNMENT
14.1 Seller shall not assign its rights or delegate its duties under this Agreement
without the prior written consent ofAvista, which consent shall not be unreasonably withheld.
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.
14.2 Seller shall have the right, subject to the obligations in Section 8, without Avista's
consent, but with a thirty days prior written notice to Avista, to make collateral assignments ofits
rights under this Agreement to satisfy the requirements of any development, construction, or
other reasonable long term financing. A collateral assignment shall not constitute a delegation of
Seller's obligations under this Agreement, and this Agreement shall not bind the collateral
assignee. Any collateral assignee succeeding to any portion ofthe ownership interest of Seller
shall be considered Seller's successor in interest and shall thereafter be bound by this
Agreement.
15.NO UNSPECIFIED THIRD PARTY BENEFICIARIES
There are no third party beneficiaries ofthis 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 14.
16.DEFAULT AND TERMINATION
16.1 In addition to any other breach or failure to perform under this Agreement that is
not otherwise excused under this Agreement, each ofthe following events shall constitute a
Default:
(a)Seller abandons the Facility;
(b)The Facility ceases to be a Qualifying Facility;
(c)A Party becomes insolvent (e.g., is unable to meet its obligations as they
become due or its liabilities exceed its assets);
(d)Seller 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
reliefunder any applicable insolvency laws;
(e)Seller has filed against it a petition for bankruptcy, reorganization or other
reliefunder any applicable insolvency laws and such petition is not dismissed or stayed
within sixty days after it is filed;
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(f)Seller is in default under any Agreement related to this Agreement;
(g)Termination, cancellation or expiration ofany agreement required for Seller to
deliver Net Output to Avista under this Agreement, including but not limited to the
Interconnection and Operating Agreement;
16.2 Notice and Opportunity to Cure. In the event of Default, the non-Defaulting
Party shall give written notice to the Defaulting Party ofa Default in accordance with Section 29.
Except where the applicable section provides a cure period for the applicable default, ifthe
Defaulting Party has not cured the breach within thirty days after receipt of such written notice,
the non-Defaulting Party may, at its option, terminate this Agreement and/or pursue any remedy
available to it in law or equity; provided that, ifa Default occurs under Sections 16.1(a), 16.1(d)
and/or 16.1 (e), Avista may immediately terminate this Agreement without opportunity to cure,
and such termination shall become effective upon written notice ofDefault.
16.3 Additional Rights and Remedies. Any right or remedy afforded to either Party
under this Agreement on account of Default by the other Party is in addition to, and not in lieu
of, all other rights or remedies available to such Party under any other provisions ofthis
Agreement, by law or otherwise on account of the Default.
17.DISPUTE RESOLUTION
Each Party shall strive to resolve any and all differences during the term ofthe
Agreement through meetings and discussions. If a dispute cannot be resolved within a
reasonable time, not to exceed thirty days, each Party shall escalate the unresolved dispute to a
senior officer designated by each Party. If the senior officers are not able to resolve the dispute
within ten Business Days of escalation then either Party may either agree to mediate or arbitrate
the dispute or request a hearing before the Commission.
18.RELEASE BY SELLER
Seller releases Avista from any and all claims, losses, harm, liabilities, damages, costs
and expenses to the extent resulting from any:
18.1 Electric disturbance or fluctuation that migrates, directly or indirectly, from
Avista's electric system to the Facility;
18.2 Interruption, suspension or curtailment ofelectric service to the Facility or any
other premises owned, possessed, controlled or served by Seller, which interruption, suspension
or curtailment is caused or contributed to by the Facility or the interconnection ofthe Facility;
18.3 Disconnection, interruption, suspension or curtailment by Avista pursuant to
terms ofthis Agreement or the Interconnection and Operating Agreement.
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19.GOVERNMENTAL AUTHORITY
This Agreement is subject to the rules, regulations, orders and other requirements, of all
governmental authorities having jurisdiction over the Facility, this Agreement, the Parties or
either ofthem, including Section 210 ofPURPA. All laws, ordinances, rules, regulations, orders
and other requirements of governmental authorities that are required to be incorporated in
agreements ofthis character are by this reference incorporated in this Agreement.
20.SEVERAL OBLIGATIONS
The duties, obligations and liabilities ofthe Parties under this Agreement are intended to
be several notj oint or collective. This Agreement shall not be interpreted or construed to create
an association, joint venture or partnership between the Parties. 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.
21.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 ofthis Agreement.
22.NON-WAIVER
The failure of either Party to insist upon or enforce strict performance by the other Party
of any provision ofthis Agreement or to exercise any right under this Agreement shall not be
construed as a waiver or relinquishment of such Party's right to assert or rely upon any such
provision or right in that or any subsequent instance; rather, the same shall be and remain in full
force and effect.
23.AMENDMENT
No change, amendment or modification of any provision ofthis Agreement shall be valid
unless set forth in a written amendment to this Agreement signed by both Parties and
subsequently approved by the Commission.
24.CHOICE OF LAWS AND VENUE
This Agreement shall be construed and interpreted in accordance with the laws ofthe
State of Idaho without reference to its choice of law provisions. Venue for any litigation arising
out of or related to this Agreement shall lie in the District Court ofthe Fourth Judicial District of
Idaho in and for the County ofAda.
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25.HEADINGS
The Section headings in this Agreement are for convenience only and shall not be
considered part of or used in the interpretation ofthis Agreement.
26.SEVERABILITY
The invalidity or unenforceability of any provision ofthis Agreement shall not affect the
validity or enforceability of any other provision ofthis Agreement, and this Agreement shall be
construed in all respects as ifthe invalid or unenforceable provision were omitted.
27.COUNTERPARTS
This Agreement may be executed in two or more counterparts, each ofwhich shall be
deemed as an original, and together shall constitute one and the same document.
28.TAXES
Each Party shall pay before delinquency all taxes and other governmental charges for
which such Party is responsible and which, iffailed to be paid when due, could result in a lien
upon the Facility.
29.NOTICES
Unless otherwise specified, all written notices or other communications required by or
provided under this Agreement shall be mailed or delivered to the following addresses, and shall
be considered delivered when deposited in the US Mail, postage prepaid, by certified or
registered mail or delivered in person:
to Avista: Director, Power Supply
Avista Corporation
P.O. Box 3727
Spokane, WA 99220
to Seller: General Manager
Kootenai Electric Cooperative, Inc.
2451 W. Dakota Avenue
Hayden, Idaho 83835-0278
Either Party may change its designated representative to receive notice and/or address
specified above by giving the other Party written notice of such change.
30.SURVIVAL
Rights and obligations which, by their nature, should survive termination or expiration of
this Agreement, will remain in effect until satisfied, including without limitation, all outstanding
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financial obligations, and the provisions of Section 13 (Indemnity) and Section 17 (Dispute
Resolution).
31. ENTIRE AGREEMENT
This Agreement, including the following exhibits which are attached and incorporated by
reference herein, constitutes the entire agreement ofthe Parties and supersedes all prior and
contemporaneous oral or written agreements between the Parties with respect to the subject
matter hereof.
Exhibit A Communications and Reporting
Exhibit B Independent Engineering Certifications for Construction Adequacy for a
Qualifying Facility and Operations and Maintenance Policy
Exhibit C Project Description and Point ofDelivery
Exhibit D Avoided Cost Rates
ExhibitE Initial Capacity Determination Documentation
Exhibit F Interconnection and Operating Agreement
Exhibit G Facilities for Integration and Operation ofFighting Creek
Facility
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives as ofthe date set forth below.
KOOTENAI ELECTRIC
COOPERATIVE, INC AVISTA CORPORATION
By: Q. By:
PrintedName: Douglas A. Elliott PrintedName:
Title: General Manager Title:
Date: 3. Date: \ /Jaci _
-21 -
Exhibit A
Communication and Reporting
(1) Email communications between Seller and Avista shall be submitted to:
Avista: [e-mail] ; or
[e-mail]
Seller: [e-mail]
Alternate: [e-mail]
(2) All oral communications relating to electric energy scheduling, generation level changes,
interruptions or outages between Seller and Avista will be communicated on a recorded line as
follows:
(a)Pre-Schedule (5:30 am to 12:00 noon on Business Days):
Avista Pre-Scheduler: [phone]
Alternate Phone: [phone]
Seller: [phone] (Shawn Dolan)
Alternate Phone: [phone] (Doug Elliott)
(b)Real-Time Schedule (available 24 hours a day)
Avista Real-Time Scheduler: [phone]
Seller: [phone] (Shawn Dolan)
Alternate Phone: [phone] (Doug Elliott)
(3) Either Party may change its contact information upon written notice to the other Party.
- 1 -
ExhibitB
Independent Engineering Certification for
Construction Adequacy for Qualifying Facility
1.I, am a licensed professional engineer registered to
practice and in good standing in the State of . I have substantial experience in the design,
construction and operation of electric power plants ofthe same type as Fighting Creek Landfill
Gas to Energy Facility sited at the Kootenai County Solid Waste Facility, near Beligrove, Idaho
(the "Facility").
2.I have reviewed and/or supervised the review ofthe construction in progress and
ofthe completed Facility and it is my professional opinion that said Facility has been designed
and built according to appropriate plans and specifications bearing the words "CERTIFIED FOR
IDAHO P.U.C. SECURITY ACCEPTANCE" and with the stamp ofthe certifying licensed
professional engineer ofthe design, and that the Facility was built to commercially acceptable
standards for this type of facility.
3.I have no economic relationship to the designer or owner of said Facility and have
made my analysis ofthe plans and specifications independently.
4.I hereby CERTIFY that the above statements are complete, true, and accurate to
the best ofmy knowledge and I therefore set my hand and seal below.
Signed and Sealed
DATE: -
SIGNATURE: -
PRINTED NAME: -
-1-
Independent Engineering Certification for
Operations and Maintenance Policy for a Qualifying Facility
1.I, am a licensed professional engineer registered to practice
and in good standing in the State of . I have substantial experience in the design,
construction and operation of electric power plants ofthe same type as Fighting Creek Landfill
Gas to Energy Facility sited at the Kootenai County Solid Waste Facility, near Bellgrove, Idaho
(the "Facility").
2.I have reviewed and/or supervised the review o fthe Policy for Operation and
Maintenance ("O&M Policy") for the Facility and it is my professional opinion that, provided
said Facility has been designed and built to appropriate standards, adherence to said O&M Policy
will result in the Facility's producing at or near the design electrical output, efficiency, and
capacity factor for twenty years, barring unforeseeable Force Maj eure.
3.I have no economic relationship to the designer or owner of said Facility and have
made my analysis ofthe plans and specifications independently.
4.I have supplied the owner ofthe Plant with at least one copy of said O&M Policy
bearing my Stamp and the words "CERTIFIED FOR IDAHO P.D.C. SECURITY
ACCEPTANCE" on each sheet thereof.
5.I hereby CERTIFY that the above statements are complete, true, and accurate to
the best ofmy knowledge and I therefore set my hand and seal below.
Signed and Sealed
DATE: -
SIGNATURE: -
PRINTED NAME: -
Exhibit ç
Project Descriptionand Point offleliverv
Description ofth Facility:
Seller's Facility is described as the Fighting Creek Landfill Gas to Energy Facility and consists
of: Two 1.6 MW generators each powered by a Caterpillar Model 3520, spark ignited,
reciprocating internal combustion engines electrically interconnected to Seller's 24.9 kV
distribution facilities terminated on the project busbar. The Project will use methane gas
produced by decomposition ofwaste interned within landfill The Project is located at Kootenai
County Solid Waste Facility (W116.93 , N47.532), near Bellgrove, Idaho.
Location:
Seller's Facility is located at: Kootenai County Solid Waste Facility (W116.93
N47.532), near Beligrove, Idaho.
Point of Delivery:
I
Point of Delivery Location: The point where Avista's Dower- Post Falls IISkV Tap
Transmission Line and KEC's Dower - Post Falls IISkV Tap Transmission Line are
connected.
Alternate Point of Delivery:
Alternate Point of Delivery Location: The point where Avista's Dower - Post Falls
IISkV Tap Transmission Line served via Avista's Post Falls - Ramsey IISkV
Transmission Line and KEC's Dower - Post Falls IISkV Tap Transmission Line are
connected.
Point of Metering:
Metering Location: In Seller's Facility, on the 24.9 kV side ofthe generator step-up
transformer over which electric power and energy flows.
2
Exhibit D
Avoided Cost Rates
Period
Heavy Light
Load Load
Hours Hours
$/MWh $/MWh
Jan 2012 - Feb 2012
Mar 2012 - Jun 2012
Jul 2012- Dec 2012
Jan 2013- Feb 2013
Mar 2013 - Jun 2013
Jul 2013 - Dec 2013

$59.55 $54.15

$46.32 $42.12

$59.55 $54.15

$61.40 $56.00

$47.76 $43.56

$61.40 $56.00
ExhibitE
Initial Capacity Determination Documentation
Within fifteen (15) days after a Commission order specified in Section 4.2 approving this
Agreement, the Seller shall provide to Avista;
1.the manufacturer's serial number and specifications for each engine - generator installed
at the Facility.
2.the Initial Capacity Determination ofthe Facility, expressed in kilowatts at the Point of
Delivery, which is equal to the sum ofthe Facility's gross output values identified and
provided in Exhibit C, less Facility Service Power and Losses.
ExhibitF
Interconnection and Operating Agreement
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Avsta Contract No. AVTR11-020-1
INTERCONNECTION AND OPERATING AGREEMENT
between
AVISTA CORPORATION
and
KOOTENAI ELECTRIC COOPERATIVE,INC.
AMENDED AND RESTATED
This AMENDED AND RESTATED INTERCONNECTION AND OPERATING
AGREEMENT ('Agreement") is executed by and between AVISTA CORPORATION ("Avista")
and KOOTENAI ELECTRIC COOPERATIVE, INC. ("KEC"), which hereinafter may be referred
to individually as "Party" or collectively as "Parties",
RECITALS
WHEREAS, Avista and KEC currently operate interconnected electric systems; and
WHEREAS. the terms and conditions governing the operation and maintenance of the
interconnected electric systems of Avista and KEC have historically been pursuant to a power
sales agreement between KEC and the Bonneville Power Administration ("Bonneville") and a
General Transfer Agreement between Avista and Bonneville (Bonneville Contract No, DE-
MS79-86BP91 970) (collectively the "Historical Power and Transfer Agreements"); and
WHEREAS. KEC and Bonneville have executed new power sales and network
transmission service agreements effective October 1, 2001 and October 1, 2011 (collectively
the "Power and Transmission Agreements"); and
Page 1
WHEREAS. upon the expiration of the General Transfer Agreement between Avista and
Bonneville at 2400 hours on December 31. 2005, the Historical Power and Transfer Agreements
no longer provide for terms and conditions governing the operation and maintenance of the
interconnected electric systems of Avisia and KEC; and
WHEREAS. in order to facilitate the coniinued delivery of electric power from Bonneville
to KEC, Avista and Bonneville have executed a service agreement under Avisia's Open Access
Transmission Tariff - FERC Electric Tariff Volume No. 8 ("Tariff") pursuant to which Avista
provides network integration transmission service to Bonneville for such deliveries to KEC; and
WHEREAS. at some future point in iime KEC may elect to execute a service agreement
under Avista's Tariff, replacing the aforementioned agreement between Avista and Bonneville,
to facilitate the delivery of electric power to kEC; and
WHEREAS, Avista and KEC desire to provide for the terms and conditions for the
operation and maintenance of their interconnected electric systems; and
WHEREAS. Avista and KEC are amending and restating the Interconnection and
Operating Agreement between the Parties (Avista Contract No. AV-TR05-0205), originally dated
November 29, 2005. to incorporate, among other things, provisions regarding Generating
Projects.
NOW, THEREFORE, the Parties agree as follows;
Section 1 - Definitions

1.1 Ancillary Services - Those services that are necessary to support the transmission of
capacity and energy from resources to loads while maintaining reliable operation of
Avista's transmission system In accordance with Industry Standards and Good Utility
Practice.

1.2 Commission - The Federal Energy Regulatory Commission, or its regulatory successor.
Page 2
1.3 Direct Assionment Facilities - Facilities or portions of facilities that are constructed by
Avista for the sole use or benefit of KEG.
1.4 Generatkg Proiect - Any electric generating facility, except an electric generating facility
that is net metered pursuant to applicable state law. that is electrically connected to KEC
and operated in parallel with Avista's electric system through the Points of Delivery.
1.5 Good Utility Practice - The practices, methods and acts engaged in or approved by a
significant portion of the electric utility industry during the relevant time period, or the
practices, methods and acts which, in the exercise of reasonable judgment in light of the
facts known at the time the decision was made, could have been expected to
accomplish the desired result at a reasonable cost consistent with good business
practices, reliability, safety, and expedition. Good Utility Practice is not intended to be
limited to the optimum practice, method or act to the exclusion of all others, but rather to
be a range of acceptable practices, methods or acts.
1.6 Industry Standards - The standards, criteria and requirements of NERC, WECC and the
NWPP, as such standards, criteria and requirements may be revised from time to time.
1.7 Native Load Customers - The wholesale and retail power customers of either Party on
whose behalf that Party, by statute, franchise, regulatory requirement, or contract.
undertakes an obligation to construct and operate that Party's system to meet the
reliable electric needs of such customers.
1.8 NERC - The N011h American Electric Reliability Council, or its successor.
1.9 NWPP - The Northwest Power Pool, or its successor.
1.10 Point(s) of Delivery - Those points of interconnection as specified in Exhibit A of this
Agreement.
1.11 Service Commencement Date - The date whereupon Avista first commences providing
network integration transmission service to KEC or to Bonneville pursuant to a service
Page 3
agreement under the Tariff for the delivery of eiectric power to KEC, which is January 1.
2006.
1.12 Tariff - Avista's Open Access Transmission Tariff - FERC Electric Tariff Volume No 8
as such may be amended or replaced.
1.13 Transmission Service - Network integration transmission service including transfer
service over substation facilities distribution facilities or Direct Assignment Facilities
provided pursuant to the Tariff or any other agreement between the Parties.
1.14 WECC - The Western Electricity Coordinating Council, or its successor.
Section Term of Agreement

2.1 Effective Date - The effective date of this Agreement shall be the later of:
(a)the date this Agreement is executed by both Parties; or
(b)the date this Agreement is accepted for filing by the Commission, without any
change or condition by the Commission which is unacceptable to either Avista or
KEC, provided, however, that by executing this Agreement KEC does not
consent to any jurisdiction by the Commission that the Commission does not
already have over KEC.

2.2 ] - The term DI this Agreement shall commence on the effective date and shall
continue for ten (10) years from the Service Commencement Date, except as provided in
Section 2.3 below.

2.3 Continuation of Term - The term of this Agreement shall continue beyond ten (10) years
from the Service Commencement Date unless affirmatively terminated in writing upOn
tWD (2) years' written notice by either Party ID the Dther Party.
Page 4
Section 3-Exhibits
The following Exhibits are attached and incorporated by reference herein:
Exhibit A - Points of Delivery
Exhibit B - Meter Reading and Meter Test Procedures
Exhibit C - Substation Construction and Ownership Guidelines
Exhibit D - Generating Projects
Exhibit E - Generation Interconnection Guidelines and Standards
Section 4 Services Provided by Avista or Other Parties
4.1 Transmission Service - KEC, or Bonneville on behalf of KEC, requires Transmission
Service to the Points of Delivery in order to serve KEG's Native Load Customers.
Transmission Service is not prOVided for under this Agreement, but shall be provided for
pursuant to the Tariff or other agreement between the Parties or between Avista and
Bonneville.
4.2 Ancillary Services - KEC, or Bonneville on behalf of KEG, requires Ancillary Services in
order to serve KEC's Native Load Customers via the Points of Delivery. Ancillary
Services are not provided for under this Agreement. but shall be provided for pursuant to
the Tariff or another agreement between the Parties or between Avista and Bonneville.
Section 5 • Points of Delivery and Facilities
5.1 Additional Points of Delivery - During the term of this Agreement, KEC may, in
accordance with Good Utility Practice and, when applicable, upon Avista's approval, add
new Points of Delivery such as to facilitate Transmission Service under the Tariff.
Subject to the foregoing, the Parties shall add any such new Point of Delivery concurrent
with the commencement of Transmission Service under the Tariff to such new Point of
Delivery.
Page 5
5.2 Ownership of Facilities
(a)Except as otherwise expressly provided, ownership of any and all equipment and
all salvable facilities installed or previously installed by either Party on the
property of the other Party shall be and remain with the owning Party.
(b)Each Party shall identify all movable equipment and, to the extent agreed upon
by the Parties, all other salvable facilities that are installed by such Party on the
property of the other, by permanently affixing thereto suitable markers plainly
identifying the owner of the equipment. Within a reasonable time subsequent to
initial installation, and subsequent to any modification of such installation.
representatives of the Parties shall jointly prepare an itemized list of said
movable equipment and salvable facilities so installed.
(c)Each Party shall be responsible for the cost of compliance with the requirements
of all applicable Federal, State, and local environmental laws for its own facilities,
even when such facilities are located on the property of the other Party.
(d)Construction and ownership of facilities inside an Avista substation shall be
SUbject to the Substation Construction and Ownership Guidelines outlined in
Exhibit C.
5.3 Addition of Facilities - Any incremental costs of additions or modifications to Avista's
equipment and facilities in order to provide Transmission Service or Ancillary Services at
the Points of Delivery or for Generating Projects shall be provided for pursuant to the
Tariff or another agreement between the Parties.
5.4 Permits
(a) if any equipment or facilities associated with any Point of Delivery and belonging
to a Party are, or are planned to be, located on the property of the other Party, a
permit to install, test, maintain, inspect, replace, repair, and operate during the
term of this Agreement and to remove such equipment and facilities at the
Page 6
expiration of the Term, together with the right of entry to said property at all
reasonable times, is hereby granted by the other Party, provided, however, that
permits to perform ground excavation are exempted from this Section 5.4(a).
(b)Each Party shall have the right at all reasonable times to enter the property of the
other Party for the purpose of reading any and all meters mentioned in this
Agreement that are installed on such property, provided, however, that such right
shall be consistent with and SUbject to any applicable national security
requirements.
(c)If either Party is required or permitted to install, test, maintain, inspect, replace,
repair, remove, or operate equipment on the property of the other, the owner of
such property shall furnish the other Party with accurate drawings and wiring
diagrams of associated equipment and facilities, or, if such drawings or diagrams
are not available, shall furnish accurate information regarding such equipment or
facilities. The owner of such property shall notify the other Party of any
subsequent modification that may affect the duties of the other Party in regard to
such equipment, and furnish the other Party with accurate revised drawings, if
possible.
5.5 Inspection of Facilities - Either Party may inspect the other Party's electric installation for
any reasonable purpose at any reasonable time upon reasonable notice to the other
Party. Such inspection, or failure to inspect, shall not render such Party, its officers,
agents. or employees, liable or responsible for any injury, loss, damage, or accident
resulting from defects in such electric installation, or for violation of this Agreement. The
inspecting Party shall observe written instructions and rules posted in facilities and such
other necessary instructions or standards for inspection as the Parties may agree upon.
Only Generating Projects and those electric installations used in complying with the
terms of this Agreement shall be subject to inspection.
Page 7
Section 6 Metering
6.1 Meters and Meter Reading - As of the Effective Date, meters at the Points of Delivery
are provided for under the Power and Transmission Agreements. Unless provided by
Bonneville pursuant to the Power and Transmission Agreements or any subsequent
agreement between Bonneville and KEG Avista and/or KEG shall own and maintain all
meters, including meters for Generating Projects, used to determine any billing
associated with this Agreement, a service agreement under the Tariff providing for the
delivery of electric power to the Point(s) of Delivery, or any other agreement between the
Parties. Meters at the Point{s) of Delivery and Generating Project(s) shall be read
pursuant to the Meter Reading and Meter Test Procedures outlined in Exhibit B.
6.2 Tests of Metering Installations - Each Party shall, at its expense, test its measuring
installations associated with this Agreement, a service agreement under the Tariff
providing for the delivery of electric power to the Point(s) of Delivery, or any other
agreement between the Parties, in accordance with the Meter Reading and Meter Test
Procedures outlined in Exhibit B. The Parties may mutually agree to use a single set of
meters. In the event that a single set of meters are utilized, tests of such meters shall be
conducted jointly by the Parties in accordance with Exhibit B and shall be witnessed and
agreed to by representatives of each Party.
6.3 Metering and Communications Required for Ancillary Services - To the extent not
provided by Bonneville pursuant to its agreements with KEC, KEC shall be responsible
for all costs associated with the installation, operation, and maintenance of any metering
and communications equipment necessary for the provision of Ancillary Services either
by Avista, KEG, or by a third party. All such metering installations shall be installed.
operated. and maintained pursuant to Industry Standards and Good Utility Practice.
Page 8
6.4 Measurements and lnstaliatiDn DI Avista Meters - NDtwithstanding any Dther provisiDn in
this SectiDn 6. Avista may at any time install meters Dr metering equipment tD make any
measurements fDr any PDint Of Delivery Dr Generating PrDject required fDr any
cDmputatiDn Dr determinatiOn mentiOned in this Agreement. a service agreement under
the Tariff prDviding fDr the delivery Of electric pDwer to the Point(s) Df Delivery, or any
other agreement between the Parties, and if such meters or metering equipment are SD
installed, such measurements shall be used thereafter in such cDmputatiDn D
determination.
6.5 Real-Time Data Acquisition
(a)PDintls) of Delivery - For the purpose of enabling Avista to mDnitor the loads on
its transmission system, Avista may require the acquisition of real-time load data
(MW and Mvar) at Points of Delivery at Dr above 69kV. The Parties shall
facilitate such data acquisitiDn pursuant to the SubstatiDn ConstructiDn and
Ownership Guidelines outlined in Exhibit C.
(b)Generatinq Project(s) - Real-time data acqUisition. which shall include at a
minimum real power and energy (MW, MWh) and reactive power (Mvar, Mvarh),
is required for any Generating Project Of aggregate output equal to or exceeding
3 MVA. Avista may specify real-time data acquisition needs Di a case by case
basis for Generating Projects that remain below 3 MVA. The Parties shall
facilitate such data acquisitiDn pursuant to the GeneratiDn Interconnection
Guidelines and Standards outlined in Exhibit E.
Section 7 Operation and Maintenance
7.1 QDeratiDn and Maintenance of Interconnected Facilities - Avista and KEC shall maintain
the facilities enabling the POint(s) of Delivery described in Exhibit A in gDod working
order and shall operate and maintain their respective interconnected facilities pursuant
Page 9
to Industry Standards and Good Utility Practice. The Parties shall adhere to the
Substation Construction and Ownership Guidelines outlined in Exhibit C.
7.2 Operation of KEC's Points of Delivery - AVista shall have primary operating
responsibility in all Avista substations. This responsibility specifically includes the
distribution feeder protective device at each Point of Delivery in Avista substations, and
all switching operations in such substations. Operation of apparatus owned by KEC in
Avista's sUbstations shall be the responsibility of KEC, subject to switching orders
received from Avista system operations personnel. KEC personnel shall adhere to the
Avista requirement that anyone entering an Avista substation notify Avista system
operations of their presence and their operational intentions. Operation of KEC
equipment at each Point of Delivery not located in an Avista substation shall be
coordinated with Avista system operations personnel to the extent practicable pursuant
to Industry Standards and Good Utility Practice.
7.3 Ooeralor's Qualifications - KEC's personnel who perform operations in Avista's
substations or on line facilities at a Point of Delivery are required to meet the applicable
operating requirements of KEC. Such personnel shall be familiar with the operation of
all substation or line facilities and equipment that concerns his or her position and be
fully aware of the hazards connected therewith, or have passed a journeyman's
examination for lhe particular branch of the electrical trades with which he or she may be
connected.
7.4 Power Quality - The interconnection of Avista and KEC facilities requires mutual
responsibilities with respect to quality of service to both Parties' customers.
(a) Character of Service - Unless otherwise provided in this Agreement, Avista will
make electric power available to KEC in the form of three-phase alternating
current at a nominal frequency of sixty (60) hertz.
Page 10
(b)Abnormal Voltage Magnitudes - Both Parties shall operate and maintain their
facilities such that the other Party's steady-state voltage levels at the Points of
Delivery at or above 100 kV are manageable to within ± 5% of the steady-state
operating voltage and at the Points of Delivery below 100kV are manageable to
within ± 10% of the steady-state operating voltage specified for each Point of
Delivery. Both Parties shall also design, construct. operate and maintain its
electric facilities in accordance with Industry Standards and Good Utility Practice
to reduce to acceptable levels any momentary voltage fluctuations that affect the
other Party's facilities.
(c)Frequency Control - Both Parties shall operate and maintain their systems to
enable the Avista control area to maintain its frequency control obligations to
applicable regional operating criteria.
(d)Harmonic Control - Each Party shall design, construct. operate, maintain and
use its electric facilities in accordance with the IEEE 519 standard and Good
Utility Practice to reduce to acceptable levels the harmonic currents and voltages
which pass into the other Party's facilities. Harmonic reductions shall be
accomplished with equipment that is specifically designed and permanently
operated and maintained as an integral part of the facilities of the Party that owns
the system on which harmonics are generated.
7.5 Reactive Power - The Parties shall jointly plan and operate their interconnected
electrical facilities pursuant to Industry Standards and Good Utility Practice in order to
minimize the reactive power requirements placed upon the other Party. Pursuant to
such joint planning and operation, Avista may require KEC to install necessary
equipment or implement necessary operating practices on KEC's system to assure that
deliveries at the Points of Delivery, pursuant to any transmission service agreement, are
at a power factor no less than 0.95 leading or lagging.
Page 11

7.6 Balancina Phase Demands - If required by Avista at any time during the term of this
Agreement and pursuant ID Industry Standards and GDod Utility Practice, KEC shall
make such changes as are necessary D-i its system to balance the phase currents at
any Point Df Delivery such that the current Df any Dne phase not deviate by more than
five (5) percent from the average of the currents on all three phases, unless otherwise
agreed upon by the Parties.

7.7 Remedial ActiDns - Avista may require KEC ID participate in or carry KEC's pro rata
share DI any remedial actiDn scheme that may be required ID support the reiiability of
Avista's system Dr the regiDnal Dr sub-regional transmissiDn systems. In such case,
Avista and KEC shall joinily plan and coordinate the implementatiDn Df the required
remedial action scheme pursuant ID Industry Standards and GDDd Utility Practice.

7.8 Automatic Under-frequencyLoad Shedding Protection
(a)Avista may require KEC to participate, up to its pro rata share, in the WECC
CDordinated Off-NDminal Frequency Load Shedding and Restoration Plan Or a
successor program that is required to support the reliability of Avista's system or
the regional or sub-regional transmission systems.
(b)Such pro-rata share shall be determined by the proportion of the total load of
KEG's Native Load Customers to the sum of the total loads of Avista's Native
Load Customers, KEC's Native Load Customers and the native IDad custDmers
of other parties served directly by Avista's Transmission System. Avista and
KEC shall jDintly plan and cDordinate the implementation Of such protectiDn
pursuant to Industry Standards and Good Utility Practice, provided, however, that
KEC shall have the righttD specify which Of its loads are ID apply to meet its pro
rata obligation Or autDmaiic under-frequency IDad shedding. If such loads are
served via a PDint of Delivery where KEC owns the distribution feeder protectiDn
device, KEC shall provide, install, operate and maintain the necessary relay
Page 12
equipment on KEG's distribution system. at KEG's cost, pursuant to Industry
Standards.
(c)Generating Projects shall remain online during abnormal frequency conditions or
KEG shall trip an equivalent amount of load at the frequency point at which each
Generating Project trips, consistent with Industry Standards.
7.9 Generating Proiects
(a)All Generating Projects shail be listed in Exhibit D of this Agreement.
(b)KEG shall plan and interconnect, and shall require that any third-party
Generating Project agree by contract to plan and interconnect, such Generating
Project consistent with Industry Standards and Good Utility Practice, and the
Generation Interconnection Guidelines and Standards outlined in Exhibit E.
(c)The Parties shall establish operating procedures for each Generation Project
which shall include, but not be limited to, specifying system configuration and
conditions under which tile Generating Project may and may not operate.
7.10 Maintenance Responsibility - The owner of any equipment shall retain maintenance
responsibility for such equipment, except for any required earth excavation inside a
substation as provided below.
(a)Excavation Inside an Avista Substation - Any earth excavation inside an Avista
substation shall be performed by Avista or Avista's authorized agents and shall
be the responsibility of Avista. To the extent that excavation is performed on
behalf of KEG. for KEG's sote or joint benefit, KEG shall reimburse Avista for an
appropriate share of the costs associated with such excavation.
(b)Excavation Inside a KEG Substation - Any earth excavation inside a KEG
substation shall be performed by KEG or KEG's authorized agents and shall be
the responsibility of KEG. To the extent that excavation is performed on bellatf of
Page 13
Avista, for Avista's sole or joint benefit, Avista shall reimburse KEC for an
appropriate share of the costs associated with such excavation.
711 Maintenance Scheduling and Continuity of Service - The Parties shall coordinate their
respective equipment maintenance schedules so as to minimize any effects upon either
Party due to temporary interruptions associated with such maintenance. Avista may
temporarily interrupt or curtail service at the Points of Delivery:
(a)upon reasonable notice to KEG in order to install equipment in, make repairs,
replacements, investigations, end inspections of or peJiorm other maintenance
work on Avista's system; provided, however, that Avista shall give KEG prior
notice thereof, the reason therefore, and the probable duration thereof; and
(b)without prior notice of such interruption or curtailment as may be necessary
because of uncontrollable forces as prOVided in Section B. Avista shall use
reasonable efforts to avoid inteJierence with the operations of KEG and to repair
the cause of any such interruption or curtailment. The Parties shall use
reasonable efforts to provide for effective communication protocols between their
respective operating personnel for the purpose of communicating any apparent
cause and expected duration of any such interruption or curtailment of an
extended nature.
Section 8 • Uncontrollable Forces and Liability
8.1 Uncontrollable Forces - Neither Party to this Agreement shall be considered to be in
default in performance of any obligation hereunder if failure of peJiormance shall be due
to uncontrollable forces. The term "uncontrollable forces" means any cause beyond the
control of the Party affected, including, but not limited to, failure or ioss of facilities, flood,
earthquake, stonm, ilre, lightning, epidemic, war, riot, civil disturbance, labor disturbance.
sabotage and restraint by court order or public authority, which by exercise of due
Page 14
foresight, such Party could not reasonably have been expected to avoid, and which by
exercise of due diligence it shall be unable to overcome. A Party shall not, however, be
relieved of liability for failure of performance if such failure is due to causes arising out of
its own negligence or to removable or remediable causes which it fails to remove or
remedy with reasonable dispatch. Nothing contained herein, however, shall be
construed to require a Party to prevent or settle a strike against its will. Damage to the
electrical system of either KEG or Avista caused by or arising out of an electrical
disturbance shall be governed under Section 8.2 and not under the provisions of this
Section 8.1.

8.2 Electric Disturbances
(a)For the purposes of this section, an electric disturbance is any sudden,
unexpected, changed, or abnormal electric condition occurring in or on an
electric system that causes automatic operation or damage.
(b)Each Party shall design, construct. operate, maintain and use its electric system
in conformance with industry Standards and Good Utility Practice:
(i)to minimize electric disturbances such as, but not limited to. lhe abnormal
flow of power which may damage or interfere with the electric system of
the other Party or any electric system connected with such other Party's
electric system; and
(ii)to minimize the effect on its electric system and on its customers of
electric disturbances originating on its own or another electric system.
8.3 Reiease and Limitation of Liability -. If both KEG and Avista are parties to the Western
Interconnected Systems Agreement Limiting Liability, that agreement shall continue in
full force and effect as between the Parties to the extent that such provisions may apply
under this Agreement. If either KEG or Avista is not a party to the Western
Interconnected Systems Agreement Limiting Liability, then the following prOVisions shall
Page IS
apply:
(a) Release by Avista - Avista hereby releases each of KEG and the directors.
employees, agents and legal representatives of KEG from any and all claims,
losses, harm, liabilities, damages, costs and expenses to the extent resulting
from any:
(i)operation of KEG's electric system in parallel with Avista's electric system;
(ii)electric disturbance or fluctuation that migrates, directly or indirectly, from
KEG's electric system to Avista's electric system;
(iii)interruption, suspension or reduction of delivery of power from KEG's
electric system to Avista's electric system, regardless of whether such
interruption, suspension or reduction is caused or contributed to by
Avista's electric system or the interconnection of Avista's electric system
with KEG's electric system; or
(iv)disconnection. interruption, suspension or curtailment, through manual
operation, automatic operation or otherwise. by KEG in the event that
KEG, in the exercise of its sole discretion, determines or has determined
that an emergency condition exists or may exist that is contrary to
Industry Standards and Good Utility Practice, and failure to do so:
(A) may cause imminent harm to any person or property, or
(8) may cause the disruption of reliable operation of KEG's or Avista's
electric system (including, but not limited to, any transmission or
distribution line thereof) or any electric system with which KEG is
interconnected.
The foregoing release shall not be effective to the extent any claims, losses.
harm, liabilities, damages, costs, and expenses are the result of the KEG's willful
misconduct.
Page 16
(b) Release by KEG - KEG hereby releases each of Avista and the directors.
employees, agents and legal representatives of Avista from any and all claims.
losses, harm. liabilities, damages, costs and expenses to the extent resulting
from any:
(i)operation of Avista's electric system in parallel with KEC's electric system:
(ii)electric disturbance or fluctuation that migrates directly or indirectly, from
Avista's electric system to KEC's electric system:
(iii)interruption, suspension or reduction of delivery of power from Avista's
electric system to KEG's electric system, regardless of whether such
interruption, suspension or reduction is caused or contributed to by KEC's
electric system or the interconnection of KEC's electric system with
Avista's electric system; or
(lv) disconnection, interruption, suspension or curtailment, through manual
operation, automatic operation or otherwise, by Avista in the event that
Avista. in the exercise of its sole discretion, determines or has determined
that an emergency condition exists or may exist that is contrary to
Industry Standards and Good Utility Practice, and failure to do so:
(A)may cause imminent harm to any person or property, or
(B)may cause the disruption of reliable operation of Avista's or KEC's
electric system (including, but not limited to, any transmission or
distribution line thereof) or any electric system with which Avista is
interconnected.
The foregoing release shall not be effective to the extent any claims, losses,
harm, liabilities, damages, costs, and expenses are the result of Avista's willful
misconduct.
Page 17
8.4 Mutual Neootiation - KEC and Avista specifically warrant that the terms and conditions
of the foregoing release 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 this Agreement.
8.5 Insurance
(a)KEC and Avista shall obtain and maintain commercial liability insurance with a
single limit of coverage of not less than $5,000,000 for each occurrence. A
certificate of such insurance shall be provided to either Party upon request by the
other Party. Each Party shall promptly notify the other Party of any changes in its
commercial liability insurance policies.
(b)Upon the request by either Party, the minimum coverage limits for commercial
liability insurance shall be reviewed by the Parties and adjusted according to
Good Utility Practice.
Section 9 - Miscellaneous
9.1 Notices - Any notice to be served, given or made in connection with this Agreement,
shall be in writing and shall be deemed properly served, given or made if delivered in
person or sent by United States mail, properly addressed and stamped with the required
postage, as follows:
If to Avista: Attention: Manager, Transmission Services
Avista Corporation
1411 East Mission Avenue
Spokane, WA 99202-2600
- or.
P. 0. Box 3727
Spokane, WA 99220-3727
If to KEC: Attention: General Manager
Kootenai Electric Cooperative, Inc.
2451 West Dakota Avenue
Hayden, ID 83835
Page 18
- or-
P. 0. Box 278
Hayden, ID 83835-0278
Either Party may change its address specified in this section by giving the other Party
notice of such change 'In acccrdance with this section.
9,2 Notices of an Operating Nature - Any notice associated with day-to-day electric utility
operations, such as for outage coordination or the need to enter a jointly-owned
substation, may be provided by telephone, electronic mail or facsimile between
appropriate operations personnel representing both Parties,
9.3 Amendment - No change, modification or amendment of this Agreement shall be valid
unless set forth in a written instrument signed by both Parties.
9.4 Assignment - Neither Party shall assign this Agreement without the prior written consent
of the other Party. Subject to the foregoing restriction on assignment, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the Parties and their
successive successors and assigns; provided, however, that each Party l,ereby
consents to assignment of this Agreement to a successor where a Party sells or
transfers all or substantially all of its electric utility operating plant to a third party.
9.5 No Third-Party Beneficiary - There are no tl,ird-party beneficiaries of this Agreement.
This Agreement shall not confer any right or remedy upon any person or entity other
than the Parties and their respective successors and assigns permitted under Section
9.4. No action may be commenced or prosecuted against any Party by any third party
claiming to be a third-party beneficiary of this Agreement or the Iransactions
contemplated hereby. This Agreement shall not release or discharge any obligation or
liability of any third party to any party or give any third party any right of subrogation or
action over or against any Party.
Page 19
9.6 Imolementation - Avista shall timely file this Agreement with the Commission. Each
Party shall take such additional action as may be reasonably required for the
implementation and performance of this Agreement in accordance with its terms.
9.7 Arbitration - Whenever Avista and KEC are both members of a Regional Transmission
Association. Regional Transmission Organization. or Independent Transmission
Provider, the detenmination of any disputed matter between the Parties arising out of or
relating to this Agreement, except an obligation arising out of Section 8.3, shall be
resolved in a manner provided in the dispute resolution procedures contained in the
governing agreement for that organization. The determination of any other disputed
matter between the Parties arising out of or relating to this Agreement, except an
obligation arising out of Section 8.3, shall be subject to binding arbitration in accordance
with subsections 9.7(a), 9.7(b) and 9.7(c) below.
(a) Initiation and Selection of Arbitrators - The Party calling for arbitration shall serve
notice in writing upon the other Party. setting forth in detail the question or
questions to be arbitrated, the relief sought. and the arbitrator appointed by such
Party. The other Party shall, within twenty-five (25) business days after the
receipt of such notice, appoint the second arbitrator by notice in writing to the
Party calling for arbitration. and the two so appointed shall choose and appoint a
third (if the Parties have not agreed upon and appointed a third). If such other
Party fails to appoint the second arbitrator within said twenty-five (25) business
days, or if a third arbitrator has not been appointed by agreement between the
Parties within twenty-five (25) business days after receipt of notice of
appointment of the second arbitrator (or, in the absence of such agreement, by
Ihe two arbitrators who have been appointed), either Party, upon five (5)
business days' written notice delivered 10 the other Party, may apply to the
Federal District Court for the District of Idaho for appointment of the second or
Page 20
third arbitrator, as the case may be, Neither Party may discuss any matter to be
arbitrated with any arbitrator after such arbitrator is appointed but prior to the
arbitrators' determination, without providing notice to the other Party and
reasonable opportunity to participate, The Parties intend Mat every arbitrator be
an unbiased person with experience in the subject mailer to be arbitrated.
(b) Procedure - The rules of procedure for the conduct of the arbitration shall be
determined by a majority of the arbitrators. Such rules of procedure shall direct
the expeditious evaluation of the merits of the matter and rendering of decision
consistent witll the compleXity of the matter being arbitrated. In any such
arbitration, each Party thereto shall have:
(i)full access to the records of the other Party that pertain to the subject
matter or the controversy;
(ii)the power to call for testimony of any director, officer, employee, agent, or
representative of the other Party having knowledge relevant (0 the
controversy, and
(iii)all other rights of discovery afforded to Parties in civil actions under the
then applicable Federal Rules of Civil Procedure (or rules or laws
applicable to the Federal District Court for the District of Idaho).
Disputes regarding the extent of discovery shall be resolved by the arbitrators.
Unless otherwise agreed upon by the Parties, the Parties hereby instruct the
arbitrators that they should render a determination of the mailers submitted and
the relief awarded within thirty (30) calendar days of the completion of the
arbitration proceeding. In determining matters submitted for arbitration, no
arbitrator shall be required to adhere to or advance the position of any particular
Party. The determination of the matters submitted for arbitration shall be made
by a majority of the arbitrators, and shall be binding as between the Parties. The
Page 21
determination shall be writing and shall affirm or deny each contention of the
Parties and shall set forth the reasons therefore. The determination of the
arbitrators shall be final and binding and shall be enforceable by a court of
competent jurisdiction at the request of either Party.
(c) Costs - Each Party shall pay for the services and expenses of the arbitrator
appointed by or for it, and for all of its own costs including its own attorney fees.
and compensation for its witnesses and consultants. The costs for the services
and expenses of the third arbitrator and all administrative costs of the arbitration
shall be paid equally by the Parties.
Section 10 - Default
In the event that either KEC or Avista commits a material breach of or default under this
Agreement (the "Defaulting Party"), the following shall apply:
(a)The other Party (the "Non-Defaulting Party") may give written notice to the DefaUlting
Party of the material breach or default.
(b)If after thirty (30) days following receipt of such notice, the Defaulting Party has not taken
the steps necessary to cure such breach or default, the Non-Defaulting Party may, at its
option, terminate this Agreement; provided, however, that if the Defaulting Party within
such 3D-day period commences and thereafter proceeds with all due diligence to cure
such default, such 3D-day period shall be extended up to six (6) months after written
notice to the Defaulting Party, as may be necessary to cure the material breach or
default with all due diligence. 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.
(c)The Non-Defaulting Party may, at its option, cure (or cause to be cured) any material
breacll or default hereunder within the appropriate time period, without waiver of any
Page 22
remedy at law or in equity including the right of reimbursement. The right of the Non-
Defaulting Party to cure any breach or default by the Defaulting Party shall not be
construed or interpreted as obligating such Non-Defaulting Party to make any such cure.
(d) A Defaulting Party shall be liable to the Party claiming default for all costs. including
costs of collection and reasonable attorney fees incurred by such Party claiming default.
The proceeds paid by any Defaulting Party to remedy any such default shall be
distributed to the Party claiming default equal to the additional cost actuaily paid by the
Party claiming default as a result of the default.
Section 11 -Waiver
A waiver at anytime by a Party of its rights with respect 10 a default by another Party under this
Agreement, or with respect to any other matter arising in connection with this Agreement, shall
not be deemed a waiver with respect to any subsequent default or matter. No delay, short of
the statutory period of limitations, in asserting or enforcing any right hereunder shall be deemed
a waiver of such right.
Section 12: Relationship of Parties
12.1 Nothing contained herein shall be construed to create an association, joint venture, trust,
or partnership, or impose a trust or partnership covenant, obligation, or liability on or with
regard to anyone or more of the Parties. Each Party shall be individually responsible for
its own covenants, obligations, and liabilities under this Agreement.
12.2 All rights of the Parties are several, not joint. No Party shall be under the control or shall
be deemed to control another Party. Except as expressly provided in this Agreement. no
Party shall have a right or power to bind another Party without its express written
consent.
Page 23
Section 13 - No Dedication of Facilities
Any undertaking by one Party to another Party under any provision of this Agreement shall not
constitute the dedication of the electric system or any portion thereof of the undertaking Party to
the public or to the other Party, and it is understood and agreed that any such undertaking
under any provision of this Agreement by a Party shall cease upon the termination of such
Party's obligations under this Agreement.
Section 14: Governing L aw
This Agreement shall be interpreted, construed and enforced in accordance with the iaws of the
State of Idaho or the iaw of the United States of America, whichever Is applicable, as if executed
and 10 be performed wholly within the State of Idaho,
Page 24
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their respective names by their duly authorized representatives as of the date first
noted above,
AViSTA CORPORATiON
By: iArrGr
Jeff Schiect
Manager, Transmission Services
Signed this 14th day of October, 2011,
KOOTENAI ELECTRIC COOPERATIVE, INC,
By: cLiLc_ a
Douglas A, Elliott
General Manager
Signed this ii day of ,201 1.
Page 25
EXHIBIT A
POINTS OF DELfVERY
1) Athol Point of Delivery
Location: The point near Spirit Lake, Idaho, where Avista's Pine Street-Rathdrum 115 kV
Transmission Line and KEG's Athol 115 kV Tap Transmission Line are
connected
Voltage: 115 kV
Metering In KEC s Athol Substation in the distribution circuit(s) over which electric power
and energy flows
2) Coeur d'Alene 15 th Street Point of Delivery
Location: The point in Avista's Coeur d'Alene 15th Street Substation where the 13,8 kV
facilities of Avista and KEC are connected
Voltaae: 13,8kv
Meterina: In Avista's 15th Street Substation, in the 13,8 kV circuit over which electric
power and energy flows
3) Dower Point of Delivery
Location: The point where Avista's Dower-Post Falls 115 kV Tap Transmission Line and
KEC's Dower-Post Falls 115 kV Tap Transmission Line are connected
Voltage: 115 kV
Meiering: In KEC's Dower Substation, in the distribution circuii(s) over which electric
power and energy flows
4) Hayden Point of Delivery
Location: The point where Avista's Coeur d'Alene-Ramsey 115 kV Transmission Line
and KEC's Hayden 115 kV Tap are connected
Voltage: 115 kV
Metering: In KEC's Hayden Substation, in the distribution circuit(s) over which electric
power and energy flows
Exhlbd A - Points of Delivery A-I
5)Julia Street Point of Delivery
Location: The point where Avista's Appleway-Ramsey 115 kV Transmission Line and
KEC's Julia Street 115 kV Tap are connected
Voltaae: 115 kV
Metering: In KECs Julia Street Substation, in the distribution circuit(s) over which electric
power and energy flows
6)O'Gara Point of Delivery
Location: Tile point in Avista's O'Gara Substation where the 13.8 kV facilities of Avista
and KEG are connected
Voltage: 13.8 kV
Metering: On KEG's distribution pole adjacent to Avista's O'Gara Substation in the 13.8
W circuit over which electric power and energy flows
7)Pleasant View Point of Delivery
Location: The point in Avista's Pleasant View Substation where the 13.8 kV facilities of
Avista and KEG are connected
Voltage: 13.8 kV
Metering: In Avista's Pleasant View Substation, in tile 13.8 kV circuit over which electric
power and energy flows
8)Plummer Point of Delivery
Location: The point in Avista's Plummer Substation where the 13.8 kV facilities of Avista
and KEG are connected
Voltage: 13.8 kV
Metering: In Avista's Plummer Substation, in the 13.8 kV circuit over which electric power
and energy flows
Exhibit A - Points of Delivery A-2
9)Prairie Point of Delivery
Location: The point in the jointly-owned Prairie Substation, at the supply side of KECs
115 kV circuit switcher, where the 115 kV facilities of Avista and KEG are
connected
Voltage: 115 kV
Metering: In KEG's portion of the jointly-owned Prairie Substation, in the distribution
circuit(s) over which electric power and energy flows
10)Rathdrum Point of Delivery
Location: The point in Avista's Rathdrum Substation where the 13,8 kV facilities of Avista
and KEG are connected
Voltage: 13.8 kV
Metering: In Avista's Rathdrum Substation, in the 13,8 kV circuit over which electric
power and energy flows
11)Scarcella Point of Delivery
Location: The point where Avista's Pine Street-Rathdrum 115 kV Transmission Line is
connected to KEG's Scarcello Substation 115 kV Tap
Voltage: 115 kV
Meterino: In KEG's Scarcello SUbstation, in the distribution circuit(s) over which electric
power and energy flows
12)Setters Point of Delivery
Location: The point where Avista's Rockford Tap 115 kV Transmission Line is connected
to KEG's Setters Substation 115 kV Tap
Voltage: 115 kV
Metering: In KEC's Setters Substation, in the distribution circuit(s) over which electric
power and energy flows
Exhibit A - Points of Delivery A-3
EXHIBIT B
METER READING AND METER TEST PROCEDURES
81.Meter Readings
Meter readings associated with the delivery of electric power to the Point(s) of Delivery
and for Generating Project(s) shall be the responsibility of the Party owning such meters.
In the event such meters are owned by Bonneville pursuant to the Power and
Transmission Agreements. KEG shall request that Bonneville provide such meter
reading information directly to Avista. Alternatively, KEG shall, upon request by Avista.
provide to Avista any such meter reading information made available to KEC by
Bonneville. Electric power deliveries in any month shall be calculated on information
based on meter readings, with any necessary date adjustments made by pro-rating
metered amounts to the number of days in such month. In the event a recording
metering device is installed, actual monthly energy deliveries shall be determined from
the record developed.
82.Meter Testing
Unless provided by Bonneville pursuant to its agreements with KEG, Avista and/or KEG
shall own and maintain all meters used to determine any billing associated with the
delivery of electric power to the Point(s) of Delivery and Generating Project(s).
Avista meters shall be tested and inspected in accordance willi Avista's meter testing
program ("A vista Program") as filed with the Washington Utilities and Transportation
Commission and/or the Idaho Public Utilities Commission. If requested by KEC, Avista
shall provide copies of applicable test and calibration records and calculations. Avista
shall permit representatives of KEG, and/or Bonneville to be present al all times Ihe
meters are being lested. Additionally, Avista shall test any or all such meters as may
reasonably be requested by KEG. Reasonable costs for such requested test shall be
paid by KEG unless any of the meters are found to be inaccurate, as defined in the
Avista Program, in which case Avista shall pay for the test.
KEG's meters shall be tested and inspected in accordance with the I<EG meler testing
program ("KEG Program"). If requested by Avista, KEC shall provide copies of
applicable test and calibration records and calculations. KEG shall permit a
representative of Avista to be present at all times the meters are being tested.
Additionally, KEG shall test any or all such meters as may reasonably be requested by
Avista. Reasonable costs for such requested test shall be paid by Avista unless any of
the meters are found to be inaccurate, as defined in the KEC Program, in which case
KEG shall pay for the test.
For meters owned by Bonneville, Avista and KEG consent to Ihe testing and inspection
of such meters in accordance with Bonneville's applicable meter testing program
("Bonneville Program"). If requested by Avista, KEG shall provide copies of applicable
test and calibration records and calculations made available to KEG by Bonneville. KEG
shall permit a representative of A vista to be present at all times such meters are being
tested. Additionally, KEG shall request a test of any or all such meters as may
reasonably be requested by A vista. Reasonable costs for such requested lest shall be
Exhibit B - Meter Reading and Meter Test Procedures B-i
paid by ivista unless any of the meters are found to be inaccurate as defined in the
Bonneville Program, in which case Avista shall not be required to pay for the test.
B3. Adjustments
Adjustments shall be made in meter readings and billings for errors in a meter reading or
billing discovered within twelve (12) months of the error. Each Party shall permit
representatives of the other Party to inspect all of the records, including any records
made available by Bonneville to KEC or Avista, relating to the delivery of electric power
to KEC, and the transmission of electric power by Avista to the Points of Delivery.
Exhibit B - Meter Reading and Meter Test Procedures B-2
EXHIBITC
SUBSTATION CONSTRUCTION AND OWNERSHIP GUIDELINES
FOR SUBSTATIONS OWNED BY AVISTA (Points of Delivery under 69kV):
1.Avista shall be responsible to provide reclosers or other protection apparatus to protect
Avista's power transformers.
2.Avista shall provide all equipment and materials (including voltage regulator by-pass
switches) to construct a feeder position, except as noted below. This will ensure
compatibility with spare parts for installed equipment.
a Voltage regulators shall be provided by KEG, but shall be installed by Avista.
(a)Regulators are classified as a failure mode change-out Ilem and as such are not
regularly maintained by Avista. KEG shall maintain its regulators at its discretion.
(b)KEG's regulator settings shall be calculated and set by KEG.
(c)Regulators provided by KEC shall be complete with connectors for the
appropriate conductor, as specified by Avista.
4. Insulation coordinated surge arresters shall be prOVided by KEG to proteci its voltage
regulators or underground cables.
5. Metering CTs shall be supplied by Avista.
6. Metering PTs shall be supplied by Avista and may be shared with KEG.
7. KEC shall provide the hardware and conductor to connect to the source at the Point(s) of
Delivery, including, but not limited to, the following:
(a)Hardware for overhead line pUll-ofts/getaways (Avista will provide eye bolts on
distribution structures).
(b)Potheads and brackets for underground take-offs/getaways.
8. Underground conduits and vaults adjacent to a substation shall be provided or approved
byAvista.
Exhibit C - Substation Construction and Ownership Guidelines C-i
FOR SUBSTATIONS OWNED BY KEG (Points of Delivery at 69kV or above):
For the purpose of enabling Avista to monitor the loads on its transmission system in real time,
KEG shall provide either of the f011owing to Avista:
1.Megawatt and rnegavar indications for lotal sUbstation load from KEC's supervisory
control and data acquisition (SGADA) system, if eXisting, in a format agreed upon by the
Parties,
or
2.The following:
(a)Metering CTs,
(b)Metering PTs,
(c)Space in KECs substation control house for an Avista remole terminal unit or
such other equipment that performs a comparable function ("Avista Equipment"),
to be supplied byAvista,
(d)Voltage and current indications from KEG's CTs and PTs to the Avista
Equipment. and
(e)Space for any conduit needed by Avisla for its communications out of the
substation.
Exhibit C - Substation Construction and Ownership Guidelines C-2
EXHIBJTD
GENERATING PROJECTS
1) Fighting Creek Landfill Generating Project
Location: Connected to KEC's Dower Substation distribution facilities near the
Fighting Creek Landfill
Generator Rating: Total rated output of 3.2 MVA
Metering: In KEC's Fighting Creek Landfill Generating Project, in the 24.9 kV
circuit over which electric power and energy flows
Exhibit D Generating Projects 0-1
EXHIBITE
GENERATION INTERCONNECTION GUIDELINES AND STANDARDS
These Generator Interconnection Guidelines and Standards shall apply, as appropriate
pursuant to Industry Standards and Good Utility Practice, to generating projects connected to
Avista's electric system and to Generating Projects defined pursuant to Section 1.4 of this
Agreement.
1 INTERCONNECTION REQUIREMENTS
1.1. All Generating Projects shall be constructed and operated in accordance with Industry
Standards and Good Utility Practice.
1.2. A Generating Project shall not cause any reduction in the quality of service being
provided (0 other Avista projects or customers. The Generating Project shall not
cause abnormal voltage magnitudes, frequencies, excessive interruptions, or
excessive harmonics. This shall include not injecting communications signals
associated with operation of the Generating Project Into Avista's electric system.
1.3. When the Generating Project is connected to Avista's electric system the Generating
Project shall follow Avista's local system frequency which Is a nominal 60 hertz.
1.4. Any voltage flicker caused from the operation of the Generating Project shall not
exceed the limits defined by the latest revision of IEEE 519 or IEEE 1547, whichever is
applicable.
1.5. For salient pole generators with a capacity of 5,000 kVA or larger or for any size
cylindrical rotor synchronous generator, the harmonics shall not exceed the limits as
outlined for telephone Influence factor (TIF) In the latest revision of ANSI standards
C50.12, C50.13, or C50.14, whichever Is applicable. For all generators, voltage
distortion limits and current harmonic limits shall be as specified in the latest revision of
IEEE 519 or IEEE 1547, whichever is applicable.
1.6. When the Generating Project Is operating In parallel with the Avlsta electric system,
the Generating Project shall operate at a power factor within the range of 0.95 leading
to 0.95 lagging.
1.7. Each Party and the Generating Project shall be responsible for protection of its
facilities from any system voltage or frequency excursions consistent with Industry
Standards and Good Utility Practice.
2. EQUIPMENT REQUIREMENTS
2.1. KEC or the Generating Project shall supply, Install, own, operate and maintain all
equipment at the Generating Project as appropriate and pursuant to applicable electric
codes, Industry Standards and Good Utility Practice.
2.2. The Generating Project shall maintain its equipment in good working order and keep
adequate maintenance records. The Generating Project and maintenance records
shall be subject to Inspection by Avista. Avista may also witness or review any
acceptance tests of Generating Project.
Exhibit E - Generation Interconnection Guidelines and Standards E-1
3. PROTECTION REQUIREMENTS
3.1. KEC or Generating Project shall furnish, install, operate, and maintain in good order
and repair, and without cost to Avista such relays, instrument transformers, breakers,
automatic synchronizers, and other control and protection apparatus as shown by
Avista to be reasonably necessary for the operation of the Generating Project in
parallel with Avista's system, The minimum protection requirements for the Generating
Project may change based on system configuration or other special circumstances. At
a minimum the protection requirements, based on the size of the Generating Project,
shall be as follows.
a.Small generator connected to a distribution feeder (rated output less than
kVA): The Generating Project must provide adequate protection to protect its
own facility for faults at the facility or on either Party's electric system. KEC or the
Generating Project shall provide an appropriate disconnect switch availabie to
Avista.
b.Medium generator connected to a distribution feeder (rated output less than one
quarter of the distribution feeder load): The Generating Project must meet all
requirements of a small generator, plus the Generating Project relaying shall
include over/under voltage and over/under frequency (islanding detection) and
synchronism check,
C. Largegenerator connected distribution feeder (rated output greater than or
equal Lo 3 MVA or one quarter of the distribution feeder load): The Generating
Project must meet all requirements of a medium generator, plus phase and
ground overcurrent relays to detect and clear for faults on the Avista system.
d. Generator connected to a transmission line: Tile Generating Project must
provide a level of protection equivalent to the most current standard of similar
terminals on the Avista system, Necessary upgrades to Avista's remote line
terminal relaying to interface with the Generating Project will be at the expense of
KEC unless provided for in another agreement.
3.2. The Generating Project's protection system shall coordinate with Avista's protection
system without adverse affect to the Avista system or its customers. The Generating
Project shall provide Avista with all proposed relay design and settings for the
protection system related to the Generating Project. Avista shall approve the
Generating Project's protection system prior to the Generating Project being operated
in parailel with the Avista system.
3.3. If parallel operation of the Generating Project to Avista's electric system requires
upgrades to Avista's protection system, the upgrades shall be at the expense of KEC
unless provided for in another agreement, including, but not limited to, upgrades to
Avista's reclosing relaying.
3.4. The Generating Project's protection system must be operated, tested, and maintained
in accordance with Industry Standards and Good Utility Practice and shall be at the
expense of KEC unless provided for in another agreement.
Exhibit E - Generation Interconnection Guidelines and Standards E-2
3.5. Each relay responsible for disconnecting the Generating Project from the local power
system shall be connected to an appropriately installed GPS time source, with
accuracy better than 8 ms or some type of Sequence of Events recorder shall be made
available. Avista may request and KEC or the Generating Project shall provide event
reports at the Generating Project.
3.6. The Generating Project shall provide adequate means or devices that will prevent the
Generating Project from being closed into or energizing a de-energized Avista System
or de-energized phase of the Avista system.
3.7. The Generating Project may be manually or automatically started and operated in
parallel to Avista's electric system any time Avista's electric system is in a normal
operating condition. A "norma" operating condition exists when Avista's electric
system through which the Generating Project will be operated in parallel is energized
and no local conditions exist on Avista's electric system such as abnormal voltages,
frequencies, single phasing, etc. that would prevent acceptable synchronization.
4. COMMUNICATIONS
4.1. The Generating Project shall maintain satisfactory operating communications with
Avista's dispatcher or representative designated by Avista. The Generating Project
shall provide standard voice line, dedicated voice line and facsimile communications at
its Generating Project control room or central dispatch facility through use of either the
public telephone system or a voice communications system that does not rely on the
public telephone system.
4.2. For generation that will require telemetering, prior to the initial synchronization of the
Generating Project, a remote terminal unit, or equivalent data collection and transfer
equipment acceptable to the Parties, shall be installed by KEC or the Generating
Project, or by Avista at KEC's expense unless provided for in another agreement. to
gather accumulated and instantaneous data to be telemetered to the location(s)
designated by Avista through use of a dedicated point-to-point data circuit(s) or other
equivalent communication medium acceptable to the Parties as indicated in section
4.4 below. The communication protocol for the data circuit(s) shall be specified by
Avista. Instantaneous bi-directional analog real power and reactive power flow
information must be telemetered directly to the location(s) specified by Avista.
4.3. For generation that will require telemetering, KEC or the Generating Project shall
provide the dedicated data circuit(s) or other equivalent communication medium
acceptable to the Parties necessary to provide the Generating Project's data to Avisla.
The.data circuit(s) shall extend from the Generating Project to the location(s) specified
by Avista. Any required maintenance of such communications equipment shall be the
responsibility of KEC unless provided for in another agreement. Operational
communications shall be activated and maintained under, but not be limited to, the
following events: system paralleling or separation, scheduled and unscheduled
shutdowns. equipment clearances, and hourly and daily load data.
4.4. Unless provided for in another agreement, KEC shall have Avista listed on record with
any third-party communication provider so that Avista has the ability to call in trouble
tickets. Each Party shall promptly advise the other Party if it detects or otherwise
learns of any metering, telemetry or communications equipment errors or malfunctions
Extlibir E - Generation Interconnection Guidelines and Standards E3
that require the attention and/or correction by the other Party. The Party owning such
equipment shall correct such error or malfunction as soon as reasonably feasible
unless provided for in another agreement.
5. MISCELLANEOUS REQUIREMENTS
5.1. Avista reserves the right to open the main disconnecting device andlor cease parallel
generation with reasonable notice provided to KEC or the Generating Project (when
notice is practicable) for any of the following reasons:
a.System emergency.
b.Generating Project's generating equipment interferes with other projects or the
operation of the Avista system.
C. Any quality of service reduction.
5.2. Unless provided for in another agreement, KEC shall supply Avista with the following
data and machine parameters for each Generating Project as needed:
a.Rated kVA output.
b.Rated voltage.
C. Rated power factor.
d.Type of generator (induction motor, DC motor, synchronous generator, etc.).
e.Proposed protective equipment (breakers, fuses, instrument transformers, relay
types and settings. etc.).
f Generator's contribution to faults (saturation, subtransient, transient and
synchronous resistances and reactances and the associated time constraints,
sequence impedance (positive, negative, zero), system resistance and reactance
from Avista system to the Generating Project).
g.Inertia constants.
h.Estimated schedUle of operation and estimated annual kWh.
i.Governor and exciter control system parameters.
5.3. Unless provided for in another agreement, KEC shall supply Avista with the following
generator transformer nameplate data for the Generating Project:
a.Rated kVA, including base and any forced oil I forced air ratings.
b.Voltage rating, available tap settings, and proposed tap setiing.
C. Test Impedance, including XIR ratio or measured load loss Watts.
5.4. KEC shall require the installation and operation of a power system stabilizer at the
Generating Project if required pursuant to Industry Standards.
Exhibit E - Generation Interconnection Guidelines and Standards E-4
Exhibit U
Facilities for Integration and Operation fFighting Creek Facility
- 1 -
Transmission Services
Avista Corporation lP'flPIISTA
1411 E Mission Avenue
Spokane. WA 99202
December 5, 2011
Mr. Doug Elliott
General Manager
Kootenai Electric Cooperative
P.O. Box 278
Hayden, Idaho 83835-0278
SUBJECT: Facilities for Integration and Operation of Fighting Creek Facility
Dear Mr. Elliott:
This Letter Agreement ("Agreement") sets f011h the scope ofwork and responsibilities ofAvista
Corporation ("Avista") and Kootenai Electric Cooperative, Inc. ("KEC"), hereinafter sometimes
referred to collectively as "Parties" and individually as "Party," regarding the construction and
installation of the Parties' respective facilities for the integration and operation ofKEC's new 3.2
MW Fighting Creek Landfill Gas to Energy Facility ("Facility") at the Kootenai County Solid
Waste Facility near Bellgrove, Idaho.
r. PROJECT COORDINATION AND SCHEDULE
KEC and Avista shall coordinate all requirements for this project and consult with one
another regarding the duties listed under this Agreement. The Parties intend to complete
construction and enable operation of the Facility by December 30, 2011. While neither
Party makes any express commitment to meet such date to energize the facilities outlined
within, the Parties shall make good faith efforts to complete this project within the time
frame identified.
II. EFFECTIVE DATE
This Agreement shall be effective upon the date this Agreement is executed by both
Parties. This Agreement shall terminate upon receipt by Avista of all invoiced amounts
pursuant to Section V.
Letter Agreement - Facilities for Integration and Operation ofFighting Creek Facility
December 5, 2011
Page 2 of3
Ill. AVISTA'S RESPONSIBILITIES AT KEC'S EXPENSE
Avista shall provide, at KEC's expense, a relay to provide synch check functionality and
add equipment to provide dial-up access to the new relay on Avista's Post Falls A-320
circuit breaker.
Avista shall provide, at KEC's expense, material and labor to program, check-out, and test
the metering and data acquisition equipment provided by KEC at the Facility.
Avista shall, at KEC's expense, provide matelials and labor to program the Cybectec SMP-
4, test and check-out all metering and SCADA equipment provided by IeEC, and telminate
the 4-wire communication circuit provided by KEC at Avista's Coeur d'Alene Service
Center.
Avista shall, at KEC's expense, provide labor to revise relay settings on Avista's Post Falls
A-21 I circuit breaker on the Post Falls - Ramsey 115 kV line to provide an alternate point
ofreceipt.
IV.KEC'S RESPONSIBILITi11S AT KEC'S EXPENSE
KEC shall, at KEC's expense, acquire lights of way and pelmitting for, construct and own
the new Facility. This construction shall include metering CTs, meteting PTs, space in
Seller's Facility control house for Avista meteling equipment, voltage and current
indications from KEC's CTs and PTs to the Avista metering equipment, 4-wire
communication circuit, 2-wire communication circuit, appropriate isolation protection for
commuuication circuits, and a 48 VDC circuit for power supply.
KEC shall, at KEC's expense, provide and install a Jemstar revenue grade meter, test
switch, Cybectec SMP-4, and other data acquisition equipment as approved by Avista
which shall be owned, operated, and maintained by Avista.
KEC shall, at KEC's expense, provide labor for the commissioning of this equipment and
the termination ofthe 4-wire circuit.
V.FINANCIAL TERMS AND CONDITIONS
The estimated cost of the work to be performed by Avista at KEC's expense, as identified
in Section III, is $65,000, including applicable overheads and taxes. Upon completion of
all work perfonned by Avista, Avista shall invoice KEC for the actual costs Avista
inculTed to complete such work, including applicable overheads and taxes.
fnvoices from Avista shall reference this Agreement and shall be sent to the following
address:
Kootenai Electric Cooperative
Attention: Shawn Dolan
Kootenai Electric Cooperative
P.O. Box 278
Hayden, Idaho 83835-0278
Letter Agreement - Facilities for Integration and Operation of Fighting Creek Facility
December 5,2011
Page 3of3
Remittances from KEC shall be within the timeframe specified in the invoice and shall be
sent to the address named in the invoice.
Please indicate KEC's conCUlTence by executing the two originals of this Agreement where
indicated below. Please retain one original for your files and return one Oliginal to Avista at the
address listed above. Should you have any questions regarding this Agreement, please do not
hesitate to contact me at [phone].
Respectfully,
Jeff Schlect
Senior Manager, Transmission Services
KOOTENAI ELECTRIC COOPERATNE, INC.
Concur: a.
Name: Doug Elliot
Title: General Manager
Date: ____