20131120Second Amendment.pdf

Avista Corp.
14ll EastMission P0 Box3727
Spokane,Washington 9922tr3727
Telephone 509-48$0500
Toll Free 800-727-9170
AiT,vts Tlt
Corp.
!r1:i ii't,J ?l i..i ii:' l*
Nove,mber 18,2013
Via Resular Mail
Jean Jewell
Idaho Public Utilities Commission
472 W . Washington Street
Boise,ID 83702
Re:Joint Petition of Avista Corporation and Kootenai Electric Cooperative, Inc. for
Approval of Second Amendment to Power Purchase Agreement
IPUC Docket No. AVU-E-12-01
Dear Ms. Jewell:
Please find enclosed for filing in the above-referenced docket an original and seven
copies of the Joint Petition of Avista Corporation ("Avista") and Kootenai Electric Cooperative,
Inc. ("KEC") for approval of the second amendment to the power purchase agreement between
Avista and KEC ("PPA") further extending the term of the PPA through December 37,2014.
The second amendment to the PPA is attached to the Joint Petition.
Please let me know if you have any questions regarding this filing.
Michael G. Andrea
Senior Counsel
Enclosures
cc: Service List
Sincerely,
For Avista Corporation
Michael G. Andrea (ISB No. 8308)
Senior Counsel
Avista Corporation
1411 East Mission Ave., MSC-23
Spokane, WA99202
Phone: [phone]
Facsimile: [phone]
Email : [e-mail]
For Kootenai Electric Cooperative, Inc.
Greg Adams (ISB No. 7454)
Richardson Adams PLLC
515 N. 27n St.
Boise, lD 83702
Phone: [phone]
Facsimile: [phone]
Email : gre [e-mail]
IN THE MATTER OF THE JOINT PETITION
OF AVISTA CORPORATION AND
KOOTENAI ELECTRIC COOPERATIVE,
TNC. FOR APPROVAL OF POWER
PURCHASE AND SALE AGREEMENT
_, l_
ta1!'' rr'-,1r a^(-: t. : i- _:
CASE NO. AW.8.12.01
JOINT PETITION OF AVISTA
CORPORATION AND KOOTENAI
ELECTRTC COOPERATIVE, INC.
,: I li'. t. I'. ..' _! I
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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 Second Amendment ("Second Amendment")
to Power Purchase Agreement ("Agreement") between KEC and Avista with a requested
effective date of January 1, 2014. The Second Amendment is attached hereto as
Attachment A. The Agreement is attached hereto as Attachment B.
Page - 1 JOINT PETITION OF AVISTA CORPORATION AND KOOTENAI
ELECTzuC COOPERATIVE, INC.
l.Names and Addresses of Petitioners
Avista Corporation
1411 East Mission Avenue
Spokane, WA99202
Kootenai Electric Cooperative, Inc.
2451W. Dakota Avenue
Hayden, Idaho 83835-0278
Nature of Businesses2.
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 Qualifuing
Facility pursuant to the Public Utility Regulatory Policies of Act of 1978 ("PURPA";.
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 Michael G. Andrea
Manager, Wholesale Marketing and Senior CounselContracts Avista Corporation
Avista Corporation l41l E. Mission Ave., MSC-23
14ll E. MissionAve., MSC-7 Spokane, WA99202
Spokane, WA99202 Phone: [phone]
Phone: [phone] Fax: [phone]
Fax: [phone] E-mail: [e-mail]
E-mail : [e-mail]
For Kootenai Electric Cooperative, Inc.:
Doug Elliott Greg Adams
General Manager Richardson Adams PLLC
Kootenai Electric Cooperative, Inc. 515 N. 27th St.
2451W. Dakota Avenue Boise, lD 83702
Hayden, Id 83835-0278 Phone: [phone]
Telephone: [phone] Facsimile: [phone]
Fax: [phone] Email:sreg@.richardsonadams.com
Email: [e-mail]
4. Description of Agreement
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-12-01on February 15,2012. The Term of the Agreement was
originally due to expire on December 31, 2012. In an amendment dated November 19,
2012 ("First Amendment"), the parties agreed to extend the Term through December 31,
Page - 3 JOINT PETITION OF AVISTA CORPORATION AND KOOTENAI
ELECTRIC COOPERATIVE, INC.
2OB.r The Second Amendment further extends the Term of the Agreement through
December 31,2014 and Exhibit D has also been updated to include the Avoided Cost
Rates for 2014.
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 l0 aMW) pursuant to Schedule 62 of its Idaho tariff at the lesser of
(i) 85 percent (85%) of the weighted average of the Powerdex Mid-Columbia Hourly Index
for on and off peak hours (or its successor), 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 31,2014, 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.
I Avista and KEC submitted a joint petition for a approval of the First Amendment, which was filed in the
above-captioned docket on November 23 , 2010. The Commission approved the First Amendment as part
of its consent agenda on December 3,2012. See ldaho Public Utilities Commission, Minutes of Decision
Meeting, December 3, 2012.
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 Second Amendment, without change or condition, with
an effective date of January 1,2074, 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.
1J''ns
Respecttully submitted this 6 Ury of Novemb er 2013.
KOOTENAI ELECTRIC
COOPERATIVE, INC.
Greg Adams
Attomey for Kootenai Cooperative, Inc.
Page - 5 JOINT PETITION OF AVISTA CORPORATION AND KOOTENAI
ELECTRIC COOPERATIVE, INC.
AVISTA CORPORATION
ichael G. Andrea
AHvtsrt
November 5,2013
Kootenai Electric Cooperativc
Attn: Doug Elliot
2451 W. Dakota Ave
P.O. Box 276
Hayden, ID 83835-0278
Re:Amendment No.2 to the Power Purchase Agreement bctween Kootenai
Electric Cooperative and Avista Corporation
Dear Mr. Elliot:
Kootenai Electric Cooperative, Inc. ("Sellet'') and Avista Corporation ("Avista"),
referred to herein individually as a'?arty''and collectively as the '?arties," entered into that
certain Power Purchase Agreement dated January 5,2012, (*Power Purchasc Agreement") undcr
which Avista purchases energy from a 3.2 MW nameplate capacity electric power generating
facility ("Facility") at the Kootenai County Solid Waste Facility near Bellgrove, Idaho. The
Porver Purchase Agreement was originally approved by the Idaho Public Utilities C<rmrnission
('C<rmmission") in Order No. 32459 issued in Docket No. AVU-E-12-01on February 15.2012.
'I'he original tenn of the Power Purchase Agreement expired by its terms on December
31,?-012. On November 19,2012, Seller and Avista agreed to amend the Power Purchase
AgreenrentandextendthetermthroughDecember3l,20l3. OnNovember23,20l2,Avista
and Seller submitted a joint petition to the Commission (Case No. AVU-E-12-01) seekiug
approval to amend the existing Power Purchase Agreement to extend the term through December
31, 2013. Avista understands that Seller would now like to amend the Power Purchase
Agreiment to extend the term for arr additional one-year term through December 31,2014.
Thc Parties hereby agree to amend the Power Purchase Agreement as follows;
l. Section 4.1 of the Powel Purchase Agreemerrt is amended to changc thc
crpiration date of the'Ierm to December 3l-20l/,.
Scction 1.24 is amended to change the energy pricing mechanism such that
Section l.?4 states in its entirety as follows:
L?{ -l'll4arket Erercv R$te': means fil ener,'J price that shali be 85 percenl (tl5%) or
ihe weightcd average of the Porveriex Mid Columbia l{ourly Index for on and offpeak hours or
ils surcessor, ol'as agrced by the Parties ifno sttecessor exists'
1411 Easr Misslon Avenuo
PO Box 3727 MSC-7
Spokane, Warhington Sg22O-3727
509.48t .0500
800.727.9170
www.aYistauti lities.com
3. Exhibit D is amended and replaced in its entirety with the attached Amended
Exhibit D to reflect the cunent "Avoided Cost Rates for Other Projects" issued by the
Commission on June l, 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
Agreernent with 30 days prior written notice to Avista.
The Parties agree that this Amendment No. 2 will be construed in aecorrlance with
Section 210 of PURPA and other applicable laws and regulations. This Amendment No. 2 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 incuned expenses for
ratemaking purposes. This Amendment No. 2 to the Power Purchase Agreement shall, subject to
such Commission approval, become effective on January 1,2074, or such othcr date set by
Commission order. Upon the effective date of this Amendment, this Amendment shall be
incorporated in the Power Purchase Agreement and all references to the Power Purchase
Agreernent shall be deemed to be references to the Power Purchase Agreement as amended by
this Amendment No. 2.
If the terms set forth herein for the Amendment No. 2 to the Power Purchase Agreement
are acceptable, please execute below and retum an original executed copy of this letter to me.
Please call Steve Silkworth at 509 495-8093 if you have any questions.
Sincerely,
J,yY
Jason Thackston
Vice President, Energy Resources
ACCEPTED AND AGREED TO:
Date:Nowemtrpr 7-101?
Kootenai Electric Cooperative
Erhtbit I)
Avoldod Cmt Ratcs
Period
Jan 2014 - Feb 2014
Mar 2014 - Jun 2014
Jul 2014 - Dec 2014
l.leavy LightLoad LoadHours Hours
$/M\ Jh $/MVVh
033.21
$26.83
$33.21
$27.81
$21.63
$27.81
ATTACIIMENTB
POWER PURCHASE AGREEMENT
BETWEEN
KOOTENAI ELECTRIC COOPERATIVE, INC.
AND
AVISTA CORPORATION
I. DEFIMTIONS
2. WARRANTIES
3. CONDMONS PRIOR TO MMMERCIAL OPEMTION
4. TERM OFAGREEMENT A}.ID MMMERCIAL OPERIffION DATE
5. NET OUTPUTAMOI]NTS
6. SCHEDIJLING
7. PI.JRCHASE PRICES ANID PA1TVIENT
8. INSTJRA}ICE
9. CURTPJI}M\M, INTERRI.JMON ORREDUCTION OF DEtI\IERY
10. OPERATION
II. INTERCONNECTION AND TRANSMSSION
12. FORCE I\{AIE[]RE
13. II{DEMMTY
14. ASSIGNMENT
15. NO T]NSPECIMD TIIIRD PARTYBENEFICIARIES
15. DtrAULT ANID TERMINATION
17. DISPUTE RESOLUTION
18. RELEASEBYSBLLER
19, GOVERNMENTALAUTIIORITY
20. SEVERAL OBLIGATIONS
-+-
-7 -
-8-
-9-
-9-
-10-
-10 -
-11-
-12 -
-1 3-
-14 -
-t4 -
-15 -
- t6-
-L6 -
-16 -
-77 -
-L7 -
- 18-
- l8-
-2-
21. IMPLEMENTATION
22, NON.WAIIIER
23. AI\{EI{DMEI{T
24. CX{OICE OF I,AWS AI{D \IENI]E
25. HEADINGS
26. SEVERABILITY
27. COUNTERPARTS
28. TAXES
29. NOTICES
30- SURVIVAL
3I. ENTIRE AGREEMENT
EXHIBIT A
EXHIBITB
EXHIBITC
EXHIBITD
EXHIBITE
EXHIBITF
EXHIBITG
-18 -
-18 -
-18 -
-18 -
-19 -
- t9-
-19-
- 19-
- 19-
. - 19-
-20-
-3-
POWER PIJRCHASE 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 somotimes referred to individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Sellerwill design, construct, own, operate and maintain a 3.2 MW
nameplate capacity ("Expectod 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 o f I 978 ('PURPA"); and
WHEREAS, Seller will deliver and sell, and Avista will purchase, Net Output generated
by the Faciiity on an non-firm as available basis subject to the terms ofthis Agreement; and
WHEREAS, Sellerand Avista are parties to the Interconnection and Operating
Agreement datedNovember IS, 2011 (Avista ContractNo. AV-TRll-0205-1) ("Interconnection
and Operating Agreement"); and
WHEREAS, Seller and Avista are parties to the Facilities for Integration and Operation
ofFighting Creek Facility Letter Agreement dated December 5, 2011 (incorporated as Exhibit G)
which sets forth the scope ofwork and responsibilities ofthe Parties regarding the construction
and installation ofthe Parties' respective facilities for the integration and operation of Seller's
Facility.
NOW, THEREFORE, in consideration ofthe mutual agreements setforth 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 "Agreemenjrr means this Power Purchase Agreement, including all exhibits, and
any written amendments.
12 "Alternate Point of Delivery" shall have the meaning provided in Section 11.2
ofthis Agreement and is further clarified in Exhibit C ofthis Agreement.
1.3 "Ancillary Services" means those services that are necessary to support tho
transmission ofcapacity and energy from resources to loads while maintaining reliable operation
-4-
ofthe electical 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 megawat(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
intercounection metering and telernetry, capable ofcontrolling generation to maintain its
interchange schedule with other Balancing Authority Areas and contributing to frequency
regulation ofthe interconneotion, A Balancing Authority Area must be certified by ttre
applicable reliability counoil (such as WECC or other reliability council).
1.7 "BGg Energy'l means all monthly Net Ouput except Net Output that is Excess
1.8 "Business Day" means every day other than a Saturday or Sunday or a national
holiday. National holidays shall be those holidays observedNERC.
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
Agteement.
l.l2 "Expected Capacity" shall have the meaning provided in the recitals ofthis
Agreement.
t.l3 "Facility" means the electric energy generating facilities, including all equipment
and structures necessary to generate and zupply electric energy, more particularly described at
Exhibit C.
l.l4 "Facility Output" means the capability and electic energy generated by the
Facility expressed in kilowatt-hours.
I . l5 "Facility Service Power" means the olectric energy generated and used by the
Facility during its operation to operate equipment that is auxiliary to primary generation
equipment including, but not limitedto, pumping, generator excitation, cooling or other
operations related to the production of electric energy by the Facility.
-5-
1.16 irForce Majeure" shall have the meaningprovided in Section 12 ofthis
Agreement.
l.l7 frFERCrt means the Federal Energy Regulatory Commission, or its successor.
1.18 rrlndependent Engineering Certificationrl means certifications detailed in
Section 3,3 provided by aprofessional 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 Determinationrt shall have the meauing provided in Section
3.4 ofthis Agreement.
1.20 rrlnterconnection and Operating Agreementl 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 elechical system at the point ofinterconnection during the Term ofthis
Agreement and that is attached hereto as Exhibit F.
l.2l "Losses" means the loss ofelectical 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 ofenergy between the point of
interconnection on Seller's system and the Point ofDelivery.
1.22 rrMlyrr means megawatt. One thousand kilowatts equals one megawatt.
1,23 rtMlVhrr moans megawatt-hour. One thousandkilowatt-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-CoiumbiaNon-Firm
Index (Dow Jones Mid-C Non-Firm Index), or its successor, or as agreed by the Parties ifno
successor exists.
1,25 'fNameolate Capacity Ratingrr means the maximum generating capacity ofthe
Facility, as determined by the manufacturer, and expressed in kilowatts (kW).
126 trNERC" means the North American Electric Reliability Corporation or its
successor.
1,27 f'Net OuQlutrr means the capability and elechic energy generated by the Facility,
less Facility Service Power and Losses, that is delivered to the Point ofDelivery, or at the
Alternate Point ofDelivery ifapplicable under Section 11.2, expressed in kilowaff-hours. Net
Output is further described in Section 7.2.
1.28 "Ofr-Peak* means all hours otherthan On-Peakhours.
-6-
1.29 rron-Peak" means the hours ending 0700 through 2200 Pacific Prevailing time,
Monday through Sunday, including national holidays.
1.30 "Point qfDeliveryfi 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'r means the practices, methods, and acts com.monly
and ordinarily used in electrical engiueering and operations by a signifioant portion ofthe
electric power generation and transmission industry, in the exercise ofreasonablejudgment in
the light ofthe facts known orthat 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 rrQualifyingf,'aqility'r or *Qg'means a generating facility whichmeets the
requirements for "QF" status under PURPA and part 292 ofFERC's Regulations, 18 C.F.R. Part
292, and which has obtained certification ofits QF status.
1.33 "Term" shall have the meauing provided in Section 4.1 ofthis Agreement.
1.34 I'Transmitting Entity.li means auy 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 Poiut ofDelivery or at the Alternate Point ofDelivery if
applicable under Section 11.2. Forpurposes ofthis Agreement, Seller is the Transmitting Entity.
1.35 rrlllEccrt 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 ofSeller'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 ofelectric energy from the Facitity to the Point ofDelivery or at the
Alternate Point ofDelivery ifapplicable under Section 11.2.
2.2 feller's lVarranty. Seller wa:rants and represents tha[ (a) Seller has
investigated and determined that it is capable ofperforming and will perform the obligations
hereunder and has not relied uponthe advice, experience or expertise ofAvista in connection
with the transactions contemplated by this Agreement; O) 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
-7 -
and comply with applicable licenses, pe:its and approvals in the desigu, constnrction, operation
aud maintenance ofthe Facility; and (d) the Facility is, and during the Term ofthis Agreement
will remain, a Qualiffing Facility as that te: is used in 18 C.F.RPafi292. Seller's failure to
maintain Qualifuing Facility status will be a material breach ofthis Agreement. Avista reserves
the right to review the Seller's Qualiffing Facility status and associated support and compliance
documents at anytime during the Te: ofthis Agreement.
3. CONDITIONS PRIOR TO DE-IIVERY Otr NET OUTPTII
3.1 Licenses, Pelrnits snd Approvals. Prior to the delivery ofany Net Ouput 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, hibal or local authorities,
including, but not limited to, evidence ofcompliance with Subpart B, 18 C.F.R $ 292.207, tnbal,
state and local business licenses, environmeutal 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[Counsel, Priorto the delivery ofanyNet Outputto 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 Sellor, and based on a reasonable independent review, counsel is ofthe opinion
that Seller is in substantial compliance with saidpe:its as ofthe date ofsuch opinion letter.
The opinion letterwill be in a fo: acceptable to Avista and will acknowledge that the afforney
rendering the opinionunderstands that Avista is relying on said opinion. Avista's acceptance of
the fo: shall not be unreasonably withheld.
33 Independent Euqineerine Cerff,cations. Prior to the delivery ofany Net Output
to Avista, Seller shall submit to Avista applicable Independent Engineering Certifications for (a)
Construction Adequacy for a Qualiffing Facility, and O) Operations and Maintenance Policy for a
QualiSing Facility as described in Commission OrderNo. 21690. Each IndependentEngineering
Certification shall be signed by a licensedprofessional engineer in good standing submitted in a
fo: acceptable to Avista and will acknowledge that the licensed professional engineer rendering
the opinionunderstands 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 desigu and operate the Facility in a
martrer 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 capabitity ofthe Facility ("lnitial Capacity Dete=ination"). Such
Initial Capacity Dete=ination shall be dete:ined by use oftheNameplate 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, ifacceptable to Avistq Avista shall
issue to Seller its written approval ofthe Initial Capacity Dete:ination. Ifthe Initial Capacity
-8-
Determination submitted by Seller is not acceptable to Avista, Avista will promptly notifu Seller
that Avista will not accept its Initial Capacity Determination. In such event, Avista shall engage,
at Selier'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 eventthat 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 ofanyNet Outputto Avista.
3.6 Insursnce. Priorto the delivery ofanyNet Output to Avista, Seller shall submitto
Avista evidence ofcompliance with Section $ Insurance.
3.7 Network Resource Desiguation. 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 netlvork
resource.
3.8 Written Acceptance. Prior to the delivery ofany Net Output to Avista, Seller shall
reguest and obhin from Avista wriffen confinnation that all couditions to acceptance ofelectic
energy have been fulfiIled. 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. TER]VI OF'AGREEMENT AND COMMERCIAL OPERATION DATE
4.1 This Agreement shall be effective on the date last signed below or such other date
setby Commission order (the "Effective Date") and shall continue until December3l,2012
("Term")n unless terminated by Seller with 30 days prior written notice to Avista or otherwise
terminated as provided herein.
4.2 The Parties agree thatthis Agreement will be construed in accordance with
Section 210 ofPURPA and other applicable laws and regulations. This Agreement shall become
fually effective upon the Commission's approval ofall terms andprovisions 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. <Reserued)
-9-
6, SCHEDULING
6.1 SellerwiLlmakereasonable efforts to contactAvistaReal-Time Schedulerto
update Avista Real-Time Schedulerregarding 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, intemrptions 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 ofDelivery, or at the Altemate Point ofDelivery ifapplicable under Section 11.2. For all
Net Output detvered to Avista at the Point ofDelivery, or at the Altemate Point ofDelivery if
applicable under Section I1.2, Avista shall pay the applicable rate specified in Sections 7.3 and
7.4 ofthis Agreement.
7.2 NCI Output. Net Output shall be determined by measuring the Facility Output
and reducing that amount by Facility Service Power and the Meter Locatiou Adjustment Factor
("MLApu1 which is the product ofall applicable loss factors for the distribution system,
transformation and transmission system between the metering point and the Point ofDelivery.
Net Output shall be calculated in accordance with the following fornula:
Net Output: (Facility Ou@ut) - (Facility Service Power) x MLAFMLAF= I - [(Distribution Line Loss Factor of0.0203)
+ (Dower TransformerNo Load Loss of0.0030)
* (Dower Transformer Load Loss of0.0010)
+ (Transmission Line Loss of0.0005)l
MLAF: I - 0.0248MLAF= 0.9752
7.3 Base Energy. For all Base Energy delivered to Avista at the Point ofDelivery, or
at the Alternate Point ofDelivery ifapplicable under Section 11.2, Avista shall pay Sellerthe
lesser of(i) the current month's Market Energy Rate or (ii) the applicable rate based upon the
On-Peak or Off-Peak Avoided CostRates ForNon-Fueled Projects Smaller Than Ten Average
Megawatts - Non-Levelized in effect on the Effective Date ("Avoided Cost Rates") as specifred
h ExhibitD.
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 ofDelivery ifapplicable
under Section ll.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 Exbibit A, Seller shall pay Avista liquidated damages equal to $100 per MWh
ofExcess Energy delivered to Avista, The Parties agree that the damages that Avista would
- 10-
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 ofsuch 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 laterthan the l5m day ofthe
month following the end ofthe monthly billing period or five days after the receipt ofa monthly
statement, whiohever 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 sjf Set Off. If Seller is obligated to make any
payment or refund to Avista, Seller agrees that Avista may set off sucb payment or refund
amount against any current or future payments due Sellerunder this Agreement. IfAvista does
not elect to set ofl 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 156 day ofthe
month following the end ofthe monthly billing period or five days after the receipt ofa monthly
statement, whichover 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 amouut ofone and one halfpercent (1.5o/o) per month, not to exceed the maximum rate
allowed by the law, multiplied by tho 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, SeIIer, at its own cost, shall obtain and
maintain the following insurance in force over the tenn ofthis Agreement and shall provide
certificates ofall insurance policies. All insurance policies required to fulfiIl the requirements of
this Sectiou 8 shall include language requiring that any notice ofcancellation 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 Liabilitv. Seller shall carry commercial general liability
insurance for bodily injury and property damage with a minimum limit equal to
$2,000,000 for each occurrenoe. The deductible shall not exceed the Seller's financial
ability to cover claims and shall not be greater than prevaiiing practices for similar
operations in the State ofldaho.
8.L.2 Property. Seller shall carryall-riskproperty insurance for repair or
replacement ofthe Facility. The limit ofproperty insurance shall be sufficient to restore
-11 -
operations in the event ofreasonably foreseeable losses from nafural, 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 ofldaho.
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 gfloss ggLapse oflnsurance by Seller. Ifthe insurance
coverage required by this Section 8 is lost or lapses for any reason, Seller will
immediately notiff Avista in writing ofsuch 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 ooverage. Notice provided by the insurer required by Section 8.1 shall not
satisf 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 fer 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 &e provisions of Section 8.1. If Seller fails to comply, such failure will
be a material breach and may only be cured by Sellerpromptly supplying evidence that
the required insurance coverage has beenreplaced orreinstated.
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. Ifat 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 rnay only be cured by Seller submitting to Avista evidence ofcompliance.
9. CURTAILMENT, INTERRUPTION QR REDUCTION OI DELIVERY
Avistamay require Sellerto curtail, intemrpt orreduce delivery ofNet Output i4 in
accordance with Section 10.2, Avista determines that ctrtailment, intemrption or reduction is
necessary because ofa Force Majeure event or to protect persons or property from injury or
damage, or because ofemergencies, necessary system maintenance, system modification or
special operating circumstances. Avista shall use commercially reasonable efforts to keep any
period ofcurtailment, intemrption, 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 ofany curtailment, iutemrption, 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
-t2-
Sellerprior to interruption, curtailment, or reduction ofelectrical energy deliveries to Avista in
emergency circumstances, real-time operations ofthe electric system, and/or unplanned eventsg
10. OPERATION
10.1 Communications and Reporting. Avista and the Seller shall maintain
appropriate operating communications throughthe Communicating and Reporting Guidelines
specified in Exhibit A.
10.2 Excuse Eron A.ccepttnce qfDelivery of Enqrg]t
f0,2.1 Avista may curtail, intemrpt, reduce or suspend delivery, receipt or
acceptance ofNet Output ifAvista, in its sole discretion, reasonably determines that such
curtaibnent, intemrption, reduction or suspension is necessary, consistent with Prudent
Utility Practice, and that the failure to do so may:
(a) endanger any person orproperty, 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 ofelectric
service to Avista's or another utility's customers;
(c) interfere with any construction, installation, inspection, testing, repaiq
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 ofany ofAvista's hydro
electric projects in violation of any license or other regulatory requirements.
10,2,2 Avista shall promptly notiff Seller ofthe reasons for any suoh curtailment,
intemrption, reduction or suspensionprovided for in Section 10.2. Avista shall use
reasonable efforts to limit the duration ofany such curtailment, intemrption, 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 govemrnental
authority.
10.4 Avistats Right @ 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.
-13-
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 withPrudent
Utility Practices.
I 1.0 TNTERCONIE_C_IrO_N Ar\D TRANS_MLSSION
11.1 Seller shall make all necessary arangements 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.
lI,2 ln the event that Seller or Avista is required to curtail, intemrpt or reduce delivery
ofNet Output to the Point ofDelivery, Seller may use reasonable commercial efforts to arrange,
at Seller's sole expense, for delivery ofNet Output at a secondary point ofdelivery ('Alternate
Point ofDelivery"). Avista will use reasonable commercial efforts to acceptNet Output at such
Altenrate Point ofDelivery; provided, however, that the Parties have enabled and established the
use ofsuch Alternate Point ofDelivery pursuant to Section I1.3.
113 Seller shall be responsible for any and all costs and expenses related to the
transmission ofNet Outputto the Point ofDelivery or anyAlternate Point ofDelivery underthis
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 acceptNet Output at the Point
ofDelivery and any Alternate Point ofDelivery. Such costs and expenses shall include those
for metering and other parallel operation facilities specified in Exhibit G.
12. FORCE MAJEURE
l2,l 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 performauce due to a cause or condition beyond
such Party's reasonable contol which despite the exercise ofreasonable due diligence, such
Party is unable to prevent or overcome ("Force Majeure"), including but not limited to:
(a) fue, flood, earthquake, volcanic activity; court order aod act ofcivil, military
or governmental authority; shike, lockout and other labor dispute; riot insurrection,
sabotage or war; unanticipated electrical disnrrbance origiuating in or transmitted through
such Party's electric system or any electric system with which such Party's system is
interconnected; or
O) an action taken by such Party which is, in the solejudgment ofsuch Party,
necessary or prudent to protect the operation, perforrrance, integrity, reliability or
stability ofsuch Party's elechic 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 ofa 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 ofany Force Majeure event, is not delivered.
-t4-
12.3 Nothing containod in this Section shall require any Party to settle any strike,
lockout or other labor dispute.
12.4 In the event ofa Force Majeure event, the delayed Parly 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 Majeue 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 perforrr.
L2.5 Force Majeure shall include any unforeseen electrical disturbance that prevents
any electric energy deliveries from occurring at the Point ofDelivery and at any Alternate Point
ofDelivery.
13. INDEMNITY
l3.l Each Party shall defend, indemniry and hold hannless, 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 perfonnance or non-
performance ofthat Party's (as the "Indemnitor") obligations urder 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 indernnified for any loss, liability, l4jury, or damage resulting
from its sole negligence, gross negligence, fraud or willful misconduct; and
(b) The Indemnitor shall be entifle4 at its option, to assume and control the defense and
any settlement ofsuch 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
ANID 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.
I3.3 EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY
SHALL BE LIABLE UNDERANY PROVISION OF THIS AGREEMENT FOR AT.IY
SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PI'NITIVE DAMACE S,
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, WHETHERBASED IN WHOLE OR IN
-15
PART IN CONTRACT,IN TORT, INCLUDING NEGLIGENCE, STRICT LIABILITY,
OR AIIY OTHER TEEORY OT'LIABILITY.
14. ASSIGNMENT
t4.l Seller shall not assign its rights or delegate its duties under this Agreement
without the priorwritten consent ofAvista, which consent shall not be unreasonably withheld.
Subject to the foregoing restrictions on assignments, this Agrooment shall be fully binding upon,
iuure to the benefit ofand 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 satisff the requirements ofany 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 assiguee succecding to any portion ofthe ownership interest of Seller
shall be considered Seller's successor in interest and shall thereafter be bound by this
Agreement.
ls. llg uNspEcrFrEp THrRp PARTY BENEFTCTARTES
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 assigus permitted under Section [4.
16. DEFAI'LT AI\D TERMINATION
f6J In addition to any other breach or failure to perform uuder 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 Qualifuing Facility;
(c) A Party becomes insolvent (e.g., is uaable to meot its obligations as they
become due or its liabilities exceed its assets);
(d) Sellermakes a general assignment ofsubstantially all ofits assets forthe
benefit ofits 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;
- 16-
(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
lnterconnection and Operating Agreement;
16.2 Notice and Opportunity to Cure. In the event ofa Default, the non-Defaulting
Party shall give written notice to the Defaulting Party ofa Default in accordance with Section 29,
Except where the applicable sectionprovides 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 tha\ ifa Default occurs under Sections 16.I(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 accouut ofa Default by the other Party is in addition to, and not in lieu
ot, all other rights or remedies available to such Party under any other provisions ofthis
Agleement, by law or otherwise on account ofthe Default.
r7. Drs.!._trrEREsoLUTroN
Each Party shall strive to resolve any and all differences during the term ofthe
Agreement through meetings and discussions. Ifa dispute cannot be resolved within a
reasonable time, not to exceed thirly days, each Party shall escalate the unresolved dispute to a
senior ofEcer designated by each Party. Ifthe senior officers are not able to resolve the dispute
within ten Business Days ofescalation then either Party may either agree to mediate or arbitrate
the dispute or request a hearing before the Commission.
I8.RELEASE EY SELLER
Sellerreleases Avista from any and all6laims, 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 elechic system to the Facility;
18.2 Intemrption, suspension or curtailment ofelectric senrice to the Facility or any
other premises owned, possessed, controlled or served by Seller, which intemrption, suspension
or curtailment is caused orcontributed to by the Facility or the interconnection ofthe Facility;
18.3 Disconnection, internrption, suspension or curtailment by Avistapursuant to
terms ofthis Agreement orthe Interconnection and Operating Agreement.
-17-
19, GOVERNMENTAL AUTHORITY
This Agreement is subject to the nrles, regulations, orders and other requirements, ofall
governmental authorities havingjurisdiction over the Facility, this Agreement, the Parties or
either ofthem, including Section 210 ofPURPA. AII laws, ordinances, rules, regulations, orders
and other requirements ofgovenrmental authorities that are required to be incorporated in
agreements ofthis character are by this reference incorporated in this Agreement.
20. SEVERAL OBLIGATIONq
The duties, obligations and liabilities ofthe Parties under this Agreement are intended to
be several notjoint or collective. This Agreement shall not be interpreted or construed to create
an association, joint venture or partnershiF 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 uudertaking for or on behalf
of, to act as to be an agent or representative of, or to otherwise bind the other Party.
2I. IMPLEMENTATION
Each Party shall promptly take such action (including, but not limited to, the execution,
acknowledgement and delivery ofdocuments) as may be reasonably requested by the othor Party
for the implementation or continuing performance ofthis Agreement.
22. NQN-WAIVER
The failure ofeither Party to insistupon or enforce strict performance by the other Party
ofany provision ofthis Agreement or to exercise any right undor 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 ofany 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 QF LAWS AIID YEI\ITIE
This Agreement shall be construed and interpreted in accordance with the laws ofthe
State ofldaho without reference to its choice oflaw provisions. Venue for any litigation arising
out ofor related to this Agreement shall lie in the District Court ofthe Fourth Judicial District of
Idaho in and for the County ofAda.
- 18-
25. HEADINGS
The Section headings in this Agreement are for convenience only and shall not be
considered part ofor used in the interpretation ofthis Agreement.
26. SEVERABILITY
The invalidity or unenforceability ofany provision ofthis Agreement shall not affect the
validity or enforceability ofany other provision ofthis Agreement, and this Agreement shall be
construed in all respects as ifthe invalid or unenforceable provision were omitted.
27. COUNTERPARTS
This Agreementmay be executed in two ormore counterparts, each ofwhich shall be
deemed as an original, and together shaii constitute one and the same document.
28. TAXES
Each Party shall pay before deliuquency 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
Kooteuai Electric Cooperative, lnc.
2451W. DakotaAvenue
Hayden, Idaho 83835-0278
Either Party may change its desiguated representative to receive notico and/or ad&ess
specified above by giving the other Party written notice ofsuch 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
-19-
financial obligations, and the provisions ofSection 13 (Indemnity) and Section 17 (Dispute
Resolution).
31. ENTIRE AGREEMENT
This Agreement, including the following exhibits which are attaohed and incorporated by
reference herein, constitutes the entire agreement ofthe Parties and supersedes a1l prior and
contemporaneous oral or written agreements between the Parties with respect !o the subject
matter hereof.
Exhibit A Communications and Reporting
Exhibit B lndependent Engiueering Certificatious for Construction Adequacy for a
Qualiffing Facility and Operations and Maintenance Policy
Exhibit C Project Description and Point ofDelivery
Exhibit D Avoided Cost Rates
ExhibitE Initial CapacityDeterrrinationDocumentation
Exhibit F Interconnection and Operating Agreement
Exhibit G Facilities for Integration and Operation ofFighting Creek
Facility
-20-
IN WITNESS WHE.REOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives as ofthe date set forth below.
KOOTENAI ELECTRIC
cooPERATM,INC AVISTA CORPORATION
Title:
Date:
General Manager
b**.,o"- ! 2ora
By: H-.+A[**
Printed Name: Ra\cssFS LSE {'}
P*"*$B"-S.^ttg
! /s/aorr-
Title:
Date:
By:
-2L -
Exhibit4
Communicetion aud Rcporting
(1) Email communications between Seller and Avista shall be submitted to:
Avista: [e-mail]; or
robert.fo llini@avi stacorp. com
Seller: [e-mail]
Alternate: [e-mail]
(2) All oral communications relating to electric energy scheduling, generation level changes,
intemrptions 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: (509) 495-49 1 I
Alternate Phone: [phone]
Seller: Q08) 292-3276 (Shawn Dolan)
Alternate Phone: [phone] (DougElliott)
1b) Real-Trme Schedule (available 24 hours a day)
Avista Real-Time Scheduler: [phone]
Seller: [phone] (Shawn Dolan)
Alternate Phone: [phone] (DougElliott)
(3) Either Party rnay chauge its contact information upon written notice to the other Party.
-1-
Exh-[DitB
Independent Engi.neeritg eertification [qr
Construction ^A,deouacv for a Oualifvins f,'acilitv
l. 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 ofelectric powerplants ofthe same qpe as Fighting CreekLandfill
Gas to Energy Facility sited atthe Kootenai County Solid Waste Facility, near Bellgrove, Idaho
(the "Facility").
2. I have reviewed and/or supervised the review ofthe constnrction 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 ttre stamp ofthe certiffing lice,nsed
professional engineer ofthe design, and that ttre Facility was built to courmercially acceptable
standards for this tfrpe offacility.
3. I have no economic relationship o the designer or owner ofsaid Facility and have
made my analysis ofthe plans and specifications independently.
4, I hereby CERTIFY thatthe above statements are complete, fiue, and accurate to
the best ofmy knowledge and I therefore set my hand and seal below.
Signed and Sealed
DATE:
SIGNATT]RE:
PRINTED NA]T,IE:
1-
Indeoendent Engineering Certification for
Operations aud Maintenance Policy for g Qualifying Facility
1. I, am a licensedprofessional engineer registered to practice
and in good standing in the State of . I have substantial experience in the design,
construction and operation ofelectric power plants ofthe same type as Fighting Creek Landfill
Gas to Energy Facility sited at the Kootenai County Solid Waste Facility, near Bellgrove, Idaho
(ttre "Facility").
2. I have reviewed and/or supervised the review ofthe Policy for Operation and
Maintenance ("O&M Policy") for the Facility aud it is my professional opinion that, provided
said Facility has been designed and built to appropriate standards, adhereirce to said O&I\d Policy
will result in the Facility's producing at or near the design electical output, effieiency, and
capacity factor for trventy yea$, baning unforeseeable Force Maj eure.
3. I have no economic relationship o the designer or owner ofsaid Facility and have
made my analysis ofthe plans and specifications independently.
4. I have supplied the owner ofthe Plant with at least one copy ofsaid O&M Policy
bearing my Stamp andthe words 'CERTIFIED FOR IDAHO P.D.C. SECITRITY
ACCEPTANCE" on each sheetthereof.
5. I hereby CERTIFY that the above statements are complete, tnre, and accurate to
the best ofmy knowledge and I thereforo set my hand and seal below.
Signed and Sealed
DATE:
SIGNATURE:
PRINTED NAME:
-t-
Exhibit e
Project Description gnd Point ofDelivery
DescripLiqn o :[the FacilitJL
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 CaterpillarModel 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 (Wl16.93 , N47.532), nearBellgrove, Idaho.
Location:
Seller's Facility is located at Kootenai County Solid Waste Facility (W116.93 ,
N47.532), near Bellgrove, Idaho.
Point ofneliyery:
+ e-rE-
J 'r-.--*
-+ F......F
l{ Jt'?LE.a
Point of Delivery Location: The pointwhere Avista's Dower- Post Falls IISkV Tap
Transmission Line and KEC's Dower - Post Falls IISkV Tap Transmission Line are
connected.
Alternate Point g.f Delivery;
Alternate Point ofDelivery 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 ofMetering:
Mctering Location: In Seller's Facility, on the 24.9 kY side ofthe generator step-up
transformer over which electric power and energy flows.
ErhlbitD
Avoided CostRates
Jan2O12-Feb2012
Mar 2012 - Jun 2012
Jl;il2A12-Dec2012
Jan 2013 - Feb 2013
Mar 2013 - Jun 2013
Jul 2013 - Dec 2013
Heavy LightLoad LoadHours Hours
$/MWh $/MWh
$56.00
$43.56
$56.00
$59.5s
$46.32
$,59.5s
$54.15
$42.12
$54.15
$61.40
$47.76
$61.40
ExhibitE
Initial Caoacity Determination Documentation
Within fifteen (15) days after a Commission order specified in Section 4.2 approving this
Agreement, the Seller shall provide to Avista;
t. the manufacturer's serial number and specifications for each engine - gensrator 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 Q less Facility Service Power and Losses.
Avisi! Cont act No. Av.TRti-Eo+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") b executed by and between AVISTA CORPORATION ("Avista)
and KOOTENAI ELECTRIC COOPERATIVE, lNC. ('KEC"), which hereinafter rnay be refened
b individually as "Party" or collectively as "Partiesn,
RECITALS
WHEREAS, Avista and KEC curently operate interconnected electric systems; and
WHEREAS. the terms ard conditions goveming the operation and maintenance of the
interconnected electric systems of Avista and KEC have historically been pursuant trc a power
sales agreement between KEC and the Bonneville Power Administration ('Bonneville") and a
General Transfer Agreement batween Avista and Bonneville (Bonneville Contract No, DE-
MS79-86BP91970) (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, 2OO1 and October 1, fr11 (collectively
the nPower and Transmission Agreements"); and
Page 1
WHEREAS. upon the axpiration of the General Transfer Agreement between Avista and
Bonneville al240O 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 facilitrate tha coniinued delivery of electric power frorn Bonneville
to KEC, Avista and Bonneville have executed a sErvice agreement under Avisia's Open Access
Transmission Tariff - FERC Electric Tariff Volume No. 8 fTaritf') pursuant to which Avista
provides network integration transmission service b Bonneville for such deliveries to KEC; and
WHEREAS. at some irture point in iime KEC may alect to executo a service agrEement
under Avista's Tariff, replacing the aforementioned agreement between Avista and Bonneville,
to facilitate lhe delivery of electric powor to lcEC; and
WHEREAS, Avista and KEC desire to provide for the terms and conditions for he
operation and maintenance of their interconnected electric systems; and
WHEREAS. Avista and KEC are amending and restating the lnterconnection and
Operating Agreement between the Parties (Avista Contract No. AV-TR05-0205), odginally dated
November 29, 2005- trc incorporate, among other things, provisions regarding Generating
Projec'ts.
NOW, THEREFORE, the Parties agroe as follows;
Sec'tion _1 : Deflnltlons
Ancillarv S_ervices - 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 ln accordance with lndustry Standards and Good Utility
Practice.
Commission - The Federal Energy Regulatory Commission, or its regulatory successor.
1_1
1.2
Page 2
1.3 9irec! Assionment Facilities - Facilities or portions of facilities that are constructed by
Avista for the sole use or benefit of KEC.
1.4 Generating Proiect - Any electric generating facility, except an electric generating facility
that is net metered pursuantto 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 UtiliW Practice - The practices, methods and acts engaged in or approved by a
significant portion of fte electric utility industry during the relevant time period, or he
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 b the exclusion of all others, but rather to
be a range of acceptable practices, methods or acts.
1.6 lndustry 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 Gustomers - 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 NOl'lh 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
2.1
agreement under the Tariff for the delivery of eiectric power trc 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 Electrici$ Coordinating Council, or its successor.
Sectlon ! ; Term of Aqreement
Effective Date - The effective date of this Agreemont shall be the later ot
(a) the date this Agreement is executed by both Parties; or
(b) the date this Agreement is accepted for filing by the Gommission, without any
drange or condition by tha Commission which is unacceptable b eitherAvista or
KEC, provided, however, that by executing this Agreement KEC does not
conssnt tc any jurisdiction by the Commission that the Commission does not
already have over KEC.
Term - The term Df ttris Agreement shall commen@ on the effective date and shall
continue for ten (10) years from the Service Commencement Date, except as provided in
Section 2.3 below.
Continuation of Term - The term of this Agreement shall continue beyond ten (10) years
ftom the Service Commencement Date unless affirmatively terminated in writing upn
tWD (2) years'written notice by either Party D the Dther Parly.
2.2
2.3
Page 4
Section 3: Exhibits
The following ExhibiE are attached and incorporated by reference herein:
Exhibit A - Points of Delivery
Exhibit B - Meter Reading and MeterTest Procedures
Exhibit C - Substation Construction and Ownership Guidelines
Exhibit D- Generating Prolects
Exhibit E - Generation lnterconnection Guidelines and Standards
. Section 4. Services Provided !y Avista or Other Parties
Tlansmission_ Service - KEC, or Bonneville on behalf of KEC, requires Transmission
Service b he Poinb of Delivery in order b serve KEC'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.
Ancillary Services - KEC, or Bonneville on behalf of KEC, 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 gl Delivery aod Facilities
Additional Points of Delivery - During the term of this Agreement, KEC may, in
accordance with Good Utitity Practice and, when applicable, upon Avista's approval, add
new Points of Delivery such as b facilitate Transmission Service under the Tariff.
Subject to the foregoing, he Parties shall add any such new Point of Delivery concurrent
with tre commen@ment of Transmission Service under the Tariff to such new Point of
Delivery.
4.1
4.2
5.1
Page 5
(b)
Ownership of Facilities
(a) Except as otherwise expressly provided, ownership of any and dl 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.
Each Party shall identify all movable equipment and, to the extent agreed upon
by fie Parties, all other salvable facilities that are installed by such Party m the
property of the other, by permanently affixing ihereto suitable markers plainly
identiffing tre owner of the equipment. Within a reasonable time subsequent to
initial installation, and subsequent tc 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
SUUect trc the Substation Construction and Ownership Guidelines outlined in
Exhibit C.
Addition of Facilities - Any incremental cosb 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 Projecb shall be provided for pursuant to fte
Tariff or another agroement between the Parties.
Permits
(a) tf any equipment or facilities associated wih any Point of Delivery and belonging
b a Party are, or are planned to be, located on the propefi of the other Party, a
permit to install, test, maintain, inspact. replace, repair, and operate during the
term of this Agreement and tc remove such equipment and facilities at the
5.3
Page 6
expiration of the Term, together witr he right of entry to said property at all
reasonable times, is hereby granted by the other Party, provided, however, that
permils to perform ground excavation are exomptsd from this Section 5.4(a).
(b) Each Par$ shall have the right at all reasonable times to enter the property of tre
other Party for the purpose of reading any and all maters meniioned in tris
Agreement that are installed on such proporty, provided, however, that such right
shall be consistent with and SLJt[ect t any applicable national secudty
requirements.
(c) lf either Party is required or permitted to install, test, maintain, inspect, replaca,
repair, remove, or operate equipment m the property of the other, the owner of
such property shall fumish the other Party with accurate drawings and wiring
diagrams of associated equipment and facilities, or, if such drawings or diagrams
are not available, shall fumish accurate information regarding such equipment or
facilities. The owner of sudr property shall notify the other Party of any
subsequent modification that may affect the duties of the other Pafi in regard to
such equipment, and furnish he other Party with accurate revised drawings, if
possible.
5.5 lnspec'tion O[ 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. Sucfr 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 fiom 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 insbuctions or standards for inspection as the Parties may agrce upon.
Only Generating Projects and those electric installations used in complying wih the
terms of this Agreement shall be subject to inspection.
Pagel
6_1
Sec'tion Q - Metering
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 subsaquent
agreement between Bonneville and KEG, Avista and/or KEG shall own and malntain 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 powor to the Point(s) of Delivery, or any other agreement between the
Parties. Meters at he Point{s) of Delivery and Generating Project(s) shall be read
pursuant to the Meter Reading and MeterTest Procedures ouflined in Exhibit B.
Tests of Metqrinq lnslallations - Each Party shall, at its expense, test its measuring
instrallations associated with this Agreement, a service agreement under the Tariff
providing for the delivery of electric power to the Point(s) of Detivery, or any other
agreement between the Partias, ln accordance with the Meter Reading and Meter Test
Procedures outlined in Exhibit B. The Parties may mutually agree b use a single set of
meters. ln the eventthat a single setof meters are utilized, tests of suctr 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.
Materinq and Communications Reguired for Ancillary Services - To the extent not
provided by Bonneville pursuant b its agreements with KEC, KEC shall be responsible
for all costs associated with the installation, operation, and maintenance of any metedng
and communications equipment necessary for the provision of Ancillary Services either
by Avista, KEG, or by a third parly. All such metering installations shall be installed.
operated. and maintained pursuant to lndustry Standards and Good Utility Practice.
6.3
Page 8
6.4 Measurements and lnshliatiDn Df Avista Meters - NDtwithstanding any Dther provisiDn in
this SectiDn 6. Avista may at any time install meters D metertng equipment D make any
measurements Dr any PDint U Delivery Dr Generating PrDject required fi)r any
cDmputatiDn Dr determinatiDn mentiDned in this Agreement. a service agreement under
the Tariff prDviding Or the delivery Df electric pDwer to the Point(s) Df Delivery, or any
other agreement betraeen he Parties, and if such meters or metering equipment are SD
installed, such measurements shall be used thereafter in such cDmputratiDn D
determination.
Real-Time Data Acq uisition
(a) PDintts) 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 D above 69kV. The Parties shalt
facilitate such data acquisitiDn pursuant b the SubstatiDn ConsbuctiDn and
Ownership Guidelines outlined in Exhibit C.
Gene.r_atinq Proiect(s) - Real-time data acqUisition. which shall include al a
minimum real power and energy (MW, MWh) and reactive power (Mvar, Mvarh),
is required for any Generating Project Df aggregate output equal to or exceeding
3 [A/A Avista may speciff real-time data acquisition needs Dr a case by case
basis for Generating Projects that remain balow 3 MVA The Parties shall
facilitate such data acquisitiDn pursuant b the GeneratiDn lnterconnection
Guidelines and Standards outlined in Exhib'lt E
Section 7: Operation and Maintenance
OoeratiDn and Maintenance of lnterconnected Facilities - Avista and KEC shall maintain
the facilities enabling the PDint(s) of Delivery described in Exhibit A in gDod working
order and shall operate and maintain their respective interconnected facilities pursuant
6.5
(b)
7.1
Poge I
7.2
to lndustry Standards and Good Utility Practice. The Parties shall adhers b the
Substation Construction and Ownership Guidelines ouUined in Exhibit C.
Operation of KEC's Points gl Dellverv - AMsta 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 Ewitching orders
recsived from Avista system operations personnel. KEC personnel shal! adhere to the
Avista requirement that anyone entering an Avista substation notiff Avista system
operations of their presen@ and their operational intentions. Operation of KEC
equipment at each Point of Detivery not located in an Avista substation shall be
coordinated with Avista system operations personnel to the extent practicable pursuant
b lndustry Standards and Good Utility Practice.
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 moet the applicable
operating requirements of KEC. Such personnel shall be familiar wih the operation of
all substation or line facilities and equipment that concems 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 electlioal trades with which he orshe may be
connected.
Power Quality - The interconnection of Avista and KEC facilities requires mutual
responslbillties 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 he form of three-phase alternating
current at a nominalfrequency of sixty (60) herE.
7.3
7.4
Page 10
7.5
(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 * 5o/o of the steady-state
operating voltage and at the Points of Delivery below 100kV are manageable to
within t 10o/o of the steady-state operating voltage specified for each Point of
Delivery. Boft Parties shall also design, construct. operate and maintain its
electric facilities in accordance with lndustry Strandards and Good Utility Practice
to reduce b acceptable levels any momentary voltage fluctuations that affec't the
other Party's facilities.
(c) Freguencv Control - Bott Parties shall operate and maintain their systems to
enable the Avista control area to maintain its frequency contol obligations to
applicable regional operating criteria.
(d) Harmonic Control - Each Party shall design, construct. operate, maintain and
use its electric facilities in accordance with ihe IEEE 519 standard and Good
Utility Practice to reduce b acceptable levels he harmonic curents 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 he facilities of the Party hat owns
the system on which harmonics are generated.
Reactive Power - The Parties shall jointly plan and operate their interconnected
electrical facilities pursuant to lndustry Standards and Good Utility Practice in order b
minimize the reactive power requirements placed upon the other Party. Pursuant to
such joint planning and operation, Avista may require KEC b install necessary
oquipment or implement necessary operating practices on KEG'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 1'l
7.7
7.8
Balancina Phase Demands - !f required by Avista at any time during the term of this
Agreement and pursuant D lndustry Standards and GDod Utility Practice, KEC shalt
make such changes as are necessary Eh its system tc balance the phase cunents at
any Point Df Delivery such that the cunent Df any Dne phase not deviate by more han
fwe (5) percent from the average of the cunents on all three phases, unless otherwise
agreed upon by the Parties.
Remedial ActiDns - Avista may require KEC 0 participate in or carry KEC's pro rah
share Df any remedial actiDn scheme that may be required D support he reiiability of
Avista's system Dr the regiDnal Dr sub-regional transmissiDn systems. ln such case,
Avista and KEC shall joinily plan and coordinate the implementatiDn Df the required
remedial action scheme pursuant D lndustry Standards and GDDcI Utility Practice.
Automatiq Under-frequency Load Sheddinq Protection
(a) Avista may require KEC b participate, up to its pro rata share, in the WECC
CDordinated Off-NDminal Frequency Load Shedding and Restoration Plan D a
successor program that is required to support the reliability of Avista's system or
he regional or sub-regional transmission systems.
Such pro-rata share shall be determined by the proportion of the total load of
KEC's Native Load Customers to the sum of the total loads of Avista's Native
Load Customers, KEC's Native Load Customers and he native lDad cus0mers
of other parties served directly by Avista's Transmission System. Avista and
KEC shall jDinily plan and cDordinate the implementation Ef such protec'tiDn
pursuant to lndustry Standards and Good Utility Practice, provided, however, ihat
KEC shall have the righttD specify wtrich U its loads are O apply b meet its pro
rata obligation Dr autDmaiic under-frequency lM shedding. lf such loads are
served vh a PDint of Delivery where KEC owns the distribution feeder probctiDn
device, KEC shall provide, instiall, operate and maintain the necessary relay
(b)
Paga 12
equipment on KEG'S distribution system. at KEC's cost, pursuant to lndustry
Strandards.
(c) Generating Projec{s 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 lndustry Standards.
7.9 Gengrating Proiects
(a) All Generating Prcjects 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 lndustry Standards and Good Utility Practice, and the
Generaiion lnterconnection 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, speciffing system configuration and
conditions underwhich tile Genorating Project may and may not op6rate.
7.1O Maintenance Resoonsibilitv - 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 lnside an Avista Substation - Any earth excavation inside an Avlsta
substation shall be performed by Avista or Avista's authorized agents and shall
be the responsibility of Avista. To the oxtent 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 oosts associated with such excavation.
(b) Excavation lnside 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
Avistia, for Avista's sole or joint benefit, Avisla shall reimburse KEC for an
appropriate share of the costs associated with such excavation.
7.11 Maintenqnce Schgduling and Continuitv of Service - The Parties shall coordinate their
respectiva equipment maintenance schedules so as to minimize any effects upon either
Party due b temporary interruptions associated with such maintenance. Avista may
temporarily interrupt or curtail service at the Points of Delivery:
(a) upon reasonable notice b KEG in order to install equipment in, rnake repairs,
replacements, investigations, end inspections of or peJiorm other maintenance
work on Avistia's system; provided, however, that Avista shall give KEG prior
notice thereof, the reason therefore, and the probable duration thereof; and
without prior notice of such interruption or curtailment as may be necessary
because of uncontrollable forces as proVtded in Section 8. Avista shall use
reasonable efforts to avoid inteJierence with the operations of KEG and to repair
the cause of any such intemrption 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.
Sectlon 8: Uncontrollable Forces and. Llablllly
Uncontrolla.b-Le Forces - Neither Party to this Agreement shall be considered to be in
default in performance of any obligation hereunderif failure of peJiormance shall be due
to uncontrollable forces. The term "uncontrollable forces" means any cause beyond the
controJ 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.
sabolage, and restraint by court order or public authority, which by exercise of due
(b)
8.1
Paga 14
a
8.2
foresight, such Party could not reasonably have been expecied b avoid, and which by
exercise of due diligence it shall be unable b 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 b removable or remediable causss which it fails to remove ot
remedy with reasonabls dispatch. Nothing contained herein, however, shall be
construed trc require a Party to prevent or setfle a strike against its wili. Damage to the
electrical system of aither KEG or Avista caused by or afsing out of an electrical
disturbance shall be governed under Section 82 and not under the provisions of this
Section 8.1.
Electric Disturbances
(a) For the purposes of this section, an electric disturbance is any sudden,
unexpected, changed, or abnormal electric condition occuning 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 tc. lhe abnormal
flow of powor which may damage or interfere with the electric system of
the other Parly or any electric system connected with such other Parly's
electric system; and
(il) to minimize the effect on its electric system and on its customers of
electric disturbances originating on its own or another electric system.
Eeiease ard Limitation qf Liability - lf both KEG and Avista are parties to the Western
lnterconnected Systems Agreement Limiting Liability, that agreement shall continue in
full force and effect as between the Parties b the extent that such provisions may apply
under this Agreement. lf either KEG or Avista b not a party to the Westem
lnterconnected Systems Agreement Limiting Liabili$, then the following proMsft:ns shall
Page b
apply:
(a) Release !y Avista - Avista hereby releases each of KEG and the directors.
employees, agents and legal representativas of KEG from any and all claims,
losses, harm, liabilities, damages, @sts and expenses to the extent resulting
from any:
(i) operation of KEG's electric system in parallel with Avista's electic system;
(ii) eleclric disturbance or fluctuation that migrates, directly or indirectly, from
KEG's electric system to Avista's electric system;
(iii) intenuption, suspension or reduction of delivery of power fr,om KEG's
electric system b Avista's electric system, regardless of whether sudt
intenuption, suspension or reduction is caused or contributed lo by
Avista's electric system or the interconnection of Avistia's electric system
with KEG's electric system; or
(iv) disconnection. intemrption, suspension or curtailment, through manual
operation, automatic operation or othenrise. by KEG in he event that
KEG, in the exercise of its sole discretion, determines or has determined
that an omergency condition exists or may exist that is contrary to
lndustry Standards and Good Utility Practice, and failure to do so:
(A) rnay cause imminent harm to any person or property, or
(8) lffi:, ;::il::;":::,H;',:: :, :::;:::i,
distribution line thereof) or any electric system with which KEG is
interconnected.
The foregoing release shall not be effective tc 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 fiom 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 KECs electric system:
(ii) electric disturbance orfluctuation that migrates, directly or indirectly, from
Avista's electric system b KECs electric system:
(iii) intemrption, suspension or reduc-tion of delivery of power fiom Avista's
electric system tc KEG's electric system, regardless of whether sucfr
interruption, suspension or reduction is caused or contributed tc by KEC's
electric system or the interconnection of KEC's electric system with
Avista's electric system; or
(lv) disconnec'tion, intemrption, 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
lndustry Standards and Good Utility Practice, and failure to do so:
(A) may cause imminent harm trc any psrson or property, or
(B) may cause the disruption of reliable operation of Avista's or KECs
electric system (including, but not limited to, any tansmission or
dislribution line thereof) or any electric system with which Avista is
interconnected.
The foregoing release shall not be effective b the extent any claims. losses,
harm, liabilities, damages, @sts, and expenses are the result of Avista's willful
misconduct.
Page 17
8.5
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 b in consideration of the mutual benefits
derived underthe terms of ttris Agreement.
!nsurance
(a) KEC and Avista shall obtain and maintain commercial liability insurance with a
single limit of coverage of not less than $5,000,000 for each occurence. A
certificate of such insurance shall be provided b either Party upon request by tre
othar Party. Each Par$ shall promptly notiff 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 trc
Good Utility Practice.
Section ! ; Miscellaneous
Notices - Any notice b 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. O. Box3727
Spokane, WA 99220-3727
Attention: General Manager
Kootenai Electric Cooperative, lnc.
2451 West Dakota Avenue
Hayden, !D 83835
9.1
lf to KEC:
Page 18
9,2
- or-
P. O. Box 278
Hayden, lD 83835-0278
Either Party may change its address specified in this section by giving the other Parg
notice of such change 'ln acccrdance with this section.
Notices of an Operating Nature - Any notice associated with day-to-day electric utilig
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,
Amendment - No change, modification or amendment of this Agreement shall be valid
unless set forh in a written instument signed by both Parties.
Assionment - Neither Parly shall assign this Agreement without the prior written consent
of the other Party. Subject lo 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 Pafi l,ereby
consents b assignment of this Agreement to a successor whers a Party sells or
transfers all or substantially all of its electric utility operating plant to a third pafi.
Ng 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 suooessors and assigns permitted under Section
9.4. M action may be commenced or prosecuted against any Party by any third party
claiming b be a third-party beneficiary of this Agreement or the lransactions
contemplated hereby. This Agreement shall not release or discharge any obligation or
liability of any third party tc any party or give any third party any right of subrogation or
action over or against any Party.
Page 19
9.6
9.7
lmolementation - Avista shall timely file this Agreement with tre Comrnission. Each
Party shall take such additional action as may be reasonably required for tlre
implementation and performance of this Agreement in accordance with its terms.
Arbitration - Whenevar Avista and KEC are both members of a Regional Transmission
Association. Regional Transmission Organization. or lndependent 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
goveming agreement for that organization. The determination of any other disputed .
matter betwaen the Parties adsing out of or relating b this Agreement, except an
obligalion 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) lnitiation a-nd Selection of Arbitrators - The Parly 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 tre second arbitrator by notice in writing to the
Party calling for arbitration. and the turo so appointed shall choose and appoint a
thkd (if the Parties have not agreed upon and appointed a third). lf such other
Party fails b appoint he 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 nolice of
appointment of the second arbitrator (or, in the absence of such agreement, by
lhe two arbitrators who have been appointed), either Parly, upon five (5)
business days' written notice delivered t0 the other Party, may apply to the
Federal District Court for the District of ldaho for appointment of the second or
Page Z)
(b)
third arbitrator, as the case may be, Neilher Party may discuss any matter to be
arbitrated wih any arbitrator after such arbitrator is appointed but prior to fie
arbitrators' determination, without providing notice tc the other Party and
reasonable opportunity to participate, The Parties intend tllat every arbitrator be
an unbiased person with experience in the subject matter to be arbitrated.
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. ln any sucfr
arbitration, aach Party thereto shall have:
(i) full access trc the records of lhe other Party that pertain to tre subject
matter or the controversy;
(iD the power to call for testimony of any director, officer, employee, agent, or
representative of the other Party having knowledge relevant (o 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
applieable to the Federal District Court for ths District of ldaho).
Disputes regarding the extent of discovery shall be resolved by the arbitrators.
Unless othenrvise 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 thir$ (30) calendar days of the completion of the
arbitration proceeding. ln determining matters submitted for arbitration, no
arbitrator shall ba requlred to adhere to or advance the position of any particular
Party. The determination of the matters submifted for arbitration shall be made
by a majority of the arbitrators, and shall be binding as between he 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
arbifators shall be final and binding and shall be enforceable by a court of
competent jurisdiction at lhe request of either Party.
(c) Costs - Each Party shal! pay for the services and expenses of the arbitrator
appointed by or for it, and for all of its own costs including its own attomey 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 arbitnation
shall be paid equally by tho Parties.
Sectlon 10 1 Default
ln the eyent that shher KEC or Avista commits a material breach of or default under this
Agreement (the "Defaulting Pafi"), 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) lf after thirty (30) days following receipt of such notice, the Defaulting Party has not taken
the steps necessary to cure such breach or default, he Non-Defaulting Party may, at its
option, terminate this Agreement; provided, however, that if the Defaulting Party within
such 3Dday period commencos and thereafter proceeds with all due diligence b cure
such default, such 3D-day period shall be extended up trc 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 elecb b
terminate this Agreement, it may, in addition b other remedies provided for hsrein.
pursus such remedies as are available at law or in equity.
(c) The Non-Defaulting Pafi may, at its option, cure (or cause to be cured) any material
breacll or default hereunder within ttre appropriate time period, without waiver of any
Page 22
remedy at law or in equity including the right of reimbursement. The right of tfre Non-
Defaulting Party to flrB any breach or default by the Defaulting Party shall not be
construed or interpreted as obligating such Non-Defaulting Party to make any such orre.
(d) A Defaulting Par$ shall be liable to the Party cta'irning default for all costs. including
costs of collection and reasonable attomey fees incuned by such Party claiming default.
The proceeds paid by any Defaulting Party b remedy any such default shall be
distributed b the Party claiming default equal to the additional cost actuaily paid by the
Pafi claiming default as a result of the default.
Section 11 : Waiver
A waiver at anytime by a Party of iB rights with respect '10 a default by another Party under fiis
Agreement, or with respect to any othsr 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 asserling or enforcing any right hereunder shall be deemed
a waiver of such right.
12.7
Section 12: Relationship of Parties
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 witr
regard to anyone or mor6 of the Parties. Each Party shall be individually responsible for
its own covenants, obligations, and liabilities under this Agreement.
Att rights of the Parties are several, not joint. No Party shall be under the control or shall
be deemed b control another Party. Except as expressly provided in this Agreement. no
Party shall have a right or power b bind another Party without its express written
consent.
12.2
Page 23
Section 13; No Dedication g[ FaciJities
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 b
tre public or to the other Parly, and it is understood and agreed that any such undertaking
under any provision of this Agreement by a Pafi shall cease upon the termination of such
Party's obligations under this Agreement,
Section 14; Governing Law
This Agreernent shall be interpreted, construed and enforced in accordance with the iaws of the
State of ldaho orthe iawof the United States of America, whichever ls applicable, as if executed
and 10 be performed wholly within the State of ldaho,
Page2l
lN WITNESS WHEREOF, the Parties hereto have caused this Agreement b be
executed in their respectiva names by their duly authorized representatives as of the date first
noted above,
Jeff Schlect
Manager, Transmission Services
Signed this 14th dayof October,2011,
KOOTENAI ELECTRIC COOPERATIVE, INC,
Bv: f)*r*- ct t-(/ll*.:-
-
Douglas A Elliott
General Manager
Signed this r I day of ,Lt ,cnbr- ,2011.
AVISTA CORPORAT|ON
Page?5
EXHIBITA
POINTS OF DELfVERY
1) Athol Point of Delivery
Location: The point near Spirit Lake, ldaho, 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: ln KEC's Athol Substation, in the distribution circuit(s) over which electric power
and energy flows
2l Coaur d'Atene 15h Sheet Point of Delivery
Locaiion: The point in Avistra's Coeur dAlene 1Sth Street Substation where the 13,8 kV
facilities of Avista and KEC are connected
Voltaae: 13,8 kV
Meterina: ln Avista's 15ih Street Substation, in the 13,8 kV circuit overwhich electric
powerand energyflows
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 kVTap Transmission Line are connected
Voltage: 115 kV
Meierino: ln KEC's Dower Substation, in the distribution circuii(s) over which electn'c
power and energy flours
4l Hayden Point of Delivery
Location: The point where Avistra's Coeur d'Alene-Ramsey 115 kV Transmission Line
and KEC's Hayden 115 kvTap are connec'ted
Voltage: 115 kV
Meterino: ln KEG's Hayden Substation, in the distribution circuit(s) over which electric
powerand energyflows
Exhfol A- Polnb of Dellvery A-1
5) Julia Street Point of Delivery
Location: The point where Avistia's Appleway-Ramsey 115 kV Transmission Line and
KEC's Julia Street 115 kV Tap are oonnected
Vpltaae: 115 kV
Meterino: ln KEC s Julia StEet Substation, in the distribution circuit(s) over whidr 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 KEC are connected
Voltage: 13.8 kV
Meterina: On KEG's distribution pole adjacent to Avista's O'Gara Substation h the 13.8
kV circuit over which electric power and energy flows
n Pleasant View Point of Delivery
Location: The point in Avista's Pleasant View Substation where the 13.8 kV facilities of
Avista and KEC are connected
Voltage: 13.8 kV
Metering: ln Avista's Pleasant View Substation, in tile 13.8 kV circuit over which electric
powerand energyflows
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: ln Avista's Plummer Substation, in the 13.8 kV circuit over whicfr electric power
and energy flows
Exhibit A- Pcinte ol Delivery A-2
Prairie Point of DeliverY
10)
Location: The point in the jointly-owned Prailie Substation, at the supply side of KEC's
115 kV circuit swilcher, where the 115 kV facilities of Avista and l(EG are
connected
Voltage: 115 kV
Metefing; ln KEG's portion of the jointly-owned Prairie Substration, in the distribution
circuit(s) over which elechic power and energy flows
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: ln Avista's Rathdrum Substration, in fte 13,8 kV circuit over which electric
powerand energyflows
Scarcella Point of Delivery
Location: The point where Avista's Pine Street-Rathdrum 115 kV Transmission Line 6
connected to KEG's Scarcello Substation 115 kVTap
Voftage: 115 kV
Meterino: h KEG's Scarcello SUbstation, in the distribution circuit(s) over which electric
power and energy flows
Setters Point of DeliverY
Location: The pointwhere Avista's Rockford Tap 115 kVTransmission Line is connected
to KEG's Setters Substation 115 kV Tap
Voltage: 115 kV
Metering; ln KEC's Setters Substation, in the distribution circuit(s) over which electric
powerand energyflows
11)
12',)
E$bttA - Polnts of Dellwry AA
81.
EXHIBIT B
METER READING AND METER TEST PROCEDURES
Meter Raadings
Meter readings associated with the delivery of electric power b the Point(s) of Delivery
and for Generating Project(s) shal! be the responsibility of the Parly owning such meterc.
ln the event such meters are owned by Bonnevllle pursuant to the Power and
Transmission Agreements. KEG shall request that Bonneville provide such meter
reading information directly to Avista. Altematively, KEG shall, upon request by Avista.
provide to Avista any such meter reading information made available b KEC by
Bonneville. Eleclric 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. ln the event a recording
rnetering device b installed, actual monthly energy deliveries shall be determined from
the record developed.
Meter Testing
Unless provided by Bonneville pursuant to its agreements with KEG, Avista andlor KEG
shall own and maintain all meters used to determine any billing associated wih the
delivery of electric power to the Point(s) of Delivery and Generating Project(s).
Avista meters shall be tested and inspected in accordance willl Avista's meter testing
program ('Avista Program") as filed with the Washington Utilities and Transportation
Commission and/or the ldaho 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 b be present al all times lhe
meters are being lested. Additionally, Avista shall test any or all such meters as may
reasonably be requested by KEG. Reasonable costrs 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 wrth the l€G melertesting
program ("KEG Program"). lf requested by Avista, KEC shall provide copies of
applicable test and calibration records and calculations. KEG shall permit a
representative of Avista b be present at all times the meters are being tested.
Additionally, KEC 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 lhe testing and inspection
of such meters in accordance with Bonnevills's applicable meter testing program
("Bonneville Program'). lf 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 Avrsfa b 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 Avisfa. Reasonable costs for such requested lest shall ba
82.
E filblt B - iieter Readlng and lletsr TeEt Procedurcs &l
paid by Avista unless any of the meters are found to be inaccurate, as defined
Bonneville Program, in which case Avista shall not be required to pay for he test.
AdiU$tments
Adjustments shal! be made ln meter readings and billings for erors in a meter reading or
billing discovered within twelve (12) months of the enor. Each Party shall permit
representatives of the other Party to inspect all of the re@rds, including any records
made available by Bonneville b KEC or Avistia, relating b he delivery of electdc power
to KEC, and the transmission of electric power by Avista b the Poinb of Delivery.
Eftlblt B - Metel Readlng and Bihler Test Proccduros *2
1.
2.
EXHIBITC
SUBSTATION CONSTRUGTION AND OWNERSHIP GUIDELINES
FOR SUBSTATIONS OWNED BYAVISTA (Points of Delivery under 69kV):
Avista shall be responsible to provide reclosers or other protection apparatus to protect
Avista's power transformers-
Avisia shall provide all equipment and materials (including voltage regulator by-pass
switches) b construct a feedEr position, except as noted below. This wil! ensure
compatibility with spare parts for installed equipment.
Voltage regulators shall be provided by KEG, but shall be installed by Avistra.
(a) Regulators are classified as a failure mode changeout llem 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.
lnsulation coordinated surge arresters shall b6 prOMded by KEG b proteci its voltage
regulators or underground cables.
Metering CTs shall be supplied by Avista.
Metering PTs shall be supplied by Avista and may be shared with KEG.
KEC shall provide the hardware and conductor tro connect trc the source at the Point(s) of
Delivery, including, but not limited to, tfie following:
(a) Hardwars for overhead line pUll-ofts/getaways (Avista will provide eye bolts on
distribution stuctures).
(b) Potheads and brackets for underground take-offslgetaways.
Underground conduits and vaults adjacent tc a substation shall be provided or approved
by Avista.
4.
5.
6.
7_
E hlbil c - Subatatlon Constucdon and Ownerthlp Guidelinss c-l
FOR SUBSTATIONS OWNED BY KEG (Points of Delivery at 69kV or above):
For the purpose of enabling Avista tc monitor the loads on its transmission system in real iime,
KEG shall provide either of tte Olloruing to Avista:
Megawatt and megavar indications for lotal sUbstation load from KEC's supervisory
control and data acquisition (SGADA) system, if aXsting, in a format agreed upon by the
Parties,
or
The following:
(a) Metedng CTs,
(b) Metering PTs,
(c) Space in KEC.s substation control house for an Avista remole termina! unit or
sudr other equipment that performs a comparable function (Avista Equipment"),
tc be supplied by Avista,
(d) Voltage and current indications fiom KEG's CTs and PTs b the Avista
Equipment. and
(e) Space for any conduit needed by Avisla for its communications out of he
substation,
Edrihl C - Subrtrtlon cons!ructlon and Oflnership Guldcllncr c-2
EXHIBJTD
GENERATING PROJECTS
1) Flghtlng Creek Landfill Generating Proiect
Locationi
Generator Rating:
Melprino:
Connected b KEC's Dower Substation distribution facilities near the
Fighting Creek Landfilt
Total rated output of 3.2 MVA
ln KEC's Fighting Creek Landfill Generating Proiec't, in the 24-9 kV
circuit overwhich electric potrer and energy flows
E drlblt D - Generaftng ProJeoils 0.1
EXHIBITE
GENERATION INTERCONNEGTION GUIDELINES AND STANDARDS
These Generator lnterconnection Guidelines and Standards shall apply, as appropriate
pursuant to lndustry Standards and Good Utility Practice, b generating profects connected b
Avista's electric system and b Generating Projects defined pursuant to Section 1.4 of this
Agreernent.
1, INTERCONNECTION REQUIREMENTS
1.1. All Generating Projecb shall be constructed and operated in accordancewith lndustry
Standards and Good Utility Practice.
1.2. A Generating Project shall not cause any reduction in the quality of service being
provided 1o otherAvista projects orcustomers. The Generating Project shall not
cause abnormal voltage magnifudes, frequencies, excessive interruptions, or
excessive harmonics. This shall include not injecting communications signals
associated with operation of fie Generating Project lnto Avista's electric system.
1.3. When the Generating Project b cnnnected to Avista's electric system the Generating
Project shall follow Avista's local system frequency which ls a nominal 60 hark.
1,4. Any voltage flicker caused fiom the operation of tre 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 lnfluence factor (TlF) ln the latest revision of ANSI standards
C50.12, C50.13, orC50.14, whichever ls 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 he Generating Project ls operating ln 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 lndustry
Standards and Good Utilfu Practice.
2. EQUIPMENT REQUIREMENTS
2.1- KEC ortheGenerating Projectshallsupply, lnstall, own, operate and maintain all
equipment at the Generating Project as appropriate and pursuant to applicable electric
codes, lndustry 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 b lnspection by Avista. Avista may also witness or review any
acceptance tests of Generaiing Project.
Exhlblt E - Generatlon Interconnec'tlon Guldellnes and Standards E-|
3. PROTECTION REQUIREMENTS
3.1. KEC or Generating Project shallfurnish, 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
parallelwith 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 b a distribution fgeder (rated output leSS than 25
kVA): The Generating Project must provide adeguate 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. gg_nerator connected to a distribution feqder (rated outout less than one
guartsr of the distribution feeder load): The Generating Projact must meet all
requirements of a small generator, plus the Generating Project relaying shall
include over/under voltage and over/underfrequency (islanding detection) and
synchronism check,
c. Large generator connected to. a digtribution feeder (rated output greater thal_ or
eoual to 3 MVA orone guarter 9.f 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 b 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 h 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.
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 systsm related to the Generating Project. Avista shall approve the
Generating Projecfs protection system prior to the Generating Project being operated
in parailel with the Avista system.
lf parallel operation of the Generating Projectto Avista's electric system requires
upgrades to Avista's protection system, the upgrades shall be atthe expense of KEC
unless provided for in another agreement, including, but not limited to, upgrades to
Avista's reclosing relaYing.
The Generating Project's protection system must be operatod, tested, and maintained
in accordance with lndustry Standards and Good Utility Practice and shall be at the
expense of KEC unless provided for in another agreement.
3.2.
3.3.
3.4.
Exhibil E - Gbneraflon lnhrconnecffon Guldellnes and Stendads
3.5. Each relay responsible for disconnecting tre Generating Project from the loca! power
system shall be connected to an appropriately installed GPS time source, with
accuracy betterthan 8 ms or some type of Sequence of Events recorder shall be rnade
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 msans or devices ftat 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 orautomatically 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 vollages,
frequencies, single phasing, etc. that would prevent acceptable synchronization.
COMMUNICATIONS
4.1. The Generating Projectshall maintain satisfactoryoperating 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.
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 expenss unless provided for in another agreement. to
gatheraccumulated and instantaneous data to be telemetered to the location(s)
designated byAvista through use of a dedicated point-to-point data circuit(s) orother
equivalent communication medium acceptable to the Parties as indicated in section
4.4 below. The communication protocol for the data circuit(s) shall be speo'fied by
Avista. lnstantaneous bi-directional analog real power and reactive power flow
information must be telemetered directly b the location(s) specified by Avista.
For generation that will require telemetering, KEC or he Generating Project shall
provide the dedicated data circuit(s) or other equivalent communication medium
acceptable to the Parties necessary trc provide the Generating Project's data b 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 rnaintained under, but not bs limited to, the
following events: system paralleling or separation, scheduled and unscheduled
shutdowns. equipment clearances, and hourly and daily load data.
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 b call in trouble
tickets. Each Party shall promptly advise the other Party if it detects or othenruise
leams of any metering, telemetry or communications equipment enors or malfunctions
4.2.
4.3.
tulblr E - ceneratton lnterconnectlon Guldetnes end Standards
that require the attention and/or corection by tha other Pafi. The Party owning such
equipment shall correct such srror or malfunc'tr'on as soon as reasonably feasible
unleSs provided for in another agreement.
5. MISCELLANEOUS REQUiREMENTS
5.1. Avista reserves the right b 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 wittr 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. Generato/s contribution to faults (saturation, subtransient, transient and
synchronous resistances and reactances and the associated time conslraints,
sequence impedance (positive, negative, zero), system resislance and reactance
from AMsta system b the Generating Project).
g. lnertia oonstants.
h. Estimated schedUle of operation and estimated annual kWh.
i. Governor and exciter conlrol system parameters.
5.3. Unless provided for in another agreement, KEC shall supply Avista with he 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 lmpedance, including XIR ratio or measured load loss Watts.
5.4. KEC shall require the installation and operation of a power system stabilizer ai the
Generating Project if required pursuant b lndustry Standards.
EGlb,lt E - Genoratlon lnterconnec'tlon Guldolln$ and Standards E-4
ExhibitG
Facilities fgt Integration agd Oneration gfFighting Creek Facility
Tran3ml3slon SoMc€s
Avlsta Corporatlonlatt E Mission Ar/€nue
Spokane. WA 99202
^#nsta
December 5,2011
Mr. Doug Elliott
General Manager
Kootenai Elecric Cooperative
P.O. Box278
Hayden, Idaho 83835-0278
SUBJECT: Facilities for Integration and Operation ofFighting Creek Facility
DearMr. Elliott:
This Irtter Agreement ("Agreement") sets flllh the scope ofwork and responsibilities ofAvista
Corporation (uAvista') and Kootenai Electric Cooperative, Inc. ("KEC"), hereinafter sometines
referred to collectively as "Parties" and individually as "Party," regarding the construction and
installation ofthe Parties' respcotivc 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,
PROJECT COORDINATION AND SCHEDULE
KEC and Avista shall coordinate all requirements for this project and consult with one
another regarding the duties tisted under this Agreement. TLe Parties intend to complete
construction and enable operation of the Facility by December 30, 2011. While neither
Party makes any express commifalgnl to meet such date to energize the facilities outlined
within, the Panies shall make good faith efforts to complete this project within the time
ftameidentified.
EFFECTIVE DATE
This Agreement shall be efkctive upon the date this Agreement is executed by both
Parties. This Agreement shall terminate upon receipt by Avista of all invoiced amormts
pursuant to Section V.
Lrtler Agrecnent - Fadlldcs for Integrrtion rod Operrdon ofFightingcrool Fsdlity
December 5, 20ll
Page 2 oR
NL AVISTA'S RESPONSIBILITIES AT KEC'S EXPENSE
Avista shall provide, at KECts expense, a relay to provide synch cheek 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 meteriug and data acquisition equipmentprovided 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 equipmentprovided by IeEC, and tebninate
the 4-wire communication circuit provided by KEC at Avista's Coeur d'Aleae Service
Center.
Avista shall, at KEC's expense, provide labor to revise relay settings on Avista's Post Falls
A-Zll circuit breaker on the Post Falls - Ramsey I 15 kV line to provide an altemate point
ofreceipt.
IV. KEC'S RESPONSIBILITiIIS AT KEC'S EXPENSE
KEC shall, at KEC's expetrse, acquire lights ofway and pelmitting for, construct and own
the new Facility. this constnrction 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 expsnse, provide and install a Jemstar revenue grade metor, 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 ofthis equipment and
the termination ofthe 4-wire circuit.
V. FINANCIAL TERMS AND CONDITIONS
The estimated cost ofthe work to be performed by Avista at KEC's expense, as identified
in Section III, is $65,000, includiug applicable overheads and taxes. Upon completion of
all work perfonned by Avista, Avista shall invoice KEC for the achral costs Avista
inculTed to complete such work, including applicable overheads and taxes.
frvoices from Avista shall reference this Agreement and shall be sent to the following
address:
Kootenai Electric Cooperative
Attention: ShawnDolan
Kootenai Electric Cooperative
P.O. Box 278
Hayden, Idaho 83835-0278
I*mer Agrcemmt - Fadffles for Intsgrrdon md Operrtion of llgltfug Cteclc Facllty
December5,20f I
Page3 ol3
Remittances from KEC shall be within the timeframe specified in the invoice and shall be
sentto the address named in the invoice.
Please indicate KEC's onCUlTre by executing the two originals of this Agreement where
indicated below. Please retain one original for your frles and return one Oliginal to Avista at the
address listed above. Should you have any questions regarding this Agreement, please do not
hesitate to contactme at (509) 4954851.
Respectfully,
)M..-qrd-
JeffSchlect
Senior Manager, Transmission Services
KOOTENAI ELECTRIC COOPERATNE, INC.
Concur:
Name:
Title:
Date:
A.f!0,"-
DougElliot
General Manager
Q-c.-^bcr 3. ?orr
AlflrwEsffi&'
November 19,2012
Kootenai Fl ectric Cooperative
Attn: DougElliot
2451W. DakotaAvs
P.O. Box 276
Hayden,ID 83835-0278
Re: Amendmcnt to thg Power Purchisc Agre0rhent BeHeen Kootenai Electric
Cooperative and Avista Corpoiation
DearMr. Elliot:
Kootenai Elecfiic Cooperativ,e,Inc. f'Sellet') anil Avista Corporation ("Avista"),
refcned to heroin individually as a "Part/' "nd colleotively as the ?arties," entered into ttrat
certain Power Purchase Agreement dated January 5,2012, f'Power Purchase Agreement') under
whictr Avista purchases enelgy from a 3.2 MW narneplate capacity electric power generating
facility fFacility) at the Kooteirai County Solid Waste !'acility nearBelgrove, Idaho. The
Power Purchasc Agreement was originally approved by the Idaho Public Utilities Commission
('Cornnrission) in Oder No. 32459 issucd in Docket No. AVU-E-12-01 on February 15,2012.
The Power Furchase Agrc.cment is due to oxpire by its terms on Deoemb er 3l , 2Ol2 . Avista
uderstands tluf Seller w0uld like to arhend the Power Purshase Agreement to extend the term,
I'hc Parties hereby agree to amend the Porver Purchaso Agreerneqt to extend the term
rhrough December 31 ,2013'. Accgrdingly, Section 4.1 ofthc Power Purchase dgrccmcnt is
arnended to change the expiration date of the Term :ftom December 31, 20l2to December 31,
2013. Except as cxpressly provided herein, all'other terms aud conditions Ofthe Power Purchase
Agreement remain in firll force and effect, inchidiug Seller's ddht in Seetion 4-1 to terminate t}e
Agreement with 30 days prior written noticc to Avista.
The Parties aguccthatthis Amendment wjll be congtued in accordance with Smtion 210 of
PURPA and other applicabte lararc and regulations. This Amendment $hall become finally effectivc
rrpon the Commission's apprirval of all terms and provisions hercin rviihout chenge or condition.and
dcclarrrtion that rill payments to be made to Sellerunder the Power Purohase Agreement, as amended,
shall be altorved as prudently incurred expenses for ratcmaking purposes. This Amendment to the
Power Purchase Agreernent shall, subject to such Commission apptoval, become,;ffcctile on
Janudry 1, 2013, or such other date set by Commission ordet Upoir the effcctive date of this
14ll Eagt Mission Avsoug
PO8ox3727
Spokane, Wr6hln$oo 9922o-glu
80022751tr.,
www.avtstsutll ltles.com
askavlata@svlstauti tities.oom
Ame,lrdmpnt, this Amendment shall be incorporated in the Power Purchase Agreement and all
rcferences to the Power Purchase Agrcement shall be deemed to be references to the Power
Purchasc Agreeraent as amended by this Amendment.
lf tlre torms set forth herein for the extensjpo Ofttre tem of the Power Purchase
Agreement are acceptablg please execute below and return an original executed copy of this
lettertome. PleasecallSteveSilkworth'at509495-S093ifyouhaveanyquestions.
Sincerelv.'- r'\ffi:S-[HN^'--f
Robertlallir.;J
Director,Powcr Supply
ACCEPTED AND AGREF,D TO:
tlq o.ul,* -
Name: b.\t*s A. Etl:os
Date: (J. o:rq,*t,<,- \Q, ?o te
Kootenai Electic Coopcrative