20130415Petition.pdf

Avista Corp. AWSTA
AM
1411 East Mission P.O. Box 3727
Spokane, Washington 99220-0500 - COIfL
Telephone [phone] j 9: 27 Toll Free 800-727-9170
DAHO
April 12, 2013 UTIUTIES CO?'
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
P0 Box 83720
Boise, ID 83720-0074 A V
RE: In In the Matter of the Joint Petition of Avista Corporation and Clearwater Paper Corporation
for Approval of an Electric Service Agreement.
Dear Ms. Jewell:
Enclosed for filing with the Commission is the original and seven (7) copies of Avista Corporation
and Clearwater Paper Corporation's Joint Petition and Request for Modified Procedure. Avista has
also included a CD with the files for your convenience.
Should you have any questions regarding this filing, please do not hesitate to call me at (509) 495-
8620. Thank you in advance for your assistance.
Sincerely,
Patrick Ehrbar
Manager, Rates & Tariffs
Enclosures
cc: Certificate of Service
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have this 12th day of April, 2013, served the foregoing Petition
upon the following parties, by mailing a copy thereof, properly addressed with postage prepaid
to:
Jean D Jewell, Secretary
Idaho Public Utilities Commission
Statehouse
Boise, ID 83720-5983
Jean. iewe!hDuc.idaho. izov
Peter J. Richardson
Richardson & O'Leary PLLC
515 N. 27th Street
P0 Box 7218
Boise, ID 83702
peter(à)richardsonandoleary corn
Mary Lewallen
Clearwater Paper
601 W. Riverside Avenue
Suite 1100
Spokane, WA 99201
mary !ewa11en()c1earwaterpaper corn
A)
- Patrick Ebrbar
Manager, Rates & Tariffs
David J. Meyer, Esq.
Vice President and Chief Counsel for
Regulatory and Governmental Affairs
Avista Corporation
1411 E. Mission Avenue
P.O. Box 3727
Spokane, Washington 99220
Phone: [phone]
Attorney for Avista Corporation
Michael S. Gadd
Senior Vice President & General Counsel
Clearwater Paper Corporation
601 W. Riverside Ave., Suite 1100
Spokane, Washington 99201
Phone: [phone]
70 I3APR 15 AM 9:27
WI 11L3 COMM1SSiO
Peter Richardson
Richardson & O'Leary, PLLC
505 N. 27th Street
P. 0. Box 7218
Boise, Idaho 83702
Phone: [phone]
Attorneys for Clearwater Paper Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT
PETITION OF AVISTA CORPORATION
AND CLEARWATER PAPER
CORPORATION FOR APPROVAL OF
AN ELECTRIC SERVICE AGREEMENT
CASE No. AVU-E-13-2-
JOINT PETITION AND
REQUEST FOR MODIFIED
PROCEDURE
Avista Corporation ("Avista") and Clearwater Paper Corporation ("Clearwater")
(Avista and Clearwater are referred to collectively as the "Parties") hereby petition the Idaho
Public Utilities Commission ("Commission" or "IPUC") for an order approving the "Electric
Service Agreement" between Avista Corporation and Clearwater Paper Corporation. The
Electric Service Agreement ("Agreement") is dated April 11, 2013 and is attached as Exhibit
1. The Agreement also includes as "Exhibit A" a new Large Generator Interconnection
Agreement ("LGIA"). Petitioners request that this Petition be processed under Modified
Procedure (IDAPA 31.01.01.201 through .204).
JOINT PETITION OF AVISTA AND CLEARWATER PAPER -1
In support of this Petition, the Parties state as follows:
1.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 principally engaged in the business of providing electric and natural gas service in the
states of Idaho and Washington, as well as natural gas service in the state of Oregon.
2.Clearwater is a corporation that, among other things, operates a paper
manufacturing facility located in Nez Perce County, Idaho (hereinafter referred to as the
"Facility").
3.Clearwater owns and operates a generation system at the Facility that is
capable of generating approximately 132.2 megawatts of energy (the "Generation"). These
generators are Qualifying Facilities ("QF") pursuant to the Public Utility Regulatory Policies
Act of 1978 and 18 C.F.R. Part 292.
CURRENT AGREEMENT BETWEEN CLEARWATER AND AVISTA
4.Avista has provided electric service to the Facility for many years. Beginning
on January 1, 1992, Avista purchased the Generation output from the Facility, while
providing electric service to the Facility, pursuant to an Electric Service and Purchase
Agreement. The Commission approved the 1992 Agreement in IPUC Case No. WWP-E-91-
5, Order No. 23858 on August 16, 1991.
5.Beginning on July 1, 2003, through a new 10-year agreement, Avista
purchases the Generation output, and provides electric service to the Facility, pursuant to a
Power Purchase and Sale Agreement ("2003 Agreement"). The Commission approved the
2003 Agreement in IPUC Case No. AVLJ-E-03-07, Order No. 29418, on January 15, 2004.
JOINT PETITION OF AVISTA AND CLEARWATER PAPER -2
6. Under the terms of the 2003 Agreement, which is still in effect, Avista sells to
Clearwater all of its required energy and capacity at Schedule 25P rates. Those rates change
from time to time as approved by the Commission. Avista is the sole purchaser of
Clearwater's Generation at a price of $42.92 per MWh up to a maximum base generation
amount of 543,120 MWhs.
7.All power purchase costs paid by Avista to Clearwater under the 2003
Agreement are directly assigned to Avista's Idaho operations.
8.Differences between the Clearwater power purchase expense, and a certain
amount of Clearwater retail revenue based on kWh sales equivalent to the level of Clearwater
generation, versus that included in authorized level of power supply expense, are tracked at
100% through the Power Cost Adjustment mechanism ("PCA") per Order No. 29418.
9.The 2003 Agreement has an expiration date of June 30, 2013 and contains no
provisions regarding rates, terms or conditions for service after this expiration date.
2013 AGREEMENT BETWEEN CLEARWATER AND AVISTA
10.The Parties have met on a number of occasions to negotiate a successor
agreement. Through the give-and-take of negotiation, the Parties have reached agreement on
a new Agreement that produces an "end result" that the Parties believe is just and reasonable,
and in the public interest. The Agreement provides for the sale of energy to serve
Clearwater's load at the Facility, and addresses Clearwater's generation. In summary, the
essential terms of the Agreement are as follows:
(a) The Agreement is for a five-year term, beginning July 1, 2013 and
ending on June 30, 2018. The Agreement will continue after the initial term from year to
JOINT PETITION OF AVISTA AND CLEARWATER PAPER -3
year unless either Party elects to terminate it with 90 day's prior written notice to the other
Party.
(b)The Agreement is conditioned upon approval by this Commission of
the Agreement as a settlement of all known existing disputes between the Parties, without
precedential value and without prejudice to the Parties' positions on similar issues in the
future.
(c)Clearwater' s Generation shall be metered, consistent with Paragraphs
4(B)(ii) and 5 of Schedule 63 of Avista's Idaho Tariff, such that Clearwater shall use the
Generation to serve its load at the Facility.
(d)Clearwater shall purchase and receive from Avista all of the electric
power requirements at the Facility that exceeds the electric power generated by Clearwater' s
Generation. Avista will continue to serve Clearwater's additional power requirements under
Avista's "Extra Large General Service To Clearwater Paper's Facility" Schedule 25P rates,
including all applicable rate adjustments, unless the Commission issues an order in the future
authorizing different billing rates.
(e)The Parties agree that, starting on the Effective Date of the Agreement,
all energy (kWh) consumption under the terms of this Agreement will be billed at Schedule
25P rates. Through negotiation, the Parties have agreed that, for purposes of capacity/demand
('WA"), all kVA billed above 55,000 kVA ("2 w' Demand Block") will be billed at an initial
rate of $2.00 per kVA. The first 3,000 kVA will continue to be covered under a monthly flat
rate (currently $12,500 per month), and the next 52,000 kVA (1st Demand Block") will be
billed at the current volumetric demand rate (currently $4.50 per WA). Clearwater
understands that demand and energy rates may change from time to time during the term of
JOINT PETITION OF AVISTA AND CLEARWATER PAPER -4
the Agreement as approved by the Commission. Exhibit B to the Agreement is the draft
form of Schedule 25P that would be filed with the Commission prior to the Effective Date of
the Agreement.
(f)To the extent that Clearwater generates electric power in excess of the
electric power requirements of the Facility, Clearwater will be credited for the excess kWhs
generated during the billing period in a manner consistent with Paragraphs 4(B)(ii) and 5 of
Schedule 63 of Avista's Idaho Tariff.
(g)If, during the Term of this Agreement, Clearwater desires to sell the
output of the Generation to any third party, Clearwater shall terminate the Agreement by
providing Avista written notice of termination at least 90 days prior to such termination.
The sale to a third party would not commence until the date on which the Agreement is
terminated. Further, the Clearwater would be responsible for making all necessary
arrangements to facilitate the sale of the output of the Generation to any third party. Finally,
the 2nd Demand Block would no longer be applicable, and all kVA above 3,000 would be
billed at the 1St Demand Block rate.
(h)All other negotiated terms and agreements are contained with the
Agreement, including a new LGIA which was executed concurrent with the execution of the
Agreement.
11. Under the existing Purchase and Sale Agreement between Avista and
Clearwater, any monthly difference between the actual Clearwater power purchase expense
and the amount embedded in the development of base retail rates in a general rate case is
tracked at 100% through the PCA, per IPUC Order No. 29418. In addition, any change in a
JOINT PETITION OF AVISTA AND CLEARWATER PAPER -5
certain amount of Clearwater retail revenue, based on kilowatt-hour sales equivalent to the
level of Clearwater generation, is also tracked at 100%.
12. The Parties propose that the change in revenues and expenses associated with
the new service agreement with Clearwater, as compared with the revenues and expenses
included in the last rate case for Clearwater, be tracked through the PCA at 100%, similar to
the accounting treatment for the current Purchase and Sale Agreement.
WHEREFORE, Avista and Clearwater respectfully request that the Commission
issue an order approving the Agreement, and its attached LGIA, including the following
provisions:
(1)approving the Agreement as a settlement of all known existing disputes
between the Parties without precedential value and without prejudice to the Parties' positions
on similar issues in the future;
(2)approve accounting treatment similar to that currently being used for the
existing Clearwater Agreement, such that any change in revenue and expenses associated
with the new service agreement with Clearwater, as compared with the revenues and
expenses included in the last rate case for Clearwater, would be tracked through the PCA at
100%;
(3)that Avista is directed to file a revised Schedule 25P, substantially in the form
of that included in Exhibit B to the Electric Service Agreement, in compliance with the
Commission's order approving this Joint Petition to effectuate the terms of the Electric
Service Agreement; and
(4)that this Joint Petition be processed under the rules providing for Modified
Procedure.
JOINT PETITION OF AVISTA AND CLEARWATER PAPER -6
DATED this 10 day of April 2013,
Clearwater Paper Corporation
Signature:
Name: tV\) TIQ "MSQ
Date: q t2(t)
Avista Corporation
Signature: TT7/7
Name: t
Date: i/io /13
I
JOINT PETITION OF AVISTA AND CLEARWATER PAPER -7
ELECTRIC SERVICE AGREEMENT
Special Agreement Pursuant to Rule 6 and Schedule 25P
This Electric Service Agreement ("Agreement") is entered into effective April 11, 2013 (the
"Execution Date") between Avista Corporation ("Avista") and Clearwater Paper Corporation
("Clearwater" or "Customer") (individually, a "Party" and collectively, the "Parties").
RECITALS
WHEREAS, Avista currently provides electric service to a certain paper manufacturing facility (the
"Facility") located in Nez Perce County, Idaho, which is owned and operated by Customer;
WHEREAS, Customer also owns four thermal electric generating units located at the Facility with a
combined total nameplate capacity of 132.2 WA (the "Generation");
WHEREAS, as of the Effective Date, Customer is operating two of the four generating units and
reserves the right to operate a maximum of all four generating units subject to this Agreement;
WHEREAS, Customer currently sells, and Avista currently purchases, the output of the Generation
pursuant to a power purchase agreement ("PURPA PPA") under the Public Utility Regulatory Policy Act of
1978 ("PURPA") originally dated July 22, 2003, as amended, which will expire by its terms on June 30,
2013;
WHEREAS, upon expiration of the PURPA PPA, Customer intends, pursuant to the terms of this
Agreement, to use the Generation to generate into its own load at the Facility;
WHEREAS, due to the capacity of the Generation, Schedule 63 of Avista's Idaho Tariff (Net
Metering) does not apply in this circumstance, therefore, because of the large volume associated with the
Generation, a special agreement pursuant to Rule 6 of Avista's Idaho Tariff is necessary in order to allow
Customer to use the Generation to serve its own load at the Facility in a manner consistent with the
principles, terms and conditions of Schedule 63 of Avista's Idaho Tariff;
WHEREAS, pursuant to the terms of this Agreement and Schedule 25P of Avista's Idaho Tariff
("Schedule 25P"), the Generation shall be treated in a manner consistent with Schedule 63 of Avista's Idaho
Tariff such that Customer will: (i) use the Generation to serve its own load at the Facility, (ii) purchase from
Avista any electric power in addition to the output of the Generation that may be necessary for the Facility
pursuant to Schedule 25P, and (iii) to the extent the Generation generates electric power in excess of
Customer's own load at the Facility, be credited for the excess kilowatt-hours ("kWh") generated by the
Generation during a billing period;
WHEREAS, concurrent with the execution of this Agreement, the Parties intend to execute a Large
Generator Interconnection Agreement (the "LGIA"); and
WHEREAS, Avista will deliver electric power to the Customer for use at Customer's Facility subject
to the terms of this Agreement.
NOW THEREFORE, in exchange for the mutual promises set forth in this Agreement and other
good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the Parties
agree as follow:
1. Sale and Delivery of Electric Power and Energy. Customer shall use the Generation to serve its load at
the Facility. Customer shall purchase and receive from Avista all of the electric power requirements at
Contract No. M-16950
Page 1 of
73465312.3 0034271-00030
the Facility that exceed the electric power generated by Customer's Generation. To the extent that the
Generation generates electric- power in excess of the electric power requirements of the Facility ("Excess
Energy"), Customer shall be credited for the excess kWhs generated during the billing period in a
manner consistent with Paragraphs 4(B)(ii) and 5 of Schedule 63 of Avista's Idaho Tariff. If, during the
Term of this Agreement, Customer desires to sell the output of the Generation to any third party,
Customer shall terminate this Agreement by providing Avista written notice of termination at least 90
days prior to such termination. The sale to the third party shall not commence until the date on which
this Agreement is terminated. In the event that Customer desires to sell the output of the Generation to
any third party(ies), Customer shall be responsible for making all necessary arrangements to facilitate the
sale of the output of the Generation to such third party(ies).
2.Term of Agreement. This Agreement shall become effective on July 1, 2013 ("Effective Date"), subject
to approval by the Idaho Public Utilities Commission ("Commission"), and shall remain in effect for a
term of five years (through and including June 30, 2018), unless terminated earlier by Customer for the
limited purpose specified in Section 1. Avista shall file this Agreement with the Commission for
approval promptly after the Execution Date and shall thereafter seek Commission approval of this
Agreement. After the initial term, this Agreement shall continue in effect from year to year unless either
Party elects at any time to terminate this Agreement by giving 90 days' prior written notice to the other
Party.
3.Delivery Point.
3.1 The "Delivery Point" is the "Point of Change of Ownership" as defined in the LGIA and described
in Appendix A of the LGIA.
3.2 The LGIA is attached as Exhibit A.
4.Metering Equipment. Electric power delivered by Avista to the Facility, together with any Excess
Energy, shall be measured using metering equipment in accordance with Article 7 (Metering) and Article
8 (Communications) of the LGIA. Customer is responsible for protecting metering equipment from
damages including, but not limited to, vandalism, vehicle traffic, water, snow and/or ice, but excluding
any damages caused by Avista's intentional or negligent act or omission. Each Party shall have the
rights provided to it under Article 7 (Metering) of the LGIA.
5.Service.
5.1 Service Characteristics. Electric power delivered to the Delivery Point will be three phase,
approximately 60 Hertz alternating current and delivered in an amount not to exceed 110,000 kVa.
5.2 Added Load. Customer must notify Avista in advance of the addition of any electric load that
would exceed the rated capacity of any electrical facilities provided by Avista at the Facility to
provide electric service under this Agreement. In the event Customer exceeds the nominal demand
stated in Section 5.1 above, Customer will be liable for all losses and damage to Avista's equipment
and other electrical facilities resulting from Customer's excess usage.
5.3 Changes in Generation. Customer shall notify Avista in advance of any startups or planned
shutdowns, including any planned outages for maintenance, of Customer's Generation. To the
extent practical, Customer shall notify Avista of any expected changes in Generation on at least a
five (5) day-ahead basis.
5.4 Notices. All notices required by this Section 5 must be provided by contacting Avista by telephone
at 509.495.4911 or by email at #corppreschedule(avistacori,.com.
6.Applicable Rates. Rules and Regulations.
6.1 Electric power shall be supplied, received and paid for under this Agreement in accordance with and
subject to the orders of the Commission and Avista's Rates, Rules and Regulations on file with the
Commission and in effect at the time electric power is delivered, including Schedule 25P and all
other applicable rate schedules set forth in that Schedule.
Contract No. M-16950
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73465312.3 0034271-00030
6.2 The Demand charges under Schedule 25P, effective July 1, 2013, are as follows
$12,500.00 for the first 3,000 kVA of demand or less.
1st Demand Block: $4.50 per kVA for each additional kVA of demand up to 55,000 kVA.
2nd Demand Block: $2.00 per kVA for each additional kVA of demand above 55,000 WA.
The Energy charge under Schedule 25P, effective July 1, 2013, shall be that approved by the
Commission in Case No. AVU-E-12-08. The Customer understands that such Demand and Energy
rates may change from time to time, as approved by the Commission.
6.3 The Parties anticipate that Avista will, prior to the Effective Date of this Agreement, file a revised
Schedule 25P with the Commission substantially in the form of Exhibit B. Customer acknowledges
that under the proposed revised Schedule 25P, the demand rate for all kVA above 55,000 is based
upon the terms and conditions of this Agreement. The Parties agree that Clearwater's load under
Schedule 25P will increase during planned outages of the Generation, intermittent outages of the
Generation, and variations in Clearwater' s Facility load. If, however, Customer desires to sell any
of its electric output to any third party, thereby increasing the amount of retail electricity that the
Customer's Facility takes from Avista, Customer shall terminate this Agreement pursuant to
Section 1 above, and, effective upon such termination, the second demand block described in
Section 6.2 shall no longer be applicable, and all demand would be billed at the first block rate (i.e.,
the rate per kVA charged for each kVA from 3001 kVA to 55,000 WA). The pricing and other
terms and conditions of a succeeding service agreement to become effective upon such termination
shall be negotiated in good faith between Avista and Customer, subject to approval of the
Commission.
7. Rate Schedule Changes. In the event Avista has in effect other filed rate schedule(s) in the State of Idaho
applicable to the same class of service and for the same terms expressed in this Agreement, Customer
may elect to have such rate schedule substituted for the rate schedule applicable under this Agreement;
provided, however, that any such rate schedule change may not be made more often than once in any
consecutive 12-month period.
Payments.
8.1 Monthly Payments. Each month, Avista will bill Customer for electric power delivered to the
Facility during the preceding month as measured by Avista's meter(s). In the event that the
Generation generates electric power in excess of the electric power requirements of the Facility and
such excess electric power is delivered to Avista's electrical system, Customer's monthly bill shall,
consistent with Paragraphs 4(B)(ii) and 5 of Schedule 63 of Avista' s Idaho Tariff, include a credit
for the excess kWhs generated by the Generation. Customer's monthly bills will be: (i) computed
using the applicable rates described above in Section 6, and (ii) mailed to the address set forth
below in Section 13.2.
8.2 Late Charges. Customer shall pay to Avista the sum billed within 30 days following the mailing
date of such bill (the "Due Date"). If Customer fails to pay the entire amount of any undisputed bill
by the Due Date, Avista will have the right to assess a late charge on the unpaid balance from the
Due Date until paid in full, at a rate of one percent per month.
8.3 Reactive and Voltage Support. Payment to Customer for reactive power or voltage support shall be
governed by Section 9.6.3 of the LGIA.
9. Easements and Access to Customer's Property.
9.1 Customer authorizes Avista (or its agent) to do all work necessary on Customer's property to
accomplish the installation, operation, and maintenance of Avista's electrical facilities required to
provide electric service under this Agreement. Customer has granted, without cost to Avista, good
and sufficient recordable easements over, on, across and/or under Customer's property covering
rights-of-way for such installation, operation and maintenance.
Contract No. M-16950
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73465312.3 0034271-00030
9.2 Customer shall ensure that a minimum clearance of not less than 10 feet (or greater if required by
any applicable rules or regulations) is maintained around all Avista electrical facilities on
Customer's property to allow access for Avista's equipment, to enable Avista to perform any
necessary maintenance and repair, and to avoid any potential damage to such equipment.
10.Environmental Attributes.
10.1 For purposes of this Agreement, "Environmental Attribute" means any and all certificates, credits,
benefits, emissions reductions, environmental air quality credits and emissions reduction credits,
offsets, allowances and liabilities, howsoever entitled, resulting from the emission, or the avoidance
of any emission of, any gas, chemical, or other substance attributable to the Generation or the
generation of energy by the Generation, and the delivery of such energy, and include without
limitation, any of the same arising out of any current or future legislation or regulation concerned
with oxides of nitrogen, sulfur, or carbon, with particulate matter, soot, or mercury, or
implementing the United Nations Framework Convention on Climate Change ("UNFCCC") or the
Kyoto Protocol to the UNFCCC or crediting "early action" with a view thereto, or laws or
regulations involving or administered by the Clean Air Markets Division of the Environmental
Protection Agency or successor administrator (collectively with any state or federal entity given
jurisdiction over a program involving transferability of Environmental Attributes, the "CAMD"),
but specifically excluding investment tax credits, production tax credits, and cash grants associated
with the construction or operation of the Generation. Environmental Attributes also include the
reporting rights or Renewable Energy Certificates ("RECs") associated with these Environmental
Attributes. Environmental Attributes do not include any energy, capacity, reliability or other power
attributes from the Generation.
10.2 For the Term of this Agreement, all Environmental Attributes generated by or associated with
Customer's Generation are retained by Customer.
10.3 Nothing herein allocates from Customer to Avista any of Customer's obligations to comply with
any present or future law or regulation respecting the reporting or other compliance concerning
emissions and/or Environmental Attributes generated by or associated with the Generation or its
generation. Customer shall be solely responsible for its own management, use, or other disposition
of any and all Environmental Attributes, including but not limited to establishment and maintenance
of a Western Renewable Energy Generation Information System ("WREGIS") account or such
other mechanism as may be necessary for the transfer of RECs. At Customer's request and
direction and at no additional cost to Customer, Avista may from time to time assist Customer in
transferring RECs to third parties by, for example, (a) uploading RECs to Customer's WREGIS
account and transferring RECs from Customer's WREGIS account to third parties and (b) providing
to Customer any qualified reporting entity (QRE) services required by WREGIS; provided,
however, that Customer shall remain solely responsible for the marketing and disposition of its
Environmental Attributes and Customer shall release, defend, indemnify and hold harmless Avista
and Avista's directors, officers, agents, and representatives from and against any and all third party
claims, demands, causes of actions, judgments, liabilities and any associated costs and expenses
(including reasonable attorney's fees) arising out of or in any way connected with Avista's
assistance of Customer under this Section, except to the extent caused by Avista's gross negligence
or intentional malfeasance.
11.Indemnification.
11.1 To the fullest extent permitted by applicable law, Customer shall defend, indemnify and save
harmless Avista from any claim (whether valid or invalid), liability, loss, expense (including
reasonable attorney fees) or damage (collectively, a "Loss") arising from or growing out of injury to
persons, including death or damage to property, which may occur on Customer's electric system on
its side of the Delivery Point. Where such claim or loss is caused by the concurrent negligence of
Customer, its agents or employees, and Avista, its agents or employees, Customer shall indemnify,
defend and save Avista harmless from all such Loss to the extent that such Loss was caused by the
Contract No. M-16950
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73465312.3 0034271-00030
j
Revised Section 11.2 on April 29,2013 Approved by Cwaer/.— Approved by Avista M itt'
negligence of Customer, its agents or employees and in such amounts as attributable to damage
caused by Customer, its agents or employees.
112 To the follest extent permitted by applicable law, Avista shall defend, indemnify and save harmless
Customer from any Loss arising from or growing out of hijuiy to persons, including death, or
damage to property, which may occur on Avista's electric system on its side of the Delivery Point
Where such claim or loss is caused by the concurrent negligence of Avista, its agents or employees,
and Customer, its agents or employees, Avista shall indemnify, defend and save harmless Customer
from all such Loss to the extent that such Loss was caused by the negligence of Avista, its agents or
employees and in such amounts as attributable to damage caused by Avista,, its agents or
employees.
11.3Except (i) for claims or losses arising from a Party's gross negligence, willful misconduct,
intentional misconduct or fraud, (ii) to the extent covered by insurance required to be carried by a
Party under this Agreement, or (iii) to the extent that such damages are suffered by a third party and
included in a Loss for which one Party is required to indemnify the other under this Agreement,
neither Party shall be lible for any special, indirect, punitive or consequential damages arising from
the construction, installation, repair, maintenance or operation of the electrical facilities including,
without limitation, the other Party's loss of actual or anticipated profits (other than loss of actual or
anticipated profits included as an element of direct damages), loss because of shutdown, non-
operation, increased expense of its facilities or operations, or cost of capital
11.4 This Section shall not (i) negate, abridge, or otherwise reduce any right or obligation of indemnity
that otherwise exists, (ii) limit the amount or type of damages, compensation or benefits payable by
or for Avista or any of its subcontractors or suppliers under workers' compensation acts, disability
benefit acts, or other employee benefit acts, or (iii) limit the amount or type of insurance coverage
required by this Agreement
11.5 Each Party's obligations under this Section 11 shall survive the termination of this Agreement
12 Assignment. This Agreement may be assigned by either Party only with the wLflLvn consent of the
other; provided that either Party may assign this Agreement without the consent of the other Party to any
Affiliate of the assigning Party to a purchaser of substantially all the assets of the assigning Party. Any
attempted assignment that violates this Section 12 is void and ineffective. A Party's consent to
assignment shall not be unreasonably withheld, conditioned or delayed. If this Agreement is assigned in
compliance with this Section 12 and the assignee expressly assumes and agrees to be bound by this
Agreement, the assigning Party shall, effective upon such assignment, be released from this Agreement
13. Notices. Except as provided for in Section 5, all notices, demands requests and other communications
under this Agreement must be in writing and sent by mail (postage prepaid), or delivered to the other
Party either electronically or by a recognized commercial courier, addressed as set forth below. Such
notices, demands, requests and other communications will be deemed given as of the date delivered, or if
sent electronically or by mail, upon receipt.
13.1 ToAvistL
Avista Corporation
1411 E. Mission Ave;PO Box 3727
Spokane, WA 99220-3727
Attn: Director, Energy Solutions
13.2 To Customer.
Clearwater Paper Corporation
601 W. Riverside Avenue, Suite 1100
Spokane, WA 99201
Attn: Senior Vice President and General Counsel
13.3 Either Party may change its address by providing written notice to the other as set forth above.
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734653123 0034271-00030
14.Governing Law and Venue. This Agreement will be interpreted in accordance with the laws of the State
of Idaho, excluding any choice of law rules which direct the application of laws of another jurisdiction.
Any litigation relating to this Agreement not within the jurisdiction of the Commission shall be brought
in the United States District Court for the District of Idaho.
15.Entire Agreement; Amendment and Waiver. Attached Exhibits A and B are incorporated into this
Agreement by this reference. This Agreement, as well as applicable sections of Avista's Idaho Tariff on
file with the Commission, as may be amended from time to time, represents the entire understanding and
agreement between the Parties with respect to the subject matter of this Agreement. The Parties may
amend or modify this Agreement only by a written instrument executed by the Parties. If at any time the
terms of this Agreement are not strictly adhered to or enforced, such requirements shall not be deemed
waived or modified but shall, at all subsequent times and dates, be deemed in full force and effect.
16.Survival. Any provisions of this Agreement that may be reasonably interpreted as surviving the
completion, termination or cancellation of this Agreement shall survive such completion, termination or
cancellation.
17.Headings. Section headings in this Agreement are for convenience only and will not be considered part
of, or used in the interpretation of this Agreement.
18.Confidentiality. While this Agreement is in effect and for a period of three (3) years after this
Agreement expires or is terminated, information identified as confidential and exchanged by the Parties
under this Agreement shall be subject to and governed by Article 22 (Confidentiality) of the LGIA.
19.Remedies. If a Party defaults in its performance of this Agreement, the non-defaulting Party may so
notify the defaulting Party. If the defaulting Party does not cure the default within thirty (30) days (ten
(10) days in the case of a payment default), the non-defaulting Party shall have the right to pursue all
available remedies at law or in equity against the defaulting Party, subject to the limits set forth in
Section 11.3. Before the thirty (30) day cure period expires, the non-defaulting Party shall also have the
right to seek injunctive or other relief reasonably required to preserve the status quo or avoid irreparable
harm.
This Agreement has been executed by each Party's authorized representative on the date(s) set forth below,
effective as of the Effective Date.
Avista/orDorati
(Sign1ture)
lXt..cLw, 1LAA1 LU
(Printed Name)
ROWT Pcvri* Onxn ',
(Title)
9jtj 3
(Date Sign d)
Clearwater Paver Corporation
(Signature Do( Vl)ftA
(Printed Name)
cvr. Orck
(Title)
144
(Date Signed)
Contract No. M-16950
Page 6 of 6
73465312.3 0034271-00030
Exhibit A
Avista Contract No. AV-TR1 3-0325
LARGE GENERATOR
INTERCONNECTION AGREEMENT
BETWEEN
CLEARWATER PAPER CORPORATION
AND
AVISTA CORPORATION
TABLE OF CONTENTS
Recitals
Article 1. Definitions
Article 2. Effective Date, Term, and Termination
2.1 Effective Date
2.2 Term of Agreement
2.3 Termination Procedures
2.3.1 Written Notice
2.3.2 Default
2.4 Termination Costs
2.5 Disconnection
2.6 Survival
Article 3. Regulatory Filings
3.1 Filing

Article 4. Scope of Service

4.1 Interconnection Product Options
4.1.1 Energy Resource Interconnection Service
4.1.1.1 The Product
4.1.1.2 Transmission Delivery Service Implications
4.1.2 Network Resource Interconnection Service
4.1.2.1 The Product
4.1.2.2 Transmission Delivery Service Implications

4.2 Provision of Service

4.3 Performance Standards

4.4 No Transmission Delivery Service

4.5 Interconnection Customer Provided Services

Article 5. Interconnection Facilities Engineering, Procurement, and Construction

5.1 Construction of Interconnection Facilities

5.2 This Section Intentionally Left Blank

5.3 This Section Intentionally Left Blank

5.4 Power System Stabilizers

5.5 This Section Intentionally Left Blank

5.6 This Section Intentionally Left Blank

5.7 This Section Intentionally Left Blank

5.8 This Section Intentionally Left Blank
5.9 This Section Intentionally Left Blank
5.10 Interconnection Customer's Interconnection Facilities ("ICIF")
Page 1 of 75
5.11 Transmission Provider's Interconnection Facilities
5.12 Access Rights
5.13 This Section Intentionally Left Blank
5.14 Permits
5.15 This Section Intentionally Left Blank
5.16 This Section Intentionally Left Blank
5.17 This Section Intentionally Left Blank
5.18 This Section Intentionally Left Blank
5.19 Modification
5.19.1 General
5.19.2 Standards
5.19.3 Modification Costs

Article 6. Testing and Inspection

6.1 This Section Intentionally Left Blank

6.2 Post-Commercial Operation Date Testing and Modifications

6.3 Right to Observe Testing

6.4 Right to Inspect
Article 7. Metering
7.1 General
7.2 Check Meters
7.3 Standards
7.4 Testing of Metering Equipment
7.5 Metering Data
7.6 Modification to Metering or Communications

Article 8. Communications

8.1 Interconnection Customer Obligations

8.2 Remote Terminal Unit
8.3 No Annexation
Article 9. Operations
9.1 General
9.2 Control Area Notification
9.3 Transmission Provider Obligations
9.4 Interconnection Customer Obligations
9.5 Start-Up and Synchronization
9.6 Reactive Power
9.6.1 Power Factor Design Criteria
9.6.2 Voltage Schedules
9.6.2.1 Governors and Regulators
9.6.3 Payment for Reactive Power
9.7 Outages and Interruptions
9.7.1 Outages
Page 2 of 75

9.7.1.1 Outage Authority and Coordination

9.7.1.2 Outage Schedules

9.7.1.3 Outage Restoration
9.7.2 Interruption of Service
9.7.3 Under-Frequency and Over Frequency Conditions
9.7.4 System Protection and Other Control Requirements

9.7.4.1 System Protection Facilities
9.7.5 Requirements for Protection
9.7.6 Power Quality

9.8 Switching and Tagging Rules

99 Use of Interconnection Facilities by Third Parties
9.9.1 Purpose of Interconnection Facilities
9.9.2 Third Party Users
9.10 Disturbance Analysis Data Exchange
Article 10. Maintenance
10.1 Transmission Provider Obligation
10.2 Interconnection Customer Obligations
10.3 Coordination
10.4 Secondary Systems
10.5 Operating and Maintenance Expenses
Article 11. Performance Obligation
11.1 Interconnection Customer Interconnection Facilities
11.2 Transmission Provider's Interconnection Facilities
11.3 Interconnection Customer Compensation
11.3.1 Interconnection Customer Compensation for Actions During
Emergency Condition

Article 12. Invoice
12.1 General
12.2 This Section Intentionally Left Blank
12.3 Payment
12.4 Disputes
Article 13. Emergencies
13.1 Definition
13.2 Obligations
13.3 Notice
13.4 Immediate Action
13.5 Transmission Provider Authority
13.5.1 General
13.5.2 Reduction and Disconnection
13.6 Interconnection Customer Authority
13.7 Limited Liability
Page 3 of 75
Article 14. Regulatory Requirements and Governing Law
14.1 Regulatory Requirements
14.2 Governing Law
Article 15. •Notices
15.1 General
15.2 Billings and Payments
15.3 Alternative Forms of Notice
15.4 Operations and Maintenance Notice
Article 16. Force Majeure
Article 17. Default
17.1 Default
17.1.1 General
17.1.2 Right to Terminate
Article 18. Indemnity, Consequential Damages and Insurance
18.1 Indemnity
18.1.1 Indemnified Person
18.1.2 Indcmnifying Party
18.1.3 Indemnity Procedures
18.2 Consequential Damages
18.3 Insurance
Article 19. Assignment
Article 20. Severability
Article 21. Comparability
Article 22. Confidentiality
22.1 Confidentiality
22.1.1 Term
22.1.2 Scope
22.1.3 Release of Confidential Information
22.1.4 Rights
22.1.5 No Warranties
22.1.6 Standard of Care
22.1.7 Order of Disclosure
22.1.8 Termination of Agreement
22.1.9 Remedies
22.1.10 Disclosure to FERC, its Staff, or a State
Article 23. Environmental Releases
Page 4 of 75
Article 24. Information Requirements
24.1 Information Acquisition
24.2 Information Submission by Transmission Provider
24.3 Information Submission by Interconnection Customer
24.4 Information Supplementation
Article 25. Information Access and Audit Rights
25.1 Information Access
25.2 Reporting to Non-Force Majeure Events
25.3 Audit Rights
25.4 Audit Rights Periods
25.4.1 Audit Rights Period for Construction-Related Accounts and Records
25.4.2 Audit Rights Period for All Other Accounts and Records
25.5 Audit Results
Article 26. Subcontractors
26.1 General
26.2 Responsibility of Principal
26.3 No Limitation by Insurance
Article 27. Disputes
27.1 Submission
27.2 External Arbitration Procedures
27.3 Arbitration Decision
27.4 Costs
Article 28. Representations, Warranties and Covenants
28.1 General
28.1.1 Good Standing
28.1.2 Authority
28.1.3 No Conflict
28.1.4 Consent and Approval
Article 29. Joint Operating Committee
Article 30. Miscellaneous
30.1 Binding Effect
30.2 Conflicts
30.3 Rules of Interpretation
30.4 Entire Agreement
30.5 No Third Party Beneficiaries
30.6 Waiver
30.7 Headings
30.8 Multiple Counterparts
30.9 Amendment
30.10 Modification by the Parties
Page 5 of 75
30.11 Reservation of Rights
30.12 No Partnership
Appendix A Interconnection Facilities and Network Upgrades
Appendix B Milestones
Appendix C Interconnection Details
Appendix D Security Arrangements Details
Appendix E Commercial Operation Date
Appendix F Addresses for Delivery of Notices and Billings
Page 6 of 75
LARGE GENERATOR INTERCONNECTION AGREEMENT
THIS LARGE GENERATOR INTERCONNECTION AGREEMENT
("Agreement") is made and entered into by and between Clearwater Paper Corporation,
("Interconnection Customer" and/or "Clearwater"), and Avista Corporation, a Washington
corporation with its principal offices located at 1411 East Mission, Spokane, Washington,
("Transmission Provider" and/or "Transmission Owner" and/or "Avista"). Interconnection
Customer and Transmission Provider each may be referred to as a "Party" or collectively as the
"Parties."
RECITALS
WHEREAS, Transmission Provider operates the Transmission System; and
WHEREAS, Interconnection Customer owns, leases and/or controls and operates a
paper products manufacturing plant in Nez Perce County, Idaho, herein collectively referred to
as the "Lewiston Plant"; and
WHEREAS, Interconnection Customer owns four and operates, as of the Effect Date,
two thermal electric generating units located at the Lewiston Plant identified as a Large
Generating Facility and described further in Appendix C; and
WHEREAS, Interconnection Customer reserves the right to operate and deliver energy
from a maximum of all four units subject to this Agreement; and
WHEREAS, Transmission Provider and Interconnection Customer are parties to the
Generation Interconnection Agreement by and between Avista Corporation and Potlatch
Corporation dated September 22, 2003 ("GIA") which provides for, among other things, the
interconnection of the Large Generating Facility with the Transmission System; and
WHEREAS, the GIA terminates simultaneously with the expiration, termination and/or
cancellation of the Power Purchase and Sale Agreement by and between Avista Corporation and
Potlatch Corporation dated July 22, 2003 ("Power Agreement"); and
WHEREAS, Interconnection Customer and Transmission Provider are entering into this
Agreement to provide for the ongoing interconnection of the Large Generating Facility with the
Transmission System.
NOW, THEREFORE, in consideration of and subject to the mutual covenants contained
herein, it is agreed:
When used in this Large Generator Interconnection Agreement, terms with initial
capitalization that are not defined in Article 1 shall have the meanings specified in the Article in
Page 7 of 75
which they are used or in Transmission Provider's Open Access Transmission Tariff - FERC
Electric Tariff Volume No. S ("Tariff').
Page 8 of 75
Article 1. Definitions
Affiliate shall mean, with respect to a corporation, partnership or other entity, each such other
corporation, partnership or other entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, such corporation,
partnership or other entity.
Ancillary Services shall mean those services that are necessary to support the transmission of
capacity and energy from resources to loads while maintaining reliable operation of the
Transmission Provider's Transmission System in accordance with Good Utility Practice.
Applicable Laws and Regulations shall mean all duly promulgated applicable federal, state and
local laws, regulations, rules, ordinances, codes, decrees, judgments, directives, or judicial or
administrative orders, permits and other duly authorized actions of any Governmental Authority.
Applicable Reliability Council shall mean the Western Electric Coordinating Council or such
other reliability organization applicable to the Transmission System to which the Generating
Facility is directly interconnected.
Applicable Reliability Standards shall mean the requirements and guidelines of NERC, the
Applicable Reliability Council, and the Control Area of the Transmission System to which the
Generating Facility is directly interconnected.
Breach shall mean the failure of a Party to perform or observe any material term or condition of
this Agreement.
Breaching Party shall mean a Party that is in Breach of this Agreement.
Business Day shall mean Monday through Friday, excluding Federal Holidays.
Calendar Day shall mean any day including Saturday, Sunday or a Federal Holiday.
Commercial Operation shall mean the status of a Generating Facility that has commenced
generating electricity for sale, excluding electricity generated during Trial Operation.
Commercial Operation Date of a unit shall mean the date on which the Generating Facility
commences Commercial Operation as agreed to by the Parties pursuant to Appendix E to this
Agreement.
Confidential Information shall mean any confidential, proprietary or trade secret information of
a plan, specification, pattern, procedure, design, device, list, concept, policy or compilation
relating to the present or planned business of a Party, which is designated as confidential by the
Party supplying the information, whether conveyed orally, electronically, in writing, through
inspection, or otherwise.
Page 9 of 75
Control Area shall mean an electrical system or systems bounded by interconnection metering
and telemetry, capable of controlling generation to maintain its interchange schedule with other
Control Areas and contributing to frequency regulation of the interconnection. A Control Area
must be certified by the Applicable Reliability Council.
Default shall mean the failure of a Breaching Party to cure its Breach in accordance with Article
17 of this Agreement.
Dispute Resolution shall mean the procedure for resolution of a dispute between the Parties in
which they will first attempt to resolve the dispute on an informal basis.
Distribution System shall mean the Transmission Provider's facilities and equipment used to
transmit electricity to ultimate usage points such as homes and industries directly from nearby
generators or from interchanges with higher voltage transmission networks which transport bulk
power over longer distances. The voltage levels at which distribution systems operate differ
among areas.
Effective Date shall mean the date on which this Agreement becomes effective upon execution
by the Parties subject to acceptance by the applicable Governmental Authority, or if filed
unexecuted, upon the date specified by such Governmental Authority.
Emergency Condition shall mean a condition or situation: (1) that in the judgment of the Party
making the claim is imminently likely to endanger life or property; or (2) that, in the case of a
Transmission Provider, is imminently likely (as determined in a non-discriminatory manner) to
cause a material adverse effect on the security of, or damage to Transmission Provider's
Transmission System, Transmission Provider's Interconnection Facilities or the electric systems
of others to which the Transmission Provider's Transmission System is directly connected; or (3)
that, in the case of Interconnection Customer, is imminently likely (as determined in a non-
discriminatory manner) to cause a material adverse effect on the security of, or damage to, the
Generating Facility or Interconnection Customer's Interconnection Facilities. System restoration
and black start shall be considered Emergency Conditions; provided, that Interconnection
Customer is not obligated by this Agreement to possess black start capability.
Energy Resource Interconnection Service shall mean an Interconnection Service that allows
the Interconnection Customer to connect its Generating Facility to the Transmission Provider's
Transmission System to be eligible to deliver the Generating Facility's electric output using the
existing firm or nonfirm capacity of the Transmission Provider's Transmission System on an as
available basis. Energy Resource Interconnection Service in and of itself does not convey
transmission service.
Environmental Law shall mean Applicable Laws or Regulations relating to pollution or
protection of the environment or natural resources.
Federal Power Act shall mean the Federal Power Act, as amended, 16 U.S.C. § § 791 a et seq.
FERC shall mean the Federal Energy Regulatory Commission ("Commission") or its successor.
Page 10 of 75
Force Majeure shall mean any act of God, labor disturbance, act of the public enemy, war,
insurrection, riot, fire, storm or flood, explosion, breakage or accident to machinery or
equipment, any order, regulation or restriction imposed by governmental, military or lawfully
established civilian authorities, or any other cause beyond a Party's control. A Force Majeure
event does not include acts of negligence or intentional wrongdoing by the Party claiming Force
Majeure.
Generating Facility shall mean Interconnection Customer's four thermal electric generating
units located at the Lewiston Plant with a combined total nameplate capacity of 132.2 MVA.
Generating Facility shall not include the Interconnection Customer's Interconnection Facilities.
Generating Facility Capacity shall mean the net capacity of the Generating Facility and the
aggregate net capacity of the Generating Facility where it includes multiple energy production
devices.
Good Utility Practice shall mean any of the practices, methods and acts engaged in or approved
by a significant portion of the electric industry during the relevant time period, or any of the
practices, methods and acts which, in the exercise of reasonable judgment in light of the facts
known at the time the decision was made, could have been expected to accomplish the desired
result at a reasonable cost consistent with good business practices, reliability, safety and
expedition. Good Utility Practice is not intended to be limited to the optimum practice, method,
or act to the exclusion of all others, but rather to be acceptable practices, methods, or acts
generally accepted in the region.
Governmental Authority shall mean any federal, state, local or other governmental regulatory
or administrative agency, court, commission, department, board, or other governmental
subdivision, legislature, rulemaking board, tribunal, or other governmental authority having
jurisdiction over the Parties, their respective facilities, or the respective services they provide,
and exercising or entitled to exercise any administrative, executive, police, or taxing authority or
power; provided, however, that such term does not include Interconnection Customer,
Transmission Provider, or any Affiliate thereof.
Hazardous Substances shall mean any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"hazardous constituents," "restricted hazardous materials," "extremely hazardous substances,"
"toxic substances," "radioactive substances," "contaminants," "pollutants," "toxic pollutants" or
words of similar meaning and regulatory effect under any applicable Environmental Law, or any
other chemical, material or substance, exposure to which is prohibited, limited or regulated by
any applicable Environmental Law.
In-Service Date shall mean the date upon which the Interconnection Customer reasonably
expects it will be ready to begin use of the Transmission Provider's Interconnection Facilities to
obtain back feed power.
Page 11 of 75
Interconnection Customer shall mean any entity, including the Transmission Provider,
Transmission Owner or any of the Affiliates or subsidiaries of either, that proposes to
interconnect its Generating Facility with the Transmission Provider's Transmission System.
Interconnection Customer's Interconnection Facilities shall mean all facilities and equipment,
as identified in Appendix A of this Agreement, that are located between the Generating Facility
and the Point of Change of Ownership, including any modification, addition, or upgrades to such
facilities and equipment necessary to physically and electrically interconnect the Generating
Facility to the Transmission Provider's Transmission System. Interconnection Customer's
Interconnection Facilities are sole use facilities.
Interconnection Facilities shall mean the Transmission Provider's Interconnection Facilities and
the Interconnection Customer's Interconnection Facilities. Collectively, Interconnection
Facilities include all facilities and equipment between the Generating Facility and the Point of
Interconnection, including any modification, additions or upgrades that are necessary to
physically and electrically interconnect the Generating Facility to the Transmission Provider's
Transmission System. Interconnection Facilities are sole use facilities and shall not include
Network Upgrades.
Interconnection Request shall mean an Interconnection Customer's request, in the form of
Appendix 1 to the Standard Large Generator Interconnection Procedures, in accordance with the
Tariff, to interconnect a new generating facility, or to increase the capacity of, or make a
Material Modification to the operating characteristics of, the Generating Facility.
Interconnection Service shall mean the service provided by the Transmission Provider
associated with interconnecting the Interconnection Customer's Generating Facility to the
Transmission Provider's Transmission System and enabling it to receive electric energy and
capacity from the Generating Facility at the Point of Interconnection, pursuant to the terms of
this Agreement and, if applicable, the Transmission Provider's Tariff.
IRS shall mean the Internal Revenue Service.
Joint Operating Committee shall be a group made up of representatives from Interconnection
Customers and the Transmission Provider to coordinate operating and technical considerations of
Interconnection Service.
Large Generating Facility shall mean a Generating Facility having a Generating Facility
Capacity of more than 20 MW.
Loss shall mean any and all losses relating to injury to or death of any person or damage to
property, demand, suits, recoveries, costs and expenses, court costs, attorney fees, and all other
obligations by or to third parties, arising out of or resulting from the other Party's performance,
or non-performance of its obligations under this Agreement on behalf of the indemnifying Party,
except in cases of gross negligence or intentional wrongdoing by the indemnifying Party.
Page 12 of 75
Material Modification shall mean those modifications that have a material impact on the cost or
timing of any Interconnection Request with a later queue priority date.
Metering Equipment shall mean all metering equipment installed or to be installed at the
Generating Facility pursuant to this Agreement at the metering points, including but not limited
to instrument transformers, MWh-meters, data acquisition equipment, transducers, remote
terminal unit, communications equipment, phone lines, and fiber optics.
NERC shall mean the North American Electric Reliability Corporation or its successor
organization.
Network Resource shall mean any designated generating resource owned, purchased, or leased
by a Network Customer under the Network Integration Transmission Service Tariff. Network
Resources do not include any resource, or any portion thereof, that is committed for sale to third
parties or otherwise cannot be called upon to meet the Network Customer's Network Load on a
non-interruptible basis.
Network Resource Interconnection Service shall mean an Interconnection Service that allows
the Interconnection Customer to integrate its Large Generating Facility with the Transmission
Provider's Transmission System (1) in a manner comparable to that in which the Transmission
Provider integrates its generating facilities to serve native load customers; or (2) in an RTO or
ISO with market based congestion management, in the same manner as Network Resources.
Network Resource Interconnection Service in and of itself does not convey, transmission service.
Network Upgrades shall mean the additions, modifications, and upgrades to the Transmission
Provider's Transmission System required at or beyond the point at which the Interconnection
Facilities connect to the Transmission Provider's Transmission System to accommodate the
interconnection of the Large Generating Facility to the Transmission Provider's Transmission
System.
Notice of Dispute shall mean a written notice of a dispute or claim that arises out of or in
connection with this Agreement or its performance.
Party or Parties shall mean Transmission Provider, Transmission Owner, Interconnection
Customer or any combination of the above.
Point of Change of Ownership shall mean the point, as set forth in Appendix C to this
Agreement, where the Interconnection Customer's Interconnection Facilities connect to the
Transmission Provider's Interconnection Facilities.
Point of Delivery shall be the location, designated by the Transmission Provider, on the
Interconnection Customer's premises at the Point of Change of Ownership. Service supplied to
the same Interconnection Customer at other points of delivery, or premises, or at a different
voltage or phase classification shall be separately metered and billed as a separate rate
application.
Page 13 of 75
Point of Interconnection shall mean the point, as set forth in Appendix A to this Agreement,
where the Interconnection Facilities connect to the Transmission Provider's Transmission
System.
Reasonable Efforts shall mean, with respect to an action required to be attempted or taken by a
Party under this Agreement, efforts that are timely and consistent with Good Utility Practice and
are otherwise substantially equivalent to those a Party would use to protect its own interests.
Small Generating Facility shall mean a Generating Facility that has a Generating Facility
Capacity of no more than 20 MW.
System Protection Facilities shall mean the equipment, including necessary protection signal
communications equipment, required to protect (1) the Transmission Provider's Transmission
System from faults or other electrical disturbances occurring at the Generating Facility and (2)
the Generating Facility from faults or other electrical system disturbances occurring on the
Transmission Provider's Transmission System or on other delivery systems or other generating
systems to which the Transmission Provider's Transmission System is directly connected.
Tariff shall mean the Transmission Provider's Tariff through which open access transmission
service and Interconnection Service are offered, as filed with FERC, and as amended or
supplemented from time to time, or any successor tariff.
Transmission Owner shall mean an entity that owns, leases or otherwise possesses an interest in
the portion of the Transmission System at the Point of Interconnection and may be a Party to this
Agreement to the extent necessary.
Transmission Provider shall mean the public utility (or its designated agent) that owns,
controls, or operates transmission or distribution facilities used for the transmission of electricity
in interstate commerce and provides transmission service under the Tariff. The term
Transmission Provider should be read to include the Transmission Owner when the Transmission
Owner is separate from the Transmission Provider.
Transmission Provider's Interconnection Facilities shall mean all facilities and equipment
owned, controlled or operated by the Transmission Provider from the Point of Change of
Ownership to the Point of Interconnection as identified in Appendix A to this Agreement,
including any modifications, additions or upgrades to such facilities and equipment.
Transmission Provider's Interconnection Facilities are sole use facilities and shall not include
Network Upgrades.
Transmission System shall mean the facilities owned, controlled or operated by the
Transmission Provider or Transmission Owner that are used to provide transmission service
under the Tariff.
Trial Operation shall mean the period during which Interconnection Customer is engaged in on-
site test operations and commissioning of the Generating Facility prior to Commercial Operation.
Page 14 of 75
Article 2. Effective Date, Term, and Termination

2.1 Effective Date. This Agreement shall become effective upon July 1, 2013 or
such other date as may be specified by order of the Idaho Public Utilities
Commission.

2.2 Term of Agreement. Subject to the provisions of Article 2.3, this Agreement
shall remain in effect through June 30, 2018 and shall be automatically renewed
for each successive one-year period thereafter.

2.3 Termination Procedures.
2.3.1 Written Notice. This Agreement may be terminated by Interconnection
Customer after giving Transmission Provider ninety (90) Calendar Days
advance written notice, or by either Party upon written notice after the
Generating Facility permanently ceases Commercial Operation.
2.3.2 Default. Either Party may terminate this Agreement in accordance with
Article 17.
2.3.3 Notwithstanding Articles 2.3.1 and 2.3.2, no termination shall become
effective until the Parties have complied with all Applicable Laws and
Regulations applicable to such termination, including any required filing
with an applicable Governmental Authority of a notice of termination of
this Agreement, which notice has been accepted for filing by such
Governmental Authority.

2.4 Termination Costs. If a Party elects to terminate this Agreement pursuant to
Article 2.3 above, each Party shall pay all costs incurred (including any
cancellation costs relating to orders or contracts for interconnection Facilities and
equipment) or charges assessed by the other Party, as of the date of the other
Party's receipt of such notice of termination, that are the responsibility of the
Terminating Party under this Agreement. In the event of termination by a Party,
the Parties shall use commercially Reasonable Efforts to mitigate the costs,
damages and charges arising as a consequence of termination. Upon termination
of this Agreement, unless otherwise ordered or approved by the applicable
Governmental Authority:
2.4.1 With respect to any portion of Transmission Provider's Interconnection
Facilities that have not yet been constructed or installed, Transmission
Provider shall to the extent possible and with Interconnection Customer's
authorization cancel any pending orders of, or return, any materials or
equipment for, or contracts for construction of, such facilities; provided
that in the event Interconnection Customer elects not to authorize such
cancellation, Interconnection Customer shall assume all payment
obligations with respect to such materials, equipment, and contracts, and
Page 15 of 75
Transmission Provider shall deliver such material and equipment, and, if
necessary, assign such contracts, to Interconnection Customer as soon as
practicable, at Interconnection Customer's expense. To the extent that
Interconnection Customer has already paid Transmission Provider for any
or all such costs of materials or equipment not taken by Interconnection
Customer, Transmission Provider shall promptly refund such amounts to
Interconnection Customer, less any costs, including penalties incurred by
Transmission Provider to cancel any pending orders of or return such
materials, equipment, or contracts. If an Interconnection Customer
terminates this Agreement, it shall be responsible for all costs incurred in
association with that Interconnection Customer's interconnection,
including any cancellation costs relating to orders or contracts for
Interconnection Facilities and equipment, and other expenses including
any Network Upgrades for which Transmission Provider has incurred
expenses and has not been reimbursed by Interconnection Customer.
2.4.2 Transmission Provider may, at its option, retain any portion of such
materials, equipment, or facilities that Interconnection Customer chooses
not to accept delivery of, in which case Transmission Provider shall be
responsible for all costs associated with procuring such materials,
equipment, or facilities.
2.4.3 With respect to any portion of the Interconnection Facilities, and any other
facilities already installed or constructed pursuant to the terms of this
Agreement, Interconnection Customer shall be responsible for all costs
associated with the removal, relocation or other disposition or retirement
of such materials, equipment, or facilities.

2.5 Disconnection. Upon termination of this Agreement, the Parties shall take all
appropriate steps to disconnect the Large Generating Facility from the
Transmission System. All costs required to effectuate such disconnection shall be
borne by the terminating Party, unless such termination resulted from the non-
terminating Party's Default of this Agreement or such non-terminating Party
otherwise is responsible for these costs under this Agreement.

2.6 Survival. This Agreement shall continue in effect after termination to the extent
necessary to provide for final billings and payments and for costs incurred
hereunder, including billings and payments pursuant to this Agreement; to permit
the determination and enforcement of liability and indemnification obligations
arising from acts or events that occurred while this Agreement was in effect; and
to permit each Party to have access to the lands of the other Party pursuant to this
Agreement or other applicable agreements, to disconnect, remove or salvage its
own facilities and equipment.

Article 3. Regulatory Filings
Page 16 of 75

3.1 Filing. Transmission Provider shall file this Agreement (and any amendment
hereto) with the appropriate Governmental Authority, if required. Interconnection
Customer may request that any information so provided be subject to the
confidentiality provisions of Article 22. If Interconnection Customer has
executed this Agreement or any amendment thereto, Interconnection Customer
shall reasonably cooperate with Transmission Provider with respect to such filing
and to provide any information reasonably requested by Transmission Provider
needed to comply with applicable regulatory requirements. in the event the
Transmission Provider determines that this Agreement must be filed with FERC
or FERC asserts jurisdiction, over this Agreement, Transmission Provider shall
file this Agreement with FERC. If FERC issues an order rejecting this Agreement
or accepting this Agreement upon conditions that 'require the modification of this
Agreement, the Parties shall meet within thirty (30) days of the date of such order
(unless the Parties agree to a longer period) to negotiate in good faith for the purpose
of amending or replacing this Agreement to address the issues raised by the FERC
order. To the extent practical and consistent with the FERC order, the Parties shall
endeavor to amend or replace the Agreement in a manner such that the relative
benefits and obligations of the Parties under the Agreement are preserved.

Article 4. Scope of Service

4.1 Interconnection Product Options. The Generating Facility has been connected
to and operated in parallel with the Transmission System under prior
arrangements. The Generating Facility has been and is interconnected consistent
with the provisions for Energy Resource Interconnection Service.
4.1.1 Energy Resource Interconnection Service.

4.1.1.1 The Product. Energy Resource Interconnection Service
allows Interconnection Customer to connect the Large
Generating Facility to the Transmission System and be eligible
to deliver the Large Generating Facility's output using the
existing firm or non-firm capacity of the Transmission System
on an "as available" basis. No additional facilities need to be
constructed for Energy Resource Interconnection Service to be
available to Interconnection Customer.

4.1.1.2 Transmission Delivery Service Implications. Under Energy
Resource Interconnection Service, Interconnection Customer
will be eligible to inject power from the Large Generating
Facility into and deliver power across the interconnecting
Transmission Provider's Transmission System on an "as
available" basis up to the Generating Facility Capacity as of the
Effective Date. Where eligible to do so PJM, ISO-NE,
NYISO), Interconnection Customer may place a bid to sell into
the market up to the maximum identified Large Generating
Page 17 of 75
Facility output, subject to any conditions specified in the
interconnection service approval, and the Large Generating
Facility will be dispatched to the extent Interconnection
Customer's bid clears. In all other instances, no transmission
delivery service from the Large Generating Facility is assured,
but Interconnection Customer may obtain Point-to-Point
Transmission Service, Network Integration Transmission
Service, or be usedfor secondary network transmission service,
pursuant to Transmission Provider's Tariff, up to the
Generating Facility Capacity as of the Effective Date. In those
instances, in order for Interconnection Customer to obtain the
right to deliver or inject energy beyond the Large Generating
Facility Point of Interconnection or to improve its ability to do
so, transmission delivery service must be obtained pursuant to
the provisions of Transmission Provider's Tariff. The
Interconnection Customer's ability to inject its Large
Generating Facility output beyond the Point of Interconnection,
therefore, will depend on the existing capacity of Transmission
Provider's Transmission System at such time as a transmission
service request is made that would accommodate such delivery.
The provision of firm Point-to-Point Transmission Service or
Network Integration Transmission Service may require the
construction of additional Network Upgrades.
4.1.2 Network Resource Interconnection Service.

4.1.2.1 The Product. Transmission Provider must conduct the
necessary studies and construct the Network Upgrades needed
to integrate the Large Generating Facility (I) in a manner
comparable to that in which Transmission Provider integrates
its generating facilities to serve native load customers; or (2) in
an ISO or RTO with market based congestion management, in
the same manner as all Network Resources.

4.1.2.2 Transmission Delivery Service Implications. Network
Resource Interconnection Service allows Interconnection
Customer's Large Generating Facility to be designated by any
Network Customer under the Tariff on Transmission Provider's
Transmission System as a Network Resource, up to the Large
Generating Facility's full output, on the same basis as existing
Network Resources interconnected to Transmission Provider's
Transmission System, and to be studied as a Network Resource
on the assumption that such a designation will occur. Although
Network Resource Interconnection Service does not convey a
reservation of transmission service, any Network Customer
under the Tariff can utilize its network service under the Tariff
Page 18 of 75
to obtain delivery of energy from the interconnected
Interconnection Customer's Large Generating Facility in the
same manner as it accesses Network Resources. A Large
Generating Facility receiving Network Resource
Interconnection Service may also be used to provide Ancillary
Services after technical studies and/or periodic analyses are
performed with respect to the Large Generating Facility's
ability to provide any applicable Ancillary Services, provided
that such studies and analyses have been or would be required
in connection with the provision of such Ancillary Services by
any existing Network Resource. However, if an
Interconnection Customer's Large Generating Facility has not
been designated as a Network Resource by any load; it cannot
be required to provide Ancillary Services except to the extent
such requirements extend to all generating facilities that are
similarly situated. The provision of Network Integration
Transmission Service or firm Point-to-Point Transmission
Service may require additional studies and the construction of
additional upgrades. Because such studies and upgrades would
be associated with a request for delivery service under the
Tariff, cost responsibility for the studies and upgrades would
be in accordance with FERC's policy for pricing transmission
delivery services.
Network Resource Interconnection Service does not
necessarily provide Interconnection Customer with the
capability to physically deliver the output of its Large
Generating Facility to any particular load on Transmission
Provider's Transmission System without incurring congestion
costs. In the event of transmission constraints on Transmission
Provider's Transmission System, Interconnection Customer's
Large Generating Facility shall be subject to the applicable
congestion management procedures in Transmission Provider's
Transmission System in the same manner as Network
Resources.
There is no requirement either at the time of study or
interconnection, or at any point in the future, that
Interconnection Customer's Large Generating Facility be
designated as a Network Resource by a Network Service
Customer under the Tariff or that Interconnection Customer
identify a specific buyer (or sink). To the extent a Network
Customer does designate the Large Generating Facility as a
Network Resource, it must do so pursuant to Transmission
Provider's Tariff.
Page 19 of 75
Once an Interconnection Customer satisfies the requirements
for obtaining Network Resource Interconnection Service, any
future transmission service request for delivery from the Large
Generating Facility within Transmission Provider's
Transmission System of any amount of capacity and/or energy,
up to the Generating Facility Capacity as of the Effective Date,
will not require that any additional studies be performed or that
any further upgrades associated with such Large Generating
Facility be undertaken, regardless of whether or not such Large
Generating Facility is ever designated by a Network Customer
as a Network Resource and regardless of changes in ownership
of the Large Generating Facility. However, the reduction or
elimination of congestion or redispatch costs may require
additional studies and the construction of additional upgrades.
To the extent Interconnection Customer enters into an
arrangement for long term transmission service for deliveries
from the Large Generating Facility outside Transmission
Provider's Transmission System, such request may require
additional studies and upgrades in order for Transmission
Provider to grant such request.

4.2 Provision of Service. Transmission Provider shall provide Interconnection
Service for the Large Generating Facility at the Point of Interconnection.

4.3 Performance Standards. Each Party shall perform all of its obligations under
this Agreement in accordance with Applicable Laws and Regulations, Applicable
Reliability Standards, and Good Utility Practice, and to the extent a Party is
required or prevented or limited in taking any action by such regulations and
standards, such Party shall not be deemed to be in Breach of this Agreement for
its compliance therewith. If such Party is a Transmission Provider or
Transmission Owner, then that Party shall amend this Agreement and submit the
amendment to the appropriate Governmental Authority for approval.

4.4 No Transmission Delivery Service. The execution of this Agreement does not
constitute a request for, nor the provision of, any transmission delivery service
under Transmission Provider's Tariff, and does not convey any right to deliver
electricity to any specific customer or point of delivery.

4.5 Interconnection Customer Provided Services. The services provided by
Interconnection Customer under this Agreement are set forth in Article 9.6 and
Article 13.5.1. Interconnection Customer shall be paid for such services in
accordance with Article 11.3.

Article 5. Interconnection Facilities Engineering, Procurement, and Construction
Page 20 of 75
5.1 Construction of Interconnection Facilities. All Transmission Provider
Interconnection Facilities and Interconnection Customer Interconnection Facilities
necessary to connect the Large Generating Facility to the Transmission System
are completed and in-service as of the Effective Date.
5.2 This Section Intentionally Left Blank.
5.3 This Section Intentionally Left Blank.
5.4 Power System Stabilizers. The Interconnection Customer shall procure, install,
maintain and operate Power System Stabilizers in accordance with the guidelines
and procedures established by the Applicable Reliability Council. Transmission
Provider reserves the right to reasonably establish minimum acceptable settings
for any installed Power System Stabilizers, subject to the design and operating
limitations of the Large Generating Facility. If the Large Generating Facility's
Power System Stabilizers are removed from service or not capable of automatic
operation, Interconnection Customer shall immediately notify Transmission
Provider's system operator, or its designated representative.
5.5 This Section Intentionally Left Blank.
5.6 This Section Intentionally Left Blank.
5.7 This Section Intentionally Left Blank.
5.8 This Section Intentionally Left Blank.
5.9 This Section Intentionally Left Blank.
5.10 Interconnection Customer's Interconnection Facilities ("ICIF").
Interconnection Customer shall, at its expense, design, procure, construct, own
and install the ICIF, as set forth in Appendix A - Interconnection Facilities and
Network Upgrades. The ICIF shall be designed, constructed and operated in
accordance with Good Utility Practice. Interconnection Customer shall, if
requested, deliver to Transmission Provider "as-built" drawings, information and
documents for the ICIF, such as: a one-line diagram, a site plan showing the
Generating Facility and the ICIF, plan and elevation drawings showing the layout
of the ICIF, a relay functional diagram, relaying AC and DC schematic wiring
diagrams and relay settings for all facilities associated with Interconnection
Customer's step-up transformers, the facilities connecting the Generating Facility
to the step-up transformers and the ICIF, and the impedances (determined by
factory tests) for the associated step-up transformers and the Generating Facility.
The Interconnection Customer shall provide Transmission Provider specifications
for the excitation system, automatic voltage regulator, Generating Facility control
and protection settings, transformer tap settings, and communications, if
applicable.
Page 21 of 75
5.11 Transmission Provider's Interconnection Facilities. Transmission Provider's
Interconnection Facilities shall be designed, constructed and operated in
accordance with Good Utility Practice. Transmission Provider shall, if requested,
deliver to Interconnection Customer the "as-built" drawings, information and
documents for Transmission Provider's Interconnection Facilities that are
necessary for the reliable operation of the Generating Facility, provided, however,
that such drawings do not include critical energy infrastructure information.
5.12 Access Rights. Upon reasonable notice and supervision by a Party, and subject to
any required or necessary regulatory approvals, a Party ("Granting Party") shall
furnish at no cost to the other Party ("Access Party") any rights of use, licenses,
rights of way and easements with respect to lands owned or controlled by the
Granting Party, its agents (if allowed under the applicable agency agreement), or
any Affiliate, that are necessary to enable the Access Party to obtain ingress and
egress to construct, operate, maintain, repair, test (or witness testing), inspect,
replace or remove facilities and equipment to: (i) interconnect the Large
Generating Facility with the Transmission System; (ii) operate and maintain the
Large Generating Facility, the Interconnection Facilities and the Transmission
System; and (iii) disconnect or remove the Access Party's facilities and equipment
upon termination of this Agreement. In exercising such licenses, rights of way
and easements, the Access Party shall not unreasonably disrupt or interfere with
normal operation of the Granting Party's business and shall adhere to the safety
rules and procedures established in advance, as may be changed from time to
time, by the Granting Party and provided to the Access Party.
5.13 This Section Intentionally Left Blank.
5.14 Permits. Transmission Provider or Transmission Owner and Interconnection
Customer shall cooperate with each other in good faith in obtaining all permits,
licenses and authorizations that are necessary to accomplish and maintain the
interconnection in compliance with Applicable Laws and Regulations. With
respect to this paragraph, Transmission Provider or Transmission Owner shall
provide permitting assistance to Interconnection Customer comparable to that
provided to Transmission Provider's own, or an Affiliate's generation.
5.15 This Section Intentionally Left Blank.
5.16 This Section Intentionally Left Blank.
5.17 This Section Intentionally Left Blank.
5.18 This Section Intentionally Left Blank.
5.19 Modification.
Page 22 of 75
5.19.1 General. Either Party may undertake modifications to its facilities. If
a Party plans to undertake a modification that reasonably may be
expected to affect the other Party's facilities, that Party shall provide to
the other Party sufficient information regarding such modification so
that the other Party may evaluate the potential impact of such
modification prior to commencement of the work. Such information
shall be deemed to be confidential hereunder and shall include
information concerning the timing of such modifications and whether
such modifications are expected to interrupt the flow of electricity
from the Large Generating Facility. The Party desiring to perform
such work shall provide the relevant drawings, plans, and
specifications to the other Party at least ninety (90) Calendar Days in
advance of the commencement of the work or such shorter period
upon which the Parties may agree, which -agreement shall not
unreasonably be withheld, conditioned or delayed.
In the case of Large Generating Facility modifications that do not
require Interconnection Customer to submit an Interconnection
Request, Transmission Provider shall provide, within thirty (30)
Calendar Days (or such other time as the Parties may agree), an
estimate of any additional modifications to the Transmission System,
Transmission Provider's Interconnection Facilities or Network
Upgrades necessitated by such Interconnection Customer modification
and a good faith estimate of the costs thereof.
5.19.2 Standards. Any additions, modifications, or replacements made to a
Party's facilities shall be designed, constructed and operated in
accordance with this Agreement and Good Utility Practice.
5.19.3 Modification Costs. Interconnection Customer shall not be directly
assigned for the costs of any additions, modifications, or replacements
that Transmission Provider makes to Transmission Provider's
Interconnection Facilities or the Transmission System to facilitate the
interconnection of a third party to Transmission Provider's
Interconnection Facilities or the Transmission System, or to provide
transmission service to a third party under Transmission Provider's
Tariff. Interconnection Customer shall be responsible for the costs of
any additions, modifications, or replacements to Interconnection
Customer's Interconnection Facilities that may be necessary to
maintain or upgrade such Interconnection Customer's Interconnection
Facilities consistent with Applicable Laws and Regulations,
Applicable Reliability Standards or Good Utility Practice.

Article 6. Testing and Inspection

6.1 This Section Intentionally Left Blank.
Page 23 of 75

6.2 Post-Commercial Operation Date Testing and Modifications. Each Party shall
at its own expense perform routine inspection and testing of its facilities and
equipment in accordance with Good Utility Practice as may be necessary to
ensure the continued interconnection of the Large Generating Facility with the
Transmission System in a safe and reliable manner. Each Party shall make any
modifications to its facilities that are found to be necessary as a result of such
testing. Each Party shall have the right, upon advance written notice, to require
reasonable additional testing of the other Party's facilities, at the requesting Party's
expense, as may be in accordance with Good Utility Practice.

6.3 Right to Observe Testing. Each Party shall notify the other Party in advance of
its performance of tests of its Interconnection Facilities. The other Party has the
right, at its own expense, to observe such testing.

6.4 Right to Inspect. Each Party shall have the right, but shall have no obligation to:
(i)observe the other Party's tests and/or inspection of any of its System Protection
Facilities and other protective equipment, including Power System Stabilizers;
(ii)review the settings of the other Party's System Protection Facilities and other
protective equipment; and (iii) review the other Party's maintenance records
relative to the Interconnection Facilities, the System Protection Facilities and
other protective equipment. A Party may exercise these rights from time to time
as it deems necessary upon reasonable notice to the other Party. The exercise or
non-exercise by a Party of any such rights shall not be construed as an
endorsement or confirmation of any element or condition of the Interconnection
Facilities or the System Protection Facilities or other protective equipment or the
operation thereof, or as a warranty as to the fitness, safety, desirability, or
reliability of same. Any information that a Party obtains through the exercise of
any of its rights under this Article 6.4 shall be deemed to be Confidential
Information and treated pursuant to Article 22 of this Agreement.

Article 7. Metering

7.1 General. Each Party shall comply with the Applicable Reliability Council
requirements. Unless otherwise agreed by the Parties, Transmission Provider
shall install Metering Equipment at the Point of Interconnection prior to any
operation of the Large Generating Facility and shall own, operate, test and
maintain such Metering Equipment. Power flows to and from the Large
Generating Facility shall be measured at or, at Transmission Provider's option,
compensated to, the Point of Interconnection. Transmission Provider shall
provide metering quantities, in analog and/or digital form, to Interconnection
Customer upon request. Interconnection Customer shall bear all reasonable
documented costs associated with the purchase, installation, operation, testing and
maintenance of the Metering Equipment. As of the Effective Date the Parties
have agreed that Interconnection Customer may own, the Metering Equipment on
the Interconnection Customer's Interconnection Facilities. Interconnection
Page 24 of 75
Customer shall continue to own interconnection facility metering and
Transmission Provider shall continue to maintain such metering on
Interconnection Customer's side of the Point of Interconnection. Transmission
Provider shall continue to own and maintain metering on its side of the Point of
Interconnection. Meters are located as specified in Appendix A. Appendix A
shall also specify any necessary adjustment factors if the location of the metering
system is not at the Point of Interconnection or requires loss compensation.

7.2 Check Meters. Interconnection Customer, at its option and expense, may install
and operate, on its premises and on its side of the Point of Interconnection, one or
more check meters to check Transmission Provider's meters. Such check meters
shall be for check purposes only and shall not be used for the measurement of
power flows for purposes of this Agreement, except as provided in Article 7.4
below. The check meters shall be subject at all reasonable times to inspection and
examination by Transmission Provider or its designee. The installation, operation
and maintenance thereof shall be performed entirely by Interconnection Customer
in accordance with Good Utility Practice.

7.3 Standards. The Parties shall install, calibrate, and test revenue quality Metering
Equipment in accordance with applicable ANSI standards.

7.4 Testing of Metering Equipment. Transmission Provider shall inspect and test
all Metering Equipment upon installation and at least once every two (2) years
thereafter. If requested to do so by Interconnection Customer, Transmission
Provider shall, at Interconnection Customer's expense, inspect or test Metering
Equipment more frequently than every two (2) years. Transmission Provider shall
give reasonable notice of the time when any inspection or test shall take place,
and Interconnection Customer may have representatives present at the test or
inspection. If at any time Metering Equipment is found to be inaccurate or
defective, it shall be adjusted, repaired or replaced at Interconnection Customer's
expense, in order to provide accurate metering, unless the inaccuracy or defect is
due to Transmission Provider's failure to maintain, then Transmission Provider
shall pay. If Metering Equipment fails to register, or if the measurement made by
Metering Equipment during a test varies by more than two percent from the
measurement made by the standard meter used in the test, Transmission Provider
shall adjust the measurements by correcting all measurements for the period
during which Metering Equipment was in error by using available check meters,
if installed. If no such check meters are installed or if the period cannot be
reasonably ascertained, the adjustment shall be for the period immediately
preceding the test of the Metering Equipment equal to one-half the time from the
date of the last previous test of the Metering Equipment.

7.5 Metering Data. At Interconnection Customer's expense, the metered data shall
be telemetered to one or more locations designated by Transmission Provider and
one or more locations designated by Interconnection Customer. Such telemetered
Page 25 of 75
data shall be used, under normal operating conditions, as the official
measurement.

7.6 Modifications to Metering or Communications. In the event that
modifications to existing metering under Article 7 or communications facilities
under Article 8 become necessary, Transmission Provider shall determine the
necessary modifications in consultation with Interconnection Customer. As of the
Effective Date, Interconnection Customer owns the existing metering equipment.
Transmission Provider shall, at its expense, design, procure, install and maintain
any replacement metering equipment necessary for the continued metering and
communication needs under this Agreement, and shall subsequently assume
ownership of such equipment. Interconnection Customer shall provide the
Transmission Provider the necessary equipment space and access rights for any
such new metering and communication equipment. All Transmission Provider
equipment shall be properly identified as owned by the Transmission Provider.
Metering CT's and PT's shall be provided and maintained by Interconnection
Customer pursuant to Transmission Provider's specifications.

Article 8. Communications

8.1 Interconnection Customer Obligations. Interconnection Customer shall
maintain satisfactory operating communications with Transmission Provider's
Transmission System dispatcher or representative designated by Transmission
Provider. Interconnection Customer shall provide standard voice line, dedicated
voice line and facsimile communications at its Large Generating Facility 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. Interconnection Customer shall also provide the dedicated data
circuit(s) necessary to provide Interconnection Customer data to Transmission
Provider as set forth in Appendix D, Security Arrangements Details. The data
circuit(s) shall extend from the Large Generating Facility to the location(s)
specified by Transmission Provider. Any required maintenance of
Interconnection Customer owned communications equipment shall be performed
by Interconnection Customer at Interconnection Customer's expense. Operational
communications shall be activated and maintained under, but not be limited to,
the following events: system paralleling or separation, scheduled and
unscheduled shutdowns, equipment clearances, and hourly and daily load data.

8.2 Remote Terminal Unit. A Remote Terminal Unit, or equivalent data collection
and transfer equipment acceptable to the Parties, has been installed by
Interconnection Customer, or by Transmission Provider at Interconnection
Customer's expense, to gather accumulated and instantaneous data to be
telemetered to the location(s) designated by Transmission Provider through use of
a dedicated point-to-point data circuit(s) as indicated in Article 8.1. The
communication protocol for the data circuit(s) shall be specified by Transmission
Page 26 of 75
Provider. Instantaneous bi-directional analog real power and reactive power flow
information must be telemetered directly to the location(s) specified by
Transmission Provider.
Each Party shall promptly advise the other Party if it detects or otherwise learns of
any metering, telemetry or communications equipment errors or malfunctions that
require the attention and/or correction by the other Party. The Party owning such
equipment shall correct such error or malfunction as soon as reasonably feasible.

8.3 No Annexation. Any and all equipment placed on the premises of a Party shall
be and remain the property of the Party providing such equipment regardless of
the mode and manner of annexation or attachment to real property, unless
otherwise mutually agreed by the Parties.

Article 9. Operations

9.1 General. Each Party shall comply with the Applicable Reliability Council
requirements. Each Party shall provide to the other Party all information that may
reasonably be required by the other Party to comply with Applicable Laws and
Regulations and Applicable Reliability Standards.

9.2 Control Area Notification. At least three months prior to any change in Control
Area, Interconnection Customer shall notify Transmission Provider in writing of
the Control Area in which the Large Generating Facility will be located. If
Interconnection Customer elects to locate the Large Generating Facility in a
Control Area other than the Control Area in which the Large Generating Facility
is physically located, and if permitted to do so by the relevant transmission tariffs,
all necessary arrangements, including but not limited to those set forth in Article 7
and Article 8 of this Agreement, and remote Control Area generator interchange
agreements, if applicable, and the appropriate measures under such agreements,
shall be executed and implemented prior to the placement of the Large Generating
Facility in the other Control Area.

9.3 Transmission Provider Obligations. Transmission Provider shall cause the
Transmission System and Transmission Provider's Interconnection Facilities to be
operated, maintained and controlled in a safe and reliable manner pursuant to
Good Utility Practice and in accordance with this Agreement. Transmission
Provider may provide operating instructions to Interconnection Customer
consistent with this Agreement and Transmission Provider's operating protocols
and procedures as they may change from time to time. Transmission Provider
will consider changes to its operating protocols and procedures proposed by
Interconnection Customer.

9.4 Interconnection Customer Obligations. Interconnection Customer shall at its
own expense operate, maintain and control the Large Generating Facility and
Interconnection Customer's Interconnection Facilities in a safe and reliable
Page 27 of 75
manner pursuant to Good Utility Practice and in accordance with this Agreement.
Interconnection Customer shall operate the Large Generating Facility and
Interconnection Customer's Interconnection Facilities in accordance with all
applicable requirements of the Control Area of which it is part, as such
requirements are set forth in Appendix C, Interconnection Details, of this
Agreement. Appendix C, Interconnection Details, will be modified to reflect
changes to the requirements as they may change from time to time. Either Party
may request that the other Party provide copies of the requirements set forth in
Appendix C, Interconnection Details, of this Agreement.

9.5 Start-Up and Synchronization. Consistent with the Parties' mutually acceptable
procedures, Interconnection Customer is responsible for the proper
synchronization of the Large Generating Facility to Transmission Provider's
Transmission System.

9.6 Reactive Power.
9.6.1 Power Factor Design Criteria. Interconnection Customer shall design
and operate the Large Generating Facility to maintain a composite power
delivery at continuous rated power output at the Point of Interconnection
at a power factor within the range of 0.95 leading to 0.95 lagging, unless
Transmission Provider has established different requirements that apply to
all generators in the Control Area on a comparable basis.
9.6.2 Voltage Schedules. Once Interconnection Customer has synchronized the
Large Generating Facility with the Transmission System, Transmission
Provider shall require Interconnection Customer to operate the Large
Generating Facility to produce or absorb reactive power within the design
limitations of the Large Generating Facility set forth in Article 9.6.1
(Power Factor Design Criteria). Transmission Provider's voltage
schedules shall treat all sources of reactive power in the Control Area in
an equitable and not unduly discriminatory manner. Transmission
Provider shall exercise Reasonable Efforts to provide Interconnection
Customer with such schedules at least one (1) day in advance, and may
make changes to such schedules as necessary to maintain the reliability of
the Transmission System. Interconnection Customer shall operate the
Large Generating Facility to maintain the specified output voltage or
power factor at the Point of Interconnection within the design limitations
of the Large Generating Facility set forth in Article 9.6.1 (Power Factor
Design Criteria). If Interconnection Customer is unable to maintain the
specified voltage or power factor, it shall promptly notify the System
Operator.
9.6.21 Governors and Regulators. Whenever the Large Generating
Facility is operated in parallel with the Transmission System
and the speed governors (if installed on the generating unit
Page 28 of 75
pursuant to Good Utility Practice) and voltage regulators are
capable of operation, Interconnection Customer shall operate
the Large Generating Facility with its speed governors and
voltage regulators in automatic operation. If the Large
Generating Facility's speed governors and voltage regulators
are not capable of such automatic operation, Interconnection
Customer shall immediately notify Transmission Provider's
system operator, or its -designated representative, and ensure
that such Large Generating Facility's reactive power production
or absorption (measured in MVARs) are within the design
capability of the Large Generating Facility's generating unit(s)
and steady state stability limits. Interconnection Customer
shall not cause its Large Generating Facility to disconnect
automatically or instantaneously from the Transmission System
or trip any generating unit comprising the Large Generating
Facility for an under or over frequency condition unless the
abnormal frequency condition persists for a time period beyond
the limits set forth in ANSI/IEEE Standard C37.106, or such
other standard as applied to other generators in the Control
Area on a comparable basis.
9.6.3 Payment for Reactive Power. Transmission Provider is required to pay
Interconnection Customer for reactive power that Interconnection
Customer provides or absorbs from the Large Generating Facility when
Transmission Provider requests Interconnection Customer to operate its
Large Generating Facility outside the range specified in Article 9.6.1,
provided that if Transmission Provider pays its own or Affiliated
generators for reactive power service within the specified range, it must
also pay Interconnection Customer. Payments shall be pursuant to Article
11.3 or such other agreement to which the Parties have otherwise agreed.
9.7 Outages and Interruptions.
9.7.1 Outages.
9.7.1.1 Outage Authority and Coordination. Each Party may in
accordance with Good Utility Practice in coordination with the
other Party remove from service any of its respective
Interconnection Facilities or Network Upgrades that may
impact the other Party's facilities as necessary to perform
maintenance or testing or to install or replace equipment.
Absent an Emergency Condition, the Party scheduling a
removal of such facility(ies) from service will use Reasonable
Efforts to schedule such removal on a date and time mutually
acceptable to the Parties. In all circumstances, any Party
planning to remove such facility(ies) from service shall use
Page 29 of 75
Reasonable Efforts to minimize the effect on the other Party of
such removal.

9.7.1.2 Outage Schedules. Transmission Provider shall post
scheduled outages of its transmission facilities on the OASIS.
Interconnection Customer shall submit its planned maintenance
schedules for the Large Generating Facility to Transmission
Provider for a minimum of a rolling twenty-four month period.
Interconnection Customer shall update its planned maintenance
schedules as necessary. Transmission Provider may request
Interconnection Customer to reschedule its maintenance as
necessary to maintain the reliability of the Transmission
System; provided, however, adequacy of generation supply
shall not be a criterion in determining Transmission System
reliability.

9.7.1.3 Outage Restoration. If an outage on a Party's Interconnection
Facilities or Network Upgrades adversely affects the other
Party's operations or facilities, the Party that owns or controls
the facility that is out of service shall use Reasonable Efforts to
promptly restore such facility(ies) to a normal operating
condition consistent with the nature of the outage. The Party
that owns or controls the facility that is out of service shall
provide the other Party, to the extent such information is
known, information on the nature of the Emergency Condition,
an estimated time of restoration, and any corrective actions
required. Initial verbal notice shall be followed up as soon as
practicable with written notice explaining the nature of the
outage.
9.7.2 Interruption of Service. If required by Good Utility Practice to do so,
Transmission Provider may require Interconnection Customer to interrupt
or reduce deliveries of electricity if such delivery of electricity could
adversely affect Transmission Provider's ability to perform such activities
as are necessary to safely and reliably operate and maintain the
Transmission System. The following provisions shall apply to any
interruption or reduction permitted under this Article 9.7.2:

9.7.2.1 The interruption or reduction shall continue only for so long as
reasonably necessary under Good Utility Practice;

9.7.2.2 Any such interruption or reduction shall be made on an
equitable, non-discriminatory basis with respect to all
generating facilities directly connected to the Transmission
System;
Page 30 of 75

9.7.2.3 When the interruption or reduction must be made under
circumstances which do not allow for advance notice,
Transmission Provider shall notify Interconnection Customer
by telephone as soon as practicable of the reasons for the
Curtailment, interruption, or reduction, and, if known, its
expected duration. Telephone notification shall be followed by
written notification as soon as practicable;

9.7.2.4 Except during the existence of an Emergency Condition, when
the interruption or reduction can be scheduled without advance
notice, Transmission Provider shall notify Interconnection
Customer in advance regarding the timing of such scheduling
and further notify Interconnection Customer of the expected
duration. Transmission Provider shall coordinate with
Interconnection Customer using Good Utility Practice to
schedule the interruption or reduction during periods of least
impact to Interconnection Customer and Transmission
Provider;

9.7.2.5 The Parties shall cooperate and coordinate with each other to
the extent necessary in order to restore the Large Generating
Facility, Interconnection Facilities, and the Transmission
System to their normal operating state, consistent with system
conditions and Good Utility Practice.
9.7.3 Under-Frequency and Over Frequency Conditions. The Transmission
System is designed to automatically activate a load-shed program as
required by the Applicable Reliability Council in the event of an under-
frequency system disturbance. Interconnection Customer shall implement
under-frequency and over-frequency relay set points for the Large
Generating Facility as required by the Applicable Reliability Council to
ensure "ride through" capability of the Transmission System. Large
Generating Facility response to frequency deviations of pre-determined
magnitudes, both under-frequency and over-frequency deviations, shall be
studied and coordinated with Transmission Provider in accordance with
Good Utility Practice. The term "ride through" as used herein shall mean
the ability of a Generating Facility to stay connected to and synchronized
with the Transmission System during system disturbances within a range
of under-frequency and over-frequency conditions, in accordance with
Good Utility Practice.
9.7.4 System Protection and Other Control Requirements.

9.7.4.1 System Protection Facilities. Interconnection Customer shall,
at its expense, install, operate and maintain System Protection
Facilities as a part of the Large Generating Facility or
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Interconnection Customer's Interconnection Facilities.
Transmission Provider shall install at Interconnection
Customer's expense any System Protection Facilities that may
be required on Transmission Provider's Interconnection
Facilities or the Transmission System as a result of the
interconnection of the Large Generating Facility and
Interconnection Customer's Interconnection Facilities.

9.7.4.2 Each Party's protection facilities shall be designed and
coordinated with other systems in accordance with Good
Utility Practice.

9.7.4.3 Each Party shall be responsible for protection of its facilities
consistent with Good Utility Practice.

9.7.4.4 Each Party's protective relay design shall incorporate the
necessary test switches to perform the tests required in Article
6. The required test switches will be placed such that they
allow operation of lockout relays while preventing breaker
failure schemes from operating and causing unnecessary
breaker operations and/or the tripping of Interconnection
Customer's units.

9.7.4.5 Each Party will test, operate and maintain System Protection
Facilities in accordance with Good Utility Practice.

9.7.4.6 Prior to the In-Service Date, and again prior to the Commercial
Operation Date, each Party or its agent shall perform a
complete calibration test and functional trip test of the System
Protection Facilities. At intervals suggested by Good Utility
Practice and following any apparent malfunction of the System
Protection Facilities, each Party shall perform both calibration
and functional trip tests of its System Protection Facilities.
These tests do not require the tripping of any in-service
generation unit. These tests do, however, require that all
protective relays and lockout contacts be activated.
9.7.5 Requirements for Protection. In compliance with Good Utility Practice,
Interconnection Customer shall provide, install, own, and maintain relays,
circuit breakers and all other devices necessary to remove any fault
contribution of the Large Generating Facility to any short circuit occurring
on the Transmission System not otherwise isolated by Transmission
Provider's equipment, such that the removal of the fault contribution shall
be coordinated with the protective requirements of the Transmission
System. Such protective equipment shall include, without limitation, a
disconnecting device or switch with load-interrupting capability located
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between the Large Generating Facility and the Transmission System at a
site selected upon mutual agreement (not to be unreasonably withheld,
conditioned or delayed) of the Parties. Interconnection Customer shall be
responsible for protection of the Large Generating Facility and
Interconnection Customer's other equipment from such conditions as
negative sequence currents, over- or under-frequency, sudden load
rejection, over- or under-voltage, and generator loss-of-field.
Interconnection Customer shall be solely responsible to disconnect the
Large Generating Facility and Interconnection Customer's other
equipment if conditions on the Transmission System could adversely
affect the Large Generating Facility.
9.7.6 Power Quality. Neither Party's facilities shall cause excessive voltage
flicker nor introduce excessive distortion to the sinusoidal voltage or
current waves as defined by ANSI Standard C84-1-1989, in accordance
with IEEE Standard 519, or any applicable superseding electric industry
standard. In the event of a conflict between ANSI Standard C84.1-1989,
or any applicable superseding electric industry standard, ANSI Standard
C84.1-1989, or the applicable superseding electric industry standard, shall
control.

9.8 Switching and Tagging Rules. Each Party shall provide the other Party a copy
of its switching and tagging rules that are applicable to the other Party's activities.
Such switching and tagging rules shall be developed on a non-discriminatory
basis. The Parties shall comply with applicable switching and tagging rules, as
amended from time to time, in obtaining clearances for work or for switching
operations on equipment.

9.9 Use of Interconnection Facilities by Third Parties.
9.9.1 Purpose of Interconnection Facilities. Except as may be required by
Applicable Laws and Regulations, or as otherwise agreed to among the
Parties, the Interconnection Facilities shall be constructed for the sole
purpose of interconnecting the Large Generating Facility to the
Transmission System and shall be used for no other purpose.
9.9.2 Third Party Users. If required by Applicable Laws and Regulations or if
the Parties mutually agree, such agreement not to be unreasonably
withheld, to allow one or more third parties to use Transmission Provider's
Interconnection Facilities, or any part thereof, Interconnection Customer
will be entitled to compensation for the capital expenses it incurred in
connection with the Interconnection Facilities based upon the pro rata use
of the Interconnection Facilities by Transmission Provider, all third party
users, and Interconnection Customer, in accordance with Applicable Laws
and Regulations or upon some other mutually-agreed upon methodology.
In addition, cost responsibility for ongoing costs, including operation and
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maintenance costs associated with the Interconnection Facilities, will be
allocated between Interconnection Customer and any third party users
based upon the pro rata use of the Interconnection Facilities by
Transmission Provider, all third party users, and Interconnection
Customer, in accordance with Applicable Laws and Regulations or upon
some other mutually agreed upon methodology. If the issue of such
compensation or allocation cannot be resolved through such negotiations,
it shall be submitted to FERC for resolution.
9.10 Disturbance Analysis Data Exchange. The Parties will cooperate with one
another in the analysis of disturbances to either the Large Generating Facility or
Transmission Provider's Transmission System by gathering and providing access
to any information relating to any disturbance, including information from
oscillography, protective relay targets, breaker operations and sequence of events
records, and any disturbance information required by Good Utility Practice.
Article 10. Maintenance
10.1 Transmission Provider Obligations. Transmission Provider shall maintain the
Transmission System and Transmission Provider's Interconnection Facilities in a
safe and reliable manner pursuant to Good Utility Practice and in accordance with
this Agreement.
10.2 Interconnection Customer Obligations. Interconnection Customer shall
maintain the Large Generating Facility and Interconnection Customer's
Interconnection Facilities in a safe and reliable manner pursuant to Good Utility
Practice and in accordance with this Agreement.
10.3 Coordination. The Parties shall confer regularly to coordinate the planning,
scheduling and performance of preventive and corrective maintenance on the
Large Generating Facility and the Interconnection Facilities.
10.4 Secondary Systems. Each Party shall cooperate with the other in the inspection,
maintenance, and testing of control or power circuits that operate below 600 volts,
AC or DC, including, but not limited to, any hardware, control or protective
devices, cables, conductors, electric raceways, secondary equipment panels,
transducers, batteries, chargers, and voltage and current transformers that directly
affect the operation of a Party's facilities and equipment which may reasonably be
expected to impact the other Party. Each Party shall provide advance notice to the
other Party before undertaking any work on such circuits, especially on electrical
circuits involving circuit breaker trip and close contacts, current transformers, or
potential transformers.
10.5 Operating and Maintenance Expenses. Subject to the provisions herein
addressing the use of facilities by others, and except for operations and
maintenance expenses associated with modifications made for providing
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interconnection or transmission service to a third party and such third party pays
for such expenses, Interconnection Customer shall be responsible for all
reasonable expenses including overheads, associated with owning, operating,
maintaining, repairing, and replacing Interconnection Customer's Interconnection
Facilities.
Article 11. Performance Obligation
11.1 Interconnection Customer Interconnection Facilities. Interconnection
Customer shall design, procure, construct and replace, own and/or control
Interconnection Customer Interconnection Facilities pursuant to Good Utility
Practice and at its sole expense.
11.2 Transmission Provider's Interconnection Facilities. Transmission Provider or
Transmission Owner shall design, procure, construct and replace, own and/or
control the Transmission Provider's Interconnection Facilities pursuant to Good
Utility Practice and at its sole expense.
11.3 Interconnection Customer Compensation. If Transmission Provider requests
or directs Interconnection Customer to provide a service pursuant to Articles 9.6.3
(Payment for Reactive Power), or 13.5.1 of this Agreement, Transmission
Provider shall compensate Interconnection Customer in accordance with
Interconnection Customer's applicable rate schedule then in effect unless the
provision of such service(s) is subject to an RTO or ISO FERC-approved rate
schedule. Interconnection Customer shall serve Transmission Provider or RTO or
ISO with any filing of a proposed rate schedule at the time of such filing with
FERC. To the extent that no rate schedule is in effect at the time the
Interconnection Customer is required to provide or absorb any Reactive Power
under this Agreement, Transmission Provider agrees to compensate
Interconnection Customer in such amount as would have been due
Interconnection Customer had the rate schedule been in effect at the time service
commenced; provided, however, that such rate schedule must be filed at FERC or
other appropriate Governmental Authority within sixty (60) Calendar Days of the
commencement of service.
11.3.1 Interconnection Customer Compensation for Actions During
Emergency Condition. Transmission Provider or RTO or ISO shall
compensate Interconnection Customer for its provision of real and
reactive power and other Emergency Condition services that
Interconnection Customer provides to support the Transmission
System during an Emergency Condition in accordance with
Article 11.3.
Article 12. Invoice
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12.1 General. Each Party shall submit to the other Party, on a monthly basis, invoices
of amounts due for the preceding month. Each invoice shall state the month to
which the invoice applies and fully describe the services and equipment provided.
The Parties may discharge mutual debts and payment obligations due and owing
to each other on the same date through netting, in which case all amounts a Party
owes to the other Party under this Agreement, including interest payments or
credits, shall be netted so that only the net amount remaining due shall be paid by
the owing Party.
12.2 This Section Intentionally Left Blank.
12.3 Payment. Invoices shall be rendered to the paying Party at the address specified
in Appendix F. The Party receiving the invoice shall pay the invoice within thirty
(30) Calendar Days of receipt. All payments shall be made in immediately
available funds payable to the other Party, or by wire transfer to a bank named
and account designated by the invoicing Party. Payment of invoices by either
Party will not constitute a waiver of any rights or claims either Party may have
under this Agreement.
12.4 Disputes. In the event of a billing dispute between Transmission Provider and
Interconnection Customer, Transmission Provider shall continue to provide
Interconnection Service under this Agreement as long as Interconnection
Customer: (i) continues to make all payments not in dispute; and (ii) pays to
Transmission Provider or into an independent escrow account the portion of the
invoice in dispute, pending resolution of such dispute. If Interconnection
Customer fails to meet these two requirements for continuation of service, then
Transmission Provider may provide notice to Interconnection Customer of a
Default pursuant to Article 17. Within thirty (30) Calendar Days after the
resolution of the dispute, the Party that owes money to the other Party shall pay
the amount due with interest calculated in accord with the methodology set forth
in FERC'S regulations at 18 C.F.R § 35.1 9a(a)(2)(iii).
Article 13. Emergencies
13.1 Definition. "Emergency Condition" shall mean a condition or situation: (i) that in
the judgment of the Party making the claim is imminently likely to endanger life
or property; or (ii) that, in the case of Transmission Provider, is imminently likely
(as determined in a non-discriminatory manner) to cause a material adverse effect
on the security of, or damage to the Transmission System, Transmission
Provider's Interconnection Facilities or the Transmission Systems of others to
which the Transmission System is directly connected; or (iii) that, in the case of
Interconnection Customer, is imminently likely (as determined in a
non-discriminatory manner) to cause a material adverse effect on the security of,
or damage to, the Large Generating Facility or Interconnection Customer's
Interconnection Facilities' System restoration and black start shall be considered
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Emergency Conditions; provided, that Interconnection Customer is not obligated
by this Agreement to possess black start capability.
13.2 Obligations. Each Party shall comply with the Emergency Condition procedures
of the applicable ISO/RTO, NERC, the Applicable Reliability Council,
Applicable Laws and Regulations, and any emergency procedures agreed to by
the Joint Operating Committee.
13.3 Notice. Transmission Provider shall notify Interconnection Customer promptly
when it becomes aware of an Emergency Condition that affects Transmission
Provider's Interconnection Facilities or the Transmission System that may
reasonably be expected to affect Interconnection Customer's operation of the
Large Generating Facility or Interconnection Customer's Interconnection
Facilities. Interconnection Customer shall notify Transmission Provider promptly
when it becomes aware of an Emergency Condition that affects the Large
Generating Facility or Interconnection Customer's Interconnection Facilities that
may reasonably be expected to affect the Transmission System or Transmission
Provider's Interconnection Facilities. To the extent information is known, the
notification shall describe the Emergency Condition, the extent of the damage or
deficiency, the expected effect on the operation of Interconnection Customer's or
Transmission Provider's facilities and operations, its anticipated duration and the
corrective action taken and/or to be taken. The initial notice shall be followed as
soon as practicable with written notice.
13.4 Immediate Action. Unless, in Interconnection Customer's reasonable judgment,
immediate action is required, Interconnection Customer shall obtain the consent
of Transmission Provider, such consent to not be unreasonably withheld, prior to
performing any manual switching operations at the Large Generating Facility or
Interconnection Customer's Interconnection Facilities in response to an
Emergency Condition either declared by Transmission Provider or otherwise
regarding the Transmission System.
13.5 Transmission Provider Authority.
13.5.1 General. Transmission Provider may take whatever actions or
inactions with regard to the Transmission System or Transmission
Provider's Interconnection Facilities it deems necessary during an
Emergency Condition in order to: (i) preserve public health and
safety, (ii) preserve the reliability of the Transmission System or
Transmission Provider's Interconnection Facilities, (iii) limit or
prevent damage, and (iv) expedite restoration of service.
Transmission Provider shall use Reasonable Efforts to minimize the
effect of such actions or inactions on the Large Generating Facility or
Interconnection Customer's Interconnection Facilities. Transmission
Provider may, on the basis of technical considerations, require the
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Large Generating Facility to mitigate an Emergency Condition by
taking actions necessary and limited in scope to remedy the
Emergency Condition, including, but not limited to, directing
Interconnection Customer to shut-down, start-up, increase or decrease
the real or reactive power output of the Large Generating Facility;
implementing a reduction or disconnection pursuant to Article 13.5.2;
directing Interconnection Customer to assist with blackstart (if
available) or restoration efforts; or altering the outage schedules of the
Large Generating Facility and Interconnection Customer's
Interconnection Facilities. Interconnection Customer shall comply
with all of Transmission Provider's operating instructions concerning
Large Generating Facility real power and reactive power output within
the manufacturer's design limitations of the Large Generating Facility's
equipment that is in service and physically available for operation at
the time, in compliance with Applicable Laws and Regulations.
13.5.2 Reduction and Disconnection. Transmission Provider may reduce
Interconnection Service or disconnect the Large Generating Facility or
Interconnection Customer's Interconnection Facilities, when such,
reduction or disconnection is necessary under Good Utility Practice
due to Emergency Conditions. These rights are separate and distinct
from any right of Curtailment of Transmission Provider pursuant to
Transmission Provider's Tariff. When Transmission Provider can
schedule the reduction or disconnection in advance, Transmission
Provider shall notify Interconnection Customer of the reasons, timing
and expected duration of the reduction or disconnection. Transmission
Provider shall coordinate with Interconnection Customer using Good
Utility Practice to schedule the reduction or disconnection during
periods of least impact to Interconnection Customer and Transmission
Provider. Any reduction or disconnection shall continue only for so
long as reasonably necessary under Good Utility Practice. The Parties
shall cooperate with each other to restore the Large Generating
Facility, the Interconnection Facilities, and the Transmission System to
their normal operating state as soon as practicable consistent with
Good Utility Practice.
13.6 Interconnection Customer Authority. Consistent with Good Utility Practice
and this Agreement, Interconnection Customer may take actions or inactions with
regard to the Large Generating Facility or Interconnection Customer's
Interconnection Facilities during an Emergency Condition in order to (i) preserve
public health and safety, (ii) preserve the reliability of the Large Generating
Facility or Interconnection Customer's Interconnection Facilities, (iii) limit or
prevent damage, and (iv) expedite restoration of service. Interconnection
Customer shall use Reasonable Efforts to minimize the effect of such actions or
inactions on the Transmission System and Transmission Provider's
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Interconnection Facilities. Transmission Provider shall use Reasonable Efforts to
assist Interconnection Customer in such actions.
13.7 Limited Liability. Except as otherwise provided in Article 11.3.1 of this
Agreement, neither Party shall be liable to the other for any action it takes in
responding to an Emergency Condition so long as such action is made in good
faith and is consistent with Good Utility Practice.
Article 14. Regulatory Requirements and Governing Law
14.1 Regulatory Requirements. Each Party's obligations under this Agreement shall
be subject to its receipt of any required approval or certificate from one or more
Governmental Authorities in the form and substance satisfactory to the applying
Party, or the Party making any required filings with, or providing notice to, such
Governmental Authorities, and the expiration of any time period associated
therewith. Each Party shall in good faith seek and use its Reasonable Efforts to
obtain such other approvals. Nothing in this Agreement shall require
Interconnection Customer to take any action that could result in its inability to
obtain, or its loss of, status or exemption under the Federal Power Act, the Public
Utility Holding Company Act of 1935, as amended, or the Public Utility
Regulatory Policies Act of 1978.
14.2 Governing Law.
14.2.1 The validity, interpretation and performance of this Agreement and
each of its provisions shall be governed by the laws of the state where
the Point of Interconnection is located, without regard to its conflicts
of law principles.
14.2.2 This Agreement is subject to all Applicable Laws and Regulations.
14.2.3 Each Party expressly reserves the right to seek changes in, appeal, or
otherwise contest any laws, orders, rules, or regulations of a
Governmental Authority.
Article 15. Notices
15.1 General. Unless otherwise provided in this Agreement, any notice, demand or
request required or permitted to be given by either Party to the other and any
instrument required or permitted to be tendered or delivered by either Party in
writing to the other shall be effective when delivered and may be so given,
tendered or delivered, by recognized national courier, or by depositing the same
with the United States Postal Service with postage prepaid, for delivery by
certified or registered mail, addressed to the Party, or personally delivered to the
Party, at the address set out in Appendix F, Addresses for Delivery of Notices and
Billings.
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Either Party may change the notice information in this Agreement by giving five
(5) Business Days written notice prior to the effective date of the change.
15.2 Billings and Payments. Billings and payments shall be sent to the addresses set
out in Appendix F.
15.3 Alternative Forms of Notice. Any notice or request required or permitted to be
given by a Party to the other and not required by this Agreement to be given in
writing may be so given by telephone, facsimile or email to the telephone
numbers and email addresses set out in Appendix F.
15.4 Operations and Maintenance Notice. Each Party shall notify the other Party in
writing of the identity of the person(s) that it designates as the point(s) of contact
with respect to the implementation of Articles 9 and 10.
Article 16. Force Majeure
16.1 Force Majeure.
16.1.1 Economic hardship is not considered a Force Majeure event.
16.1.2 Neither Party shall be considered to be in Default with respect to any
obligation hereunder, (including obligations under Article 4), other
than the obligation to pay money when due, if prevented from
fulfilling such obligation by Force Majeure. A Party unable to fulfill
any obligation hereunder (other than an obligation to pay money when
due) by reason of Force Majeure shall give notice and the full
particulars of such Force Majeure to the other Party in writing or by
telephone as soon as reasonably possible after the occurrence of the
cause relied upon. Telephone notices given pursuant to this article
shall be confirmed in writing as soon as reasonably possible and shall
specifically state full particulars of the Force Majeure, the time and
date when the Force Majeure occurred and when the Force Majeure is
reasonably expected to cease. The Party affected shall exercise due
diligence to remove such disability with reasonable dispatch, but shall
not be required to accede or agree to any provision not satisfactory to
it in order to settle and terminate a strike or other labor disturbance.
Article 17. Default
17.1 Default.
17.1.1 General. No Default shall exist where such failure to discharge an
obligation (other than the payment of money) is the result of Force
Majeure as defined in this Agreement or the result of an act of
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omission of the other Party. Upon a Breach, the non-breaching Party
shall give written notice of such Breach to the breaching Party. Except
as provided in Article 17.1.2, the breaching Party shall have thirty (30)
Calendar Days from receipt of the Default notice within which to cure
such Breach; provided however, if such Breach is not capable of cure
within thirty (30) Calendar Days, the breaching Party shall commence
such cure within thirty (30) Calendar Days after notice and
continuously and diligently complete such cure within ninety (90)
Calendar Days from receipt of the Default notice; and, if cured within
such time, the Breach specified in such notice shall cease to exist.

17.1.2 Right to Terminate. If a Breach is not cured as provided in this
article, or if a Breach is not capable of being cured within the period
provided for herein, the non-breaching Party shall have the right to
declare a Default and terminate this Agreement by written notice at any
time until cure occurs, and be relieved of any further obligation
hereunder and, whether or not that Party terminates this Agreement, to
recover from the breaching Party all amounts due hereunder, plus all
other damages and remedies to which it is entitled at law or in equity.
The provisions of this article will survive termination of this
Agreement.
Article 18. Indemnity, Consequential Damages and Insurance
18.1 Indemnity. The Parties shall at all times indemnify, defend, and hold the other
Party harmless from, any and all damages, losses, claims, including claims and
actions relating to injury to or death of any person or damage to property,
demand, suits, recoveries, costs and expenses, court costs, attorney fees, and all
other obligations by or to third parties, arising out of or resulting from the other
Party's action or inactions of its obligations under this Agreement on behalf of the
Indemnifying Party, except in cases of gross negligence or intentional
wrongdoing by the Indemnified Party.

18.1.1 Indemnified Person. If an Indemnified Person is entitled to
indemnification under this Article 18 as a result of a claim by a third
party, and the Indemnifying Party fails, after notice and reasonable
opportunity to proceed under Article 18.1, to assume the defense of
such claim, such Indemnified Person may at the expense of the
Indemnifying Party contest, settle or consent to the entry of any
judgment with respect to, or pay in full, such claim.

18.1.2 Indemnifying Party. If an Indemnifying Party is obligated to
indemnify and hold any Indemnified Person harmless under this
Article 18, the amount owing to the Indemnified Person shall be the
amount of such Indemnified Person's actual Loss, net of any insurance
or other recovery.
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18.1.3 Indemnity Procedures. Promptly after receipt by an Indemnified
Person of any claim or notice of the commencement of any action or
administrative or legal proceeding or investigation as to which the
indemnity provided for in Article 18.1 may apply, the Indemnified
Person shall notify the Indemnifying Party of such fact. Any failure of
or delay in such notification shall not affect a Party's indemnification
obligation- unless such failure or delay is materially prejudicial to the
Indemnifying Party.
The Indemnifying Party shall have the right to assume the defense
thereof with counsel designated by such Indemnifying Party and
reasonably satisfactory to the Indemnified Person. If the defendants in
any such action include one or more Indemnified Persons and the
Indemnifying Party and if the Indemnified Person reasonably
concludes that there may be legal defenses available to it and/or other
Indemnified Persons which are different from or additional to those
available to the Indemnifying Party, the Indemnified Person shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on its own behalf.
In such instances, the Indemnifying Party shall only be required to pay
the fees and expenses of one additional attorney to represent an
Indemnified Person or Indemnified Persons having such differing or
additional legal defenses.
The Indemnified Person shall be entitled, at its expense, to participate
in any such action, suit or proceeding, the defense of which has been
assumed by the Indemnifying Party. Notwithstanding the foregoing,
the Indemnifying Party (1) shall not be entitled to assume and control
the defense of any such action, suit or proceedings if and to the extent
that, in the opinion of the Indemnified Person and its counsel, such
action, suit or proceeding involves the potential imposition of criminal
liability on the Indemnified Person, or there exists a conflict or
adversity of interest between the Indemnified Person and the
Indemnifying Party, in such event the Indemnifying Party shall pay the
reasonable expenses of the Indemnified Person, and (ii) shall not settle
or consent to the entry of any judgment in any action, suit or
proceeding without the consent of the Indemnified Person, which shall
not be reasonably withheld, conditioned or delayed.
18.2 Consequential Damages. Other than the Liquidated Damages heretofore
described, in no event shall either Party be liable under any provision of this
Agreement for any losses, damages, costs or expenses for any special, indirect,
incidental, consequential, or punitive damages, including but not limited to loss of
profit or revenue, loss of the use of equipment, cost of capital, cost of temporary
equipment or services, whether based in whole or in part in contract, in tort,
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including negligence, strict liability, or any other theory of liability; provided,
however, that damages for which a Party may be liable to the other Party under
another agreement will not be considered to be special, indirect, incidental, or
consequential damages hereunder.
18.3 Insurance. Each party shall, at its own expense, maintain in force throughout the
period of this Agreement, and until released by the other Party, the following
minimum insurance coverages, with insurers authorized to do business in the state
where the Point of Interconnection is located:
18.3.1 Employers' Liability and Workers' Compensation Insurance providing
statutory benefits in accordance with the laws and regulations of the
state in which the Point of Interconnection is located.
18.3.2 Commercial General Liability Insurance including premises and
operations, personal injury, broad form property damage, broad form
blanket contractual liability coverage (including coverage for the
contractual indemnification) products and completed operations
coverage, coverage for explosion, collapse and underground hazards,
independent contractors coverage, coverage for pollution to the extent
normally available and punitive damages to the extent normally
available and a cross liability endorsement, with minimum limits of
One Million Dollars ($1,000,000) per occurrence/One Million Dollars
($1,000,000) aggregate combined single limit for personal injury,
bodily injury, including death and property damage.
18.3.3 Comprehensive Automobile Liability Insurance for coverage of owned
and non-owned and hired vehicles, trailers or semi-trailers designed
for travel on public roads, with a minimum, combined single limit of
One Million Dollars ($1,000,000) per occurrence for bodily injury,
including death, and property damage.
18.3.4 Excess Public Liability Insurance over and above the Employers'
Liability Commercial General Liability and Comprehensive
Automobile Liability Insurance coverage, with a minimum combined
single limit of Ten Million Dollars ($10,000,000) per occurrence/Ten
Million Dollars ($10,000,000) aggregate.
18.3.5 The Commercial General Liability Insurance, Comprehensive
Automobile Insurance and Excess Public Liability Insurance policies
shall name the other Party, its parent, associated and Affiliate
companies and their respective directors, officers, agents, servants and
employees ("Other Party Group") as additional insured. All policies
shall contain provisions whereby the insurers waive all rights of
subrogation in accordance with the provisions of this Agreement
against the Other Party Group and provide thirty (30) Calendar Days
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advance written notice to the Other Party Group prior to anniversary
date of cancellation or any material change in coverage or condition.

18.3.6 The Commercial General Liability Insurance, Comprehensive
Automobile Liability Insurance and Excess Public Liability Insurance
policies shall contain provisions that specify that the policies are
primary and shall apply to such extent without consideration for other
policies separately carried and shall state that each insured is provided
coverage as though a separate policy had been issued to each, except
the insurer's liability shall not be increased beyond the amount for
which the insurer would have been liable had only one insured been
covered. Each Party shall be responsible for its respective deductibles
or retentions.

18.3.7 The Commercial General Liability Insurance, Comprehensive
Automobile Liability Insurance and Excess Public Liability Insurance
policies, if written on a Claims First Made Basis, shall be maintained
in full force and effect for two (2) years after termination of this
Agreement, which coverage may be in the form of tail coverage or
extended reporting period coverage if agreed by the Parties.

18.3.8 The requirements contained herein as to the types and limits of all
insurance to be maintained by the Parties are not intended to and shall
not in any manner, limit or qualify the liabilities and obligations
assumed by the Parties under this Agreement.

18.3.9 Within ten (10) days following execution of this Agreement, and as
soon as practicable after the end of each fiscal year or at the renewal of
the insurance policy and in any event within ninety (90) days
thereafter, each Party shall provide certification of all insurance
required in this Agreement, executed by each insurer or by an
authorized representative of each insurer.
18.3. 10 Notwithstanding the foregoing, each Party may self-insure to meet the
minimum insurance requirements of Articles 18.3.2 through 18.3.8 to
the extent it maintains a self-insurance program; provided that, such
Party's senior secured debt is rated at investment grade or better by
Standard & Poor's or Moody's and that its self-insurance program
meets the minimum insurance requirements of Articles 18.3.2 through
18.3.8. For any period of time that a Party's senior secured debt is
unrated by Standard & Poor's or Moody's or is rated at less than
investment grade by Standard & Poor's or Moody's, such Party shall
comply with the insurance requirements applicable to it under Articles
18.3.2 through 18.3.9. In the event that a Party is permitted to self-
insure pursuant to this article, it shall notify the other Party that it
meets the requirements to self-insure and that its self-insurance
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program meets the minimum insurance requirements in a manner
consistent with that specified in Article 18.3.9.
18.3.11 The Parties agree to report to each other in writing as soon as practical
all accidents or occurrences resulting in injuries to any person,
including death, and any property damage arising out of this
Agreement.
Article 19. Assignment
19.1 Assignment. This Agreement may be assigned by either Party only with the
written consent of the other; provided that either Party may assign this Agreement
without the consent of the other Party to any Affiliate of the assigning Party with
an equal or greater credit rating and with the legal authority and operational
ability to satisfy the obligations of the assigning Party under this Agreement; and
provided further that Interconnection Customer shall have the right to assign this
Agreement, without the consent of Transmission Provider, for collateral security
purposes to aid in providing financing for the Large Generating Facility, provided
that Interconnection Customer will promptly notify Transmission Provider of any
such assignment. Any financing arrangement entered into by Interconnection
Customer pursuant to this article will provide that prior to or upon the exercise of
the secured party's, trustee's or mortgagee's assignment rights pursuant to said
arrangement, the secured creditor, the trustee or mortgagee will notify
Transmission Provider of the date and particulars of any such exercise of
assignment right(s), including providing the Transmission Provider with proof
that it meets the requirements of Article 18.3. Any attempted assignment that
violates this article is void and ineffective. Any assignment under this Agreement
shall not relieve a Party of its obligations, nor shall a Party's obligations be
enlarged, in whole or in part, by reason thereof. Where required, consent to
assignment will not be unreasonably withheld, conditioned or delayed.
Article 20. Severability
20.1 Severability. If any provision in this Agreement is finally determined to be
invalid void or unenforceable by any court or other Governmental Authority
having jurisdiction, such determination shall not invalidate, void or make
unenforceable any other provision, agreement or covenant of this Agreement.
Article 21. Comparability
21.1 Comparability. The Parties will comply with all applicable comparability and
code of conduct laws, rules and regulations, as amended from time to time.
Article 22. Confidentiality
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22.1 Confidentiality. Confidential Information shall include, without limitation, all
information relating to a Party's technology, research and development, business
affairs, and pricing, and any information supplied by either of the Parties to the
other prior to the execution of this Agreement.
Information is Confidential Information only if it is clearly designated or marked
in writing as confidential on the face of the document, or, if the information is
conveyed orally or by inspection, if the Party providing the information orally
informs the Party receiving the information that the information is confidential.
If requested by either Party, the other Party shall provide in writing, the basis for
asserting that the information referred to in this Article 22 warrants confidential
treatment, and the requesting Party may disclose such writing to the appropriate
Governmental Authority. Each Party shall be responsible for the costs associated
with affording confidential treatment to its information.

22.1.1 Term. During the term of this Agreement, and for a period of three
(3) years after the expiration or termination of this Agreement, except
as otherwise provided in this Article 22, each Party shall hold in
confidence and shall not disclose to any person Confidential
Information.

22.1.2 Scope. Confidential Information shall not include information that the
receiving Party can demonstrate: (1) is generally available to the
public other than as a result of a disclosure by the receiving Party; (2)
was in the lawful possession of the receiving Party on a non-
confidential basis before receiving it from the disclosing Party; (3) was
supplied to the receiving Party without restriction by a third party,
who, to the knowledge of the receiving Party after due inquiry, was
under no obligation to the disclosing Party to keep such information
confidential; (4) was independently developed by the receiving Party
without reference to Confidential Information of the disclosing Party;
(5) is, or becomes, publicly known, through no wrongful act or
omission of the receiving Party or Breach of this Agreement; or (6) is
required, in accordance with Article 22.1.7 of this Agreement, Order
of Disclosure, to be disclosed by any Governmental Authority or is
otherwise required to be disclosed by law or subpoena, or is necessary
in any legal proceeding establishing rights and obligations under this
Agreement. Information designated as Confidential Information will
no longer be deemed confidential if the Party that designated the
information as confidential notifies the other Party that it no longer is
confidential.

22.1.3 Release of Confidential Information. Neither Party shall release or
disclose Confidential Information to any other person, except to its
Affiliates (limited by the Standards of Conduct requirements),
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subcontractors, employees, consultants, or to parties who may be or
considering providing financing to or equity participation with
Interconnection Customer, or to potential purchasers or assignees of
Interconnection Customer, on a need-to-know basis in connection with
this Agreement, unless such person has first been advised of the
confidentiality provisions of this Article 22 and has agreed to comply
with such provisions. Notwithstanding the- foregoing, a Party
providing Confidential Information to any person shall remain
primarily responsible for any release of Confidential Information in
contravention of this Article 22.

22.1.4 Rights. Each Party retains all rights, title, and interest in the
Confidential Information that each Party discloses to the other Party.
The disclosure by each Party to the other Party of Confidential
Information shall not be deemed a waiver by either Party or any other
person or entity of the right to protect the Confidential Information
from public disclosure.

22.1.5 No Warranties. By providing Confidential Information, neither Party
makes any warranties or representations as to its accuracy or
completeness. In addition, by supplying Confidential Information,
neither Party obligates itself to provide any particular information or
Confidential Information to the other Party nor to enter into any
further agreements or proceed with any other relationship or joint
venture.

22.1.6 Standard of Care. Each Party shall use at least the same standard of
care to protect Confidential Information it receives as it uses to protect
its own Confidential Information from unauthorized disclosure,
publication or dissemination. Each Party may use Confidential
Information- solely to fulfill its obligations to the other Party under this
Agreement or its regulatory requirements.

22.1.7 Order of Disclosure. If a court or a Government Authority or entity
with the right, power, and apparent authority to do so requests or
requires either Party, by subpoena, oral deposition, interrogatories,
requests for production of documents, administrative order, or
otherwise, to disclose Confidential Information, that Party shall
provide the other Party with prompt notice of such request(s) or
requirement(s) so that the other Party may seek an appropriate
protective order or waive compliance with the terms of this
Agreement. Notwithstanding the absence of a protective order or
waiver, the Party may disclose such Confidential Information which,
in the opinion of its counsel, the Party is legally compelled to disclose.
Each Party will use Reasonable Efforts to obtain reliable assurance
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that confidential treatment will be accorded any Confidential
Information so furnished.

22.1.8 Termination of Agreement. Upon termination of this Agreement for
any reason, each Party shall, within ten (10) Calendar Days of receipt
of a written request from the other Party, use Reasonable Efforts to
destroy, erase, or delete (with such destruction, erasure, and deletion
certified in writing to the other Party) or return to the other Party,
without retaining copies thereof, any and all written or electronic
Confidential Information received from the other Party.

22.1.9 Remedies. The Parties agree that monetary damages would be
inadequate to compensate a Party for the other Party's Breach of its
obligations under this Article 22. Each Party accordingly agrees that
the other Party shall be entitled to equitable relief, by way of
injunction or otherwise, if the first Party Breaches or threatens to
Breach its obligations under this Article 22, which equitable relief
shall be granted without bond or proof of damages, and the receiving
Party shall not plead in defense that there would be an adequate
remedy at law. Such remedy shall not be deemed an exclusive remedy
for the Breach of this Article 22, but shall be in addition to all other
remedies available at law or in equity. The Parties further
acknowledge and agree that the covenants contained herein are
necessary for the protection of legitimate business interests and are
reasonable in scope. No Party, however, shall be liable for indirect,
incidental, or consequential or punitive damages of any nature or kind
resulting from or arising in connection with this Article 22.
22.1.10 Disclosure to FERC, its Staff, or a State. Notwithstanding anything
in this Article 22 to the contrary, and pursuant to 18 C.F.R § lb.20, if
FERC or its staff, during the course of an investigation or -otherwise,
requests information from one of the Parties that is otherwise required
to be maintained in confidence pursuant to this Agreement, the Party
shall provide the requested information to FERC or its staff, within the
time provided for in the request for information. In providing the
information to FERC or its staff, the Party must, consistent with 18
C.F.R § 388.112, request that the information be treated as confidential
and non-public by FERC and its staff and that the information be
withheld from public disclosure. Parties are prohibited from notifying
the other Party to this Agreement prior to the release of the
Confidential Information to FERC or its staff. The Party shall notify
the other Party to this Agreement when it is notified by FERC or its
staff that a request to release Confidential Information has been
received by FERC, at which time either of the Parties may respond
before such information would be made public, pursuant to 18 C.F.R §
388.112. Requests from a state regulatory body conducting a
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confidential investigation shall be treated in a similar manner if
consistent with the applicable state rules and regulations.
22.1.11 Subject to the exception in Article 22.1.10, any information that a
Party claims is competitively sensitive, commercial or financial
information under this Agreement ("Confidential Information") shall
not be disclosed by the other Party to any person not employed or
retained by the other Party, except to the extent disclosure is (i)
required by law; (ii) reasonably deemed by the disclosing Party to be
required to be disclosed in connection with a dispute between or
among the Parties, or the defense of litigation or dispute; (iii)
otherwise permitted by consent of the other Party, such consent not to
be unreasonably withheld; or (iv) necessary to fulfill its obligations
under this Agreement or as a transmission service provider or a
Control Area operator including disclosing the Confidential
Information to an RIO or ISO or to a regional or national reliability
organization. The Party asserting confidentiality shall notify the other
Party in writing of the information it claims is confidential. Prior to
any disclosures of the other Party's Confidential Information under this
subparagraph, or if any third party or Governmental Authority makes
any request or demand for any of the information described in this
subparagraph, the disclosing Party agrees to promptly notify the other
Party in writing and agrees to assert confidentiality and cooperate with
the other Party in seeking to protect the Confidential Information from
public disclosure by confidentiality agreement, protective order or
other reasonable measures.
Article 23. Environmental Releases
23.1 Each Party shall notify the other Party, first orally and then in writing, of the
release of any Hazardous Substances, any asbestos or lead abatement activities, or
any type of remediation activities related to the Large Generating Facility or the
Interconnection Facilities, each of which may reasonably be expected to affect the
other Party. The notifying Party shall: (i) provide the notice as soon as
practicable, provided such Party makes a good faith effort to provide the notice no
later than twenty-four hours after such Party becomes aware of the occurrence;
and (ii) promptly furnish to the other Party copies of any publicly available
reports filed with any Governmental Authorities addressing such events.
Article 24. Information Requirements
24.1 Information Acquisition. Transmission Provider and Interconnection Customer
shall submit specific information regarding the electrical characteristics of their
respective facilities to each other as described below and in accordance with
Applicable Reliability Standards.
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24.2 Information Submission by Transmission Provider. Upon request by
Interconnection Customer, Transmission Provider shall provide Transmission
System information necessary to allow Interconnection Customer to select
equipment and meet any system protection and stability requirements.
24.3 Information Submission by Interconnection Customer. Upon request by
Transmission Provider, Interconnection Customer shall provide the most current
Large Generating Facility design or expected performance data. Information
submitted for stability models shall be compatible with Transmission Provider
standard models. If there is no compatible model, Interconnection Customer, at
Interconnection Customer's expense, shall work with a consultant mutually
agreed to by the Parties to develop and supply a standard model and associated
information.
24.4 Information Supplementation. The Interconnection Customer shall conduct
tests on the Large Generating Facility as required by Good Utility Practice such as
an open circuit "step voltage test on the Large Generating Facility to verify
proper operation of the Large Generating Facility's automatic voltage regulator.
Unless otherwise agreed, the test conditions shall include: (1) Large Generating
Facility at synchronous speed; (2) automatic voltage regulator on and in voltage
control mode; and (3) a five percent change in Large Generating Facility terminal
voltage initiated by a change in the voltage regulators reference voltage.
Interconnection Customer shall provide validated test recordings showing the
responses of Large Generating Facility terminal and field voltages. In the event
that direct recordings of these voltages is impractical, recordings of other voltages
or currents that mirror the response of the Large Generating Facility's terminal or
field voltage are acceptable if information necessary to translate these alternate
quantities to actual Large Generating Facility terminal or field voltages is
provided. Large Generating Facility testing shall be conducted and results
provided to Transmission Provider for each individual generating unit in a station.
Subsequent to the Operation Date, Interconnection Customer shall provide
Transmission Provider any information changes due to equipment replacement,
repair, or adjustment. Transmission Provider shall provide Interconnection
Customer any information changes due to equipment replacement, repair or
adjustment in the directly connected substation or any adjacent Transmission
Provider-owned substation that may affect Interconnection Customer's
Interconnection Facilities equipment ratings, protection or operating
requirements. The Parties shall provide such information no later than thirty (30)
Calendar Days after the date of the equipment replacement, repair or adjustment.
Article 25. Information Access and Audit Rights
25.1 Information Access. Each Party (the "disclosing Party") shall make available to
the other Party information that is in the possession of the disclosing Party and is
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necessary in order for the other Party to: (i) verify the costs incurred by the
disclosing Party for which the other Party is responsible under this Agreement;
and (ii) carry out its obligations and responsibilities under this Agreement. The
Parties shall not use such information for purposes other than those set forth in
this Article 25.1 and to enforce their rights under this Agreement.
25.2 Reporting of Non-Force Majeure Events. Each Party (the "notifying Party")
shall notify the other Party when the notifying Party becomes aware of its
inability to comply with the provisions of this Agreement for a reason other than a
Force Majeure event. The Parties agree to cooperate with each other and provide
necessary information regarding such inability to comply, including the date,
duration, reason for the inability to comply, and corrective actions taken or
planned to be taken with respect to such inability to comply. Notwithstanding the
foregoing, notification, cooperation or information provided under this article
shall not entitle the Party receiving such notification to allege a cause for
anticipatory breach of this Agreement.
25.3 Audit Rights. Subject to the requirements of confidentiality under Article 22 of
this Agreement, each Party shall have the right, during normal business hours, and
upon prior reasonable notice to the other Party, to audit at its own expense the
other Party's accounts and records pertaining to either Party's performance or
either Party's satisfaction of obligations under this Agreement. Such audit rights
shall include audits of the other Party's costs, calculation of invoiced amounts,
Transmission Provider's efforts to allocate responsibility for the provision of
reactive support to the Transmission System, Transmission Provider's efforts to
allocate responsibility for interruption or reduction of generation on the
Transmission System, and each Party's actions in an Emergency Condition. Any
audit authorized by this article shall be performed at the offices where such
accounts and records are maintained and shall be limited to those portions of such
accounts and records that relate to each Party's performance and satisfaction of
obligations under this Agreement. Each Party shall keep such accounts and
records for a period equivalent to the audit rights periods described in Article
25.4.
25.4 Audit Rights Periods.

25.4.1 Audit Rights Period for Construction-Related Accounts and
Records. Accounts and records related to the design, engineering,
procurement, and construction of Transmission Provider's
Interconnection Facilities and Network Upgrades shall be subject to
audit for a period of twenty-four months following Transmission
Provider's issuance of a final invoice in accordance with Article 12.2.

25.4.2 Audit Rights Period for All Other Accounts and Records.
Accounts and records related to either Party's performance or
satisfaction of all obligations under this Agreement other than those
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described in Article 25.4.1 shall be subject to audit as follows: (i) for
an audit relating to cost obligations, the applicable audit rights period
shall be twenty-four months after the auditing Party's receipt of an
invoice giving rise to such cost obligations; and (ii) for an audit
relating to all other obligations, the applicable audit rights period shall
be twenty-four months after the event for which the audit is sought.
25.5 Audit Results. If an audit by a Party determines that an overpayment or an
underpayment has occurred, a notice of such overpayment or underpayment shall
be given to the other Party together with those records from the audit which
support such determination.
Article 26. Subcontractors
26.1 General. Nothing in this Agreement shall prevent a Party from utilizing the
services of any subcontractor as it deems appropriate to perform its obligations
under this Agreement; provided, however, that each Party shall require its
subcontractors to comply with all applicable terms and conditions of this
Agreement in providing such services and each Party shall remain primarily liable
to the other Party for the performance of such subcontractor.
26.2 Responsibility of Principal. The creation of any subcontract relationship shall
not relieve the hiring Party of any of its obligations under this Agreement. The
hiring Party shall be fully responsible to the other Party for the acts or omissions
of any subcontractor the hiring Party hires as if no subcontract had been made;
provided, however, that in no event shall Transmission Provider be liable for the
actions or inactions of Interconnection Customer or its subcontractors with respect
to obligations of Interconnection Customer under Article 5 of this Agreement.
Any applicable obligation imposed by this Agreement upon the hiring Party shall
be equally binding upon, and shall be construed as having application to, any
subcontractor of such Party.
26.3 No Limitation by Insurance. The obligations under this Article 26 will not be
limited in any way by any limitation of subcontractor's insurance.
Article 27. Disputes
27.1 Submission. In the event either Party has a dispute, or asserts a claim, that arises
out of or in connection with this Agreement or its performance, such Party (the
"disputing Party") shall provide the other Party with written notice of the dispute
or claim ("Notice of Dispute"). Such dispute or claim shall be referred to a
designated senior representative of each Party for resolution on an informal basis
as promptly as practicable after receipt of the Notice of Dispute by the other
Party. In the event the designated representatives are unable to resolve the claim
or dispute through unassisted or assisted negotiations within thirty (30) Calendar
Days of the other Party's receipt of the Notice of Dispute, such claim or dispute
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may, upon mutual agreement of the Parties, be submitted to arbitration and
resolved in accordance with the arbitration procedures set forth below. In the
event the Parties do not agree to submit such claim or dispute to arbitration, each
Party may exercise whatever rights and remedies it may have in equity or at law
consistent with the terms of this Agreement.
27.2 External Arbitration Procedures. Any arbitration initiated under this
Agreement shall be conducted before a single neutral arbitrator appointed by the
Parties. If the Parties fail to agree upon a single arbitrator within ten (10)
Calendar Days of the submission of the dispute to arbitration, each Party shall
choose one arbitrator who shall sit on a three-member arbitration panel. The two
arbitrators so chosen shall within twenty (20) Calendar Days select a third
arbitrator to chair the arbitration panel. In either case, the arbitrators shall be
knowledgeable in electric utility matters, including electric transmission and bulk
power issues, and shall not have any current or past substantial business or
financial relationships with any party to the arbitration (except prior arbitration).
The arbitrator(s) shall provide each of the Parties an opportunity to be heard and,
except as otherwise provided herein, shall conduct the arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
("Arbitration Rules") and any applicable FERC regulations or RTO rules;
provided, however, in the event of a conflict between the Arbitration Rules and
the terms of this Article 27, the terms of this Article 27 shall prevail.
27.3 Arbitration Decisions. Unless otherwise agreed by the Parties, the arbitrator(s)
shall render a decision within ninety (90) Calendar Days of appointment and shall
notify the Parties in writing of such decision and the reasons therefor. The
arbitrator(s) shall be authorized only to interpret and apply the provisions of this
Agreement and shall have no power to modify or change any provision of this
Agreement in any manner. The decision of the arbitrator(s) shall be final and
binding upon the Parties, and judgment on the award may be entered in any court
having jurisdiction. The decision of the arbitrator(s) may be appealed solely on
the grounds that the conduct of the arbitrator(s), or the decision itself, violated the
standards set forth in the Federal Arbitration Act or the Administrative Dispute
Resolution Act. The final decision of the arbitrator must also be filed with FERC
if it affects jurisdictional rates, terms and conditions of service, Interconnection
Facilities, or Network Upgrades.
27.4 Costs. Each Party shall be responsible for its own costs incurred during the
arbitration process and for the following costs, if applicable: (1) the cost of the
arbitrator chosen by the Party to sit on the three member panel and one half of the
cost of the third arbitrator chosen; or (2) one half the cost of the single arbitrator
jointly chosen by the Parties.
Article 28. Representations, Warranties, and Covenants
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28.1 General. Each Party makes the following representations, warranties and
covenants:

28.1.1 Good Standing. Such Party is duly organized, validly existing and in
good standing under the laws of the state in which it is organized,
formed, or incorporated, as applicable; that it is qualified to do
business in the state or states in which the Large Generating Facility,
Interconnection Facilities and Network Upgrades owned by such
Party, as applicable, are located; and that it has the corporate power
and authority to own its properties, to carry on its business as now
being conducted and to enter into this Agreement and carry out the
transactions contemplated hereby and perform and carry out all
covenants and obligations on its part to be performed under and
pursuant to this Agreement.

28.1.2 Authority. Such Party has the right, power and authority to enter into
this Agreement, to become a Party hereto and to perform its
obligations hereunder. This Agreement is a legal, valid and binding
obligation of such Party, enforceable against such Party in accordance
with its terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by general equitable principles
(regardless of whether enforceability is sought in a proceeding in
equity or at law).

28.1.3 No Conflict. The execution, delivery and performance of this
Agreement does not violate or conflict with the organizational or
formation documents, or bylaws or operating agreement, of such Party,
or any judgment, license, permit, order, material agreement or
instrument applicable to or binding upon such Party or any of its
assets.

28.1.4 Consent and Approval. Such Party has sought or obtained, or, in
accordance with this Agreement will seek or obtain, each consent,
approval, authorization, order, or acceptance by any Governmental
Authority in connection with the execution, delivery and performance
of this Agreement, and it will provide to any Governmental Authority
notice of any actions under this Agreement that are required by
Applicable Laws and Regulations.
Article 29. Joint Operating Committee
29.1 Joint Operating Committee. Except in the case of ISOs and RTOs,
Transmission Provider shall constitute a Joint Operating Committee to coordinate
operating and technical considerations of Interconnection Service.
Interconnection Customer and Transmission Provider shall each appoint one
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representative and one alternate to the Joint Operating Committee. Each
Interconnection Customer shall notify Transmission Provider of its appointment
in writing. Such appointments may be changed at any time by similar notice.
The Joint Operating Committee shall meet as necessary to carry out the duties set
forth herein. The Joint Operating Committee shall hold a meeting at the request
of either Party, at a time and place agreed upon by the representatives. The Joint
Operating Committee shall perform all of its duties consistent with the provisions
of this Agreement. Each Party shall cooperate in providing to the Joint Operating
Committee all information required in the performance of the Joint Operating
Committee's duties. All decisions and agreements, if any, made by the Joint
Operating Committee, shall be evidenced in writing. The duties of the Joint
Operating Committee shall include the following:
29.1.1 Establish data requirements and operating record requirements.
29.1.2 Review the requirements, standards, and procedures for data
acquisition equipment, protective equipment, and any other equipment
or software.
29.1.3 Annually review the one (1) year forecast of maintenance and planned
outage schedules of Transmission Provider's and Interconnection
Customer's facilities at the Point of Interconnection.
29.1.4 Coordinate the scheduling of maintenance and planned outages on the
Interconnection Facilities, the Large Generating Facility and other
facilities that impact the normal operation of the interconnection of the
Large Generating Facility to the Transmission System.
29.1.5 Ensure that information is being provided by each Party regarding
equipment availability.
29.1.6 Perform such other duties as may be conferred upon it by mutual
agreement of the Parties.
Article 30. Miscellaneous
30.1 Binding Effect. This Agreement and the rights and obligations hereof, shall be
binding upon and shall inure to the benefit of the successors and assigns of the
Parties hereto.
30.2 Conflicts. In the event of a conflict between the body of this Agreement and any
attachment, appendices or exhibits hereto, the terms and provisions of the body of
this Agreement shall prevail and be deemed the final intent of the Parties.
30.3 Rules of Interpretation. This Agreement, unless a clear contrary intention
appears, shall be construed and interpreted as follows: (1) the singular number
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includes the plural number and vice versa; (2) reference to any person includes
such person's successors and assigns but, in the case of a Party, only if such
successors and assigns are permitted by this Agreement, and reference to a person
in a particular capacity excludes such person in any other capacity or individually;
(3) reference to any agreement (including this Agreement), document, instrument
or tariff means such agreement, document, instrument, or tariff as amended or
modified and in effect from time to time in accordance with the terms thereof and,
if applicable, the terms hereof; (4) reference to any Applicable Laws and
Regulations means such Applicable Laws and Regulations as amended, modified,
codified, or reenacted, in whole or in part, and in effect from time to time,
including, if applicable, rules and regulations promulgated thereunder; (5) unless
expressly stated otherwise, reference to any Article, Section or Appendix means
such Article of this Agreement or such Appendix to this Agreement, or such
Section of the Tariff, as the case may be; (6) "hereunder", "hereof', "herein",
"hereto" and words of similar import shall be deemed references to this
Agreement as a whole and not to any particular Article or other provision hereof
or thereof (7) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such term;
and (8) relative to the determination of any period of time, "from" means "from
and including", "to" means "to but excluding" and "through" means "through and
including".
30.4 Entire Agreement. This Agreement, including all Appendices and Schedules
attached hereto, constitutes the entire agreement between the Parties with
reference to the subject matter hereof, and supersedes all prior and
contemporaneous understandings or agreements, oral or written, between the
Parties with respect to the subject matter of this Agreement. There are no other
agreements, representations, warranties, or covenants which constitute any part of
the consideration for, or any condition to, either Party's compliance with its
obligations under this Agreement.
30.5 No Third Party Beneficiaries. This Agreement is not intended to and does not
create rights, remedies, or benefits of any character whatsoever in favor of any
persons, corporations, associations, or entities other than the Parties, and the
obligations herein assumed are solely for the use and benefit of the Parties, their
successors in interest and, where permitted, their assigns.
30.6 Waiver. The failure of a Party to this Agreement to insist, on any occasion, upon
strict performance of any provision of this Agreement will not be considered a
waiver of any obligation, right, or duty of, or imposed upon, such Party.
Any waiver at any time by either Party of its rights with respect to this Agreement
shall not be deemed a continuing waiver or a waiver with respect to any other
failure to comply with any other obligation, right, duty of this Agreement.
Termination or Default of this Agreement for any reason by Interconnection
Customer shall not constitute a waiver of Interconnection Customer's legal rights
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to obtain an interconnection from Transmission Provider. Any waiver of this
Agreement shall, if requested, be provided in writing.
30.7 Headings. The descriptive headings of the various Articles of this Agreement
have been inserted for convenience of reference only and are of no significance in
the interpretation or construction of this Agreement.
30.8 Multiple Counterparts. This Agreement may be executed in two or more
counterparts, each of which is deemed an original but all constitute one and the
same instrument.
30.9 Amendment. The Parties may by mutual agreement amend this Agreement by a
written instrument duly executed by the Parties.
30.10 Modification by the Parties. The Parties may by mutual agreement amend the
Appendices to this Agreement by a written instrument duly executed by the
Parties. Such amendment shall become effective and a part of this Agreement
upon satisfaction of all Applicable Laws and Regulations.
30.11 Reservation of Rights. Transmission Provider shall have the right to make a
unilateral filing with FERC to modify this Agreement with respect to any rates,
terms and conditions, charges, classifications of service, rule or regulation under
section 205 or any other applicable provision of the Federal Power Act and
FERC's rules and regulations thereunder, and Interconnection Customer shall
have the right to make a unilateral filing with FERC to modify this Agreement
pursuant to section 206 or any other applicable provision of the Federal Power
Act and FERC's rules and regulations thereunder; provided that each Party shall
have the right to protest any such filing by the other Party and to participate fully
in any proceeding before FERC in which such modifications may be considered.
Nothing in this Agreement shall limit the rights of the Parties or of FERC under
sections 205 or 206 of the Federal Power Act and FERC's rules and regulations
thereunder, except to the extent that the Parties otherwise mutually agree as
provided herein.
30.12 No Partnership. This Agreement shall not be interpreted or construed to create
an association, joint venture, agency relationship, or partnership between the
Parties or to impose any partnership obligation or partnership liability upon either
Party. Neither Party shall have any right, power or authority to enter into any
agreement or undertaking for, or act on behalf of, or to act as or be an agent or
representative of, or to otherwise bind, the other Party.
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IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals, each of which shall constitute and be an original effective Agreement between the
Parties.
AVISTA CORPORATION
By:
Jeff Schiect
Title: Senior Manager, FERC Policy and Transmission Services
Date: Ac,z-,i_ , l 91 3
CLEARWATER PAPER CORPORATION
Danny G. J
Title: Senior Vice President
President, Pulp and Paper Division
Date:
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Appendix A
Interconnection Facilities and Network Upgrades
Interconnection Facilities:
(a) Interconnection Customer's Interconnection Facilities:
Existing Interconnection Customer-Owned and Maintained Interconnection
Facilities and installation work previously accomplished. Facilities are owned
and maintained at Interconnection Customer's expense.
Utility Tie No. 1 Supply Facilities: (Point of Interconnection No. 1 Detail)
34.5 kV Cable Terminations
34.5 kV Ring Bus I Utility Tie No. 1 Power Cable
Utility Tie No. I Protection Scheme (Bus Differential)
Utility Tie No. 2 Supply Facilities: (Point of Interconnection No. 2 Detail)
34.5 kV Cable Terminations
34.5 kV Ring Bus / Utility Tie No. 2 Power Cable
Utility Tie No. 2 Protection Scheme (Bus Differential)
Clearwater 34.5 kV Substation Ring Bus
All facilities needed to maintain transfer capability between generators
and Point of Interconnection.
Generator Facilities
GSU1
GSU I Protection
Generator 1 Circuit Breaker
Generator 1 Protection
GSU2
GSU 2 Protection
Generator 2 Circuit Breaker
Generator 2 Protection
GSU3
GSU 3 Protection
Generator 3 Circuit Breaker
Generator 3 Protection
GSU4
Page A-i
GSU 4 Protection
Generator 4 Circuit Breaker
Generator 4 Protection
Communication Facilities
SCADA System (Avista to Clearwater Communications)
Data Points List
• Generator 1 Meter Communications
(Watts, VAR, WH-InlOut, VARh-InIOut)
• Generator 2 Meter Communications
(Watts, VAR, WH-In/Out, VAIRh-In/Out)
• Generator 3 Meter Communications
(Watts, VAR, WH-InJOut VARh-lnIOut)
• Generator 4 Meter Communications
(Watts, VAR, WH-lnIOut, VARh-In/Out)
Data Point list is shared between the Transmission Provider and
Interconnection Customer
Generator Meters (when owned by Interconnection Customer)
Generator 1 Meter
Generator 2 Meter
Generator 3 Meter
Generator 4 Meter
Meters shall meet Avista standards for revenue class metering.
(b) Transmission Provider's Interconnection Facilities:
Existing Transmission Provider Owned and Maintained Interconnection Facilities,
and installation work previously accomplished. Facilities are owned and
maintained at Transmission Provider's expense.
Utility Tie No. 1 Facilities
115 kV Circuit Switcher with 115 kV Disconnect Switch
Transformer Protection
115 kV 50/67/83 MVA Transformer Utility Tie No. 1
115 kV Lightning Arresters
115 kV Transformer Oil Containment
Page A-2
Transformer Paralleling Module
Neutral Grounding Transformer & Resistor
34.5 kV Utility Tie No. 1 Circuit Breaker
34.5 kV Disconnect Switches
34.5 kV Metering Potential Transformers
34.5 kV Utility Tie No. 1 Interchange Metering Package
Utility Tie No. I Differential Relaying Package
34.5 kV Breaker Failure Relaying Package
34.5 kV Isolation Detection
34.5 kV Ring Bus / Utility Tie No. I Protection
Interconnection Point Bus bar
Utility Tie No. 2 Facilities
115 kV Circuit Switcher with 115 kV Disconnect Switch
Transformer Protection
115 kV 50/67/83 MVA Transformer Utility Tie No. 2
115 kV Lightning Arresters
115 kV Transformer Oil Containment
Transformer Paralleling Module
Neutral Grounding Transformer & Resistor
34.5 kV Utility Tie No. 2 Circuit Breaker
34.5 kV Disconnect Switches
34.5 kV Metering Potential Transformers
34.5 kV Utility Tie No. 2 Interchange Metering Package
Utility Tie No. 2 Differential Relaying Package
34.5 kV Breaker Failure Relaying Package
34.5 kV Isolation Detection
34.5 kV Ring Bus / Utility Tie No. 2 Protection
Interconnection Point bus bar
Communications Facilities
Metering Translation System Microwave Channel to Spokane
SCADA Microwave channel to Spokane
Page A-3
SCADA System (Avista SCADA)
SCADA System (Avista to Clearwater Communications)
Data Points List
• Refer to Interconnection Customer's Interconnection Facilities for
shared data point list.
2.Network Upgrades:
None required
3.Estimated Costs:
Not applicable
4.Point of Interconnection (Point of Change of Ownership)
The two existing electrical interconnection points are located at the existing Clearwater
Substation. These points are between Interconnection Customer's 34.5 kV ring bus, and
the 34.5 kV load side disconnect switch associated with the 34.5 kV power circuit
breaker, each located on the load side of each of the two (2) 115/34.5 kV power
transformers, where Interconnection Customer's 34.5 kV cables connect to Transmission
Provider's 34.5 kV Utility Tie No. 1 and Utility Tie No. 2 aluminum pipe bus. For the
purposes of this Agreement, these two electrical interconnection points will continue to
be considered as the Point of Interconnection.
For purposes of the agreement the Point of Change of Ownership is the same as the Point
of Interconnection.
5.One-Line Diagram
A one-line diagram showing the Interconnection Customer's Generating Facility,
Interconnection Customer's Interconnection Facilities, Transmission Provider's
Interconnection Facilities, and Point of Interconnection is attached hereto.
6.Metering Diagram
Clearwater Paper sold the lumber mill owned and operated by Clearwater Forest
Industries to Idaho Forest Group (IFG). Avista is providing serve to IFG though a
temporary point of delivery until Avista upgrades its electrical facilities including
constructing a new substation to serve IFG.
Page A-4
• Present metering configuration with IFG served through Clearwater Paper's 34.5 kV
substation.
Simplified Metering Diagram
(with IFG load)
Utility Tie # 1 Utility Tie #2
Generation Generation Generation Generation
Unit #1 Unit #2 Unit #3 Unit #4
For the purposes of this Agreement, the Parties have agreed that Facility Service Power is
0 kW per operating generating unit. Interconnection Customer shall notify Transmission
Provider when substantial changes are made to the Facility that affects the amount of
Facility Service Power.
For the purposes of this Agreement, the Parties have agreed that Losses are (}kW.
"Power Generated" (G 1 , G2, G3, & G4). The electric power measured at each operating
unit expressed in kW.
G. = G 1 + G2 + G3 + G4 - (OkW*(the number of operating generating units)) -
(Losses)
"IFG Active Power" (P0). The total active power delivered to Idaho Forest Group,
measured at the points of delivery expressed in kW.
PIFG = PIFG (kW) Delivered to Idaho Forest Group
"IFG Reactive Power" (QWG). The total reactive power delivered to Idaho Forest Group,
measured at the two points of delivery expressed in WAR.
Page A-S
QIFG = QIFG (WAR) Delivered to Idaho Forest Group
"Utility Tie Active Power" (P). The total active power delivered to Interconnection
Customer, measured at each of the two (2) Points of Delivery expressed in W.
P = Pun + P - P1FG (kW) Delivered to Interconnection Customer
"Utility Tie Reactive Power" (Q). The total reactive power delivered to Interconnection
Customer, measured at each of the two (2) Points of Delivery expressed in WAR.
Qi + Q - QJ (WAR) Delivered to Interconnection Customer
• Metering configuration without IFG served through Clearwater Paper's 34.5 kV
substation.
Simplified Metering Diagram
Utility Tie # I Utility Tie #2
2.
Generation Generation Generation Generation
Unit #1 Unit #2 Unit #3 Unit #4
For the purposes of this Agreement, the Parties have agreed that Facility Service Power is
0 kW per operating generating unit. Interconnection Customer shall notify Transmission
Provider when substantial changes are made to the Facility that affects the amount of
Facility Service Power.
Page A-6
For the purposes of this Agreement, the Parties have agreed that Losses are 0 kW.
"Power Generated" (G, 02, G3, & G4). The electric power measured at each operating
unit expressed in kW.
G1 + G2 + G3 + G4 - (OkW*(the number of operating generating units)) -
(Losses)
"Utility Tie Active Power" (P). The total active power delivered to Interconnection
Customer, measured at each of the two (2) Points of Delivery expressed in kW.
Put = + P (kW) Delivered to Interconnection Customer
"Utility Tie Reactive Power" (Q). The total reactive power delivered to Interconnection
Customer, measured at each of the two (2) Points of Delivery expressed in WAR.
Qt = Qi + Q (WAR) Delivered to Interconnection Customer
Page A-7 I
Appendix B
Milestones
As of the Effective Date and pursuant to the GIA, all Interconnection Facilities and Network
Upgrades necessary to facilitate the interconnection and operation of the Lewiston Plant are in
service.
Page B-1 1
Appendix C
Interconnection Details
Large Generating Facility Details
• Project Name: Clearwater Paper
• Nameplate Size (Rating) and Generator Type:
Interconnection Customer owns and operates four (4) Qualified Facilities at its
Lewiston, Idaho facility. For the purposes of this agreement all four (4) facilities are
considered as one collective entity.
1) Unit No. I Turbine Generator (1950); Description - QF83-144-000
(a)The unit No. 1 turbine, General Electric serial number 83530, is a nine stage
3600 RPM, 600 PSIG steam turbine
(b)The unit No. I generator, General electric serial number 6784689, is
nameplate rated at 12,500 kVA
(c)GE SCR Excitation System (1984)
Exciter Model # 3S7931SA520, Cat. No. 0503X0700Z01, IC 7931
ML Number M5030700
Equipment Inst. Book: GEK-8381
(d)Turbine Governor Information
Ball Bearing Type, Position Cut-Off— Fluid Damping
GE Company Instructions GEI-29500
Pilot Valve and Drive (1953) GEI-46 103
2) Unit No. 2 Turbine Generator (1977); Description - QF83-142-000
(a)The unit No. 2 turbine, General Electric serial number 197741, is a six stage,
3600 RPM, 600 PSIG steam turbine
(b)The unit No. 2 generator, General Electric serial number 316X1 88, is
nameplate rated at 11,188 kVA
(c)GE Static Exciter (ED-43969), SCT / PPT
3S793 1EA520G7; Elem. 44C309642
(d)Pressure Governor GEI-87044D
Speed Governor GEK-27005A
Page C-I
3) Unit No. 3 Turbine Generator (1981); Description - QF83-143-000
(a)The unit No. 3 turbine, General Electric serial number 197836, is a twelve
stage, 3600 RPM 1250 PSIG steam turbine
(b)The unit No. 3 generator, General Electric serial number 316X374, is
nameplate rated at 41,600 kVA @ 30 PSIG H2
(c)Excitation: Shaft Driven Commutation GE-M-134 Excitation System - SCT /
PPT
3S7931EA533G4; Diag. 206134889
(d)Governor - Eleetrohydraulic Control (EHC)
GEK-8 1497 (1979) Mark 1113
4) Unit No. 4 Turbine Generator (1990); Description - QF92-67-000
(a)The unit No. 4 turbine, ABB order number MB275226, is a 3600 RPM steam
turbine. DEEK S25-S100/1,144-200; ABB Order-NR: 1-411 868
(b)The unit No. 4 generator, ABB serial number HM3005 16, is nameplate rated
at 66,916 kVA. Generator Type WY 1 6L-O54LLT
(c)Brushless Exciter ABB Type WBT 74/508/30, Serial No. HM 300 603
Pilot Exciter Type: WPE35-9-4R20, Serial No. HM300 604
(d)Governor: Pro Control P13; Order No. 1-411868; Dwg. HTDC 307 794
The Generation Facility shall comply with NERC, WECC and NWPP policies and
standards as they apply specifically to steam/turbine cogeneration units running
primarily under pressure control. Existing excitation systems may stay as they
presently exist Pursuant to current NERC policies and standards, all of the
generating unit's excitation systems were installed prior to November 18, 1993, and
do not require power system stabilizers. For any future modification in excitation
systems, specific response characteristics, regulation abilities, and operating ranges
shall be subject to testing per NERC, WECC, NWPP policies and standards as they
apply specifically to steam/turbine cogeneration units running primarily under
pressure control. Results of any testing shall be supplied to the Transmission
Provider and WECC. Generating Unit No.'s I and 2 are presently out of service.
Any testing required by this provision shall take place if and when these units are put
back into service.
• Maximum Generation Injection at Point of Interconnection: 0 Mw; used to serve load
on site at Lewiston Plant
• Interconnection Type: Energy Resource
Page C-2
• Location: At Clearwater' s manufacturing plant in Lewiston, Idaho
• Facilities: Minimum Power Factor - 0.95 leading and 0.95 lagging
• Point of Change of Ownership (Point of Interconnection):
The two electrical interconnection points located at Avista' s Clearwater Substation
between Interconnection Customer's 34.5 kV ring bus, and the 34.5 kV load side
disconnect switch associated with the 34.5 kV power circuit breaker, each located on
the load side of each of the two (2) 115/34.5 kV power transformers, where
Interconnection Customer's 34.5 kV cables connect to Transmission Provider's 34.5
kV Utility Tie No i and Utility Tie No 2 aluminum pipe bus. For purposes of this
Agreement, these two electrical interconnection points shall be considered as the
Point of Interconnection.
2.Ancillary Services
The Parties acknowledge that pursuant to the Tariff, the Transmission Provider is not
required or obligated to provide certain ancillary services to transmission customers
and/or generators not serving load within Avista's Control Area.
Data Requirements to Provide Ancillary Services
Should the Interconnection Customer or owner, operator or scheduler of the Generating
Facility sell Generating Facility output to a third party but choose to take ancillary
services from the Transmission Provider or Avista Control Area, additional data will
need to be collected from the Interconnection Customer and provided to Avista' s
LSE/merchant function. Pursuant to CFR 358.7(c) [April 1, 2010 edition],
Interconnection Customer consents to the provision of this data to Avista' s LSE/merchant
function.
3.Service Provided to Interconnection Customer when Generating Facility is Offline
Interconnection Customer shall make all appropriate arrangements to accommodate any
power requirements for the Generating Facility that are not self-provided. Any power
that flows to the Interconnection Customer at the Point of Delivery shall be accounted for
under separate retail service arrangement between Avista and the Interconnection
Customer.
4.Specific Operations and Maintenance Requirements
(a) Additional Transmission Provider Requirements under Article 9.1:
Applicable Reliability Standards shall include, but not be limited to, Regional
Reliability Standards, for example the WECC Automatic Voltage Regulators
(AVR) Standard.
Page C-3
For avoidance of doubt, by entering into this Agreement: (1) Transmission
Provider is not assuming any of Interconnection Customer's obligations for
compliance with any Applicable Laws and Regulations and Applicable Reliability
Standards, and (ii) Interconnection Customer is not assuming any of Transmission
Provider's obligation for compliance with any Applicable Laws and Regulations
and Applicable Reliability Standards.
(b)Additional Transmission Provider Requirements under Article 9.4:
Notification of Change in Generation Level - Whenever generation changes due
to a mechanical event or equipment failure by an amount greater than or equal to
five (5) megawatts, Interconnection Customer shall immediately notify Avista's
transmission operator at the phone number provided below unless otherwise
instructed. Avista Transmission Operator Phone: [phone].
Notification of Change of Generation On-Line/Off-Line Status - Interconnection
Customer shall notify Avista's transmission operator at the phone number
provided above as to when a Generating Facility is going off-line and as to when
such Generating Facility will be coming online. Reasons for either event must be
provided. At least 48 hours advance notification shall be given for planned events.
Avista Transmission Operator Phone: [phone].
Voltage and Frequency Response - Each interconnected generating unit of the
Generating Facility shall be capable, at all times (including during an electric
disturbance), of continuous operation at 0.95 to 1.05 per unit (ju) voltage of
nominal voltage (34.5 kV), as measured at the Point of Interconnection, and at a
frequency of 59.5 to 60.5 Hz, and shall be kept online and in operation during
frequency deviations beyond the range of 59.5 to 60.5 Hz to the extent required
by the Applicable Reliability Standards. Normal operation shall be at a frequency
of60 Hz.
(c)Additional Transmission Provider Requirements under Article 9.6.2
Transmission Provider's obligation to supply voltage schedules to Interconnection
customer shall be limited to such times when voltage schedules are changed.
(d)Additional Transmission Provider Requirements under Article 9.7.1
Any planned outage requested by Interconnection Customer that may impact
facilities included in the bulk electric system, as determined by Avista pursuant to
Applicable Reliability Standards, shall be requested with sufficient prior
notification pursuant to Applicable Reliability Standards. As of the Effective
Date, such prior notice is at least seven days.
(e)Additional Transmission Provider Requirements under Article 9.8:
Whenever disconnecting an interconnected generating unit of the Generating
Facility from Avista's Transmission System, the Interconnection Customer shall
perform such disconnection in accordance with Good Utility Practice and in
compliance with Avista's transmission facility clearance procedures as may be
Page C-4
amended, reasonably and without discrimination to the Interconnection Customer,
by Avista in its sole discretion from time to time. Any switching personnel
involved in reconnecting such generating unit to Avista's Transmission System
shall be on the Avista's list of qualified switching personnel. If Avista amends its
transmission facility clearance procedures, it shall notify the Interconnection
Customer as soon as practicable thereafter.
(f) Additional Transmission Provider Requirements under Article 10.1
Transmission Provider may from time to time require an outage at Avista's
Clearwater Substation to perform necessary maintenance to clean insulators due
to the contamination caused by the Lewiston Plant process. Transmission
Provider shall coordinate any such outage with Interconnection Customer,
provided, however, that Transmission Provider retains sole determination as to
outage scheduling.
5. Additional Requirements of the Interconnection Customer
The Transmission Provider reserves the right to reasonably establish minimum acceptable
settings for any installed System Protection Facilities.
Page C-5
Appendix
Security Arrangements Details
Infrastructure security of Transmission System equipment and operations and control
hardware and software is essential to ensure day-to-day Transmission System reliability and
operational security. All Transmission Providers, market participants, and Interconnection
Customers interconnected to the Transmission System shall comply with the recommendations
offered by the President's Critical Infrastructure Protection Board and, eventually, best practice
recommendations from the electric reliability authority. All public utilities will be expected to
meet basic standards for system infrastructure and operational security, including physical,
operational, and cyber-security practices.
Consistent with any such applicable security practices, Interconnection Customer shall, at
Interconnection Customer's expense, arrange to make available in Transmission Provider's
system operations center or at such other point on Transmission Provider's Transmission System
reasonably designated by Transmission Provider, telemetered signals indicating: (i) continuous
energy generation at the Generating Facility suitable for system load control, and (ii) integrated
total energy generation at applicable time periods suitable for energy accounting. Transmission
Provider shall in turn, at Interconnection Customer's request, make such telemetered signals
available to any third party with whom Interconnection Customer executes an agreement to
purchase transmission service or sell Generating Facility output. Any reasonable expenses
associated with Transmission Provider's retransmission of such signals shall be the responsibility
of Interconnection Customer.
Page D-1
Appendix E
Commercial Operation Date
As of the Effective Date the Lewiston Plant has attained Commercial Operation.
Page E-1
Appendix F
Addresses for Delivery of Notices and Billings
Notices:
To Transmission Provider:
Manager, Transmission Services
Avista Corporation
1411 E. Mission Avenue, MSC-16
Spokane, Washington 99202-1902
To interconnection Customer:
Clearwater Paper Corporation
601 W. Riverside Avenue, Suite 1100
Spokane, WA 99201
Attn: Senior Vice President and General Counsel
Billings and Payments:
To Transmission Provider:
All payments to Transmission Provider shall be submitted via electronic funds transfer to
the account specified on each invoice.
To Interconnection Customer:
All payments to Interconnection Customer shall be submitted via electronic funds
transfer or other specified means to the account specified on each invoice.
Page F-i
Exhibit B
Eighth Revision Sheet 25P
Canceling
I.P.U.C. No.28 Seventh Revision Sheet 25P
AVISTA CORPORATION
dibla Avista Utilities
SCHEDULE 25P
EXTRA LARGE GENERAL SERVICE TO CLEARWATER PAPER'S FACILITY - IDAHO
(Three phase, available voltage)
AVAILABLE:
To Clearwater Paper Corporation's Lewiston, Idaho Facility.
APPLICABLE:
To general service supplied for all power requirements with a demand of not less
than 2,500 kVA but not greater than 110,000 kVA. The average of the Customer's
demand for the most recent twelve-month period must fall within these demand limits for
service under this schedule. Customer shall provide and maintain all transformers and
other necessary equipment on its side of the point of delivery and enter into a written
contract for five (5) years or longer.
MONTHLY RATE: The sum of the following demand and energy charges:
Energy Charge: _0 per kwh
Demand Charge:
$12,500.00 for the first 3,000 kVA of demand or less.
1st Demand Block: $4.50 per kVA for each additional kVA of demand up to
55,000 kVA.
2 Demand Block: $2.00 per kVA for each additional kVA of demand above
55,000 kVA.
Primary Voltage Discount:
If Customer takes service at 11 kV (wye grounded) or higher, it will be
allowed a primary voltage discount of 200 per kVA of demand per month.
Minimum:
The demand charge unless a higher minimum is required under contract to
cover special conditions.
ANNUAL MINIMUM: $_______
Any annual minimum deficiency will be determined during the April billing cycle for
the previous 12-month period. The annual minimum is based on 916,667 kWh's per month,
plus twelve months multiplied by the monthly minimum demand charge for the first 3,000
kVa of demand. The annual minimum reflected above is based on base revenues only.
Any other revenues paid in billed rates (such as the DSM Tariff Rider Schedule 91) do not
factor into the annual minimum calculation.
une 1,
Issued by Avista Utilities__________________________________
By Exhibit B, Page 1 of 2 & Federal Regulation
Second Revision Sheet 25PA
Canceling
I.P.U.C. No. 28 First Revision Sheet 25PA
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 25P (continued)
DEMAND:
The average WA supplied during the 30-minute period of maximum use during the
current month as measured by Company's metering equipment.
The Demand rate for all WA above 55,000 is directly related to the terms and
conditions of to the Service Agreement between Clearwater Paper and Avista, which is
effective on July 1, 2013, for a period of 5 years, with an evergreen provision. Avista and
Clearwater agree that Clearwater's load under Schedule 25P will increase during
planned generation outages, intermittent Clearwater generation outages, and other
variations in Clearwater Facility load. If, however, Clearwater sells any of its generation
output to any third party, thereby taking all or a larger portion of its retail load from Avista,
the second demand block described above would no longer be applicable, and all
demand would be billed at the first block rate, i.e., the rate per WA charged for each WA
from 3001 WA to 55,000 WA.
SPECIAL TERMS AND CONDITIONS:
All Special Terms and Conditions are addressed in the Service Agreement between
Avista and Clearwater Paper Corporation as approved by the Commission effective July
1, 2013.
Service under this schedule is subject to the Rules and Regulations contained in
this tariff. The above Monthly Rates are subject to increases or decreases as set forth in
Tax Adjustment Schedule 58, Temporary Power Cost Adjustment Schedule 66, and
Energy Efficiency Rider Adjustment Schedule 91.
une 1, 1, 2013
y Avista Utilities
ate & Federal Regulation By
Exhibit B, Page 2 of 2 j