20220713Reply Comments.pdf

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Avista Corp.
1411 East Mission, P.O.Box3727
Spokane, Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
Jdy 13,2022
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd
Building 8, Suite 201-A
Boise, lD 83714
RE: AYU-E-22-07 - Reply Comments
Dear Ms. Noriyuki:
Enclosed for filing with the Commission pursuant to Order 35431in Case No. AVU-E-22-07 is
an electronic copy of Avista's Reply Comments regarding the Agreernent between Ford Hydro
Limited Partnership and Avista Corporation.
Please direct any questions regarding this report to Michael Andrea at [phone] or myself
at509-495-4584.
Sincerely,
/s/Paul Kimball
Paul Kimball
Manager of Compliance & Discovery
Avista Utilities
509-49s-4584
paul. kimball @ avi stacorp. com
Enclosure
MICHAEL G. ANDREA (ISB No. 8308)
Avista Corporation
l4ll E. Mission Ave., MSC-17
Spokane, WA99202
Telephone: [phone]
michael. andr ea@av istacorp. com
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT PETMION
OF AVISTA CORPORATION AND FORD
HYDRO LIMITED PARTNERSHIP
CASE NO. AVE-E-22-07
REPLY COMMENTS OF AVISTA
CORPORATION
Pursuant to the Notice issued by the Idaho Public Utilities Commission ("Commission")
on June 17,2022, in the above-captioned proceeding, Avista Corporation ("Avista") respectfully
submits the following reply comments in response to Comments of Commission Staff
recommending approval of an amended agreement if it is updated to reflect certain ghanges
recommended by Staff. Avista appreciates Staffls comments and is working with the Project
Developer and intends to submit a Second Amended and Restated Power Purchase Agreement
("Second Amended Agreement") that includes most of Staff s recommended changes. A draft of
the Second Amended Agreement (redlined against the First amended Agreement) that is
substantially the agreement that Avista expects to submit is attached hereto as Attachment A.r
Avista anticipates filing the Second Amended Agreement within a week of this filing and will
I The draft Second Amended Agreement attached hereto as Attachment A has been sent to the Project Developer for
review and execution, but the draft is subject to further review and revision. Avista does not anticipate any
substantive changes to the draft Second Amended Agreement.
Page - I REPLY COMMENTS OF AVISTA CORPORATION
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respectfully request that the Commission approve the Second Amended Agreement with an
effective date of July 1,2022.
I. Background
Avista and Ford Hydro Limited Partnership ("Ford Hydro" or "Project Developer")
entered into a power purchase agreement on May 11,2022 ("Original Agreement"). At Ford
Hydro's request, the Original Agreement was for a one-year terrn commencing on July 1,2022.
The Original Agreement replaced an existing power purchase agreement under which Ford
Hydro was compensated for both capacity and energy. Accordingly, consistent with
Commission precedent, the Original Agreement included rates that compensated Ford Hydro for
both capacity and energy.
On June 7 , 2022, Commission Staff issued its first production request to Avista. Based
on the Staff s first production request, and Avista's subsequent conversation with Commission
Staff about the production request, Avista understood that Staffhad certain concerns, including
(i) use of rates in effect on the requested effective date of the Original Agreement instead of the
rates in effect on the date the Original Agreement was signed, and (ii) payment for capacity for a
power purchase agreement with a one-year term.
To resolve these issues without further litigation, Avista and Ford Hydro entered into an
Amended and Restated Power Purchase Agreement on June 21,2022 ("First Amended
Agreement"). The First Amended Agreement terminated and replaced the Original Agreement
in its entirety. To resolve the issue of whether the parties could agree that the Legally
Enforceable Obligation ("LEO") arose on a date other than the date they entered into the
Original Agreement and, therefore, to resolve the issue of whether they could use the rates in
effect on the requested effective date rather than the date the Original Agreement was signed, the
Page - 2 REPLY COMMENTS OF AVISTA CORPORATION
parties clarified that the LEO arose on the date the parties entered into the First Amended
Agreement. To resolve the question of whether Ford Hydro is entitled to be compensated for
capacity in a one-year contract, the parties agreed to a two-year term in the First Amended
Agreement.
On July 6,2022, Staff submitted comments on the First Amended Agreement
("Comments"). In its Comments, Staffrecommends the following changes to the First Amended
Agreement:
1. Inclusion of the monthly generation estimates in Table No. I included in Staff s
Comments;
2. Implement Staffs wording changes clariffing provisions in Section 6.3.2 of the
First Amended Agreement;
3. lnclusion of provisions to address potential modifications to the Facility that may
require Commission approval;
4. Modification of Section 24 to reflect the need for Commission approval before an
amendment to the First Amended Agreement is valid;
5. Both parties need to sign and date the Second Amended Agreement before
submitting to the Commission for approval;
6. Use of Staff s proposed avoided cost rates in Table No. 2;
7. Modification of the LEO clarification paragraph to reflect the different timing
establishing the LEO for the frst year and second year of the term;
8. Use of Staff s proposed avoided cost rates for the first year for the lapse contract
period.2
2 StaffComments at I l.
Page - 3 REPLY COMMENTS OF AVISTA CORPORATION
As discussed herein, Avista intends to submit a Second Amended Agreement
substantially similar to Attachment A that adopts most of Staff s recommended changes. Avista
does not agree with Staffthat the LEO for the first year of the term should be based on the date
the Original Agreement was entered by the parties. Even assuming that the LEO can only arise
on the date when the parties enter into an agreement and that parties cannot mutually agree that
the LEO arises on some other date as Staffappears to contend, the Original Agreement was
terminated and superseded in its entirety by the First Amended Agreernent and, therefore, the
LEO for the entire two-year term arose when the parties entered into the First Amended
Agreement. Avista intends to submit the Second Amended Agreement for approval within a
week of this filing and will request that the Commission accept the Second Amended Agreement
effective July 1, 2022.
II. Reply Comments
As discussed above, Commission Staff recommends eight amendments to the First
Amended Agreement. Avista intends to incorporate most of Staff s recommendations in the
proposed Second Amended Agreement, as more fully discussed below.
A. Inclusion of the Monthty Generation Estimates in Table No. I to Staffs
Comments
ln its Comments, Staff notes that the First Amended Agreement does not include monthly
generation estimates for purposes of the 90/110 Rule.3 Avista provided monthly generation
estimates in response to Staff s first production request. Staffrecommends that the monthly
generation estimates be included in the agreement.a
3 Comments at 3-4.
4 Id.
Page - 4 REPLY COMMENTS OF AVISTA CORPORATION
Staffs comments misunderstand the timing for providing monthly estimates.
Specifically, under Section 6.3.1 of the First Amended Agreement, the Project Developer is to
provide the estimates for the first twelve consecutive months to Avista'ono later than five (5)
calendar days prior to the Effective Date. . . ." The First Amended Agreement was executed on
May 11,2022. The requested Effective Date is July l, 2022. Therefore, the Project Developer is
to provide the monthly estimates for the first year on or before June 26,2022-the monthly
estimates are not typically included in Avista's power purchase agreements; but are provided to
Avista prior to the Effective Date. To be sure, there is no practical reason to include the
estimates in the agreement since the estimates may be updated or otherwise revised.s
Notwithstanding the foregoing, to resolve the issue raised by Staff, Avista intends to
submit the preliminary monthly generation estimates in the Second Amended Agreement as
Exhibit F.
B. Implement Staffs Wording Changes Clarifying Provisions in Section 6.3.2
Staffrecommends language changes to clariff Section 6.3.2.6 Avista proposes to update
Section 6.3.2 of the Second Amended Agreement to include Staffls recommended change in
Section 6.3.2.
C. Inclusion of Provisions to Address Potential Modilications to the Facility that
May Require Commission Approval
Staffasserts that the First Amended Agreement does not contain any provisions that
address potential modifications to the Facility. That is incorrect. Section 6.2 of the First
Amended Agreement states: "The maximum annual amount of electric power that Avista is
obligated to purchase hereunder shall be 5,000 megawatt hours in any Operating Year. . . ." The
5 Eg. First Amended Agreemant at Sections 6.3.2 and6.3.5 (allowing Project Developer to update the monthly
estimates).
6 Comments at 4-5.
Page - 5 REPLY COMMENTS OF AVISTA CORPORATION
5,000 megawatt hour limitation is intended to ensure that the Facility cannot be modified to
increase its capacity, while ensuring sufficient operational flexibility of the existing Facility.
Notwithstanding the foregoing, to resolve the issue raised by Staff, Avista is proposing to
include a provision in Section 9.7 of the Second Amended Agreement that expressly restricts the
Project Developer from modiffing the Facility from the as-built description of the Facility
included in Exhibit D or from the capacity size of 1.499 MW without Avista's written consent
and, if required, Commission approval. With that restriction, the recommended provisions for
modiffing with notice are unnecessary. If the Project Developer wants to modiff the Facility in
the future, it will need to work with Avista to enter into a new agreement for the modified
facility and, of course, that new agreement will be subject to Commission approval.
D. Modification of Section24 to Reflect Need for Commission Approval Before
an Amendment to the Agreement is Valid
In its Comments, Staffexpressed concern that Section 24 of the Original Agreement
contemplated amendments may become effective without Commission approval.T The intent of
Article 24 is to state that both parties to the agreement must agree in writing to amend the
agreement. However, the agreement, and any amendment to the agreement must be approved by
the Commissions. Accordingly, in the Second Amended Agteement, Avista proposes to revise
Section 24 consistent with Stafls Comments to expressly state:
No change, amendment or modification of any provision of this Agreement shall be valid
unless set forth in a written amendment to this Agreement signed by both Parties and
aporoved blt the Commission.
7 Comments at 7.
8 See First Amended Agreement at Section 5.2.
Page - 6 REPLY COMMENTS OF AVISTA CORPORATION
E. Legally Enforceable Obligation and Use of Avoided Cost Rates
In its Comments, Staffappears to assert that the LEO for the first year of the term of the
agreement was established on the date that the Original Agreement was executed-i.e., May 11,
2022-andthat the LEO for the second year of the term was established when the First Amended
PPA was executed-i.e., June 2I,2022.e Accordingly, Staffasserts that the avoided cost rates in
effect on June 1,2022 should apply to the first year of the term and the avoided cost rates in
effect after June 1,2022 should apply to the second year of the term.l0 Avista disagrees.
As a threshold matter, in the Original Agreement the parties effectively agreed that the
LEO would arise on the Effective Date of that agreement rather than the date the Original
Agreement was executed. This was necessary to solve a practical issue. That is, since the prior
agreement expired on June 30,2022<hortly after the new avoided cost rates for 2022wereto
become effectiveto use the new rates the parties were faced with a choice: (l) they could wait
until the 2022 avoided cost rates became effective to execute the Original Agreement, or (2) they
could execute the Original Agreement before the avoided cost rates became effective and
mutually agree to use the rates in effect on the Effective Dato---cffectively agreeing that the LEO
arose on the Effective Date rather than the execution date. If the parties choose to wait until the
2022 avoided cost rates became effective, the Commission would not have time to review and
approve the Original Agreement before the Effective Date. Accordingly, the parties choose to
execute on May 11,2022, to allow sufficient time for the Commission to review and approve the
Original Agreement.
Avista agrees that, as a general rule, the LEO arises when the parties enter into a power
purchase agreement. The general rule provides a backstop to determine when the LEO arises if
e Comments at 8
10 Id.
Page - 7 REPLY COMMENTS OF AVISTA CORPORATION
the parties cannot otherwise agree to the date when the LEO arises. Neither Commissron
precedent nor Idaho law prohibits the parties from mutually agreeing that the LEO arises on a
date other than the execution date. In cases where an existing agreement expires shortly after
new rates are to become effective, ridged adherence to the general rule that the LEO arises when
parties execute the agreement is not practical. Such ridged adherence to the general rule forces
developers to wait to execute the agreement until new rates become effective, which in turn will
mean that the Commission will not have sufficient time to review and approve agreements before
they become effective.
Even assuming ridged adherence to the general rule is required even when the parties
mutually agree to an alternative date for the LEO, in this case the LEO for both years of the term
arose when the parties entered into the First Amended Agreement. Stafffails to recognizethat,
by its terms, the First Amended Agreement "terminates, supersedes and replaces the [Original
Agreement] in its entirety."tl That is, the First Amended Agreement terminates and supersedes
the entire agreement, including the original execution date. Accordingly, the date that the parties
executed the Original Agreement is irrelevant to the question of when the LEO arose.
Staff s reliance on the Commission's order in Stimson in AVU-E-19-16 ("Stimson") is
misplaced.l2 In Stimson the parties executed an amendment to the agreement that, among other
things, extended the term. However, in contrast to the circumstances that exist here, that
amendment did not terminate and supersede the underlying agreement. Rather, the amendment
expressly stated:
rr Original Agreement at Section 5.1
12 See Comments at 8-9.
Page - 8 REPLY COMMENTS OF AVISTA CORPORATION
Except as expressly amended by the provisions set forth in this Amendment, all of the
terms and conditions of the Agreement shall remain in full force and effect following
execution of this Amendment . . . .13
ln Stimson, the original execution date was not terminated and superseded. [n contrast, the First
Amended Agreement does terminate the Original Agreement-including the original execution
dat*in its entirety. Accordingly, the LEO for the First Amended Agreement arose on June 21,
2OL2,whenthe parties executed that First Amended Agreement.ra
Staff s remaining recommendations regarding the rates to be used during the first and
second years of the term and during the lapse period appear to be based on its misunderstanding
of when the LEO arose. As discussed above, the LEO arose for the First Amended Agreement
when that agreement was executed. Accordingly, the avoided cost rates that were in effect when
the First Amended Agreement was executed apply to both years of the term and the lapse
period.ls
III. Conclusion
Avista appreciates Staff s careful review. As discussed herein, the First Amended
Agreement has been revised to incorporate most of Staff s recommendations. Avista
respectfully requests that the Commission approve the Second Amended Agreement (attached
hereto as Attachment A) with an effective date of July 1,2022.
13 Amendment No. I filed in AVU-E-I9-16 at Section 5.
la The Second Amended Agreement also terminates and supersedes the First Amended Agreement in its entirety, so
the LEO for the Second Amended Agreement arose on when the Second Amended Agreement was executed.
However, the rates have not changed between the execution of the First Amended Agreement and the Second
Amended Agreement and, therefore, there is no practical consequence as a result of the replacement of the First
Amended Agreement with the Second Amended Agreement.
r5 The Second Amended Agreement also terminates and supersedes the First Amended Agreement in its entirety, so
the LEO for the Second Amended Agreement arises when the Second Amended Agreement is executed. However,
the rates have not changed between the execution of the First Amended Agreement and the anticipated execution of
the Second Amended Agreement and, therefore, there is no practical consequence as a result of the replacement of
the First Amended Agreement with the Second Amended Agreement. That is, the rates that were in effect when the
First Amended Agreement was executed are still in effect and, therefore, will apply to the Second Amended
Agreement.
Page - 9 REPLY COMMENTS OF AVISTA CORPORATION
DATED this 13th day of hily 2022.
_/s/ Michael G. Andrea
Michael G. Andrea
Attorney for Avista Corporation
Page - l0 REPLY COMMENTS OF AVISTA CORPORATION
ATTACHMENT A
Draft Proposed Second Amended Agreement
Attachment A
NO RELIANCE ON AVISTA.
WARRANTIES .........
CONDITIONS TO ACCEPTANCE OF ENERGY ...............
TERM OF AGREEMENT.......
PLJRCHASE Al.lD SALE OF POWER
INSURANCE ...............
CURTAILMENT, INTERRUPTION OR REDUCTION OF DELIVERY
OPERATION
METERING
PURCHASE PRICES AND METHOD OF PAYMENT
FORCE MAIEURE.......
INDEMNITY
NO I.JNSPECIFIED THIRD PARTY BENEFIChRMS
DEFAULT
ARBITRATION ..........
RELEASE BY PROJECT DEVELOPER
GOVERNMENTAL AUTHORITY ......
EQUAL OPPORTUNITY ................
SEVERAL OBLIGATIONS
IMPLEMENTATION..........
NON.WAIVER
AMENDMENT
CHOICE OF LAWS
SECOND AMENDED AI\[D RESTATED POWER PTIRCHASE AGREEMENT
BETWEEN
FORD IIYDRO LIMITED PARTNERSIIIP
AI\D
AYISTA CORPORATION
INDEX
DEFINITIONS
DRAFT
3
6
6
7
7
8
10
l1
l1
13
t4
l5
t6
16
t7
I7
18
19
t9
L9
t9
20
20
20
20
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
t4.
15.
t6.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Page - 1 - FORD HYDRO LIMITED PARTNERSHIP
26.
27.
28.
29.
30.
31.
Attachment A
COMPLIANCE WITH LAWS.......
VENI.IE
HEADINGS
NOTICES
EXHIBITS
USE OF FACILTTIES
DRAFT
20
20
2t
2t
21
22
Exhibit A Communication and Reporting
Exhibit B Fonn of Engineer's Certification of Operations and Mainte,nance Policy
Exhibit C Reserved
Exhibit D Description of the Facility
Exhibit E Purchase Prices
Exhibit F Preliminarv Monthlv Ge,neration Estimates
Page - 2 - FORD ffYDRO LMITED PARTNERSHIP
Attachment A
DRAFT
This Amended and Restated Power Purchase Agreement ("Agreemenf') with an
Effective Date as provided in Section 5.1 below is made by and between Avista Corporation, a
Washington corporation ("Avista"), and Ford Hydro Limited Parfirership ("Project Developer").
Avista and Project Developer are sometimes referred to herein individually as a "Party" and
collectively as the "Parties."
WITNESSETH:
WIIEREAS, Project Developerplans to continue to operate a1.499 MW hydroelectric
generating unit(s) near Weippe, Idaho, as more fully described in Exhibit D ("Facility"); and
WIIEREAS, Project Developer has obtained all necessary rights and authorities to own
and operate the Facility; and
WIIEREAS, the Facility may produce power, which Project Developer desires to sell to
Avista; and
WHEREAS, Project Developer and Avista are parties to an agreement pursuant to which
Avista purchases the capacity and energy of the Facility, which agreement expires by its own
terms on June 30,2022 ("Prior Agreement"); and
WHEREAS, Project Developer desires to sell and Avista desires to purchase output from
the Facility pursuant to this Agreement, subject to approval of the Idaho Public Utilities
Commission; and
WHEREAS, the Facility is or shall be a Qualifying Facility within the meaning of the
Public Utility Regulatory Policies Act of 1978 and the rules and regulations thereunder; and
WHEREAS, on May 11,2022, the Parties executed a Power Purchase Agreement ("May
l1 Agreemenf') where Avista was to purchase the output from the Facility for a one-year term
commencing on July 1,2022;'
WHEREAS, the Parties have agreed to revise the May 1l Agreement to provide for a
two-year term commencing on July 1,2022 and to clarify that the Legally Enforceable
Obligation under this Agreement shall be the date upon which the Parties execute this
Agreement.
NOW, TIIEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Parties agree as follows.
I. DEFINITIONS
Whenever used in this Agreement and exhibits hereto, the following terms shall have the
following meanings:
Page - 3 - FORD IIYDRO LIMITED PARTNERSHIP
Attachment A
DRAFT
"Ag@!" means this Power Purchase Agreement, including all exhibits, and
any written amendments.
*aMW" means average MW
"@", "biggt@glw,", 66EgEq" and "@@,' shall have their
respective meanings set forth above.
"El@@pg1@" shall have the meaning provided in Section 5.1.
1.5..@,'meansallcertificates,credits,benefits,emissions
reductions, environmental air quality credits and emissions reduction credits, offsets and
allowances, howsoever entitled, resulting from the avoidance of the emission of any gas,
chemical, or other substance attributable to the Facility or the generation of energy by the
Facility, and the delivery of such energy to the electricity grid, 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 LINFCCC or crediting "early action" with a view to the UNFCCC, 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 Facility and other financial incentives in the
form of credits, reductions, or allowances associated with ownership of the Facility that are
applicable to a state or federal income tax obligation, if any. Environmental Athibutes also
include the reporting rights or Renewable Energy Certificates ("RECs") associated with these
Environmental Attributes. RECS are accumulated on a MWh basis and one REC represents the
Environmental Atributes associated with one MWh of energy. Environmental Attributes do not
include (i) any energy, capacity, reliability or other power attributes from the Facility.
1.6 '6Egg!!8" means the electric generating facilities, including all equipment and
structures necessary to generate and supply power, more particularly described at Exhibit D
(Description of the Facility).
l.7..@,,meansthee1ecticpowerusedbytheFacilityduringits
operation, including, but not necessarily limited to pumping, generator excitation, cooling or
otherwise related to the production of electricity by the Facility.
l.E "FERC" means the Federal Energy Regulatory Commission.
1.9 " " means certifications provided by a
professional engineer registered in Washington or Idaho, who has no direct or indirect, legal or
equitable, ownership interest in the Facility.
1.10 "Reserved".
1.1
1.2
1.3
1.4
Page - 4 - FORD HYDRO LIMITED PARTNERSHIP
Attachment A
DRAFT
1.11...@,,meansallfacilitiesrequiredtointerconnectthe
Facility for delivery of Net Delivered Output to the Avista transmission system including
connection, tansformation, switching, relaying and safety equipment. lnterconnection Facilities
shall also include all telemetry, metering, cellular telephone, and/or communication equipment
required under this Agreement regardless of location.
l.l2 *IPUC" means the Idaho Public Utilities Commission or its successor.
1.13 6'MIy" means megawatt. One thousand kilowatts equals one megawatt.
l,l4 "@" means eighty-five percent (85%) ofthe Powerdex
Hourly Mid-Columbia lndex ("Mid-C Index") , or its successor, or as agreed to by the parties
where no successor exists; provided, however, if the Mid-C Index is less than zero, the Market
Energy Cost shall be one-hundred and fifteen percent (ll5o/o) of the Mid-C Index.
1.15 "@' means all electric energy generated by the Facility, net
of Facility Service Power.
1.16 "@" means the rate in dollars per megawatt-hour, to be
paid by Avista for all Net Delivered Output that is not Surplus Energy, subject to any limitations
under this Agreement. The Net Delivered Output Cost is specified in Section I 1.1.
l.l7 "@f,,'means all hours other than On-Peak hours.
1.18 "@fggf," means the hours ending 0700 through2200 Pacific Prevailing time,
Monday through Sunday, including NERC holidays.
1.19 "QpSES4dggE' means each l2-month period from July I through June 30
1.20 "p!4!plpg[y35y" means the location where the Facility is electrically
interconnected with Avista's transmission system.
l.2l "@'means thepractices, methods, and acts, including
but not limited to practices, methods, and acts engaged in or approved by a significant portion of
the electric power generation and transmission industy, in the exercise of reasonable judgment
in the light of the facts known or that should have been known at the time a decision was made,
that would have been expected to accomplish the desired result in a manner consistent with law,
regulation, reliability, safety, environmental protection, economy, and expedition.
1.22 "E$gdg!91!.lQg!9re," means any outage which is scheduled by the Project
Developer to remove electrical or mechanical equipment from service for repair, replacement,
maintenance, safety or any other reason, and which thereby limits the generating capability of the
Facility to less than its full tested capability.
Page - 5 - FORD HYDRO LIMITED PARTNERSHIP
Attachment A
DRAFT
1.23 "S@lgqE4gry" means: (1) Net Delivered Output produced by the Facility
and delivered to the Avista electrical system during the month which exceeds I l0% of the
monthlyNet Delivered Output estimate for the corresponding month specified in Section 6.3; or
(2) if the Net Delivered Output produced by the Facility and delivered to ttre Avista electrical
system during the month is less than9Oo/o of the monthly Net Delivered Ouput estimate for the
corresponding month specified in Section 6.3, then all Net Delivered Output delivered by the
Facility to the Avista electrical system for that given month. For clarification, Net Delivered
Ou@ut that is Surplus Energy pursuant to this definition shall be sold to Avista at the price set
forth in Section 11.2.
l.24..@,,meanstherateindollarspermegawatt-hour,tobepaid
by Avista for all Surplus Energy, subject to any limitations under this Agreement. The Surplus
Energy Cost is specified in Section 11.2 of this Agreement.
1.25 (Term" shall have the meaning provided in Section 5.5 of this Agreement.
2. NO RELIANCE ON AYISTA
2.1 Project Developer Independent Investieation. Project Developer warrants and
represents to Avista that in entering into this Agreement and the undertaking by Project
Developer of the obligations set forth herein, Project Developer has investigated and determined
that it is capable of performing hereunder and has not relied upon the advice, experience or
expertise of Avista in connection with the transactions contemplated by this Agreement.
2.2 Project Developer Experts. All professionals or experts including, but not limited
to, engineers, attomeys or accountants, that Project Developer may have consulted or relied on in
undertaking the tansactions contemplated by this Agreement have been solely those of Project
Developer.
3. WARRANTIES
3.1 No Warrantv b), Avista. Any review, acceptance or failure to review Project
Developer's design, specifications, equipment or facilities shall not be an endorsement or a
confirmation by Avista, and Avista makes no warranties, expressed or implied, regarding any
aspect of Project Developer's design, specifications, equipment or facilities, including, but not
limited to, safety, durability, reliability, stength, capacity, adequacy or economic feasibility.
3.2 Oualiffine Facilitv Status. Project Developer warrants that the Facility is a
"Qualifying Facility'', as that term is used and defined in 18 C.F.R. $$ 292.101,292.207. After
initial qualification, Project Developer shall take such steps as may be required to adequately
maintain the Facility's Qualiffing Facility status during the term of this Agreement and Project
Developer's failure to adequately maintain Qualifuing Facility status will be a material breach of
this Agreement. Avista reseryes the right to review the Facility's Qualifying Facility status and
associated support and compliance documents at any time during the term of this Agreement.
Page - 6 - FORD HYDRO LIMIED PARTNERSHIP
Attachment A
DRAFT
4. CONDITIONS PRIOR TO EFFECTIVE DATE
Prior to the Effective Date, the following actions must have occurred:
4.1 Lice,nses. Pemrits and Approvals. Pursuant to applicable federal, state, tribal or
local regulations, Project Developer shall maintain in good standing and effect all lice,nses, permits
or approvals necessary for Project Developer's operation of the Facility including, but not limited
to, compliance with Subpart B, 18 C.F.R. S 292.207. Licenses, permits and approvals shall include
but shall not be limited to tibal, state and local business licenses, environmental perrnits
approvals for fuel storage, water rights, and other necessary easements and leases.
4.3 Insurance. Project Developer shall have complied with Section 7, lnsurance.
4.5 Initial Year Monthlv Net Delivered Outout Amounts. Project Developer shall
have provided to Avista the Initial Year Monthly Net Delivered Output Estimates in accordance
with Section 6.3.1.
5. TERM OF AGREEMENT
5.1 Subject to the provisions of this Section 5, this Agreement shall be effective at
0000 hours on July 1,2022, or such other date as ordered by the IPUC, ("Effective Date").
Power purchases pursuant to this Agreement shall commence upon the Effective Date. This
Agreement terminates, supersedes and replaces the May 11 Power Purchase Agreement in its
entirety.
5.2 Project Developer and Avista shall jointly petition the IPUC for an order
approving the Agreement. This Agreement is conditioned upon the approval and determination
by the IPUC that the prices to be paid for electric power are just and reasonable, in the public
interest, and that the costs incurred by Avista for purchases of electric power from Seller are
legitimate expenses.
5.3 In the event that the IPUC fails to issue a final order approving this Agreement by
September 1,2022, neither Party shall have any further obligations to purchase or sell electric
power hereunder, and this Agreement shall terminate on September 1,2022.
5.4 [n the event that this Agreement is terminated pursuant to Sections 5.2 or 5.3,
except as otherwise provided, the Project Developer shall refund amounts to Avista. The refund
amount for each month shall be equal to the amount previously paid by Avista for electric power
received by Avista from the Facility during such month, less the arithmetic product that is
obtained by multiplying the number of megawatt-hours during such month for which Avista has
paid, by the lesser of: (i) the Net Delivered Output Cost set forth in Section 11.1 for such month,
or (ii) the Market Energy Cost for such month. tn the event that Avista has not paid for electric
power delivered by Project Developer before this Agreement is terminated pursuant to Sections
5.2 or 5.3, Avista shall pay for such power at the lesser of; (i) the Net Delivered Output Cost set
forth in Section 11.1 for such month, or (ii) the Market Energy Cost for such month.
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5.5 The Term of the Agreement shall be for two (2) years following the Effective
Date, unless terminated earlier by terms and conditions contained herein.
6. PURCHASE AI\D SALE OF POWER
6.1 Project Developer shall sell and deliver to the Point of Delivery and Avista shall
purchase all Net Delivered Output.
6.2 The Facility is designed, and the Project Developer shall operate the Facility in a
manner such that the hourly scheduled amount of Net Delivered Output does not exceed 1.499
MW in any hour. Avista shall have the right, but not the obligation, to purchase anyNet
Delivered Output from the Facility in excess of 1.499 MW in any hour. The maximum annual
amount of electic power that Avista is obligated to purchase hereunder shall be 5000 megawatt-
hours in any Operating Year which is a non-Leap Year, or 5000 megawatt-hours in any
Operating Year which is a Leap Year.
6.3 Net Delivered Output Amounts.
6.3.1 lnitial Net Delivered Output Estimates. Project Developer shall provide to
Avista Net Delivered Output estimates for each of the twelve consecutive months that
begin with the month containing the Effective Date, counting the month during which the
Effective Date occurs as month one (tnitial Year Monthly Net Delivered Output
Estimates). Project Developer shall provide to Avista such Initial Year Monthly Net
Delivered Output Estimates by written notice in accordance with Section 29 no later than
five (5) calendar days prior to the Effective Date and shall provide estimates for each
subsequent year for the Term no later than five (5) business days prior to each
anniversary of the Effective Date.
6.3.2 Subseouent Monthly Net Delivered Output Estimates. Prior to the end of
the first month following the Effective Date, and prior to the end of every month
thereafter, Project Developer may provide to Avista updated monthly Net Delivered
Output estimates for the month following the next month. For example, assuming that
the Effective Date is July l, 2022,pior to July 31,2022, Project Developer may provide
Avista revised monthly Net Delivered Output estimates for September 2022. Project
Developer may provide such monthly Net Delivered Output estimates to Avista by
written notice in accordance with Section 29,no later than 5:00 p.m. of the last business
day of the month du+infbfwhich they are required to be provided.
6.3.3 Content of Net Delivered Output Estimates. All Net Delivered Output
estimates shall be expressed in kilowatt-hours by month.
6.3.4 Failure to Provide Net Delivered Outout Estimates. If the Project
Developer fails to provide to Avista Net Delivered Output estimates when required herein
pertaining to any month or months, Avista shall determine the Net Delivered Output
estimates pertaining to such month or months, and the Net Delivered Output estimates
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shall be binding for purposes of the Agreement as though they were prepared by Project
Developer and provided to Avista as required by the Agreement.
6.3.5 Project Developer's Revisions ofNet Delivered Output Estimates. At the
end of month three following the Effective Date, and at the end of every third month
thereafter, counting the month during which the Effective Date occurs as month one,
Project Developer may provide Avista with revisions to Net Delivered Output estimates
previously provided to Avista, except Project Developer may not revise Net Delivered
Output estimates that pertain to the three consecutive months that immediately follow the
month during which Project Developer provides Avista notice of the revisions. If Project
Developer elects to revise Net Delivered Output estimates previously provided to Avista,
then Project Developer must provide to Avista the revised Net Delivered Output
estimates by written notice in accordance with Section 29,no later than 5:00 p.m. of the
last business day of the month during which they are required to be provided.
6.3.6 Avista Adiustment ofNet Delivered Output Estimate. If Avista is excused
from accepting the Project Developer's Net Delivered Output as specified in Section 9.2
or if the Project Developer declares a Suspension of Energy Deliveries as specified in
Section 9.3 and the Project Developer declared Suspension of Energy Deliveries is
accepted by Avista, the Net Delivered Output estimate as specified in Section 6.3.1 for
the specific month in which the reduction or suspension under Section 9.2 or 9.3 occurs
will be reduced in accordance with the following:
Where:
SGU:(a)
o)
R esrrlfino forrnrrla hein o'
NDO : Current Month' s Net Delivered Ouput estimate
If Avista is excused from accepting the Project Developer's Net
Delivered Output as specified in Section 9.2 this value will be
equal to the percentage of curtaihnent as specified by Avista
multiplied by the TGU as defured below.
If the Project Developer declares a Suspension of Net Delivered
Output as specified in Section 9.3 this value will be the generation
unit size rating of 1.499 MW,
TGU = Generation unit size rating of 1.499 MW,
RSH:Actual hours the Facility's Net Delivered Output was either
reduced or suspended under Sections 9.2 or 9.3.
TH:Actual total hours in the current month
Adjusted
Net Delivered
Output
:NDo ( ((SGU x NDO ))
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)x RSH
Attachment A
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TGU TH
This Adjusted Net Delivered Ou@ut estimate will be used in applicable Surplus Energy
calculations for only the specific month in which Avista was excused from accepting the Net
Delivered Output or the Project Developer declared a Suspension of Energy.
6.4 Environmental Attributes. Ownership of Environmental Attributes shall be determined
consistent with applicable State and Federal law.
7. INSTJRANCE
7.1 Business lnsurance. Prior to operating the Facility, Project Developer, at its own
cost, shall obtain and maintain the following insurance in force over the Term of this Agreement
and shall provide certificates of all insurance policies. Avista's acceptance of the certificate of
insurance is not intended to, and will not reduce, limit, affect, or modiff the primary obligations
and liabilities of Project Developer under the provisions of this Agreement. Project Developer
must provide notice of cancellation or notice of change in policy terms at least sixty (60) days prior
to any change or termination of the policies.
7.1.1 General Liability. Project Developer shall carry and maintain
comprehensive general liability insurance in a form acceptable to Avista with coverage of
not less than $2,000,000 per occlurence, including coverage of bodily injury, property
damage liability, and contractual liability specifically related to the indemnity provisions
of this Agreement. The deductible will not exceed the Project Developer's financial ability
to cover claims and will not be greater than prevailing practices for similar operations in
the State of Idaho.
7.1.2 Oualifrine Insurance. The insurance coverage required by this Section
7.1.1 must be obtained from an insurance carrier licensed to conduct business in the state
in which the Services are to be performed, must be acceptable to Avista, such acceptance
not to be unreasonably withheld, but in no event have less than an A.M. Best Rating of
A-, Class VIII. The policies required under this Agreement must include (i) provisions or
endorsements naming Avista and its directors, oflicers and employees as additional
insureds, (ii) Avista as a loss payee as applicable, (iii) a cross-liability and severability of
interest clause, and (iv) provisions such that the policy is primary insurance with respect
to the interests of Avista and that any other insurance maintained by Avista is excess and
not contributory.
7.2 Eneineerinq Certifications. At Avista's reasonable written request, it may require
the Project Developer to provide to Avista an Independent Engineering Certification,
substantially in the form of Exhibit B, as to the adequacy of the Operation and Maintenance
Policy for the Facility within sixty (60) days after such request. Failure to provide such
documentation shall be deemed to be a default under Section 16.1.
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8. CTJRTAILMENT. INTERRUPTION OR REDUCTION OF DELTYERY
Avista may require Project Developer to curtail, intemrpt or reduce delivery of Net
Delivered Output if, in accordance with Section 9.2, Avista determines that curtailment,
intemrption or reduction is necessary because of force majeure or to protect persons and property
from injury or damage, or because of emergencies, necessary system maintenance, system
modification or special operating circumstances. Avista shall use its reasonable efforts to keep
any period of curtailment, intemrption, or reduction to a minimum. In order not to interfere
unreasonably with Project Developer operations, Avista shall give Project Developer reasonable
prior notice of any curtailment, intemrption, or reduction, the reason for its occrurence and its
probable duration.
9. OPERATION
9.1 Communications and Reporting. Avista and the Project Developer shall maintain
appropriate operating communications through Avista's Designated Dispatch Facility in
accordance with Exhibit A of this Agreement.
9.2 Excuse From Acceptance of Deliverv of Power.
9.2.1 Avista may intemrpt, suspend or curtail delivery, receipt or acceptance of
delivery of power if Avista reasonably determines consistent with Prude,nt Utility
Practice that the failure to do so:
9.2.1.1 May endanger any person or property, or Avista's electric
systern, or any electric system with which Avista's system is interconnected;
9.2.1.2 May cause, or contribute to, an imminent significant disruption
of electric service to Avista's or another utility's customers;
9.2,1.3 May interfere with any consffuction, installation, inspection,
testing, repalr, replacement, improvement, alteration, modification, operation, use
or maintenance of, or addition to, Avista's electric system or other property of
Avista.
9.2.2 Avista shall promptly notiS Project Developer of the reasons for any such
intemrption, suspension or curtaihnent provided for in Section9.2.l, above. Avista shall
use reasonable efforts to limit the duration of any such disconnection, intemrption,
suspension or curtailment.
9.3 Project Developer Declared Suspension of Enerev Deliveries.
9.3.1 If the Facility experiences a forced outage due to equipment failure which
is not caused by an event of force majeure or by neglect, disrepair or lack of adequate
preventative maintenance of the Facility, Project Developer may, after giving notice as
provided in Section 9.3.2 below, temporarily suspend all deliveries of Net Delivered
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Energy to Avista from the Facility for from individual generation unit(s) within the
Facility impacted by the forced outage for a period of not less than 48 hours to correct the
forced outage condition ("Declared Suspension of Energy Deliveries").The Declared
Suspension of Energy Deliveries will begin at the start of the next full hour following the
Project Developer's telephone notification to Avista as specified in Section 9.3.2 and will
continue for the time as specified (not less than 48 hours) in the written notification
provided by the Project Developer. In the month(s) in which the Declared Suspension of
Energy occurred, the Net Delivered Energy Amount will be adjusted as specified in
Section 6.3.5.
9.3.2 If the Project Developer desires to initiate a Declared Suspension of
Energy Deliveries as provided in Section 9.3.1, the Project Developer shall notiff the
Designated Dispatch Facility by telephone. The beginning hour of the Declared
Suspension of Energy Deliveries will be at the earliest the next full hour after
making telephone contact with Avista. The Project Developer shall, within 24 hours
after the telephone contact, provide Avista a written notice in accordance with Section 29
that will contain the beginning hour and duration of the Declared Suspension of Energy
Deliveries and a description of the conditions that caused the Project Developer to
initiate a Declared Suspension of Energy Deliveries. Avista shall review the
documentation provided by the Project Developer to determine Avista's acceptance of
the described forced outage as qualifying for a Declared Suspension of Energy
Deliveries as specified in Section 9.3.1. Avista's acceptance of the Project
Developer's forced outage as an acceptable forced outage will be based upon the clear
documentation provided by the Project Developer that the forced outage is not due to an
event of Force Majeure or by neglect, disrepair or lack of adequate preventative
maintenance of the Project Developer's Facility.
9.4 Scheduled Maintenance. On or before January 31 of each calendar year, Project
Developer shall submit a written proposed maintenance schedule of significant Facility
maintenance for that calendar year and Avista and Project Developer shall mutually agree as to
the acceptability of the proposed schedule. The Parties determination as to the acceptability of
the Project Developer's timetable for scheduled maintenance shall take into consideration
Prudent Utility Practices, Avista system requirements and the Project Developer's preferred
schedule. Neither Party shall unreasonably withhold acceptance of the proposed maintenance
schedule. The Parties shall cooperate in determining mutually acceptable Facility down times or
maintenance shutdowns.
9.5 Compliance with Permits. Licenses. Authorizations and Other Riehts. Project
Developer shall obtain and comply with all permits, licenses, authorizations and other rights
required to own, operate, use and maintain the Facility, as they may change from time to time.
Project Developer shall furnish to Avista on request, copies of all documents granting,
evidencing or otherwise related to such permits, licenses, authorizations and rights.
9.6 Project Develooer's Risk. Project Developer shall own, operate, use and maintain
the Facility at its own risk and expense in compliance with all applicable laws, ordinanceso rules,
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regulations, orders and other requirements, now or hereafter in effect, of any governmental
authority.
9.7 Modifications to the Facility/Avista Rieht to Inspect. Project Developer shall not
moditr the Facilitv from the as-built descriplion of the Facilitv in Exhibit D without Avista's
written consent and. if required. Commission approval. Project Developer shall permit Avista to
inspect the Facility or the operation, use or maintenance of the Facility. Project Developer shall
provide Avista reasonable advance notice of any such test or inspection by or at the direction of
Project Developer.
9.8 Project Developer Oblieations in Accordance with Prudent Utilitv Practices.
Project Developer shall own, operate and maintain the Facility and any Project Developer-owned
Interconnection Facilities so as to allow reliable generation and delivery of electric energy to
Avista for the full term of the Agreement in accordance with Prudent Utility Practices.
10. METERING
10.1 A power meter currently located at the Point of Delivery at Project Developer's
expense will register the Net Delivered Output generated and delivered to Avista on an hourly
basis.
10.2 The power meter will record power, which flows from the Facility to Avista.
Avista and Project Developer both shall have the right to read and receive readings from the
power meter. Avista shall read the meter at least once a month to deternine the amount of Net
Delivered Output in each calendar month. Power deliveries in any month shall be calculated
based on information from meter readings with the date adjustrnent made by prorating metered
amounts to the number of days in such month. Actual monthly Net Delivered Output shall be
determined from the record developed. Avista shall own and maintain all meters used to
determine the billing hereunder. Such meter(s) shall be tested and inspected in accordance with
Avista's meter testing program as filed with the Idaho Public Utilities Commission. If requested
by Project Developer, Avista shall provide copies of applicable test and calibration records and
calculations. Avista shall permit a representative of Project Developer to be present at all times
the meters are being tested. Additionally, Avista shall test any or all of such meters as may be
reasonably be required by Project Developer. Project Developer shall pay reasonable costs for
such requested test unless any of the meters is found to be inaccurate in which case Avista shall
pay for such test.
f03 Adjustments shall be made in meter readings and billings for errors in a meter
reading or billing discovered within twelve (12) months of the error. Avista shall noti$ Project
Developer of any errors arising from meter calibration, reading or billing. Avista shall permit
representatives of Project Developer to inspect all of Avista's records relating to the delivery of
electrical energy to and purchase ofelectrical energy by Avista hereunder.
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11. PURCHASE PRICES AI\D METHOD OF PAYMENT
ll.1 Net Delivered Output Cost. For all Net Delivered Output received by Avista for
each hour that is not Surplus Energy Avista shall pay the applicable rate based upon the
following Avoided Cost Rates For Non-Fueled Projects Smaller Than Ten Average Megawatts
per month - Non-Levelized. The anticipated applicable rates for such Net Delivered Output is
shown in Exhibit E. Notwithstanding anything in Exhibit E, the applicable rate for Net
Delivered Output that is not Surplus Energy shall be the Avoided Cost Rates forNon-Fueled
Projects Smaller Than Ten Average Megawatts per month - Non-Levehzed that are approved by
the Commission and in effect on the Effective Date.
ll.2 Surplus Enere], Cost. For all Surplus Energy, Avista shall pay to the Project
Developer the Surplus Energy Cost, which shall be the lessor of (i) current month's Market
Energy Cost per megawatt-hour, or (ii) the Net Delivered Output Cost specified in Section 1 1.1.
11.3 Palanents to Project Developer. For each month during the term of this
Agreement, so long as there are energy deliveries made and/or payments due hereunder, Avista
shall prepare a statement based upon Net Delivered Output and Surplus Energy delivered to
Avista. Paynents by Avista for amounts billed shall be paid no later than thel5ft day of the
month following the prior calendar month billing period. If the due date falls on a non-business
day of either Party, then the payment shall be due on the next following business day.
ll.4 Pavments to Avista. If Project Developer is obligated to make any palmrent or
refund to Avista, Avista shall bill Project Developer for such payments. Project Developer shall
pay Avista on or before the 15th day of the month following the prior calendar month billing
period or ten (10) days after receipt of the bill, whichever is later.
11.5 Interest. Any payments by Avista to Project Developer or by Project Developer
to Avista, if not paid in fulIwithin the limitations set forth in Sections 11.3 and 11.4 above, shall
be late. In addition to the remedies for such an event of default pursuant to Section 16, the late-
paylng Party shall be assessed a charge for late payrrent equal to the lesser of one and one half
percent (1.5%) per month, or the maximum rate allowed by the laws of the State of Idaho,
multiplied by the overdue amount.
11.6 Set-Off. Project Developer agrces that Avista may set offany and all amounts
owed by Project Developer to Avista against any current or future papents due Project
Developer under this Agreement.
ll.7 Wire Transfer. All payments shall be made by ACH or wire tansfer in
accordance with furttrer agreement of the Parties.
12. FORCE MAJET]RE
t2.l Neither Party shall be liable to the other Party for, or be considered to be in
breach of or default under this Agreement, on account of any delay in performance due to any of
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the following events or any delay or failure to produce Net Delivered Output, or to, receive or
accept Net Delivered Output due to any of the following events:
12.1.1 Any cause or condition beyond such Party's reasonable control which such
Party is unable to overcome by the exercise of reasonable diligence (including but not
limited to: fire, flood, earthquake, volcanic activity, wind, drought, pandemic or epidemic
and other acts of the elements; court order and act of civil, military or governmental
authority; strike lockout and other labor dispute; riot, insurrection, sabotage or war;
breakdown of or damage to facilities or equipment; electrical disturbance originating in
or transmitted through such Party's electric system or any electric system with which such
Party's system is interconnected; and, act or omission of any person or entity other than
such Party, and Party's contractors or suppliers of any tier or anyone acting on behalf of
such Party); or
12.1.2 Any action taken by such Party which is, in the sole judgment of such
Party, necessary or prudent to protect the operation, performance, integrity, reliability or
stability of such Party's electric system or any electric system with which such Party's
electric system is interconnected, whether such actions occur automatically or manually.
12.2 In the event of any Force Majeure occlurence, the time for performance thereby
delayed shall be extended by a period of time reasonably necessary to compensate for such
delay. Avista shall not be required to pay for Available Output which, as a result of any force
majeure event, is not delivered. Nothing contained in this Section shall require any Party to
settle any strike, lockout or other labor dispute. In the event of a force majeure occrurence which
will affect performance under this Agreement, the nonperforming Party shall provide the other
Party written notice within fourteen (14) days after the occturence of the force majeure event.
Such notice shall include the particulars of the occurence, assurances that suspension of
performance is of no greater scope and of no longer duration than is required by the force
majeure, and that best efforts are being used to remedy its inability to perform.
12.3 Force Majeure shall include an electrical disturbance that prevents any electric
deliveries from occurring at the Point of Delivery.
13. INDEMNITY
13.1 Project Developer shall indemniff, defend and hold harmless Avista, its directors,
officers, employees, agents, and representatives, against and from any and all losses, expenses,
liabilities, claims or actions (hereafter "Loss"), based upon or arising out of bodily injuries or
damages to persons, including without limitation death resulting therefrom, or physical damages
to or losses of property caused by, arising out of or sustained in connection with the construction,
operation or maintenance of the Facility. Subject to Section l8 of this Agreement, Avista shall
indemnifu defend and hold harmless Project Developer, its directors, officers, employees,
agents, and representatives, against and from any Loss, caused by, arising out ofor sustained in
connection with the constuction, operation or maintenance of its electrical system. In the event
that any such Loss is caused by the negligence of both Project Developer and Avista, including
their employees, agents, suppliers and subcontactors, the Loss shall be borne by Project
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Attachment A
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Developer and Avista in the proportion that their respective negligence bears to the total
negligence causing the Loss.
I3.2 TO THE EXTENT PERMITTED BY APPLICABLE LAW, PROJECT
DEVELOPER AND AVISTA EACH WATVE ANY IMMUNITY UNDER EXISTING
WORKER'S COMPENSATION LAW APPLICABLE TO THE ruRISDICTION WHERE THE
FACILITY IS TO BE LOCATED AS NECESSARY TO INDEMNIFY AND HOLD
HARMLESS THE OTHER FROM SUCH LOSS, TO THE EXTENT SET FORTH IN
SECTION 13.I, ABOVE.
13.3 PROJECT DEVELOPER AND AVISTA SPECIFICALLY WARRAI{T THAT
THE TERMS AND CONDITIONS OF THE FOREGOING INDEMNITY PROVISIONS ARE
THE SI.JBJECT OF MUTUAL NEGOTIATTON BY THE PARTIES, AND ARE
SPECIFICALLY AND EXPRESSLY AGREED TO IN CONSIDERATION OF THE
MUTUAL BENEFITS DERTVED I.]NDER THE TERMS OF THE AGREEMENT.
13.4 Other than as expressly provided for in this Agreement, neither Party shall 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, 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.
14. ASSIGNMENT
14.1 Project Developer shall not voluntarily assign its rights or delegate its duties
under this Agreement, or any part of such rights or duties without the written consent of Avista.
Such consent shall not unreasonably be withheld. Further, no assignment by Project Developer
shall relieve or release it to the extent of any of its obligations hereunder. Subject to the
foregoing restrictions on assignments, this Agreement shall be fully binding upon, inure to the
benefit ofand be enforceable by the Parties and their respective successors, heirs and assigns.
14.2 Project Developer shall have the right, subject to the obligation to provide
security hereunder, without the other Party's consent, but with a thirty (30) days prior written
notice to the other Party, to make collateral assignments of its rights under this Agreement to
satisfr the requirernents of any development, construction, or other long term financing. A
collateral assignment shall not constitute a delegation of Project Developer's obligations under
this Agreement, and this Agreement shall not bind the collateral assignee. Any collateral
assignee zucceeding to any portion of the ownership interest of Project Developer shall be
considered Project Developer's successor in interest and shall thereafter be bound by this
Agreement.
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15. NO TJNSPECIFIED TIIIRD PARTY BENEFICIARIES
Except as specifically provided in this Agreement, there are no third party beneficiaries
of this Agreement. Nothing contained in this Agreement is intended to confer any right or
interest on anyone other than the Parties, and their respective successors, heirs and assigns
permitted under Section 14.
16. DEFAULT
16.1 ln the event that either Party fails to perform the terms and conditions set forth in
this Agreement (a breach of or default under this Agreement), including without limitation the
failure to provide Net Delivered Output, when available and deliverable to Avista, at the times or
in the amounts required by this Agreement, the following shall apply:
16.1.1 The non-defaulting Party shall give written notice to the defaulting Party
of the breach of or default under this Agreement.
16.1.2 Where default is for failure to pay sums which are due and payable under
this Agreement, then the defaulting Party shall have thirty (30) days following receipt of
written notice to cure the default, after which period the non-defaulting Parfy may
unilaterally terminate this Agreement.
16.1.3 Except as provided in Sections 16.1.2 and 16.1.4, in all other cases of
breach or default, then the defaulting Party must begin to cure the breach or default
within thirty (30) days and shall complete such cure within ninety (90) days of receipt of
written notice, or else the non-defaulting Party may unilaterally terminate this
Agreement.
16.1.4 IfabreachordefaultoccursunderSections 16.2.1,16.3.1, 16.3.2,16.3.3,
16.3.4, then the non-defaulting party may terminate this Agreement after the respective
cure period(s) as expressly provided for in such Sections.
16.2 Notwithstanding any claim of Force Majeure, Project Developer shall be in
default, and Avista may immediately terminate this Agreement, ifl
16.2.1 Project Developer has abandoned the Facility; or
16.2.2 There have been no energy deliveries to Avista from the Facility for a
period of twelve (12) consecutive months; or
16.2.3 Facility ceases to be a Qualiffing Facility.
16.3 For purposes of this Agreement, and without limiting the generality of section
16.1, a Party shall also be in default if it:
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16.3.1 Becomes insolvent (e.g., is unable to meet its obligations as they become
due or its liabilities exceed its assets); or
16.3.2 Makes a general assignment of substantially all of its assets for the benefit
of its creditors, files a petition for bankruptcy or rcorganization or seeks other relief under
any applicable insolvency laws; or
16.3.3 Has filed against it a petition for banlcruptcy, reorganization or other relief
under any applicable insolvency laws and such petition is not dismissed or stayed within
sixty (60) days after it is filed.
16.4 Any right or remedy afforded to either Party under any provision of this
Agreement on account of the breach of or default under this Agreement by the other Party is in
addition to, and not in lieu of, all other rights or remedies afforded to such Party under any other
provisions of this Agreement, by law or otherwise on account of the breach or default.
17. ARBITRATION
Each Party shall strive to resolve any and all differences during the term of the
Agreement. If a dispute cannot be resolved, each Party shall use arbitation before requesting a
hearing before the IPUC. The arbitation shall be conducted pursuant to the Washington
Uniform Arbitration Act RCW Chapter 7.04A.. The Parties agree that the IPUC shall have
continuing jurisdiction over this Agreement.
18. RELEASE BY PROJECT DEVELOPER
Project Developer releases Avista from any and all claims, Losses, harm, liabilities,
damages, costs and expenses to the extent resulting from any:
18.1 Electric disturbance or fluctuation that migrates, directly or indirectly, from
Avista's electric system to the Facility;
18.2 Intemrption, suspension or curtailment of electric service to the Facility or any
other premises owned, possessed, controlled or served by Project Developer, which intemrption,
suspension or curtailment is caused or contributed to by the Facility or the interconnection of the
Facility with any electric system; or
1E.3 Disconnection, intemrption, suspension or curtailment by Avista pursuant to
terms of this Agreement or any applicable interconnection agreement.
18.4 Disconnection, intemrption, zuspension or curtaihnent of transmission service by
a transmiffing entity or any unforeseen cost or increase in costs to Project Developer imposed by
a transmitting entity.
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19. GOVERNMENTAL AUTHORITY
This Agreement is subject to the rules, regulations, orders and other requirements, now or
hereafter in effect, of all governmental authorities having jurisdiction over the Facility, this
Agreement, the Parties or either of them. All laws, ordinances, rules, regulations, orders and
other requirements, now or hereafter in effect, of governmental authorities that are required to be
incorporated in agreements of this character are by this reference incorporated in this Agreement.
20. EOUAL OPPORTUNITY
Project Developer shall comply with all applicable equal opportunity laws, ordinances,
orders, rules and regulations.
2I. SEYERAL OBLIGATIONS
Except where specifically stated in this Agreement to be otherwise, the duties, obligations
and liabilities of the Parties are intended to be several not joint or collective. This Agreement
shall not be interpreted or construed to create an association, joint venture or parbrership between
the Parties or to impose any partnership obligations or liability upon either Party. Each Party
shall be individually and severally liable for its own obligations under this Agreement. Furttrer,
neither Party shall have any rights, power or authority to enter into any agreement or undertaking
for or on behalf of, to act as to be an agent or representative of, or to otherwise bind the other
Pafiy.
22. IMPLEMENTATION
Each Party shall promptly take such action (including, but not limited to, the execution,
acknowledgement and delivery of documents) as may be reasonably requested by the other Party
for the implementation or continuing performance of this Agreement.
23. NON.WAIVER
The failure of either Party to insist upon or enforce strict performance by the other Party
of any provision of this Agreement or to exercise any right under this Agreement shall not be
construed as a waiver or relinquishment to any extent of such Party's right to assert or rely upon
any such provision or right in that or any other instance; rather, the same shall be and remain in
full force and effect.
24. AMENDMENT
No change, amendment or modification of any provision of this Agreement shall be valid
unless set forth in a written amendment to this Agreement signed by both Parties and
subsequently approved by the Commission.
Page - 19 - FORD HYDRO LIMIED PARTNERSHIP
Attachment A
DRAFT
25. CHOICE OF LAWS
This Agreement shall be construed and interpreted in accordance with the laws of the
State of Idaho.
26. COMPLIANCE WITH LAWS
Both Panies shall comply with all applicable laws and regulations of governmental
agencies having jurisdiction over the Project and the operations of the Parties.
27. VENUE
Any action at law or in equity to enforce the terms and conditions of this Agreement shall
be brought in ldaho.
28. HEADINGS
The section headings in this Agreement are for convenience only and shall not be
considered part of or used in the interpretation of this Agreement.
29. NOTICES
All written notices required by this Power Purchase Agreement shall be mailed or
delivered as follows:
to Avista:Director, Power Supply
Avista Corporation
P.O.Box3727
Spokane, WA 99220
to Project Developer:Ford Hydro Limited Partnership
PO Box 1432
Lewiston,ID 83501
Either Party may change its address specified above by giving the other Party notice of
such change in accordance with this Section. All notices, requests, authorizations, directions or
other communications by a Party shall be deemed delivered when mailed as provided in this
Section or personally delivered to the other Party. Any verbal notice required hereby which
affects the payments to be made hereunder shall be confirmed in writing (certified mail) as
promptly as practicable after the verbal notice is given.
Page - 20 - FORD HYDRO LIMITED PARTNERSHIP
Attachment A
DRAFT
30. EXHIBITS
This Power Purchase Agreement includes the following exhibits which are attached and
incorporated by reference herein:
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Communications and Reporting
Forrn of Engineer's Certification of Operations and Maintenance Policy
Reserved
Description of the Facility
Purchase Prices
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the first date herein above set forth.
FORD IIYDRO LIMITED PARTNERSHIP AVISTA CORPORATION
By:By:
Printed Name: Brenda J. FordTitle:@
Date:
Printed Name: Christooher Drake
Title:
Date:
Page - 2l - FORD HYDRO LIMTTED PARTNERSHIP
(a)
and
Aftachment A
DRAFT
Exhibit A
Communication and Reoortins
During normal business hours, all verbal communications relating to intemrptions
Avista Syste,m Operator [phone]
Alterrate Phone Number: [phone]
Project Developer Russell Ford [phone]
Altenrate Phone Number: [phone]
(b) Outside of normal business hours (nights, weekends, and holidays), all verbal
communications relating to intemrptions and outages shall take place between the following
personnel:
Avista System Operator [phone]
Alternate Phone Number: [phone]
Project Developer Russell Ford [phone]
Alternate Phone Number: [phone]
Erc{IBIT A TO FORD HYDRO LIMITED PARTNERSHIP POWER PURCHASE
AGREEMENT
Page I of 1
outages:
Attachment A
DRAFT
Exhibit B
Form of Ensineer's Certification of Operations and Maintenance Policv
am a Professional Engineer
(Name of Engineer)
registered to practice in the State of Idaho. I have substantial experience in the design,
consffuction and operation of electric power plants of the same fJpe as
(planO,
l. I,
(Title of QF)
sited at
m
(Description of Project Site)
County, State of
2. I have reviewed and/or supervised the review of the Policy for Operation and
Maintenance (O&M Policy) for the plant and it is my professional opinion that, provided said
plant has been designed and built to appropriate standards, adherence to said O&M Policy will
result in the plant's producing at or near the design electrical output, efficiency, and plant factor
for years (length of the proposed Power Sales Contract), barring unforeseeable
Force Majeure.
3. I have no economic relationship to the Designer of said plant and have made my
analysis of the Plans and Specifications independently.
4. I have supplied the owner of the plant with at least one copy of said O&M Policy
bearing my Stamp and the words "CERTIFIED FOR IDAHO P.U.C. SECUzuTY
ACCEPTANCE" on each sheet thereof.
5. I hereby CERTIFY that the above statements are complete, fue, and accurate to
the best of my knowledge and I therefore set my hand and seal below.
Signed and Sealed
DATE:
SIGNATURE
EXHIBIT B TO FORD TTYDRO LIMITED PARTNERSHIP POWER PURCHASE
AGREEMENT
Page I of 1
Attachment A
Exhibit C
Reserved
EXHIBIT C TO FORD IIYDRO LIMITED PARTNERSHIP POWER PURCHASE
AGREEMENT
DRAFT
Attachment A
Exhibit D
Descriotion Of The Facilitv
EXHIBIT D TO FORD HYDRO LIMITED PARTNERSHIP POWER PURCHASE
AGREEMENT
Page I ofl
DRAFT
Jim Ford Creek Hydroelectric Project Features
Diversion Strucfure
52 ft.longr 5 ft. high concrete structure with automated
rack rake, two 30" intakes and conduits leading to valve
house
Valve House
Adjacent to the diversion and containing two 30"
motorized valves and a bifurcation leading into the low
Dressure conduit
Low Pressure
Conduit
71126feet of low pressure steel conduit buried in the
Project access road
Penstock 914 feet of high pressure steel penstock
Powerhouse A concrete substructure with three turbine bays and steel
building measuring approximately 24 feet by 60 feet.
Turbines
(3) 600 rpm two-jet horizontal Pelton turbines
manufacfured by Canyon Industries rated at 600 kW
under 480 ft of head
Generators (3) 600 rpm, three-phase horizontal induction generators
manufactured by Toshiba rated at752 amps at 480 V
Switchgear A fulty automated switchgear and controls package
manufactured by Sierra Electro Development (SEDCO)
Substation A single 3 phase 480/13r800V pad mounted transformer
rated at 2000 KVA
Transmission
8,000 ft of buried 13.8 kV transmission line following the
conduit route, then overhead for a short distance to the
utility interconnect
Access Road 9,000 of gravel access road, the majority of which shares
the conduit alignment
Attachment A
DRAFT
Exhibit E
Purchase Prices
Avoided Cost Rates for Non-Fueled Projects Smaller Than Ten Average Megawatts per
month - Non-Levelized
The pricing information provided herein is based on current avoided cost rates in Idatro and is
subject to change as provided in Section 1l.l of the Agreement.
Period Season I Season 2
Heavy
Load Hour
($/lvlwh)
Light Load
Hour
($/lvtwh)
Heavy
Load Hour
($A,IWh)
Light Load
Hour
($adwh)
2022 65.38 59.98 50.85 46.65
2023 64.75 59.35 50.36 46.16
2024 63.12 57.72 49.09 4.89
EXHIBIT E TO FORD TIYDRO LMITED PARTNERSHIP POWER PURCHASE
AGREEMENT
Page 1 of 1
Attachment A
ExhibitF
Preliminary Generation Estimates
DGIIBIT F TO FORD HYDRO LIMITED PARTNERSHIP POWERPURCHASE
AGREEMENT
Page l of I
DRAFT
Month Amountr ln kWhr
-
Januarv 438.000
Februarv 520.000
March 648.000
April 664.000
May 24&000
Junc 75.000
Jsly g
Auqust a
Seotember a
October 0
November 0
December 180.000