20020415Workpapers for Testimony, Rick Gale.pdf

BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
Case No.IPC-E-02-2
Idaho Power Company
Workpapers
J.Gale
1330 Connecticut Avenue.NWSTEPTOEjOFJSONLLPWashington,DC20036-1795
ATTORNEYS AT LAW Telephone (@2.429.3000
Facsimile 202.429.3902
www.steptsa.com
202.429.6234
gmorgansfasteptoe.com
Mav 14.2001
David P.Boergers,Secretarv
Federal Energv RegulatorvCommission
888 First Street,N.E.
Washington,D.C.20426
Re:ldaho Power Company and IDACORPEnergy Solutions,LPDocketNo.ER01-1329-001
Dear Mr.Boergers:
Enclosed for filing are an original and five copies of ldaho Power Company's(ldaho Power)and IDACORP Energv Solutions,LP's (IES)(jointly,Applicants)Compliance Filing in the above-captioned proceeding.The filing is being submitted incompliancewiththeCommission's April 27,2001 order in this proceeding.Idaho PowerCo.and lDACORP Energy Solutions,LP,95 FERC ¶61,147 (2001).
As directed by the Commission,AttachmentsA and B to this letter modifv theAgreementforElectricitySupplyManagementServicesBetweenIdahoPowerCompanyandIDACORPEnergySolutions,LP (Service Agreement)to comply with Order No.614.The only change to the Service Agreement that is reflected in AttachmentsA and BistheadditionofthedesignationsrequiredbyOrderNo.614.Attachment A designatestheServiceAgreementasServiceAgreementNumber48underIdahoPower's FERCElectricTariff.First Revised Volume No.6,and Attachment B designates the ServiceAgreementasServiceAgreementNumber1underIES'FERC Electric Tariff,OriginalVolumeNo.1.
For real-time (hourly)transactions between Idaho Power and IES,theCommission's order required the use of the prices required in GPU Advanced Resources,
81 FERC ¶61,335 (1997)and Detroit Edison Co.,80 FERC ¶61,348 (1997).In DetroitEdison,the Commissionstated that if Detroit Edison sold power to its marketing affiliateataratebelowthemarketrate,Detroit Edison's captive customers would be harmed.Forthisreason,the Commission required Detroit Edison to sell power to its marketingaffiliateatapricethatisnolowerthanthepriceDetroitEdisonchargesnon-affiliates.InGPUAdvancedResources,the Commission indicated that if GPU purchased power fromitsmarketingaffiliateatarateabovethemarketrate,GPU's captive customers would beharmed.The Commission required GPU's marketing affiliate to sell power to GPU at the
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David P.Boergers,Secret -
Federal Energv RegulatorvCommission
May 14.2001
Page 2
lowest price for energv sold to GPU by non-affiliates.In each case.the benchmark pricefortheinter-affiliate sales is the price between the franchised utility and non-affiliates.
Applicants have included in this filing revised Service Agreements that providethatintheeventidahoPowersellspowertoanon-affiliate for an hourly transaction,itwillnotsellpowertoIESforthathouratapricebelowthepricechargedtothenon-affiliate(s),and that in the event idaho Power purchases power from a non-affiliatefor anhourlytransaction.it will not purchase power from IES for that hour at a price above thepricepaidtothenon-affiliate(s).These revised Service Agreements are included asAttachmentsC(ldaho Power)and D (IES)to this filing.Attachment E to this filing is ared-lined copy of the page to the Service Agreement that would be revised byAttachmentsCandD.
As Applicantsexplainedin their Application,IES will provide wholesalemarketingservicestoJdahoPower,and IES rather than Idaho Power will be entering intoreal-time transactions in the wholesale market (IES will serve as a non-exclusive brokerfortransactionswithadurationthatexceedoneday).As a result,Applicantsdo notanticipatethattherewillbetransactionsbetweenIdahoPowerandnon-affiliates thatwouldserveasthebenchmarkrequiredunderDetroitEdisonandGPUAdvancedResources.Applicantshave submitted Attachments C and D,discussed above,to complywiththeCommission'srule that a compliance filing is limited to those changes orderedbytheCommission,Southern Company Services,Inc.,63 FERC ¶61,217 (1993).However.in view of the fact that Applicantsanticipate that real-time transactions withnon-affiliates will be entered into by IES rather than by Idaho Power,Applicants aresubmittinganahernativeversionoftheServiceAgreementthatusesIES'purchases toandsalesfromnon-affiliates as the benchmark for real-time transactions between IES andIdahoPower.This is consistent with the proposal that ldaho Power and lES filed onFebruary26,2001 (which based the market price on the weighted average of the real-time prices at which IES bought and sold power to non-affiliates,see Applicationat 20),except that it uses the lowest/highestpricing regime ordered by the Commission insteadoftheaveragepricemethodproposedbyldahoPowerandIES.These revised ServiceAgreementsareincludedasAttachmentsF(ldahoPower)and G (IES)to this filing.Attachment H to this filing is a red-lined copy of the page to the Service Agreement thatwouldberevisedbyAttachmentsFandG.
The rate schedule changes included in this filing are without prejudice to IdahoPower's right to submit a new Section 205 filing changing this provision,as discussed bytheCommissiononpage2ofitsorder.
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David P.Boergers,Secre rv
Federal Energv Regulato,y CommissionMay14.2001
Page 3
Attachment ]to this letter is a paper copy of a Notice of Filing suitable forpublicationintheFederalRegister.We are also enclosing an electronic copy of thisfiling.
Please do not hesitate to contact the undersigned if there any questions about thisfiling.
Respectfullysubmitted,
Viet H.Ngo
Steptoe &Johnson LLP
1330 Connecticut Avenue,N.W.
Washington,D.C.20036
Barton L.Kline
Idaho Power Company
1221 West ldaho Street
Boise,ldaho 85702
Attomeysfor Idaho Power Company andIDACORPEnergySolutions,LP
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Attachment A
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ldaho Power Company Service Agreement No 48FERCElectricTarifT
First Revised Volume No.6
AGREEMENT FOR ELECTRICITY SUPPLY MANAGEMENTSERVICES
BETWEEN
IDAHO POWER COMPANYAND IDACORP ENERGY SOLUTIONSLP
THIS ELECTRICITYSUPPLY MANAGEMENTSERVICES AGREEMENT
(the "Agreement")is made and entered into as of the I day of M ,
2000,by and between IDAHO POWER COMPANY ("Idaho Power"),an Idaho
corporation,and IDACORP ENERGY SOLUTIONS LP,dba IDACORP ENERGY
("lES'),a Delaware Limited Partnership.Idaho Power and IES may also be referred to
in this Agreementindividuallyas "Party"or collectivelyas "Parties.'Idaho Power and
IES are both wholly-ownedsubsidiaries of IDACORP,Inc.
RECITALS
A.Idaho Power owns and operateselectric generatingequipmentand
transmission facilities to supply the electric load and service reliabilityrequirementsof
its customers.
B.Idaho Power performswholesale electricity marketingactivities to
acquire electricity to supplementits own electric generationresources and to optimize
the operationof its electric generation resources.These activities provideIdaho
Power's customers with additionalsystem reliabilityand with additional revenue offset
which is used to reduce their overall cost of energy.
Issued by:John P.Prescott Effective:April 28,2001Issuedon:Feruary 26,2001
PAGE 5
C.lES is engagedin the marketingof electricity and natural gas and
has the capability to provide electricity and natural gas supplymanagementservices.
D.Idaho Power and IES are both wholly-ownedsubsidiariesof
IDACORP,Inc.
E.Idaho Power believes there are cost-savingsand risk mitigation
benefits that could be realized by contracting with IES to provideelectricitymarketing
and other electricity supplymanagementservices.
AGREEMENT
1.Services.lES will perform those electricity supplymanagement
services for idaho Power (the "Services")that are more particularlydescribed in the
"Statement(s)of Services"which are attached to this Agreement.Each Statementof
Services shall be construed as a part of this Agreement.If there are any conflicts
between the terms and conditions contained in the body of this Agreementand the
terms and conditions in a Statementof Services,the terms in the Statementof Services
shall prevail.
2.Te_nn.This Agreementshall remain in effect for five (5)years from
the date final approvalfrom the Commissionsis obtained in accordance with Section 9
herein ("Initial Term").Followingthe Initla!Term,this Agreementwill be automatically
extended for additional two (2)year terms ("ExtensionTerms")unless either Party
cancels this Agreementby giving notice of cancellation at least six (6)months prior to
the expiration of the Initial Term or any ExtensionTerm.
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3.Compensation.lES's compensationfor providing the Services
provided shall be in accordance with the schedules set forth in each Statementof
Services.
4.Cooperation.Consistentwith all applicable Commission-approved
Standards of Conduct and/or Codes of Conduct,each Party will provide the other Party
with such information that may be reasonably required by the other to manage their
activities under this Agreement.Each Party shall designatean officer or senior
manager to facilitate management communication between the Parties (°Oversight
Managers").The OversightManagers shall be the authorized representatives of the
Parties and shall have the responsibility of coordinating with the other Party's Oversight
Manager regarding IES provision of the Services.Each Party understands that
effective managementof this Agreementdependson the OversightManagers'timely
and effective decision-makingand approvalsof proposedactions.Each Party shall
inform the other in writing of the name and any limitations on the scope of authority of
.its OversightManager.
5.Invoicing and Paymerg.Unless otherwise specificallyagreed in a
Statement of Service,the Parties shall submit invoices monthlyfor Services provided
and reimbursable expenses incurred throughthe end of each month.Invoices will
include informationreasonablyrequired to verify the items billed.Bills will be payable
fifteen (15)days followingthe date of the rendered bill (Due Date").Interest will accrue
on all payments due and unpaid after the Due Date until paid at the rate of one percent
(1%)per month.
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6.Commission Jurisdiction.The respective rights and obligations of
the Parties hereunder shall be subject to the jurisdictionand regulatory authorityof the
Idaho Public Utilities Commission (IPUC),the Oregon Public Utility Commission
(OPUC),the Public UtilityCommission of Nevada(PUCN),and the Federal Energy
RegulatoryCommission (FERC).The IPUC,the OPUC,the PUCN and the FERC are
hereinafter collectivelyreferred to as 'Commissions."
7.Codes of Conduct.At all times the Parties shall observe the
Standards of Conduct and/or Codes of Conduct approvedby the Commissions.
8.Compliance With Laws and Requistions.lES shall observe all
applicablelaws,ordinances,rules and regulationsrelatingto delivery of the Services,
and shall procure and maintain in force,at its sole expense,all registrations,permits,
licenses,and approvalsrequired by law or govemmental authorityto performthe
Services.
9.CommissionApproval.This Agreement and any future
amendments shall not become effective until the Commissionshave issued their
respectivefinal orders approving the Agreementor any future amendments.If the final
orders of any of the Commissionsinitially approvingthis Agreementcontain material
terms or conditions that either Party finds unacceptable,within fourteen (14)days of the
issuance of the order,the adverselyañected Party will have the right to cancel this
Agreementby givingthirty (30)days written notice of cancellation to the other Party.
10.Future Requiatory Authority.If in the future the laws of the United
States or the laws of the states of Idaho,Oregon or Nevada are modifiedto materially
reduce or eliminate the FERC's,the IPUC's,the PUCN's or the OPUC'sauthority to
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regulate all or any portion of the activities addressed by this Agreement,the Parties
agree that only those portions of this Agreementwhich by their terms are subject to the
continuing jurisdiction of the FERC,the IPUC,the PUCN or the OPUC shall continue to
be subjectto Section 6 above.
11.General Provisions.
11.1 Successors and Assigns.This Agreementand all the terms
and provisions hereof shall be binding upon and inure to the benefit of the respective
successors and assigns of the Parties hereto,exceptthat no transfer by merger or
otherwise,nor any assignmentshereof by IES shall become effective without the prior
written consent of Idaho Power being first obtained.Such consent shall not be
unreasonablywithheld or delayed.
11.2 Taxes.IES shall be responsiblefor paymentof all taxes,
including,but not limited to,sales,use,gross receipts,transaction,business and
occupation or any other taxes,licenses or fees assessed by any taxingjurisdiction
directly associated with providing the Services.If either Party is entitled to an
exemptionfrom any such taxes or fees,it shall fumish the other Party satisfactory
supporting documentation.IES shall include in its invoices for Services provided
pursuantto this Agreement,and Idaho Power will reimburse IES for any taxes (except
taxes based on IES payroll or net income),licenses,or fees assessed or to be
assessed against IES by any taxingjurisdiction,directly as a result of providingthe
Services,including,but not limited to,sales,use,gross receipts,transactions or
business and occupation taxes.
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11.3 Warranty of Title.Each Party warrants that it has or will
have title to all electrical energy or capacity or transmission capability purchased or sold
pursuantto this Agreementand that such products will be free and clear of all liens,
encumbrances and adverse claims.
11.4 Venue.This Agreementshall be governedand interpreted
in accordance with the laws of the State of New York and venue for any litigationshall
be the Fourth Judicial District Court for Ada County in Boise,Idaho.
11.5 Changes.Any change,modification or afteration of this
Agreementshall be in writing,signed by the Parties.
11.6 Limitation of Liability.In no event will either Party be liable
hereunder for indirect,consequential,punitiveor exemplarydamages.
IN WITNESS WHEREOF,the Parties have executed this Agreementthe
day and year first above written.
IDAHO.POWER COMPANY("ldaho Power")
By .
IDACORP ENERGY SOLUTIONSLP
dba IDACORP ENERGY (IES)
For IDACORP,Inc.GeneralPartner
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ATTACHMENT1
STATEMENTOF SERVICES NO.1
ELECTRICITY SUPPLYMARKETINGAND MANAGEMENT
1.Definitions
When used in this Statementof Services No.1,the followingterms have thefollowingmeanings:
Power Marketing means the sale and purchase of electric capacity andenergy,togetherwith associated transmission services and ancillaryservices.Power Marketingincludes providing all of the individual ServicesdescribedinSections2and3ofthisStatementofServicesNo.1.
System Resources means the electric generation facilities owned byIdahoPower,the electrical energy and capacity generatedby thosefacilitiesorpurchasedbyIdahoPowerfromthirdparties,and anyassociatedAncillaryServices.For purposes of this Agreement,SystemResourcesexpresslyexcludetransmissionfacilitiesandtransmissioncapabilityownedoracquiredbycontractbyIdahoPower.
Native Load means the electric loads of Idaho Power's retall customerslocatedinIdahoPowerscertificatedareainthestatesofIdaho,OregonandNevadaandtheloadsofIdahoPowersfull-requirementswholesalecustomers,including the City of Weiser,Idaho.
Terms defined in the main body of the Agreementwill have the samemeaningsinthisStatementofServices.
2.General Description of Services to be Provided.
2.1 IES will provide Idaho Power with the Power Marketingand SystemResourcemanagementfunctions("Services")generallydescribed in thisSection2andmoreparticularlydescribedinSection3below.The PartiesintendthattheServicesprovidedunderthisStatementofServicesNo.1willincludethosePowerMarketingandassociatedSystemResourcemanagementservicesnecessarytoallowIdahoPowertosupplyitsNativeLoadcost-effectivelyand reliably.To accomplishthat goal,the Serviceswillgenerallyinclude:(1)the Power Marketing activities associated with
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marketingSystem Resources that are surplus to Native Loadrequirementsandmakingpurchasesfromthemarkettosupply NativeLoadswhenIdahoPower's loads exceed its System Resource capabilityorwhenmarketpricesarebelowthevariablecostofSystemResources;(2)Managementof System Resources as necessary to optimize thePowerMarketingactivitiesdescribedherein;and (3)acquiring from IdahoPower's Delivery Business Unit the right to use Idaho Power-ownedtransmissioncapabilityforthePowerMarketingandSystemResourcemanagementactivitiesdescribedherein;and (4)the following:
2.1.1 Real-Time Power Marketing:Real-time power marketing istransactedonafrequentbasisoccurringinincrementsfrom aminimumofafewminutesuptoamaximumof12hoursahead.IES will provide twenty-fourhour staffed coverage of hourty
resource and transmission managementfor balancing resourcesandloads.
2.1.2 Intramonth Power Marketing:Intramonth marketingis transacted intimeincrementsfromaminimumofonedaytoamaximumofonemonth.IES will providefull-time staff coverage for day-aheadbalancingofgeneration,transmission and load.
2.1.3 HedgingManagement:Hedges are executed with the use offinancialinstrumentssuchasforwards,swaps,futures or optionscontracts.Financial instruments will be managedby a full-timeIESstafftominimizetheriskoffinanciallossfromanadversepricechangeinacommoditymarket.
2.1.4 Third-PartyTransmissionServiceg:The provisionof transmissioncapabilitytodeliverelectricalenergyfromthegenerationsourcestotheagreed-upon destination(s).IES will be responsibleforacquiringthird-party transmission to effectuate the purchases andsalesdescribedinSection3.
2.1.5 Ancillary Services:Interconnected operationsservices necessarytoeffecttransfersofelectricitybetweenpurchasingandsellingentities.Includes load following,reserves,voltage control andimbalancemanagement.IES will acquire such ancillary servicesasarerequiredtoeffectuatethepurchasesandsalesdescribedinSection3.
2.1.6 Scheduling/Operations:Schedulingand Operationsincludes theprovisionofbackofficesupporttomarketinginitiativesonbehalfofIdahoPower.A full-time IES staff confirms purchasesand sales,administerscontracts,wodas with Idaho Power's dispatchers to
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scheduleenergy transactions,and resolves discrepancies betweenthenetofallsales,purchases and wheelingtransactions.The IESstaffwillalsoprovideISsupporttoPowerManagementandSystemResourcemanagement.
2.1.7 Risk Management:Risk Managementactivities reduce theoccurrenceoflossesthatwouldcauseIdahoPowertoincur highercostsforsupplyingNativeLoad.Risk Managementwill beprovidedbyafull-time IES staff that will identify the source ofexposure,quantify the exposure,assess the capacity for managingtheexposureintemallyandrecommendtheappropriateriskmanagementproductstotheOversightManagers.Risks to bemanagedincludepowerprices,volatility,interest rates,counter-party credit risk and foreign currency fluctuations.
2.1.8 Finance and Accounting:Finance and Accountingwill be providedbyafull-time IES staff that providesfinancial consultation andanalysisforPowerMarketingactivities.
3._Specific Description of Power Marketing and System ResourceManagementServicestobeProvidegi
3.1 Purchases to Supply Native Load:As a part of the Services providedunderthisStatementofServicesNo.1,IES will undertake PowerMarketingactivitiesasnecessarytoacquireforsubsequentpurchase byidshoPowersufficientenergyandcapacitytosupplyNativeLoadwhenalloftheNativeLoadcannotbeservedbySystemResourcesorwhenmarketpricesfordeliveredelectriccapacityandenergyarelessthanthecostofSystemResources.The sales price for delivered energy andcapacityacguiredbyIdahoPowerfromIEStosupplyNativeLoadwill beequaltotheMarketPricedeterminedinaccordancewithSection5.Under this Section 3.1,IES may also broker a purchase and saletransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
3.2 Sale of SurplusSystem Resources:As a part of the ServicesprovidedunderthisStatementofServicesNo.1,IES will purchase from IdahoPowerallofthegenerationfromtheSystemResourcesthatissurplus totheneedsofNativeLoad.The amount paid to Idaho Powerfor surplusSystemResourcegenerationwillbetheMarketPriceatthetimeofsaledeterminedinaccordancewithSection5.Under this Section3.2 lES mayalsobrokerapurchaseandsalestransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
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3.3 Ancillary Services and Third-Party Transmission:All Ancillary ServicesandThird-Party Transmission Services necessaryfor Power Marketing,both for supplying Native Load requirements and sellingsurplus SystemResourcesshallbeacquiredandmanagedbylEStoeffectuatethepurchasesandsalesdescribedabove.Costs of acquiring AnciliaryServicesandThird-Party Transmissionincurredfor Power MarketingtosupplyNativeLoadshallbeincludedintheMarketPrice.
3.4 Hedginq Transactions:From time to time IES may enter into hedgingtransactionsasapartoftheServicestooptimizeSystemResourcemanagement.Hedging transactions undertaken as a part of the Services
.shall be used exclusivelyfor hedge (risk reducing)transactions.Nospeculative(risk accumulating)transactions will be executed on behalf ofIdahoPower.Hedge transactions will only be undertaken with the priorconsultationandapprovaloftheIdahoPowerOversightManager.
3.5 Brokering Transactions:From time to time IES may act as a brokertoarrangepowerpurchaseorsalestransactionsbetweenIdahoPowerandthirdparties.If Idaho Powerdesires to enter into forward transactions,IES will only participate as a broker.Idaho Power will not enter intoforwardtransactionsbrokeredbyIESwithoutthepriorconsultationandapprovaloftheIdahoPowerOversightManager.
4.Priority For Use of System Resources
4.1 At all times and under all conditions IES will providethe Services in amannerthatwillprovideNativeLoadcustomerswiththefirstpriorttyrighttoutilizeallavailablecapacityandenergyfromtheSystemResourcesandtoutilizeanyIdahoPower-ownedor third-party-supplied transmissionasnecessarytosupplyNativeLoadonafirst-priority basis.
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5.Market Prices
5.1 The Market Prices referred to in this Statementof Services shall be the
actual market settlementprices based on the appropriate published indexpriceorthird-party quotes for the product,taken from the closest relevantproductmarketfortheapplicabletimeandlocationofthetransaction.Forexample,during the spring and winter seasons,the MarketPrice forelectricenergyismostlikelytobebasedontheDowJonesMid-ColumbiaElectricityPriceIndex("Mid-C").During the early summer and fall ,theMarketPriceforelectricenergyismostlikelytobebasedontheDow
Jones Palo Verde Price index (°Palo Verde").The actual computationoftotalMarketPricewillbecomputedinaccordancewiththefollowing:
5.1.1 For Term and Intramonth transactions,the market settlement pricewillbeinaccordancewiththeformulaesetoutonTable1attachedtothisStatementofServicesNo.1.
5.1.2 For ReakTime Transactions,the market settlement price will be anhourfysettlementpriceequaltotheaverageofallreaWtime
transaction prices recorded for that hour.
5.1.3 For Ancillary Services,the actual price paid by IES for AncillaryServicesusedtosupplyNativeLoads.
6.lES Compensation For Power Services Provide¢
6.1 For providingthe Power Marketingand SystemResource managementservicesunderthisStatementofServicesNo.1;IES will be paid$300,696.30per month.
7.Pricinq For Non-Power Goods and Services Provide¢
7.1 The prices for all non-power goods and services purchasedand soldbetweenIESandIdahoPowershallbedeterminedinaccordancewith thethen-current Affiliated Services Agreement between the Parties asprovidedtotheIdahoPublicUtilitiesCommissionpursuanttoIPUC Order
No.27348.For the year 2000,lES will pay Idaho Power $87,293.53 permonthfornon-powergoods and services.
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a
8.System Resources
8.1 Idaho Power will own,operate,maintain and dispatch the electricgenerationandtransmissionfacilitiesincludedinSystemResources.lESwilltakesuchstepsasmayberequiredtoobtainfromIdahoPower'sDeliveryBusinessUnittherighttouseIdahoPower-owned transmissioncapabilityforPowerMarketingunderthisAgreement.
9.Allocation of Counter-PartyDefaults.
9.1 The Parties recognize that wholesale market transactions carry a risk ofcounter-party default.Upon such default,the Parties will prt>rate any lossbasedonIdahoPower's share of IES's total transactionswith thedefaultingpartyateachdeliverypointwhereadefaultoccurs.
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TABLE 1
STATEMENTOF SERVICES NO.1
Purchases (using Mid-C Index for intramonth deals,using Mid-C quote for termdeals)
TransferCost =(Mid-Cu x TotalLL MWh)+(Mida x Total HL MWh)+TransmissionCostwhere'TransmissionCost'is the sum of firm transmission tariff rate of atransmissionproviderthathasavailabletransmissioncapacityfromMid<and cost oftransrnissionlosseschargedbythetransmissionprovider.
Sales (using Mid-C Index for intramonth deals,using Mid-C quote for term deals)
TransferCost =(Mid-Cu price x Total LL MWh)+(Mida Price x Total HL MWh)-TransmissionCost where 'TransmissionCost'is the sum of firm transmissiontariff rateofatransmissionproviderthathasavailabletransmissioncapacitytoMid-C and cost oftransmissionlosseschargedbythetransmissionprovider.
Purchases (using Palo Verde index for intramonth deals,using Palo Verde quotefortermdeals)
TransferCost =(Palo Verdeu Price x Total LL MWh)+(Palo Verdem Price x Total HLMWh)+Transmission Cost where 'TransmissionCost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacityfromPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
Sales (using Palo Verde index for intramonth deals,using Palo Verde quote fortermdeals)
TransferCost =(Palo VerdeuPrice x Total LL MWh)+(Palo Verden Price x Total HLMWh)-TransmissionCost where 'TransmissionCost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacitytoPeloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
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Attachment B
PAGE 18
IDACORP Energy Solutions,L.r.Service Agreement No.1FERCElectricTariff
Original Volume No.1
AGREEMENTFOR ELECTRICITYSUPPLY MANAGEMENTSERVICES
BETWEEN
IDAHO POWER COMPANY AND IDACORP ENERGYSOLUTIONS LP
THIS ELECTRICITYSUPPLY MANAGEMENT SERVICES AGREEMENT
(the "Agreement")is made and entered into as of the day of ,
2000,by and between IDAHO POWER COMPANY ("Idaho Power"),an Idaho
corporation,and IDACORP ENERGY SOLUTIONS LP,dba IDACORP ENERGY
("lES"),a Delaware Limited Partnership.Idaho Power and IES may also be referred to
in this Agreement individually as "Party"or collectivelyas "Parties."Idaho Power and
IES are both wholly-ownedsubsidiaries of IDACORP,Inc.
RECITALS
A.Idaho Power owns and operateselectric generatingequipmentand
transmission facilities to supply the electric load and service reliability requirementsof
its customers.
B.Idaho Power performswholesale electricity marketingactivities to
acquire electricityto supplementits own electric generation resources and to optimtre
the operation of its electric generationresources.These activities provideIdaho
Power's customers with additional system reliabilityand with additional revenue offset
which is used to reduce their overall cost of energy.
Issued by:Joe M.Holmes Effective:April 28,2001lssuedon:Feruary 26,2001
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AGREEMENTFOR ELECTRICITYSUPPLY MANAGEMENTSERVICES
BETWEEN
IDAHO POWER COMPANYAND IDACORP ENERGY SOLUTIONS LP
THIS ELECTRICITYSUPPLY MANAGEMENT SERVICES AGREEMENT
(the "Agreement")is made and entered into as of the I day of M ,
2000,by and between IDAHO POWER COMPANY ("Idaho Power"),an Idaho
corporation,and IDACORP ENERGY SOLUTIONS LP,dba IDACORP ENERGY
("IES"),a Delaware Limited Partnership.Idaho Power and IES may also be referred to
in this Agreementindividuallyas "Party"or collectivelyas "Parties."idaho Power and
IES are both wholly-ownedsubsidiaries of IDACORP,Inc.
RECITALS
A.Idaho Power owns and operates electric generatingequipmentand
transmission facilities to supply the electric load and service reliabilityrequirementsof
its customers.
B.Idaho Power performs wholesale electricity marketingactivities to
acquire electricity to supplementits own electric generationresources and to optimize
the operation of its electric generationresources.These activities provide Idaho
Power's customers with additionalsystem reliabilityand with additional revenue offset
which is used to reduce their overall cost of energy.
PAGE 20
C.IES is engagedin the marketing of electricity and natural gas and
has the capability to provide electricity and natural gas supplymanagementservices.
D.Idaho Powerand IES are both wholly-ownedsubsidiariesof
IDACORP,Inc.
E.Idaho Power believes there are cost-savingsand risk mitigation
benefits that could be realized by contracting with IES to provide electricitymarketing
and other electricity supply managementservices.
AGREEMENT
1.Services.lES will perform those electricity supply management
services for idaho Power (the "Services")that are more particulattydescribed in the
"Statement(s)of Services"which are attached to this Agreement.Each Statementof
Services shall be construed as a part of this Agreement.If there are any confilcts
between the terms and conditions contained in the body of this Agreementand the
terms and conditions in a Statementof Services,the terms in the Statementof Services
shall prevall.
2.Teng.This Agreementshall remain in effect for five (5)years from
the date final approvalfrom the Commissionsis obtained in accordance with Section 9
herein ("InitialTerm").Followingthe initial Term,this Agreementwill be automatically
extended for additional two (2)year terms ("ExtensionTerms")unless either Party
cancels this Agreementby giving notice of cancellation at least six (6)months prior to
the expirationof the Initial Term or any ExtensionTerm.
2 PAGE 21
3.Compensation.lES's compensationfor providing the Services
provided shall be in accordance with the schedules set forth in each Statementof
Services.
4.Cooperation.Consistentwith all applicable Commission-approved
Standards of Conduct and/or Codes of Conduct,each Party will provide the other Party
with such information that may be reasonablyrequired by the other to manage their
activities under this Agreement.Each Party shall designatean officer or senior
manager to facilitate managementcommunication between the Parties ("Oversight
Managers").The OversightManagers shall be the authorized representativesof the
Parties and shall have the responsibilityof coordinatingwith the other Party's Oversight
Manager regarding IES provision of the Services.Each Party understands that
effective managementof this Agreementdepends on the OversightMariagers'timely
and effective decision-makingand approvalsof proposedactions.Each Party shall
inform the other in writing of the name and any limitations on the scope of authority of
.its OversightManager.
5.Invoicinq and Payment.Unless otherwise specifically agreed in a
Statement of Service,the Parties shall submit invoices monthlyfor Services provided
and reimbursable expenses incurred throughthe end of each month.Invoices will
include information reasonablyrequired to verify the items billed.Bills will be payable
fifteen (15)days followingthe date of the rendered bill (Due Date").Interestwill accrue
on all payments due and unpaid after the Due Date until paid at the rate of one percent
(1%)per month.
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6.Commission Jurisdiction.The respective rights and obligations of
the Parties hereunder shall be subjectto the jurisdiction and regulatory authority of the
Idaho Public Utilities Commission (IPUC),the Oregon Public Utility Commission
(OPUC),the Public Utility Commission of Nevada (PUCN),and the Federal Energy
RegulatoryCommission (FERC).The IPUC,the OPUC,the PUCN and the FERC are
hereinafter collectivelyreferred to as "Commissions."
7.Codes of Conduct.At all times the Parties shall observe the
Standards of Conduct and/or Codes of Conduct approvedby the Commissions.
8.Compliance With Laws and Requistions.IES shall observe all
applicable laws,ordinances,rules and regulationsrelatingto deliveryof the Services,
and shall procure and maintain in force,at its sole expense,all registrations,permits,
licenses,and approvalsrequired by law or govemmentalauthority to perform the
Services.
9.CommissionApproval.This Agreementand any future
amendments shall not become effective until the Commissions have issued their
respective final orders approvingthe Agreementor any future amendments.If the final
orders of any of the Commissionsinitially approvingthis Agreementcontain material
terms or conditions that either Party finds unacceptable,within fourteen(14)days of the
issuance of the order,the adverselyaffected Party will have the right to cancelthis °
Agreementby giving thirty (30)days written notice of cancellation to the other Party.
10.Future RequistoryAuthority.If in the future the laws of the United
States or the laws of the states of Idaho,Oregon or Nevada are modifiedto materially
reduce or eliminate the FERC's,the IPUC's,the PUCN's or the OPUC'sauthority to
4 PAGE 23
regulate all or any portion of the activities addressedby this Agreement,the Parties
agree that only those portions of this Agreementwhich by their terms are subjectto the
continuing jurisdictionof the FERC,the IPUC,the PUCN or the OPUC shall continue to
be subjectto Section 6 above.
11.General Provisions.
11.1 Successors and Assigny.This Agreementand all the terms
and provisions hereof shall be binding upon and inure to the benefit of the respective
successors and assigns of the Parties hereto,except that no transfer by merger or
otherwise,nor any assignments hereof by IES shall become effective without the prior
written consent of Idaho Power being first obtained.Such consent shall not be
unreasonablywithheld or delayed.
11.2 Taxeg.IES shall be responsiblefor paymentof all taxes,
including,but not limited to,sales,use,gross receipts,transaction,business and
occupation or any other taxes,licenses or fees assessed by any taxingJurisdiction
directly associated with providing the Services.If either Party is entitled to an
exemptionfrom any such taxes or fees,it shall fumish the other Party satisfactory
supportingdocumentation.IES shall include in its invoices for Services provided
pursuantto this Agreement,and Idaho Power will reimburse IES for any taxes (except
taxes based on IES payroll or net income),licenses,or fees assessed or to be
assessed against IES by any taxing jurisdiction,directly as a result of providingthe
Services,including,but not limited to,sales,use,gross receipts,transactions or
business and occupation taxes.
5 PAGE24
11.3 Warranty of Title.Each Party warrants that it has or will
have title to all electrical energy or capacity or transmission capability purchased or sold
pursuant to this Agreementand that such products will be free and clear of all liens,
encumbrances and adverse claims.
11.4 Venue.This Agreementshall be govemedand interpreted
in accordance with the laws of the State of New York and venue for any litigation shall
be the Fourth Judicial District Court for Ada County in Boise,Idaho.
11.5 Changes.Any change,modification or alteration of this
Agreementshall be in writing,signed by the Parties.
11.6 Limitation of Liability.In no event will either Party be liable
hereunder for indirect,consequential,punitiveor exemplarydamages.
IN WITNESS WHEREOF,the Parties have executed this Agreementthe
day and year first above written.
IDAHO.POWER COMPANY
(Idaho Power")
Bv
Its %m mM od6,twrol (mm,l
IDACORP ENERGY SOLUTIONSLP
dba IDACORP ENERGY (IES)
For IDACORP,Inc.GeneralPartner
6 PAGE25
ATTACHMENT1
STATEMENTOF SERVICES NO.1
ELECTRICITYSUPPLY MARKETINGAND MANAGEMENT
1.Definitiony
When used in this Statementof Services No.1,the followingterms havethefollowingmeanings:
Power Marketinq means the sale and purchase of electric capacity andenergy,togetherwith associated transmission services and ancillaryservices.Power Marketingincludes providing all of the individualServicesdescribedinSections2and3ofthisStatementofServicesNo.1.
System Resources means the electric generation facilities owned byIdahoPower,the electrical energy and capacity generatedby thosefacilitiesorpurchasedbyIdahoPowerfromthirdparties,and anyassociatedAncillaryServices.For purposes of this Agreement,SystemResourcesexpresslyexcludetransmissionfacilitiesandtransmissioncapabilityownedoracquiredbycontractbyIdahoPower.
Native Load means the electric loads of Idaho Power's retall customerslocatedinIdahoPower's certificatedarea in the states of Idaho,OregonandNevadaandtheloadsofIdahoPower's full-requirementswholesalecustomers,including the City of Weiser,Idaho.
Terms defined in the main body of the Agreementwill have the samemeaningsinthisStatementofServices.
2.General Description of Services to be Provided.
2.1 JES will provide idaho Power with the Power Marketingand SystemResourcemanagementfunctions(Services")generallydescribed in thisSection2andmoreparticularlydescribedinSection3below.The PartiesintendthattheServicesprovidedunderthisStatementofServicesNo.1willincludethosePowerMarketingandassociatedSystemResourcemanagementservicesnecessarytoallowIdahoPowertosupplyitsNativeLoadcost-effectivelyand reliably.To accomplishthat goal,the Serviceswillgenerallyinclude:(1)the Power Marketingactivitiesassociatedwith
PAGE 26
marketingSystem Resources that are surplusto Native LoadrequirementsandmakingpurchasesfromthemarkettosupplyNativeLoadswhenIdahoPower's loads exceed its System Resource capabilityorwhenmarketpricesarebelowthevariablecostofSystemResources;(2)Managementof System Resources as necessary to optimize thePowerMarketingactivitiesdescribedherein;and (3)acquiring from IdahoPower's Delivery Business Unit the right to use Idaho Power-ownedtransmissioncapabilityforthePowerMarketingandSystemResourcemanagementactivitiesdescribedherein;and (4)the following:
2.1.1 Real-Time Power Marketing:Real-time power marketingistransactedonafrequentbasisoccurringinincrementsfrom aminimumofafewminutesuptoamaximumof12hoursahead.IES will provide twenty-fourhour staffed coverage of houriyresourceandtransmissionmanagementforbalancingresourcesandloads.
2.1.2 Intramonth Power Marketing:Intramonth marketingis transacted intimeincrementsfromaminimumofonedaytoamaximumofonemonth.IES will provide full-time staff coverage for day-aheadbalancingofgeneration,transmission and load.
2.1.3 Hedqing Management Hedgesare executed with the use offinancialinstrumentssuchasforwards,swaps,futures or optionscontracts.Financial instruments will be managedby a full-timeIESstafftominimizetheriskoffinanciallossfromanadversepricechangeinacommoditymarket.
2.1.4 Third-PartyTransmissionServiceg:The provisionof transmissioncapabilitytodeliverelectricalenergyfromthegenerationsourcestotheagreed-upon destination(s).IES will be responsibleforacquiringthird-party transmission to effectuate the purchases andsalesdescribedinSection3.
2.1.5 AncillaryServiceç:Interconnected operationsservices necessarytoeffecttransfersofelectricitybetweenpurchasingandsellingentities.Includes load following,reserves,voltagecontrol andimbalancemanagement.IES will acquire such ancillaryservicesasarereguiredtoeffectuatethepurchasesandsalesdescribedinSection3.
2.1.6 Scheduling/Operations:Schedulingand Operationsincludes theprovisionofbackofficesupporttomarketinginitiativesonbehalfofIdahoPower.A full-time IES staff confirms purchasesand sales,administerscontracts,works with Idaho Power's dispatchers to
2
PAGE 27
schedule energytransactions,and resolves discrepancies betweenthenetofallsales,purchases and wheeling transactions.The IESstaffwillalsoprovideISsupporttoPowerManagementandSystemResourcemanagement.
2.1.7 Risk Management:Risk Managementactivities reduce theoccurrenceoflossesthatwouldcauseIdahoPowertoincur highercostsforsupplyingNativeLoad.Risk Managementwill beprovidedbyafull-time IES staff that will identify the source ofexposure,quantify the exposure,assess the capacity for managingtheexposureintemallyandrecommendtheappropriateriskmanagementproductstotheOversightManagers.Risks to bemanagedincludepowerprices,volatility,interest rates,counter-party credit risk and foreign currency fluctuations.
2.1.8 Finance and Accounting:Finance and Accountingwill be providedbyafull-time IES staff that providesfinancial consultation andanalysisforPowerMarketingactivities.
3.Specific Description of Power Marketing and System ResourceManagementServicestobeProvide¢
3.1 Purchases to Supply Native Load:As a part of the Services providedunderthisStatementofServicesNo.1,IES will undertake PowerMarketingactivitiesasnecessarytoacquireforsubsequentpurchase byidshoPowersufficientenergyandcapacitytosupplyNativeLoadwhenalloftheNativeLoadcannotbeservedbySystemResourcesorwhenmarketpricesfordeliveredelectriccapacityandenergyarelessthanthecostofSystemResources.The sales price for delivered energy andcapacityacquiredbyIdahoPowerfromIEStosupplyNativeLoadwill beequaltotheMarketPricedeterminedinaccordancewithSection5.Under this Section 3.1,IES may also broker a purchaseand saletransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
3.2 Sale of SurplusSystemResources:As a part of the ServicesprovidedunderthisStatementofServicesNo.1,IES will purchasefrom IdahoPowerallofthegenerationfromtheSystemResourcesthatissurplustotheneedsofNativeLoad.The amount paid to Idaho Power for surplusSystemResourcegenerationwillbetheMarketPriceatthetimeofsaledeterminedinaccordancewithSection5.Under this Section3.2 IES mayalsobrokerapurchaseandsalestransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
3 PAGE 28
3.3 Ancillary Services and Third-Party Transmission:All Ancillary ServicesandThird-PartyTransmissionServices necessaryfor Power Marketing,both for supplying Native Load requirements and sellingsurplus SystemResourcesshallbeacquiredandmanagedbyIEStoeffectuatethepurchasesandsalesdescribedabove.Costs of acquiring AnciliaryServicesandThird-PartyTransmissionincurred for Power MarketingtosupplyNativeLoadshallbeincludedintheMarketPrice.
3.4 Hedging Transactions:From time to time IES may enter into hedgingtransactionsasapartoftheServicestooptimizeSystemResourcemanagement.Hedging transactions undertaken as a part of the Services
.shall be used exclusivelyfor hedge (risk reducinq)transactions.Nospeculative(risk accumulating)transactions will be executed on behalfofIdahoPower.Hedge transactions will only be undertaken with the priorconsultationandapprovaloftheIdahoPowerOversightManager.
3.5 Brokering Transactionç:From time to time IES may act as a brokertoarrangepowerpurchaseorsalestransactionsbetweenIdahoPowerandthirdparties.If Idaho Power desires to enter into forward transactions,IES will only participate as a broker.Idaho Power will not enter intoforwardtransactionsbrokeredbylESwithoutthepriorconsultationandapprovaloftheIdahoPowerOversightManager.
4.Priority For Use of System Resources -
4.1 At all times and under all conditions IES will providethe Services in amannerthatwillprovideNativeLoadcustomerswiththefirstpriorityrighttoutilizeallavailablecapacityandenergyfromtheSystemResourcesandtoutilizeanyIdahoPower-ownedor third-party-suppliedtransmissionasnecessarytosupplyNativeLoadonafirst-priority basis.
4 PAGE 29
5.Market Prices
5.1 The Market Prices referred to in this Statement of Services shall be theactualmarketsettlementpricesbasedontheappropriatepublishedindexpriceorthird-party quotes for the product,taken from the closest relevantproductmarketfortheapplicabletimeandlocationofthetransaction.Forexample,during the spring and winter seasons,the Market Price forelectricenergyismostlikelytobebasedontheDowJonesMid-ColumbiaElectricityPriceIndex(°Mid-C").During the earty summer and fall ,theMarketPriceforelectricenergyismostlikelytobebasedontheDowJonesPaloVerdePriceindex(°Palo Verde").The actual computationoftotalMarketPricewillbecomputedinaccordancewiththefollowing:
5.1.1 For Term and intramonth transactions,the market settlement pricewillbeinaccordancewiththeformulaesetoutonTable1attachedtothisStatementofServicesNo.1.
5.1.2 For ReakTime Transactions,the market settlement price will be anhouriysettlementpriceequaltotheaverageofallreaktimetransactionpricesrecordedforthathour.
5.1.3 For Ancillary Services,the actual price paid by lES for AncillaryServicesusedtosupplyNativeLoads.
6.IES Compensation For Power Services Provide¢
6.1 For providingthe Power Marketingand SystemResource managementservicesunderthisStatementofServicesNo.1;lES will be paid5300,696.30per month.
7.Pricing For Non-Power Goods and Services Provide¢
7.1 The prices for all norepower goods and services purchasedand soldbetweenIESandIdahoPowershallbedeterminedinaccordancewith thetherecurrentAffiliatedServicesAgreementbetweenthePartiesasprovidedtotheIdahoPublicUtilitiesCommissionpursuanttoIPUCOrderNo.27348.For the year 2000,lES will pay Idaho Power $87,293.53permonthfornorspowergoodsandservices.
5 PAGE 30
8.System Resources
8.1 Idaho Power will own,operate,maintain and dispatch the electricgenerationandtransmissionfacilitiesincludedinSystemResources.IESwilltakesuchstepsasmayberequiredtoobtainfromIdahoPower'sDeliveryBusinessUnittherighttouseIdahoPower-owned transmissioncapabilityforPowerMarketingunderthisAgreement.
9.Allocation of Counter-PartyDefautta.
9.1 The Parties recognize that wholesale market transactions carry a risk ofcounter-partydefauft.Upon such defauft,the Parties will pro-rate any lossbasedonIdahoPower's share of IES's total transactions with thedefauttingpartyateachdeliverypointwhereadefaultoccura.
PAGE31
TABLE 1
STATEMENTOF SERVICES NO.1
Purchases (using Mid-C Index for intramonth deals,using Mid-C quote for termdeals)
TransferCost =(Mid-Cu x TotalLL MWh)+(Mid x Total HL MWh)+TransmissionCostwhere'TransmissionCost'is the sum of firm transmission tariff rate of atransmissionproviderthathasavailabletransmissioncapacityfromMid-C and cost oftransmissionlosseschargedbythetransmissionprovider.
Sales (using Mid-C Index for intramonth deals,using Mid-C quote for term deals)
TransferCost =(Mid-Cu price x Total LL MWh)+(Mida Price x Total HL MWh)-TransmissionCost where 'TransmissionCost'is the sum of firm transmissiontariff rateofatransmissionproviderthathasavailabletransmissioncapacitytoMid-C and cost oftransmissionlosseschargedbythetransmissionprovider.
Purchases (using Palo Verde index for intramonth deals,using Palo Verde quotefortermdeals)
Transfer Cost =(Palo Verdeu Price x Total LL MWh)+(Palo Verde Price x Total HLMWh)+Transmission Cost where 'TransmissionCost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacityfromPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
Sales (using Palo Verde index for intramonth deals,using Palo Verde quote fortermdeais)
TransferCost =(PaloVerden Price x Total LL MWh)+(Palo Verdem Price x Total HLMWh)-Transmission Cost where'TransmissionCost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacitytoPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
PAGE 32
Attachment C
PAGE 33
Idaho Power Company Substitute Service Agreement No 48FERCElectricTariff
First Revised Volume No.6
AGREEMENTFOR ELECTRICITY SUPPLYMANAGEMENTSERVICES
BETWEEN
IDAHO POWER COMPANY AND IDACORP ENERGY SOLUTIONS LP
THIS ELECTRICITYSUPPLY MANAGEMENT SERVICESAGREEMENT
(the "Agreement¶is made and entered into es of the day of ,
2000,by and between IDAHO POWER COMPANY ("Idaho Powef),an Idaho
corporation,and lDACORP ENERGYSOLUTIONS LP,dba IDACORP ENERGY
("lES¶,a Delaware Limited Partnership.Idaho Power and IES may also be referred to
in this Agreementindividuallyas "Party"or collectivelyas "Parties."idaho Power and
lES are both wholly<nvnedsubsidiaries of IDACORP,Inc.·
RECITALS
A.Idaho Power owns and operates electric generatingequipmentand
transmission facilities to supply the electric load and service reliabilityrequirementsof
its customers.
B.Idaho Power performswholesale electricity marketingactivities to
acquire electricity to supplementits own electric generationresources and to optimize
the operation of its elebric generationresources.These acôvities provide Idaho
Power's customers with additionalsystem reliability and with additional revenue offset
which is used to reduce their overal cost of energy.
Issued by:John P.Prescott .EffectiveApril 28,2001Issuedon:May 14,2001
Filed to comply with orderof the Federal Energy Regulatory Commission,Docket No.EROl-1329-000,issuedApril27,2001,95 FERC ¶61,147 (2001).
PAGE 34
C.IES is engaged in the marketing of electricity and natural gas and
has the capability to provide electricity and natural gas supp!y managementservices.
D.Idaho Power and IES are both wholly-ownedsubsidiaries of
IDACORP,Inc.
E.Idaho Powerbelieves there are cost-savingsand risk mitigation
benefits that could be realized by contracting with IES to provideelectricitymarketing
and other electricity supplymanagementservices.
AGREEMENT
1.Serviceg.IES wnI pedormthose electricity supply management
services for Idaho Power (the "Services")that are more particularlydescribed in the
"Statement(s)of Services"which are attached to this Agreement.Each Statementof
Services shall be construed as a part of this Agreement.If there are any confilets
between the terms and conditions contained in the body of this Agreementand the
terms and conditions in a Statement of Services,the terms in the Statement of Services
shall prevail.
2..Tggg.This Agreementshall remain in effect for five (5)years from
the date final approvalfrom the Commissionsis obtained in accordance with Section 9
herein ('InitialTerm¶.Followingthe Initial Term,this Agreementwill be automatically
extended for additional two (2)year terms ("ExtensionTerms¶unless either Party
cancels this Agreementby giving notice of cancellation at least six (6)months prior to
the expirationof the InitialTerm or any ExtensionTerm.
2 PAGE35
e
3.Compensation.IES's compensationfor providing the Services
provided shall be in accordance with the schedules set forth in each Statement of
Services.
4.Cooperation.Consistentwith all applicable Commissiorwapproved
Standards of Conduct and/or Codes of Conduct,each Party will providethe other Party
with such information that may be reasonablyrequired by the other to manage their
activities under this Agreement.Each Party shall designatean officer or senior
manager to facilitate managementcommunication between the Parties COversight
Managers").The OversightManagers shall be the authorized representativesof the
Parties and shall have the responsibility of coordinatingwith the other Party's Oversight
Manager regarding IES provision of the Services.Each Party understands that
effective managementof this Agreementdependson the OversightManagers'timely
and effective decisioremaking and approvalsof proposedactions.Each Party shai
inform the other in writing of the name and any limitations on the scope of authority of
.its OversightManager.
5.Invoicina and Pavment.Unless otherwise specificallyagreed in a
Statement of Service,the Parties shall submit invoices monthlyfor Services provided
and reimbursable expenses incurred through the end of each month.Invoices wi
include information reasonablyrequired to verffy the items billed.Bils wil be payable
fifteen (15)days fonowing the date of the rendered blD (Due Date").Interestwil accrue
on all paymentsdue and unpaid after the Due Date unti paid at the rate of one percent
(1%)per month.
3
PAGE 36
6.Commission Jurisdiction.The respective rights and obligations of
the Parties hereunder shall be subject to the jurisdiction and regulatory authority of the
idaho Public Utilities Commission (IPUC),the Oregon Public Utility Commission
(OPUC),the Public Utility Commission of Nevada (PUCN),and the Federal Energy
RegulatoryCommission (FERC).The IPUC,the OPUC,the PUCN and the FERC are
hereinafter collectivelyreferred to as "Commissions."
7.Codes of Conduet.At all times the Parties shall observe the
Standards of Conduct and/or Codes of Conductapprovedby the Commissions.
8.Compliance With Laws and Regulatione.lES shall observe ai
applicable laws,ordinances,rules and regulationsrelatingto deliveryof the Services,
and shall procure and maintain in force,at its sole expense,all registrations,permits,
licenses,and approvalsrequired by law or govemmentalauthorityto perform the
Services.
9.Commission Acoroval.This Agreementand any future
amendments shall not become effective until the Commissions have issued their ·
respective final orders approvingthe Agreementor any future amendments.If the final
orders of any of the Commissionsinitially approvingthis Agreementcontain material
terms or conditions that either Party finds unacceptable,within fourteen(14)days of the
issuance of the order,the adverselyaffected Party will have the right to cancel this
Agreementby givingthirty(30)days written notice of cancellation to the other Party.
10.Future RegulatoryAuthoritv.If in the future the lawsof the United
States or the laws of the states of Idaho,Oregon or Nevada are modifiedto materialy
reduce or eliminate the FERC's,the IPUC's,the PUCN's or the OPUC'sauthority to
4
PAGE 37
e
regulate all or any portion of the activities addressed by this Agreement,the Parties
agree that only those portions of this Agreementwhich by their terms are subjectto the
continuingjurisdiction of the FERC,the IPUC,the PUCN or the OPUC shall continue to
be subjectto Section 6 above.
11.GeneralProvisions.
11.1 Successors and Assigrig.This Agreementand all the terms
and provisions hereof shall be binding upon and inure to the benefit of the respective
successors and assigns of the Parties hereto,exceptthat no transfer by merger or
otherwise,nor any assignmentshereof by IES shall become effective without the prior
written consent of Idaho Power being first obtained.Such consent shall not be
unreasonablywithheld or delayed.
11.2 B.IES shall be responsiblefor paymentof all taxes,
including,but not limited to,sales,use,gross receipts,transaction,business and
occupation or any other taxes,licenses or fees assessed by any taxingjurisdiction
directly associated with providing the Services.If either Party is entitled to an
exemptionfrom any such taxes or fees,it shall fumish the other Party satisfactory
supporting documentation.IES shall include in its invoices for Services provided
pursuantto this Agreement,and Idaho Power will reimburse IES for any taxes (except
taxes based on lES payrollor net income),licenses,or fees assessed or to be
assessed against IES by any taxingjurisdiction,directly as a result of providingthe
Services,including,but not limited to,sales,use,gross receipts,transactionsor
business and occupation taxes.
PAGE 38
11.3 WarrantYof Title.Each Party warrantsthat it has or will
have title to all electrical energy or capacity or transmission capability purchased or sold
pursuant to this Agreementand that such products will be free and clear of all liens,
encumbrances and adverse claims.
11.4 Venue.This Agreementshall be govemedand interpreted
in accordance with the laws of the State of New York and venue for any Ittigationshall
be the Fourth Judicial District Court for Ada County in Boise,Idaho.
11.5 Changeë.Any change,modification or alteration of this
Agreementshall be in writing,signed by the Parties.
11.6 imitatipn of Liabigy.In no event will either Party be liable
hereunder for indirect,consequential,punitiveor exemplarydamages.
IN WITNESS WHEREOF,the Parties have executed this Agreementthe
day and year first above written.
IDAHO.POWERCOMPANY
Idaho Power")
By
its Vna 'det «»,d<.mwral (m.mo.1
IDACORPENERGYSOLUTIONSLP
dba IDACORPENERGY(IES)
For IDACORP,Inc.GeneralPartner
6 PAGE 39
ATTACHMENT 1
STATEMENT OF SERVICES NO.1
ELECTRICITY SUPPLY MARKETING AND MANAGEMENT
1.Definitions
When used in this Statement of Services No.1,the followingterms have thefollowingmeanings:
Power Marketinq means the sale and purchase of electric capacity andenergy,togetherwith associated transmission services and ancillaryservices.Power Marketing includes providing all of the individual ServicesdescribedinSections2and3ofthisStatementofServicesNo.1.
System Resources means the electric generation facilities owned byIdahoPower,the electrical energy and capacity generated by thosefacilitiesorpurchasedbyIdahoPowerfromthirdparties,and anyassociatedAncillaryServices.For purposes of this Agreement,SystemResourcesexpresslyexcludetransmissionfacilitiesandtransmissioncapabilityownedoracquiredbycontractbyIdahoPower.
Native Load means the electric loads of Idaho Power's retail customerslocatedinIdahoPower's certificated area in the states of Idaho,OregonandNevadaandtheloadsofIdahoPower's full-requirementswholesalecustomers,including the City of Weiser,Idaho.
Terms defined in the main body of the Agreementwill have the samemeaningsinthisStatementofServices.
2.General Description of Services to be Provided.
2.1 IES will provideIdaho Power with the Power Marketing and SystemResourcemanagementfunctions("Services")generally described in thisSection2andmoreparticularlydescribedinSection3below.The PartiesintendthattheServicesprovidedunderthisStatementofServicesNo.1willincludethosePowerMarketingandassociatedSystemResourcemanagementservicesnecessarytoallowIdahoPowertosupplyitsNativeLoadcost-effectively and reliably.To accomplish that goal,the Services
1
PAGE 40
will generallyinclude:(1)the Power Marketing activities associated withmarketingSystemResourcesthataresurplustoNativeLoadrequirementsandmakingpurchasesfromthemarkettosupplyNativeLoadswhenIdahoPower's loads exceed its System Resource capabilityorwhenmarketpricesarebelowthevariablecostofSystemResources;(2)Managementof System Resources as necessary to optimize thePowerMarketingactivitiesdescribedherein;and (3)acquiring from IdahoPower's Delivery Business Unit the right to use idaho Power-ownedtransmissioncapabilityforthePowerMarketingandSystemResourcemanagementactivitiesdescribedherein;and (4)the following:
2.1.1 Real-Time Power Marketinq:Real-time power marketing istransactedonafrequentbasisoccurringinincrementsfrom aminimumofafewminutesuptoamaximumof12hoursahead.lES will provide twenty-fourhour staffed coverage of hourly
resource and transmission management for balancing resourcesandloads.
2.1.2 Intramonth Power Marketing:Intramonth marketing is transacted intimeincrementsfromaminimumofonedaytoamaximumofonemonth.IES will provide full-time staff coverage for day-aheadbalancingofgeneration,transmission and load.
2.1.3 Hedqinq Management:Hedges are executed with the use offinancialinstrumentssuchasforwards,swaps,futures or optionscontracts.Financial instruments will be managed by a full-time IESstafftominimizetheriskoffinanciallossfromanadversepricechangeinacommoditymarket.
2.1.4 Third-Party Transmission Services:The provision of transmissioncapabilitytodeliverelectricalenergyfromthegenerationsourcestotheagreed-upon destination(s).IES will be responsible foracquiringthird-party transmission to effectuate the purchases andsalesdescribedinSection3.
2.1.5 Ancillary Services:Interconnected operations services necessarytoeffecttransfersofelectricitybetweenpurchasingandsellingentities.Includes load following,reserves,voltagecontrol andimbalancemanagement.IES will acquire such ancillary servicesasarerequiredtoeffectuatethepurchasesandsalesdescribed inSection3.
2.1.6 Schedulinq/Operations:Scheduling and Operations includes theprovisionofbackofficesupporttomarketinginitiativesonbehalfofIdahoPower.A full-time IES staff confirms purchases and sales,
2
PAGE 41
administers contracts,works with Idaho Power's dispatchersto
schedule energy transactions,and resolves discrepancies between
the net of all sales,purchases and wheelingtransactions.The lES
staff will also provideIS support to Power Managementand
System Resource management.
2.1.7 Risk Manaqement:Risk Managementactivities reduce the
occurrence of losses that would cause Idaho Power to incur higher
costs for supplying Native Load.Risk Managementwill beprovidedbyafull-time IES staff that will identify the source of
exposure,quantify the exposure,assess the capacity for managingtheexposureinternallyandrecommendtheappropriateriskmanagementproductstotheOversightManagers.Risks to bemanagedincludepowerprices,volatility,interest rates,counter-party credit risk and foreign currency fluctuations.
2.1.8 Finance and Accountinq:Finance and Accounting will be providedbyafull-time IES staff that provides financial consultation andanalysisforPowerMarketingactivities.
3.Specific Description of Power Marketing and System ResourceManagementServicestobeProvided
3.1 Purchases to Supply Native Load:As a part of the Services providedunderthisStatementofServicesNo.1,IES will undertake PowerMarketingactivitiesasnecessarytoacquireforsubsequentpurchase byIdahoPowersufficientenergyandcapacitytosupplyNativeLoadwhenalloftheNativeLoadcannotbeservedbySystemResourcesorwhenmarketpricesfordeliveredelectriccapacityandenergyarelessthanthecostofSystemResources.The sales price for delivered energy andcapacityacquiredby\daho Power from IES to supply Native Load will beequaltotheMarketPricedeterminedinaccordancewithSection5.Under this Section 3.1,IES may also broker a purchase and saletransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
3.2 Sale of Surplus System Resources:As a part of the Services provided
under this Statement of Services No.1,lES will purchase from IdahoPowerallofthegenerationfromtheSystemResourcesthatissurplus totheneedsofNativeLoad.The amount paid to Idaho Power for surplusSystemResourcegenerationwillbetheMarketPriceatthetimeofsaledeterminedinaccordancewithSection5.Under this Section 3.2 IES mayalsobrokerapurchaseandsalestransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
3
PAGE 42
3.3 Ancillary Services and Third-Party Transmission:All Ancillary Services
and Third-Party TransmissionServices necessary for Power Marketing,
both for supplying Native Load requirementsand selling surplus SystemResourcesshallbeacquiredandmanagedbyIEStoeffectuatethepurchasesandsalesdescribedabove.Costs of acquiring AncillaryServicesandThird-Party Transmission incurred for Power Marketing tosupplyNativeLoadshallbeincludedintheMarketPrice.
3.4 Hedqinq Transactions:From time to time IES may enter into hedgingtransactionsasapartoftheServicestooptimizeSystemResourcemanagement.Hedging transactions undertaken as a part of the Servicesshallbeusedexclusivelyforhedge(risk reducinq)transactions.Nospeculative(risk accumulatinq)transactions will be executed on behalf ofIdahoPower.Hedge transactions will only be undertaken with the priorconsultationandapprovaloftheIdahoPowerOversightManager.
3.5 Brokerinq Transactions:From time to time IES may act as a broker toarrangepowerpurchaseorsalestransactionsbetweenIdahoPowerandthirdparties.If Idaho Power desires to enter into forward transactions,IES will only participate as a broker.Idaho Power will not enter intoforwardtransactionsbrokeredbyIESwithoutthepriorconsultationandapprovaloftheIdahoPowerOversightManager.
4.Priority For Use of System Resources
4.1 At all times and under all conditions IES will provide the Services in a
manner that will provide Native Load customers with the first priority righttoutilizeallavailablecapacityandenergyfromtheSystemResourcesandtoutilizeanyIdahoPower-owned or third-party-supplied transmission
as necessary to supply Native Load on a first-priority basis.
4 PAGE 43
5.Market Prices
5.1 The Market Prices referred to in this Statementof Services shall be theactualmarketsettlementpricesbasedontheappropriatepublishedindexpriceorthird-party quotes for the product,taken from the closest relevantproductmarketfortheapplicabletimeandlocationofthetransaction.Forexample,during the spring and winter seasons,the Market Price forelectricenergyismostlikelytobebasedontheDowJonesMid-ColumbiaElectricityPriceIndex("Mid-C").During the early summer and fall ,theMarketPriceforelectricenergyismostlikelytobebasedontheDowJonesPaloVerdePriceIndex("Palo Verde").The actual computation oftotalMarketPricewillbecomputedinaccordancewiththefollowing:
5.1.1 For Term and Intramonth transactions,the market settlement pricewillbeinaccordancewiththeformulaesetoutonTable1attachedtothisStatementofServicesNo.1.
5.1.2 For Real-Time Transactions,the market settlement price will be anhourlysettlementpriceequaltotheaverageofallreal-timetransactionpricesrecordedforthathour;provided that,notwithstandinganything else in this Agreementto the contrary,intheeventthatidahoPowersellspowertoanon-affiliate in a real-time transaction(s),the market settlement price for real-time salesbyIdahoPowertoIESforthathourwillbeanhourlysettlementpriceequaltothehighestreal-time transaction price at which IdahoPowersoldpowertonon-affiliates for that hour;and providedfurther,that in the event Idaho Power purchases power from a non-affiliate in a real-time transaction(s),the market settlement price forreal-time purchases by Idaho Power from lES for that hour will beanhourlysettlementpriceequaltothelowestreal-time transactionpriceatwhichidahoPowerpurchasespowerfromnon-affiliates forthathour.
5.1.3 For Ancillary Services,the actual price paid by lES for AncillaryServicesusedtosupplyNativeLoads.
6.IES Compensation For Power Services Provided
6.1 For providingthe Power Marketing and System Resource managementservicesunderthisStatementofServicesNo.1,lES will be paid$300,696.30per month.
5 PAGE44
7.Pricinq For Non-Power Goods and Services Provided
7.1 The prices for all non-power goods and services purchased and soldbetweenlESandIdahoPowershallbedeterminedinaccordancewith thethen-current Affiliated Services Agreementbetween the Parties asprovidedtotheIdahoPublicUtilitiesCommissionpursuanttoIPUC OrderNo.27348.For the year 2000,lES will pay Idaho Power $87,293.53 permonthfornon-power goods and services.
8.System Resources
8.1 Idaho Power will own,operate,maintain and dispatch the electricgenerationandtransmissionfacilitiesincludedinSystemResources.lESwilltakesuchstepsasmayberequiredtoobtainfromIdahoPower'sDeliveryBusinessUnittherighttouseIdahoPower-owned transmissioncapabilityforPowerMarketingunderthisAgreement.
9.Allocation of Counter-Party Defaults.
9.1 The Parties recognize that wholesale market transactions carry a risk ofcounter-party default.Upon such default,the Parties will pro-rate any lossbasedonIdahoPower's share of IES's total transactions with thedefaultingpartyateachdeliverypointwhereadefaultoccurs.
6
PAGE 45
TABLE 1
STATEMENT OF SERVICES NO.1
Purchases (using Mid-C Index for intramonth deals,using Mid-C quote for termdeals)
Transfer Cost =(Mid-C,x Total LL MWh)+(Mid-Cse x Total HL MWh)+TransmissionCostwhere'Transmission Cost'is the sum of firm transmission tariff rate of atransmissionproviderthathasavailabletrarismissioncapacityfromMid-C and cost oftransmissionlosseschargedbythetransmissionprovider.
Sales (using Mid-C Index for intramonth deals,using Mid-C quote for term deals)
Transfer Cost =(Mid-Ces price x Total LL MWh)+(Mid-Cse Price x Total HL MWh)-Transmission Cost where 'Transmission Cost'is the sum of firm transmission tariff rateofatransmissionproviderthathasavailabletransmissioncapacitytoMid-C and cost oftransmissionlosseschargedbythetransmissionprovider.
Purchases (using Palo Verde Index for intramonth deals,using Palo Verde quotefortermdeals)
Transfer Cost =(Palo VerdeLL PfÌCe x Total LL MWh)+(Palo VerdeHL Price x Total HLMWh)+TransmissionCost where 'Transmission Cost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacityfromPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
Sales (using Palo Verde index for intramonth deals,using Palo Verde quote fortermdeals)
Transfer Cost =(Palo Verde,Price x Total LL MWh)+(Palo VerdeML Price x Total HLMWh)-TransmissionCost where 'Transmission Cost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacitytoPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
PAGE 46
Attachment D
PAGE 47
IDACORP Energy Solutions,L.r.Substitute Service Agreement No.1FERCElectricTariff
Original Volume No.1
AGREEMENTFOR ELECTRICITYSUPPLY MANAGEMENTSERVICES
BETWEEN
IDAHO POWER COMPANY AND IDACORP ENERGYSOLUTIONSLP
THIS ELECTRICITYSUPPLY MANAGEMENTSERVICES AGREEMENT
(the 'Agreement¶is made and entered into as of the day of --f-,
2000,by and between IDAHO POWER COMPANY ("Idaho Powef),an idaho
corporation,and IDACORP ENERGY SOLUTIONS LP,dba IDACORP ENERGY
("lES¶,a Delaware UmitedPartnership.Idaho Power and IES may also be referred to
in this Agreementindividuaffyas "Party"or collectivelyas "Parties."idaho Power and
IES are both whoffy-ownedsubsidiaries of IDACORP,Inc.·
RECITALS
A.Idaho Power owns and operates electric generatingequipment and
transmission faciffties to supply the electric load and service reliabilityreguirementsof
its customers.
B.Idaho Power performs wholesale electricity marketingactMties to
acquire electricityto supplementits own electric generationresources and to optimize
the operation of its em generationresources.These activities provideidaho
Power'scustomers with additionalsystem rellability and with additionalrevenue offset
whichis used to reduce their overal cost of energy.
Issued by:Joe M.Holmes EffectiveApril 28,2001Issuedon:May 14,2001
Filed to comply with orderof the Federal Energy Regulatory Commission,Docket No.ERO1-l329-000,issuedApril27,2001,95 FERC ¶61,147 (2001).
PAGE 48
AGREEMENTFOR ELECTRICITY SUPPLYMANAGEMENTSERVICES
BETWEEN
IDAHO POWER COMPANYAND IDACORP ENERGY SOLUTIONS LP
THIS ELECTRICITYSUPPLY MANAGEMENT SERVICES AGREEMENT
(the "Agreement")is made and entered into as of the day of $--·f,
2000,by and between IDAHO POWER COMPANY ("Idaho Power"),an Idaho
corporation,and IDACORP ENERGY SOLUTIONS LP,dba IDACORP ENERGY
("IES'),a Delaware Limited Partnership.Idaho Power and IES may also be referred to
in this Agreementindividually as "Party"or collectivelyas "Parties."Idaho Power and
IES are both wholly-ownedsubsidiaries of IDACORP,Inc.
RECITALS
A.Idaho Power owns and operateselectdc generatingequipmentand
transmission facilities to supply the electric load and service reliabilityrequirementsof
its customers.
B.Idaho Power performswholesale electricity marketingactMties to
acguire electricity to supplementits own electric generationresources and to optimtze
the operation of its electric generationresources.These actMties provide Idaho
Power's customers with additionalsystem rellability and with additional revenue offset
which is used to reduce their overall cost of energy.
PAGE 49
C.IES is engagedin the marketing of electricity and natural gas and
has the capabilityto provide electricity and natural gas supplymanagementservicas.
D.Idaho Power and IES are both wholly-ownedsubsidiaries of
IDACORP,Inc.
E.Idaho Powerbelieves there are cost-savings and risk mitigation
benefits that could be realized by contracting with IES to provideelectricity marketing
and other electricity supplymanagementservices.
AGREEMENT
1.Serviceg.lES will perform those electricity supply management
services for idaho Power (the "Services")that are more particularlydescribedin the
"Statement(s)of Services"which are attached to this Agreement.Each Statementof
Services shall be construed as a part of this Agreement.If there are any conflicts
between the terms and conditions contained in the body of this Agreement and the
terms and conditions in a Statementof Services,the terms in the Statementof Services
shall preval.
2.I.g.gn.This Agreement shall remain in effect for Sve (5)years from
the date final approvalfrom the Commissionsis obtained in accordance with Section 9
herein ('Initial Term").Followingthe Initial Term,this Agreementwil be automaticaly
extended for additional two (2)year terms ("ExtensionTerms")unlesseither Party
cancels this Agreementby giving notice of cancellation at least six (6)months prior to
the expirationof the Initial Term or any ExtensionTerm.
PAGE 502
3.Compensation.IES's compensation for providing the Services
provided shall be in accordance with the schedules set forth in each Statementof
Services.
4.Cooperation.Consistentwith all applicable Commissiorwapproved
Standards of Conduct and/or Codes of Conduct,each Party will provide the other Party
with such information that may be reasonablyrequired by the other to manage their
activities under this Agreement.Each Party shall designate an officer or senior
managerto facilitate managementcommunication betweenthe Parties COversight
Managers").The OversightManagers shall be the authorized representativesof the
Parties and shall have the responsibliftyof coordinating with the other Party's Oversight
Manager regarding IES provision of the Services.Each Party understands that
effective managementof this Agreementdependson the OversightMartagers'timely
and effective decision-makingand approvalsof proposedactions.Each Party shai
inform the other in writing of the name and any limitations on the scope of authorityof
.its Oversight Manager.
5.Invoicingand Pevment.Unless otherwise specificany agreed in a
Statement of Service,the Parties shall submit invoices monthlyfor Servicesprovided
and reimbursable expenses incurred through the end of each month.Invoices wi
include informationreasonablyrequired to verify the items blned.Bils wil be payable
fifteen (15)days followingthe date of the rendered bli (°Due Date").InterestwŒ accrue
on all payments due and unpaid after the Due Date unti paid at the rate of one percent
(1%)per month.
3 PAGE 51
6.Commission Jurisdiction.The respective rights and obligations of
the Parties hereunder shall be subject to the jurisdiction and regulatory authorityof the
Idaho Public Utilities Commission (IPUC),the Oregon Public Utilty Commission
(OPUC),the Public Utility Commission of Nevada (PUCN),and the Federal Energy
RegulatoryCommission (FERC).The IPUC,the OPUC,the PUCN and the FERCare
hereinafter collectivelyreferred to as Commissions."
7.Codes of Conduç\.At all times the Parties shall observe the
Standards of Conduct and/or Codes of Conduct approvedby the Commissions.
8.Compliance With Laws anç!Requietione.IES shall observe ai
applicable laws,ordinances,rules and regulationsrelatingto delivery of the Services,
and shall procure and maintain in force,at its sole expense,all registrations,permita,
licenses,and approvalsrequired by law or govemmentalauthority to perform the
Services.
9.CommissionAcoroval.This Agreementand any future
amendments shall not becomeeffective until the Commissionshave issued their ·
respective final orders approvingthe Agreementor any future amendments.If the final
orders of any of the Commissionsinitianyapprovingthis Agreementcontain material
terms or conditions that eitherParty finds unacceptable,within fourteen(14)days of the
issuance of the order,the adverselyaffected Party wil have the right to cancel this °
Agreementby givingthirty (30)days written notice of cancellationto the other Party.
10.Future ReaulatoryAuthority.If in the future the laws of the United
States or the laws of the states of Idaho,Oregon or Nevada are modifiedto meterialy
reduce or eliminate the FERC's,the IPUC's,the PUCN'sor the OPUC'sauthority to
4
PAGE 52
regulate all or any portion of the activities addressedby this Agreement,the Parties
agree that only those portions of this Agreementwhich by their terms are subjectto the
continuing jurisdictionof the FERC,the IPUC,the PUCN or the OPUC shall continue to
be subjectto Section 6 above.
11.General Provisions.
11.1 Successors and Assigrig.This Agreementand all the terms
and provisions hereof shall be binding upon and inure to the benefit of the respective
successors and assigns of the Parties hereto,except that no transfer by merger or
otherwise,nor any assignmentshereof by IES shall become effective without the prior
written consent of Idaho Power being first obtained.Such consent shan not be
unreasonablywithheid or delayed.
11.2 _Tagg.IES shai be responsiblefor paymentof all taxes,
including,but not limited to,sales,use,gross receipts,transaction,business and
occupation or any other taxes,licenses or fees assessed by any taxingjurisdiction
directly associated with providing the Services.If either Party is entitled to an
exemptionfrom any such taxes or fees,it shai fumish the other Party satisfactory
supporting documentation.lES shai include in its invoices for Services provided
pursuantto this Agreement,and Idaho Power w01 reimburse IES for any taxes (except
taxes based on IES payrollor net income),licenses,or fees assessed or to be
assessed against IES by any taxingjurisdiction,directly as a result of providingthe
Services,including,but not limited to,sales,use,gross receipts,transactions or
business and occupation turne
5
PAGE 53
11.3 Warranty of Tit1ê.Each Party warrants that it has or wil
have title to all electrical energy or capacity or transmission capability purchased or sold
pursuantto this Agreementand that such products will be free and clear of all liens,
encumbrances and adverse claims.
11.4 Venue.This Agreementshall be governedand interpreted
in accordance with the laws of the State of New York and venue for any Iltigationshall
be the Fourth Judicial District Court for Ada County in Boise,Idaho.
11.5 Changes.Any change,modification or alteration of this
Agreementshall be in writing,signed by the Parties.
11.6 Limitation of Liabilltv.In no event will either Party be liable
hereunder for indirect,consequential,punitiveor exemplarydamages.
IN WITNESS WHEREOF,the Parties have executed this Agreementthe
day and year first above written.
IDAHO.POWER COMPANY
Cidaho Power")
By
its Vxa 'M ca.d(m.wral (a
IDACORPENERGYSOLUTIONSLP
dba IDACORPENERGY (IES)
For IDACORP,Inc.GeneralPartner
6 PAGE 54
ATTACHMENT 1
STATEMENT OF SERVICES NO.1
ELECTRICITY SUPPLY MARKETING AND MANAGEMENT
1.Definitions
When used in this Statement of Services No.1,the followingterms have thefollowingmeanings:
Power Marketinq means the sale and purchase of electric capacity andenergy,togetherwith associated transmission services and ancillaryservices.Power Marketing includes providing all of the individual ServicesdescribedinSections2and3ofthisStatementofServicesNo.1.
System Resources means the electric generation facilities owned byIdahoPower,the electrical energy and capacity generated by thosefacilitiesorpurchasedbyIdahoPowerfromthirdparties,and anyassociatedAncillaryServices.For purposes of this Agreement,SystemResourcesexpresslyexcludetransmissionfacilitiesandtransmissioncapabilityownedoracquiredbycontractbyIdahoPower.
Native Load means the electric loads of Idaho Power's retail customerslocatedinIdahoPower's certificated area in the states of Idaho,OregonandNevadaandtheloadsofIdahoPower's full-requirements wholesalecustomers,including the City of Weiser,Idaho.
Terms defined in the main body of the Agreement will have the samemeaningsinthisStatementofServices.
2.General Description of Services to be Provided.
2.1 IES will provideIdaho Power with the Power Marketing and SystemResourcemanagementfunctions("Services")generally described in thisSection2andmoreparticularlydescribedinSection3below.The PartiesintendthattheServicesprovidedunderthisStatementofServicesNo.1willincludethosePowerMarketingandassociatedSystemResourcemanagementservicesnecessarytoallowIdahoPowertosupplyitsNativeLoadcost-effectivelyand reliably.To accomplishthat goal,the Services
1
PAGE 55
will generallyinclude:(1)the Power Marketing activitiesassociated withmarketingSystemResourcesthataresurplustoNativeLoadrequirementsandmakingpurchasesfromthemarkettosupplyNativeLoadswhenIdahoPower's loads exceed its System Resource capabilityorwhenmarketpricesarebelowthevariablecostofSystemResources:(2)Managementof System Resources as necessary to optimize thePowerMarketingactivitiesdescribedherein;and (3)acquiring from IdahoPower's Delivery Business Unit the right to use Idaho Power-ownedtransmissioncapabilityforthePowerMarketingandSystemResourcemanagementactivitiesdescribedherein;and (4)the following:
2.1.1 Real-Time Power Marketinq:Real-time power marketing istransactedonafrequentbasisoccurringinincrementsfrom aminimumofafewminutesuptoamaximumof12hoursahead.lES will provide twenty-fourhour staffed coverage of hourly
resource and transmission management for balancing resourcesandloads.
2.1.2 intramonth Power Marketinq:Intramonth marketing is transacted intimeincrementsfromaminimumofonedaytoamaximumofonemonth.lES will provide full-time staff coverage for day-aheadbalancingofgeneration,transmission and load.
2.1.3 HedqinqManagement:Hedges are executed with the use offinancialinstrumentssuchasfonwards,swaps,futures or optionscontracts.Financial instrumentswill be managedby a full-time IESstafftominimizetheriskoffinanciallossfromanadversepricechangeinacommoditymarket.
2.1.4 Third-PartyTransmission Services:The provision of transmissioncapabilitytodeliverelectricalenergyfromthegenerationsourcestotheagreed-upondestination(s).lES will be responsible foracquiringthird-party transmission to effectuate the purchases andsalesdescribedinSection3.
2.1.5 AncillaryServices:Interconnected operations services necessarytoeffecttransfersofelectricitybetweenpurchasingandsellingentities.Includes load following,reserves,voltagecontrol andimbalancemanagement.IES will acquire such ancillary servicesasarerequiredtoeffectuatethepurchasesandsalesdescribed inSection3.
2.1.6 SchedulinqlOperations:Scheduling and Operations includes theprovisionofbackofficesupporttomarketinginitiativesonbehalfofIdahoPower.A full-time lES staff confirms purchases and sales,
2
PAGE 56
administers contracts,works with Idaho Power's dispatchers toscheduleenergytransactions,and resolves discrepancies betweenthenetofallsales,purchases and wheelingtransactions.The IESstaffwillalsoprovideISsupporttoPowerManagementand
System Resource management.
2.1.7 Risk Management:Risk Managementactivities reduce the
occurrence of losses that would cause Idaho Power to incur highercostsforsupplyingNativeLoad.Risk Managementwill beprovidedbyafull-time lES staff that will identify the source ofexposure,quantify the exposure,assess the capacity for managingtheexposureinternallyandrecommendtheappropriateriskmanagementproductstotheOversightManagers.Risks to bemanagedincludepowerprices,volatility,interest rates,counter-party credit risk and foreign currency fluctuations.
2.1.8 Finance and Accountinq:Finance and Accounting will be providedbyafull-time IES staff that provides financial consultation andanalysisforPowerMarketingactivities.
3.Specific Description of Power Marketinq and System ResourceManagementServicestobeProvided
3.1 Purchases to Supply Native Load:As a part of the Services providedunderthisStatementofServicesNo.1,IES will undertake PowerMarketingactivitiesasnecessarytoacquireforsubsequentpurchase byIdahoPowersufficientenergyandcapacitytosupplyNativeLoadwhenalloftheNativeLoadcannotbeservedbySystemResourcesorwhenmarketpricesfordeliveredelectriccapacityandenergyarelessthanthecostofSystemResources.The sales price for delivered energy andcapacityacquiredbyIdahoPowerfromIEStosupplyNativeLoadwill beequaltotheMarketPricedeterminedinaccordancewithSection5.Under this Section 3.1,IES may also broker a purchase and saletransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
3.2 Sale of Surplus System Resources:As a part of the Services providedunderthisStatementofServicesNo.1,IES will purchase from idahoPowerallofthegenerationfromtheSystemResourcesthatissurplus totheneedsofNativeLoad.The amount paid to Idaho Power for surplusSystemResourcegenerationwillbetheMarketPriceatthetimeofsaledeterminedinaccordancewithSection5.Under this Section 3.2 lES mayalsobrokerapurchaseandsalestransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
3
PAGE 57
3.3 Ancillary Services and Third-Party Transmission:All Ancillary ServicesandThird-Party TransmissionServices necessary for Power Marketing,both for supplying Native Load requirements and selling surplus SystemResourcesshallbeacquiredandmanagedbylEStoeffectuatethepurchasesandsalesdescribedabove.Costs of acquiring AncillaryServicesandThird-Party Transmissionincurred for Power Marketing tosupplyNativeLoadshallbeincludedintheMarketPrice.
3.4 Hedqinq Transactions:From time to time IES may enter into hedgingtransactionsasapartoftheServicestooptimizeSystemResourcemanagement.Hedging transactions undertaken as a part of the Servicesshallbeusedexclusivelyforhedge(risk reducinq)transactions.Nospeculative(risk accumulatinq)transactions will be executed on behalf ofIdahoPower.Hedge transactions will only be undertaken with the priorconsultationandapprovaloftheIdahoPowerOversightManager.
3.5 Brokerinq Transactions:From time to time IES may act as a broker toarrangepowerpurchaseorsalestransactionsbetweenIdahoPowerandthirdparties.If Idaho Power desires to enter into forward transactions,IES will only participate as a broker.Idaho Power will not enter intoforwardtransactionsbrokeredbyIESwithoutthepriorconsultationandapprovaloftheIdahoPowerOversightManager.
4.Priority For Use of System Resources
4.1 At a\\times and under all conditions lES will provide the Services in amannerthatwillprovideNativeLoadcustomerswiththefirstpriorityrighttoutilizeallavailablecapacityandenergyfromtheSystemResourcesandtoutilizeanyIdahoPower-owned or third-party-supplied transmissionasnecessarytosupplyNativeLoadonafirst-priority basis.
4
PAGE 58
5.Market Prices
5.1 The Market Prices referred to in this Statementof Services shall be theactualmarketsettlementpricesbasedontheappropriatepublishedindexpriceorthird-party quotesfor the product,taken from the closest relevantproductmarketfortheapplicabletimeandlocationofthetransaction.Forexample,during the spring and winter seasons,the Market Price forelectricenergyismostlikelytobebasedontheDowJonesMid-ColumbiaElectricityPriceIndex("Mid-C").During the early summer and fall ,theMarketPriceforelectricenergyismostlikelytobebasedontheDowJonesPaloVerdePriceIndex("Palo Verde").The actual computationoftotalMarketPricewillbecomputedinaccordancewiththefollowing:
5.1.1 For Term and Intramonth transactions,the market settlement pricewillbeinaccordancewiththeformulaesetoutonTable1attachedtothisStatementofServicesNo.1.
5.1.2 For Real-Time Transactions,the market settlement price will be anhourlysettlementpriceequaltotheaverageofallreal-timetransactionpricesrecordedforthathour;provided that,notwithstandinganything else in this Agreementto the contrary,intheeventthatIdahoPowersellspowertoanon-affiliate in a real-time transaction(s),the market settlement price for real-time salesbyIdahoPowertoIESforthathourwillbeanhourlysettlementpriceequaltothehighestreal-time transaction price at which IdahoPowersoldpowertonon-affiliates for that hour;and providedfurther,that in the event Idaho Power purchases power from a non-affiliate in a real-time transaction(s),the market settlement price forreal-time purchases by Idaho Power from IES for that hour will beanhourlysettlementpriceequaltothelowestreal-time transactionpriceatwhichIdahoPowerpurchasespowerfromnon-affiliates forthathour.
5.1.3 For Ancillary Services,the actual price paid by lES for AncillaryServicesusedtosupplyNativeLoads.
6.IES Compensation For Power Services Provided
6.1 For providing the Power Marketing and System Resource managementservicesunderthisStatementofServicesNo.1,IES will be paid$300,696.30per month.
5
PAGE 59
7.Pricing For Non-Power Goods and Services Provided
7.1 The prices for all non-power goods and services purchased and soldbetweenIESandIdahoPowershallbedeterminedinaccordancewith thethen-current Affiliated Services Agreementbetween the Parties asprovidedtotheIdahoPublicUtilitiesCommissionpursuanttoIPUC OrderNo.27348.For the year 2000,IES will pay Idaho Power $87,293.53permonthfornon-power goods and services.
8.System Resources
8.1 Idaho Power will own,operate,maintain and dispatch the electricgenerationandtransmissionfacilitiesincludedinSystemResources.IESwilltakesuchstepsasmayberequiredtoobtainfromIdahoPower'sDeliveryBusinessUnittherighttouseIdahoPower-owned transmissioncapabilityforPowerMarketingunderthisAgreement.
9.Allocation of Counter-Party Defaults.
9.1 The Parties recognize that wholesale market transactions carry a risk ofcounter-party default.Upon such default,the Parties will pro-rate any lossbasedonIdahoPower's share of IES's total transactions with thedefaultingpartyateachdeliverypointwhereadefaultoccurs.
PAGE 606
TABLE 1
STATEMENT OF SERVICES NO.1
Purchases (using Mid-C Index for intramonth deals,using Mid-C quote for termdeals)
Transfer Cost =(Mid-CLL X Total LL MWh)+(Mid-CHL X Total HL MWh)+Transmission
Cost where 'Transmission Cost'is the sum of firm transmission tariff rate of a
transmission provider that has available transmission capacity from Mid-C and cost of
transmission losses charged by the transmission provider.
Sales (using Mid-C Index for intramonth deals,using Mid-C quote for term deals)
Transfer Cost =(Mid-CLL priCe X TOtal LL MWh)+(Mid-C,Price x Total HL MWh)-
Transmission Cost where 'Transmission Cost'is the sum of firm transmission tariff rateofatransmissionproviderthathasavailabletransmissioncapacitytoMid-C and cost oftransmissionlosseschargedbythetransmissionprovider.
Purchases (using Palo Verde Index for intramonth deals,using Palo Verde quotefortermdeals)
Transfer Cost =(Palo VerdeLL PfÍC€X Total LL MWh)+(Palo Verdes Price x Total HLMWh)+Transmission Cost where 'Transmission Cost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacityfromPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
Sales (using Palo Verde Index for intramonth deals,using Palo Verde quote fortermdeals)
Transfer Cost =(Palo VerdeLL Price x Total LL MWh)+(Palo VerdeML PfÍC€X Total HLMWh)-Transmission Cost where 'Transmission Cost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacitytoPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
PAGE 61
Attachment E
PAGE 62
5.Market Prices
5.1 The Market Prices referred to in this Statement of Services shall be theactualmarketsettlementpricesbasedontheappropriatepublishedindexpriceorthird-party quotesfor the product,taken from the closest relevantproductmarketfortheapplicabletimeandlocationofthetransaction.Forexample,during the spring and winter seasons,the Market Price forelectricenergyismostlikelytobebasedontheDowJonesMid-ColumbiaElectricityPriceIndex("Mid-C").During the early summer and fall ,theMarketPriceforelectricenergyismostlikelytobebasedontheDowJonesPaloVerdePriceIndex("Palo Verde").The actual computationoftotalMarketPricewillbecomputedinaccordancewiththefollowing:
5.1.1 For Term and Intramonth transactions,the market settlement pricewillbeinaccordancewiththeformulaesetoutonTable1attachedtothisStatementofServicesNo.1.
5.1.2 For Real-Time Transactions,the market settlement price will be anhourlysettlementpriceequaltotheaverageofallreal-timetransactionpricesrecordedforthathour;provided that,notwithstandinq anythinq else in this Agreementto thecontrary,in the event that Idaho Power sells power to a non-affiliate in a real-time transaction(s),the market settlementpriceforreal-time sales by Idaho Power to IES for that hourwillbeanhourlysettlementpriceequaltothehighestreal-time transaction price at which Idaho Power sold power tonon-affiliates for that hour;and provided further,that in theeventidahoPowerpurchasespowerfromanon-affiliate in areal-time transaction(s),the market settlement price for real-time purchases by Idaho Power from IES for that hour will beanhourlysettlementpriceequaltothelowestreal-timetransactionpriceatwhichIdahoPowerpurchasespower fromnon-affiliates for that hour.
5.1.3 For Ancillary Services,the actual price paid by IES for AncillaryServicesusedtosupplyNativeLoads.
6.IES Compensation For Power Services Provided
6.1 For providing the Power Marketingand System Resource managementservicesunderthisStatementofServicesNo.1,IES will be paid$300,696.30per month.
5
PAGE 63
Attachment F
PAGE 64
Idaho Power Company Substitute Service Agreement No.48FERCElectricTariff
First Revised Volume No.6
AGREEMENTFOR ELECTRICITY SUPPLY MANAGEMENTSERVICES
BETWEEN
IDAHO POWER COMPANYAND IDACORP ENERGY SOLUTIONS LP
THIS ELECTRICITYSUPPLY MANAGEMENT SERVICES AGREEMENT
(the "Agreement")is made and entered into as of the day of ,
2000,by and between IDAHO POWER COMPANY ("Idaho Power'),an Idaho
corporation,and IDACORP ENERGYSOLUTIONS LP,dba IDACORP ENERGY
("lES"),a Delaware Limited Partnership.Idaho Power and IES may also be referred to
in this Agreementindividuallyas "Party"or collectivelyas "Parties."Idaho Power and
IES are both wholly-ownedsubsidiaries of IDACORP,Inc.
RECITALS
A.Idaho Power owns and operateselectric generatingequipmentand
transmission facilities to supplythe electric load and service reliabilityrequirementsof
its customers.
B.Idaho Power performs wholesale electricity marketing activities to
acguire electricity to supplementits own electric generationresources and to optimize
the operation of its electric generation resources.These activities provideIdaho
Power'scustomers with additionalsystem reliabilityand with additional revenue offset
which is used to reduce their overall cost of energy.
Issued by:John P.Prescott Effective April 28,20011ssuedon:May 14,2001
Filed to comply with orderof the Federal Energy Regulatory Commission,Docket No.ER01-1329-000,issuedApril27,2001,95 FERC ¶61,147 (2001).
PAGE 65
C.IES is engagedin the marketing of electricity and natural gas and
has the capability to provide electricity and natural gas supplymanagementservices.
D.Idaho Power and IES are both wholly-ownedsubsidiariesof
IDACORP,Inc.
E.Idaho Power believes there are cost-savingsand risk mitigation
benefits that could be realized by contracting with IES to provideelectricitymarketing
and other electricity supplymanagementservices.
AGREEMENT
1.Servicey.lES will perform those electricity supply management
services for Idaho Power (the "Services")that are more particularlydescribed in the
"Statement(s)of Services"which are attached to this Agreement.Each Statementof
Services shall be construed as a part of this Agreement.If there are any confilcts
between the terms and conditions contained in the body of this Agreementand the
terms and conditions in a Statementof Services,the terms in the Statement of Services
shall prevall.
2.Te.rrg.This Agreementshall remain in effect for five (5)years from
the date final approvalfrom the Commissionsis obtained in accordance with Section 9
herein ("Initial Term").Followingthe initial Term,this Agreementwill be automatically
extended for additional two (2)year terms ("ExtensionTerms")unless either Party
cancels this Agreementby givingnotice of cancellation at least six (6)months prior to
the expiration of the Initial Term or any ExtensionTerm.
2 PAGE66
3.Compensation.lES's compensationfor providing the Services
provided shall be in accordance with the schedules set forth in each Statementof
Services.
4.Cooperation.Consistentwith all applicable Commission-approved
Standards of Conduct and/or Codes of Conduct,each Party will provide the other Party
with such information that may be reasonably requiredby the other to manage their
activities under this Agreement.Each Party shall designate an officer or senior
manager to facilitate managementcommunication between the Parties (Oversight
Managers").The OversightManagers shall be the authorized representativesof the
Parties and shall have the responsibility of coordinatingwith the other Party's Oversight
Manager regarding IES provision of the Services.Each Party understandsthat
effective managementof this Agreementdependson the OversightMariagers'timely
and effective decision-makingand approvalsof proposedactions.Each Party shall
inform the other in writing of the name and any limitations on the scope of authority of
.its OversightManager.
5.Invoicino and Payment.Unless otherwise specificallyagreed in a
Statement of Service,the Parties shall submit invoices monthlyfor Services provided
and reimbursable expenses incurred throughthe end of each month.Invoices wlD
include informationreasonablyrequired to verify the items billed.Bills will be payable
fifteen (15)days followingthe date of the rendered bill (Due Date ).Interest will accrue
on all payments due and unpaid after the Due Date until paid at the rate of one percent
(1%)per month.
3 PAGE 67
6.Commission Jurisdiction.The respective rights and obligationsof
the Parties hereunder shall be subject to the jurisdiction and regulatory authority of the
Idaho Public Utilities Commission (IPUC),the Oregon Public Utility Commission
(OPUC),the Public Utility Commission of Nevada (PUCN),and the Federal Energy
RegulatoryCommission(FERC).The IPUC,the OPUC,the PUCN and the FERCare
hereinaftercollectivelyreferred to as Commissions."
7.Codes of Conduct.At all times the Parties shall observe the
Standards of Conduct and/or Codes of Conductapprovedby the Commissions.
8.Compliance With Laws and Requistionê.lES shall observe all
applicablelaws,ordinances,rules and regulationsrelatingto deliveryof the Services,
and shall procure and maintain in force,at its sole expense,all registrations,permits,
licenses,and approvalsrequired by law or govemmental authority to perform the
Services.
9.CommissionApproval.This Agreementand any future
amendments shall not become effective until the Commissionshave issued their ·
respectivefinal orders approvingthe Agreementor any future amendments.If the final
orders of any of the Commissionsinitially approvingthis Agreementcontain material
terms or conditions that either Party finds unacceptable,within fourteen(14)days of the
issuance of the order,the adverselyaffected Party will have the right to cancel this °
Agreementby givingthirty (30)days written notice of cancellation to the other Party.
10.Future RequiatoryAuthority.If in the future the lawsof the United
States or the laws of the states of Idaho,Oregon or Nevada are modifiedto materially
reduce or eliminate the FERC's,the IPUC's,the PUCN's or the OPUC'sauthority to
4 PAGE 68
e
regulate all or any portion of the activities addressed by this Agreement,the Parties
agree that only those portions of this Agreementwhich by their terms are subject to the
continuing jurisdiction of the FERC,the IPUC,the PUCN or the OPUC shall continue to
be subjectto Section 6 above.
11.GeneralProvisions.
11.1 Successors and Assigny.This Agreementand a11the terms
and provisions hereof shall be binding upon and inure to the benefit of the respective
successors and assigns of the Parties hereto,exceptthat no transfer by merger or
otherwise,nor any assignmentshereof by IES shall become effective without the prior
written consent of Idaho Power being first obtained.Such consent shall not be
unreasonablywithheld or delayed.
11.2 B.lES shall be responsiblefor paymentof all taxes,
including,but not limited to,sales,use,gross receipts,transaction,business and
occupation or any other taxes,licenses or fees assessed by any taxingjurisdiction
directly associated with providing the Services.If either Party is entitled to an
exemptionfrom any such taxes or fees,it shall fumish the other Party satisfactory
supporting documentation.IES shall include in its invoices for Services provided
pursuantto this Agreement,and Idaho Power will reimburse IES for any taxes (except
taxes based on IES payroll or net income),licenses,or fees assessed or to be
assessed against lES by any taxingjurisdiction,directly as a result of providingthe
Services,including,but not limitedto,sales,use,gross receipts,transactions or
business and occupation taxes.
5 PAGE69
11.3 Warranty of Title.Each Party warrants that it has or will
have title to all electrical energy or capacity or transmission capability purchased or sold
pursuant to this Agreementand that such products will be free and clear of all liens,
encumbrances and adverse claims.
11.4 Venue.This Agreementshall be govemedand interpreted
in accordance with the laws of the State of New York and venue for any litigationshall
be the Fourth Judicial District Court for Ada County in Boise,Idaho.
11.5 Changes.Any change,modification or afteration of this
Agreementshall be in writing,signed by the Parties.
11.6 Limitation of Liability.In no event will either Party be liable
hereunder for indirect,consequential,punitiveor exemplarydamages.
IN WITNESS WHEREOF,the Parties have executed this Agreementthe
day and year first above written.
IDAHO.POWER COMPANY
(Idaho Power")
By .
IDACORP ENERGY SOLUTIONSLP
dba IDACORP ENERGY (IES)
For IDACORP,inc.GeneralPartner
6 PAGE 70
ATTACHMENT 1
STATEMENTOF SERVICES NO.1
ELECTRICITY SUPPLY MARKETING AND MANAGEMENT
1.Definitions
When used in this Statement of Services No.1,the followingterms have thefollowingmeanings:
Power Marketinq means the sale and purchase of electric capacity andenergy,togetherwith associated transmission services and ancillaryservices.Power Marketing includes providing all of the individual ServicesdescribedinSections2and3ofthisStatementofServicesNo.1.
System Resources means the electric generation facilities owned byIdahoPower,the electrical energy and capacity generated by thosefacilitiesorpurchasedbyIdahoPowerfromthirdparties,and anyassociatedAncillaryServices.For purposes of this Agreement,SystemResourcesexpresslyexcludetransmissionfacilitiesandtransmissioncapabilityownedoracquiredbycontractbyIdahoPower.
Native Load means the electric loads of Idaho Power's retail customerslocatedinidahoPower's certificated area in the states of Idaho,OregonandNevadaandtheloadsofIdahoPower's full-requirements wholesalecustomers,including the City of Weiser,Idaho.
Terms defined in the main body of the Agreementwill have the samemeaningsinthisStatementofServices.
2.General Description of Services to be Provided.
2.1 lES will provide Idaho Power with the Power Marketing and SystemResourcemanagementfunctions("Services")generally described in thisSection2andmoreparticularlydescribedinSection3below.The PartiesintendthattheServicesprovidedunderthisStatementofServicesNo.1willincludethosePowerMarketingandassociatedSystemResourcemanagementservicesnecessarytoallowIdahoPowertosupplyitsNativeLoadcost-effectively and reliably.To accomplish that goal,the Services
1
PAGE 71
will generally include:(1)the Power Marketing activities associated withmarketingSystemResourcesthataresurplustoNativeLoadrequirementsandmakingpurchasesfromthemarkettosupplyNativeLoadswhenIdahoPower's loads exceed its System Resource capabilityorwhenmarketpricesarebelowthevariablecostofSystemResources;(2)Managementof System Resources as necessary to optimize thePowerMarketingactivitiesdescribedherein;and (3)acquiring from IdahoPower's Delivery Business Unit the right to use Idaho Power-ownedtransmissioncapabilityforthePowerMarketingandSystemResourcemanagementactivitiesdescribedherein;and (4)the following:
2.1.1 Real-Time Power Marketinq:Real-time power marketing istransactedonafrequentbasisoccurringinincrementsfrom aminimumofafewminutesuptoamaximumof12hoursahead.IES will provide twenty-fourhour staffed coverage of hourly
resource and transmission management for balancing resourcesandloads.
2.1.2 Intramonth Power Marketinq:Intramonth marketing is transacted intimeincrementsfromaminimumofonedaytoamaximumofonemonth.IES will provide full-time staff coverage for day-aheadbalancingofgeneration,transmission and load.
2.1.3 Hedqinq Management:Hedges are executed with the use offinancialinstrumentssuchasforwards,swaps,futures or optionscontracts.Financial instruments will be managed by a full-time IESstafftominimizetheriskoffinanciallossfromanadversepricechangeinacommoditymarket.
2.1.4 Third-Party TransmissionServices:The provision of transmissioncapabilitytodeliverelectricalenergyfromthegenerationsourcestotheagreed-upon destination(s).IES will be responsible foracquiringthird-party transmission to effectuate the purchases andsalesdescribedinSection3.
2.1.5 Anciliary Services:Interconnected operations services necessarytoeffecttransfersofelectricitybetweenpurchasingandsellingentities.Includes load following,reserves,voltagecontrol andimbalancemanagement.IES will acquire such ancillary servicesasarerequiredtoeffectuatethepurchasesandsalesdescribed inSection3.
2.1.6 SchedulinqlOperations:Scheduling and Operations includes theprovisionofbackofficesupporttomarketinginitiativesonbehalfofIdahoPower.A full-time IES staff confirms purchases and sales,
2
PAGE 72
administers contracts,works with Idaho Power's dispatcherstoscheduleenergytransactions,and resolves discrepancies betweenthenetofallsales,purchases and wheeling transactions.The IESstaffwillalsoprovideISsupporttoPowerManagementandSystemResourcemanagement.
2.1.7 Risk Manaqement:Risk Managementactivities reduce the
occurrence of losses that would cause Idaho Power to incur highercostsforsupplyingNativeLoad.Risk Managementwill beprovidedbyafull-time IES staff that will identify the source ofexposure,quantify the exposure,assess the capacity for managingtheexposureinternallyandrecommendtheappropriateriskmanagementproductstotheOversightManagers.Risks to bemanagedincludepowerprices,volatility,interest rates,counter-party credit risk and foreign currency fluctuations.
2.1.8 Finance and Accountinq:Finance and Accounting will be providedbyafull-time IES staff that providesfinancial consultation andanalysisforPowerMarketingactivities.
3.Specific Description of Power Marketing and SystemResourceManagementServicestobeProvided
3.1 Purchases to Supply Native Load:As a part of the Services providedunderthisStatementofServicesNo.1,IES will undertake PowerMarketingactivitiesasnecessarytoacquireforsubsequentpurchase byIdahoPowersufficientenergyandcapacitytosupplyNativeLoadwhenalloftheNativeLoadcannotbeservedbySystemResourcesorwhenmarketpricesfordeliveredelectriccapacityandenergyarelessthanthecostofSystemResources.The sales price for delivered energy andcapacityacquiredbyIdahoPowerfromIEStosupplyNativeLoadwill beequaltotheMarketPricedeterminedinaccordancewithSection5.Under this Section 3.1,IES may also broker a purchase and saletransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
3.2 Sale of Surplus System Resources:As a part of the Services providedunderthisStatementofServicesNo.1,IES will purchase from IdahoPowerallofthegenerationfromtheSystemResourcesthatissurplus totheneedsofNativeLoad.The amount paid to Idaho Power for surplusSystemResourcegenerationwillbetheMarketPriceatthetimeofsaledeterminedinaccordancewithSection5.Under this Section 3.2 IES mayalsobrokerapurchaseandsalestransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
3
PAGE 73
3.3 Ancillary Services and Third-Party Transmission:All Ancillary ServicesandThird-Party Transmission Services necessary for Power Marketing,both for supplying Native Load requirements and selling surplus SystemResourcesshallbeacquiredandmanagedbyIEStoeffectuatethepurchasesandsalesdescribedabove.Costs of acquiring AncillaryServicesandThird-Party Transmission incurred for Power Marketing tosupplyNativeLoadshallbeincludedintheMarketPrice.
3.4 Hedqinq Transactions:From time to time lES may enter into hedgingtransactionsasapartoftheServicestooptimizeSystemResourcemanagement.Hedging transactions undertaken as a part of the Servicesshallbeusedexclusivelyforhedge(risk reducinq)transactions.Nospeculative(risk accumulatinq)transactions will be executed on behalf ofIdahoPower.Hedge transactions will only be undertaken with the priorconsultationandapprovaloftheIdahoPowerOversightManager.
3.5 Brokerinq Transactions:From time to time IES may act as a broker toarrangepowerpurchaseorsalestransactionsbetweenIdahoPowerandthirdparties.If Idaho Power desires to enter into forward transactions,lES will only participate as a broker.Idaho Power will not enter intoforwardtransactionsbrokeredbylESwithoutthepriorconsultationandapprovaloftheIdahoPowerOversightManager.
4.Priority For Use of System Resources
4.1 At all times and under all conditions IES will provide the Services in amannerthatwillprovideNativeLoadcustomerswiththefirstpriorityrighttoutilizeallavailablecapacityandenergyfromtheSystemResourcesandtoutilizeanyIdahoPower-owned or third-party-supplied transmissionasnecessarytosupplyNativeLoadonafirst-priority basis.
4
PAGE 74
5.Market Prices
5.1 The Market Prices referred to in this Statementof Services shall be theactualmarketsettlementpricesbasedontheappropriatepublishedindexpriceorthird-party quotesfor the product,taken from the closest relevantproductmarketfortheapplicabletimeandlocationofthetransaction.Forexample,during the spring and winter seasons,the Market Price forelectricenergyismostlikelytobebasedontheDowJonesMid-ColumbiaElectricityPriceindex("Mid-C").During the early summer and fall ,theMarketPriceforelectricenergyismostlikelytobebasedontheDowJonesPaloVerdePriceindex("Palo Verde").The actual computation oftotalMarketPricewillbecomputedinaccordancewiththefollowing:
5.1.1 For Term and Intramonth transactions,the market settlement pricewillbeinaccordancewiththeformulaesetoutonTable1attachedtothisStatementofServicesNo.1.
5.1.2 For Real-Time Transactions,the market settlement price will be anhourlysettlementpricedeterminedasfollows:(1)for sales þ{fyIdahoPower,the price will be equal to the lowest real-timetransactionpriceatwhichIESsoldpowertonon-affiliatesfor thathour;and (2)for purchases by IES from Idaho Power,the price willbeequaltothehighestreal-time transaction price at which IESpurchasedpowerfromnon-affiliates for that hour.
5.1.3 For Ancillary Services,the actual price paid by lES for AncillaryServicesusedtosupplyNativeLoads.
6.IES Compensation For Power Services Provided
6.1 For providing the Power Marketing and System Resource managementservicesunderthisStatementofServicesNo.1,IES will be paid$300,696.30 per month.
7.Pricing For Non-Power Goods and Services Provided
7.1 The prices for all non-power goods and services purchased and soldbetweenIESandIdahoPowershallbedeterminedinaccordancewith thethen-current Affiliated Services Agreementbetween the Parties asprovidedtotheIdahoPublicUtilitiesCommissionpursuanttoIPUC OrderNo.27348.For the year 2000,IES will pay Idaho Power $87,293.53 permonthfornon-power goods and services.
5
PAGE 75
8.System Resources
8.1 Idaho Power will own,operate,maintain and dispatch the electricgenerationandtransmissionfacilitiesincludedinSystemResources.IESwilltakesuchstepsasmayberequiredtoobtainfromIdahoPower'sDeliveryBusinessUnittherighttouseIdahoPower-owned transmissioncapabilityforPowerMarketingunderthisAgreement.
9.Allocation of Counter-Party Defaults.
9.1 The Parties recognize that wholesale market transactions carry a risk ofcounter-party default.Upon such default,the Parties will pro-rate any lossbasedonIdahoPower's share of IES's total transactions with thedefaultingpartyateachdeliverypointwhereadefaultoccurs,
6 PAGE 76
TABLE 1
STATEMENTOF SERVICES NO.1
Purchases (using Mid-C Index for intramonth deals,using Mid-C quote for termdeals)
Transfer Cost =(Mid-CLL X TOtal LL MWh)+(Mid-CHL X TOtal HL MWh)+TransmissionCostwhere'Transmission Cost'is the sum of firm transmission tariff rate of atransmissionproviderthathasavailabletransmissioncapacityfromMid-C and cost oftransmissionlosseschargedbythetransmissionprovider.
Sales (using Mid-C Index for intramonth deals,using Mid-C quote for term deals)
Transfer Cost =(Mid-CLL pfÌC€X Total LL MWh)+(Mid-CHL PfiCO X TOtal HL MWh)-Transmission Cost where 'Transmission Cost'is the sum of firm transmission tariff rateofatransmissionproviderthathasavailabletransmissioncapacitytoMid-C and cost oftransmissionlosseschargedbythetransmissionprovider.
Purchases (using Palo Verde Index for intramonth deals,using Palo Verde quotefortermdeais)
Transfer Cost =(Palo VerdeLL PfÌCO X TOtal LL MWh)+(Palo Verdese Price x Total HLMWh)+TransmissionCost where 'TransmissionCost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacityfromPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
Sales (using Palo Verde Index for intramonth deals,using Palo Verde quote fortermdeals)
Transfer Cost =(Palo Verde,Price x Total LL MWh)+(Palo Verde,Price x Total HLMWh)-TransmissionCost where 'TransmissionCost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacitytoPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
PAGE 77
Attachment G
PAGE 78
IDACORP Energy Solutions,s.¿.Suostitute Service Agreement No.1FERCElectricTariff
Original Volume No.1
AGREEMENTFOR ELECTRICITYSUPPLY MANAGEMENTSERVICES
BETWEEN
IDAHO POWER COMPANYAND IDACORP ENERGY SOLUTIONS LP
THIS ELECTRICITYSUPPLY MANAGEMENT SERVICES AGREEMENT
(the "Agreement")is made and entered into as of the day of ,
2000,by and between IDAHO POWER COMPANY ("Idaho Power"),an Idaho
corporation,and IDACORP ENERGY SOLUTIONS LP,dba IDACORP ENERGY
("!ES"),a Delaware Limited Partnership.Idaho Power and IES may also be referred to
in this Agreementindividuallyas "Party"or collectivelyas "Parties."idaho Powerand
lES are both wholly-ownedsubsidiaries of IDACORP,Inc.
RECITALS
A.Idaho Power owns and operateselectric generatingequipmentand
transmission facilities to supplythe electric load and service reliabilityrequirementsof
its customers.
B.Idaho Power performs wholesale electricity marketingactivities to
acquire electricity to supplementits own electric generationresources and to optimize
the operation of its electric generationresources.These activities provideIdaho
Power'scustomers with additionalsystem reliabilityand with additional revenue offset
which is used to reduce their overall cost of energy.
Issued by:Joe M.Holmes Effective April 28,2001Issuedon:May 14,2001
Filed to comply with order of the Federal Energy Regulatory Commission,Docket No.ER0l-1329-000,issuedApril27,2001,95 FERC ¶61,147 (2001).
PAGE 79
C.IES is engaged in the marketing of electricity and natural gas and
has the capability to provide electricity and natural gas supply managementservices.
D.Idaho Power and IES are both wholly-ownedsubsidiariesof
IDACORP,Inc.
E.Idaho Powerbelieves there are cost-savingsand risk mitigation
benefits that could be realized by contracting with lES to provideelectricitymarketing
and other electricity supply managementservices.
AGREEMENT
1.Servicep.lES will perform those electricitysupply management
services for Idaho Power (the "Services")that are more particularlydescribed in the
Statement(s)of Services"which are attached to this Agreement.Each Statementof
Services shall be construed as a part of this Agreement.If there are any conflicts
between the terms and conditions contained in the body of this Agreementand the
terms and conditions in a Statementof Services,the terms in the Statement of Services
shall prevall.
2._T.g_ryg.This Agreementshall remain in effect for five (5)years from
the date final approvalfrom the Commissionsis obtained in accordance with Section 9
herein ("initial Term").Followingthe initial Term,this Agreementwill be automatically
extended for additional two (2)year terms ("ExtensionTerms")unless eitherParty
cancels this Agreementby giving notice of cancellation at least six (6)monthsprior to
the expirationof the Initial Term or any ExtensionTerm.
PAGE 802
3.Compensation.IES's compensationfor providing the Services
provided shall be in accordancewith the schedules set forth in each Statementof
Services.
4.Cooperation.Consistentwith all applicable Commission-approved
Standards of Conduct and/or Codes of Conduct,each Party will provide the other Party
with such information that may be reasonably required by the other to managetheir
activities under this Agreement.Each Party shall designatean officer or senior
manager to facilitate managementcommunication between the Parties ('Oversight
Managers").The OversightManagers shall be the authorized representativesof the
Parties and shall have the responsibility of coordinatingwith the other Party's Oversight
Manager regarding IES provision of the Services.Each Party understandsthat
effective managementof this Agreementdependson the OversightMariagers'timely
and effective decisiorsmakingand approvalsof proposedactions.Each Party shai
inform the other in writing of the name and any limitations on the scope of authorityof
.its OversightManager.
5.Invoicing and Pavment.Unless otherwise specificallyagreed in a
Statement of Service,the Parties shall submit invoices monthlyfor Services provided
and reimbursable expenses incurred throughthe end of each month.Invoices wil
include informationreasonablyrequired to verify the items bHIed.BRIs wil be payable
fifteen (15)days followingthe date of the rendered bill ("Due Date").Interestwill accrue
on all payments due and unpaidafter the Due Date until paid at the rate of one percent
[1%)per month.
3 PAGE 81
6.Commission Jurisdiction.The respectiverights and obligationsof
the Parties hereundershall be subject to the jurisdictionand regulatoryauthority of the
Idaho Public Utilities Commission (IPUC),the Oregon Public UtilityCommission
(OPUC),the Public Utility Commission of Nevada (PUCN),and the Federal Energy
RegulatoryCommission(FERC).The IPUC,the OPUC,the PUCN and the FERC are
hereinafter collectivelyreferred to as "Commissions."
7.Codes of Conduct.At all times the Parties shall observe the
Standards of Conduct and/or Codes of Conduct approved by the Commissions.
8.Compliance With Laws and Regulatione.IES shall observe all
applicablelaws,ordinances,rules and regulationsrelating to deliveryof the Services,
and shall procure and maintain in force,at its sole expense,all registrations,permits,
licenses,and approvalsrequired by law or govemmentalauthorityto performthe
Services.
9.CommissionApproval.This Agreementand any future
amendments shall not become effective until the Commissions have issued their
respectivefinal orders approvingthe Agreementor any future amendments.If the final
orders of any of the Commissionsinitially approvingthis Agreementcontain material
terms or conditions that either Party finds unacceptable,within fourteen(14)days of the
issuance of the order,the adverselyaffected Party will have the rightto cancel this °
Agreementby givingthirty (30)days written notice of cancellation to the otherParty.
10.Future RequiatoryAuthority.If in the future the laws of the United
States or the laws of the states of Idaho,Oregon or Nevada are modifiedto materially
reduce or eliminate the FERC's,the IPUC's,the PUCN's or the OPUC'sauthorityto
4
PAGE 82
regulateall or any portion of the activities addressed by this Agreement,the Parties
agree that only those portions of this Agreementwhich by their terms are subjectto the
continuingjurisdiction of the FERC,the IPUC,the PUCN or the OPUC shall continue to
be subjectto Section 6 above.
11.General Provisions.
11.1 Successors and Assigng.This Agreementand all the terms
and provisionshereof shall be binding upon and inure to the benefit of the respective
successors and assigns of the Parties hereto,exceptthat no transfer by merger or
otherwise,nor any assignments hereof by lES shall become effective without the prior
written consent of Idaho Power being first obtained.Such consent shall not be
unreasonablywithheld or delayed.
11.2 Tax!Ls.lES shall be responsiblefor paymentof all taxes,
including,but not limited to,sales,use,gross receipts,transaction,business and
occupation or any other taxes,licenses or fees assessed by any taxingjurisdiction
directly associated with providing the Services.If either Party is entitled to an
exemptionfrom any such taxes or fees,it shall fumish the other Party satisfactory
supportingdocumentation.lES shall include in its invoices for Services provided
pursuantto this Agreement,and Idaho Power will reimburse IES for any taxes (except
taxes based on lES payrollor net income),licenses,or fees assessed or to be
assessed against IES by any taxing jurisdiction,directly as a result of providingthe
Services,including,but not limited to,sales,use,gross receipts,transactions or
business and occupation taxes.
5 PAGE83
11.3 Warranty of Title.Each Party warrantsthat it has or will
have title to all electrical energyor capacity or transmission capability purchased or sold
pursuantto this Agreement and that such products will be free and clear of all liens,
encumbrances and adverse claims.
11.4 Venue.This Agreementshall be govemedand interpreted
in accordance with the laws of the State of New York and venue for any litigation shall
be the Fourth Judicial District Court for Ada County in Boise,Idaho.
11.5 Changes.Any change,modification or alteration of this
Agreementshall be in writing,signed by the Parties.
11.6 Limitation of Liability.In no event will either Party be liable
hereunder for indirect,consequential,punitiveor exemplarydamages.
IN WITNESS WHEREOF,the Parties have executed this Agreementthe
day and year first above written.
IDAHO.POWER COMPANY
idaho Power")
By .Its Van rk ad4eMrs1 (ma,l
IDACORP ENERGY SOLUTIONSLP
dba IDACORPENERGY (IES)
For IDACORP,Inc.GeneralPartner
6 PAGE 84
ATTACHMENT1
STATEMENT OF SERVICESNO.1
ELECTRICITY SUPPLY MARKETINGAND MANAGEMENT
1.Definitions
When used in this Statement of Services No.1,the followingterms have thefollowingmeanings:
Power Marketinq means the sale and purchase of electric capacity andenergy,togetherwith associated transmission services and ancillaryservices.Power Marketing includes providing all of the individual ServicesdescribedinSections2and3ofthisStatementofServicesNo.1.
System Resources means the electric generation facilities owned byIdahoPower,the electrical energy and capacity generated by thosefacilitiesorpurchasedbyIdahoPowerfromthirdparties,and anyassociatedAncillaryServices.For purposes of this Agreement,SystemResourcesexpresslyexcludetransmissionfacilitiesandtransmissioncapabilityownedoracquiredbycontractbyIdahoPower.
Native Load means the electric loads of Idaho Power's retail customerslocatedinidahoPower's certificated area in the states of Idaho,OregonandNevadaandtheloadsofIdahoPower's full-requirements wholesalecustomers,including the City of Weiser,Idaho.
Terms defined in the main body of the Agreementwill have the samemeaningsinthisStatementofServices.
2.General Description of Services to be Provided.
2.1 IES will provide Idaho Power with the Power Marketing and SystemResourcemanagementfunctions("Services")generally described in thisSection2andmoreparticularlydescribedinSection3below.The PartiesintendthattheServicesprovidedunderthisStatementofServicesNo.1willincludethosePowerMarketingandassociatedSystemResourcemanagementservicesnecessarytoallowIdahoPowertosupplyitsNativeLoadcost-effectively and reliably.To accomplish that goal,the Services
1
PAGE 85
will generallyinclude:(1)the Power Marketing activities associated withmarketingSystemResourcesthataresurplustoNativeLoadrequirementsandmakingpurchasesfromthemarkettosupplyNativeLoadswhenIdahoPower's loads exceed its System Resource capabilityorwhenmarketpricesarebelowthevariablecostofSystemResources;(2)Managementof System Resources as necessary to optimize thePowerMarketingactivitiesdescribedherein;and (3)acquiring from IdahoPower's Delivery Business Unit the right to use Idaho Power-ownedtransmissioncapabilityforthePowerMarketingandSystemResourcemanagementactivitiesdescribedherein;and (4)the following:
2.1.1 Real-Time Power Marketinq:Real-timepower marketing istransactedonafrequentbasisoccurringinincrementsfrom aminimumofafewminutesuptoamaximumof12hoursahead.lES will provide twenty-fourhour staffed coverage of hourlyresourceandtransmissionmanagementforbalancingresourcesandloads.
2.1.2 intramonth Power Marketinq:Intramonth marketing is transacted intimeincrementsfromaminimumofonedaytoamaximumofonemonth.lES will provide full-time staff coverage for day-aheadbalancingofgeneration,transmission and load.
2.1.3 Hedqinq Manaqement:Hedgesare executed with the use offinancialinstrumentssuchasforwards,swaps,futures or optionscontracts.Financial instruments will be managed by a full-time IESstafftominimizetheriskoffinanciallossfromanadversepricechangeinacommoditymarket.
2.1.4 Third-Party Transmission Services:The provision of transmissioncapabilitytodeliverelectricalenergyfromthegenerationsourcestotheagreed-upon destination(s).IES will be responsible foracquiringthird-party transmission to effectuate the purchases andsalesdescribedinSection3.
2.1.5 Ancillary Services:Interconnected operations services necessarytoeffecttransfersofelectricitybetweenpurchasingandsellingentities.Includes load following,reserves,voltagecontrol andimbalancemanagement.IES will acquire such ancillary servicesasarerequiredtoeffectuatethepurchasesandsalesdescribedinSection3.
2.1.6 SchedulinqlOperations:Scheduling and Operations includes theprovisionofbackofficesupporttomarketinginitiativesonbehalfoftdahoPower.A full-time IES staff confirms purchases and sales,
2
PAGE 86
administers contracts,works with Idaho Power's dispatchers toscheduleenergytransactions,and resolves discrepancies betweenthenetofallsales,purchases and wheelingtransactions.The IESstaffwillalsoprovideISsupporttoPowerManagementandSystemResourcemanagement.
2.1.7 Risk Management:Risk Managementactivities reduce theoccurrenceoflossesthatwouldcauseIdahoPowertoincur highercostsforsupplyingNativeLoad.Risk Managementwill beprovidedbyafull-time IES staff that will identify the source ofexposure,quantify the exposure,assess the capacity for managingtheexposureinternallyandrecommendtheappropriateriskmanagementproductstotheOversightManagers.Risks to bemanagedincludepowerprices,volatility,interest rates,counter-party credit risk and foreign currency fluctuations.
2.1.8 Finance and Accountinq:Finance and Accounting will be providedbyafull-time lES staff that provides financial consultation andanalysisforPowerMarketingactivities.
3.Specific Description of Power Marketinq and System ResourceManagementServicestobeProvided
3.1 Purchases to Supply Native Load:As a part of the Services providedunderthisStatementofServicesNo.1,lES will undertake PowerMarketingactivitiesasnecessarytoacquireforsubsequentpurchase byIdahoPowersufficientenergyandcapacitytosupplyNativeLoadwhenalloftheNativeLoadcannotbeservedbySystemResourcesorwhenmarketpricesfordeliveredelectriccapacityandenergyarelessthanthecostofSystemResources.The sales price for delivered energy andcapacityacquiredbyIdahoPowerfromlEStosupplyNativeLoadwill beequaltotheMarketPricedeterminedinaccordancewithSection5.Under this Section 3.1,IES may also broker a purchase and saletransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
3.2 Sale of Surplus System Resources:As a part of the Services providedunderthisStatementofServicesNo.1,IES will purchase from IdahoPowerallofthegenerationfromtheSystemResourcesthatissurplus totheneedsofNativeLoad.The amount paid to Idaho Power for surplusSystemResourcegenerationwillbetheMarketPriceatthetimeofsaledeterminedinaccordancewithSection5.Under this Section 3.2 IES mayalsobrokerapurchaseandsalestransactionbetweenIdahoPowerandathirdpartyasprovidedinSection3.5.
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3.3 Ancillary Services and Third-Party Transmission:All Ancillary ServicesandThird-Party Transmission Services necessary for Power Marketing,both for supplying Native Load requirements and sellingsurplus SystemResourcesshallbeacquiredandmanagedbyIEStoeffectuatethepurchasesandsalesdescribedabove.Costs of acquiring AncillaryServicesandThird-Party Transmission incurred for Power Marketing tosupplyNativeLoadshallbeincludedintheMarketPrice.
3.4 Hedqinq Transactions:From time to time IES may enter into hedgingtransactionsasapartoftheServicestooptimizeSystemResourcemanagement.Hedging transactions undertaken as a part of the Servicesshallbeusedexclusivelyforhedge(risk reducinq)transactions.Nospeculative(risk accumulatinq)transactions will be executed on behalf ofIdahoPower.Hedge transactions will only be undertaken with the priorconsultationandapprovaloftheIdahoPowerOversightManager.
3.5 Brokerinq Transactions:From time to time IES may act as a broker toarrangepowerpurchaseorsalestransactionsbetweenIdahoPowerandthirdparties.If Idaho Power desires to enter into forward transactions,IES will only participate as a broker.Idaho Power will not enter intoforwardtransactionsbrokeredbyIESwithoutthepriorconsultationandapprovaloftheIdahoPowerOversightManager.
4.Priority For Use of System Resources
4.1 At all times and under all conditions IES will provide the Services in amannerthatwillprovideNativeLoadcustomerswiththefirstpriorityrighttoutilizeallavailablecapacityandenergyfromtheSystemResourcesandtoutilizeanyIdahoPower-owned or third-party-supplied transmission
as necessary to supply Native Load on a first-priority basis.
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5.Market Prices
5.1 The Market Prices referred to in this Statement of Services shall be theactualmarketsettlementpricesbasedontheappropriatepublishedindexpriceorthird-party quotes for the product,taken from the closest relevantproductmarketfortheapplicabletimeandlocationofthetransaction.Forexample,during the spring and winter seasons,the Market Price forelectricenergyismostlikelytobebasedontheDowJonesMid-ColumbiaElectricityPriceindex("Mid-C").During the early summer and fall
,theMarketPriceforelectricenergyismostlikelytobebasedontheDowJonesPaloVerdePriceIndex("Palo Verde").The actual computation oftotalMarketPricewillbecomputedinaccordancewiththefollowing:
5.1.1 For Term and intramonth transactions,the market settlementpricewillbeinaccordancewiththeformulaesetoutonTable1attachedtothisStatementofServicesNo.1.
5.1.2 For Real-TimeTransactions,the market settlement price will be anhourlysettlementpricedeterminedasfollows:(1)for sales |†Idaho Power,the price will be equal to the lowest real-timetransactionpriceatwhichIESsoldpowertonon-affiliatesfor thathour;and (2)for purchases by lES from Idaho Power,the price willbeequaltothehighestreal-time transaction price at which IESpurchasedpowerfromnon-affiliates for that hour.
5.1.3 For Ancillary Services,the actual price paid by lES for AncillaryServicesusedtosupplyNativeLoads.
6.IES Compensation For Power Services Provided
6.1 For providing the Power Marketing and System Resource managementservicesunderthisStatementofServicesNo.1,IES will be paid$300,696.30 per month.
7.Pricing For Non-Power Goods and Services Provided
7.1 The prices for all non-power goods and services purchased and soldbetweenIESandIdahoPowershallbedeterminedinaccordancewith thethen-current Affiliated Services Agreementbetween the Parties asprovidedtotheIdahoPublicUtilitiesCommissionpursuanttoIPUC OrderNo.27348.For the year 2000,IES will pay Idaho Power $87,293.53 permonthfornon-power goods and services.
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8.System Resources
8.1 Idaho Power will own,operate,maintain and dispatch the electricgenerationandtransmissionfacilitiesincludedinSystemResources.lESwilltakesuchstepsasmayberequiredtoobtainfromIdahoPower'sDeliveryBusinessUnittherighttouseIdahoPower-ownedtransmissioncapabilityforPowerMarketingunderthisAgreement.
9.Allocation of Counter-PartyDefaults.
9.1 The Parties recognize that wholesale market transactions carry a risk ofcounter-party default.Upon such default,the Parties will pro-rate any lossbasedonIdahoPower's share of IES's total transactions with thedefaultingpartyateachdeliverypointwhereadefaultoccurs.
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TABLE 1
STATEMENTOF SERVICES NO.1
Purchases (using Mid-C Index for intramonth deals,using Mid-C quote for termdeats)
Transfer Cost =(Mid-CLL X TOtal LL MWh)+(Mid-C,x Total HL MWh)+TransmissionCostwhere'TransmissionCost'is the sum of firm transmission tariff rate of atransmissionproviderthathasavailabletransmissioncapacityfromMid-C and cost oftransmissionlosseschargedbythetransmissionprovider.
Sales (using Mid-C Index for intramonth deals,using Mid-C quote for term deals)
Transfer Cost =(Mid-Ces price x Total LL MWh)+(Mid-CHL PriC€X Total HL MWh)-TransmissionCost where 'TransmissionCost'is the sum of firm transmission tariff rateofatransmissionproviderthathasavailabletransmissioncapacitytoMid-C and cost oftransmissionlosseschargedbythetransmissionprovider.
Purchases (using Palo Verde index for intramonth deals,using Palo Verde quotefortermdeats)
Transfer Cost =(Palo Verde,Price x Total LL MWh)+(Palo Verde,Price x Total HLMWh)+TransmissionCost where 'Transmission Cost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacityfromPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
Sales (using Palo Verde index for intramonth deals,using Palo Verde quote fortermdeats)
Transfer Cost =(Palo Verde,Price x Total LL MWh)+(Palo Verdes Price x Total HLMWh)-TransmissionCost where 'TransmissionCost'is the sum of firm transmissiontariffrateofatransmissionproviderthathasavailabletransmissioncapacitytoPaloVerdeandcostoftransmissionlosseschargedbythetransmissionprovider.
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Attachment H
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5.Market Prices
5.1 The Market Prices referred to in this Statement of Services shall be theactualmarketsettlementpricesbasedontheappropriatepublishedindexpriceorthird-party quotes for the product,taken from the closest relevantproductmarketfortheapplicabletimeandlocationofthetransaction.Forexample,during the spring and winter seasons,the Market Price forelectricenergyismostlikelytobebasedontheDowJonesMid-ColumbiaElectricityPriceIndex("Mid-C").During the early summer and fall ,theMarketPriceforelectricenergyismostlikelytobebasedontheDowJonesPaloVerdePriceindex("Palo Verde").The actual computation oftotalMarketPricewillbecomputedinaccordancewiththefollowing:
5.1.1 For Term and Intramonth transactions,the market settlement pricewillbeinaccordancewiththeformulaesetoutonTable1attachedtothisStatementofServicesNo.1.
5.1.2 For Real-Time Transactions,the market settlement price will be anhourlysettlementpricedeterminedasfollows:(1)for salesIdahoPower,the price will be equal to the lowestam
real-time transaction prices at which IES sold power to non-affiliatesteeerded for that hour;and (2)for purchases by IES fromIdahoPower,the price will be equal to the hiqhest real-timetransactionpriceatwhichIESpurchasedpowerfromnon-affiliatesforthathour.
5.1.3 For Ancillary Services,the actual price paid by lES for AncillaryServicesusedtosupplyNativeLoads.
6.IES Compensation For Power Services Provided
6.1 For providing the Power Marketing and System Resource managementservicesunderthisStatementofServicesNo.1,IES will be paid$300,696.30 per month.
7.Pricing For Non-Power Goods and Services Provided
7.1 The prices for all non-power goods and services purchased and soldbetweenIESandIdahoPowershallbedeterminedinaccordancewith thethen-current Affiliated Services Agreementbetween the Parties asprovidedtotheIdahoPublicUtilitiesCommissionpursuanttoIPUC OrderNo.27348.For the year 2000,lES will pay Idaho Power $87,293.53 permonthfornon-power goods and services.
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Attachment I
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UNITED STATES OF AMERICA
FEDERAL ENERGYREGULATORY COMMISSION
Idaho Power Company )
Docket No.ER01-1329-001IDACORPEnergySolutions,LP )
NOTICE OF FILING
Take notice that on May 14,2001,Idaho Power Company (IPC)and IDACORPEnergySolutions,LP submitted their compliance filing in this proceeding.
Any person desiring to be heard or to protest this filing should file a motion tointerveneorprotestwiththeFederalEnergyRegulatoryCommission,888 First Street,NE,Washington,DC 20426,in accordance with Rules 211 and 214 of the Commission's Rules ofPracticeandProcedure(18 CFR 385.211 and 18 CFR 385.214).All such motions or protestsshouldbefiledonorbefore,2001.Protests will be considered by theCommissiontodeterminetheappropriateactiontobetaken,but will not serve to makeprotestantspartiestotheproceedings.Any person wishing to become a party must file a motiontointervene.Copies of this filing are on file with the Commission and are available for publicinspection.This filing may also be viewed on the Internet athttp://www.ferc.fed.us/online/rims.htm(call 202-208-2222 for assistance).
David P.Boergers
Secretary
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CERTIFICATEOF SERVICE
I HEREBY CERTIFY that I have this day caused the foregoing document to be
served via first class mail,postage prepaid,upon each party designated on the official
service list in this proceeding.
Dated at Washington,D.C.this 14th day of May,2001.
Gary A.organs
Steptoe &Johnson LLP
1330 Connecticut Ave.,N.W.
Washington,D.C.20036
[phone]
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