20040223Application.pdf

MONICA MOEN , ISB # 5734
BARTON KLINE , ISB # 1526
Idaho Power Company
1221 West Idaho Street
P. O. Box 70
Boise, Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
f) ,- " \ Jf-- ;;LL,'it. ILED
200!i FES 19 Prl 4= 3 :
. '.
u TIL iT i L: S co""SS ION
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION -OF )
IDAHO POWER COMPANY FOR APPROVAL)
OF AN AGREEMENT FOR SALE AND
PURCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANY AND
RENEWABLE ENERGY OF IDAHO , INC.
CASE NO. IPC-04-d:J
APPLICATION
COMES NOW Idaho Power Company ("Idaho Power" or the "Company ) and
pursuant to IPUC Rule of Procedure 52, hereby applies for an Idaho Public Utilities
Commission ("I PUC" or the "Commission ) Order approving an Agreement between Idaho
Power and Renewable Energy of Idaho , Inc. ("Renewable Energy ) under which
Renewable Energy would sell and Idaho Power would purchase electric energy generated
by the Renewable Energy facility.
This Application is based on the following:
Renewable Energy proposes to design , construct, install , own , operate and
maintain a 17.5 MW biomass (primarily wood waste) generating facility to be located at the
APPLICATION - 1
old Boise Cascade plant site near Emmett, Idaho (the "Project"
).
The Project will be a
qualified small power production facility under the applicable provisions of the Public
Utilities Regulatory Policy Act of 1978 ("PURPA"
II.
On February 12 , 2004 , Idaho Power and Renewable Energy entered into a
Firm Energy Sales Agreement ("Agreem~nt") pursuant to the terms and conditions of the
PUC-approved Order for a Firm Energy Sales Agreement for a Cogeneration Small Power
Producer ("CSPP"Under the terms of that Agreement, Renewable Energy elected to
contract with Idaho Power for a 20-year term. Renewable Energy further elected to
contract with the Company using the Non-Levelized Published Avoided Cost Rate as
currently established by the Commission for energy less than 10 MWs and a negotiated
price for energy over 10 MWs. A copy of the Agreement between Idaho Power and
Renewable Energy is attached hereto as Exhibit 1.
III.
In many respects, this Agreement is similar to the agreement between Idaho
Power and Tiber Montana LLC that was approved by the Commission in Order No. 29232
issued on April 25, 2003 and the recently submitted agreement between the Company and
United Materials of Great Falls, Inc. (Case No. IPC-04-01). As those agreements reflect
Idaho Power has developed a CSPP agreement concept that is consistent for all CSPP
projects regardless of their resource (wind , hydro, geothermal , wood waste , etc.) that
incorporates (1) current IPUC orders , (2) current technologies and (3) current utility industry
standards. This Agreement between Idaho Power and Renewable Energy contains many
of these concepts as well as unique negotiated provisions due to the fact that the Project
APPLICATION - 2
wishes to routinely deliver more than 10 MW to Idaho Power. Following is a brief
description of the unique provisions of the Idaho Power/Renewable Energy Agreement:
10 MW or smaller Project size and eliqibilitv for the published Avoided
Cost Rate : In recent Commission Orders, the Commission has established 10 MW to be
the size limit for PURPA projects eligible for the Oualifying Facility ("OF") published
Avoided Cost. In these Orders , the Commission did not specify how the 10 MW limit was
to be measured. Historically, the nameplate rating of the facility has been considered to be
the measurement for this limit. In recent months , there has been considerable discussion
that this limitation should be based on net energy deliveries to the utility and not nameplate
rating.
Many OF facilities, due to less than 100% capacity factors and unknown
incremental fuel supplies , are not able to commit to a long-term firm commitment of the
incremental energy production above 10 MW. To address this issue, Idaho Power has
created a concept of "Optional Energy.
Optional Energy is all energy that the Project delivers to Idaho Power that
exceeds 10 000 kWh in a single hour, typically non-firm energy, as defined in paragraph
18 of this Agreement. Optional Energy is identified through hourly metering. The price of
this energy is based upon negotiated prices between Idaho Power and the specific project.
As non-firm energy, Idaho Power considers the value of this energy to be a variable current
month market based price. Renewable Energy requested that fixed prices for its Optional
Energy be established rather than receiving the monthly variable market prices.
Idaho Power and Renewable Energy, therefore , negotiated fixed prices for
the Optional Energy (Section 7.5 of the Agreement) in consideration of the Project
providing year ahead firm commitments of the monthly Optional Energy Amounts (Section
APPLICATION - 3
6.4 of the Agreement). The Shortfall and Surplus Energy concepts (Sections 7.7 and 7.
of the Agreement) also apply to this Optional Energy. The concept of Optional Energy
maintains the integrity of the 10 MW limitation and the OF published Avoided Cost rates
but also allows the Project developer the ability to assess its specific facility's performance
capital cost and other risk/benefit factors in designing the size of the OF's individual
facilities.
Seasonality: Previous IPUC Orders and OF agreements recognized
that the value of purchased power differs in accordance with the season in which it is
actually delivered to Idaho Power. Thus , as an incentive for a OF developer to deliver
energy to the Company during times when it is of greater value to the Company, the
published Avoided Cost rate has been historically "seasonalized." In the Tiber Agreement
Idaho Power realigned these seasons to coincide with the months in which Idaho Power
identified actual energy needs and periods of higher demand. In this Agreement, these
months are further refined to reflect the current values of this energy to Idaho Power. The
seasons are identified in Section 6.2 of the Agreement and the seasonalized Base Energy
Purchase Price and Optional Base Energy Price are listed in Section 7.1 and Section 7.5 of
the Agreement, respectively.
Environmental Attributes: Idaho Power has filed a petition (IPC-04-
02) with the Commission to clarify ownership of the Environmental Attributes associated
with OF projects from whom Idaho Power purchases energy. As specified in Section 8 of
this Agreement, the final Order of the Commission in response to the Company s petition
will be applicable to this Agreement.
APPLICATION - 4
IV.
Section 24 of the Agreement provides that the Agreement will not become
effective until the Commission has approved all of the Agreement's terms and conditions
and declared that all payments Idaho Power makes to Renewable Energy for purchases of
energy will be allowed as prudently incurred expenses for ratemaking purposes.
Within this Agreement, various requirements have been placed upon
Renewable Energy in order for Idaho Power to accept energy deliveries from this Project.
Idaho Power will monitor compliance with these initial requirements in addition to the
ongoing requirements through the full term of this Agreement. Should the Commission
approve this Agreement , Idaho Power intends to consider the Effective Date of the
Agreement to be February 12, 2004.
VI.
The Agreement, as signed and submitted by the Parties thereto, contains
Non-Levelized Published Avoided Cost Rates in conformity with applicable IPUC Orders.
All applicable interconnection charges and monthly Operation and Maintenance charges
under Schedule 72 will be assessed Renewable Energy.
VII.
Service of pleadings, exhibits, orders and other documents relating to this
proceeding should be served on the following;
Monica B. Moen , Attorney II
Barton L. Kline , Senior Attorney
Idaho Power Company
O. Box 70
Boise , Idaho 83707
Randy C. Allphin
Contract Administrator
Idaho Power Company
O. Box 70
Boise , Idaho 83707
APPLICATION - 5
NOW , THEREFORE , based on the foregoing, Idaho Power Company hereby
requests that the Commission issue its Order:
(1 )Approving the Firm Energy Sales Agreement between Idaho Power
Company and Renewable Energy without change or condition; and
(2)Declaring that all payments for purchases of energy under the Firm
Energy Sales Agreement between Idaho Power Company and Renewable Energy be
allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this 19th day of February 2004.
~ (!3.
MONICA B. MOEN
Attorney for Idaho Power Company
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 19th day of February 2004 , I served a true and correct
copy of the within and foregoing APPLICATION upon the following named parties by the
method indicated below, and addressed to the following:
Richard Vinson , President
Renewable Energy of Idaho , Inc.
320 Mountview
Meridian , ID 836742
Hand Delivered
S. Mail
Overnight Mail
FAX
(/;.
MONICA B. MOEN
APPLICATION - 6
BEFORE THE IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-O4-
IDAHO POWER COMPANY
EXHIBIT
Article
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
RENEW ABLE ENERGY OF IDAHO, INc.
TABLE OF CONTENTS
TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment
Environmental Attributes
Facility and Interconnection
Disconnection Equipment
Metering and Telemetry
Records
Protection
Operations
Indemnification and Insurance
Force Majeure
Land Rights
Liability; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Governmental Authorization
Commission Order
Successors and Assigns
Modification
Taxes
Notices
Additional Terms and Conditions
Severability
Counterparts
Entire Agreement Signatures
Appendix A
Appendix B
Appendix C
Final
2/912004
FIRM ENERGY SALES AGREEMENT
Emmett Facility
Project Number: 11866070
THIS AGREEMENT, entered into on this day of Feb.,.v,,(d'2004 between
RENEWABLE ENERGY OF IDAHO, INC (Seller), and IDAHO POWER COMPANY, an
1:;-0
Idaho corporation (Idaho Power), hereinafter sometimes referred to collectively as "Parties" or
individually as "Party.
WITNESSETH:
WHEREAS, Seller will design, construct, own , maintain and operate an electric generation
facility; and
WHEREAS, Seller wishes to sell, and Idaho Power is willing to purchase, firm electric energy
produced by the Seller s Facility.
THEREFORE, In consideration of the mutual covenants and agreements hereinafter set forth, the
Parties agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreement and the appendices attached hereto, the following terms
shall have the following meanings:
1.1 Annual Net Energy" - Sum of the monthly Net Energy Amounts specified in paragraph 6.2 for a
single Contract Year.
1.2 Base Energy" - Monthly Net Energy less than 110% of the monthly Net Energy Amount as
specified in paragraph 6.2 of this Agreement.
1.3 Commission" - The Idaho Public Utilities Commission.
1.4 Contract Year" - The period commencing each calendar year on the same calendar date as the
Operation Date and ending 364 days thereafter.
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1.5
1.6
1.7
1.8
1.9
1.10
1.11
Designated Dispatch Facility" - Idaho Power s Control Area Operations Group, or any
subsequent group designated by Idaho Power.
Disconnection Equipment - All equipment specified in Schedule 72 and the Generation
Interconnection Process and any additional equipment specified in Appendix B.
Facility - That electric generation facility described in Appendix B of this Agreement.
First Energy Date" - The day commencing at 0001 hours, Mountain Time, following the day that
Seller has satisfied the requirements of Article IV and the Seller begins delivering energy to
Idaho Power s system at the Point of Delivery.
Generation Interconnection Process" - Idaho Power s generation interconnection application
and engineering review process developed to ensure a safe and reliable generation
interconnection in compliance with all applicable regulatory requirements, Prudent Electrical
Practices and national safety standards.
Interconnection Facilities - All equipment specified in Schedule 72 and the Generation
Interconnection Process and any additional equipment specified in Appendix B.
Losses" - The loss of energy expressed in kilowatt hours (kWh) occurring as a result of the
transformation and transmission of energy between the Facility and the Point of Delivery. The
Loss calculation formula is specified in Appendix B of this Agreement.
1.12 Market Energy Cost - eighty-five percent (85%) of the weighted average of the daily on-peak
and off-peak Dow Jones Mid-Columbia Index (Dow Jones Mid-C Index) prices for non-firm
energy. If the Dow Jones Mid-Columbia Index price is discontinued by the reporting agency, both
Parties will mutually agree upon a replacement index which is similar to the Dow Jones Mid-
Columbia Index. The selected replacement index will be consistent with other similar agreements
and a commonly used index by the electrical industry.
1.13 Material Breach"- A Default (paragraph 22.2.1) subject to paragraph 22.
1.14 Maximum Capacity Amount" - The maximum capacity (MW) of the Facility will be 17.5 MW.
1.15 Metering Equipment - All equipment specified in Schedule 72, the Generation Interconnection
Process, this Agreement and any additional equipment specified in Appendix B required to
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2/912004
1.16
1.17
1.18
1.19
1.20
1.21
measure, record or telemeter power flows between the Seller s electric generation plant and Idaho
Power s system.
Net Energy" - Electric energy produced by the Facility, less Station Use and less Losses,
expressed in kilowatt hours (kWh), which Seller commits to deliver to Idaho Power at the Point
of Delivery for the full term of the Agreement. Net Energy will never exceed the Maximum
Capacity Amount and will not include Optional Energy.
Operation Date" - The day commencing at 0001 hours, Mountain Time, following the day that
all requirements of paragraph 5.2 have been completed.
Optional Energy" - Electric energy produced by the Facility, less Station Use, and less Losses,
expressed in kWh, which Seller deliverers to Idaho Power at the Point of Delivery that exceeds
000 kWh in any single hour. Optional Energy will never exceed the Maximum Capacity
Amount.
Optional Base Energy" - Monthly Optional Energy less then 110% of the monthly Optional
Energy Amount specified in paragraph 6.4 of this Agreement.
Optional Shortfall Energy If the month's Optional Energy is less than 90% of the monthly
Optional Energy Amount, as specified in paragraph 6.4 of this Agreement for the corresponding
month, Optional Shortfall Energy will be the difference between 90% of the monthly Optional
Energy Amount and the same month's actual Optional Energy delivered to the Point of Delivery.
Optional Surplus Energy - Optional Energy delivered by the Seller to Idaho Power and
accepted by Idaho Power during the month which exceeds 110% of the monthly Optional Energy
Amount for the corresponding month specified in paragraph 6.4 of this Agreement and all
Optional Energy which is delivered by the Seller to Idaho Power prior to the Operation Date.
1.22 Point of Delivery - The location specified in Appendix B, where Idaho Power s and the
Seller s electrical facilities are interconnected.
1.23 Prudent Electrical Practices" - Those practices, methods and equipment that are commonly and
ordinarily used in electrical engineering and operations to operate electric equipment lawfully,
safely, dependably, efficiently and economically.
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219/2004
1.24
1.25
1.26
1.27
1.28
1.29
1.30
Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates
achieving, the Operation Date.
Schedule 72"- Idaho Power s Tariff No 101 , Schedule 72 or its successor schedules as
approved by the Commission.
Season" - The three periods identified in Article VI.
Shortfall Energy" - If the month's Net Energy is less than 90% of the monthly Net Energy
Amount as specified in paragraph 6.2 of this Agreement for the corresponding month, Shortfall
Energy wi11 be the difference between 90% of the monthly Net Energy Amount same month'
actual Net Energy delivered to the Point of Delivery.
Special Facilities - Additions or alterations of transmission and/or distribution lines and
transformers as described in Appendix B, Schedule 72 or the Generation Interconnection Process
required to safely interconnect the SeHer s Facility to the Idaho Power system.
Station Use" - Electric energy that is used to operate equipment that is auxiliary or otherwise
related to the production of electricity by the facility.
Surplus Energy - Net Energy delivered by the Seller to Idaho Power and accepted by Idaho
Power during the month which exceeds 110% of the monthly Net Energy Amount for the
corresponding month specified in paragraph 6.2 of this Agreement and all Net Energy which is
delivered by the Seller to Idaho Power prior to the Operation Date.
1.31 Total Cost of the Facility" - The total cost of structures, equipment and appurtenances.
ARTICLE TI: NO RELIANCE ON IDAHO POWER
Seller Independent Investigation - Seller warrants and represents to Idaho Power that in entering
into this Agreement and the undertaking by Seller of the obligations set forth herein, Seller has
investigated and determined that it is capable of performing hereunder and has not relied upon
the advice, experience or expertise of Idaho Power in connection with the transactions
contemplated by this Agreement.
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3.1
SeHer Independent Experts - All professionals or experts including, but not limited to, engineers
attorneys or accountants, that Seller may have consulted or relied on in undertaking the
transactions contemplated by this Agreement have been solely those of Seller.
ARTICLE III: WARRANTIES
No Warranty by Idaho Power - Any review, acceptance or failure to review Seller s design
specifications, equipment or facilities shaH not be an endorsement or a confirmation by Idaho
Power and Idaho Power makes no warranties , expressed or implied, regarding any aspect of
Seller s design, specifications, equipment or facilities, including, but not limited to, safety,
durability, reliability, strength, capacity, adequacy or economic feasibility.
Qualifying Facility Status - Seller warrants that the Facility is a "Qualifying Facility," as that term
is used and defined in 18 CFR ~292.207. After initial qualification, SeHer will take such steps as
may be required to maintain the Facility s Qualifying Facility Status during the term of this
Agreement and SeHer s failure to maintain Qualifying Facility Status will be a Material Breach of
this Agreement. Idaho Power reserves the right to review the SeHer s Qualifying Facility Status
and associated support and compliance documents at anytime during the term of this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
4.1 Prior to the First Energy Date and as a condition of Idaho Power s acceptance of deliveries of
energy from the SeHer, SeHer shall:
4.1.Submit proof to Idaho Power that all licenses, permits or approvals necessary for Seller
operations to continue operations have been obtained from applicable federal, state or
local authorities, including, but not limited to, evidence of compliance with Subpart B, 18
CFR 292.207.
1.2 Opinion of Counsel - Submit to Idaho Power an Opinion Letter signed by an attorney
admitted to practice and in good standing in the State of Idaho providing an
opinion that SeHer s licenses, permits and approvals as set forth in paragraph 4.
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2/9/2004
above are legally and validly issued, are held in the name of the Seller and, based on
a reasonable independent review, counsel is of the opinion that Seller is in substantial
compliance with said permits as of the date of the Opinion Letter. The Opinion Letter
will be in a form acceptable to Idaho Power and will acknowledge that the attorney
rendering the opinion understands that Idaho Power is relying on said opinion. Idaho
Power s acceptance of the form will not be unreasonably withheld. The Opinion Letter
will be governed by and shall be interpreted in accordance with the legal opinion accord
of the American Bar Association Section of Business Law (1991).
1.3 Engineer s Certifications - Submit an executed Engineer s Certification of Design &
Construction Adequacy and an Engineer s Certification of Operations and Maintenance
("O&M") Policy as described in Commission Order No. 21690. These certificates will
be in the form specified in Appendix C but may be modified to the extent necessary to
recognize the different engineering disciplines providing the certificates.
1.4 Insurance - Submit written proof to Idaho Power of all insurance required in XV.
1.5 Interconnection - Provide written proof to Idaho Power that all Schedule 72 and
Generation Interconnection Process requirements have been completed.
1.6 Written Acceptance - Obtain written confirmation from Idaho Power that all conditions to
acceptance of energy have been fulfilled. Such written confirmation shall not be
unreasonably withheld by Idaho Power.
ARTICLE V: TERM AND OPERATION DATE
Term - Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective
on the date first written, and shall continue in full force and effect for a period of twenty (20)
Contract Years from the Operation Date.
5.2 Operation Date - The Operation Date may occur only after the Facility has achieved all of the
following:
a) Achieved the First Energy Date.
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2/9/2004
5.3
b) Commission approval of this Agreement in a form acceptable to Idaho Power has
been received.
c) Seller has demonstrated to Idaho Power s satisfaction that the Facility is complete and
able to provide energy in a consistent, reliable and safe manner.
d) Seller has received written confirmation from Idaho Power of the Operation Date.
This confirmation will not be unreasonably withheld by Idaho Power.
Seller s failure to achieve the Operation Date within ten (10) months of the Scheduled Operation
Date will be an event of default.
ARTICLE VI: PURCHASE AND SALE OF NET ENERGY
Delivery and Acceptance of Net Energy - Except when either Party s performance is excused as
provided herein, Idaho Power will purchase and Seller will sell all of the Net Energy and
Optional Energy produced by the Facility and delivered by the Seller to the Point of Delivery that
does not exceed the Maximum Capacity Amount. All energy produced by the Seller s Facility
will be delivered to Idaho Power at the Point of Delivery as designated in Appendix B of this
Agreement and the rate of delivery will never exceed the Maximum Capacity Amount.
6.2 Net Energy Amounts - Seller intends to deliver Net Energy in the following monthly amounts:
Season 1
Month kWh
March
April
May
July 365 600
August 365,600
November 128 000
December 365 600
June 128 000
September 168 000
October 365,600
January 365,600
February 652 000
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Season 2
Season 3
Final
2/9/2004
Seller s Adiustment of Net Ener~y Amount - By written notice given to Idaho Power in
accordance with paragraph 28., the Seller may revise the monthly Net Energy Amounts
specified in paragraph 6.2 on the following Designated Dates. These notices must be
received a minimum 15 days prior to the Designated Dates and failure to provide timely
written notice of changed amounts wi1l be deemed to be an election of no change.
Designated Dates
Last day of the 6th month after the Operation Date
Last day of the 12th month after the Operation Date
Last day of the 3rd, 5th , 7 , 9th, 11 , 13 , 15 , 17 , and 19th Contract
Year
Idaho Power Adiustment of Net Energy Amount - If Idaho Power is excused from
accepting the Seller s Net Energy as specified in paragraph 14.3.1 or if the Seller declares
a Suspension of Energy Deliveries as specified in paragraph 14.4., the Net Energy
Amount as specified in paragraph 6.2 for the specific month in which the reduction or
suspension under paragraph 14.1 or 14.4.1 occurs wi1l be reduced in accordance with
the following:
Where:
NEA = Current Months Net Energy Amount (Paragraph 6.
RSH Actual hours the Facility s Net Energy deliveries were either
reduced or suspended under paragraph 14.3.1 or 14.4.
Actual total hours in the current month
Resulting formula being:
Adjusted Net Energy Amount =RSH
NEA NEA
This Adjusted Net Energy Amount will be used in applicable Surplus Energy and Shortfall
Energy calculations for only the specific month in which Idaho Power was excused from
accepting the SeJler s Net Energy or the Seller declared a Suspension of Energy.
Unless excused by an event of Force Majeure or by an adjustment as provided in paragraph 6.
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2/912004
6.4
Seller s failure to de)jver Net Energy in any Contract Year in an amount equal to at least ten
percent (10%) of the Annual Net Energy Amount as specjfied in paragraph 6.2 or as may be
adjusted due to paragraph 6., shaH cons6tute an event of default.
Optional Energy Amounts - No later then 60 days pdor to the Opera6on Date, the SeHer shaH
provide Idaho Power the intended monthly kWh quan6ty of Optional Energy that the SeHer
commits to deliver to Idaho Power for the remaining months of the current calendar year. No
notice by the SeHer to Idaho Power wiH be deemed to be notification of the monthly Op60nal
Energy Amounts to be delivered to Idaho Power during the remaining months of the current
calendar year to be 0 kWh per month. For all other years of this Agreement, by December 15 of
the preceding calendar year, the Seller shaH provide Idaho Power the intended monthly kWh
quantity of Optional Energy that the SeHer commits to deliver to Idaho Power during the next
calendar year by month. No notice by the Seller to Idaho Power will be deemed to be notification
of the monthly Optional Energy Amounts to be delivered to Idaho Power during the next calendar
year to be 0 kWh per month.
6.4.Idaho Power Adiustment of Optional Energy Amount - If Idaho Power is excused from
accepting the Seller s Optional Energy as specified in paragraph 14.3.1 or if the SeHer
declares a Suspension of Energy Deliveries as specified in paragraph 14.4.1 , the Optional
Energy Amount as specified in paragraph 6.4 for the specific month in which the
reduction or suspension under paragraph 14.1 or 14.4.1 occurs will be reduced in
accordance with the following:
Where:
OEA = Current Months Optional Energy Amount (Paragraph 6.4)
RSH Actual hours the Facility s Optional Energy deliveries were
either reduced or suspended under paragraph 14.3.1 or 14.4.1
Actual total hours in the current month
Resulting formula being:
Adjusted Optional Energy Amount =NEA
RSH
NEA
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2/9/2004
This Adjusted Optional Energy Amount will be used in applicable Optional Surplus Energy and
Optional Shortfall Energy calculations for only the specific month in which Idaho Power was
excused from accepting the Seller s Optional Energy or the Seller declared a Suspension of
Energy.
ARTICLE Vll: PURCHASE PRICE AND METHOD OF PAYMENT
7.1 Base Ener Purchase Price - For all Base Energy, Idaho Power will pay the non-Ievelized
energy price in accordance with Commission Order 29391 with seasonalization factors applied:
Season 1 - (73.50 %)Season 2 - (120.00 %)Season 3 - (100.00 %)
Year MiHs/kWh MiHs/kWh Mills/kWh
2004 33.54.45.
2005 34.46 56.46.
2006 35.57.47.
2007 36.58.49.
2008 36.60.50.
2009 37.61.51.48
2010 38.63.52.
2011 39.64.53.
2012 40.66.55.
2013 41.67.56.
2014 42.69.46 57.
2015 43.71.59.
2016 44.72.60.
2017 45.74.62.
2018 46.76.63.
2019 47.78.65.
2020 48.79.66.
2021 50.81.68.
2022 51.83.69.
2023 52.85.71.49
2024 53.87.73.
2025 55.89.74.
Surplus Energy Price - For all Surplus Energy, Idaho Power shaH pay to the Seller the current
month's Market Energy Cost or the Base Energy Purchase Price specified in paragraph 7.
whichever is lower.
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7.4
Shortfall Energy Price - For all Shortfall Energy, if the Market Energy Cost for the month in
which the Shortfall Energy occurs is less then the Base Energy Purchase Price for the same
month , the Shortfall Energy Price will be O. If the Market Energy Cost for the month in which
the Shortfall Energy occurs is greater then the Base Energy Purchase Price for the same month
the Shortfall Energy Price will be the current month's Market Energy Cost less the Base Energy
Purchase Price.
Shortfall Energy Payment - The Shortfall Energy Payment amount is the Shortfall Energy
amount multiplied by the Shortfall Energy Price. The Shortfall Energy Payment will be withheld
from the current month's energy payment. If the current month's energy payment is less than the
Shortfall Energy Payment and the Optional Energy Payment, the Seller will make payment to
Idaho Power of the unpaid balance within 15 days of being notified of the outstanding balance.
Optional Base Energy Price - For all Optional Base Energy, Idaho Power will pay:
Season 1 - (73.50 %)Season 2 - (120.00 %)Season 3 - (100.00 %)
Year Mills/kWh Mills/kWh Mills/kWh
2004 25.42.35.
2005 25.42.42 35.
2006 26.42.35.
2007 26.43.36.
2008 26.43.36.42
2009 27.44.36.
2010 27.44.37.
2011 27.45.37.
2012 27.45.48 37.
2013 28.45.38.
2014 28.42 46.38.
2015 28.46.39.
2016 28.47.39.44
2017 29.47.39.
2018 29.48.40.
2019 29.48.40.
2020 30.49.41.
2021 30.47 49.41.45
2022 30.50.41.
2023 31.50.42.
2024 31.51.42.
2025 31.51.43.
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2/912004
Op60nal Surplus Energy Price - For all Optional Surplus Energy, Idaho Power shall pay to the
Seller the current month's Market Energy Cost or the Optional Base Energy Purchase Price
specified in paragraph 7., whichever is lower.
Optional Shortfall Energy Price - For all Optional Shortfall Energy, if the Market Energy Cost
for the month in which the Optional Shortfall Energy occurs is less then the Optional Base
Energy Purchase Price for the same month, the Optional Shortfall Energy Price will be O. If the
Market Energy Cost for the month in which the Optional Shortfall Energy occurs is greater than
the Optional Base Energy Purchase Price for the same month, the Optional Shortfall Energy Price
will be the current month's Market Energy Cost less the Optional Base Energy Purchase Price.
Optional Shortfall Energy Payment - The Optional Shortfall Energy Payment amount is the
Optional Shortfall Energy amount multiplied by the Optional Shortfall Energy Price. The
Optional Shortfall Energy Payment will be withheld from the current month's energy payment. If
the current month's energy payment is less than the Shortfall Energy Payment and the Optional
Energy Payment, the Seller will make payment to Idaho Power of the unpaid balance within 15
days of being notified of the outstanding balance.
Payment Due Date - Energy payments to the Seller will be disbursed within 30 days of the date
which Idaho Power receives and accepts the documentation of the monthly Net Energy and
Optional Energy actually delivered to Idaho Power as specified in Appendix A.
7.10 Continuing Jurisdiction of the Commission This Agreement is a special contract and, as such, the
rates, terms and conditions contained in this Agreement will be construed in accordance with
Idaho Power Company v. Idaho Public Utilities Commission and Afton Energy. Inc , 107 Idaho
781 693 P.2d 427 (1984), Idaho Power Company v. Idaho Public Utilities Commission, 107
Idaho 1122 695 P.2d 1 261 (1985), Afton Energy. Inc. v. Idaho Power Company 111 Idaho 925,
729 P.2d 400 (1986), Section 210 of the Public Utilities Regulatory Policies Act of 1978 and 18
CFR ~292.303-308.
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ARTICLE Vill: ENVIRONMENTAL ATTRIBUTES
As of the date of this Agreement, Idaho Power has pending before the Commission a Petition for
a Declaratory Order, IPC Case number IPC-04-02.Idaho Power is seeking a Commission
ruling concerning whether the Environmental Attributes (i.e., renewable energy credits, green
tags, etc.) associated with a QF project are owned by the project or the utility at the time a utility
purchases electricity from a QF project. The final Order of the Commission in response to Idaho
Power s Petition will be applicable to this Agreement. The Seller reserves the right to cancel this
Agreement within 30 days after the date the Commission s final Order in IPC Case number IPC-
04-02 becomes final and non-appealable.The Seller s failure to provide cancellation
notification to Idaho Power within the above described time period will be deemed to be
acceptance by the Seller of the allocation of Environmental Attributes as included in the
Commissions final order.
ARTICLE IX: FACILITY AND INTERCONNECTION
Design of Facility - Seller will design, construct, install , own, operate and maintain the Facility
and any Seller-owned Interconnection Facilities so as to allow safe and reliable generation and
delivery of Net Energy and Optional Energy to the Point of Delivery for the full term of the
Agreement.
Interconnection Facilities - Except as specifically provided for in this Agreement, the required
Interconnection Facilities will be in accordance with Schedule 72, the Generation Interconnection
Process and Appendix B. The Seller is responsible for all costs associated with this equipment as
specified in Schedule 72 and the Generation Interconnection Process, including but not limited to
initial costs incurred by Idaho Power for equipment costs, installation costs and ongoing monthly
Idaho Power operations and maintenance expenses.
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10.1
11.1
ARTICLE X: DISCONNECTION EQUIPMENT
Except as specifically provided for in this Agreement, the required Disconnection Equipment will
be in accordance with Schedule 72, the Generation Interconnection Process and Appendix B.
The Seller is responsible for all costs associated with this equipment as specified in Schedule 72
and the Generation Interconnection Process, including but not limited to initial costs incurred by
Idaho Power for equipment costs, installation costs and Idaho Power ongoing monthly operations
and monthly maintenance expenses.
ARTICLE XI: METERING AND TELEMETRY
Metering and Telemetry - Idaho Power shall, for the account of Seller, provide, install, and
maintain Metering Equipment to be located at a mutually agreed upon location to record and
measure power flows to Idaho Power in accordance with Schedule 72, Generation
Interconnection Process and Appendix B of this Agreement. The Metering Equipment will be of
the type required to measure, record and report the Facility s energy production in a manner to
provide Idaho Power adequate energy measurement data to administer this Agreement and to
integrate this Facility s energy production into the Idaho Power electrical system. All Metering
Equipment and installation costs shall be borne by Seller, including costs incurred by Idaho
Power for inspecting and testing such equipment at reasonable intervals at Idaho Power s actual
cost of providing this Metering Equipment and services. The Metering Equipment shall be at the
location described in Appendix B of this Agreement. All meters used to determine the billing
hereunder shall be sealed and the seals shall be broken only by Idaho Power when the meters are
to be inspected, tested or adjusted.
11.2 Meter Inspection - Idaho Power shall inspect installations annually and test meters on the
applicable periodic test schedule relevant to the equipment installed as specified in Appendix B of
this Agreement. If requested by Seller, Idaho Power shall make a special inspection or test of a
meter and Seller shall pay the reasonable costs of such special inspection. Both Parties shall be
notified of the time when any inspection or test shall take place, and each Party may have
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11.3
12.1
representatives present at the test or inspection. If a meter is found to be inaccurate or defective,
it shall be adjusted, repaired or replaced, at Idaho Powers expense in order to provide accurate
metering. If a meter fails to register, or if the measurement made by a meter during a test varies
by more than two percent (2 %) from the measurement made by the standard meter used in the
test, adjustment (either upward or downward) to the payments Seller has received shall be made
to correct those payments affected by the inaccurate meter for the actual period during which
inaccurate measurements were made. If the actual period cannot be determined, corrections to
the payments will be based on the shorter of (1) a period equal to one-half the time from the date
of the last previous test of the meter to the date of the test which established the inaccuracy of the
meter; or (2) six (6) months.
Telemetry - Idaho Power will install, operate and maintain at Seller s expense metering,
communications and telemetry equipment which will be capable of providing Idaho Power with
continuous instantaneous telemetry of Seller s net electrical energy production to Idaho Power
Designated Dispatch Facility.
ARTICLE XU - RECORDS
Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate metering and related power production records, in a fonn and
content recommended by Idaho Power.
12.Inspection - Either Party, after reasonable notice to the other Party, shall have the right, during
normal business hours, to inspect and audit any or all metering and power production records
pertaining to the Seller s Facility.
ARTICLE Xlli - PROTECTION
13.1 Seller shall construct, operate and maintain the Facility and Seller-furnished Interconnection
Facilities in accordance with Schedule 72, the Generation Interconnection Process, Appendix B
of this Agreement, Prudent Electrical Practices, the National Electrical Code, the National
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14.
Electrical Safety Code and any other applicable local, state and federal codes.Seller
acknowledges receipt of the Generation Interconnection Process. If, in the reasonable opinion of
Idaho Power, Seller s operation of the Facility or Interconnection Facilities is unsafe or may
otherwise adversely affect Idaho Power s equipment, personnel or service to its customers, Idaho
Power may physically interrupt the flow of energy from the Facility as specified within Schedule
, the Generation Interconnection Process or take such other reasonable steps as Idaho Power
deems appropriate. Except in the case of an emergency, Idaho Power will attempt to notify Seller
of such interruption prior to its occurrence as provided in paragraph 14.8. Seller shall provide
and maintain adequate protective equipment sufficient to prevent damage to the Facility and
Seller-furnished Interconnection Facilities. In some cases, some of Seller s protective relays will
provide back-up protection for Idaho Power s facilities. In that event, Idaho Power will test such
relays annually and Seller will pay the actual cost of such annual testing.
ARTICLE XIV - OPERATIONS
Emergency Conditions - Seller agrees that, in the event of and during a period of a shortage of
power on Idaho Power s system as declared by Idaho Power in its reasonable discretion or in the
event that the wholesale market prices for energy delivered to Idaho Power are higher than the
energy prices specified in Article VII herein, Seller shall, at Idaho Power s request, within the
limits of reasonable safety requirements as determined by Seller, use its best efforts to provide the
requested energy, and shall, if necessary, delay any scheduled shutdown of the Facility, provided
such delay of scheduled shutdown will not damage Seller s facilities. All additional energy
delivered by the Seller to Idaho Power at the request of Idaho Power during the identified
Emergency Condition will be priced in accordance with paragraph 7.1. Additional energy will
only be the incremental increase in energy scheduled to Idaho Power that exceeds the previously
planned energy deliveries to Idaho Power for the time specified by Idaho Power.
14.2 Communications - Idaho Power and the Seller shall maintain appropriate operating
communications through Idaho Power s Designated Dispatch Facility in accordance with
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14.
Appendix A of this Agreement.
Energy Acceptance
14.3.1 Idaho Power shall be excused from accepting and paying for Net Energy and/or Optional
Energy produced by the Facility and delivered to the Point of Delivery if it is prevented
from doing so by an event of force majeure, or if Idaho Power determines that
curtailment, interruption or reduction of Net Energy and/or Optional Energy deliveries is
necessary because of line construction or maintenance requirements, emergencies,
electrical system operating conditions on its system or as otherwise required by Prudent
Electrical Practices. If, for reasons other than an event of force Majeure, Idaho Power
requires such a curtailment, interruption or reduction of Net Energy and/or Optional
Energy deliveries for a period that exceeds twenty (20) days beginning with the twenty-
first day of such interruption, curtailment or reduction, Seller will be deemed to be
delivering Net Energy and/or Optional Energy at a rate equivalent to the pro rata daily
average of the amounts specified for the applicable month in paragraph 6.2 and/or
paragraph 6.4. Idaho Power will notify Seller when the interruption, curtailment or
reduction is terminated.
14.2 If, in the reasonable opinion of Idaho Power, Seller s operation of the Facility or
Interconnection Facilities is unsafe or may otherwise adversely affect Idaho Power
equipment, personnel or service to its customers, Idaho Power may physically interrupt
the flow of Net Energy and/or Optional Energy from the Facility as specified within
Schedule 72, the Generation Interconnection Process, or this Agreement or take such
other reasonable steps as Idaho Power deems appropriate.
14.3.3 Under no circumstances will the Seller deliver to the Point of Delivery, Net Energy
and/or Optional Energy from the Facility in an amount that exceeds the Maximum
Capacity Amount. Seller s failure to limit deliveries to the Point of Delivery to the
Maximum Capacity Amount will be a Material Breach of this Agreement.
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14.4 Seller Declared Suspension of Energy Deliveries
14.4.1 If the Seller s Facility experiences a forced outage due to equipment failure not caused by
(1) an event of Force Majeure or by circumstances other then neglect, disrepair or a
foreseeable failure of the Seller s Facility or (2) lack of fuel or prime mover. Seller may,
after giving notice as provided in paragraph 14.4.2 below, temporarily suspend all
deliveries of Net Energy and/or Optional Energy to Idaho Power for a period of not less
than 72 hours to correct the forced outage condition. The Sellers Declared Suspension of
Energy Deliveries wiJI begin at the start of the next full hour following the Seller
telephone n06fication as specified in paragraph 14.4.2 and will continue for the time as
specified in the written notification provided by the Seller. In the month(s) in which the
Declared Suspension of Energy occurred, the Net Energy Amount and/or the Optional
Energy Amount will be adjusted as specified in paragraph 6.2 and 6.4.
14.4.2 If the Seller desires to declare a Suspension of Energy Deliveries as provided in
paragraph 14.4.1, the Seller wiJI notify the Designated Dispatch Facility by telephone.
The beginning hour of the Declared Suspension of Energy Deliveries will be at the
earliest the next full hour after making telephone contact with Idaho Power. The Seller
will, within 24 hours after the telephone contact, provide Idaho Power a written notice in
accordance with Article XXV Ill, that wiJI contain the beginning hour and duration of the
Declared Suspension of Energy Deliveries and a description of the conditions that caused
the Seller to Declare a Suspension of Energy Deliveries.
14.4 Voltage Levels - Seller, in accordance with Prudent Electrical Practices shall minimize voltage
fluctuations and maintain voltage levels acceptable to Idaho Power. Idaho Power may, in
accordance with Prudent Electrical Practices, upon one hundred eighty (180) days' notice to
Seller, change its nominal operating voltage level by more than ten percent (10%) at the Point of
Delivery, in which case Seller shall modify, at Idaho Power s expense, Seller s equipment as
necessary to accommodate the modified nominal operating voltage level.
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14.
14.
14.
14.
Generator Ramping - Idaho Power, in accordance with Prudent Electrical Practices, shaH have the
right to Jimit the rate that generation is changed at startup, during normal operation or foHowing
reconnection to Idaho Power s system. Generation ramping may be required to permit Idaho
Power s voltage regulation equipment time to respond to changes in power flow.
Scheduled Maintenance - On or before January 31 of each calendar year, SeHer shaH submit a
written proposed maintenance schedule for that calendar year and Idaho Power and SeHer shaH
mutuaHy agree as to the acceptability of the proposed schedule. The Parties determination as to
the acceptability of the SeHer s timetable for scheduled maintenance wi)) take into consideration
Prudent Electrical Practices, Idaho Power system requirements and the SeHer s preferred
schedule. Neither Party shaH unreasonably withhold acceptance of the proposed maintenance
schedule.
Maintenance Coordination - The Parties shaH, to the extent practical, coordinate their respective
line and FaciJity maintenance schedules such that they occur simultaneously.
Contact Prior to Curtailment - Idaho Power wiB make a reasonable attempt to contact SeHer prior
to exercising its rights to curtail, interrupt or reduce deJiveries from SeHer for any event that wiB
be in duration of 24 hours or longer.SeHer understands that in the case of emergency
circumstances, Idaho Power may not be able to provide notice to SeHer prior to interruption
curtailment, or reduction of electrical energy deJiveries to Idaho Power.
ARTICLE XV: INDEMNIFICATION AND INSURANCE
15.Indemnification - Each Party shaH agree to hold harmless and to indemnify the other Party, its
officers, agents, affiJiates, subsidiaries, parent company and employees against aH loss, damage
expense and liabiJity to third persons for injury to or death of person or injury to property,
proximately caused by the indemnifying Party s construction, ownership, operation or
maintenance of, or by failure of, any of such Party s works or facilities used in connection with
this Agreement. The indemnifying Party shaH, on the other Party s request, defend any suit
asserting a c1aim covered by this indemnity. The indemnifying Party shaH pay aH costs, including
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15.
15.
15.4
reasonable attorney fees that may be incurred by the other Party in enforcing this indemnity.
Insurance - During the term of this Agreement, Seller shaH secure and continuously carry the
following insurance coverage:
15.2.1 Comprehensive General Liability Insurance for both bodily injury and property damage
with limits equal to fifteen percent (15%) of the Total Cost of the Facility, or $1 000 000
whichever is greater, each occurrence, combined single limit. The deductible for such
Insurance shall not exceed one-half of one percent (0.5%) of the Total Cost of the
Facility.
15.2 The above insurance coverage shall be placed with an insurance company with an A.
Best Company rating of A- or better and shall include:
(a)An endorsement naming Idaho Power as an additional insured and loss payee as
applicable; and
(b)A provision stating that such policy shall not be canceled or the limits of liability
reduced without sixty (60) days' prior written notice to Idaho Power.
Seller to Provide Certificate of Insurance - As required in paragraph 4.1.4 herein and annually
thereafter, Seller shall furnish Idaho Power a certificate of insurance, together with the
endorsements required therein, evidencing the coverage as set forth above.
Seller to Notify Idaho Power of Loss of Coverage - If the insurance coverage required
paragraph 15.2 shall lapse for any reason , Seller will immediately notify Idaho Power in writing.
The notice will advise Idaho Power of the specific reason for the lapse and the steps Seller is
taking to reinstate the coverage. Failure to provide this notice and to expeditiously reinstate or
replace the coverage will constitute a Material Breach of this Agreement.
ARTICLE XVI. FORCE MAJEURE
16.As used in this Agreement
, "
force Majeure" or "an event of force Majeure" means any cause
beyond the control of the SeHer or of Idaho Power which, despite the exercise of due diligence
such Party is unable to prevent or overcome. Force Majeure includes, but is not limited to, acts of
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17.1
God, fire, flood, storms, wars, hostilities, civil strife, strikes and other labor disturbances,
earthquakes, fires, lightning, epidemics, sabotage, or changes in law or regulation occurring after
the Operation Date, which, by the exercise of reasonable foresight such party could not
reasonably have been expected to avoid and by the exercise of due diligence, it shall be unable to
overcome. If either Party is rendered wholly or in part unable to perform its obligations under
this Agreement because of an event of force Majeure, both Parties shall be excused from
whatever performance is affected by the event of force Majeure, provided that:
(1)The non-performing Party shall, as soon as is reasonably possible after the
occurrence of the force Majeure, give the other Party written notice describing
the particulars of the occurrence.
(2)The suspension of performance shall be of no greater scope and of no longer
duration than is required by the event of force majeure.
(3)No obligations of either Party which arose before the occurrence causing the
suspension of performance and which could and should have been fully
performed before such occurrence shall be excused as result of such
occurrence.
ARTICLE XVll: LAND RIGHTS
Seller to Provide Access - Seller hereby grants to Idaho Power for the term of this Agreement all
necessary rights-of-way and easements to install, operate, maintain, replace, and remove Idaho
Power s Metering Equipment, Interconnection Equipment, Disconnection Equipment, Protection
Equipment and other Special Facilities necessary or useful to this Agreement, including adequate
and continuing access rights on property of Seller. Seller warrants that it has procured sufficient
easements and rights-of-way from third parties so as to provide Idaho Power with the access
described above. All documents granting such easements or rights-of-way shall be subject to
Idaho Power s approval and in'recordable form.
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17.
17.
17.4
Use of Public Rights-of-Way - The Parties agree that it is necessary to avoid the adverse
environmental and operating impacts that would occur as a result of duplicate electric lines being
constructed in close proximity. Therefore, subject to Idaho Power s compliance with paragraph
17.4, Seller agrees that should Seller seek and receive from any local, state or federal
governmental body the right to erect, construct and maintain Seller-furnished Interconnection
Facilities upon, along and over any and all public roads, streets and highways, then the use by
Seller of such public right-of-way shall be subordinate to any future use by Idaho Power of such
public right-of-way for construction and/or maintenance of electric distribution and transmission
facilities and Idaho Power may claim use of such public right-of-way for such purposes at any
time. Except as required by paragraph 17.4, Idaho Power shall not be required to compensate
Seller for exercising its rights under this paragraph 17.
Joint Use of Facilities - Subject to Idaho Power s compliance with paragraph 17.4, Idaho Power
may use and attach its distribution and/or transmission facilities to Seller s Interconnection
Facilities, may reconstruct Seller s Interconnection Facilities to accommodate Idaho Power
usage or Idaho Power may construct its own distribution or transmission facilities along, over and
above any public right-of-way acquired from Seller pursuant to paragraph 17.2, attaching Seller
Interconnection Facilities to such newly constructed facilities. Except as required by paragraph
17.4, Idaho Power shall not be required to compensate Seller for exercising its rights under this
paragraph 17.3.
Conditions of Use - It is the intention of the Parties that the Seller be left in substantially the same
condition, both financially and electrically, as Seller existed prior to Idaho Power s exercising its
rights under this Article XVII. Therefore, the Parties agree that the exercise by Idaho Power of
any of the rights enumerated in paragraphs 17.2 and 17.3 shall: (1) comply with all applicable
laws, codes and Prudent Electrical Practices, (2) equitably share the costs of installing, owning
and operating jointly used facilities and rights-of-way. If the Parties are unable to agree on the
method of apportioning these costs, the dispute will be submitted to the Commission for
resolution and the decision of the Commission will be binding on the Parties, and (3) shall
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18.1
19.
20.1
provide Seller with an interconnection to Idaho Power s system of equal capacity and durability
as existed prior to Idaho Power exercising its rights under this Article XVll.
ARTICLE XVlli: LIABJLITY; DEDICATION
Nothing in this Agreement shall be construed to create any duty to, any standard of care with
reference to, or any liability to any person not a Party to this Agreement. No undertaking by one
Party to the other under any provision of this Agreement shall constitute the dedication of that
Party s system or any portion thereof to the other Party or to the public or affect the status of
Idaho Power as an independent public utility corporation or Seller as an independent individual or
entity.
ARTICLE XIX: SEVERAL OBLIGATIONS
Except where specifically stated in this Agreement to be otherwise, the duties, obligations and
liabilities of the Parties are intended to be several and not joint or collective. Nothing contained
in this Agreement shall ever be construed to create an association, trust, partnership or joint
venture or impose a trust or partnership duty, obligation or liability on or with regard to either
Party. Each Party shall be individually and severally liable for its own obligations under this
Agreement.
ARTICLE XX: WAIVER
Any waiver at any time by either Party of its rights with respect to a default under this Agreement
or with respect to any other matters arising in connection with this Agreement shall not be
deemed a waiver with respect to any subsequent default or other matter.
ARTICLE XXI: CHOICE OF LAWS AND VENUE
21.1 This Agreement shall be construed and interpreted in accordance with the laws of the State of
Idaho without reference to its choice of law provisions.
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21.2
22.
22.2
22.
Venue for any litigation arising out of or related to this Agreement will lie in the District Court of
the Fourth Judicial District of Idaho in and for the County of Ada.
ARTICLE XXll: DISPUTES AND DEFAULT
Disputes - All disputes related to or arising under this Agreement, including, but not limited to,
the interpretation of the terms and conditions of this Agreement, will be submitted to the
Commission for resolution.
Notice of Default -
22.
22.
Defaults.If either Party fails to perform any of the terms or conditions of this
Agreement (an "event of default"), the nondefaulting Party shall cause notice in
writing to be given to the defaulting Party, specifying the manner in which such
default occurred. If the defaulting Party shall fail to cure such default within the sixty
(60) days after service of such notice, or if the defaulting Party reasonably
demonstrates to the other Party that the default can be cured within a commercially
reasonable time but not within such sixty (60) day period and then fails to diligently
pursue such cure, then, the non defaulting Party may, at its option, terminate this
agreement and/or pursue its legal or equitable remedies.
Material Breaches - The notice and cure provisions in paragraph 22.1 do not apply
to defaults identified in this Agreement as Material Breaches. Material Breaches must
be cured as expeditiously as possible following occurrence of the breach.
Security for Performance - Prior to the Operation Date and thereafter for the full tenn of this
Agreement, Seller will provide Idaho Power with the following:
22.
22.
Insurance - Evidence of compliance with the provisions of paragraph 15.2. If Seller
fails to comply, such failure will be a Material Breach and may only be cured by
Seller supplying evidence that the required insurance coverage has been replaced or
reinstated;
Engineer s Certifications - Every three (3) years after the Operation Date, Seller will
- 24-
Final
2/9/2004
23.
23.
24.
supply Idaho Power with a Certification of Ongoing Operations and Maintenance (0
and M) from a Registered Professional Engineer licensed in the State of Idaho, which
Certification of Ongoing 0 & M shall be in the form specified in Appendix C. Seller
failure to supply the required certificate will be an event of default. Such a default
may only be cured by Seller providing the required certificate; and
22.Licenses and Permits - During the full term of this Agreement, Seller shall maintain
compliance with all permits. and licenses described in paragraph 4.1 of this
Agreement. In addition, Seller will supply Idaho Power with copies of any new or
additional permits or Hcenses. At least every fifth Contract Year, Seller will update the
documentation described in Paragraph 4.1. If at any time Seller fails to maintain
compliance with the permits and licenses described in paragraph 4.1.1 or to provide
the documentation required by this paragraph, such failure will be an event of default
and may only be cured by Seller submitting to Idaho Power evidence of compliance
from the pennitting agency.
ARTICLE xxm: GOVERNMENTAL AUTHORIZA nON
This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
Idaho Power may terminate this Agreement on sixty (60) days prior written notice if (1) existing
Idaho law is modified to allow persons or entities other than Idaho Power to sell electric capacity
or energy at retail in Idaho Power s exclusive service territory, and (2) such change in law results
in Idaho Power being unable to fully recover all costs associated with this Agreement.
ARTICLE XXIV: COMMISSION ORDER
This Agreement shall become finally effective upon the Commission s approval of all terms and
provisions hereof without change or condition and declaration that all payments to be made to
Seller hereunder shall be allowed as prudently incurred expenses for ratemaking purposes.
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25.1
26.
27.
28.
ARTICLE XXV: SUCCESSORS AND ASSIGNS
This Agreement and all of 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 assignment
hereof by either Party shall become effective without the written consent of both Parties being
first obtained. Such consent shall not be unreasonably withheld. Notwithstanding the foregoing,
any party which Idaho Power may consolidate, or into which it may merge, or to which it may
conveyor transfer substantially all of its electric utility assets, shall automatically, without further
act, and without need of consent or approval by the Seller, succeed to all of Idaho Power s rights
obligations and interests under this Agreement. This article shall not prevent a financing entity
with recorded or secured rights from exercising all rights and remedies available to it under law
or contract. Idaho Power shall have the right to be notified by the financing entity that it is
exercising such rights or remedies.
ARTICLE XXVI: MODIFICATION
No modification to this Agreement shall be valid unless it is in writing and signed by both Parties
and subsequently approved by the Commission.
ARTICLE XXVll: TAXES
Each Party shall pay before delinquency all taxes and other governmental charges, which if failed
to be paid when due could result in a lien upon the Facility or the Interconnection Facilities.
ARTICLE XXVill: NOTICES
All written notices under this agreement shall be directed as follows and shall be considered
delivered when deposited in the U. S. Mail, first-class postage prepaid, as follows:
To Seller:Renewable Energy of Idaho, Inc.
320 Mountview
Meridian, ill 83642
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29.
30.
31.1
32.
To Idaho Power:Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
ARTICLE XXIX: ADDITIONAL TERMS AND CONDITIONS
This Agreement includes the following appendices, which are attached hereto and included by
reference:
Appendix A
Appendix B
Appendix C
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer s Certifications
ARTICLE XXX: SEVERABILITY
The invalidity or unenforceability of any term or provision of this Agreement shall not affect the
validity or enforceability of any other terms or provisions and this Agreement shall be construed
in all other respects as if the invalid or unenforceable term or provision were omitted.
ARTICLE XXXI: COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
ARTICLE XXXII: ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement of the Parties concerning the subject matter
hereof and supersedes all prior or contemporaneous oral or written agreements between the
Parties concerning the subject matter hereof.
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IN WITNESS WHEREOF, The Par6es hereto have caused this Agreement to be executed
in their respective names on the dates set forth below:
Idaho Power Company
Dated
:~h~:9 ~
Dated
- 28-
Renewable Energy of Idaho. Inc.
Richard Vinson - President
2 ~ /11
--
tJj/
Seller
Final
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APPENDIX A
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
At the end of each month the fol1owing required documentation will be submitted to:
Idaho Power Company
Attn: Cogeneration and Small Power Production
POBox 70
Boise, Idaho 83707
The Meter readings required on this report will be the reading on the Idaho Power Meter
Equipment measuring the Facilities Net Energy and Optional Energy delivered to Idaho Power at the
Point of Delivery and/or any other required energy measurements to adequately administer this
Agreement.
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Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
Project Name
Month Year
Project Number:
Address
City
Meter Number:
End of Month kWh Meter Reading:
Beginning of Month kWh Meter:
Difference:
Times Meter Constant:
kWh for the Month:
Metered Demand:
Breaker Opening Record
Date Time Meter
Breaker Openinl! Reason Codes
Lack of Adequate Prime Mover
Forced Outage of Facility
Disturbance of IPCo System
Scheduled Maintenance
Testing of Protection Systems
Cause Unknown
Other (Explain)
State Zip
Facility
Output
Local
Service
Phone Number:
Auxiliary
Service
Net Generation
Breaker Closing Record
Date Time Meter
I hereby certify that the above meter readings are
true and correct as of Midnight on the last day of the
above month and that the switching record is accurate
and complete as required by the Energy Sales
Agreement to which I am a Party.
Signature
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ROUTINE REPORTING
Idaho Power Contact Information
Daily Energy Production Reporting
Call daily by 10 Am, 800-356-4328 or 800-635-1093 and leave the following
information:
Project Identification - Project Name and Project Number
Current Meter Reading
Estimated Generation for the current day
Estimated Generation for the next day
Planned and Unplanned Project outages
Call 800-345-1319 and leave the following information:
Project Identification - Project Name and Project Number
. Approximate time outage occurred
Estimated day and time of project coming back online
Seller s Contact Information
24 Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
Dennis Drake
208-888-9282
208-861-9830
Project On-site Contact information
Telephone Number: 208-861-9830
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APPENDIX B
FACll..ITY AND POINT OF DELIVERY
PROJECT NO. 11866070
EMMETT FACll..ITY
DESCRIPTION OF FACll..ITY
The Seller s Facility is described as:
A Biomass Facility, primarily using landfill waste consisting of celloustic fiber and other wood
waste products. The Facility will consist of one 190 000 Lbs/hour Babcock-Wilcox steam boiler,
providing steam to two GE turbines, the primary turbine being a 12.5 MW unit and the secondary
unit being a 7.5 Mw unit.
LOCATION OF FACll..ITY
The Facility is located at:
Emmett, Idaho, West Main and Plywood Road.
Parcel A, of Section 12, Township 6 North , Range 2 West and of Section 7, Township 6 North,
Range 1 West, Boise Meridian, Emmett, Gem County, Idaho
SCHEDULED OPERATION DATE
Seller has selected June 1 , 2005, as the Scheduled Operation Date and May 1 2005 as the First
Energy Date. In making these selections, Seller recognizes that to allow for an adequate testing
of the Facility s degree of completion and reliability, it must achieve its First Energy Date at least
thirty (30) days prior to the Operation Date. Idaho Power, based on the information supplied by
the Seller, will schedule its construction in accordance with Schedule 72 and the Generation
Interconnection Process.
B-4 POINT OF DELIVERY
Point of Delivery" means, unless otherwise agreed by both Parties, where Idaho Power s and the
Seller s electrical facilities are interconnected at the point where the Facility connects to the Idaho
Power 15 Kv air break switch (061L).
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LOSSES
If the Idaho Power Metering equipment is capable of measuring the exact energy deliveries by
the Seller at the Point of Delivery, no Losses will be calculated for this Facility. If the Idaho
Power Metering is unable to measure the exact energy deliveries by the Seller at the Point of
Delivery, a Losses calculation will be established to measure the energy losses (kWh) between
the Seller s Facility and the Point of Delivery. This loss calculation will be initially set at 2% of
the kWh energy production recorded on the Facility generation metering equipment. At such
time as Seller provides Idaho Power with the electrical equipment specifications (transformer
loss specifications, conductor sizes, etc) of all of the electrical equipment between the Facility
and the Point of Delivery Idaho Power will configure a revised loss calculation formula to be
agreed to by both parties and used to calculate the kWh Losses for the remaining term of the
Agreement. If at anytime during the term of this Agreement, Idaho Power determines that the
loss calculation does not correctly reflect the actual kWh losses attributed to the electrical
equipment between the Facility and the Point of Delivery, Idaho Power may adjust the
calculation and retroactively adjust the previous months kWh loss calculations.
METERIN G AND TELEMETRY
The Idaho Power Generation Interconnection process will determine the specific metering and
telemetry requirements for this Facility.At the minimum the Metering Equipment and
Telemetry equipment must be able to provide and record hourly energy deliveries to the Point of
Delivery and any other energy measurements required to administer this Agreement. These
specifications will include but not be limited to equipment specifications, equipment location
Idaho Power provided equipment, Seller provided equipment, and all costs associated with the
equipment, design and installation of the Idaho Power provided equipment.The entire
Generation Interconnection process, including but not limited to the equipment specifications
and requirements will become an integral part of this Agreement. Seller will arrange for and
make available at Seller s cost a telephone circuit(s) dedicated to Idaho Power s use terminating
at the Idaho Power facilities. Idaho Power provided equipment will be owned and maintained
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by Idaho Power, with total cost of purchase, installation , operation, and maintenance, including
administrative cost to be reimbursed to Idaho Power by the Seller. Payment of these costs will
be in accordance with Schedule 72 and the total metering cost will be included in the calculation
of the Monthly Operation and Maintenance Charges specified in Schedule 72.
SPECIAL FACILITIES
The Idaho Power Generation Interconnection process will determine the Special Facility
requirements for this Facility. These specifications will include but not be limited to equipment
specifications, equipment location, Idaho Power provided equipment, Seller provided
equipment, and all costs associated with the equipment, design and installation of the Idaho
Power provided equipment. The entire Generation Interconnection process, including but not
limited to the equipment specifications and requirements will become an integral part of this
Agreement. Idaho Power owned equipment will be maintained by Idaho Power, with total cost
of purchase, installation, operation, and maintenance, including administrative cost to
reimbursed to Idaho Power by the Seller. Payment of these costs will be in accordance with
Schedule 72 and the total Special Facility cost will be included in the calculation of the Monthly
Operation and Maintenance Charges specified in Schedule 72.
REACTIVE POWER
The Idaho Power Generation Interconnection process will determine the reactive power required
to be supplied by Idaho Power to the Seller, based upon information provided by the Seller. The
Generation Interconnection process will specify the equipment required on the Idaho Power
system to meet the Facility s reactive power requirements. These specifications will include but
not be limited to equipment specifications, equipment location, Idaho Power provided
equipment, Seller provided equipment, and all costs associated with the equipment, design and
installation of the Idaho Power provided equipment.The entire Generation Interconnection
process, including but not limited to the equipment specifications and requirements will become
an integral part of this Agreement. Idaho Power owned equipment will be maintained by Idaho
Power, with total cost of purchase, installation, operation, and maintenance, including
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adrrunistrative cost to be reimbursed to Idaho Power by the Seller. Payment of these costs will
be in accordance with Schedule 72 and the total reactive power cost will be included in the
calculation of the Monthly Operation and Maintenance Charges specified in Schedule 72.
DISCONNECTION EQUIPMENT
Disconnection Equipment is required to insure that the Seller s Facility will be disconnected
from Idaho Power s system in the event of (1) the Sellers delivery of energy exceeds the
Maximum Capacity Amount or (2) Idaho Power or the Seller require interruption or curtailment
of energy deliveries to Idaho Power or (3) a disturbance on either Idaho Power s system or the
Seller s Facility.The Idaho Power Generation Interconnection process will determine the
Disconnection Equipment specifications and requirements for this Facility, this equipment is for
protection of the Idaho Power system and equipment only. These specifications will include but
not be lirruted to equipment specifications, equipment location, Idaho Power provided
equipment, Seller provided equipment, and all costs associated with the equipment, design and
installation of the Idaho Power provided equipment.Seller will install all Seller provided
equipment, control wire and conduit necessary for the operation of the Disconnection
Equipment. Through the Generation Interconnection process, Idaho Power will supply details
for the disconnection panel and will test the equipment prior to any operations of the Facility,
Seller will provide drawings of their interconnection wiring for engineering approval prior to
installation. The entire Generation Interconnection process, including but not lirruted to the
equipment specifications and requirements will become an integral part ofthis Agreement. Idaho
Power owned equipment will be maintained by Idaho Power, with total cost of purchase
installation, operation, and maintenance, including adrrunistrative cost to be reimbursed to Idaho
Power by the Seller. Payment of these costs will be in accordance with Schedule 72 and the
total Disconnection Equipment cost will be included in the calculation of the Monthly Operation
and Maintenance Charges specified in Schedule 72.
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COSTS
The Idaho Power Generation Interconnection process and this Agreement will identify all cost
for this Facility to interconnect to the Idaho Power system, including but not limited to the cost
of Metering equipment, Telemetry equipment, Special Facilities, Reactive Power, Disconnection
equipment, Protection equipment and Interconnection Equipment.As specified in the
Generation Interconnection process and in accordance with Schedule 72 and this Agreement the
Seller will reimburse Idaho Power for all costs associated with this equipment. In addition to the
equipment, installation and construction charges as specified above, during the term of this
Agreement, Seller will pay Idaho Power the monthly operation and maintenance charge
specified in Schedule 72 or its successor schedules(s). The monthly operations and maintenance
charge will begin on the first day of the month following the date which Idaho Power has
completed installation of the Idaho Power provided equipment and the interconnection
equipment is available for use by the Facility. The interconnection of this Facility to Idaho
Power is going to make use of both existing interconnection equipment and new equipment.
The Generation Interconnection process will identify the specifics of this equipment. As there
will be multiple ages of equipment at this site, the monthly Schedule 72 Operations and
Maintenance amount will be based upon the installation date of the actual equipment. Initially,
this will result in two separate Operations and Maintenance calculations that will be added
together to equal the total monthly Operations and Maintenance amount to be paid to Idaho
Power. If in the future, upgrades, modifications or changes in the interconnection of this Facility
to Idaho Power occur. The upgrades, modifications and changes and the associated cost will be
evaluated and may result in adjustment of the monthly Operations and Maintenance amount.
Original Equipment Monthly Operations and Maintenance amount.
Installation date of the Original Equipment was 1985, therefore calendar year 2004 will be
the 19th year for use in the Schedule 72 table of Operations and Maintenance charges for
determining the Operations and Maintenance percentage from this table. Future years will
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be ca1culated on the bases of calendar year 2004 being year 19. Original installation cost of
this Original equipment was $387 313.97.If the Generation Interconnection process
identifies any of this Original Equipment that will be removed or not used by this Facility,
Idaho Power will determine the original installation cost of the specific equipment and
deduct it from the total cost of the Original Equipment. The adjusted Original Equipment
cost will then be multiplied by the appropriate year s percentage in accordance with
Schedule 72 and duplicated below.
Schedule 72 Schedule 72
Calendar Calendar
Year Year Rate Year Year Rate
2004 04%2015 69%
2005 09%2016 77%
2006 14%2017 85%
2007 19%2018 93%
2008 24%2019 02%
2009 30%2020 36 *11%
2010 36%2021 37 *11%
2011 1.42%2022 38 *11%
2012 1.48%2023 39 *11%
2013 55%2024 40 *11%
2014 62%2024 41 11%
*Note - Schedule 72 table only lists 35 years, for years 36 - 41 the rate has been set to be
the same as the 35th year.
New Equipment Monthly Operations and Maintenance amount.
As required and determined by the Generation Interconnection process, new, additional, and/or
replacement equipment may be required in order to interconnect this Facility to the Idaho Power
system. All costs and payments for this equipment will be reimbursed to Idaho Power by the
Seller in accordance with Schedule 72. The year, as required in the Schedule 72 table of
Monthly Operations and Maintenance Charges, will be the actual month and year that the new
additional , and/C?r replacement equipment is available for use by the Facility. The total installed
cost of this equipment as specified in the Generation Interconnection process will be multiplied
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by the appropriate Schedule 72 percentage to arrive at the monthly Operations and Maintenance
expense to be paid to Idaho Power for the New Equipment.
SALVAGE
No later than sixty (60) days after the termination or expiration of this Agreement, Idaho Power
will prepare and forward to Seller an estimate of the remaining value of Idaho Power furnished
New Equipment as specified in paragraph B-, that the Seller previously had fully reimbursed
Idaho Power as required under Schedule 72, the Generation Interconnection Process and/or
described in this Agreement, less the cost of removal and transfer to Idaho Power s nearest
warehouse. If Seller elects not to obtain ownership of the New Equipment which the Seller had
previously fully reimbursed Idaho Power, but instead wishes that Idaho Power reimburse the
Seller for said New Equipment the Seller may invoice Idaho Power for the net salvage value as
estimated by Idaho Power and Idaho Power shall pay such amount to Seller within thirty (30)
days after receipt of the invoice. Seller shall have the right to offset the invoice amount against
any present or future payments due Idaho Power.Upon termination or expiration of this
Agreement, Idaho Power shall retain ownership of the Original Equipment.
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APPENDIX C
ENGINEER'S CERTIFICATION
OPERA TIONS & MAINTENANCE POLICY
The undersigned behalf himself and
, hereinafter collectively refeITed to as "Engineer
hereby states and certifies to the Seller as follows:
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement " between
Idaho Power Buyer and Seller dated
That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No.and is hereinafter refeITed to as
the "Project.
That the Project,which commonly known the
Project, is located in Section , Township
Range , Boise Meridian,County, Idaho.
That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to Idaho Power for a twenty (20) year period.
That Engineer has substantial experience in the design, construction and operation of electric
power plants of the same type as this Project.
That Engineer has no economic relationship to the Design Engineer of this Project.
That Engineer has reviewed and/or supervised the review of the Policy for Operation and
Maintenance ("O&M") for this Project and it is his professional opinion that, provided said Project has
been designed and built to appropriate standards, adherence to said O&M Policy will result in the
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Project's producing at or near the design electrical output , efficiency and plant factor for a twenty (20)
year period.
That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement
is relying on Engineer s representations and opinions contained in this Statement.
10.That Engineer certifies that the above statements are complete, true and accurate to the best of his
knowledge and therefore sets his hand and seal below.
(P.E. Stamp)
Date
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APPENDIX C
EN GINEER' S CER TIFICA nON
ONGOING OPERA nONS AND MAINTENANCE
The undersigned , on behalf of himself and
hereinafter collectively referred to as "Engineer " hereby
states and certifies to the Seller as follows:
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between
Idaho Power Buyer and Seller dated
That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No.and hereinafter referred to as the
Project
" .
That the Project which commonly known
the
Project, is located at
That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to Idaho Power for a twenty (20) year period.
That Engineer has substantial experience in the design, construction and operation of electric
power plants of the same type as this Project.
That Engineer has no economic relationship to the Design Engineer of this Project.
That Engineer has made a physical inspection of said Project, its operations and maintenance
records since the last previous certified inspection. It is Engineer s professional opinion, based on the
Project's appearance , that its ongoing O&M has been substantially in accordance with said O&M Policy;
that it is in reasonably good operating condition; and that if adherence to said O&M Policy continues, the
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Project will continue producing at or near its design electrical output, efficiency and plant factor for the
remammg years of the Agreement.
That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement
is relying on Engineer s representations and opinions contained in this Statement.
10.That Engineer certifies that the above statements are complete, true and accurate to the best of his
knowledge and therefore sets his hand and seal below.
(P.E. Stamp)
Date
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