20040326Application.pdf

Conley E. Ward (ISB No. 1683)
GIVENS PURSLEY LLP
601 W. Bannock Street
O. Box 2720
Boise, ID 83701-2720
Telephone: [phone]
Fax: [phone]
cew(fYgivenspursley.com
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Attorneys for u.S. Geothermal, Inc.
S:\CLlENTS\6667\2\U.S. Geothermal ComplaintDOC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
u.S. GEOTHERMAL, INC., an Idaho
corporation Case No, /Pt-E'-tJL/-tJt
Complainant COMPLAINT
vs.
IDAHO POWER COMPANY, an Idaho
corporation
Respondent.
Complainant U.S. Geothermal, Inc. ("S. Geothermal"), through its attorneys, Givens
Pursley LLP , complains against Respondent Idaho Power Company ("Idaho Power ) and alleges
as follows:
INTRODUCTION AND SUMMARY
This Complaint is a formal complaint, filed in accordance with Rule 54 of the
IPUC Rules of Procedure, IDAPA 31.01.01.054.
PARTIES TO THE PROCEEDING
S. Geothermal is an Idaho corporation with its principal place of business
located in Boise, Idaho. u.s. Geothermal's representatives in this proceeding are:
COMPLAINT - 1 ORIG\NAL
Conley E. Ward
GIVENS PURSLEY LLP
601 W. Bannock Street
O. Box 2720
Boise, ID 83701-2720
Telephone: [phone]
Fax: [phone]
cew(fYgi venspursley. com
Daniel Kunz, President
S. Geothermal, Inc.
1509 Tyrell Lane, Ste. B
Boise, ID 83706
Telephone: [phone]
Fax: [phone]
dkunz(fYusgeothermal. com
Idaho Power is an electric utility with its principal place of business located in
Boise, Idaho.
COMMISSION JURISDICTION
Idaho Power is subject to the Idaho Public Utilities Commission
Commission ) jurisdiction pursuant to Title 61 , Idaho Code and 16 U.C ~ 824a-3. The
Commission has subject matter jurisdiction over this Complaint pursuant to Idaho Code ~ 61-612
and 16 u.S.C. ~ 824a-3(g)(2).
STATEMENT OF FACTS
S. Geothermal is the owner and developer of the Raft River Geothermal Power
Plant, an air-cooled, closed cycle geothermal electric generating plant to be constructed in Cassia
County, Idaho ("Raft River Facility ). The Raft River Facility is a "Qualifying Facility," as that
term is used and defined in 18 CFR ~ 292.207.
In early 2003 , u.S. Geothermal initiated discussions with Idaho Power with
regard to a proposed sale ofthe electric output of the Raft River Facility to Idaho Power. Idaho
Power is required by the Federal Public Utility Regulatory Policies Act of 1978 ("PURPA") to
COMPLAINT - 2
purchase the Raft River Facility's power pursuant to just, reasonable and nondiscriminatory rules
established by the Federal Energy Regulatory Commission and this Commission.
On October 24 2003 , U.S. Geothermal and Idaho Power began exchanging draft
contracts, and such exchanges continued through March 4 2004. On February 20, 2004, U.
Geothermal tendered the draft contract attached as Exhibit A to Idaho Power. (A "clean" copy
ofthe February 20th draft, with red lining omitted, is attached as Exhibit B.) On March 4, 2004
Idaho Power delivered to u.S. Geothermal the draft contract attached as Exhibit C. Subsequent
discussions on March 5 , 2004, between u.S. Geothermal's representative, Mr. Kip Runyan, and
Idaho Power s representative, Mr. Randy Allphin, revealed that further negotiations would be
fruitless because Idaho Power is insistent on three unreasonable and unjust provisions in the
proposed power purchase agreement.
CAUSES OF ACTION
Count One
Idaho Power s contract demands are unjust, unreasonable and contrary to law
because Idaho Power refuses to purchase an annual average of 10 megawatts of power from u.s.
Geothermal at the Commission approved non-levelized posted rates. Instead, Idaho Power
insists that it will only purchase a maximum of 10 megawatts in any given hour at the posted
rates. There is no basis in law or in fact for such a limitation.
Count Two
Idaho Power s contract demands are unjust, unreasonable and contrary to law
because Idaho Power insists on extreme financial penalties if U.S. Geothermal's total output in
any month falls below 90%, or above 110%, of its projected output. There is no basis in law of
fact for such penalties.
COMPLAINT - 3
Count Three
10.Idaho Power s contract demands are unjust, unreasonable and contrary to law
because Idaho Power insists that it must have the ability to terminate its contractual obligation to
purchase U.S. Geothermal's power if (1) Idaho law is modified to permit any other party to sell
electricity at retail in Idaho Power s service territory, and (2) such change in law results in Idaho
Power being unable to recover in its retail revenue requirement all costs attributable to the
agreement with u.S. Geothermal. There is no basis in law of fact for Idaho Power s position
and it would effectively nullify this Commission s rules by making it extremely costly, ifnot
impossible, to finance PURP A projects.
PRAYER FOR RELIEF
WHEREFORE, Complainant prays for a Commission order granting relief as follows:
Finding that Idaho Power s proposed contract is unjust, unreasonable and
unlawful; and
Directing Idaho Power to execute the contract with U.S. Geothermal attached
hereto as Exhibit B; and
3. Such further relief as the Commission deems just and proper.
RESPECTFULLY SUBMITTED This ~5'~a y of March 2004.
Co ey Wa
GIVENS P SLEY LLP
Attorneys for U.S. Geothermal, Inc.
COMPLAINT - 4
CERTIFICATE OF SERVICE
11--
I HEREBY CERTIFY that on this day of March 2004, I caused to be served a
true and correct copy of the foregoing document by the method indicated below and addressed to
the following:
Jean Jewell
Idaho Public Utilities Secretary
472 W. Washington Street
O. Box 83720
Boise, ID 83720-0074
--I- u.S. Mail
Hand Delivered
Overnight Mail
Facsimile
Barton L. Kline
Idaho Power Company
1221 W. Idaho Street
O. Box 70
Boise, ID 83707
----t S. Mail
Hand Delivered
Overnight Mail
Facsimile
W Ct--
COMPLAINT - 5
EXHIBIT A
Article
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
US GEOTHERMAL, INC
TABLE OF CONTENTS
TITLE
Definitions
No Reliance on Idaho Power
WaITanties
Conditions to Acceptance of Energy
Term, Early Termination and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment;
Adjustment of Purchase Price
Environmental Attributes
Facility and Interconnection
Transmission Agreement
Metering
Records
Protection
Operations
Indemnification and Insurance
Force Majeure
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
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Appendix B
Appendix C
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IPco- U SGeo - N on-l evel ized - PSA-(Rev3)
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FIRM ENERGY SALES AGREEMENT
THIS AGREEMENT, entered into on this day of between
US GEOTHERMAL, INC a Delawarean Idaho corporation (Seller), and IDAHO POWER
COMPANY, an 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
from 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 loss than 110% of the monthly 1'; et Energy :\l11ount as
specified in paragraph 6.2 of this :\grcement.
1.2 Commission" - The Idaho Public Utilities Commission.
1.3 Contract Year" - The period commencing each calendar year on the same calendar date as the
Operation Date and ending 364 days thereafter.
1.4 Designated Dispatch Facility" - Idaho Power s Control Area Operations Group, or any
subsequent group designated by Idaho Power.
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1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
Facility" - That electric generation facility described in Appendix B of this Agreement.
Interconnection Facilities - All facilities required to be installed to interconnect and deliver
energy from the Facility to the Transmitting Entity's system including, but not limited to
connection, switching, metering, relaying, communications and safety equipment.
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 ofthis Agreement.
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.
Material Breach" - A Default (paragraph 21.2.1) subject to paragraph 21.
Maximum Capacity Amounf' - The maximum capacity (MW) of the Facility to be used to
supply this contract will be -l-lb7 MW.
Metering Equipment"- All equipment specified in Schedule 72, this Agreement and any
additional equipment specified in Appendix B required to measure, record or telemeter power
provided by the Seller s Facility.
Net Energy" - The electric energy to be used to supply this contract produced by the Facility,
less Station Use and less Losses, expressed in kilowatt hours (KWh), which Seller and the
Transmitting Entity will deliver to Idaho Power at the Point of Delivery for the full term of the
Agreement. Net Energy deliveries to be used to supply this contract in any month will not exceed
000 kWh in a single Rour.the cOlTesponding Maximum Monthly Energy amounts specified in
paragraph 6.
Operation Date" - The day commencing at 000 I hours, Mountain Time, following the day that
all requirements of paragraph 5.3 have been completed.
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1.i4
1.15
1.16
1.17
1.18
Point of Delivery - The location specified in Appendix B, where the Transmitting Entity
delivers the Facility's Net Energy to Idaho Power.
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.
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 Em,'1gy " The difference between 90% of the monthly Net Energy ,mount for the
corresponding month specified ifl paragraph 6.2 ofthis Agreement and the same month's actual
Net Energy.
Station Use" - Electric energy that is used to operate equipment that is auxiliary or otherwise related to
1.19
1.23
1.24
the production of electricity by the facility.
1.22 Surplus Energy Net Energy delivered by the SeHer to Idaho Po'.ver and accepted by
Idaho Po'.ver during the month 'vhich exceeds 110% of the monthly Net Energy 1 mo'.lflt for the
corresponding month specified in paragraph 6.2 of this Agreement and all Net Energy v.hich is
delivered by the Seller to Idaho PO'.'er prior to the Operation Date.
Total Cost of the Facility" - The total cost of structures, equipment and appurtenances.
Transmitting Entity" - The signatory(s) (other than the Seller) to the Transmission Agreement
referred to in paragraph 10.1 and its successors and assigns.
ARTICLE II: 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 SeHer ofthe obligations set forth herein, SeHer has
investigated and determined that it is capable of performing hereunder and has not relied upon
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the advice, experience or expertise ofIdaho Power in connection with the transactions
contemplated by this Agreement.
2.2 Seller 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 shall 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 9292.207. After initial qualification, Seller will take such steps as
may be required to maintain the Facility's Qualifying Facility Status during the term of this
Agreement and Seller s failure to maintain Qualifying Facility Status will be a Material Breach of
this Agreement. Idaho Power reserves the right to review the Seller 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
Prior to the Operation Date and as a condition of Idaho Power s acceptance of deliveries of
energy from the Seller, Seller shall:
1.1 Submit proof to Idaho Power that all licenses, permits or approvals necessary for
Seller s 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
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IPco- U SGeo _Non-I evel ized _PSA -(Rev 3)
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1.3
1.4
1.5
1.7
admitted to practice and in good standing in the State ofIdaho providing an
opinion that Seller s licenses, permits and approvals as set forth in paragraph 4.
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 ofthe 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).
Engineer s Certifications - Submit an executed Engineer s Certification of Design &
Construction Adequacy and an Engineer s Certification of Operations and Maintenance
(110&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.
Insurance - Submit written proof to Idaho Power of all insurance required in Article
xv.
Transmission Agreement - Provide Idaho Power with a copy of the Transmission
Agreement executed by the Seller and the Transmitting Entity in a form acceptable to
Idaho Power. Idaho Power s acceptance will not be unreasonably withheld.
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.
Idaho Power Electrical System Study - Seller and Transmitting Entity will request, in
writing, a specific Point of Delivery where the Facilities generation will be delivered to
tlre--Idaho Power. Upon receipt of this request, at Seller s expense, Idaho Power will
complete an electrical system study to determine Idaho Power s ability to receive the
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Maximum Capacity Amount at the requested Point of Delivery. This study will include
a study of the Idaho Power electrical system at this Point of Delivery and estimation of
costs as specified in Appendix B.
1.7.1 If said study results in Idaho Power being unable to receive the Maximum
Capacity Amount at the requested Point of Delivery, the Seller and
Transmitting Entity may request a different Point of Delivery or revise the
Maximum Capacity Amount and a similar study, at the Seller s expense, will
be conducted.
1.7.In the event the Seller and Transmitting Entity request to deliver the
Maximum 'Capacity Amount at a Point of Delivery that Idaho Power has
identified as being unable to receive the Maximum Capacity Amount, at
Seller s request and expense, Idaho Power will conduct a study to determine
the necessary upgrades and/or modifications required to enable receipt of the
Maximum Capacity Amount at the requested Point of Delivery.
1.7.3 Seller will be responsible for all reasonable expenses associated with all
Idaho Power studies, upgrades and/or modifications required to enable
delivery of the Maximum Capacity Amount at the requested Point of
Delivery. An initial deposit will be calculated based upon the estimated cost
of each individual study, upgrade or modification and will be required to be
paid by the Seller prior to Idaho Power conducting any work associated with
the Seller s request. Upon completion of any and all studies, upgrades and/or
modifications required to accommodate the Seller s request, Idaho Power
will reconcile the actual expenses with the previously paid deposit and the
appropriate refund or additional billing will be processed.
ARTICLE V: TERM AND OPERATION DATE
Term - Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective
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on the date first written, and shall continue in full force and effect for a period of twenty (20)
Contract Yeats from the Operation Date.
Operation Date - The Operation Date may occur only after the Facility has achieved all of the
following:
a) Completed all Conditions to Acceptance of Energy as specified in Article IV.
b) Commission approval of this Agreement 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.
5.3 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 up to an average of 000 kWh per hour
of Net Energy delivered by the Transmitting Entity to the Point of Delivery.Under this
/\greemcntExcept upon mutual agreement, Idaho Power is onlyshall not be obligated to purchase Net
energy frol11Energy in anv month that exceeds the &elrer-Maximum Monthly Energy amounts specified in
paragraph 6.2.
Net Energy and Net Energy \viII not exceed 10 000 k '.Vh per hour.
Net Energy Maximum Monthly Energy Amounts - Seller intends to deliver Net Energy in the
following monthly amounts Seller agrees that the maximum Net Energy delivered in any month to
supply this contract will not exceed the following Maximum Monthly Energy Amounts
Month Kwh
Season 1 I::xxxxxx
JODOoeX
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2.1
I Miiy XX)ODOC
Jiffie XKX).XX
July XX)OG,X
Season 2 November XKXXKX
December XXKKXX
August XXKKXX
September xxxxxx
Season 3 October )OOODlX
January xxxxxx
February xxxxxx
Net Enerey Maximum
Monthly
Enerey
Month Kwh Kwh
March 649.000 051,500
Season 1 April 097,000 7,470,500
May 718,000 071,500
June 951,000 264,500
July 510,000 800,500
Season 2 November 587,000 986,500
December 166,000 595,500
August 677,000 975,500
September 235.000 563,500
Season 3 October 219,000 598,500
January 166,000 595,500
February 303,000 687 500
Seller s Adjustment of Net Energy Amount - By written notice given to Idaho Power in
accordance with paragraph 27., 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 will be deemed to be an election of no change.
Designated Dates
Prior to the Operation Date
Last day of the 6th month after the Operation Date
Last day of the 12th month after the Operation Date
Last day of the 3ffi, 5th, 7'
*,-
!-1-111 ~tI-I ~t!I ,--l-+t!I and 19111 Contract Year
Last day of any subsequent month, as long as only one revision occurs in
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any two consecutive year period.
6.3 Seller s failure to deliver Net Energy in any Contract Year in an amount equal to at least ten
percent (10%) of the Annual Net Energy amount shall constitute an event of default.
ARTICLE VII: PURCHASE PRICE AND METHOD OF PAYMENT;
ADJUSTMENT OF PURCHASE PRICE
7.1 BaseNet Energy Purchase Price - For all BaseNet Energy which is delivered by the Seller to
Idaho Power prior to the Operation Date. Idaho Power will pay the Seller the Market Energy
Cost. For all other Net Energy, Idaho Power will pay the non-levelized energy price in
accordance with Commission Order 29391 with seasonalization factors applied:
Season I - (73.50 %)Season 2 - (120.00 %)Season 3 - (100.00 %)
Year Mills/K wh Mills/K wh Mills/K wh
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.
S~lrplus Energy Price For all Surplus Energy Idaho Power shall pay to the Seller the current
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7.3
month's Market Energy Cost or the Base Energy Purchase Price specified in paragraph 7.
whichever is h,ver.
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 actually
delivered to Idaho Power as specified in Appendix A.
Shortfall Energy Price For all Shortfall Energy, if the Market Energy Cost for the month in
t'lhich the Shortfall Energy occurs is less then the Base Eflergy Purchase Price for the same
month, the Shortfall Energy Price will be O. lithe Market Energy Cost for the month in which
the Shortfall Energy occurs is greater then the Base Energy Purchase Price for the same month
tho Shortfall Energy Price will be the current month's Market Energy Cost less the Base Energy
Purchase Price.
7.1 Shortfall Enerl0-: 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. lfthe current month's energy payment is less than the
Shortfall Energy Payment, the Seller will make payment to Idaho Pmyer of the unpaid balance
\vithin 15 days of being notified of the outstanding balance.
Payment D'1C Date Energy payments to the Seller '/iIl be disbursed within 30 days of tho date
.vhich Idaho Power receives and accepts the documentation of the monthly Not Energy actually
delivered to Idaho Power as specified in liPpendix
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 9292.303-308.
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8.1
9.2
ARTICLE VIII: ENVIRONMENTAL ATTRIBUTES
The Parties have not agreed on the ownership of the Environmental Attributes. The Parties have
agreed to present this issue to the Commission for resolution. If the Commission accepts Idaho
Power's position that its customers own the Environmental Attributes, the following language
would be included in the Agreement and Seller reserves the right to cancel this Agreement.
Idaho Power retains all rights and will own any and all beneficial fuel, emission or other
environmental attributes currently or in the future attributable to the Net Energy delivered
from this Facility~ during the term of this Agreement.These attributes will include but
are not limited to Green Credits, Green Tags, Renewable Energy Credits (REC) and
Emission Credits.
If the Commission accepts the Seller s position that the Seller owns any Environmental
Attributes, the Agreement will contain the following language:
The Seller retains all rights and will own any and all beneficial fuel, emission or other
environmental attributes currently or in the future attributable to this Facility. These
attributes will include but are not limited to Green Credits, Green Tags, Renewable
Energy Credits (REC) and Emission Credits.
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 electric energy to the Transmitting Entity for the full term of the Agreement.
Interconnection Facilities - Seller will construct, install, own and maintain all Interconnection
Facilities other than those owned, installed or maintained by the Transmitting Entity. Seller will
pay all costs of interconnecting with the Transmitting Entity and transmitting Net Energy to
Idaho Power.
ARTICLE X: TRANSMISSION AGREEMENT
10.Transmission Agreement - The Seller will arrange and pay for the delivery of Net Energy over
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10.
10.
11.1
11.2
the facilities of the Transmitting Entities (the Bonneville Power Administration ("BPA") and the
Raft River Rural Electric Cooperative ("Raft River )) to the Point of Delivery. The delivery of
Net Energy from the Facility to the Idaho Power Point of Delivery shall be in accordance with
the terms and conditions of a Transmission Agreement between the Seller and the Transmitting
Entities.
Acceptance of Transmission Agreement - This Agreement is expressly conditioned and
contingent upon Idaho Power s acceptance of the Transmission Agreement. Such acceptance
will not be unreasonably withheld. Idaho Power will be identified within the Transmission
Agreement as an intended third t*lftQill1y beneficiary of the Transmission Agreement and a
material default by Seller under the Transmission Agreement will be a default under this
Agreement.
Losses - Idaho Power will only purchase the Net Energy that is delivered by the Transmitting
Entity to Idaho Power at the Point of Delivery. Losses will be calculated as provided in
Appendix B ofthis Agreement.
ARTICLE XI: METERING
Metering and Telemetry - Idaho Power shall, for the account of Seller, provide, install, and
maintain Metering Equipment as required to determine the amount of Net Energy delivered to
Idaho Power at the Point of Delivery. The metering will be installed at the locations as specified
in Appendix B of this Agreement. If required by Idaho Power, metering will also include
measurement of kilovar-hours in a manner agreed to by both Parties. All reasonable Metering I
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. 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.
Meter Inspection - Idaho Power shall inspect and test all meters upon their installation and at least
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once every four (4) years thereafter. 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 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 Power s 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.
11.3 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 the Facility's generation and Net Energy amounts
delivered, to Idaho Power s Designated Dispatch Facility.
ARTICLE XII - RECORDS
12.Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate total generation and Net Energy records in a form 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 total generation and Net Energy delivery
records pertaining to the Seller s Facility.
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ARTICLE XIII- PROTECTION
13.1 Seller will construct, operate and maintain the Facility and Seller-furnished Interconnection
Facilities in accordance with Prudent Electrical Practices, the National Electric Safety Code and
any other applicable local, state and federal codes.
ARTICLE XIV - OPERATIONS
14.Communications - Idaho Power, the Transmitting Entity and the Seller shall maintain appropriate
operating communications through Idaho Power s Designated Dispatch Facility in accordance
with Appendix A of this Agreement.
14.Energy Acceptance
14.2.1 Idaho Power shall be excused from accepting and paying for Net Energy produced by the
Facility and delivered by the Transmitting Entity 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 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-:-
provided that during: such curtailment, intelTuption or reduction, Idaho Power shall
cooperate with the Seller and the Transmitting Entity in rescheduling Net Energy
deliveries to an alternative point of delivery if reasonably possible., for reasons other
than an event of force Majeure, Idaho Power requires such a curtailment, interruption or
reduction of Net 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 at a rate equivalent to the pro rata daily average of
the amounts specified for the applicable month in paragraph 6.2. Idaho Power will notify
Seller when the interruption, curtailment or reduction is terminated.
14.2 Under no circumstances will the Seller permit the Transmitting Entity to deliver energy
from the Facility in an amount that exceeds the Maximum Capacity Amount-:- unless such
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energy is delivered pursuant to a separate transmission agreement.Seller s failure to
limit deliveries by the Transmitting Entity pursuant to this contract to the Maximum
Capacity Amount will be a Material Breach ofthis Agreement.
14.3 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.
14.4 Generator Ramping - Idaho Power, in accordance with Prudent Electrical Practices, shall have the
right to limit the rate that generation is changed at startup, during normal operation or following
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.
14.Scheduled Maintenance - On or before January 31 of each calendar year, Seller shall submit a
written proposed maintenance schedule for that calendar year and Idaho Power and Seller shall
mutually agree as to the acceptability of the proposed schedule. The Parties determination as to
the acceptability of the Seller s timetable for scheduled maintenance will take into consideration
Prudent Electrical Practices, Idaho Power system requirements and the Seller s preferred
schedule. Neither Party shall unreasonably withhold acceptance of the proposed maintenance
schedule.
ARTICLE XV: INDEMNIFICATION AND INSURANCE
15.Indemnification - Each Party shall agrccagrees to hold harmless and to indemnify the other Party,
its officers, agents, affiliates, subsidiaries, parent company and employees against all loss
damage, expense and liability 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
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maintenance of, or by failure of, any of such Party's works or facilities used in connection with
this Agreement. The indemnifying Party shall, on the other Party's request, defend any suit
asserting a claim covered by this indemnity. The indemnifying Party shall pay all costs, including
reasonable attorney fees that may be incurred by the other Party in enforcing this indemnity.
15.Insurance - During the term of this Agreement, Seller shall secure and continuously carry the
following insurance coverage:
15.1 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.
15.2.2 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.
15.3 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.
15.4 Seller to Provide Copies ofPolicv ofInsurance - Within one hundred twenty (120) days after the
Operation Date, and within ninety (90) days of the effective date of any modifications to the
policy, Seller will furnish to Idaho Power a certified copy of the original of the insurance policy
and an endorsements for the insurance coverage described above. In the case of policy renewals
Seller may provide a certificate ITom the insurance carrier that there have been no changes to the
policy in lieu of providing the required certified copy of the policy.
15.5 Seller to Notify Idaho Power of Loss of Coverage - If the insurance coverage required by
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16.
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
As used in this Agreement, "force Majeure" or "an event of force Majeure" means any cause
beyond the control of the Seller 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 God, fire, flood, storms, wars, hostilities, civil strife, strikes and other labor disturbances
earthquakes, fires, lightning, epidemics, sabotage, or changes in law or regulation, 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.
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17.1
18.1
19.
20.
20.
ARTICLE XVII: LIABILITY: 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 XVIII: 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 XIX: 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 XX: CHOICE OF LAWS AND VENUE
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.
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.
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ARTICLE XXI: DISPUTES AND DEFAULT
21.1 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.
21.2 Notice of Default -
21.2.1 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.
21.Material Breaches - The notice and cure provisions in paragraph 21.2.1 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.
21.3 Security for Performance - Prior to the Operation Date and thereafter for the full term of this
Agreement, Seller will provide Idaho Power with the following:
21.3.Insurance - Evidence of compliance with the provisions of paragraph 14.2. 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;
21.3.Engineer s Certifications - Every three (3) years after the Operation Date, Seller will
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
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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
21.3.3 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 licenses. 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 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 permitting agency.
ARTICLE XXII: GOVERNMENTAL AUTHORIZATION
22.This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
Idaho Power may terminate this .'\.greement on sixty (60) days prior \vritten notice if (1) existing
Idaho law is modified to allmv persons or entities other than Idaho Pov/er to sell electric capacity
or energy at retail in Idaho Po'ver s mwlusivc service territory, and (2) such change in law results
in Idaho Pmver being unable to fully recover in its retail revenue requirement all costs attributed
to this Agreement.
ARTICLE XXIII: COMMISSION ORDER
23.This Agreement shall become finally effective upon the Commission s approval of all terms and
provisions hereof without material change or condition fH'Hitogether with declaration that all
payments te-beproperly made to Seller hereunder shall be allowed as prudently incurred expenses
for ratemaking purposes.
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24.
25.
26.1
27.
ARTICLE XXIV: 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 with 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 ofIdaho Power
rights and interests under this Agreement. This article shall not prevent be violated by a financing
entity with recorded or secured rights fF.em-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 XXV: 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 XXVI: 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 XXVII: 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:US Geothermal Inc.
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Attn: Daniel Kunz
1509 Tyrell Lane, Suite B
Boise, Idaho 83706
To Idaho Power:Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
ARTICLE XXVIII: ADDITIONAL TERMS AND CONDITIONS
28.1 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
AR TI CLE XXIX: SEVERABILITY
29.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 XXX: COUNTERPARTS
30.1 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 XXXI: ENTIRE AGREEMENT
31.1 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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IPco- USGeo _N on-levelized - PSA-(Rev3)
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Dated
IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be
executed in their respective names on the dates set forth below:
Idaho Power Company US Geothermal Inc.
Daniel Kunz - PresidentJohn Prescott - Vice President, Power Supply
Dated
SellerIdaho Power
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APPENDIX A
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
At the end of each month the following 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 energy production at the Idaho Power metering point.~ All quantities
of Net Energy purchased hereunder shan be adjusted to account for electrical losses, if any, between the
point of metering and the Point of Delivery, so that the purchased amount reflects the net amount of
energy flowing into Idaho Power s system at the Point of Delivery.
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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 Openin2 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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IPco- USGeo _Non-level ized _PSA-(Rev3)
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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:
Project On-site Contact information
Telephone Number:
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APPENDIX B
FACILITY AND POINT OF DELIVERY
PROJECT NO.
DESCRIPTION OF FACILITY
The Seller s Facility is described as:
The Raft River Geothermal Power Plant, Unit #1 (RRGPP-l) is an air-cooled 1 MW facility
using geothermal water in a closed-loop rankine cycle.
LOCATION OF FACILITY
The Facility is located at:
Sections 23 (Township 15 South, Range 26 East), Cassia County, Idaho.
SCHEDULED OPERATION DATE
Seller has selected as the Scheduled May 15, 2006
Operation Date.
POINT OF DELIVERY
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Point of Delivery" means, unless otherwise agreed by both Parties, the point of interconnection
between Idaho Power and the Transmitting Entity will be the
Minidoka dam substation. The Transmitting entity will be the Bonneville Power Administration
- Transmission Business Line.
LOSSES
The calculated energy losses measured in kwh occurring between the 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 Facilitypoint of metering and the Point of
Delivery" Idaho Power will configure a reasonable revised loss calculation formula to be used to
calculate the Kwh Losses for the remaining term of the Agreement. If at anytime during the
term of this Agreement Idaho PO'.ver either party determines that the loss calculation does not
correctly reflect the actual Kwh losses attributed to the electrical equipment between the
Facilitypoint of metering and the Point of Delivery, Idaho Power either party may request that
Idaho Power recalculate the losses. Following agreement on such recalculation, Idaho Power
shall adjust the calculation and retroactively adjust the previous months Kwh loss calculations.
B~Q METERING AND TELEMETRY
The Metering Equipment will measure the energy production at the Facility, Station Use, and any
other energy diversions between the Facility Metering and the Point of Delivery or any other
agreed upon method to accurately determine the energy produced by the Seller s facility and
delivered to the Point of DeliveredDelivery by the Transmitting Entity. These meters will be
located at the Bridge Substation on the 138kV Minidoka to
West Wendover transmission line.
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IPco- U SGeo _Non-level ized - PSA-(Rev3)
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Idaho Power provided metering equipment will consist of:
Seller provided Metering Equipment will consist of:
Seller will arrange for and make available at Seller s cost, a telephone circuit dedicated to Idaho
Power s use terminating in an RJ-ll receptacle to be used for load profiling and another
telephone circuit dedicated to Idaho Power s communication equipment for continuous
telemetering of the Facility's kilowatt delivery to the Point of Delivery to Idaho Power
Designated Dispatch Facility. The meters will register kilowatt-hours and kilowatts of demand.
Idaho Power provided meter and communication equipment will be owned and maintained by
Idaho Power with total cost of purchase, installation, operation and maintenance including
engineering and administrative cost to be reimbursed to Idaho Power by the Seller.
B-6---1 REACTIVE POWER
Total reactive power required to be supplied by Idaho Power to the Seller is -zero
(0)KV AR, based on information provided by the Seller. Idaho Power will install and
maintain facilities on its system so as to meet this requirement with total cost of installation to be
reimbursed to Idaho Power by the Seller.
B+--~ COSTS
The cost of the Metering Equipment is $. The cost of reactive power supplied is
. This total cost has been paid to Idaho Power Company in accordance with
Schedule 72. In addition to the installation and construction charges above, during the term of
this Agreement, Seller will pay Idaho Power the monthly operation and maintenance charge
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specified in Schedule 72 or its successor schedules(s). The monthly operations and maintenance
charge will begin on the first day ofthe month following completion ofthe installation of the
Idaho Power provided equipment. The monthly operations and maintenance charge will be based
upon the initial cost paid by the Seller in accordance with Schedule 72. Upon reconciliation of
the actual costs, in accordance with Schedule 72 the monthly operations and maintenance charge
will be adjusted to reflect the actual cost incurred by Idaho Power and the previously charged
monthly operation and maintenance expense will be revised to reflect the actual cost incurred by
Idaho Power. Idaho Power will refund or Seller will remit any underpayment of the adjusted
monthly operations and maintenance charge within sixty (60) days of the determination ofthis
amount. In addition, there will be a monthly charge for the communication circuit lease cost
associated with the telemetry equipment. The estimated communication circuit lease is
per month as of the date of this Agreement. Seller recognizes that the monthly
communications circuit charge may be adjusted by Idaho Power as the cost to Idaho Power is
adjusted by the owner of the communication circuit(s).
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APPENDIX C
ENGINEER'S CERTIFICATION
OPERATIONS & MAINTENANCE POLICY
The undersigned behalf 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 Geothermal Inc.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
referred 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 5.3 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
ENGINEER'S CERTIFICATION
ONGOING OPERATIONS 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 Geothermal Inc 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
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O&M Policy; that it is in reasonably good operating condition; and that if adherence to said O&M Policy
continues, the Project will continue producing at or near its design electrical output, efficiency and plant
factor for the remaining years of the Agreement.
That Engineer recognizes that Idaho Power, in accordance with paragraph 18.3.2 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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EXHIBIT B
Article
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
US GEOTHERMAL, INC
TABLE OF CONTENTS
TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Term, Early Termination and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment;
Adjustment of Purchase Price
Environmental Attributes
Facility and Interconnection
Transmission Agreement
Metering
Records
Protection
Operations
Indemnification and Insurance
Force Majeure
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
IPco- USGeo - Non-Ievelized _PSA-(Rev3-noredline)( I
3/23/2004
Appendix B
Appendix C
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FIRM ENERGY SALES AGREEMENT
THIS AGREEMENT, entered into on this day of between
US GEOTHERMAL, INC an Idaho corporation (Seller), and IDAHO POWER COMPANY, an
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
from 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 Commission" - The Idaho Public Utilities Commission.
1.3 Contract Year" - The period commencing each calendar year on the same calendar date as the
Operation Date and ending 364 days thereafter.
1.4 Designated Dispatch Facility" - Idaho Power s Control Area Operations Group, or any
subsequent group designated by Idaho Power.
1.5 Facility" - That electric generation facility described in Appendix B of this Agreement.
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1.6
1.7
1.8
1.9
1.10
1.11
1.12
Interconnection Facilities - All facilities required to be installed to interconnect and deliver
energy from the Facility to the Transmitting Entity's system including, but not limited to
connection, switching, metering, relaying, communications and safety equipment.
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 ofthis Agreement.
Market Energy Cost" - eighty-five percent (85%) ofthe 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.
Material Breach"- A Default (paragraph 21.1) subject to paragraph 21.2.
Maximum Capacity Amounf' - The maximum capacity (MW) of the Facility to be used to
supply this contract will be 12.7 MW.
Metering Equipment"- All equipment specified in Schedule 72, this Agreement and any
additional equipment specified in Appendix B required to measure, record or telemeter power
provided by the Seller s Facility.
Net Energy - The electric energy to be used to supply this contract produced by the Facility,
less Station Use and less Losses, expressed in kilowatt hours (KWh), which Seller and the
Transmitting Entity will deliver to Idaho Power at the Point of Delivery for the full term of the
Agreement. Net Energy deliveries to be used to supply this contract in any month will not exceed
the corresponding Maximum Monthly Energy amounts specified in paragraph 6.
1.13 Operation Date" - The day commencing at 0001 hours, Mountain Time, following the day that
all requirements of paragraph 5.3 have been completed.
1.14 Point of Delivery - The location specified in Appendix B, where the Transmitting Entity
delivers the Facility's Net Energy to Idaho Power.
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1.15
1.16
1.17
1.18
1.19
1.23
1.24
2.2
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.
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.
Station Use" - Electric energy that is used to operate equipment that is auxiliary or otherwise
related to the production of electricity by the facility.
Total Cost of the Facility" - The total cost of structures, equipment and appurtenances.
Transmitting Entity" - The signatory(s) (other than the Seller) to the Transmission Agreement
referred to in paragraph 10.1 and its successors and assigns.
ARTICLE II: 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.
Seller 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 shall not be an endorsement or a confirmation by Idaho
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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.
3.2 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, Seller will take such steps as
may be required to maintain the Facility's Qualifying Facility Status during the term of this
Agreement and Seller s failure to maintain Qualifying Facility Status will be a Material Breach of
this Agreement. Idaho Power reserves the right to review the Seller 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
Prior to the Operation Date and as a condition ofIdaho Power s acceptance of deliveries of
energy from the Seller, Seller shall:
1.1 Submit proof to Idaho Power that all licenses, permits or approvals necessary for
Seller s 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 Seller s licenses, permits and approvals as set forth in paragraph 4.1.1
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
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1.3
1.4
1.5
1.6
1.7
of the American Bar Association Section of Business Law (1991).
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.
Insurance - Submit written proof to Idaho Power of all insurance required in Article
xv.
Transmission Agreement - Provide Idaho Power with a copy of the Transmission
Agreement executed by the Seller and the Transmitting Entity in a form acceptable to
Idaho Power. Idaho Power s acceptance will not be unreasonably withheld.
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.
Idaho Power Electrical System Study - Seller and Transmitting Entity will request, in
writing, a specific Point of Delivery where the Facilities generation will be delivered to
Idaho Power. Upon receipt of this request, at Seller s expense, Idaho Power will
complete an electrical system study to determine Idaho Power s ability to receive the
Maximum Capacity Amount at the requested Point of Delivery. This study will include
a study of the Idaho Power electrical system at this Point of Delivery and estimation of
costs as specified in Appendix B.
1.7.If said study results in Idaho Power being unable to receive the Maximum
Capacity Amount at the requested Point of Delivery, the Seller and
Transmitting Entity may request a different Point of Delivery or revise the
Maximum Capacity Amount and a similar study, at the Seller s expense, will
be conducted.
1.7.2 In the event the Seller and Transmitting Entity request to deliver the
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5.1
Maximum Capacity Amount at a Point of Delivery that Idaho Power has
identified as being unable to receive the Maximum Capacity Amount, at
Seller s request and expense, Idaho Power will conduct a study to determine
the necessary upgrades and/or modifications required to enable receipt of the
Maximum Capacity Amount at the requested Point of Delivery.
1.7.Seller will be responsible for all reasonable expenses associated with all
Idaho Power studies, upgrades and/or modifications required to enable
delivery of the Maximum Capacity Amount at the requested Point of
Delivery. An initial deposit will be calculated based upon the estimated cost
of each individual study, upgrade or modification and will be required to be
paid by the Seller prior to Idaho Power conducting any work associated with
the Seller s request. Upon completion of any and all studies, upgrades and/or
modifications required to accommodate the Seller s request, Idaho Power
will reconcile the actual expenses with the previously paid deposit and the
appropriate refund or additional billing will be processed.
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.
Operation Date - The Operation Date may occur only after the Facility has achieved all of the
following:
a) Completed all Conditions to Acceptance of Energy as specified in Article IV.
b) Commission approval of this Agreement 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.
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This confirmation will not be unreasonably withheld by Idaho Power.
5.3 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
6.1 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 up to an average of 10 000 kWh per hour
of Net Energy delivered by the Transmitting Entity to the Point of Delivery. Except upon mutual
agreement, Idaho Power shall not be obligated to purchase Net Energy in any month that exceeds the
Maximum Monthly Energy amounts specified in paragraph 6.
Net Energy and Maximum Monthly Energy Amounts - Seller intends to deliver Net Energy in
the following monthly amounts. Seller agrees that the maximum Net Energy delivered in any month to
supply this contract will not exceed the following Maximum Monthly Energy Amounts:
Net Enerl!V
Season 1
Month Kwh
March 649 000
April 097 000
May 718 000
June 951 000
July 510 000
November 587 000
December 166 000
August 677 000
September 235 000
October 219 000
January 166 000
February 303 000
Season 2
Season 3
6.2.
Maximum
Monthly
Enerl!V
Kwh
051 500
7,470 500
071 500
264 500
800 500
986 500
595 500
975 500
563 500
598 500
595 500
687 500
Seller s Adjustment of Net Energy Amount - By written notice given to Idaho Power in
accordance with paragraph 27.1 , the Seller may revise the monthly Net Energy Amounts
specified in paragraph 6.2 on the following Designated Dates. These notices must be
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received a minimum 15 days prior to the Designated Dates and failure to provide timely
written notice of changed amounts will be deemed to be an election of no change.
Designated Dates
Prior to the Operation Date
Last day of the 6th month after the Operation Date
Last day of the 12th month after the Operation Date
Last day of any subsequent month, as long as only one revision occurs in
any two consecutive year period.
6.3 Seller s failure to deliver Net Energy in any Contract Year in an amount equal to at least ten
percent (10%) of the Annual Net Energy amount shall constitute an event of default.
ARTICLE VII: PURCHASE PRICE AND METHOD OF PAYMENT;
ADJUSTMENT OF PURCHASE PRICE
7.1 Net Energy Purchase Price - For all Net Energy which is delivered by the Seller to Idaho Power
prior to the Operation Date, Idaho Power will pay the Seller the Market Energy Cost. For all
other Net Energy, Idaho Power will pay the non-levelized 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 Mills/K wh Mills/K wh Mills/K wh
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 43.71.59.26
2016 44.72.60.
2017 45.74.62.
2018 46.76.63.
2019 47.78.65.
2020 48.79.66.
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2021
2022
2023
2024
2025
50.
51.
52.
53.
55.
81.
83.
85.
87.
89.
68.21
69.
71.49
73,
74.
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 actually
delivered to Idaho Power as specified in Appendix A.
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 ofthe Public Utilities Regulatory Policies Act of 1978 and 18
CFR ~292.303-308.
ARTICLE VIII: ENVIRONMENTAL ATTRIBUTES
8.1 The Parties have not agreed on the ownership of the Environmental Attributes. The Parties have
agreed to present this issue to the Commission for resolution. If the Commission accepts Idaho
Power s position that its customers own the Environmental Attributes, the following language
would be included in the Agreement and Seller reserves the right to cancel this Agreement.
Idaho Power retains all rights and will own any and all beneficial fuel, emission or other
environmental attributes currently or in the future attributable to the Net Energy delivered
from this Facility during the term of this Agreement. These attributes will include but are
not limited to Green Credits, Green Tags, Renewable Energy Credits (REe) and
Emission Credits.
8.2 If the Commission accepts the Seller s position that the Seller owns any Environmental
Attributes, the Agreement will contain the following language:
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10.1
10.
10.
The Seller retains all rights and will own any and all beneficial fuel, emission or other
environmental attributes currently or in the future attributable to this Facility. These
attributes will include but are not limited to Green Credits, Green Tags, Renewable
Energy Credits (REe) and Emission Credits.
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 electric energy to the Transmitting Entity for the full term of the Agreement.
Interconnection Facilities - Seller will construct, install, own and maintain all Interconnection
Facilities other than those owned, installed or maintained by the Transmitting Entity. Seller will
pay all costs of interconnecting with the Transmitting Entity and transmitting Net Energy to
Idaho Power.
ARTICLE X: TRANSMISSION AGREEMENT
Transmission Agreement - The Seller will arrange and pay for the delivery of Net Energy over
the facilities of the Transmitting Entities (the Bonneville Power Administration ("BPA") and the
Raft River Rural Electric Cooperative ("Raft River )) to the Point of Delivery. The delivery of
Net Energy from the Facility to the Idaho Power Point of Delivery shall be in accordance with
the terms and conditions of a Transmission Agreement between the Seller and the Transmitting
Entities.
Acceptance of Transmission Agreement - This Agreement is expressly conditioned and
contingent upon Idaho Power s acceptance of the Transmission Agreement. Such acceptance
will not be unreasonably withheld. Idaho Power will be identified within the Transmission
Agreement as an intended third party beneficiary of the Transmission Agreement and a material
default by Seller under the Transmission Agreement will be a default under this Agreement.
Losses - Idaho Power will only purchase the Net Energy that is delivered by the Transmitting
Entity to Idaho Power at the Point of Delivery. Losses will be calculated as provided in
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ILl
11.2
Appendix B of this Agreement.
ARTICLE XI: METERING
Metering and Telemetry - Idaho Power shall, for the account of Seller, provide, install, and
maintain Metering Equipment as required to determine the amount of Net Energy delivered to
Idaho Power at the Point of Delivery. The metering will be installed at the locations as specified
in Appendix B of this Agreement. If required by Idaho Power, metering will also include
measurement of kilovar-hours in a manner agreed to by both Parties. All reasonable 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. 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.
Meter Inspection - Idaho Power shall inspect and test all meters upon their installation and at least
once every four (4) years thereafter. 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 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 Power s 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.
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11.3
12.1
12.
13.
14.1
14.2
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 the Facility's generation and Net Energy amounts
delivered, to Idaho Power s Designated Dispatch Facility.
ARTICLE XII - RECORDS
Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate total generation and Net Energy records in a form and content
recommended by Idaho Power.
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 total generation and Net Energy delivery
records pertaining to the Seller s Facility.
ARTICLE XIII - PROTECTION
Seller will construct, operate and maintain the Facility and Seller-furnished Interconnection
Facilities in accordance with Prudent Electrical Practices, the National Electric Safety Code and
any other applicable local, state and federal codes.
ARTICLE XIV - OPERATIONS
Communications - Idaho Power, the Transmitting Entity and the Seller shall maintain appropriate
operating communications through Idaho Power s Designated Dispatch Facility in accordance
with Appendix A of this Agreement.
Energy Acceptance
14.2.1 Idaho Power shall be excused from accepting and paying for Net Energy produced by the
Facility and delivered by the Transmitting Entity 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 deliveries is necessary because of
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14.3
14.4
14.5
line construction or maintenance requirements, emergencies, electrical system operating
conditions on its system or as otherwise required by Prudent Electrical Practices
provided that during such curtailment, interruption or reduction, Idaho Power shall
cooperate with the Seller and the Transmitting Entity in rescheduling Net Energy
deliveries to an alternative point of delivery if reasonably possible. If, for reasons other
than an event of force Majeure, Idaho Power requires such a curtailment, interruption or
reduction of Net 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 at a rate equivalent to the pro rata daily average of
the amounts specified for the applicable month in paragraph 6.2. Idaho Power will notify
Seller when the interruption, curtailment or reduction is terminated.
14.2 Under no circumstances will the Seller permit the Transmitting Entity to deliver energy
from the Facility in an amount that exceeds the Maximum Capacity Amount unless such
energy is delivered pursuant to a separate transmission agreement. Seller s failure to
limit deliveries by the Transmitting Entity pursuant to this contract to the Maximum
Capacity Amount will be a Material Breach of this Agreement.
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.
Generator Ramping - Idaho Power, in accordance with Prudent Electrical Practices, shall have the
right to limit the rate that generation is changed at startup, during normal operation or following
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, Seller shall submit a
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15.1
15.2
written proposed maintenance schedule for that calendar year and Idaho Power and Seller shall
mutually agree as to the acceptability of the proposed schedule. The Parties determination as to
the acceptability of the Seller s timetable for scheduled maintenance will take into consideration
Prudent Electrical Practices, Idaho Power system requirements and the Seller s preferred
schedule. Neither Party shall unreasonably withhold acceptance of the proposed maintenance
schedule.
ARTICLE XV: INDEMNIFICATION AND INSURANCE
Indemnification - Each Party agrees to hold harmless and to indemnify the other Party, its
officers, agents, affiliates, subsidiaries, parent company and employees against all loss, damage
expense and liability 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 shall, on the other Party's request, defend any suit
asserting a claim covered by this indemnity. The indemnifying Party shall pay all costs, including
reasonable attorney fees that may be incurred by the other Party in enforcing this indemnity.
Insurance - During the term of this Agreement, Seller shall secure and continuously carry the
following insurance coverage:
15.1 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.M.
Best Company rating of A- or better and shall include:
(a)An endorsement naming Idaho Power as an additional insured and loss payee as
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15.
15.4
15.
16.
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 Provide Copies ofPolicv ofInsurance - Within one hundred twenty (120) days after the
Operation Date, and within ninety (90) days of the effective date of any modifications to the
policy, Seller will furnish to Idaho Power a certified copy of the original of the insurance policy
and an endorsement for the insurance coverage described above. In the case of policy renewals
Seller may provide a certificate from the insurance carrier that there have been no changes to the
policy in lieu of providing the required certified copy of the policy.
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
As used in this Agreement, "force Majeure" or "an event of force Majeure" means any cause
beyond the control of the Seller 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 God, fire, flood, storms, wars, hostilities, civil strife, strikes and other labor disturbances
earthquakes, fires, lightning, epidemics, sabotage, or changes in law or regulation, 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
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17.
18.1
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 a result of such
occurrence.
ARTICLE XVII: LIABILITY: 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 XVIII: 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.
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19.
20.1
20.2
21.1
21.2
ARTICLE XIX: 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 XX: CHOICE OF LAWS AND VENUE
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.
Venue for any litigation arising out of or related to this Agreement will lie in the District Court of
the Fourth Judicial District ofIdaho in and for the County of Ada.
ARTICLE XXI: 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-
21.2.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 nondefaulting Party may, at its option, terminate this
agreement and/or pursue its legal or equitable remedies.
21.2.Material Breaches - The notice and cure provisions in paragraph 21.1 do not apply
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21.3
22.
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 term of this
Agreement, Seller will provide Idaho Power with the following:
21.3.1
21.3.
21.3.3
Insurance - Evidence of compliance with the provisions of paragraph 14.2. 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
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
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 licenses. 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 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 permitting agency.
ARTICLE XXII: GOVERNMENTAL AUTHORIZATION
This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
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23.
24.
25.1
26.
ARTICLE XXIII: COMMISSION ORDER
This Agreement shall become finally effective upon the Commission s approval of all terms and
provisions hereof without material change or condition together with a declaration that all
payments properly made to Seller hereunder shall be allowed as prudently incurred expenses for
ratemaking purposes.
ARTICLE XXIV: 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 with 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 ofIdaho Power
rights and interests under this Agreement. This article shall not be violated by a financing entity
with recorded or secured rights 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 XXV: 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 XXVI: 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
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27.
28.
29.
Facilities.
ARTICLE XXVII: 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:US Geothermal Inc.
Attn: Daniel Kunz
1509 Tyrell Lane, Suite B
Boise, Idaho 83706
To Idaho Power:Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
ARTICLE XXVIII: 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 XXIX: 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.
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30.
31.1
Dated
ARTICLE XXX: 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 XXXI: 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.
IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be
executed in their respective names on the dates set forth below:
Idaho Power Company US Geothermal Inc.
John Prescott - Vice President, Power Supply Daniel Kunz - President
Dated
Idaho Power Seller
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APPENDIX A
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
At the end of each month the following 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 energy production at the Idaho Power metering point. All quantities
of Net Energy purchased hereunder shall be adjusted to account for electrical losses, if any, between the
point of metering and the Point of Delivery, so that the purchased amount reflects the net amount of
energy flowing into Idaho Power s system at the Point of Delivery.
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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:
Project On-site Contact information
Telephone Number:
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APPENDIX B
FACILITY AND POINT OF DELIVERY
PROJECT NO.
DESCRIPTION OF FACILITY
The Seller s Facility is described as:
The Raft River Geothermal Power Plant, Unit #1 (RRGPP-l) is an air-cooled 15MW facility
using geothermal water in a closed-loop rankine cycle.
LOCATION OF FACILITY
The Facility is located at:
Sections 23 (Township 15 South, Range 26 East), Cassia County, Idaho.
SCHEDULED OPERATION DATE
Seller has selected May 15 2006 as the Scheduled Operation Date.
POINT OF DELIVERY
Point of Delivery" means, unless otherwise agreed by both Parties, the point of interconnection
between Idaho Power and the Transmitting Entity will be the Minidoka dam substation. The
Transmitting entity will be the Bonneville Power Administration - Transmission Business Line.
LOSSES
The calculated energy losses measured in kwh occurring between the 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)
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of all of the electrical equipment between the point of metering and the Point of Delivery, Idaho
Power will configure a reasonable revised loss calculation formula to be used to calculate the
Kwh Losses for the remaining term of the Agreement. If at anytime during the term of this
Agreement, either party determines that the loss calculation does not correctly reflect the actual
Kwh losses attributed to the electrical equipment between the point of metering and the Point of
Delivery, either party may request that Idaho Power recalculate the losses. Following agreement
on such recalculation, Idaho Power shall adjust the calculation and retroactively adjust the
previous months Kwh loss calculations.
METERING AND TELEMETRY
The Metering Equipment will measure the energy production at the Facility, Station Use, and any
other energy diversions between the Facility Metering and the Point of Delivery or any other
agreed upon method to accurately determine the energy produced by the Seller s facility and
delivered to the Point of Delivery by the Transmitting Entity. These meters will be located at the
Bridge Substation on the 138kV Minidoka to West Wendover transmission line.
Idaho Power provided metering equipment will consist of:
Seller provided Metering Equipment will consist of:
Seller will arrange for and make available at Seller s cost, a telephone circuit dedicated to Idaho
Power s use terminating in an RJ-l1 receptacle to be used for load profiling and another
telephone circuit dedicated to Idaho Power s communication equipment for continuous
telemetering of the Facility's kilowatt delivery to the Point of Delivery to Idaho Power
Designated Dispatch Facility. The meters will register kilowatt-hours and kilowatts of demand.
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Idaho Power provided meter and communication equipment will be owned and maintained by
Idaho Power with total cost of purchase, installation, operation and maintenance including
engineering and administrative cost to be reimbursed to Idaho Power by the Seller.
REACTIVE POWER
Total reactive power required to be supplied by Idaho Power to the Seller is _zero (0)-
KV AR, based on information provided by the Seller. Idaho Power will install and maintain
facilities on its system so as to meet this requirement with total cost of installation to be
reimbursed to Idaho Power by the Seller.
COSTS
The cost of the Metering Equipment is $. The cost of reactive power supplied is
. This total cost has been paid to Idaho Power Company in accordance with
Schedule 72. In addition to the installation and construction charges 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 completion of the installation ofthe
Idaho Power provided equipment. The monthly operations and maintenance charge will be based
upon the initial cost paid by the Seller in accordance with Schedule 72. Upon reconciliation
the actual costs, in accordance with Schedule 72 the monthly operations and maintenance charge
will be adjusted to reflect the actual cost incurred by Idaho Power and the previously charged
monthly operation and maintenance expense will be revised to reflect the actual cost incurred by
Idaho Power. Idaho Power will refund or Seller will remit any underpayment of the adjusted
monthly operations and maintenance charge within sixty (60) days of the determination of this
amount. In addition, there will be a monthly charge for the communication circuit lease cost
associated with the telemetry equipment. The estimated communication circuit lease is
per month as of the date of this Agreement. Seller recognizes that the monthly
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communications circuit charge may be adjusted by Idaho Power as the cost to Idaho Power is
adjusted by the owner of the communication circuit(s).
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APPENDIX C
ENGINEER'S CERTIFICATION
OPERATIONS & MAINTENANCE POLICY
The undersigned behalf 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 ofIdaho.
That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement
between Idaho Power Buyer and Geothermal Inc.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
referred 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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froject'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 5.3 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
ENGINEER'S CERTIFICATION
ONGOING OPERATIONS 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 Geothermal Inc 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
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O&M Policy; that it is in reasonably good operating condition; and that if adherence to said O&M Policy
continues, the Project will continue producing at or near its design electrical output, efficiency and plant
factor for the remaining years of the Agreement.
That Engineer recognizes that Idaho Power, in accordance with paragraph 18.2 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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EXHIBIT C
Article
H16
I1P
128
+920
21G
22.+
21~
21J-
2~4
2Q~
216
2~+
228
;w.30
31G
32.+
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
US GEOTHERMAL, INC
TABLE OF CONTENTS
TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Term, Early Termination and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment~
Adjustment of Purchase Price
Environmental Attributes
Facility and Interconnection
Transmission Agreement
Metering and Telemetry
Records
Protection
Operations
Reliability Management Svstem
Indemnification and Insurance
Force Majeure
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
IPco-USGeo Non-levelized PSA-(Rev4-IPCo)l'S GeotHermal dral~ 226 0'1
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Appendix A
Appendix B
Appendix C
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FIRM ENERGY SALES AGREEMENT
THIS AGREEMENT, entered into on this day of 2004 between
US GEOTHERMAL, INC an Idaho Delaware corporation (Seller), and IDAHO POWER
COMPANY, an 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, fmn electric energy
from 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% ofthe monthly Net Energy Amount as
specified in paragraph 6.2 of this Agreement.
lJ.~ "Commission" - The Idaho Public Utilities Commission.
1.1~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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+ALL"Designated Dispatch Facility"- Idaho Power s Control Area Operations Group, or any
subsequent group designated by Idaho Power.
MLL"Facility" - That electric generation facility described in Appendix B ofthis Agreement.
-h6LL-"Interconnection Facilities - All facilities required to be installed to interconnect and deliver
energy from the Facility to the Transmitting Entity's system including, but not limited to
connection, switching, metering, relaying, communications and safety equipment.
H.LL"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 ofthis Agreement.
t-&~"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.
+:-91.Material Breach" - A Default (paragraph 22+.2.1) subject to paragraph 22.+.2.
hW1.l1 Maximum Capacity Amounf' - The maximum capacity (MW) of the Facility will be 17
MW.
-h++ 1.12 Metering Equipment"- All equipment specified in Schedule 72, this Agreement and any
additional equipment specified in Appendix B required to measure, record or telemeter power
provided by the Seller s Facility.
+-:+2, 1.13 Net Energy - The electric energy produced by the Facility, less Station Use and less
Losses, expressed in kilowatt hours (KWh), which Seller commits to deliver -and the
Transmitting Entity will deliver~ to Idaho Power at the Point of Delivery for the full term of the
Agreement. Net Energy does not include Optional Energydcliveries will not exceed 10 000 kWh
in a single hour.
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j .
Optional Energy" - The electric energy produced by the Facility, less Station Use, and less
Losses. scheduled and delivered by the Transmitting Entity to Idaho Power at the Point of
DelivelY that exceeds 10,000 Kwh in any single hour
-hH-1.15 Operation Date" - The day commencing at 0001 hours, Mountain Time, following the
day that all requirements of paragraph 5.2~ have been completed.
-I:-:-l41.1 6 Point of Delivery" - The location specified in Appendix B, where the Transmitting
Entity delivers the Facility's Net Energy and Optional Energy to Idaho Power.
-l--:B 1. 1 7 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.
+-+61.18 Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates
achieving the Operation Date.
-h-H1.19 Schedule 72"- Idaho Power s Tariff No 101 , Schedule 72 or its successor schedules as
approved by the Commission.
-1-:+& I. 2 0 Season" - The three periods identified in Article VI.
h-l-91. 2 1 Shortfall Energy
" -
The difference between 90% of the monthly Net Energy Amount for
the corresponding month specified in paragraph 6.2 of this Agreement and the same month'
actual Net Energy ifthe actual month's Net Energy is less than 90% of the corresponding
month's Net Energy Amount specified in paragraph 6.
-l-:2O 1.Station Use" - Electric energy that is used to operate equipment that is auxiliary or
otherwise related to the production of electricity by the facility.
21~Surplus Energy - Net Energy produced by the Seller s Facility and scheduled and delivered by
the Transmitting Entitv ~to Idaho Power at the Point of Delivery and accepted by Idaho
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 and/or
Optional -whi-eflEnergv produced by the Seller s Facility and scheduled and delivered by the
Transmitting Entity is delivered by the Seller to Idaho Power prior to the Operation Date.
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21~ "Total Cost of the Facility" - The total cost of structures, equipment and appurtenances.
1.224 "Transmitting Entity" - The signatory(s) (other than the Seller) to the Transmission Agreement
referred to in paragraph 10.1 and its successors and assigns.
ARTICLE II: 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 determ ined 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.
Seller 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 shall 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 9292.207. After initial qualification, Seller will take such steps as
may be required to maintain the Facility's Qualifying Facility Status during the term of this
Agreement and Seller s failure to maintain Qualifying Facility Status will be a Material Breach of
this Agreement. Idaho Power reserves the right to review the Seller s Qualifying Facility Status
and associated support and compliance documents at anytime during the term of this Agreement.
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ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
4.1 Prior to the Operation Date and as a condition of Idaho Power s acceptance of deliveries of
energy from the Seller, Seller shall:
1.1
1.2
1.3
1.4
1.5
Submit proof to Idaho Power that all licenses, permits or approvals necessary for
Seller s 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.
Opinion of Counsel - Submit to Idaho Power an Opinion Letter signed by an attorney
admitted to practice and in good standing in the State ofIdaho providing an
opinion that Seller s licenses, permits and approvals as set forth in paragraph 4.1.1
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 ofthe 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).
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.
Insurance - Submit written proofto Idaho Power of all insurance required in Article XVI.
Transmission Agreement - Provide Idaho Power with a copy of the Transmission
Agreement executed by the Seller and the Transmitting Entity in a form acceptable to
Idaho Power. Idaho Power s acceptance will not be unreasonably withheld.
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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.
Idaho Power Electrical System Study - Seller and Transmitting Entity will request, in
writing, a specific Point of Delivery where the Facilities Net Energv and Optional Energy
generation will be delivered to the Idaho Power. Upon receipt of this request, at Seller
expense, Idaho Power will complete an electrical system study to determine Idaho
Power s ability to receive the Maximum Capacity Amount at the requested Point of
Delivery. This study will include a study of the Idaho Power electrical system at this
Point of Delivery and estimation of costs as specified in Appendix B.
1.7.If said study results in Idaho Power being unable to receive the Maximum
Capacity Amount at the requested Point of Delivery, the Seller and
Transmitting Entity may request a different Point of Delivery or revise the
Maximum Capacity Amount and a similar study, at the Seller s expense, will
be conducted.
1.7.2 In the event the Seller and Transmitting Entity request to deliver the
Maximum Capacity Amount at a Point of Delivery that Idaho Power has
identified as being unable to receive the Maximum Capacity Amount, at
Seller s request and expense, Idaho Power will conduct a study to determine
the necessary upgrades and/or modifications required to enable receipt of the
Maximum Capacity Amount at the requested Point of Delivery.
1.7.3 Seller will be responsible for all expenses associated with all Idaho Power
studies, upgrades and/or modifications required to enable delivery of the
Maximum Capacity Amount at the requested Point of Delivery. An initial
deposit will be calculated based upon the estimated cost of each individual
study, upgrade or modification and will be required to be paid by the Seller
prior to Idaho Power conducting any work associated with the Seller
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request.Upon completion of any and all studies, upgrades and/or
modifications required to accommodate the Seller s request, Idaho Power
will reconcile the actual expenses with the previously paid deposit and the
appropriate refund or additional billing will be processed.
ARTICLE V: TERM AND OPERATION DATE
5.1 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.
Operation Date - The Operation Date may occur only after the Facility has achieved all of the
following:
a) Completed all Conditions to Acceptance of Energy as specified in Article IV.
b) Commission approval of this Agreement 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 conflffi1ation from Idaho Power of the Operation Date.
This confirmation will not be unreasonably withheld by Idaho Power.
5.3 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 all of the Net Energy and Optional Energv
produced by the Seller s Facility and 'Nill sell up to 10 000 kWh per hour of Net Energy
scheduled and delivered by the Transmitting Entity to the Point of Delivery.Under this
Agreement, Idaho PO\ver is only obligated to purchase Net energy from the Seller and Net Energy
Nil! not eJ(ceed 10 000 kWh per hour.
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6.2 Net Energy Amounts - Seller intends to deliver Net Energy in the following monthly amounts:
6.2.1
Season 1
Month Kwh
March xxxxxx
April xxxxxx
May xxxxxx
Jm:ieJuly xxxxxx
.ffiIyAu ust xxxxxx
November xxxxxx
December xxxxxx
\ugustJune xxxxxx
September xxxxxx
October xxxxxx
January xxxxxx
February xxxxxx
Season 2
Season 3
Seller s Adjustment of Net Energy 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 will 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 t\ 13th, 15 , 17t\ and 19th Contract
Year
Idaho Power Adjustment of Net Energy Amount - If Idaho Power is excused from
accepting the Seller s Net Energy as specified in paragraph 14.1 or if the Seller declares
a Suspension of Energy Deliveries as specified in paragraph 14.4.1, the Net Energy
Amount as specified in paragraph 6.2 for the specific month in which the reduction or
suspension under paragraph 14.3.1 or 14.4.1 occurs will be reduced in accordance with
the following:
Where:
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frco-USGeo Noll-fevelized PSA-(Rev4-IPCo)l'S Geothermal drat~ 226 0'1
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NEA Current Months Net Energy Amount (Paragraph 6.
RSH
==
Actual hours the Facility's energy deliveries were either reduced
or suspended under paragraph 14.or 14.4.
Actual total hours in the CUlTent month
Resulting formula being:
adjusted Net Energy Amount =RSH
X ( NEA NEA
This adjusted Net Energy Amount will be used in applicable Surplus Energy and ShOltfall Energy
calculations for only the specific month in which Idaho Power was excused from accepting the
Seller s Net Energy or the Seller declared a Suspension of Energy.
Unless excused by Force Majeure or by an adjustment as provided in paragraph 6.2, Seller
failure to deliver Net Energy to the Transmitting Entity and/or the Transmitting Entity s failure to
deliver Net Energy to the Point of Deliverv in anv Contract Year in an amount equal to at least
ten percent (10%) of the Annual Net Ener~y Amount as specified in para~raph 6.2 or as may be
adjusted due to paragraph 6.2.2, shall constitute an event of default.
Seller s failure to deliver Net Energy in any Contract Year in an amO'.lllt equal to at least ten
percent (10%) of the /\nnual Net Energy anlOunt shall constitute an event of default.
ARTICLE VII: PURCHASE PRICE AND METHOD OF PA YMENT~
/\DJUSTMENT OF PURCHASE PRICE
Base Energy Purchase Price - For all Base Energy, Idaho Power will pay the non-levelized
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 MillsIK wh MillsIK wh MillsIK wh
2004 33.54.45.
2005 34.46 56.46.
2006 35.57.47.
2007 36.58.49.
2008 36.60.50.
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IPco-lJSGco Non-lcvelized PSA-(Rcv4-1PCo)l.'~: Geothermal draft2 26 04
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7.2
7.3
7.4
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
50.
51.
52.
53.
55.
61.
63.
64.
66.
67.
69.46
71.
72.
74.
76.
78.
79.
81.
83.
85.
87.
89.
51.48
52.
53.
55.
56.
57.
59.
60.
62.
63.
65.
66.
68.
69.
71.49
73.
74.
Surplus Energy Price - For all Surplus Energy, Idaho Power shall pay to the Seller the current
month's Market Energy Cost or the Base Energy Purchase Price specified in paragraph 7.1
whichever is lower.
Shortfall Energy Price - For all Shortfall Energy, if the Market Energy Cost for the month in
which the Shortfall Energy occurs is less th~en 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.
7.'1 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, the Seller will make payment to Idaho Power of the unpaid
balance within 15 days of being notified of the outstanding balance.
Optional Energy Price - For all Optional Energy, Idaho Power shall pay to the Seller the current
month's Market Energy Cost or the Base Energy Purchase Price specified in paragraph 7.
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whichever is lower.
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 at the Point of Deliverv as specified in
Appendix A.
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 I 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.
ARTICLE VIII: ENVIRONMENTAL ATTRIBUTES
8.1 The Parties ha'.'e not agreed on the ownership of the Environmental /\ttrib'..ltes. The Parties have
agreed to present this issue to the Commission for resolution. If the Commission accepts Idaho
Po\ver s position that its customers own the Environmental /\ttributes, the following language
would be included in the Agreement and Seller reserves the right to cancel this Agreement.
Idaho Power retains all rights and v.-ill own any and all beneficial fuel, emission or other
environmental attributes currently or in the future attributable to this Facility. These
attributes """ill include but arc not limited to Green Credits, Green Tags, Renewable
Energy Credits CREe) and Emission Credits.
If the Commission accepts the Seller s position that the Seller owns any En'/ironmental
Attributes, the ,.greement will contain the following language:
The Seller retains all rights and \-vill 0"';11 aJ'IY and all bendicial fuel, emission or other
environmental attributes currently or in the futuro attributable to this Facility. These
attributes will include but arc not limited to Green Credits, Green Tags, Renewable
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10.
Energy Credits (REC) and EmissiOl'1 Credits.
As of the date of this Agreement, Idaho Power has pending before the Commission a Petition for
a Declaratory Order, IPC Case number IPC-O4-02.Idaho Power is seekin a Commission
ruling concerning whether the Environmental Attributes (i.e., renewable energy credits, green
tags, etc.) associated with a OF project are owned by the project or the utility at the time a utility
purchases electricity from a OF 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 (PC Case number IPC-
04-02 becomes final and non-a ealable.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 electric energy to the Transmitting Entity for the full term of the Agreement.
Interconnection Facilities - Seller will construct, install, own and maintain all Interconnection
Facilities other than those owned, installed or maintained by the Transmitting Entity. Seller will
pay all costs of interconnecting with the Transmitting Entity and transmitting Net Energy and
Optional Energy to Idaho Power.
ARTICLE X: TRANSMISSION AGREEMENT
Transmission Agreement - The Seller will arrange and pay for the delivery of Net Energy and
Optional Energy over the facilities of the Transmitting Entities (the Bonneville Power
Administration ("BP A") and the Raft River Rural Electric Cooperative ("Raft River )) to the
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10.
10.3
11.1
11.2
Point of Delivery. The delivery of Net Energy and Optional Energy -from the Facility to the
Idaho Power Point of Delivery shall be in accordance with the terms and conditions of a
Transmission Agreement between the Seller and the Transmitting Entities.
Acceptance of Transmission Agreement - This Agreement is expressly conditioned and
contingent upon Idaho Power s acceptance of the Transmission Agreement. Such acceptance
will not be unreasonably withheld. Idaho Power will be identified within the Transmission
Agreement as an intended third partx beneficiary of the Transmission Agreement and a default
by Seller under the Transmission Agreement will be a default under this Agreement.
Losses - Idaho Power will only purchase the Net Energy and Optional Energv that is delivered
by the Transmitting Entity to Idaho Power at the Point of Delivery. Losses will be calculated as
provided in Appendix B of this Agreement.
ARTICLE XI: METERING AND TELEMETRY
Metering and Telemetry - Idaho Power shall, for the account of Seller, provide, install, and
maintain Metering Equipment as required to determine the amount of Net Energy and Optional
Energy delivered to Idaho Power at the Point of Delivery. The metering will be installed at the
locations as specified in Appendix B of this Agreement. If required by Idaho Power, metering
will also include measurement of kilovar-hours in a manner agreed to by both Parties. 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
actual cost of providing this Metering Equipment and services. 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.
Meter Inspection - Idaho Power shall inspect and test all meters upon their installation and at least
once every four (4) years thereafter. 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
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11.3
12.
12.
13.1
Party may have 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 Power s 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 the Facility's generation
-,--
-aM Net Energy and Optional
amountsEnergy amounts delivered, to Idaho Power s Designated Dispatch Facility.
ARTICLE XII - RECORDS
Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate total generation and Net Energy and Optional Energy records I
in a form and content recommended by Idaho Power.
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 total generation and Net Energy delivery
records pertaining to the Seller s Facility.
ARTICLE XIII - PROTECTION
Seller will construct, operate and maintain the Facility and Seller-furnished Interconnection
Facilities in accordance with Prudent Electrical Practices, the National Electric Safety Code and
any other applicable local, state and federal codes.
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ARTICLE XIV - OPERATIONS
14.Emergencv Conditions - Seller agrees that, in the event of and during a period of a shOltage of
power on Idaho Power s system as declared by Idaho Power in its reasonable discretion or in the
event that the \vholesale market prices for energy delivered to Idaho Power are higher than the
energy prices specified in Alticle VII herein, Seller shall. at Idaho Power s request, within the
limits of reasonable safety requirements as determined by Seller, and when economically viable
as determined by the Seller, will 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, unless it is determined by Idaho Power that market
energy deliveries to Idaho Power are not physically possible, in which case Idaho Power and the
Seller will agree upon the energy price. The Commission will be notified of any energy prices
that exceed the energy prices contained within paragraph 7.1 for the additional energy deliveries.
Additional energy will only be the incremental increase in energy scheduled and delivered to
Idaho Power that exceeds the previously planned energy deliveries to Idaho Power for the
specific period agreed to by both paJties prior to the deliveries of the additional energy.
14.2.+ Communications - Idaho Power, the Transmitting Entity and the Seller shall maintain appropriate
operating communications through Idaho Power s Designated Dispatch Facility in accordance
with Appendix A of this Agreement.
14 .12. Energy Acceptance
14.12..1 Idaho Power shall be excused from accepting and paying for Net Energy and/or Optional
Energy produced by the Facility and delivered by the Transmitting Entity 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
- 16-
IPco-USGeo Non-Icvelizcd PSA-(Rev4-1PCo)L'S Geothermal drall 220 0'1
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14.4
dcli'.'eriesEnergy deliveries is necessary because of line construction or maintenance I
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 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 at a rate equivalent to the pro rata daily average of the amounts
specified for the applicable month in paragraph 6.2. Idaho Power will notify Seller when
the interruption, curtailment or reduction is terminated.
~14.3.2 Under no circumstances will the Seller permit the Transmitting Entity te deliver
Net Energy and/or Optional Energy eflefgy on behalf of the Seller s Facility from the
Facility in an amount to the Point of DeliveIY in an amount that exceeds the Maximum
Capacity Amount at any moment in time.Delivery of Net Energy and/or Optional
Energy by the Transmitting Entity to the Point of Delivery that exceeds the Maximum
Capacity Amount will be Seller s failure to limit deliyerics by the Transmitting Entity to
the Maximum Capacity ","'mount will be a Material Breach of this Agreement.
Seller Declared Suspension of Energy Deliveries
14.4.1 If the Seller s Facility experiences a forced outage due to equipment failure which is not
caused by an event of Force Majeure or by neglect. disrepair or a foreseeable failure of
the Seller s Facility, Seller mav, after giving notice as provided in paragraph 14.4.
below, temporarily suspend all deliveries of Net Energy and Optional Energy to Idaho
Power for a period of not less than 72 hours to correct the forced outage condition. l'
Sellers Declared Suspension of Energv Deliveries will begin at the start of the next full
hour following the Seller s telephone notification 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 Energv
Amount will be adjusted as specified in paragraph 6.2.2.
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14.4.2 If the Seller desires to declare a Suspension of Enerf?)' Deliveries as provided
paragraph 14.4.1, the Seller will notify the Designated Dispatch Facilitv 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 XXIX, that will 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.
14.2.J. Voltage Levels - Seller, in accordance with Prudent Electrical Practices shall minimize voltage
fluctuations and maintain voltage levels acceptable to the Transmitting Entity and Idaho Power.
Idaho Power may, in accordance with Prudent Electrical Practices, upon one hundred eighty
(180) days' notice to the Transmitting Entity and the 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.
14.Q4 Generator Ramping - Idaho Power, in accordance with Prudent Electrical Practices, shall have the
right to limit the rate that generation is changed at startup, during normal operation or following
reconnection to the Transmitting Entity and te 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.
14.Scheduled Maintenance - On or before January 31 of each calendar year, Seller shall submit a I
written proposed maintenance schedule for that calendar year and Idaho Power and Seller shall
mutually agree as to the acceptability of the proposed schedule. The Parties determination as to
the acceptability of the Seller s timetable for scheduled maintenance will take into consideration
Prudent Electrical Practices, Idaho Power system requirements and the Seller s preferred
schedule. Neither Party shall unreasonably withhold acceptance of the proposed maintenance
schedule.
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14.
14.
15.
15.
Maintenance Coordination - The Seller. Idaho Power and the Transmitting Entity shall, to the
extent practicaL coordinate their respective line and Facilitv maintenance schedules such that they
occur simultaneously.
Contact Prior to Curtailment - Idaho Power will make a reasonable attempt to contact the Seller
and/or the Transmitting Entity prior to exercising its rights to cUl1ail, interrupt or reduce
deliveries from the Transmitting Entity from the Seller s Facility for any event that will be in
duration of 24 hours or longer. Seller and the Transmitting Entity understand that in the case of
emergencv circumstances, no notice will be given to Seller or the Translllitting Entity prior to
interruption, curtailment. or reduction.
ARTICLE XV: RELIABILITY MANAGEMENT SYSTEM
Purpose. In order to maintain the reliable operation of the transmission grid. the WECC
Reliability Criteria Agreement sets forth reliability criteria adopted by the WECC to which this
Seller and Idaho Power Company shall be required to complv. Seller acknowledges receipt
and understanding of the WECC Reliability Criteria Agreement and how it pertains to the Seller
facility.
Conlpliance. This Seller shall comply with the requirements of the WECC Reliability Criteria
Agreement. including the applicable WECC reliabilitv criteria set forth in Section TV of Annex A
thereof, and, in the event of failure to comply. Seller agrees to be subject to the sanctions
applicable to such failure. Such sanctions shall be assessed pursuant to the procedures contained
in the WECC Reliability Criteria Agreement. Each and all of the provisions of the WECC
Reliability Criteria Agreement are hereby incorporated bv reference into this Article 15 as though
set forth fully herein, and Seller shall for all purposes be considered a Participant. and shall be
entitled to all of the rights and privileges and be subject to all of the obligations of a Participant,
under and in connection with the WECC Reliability Criteria Agreement. including. but not
limited to the rights, privileges and obligations set forth in Sections 5, 6 and 10 of the WECC
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15.3
15.4
15.
15.
Reliability Criteria Agreement.
Payment of Sanctions. Seller shall be responsible for reimbursing Idaho Power Company for any
monetary sanctions assessed against Idaho Power Company due to the action or inaction of the
Seller by WECC pursuant to the WECC Reliability Criteria Agreement. Seller also shall be
responsible for payment of any monetary sanction assessed against the Seller by WECC pursuant
to the WECC Reliabilitv Criteria Agreement. Any such payment shall be made pursuant to the
procedures specified in the WECC Reliability Criteria Agreement.
Transfer of Control or Sale of Generation Facilities. In any sale or transfer of control of anv
generation facilities subject to this Agreement, Seller shall, as a condition of such sale or transfer
require the acquiring party or transferee with respect to the transferred facilities either to assume
the obligations of the Seller with respect to this Agreement or to enter into an agreement with
Idaho Power Companv imposing on the acquiring party or transferee the same obligations
applicable to the Seller pursuant to this Altic1e 15.
Publication. Seller consents to the release by the WECC of information related to the Seller
compliance with this Agreement only in accordance with the WECC Reliabilitv Criteria
Agreement.
Third Parties. Except for the rights and obligations between the WECC and the Seller specified
in this Article 15, this Agreement creates contractual rights and obligations solelv between the
Parties. Nothing in this Agreement shall create, as between the Parties or with respect to the
WECC: (a) any obligation or liability whatsoever (other than as expressly provided in this
reement or duty or standard of care whatsoever.In addition, nothing in this
Agreement shall create any duty, liability or standard of care whatsoever as to any other party.
Except for the rights, as a third-party beneficiary under this Alticle 15, of the WECC against the
Seller for the Seller, no third party shall have any rights whatsoever with respect to enforcement
of any provision of this Agreement. Idaho Power Company and the Seller expressly intend that
the WECC is a third-party beneficiarv to this Altic1e 15, and the WECC shall have the right to
seek to enforce against the Seller any provision of this Article 15, provided that specific
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IPco-lJSGeo Non-Icvclizcd PSA-(Rev4-1PCo)U~: Geothermal draft 226 0'1
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15.
15.
1~~.
performance shall be the sole remedy available to the WECC pursuant to Article 15 of this
Agreement, and the Seller shall not be liable to the WECC pursuant to this Agreement for
damages of any kind whatsoever (other than the payment of sanctions to the WECC, if so
construed), whether direct, compensatOlY, special, indirect, consequential, or punitive.
Reserved Rights. Nothing in the Article 15 of this Agreement or the WECC Reliability Criteria
Agreement shall affect the right of Idaho Power Companv, subject to anv necessary regulatorv
approval, to take such other measures to maintain reliability, including disconnection that Idaho
Power Company may otherwise be entitled to take.
Termination of Article 15. Seller may terminate its obligations pursuant to this Atticle 15:
15.If after the effective date of this Article 15, the requirements of the WECC Reliabilitv
Criteria Agreement applicable to the Seller are amended so as to adversely affect the
Seller, provided that the Seller gives fifteen (15) days ' notice of such termination to
Idaho Power Company and WECC within forty-five (45) davs of the date of issuance
of a Commission order accepting such amendment for filing, provided further that the
forty-five (45) day period within which notice of termination is required may be
extended by the Seller for an additional forty-five (45) days if the Seller gives written
notice to Idaho Power Companv of such requested extension within the initial fOlty-
five (45) day period; or
15.2 For any reason on one year s written notice to Idaho Power Company and the
WECC
ARTICLE XVI: INDEMNIFICATION AND INSURANCE
Indemnification - Each Party agreesshall agree to hold harmless and to indemnify the other Party,
its officers, agents, affiliates, subsidiaries, parent company and employees against all loss
damage, expense and liability 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
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maintenance of, or by failure of, any of such Party's works or facilities used in connection with
this Agreement. The indemnifying Party shall, on the other Party's request, defend any suit
asserting a claim covered by this indemnity. The indemnifying Party shall pay all costs, including
reasonable attorney fees that may be incurred by the other Party in enforcing this indemnity.
lQ~.Insurance - During the term of this Agreement, Seller shall secure and continuously carry the
following insurance coverage:
lQ~.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.
lQ~.2.The above insurance coverage shall be placed with an insurance company with
an AM. 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.
lQ~.3 Seller to Provide Certificate of Insurance - As required in paragraph 4.1.4 herein and annually I
thereafter, Seller shall furnish Idaho Power a certificate of insurance, together with the
endorsements required therein, evidencing the coverage as set forth above.
SeBer to Provide Copies ofPolicv oflnsurance 'Nithin one hundred twenty (120) days after the
Operation Date, and within ninety (90) days of the effective date of any modifications to the
policy, Seller will furnish to Idaho Power a certified copy of the original of the insurance policy
and an endorsements for the insurance coyerage described above. In the case of policy renev.'als
Seller may provide a certificate from the insurance carrier that there have been no change~; to the
policy in lieu of providing the required certified copy of the policy.
lQ~.1~ Seller to Notify Idaho Power of Loss of Coverage - If the insurance coverage required by
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116.
paragraph lQ~.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 XVII. FORCE MAJEURE
As used in this Agreement, "force Majeure" or "an event of force Majeure" means any cause
beyond the control of the Seller 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 God, fire, flood, storms, wars, hostilities, civil strife, strikes and other labor disturbances
earthquakes, fires, lightning, epidemics, sabotage, or changes in law or regulation, 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:
(I)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 a result of such
occurrence.
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1~+.l
12&.
ARTICLE XVIII: LIABILITY: 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:wIl: 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 XIX: WAIVER
+9.Any waiver at any time by either Party of its rights with respect to a default under this
21~.l
21~.
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
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.
Venue for any litigation arising out of or related to this Agreement will lie in the District Court of
the Fourth Judicial District ofIdaho in and for the County of Ada.
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22.+.
22.+.2
22.+.3
ARTICLE XXII: 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 nondefaulting 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 term of this
Agreement, Seller will provide Idaho Power with the following:
22.+.3 .
22.+.3 .
Insurance - Evidence of compliance with the provisions of paragraph lQ4.2. If Seller I
fails to comply, such failure will be a Material Breach and may onlv 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
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
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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
2Z+.3.3 Licenses and Permits - During the full term of this Agreement, Seller shall maintain I
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 licenses. 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 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 permitting agency.
ARTICLE XXIII: GOVERNMENTAL AUTHORIZATION
212.This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
212.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 in its retail rC';Cllue requirement all costs associated
attributed to with this Agreement.
ARTICLE XXIV II: COMMISSION ORDER
2:1~.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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2~4.
22~.
216.
2~+.
ARTICLE XXIV: 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
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 XXVII: 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 XXVII: 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:US Geothermal Inc.
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22&.
Attn: Daniel Kunz
1509 Tyrell Lane, Suite B
Boise, Idaho 83706
To Idaho Power:Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
ARTICLE XXIX\LIR: 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 XXIX: SEVERABILITY
3029 1 The invalidity or unenforceability of any term or provision of this Agreement shall not affect the
31().l
32-l-.l
validity or enforceability of any other terms or provisions and this Agreement shall be construed
in all other respects as ifthe 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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Dated
IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be
executed in their respective names on the dates set forth below:
Idaho Power Company
John Prescott - Vice President, Power Supply
Idaho Power
US Geothermal Inc.
Daniel Kunz - President
Dated
Seller
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APPENDIX A
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
At the end of each month the following 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 energy production production at the Idaho Power metering point-;-;
All quantities of Net Energy and Optional Energy purchased hereunder shall be adjusted to account for
electrical losses, if any, between the point of metering and the Point of Delivery, so that the purchased
amount of energy reflects the actual energy flowing into the Idaho Power electrical system at the Point of
Delivery.
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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 Openin2: 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
Reason
Date
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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:
Project On-site Contact information
Telephone Number:
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APPENDIX B
FACILITY AND POINT OF DELIVERY
PROJECT NO.
DESCRIPTION OF FACILITY
The Seller s Facility is described as:
The Raft River Geothermal Power Plant, Unit #1 (RRGPP-l) is an air-cooled 15 MW facility
using geothermal water in a closed -loop ranking cycle.
LOCATION OF FACILITY
The Facility is located at:
Section 23, Township 15 south, Range 26 East, Cassia County, Idaho near the town ofXXXXX
SCHEDULED OPERA nON DATE
Seller has selected May 15, 2006 as the Scheduled Operation Date.
POINT OF DELIVERY
Point of Delivery" means, unless otherwise agreed by both Parties, the point of interconnection
between Idaho Power and the Transmitting Entity will be~ The Minidoka dam substation. The
Transmitting Entitv will be the Bonneville Power Administration - Transmission Business Line.
LOSSES
The calculated energy losses measured in kwh occurring between the 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
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with the electrical equipment specifications (transformer loss specifications, conductor sizes, etc)
of all of the electrical equipment between the point of metering Facility and the Point of
Delivery Idaho Power will configure a revised loss calculation formula to be used to calculate
the Kwh Losses for the remaining term of the Agreement. If at anytime during the term of this
Agreement either pm1yldaho Power determines that the loss calculation does not correctly
reflect the actual Kwh losses attributed to the electrical equipment between the point of
meteringFacility and the Point of Delivery, the party initiating the review of the loss calculation
will be required to provide the supporting data, documentation and proposed revised loss
calculation. Upon agreement by both parties of the revised Loss calculation Idaho Power will
adjust may adjust the calculation and retroactively adjust the applicable previous months~ Kwh
loss calculations.
METERING AND TELEMETRY
The Metering Equipment will measure the energy production at the Facility, Station Use, and any
other energy diversions between the point of metering Facility Metering and the Point of Delivery
or any other agreed upon method to accurately determine the energy produced by the Seller
facility and delivered to the Point of Delivel):e6 by the Transmitting Entity. These meters will be
located at the Bridge substation on the 138 kV Minidoka to West Wendover transmission line.
Idaho Power provided metering equipment will consist of:
Seller provided Metering Equipment will consist of:
Seller will arrange for and make available at Seller s cost, a telephone circuit dedicated to Idaho
IPco-lJSGeo Non-lcvelized PSA-(Rev4-IPCo)I;~: Geothermal draf~ 226 ()-I
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Power s use terminating in an RJ 11 receptacle to be used for load profiling and another
- 34-
telephone circuit dedicated to Idaho Power s communication equipment for continuous
telemetering of the Facility's kilowatt delivery to the Point of Delivery to Idaho Power
Designated Dispatch Facility. The meters will register kilowatt-hours and kilowatts of demand.
Idaho Power provided meter and communication equipment will be owned and maintained by
Idaho Power with total cost of purchase, installation, operation and maintenance including
engineering and administrative cost to be reimbursed to Idaho Power by the Seller.
REACTIVE POWER
Total reactive power required to be supplied by Idaho Power to the Seller is KVAR
based on information provided by the Seller. Idaho Power will install and maintain facilities on
its system so as to meet this requirement with total cost of installation to be reimbursed to Idaho
Power by the Seller.
COSTS
The cost of the Metering Equipment is $. The cost of reactive power supplied is
. This total cost has been paid to Idaho Power Company in accordance with
Schedule 72. In addition to the installation and construction charges 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 completion of the installation of the
Idaho Power provided equipment. The monthly operations and maintenance charge will be based
upon the initial cost paid by the Seller in accordance with Schedule 72. Upon reconciliation of
the actual costs, in accordance with Schedule 72 the monthly operations and maintenance charge
will be adjusted to reflect the actual cost incurred by Idaho Power and the previously charged
monthly operation and maintenance expense will be revised to reflect the actual cost incurred by
Idaho Power. Idaho Power will refund or Seller will remit any underpayment offue adjusted
monthly operations and maintenance charge within sixty (60) days of the determination of this
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amount. In addition, there will be a monthly charge for the communication circuit lease cost
associated with the telemetry equipment. The estimated communication circuit lease is
per month as of the date of this Agreement. Seller recognizes that the monthly
communications circuit charge may be adjusted by Idaho Power as the cost to Idaho Power is
adjusted by the owner of the communication circuit(s).
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APPENDIX C
ENGINEER'S CERTIFICATION
OPERATIONS & MAINTENANCE POLICY
The undersigned behalf 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 ofIdaho.
That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement
between Idaho Power Buyer and Geothermal Inc.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
referred 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 5.3 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
ENGINEER'S CERTIFICATION
ONGOING OPERATIONS 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 Geothermal Inc 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
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O&M Policy; that it is in reasonably good operating condition; and that if adherence to said O&M Policy
continues, the Project will continue producing at or near its design electrical output, efficiency and plant
factor for the remaining years of the Agreement.
That Engineer recognizes that Idaho Power, in accordance with paragraph 12&.3.2 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
ENGINEER'S CERTIFICATION
DESIGN & CONSTRUCTION ADEQUACY
The undersigned behalf himself and
, hereinafter collectively referred to as "Engineer
hereby states and certifies to Idaho Power as follows:
That Engineer is a Licensed Professional Engineer in good standing in the State ofldaho.
That Engineer has reviewed the Firm Energy Sales Agreement, hereinafter "Agreement"
between Idaho Power Buyer,and
as 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
referred to as the "Project"
That the Project,which commonl known the
Pro is located in Section , Township
Ran Boise Meridian,County, Idaho.
That Engineer recognizes that the Agreement provides for the Project to furnish electrical
energy to Idaho Power for a
) y
ear eriod.
That Engineer has substantial experience in the design, construction and operation of
electric power plants of the same tvpe as this Project.
That Engineer has no economic relationship to the Design Engineer of this Project and
has made the analysis of the plans and specifications independently.
That Engineer has reviewed the engineering design and construction of the Project,
including the civil work, electrical work, generating equipment, prime mover conveyance svstem, Seller
furnished Interconnection Facilities and other Project facilities and equipment.
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',t.That the Project has been constructed in accordance with said plans and specifications, all
applicable codes and consistent with Prudent ElectTical Practices as that term is described in the
Agreement.
10.That the design and construction of the Project is such that with reasonable and prudent
operation and maintenance practices by Seller. the Project is capable of performing in accordance with the
terms of the A eement and with Prudent Electrical Practices for a ) year period.
11.That Engineer recognizes that Idaho Power, in accordance with paragraph 5.3(2) of the
Agreement, in interconnecting the Project with its system, is relying on Engineer s representations and
opinions contained in this Statement.
12.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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