20040428Application.pdf

FECEIVED f\l
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Peter J. Richardson
RICHARDSON & O'LEARY PLLC
99 East State Street
Eagle, Idaho 83616
Telephone: [phone]
Fax: [phone]
peter~ri chardsonando I eary. com
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20011 28 Pi'; J: 20
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UTiLiTiES CO iSSJON
Attorneys for the Industrial Customer of Idaho Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
BOB LEWANDOWSKI AND MARK
SCHROEDER
Complainants
IDAHO POWER COMPANY, an Idaho
Corporation
Respondent
CASE NO. IPC-04--JlJ
COMPLAINT
Complainants, Bob Lewandowski and Mark Schroeder, through their attorneys
Richardson and O'Leary, complains against Respondent Idaho Power Company ("Idaho Power
or the "Company ) and allege as follows:
This is a formal complaint filed pursuant to Rule 54 of the Rules of Procedure of the Idaho
Public Utilities Commission ("Commission ), IDAP A 31.01.01.054.
Mark Schroeder and Bob Lewandowski are individuals living in Idaho Power s service territory
in Southern Idaho.
COMPLAINT
Idaho Power is an electric utility with its principle place of business in Boise, Idaho.
Idaho Power is subject to the Commission s jurisdiction pursuant to Title 61, Idaho Code and 16
C. ~ 824a-3. The Commission has subject matter jurisdiction over this Complaint pursuant
to Idaho Code ~ 61-612 and 16 U.C. ~ 824a-3(g)(2).
Mark Schroeder is the owner of a farming operation located within the Bell Rapids Irrigation
District in Southern Idaho.
Bob Lewandowski is the owner of a home and an acreage located between Mountain Home and
Boise, Idaho south of Interstate 84.
Both Mr. Lewandowski and Mr. Schroeder are in the process of developing wind projects on
their land that will be qualifying facilities pursuant to PURP
Both Mr. Lewandowski and Mr. Schroeder have sought to obtain a power purchase agreement
ITom Idaho Power Company for the sale of the output ITom their wind projects.
Both Mr. Lewandowski and Mr. Schroeder have sought to sell the output from their respective
projects pursuant to this Commission s implementation ofthe Public Utilities Regulatory
Policies Act of 1978 ("PURP A"
COMPLAINT
10.
Idaho Power Company is insisting on contract provisions in its draft power purchase agreement
that obviate the requirement that it purchase all of the output ITom these projects at full avoided
cost rates when said output is less than 90% or more than 110% of projected output in the
contract. Said provisions are contrary to PURP A and this Commission s prior orders.
11.
Idaho Power Company is insisting on a provision in the draft contract called "shortfall energy
which would actually require the developer to pay Idaho Power for electricity not produced by
the project with no cap or ceiling on the price - both concepts are contrary to PURP A and this
Commission s prior orders.
12.
Contract negotiations have stalled because neither Idaho Power nor Mr. Lewandowski nor Mr.
Schroeder are willing to move off oftheir respective positions on these issues.
13.
Attached at Exhibit A is a copy of the offending draft power purchase agreement.
14.
Attached at Exhibit B is a copy of a letter dated April 9, 2004, from Idaho Power s counsel in
this matter informing Mr. Lewandowski and Mr. Schroeder that further negotiations would not
make progress.
PRAYER FOR RELEIEF
WHEREFORE Mr. Lewandowski and Mr. Schroeder respectfully pray for this
Commission s order requiring Idaho Power to enter into a power purchase agreement by which it
COMPLAINT
honors its legal obligation to purchase all ofthe output ITom these projects at full
administratively determined avoided cost rates.
RICHARDSON & O'LEARY PLLC
By:
.sL9
Peter J. Richardson, ISB #3195
Attorneys for the Industrial Customers
of Idaho Power
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 28th day of April 2004, I caused to be served a true and
correct copy of the foregoing Complaint by hand to the following:
Jean Jewell
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho
Barton L. Kline
Idaho Power Company
1221 West Idaho Street
Boise, Idaho
COMPLAINT
EXHIB
ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
j(LU&~ev.J5kr' /5r fvo~if'
TABLE OF CONTENTS
4CtJ C0()~
(i/oy
Article
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acc
Term and Operatio
Purchase and Sale
Purchase Price an
Environmental Attributes
Facility and Interconnection10 Disconnection Equipment11 Metering and Telemetry12 Records13 Protection14 Ope ations
:~
For Fo :. ~e\:U'S'SID 17 Land Rights18 Liability; Dedication19 Several Obligations20 Waiver21 Choice of Laws and Venue22 Disputes and Default23 Governmental Authorization24 Commission Order25 Successors and Assigns26 Modification27 Taxes28 Notices29 Additional Terms and Conditions30 Severability31 Counterparts32 Entire Agreement Signatures
TITLE
purposes only
Appendix A
Appendix B
Appendix C
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FilUM ENERGY SALES AGREEMENT
Project Number:
THIS AGREEMENT, entered into on this day of 2004 between
(Seller), and IDAHO POWER COMPANY, an Idaho
corporation (Idaho Power), hereinafter sometimes referred to collectively as "Parties" or individually as
Party.
WHEREAS, Seller will design, construct, own, maintain and operate an electric generation
facility; and
WHEREAS, Seller wishes to sell, and Idaho Power is willing to purchase, firm electric energy
produced by the Seller s Facility.
THEREFORE, In consideration of the mutual covenants and agreements hereinafter set forth, the
Parties agree as follows:
ARTICLE I: DE~ONS
Ofused~sioftdJp ~w8'ftl y
shall have the following meanings:
1.1 Annual Net Energy - Sum of the monthly Net Energy Amounts specified in paragraph 6.2 for a
single Contract Year.
1.2 Base Energy" - Monthly Net Energy less than 110% of the monthly Net Energy Amount as
specified in paragraph 6.2 of this Agreement.
1.3 Commission" - The Idaho Public Utilities Commission.
1.4 Contract Year" - The period commencing each calendar year on the same calendar date as the
Operation Date and ending 364 days thereafter.
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1.5 Designated Dispatch Facility" - Idaho Power s Control Area Operations Group, or any
subsequent group designated by Idaho Power.
1.6 Disconnection Equipment"- All equipment specified in Schedule 72 and the Generation
Interconnection Process and any additional equipment specified in Appendix B.
1.7 Facility" - That electric generation facility described in Appendix B of this Agreement.
1.8 First Energy Date" - The day commencing at 0001 hours, Mountain Time, following the day that
Seller has satisfied the requirements of Article IV and the Seller begins delivering energy to
Idaho Power s system at the Point of Delivery.
1.9
reliable generation
Generation Interconnection - Idaho Power ation interconnection application
and engineering review proc
interconnection in compliance with all applicable regulatory requirements, Prudent Electrical
Practices and national safety standards.
1.10 Interconnection Facilities - All equipment specified in Schedule 72 and the Generation
Interconnection Process and any additional equipment specified in Appendix B.
1.11 Losses - The loss of energy expressed in kilowatt hours (kWh) occurring as a result of the
transformation and transmission of energy between the Facility and the Point of Delivery. The
Loss calculation formula is specified in Appendix B of this Agreement.
1.12
energy. If the Dow Jones Mid-Columbia Index price is discontinued by the reporting agency, both
Parties will mutually agree upon a replacement index which is similar to the Dow Jones Mid-
Columbia Index. The selected replacement index will be consistent with other similar agreements
and a commonly used index by the electrical industry.
1.13 Material Breach" - A Default (paragraph 22.2.1) subject to paragraph 22.2.2.
1.14 Maximum Capacity Amount" - The maximum capacity (MW) of the Facility will be MW.
1.15 Metering Equipment"- All equipment specified in Schedule 72, the Generation Interconnection
Process, this Agreement and any additional equipment specified in Appendix B required to
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1.17
1.18
1.19
1.20
1.21
1.22
1.23
1.24
measure, record or telemeter power flows between the Seller s electric generation plant and Idaho
Power s system.
1.16 Net Energy - Electric energy produced by the Facility, less Station Use and less Losses,
expressed in kilowatt hours (kWh), which Seller commits to deliver to Idaho Power at the Point
of Delivery for the full term of the Agreement. Net Energy will never exceed the Maximum
Capacity Amount and will not include Optional Energy.
Operation Date - The day commencing at 0001 hours, Mountain Time, following the day that
all requirements of paragraph 5.2 have been completed.
Optional Energy" - Electric
e Point of Delivery that exceeds
, less Station Use, and less Losses,
expressed in kWh, which Sel
10,000 kWh in any single hour. Optional Energy will never exceed the Maximum Capacity
Amount.
Point of Delivery" - The location specified in Appendix B, where Idaho Power s and the
Seller s electrical facilities are interconnected.
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.
ati
:2iis setosfiifip ilpencliXo see;;"' amy
Schedule 72"- Idaho Power s Tariff No 101 , Schedule 72 or its successor schedules as
approved by the Commission.
Season - The three periods identified in Article VI.
Shortfall Energy - If the month's Net Energy is less than 90% of the monthly Net Energy
Amount as specified in paragraph 6.2 of this Agreement for the corresponding month, Shortfall
Energy will be the difference between 90% of the monthly Net Energy Amount same month'
actual Net Energy delivered to the Point of Delivery.
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1.25 Special Facilities - Additions or alterations of transmission and/or distribution lines and
transformers as described in Appendix B, Schedule 72 or the Generation Interconnection Process
required to safely interconnect the Seller s Facility to the Idaho Power system.
1.26 Station Use" - Electric energy that is used to operate equipment that is auxiliary or otherwise
related to the production of electricity by the facility.
1.27 Surplus Energy" - Net Energy delivered by the Seller to Idaho Power and accepted by Idaho
Power during the month which exceeds 110% of the monthly Net Energy Amount for the
corresponding month specified in paragraph 6.2 of this Agreement and all Net Energy which is
delivered by the Seller to Id
1.28 Total Cost of the Facility . ment and appurtenances.
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.
2.2 EDrtdediSQJs&Qlls purp ~S li.anl~eers,
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
3.1 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,
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durability, reliability, strength, capacity, adequacy or economic feasibility.
Qualifying Facility Status - Seller warrants that the Facility is a "Qualifying Facility," as that term
is used and defined in 18 CFR ~292.207. After initial qualification, 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: C E OF ENERGY
Prior to the First Energy Dat 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
operations to continue operations have been obtained from applicable federal, state or
local authorities, including, but not limited to, evidence of compliance with Subpart B, 18
CPR 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
i:~~jlsSlau:i1UiP.Q~S::Oiit~
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
ofthe American Bar Association Section of Business Law (1991).
1.3 Engineer s Certifications - Submit an executed Engineer s Certification of Design &
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Construction Adequacy and an Engineer s Certification of Operations and Maintenance
O&M") Policy as described in Commission Order No. 21690. These certificates will
be in the form specified in Appendix C but may be modified to the extent necessary to
recognize the different engineering disciplines providing the certificates.
1.4 Insurance - Submit written proof to Idaho Power of all insurance required in XV.
Interconnection - Provide written proof to Idaho Power that all Schedule 72 and
Generation Interconnection Process requirements have been completed.
1.6 Written Acceptance - Obtain written confirmation from Idaho Power that all conditions to
n confirmation shall not be
unreasonably withhe
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
(maximum of 20 years) Contract Years from the Operation Date.
Operation Date - The Operation Date may occur only after the Facility has achieved all of the
following:
F 0 i: dii2ii~sl~rpo se.se .QJllYer 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.
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ARTICLE VI: PURCHASE AND SALE OF NET ENERGY
Delivery and Acceptance of Net Energy - Except when either Party s performance is excused as
provided herein, Idaho Power will purchase and Seller will sell all of the Net Energy and
Optional Energy produced by the Facility and delivered by the Seller to the Point of Delivery that
does not exceed the Maximum Capacity Amount. All energy produced by the Seller s Facility
will be delivered to Idaho Power at the Point of Delivery as designated in Appendix B of this
Agreement and the rate of delivery will never exceed the Maximum Capacity Amount.
Net Energy Amounts - Seller intends to deliver Net Energy in the following monthly amounts:
Season
May
Season 2
July
August
November
December
xxxxx
XXXXX
XXXXX
XXXXX
Season 3
June
September
October
January
February
xxxxx
XXXXX
xxxxx
xxxxx
XXXXX
Fope e s 880 Sve(i) Rl yer
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 , 9 , 11 , 13th, 15th, 17 , and 19th Contract
Year
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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., 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:
NEA = Current Months Net Energy Amount (Paragraph 6.
RSH =s the Facility rgy deliveries were either
h 14.1 or 14.4.
Resulting formula being:
Adjusted Net Energy Amount =RSH
NEA X NEA
This Adjusted Net Energy Amount will be used in applicable Surplus Energy and Shortfall
Energy calculations for only the specific month in which Idaho Power was excused from
accepting the Seller s Net Energy or the Seller declared a Suspension of Energy.
Unless excused by an event of Force Majeure or by an adjustment as provided in paragraph 6.
Fo'faiCfioscuet siLfl1Y conUrear i s~st eCfI111east
ten
percent (10%) of the AnnU~Net Energy AmRt as sp'Rhed in paragraph 6.2 or a~ay
adjusted due to paragraph 6., shall constitute an event of default.
ARTICLE Vll: PURCHASE PRICE AND METHOD OF PAYMENT
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:
Year
2004
2005
Season 1 - (73.50 %)
Mills/kWh
33.
34.46
Season 3 - (100.00 %)
Mills/kWh
45.
46.
Season 2 - (120.00 %)
Mills/kWh
54.
56.
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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 66.
2021 68.
2022 69.
2023 52.85.71.49
2024 53.87.73.
2025 55.89.74.
lus Ener 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.
whichever is lower.
7.3 Shortfall Energy Price - For all Shortfall Energy, if the Market Energy Cost for the month in
which the Shortfall Energy occurs is less then the Base Energy Purchase Price for the same
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the Shortfall Energy Price will be the current month's Market Energy Cost less the Base Energy
Purchase Price.
7.4 Shortfall Energy Payment - The Shortfall Energy Payment amount is the Shortfall Energy
amount multiplied by the Shortfall Energy Price. The Shortfall Energy Payment will be withheld
from the current month's energy payment. If the current month's energy payment is less than the
Shortfall Energy Payment and the Optional Energy Payment, the Seller will make payment to
Idaho Power of the unpaid balance within 15 days of being notified of the outstanding balance.
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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.
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 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
Inc., 107 Idaho
blic 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
CPR ~292.303-308.
ARTICLE VIII: ENVIRONMENTAL ATTRIBUTES
As of the date of this Agreement, Idaho Power has pending before the Commission a Petition for
a Declaratory Order, IPC Case number IPC-04-02.Idaho Power is seeking a Commission
IriitDms: eM ~Wi:p~:o ses~:an! y
purchases electricity from a QF project. The final Order of the Commission in response to Idaho
Power s Petition will be applicable to this Agreement. The Seller reserves the right to cancel this
Agreement within 30 days after the date the Commission s final Order in IPC Case number IPC-
04-02 becomes final and non-appealable.The Seller s failure to provide cancellation
notification to Idaho Power within the above described time period will be deemed to be
acceptance by the Seller of the allocation of Environmental Attributes as included in the
Commissions final order.
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ARTICLE IX: FACILITY AND INTERCONNECTION
Design of Facility - Seller will design, construct, install, own, operate and maintain the Facility
and any Seller-owned Interconnection Facilities so as to allow safe and reliable generation and
delivery of Net Energy and Optional Energy to the Point of Delivery for the full term of the
Agreement.
9.2 Interconnection Facilities - Except as specifically provided for in this Agreement, the required
Interconnection Facilities will be in accordance with Schedule 72, the Generation Interconnection
Process and Appendix B. The Seller is responsible for all costs associated with this equipment as
allation costs and ongoing monthly
specified in Schedule 72 and ation Interco
initial costs incurred by Idab .fro
Idaho Power operations and maintenance expenses.
Process, including but not limited to
ARTICLE X: DISCONNECTION EQUIPMENT
10.Except as specifically provided for in this Agreement, the required Disconnection Equipment will
be in accordance with Schedule 72, the Generation Interconnection Process and Appendix B.
The Seller is responsible for all costs associated with this equipment as specified in Schedule 72
and the Generation Interconnection Process, including but not limited to initial costs incurred by
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ARTICLE XI: METERING AND TELEMETRY
11.1 Metering and Telemetry - Idaho Power shall, for the account of Seller, provide, install, and
maintain Metering Equipment to be located at a mutually agreed upon location to record and
measure power flows to Idaho Power in accordance with Schedule 72, Generation
Interconnection Process and Appendix B of this Agreement. The Metering Equipment will be of
the type required to measure, record and report the Facility s energy production in a manner to
provide Idaho Power adequate energy measurement data to administer this Agreement and to
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integrate this Facility s energy production into the Idaho Power electrical system. All Metering
Equipment and installation costs shall be borne by Seller, including costs incurred by Idaho
Power for inspecting and testing such equipment at reasonable intervals at Idaho Power s actual
cost of providing this Metering Equipment and services. The Metering Equipment shall be at the
location described in Appendix B of this Agreement. All meters used to determine the billing
hereunder shall be sealed and the seals shall be broken only by Idaho Power when the meters are
to be inspected, tested or adjusted.
11.2 Meter Inspection - Idaho Power shall inspect installations annually and test meters on the
applicable periodic test sche . stalled as specified in Appendix B of
this Agreement. If requeste e 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
correct t~t+ payments affecte4 by the inaccurate meter for the actual period d
uy?g which
SJIe ~11SrCtUS Sa QJl a lltpaCl SmnOJ1Je~ns
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 Seller s net electrical energy production to Idaho Power
Designated Dispatch Facility.
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12.
12.
13.
ARTICLE XII - RECORDS
Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate metering and related power production records, in a 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 metering and power production records
pertaining to the Seller s Facility.
Seller shall construct, opera d Seller-furnished Interconnection
Facilities in accordance with Schedule 72, the Generation Interconnection Process, Appendix B
of this Agreement, Prudent Electrical Practices, the National Electrical Code, the National
Electrical Safety Code and any other applicable local, state and federal codes.Seller
acknowledges receipt of the Generation Interconnection Process. If, in the reasonable opinion of
Idaho Power, Seller s operation of the Facility or Interconnection Facilities is unsafe or may
otherwise adversely affect Idaho Power s equipment, personnel or service to its customers, Idaho
Power may physically interrupt the flow of energy from the Facility as specified within Schedule
'tl1t~ZIiS~io:u:r
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of such interruption prior to its occurrence as provided in paragraph 14.8. Seller shall provide
and maintain adequate protective equipment sufficient to prevent damage to the Facility and
Seller-furnished Interconnection Facilities. In some cases, some of Seller s protective relays will
provide back-up protection for Idaho Power s facilities. In that event, Idaho Power will test such
relays annually and Seller will pay the actual cost of such annual testing.
ARTICLE XIV - OPERATIONS
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14.Emergency Conditions - Seller agrees that, in the event of and during a period of a shortage of
power on Idaho Power s system as declared by Idaho Power in its reasonable discretion or in the
event that the wholesale market prices for energy delivered to Idaho Power are higher than the
energy prices specified in Article VII herein, Seller shall, at Idaho Power s request, within the
limits of reasonable safety requirements as determined by Seller, 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 tified Emergency Condition will be
priced in accordance with p . ed by Idaho Power that market
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 parties prior to the deliveries of the additional energy.
14.Communications - Idaho Power and the Seller shall maintain appropriate operating
Em:1Iis~s ioitpurpo ses inonTy
~ili
14.Energy Acceptance
14.1 Idaho Power shall be excused from accepting and paying for Net Energy and/or Optional
Energy produced by the Facility and delivered to the Point of Delivery if it is prevented
from doing so by an event of force majeure, or if Idaho Power determines that
curtailment, interruption or reduction of Net Energy and/or Optional Energy deliveries is
necessary because of line construction or maintenance requirements, emergencies
electrical system operating conditions on its system or as otherwise required by Prudent
Electrical Practices. If, for reasons other than an event of force Majeure, Idaho Power
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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 If, in the reasonable opinion of Idaho Power, Seller s operation of the Facility or
Interconnection Facilities is unsafe or may otherwise adversely affect Idaho Power
equipment, personne
the flow of energy f
14.3.3 Under no circumstances will the Seller deliver Net Energy and/or Optional Energy from
the Facility in an amount that exceeds the Maximum Capacity Amount. Seller s failure
to limit deliveries to the Maximum Capacity Amount will be a Material Breach of this
Agreement.
14.4 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
F 0 ti:ar~r ~r Qn:reiiu:tPQ~:ifa~:4 0
below, temporarily suspend all deliveries of Net Energy to Idaho Power for a period of
not ~ess than 72 hours to correct the forced outage condition. The Sellers Declared
""..,.,---
Suspension of Energy 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 specifi~d in the written notification provided by the Seller. In the month(s) in
which the Declared Suspension of Energy occurred, the Net Energy Amount will be
adjusted as specified in paragraph 6.2.2.
14.4.2 If the Seller desires to declare a Suspension of Energy Deliveries as provided in
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paragraph 14.4., the Seller will notify the Designated Dispatch Facility by telephone.
The beginning hour of the Declared Suspension of Energy Deliveries will be at the
earliest the next full hour after making telephone contact with Idaho Power. The Seller
will, within 24 hours after the telephone contact, provide Idaho Power a written notice in
accordance with Article 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.
14.5 Voltage Levels - Seller, in accordance with Prudent Electrical Practices shall minimize voltage
fluctuations and maintain v aho Power. Idaho Power may, in
accordance with Prudent El dred 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.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.l~eUS ~Q D~
31 of
117i~s:1)lil~:::
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.
14.Maintenance Coordination - The Parties shall, to the extent practical, coordinate their respective
line and Facility maintenance schedules such that they occur simultaneously.
14.Contact Prior to Curtailment - Idaho Power will make a reasonable attempt to contact Seller prior
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15.
15.
to exercising its rights to curtail, interrupt or reduce deliveries from Seller for any event that will
be in duration of 24 hours or longer.Seller understands that in the case of emergency
circumstances, Idaho Power may not be able to provide notice to Seller prior to interruption
curtailment, or reduction of electrical energy deliveries to Idaho Power.
ARTICLE XV: INDEMNIFICATION AND INSURANCE
Indemnification - Each Party shall 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 thO
f;jU
maintenance of, or by failure of, any of such Party s works or facilities used in connection with
th of person or injury to property,
proximately caused by ruction, ownership, operation or
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
0 i:ais~~an:epiie ToW Q&e8:CQii!
y:'
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 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.
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15.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 Notify Idaho Power of Loss of Coverage - If the insurance coverage required by
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.
16.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, fIfes, lightning, epidemics, sabotage, or changes in law or regulation occurring after
the Operation Date, which, by the exercise of reasonable foresight such party could not
reasonably have been expected to avoid and by the exercise of due diligence, it shall be unable to
ox:arsciiSS10Jl~PiiipEO peITO~~QW~ u
;~:
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
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performed before such occurrence shall be excused as result of such
occurrence.
ARTICLE XVII: LAND RIGHTS
17.Seller to Provide Access - Seller hereby grants to Idaho Power for the term of this Agreement all
necessary rights-of-way and easements to install, operate, maintain, replace, and remove Idaho
Power s Metering Equipment, Interconnection Equipment, Disconnection Equipment, Protection
Equipment and other Special Facilities necessary or useful to this Agreement, including adequate
and continuing access rights arrants that it has procured sufficient
easements and rights-of-way vide Idaho Power with the access
described above. All documents granting such easements or rights-of-way shall be subject to
Idaho Power s approval and in recordable form.
17.2 Use of Public Rights-of-Way - The Parties agree that it is necessary to avoid the adverse
environmental and operating impacts that would occur as a result of duplicate electric lines being
constructed in close proximity. Therefore, subject to Idaho Power s compliance with paragraph
17.4, Seller agrees that should Seller seek and receive from any local, state or federal
QLajl~~an:ct :u mamQS~~:p' nlfu:ri
Seller of such public right-of-way shall be subordinate to any future use by Idaho Power of such
public right-of-way for construction and/or maintenance of electric distribution and transmission
facilities and Idaho Power may claim use of such public right-of-way for such purposes at any
time. Except as required by paragraph 17.4, Idaho Power shall not be required to compensate
Seller for exercising its rights under this paragraph 17.
17.3 Joint Use of Facilities - Subject to Idaho Power s compliance with paragraph 17.4, Idaho Power
may use and attach its distribution and/or transmission facilities to Seller s Interconnection
Facilities, may reconstruct Seller s Interconnection Facilities to accommodate Idaho Power
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17.4
usage or Idaho Power may construct its own distribution or transmission facilities along, over and
above any public right-of-way acquired from Seller pursuant to paragraph 17., attaching Seller
Interconnection Facilities to such newly constructed facilities. Except as required by paragraph
17.4, Idaho Power shall not be required to compensate Seller for exercising its rights under this
paragraph 17.3.
Conditions of Use - It is the intention of the Parties that the Seller be left in substantially the same
condition, both financially and electrically, as Seller existed prior to Idaho Power s exercising its
rights under this Article XVII. Therefore, the Parties agree that the exercise by Idaho Power of
any of the rights enumerated
f17.2
and hall: (1) comply with all applicable
laws, codes and Prudent Ele are the costs of installing, owning
and operating jointly used facilities and rights-of-way. If the Parties are unable to agree on the
method of apportioning these costs, the dispute will be submitted to the Commission for
resolution and the decision of the Commission will be binding on the Parties, and (3) shall
provide Seller with an interconnection to Idaho Power s system of equal capacity and durability
as existed prior to Idaho Power exercising its rights under this Article XVII.
ARTICLE XVIII: LIABILITY; DEDICATION
18.1 :S,thing in €\greement shall be&onstrued to create any duty to, any standard of
UJl
ith
Ol: tUl$tCiU S~1QJlt ~QSe. & uQJl one
. -
19.1
Party to the other under any provision of this Agreement shall constitute the dedication of that
Party s system or any portion thereof to the other Party or to the public or affect the status of
Idaho Power as an independent public utility corporation or Seller as an independent individual or
entity.
ARTICLE XIX: SEVERAL OBLIGATIONS
Except where specifically stated in this Agreement to be otherwise, the duties, obligations and
liabilities of the Parties are intended to be several and not joint or collective. Nothing contained
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in this Agreement shall ever be construed to create an association, trust, partnership or joint
venture or impose a trust or partnership duty, obligation or liability on or with regard to either
Party. Each Party shall be individually and severally liable for its own obligations under this
Agreement.
ARTICLE XX: WAIVER
20.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 respec
ARTICLE XXI: CHOICE OF LAWS AND VENUE
21.1 This Agreement shall be construed and interpreted in accordance with the laws of the State of
Idaho without reference to its choice of law provisions.
21.2 Venue for any litigation arising out of or related to this Agreement will lie in the District Court of
the Fourth Judicial District of Idaho in and for the County of Ada.
ARTICLE xxll: DISPUTES AND DEFAULT
22.qisputes related to Qr arising under this Agreement, including, but not.f~mited toQtr~JiLS~UeS.SltQtlo o\1t11USt . bQJ:lJe)':o the
Commission for resolution.
22.Notice of Default -
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
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22.
22.2.
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 22.2.1 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.
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.
22.3.
Breach and may only be cured by
Insurance - Evid
fre
Mili
Seller supplying evidence that the required insurance coverage has been replaced or
visions of paragraph 15.2. If Seller
fails to comply,
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
Ro! wg Ca Wii~pi1IPQ~.s~:Wl1 ~UriD
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 4.1.1 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.
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ARTICLE XXli: GOVERNMENTAL AUTHORIZATION
23.1 This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
23.Idaho Power may terminate this Agreement on sixty (60) days prior written notice if (1) existing
Idaho law is modified to allow persons or entities other than Idaho Power to sell electric capacity
or energy at retail in Idaho Power s exclusive service territory, and (2) such change in law results
in Idaho Power being unable to fully recover all costs associated with this Agreement.
24.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.
ARTICLE XXV: SUCCESSORS AND ASSIGNS
25.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
oi:aliCli ~sl5ii:.P1iiP5. ~eS:OAT~ ;~:
any party which Idaho Power may consolidate, or into which it may merge, or to which it may
conveyor transfer substantially all of its electric utility assets, shall automatically, without further
act, and without need of consent or approval by the Seller, succeed to all of Idaho Power s rights,
obligations and interests under this Agreement. This article shall not prevent a financing entity
with recorded or secured rights from exercising all rights and remedies available to it under law
or contract. Idaho Power shall have the right to be notified by the financing entity that it is
exercising such rights or remedies.
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26.
27.1
28.
ARTICLE XXVI: MODIFICATION
No modification to this Agreement shall be valid unless it is in writing and signed by both Parties
and subsequently approved by the Commission.
ARTICLE XXVll: TAXES
Each Party shall pay before delinquency all taxes and other governmental charges, which if failed
to be paid when due could result in a lien upon the Facility or the Interconnection Facilities.
All written notices under this llows and shall be considered
delivered when deposited in the U. S. Mail, fIrst-class postage prepaid, as follows:
To Seller:
To Idaho Power:Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
ARTICLE XXIX: ADDITIONAL TERMS AND CONDmONS
29.rmeedi~el1~S e
30.
n"urp6'S'e8!O 6niTY
reference:
Appendix A
Appendix B
Appendix C
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer s Certifications
ARTICLE XXX: SEVERABILITY
The invalidity or unenforceability of any term or provision of this Agreement shall not affect the
validity or enforceability of any other terms or provisions and this Agreement shall be construed
in all other respects as if the invalid or unenforceable term or provision were omitted.
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31.1
32.
Dated
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 subjec ereof.
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
or discussion yurposes only
John Prescott - Vice President, Power Supply
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
on the Idaho Power MeterThe Meter readings required
Equipment measuring the Facilities Net Energy and Optional Energy delivered to Idaho Power at the
Point of Delivery and/or any other required energy measurements to adequately administer this
Agreement.
or discussion purposes only
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Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
Month Year
Project Name Project Number:
Address Phone Number:
City State Zip
Meter Number:
Auxiliary
Service
End of Month kWh Meter Reading:
Beginning of Month kWh Meter:
Difference:
Times Meter Constant:Net Generation
kWh for the Month:
Metered Demand:
Breaker Opening RecordDate Time Meter Reason
Breaker Closing RecordDate Time Meter
llSSlOn
Breaker Opening 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)
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 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
Project Ident 'ect Number
. Approxima
Estimated day and time of project coming back online
Seller s Contact Information
24 Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
Project On-site Contact information
Telephone Number: 208-861-9830
or discussion pu oses only
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APPENDIX B
FACILITY AND POINT OF DELIVERY
PROJECT NO.
DESCRIPTION OF FACILITY
The Seller s Facility is described as:
LOCATION OF FACILITY
The Facility is located at:
SCHEDULED OPERATION DATE
Seller has selected , as the Scheduled Operation Date and as the First
Energy Date. In making these selections, Seller recognizes that to allow for an adequate testing
Ft (Ii) fci ~S€ti8'si~fM.l Pf)~8 ~t 6flI t least
thirty (30) days prior to the Operation Date. Idaho Power, based on the information supplied by
the Seller, will schedule its construction in accordance with Schedule 72 and the Generation
Interconnection Process.
POINT OF DELIVERY
Point of Delivery" means, unless otherwise agreed by both Parties, where Idaho Power s and the
Seller s electrical facilities are interconnected at:
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LOSSES
If the Idaho Power Metering equipment is capable of measuring the exact energy deliveries by
the Seller at the Point of Delivery, no Losses will be calculated for this Facility. If the Idaho
Power Metering is unable to measure the exact energy deliveries by the Seller at the Point of
Delivery, a Losses calculation will be established to measure the energy losses (kWh) between
the Seller s Facility and the Point of Delivery. This loss calculation will be initially set at 2% of
the kWh energy production recorded on the Facility generation metering equipment. At such
time as Seller provides Id uipment specifications (transformer
loss specifications, conduct . cal equipment between the Facility
and the Point of Delivery Idaho Power will configure a revised loss calculation formula to be
agreed to by both parties and used to calculate the kWh Losses for the remaining term of the
Agreement. If at anytime during the term of this Agreement, Idaho Power determines that the
loss calculation does not correctly reflect the actual kWh losses attributed to the electrical
equipment between the Facility and the Point of Delivery, Idaho Power may adjust the
calculation and retroactively adjust the previous months kWh loss calculations.
METERING AND TELEMETRY
F:6!O~ii&swp'on puiPQiel:Z~:
Telemetry equipment must be able to provide and record hourly energy deliveries to the Point of
Delivery and any other energy measurements required to administer this Agreement. These
specifications will include but not be limited to equipment specifications, equipment location
Idaho Power provided equipment, Seller provided equipment, and all costs associated with the
equipment, design and installation of the Idaho Power provided equipment.The entire
Generation Interconnection process, including but not limited to the equipment specifications
and requirements will become an integral part of this Agreement. Seller will arrange for and
make available at Seller s cost a telephone circuit(s) dedicated to Idaho Power s use terminating
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at the Idaho Power facilities. Idaho Power provided equipment will be owned and maintained
by Idaho Power, with total cost of purchase, installation, operation, and maintenance, including
administrative cost to be reimbursed to Idaho Power by the Seller. Payment of these costs will
be in accordance with Schedule 72 and the total metering cost will be included in the calculation
of the Monthly Operation and Maintenance Charges specified in Schedule 72.
SPECIAL FACILITIES
The Idaho Power Generation Interconnection process will determine the Special Facility
requirements for this Facility. These specifications will include but not be limited to equipment
specifications, equipment vided equipment, Seller provided
equipment, and all costs a sign and installation of the Idaho
Power provided equipment. The entire Generation Interconnection process, including but not
limited to the equipment specifications and requirements will become an integral part of this
Agreement. Idaho Power owned equipment will be maintained by Idaho Power, with total cost
of purchase, installation, operation, and maintenance, including administrative cost to be
reimbursed to Idaho Power by the Seller. Payment of these costs will be in accordance with
Schedule 72 and the total Special Facility cost will be included in the calculation of the Monthly
Operation and Maintenance Charges specified in Schedule 72.
8 R(ACTIV~~WER
iOrLo W~CllSrSlDe as. e~accnll )kuired
to be supplied by Idaho Power to the Seller, based upon information provided by the Seller. The
Generation Interconnection process will specify the equipment required on the Idaho Power
system to meet the Facility s reactive power requirements. These specifications will include but
not be limited to equipment specifications, equipment location, Idaho Power provided
equipment, Seller provided equipment, and all costs associated with the equipment, design and
installation of the Idaho Power provided equipment.The entire Generation Interconnection
process, including but not limited to the equipment specifications and requirements will become
an integral part of this Agreement. Idaho Power owned equipment will be maintained by Idaho
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Power, with total cost of purchase, installation, operation, and maintenance, including
administrative cost to be reimbursed to Idaho Power by the Seller. Payment of these costs will
be in accordance with Schedule 72 and the total reactive power cost will be included in the
calculation of the Monthly Operation and Maintenance Charges specified in Schedule 72.
DISCONNECTION EQUIPMENT
Disconnection Equipment is required to insure that the Seller s Facility will be disconnected
from Idaho Power s system in the event of (1) the Sellers delivery of energy exceeds the
Maximum Capacity Amount or (2) Idaho Power or the Seller require interruption or curtailment
Seller s Facility. The Id
of energy deliveries to Idah n either Idaho Power s system or the
ection process will determine the
Disconnection Equipment specifications and requirements for this Facility, this equipment is for
protection of the Idaho Power system and equipment only. These specifications will include but
not be limited to equipment specifications, equipment location, Idaho Power provided
equipment, Seller provided equipment, and all costs associated with the equipment, design and
installation of the Idaho Power provided equipment.Seller will install all Seller provided
equipment, control wire and conduit necessary for the operation of the Disconnection
Equipment. Through the Generation Interconnection process, Idaho Power will supply details
QLl~C:ii~ 1iaii:iiUi pri~~Qji!
y;::~
installation. The entire Generation Interconnection process, including but not limited to the
equipment specifications and requirements will become an integral part of this Agreement. Idaho
Power owned equipment will be maintained by Idaho Power, with total cost of purchase
installation, operation, and maintenance, including administrative cost to be reimbursed to Idaho
Power by the Seller. Payment of these costs will be in accordance with Schedule 72 and the
total Disconnection Equipment cost will be included in the calculation of the Monthly Operation
and Maintenance Charges specified in Schedule 72.
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COSTS
The Idaho Power Generation Interconnection process and this Agreement will identify all cost
for this Facility to interconnect to the Idaho Power system, including but not limited to the cost
of Metering equipment, Telemetry equipment, Special Facilities, Reactive Power, Disconnection
equipment, Protection equipment and Interconnection Equipment.As specified in the
Generation Interconnection process and in accordance with Schedule 72 and this Agreement the
Seller will reimburse Idaho Power for all costs associated with this equipment. In addition to the
equipment, installation and ed above, during the term of this
peration and maintenance charge
specified in Schedule 72 or its successor schedules(s). The monthly operations and maintenance
charge will begin on the first day of the month following the date which Idaho Power has
completed installation of the Idaho Power provided equipment and the interconnection
equipment is available for use by the Facility. The 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
F.w::dl&~P1~QJt:PJ:ii11Q~~~:o1ilSr.t ::
underpayment of the adjusted monthly operations and maintenance charge within sixty (60) days
of the determination of this amount.
SALVAGE
No later than sixty (60) days after the termination or expiration of this Agreement, Idaho Power
will prepare and forward to Seller an estimate of the remaining value of those Idaho Power
furnished Interconnection Facilities as required under Schedule 72, the Generation
Interconnection Process and/or described in this Agreement, less the cost of removal and transfer
to Idaho Power s nearest warehouse, if the Interconnection Facilities will be removed. If Seller
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elects not to obtain ownership of the Interconnection Facilities but instead wishes that Idaho
Power reimburse the Seller for said Facilities the Seller may invoice Idaho Power for the net
salvage value as estimated by Idaho Power and Idaho Power shall pay such amount to Seller
within thirty (30) days after receipt of the invoice. Seller shall have the right to offset the
invoice amount against any present or future payments due Idaho Power
For discussion purposes only
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APPENDIX C
ENGINEER'S CERTIFICATION
OPERA nONS & MAINTENANCE POLICY
The undersigned behalf himself and
, hereinafter collectively referred to as "Engineer
That Engineer is a Licensed ding in the State of Idaho.
hereby states and certifies to the Sell
That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement " between
Idaho Power Buyer and Seller dated
That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No.and is hereinafter referred to as
the "Project."
That the Project,which commonly known the
sc u S S 1 0 itiiiiiiOs" e s 'Only
That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to Idaho Power for a twenty (20) year period.
That Engineer has substantial experience in the design, construction and operation of electric
power plants of the same type as this Project.
That Engineer has no economic relationship to the Design Engineer of this Project.
That Engineer has reviewed and/or supervised the review of the Policy for Operation and
Maintenance ("O&M") for this Project and it is his professional opinion that, provided said Project has
been designed and built to appropriate standards, adherence to said O&M Policy will result in the
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Project's producing at or near the design electrical output , efficiency and plant factor for a twenty (20)
year period.
That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement
is relying on Engineer s representations and opinions contained in this Statement.
10.That Engineer certifies that the above statements are complete, true and accurate to the best of his
knowledge and therefore sets his hand and seal below.
(P.E. Stamp)
Date
urposes onlylSCUSSlon
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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
That Engineer has reviewe
Idaho Power Buyer and
tanding in the State of Idaho.
hereinafter "Agreement " between
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
Proj ect" .
That the Project which commonly known
the
:Oj
1lOt:n, pllU ~e Srniolll energy
to Idaho Power for a twenty (20) year period.
That Engineer has substantial experience in the design, construction and operation of electric
power plants of the same type as this Project.
That Engineer has no economic relationship to the Design Engineer of this Project.
That Engineer has made a physical inspection of said Project, its operations and maintenance
records since the last previous certified inspection. It is Engineer s professional opinion, based on the
Project's appearance , that its ongoing O&M has been substantially in accordance with said O&M Policy;
that it is in reasonably good operating condition; and that if adherence to said O&M Policy continues, the
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Project will continue producing at or near its design electrical output, efficiency and plant factor forthe
remammg years of the Agreement.
That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement
is relying on Engineer s representations and opinions contained in this Statement.
10.That Engineer certifies that the above statements are complete, true and accurate to the best of his
knowledge and therefore sets his hand and seal below.
(P.E. Stamp)
Date
For discussion purposes only
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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
That Engineer has re
in good standing in the State of Idaho.
greement, hereinafter " Agreement" ,
between Idaho Power
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 commonly known the
Project, is located in Section , Township
Range , Boise Meridian County, Idaho.
5. Forndis~i'O~ge8"'oolytrica1
energy to Idaho Power for a () 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 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 system, Seller
furnished Interconnection Facilities and other Project facilities and equipment.
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That the Project has been constructed in accordance with said plans and specifications, all
applicable codes and consistent with Prudent Electrical 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 Agreement 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
12.That Engineer certifi 17v complete, true and accurate to the
opinions contained in this Statement.
best of his knowledge and therefore sets his hand and seal below.
(P.E. Stamp)
or discussion purposes only
Date
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EXHIB
IDAHO POWER COMPANY
PO. BOX 70
BOISE, IDAHO 83707
BARTON L. KLINE
Senior Attorney
An IDACORP Company
April 9 , 2004
/ .
Peter J. Richardson
Richardson & O'Leary
O. Box 1849
Eagle, 10 83616
Re:Lewandowski and Schroeder Wind Farm Proposals
Dear Peter:
This letter is written in response to your letter dated March 23, 2004 in
which you advise Idaho Power that your clients are unwilling to accept the contract
offered by Idaho Power on March 3 of this year. That is unfortunate because Idaho
Power genuinely believes that the contract structure it has proposed would permit a
wind generation resource , a resource that is inherently intermittent in nature , to receive
firm energy prices under very flexible contract terms.
I should note that your March 23, 2004 letter criticizes the provisions of
Section 14.1 "Emergency Conditions" as being unfair. As you may recall , at our
meeting Idaho Power agreed that Section 14.1 could be removed because a wind
resource, by its very nature, cannot provide energy on demand.
In conclusion , Idaho Power is certainly willing to continue to negotiate with
your clients. However, unless there is some recognition on the part of your clients that
the purchase prices for wind generated energy need to reflect the intermittent nature of
the resource , it is unlikely that much progress will be made.
fj
Barton L. Kline
BLK:jb
Telephone [phone], Fax [phone] E-mail BKlinelfYidahopower.com