HomeMy WebLinkAbout20040702Application.pdfMONICA MOEN , ISB # 5734
BARTON KLINE , ISB # 1526
Idaho Power Company
1221 West Idaho Street
P. O. Box 70
Boise, Idaho 83707
Telephone: (208) 388-2692
FAX Telephone: (208) 388-6936
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iL)H iiLi j Uii; iL
UTILITiES COr1":fISS1ON
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FbR APPROVAL)
OF AN AGREEMENT FOR ELECTRIC
SERVICE BETWEEN IDAHO POWER
COMPANY AND THE J.R. SIMPLOT COMPANY
CASE NO. IPC-04-LZ-
APPLICATION
COMES NOW Idaho Power Company ("Idaho Power" or th~ "Company ) and
pursuant to RP 52, hereby applies for an Idaho Public Utilities Commission ("IPUC" or the
Commission ) Order approving an Agreement for Electric Service between Idaho Power
Company and the J.R. Simplot Company ("Simplot") dated July 29, 2004 (the "2004
Agreement"
This Application is based on the following:
The J.R. Simplot Company operates a plant for the production of fertilizer
near Pocatello , Idaho (the "Pocatello Facility
).
Pursuant to an Agreement for Supply of
Power and Energy between Idaho Power and the J.R. Simplot Company dated August 27
1973 (the "1973 Agreement"), attached hereto as Attachment 1 , Idaho Power supplies
APPLICATION - PAGE
electric service to Simplot's Pocatello Facility in accordance with the rates and charges set
out in Tariff Schedule 29 and its successor schedules.1 Since the 1973 Agreement was
last renewed , Idaho Power has revised and updated its contracts for Special Contract
customers like Simplot.
II.
In accordance with Paragraph 1.1 of the 1973 Agreement, Idaho Power
timely notified Simplot in writing of Idaho Power s intent to terminate the 1973 Agreement
effective June 30, 2004.
III.
Pursuant to IPUC Order No. 29535 dated June 28, 2004, the Commission
granted Idaho Power s request to extend the termination date of the 1973 Agreement, as
amended, to the earlier of either August 29, 2004 or to a date on which the Commission
approves a new agreement between the parties.
IV.
The 2004 Agreement between Idaho Power and Simplot with the revised
Schedule 29 is attached hereto as Attachment 2.
Idaho Power and Simplot have entered into the 2004 Agreement in which
Idaho Power agrees to furnish , and Simplot agrees to purchase, 25,000 kilowatts of electric
power and energy on a monthly basis. Section 6.1 of the 2004 Agreement permits Simplot
to increase the monthly demand to a maximum of 38,000 kilowatts upon prior written notice
to the Company. Under the 1973 Agreement, as amended, Idaho Power agrees to supply
and Simplot agrees to purchase, up to 38 000 kilowatts. In most respects, the 2004
1 The August 27, 1973 Agreement was amended by the parties on December 2, 1974 pursuant to IPUC
Order No. 11694; by Letter Agreement dated November 25, 1975; and by an amendatory agreement
dated June 23, 1982.
APPLICATION - PAGE 2
Agreement is similar to the Special Contract with Micron Technology which the
Commission approved on November 20, 1995 in Order No. 26238. The unique provisions
of the 2004 Agreement are described below.
VI.
Section 8.1 of the 2004 Agreement establishes that the rates and charges for
electrical power, energy and other services provided by the Company to the Pocatello
Facility will be determined in accordance with the sum of the components of Tariff
Schedule 29 and its successor schedules. The monthly charges under the 1973
Agreement include a Demand Charge, an Energy Charge and a Facilities Charge. The
monthly charges under the 2004 Agreement include these same three charges plus a
Contract Demand Charge. The individual component charges for the 2004 Agreement
were derived by first establishing the charges utilizing the 2003 normalized test year
revenues and usage for Simplot from Case No. IPC-03-13 and by adjusting the charges
on a uniform percentage basis to derive the revenue requirement authorized for Simplot
Commission Order No. 29505 in Case No. IPC-03-13. The worksheets illustrating the
derivation of the component charges are attached hereto as Attachment 3.
VII.
All transmission and distribution facilities necessary for the delivery of power
and energy to the Pocatello Facility are installed , owned and operated by Idaho Power.
However, Section 7 of the 2004 Agreement permits the parties to enter into separate
agreements to provide any additional transmission and/or substation facilities that may be
required to provide electric service to the Pocatello Facility. Section 7.2 of the 2004
Agreement sets forth the monthly Facilities Charge that Simplot agrees to pay for the use
of the Company s distribution facilities. Under the 2004 Agreement, the monthly Facilities
Charge remains unchanged at 1.70/0 per month.
APPLICATION - PAGE 3
VIII.
If approved by the Commission, the 2004 Agreement would remain in effect
for five years, through June 30, 2009 , and would automatically renew thereafter until either
party to the 2004 Agreement terminates said Agreement in accordance with the Agreement
terms and provisions. The effective date of any termination cannot be less than twelve
months after the date of delivery of the termination notice.
IX.
Enclosed with this Application are an original and seven copies of First
Revised Sheet No. 29-1 as well as a copy of Sheet No. 29-1 in legislative format.
Service of pleadings , exhibits, orders and other documents relating to this
proceeding should be served on the following:
Monica B. Moen, Attorney II
Barton L. Kline, Senior Attorney
Idaho Power Company
O. Box 70
Boise, Idaho 83707
John R. Gale
, Regulatory Affairs
Idaho Power Company
O. Box 70
Boise , Idaho 83707
NOW , THEREFORE , based on the foregoing, Idaho Power Company hereby
requests that the Commission issue its Order approving the 2004 Agreement for Electric
Service Between Idaho Power Company and the J.R. Simplot Company.
Respectfully submitted this t4vIL day of July 2004.f8~
MONICA B. MOEN
Attorney for Idaho Power Company
APPLICATION - PAGE 4
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the day of July 2004, I served a true and
correct copy of the within and foregoing APPLICATION upon the following named parties
by the method indicated below, and addressed to the following:
David Hawk
Scott Pasley
J. R. Simplot Company
O. Box 27
Boise, ID 83707
Hand Delivered
S. Mail
Overnight Mail
FAX
fB.
MONICA B. MOEN
APPLICATION - PAGE 5
ATTACHMENT
AGREEMENT FOR SUPPLY OF POWER AND ENERGY
J R S IMP LOT CaMP ANY
Pocate11o, Idaho
IDAHO POWER COMPANY
THIS AGREEMENT, Made and entered into the
;(, ,
day, of
/1#)JII,C;t-/11v by and between J R SIMPLOT COMPANY, an Idaho
company opera ting a plant for the production of ferti izer near
Pocate11o , Idaho, hereinafter referred to as "Customer " and
IDAHO POWER COMPANY, an electric utility authorized to do business
in the state of Idaho hereinafter referred to as "Company
WHEREAS" J R Simp1ot Company has pioneered the use of
southern Idaho ' s phosphate rock depos its and for many years has
operated a plant near Pocate11o , Idaho , processing phosphate rock
in order to manufacture phosphate fertilizers; and J R Simp1ot
Company has installed an ammonia plant for the production of various
grades of ammonium phosphate, fertilizer, which plant requires the
use of increasingly: large amounts of power in order to process
the phosphate rock; and
WHEREAS ' the continued growth and expansion of this plant
and the use and development of the phosphate rock deposits of
southern Idaho are of vital importance to the growth and prosperity
of the economy of the State of Idaho and the establishment of an
industrial rate for electric power supplied to this type of business
will materially aid and assist the economy of Idaho; and
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WHEREAS, the Idaho Power Company has developed a large
industrial rate for customers whose uses will be in the neighbor-
hood of 15 , 000 KW or more and are engaged , in the State of Idaho
in mining, milling, smelting, refining or process ing, where such
delivery can be made from the Company s existing 138 KV transmission
lines without requiring additional expense for facilities supplied
by the Company; and
WHEREAS, the load of the J R implot Company at its plant
near pocatello will meet these requirements , Slnce this load will
be used in process ing, delivery can be made at the Company I S exist-
ing Don Substation wi thout additional expense to the Company and
the rate will aid in developing and fostering the economy of Idaho;
and
WHEREAS , the parties hereto des ire to set forth and esta-
blish the terms and conditions under which power will be available
to Cus tomer ;
NOW , THEREFORE, in cons ideration of the premises and the
mutual benefits from the covenants hereinafter set forth , the
parties hereby agree as follows:
Article I - Term of Agreement
The original term of this agreement shall be for a period
beginning on the date of initial service and ending June 30 , 1983
which term shall be automatically renewed and extended for an
additional period of five (5) years , and from year to year thereafter
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unless and until either party shall notify the other party
writing not less than twelve (12) months prior to any such expira~
tion date of its intention to terminate this agreement , subject to
the provisions of paragraph 5.
The date of initial service under this agreement shall
be the first day of the month subsequent to the date of this agree-
men t
Article II - Power to be SuEPlied
The Customer agrees to purchase, recei ve and pay for , and
the Company agrees to supply, all electric service required by
Customer for its fertilizer manufacturing operations near Pocate1lo
Idaho such power and energy, up to the amount of 25 000 kilowatts
shall be supplied and paid for at the rate set forth in paragraph
it being agreed that when the Customer I s demand exceeds such
amount it is the' intention of the parties that new and superseding
rates will be agreed upon , applicable to Customer I s load and ser-
vice as then required.
The Contract Amount of this agreement for each month shall
be the maximum demand (kilowatts) of power taken by Customer in
any clock half-hour interval during the calendar month but not
less than 15 , 000 KW.The Contract Amount for the expired term of
this agree~ent shall be the maximum Contract Amount established
any month ~ubsequent to the date of initial service under this
agreement.
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Article III - Facilities to be Provided
3. 1 Power and energy ,to be supplied hereunder by the Company
is av~ilable to the Customer at 12 500 volts at the company ' s Don
Substation 'near Pocatello , Idaho , without additional investment
by the Company.All facilities including switching, transformation
regulation and protective devices necessary for the delivery of
power and energy at that point are installed.
The Customer requests the Company and Company is agreeable
to install , own , operate, and maintain the facilities necessary
to deliver the power and energy from the Don Substation to the
Customer I s plant at 12 500 volts and the transformation equipment
required by Customer I s utilization equipment.Customer agrees to
pay the cost of such fac i li ties and equipment in accordance with
the provisions of paragraphs 5., 5.4 and 5., infra.Material
and labor required beyond the secondary terminals of transformers
shall be installed , owned , operated , maintained , and paid for by
Customer.It is understood and agreed that all the work performed
by the Company under this paragraph shall be "in accordance with
all local and state rules and regulations in respect to construc-
tion of said facilities , and the equipment used shall be standard
items in the Company I s system.
3. 3 It is understood and agreed that the facilities required
by Customer may vary from time to time , and the company ' s investment
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In these facilities upon which charges herein shall be based
, .
shall
be determined in accordance with the Company I s normal bookkeeping
system.The Customer shall be notified of any change in equipment
or investment , at the earliest practical date subsequent to any
change in such equipment or investment , by letter from the company
to Customer , which letter or letters of notification shall comprise
Exhibi t A and shall be a part of this agreement , and each such letter
shall show the net investment incurred by the Company in facilities
required to deliver power and energy from the Don Substation to
the Customer ' s plant.
The Customer will grant the Company easements which shall
be in accordance wi th the form of easement attached hereto
Exhibit In the event that the Company is required , pursuant to
the provis ions of paragraph 5.4 hereinafter , to remove or change
its facilitieE , the Company will release the easement covering
said facilities in exchange for a new easement to be granted by
the Cus tomer .Upon the termination of this agreement or any re-
newals thereof , the Company, upon request of the Customer , shall
release the easements granted to it pursuant to this agreement.
Any facili ties owned or installed under paragraphs 3.2 and 3.
supra , by Company pursuant hereto sha 11 be and rema in the property
of the Company, notwi thstanding that the same may have been affixed
to the premises , and the Company shall have a reasonable time after
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e~piration of this agreement or any renewal thereof to r~move its
facilities so installed.
Article IV - Service Specifications
The electric power supplied under this agreement shall be
in the form of three-phase , al ternating current at a frequency of
approximately 60 cycles per second , and at a nominal phase to
phase potential of approximately 12 500 volts except under emergency
condi tions.
The point of delivery for power supplied hereunder shall
be on the 12 , 500 vol t s ide of the Company I s Don Substation located
near Pocate1lo , Idaho.
The Company will provide suitable metering equipment for
obtaining measurements required in connection with settlements
under this agreement.Company shall , at its own expense , test
such meter ing equipment once in each ca lendar year.
Article V - Charges
All electric power and energy, up to the amount herein-
above specified , shall be supplied and paid for at the company
Pocatello office in accordance with the following monthly rate:
(a)Demand Charge -
$1.90 per KW of Billing Demand
(b)Energy Charge -
17 mills per KWH for all e~ergy
(c )'
(d),
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Billing Demand
The Billing Demand shall be the Contract Amount
of power for the current month established
accordance with paragraph 2.
Tax Adjus tment Charge -, I f, after the date of this agreement , any new Dr
increased tax or taxes (other than income taxes
and taxes based on income) payable by Company
are impos ed upon revenues rece i ved from Cus tomer
hereunder , or upon power or energy sold to Customer
hereunder , or upon power or energy generated for
supply of Customer hereunder , Customer shall pay,
in addition to the charges hereinabove specified
an ~mount sufficient to cover any such taxes pay-
able 'by Company.
The minimum monthly charge shall be the amount computed
accordance with paragraph 5.1 but not less than $31 650 for any month
during the effective term of this agreement.
Power factor correcti ve apparatus or equipment necessary
to maintain at all times as near unity power factor as possible
shall be provided by Customer; however in event Customer I s power
factor is less than . 95 lagging, the Company shall have the right
and may elect to install additional power factor corrective equlp-
ment in accordance wi th and under the provis ions of paragraph 3.
hereof.
In consideration for the facilities installed by the Company
in accordance wi th Article III, Customer shall pay to Company each
month one and one-quarter percent (l~%) of the total cost to the
Company as shown in the last letter submi tted by Company to Customer
in Exhibit A of this agreement.In the event it becomes necessary
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to remove the facilities installed by the Company as provided by
Article III or reinstall or change the facilities , the Customer
shall pay to Company the "nonsalvable cost" of such removal
reinstallation or change.Nonsalvable cost as used herein
comprised of the total cost of material , labor and overheads of
installing the facilities , less the difference between the salvable
cost of material removed and the removal labor cost including
appropriate overhead costs.
In the event Customer terminates this agreement as pro-
vided in paragraph 1,1 and the facilities provided in paragraphs
2 and 3.3 are no longer required , Customer shall pay to Company
the total installed cost of said facilities less depreciation
accumulated if any, and , less the difference between the salvage
value and the removal cost including appropriate overhead costs.
When due to causes beyond Customer ' s control , as a resul
of acts of God , or the public enemy, fire , flood , war , govern-
ment action , accident , strikes or labor disputes , Customer
prevented from utilizing power requirements under normal operat-
ing conditions for an emergency period of 36 consecutive hours
or longer , Company agrees to wa ive payment (prorated for partia
months) of the minimum monthly charge specified under Section 5.
of this agreement; provided however , such waiver shall not exceed
an aggregate total of 30 days in any consecutive 12-month period
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due to strikes or labor disputes in Customer I s plant.Customer
agrees to exercise due diligence to remove any such cause or
condi tion wi th all reasonable dispatch.
Article VI - Liability
Each party will indemnify and save harmless the other party
against loss , damage or liability, exclusive of costs and attorneys
fees , resulting from claims asserted by third. persons against either
or both parties to this agreement on account of injury or death to
persons or damage or destruction of property occurring on such
(indemnifying) party s side of the aforesaid point of delivery,
unless such injury or damage shall have resulted from the sole
negligence of the other party; provided however , that each party
shall be solely responsible for claims of and payments to its
employes and agents for injuries occurring in connection with their
employment or arising out of any workmen I s compensation law.
Article VII - Waivers
7 , 1 Any waiver at any time by either party of a right with
respect to any matter arising under this agreement , or any failure
to gi ve any notice provided for hereunder , shall not be deemed to
be a waiver with respect to any subsequent matter , nor as the
establishment of or consent to any practice under this agreement
or an interpretation of any term or provis ion hereof.
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Article VIII - Successors and Assigns
This agreement shall inure to the benefit of and be binding
upon the successors in interest , assigns and legal representatives
of Customer and Company.
Article IX - Commiss ion Jurisdiction
This agreement the rates , terms and provisions herein
set forth , and the respective rights and obligations of the
parties hereunder , shall be subject to the Company ' s standard
Rules and Regulations as now or hereafter in effect and on file
with the Public utilities Commission of Idaho, copy of which is
attached hereto and made a part hereof, and to the jurisdiction
and regulatory authority of the Idaho Public utilities Commiss ion
and the laws of the State of Idaho.
Article X - Termination of Existing Agreement
10.The agreement between the parties , dated March 3 1964
is hereby terminated on the date of initial service set forth
in paragraph 1.2 of this agreement; provided however , this para-
graph 10.1 shall not relieve the Customer from payments pursuant
to sa id agreement.
IN WITNESS WHEREOF, the parties have executed this
agreement by their respecti ve proper officers , thereunto duly
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authorized , on the day and year first hereinabove written.
(CORPORATE SEAL)
(CORPORATE SEAL)
ATTEsrr :
Secretary
J R SIMPLOT COMPANY'
resident
IDAHO POWER COMP ANY
By
~I'L_Pres ident
SNAKE RIVER
IDA.HO POVVE R COMPA.NY-
BOX 70 BOISE IDAHO 83721
November 25, 1975
HYDRO POWER
ROBERT J. O'CONNOR
Senior Vice President
Administration
J R S implot company
Pocatello, Idaho
Gentlemen:
The Agreement for Supply of Power and Energy between
J R Simp1ot Company and Idaho Power Company, dated August 27
1973 , as amended December 2 , 1974 per IPUC Order No 11694
provides for delivery of up to 25,000 kilowatts of electric
service to your fertilizer ~lant facilities near Pocatello
Idaho , with a minimum monthly payment for demand and energy
of $35 700.
It is my understanding that you now desire to amend the
Agreement to provide up to 38 000 kilowatts of power and energy
to serve your expanded fertilizer manufacturing facilities.
Under the terms of paragraph 2.1 of the above Agreement
the Company is willing to amend such Agreement , as follows:
(1) Paragraph 2.1 wi 11 be amended to read II 38,000
kilowatts " in lieu of 25 000 kilowatts.
(2) paragraph 5.2 wi 11 be amended to read "$48 000
in lieu of $35 700.
If you approve of the foregoing amendments to the August 27
1973 Agreement , as amended , please indicate your acceptance in
the space provided below , retain one copy of this Letter Agree-
ment and return three copies for our files and use in filing
with the Idaho Public utilities Commission.
Very tru 1y yours
The above Letter Agreement read
understood and agreed to
~~~
, 1975.
II"
~---""-,
J R S IMPLOT COMPANY
By
C ~~
~----
Its
~~, ~~
AMENDMENT TO AGREEMENT DATED AUGUST 27 , 1973 FOR SUPPLY
OF POWER AND ENERGY BETWEEN IDAHO POWER COMPANY
AND J R SIMPLOT COMPANY
Simp lot Company and Idaho Power Company, parties to a certain
Agreement for Supp ly of Power and Energy " made and entered into on the 27th
day of August , 1973 , as amended by Letter Agreement dated November 25 , 1975 , in
cons i de rat i on of the promi ses and mutua 1 covenants conta i ned here; n , and for
other good and valuable consideration , do now agree , subject to approval by the
Idaho Public Utilities Commission , to amend that Agreement as follows:
Paragraph 2., as amended by Letter Agreement dated November 25
1975 , will read as follows:
The Customer agrees to purchase , receive and pay for
and the Company agrees to supp ly, all e ectri c servi ce requi red
Customer for its ferti 1 i zer manufacturi ng operat ions near
Pocate 110 , Idaho such power and energy, up to the amount of
000 kilowatts , shall be supplied and paid for at the rate set
forth in Article V ~ Charges.
A new paragraph 5.shall be added to the Agreement whi ch reads
as follows:
The rates set forth in this agreement , as amended by
IPUC Tariff No 23 Issued February 8 , 1982 , per IPUC Order
17070 , effective February 9 , 1982 , are subject to the continuing
jurisdiction of the Idaho Public Utilities Commission.The rates
under this agreement are subject to change and revision by order
of the Commission upon a finding, suppor~ed by substantial compe-
tent evidence , that such rate change or revision is just , fair
reasonable , sufficient . nonpreferential and nondiscriminatory,
is the part i es I intent i on by thi s provi s ion that the rate maki
standards to be used in maki ng any revi si ons or changes i n rates
and the judicial review of any revisions or changes in rates , will
be the same standards that are applicable to Idaho intrastate
tariff rates,
All other terms and conditions of this Agreement shall remain intact
and in fu 11 force and effect , it be i ng the intention of the parties hereto
that , except as is set forth in paragraph 5,. as to rates only, J R Simplot
Company sha 11 cont i nue to recei ve servi ce as a speci a 1 contract customer of
Idaho Power Company under the terms and condi t ions of thi s Agreement as
amended.
Thi s amendatory agreement shall become effective upon approval by the
Idaho Public Utilities Commission.
IN WITNESS WHEREOF , the part i es have caused thi s amendatory agreement
to be executed thi s ~~.,.t, day of June . 1982.
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IDAHO POWER COMPANY
(CORPORATE SEAL)
ATTEST:
By ,1.: -
Ch i rman of the Board and
ief Executive Officer
J R SIMP LOT COMPANY
(CORPORATE SEAL)
ATTEST:
By
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Its ~1' r.
iZ,
.~
. A at ad
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ATTACHMENT 2
AGREEMENT FOR ELECTRIC SERVICE
BETWEEN
IDAHO POWER COMPANY
AND
J. R. SIMPLOT COMPANY
THIS AGREEMENT FOR ELECTRIC SERVICE ("Agreement") is executed on
June 29, 2004 by J. R. SIMPLOT COMPANY , a Nevada Corporation ("Simplot") and
IDAHO POWER COMPANY, an Idaho Corporation ("Idaho Power
).
The entities are referred to
individually as the "Party" and collectively as the "Parties In consideration of the mutual
covenants hereinafter set forth , the Parties hereby agree as follows:
SECTION 1 - PRIOR AGREEMENT
This Agreement replaces the Agreement for Supply of Power and Energy
between Simplot and Idaho Power dated August 27 , 1973, as amended by Letter Agreement
dated November 25, 1975, and as further amended by the Amendatory Agreement dated June
, 1982.
SECTION 2 - DEFINITIONS
Billing Demand" shall mean the kilowatts supplied to the Simplot Facility
during the coincident 30-consecutive-minute period of maximum use during the monthly billing
period as measured by the metering equipment located at the Point of Delivery.
Commission" shall mean the Idaho Public Utilities Commission or its
successor agency.
Contract Demand" shall mean the monthly kilowatts Idaho Power has
agreed to make available to the Simplot Facility pursuant to this Agreement.
Page
2.4 Distribution Facilities" shall mean all facilities which are reasonably
required by Prudent Electrical Practices and the National Electric Safety Code to interconnect
and deliver electrical power and energy to the Simplot Facility from the Don Substation
including I but not limited to, transformation equipment.
Excess Demand" shall mean Billing Demand in excess of the Contract
Demand.
Prudent Electrical Practices" shall mean those practices , methods and
equipment that are commonly and ordinarily used in electrical engineering and utility operation
to operate electrical equipment and deliver electric power and energy with safety, dependability,
efficiency and economy.
Schedule 29" shall mean the Simplot tariff schedule of rates and charges
or its successor schedules.
Simplot Facility" shall mean the Simplot processing complex located near
Pocatello, Idaho.
SECTION 3 - TERM OF AGREEMENT
This Agreement shall remain in effect through June 30, 2009, and will be
automatically renewed thereafter until either Simplot or Idaho Power terminates this Agreement
as provided in Paragraph 4.
SECTION 4 - TERMINATION
Notice of Termination:After June 30, 2008, either Party to this
Agreement shall have the right to terminate this Agreement by delivering written notice of
termination to the other Party. The effective date of termination will be specified in the
termination notice but such effective date cannot be earlier than twelve (12) months after the
Page 2
date of the delivery of the notice of termination. If both Parties give notice of termination, the
earliest effective date will prevail.
Termination Charaes If this Agreement is terminated, Simplot shall
reimburse Idaho Power for Idaho Power s costs associated with the termination ("Termination
Charges
).
Termination Charges shall be limited to the net book value (original cost less
depreciation) of the Distribution Facilities (as set forth in Exhibit A), plus the actual cost of the
removal and transport to storage of surplus Distribution Facilities , if any, less a credit for any
residual value of the surplus Distribution Facilities. Any valid claims hereunder which Simplot
may have against Idaho Power and any credits due under the terms of this Agreement and not
otherwise recovered by or credited to Simplot shall also be deducted from the Termination
Charges. Subsequent to giving or receiving a termination notice as described in Paragraph 4.
Idaho Power will invoice Simplot for any Termination Charges. Termination Charges shall be
due and payable within fifteen (15) days of Simplot's receipt of the invoice.
SECTION 5 - SERVICES TO BE PROVIDED
Supply Obliaation In accordance with Prudent Electrical Practices and
the provisions of this Agreement, Idaho Power will furnish Simplot'total requirements for
electric power and energy at the Simplot Facility. Simplot will not resell any portion of the power
and energy furnished under this Agreement.
Point of Deliverv: The point of delivery for power supplied hereunder
shall be on the 12 500 volt side of Idaho Power s Don Substation located near Pocatello, Idaho.
Description of Electric Service: Idaho Power shall supply three-phase, 60
HZ alternating current at nominal 12 500 volts , with a maximum steady state variation of plus or
minus five percent (50/0) under normal system conditions. Consistent with Prudent Electrical
Practices , Idaho Power will operate within the capability of its existing system to minimize
Page 3
voltage level fluctuations, the normal frequency variation to be within plus or minus 0.05 HZ on a
60 HZ base.
5.4 Meter Usaqe Information Idaho Power shall provide to Simplot
Microsoft Excel, or similar format reasonably acceptable to Simplot, interval meter usage data
as requested by Simplot once per month at no cost to Simplot. Requests by Simplot for interval
meter usage data more frequently than once per month will be billed at actual cost but no less
than $30 per request.
SECTION 6 - CONTRACT DEMAND
Contract Demand: During the term of this Agreement, Simplot agrees to
contract for, and Idaho Power agrees to make available and deliver, 25 000 kilowatts of
Contract Demand. Simplot may increase the Contract Demand from 25 000 kilowatts to a
maximum of 38 000 kilowatts by notifying Idaho Power in writing of the additional capacity
requirements at least one year in advance.
Minimum Billinq Demand: The Minimum Billing Demand is the Contract
Demand less 5 000 kilowatts.
Excess Demand : The availability of power in excess of the Contract
Demand is not guaranteed, and if Billing Demand at the Simplot Facility exceeds the Contract
Demand, Idaho Power may curtail service to the Simplot Facility. Idaho Power reserves the
right to install , at any time , at Simplot's expense, any device necessary to protect Idaho Power
system from damage which may be caused by Billing Demand at the Simplot Facility exceeding
the Contract Demand. Simplot will be responsible for any damages to Idaho Power s system or
damages to third Parties resulting from Billing Demand at the Simplot Facility exceeding the
Contract Demand. Simplot agrees to use its best reasonable efforts to monitor its electric loads
and to advise Idaho Power as soon as possible of the potential for Billing Demands at the
Page 4
Simplot Facility to exceed the Contract Demand. Billing Demands in excess of the Contract
Demand will be subject to the Daily Excess Demand Charge specified in Schedule 29.
SECTION 7 - FACILITIES FOR DELIVERY TO SIMPLOT FACILITY
Substation and Transmission Facilities All facilities including switching,
transformation, regulation and protective devices necessary at Idaho Power s Don Substation
for the delivery of power and energy at that point are installed and owned by Idaho Power. To
the extent that additional transmission and/or substation interconnection facilities are required to
provide electric service to the Simplot Facility, special arrangements will be made in a separate
Agreement between Simplot and Idaho Power.
Distribution Facilities: Idaho Power has installed and owns , operates and
maintains the facilities necessary to deliver the power and energy from the Don Substation to
the Simplot Facility at 12 500 volts and the transformation equipment required by Simplot's
utilization equipment as set forth in Exhibit A. Simplot agrees to pay the cost of such facilities
and equipment set forth in Exhibit A through a monthly facilities charge as specified in Schedule
29. Material and labor required beyond the secondary terminals of Idaho Power s transformers
shall be installed, owned, operated, maintained, and paid for by Simplot. It is understood and
agreed that all the work performed by Idaho Power under this paragraph shall be in accordance
with all local and state rules and regulations in respect to construction of said facilities and the
equipment used shall be standard items in Idaho Power s system.
Modifications to Distribution Facilities It is understood and agreed that
the facilities required by Simplot may vary from time to time, and Idaho Power s investment in
these facilities upon which charges herein shall be based , shall be determined in accordance
with Idaho Power s normal bookkeeping system. Simplot shall be notified of any change in
equipment or investment, at the earliest practical date subsequent to any change in such
equipment or investment, by letter from Idaho Power to Simplot which letter or letters of
Page 5
notification shall comprise Exhibit A and shall be a part of this Agreement, and each such letter
shall show the net investment incurred by Idaho Power in facilities required to deliver power and
energy from the Don Substation to the Simplot Facility.
In the event it becomes necessary to remove, reinstall, or change the facilities
installed by Idaho Power, Simplot shall pay to Idaho Power the "nonsalvable cost" of such
removal, reinstallation , or change. Nonsalvable cost as used herein is comprised of the net
book value (original cost less depreciation) of the Distribution Facilities, less the difference
between the salvable cost of material removed and the removal labor cost including appropriate
overheads.
7.4 Easements Simplot will grant Idaho Power such easements as Idaho
Power may determine, in its sole discretion , are reasonably required to provide service under
this Agreement. If Idaho Power is required, pursuant to the provisions of Paragraph 7., to
remove or change its facilities , Idaho Power will release the easement covering said facilities in
exchange for a new easement to be granted by Simplot.Upon the termination of this
Agreement or any renewals thereof, Idaho Power, upon request of Simplot , shall release the
easement(s) granted to it pursuant to this Agreement. Any facilities owned or installed under
Paragraphs 7.2 and 7., supra , by Idaho Power pursuant hereto shall be and remain the
property of Idaho Power, notwithstanding that the same may have been affixed to the premises
and Idaho Power shall have a reasonable time after expiration of this Agreement or any renewal
thereof to remove its facilities so installed.
Operation and Maintenance Idaho Power will operate and maintain
Distribution Facilities necessary to provide service to the Simplot Facility. Routine maintenance
services provided under the terms of this contract are:
Insulator Decontamination.Insulator decontamination will be
performed every other year at a time mutually agreeable to both Simplot and Idaho Power.
Simplot may request insulator decontamination more frequently if required to minimize
Page 6
flashovers. Simplot will be required to pay for 50 percent of the actual cost of providing the
service.
Thermal ScanninQ Thermal scanning of the Distribution Facilities
will be performed annually at a time mutually agreeable to both Simplot and Idaho Power. If, as
result of the thermal scanning, any equipment is found to be defective, Idaho Power will
rescan the identified equipment after it has been repaired. The annual thermal scanning and
any rescanning of repaired equipment will be performed at no cost to Simplot. Idaho Power will
perform thermal scanning of the Distribution Facilities more frequently upon request by Simplot
provided Simplot pays Idaho Power the actual cost of providing the service at a frequency
greater than once a year.
PaintinQ of Distribution Facilities Idaho Power will paint upon
request by Simplot and at a frequency no greater than once every five (5) years, highly visible
Distribution Facilities. Idaho Power will paint Distribution Facilities more frequently upon request
by Simplot provided Simplot pays Idaho Power the actual cost of providing the service at a
frequency greater than once every five (5) years.
SECTION 8 - CHARGES TO BE PAID BY SIMPLOT TO IDAHO POWER
Rates and CharQes: The rates and charges for electrical power, energy
and other services provided by Idaho Power to the Simplot Facility will be identified by
component in Schedule 29. The total amount to be paid by Simplot for electric service to the
Simplot Facility will be the sum of the components identified on Schedule 29.
Power Factor Power factor corrective apparatus or equipment necessary
to maintain at all times as near unity power factor as possible shall be provided by Simplot;
however, in the event Simplot's power factor is less than .95 lagging, Idaho Power shall have
the right and may elect to install additional power factor corrective equipment in accordance with
and under the provisions of Paragraph 7.3 hereof.
Page 7
SECTION 9 - PAYMENT OF BillS/SETTLEMENTS
BillinQ Data Simplot shall pay Idaho Power for all services provided
under this Agreement.nvoices for payment for electric services shall be prepared and
submitted to Simplot monthly. All invoices or bills shall contain such data as may be reasonably
required to substantiate the billing, including statements of the meter reading at the beginning
and end of the billing period, meter constants, and consumption during the billing period.
Payment Procedure All bills or accounts for electric service owed by
Simplot to Idaho Power hereunder shall be due and payable within fifteen (15) days following
Simplot's receipt of a bill. Payment is to be made by electronic transfer of funds. Idaho Power
will provide Simplot with current ABA routing numbers and other necessary instructions to
facilitate the electronic transfer of funds.
SECTION 10 - ACCESS TO PREMISES
10.During the term of this Agreement, and for a reasonable period following
termination , Idaho Power shall have access to the Simplot Facility premises at all reasonable
times with proper notice to Simplot for the purposes of reading meters , making installations
repairing and removing Distribution Facilities and for other proper purposes hereunder.
SECTION 11 - ASSIGNMENT
11.This Agreement shall be binding upon the heirs, legal and personal
representatives, successors, and assigns of the Parties hereto.
SECTION 12 - LIABILITY
12.Each Party agrees to protect, defend, indemnify and hold harmless the
other Party, its officers directors, parent company, affiliates, subsidiaries agents
Page 8
representatives, and employees against and from any and all liability, suits, loss, damage
claims, actions, costs, and expenses of any nature, including court costs and reasonable
attorney s fees, even if such suits or claims are completely groundless, as a result of injury to or
death of any person or destruction, loss or damage to property arising in any way in connection
with , or related to, this Agreement, but only to the extent such injury to or death of any person or
destruction, loss or damage to property is not due to the negligence or other breach of legal
duty of such other Party; provided, however, that each Party shall be solely responsible for
claims of and payment to its employees for injuries occurring in connection with their
employment or arising out of any worker s compensation law. In no event shall either Party be
liable to the other for any indirect, incidental, special , or consequential damages of any
character including, without limitation, damages for lost profits or work stoppages.
SECTION 13 TEMPORARY SUSPENSION
13.When Simplot has properly invoked Rule G of Idaho Power s General
Rules and Regulations Temporary Suspension of Demand , or its successor Rule , the Contract
Demand and the Billing Demand shall be prorated based on the period of such suspension in
accordance with Rule G or its successor Rule. During the period of such suspension, the
Contract Demand will be set equal to 10,000 kW for purposes of determining Simplot's monthly
Contract Demand Charge and Demand Charge.
SECTION 14 - MODIFICATIONS OF CONTRACT
14.This Agreement may not be modified except by writing and duly signed by
both Parties hereto.
Page 9
SECTION 15 - COMMISSION JURISDICTION
15.This Agreement and the respective rights and obligations of the Parties
hereunder shall be subject to (1) Idaho Power s General Rules and Regulations as now or
hereafter in effect and on file with the Commission, and (2) the jurisdiction and regulatory
authority of the Commission and the laws of the State of Idaho.
15.The rates set forth in this Agreement and Schedule 29 are subject to the
continuing jurisdiction of the Idaho Public Utilities Commission. The rates under this Agreement
are subject to change and revision by order of the Commission upon a finding, supported by
substantial competent evidence, that such rate change or revision is just, fair, reasonable
sufficient, nonpreferential and nondiscriminatory. It is the Parties' intention by such provision
that the rate making standards to be used in making any revisions or changes in rates and the
judicial review of any revisions or changes in rates will be the same standards that are
applicable to Idaho intrastate tariff rates.
SECTION 16 - COMMISSION APPROVAL
16.This Agreement shall become effective upon the approval by the
Commission of all t~rms and provisions hereof without charge or condition.
IDAHO POWER COMPANY
BY:
/? ?
TITLE:J~ - ~lAlwfav 111'IJ.J.,.
J. R. SIMPLOT COMPANY
TITLE: President and CEO
Page 10
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Idaho Power Company First Revised Sheet No. 29-
CANCELS
I.P.C. No. 27. Tariff No.1 01 Oriqinal Sheet No. 29-
SCHEDULE 29
IDAHO POWER COMPANY
ELECTRIC SERVICE RATE
J. R. SIMPLOT COMPA
POCATELLO. IDAHO
SPECIAL CONTRACT DATED JUNE 29.2004
MONTHLY CHARGES
Contract Demand Charqe
$1 .44 per kW of Contract Demand
Demand Charqe
$4.94 per kW of Billing Demand but no less than the Contract Demand less 5 000 kW
Daily Excess Demand Charqe
$0.204 per each kW over the Contract Demand
Enerqy Charqe
3115~ per kWh
Power Cost Adiustment*
6039~ per kWh
This Power Cost Adjustment is computed as provided in Schedule 55.
Monthly Facilities Charqe
70/0 of the Company s investment in Distribution Facilities
IDAHO
Issued - July 2 , 2004
Effective - August 2 2004
Issued by IDAHO POWER COMPANY
John R. Gale, Vice President, Regulatory Affairs
1221 West Idaho St, Boise , Idaho
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