20050106Application.pdf

MONICA MOEN , ISB # 5734
BARTON KLINE , ISB # 1526
Idaho Power Company
1221 West Idaho Street
O. Box 70
Boise , Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
Idaho Public Utilities Commission
Office of the SecretaryRECEIVED
Attorney for Idaho Power Company JAN - 5 2005
Boise, Idaho
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR APPROVAL)
OF AN AGREEMENT FOR SALE AND
PURCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANY ANDUS GEOTHERMAL INC.
CASE NO. IPC-05-l1/-
APPLICATION
COMES NOW Idaho Power Company ("Idaho Power" or the "Company ) and
pursuant to RP 52 , hereby applies for an Idaho Public Utilities Commission ("IPUC" or the
Commission ) Order approving a Firm Energy Sales Agreement between Idaho Power and
US Geothermal Inc. ("US Geothermal") under which US Geothermal would sell and Idaho
Power would purchase electric energy generated by the Raft River Geothermal Power
Plant located near Malta, Idaho (the "Facility
This Application is based on the following:
US Geothermal proposes to design, construct, install , own, operate and
maintain the Facility to produce 1 0 average MWs on a monthly basis. The Facility will be a
APPLICATION -
qualified small power production facility under the applicable provisions of the Public
Utilities Regulatory Policy Act of 1978 ("PURPA"
II.
On December 29, 2004, Idaho Power and US Geothermal entered into a Firm
Energy Sales Agreement ("Agreement") pursuant to the terms and conditions of
Commission Order No. 29632 and Commission Order 29646. Under the provisions of the
Agreement, US Geothermal elected to contract with Idaho Power for a 20-year term. US
Geothermal further elected to contract with the Company using the Non-Levelized
Published Avoided Cost Rates as currently established by the Commission for energy
deliveries of no more than 10 MWs.
III.
As of the date of this filing, reconsideration by the Commission
Commission Order No. 29632 remains ongoing. Idaho Power and US Geothermal have
discussed the reconsideration process. US Geothermal has requested to move forward
with the Agreement and with this application prior to conclusion of the Commission
deliberations concerning the request to reconsider Commission Order No. 29632.
IV.
In many respects, the US Geothermal Agreement is similar to the agreement
between Idaho Power and Fossil Gulch Wind Park that was approved by the Commission
in Order No. 29630 issued on November 12 , 2004 and the various other Idaho Power
PURPA agreements approved by the Commission during 2004. The US Geothermal
Agreement also incorporates the conditions imposed by recent Commission Order No.
29632 that was issued in Case No. IPC-04-8. The following is a summary of certain
provisions within the Agreement:
APPLICATION - 2
APPLICATION - 3
1 )&mulatorv Out Clause - This clause has been removed from the
Agreement.
10 MW Threshold - As specified in Commission Order No. 29632
this threshold is measured based upon 10 average monthly MWs.
Initial Capacity Determination - As specified in Commission
Order No. 29632 , to be eligible for the Published Avoided Cost
rates , a facility must
...
demonstrate that under normal or
average design conditions the project will generate at no more
than 10 aMW in any given month.
Paragraph 1.7 and paragraph 4.3 of this Agreement
define and specify how this requirement will be met.
Idaho Power and US Geothermal have agreed that US
Geothermal will supply Idaho Power a certificate from a
professional engineer certifying that the Facility s design
and operating protocols will limit generation at this
Facility to no more than 10 average MWs in any given
month.
Inadvertent Energy - As specified in Commission Order No.
29632 , once a project has qualified for Published Avoided Cost
rates
...
we also find it reasonable to cap the maximum
monthly generation that qualifies for published rates at the total
number of hours in a month multiplied by 1 0 MW.
Paragraph 1.5 and paragraph 7.3 of this Agreement
define and specify the calculation used to measure
APPLICATION - 4
energy in excess of 10 average MWs and provide that
Idaho Power will accept but will not pay for any energy
produced in excess of 10 average MWs.
900/0/1100/0 Performance Band
Enerqy Payment - As specified in Commission Order No.
29632 , energy deliveries outside of this Performance Band are
purchased at a rate equal to 850/0 of the market price or the
contract rate, which ever is less.
Paragraph 1.21 of this Agreement defines energy
outside of this Performance Band to be "Surplus
Energy" which is (1) all energy over 1100/0 of the
Facility s estimated generation amounts (Paragraph 6.
or (2) all of the current month's energy if the Facility
monthly generation is less than 90 % of the Facility
estimated generation amounts (Paragraph 6.2) or (3) all
energy delivered prior to the operation date of the
Facility.
Forced Outa~- As specified in Commission Order No.
29632, the Forced Outage minimum outage has been revised
to 48 hours and is applicable to individual generation units at
the Facility. Paragraph 14.3 and paragraph 6.of the
Agreement specify the process, details and calculations for
factoring forced outages into the computation of purchase
obligations.
RevisinQ Generation Estimates - As specified in Commission
Order No. 29632, the Facility will initially provide Idaho Power
monthly generation estimates for the first year of the
Agreement and, beginning in the ninth month and every three
months thereafter, the facility will provide Idaho Power with an
additional three months of forward generation estimates.
addition, beginning with the end of the third month , the Facility
may revise previously provided generation estimates beginning
with the fourth month out from that point in time (previously
provided generation estimates past the immediate next 3 three
months may be revised). Paragraph 6.2 of the Agreement
specifies the process and procedures to address revisions to
generation estimates.
This Facility will interconnect with the Raft River Rural Electric Cooperative
COOP") electrical system and will wheel its energy to Idaho Power over COOP and/or
BPA transmission facilities. Therefore, the Facility will contract with COOP and BPA for all
interconnection and transmission requirements. Metering and telemeter equipment will be
installed at the Facility to accurately measure and communicate the Facility s energy
deliveries to Idaho Power. All applicable charges and monthly operation and maintenance
charges under Schedule 72 for this metering and telemetering will be assessed to
Geothermal.
APPLICATION - 5
VI.
Section 24 of the Agreement provides that the Agreement will not become
effective until the Commission has approved all of the Agreement's terms and conditions
and declared that all payments Idaho Power makes to US Geothermal for purchases of
energy will be allowed as prudently incurred expenses for ratemaking purposes.
VII.
Within this Agreement, various requirements have been placed upon US
Geothermal in order for Idaho Power to accept energy deliveries from this Facility. Idaho
Power will monitor compliance with these initial requirements as well as the ongoing
requirements through the full term of this Agreement. Should the Commission approve this
Agreement , Idaho Power intends to consider the Effective Date of the Agreement to be
December 29, 2004.
VIII.
The Agreement, as signed and submitted by the Parties thereto, contains
Non-Levelized Published Avoided Cost Rates in conformity with applicable IPUC Orders.
IX.
Service of pleadings, exhibits, orders and other documents relating to this
proceeding should be served on the following:
Monica B. Moen , Attorney II
Barton L. Kline, Senior Attorney
Idaho Power Company
O. Box 70
Boise, Idaho 83707
Randy C. Allphin
Contract Administrator
Idaho Power Company
O. Box 70
Boise , Idaho 83707
NOW , THEREFORE , based on the foregoing, Idaho Power Company hereby
requests that the Commission issue its Order:
APPLICATION - 6
(1 )Approving the Firm Energy Sales Agreement between Idaho Power
Company and US Geothermal Inc. without change or condition; and
(2)Declaring that all payments for purchases of energy under the Firm
Energy Sales Agreement between Idaho Power Company and US Geothermal Inc. be
allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this 5th day of January 2005.
~.
16,
MONICA B. MOEN
Attorney for Idaho Power Company
APPLICATION - 7
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 5th day of January 2005 , 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:
Daniel Kunz
US Geothermal Inc.
1509 Tyrell Lane, Suite B
Boise , ID 83706
Hand Delivered
S. Mail
Overnight Mail
FAX
Conley Ward
Givens Pursley
O. Box 2720
Boise, ID 83701-2720
Hand Delivered
S. Mail
Overnight Mail
FAX
t6.
MONICA B. MOEN
CERTIFICATE OF SERVICE
BEFORE THE IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-O5-
IDAHO POWER COMPANY
EXH I BIT
Article
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
US GEOTHERMAL INC
TABLE OF CONTENTS
TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment
Environmental Attributes
Facility and Interconnection
Transmission Agreement
Metering and Telemetry
Records
Protection
Operations
Reliability Management System
Indemnification and Insurance
Force Majeure
Liability; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Governmental Authorization
Commission Order
Successors and Assigns
Modification
Taxes
Notices
Additional Terms and Conditions
Severability
Counterparts
Entire Agreement Signatures
Appendix A
Appendix B
Appendix C
12/28/2004
FIRM ENERGY SALES AGREEMENT
(10 aMW or Less)
RAFT RIVER GEOTHERMAL POWER PLANT
Project Number: 31765155
THIS AGREEMENT, entered into on this 2.. C;r.).-day of OPt:t-~
j'
t~,2004 between
US GEOTHERMAL INC. an Idaho corporation (Seller), and IDAHO POWER COMPANY, an
Idaho corporation (Idaho Power), hereinafter sometimes referred to collectively as "Parties" or
indi vidually as "Party.
WITNESSETH:
WHEREAS, Seller will design, construct, own, maintain and operate an electric generation
facility; and
WHEREAS, Seller wishes to sell, and Idaho Power is willing to purchase, firm electric energy
produced by the Seller s Facility.
THEREFORE, In consideration of the mutual covenants and agreements hereinafter set forth, the
Parties agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreement and the appendices attached hereto, the following terms
shall have the following meanings:
1.1 Commission" - The Idaho Public Utilities Commission.
1.2 Contract Year" - The period commencing each calendar year on the same calendar date as the
Operation Date and ending 364 days thereafter.
1.3 Designated Dispatch Facility" - Idaho Power s Systems Operations Group, or any subsequent
group designated by Idaho Power.
1.4 Facility" - That electric generation facility described in Appendix B of this Agreement.
1.5 Geothermal Production Well Contribution Rating" - Each individual geothermal well
contribution, defined in MW s, to the generator rating of the generator directly attached to the
specific geothermal well. The sum of the individual Geothermal Production Well Contribution
- 1-
12/28/2004
1.6
1.7
1.8
1.9
1.10
1.11
Ratings directly providing motive force for individual generation units must equal the generator
rating of the individual generation unites) as specified in Appendix B. The Geothermal
Production Well Contribution Ratings will be as specified in Appendix B or as may be adjusted in
accordance with paragraph 14.4 of this Agreement.
Inadvertent Energy" - Electric energy Seller does not intend to generate. Inadvertent energy is
more particularly described in paragraph 7.3 of this Agreement.
Interconnection Facilities - All facilities required to be installed to interconnect and deliver
energy from the Facility to the Transmitting Entity s system including, but not limited to
connection, switching, metering, relaying, communications and safety equipment.
Initial Capacity Determination - The process by which Idaho Power confirms that under
normal or average design conditions the Facility will generate at no more than 10 average MW
per month and is therefore eligible to be paid the published rates in accordance with Commission
Order No. 29214.
Losses" - The loss of electrical energy expressed in kilowatt hours (kWh) occurring as a result
of the transformation and transmission of energy between the point where the Facility s energy is
actually delivered to the Transmitting Entity (measured by either the Idaho Power or the
Transmitting Entity s Metering Equipment) and the Point of Delivery on the Idaho Power
electrical system. The loss calculation formula will be as specified in Appendix B of this
Agreement.
Market Energy Cost" - Eighty-five percent (85%) of the weighted average of the daily on-peak
and off-peak Dow Jones Mid-Columbia Index (Dow Jones Mid-C Index) prices for non-firm
energy. If the Dow Jones Mid-Columbia Index price is discontinued by the reporting agency, both
Parties will mutually agree upon a replacement index, which is similar to the Dow Jones Mid-
Columbia Index. The selected replacement index will be consistent with other similar agreements
and a commonly used index by the electrical industry.
Material Breach" - A Default (paragraph 22.1) subject to paragraph 22.2.
- 2-
12/28/2004
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1.22
Maximum Capacity Amount"- The maximum capacity (MW) of the Facility will be as
specified in Appendix B of this Agreement.
Metering Equipment"- All equipment specified in Schedule 72, this Agreement and any
additional equipment specified in Appendix B required to measure, record or telemeter power
flows between the Seller s Facility and Idaho Power s electrical system.
Net Energy" - All of the electric energy produced by the Facility, less Station Use, less Losses,
expressed in kilowatt hours (kWh), which the Transmitting Entity delivers to Idaho Power at the
Point of Delivery for the full term of the Agreement. Net Energy does not include Inadvertent
Energy.
Operation Date" - The day commencing at 00:00:01 (H:M:S) hours, Mountain Time, following
the day that all requirements of paragraph 5.2 have been completed.
Point of Delivery" - The location specified in Appendix B, where the Transmitting Entity
delivers the Facility s Net Energy and Inadvertent Energy to Idaho Power.
Prudent Electrical Practices" - Those practices, methods and equipment that are commonly and
ordinarily used in electrical engineering and operations to operate electric equipment lawfully,
safely, dependably, efficiently and economically.
Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates
achieving the Operation Date.
Schedule 72"- Idaho Power s Tariff No 101, Schedule 72 or its successor schedules as
approved by the Commission.
Season" - The three periods identified in paragraph 6.1 of this Agreement.
Station Use" - Electric energy that is used to operate equipment that is auxiliary or otherwise
related to the production of electricity by the Facility.
Surplus Energy" - (1) Net Energy produced by the Seller s Facility, scheduled and delivered by
the Transmitting Entity 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. or (2) If
the Net Energy produced by the Seller s Facility, scheduled and delivered by the Transmitting
- 3-
12/28/2004
1.23
1.24
Entity and accepted by Idaho Power during the month is less than 90% of the monthly Net
Energy Amount for the corresponding month specified in paragraph 6., then all Net Energy
scheduled and delivered by the Transmitting Entity to Idaho Power on the Seller s behalf for that
given month or (3) All Net Energy produced by the Seller s Facility, scheduled and delivered by
the Transmitting Entity and accepted by Idaho Power prior to the Operation Date.
Total Cost of the Facility" - The total cost of structures, equipment and appurtenances.
Transmitting Entity" - The signatory( s) (other than the Seller) to the Transmission Agreement
referred to in paragraph 10.1 and its successors and assigns.
ARTICLE ll: NO RELIANCE ON IDAHO POWER
Seller Independent Investigation - Seller warrants and represents to Idaho Power that in entering
into this Agreement and the undertaking by Seller of the obligations set forth herein, Seller has
investigated and determined that it is capable of performing hereunder and has not relied upon
the advice, experience or expertise of Idaho Power in connection with the transactions
contemplated by this Agreement.
Seller Independent Experts - All professionals or experts including, but not limited to, engineers
attorneys or accountants, that Seller may have consulted or relied on in undertaking the
transactions contemplated by this Agreement have been solely those of Seller.
ARTICLE ill: WARRANTIES
No Warranty by Idaho Power - Any review, acceptance or failure to review Seller s design
specifications, equipment or facilities shall not be an endorsement or a confirmation by Idaho
Power and Idaho Power makes no warranties, expressed or implied, regarding any aspect of
Seller s design, specifications, equipment or facilities, including, but not limited to, safety,
durability, reliability, strength, capacity, adequacy or economic feasibility.
Qualifying Facility Status - Seller warrants that the Facility is a "Qualifying Facility," as that term
is used and defined in 18 CFR ~292.207. After initial qualification, Seller will take such steps as
- 4-
12/28/2004
may be required to maintain the Facility s Qualifying Facility status during the term of this
Agreement and Seller s failure to maintain Qualifying Facility status will be a Material Breach of
this Agreement. Idaho Power reserves the right to review the Seller s Qualifying Facility status
and associated support and compliance documents at anytime during the term of this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
Prior to the Operation Date and as a condition of Idaho Power s acceptance of deliveries of
energy from the Seller, Seller shall:
1.2
1.3
1.4
Submit proof to Idaho Power that all licenses, permits or approvals necessary for Seller
operations have been obtained from applicable federal, state or local authorities
including, but not limited to, evidence of compliance with Subpart B, 18 CFR 292.207.
Opinion of Counsel - Submit to Idaho Power an Opinion Letter signed by an attorney
admitted to practice and in good standing in the State of Idaho providing an
opinion that Seller s licenses, permits and approvals as set forth in paragraph 4.
above are legally and validly issued, are held in the name of the Seller and, based on
a reasonable independent review, counsel is of the opinion that Seller is in substantial
compliance with said permits as of the date of the Opinion Letter. The Opinion Letter
will be in a form acceptable to Idaho Power and will acknowledge that the attorney
rendering the opinion understands that Idaho Power is relying on said opinion. Idaho
Power s acceptance of the form will not be unreasonably withheld. The Opinion Letter
will be governed by and shall be interpreted in accordance with the legal opinion accord
of the American Bar Association Section of Business Law (1991).
Initial Capacity Determination - Submit to Idaho Power a certificate from a Registered
Professional Engineer licensed and in good standing in the State of Idaho certifying that
the Facility s design and operating protocols will limit generation at the Facility to no
more than 10 average MW in any given month.
Engineer s Certifications - Submit an executed Engineer s Certification of Design &
- 5-
12/28/2004
1.5
1.6
1.7
1.8
Construction Adequacy and an Engineer s Certification of Operations and Maintenance
(O&M) Policy as described in Commission Order No. 21690. These certificates will be
in the form specified in Appendix C but may be modified to the extent necessary to
recognize the different engineering disciplines providing the certificates.
Insurance - Submit written proof to Idaho Power of all insurance required in Article XVI.
Transmission Agreement - Provide Idaho Power with a copy of the Transmission
Agreement executed by the Seller and the Transmitting Entity in a form acceptable to
Idaho Power. Idaho Power s acceptance will not be unreasonably withheld.
Written Acceptance - Request and obtain written confirmation from Idaho Power that all
conditions to acceptance of energy have been fulfilled. Such written confirmation shall be
provided within a commercially reasonable time following the Seller s request and will
not be unreasonably withheld by Idaho Power.
Idaho Power Electrical System Study - Seller and Transmitting Entity will request, in
writing, a specific Point of Delivery where the Facility s Net Energy and Inadvertent
Energy will be delivered to Idaho Power. This request will include the Maximum
Capacity Amount (MW) as specified in Appendix B-4. Upon receipt of this request, at
Seller s expense, Idaho Power will complete an electrical system study to determine
Idaho Power s ability to receive the Maximum Capacity Amount at the requested Point of
Delivery. This study will include a study of the Idaho Power electrical system at this
Point of Delivery and estimation of any additional Seller costs associated with
completing this request as specified in Appendix B.
1.8.If said study shows that Idaho Power will be unable to receive the Maximum
Capacity Amount at the requested Point of Delivery, the Seller and
Transmitting Entity may request a different Point of Deli very or revise the
Maximum Capacity Amount and a similar study, at the Seller s expense, will
be conducted.
If the Seller and Transmitting Entity request penmSSlOn to deliver the
- 6-
12/28/2004
Maximum Capacity Amount at a Point of Delivery that Idaho Power has
identified as being unable to receive the Maximum Capacity Amount, at
Seller s request and expense, Idaho Power will conduct a study to determine
the necessary upgrades and/or modifications required to enable receipt of the
Maximum Capacity Amount at the requested Point of Delivery.
1.8.Seller will be responsible for all customary and reasonable expenses
associated with all Idaho Power studies, upgrades and/or modifications
required to enable delivery of the Maximum Capacity Amount at the
requested Point of Delivery. An initial deposit will be calculated based upon
the estimated cost of each individual study, upgrade or modification and will
be required to be paid by the Seller prior to Idaho Power conducting any
work associated with the Seller s request. Upon completion of any and all
studies , upgrades and/or modifications required to accommodate the Seller
request, Idaho Power will reconcile the actual expenses with the previously
paid deposit and the appropriate refund or additional billing will be
processed.
ARTICLE V: TERM AND OPERATION DATE
Term - Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective
on the date first written and shall continue in full force and effect for a period of twenty (20)
Contract Years from the Operation Date.
Operation Date - The Operation Date may occur only after the Facility has achieved all of the
following:
a) Completed all Conditions to Acceptance of Energy as specified in Article IV.
b) Commission approval of this Agreement has been received.
c) Seller has demonstrated to Idaho Power s satisfaction that the Facility is complete and
able to provide energy in a consistent, reliable and safe manner and has requested an
- 7-
12/28/2004
Operation Date in written form.
d) Seller has received written confirmation from Idaho Power of the Operation Date.
This confirmation will not be unreasonably withheld by Idaho Power.
Seller s failure to achieve the Operation Date within ten (10) months of the Scheduled Operation
Date will be an event of default.
ARTICLE VI: PURCHASE AND SALE OF NET ENERGY
Delivery and Acceptance of Net Energy - Except when either Party s performance is excused as
provided herein, Idaho Power will purchase and Seller will sell all of the Net Energy produced by
the Facility and delivered by the Transmitting Entity to the Point of Delivery. All Inadvertent
Energy produced by the Facility will also be delivered by the Transmitting Entity to Idaho Power
at the Point of Delivery. At no time will the total amount of Net Energy and/or Inadvertent
Energy produced by the Facility and delivered by the Transmitting Entity to the Point of Delivery
exceed the Maximum Capacity Amount.
Net Energy Amounts - Seller intends to produce and Transmitting Entity shall deliver Net Energy
in the following monthly amounts:
Initial Year Monthly Net Energy Amounts:
Season 1
Month kWh
March 7,440 000
April 200 000
May 7,440,000
July 7,440 000
August 7,440 000
November 200 000
December 7,440 000
June 200 000
September 200 000
October 7,440,000
January 440 000
February 720 000
- 8-
Season 2
Season 3
12/28/2004
2.4
Ongoing Monthly Net Energy Amounts - Seller shall initially provide Idaho Power with
one year of monthly generation estimates (Initial Year Monthly Net Energy Amounts)
and beginning at the end of month nine and every three months thereafter provide Idaho
Power with an additional three months of forward generation estimates. This information
will be provided to Idaho Power by written notice in accordance with paragraph 28., no
later than 5pm of the 5th day following the end of the previous month. If the Seller does
not provide the Ongoing Monthly Net Energy amounts in a timely manner, Idaho Power
will use the most recent 3 months of the Initial Year Monthly Net Energy Amounts
specified in paragraph 6.1 for the next 3 months of monthly Net Energy amounts.
Seller s Adjustment of Net Energy Amount
2.3.1 No later than the Operation Date, by written notice given to Idaho Power in
accordance with paragraph 28., the Seller may revise all of the previously
provided Initial Year Monthly Net Energy Amounts.
2 Beginning with the end of the 3rd month after the Operation Date and at the end
of every third month thereafter: (1) the Seller may not revise the immediate next
three months of previously provided Net Energy Amounts , (2) but by written
notice given to Idaho Power in accordance with paragraph 28., no later than
5pm of the 5th day following the end of the previous month, the Seller may revise
all other previously provided Net Energy Amounts. Failure to provide timely
written notice of changed amounts will be deemed to be an election of no change.
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 14.1 and the Seller
declared Suspension of Energy Deliveries is accepted by Idaho Power, the Net Energy
Amount as specified in paragraph 6.2 for the specific month in which the reduction or
suspension under paragraph 14.1 or 14.1 occurs will be reduced in accordance with
- 9-
12/28/2004
6.3
the following:
Where:
NEA Current Month's Net Energy Amount (Paragraph 6.
SGU =) If Idaho Power is excused from accepting the Seller s Net
Energy as specified in paragraph 14.1 this value will be
equal to the percentage of curtailment as specified by
Idaho Power multiplied by the TGU as defined below.
) If the Seller declares a Suspension of Energy Deliveries as
specified in paragraph 14.3.1 for an entire generation
unites) this value will be the sum of the individual
generation units size ratings as specified in Appendix B
that are impacted by the circumstances causing the Seller
to declare a Suspension of Energy Deliveries.
) If the Seller declares a Suspension of Energy Deliveries as
specified in paragraph 14.1 due to a forced outage of an
individual production welles), this value will be the sum of
the individual production welles) Geothermal Production
Well Contribution Rating(s) as specified in Appendix B
that are impacted by the circumstances causing the Seller
to declare a Suspension of Energy Deliveries.
TGU Sum of all of the individual generator ratings of the generation
units at this Facility as specified in Appendix B of this
agreement.
RSH Actual hours the Facility s Net Energy deliveries were either
reduced or suspended under paragraph 14.2.1 or 14.
Actual total hours in the current month
Resulting formula being:
Adjusted
Net Energy = NEA
Amount
- ( (
SGU NEA
TGU
) X (
) )
This Adjusted Net Energy Amount will be used in applicable Surplus 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, Seller s failure to deliver Net Energy in any
Contract Year in an amount equal to at least ten percent (10%) of the sum of the Initial Year Net
- 10-
12/28/2004
Energy Amounts as specified in paragraph 6.2 shall constitute an event of default.
ARTICLE Vll: PURCHASE PRICE AND METHOD OF PAYMENT
Net Ener Purchase Price - For all Net Energy, Idaho Power will pay the non-Ievelized energy
price in accordance with Commission Order 29646 with seasonalization factors applied:
Season 1 - (73.50 %)Season 2 - (120.00 %)Season 3 - (100.00 %)
Year Mills/kWh Mills/k Wh Mills/kWh
2004 36.59.49.
2005 37.60.41 50.
2006 37.61.51.
2007 38.63.52.
2008 39.64.53.
2009 40.66.55.
2010 41.46 67.56.41
2011 42.42 69.57.
2012 43.70.59.
2013 44.72.48 60.40
2014 45.42 74.61.
2015 46.47 75.63.
2016 47.77.64.
2017 48.79.40 66.
2018 49.81.67.
2019 50.83.69.
2020 52.85.70.
2021 53.86.72.49
2022 54.88.74.
2023 55.91.75.
2024 57.93.77.
2025 58.95.79.41
2026 59.97.81.
Surplus Energy Price - For all Surplus Energy, Idaho Power shall pay to the Seller the current
month's Market Energy Cost or the Net Energy Purchase Price specified in paragraph 7.
whichever is lower.
Inadvertent Energy
7.3.Inadvertent Energy is electric energy produced by the Facility, expressed in kWh, which
the Transmitting Entity delivers to Idaho Power at the Point of Delivery that exceeds
000 KW multiplied by the hours in the specific month in which the energy was
- 11-
12/28/2004
7.4
delivered. (For example January contains 744 hours. 744 times 10 000 KW = 7,440 000
kWh,. Energy delivered in January in excess of 7,440,000 kWh in this example would be
Inadvertent Energy.
Although Seller intends to design and operate the Facility to generate no more than 10
average MW and therefore does not intend to generate Inadvertent Energy, Idaho Power
will accept Inadvertent Energy that does not exceed the Maximum Capacity Amount but
will not purchase or pay for Inadvertent Energy
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
Inadvertent Energy actually produced by the Seller s Facility and delivered to Idaho Power by the
Transmitting Entity as specified in Appendix A.
Continuing Jurisdiction of the Commission - This Agreement is a special contract and, as such
the rates, terms and conditions contained in this Agreement will be construed in accordance with
Idaho Power Company v. Idaho Public Utilities Commission and Afton Energy. Inc , 107 Idaho
781 693 P.2d 427 (1984); Idaho Power Company v. Idaho Public Utilities Commission, 107
Idaho 1122 695 P.2d 1 261 (1985); Afton Energy. Inc. v. Idaho Power Company, 111 Idaho 925
729 P.2d 400 (1986); Section 210 of the Public Utilities Regulatory Policies Act of 1978 and
CFR ~292.303-308.
ARTICLE Vill: ENVIRONMENTAL ATTRIBUTES
Idaho Power waives any claim to ownership of Environmental Attributes.Environmental
Attributes include, but are not limited to, Green Tags, Green Certificates, Renewable Energy
Credits (RECs) and Tradable Renewable Certificates (TRCs) directly associated with the
production of energy from the Seller s Facility.
- 12-
12/28/2004
10.
10.
10.
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 Inadvertent Energy to the Transmitting Entity for the full term of the
Agreement.
Interconnection Facilities - Seller will construct, install, own and maintain all Interconnection
Facilities other than those owned, installed or maintained by the Transmitting Entity. Seller will
pay all costs of interconnecting with the Transmitting Entity and transmitting Net Energy and
Inadvertent Energy to Idaho Power.
ARTICLE X: TRANSMISSION AGREEMENT
Transmission Agreement - The Seller will arrange and pay for the delivery of Net Energy and
Inadvertent Energy over the facilities of the Transmitting Entities (the Bonneville Power
Administration ("BPA") and the Raft River Rural Electric Cooperative ("Raft River )) to the
Point of Delivery. The delivery of Net Energy and Inadvertent Energy from the Facility to the
Idaho Power Point of Delivery shall be in accordance with the terms and conditions of a
Transmission Agreement between the Seller and the Transmitting Entities.
Acceptance of Transmission Agreement - This Agreement is expressly conditioned and
contingent upon Idaho Power s acceptance of the Transmission Agreement. Such acceptance
will not be unreasonably withheld. Idaho Power will be identified within the Transmission
Agreement as an intended third party beneficiary of the Transmission Agreement and a material
default by Seller under the Transmission Agreement will be a material default under this
Agreement.
Losses - Idaho Power will only purchase the Net Energy that is delivered by the Transmitting
Entity to Idaho Power at the Point of Delivery. Idaho Power will only accept the Inadvertent
Energy delivered by the Transmitting Entity to Idaho Power at the Point of Delivery. Losses will
be calculated as provided in Appendix B of this Agreement.
- 13-
12/28/2004
11.1
11.2
ARTICLE XI: METERING AND TELEMETRY
Metering and Telemetry - Idaho Power shall, for the account of Seller, provide, install, and
maintain Metering Equipment as required to determine the amount of Net Energy and Inadvertent
Energy delivered to Idaho Power by the Transmitting Entity at the Point of Delivery. The
metering will be installed at the location as specified in Appendix B of this Agreement. If
required by Idaho Power, metering will also include measurement of kilovar-hours in a manner
agreed to by both Parties. All customary and reasonable Metering Equipment and installation
costs shall be borne by Seller, including costs incurred by Idaho Power for inspecting and testing
such equipment at reasonable intervals at Idaho Power s actual cost of providing this Metering
Equipment and services. All meters used to determine the billing hereunder shall be sealed and
the seals shall be broken only by Idaho Power when the meters are to be inspected, tested or
adjusted.
Meter Inspection - Idaho Power shall inspect and test all meters upon their installation and at least
once every four (4) years thereafter. If requested by Seller, Idaho Power shall make a special
inspection or test of a meter and Seller shall pay the reasonable costs of such special inspection.
Both Parties shall be notified of the time when any inspection or test shall take place, and each
Party may have representatives present at the test or inspection. If a meter is found to be
inaccurate or defective, it shall be adjusted, repaired or replaced, at Idaho Power s expense in
order to provide accurate metering. If a meter fails to register, or if the measurement made by a
meter during a test varies by more than two percent (2%) from the measurement made by the
standard meter used in the test, adjustment (either upward or downward) to the payments Seller
has received shall be made to correct those payments affected by the inaccurate meter for the
actual period during which inaccurate measurements were made. If the actual period cannot be
determined, corrections to the payments will be based on the shorter of (1) a period equal to one-
half the time from the date of the last previous test of the meter to the date of the test which
established the inaccuracy of the meter; or (2) six (6) months.
- 14-
12/28/2004
11.3
11.4
12.
12.
13.
Telemetry - Idaho Power will install, operate and maintain at Seller s expense metering,
communications and telemetry equipment which will be capable of providing Idaho Power with
continuous instantaneous telemetry of the Facility s generation, Net Energy and Inadvertent
Energy amounts delivered by the Transmitting Entity, to Idaho Power s Designated Dispatch
Facility.
, (1) the Transmitting Entity provides and maintains Metering and Telemetry equipment in a
manner that is acceptable to Idaho Power, and (2) the Metering and Telemetry equipment is
capable of providing Idaho Power with the same data as specified in paragraph 11., 11.2 and
11., and (3) Idaho Power is provided with manual and automated access to the Transmitting
Entity s Meters and Telemetry equipment and associated data, and (4) the Seller provides
communication circuits and pays all expenses associate~ with these communication circuits and
any other expenses associated with Idaho Power accessing this data for the full term of this
Agreement, Idaho Power will not install Metering and Telemetry equipment that would duplicate
the Metering and Telemetry equipment provided by the Transmitting Entity.
ARTICLE Xll - RECORDS
Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate total generation, Net Energy, Station Use and Inadvertent
Energy records in a form and content recommended by Idaho Power.
Inspection - Either Party, after reasonable notice to the other Party, shall have the right, during
normal business hours, to inspect and audit any or all generation, Net Energy, Station Use and
Inadvertent Energy records pertaining to the Seller s Facility.
ARTICLE Xill - PROTECTION
Seller will construct, operate and maintain the Facility and Seller-furnished Interconnection
Facilities in accordance with Prudent Electrical Practices, the National Electric Safety Code and
any other applicable local, state and federal codes.
- 15-
12/28/2004
14.
14.
ARTICLE XIV - OPERATIONS
Communications - Idaho Power, the Transmitting Entity and the Seller shall maintain appropriate
operating communications through Idaho Power s Designated Dispatch Facility in accordance
with Appendix A of this Agreement.
Energy Acceptance
14.Idaho Power shall be excused from accepting and paying for Net Energy or accepting
Inadvertent Energy produced by the Facility and delivered by the Transmitting Entity to
the Point of Delivery, if it is prevented from doing so by an event of Force Majeure, or if
Idaho Power determines that curtailment, interruption or reduction of Net Energy or
Inadvertent Energy deliveries is necessary because of line construction or maintenance
requirements, emergencies, electrical system operating conditions on its system or as
otherwise required by Prudent Electrical Practices provided that during such curtailment
interruption or reduction Idaho Power, the Transmitting Entity and the Seller shall with
reasonable limits attempt to coordinate, schedule and deliver Net Energy to the Idaho
Power electrical system at other Points of Delivery if Idaho Power is capable of accepting
the Net Energy deliveries at the other Points of Delivery. If, for reasons other than an
event of Force Majeure, Idaho Power requires such a curtailment, interruption or
reduction of Net Energy deliveries for a period that exceeds twenty (20) days, beginning
with the twenty-first day of such interruption, curtailment or reduction, Seller will be
deemed to be delivering Net Energy at a rate equivalent to the pro rata daily average of
the amounts specified for the applicable month in paragraph 6.2. Idaho Power will notify
Seller when the interruption, curtailment or reduction is terminated.
14.Under no circumstances will the Transmitting Entity deliver Net Energy and/or
Inadvertent Energy on behalf of the Seller s Facility to the Point of Delivery in an
amount that exceeds the Maximum Capacity Amount at any moment in time. Delivery
Net Energy and/or Inadvertent Energy by the Transmitting Entity to the Point of Delivery
- 16-
12/28/2004
14.
that exceeds the Maximum Capacity Amount will be a Material Breach of this
Agreement.
Seller Declared Suspension of Energy Deliveries
14.1 If the Seller s Facility experiences a forced outage due to equipment failure which is not
caused by an event of Force Majeure or by neglect, disrepair or lack of adequate
preventative maintenance of the Seller s Facility, Seller may, after giving notice as
provided in paragraph 14.3.2 below, temporarily suspend or reduce all deliveries of Net
Energy to Idaho Power from the Facility or from individual generation unites) within the
Facility impacted by the forced outage for a period of not less than 48 hours to correct the
forced outage condition ("Declared Suspension of Energy Deliveries ). The Seller
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 14.2 and will
continue for the time as specified (not less than 48 hours) 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 6.2.4.
14.2 If the Seller desires to initiate a Declared Suspension of Energy Deliveries as provided in
paragraph 14., 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 XXVill 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 initiate a Declared Suspension of Energy Deliveries. Idaho Power will
review the documentation provided by the Seller to determine Idaho Power s acceptance
of the described forced outage as qualifying for a Declared Suspension of Energy
Deliveries as specified in paragraph 14.1. Idaho Power s acceptance of the Seller
forced outage as an acceptable forced outage will be based upon the clear documentation
- 17-
12/28/2004
14.4
14.
14.
14.
provided by the Seller that the forced outage is not due do an event of Force Majeure or
by neglect, disrepair or lack of adequate preventative maintenance of the Seller s Facility.
Adjustment of Geothermal Well Production Contribution Ratings - Prior to the Operation Date
and within 30 days after the end of the first Contract Year the Seller may adjust the Geothermal
Well Production Contribution Ratings specified in Appendix B. For the remaining term of this
Agreement the Seller may adjust the Geothermal Well Production Contribution Ratings at the
time that a production well originally identified in Appendix B or added to the facility in
accordance with paragraph 14.4 of this Agreement is permentantly taken out of service or when a
new production well is placed into service. In all circumstances the sum of the individual
Geothermal Well Production Contribution Ratings must always be equal to the generator rating
specified in Appendix B.
Voltage Levels - Seller, in accordance with Prudent Electrical Practices shall minimize voltage
fluctuations and maintain voltage levels acceptable to the Transmitting Entity and Idaho Power.
Idaho Power may, in accordance with Prudent Electrical Practices, upon one hundred eighty
(180) days' notice to the Transmitting Entity and the Seller , change its nominal operating voltage
level by more than ten percent (10%) at the Point of Delivery, in which case Seller shall modify,
at Idaho Power s expense, Seller s equipment as necessary to accommodate the modified nominal
operating voltage level.
Generator Ramping - Idaho Power, in accordance with Prudent Electrical Practices, shall have the
right to limit the rate that generation is changed at startup, during normal operation or following
reconnection to the Transmitting Entity and Idaho Power s system. Generation ramping may be
required to permit Idaho Power s voltage regulation equipment time to respond to changes in
power flow.
Scheduled Maintenance - On or before January 31 of each calendar year, Seller shall submit a
written proposed maintenance schedule of significant Facility maintenance for that calendar year
and Idaho Power and Seller shall mutually agree as to the acceptability of the proposed schedule.
The Parties determination as to the acceptability of the Seller s timetable for scheduled
- 18-
12/28/2004
14.
14.
15.
15.
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.
Maintenance Coordination - The Seller, Idaho Power and the Transmitting Entity shall, to the
extent practical, coordinate their respective line and Facility maintenance schedules such that they
occur simultaneously.
Contact Prior to Curtailment - Idaho Power will make a reasonable attempt to contact Seller
and/or the Transmitting Entity prior to exercising its rights to curtail, interrupt or reduce
deliveries from the Transmitting Entity from the Seller s Facility.Seller and the Transmitting
Entity understand that in the case of emergency circumstances, real time operations of the
electrical system, and/or unplanned events Idaho Power may not be able to provide notice to the
Seller or the Transmitting Entity prior to interruption, curtailment, or reduction of electrical
energy deliveries to Idaho Power.
ARTICLE XV: RELIABILITY MANAGEMENT SYSTEM
Purpose. In order to maintain the reliable operation of the transmission grid, the WECC
Reliability Criteria Agreement sets forth reliability criteria adopted by the WECC to which Seller
and Idaho Power shall be required to comply. Seller acknowledges receipt of and understanding
of the WECC Reliability Criteria Agreement and how it pertains to the Seller s facility.
Compliance. Seller shall comply with the requirements of the WECC Reliability Criteria
Agreement, including the applicable WECC reliability criteria set forth in Section IV of Annex A
thereof, and, in the event of failure to comply, Seller agrees to be subject to the sanctions
applicable to such failure. Such sanctions shall be assessed pursuant to the procedures contained
in the WECC Reliability Criteria Agreement. Each and all of the provisions of the WECC
Reliability Criteria Agreement are hereby incorporated by reference into this Article 15 as
though set forth fully herein, and Seller shall for all purposes be considered a Participant, and
shall be entitled to all of the rights and privileges and be subject to all of the obligations of a
- 19-
12/28/2004
15.
15.4
15.
15.
Participant, under and in connection with the WECC Reliability Criteria Agreement, including,
but not limited to the rights, privileges and obligations set forth in Sections 5, 6 and 10 of the
WECC Reliability Criteria Agreement.
Payment of Sanctions. Seller shall be responsible for reimbursing Idaho Power for any monetary
sanctions assessed against Idaho Power due to the action or inaction of the Seller by WECC
pursuant to the WECC Reliability Criteria Agreement. Seller also shall be responsible for
payment of any monetary sanction assessed against the Seller by WECC pursuant to the WECC
Reliability Criteria Agreement. Any such payment shall be made pursuant to the procedures
specified in the WECC Reliability Criteria Agreement.
Transfer of Control or Sale of Generation Facilities.In any sale or transfer of control of any
generation facilities subject to this Agreement, Seller shall, as a condition of such sale or transfer
require the acquiring party or transferee with respect to the transferred facilities either to assume
the obligations of the Seller with respect to this Agreement or to enter into an agreement with
Idaho Power imposing on the acquiring party or transferee the same obligations applicable to the
Seller pursuant to this Article 15.
Publication.Seller consents to the release by the WECC of information related to the Seller
compliance with this Agreement only in accordance with the WECC Reliability Criteria
Agreement.
Third Parties.Except for the rights and obligations between the WECC and the Seller specified
in this Article 15, this Agreement creates contractual rights and obligations solely between the
Parties. Nothing in this Agreement shall create, as between the Parties or with respect to the
WECC: (a) any obligation or liability whatsoever (other than as expressly provided in this
Agreement), or (b) any duty or standard of care whatsoever.In addition, nothing in this
Agreement shall create any duty, liability or standard of care whatsoever as to any other party.
Except for the rights, as a third-party beneficiary under this Article 15, of the WECC against the
Seller for the Seller, no third party shall have any rights whatsoever with respect to enforcement
of any provision of this Agreement. Idaho Power and the Seller expressly intend that the WECC
- 20-
12/28/2004
15.
15.
16.
is a third-party beneficiary to this Article 15, and the WECC shall have the right to seek to
enforce against the Seller any provision of this Article 15 , provided that specific performance
shall be the sole remedy available to the WECC pursuant to Article 15 of this Agreement, and the
Seller shall not be liable to the WECC pursuant to this Agreement for damages of any kind
whatsoever (other than the payment of sanctions to the WECC, if so construed), whether direct
compensatory, special, indirect, consequential, or punitive.
Reserved Rights. Nothing in the Article 15 of this Agreement or the WECC Reliability Criteria
Agreement shall affect the right of Idaho Power, subject to any necessary regulatory approval, to
take such other measures to maintain reliability, including disconnection that Idaho Power may
otherwise be entitled to take.
Termination of Article 15.Seller may terminate its obligations pursuant to this Article 15:
15.If after the effective date of this Article 15, the requirements of the WECC Reliability
Criteria Agreement applicable to the Seller are amended so as to adversely affect the
Seller, provided that the Seller gives fifteen (15) days' notice of such termination to
Idaho Power and WECC within forty-five (45) days of the date of issuance of a
Commission order accepting such amendment for filing, provided further that the
forty-five (45) day period within which notice of termination is required may be
extended by the Seller for an additional forty-five (45) days if the Seller gives written
notice to Idaho Power of such requested extension within the initial forty-five (45) day
period; or
15.For any reason on one year s written notice to Idaho Power and the WECC.
ARTICLE XVI: 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 third persons for injury to or death of person or injury to property,
proximately caused by the indemnifying Party s construction, ownership, operation or
- 21-
12/2812004
16.2
16.3
16.4
17.
maintenance of, or by failure of, any of such Party s works or facilities used in connection with
this Agreement. The indemnifying Party shall, on the other Party s request, defend any suit
asserting a claim covered by this indemnity. The indemnifying Party shall pay all costs, including
reasonable attorney fees that may be incurred by the other Party in enforcing this indemnity.
Insurance - During the term of this Agreement, Seller shall secure and continuously carry the
following insurance coverage:
16.Comprehensive General Liability Insurance for both bodily injury and property damage
with limits equal to $1 000 000, each occurrence, combined single limit. The deductible
for such insurance shall be consistent with current Insurance Industry Utility practices for
similar property.
16.2.2 The above insurance coverage shall be placed with an insurance company with an A.
Best Company rating of A- or better and shall include:
(a)An endorsement naming Idaho Power as an additional insured and loss payee as
applicable; and
(b)A provision stating that such policy shall not be canceled or the limits of liability
reduced without sixty (60) days ' prior written notice to Idaho Power.
Seller to Provide Certificate of Insurance - As required in paragraph 4.5 herein and annually
thereafter, Seller shall furnish Idaho Power a certificate of insurance, together with the
endorsements required therein, evidencing the coverage as set forth above.
Seller to Notify Idaho Power of Loss of Coverage - If the insurance coverage required by
paragraph 16.2 shall lapse for any reason, Seller will immediately notify Idaho Power in writing.
The notice will advise Idaho Power of the specific reason for the lapse and the steps Seller is
taking to reinstate the coverage. Failure to provide this notice and to expeditiously reinstate or
replace the coverage will constitute a Material Breach of this Agreement.
ARTICLE XVII. FORCE MAJEURE
As used in this Agreement
, "
Force Majeure" or "an event of Force Majeure" means any cause
- 22-
12/2812004
18.
beyond the control of the Seller, Transmitting Entity or of Idaho Power which, despite the
exercise of due diligence, such Party is unable to prevent or overcome. Force Majeure includes
but is not limited to, acts of God, fire, flood, storms, wars, hostilities , civil strife, strikes and other
labor disturbances, earthquakes, fires, lightning, epidemics, sabotage, or changes in law
regulation occurring after the Operation Date, which, by the exercise of reasonable foresight such
party could not reasonably have been expected to avoid and by the exercise of due diligence, it
shall be unable to overcome. If either Party is rendered wholly or in part unable to perform its
obligations under this Agreement because of an event of Force Majeure, both Parties shall be
excused from whatever performance is affected by the event of Force Majeure, provided that:
(1)The non-performing Party shall, as soon as is reasonably possible after the
occurrence of the Force Majeure, give the other Party written notice describing
the particulars of the occurrence.
(2)The suspension of performance shall be of no greater scope and of no longer
duration than is required by the event of Force Majeure.
(3)No obligations of either Party which arose before the occurrence causing the
suspension of performance and which could and should have been fully
performed before such occurrence shall be excused as a result of such
occurrence.
ARTICLE XVIII: LIABILITY; DEDICATION
Nothing in this Agreement shall be construed to create any duty to, any standard of care with
reference to, or any liability to any person not a Party to this Agreement. No undertaking by one
Party to the other under any provision of this Agreement shall constitute the dedication of that
Party s system or any portion thereof to the other Party or to the public or affect the status of
Idaho Power as an independent public utility corporation or Seller as an independent individual or
entity.
- 23-
12/28/2004
19.
20.
21.1
21.2
22.
22.
ARTICLE XIX: SEVERAL OBLIGATIONS
Except where specifically stated in this Agreement to be otherwise, the duties, obligations and
liabilities of the Parties are intended to be several and not joint or collective. Nothing contained
in this Agreement shall ever be construed to create an association, trust, partnership or joint
venture or impose a trust or partnership duty, obligation or liability on or with regard to either
Party. Each Party shall be individually and severally liable for its own obligations under this
Agreement.
ARTICLE XX: WAIVER
Any waiver at any time by either Party of its rights with respect to a default under this Agreement
or with respect to any other matters arising in connection with this Agreement shall not be
deemed a waiver with respect to any subsequent default or other matter.
ARTICLE XXI: CHOICE OF LAWS AND VENUE
This Agreement shall be construed and interpreted in accordance with the laws of the State of
Idaho without reference to its choice of law provisions.
Venue for any litigation arising out of or related to this Agreement will lie in the District Court of
the Fourth Judicial District of Idaho in and for the County of Ada.
ARTICLEXXll: DISPUTES AND DEFAULT
Disputes - All disputes related to or arising under this Agreement, including, but not limited to
the interpretation of the terms and conditions of this Agreement, will be submitted to the
Commission for resolution.
Notice of Default -
22.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
- 24-
12/28/2004
22.3
22.
default occurred. If the defaulting Party shall fail to cure such default within the sixty
(60) days after service of such notice, or if the defaulting Party reasonably
demonstrates to the other Party that the default can be cured within a commercially
reasonable time but not within such sixty (60) day period and then fails to diligently
pursue such cure, then, the nondefaulting Party may, at its option, terminate this
Agreement and/or pursue its legal or equitable remedies.
Material Breaches - The notice and cure provisions in paragraph 22.1 do not apply
to defaults identified in this Agreement as Material Breaches. Material Breaches must
be cured as expeditiously as possible following occurrence of the breach.
Security for Performance - Prior to the Operation Date and thereafter for the full term of this
Agreement, Seller will provide Idaho Power with the following:
22.3.
22.3.
22.3.
Insurance - Evidence of compliance with the provisions of paragraph 16.2. If Seller
fails to comply, such failure will be a Material Breach and may only be cured by
Seller supplying evidence that the required insurance coverage has been replaced or
reinstated;
Engineer s Certifications - Every three (3) years after the Operation Date, Seller will
supply Idaho Power with a Certification of Ongoing Operations and Maintenance (0
& M) from a Registered Professional Engineer licensed in the State of Idaho, which
Certification of Ongoing 0 & M shall be in the form specified in Appendix C. Seller
failure to supply the required certificate will be an event of default. Such a default
may only be cured by Seller providing the required certificate; and
Licenses and Permits - During the full term of this Agreement, Seller shall maintain
compliance with all permits and licenses described in paragraph 4.1 of this
Agreement. In addition, Seller will supply Idaho Power with copies of any new or
additional permits or licenses. At least every fifth Contract Year, Seller will update the
documentation described in Paragraph 4.1. If at any time Seller fails to maintain
compliance with the permits and licenses described in paragraph 4.1 or to provide
- 25-
12/28/2004
23.
24.
25.
the documentation required by this paragraph, such failure will be an event of default
and may only be cured by Seller submitting to Idaho Power evidence of compliance
from the permitting agency.
ARTICLE XXill: GOVERNMENTAL AUTHORIZATION
This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
ARTICLE XXIV: COMMISSION ORDER
This Agreement shall become finally effective upon the Commission s approval of all terms and
provisions hereof without change or condition and declaration that all payments to be made to
Seller hereunder shall be allowed as prudently incurred expenses for ratemaking purposes.
ARTICLE XXV: SUCCESSORS AND ASSIGNS
This Agreement and all of the terms and provisions hereof shall be binding upon and inure to the
benefit of the respective successors and assigns of the Parties hereto, except that no assignment
hereof by either Party shall become effective without the written consent of both Parties being
first obtained. Such consent shall not be unreasonably withheld. Notwithstanding the foregoing,
any party which Idaho Power may consolidate, or into which it may merge, or to which it may
conveyor transfer substantially all of its electric utility assets, shall automatically, without further
act, and without need of consent or approval by the Seller, succeed to all of Idaho Power s rights,
obligations and interests under this Agreement. This article shall not prevent a financing entity
with recorded or secured rights from exercising all rights and remedies available to it under law
or contract. Idaho Power shall have the right to be notified by the financing entity that it is
exercising such rights or remedies.
- 26-
12/28/2004
26.
27.
28.
29.
30.
ARTICLE XXVI: MODIFICATION
No modification to this Agreement shall be valid unless it is in writing and signed by both Parties
and subsequently approved by the Commission.
ARTICLE XXVII: TAXES
Each Party shall pay before delinquency all taxes and other governmental charges which, if failed
to be paid when due, could result in a lien upon the Facility or the Interconnection Facilities.
ARTICLE XXVill: NOTICES
All written notices under this agreement shall be directed as follows and shall be considered
delivered when deposited in the U. S. Mail, first-class postage prepaid, as follows:
To Seller:US Geothermal Inc.
Attn: Daniel Kunz
1509 Tyrell Lane, Suite B
Boise, Idaho 83706
To Idaho Power:Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
ARTICLE XXIX: ADDITIONAL TERMS AND CONDITIONS
This Agreement includes the following appendices, which are attached hereto and included by
reference:
Appendix A
Appendix B
Appendix C
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer s Certifications
ARTICLE XXX: SEVERABILITY
The invalidity or un enforceability 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
- 27-
12/2812004
in all other respects as if the invalid or unenforceable term or provision were omitted.
ARTICLE XXXI: COUNTERPARTS
31.1 This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
ARTICLE XXXll: ENTIRE AGREEMENT
32.This Agreement constitutes the entire Agreement of the Parties concerning the subject matter
hereof and supersedes all prior or contemporaneous oral or written agreements between the
Parties concerning the subject matter hereof.
IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be executed
in their respective names on the dates set forth below:
Idaho Power Company US Geothermal Inc.
By -t96 -Jf t-J.. Vern Porter - Mgr Power Supply Operations Daniel Kunz - President
Dated
DELt:m eE1l- 2. C) J 200 ~
Dated DECevt~ ).. C( ~~4-
Idaho Power Seller
- 28-
12/2812004
APPENDIX A
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
At the end of each month the following required documentation will be submitted to:
Idaho Power Company
Attn: Cogeneration and Small Power Production
POBox 70
Boise, Idaho 83707
The Meter readings required on this report will be the readings on the Meter Equipment
measuring the Facility s generation and Station Use and the Idaho Power Meter Equipment measuring
Net Energy and Inadvertent Energy delivered to the Idaho Power electrical system and/or any other
required energy measurements to adequately administer this Agreement. If the Idaho Power Metering is
not located at the point which is able to measure the exact energy deliveries to the Idaho Power electrical
system, then the metered energy amounts will be adjusted to account for electrical Losses occurring
between the metering point and the point which the energy is delivered to the Idaho Power electrical
system.
- 29-
12/28/2004
Idaho Power Company
Cogeneration and Small Power Production
MONTHL Y POWER PRODUCTION AND SWITCHING REPORT
Project Name
Month Year
Project Number:
Address
City
Meter Number:
End of Month kWh Meter Reading:
Beginning of Month kWh Meter:
Difference:
Times Meter Constant:
kWh for the Month:
Metered Demand:
Breaker Opening Record
Date Time Meter
Breaker Openin2 Reason Codes
Lack of Adequate Prime Mover
Forced Outage of Facility
Disturbance of IPCo System
Scheduled Maintenance
Testing of Protection Systems
Cause Unknown
Other (Explain)
State Zip
Facility
Output
Local
Service
Phone Number:
Auxiliary
Service
Net Generation
Breaker Closing Record
Date Time Meter
I hereby certify that the above meter readings are
true and correct as of Midnight on the last day of the
above month and that the switching record is accurate
and complete as required by the Firm Energy Sales
Agreement to which I am a Party.
Signature
- 30-
Reason
Date
12/28/2004
ROUTINE REPORTING
Idaho Power Contact Information
Daily Energy Production Reporting
Call daily by 10 a.800-356-4328 or 800-635-1093 and leave the following
information:
Project Identification - Project Name and Project Number
Current Meter Reading
Estimated Generation for the current day
Estimated Generation for the next day
Planned and Unplanned Proiect outages
Call 800-345-1319 and leave the following information:
Project Identification - Project Name and Project Number
Approximate time outage occurred
Estimated day and time of project coming back online
Seller s Contact Information
24-Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
Proiect On-site Contact information
Telephone Number:
- 31-
12/28/2004
APPEND IX B
FACILITY AND POINT OF DELIVERY
PROJECT NO. 31765155
RAFT RIVER GEOTHERMAL POWER PLANT
DESCRIPTION OF FACILITY
The Raft River Geothermal Power Plant, Unit #1 (RRGPP-l) is currently under design, Appendix
B shall be amended to include the final details of RRGPP-l upon completion of the design.
Failure to provide details acceptable to Idaho Power by December 31, 2005 or 6 months prior to
the Operation Date (which ever occurs first) will be a Material Breach of this Agreement. In
general, RRGPP-l is planned to be an air-cooled, 15 MW Facility using geothermal fluid in a
closed-loop Rankine cycle. The Facility will consist of at least four geothermal production wells
providing geothermal energy to a single generator with a 15.8 MW generator rating.
Geothermal Production Well Contribution Ratings as of the date of this Agreement:
The sum of these ratings must equal the generator rating specified above.
Production Well RRG#1 55 MW
Production WellRRG#2 23 MW
Production Well RRG#3 95 MW
Production Well RRG#5 07 MW
LOCATION OF FACILITY
The Facility is located at: Section 23, Township 15 South, Range 26 East, Cassia County, Idaho.
SCHEDULED OPERATION DATE
Seller has selected June 15 , 2006, as the Scheduled Operation Date.
MAXIMUM CAPACITY AMOUNT: This value (MW) will be provided by the Seller to Idaho
Power in the request for an Idaho Power Electrical System Study as specified in paragraph 4.
of this Agreement.. This value will be the maximum energy (MW), as determined by a qualified
- 32-
12/28/2004
engineer that potentially could be delivered by the Seller s Facility to the Transmitting Entity
electrical system at any moment in time.
POINT OF DELIVERY
Point of Delivery" means , unless otherwise agreed by both Parties, the point of interconnection
between Idaho Power and the Transmitting Entity at the Minidoka dam substation. The
Transmitting Entity will be the Bonneville Power Administration - Transmission Business Line.
LOSSES
If Idaho Power is provided acceptable and accurate energy (kWh) delivery data by the
Transmitting Entity for actual energy delivered at the Point of Delivery on the Idaho Power
electrical system for this Facility, no energy loss calculation will be required.If the
Transmitting Entity does not provide acceptable and accurate energy delivery data to Idaho
Power then a Loss calculation will be required. The Loss calculation will consist of the most
accurate measurement of the energy losses (kWh), agreed to by both parties, associated with
transformation and transmission of the Facility s generated energy between the Transmitting
Entity s or Idaho Power s metering point and the Point of Delivery on the Idaho Power electrical
system. This loss calculation will be initially set at 2% of the kWh energy production recorded
on the Transmitting Entity s or Idaho Power s Metering equipment. At such time as the Seller
provides Idaho Power with electrical equipment specifications (transformer loss specifications
conductor sizes, etc) of all of the electrical equipment between the Transmitting Entity s or
Idaho Power s Metering equipment and the Point of Delivery on the Idaho Power electrical
system or other acceptable calculations of this energy loss, Idaho Power will configure a revised
loss calculation formula to be agreed 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, the
Parties agree that the loss calculation does not correctly reflect the actual kWh losses attributed
to the electrical equipment between the Idaho Power Metering Equipment and the Idaho Power
electrical system, Idaho Power shall adjust the calculation and retroactively adjust the previous
months kWh loss calculations.
- 33-
12/28/2004
METERING AND TELEMETRY
If Idaho Power is required to install metering and telemetry equipment as specified in Article
of this Agreement, the Idaho Power Metering Equipment, provided by Idaho Power at the
Sellers expense will be located at a point that will enable the Metering Equipment to measure the
Facility s total energy deliveries to the Transmitting Entity. Telemetry equipment will be
installed by Idaho Power at the Seller s expense that will be able to provide continuous
telemetering of the Facility s energy deliveries to the Transmitting Entity. The Seller will
arrange for and make available at Seller s cost, a communications circuit acceptable to Idaho
Power, dedicated to Idaho Power s use to be used for load profiling and another communications
circuit dedicated to Idaho Power s communication equipment for continuous telemetering of the
Facility s energy deliveries to the Transmitting Entity to Idaho Power s Designated Dispatch
Facility. The meters will register kilowatt-hours and kilowatts of demand. Idaho Power
provided meter and communication equipment will be owned and maintained by Idaho Power
with total cost of purchase, installation, operation and maintenance including engineering and
administrative cost to be reimbursed to Idaho Power by the Seller. Seller metering equipment
will be located at all necessary points within the Seller s Facility to accurately measure each
generators energy production, Station Usage, and any other energy diversions that occur prior to
the Idaho Power Metering Equipment.
REACTIVE POWER
Idaho Power will provide no reactive power to the Facility.
COSTS
The cost of the Metering and Telemetry Equipment will be determined based upon the final
design of the Facility and this total cost will be paid to Idaho Power in accordance with Schedule
- 34-
12/2812004
72. In addition to the installation and construction charges above, during the term of this
Agreement, Seller will pay Idaho Power the monthly operation and maintenance charge specified
in Schedule 72 or its successor schedules(s). The monthly operations and maintenance charge
will begin on the first day of the month following completion of the installation of the Idaho
Power provided equipment. The monthly operations and maintenance charge will be based upon
the initial cost paid by the Seller in accordance with Schedule 72. Upon reconciliation of the
actual costs, in accordance with Schedule 72 the monthly operations and maintenance charge will
be adjusted to reflect the actual cost incurred by Idaho Power and the previously charged monthly
operation and maintenance expense will be revised to reflect the actual cost incurred by Idaho
Power. Idaho Power will refund or Seller will remit any underpayment of the adjusted monthly
operations and maintenance charge within sixty (60) days of the determination of this amount.
addition, there will be a monthly charge for the communication circuit lease cost associated with
the telemetry equipment.Seller recognizes that the monthly communications circuit charge may
be adjusted by Idaho Power as the cost to Idaho Power is adjusted by the owner of the
communication circuit(s).
- 35-
12/28/2004
APPEND IX C
ENGINEER'S CERTIFICATION
OPERATIONS & MAINTENANCE POLICY
The undersigned behalf himself and
, hereinafter collectively referred to as "Engineer
hereby states and certifies to the Seller as follows:
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement " between
Idaho Power as Buyer, and US Geothermal, Inc 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.
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
- 36-
12/2812004
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
- 37-
12/2812004
APPEND IX C
ENGINEER'S CERTIFICATION
ONGOING OPERATIONS AND MAINTENANCE
The undersigned , on behalf of himself and
hereinafter collectively referred to as "Engineer " hereby
states and certifies to the Seller as follows:
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement " between
Idaho Power as Buyer, and US Geothermal, Inc 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 hereinafter referred to as the
Project
" .
That the Project which commonl y known
the
Project, is located at
That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to Idaho Power for a twenty (20) year period.
That Engineer has substantial experience in the design, construction and operation of electric
power plants of the same type as this Project.
That Engineer has no economic relationship to the Design Engineer of this Project.
That Engineer has made a physical inspection of said Project, its operations and maintenance
records since the last previous certified inspection. It is Engineer s professional opinion, based on the
Project's appearance, that its ongoing O&M has been substantially in accordance with said O&M Policy;
that it is in reasonably good operating condition; and that if adherence to said O&M Policy continues, the
Project will continue producing at or near its design electrical output, efficiency and plant factor for the
- 38-
12/28/2004
remaInIng 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
- 39-
12/28/2004
APPEND IX C
ENGINEER'S CERTIFICATION
DESIGN & CONSTRUCTION ADEQUACY
The undersigned behalf himself and
, hereinafter collectively referred to as "Engineer
hereby states and certifies to Idaho Power as follows:
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Firm Energy Sales Agreement, hereinafter "Agreement"
between Idaho Power Buyer and Geothermal Inc Seller dated
That the cogeneration or small power production project which is the subject of the
Agreement and this Statement is identified as IPCo Facility No and is hereinafter
referred to as the "Project"
That the Project which commonly known the
Project, is located in Section , Township
. Range , Boise Meridian County, Idaho.
That Engineer recognizes that the Agreement provides for the Project to furnish electrical
energy to Idaho Power for a ) 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.
- 40-
12/2812004
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 5.2 of the
Agreement, in interconnecting the Project with its system, is relying on Engineer s representations and
opinions contained in this Statement.
12.That Engineer certifies that the above statements are complete, true and accurate to the
best of his knowledge and therefore sets his hand and seal below.
(P.E. Stamp)
Date
- 41-
12/2812004