20050729Application.pdf

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BARTON L. KLINE , ISB # 1526
MONICA B. MOEN, ISB # 5734
Idaho Power Company
1221 West Idaho Street
O. Box 70
Boise, Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
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Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTiliTIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR APPROVAL)
OF A FIRM ENERGY SALES AGREEMENT
FOR THE SALE AND PURCHASE OF
ELECTRIC ENERGY BETWEEN IDAHO
POWER COMPANY AND ARROW ROCK
WIND, INC.
CASE NO. IPC-05-
APPLICATION
COMES NOW Idaho Power Company ("Idaho Power" or the "Company
and, pursuant to RP 52, hereby applies for an Idaho Public Utilities Commission ("PUC"
or the "Commission ) Order approving a Firm Energy Sales Agreement between Idaho
Power and Arrow Rock Wind, Inc. ("Arrow Rock") under which Arrow Rock would sell
and Idaho Power would purchase electric energy generated by the Arrow Rock Wind
Generating Project located near Billings, Montana ("Facility
This Application is based on the following:
APPLICATION , Page
Arrow Rock proposes to design , construct, install, own , operate and
maintain a 19.5 MW wind generating facility to be located near Billings , Montana. The
Facility will be a qualified small power production facility under the applicable provisions
of the Public Utility Regulatory Policies Act of 1978 ("PURPA"
II.
On July 28, 2005, Idaho Power and Arrow Rock entered into a Firm
Energy Sales Agreement ("Agreement") pursuant to the terms and conditions of
Commission Order No. 29632 and Commission Order No. 29646. Under the terms of
that Agreement, Arrow Rock elected to contract with Idaho Power for a twenty-year
term. Arrow Rock further elected to contract with the Company using the non-Ievelized
published avoided cost rates as currently established by the Commission for projects
capable of monthly energy deliveries of less than 10 aMW.
III.
The Arrow Rock Agreement is similar in many respects to several recent
agreements entered into by Idaho Power and approved by the Commission (i.e., Pilgrim
Stage Station Wind Park, IPUC Order No. 29771; Oregon Trails Wind Park, IPUC Order
No. 29772). The Agreement contains many of the various PURPA terms and conditions
previously approved by the Commission in other PURPA agreements and as revised by
Commission Order No. 29632 in Case No. I PC-04-8 (US Geothermal complaint).
IV.
The nameplate rating of the Facility is 19.5 MW. As provided by the
Agreement, Arrow Rock will be required to provide data on the Facility that Idaho Power
APPLICATION , Page 2
will use to confirm that, under normal and/or average conditions, the Facility will not
exceed 10 average MW on a monthly basis.
Because the Facility is located in the State of Montana, Arrow Rock has
made arrangements with NorthWestern Energy to deliver the Net Energy from this
Facility to the Idaho Power electrical system at the points of delivery identified in the
Agreement. This transmission arrangement with NorthWestern Energy means that the
Company will receive firm energy from the Facility rather than the intermittent energy
generally associated with a wind generating project. Energy delivered from the Facility
to Idaho Power will be a flat, firm monthly schedule of energy for NorthWestern. Energy
deliveries from the Arrow Rock project are for nine months out of the year and exclude
deliveries during the spring months of March , April and May when the value of energy
on the Company s system is the lowest.
VI.
Idaho Power currently has pending before the Commission a request for a
temporary suspension of Idaho Power s obligation to enter into contracts to purchase
energy generated by wind-powered small power production facilities (Case No. IPC-
05-22). In its testimony in that case , the Company described the reasons why it
believes the Arrow Rock project should not be subject to any temporary suspension if
the Commission ultimately determines that such a suspension is in the public interest.
Idaho Power requests that the Commission take administrative notice of the testimony
of John R. Gale filed in Case No. IPC-05-22 and Exhibit No.1 to Mr. Gale s testimony
which describe the maturity of the contracting process followed by Idaho Power and
APPLICATION , Page 3
Arrow Rock. For the convenience of the Commission , a copy of the pertinent sections
of Mr. Gale s testimony in Case No. IPC-05-22 and Exhibit 1 to that testimony are
included as Exhibit 2.
VII.
Arrow Rock has selected December 1 , 2005 as the scheduled operation
date for this Facility (Appendix ") of the Agreement. In the Agreement, various
requirements have been placed upon Arrow Rock in order for Idaho Power to accept
deliveries from this Facility. Idaho Power will monitor compliance with these initial
requirements. In addition , Idaho Power will continue to monitor the ongoing
requirements through the full term of this Agreement.
VIII.
Section 22 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 that all payments that Idaho Power makes to Arrow Rock for purchases
of energy will be allowed as prudently incurred expenses for ratemaking purposes.
IX.
The Agreement, as signed and submitted by the Parties thereto, contains
Non-Levelized Published Avoided Cost Rates in conformity with applicable IPUC Orders
and is enclosed as Exhibit
Service of pleadings , exhibits , orders and other documents relating to this
proceeding should be served on the following:
APPLICATION , Page 4
Barton L. Kline, Senior Attorney
Monica B. Moen , Attorney II
Idaho Power Company
O. Box 70
Boise , Idaho 83707
bkline
(g)
idahopower.com
mmoen
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idahopower.com
Randy C. Allphin
Contract Administrator
Idaho Power Company
O. Box 70
Boise , Idaho 83707
rn!!phin
(g)
idahopower.com
NOW, THEREFORE , based on the foregoing, Idaho Power Company
hereby requests that the Commission issue its Order:
(1 )Approving the enclosed Firm Energy Sales Agreement between
Idaho Power Company and Arrow Rock Wind , 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 Arrow Rock Wind , Inc.
be allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this 28th day of July, 2005.
~l~
BART N L. KLINE
Attorney for Idaho Power Company
APPLICATION, Page 5
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 28th day of July, 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:
Ted Sorensen
Arrow Rock Wind , Inc.
5203 South 11 th East
Idaho Falls, 10 83404
Hand Delivered
S. Mail
Overnight Mail
FAX
BARTON L. KLINE
CERTIFICATE OF MAILING
EXHIBIT
Article
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
ARROW ROCK WIND, 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
Records
Protection
Operations
Indemnification and Insurance
Force Majeure
Liability; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Governmental Authorization
Commission Order
Successors and Assigns
Modification
Taxes
Notices
Additional Terms and Conditions
Severability
Counterparts
Entire Agreement Signatures
Appendix A
Appendix B
Appendix C
6/1612005
FIRM ENERGY SALES AGREEMENT
(10 aMW or Less)
ARROW ROCK WIND PROJECT
Project Number: 41719142
THIS AGREEMENT. entered into on this :?f.f-/r.day of 2005 between
ARROW ROCK WIND, an Idaho corporation (Seller), and IDAHO POWER COMPANY, an
Idaho corporation (Idaho Power), hereinafter sometimes referred to collectively as "Parties" or
individually as "Party.
WITNESSETH:
WHEREAS, Seller will Lease and ensure the maintenance and operation of 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 System Operations Group, or any subsequent
group designated by Idaho Power.
1.4 Facility - That electric generation facility Leased by the Seller and described in Appendix B of
this Agreement.
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1.5
1.6
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
per month and is therefore eligible to be paid the published rates in accordance with Commission
Order No. 29632.
1.7 Lease" - Acquisition of the exclusive rights to the generation equipment and electrical energy
output of the Facility and the Interconnection Facilities. The Lease will be for the specific
equipment as specified in Appendix B and will obligate the Seller to ensure maintenance and
operation of the Facility and all associated equipment in a manner that will allow the Facility to
deliver energy to the Transmitting Entity(s) in a safe and reliable manner in the amounts specified
in paragraph 6.2 of this Agreement for the full term of this Agreement. The lease shall have an
option to purchase in favor of Arrow Rock Wind Inc. Expiration or termination of the Lease, for
any reason ,except purchase by Arrow Rock Wind Inc, during the term of this Agreement will be
a Material Breach of this Agreement.
1.8 Losses" - The loss of energy expressed in kilowatt hours (kWh) occurring as a result of the
transformation and transmission of energy between the Facility and the Idaho Power electrical
system.
1.9 Market Energy Cost" - Eighty-five percent (85%) of the weighted average of the daily on-peak
and off-peak Dow Jones Mid-Columbia Index (Dow Jones Mid-C Index) prices for non-firm
energy. If the Dow Jones Mid-Columbia Index price is discontinued by the reporting agency, both
Parties will mutually agree upon a replacement index, which is similar to the Dow Jones Mid-
Columbia Index. The selected replacement index will be consistent with other similar agreements
and a commonly used index by the electrical industry.
1.10 Material Breach" - A Default (paragraph 20.2.1) subject to paragraph 20.
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1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
Maximum Capacity Amount"- The maximum capacity (MW) of the Facility will be as
specified in Appendix B of this Agreement.
Monthly Net Energy Average MW"- Net Energy as defined in paragraph 1.14 divided by 1 000
divided by the hours in the month ((Net Energy / 1000) / hours in the month). Hours in the month
are the calendar days of the month times 24 hours.
Monthly Net Energy Amount Average MW" - Monthly Net Energy Amounts as defined in
paragraph 6.2 divided by 1 000 divided by the hours in the month. ((Net Energy Amount / 1000) /
hours in the month). Hours in the month are the calendar days of the month times 24 hours.
Net Energy" - All of the electric energy produced by the Facility less Station Use, less Losses
and energy supplied by the Transmitting Entity on behalf of the Seller so that the energy
deliveries to Idaho Power will comply with the Transmitting Entity s scheduling requirements
specified in Article 10.1 of this Agreement, expressed in kilowatt hours (kWh), which Seller
commits to deliver as specified in Article VI and the Transmitting Entity(s) schedules and
delivers to Idaho Power at the Point(s) of Delivery for the full term of the Agreement. The
amount of Net Energy scheduled and delivered to the Idaho Power electrical system will never
exceed the Idaho Power Electrical System Allocation specified in paragraph 4.8 of this
Agreement.
Operation Date - The day commencing at 0001 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(s)
deliver the scheduled Net Energy to the Idaho Power electrical system.
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.
Season" - The three periods identified in paragraph 6.1 of this Agreement.
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1.20
1.21
1.22
1.23
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 scheduled and delivered by the Transmitting Entity(s) on the
Seller s behalf 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 scheduled and delivered by the Transmitting Entity(s) on the Seller s behalf 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 6.2. then all Net Energy scheduled and
delivered by the Transmitting Entity(s) to Idaho Power on the Seller s behalf for that given month
or (3) All Net Energy scheduled and delivered by the Transmitting Entity(s) on the Seller s behalf
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( s)" - The signatory( s) (other than the Seller) to the Transmission
Agreement(s) 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
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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
may be required to maintain the Facility s Qualifying Facility status during the term of this
Agreement and Seller s failure to maintain Qualifying Facility status will be a Material Breach of
this Agreement. Idaho Power reserves the right to review the Seller s Qualifying Facility status
and associated support and compliance documents at anytime during the term of this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
Prior to the Operation Date and as a condition of Idaho Power s acceptance of deliveries of
energy from the Seller, Seller shall:
1.1 Submit proof to Idaho Power that all licenses, permits or approvals necessary for Seller
operations have been obtained from applicable federal, state or local authorities
including, but not limited to, evidence of compliance with Subpart B, 18 CFR 292.207.
1.2 Opinion of Counsel - Submit to Idaho Power an Opinion Letter signed by an attorney
admitted to practice and in good standing in the State of Idaho providing an
opinion that Seller s licenses, permits and approvals as set forth in paragraph 4.
above are legally and validly issued, are held in the name of the Seller and, based on
a reasonable independent review, counsel is of the opinion that Seller is in substantial
compliance with said permits as of the date of the Opinion Letter. The Opinion Letter
will be in a form acceptable to Idaho Power and will acknowledge that the attorney
rendering the opinion understands that Idaho Power is relying on said opinion. Idaho
Power s acceptance of the form will not be unreasonably withheld. The Opinion Letter
will be governed by and shall be interpreted in accordance with the legal opinion accord
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1.3
1.4
1.5
1.7
of the American Bar Association Section of Business Law (1991).
Initial Capacity Determination - Submit to Idaho Power such data as Idaho Power may
reasonably require to perform the Initial Capacity Determination. Such data may include
but not be limited to, equipment specifications, prime mover data, resource
characteristics, normal and/or average operating design conditions and Station Use data.
Upon receipt of this information, Idaho Power will review the provided data and if
necessary, request additional data to complete the Initial Capacity Determination within a
reasonable time.
Engineer s Certifications - Submit an executed Engineer s Certification of Design &
Construction Adequacy and an Engineer s Certification of Operations and Maintenance
(O&M) Policy as described in Commission Order No. 21690. These certificates will be
in the form specified in Appendix C but may be modified to the extent necessary to
recognize the different engineering disciplines providing the certificates.
Insurance - Submit written proof to Idaho Power of all insurance required in Article XIV.
Transmission Agreement( - Provide Idaho Power with a copy of all Firm Transmission
Agreements executed by the Seller and the Transmitting Entity(s) to enable the Seller to
deliver the Net Energy from this Facility to the Idaho Power electrical system at the
Point(s) of Delivery identified within Appendix B and in the energy amounts designated
in paragraph 4.8 of this Agreement. These Firm Transmission Agreements must be in a
form acceptable to Idaho Power. Idaho Power s acceptance will not be unreasonably
withheld.
Lease Agreement - Provide Idaho Power a copy of the Lease agreement between the
Seller and the owner of the actual generation equipment. This Lease must be in a form
acceptable to Idaho Power. The Lease will include but not be limited to the Seller
exclusive lease rights to the physical assets of the Facility, the electrical output from
these leased assets and adequate interest in the electrical interconnection and electrical
collection system to enable the Seller to deliver all energy produced by the leased assets
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1.8
to the Transmitting Entity. 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
not be unreasonably withheld by Idaho Power.
Idaho Power Electrical System Allocation - As of the date of this Agreement, the Seller
has requested to deliver energy to Idaho Power in the following maximum amounts at the
designated Points of Delivery on the Idaho Power electrical system for the designated
calendar months:
Jan 9MW Jefferson line Jul 7 MW LOLO
Feb 9MW Jefferson Line Aug 7 MW LOLO
Mar OMW Sep 9 MW Jefferson line
Apr OMW Oct 9 MW Jefferson line
May OMW Nov 9 MW Jefferson Line
Jun 7MW LOLO Dec 9 MW Jefferson Line
Idaho Power agrees to accept the Seller s energy from the Transmitting entity(s) at the
requested Points of Delivery at these maximum amounts and for the requested calendar
month as designated, contingent upon the Seller complying and maintaining all other
requirements of this Agreement. Under no circumstances will the Idaho Power Electrical
System Allocation exceed the Maximum Capacity amount.
Idaho Power Adjustment of Electrical System Allocation
Annual Review Reduction - Annually, at the end of each Contract Year
Idaho Power may review the Seller s Net Energy deliveries to Idaho Power
Company. If Idaho Power Company determines that any of the Monthly Net
Energy Average MW are less than the month's MW amount designated in
paragraph 4.8 and this pattern is consistent with previous months and/or
years, Idaho Power may, after notice to the Seller, reduce the monthly Idaho
Power Electrical System Allocation for this Facility at the identified Point(s)
of Delivery for the individual months. These revised monthly MW amounts
will then replace the amount in paragraph 4.9 for the specific month for the
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remaining term of the Agreement or until such time as the amount is revised
as provided herein.
Net Energy Amount Reduction - If at any time during the term of this
Agreement the Monthly Net Energy Amount Average MW is less than 90%
of the corresponding Idaho Power Electrical System Allocation designated in
paragraph 4.9 the monthly Idaho Power Electrical System Allocation in
paragraph 4.1.9 will be reduced to be 110% of the currently calculated
Monthly Net Energy Amounts Average MW. These revised monthly Idaho
Power Electrical System Allocation amounts will then replace the Idaho
Power Electrical System Allocation amounts in paragraph 4.9 for the
specific month( s) for the remaining term of the agreement or until such time
as the Idaho Power Electrical System Allocation is revised as provided
herein.
Increase in Idaho Power Electrical System Allocation - Under no
circumstances will the Seller request to deliver energy that exceeds the
Maximum Capacity Amount. If the Seller wishes to increase the monthly
Idaho Power Electrical System Allocation designated in paragraph 4.9 to a
level equal to or less than the Maximum Capacity Amount;
i. The Seller must provide Idaho Power with acceptable written
documentation verifying that the Seller s Facility is capable of
consistently and reliably delivering the energy amounts as requested
by the Seller.
ii. The Seller must provide Idaho Power with acceptable written
verification that the Seller is able to obtain sufficient Firm capacity
on a Transmitting Entity (s ) electrical system to enable the Seller to
deliver the energy to the Idaho Power electrical system.
111. Seller and Transmitting Entity ( s) will request, in writing, a specific
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6/16/2005
Point of Delivery to Idaho Power for the Seller s energy deliveries
specified in paragraph 6.2 to be scheduled to Idaho Power as
specified in paragraph 10.1 of this Agreement. 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
Seller s energy at the Seller and Transmitting Entity s requested
Point of Delivery.
iv. If said study shows that Idaho Power will be unable to receive the
Seller s energy at the requested Point of Delivery, the Seller and
Transmitting Entity may request a different Point of Delivery or
revise the energy amounts, and a similar study, at the Seller
expense, will be conducted.
v. If the Seller and Transmitting Entity request permission to deliver
the Seller s energy at a Point of Delivery that Idaho Power has
identified as being unable to receive the Seller s energy, at Seller
request and expense, Idaho Power will conduct a study to determine
the necessary upgrades and/or modifications required to enable
receipt of the Seller s energy at the requested Point of Deli very.
vi. 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 Seller s energy at
the requested Point of Delivery and integration into the Idaho Power
Company electrical system. 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
request. Upon completion of the Seller s request, Idaho Power will
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reconcile the actual expenses with the previously paid deposit and
the appropriate refund or additional billing will be processed. Seller
will be required to pay any additional billing due Idaho Power
within 30 days of Seller s receipt of the billing invoice.
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 in a form acceptable to Idaho Power has
been received.
c) Seller has demonstrated to Idaho Power s satisfaction that the Lease documents are
complete and the Facility is complete and able to provide energy in a consistent
reliable and safe manner and has requested an 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 as defined in
section 1.14 of this Agreement and subsequently scheduled and delivered to Idaho Power by the
Transmitting Entity(s) on the Seller s behalf to the Point of Delivery during the Calendar months
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of January, February, June, July, August, September, October, November and December. At no
time will the total amount of Net Energy delivered by the Transmitting Entity(s) to the Point of
Delivery exceed the Idaho Power Electrical System Allocation.
Net Energy Amounts - Seller intends to produce and Transmitting Entity(s) shall deliver Net
Energy in the following monthly amounts:
Initial Year Monthly Net Energy Amounts:
Season 1
Month kWh
March
April
May
July 208 000
August 208 000
November 6,480 000
December 696 000
June 040 000
September 6,480 000
October 696 000
January 696,000
February 048 000
Season 2
Season 3
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 26., no
later than 5 :00 Pm 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
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2.4
1 No later than the Operation Date, by written notice given to Idaho Power in
accordance with paragraph 26., 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 26., no later than
5 :00 Pm 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 13., Transmitting Entity(s)
are excused from scheduling and delivering Net Energy as specified in paragraph 13.
or if the Seller declares a Suspension of Energy Deliveries as specified in paragraph
13.1 and the Seller s 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 13., 13.2 or 13.1 occurs will be
reduced in accordance with the following:
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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 13.1 or the
Transmitting Entity is excused from delivering Net Energy
as specified in paragraph 13.2.2 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 13.1 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.
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 13.2.1 or 13.
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.
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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
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/k Wh Mills/k Wh Mills/k Wh
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 46.75.63.
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.
2027 61.99.83.
2028 62.102.85.
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.
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7.4
Payment Due Date - Energy payments to the Seller will be disbursed within 25 days of the date
which Idaho Power receives acceptable documentation of the monthly Net Energy actually
scheduled and delivered to Idaho Power by the Transmitting Entity(s) on the Seller s behalf 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 18
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.
ARTICLE IX: FACILITY AND INTERCONNECTION
Design of Facility - Seller will Lease the Facility and ensure ongoing operation and maintenance
of the Interconnection Facilities so as to allow safe and reliable generation and delivery of Net
Energy to the Transmitting Entity(s) for the full term of the Agreement.
Interconnection Facilities - Seller will Lease and/or construct, install, own and maintain all Inter-
connection Facilities other than those owned, installed or maintained by the Transmitting
Entity(s). Seller will pay all costs of interconnecting with the Transmitting Entity(s) and
transmitting Net Energy to Idaho Power, scheduling energy into the Idaho Power system and any
other costs associated with integrating the Seller s Net Energy into the Idaho Power electrical
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10.
system.
ARTICLE X: TRANSMISSION AGREEMENT
Transmission Agreement - The Seller will arrange and pay for the firm delivery of Net Energy
over the facilities of the Transmitting Entity (Northwestern Energy). Northwestern Energy will
be the exclusive scheduling entity for this facility and will arrange all energy deliveries over any
other utilities transmission paths to the Idaho Power Point(s) of Delivery. The delivery of Net
Energy from the Facility to the Idaho Power Point(s) of Delivery shall be in accordance with the
terms and conditions of the firm Transmission Agreements between the Seller and the
Transmitting Entity(s), which will include provisions requiring the Transmitting Entity(s) to
provide the following:
10.1.1 Monthly Scheduled Energy Deliveries - The Transmitting Entity(s) will provide Idaho
Power with a schedule of the next month's hourly scheduled Net Energy deliveries, at a
minimum of 7 days prior to the beginning of the month. The hourly scheduled Net
Energy delivery will be a constant value for every hour of the month and will remain
unchanged for all hours of the month. The Transmitting Entity(s) will never schedule or
deliver more energy than the amounts designated in paragraph 4.9 of this Agreement to
Idaho Power for the Facility.The Transmitting Entity(s) shall be excused from
scheduling Net Energy to Idaho Power if the Seller declares and Idaho Power accepts the
Seller Facility Declaration of Suspension of Energy Deliveries as described in
paragraph 13.3 or the Transmitting Entity(s) determines that curtailment, interruption or
reduction of Net Energy deliveries is necessary because of line construction, maintenance
requirements, emergencies, electrical system operating conditions on its system, or as
otherwise required by Prudent Electrical Practices. When reasonable to do so, the
Transmitting Entity(s) shall notify Idaho Power of any curtailment, interruption or
reduction of the Net Energy deliveries, prior to the curtailment, interruption, or reduction
of Net Energy deliveries to the Point(s) of Delivery. This notification will include the
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10.
10.3
10.4
11.1
11.2
estimated duration and reason for the event.In the case of unplanned events, the
Transmitting Entity will promptly notify Idaho Power of the estimated duration and
reason of the event upon occurrence of the event.
10.1.2 Energy Reserve Requirements - The Transmitting Entity(s) will provide all generation
reserves as required by the Western Electricity Coordinating Council (WECC) and/or as
required by any other governing agency or industry standard to deliver the Net Energy to
the specified Point(s) of Delivery.
Acceptance of Transmission Agreement - This Agreement is expressly conditioned and
contingent upon Idaho Power s acceptance of the Transmission Agreements. 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 scheduled and delivered by the
Transmitting Entity(s) to Idaho Power at the Point(s) of Delivery as shown on Idaho Power
daily system logs. Any electrical energy losses between the Seller s Facility and the Idaho Power
electrical system will be deducted from the Facility s electrical generation in determining the Net
Energy scheduled and delivered to Idaho Power.
Documentation - Seller will provide Idaho Power with monthly documentation in a form
acceptable to Idaho Power showing the Points of Delivery, amount of energy scheduled and
delivered to Idaho Power.
ARTICLE XI - RECORDS
Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate total generation, Net Energy, and Station Use 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
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12.
13 .
13.
normal business hours, to inspect and audit any or all generation, Net Energy and Station Use
records pertaining to the Seller s Facility.
ARTICLE xn - PROTECTION
Seller will Lease the Facility and ensure ongoing operation and maintenance of the Facility and
any Interconnection Facilities in accordance with Prudent Electrical Practices, the National
Electric Safety Code and any other applicable local, state and federal codes.
ARTICLE Xill - OPERATIONS
Communications - Idaho Power and the Transmitting Entity(s) on behalf of the Seller shall
maintain appropriate operating communications through Idaho Power s Designated Dispatch
Facility and Seller shall require the Transmitting Entity(s) to report to Idaho Power at the times
and in the manner established in the Transmission Agreements described in paragraph 10.
Energy Acceptance
13.Idaho Power shall be excused from accepting and paying for Net Energy produced by the
Facility and delivered by the Transmitting Entity(s) to the Point(s) of Delivery, if it is
prevented from doing so by an event of Force Majeure, or if Idaho Power determines that
curtailment, interruption or reduction of Net Energy deliveries is necessary because of
line construction or maintenance requirements, emergencies, electrical system operating
conditions on its system or as otherwise required by Prudent Electrical Practices provided
that during such curtailment, interruption or reduction Idaho Power, the Transmitting
Entity(s) and the Seller shall within 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 other Points of
Delivery. The Seller will be responsible for all costs associated with coordinating,
scheduling and delivering Net Energy to the Idaho Power electrical system at other Points
of Delivery. If, for reasons other than an event of Force Majeure, Idaho Power requires
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13.
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.
13.2 The Seller and Transmitting Entity(s) shall be excused from scheduling and delivering
Net Energy produced by the Facility to the Idaho Power Point(s) of Delivery, if the
Transmitting Entity is prevented from scheduling and delivering Net Energy by an event
of Force Majeure, or if the Transmitting Entity determines that curtailment, interruption
or reduction of Net Energy deliveries is necessary because of line construction or
maintenance requirements, emergencies, electrical system operating conditions on its
system or as otherwise required by Prudent Electrical Practices provided that during such
curtailment, interruption or reduction Idaho Power, the Transmitting Entity(s) and the
Seller shall within 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 other Points of Delivery. The Seller will
be responsible for all costs associated with coordinating, scheduling and delivering Net
Energy to the Idaho Power electrical system at other Points of Delivery.
13.Under no circumstances will the Transmitting Entity(s) schedule and/or deliver Net
Energy on behalf of the Seller to the Point(s) of Delivery in an amount that exceeds the
energy amounts designated in paragraph 4.1.9. Either the Transmitting Entity(s)' or
Seller s failure to limit scheduling and/or deliveries of Net Energy to the Point of
Delivery to these amounts will be a Material Breach of this Agreement.
Seller Declared Suspension of Energy Deliveries
13.1 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
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14.1
preventative maintenance of the Seller s Facility, Seller may, after giving notice as
provided in paragraph 13.2 below, temporarily suspend all deliveries of Net Energy to
Idaho Power from the Facility or from individual generation unites) at 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 s 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 13.2 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.
13.2 If the Seller desires to initiate a Declared Suspension of Energy Deliveries as provided in
paragraph 13., 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 XXVI 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 13.1. Idaho Power s acceptance of the Seller
forced outage as an acceptable forced outage will be based upon the clear documentation
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.
ARTICLE XIV: INDEMNIFICATION AND INSURANCE
Indemnification - Each Party shall agree to hold harmless and to indemnify the other Party, its
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14.
14.
14.4
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, lease, operation or
maintenance of, or by failure of, any of such Party s works or facilities used in connection with
this Agreement. The indemnifying Party shall, on the other Party s request, defend any suit
asserting a claim covered by this indemnity. The indemnifying Party shall pay all costs, including
reasonable attorney fees that may be incurred by the other Party in enforcing this indemnity.
Insurance - During the term of this Agreement, Seller shall secure and continuously carry the
following insurance coverage:
14.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.
14.2 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 14.2 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.
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15.
ARTICLE XV. FORCE MAJEURE
As used in this Agreement
, "
Force Majeure" or "an event of Force Majeure" means any cause
beyond the control of the Seller, Transmitting Entity(s) or of Idaho Power which, despite the
exercise of due diligence, such Party is unable to prevent or overcome. Force Majeure includes
but is not limited to, acts of God, fire, flood, storms, wars, hostilities, civil strife, strikes and other
labor disturbances, earthquakes, fires, lightning, epidemics, sabotage, or changes in law or
regulation 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 XVI: LIABILITY; DEDICATION
16.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
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17.
18.
19.
19.2
20.
20.
Idaho Power as an independent public utility corporation or Seller as an independent individual or
entity.
ARTICLE XVll: 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.
ARTICLEXVill: 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 XIX: 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.
ARTICLE XX: 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 -
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20.
20.
20.
Defaults.If either Party fails to perform any of the terms or conditions of this
Agreement (an "event of default"), the nondefaulting Party shall cause notice in
writing to be given to the defaulting Party, specifying the manner in which such
default occurred. If the defaulting Party shall fail to cure such default within the sixty
(60) days after service of such notice, or if the defaulting Party reasonably
demonstrates to the other Party that the default can be cured within a commercially
reasonable time but not within such sixty (60) day period and then fails to diligently
pursue such cure, then, the nondefaulting Party may, at its option, terminate this
Agreement and/or pursue its legal or equitable remedies.
Material Breaches - The notice and cure provisions in paragraph 20.1 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:
20.
20.
20.
Insurance - Evidence of compliance with the provisions of paragraph 14.2. If Seller
fails to comply, such failure will be a Material Breach and may only be cured by
Seller supplying evidence that the required insurance coverage has been replaced or
reinstated;
Engineer s Certifications - Every three (3) years after the Operation Date, Seller will
supply Idaho Power with a Certification of Ongoing Operations and Maintenance (0
& 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
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21.1
22.
23.
additional permits or licenses. At least every fifth Contract Year, Seller will update the
documentation described in Paragraph 4.1. If at any time Seller fails to maintain
compliance with the permits and licenses described in paragraph 4.1 or to provide
the documentation required by this paragraph, such failure will be an event of default
and may only be cured by Seller submitting to Idaho Power evidence of compliance
from the permitting agency.
ARTICLE XXI: GOVERNMENTAL AUTHORIZATION
This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
ARTICLE XXll: 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 XXill: 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
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24.
25.
26.
exercising such rights or remedies.
ARTICLE XXIV: 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 XXV: 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 XXVI: 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:President
Arrow Rock Wind, Inc.
5203 South 11th East
Idaho Falls, Idaho 83404
To Idaho Power:
Original document to:
Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
POBox 70
Boise, Idaho 83707
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27.
28.
29.
30.
ARTICLE XXVll: 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 XXVill: SEVERABILITY
The invalidity or unenforceability of any term or provision of this Agreement shall not affect the
validity or enforceability of any other terms or provisions and this Agreement shall be construed
in all other respects as if the invalid or unenforceable term or provision were omitted.
ARTICLE XXIX: COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
ARTICLE XXX: ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement of the Parties concerning the subject matter
hereof and supersedes all prior or contemporaneous oral or written agreements between the
Parties concerning the subject matter hereof.
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IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be executed
in their respective names on the dates set forth below:
Idaho Power Company
)(
n XX MdReox iK~j(~ RJexooxOOX RO(w~~~
Vern Porter, Mgr., Power Supply Operati ons
Dated Dated
(It/i.'-' 1 2005
Idaho Power
- 28-
Arrow Rock Wind Inc.
~._,,~
Ted S. Sorenson, President
cA.. - C-2bo
Seller
6/1612005
APPEND IX A
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
At the end of each month, the Seller will provide Idaho Power with monthly documentation
acceptable to Idaho Power showing the Point(s) of Delivery and the amount of energy actually
scheduled and delivered to Idaho Power by the Transmitting Entity( s). In accordance with
paragraph 10.4, such documentation, subject to subsequent review by Idaho Power, will be the
basis of payment for energy purchased by Idaho Power from the Seller.
Submit this documentation to:
Idaho Power Company
Attn: Cogeneration and Small Power Production
POBox 70
Boise, Idaho 83707
Seller s Contact Information
24-Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
Ted S. Sorenson
208- 522-8069
208-589-6908
Project On-site Contact information
Telephone Number:
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APPENDIX B
FACILITY AND POINT OF DELIVERY
PROJECT NO. 41719142
ARROW ROCK WIND PROJECT
DESCRIPTION OF FACILITY
Arrow Rock Wind Facility-
The Facility consists of an exclusive Lease for thirteen (13) 1.5 MW GE wind turbines with a
total nameplate rating of 19.5 MW inclusive of all of the electrical output from these thirteen
wind turbines as well as adequate distribution collection system and electrical interconnection to
enable the Seller to deliver all of the energy from this Facility to the Transmitting Entity. Specific
serial numbers or other unique identification of each individual wind turbine is as follows:
Turbine 41 Serial No:Turbine 42 Serial No:
Turbine 43 Serial No:Turbine 44 Serial No:
Turbine 45 Serial No:Turbine 46 Serial No:
Turbine 47 Serial No:Turbine 48 Serial No:
Turbine 49 Serial No:Turbine 50 Serial No:
Turbine 51 Serial No:Turbine 52 Serial No:
Turbine 53 Serial No:
LOCATION OF FACILITY
Facility is located approximately 100 miles northwest of Billings, Montana in Wheatland
County on the west side of Highway 191 in the northwest quarter of Section 36
Township ION, Range 15E.
SCHEDULED OPERATION DATE
Seller has selected December 1 , 2005 as the Scheduled Operation Date.
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MAXIMUM DELIVERED CAPACITY AMOUNT: 10 MW
POINT OF DELIVERY
Point of Delivery" means, unless otherwise agreed by both Parties, the point on the Idaho
Power Company electrical system where the Transmitting Entity(s) schedule and deliver energy
to Idaho Power Company. For the months of January, February, September, October, November
and December the Point of Delivery will be the point known as the Jefferson Line, for the
months of June, July and August the Point of Delivery will be the point known as LOLO. There
is no Point of Delivery for the months of March, April and May as the Seller will not be
delivering energy to Idaho Power during these months. .
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APPENDIX C
ENGINEER'S CERTIFICATION
OPERATIONS & MAINTENANCE POLICY
The undersigned behalf himself and
, hereinafter collectively referred to as "Engineer
hereby states and certifies to the Seller as follows:
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Energy Sales Agreement, hereinafter " Agreement," between
Idaho Power as Buyer, and , 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
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Project's producing at or near the design electrical output , efficiency and plant factor for a twenty (20)
year period.
That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement
is relying on Engineer s representations and opinions contained in this Statement.
10.That Engineer certifies that the above statements are complete, true and accurate to the best of his
knowledge and therefore sets his hand and seal below.
(P .E. Stamp)
Date
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APPENDIX C
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 , 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 commonly known
the
Project, is located at
That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to Idaho Power for a twenty (20) year period.
That Engineer has substantial experience in the design, construction and operation of electric
power plants of the same type as this Project.
That Engineer has no economic relationship to the Design Engineer of this Project.
That Engineer has made a physical inspection of said Project, its operations and maintenance
records since the last previous certified inspection. It is Engineer s professional opinion, based on the
Project's appearance , that its ongoing O&M has been substantially in accordance with said O&M Policy;
that it is in reasonably good operating condition; and that if adherence to said O&M Policy continues, the
Project will continue producing at or near its design electrical output, efficiency and plant factor for the
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remammg years of the Agreement.
That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement
is relying on Engineer s representations and opinions contained in this Statement.
10.That Engineer certifies that the above statements are complete, true and accurate to the best of his
knowledge and therefore sets his hand and seal below.
(P.E. Stamp)
Date
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APPENDIX C
ENGINEER'S CERTIFICATION
DESIGN & CONSTRUCTION ADEQUACY
The undersigned behalf himself and
, hereinafter collectively referred to as "Engineer
hereby states and certifies to Idaho Power as follows:
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Firm Energy Sales Agreement, hereinafter "Agreement"
between Idaho Power Buyer and 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 of the Project, including the civil
work, electrical work, generating equipment, prime mover conveyance system, Seller furnished
Interconnection Facilities and other Project facilities and equipment.
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6/1612005
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 of the Project is such that with reasonable and prudent operation and
maintenance practices by Seller, the Project is capable of performing in accordance with the terms of the
Agreement and with Prudent Electrical Practices for a ) year period.
11.That Engineer recognizes that Idaho Power, in accordance with paragraph 5.3(2) of the
Agreement, in interconnecting the Project with its system, is relying on Engineer s representations and
opinions contained in this Statement.
12.That Engineer certifies that the above statements are complete, true and accurate to the
best of his knowledge and therefore sets his hand and seal below.
(P.E. Stamp)
Date
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6/1612005
Appendix A
DELIVERY AGREEMENT
BETWEEN
ARROW ROCK WIND, INC.
AND
NORTHWESTERN ENERGY
This Agreement, entered into this 9th day of June, 2005, is by and between Arrow Rock Wind, Inc., an
Idaho Corporation
, ("
Arrow Rock"
),
and NorthWestern Corporation d/b/a NorthWestern Energy, a
Delaware Corporation ("NWE"). Arrow Rock and NWE are sometimes referred to in this Agreement
collectively as "Parties" and individually as "Party.
RECITALS
WHEREAS, Arrow Rock maintains the rights to all QF energy from an electric
wind generation project located near Judith Gap, Montana with a nameplate
capacity of 19.5 MW ("Facility"); and
ll.WHEREAS, Idaho Power ("QF Buyer ) desires to purchase from Arrow Roc~
and Arrow Rock desires to sell to QF Buyer, a quantity of firm energy produced
from the Facility, and energy provided by NWE so that the energy deliveries to
Idaho Power will be in conipliance with item 2 listed below and as identified in
Attachment A of this Delivery Agreement ("Attachment A") or as modified by
mutual agreement of the Parties, during the months of June through February,
inclusive each calendar year beginning in 2005 and continuing for a period
twenty (20) years; and
ID.WHEREAS, NWE will facilitate such deliveries to QF Buyer, as long as the
agreement between the QF Buyer and Arrow Rock is in effect in accordance with
the general terms and conditions set forth herein.
Therefore, the Parties agree to the following basic terms and conditions:
2525445vl
Arrow Rock will deliver and NWE will accept the Arrow Rock energy generated
by the Facility for scheduling, firming and shaping purposes.
NWE shall perform the duties required of the Transmitting Entity established in
Attachment B of this Delivery Agreement ("Attachment B"), as the exclusive
scheduling agent. Specifically NWE will provide a hourly flat, firm QF energy
schedule from its system to the Point of Delivery e'POD") with the QF Buyer on
behalf of Arrow Rock, as identified in Attachment beginning on the Contract
Date and subsequently each period for each year for the duration of 20 years.
NWE has obtained and agrees to maintain finn transmission capacity
reservations (or like reservations) from the NWE system and any other required
transmission systems (i.e. Avista Corp) in order to deliver the energy as specified
in the Firm Energy Sales Agreement between Idaho Power Company and Arrow
Rock Inc. to the QF Buyer s POD in the amount equal tQ the quantity each
month, as designated in Attachment A, and consistent with the general terms and
conditions of the Avista and NWE Open Access Tariff.
Appendix A
NWE, as scheduling agent for Arrow Rock, will provide a pre-schedule of the
QF energy deliveries to the QF Buyer in accordance with the scheduling,
remedial action and checkout protocols of the Western Energy Coordinating
Council (WECC) and North American Reliability Council (NERC). Arrow Rock
will maintain timely access to the final checkout of the energy schedules each
month.
The hourly firm energy schedule facilitated by the finD transmission reservation
shaH be equal to the quantity set forth in Attachment A and shall remained
unchanged for the duration of the month, unless such deliveries are intenupted
by an event of force m~eure, or are curtailed by the QF Buyer or by the
transmitting entity consistent with its Open Access Tariff and Prudent Electric
Practices on fll1Il transmission.
NWE will provide all necessary ancillary services, such as reserves, to provide
the product described in Paragraph 2, above.
In consideration for these services, Arrow Rock shall compensate NWE, at
market-based rates for the fInD transmission, energy losses, shaping and
scheduling services.
The Parties agree that the QF Buyer is a third party beneficiary of this
Agreement.
Nothing in this Agreement shall supersede anything in the Firm Energy Sales
Agreement between Idaho Power Company and Arrow Rock Inc.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in their
respective names by their authorized officers.
2S2S44Svl
NorthWestern Corporation, d/b/a
NorthWestern Energy
By. 0~J~
Title: E..J~l(C..y SupP
Arrow Rock Wind, Ine
By: ed S. Sorenson
j)
Title: Ma"4giag P.mtef r r
~)
2525445v I
Month
January
February
March
April
May
June
July
August
September
October
November
December
Attachment A
Hourly
Exchange
Ener2Y
Monthly
Exchange
Enersor
696
048
040
208
208
480
696
480
696
~ylight Savings and Leap year schedules witl reflect the hourly nomination stated above,
Monthly Exchange Energy is defined for easy calculation purposes only.
POD may be modified as mutually agreed by QF Buyer and Arrow Rock.
Appendix A
POD
Jefferson
Jefferson
nla
nla
nla
LOLO
LOLO
LOLa
Jefferson
Jefferson
Jefferson
Jefferson
252S44Svl
Appendix A
Attachment B
Requirement of the Transmitting Entity Scheduling Agent
Month Scheduled Ener Deliveries - The NWE, as the scheduling agent for AtTow Rock and
Transmitting Entities will provide Idaho Power with a schedule of the next month'
hourly scheduled Net Energy deliveries, at a minimum of 7 clays prior to the beginning of
the month. The hourly scheduled Net Energy delivery will be a constant value for every
hour of the month and will remain unchanged for all hours of the month. NWE will not
schedule or deliver more energy than the amounts designated in Attachment A. NWE
shall be excused from scheduling Net Energy to Idaho Power if the Transmitting
Entity(s) or Idaho Power determine that curtailment, interruption or reduction of Net
Energy deliveries is necessary because of line constroctio~ maintenance requirements
emergencies, electrical system operating conditions on its system, or as otherwise
required by Prudent Electrical Practices. When reasonable to do so, the NWE shall notify
Idaho Power of any curtailment, intenuption or reduction of the Net Energy deliveries
prior to the curtailment, intenuption, or reduction of Net Energy deliveries to the Point(s)
of Delivery. This notification will include the estimated duration and reason for the
event. In the case of unplanned events, NWE will promptly notifY Idaho Power of the
estimated duration and reason of the event upon occurrence of the event.
Communications . Idaho Power and NWE on behalf of the Seller shall maintain appropriate
operating communications through Idaho Power s Designated Dispatch Facility and
NWE shall report to Idaho Power at the times and in the manner established in the
Monthly Scheduled Energy Deliveries.
EXHIBIT 2
Idaho Power is aware that, should the
Commission grant the requested temporary suspension, bne of
the decisions that must be made is how to apply the suspension
to those enti ties interested in the process of having QF
contracts negotiated and reviewed.To that end, the Company
does not intend to sign any additional agreements until the
IPUC provides some guidance on the Company s request.The
Company calls to the Commission s attention that a very
limited number of QF wind projects were in the final stages
negotiations with Idaho Power immediately prior to the filing
of the Idaho Power Petition.One proj ect in particular, Arrow
Rock wind, Inc.Arrow Rock") executed an agreement with the
Company prior to the date that Idaho Power filed its Petition
with the Commission.On June 24, 2005, the Company received
copy of correspondence from Arrow Rock to the IPUC that
details the series of events leading to the execution of the
agreement.A copy of the agreement is provided as Exhibit No.
1 .
Idaho Power concurs with the statements made by Arrow
Rock contained in Exhibi t No.As noted in that letter,
energy deliveries from the Arrow Rock would not be the typical
type of intermittent energy generally associated with a wind
proj ect.Instead, Arrow Rock has secured a firming agreement
with another utility.Accordingly, the energy delivered from
GALE, DI
Idaho powe r Company
the project to Idaho power will be a flat, firm, monthly
schedule of energy.
Due to the fact that negotiation of this agreement was
completed prior to the filing of the Petition in this
proceeding and the fact that the actual energy delivered to
Idaho Power will not be of the intermittent nature at issue in
this proceeding, the Company respectfully recommends that the
Commission consider Idaho Power's agreement with the Arrow
Rock Wind, Inc. proj ect as appropriate for exempting from the
temporary suspension request sought in this proceeding.
How long a suspension does Idaho Power
anticipate is needed to complete the above-referenced
activities and analyses?
It is my understanding that it will take
approximately six to nlne months to conduct the necessary
acti vi ties and analyses.
How do you recommend that the Commission
proceed this mat ter?
The Company
commi s s lon issue its Order
respectfully requests that the
temporarily suspending for a period
of nine months Idaho Power's obligation under ~~ 201 and 210
of PURPA to enter into new contracts to purchase energy
generated by wind-powered QFs in order to permit the Company
and the Commission the opportunity to undertake the activities
GALE, DI
Idaho Power Company
, .":.'~
.A..r:ro ,;fIT B. lOck ~:b'1 d.., In. c .
5203 South 11th East
Idaho Falls, Idaho 83404
Tel [phone]
fa."ti: 208-522-8123
June 24, 2005
Idaho Pubic Utilities Commission
P. O. Box 83720
Boise, ID 83270-0074
Delivered via Facsimile: 208-334-3762
Subject: Arrow Rock Wind -,- QF Contract with Idaho Power
Dear Commissioners:
This letter is written pursuant to a firm energy sales agreement, which we 'have negotiated with Idaho
Power. This contract was negotiated over the past several months with Idaho Power. In the norma)
course of business 'Idaho Power forwarded a contract for OUf signature on June 16, 2005. 1 signed
this contract on June '18, 2005 and returned it to Idaho Power via overnight ll1ail, pursuant to Idaho
Contract Power Administrator Randy Allphin s letter of June 16. 2005~ a copy ofwhicb is attached.
The Idaho Power letter states that Idaho Power would s,i2Jl the, contract and forward to PUC for
approval.
On Thursday, June 23. 2005. Arrow Rock was infonned by Randy Allphin that Idaho Power had
filed a petition to suspe,nd Idaho Powcr s requirement to sign PURPA wind contracts on June '17,
2005 and until such time as Idaho Power received direction from the PUC on this petition, ldaho
Power would not be signing any wind PLJRPA contracts.
Generation projects require subswntial planning periods and the resulting good faith negotiation for
the contract supporting the project was ruBy concluded and agreed upon on June 14, 2005. Idaho
Power negotiated the QF Agreement with Arrow Rock Wind in the nonna! course of business, whiCh.
inc1uded a unique arrangement in which Anow Rock, rather than Idaho Power would be responsible
for firming and shaping the inlenllitt.ent nature of the wind resource. The documentation clearly
demonstrates that the Arrow Rock project was fully negotiated prior to the June 17th Petition from
Idaho Power. The ~'111andatory contracting for purchases of wind QF resources'~ was completed
prior to Idaho Powc.r~ s Petition.
The Arrow Rock 'Wind structure demonstrates that firming of intem1ittent resource does not
necessadly need 10 be the sok responsibility of host utility. Therefore the Arrow Rock resource
does not maintain the reliability, ancillary service and integration characteristics that are the basis of
Idaho Power s Petition. The fi1111. flat energy deHve.ry to Idaho Power can easily be integrated into
their system and provides substaniia) value. In fact~ Idaho Power recognized that the June 17th
Pethion would be limited to "new contracts for purchases of energy fron1 (intennjttent) wind-
powered QFs. The suspension (re.quest) would not affect new contract with Qfs utilizing other
generating technologies." The firm. flat energy structure places the cost of integration upon Arrow
Rock and as such mitigates the basis of conc.erns identified by Idaho Power. In our opinion the firm
flat Arrow Rock project is actually a superior resource to other generation technologies.Exhibit No.
Case No. IPC-O5-
J. Gale, IPCo
Page 1 of 2
. ': .-~~.--"'_." .'" '-.'-
Specifically, the Arrow Rock Wind project has a very unique arrangement that
elevates its energy
deliveries to Idaho Power to a significantly more favorable energy product than the typical
intermittent energy from a wind facility. As a value-added and
innovative solution to the complex
nature of inteJ111htent rcsources~ Anow Rock Wind has~ at its sole cost~ secured finning apd shaping
services to provide a firm~ flat deljvery~ as negotiated, to Idaho Power of9 MW September through
February and 7 MW June through August. Therefore~ Idaho .Power is not required to provide
ancillary services, integration and re1hibj\ity measures.
By this same letter, 1 request that Idaho Power sign this contract within the next seven to ten days
and submit to the pue for approval. Your assjstancc and insight at the pue is sincerely appreciated.
Ted. S. SoTenson~ President
pc. Randy Allphin, Idaho Power
Exhibit No.
Case No. IPC-O5-
J. Gale, IPCo
Page 2 of 2