20060127Application.pdf

.. ~ \; \:~ \ .\
IDAHO POWER COMPANY
O. BOX 70
BOISE, IDAHO 83707 " ZC, \;, L:: :, \
MONICA MOEN
Attorney
An IDACORP Company
UT\L\.
\\;
: CU;i;;;~;S\C!
January 26, 2006
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise, Idaho 83720-0074
Re:Case No. IPC-06-
Application For Approval of An Energy Sales
Agreement Between Idaho Power Company and
Co-Gen Co. LLC
Dear Ms. Jewell:
Please find enclosed for filing an original and seven (7) copies of Idaho
Power Company s Application for the approval of an Energy Sales Agreement between
Idaho Power Company and Co-Gen Co. LLC.
I would appreciate it if you would return a stamped copy of this transmittal
letter in the enclosed self-addressed, stamped envelope.
Very truly yours
Monica Moen
MM:jb
Enclosures
Telephone [phone] Fax [phone] E-mail MMoenfiiJidahopower.com
MONICA MOEN , ISB # 5734
BARTON KLINE , ISB # 1526
Idaho Power Company
1221 West Idaho Street
P. O. Box 70
Boise, Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
, c, ,'
. ,. .. ~.
i L;:
jTlLiTi:~s
, .
;fSSfCU
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR APPROVAL)
OF AN ENERGY SALES AGREEMENT
FOR THE SALE AND PURCHASE OF
ELECTRIC ENERGY BETWEEN IDAHO
POWER COMPANY AND CO-GEN CO, LLC )
CASE NO. IPC-06-
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 declaring that all payments for purchases of energy under a one-year
Energy Sales Agreement between Idaho Power and Co-Gen Co, LLC ("Co-Gen ) be
allowed as prudently incurred expenses for ratemaking purposes.
This Application is based on the following:
Co-Gen owns , operates and maintains a 10 MW nameplate capacity wood
waste (biomass) generation unit that is located adjacent to the Prairie Wood Products Mill
APPLICATION - 1
in Prairie City, Grant County, Oregon, approximately 100 miles west of Ontario, Oregon
Facility ). The Facility is a qualified small power production facility under the applicable
provisions of the Public Utility Regulatory Policies Act of 1978 ("PURPA"). In accordance
with PURPA, the Public Utility Commission of Oregon ("OPUC") is the state regulatory
agency with jurisdiction to implement PURPA in the state of Oregon and to determine
Idaho Power s avoided costs in Oregon. The Facility is located in the service area of the
Oregon Trails Electric Cooperative ("OTEC") and in Idaho Power s electrical control area.
Generation from the Facility is delivered to Idaho Power over the transmission lines of
OTEC and the Bonneville Power Administration.
II.
On December 29 , 2005, Idaho Power and Co-Gen entered into an Energy
Sales Agreement ("Agreement") in conformance with the rates , terms and conditions
established by the OPUC. Under the terms of that Agreement , Co-Gen elected to contract
with Idaho Power for a one-year term , commencing on January 1 , 2006. Co-Gen further
elected to receive payments from the Company computed in accordance with the Gas
Market Method (Option 3) set out in Idaho Power s Oregon Tariff No. E-, Schedule 85
dated August 11 , 2005 or its successor schedule as approved by the OPUC. Copies of the
Agreement and Schedule 85 are enclosed as Exhibits 1 and 2.
III.
Idaho Power seeks an Order from the Commission declaring that all
payments for purchases of energy under the Agreement be allowed as prudently incurred
expenses for ratemaking purposes.
APPLICATION - 2
IV.
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 declaring that all payments for purchases of
energy under the Energy Sales Agreement between Idaho Power Company and Co-Gen
, LLC be allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this C:.th of January 2006.
~15.
MONICA B. MOEN
Attorney for Idaho Power Company
APPLICATION - 3
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the ,;Jb h day of January 2006, 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:
. Thomas M. Grim
Cable Huston Benedict
1001 S.W. Fifth Avenue , Suite 2000
Portland, OR 97204-1136
Hand Delivered
S. Mail
Overnight Mail
FAX
Randy Crockett
R. Johnson Lumber Co.
O. Box 66
Riddle , OR 97469
Hand Delivered
S. Mail
Overnight Mail
FAX
MONICA B. MOEN
CERTIFICATE OF MAILING
BEFORE THE IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-O6-
IDAHO POWER COMPANY
EXHIBIT
Article
ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
CO-GEN CO, LLC
(Includes Transmission Provisions)
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
Transmission Agreement
Records
Operations
Reliability Management System
Indemnification and Insurance
Force Majeure
Liability; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Governmental Authorization
Successors and Assigns
Modification
Taxes
Notices
Additional Terms and Conditions
Severability
Counterparts
Entire Agreement Signatures
Commission Investigation
Appendix A
Appendix B
Appendix C
12/29/2005
ENERGY SALES AGREEMENT
(10 MW or Less)
CO-GEN CO, LLC
Project Number: 12618100
THIS AGREEMENT, entered into on this day of December 2005 between
CO-GEN CO, LLC, an Oregon limited liability company (Seller), and IDAHO POWER COMPANY, an
Idaho corporation (Idaho Power), hereinafter sometimes referred to collectively as "Parties" or
individually as "Party.
WITNESSETH:
WHEREAS, Seller owns, maintains and operates an electric generation facility; and
WHEREAS, Seller wishes to sell, and Idaho Power is willing to purchase, 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 Oregon Public Utility 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 First Energy Date" - The day commencing at 0001 hours, Mountain Time, following the day that
Seller has satisfied the requirements of Article IV and the Seller begins delivering energy to
Idaho Power s system at the Point of Deli very.
- 1-
12/2912005
1.6
1.7
1.8
1.9
Idaho Power Electrical System Control Area" or "Control Area - The geographical area of
integrated transmission and generation controlled by Idaho Power for which Idaho Power is
responsible for scheduling interchanges with other control areas and balancing supply and
demand within the area. The Control Area may include physical locations and/or electrical
systems not served or owned by Idaho Power, but which are dependant upon Idaho Power
operation of its generation and transmission to balance supply and demand.
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
metered and the point the Facility s energy is delivered to the Idaho Power electrical system by
the Transmitting Entity. The loss calculation formula will be as specified in Appendix B of this
Agreement.
Market Energy Cost" - Eighty-five percent (85%) of the monthly 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 (as defined in paragraph 19.1 and subject to paragraph 19.
that is identified in this Agreement as a Material Breach.
1.10 Maximum Capacity" - The maximum capacity (MW) of the Facility will be as specified in
Appendix B of this Agreement.
1.11 Nameplate Capacity" - The generation capacity (MW) of the Facility as rated by the
manufacturer and verified in accordance with paragraph 4.2. The Nameplate Capacity may not
exceed 10 MW. The Nameplate Capacity of the Seller s Facility is specified in Appendix B.
1.12 Net Energy" - All of the electric energy produced by the Facility, less Station Use and Losses
expressed in kilowatt hours (kWh), which the Transmitting Entity delivers to Idaho Power, that is
less than or equal to the Nameplate Capacity. Seller commits to deliver all energy produced by
- 2-
12/29/2005
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1.22
the Facility, less Station Use, and Losses, to the Transmitting Entity for delivery by the
Transmitting Entity to Idaho Power at the Point of Delivery for the full term of the Agreement.
Net Energy Amounts" - Monthly Net Energy amounts that the Seller estimates the Facility will
produce and the Transmitting Entity will deliver to Idaho Power at the Point of Delivery. The
Seller shall use all available information (equipment characteristics, resource characteristics and
data, Facility design, etc) to accurately estimate the monthly Net Energy Amounts. These Net
Energy Amounts as specified in paragraph 6.2 will be used to calculate the monthly Shortfall
Energy quantities within 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
delivers the Facility s 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.
Schedule 85"- Idaho Power s Oregon Tariff No E- 25, Schedule 85, dated August 2005 or
its successor schedules as approved by the Commission.
Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates
achieving the Operation Date.
Season - The three periods identified in Schedule 85.
Shortfall Energy - The negative difference, if any, (expressed in kWh) between the monthly
actual Net Energy delivered to Idaho Power and the Monthly Net Energy Amounts specified in
paragraph 6.2 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) All monthly Net Energy produced by the Seller s Facility and delivered
by the Transmitting Entity to the Idaho Power electrical system that exceeds the Nameplate
- 3-
12/29/2005
1.23
1.24
Capacity of the Facility but is less than the Maximum Capacity of the Facility or (2) All monthly
Net Energy produced by the Seller s Facility and delivered by the Transmitting Entity to the
Idaho Power electrical system prior to the Operation Date and is less than the Maximum Capacity
of the Facility.
Total Cost of the Facility" - The total cost of structures, equipment and appurtenances.
Transmitting Entity" - The signatory(s) (other than the Seller) to the Transmission Agreement
referred to in paragraph 9.1 and its successors and assigns.
ARTICLE II: NO RELIANCE ON IDAHO POWER
Seller Independent Investigation - Seller warrants and represents to Idaho Power that in entering
into this Agreement and the undertaking by Seller of the obligations set forth herein, Seller has
investigated and determined that it is capable of performing hereunder and has not relied upon
the advice, experience or expertise of Idaho Power in connection with the transactions
contemplated by this Agreement.
Seller Independent Experts - All professionals or experts including, but not limited to, engineers
attorneys or accountants, that Seller may have consulted or relied on in undertaking the
transactions contemplated by this Agreement have been solely those of Seller.
ARTICLE 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. Seller s failure to maintain the Facility and operations
of the Facility in a manner consistent with its Qualifying Facility certification will be a Material
- 4-
12/29/2005
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.
If Idaho Power s obligation to purchase energy from a "Qualifying Facility," as that term
is defined in 18 CFR ~ 292.207 or ORS 758.505(8), is repealed or otherwise terminated
this Agreement will remain in full force and effect unless state or federal law mandates
termination of this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
Prior to the First Energy Date and as a condition ofIdaho Power s acceptance of deliveries of
energy from the Seller, Seller shall:
1.1
1.2
1.3
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.
Capacity Determination - Submit to Idaho Power such data as Idaho Power may
reasonably require to confirm the manufacturer s Nameplate Capacity rating and the
Maximum Capacity rating of the Facility. Such data will include but not be limited to
equipment specifications, power factor assumptions, and any other data that would allow
Idaho Power to verify the generating capacity and the manufacturer s nameplate rating of
this Facility. Upon receipt of this information, Idaho Power will review the provided data
and if necessary, request additional data to complete the verification process 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. 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.
- 5-
12/29/2005
1.4
1.5
1.6
1.7
Insurance - Submit written proof to Idaho Power of all insurance required in Article Xli.
Transmission Agreement - Provide Idaho Power with a copy of (1) the Transmission
Agreement executed by the Seller and the Transmitting Entity in a form acceptable to
Idaho Power and (2) confirmation that the Idaho Power delivery business unit has agreed
to accept the Net Energy deliveries at the Point of Delivery in an amount up to the
Maximum Capacity Amount. Idaho Power s acceptance will not be unreasonably
withheld.
Security Requirements - Provide Idaho Power with commercially reasonable
representations and warranties and other documentation to determine the Seller
creditworthiness. Such documentation would include, at a minimum, that the Seller is
current on existing debt obligations and has not been a debtor in a bankruptcy proceeding
within the preceding two years. Upon receipt of this information, Idaho Power will
review the provided data and, if necessary, request additional data and/or will provide
written confirmation or rejection of the provided data within a reasonable time. In lieu of
providing evidence of acceptable creditworthiness, the Seller may provide Idaho Power
with commercially reasonable security instruments such as letter of credit, senior lien
rights, step-in-rights, escrow accounts or other forms of liquid financial security that
would provide readily available cash to Idaho Power in the Event of a Default under this
Agreement.
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.
- 6-
12/29/2005
5.4
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 one (1) Contract
Year from the Operation Date.
Operation Date - The Operation Date may occur only after the Facility has achieved all of the
following:
a) Achieved the First Energy Date.
b) 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.
c) Seller has requested an Operation Date from Idaho Power in a written format.
d) Seller has received written confirmation from Idaho Power of the Operation Date.
This confirmation will not be unreasonably withheld by Idaho Power.
If the Seller fails to achieve the Operation Date within 30 days of the Scheduled Operation Date
Seller will reimburse Idaho Power for any Shortfall Energy Repayment Amount accruing from 30
days following the Scheduled Operation Date until the Seller achieves the Operation Date. Such
reimbursement shall be determined in the manner described in paragraph 7.3, 7.4 and 7.5 of this
Agreement.
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 Idaho Power at the Point of Delivery.
Net Energy Amounts - Seller intends to produce and Transmitting Entity shall deliver Net Energy
in the following monthly amounts:
- 7-
12/29/2005
6.2.Monthl Net Ener Amounts:
Month kWh
March 208 000
Season 1 April 040 000
May 688 000
July 208 000
August 208 000
Season 2 November 040,000
December 208 000
June 040 000
September 040 000
Season 3 October 208 000
January 208 000
February 704 000
Seller s Adjustment of Monthly Net Energy Amounts
1 No later than the Operation Date, by written notice given to Idaho Power in
accordance with paragraph 24., the Seller may revise all of the previously
provided Monthly Net Energy Amounts.
2 At any time, by written notice given to Idaho Power in accordance with
paragraph 24., Seller may revise all of the previously provided Monthly Net
Energy Amounts, beginning with the next calendar year for the remaining term
of the Agreement.
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 Net Energy
Amounts as specified in paragraph 6.2 shall constitute an Event of Default.
ARTICLE VII: PURCHASE PRICE AND METHOD OF PAYMENT
Net Energy Purchase Price - The Seller has selected Option 3 (Gas Market Method) from
Schedule 85 as the purchase price for the Term of this Agreement. The Net Energy Purchase
Price shall be calculated as specified in Schedule 85 for the option selected by the Seller resulting
- 8-
12/29/2005
7.2
7.4
in an on-peak and off-peak Net Energy Purchase Price which will be applied to the applicable Net
Energy deliveries during on-peak and off-peak hours as defined by the North American Electric
Reliability Council (NERC).
Surplus Energy Price - For all Surplus Energy, Idaho Power shall pay to the Seller the applicable
month's Schedule 85 , Option 1 (Fixed Price Method), Off-peak energy price.
Shortfall Energy Repayment Price The Shortfall Energy Repayment Price shall be equal to the
applicable month's Market Energy Cost minus that month's Net Energy Purchase Price. If the
result of this subtraction is less than 0, then the Shortfall Energy Repayment Price is
Shortfall Energy Repayment Amount - A Shortfall Energy Repayment Amount shall be due only
if there is Shortfall Energy in a month and during that same month, the Market Energy Cost is
greater than that month's Net Energy Purchase Price. The Shortfall Energy Repayment Amount
shall be equal to the applicable month's Shortfall Energy multiplied by the Shortfall Energy
Repayment Price for that same month.
Shortfall Energy Repayment Schedule - By January 31 of the calendar year following expiration
of the Term, Idaho Power will accumulate and invoice Seller for all of the previous year
monthly Shortfall Energy Repayment Amounts. The accumulated Shortfall Energy Repayment
Amount will be due and payable within thirty (30) days from Seller s receipt of the invoice. An
annual interest rate of 7.8% will be applied to the monthly Shortfall Energy Repayment Amounts,
calculated from the end of each month in which the Shortfall Energy Repayment Amount was
incurred until paid by Seller. The obligations of this paragraph 7.5 shall survive termination of
this Agreement, until satisfied.
Payment Due Date Payments to the Seller for Net Energy and Surplus Energy will be disbursed
within 30 days of the date which Idaho Power receives and accepts the documentation of the
monthly Net Energy and any Surplus Energy actually produced by the Seller s Facility and
delivered to Idaho Power as specified in Appendix A.
- 9-
12/29/2005
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), Tradable Renewable Certificates (TRCs) directly associated with the production
of energy from the Seller s Facility.
ARTICLE IX: TRANSMISSION AGREEMENT
Transmission Agreement - The Seller will arrange and pay for the delivery of Net Energy over
the facilities of the Transmitting Entity(s) (Oregon Trail Electric Consumers Cooperative) to the
Point of Delivery. The delivery of Net Energy from the Facility to the Idaho Power Point of
Delivery shall be in accordance with the terms and conditions of a Transmission Agreement
between the Seller and the Transmitting Entity(s).
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. A 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. Losses will be calculated as provided in
Appendix B of this Agreement.
9.4 Required Transmission Agreement provisions for Facilities not located within the Idaho Power
Electrical System Control Area
If the Facility is not located within the Idaho Power Electrical System Control Area, the
following requirements must be contained within the Transmission Agreement (s);
9.4.Scheduling and delivery of Net Energy - The Transmission Agreement shall
include provisions that require the Transmitting Entity(s) to schedule and deliver
the Facility s energy to Idaho Power in accordance with industry standard
Western Electricity Coordinating Council (WECC) scheduling processes and
- 10-
12/29/2005
10.
10.
11.1
procedures.
9.4.Energy Reserve Requirements - The Transmitting Entity(s) will provide all
generation reserves as required by the 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.
9.4.Documentation - Seller and/or the Transmitting Entity will provide Idaho Power
with monthly documentation in a form acceptable to Idaho Power showing the
amount of energy scheduled and delivered to Idaho Power on an hourly bases.
ARTICLE X - RECORDS
Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate total generation (kWh), Net Energy, Station Use and maximum
generation (kW) 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 (kWh), Net Energy, Station Use
and maximum generation (kW) records pertaining to the Seller s Facility.
ARTICLE XI - 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.
11.2 Energy Acceptance Idaho Power shall be excused from accepting and paying for Net
Energy produced by the Facility and delivered by the Transmitting Entity on behalf of the
Seller to the Point of Delivery, if it is prevented from doing so by an event of Force
Majeure, or if Idaho Power determines that curtailment, interruption or reduction of Net
Energy deliveries is necessary because of line construction or maintenance requirements
emergencies, electrical system operating conditions on its system or as otherwise required
- 11-
12/29/2005
11.3
11.4
11.5
by Prudent Electrical Practices. If, for reasons other than an event of Force Majeure
Idaho Power requires such a curtailment, interruption or reduction of Net Energy
deliveries for a period that exceeds twenty (20) days, beginning with the twenty-first day
of such interruption, curtailment or reduction, Seller will be deemed to be delivering Net
Energy at a rate equivalent to the pro rata daily average of the amounts specified for the
applicable month in paragraph 6.2. In accordance with FERC requirements, Idaho Power
will provide information on the status of any line construction, maintenance
requirements, emergencies or electrical system operating conditions on its system on its
OASIS website.
Scheduled Maintenance - On or before January 31 of each calendar year, Seller shall submit a
written proposed maintenance schedule of significant Facility and/or Transmitting Entity
maintenance for that calendar year and Idaho Power, Seller and the Transmitting Entity shall
mutually agree as to the acceptability of the proposed schedule. The Parties' determination as to
the acceptability of the Seller s timetable for scheduled maintenance will take into consideration
Prudent Electrical Practices, Idaho Power system requirements and the Seller s preferred
schedule. Neither Party shall unreasonably withhold acceptance of the proposed maintenance
schedule.
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 the 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.
- 12-
12/29/2005
ARTICLE Xli: RELIABILITY MANAGEMENT SYSTEM
If the Facility is not located within the Idaho Power Electrical System Control Area, the Seller
will be required to comply with the Reliability Management processes of the control area operator having
control of the specific location of the Facility and this Article Xli will not apply. If the Facility is located
within the Idaho Power Control Area, the Seller is required to comply with the following:
12.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.
12.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 12 as though
set forth fully herein, and Seller shall for all purposes be considered a Participant, and shall be
entitled to all of the rights and privileges and be subject to all of the obligations of a Participant
under and in connection with the WECC Reliability Criteria Agreement, including, but not
limited to the rights, privileges and obligations set forth in Sections 5, 6 and 10 of the WECC
Reliability Criteria Agreement.
12.Payment of Sanctions. Seller shall be responsible for reimbursing Idaho Power for any monetary
sanctions assessed against Idaho Power by WECC due to the action or inaction of the Seller
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.
12.4 Transfer of Control or Sale of Generation Facilities. In any sale or transfer of control of any
- 13-
12/2912005
12.
12.
12.
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 12.
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 12, 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 12, 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
is a third-party beneficiary to this Article 12, and the WECC shall have the right to seek to
enforce against the Seller any provision of this Article 12, provided that specific performance
shall be the sole remedy available to the WECC pursuant to Article 12 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 12 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.
- 14-
12/29/2005
12.
13.
13.
Termination of Article 12. Seller may terminate its obligations pursuant to this Article 12:
12.1 If after the effective date of this Article 12, 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 FERC
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
12.2 For any reason on one year s written notice to Idaho Power and the WECc.
ARTICLE XIII: INDEMNIFICATION AND INSURANCE
Indemnification - Each Party shall agree to hold harmless and to indemnify the other Party, its
officers, directors, agents, affiliates, subsidiaries, parent company and employees against all loss
damage, expense and liability to third persons for injury to or death of person or injury to
property, proximately caused by the indemnifying Party s construction, ownership, operation or
maintenance of, or by failure of, any of such Party s works or facilities used in connection with
this Agreement. The indemnifying Party shall, on the other Party s request, defend any suit
asserting a claim covered by this indemnity. The indemnifying Party shall pay all costs, including
reasonable attorney fees, that may be incurred by the other Party in enforcing this indemnity.
Insurance -
13.1 If the Facility s Nameplate Capacity as determined in paragraph 1.11 of this Agreement
is greater than 200 kW, the Seller shall secure and continuously carry the following
msurance coverage:
13.1.1 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
- 15-
12/29/2005
14.
Industry Utility practices for similar property.
13.1.2 The above insurance coverage shall be placed with an insurance company with
an A.M. Best Company rating of A- or better and shall include:
(a)An endorsement naming Idaho Power as an additional insured and loss
payee as 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.
13.1.3 Seller to Provide Certificate of Insurance - As required in paragraph 4.1.4 herein
and annually thereafter, Seller shall furnish Idaho Power a certificate of
insurance, together with the endorsements required therein, evidencing the
coverage as set forth above.
13.1.4 Seller to Notify Idaho Power of Loss of Coverage - If the insurance coverage
required by paragraph 13.2 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 XIV. FORCE MAJEURE
As used in this Agreement
, "
Force Majeure" or "an event of Force Majeure" means any cause
beyond the control of the Seller or of Idaho Power which, despite the exercise of due diligence
such Party is unable to prevent or overcome. Force Majeure includes, but is not limited to, acts of
God, fire, flood, storms, wars, hostilities, civil strife, strikes and other labor disturbances
earthquakes, fires, lightning, epidemics, sabotage, or changes in law or regulation 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
- 16-
12/2912005
15.
16.
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 XV: LIABILITY; DEDICATION
Nothing in this Agreement shall be construed to create any duty to, any standard of care with
reference to, or any liability to any person not a Party to this Agreement. No undertaking by one
Party to the other under any provision of this Agreement shall constitute the dedication of that
Party s system or any portion thereof to the other Party or to the public or affect the status of
Idaho Power as an independent public utility corporation or Seller as an independent individual or
entity.
ARTICLE XVI: 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.
- 17-
12/2912005
17.
18.
18.
19.
19.
ARTICLEXVll: 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 XVill: CHOICE OF LAWS AND VENUE
This Agreement shall be construed and interpreted in accordance with the laws of the State of
Oregon 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 Ninth Judicial District of Oregon in and for the County of Malheur.
ARTICLE XIX: 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 -
19.Defaults.If either Party fails to perform any of the terms or conditions of this
Agreement (an "Event of Default" or "Default ), the non-defaulting Party shall cause
notice in writing to be given to the defaulting Party, specifying the manner in which
such Default occurred. If the defaulting Party shall fail to cure such Default within
the sixty (60) days after service of such notice, or if the defaulting Party reasonably
demonstrates to the other Party that the Default can be cured within a commercially
reasonable time but not within such sixty (60) day period and then fails to diligently
pursue such cure, then, the non-defaulting Party may, at its option, terminate this
Agreement and/or pursue its legal or equitable remedies.
- 18-
12/29/2005
19.3
19.Material Breaches - The notice and cure provisions in paragraph 19.1 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:
19.Insurance - Evidence of compliance with the provisions of paragraph 13.2. 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;
19.Engineer s Certifications - 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 Oregon, which Certification of Ongoing 0 & M shall be in the
form specified in Appendix C. Seller s 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
19.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. If at any time during the Term, 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
cured by Seller submitting to Idaho Power evidence of compliance from the permitting
agency.
19.3.4 Security Requirements - During the full Term of this Agreement, Seller shall maintain
the Security Requirements established in accordance to paragraph 4.6. Failure to
maintain these Security Requirements will be a Material Breach of this Agreement.
- 19-
12/29/2005
ARTICLE XX: GOVERNMENTAL AUTHORIZATION
This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
ARTICLE XXI: 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.
ARTICLE XXII: 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, if reasonably deemed necessary by Idaho Power.
ARTICLE XXill: TAXES
Each Party shall pay before delinquency all of its respective taxes and other governmental charges
which, if failed to be paid when due, could result in a lien upon the Seller s Facility or Idaho Power
system.
- 20-
12/29/2005
ARTICLE XXIV: 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:
Original document to:
Randy Crockett
Chief Financial Officer
R. Johnson Lumber Company
1991 Pruner Road
PO Box 66
Riddle, Or 97469
541-874-2231
541-874-8295 (fax)
email: randyc CQ!drjlumber.com
Copy of document to:
Thomas M. Grim
Cable Huston Benedict Haggensen & Lloyd LLP
Suite 2000, 1001 SW Fifth A venue
Portland, Or 97204
503-224-3092
503-224-3176 (fax)
email: tgrimCQ!chbh.com
To Idaho Power:
Original document to:
Vice President, Power Supply
Idaho Power Company
P. O. Box 70
Boise, Idaho 83707
Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
P. O. Box 70
Boise, Idaho 83707
- 21-
12/29/2005
ARTICLE XXV: 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 XXVI: 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 XXVII: 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 XXVill: 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.
ARTICLE XXIX: COMMISSION INVESTIGATION
The Seller and Idaho Power acknowledge that the rates, terms and conditions specified in this
Agreement and the related tariffs are being investigated by the Oregon Public Utility Commission.
Upon a decision by the Oregon Public Utility Commission in the investigation, Idaho Power will
notify the Seller within ten (10) calendar days.The Seller shall have thirty (30) calendar days from
the effective date of the revised standard contract and tariffs complying with the Commission s order
to amend this Agreement if the Seller so chooses to adopt the revised standard contract and/or the
- 22-
12/29/2005
revised rates, terms and conditions in the tariff approved by the Oregon Public Utility Commission as a
result of the investigation.
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 Co-Gen Co. LLC
klL-
. Miller, Sr. Vice President, Power Supply
7-c;,o~Dated
19 lob
Seller
Dated
Idaho Power
- 23-
12/2912005
APPENDIX A
MONTHLY POWER PRODUCTION AND SWITCHING REPORT FOR PROJECTS
LOCATED WITHIN THE IDAHO POWER ELECTRICAL SYSTEM CONTROL AREA
At the end of each month, the following required documentation will be submitted to:
Idaho Power Company
Attn: Cogeneration and Small Power Production
P. O. Box 70
Boise, Idaho 83707
The Meter readings required on this report will be the reading on the Meter Equipment measuring
the Facility s Net Energy delivered by the Transmitting Entity to the Idaho Power electrical system and/or
any other required energy measurements to adequately administer this Agreement. If the Metering
Equipment 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
- 24-
12/2912005
Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
Project Name
Month Year
Project Number:
Address
City
Meter Number:
Eud of Month kWh Meter Reading:
Beginning of Month kWh Meter:
Difference:
Times Meter Constant:
kWh for the Month:
Metered Demand:
Breaker Opening Record
Date Time Meter
Breaker Openinl! Reason Codes
Lack of Adequate Prime Mover
Forced Outage of Facility
Disturbance of IPCo System
Scheduled Maintenance
Testing of Protection Systems
Cause Unknown
Other (Explain)
State Zip
Facility
Output
Station
Usal!e
Phone Number:
Station
Usal!e
Metered
Maximum Generation
Net Generation
Breaker Closing Record
Date Time Meter
I hereby certify that the above meter readings are
true and correct as of Midnight on the last day of the
above month and that the switching record is accurate
and complete as required by the Energy Sales
Agreement to which I am a Party.
Signature
- 25-
Reason
Date
12/29/2005
ROUTINE REPORTING FOR PROJECTS WITHIN THE IDAHO POWER ELECTRICAL
SYSTEM CONTROL AREA.
Idaho Power Designated Dispatch Facility contact information
Daily Energy Production Reporting
All projects with a Nameplate Capacity of 1 MW or greater shall:
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
If Idaho Power determines that adequate generation data is available for this Facility
daily generation, Idaho Power may modify these reporting requirements
Planned and Unplanned Project outages
Call 800-345-1319 and leave the following information:
Project Identification - Project Name and Project Number
. Approximate time outage occurred
Estimated day and time of project coming back online
Seller s Contact Information
24-Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
Jim Munyon
541- 820-3351
541- 820-4548
Project On-site Contact information
Telephone Number:541-820-3737
- 26-
12/29/2005
MONTHLY POWER PRODUCTION AND SWITCHING REPORT FOR PROJECTS
LOCATED OUTSIDE OF THE IDAHO POWER ELECTRICAL SYSTEM CONTROL AREA.
) The Transmitting Entity will schedule and deliver the Facility s Net Energy to the Idaho
Power electrical system at the Point of Delivery in accordance with the electrical industry
standard WECC scheduling and delivery processes. As specified in paragraph 9.4.3 the Seller
and/or the Transmitting Entity shall provide Idaho Power with monthly documentation
indicating the hourly energy scheduled and delivered to Idaho Power. This documentation
will be reconciled with Idaho Power records of energy scheduled and received from this
Facility. In the event a discrepancy exists between the Idaho Power records and the Seller /
Transmitting Entity documents, Idaho Power records will be considered to be accurate until
such time as Idaho Power, the Seller and the Transmitting Entity mutually agree on an
adjustment to the Idaho Power records.
) The Seller shall submit to Idaho Power a Monthly Power Production And Switching Report
as specified in Appendix A-I of this Agreement. The meter readings on this report shall be
the meter readings at the actual Facility measuring the actual energy deliveries to
Transmitting Entity at the Facility.
ROUTINE REPORTING FOR PROJECTS OUTSIDE OF THE IDAHO POWER
ELECTRICAL SYSTEM CONTROL AREA.
The Seller and Transmitting Entity shall maintain appropriate communications with the Idaho
Power Designed Dispatch Facility in compliance with electric industry standard WECC energy
scheduling processes and procedures.
- 27-
12/29/2005
APPENDIX B
FACILITY AND POINT OF DELIVERY
PROJECT NO. 12618100
CO-GEN CO, LLC
DESCRIPTION OF FACILITY
A wood waste (biomass) generation unit comprised of a single Alpha boiler with steam
production capability of 135 000 Ibs/hr at 425 PSIG, coupled with a General Electric turbine
generator with a Nameplate Capacity rating of 9.375 MW. The primary source of fuel being the
wood waste from the adjacent Prairie Wood Products mill and other sources.
LOCATION OF FACILITY
The Facility is located in Section 2, Township 13., Range 33E, Grant County, Oregon. The
Facility is adjacent to the Prairie Wood Products Mill in Prairie City, Oregon on Highway 26
approximately 100 miles west of Ontario, Oregon.
SCHEDULED FIRST ENERGY AND OPERATION DATE
Seller has selected January 1, 2006 as the estimated Scheduled First Energy Date.
Seller has selected January 1, 2006 as the estimated Scheduled Operation Date.
In making these selections, Seller recognizes that completion of all requirements in paragraph 5.
of this Agreement must be completed prior to the Facility being granted an Operation Date.
MAXIMUM CAPACITY AMOUNT:
This value will be 10 MW. This value is the maximum energy (MW) that potentially could be
delivered by the Seller s Facility to the Idaho Power electrical system at any moment in time and
will be consistent with the designed capacity of the Facility.
- 28-
12/2912005
POINT OF DELIVERY
The West John Day Substation is the point on the Idaho Power electrical system where the Sellers
Facility s Net energy will be delivered by the Transmitting Entity to the Idaho Power electrical
system.
LOSSES
a. Idaho Power Metering is unable to measure the exact energy deliveries by the Transmitting
Entity on behalf of the Seller to the Idaho Power electrical system at the Point of Delivery,
therefore a Losses calculation will be established to measure the energy losses (kWh)
between the Seller s Facility and the Idaho Power Point of Delivery.The Losses will be
calculated as the hourly energy, measured as described in B-8, multiplied by (1 - 0.992633)
or 0.007367). If at anytime during the term of this Agreement, Idaho Power determines that
the loss calculation does not correctly reflect the actual kWh losses attributed to the electrical
equipment between the Facility and the Idaho Power electrical system, Idaho Power may
adjust the calculation and retroactively adjust the previous months kWh loss calculations.
INTERCONNECTION FACILITIES
The Seller and Transmitting Entity shall construct, operate and maintain the Facility and all
interconnection and protection equipment in accordance with Prudent Electrical Practices, the
National Electric Safety Code and any other applicable local, state and federal codes
METERING AND TELEMETRY
BPA RMS Meter No. 2260 located at the Co-Gen Co. Facility will record the hourly energy
generated by the Co-Gen Co. Facility. Meter No. 2260 is owned and will be maintained by
Oregon Trail Electric Consumers Cooperative. The Bonneville Power Administration will access
and record data from Meter No. 2260 on a daily basis using its existing cell phone dial-
capability. The data from Meter No. 2260 is posted on the Bonneville Power Administration
- 29-
12/29/2005
website and is available to Idaho Power delivery unit. Idaho Power delivery unit will make this
information available to Idaho Power power supply unit.
Idaho Power will apply a meter correction factor of 0.992633 in order to determine the amount of
Net Energy delivered to the West John Day Substation for purchase from Co-Gen Co pursuant to
the terms of the Energy Sales Agreement.
Co-Gen Co. and Idaho Power delivery unit will coordinate to install the necessary telemetry
equipment to directly input the Generation of the Co-Gen Co. Facility into the Idaho Power
energy management system. The necessary telemetry equipment will be installed, at Co-Gen
Co.s expense, on a schedule mutually agreed by Co-Gen Co. and Idaho Power delivery unit. The
required telemetry equipment should be installed as soon as possible, but need not be installed
before the Operation Date specified in the Energy Sales Agreement. If the necessary telemetry
equipment is not installed by the Operation Date, then Idaho Power delivery unit will rely on
information from the existing revenue meter.
- 30-
12/29/2005
Project's producing at or near the design electrical output , efficiency and plant factor for a period of
years.
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
- 32-
12/29/2005
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 Oregon.
That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement " between
Idaho Power Buyer and Seller dated
That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No.and is hereinafter referred to as
the "Project."
That the Project, which is commonly known as the , is located in
Section , Township , Range County,
That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to Idaho Power for period of years.
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
- 31-
12/29/2005
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 Oregon.
That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement " between
Idaho Power as Buyer, and as Seller, dated
That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No.and hereinafter referred to as the
Project
That the Project, which is commonly known as the , is located at
That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to Idaho Power for a period of years.
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
remammg years of the Agreement.
- 33-
12/29/2005
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
- 34-
12/29/2005
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
Oregon.
That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement"
between Idaho Power as Buyer, and as Seller, dated
That the cogeneration or small power production project, which is the subject of the
Agreement and this Statement, is identified as IPCo Facility No and is hereinafter
referred to as the "Project"
That the Project, which is commonly known as the Project, is
located in Section Township , Range County,
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.
- 35-
12/29/2005
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
- 36-
12/29/2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-O6-
IDAHO POWER COMPANY
EXHIBIT 2
Idaho Power Company s~~~Kd ne~~ee.Sheet No. 85-10( l.U
I(W Cancels
C. ORE. NO. E -~f&, First Revised Ghect No. 85-RECEIVED
SCHEDULE 85
COGENERATION AND SMALL POWER
PRODUCTION STANDARD
CONTRACT RATES
JUL -1 Z 2005
PUC
Utility Program
~_.
AVAILABILITY
Service under this schedule is available throughout the Company s service territory within the
State of Oregon.
APPLICABILITY
Service under this schedule is applicable to any Seller that:
1) Owns or operates a Qualifying Facility with a nameplate capacity rating of 10 MW or less
and desires to sell Energy generated by the Qualifying Facility to the Company in compliance with
all the terms and conditions of the Standard Contract;
Meets all applicable requirements of the Company s Generation Interconnection Process.
For Qualifying Facilities with a nameplate capacity rating greater than 10 MW, a negotiated Non-
Standard Contract between the Seller and the Company is required.
DEFINITIONS
EnerQV means the electric energy, expressed in kWh , generated by the Qualifying Facility and
delivered by the Seller to the Company in accordance with the conditions of this schedule and the
Standard Contract. Energy is measured net of Losses and Station Use.
Generation Interconnection Process is the Company s generation interconnection application and
engineering review process developed to ensure a safe and reliable generation interconnection in
compliance with all applicable regulatory requirements, Prudent Electrical Practices and national safety
standards.
Heat Rate Conversion Factor is 7 100 MMBTU divided by 1000.
Losses are the loss of electric energy occurring as a result of the transformation and transmission
of electric energy from the Qualifying Facility to the Point of Delivery.
Issued By IDAHO POWER COMPANY
By John R. Gale , Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, Idaho
OREGON
Issued: July 12 , 2005
Effective with service
rendered on and after:
~ugust 12, 200~~uJ
All/".1 1
".",...
Advice No. 05-
Idaho Power Company
c...J r I ':i I n~ I K LU
SficonGi Ro'Jisoa Sheet No. 85-
anGels
First Revised Shcet No. 85 z-C. ORE. NO. ~E-~b
SCHEDULE 85
COGENERATION AND SMALL POWER
PRODUCTION STANDARD
CONTRACT RATES
(Continued)
RECEIVED
'JUL 1 2 2005
PUG
Utility Program
DEFINITIONS (Continued)
Non-Standard Contract is a negotiated contract between any Seller that owns or operates a
Qualifying Facility with a nameplate capacity rating greater than 10 MW and desires to sell Energy
generated by the Qualifying Facility to the Company. The starting point for negotiation of price is the
Avoided Cost Components established in this schedule and may be modified to address specific factors
mandated by federal and state law, including
1 )The utility s system cost data;
2) The availability of capacity or energy from a Qualifying Facility during the system daily
and seasonal peak periods, including:
a. The ability of the utility to dispatch the qualifying facility;
b. The expected or demonstrated reliability of the qualifying facility;
c. The terms of any contract or other legally enforceable obligation, irn::luding the
duration of the obligation , termination notice requirement and sanctions for non-
compliance;
d. The extent to which scheduled outages of the qualifying facility can be usefully
coordinated with scheduled outages of the utility s facilities;
e. The usefulness of energy and capacity supplied from a qualifying facility during
system emergencies, including its ability to separate its load from its generation;
f. The individual and aggregate value of energy and capacity from qualifying faciiities
on the electric utility s system; and
g. The smaller capacity increments and the shorter lead times available with additions
of capacity from qualifying facilities; and
3) The relationship of the availability of energy or capacity from the Qualifying Facility to the
ability of the electric utility to avoid costs, including the deferral of capacity additions and the
reduction of fossil fuel use; and
4) The costs or savings resulting from variations in line losses from those that would have
existed in the absence of purchases from a Qualifying Facility, if the purchasing electric utility
generated an equivalent amount of energy itself or purchased an equivalent amount of electric
energy or capacity.
Issued By IDAHO POWER COMPANY
By John R. Gale, Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, Idaho
OREGON
Issued: July 12, 2005
Effective with service
rendered on and after:
August 12 , 200~
AUG 11 ?rIF;
Advice No. 05-
~ r . I ':! I I \c;A.. I ..
Idaho Power Company
. ")
Second Rt:viseel Sheet No. 85-
f(U,./ Canccls
C. ORE. NO.-E-25' .c.-t:f;Ilo First Rcvised Glleet No. 8::;-
RECEIVED
SCHEDULE 85
COGENERATION AND SMALL POWER
PRODUCTION STANDARD
CONTRACT RATES
(Continued)
JUL 1 2 2005
PUC
Utility Program
DEFINITIONS (Continued)
Point of Delivery is the location where the Company s and the Seller s electrical facilities are inter-
connected.
Prudent Electrical Practices are those practices , methods and equipment that are commonly used
in prudent electrical engineering and operations to operate electric equipment lawfully and with safety,
dependability, efficiency and economy.
PURPA means the Public Utility Regulatory Policies Act of 1978.
Qualifyinq Facility is a cogeneration facility or a small power production facility which meets the
PURPA criteria for qualification set forth in Subpart B of Part 292, Subchapter K, Chapter I , Title 18 , of the
Code of Federal Regulations.
Seasonality Factor is the factor used in determining the seasonal purchase price of energy. The
applicable factors are:
73.50% for Season 1 (March, April , May);
120.00% for Season 2 (July, August, November, December);
100.00% for Season 3 (June, September, October, January, February).
Seller is any entity that owns or operates a Qualifying Facility and desires to sell Energy to the
Company.
Standard Contract is the Company s Energy Sales Agreement (10 MW or less) filed with the
Public Utility Commission of Oregon.
Station Use is electric energy used to operate the Qualifying Facility which is auxiliary to or directly
related to the generation of electricity and which, but for the generation of electricity, would not be
consumed by the Seller.
Issued By IDAHO POWER COMPANY
By John R. Gale, Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, Idaho
OREGON
Issued: July 12 , 2005
Effective with service
rendered on and after:
Advice No. 05-
~ r I t3 ! r::lO- ! K u..;Idaho Power Company Sheet No. 85-
7(1LI Cancels
C. ORE. NO.E -5)/CJ First Revised Sheet N€). 05-
RECEIVED
SCHEDULE 85
COGENERATION AND SMALL POWER
PRODUCTION STANDARD
CONTRACT RATES
(Continued)
JUL 1 2 2005
PUC
Utility Program
QUALIFYING FACILITY INFORMATION INQUIRY PROCESS
There are two separate processes required for a Seller to deliver and sell energy from a
Qualifying Facility to the Company. These processes may be completed separately or simultaneously.
1 )Generation I nterconnection Process
All generation projects physically interconnecting to the Company s electrical system, regardless of size,
location or ownership, must successfully complete the Generation Interconnection Process prior to the
project delivering energy to the . Company. A complete description, application and Gompany contact
information is maintained on the Idaho Power website at www.idahopower.com, or Seller may contact the
Company s Customer Service Center at 1-800-488-6151 for further information.
Enemy Sales AQreement
To begin the process of completing a Standard Contract or negotiating a Non-Standard Contract
for a proposed project, the Seller must submit in written form to the Company a request for an Energy
Sales Agreement. This request, at the minimum, should contain:
a. Date of requestb. Description of the proposed project
c. Type of project (wind, hydro , geothermal etc)
d. Nameplate capacity of the proposed project
e. Estimated monthly generation (kWh)
f. Estimated on-line date of the proposed project
g.
Location of the proposed project
h. Company / Organization that will be the contracting party
i. Contact information including name, address and telephone number
All requests will be processed in the order of receipt by the Company. The request should be
submitted to:
Idaho Power Company
Cogeneration and Small Power Production
POBox 70
Boise, Idaho 83707
Issued By IDAHO POWER COMPANY
By John R. Gale , Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, Idaho
OREGON
Issued: July 12, 2005
Effective with service
rendered on and after:
August 12 , 200tB
AUG11
Advice No. 05-
U r '9 I na...1 ~ --
Idaho Power Company Second Revised Sheet No. 85-
"Banoels
C. ORE. NO. E -~J.p liuJ ~irst Revised Shcct No. 85 6
AVOIDED COST COMPONENTS
RECEtVED
SCHEDULE 85
COGENERATION AND SMALL POWER
PRODUCTION STANDARD
CONTRACT RATES
(Continued)
JUL 1 2 2005
PUC
Utility Program
The Avoided Cost Components are calculated based upon the Surrogate Avoided Resource
methodology (SAR) for determining the Company s standard avoided costs.
Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Capacity Cost
(mills/kWh)
23.
24.
25.
25.
26.
26.
27.
28.
28.
29.44
30.
30.
31.
32.
33.
33.
34.
35.
36.
37.
37.
38.
39.
40.
41.
42.
Fuel Cost
(mills/kWh)
43.
43.45
42.
41.46
40.
39.
39.
40.
41.
41.
42.
44.
45.44
47.
48.49
50.
51.
53.
55.
56.
58.
60.
62.
64.
66.
68.
Issued By IDAHO POWER COMPANY
By John R. Gale, Vice President , Regulatory Affairs
1221 West Idaho Street, Boise, Idaho
Advice No. 05-
OREGON
Issued: July 12 , 2005
Effective with service
rendered on and after:
August 12, 2005
AUG 1 1 2005 ~I)J
Idaho Power Company
C. ORE. NO. F-;)b,Ori inal Sheet No. 85-
SCHEDULE 85
COGENERATION AND SMALL POWER
PRODUCTION STANDARD
CONTRACT RATES
(Continued)
RECE\VED
JUL -1 2 2005
puc
Utility Program
NET ENERGY PURCHASE PRICE
The Company will pay the Seller monthly, for each kWh of Energy delivered and accepted at the
Point of Delivery during the preceding calendar month , in accordance with the Standard Contract, an
amount determined by the Seller s choice of one of the following options:
Option 1 - Fixed Price Method
Net Energy Purchase Price =
On-peak = (Fuel Cost + Capacity Cost) X Seasonality Factor
Off-peak = Fuel Cost X Seasonality Factor
where
Fuel Cost and Capacity Cost are the Avoided Cost Components established in this
schedule for the applicable calendar year of the actual Net Energy deliveries to the Company.
Option 2 - Dead Band Method
Net Energy Purchase Price =
On-peak = (AGPU + Capacity Cost) X Seasonality Factor
Off-peak = AGPU X Seasonality Factor
Actual Gas Price Used (AGPU) =
90% of Fuel Cost if
Indexed Fuel Cost is less than 90% Fuel Cost; else
110% of Fuel Cost if
Indexed Fuel Cost is greater than 110% Fuel Cost; else
Indexed Fuel Cost
where
Fuel Cost and Capacity Cost are the Avoided Cost Components established in this
schedule for the applicable calendar year of the actual Net Energy deliveries to the Company, and
Indexed Fuel Cost is the applicable weighted monthly average index price of natural gas at
Sumas multiplied by the Heat Rate Conversion Factor.
Issued By IDAHO POWER COMPANY
By John R. Gale, Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, Idaho
Advice No. 05-
OREGON
Issued: July 12 , 2005
Effective with service
rendered on and after:
~~Oj
idaho Power Company
C. ORE. NO. E-25 E-';;~Ori inal Sheet No. 85-
RECEIVED
SCHEDULE 85
COGENERATION AND SMALL POWER
PRODUCTION STANDARD
CONTRACT RATES
(Continued)
JUL -1 2 2005
PUC
Utility Program
NET ENERGY PURCHASE PRICE (Continued)
Option 3 - Gas Market Method
Net Energy Purchase Price =
On-peak = (AGPU + Capacity Cost) X Seasonality Factor
Off-peak = AGPU X Seasonality Factor
Actual Gas Price Used (AGPU) = Indexed Fuel Cost
where
Capacity Cost is the Avoided Cost Component established in this schedule for the
applicable calendar year of the actual Net Energy deliveries to the Company, and
Indexed Fuel Cost is the applicable weighted monthly average index price of natural gas at
Sumas multiplied by the Heat Rate Conversion Factor.
Issued By IDAHO POWER COMPANY
By John R. Gale, Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, Idaho
OREGON
Issued: July 12, 2005
Effective with service
rendered on and after:~ust 20RFAU 11 2005
Advice No. 05-