20060210Application.pdf

IDAHO POWER COMPANY
O. BOX 70
BOISE, IDAHO 83707
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An IDACORP Company
MONICA MpEN
Attorney
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February 9 , 2006 :l,_iiiL~::' (;Cii
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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- 0'3
Application For Approval of A Firm Energy Sales
Agreement Between Idaho Power Company and
R. Simplot Company
Dear Ms. Jewell:
Please find enclosed for filing an original and seven (7) copies of Idaho
Power Company s Application for the approval of a Firm Energy Sales Agreement
between Idaho Power Company and J.R. Simplot Company.
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 MMoenrBJidahopower.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]
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j JiL!i J::Cc"i"'J:JiCi
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 AGREEMENT FOR SALE AND
PURCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANY ANDTHE J. R. SIMPLOT COMPANY
CASE NO. IPC-06-
APPLICATION
COMES NOW Idaho Power Company ("Idaho Power" or the "Company ) and
pursuant to IPUC Rule of Procedure 52 , hereby applies for an Idaho Public Utilities
Commission ("IPUC" or the "Commission ) Order approving an Agreement between Idaho
Power and the J. R. Simplot Company ("Simplot") under which Simplot would sell and
Idaho Power would purchase electric energy generated by the Simplot cogeneration facility
located at the J R Simplot industrial site near Pocatello, Idaho.
This Application is based on the following:
Simplot currently owns, operates and maintains a cogeneration facility
Project") at its industrial site near Pocatello, Idaho. The Project is a qualified small
APPLICATION -
power production facility under the applicable provisions of the Public Utilities
Regulatory Policy Act of 1978 ("PURPA"
II.
This Project is currently interconnected to Idaho Power and is selling
energy to Idaho Power as a Qualifying Facility in accordance with a Firm Energy Sales
agreement dated March 1 , 2004. The Project has been selling energy to Idaho Power
since January 1991. Prior to the March 1 , 2004 agreement, the Project was selling
energy to the Company under a Firm Energy Sales agreement dated January 24, 1991
and subsequently amended on November 30 , 1993 and February 23, 2001. Simplot
has requested a new Firm Energy Sales Agreement for this Project to take effect on
March 1 2006 upon expiration of the March 1 2004 agreement.
III.
The March 1 , 2004 agreement is a one-year agreement which permits
automatic renewals of one year on March 1 of each year. The agreement also
specifies that, with appropriate notice, either party may terminate the agreement
effective March 1. Simplot has timely requested to terminate the March 1 , 2004 Firm
Energy Sales Agreement for this Project and enter into a new Firm Energy Sales
Agreement for this Facility. On February 8, 2006 , Idaho Power and Simplot entered
into a Firm Energy Sales Agreement ("Agreement") pursuant to the terms and
conditions of Commission Order No. 29632 and Commission Order 29646 for energy
deliveries of less than 10 average MW. Under the terms of that Agreement, Simplot
elected to contract with Idaho Power for a 7-year term. Simplot further elected to
contract with the Company using the Non-Levelized Published Avoided Cost Rate as
currently established by the Commission for energy deliveries of less than 10 average
APPLICATION - 2
MW. A copy of the Agreement between Idaho Power and Simplot is attached hereto
as Exhibit 1.
IV.
This Agreement is similar to recent agreements entered into by Idaho Power
and approved by the Commission (e., Pilgrim Stage Station Wind Park (IPUC Order
29771) Oregon Trails Wind Park (IPUC Order 29772), Tuana Gulch Wind Park (IPUC
Order 29773) and the Thousand Springs Wind Park (IPUC Order 29770)). The Simplot
Agreement contains 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. IPC-04-8 (US Geothermal complaint).
The Maximum Capacity of this Facility is 12 MW as defined in Paragraph
1 .13 and specified in Item B-3 of Appendix B of the Agreement. As defined in
Paragraph 1.9 of the Agreement and as described in Paragraph 4.3 of the
Agreement, Simplot will be required to provide data on the Facility that Idaho Power will
use to determine whether, under normal and/or average conditions, the Facility will not
exceed 10 average MW on a monthly basis. Idaho Power has reviewed the historical
generation data for this Facility. The data supports Simplot's representation that , under
current normal and/or average conditions, the Facility in the recent past has not
exceeded 10 average MW in generation on a monthly basis. Furthermore , as
described in Paragraph 7.3 of the Agreement , should the Facility exceed 10 average
MW on a monthly basis , Idaho Power will accept any energy ("Inadvertent Energy ) that
does not exceed the Maximum Capacity Amount; however, Idaho Power will not
purchase or pay for this Inadvertent Energy.
APPLICATION - 3
VI.
Section 25 of the Agreement provides that the Agreement will not become
effective until the Commission has approved all of the Agreement's terms and conditions
and declared that all payments Idaho Power makes for purchases of energy to Simplot will
be allowed as prudently incurred expenses for ratemaking purposes.
VII.
Within this Agreement, various requirements have been placed upon Simplot
in order for Idaho Power to continue to accept energy deliveries from this Project. Idaho
Power will monitor compliance with these initial requirements in addition to the ongoing
requirements through the full term of this Agreement. Should the Commission approve this
Agreement, Idaho Power intends to consider the Effective Date of the Agreement to be
February 8, 2006.
VIII.
The Agreement, as signed and submitted by the Parties thereto, contains
Non-Levelized Published Avoided Cost Rates in conformity with applicable IPUC Orders.
All applicable interconnection charges and monthly Operation and Maintenance charges
under Schedule 72 will be assessed Simplot.
IX.
Service of pleadings, exhibits , orders and other documents relating to this
proceeding should be served on the following:
Monica B. Moen , Attorney II
Barton L. Kline, Senior Attorney
Idaho Power Company
O. Box 70
Boise , Idaho 83707
mmoen (g) idahopower.com
bkline (g) idahopower.com
Randy C. Allphin
Contract Administrator
Idaho Power Company
O. Box 70
Boise , Idaho 83707
rallphin (g) idahopower.com
APPLICATION - 4
NOW, THEREFORE , based on the foregoing, Idaho Power Company hereby
requests that the Commission issue its Order:
(1 )Approving the Firm Energy Sales Agreement between Idaho Power
Company and J R Simplot Company 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 J R Simplot Company be
allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this 9th day of February 2006.
MONICA B. MOEN
Attorney for Idaho Power Company
APPLICATION - 5
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 9th day of February 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:
J R Simplot Company
Attn: David Hawk
O. Box 27
Boise , ID 83707
Hand Delivered
S. Mail
Overnight Mail
FAX
~.
d3-
MONICA B. MOEN
CERTIFICATE OF SERVICE
BEFORE THE IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-O6- 03
IDAHO POWER COMPANY
EXHIBIT
Article
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
R. SIMPLOT COMPANY
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
Disconnection Equipment
Metering and Telemetry
Records
Protection
Operations
Reliability Management System
Indemnification and Insurance
Force Majeure
Land Rights
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
Appendix D
2/612006
FIRM ENERGY SALES AGREEMENT
(10 aMW or Less)
SIMPLOT - POCA TELLO
Project Number: 41866112
THIS AGREEMENT, entered into on this day of (eb"."1 (j 2006 between
J R SIMPLOT COMPANY, a Nevada 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 has designed, constructed, owns, maintains and operates an electric
generation facility; and
WHEREAS, Seller wishes to sell, and Idaho Power is willing to purchase, firm electric energy
produced by the Seller s Facility.
THEREFORE, In consideration of the mutual covenants and agreements hereinafter set forth, the
Parties agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreement and the appendices attached hereto, the following terms
shall have the following meanings:
1.1 Commission" - The Idaho Public Utilities Commission.
1.2 Contract Year - The period commencing each calendar year on the same calendar date as the
Operation Date and ending 364 days thereafter.
1.3 Designated Dispatch Facility" - Idaho Power s Systems Operations Group, or any subsequent
group designated by Idaho Power.
1.4 Disconnection Equipment"- All equipment specified in Schedule 72 and the Generation
Interconnection Process and any additional equipment specified in Appendix B or Appendix D.
1.5 Facility" - That electric generation facility described in Appendix B of this Agreement.
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1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
Generation Interconnection Process" - Idaho Power 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.
Inadvertent Energy - Electric energy Seller does not intend to generate. Inadvertent energy is
more particularly described in paragraph 7.3 of this Agreement.
Interconnection Facilities - All equipment specified in Schedule 72 and the Generation
Interconnection Process and any additional equipment specified in Appendix B or Appendix D.
Initial Capacity Determination - The process by which Idaho Power confirms that under
normal or average design conditions the Facility will generate at no more than 10 average MW
per month and is therefore eligible to be paid the published rates in accordance with Commission
Order No. 29632.
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. The
loss calculation formula will be as specified in Appendix B of this Agreement.
Market Energy Cost" - Eighty-five percent (85%) of the weighted average of the daily on-peak
and off-peak Dow Jones Mid-Columbia Index (Dow Jones Mid-C Index) prices for non-firm
energy. If the Dow Jones Mid-Columbia Index price is discontinued by the reporting agency, both
Parties will mutually agree upon a replacement index, which is similar to the Dow Jones Mid-
Columbia Index. The selected replacement index will be consistent with other similar agreements
and a commonly used index by the electrical industry.
Material Breach" - A Default (paragraph 23.1) subject to paragraph 23.
Maximum Capacity Amount" - The maximum capacity (MW) of the Facility will be as
specified in Appendix B of this Agreement.
Metering Equipment"- All equipment specified in Schedule 72, the Generation Interconnection
Process, this Agreement and any additional equipment specified in Appendix B or Appendix D
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1.15
1.16
1.17
1.18
1.19
1.20
1.21
1.22
1.23
required to measure, record and telemeter power flows between the Seller s electric generation
plant and Idaho Power s system.
Net Energy" - All ofthe electric energy produced by the Facility, less Station Use, less Losses
expressed in kilowatt hours (kWh). Seller commits to deliver all Net Energy to Idaho Power at
the Point of Delivery for the full term of the Agreement. Net Energy does not include Inadvertent
Energy.
Operation Date" - The beginning of the day specified in paragraph 5.2 of this Agreement.
Point of Delivery" - The location specified in Appendix B, where Idaho Power s and the
Seller s electrical facilities are interconnected.
Prudent Electrical Practices" - Those practices, methods and equipment that are commonly and
ordinarily used in electrical engineering and operations to operate electric equipment lawfully,
safely, dependably, efficiently and economically.
Schedule 72"- Idaho Power s Tariff No 101 , Schedule 72 or its successor schedules as
approved by the Commission.
Season" - The three periods identified in paragraph 6.1 of this Agreement.
Special Facilities - Additions or alterations of transmission and/or distribution lines and
transformers as described in Appendix B, Appendix D, Schedule 72 or the Generation
Interconnection Process required to safely interconnect the Seller s Facility to the Idaho Power
system.
Station Use" - Electric energy that is used to operate equipment that is auxiliary or otherwise
related to the production of electricity by the Facility.
Surplus Energy" - (1) Net Energy produced by the Seller s Facility and delivered to the Idaho
Power electrical system during the month which exceeds 110% of the monthly Net Energy
Amount for the corresponding month specified in paragraph 6.2. or (2) If the Net Energy
produced by the Seller s Facility and delivered to the Idaho Power electrical system during the
month is less than 90% of the monthly Net Energy Amount for the corresponding month
specified in paragraph 6., then all Net Energy delivered by the Facility to the Idaho Power
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1.24
electrical system for that given month or (3) All Net Energy produced by the Seller s Facility and
delivered by th~ Facility to the Idaho Power electrical system prior to the satisfactory completion
of all requirements of Article IV, Conditions to Continued Acceptance of Energy.
Total Cost of the Facility" - The total cost of structures, equipment and appurtenances.
ARTICLE II: NO RELIANCE ON IDAHO POWER
Seller Independent Investigation - Seller warrants and represents to Idaho Power that in entering
into this Agreement and the undertaking by Seller of the obligations set forth herein, Seller has
investigated and determined that it is capable of performing hereunder and has not relied upon
the advice, experience or expertise of Idaho Power in connection with the transactions
contemplated by this Agreement.
Seller Independent Experts - All professionals or experts including, but not limited to, engineers
attorneys or accountants, that Seller may have consulted or relied on in undertaking the
transactions contemplated by this Agreement have been solely those of Seller.
ARTICLE ill: WARRANTIES
No Warranty by Idaho Power - Any review, acceptance or failure to review Seller s design,
specifications, equipment or facilities shall not be an endorsement or a confirmation by Idaho
Power and Idaho Power makes no warranties, expressed or implied, regarding any aspect of
Seller s design, specifications, equipment or facilities, including, but not limited to, safety,
durability, reliability, strength, capacity, adequacy or economic feasibility.
Qualifying Facility Status - Seller warrants that the Facility is a "Qualifying Facility," as that term
is used and defined in 18 CFR ~292.207. After initial qualification, Seller will take such steps as
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.
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4.1
ARTICLE IV: CONDITIONS TO CONTINUED ACCEPTANCE OF ENERGY
Prior to the Seller requesting an Operation Date and an Operation Date being assigned for this
Agreement as specified in paragraph 5.2 of this Agreement, the following requirements shall be
completed;
1.2
1.1 This Facility is currently interconnected to Idaho Power and is selling energy to Idaho
Power as a Qualifying Facility in accordance with a Firm Energy Sales agreement dated
March 1 2004. The Seller shall submit proof to Idaho Power that all licenses, permits or
approvals necessary for Seller to continue operations have been obtained from applicable
federal, state or local authorities, including, but not limited to, evidence of compliance
with Subpart B, 18 CPR 292.207.
1 As a condition of the Firm Energy Sales Agreement dated March 1 , 2004, the
Seller provided Idaho Power a letter (dated February 1 , 2005) certifying that all
licenses, permits or approvals necessary for Seller to continue operations were in
full force and effect. Idaho Power will rely on this previous letter as still being
accurate.
Opinion of Counsel - Seller shall 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 4.1 above
are legally and validly issued, are held in the name of the Seller and, based on a
reasonable independent review, counsel is of the opinion that Seller is in substantial
compliance with said permits as of the date of the Opinion Letter. The Opinion Letter
will be in a form acceptable to Idaho Power and will acknowledge that the attorney
rendering the opinion understands that Idaho Power is relying on said opinion. Idaho
Power s acceptance of the form will not be unreasonably withheld. The Opinion Letter
will be governed by and shall be interpreted in accordance with the legal opinion accord
of the American Bar Association Section of Business Law (1991).
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1.3
1.4
1.6
1.7
1 As a condition of the Firm Energy Sales Agreement dated March 1 , 2004, the
Seller provided Idaho Power an acceptable Opinion of Counsel letter (dated
February 1, 2005). Idaho Power will rely on this previous letter as still being
accurate.
Initial Capacity Determination - Submit to Idaho Power such data as Idaho Power may
reasonably require to perform the Initial Capacity Determination. Such data will 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 - This Facility is currently interconnected to the Idaho Power
system. The Seller will submit an Engineer s Certification of Operations and
Maintenance ("O&M") Policy as described in Commission Order No. 21690. This
certificate will be in the form specified in Appendix C but may be modified to the extent
necessary to recognize the different engineering disciplines providing the certificates.
1.4.1 As a condition of the Firm Energy Sales Agreement dated March 1 , 2004, the
Seller provided Idaho Power an acceptable Engineer s Certificate dated August
2004. Idaho Power will accept this previously provided Engineer
Certification to satisfy this requirement.
Insurance - Seller shall submit written proof to Idaho Power of all insurance required in
Article XVI.
Interconnection - Seller shall complete all interconnection modifications, upgrades or
additions as specified in Appendix D of this Agreement.
Written Acceptance - 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.
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ARTICLE V: TERM AND OPERATION DATE
Term - Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective
as of the date of this Agreement and shall continue in full force and effect for a period of seven
(7) Contract Years from the Operation Date.
Operation Date - The Operation Date shall be March 2006 contingent upon all requirements of
Article IV being completed and accepted by Idaho Power Company no later than March 2006.
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 to Idaho
Power at the Point of Delivery. All Inadvertent Energy produced by the Facility will also be
delivered by the Seller to Idaho Power at the Point of Delivery. At no time will the total amount
of Net Energy and/or Inadvertent Energy produced by the Facility and delivered by the Seller to
the Point of Delivery exceed the Maximum Capacity Amount.
Net Energy Amounts - Seller intends to produce and deliver Net Energy in the following monthly
amounts:
Initial Year Monthly Net Energy Amounts:
Month kWh
Season 1
March
April
May
669,280
5,486,400
669,280
Season 2
July
August
November
233 232
233 232
5,486,400
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I December 669,280
Season 3
June
September
October
January
February
2,432 819
032 160
669,280
669 280
120 640
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 29., 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 6.2.1 for the next 3 months of monthly Net Energy
amounts.
Seller s Ad iustment of Net Energy Amount
1 No later than the Operation Date, by written notice given to Idaho Power in
accordance with paragraph 29., 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 29., 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.
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6.2.4 Idaho Power Adjustment of Net Energy Amount - If Idaho Power is excused from
accepting the Seller s Net Energy as specified in paragraph 14.2.1 or ifthe Seller declares
a Suspension of Energy Deliveries as specified in paragraph 14.1 and the Seller
declared Suspension of Energy Deliveries is accepted by Idaho Power, the Net Energy
Amount as specified in paragraph 6.2 for the specific month in which the reduction or
suspension under paragraph 14.1 or 14.1 occurs will be reduced in accordance with
the following:
Where:
NEA = Current Month's Net Energy Amount (Paragraph 6.
SOU =) If Idaho Power is excused from accepting the Seller s Net
Energy as specified in paragraph 14.1 this value will be
equal to the percentage of curtailment as specified by
Idaho Power multiplied by the TOU as defined below.
) If the Seller declares a Suspension of Energy Deliveries as
specified in paragraph 14.1 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.
TOU = Sum of all of the individual generator ratings of the generation
units at this Facility as specified in Appendix B of this
agreement.
RSH Actual hours the Facility s Net Energy deliveries were either
reduced or suspended under paragraph 14.1 or 14.
Actual total hours in the current month
Resulting formula being:
Adjusted
Net Energy = NEA
Amount
. ( (
SOU X NEA
TOU
) 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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2/6/2006
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 Energy 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:
Year
2006
2007
2008
2009
2010
2011
2012
Season 1 - (73.50 %)
Mills/kWh
37.
38.
39.
40.
41.46
42.42
43.
Season 3 - (100.00 %)
Mills/kWh
51.
52.
53.
55.
56.41
57.
59.
Season 2 - (120.00 %)
Mills/kWh
61.
63.
64.
66.
67.
69.
70.
Surplus Energy Price - For all Surplus Energy, Idaho Power shall pay to the Seller the current
month's Market Energy Cost or the Net Energy Purchase Price specified in paragraph 7.
whichever is lower.
Inadvertent Energy
Inadvertent Energy is electric energy produced by the Facility, expressed in kWh, which
the Seller delivers to Idaho Power at the Point of Delivery that exceeds 10 000 kW
multiplied by the hours in the specific month in which the energy was delivered. (For
example January contains 744 hours. 744 hours times 10 000 kW = 7,440 000 kWh.
Energy delivered in January in excess of 7,440, 000 kWh in this example would be
Inadvertent Energy.
Although Seller intends to design and operate the Facility to generate no more than 10
average MW and therefore does not intend to generate Inadvertent Energy, Idaho Power
will accept Inadvertent Energy that does not exceed the Maximum Capacity Amount but
will not purchase or pay for Inadvertent Energy
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2/612006
7.4 Payment Due Date - Energy payments to the Seller will be disbursed within 30 days of the date
which Idaho Power receives and accepts the documentation of the monthly Net Energy and
Inadvertent Energy actually produced by the Seller s Facility and delivered to Idaho Power as
specified in Appendix A.
Continuing Jurisdiction of the Commission - This Agreement is a special contract and, as such
the rates, terms and conditions contained in this Agreement will be construed in accordance with
Idaho Power Company v. Idaho Public Utilities Commission and Afton Energy, Inc , 107 Idaho
781 693 P.2d 427 (1984); Idaho Power Company v. Idaho Public Utilities Commission, 107
Idaho 1122 695 P.2d 1 261 (1985); Afton Energy, Inc, v. Idaho Power Company, 111 Idaho 925,
729 P.2d 400 (1986); Section 210 of the Public Utilities Regulatory Policies Act of 1978 and
CFR ~292.303-308.
ARTICLE Vill: ENVIRONMENTAL ATTRIBUTES
Idaho Power waives any claim to ownership of Environmental Attributes.Environmental
Attributes include, but are not limited to, Green Tags, Green Certificates, Renewable Energy
Credits (RECs) and Tradable Renewable Certificates (TRCs) directly associated with the
production of energy from the Seller s Facility.
ARTICLE IX: FACILITY AND INTERCONNECTION
Design of Facility - This Facility is interconnected to Idaho Power and is selling energy to Idaho
Power as a Qualifying Facility in accordance with a Firm Energy Sales agreement dated March 1
2004. In this previous agreement, Seller was required to design, construct, install, own, operate
and maintain the Facility and any Seller-owned Interconnection Facilities so as to allow safe and
reliable generation and delivery of electric energy to Idaho Power for the full term of the
Agreement. Seller will be required to maintain these same standards in the on-going operations
of this facility for the term of this Agreement.
Interconnection Facilities - This Facility is interconnected to Idaho Power and is selling energy to
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2/612006
10.
11.1
Idaho Power as a Qualifying Facility in accordance with a Firm Energy Sales agreement dated
March 2004. Idaho Power has reviewed the existing Interconnection Facilities and has
identified specific items that will require modification, upgrades or additions to the existing
equipment. These items are documented in Appendix D of this agreement. The Seller will be
responsible to complete the modifications, upgrades or additions as specified in Appendix D. All
costs of all items identified within Appendix D and payment to Idaho Power will be in
accordance with Schedule 72.
ARTICLE X: DISCONNECTION EQUIPMENT
This Facility is interconnected to Idaho Power and is selling energy to Idaho Power as a
Qualifying Facility in accordance with a Firm Energy Sales agreement dated March 1 , 2004.
Idaho Power has reviewed the existing Disconnection Equipment and has identified specific items
that will require modification, upgrades or additions to the existing equipment. These items are
documented in Appendix D of this agreement. The Seller will be responsible to complete the
modifications, upgrades or additions as specified in Appendix D. All costs of all items identified
within Appendix D and payment to Idaho Power will be in accordance with Schedule 72.
ARTICLE XI: METERING AND TELEMETRY
Metering - This Facility is interconnected to Idaho Power and is selling energy to Idaho Power as
a Qualifying Facility in accordance with a Firm Energy Sales agreement dated March 2004.
Idaho Power has reviewed the Metering and Telemetry and has identified specific items that will
require modification, upgrades or additions to the existing equipment. These items are
documented in Appendix D of this agreement. The Seller will be responsible to complete the
modifications, upgrades or additions as specified in Appendix D. All costs of all items identified
within Appendix D and payment to Idaho Power will be in accordance with Schedule 72. All
meters used to determine the billing hereunder shall be sealed and the seals shall be broken only
by Idaho Power when the meters are to be inspected, tested or adjusted.
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11.2
11.Meter Inspection - Idaho Power shall inspect and test all meters upon their Installation
and at least once every four (4) years thereafter. If requested by Seller, Idaho Power shall
make a special inspection or test of a meter and Seller shall pay the reasonable costs
such special inspection. Both Parties shall be notified of the time when any inspection or
test shall take place, and each Party may have representatives present at the test
inspection. If a meter is found to be inaccurate or defective, it shall be adjusted, repaired
or replaced, at Idaho Power s expense in order to provide accurate metering. If a meter
fails to register, or if the measurement made by a meter during a test varies by more than
two percent (2%) from the measurement made by the standard meter used in the test
adjustment (either upward or downward) to the payments Seller has received shall be
made to correct those payments affected by the inaccurate meter for the actual period
during which inaccurate measurements were made.If the actual period cannot
determined, corrections to the payments will be based on the shorter of (1) a period equal
to one-half the time from the date of the last previous test of the meter to the date of the
test which established the inaccuracy of the meter; or (2) six (6) months.
Telemetry - Metering, communications and telemetry equipment is required which is capable
providing Idaho Power with continuous instantaneous telemetry of Seller s net generation to
Idaho Power s Designated Dispatch Facility. This Facility is interconnected to Idaho Power and
is selling energy to Idaho Power as a Qualifying Facility in accordance with a Firm Energy Sales
agreement dated March 1 , 2004. Idaho Power has reviewed the Telemetry Equipment and has
identified specific items that will require modification, upgrades or additions to the existing
equipment in order for the parties to perform under this agreement. These items are documented
in Appendix D of this agreement. The Seller will be responsible to complete the modifications
upgrades or additions as specified in Appendix D. All costs of all items identified within
Appendix D and payment to Idaho Power will be in accordance with Schedule 72.
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12.1
12.
13.
14.
14.
ARTICLE XIT - RECORDS
Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate total generation, Net Energy, Station Use, Inadvertent Energy
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, Net Energy, Station Use
Inadvertent Energy and maximum generation (kW) records pertaining to the Seller s Facility.
ARTICLE Xill - PROTECTION
This Facility is interconnected to Idaho Power and is selling energy to Idaho Power as a
Qualifying Facility in accordance with a Firm Energy Sales agreement dated March 2004.
Idaho Power has reviewed the existing Protection equipment and has identified specific items that
will require modification, upgrades or additions to the existing equipment. These items are
documented in Appendix D of this agreement. The Seller will be responsible to complete the
modifications, upgrades or additions as specified in Appendix D. All costs of all items identified
within Appendix D and payment to Idaho Power will be in accordance with Schedule 72. Seller
shall provide and maintain adequate protective equipment sufficient to prevent damage to the
Facility and Seller-furnished Interconnection Facilities.In some cases, some of Seller
protective relays will provide back-up protection for Idaho Power s facilities. In that event, Idaho
Power will test such relays annually and Seller will pay the actual cost of such annual testing.
ARTICLE XIV - OPERATIONS
Communications Idaho Power and the Seller shall maintain appropriate operating
communications through Idaho Power s Designated Dispatch Facility in accordance with
Appendix A of this Agreement.
Energy Acceptance
14.1 Idaho Power shall be excused from accepting and paying for Net Energy or accepting
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14.
Inadvertent Energy produced by the Facility and delivered by 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 or Inadvertent
Energy deliveries is necessary because of line construction or maintenance requirements
emergencies, electrical system operating conditions on its system or as otherwise required
by Prudent Electrical Practices. If, for reasons other than an event of Force Majeure
Idaho Power requires such a curtailment, interruption or reduction of Net Energy
deliveries for a period that exceeds twenty (20) days, beginning with the twenty-first day
of such interruption, curtailment or reduction, Seller will be deemed to be delivering Net
Energy at a rate equivalent to the pro rata daily average of the amounts specified for the
applicable month in paragraph 6.2. Idaho Power will notify Seller when the interruption
curtailment or reduction is terminated.
14.2 If, in the reasonable opinion of Idaho Power, Seller s operation of the Facility or
Interconnection Facilities is unsafe or may otherwise adversely affect Idaho Power
equipment, personnel or service to its customers, Idaho Power may physically interrupt
the flow of energy from the Facility as specified within Schedule 72 or take such other
reasonable steps as Idaho Power deems appropriate.
14.3 Under no circumstances will the Seller deliver Net Energy and/or Inadvertent Energy
from the Facility to the Point of Delivery in an amount that exceeds the Maximum
Capacity Amount. Seller s failure to limit deliveries to the Maximum Capacity Amount
will be a Material Breach of this Agreement.
Seller Declared Suspension of Energy Deliveries
14.1 If the Seller s Facility experiences a forced outage due to equipment failure which is not
caused by an event of Force Majeure or by neglect, disrepair or lack of adequate
preventative maintenance of the Seller s Facility, Seller may, after giving notice as
provided in paragraph 14.2 below, temporarily suspend all deliveries of Net Energy to
Idaho Power from the Facility or from individual generation unites) within the Facility
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14.4
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 14.2 and will continue for the
time as specified (not less than 48 hours) in the written notification provided by the
Seller. In the month(s) in which the Declared Suspension of Energy occurred, the Net
Energy Amount will be adjusted as specified in paragraph 6.2.4.
14.Ifthe Seller desires to initiate a Declared Suspension of Energy Deliveries as provided in
paragraph 14., the Seller will notify the Designated Dispatch Facility by telephone.
The beginning hour of the Declared Suspension of Energy Deliveries will be at the
earliest the next full hour after making telephone contact with Idaho Power. The Seller
will, within 24 hours after the telephone contact, provide Idaho Power a written notice in
accordance with Article XXIX that will contain the beginning hour and duration of the
Declared Suspension of Energy Deliveries and a description of the conditions that caused
the Seller to initiate a Declared Suspension of Energy Deliveries. Idaho Power will
review the documentation provided by the Seller to determine Idaho Power s acceptance
of the described forced outage as qualifying for a Declared Suspension of Energy
Deliveries as specified in paragraph 14.1. Idaho Power s acceptance of the Seller
forced outage as an acceptable forced outage will be based upon the clear documentation
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.
Voltage Levels - Seller, in accordance with Prudent Electrical Practices shall minimize voltage
fluctuations and maintain voltage levels acceptable to Idaho Power.Idaho Power may, in
accordance with Prudent Electrical Practices, upon one hundred eighty (180) days' notice to the
Seller, change its nominal operating voltage level by more than ten percent (10%) at the Point of
Delivery, in which case Seller shall modify, at Idaho Power s expense, Seller s equipment as
necessary to accommodate the modified nominal operating voltage level.
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14.
14.
14.
14.
15.
15.
Generator Ramping - Idaho Power, in accordance with Prudent Electrical Practices , shall have the
right to limit the rate that generation is changed at startup, during normal operation or following
reconnection to Idaho Power s electrical system. Generation ramping may be required to permit
Idaho Power s voltage regulation equipment time to respond to changes in power flow.
Scheduled Maintenance - On or before January 31 of each calendar year, Seller shall submit a
written proposed maintenance schedule of significant Facility maintenance for that calendar year
and Idaho Power and Seller shall mutually agree as to the acceptability of the proposed schedule.
The Parties determination as to the acceptability of the Seller s timetable for scheduled
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 and Idaho Power 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
prior to exercising its rights to curtail, interrupt or reduce deliveries from the Seller s Facility.
Seller understands 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 prior to interruption, curtailment, or reduction of electrical energy deliveries to Idaho
Power.
ARTICLE XV: RELIABILITY MANAGEMENT SYSTEM
Purpose.In order to maintain the reliable operation of the transmission grid, the WECC
Reliability Criteria Agreement sets forth reliability criteria adopted by the WECC to which this
Seller and Idaho Power Company shall be required to comply. Seller acknowledges receipt of
and understanding of the WECC Reliability Criteria Agreement and how it pertains to the Seller
facility.
Compliance. This Seller shall comply with the requirements of the WECC Reliability Criteria
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15.
15.4
15.
15.
Agreement, including the applicable WECC reliability criteria set forth in Section IV of Annex A
thereof, and, in the event of failure to comply, Seller agrees to be subject to the sanctions
applicable to such failure. Such sanctions shall be assessed pursuant to the procedures contained
in the WECC Reliability Criteria Agreement. Each and all of the provisions of the WECC
Reliability Criteria Agreement are hereby incorporated by reference into this Article 15 as though
set forth fully herein, and Seller shall for all purposes be considered a Participant, and shall be
entitled to all of the rights and privileges and be subject to all of the obligations of a Participant
under and in connection with the WECC Reliability Criteria Agreement, including, but not
limited to the rights, privileges and obligations set forth in Sections 5 , 6 and 10 of the WECC
Reliability Criteria Agreement.
Payment of Sanctions. Seller shall be responsible for reimbursing Idaho Power Company for any
monetary sanctions assessed against Idaho Power Company due to the action or inaction of the
Seller by WECC pursuant to the WECC Reliability Criteria Agreement. Seller also shall be
responsible for payment of any monetary sanction assessed against the Seller by WECC pursuant
to the WECC Reliability Criteria Agreement. Any such payment shall be made pursuant to the
procedures specified in the WECC Reliability Criteria Agreement.
Transfer of Control or Sale of Generation Facilities.In any sale or transfer of control of any
generation facilities subject to this Agreement, Seller shall, as a condition of such sale or transfer
require the acquiring party or transferee with respect to the transferred facilities either to assume
the obligations of the Seller with respect to this Agreement or to enter into an agreement with
Idaho Power Company imposing on the acquiring party or transferee the same obligations
applicable to the Seller pursuant to this Article 15.
Publication.Seller consents to the release by the WECC of information related to the Seller
compliance with this Agreement only in accordance with the WECC Reliability Criteria
Agreement.
Third Parties.Except for the rights and obligations between the WECC and the Seller specified
in this Article 15, this Agreement creates contractual rights and obligations solely between the
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15.
15.
Parties. Nothing in this Agreement shall create, as between the Parties or with respect to the
WECC: (a) any obligation or liability whatsoever (other than as expressly provided in this
Agreement), or (b) any duty or standard of care whatsoever.In addition, nothing in this
Agreement shall create any duty, liability or standard of care whatsoever as to any other party.
Except for the rights, as a third-party beneficiary under this Article 15, of the WECC against the
Seller for the Seller, no third party shall have any rights whatsoever with respect to enforcement
of any provision of this Agreement. Idaho Power Company and the Seller expressly intend that
the WECC is a third-party beneficiary to this Article 15, and the WECC shall have the right to
seek to enforce against the Seller any provision of this Article 15 , provided that specific
performance shall be the sole remedy available to the WECC pursuant to Article 15 of this
Agreement, and the Seller shall not be liable to the WECC pursuant to this Agreement for
damages of any kind whatsoever (other than the payment of sanctions to the WECC, if so
construed), whether direct, compensatory, special, indirect, consequential, or punitive.
Reserved Rights. Nothing in the Article 15 of this Agreement or the WECC Reliability Criteria
Agreement shall affect the right of Idaho Power Company, subject to any necessary regulatory
approval, to take such other measures to maintain reliability, including disconnection that Idaho
Power Company may otherwise be entitled to take.
Termination of Article 15.Seller may terminate its obligations pursuant to this Article 15:
15.If after the effective date of this Article 15, the requirements of the WECC Reliability
Criteria Agreement applicable to the Seller are amended so as to adversely affect the
Seller, provided that the Seller gives fifteen (15) days' notice of such termination to
Idaho Power Company and WECC within forty-five (45) days of the date of issuance
of a Commission order accepting such amendment for filing, provided further that the
forty-five (45) day period within which notice of termination is required may be
extended by the Seller for an additional forty-five (45) days if the Seller gives written
notice to Idaho Power Company of such requested extension within the initial forty-
five (45) day period; or
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16.1
16.
16.
15.For any reason on one year s written notice to Idaho Power Company and the WECC.
ARTICLE XVI: INDEMNIFICATION AND INSURANCE
Indemnification - Each Party shall agree to hold harmless and to indemnify the other Party, its
officers, agents, affiliates, subsidiaries, parent company and employees against all loss, damage
expense and liability to third persons for injury to or death of person or injury to property,
proximately caused by the indemnifying Party s construction, ownership, operation or
maintenance of, or by failure of, any of such Party s works or facilities used in connection with
this Agreement. The indemnifying Party shall, on the other Party s request, defend any suit
asserting a claim covered by this indemnity. The indemnifying Party shall pay all costs, including
reasonable attorney fees that may be incurred by the other Party in enforcing this indemnity.
Insurance - During the term of this Agreement, Seller shall secure and continuously carry the
following insurance coverage:
16.1 Comprehensive General Liability Insurance for both bodily injury and property damage
with limits of $2 000 000 each occurrence, combined single limit. The deductible for
such insurance shall be consistent with current Insurance Industry Utility practices for
similar property.Seller will be responsible for any deductible applicable to losses
covered by this insurance.
16.2 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.
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.
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16.4
17.1
Seller to Notify Idaho Power of Loss of Coverage - If the insurance coverage required by
paragraph 16.2 shall lapse for any reason, Seller will immediately notify Idaho Power in writing.
The notice will advise Idaho Power of the specific reason for the lapse and the steps Seller is
taking to reinstate the coverage. Failure to provide this notice and to expeditiously reinstate or
replace the coverage will constitute a Material Breach of this Agreement.
ARTICLE XVll. 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
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.
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18.
18.
18.
ARTICLE XVill: LAND RIGHTS
Seller to Provide Access - Seller hereby grants to Idaho Power for the term of this Agreement all
necessary rights-of-way and easements to install, operate, maintain, replace, and remove Idaho
Power s Metering Equipment, Interconnection Equipment, Disconnection Equipment, Protection
Equipment and other Special Facilities necessary or useful to this Agreement, including adequate
and continuing access rights on property of Seller. Seller warrants that it has procured sufficient
easements and rights-of-way from third parties so as to provide Idaho Power with the access
described above. All documents granting such easements or rights-of-way shall be subject to
Idaho Power s approval and in recordable form.
Use of Public Rights-of-Way - The Parties agree that it is necessary to avoid the adverse
environmental and operating impacts that would occur as a result of duplicate electric lines being
constructed in close proximity. Therefore, subject to Idaho Power s compliance with paragraph
18.4, Seller agrees that should Seller seek and receive from any local, state or federal
governmental body the right to erect, construct and maintain Seller-furnished Interconnection
Facilities upon, along and over any and all public roads, streets and highways, then the use by
Seller of such public right-of-way shall be subordinate to any future use by Idaho Power of such
public right-of-way for construction and/or maintenance of electric distribution and transmission
facilities and Idaho Power may claim use of such public right-of-way for such purposes at any
time. Except as required by paragraph 18.4, Idaho Power shall not be required to compensate
Seller for exercising its rights under this paragraph 18.
Joint Use of Facilities - Subject to Idaho Power s compliance with paragraph 18.4, Idaho Power
may use and attach its distribution and/or transmission facilities to Seller s Interconnection
Facilities, may reconstruct Seller s Interconnection Facilities to accommodate Idaho Power
usage or Idaho Power may construct its own distribution or transmission facilities along, over and
above any public right-of-way acquired from Seller pursuant to paragraph 18., attaching Seller
Interconnection Facilities to such newly constructed facilities. Except as required by paragraph
18.4, Idaho Power shall not be required to compensate Seller for exercising its rights under this
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18.4
19.1
20.
paragraph 18.
Conditions of Use - It is the intention of the Parties that the Seller be left in substantially the same
condition, both financially and electrically, as Seller existed prior to Idaho Power s exercising its
rights under this Article XVID. Therefore, the Parties agree that the exercise by Idaho Power of
any of the rights enumerated in paragraphs 18.2 and 18.3 shall: (1) comply with all applicable
laws, codes and Prudent Electrical Practices, (2) equitably share the costs of installing, owning
and operating jointly used facilities and rights-of-way. If the Parties are unable to agree on the
method of apportioning these costs, the dispute will be submitted to the Commission for
resolution and the decision of the Commission will be binding on the Parties, and (3) shall
provide Seller with an interconnection to Idaho Power s system of equal capacity and durability
as existed prior to Idaho Power exercising its rights under this Article XVID.
ARTICLE XIX: 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 XX: 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.
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21.1
22.
22.
23.
23.
ARTICLE XXI: 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 XXII: 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 XXill: 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 -
23.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.
23.Material Breaches - The notice and cure provisions in paragraph 23.1 do not apply
to defaults identified in this Agreement as Material Breaches. Material Breaches must
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23.
24.
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:
23.
23.
23.
Insurance - Evidence of compliance with the provisions of paragraph 16.2. If Seller
fails to comply, such failure will be a Material Breach and may only be cured by
Seller supplying evidence that the required insurance coverage has been replaced or
reinstated;
Engineer s Certifications - Within 30 days of August 31 , 2007 and then every three
(3) years after August 31 , 2007, 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 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
Licenses and Permits - During the full term of this Agreement, Seller shall maintain
compliance with all permits and licenses described in paragraph 4.1 of this
Agreement. In addition, Seller will supply Idaho Power with copies of any new or
additional permits or licenses. At least every fifth Contract Year, Seller will update the
documentation described in Paragraph 4.1. If at any time Seller fails to maintain
compliance with the permits and licenses described in paragraph 4.1 or to provide
the documentation required by this paragraph, such failure will be an event of default
and may on Iv be cured by Seller submitting to Idaho Power evidence of compliance
from the permitting agency.
ARTICLE XXIV: GOVERNMENTAL AUTHORIZATION
This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
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25.1
26.
27.
ARTICLE XXV: 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 XXVI: 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 XXVII: 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 XXVIII: TAXES
28.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.
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29.1
30.
ARTICLE XXIX: 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:
To Idaho Power:
Original document to:
J R Simplot Company
Attn: Corporate Secretary
POBox 27
Boise, Idaho 83707
Copy of document to:
J R Simplot Company
Attn: David Hawk
POBox 27
Boise, Idaho 83707
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
ARTICLE XXX: ADDITIONAL TERMS AND CONDITIONS
This Agreement includes the following appendices, which are attached hereto and included by
reference:
Appendix A
Appendix B
Appendix C
Appendix D
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer s Certifications
Modifications, Upgrades and Additions
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ARTICLE XXXI: SEVERABILITY
31.1 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 XXXII: COUNTERPARTS
32.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 XXXIII: ENTIRE AGREEMENT
33.This Agreement constitutes the entire Agreement of the Parties concerning the subject matter
hereof and supersedes all prior or contemporaneous oral or written agreements between the
Parties concerning the subject matter hereof.
IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be executed in their
respective names on the dates set forth below:
Idaho Power Company J R Simp lot Company
~. $. /
~ ud
Ii C. Miller, Sf. Vice President, Power Supply
Dated 2- 8" O
Idaho Power
Dated
~~I
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2/6/2006
APPENDIX A
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
At the end of each month the following required documentation will be submitted to:
Idaho Power Company
Attn: Cogeneration and Small Power Production
POBox 70
Boise, Idaho 83707
The Meter readings required on this report will be the reading on the Idaho Power Meter
Equipment measuring the Facility s total energy production, Station Usage, Inadvertent Energy delivered
to Idaho Power and the maximum generated energy (kW) as recorded on the Meter Equipment and/or any
other required energy measurements to adequately administer this Agreement.
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2/6/2006
Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
Project Name
Month Year
Project Number:
Address
City
Meter Number:
End of Month kWh Meter Reading:
Beginning of Month kWh Meter:
Difference:
Times Meter Constant:
kWh for the Month:
Metered Demand:
Breaker Opening Record
Date Time Meter
Breaker Openin1! 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
Usa1!e
Phone Number:
Station
Usa1!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 Firm Energy Sales
Agreement to which I am a Party.
Signature
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Reason
Date
2/6/2006
ROUTINE REPORTING
Idaho Power Contact Information
Daily Energy Production Reporting
Call daily by 10 a.800-356-4328 or 800-635-1093 and leave the following
information:
Project Identification - Project Name and Project Number
Current Meter Reading
Estimated Generation for the current day
Estimated Generation for the next day
Planned and Unplanned 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:
Project On-site Contact information
Telephone Number:
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APPENDIX B
FACILITY AND POINT OF DELNERY
PROJECT NO. 41866112
S~PLOT POCA TELLO
DESCRIPTION OF FACILITY
The Seller s Facility is described as one General Electric synchronous generator with a three-
phase nameplate rating of 18.75 MV A at 13.2 kV three phase, 60 hertz, driven by a steam turbine.
LOCATION OF FACILITY
The Facility is located in the South Half of Section 7 , Township 6 South, Range 34 East, Boise
Meridian, Power County, Idaho.
MAX~UM CAPACITY AMOUNT: This value will be 12 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.
B-4 POINT OF DELNERY
The Point of Delivery of energy from the Seller to Idaho Power is the 12.47 kV bushings of the
Idaho Power owned phosphate substation meta1clad vacuum breaker connected to the Simplot
three-phase transformer bank. This isolation transformer bank, which consists of three single phase
5000 kV A/6250 kV A transformers , is connected 12.47 kV Delta to 13.09/7.56 kV grounded wye
three phase, and the underground primary conductors connecting the transformer to the metalclad
is owned by Simplot.
METERING
The Metering Equipment is located at Don Substation on the Don 015 metalc1ad bus and consists
of potential and current transformers, and a Scientific Columbus IEM 2 electronic bi-directional
demand meter. The meter registers kilowatt-hours and kilowatts of demand.
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SPECIAL FACILITIES
The completion of the fifth distribution feeder bay including meta1clad and metering at Don
Substation, installation of new substation 12.47 kV underground getaway cables, construction of a
section of overhead three phase 12.47 kV distribution feeder, and the installation of a section of
underground three phase 12.47 kV distribution feeder, has been provided by Idaho Power as
Special Facilities.
DISCONNECTION EQUIPMENT
Disconnection Equipment is required to insure that the Seller s Facility will be disconnected from
Idaho Power s system in the event of a disturbance on either Idaho Power s system or the Seller
Facility. This equipment is for the protection of Idaho Power s equipment only. Idaho Power has
installed the protective equipment in a new substation to be called Phosphate. This equipment
consists of a metal clad vacuum breaker, potential transformers, and relaying and associated
wiring. Idaho Power will rely on generator emergency batteries and certain generator fault relays
for fault detection. Idaho Power did connect and test the equipment prior to the operation of the
facility. The total cost of the Disconnection Equipment, connection and testing has been
reimbursed to Idaho Power by the Seller.
COSTS
The total cost of Special Facilities and metering was $214 989. The total cost of the Disconnecting
Equipment was $84 052. The total cost paid by the Seller was $299,041. In addition to the
installation and construction charges above, during the term of the Agreement Seller will pay Idaho
Power an operation and maintenance charge of the sum of the following:
Original Equipment - This Facility has been interconnected and delivering energy to Idaho
Power Company under previous agreements. The monthly Schedule 72 operations and
maintenance expense in regards to the equipment originally installed at a total cost
$299,041 will continue on the same operations and maintenance schedule as specified in
Schedule 72 based upon the original installation date of this equipment. Thus, for the
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calendar year from January 1 , 2006 through December 31 , 2006 Contract Year, the
Schedule 72 Contract Year to be referenced to the Schedule 72 Operations and
Maintenance table will be Contract Year 16, January 1, 2007 through December 31 2007
Contract Year, the Schedule 72 Contract Year to be referenced to the Schedule 72
Operations and Maintenance table will be Contract Year 17 and so on for the term of the
this Agreement.
Additional Equipment - any new equipment installations beyond the scope of routine
maintenance of the Original Equipment will considered to be Additional Equipment and the
Schedule 72 Contract year will be determined based upon the completed installation date of
the Additional Equipment. The complete installed cost of the Additional Equipment will
be the bases that the appropriate Schedule 72 Operations and Maintenance percentage shall
be applied.
SALVAGE
No later than sixty (60) days after the termination or expiration of this Agreement, Idaho Power
will prepare and forward to Seller an estimate of the remaining value of those Idaho Power
furnished Interconnection Facilities descri~ed in this Appendix, less the cost of removal and
transfer to Idaho Power s nearest warehouse. If the Interconnection Facilities will be removed
Idaho Power may then be invoiced by Seller for the net salvage value estimated by Idaho Power
for the interconnection facilities and shall pay such amount to Seller within thirty (30) days after
receipt of said invoice.
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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 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 , 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 OPERA nONS 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 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 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
remammg years of the Agreement.
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That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement
is relying on Engineer s representations and opinions containe? 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 Finn 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 , Boise Meridian
County, Idaho.
That Engineer recognizes that the Agreement provides for the Project to furnish electrical
energy to Idaho Power for a ) year period.
That Engineer has substantial experience in the design, construction and operation of
electric power plants of the same type as this Project.
That Engineer has no economic relationship to the Design Engineer of this Project and
has made the analysis of the plans and specifications independently.
That Engineer has reviewed the engineering design and construction of the Project
including the civil work, electrical work, generating equipment, prime mover conveyance system, Seller
furnished Interconnection Facilities and other Project facilities and equipment.
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That the Project has been constructed in accordance with said plans and specifications, all
applicable codes and consistent with Prudent Electrical Practices as that term is described in the
Agreement.
10.That the design and construction of the Project is such that with reasonable and prudent
operation and maintenance practices by Seller, the Project is capable of performing in accordance with the
terms of the Agreement and with Prudent Electrical Practices for a ) year period.
11.That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 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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APPENDIX D
MODIFICATIONS, UPGRADES AND ADDITIONS
PROJECT NO. 41866112
S~PLOT POCA TELLO
This Facility is interconnected to Idaho Power and is selling energy to Idaho Power as a Qualifying
Facility in accordance with a Firm Energy Sales Agreement dated March 1 2004, prior to that agreement
this Facility was selling energy to Idaho Power as a Qualifying Facility in accordance with a Firm Energy
Sales agreement dated January 24, 1991, first amendment of November 30, 1993 and second amendment
dated February 23,2001. The Interconnection Facilities, Disconnection Equipment, Metering Equipment
Telemetry Equipment and Protection Equipment were designed, installed, operated and maintained in
accordance with these previous agreements.
Idaho Power has reviewed the existing Interconnection Facilities, Disconnection Equipment, Metering
Equipment, Telemetry Equipment and Protection Equipment and listed below are specific modifications
upgrades and lor additions required for these facility to continue to deliver energy to Idaho Power at the
Point of Delivery under this new Energy Sales Agreement. The Seller will be responsible to complete the
modifications, upgrades or additions as specified in this Appendix D. All costs of all items identified
within this Appendix D and payment to Idaho Power will be in accordance with Schedule 72.
INTERCONNECTION FACILITIES
Idaho Power has reviewed the existing Interconnection Facilities at the Sellers facility and finds
that no upgrades, modifications or additions are required that the Seller would at this time be
responsible for. If in the future, Prudent Electrical Practices, regulations, electrical codes or
safety codes require upgrades, modifications or additions to the existing equipment, Idaho Power
will notify the Seller of these requirements and the Seller will be responsible for all costs of all
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items identified and payment to Idaho Power will be in accordance with Schedule 72.
DISCONNECTION EQUIPMENT
Idaho Power has reviewed the existing Disconnection Equipment at the Sellers facility and finds
that no upgrades, modifications or additions are required that the Seller would at this time be
responsible for. If in the future, Prudent Electrical Practices, regulations, electrical codes or
safety codes require upgrades, modifications or additions to the existing equipment, Idaho Power
will notify the Seller of these requirements and the Seller will be responsible for all costs of all
items identified and payment to Idaho Power will be in accordance with Schedule 72.
METERING EQUIPMENT
Idaho Power has reviewed the existing Metering Equipment at the Sellers facility and finds that
no upgrades, modifications or additions are required that the Seller would at this time be
responsible for. If in the future, Prudent Electrical Practices, regulations, electrical codes or
safety codes require upgrades, modifications or additions to the existing equipment, Idaho Power
will notify the Seller of these requirements and the Seller will be responsible for all costs of all
items identified and payment to Idaho Power will be in accordance with Schedule 72.
TELEMETRY EQUIPMENT
Idaho Power has reviewed the existing Telemetry Equipment at the Sellers facility and finds that
no upgrades, modifications or additions are required that the Seller would at this time be
responsible for. If in the future, Prudent Electrical Practices, regulations, electrical codes or
safety codes require upgrades, modifications or additions to the existing equipment, Idaho Power
will notify the Seller of these requirements and the Seller will be responsible for all costs of all
items identified and payment to Idaho Power will be in accordance with Schedule 72.
PROTECTION EQUIPMENT
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Idaho Power has reviewed the existing Protection Equipment at the Sellers facility and finds that
no upgrades, modifications or additions are required that the Seller would at this time be
responsible for. If in the future, Prudent Electrical Practices, regulations, electrical codes or
safety codes require upgrades, modifications or additions to the existing equipment, Idaho Power
will notify the Seller of these requirements and the Seller will be responsible for all costs of all
items identified and payment to Idaho Power will be in accordance with Schedule 72.
Facility Owned Protective Relays - The facility owns and operates several protective
relays that provide protection to the Idaho Power System. As specified in paragraph 13.
of this Agreement, when the Seller s protective relays provide protection for the Idaho
Power system, Idaho Power annually tests these relays at the Seller s expense.
Historically, this testing has been accomplished by Idaho Power witnessing the Seller
annual tests of these relays. The Seller being responsible for costs of the tests and the
cost of Idaho Power providing a witness to these tests. This arrangement has
accommodated both parties in the past and will be continued until such time as either
Idaho Power or the Seller request in writing a change in this testing procedure.
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