20061218Schwendiman direct.pdf

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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR AN
ACCOUNTING ORDER AUTHORIZING THE
INCLUSION OF POWER SUPPLY
EXPENSES ASSOCIATED WITH THE
PURCHASE OF CAPACITY AND ENERGY
FROM TELOCASET WIND POWER
PARTNERS 1 LLC IN THE COMPANY '
POWER COST
ADJUSTMENT.
Case No. IPC-O6-3 (
IDAHO POWER COMPANY
DIRECT TESTIMONY
CELESTE SCHWENDIMAN
please state your name and business address.
My name is Celeste Schwendiman, and my
business address is 1221 West Idaho Street 1 Boise , Idaho.
By whom are you employed and in what
capaci ty?
I am employed by Idaho Power Company (Idaho
Power or the Company) as a Senior Pricing Analyst in the
Pricing and Regulatory Services Department.
Please describe your educational background.
I received a Master I s Degree in Business
Administration from Northwest Nazarene University and a
Bachelor of Arts Degree in Psychology from Eastern Oregon
University.I have attended the Center for Public Utilities
and National Association of Regulatory Utility
Commissioners I Practical Skills for a Changing Utility
Environment conference 1 and in 2004 , the Edison Electric
Institute s Electric Rate Advanced Course.
please describe your work experience with
Idaho Power Company.
I became employed by Idaho Power Company in
1997 as a Research Assistant II in the Pricing & Regulatory
Services Department.I have been promoted as follows:
February 1998, Entry Analyst; August 1998, Analyst; and July
2001, Senior Analyst.From 1998 through 2004, one of my
responsibili ties was to assist in the preparation of the
SCHWENDlMAN DI
Idaho Power Company
Power Cost Adjustment (PCA) filings.In 2005 and 2006, I
sponsored testimony in the Company s annual PCA filings.
2005, I sponsored tes timony as the Company I s Revenue
Requirement witness in its General Rate Case (Case No. IPC-
05-28.
In 2000 I served on the Company s 250 MW Peaking
Resource Request for Proposal (RFP) team.In 2003, I served
on the Company I s 200 MW Peaking Resource RFP team.The 2003
RFP resulted in the 2004 purchase of the Bennett Mountain
combustion turbine proj ect.Most recently 1 I participated
in evaluating the respondents ' bids submitted in the
Company 's 2005 Wind RFP.
please outline the maj or topics you will
address in your testimony in this proceeding.
There are three major topics that comprlse my
tes timony .First, I will briefly summarize the events that
preceded the development of the Power Purchase Agreement
(PPA) between the Company and Telocaset Wind Power Partners
LLC (Telocaset).Second, I will describe the principal
provisions of the PPA and its similarity to the Company
existing Firm Energy Sales Agreements wi th PURPA Qualifying
Facilities (FESAs).Third , I will discuss the treatment of
the PPA costs within the Company s PCA.
Could you please describe the events that led
to the development of the PPA?
SCHWENDlMAN DI
Idaho Power Company
The Company identified a need for wind-
powered electric generation in the 2004 Integrated Resource
Plan (IRP).As a result of this identified need , on January
13, 2005, the Company issued an RFP to purchase first-call
physically-delivered energy from wind-powered generation
resources located inside or near the Company I s service
terri tory.
Please describe the RFP process.
The Company followed a process similar to its
three previous RFP proj ects.This process consisted of:(1 )
selection of an independent consultant to serve on the team
(2) identification of specific attributes the Company would
require to meet the needs specified in the IRP (3 )
documentation of those attributes in the RFP document and
the evaluation document (4) release of the RFP document
(5) abiding to a pre-determined schedule which included a
pre-bid conference and question/answer opportuni ties (6 )
identification of a short-list of bidders based on pre-
determined evaluation procedures 1 and finally (7) selection
of a preferred bid.
Who outside of the Company also served on the
Company s RFP evaluation team?
Mr. William M. Eddie , JD , representing
Advocates for the West 1 accepted the Company s invitation to
serve on the evaluation team.The Company also retained the
SCHWENDlMAN DI
Idaho Power Company
services of Garrad Hassan America, Inc. (Garrad Hassan) for
addi tional analysis.Garrad Hassan is an international
consulting company that provides independent expert advice
on wind energy.Finally 1 the Company retained the services
of outside legal counsel , with experience in negotiating
wind contracts 1 to assist in developing the PPA.
Did the Company keep the Commission Staff
apprised of the RFP evaluation process?
Yes.Representatives from the Company met
twice with the Commission staff 1 during the course of the
RFP evaluation , to provide informational updates.
How was the project selected?
Prior to the release of the Company s RFP
document 1 the evaluation team created an evaluation manual
with specific criteria to score the respondents ' bids.The
cri teria for which each proj ect was scored included price
non-price 1 and wind attributes.Telocaset's proj ect scored
the highest ,over all other short-listed bids 1 in all three
areas identified.Of the short-listed bids 1 the Telocaset
project had the lowest price, the highest non-price
attribute score , and was Garrad Hassan s top scoring project
for wind attributes.
Has the Company successfully negotiated a
firm wholesale power purchase agreement with Telocaset?
Yes.A copy of the PPA is attached as
SCHWENDlMAN DI
Idaho Power Company
Exhibi t 1.
What is the location of the wind generation
proj ect?
The proj ect 1 which has been named the Elkhorn
Wind Power Project, will be located on a 23,900 acre site in
Union County 1 Oregon.The project will interconnect to the
Idaho Power Company transmission system at a point
approximately three miles northeast of North Powder 1 Oregon
on the Company 's Brownlee-Quartz-LaGrande 23 OkV transmission
line.
What is the size of the proj ect?
The proj ect will consist of 61 Vestas V82
wind turbine generators with a maximum installed nameplate
capaci ty of 104 MWs 1 and an expected capacity of 100.65 MWs.
When is the project expected to be in
service?
The proj ect I s guaranteed operation date is
March 21, 2008; however 1 Telocaset intends to attain an in-
service date of December 31 , 2007.I have been advised that
the in-service date is cri tical , because at the time of this
testimony 1 Federal Production Tax Credi ts (PTCs) are only
available to proj ects in-service by December 31, 2007.
Could you briefly discuss why the PPA with
Telocaset should be approved?
Contracting with Telocaset for this proj ect
SCHWENDlMAN DI
Idaho Power Company
is advantageous for a number of reasons.First, the
Telocaset proj ect was the best fit for the Company
identified need for wind-generation as evaluated through the
Company 's RFP process.
Second , Telocaset' s parent company 1 Horizon Wind
Energy is an experienced wind developer.Horizon has
developed more than 1 000 MWs of operating wind farms and
currently owns and operates eight wind generation projects
with generation capacity of 569 MWs.
Third, the A+ (Standard & Poor) and Aa3 (Moody '
Investors Services) credit ratings of Horizon Wind Energy
holding company 1 Goldman Sachs 1 made a good match for the
type of PPA partner that Idaho Power was seeking through the
RFP process.
Fourth, of all of the short-listed bidders
projects, the Telocaset project's generation output most
closely matched the Company I s seasonal load shape.The
project is expected to have an output profile that coincides
wi th the Company s summer and winter peaks.
Could you briefly summarize the principal
provisions of the PPA?
The principal provisions of the PPA are
similar to the Company I s existing FESAs with PURPA
Qualifying Facilities (QFs).The initial term of the PPA is
twenty years commencing on the in-service date and the
SCHWENDlMAN DI
Idaho Power Company
Company has an option to extend the term by ten years.
please describe the pricing provisions of the
PPA.
The purchase price will start at a base rate
of $48/MWh in 2008, with an annual escalation adjustment of
3%. The rate will also be subj ect to seasonal adjustments.
No payment is required by the Company for energy deliveries
that exceed the maximum contract amounts.Prices for energy
during any term extension will be negotiated by the parties
should the Company exercise its option to extend the term of
the PPA.
How does the energy price of $48/MWh in this
PPA compare to other options the Company might have?
The cost associated with this PPA is
competitive and favorable 1 when compared to alternative
resource options such as:(1) purchasing from a PURPA QF
project , or (2) purchasing a forward market product.The
current 2008 published first-year avoided cost rate for a
twenty-year 1 non-levelized QF FESA , as established through
Order No. 29646, is $53.90/MWh.
On November 15, 2006, I received quotes from the
Company s Power Supply Operations Manager for a Q3 2007,
forward-market bid and offer at Mid-Columbia of $77. 50/MWh
and $78.50/MWh, respectively.Bid and offer quotes for the
same product at Palo Verde were $85.50/MWh and $90.50/MWh,
SCHWENDlMAN DI
Idaho Power Company
respectively.Wi th an energy purchase at either of these
hubs 1 additional costs would be incurred for transmission
wheeling to the Idaho Power system.
Does the purchase price include the cost to
deliver energy to the Company s system?
Yes.The point-of-delivery is located on the
Idaho Power Company transmission system and Telocaset will
pay all interconnection costs.
Does acceptance of the power under the PPA
require the construction of any transmission system
upgrades?
I have been advised that transmission system
upgrades will be required for this proj ect 1 and Telocaset
has committed to fund the upgrades in accordance with FERC
requirements.
Please describe the generation forecasting
provisions of the PPA.
This PPA marks the first time a wind
generator 1 supplying electricity to Idaho Power 1 will
deliver detailed wind velocity and duration forecast data to
the Company.The proj ect will provide the Company with
real-time access to the wind forecasting service used by the
project , including forecasts of the energy to be delivered
during the next hour 1 next day 1 and next week.Having
access to real-time forecasting data will be beneficial to
SCHWENDlMAN DI
Idaho Power Company
the Company when integrating the wind generation into the
Company s resource supply mix.
What assurances does the PPA contain to
ensure that the Company will obtain timely and reliable wind
forecast data?
To ensure the Company receives timely and
reliable wind forecast data, the PPA contains a provision
that allows the Company to implement the same 90%-110%
performance band provision from the Company I s typical QF
FESAs 1 should the Telocaset proj ect fail to provide reliable
forecasts.
What other types of liability and damage
provisions are considered in the PPA?
The proj ect will be subj ect to additional
damages and caps, including delay damages of $100/MW for
each day the project does not become operational beyond the
guaranteed in-service date of March 21 , 2008.This delay
damage provision is capped at $1.8 million.Total liability
for any and all damages during the term of the PPA is capped
at $15 million.There are no limits for damages
attributable to willful breach of the PPA by the project.
Does the PPA include any damage provisions
should the proj ect fail to deliver the guaranteed annual
output of 196,000 MWh?
Yes.The project's compliance with its
SCHWENDlMAN DI
Idaho Power Company
delivery obligations will be examined at the end of the
second year of the PPA.If the proj ect failed to deliver
agreed-upon energy amounts during either of the first two
years 1 the project will have two years in which to make up
its delivery obligation to Idaho Power.If after the make-
6 \ good period (three years including the year at issue) 1 the
project does not make up the obligation, the project will
pay Idaho Power 1 at a starting rate of $25/MWh, subject to a
cap of $500,000/year, for the delivery obligation shortfall.
Both the price to be paid for the shortfall , and the cap of
the proj ect I s liability for any energy delivery shortfall,
will be subj ect to an annual escalation adjustment of 3% per
year.
Does the PPA allow Idaho Power an option to
purchase the proj ect?
Yes 1 it does.Should Telocaset decide to
sell the facility assets comprised of all , or a substantial
portion of the proj ect 1 Telocaset must first offer to sell
the assets to Idaho Power.
Under what circumstances can the PPA be
terminated beyond events of force majeure or other
traditional termination events?
Telocaset can terminate the PPA if:(1)
Telocaset does not enter into an acceptable interconnection
agreement by February 28, 2007 or (2) the scheduled
SCHWENDlMAN DI
Idaho Power Company
operation date is extended beyond December 31 , 2007 due to
force maj eure.The termination provisions are explained in
detail in Section 22 of Exhibit
What type of credit and collateral
requirements are built into the PPA?
Prior to the in-service date 1 Telocaset will
provide performance assurance of $1 million.On or after
the in-service date , Telocaset will maintain performance
assurance of $10 million.Addi tionally 1 the obligations of
Telocaset will be secured by a guaranty issued by Goldman
Sachs.Should the credit rating of Goldman Sachs fall below
a predetermined level , Goldman Sachs will be required to
post a liquid form of performance assurance.The
obligations of Idaho Power will be secured by the Company
balance sheet.
Please describe any other benefits of the
PPA.
First 1 the PPA contains performance and
forecasting requirements above what would be typical for a
QF FESA.For example 1 the PPA contains requirements that
at the project's expense 1 Idaho Power will be given detailed
real-time forecasting data.However 1 if the proj ect does
not adhere to the forecasting requirements 1 a 90%-110%
performance band will be implemented.The 90%-110%
performance band is similar to the performance mechanism
SCHWENDlMAN DI
Idaho Power Company
used in existing QF FESAs.
Second, if damages are incurred 1 the PPA includes
securi ty assurances that allow the Company to collect the
calculated damages.Goldman Sachs 1 Telocaset' s parent
company 1 is the backing enti ty on the guarantee.
Finally, in addition to the items identified above
the PPA package includes other items of value.Examples
include:(1) Telocaset will provide all renewable attributes
(green energy tags) from the proj ect to Idaho Power for no
addi tional cost (2) Idaho Power will receive an option to
extend the contract 1 and (3) Idaho Power will receive
termination rights wi thin the PPA.
How does the Company propose the costs
associated with this PPA be treated in the Company s PCA?
The Company entered into negotiations with
Telocaset with the intention of securing contract provisions
that would justify rate treatment similar to a typical QF
FESA.It is the Company s belief that it was not only
successful in this endeavor 1 but also that the price and the
provisions of the PPA are more attractive to the Company and
its customers than if the proj ect had contracted with Idaho
Power as a PURPA Qualifying Facility.Al though the PCA
tracks 100% of QF expense deviations the Company proposes
that the costs of the PPA be recovered in a manner similar
to non-QF expenses wi th 90% of variations captured through
SCHWENDlMAN DI
Idaho Power Company
the Company s PCA mechanism until the Company s next General
Revenue Requirement case, at which time the Company be
allowed to include the costs of the PPA in base rates.
Based upon your testimony in this proceeding
what is the Company s recommendation 1 with regard to the
Telocaset Wind Power Partners 1 LLC Agreement?
The Company recommends the Commission approve
the Telocaset Wind Power Partners 1 LLC Agreement for
ratemaking purposes and authorize Idaho Power to recover
expenses associated with power purchases from the PPA in the
Company s PCA.
Does this conclude your testimony?
Yes 1 it does.
SCHWENDlMAN DI
Idaho Power Company
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-O6-
ID AH POWER CO MP ANY
EXHIBIT NO.
CELESTE SCHWEND IMAN
DIRECT TES TIM 0 NY
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
This Power Purchase Agreement ("Agreement ), is entered into this
day of December, 2006, by and between TELOCASET WIND POWER
PARTNERS, LLC, a Delaware limited liability company with a principal place of
business at 808 Travis, Suite 700, Houston, TX 77002 (Seller ), and IDAHO POWER
COMPANY, an Idaho corporation with a principal place of business at 1221 W. Idaho
Street, Boise, ID 83702 (Buyer ). Seller and Buyer may be referred to individually as
Party " or jointly as Parties.
Recitals
A. Seller desires to develop, construct, own and operate a wind turbine
electric generating facility with an expected total installed nameplate capacity not to
exceed one hundred four (104) MW.
B. Seller has responded to Buyer s solicitation of bids for the provision of
renewable energy, and Buyer has accepted Seller s offer in accordance with the terms and
conditions set forth in this Agreement.
C. Seller and Buyer wish to enter into this Agreement in order to set forth the
terms and conditions under which Seller will sell and Buyer will purchase Net Energy
from Seller s Elkhom wind power project.
NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the sufficiency and adequacy of which are hereby acknowledged by each
Party, the Parties agree to the following:
ARTICLE 1.
DEFINITIONS
1 "Affiliate" means any other person or entity that controls, is under the
control of, or is under common control with, the named person or entity. For purposes of
this definition, the term "control" (including the terms "controls
" "
under the control of
PAGE 1 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
and "under common control with") means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or the policies of a person or
entity, whether through ownership interest, by contract or otherwise.
1.2 "Aggregate Price Adjustment" shall have the meaning given to that term
in Section 6.
1.3 "Alternative Contract Price" means the price for all Net Energy after the
Operation Date that has been agreed to by the Parties in this Agreement and referenced in
Appendix A as "Post-Operation Date Alternative Pricing.
1.4 "Bankrupt" means with respect to any entity, such entity (i) files a petition
or otherwise commences; authorizes or acquiesces in the commencement of a proceeding
or cause of action under any bankruptcy, insolvency, reorganization or similar law, or has
any such petition filed or commenced against it, (ii) makes an assignment or any general
arrangement for the benefit of creditors, (iii) otherwise becomes bankrupt or insolvent
(however evidenced), (iv) has a liquidator, administrator, receiver, trustee, conservator or
similar official appointed with respect to it or any substantial portion of its property or
assets, or (v) is generally unable to pay its debts as they fall due. The term "Bankruptcy
shall have a corollary meaning when used herein.
5 "Business Day" means any calendar day that is not a Saturday, a Sunday,
or a NERC recognized holiday.
1.6
successor),
Commission" means the Idaho Public Utilities Commission (or its
7 "Commission Approval" means an order issued by the Commission
approving this Agreement and finding the Contract Price to be reasonable and that all
payments to be made to Seller under this Agreement shall be allowed as prudently
incurred expenses of Buyer for ratemaking purposes, without conditions or modifications
other than condition(s) or modification(s) 'accepted in writing by the Party or Parties
adversely affected by such condition(s) or modification(s).
8 "Conditions Precedent to Alternative Pricing" shall mean the conditions
set forth in Appendix 1.
1.9 "Contract Price" means the price for all Net Energy after the Operation
Date that has been agreed to' by the Parties in this Agreement and referenced in
Appendix A as "Post-Operation Date Pricing.
10 "Contract Year" means the period commencing each calendar year on the
same calendar date as the Operation Date and ending one (1) year later.
11 "Credit Rating" means (i) with respect to any entity other than a financial
institution, the (a) current ratings issued or maintained by S&P's or Moody s with respect
to such entity s long-term senior, unsecured, unsubordinated debt obligations (not
supported by third-party credit enhancements) or (b) corporate credit rating or long-term
PAGE 2 of 51- POWERPURCHASESALESAGREEMENT-TELOCASETIIPC
issuer rating issued or maintained with respect to such entity by S&P's or Moody , or
(ii) if such entity is a financial institution, the ratings issued or maintained by S&P's or
Moody s with respect to such entity s long-term, unsecured, unsubordinated deposits.
12 "Curtailment Period" means the period of time during which deliveries of
energy by Seller to Buyer at the Point of Delivery are curtailed in whole or in part as
provided in Section 9.2 of this Agreement.
1.13
Section 9.2.
Deemed Deliver~d Net Energy" has the meaning given to that term in
1.14 Delay Damages" has the meaning given to that term in Section 21.4.
15 "Delivery Obligation has the meaning given to that term in
Section 6.4.1.4.
1.16 "Designated Dispatch Facility" means Buyer s Systems Operations Group,
or any subsequent group designated by Buyer.
17 "Economic Dispatch" means curtailing or restricting the energy output of
the Facility because energy is available, or perceived to be available, from an alternative
source for a lower price.
1.18 Effective Date" means the date fITst written above.
19 "Emergency" means an emergency condition as defined under the
Interconnection Agreement or the applicable OATT.
1.20 "Environmental and Renewable Energy Credits" means the aggregate
amount of environmental air quality credits, off-sets, or other benefits related to the Net
Energy from the Facility that Buyer purchases ITom Seller under this Agreement in
manner that reduces, displaces or off-sets emissions resulting ITom fuel combustion at
another location pursuant to any federal, state or local legislation or regulation, and the
aggregate amount of credits, offsets or other benefits related to Buyer s current marketing
program, any successor green pricing program, or other environmental or renewable
energy credit trading program derived ITom the use, purchase or distribution of Net
Energy from the Facility or any similar program pursuant to any federal, state or local
legislation or regulation. Notwithstanding any other provision of this Agreement
Environmental and Renewable Energy Credits do not include: (i) the PTCs, (ii) any
investment tax credits, and any other tax credits, deductions or tax benefits associated
with the Facility, and (iii) any state, federal, local or private cash payments or grants
relating in any way to the Facility, the output of the Facility or the PTCs.
21 "Facility" means the electric generation facility described in Appendix B
commonly known as Seller s Elkhorn wind project and expected to have a capacity of
100.65MW.
PAGE 3 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
1.22 "Facility Assets shall have the meanIng gIVen to that term in
Section 25.
1.23 "Facility Debt" means the obligations of Seller to any lender pursuant to
the Financing Documents with respect to any Project Financing.
1.24 "Facility Lender" means, collectively, any lender( s) providing any Facility
Debt and any successor(s) or assigns thereto.
1.25 "Federal Production Tax Credit Legislation" means validly enacted
Federal legislation extending the applicability and rate of the renewable energy
production tax credit (26 u.S.C. ~ 45) to owners of generating facilities which use wind
to produce electric energy that are placed in service on or before December 31 , 2008, or
such other date as may be agreed to in a writing signed by both Parties, on terms no less
favorable to owners of wind generating facilities than those available with respect to such
facilities placed in service on or after January 1 , 2004, and before January 1 , 2008
pursuant to the law governing federal PTCs as in effect on the Effective Date including,
but not limited to, a tax credit allowable for at least ten years of at least $19.47 per MWh
in 2006 dollars adjusted for inflation as set forth in the law governing federal PTCs on the
Effective Date.
26 "Financing Documents" means the loan and credit agreements, notes
bonds, indentures, security agreements, lease financing agreements, mortgages, deeds of
trust, and other documents relating to any Project Financing for the Facility, including
any working capital financing or refinancing documents (but only if such refinancing is a
Project Financing), and any and all amendments, modifications, or supplements to the
foregoing that may be entered into from time to time at the discretion of Seller in
connection with any Project Financing of the Facility.
1.27 "First Energy Date" means the day commencing at 0001 hours, Pacific
Time, following the day that the conditions in Section 3.1 have been satisfied.
1.28 "Forecast Cure Period" has the meaning given to that term in
Section 6.3.
1.29 "Good Utility Practice(s)" means the practices, methods, and acts
(including, but not limited to, the practices, methods, and acts engaged in or approved by
a significant portion of the electric power generation industry and/or NERC) that, at a
particular time, in the exercise of reasonable judgment in light of the facts known or that
should reasonably have been known at the time a decision was made, would have been
expected to accomplish the desired result in a manner consistent with law, regulation
permits, codes, standards, equipment manufacturer s recommendations, reliability, safety,
environmental protection, economy, and expedition. With respect to the Facility, Good
Utility Practice(s) include, but are not limited to, taking reasonable steps to ensure that:
(i) equipment, materials, resources, and supplies, including spare parts inventories, are
available to meet the Facility s needs; (ii) sufficient operating personnel are available at
all times and are adequately experienced and trained and licensed as necessary to operate
PAGE 4 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
the Facility properly, efficiently, and in coordination with Buyer, and are capable of
responding to reasonably foreseeable Emergency conditions; (iii) preventive, routine, and
non-routine maintenance and repairs are performed on a basis that ensures reliable
long-term and safe operation, and are performed by knowledgeable, trained, and
experienced personnel utilizing proper equipment and tools; (iv) appropriate monitoring
and testing are performed to ensure equipment is functioning as designed; (v) equipment
is not operated in a reckless manner; in violation of manufacturer s guidelines or in a
manner unsafe to workers, the general public, or the interconnected system or contrary to
environmental laws, permits or regulations, or without regard to defined limitations such
, flood conditions, safety inspection requirements, operating voltage, cunent
Volt-Ampere reactive (V Ar) loading, frequency, rotational speed polarity,
synchronization and/or control system limits; and (vi) equipment and components meet
or exceed the standard of durability that is generally used for electric generation
operations in the region and will function properly over the full range of ambient
temperature and weather conditions reasonably expected to occur at the Site and lmder
both normal and conditions involving an Emergency.
1.30 Guaranteed Operation Date" means March 31 , 2008.
1.31 "Guaranteed Output" means 196 000 MWh per Contract Year assuming a
100.65MW Facility. If the Facility is for any reason completed at a capacity different
from 100.65MW, the Guaranteed Output shall be adjusted on a pro rata basis to reflect
the changed capacity.
32 "Guaranty" means an instrument or agreement pursuant to which
guarantor guarantees the performance of the obligations of an obligor, which instrument
or agreement is substantially in the form set forth as Appendix C.
33 "Guaranty Default" means with respect to a Guaranty or the guarantor
thereunder, the occurrence of any of the following events: (i) any representation or
warranty made or deemed to be made or repeated by such guarantor in connection with
such Guaranty shall be false or misleading in any material respect when made or when
deemed made or repeated; (ii) such guarantor fails to pay, when due, any amount required
pursuant to such Guaranty; (iii) the failure of such guarantor to comply with or timely
perform any other material covenant or obligation set forth in such Guaranty if such
failure is not capable of remedy or shall not be remedied in accordance with the terms
and conditions of such Guaranty; (iv) such Guaranty shall expire or terminate, or shall
fail or cease to be in full force and effect and enforceable in accordance with its terms
against such guarantor, prior to the satisfaction of all obligations of the obligor under this
Agreement, in any such case without replacement; (vi) such guarantor shall repudiate
disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of, its
Guaranty, or (vii) such guarantor becomes Bankrupt; provided, however, that no
Guaranty Default shall occur or be continuing in any event with respect to a Guaranty
after the time such Guaranty is required to be canceled or returned to a Party in
accordance with the terms ofthis Agreement.
1.34 Initial Term" has the meaning given to that term in Section 4.
PAGE 5 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
1.35 "Interconnection Agreement" the agreement between the Interconnection
Provider and the Seller that enables the Seller s energy to be delivered and integrated into
the Interconnection Provider s electrical system.
1.36 "Interconnection Failure" means any condition, contingency or event
under the Interconnection Agreement or OATT authorizing the Interconnection Provider
to disconnect, or restrict the delivery of energy from, Seller s Interconnection Facilities
including but not limited to any emergency or force majeure as defined in the
Interconnection Agreement (or comparable uncontrollable circumstances as may be
defined in the applicable OATT) to the extent it causes the curtailment of Seller
deliveries of energy at the Point of Delivery, or other need for the
Interconnection Provider to protect the Interconnection Provider s System.
1.3 7 "Interconnection Facilities" means all equipment specified in the
Interconnection Agreement and any additional equipment specified in Appendix B.
1.38 "Interconnection Provider" means Idaho Power Company acting in its
capacity as a transmission provider and any successor(s) or assign(s) of that entity that
operate the transmission lines and other equipment and facilities that interconnect with
the Facility.
1.39 "Interest Rate" means: (i) for purposes of identifying the Interest Rate to
be paid on cash collateral, an annual interest rate equal to the overnight federal funds
rates, and (ii) for purposes of identifying the Interest Rate to be paid in an event of
default, an annual interest rate equal to one hundred percent (100%) of the LIBOR
three (3) month rate plus two hundred (200) basis points. The designated Interest Rate
shall be the rate published on the date of the invoice, or other notice, in The Wall Street
Journal (or, if The Wall Street Journal is not published on that day, the next succeeding
date of publication); provided, however that the annual interest rate used as the Interest
Rate shall not exceed the maximum rate permitted by law.
1.40 "Investor" means any investor or investors (including any transferees of
such investors) that acquire a direct or indirect interest in Seller as part of a transaction to
cause the Facility to be owned in whole or in part by an entity that can use the PTCs or
any other tax subsidies that the federal government offers to encourage production of
energy from wind energy facilities.
1.41 "Lost Output" means the Net Energy, measured in MWh, that the Facility
was available to produce and could reasonably have been expected to produce over the
relevant measurement period, based upon historical performance and/or actual operating
conditions, but that was not generated or delivered due to (1)force majeure (2) Buyer
default under this Agreement; (3) any curtailment under Section 9.2, or (4) the energy
having been used by or for the benefit of the Interconnection Provider at the Facility
substation if required by the Interconnection Provider. Seller shall provide Buyer
evidence of Lost Output hours that have occurred during a given calendar month at the
time it provides Buyer with the invoice for the calendar month following the month in
which the Lost Output occurred.
PAGE 6 of 51- POWER PURCHASE SALES AGREEMENT-TELOCASET/IPC
1.42 "Market Price of Energy" shall mean (1) if the Buyer sells the energy that
would have been curtailed as a result of Section 9.2.1 of this Agreement to a party other
than Idaho Power, the Market Price of Energy shall be the price received by the Buyer
from the purchasing party, (2) if the Buyer is able to arrange for delivery of the energy
that would have been curtailed as a result of Section 9.1 of this Agreement to Idaho
Power at an additional point of delivery, the Market Price of Energy shall be the Contract
Price specified within this Agreement.
1.43 "Material Adverse Change" means with respect to Seller s Guarantor
Seller s Guarantor has (a) a Credit Rating below BBB- by S&P or below Baa3 by
Moody , or (b) a Credit Rating of BBB- by S&P accompanied by a negative watch or
Baa3 by Moody s accompanied by a negative watch, or (c) both ratings are withdrawn or
terminated on a voluntary basis by the rating agencies. If S&P changes its rating system
during the Term
, "
BBB-" shall be replaced by S&P's lowest investment grade rating
under the new rating system; likewise, if Moody s changes its rating system during the
Term
, "
Baa3" shall be replaced by Moody s lowest investment grade rating under the
new rating system.
1.44 "Metering Equipment" means all equipment specified in the
Interconnection Agreement, this Agreement, and any additional equipment specified in
Appendix D required to measure, record and telemeter power flows between the Facility
and Buyer s system.
1.45 Moody " means Moody s Investor Services, Inc. (or its successor).
1.46
successor).
NERC" means the North American Electric Reliability Council (or its
1.47 "Net Energy" means all of the electric energy produced by the Facility,
delivered by the Seller to the Point of Delivery (including Test Energy), expressed in
megawatt hours (MWh).
1.48 "Net Energy Shortfall" has the meaning given to that term in
Section 6.4.
1.49 "Net Energy Shortfall Damages" has the meaning given to that term in
Section 6.4.2.
1.50 "OATT" means the Open Access Transmission Tariff applicable to the
Interconnection Provider s System.
51 "Operation Date" means the day commencing at 0001 hours, Pacific Time
following the day that all conditions of Section 4.4 have been satisfied.
52 "Performance Assurance" means collateral in the form of either a
Guaranty, cash, letter(s) of credit, or other security acceptable to Buyer.
PAGE 7 of 51- POWER PURCHASE SALES AGREEMENT- TELOCASET/IPC
1.53 "Point of Delivery" means the point where the Facility s interconnection
facilities interconnect to Interconnection Provider s interconnection facilities on the
230 kV (high side) of the transformer at a point on the LaGrande-Brownlee 230 kV
transmission line, as more particularly described in Appendix B.
54 "Project Financing" means financing for the acquisition, construction and
installation of the Facility: (A) that is not obtained from an Affiliate of Seller; and
(B) the recourse on which is limited to the Facility and the revenues generated by the
Facility.
55 "PTCs" means Production Tax Credits applicable to electricity produced
from certain renewable resources pursuant to 26 US.C. 945, or such substantially
equivalent tax credit that provides Seller with a tax credit based on energy production
from any portion of the Facility. For purposes of this definition
, "
substantially
equivalent" means a federal income tax credit that, at a minimum, produces the same
aggregate present value amount of tax credits (as determined by Seller in a commercially
reasonable manner and expressed in dollars) over the same period of time (based on the
reasonably expected Net Energy output of the Facility during such period) as is currently
provided pursuant to 26 US.C. 9 45 and that includes an annual inflation adjustment
factor at least equal to that currently provided pursuant to 26 US.C. 945.
1.56 Scheduled Operation Date" means December 1 , 2007.
1.57 "Seller s Guarantor" means The Goldman Sachs Group, Inc., or a
successor or assignee thereof that is not experiencing a Material Adverse Change.
1.58 Shortfall Year" has the meaning given to that term in Section 6.4.1.3.
59 "Site" means the parcel of real property on which the Facility will be
constructed and located, including any easements, rights-of-way, surface use agreements
and other interests or rights in real estate reasonably necessary for the construction
operation and maintenance of the Facility. The Site is more specifically described in
Appendix B.
1.60 "S&P" means Standard & Poor , a division of McGraw-Hill Companies
Inc. (or its successor).
61 "Tax Benefits" means an amount equal to: (A) the PTCs to which Seller
would have been entitled with respect to energy not taken by Buyer under Section 6.10;
plus (B) a "gross up" amount to take into account the federal, state and local income tax
to Seller on such payments in lieu ofPTCs so that the net amount retained by Seller, after
payment of federal, state and local income taxes, is equal to the amount set forth in
clause (A) of this definition. For purposes of determining the foregoing, Seller shall
deliver a certificate from an officer of Seller stating the corporate income tax rates
(federal, state or local, as applicable) that are in effect for Seller during the tax year in
which the receipt of such Tax Benefits payment is taxed, and such income tax rates shall
be used in the calculation of Tax Benefits.
PAGE 8 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET /IPC
62 "Tenn" means the period of time during which this Agreement shall
remain in full force and effect, including the Initial Term and any extension of the Term
as provided in Article 4.
1.63 "Test Energy" means the Net Energy that is produced by the Facility prior
to the Operation Date.
1.64 "Total Annual Facility Energy" means the sum of Net Energy plus Lost
Output, if any, for a particular Contract Year.
1.65 "Transaction Costs" means, as applicable, (1) all costs incurred in a
commercially reasonable manner by the Buyer to sell energy that would otherwise be
curtailed under Section 9.2 at Mid-Columbia transaction point, or (2) costs incurred in a
commercially reasonable manner by the Buyer to deliver such energy to an alternative
point of delivery other than the Point of Delivery specified within this Agreement.
Transaction Costs include, but are not limited to; transmission electric losses
transmission, network service, ancillary service costs, energy firming service costs
transaction fees and service charges associated with marketing and/or delivering the
energy to the point of sale or to the alternative point of delivery, whichever delivery point
is applicable.
1.66 Transferred Assets" has the meaning given to that term in Section 22.5.5.
1.67 True-Up Period" has the meaning given to that term in Section 6.4.1.3.
1.68 True-Up Shortfall" has the meaning given to that term in Section 6.4.1.4.
ARTICLE 2.
RULES OF CONSTRUCTION
General.The defined terms listed in Article 1 (as indicated by initial
capitalization) shall have the meanings set forth in Article 1 whenever the terms appear in
this Agreement and attached Appendices, whether in the singular or the plural or in the
present or past tense. Other terms used in this Agreement but not listed in Article 1 shall
have meanings as commonly used in the English language and, where applicable, in
Good Utility Practice. Words not otherwise defined in this Agreement that have
well-known and generally accepted technical or trade meanings are used in accordance
with such recognized meanings. ill addition, the following rules of interpretation shall
apply:
1.1 The masculine shall include the feminine and neuter.
1.2 References to "Articles
" "
Sections " or "Appendices" shall
be to articles, sections, or appendices of this Agreement.
1.3 The Appendices attached to this Agreement are
incorporated in and are intended to be a part of this Agreement.
PAGE 9 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
1.4 This Agreement was negotiated and prepared by both
Parties with the advice and participation of counsel. The Parties have
agreed to the wording of this Agreement, and none of the provisions
this Agreement shall be construed against one Party on the ground that
such Party is the author of this Agreement or any part of this Agreement.
The Parties shall act reasonably and in accordance with the
principles of good faith and fair dealing in the performance of this
Agreement. Unless expressly provided otherwise in this Agreement
(i) where the Agreement requires consent, approval, or a similar action by
a Party, such consent, approval or other action shall not be unreasonably
withheld, conditioned or delayed, and (ii) where the Agreement gives a
Party a right to determine, require, specify or take similar action with
respect to a matter, such determination, requirement, specification or
similar action shall be reasonable.
2.2 Interpretation of Interconnection Agreement.The Parties recognize that
the Seller will enter into a separate Interconnection Agreement with the Interconnection
Provider.
2.2.The Parties acknowledge and agree that the Interconnection
Agreement shall be a separate and free-standing contract, and that the
terms of this Agreement are not binding upon the Interconnection
Provider.
2.2.2 Notwithstanding any other provision in this Agreement
nothing in the Interconnection Agreement shall alter or modify the
Buyer s or Seller s rights, duties and obligations under this Agreement.
This Agreement shall not be construed to create any rights between the
Seller and the Interconnection Provider.
2.3 Seller expressly recognizes that, for purposes of this
Agreement, the Interconnection Provider shall be deemed to be a separate
entity and separate contracting party whether or not the Interconnection
Agreement is entered into with Interconnection Provider or an Affiliate
the Buyer.
ARTICLE 3.
CONDITIONS TO ACCEPTANCE OF NET ENERGY
FIRST ENERGY DATE
Conditions Before the First Energy Date and as a condition of the
Buyer s acceptance of deliveries of energy from the Seller:
1.1 The Commission shall have approved this Agreement as
contemplated by Article 24, or Buyer shall have waived such approval.
PAGE 10 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET IIPC
1.2 Seller shall have notified Buyer of the expected First
Energy Date no later than five (5) Business Days before the expected First
Energy Date.
1.3 Seller shall have delivered to the Buyer a certificate signed
by an officer of Seller (1) certifying that all licenses, permits or approvals
necessary for Seller s commencement of deliveries have been obtained
from applicable federal, state or local authorities, and (2) listing all such
licenses, permits and approvals.
1.4 Opinion of Counsel.Seller shall have submitted to the
Buyer an Opinion Letter signed by a law firm that includes attorneys
admitted to practice and in good standing in the State of Oregon providing
an opinion that Seller s licenses, permits and approvals as set forth in
Section 3.1.3 above are legally and validly issued, are held in the name of
the Seller and, based on a reasonable review (which may include reliance
on certificates provided by officers or other responsible personnel of
Seller), the firm 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 Buyer and will acknowledge that the firm
rendering the opinion understands that Buyer is relying on said opinion in
connection with and for the purposes of this transaction. Buyer
acceptance of the form will not be unreasonably withheld, conditioned or
delayed. 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). If Buyer does not object in
writing to the proposed form of Opinion Letter within ten (10) BusinessDays after receiving in it, it shall be deemed accepted.
1.5 Seller shall have submitted written proof to the Buyer that
Seller has obtained all insurance required in Article 11.
1.6 Seller shall have delivered to the Buyer a certificate signed
by an officer of Seller certifying that all Seller and Interconnection
Provider interconnection equipment is installed, tested and is able to
accept and transmit the energy from the Seller s Facility to the Buyer in a
safe and reliable manner.
1.7 Seller shall have delivered to Buyer a true and correct copy
of the "Commissioning Completion Certificate" received from the turbine
supplier for each wind turbine that has been commissioned in accordance
with the terms of Seller s turbine supply agreement, together with a
complete copy of the associated "Commissioning Completion Checklist"
and the "Commissioning Data Sheet" for each such wind turbine.
The conditions set forth in this Section 3.1 are to be used solely for purposes ofdetermining when the Facility has achieved its First Energy Date. They are not
PAGE 11 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
intended to affect in any way when wind turbines are deemed to have been
placed in service" for purposes ofPTC eligibility.
Intermittent Deliveries of Test Energy. Buyer acknowledges and agrees
that Seller may deliver Test Energy from the Facility intermittently after the First Energy
Date.
ARTICLE 4.
TERM AND OPERATION DATE
Term
Initial Term. This Agreement shall become effective as of
the Effective Date, and shall remain in full force and effect through the
December 31 st next following the twentieth (20th) anniversary of the
Operation Date, subject to any termination provisions set forth in this
Agreement (the "Initial Term
1.2 Buyer s Option to Extend Term. Buyer shall have the
option to extend the Term so that this Agreement remains in full force and
effect through the December 31 st next following the
thirtieth (30th
anniversary of the Operation Date, subject to any termination provisions
set forth in this Agreement. Buyer may exercise this option by giving
irrevocable notice of exercise to Seller on or before the eighteenth (18th
anniversary of the Operation Date. If Buyer does not timely exercise this
option, the option shall automatically expire. The option set forth in this
Section shall automatically terminate upon any termination of this
Agreement. If Buyer timely exercises this option, the parties will
negotiate, in good faith, the terms and conditions under which the Term of
this Agreement would be extended through the December 31 st next
following the thirtieth (30th) anniversary of the Operation Date; provided
however the option set forth in this Section shall terminate without
liability to either Party if the Parties fail to enter into a definitive written
agreement concerning the extension to the Term within six (6) months
following the date of Buyer s notice. The terms and conditions of any
such extension shall be subject to the Parties ' respective management
Board of Directors, and any requireq Commission approval.
4.2 Progress Reports. On the first day of each calendar month following the
Effective Date until the Operation Date is achieved, Seller shall submit to the Buyer
progress reports to the Buyer on the development and construction of the Facility in a
form reasonably satisfactory to the Buyer.
Monitoring of Facility. Buyer shall have the right at its sole risk and
expense to monitor the construction, start-up and testing of the Facility and the Seller
shall comply with all reasonable requests of the Buyer with respect to these monitoring
events. Seller shall cooperate in such physical inspections of the Facility as may be
PAGE 12 of 51- POWERPURCHASESALESAGREEMENT-TELOCASETIIPC
reasonably requested by the Buyer during and after completion of construction. All
persons visiting the Facility on behalf of the Buyer shall comply with all of the Seller
applicable safety and health rules and requirements. Buyer s technical review and
inspection of the Facility shall not be construed as endorsing the design of the Facility
nor as any warranty ofthe safety, durability, or reliability of the Facility.
4.4 Operation Date. Seller will in good faith seek to achieve the Operation
Date by the Scheduled Operation Date. The Operation Date shall occur after all of the
following conditions have been satisfied:
4.4.Wind turbines with an aggregate nameplate capacity of at
least ninety percent (90%) of the wind turbines to be installed at the
Facility have been installed and commissioned in accordance with
Section 3.1.7.
4.4.All Facility systems necessary for the operation of the
installed wind turbines are complete, any testing of the installed wind
turbines required pursuant to the Interconnection Agreement has been
completed, and the Facility is available for operation in all material
respects in accordance with Applicable Laws.
4.4.Seller shall have delivered to Buyer a "Certificate
Facility Completion" signed by an officer of Seller certifying that the
requirements of Sections 4.4.1 and 4.4.2 have been satisfied with respect
to the Facility and all installed wind turbines.
4.4.4 Seller shall notify the Buyer of the Seller s proposed
Operation Date no later than five (5) Business Days prior to the proposed
Operation Date.
These Operation Date requirements are to be used solely for purposes of
determining when the Facility has achieved its Operation Date. They are
not intended to affect in any way when wind turbines are deemed to have
been "placed in service" for purposes ofPTC eligibility.
Buyer s Approval of Operation Date: Disagreements. Seller s designation
of the Operation Date shall be subject to Buyer s approval, which Buyer shall not
unreasonably withhold, condition or delay. No later than five (5) Business Days after
Seller s notification to the Buyer of the Seller s proposed Operation Date, as specified in
Section 4.4.4, Buyer shall send Seller a written response notice, either (A) approving the
Operation Date specified in the notice, or (B) setting forth in reasonable detail Buyer
reasons for concluding that the Operation Date has not been achieved or will be achieved
on a date other than the date designated in Seller s notice. If Buyer does not respond on
or before the fifth (5th) Business Day after Seller s notice, the Operation Date shall be
deemed to have occurred on the date designated in Seller s notice. If Buyer reasonably
disagrees that the Operation Date has been achieved, the Parties shall cooperate promptly
and in good faith to address Buyer s concerns and agree upon the Operation Date. If the
PAGE 13 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET IIPC
Parties are unable to agree to an Operation Date within ten (10) Business Days of Buyer
notice of disagreement, either Party may pursue dispute resolution under Article 20 to
determine the Operation Date.
Continuing Obligations Seller shall provide Buyer with the following
during the Term of this Agreement:
1 At Buyer s request, Seller shall provide evidence that it is
in compliance with the insurance requirements set forth in Section 11.
6.2 Seller shall maintain compliance with all permits and
licenses described in Section 3.1.3 of this Agreement. In addition, Seller
shall supply Buyer with copies of any new or additional permits or
licenses.
ARTICLE 5.
PRICE
Test Energy Price:Notwithstanding any other energy pricing provisions
in the Agreement, Buyer shall pay the Seller at a rate equal to $40.80 for each MWh of
Test Energy delivered in 2007 and $42.02 for each MWh of Test Energy delivered in
2008.
Net Energy Price. For all Net Energy delivered by the Seller to the Buyer
from the Operation Date through the end of the Initial Term, Buyer shall (except to the
extent that pricing in Section 6.10 and/or Section 9.2 is applicable) pay the Seller the
Contract Price (or, if Buyer has exercised the option set forth in Appendix J, the
Alternative Contract Price).
Environmental and Renewable Energy Credits. The price that the Buyer is
to pay Seller under this Agreement for all Net Energy includes payment for all
Environmental and Renewable Energy Credits associated with such Net Energy. Title to
such Environmental and Renewable Energy Credits shall pass to the Buyer concurrently
with the transfer of title to such Net Energy to the Buyer. Buyer shall own or be entitled
to claim all Environmental and Renewable Energy Credits to the extent such credits may
exist during the Term (including any value in the ownership, use or allocation of
Environmental and Renewable Energy Credits created by legislation or regulation after
the Effective Date).
5.4 Alternative Pricing Option. Buyer shall have the option to elect to use the
Post-Operation Date Alternative Pricing after it satisfies the Conditions Precedent to
Alternative Pricing.
5.5 Prices, Terms and Conditions to Remain in Effect for Term. The prices
terms and conditions of service specified in this Agreement shall remain in effect until
expiration of the Term. Notwithstanding any provision in this Agreement, neither Party
shall seek, nor shall support any third party in seeking, to prospectively or retroactively
revise the prices, terms or conditions of service of this Agreement through application or
PAGE 14 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
complaint to FERC pursuant to the provisions of Section 205 , 206 or 306 of the Federal
Power Act, or any other provisions of the Federal Power Act, absent the prior written
agreement of the Parties. Further, absent the prior agreement in writing by both Parties
the standard of reyiew for changes to the prices, terms and conditions of service of this
Agreement proposed by a Party, a non-Party or the FERC acting sua sponte shall be the
public interest" standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas
Service Corp.350 US 332 (1956) and Federal Power Commission v. Sierra Pacific
Power Co.350 US 348 (1956).
ARTICLE 6.
DELIVERY, FORECASTING AND TRANSMISSION OBLIGATIONS
6.1 Delivery of Net Energy. Seller shall sell and deliver, and Buyer shall pay
for, all Net Energy up to a maximum amount of 1O0.65MWs per hour (2 415.6 MWhs
per day) throughout the Term, assuming a 1O0.65MW Facility. If the Facility is for any
reason completed at a capacity different than 1O0.65MW, the maximum amount of Net
Energy will be adjusted on a pro rata basis to reflect the actual capacity of the Facility;
provided that the actual capacity of the Facility shall not exceed 1O4MW. If Seller
delivers energy from the Facility to the Point of Delivery in an amount that exceeds the
maximum amount determined under this Section, Buyer may receive, but shall not be
obligated to pay for, any energy in excess of the maximum amount determined pursuant
to this Section.
6.2 Forecasting. At its expense, Seller shall provide to Buyer for the Term, or
shall engage a third party to provide to Buyer for the Term, the forecasting service used
by the Seller and set forth in this Section 6.2, via (i) a web-based interface hosted at a
forecast service provider selected by Seller, and (ii) a direct data feed to Buyer including
up to ten (10) designees of Buyer. The expenses to be borne by Seller include but are not
limited to all initial setup costs, ongoing maintenance costs and periodic update costs for
the forecasting service. Each forecast will take into account any scheduled outages and
any known forced outages or deratings affecting the Facility. No later than sixty (60)
days after the Commission approves this Agreement, Seller shall propose to Buyer the
detailed format of all services contemplated by this Section 6.2. The proposed format
shall be subject to Buyer s approval, which Buyer shall not unreasonably withhold
condition or delay. The forecasting services shall consist of:
6.2.Next Week Forecast.A forecast of the Facility's hourly
average wind speed and Net Energy for the next week. The Next Week
Forecast shall be delivered to Buyer daily (no later than 5:00 am Pacific
time) by electronic mail and shall cover each hour of the following
seven (7) days in 168-hour time slots. To generate the Next Week
Forecast, Seller or its service provider shall configure, customize, and
operate a non-hydrostatic mesoscale atmospheric model for the prediction
of wind speed, direction and power production at the Site.
6.2.2 Next Day Forecast.forecast of the Facility s hourly
average wind speed and Net Energy for each hour up to forty-eight (48)
PAGE 15 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
hours into the future. The Next Day Forecast shall be updated
approximately every six (6) hours. The initial update frequency of the
forecast shall be four (4) times per day with forecasts covering the next
forty-eight (48) hours. New forecasts shall be delivered to Buyer as soon
as they are available. To generate the Next Day Forecast, Seller s forecast
provider shall configure, customize, and operate a non-hydrostatic
mesoscale atmospheric model for the prediction of wind speed, direction
and Net Energy production at the site.
6.2.3 Daily Generation Forecast.A daily generation forecast
which shall be delivered to Buyer each day before 5:00 a.m. Pacific time
for the period beginning at 6:00 a.m. Pacific time that day and continuing
through the succeeding forty-eight (48) hours, in scheduling intervals to be
specified along with the format proposed under Section 6.2, updated
within ten (10) minute increments.
2.4 Next Hour Forecast.A forecast of the hourly average wind
speed and Net Energy generation of the Facility. The Next Hour Forecast
shall be updated as often as every ten (10) minutes and cover every hour
for the next twelve (12) hours. Initial update frequency of the hour ahead
forecast shall be three (3) times per hour at 10, 30 and 50 minutes past the
top of the hour. To generate the Next Hour Forecast, Seller or the forecast
provider shall train a neural network (or other suitable adaptive statistical
technique) on the leading predictors of wind energy output, which may
include combinations of on-site, off-site (if and when available) and
mesoscale numerical weather prediction model output.
6.2.Designation of Confidence Intervals.The forecast product
for hour, day, and week-ahead forecasts will include confidence intervals
surrounding each forecast. Forecast confidence intervals will be
calculated from a combination of previous forecast errors, the current
forecast production, and the expected confidence of the current numerical
weather prediction forecast based on ensembles of numerical weather
prediction solutions. The confidence interval shall be clearly shown and
included in all forecasts delivered to Buyer and its designees.
6, Basis of Forecasts The forecasts called for by this
Agreement shall be consistent with Good Utility Practices but shall be
non-binding, good faith estimates only. The Parties acknowledge and
agree that wind is difficult to forecast and that forecasts for the Facility
will vary from actual wind speeds and Facility output even though
forecasting is being performed in a manner consistent with Good Utility
Practice. On or before July 1 during each calendar year in the Term
Seller shall determine (after consulting with the Buyer), which forecasting
model or models, and which forecasting service or services to utilize in the
next calendar year. The proposed forecasting model(s) and service(s)
PAGE 16 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
shall be subject to Buyer s approval, which Buyer shall not unreasonably
withhold, condition or delay.
6.3 Good Utility Practices and Forecasting Services
Provision of Forecasting Services . The provision of the
forecasting services described in Section 6.2 in accordance with Good
Utility Practices is an integral component of this Agreement.
Accordingly, Seller shall act in a manner consistent with Good Utility
Practices with the goal of providing timely, useful, quality forecasts for
Buyer under Section 6.2. If Seller fails in any material respect to act in
conformity with the preceding sentence, Buyer may provide notice to
Seller stating in reasonable detail the basis for Buyer s belief that Seller is
defaulting in its obligations under this Article 6. Seller shall have ten (10)
Business Days in which to cure the alleged default, to commence the cure
of the alleged default if it cannot reasonably be cured within the ten (10)
Business Day period (and thereafter diligently pursue such cure to
completion), or to submit the matter to dispute resolution under Article 20.
With respect to any Facility Lender or Investor, the ten (10) Business Day
periods set forth in the preceding sentence shall be extended to thirty (30)
days from date of Buyer s notice to Seller under this Section 6.1. As
long as Seller is pursuing dispute resolution under Article 20 in good faith
Seller shall not be in default of this Section and shall have sixty (60) days
from any final resolution of the dispute in which to implement any agreed-
upon or required cure (the Forecast Cure Period ). Except as provided
for in Section 6., if Seller fails to cure the default within the Forecast
Cure Period, the provisions contained in Appendix E shall govern in lieu
of Sections 6., 6.3 and 6.4 effective as of the first day of the next
calendar month following the end of the Forecast Cure Period, subject to
Section 6.
6.3.2 Compliance with Good Utility Practices for Forecasting
Purposes. Seller shall be deemed to be using efforts consistent with Good
Utility Practices in full compliance with this Article 6 (including without
limitation Sections 6.2 and 6.3.1) if Seller: (i) shows to Buyer the features
and operating characteristics of the proposed wind forecasting package
and any updates thereto that Seller intends to use and receives Buyer
acceptance thereof before the First Energy Date and thereafter as required
under Section 6.6 (with Buyer s acceptance not to be unreasonably
withheld, conditioned or delayed); (ii) implements the wind forecasting
package and any updates thereto in accordance with vendor instructions
, in the absence of vendor instructions, in accordance with forecasting
practices prevailing in the wind energy industry; and (iii) provides data
from the wind forecasting package for Buyer s use.
PAGE 17 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
6.4 Seller s Output Guarantee
6.4.Energy Delivery Guarantee. Reconciliation. and Net
Energy Shortfall Determination
6.4.1.1 Seller guarantees that the Total Annual Facility
Energy shall equal or exceed the Guaranteed Output for each
Contract Year during the Initial Term beginning with the second
Contract Year. The determination of whether Seller has met its.
Guaranteed Output shall be made on an annual basis beginning at
the end of the second Contract Year by comparing the amount of
Total Annual Facility Energy to the Guaranteed Output as
provided for in this Section.
1.2 If the Total Annual Facility Energy is equal to or
greater than the Guaranteed Output in a Contract Year, Seller shall
be deemed to have met its Guaranteed Output obligation for that
Contract Year, and Seller shall have no obligation to pay Net
Energy Shortfall Damages or to true-up energy delivery
obligations with respect to that Contract Year.
6.4.1.3 If the Total Annual Facility Energy is less than the
Guaranteed Output in a Contract Year (the negative difference
being the Net Energy Shortfall ), Seller shall be in jeopardy of
having failed to meet ~ts Guaranteed Output obligation for that
Contract Year and may be subject to Net Energy Shortfall
Damages pursuant to Section 6.4.2 (each such Contract Year being
referred to as a "Shortfall Year
).
Up to and including the end of
Contract Year 18, Seller shall have a three (3) Contract Year
period (including the Contract Year at issue) in which to true-up its
energy delivery obligations for the Shortfall Year; provided,
however that with respect to Contract Year 19, Seller shall have a
two (2) Contract Year period (including the Contract Year at issue)
in which to true-up its energy delivery obligations for the Shortfall
Year (each, a "True Up Period"). Failure to true up the energy
delivery obligations within the applicable True-Up Period shall
result in the assessment of Net Energy Shortfall Damages pursuant
to Section 6.4.2. If a Net Energy Shortfall occurs in Contract
Year 20, or a Contract Year 18 or Year 19 Net Energy Shortfall
has not been trued up by the end of Contract Year 20, Seller may
elect to settle the Net Energy Shortfall with Buyer either by
(i) paying Net Energy Shortfall Damages to Buyer as provided in
Section 6.4., or (ii) delivering renewable energy and associated
renewable energy credits in an amount equal to the Net Energy
Shortfall, with such delivery to take place at Mid-Columbia
another delivery point on the Idaho Power electric system or
another mutually agreed-upon delivery point in the first quarter
PAGE 18 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
following Contract Year 20 (in each case subject to the Net Energy
Shortfall Damages cap set forth for Contract Year 20
Appendix F).
6.4.1.4 The determination of whether Seller has reconciled
its energy delivery obligations for the particular Shortfall Year
shall be made by comparing (a) the Total Annual Facility Energy
amounts for the True-Up Period to (b) the sum of the Guaranteed
Output for the True-Up Period. The sum of the Guaranteed Output
for the True-Up Period is the "Delivery Obligation " If the Total
Annual Facility Energy amount for the True-Up Period is equal to
or greater than the sum of the Delivery Obligation for the True-
Period, Seller shall be deemed to have reconciled its energy
delivery obligations and no longer be subject to any Net Energy
Shortfall Damages for the Shortfall Year. If, however, the average
Total Annual Facility Energy Amount for the True-Up Period is
less than the sum of the Delivery Obligation for the True-
Period ("True-Up Shortfall ), Seller shall be liable for Net Energy
Shortfall Damages calculated pursuant to Section 6.4.2 for the
Shortfall Year. To the extent that a Total Annual Facility Energy
amount or portion thereof for a given Contract Year has previously
been used to reconcile Seller s energy delivery obligations for a
prior Shortfall Year, the amount of Total Annual Facility Energy
so used shall be excluded on a first in, first out basis from the
preceding calculations, such that the previously used Total Annual
Facility Energy amount or portion thereof will not be counted
twice in determining whether Seller has met the Delivery
Obligation for a given True-Up Period.
6.4.2 Net Energy Shortfall Damages.If a True-Up Shortfall
occurs, Seller shall pay Buyer, as liquidated damages, the appropriate
price shown in the Liquidated Damages Table in Appendix F (i.$25.
per MWh for any payments made for Net Energy Shortfall Damages in
Contract Year 4) multiplied by the lesser of the True-Up Shortfall or the
Net Energy Shortfall ("Net Energy Shortfall Damages ). The liquidated
damages amount shall escalate as set forth in Appendix F.
6.4.3 Calculation and Payment of Net Energy Shortfall Damages
No later than thirty (30) days after the end of each Contract Year
beginning with the end of the fourth Contract Year, Seller shall calculate
any Net Energy Shortfall Damages, and shall provide notice to Buyer of
any Net Energy Shortfall Damages owing, if applicable, including a
detailed explanation of Seller calculation methodology, annotated
workpapers, and source data. If Buyer disputes Seller s calculations or
determination, Buyer shall give Seller notice of the dispute in accordance
with the provisions of Article 20 no later than sixty (60) days after
receiving such calculations or determination. Along with the notice, Seller
PAGE 19 of 51- POWERPURCHASESALESAGREEMENT-TELOCASETIIPC
shall pay Buyer for any Net Energy Shortfall Damages then due.
Example illustrating the calculation of Net Energy Shortfall Damages
under certain stated assumptions is attached as Appendix G.
6.4.4 Limits on Liability~ Buyer Exclusive Remedy.
Notwithstanding any other provision of this Agreement, the aggregate
amount of Net Energy Shortfall Damages shall not exceed $500,000 per
Contract Year beginning with the fourth Contract Year. For all
subsequent Contract Years, the $500 000 per Contract Year limit shall
escalate as set forth on Appendix F. Any unused portion of the liability
limit for any given Contract Year shall be extinguished to the extent not
used for that Contract Year and shall not be carried forward or otherwise
added to later Contract Years. Net Energy Shortfall Damages are Buyer
exclusive remedy for all shortfalls in Buyer s Delivery Obligation and any
other operational or performance defects or defaults affecting the Facility
(other than forecasting defaults for which Buyer s exclusive remedy is set
forth in Section 6.3).
6.5 Agreements with Respect to Appendix E (90-110)
6.5.1 Calculation of Aggregate Price Adjustment.Solely for
purposes of determining whether the damage limits contemplated by this
Agreement have been reached, the difference between (a) the Contract
Price (or Alternative Contract Price, if applicable) that Seller would have
received for all Net Energy delivered under this Agreement without regard
to the operation of Appendix E, and (b) the amount actually received by
Seller for such Net Energy after the application of Appendix E (such
difference for any period being the "Aggregate Price Adjustment ), shall
be counted toward the limits on damages set forth in this Agreement
(including Section 6.5.3 and Section 21.5 of this Agreement).
Notwithstanding any other provision of this Agreement (including
Appendix E), the Surplus Energy Price (as defined in Appendix E) shall
equal the Contract Price (or Alternative Contract Price, if applicable) in all
circumstances in which the continued use of the Surplus Energy Price
would produce an Aggregate Price Adjustment that, when combined with
any damages owed by Seller under this Agreement, would result in an
exceedance of any limit on damages set forth in this Agreement.
5.2 Appendix E Damages The provisions contained in
Appendix E cannot result in Seller suffering an Aggregate Price
Adjustment of more than $250 000 in anyone (1) Contract Year period
over the Term.
Limits on Damages and Aggregate Price Adjustment.
Seller s liability for damages under this Agreement shall be subject to the
limits set forth in Section 21.5, and Aggregate Price Adjustments
calculated under Section 6.1 shall count as damages against such limits
PAGE 20 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
along with any other damages paid or incurred by Seller under this
Agreement. In addition, during any Contract Year where the provisions of
Appendix E are implemented and the provisions concerning Seller
Guaranteed Output (i.the Annual Energy Delivery Guarantee Analysis
in Appendix G) are in effect for any Contract Years prior to
implementation of the provisions contained in Appendix E, the aggregate
amount of an Aggregate Price Adjustment under this Agreement in any
Contract Year when combined with any Net Energy Shortfall Damages
owed in the same Contract Year shall not exceed $500 000 per Contract
Year (and in any case the Aggregate Price Adjustment in anyone Contract
Year shall not exceed the cap set forth in Section 6.2). For all
subsequent Contract Years after Contract Year 4, the limit shall escalate as
set forth on Appendix F. Any unused portion of the limit for any given
Contract Year shall be extinguished to the extent not used for that Contract
Year and shall not be carried forward or otherwise added to later Contract
Years.
5.4 Avpendix E is Exclusive Remedy Except as noted in
Section 6.5.3, while Appendix E is in effect, the price adjustment
contemplated by Appendix E shall be Buyer s exclusive remedy for all
shortfalls in Net Energy and any other operational or performance defects
or defaults affecting the Facility (including forecasting).
Effect of Appendix E on Net Energy Shortfalls and Net
Energy Shortfall Damages. After any transition period during which the
provisions concerning Seller s Guaranteed Output obligations remain in
effect for any Contract Years prior to the exclusive implementation of the
provisions contained in Appendix E, no Net Energy Shortfall Damages
shall be owed for the Contract Year and accordingly no Net Energy
Shortfall calculations shall be performed for any such Contract Year.
Seller s Reversion Rights.At any time after Appendix E
takes effect, Seller may from time to time propose to Buyer forecasting
services that are in accord with Good Utility Practices. The proposed
forecasting services shall be subject to Buyer s approval, which Buyer
shall not unreasonably withhold, condition or delay. If the proposed
forecasting services are approved by Buyer, Appendix E shall cease to be
effective as of the first day of the calendar month following such approval
(or as otherwise agreed by the Parties). If Appendix E ceases to be
effective pursuant to this Section 6.6, Sections 6., 6.3 and 6.4 of this
Agreement shall become operative again (including the right to invoke
Appendix E under Section 6.3.1), with Total Annual Facility Energy to be
tested against Guaranteed Output beginning with the first Contract Year in
which such sections become operative again.
Interconnection and Transmission Responsibilities. Except as provided in
Section 6., Seller shall be responsible for all interconnection, electric losses, and costs
PAGE 21 of 51- POWER PURCHASE SALES AGREEMENT-TELOCASETIIPC
required to deliver the energy from the Facility to Buyer at the Point of Delivery. Except
to the extent of a curtailment of energy from the Facility under Section 9.2.2(a), (b),
or (c), Buyer shall be responsible for all electric losses, transmission, network service and
ancillary service arrangements and costs required to receive the Net Energy and transmit
it beyond the Point of Delivery (including without limitation any imbalance penalties).
With respect to energy that would otherwise be curtailed under Section 9.2(a), (b),
or (c), Seller shall be responsible for Transaction Costs as provided in Section 9.
Title and Risk of Loss. As between the Parties, Seller shall be deemed to
be in control of the energy output from the Facility up to and until delivery at the Point of
Delivery. Title and risk of loss of the energy output from the Facility shall transfer from
Seller to Buyer at the Point of Delivery.
Network Upgrades.Seller shall be responsible for the cost of network
upgrades with respect to the fIrst 66MW only of the Facility. The Parties acknowledge
and agree that Transmission Provider has estimated the cost of network upgrades as
$1.3 million and transmission system interconnection of approximately $2.3 million, for a
total estimated cost of $3.6 million. Seller shall bear costs in excess of Transmission
provider s estimate for such upgrades and interconnection. Seller shall enter into
arrangements with the Interconnection Provider on terms satisfactory to the Seller for the
reimbursement of these network upgrades by cash payments or by transmission credits
from Interconnection Provider. The Parties acknowledge and agree that network
upgrades are required only with respect to the first 66MW of the Facility and will not be
required with respect to the 34MW increment. Seller shall have no obligation to contract
for network upgrades or to pay for network upgrade costs with respect to the 34MW
increment.
Station Energy. This Agreement does not require Buyer to supply any
electric service to Seller or to the Facility. Seller shall enter into separate arrangements
for the supply of electric services to the Facility, including the supply of turbine unit
start-up and shut-down power and energy. Seller is responsible for causing these electric
services to be available to commence its testing before the Operation Date.
6.10 Buyer s Failure to Take Energy. If Buyer fails to receive all or part of the
energy that the Facility is able to generate and deliver to the Point of Delivery after the
Operation Date, and such failure is not excused under the terms of this Agreement
(including by Section 9.2) or by Seller s failure to perform, then Buyer shall pay Seller as
provided in this Section 6.10.
6.10.1 To the extent Seller generates and sells energy from the
Facility despite Buyer s failure, Buyer shall pay Seller an amount for such
deficiency equal to the positive difference, if any, obtained by subtracting
(i) the sales price received by the Seller from the purchasing party for
such generation, from (ii) the Contract Price (or Alternative Contract
Price, if applicable) for such generation.
PAGE 22 of 51- POWERPURCHASESALESAGREEMENT-TELOCASET/IPC
10.2 To the extent that Seller does not generate and sell energy
because of Buyer s unexcused failure to receive such energy at the Point
of Delivery, Buyer shall pay Seller the sum of (a) the Contract Price (or
Alternative Contract Price, if applicable), plus (b) Tax Benefits, with
respect to all energy not received.
Each payment under this Section 6.10 shall be due for the month in which
the failure occurred or within five (5) Business Days after Buyer s receipt
of an invoice. The invoice for such amount shall include a written
statement explaining in reasonable detail Seller s calculation of the energy
that would have been delivered to Buyer but for Buyer s failure to receive
it and the amount due. Seller shall have the remedy set forth in this
Section 6.10 if Buyer fails to take Test Energy in default of its obligations
under this Agreement; provided, however that Buyer shall not have any
obligation to pay under Article 9 or otherwise for any curtailed Test
Energy.
ARTICLE 7.
METERING AND TELEMETRY
Metering and Telemetry.Buyer shall provide, install, and maintain
Metering Equipment to be located at the Point of Delivery to record and measure power
flows to Buyer in accordance with this Agreement and the Interconnection Agreement.
The Metering Equipment shall be at the location and of the type required to accurately
measure, record and report the Net Energy to provide Buyer adequate Net Energy
measurement data to administer this Agreement and to integrate the Facility s Net Energy
into Buyer s electrical system. All Metering Equipment and installation costs shall be
borne by Seller, including costs incurred by Buyer for inspecting and testing such
equipment at reasonable intervals at Buyer s actual cost of providing this Metering
Equipment and services. The Metering Equipment shall be at the location described in
Appendix D. All meters used to determine the billing hereunder shall be sealed and the
seals shall be broken only by Buyer when the meters are to be inspected, tested or
adjusted.
Meter Inspection.Buyer shall inspect installations annually and test
meters on the applicable periodic test schedule relevant to the equipment installed as
specified in Appendix D. If requested by Seller, Buyer shall make a special inspection or
test of a meter and Seller shall pay the reasonable costs of such special inspection. Both
Parties shall be notified of the time when any inspection or test shall take place, and each
Party may have representatives present at the test or inspection. If a meter is found to be
inaccurate or defective, it shall be adjusted, repaired or replaced, at Buyer 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 one percent (1 %) from the
measurement made by the standard meter used in the test, adjustment (either upward or
downward) to the payments Seller has received shall be made to correct those payments
affected by the inaccurate meter for the actual period during which inaccurate
measurements were made. If the actual period cannot be determined, corrections to the
PAGE 23 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
payments shall be based on the shorter of (i) a period equal to one-half (1/2) the time
from the date ofthe last previous test of the meter to the date of the test which established
the inaccuracy of the meter; or (ii) six (6) months. Seller shall state such adjustment as a
credit or additional charge, as appropriate, on its next invoice.
Additional Telemetry If the Buyer requests telemetry equipment
information or services of any nature beyond that expressly required by the
Interconnection Provider in the Interconnection Agreement, the Seller and Buyer shall
mutually cooperate to make efficient use of Seller s and Buyer s telemetry equipment to
provide the additional information requested by Buyer in the most cost-effective manner.
The Buyer shall be responsible for any cost associated with additional telemetry
equipment, information, services or requirements that are beyond those expressly
required by the Interconnection Provider in the Interconnection Agreement.
ARTICLE 8.
SYSTEM PROTECTION
Operation and Maintenance of Seller s Facilities. Seller shall construct
operate and maintain the Facility and Seller s side of the Interconnection Facilities in
accordance with the Interconnection Agreement, Appendix D, Good Utility Practices, the
National Electrical Code, the National Electrical Safety Code, and any other applicable
local, state and federal codes.
Operation and Maintenance of Buyer s Facilities. Buyer shall construct
operate and maintain its utility system in accordance with Good Utility Practices and any
other applicable local, state and federal codes.
ARTICLE 9.
GENERAL OPERATIONS
Communications. Seller and Buyer shall maintain appropriate operating
communications through the Designated Dispatch Facility in accordance with
Appendix H. At least thirty (30) days before the Operation Date, the Parties shall
cooperate to develop a communications protocol that the Parties will adhere to and that
will enable Buyer to relay instructions nom Transmission Provider.
Curtailments.
9.2.No Economic Dispatch Buyer shall not curtail or cause the
curtailment ofthe Facility s energy for Economic Dispatch reasons.
9.2.2 Curtailment.If delivery from the Facility is curtailed as a result of
(a) an Interconnection Failure or Emergency, (b)force majeure affecting the
transmission system (c) transmission or interconnection maintenance, or
(d) transmission congestion, the Parties agree that Seller shall bear the risk of the
curtailment of the portion of the Facility in excess of 66MW and, subject to the
pro rata curtailment principle for network resources set forth below, the 66MW
portion of the Facility that is a network resource. With respect to the 66MW
PAGE 24 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
, portion of the Facility, the parties agree that curtailment will be subject to the
pro rata curtailment of all firm schedules across the restricted transmission path.
If there is a partial curtailment of the Facility, the Parties agree that any energy
produced from the Facility shall first be allocated to the 66MW portion of the
Facility (it being understood that the 66MW portion of the Facility is a network
resource). To the extent that curtailment of energy can be avoided using
short-term firm or non-firm, point-to-point transmission from the Point
Delivery to Mid-Columbia, another transaction point, or an additional point
delivery on the Idaho Power electrical system, or cost-effective redispatch, then
(unless Seller has provided notice to Buyer that Seller has arranged for a sale to a
third party to avoid the curtailment) Buyer shall use commercially reasonable
efforts to arrange such deliveries or cost-effective redispatch to avoid curtailment
of the Facility. Buyer shall pay Seller the Market Price of Energy minus the
Transaction Costs for any curtailed energy that is subsequently sold or transferred
to a third party through a market transaction, or Buyer shall pay Seller the
Contract Price -minus any Transaction Costs for any curtailed energy that is
delivered to Idaho Power at an additional point of delivery on the Idaho Power
electrical system as provided in this Section 9.2, whether using secondary
network transmission service, short-term firm or non-fmn, point-to-point
transmission. In the course of using commercially reasonable efforts to arrange
for such deliveries, Idaho Power will first consider delivery of Seller s energy to
Idaho Power at an additional point of delivery on the Idaho Power electrical
system as provided in this Section 9.2 and shall use commercially reasonable
efforts to propose delivery arrangements with the lowest Transaction Costs.
or before the fifth (5) Business Day of any calendar month following a month in
which a curtailment occurred, Buyer shall provide Seller with notice stating the
cause of the curtailment. The Parties shall use commercially reasonable efforts to
determine the quantity of energy that, based on the wind data, would have been
produced during the Curtailment Period (the "Deemed Delivered Net Energy
Deemed Delivered Net Energy shall be used solely for the purpose of calculating
Lost Output.
9.3 Determination of Deemed Delivered Net Energy.Seller shall install
two (2) meteorological towers around the Site or in conjunction with the Facility s wind
turbines to provide the capability of measuring and recording representative wind data
twenty-four (24) hours per day. Seller shall calculate the amount of Deemed Delivered
Net Energy using data from the Facility s SCADA system and based on actual wind
speed measurements derived from the meteorological towers and other Facility wind
speed instrumentation during the period in which the curtailment occurs. If data required
for determining Deemed Delivered Net Energy ceases to be available or is determined to
be umeliable, the Parties shall cooperate to develop a commercially reasonable
methodology to facilitate the accurate determination of Deemed Delivered Net Energy
and to make appropriate adjustments for any period in which data was interrupted
unavailable.
9.4 Seller s Declared Suspension of Net Energy Deliveries.If Seller
Facility experiences a forced outage or derating due to equipment failure or derating,
PAGE 25 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET /IPC
Seller shall promptly notify Buyer of the nature and expected duration of the forced
outage or derating and shall update its generation forecasts under Section 6.2 accordingly.
Because Seller will take one or more wind turbines off line from time to time in the
ordinary course of Facility maintenance, the Facility shall not be deemed to be
experiencing a "derating" unless the Facility s capacity is reduced by at least fifteen
percent (15%).
Scheduled Maintenance.On or before Janu,ary 31 of each calendar year
Seller shall submit a written proposed maintenance schedule of significant Facility
maintenance for that calendar year, and Buyer and Seller shall mutually agree as to the
acceptability of the proposed schedule. The Parties determination as to the acceptability
of Seller s timetable for scheduled maintenance will take into consideration the need to
perform maintenance and perform other work as required to maintain wind turbine and
other equipment warranties, Good Utility Practices, Buyer s system requirements, and
Seller s preferred schedule. Neither Party shall unreasonably withhold acceptance of the
proposed maintenance schedule.
Maintenance Coordination. Seller shall, to the extent practical, coordinate
its line and Facility maintenance schedules with Interconnection Provider s maintenance
schedules such that they occur simultaneously.
ARTICLE 10.
BILLING; RECORDS; AUDITS
10.Billing Invoices. The monthly billing period shall be the calendar month.
No later than three (3) Business Days after the end of each calendar month, Seller shall
provide to Buyer, by email or fax and confirmed by first-class mail, an invoice for the
amount due Seller by Buyer for the Net Energy purchased by the Buyer under this
Agreement during the previous calendar month billing period. Seller s invoice shall
show all billing parameters, rates and factors, and any other data reasonably pertinent to
the calculation of monthly payments due to the Seller. Each such monthly invoice shall
calculate the amount that Buyer owes to the Seller for Test Energy, and Net Energy
delivered during the calendar month, at the Test Energy Price, the Contract Price or
Alternative Contract Price, as applicable, and the Buyer shall pay for such Test Energy,
and/or Net Energy at such price.
10.Payments Unless otherwise specified in this Agreement, undisputed
payments due under this Agreement shall be due and payable by electronic funds transfer
on or before the fifteenth (15th) Business Day following receipt ofthe billing invoice. If
the undisputed amount due is not paid on or before the due date, a late payment charge
shall be applied to the unpaid balance and shall be added to the next billing statement.
Such late payment charge shall be calculated based on the Interest Rate applicable in the
event of a default. If the due date occurs on a day that is not a Business Day, the late
payment charge shall begin to accrue on the next succeeding Business Day.
10.Maintenance of Records. Seller shall maintain at the Facility or such other
location mutually acceptable to the Parties adequate total generation, net generation, and
PAGE 26 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
maximum generation (MW) records in a form and content consistent with Good Utility
Practices.
10.4 Right to Audit: Refunds; Billing Disputes
10.4.Audit Rights Each Party shall have the right, upon
reasonable notice to the other Party and during the other Party s regular
business hours and without unduly interfering with the conduct of that
Party s business, to access all of that Party s records pertaining to invoices
under this Agreement and to audit reports, data, calculations, invoices, Net
Energy, transactions under Section 9.2 (including Transaction Costs), and
maximum generation records pertaining to the Facility. The auditing
Party shall bear its own costs of performing such audit; provided
however that the other Party shall cooperate with the audit and shall not
charge the auditing Party for any reasonable costs (including without
limitation the cost of photocopies) that the other Party may incur as a
result of such audit. A Party shall have twenty-four (24) months from the
date on which an invoice or notice is received to audit and to challenge
that invoice or notice.
10.4.Refunds of Overpayments and Underpayments. If an audit
discovers a billing error or errors that resulted in an overpayment by the
Buyer, Seller shall refund to the Buyer the amount of the overpayment
plus interest calculated at the Interest Rate thereon from the date such
overpayment was made by the Buyer to (but not including) the date the
Buyer actually receives the refund from the Seller. If the audit discovers a
billing error or errors that resulted in an underpayment by the Buyer, the
Buyer shall pay to the Seller the amount of the underpayment plus interest
calculated at the Interest Rate thereon from the due date thereof to (but not
including) the date the Seller actually receives the payment thereof from
the Buyer. The Interest Rate used in this Section shall be the Interest Rate
applicable to cash collateral.
10.4.3 Billing Disputes Either Party may dispute invoiced
amounts, but shall pay to the other Party at least the undisputed portion
invoiced amounts on or before the invoice due date. To resolve any
billing dispute, the Parties shall use the procedures set forth in Article 20.
When the billing dispute is resolved, the Party owing shall pay the amount
owed within five (5) Business Days of the date of such resolution, with
interest charges calculated on the amount owed in accordance with the
provisions of Section 10.4.2. Buyer at any time may offset against any
and all amounts that may be due and owed to Seller under this Agreement
any and all undisputed amounts, including damages and other payments
that are owed by Seller to Buyer pursuant to this Agreement. Likewise
Seller at any time may offset against any and all amounts that may be due
and owed to Buyer under this Agreement, any and all undisputed amounts
including damages and other payments, that are owed by Buyer to Seller
PAGE 27 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET IIPC
pursuant to this Agreement. Undisputed and non-offset portions of
amounts invoiced under this Agreement shall be paid on or before the due
date or shall be subject to the interest charges set forth in Section 10.4.2.
ARTICLE It.
INDEMNIFICATION AND INSURANCE
11.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
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.
11.Insurance. During the term of this Agreement, Seller shall secure and
continuously carry the following insurance coverage:
11.2.1 Commercial General Liability Insurance for both bodily
injury and property damage with limits not less than $1 000 000, each
occurrence, combined single limit.
11.2.2 Excess/Umbrella Liability Insurance with limits not less
than $5 000 000.
11.2.3 The above insurance coverage shall be placed with
insurance company with an A.M. Best Company rating of A- or better.
addition:
11.2.3.Buyer shall be an additional insured on the
policy providing such insurance coverage; and
11.2.3.2 The policy shall include a provision stating
that such policy shall not be canceled or the limits of liability
reduced without sixty (60) days ' prior written notice to Seller.
Seller shall notify Buyer within five (5) Business Days after Seller
receives any such notice.
11.Seller to Provide Certificate of Insurance. As required in Section 3.5 of
this Agreement and annually thereafter, Seller shall furnish Buyer a Certificate of
Insurance evidencing the coverage as set forth above.
11.4 Seller to Notify Buyer of Loss of Coverage.If the insurance coverage
required by Section 11.2 shall lapse for any reason, Seller will immediately notify the
Buyer in writing. The notice will advise the Buyer of the specific reason for the lapse
and the steps the Seller is taking to reinstate the coverage.
PAGE 28 of 51- POWER PURCHASE SALES AGREEMENT-TELOCASETIIPC
ARTICLE 12.
CREDIT AND COLLATERAL REQUIREMENTS
12.1 Financial Information Each Party shall deliver to the other Party
(i) within one hundred twenty (120) days following the end of a Party s fiscal year, a
copy of that Party s audited consolidated financial statements for its fiscal year, and
(ii) within sixty (60) days after the end of each of its first three fiscal quarters of each
fiscal year, a copy of that Party s unaudited consolidated financial statements for such
fiscal quarter. In" all cases, the statements shall be for the most recent accounting period
and prepared in accordance with generally accepted accounting principles, consistently
applied; provided, however, that should any such statements not be available on a timely
basis due to a delay in preparation or certification, such delay shall not be an Event of
Default so long as the Party diligently pursues the preparation, certification and delivery
of the statements.
12.2 Seller s Performance Assurance. To secure the obligations of the Seller to
the Buyer under this Agreement, Seller shall provide one or a combination of the
following as its "Performance Assurance
12.1 Cause Seller s Guarantor to execute and deliver to the
Buyer a Guaranty in the form attached as Appendix C (or, at Seller
discretion, cause another guarantor that is not experiencing a Material
Adverse Change to execute and deliver to the Buyer a Guaranty in the
form of Appendix C or in another form acceptable to the Buyer); or
12.2.2 Establish and maintain at the Seller s expense an escrow
account for the benefit of the Buyer in a form and amount reasonably
acceptable to the Buyer; or
12.2.3 Provide a cash deposit to the Buyer; or
12.2.4 Provide a letter of credit in a form reasonably acceptable to
the Buyer.
Beginning on the tenth (1oth) Business Day after receipt of Commission Approval
and continuing until the Operation Date, the Seller shall maintain such Performance
Assurance in the aggregate amount of One Million Dollars ($1 000 000). On and after
the Operation Date, the Seller shall maintain such Performance Assurance in the
aggregate amount of Ten Million Dollars ($10 000 000). Seller shall have no duty to
replenish or replace any such Performance Assurance if drawn upon, and the amounts set
forth in the preceding sentences shall be caps on the Seller s Performance Assurance
obligations.
The Seller shall deliver to the Buyer Performance Assurance in the form of
Guaranty from Seller s Guarantor (the form of which is attached as Appendix C) in the
amounts and at the time specified in the preceding paragraph (with the $10 000,000
Guaranty to replace the initial $1 000 000 Guaranty upon delivery of the $10 000 000
Guaranty to Buyer, which $1 000 000 Guaranty shall thereupon be deemed terminated).
PAGE 29 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET !IPC
By giving at least ten (10) Business Days prior notice to the Buyer, the Seller may from
time to time replace any Performance Assurance, in whole or in part, by posting with the
Buyer a replacement Guaranty, escrow account, cash deposit, letter of credit, or
combination thereof in compliance with this Article. Upon the posting of such
replacement Performance Assurance, the Buyer shall release and return to the Seller the
Performance Assurance being replaced, and all such replaced Performance Assurance
shall be deemed terminated.
12.Grant of Security Interest in Certain Collateral and Security. To secure its
obligations under this Agreement, Seller hereby grants to Buyer a present and continuing
security interest in, and lien on (and right of setoff against), and assignment of, all cash
collateral and cash equivalent collateral and any and all proceeds resulting therefrom or
the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit
, the secured Party. Seller shall take such action as Buyer reasonably requires in order
to perfect Buyer s first-priority security interest in, and lien on (and right of setoff
against), such collateral and any and all proceeds resulting therefrom or from the
liquidation thereof.
12.4 Realization Upon Performance Assurance. Upon or at any time after the
occurrence and during the continuation of an Event of Default or an Early Termination
Date affecting Seller, the Buyer may do anyone or more of the following: (i) exercise
any of the rights and remedies of a secured party with respect to all Performance
Assurance, including any such rights and remedies under law then in effect; (ii) exercise
its rights of setoff against any and all property of the Seller in the possession of the Buyer
or its agent; (iii) draw on any outstanding letter of credit issued for the Buyer s benefit;
and (iv) liquidate all Performance Assurance then held by or for the benefit of the Buyer
free from any claim or right of any nature whatsoever of the Seller, including any equity
or right of purchase or redemption by the Seller. The Buyer shall apply the proceeds of
the collateral realized upon the exercise of any such rights or remedies to reduce the
Seller s obligations under this Agreement, subject to the Buyer s obligation ~o return any
surplus proceeds remaining after such obligations are satisfied in full.
12.5 Interest Rate on Cash Collateral.Performance Assurance in the form of
cash shall bear interest at the Interest Rate and shall be paid to Seller on the third
Business Day of each calendar month.
12.Notice to Seller s Guarantor.Seller shall be responsible for notifying
Seller s Guarantor of all modifications and amendments made to this to this Agreement
after execution of the Agreement.
ARTICLE 13.
FORCE MAJEURE
13.Force Ma;eure
13.1.1 General.As used in this Agreement force ma;eure
an event of force ma;eure means any cause beyond the reasonable
PAGE 30 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
control of the Party claiming force majeure 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 (even if
such strikes or disturbances could be resolved by conceding to the
demands of a labor group), earthquakes, fires, lightning, epidemics
sabotage, severe weather, or changes in law or regulation or governmental
orders occurring after the Effective 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.
13.1.2 Events That Are Not Force Majeure Notwithstanding
Section 13.1.1, the term force majeure does not include: (a) Seller
ability to sell, or Buyer s ability to purchase, Net Energy or Environmental
and Renewable Energy Credits at a. more advantageous price than
provided under this Agreement; (b) governmental or regulatory action
occurring after receipt of the Commission Approval contemplated by
Article 24 that impairs Buyer s ability to recover the Contract Price or the
Alternative Contract Price (if applicable) in its rates or that otherwise
affects the value ofthis Agreement to Buyer.
13.1.3 Requirements Upon Occurrence of Force Majeure
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
force majeure provided that:
13.1.3.The Party claiming force majeure shall, as
soon as is reasonably possible after the occurrence of the forcemajeuregive the other Party written notice describing the
particulars of the occurrence.
13.1.3.The suspension of performance shall be of
no greater scope and of no longer duration than is required by the
event offorce majeure.
13.1.3.3 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.
13.1.3.4 The Party claiming force majeure shall
proceed with reasonable diligence to remedy its inability
perform and shall provide weekly progress reports to the other
Party describing actions taken to end the force majeure.
PAGE 31 of 51- POWER PURCHASE SALES AGREEMENT- TELOCASET/IPC
13.1.3.When the Party claiming force majeure
able to resume performance of its obligations under this
Agreement, that Party shall give the other Party written notice to
that effect.
13.Extension of Scheduled Operation Date. Guaranteed Operation Date. and
the Term.The Scheduled Operation Date and the Guaranteed Operation Date shall be
extended on a day-for-day basis in the event offorce majeure. In no event will any delay
or failure of performance caused by any conditions or events offorce majeure extend this
Agreement beyond its stated Term.
13.3 Termination for Extended Force Ma;eure If a delay or failure of
performance caused by events of force majeure materially affects the delivery or receipt
of Net Energy at the Point of Delivery of the Facility and continues for an uninterrupted
period of three hundred sixty-five (365) Days from its occurrence or inception, the Party
not claiming force majeure may, at any time following the end of such three hundred
sixty-five (365) Day period, terminate this Agreement upon written notice to the party
claiming force majeure without further obligation by either Party except as to costs and
balances incurred before the effective date of such termination. The Party not claiming
force majeure may, but shall not be obligated to, extend such three hundred
sixty-five (365) Day period, for such additional time as it, at its sole discretion, deems
appropriate.
ARTICLE 14.
BUYER ACCESS RIGHTS
14.Seller to Provide Access. To the extent necessary, Seller hereby grants to
the Buyer for the term of this Agreement all necessary rights-of-way and easements to
install, operate, maintain, replace, and remove the Buyer s Metering Equipment, and
other equipment and facilities necessary or useful to this Agreement, including adequate
and continuing access rights on property ofthe Seller.
14.2 Indemnity. If the Buyer exercises any right under this Agreement to
access or enter upon the Seller s property, such access or entry shall be at the Buyer
sole risk and expense. Buyer shall hold the Seller harmless from, and indemnify the
Seller against, any and all liability for any loss, damage or injury to property or persons
arising from the Buyer s access to or entry upon to the Seller s property, except to the
extent that such loss, damage or injury is cause by the Seller s negligence or willful
misconduct.
ARTICLE 15.
NO THIRD PARTY LIABILITY
NO DEDICATION OF FACILITY OR SYSTEM
15.No Third Party Liability. 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. There are no third party beneficiaries of this Agreement.
PAGE 32 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
15.No Dedication. No undertaking by one Party to the other under any
provision of this Agreement shall constitute the dedication of that Party's system or
Facility or any portion thereof to the other Party or to the public or affect the status of the
Buyer as an independent public utility corporation or the Seller as an independent entity.
ARTICLE 16.
SEVERAL OBLIGATIONS
Except where specifically stated in this Agreement to be otherwise, the duties
obligations and liabilities of the Parties are intended to be several and not joint or
collective. Nothing contained in this Agreement shall ever be construed to create an
association, trust, partnership or joint venture, or impose a trust or partnership duty,
obligation or liability on or with regard to either Party. Each Party shall be individually
and severally liable for its own obligations under this Agreement.
ARTICLE 17.
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 18.
CHOICE OF LAW
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.
ARTICLE 19.
LIMITATIONS
19.Remedies Satisfy Essential Purposes THE PARTIES CONFIRM THAT
THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS
AGREEMENT SATISFY THE ESSENTIAL PURPOSES OF THIS AGREEMENT.
19.2 Sole and Exclusive Remedies. FOR ANY PROVISION FOR WHICH
AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED SUCH
EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND
EXCLUSIVE REMEDY. THE OBLIGOR'S LIABILITY SHALL BE LIMITED AS
SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES
AT LAW OR IN EQUITY ARE WAIVED.
19.3 No Punitive, Consequential or Incidental Damages. IF NO REMEDY OR
MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR'
LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH
DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY
PAGE 33 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE
WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL
BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR
INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION
DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY
PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE
LIMITATIONS IMPOSED IN THIS AGREEMENT ON REMEDIES AND THE
MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES
RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY
WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT
ACTIVE OR PASSIVE.
19.4 Liquidated Damages. TO THE EXTENT ANY DAMAGES REQUIRED
TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE
THAT THE DAMAGES ARE DIFFICULT OR IMPOSSffiLE TO DETERMINE, OR
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND
THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE
APPROXIMATION OF THE HARM OR LOSS.
ARTICLE 20.
DISPUTES
20.Disputes.If a dispute arises under this Agreement (a "Dispute ), within
ten (10) days following the delivered date of a written request by either Party (a "Dispute
Notice ), (i) each Party shall appoint a representative, and (ii) the Parties' representatives
shall meet, negotiate and attempt in good faith to resolve the Dispute quickly, informally
and inexpensively. If the Parties' representatives cannot resolve the Dispute within
thirty (30) days after commencement of negotiations, then within ten (10) Business Days
following any request by either Party at any time thereafter, each Party representative
(A) shall independently prepare a written summary of the Dispute describing the issues
and claims, (B) shall exchange its summary with the summary of the Dispute prepared by
the other Party representative, and (C) shall submit a copy of both summaries to a senior
officer of the representative s Party with authority to irrevocably bind the Party to a
resolution of the Dispute. Within ten (10) Business Days after receipt of the Dispute
summaries, the senior officers for both Parties shall negotiate in good faith to resolve the
Dispute. If the Parties are unable to resolve the Dispute within fourteen (14) Business
Days following receipt of the Dispute summaries by the senior offices, either Party may
seek available remedies.
20.Twenty-Four (24) Month Limitation Period Notwithstanding any
provision in this Agreement to the contrary, if no Dispute Notice has been issued within
twenty-four (24) months following the occurrence of all events and the existence of all
circumstances giving rise to the Dispute (regardless of the knowledge or potential
knowledge of either Party of such events and circumstances), the Dispute and all claims
related to the Dispute shall be deemed waived and the aggrieved Party shall thereafter be
barred from proceeding thereon.
PAGE 34 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
20.Venue. Venue for any litigation arising out of or related to this Agreement
shal1lie in the District Court of the Fourth Judicial District ofIdaho in and for the county
of Ada.
ARTICLE 21.
EVENTS OF DEFAULT; DELAY DAMAGES; DAMAGE CAPS
21.1 Events of Default. The following shall be deemed to be Events of Default:
21.1 A Party s dissolution or liquidation;
21.1.2 A Party s assignment of this Agreement or any of its rights
under this Agreement for the benefit of creditors (except for an assignment
to the Facility Lender as security under the Financing Documents as
permitted by this Agreement);
21.3 A Party s filing of a petition in bankruptcy or insolvency or
for reorganization or arrangement under the bankruptcy laws of the
United States or under any insolvency act of any state, or a Party
voluntarily taking advantage of any such law or act by answer or
otherwise.
21.1.4 The filing of a case in bankruptcy or any proceeding under
any other insolvency law against a Party that could materially impact
Buyer s ability to perform its obligations under this Agreement if the
affected Party does not obtain a stay or dismissal of the filing within
sixty (60) days after the Party receives a notice of default.
21.1.5 A Party assignment of this Agreement, except as
permitted by this Agreement;
21.6 Any representation or warranty made by a Party in this
Agreement proves to have been false or misleading in any material respect
when made or ceases to remain true during the Term if such inaccuracy or
cessation would reasonably be expected to result in a significant adverse
impact on the other Party and such default is not cured within thirty (30)
days after the Party s receipt of a notice of default;
21.1.7 Seller failure to establish and maintain Performance
Assurance as required by this Agreement if the failure is not cured within
thirty (30) days of Seller s receipt of a notice of default;
21.8 A Guaranty Default affecting a Guaranty delivered in
support of this Agreement if the Guaranty Default is not cured within the
time permitted by the Guaranty and the Seller does not provide substitute
Performance Assurance to replace the Guaranty within fifteen (15)
Business Days after the Seller s receipt of a notice of the Guaranty
Default.
PAGE 35 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET /IPC
21.1.9 Seller s failure to deliver energy from the Facility to Buyer
. as required under this Agreement if the failure is not cured within
fifteen (15) Business Days of Seller s receipt of a notice of default;
21.1.10 Buyer s failure to receive energy from the Facility
as required under this Agreement if the failure is not cured within
fifteen (15) days of Buyer s receipt of a notice of default;
21.11 A Party s failure to make a payment to the other
Party when due under this Agreement if the failure is not cured within
ten (10) Business Days of the Party s receipt of a notice of default.
21.1.12 A Party failure to comply with any material
obligation under this Agreement, if the failure would result in a significant
adverse impact on the other Party (other than a default already specifically
enumerated in this Article) and the failure is not cured within thirty (30)
days of the Party s receipt of a notice of default; provided, however
such default cannot be cured within thirty (30) days despite the Party
diligent efforts, but the Party commences the cure within the thirty (30)
day period and thereafter diligently pursues the cure, the thirty (30) day
period shall be extended for as long as is reasonably required to cure the
default (but in no event more than ninety (90) days).
21.2 Notice of Default.If either Party defaults in its performance of this
Agreement as provided in Section 21., the non-defaulting Party may give notice of the
default in writing to the defaulting Party, specifying in reasonable detail the nature of the
default. If the defaulting Party fails to cure the default within any cure period allowed for
the default in Section 21., the non-defaulting Party may, at its option, terminate this
Agreement and/or pursue its legal or equitable remedies, subject to any limitation on
remedies and damages set forth in this Agreement.
21.3 Facility Lender s Right to Cure Default of Seller.Seller shall provide
Buyer with a notice identifying the Facility Lender and providing appropriate contact
information for the Facility Lender. Following receipt of such notice, Buyer shall
provide notice of any ~vent of Default of Seller to the Facility Lender, and Buyer will
accept a cure to an Event of Default of Seller performed by the Facility Lender, so long
as the cure is accomplished within the applicable cure period set forth in this Agreement
plus an additional sixty (60) days.
21.4 Delay Damages. If Seller fails to achieve the Operation Date on or before
the Guaranteed Operation Date, and such failure is not excused by force majeure or the
default or delay of Buyer, Seller shall pay damages to Buyer on account of such delay
Delay Damages ) in the amount of One Hundred Dollars ($100) per day for each MW
of installed capacity at the Facility that has not satisfied the conditions set forth in
Section 4.4 (excluding Section 4.4.1) on or before the Guaranteed Operation Date. All
Delay Damages shall begin to accrue on the day after the Guaranteed Operation Date and
shall continue to accrue until the first to occur of (a) the Operation Date, or (b) one
PAGE 36 of 51- POWER PURCHASE SALES AOREEMENT- TELOCASETIIPC
hundred eighty (180) days after the Guaranteed Operation Date. Seller shall not be
required to pay Delay Damages with respect to installed capacity for which Seller has
satisfied the conditions of Section 4.4 (excluding Section 4.4.1). Seller shall pay Buyer
for any Delay Damages accrued during a given calendar month on or before the
tenth (1oth) day of the next month. Seller shall have no liability for any failure to achieve
the Operation Date by the Scheduled Operation Date, and Delay Damages shall be
Buyer s sole and exclusive remedy for Seller s failure to achieve the Operation Date on
or before the Guaranteed Operation Date. In no event shall Seller be liable for Delay
Damages in an aggregate amount in excess of the sum of One Million Eight Hundred
Thousand Dollars ($1 800 000). Seller shall not be in default under this Agreement if it
does not achieve the Guaranteed Operation Date but is paying Delay Damages when due
or has paid all Delay Damages required to be paid under this Agreement.
21.5 Limitations on Seller s Damages. The following limits shall apply to
Seller s liability for damages: (a) Seller s aggregate financial liability to Buyer for Delay
Damages shall not exceed the amount specified in Section 21.4, (b) Seller s aggregate
liability for damages arising from a termination for default before the Operation Date
shall not exceed One Million Eight Hundred Thousand Dollars ($1 800 000), minus
Delay Damages previously paid, and (c) Seller s aggregate liability to Buyer for any and
all damages under this Agreement (including Delay Damages, Net Energy Shortfall
Damages and Aggregate Price Adjustments) shall not exceed Fifteen Million
Dollars ($15 000 000). Except as noted in Section 21.5.1 and Section 21.5., this
$15 000 000 damages cap shall remain fixed for the Term of the Agreement and shall not
be escalated or reduced. The limitations on damages set forth in this Section 21.5 shall
not apply to damages arising out of either of the following events:
21.5.1 Willful breach of this Agreement by Seller resulting in the
sale by Seller to a third party, or the diversion by Seller for any use, of
energy that Seller has agreed to sell to Buyer under this Agreement; or
21.2 Any claim for indemnification under Article 11.
21.Duty to Mitigate Damages. Each Party agrees that it has a duty to mitigate
damages and covenants that it will use commercially reasonable efforts to minimize any
damages it may incur as a result of the other Party's performance or non-performance of
the Agreement.
21.7 Obligations Immediately Due and Payable If a Party terminates this
Agreement under Section 21.2 because of the other Party s default, the non-defaulting
Party, upon notice to the defaulting Party (and if applicable, to the Facility Lender and
Guarantor), may declare the defaulting Party s obligations under this Agreement to be
immediately due and payable. The non-defaulting Party s right to obtain damages shall
be subject to the non-defaulting Party s duty to mitigate damages under Section 21.6 and
to all other rights, remedies, defenses, offsets and arguments available to the defaulting
Party under this Agreement, at law and in equity. In the case of Seller, such damages
shall also be subject to the limitations on Seller s damages set forth in this Agreement
PAGE 37 of 51- POWERPURCHASESALESAGREEMENT-TELOCASET/IPC
(including, but not limited to, the caps set forth in Section 21.5). This provision shall
survive the termination oftms Agreement.
ARTICLE 22.
TERMINATION
22.Termination.Upon execution, this Agreement shall continue in full force
and effect for the Term unless terminated in accordance with this Article.
22.2 Mutual Agreement.The Parties can mutually terminate this Agreement by
a writing signed by both Parties.
22.Event of Default.A non-defaulting Party may terminate this Agreement
. in accordance with Section 21.2.
22.4 Prolonged Force Majeure A Party not claiming force majeure may
terminate this Agreement in accordance with Section 13.
22.Right to Terminate
22.1 If (a) despite Seller s commercially reasonable efforts to do
, Seller does not, on or before February 28, 2007, enter into an
Interconnection Agreement for the Facility with the Interconnection
Provider on terms reasonably acceptable to Seller, or (b) if such
Interconnection Agreement for the Facility becomes impracticable to
obtain on commercially reasonable terms and conditions, Seller shall have
the right to terminate this Agreement by giving notice to Buyer not later
than March 2, 2007.
22.2 If (a) the Scheduled Operation Date is extended due to
force majeure such that the Facility will not be placed into service for PTC
purposes on or before December 31 2007, and (b) Federal Production Tax
Credit Legislation has not been enacted before 11 :59 p.m.
December 31 , 2007, then Seller shall have the right to terminate this
Agreement by giving notice to Buyer not later than June 30, 2008.
22.5.3 If for any reason, including force majeure Commission
Approval is not obtained on or before February 28 2007, then either Party
shall have the right to terminate this Agreement by written notice to the
other Party given on or before the earlier of: (i) the date that is ten (10)
Business Days after the issuance of an order by the Commission
disapproving this Agreement or approving it with condition( s)
modification(s) unacceptable to the Party or Parties adversely affected by
such modification(s) or condition(s), or (ii) March 2, 2007. Except as
provided in Section 22.5.4, any such termination under this Section shall
be effective ten (10) Business Days after such notice is given.
PAGE 38 of 51- POWER PURCHASE SALES AGREEMENT-TELOCASETIIPC
22.5.4 Notwithstanding Section 22., if Buyer gives Seller a
notice of termination under subparagraph (ii) of Section 22.5.3 because
Commission Approval has not been obtained on or before February 28
2007, Seller may in its sole discretion give Buyer notice within the
ten (10) Business Day period irrevocably extending the Scheduled
Operation Date to October 1 , 2008, and the Guaranteed Commercial
Operation Date to December 31 2008. In such case, Buyer s notification
of termination shall be of no effect, this Agreement shall remain in full
force and effect with such changes, and neither Party shall have any
further rights to terminate this Agreement under Section 22.3(ii). The
Parties retain the right to terminate under Section 22.5.3(i). If Seller
exercises the preceding option to extend the Scheduled Operation Date
and the Guaranteed Commercial Operation Date
22.5.4.1 and the Operation Date occurs after
January 1 , 2008, the Contract Price in 2008 shall be the Contract
Price (or Alternative Contract Price, if applicable) for 2008 as set
forth in Appendix A and shall thereafter change from year to year
as provided in Appendix A;
22.5.4.2 and Federal Production Tax Credit
Legislation has not been enacted before 11:59 p.m.
December 31 , 2007, then Seller shall have the right to terminate
this Agreement by giving notice to Buyer not later than June 30
2008;
22.5.4.3 and for any reason includingforce majeure
Commission Approval is not obtained on or before December 31
2007, then either Party shall have the right to terminate this
Agreement by written notice to the other Party given on or before
January 31 2008.
22.5 If Buyer terminates this Agreement under Section 22.
Buyer shall within ten (10) Business Days of the termination notice pay
Seller a termination payment in accordance with the following terms:
22.If notice of termination is given on or before
December 31 2006, Buyer shall pay Seller a termination payment
in the amount of up to $600 000;
22.5.2 If a notice of termination is given after
December 31, 2006, and on or before January 31 , 2007, Buyer
shall pay Seller a termination payment in the amount of up to
200 000;
PAGE 39 of 51- POWERPURCHASESALESAGREEMENT-TELOCASET/IPC
22.If a notice of termination is given after
January 31 2007, Buyer shall pay Seller a termination payment in
the amount of up to 000 000.
In exchange for the termination payment from Buyer, Seller shall
simultaneously transfer to Buyer all of Seller s right, title and interest in
and to the assets listed on Appendix I (the "Transferred Assets ) such that
Buyer will assume Seller s position with respect to the Transferred Assets
and all executory commitments affecting those assets. The amount paid
by Buyer shall equal Seller s actual out-of-pocket costs with respect to the
Transferred Assets up to the applicable cap set forth in Sections 22.5.
22.5.2, and 22.5.3 above. Buyer acknowledges and agrees that some
or all of the Transferred Assets may consist of contractual rights to
physical assets for which partial payments (such as down payments or
deposits) have been made rather than the physical assets themselves.
Seller shall include with the Transferred Assets sufficient verifiable data
invoices, evidence, and other relevant information for Buyer to confirm
the cost paid or incurred by Buyer with respect to the Transferred Assets.
At any time before the transfer to Buyer has closed, Seller shall have the
right, in its sole discretion, to retain the Transferred Assets or any portion
thereof and waive its right to receive the applicable termination payment
(or a portion thereof equal the cost of any assets that Seller elects to retain
if Seller does not retain all of the Transferred Assets).
22.6 If a Party does not give the other Party a notice of
termination in accordance with this Section 22.5 on or before the
applicable date specified above, the affected termination right under this
Section 22.5 shall be deemed waived and this Agreement shall remain in
full force and effect in accordance with its terms regardless of any
subsequent Commission order, subject to each Party's right to terminate
this Agreement under Section 22.5.3(i).
22.7 Neither Party shall have any liability to the other Party for
any termination under this Section 22., except for the termination
payments set forth in Section 22.5.
ARTICLE 23.
GOVERNMENTAL AUTHORIZATION
This Agreement is subject to the jurisdiction of those governmental agencies
having control over either Party of this Agreement.
ARTICLE 24.
REGULATORY APPROV
Within ten (10) Business Days after the Effective Date, Buyer shall file
this Agreement with the Commission, seeking Commission Approval. Buyer shall use
PAGE 40 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
commercially reasonable and diligent efforts to obtain Commission Approval as soon as
practicable but in no event later than February 28, 2007.
ARTICLE 25.
SUCCESSORS AND ASSIGNS
25.Binding Agreement.This Agreement and all of the terms and provisions
of this Agreement shall be binding upon and inure to the benefit of the respective
permitted successors and assigns ofthe Parties.
25.No Assignment without Consent.Except as permitted in this Article
neither Party shall assign this Agreement or any portion of this Agreement, without the
prior written consent of the other Party, which consent shall not be unreasonably
withheld, conditioned or delayed.
25.3 When Seller s Consent Not Required. Seller s consent shall not be
required for Buyer to assign this Agreement to an Affiliate ofthe Buyer, provided that the
assignee meets the credit requirements set forth for Buyer in the definition of Material
Adverse Change.
25.4
required:
When Buyer s Consent Not Required Buyer s consent shall not be
25.1 For Seller to assign this Agreement for collateral purposes
to the Facility Lender;
25.4.2 For Seller to assign this Agreement to any Affiliate of the
Seller, provided that the assignee or its credit-support provider meets the
Credit Requirements set forth for the Seller s Guarantor in the definition
of Material Adverse Change; or
25.4.3 For Seller to Assign this Agreement to any third party or
parties in connection with a sale of the Facility to such, third party
parties, provided that such third party or parties shall either: (1) have at
least three (3) years' experience in operating wind powered electric
generating facilities with an installed nameplate capacity of 25MW or
greater; or (2) enter into an operating agreement with another person (who
may be the Seller or an Affiliate of the Seller) who has at least three year
experience in operating wind powered electric generating facilities with an
installed nameplate capacity of 25MW or greater, and (3) meet (or have a
guarantor that meets) the Credit Requirements set forth for the Seller
Guarantor in the definition of Material Adverse Change.
25.4.4 For any direct or indirect change of control of the Seller
(whether voluntary or by operation of law), for any private placement or
public offering involving the Seller or an Affiliate of the Seller, for any tax
or equity investment in the Seller or any Affiliate of the Seller, or in
PAGE 41 of 51- POWER PURCHASE SALES AGREEMENT- TELOCASET/IPC
connection with any sale of all or substantially all of the assets of the
Seller or any Affiliate ofthe Seller.
25.Accommodation of Facility Lender or Investor. To facilitate the Seller
obtaining of financing to construct and operate the Facility or to facilitate investments in
the Seller, Buyer shall use commercially reasonable efforts to provide such consents to
assignments, certifications, representations, information, opinions or other documents as
may be reasonably requested by the Seller, the Facility Lender or the Investor in
connection with the financing of or investment in the Facility; provided that in
responding to any such request, the Buyer shall have no obligation to provide any
consent, or enter into any agreement that significantly adversely affects any of the
Buyer s rights, benefits, risks and/or obligations under this Agreement. Seller shall
reimburse, or shall cause the Facility Lender or the Investor to reimburse, the Buyer for
the incremental direct expenses (including, without limitation, the reasonable fees and
expenses of counsel) incurred by the Buyer in the preparation, negotiation, execution
and/or delivery of any documents requested by the Seller, Facility Lender or Investor
and provided by the Buyer, pursuant to this Article. The rights of the Facility Lender or
Investor will be set forth in a collateral assignment, estoppel agreement, consent
agreement or similar instrument delivered at the closing of any Facility financing or any
investment and will include the following provisions:
25.Right to Cure Defaults. Facility Lender or Investor shall
have the right, but not the obligation, to perform any act required to be
performed by the Seller under this Agreement to prevent or cure a default
by the Seller, and such act performed by Facility Lender or Investor shall
be as effective to prevent or cure a default as if done by the Seller. Seller
shall provide the Buyer with a notice identifying the agent or trustee of
any Facility Lender or any Investor and providing appropriate contact
information for any Facility Lender or Investor. Following receipt of such
notice, Buyer shall provide notice of the occurrence of any default or
Event of Default described in this Agreement to the agent or trustee of any
Facility Lender or Investor, and the Buyer will accept a cure performed by
the agent or trustee of any Facility Lender or Investor and will negotiate in
good faith with the agent or trustee of any Facility Lender and Investor as
to the cure period(s) that will be allowed for any Facility Lender or
Investor to cure any the Seller default or Event of Default hereunder and
the Buyer will accept a cure performed by any Facility Lender or Investor
so long as the cure is accomplished within the applicable cure period so
agreed to by the Buyer and any Facility Lender or Investor.
25.5.2 Right to Assume Agreement.If the Seller defaults under
any financi:q.g or investment documents, any Facility Lender or Investor
may (but shall not be obligated to) assume, or cause its designee to
assume, all of the interests, rights, and obligations of the Seller thereafter
arising under this Agreement. Notwithstanding any such assumption, the
Seller shall not be released or discharged from and shall remain liable for
PAGE 42 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
any and all obligations to the Buyer ansmg or accruIng under this
Agreement.
25.5.3 No Obligation to Perform. Buyer agrees that no Facility
Lender or Investor shall be obligated to perform any obligation or be
deemed to incur any liability or obligation provided in this Agreement on
the part of the Seller or shall have any obligation or liability to the Buyer
with respect to this Agreement except to the extent any Facility Lender or
Investor has assumed the obligations of the Seller under this Agreement
pursuant to this Article; provided that the Buyer shall nevertheless be
entitled to exercise all of its rights under this Agreement against the Seller
in the event that the Seller, Facility Lender or Investor fails to perform the
Seller s obligations under this Agreement.
25.5.4 Notice of Facility Lender or Investor Action Within
ten (10) Business Days following the Seller s receipt of each written
notice from a Facility Lender or an Investor of a default or of Facility
Lender s or Investor intent to exercise any remedies, under the
Financing Documents or any investment agreement, Seller shall deliver a
copy of such notice to the Buyer.
25.Subcontracting. Seller may subcontract its duties or obligations under this
Agreement without the prior written consent of the Buyer, provided, that no such
subcontract shall relieve the Seller of any of its duties or obligations under this
Agreement.
25.Right of First Offer upon Sale of Facility Assets
25.Facility Assets If, at any time during the Term Seller
intends to sell the assets comprising all or substantially all of the Facility
(the "Facility Assets ) to a person or entity that is not an Affiliate
Seller, Seller shall first offer the Facility Assets to Buyer. Seller s offer
shall set forth the terms and conditions of the offer in writing and in
reasonable detail. Seller shall promptly answer any questions that Buyer
may have concerning the offered terms and conditions and shall meet with
Buyer to discuss the offer.
25.Buyer s Reiection of Offer; Revival of Offer. If Buyer
does not provide notice of its intent to accept the offered terms and
conditions within thirty (30) days after receiving Seller s offer, Seller may
in its sole discretion enter into an agreement to sell the Facility Assets to a
third party in compliance with the requirements of this Article 25 and on
terms and conditions satisfactory to Seller in its sole discretion. Seller
may elect not to proceed with the sale of the Facility Assets.
25.7.3 Buyer s Acceptance of Offer. If Buyer provides notice of
its intent to accept the offer made by Seller under this Section, the Parties
PAGE 43 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET IIPC
shall negotiate in good faith to enter into a definitive sale agreement that
incorporates the terms and conditions of Seller s offer. The definitive
agreement shall be subject to each Party s management and regulatory
approvals. If Buyer does not provide notice of its intent to accept the
offered terms and conditions within thirty (30) days after providing notice
of intent to accept Seller s offer, Seller may in its sole discretion enter into
an agreement to sell the Facility Assets to a third party on terms and
conditions satisfactory to Seller in its sole discretion.
25.7.4 Limit on Right of First Offer. The right of first offer set
forth in this Section shall apply only if Seller sells all or substantially all of
the assets comprising the Facility in an asset sale to a third party. It shall
not apply to changes in the membership of Seller or any other
reorganization, change of control or other transaction directly or indirectly
affecting Seller or an Affiliate of Seller.
ARTICLE 26.
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 27.
TAXES
Each Party shall pay before delinquency all taxes and other governmental charges
which, if failed to be paid when due, could result in a lien upon the Facility or the
Interconnection Facilities.
ARTICLE 28.
NOTICES
All written notices under this Agreement shall be directed as follows and shall be
considered delivered when faxed, e-mailed and conf1ffi1ed with deposit in the u.S. Mail
first-class, postage prepaid, as follows:
To Seller:Telocaset Wind Power Partners, LLC
c/o Horizon Wind Energy
800 Travis, Suite 700
Houston, TX 77002
Attn: Chief Operating Officer
Fax: [phone]
Email: rick. winsor(g;)horizonwind. com
PAGE 44 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET IIPC
with a copy to:Telocaset Wind Power Partners, LLC
c/o Horizon Wind Energy
800 Travis, Suite 700
Houston, TX 77002
Atln: General Counsel
Fax: [phone]
Email: leslie.freiman~horizonwind.com
To Buyer:Idaho Power Company
Attn: Vice President, Power Supply
Idaho Power Company
PO Box 70
Boise, ID 83707
Fax: [phone]
Email: JimMi11er~IdahoPower.com
with a copy to:Idaho Power Company
Attn: Legal Department
PO Box 70
Boise, ID 83707
Fax: [phone]
Email: mmoen~idahopower.com
By giving notice to the other Party, either Party may from time to time change the
address (es) to which notices or copies are to be sent to it under this Agreement.
ARTICLE 29.
ADDITIONAL TERMS AND CONDITIONS
This Agreement includes the following appendices, which are attached hereto and
included by reference:
Appendix A
Appendix H
Post-Operation Date Pricing/Post-Operation
Date Alternative Pricing
Facility, Point of Delivery and SiteDescription
Form of Guaranty
Metering
Default Performance Provisions (90-110)
Liquidated Damages Escalation Tables
Analysis and Examples of Annual Energy
Delivery Guarantee Analysis
Communications with Designated Dispatch
Facility
Transferred Assets
Conditions Precedent to Alternative Pricing
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
Appendix I
Appendix J
PAGE 45 of 51 - POWER PURCHASE SALES AGREEMENT- TELOCASET/IPC
ARTICLE 30.
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 3t.
CONFIDENTIAL BUSINESS INFORMATION
31.Definition The following constitutes "Confidential Business
Information " whether oral or written: (i) Parties' proposals and negotiations before the
Effective Date concerning this Agreement, (ii) the terms of this Agreement, (iii) the
actual invoices billed to the Buyer under this Agreement, and (iv) information that a
Party stamps or otherwise identifies as "confidential" or "proprietary" before disclosing it
to the other Party. Such Confidential Business Information may only be used by the
Parties for purposes related to the approval, administration or enforcement of this
Agreement and for no other purpose. Notwithstanding the foregoing, "Confidential
Business Information" does not include (A) information that was publicly available at the
time of the disclosure thereof by one Party to the other, other than as a result of a
disclosure by the receiving Party in breach of this Article; (B) information that becomes
publicly available through no fault of the receiving Party after the time of the disclosure
by the disclosing Party to the receiving Party; (C) information that was rightfully in the
possession of the receiving Party (without confidential or proprietary restriction) at the
time of disclosure or that becomes available to the receiving Party from a source not
subject to any restriction against disclosing such information to the receiving Party; and
(D) information that the receiving Party independently developed without a violation of
this Agreement.
31.Duty to Maintain Confidentiality. Each Party agrees not to disclose
Confidential Business Information to any other person (other than its Affiliates, counsel
consultants, lenders, prospective lenders, purchasers, prospective purchasers, investors
prospective investors, contractors constructing or providing services to the Facility
(including, but not limited to, turbine suppliers), employees, officers and directors who
agree to be bound by the provisions of this Article), without the prior written consent of
the other Party, provided that either Party may disclose Confidential Business
Information if and to the extent such disclosure is required (i) by any Requirements of
Law, (ii) in order for the Buyer to receive regulatory recovery of expenses related to the
Agreement, (iii) pursuant to an order of a court or regulatory agency or (iv) in order to
enforce this Agreement or to seek approval of this Agreement. In addition, Seller may
include information concerning the terms or conditions of this Agreement in financial
statements to the extent that such information is required to be included in financial
statements prepared with respect to the Facility, Seller or any Affiliate of the Seller in
accordance with generally accepted accounting principles consistently applied. In the
event a Party is required by Requirements of Law or by a court or regulatory agency to
PAGE 46 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
disclose Confidential Business Information, such Party shall to the extent possible notify
the other Party at least three (3) Business Days in advance of such disclosure.
31.3 Irreparable Iniurv: Remedies. Each Party agrees that violation of the
terms of this Article constitutes irreparable harm to the other, and that the harmed Party
may seek any and all remedies available to it at law or in equity, including but not limited
to injunctive relief.
31.4 News Releases and Publicity Before issuing any news release or
promotional material regarding the Facility that refers to this Agreement or any term or
condition of this Agreement, the Party proposing to issue the release shall first provide a
copy to the other Party for review and comment. If no response is received within
five (5) Business Days after the copy of the news release or promotional material is given
to the Party to which it is directed, then the news release or promotional material shall be
deemed approved.
ARTICLE 32.
REPRESENTATIONS AND WARRANTIES
32.Seller Representations. Warranties and Covenants
represents and warrants as follows:
Seller hereby
32.1 Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the state of Delaware.
Seller is qualified to do business in each other jurisdiction where the
failure to so qualify would have a material adverse effect on the business
or financial condition of the Seller; and the Seller has all requisite power
and authority to conduct its business, to own its properties, and to execute
deliver, and perform its obligations under this Agreement.
32.2 The execution, delivery, and performance of its obligations
under this Agreement by the Seller have been duly authorized by all
necessary corporate or limited liability company action, and do not and
will not:
32.1.2.require any consent or approval by any
governing body of the Seller, other than that which has been
obtained and is in full force and effect (evidence of which shall be
delivered to the Buyer upon its request);
32.1.2.violate any provision of law, rule
regulation, order, writ, judgment, injunction, decree
determination, or award currently in effect having applicability to
the Seller or violate any provision in any formation documents of
the Seller, the violation of which could have a material adverse
effect on the ability of the Seller to perform its obligations under
this Agreement;
PAGE 47 of 51- POWER PURCHASE SALES AGREEMENT-TELOCASETIIPC
32.result in a breach or constitute a default
under the Seller s formation documents or bylaws, or under any
agreement relating to the management or affairs of the Seller or
any indenture or loan or credit agreement, or any other agreement
lease, or instrument to which the Seller is a party or by which the
Seller or its properties or assets may be bound or affected, the
breach or default of which could reasonably be expected to have a
material adverse effect on the ability of the Seller to perform its
obligations under this Agreement; or
32.2.4 result in, or require the creation or
imposition of any mortgage, deed of trust, pledge, lien, security
interest, or other charge or encumbrance of any nature (other than
as may be contemplated by this Agreement) upon or with respect
to any of the assets or properties of the Seller now owned or
hereafter acquired, the creation or imposition of which could
reasonably be expected to have a material adverse effect on the
ability of the Seller to perform its obligations under this
Agreement.
32.3 This Agreement is a valid and binding obligation of the
Seller.
32.1.4 The execution and performance of this Agreement will not
conflict with or constitute a breach or default under any contract or
agreement of any kind to which the Seller is a party or any judgment;
order, statute, or regulation that is applicable to the Seller or the Facility.
32.Seller Disclaimer of Certain Representations and Warranties
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT
32.2.1 SELLER DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A P ARTICULAR PURPOSE
WITH RESPECT TO THE SALE OF NET ENERGY AND
ENVIRONMENTAL AND RENEWABLE ENERGY CREDITS.
32.2.2 SELLER MAKES NO REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, REGARDING THE
CURRENT OR FUTURE EXISTENCE OF ANY ENVIRONMENTAL
AND RENEW ABLE ENERGY CREDITS UNDER THIS AGREEMENTOR OTHERWISE OR THEIR CHARACTERIZATION OR
TREATMENT UNDER APPLICABLE LAW OR OTHERWISE.
32.3 Buyer s Representations. Warranties and Covenants
represents and warrants as follows:
Buyer hereby
32.3.1 Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Idaho and is qualified in
PAGE 48 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
each other jurisdiction where the failure to so qualify would have a
material adverse effect upon the business or financial condition of the
Buyer; and the Buyer has all requisite power and authority to conduct its
business, to own its properties, and to execute, deliver, and perform its
obligations under this Agreement.
32.3.2 The execution, delivery, and performance of its obligations
under this Agreement by the Buyer will have been duly authorized by all
necessary corporate action, and do not and will not:
32.require any consent or approval of the
Buyer s Board of Directors, or shareholders, other than that which
has been obtained and is in full force and effect (evidence of which
shall be delivered to the Seller upon its request);
32.violate any provision of law rule,
regulation, order, writ, judgment injunction, decree
determination, or award currently in effect having applicability to
the Buyer or violate any provision in any corporate documents of
the Buyer, the violation of which could have a material adverse
effect on the ability of the Buyer to perform its obligations under
this Agreement;
32.3.2.3 result in a breach or constitute a default
under the Buyer s corporate charter or bylaws, or under any
agreement relating to the management or affairs of the Buyer, or
any indenture or loan or credit agreement, or any other agreement
lease, or instrument to which the Buyer is a party or by which the
Buyer or its properties or assets may be bound or affected, the
breach or default of which could reasonably be expected to have a
material adverse effect on the ability of the Buyer to perform its
obligations under this Agreement; or
32.3.2.4 result in, or require the creation or
imposition of any mortgage, deed of trust, pledge, lien, security
interest, or other charge or encumbrance of any nature (other than
as may be contemplated by this Agreement) upon or with respect
to any of the assets or properties of the Buyer now owned or
hereafter acquired, the creation or imposition of which could
reasonably be expected to have a material adverse effect on the
ability of the Buyer to perform its obligations under this
Agreement.
32.3.3 This Agreement is a valid and binding obligation of the
Buyer.
PAGE 49 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
32.4 The execution and performance of this Agreement will not
conflict with or constitute a breach or default under any contract or
agreement of any kind to which the Buyer is a party or any judgment
order, statute, or regulation that is applicable to the Buyer.
32.3.5 To the best knowledge of the Buyer, all approvals
authorizations, consents, or other action required by any Governmental
Authority to authorize the Buyer s execution, delivery and performance of
this Agreement have been duly obtained and are in full force and effect.
32.6 Buyer has obtained a determination that 66MW of the
Facility will be designated a network resource and agrees that such
designation will remain in place for the Initial Term and will result in firm
transmission of energy from the Facility to Buyer s load. Buyer shall, at
its expense (if any), obtain transfer capability from Transmission Provider
to allow receipt of energy in excess of 66MW at the Point of Delivery in
accordance with this Agreement. Buyer agrees to consider the portion of
the facility in excess of the 66MW as a potential network resource in its
future integrated resource planning process and include it as a network
resource in its Integrated Resource Plan if it is cost effective to do so.
ARTICLE 33.
ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement of the Parties concerning the
subject matter of this Agreement and supersedes all prior or contemporaneous oral or
written agreements between the Parties concerning the subject matter of this Agreement.
(Signatures on following page.
PAGE 50 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET /IPC
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their respective names on the da,tes set forth below:
TELOCASET WIND POWER
PARTNERS, LLC
IDAHO POWER CO~ANY
.'. ii
~ ",(
By: ,-rU B
"--
M.~
Title: " Ti -6.'.1 f - f'~~--;L ~f'f" L::1
President ef Executive Officer
PAGE 51 of 51 - POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
APPENDIX A
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
POST-OPERATION DATE PRICING ($/MWH)
POST-OPERATION DATE AL TERNA TIVE PRICING
PAGE 1 OF 3 - ApPENDIX A TO POWER PURCHASE SALES AGREEMENT TELOCASET/IPC
(POST-OPERATION DATE PRICING ($/MWH) AND POST-OPERATION DATE ALTERNATIVE PRICING)
327940/KHG/1OI185-0018
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APPENDIX B
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
FACILITY. POINT. OF DELIVERY. AND SITE DESCRIPTION
The Project is known as the Elkhorn wind power project and is expected to have a
maximum nameplate capacity of 104 megawatts (MW).
Site Data
The Site consists of approximately 23 900 acres in Union County, Oregon. The Site
covers the following tax parcels:
05S40EO0800
05S40E03901
05S40E03902
05S40 E03903
05S40E04500
05S40E04600
05S40E04701
05S40E05400
05S40E05500
06S39EO0100
06S40EOO500
06S40EO0700
06S40EO0702
06S40EO0704
06S40EO0900
06S40E021 00
06S40E02200
Facility Description
As proposed, the Project will have an installed nameplate capacity of up to 104MW and
is expected to consist of 61 Vestas V82 wind turbine generators with a total capacity of
100.65MW. The Project's significant components include roads, foundations, underground and
overhead electrical lines, grid interconnection facilities, a substation, an operations and
maintenance (O&M) center, and associated supporting infrastructure and facilities.
PAGE 1 OF 2 - ApPENDIX B TO POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
(FACILITY, POINT OF DELIVERY, AND SITE DESCRIPTION)
327940/1/KHG/lOI185-0018
Electrical power generated by the wind turbines will be transformed and collected
through a network of underground and overhead cables that terminate at the Project substation.
Power from the wind turbines will be generated at 600 Volts (V). Power from the
turbines is fed through a breaker panel at the turbine base inside the tower and is interconnected
to a pad-mounted step-up transformer at the tower base that steps the voltage up to
34.5 kilovolts (kV).
For the 34.5 kV overhead power lines, a fused, switch-riser pole will be used to run the
cables from the underground trench to the overhead conductors. At the substation, the electrical
power from the entire wind plant is stepped up to transmission level at 230 kV and delivered to
the point of interconnection.
Interconnection Facilities and Point of Delivery
The point of interconnection is on Idaho Power Company s 230kV LaGrande-Brownlee
line approximately seventeen (17) miles southeast of the LaGrande substation in Section 6
Township 6 South, Range 40 East as indicated on the attached generalized layout map.
The basic elements of the substation and interconnection facilities are a control house, a
bank of main transformers, outdoor breakers, relaying equipment, high voltage bus work, steel
support structures, and overhead lightning suppression conductors. All of these main elements
will be installed on concrete foundations. The substation and interconnection facilities each
consist of a graveled footprint area of approximately five (5) acres, a chain link perimeter fence
and an outdoor lighting system. The specific substation and interconnection facility components
will be identified in the Interconnection Agreement.
Each turbine will be connected to a central Supervisory Control and Data Acquisition
(SCADA) System, through a network of underground fiber optic cable.
An O&M facility will be located near Telocaset Lane at the center of the Project site.
The O&M facility will include a main building with offices, spare parts storage, restrooms, a
shop area, outdoor parking facilities, a turn around area for larger vehicles, outdoor lighting and
a gated access with partial or full perimeter fencing.
PAGE 2 OF 2 - ApPENDIX B TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(FACILITY, POINT OF DELIVERY, AND SITE DESCRIPTION)
327940/1/KHGIlOI185-0018
APPENDIX C
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
FORMS OF SELLER GUARANTY
PAGE 1 OF 7 - ApPENDIX C TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(FORMS OF SELLER GUARANTY)
327940/l/KHG/lOI185-0018
FORM OF SELLER GUARANTY
($1,000,000)
' 200
Idaho Power Company
PO Box 70
Boise, ID 83707
Fax: [phone]
Ladies and Gentlemen:
The Goldman Sachs Group, Inc. (the "Guarantor ), a corporation duly organized under
the laws of the state of Delaware, is the parent company of Telocaset Wind Power
Partners, LLC, a limited liability company duly organized under the laws of the state of
Delaware (the "Company"). Guarantor understands and acknowledges that Idaho Power
Company, an Idaho corporation ("Buyer ), is not willing to enter into that certain Power
Purchase Sales Agreement between the Company and Buyer dated as of the date hereof (the
Power Purchase Sales Agreement") unless and until Guarantor unconditionally and, subject to
the provisions of the fifth and sixth paragraphs hereof, irrevocably guarantees the prompt and
complete payment as and when due, whether by acceleration or otherwise, of the payment
obligations, whether now in existence or hereafter arising, under the Power Purchase Sales
Agreement. For value received, and to induce Buyer to enter into the Power Purchase Sales
Agreement, Guarantor hereby unconditionally and, subject to the provisions ofthe fifth and sixth
paragraphs hereof, irrevocably guarantees the prompt and complete payment as and when due
whether by acceleration or otherwise, of the payment obligations, whether now in existence or
hereafter arising, under the Power Purchase Sales Agreement (which guaranty, along with the
other terms and conditions set forth herein, is hereafter referred to as the "Guaranty"). This
Guaranty is one of payment and not of collection. Capitalized terms used but not defined in this
Guaranty have the meaning given to them in the Power Purchase Sales Agreement.
The maximum aggregate liability of the Guarantor in respect of amounts claimed by
Buyer under or pursuant to this Guaranty shall at no time exceed an amount equal to One Million
Dollars ($1 000 000); provided, however, that Guarantor also guaranties payment in full (that is
without limitation as to amount) of any reasonable out-of-pocket legal fees, costs and/or
expenses, whether at trial, on appeal or in any arbitration, by Buyer in connection with prevailing
in enforcing the terms of this Guaranty.
PAGE 2 OF 7 - ApPENDIX C TO POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
(FORMS OF SELLER GUARANTY)
327940/l/KHG/lOl185-0018
The Guarantor hereby waives notice of acceptance of this Guaranty and notice of any
obligation or liability to which it may apply, and waives presentment, demand for payment
protest, notice of dishonor or non-payment of any such obligation or liability, suit or the taking
of other action by Buyer against, and any other notice to, the Company, the Guarantor or others.
Buyer may at any time and ftom time to time without notice to or consent of the
Guarantor and without impairing or releasing the obligations of the Guarantor hereunder:
(1) agree with the Company to make any change in the terms of any obligation or liability of the
Company to Buyer, including any modification or amendment to the Power Purchase Sales
Agreement, (2) take or fail to take any action of any kind in respect of any security for any
obligation or liability of the Company to Buyer, (3) exercise or refrain ftom exercising any rights
against the Company or others, (4) fail to first take action against the Company for amounts due
under the Power Purchase Sales Agreement, and/or (5) compromise or subordinate any
obligation or liability of the Company to Buyer including any security therefor. Any other
suretyship defenses are hereby waived by the Guarantor.
This Guaranty shall terminate on the earlier to occur of (i) the substitution of an alternate
form of Seller Performance Assurance in accordance with Section 12.2 of the Power Purchase
Sales Agreement; (ii) the Operation Date; and (iii) the later of (A) the termination or expiration
of the Power Purchase Sales Agreement and (B) the satisfaction of all obligations of the
Company under the Power Purchase Sales Agreement. Notwithstanding the foregoing, the
Guarantor further agrees that if at any time payment, or any part thereof, of any of the
, obligations guaranteed hereunder, is rescinded, is demanded to be returned and/or must
otherwise be restored or returned by Buyer in connection with the bankruptcy, insolvency,
dissolution, reorganization or similar proceeding of the Company, this Guaranty shall continue to
be effective or be reinstated as the case may be; provided that this Guaranty may not be
reinstated for any reason after its termination under clause (i) or (ii) of this paragraph.
Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in
whole or in part, without prior written consent of Buyer, and any purported assignment or
delegation absent such consent is void, except for an assignment and delegation of all of the
Guarantor s rights and obligations hereunder in whatever form the Guarantor determines may be
appropriate to a partnership, corporation, trust or other organization in whatever form that
succeeds to all or substantially all of the Guarantor s assets and business and that assumes such
obligations by contract, operation of law or otherwise. Upon any such delegation and
assumption of obligations, the Guarantor shall be relieved of and fully discharged from all
obligations hereunder, whether such obligations arose before or after such delegation and
assumption.
In the event any payment owing to Buyer under the Power Purchase Sales Agreement or
under this Guaranty is not promptly and completely paid as and when due, any indebtedness of
Company to Guarantor and any payment or distribution right held by Guarantor against the
Company shall be subordinated to the due and unpaid indebtedness to Buyer until paid in full.
Guarantor shall have no right of subrogation until the Company s due and unpaid indebtedness to
Buyer is paid in full.
This Guaranty constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between Guarantor and Buyer with respect to the subject
PAGE 3 OF 7 - ApPENDIX C TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(FORMS OF SELLER GUARANTY)
327940/1/KHG/I 01185-0018
matter hereof. This Guaranty may not be modified except pursuant to a written instrument
signed by Buyer and Guarantor. The execution, delivery and performance of this Guaranty have
been duly authorized by all requisite corporate action on the part of the Guarantor. The
provisions of this Guaranty are severable, and if any clause or provision shall be held invalid or
unenforceable in whole or in part, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, and shall not affect the validity or enforceability of any other
clause or provision.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LA WS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. GUARANTOR
AGREES TO THE EXCLUSIVE JURISDICTION OF COURTS LOCATED IN THE STATE
OF NEW YORK, UNITED STATES OF AMERICA, OVER ANY DISPUTES ARISING
UNDER OR RELATING TO THIS GUARANTY.
Very truly yours
THE GOLDMAN SACHS GROUP, INC.
By:
Authorized Officer
PAGE 4 OF 7 - ApPENDIX C TO POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
(FORMS OF SELLER GUARANTY)
327940/l/KHG/lOI185-0018
FORM OF SELLER GUARANTY
($10,000,000)
200
Idaho Power Company
PO Box 70
Boise, ID 83707
Fax: [phone]
Ladies and Gentlemen:
The Goldman Sachs Group, Inc. (the "Guarantor ), a corporation duly organized under
the laws of the state of Delaware, is the parent company of Telocaset Wind Power
Partners, LLC, a limited liability company duly organized under the laws of the state of
Delaware (the "Company
).
Guarantor understands and acknowledges that Idaho Power
Company, an Idaho corporation ("Buyer ), is not willing to enter into that certain Power
Purchase Sales Agreement between the Company and Buyer dated as of the date hereof (the
Power Purchase Sales Agreement") unless and until Guarantor unconditionally and, subject to
the provisions of the fifth and sixth paragraphs hereof, irrevocably guarantees the prompt and
complete payment as and when due, whether by acceleration or otherwise, of the payment
obligations, whether now in existence or hereafter arising, under the Power Purchase Sales
Agreement. For value received, and to induce Buyer to enter into the Power Purchase Sales
Agreement, Guarantor hereby unconditionally and, subject to the provisions of the fifth and sixth
paragraphs hereof, irrevocably guarantees the prompt and complete payment as and when due
whether by acceleration or otherwise, of the payment obligations, whether now in existence or
hereafter arising, under the Power Purchase Sales Agreement (which guaranty, along with the
other terms and conditions set forth herein, is hereafter referred to as the "Guaranty ). This
Guaranty is one of payment and not of collection. Capitalized terms used but not defined in this
Guaranty have the meaning given to them in the Power Purchase Sales Agreement.
The maximum aggregate liability of the Guarantor in respect of amounts claimed by
Buyer under or pursuant to this Guaranty shall at no time exceed an amount equal to Ten Million
Dollars ($10 000 000); provided, however, that Guarantor also guaranties payment in full (that
, without limitation as to amount) of any reasonable out-of-pocket legal fees, costs and/or
expenses, whether at trial, on appeal or in any arbitration, by Buyer in connection with prevailing
in enforcing the terms of this Guaranty.
PAGE 5 OF 7 - ApPENDIX C TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(FORMS OF SELLER GUARANTY)
327940/1/KHG/1 01185-0018
The Guarantor hereby waives notice of acceptance of this Guaranty and notice of any
obligation or liability to which it may apply, and waives presentment, demand for payment
protest, notice of dishonor or non-payment of any such obligation or liability, suit or the taking
of other action by Buyer against, and any other notice to, the Company, the Guarantor or others.
Buyer may at any time and from time to time without notice to or consent of the
Guarantor and without impairing or releasing the obligations of the Guarantor hereunder:
(1) agree with the Company to make any change in the terms of any obligation or liability of the
Company to Buyer, including any modification or amendment to the Power Purchase Sales
Agreement, (2) take or fail to take any action of any kind in respect of any security for any
obligation or liability of the Company to Buyer, (3) exercise or refrain from exercising any rights
against the Company or others, (4) fail to first take action against the Company for amounts due
under the Power Purchase Sales Agreement, and/or (5) compromise or subordinate any
obligation or liability of the Company to Buyer, including any security therefor. Any other
suretyship defenses are hereby waived by the Guarantor.
This Guaranty shall terminate on the earlier to occur of (i) the substitution of an alternate
form of Seller Performance Assurance in accordance with Section 12.2 of the Power Purchase
Sales Agreement; and (ii) the later of (A) the termination or expiration of the Power Purchase
Sales Agreement and (B) the satisfaction of all obligations of the Company under the Power
Purchase Sales Agreement. Notwithstanding the foregoing, the Guarantor further agrees that if
at any time payment, or any part thereof, of any of the obligations guaranteed hereunder, is
rescinded, is demanded to be returned and/or must otherwise be restored or returned by Buyer in
connection with the bankruptcy, insolvency, dissolution, reorganization or similar proceeding of
the Company, this Guaranty shall continue to be effective or be reinstated as the case may be;
provided that this Guaranty may not be reinstated for any reason after its tennination underclause (i) ofthis paragraph.
Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in
whole or in part, without prior written consent of Buyer, and any purported assignment or
delegation absent such consent is void, except for an assignment and delegation of all of the
Guarantor s rights and obligations hereunder in whatever form the Guarantor determines may be
appropriate to a partnership, corporation, trust or other organization in whatever form that
succeeds to all or substantially all of the Guarantor s assets and business and that assumes such
obligations by contract, operation of law or otherwise. Upon any such delegation and
assumption of obligations, the Guarantor shall be relieved of and fully discharged from all
obligations hereunder, whether such obligations arose before or after such delegation and
assumption.
In the event any payment owing to Buyer under the Power Purchase Sales Agreement or
under this Guaranty is not promptly and completely paid as and when due, any indebtedness of
Company to Guarantor and any payment or distribution right held by Guarantor against the
Company shall be subordinated to the due and unpaid indebtedness to Buyer until paid in fulL
Guarantor shall have no right of subrogation until the Company s due and unpaid indebtedness to
Buyer is paid in full.
This Guaranty constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between Guarantor and Buyer with respect to the subject
PAGE 6 OF 7 - ApPENDIX C TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(FORMS OF SELLER GUARANTY)
327940/1/KHG/1O1185-0018
matter hereof. This Guaranty may not be modified except pursuant to a written instrument
signed by Buyer and Guarantor. The execution, delivery and performance of this Guaranty have
been duly authorized by all requisite corporate action on the part of the Guarantor. The
provisions of this Guaranty are severable, and if any clause or provision shall be held invalid or
unenforceable in whole or in part, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, and shall not affect the validity or enforceability of any other
clause or provision.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE ST ATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. GUARANTOR
AGREES TO THE EXCLUSIVE JURISDICTION OF COURTS LOCATED IN THE STATE
OF NEWYORK UNITED STATES OF AMERICA OVER ANY DISPUTES ARISING
UNDER OR RELATING TO THIS GUARANTY.
Very truly yours
THE GOLDMAN SACHS GROUP, INC.
By:
Authorized Officer
PAGE 7 OF 7 - ApPENDIX C TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(FORMS OF SELLER GUARANTY)
3279401lIKHGIlOI I 85-0018
APPENDIX D
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
METERING EQUIPMENT
(See following page)
PAGE 1 OF 2 - ApPENDIX D TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(METERING EQUIPMENT)
327940/l/KHG/lOlI85-0018
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PAGE 2 OF 2 - ApPENDIX D TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(METERING EQUIPMENT)
327940/I/KHGI101185-0018
APPENDIX E
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
90%-110% PERFORMANCE REOUIREMENTS
1. Determination of Surplus Ener2V Price The Buyer shall pay the Contract
Price for Net Energy from the Seller s Facility in accordance with the Agreement. For
Surplus/Shortfall Energy only, the Buyer shall pay the Surplus Energy Price, which shall be
calculated in accordance with this Appendix and used in lieu of the Contract Price solely with
respect to the Surplus/Shortfall Energy as defined in this Appendix.
2. Definitions The following defined terms (as indicated by initial capitalization)
shall have the meaning given to them in this Appendix.
Surplus Energy Price" - For all Surplus/Shortfall Energy, Buyer shall pay to the Seller
the current month's Market Energy Cost or the Contract Price specified in Article 5 of this
Agreement, whichever is lower.
Market Energy Cost" is derIDed as eighty-five percent (85%) of the load weighted
average of the daily on-peak and off-peak Dow Jones Mid-Columbia Index (Dow Jones Mid-
Index) prices for non-firm energy. If the Dow Jones Mid-Columbia Index price is discontinued
by the reporting agency, the 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.
Surplus/Shortfall Energy" is derIDed as either (1) Net Energy produced by the Seller
Facility and delivered to Buyer pursuant to this Agreement during the calendar month to the
extent such Net Energy exceeds one hundred ten percent (110%) of the monthly Net Energy
Target for the corresponding calendar month specified pursuant to this Appendix, or (2) if the
Net Energy produced by the Seller s Facility and delivered to Buyer pursuant to this Agreement
during the calendar month is less than ninety percent (90%) of the monthly Net Energy Target
for the corresponding calendar month specified pursuant to this Appendix, then all Net Energy
delivered by the Facility to the Buyer electrical system for that given month.
PAGE 1 OF 3 - ApPENDIX E TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(90%-110% PERFORMANCE REQUIREMENTS)
327940/l/KHG/IOI185-0018
Initial Date - is defined as the first day of the calendar month following the date on
which the Seller fails to timely cure a default as determined under Section 6.3.1 and the terms
and conditions within this Appendix are therefore implemented in lieu of Sections 6., 6.3
and 6.4 of the Agreement.
Initial Year" - is defined as twelve (12) calendar months starting with the Initial Date.
Net Energy Target"is defined as the monthly Net Energy that the Seller intends to
produce and deliver to the Point of Delivery as specified pursuant to this Appendix.
Initial Year Monthly Net Energy Targets" - This term shall have the meaning given to it
in Section 3 below.
3. Monthly Net Enerey Tareets Seller shall provide the Buyer with the monthly
Net Energy Targets for the Initial Year within thirty (30) days after the Initial Date (the Initial
Year Monthly Net Energy Targets ). If the Seller does not provide the Initial Year Monthly Net
Energy Targets as specified, thirty percent (30%) ofthe Facility's nameplate rating multiplied by
the hours for each month will be used to establish each month's Net Energy Target for the Initial
Year (subject to adjustment under Section 5 ofthis Appendix).
4. Oneoine Monthly Net Enerey Tareets - Beginning at the end of the ninth (9
month following the Initial Date and every three (3) months thereafter, the Seller shall provide
Buyer with a minimum of three additional calendar months of Net Energy Targets. This
information will be provided to Buyer by written notice in accordance with Article 28, no later
than the fifth (5th) day following the end of the previous month. If the Seller does not provide
the Ongoing Monthly Net Energy Targets in a timely manner, Buyer will use the monthly
production (actual or, if actual numbers are not available, calculated as contemplated
Section 9.3) for the same three (3) months period in the preceding year.
5. Seller s Adjustment of Net Enerey Tareet(s)- Except as provided herein
beginning with the end of the third (3 ) month after the Initial Date and at the end of every third
month thereafter, the Seller may not revise the immediate next three (3) months of previously
provided Net Energy Targets. Notwithstanding the foregoing, by written notice given to Buyer
in accordance with Article 28, no later than 5:00 PM ofthe fifth (5th) day following the end of the
previous month, the Seller may revise all other previously-provided Net Energy Targets. Failure
to provide timely written notice of changed amounts will be deemed to be an election of no
change with respect to the immediate next three months of previously provided Net Energy
Targets.
6. Credits to Net Enerey Tareet - Buyer shall adjust the applicable month's Net
Energy Target to reflect the same reduction as has occurred in the actual Net Energy deliveries if
Net Energy deliveries by the Seller to the Buyer are reduced as a result of:
(a)
Provider;
Force majeure affecting the Seller, Buyer, or Interconnection
PAGE 2 OF 3 - ApPENDIX E TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(90%-110% PERFORMANCE REQUIREMENTS)
327940/I/KHG/lO1185-0018
(b) Seller s declaration and Buyer s acceptance of a Suspension of
Energy Deliveries;
(c) Curtaillment of the Seller s Net Energy deliveries other than for
Seller s default; or
(d)Buyer s default under this Agreement.
7. Seller Declared Suspension of Enerey Deliveries - If the Seller s Facility
experiences a forced outage due to equipment failure which is not caused by an event of force
majeure as defined within the Agreement or by Seller s failure to maintain the Facility in
accordance with Good Utility Practices, and the magnitude of the forced outage has the potential
of reducing the Seller s Net Energy to be less than ninety percent (90%) of the Net Energy
Target for a given calendar month, Seller may, after giving notice as described below
temporarily suspend all deliveries of Net Energy to Buyer from the Facility or from individual
generation unites) within the Facility impacted by the forced outage for a period of not less than
forty-eight (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 ofthe
next full hour following the Seller s telephone notification as described below and will continue
for the time as specified (not less than forty-eight (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 that would have been delivered but for the Declared Suspension shall be calculated in the
manner contemplated in Section 9.3.
8. Seller s Notification of a Declared Suspension of Enen!v Deliveries - If the
Seller desires to initiate a Declared Suspension of Energy Deliveries as provided in this
Appendix, 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 Buyer. The Seller will, within twenty-four (24) hours after
the telephone contact, provide Buyer a written notice in accordance with Article 28 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. Buyer will review the documentation provided by the Seller to determine Buyer
acceptance of the described forced outage as qualifying for a Declared Suspension of Energy
Deliveries as specified in this Appendix. Buyer s acceptance of the Seller s 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 offorce majeure or by Seller s failure to maintain the
Facility in accordance with Good Utility Practices.
PAGE 3 OF 3 - ApPENDIX E TO POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
(90%-110% PERFORMANCE REQUIREMENTS)
327940/11KHG/IO1185-0018
APPENDIX F
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
LIQUIDATED DAMAGES CAPS
Contract Net Energy Net Energy Shortfall
Year Shortfall Damages Damages Cap
($fMWh)
($)
$ 0.N/A
$ 0.N/A
$ 0.N/A
$ 25.$500 000
25.515 000
26.52 530 450
27.32 546 364
28.562 755
28.579 638
29.597 027
30.614 938
31.67 633 386
32.652 388
33.671 960
34.692 119
35.712 883
36.734 269
37.756 297
38.778 986
40.802 356
I The damage amounts listed in the table refer to the Contract Year in which damages, if any, are to be paid. For
example, if Seller is required to pay Buyer Net Shortfall Damages as a result of not meeting its Delivery Obligations
for Contract Year 3, the amount to be paid should be $25.75/MWh. Except as expressly provided in Section 6.5.3
for transitional periods, the damage cap is $250 000 per Contract Year when the provisions of Appendix E have
been implemented.
ApPENDIX F TO POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
(LIQUIDATED DAMAGES CAPS)
327940/1/KHG/lO1185-0018
APPENDIX G
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
ANALYSIS AND EXAMPLES
ANNUAL ENERGY DELIVERY GUARANTEE
The examples set forth in this Appendix are for the purposes of
illustration onlv and do not constitute a representation. warrantv
or covenant concernine matters assumed for purposes of each example.
Key:
DO = Delivery ObligationGO = Guaranteed Output
LDV = Liquidated Damages Value
NESD = Net Energy Shortfall DamagesSE Shortfall Energy
T AFE = Total Annual Facility Energy
TUP = True-Up Period
TUS = True-Up Shortfall
= Year at Issue.X+l = Next year after year at issue.
X+2 = Second year after year at issue.
= Year
* ANNUAL ENERGY DELIVERY GUARANTEE ANALYSIS *
Analysis of whether Seller has met GO for Y
1. If T AFE for Y x is ~ GO for Y x, then Seller shall be deemed to have met its energy
delivery obligation for Y x, and analysis ends.
PAGE 1 OF 7 - ApPENDIX G TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(ANALYSIS AND EXAMPLES OF ANNUAL ENERGY DELIVERY GUARANTEE)
327940/1IKHG/lOl185-0018
2. If T AFE for Y x is .::: GO for Y x, then Seller shall be in jeopardy of failing its
energy delivery obligation for Y x and analysis continues to determine whether Seller may be
subject to NESD.
Calculate SE(Y x):
GO - TAFE(Yx) = SE(Yx).
Analysis of whether Seller is liable for NESD:
Compare TAPE during TUP to DO during TUP:
Calculate TAPE for TUP (TAFETUP):
(TAFETUP) = TAPE(Yx) + TAFE(Yx+!) + TAFE(Yx+z)
Calculate delivery obligation for TUP (DOTUP):
(DOTUP) = GO(Yx) + GO(Y X+l) + GO(Y x+z)c. If (T APETUP) is 2: (DOTUP) then Seller shall be deemed to have met its
energy delivery obligation for Y x, and analysis ends.
d. If (T AFETUP) is .::: (DOTUP ) then Seller shall be deemed to have failed its
energy delivery obligation for Yx and analysis continues to determine the amount ofNESD that
Seller must compensate Buyer.
Calculate Seller s liable for NESD:
Calculate liability for NESD:
GO - TAFE(Yx) = SE(Yx)
(DOTUP) - (TAFETUP) = TUSTUP
Determine lesser ofSE(Yx) and TUSTUP
If SE(Yx) 2: TUSTUP, use SE(Yx) for damage calculation.
If SE(Y x) .::: TUSTUP, use TUSTUP for damage calculation.
Calculate amount ofNESD for Y x , or NESD(Y x):
NESD(Yx) = (the lesser ofSE(Yx) or TUSTUP) x LDV
Limitations
1. The LDV is $25.00/MWh beginning for YZI . The LDV will be escalated at a rate
of three percent (3%) annually thereafter.
I See Appendix F for damage values.
PAGE 2 OF 7 - ApPENDIX G TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(ANALYSIS AND EXAMPLES OF ANNUAL ENERGY DELIVERY GUARANTEE)
327940/l/KHG/IOlI85-0018
2. NESD shall be capped at $500 000 for any given year starting with Contract
Year 4. Thereafter, the NESD cap will be escalated at a rate of three (3%) annually thereafter.
3. The aggregate amount ofNESD is subject to a PPA term cap of $15 000 000 for
NESD and Delay Damages.
4. Seller may not use any T AFE amounts more than once in any Annual Energy
Delivery Guarantee Analysis during the Term of this Agreement. For example, if Seller uses
some TAFE amounts to reduce (or eliminate) Seller s liability for a NESD amount payable
during a particular True-Up Period, those same TAFE amounts cannot be reused for purposes of
determining whether Seller has met its Delivery Obligation during another True-Up Period.
5. During any Contract Year where the provisions of Appendix E are implemented
and the provisions concerning Seller s Guaranteed Output and the Annual Energy Delivery
Guarantee Analysis in this Appendix G are in effect, the aggregate amount of an Aggregate Price
Adjustment under this Agreement in any Contract Year when combined with any Net Energy
Shortfall Damages owed in the same Contract Year shall not exceed $500 000 per Contract Year.
* EXAMPLES OF ANNUAL ENERGY DELIVERY GUARANTEE ANALYSIS *
Scenario #1 Assumptions:
LDV
T AFE(Y x)
TAFE(Yx+I)
TAFE(Y X+2)
196,000 MWh
= $25.00/MWh
= 200,000 MWh
600 000 MWh
600 000 MWh
Scenario #1 Analysis:
(i)Is TAFE for Yx is 2: GO for Yx
Yes 200 000 MWh is 2: 196 000 MWh.
(ii)Seller shall be deemed to have met its energy delivery obligation for Y x, and analysis
ends pursuant to Paragraph A.1 above.
-------- --- --- ----- ----- ---- -- --- - ---- --- --- ---------- --- - ---------- --- --- --- - - ----- -- ---- ---- ---- --- ---------- -----
PAGE 3 OF 7 - ApPENDIX G TO POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
(ANALYSIS AND EXAMPLES OF ANNUAL ENERGY DELIVERY GUARANTEE)
3279401l/KHGIlOI185-0018
Scenario #2 Assumptions:
LDV
TAFE(Yx)
TAFE(YX+l)
TAFE(Yx+2)
= 196 000 MWh
= $25.00/MWh
100 000 MWh
400 000 MWh
600,000 MWh
Scenario #2 Analysis:
(i)Is TAFE for Yx is ~ GO for Yx
100 000 MWh is ~ 196 000 MWh.
(ii)Seller shall be in jeopardy of failing its energy delivery obligation for Yx and analysis
continues to determine whether Seller may be subject to NESD.
(iii)Calculate SE(Yx): GO - TAFE(Yx) = SE(Yx).
196 000 MWh - 100,000 MWh = 96 000 MWh of SE for (Y x)
If Y x at issue is a year prior to Y 18, Seller may use TUP in an attempt to meet its energy
delivery obligation for Y
(iv)Compare T AFE during TUP to DO during TUP:a) (TAFETUP) = TAFE(Yx) + TAFE(Yx+!) + TAFE(Yx+2)
(T AFETUP) = 100 000 MWh + 400 000 MWh + 600 000 MWh
(TAFETUP) = 100 000 MWh
For purposes of determining the TAFE(TUP) for a particular TUP, Seller may not use any
TAFE amounts more than once to reduce its NESD liability during the Term of this
Agreement.
(DOTUP) = GO(Yx) + GO(YX+l) + GO(YX+2).
(DOTUP) = 196 000 MWh + 196 000 MWh + 196 000 MWh
(DOTUP) = 588 000 MWh
(TAFETUP) of 100 000 MWh is ~ (DOTUP) of 588 000 MWh thus Seller is
deemed to have met its energy delivery obligation for Yx, and analysis ends
pursuant to Section c.l.
-------------------------------------------------------------------------------------------------------------------
PAGE 4 OF 7 - ApPENDIX G TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(ANALYSIS AND EXAMPLES OF ANNUAL ENERGY DELIVERY GUARANTEE)
327940/I/KHGIlOI185-0018
Scenario #3 Assumptions:
LDV
TAFE(Yx)
TAFE(YX+l)
TAFE(Yx+2)
= 196 000 MWh
= $25.00/MWh
= 120,000 MWh
= 200 000 MWh
= 200 000 MWh
Scenario #3 Analysis:
(i)
(ii)
(iii)
(iv)
(v)
Is TAFE for Yx is:::: GO for Yx
, 120 000 MWh is ~ 196 000 MWh.
Seller shall be in jeopardy of failing its energy delivery obligation for Y x and analysis
continues to determine whether Seller may be subject to NESD.
Calculate SE(Yx): GO - TAFE(Yx) = SE(Yx).
196 000 MWh -120 000 MWh = 76 000 MWh ofSE for (Yx)
If Y x at issue is a year prior to Y 18, Seller may use TUP in an attempt to meet its energy
delivery obligation for Y
Compare T AFE during TUP to DO during TUP:a) (TAFETUP) = TAFE(Yx) + TAFE(YX+l) + TAFE(Yx+2)
(TAFETUP) = 120 000 MWh + 200 000 MWh + 200 000 MWh
(TAFETUP) = 520 000 MWh
For purposes of determining the TAFE(TUP) for a particular TUP, Seller may not use any
T AFE amounts more than once to reduce its NESD liability during the Term of this
Agreement.
(DOTUP) = GO(Yx) + GO(YX+l) + GO(YX+2)
(DOTUP) = 196 000 MWh + 196 000 MWh + 196 000 MWh'
(DOTUP) = 588 000 MWh
(DOTUP) of 588 000 MWh is :::: (TAFETUP) of 520 000 MWh thus Seller is has
failed to meet its energy delivery obligation for Y x, and analysis continues to
determine the amount ofNESD that Seller must compensate Buyer.
Calculate Seller s liable for NESD:a) Calculate liability for NESD:
GO - TAFE(Yx) = SE(Yx)
196 000 MWh - 120 000 MWh = 76 000 MWh of SE for (Y x)
(DOTUP ) - (T AFETUP) = TUSTuP
588 000 MWh - 520 000 MWh = 68 000 MWh
PAGE 5 OF 7 - ApPENDIX G TO POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
(ANALYSIS AND EXAMPLES OF ANNUAL ENERGY DELIVERY GUARANTEE)
327940/I/KHG/IOI185-0018
Determine lesser of SE(Y x) and TUSTUP
000 MWh of TUSTUP 0:::: 76 000 MWH of SE for (Yx)
Thus, use 68 000 MWh for calculation of NESD for Y
Calculate amount ofNESD for Yx (NESD(Yx)):
NESD(Yx) = (lesser ofSE(Yx) or TUSTUP) X LDV
NESD(Yx) = 68 000 MWh X $25.00IMWh
NESD(Yx) = $1 700 000
Pursuant to PPA, NESD(Yx) is capped at $500 000 (plus three percent (3%)
escalation if applicable) for Yx or, subject to the $15 000 000 cap in aggregate
damages during term ofPPA.
---------------------------------------------------------------------------------------------------------------------
Scenario #4 Assumptions:GO = 196 000 MWhLDV = $25.00/ MWhT AFE(Yx) = 120 000 MWhTAFE(Yx+I) = 200 000 MWhTAFE(Yx+2) = 200 000 MWh
T AFE(Yx) used in prior TUP = 20 000 MWh
Scenario #4 Analysis:
(i)
(ii)
(iii)
(iv)
Is TAFE for Yx is 2: GO for Yx
, 120 000 MWh is 0:::: 196 000 MWh.
Seller shall be in jeopardy of failing its energy delivery obligation for Y x and analysis
continues to determine whether Seller may be subject to NESD.
Calculate SE(Y x): GO - T AFE(Y x) = SE(Y x).
196 000 MWh -120 000 MWh = 76 000 MWh ofSE for (Yx)
If Y x at issue is a year prior to Y 18, Seller may use TUP in an attempt to meet its energy
delivery obligation for Y
Compare T AFE during TUP to DO during TUP:a) (TAFETUP) = TAFE(Yx) + TAFE(Yx+I) + TAFE(Yx+2)
(TAFETUP) = 120 000 MWh + 200 000 MWh + 200 000 MWh
(TAFETUP) = 520 000 MWh
PAGE 6 OF 7 - ApPENDIX G TO POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
(ANALYSIS AND EXAMPLES OF ANNUAL ENERGY DELIVERY GUARANTEE)
327940/l/KHG/lO1185-0018
(v)
For purposes of determining the TAFE(TUP) for a particular TUP, Seller may not use any
T AFE amounts more than once to reduce its NESD liability during the Term of this
Agreement. In this Scenario #4, Seller used 20 000 MWh in prior TUP. Redo (iv)
accounting for prior use of 20 000 MWh.
Compare T AFE during TUP to DO during TUP:
(TAFETUP) = (TAFE(Yx) less 20 000MWh)+ TAFE(Yx+I) + TAFE(Yx+2)
(TAFETUP) = (120 000 MWh - 20 000MWh)+ 200 000 MWh
+ 200 000 MWh
(TAFETUP) = 500 000 MWh
(DOTUP) = GO(Yx) + GO(YX+I) + GO(YX+2)
(DOTUP) = 196 000 MWh + 196 000 MWh + 196 000 MWh
(DOTUP) = 588 000 MWh
(DOTUP) of 588 000 MWh is ::: (TAFETUP) of 500 000 MWh thus Seller is has
failed to meet its energy delivery obligation for Y x, and analysis continues to
determine the amount ofNESD that Seller must compensate Buyer.
Calculate Seller s liable for NESD:a) Calculate liability for NESD:
GO - TAFE(Yx) = SE(Yx)
196 000 MWh -100,000 MWh = 96 000 MWh ofSE for (Yx)
(DOTUP) - (TAFETUP) = TUSTUP
588 000 MWh - 500 000 MWh = 88 000 MWh
Determine lesser of SE(Y x) and TUSTUP
000 MWh ofTUSTUP-o( 96 000 MWH of SE for (Yx)
Thus, use 88 000 MWh for calculation of NESD for Y x
Calculate amount ofNESD for Yx (NESD(Yx)):
NESD(Y x) = ( lesser of SE(Y x) or TUSTUP) x LDV
NESD(Y x) = 88 000 MWh X $25.00/MWh
NESD(Y x) = $2 200 000
Pursuant to PPA, NESD(Yx) is capped at $500 000 (plus three percent (3%)
escalation if applicable) for Yx or, subject to the $15 000 000 cap in aggregate
damages during term of PP
PAGE 7 OF 7 - ApPENDIX G TO POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
(ANALYSIS AND EXAMPLES OF ANNUAL ENERGY DELIVERY GUARANTEE)
327940/1IKHGIlOI185-0018
APPENDIX H
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
COMMUNICATIONS
Idaho Power Company
1221 West Idaho Street
Boise, ID 83702
Telephone: [phone]
Horizon Wind Project General Email:
Horizon Wind0)IdahoPower.com
Mr. Karl Bokenkamp
Power Supply Manager
Telephone: [phone]
Emai1: KBokenkamp0JIdahoPower.com
Mr. Mel Chick
Generation Dispatch Manager
Telephone: [phone]
Email: MChick(~JdahoPower.com
Mr. David Churchman
Generation Scheduling Manager
Telephone: [phone]
Email: DChurchman~JdahoPower.com
Mr. Travis Prairie
Generation Scheduling
Telephone: [phone]
Email: TPrailie((l)JdahoPower.com
ApPENDIX H TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(COMMUNICA nONs)
327940/l/KHG/lOI185-0018
APPENDIX I
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
T~SFERRED ASSETS
ApPENDIX I TO POWER PURCHASE SALES AGREEMENT - TELOCASETIIPC
(TRANSFERRED ASSETS)
327940/1/KHG/IOI185-0018
APPENDIX J
POWER PURCHASE SALES AGREEMENT
BETWEEN
TELOCASET WIND POWER PARTNERS, LLC
AND
IDAHO POWER COMPANY
CONDITIONS PRECEDENT TO ALTERNATIVE PRICING
This Appendix J sets forth the conditions under which Buyer shall be able to elect to have
the Post-Operation Date Alternative Pricing set forth in Appendix A be the effective Contract
Price, or return to use of the Post Operation Date Pricing for the Contract Price as provided in
paragraph 3 ofthis Appendix J.
1. Notice. Buyer shall provide a minimum of thirty (30) days written notice to
Seller that it is electing to use the Post Operative Date Alternative Pricing pursuant to Section 5.4
of the Agreement. Buyer s notice shall be signed by an authorized representative of Buyer with
authority to bind the Buyer and shall include (1) a statement by which Buyer expressly accepts
and agrees to be bound by the terms and conditions set forth in Appendix J at paragraph 2, (2) a
statement of the date that the Contract Price for Net Energy will begin being priced under the
Post Operation Date Alternative Pricing" set forth in Appendix A and the provisions of
paragraph 2 of this Appendix J are effective, and (3) representations and warranties that Buyer
has duly authorized the execution and delivery of the election notice, that the person signing the
election notice on behalf of Buyer is authorized to execute and deliver the election notice on
behalf of Buyer, and that the election notice and paragraph 2 of this Appendix J shall be binding
and enforceable obligations of Buyer as of the effective date set forth in the election notice.
Terms and Conditions. Buyer agrees to the following terms and conditions:
Timing.The date upon which the Contract Price for Net Energy will
begin being priced under the Post-Operation Date Alternative Pricing set forth in Appendix A
and the provisions of paragraph 2 of this Appendix J are to be effective must be the first day of a
month.
2.2 Curtailment.The provisions at Section 9.2 shall be replaced with the
following language:
Payment for Certain Curtailments.If delivery ofNet Energy is curtailed as a result of (a) congestion on the
transmission system (the Parties agree that congestion does not
mean the pro rata curtailment of all firm schedules across the
PAGE 1 OF 3 - ApPENDIX J TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(CONDITIONS PRECEDENT TO ALTERNATIVE PRICING)
327940/l/KHG/lOI185-0018
restricted transmission path, unless the pro rata curtailment is the
result of an Interconnection Failure or Emergency that falls within
the scope of Section 9.2(b)), or (b) either an Interconnection
Failure or Emergency that is caused by or results from an act or
omission of Interconnection Provider or Buyer, which act or
omission is not required as a result of a Seller default or by force
majeure:
the Parties shall use commercially
reasonable efforts to determine .the quantity of Net Energy that
based on the wind data, would have been produced by the Facility
during the Curtailment Period (the Deemed Delivered Net
Energy
);
and
Buyer shall pay to Seller a sum equal to:
all amounts that Seller
would have received from Buyer under this
Agreement had the Deemed Delivered Net Energy
been produced at the Facility and delivered to the
Point of Delivery during the Curtailment Period;
plus
9.2.the Tax Benefits associated
with such Deemed Delivered Net Energy.
If the Facility is curtailed for a reason other than as provided in
Section 9.2(a) or (b), the Parties shall cooperate in good faith to
develop a commercially reasonable protocol to enable the Facility
to void curtailment in those circumstances. Deemed Delivered Net
Energy shall in any case be used for the purposes of calculating
Lost Output. On or before the fifth (5th) Business Day of any
calendar month following a month in which a curtailment
occurred, Buyer shall provide Seller with notice stating the cause
of the curtailment.
2.3 Non-operational Provisions In addition to the replacement language for
Section 9.2 (as outlined in paragraph 2.1 of this Appendix J), during the period in which the
Alternative Contract Price is effective, the following sections of the Agreement will not be
operational:
Section 1.42 ("Market Price of Energy
3.2 Section 1.65 ("Transaction Costs
3. Return to Post-Operation Date Pricing. At any time during the Term of the
Agreement when the Post-Operation Date Alternative Pricing is the effective Contract Price
PAGE 2 OF 3 - ApPENDIX J TO POWER PURCHASE SALES AGREEMENT - TELOCASET/IPC
(CONDITIONS PRECEDENT TO ALTERNA TlVE PRICING)
327940Il/KHG/lOI185-0018
Buyer shall provide a minimum of thirty (30) days written notice to Seller that it is electing to
return to the use of the Post-Operative Date Pricing. Buyer s notice under this paragraph 3 shall
be signed by an authorized representative of Buyer with authority to bind the Buyer and shall
include (1) a statement by which Buyer expressly accepts and agrees to be bound by
Sections 9.2, 1.42 (Market Price of Energy) and 1.65 (Transaction Costs) of the original
Agreement in lieu of paragraph 2 of this Appendix J, (2) a statement of the date that the Contract
Price for Net Energy will resume being priced under the "Post Operation Date Pricing" set forth
in Appendix A (which date must be the first day of a calendar month), and (3) representations
and warranties that Buyer has duly authorized the execution and delivery of the election notice
that the person signing the election notice on behalf of Buyer is authorized to execute and deliver
the election notice on behalf of Buyer, and that the election notice and the resulting return to
Post-Operative Date Pricing and Sections 9.1.42 (Market Price of Energy) and
1.65 (Transaction Costs), shall be binding and enforceable obligations of Buyer as of the
effective date set forth in the election notice.
PAGE3 OF 3 - ApPENDIX JTOPOWERPURCHASESALES AGREEMENT-TELOCASETIIPC
(CONDITIONS PRECEDENT TO ALTERNATIVE PRICING)
3279401l1KHG/JO1185-0018