20080428Application.pdf

esIDA~PORQY
An IDACORP Company
DONOVAN E. WALKER
Attorney II
Pi.. r.. I, 1
.:,,- ."... ~ L~, "
, 1" t ... '.
April 28, 2008
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise, Idaho .83720-0074
Re: Case No. IPC-E-08-09
Approval of a Firm Energy Sales Agreement
Big Sky West Dairy Digester Generation Facility
Dear Ms. Jewell:
Please find enclosed for filing an original and seven (7) copies of Idaho Power
Company's Application for the above-referenced matter.
I would appreciate it if you would return a stamped copy of this transmittal letter in
the enclosed self-addressed, stamped envelope.
~
Donovan E. Walker
BLK:sh
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise. ID 83702
DONOVAN E. WALKER, ISB # 5921
BARTON L. KLINE, ISB # 1526
Idaho Power Company
1221 West Idaho Street
P. O. Box 70
Boise, Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
Attorney for Idaho Power Company
RECEIVED
28 Pi"
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF .IDAHO POWER COMPANY FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANY
AND DF-AP#1 LLC for THE BIG SKY
WEST DAIRY DIGESTER GENERATION
FACILITY
)
) CASE NO. IPC-E-08-09
)
) APPLICATION
)
)
)
)
)
)
COMES NOW, Idaho Power Company ("Idaho Powet' or "the Company") and,
pursuant to RP 52, hereby requests that the Commission issue its Order approving a
Firm Energy Sales Agreement (the "Agreement") between Idaho Power and DF-AP #1
LLC under which DF-AP #1 LLC would sell and Idaho Power would purchase electric
energy generated by the Big Sky West Dairy Digester small power production facility
located adjacent to the Big Sky Dairy near Gooding in Gooding County, Idaho
("Facility"). A copy of the Agreement is attached hereto as Attachment 1.
This Application is based on the following:
1. DF-AP #1 LLC proposes to design, construct, install, own, operate and
maintain an anaerobic digester adjacent to the Big Sky Dairy near Gooding, ID which
APPLICATION - 1
wil provide methane gas to fuel two 750 KW reciprocating engine gensets for a total
project nameplate generation rating of 1.5 MW. The Facility wil be a qualifed small
power production facility under the applicable provisions of the Public Utilities
Regulatory Policy Act of 1978 ("PURPA").
2. On April 21, 2008, Idaho Power and DF-AP #1 LLC entered into a Firm
Energy Sales Agreement ("Agreement") pursuant to the terms and conditions of the
Commission Orders Nos. 29632, 30480 and 30415. Under the terms of that
Agreement, DF-AP #1 LLC elected to contract with Idaho Power for a 20-year term.
DF-AP #1 LLC further elected to contract with the Company using the Non-Levelized
Published Avoided Cost Rates as currently established by the Commission for energy
deliveries of less than 10 average MW.
3. This Agreement contains terms and conditions previously approved by the
Commission in other PURPA agreements including provisions for delay damages and
delay security in the event the facility does not achiever its Scheduled Operation Date.
4. Section 21 of the Agreement provides that the Agreement wil not become
effective until the Commission has approved all of the Agreement's terms and
conditions and declared that all payments Idaho Power makes to DF-AP #1 LLC for
purchases of energy wil be allowed as prudently incurred expenses for ratemaking
purposes.
5. DF-AP #1 LLC has elected November 21,2008 as the First Energy Date
and February 14, 2009 as the Scheduled Operation Date for this Facility (Appendix B).
Various requirements have been placed upon DF-AP #1 LLC as conditions to be
satisfied before Idaho Power accepts energy deliveries from this Facility. Idaho Power
APPLICATION - 2
wil monitor compliance with these initial requirements. In addition, Idaho Power wil
monitor the ongoing requirements through the full term of this Agreement. Should the
Commission approve this Agreement, Idaho Power intends to consider the Effective
Date of the Agreement to be April 21, 2008.
6. All applicable interconnection charges and monthly operation and
maintenance charges under Schedule 72 wil be assessed to DF-AP #1 LLC and
administered by Idaho Powets delivery business unit.
7. Service of pleadings, exhibits, orders and other documents relating to this
proceeding should be served on the following:
Donovan Walker
Barton L. Kline
Senior Attorney
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Randy C. Allphin
Senior Planning Administrator
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
NOW, THEREFORE, based on the foregoing, Idaho Power Company hereby
requests that the Commission issue its Order:
(1) Approving the Firm Energy Sales Agreement between Idaho Power
Company and DF-AP #1 LLC without change or condition; and
(2) Declaring that all payments for purchases of energy under the Agreement
between Idaho Power Company and DF-AP #1 LLC be allowed as prudently incurred
expenses for ratemaking purposes.
Respectfully submitted thisæfL day of April 2008.~f(j~E.Walker
Attorney for Idaho Power Company
APPLICATION - 3
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the ~ . day of April 2008, I served a true and
correct copy of the within and foregoing APPLICATION upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Scott Woodbury
Deputy Attorney General
Idaho Public Utilties Commission
472 W. Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
DF-AP #1 LLC
C/o Andgar Corporation
6920 Salashan Parkway, A-102
Ferndale, WA 98248
Attn: Contract Administration
Dean Foods Company
2515 McKinney Ave, Suite 1200
Dallas, TX 75201
Attn: Legal Department
APPLICATION, Page 4
-l Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-l Email: Scott.Woodburycæpuc.idaho.gov
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
Email:
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
Email:
4:ovr'~
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-08-09
IDAHO POWER COMPANY
ATTACHMENT NO.1
Aricle
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
FIR ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPAN
AN
DF-AP#l, LLC
TABLE OF CONTENTS
TITLE
Definitions
No Reliance on Idaho Power
Waranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment
Environmental Attributes
Facilty and Interconnection
Metering and Telemetry
Records
Operations
Indemnification and Insurance
Force Maj eure
Liabilty; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Governental Authorization
Commssion Order
Successors and Assigns
Modification
Taxes
Notices
Additional Terms and Conditions
Severability
Counterpars
Entire Agreement Signatures
Appendix A
AppendixB
Appendix C
AppendixD
4/15/2008
FIR ENERGY SALES AGREEMENT
(10 aMW or Less)
Project Name: Big Sky West Dair Digester
Project Number: 31616100
TilS AGREEMENT, entered into on this ~ day of /il)~, L,2008 between
DF-AP #1, a Limited Liability company (Seller), and IDAHO POWER COMPAN, an Idaho
corporation (Idaho Power), hereinafter sometimes referred to collectively as "Parties" or individually as
"Party."
WISSETH:
WHEREAS, Seller wil design, construct, own, maintain and operate an electric generation
facility; and
WHEREAS, Seller wishes to sell, and Idaho Power is wiling to purchase, firm electric energy
produced by the Seller's Facility.
THEREFORE, In consideration of the mutual covenants and agreements hereinafter set forth, the
Paries agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreement and the appendices attached hereto, the following terms
shall have the following meanings:
1.1 "Base Energy" - Monthly Net Energy less than 110% of the monthly Net Energy Amount as
specified in paragraph 6.2 of this Agreement.
1.2 "Commssion" - The Idaho Public Utilties Commssion.
1.3 "Contract Year" - The period commencing each calendar year on the same calendar date as the
Operation Date and ending 364 days thereafter.
1.4 "Delay Liquidated Damages" - Damages payable to Idaho Power as calculated in paragraph 5.3,
5.4,5.5 and 5.6.
1.5 "Delay Period" - All days past the Scheduled Operation Date until the Seller's Facility achieves
the Operation Date. This Delay Period shall not exceed 90 days.
- 1-
4/15/2008
1.6 "Delay Price" - The curent month's Mid-Columbia Market Energy Cost minus the curent
month's All Hours Energy Price specified in paragraph 7.3 of this Agreement. If this calculation
results in a value less than 0, the result of this calculation wil be O.
1.7 "Designated Dispatch Facility" - Idaho Power's Systems Operations Group, or any subsequent
group designated by Idaho Power.
1.8 "Facility" - That electric generation facility described in Appendix B of this Agreement.
1.9 "First Energy Date" - The day commencing at 0001 hours, Mountain Time, following the day that
Seller has satisfied the requirements of Aricle IV and the Seller begins delivering energy to
Idalo Power's system at the Point of Delivery.
1.10 "Heavy Load Hours" - The daily hours beginng at 7 am, ending at i i pm Mountain Time, (16
hours) excluding all hours on all Sundays, New Years Day, Memorial Day, Fourh of July, Labor
Day, Thankgiving and Chrstmas.
1.11 "Inadvertent Energy" - Electric energy Seller does not intend to generate. Inadvertent energy is
more paricularly described in paragraph 7.5 of this Agreement.
1.12 "Interconnection Facilities" - All equipment specified in Schedule 72.
1.13 "Initial Capacity Determnation" - The process by which Idaho Power confirs that under
norml or average design conditions the Facilty wil generate at no more than 10 average MW
per month and is therefore eligible to be paid the published rates in accordance with Commssion
Order No. 29632.
i .14 "Light Load Hours" - The daily hours beginnng at 11 pm, ending at 7 am Mountain Time (8
hours), plus all other hour on all Sundays, New Years Day, Memorial Day, Fourh of July, Labor
Day, Thanksgiving and Chrstmas.
1.15 "Losses" - The loss of electrical energy expressed in kilowatt hour (kWh) occurng as a result
of the transformation and transmission of energy between the point where the Facility's energy is
metered and the point the Facility's energy is delivered to the Idaho Power electrical system. The
loss calculation formula wil be as specified in Appendix B of this Agreement.
- 2-
4/15/2008
1.16 "Market Energy Cost" - Eighty-five percent (85%) of the monthly weighted average of the daily
on-peak and off-peak Dow Jones Mid-Columbia Index (Dow Jones Mid-C Index) prices for non-
firm energy. If the Dow Jones Mid-Columbia Index price is discontinued by the reporting agency,
both Paries wil mutually agree upon a replacement index, which is similar to the Dow Jones
Mid-Columbia Index. The selected replacement index wil be consistent with other similar
agreements and a commonly used index by the electrical industry.
1.1 7 "Material Breach" - A Default (paragraph 19.2.1) subject to paragraph 19.2.2.
1.18 "Maximum Capacity Amount" - The maximum capacity (MW) of the Facility wil be as
specified in Appendix B of this Agreement.
i. i 9 "Metering Equipment" - All equipment specified in Schedule 72, this Agreement and any
additional equipment specified in Appendix B required to measure, record and telemeter power
flows between the Seller's electric generation plant and Idaho Power's system.
1.20 "Mid- Columbia Market Energy Cost" - The monthly weighted average of the daily on-peak and
off-peak Dow Jones Mid-Columbia Index (Dow Jones Mid-C Index) prices for non-firm energy.
If the Dow Jones Mid-Columbia Index price is discontinued by the reporting agency, both Paries
wil mutually agree upon a replacement index, which is similar to the Dow Jones Mid-Columbia
Index. The selected replacement index wil be consistent with other similar agreements and a
commonly used index by the electrical industry.
1.21 "Net Energy" - All of the electric energy produced by the Facility, less Station Use, less Losses,
expressed in kilowatt hours (kWh). Seller commts to deliver all Net Energy to Idaho Power at
the Point of Delivery for the full term of the Agreement. Net Energy does not include Inadvertent
Energy.
1.22 "Operation Date" - The day commencing at 0001 hours, Mountain Time, following the day that
all requirements of paragraph 5.2 have been completed.
1.23 "Point of Delivery" - The location specified in Appendix B, where Idaho Power's and the
Seller's electrical facilities are interconnected.
- 3-
4/15/2008
1.24 "Prudent Electrical Practices" - Those practices, methods and equipment that are commonly and
ordinarily used in electrical engineering and operations to operate electric equipment lawfully,
safely, dependably, efficiently and economically.
i .25 "Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates
achieving the Operation Date.
1.26 "Schedule 72" - Idaho Power's Tarff No 101, Schedule 72 or its successor schedules as
approved by the Commssion.
1.27 "Season" - The three periods identified in paragraph 6.2.1 of this Agreement.
i .28 "Special Facilities" - Additions or alterations of transmission and/or distribution lines and
transformers as described in Schedule 72.
1.29 "Station Use" - Electric energy that is used to operate equipment that is auxilar or otherwise
related to the production of electricity by the Facility.
1.30 "Surlus Energy" - Is (1) Net Energy produced by the Seller's Facilty and delivered to the Idaho
Power electrical system durng the month which exceeds 110% of the monthly Net Energy
Amount for the corresponding month specified in paragraph 6.2. or (2) If the Net Energy
produced by the Seller's Facilty and delivered to the Idaho Power electrical system durng the
month is less than 90% of the monthly Net Energy Amount for the correspondig month
specified in paragraph 6.2, then all Net Energy delivered by the Facility to the Idaho Power
electrical system for that given month or (3) All Net Energy produced by the Seller's Facilty and
delivered by the Facilty to the Idaho Power electrical system prior to the Operation Date.
1.31 "Total Cost of the Facilty" - The total cost of structures, equipment and appurenances.
ARTICLE II: NO RELIACE ON IDAHO POWER
2.1 Seller Independent Investigation - Seller warrants and represents to Idaho Power that in entering
into this Agreement and the undertakng by Seller of the obligations set forth herein, Seller has
- 4-
4/15/2008
investigated and determned that it is capable of performng hereunder and has not relied upon
the advice, experience or expertise of Idaho Power in connection with the transactions
contemplated by this Agreement.
2.2 Seller Independent Experts - All professionals or expers including, but not limted to, engineers,
attorneys or accountants, that Seller may have consulted or relied on in undertaking the
transactions contemplated by this Agreement have been solely those of Seller.
ARTICLE II: WARTIES
3.1 No Warranty by Idaho Power - Any review, acceptance or failure to review Seller's design,
specifications, equipment or facilities shall not be an endorsement or a confiration by Idaho
Power and Idaho Power makes no warties, expressed or implied, regarding any aspect of
Seller's design, specifications, equipment or facilities, including, but not limited to, safety,
durability, reliability, strength, capacity, adequacy or economic feasibilty.
3.2 Qualifyg Facility Status - Seller warants that the Facility is a "Qualifying Facilty," as that term
is used and defined in 18 CFR 292.201 et seq. After initial qualification, Seller wil take such
steps as may be required to maintain the Facility's Qualifyng Facilty status durng the ter of
this Agreement and Seller's failure to maintain Qualifying Facilty status wil be a Material
Breach ofthis Agreement. Idaho Power reserves the right to review the Seller's Qulifying
Facility status and associated support and compliance documents at anytime durg the term of
this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
4.1 Prior to the First Energy Date and as a condition of Idaho Power's acceptance of deliveries of
energy from the Seller, Seller shall:
4.1.1 Submit proof to Idaho Power that all licenses, permts or approvals necessar for Seller's
- 5-
4/15/2008
operations have been obtained from applicable federal, state or local authorities,
including, but not limted to, evidence of compliance with Subpart B, 18 CFR 292.201 et
seq. and a Qualifyg Facilty certificate.
4.1.2 Opinon of Counsel - Submit to Idaho Power an Opinon Letter signed by an attorney
admtted to practice and in good standing in the State of Idaho providing an
opinion that Seller's licenses, permts and approvals as set forth in paragraph 4.1.1
above are legally and validly issued, are held in the name of the Seller and, based on
a reasonable independent review, counsel is of the opinion that Seller is in substantial
compliance with said permts as of the date of the Opinion Letter. The Opinion Letter
wil be in a form acceptable to Idaho Power and wil acknowledge that the attorney
rendering the opinion understands that Idaho Power is relying on said opinon. Idaho
Power's acceptance of the form wil not be uneasonably withheld. The Opinon Letter
wil be governed by and shall be interpreted in accordance with the legal opinion accord
of the American Bar Association Section of Business Law (1991).
4. 1.3 Intial Capacity Determnation - Submit to Idaho Power such data as Idaho Power may
reasonably require to perform the Intial Capacity Determnation. Such data wil include
but not be limited to, equipment specifications, prime mover data, resource
characteristics, normal and/or average operating design conditions and Station Use data.
Upon receipt of this inormation, Idaho Power wil review the provided data and if
necessar, request additional data to complete the Intial Capacity Determnation within a
reasonable time.
4.1.3.1 If the Maximum Capacity specified in Appendix B of this Agreement and the
cumulative manufactue nameplate rating of the individual generation unts at
this Facility is less than 10 MW, the Seller shall submit detailed, maufacturer,
verifiable data of the nameplate ratings of the actual individual generation unts
to be installed at this Facility. Idaho Power wil review this provided data. Upon
verification by Idaho Power that the data provided establishes the combined
- 6-
4/15/2008
nameplate rating of the generation units to be installed at this Facility is less than
10 MW, it wil be deemed that the Seller has satisfied the Intial Capacity
Determnation for this Facility.
4.1.4 Engineer's Certifications - Submit an executed Engineer's Certification of Design &
Construction Adequacy and an Engineer's Certification of Operations and Maintenance
(O&M) Policy as described in Commssion Order No. 21690. These certificates wil be
in the form specified in Appendix C but may be modified to the extent necessar to
recognze the different engieering disciplines providing the certificates.
4.1.5 Insurance - Submit written proof to Idaho Power of all insurance required in Aricle XII.
4.1.6 Interconnection - Provide written confiration from Idaho Power's delivery business
unit that Seller has satisfied all interconnection requirements.
4.1.7 Written Acceptance - Request and obtain written confition from Idaho Power that all
conditions to acceptance of energy have been fufilled. Such wrtten confirmtion shall be
provided within a commercially reasonable time following the Seller's request and wil
not be uneasonably withheld by Idaho Power.
ARTICLE V: TERM AN OPERATION DATE
5.1 Term - Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective
on the date first written and shall continue in full force and effect for a period of twenty (20)
Contract Years from the Operation Date.
5.2 Operation Date - The Operation Date may occur only after the Facility has achieved all of the
following:
a) Achieved the First Energy Date.
b) Commssion approval of this Agreement in a form acceptable to Idaho Power has
been received.
c) Seller has demonstrated to Idaho Power's satisfaction that the Facility is complete and
able to provide energy in a consistent, reliable and safe manner.
- 7-
4/15/2008
d) Seller has requested an Operation Date from Idaho Power in a written format.
e) Seller has received written confiration from Idaho Power of the Operation Date.
This confirmtion wil not be unreasonably withheld by Idaho Power.
5.3 Seller shall cause the Facility to achieve the Operation Date on or before the Scheduled Operation
Date. If the Operation Date occurs after the Scheduled Operation Date, Seller shall pay Idaho
Power Delay Liquidated Damages. Delay Liquidated Damages wil be calculated monthly as
follows:
Delay Liquidated Damages are equal to ((Curent month's Intial Year Net Energy
Amount as specified in paragraph 6.2.1 divided by the number of days in the curent
month) multiplied by the current months Delay Period) multiplied by the curent
months Delay Price.
5.4 Delay Liquidated Damages wil be calculated for a maximum of ninety (90) days past the
Scheduled Operation Date. If Seller fails to achieve the Operation Date withi ninety (90) days of
the Scheduled Operation Date, Idaho Power may termnate this Agreement.
5.5 Seller shall pay Idaho Power any calculated Delay Liquidated Damges within 7 days of when
Idaho Power calculates and presents any Delay Liquidated Damages bilings to the Seller.
Seller's failure to pay these damages within the specified time wil be a Material Breach of this
Agreement.
5.6 The Paries agree that the damages Idaho Power would incur due to delay in the Facility
achieving the Operation Date on or before the Scheduled Operation Date would be diffcult or
impossible to predict with certainty, and that the Delay Liquidated Damges are an appropriate
approximtion of such daages.
5.7 Within thiy (30) days of the date of a Commssion Order as specified in Aricle XXI approving
this Agreement; Seller shall post liquid securty ("Delay Securty") in a form as described in
Appendix D equal to or exceeding the amount calculated in paragraph 5.7.1.
5.7.1 Idaho Power shall calculate the amount of Delay Securty by multiplying a good faith
forecast of each applicable monthly Mid-Columbia Market Energy Cost less the All
- 8-
4/15/2008
Hours Energy Price for each month of the potential 90 day (3 month) delay period, times
the applicable month's Intial Year Monthly Net Energy Amounts as specified in
paragraph 6.2.1 of the Agreement. If the sum of the 3 month's individual values results
in a total of less than $10,000 the Delay Securty wil be $10,000, if this calculation
results in a total of greater than $200,000 the Delay Securty wil be $200,000.
5.7. i. i If the Seller provides Idaho Power with certification that a generation
interconnection agreement specifying a schedule that wil enable the Facility to
achieve the Operation Date no later than the Scheduled Operation Date has (1)
been completed and the Seller has paid all required interconnection costs or (2) a
generation interconnection agreement is substantially complete and all material
costs of interconnection have been identified and agreed upon and (3) the Seller
is in compliance with all terms and conditions of the generation interconnection
agreement, the Delay Securty calculated in accordace with paragraph 5.7.1 wil
be reduced by fifty percent (50%).
5.7. 1.2 If the Seller has received a reduction in the calculated Delay Security as specified
in paragraph 5.7.1.1 and subsequently (1) at Seller's request, the genertion
interconnection agreement specified in paragraph 5.7.1. i is revised and as a
result the Facility wil not achieve its Operation Date by the Scheduled Operation
Date or (2) if the Seller does not maintain compliance with the generation
interconnection agreement, the full amount of the Delay Securty as calculated in
paragraph 5.7.1 wil be subject to reinstatement and wil be due and owing withi
5 business days from the date Idaho Power requests reinstatement. Failure to
timely reinstate the Delay Securty wil be a Material Breach of this Agreement.
5.7.2 Idaho Power shall release all securty posted hereunder after all calculated Delay
Liquidated Damages are paid in full to Idaho Power and the earlier of (1) 30 days after
the Operation Date has been achieved or (2) 120 days after the Scheduled Operation
Date.
- 9-
4/15/2008
ARTICLE VI: PURCHASE AN SALE OF NET ENERGY
6.1 Delivery and Acceptance of Net Energy - Except when either Pary's performance is excused as
provided herein, Idaho Power wil purchase and Seller wil sell all of the Net Energy to Idaho
Power at the Point of Delivery. All Inadvertent Energy produced by the Facility wil also be
delivered by the Seller to Idaho Power at the Point of Delivery. At no time wil the total amount .
of Net Energy and/or Inadvertent Energy produced by the Facility and delivered by the Seller to
the Point of Delivery exceed the Maximum Capacity Amount.
6.2 Net Energy Amounts - Seller intends to produce and deliver Net Energy in the following monthly
amounts:
6.2.1 Intial Year Monthly Net Energy Amounts:
Month kWh
Season 1
March
April
May
789,000
789,000
789,000
Season 2
July
August
November
December
789,000
789,000
789,000
789,000
Season 3
June
September
October
Januar
Februar
789,000
789,000
789,000
789,000
789,000
6.2.2 Ongoing Monthly Net Energy Amounts - Seller shall initially provide Idaho Power with
one year of monthly generation estimates (Intial Year Monthy Net Energy Amounts)
and beginnng at the end of month nine and every three months thereafter provide Idaho
Power with an additional three months of forward generation estimates. This information
wil be provided to Idaho Power by written notice in accordance with paragraph 25.1, no
later than 5:00 PM of the 5th day following the end of the previous month. If the Seller
- 10-
4/15/2008
does not provide the Ongoing Monthly Net Energy Amounts in a timely manner, Idaho
Power wil use the most recent 3 months of the Intial Year Monthly Net Energy
Amounts specified in paragraph 6.2.1 for the next 3 months of monthly Net Energy
amounts.
6.2.3 Seller's Adjustment of Net Energy Amount-
6.2.3.1 No later than the Operation Date, by written notice given to Idaho Power in
accordance with paragraph 25.1, the Seller may revise all of the previously
provided Intial Year Monthly Net Energy Amounts.
6.2.3.2 Beginng with the end of the 3rd month after the Operation Date and at the end
of every third month thereafter: (I) the Seller may not revise the immediate next
three months of previously provided Net Energy Amounts, (2) but by written
notice given to Idaho Power in accordace with paragraph 25.1, no later than
5 :00 PM of the 5th day following the end of the previous month, the Seller may
revise all other previously provided Net Energy Amounts. Failure to provide
timely written notice of changed amounts wil be deemed to be an election of no
change.
6.2.4 Idaho Power Adjustment of Net Energy Amount - If Idaho Power is excused from
accepting the Seller's Net Energy as specified in paragraph 12.2.1 or if the Seller declares
a Suspension of Energy Deliveries as specified in paragraph 12.3.1 and the Seller's
declared Suspension of Energy Deliveries is accepted by Idaho Power, the Net Energy
Amount as specified in paragraph 6.2 for the specific month in which the reduction or
suspension under paragraph 12.2.1 or 12.3.1 occurs wil be reduced in accordance with
the following:
- 11-
4/15/2008
Where:
NEA Curent Month's Net Energy Amount (Paragraph 6.2)
SGU a.) If Idaho Power is excused from accepting the Seller's Net
Energy as specified in paragraph 12.2.1 this value wil be
equal to the percentage of curtailment as specified by
Idaho Power multiplied by the TGU as defined below.
b.) If the Seller declares a Suspension of Energy Deliveries as
specified in paragraph 12.3.1 this value wil be the sum of
the individual generation units size ratings as specified in
Appendix B that are impacted by the circumstances
causing the Seller to declare a Suspension of Energy
Deliveries.
TGU Sum of all of the individual generator ratings of the generation
units at this Facility as specified in Appendix B of this
agreement.
TH
Actual hours the Facilty's Net Energy deliveries were either
reduced or suspended under paragraph 12.2.1 or 12.3.1
Actual total hours in the curent month
RSH
Resulting formula being:Adjusted ( (
Net Energy = NEA -
Amount
~~~ X NEA) X(~:) )
This Adjusted Net Energy Amount wil be used in applicable Surlus Energy calculations for
only the specific month in which Idaho Power was excused from accepting the Seller's Net
Energy or the Seller declared a Suspension of Energy.
6.3 Unless excused by an event of Force Majeure, Seller's failure to deliver Net Energy in any
Contract Year in an amount equal to at least ten percent (10%) of the sum of the Intial Year Net
Energy Amounts as specified in paragraph 6.2 shall constitute an event of default.
ARTICLE VII: PURCHASE PRICE AN METHOD OF PAYMENT
7.1 Base Energy Heavy Load Puchase Price - For all Base Energy received durg Heavy Load
Hours, Idaho Power wil pay the non-levelized energy price in accordance with Commssion
- 12-
4/15/2008
Order 30480, adjusted in accordance with Commssion Order 30415 for Heavy Load Hour
Energy deliveries with seasonalization factors applied:
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
Season 1 - (73.50 %)
MilslkWh
51.49
49.91
48.16
46.34
45.87
46.57
46.90
48.45
50.31
52.10
54.23
56.01
57.93
59.83
61.80
63.82
66.00
68.17
70.58
73.17
75.75
Season 2 - (120.00 %)
Mils/kWh
84.07
81.49
78.63
75.65
74.89
76.04
76.58
79.10
82.13
85.06
88.54
91.45
94.57
97.68
100.89
104.20
107.76
111.30
115.24
119.45
123.67
Season 3 - (100.00 %)
MilslkWh
70.06
67.91
65.52
63.04
62.41
63.36
63.81
65.91
68.44
70.88
73.78
76.21
78.81
81.40
84.07
86.84
89.80
92.75
96.03
99.54
103.06
7.2 Base Energy Light Load Purchase Price - For all Base Energy received durg Light Load Hours,
Idaho Power wil pay the non-levelized energy price in accordance with Commssion Order
30408 and adjusted in accordance with Commssion Order 30415 for Light Load Hour Energy
deliveries with seasonalization factors applied:
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
Season 1 - (73.50 %)
MilslkWh
46.14
44.56
42.81
40.98
40.52
41.22
41.55
43.10
44.96
- 13-
Season 2 - (120.00 %)
MilslkWh
75.33
72.76
69.89
66.91
66.15
67.30
67.84
70.36
73.40
Season 3 - (100.00 %)
MilslkWh
62.78
60.63
58.24
55.76
55.13
56.08
56.53
58.63
61.16
4/15/2008
2017 46.75 76.32 63.60
2018 48.88 79.81 66.50
2019 50.66 82.71 68.93
2020 52.58 85.84 71.53
2021 54.48 88.95 74.12
2022 56.44 92.15 76.79
2023 58.47 95.47 79.56
2024 60.65 99.02 82.52
2025 62.82 102.56 85.47
2026 65.23 106.50 88.75
2027 67.81 110.72 92.26
2028 70.40 114.93 95.78
7.3 All Hours Energy Price - The price to be used in the calculation of the Surlus Energy Price and
Delay Damage Price shall be the non-levelized energy price in accordance with Commssion
Order 30408 with seasonalization factors applied:
Season 1 - (73.50 %)Season 2 - (120.00 %)Season 3 - (100.00 %)
Year Mils/kWh Mils/kWh Mils/kWh
2008 49.11 80.18 66.82
2009 47.53 77.61 64.67
2010 45.78 74.74 62.28
2011 43.95 71.76 59.80
2012 43.49 71.00 59.17
2013 44.19 72.15 60.12
2014 44.52 72.69 60.57
2015 46.07 75.21 62.67
2016 47.93 78.25 65.21
2017 49.72 81.17 67.64
2018 51.85 84.65 70.55
2019 53.63 87.56 72.97
2020 55.55 90.69 75.57
2021 57.45 93.79 78.16
2022 59.41 97.00 80.84
2023 61.44 100.32 83.60
2024 63.62 103.87 86.56
2025 65.79 107.41 89.51
2026 68.20 111.35 92.79
2027 70.78 115.57 96.31
2028 73.37 119.78 99.82
7.4 Surplus Energy Price - For all Surlus Energy, Idaho Power shall pay to the Seller the curent
month's Market Energy Cost or the All Hour Energy Price specified in paragraph 7.3,
- 14-
4/15/2008
whichever is lower.
7.5 Inadvertent Energy-
7.5.1 Inadvertent Energy is electric energy produced by the Facility, expressed in kWh,
which the Seller delivers to Idaho Power at the Point of Delivery that exceeds 10,000
kW multiplied by the hours in the specific month in which the energy was delivered.
(For example Januar contains 744 hours. 744 hours times 10,000 kW = 7,440,000
kWh. Energy delivered in Januar in excess of 7,440, 000 kWh in this example
would be Inadvertent Energy.)
7.5.2 Although Seller intends to design and operate the Facility to generate no more than
10 average MW and therefore does not intend to generate Inadvertent Energy, Idaho
Power wil accept Inadvertent Energy that does not exceed the Maximum Capacity
Amount but wil not purchase or pay for Inadvertent Energy.
7.6 Payment Due Date - Energy payments to the Seller wil be disbursed within 30 days of the date
which Idaho Power receives and accepts the documentation of the monthly Net Energy actually
delivered to Idaho Power as specified in Appendix A.
7.7 Continuing Jurisdiction of the Commssion This Agreement is a special contract and, as such, the
rates, terms and conditions contained in this Agreement wil be construed in accordance with
Idaho Power Company v. Idaho Public Utilties Commssion and Afton Energy, Inc., 107 Idaho
781, 693 P.2d 427 (1984), Idaho Power Company v. Idaho Public Utilties Commssion, 107
Idaho 1122,695 P.2d i 261 (1985), Afton Energy, Inc, v. Idaho Power Company, 111 Idao 925,
729 P.2d 400 (1986), Section 210 of the Public Utilties Regulatory Policies Act of 1978 and 18
CFR §292.303-308
ARTICLE VII: ENVIRONMENTAL ATTRIUTES
8.1 Idaho Power waives any claim to ownership of Environmental Attributes. Environmental
Attributes include, but are not limted to, Green Tags, Green Certificates, Renewable Energy
Credits (RECs) and Tradable Renewable Cerificates (TRCs) directly associated with the
- 15-
4/15/2008
production of energy from the Seller's Facility.
ARTICLE IX: FACILITY AN INTERCONNCTION
9.1 Design of Facility - Seller wil design, construct, install, own, operate and maintain the Facilty
and any Seller-owned Interconnection Facilties so as to allow safe and reliable generation and
delivery of Net Energy and Inadvertent Energy to the Idaho Power Point of Delivery for the full
term of the Agreement.
ARTICLE X: METERIG AN TELEMETRY
10.1 Metering and Telemetry - Idaho Power shall, for the account of Seller, provide, install, and
maintain Metering Equipment to be located at a mutually agreed upon location to record and
measure power flows to Idaho Power in accordance with Schedule 72. The Metering Equipment
wil be at the location and the type required to measure, record and report the Facilty's Net
Energy, Station Use, Inadvertent Energy and maximum energy deliveries (kW) in a maer to
provide Idaho Power adequate energy measurement data to admnister this Agreement and to
integrate this Facility's energy production into the Idaho Power electrical system.
ARTICLE XI - RECORDS
11.1 Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate total generation, Net Energy, Station Use, Inadvertent Energy
and maximum generation (kW) records in a form and content recommended by Idaho Power.
i 1.2 Inspection - Either Party, after reasonable notice to the other Pary, shall have the right, durg
normal business hours, to inspect and audit any or all generation, Net Energy, Station Use,
Inadvertent Energy and maximum generation (kW) records pertaining to the Seller's Facility.
- 16-
4/15/2008
ARTICLE XII: OPERATIONS
12.1 Communcations - Idaho Power and the Seller shall maintain appropriate operating
communcations through Idaho Power's Designated Dispatch Facility in accordance with
Appendix A of this Agreement.
12 .2 Energy Acceptance -
12.2.1 Idaho Power shall be excused from accepting and paying for Net Energy or accepting
Inadvertent Energy produced by the Facility and delivered by the Seller to the Point of
Delivery, if it is prevented from doing so by an event of Force Majeure, or temporar
disconnection of the Facility in accordance with Schedule 72. If, for reasons other than
an event of Force Majeure, a temporary disconnection under Schedule 72 exceeds twenty
(20) days, beginng with the twenty-first day of such interrption, curailment or
reduction, Seller wil be deemed to be delivering Net Energy at a rate equivalent to the
pro rata daily average of the amounts specified for the applicable month in paragraph 6.2.
Idaho Power wil notify Seller when the interrption, curailment or reduction is
termnated.
12.2.2 If, in the reasonable opinon of Idaho Power, Seller's operation of the Facility or
Interconnection Facilities is unsafe or may otherwise adversely affect Idaho Power's
equipment, personnel or servce to its customers, Idaho Power may temporarly
disconnect the Facility from Idaho Power's transmission/distribution system as specified
within Schedule 72 or take such other reasonable steps as Idao Power deem
appropriate.
12.2.3 Under no circumstances wil the Seller deliver Net Energy and/or Inadvertent Energy
from the Facilty to the Point of Delivery in an amount that exceeds the Maximum
Capacity Amount. Seller's failure to limt deliveries to the Maximum Capacity Amount
wil be a Material Breach of this Agreement.
12.3 Seller Declared Suspension of Energy Deliveries
12.3.1 If the Seller's Facility experiences a forced outage due to equipment failure which is not
- 17-
4/15/2008
caused by an event of Force Majeure or by neglect, disrepair or lack of adequate
preventative maintenance of the Seller's Facility, Seller may, after giving notice as
provided in paragraph 12.3.2 below, temporarily suspend all deliveries of Net Energy to
Idaho Power from the Facility or from individual generation unit(s) withi the Facility
impacted by the forced outage for a period of not less than 48 hours to correct the forced
outage condition ("Declared Suspension of Energy Deliveres"). The Seller's Declared
Suspension of Energy Deliveries wil begin at the start of the next full hour following the
Seller's telephone notification as specified in paragraph 12.3.2 and wil continue for the
time as specified (not less than 48 hours) in the written notification provided by the
Seller. In the month(s) in which the Declared Suspension of Energy occured, the Net
Energy Amount wil be adjusted as specified in paragraph 6.2.4.
12.3.2 If the Seller desires to initiate a Declared Suspension of Energy Deliveries as provided in
paragraph 12.3.1, the Seller wil notify the Designated Dispatch Facility by telephone.
The beginning hour of the Declared Suspension of Energy Deliveries wil be at the
earliest the next full hour after making telephone contact with Idaho Power. The Seller
wil, withn 24 hours after the telephone contact, provide Idaho Power a written notice in
accordance with Aricle XXV that wil contain the beginnng hour and duration of the
Declared Suspension of Energy Deliveries and a description of the conditions that caused
the Seller to intiate a Declared Suspension of Energy Deliveries. Idaho Power wil
review the documentation provided by the Seller to determe Idaho Power's acceptance
of the described forced outage as qualifying for a Declared Suspension of Energy
Deliveries as specified in paragraph 12.3.1. Idaho Power's acceptace of the Seller's
forced outage as an acceptable forced outage wil be based upon the clear documentation
provided by the Seller that the forced outage is not due do an event of Force Majeure or
by neglect, disrepair or lack of adequate preventative maintenance of the Seller's Facilty.
12.4 Scheduled Maintenance - On or before Januar 31 of each calendar year, Seller shall submit a
written proposed maintenance schedule of signficant Facility maintenance for that calendar year
- 18-
4/15/2008
and Idaho Power and Seller shall mutually agree as to the acceptability of the proposed schedule.
The Paries determnation as to the acceptability of the Seller's timetable for scheduled
maintenance wil take into consideration Prudent Electrical Practices, Idaho Power system
requirements and the Seller's preferred schedule. Neither Pary shall uneasonably withhold
acceptance of the proposed maintenance schedule.
12.5 Maintenance Coordination - The Seller and Idaho Power shall, to the extent practical, coordinate
their respective line and Facility maintenance schedules such that they occur simultaneously.
12.6 Contact Prior to Curailment - Idaho Power wil make a reasonable attempt to contact the Seller
prior to exercising its rights to interrpt interconnection or curail deliveries from the Seller's
Facilty. Seller understands that in the case of emergency circumtances, real time operations of
the electrical system, and/or unplaned events Idaho Power may not be able to provide notice to
the Seller prior to interrption, curailment, or reduction of electrical energy deliveries to Idaho
Power.
ARTICLE XII: INEMNIFICATION AN INSURCE
13.1 Indemnfication - Each Party shall agree to hold haress and to indemfy the other Party, its
officers, agents, affiiates, subsidiares, parent company and employees against all loss, damge,
expense and liability to third persons for injur to or death of person or injur to property,
proximately caused by the indemnfying Pary's construction, ownership, operation or
maintenance of, or by failure of, any of such Party's works or facilties used in connection with
this Agreement. The indemnfyng Pary shall, on the other Pary's request, defend any suit
asserting a claim covered by this indemnty. The indemnfyng Pary shall pay all costs, including
reasonable attorney fees that may be incured by the other Pary in enforcing this indemnty.
13.2 Insurance - Durng the term of this Agreement, Seller shall secure and continuously car the
following insurance coverage:
13.2.1 Comprehensive General Liabilty Insurance for both bodily injur and property damage
with limits equal to $1,000,000, each occurence, combined single limit. The deductible
- 19-
4/15/2008
for such insurance shall be consistent with curent Insurance Industry Utility practices for
similar property.
13.2.2 The above insurance coverage shall be placed with an insurance company with an A.M.
Best Company rating of A- or better and shall include:
(a) An endorsement namig Idaho Power as an additional insured and loss payee as
applicable; and
(b) A provision stating that such policy shall not be canceled or the limts of liabilty
reduced without sixty (60) days' prior written notice to Idaho Power.
13.3 Seller to Provide Certificate of Insurance - As required in paragraph 4.1.5 herein and anually
thereafter, Seller shall fuish Idaho Power a certificate of insurance, together with the
endorsements required therein, evidencing the coverage as set forth above.
13.4 Seller to Notify Idao Power of Loss of Coverage - If the insurance coverage required by
paragraph 13.2 shall lapse for any reason, Seller wil imediately notify Idaho Power in writing.
The notice wil advise Idaho Power of the specific reason for the lapse and the steps Seller is
takng to reinstate the coverage. Failure to provide this notice and to expeditiously reinstate or
replace the coverage wil constitute a Material Breach of this Agreement.
ARTICLE XIV: FORCE MAJEUR
14.1 As used in this Agreement, "Force Majeure" or "an event of Force Majeure" means any cause
beyond the control of the Seller or of Idaho Power which, despite the exercise of due dilgence,
such Pary is unable to prevent or overcome. Force Majeure includes, but is not limted to, acts of
God, fire, flood, storms, wars, hostilties, civil strife, stries and other labor distubances,
earthquakes, fires, lightning, epidemics, sabotage, or changes in law or regulation occurng after
the Operation Date, which, by the exercise of reasonable foresight such party could not
reasonably have been expected to avoid and by the exercise of due diligence, it shall be unble to
overcome. If either Party is rendered wholly or in part unable to perform its obligations under
this Agreement because of an event of Force Majeure, both Parties shall be excused from
- 20-
4/15/2008
whatever pedormnce is affected by the event of Force Majeure, provided that:
(l) The non-performng Party shall, as soon as is reasonably possible after the
occurence of the Force Majeure, give the other Party written notice describing
the particulars of the occurence.
(2) The suspension of performance shall be of no greater scope and of no longer
duration than is required by the event of Force Majeure.
(3) No obligations of either Pary which arose before the occurence causing the
suspension of performance and which could and should have been fully
pedormed before such occurence shall be excused as a result of such
occurence.
ARTICLE XV: LIAILITY; DEDICATION
15.1 Nothing in this Agreement shall be construed to create any duty to, any standard of care with
reference to, or any liabilty to any person not a Pary to this Agreement. No undertakg by one
Pary to the other under any provision of this Agreement shall constitute the dedication of that
Party's system or any portion thereof to the other Pary or to the public or affect the status of
Idaho Power as an independent public utility corporation or Seller as an independent individual or
entity.
ARTICLE XVI: SEVERA OBLIGATIONS
16.1 Except where specifically stated in this Agreement to be otherwise, the duties, obligations and
liabilties of the Paries are intended to be several and not joint or collective. Nothing contained
in this Agreement shall ever be construed to create an association, trst, parnership or joint
venture or impose a trust or parnership duty, obligation or liability on or with regard to either
Party. Each Pary shall be individually and severally liable for its own obligations under this
Agreement.
- 21-
4/15/2008
ARTICLE XVII: WAIER
17.1 Any waiver at any time by either Pary 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 XVII: CHOICE OF LAWS AN VENU
18.1 This Agreement shall be construed and interreted in accordace with the laws of the State of
Idaho without reference to its choice of law provisions.
18.2 Venue for any litigation arsing out of or related to this Agreement wil lie in the District Cour of
the Fourh Judicial District ofIdaho in and for the County of Ada.
ARTICLE XIX: DISPUTES AN DEFAULT
19.1 Disputes - All disputes related to or arising under this Agreement, including, but not limited to,
the interretation of the terms and conditions of ths Agreement, wil be submitted to the
Commssion for resolution.
19.2 Notice of Default -
19.2.1
19.2.2
Defaults. If either Pary fails to perform any of the terms or conditions of this
Agreement (an "event of default"), the nondefaulting Party shall cause notice in
writing to be given to the defaulting Pary, specifying the manner in which such
default occurred. If the defaulting Pary shall fail to cure such default within the sixty
(60) days after servce of such notice, or if the defaulting Pary reasonably
demonstrates to the other Party that the default can be cured within a commercially
reasonable time but not within such sixty (60) day period and then fails to dilgently
pursue such cure, then, the nondefaulting Party may, at its option, termnate this
Agreement and/or pursue its legal or equitable remedies.
Material Breaches - The notice and cure provisions in paragraph 19.2.1 do not apply
to defaults identified in this Agreement as Material Breaches. Material Breaches must
- 22-
4/15/2008
be cured as expeditiously as possible following occurence of the breach.
19.3 Securty for Performance - Prior to the Operation Date and thereafter for the full term of this
Agreement, Seller wil provide Idaho Power with the following:
19.3.1 Insurance - Evidence of compliance with the provisions of paragraph 13.2. If Seller
fails to comply, such failure wil be a Material Breach and may only be cured by
Seller supplying evidence that the required insurce coverage has been replaced or
reinstated;
19.3.2 Engineer's Certifications - Every three (3) years after the Operation Date, Seller wil
supply Idaho Power with a Certification of Ongoing Operations and Maintenance
(O&M) from a Registered Professional Engineer licensed in the State of Idaho, which
Certification of Ongoing 0 & M shall be in the form specified in Appendix C. Seller's
failure to supply the required certificate wil be an event of default. Such a default
may only be cured by Seller providing the required certificate; and
19.3.3 Licenses and Permts - During the full ter of this Agreement, Seller shall maintain
compliance with all permts and licenses described in pargraph 4.1.1 of this
Agreement. In addition, Seller wil supply Idaho Power with copies of any new or
additional permts or licenses. At least every fifth Contract Year, Seller will update the
documentation described in Paragraph 4.1.1. If at any time Seller fails to maintain
compliance with the permts and licenses described in paragraph 4.1. i or to provide
the documentation required by this paragraph, such failure wil be an event of default
and may only be cured by Seller submitting to Idaho Power evidence of compliance
from the permtting agency.
ARTICLE XX: GOVERNENTAL AUTHORIATION
20.1 This Agreement is subject to the jursdiction of those governental agencies having control over
either Party of this Agreement.
- 23-
4/15/2008
ARTICLE XXI: COMMISSION ORDER
21.1 This Agreement shall become finally effective upon the Commssion's approval of all term and
provisions hereof without change or condition and declaration that all payments to be made to
Seller hereunder shall be allowed as prudently incured expenses for ratemakng puroses.
ARTICLE XXII: SUCCESSORS AN ASSIGNS
22.1 This Agreement and all of the term and provisions hereof shall be binding upon and inure to the
benefit of the respective successors and assigns of the Parties hereto, except that no assignent
hereof by either Pary shall become effective without the written consent of both Parties being
first obtained. Such consent shall not be uneasonably withheld. Notwithstanding the foregoing,
any party which Idaho Power may consolidate, or into which it may merge, or to which it may
conveyor transfer substantially all of its electric utilty assets, shall automatically, without fuher
act, and without need of consent or approval by the Seller, succeed to all of Idaho Power's rights,
obligations and interests under this Agreement. This aricle shall not prevent a financing entity
with recorded or secured rights from exercising all rights and remedies available to it under law
or contract. Idaho Power shall have the right to be notified by the finacing entity that it is
exercising such rights or remedies.
ARTICLE XXII: MODIFICATION
23.1 No modification to this Agreement shall be valid uness it is in writing and signed by both Paries
and subsequently approved by the Commssion.
ARTICLE XXIV: TAXES
24.1 Each Pary shall pay before delinquency all taxes and other governental charges which, if failed
to be paid when due, could result in a lien upon the Facility or the Interconnection Facilities.
- 24-
4/15/2008
ARTICLE XXV: NOTICES
25.1 All written notices under this Agreement shall be directed as follows and shall be
considered delivered when faxed, e-mailed and confirmed with deposit in the U.S. Mail,
first-class, postage prepaid, as follows:
To Seller:
Original document to:
DF-AP #1, LLC
c/o Andgar Corporation
6920 Salashan Parkway, A- i 02
Ferndale, WA 98248
Attn: Contract Administrator
Fax: [phone]
E-mail: gaI)andgar.com
Copy of document to: (not including invoices)
Dean Foods Company
2515 McKinney Ave, Suite 1200
Dallas, TX 75201
Attn: Legal Department
Fax: [phone]
E-mail: edhertideanfoods.com
To Idaho Power:
Original document to:
Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
Email:jimmller(£idahopower.com
Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
POBox 70
Boise, Idaho 83707
E-mail: rallphin(£idaopower.com
- 25-
4/15/2008
ARTICLE XXVI: ADDITIONAL TERMS AN CONDITIONS
26.1 This Agreement includes the following appendices, which are attached hereto and included by
reference:
Appendix A
AppendixB
Appendix C
AppendixD
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer's Cerifications
Forms of Liquid Security
ARTICLE XXVII: SEVERAILITY
27.1 The invalidity or unenforceability of any term or provision of this Agreement shall not affect the
validity or enforceability of any other terms or provisions and this Agreement shall be construed
in all other respects as if the invalid or unenforceable term or provision were omitted.
ARTICLE XXVII: COUNTERPARTS
28.1 This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instruent.
ARTICLE XXIX: ENTIR AGREEMENT
29.1 This Agreement constitutes the entire Agreement of the Parties concerng the subject matter
hereof and supersedes all prior or contemporaneous oral or written agreements between the
Parties concernng the subject matter hereof.
- 26-
4/15/2008
IN WITNESS WHREOF, The Parties hereto have caused this Agreement to be executed
in their respective names on the dates set forth below:
Idaho Power Company DF-AP#1 LLC
By '\~~- "- ~ NY
es C. Miller, Sr. Vice President, Power Supply
By
Dated
ÀefZ~ 2.\ l 2.~og Dated L(/¡ftlo~
"Idaho Power""Seller"
- 27-
4/15/2008
APPENDIX A
A -1 MONTHLY POWER PRODUCTION AN SWITCHING REPORT
At the end of each month the following required documentation wil be submitted to:
Idaho Power Company
Attn: Cogeneration and Small Power Production
POBox 70
Boise, Idaho 83707
The Meter readings required on this report wil be the reading on the Idaho Power Meter
Equipment measurng the Facility's total energy production, Station Usage, Inadvertent Energy delivered
to Idaho Power and the maximum generated energy (kW) as recorded on the Meter Equipment and/or any
other required energy measurements to adequately admnister this Agreement.
- 28-
4/15/2008
Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND SWITCHIG REPORT
Project Name
Month Year
Project Nnmber:
Address
City
Meter Nnmber:
End of Month kWh Meter Reading:
Beginnig of Month kWh Meter:
Difference:
Times Meter Constant:
kWh for the Month:
Metered Demand:
Breaker Opening Record
Date Time Meter
*Breaker Opening Reason Codes
Lack of Adequate Prime Mover
Forced Outage of Facilty
Disturbance of IPCo System
Scheduled Maintenance
Testing of Protection Systems
Cause Unknown
Other (Explain)
1
2
3
4
5
6
7
State Zip
Facilty
Output
Station
Usage
Phone Number:
Station
Usage
Metered
Maximum Generation
kW
Net Generation
Breaker Closing Record
Date Time Meter*i Reason
I
!
I hereby certify that the above meter readings are
true and correct as of Midnight on the last day of the
above month and that the switching record is accurate
and complete as required by the Firm Energy Sales
Agreement to which I am a Party.
Signature
- 29-
Date
4/1512008
A-2 ROUTIN REPORTING
Once the Facility has achieved its Operation Date and has operated in a reliable and consistent
maer for a reasonable period of time, the Paries may mutually agree to modify this Routine
Reporting requirement.
Idaho Power Contact Inormtion
Daily Energy Production Reporting
Call daily by 10 a.m., 1-800-356-4328 or 1-800-635-1093 and leave the following
information:
. Project Identification - Project Name and Project Number
· Curent Meter Reading
· Estimated Generation for the curent day
· Estimated Generation for the next day
Planed and Unplaned Project outages
Call 1-800-345-1319 and leave the following inormation:
. Project Identification - Project Name and Project Number
· Approximate time outage occured
· Estimated day and time ofproject coming back online
Seller's Contact Information
24-Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
Brad Weg
208-320-0636
208-320-0636
Project On-site Contact informtion
Telephone Number: 208-320-0636
- 30-
4/15/2008
APPENDIXB
FACILITY AN POINT OF DELIVERY
PROJECT NO. 31616100
Big Sky West Dair Digester
B-1 DESCRITION OF FACILITY
Please supply detailed description of machiery, fuel source etc.
The renewable energy system wil utilze biogas produced by an anaerobic digester. The biogas
wil be converted to electricity by two reciprocating internal combustion engines. The two
gensets are Guascor 710 kW (with upsize capabilty of 750 kW), with GenTec switchgear.
B-2 LOCATION OF FACILITY
Near:
Sections: 33 Township: Q Range: 14EBM County: Gooding ID.
B-3 SCHEDULED FIRST ENERGY AN OPERATION DATE
Seller has selected November 21, 2008 as the Scheduled First Energy Date.
Seller has selected Februar 14,2009 as the Scheduled Operation Date.
In making these selections, Seller recognzes that adequate testing of the Facility and completion
of all requiements in paragraph 5.2 of this Agreement must be completed prior to the project
being granted an Operation Date.
B-4 MAXIMUM CAPACITY AMOUNT: This value wil be 1.5 MW which is consistent with the
value provided by the Seller to Idaho Power in accordance with Schedule 72. This value is the
maximum energy (MW) that potentially could be delivered by the Seller's Facilty to the Idaho
Power electrical system at any moment in time.
- 31-
4/15/2008
B-5 POIN OF DELIVERY
"Point of Delivery" means, unless otherwise agreed by both Parties, the point of where the Sellers
Facility's energy is delivered to the Idaho Power electrical system. Schedule 72 wil determne
the specific Point of Delivery for this Facility. The Point of Delivery identified by Schedule 72
wil become an integral part of this Agreement.
B-6 LOSSES
If the Idaho Power Metering equipment is capable of measurg the exact energy deliveries by the
Seller to the Idaho Power electrical system at the Point of Delivery, no Losses wil be calculated
for this Facility. If the Idaho Power Metering is unable to measure the exact energy deliveries by
the Seller to the Idaho Power electrical system at the Point of Delivery, a Losses calculation wil
be established to measure the energy losses (kWh) between the Seller's Facility and the Idaho
Power Point of Delivery. This loss calculation wil be initially set at 2% of the kWh energy
production recorded on the Facility generation metering equipment. At such time as Seller
provides Idaho Power with the electrical equipment specifications (transformer loss
specifications, conductor sizes, etc) of all of the electrical equipment between the Facility and the
Idaho Power electrcal system, Idaho Power wil confgure a revised loss calculation formula to
be agreed to by both parties and used to calculate the kWh Losses for the remaining ter of the
Agreement. If at any time durig the term of this Agreement, Idaho Power determnes that the
loss calculation does not correctly reflect the actual kWh losses attributed to the electrical
equipment between the Facility and the Idaho Power electrical system, Idaho Power may adjust
the calculation and retroactively adjust the previous months kWh loss calculations.
B-7 METERIG AN TELEMETRY
Schedule 72 wil determne the specific metering and telemetry requirements for this Facility. At
the minimum the Meterig Equipment and Telemetry equipment must be able to provide and
record hourly energy deliveries to the Point of Delivery and any other energy measurements
- 32-
4/15/2008
required to admister this Agreement. These specifications wil include but not be limited to
equipment specifications, equipment location, Idaho Power provided equipment, Seller provided
equipment, and all costs associated with the equipment, design and installation of the Idaho
Power provided equipment. Seller wil arrange for and make available at Seller's cost
communication circuit(s) compatible to Idaho Power's communcations equipment and dedicated
to Idaho Power's use termnating at the Idaho Power facilities capable of providing Idaho Power
with continuous instantaneous information on the Facilities energy production. Idao Power
provided equipment wil be owned and maintained by Idaho Power, with total cost of purchase,
installation, operation, and maintenance, including admnistrative cost to be reimbursed to Idaho
Power by the Seller. Payment of these costs wil be in accordance with Schedule 72 and the total
metering cost wil be included in the calculation of the Monthy Operation and Maintenance
Charges specified in Schedule 72.
- 33-
4/15/2008
APPENDIXC
ENGINER'S CERTIFICATION
OF
OPERATIONS & MAITENANCE POLICY
The undersigned on behalf of himself and
, hereinafter collectively referred to as "Engineer," hereby states and certifies to the
Seller as follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between
Idaho Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No. and is hereinafter referred to as
the "Proj ect. "
4. That the Project, which is commonly known as the , is located in Section
Township Range , Boise Meridian, County, Idaho.
5. That Engineer recognzes that the Agreement provides for the Project to fush electrical energy
to Idaho Power for a twenty (20) year period.
6. That Engineer has substantial experience in the design, construction and operation of electric
power plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
8. That Engineer has reviewed and/or supervised the review of the Policy for Operation and
Maintenance ("O&M") for this Project and it is his professional opinion that, provided said Project has
been designed and built to appropriate standards, adherence to said O&M Policy wil result in the
Project's producing at or near the design electrical output, efficiency and plant factor for a twenty (20)
year period.
- 34-
4/15/2008
9. That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement,
is relying on Engineer's representations and opinons contained in this Statement.
10. That Engineer certifies that the above statements are complete, true and accurate to the best of his
knowledge and therefore sets his hand and seal below.
By
(P.E. Stamp)
Date
- 35-
4/15/2008
APPENDIXC
ENGINER'S CERTIFICATION
OF
ONGOING OPERATIONS AN MAINTENANCE
The undersigned , on behalf of hiself and
hereinafter collectively referred to as "Engineer," hereby states and certifies
to the Seller as follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between
Idaho Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No. and hereinafter refered to as the
"Proj ect" .
4. That the Project, which is commonly known as the , is located in Section
_ Township Range , Boise Meridian, County, Idaho.
5. That Engineer recognzes that the Agreement provides for the Project to fush electrical energy
to Idaho Power for a twenty (20) year period.
6. That Engineer has substantial experience in the design, construction and operation of electric
power plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
8. That Engineer has made a physical inspection of said Project, its operations and maintenance
records since the last previous certified inspection. It is Engineer's professional opinon, based on the
Project's appearance, that its ongoing O&M has been substantially in accordance with said O&M Policy;
that it is in reasonably good operating condition; and that if adherence to said O&M Policy continues, the
Project wil continue producing at or near its design electrical output, efficiency and plant factor for the
remaining years of the Agreement.
- 36-
4/15/2008
'\
9. That Engineer recognzes that Idaho Power, in accordance with paragraph 5.2 of the Agreement,
is relying on Engineer's representations and opinions contained in this Statement.
10. That Engineer certifies that the above statements are complete, true and accurate to the best of his
knowledge and therefore sets his hand and seal below.
By
(P .E. Stamp)
Date
- 37-
4/15/2008
APPENDIXC
ENGINEER'S CERTIFICATION
OF
DESIGN & CONSTRUCTION ADEQUACY
The undersigned on behalf of himself and
, hereinafter collectively referred to as "Engineer", hereby states and certifies to Idaho
Power as follows:
1.
2.
That Engineer is a Licensed Professional Engineer in good standing in the State ofIdaho.
That Engineer has reviewed the Fir Energy Sales Agreement, hereinafter "Agreement",
between Idaho Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project, which is the subject of the
Agreement and this Statement, is identified as IPCo Facility No and is hereinafter
referred to as the "Project".
4. That the Project, which is commonly known as the is located in Section
_ Township Range , Boise Meridian, County, Idaho.
5. That Engineer recognzes that the Agreement provides for the Proj ect to fush electrical
energy to Idaho Power for a twenty (20) year period.
6.That Engineer has substantial experience in the design, construction and operation of
electric power plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project and
has made the analysis ofthe plans and specifications independently.
8. That Engineer has reviewed the engineering design and construction of the Project,
including the civil work, electrical work, generating equipment, prime mover conveyance system, Seller
fushed Interconnection Facilities and other Project facilties and equipment.
9. That the Project has been constructed in accordance with said plans and specifications, all
- 38-
4/15/2008
applicable codes and consistent with Prudent Electrical Practices as that term is described in the
Agreement.
10. That the design and construction of the Proj ect is such that with reasonable and prudent
operation and maintenance practices by Seller, the Project is capable of performng in accordance with the
terms of the Agreement and with Prudent Electrical Practices for a twenty (20) year period.
11.That Engineer recognzes that Idaho Power, in accordance with paragraph 5.2 of the
Agreement, in interconnecting the Project with its system, is relying on Engineer's representations and
opinions contained in this Statement.
12. That Engineer certifies that the above statements are complete, true and accurate to the
best of his knowledge and therefore sets his hand and seal below.
By
(P .E. Stamp)
Date
- 39-
4/15/2008
APPENDIXD
FORMS OF LIQUID SECURTY
The Seller shall provide Idaho Power with commercially reasonable securty instruents such as
Cash Escrow Securty, Guarantee or Letter of Credit as those term are defined below or other
form of liquid financial securty that would provide readily available cash to Idaho Power to
satisfy the Delay Securty requirement within this Agreement.
For the purose of this Appendix D, the term "Credit Requirements" shall mean acceptable
financial creditworthiness of the entity providing the securty instruent in relation to the term of
the obligation in the reasonable judgment of Idaho Power, provided that any gurantee and/or
letter of credit issued by any other entity with a short-term or long-term investment grade credit
rating by Standard & Poor's Corporation or Moody's Investor Servces, Inc. shall be deemed to
have acceptable financial creditworthiness.
i. Cash Escrow Security - Seller shall deposit funds in an escrow account established by the
Seller in a bankng institution acceptable to both Parties equal to the Delay Securty.
2. Guarantee or Letter of Credit Securty - Seller shall post and maintain in an amount equal to
the Delay Security: (a) a guaranty from a party that satisfies the Credit Requirements, in a
form acceptable to Idaho Power at its discretion, or (b) a Letter of Credit in a form acceptable
to Idaho Power, in favor ofIdaho Power. The Letter of Credit wil be issued by a financial
institution acceptable to both parties.
- 40-
4/15/2008