20090717Application.pdf

RECEIVED
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es11M~POR~
An IDACORP Company
DONOVAN E. WALKER
Corporate Counsel
10ß9
iDAHO
UTiUT\ES CO
July 17, 2009
VIA HAND DELIVERY
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-09-20
IN THE MA TTER OF THE APPLICA TlON 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 PA YNE'S FERRY WIND PARK, LLC
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Idaho Power
Company's Application in the above matter.
Very truly yours,~~t(~
Donovan E. Walker
DEW:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise. 10 83702
DONOVAN E. WALKER (ISB No. 5921)
BARTON L. KLINE (ISB No. 1526)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: 208-388-6936
dwalker~idahopower.com
bkline~idahopower.com
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
RECEIVED
2009 JUL I 7 AM II: 16
UTlLfOAHO PUì7:/ if'fTlES COAiÁlišS/ON
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MAnER 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 PAYNE'S FERRY WIND PARK, LLC
)
) CASE NO. IPC-E-09-20
)
) APPLICATION
)
)
)
)
Idaho Power Company ("Idaho Power" or the "Company"), in accordance with RP
52 and the applicable provisions of the Public Utilities Regulatory Policies Act of 1978
("PURPA"), hereby respectfully applies to the Idaho Public Utilities Commission ("IPUC" or
the "Commission") for an Order approving the Firm Energy Sales Agreement between
Idaho Power and Payne's Ferry Wind Park, LLC ("Payne's Ferry") under which Payne's
Ferry would sell and Idaho Power would purchase electric energy generated by the
Payne's Ferry Wind Park Project ("Facility") located near Hagerman, Idaho.
APPLICATION - 1
In support of this Application Idaho Power represents as follows:
i. BACKGROUND
1. Sections 201 and 210 of PURPA, and pertinent regulations of the Federal
Energy Regulatory Commission ("FERC"), require that regulated electric utilties purchase
power produced by cogenerators or small power producers that obtain qualifying facility
("OF") status. The rate a OF receives for the sale of its power is generally referred to as
the "avoided cost" rate and is to reflect the incremental cost to an electric utility of electric
energy or capacity or both, which, but for the purchase from the OF, such utility would
generate itself or purchase from another source. The Commission has authority under
PURPA Sections 201 and 210 and the implementing regulations of the FERC, 18 C.F.R.
§ 292, to set avoided costs, to order electric utilities to enter into fixed-term obligations for
the purchase of energy from OFs, and to implement FERC rules.
2. Payne's Ferry proposes to design, construct, install, own, operate, and
maintain a 21.0 megawatt ("MW') wind generating facility to be located near Hagerman,
Idaho. The Facility wil be a OF under the applicable provisions of PURPA.
II. THE FIRM ENERGY SALES AGREEMENT ,
3. On July 9, 2009, Idaho Power and Payne's Ferry entered into a Firm Energy
Sales Agreement ("Agreement") pursuant to the terms and conditions of the various
Commission Orders applicable to this PURPA agreement for a wind resource. See, Order
Nos. 30415, 30488, 30738, and 30744. Under the terms of this Agreement, Payne's Ferry
elected to contract with Idaho Power for a 20-year term. Payne's Ferry further elected to
contract with the Company using the Levelized Published Avoided Cost Rates as currently
APPLICATION - 2
established by the Commission for energy deliveries of less than 10 average MW. The
Agreement is filed with this Application as Attachment NO.1.
4. The Payne's Ferry Agreement is a levelized Agreement and as such, it
includes the various security requirements required by the Commission for levelized
Agreements (i.e., Debt Service Reserve, Maintenance Reserve, second lien requirements,
and an expanded list of required insurances).
5. The nameplate rating of this Facility is 21.0 MW. As defined in paragraphs
1.15 and 4.1.3 of the Agreement, Payne's Ferry wil be required to provide data on the
Facility that Idaho Power wil use to confirm that under normal and/or average conditions,
the Facility wil not exceed 10 average MWs on a monthly basis. Furthermore, as
described in paragraph 7.5 of the Agreement, should the Facility exceed 10 average MWs
on a monthly basis, Idaho Power will accept the energy ("Inadvertent Energy") that does
not exceed the Maximum Capacity Amount; however, the Company wil not purchase or
pay for this Inadvertent Energy.
6. This is one of the first PURPAwind agreements executed since the issuance
of Commission Order No. 30488, which requires the inclusion of the Mechanical Availability
Guarantee ("MAG"), Wind Integration Cost reduction, and Wind Forecasting cost sharing.
In addition, the Agreement contains provisions for Delay Liquidated Damages and
associated Delay Security to secure the established Scheduled Operation date of
September 30, 2010.
7. 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
APPLICATION - 3
and declared that all payments Idaho Power makes to Payne's Ferry for purchases of
energy wil be allowed as prudently incurred expenses for ratemaking purposes.
8. Payne's Ferry has elected September 30,2010, as both the Scheduled First
Energy Date and the Scheduled Operation Date for this Facility. (See, Appendix B).
Various requirements have been placed upon Payne's Ferry in order for Idaho Power to
accept energy deliveries from this Facility. Idaho Power 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 July 9, 2009.
9. The Agreement, as signed and submitted by the parties thereto, contains
Levelized Published Avoided Cost Rates in conformity with applicable IPUC Orders. All
applicable interconnection charges and monthly operation and maintenance charges under
Schedule 72 wil be assessed to Payne's Ferry.
II. MODIFIED PROCEDURE
10. Idaho Power believes that a hearing is not necessary to consider the issues
presented herein and therefore respectfully requests that this Application be processed
under Modified Procedure, i.e., by written submissions rather than by hearing. RP 201, et
seq. If, however, the Commission determines that a technical hearing is required, the
Company stands ready to present its testimony and support the Application in such
hearing.
IV. COMMUNCIATIONS AND SERVICE OF PLEADINGS
11. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
APPLICATION - 4
Donovan Walker, Corporate Counsel
Barton L. Kline, Senior Attorney
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
dwalker~idahopower.com
bkline~idahopower.com
Randy C. Allphin
Contract Administrator
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
rallphin~idahopower.com
V. REQUEST FOR RELIEF
12. Idaho Power Company respectfully requests that the Commission issue an
Order: (1) authorizing that this matter may be processed by Modified Procedure, (2)
Approving the Firm Energy Sales Agreement between Idaho Power Company and Payne's
Ferry Wind Park, LLC, without change or condition, and (3) declaring that all payments for
purchases of energy under the Firm Energy Sales Agreement between Idaho Power
Company and Payne's Ferry Wind Park, LLC, be allowed as prudently incurred expenses
for ratemaking purposes.
Respectfully submitted this 1 ¡th day of July 2009.
¿JvtAOVANWALKER
Attorney for Idaho Power Company
APPLICATION - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 1 ¡th day of July 2009 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:
Payne's Ferry Wind Park, LLC
James T. Carkulis
Payne's Ferry Wind Park, LLC
802 West Bannock Street, 1ih Floor
Boise, Idaho 83702
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
ail
APPLICATION - 6
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-09-20
IDAHO POWER COMPANY
ATTACHMENT NO.1
Aricle
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FIR ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPAN
AN
PAYN'S FERRY WI PAR, LLC
TABLE OF CONTENTS
TITLE
Defintions
No Reliance on Idaho Power
Waranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale of Net Energy
Puchase Price and Method of Payment
Environmental Attributes
Facility and Interconnection
Metering and Telemetry
Records
Operations
Indemnfication and Insurance
Force Majeure
Liability; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Governental Authorization
Commssion Order
Successors and Assigns
Modification
Taxes
Notices
Additional Term and Conditions
Severabilty
Counterpars
Entire Agreement Signatues
Appendix A
AppendixB
Appendix C
AppendixD
AppendixE
AppendixF
FIR ENERGY SALES AGREEMENT
(10 aMW or Less)
Project Name: Payne's Ferr Wind Park. LLC
Project Number:31315060
THIS AGREEMENT, entered into on this q 'fday of Jw /1
PAYN'S FERRY WI PAR, LLC (Seller), and IDAHO POWER COMPAN, an Idaho corporation
2009 between
(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 Facilty.
THEREFORE, In consideration of the mutual covenants and agreements hereinafter set forth, the
Parties agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreement and the appendices attached hereto, the following terms
shall have the following meanings:
1.1 "Calculated Net Energy Amount" - The Nameplate Capacity of the Facility multiplied by the
total hours in the applicable month mius the estimated Lost Energy Production, and minus the
estimated Station Use associated with the Lost Energy Production.
1.2 "Commssion" - The Idaho Public Utilities 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.
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1.6 "Delay Price" - The curent month's Mid-Columbia Market Energy Cost minus the current
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 "Energy Shortfall Price" - The curent month's Mid-Columbia Market Energy Cost minus the
current month's All Hours Energy Price specified in paragraph 7.3 of this Agreement. If this
calculation results in a value less than 15.00 Mils/Kwh the result shall be 15.00 Mils/Kwh.
1.9 "Facility" - That electric generation facility described in Appendix B of this Agreement.
1.10 "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
Idao Power's system at the Point of Delivery.
1.11 "Forced Outage" - a partial or total reduction of a) the Facility's capacity to produce and/or
deliver Net Energy to the Point of Delivery, or b) Idaho Power's abilty to accept Net Energy at
the Point of Delivery for non-economic reasons, as a result ofIdaho Power or Facilty: 1)
equipment failure which was not the result of negligence or lack of preventative maintenance or
2) unplaned preventative maintenance to repair equipment that left unepaired, would result in
failure of equipment prior to the planed maintenance period. The Parties shall make
commercially reasonable efforts to perform this unplanned preventative maintenance during
periods of low wind availability or 3) responding to a transmission provider curailment order.
1.12 "Heayy Load Hours" - The daily hours beginnng at 07 :00 am, ending at 11 :00 pm Mountain
Time, (16 hours) excluding all hours on all Sundays, New Years Day, Memorial Day, Fourh of
July, Labor Day, Thansgiving and Chrstmas.
1.13 "Inadvertent Energy" - Electric energy Seller does not intend to generate. Inadvertent Energy is
more particularly described in paragraph 7.5 of this Agreement.
1.14 "Interconnection Facilities" - All equipment specified in Idaho Power's Schedule 72.
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1.15 "Initial Capacity Determnation" - The process by which Idaho Power confirms that under
normal or average design conditions the Facility 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.
1.16 "Light Load Hours" - The daily hours beginnng at 11 :00 pm, ending at 07:00 am Mountain
Time (8 hour), plus all other hours on all Sundays, New Years Day, Memorial Day, Fourth of
July, Labor Day, Thansgiving and Christmas.
1.17 "Losses" - The loss of electrical energy expressed in kilowatt hours (kWh) occurg as a result
of the tranformation 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.
1.18 "Lost Net Energy Production" - A monthly estimate after the fact, prepared and documented by
Seller and accepted by the Buyer, of the Seller's Facilty's individual generation unt's energy
production that was not delivered as Net Energy due to: 1) periods where the level of Sufficient
Prime Mover were outside the manufacturer's acceptable operating range for the wind tubine
generator, 2) incidents of Force Majeure, 3) scheduled maintenance, or 4) incidents of Forced
Outage. If any of the above listed events (measured on each individual occurence and individual
generation unit) lasts for less than 15 minutes, then no Lost Energy Production wil be calculated.
Calculation of the amount of Lost Energy Production will be the verifiable duration (not less than
15 minutes) of the event multiplied by the Nameplate Capacity reduction of only the affected
generation unt(s) occurrg as a result of the event multiplied by the expected capacity factor
which would have occurred durg this time period less any Losses that would have been
associated with this calculated Lost Net Energy Production. It is understood by the Parties, that a
specific generation unt's outage may indirectly impact other fully operational generation unts, in
which case the forced outage calculation could extend to the other impacted generation unts.
Example - if a single turbine with a Nameplate Capacity rating or 2.1 MW suffers a 100% gear
box failure that was not a result of negligence or lack of preventative maintenace (Forced
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Outage) and it takes 48 hours to replace the gear box, and other generation units in the immediate
vicinity of this generation unt operated at a 30% capacity factor durg this 48 hour perod then
the amount of Lost Energy Production wil be; 48 hours X 2.1 MW X 30% = 30.24 MWh
(30,240 kWh)
1.19 "Market Energy Reference Price" - Eighty-five percent (85%) of the Mid-Columbia Market
Energy Cost.
1.20 "Material Breach" - A Default (paragraph 19.2.1) subject to paragraph 19.2.2.
1.21 "Maximum Capacity Amount" - The maximum capacity (MW) of the Facility wil be as
specified in Appendix B of this Agreement.
1.22 "Mechancal Availability" - The percentage amount calculated by Seller within 5 days after the
end of each month of the Facility's monthly actul Net Energy divided by the Facility's
Calculated Net Energy Amount for the applicable month. Any penalty associated with falling
short of the Mechanical Availabilty Guarantee for each month shall be determned in accordance
with paragraph 6.4.4.
1.23 "Mechancal Availability Guarantee" shall be as defined in paragraph 6.4.
1.24 "Metering Equipment" - All equipment specified in Schedule 72, this Agreement and any
additional equipment specified in Appendix B required to measure, record and telemeter bi-
directional power flows between the Seller's Facility at the Seller's individual generation
Facilties and the Point of Delivery on the Idaho Power electrical system.
1.25 "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 simlar agreements and a
commonly used index by the electrical industry.
1.26 "Nameplate Capacity" -The ful-load electrical quantities assigned by the designer to a generator
and its prime mover or other piece of electrical equipment, such as tranformers and circuit
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breakers, under standardized conditions, expressed in amperes, kilovolt-amperers, kilowatts, volts
or other appropriate unts. Usually indicated on a nameplate attached to the individual machine
or device.
1.27 "Net Energy" - All of the electric energy produced by the Facility, less Station Use, less Losses,
expressed in kilowatt hours (kWh) delivered to Idaho Power at the Point of Delivery. Subject to
the terms of this Agreement, 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.
1.28 "Operation Date" - The day commencing at 0001 hours, Mountain Time, following the day that
all requirements of paragraph 5.2 have been completed.
1.29 "Point of Delivery" - The location specified in Appendix B, where Idaho Power's and the
Seller's electrical facilities are interconnected.
1.30 "Prudent Electrical Practices" - Those practices, methods and equipment that are commonly and
ordinarily used in electrical engineering and operations to operate electric equipment lawfuly,
safely, dependably, efficiently and economically.
1.31 "Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates
achieving the Operation Date. In establishig this date it is expected that the Seller reasonably
determes this date is based upon the best known information in regards to equipment
availabilty and construction schedules.
1.32 "Schedule 72" - Idaho Power's Tarff No 101, Schedule 72 or its successor schedules as
approved by the Commssion. The Seller shall be responsible to pay all costs of interconnection
and integration of this Facilty into the Idaho Power electrical system as specified within
Schedule 72.
1.33 "Season" - The three periods identified in paragraph 6.2.1 of this Agreement.
1.34 "Special Facilities" - Additions or alterations of transmission and/or distribution lines and
transformers as described in Schedule 72.
1.35 "Station Use" - Electric energy that is used to operate equipment that is auxliar or otherwise
related to the production of electricity by the Facility. To calculate the Station Use value for use
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in the Mechanical Availability calculation, the previous period's actual Station Use wil be used
as a basis.
1.36 "Suffcient Prie Mover" means wind speed that is (1) equal to or greater than the generation
unit's manufacturer-specified mimum levels required for the generation unt to produce energy
and (2) equal to or less than the generation unt's manufacturer-specified maximum levels at
which the generation unt can safely produce energy.
1.37 "Surlus Energy" - All Net Energy produced by the Seller's Facilty and delivered by the Facility
to the Idaho Power electrical system prior to the Operation Date.
1.38 "Total Cost of the Facility" - The total replacement cost of strctures, equipment and
appurtenaces.
1.39 "Wind Energy Production Forecast" - A forecast of energy deliveries from this Facilty provided
by an Idaho Power provided wind forecasting modeL. The Facility shall be responsible for an
allocated portion of the total costs of the forecasting model as specified in Appendix E.
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 undertaking by Seller of the obligations set forth herein, Seller has
investigated and deterned 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 experts including, but not limited to, engineers,
attorneys or accountants, that Seller may have consulted or relied on in undertng the
transactions contemplated by this Agreement have been solely those of Seller.
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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 maes no waranties, expressed or implied, regarding any aspect of
Seller's design, specifications, equipment or facilities, including, but not limited to, safety,
durabilty, reliability, strength, capacity, adequacy or economic feasibility.
3.2 Qualifyng Facility Status - Seller warts that the Facility is a "Qualifying Facilty," as that term
is used and defined in 18 CFR 292.201 et seq. After intial qualification, Seller wil take such
steps as may be required to maintain the Facility's Qualifying Facility status during the term of
this Agreement and Seller's failure to maintain Qualifyng Facility status wil be a Material
Breach of this Agreement. Idaho Power reserves the right to review the Seller's Qualifying
Facilty status and associated support and compliance documents at anytime during the term of
this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
4.1 Prior to the First Energy Date and as a condition ofIdaho 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
operations have been obtained from applicable federal, state or local authorities,
including, but not limited to, evidence of compliance with Subpar B, 18 CFR 292.201 et
seq. and a Qualifying Facility certificate.
4.1.2 Opinion of Counsel - Submit to Idaho Power an Opinion 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 opinon that Seller is in substantial
compliance with said permts as of the date ofthe Opinion Letter. The Opinion Letter
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wil be in a form acceptable to Idaho Power and wil acknowledge that the attorney
renderg the opinion understands that Idaho Power is relying on said opinion. Idaho
Power's acceptance of the form wil not be uneasonably withheld. The Opinion 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 Deteration. Such data wil include
but not be limted to, equipment specifications, prime mover data, resource
characteristics, norml and/or average operating design conditions and Station Use data.
Upon receipt of this informtion, Idaho Power wil review the provided data and if
necessary, 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 manufacturer's Nameplate Capacity rating of the individual
generation unts at this Facility is less than 10 MW, the Seller shall submit
detailed, manufacturer-specific, verifiable data ofthe Nameplate Capacity ratings
of the actual individual generation unts to be installed at ths Facility. Upon
verification by Idaho Power that the data provided establishes the combined
nameplate rating of the generation unts to be installed at this Facilty is less than
10 MW, it wil be deemed that the Seller has satisfied the Intial Capacity
Determnation for this Facility.
4.1.4 Nameplate Capacity - Submit to Idaho Power Manufacturer's and engineerig
documentation that establishes the Nameplate Capacity of each individual generation unt
that is included within the entire Facilty. Upon receipt of this data, Idaho Power shall
review the provided data and determe if the Nameplate Capacity specified is reasonable
based upon the Manufacturer's specified generation ratings for the specific generation
units.
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4.1.5 Engineer's Certifications - Submit an executed Engineer's Certification of Design &
Constrction 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 necessary to
recognze the different engieering disciplines providing the certificates.
4.1.6 Insurance - Submit written proof to Idaho Power of all insurance required in Aricle XIII.
4.1.7 Interconnection - Provide written confiration from Idaho Power's delivery business
unt that Seller has satisfied all interconnection requirements.
4.1.8 Network Resource Designation-
4.1.8.1 Provide all data required by the Idaho Power delivery business unt to enable the
Seller's Facilty to be designated as a network resource.
4.1.8.2 Receive confiration from the Idaho Power delivery business unit that the
Seller's Facility has been designated as a network resource.
4.1.9 Reserve Accounts - Demonstrate to Idaho Power's satisfaction that the Seller has
established and fuded (1) a debt service reserve account in a form and with a fud
holder which complies with paragraph 19.3.2 and (2) demonstrate to Idaho Power's
satisfaction that the Seller has established a maintenance reserve account in a form and
with a fud holder acceptable to Idaho Power. Said maintenance reserve account shall be
structured and funded as follows:
4.1.9.1 All fuds wil be prudently invested, in a guarateed, insured account
and all cost of implementing and operating the maintenance resere
account shall be paid by the Seller. All interest eaed on the fuds on
deposit wil be retained in the maintenance reserve account. At the end
of the term of this Agreement, any balance remaining in the maintenance
reserve account shall be the property of the Seller.
4.1.9.2 Within 60 days after the completion of each Contract Year, the Seller
wil deposit cash in the maintenance reserve account in an amount equal
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to, or exceeding 5% of the Facilty's estimated gross income for the
ensuing Contract Year, less an amount equal to the Facility's actual
maintenance, repair and replacement expenses (maintenance expenses)
incured during the prior Contract Year. At Seller's option, the cash
required hereunder to be maintained in such reserve may be replaced by
an irevocable standby letter of credit in the same amount.
4.1.9.3 The minimum amount of deposit retained in the maintenance reserve
account shall be $2,000,000. This minimum amount wil be adjusted
either upward or downward to reflect curent replacement cost of a
complete wind tubine/generator. (i.e. tower, nacelle, generator, control
unt, associated wirng, etc) This adjustment wil be made at the
beginnng of each 3rd contract year and the replacement value determned
by the replacement cost valuation methods as described withi paragraph
13.2.6.c. In the event ths adjustment results in a balance in this account
exceeding 10% of the actual replacement cost of a complete wind
turbine/generator then the Seller may request a disbursement of fuds as
specified in paragraph 4.1.9.6.
4.1.9.4 At the time Seller makes the deposit described in paragraph 4.1.9.2,
Seller wil provide Idaho Power with an accurate, verifiable report
showing the prior Contract Year's actual maintenance expenses,
identified by appropriate FERC maintenance account number, and the
estimate of the Facility's gross income for the ensuing Contract Year
used to compute the deposit amount, together with documentation
supporting the estimate of gross income.
4.1.9.5 If at any time it appears that the maintenance expense for that Contract
Year wil exceed 5% of the Facility's estimated gross income for that
Contract Year, the Seller may request that Idaho Power consent to the
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release of fuds from the maintenance reserve account in an amount
sufficient to pay the anticipated additional maintenance expenses. The
request must include documentation supporting the Seller's projection of
excess maintenance expense, identified by appropriate FERC
maintenance account number, and such documentation shall be
submitted to Idaho Power. Upon approval by Idaho Power, the required
fuds wil be released to Seller in accordance with Paragraph 4.1.9.6.
4.1.9.6 Control of the maintenance reserve account wil be maintained by Idaho
Power through the requirement of dual signatures on the account. The
only authorized signers wil be the Chief Operating Officer and the Chief
Financial Offcer of Idaho Power (or their respective designees) and the
Treasurer of Seller (or his!her respective designee). Accordingly, fuds
wil only be released from the maintenance reserve account upon the
signatures of both Idaho Power authorized signers or one Idaho Power
authorized signer and Seller's authorized signer.
4.1.9.7 At the end of each Contract Year, Seller wil provide Idaho Power with
evidence of compliance with the maintenance reserve account
requirements set out in this Agreement. This evidence of compliance
wil be provided in a maner and form acceptable to Idao Power. The
maintenance reserve fud wil be subject to the lien rights described in
paragraph 4.1.10 below.
4.1.9.8 If the Facility has established a maintenance resere account in a form
and amount that meets or exceeds the maintenance reserve requirements
as defined below for compliance with other parties having a financial
interest in this Facility, the Seller shall provide Idaho Power with
documentation of those requirements and upon Idaho Power's
acceptance that the financial maintenance reserve requirements meet or
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exceed the requirements within this Agreement, Idaho Power wil accept
this financial maintenance reserve account as meeting these
requirements. If Idaho Power accepts, this financial maintenance reserve
account, it wil be required that within 60 days of the end of each
Contract Yea the Seller provide Idaho Power documentation of the
balance within the financial maintenance reserve account and the
previous year's activity within the account. Idaho Power reserves the
right to require the Seller to provide a maintenance reserve account as
specified below at any time durng the term of this Agreement if Idaho
Power determnes that the Seller's financial maintenance resere account
no longer meets or exceeds these requirements.
4.1.10 Security Interests - Provide Idaho Power with acceptable securty against Seller's
default under this Agreement. Acceptable securty wil conform to Commssion
Order No. 21690 and No. 21800 and may include, but wil not be limited to (1)
title insurance, securty interests in the real property associated with the Facility,
equipment, fixtures, contracts, permts, easements, rights-of-way, land use
agreements, fuds held in escrow in which Seller has an interest and that relate to
the operation of the Facility, and other reasonable security arangements
consistent with the Facilty's financing and ownership arngements; or (2) the
seller may post liquid securty in an amount equal to at least thiy five percent
(35%) of the Accumulated Overpayment Amount specified for that year in
AppendixF.
4.1.10.1 Idaho Power's securty interests wil be superor and senior to all liens
other than the first mortgage lien and other securty interests permtted
in accordance with paragraphs 4.1.10.2. The Seller shall be
responsible for all costs reasonably incurred by Idaho Power to review
and perfect this securty interest not to exceed $15,000.
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4.1.10.2 If Seller desires to incur a first mortgage lien or other security interests
that will be superior to Idao Power's security interests in the Facility,
at least twenty-one (21) days prior to their execution, Seller shall
provide Idaho Power with draft copies of the deeds of trust, mortgages
and other securty agreements that wil be used to secure such first lien.
Upon their execution Seller shall provide Idaho Power with copies of
the executed first lien documents. The executed first lien documents
shall not be assigned, amended, modified, or extended, and no
replacement or refinancing of any natue shall be undertaken, without
Idaho Power's prior written consent which consent shall not be
uneasonably withheld. In no event wil the amount of any first
mortgage lien exceed $56,250,000. The total amount of all refinanced
or replaced first liens shall not exceed the unpaid principal balance of
the first mortgage liens they replace.
4.1.10.3 Other than the first mortgage liens permtted herein, or temporar
mechanic's, statutory or simlar liens incurred in the ordinry course of
business in an amount not to exceed in aggregate $50,000, Seller wil
not permt any liens or encumbrances of any natue whatsoever to be
placed on the Facilty without Idaho Power's prior written consent,
which consent wil not be unreasonably withheld. If any unpermtted
lien or encumbrance is placed on the Facility, Seller wil provide Idaho
Power with a bond, insurce or other security acceptable to Idao
Power in an amount suffcient to secure the full discharge of such
unpermtted lien or encumbrance.
4.1.10.4 Durng the remaining term of this Agreement, Seller shall maintain
compliance with all requirements of Idaho Power's security interests
described above in paragraph 4.1.10 of this Agreement and
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Commssion Order No. 21690. Seller's failure to comply with those
requirements, wil be an event of default and in addition to any other
remedies available under this Agreement, Commssion Order No.
21690, and the securty interests, Seller wil be required by Idaho
Power to post liquid securty ("Performance Securty") in a form as
specified in Appendix D in an amount equal to at least thirty five
percent (35%) of the Accumulated Overpayment Amount specified for
that year in Appendix F. Failure to maintain and provide the liquid
securty required by this Agreement and Commssion Order No. 21690
and No. 21800 shall be an event of default.
4.1.11 Written Acceptance - Request and obtain written confirmation from Idaho Power that all
conditions to acceptance of energy have been fulfilled. Such written confirmtion shall be
provided within a commercially reasonable time following the Seller's request and wil
not be uneasonably withheld by Idao Power.
ARTICLE V: TERM AN OPERATION DATE
5.1 Term - Subj ect to the provisions of paragraph 5.2 below, this Agreement shall become effective
on the date first written and shall continue in ful 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 Facilty 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 Facilty is complete and
able to provide energy in a consistent, reliable and safe maer.
d) Seller has requested an Operation Date from Idaho Power in a written formt.
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e) Seller has received written confirmtion from Idaho Power of the Operation Date.
This confiration 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.
5.3.1 If the Operation Date occurs after the Scheduled Operation Date but prior to 90 days past
the Scheduled Operation Date, Seller shall pay Idaho Power Delay Liquidated Damages
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 curent months Delay Period) multiplied by
the curent months Delay Price.
5.3.2 If the Seller's Facility has not achieved the Operation Date withi 90 days after the
Scheduled Operation Date, the Seller shall pay Idaho Power Delay Liquidated Damges
calculated as follows:
Twenty dollars ($20) multiplied by the Maximum Capacity Amount with the
Maximum Capacity Amount being measured in KW.
5.4 If Seller fails to achieve the Operation Date withi niety (90) days after the Scheduled Operation
Date, such failure wil be a Material Breach and Idaho Power may termnate this Agreement.
5.5 Seller shall pay Idaho Power any calculated Delay Liquidated Damages within seven (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 and Idaho Power may draw fuds from the Delay Securty provided by the Seller in
an amount equal to the calculated Delay Liquidated Damages.
5.6 The Parties agree that the damges Idaho Power would incur due to delay in the Facilty
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 Damages are an appropriate
approximation of such damages.
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5.7 Within thiry (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. Failure to post this
Delay Security in the time specified above wil be a Material Breach of this Agreement and Idaho
Power may termnate this Agreement.
5.7.1 Twenty dollars ($20) multiplied by the Maximum Capacity Amount with the Maximum
Capacity Amount being measured in kW.
5.7.1.1 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 accordance with paragraph 5.7.1 wil
be reduced by ten percent (10%).
5.7.1.2 If the Seller has received a reduction in the calculated Delay Securty as specified
in paragraph 5.7.1.1 and subsequently (1) at Seller's request, the generation
interconnection agreement specified in paragraph 5.7.1.1 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 Security 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 any remaing security posted hereunder after all calculated
Delay Liquidated Damages are paid in full to Idaho Power and the earlier of (1) 30 days
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after the Operation Date has been achieved or (2) 120 days after the termnation of this
Agreement.
5.7.3 Early Termnation Payment - At any time after the Operation Date has been achieved,
Idaho Power termates this Agreement due to any default by the Seller, Seller wil make
a termnation payment to Idaho Power. The termnation payment wil include but not be
limited to the Accumulated Overpayment Amount specified in Appendix F of this
Agreement.
ARTICLE VI: PURCHASE AN SALE OF NET ENERGY
6.1 Delivery and Acceptance of Net Energy - Except when either Pary's pedormce 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 Facilty wil also be
delivered by the Seller to Idaho Power at the Point of Delivery. At no time will the total amount
of Net Energy and/or Inadvertent Energy produced by the Facility and delivered by the Seller to
the Point of Delivery exceed the Maximum Capacity Amount.
6.2 Net Energy Amounts - Seller intends to produce and deliver Net Energy in the following monthly
amounts. These amounts shall be consistent with the Mechanical Availabilty Guaantee.
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6.2.1 Intial Year Monthly Net Energy Amounts:
Month kWh
March 5,837,644
Season 1 April 5,639,662
May 5,300,264
July 3,552,365
August 3,682,467
Season 2 November 4,276,414
December 4,909,957
June 4,632,782
September 4,101,058
Season 3 October 4,700,661
January 5,107,939
Februar 4,830,764
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.
6.4 Mechanical Availability Guarantee - After the Operational Date has been established, the Facility
shall achieve a minimum montWy Mechanical Availabilty of 85% for the Facilty for each month
durng the full term of this Agreement (the "Mechaical Availability Guaantee"). Failure to
achieve the Mechanical Availability Guarantee shall result in Idao Power calculating damages as
specified in paragraph 6.4.4.
6.4.1 At the same time the Facility provides the MontWy Power Production and Switching
Report, (Appendix A) the Seller shall provide and certify the calculation of the Facility's
curent month's Mechancal Availability. The Seller shall include a sumry of: (a)
Forced Outages, (b) Force Majeure events, (c) wind speeds and the impact on generation
output and (c) scheduled maintenance and Station Use information that was used to
calculate the curent month's Mechanical Availability
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6.4.2 The Facility shall maintain detailed documentation supporting its calculation of the
Facility's Mechancal Availability. These records wil be retained for three years.
6.4.3 Idaho Power shall have the right to review and audit the documentation supporting the
calculation of the Facility's Mechanical Availability at reasonable times at the Seller's
offices.
6.4.4 If the curent month's Mechanical Availability is less than the Mechanical Availabilty
Guarantee, damages wil be calculated as :
The Mechanical Availability Guarantee multiplied by the Facilty's
aggregate Nameplate Capacity of all generation units at the Facility
multiplied by the hours of the month minus the curent month's measured
Losses and Station Use minus the month's actual Net Energy deliveries
multiplied by the Energy Shortfall Price.
6.4.5 Any damages calculated in paragraph 6.4.4 wil be offset against the curent month's
energy payment. If an unpaid balance remains after the damages are offset against the
energy payment, the Facility shall pay in full the remaining balance within fifteen (15)
days of the date of the invoice.
ARTICLE VII: PURCHASE PRICE AN METHOD OF PAYMENT
7.1 Heavv Load Purchase Price - For all Net Energy received durng Heavy Load Hours, Idao
Power wil pay the levelized energy price for a Facility scheduled to come on-line durg
calendar year 2010, for a contract term of twenty (20) years in accordance with Commssion
Order 30744,30738 and adjusted in accordace with Commssion Order 30415 for Heavy Load
Hour Energy deliveries, and adjusted in accordance with Commssion Order 30488 for the wind
integration charge and with seasonalization factors applied:
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Season 1 - (73.50 %)
Mils/kWh
63.65
Season 2 - (120.00 %)
Mils/kWh
106.47
Season 3 - (100.00 %)
Mills/kWh
87.64
7.2 Light Load Purchase Price - For all Net Energy received during Light Load Hours, Idaho Power
wil pay the levelized energy price for a Facility scheduled to come on-line durg calendar year
2010, for a contract term of twenty (20) year in accordance with Commssion Order 30415 for
Light Load Hour Energy deliveries, and adjusted in accordance with Commssion Order 30488
for the wind integration charge and with seasonalization factors applied:
Season 1 - (73.50 %)
Mils/kWh
58.73
Season 2 - (120.00 %)
Mils/kWh
97.73
Season 3 - (100.00 %)
Mils/kWh
80.36
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 levelized energy price for a Facility scheduled to come on-line
during calendar year 2010, for a contract term of twenty (20) years in accordance with
Commssion Order 30744,30738 and adjusted in accordance with Commssion Order 30488 for
the wind integration chage and with seasonalization factors applied:
Season 1 - (73.50 %)
Mils/kWh
61.47
Season 2 - (120.00 %)
Mils/kWh
102.58
Season 3 - (100.00 %)
Mils/kWh
84.40
7.4 Surlus Energy Price - For all Surlus Energy, Idaho Power shall pay to the Seller the current
month's Market Energy Reference Price or the All Hours Energy Price specified in pargraph
7.3, 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
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delivered. (For example Januar contains 744 hours. 744 hours times 10,000 kW =
7,440,000 kWh. Energy delivered in January in excess of 7,440, 000 kWh in this
example would be Inadvertent Energy.)
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, less Wind Energy Production Forecasting Monthly Cost
Allocation (MCA), wil be disbursed to the Seller within 30 days of the date which Idaho Power
receives and accepts the documentation of the monthly Mechancal Available Guarantee and the
Net Energy actually delivered to Idaho Power as specified in Appendix A.
7.7 Continuing Jursdiction of the Commssion -This Agreement is a special contract and, as such, the
rates, term and conditions contained in this Agreement wil be construed in accordance with
Idaho Power Company v. Idaho Public Utilities Commission and Afton Energy, Inc., 107 Idaho
781, 693 P.2d 427 (1984), Idaho Power Company v. Idaho Public Utilties Commission, 107
Idaho 1122,695 P.2d 1 261 (1985), Afton Energy, Inc, v. Idaho Power Company, 111 Idaho 925,
729 P.2d 400 (1986), Section 210 of the Public Utilties Regulatory Policies Act of 1978 and 18
CFR §292.303-308
ARTICLE VII: ENVIRONMENTAL ATTRIUTES
8.1 Idao Power waives any claim to ownership of Environmental Attributes. Environmental
Attributes include, but are not limited to, Green Tags, Green Certificates, Renewable Energy
Credits (RECs) and Tradable Renewable Certificates (TRCs) directly associated with the
production of energy from the Seller's Facilty.
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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.
9.2 Interconnection Facilities - Except as specifically provided for in this Agreement, the required
Interconnection Facilities wil be in accordance with Schedule 72, the Generation Interconnection
Process and Appendix B. The Seller is responsible for all costs associated with ths equipment as
specified in Schedule 72 and the Generation Interconnection Process, including but not limted to
initial costs incured by Idaho Power for equipment costs, installation costs and ongoing monthly
Idaho Power operations and maintenance expenses.
ARTICLE X: METERIG AN TELEMETRY
10.1 Meterig - Idaho Power shall, for the account of Seller, provide, install, and maintain Meterig
and Telemetry Equipment to be located at a mutually agreed upon location to record and measure
power flows to Idaho Power in accordance with this Agreement and Schedule 72. The Metering
Equipment wil be at the location and the type required to measure, record and report the
Facility's Net Energy, Station Use, Inadvertent Energy and maximum energy deliveries (kW) at
the Point of Delivery in a maner to provide Idaho Power adequate energy measurement data to
admnister this Agrement and to integrate this Facility's energy production into the Idaho Power
electrical system.
10.2 Telemetry - Idaho Power wil intall, operate and maintain at Seller's expense meterig,
communcations and telemetry equipment which wil be capable of providing Idaho Power with
continuous instantaneous telemetry of Seller's Net Energy and Inadvertent Energy produced and
delivered to the Idaho Power Point of Delivery to Idao Power's Designated Dispatch Facility.
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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.
11.2 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 Facilty.
ARTICLE XII: OPERATIONS
12 .1 Communcations - Idaho Power and the Seller shall maintain appropriate operating
communications through Idaho Power's Designated Dispatch Facility in accordace 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, Forced Outage or
temporary disconnection of the Facility in accordance with Schedule 72. If, for reasons
other than an event of Force Majeure or a Forced Outage, a temporary disconnection
under Schedule 72 exceeds twenty (20) days, beging with the twenty-first day of such
interrption, curailment or reduction, Seller wil be deemed to be deliverig 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,
curtilment 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 service to its customers, Idaho Power may temporarly
disconnect the Facility from Idaho Power's transmission/distribution system as specified
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within Schedule 72 or take such other reasonable steps as Idaho Power deems
appropriate.
12.2.3 Under no circumstances wil the Seller deliver Net Energy and/or Inadvertent Energy
from the Facility to the Point of Delivery in an amount that exceeds the Maximum
Capacity Amount at any moment in time. Seller's failure to limit deliveries to the
Maximum Capacity Amount wil be a Material Breach of this Agreement.
12.3 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
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.
12.4 Maintenance Coordination - The Seller and Idaho Power shall, to the extent practical, coordinate
their respective line and Facility maintenace schedules such that they occur simultaneously.
12.5 Contact Prior to Curailment - Idaho Power wil make a reasonable attempt to contact the Seller
prior to exercising its rights to interpt the interconnection or curail deliveries from the Seller's
Facility. 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 electrcal energy deliveries to Idaho
Power.
ARTICLE XII: INEMNIFICATION AN INSURCE
13.1 Indemnfication - Each Party shall agree to hold haress and to indemnfy the other Party, its
offcers, agents, affliates, subsidiares, parent company and employees against all loss, damage,
expense and liabilty to third persons for injur to or death of person or inur to property,
proximately caused by the indemnfying Party's construction, ownership, operation or
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maintenance of, or by failure of, any of such Party's works or facilities used in connection with
this Agreement. The indemnfying Party shall, on the other Party's request, defend any suit
assering a claim covered by this indemnty. The indemnfyg Pary shall pay all documented
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 limt. The deductible
for such insurance shall be consistent with curent Insurance Industry Utility practices for
similar property.
13.2.2 All Risk Property Insurance with minimum limits not less than eighty percent (80%) of
the Total Cost of the Facility. The Property Insurance coverage must be written on a
Replacement Cost basis and wil include:
(a) Standard fire policy
(b) Extended coverage endorsement; and
(c) Vandalism and malicious mischief endorsement.
(d) The deductible for such inurance shall be consistent with curent Insurance
Industry Utility practices for similar property.
13.2.3 Boiler and Machiery inurnce with mium limits not less than eighty percent (80%)
of the total Replacement Cost of the equipment covered in (a) below:
(a) All boiler and machinery coverage must be written on a "comprehensive
form" basis to provide coverage against the sudden and accidental breakdown
of all boilers, machinery and electrical equipment, turbines, generators, and
switchgear.
(b) Coverage under this insurce must be written on a Replacement Cost basis;
and
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7/6/2009
(c) The deductible for such insurance shall be consistent with current Insurance
Industry Utilty practices for similar propery.
13.2.4 Earthquake & Flood (catastrophic perils) Insurance with limits not less than eighty
percent (80%) of the Total Cost of the Facilty. The deductible for such insurance shall be
consistent with curent Insurance Industry Utility practices for similar property.
13.2.5 Business Interrption (Loss of Income) Insurance with minium daily limits not less
than twenty percent (20%) of the Facility's estimated anual income;
(a) Coverage wil include Seller's loss of earnngs when business operations are
curailed or suspended because of a loss due to an insured periL. Coverage may
be written on an actual loss sustained basis.
(b) This insurace coverage must be endorsed to both the All Risk Propery
Insurance Policy and the Boiler and Machiery Insurance Policy;
(c) The deductible for such insurance shall be consistent with curent Insurance
Industry Utilty practices for similar property.
(d) The estimated annual income shall be computed on the basis of the Net Energy
Amounts contained in paragraph 6.2.
13.2.6 The above insurance coverage shall be placed with an insurance company with an A.M.
Best Company rating of A- or better and shall include:
(a) An endorsement naming Idaho Power as an additional insured and loss payee as
applicable; and
(b) A provision stating that such policy shall not be canceled or the limts of liabilty
reduced without sixty (60) days' prior written notice to Idaho Power.
(c) In the case of the insurance coverages described in sub-paragraphs 13.2.1, 13.2.2,
13.2.3, and 13.2.4 above, the Total Cost of the Facilty wil include any Seller-
fushed Disconnection Equipment and/or Interconnection Facilities. The Total
Cost of the Facility and total Replacement Cost of equipment will be adjusted
either upward or downward to reflect the curent replacement cost of the Facility
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7/6/2009
or equipment. This adjustment wil be based on either (1) an appraisal made by,
or for, the Seller's insurance company, or (2) use of an approved "industrial cost
trend index" published by a national insurer (i.e., Factory Mutual Engineering
and Research Building Cost Index; Kemper Replacement Value Cost Trends -
Industrial Machinery & Equipment; Industrial Risk Insurers, U.S. Replacement
Cost Factors) (3) any other mutually agreed upon methodology of establishig
the total replacement cost. Such adjustment shall be made, at a minium, every
fifth Contract Year durg the term of this Agreement. A copy of these
computations and/or appraisals wil be submitted to Idaho Power for Idaho
Power's review and approval.
13.2.7 Insurance Altertives - Comprehensive General Liability Insurance as defied
in paragraph 13.2.1 wil be required at all times throughout the term of this
agreement. Alterntive arrangements creating equivalent protection for Idaho
Power in lieu of the insurance requirements specified in paragraphs 13.2.2,
13.2.3, 13.2.4 and 13.2.5 of this Agreement may be submitted to Idaho Power for
review. Only upon Idaho Power's written acceptance of these alternate
arangements may the Seller be allowed to forgo the insurance
requirements of paragraphs 13.2.2, 13.2.3, 13.2.3 and 13.2.5 of this
Agreement. Any and all acceptable alternative arangements must place Idaho
Power in an equal or better position in the event of the occurence of an insurable
event.
13.3 Seller to Provide Certificate of Insurance - As required in paragraph 4.1.6 herein and annually
thereafter, Seller shall fush Idaho Power a certificate of insurance, together with the
endorsements required therein, evidencing the coverage as set forth above.
13.4 Seller to Notify Idaho Power of Loss of Coverage - If the insurance coverage required by
paragraph 13.2 shall lapse for any reason, Seller 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
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taking 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 diligence,
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, strikes and other labor disturbances,
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 unable to
overcome. If either Pary is rendered wholly or in par unable to perform its obligations under
this Agreement because of an event of Force Majeure, both Paries shall be excused from
whatever performance is affected by the event of Force Majeure, provided that:
(l) The non-performg Party shall, as soon as is reasonably possible after the
occurence of the Force Majeure, give the other Pary written notice describing
the particulars of the occurence.
(2) The suspension of performance shall be of no greater scope and of no longer
duration tha is required by the event ofPorce Majeure.
(3) No obligations of either Pary which arose before the occurence causing the
suspension of performance and which could and should have been fuly
performed before such occurence shall be excused as a result of such
occurence.
ARTICLE XV: LIAILITY; DEDICATION
15.1 Nothig 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 undertaking by one
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Party to the other under any provision of this Agreement shall constitute the dedication of that
Party's system or any portion thereof to the other Party or to the public or affect the status of
Idaho Power as an independent public utilty 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
liabilities of the Parties are intended to be several and not joint or collective. Nothig contained
in this Agreement shall ever be construed to create an association, trust, parership or joint
venture or impose a trust or parnership duty, obligation or liabilty on or with regard to either
Pary. Each Party shall be individually and severally liable for its own obligations under this
Agreement.
ARTICLE XVII: WAIER
17.1 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 XVID: CHOICE OF LAWS AN VENU
18.1 This Agreement shall be construed and interpreted in accordace with the laws ofthe State of
Idaho without reference to its choice oflaw 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.
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ARTICLE XIX: DISPUTES AN DEFAULT
19.1 Disputes - All disputes related to or arsing under this Agreement, including, but not limted to,
the interpretation of the terms and conditions of this Agreement, wil be submitted to the
Commssion for resolution.
19.2 Notice of Default -
19.2.1 Defaults. If either Party fails to perform any of the terms or conditions of this
Agreement (an "event of default"), the nondefaulting Party shall cause notice in
writing to be given to the defaulting Pary, specifying the maer in which such
default occured. If the defaulting Pary shall fail to cure such default withi the sixty
(60) days after service 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 diligently
pursue such cure, then, the nondefaulting Pary may, at its option, termnate this
Agreement and/or pursue its legal or equitable remedies.
19.2.2 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
be cured as expeditiously as possible following occurrence of the breach.
19.3 Securty for Performnce - 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 will be a Material Breach and may only be cured by
Seller supplying evidence that the required insurance coverage has been replaced or
19.3.2
reinstated.
Debt Service Reserve Account - The Seller wil establish a debt serice reserve
account. Said debt service reserve account wil be separate from the maintence
resere account and shall be strctured as follows:
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19.3.2.1 All funds wil be prudently invested, in a guaranteed, insured account and
all cost of implementing and operating the Debt Service Reserve Account
shall be paid by the Seller. All interest eared on the funds on deposit wil
be retained in the Debt Service Reserve Account. At the end of the term of
this Agreement, any balance remainig in the Debt Service Reserve
Account shall be the property of the Seller.
19.3.2.2 Control of the Debt Service Reserve Account wil be maintained by Idao
Power through the requirement of dual signatues on the account. The only
authorized signers wil be the Chief Operating Offcer and the Chief
Financial Offcer of Idaho Power (or their respective designees) and the
Treasurer of Seller (or his!her respective designee). Accordingly, fuds wil
only be released from the Debt Servce Reserve Account upon the
signatures of both Idaho Power authorized signers or one Idaho Power
authorized signer and Seller's authorized signer.
19.3.2.3 During the period of time in which the Facility acts as securty for a first
mortgage lien which is senior to Idaho Power's securty interest in the
Facility as described in paragraph 4.1.10, Seller shall maintain a debt
service reserve account in cash or an irrevocable standby letter of credit in
an amount equal to twenty percent (20 %) of the Facility's estimted gross
Contract Year revenue rounded to the nearest $1,000. The estimated gross
Contract Year revenue is calculated to be the sum of the monthly Net
Energy Amounts specified in paragraph 6.2 multiplied by the All Energy
Price specified in paragraph 7.3.
19.3.2.4 Durg the period when the Facility is securty for a first mortgage lien that
is senior to Idaho Power's lien, fuds from the debt servce reserve account
wil only be released to the holder of the first mortgage lien. Funds from
said account shall be released only when, and only to the extent that Seller
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certifies to Idaho Power that after payment of all operating costs, the
Facility's revenues are insufficient to make full debt service and/or lease
payments on the Facility.
19.3 .2.5 Upon full satisfaction of the above-referenced first mortgage lien and when
Idaho Power's security interest becomes the senior securty interest in the
Facility, a withdrawal from the Debt Service Reserve Account may be
requested by the Seller for the amount in the debt service reserve account
which exceeds five percent (5%) of the Facility's estimated gross Contract
Year revenue rounded to the nearest $1,000. Seller shall maintain a debt
service reserve account in cash or an irrevocable standby letter of credit in
an amount equal to five percent (5%) of the Facilty's estimated gross
Contract Year revenue rounded to the nearest $1,000.
19.3.2.6 Durig the period when Idaho Power's security interest is the senior security
interest in the Facility, fuds from the debt service reserve account will only
be released to pay operating costs for the Facility.
19.3.2.7 For purposes of the debt servce reserve account, operating costs are limted
to those costs necessar for the operation of the Facility such as taxes,
insurance expenses, lease payments and other ordinar and necessar
operating expenses. Operating costs shall not include any disbursements
other than lease payments which would constitute a profit or retu on
investment.
19.3.2.8 After any release of funds from the debt service reserve account, Seller shall
be obligated to restore the debt servce reserve account to the amounts
provided for in paragraphs 19.3.2.3 or 19.3.2.5, whichever is applicable,
prior to Seller disbursing fuds which would constitute a profit or retu on
investment. Until the debt servce reserve account is fully restored, Seller
wil, within sixty (60) days of the completion of each Contract Year,
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provide Idaho Power with a report prepared by Seller's outside accountats
showing that Seller has not breached its obligations under this paragraph
19.3.2.
19.3.2.9 If the Facility has established a debt servce reserve account in a form and
amount that meets or exceeds the Debt Service Reserve Account requirements
as defined below for compliance with other paries having a financial interest
in this Facility, the Seller shall provide Idaho Power with documentation of
those requirements and upon Idaho Power's acceptance that the financial debt
service reserve requirements meet or exceed the requirements within this
Agreement, Idaho Power wil accept this financial debt service reserve account
as meeting these requirements. If Idaho Power accepts this financial debt
service resere account it wil be required that withi 60 days of the end of
each Contract Year the Seller provide Idaho Power documentation of the
balance within the financial debt service reserve account and the previous
year's activity withi the account. Idaho Power reserves the right to require
the Seller to provide a Debt Serce Reserve Account as specified below at
any time during the term of this Agreement if Idaho Power determnes that the
Seller's financial debt reserve account no longer meets or exceeds these
requirements.
19.3.2.10 Any breach of paragraph 19.3.2 by Seller wil constitute a Material
Breach of this Agreement.
19.3.3 Engineer's Certifications - Every three (3) years after the Operation Date, Seller wil
supply Idao Power with a Certification of Ongoing Operations and Maintenace
(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 cerificate wil be an event of default. Such a default
may only be cured by Seller providing the required certificate; and
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19.3.4 Licenses and Permts - During the full term of this Agreement, Seller shall maintain
compliance with all permts and licenses described in paragraph 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 wil 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 4.1.1 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 Pary of this Agreement.
ARTICLE XXI: COMMISSION ORDER
21.1 This Agreement shall become finally effective upon the Commssion's approval of all terms and
provisions hereof without change or condition and declaration that all payments to be made to
Seller hereunder shall be allowed as prudently incured expenses for ratemaking purposes.
ARTICLE XXII: SUCCESSORS AN ASSIGNS
22.1 This Agreement and all of the terms and provisions hereof shall be binding upon and inure to the
benefit of the respective successors and assigns of the Parties hereto, except that no 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 pary 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 further
act, and without need of consent or approval by the Seller, succeed to all ofIdaho Power's rights,
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obligations and interests under this Agreement. This article shall not prevent a financing entity
with recorded or secured rights from exercising all rights and remedies available to it under law
or contract. Idaho Power shall have the right to be notified by the financing entity that it is
exercising such rights or remedies.
ARTICLE XXII: MODIFICATION
23.1 No modification to this Agreement shall be valid uness it is in writing and signed by both Parties
and subsequently approved by the Commssion.
ARTICLE XXIV: TAXES
24.1 Each Party 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.
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:Contract Manager
c/o Exergy Development Group ofIdaho, LLC
802 W. Banock St., 12th Floor
Boise, ID 83702
info~exergydevelopmentgroup.com
Copy of document to:
Peter Richardson
Richardson & O'Lear Law Firm
515 N. 27th Street
Boise, ID 83702
peter~richardsonandoleary.com
To Idaho Power:
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7/6/2009
Original document to:
Senior Vice President, Delivery
Idaho Power Company
POBox 70
Boise, Idaho 83707
Email:DMinor~idahopower.com
Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
POBox 70
Boise, Idaho 83707
E-mail: rallphin~idahopower.com
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
AppendixE
AppendixF
Generation Scheduling and Reporting
Facilty and Point of Delivery
Engineer's Certifications
Forms of Liquid Securty
Wind Energy Production Forecasting
Accumulated Overpayment Amount
ARTICLE XXVII: SEVERAILITY
27.1 The invalidity or unenforceabilty 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: COUNERPARTS
28.1 This Agreement may be executed in two or more counterpars, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
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ARTICLE XXIX: ENTIR AGREEMENT
29.1 This Agreement constitutes the entire Agreement of the Paries concerng the subject matter
hereof and supersedes all prior or contemporaneous oral or wrtten agreements between the
Parties concernng the subject matter hereof.
IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be executed
in their respective names on the dates set forth below:
Idaho Power Company Payne's Ferr Wind Park, LLC
~By LtC
/' 3-/'"
By
Dan Minor
Senior Vice President, Delivery
Dated
1l! Ò~
"Idaho Power"
Dated tJ7- ¿'t- 2öd5
(7 "Seller"
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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 measuring the Facility's total energy production, Station Usage, Inadvertent Energy delivered
to Idaho Power and the maximum generated energy (kW) as recorded on the Meter Equipment and/or any
other required energy measurements to adequately admnister this Agreement.
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Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND SWITCHIG REPORT
Project Name
Month Year
Project Number:
Address
City
Meter Number:
End of Month kWh Meter Reading:
Beginning of Month kWh Meter:
Difference:
Times Meter Constant:
kWh for the Month:
Metered Demand:
Breaker Opening Record
Date Time Meter
*Breaker 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*1 Reason¡
l
I
I hereby certify that the above meter readings are
true and correct as of Midnight on the last day ofthe
above month and that the switching record is accurate
and complete as required by the Firm Energy Sales
Agreement to which I am a Party.
Signature
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Date
7/6/2009
A-2 ROUTIN REPORTING
Once the Facility has achieved its Operation Date and has operated in a reliable and consistent
maner for a reasonable period of time, the Paries may mutually agree to modify this Routine
Reporting requirement.
Idaho Power Contact Information
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 Unplanned Project outages
Call 1-800-345-1319 and leave the following information:
· Project Identification - Project Name and Project Number
· Approximate time outage occured
· Estimated day and time of project coming back online
Seller's Contact Informtion
24-Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
Project On-site Contact informtion
Telephone Number:
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IPC-E-09-20
APPENDIXB
FACILITY AN POIN OF DELNERY RECEIVED
PROJECT NO. 31315060 2009 JUL 31 AM to: 59
IDAHO PUBUC;
UTILITIES COMMISSION
Payne's Ferr Wind Park, LLC
B-1 DESCRITION OF FACILITY
21.0 MW Installed capacity wind conversion power generation facilty utilizing 14 GE Model
1500 xle wind turbine generators with standard reactive power range 0.95 lead (reactive power
leaving the generator) to 0.90 lagging.
B-2 LOCATION OF FACILITY
Near: Hagerman, il
Township 7 south, Range 12 east, County: Twin Falls, il
Section 1: WL/2SWI/4
Section 11: SEl/4NEl/4, El/2SEI/4
Section 12: Wl/2NWl/4, SWI/4
Section 13: Wl/2NWl/4, El/2NWl/4, SWI/4
Section 14: Nl/2NEl/4, SEl/4NEl/4
Section 24: El/2NWl/4
Description of Interconnection Location: 400 W, 5900 N, Hageran, connecting to the
King / Bliss 138 kV line.
Nearest Idaho Power Substation: Tuana Substation
B-3 SCHEDULED FIRST ENERGY AN OPERATION DATE
Seller has selected September 30, 2010 as the Scheduled First Energy Date.
Seller has selected September 30,2010 as the Scheduled Operation Date.
In making these selections, Seller recognzes that adequate testing of the Facility and completion
of all requirements in paragraph 5.2 of this Agreement must be completed prior to the project
being granted an Operation Date.
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7/6/2009
B-4 MAXIMUM CAPACITY AMOUN: This value wil be 21.0 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 Facility to the Idaho
Power electrical system at any moment in time.
B-5 POIN OF DELIVERY
"Point of Delivery" means, unless otherwise agreed by both Paries, the point of where the Sellers
Facilty's energy is delivered to the Idaho Power electrical system. Schedule 72 wil determne
the specific Point of Delivery for this Facilty. 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 measurng 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 unble 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 Idao
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 Facilty and the
Idaho Power electrical system, Idao Power wil confgue a revised loss calculation formula to
be agreed to by both paries and used to calculate the kWh Losses for the remainng term of the
Agreement. If at any time durg the term of this Agreement, Idaho Power determes that the
loss calculation does not correctly reflect the actual kWh losses attributed to the electrical
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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 will determne the specific metering and telemetry requirements for this Facility. At
the miimum the Metering Equipment and Telemetry equipment must be able to provide and
record hourly energy deliveries to the Point of Delivery and any other energy measurements
required to administer this Agreement. These specifications wil include but not be limted 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
communcation circuit(s) compatible to Idaho Power's communcations equipment and dedicated
to Idaho Power's use termnating at the Idaho Power facilities capable of providig Idaho Power
with continuous instantaneous informtion on the Facilities energy production. Idaho Power
provided equipment wil be owned and maintained by Idaho Power, with total cost of purchase,
installation, operation, and maintenance, including admstrative 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 Monthly Operation and Maintenance
Charges specified in Schedule 72.
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APPENDIXC
ENGINEER'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 Idao.
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 "Project."
4. That the Project, which is commonly known as the Project, 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 five (5) 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 ofthis Project.
8. That Engineer has reviewed and/or supersed 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 standads, adherence to said O&M Policy wil result in the
Project's producing at or near the design electrical output, effciency and plant factor for a twenty (20)
year period.
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7/6/2009
9. That Engineer recognzes that Idaho Power, in accordace 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
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APPENDIXC
ENGINER'S CERTIFICATION
OF
ONGOING OPERATIONS AN MAINTENANCE
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 hereinafter referred to as the
"Proj ect".
4. That the Project, which is commonly known as the Project, 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 five (5) year period.
6. That Engineer has substantial experience in the design, construction and operation of electrc
power plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer ofthis 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 opinion, based on the
Project's appearance, that its ongoing O&M has been substantially in accordance with said O&M Policy;
that it is in reasonably good operating condition; and that if adherence to said O&M Policy continues, the
Project wil continue producing at or near its design electrical output, efficiency and plant factor for the
remaining years of the Agreement.
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7/6/2009
9. That Engineer recognzes that Idaho Power, in accordance with paragraph 5.2 ofthe 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
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7/6/2009
APPENDIXC
ENGINER'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. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engieer 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 Project, is located in
Section _ Township Range , Boise Meridian, County, Idaho.
5. That Engineer recognzes that the Agreement provides for the Project to fush electrcal
energy to Idaho Power for a five (5) 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 Engieer has no economic relationship to the Design Engineer of this Project and
has made the analysis of the 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 facilities and equipment.
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7/6/2009
9. That the Project has been constructed in accordance with said plans and specifications, all
applicable codes and consistent with Prudent Electrcal Practices as that term is described in the
Agreement.
10. That the design and construction of the Project is such that with reasonable and prudent
operation and maintenance practices by Seller, the Project is capable of performng in accordace 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
opinons 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
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7/6/2009
APPENDIXD
FORMS OF LIQUID SECURTY
The Seller shall provide Idaho Power with commercially reasonable security instruents such as
Cash Escrow Securty, Guarantee or Letter of Credit as those terms are defied below or other
forms of liquid financial security that would provide readily available cash to Idaho Power to
satisfy the Delay Security, Performance Security and any other securty requirements within this
Agreement.
For the purose of this Appendix D, the term "Credit Requirements" shall mean acceptable
financial creditworthiess of the entity providing the security instruent in relation to the term of
the obligation in the reasonable judgment of Idaho Power, provided that any guarantee 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 Services, Inc. shall be deemed to
have acceptable financial creditworthiness.
1. Cash Escrow Securty - Seller shall deposit fuds in an escrow account established by the
Seller in a bankng institution acceptable to both Paries equal to the required security
amount(s). A single escrow account may be established for all securty requirements,
however detailed accounting of the individual securty requirements must be maintained by
the Seller and Seller shall be obligated to maintain the appropriate amounts to satisfy each
securty requirement within the individually identified accounts. The Seller shall be
responsible for all costs associated with establishing and maintaining the escrow account(s).
2. Guarantee or Letter of Credit Securty - Seller shall post and maintain in an amount equal to
the required securty amount(s): (a) a guranty from a party that satisfies the Credit
Requirements, in a form acceptable to Idaho Power at its discretion, or (b) an irevocable
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7/6/2009
Letter of Credit in a form acceptable to Idaho Power, in favor of Idaho Power. The Letter of
Credit wil be issued by a financial institution acceptable to both paries. A single aggregate
Guarantee or Letter of Credit may be provided for all security requirements, however detailed
accounting of the individual security requirements must be maintained by the Seller and
Seller shall be obligated to maintain the appropriate amounts to satisfy each security
requirement within the individually identified accounts. The Seller shall be responsible for all
costs associated with establishing and maintaing the Guarantee(s) or Letter(s) of Credit.
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APPENDIXE
WI ENERGY PRODUCTION FORECASTING
As specified in Commssion Order 30488, Idaho Power shall mae use of a Wind Energy Production
Forecasting model to forecast the energy production from this Facility and other QF wind generation
resources. Seller and Idaho Power wil share the cost of Wind Energy Production Forecasting equally.
The Facility's share of Wind Energy Production Forecasting is determned as specified below. Sellers
share wil not be greater than 0.1 % of the total energy payments made to Seller by Idaho Power durng the
previous Contract Year.
a. For every month of this Agreement beginnng with the first full month after the
Scheduled First Energy Date as specified in Appendix of this Agreement, the
Wind Energy Production Forecasting Monthly Cost Allocation (MCA) wil be
due and payable by the Seller. Any Wind Energy Production Forecasting
Monthly Cost Allocations (MCA) that are not reimbursed to Idaho Power shall
be deducted from energy payments to the Seller.
· As the value of the 0.1 % cap of the Facilities total energy payments wil not
be known until the first Contract Year is complete, at the end of the first
Contract Year any prior allocations that exceeded the 0.1 % cap shall be
adjusted to reflect the 0.1 % cap and if the Facility has paid the monthly
allocations a refund wil be included in equal monthly amounts over the
ensuing Contract Year. If the Facility has not paid the monthly allocations
the amount due Idaho Power wil be adjusted accordingly and the unpaid
balance wil be deducted from the ensuing Contract Year's energy payments.
b. During the first Contract Year, as the value of the 0.1 % cap of the Facilities total
energy payments wil not be known until the first Contract Year is complete,
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Idaho Power wil deduct the Facilty's calculated share of the Wind Energy
Production Forecasting costs specified in item b each month durng the first
Contract Year and subsequently refud any overpayment (payments that exceed
the cap) in equal monthly amounts over the ensuing Contract Year.
c. The cost allocation formula described below wil be reviewed and revised if
necessar on the last day of any month in which the cumulative MW nameplate
of wind projects having Commssion approved agreements to deliver energy to
Idaho Power has been revised by an action of the Commssion.
d. The monthly cost allocation wil based upon the following formula:
Where: Total MW (TMW is equal to the total nameplate rating of all QF wind
projects that are under contract to provide energy to Idao Power
Company.
Facilty MW (FMW is equal to the nameplate rating of this Facility as
specified in Appendix B.
Annual Wind Energy Production Forecasting Cost (AFCost) is equal
to the total annual cost Idaho Power incurs to provide Wind Energy
Production Forecasting. Idaho Power wil estimate the AFCost for the
curent year based upon the previous year's cost and expected costs for
the curent year. At year-end, Idaho Power wil compare the actual costs
to the estimated costs and any differences between the estimated AFCost
and the actual AFCost wil be included in the next years AFCost.
Annual Cost Allocation (ACA) = AFCost X (FMW / TMW
And
Monthly Cost Allocation (MCA) = ACA / 12
e. The Wind Energy Production Forecasting Monthly Cost Allocation (MCA) is
due and payable to Idaho Power. The MCA wil first be netted against any
monthly energy payments owed to the Seller. If the netting of the MCA against
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the monthly energy payments results in a balance being due Idaho Power, the
Facility shall pay this amount within 15 days of the date of the payment invoice.
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7/6/2009
APPENDIXF
ACCUMULATED OVERPAYMENT AMOUN
PROJECT NUBER: 31315060
PAYN'S FERRY WI PAR
The accumulated total of:
The monthly Intial Year Monthly Net Energy Amounts specified in paragraph 6.2.1 multiplied by the All
Hours Energy Price (MilVkWh) specified in paragraph 7.3 less the same monthly Intial Year Monthy
Net Energy Amounts specified in paragraph 6.2.1 multiplied by the monthly, seasonalized, Non Levelized
rates where the seasonalization factors are the same as identified in paragraph 7.3 and Non Levelized
rates are in accordance with IPUC order No. 30744 for all expired months of this Agreement and the next
12 months. In addition a cumulative interest Amount wil be calculated on the expired month's
Accumulated Overpayment Amount and included in the Accumulated Overpayment Amount based upon
the Idaho Power overall allowed rate of retur in the Idaho jursdiction, which at the time of the signing of
this agreement is 8.18 %.
This Accumulated Overpayment Amount wil be initially calculated prior to the Firt Energy Date and
then recalculated annually at the end of each Contract Year.
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APPENDIXF
TABLE OF ACCUMULATED OVERPAYMENT ENERGY RATES AS DEFIND IN THIS APPENDIX
Calenda
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Per IPUC Order 30744 and 30738
Levelized Flat Energy Prices
for a Project comig online
in 2010
Season Season Season
1 2 3
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
61.47 102.58 84.40
Non Levelized Flat Energy
Prices
Season Season Season
1 2 3
51.15 84.28 69.60
52.59 86.82 71.55
54.13 89.56 73.65
55.42 91.84 75.45
56.74 94.18 77.40
58.09 96.58 79.40
59.54 99.16 81.55
60.95 101.67 83.64
62.48 104.38 85.90
63.97 107.01 88.09
65.49 109.71 90.34
67.04 112.48 92.65
68.64 115.32 95.01
70.28 118.22 97.44
71.96 121.21 99.92
73.68 124.26 102.47
75.87 127.99 105.57
78.22 131.82 108.77
80.65 135.78 112.07
83.14 139.86 115.47
85.72 144.06 118.97
Accumulated Overpayment
Enerl! Rate
Season Season Season
1 2 3
10.31 18.30 14.80
8.88 15.76 12.85
7.33 13.02 10.75
6.04 10.74 8.95
4.73 8.40 7.00
3.38 6.00 5.00
1.92 3.42 2.85
0.52 0.91 0.76
(1.01)(1.80)(1.50)
(2.50)(4.43)(3.69)
(4.02)(7.13)(5.94)
(5.58)(9.90)(8.25)
(7.18)(12.74)(10.61)
(8.81)(15.64)(13.04)
(10.50)(18.63)(15.52)
(12.22)(21.68)(18.07)
(14.40)(25.41)(21.7)
(16.75)(29.24)(24.37)
(19.18)(33.20)(27.67)
(21.67)(37.28)(31.07)
(24.25)(41.48)(34.57)
APPENDIXF
EXAPLE OF ACCUMULATED OVERPAYMENT CALCULATION
The calculation below is for example puroses only - to calculate the Accumulated Overpayment Amounts for this
Agreement it wil be required tht the actul values from the agrement are used in this calculation.
Example Assumptions:
Project becomes Operational as of Jan 1,2010.
Project ternates Agreement as of July 1, 2010.
Expired Month:
Estimated Mwh Accumulated Interest applied Total Accumulated
(per arcle 6.2.1 of Overpayment Calculated to expired Overpayment includig
the Agreement)Energy Rate Overpayment Months interest
8.18%
Jan-l0 15,000 14.80 $222,000 $1,513.30 $223513
Feb-l0 20,000 14.80 $296,000 $1,523.62 $521,037
Mar-lO 16,000 10.31 $164,960 $3,551.73 $689,549
Apr-10 21,000 10.31 $216,510 $4,700.42 $910,759
Mav-lO 13,000 10.31 $134,030 $6,208.34 $1,050,997
Jun-10 14,000 14.80 $207,200 $7,164.30 $1,265,362
Plus Next 12 Months:
Jul-lO 14,000 18.30 $256,200 $1,521,562
Aug-lO 15,000 18.30 $274,500 $1,796,062
Sep-10 18,000 14.80 $266,400 $2.062,462
Oct-l 0 13,000 14.80 $192,400 $2,254,862
Nov-10 15,000 18.30 $274,500 $2,529,362
Dec-10 14,000 18.30 $256,200 $2,785,562
Jan-ll 15,000 12.85 $192,750 $2,978,312
Feb-II 20,000 12.85 $257,000 $3,235,312
Mar-II 16,000 8.88 $142,080 $3,377,392
Aor-11 21,000 8.88 $186,480 $3,563,872
May-II 13,000 8.88 $115,440 $3,679,312
Jun-11 14,000 12.85 $179,900 $3.859.212
Based on this example - if this example Project were to terminate this Ilevelized" agreement in July
2011. The calculated accumulated Overpayment Amount would be $3,859,212 which would be payable
to Idaho Power in addition to any other damages due Idaho Power.