20100505Application.pdf

DONOVAN E. WALKER
Senior Counsel
dwalke~idahopower.com
esIDA~POR(I
An IDACORP Company
May 4,2010
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-10-15
IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY
FOR APPROVAL OF A FIRM ENERGY SALES AGREEMENT FOR THE
SALE AND PURCHASE OF ELECTRIC ENERGY BETWEEN IDAHO
POWER COMPANY AND CARGILL INCORPORATED
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Idaho Power
Company's Application in the above matter.
Donovan E. Walker
DEW:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise. 10 83702
DONOVAN E. WALKER (ISB No. 5921)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalkercæidahopower.com
Inordstromcæidahopower.com
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
F::r: l~,... .,
201,11 ù, Y''.ï/¡. -6,
. PM 4: 55
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANY
AND CARGILL INCORPORATED.
)
) CASE NO. IPC-E-10-15
)
) APPLICATION
)
)
)
)
Idaho Power Company ("Idaho Powet' or the "Company"), in accordance with
Idaho Code § 61-503 and RP 52 and the applicable provisions of the Public Utilty
Regulatory Policies Act of 1978 ("PURPA"), hereby respectfully applies to the Idaho
Public Utilties Commission ("IPUC" or the "Commission") for an Order approving the
Firm Energy Sales Agreement between Idaho Power and Cargil Incorporated ("Cargil")
under which Cargil would sell and Idaho Power would purchase electric energy
generated by the Bettencourt B6 Dairy Anaerobic Digester Power Project ("Facilty")
located near Jerome, 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 utilities
purchase power produced by cogenerators or small power producers that obtain
qualifying facilty ("OF") status. The purchase price a OF receives for the sale of its
power is generally referred to as the avoided cost rate and is computed to be equal to
the incremental cost to an electric utilty of electric energy or capacity or both, which, but
for the purchase from the OF, such utilty 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 utilties to enter into fixed-term obligations for the purchase of energy from
OFs, and to implement FERC's PURPA rules.
2. Cargil has been sellng energy from this Facilty to Idaho Power on a non-
firm basis under a Schedule 86 uniform agreement since November of 2009.
II. THE FIRM ENERGY SALES AGREEMENT
3. On April 30, 2010, Idaho Power and Cargil entered into a Firm Energy
Sales Agreement ("Agreement") pursuant to the terms and conditions of the various
Commission Orders applicable to this PURPA Agreement. See, Order Nos. 30415,
30488, 30738, and 30744. A copy of the Agreement is enclosed with this Application as
Attachment NO.1. The Agreement is for a term of 10 Contract Years and contains the
non-Ievelized published avoided cost rates established by the Commission in Order No.
30744 for energy deliveries of less than 10 average megawatts ("MWs").
APPLICATION - 2
4. As this Facilty is already providing energy to Idaho Power under an
existing Schedule 86 agreement, the Agreement specifies that any compliance data
(i.e., nameplate capacity rating, engineering certification, insurance certificates, etc.)
that were previously provided under the Schedule 86 requirements wil be reviewed and
used for compliance with this Agreement if applicable.
5. The nameplate rating of this Facilty is 2.25 MWs. As defined in
paragraph 1.13 of the Agreement and as described in paragraph 4.1.3 of the
Agreement, Cargil wil be required to provide data on the Facilty that Idaho Power wil
use to confirm that under normal and/or average conditions the Facilty wil not exceed
10 average MWs on a monthly basis.
6. Cargil has elected a Scheduled Operation Date of thirty (30) days past the
date this Agreement is approved by the Commission. If the Facilty has not achieved its
Operation Date by that date, Delay Liquidated Damages and associated Delay Security
provisions within this Agreement are applicable.
7. Section 21.1 of the Agreement provides that the Agreement wil not
become effective until the Commission has approved all of the Agreement's terms and
conditions and declared that all payments Idaho Power makes to Cargil for purchases
of energy wil be allowed as prudently incurred expenses for ratemaking purposes.
Should the Commission approve this Agreement, Idaho Power intends to consider the
Effective Date of the Agreement to be April 30, 2010.
8. The interconnection for this Facilty was completed prior to Idaho Power
taking delivery under the existing Schedule 86 agreement. All applicable
interconnection charges and monthly operation and maintenance charges under
APPLICATION - 3
Schedule 72 have already been assessed and collected from Cargil in association with
the existing Schedule 86 agreement.
II. APPLICABLE RATES
9. On March 16,2010, in Order No. 30125 issued in Case No. GNR-E-10-01,
the Commission adopted new published avoided cost rates for the purchase by Idaho
Power of capacity energy from PURPA OFs. The rates adopted in Order No. 31025 are
approximately 10 percent lower than the rates previously adopted in Case No. GNR-E-
09-01, Order No. 30744. By its terms, Order No. 31025 applies to new PURPA
contracts executed on and after March 16,2010. Because the Agreement is dated April
30, 2010, Order No. 31025 would require that the rates to be paid Cargil under the
Agreement would be the rates set out in Order No. 31025 rather than the previous,
higher rates approved by the Commission in Order No. 30744. However, this
Commission has recognized in prior Orders that there are situations when. OF rates are
changed that it is appropriate to include a prior vintage of rates in a current PURPA
contract.
1 In several cases litigated in the early to mid-1990s, the Commission
determined, and the Idaho Supreme Court affrmed, certain criteria that a OF developer
must satisfy in order to establish an entitlement to sell energy at a particular published
avoided cost rate.2 One of the criteria that would qualify a particular generating facilty
to receive the superseded rate, requires that the developer have executed a power
sales agreement with the utilty at the rate in question before a successor rate becomes
effective. If the OF cannot meet the first criteria, the second criteria requires that prior
1 The Idaho Supreme Court has confirmed that it is within the Commission's jurisdiction to
determine which vintage of OF rates should apply to a PURPA contract. See Empire Lumber v.
Washington Water Power, 114 Idaho 191, 755 P.2d 1229 (1988) and AW. Brown Co., Inc., v. Idaho
Power Company, 121 Idaho 812,828 P.2d 841 (1992).
2 AW. Brown, Rosebud, 131 Idaho.
APPLICATION - 4
to the new rates effective date, the OF developer must have filed a meritorious
complaint alleging that the project was sufficiently mature and far enough along in the
contracting process that but for the conduct of the utilty company, the developer would
have been able to sign a contract with the utilty containing the superseded rates.
10. In this case, Cargil had not signed a contract with Idaho Power including
the rates approved by Order No. 30744 on or before March 16, 2010, nor has it filed a
complaint alleging that Idaho Power acted unreasonably or in bad faith by not signing
the Agreement by the March 16 cut-off date. However, this Commission has not
concluded that the requirement of the filng of such a complaint is always the most
effective way of presenting the facts in these "grandfathered" cases. By signing. this
Agreement and voluntarily presenting it to the Commission, Idaho Power has concluded
that Cargil meets the second test described above and should be entitled to the rates
established by Order No. 30744 in Case No. GNR-E-09-01.
11. As the Commission might expect, the Company has received a number of
requests for "grandfathering" of OF contracts. In making a determination to file and
support an application urging that a particular OF project is entitled to the Order No.
30744 rates, the Company concluded that a project must have met ALL of the following
criteria prior to March 16,2010.
a. Interconnection and Transmission
i. Filed an interconnection application; and
ii. Received and accepted an interconnection feasibilty study
report for the project and paid any requested study deposits (or established credit) for
the next phase of the interconnection process in accordance with Schedule 72; and
APPLICATION - 5
iii. Received confirmation from Idaho Power that transmission
capacity is available for the project and/or received and accepted transmission capacity
study results and cost estimates.
b. Purchase Power Agreement
i. An agreement was materially complete and would have
been executed by both parties prior to March 16, 2010, and except for routine Idaho
Power final processing, an agreement would. have been executed prior to March 16,
2010.
12. It is Idaho Powets opinion that the Cargil B6 Facilty meets all of the
above-referenced criteria. Obviously, the interconnection criteria were met at the time
that the Facilty was interconnected with Idaho Power to make sales of non-rim energy
under the Schedule 86 agreement.
13. With the respect to the power purchase agreement criteria, Cargill and
Idaho Power had finally resolved all outstanding contract issues and Cargil had agreed
to execute the Agreement after being notified that the project had passed Idaho Powets
final internal review process. Both parties expected that final review to be a relatively
straightforward process given that the parties had previously executed a substantially
similar Firm Energy Sales Agreement for the Dry Creek Dairy Anaerobic Digester
Project which was approved by the Commission in Order No. 31034 issued on April 1,
2010. The B6 Facilty Agreement was commercially and legally similar to the Dry Creek
Firm Energy Sales Agreement. Approximately 10 days prior to March 16, 2010, Idaho
Powets management started the process of reviewing the agreed-upon draft for final
APPLICATION - 6
approval and execution. The final Sarbanes-Oxley review process and the routine
internal approval had not been completed as of March 16, 2010.
14. In addition to the above-described facts, Idaho Power respectfully
requests that the Commission consider the following additional facts. The B6 Facilty is
a small project that is already certified as a OF and is currently sellng power to Idaho
Power under a Schedule 86 contract. The Agreement contains the most recent terms
and conditions, including the liquidated damages and security provisions previously
approved by the Commission in the contracts for the Arena Drop hydro project and the
Dry Creek anaerobic digester projects contracts, Order Nos. 31060 and 31034
respectively.
15. Based on the foregoing, Idaho Power believes that the Cargil B6 contract
meets the criteria established by the Commission in its prior Orders and the
Commission should approve the Agreement as presented.
iv. MODIFIED PROCEDURE
16. Idaho Power believes that a hearing is not necessary to consider the
issues presented herein and 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.
v. COMMUNICATIONS AND SERVICE OF PLEADINGS
17. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
APPLICATION - 7
Donovan E. Walker, Senior Counsel
Lisa Nordstrom, Lead Counsel
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
dwalkercæidahopower.com
Inordstromcæidahopower.com
Randy C. Allphin
Energy Contract Administrator
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
rallphincæidahopower.com
VI. REQUEST FOR RELIEF
18. Idaho Power Company respectully 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
Cargil Incorporated 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 Cargil Incorporated be allowed as prudently incurred expenses for
ratemaking purposes.
Respectfully submitted this 4th day of May 2010.
DONOVAN E. WALKER
Attorney for Idaho Power Company
APPLICATION - 8
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 4th day of May 2010 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:
Cargil Incorporated
Sanchayita Ray, Director of Finance..
Cargil Environmental Finance
9350 Excelsior Boulevard, MS 139-4-A
Hopkins, Minnesota 55343
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
Email
~
Donovan E. Walker
APPLICATION - 9
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-10-15
IDAHO POWER COMPANY
ATTACHMENT NO.1
FIR ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPAN
AN
CARGILL, INCORPORATED
TABLE OF CONTENTS
Aricle
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
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23
24
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29
TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment
Environmental Attributes
Facility and Interconnection
Metering and Telemetry
Records
Operations
Indemnfication and Insurance
Force Majeure
Liabilty; 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
Severability
Counterpars
Entire Agreement Signatures
Appendix A
AppendixB
AppendixC
AppendixD
FIR ENERGY SALES AGREEMENT
(10 aMW or Less)
Project Name: B6 Anaerobic Digester Project
Project Number: 31616150
THIS AGREEMENT, entered into on this t¡rJdaYOf (h q 'f
CARGILL, INCORPORATED (Seller), and IDAHO POWER COMPAN, an Idaho corporation (Idaho
2010 between
Power), hereinafter sometimes referred to collectively as "Paries" or individually as "Pary."
WITNSSETH:
WHEREAS, Seller has designed, constructed, owns, maintains and operates an electric
generation facilty; and
Whereas, Seller is curently selling energy from this Facility to Idaho Power under a Schedule 86,
Uniform Agreement for the Purchase of Non Firm Energy from a Qualifying Facility dated June 30, 2009.
WHREAS, Seller wishes to sell, and Idaho Power is wiling to purchase, firm electric energy
produced by the Seller's Facilty.
WHREAS, the current Schedule 86, Uniform Agreement for the Purchase of Non Firm Energy
from a Qualifyng Facility dated June 30, 2009 shall automatically termnate at the same time that the
Operation Date occurs for this Agreement.
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 term
shall have the following meanngs:
1.1 "Base Energy" - Monthly Net Energy less than 110% of the monthly Net Energy Amount as
specified in paragraph 6.2 of this Agreement.
1.2 "Commssion" - The Idaho Public Utilities Commssion.
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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,
5.4,5.5,5.6 and 5.7.
1.5 "Delay Period" - All days past the Scheduled Operation Date until the Seller's Facility achieves
the Operation Date.
1.6 "Delay Price" - The current month's Mid-Columbia Market Energy Cost minus the curent
month's All Hours Energy Price specified in paragraph 7.3 of this Agreement. If this calculation
results in a value less than 0, the result of this calculation wil be O.
1.7 "Designated Dispatch Facilty" - Idaho Power's Systems Operations Group, or any subsequent
group designated by Idaho Power.
1.8 "Facility" - That electric generation facility described in Appendix B of this Agreement.
1.9 "First Energy Date" - The day commencing at 00:01 hours, Mountain Time, following the day
that Seller has satisfied the requirements of Aricle IV and the Seller begins delivering energy to
Idaho Power's system at the Point of Delivery.
1.10 "Heayy Load Hours" - The daily hours beginnng at 7:00 am, ending at 1 1 :00 pm Mountain
Time, (16 hours) excluding all hours on all Sundays, New Years Day, Memorial Day, Fourth of
July, Labor Day, Thansgiving and Chrstmas.
1 . 1 1 "Inadvertent Energy" - Electric energy Seller does not intend to generate. Inadvertent energy is
more particularly described in paragraph 7.5 of this Agreement.
1.12 "Interconnection Facilities" - All equipment specified in Schedule 72.
1.13 "Intial Capacity Determnation" - The process by which Idaho Power confirms that undei:
normal or average design conditions the Facility wil generate at no more tha 10 average MW
per month and is therefore eligible to be paid the published rates in accordance with Commssion
Order No. 29632.
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1.14 "Light Load Hours" - The daily hours beginnng at 11 :00 pm, ending at 7:00 am Mountain Time
(8 hours), plus all other hours on all Sundays, New Years Day, Memorial Day, Fourh of July,
Labor Day, Thansgiving and Christmas.
1.15 "Losses" - The loss of electrical energy expressed in kilowatt hours (kWh) occurrng as a result
of the transformation and transmission of energy between the point where the Facilty'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.
1.16 "Market Energy Reference Price" - Eighty-five percent (85%) of the Mid-Columbia Market
Energy Cost.
1.17 "Material Breach" - A Default (paragraph 19.2.1) subject to paragraph 19.2.2.
1.18 "Maxmum Capacity Amount" - The maximum capacity (MW) of the Facility wil be as
specified in Appendix B of this Agreement.
1.19 "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 electric generation plant and Idaho Power's system.
1.20 "Mid- Columbia Market Energy Cost" - The monthly weighted average of the daily on-peak and
off-peak Dow Jones Mid-Columbia Index (Dow Jones Mid-C Index) prices for non-firm energy.
If the Dow Jones Mid-Columbia Index price is discontinued by the reporting agency, both Parties
wil mutually agree upon a replacement index, which is similar to the Dow Jones Mid-Columbia
Index. The selected replacement index wil be consistent with other similar agreements and a
commonly used index by the electrical industr.
1.21 "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 transformers and circuit
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.
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1.22 "Net Energy" - All of the electric energy produced by the Facility, less Station Use, less Losses,
expressed in kilowatt hours (kWh). 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.
1.23 "Operation Date" -The day commencing at 00:01 hours, Mountain Time, following the day that
all requirements of paragraph 5.2 have been completed.
1.24 "Point of Delivery" - The location specified in Appendix B, where Idaho Power's and the
Seller's electrical facilties are interconnected and the energy from this Facility is delivered to the
Idaho Power electrical system
1.25 "Prudent Electrical Practices" - Those practices, methods and equipment that are commonly and
ordinarily used in electrical engineering and operations to operate electrc equipment lawfully,
safely, dependably, effciently and economically.
1.26 "Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates
achieving the Operation Date. It is expected that the Scheduled Operation Date provided by the
Seller shall be a reasonable estimate of the date that the Seller anticipates that the Seller's Facilty
shall achieve the Operation Date.
1.27 "Schedule 72" - Idaho Power's Tariff 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 Facility into the Idaho Power electrical system as specified withi
Schedule 72.
1.28 "Season" - The three periods identified in paragraph 6.2.1 of this Agreement.
1.29 "Special Facilities" - Additions or alterations of trasmission and/or distribution lines and
tranformers as described in Schedule 72.
1.30 "Station Use" - Electric energy that is used to operate equipment that is auxilar or otherwise
related to the production of electricity by the Facility.
1.31 "Surlus Energy" - Is (1) Net Energy produced by the Seller's Facility and delivered to the Idaho
Power electrical system during the month which exceeds 110% of the monthly Net Energy
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Amount for the corresponding month specified in paragraph 6.2. or (2) If the Net Energy
produced by the Seller's Facilty and delivered to the Idaho Power electrical system during the
month is less than 90% of the monthly Net Energy Amount for the corresponding month
specified in paragraph 6.2, then all Net Energy delivered by the Facility to the Idaho Power
electrical system for that given month or (3) All Net Energy produced by the Seller's Facility and
delivered by the Facility to the Idaho Power electrical system prior to the Operation Date.
1.32 "Total Cost of the Facility" - The total cost of structures, equipment and appurenances.
ARTICLE II: NO RELIANCE ON IDAHO POWER
2.1 Seller Independent Investigation - Seller warrants and represents to Idao Power that in enterig
into this Agreement and the undertakng by Seller of the obligations set forth herein, Seller has
investigated and determned that it is capable of performng hereunder and has not relied upon
the advice, experience or expertise of Idaho Power in connection with the transactions
contemplated by this Agreement.
2.2 Seller Independent Experts - All professionals or experts including, but not limited to, engineers,
attorneys or accountants, that Seller may have consulted or relied on in underakng the
tranactions contemplated by this Agreement have been solely those of Seller.
ARTICLE II: WARTIES
3.1 No Waranty by Idaho Power - Any review, acceptance or failure to review Seller's design,
specifications, equipment or facilties shall not be an endorsement or a confiration by Idaho
Power and Idaho Power makes no warrties, expressed or implied, regarding any aspect of
Seller's design, specifications, equipment or facilities, including, but not limited to, safety,
durability, reliabilty, strength, capacity, adequacy or economic feasibility.
3.2 Qualifying Facilty Status - Seller warants that the Facilty is a "Qualifying Facilty," as that term
is used and defined in 18 CFR 292.201 et seq. After initial qualification, Seller wil take such
steps as may be required to maintain the Facility's Qualifying Facility status durng the term of
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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 Facility's Qualifyng
Facility status and associated support and compliance documents at anytime durng the term of
this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
4.1 The Seller is curently selling energy from this Facility to Idaho Power under a Schedule 86,
Uniform Agreement for the Puchase of Non Firm Energy from a Qualifyng Facility dated June
30,2009. In the event any of these requirements duplicate requirements of the Non-Firm
agreement and the Seller has previously satisfied these requirements, Idaho Power shall review
the Seller's previously supplied information. If the previously supplied information is applicable
and current, Idaho Power may rely on the previously supplied informtion to satisfy these
requirements.
Prior to the First Energy Date and as a condition ofIdaho Power's acceptance of deliveries of
energy from the Seller under this Agreement, 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. as a certified Qualifyng Facilty.
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 opinion that Seller is in substantial
compliance with said permts as of the date of the Opinon Letter. The Opinion Letter
wil be in a form acceptable to Idaho Power and wil acknowledge that the attorney
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rendering 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 pedorm the Intial Capacity Deternation. Such data wil include
but not be limited to, Nameplate Capacity, equipment specifications, prie mover data,
resource characteristics, normal and/or average operating design conditions and Station
Use data. Upon receipt of this information, Idaho Power wil review the provided data
and if necessar, request additional data to complete the Intial Capacity Determnation
within a reasonable time.
4.1.3.1 If the Maximum Capacity specified in Appendix B of ths Agreement and the
cumulative manufacture Nameplate Capacity rating of the individual generation
unts at this Facility is less than 10 MW. The Seller shall submit detailed,
manufacturer, verifiable data of the Nameplate Capacity ratings of the actual
individual generation unts to be installed at this Facility. Upon verification by
Idaho Power that the data provided establishes the combined Nameplate Capacity
rating of the generation unts to be installed at this Facility is less than 10 MW, it
wil be deemed that the Seller has satisfied the Intial Capacity Determnation for
this Facilty.
4.1.4 Nameplate Capacity - Submit to Idaho Power maufactuer's and engineerig
documentation that establishes the Nameplate Capacity of each individual generation unt
that is included within this entire Facility. 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 &
Construction Adequacy and an Engineer's Certification of Operations and Maintenance
(O&M) Policy as described in Commssion Order No. 21690. These certificates wil be
in the form specified in Appendix C but may be modified to the extent necessar to
recognze the different engineering 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
unit that Seller has satisfied all interconnection requirements.
4.1.8 Network Resource Designation - Provide written confiration from Idaho Power that the
Seller's Facility has been designated as a network resource capable of delivering firm
energy up to the amount of the Maximum Capacity.
4.1.9 Written Acceptance - Request and obtain written confiration from Idaho Power that all
conditions to acceptance of energy have been fulfilled. Such written confition shall be
provided within a commercially reasonable time following the Seller's request and wil
not be uneasonably withheld by Idaho Power.
ARTICLE V: TERM AN OPERATION DATE
5.1 Ter - Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective
on the date first written and shall continue in full force and effect for a perod often (10) Contract
Years from the Operation Date.
5.2 Operation Date - The Operation Date may occur only after the Facility has achieved all of the
following:
a) Achieved the First Energy Date.
b) Commssion approval of this Agreement in a form acceptable to Idaho Power has
been received.
c) Seller has demonstrated to Idaho Power's satisfaction that the Facility is complete and
able to provide energy in a consistent, reliable and safe maner.
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d) Seller has requested an Operation Date from Idaho Power in a written format.
e) Seller has received written confirmation from Idaho Power of the Operation Date.
This confirmation will not be uneasonably withheld by Idaho Power.
5.3 Operation Date Delay - Seller shall cause the Facility to achieve the Operation Date on or before the
Scheduled Operation Date. Delays in the interconnection and transmission network upgrade study,
design and construction process that are not Force Majeure events accepted by both Paries shall not
prevent Delay Damages being calculated as specified in this Agreement. As this Facility is already
sellng energy to Idaho Power under a Non Fir Energy sales agreement, it is expected that the First
Energy Date and the Operation Date for this Agreement shall be the same time and date.
5.3.1 If the Operation Date occurs after the Scheduled Operation Date but on or prior to 90
days following the Scheduled Operation Date, Seller shall pay Idaho Power Delay
Liquidated Damages calculated at the end of each calendar month after the Scheduled
Operation Date 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 number of days in the Delay Period in the
curent month) multiplied by the current month's Delay Price.
5.3.2 If the Operation Date does not occur within ninety (90) days following the Scheduled
Operation Date the Seller shall pay Idaho Power Delay Liquidated Damages, in addition
to those provided in paragraph 5.3.1, calculated as follows:
Forty five dollars ($45) multiplied by the Maximum Capacity with the Maximum
Capacity being measured in kW.
5.4 If Seller fails to achieve the Operation Date within ninety (90) days following the Scheduled
Operation Date, such failure wil be a Material Breach and Idaho Power may termnate this
Agreement at any time until the Seller cures the Material Breach. Additional Delay Damages
beyond those calculated in 5.3.1 and 5.3.2 wil be calculated and payable using the Delay
Damage calculation described in 5.3.1 above for all days exceeding 90 days past the Scheduled
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4/19/2010
Operation Date until such time as the Seller cures this Material Breach or Idaho Power tennnates
this Agreement
5.5 Seller shall pay Idaho Power any calculated Delay Damages or Delay Liquidated Damages within
7 days of when Idaho Power calculates and presents any Delay Damages or 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 shall draw funds from the Delay
Security provided by the Seller in an amount equal to the calculated Delay Damages or Delay
Liquidated Damages.
5.6 The Parties agree that the damages Idaho Power would incur due to delay in the Facility
achieving the Operation Date on or before the Scheduled Operation Date would be diffcult or
impossible to predict with certainty, and that the Delay Liquidated Damages are an appropriate
approximation of such damages.
5.7 The Seller shall; 1) submit evidence acceptable to Idaho Power that the Seller has obtained a
favorable feasibilty study report from the interconnection provider at the time the Seller executes
this Agreement and 2) within thirty (30) days of the date of a Commssion Order as specified in
Aricle XXI approving this Agreement the 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.
If the Seller's Facility achieves its Operation Date withi thirty (30) days pf the date of a
Commssion Order as specified in Aricle XXI approving this Agreement the Seller shall not be
required to post this liquid securty.
5.7.1 Delay Securty The greater of forty five ($45) multiplied by the Maximum Capacity with
the Maximum Capacity being measured in kW or the sum of three month's estimated
revenue. Where the estimated three months of revenue is the estimated revenue
associated with the first three full months following the estimated Scheduled Operation
Date, the estimated kWh of energy production as specified in paragraph 6.2.1 for those
three months multiplied by the All Hours Energy Price specified in paragraph 7.3 for
each of those three months.
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4/19/2010
5.7.1.1 In the event (a) Seller provides Idaho Power with certification that (1) a
generation interconnection agreement specifying a schedule that will enable this
Facility to achieve the Operation Date no later than the Scheduled Operation
Date has been completed and the Seller has paid all requied interconnection
costs or (2) a generation interconnection agreement is substantially complete and
all material costs of interconnection have been identified and agreed upon and
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 Facilty wil not achieve its Operation Date by the Scheduled Operation
Date or (2) if the Seller does not maintain compliance with the generation
interconnection agreement, the full amount of the Delay Securty as calculated in
paragraph 5.7.1 wil be subject to reinstatement and wil be due and owing within
5 business days from the date Idaho Power requests reinstatement. Failure to
timely reinstate the Delay Security wil be a Material Breach of this Agreement.
5.7.2 Idaho Power shall release any remainng securty posted hereunder after all calculated Delay
Damages and/or Delay Liquidated Damages are paid in full to Idaho Power and the earlier of (1)
30 days after the Operation Date has been achieved or (2) 60 days after the Agreement has been
termnated.
ARTICLE VI: PURCHASE AN SALE OF NET ENERGY
6.1 Delivery and Acceptance of Net Energy - Except when either Pary's performce 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 Deliver. All Inadvertent Energy produced by the Facility wil also be
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delivered by the Seller to Idaho Power at the Point of Delivery. At no time wil the total amount
of Net Energy and/or Inadvertent Energy produced by the Facility and delivered by the Seller to
the Point of Delivery exceed the Maximum Capacity Amount.
6.2.1 Net Energy Amounts - Seller intends to produce and deliver Net Energy in the following
montWy amounts: Intial Year MontWy Net Energy Amounts:
Season 3
Month kWh
March 1,000,000
April 1,000,000
May 800,000
July 800,000
August 800,000
November 1,000,000
December 1,000,000
June 775,000
September 775,000
October 1,000,000
Januar 1,000,000
Febru 1,000,000
Season 1
Season 2
6.2.2 Ongoing MontWy Net Energy Amounts - Seller shall initially provide Idaho Power with
one year of montWy generation estimates (Intial Year MontWy Net Energy Amounts)
and beginnng at the end of month nie and every three months thereafter provide Idaho
Power with an additional three months of forward generation estimates beyond those
generation estimates previously provided. Ths information wil be provided to Idaho
Power by written notice in accordance with paragraph 25.1, no later than 5:00 PM of the
5th business day following the end of the previous month. If the Seller does not provide
the Ongoing MontWy Net Energy Amounts in a timely maer, Idaho Power wil use the
most recent 3 months of the Intial Yea MontWy Net Energy Amounts specified in
paragraph 6.2.1 for the next 3 months of montWy Net Energy amounts.
6.2.3 Seller's Adjustment of Net Energy Amount-
6.2.3.1 No later than the Operation Date, by written notice given to Idaho Power in
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accordance with paragraph 25.1, the Seller may revise all of the previously
provided Intial Year Monthly Net Energy Amounts.
6.2.3.2 Beginnng with the end of the 9th month after the Operation Date and at the end
of every third month thereafter: (l) the Seller may not revise the imediate next
three months of previously provided Net Energy Amounts, (2) but by written
notice given to Idaho Power in accordance with pargraph 25.1, no later than
5:00 PM of the 5th business day following the end of the previous month, the
Seller may revise all other previously provided Net Energy Amounts. Failure to
provide timely written notice of changed amounts wil be deemed to be an
election of no change.
6.2.4 Idaho Power Adjustment of Net Energy Amount - If Idaho Power is excused from
accepting the Seller's Net Energy as specified in paragraph 12.2.1 or if the Seller declares
a Suspension of Energy Deliveries as specified in paragraph 12.3.1 and the Seller's
declared Suspension of Energy Deliveries is accepted by Idaho Power, the Net Energy
Amount as specified in paragraph 6.2 for the specific month in which the reduction or
suspension under paragraph 12.2.1 or 12.3.1 occur wil be reduced in accordace with
the following:
Where:
NEA Curent Month's Net Energy Amount (Paragraph 6.2)
SGU a.) IfIdao Power is excused from accepting the Seller's Net
Energy as specified in paragraph 12.2.1 this value wil be
equal to the percentage of curtailment as specified by
Idaho Power multiplied by the TGU as defined below.
b.) If the Seller declares a Suspension of Energy Deliveries as
specified in paragraph 12.3.1 this value wil be the sum of
the individual generation units size ratings as specified in
Appendix B that are impacted by the circumstances
causing the Seller to declare a Suspension of Energy
Deliveries.
TGU Sum of all of the individual generator ratings of the generation
unts at this Facilty as specified in Appendix B of this
agreement.
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RSH
TH
Actual hours the Facility's Net Energy deliveries were either
reduced or suspended under paragraph 12.2.1 or 12.3.1
Actual total hours in the curent month
Resulting formula being:
~~~~::~gy = NEA _ (( ~~~ X NEA ) X (~: ) )
Amount
This Adjusted Net Energy Amount wil be used in applicable Surlus Energy calculations for
only the specific month in which Idaho Power was excused from accepting the Seller's Net
Energy or the Seller declared a Suspension of Energy.
6.3 Unless excused by an event of Force Majeure, Seller's failure to deliver Net Energy in any
Contract Year in an amount equal to at least ten percent (10%) of the sum of the Intial Year Net
Energy Amounts as specified in paragraph 6.2 shall constitute an event of default.
ARTICLE VII: PURCHASE PRICE AN METHOD OF PAYMENT
7.1 Base Energy Heavy Load Purchase Price - For all Base Energy received during Heavy Load
Hours, Idaho Power wil pay the non-levelized energy price in accordance with Commssion
Order 30744,30738 and adjusted in accordace with Commssion Order 30415 for Heavy Load
Hour Energy deliveries with seasonalization factors applied:
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Season 1 - (73.50 %)
Mils/kWh
57.98
59.54
61.22
62.62
64.05
65.52
67.10
68.63
70.29
71.91
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Season 2 - (120.00 %)
Mils/kWh
94.67
97.21
99.95
102.23
104.57
106.97
109.55
112.05
114.77
11 7.40
Season 3 - (100.00 %)
Mils/kWh
78.89
81.01
83.29
85.19
87.14
89.14
91.29
93.38
95.64
97.83
4/19/2010
2020
2021
73.56
75.26
120.10
122.87
100.08
102.39
7.2 Base Energy Light Load Purchase Price - For all Base Energy received during Light Load Hours,
Idaho Power wil pay the non-levelized energy price in accordance with Commssion Order
30744, 30738 and adjusted in accordance with Commssion Order 30415 for Light Load Hour
Energy deliveries with seasonalization factors applied:
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Season 1 - (73.50 %)
Mils/kWh
52.63
54.19
55.87
57.27
58.70
60.17
61.75
63.28
64.94
66.56
68.21
69.90
Season 2 - (120.00 %)
Mils/kWh
85.93
88.47
91.21
93.49
95.83
98.23
100.81
103.32
106.03
108.66
11 1.36
114.13
Season 3 - (100.00 %)
Mils/kWh
71.61
73.73
76.01
77.91
79.86
81.86
84.01
86.10
88.36
90.55
92.80
95.11
7.3 All Hours Energy Price - The price to be used in the calculation of the Surlus Energy Price and
Delay Damage Price shall be the non-levelized energy price in accordance with Commssion
Order 30744 and 30738 with seasonalization factors applied:
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Season 1 - (73.50 %)
Mils/kWh
55.60
57.16
58.84
60.24
61.67
63.14
64.72
66.25
67.91
69.53
71.18
72.87
Season 2 - (120.00 %)
Mils/kWh
90.78
93.32
96.06
98.34
100.68
103.08
105.66
108.17
110.88
113.51
116.21
118.98
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Season 3 - (100.00 %)
Mils/kWh
75.65
77.77
80.05
81.95
83.90
85.90
88.05
90.14
92.40
94.59
96.84
99.15
4/19/2010
7.4 Surplus Energy Price - For all Surlus Energy, Idaho Power shall pay to the Seller the curent
month's Market Energy Reference Price or the All Hours Energy Price specified in paragraph
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 delivered.
(For example Januar contains 744 hours. 744 hours times 10,000 kW = 7,440,000
kWh. Energy delivered in Januar in excess of 7,440, 000 kWh in this example
would be Inadvertent Energy.)
7.5.2 Although Seller intends to design and operate the Facilty 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 any payments due to Idaho Power wil be disbured
to the Seller within 30 days of the date which Idaho Power receives and accepts the
documentation of the monthly Net Energy actually delivered to Idaho Power as specified in
Appendix A. If Idaho Power disputes in good faith part or all of an invoice or the supporting
documentation, then Idaho Power shall provide notice of the disputed portion, including a written
explanation of the dispute, and pay any undisputed portion no later than the due date.
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 Utilties Commssion and Afton Energy, Inc., 107 Idaho
781, 693 P.2d 427 (1984), Idaho Power Company v. Idaho Public Utilities Commssion, 107
Idaho 1122,695 P.2d 1261 (1985), Afton Energy, Inc, v. Idaho Power Company, 11 1 Idaho 925,
729 P.2d 400 (1986), Section 210 of the Public Utilities Regulatory Policies Act of 1978 and 18
CFR §292.303-308.
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/
ARTICLE VII: ENVIRONMENTAL ATTRIUTES
8.1 Seller retains ownership under this Agreement of Green Tags and Renewable Energy Credits
(RECs), or the equivalent environmental attributes, directly associated with the production of
energy from the Seller's Facility sold to Idaho Power.
ARTICLE IX: FACILITY AN INTERCONNCTION
9.1 Design of Facilty - Seller has designed, constructed, installed, owns, operates and wil maintain
the Facility and any Seller-owned Interconnection Facilities so as to allow safe and reliable
generation and delivery of Net Energy and Inadvertent Energy to the Idaho Power Point of
Delivery for the full term of the Agreement.
ARTICLE X: METERIG AN TELEMETRY
10.1 Meterig and Telemetry - Idaho Power has, for the account of Seller, provided, installed, and
wil maintain Meterig Equipment to be located at a mutually agreed upon location to record and
measure power flows to Idaho Power in accordance with Schedule 72 at the Point of Delivery.
The Metering Equipment wil be at the location and the type required to measure, record and
report the Facilty's Net Energy, Station Use, Inadvertent Energy and maximum energy deliveries
(kW) in a maner to provide Idaho Power adequate energy measurement data to admnister this
Agreement and to integrate this Facility's energy production into the Idaho Power electrical
system.
ARTICLE XI - RECORDS
11.1 Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate total generation, Net Energy, Station Use, Inadvertent Energy
and maximum generation (kW) records in a form and content acceptable to Idaho Power.
11.2 Inspection - Either Pary, after reasonable notice to the other Pary, shall havethe right, during
normal business hours, to inspect and audit any or all generation, Net Energy, Station Use,
Inadvertent Energy and maximum generation (kW) records pertaing to the Seller's Facility.
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Each party shall be responsible for their own costs associated with any reasonable Inspection
request.
ARTICLE XII: OPERATIONS
12.1 Communications - Idaho Power and the Seller shall maintain appropriate operating
communications through Idaho Power's Designated Dispatch Facility in accordance with
Appendix A of this Agreement.
12.2 Energy Acceptance-
12.2.1 Idaho Power shall be excused from accepting and paying for Net Energy or accepting
Inadvertent Energy which would have otherwise been produced by the Facility and
delivered by the Seller to the Point of Delivery, if it is prevented from doing so by an
event of Force Majeure, or temporar disconnection of the Facility in accordance with
Schedule 72. If, for reasons other than an event of Force Majeure, a temporary
disconnection under Schedule 72 exceeds twenty (20) days, begiing with the twenty-
first day of such interption, curailment or reduètion, Seller wil be deemed to be
delivering Net Energy at a rate equivalent to the pro rata daily average of the amounts
specified for the applicable month in paragraph 6.2. Idaho Power wil notify Seller when
the interrption, curailment or reduction is termnated.
12.2.2 If, in the reasonable opinon of Idaho Power, Seller's operation of the Facility or
Interconnection Facilities is unsafe or may otherwise adversely affect Idaho Power's
equipment, personnel or service to its customers, Idaho Power may temporarily
disconnect the Facility from Idaho Power's trasnnssionldistribution system as specified
within Schedule 72 or take such other reasonable steps as Idaho Power deem
appropriate.
12.2.3 If Idaho Power is unable to accept the energy from this Facility and is not excused from
accepting the Facilty's energy, Idaho Power's damages shall be linnted to only the value
of the estimated energy that Idaho Power was unable to accept. Idaho Power wil have
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no responsibilty to pay for any other costs, lost revenue or consequential damages the
Facility may incur.
12.3 Seller Declared Suspension of Energy Deliveries
12.3.1 If the Seller's Facility experiences a forced outage due to equipment failure which is not
caused by an event of Force Majeure or by neglect, disrepair or lack of adequate
preventative maintenance of the Seller's Facilty, Seller may, after giving notice as
provided in paragraph 12.3.2 below, temporarily suspend all deliveries of Net Energy to
Idaho Power from the Facility or from individual generation untes) within the Facilty
impacted by the forced outage for a period of not less than 48 hours to correct the forced
outage condition ("Declared Suspension of Energy Deliveries"). The Seller's Declared
Suspension of Energy Deliveries wil begin at the start of the next full hour following the
Seller's telephone notification as specified in paragraph 12.3.2 and wil continue for the
time as specified (not less than 48 hours) in the written notification provided by the
Seller. In the month(s) in which the Declared Suspension of Energy occured, the Net
Energy Amount wil be adjusted as specified in paragraph 6.2.4.
12.3.2 If the Seller desires to initiate a Declared Suspension of Energy Deliveries as provided in
paragraph 12.3.1, the Seller wil notify the Designated Dispatch Facility by telephone.
The beginng hour of the Declared Suspension of Energy Deliveries wil be at the
earliest the next full hour after mang telephone contact with Idaho Power. The Seller
wil, within 24 hours after the telephone contact, provide Idaho Power a written notice in
accordance with Aricle XXV that wil contain the beginng hour and duration of the
Declared Suspension of Energy Deliveries and a description of the conditions that caused
the Seller to intiate a Declared Suspension of Energy Deliveries. Idaho Power wil
review the documentation provided by the Seller to determne Idaho Power's acceptace
of the described forced outage as qualifyng for. a Declared Suspension of Energy
Deliveries as specified in paragraph 12.3.1. Idaho Power's acceptance of the Seller's
forced outage as an acceptable forced outage will be based upon the clear documentation
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provided by the Seller that the forced outage is not due do an event of Force Majeure or
by neglect, disrepair or lack of adequate preventative maintenance of the Seller's Facility.
12.4 Scheduled Maintenance - On or before January 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 acceptabilty of the proposed schedule.
The Paries determnation as to the acceptability of the Seller's timetable for scheduled
maintenance wil take into consideration Prudent Electrical Practices, Idaho Power system
requirements and the Seller's preferred schedule. Neither Pary shall uneasonably withhold
acceptance of the proposed maintenance schedule.
12.5 Maintenance Coordination - The Seller and Idaho Power shall, to the extent practical, coordinate
their respective line and Facilty maintenance schedules such that they occur simultaneously.
12.6 Contact Prior to Curailment - Idaho Power wil make a reasonable attempt to contact the Seller
prior to exercising its rights to interrpt interconnection or curail deliveries from the Seller's
Facility. Seller understands that in the case of emergency circumstances, real time operations of
the electrical system, and/or unplanned events Idaho Power may not be able to provide notice to
the Seller prior to interrption, curailment, or reduction of electrical energy deliveries to Idaho
Power.
ARTICLE XII: INEMNIFICATION AN INSURCE
13.1 Indemnfication - Each Party shall agree to hold haress and to indemnify the other Pary, its
officers, agents, affiiates, subsidiares, parent company and employees against all loss, daage,
expense and liability to third persons for injur to or death of person or injur to property,
proximately caused by the indemfying Party's (a) construction, ownership, operation or
maintenance of, or by failure of, any of such Pary's works or facilities used in connection with
this Agreement or (b) negligent or intentional acts, erors or omissions. The indemnfyng Party
shall pay all documented costs, including reasonable attorney fees that may be incured by the
other Pary in enforcing this indemnty.
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4/19/2010
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 propery damage
with limits equal to $1,000,000, each occurence, combined single limit. The deductible
for such insurance shall be consistent with curent Insurance Industry Utilty practices for
similar property.
13.2.2 The above insurance coverage shall be placed with an insurance company with an A.M.
Best Company rating of A- or better and shall include:
(a) An endorsement naming Idaho Power as an additional insured and loss payee as
applicable; and
(b) A provision stating that such policy shall not be canceled or the limits of liabilty
reduced without sixty (60) days' prior written notice to Idaho Power.
13.3 Seller to Provide Certificate of Insurance - As required in paragraph 4.1.5 herein and anually
thereafter, Seller shall 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 immediately notify Idaho Power in writing.
The notice wil advise Idaho Power of the specific reason for the lapse and the steps Seller is
takg 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, storm, wars, hostilties, civil strife, strikes and other labor distubances,
earthquakes, fires, lightning, epidemics, sabotage, or changes in law or regulation occurng after
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4/19/2010
the effective date, which, by the exercise of reasonable foresight such party could not reasonably
have been expected to avoid and by the exercise of due diligence, it shall be unable to overcome.
If either Pary is rendered wholly or in part unable to perform its obligations under this
Agreement because of an event of Force Majeure, both Parties shall be excused from whatever
performce is affected by the event of Force Majeure, provided that:
(1) The non-perfonnng Party shall, as soon as is reasonably possible after the
occurence of the Force Majeure, give the other Party written notice describing
the particulars of the occurence.
(2) The suspension of performance shall be of no greater scope and of no longer
duration than is required by the event of Force Majeure.
(3) No obligations of either Party which arose before the occurence causing the
suspension of perormnce and which could and should have been fully
performed before such occurrence shall be excused as a result of such
occurence.
ARTICLE XV LIAILITY; DEDICATION
15.1 Limitation of Liabilty Nothing in this Agreement shall be construed to create any duty to, any
standard of care with reference to, or any liabilty to any person not a Party to this Agreement.
Neither party shall be liable to the other for any indirect, special, consequential, nor puntive
damages, except as expressly authorized by this Agreement. Consequential damges will
include, but not be limited to, the value of renewable energy credits and, if the Facility is fueled
by gas produced by an anaerobic digester system, any diminution or loss of anaerobic activity due
to the inabilty ofIdaho Power to accept energy from the Facility.
15.2 Dedication No undertaking by one Party to the other under any provision ofthis Agreement shall
constitute the dedication of that Pary's system or any portion thereof to the Pary or the public or
affect the status ofIdaho Power as an independent public utility corporation or Seller as an
independent individual or entity.
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4/19/2010
ARTICLE XVI: SEVERA OBLIGATIONS
16.1 Except where specifically stated in this Agreement to be otherwise, the duties, obligations and
liabilties of the Paries are intended to be several and not joint or collective. Nothing contained
in this Agreement shall ever be construed to create an association, trst, parnership or joint
venture or impose a trst or parnership duty, obligation or liabilty on or with regard to either
Party. 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 XVII: CHOICE OF LAWS AN VENU
. 18.1 This Agreement shall be construed and interpreted in accordance with the laws of the State of
Idaho without reference to its choice of law provisions.
18.2 Venue for any litigation arsing out of or related to this Agreement wil lie in the District Cour of
the Fourh Judicial District ofIdaho in and for the County of Ada.
ARTICLE XIX: DISPUTES AN DEFAULT
19.1 Disputes - All disputes related to or arising under this Agreement, including, but not limted to,
the interpretation of the term and conditions of this Agreement, wil be submitted to the
Commssion for resolution.
19.2 Notice of Default -
19.2.1 Defaults. "Default" means, with respect to a Pary (the defaulting Pary), the
occurence of any of the following; (i) the failure to make, when due, any payment
required pursuant to this Agreement; (ii) the failure to perform any covenant or
obligation set forth in this Agreement; (iii) such Par becomes bankpt or insolvent
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4/19/2010
(however evidenced), fies a petition (or otherwise commences, authorizes or
acquiesces to the commencement of a proceeding or cause of action with respect to it)
under any bankptcy proceeding or similar laws for the protection of creditors, or has
such a petition fied against it (if such petition is not withdrawn, dismissed,
discharged, stayed or restrained, in each case withi five (5) days of the presentation
thereof); or (iv) such Party makes an assignent or any general arangement for the
benefit of creditors Items (iii) and (iv) shall be considered Material Breaches.
If either Party Defaults, as defined above, the nondefaulting Party may cause notice in
writing to be given to the defaulting Party, specifyng the manner in which such
default occured. If the defaulting Pary shall fail to cure such default withi the sixty
(60) days after serice of such notice, or if the defaulting Pary reasonably
demonstrates to the other Party that the default can be cured within a commercially
reasonable time but not within such sixty (60) day period and then fails to dilgently
pursue such cure, then, the nondefaulting Pary may, at its option, termate this
Agreement and/or pursue its legal or equitable remedies.
19.2.3 Material Breaches - The notice and cure provisions in paragraph 19.2.2 do not apply
to defaults identifieq in this Agreement as Material Breaches. Material Breaches must
be cured as expeditiously as possible following occurence of the breach.
19.3 Security for Pedormance - Prior to the Operation Date and thereafter for the full term of this
Agreement, Seller wil provide Idaho Power with the following:
19.3.1 insurance - Evidence of compliance with the provisions of paragraph 13.2. If Seller
fails to comply, such failure wil be a Material Breach and may only be cured by
19.2.2
19.3.2
Seller supplying evidence that the required insurnce coverage has been replaced or
reinstated;
Engineer's Certifications - Every three (3) years after the Operation Date, Seller wil
supply Idaho Power with a Certification of Ongoing Operations and Maintennce
(O&M) from a Registered Professional Engineer licensed in the State of Idaho, which
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19.3.3
Certification of Ongoing 0 & M shall be in the form specified in Appendix C. Seller's
failure to supply the requied certificate wil be an event of default. Such a default
may only be cured by Seller providing the required certificate; and
Licenses and Permts - During the ful 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 ratemakig purposes.
ARTICLE XXII: SUCCESSORS AN ASSIGNS
22.1 This Agreement and all of the term and provisions hereof shall be binding upon and inure to the
benefit of the respective successors and assigns of the Parties hereto, except that no assignent
hereof by either Party shall become effective without the written consent of both Paries being
first obtained. Such consent shall not be unreasonably withheld. Notwithstanding the foregoing,
any pary which Idaho Power may consolidate, or into which it may merge, or to which it may
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conveyor transfer substantially all of its electric utility assets, shall automatically, without fuher
act, and without need of consent or approval by the Seller, succeed to all of Idaho Power's rights,
obligations and interests under this Agreement. Ths 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 Paries
and subsequently approved by the Commssion.
ARTICLEXXW: TAXES
24.1 Each Pary shall pay before delinquency all taxes and other governental charges which, if failed
to be paid when due, could result in a lien upon the Facilty or the Interconnection Facilities.
Seller shall be responsible for and pay all property taxes and Seller shall bear those taxes and fees
which are incured before the passage of title from Seller to Buyer. Buyer shall bear only those
taxes and fees which are incured concurent with or after the passage of title from Seller to
Buyer.
ARTICLE XXV: NOTICES
25.1 All wrtten 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:Cargil Environmental Finace
Attn: Sanchayita Ray
Director Finance
9350 Excelsior Boulevard
MS l39-4-A
Hopkins, MN 55343
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E-mail: sanchayitaJay~cargili.com
To Idaho Power:
Original document to:
Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
Email:jimmller~idahopower.com
Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
POBox 70
Boise, Idaho 83707
E-mail: rallphinayidaopower.com
Either Pary may change the contact person and/or address informtion listed above, by providing written
notice from an authorized person representing the Party.
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
AppendixC
AppendixD
Generation Scheduling and Reporting
Facilty and Point of Delivery
Engineer's Certifications
Forms of Liquid Security
ARTICLE XXVII: SEVERAILITY
27.1 The invalidity or unenforceability of any term or provision of this Agreement shall not affect the
validity or enforceability of any other term 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 counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instruent.
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ARTICLE XXIX: ENTIR AGREEMENT
29.1 This Agreement constitutes the entire Agreement of the Parties concerng the subj ect matter
By
Dated
hereof and supersedes all prior or contemporaneous oral or written 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 Cargil
~L~~~J
Sr. Vice President, Power Supply
Jay Ritzen
Mana g Director, Cargil Envionmental
Finance division of Cargil, Incorporated
5'4.10 1itb~i "Seller"
Dated
"Idaho Power"
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APPENDIX A
A-I MONTHLY POWER PRODUCTION AN SWICHING 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 readings on the Idaho Power Meter Equipment
measurng the Facilty's total energy production and Station Usage delivered to Idaho Power and the
maximum generated energy (kW) as recorded on the Metering Equipment and/or any other required
energy measurements to adequately administer this Agreement. This document shall be the document to
enable Idaho Power to begi the energy payment calculation and payment process. The meter readings
on this report shall not be used to calculate the actul payment, but instead wil be a check of the
automated meter reading information that wil be gathered as described in item A-2 below:
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Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
Project Name
Month Year
Project Nnmber:
Address
ZipCity
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
Facilty
Output
Station
Usage
*Reason
Phone Number:
Station
Usage
Metered
Maximum Generation
kW
Net Generation
Breaker Closing Record
Date Time Meter
I hereby certify that the above meter readings are
true and correct as of Midnight on the last day of the
above month and that the switching record is accurate
and complete as required by the Firm Energy Sales
Agreement to which I am a Party.
Signature
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4/19/2010
A-2 AUTOMATED METER READING COLLECTION PROCESS
Monthly, Idaho Power wil use the provided Metering and Telemetry equipment and processes to collect
the meter reading informtion from the Idaho Power provided Metering Equipment that measures the Net
Energy and energy delivered to supply Station Use for the Facility recorded at 12:00 AM (Midnght) of
the last day of the month..
The meter information collected wil include but not be limited to energy production, Station Use, the
maximum generated power (kW) and any other required energy measurements to adequately admnister
this Agreement.
A-3 ROUTIN REPORTING
Once the Facility has achieved its Operation Date and has operated in a reliable and consistent
manner for a reasonable period of time, the Paries may mutually agree to modify this Routine
Reporting requirement.
Idaho Power Contact Inormation
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
. Current Meter Reading
· Estimated Generation for the curent day
· Estimated Generation for the next day
Planed and Unplaned Project outages
Call 1 -800-345- 1319 and leave the following informtion:
· Project Identification -Project Name and Project Number
· Approximte time outage occured
· Estimated day and time of project coming back online
Seller's Contact Information
24-Hour Project Operational Contact
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Name:
Telephone Number:
Cell Phone:
Ryan Coleman
208-340-6421
570-905-5799
Project On-site Contact informtion
Telephone Number:
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APPENDIXB
FACILITY AN POINT OF DELIVERY
PROJECT NO. 31615100
B6 Anaerobic Digester
B- 1 DESCRITION OF F ACIUTY
(Must include the Nameplate Capacity rating and V AR capability (both leading and lagging) of all
generation units to be included in the Facility.)
Two - GE Jenbacker 416 Gensets. 1138 kW, 1890 KVA 60 HZ 1693 A ~ p.f. = .08 480 V
V AR Capabilty (both leading and lagging): 0.8 - 1.0 lagging
B-2 LOCATION OF FACILITY
Near: Jerome, Idaho
Sections: l2 Township: 8S Range: l6E _County: Gooding, ID.
Description of Interconnection Location: The Point of Interconnection for the B6 Anerobic
Digester Project wil be the low-side bushings on the padmounted transformer (BBD6). Nearest
Idaho Power Substation: HYA-043.
B-3 SCHEDULED FIRST ENERGY AN OPERATION DATE
Seller has selected 30 days past the date this Agreement is approved by the Commssion as
specified in paragraph 21.1 of this Agreement as the Scheduled First Energy Date.
Seller has selected 30 days past the date this Agreement is approved by the Commssion as
specified in paragraph 21.1 of this Agreement as the Scheduled Operation Date.
In making these selections, Seller recognzes that adequate testing of the Facilty 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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B-4 MAXIMUM CAPACITY AMOUN
This value wil be 2.13 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 POINT OF DELIVERY
"Point of Delivery" means, unless otherwise agreed by both Parties, the point of where the Sellers
Facility's energy is delivered to the Idaho Power electrical system. Schedule 72 wil determe
the specific Point of Delivery for this Facility. The Point of Delivery identified by Schedule 72
wil become an integral par 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 Idaho
Power Point of Delivery. This loss calculation wil be initially set at 2% of the kWh energy
production recorded on the Facility generation metering equipment. At such time as Seller
provides Idaho Power with the electrical equipment specifications (transformer loss
specifications, conductor sizes, etc) of all of the electrical equipment between the Facilty and the
Idaho Power electrical system, Idaho Power wil confgue a revised loss calculation formula to
be agreed to by both parties and used to calculate the kWh Losses for the remainig ter 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
equipment between the Facilty and the Idaho Power electrical system, Idaho Power may adjust
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the calculation and retroactively adjust the previous months kWh loss calculations.
B-7 METERIG AN TELEMETRY
Schedule 72 wil determne the specific metering and telemetry requirements for this Facility. At
the minimum the 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 admnister this Agreement. These specifications wil include but not be limited to
equipment specifications, equipment location, Idaho Power provided equipment, Seller provided
equipment, and all costs associated with the equipment, design and installation of the Idaho
Power provided equipment. Seller wil arange for and make available at Seller's cost
communcation circuit(s) compatible with Idaho Power's communcations equipment and
dedicated to Idaho Power's use termnating at the Idaho Power facilities capable of providing
Idaho Power with continuous instantaneous 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 admnistrative cost to be
reimbursed to Idaho Power by the Seller. Payment of these costs wil be in accordace 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.
B-8 NETWORK RESOURCE DESIGNATION AN TRASMISSION SERVICE REQUEST
Idaho Power cannot accept or pay for generation from this Facility until a Tranmission Servce
Request ("TSR") and a Network Resource Designation ("NR") application have been accepted
by Idaho Power's delivery business unt. Federal Energy Regulatory Commssion ("FERC")
Rules require Idaho Power to prepare and submit the TSR and NR. Because much of the
information Idaho Power needs to prepare the TSR and NR is specific to the Seller's Facility,
Idaho Power's ability to fie the TSR and NR in a timely manner is contingent upon timely
receipt of the required information from the Seller. Prior to Idaho Power submitting the TSR
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and/or NR for this Facility, the Seller shall be required to execute an agreement with Idaho
Power requesting Idaho Power to complete and submit the TSR and/or NR application. Withi
this agreement the Seller shall take responsibilty for all costs incured by Idaho Power in
preparg and submitting these applications. Seller's failure to provide complete and accurate
information in a timely manner can delay the First Energy Date and may result in Seller
paying higher costs for interconnection.
i.) Transmission Service Request (TSR)- Idaho Power wil prepare and submit the
TSR within a reasonable period of time after the Seller (a) has executed an
agreement with Idaho Power requesting Idaho Power submit a TSR application
and (b) provides wrtten confiration that the Generation Interconnection
Agreement ("GIA") between Seller and Idaho Power's delivery business unt has
been .executed for this Facility and (c) provides all of the Facilty-specific details
required to complete the TSR.
ii.) Network Resource Designation - Idaho Power wil complete and fie the NR
application within a reasonable period of time after (a) Seller has executed an
agreement with Idaho Power requesting Idaho Power submit a NR application
and (b) this Agreement has been executed by both parties and( c) the TSR (if
required) has been filed and accepted and (d) all necessary inormation has been
received from the Seller to enable Idao Power to complete the NR application.
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APPENDIXC
ENGINER'S CERTIFICATION
OF
OPERATIONS & MAITENANCE POLICY
The undersigned , on behalf of himself and Cargill,
Incorporated, hereinafter collectively referred to as "Engineer," hereby states and certifies to the Seller as
follows:
1 . That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between
Idaho Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No. and is hereinafter referred to as
the "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 recognizes that the Agreement provides for the Project to fush electrical energy
to Idaho Power for a 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 of this Project.
8. That Engineer has reviewed and/or supervsed the review of the Policy for Operation and
Maintenance ("0&M") for this Project and it is his professional opinion that, provided said Project has
been designed and built to appropriate standards, adherence to said O&M Policy wil result in the
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Project's producing at or near the design electrical output, effciency and plant factor for a ten (10) year
period.
9. That Engineer recognzes that Idaho Power, in accordance with paragraph 5.2 of the Agreement,
is relying on Engineer's representations and opinions contained in this Statement.
10. That Engineer certifies that the above statements are complete, true and accurate to the best of his
knowledge and therefore sets his hand and seal below.
By
(P .E. Stamp)
Date
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APPENDIXC
ENGINER'S CERTIFICATION
OF
ONGOING OPERATIONS AN MAITENANCE
The undersigned , on behalf of hielf and
Cargill, Incorporated, hereinafter collectively referred to as "Engieer," hereby states and certifies to the
Seller as follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State ofIdaho.
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
"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 Idao Power for a ten (10) 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 of this Project.
8. That Engineer has made a physical inspection of said Project, its operations and maintenance
records since the last previous certified inspection. It is Engineer's professional 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, effciency and plant factor for the
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remaining years of the Agreement.
9. That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement,
is relying on Engineer's representations and opinions contained in this Statement.
10. That Engineer certifies that the above statements are complete, true and accurate to the best of his
knowledge and therefore sets his hand and seal below.
By
(P .E. Stamp)
Date
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4/19/2010
APPENDIXC
ENGINER'S CERTIFICATION
OF
DESIGN & CONSTRUCTION ADEQUACY
The undersigned , on behalf of himself and Cargil,
Incorporated, 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 ofIdaho.
2.That Engineer has reviewed the Fir Energy Sales Agreement, hereinafter "Agreement",
between Idaho Power as Buyer, and as Seller, dated .
3.That the cogeneration or small power production project, which is the subject of the
Agreement and this Statement, is identified as IPCo Facility No and is hereinafter
referred to as the "Project".
4.That the Project, which is commonly known as the 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 year period.
6.That Engineer has substantial experence 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 Engieer 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, electrcal work, generating equipment, prime mover conveyance system, Seller
fushed Interconnection Facilities and other Project facilities and equipment.
9.That the Project has been constrcted in accordance with said plans and specifications, all
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applicable codes and consistent with Prudent Electrical Practices as that term is described in the
Agreement.
10. That the design and construction of the Project is such that with reasonable and prudent
operation and maintenance practices by Seller, the Project is capable ofpedormng in accordance with the
terms of the Agreement and with Prudent Electrical Practices for a ten (10) year period.
11. That Engineer recognzes that Idaho Power, in accordance with paragraph 5.2 of the
Agreement, in interconnecting the Project with its system, is relying on Engineer's representations and
opinions contained in this Statement.
12. That Engineer certifies that the above statements are complete, true and accurate to the
best of his knowledge and therefore sets his hand and seal below.
By
(P .E. Stamp)
Date
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4/19/2010
1)
APPENDIXD
FORMS OF LIQUID SECURY
The Seller shall provide Idaho Power with commercially reasonable securty instruents such as
Cash Escrow Security, Guarantee or Letter of Credit as those term are defined below or other
forms of liquid financial securty that would provide readily available cash to Idaho Power to
satisfy the Delay Security requirement withi this Agreement.
For the purose ofthis 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 creditwortess.
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 Delay Securty.
2. Guarantee or Letter of Credit Securty - Seller shall post and maintain in an amount
equal to the Delay Securty: (a) a guaranty from a pary that satisfies the Credit
Requirements, in a form acceptable to Idaho Power at its discretion, or (b) a Letter of
Credit in a form acceptable to Idaho Power, in favor of Idaho Power. The Letter of
Credit wil be issued by a financial institution acceptable to both paries.
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