20100525Application.pdf

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DONOVAN E. WALKER
Senior Counsel
dwalkertmidahopower.com
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etlDA~PORQi
An IDACORP Company
May 25,2010
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-10-18
IN THE MATTER OF THE APPLICA TlON OF IDAHO POWER COMPANY
FOR APPROVAL OF A FIRM ENERGY SALES AGREEMENT WITH NEW
ENERGY THREE LLC FOR THE SALE AND PURCHASE OF ELECTRIC
ENERGY FROM THE DOUBLE B DAIRY ANAEROBIC DIGESTOR
PROJECT
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,~~WcL
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]
dwalker(Çidahopower.com
Inordstrom(Çidahopower.com
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
R i:C. r- iV enL-., ".L'i if i-L)
lOlOMAY 25 PlU2=34
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT WITH NEW ENERGY
THREE, LLC, FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY
FROM THE DOUBLE B DAIRY
ANAEROBIC DIGESTOR PROJECT.
)
) CASE NO. IPC-E-10-18
)
) 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 New Energy Three, LLC
("New Energy") under which New Energy would sell and Idaho Power would purchase
electric energy generated by the Double B Dairy Anaerobic Digester Power Project
("Facilty") located in Cassia County, 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 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.
II. THE FIRM ENERGY SALES AGREEMENT
2. On May 24, 2010, Idaho Power and New Energy entered into a Firm
Energy Sales Agreement ("Agreement") for the Facilty 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 15
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 ("MW").
APPLICATION - 2
3. The nameplate rating of this Facilty wil be 2 MW. As defined in
paragraph 1.21 of the Agreement and as described in paragraph 4.1.3 of the
Agreement, New Energy 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 MW on a monthly basis.
4. New Energy has elected a Scheduled Operation Date of December 1,
2012, for the Facilty. 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.
5. Section 21.1 of the Agreement provides that the Agreement wil not
become effective unti the Commission has approved all of the Agreement's terms and
conditions and declared that all payments Idaho Power makes to New Energy for
purchases of energy wil be allowed as prudently incurred expenses for ratemaking
purposes.
6. All applicable interconnection study charges under Schedule 72 have
been assessed and collected from New Energy. The final interconnection Feasibilty
Study is complete and the final Facilty Study for the Facilty is underway. Idaho Power
Power Supply has made application for applicable transmission capacity and has been
notified that transmission capacity is available.
II. APPLICABLE RATES
7. 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
APPLICATION - 3
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 May
24, 2010, Order No. 31025 would require that the rates to be paid New Energy under
the Agreement would be the rates set out in Order No. 31025 rather than the 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 affirmed, 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 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 utility containing the superseded rates.
8. In this case, New Energy had not signed a contract with Idaho Power to
purchase the Facilty generation on or before March 16, 2010. On April 15, 2010, New
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 A.W. Brown Co., Inc., v. Idaho
Power Company, 121 Idaho 812,828 P.2d 841 (1992).
2 A. W. Brown, Rosebud, 131 Idaho.
APPLICATION - 4
Energy filed a Complaint at the Commission alleging that it was entitled to 3 contracts
containing the higher Order No. 30744 rates. Upon further review of the facts, and by
signing this agreement and voluntarily submitting it to the Commission, Idaho Power
has concluded that New Energy 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. 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
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 prior to March 16,
2010, and except for routine Idaho Power final processing, an agreement would have
been executed by both parties prior to March 16, 2010.
9. It is Idaho Powets opinion that the New Energy Facilty meets all of the
above-referenced criteria. With respect to the power purchase agreement criteria, New
APPLICATION - 5
Energy and Idaho Power had resolved all material outstanding contract issues prior to
March 16, 2010. Both parties expected that final review of the contract would be a
relatively straightforward process. However, in early February, the Company became
aware of some new procedural requirements from FERC that affected the way that the
Facility would qualify for a Network Resource designation and thereby obtain the
transmission needed to bring the power to be generated by the Facilty from the
interconnection to the Company load centers. The new procedure required some
changes to the internal process at Idaho Power. Idaho Power embarked upon
interpreting the regulations and implementing a process to be in compliance. In Idaho
Powets opinion, the Agreement would have been signed by both parties prior to March
16, 2010, except for the time required by Idaho Power to implement the new internal
transmission and network resource process and, as a result, the Facilty should qualify
for a contract including the Order No. 30744 rates. New Energy is current in all of its
interconnection study payments and so as long as New Energy continues to provide
requested information in a timely manner and pay invoices on time, it appears that the
interconnection can be completed in time for New Energy to achieve its Scheduled
Operation Date for the Facilty.
10. The Agreement contains the most recent terms and conditions, including
the liquidated damages and security provisions previously approved by the Commission
in the Arena Drop and the Dry Creek dairy cases, Order Nos. 31060 and 31034,
respectively.
APPLICATION - 6
11. Based on the foregoing, Idaho Power believes that the Agreement meets
the criteria established by the Commission in its prior Orders and the Commission
should approve the Agreement as presented.
iv. MODIFIED PROCEDURE
12. Idaho Power believes that a hearing is not necessary to consider the
issues presented herein and respectully 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
13. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
Donovan E. Walker, Senior Counsel
Lisa Nordstrom, Lead Counsel
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
dwalker(Çidahopower.com
Inordstrom(Çidahopower.com
Randy C. Allphin
Energy Contract Administrator
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
rallphin(Çidahopower.com
Vi. REQUEST FOR RELIEF
14. 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 New
Energy Three, LLC, without change or condition; and (3) declaring that all payments for
purchases of energy under the Firm Energy Sales Agreement between Idaho Power
APPLICATION - 7
Company and New Energy Three, LLC, be allowed as prudently incurred expenses for
ratemaking purposes.
Respectfully submitted this 25th day of May 2010.
DONOVAN E. WALKER
Attorney for Idaho Power Company
APPLICATION - 8
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 25th day of May 2010 I served a true and correct
copy of the foregoing APPLICATION upon the following named parties by the method
indicated below, and addressed to the following:
New Energy One, LLC
Attn: Laura Knothe, PE.
New Energy One, LLC
8720 Vic Lane
Middleton, Idaho 83644
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
Email
Dean J. Miler
McDEVITT & MILLER LLP
420 West Bannock Street
P.O. Box 2564
Boise, Idaho 83701
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
_ Email joe(Çmcdevitt-miler.com
~ z:clt/ -;;alker
APPLICATION - 9
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-10-18
IDAHO POWER COMPANY
ATTACHMENT NO.1
..
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
NEW ENERGY THRE, LLC
TABLE OF CONTENTS
Article
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TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale of Net Energy
Purchase Prce and Method of Payment
Environmental Attributes
Facility and Interconnection
Metering and Telemetry
Records
Operations
Indemnification 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 Terms and Conditions
Severability
Counterparts
Entire Agreement Signatures
Appendix A
AppendixB
Appendix C
AppendixD
FIRM ENERGY SALES AGREEMENT
(10 aMW or Less)
Project Name: Double B Dairy
Project Number: 31616120
THIS AGREEMENT, entered into on this 2!ay of fh it t
THREE, LLC, an Idaho limited liability company (Seller), and IDAHO POWER COMPANY, an Idaho
2010 between NEW ENERGY
corporation (Idaho Power), hereinafter sometimes referred to collectively as "Parties" or individually as "Part."
WITNESSETH:
WHEREAS, Seller wil design, construct, own, maintain and operate an electric generation facility; and
WHEREAS, Seller wishes to sell, and Idaho Power is wiling to purchase, firm electric energy produced
by the Seller's Facility.
THEREFORE, In consideration of the mutual covenants and agreements hereinafter set forth, the
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 "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 Commission.
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 5.8.
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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 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 "Facility" - That electrc 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 Article IV and the Seller begins delivering energy to Idaho
Power's system at the Point of Delivery.
1.0 "Heavy Load Hours" - The daily hours beginning at 7:00 am, ending at 11:00 pm Mountain Time, (16
hours) excluding all hours on all Sundays, New Years Day, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Chrstmas.
1.11 "Inadvertent Energy" - Electric energy Seller does not intend to generate. Inadvertent energy is more
particularly described in paràgraph 7.5 of this Agreement.
1.12 "Interconnection Facilities" - All equipment specified in Schedule 72.
1.13 "Initial Capacity Determination" - 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 Commission Order No. 29632.
1.4 "Light Load Hours" - The daily hours beginning 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, Independence Day, Labor
Day, Thankgiving 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 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.
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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 "Maximum 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 full-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
units. Usually indicated on a nameplate attached to the individual machine or device.
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 facilities are interconnected and the energy from this Facility is delivered to the Idaho Power
electrical system.
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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, efficiently 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 Facility 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 Commission. The Seller shall be responsible to pay all costs of interconnection and integration of
this Facility into the Idaho Power electrical system as specified within 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 transmission and/or distribution lines and transformers
as described in Schedule 72.
1.30 "Station Use" - Electric energy that is used to operate equipment that is auxiliary or otherwse related to
the production of electricity by the Facilty.
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 Amount for the
corresponding month specified in paragraph 6.2. or (2) If the Net Energy produced by the Seller's
Facility and delivered to the Idaho Power electrical system during the month is less than 90% of the
monthly Net Energy Amount for the corresponding month specified in paragraph 6.2, then all Net
Energy delivered by the Facility to the Idaho Power electrical system for that given month or (3) All Net
Energy produced by the Seller's Facilty and delivered by the Facility to the Idaho Power electrical
system prior to the Operation Date.
1.32 "Total Cost of the Facility" - The total cost of strctures, equipment and appurtenances.
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ARTICLE II: NO RELIANCE ON IDAHO POWER
2.1 Seller Independent Investigation - Seller warrnts and represents to Idaho Power that in entering into
this Agreement and the undertking by Seller of the obligations set forth herein, Seller has investigated
and determned that it is capable of performing hereunder and has not relied upon the advice,
experience or expertise of Idaho Power in connection with the transactions contemplated by this
Agreement.
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 undertking the transactions
contemplated by this Agreement have been solely those of Seller.
ARTICLE II: WARRNTIES
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 confirmation by Idaho Power and
Idaho Power makes no warranties, expressed or implied, regarding any aspect of Seller's design,
specifications, equipment or facilities, including, but not limited to, safety, durability, reliability,
strength, capacity, adequacy or economic feasibility.
3.2 Qualifying Facility Status - Seller warrants that the Facility is a "Qualifying Facility," 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 Facilty status during the term of this Agreement and
Seller's failure to maintain Qualifying Facility status wil be a Material Breach of this Agreement.
Idaho Power reserves the right to review the Facility's Qualifying Facility 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 under this Agreement, Seller shall:
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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 Subpart B, 18 CFR 292.20 i et seq. as a certified
Qualifying Facility.
4.1.2 Opinion of Counsel - Submit to Idaho Power an Opinion Letter signed by an attorney admitted
to practice and in good standing in the State of Idaho providing an opinion that Seller's licenses,
permits and approvals as set forth in paragraph 4.1.1 above are legally and validly issued, are
held in the name of the Seller and, based on a reasonable independent review, counsel is of the
opinion that Seller is in substantial compliance with said permts as of the date of the Opinion
Letter. The Opinion Letter wil be in a form acceptable to Idaho Power and wil acknowledge
that the attorney rendering the opinion understands that Idaho Power is relying on said 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 Initial Capacity Determination - Submit to Idaho Power such data as Idaho Power may
reasonably require to perform the Initial Capacity Determnation. Such data wil include but not
be limited to, Nameplate Capacity, equipment specifications, prime mover data, resource
characteristics, normal and/or average operating design conditions and Station Use data. Upon
receipt of this information, Idaho Power wil review the provided data and if necessary, request
additional data to complete the Initial Capacity Determination within a reasonable time.
4.1.3.1 If the Maximum Capacity specified in Appendix B of this Agreement and the
cumulative manufacture Nameplate Capacity rating of the individual generation units 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
units to be installed at this Facility. Upon verification by Idaho Power that the data
provided establishes the combined Nameplate Capacity rating of the generation units to
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be installed at this Facility is less than 10 MW, it wil be deemed that the Seller has
satisfied the Initial Capacity Determination for this Facility.
4.1.4 Nameplate Capacity - Submit to Idaho Power manufacturer's and engineering documentation
that establishes the Nameplate Capacity of each individual generation unit that is included
within this entire Facility. Upon receipt of this data, Idaho Power shall review the provided data
and determne if the Nameplate Capacity specified is reasonable based upon the manufacturer's
specified generation ratings for the specific generation units.
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 Commission Order No. 21690. These certificates wil be in the form
specified in Appendix C but may be modified to the extent necessary to recognize the different
engineering disciplines providing the certificates.
4.1.6 Insurance - Submit written proof to Idaho Power of all insurance required in Aricle XIII.
4.1.7 Interconnection - Provide written confirmation from Idaho Power's delivery business unit that
Seller has satisfied all interconnection requirements.
4.1.8 Network Resource Designation - 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 confirmation from Idaho Power that all
conditions to acceptance of energy have been fulfilled. Such written confirmation shall be
provided within a commercially reasonable time following the Seller's request and wil not be
unreasonably withheld by Idaho Power.
ARTICLE V: TERM AND OPERATION DATE
5.1 Term - Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective on the
date first wrtten and shall continue in full force and effect for a period of 15 (not to exceed 20 years)
Contract Years from the Operation Date.
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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) Commission approval of this Agreement in a form acceptable to Idaho Power has been
received.
c) Seller has demonstrated to Idaho Power's satisfaction that the Facility is complete and able
to provide energy in a consistent, reliable and safe manner.
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 wil not be unreasonably 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 constrction process that are not Force Majeure events accepted by both Parties, shall not prevent
Delay Liquidated Damages from being due and owing as calculated in accordance with this Agreement.
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 Initial 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 current month)
multiplied by the curent 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
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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 Liquidated Damages beyond those
calculated in 5.3.1 and 5.3.2 wil be calculated and payable using the Delay Liquidated Damage
calculation described in 5.3.1 above for all days exceeding 90 days past the Scheduled Operation Date
until such time as the Seller cures this Material Breach or Idaho Power terminates 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 fuds 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 certinty, and that the Delay Liquidated Damages are an appropriate approximation of such
damages.
5.7 Prior to the Seller executing this Agreement, the Seller shall have agreed to and executed a Letter of
Understanding with Idaho Power that contains at minimum the following requirements:
a) Seller has fied for interconnection and is in compliance with all payments and
requirements of the interconnection process
b) Seller has received and accepted an interconnection feasibility study for this
Facility.
c) Seller has provided all information required to enable Idaho Power to file an initial
transmission capacity request.
d) Results of the initial transmission capacity request are known and acceptable to the
Seller.
e) Seller acknowledges responsibility for all interconnection costs and any costs
associated with acquiring adequate firm transmission capacity to enable the project
to be classified as an Idaho Power firm network resource.
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f) If the Facilty is located outside of the Idaho Power service territory, in addition to
the above requirements, the Seller must provide evidence that the Seller has
acquired firm transmission capacity from all required transmitting entities to deliver
the Facility's energy to an acceptable point of delivery on the Idaho Power
electrical system.
5.8 Within thirty (30) days of the date of a final non-appealable order as specified in Article XXI approving
this Agreement the Seller shall post liquid security ("Delay Securty") in a form as described in
Appendix D equal to or exceeding the amount calculated in paragraph 5.8.1.
5.8.1 Delay Security 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.
5.8.1.1 In the event (a) Seller provides Idaho Power with certification that (1) a generation
interconnection agreement specifying a schedule that wil enable this Facilty to achieve
the Operation Date no later than the Scheduled Operation Date has 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 the Seller is in compliance with all terms and
conditions of the generation interconnection agreement, the Delay Security calculated
in accordance with paragraph 5.8.1 wil be reduced by ten percent (10%).
5.8.1.2 If the Seller has received a reduction in the calculated Delay Security as specified in
paragraph 5.8.1.1 and subsequently (1) at Seller's request, the generation
interconnection agreement specified in paragraph 5.8.1.1 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,
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5/19/2010
the full amount of the Delay Securty as calculated in paragraph 5.8.1 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.
5.8.2 Idaho Power shall release any remaining security 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 AND SALE OF NET ENERGY
6.1 Delivery and Acceptance of Net Energy - Except when either Party's performance is excused as
provided herein, Idaho Power wil purchase and Seller wil sell all of the Net Energy toIdaho Power at
the Point of Delivery. All Inadvertent Energy produced by the Facility wil also be delivered by the
Seller to Idaho Power at the Point of Delivery. At no time wil the total amount of Net Energy and/or
Inadvertent Energy produced by the Facility and delivered by the Seller to the Point of Delivery exceed
the Maximum Capacity Amount.
6.2 Net Energy Amounts - Seller intends to produce and deliver Net Energy in the following monthly
amounts:
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5/19/2010
6.2.1 Initial Year Monthly Net Energy Amounts:
Month kWh
Season 1
March
April
May
648,000
648,000
648,000
July
August
648,000
648,000
648,000
648,000
Season 2 November
December
Season 3
June
September
October
January
February
648,000
648,000
648,000
648,000
648,000
6.2.2 Ongoing Monthly Net Energy Amounts - Seller shall initially provide Idaho Power with one
year of monthly generation estimates (Initial Year Monthly Net Energy Amounts) and
beginning at the end of month nine and every three months thereafter provide Idaho Power with
an additional three months of forward generation estimates beyond those generation estimates
previously provided. This information wil be provided to Idaho Power by written notice in
accordance with paragraph 25.1, no later than 5:00 PM of the 5th day following the end of the
previous month. If the Seller does not provide the Ongoing Monthly Net Energy Amounts in a
timely manner, Idaho Power wil use the most recent 3 months of the Initial Year Monthly Net
Energy Amounts specified in paragraph 6.2.1 for the next 3 months of monthly Net Energy
amounts.
6.2.3 Seller's Adjustment of Net Energy Amount
6.2.3.1 No later than the Operation Date, by wrtten notice given to Idaho Power in accordance
with paragraph 25.1, the Seller may revise all of the previously provided Initial Year
Monthly Net Energy Amounts.
6.2.3.2 Beginning with the end of the 9th month after the Operation Date and at the end of
every third month thereafter: (1) the Seller may not revise the immediate next three
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5/19/2010
months of previously provided Net Energy Amounts, (2) but by written notice given to
Idaho Power in accordance with paragraph 25.1, no later than 5:00 PM of the 5th day
following the end of the previous month, the Seller may revise all other previously
provided Net Energy Amounts. Failure to provide timely written notice of changed
amounts wil be deemed to be an election of no change.
6.2.4 Idaho Power Adjustment of Net Energy Amount - If Idaho Power is excused from accepting the
Seller's Net Energy as specified in paragraph 12.2.1 or if the Seller declares a Suspension of
Energy Deliveries as specified in paragraph 12.3.1 and the Seller's declared Suspension of
Energy Deliveries is accepted by Idaho Power, the Net Energy Amount as specified in
paragraph 6.2 for the specific month in which the reduction or suspension under paragraph
12.2.1 or 12.3.1 occurs wil be reduced in accordance with the following:
Where:
NEA Current Month's Net Energy Amount (Paragraph 6.2)
SGU a.) IfIdaho 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 curtilment as specified by
Idaho Power multiplied by the TGU as defined below.
b.) If the Seller declares a Suspension of Energy Deliveries as
specified in paragraph 12.3.1 this value wil be the sum of
the individual generation units size ratings as specified in
Appendix B that are impacted by the circumstances
causing the Seller to declare a Suspension of Energy
Deliveries.
TGU Sum of all of the individual generator ratings of the generation
units at this Facility as specified in Appendix B of this
agreement.
RSH Actual hours the Facility's Net Energy deliveries were either
reduced or suspended under paragraph 12.2.1 or 12.3.1
TH Actual total hours in the curent month
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5/19/2010
Resulting formula being:
Adjusted
Net Energy = NEA
Amount _ ( ( X NEA ) X (TGU TH ) )
This Adjusted Net Energy Amount wil be used in applicable Surplus Energy calculations for only the
specific month in which Idaho Power was excused from accepting the Seller's Net Energy or the Seller
declared a Suspension of Energy.
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 Initial Year Net Energy
Amounts as specified in paragraph 6.2 shall constitute an event of default.
ARTICLE VII: PURCHASE PRICE AND 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 Commission Order 30744,
30738 and adjusted in accordance 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
2020
2021
2022
2023
2024
2025
2026
2027
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
73.56
75.26
76.99
78.78
80.60
82.47
84.75
87.10
Season 2 - (120.00 %)
Mils/kWh
94.67
97.21
99.95
102.23
104.57
106.97
109.55
112.05
114.77
117.40
120.10
122.87
125.70
128.61
131.59
134.65
138.37
142.21
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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
100.08
102.39
104.75
107.18
109.66
112.21
115.31
118.51
5/19/2010
2028
2029
2030
2031
89.53
92.03
94.60
96.69
146.17
150.25
154.45
157.85
121.81
125.21
128.71
131.55
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 Commission 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
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
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
71.64
73.42
75.25
77.12
79.40
81.75
84.18
86.68
89.25
91.33
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
116.97
119.88
122.86
125.91
129.64
133.48
137.43
141.51
145.71
149.12
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
97.47
99.90
102.38
104.93
108.03
11 1.23
114.53
117.93
121.43
124.27
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 Commission Order 30744 and
30738 with seasonalization factors applied:
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5/19/2010
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
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
71.8
72.87
74.61
76.39
78.22
80.09
82.37
84.72
87.15
89.64
92.22
94.30
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
121.82
124.72
127.71
130.76
134.49
138.32
142.28
146.36
150.56
153.97
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
101.51
103.94
106.42
108.97
112.07
115.27
118.57
121.97
125.47
128.31
7.4 Surplus Energy Price - For all Surplus Energy, Idaho Power shall pay to the Seller the current 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
January contains 744 hours. 744 hours times 10,000 kW = 7,440,000 kWh. Energy
delivered in January in excess of 7,440,000 kWh in this example would be Inadvertent
Energy.)
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
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5/19/2010
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 - Undisputed Energy payments, less any payments due to Idaho Power wil be
disbursed 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.
7.7 Continuing Jurisdiction of the Commission .This Agreement is a special contract and, as such, the rates,
terms and conditions contained in this Agreement wil be construed in accordance with Idaho Power
Company v. Idaho Public Utilities Commission 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 i 261
(1985), Afton Energy, Inc, v. Idaho Power Company, 111 Idaho 925, 729 P.2d 400 (1986), Section 210
of the Public Utilities Regulatory Policies Act of 1978 and 18 CFR §292.303-308
ARTICLE VII: ENVIRONMENTAL ATTRIBUTES
8.1 Seller retains ownership under this Agreement of Green Tags and Renewable Energy Certificate
(RECs), or the equivalent environmental attbutes, directly associated with the production of energy
from the Seller's Facility sold to Idaho Power.
ARTICLE IX: FACILITY AND INTERCONNECTION
9.1 Design of Facility - Seller wil design, construct, install, own, operate and maintain the Facilty 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 AND TELEMETRY
10.1 Metering - Idaho Power shall, for the account of Seller, provide, install, and maintain Metering
Equipment to be located at a mutually agreed upon location to record and measure power flows to Idaho
Power in accordance with this Agreement and Schedule 72. The Metering Equipment wil be at the
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5/19/2010
location and the tye 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 manner to
provide Idaho Power adequate energy measurement data to administer this Agreement and to integrate
this Facility's energy production into the Idaho Power electrical system.
10.2 Telemetry - Idaho Power wil install, operate and maintain at Seller's expense communications 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 Idaho Power's Designated Dispatch Facility.
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 Party, after reasonable notice to the other Pary, shall have the right, during normal
business hours, to inspect and audit any or all generation, Net Energy, Station Use, Inadvertent Energy
and maximum generation (kW) records pertining to the Seller's Facility.
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 temporary 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, beginning with the twenty-first day of such interrption, curailment
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5/19/2010
or reduction, Seller wil be deemed to be delivering Net Energy at a rate equivalent to the pro
rata daily average of the amounts specified for the applicable month in paragraph 6.2. Idaho
Power wil notify Seller when the interrption, curilment or reduction is termnated.
12.2.2 If, in the reasonable opinion ofIdaho 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 transmission/distribution system as specified 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.
Seller's failure to limit deliveries to the Maximum Capacity Amount wil be a Material Breach
of this Agreement.
12.2.4 If Idaho Power is unable to accept the energy from this Facility and is not excused from
accepting the Facility's energy, Idaho Power's damages shall be limited to only the value of the
estimated energy that Idaho Power was unable to accept. Idaho Power wil have no
responsibility 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 Facility, Seller may, after giving notice as provided in paragraph
12.3.2 below, temporarily suspend all deliveries of Net Energy to Idaho Power from the Facilty
or from individual generation unites) within the Facility impacted by the forced outage for a
period of not less than 48 hours to correct the forced outage condition ("Declared Suspension of
Energy 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
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5/19/2010
notification provided by the Seller. In the month(s) in which the Declared Suspension of Energy
occurred, the Net Energy Amount wil be adjusted as specified in paragraph 6.2.4.
12.3.2 If the Seller desires to initiate a Declared Suspension of Energy Deliveries as provided in
paragraph 12.3.1, the Seller wil notify the Designated Dispatch Facility by telephone. The
beginning hour of the Declared Suspension of Energy Deliveries wil be at the earliest the next
full hour after making telephone contact with Idaho Power. The Seller wil, within 24 hours
after the telephone contact, provide Idaho Power a written notice in accordance with XXIV that
wil contain the beginning hour and duration of the Declared Suspension of Energy Deliveries
and a description of the conditions that caused the Seller to initiate a Declared Suspension of
Energy Deliveries. Idaho Power wil review the documentation provided by the Seller to
determine Idaho Power's acceptance of the described forced outage as qualifying for a Declared
Suspension of Energy Deliveries as specified in paragraph 12.3.1. Idaho Power's acceptance of
the Seller's forced outage as an acceptable forced outage wil be based upon the clear
documentation provided by the Seller that the forced outage is not due do an event of Force
Majeure or by neglect, disrepair or lack of adequate preventative maintenance of the Seller's
Facilty.
12.4 Scheduled Maintenance - On or before January 31 of each calendar year, Seller shall submit a wrtten
proposed maintenance schedule of significant Facility maintenance for that calendar year and Idaho
Power and Seller shall mutually agree as to the acceptability of the proposed schedule. The Parties
determination as to the acceptability of the Seller's timetable for scheduled maintenance wil take into
consideration Prudent Electrical Practices, Idaho Power system requirements and the Seller's preferred
schedule. Neither Part shall uneasonably withhold acceptance ofthe proposed maintenance schedule.
12.5 Maintenance Coordination - The Seller and Idaho Power shall, to the extent practical, coordinate their
respective line and Facility maintenance schedules such that they occur simultaneously.
12.6 Contact Prior to Curilment - 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,
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5/19/2010
and/or unplanned events Idaho Power may not be able to provide notice to the Seller pnor to
interrption, curtailment, or reduction of electrical energy deliveries to Idaho Power.
ARTICLE XII: INDEMNIFICATION AND INSURANCE
13.1 Indemnification - Each Party shall agree to hold harmless and to indemnify the other Part, its offcers,
agents, affiliates, subsidiaries, parent company and employees against all loss, damage, expense and
liability to third persons for injur to or death of person or injur to property, proximately caused by the
indemnifying Party's (a) constrction, ownership, operation or maintenance of, or by failure of, any of
such Party's works or facilities used in connection with this Agreement or (b) negligent or intentionaL.
acts, errors or omissions. The indemnifying Part shall, on the other Party's request, defend any suit
asserting a claim covered by this indemnity. The indemnifying Party shall pay all documented costs,
including reasonable attorney fees that may be incurred by the other Party in enforcing this indemnity.
13.2 Insurance - During the term of this Agreement, Seller shall secure and continuously carr the following
insurance coverage:
13.2.1 Comprehensive General Liability Insurance for both bodily injur and property damage with
limits equal to $1,000,000, each occurrence, combined single limit. The deductible for such
insurance shall be consistent with curent Insurance Industr Utility practices for similar
property.
13.2.2 The above insurance coverage shall be placed with an insurance company with an A.M. Best
Company rating of A- or better and shall include:
(a) An endorsement naming Idaho Power as an additional insured and loss payee as
applicable; and
(b) A provision stating that such policy shall not be canceled or the limits of liability
reduced without sixty (60) days' prior wrtten notice to Idaho Power.
13.3 Seller to Provide Certificate of Insurance - As required in paragraph 4.1.5 herein and annually
thereafter, Seller shall furnish Idaho Power a certificate of insurance, together with the endorsements
required therein, evidencing the coverage as set forth above.
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5/19/2010
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 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 MAJEURE
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 Party is
unable to prevent or overcome. Force Majeure includes, but is not limited to, acts of God, fire, flood,
storms, wars, hostilities, civil strife, strikes and other labor disturbances, earthquakes, fires, lightning,
epidemics, sabotage, or changes in law or regulation occurring after the effective date, which, by the
exercise of reasonable foresight such part could not reasonably have been expected to avoid and by the
exercise of due diligence, it shall be unable to overcome. If either Part is rendered wholly or in par
unable to perform its obligations under this Agreement because of an event of Force Majeure, both
Parties shall be excused from whatever performance is affected by the event of Force Majeure, provided
that:
(1) The non-performng Part 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 occurrence causing the suspension
of performance and which could and should have been fully performed before such
occurrence shall be excused as a result of such occurence.
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5/19/2010
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 liability 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 damages wil include, but not be limited to, the
value of renewable energy certificate 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 of Idaho Power to
accept energy from the Facility.
15.2 Dedication. No undertaking by one Part to the other under any provision ofthis Agreement shall
constitute the dedication of that Part's system or any portion thereof to the Party or the public or affect
the status ofIdaho Power as an independent public utility corporation or Seller as an independent
individual or entity.
ARTICLE XVI: SEVERAL 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. Nothing contained in this Agreement
shall ever be constred to create an association, trust, partnership or joint ventue or impose a trust or
partership duty, obligation or liability on or with regard to either Party. Each Part shall be
individually and severally liable for its own obligations under this Agreement.
ARTICLE XVII: WAIVER
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.
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5/19/2010
ARTICLE XVII: CHOICE OF LAWS AND VENUE
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 arising out of or related to this Agreement wil lie in the District Cour of the
Fourth Judicial District ofIdaho in and for the County of Ada.
ARTICLE XIX: DISPUTES AND DEFAULT
19.1 Disputes - All disputes related to or arising under this Agreement, including, but not limited to, the
interpretation of the terms and conditions of this Agreement, wil be submitted to the Commission 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 Party, specifYing the manner in which such default occured. If the defaulting
Party shall fail to cure such default within the sixty (60) days after servce of such notice, or
if the defaulting Party reasonably demonstrates to the other Party that the default can be
cured within a commercially reasonable time but not within such sixty (60) day period and
then fails to diligently pursue such cure, then, the nondefaulting Party may, at its option,
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 occurence of the breach.
19.3 Securty for Performance - Prior to the Operation Date and thereafter for the full term of this
Agreement, Seller wil provide Idaho Power with the following:
19.3.1 Insurance - Evidence of compliance with the provisions of paragraph 13.2. If Seller fails to
comply, such failure wil be a Material Breach and may only be cured by Seller supplying
evidence that the required insurance coverage has been replaced or reinstated;
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19.3.2 Engineer's Certifications - Every three (3) years after the Operation Date, Seller wil supply
Idaho Power with a Certification of Ongoing Operations and Maintenance (O&M) from a
Registered Professional Engineer licensed in the State of Idaho, which Certification of
Ongoing 0 & M shall be in the form specified in Appendix C. Seller's failure to supply the
required certificate wil be an event of default. Such a default may only be cured by Seller
providing the required certificate; and
19.3.3 Licenses and Permits - During the full term of this Agreement, Seller shall maintain
compliance with all permits 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 permits 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 permitting agency.
ARTICLE XX: GOVERNENTAL AUTHORIZATION
20.1 This Agreement is subject to the jursdiction of those governental agencies having control over either
Part 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 AND 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
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Part shall become effective without the written consent of both Parties being first obtained. Such
consent shall not be unreasonably withheld. Notwithstanding the foregoing, any part which Idaho
Power may consolidate, or into which it may merge, or to which it may conveyor transfer substantially
all of its electric utility assets, shall automatically, without further act, and without need of consent or
approval by the Seller, succeed to all of Idaho Power's rights, obligations and interests under this
Agreement. This article shall not prevent a financing entity with recorded or secured rights from
exercising all rights and remedies available to it under law or contract. Idaho Power shall have the right
to be notified by the financing entity that it is exercising such rights or remedies.
ARTICLE XXII: MODIFICATION
23.1 No modification to this Agreement shall be valid unless 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:
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To Seller:
Original document to:
Laura Knothe, PE
New Energy Three, LLC
8720 Vic Lane
Middleton ID 83644
Telephone:
Cell:
FAX:
[phone]
[phone]
E-mail: laura(fthenewenergycompany.com
To Idaho Power:
Original document to:
Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
Email: LGgrow(fidahopower.com
Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
POBox 70
Boise, Idaho 83707
E-mail: rallphin(Qidahopower.com
Either Party may change the contact person and/or address information listed above, by providing written notice
from an authorized person representing the Party.
ARTICLE XXVI: ADDITIONAL TERMS AND CONDITIONS
26.1 This Agreement includes the following appendices, which are attached hereto and included by
reference:
Appendix A
Appendix B
Appendix C
AppendixD
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer's Certifications
Forms of Liquid Security
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ARTICLE XXVII: SEVERABILITY
27.1 The invalidity or unenforceability of any term or provision of this Agreement shall not affect the
validity or enforceability of any other terms or provisions and this Agreement shall be constred in all
other respects as if the invalid or unenforceable term or provision were omitted.
ARTICLE XXVII: COUNTERPARTS
28.1 This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
ARTICLE XXIX: ENTIR AGREEMENT
29.1 This Agreement constitutes the entire Agreement of the Parties concerning the subject matter hereof and
supersedes all prior or contemporaneous oral or written agreements between the Parties concerning the
subject matter hereof.
IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be executed in
their respective names on the dates set forth below:
Idaho Power Company New Energy Three, LLC
By ~ll It br
Lisa A Grow
Sr. Vice President, Power Supply
By ~.
Laura Knothe, PE
Dated 6. L1:lO Dated 0~1 j Iõ
"Idaho Power""Seller"
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APPENDIX A
A -1 MONTHLY POWER PRODUCTION AND 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 readings on the Idaho Power Meter Equipment measurng
the Facility'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 admnister this Agreement. This document shall be the document to enable Idaho Power to begin the
energy payment calculation and payment process. The meter readings on this report shall not be used to
calculate the actual 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 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*Reason
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 Part.
Signature
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Date
5/19/2010
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 information 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 (Midnight) 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 administer this Agreement.
A-3 ROUTINE 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 Parties 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 informtion:
· Project Identification - Project Name and Project Number
. Current Meter Reading
· Estimated Generation for the current day
. Estimated Generation for the next day
Planned and Unplanned Project outages
Call 1-800-345-1319 and leave the following information:
· Project Identification - Project Name and Project Number
· Approximate time outage occurred
· Estimated day and time of project coming back online
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Seller's Contact Information
24-Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
Jay Kesting
[phone]
[phone]
Project On-site Contact information
Name:
Telephone Number:
Kur Standley
[phone]
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APPENDIXB
FACILITY AND POINT OF DELIVERY
Project Name: Double B Dairy
Project Number: 31616120
B-1 DESCRITION OF FACILITY
(Must include the Nameplate Capacity rating and VAR capability (both leading and lagging) of all generation
units to be included in the Facilty.)
The facility consists of an anaerobic digester, gen sets and waste handling equipment. The total
nameplate capacity of the three generators is 2000 kW.
Var Capabilty (Both leading and lagging) Leading is .98 Lagging is .8.
B-2 LOCATION OF FACILITY
Near: Murugh, ID
Sections: 33 Township: ~ Range: 2IE Milner ID Quadrangle County: Cassia ID.
Description ofInterconnection Location: Near 1250 West 1100 South Murugh, ID
Nearest Idaho Power Substation: Buckhorn Substation
B-3 SCHEDULED FIRST ENERGY AND OPERA nON DATE
Seller has selected October 1, 2011 as the Scheduled First Energy Date.
Seller has selected December 1, 2012 as the Scheduled Operation Date.
In making these selections, Seller recognizes 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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B-4 MAXUM CAPACITY AMOUNT:
This value will be ~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 determne the
specific Point of Delivery for this Facility. The Point of Delivery identified by Schedule 72 wil become
an integral part of this Agreement.
B-6 LOSSES
If the Idaho Power Metering equipment is capable of measuring the exact energy deliveries by the Seller
to the Idaho Power electrical system at the Point of Delivery, no Losses wil be calculated for this
Facility. If the Idaho Power Metering is unable to measure the exact energy deliveries by the Seller to
the Idaho Power electrical system at the Point of Delivery, a Losses calculation wil be established to
measure the energy losses (kWh) between the Seller's Facility and the Idaho Power Point of Delivery.
This loss calculation wil be initially set at 2% of the kWh energy production recorded on the Facility
generation metering equipment. At such time as Seller provides Idaho Power with the electrical
equipment specifications (transformer loss specifications, conductor sizes, etc) of all of the electrical
equipment between the Facility and the Idaho Power electrical system, Idaho Power wil configue a
revised loss calculation formula to be agreed to by both paries and used to calculate the kWh Losses for
the remaining term of the Agreement. If at any time durng the term of this Agreement, Idaho Power
determines that the loss calculation does not correctly reflect the actual kWh losses attributed to the
electrical equipment between the Facility and the Idaho Power electrical system, Idaho Power may
adjust the calculation and retroactively adjust the previous months kWh loss calculations.
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B-7 METERIG AND TELEMETRY
Schedule 72 wil determine the specific metering and telemetry requirements for this Facility. At the
minimum the Metering Equipment and Telemetr equipment must be able to provide and record hourly
energy deliveries to the Point of Delìvery 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 arrange for and make available at Seller's cost communication circuit(s) compatible with Idaho
Power's communications equipment and dedicated to Idaho Power's use termnating at the Idaho Power
facilities capable of providing Idaho Power with continuous instantaneous information on the Facilities
energy production. Idaho Power provided equipment wil be owned and maintained by Idaho Power,
with total cost of purchase, installation, operation, and maintenance, including administrative 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.
B-8 NETWORK RESOURCE DESIGNATION
Idaho Power cannot accept or pay for generation from this Facility until a Network Resource
Designation ("NR") application has been accepted by Idaho Power's delivery business unit. Federal
Energy Regulatory Commission ("FERC") Rules require Idaho Power to prepare and submit the NRD.
Because much of the information Idaho Power needs to prepare the NRD is specific to the Seller's
Facility, Idaho Power's ability to file the NRD in a timely manner is contingent upon timely receipt of
the required information from the Seller. Prior to Idaho Power beginnng the process to enable. Idaho
Power to submit a request for NRD status for this Facility, the Seller shall have completed all
requirements as specified in Paragraph 5.7 of this Agreement. Seller's failure to provide complete
and accurate information in a timely manner can signifcantly impact Idaho Power's abilty and
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cost to attain the NRD designation for the Seller's Facilty and the Seller shall bear the costs of
any of these delays that are a result of any action or inaction by the Seller.
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APPENDIXC
ENGINEER'S CERTIFICATION
OF
OPERATIONS & MAINTENANCE POLICY
The undersigned , on behalf of himself and
hereinafter collectively referred to as "Engineer," hereby states and certifies to the Seller as follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between Idaho
Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project which is the subject of the Agreement and this
Statement is identified as IPCo Facility No. and is hereinafter referred to as the "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 fuish electrical energy to
Idaho Power for a year period.
6. That Engineer has substantial experience in the design, constrction 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 supervised the review of the Policy for Operation and Maintenance
("O&M") for this Project and it is his professional opinion that, provided said Project has been designed and
built to appropriate standards, adherence to said O&M Policy wil result in the Project's producing at or near the
design electrical output, efficiency and plant factor for a fifteen (15) year period.
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.
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5/19/2010
10. That Engineer certifies that the above statements are complete, tre 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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5/19/2010
APPENDIXC
ENGINEER'S CERTIFICATION
OF
ONGOING OPERATIONS AND 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 "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 fuish electrical energy to
Idaho Power for a fifteen (15) year period.
6. That Engineer has substantial experience in the design, constrction and operation of electric power
plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
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5/19/2010
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 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, tre 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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5/19/2010
APPENDIXC
ENGINEER'S CERTIFICA nON
OF
DESIGN & CONSTRUCTION ADEQUACY
The undersigned on behalf of himself and
hereinafter collectively referred to as "Engineer", hereby states and certifies to
Idaho Power as follows:
1.
2.
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Firm 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 Facilty 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 fuish electrical
energy to Idaho Power for a fifteen (15) 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 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 fuished
Interconnection Facilities and other Project facilities and equipment.
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9. That the Project has been constrcted in accordance with said plans and specifications, all
applicable codes and consistent with Prudent Electrical Practices as that term is described in the Agreement.
10. That the design and construction of the Project is such that with reasonable and prudent
operation and maintenance practices by Seller, the Project is capable of performing in accordance with the terms
of the Agreement and with Prudent Electrical Practices for a year period.
11.That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement,
in interconnecting the Project with its system, is relying on Engineer's representations and opinions contained in
this Statement.
12. That Engineer certifies that the above statements are complete, tre 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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APPENDIXD
FORMS OF LIQUID SECURITY
The Seller shall provide Idaho Power with commercially reasonable security instruents such as Cash
Escrow Secunty, Guarantee or Letter of Credit as those terms 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 within this Agreement.
For the purose of this Appendix D, the term "Credit Requirements" shall mean acceptable financial
creditworthiness of the entity providing the securty instruent in relation to the term of the obligation
in the reasonable judgment ofIdaho 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 Secunty - Seller shall deposit fuds in an escrow account established by the Seller in
a bankng institution acceptable to both Parties equal to the Delay Securty.
2. Guarantee or Letter of Credit Security - Seller shall post and maintain in an amount equal
to the Delay Security: (a) a guaranty from a party that satisfies the Credit Requirements, in
a form acceptable to Idaho Power at its discretion, or (b) a Letter of Credit in a form
acceptable to Idaho Power, in favor of Idaho Power. The Letter of Credit wil be issued by
a financial institution acceptable to both parties.
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