20100813Application.pdf

DONOVAN E. WALKER
Senior Counsel
dwalkertlidahopower.com
1SIDA~POR(Ií\.i .1
An IDACORP Company
August 13, 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-10-22
IN THE MA ITER OF THE APPLICA nON OF IDAHO POWER COMPANY
FOR APPROVAL OF A FIRM ENERGY SALES AGREEMENT WITH
YELLOWSTONE POWER, ft, FOR THE SALE AND PURCHASE OF
ELECTRIC ENERGY :JNC i
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Idaho Power
Company's Application in the above matter.
~í(~
DEW:csb.
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise. ID 83707
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
20m AUG l 3 PM I: 55
IDAHO F'tL:;~¡;-:
ITI"'S I'f\lt" "''-~Cit-,\lUTILi 1: vurfiMlvv¡U¡,
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
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 YELLOWSTONE
POWER, INC., FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY.
)
) CASE NO. IPC-E-10-22
)
) 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 Yellowstone Power, Inc.
("Yellowstone") under which Yellowstone would sell and Idaho Power would purchase
electric energy generated by the Yellowstone Power Project ("Facilty or "Project")
located in Gem County, Idaho.
APPLICATION - 1
In support of this Application Idaho Power represents as follows:
I. BACKGROUND
1. The Yellowstone Project is a biomass fueled, combined heat and power
project to be co-located in Emmet, Idaho, with the recently commissioned Emerald
Forest SawmilL. Power wil be generated using steam created from the controlled
burning of the woody biomass fueL. Waste heat from the Project wil be utilzed to
operate the dry kilns associated with the sawmilL.
2. 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 ofthe 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
3. On July 28, 2010, Idaho Power and Yellowstone 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 attached
APPLICATION - 2
to 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").
4. The nameplate rating of the actually generator wil be 11.7 MW; however,
subtraction of estimated parasitic loads (energy consumption required to operate the
generator) result in the Facilty nameplate rating being less than 10 MW. As defined in
paragraph 1.21 of the Agreement and as described in paragraph 4.1.3 of the
Agreement, Yellowstone 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.
5. Yellowstone has elected a Scheduled Operation Date of December 31,
2011, for the Facilty. If the Facility has not achieved its Operation Date by that date,
Delay Liquidated Damages and associated Delay Security provisions within the
Agreement are applicable.
6. 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 Yellowstone for
purchases of energy wil be allowed as prudently incurred expenses for ratemaking
purposes.
7. All applicable interconnection study charges under Schedule 72 have
been assessed and collected from Yellowstone. The final interconnection Feasibilty
Study is complete and the final Facilty Study has also been completed and all required
deposits are being made by Yellowstone. Idaho Power Power Supply has made
APPLICATION - 3
application for applicable transmission capacity and has been notified that transmission
capacity is available.
II. APPLICABLE RATES
8. 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 July
28, 2010, Order No. 31025 would require that the rates to be paid Yellowstone 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 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 to the new rates effective
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
date, the OF developer must have filed a meritorious complaint alleging that the project
was suffciently 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.
9. In this case, Yellowstone had not signed a contract with Idaho Power to
purchase the Facilty generation 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 March 16 when the rates changed. 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 "grandfathered" cases. By signing the
Agreement and voluntarily submitting it to the Commission, Idaho Power has concluded
that Yellowstone meets the criteria described above and should be entitled to the rates
established by Order No. 30744 in Case No. GNR-E-09-01.
10. 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
APPLICATION - 5
capacity is available for the project and/or received and accepted transmission capacity
study results and cost estimates; and
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.
11. It is Idaho Powets opinion that the Yellowstone Facilty meets the above-
referenced criteria. This proposed project is at the same site of a previous 10 MW
cogeneration facility (SC Emmett). In addition, the transmission capacity had been
previously reviewed for a contemplated power plant for this same site (Renewable
Energy of Idaho - Emmett Power). General reviews of the transmission capacity
indicated that the transmission capacity existed at this site. As stated by Idaho Power in
IPC-E-10-16 (Rock Creek), IPC-E-10-17 (Swagger Farms), and IPC-E-10-18 (Double
B):
. . . in early February, the Company became aware of some
new procedural requirements from FERC that affected the
way that the Facilty 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.
APPLICATION - 6
Subsequently, due to the new interpretations of FERC regulations, Idaho Power has
filed for transmission capacity for this proposed Project and received confirmation that
adequate transmission capacity does exist with no additional network upgrades and
upon completion of a PPA, the Project can be designated as an Idaho Power Network
resource. Yellowstone is current in all of its interconnection study payments, and so as
long as Yellowstone 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
Yellowstone to achieve its Scheduled Operation Date for the Facilty. As stated
previously, both a Feasibilty and a Facilty Study Agreement have been completed for
this Project.
12. During the early months of 2010 (prior to March 16, 2010) Idaho Power
and the principal member of Yellowstone Power, Inc., Mr. Richard Vinson, were in
frequent communication, usually by telephone, regarding the Project and the execution
of a Firm Energy Sales Agreement. As discussed in more detail below, another
company controlled by Mr. Vinson had previously executed a Firm Energy Sales
Agreement with Idaho Power and, as a consequence, Mr. Vinson was familar with the
terms and conditions contained in such agreements. With respect to the power
purchase agreement criteria, Yellowstone and Idaho Power had resolved and agreed to
all material outstanding contract issues prior to March 16, 2010. Yellowstone has
represented to Idaho Power that if Yellowstone had been made aware of any risk of the
March 16, 2010, price change occurring, a written Firm Energy Sales Agreement would
have been requested as all terms and conditions had already been agreed to, those
terms and conditions being identical to those in the attached Agreement. Idaho Power
APPLICATION - 7
agrees that all terms and conditions identical to the terms and conditions of the attached
Agreement were agreed to with the Project prior to March 16,2010, and, in the normal
course of business, a written agreement was to follow.
13. Since March 16, 2010, Mr. Vinson has been in discussion with both the
IPUC Staff and Idaho Power to determine his options in regards to a PURPA Firm
Energy Sales Agreement. Idaho Power has been reviewing the circumstances of this
specific Project and routinely having discussions with Mr. Vinson. In early June 2010,
Idaho Power agreed with Mr. Vinson that a reasonable case could be made that this
Project may be eligible for the contract terms and conditions (pricing) that existed prior
to March 16, 2010. Since early June 2010, Idaho Power has been working through
internal contract drafting and review processes. Any perceived delays from early June
2010 to an execution date of July 28, 2010, were not due to reconsideration of Idaho
Powets agreement to pursue the attached Agreement. Instead the perceived delays
were due to change in personnel, internal review processes, and the efforts being
expended on other PURPA contracts and issues.
14. In addition to the above-described facts, Idaho Power respectfully
requests that the Commission consider the following additional facts. Yellowstone's
Facilty had previously executed a PURPA Firm Energy Sales Agreement with Idaho
Power under a diferent company for this same site. That company was Renewable
Energy of Idaho LLC ("Renewable Energy") and the Firm Energy Sales Agreement was
approved in Case No. IPC-E-04-05, Order No. 29437. That agreement went into default
and was ultimately terminated when Renewable Energy, for reasons it alleges were
beyond its control, was unable to meet the operation date of the agreement. Thereafter,
APPLICATION - 8
Idaho Power determined it had incurred damages for non-performance in the amount of
$106,804. Idaho Power presented this damage billng to Renewable Energy and was
informed that Renewable Energy did not have the funds or assets to make payment. At
that time, Mr. Vinson committed that he was stil pursuing development of both a
sawmil and a generation facilty at this site and, upon completion of a generation
facilty, at a future date he would honor this $106,804 obligation. At this time, the
sawmil has been constructed and is operating and, as evidenced by the attached
Agreement, Mr. Vinson is moving forward with the generation facilty.
15. Although it may be arguable that the non-performance damage is the
liabilty only of the now defunct Renewable Energy, and likely unrecoverable, Mr. Vinson
has agreed to pay the non-performance damage in the full amount as an offset to the
energy payments of the Yellowstone Agreement. Payment wil be accomplished in 24
monthly installments as a debit against monthly amounts Idaho Power wil owe
Yellowstone for monthly energy purchases under the Agreement subject to this
Application. By approval of the Agreement, the Commission wil enable Idaho Power to
recover, for the benefit of its customers, non-performance damages which it otherwise
likely could not collect. Yellowstone's binding agreement to assume and repay this debt
is attached as Attachment NO.2.
16. Additionally, the present Firm Energy Sales Agreement with Yellowstone
contains the most recent terms and conditions, including the delay and liquidated
damages, as well as the security provisions previously approved by the Commission in
the Arena Drop and the Cargil Incorporated cases, Order Nos. 31060 and 31034,
respectively.
APPLICATION - 9
17. Furthermore, Yellowstone has represented to Idaho Power the following
circumstances, all occurring prior to March 16, 2010, which may bear on the
Commission's consideration:
a. The real propert upon which the Project is to be located was
purchased from Boise Cascade, Inc., and Yellowstone is the fee owner;
b. Required environmental remediation has been completed and the
Idaho Department of Environmental Ouality has issued a final acceptance and permit to
construct; and
c. Significant power plant equipment, including boiler, fuel conveyors,
structural steel piping controls, and electrical equipment, was purchased at a cost in
excess of $6,000,000 and is on the site or in storage ready for deployment.
18. Based on the foregoing, Idaho Power believes that the Agreement meets
the criteria established by the Commission in its prior orders and that it would be in the
public interest for the Commission to approve the Agreement as presented.
IV. MODIFIED PROCEDURE
19. 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.
APPLICATION - 10
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
20. 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
dwalkercæidahopower.com
Inordstromcæidahopower.com
Randy C. Allphin
Energy Contract Administrator
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
rallphincæidahopower.com
VI. REQUEST FOR RELIEF
21. 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
Yellowstone Power, Inc., 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 Yellowstone Power, Inc., be allowed as prudently incurred
expenses for ratemaking purposes.
Respectfully submitted this 13th day of August 2010.
rAd-
OVAN E. WALKER
Attorney for Idaho Power Company
APPLICATION -11
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 13th day of August 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:
Yellowstone Power, Inc.
Dick Vinson
Yellowstone Power, Inc.
P.O. Box 1539
Thompson Falls, Montana 59873
Dean J. Miler
McDEVITT & MILLER LLP
420 West Bannock Street
P.O. Box 2564
Boise, Idaho 83701
APPLICATION -12
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email dickcæblackfoot.net
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email joecæmcdevitt-miler.com
dfkr&/d~
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-10-22
IDAHO POWER COMPANY
ATTACHMENT NO. 1
Aricle
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FIR ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AN
YELLOWSTONE POWER BIOMASS POWER PROJECT
TABLE OF CONTENTS
TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Ter and Operation Date
Purchase and Sale of Net Energy
Puchase Price and Method of Payment
Environmental Attributes
Facilty and Interconnection
Metering and Telemetry
Records
Operations
Indemnification and Insurance
Force Majeure
Liabilty; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Governental Authorization
Commission Order
Successors and Assigns
Modification
Taxes
Notices
Additional Terms and Conditions
Severabilty
Counterpars
Entire Agreement Signatures
Appendix A
AppendixB
AppendixC
AppendixD
FIR ENERGY SALES AGREEMENT
(l0 aMW or Less)
Project Name: Yellowstone Power Biomass Power Project
Project Number: 11866075
THIS AGREEMENT, entered into on this 2BT~ day of July 2010 between YELLOWSTONE POWER,
INC., a Montana Corporation authorized to conduct business in the State ofIdaho (Seller), and IDAHO POWER
COMPAN, an Idao corporation (Idaho Power), hereinafter sometimes referred to collectively as "Paries" or
individually as "Pary."
WITNSSETH:
WHREAS, 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 considertion ofthe mutual covenants and agreements hereinafter set forth, the
Paries agree as follows:
ARTICLE I: DEFINIONS
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 "Commission" - The Idao Public Utilties Commission.
1.3 "Contract Year" - The period commencing each calendar year on the same calenda 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.
- 1-
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 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 ofthis calculation wil be O.
1.7 "Designated Dispatch Facility" -Idaho Power's Systems Operations Group, or any subsequent group
designated by Idao 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 deliverig energy to Idaho
Power's system at the Point of Delivery.
1.10 "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 Year Day, Memorial Day, Independence Day, Labor
Day, Thansgiving and Chrstmas.
1.11 "Inadvertent Energy" - Electric energy Seller does not intend to generate. Inadvertent energy is more
paricularly described in paragraph 7.5 of this Agreement.
1.12 "Interconnection Facilities" - All equipment specified in Schedule 72.
1.13 "Initial Capacity Determnation" - The process by which Idao Power confirs 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.
1.14 "Light Load Hours" - The daily hours beginng at 11:00 pm, ending at 7:00 am Mountain Time (8
hour), plus all other hour on all Sundays, New Year Day, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Chrstmas.
1.15 "Losses" - The loss of electrical energy expressed in kilowatt hours (kWh) occurng as a result of the
transformation and transmission of energy between the point where the Facility's energy is metered and
the point the Facility's energy is delivered to the Idao Power electrical system. The loss calculation
formula wil be as specified in Appendix B of this Agreement.
- 2-
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 pargraph 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 Paries wil mutually
agree upon a replacement index, which is similar to the Dow Jones Mid-Columbia Index. The selected
replacement index wil be consistent with other similar agreements and a commonly used index by the
electrical industry.
1.21 "Nameplate Capacity" -The full-load electrical quatities assigned by the designer to a generator and its
prime mover or other piece of electrical equipment, such as transformers and circuit breakers, under
standadized conditions, expressed in amperes, ki1ovolt-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 ofthis 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 paragrph 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 Idao Power
electrical system.
- 3-
1.25 "Prudent Electrical Practices" - Those practices, methods and equipment that are commonly and
ordinarly used in electrical engineerig and operations to operate electric equipment lawfully, safely,
dependably, effciently and economically.
1.26 "Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates achievig 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 integrtion 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 trasmission and/or distribution lines and transformers
as described in Schedule 72.
1.30 "Station Use" - Electrc energy that is used to operate equipment that is auxiliar or otherwise related to
the production of electricity by the Facilty.
1.31 "Surplus Energy" - Is (l) Net Energy produced by the Seller's Facility and delivered to the Idaho Power
electrical system durng the month which exceeds 110% of the monthly Net Energy Amount for the
corresponding month specified in paragraph 6.2. or (2) If the Net Energy produced by the Seller's
Facility and delivered to the Idaho Power electrical system durng the month is less than 90% of the
monthly Net Energy Amount for the corresponding month specified in pargrph 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 Idao Power electrical
system prior to the Operation Date.
1.32 "Total Cost of the Facility" - The total cost of structures, equipment and appurenances.
- 4-
ARTICLE II: NO RELIACE ON IDAHO POWER
2.1 Seller Independent Investigation - Seller warrants and represents to Idaho Power that in entenng into
this Agreement and the undertakng by Seller of the obligations set forth herein, Seller has investigated
and determined that it is capable of pedorming hereunder and has not relied upon the advice,
expenence or expertise of Idao 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 undertakng the transactions
contemplated by this Agreement have been solely those of Seller.
ARTICLE II: WARIES
3.1 No Waranty by Idao 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 waranties, 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 Qualifyng Facility Status - Seller warts that the Facility is a "Qualifyng Facilty," as that term is
used and defined in 18 CFR 292.201 et seq. After initial qualification, Seller wil take such steps as may
be required to maintain the Facility's Qualifyng Facilty status durg the term of this Agreement and
Seller's failure to maintain Qualifyng Facility status wil be a Matenal Breach of this Agreement.
Idaho Power reserves the nght to review the Facilty's Qualifyng Facility status and associated support
and compliance documents at anytime dunng the term of this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
4.1 Pnor to the First Energy Date and as a condition ofIdaho Power's acceptance of delivenes of energy
from the Seller under this Agreement, Seller shall:
- 5-
4.1.1 Submit proof to Idaho Power that all licenses, permits 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 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 ofIdaho 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 permits as of the date of the Opinon
Letter. The Opinon 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 unreasonably withheld. The Opinon Letter
wil be governed by and shall be interpreted in accordace with the legal opinion accord of the
American Bar Association Section of Business Law (1991).
4.1.3 Initial Capacity Determination - Submit to Idao Power such data as Idaho Power may
reasonably require to pedorm the Initial Capacity Determination. Such data wil include but not
be limited to, Nameplate Capacity, equipment specifications, prime mover data, resource
charcteristics, 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 Initial Capacity Determation withi 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
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 ths Facility is less than 10 MW, it wil be deemed that the Seller has
satisfied the Initial Capacity Determination for this Facilty.
4.1.4 Nameplate Capacity - Submit to Idaho Power manufacturer's and engineerg documentation
that establishes the Nameplate Capacity of each individual generation unit that is included
within this entire Facility. Upon receipt ofthis data, Idaho Power shall review the provided data
and deterine if the Nameplate Capacity specified is reasonable based upon the manufactuer'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 recognze the different
engineerig disciplines providing the certificates.
4.1.6 Insurance - Submit written proof to Idaho Power of all insurance required in Aricle XII.
4.1.7 Interconnection - Provide wrtten confiration 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 deliverig 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 confiation shall be
provided within a commercially reasonable time following the Seller's request and wil not be
uneasonably withheld by Idaho Power.
ARTICLE V: TERM AN OPERATION DATE
5.1 Term - Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective on the
date first written and shall continue in full force and effect for a period of Fifteen (15) 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 Idao Power in a wntten format.
e) Seller has received wntten confiration from Idao Power of the Operation Date. This
confirmation wil not be uneasonably withheld by Idaho Power.
5.3 Operation Date Delay - Seller shall cause the Facilty to achieve the Operation Date on or before the
Scheduled Operation Date. Delays in the interconnection and trasmission network upgrade study, design
and construction process that are not Force Majeure events accepted by both Paries, shall not prevent
Delay Liquidated Damages from being due and owing as calculated in accordace with this Agreement.
5.3.1 If the Operation Date occurs after the Scheduled Operation Date but on or pnor to 90 days
following the Scheduled Operation Date, Seller shall pay Idaho Power Delay Liquidated
Damages calculated at the end of each calenda 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 current
month) multiplied by the number of days in the Delay Penod in the current month)
multiplied by the curent month's Delay Pnce.
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.
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5.4 If Seller fails to achieve the Operation Date within ninety (90) days following the Scheduled Operation
Date, such failure wil be a Matenal Breach and Idaho Power may terminate this Agreement at any time
until the Seller cures the Matenal 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 descnbed in 5.3.1 above for all days exceeding 90 days past the Scheduled Operation Date
until such time as the Seller cures this Matenal Breach or Idao Power termates 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 Matena1
Breach of this Agreement and Idao Power shall draw fuds from the Delay Secunty provided by the
Seller in an amount equal to the calculated Delay Damages or Delay Liquidated Damages.
5.6 The Paries agree that the daages Idao Power would incur due to delay in the Facilty achieving the
Operation Date on or before the Scheduled Operation Date would be diffcult or impossible to predict
with certainty, and that the Delay Liquidated Damages are an appropnate approximation of such
damages.
5.7 Pnor 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
Facilty.
c) Seller has provided all information required to enable Idaho Power to fie an initial
transmission capacity request.
d) Results of the intial transmission capacity request are known and acceptable to the
Seller.
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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.
f) If the Facility is located outside of the Idaho Power servce terrtory, 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 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 5.8.1.
5.8.1 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 estimted revenue.
Where the estimated thee 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 thee 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 specifyg 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 ters 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 Securty as specified in
paragraph 5.8.1.1 and subsequently (1) at Seller's request, the generation
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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,
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 Idao
Power requests reinstatement. Failure to timely reinstate the Delay Securty wil be a
Material Breach of this Agreement.
5.8.2 Idaho Power shall release any remaining 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 terminated.
ARTICLE VI: PURCHASE AND SALE OF NET ENERGY
6.1 Delivery and Acceptance of Net Energy - Except when either Pary's performance is excused as
provided herein, Idaho Power wil purchase and Seller wil sell all of the Net Energy to Idaho Power at
the Point of Delivery. All Inadvertent Energy produced by the Facility wil also be delivered by the
Seller to Idao Power at the Point of Delivery. At no time wil the total amount of Net Energy and/or
Inadvertent Energy produced by the Facilty and delivered by the Seller to the Point of Delivery exceed
the Maximum Capacity Amount.
6.2 Net Energy Amounts - Seller intends to produce and deliver Net Energy in the following monthly
amounts:
6.2.1 Initial Year Monthly Net Energy Amounts:
Month kWh
Season 1
March
April
May
7,440,000
7,200,000
7,440,000
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Season 2
July 7,440,000
August 7,440,000
November 7,200,000
December 7,440,000
June 7,200,000
September 7,200,000
October 7,440,000
Januar 4,464,000
Februar 6,720,000
Season 3
6.2.2 Ongoing Monthly Net Energy Amounts - Seller shall initially provide Idao 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 Idao 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 511 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 paragrph 6.2.1 for the next 3 months of monthly Net Energy
amounts.
6.2.3 Seller's Adjustment of Net Energy Amount
6.2.3.1 No later than the Operation Date, by written notice given to Idao Power in accordace
with paragrph 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 imediate next thre
months of previously provided Net Energy Amounts, (2) but by written notice given to
Idao Power in accordance with pargraph 25.1, no later than 5:00 PM of the 511 day
following the end of the previous month, the Seller may revise all other previously
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provided Net Energy Amounts. Failure to provide timely written notice of chaged
amounts wil be deemed to be an election of no change.
6.2.4 Idao 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.) 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 curailment as specified by
Idao Power multiplied by the TGU as defied 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 declar 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 Facilty'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
Resulting formula being:
Adjusted
Net Energy = NEA
Amount _(( XNEA)X(TGU TH ) )
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
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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 durng Heavy Load Hours,
Idaho Power wil pay the non-1evelized energy price in accordace with Commssion Order 30744,
30738 and adjusted in accordance with Commission 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
2028
2029
2030
2031
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
89.53
92.03
94.60
96.69
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
146.1 7
150.25
154.45
157.85
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
121.81
125.21
128.71
131.55
7.2 Base Energy Light Load Purchase Price - For all Base Energy received durng Light Load Hours, Idaho
Power wil pay the non-1evelized energy price in accordance with Commission Order 30744, 30738 and
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adjusted in accordace 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 %)
MilslkWh
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 %)
MilslWh
85.93
88.47
91.21
93.49
95.83
98.23
100.81
103.32
106.03
108.66
111.36
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 %)
MilslkWh
71.61
73.73
76.01
77.91
79.86
81.86
84.01
86.10
88.36
90.55
92.80
95.1 1
97.47
99.90
102.38
104.93
108.03
111.23
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-1evelized 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
Season 1 - (73.50 %)
MilslkWh
55.60
57.16
58.84
60.24
61.67
63.14
64.72
66.25
67.91
69.53
Season 2 - (120.00 %)
MillslkWh
90.78
93.32
96.06
98.34
100.68
103.08
105.66
108.17
110.88
113.51
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Season 3 - (100.00 %)
MilslkWh
75.65
77.77
80.05
81.95
83.90
85.90
88.05
90.14
92.40
94.59
2020 71.18 116.21 96.84
2021 72.87 118.98 99.15
2022 74.61 121.82 101.51
2023 76.39 124.72 103.94
2024 78.22 127.71 106.42
2025 80.09 130.76 108.97
2026 82.37 134.49 112.07
2027 84.72 138.32 115.27
2028 87.15 142.28 118.57
2029 89.64 146.36 121.97
2030 92.22 150.56 125.47
2031 94.30 153.97 128.31
7.4 Surplus Energy Price - For all Surplus Energy, Idaho Power shall pay to the Seller the curent month's
Market Energy Reference Price or the All Hour 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 Facilty, expressed in kWh, which the
Seller delivers to Idao Power at the Point of Delivery that exceeds 10,000 kW multiplied
by the hours in the specific month in which the energy was delivered. (For example
Januar contains 744 hours. 744 hours times 10,000 kW = 7,440,000 kWh. Energy
delivered in Januar in excess of 7,440, 000 kWh in this example would be Inadvertent
Energy.)
7.5.2 Although Seller intends to design and operate the Facility to generate no more than
10 average MW and therefore does not intend to generate Inadvertent Energy, Idaho Power
wil accept Inadvertent Energy that does not exceed the Maximum Capacity Amount but
wil not purchase or pay for Inadvertent Energy.
7.6 Payment Due Date - Undisputed 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.
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7.7 Continuing Jursdiction of the Commission _ This Agreement is a special contract and, as such, the rates,
terms and conditions contained in this Agreement will be construed in accordance with Idaho Power
Company v. Idaho Public Utilties Commission and Anon Energy, Inc., 107 Idaho 781, 693 P.2d 427
(1984), Idaho Power Company v. Idaho Public Utilties Commission, 107 Idao 1122,695 P.2d 1 261
(1985), Anon 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 ATTUTES
8.1 Seller retains ownership under this Agreement of Green Tags and Renewable Energy Certificate
(RECs), or the equivalent environmental attributes, diectly associated with the production of energy
from the Seller's Facilty sold to Idaho Power.
ARTICLE IX: FACILITY AN INERCONNCTION
9.1 Design of Facilty - 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 Idao Power Point of Delivery for the full term of the Agreement.
ARTICLE X: METERIG AN TELEMETRY
10.1 Metering - Idao Power shall, for the account of Seller, provide, install, and maintain Meterig
Equipment to be located at a mutully agreed upon location to record and measure power flows to Idao
Power in accordance with this Agreement and Schedule 72. The Metering Equipment wil be at the
location and the type required to measure, record and report the Facility's Net Energy, Station Use,
Inadvertent Energy and maximum energy deliveries (kW) at the Point of Delivery in a maner to
provide Idao Power adequate energy measurement data to administer this Agreement and to integrate
this Facilty's energy production into the Idao 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 instataeous
- 17-
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 Paries 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 have the right, during normal
business hour, to inspect and audit any or all generation, Net Energy, Station Use, Inadvertent Energy
and maximum generation (kW) records pertainig to the Seller's Facilty.
ARTICLE XII: OPERATIONS
12 .1 Communications - Idaho Power and the Seller shall maintain appropriate operating communcations
through Idaho Power's Designated Dispatch Facilty 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 Facilty in accordace with Schedule 72. If, for
reasons other than an event of Force Majeure, a temporar disconnection under Schedule 72
exceeds twenty (20) days, beginning with the twenty-first day of such interrption, curtailment
or reduction, Seller wil be deemed to be deliverig Net Energy at a rate equivalent to the pro
rata daily average of the amounts specified for the applicable month in paragraph 6.2. Idaho
Power wil notify Seller when the intèrrption, curilment or reduction is terminated.
12.2.2 If, in the reasonable opinion of Idaho Power, Seller's operation of the Facility or Interconnection
Facilities is unsafe or may otherwise adversely affect Idao Power's equipment, personnel or
service to its customers, Idaho Power may temporarly disconnect the Facilty from Idao
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Power's trasmission/distrbution 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 Materal 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 Facilty's energy, Idao 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
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 Facility, Seller may, after giving notice as provided in pargraph
12.3.2 below, temporarly suspend all deliveries of Net Energy to Idao Power from the Facility
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
star of the next full hour following the Seller's telephone notification as specified in pargrph
12.3.2 and wil continue for the time as specified (not less than 48 hours) in the wrtten
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
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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. Idao Power wil review the documentation provided by the Seller to
determine Idao Power's acceptance of the described forced outage as qualifyng for a Declared
Suspension of Energy Deliveries as specified in paragraph 12.3 .1. Idaho Power's acceptace of
the Seller's forced outage as an acceptable forced outage wil be based upon the clear
documentation provided by the Seller that the forced outage is not due do an event of Force
Majeure or by neglect, disrepair or lack of adequate preventative maintenance of the Seller's
Facilty.
12.4 Scheduled Maintenance - On or before Januar 31 of each calendar year, Seller shall submit a wrtten
proposed maintenance schedule of significant Facilty maintenance for that calendar year and Idaho
Power and Seller shall mutually agree as to the acceptabilty of the proposed schedule. The Paries
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 Pary shall uneasonably withhold acceptance of the proposed maintenance schedule.
12.5 Maintenance Coordiation - 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 Curilment - Idaho Power wil make a reasonable attempt to contact the Seller prior to
exercising its rights to interrpt interconnection or curl deliveries from the Seller's Facility. Seller
understands that in the case of emergency circumstances, real time operations of the electrical system,
and/or unplaned events Idao 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 INSURNCE
13.1 Indemnification - Each Party shall agree to hold harless and to indemnify the other Party, its officers,
agents, affliates, subsidiares, parent company and employees against all loss, damage, expense and
- 20-
liability to third persons for injury to or death of person or injur to property, proximately caused by the
indemnifyng Party's (a) construction, ownership, operation or maintenance of, or by failure of, any of
such Pary's works or facilties used in connection with this Agreement or (b) negligent or intentional
acts, errors or omissions. The indemnifyng Pary shall, on the other Pary's request, defend any suit
assering a claim covered by this indemnity. The indemnfyng Pary shall pay all documented costs,
including reasonable attorney fees that may be incured by the other Party in enforcing this indemnity.
13.2 Insurance - During the term of this Agreement, Seller shall secure and continuously car the following
insurance coverage:
13.2.1 Comprehensive General Liabilty Insurance for both bodily injur and property daage with
limits equal to $1,000,000, each occurrence, combined single limit. The deductible for such
insurance shall be consistent with curent Insurance Industry Utility practices for simlar
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 Idao 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 wrtten 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 furnish Idao Power a certificate of insurace, together with the endorsements
required therein, evidencing the coverage as set forth above.
13.4 Seller to Notify Idao Power of Loss of Coverage - If the insurance coverage required by paragraph
13.2 shal11apse 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 tang 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.
- 21-
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 limited to, acts of God, fire, flood,
storms, wars, hostilities, civil strife, strkes and other labor distubances, earhquakes, fires, lightning,
epidemics, sabotage, or changes in law or regulation occurrng after the effective date, which, by the
exercise of reasonable foresight such pary could not reasonably have been expected to avoid and by the
exercise of due diligence, it shall be unable to overcome. If either Pary is rendered wholly or in par
unable to perform its obligations under this Agreement because of an event of Force Majeure, both
Parties shall be excused from whatever perormance is affected by the event of Force Majeure, provided
that:
(1) The non-performing Party shall, as soon as is reasonably possible after the occurence
of the Force Majeure, give the other Pary written notice describing the pariculars 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.
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
pary shall be liable to the other for any indirect, special, consequential, nor puntive damages, except as
expressly authorized by this Agreement. Consequential daages wil include, but not be limited to, the
value of renewable energy certificate and, ifthe Facilty is fueled by gas produced by an anaerobic
- 22-
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 undertakg by one Party to the other under any provision of this Agreement shall
constitute the dedication of that Party's system or any portion thereof to the Party or the public or affect
the status of Idaho Power as an independent public utility corporation or Seller as an independent
individual or entity.
ARTICLE XVI: SEVERA OBLIGATIONS
16.1 Except where specifically stated in this Agreement to be otherwise, the duties, obligations and liabilties
of the Paries are intended to be several and not joint or collective. Nothing contained in this Agreement
shall ever be constred to create an association, trust, parnership or joint ventue or impose a trst or
partership duty, obligation or liability on or with regard to either Pary. Each Par 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 Pary of its rights with respect to a default under this Agreement or
with respect to any other matters arsing 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 accordace with the laws of the State of Idaho
without reference to its choice of law provisions.
18.2 Venue for any litigation arsing out of or related to this Agreement wil lie in the District Cour of the
Four Judicial District ofIdaho in and for the County of Ada.
- 23-
ARTICLE XIX: DISPUTES AN DEFAULT
19.1 Disputes - All disputes related to or arsing under ths Agreement, including, but not limited to, the
interpretation of the terms and conditions of this Agreement, wil be submitted to the Commssion for
resolution.
19.2 Notice of Default
19.2.1 Defaults. If either Pary fails to perform any of the terms or conditions of ths Agreement
(an "event of default"), the nondefau1ting Party shall cause notice in writing to be given to
the defaulting Pary, specifyng the manner in which such default occured. If the defaulting
Party shall fail to cure such default withi the sixty (60) days after serce of such notice, or
if the defaulting Pary reasonably demonstrates to the other Pary that the default can be
cured within a commercially reasonable time but not within such sixty (60) day period and
then fails to diligently purue such cure, then, the nondefaulting Pary may, at its option,
terminate this Agreement and/or pursue its legal or equitable remedies.
Material Breaches - The notice and cure provisions in paragraph 19.2.1 do not apply to
defaults identified in this Agreement as Material Breaches. Material Breaches must 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 Idao 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
19.2.2
19.3.2
evidence that the required insurance coverage has been replaced or reinstated;
Engineer's Certifications - Every three (3) year after the Operation Date, Seller wil supply
Idaho Power with a Cerification of Ongoing Operations and Maintenance (O&M) from a
Registered Professional Engineer licensed in the State of Idaho, which Cerification 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
- 24-
19.3.3 Licenses and Permits - Durng the full term of this Agreement, Seller shall maintain
compliance with all perits and licenses described in paragraph 4.1.1 of this Agreement. In
addition, Seller wil supply Idao Power with copies of any new or additional permits or
licenses. At least every fifth Contract Year, Seller wil update the documentation described
in Pargraph 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 Idao 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
Party of this Agreement.
ARTICLE XXI: COMMISSION ORDER
21.1 This Agreement shall become finally effective upon the Commission's approval of all ters and
provisions hereof without change or condition and declaration that all payments to be made to Seller
hereunder shall be allowed as prudently incurred expenses for ratemakng puroses.
ARTICLE XXII: SUCCESSORS AN ASSIGNS
22.1 This Agreement and all of the terms and provisions hereof shall be binding upon and inure to the benefit
of the respective successors and assigns of the Paries hereto, except that no assignent hereof by either
Pary shall become effective without the wrtten consent of both Paries being first obtained. Such
consent shall not be uneasonably withheld. Notwithstanding the foregoing, any pary which Idaho
Power may consolidate, or into which it may merge, or to which it may conveyor transfer substantially
all of its electric 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 aricle shall not prevent a fiancing 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
- 25-
to be notified by the fmancing 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 wrting and signed by both Paries and
subsequently approved by the Commssion.
ARTICLE XXIV: TAXES
24.1 Each Pary shall pay before delinquency all taxes and other governental charges which, if failed to be
paid when due, could result in a lien upon the Facility or the Interconnection Facilities.
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:
Original document to:
Yellowstone Power, Inc
Attn: Dick Vinson
PO Box 1539
Thompson Falls, Montana 59873
Telephone:
Cell:
FAX:
406-827-3574
406-250-1842
406-827-3576
E-mail: dick(fb1ackfoot.net
Copy of document to:
Yellowstone Power, Inc
Attn: Mark Costello
7602 Emerald Meadows Court
Katy, Texas 77494
E-mail: ruthana.costelloCfahoo.com
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To Idaho Power:
Original document to:
Vice President, Power Supply
Idao Power Company
POBox 70
Boise, Idao 83707
Email: LGgrowigidaopower.com
Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
POBox 70
Boise, Idao 83707
E-mail: rallphiigidaopower.com
Either Pary 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 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
Facility and Point of Delivery
Engineer's Certifications
Forms of Liquid Security
ARTICLE XXVII: SEVERAILITY
27.1 The invalidity or unenforceabi1ity of any term or provision of this Agreement shall not affect the
validity or enforceabilty 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: 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 instrument.
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ARTICLE XXIX: ENTIR AGREEMENT
29.1 This Agreement constitutes the entire Agreement of the Paries concerning the subject matter hereof and
By
Dated
supersedes all prior or contemporaneous oral or written agreements between the Paries concerning the
subject matter hereof.
IN WITNESS WHEREOF, The Paries hereto have caused this Agreement to be executed in
their respective names on the dates set forth below:
Idaho Power Company Yellowstone Power, Inc.
~~(l. 80)
Lisa A Grow
Sr. Vice President, Power Supply
BY&/~
Richard Vinson, President
(.ze'Jo Dated 7ft $r ~ ¿J
~l"ller""Idaho Power"
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APPENDIX A
A -1 MONTHLY POWER PRODUCTION AN SWITCHING REPORT
At the end of each month the following required documentation wil be submitted to:
Idaho Power Company
Attn: Cogeneration and Small Power Production
POBox 70
Boise, Idao 83707
The meter readings required on this report wil be the readings on the Idaho Power Meter Equipment measurg
the Facility's total energy production and Station Usage delivered to Idaho Power and the maximum generated
energy (kW) as recorded on the Meterig Equipment and/or any other required energy measurements to
adequately admnister this Agreement. This document shall be the document to enable Idao 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 descnbed 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 Phone Number:
City
Meter Number:
End of Month kWh Meter Reading:
Beginnng of Month kWh Meter:
Difference:
Times Meter Constant:
kWh for the Month:
Metered Demand:
Breaker Openig 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
Zip
Station
Usage
Station
Usage Maximum Generation
Metered
kW
Net Generation
Breaker Closing Record
*Reason 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 requied by the Firm Energy Sales
Agreement to which I am a Party.
Signature Date
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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 Meterig Equipment that measures the Net Energy
and energy delivered to supply Station Use for the Facility recorded at 12:00 AM (Midnght) ofthe 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 maner
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 information:
. Project Identification - Project Name and Project Number
. Current Meter Reading
. Estimated Generation for the current day
. Estimated Generation for the next day
Planed and Unplaned Project outages
Call 1-800-345-1319 and leave the following information:
. Project Identification - Project Name and Project Number
. Approximate time outage occured
. Estimated day and time of project coming back online
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Seller's Contact Information
24-Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
Richard Vinson
406-827-3574
406-250-1842
Project On-site Contact inormation
Name:
Telephone Number:
Richard Vinson
406-250-1842
- 32-
APPENDIXB
FACILITY AN POIN OF DELIVERY
Project Name: Yellowstone Power Biomass Power Project
Project Number: 11866075
B-1 DESCRITION OF FACILITY
The Facilty wil consist of a boiler and associated equipment which wil deliver steam to a horizontal
cylindrcal revolving generator, the nameplate capacity of which wil be 11.7 MW. Some portion of the
turbine output wil be utilzed for drving plant equipment and not more that 10 aMW wil be delivered
to Idaho Power.
Var Capabilty (Both leading and lagging: Leading is 7.13 Lagging is 7.i 3
B-2 LOCATION OF FACILITY
Near: Emmett, Idaho, West Main and Plywood Road
Sections: 12 and 7 Township: 6 North, Range: 2 West and 1 West.
County: Gem, Idaho
Description of Interconnection Location: At Idao Power BECE Substation
Nearest Idaho Power Substation: BECE Station
B-3 SCHEDULED FIRST ENERGY AN OPERATION DATE
Seller has selected September 30, 2011 as the Scheduled First Energy Date.
Seller has selected December 31, 2011 as the Scheduled Operation Date.
In makng these selections, Seller recognizes that adequate testing of the Facility and completion of all
requirements in paragrph 5.2 of this Agreement must be completed prior to the project being granted
an Operation Date.
- 33-
B-4 MAXIMUM CAPACITY AMOUN
This value wil be 10 MW which is consistent with the value provided by the Seller to Idaho Power in
accordance with Schedule 72. This value is the maximum energy (MW) that potentially could be
delivered by the Seller's Facilty to the Idao Power electrcal system at any moment in time.
B-5 POIN OF DELIVERY
"Point of Delivery" means, unless otherwise agreed by both Paries, the point of where the Sellers
Facility's energy is delivered to the Idao Power electrical system. Schedule 72 wil determine the
specific Point of Delivery for this Facilty. The Point of Delivery identified by Schedule 72 wil become
an integrl par of this Agreement.
B-6 LOSSES
If the Idaho Power Metering equipment is capable of measunng 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
Facilty. If the Idaho Power Meterg 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 Facilty 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, Idao Power wil configure 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 dunng the term of this Agreement, Idao Power
determines that the loss calculation does not correctly reflect the actual kWh losses attrbuted 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.
- 34-
B-7 METERIG AN TELEMETRY
Schedule 72 will 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 administer
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 communication circuit(s) compatible with Idao
Power's communications equipment and dedicated to Idao Power's use terminating at the Idaho Power
facilities capable of providing Idao Power with continuous instantaneous information on the Facilties
energy production. Idaho Power provided equipment wil be owned and maintained by Idaho Power,
with total cost of purchase, installation, operation, and maintenance, includig administrative cost to be
reimbursed to Idaho Power by the Seller. Payment of these costs wil be in accordace with Schedule
72 and the total meterng 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 NR.
Because much of the information Idaho Power needs to prepare the NR is specific to the Seller's
Facilty, Idao Power's ability to fie the NR in a timely manner is contingent upon timely receipt of
the required information from the Seller. Prior to Idaho Power beginng the process to enable Idaho
Power to submit a request for NR status for this Facility, the Seller shall have completed all
requirements as specified in Paragraph 5.7 of this Agreement. Seller's faüure to provide complete
and accurate information in a timely manner can significantly impact Idaho Power's abilty and
- 35-
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.
- 36-
APPENDIXC
ENGINER'S CERTIFICATION
OF
OPERATIONS & MAITENANCE POLICY
The undersigned , on behalf of himself and
, hereinafter collectively referred to as "Engineer," hereby states and certifies to the Seller as
follows:
1. That Engineer is a Licensed Professional Engineer in good stading in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between Idao
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, Idao.
5. That Engineer recognizes that the Agreement provides for the Project to fuish electrical energy to
Idaho Power for a year perod.
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.
8. That Engineer has reviewed and/or supervsed 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 nea 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
- 37-
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. Stap)
Date
- 38-
APPENDIXC
ENGINER'S CERTIFICATION
OF
ONGOING OPERATIONS AN MAIENANCE
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 stading in the State of Idao.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," beteen Idaho
Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project which is the subject of the Agreement and this
Statement is identified as IPCo Facility No. and hereinafter refered to as the "Project".
4. That the Project, which is commonly known as the Project, is located in
Section _ Township Range , Boise Meridian, County, Idao.
5. That Engineer recognizes that the Agreement provides for the Project to fush electrcal 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.
- 39-
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 accordace 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 recognzes that Idaho Power, in accordace with pargraph 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 had and seal below.
By
(p.E. Stamp)
Date
- 40-
APPENDIXC
ENGINER'S CERTIFICATION
OF
DESIGN & CONSTRUCTION ADEQUACY
The undersigned , on behalf of himself and
hereinafter collectively referred to as "Engineer", hereby states and cerifies 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 Firm Energy Sales Agreement, hereinafter "Agreement", between Idaho
Power as Buyer, and as Seller, dated ~
3. Thatthe 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 refered to as the "Project".
4. That the Project, which is commonly known as the Project, is located in
Section _ Township Range , Boise Meridian, County, Idaho.
5. That Engineer recognzes that the Agreement provides for the Project to fush electrcal energy to
Idao Power for a fifteen (15) year perod.
6. That Engieer 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 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
Facilties and other Project facilties and equipment.
9. That the Project has been constructed in accordance with said plans and specifications, all applicable
- 41-
codes and consistent with Prudent Electrical Practices as that term is described in the Agreement.
10. That the design and construction ofthe Project is such that with reasonable and prudent operation and
maintenance practices by Seller, the Project is capable of perorming in accordace with the terms of the
Agreement and with Prudent Electrcal Practices for a year perod.
11. That Engineer recognizes that Idaho Power, in accordance with pargraph 5.2 of the Agreement, in
interconnecting the Project with its system, is relyig on Engineer's representations and opinons 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
- 42-
APPENDIXD
FORMS OF LIQUID SECURY
The Seller shall provide Idaho Power with commercially reasonable security instruents such as Cash
Escrow Securty, Guarantee or Letter of Credit as those terms are defined below or other forms of liquid
financia1 security that would provide readily available cash to Idao Power to satisfy the Delay Securty
requirement within this Agreement.
For the purose of this Appendix D, the term "Credit Requirements" shall mean acceptable financial
creditworthiness of the entity providing the securty instruent in relation to the term of the obligation
in the reasonable judgment ofIdao 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 Serces, Inc. shall be deemed to have acceptable financia1
creditworthiess.
1. Cash Escrow Securty - Seller shall deposit funds in an escrow account established by the Seller in
a banng 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 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 paries.
- 43-
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-10-22
IDAHO POWER COMPANY
ATTACHMENT NO.2
--c:z-(!-~o
ASSUMPTION OF DEBT AND AGREEMENT TO REPAY
BY
YELLOWSTONE POWER, INC
This Agreement between Idaho Power Company t;ldaho Powet') and
Yellowstone Power, Inc., ("Yellowstone") is entered into this IJ,Yday of August 2010.,
WHEREAS:
Yellowstone and Idaho Power have executed a Firm Energy Sales Agreement
pursuant to the Public Utility Regulatory Policies Act of 1978 ("PURPA") under which
Yellowstone would sell and Idaho Power would purchase electric energy generated by
the Yellowstone Power Project ("Facilty" or "Project") located in Gem County, Idaho;
and
The Yellowstone Project is a biomass fueled, small power producer project to be
co-located in Emmet, Idaho, with the recently commissioned Emerald Forest SawmilL.
Power will be generated using steam created from the controlled burning of the woody
biomass fuel, and waste heat wil also be used to operate the drying kiln at the sawmil;
and
Yellowstone's Facility had previously executed a PURPA Firm Energy Sales
Agreement with Idaho Power under a different company, Renewable Energy of Idaho
INC." for this same project. That Firm Energy Sales Agreement was approved in Case
No. IPC-E-04-05, Order No. 29437. That Agreement went into default and was
ultimately terminated when Renewable Energy was unable to meet the operation date
of the Agreement. Thereafter, Idaho Power determined it had incurred damages for
non-performance in the amount of $106,804; and
Yellowstone has agreed to pay the above-referenced non-performance damages
of $106,804 previously assessed to Renewable Energy of Idaho LLC., in full.
NOW THEREFORE:
Yellowstone Power, Inc., hereby agrees to pay to Idaho Power Company the
amount of $106,804. This amount shall be paid in twenty-four (24) monthly installments
as a debit against the monthly amounts Idaho Power wil owe to Yellowstone pursuant
to the July 28, 2010, Firm Energy Sales Agreement between the parties.
Payment in full of the $106,804 will satisfy and discharge the previously incurred
non-performance damages of Renewable Energy of Idaho LLC, pursuant to its 2004
Firm Energy Sales Agreement with Idaho Power.
ASSUMPTION OF DEBT AND AGREEMENT TO REPAY BY YELLOWSTONE POWER, INC., - 1
The parties' July 28, 2010, Firm Energy Sales Agreement is hereby incorporated
into this document by this reference. Any payments, notices, terms, and conditions
pursuant to this Agreement shall be accomplished according to the provisions of the
parties' Firm Energy Sales Agreement.
This Agreement is conditioned upon the approval of same by the Idaho Public
Utilities Commission ("IPUC"), as well as approval of the parties' Firm Energy Sales
Agreement pursuant to PURPA. Because this Agreement arises out of the parties'
PURPA contracts over which the IPUC has jurisdiction, it is hereby agreed and
stipulated that the IPUC has and retains jurisdiction over this matter, its enforcement,
and any disputes arising therefrom.
Dated this iZ +'f day of August 2010.
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Principal for Yellowstone Power, Inc., and for
Renewable Energy of Idaho LLC
ASSUMPTION OF DEBT AND AGREEMENT TO REPAY BY YELLOWSTONE POWER, INC., - 2