20101116Application.pdf

DONOVAN E. WALKER
Senior Counsel
dwalkerCWidahopower.com
esIDA~POR(I
An IDACORP Company
November 15, 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-10-37
IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY
FOR APPROVAL OF A FIRM ENERGY SALES AGREEMENT FOR THE
SALE AND PURCHASE OF ELECTRIC ENERGY BETWEEN IDAHO
POWER COMPANY AND J.M. MILLER ENTERPRISES, INC.
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Idaho Power
Company's Application in the above matter.
5?, r)cL
Donovan E. Walker
DEW:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, 10 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
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
DC('C"I\!ëi ."\.4 '"".;!b."" I li' L:
zun NOV , 5 PH a: 53
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANY
AND J.M. MILLER ENTERPRISES, INC.
)
) CASE NO. IPC-E-10-37
)
) APPLICATION
)
)
)
)
Idaho Power Company ("Idaho Powet' or "Company"), in accordance with RP 52
and the applicable provisions of the Public Utilty Regulatory Policies Act of 1978
("PURPA"), hereby respectfully applies to the Idaho Public Utilities Commission ("IPUC"
or "Commission") for an Order approving the Firm Energy Sales Agreement ("FESA")
between Idaho Power and J.M. Miler Enterprises, Inc. ("J.M. Enterprises") under which
J.M. Enterprises would sell and Idaho Power would purchase electric energy generated
by the Sahko Hydro Project ("Facilty") located near Filer, Idaho.
APPLICATION - 1
In support of this Application Idaho Power represents as follows:
I. BACKGROUND
1. Sections 201 and 210 of PURPA, and pertinent regulations of the Federal
Energy Regulatory Commission ("FERC"), require that regulated electric utilities
purchase power produced by cogenerators or small power producers that obtain
qualifying facility ("OF") status. The rate a OF receives for the sale of its power is
generally referred to as the "avoided cost" rate and is to reflect the incremental cost to
an electric utilty of electric energy or capacity or both, which, but for the purchase from
the OF, such utilty would generate itself or purchase from another source. The
Commission has authority under PURPA Sections 201 and 210 and the implementing
regulations of the FERC, 18 C.F.R. §292, to set avoided costs, to order electric utilties
to enter into fixed-term obligations for the purchase of energy from OFs, and to
implement FERC rules.
2. J.M. Enterprises is currently sellng energy from this Facilty to Idaho
Power under a Schedule 86 non-firm agreement dated September 7,2005, which was
approved under Commission Order 29874, dated September 30,2005. Case No. IPC-
E-05-25. The FESA specifies that the existing Schedule 86 non-firm agreement shall
be terminated at the time the Facilty achieves its Operation Date as specified within the
FESA. Although Idaho Power filed a Joint Petition on November 5, 2010, seeking a
reduction in the published avoided cost rate eligibility cap from 10 average megawatts
("aMW") to 1 00 kilowatts, the Company does not believe that this FESA should be
impacted by that filing. As explained herein, this Facilty has been operating on Idaho
APPLICATION - 2
Power's system under a Schedule 86 non-firm energy sales agreement since 2005, and
this FESA was final and executed by J.M. Enterprises on November 1,2010.
II. THE FIRM ENERGY SALES AGREEMENT
3. On November 1, 2010, Idaho Power and J.M. Enterprises entered into a
FESA 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 FESA is enclosed with this Application as Attachment NO.1.
Under the terms of the FESA, J.M. Enterprises elected to contract with Idaho Power for
a 10-year term using the non-Ievelized published avoided cost rates as currently
established by the Commission for energy deliveries of less than 10 aMW.
4. As this Facilty is already providing energy to Idaho Power under an
existing Schedule 86 agreement, the FESA specifies that any compliance data (Le.,
nameplate capacity rating, engineering certification, insurance certificates, etc.) that
were previously provided under the Schedule 86 requirements wil be reviewed and
used for compliance with this FESA if applicable.
5. The nameplate rating (Maximum Capacity Amount) of this Facilty is 0.5
megawatt. As defined in paragraph 1.13 and 4.1.3 of the Agreement, J.M. Enterprises
wil be required to provide data on the Facilty that Idaho Power wil use to confirm that
under normal and/or average conditions the Facility wil not exceed 10 aMW on a
monthly basis. Furthermore, as described in paragraph 7.5 of the FESA, should the
Facilty exceed 10 aMW on a monthly basis, Idaho Power wil accept the energy
(Inadvertent Energy) that does not exceed the Maximum Capacity Amount, but wil not
purchase or pay for this Inadvertent Energy.
APPLICATION - 3
6. J.M. Enterprises has elected a Scheduled Operation Date of thirt (30)
days past the date this FESA is approved by the Commission. If the Facilty has not
achieved its Operation Date by that date, Delay Liquidated Damages and associated
Delay Security provisions within this FESA are applicable.
7. Section 21 of the FESA provides that it wil not become effective until the
Commission has approved all of the FESA's terms and conditions and declared that all
payments Idaho Power makes to J.M. Enterprises for purchases of energy wil be
allowed as prudently incurred expenses for ratemaking purposes.
8. The FESA, as signed and submitted by the parties thereto, contains non-
levelized published avoided cost rates in conformity with applicable IPUC Orders.
9. The interconnection for this Facilty was completed in association with the
existing Schedule 86. All applicable interconnection charges and monthly operation and
maintenance charges under Schedule 72 have already been assessed and collected
from J.M. Enterprises in association with the existing Schedule 86 agreement.
II. MODIFIED PROCEDURE
10. 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, Le., 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 - 4
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
11. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
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
V. REQUEST FOR RELIEF
12. Idaho Power Company respectfully requests that the Commission issue
an Order: (1) authorizing that this matter may be processed by Modified Procedure; (2)
approving the Firm Energy Sales Agreement between Idaho Power Company and J.M.
Miler Enterprises, 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 J.M. Miler Enterprises, Inc., be allowed as prudently incurred expenses
for ratemaking purposes.
Respectfully submitted this 15th day of November 2010.
¿¿c¡(lfX
DONOVAN E. WALKER
Attorney for Idaho Power Company
APPLICATION - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 15th day of November 2010 I served a true and
correct copy of the within and foregoing APPLICATION upon the following named
parties by the method indicated below, and addressed to the following:
J.M. Miler Enterprises, Inc.
James Miler
J.M. Miler Enterprises, Inc.
2392 Fuller Court
Ann Arbor, Michigan 48105
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
Email
¿fu/tfDonovan E. Walker
APPLICATION - 6
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-10-37
IDAHO POWER COMPANY
ATTACHMENT NO.1
FIR ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANYAN
J.M. MILLER ENTERPRISES, INC.
TABLE OF CONTENTS
Aricle
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment
Environmental Attributes
Facility and Interconnection
Metering and Telemetry
Records
Operations
Indemnification and Insurance
Force Majeure
Liabilty; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Governental Authorization
Commssion Order
Successors and Assigns
Modification
Taxes
Notices
Additional Terms and Conditions
Severabilty
Counterpars
Entire Agreement Signatures
Appendix A
AppendixB
AppendixC
AppendixD
10/27/2010
FIR ENERGY SALES AGREEMENT
(10 aMW or Less)
Project Name: Saho Hydro
Project Number: 31617100
Tms AGREEMENT, entered into on this L day of Nave.", her 2010 between
J.M MILLER ENTERPRISES, INC. (Seller), and IDAHO POWER COMPAN, an Idaho corporation
(Idaho Power), hereinafter sometimes referred to collectively as "Paries" or individually as "Party."
WITSSETH:
WHEREAS, Seller owns, maintains and operates an electric generation facility; and
WHEREAS, Seller is curently selling energy from this Facility to Idaho Power under a
Schedule 86, Uniform Agreement for the Purchase of Non-Firm Energy from a Qualifying Facility dated
September 7,2005.
WHEREAS, Seller wishes to sell, and Idaho Power is wiling to purchase, firm electrc energy
produced by the Seller's Facilty.
WHEREAS, the current Schedule 86, Uniform Agreement for the Purchase of Non-Firm Energy
from a Qualifying Facilty dated September 7,2005 shall automatically terinate at the same time that
the Operation Date occurs for this Agreement.
THEREFORE, In considertion of the mutual covenants and agreements hereinafter set forth, the
Paries agree as follows:
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ARTICLE I: DEFINTIONS
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 Idaho 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 pargraph 5.3,
5.4, 5.5, 5.6 and 5.8.
1.5 "Delay Period" - All days past the Scheduled Operation Date until the Seller's Facility achieves
the Operation Date.
1.6 "Delay Price" - The curent month's Mid-Columbia Market Energy Cost minus the current
month's All Hours Energy Price specified in paragraph 7.3 of this Agreement. If this calculation
results in a value less than 0, the result ofthis calculation wil be O.
1.7 "Designated Dispatch Facilty" - Idaho Power's Systems Operations Group, or any subsequent
group designated by Idaho Power.
1.8 "Facility" - That electric generation facility described in Appendix B of this Agreement.
1.9 "First Energy Date" - The day commencing at 00:01 hour, Mountain Time, following the day
that Seller has satisfied the requirements of Aricle IV and the Seller begins delivering energy to
Idaho Power's system at the Point of Delivery.
1.10 "Heayy Load Hours" - The daily hours beginning at 7:00 am, ending at 11 :00 pm Mountain
Time, (16 hours) excluding all hours on all Sundays, New Years Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Chrstmas.
1.11 "Inadvertent Energy" - Electric energy Seller does not intend to generate. Inadvertent energy is
more particularly described in paragraph 7.5 of this Agreement.
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1.12 "Interconnection Facilities" - All equipment specified in Schedule 72.
1.13 "Initial Capacity Determination" - The process by which Idaho Power confirs that under
normal or average design conditions the Facilty wil generate at no more than i 0 average MW
per month and is therefore eligible to be paid the published rates in accordance with Commssion
Order No. 29632.
1.14 "Light Load Hours" - The daily hours beginning at 11:00 pm, ending at 7:00 am Mountain Time
(8 hours), plus all other hours on all Sundays, New Years Day, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Chrstmas.
1.15 "Losses" - The loss of electrical energy expressed in kilowatt hours (kWh) occurrng as a result
of the transformation and trsmission of energy between the point where the Facility's energy is
metered and the point the Facilty's energy is delivered to the Idaho Power electrcal system. The
losses calculation formula wil be as specified in Appendix B of this Agreement.
1.16 "Market Energy Reference Price" - Eighty-five percent (85%) of the Mid-Columbia Market
Energy Cost.
1.17 "Material Breach" - A Default (paragraph 19.2.1) subject to paragraph 19.2.2.
1.18 "Maximum Capacity Amount" - The maximum capacity (MW) of the Facilty 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 Idao 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-Fir energy.
If the Dow Jones Mid-Columbia Index price is discontinued by the reporting agency, both Parties
wil mutually agree upon a replacement index, which is similar to the Dow Jones Mid-Columbia
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Index. The selected replacement index wil be consistent with other similar agreements and a
commonly used index by the electrcal industry.
1.21 "Nameplate Capacity" -The full-load electrical quantities assigned by the designer to a generator
and its prime mover or other piece of electrical equipment, such as transformers and circuit
breakers, under standardized conditions, expressed in amperes, kilovolt-amperers, kilowatts, volts
or other appropriate units. Usually indicated on a nameplate attached to the individual machine
or device.
1.22 "Net Energy" - All of the electric energy produced by the Facility, less Station Use, less Losses,
expressed in kilowatt hours (kWh). Subject to the terms of this Agreement, Seller commits to
deliver all Net Energy to Idaho Power at the Point of Delivery for the full ter of the Agreement.
Net Energy does not include Inadvertent Energy.
1.23 "Operation Date" - The day commencing at 00:01 hours, Mountain Time, following the day that
all requirements of paragraph 5.2 have been completed.
1.24 "Point of Delivery" - The location specified in Appendix B, where Idaho Power's and the
Seller's electrical facilties are interconnected and the energy from this Facility is delivered to the
Idaho Power electrcal system.
1.25 "Prudent Electrical Practices" - Those practices, methods and equipment that are commonly and
ordinarily used in electrical engineering and operations to operate electrc equipment lawfully,
safely, dependably, effciently and economically.
1.26 "Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates
achieving the Operation Date. It is expected that the Scheduled Operation Date provided by the
Seller shall be a reasonable estimate of the date that the Seller anticipates that the Seller's Facilty
shall achieve the Operation Date.
1.27 "Schedule 72" - Idaho Power's Tariff No 101, Schedule 72 or its successor schedules as
approved by the Commission. The Seller shall be responsible to pay all costs of interconnection
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and integration of this Facility into the Idaho Power electrical system as specified within
Schedule 72.
1.28 "Season" - The three periods identified in paragraph 6.2.1 of this Agreement.
1.29 "Special Facilities" - Additions or alterations of transmission and/or distribution lines and
transformers as described in Schedule 72.
1.30 "Station Use" - Electric energy that is used to operate equipment that is auxiliar or otherwise
related to the production of electricity by the Facility.
1.31 "Surlus Energy" - Is (1) Net Energy produced by the Seller's Facilty and delivered to the
Idaho Power electrical system during the month which exceeds 110% of the monthly Net Energy
Amount for the corresponding month specified in paragraph 6.2., or (2) if the Net Energy
produced by the Seller's Facilty and delivered to the Idao Power electrical system during the
month is less than 90% of the monthly Net Energy Amount for the correspondig month
specified in paragraph 6.2, then all Net Energy delivered by the Facility to the Idaho Power
electrical system for that given month, or (3) all Net Energy produced by the Seller's Facility and
delivered by the Facility to the Idaho Power electrical system prior to the Operation Date.
1.32 "Total Cost of the Facilty" - The total cost of structures, equipment and appurenances.
ARTICLE II: NO RELIANCE ON IDAHO POWER
2.1 Seller Independent Investigation - Seller warants and represents to Idaho Power that in enterig
into this Agreement and the undertakng by Seller of the obligations set forth herein, Seller has
investigated and deterned that it is capable of perorming hereunder and has not relied upon
the advice, experience or expertise of Idaho Power in connection with the transactions
contemplated by this Agreement.
2.2 Seller Independent Experts - All professionals or experts including, but not limited to, engineers,
attorneys or accountants, that Seller may have consulted or relied on in undertakg the
transactions contemplated by this Agreement have been solely those of Seller.
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ARTICLE II: WARIES
3.1 No Waranty by Idaho Power - Any review, acceptance or failure to review Seller's design,
specifications, equipment or facilities shall not be an endorsement or a confiration by
Idao Power and Idaho Power makes no warranties, expressed or implied, regarding any aspect of
Seller's design, specifications, equipment or facilties, including, but not limited to, safety,
durability, reliabilty, strength, capacity, adequacy or economic feasibilty.
3.2 Qualifyng Facility Status - Seller warts that the Facility is a "Qualifying Facilty," as that term
is used and defined in 18 CFR 292.201 et seq. After initial qualification, Seller wil take such
steps as may be required to maintain the Facility's Qualifying Facilty status durg the term of
this Agreement and Seller's failure to maintain Qualifyng Facility status wil be a Material
Breach of this Agreement. Idaho Power reserves the right to review the Facilty's Qualifying
Facility status and associated support and compliance documents at any time durng the term of
this Agreement.
3.3 FERC License (only applies to hydro projects) - Seller warants that Seller possesses a valid
license or exemption from licensing from the Federal Energy Regulatory Commission ("FERC")
for the Facility. Seller recognizes that Seller's possession and retention of a valid FERC license
or exemption is a material par of the consideration for Idaho Power's execution of this
Agreement. Seller wil take such steps as may be required to maintain a valid FERC license or
exemption for the Facilty during the ter of this Agreement, and Seller's failure to maintain a
valid FERC license or exemption wil be a material breach of ths Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
4.1 The Seller is curently selling energy from this Facilty to Idao Power under a Schedule 86,
Uniform Agreement for the Purchase of Non-Firm Energy from a Qualifyg Facilty dated
September 7,2005. In the event any of these requirements duplicate requirements of the
Non-Firm Agreement and the Seller has previously satisfied these requirements, Idao Power
shall review the Seller's previously supplied information. If the previously supplied information
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is applicable and current, Idaho Power may rely on the previously supplied information to satisfy
these requirements.
Prior to the First Energy Date and as a condition ofIdao Power's acceptance of deliveries of
energy from the Seller under this Agreement, Seller shall:
4.1.1 Submit proof to Idaho Power that all licenses, permts or approvals necessar for Seller's
operations have been obtained from applicable federal, state or local authorities,
including, but not limted to, evidence of compliance with Subpart B, 18 CFR 292.201 et
seq. as a certified Qualifyng Facilty.
4.1.2 Opinion of Counsel - Submit to Idao Power an Opinon Letter signed by an attorney
admitted to practice and in good standing in the State of Idaho providing an opinion that
Seller's licenses, permits and approvals as set forth in paragraph 4.1.1 above are legally
and validly issued, are held in the name of the Seller and, based on a reasonable
independent review, counsel is of the opinion that Seller is in substantial compliance with
said permits as of the date of the Opinion Letter. The Opinion Letter wil be in a form
acceptable to Idaho Power and wil acknowledge that the attorney rendering the opinon
understands that Idao Power is relying on said opinion. Idaho Power's acceptance of the
form wil not be unreasonably withheld. The Opinion Letter wil be governed by and
shall be interpreted in accordance with the legal opinion accord of the American Bar
Association Section of Business Law (1991).
4.1.3 Initial Capacity Deterination - Submit to Idao Power such data as Idaho Power may
reasonably require to perform the Initial Capacity Determination. Such data will include
but not be limited to, Nameplate Capacity, equipment specifications, prie 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 necessary, request additional data to complete the Initial Capacity Determination
within a reasonable time.
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4.1.3.1 If the Maximum Capacity specified in Appendix B of this Agreement and the
cumulative manufacture Nameplate Capacity rating of the individual generation
units at this Facilty is less than 10 MW, then 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 be installed at this Facility is less than 10 MW, it
wil be deemed that the Seller has satisfied the Initial Capacity Deterination for
this Facilty.
4.1.4 Nameplate Capacity - Submit to Idaho Power manufacturer's and engineerig
documentation that establishes the Nameplate Capacity of each individual generation unit
that is included within this entire Facility. Upon receipt of this data, Idao Power shall
review the provided data and determine if the Nameplate Capacity specified is reasonable
based upon the manufacturer's specified generation ratings for the specific generation
units.
4.1.5 Engineer's Certifications - Submit an executed Engineer's Certification of Design &
Constrction 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 necessar to
recognize the different engineering disciplines providing the certificates.
4.1.6 Insurance - Submit written proof to Idaho Power of all insurance required in Aricle XIII.
4.1.7 Interconnection - Provide written 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.
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4.1.9 Written Acceptance - Request and obtain written confirmation from Idao Power that all
conditions to acceptance of energy have been fulfilled. Such written confirmation shall be
provided within a commercially reasonable time following the Seller's request and wil
not be unreasonably withheld by Idaho Power.
ARTICLE V: TERM AN OPERATION DATE
5.1 Term - Subject to the provisions of paragrph 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 10 (ten) Contract
Years from the Operation Date.
5.2 Operation Date - The Operation Date may occur only after the Facility has achieved all of the
following:
a) Achieved the First Energy Date.
b) Commission approval of ths Agreement in a form acceptable to Idaho Power has
been received.
c) Seller has demonstrated to Idaho Power's satisfaction that the Facility is complete and
able to provide energy in a consistent, reliable and safe manner.
d) Seller has requested an Operation Date from Idaho Power in a written format.
e) Seller has received written confirmation from Idaho Power of the Opertion Date.
This confirmation wil not be unreasonably withheld by Idaho Power.
5.3 Operation Date Delay - Seller shall cause the Facility to achieve the Operation Date on or before the
Scheduled Operation Date. Delays in the interconnection and transmission network upgrade study,
design and 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 accordance with this
Agreement. As this Facilty is already sellng energy to Idaho Power under a Non-Fir Energy Sales
Agreement, it is expected that the First Energy Date and the Operation Date for this Agreement shall
be the same time and date.
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5.3.1 If the Operation Date occurs after the Scheduled Operation Date but on or prior to 90
days following the Scheduled Operation Date, Seller shall pay Idaho Power Delay
Liquidated Damages calculated at the end of each calenda month after the Scheduled
Operation Date as follows:
Delay Liquidated Damages are equal to ((Curent month's Intial Year Net
Energy Amount as specified in paragraph 6.2.1 divided by the number of days in
the curent month) multiplied by the number of days in the Delay Period in the
current month) multiplied by the current month's Delay Price.
5.3.2 If the Operation Date does not occur within ninety (90) days following the Scheduled
Operation Date the Seller shall pay Idao Power Delay Liquidated Damages, in addition
to those provided in paragraph 5.3.1, calculated as follows:
Forty five dollars ($45) multiplied by the Maximum Capacity with the Maximum
Capacity being measured in kW.
5.4 If Seller fails to achieve the Operation Date within ninety (90) days following the Scheduled
Operation Date, such failure wil be a Material Breach and Idaho Power may terminate this
Agreement at any time until the Seller cures the Material Breach. Additional Delay Liquidated
Damages beyond those calculated in 5.3.1 and 5.3.2 wil be calculated and payable using the
Delay Liquidated Damage calculation described in 5.3.1 above for all days exceeding 90 days
past the Scheduled Operation Date until such time as the Seller cures this Material Breach or
Idaho Power terminates this Agreement.
5.5 Seller shall pay Idaho Power any calculated Delay Damages or Delay Liquidated Damages within
7 days of when Idaho Power calculates and presents any Delay Damages or Delay Liquidated
Damages bilings to the Seller. Seller's failure to pay these daages within the specified time
wil be a Material Breach of this Agreement and Idaho Power shall draw funds from the Delay
Security provided by the Seller in an amount equal to the calculated Delay Damages or Delay
Liquidated Damages.
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5.6 The Paries agree that the damages Idao Power would incur due to delay in the Facility
achieving the Operation Date on or before the Scheduled Operation Date would be difficult or
impossible to predict with certainty, and that the Delay Liquidated Damages are an appropriate
approximation of such damages.
5.7 Prior to the Seller executing this Agreement, the Seller shall have agreed to and executed a Letter
of Understanding with Idaho Power that contains at minimum the following requirements:
a) Seller has filed for interconnection and is in compliance with all payments
and requirements of the interconnection process
b) Seller has received and accepted an interconnection feasibilty study for this
Facilty.
c) Seller has provided all information required to enable Idao Power to file an
initial transmission capacity request.
d) Results of the initial transmission capacity request are known and acceptable
to the Seller.
e) Seller acknowledges responsibilty for all interconnection costs and any costs
associated with acquirig adequate firm transmission capacity to enable the
project to be classified as an Idaho Power finn 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 Facilty's energy to an acceptable point of delivery on
the Idao Power electrcal system.
5.8 Within thiry (30) days of the date of a Commission Order as specified in Aricle XXI approving
this Agreement the Seller shall post liquid securty ("Delay Security") in a form as described in
Appendix D equal to or exceeding the amount calculated in paragraph 5.8.1.
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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 estimated
revenue. Where the estimated three months of revenue is the estimated revenue
associated with the first three full months following the estimated Scheduled Operation
Date, the estimated kWh of energy production as specified in paragraph 6.2.1 for those
three months multiplied by the All Hour Energy Price specified in paragraph 7.3 for
each of those three months.
5.8.1.1 In the event (a) Seller provides Idaho Power with certification that (1) a
Generation Interconnection Agreement specifying a schedule that wil enable this
Facilty to achieve the Operation Date no later than the Scheduled Operation
Date has been completed and the Seller has paid all required interconnection
costs or (2) a Generation Interconnection Agreement is substatially complete
and all material costs of interconnection have been identified and agreed upon
and the Seller is in compliance with all terms and conditions of the Generation
Interconnection Agreement, the Delay Security calculated in accordance with
paragraph 5.8.1 wil be reduced by ten percent (10%).
5.8.1.2 If the Seller has received a reduction in the calculated Delay Securty as specified
in paragraph 5.8.1.1 and subsequently (1) at Seller's request, the Generation
Interconnection Agreement specified in paragraph 5.8.1.1 is revised and as a
result the Facility wil not achieve its Operation Date by the Scheduled Operation
Date or (2) if the Seller does not maÌntain 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 Idaho Power requests reinstatement. Failure
to timely reinstate the Delay Security wil be a Material Breach of this
Agreement.
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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 Idao 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 AN SALE OF NET ENERGY
6.1 Delivery and Acceptace of Net Energy - Except when either Pary's performance is excused as
provided herein, Idaho Power wil purchase and Seller wil sell all of the Net Energy to
Idaho Power at the Point of Delivery. All Inadvertent Energy produced by the Facility wil also
be delivered by the Seller to Idaho Power at the Point of Delivery. At no time wil the total
amount of Net Energy and/or Inadvertent Energy produced by the Facility and delivered by the
Seller to the Point of Delivery exceed the Maximum Capacity Amount.
6.2 Net Energy Amounts - Seller intends to produce and deliver Net Energy in the following monthly
amounts:
Intial Year Monthly Net Energy Amounts:
Month kWh
Season 1
March
April
May
o
50,000
175,000
July
August
175,000
175,000
20,000
10,000
Season 2 November
December
Season 3
June
September
October
Januar
Februar
175,000
200,000
200,000
o
o
6.2.1 Ongoing Monthly Net Energy Amounts - Seller shall initially provide Idao Power with
one year of monthly generation estimates (Intial Year Monthly Net Energy Amounts)
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and beginning at the end of month nine and every three months thereafter provide Idaho
Power with an additional three months of forward generation estimates beyond those
generation estimates previously provided. This information wil be provided to
Idaho Power by written notice in accordance with pargraph 25.1, no later than 5:00 PM
of the 5th day following the end of the previous month. If the Seller does not provide the
Ongoing Monthly Net Energy Amounts in a timely maner, Idaho Power wil use the
most recent 3 months of the Initial Year Monthly Net Energy Amounts specified in
paragraph 6.2.1 for the next 3 months of monthly Net Energy amounts.
6.2.2 Seller's Adjustment of Net Energy Amount
6.2.2.1 No later than the Operation Date, by written notice given to Idaho Power in
accordance with paragraph 25.1, the Seller may revise all of the previously
provided Intial Year Monthly Net Energy Amounts.
6.2.2.2 Beginning with the end of the 9th month after the Operation Date and at the end
of every third month thereafter: (1) the Seller may not revise the immediate next
three months of previously provided Net Energy Amounts, (2) but by wrtten
notice given to Idaho Power in accordace with paragraph 25.1, no later than
5:00 PM of the 5th day following the end of the previous month, the Seller may
revise all other previously provided Net Energy Amounts. Failure to provide
timely written notice of changed amounts wil be deemed to be an election of no
change.
6.2.4 Idaho Power Adjustment of Net Energy Amount - If Idaho Power is excused from
accepting the Seller's Net Energy as specified in paragraph 12.2.1 or if the Seller declares
a Suspension of Energy Deliveries as specified in pargraph 12.3.1 and the Seller's
declared Suspension of Energy Deliveries is accepted by Idao Power, the Net Energy
Amount as specified in pargraph 6.2 for the specific month in which the reduction or
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suspension under paragraph 12.2.1 or 12.3.1 occurs will be reduced in accordace with
the following:
Where:
NEA Current Month's Net Energy Amount (Paragraph 6.2)
SGU a.) If Idao Power is excused from accepting the Seller's Net
Energy as specified in paragraph 12.2.1 this value wil be
equal to the percentage of curtailment as specified by
Idaho Power multiplied by the TGU as defined below.
b.) If the Seller declares a Suspension of Energy Deliveries as
specified in paragraph 12.3.1 this value wil be the sum of
the individual generation units size ratings as specified in
Appendix B that are impacted by the circumstances
causing the Seller to declare a Suspension of Energy
Deliveries.
TGU Sum of all of the individual generator ratings of the generation
units at this Facility as specified in Appendix B of this
Agreement.
RSH Actual hours the Facility's Net Energy deliveries were either
reduced or suspended under pargraph 12.2.1 or 12.3.1
TH Actual total hours in the curent month
Resulting formula being:
~~~u~::~gy = NEA _ (( ~~~ X NEA ) X (~: ) )
Amount
This Adjusted Net Energy Amount wil be used in applicable Surplus Energy calculations for
only the specific month in which Idaho Power was excused from accepting the Seller's Net
Energy or the Seller declared a Suspension of Energy.
6.3 Unless excused by an event of Force Majeure, Seller's failure to deliver Net Energy in any
Contract Year in an amount equal to at least ten percent (10%) of the sum of the Initial Year Net
Energy Amounts as specified in paragraph 6.2 shall constitute an event of default.
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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-levelized energy price in accordace with Commssion
Order 31025 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
Season i - (73.50 %)Season 2 - (120.00 %) Season 3 - (100.00 %)
MilslkWh
44.04
46.52
49.26
51.86
54.66
57.66
59.39
61.09
62.93
64.75
66.62
68.84
71.15
Mils/kWh
71.90
75.95
80.43
84.68
89.24
94.14
96.96
99.73
102.75
105.71
108.77
112.40
116.17
Mils/kWh
59.91
63.30
67.02
70.56
74.37
78.45
80.80
83.11
85.62
88.09
90.64
93.66
96.81
7.2 Base Energy Light Load Purchase Price - For all Base Energy received durng Light Load Hours,
Idaho Power wil pay the non-levelized energy price in accordace with Commission Order
31025 and adjusted in accordance with Commission Order 30415 for Light Load Hour Energy
deliveries with seasonalization factors applied:
Year
2010
2011
2012
2013
2014
2015
2016
2017
Season 1 - (73.50 %)Season 2 - (120.00 %) Season 3 - (100.00 %)
Mils/kWh
38.69
41.17
43.91
46.51
49.31
52.31
54.04
55.74
Mils/kWh
63.16
67.22
71.69
75.94
80.50
85.41
88.23
91.00
Mils/kWh
52.63
56.02
59.74
63.28
67.09
71.17
73.52
75.83
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2018 57.58 94.01 78.34
2019 59.40 96.97 80.81
2020 61.27 100.03 83.36
2021 63.49 103.66 86.38
2022 65.80 107.43 89.53
7.3 All Hours Energy Price - The price to be used in the calculation of the Surlus Energy Price and
Delay Damage Price shall be the non-levelized energy price in accordance with Commssion
Order 31025 with seasonalization factors applied:
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Season 1 - (73.50%)Season 2 - (120.00 %) Season 3 - (100.00 %)
Mils/kWh
41.66
44.14
46.88
49.48
52.28
55.28
57.01
58.71
60.55
62.36
64.24
66.46
68.77
Mils/kWh
68.01
72.07
76.54
80.79
85.35
90.25
93.08
95.85
98.86
101.82
104.88
108.51
112.28
Mils/kWh
56.67
60.06
63.78
67.32
71.13
75.21
77.56
79.87
82.38
84.85
87.40
90.42
93.57
7.4 Surplus Energy Price - For all Surlus Energy, Idao Power shall pay to the Seller the current
month's Market Energy Reference Price or the All Hours Energy Price specified in
paragraph 7.3, whichever is lower.
7.5 Inadverent Energy-
7.5.1 Inadvertent Energy is electric energy produced by the Facility, expressed in kWh,
which the Seller delivers to Idaho Power at the Point of Delivery that exceeds 10,000
kW multiplied by the hours in the specific month in which the energy was delivered.
(For example Januar contains 744 hours. 744 hours times 10,000 kW = 7,440,000
kWh. Energy delivered in January in excess of 7,440, 000 kWh in this example
would be Inadvertent Energy.)
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7.5.2 Although Seller intends to design and operate the Facilty to generate no more than
10 average MW and therefore does not intend to generate Inadvertent Energy,
Idaho Power wil accept Inadvertent Energy that does not exceed the Maximum
Capacity Amount but wil not purchase or pay for Inadvertent Energy.
7.6 Payment Due Date - Undisputed Energy payments, less any payments due to Idaho Power wil be
disbursed to the Seller within 30 days of the date which Idaho Power receives and accepts the
documentation of the monthly Net Energy actually delivered to Idaho Power as specified in
Appendix A.
7.7 Continuing Jurisdiction of the Commission -This Agreement is a special contrct and, as such, the
rates, terms and conditions contained in this Agreement wil be construed in accordace with
Idaho Power Company v. Idaho Public Utilities Commission and Afton Energy, Inc., 107 Idao
781, 693 P.2d 427 (1984), Idaho Power Company v. Idaho Public Utilties Commission, 107
Idaho 1122,695 P.2d 1 261 (1985), Afton Energy, Inc, v. Idaho Power Company, 111 Idaho 925,
729 P.2d 400 (1986), Section 210 of the Public Utilties Regulatory Policies Act of 1978 and 18
CFR §292.303-308
ARTICLE VII: ENVIRONMENTAL ATTRIUTES
8.1 Seller retains ownership under this Agreement of Green Tags and Renewable Energy Certificate
(RECs), or the equivalent environmental attributes, directly associated with the production of
energy from the Seller's Facilty sold to Idaho Power.
ARTICLE IX: FACILITY AN INERCONNCTION
9.1 Design of Facility - Seller wil design, construct, install, own, operate and maintain the Facility
and any Seller-owned Interconnection Facilities so as to allow safe and reliable generation and
delivery of Net Energy and Inadvertent Energy to the Idaho Power Point of Delivery for the full
term of the Agreement.
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ARTICLE X: METERIG AN TELEMETRY
10.1 Metering - Idaho Power shall, for the account of Seller, provide, install, and maintain Metering
Equipment to be located at a mutually agreed upon location to record and measure power flows to
Idao Power in accordace with this Agreement and Schedule 72. The Meterig Equipment wil
be at the location and the type required to measure, record and report the Facilty's Net Energy,
Station Use, Inadvertent Energy and maximum energy deliveries (kW) at the Point of Delivery in
a manner to provide Idaho Power adequate energy measurement data to administer this
Agreement and to integrate this Facility's energy production into the Idaho Power electrical
system.
10.2 Telemetry - Idaho Power wil install, operate and maintain at Seller's expense communications
and telemetry equipment which wil be capable of providing Idao Power with continuous
instantaneous telemetry of Seller's Net Energy and Inadvertent Energy produced and delivered to
the Idaho Power Point of Delivery to Idaho Power's Designated Dispatch Facility.
ARTICLE XI - RECORDS
11.1 Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Parties adequate total generation, Net Energy, Station Use, Inadvertent Energy
and maximum generation (kW) records in a form and content acceptable to Idao Power.
11.2 Inspection - Either Pary, after reasonable notice to the other Pary, shall have the right, durg
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 accordace with
Appendix A of this Agreement.
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12 .2 Energy Acceptance -
12.2.1 Idaho Power shall be excused from accepting and payig for Net Energy or accepting
Inadvertent Energy which would have otherwise been produced by the Facilty and
delivered by the Seller to the Point of Delivery, if it is prevented from doing so by an
event of Force Majeure, or temporary disconnection of the 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 interption, curailment or reduction, Seller wil be deemed to be
delivering Net Energy at a rate equivalent to the pro rata daily average of the amounts
specified for the applicable month in paragraph 6.2. Idaho Power wil notify Seller when
the interrption, curailment or reduction is terminated.
12.2.2 If, in the reasonable opinion of Idaho Power, Seller's operation of the Facilty or
Interconnection Facilties is unsafe or may otherwise adversely affect Idaho Power's
equipment, personnel or servce to its customers, Idaho Power may temporarily
disconnect the Facilty from Idaho Power's transmission/distribution system as specified
within Schedule 72 or tae such other reasonable steps as Idao 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 limt 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 Facility's energy, Idaho Power's damages shall be limited to only the value
of the estimated energy that Idao 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.
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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 givig notice as
provided in pargraph 12.3.2 below, temporarily suspend all deliveries of Net Energy to
Idaho Power from the Facilty or from individual generation unt(s) within the Facility
impacted by the forced outage for a perod of not less than 48 hours to correct the forced
outage condition ("Declared Suspension of Energy Deliveries"). The Seller's Declared
Suspension of Energy Deliveries wil begin at the start of the next full hour following the
Seller's telephone notification as specified in paragraph 12.3.2 and wil continue for the
time as specified (not less than 48 hours) in the written notification provided by the
Seller. In the month(s) in which the Declared Suspension of Energy occured, the Net
Energy Amount wil be adjusted as specified in pargraph 6.2.4.
12.3.2 Ifthe Seller desires to initiate a Declared Suspension of Energy Deliveries as provided in
paragraph 12.3.1, the Seller wil notify the Designated Dispatch Facilty by telephone.
The beginnng hour of the Declared Suspension of Energy Deliveries wil be at the
earliest the next full hour after making telephone contact with Idaho Power. The Seller
wil, within 24 hours after the telephone contact, provide Idaho Power a wrtten notice in
accordance with Aricle XXIV that wil contain the begining hour and duration of the
Declared Suspension of Energy Deliveries and a description of the conditions that caused
the Seller to initiate a Declared Suspension of Energy Deliveries. Idaho Power wil
review the documentation provided by the Seller to determine Idaho Power's acceptance
of the described forced outage as qualifying for a Declared Suspension of Energy
Deliveries as specified in paragraph 12.3.1. Idaho Power's acceptance of the Seller's
forced outage as an acceptable forced outage wil be based upon the clear documentation
provided by the Seller that the forced outage is not due do an event of Force Majeure or
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by neglect, disrepair or lack of adequate preventative maintenance ofthe Seller's Facility.
12.4 Scheduled Maintenance - On or before Januar 31 of each calenda year, Seller shall submit a
written proposed maintenance schedule of significant Facility 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 acceptabilty of the Seller's timetable for scheduled
maintenance wil take into consideration Prudent Electrical Practices, Idaho Power system
requirements and the Seller's prefered schedule. Neither Pary shall uneasonably withhold
acceptance of the proposed maintenance schedule.
12.5 Maintenance Coordination - The Seller and Idao Power shall, to the extent practical, coordinate
their respective line and Facility maintenance schedules such that they occur simultaneously.
12.6 Contact Prior to Curilment - Idaho Power wil make a reasonable attempt to contact the Seller
prior to exercising its rights to interrpt interconnection or curtail deliveries from the Seller's
Facilty. Seller understands that in the case of emergency circumstances, real time operations of
the electrical system, and/or unplaned events Idaho Power may not be able to provide notice to
the Seller prior to interrption, curtailment, 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 Pary, its
officers, agents, affliates, subsidiares, parent company and employees against all loss, damage,
expense and liability to third persons for injury to or death of person or injury to property,
proximately caused by the indemnifying Pary's (a) construction, ownership, operation or
maintenance of, or by failure of, any of such Pary's works or facilities used in connection with
this Agreement or (b) negligent or intentional acts, errors or omissions. The indemnfying Pary
shall, on the other Pary's request, defend any suit asserting a claim covered by this indemnity.
The indemnifyng Pary shall pay all documented costs, including reasonable attorney fees that
may be incurred by the other Pary in enforcing this indemnity.
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13.2 Insurance - Durng the term of this Agreement, Seller shall secure and continuously car the
following insurance coverage:
13.2.1 Comprehensive General Liabilty Insurance for both bodily injury and propery damage
with limits equal to $1,000,000, each occurrence, combined single limit. The deductible
for such insurance shall be consistent with curent Insurace Industry Utility practices for
similar property.
13.2.2 The above insurance coverage shall be placed with an insurance company with an A.M.
Best Company rating of A- or better and shall include:
(a) An endorsement naming Idaho Power as an additional insured and loss payee as
applicable; and
(b) A provision stating that such policy shall not be canceled or the limits of liabilty
reduced without sixty (60) days' prior wrtten notice to Idaho Power.
13.3 Seller to Provide Certificate of Insurance - As required in paragraph 4.1.5 herein and annually
thereafter, Seller shall fuish Idaho Power a certificate of insurance, together with the
endorsements required therein, evidencing the coverage as set forth above.
13.4 Seller to Notify Idaho Power of Loss of Coverage - If the insurance coverage required by
paragraph 13.2 shall lapse for any reason, Seller wil imediately notify Idaho Power in writing.
The notice wil advise Idaho Power of the specific reason for the lapse and the steps Seller is
taking to reinstate the coverage. Failure to provide this notice and to expeditiously reinstate or
replace the coverage wil constitute a Material Breach of this Agreement.
ARTICLE XIV: FORCE MAJEUR
14.1 As used in this Agreement, "Force Majeure" or "an event of Force Majeure" means any cause
beyond the control of the Seller or of Idao Power which, despite the exercise of due dilgence,
such Party is unable to prevent or overcome. Force Majeure includes, but is not limited to, acts of
God, fire, flood, storms, wars, hostilties, civil strife, strikes and other labor distubances,
earthquakes, fires, lightning, epidemics, sabotage, or changes in law or regulation occurrng after
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the effective date, which, by the exercise of reasonable foresight such party could not reasonably
have been expected to avoid and by the exercise of due dilgence, it shall be unable to overcome.
If either Pary is rendered wholly or in part unable to perform its obligations under this
Agreement because of an event of Force Majeure, both Paries shall be excused from whatever
performance is affected by the event of Force Majeure, provided that:
(1) The non-performing Pary shall, as soon as is reasonably possible after the
occurrence of the Force Majeure, give the other Part written notice describing
the particulars of the occurence.
(2) The suspension of perormance 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 perormance 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 Liability. Nothing in this Agreement shall be construed to create any duty to, any
standad of care with reference to, or any liabilty to any person not a Pary to this Agreement.
Neither party shall be liable to the other for any indirect, special, consequential, nor punitive
daages, except as expressly authorized by this Agreement. Consequential daages wil
include, but not be limited to, the value of renewable energy credits and, if the Facility is fueled
by gas produced by an anaerobic digester system, any diminution or loss of anaerobic activity due
to the inabilty of Idao Power to accept energy from the Facilty.
15.2 Dedication. No undertaking by one Party to the other under any provision ofthis Agreement
shall constitute the dedication of that Pary's system or any portion thereof to the Pary or the
public or affect the status of Idaho Power as an independent public utility corporation or Seller as
an independent individual or entity.
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ARTICLE XVI: SEVERA OBLIGATIONS
16.1 Except where specifically stated in this Agreement to be otherwise, the duties, obligations and
liabilties of the Paries are intended to be several and not joint or collective. Nothing contained
in this Agreement shall ever be construed to create an association, trust, parership or joint
venture or impose a trust or partnership duty, obligation or liabilty on or with regard to either
Pary. Each Party shall be individually and severally liable for its own obligations under this
Agreement.
ARTICLE XVII: WAIER
17.1 Any waiver at any time by either 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 AND VENU
18.1 This Agreement shall be construed and interreted in accordance with the laws of the State of
Idaho without reference to its choice of law provisions.
18.2 Venue for any litigation arsing out of or related to this Agreement wil lie in the Distrct Cour of
the Fourth Judicial District ofIdao in and for the County of Ada.
ARTICLE XIX: DISPUTES AN DEFAULT
19.1 Disputes - All disputes related to or arising under this Agreement, including, but not limited to,
the interpretation of the terms and conditions of this Agreement, wil be submitted to the
Commission for resolution.
19.2 Notice of Default
19.2.1 Defaults. If either Pary fails to perform any of the terms or conditions of this
Agreement (an "event of default"), the non-defaulting Pary shall cause notice in
writing to be given to the defaulting Party, specifyng the manner in which such
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default occurred. If the defaulting Pary shall fail to cure such default within the sixty
(60) days after servce of such notice, or if the defaulting Pary reasonably
demonstrates to the other 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
pursue such cure, then, the non-defaulting Party may, at its option, terminate this
Agreement and/or pursue its legal or equitable remedies.
19.2.2 Material Breaches - The notice and cure provisions in paragraph 19.2.1 do not apply
to defaults identified in this Agreement as Material Breaches. Materal Breaches must
be cured as expeditiously as possible following occurnce of the breach.
19.3 Security for Performance - Prior to the Operation Date and thereafter for the full ter of this
Agreement, Seller wil provide Idaho Power with the following:
19.3.1 Insurance - Evidence of compliance with the provisions of paragraph 13.2. If Seller
fails to comply, such failure wil be a Material Breach and may only be cured by
Seller supplying evidence that the required insurnce coverage has been replaced or
reinstated;
Engineer's Certifications - Every three (3) years after the Operation Date, Seller wil
supply Idaho Power with a Certification of Ongoing Operations and Maintenance
(O&M) from a Registered Professional Engineer licensed in the State of Idaho, which
Certification of Ongoing 0 & M shall be in the form specified in Appendix C. Seller's
failure to supply the required certificate wil be an event of default. Such a default
19.3.2
19.3.3
may only be cured by Seller providing the required certificate; and
Licenses and Permits - Durig the full term of this Agreement, Seller shall maintain
compliance with all perts 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 Paragraph 4.1.1. If at any time Seller fails to maintain
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compliance with the permts and licenses described in pargraph 4.1.1 or to provide
the documentation required by this paragraph, such failure wil be an event of default
and may only be cured by Seller submitting to Idaho Power evidence of compliance
from the permitting agency.
ARTICLE XX: GOVERNMENTAL AUTHORIZATION
20.1 This Agreement is subject to the jurisdiction of those governental agencies having control over
either Pary of this Agreement.
ARTICLE XXI: COMMISSION ORDER
21.1 This Agreement shall become finally effective upon the Commission's approval of all terms and
provisions hereof without change or condition and declaration that all payments to be made to
Seller hereunder shall be allowed as prudently incured expenses for ratemaking purposes.
ARTICLE XXII: SUCCESSORS AN ASSIGNS
22.1 This Agreement and all of the terms and provisions hereof shall be binding upon and inure to the
benefit of the respective successors and assigns of the Paries hereto, except that no assignent
hereof by either Pary shall become effective without the written consent of both Parties being
first obtained. Such consent shall not be unreasonably withheld. Notwithstandig the foregoing,
any party which Idaho Power may consolidate, or into which it may merge, or to which it may
conveyor transfer substantially all of its electric utility assets, shall automatically, without further
act, and without need of consent or approval by the Seller, succeed to all ofIdaho Power's rights,
obligations and interests under this Agreement. This aricle shall not prevent a financing entity
with recorded or secured rights from exercising all rights and remedies available to it under law
or contract. Idao Power shall have the right to be notified by the financing entity that it is
exercising such rights or remedies.
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ARTICLE XXII: MODIFICATION
23.1 No modification to this Agreement shall be valid unless it is in writing and signed by both Paries
and subsequently approved by the Commission.
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 Facilties.
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:
James Miler
J. M. Miler Enterprises, Inc.
2392 Fuller Court
An Arbor, MI 48105
Telephone:
Cell:
FAX:
734-662-6822
208-308-1488
734-747-9712
E-mail: jim§milerengineering.com
To Idao Power:
Original document to:
Vice President, Power Supply
Idaho Power Company
POBox 70
Boise, Idaho 83707
Email: LGgrow§idahopower.com
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Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
POBox 70
Boise, Idaho 83707
E-mail: rallphi~idaopower.com
Either Pary may change the contact person and/or address information listed above, by providing written
notice from an authorized person representing the Pary.
ARTICLE XXVI: ADDITIONAL TERMS AND 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 Deliver
Engineer's Certifications
Forms of Liquid Security
ARTICLE XXVII: SEVERAILITY
27.1 The invalidity or unenforceability of any term or provision of this Agreement shall not affect the
validity or 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 counterpars, each of which shall be deemed an
original but all of which together shall constitute one and the same instruent.
ARTICLE XXIX: ENTIR AGREEMENT
29.1 This Agreement constitutes the entire Agreement of the Parties concering the subject matter
hereof and supersedes all prior or contemporaneous oral or written agreements between the
Parties concernng the subject matter hereof.
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IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be
executed in their respective names on the dates set forth below:
Idaho Power Company
By
Dated
Lisa A Grow
Sr. Vice President, Power Supply
LLZ,o )0
"Idaho Power"
J.M. Miler Enterprises, Inc.
By ~?n.7MJ(k
James M. Miler, President
Dated ~L)~ÔIO
"Sellet'
I
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APPENDIX A
A -1 MONTHLY POWER PRODUCTION AN SWITCHING REPORT
At the end of each month the following required documentation wil be submitted to:
Idaho Power Company
Attn: Cogeneration and Small Power Production
POBox 70
Boise, Idaho 83707
The meter readings required on this report wil be the readings on the Idaho Power Meter Equipment
measuring the Facility's total energy production and Station Usage delivered to Idao Power and the
maximum generated energy (kW) as recorded on the Metering Equipment and/or any other required
energy measurements to adequately administer this Agreement. This document shall be the document to
enable Idaho Power to begin the energy payment calculation and payment process. The meter readings
on this report shall not be used to calculate the actul payment, but instead wil be a check of the
automated meter reading information that wil be gathered as described in item A-2 below:
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Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
Project Name
Month Year
Project Number:
Address
ZipCity
Meter Number:
End of Month kWh Meter Readig:
Beginning of Month kWh Meter:
Difference:
Times Meter Constant:
kWh for the Month:
Metered Demand:
Breaker Opening Record
Date Time Meter
*Breaker Openig Reason Codes
Lack of Adequate Prime Mover
Forced Outage of Facilty
Disturbance of IPCo System
Scheduled Maintenance
Testing of Protection Systems
Cause Unknown
Other (Explain)
1
2
3
4
5
6
7
State
Facilty
Output
Station
Usage
*Reason
Phone Number:
Station
Usage
Metered
Maximum Generation
kW
Net Generation
Breaker Closing Record
Date Time Meter
I hereby certify that the above meter readings are
true and correct as of Midnight on the last day of the
above month and that the switching record is accurate
and complete as required by the Firm Energy Sales
Agreement to which I am a Party.
Signature
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Date
10/27/2010
A-2 AUTOMATED METER READING COLLECTION PROCESS
Monthly, Idaho Power will use the provided Metering and Telemetr equipment and processes to collect
the meter reading information from the Idao Power provided Metering Equipment that measures the Net
Energy and energy delivered to supply Station Use for the Facility recorded at 12:00 AM (Midnght) of
the last day of the month..
The meter information collected wil include but not be limited to energy production, Station Use, the
maximum generated power (kW) and any other required energy measurements to adequately administer
this Agreement.
A-3 ROUTIN REPORTING
Once the Facility has achieved its Operation Date and has operated in a reliable and consistent
manner for a reasonable period of time, the Paries may mutually agree to modify this Routine
Reporting requirement.
Idaho Power Contact Information
Daily Energy Production Reporting
Call daily by 10 a.m., 1-800-356-4328 or 1-800-635-1093 and leave the following
information:
. Project Identification - Project Name and Project Number
. Curent Meter Reading
· Estimated Generation for the 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:
Kevin Woody
208-326-3320
208-308-3320
Project On-site Contact inormation
Name:
Telephone Number:
Kevin Woody
208-326-3320
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APPENDIXB
FACILITY AN POIN OF DELIVERY
Project Name: Saho Hydro
Project Number: 31617100
B-1 DESCRITION OF FACILITY
(Must include the Nameplate Capacity rating and V AR capabilty (both leading and lagging) of all
generation units to be included in the Facility.)
One Westinghouse 625 kVA generator unit, 2300 volts, 153 amperes, 80% Power Factor,
3-phase, 60 cycles, 720 rpm, 64.5 excitation amps, 125 excitation volts.
Var Capability (Both leading and lagging) Leading .5, Lagging .5
B-2 LOCATION OF FACILITY
Near: Filer, Idaho
Section 13, Township 9 South, Range 15 East, County: Twin Falls County, ID.
Description of Interconnection Location: 4400N 2100E (Northwest Comer)
Nearest Idaho Power Substation: Filer
B-3 SCHEDULED FIRST ENERGY AN OPERATION DATE
Seller has selected 30 days past the date this Agreement is approved by the Commission as
specified in paragraph 21.1 of this Agreement as the Scheduled First Energy Date.
Seller has selected 30 days past the date this Agreement is approved by the Commission as
specified in paragraph 21.1 of this Agreement as the Scheduled Operation Date.
In making these selections, Seller recognizes that adequate testing of the Facility and completion
of all requirements in paragraph 5.2 of this Agreement must be completed prior to the project
being granted an Operation Date.
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B-4 MAXIMUM CAPACITY AMOUN:
This value wil be ~MW which is consistent with the value provided by the Seller to
Idaho Power in accordace with Schedule 72. This value is the maximum energy (MW) that
potentially could be delivered by the Seller's Facility to the Idaho Power electrical system at any
moment in time.
B-5 POIN OF DELIVERY
"Point of Delivery" means, unless otherwise agreed by both Paries, the point of where the Sellers
Facility's energy is delivered to the Idaho Power electrical system. Schedule 72 wil determe
the specific Point of Delivery for this Facilty. The Point of Delivery identified by Schedule 72
wil become an integral par of this Agreement.
B-6 LOSSES
If the Idaho Power metering equipment is capable of measurng the exact energy deliveries by the
Seller to the Idaho Power electrical system at the Point of Delivery, no Losses wil be calculated
for this Facility. If the Idaho Power meterig equipment 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 (kWh) losses between the Seller's Facilty
and the Idaho Power Point of Delivery. This Losses 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 electrcal equipment specifications (transformer loss
specifications, conductor sizes, etc.) of all of the electrical equipment between the Facility and the
Idaho Power electrcal system, Idaho Power wil configure a revised Losses calculation formula
to be agreed to by both parties and used to calculate the kWh losses for the remaining term of the
Agreement. If at any time during the term of this Agreement, Idaho Power determines that the
Losses calculation does not correctly reflect the actual kWh losses attributed to the electrical
equipment between the Facilty and the Idaho Power electrical system, Idao Power may adjust
the calculation and retroactively adjust the previous months kWh losses calculations.
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B-7 METERIG AND TELEMETRY
Schedule 72 wil determine the specific metering and telemetry requirements for ths Facilty. At
the minimum the Meterig Equipment and Telemetry equipment must be able to provide and
record hourly energy deliveries to the Point of Delivery and any other energy measurements
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
communcation circuit(s) compatible with Idaho Power's communications equipment and
dedicated to Idaho Power's use terminating at the Idaho Power facilities capable of providing
Idaho Power with continuous instantaneous information on the Facility's energy production.
Idaho Power provided equipment wil be owned and maintained by Idaho Power, with total cost
of purchase, installation, operation, and maintenance, including administrative cost to be
reimbursed to Idao Power by the Seller. Payment of these costs wil be in accordance with
Schedule 72 and the total metering cost wil be included in the calculation of the Monthly
Operation and Maintenance Charges specified in Schedule 72.
B-8 NETWORK RESOURCE DESIGNATION
Idaho Power cannot accept or pay for generation from this Facility until a Network Resource
Designation ("NR") application has been accepted by Idao Power's delivery business unit.
Federal Energy Regulatory Commission ("FERC") rules require Idao 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 Facility, Idaho Power's abilty to fie the NR in a timely maner is
contingent upon timely receipt of the required information from the Seller. Prior to Idaho Power
beginning 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 failure to provide complete and accurate information in a timely manner can
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significantly impact Idaho Power's abilty and cost to attain the NR designation for the
Seller's Facilty and the Seller shall bear the costs of any of these delays that are a result of
any action or inaction by the Seller.
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APPENDIXC
ENGINER'S CERTIFICATION
OF
OPERATIONS & MAIENANCE POLICY
The undersigned J e-Md!;S AiIL.¿.ete , on behalf of hiself!erself and
'!.M. N!Il-£èfl l?N~/Ñ¡¡IØ"'IN(J; ):.-(;., hereinafter collectively re~rred to as "Engineer," hereby states and certifies to the Seller
as follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between
;¡ p1 /1, l,fi It
Idaho Power as Buyer, andßvGJt"ItJ6s)~.ler, dated.1!VØA1ßF/C I) 2-"ø
3. That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facilty No. 3/6/ n /ÔO and is hereinafter referred to as
the "Project."
4. That the Project, which is commonly known as the 5ÎlC /-t?Project, is located in
Section -- Township q S Range / ~ E. , Boise Merdian, htIK ~unty, Idaho.
5. That Engineer recognizes that the Agreement provides for the Project to fush electrical energy
to Idaho Power for a ¡ l) year period.
6. That Engineer has substantial experience in the design, construction and operation of electric
power plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
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8. That Engineer has reviewed and/or supervised the review of the Policy for Operation and
Maintenance (nO&Mn) for this Project and it is his professional opinion that, provided said Project has
been designed and built to appropriate standards, adherence to said O&M Policy wil result in the
Project's producing at or near the design electrical output, efficiency and plant factor for a ten (l0) year
period.
9. That Engineer recognizes that Idaho Power, in accordace with paragraph 5.2 of the Agreement,
is relying on Engineer's representations and opinions contained in this Statement.
10. That Engineer certifies that the above statements are complete, true and accurte to the best of
his/her knowledge and therefore sets his/her hand and seal below.
B~~/¥l)hP
(P .E. Stamp)
Date ,AVSM 6P I) ~ l) 10.
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APPENDIXC
ENGINER'S CERTIFICATION
OF
ONGOING OPERATIONS AN MAIENANCE
The undersigned èJ e ~ ;1, /, ¡,ere , on behalf of himself !herself
7 M. A1 ,U.9~ G,vGIAJ 6 E'fIA/G '"C.anõ' nereinafter ~ollectively referred to as "Engineer," hereby states and
certifies to the Seller as follows:
i. That Engineer is a Licensed Professional Engineer in good stading in the State of Idaho.
That Engineer has reviewed.. lhe Energy Sales Agreement, hereinafter "Agreement," between
;r.M. lVlu,,l1/l J /
Idaho Power as Buyer, and ~ ,1!1t1t;~J ~eller, dated lV(/ BFJt 'J ;)¿;/ ~
3. That the cogeneration or small power production project which is the subject of the Agreement
2.
and this Statement is identified as IPCo Facility No.3/6 L ? ItJand hereinafter refered to as the
"Project".
4. That the Project, which is commonly known as therik¡; flpel) Project, is located in
Section ~ Township q S Range 15: E, Boise Meridian,7WN ~ounty, Idao.
5. That Engineer recognizes that the Agreement provides for the Project to fush electrical energy
to Idaho Power for a ten (10) year period.
6. That Engineer has substantial experience in the design, construction and operation of electric
power plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
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8. That Engineer has made a physical inspection of said Project, its operations and maintenance
records since the last previous certified inspection. It is Engineer's professional opinon, based on the
Project's appearance, that its ongoing O&M has been substantially in accordance with said O&M Policy;
that it is in reasonably good operating condition; and that if adherence to said O&M Policy continues, the
Project wil continue producing at or near its design electrical output, efficiency and plant factor for the
remaining -- years of the Agreement.
9. That Engineer recognizes that Idaho Power, in accordance 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/her knowledge and therefore sets his/her hand and seal below.
Byr 7J?n fJ~ Pi' l)
(P .E. Stamp)
DateAl~/) ')P/ó
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APPENDIXC
ENGINER'S CERTIFICATION
OF
DESIGN & CONSTRUCTION ADEQUACY
The undersigned ~Al¡;.s Jl1 L.¿,(i1e
J.A.f!Iu- Ji~~Ji~er collectvely referrd to as "Eogiee", heby states aod
, on behalf of hiself/erelf and
certifies to Idaho Power as follows:
1.That Engineer is a Licensed Professional Engineer in good standing in the State ofIdao.
2. That Engineer has reviewed the Fir Energy Sales Agreement, hereinafter "Agreement",
between Idao Power as Buyer, ani£ I'#i~ ~'i1l ~Seller, dated ~Â~ J ~.IVI¿IiM ßfi I) ;il)/~
3.That the cogeneration or small power production project, which is the subject of the
Agreement and this Statement, is identified as IPCo Facilty No 3/t/11l)l) and is hereinafter
referred to as the "Project".
4. That the Project, which is commonly known as the f!ltJ !f~td Project, is located in
Section a Township q S Range /£G , Boise Meridian~County, Idaho.
5.That Engineer recognizes that the Agreement provides for the Project to fush electrical
energy to Idaho Power for a ten (l0) 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 and
has made the analysis ofthe plans and specifications independently.
8.That Engineer has reviewed the engineering design and construction of the Project,
including the civil work, electrcal work, generating equipment, prime mover conveyance system, Seller
furnshed Interconnection Facilties and other Project facilties and equipment.
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9.That the Project has been constructed in accordance with said plans and specifications, all
applicable codes and consistent with Prudent Electrcal Practices as that term is described in the
Agreement.
10.That the design and construction of the Project is such that with reasonable and prudent
operation and maintenance practices by Seller, the Project is capable of performing in accordance with the
terms of the Agreement and with Prudent Electrical Practices for a /~,year perod.
11.That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the
Agreement, in interconnecting the Project with its system, is relying on Engineer's representations and
opinions contained in this Statement.
12.That Engineer certifies that the above statements are complete, true and accurte to the
best of his !her knowledge and therefore sets his!her hand and seal below.
Byr?H. ~¡;ÆfJjiJ
(P.E. Stap)
Datel¡~4 ¿t2/1)
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10/27/2010
~
APPENDIXD
FORMS OF LIQUID SECURTY
The Seller shall provide Idaho Power with commercially reasonable securty instruents such as
Cash Escrow Security, Guarantee or Letter of Credit as those terms are defined below or other
forms of liquid financial securty that would provide readily available cash to Idaho Power to
satisfy the Delay 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 security instrument in relation to the term of
the obligation in the reasonable judgment of Idaho Power, provided that any guarantee and/or
letter of credit issued by any other entity with a short-term or long-term investment grade credit
rating by Standard & Poor's Corporation or Moody's Investor Servces, Inc. shall be deemed to
have acceptable financial creditworthiness.
i. Cash Escrow Security - Seller shall deposit funds in an escrow account established by the
Seller in a banng institution acceptable to both Parties equal to the Delay Security.
2. Guarantee or Letter of Credit Security - Seller shall post and maintain in an amount
equal to the Delay Security: (a) a guaranty from a pary that satisfies the Credit
Requirements, in a form acceptable to Idaho Power at its discretion, or (b) a Letter of
Credit in a form acceptable to Idaho Power, in favor of Idaho Power. The Letter of
Credit wil be issued by a financial institution acceptable to both paries.
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