20101213Application.pdf

'1:",,DONOVAN E. WALKER
Senior Counsel
dwalker(idahopower.com
esIDA~POR(I
An IDACORP company
December 10,2010
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-10-50
IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY
FOR A DETERMINATION REGARDING THE FIRM ENERGY SALES
AGREEMENT FOR THE SALE AND PURCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANY AND SALMON CREEK WIND
PARK, LLC.
Dear Ms. Jewell:
Enclosed for filng please find an original and seven (7) copies of Idaho Power
Company's Application in the above matter.
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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]
dwalker(áidahopower.com
Inordstrom(gidahopower.com
REG
zomOEC 10 PM 4= 33
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 ) CASE NO. IPC-E-10-50
A DETERMINATION REGARDING THE )
FIRM ENERGY SALES AGREEMENT FOR ) APPLICATION
THE SALE AND PURCHASE OF ELECTRIC )
ENERGY BETWEEN IDAHO POWER )
COMPANY AND SALMON CREEK WIND )PARK, LLC. )
)
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 Utilties Commission ("IPUC"
or "Commission") for an Order accepting or rejecting the Firm Energy Sales Agreement
("FESA") between Idaho Power and Salmon Creek Wind Park, LLC ("Salmon Creek" or
"Sellet') under which Salmon Creek would sell and Idaho Power would purchase
electric energy generated by the Salmon Creek Wind Park ("Facilty") located near
Rogerson, Idaho.
APPLICATION - 1
In support of this Application Idaho Power represents as follows:
I. BACKGROUND
1. Sections 201 and 210 of PURPA, and pertinent regulations of the Federal
Energy Regulatory Commission ("FERC"), require that regulated electric utilties
purchase power produced by cogenerators or small power producers that obtain
qualifying facility ("OF") status. The rate a OF receives for the sale of its power is
generally referred to as the "avoided cost" rate and is to reflect the incremental cost to
an electric 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 utilities
to enter into fixed-term obligations for the purchase of energy from QFs, and to
implement FERC rules.
2. Salmon Creek proposes to design, construct, install, own, operate, and
maintain a 20 megawatt ("MW") (Maximum Capacity Amount) wind generating facility to
be located near Rogerson, Idaho. The Facilty wil be a OF under the applicable
provisions of PURPA.
3. On November 5, 2010, Idaho Power filed a Joint Petition and Motion
seeking a reduction in the published avoided cost rate eligibilty cap from 10 aMW to
100 kilowatts ("kW"). Case No. GNR-E-10-04. On December 3, 2010, the Commission
issued Order No. 32131 setting a Modified Procedure comment schedule with which to
develop a record for its decision regarding the Joint Petition and Motion's request to
lower the published avoided cost rate eligibilty cap. Comments are due on December
APPLICATION - 2
22, 2010, Reply Comments are due January 19, 2011, and Oral Argument is scheduled
for January 27,2011. The Commission also ordered that its decision regarding whether
to reduce the published avoided cost eligibilty cap become effective on December 14,
2010.
4. Idaho Power has an obligation under federal law, FERC regulations, and
this Commission's Orders, that it has not been relieved of, to enter into power purchase
agreements with PURPA OFs. As stated in the Joint Petition filing, Idaho Power has
received a large amount, in terms of both volume and MWs, of requests from PURPA
OF developers demanding to enter into published avoided cost rate FESAs. The
Company continues to process these requests, in the ordinary course of business, and
file the same for review with this Commission, as is its legal obligation. However, the
request in this Application, as well as several other Applications that have been and wil
be filed over the course of the next couple of months, is made with the specific
reservation of rights and incorporation of the averments set forth in the Joint Petition
regarding the possible negative effects to the both the utilty and its customers of
additional and unfettered PURPA OF generation on system reliabilty, utility operations,
and costs of incorporating and integrating such a large penetration level of PURPA OF
generation into the utilty's system.
5. As recently as November 2, 2010, in the Yellowstone Power case, the
Commission reiterated to Idaho Power that, "we intend for the Company to assist the
Commission in its gatekeeper role of assuring that utility customers are not being asked
to pay more than the Company's avoided cost for the OF contracts. We expect Idaho
Power to rigorously review such contracts." Order No. 32104. Even though Idaho
APPLICATION - 3
Power is legally obligated to continue to negotiate, execute, and submit PURPA OF
contracts for Commission review, it also feels obligated to reiterate that the continuing
and unchecked requirement for the Company to acquire additional intermittent and
other OF generation regardless of its need for additional energy or capacity on its
system not only circumvents the Integrated Resource Planning process and creates
system reliabilty and operational issues, but it also increases the price its customers
must pay for their energy needs.
II. THE FIRM ENERGY SALES AGREEMENT
6. On December 10, 2010, Idaho Power and Salmon Creek entered into a
FESA pursuant to the terms and conditions of the various Commission Orders
applicable to this PURPA agreement for a wind resource. See Order Nos. 30415,
30488, 30738, and 31025. A copy of the FESA is attached to this Application as
Attachment No.1. Under the terms of this FESA, Salmon Creek elected to contract with
Idaho Power for a 20-year term using the non-Ievelized published avoided cost rates as
currently established by the Commission for energy deliveries of less than 10 average
megawatts ("aMW"). This FESA was executed by Salmon Creek on December 9,2010.
It was subsequently executed by Idaho Power on December 10,2010, and now filed for
the Commission's review on December 10,2010.
7. The nameplate rating of this Facilty is 20 MW. As defined in paragraph
1.17 and paragraph 4.1.3 of the FESA, Salmon Creek will be required to provide data
on the Facilty that Idaho Power will 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
APPLICATION - 4
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.
8. This PURPA wind agreement includes the Mechanical Availabilty
Guarantee ("MAG"), Wind Integration Cost reduction, and Wind Forecasting cost
sharing as required in Commission Order No. 30488. In addition, Salmon Creek and
Idaho Power have agreed to Delay Liquidated Damages and associated Delay Security
provisions of $45 per kW of nameplate capacity within this FESA that have previously
been approved as reasonable by the Commission in several PURPA FESAs. See Case
Nos. IPC-E-10-02, IPC-E-10-05, IPC-E-10-15, IPC-E-10-16, IPC-E-10-17, IPC-E-10-18,
IPC-E-1 0-19, and IPC-E-10-22.
9. Salmon Creek has elected May 30, 2012, as the Scheduled First Energy
Date and June 30, 2012, as the Scheduled Operation Date for this Facilty. See
Appendix B. Various requirements have been placed upon Salmon Creek in order for
Idaho Power to accept energy deliveries from this Facilty. Idaho Power wil monitor
compliance with these initial requirements. In addition, Idaho Power wil monitor the
ongoing requirements through the full term of this FESA.
10. The FESA, as signed and submitted by the parties thereto, contains non-
levelized published avoided cost rates in conformity with applicable IPUC Orders. All
applicable interconnection charges and monthly operation and maintenance charges
under Schedule 72 wil be assessed to Salmon Creek.
11 . The FESA provides that all applicable interconnection charges and
monthly operational or maintenance charges under Schedule 72 will be assessed to
APPLICATION - 5
Seller. The Facilty is currently in the beginning stages of the generator interconnection
process. Assuming that Seller continues to provide necessary technical information and
make payments for interconnection materials and studies in a timely manner, Idaho
Powets Delivery business unit wil be able to proceed with its interconnection and
transmission study processes, which ultimately results in a Schedule 72 Generator
Interconnection Agreement, or "GIA" between Salmon Creek and Idaho Power.
PURPA OF generation must be designated as a network resource ("DNR") on Idaho
Power's system, which requires Idaho Power - Power Supply to submit a Transmission
Service Request ("TSR") on behalf of the Facilty to Idaho Power Delivery. Upon
resolution of any and all upgrades required to acquire transmission capacity for this
Facilty, execution of the FESA and execution of the GIA this Facilty may then be
designated as a network resource.
12. Seller has selected May 30, 2012 for the Scheduled First Energy Date and
June 30,2012, as the Scheduled Operation Date. Salmon Creek has been advised that
it is Salmon Creek's responsibility to work with Idaho Power's Delivery business unit to
ensure that sufficient time and resources wil be available for Delivery to construct the
interconnection facilties, and transmission upgrades if required, in time to allow the
Facility to achieve the June 30, 2012, Scheduled Operation date. Seller has been
further advised that delays in the interconnection or transmission process do not
constitute excusable delays in achieving the Scheduled Operation date and if Seller fails
to achieve the Scheduled Operation date at the times specified in the FESA, delay
damages wil be assessed. The developer of the Facilty has advised Idaho Power that
it is aware of these requirements and the accompanying risk inherent in demanding to
APPLICATION - 6
proceed with obligating itself to a Scheduled First Energy Date and Scheduled
Operation Date in the FESA without knowing what upgrades wil be required, and what
time frame the interconnection and potential system network upgrades can be
constructed within. Salmon Creek has advised Idaho Power that is has been advised of
and is willng to take the responsibility and risk associated with electing to proceed with
this contract without knowledge of the requirements of interconnection and possible
transmission upgrades.
13. Salmon Creek has also been made aware of and accepted the provisions
of the FESA and the Company's approved Tariff Schedule 72 regarding non-
compensated curtailment or disconnection of its Facilty should certain operating
conditions develop on the Company's system. According to the standard provisions in
Article XII of the FESA, curtailment without compensation may occur if there is an event
of Force Majeure, a Forced Outage, or a temporary disconnection of the Facilty in
accordance with Tariff Schedule 72. If the generation from the Facilty wil have an
adverse effect upon Idaho Powets service to its customers, Idaho Power may
temporarily disconnect the Facility from Idaho Powets transmission/distribution system
as specified within Schedule 72, or take such other reasonable steps as Idaho Power
deems appropriate. The parties' intent and understanding is that non-compensated
curtailment would be exercised when the generation being provided by the Facilty in
certain operating conditions exceeds or approaches the minimum load levels of the
Company's system such that it may have a detrimental effect upon the Company's
abilty to manage its thermal, hydro, and other resources in order to meet its obligation
to reliably serve loads on its system.
APPLICATION - 7
14. Section 21 of the FESA provides that the FESA 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 Salmon Creek for purchases of energy will be
allowed as prudently incurred expenses for ratemaking purposes.
II. MODIFIED PROCEDURE
15. 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 prepare and present its testimony in such hearing.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
16. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
Donovan E. Walker, Senior Counsel
Lisa Nordstrom, Lead Counsel
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
dwalker(gidahopower.com
Inordstrom(gidahopower.com
Randy C. Allphin
Energy Contract Administrator
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
rallphin(gidahopower.com
V. REQUEST FOR RELIEF
17. Idaho Power Company respectfully requests that the Commission issue
an Order: (1) authorizing that this matter may be processed by Modified Procedure; (2)
accepting or rejecting the Firm Energy Sales Agreement between Idaho Power
Company and Salmon Creek Wind Park, LLC, without change or condition; and, if
accepted, (3) declaring that all payments for purchases of energy under the Firm
APPLICATION - 8
Energy Sales Agreement between Idaho Power Company and Salmon Creek Wind
Park, LLC, be allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this 10th day of December 2010.
&WSEt;~
Attorney for Idaho Power Company
APPLICATION - 9
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 10th day of December 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:
Salmon Creek Wind Park, LLC
James Carkulis
802 West Bannock, Suite 1200
Boise, Idaho 83702
Hand Delivered
.- U.S. Mail
_ Overnight Mail
FAX
.- Email jcarkulis(gexergydevelopment.com
cft¿~
APPLICATION - 10
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-10-50
IDAHO POWER COMPANY
ATTACHMENT NO.1
FIR ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AN
SALMON CREEK WIN PAR, LLC
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
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29
TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment
Environmental Attributes
Facilty and Interconnection
Metering and Telemetry
Records
Operations
Indemnification and Insurce
Force Majeure
Liability; 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
AppendixE
12/72010
FIR ENERGY SALES AGREEMENT
(10 aMW or Less)
Project Name: Salmon Creek Wind Park
Project Number: 31721400
THIS AGREEMENT, entered into on this /~'J day of December, 2010 between
SALMON CREEK WIN PAR, LLC (Seller), and IDAHO POWER COMPANY, an Idaho corporation
(Idaho Power), hereinafter sometimes referred to collectively as "Parties" or individually as "Party."
WITNSSETH:
WHEREAS, Seller wil design, construct, own, maintain and operate an electric generation
facility; and
WHEREAS, Seller wishes to sell, and Idaho Power is wiling to purchase, firm electric energy
producèd by the Seller's Facilty.
THEREFORE, In consideration of the mutual covenants and agreements hereinafter set forth, the
Paries agree as follows:
ARTICLE I: DEFINTIONS
As used in this Agreement and the appendices attached hereto, the following terms
shall have the following meanings:
1.1 "Availability Shortfall 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 15.00 MilslkWh the result shall be 15.00 MilslkWh.
1.2 "Business Days" - means any calendar day that is not a Saturday, a Sunday, or a NERC
recognized holiday.
1.3 "Calculated Net Energy Amount" - A monthly estimate, prepared and documented after the fact
by Seller, reviewed and accepted by the Buyer that is the calculated monthly maximum energy
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deliveries (measured in kWh) for each individual wind turbine, totaled for the Facility to
deterine the total energy that the Facility could have delivered to Idaho Power durig that
month based upon: (1) each wind turbine's Nameplate Capacity, (2) Suffcient Prie Mover
available for use by each wind tubine during the month, (3) incidents of Force Majeure, (4)
scheduled maintenance, or (5) incidents of Forced Outages less Losses and Station Use. If the
duration of an event characterized as item 3, 4 or 5 above (measured on each individual
occurence and individual wind turbine) lasts for less than 15 minutes, then the event wil not be
considered in this calculation. The Seller shall collect and maintain actual data to support this
calculation and shall keep ths data for a minimum of 3 years.
1.4 "Commission" - The Idaho Public Utilities Commission.
1.5 "Contract Year" - The period commencing each calendar year on the same calenda date as the
Operation Date and ending 364 days thereafter.
1.6 "Delay Liquidated Damages" - Damages payable to Idaho Power as calculated in paragraph 5.3,
5.4, 5.5 and 5.6.
1.7 "Delay Period" - All days past the Scheduled Operation Date until the Seller's Facilty achieves
the Operation Date.
1.8 "Delay Price" - The curent month's Mid-Columbia Market Energy Cost minus the current
month's All Hours Energy Price specified in paragraph 7.3 of this Agreement. If this calculation
results in a value less than 0, the result of this calculation wil be O.
1.9 "Designated Dispatch Facility" - Idaho Power's Systems Operations Group, or any subsequent
group designated by Idaho Power.
1.10 "Effective Date" - The date stated in the opening paragraph of this Fir Energy Sales
Agreement representing the date upon which this Fir Energy Sales Agreement was fully
executed by both Paries.
1.11 "Facility" - That electric generation facility described in Appendix B of this Agreement.
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1. 12 "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 deliverng energy to
the Idaho Power electrical system at the Point of Delivery.
1.13 "Forced Outage" - a parial or total reduction of a) the Facility's capacity to produce and/or
deliver Net Energy to the Point of Delivery, or b) Idaho Power's abilty to accept Net Energy at
the Point of Delivery for non-economic reasons, as a result ofIdaho Power or Facility: 1)
equipment failure which was not the result of negligence or lack of preventative maintenance, or
2) responding to a transmission provider curtilment order, or 3) unplaned preventative
maintenance to repair equipment that left unepaired, would result in failure of equipment prior
to the planed maintenance period, or 4) planed maintenance or construction of the Facility or
electrical lines required to serve this Facility. The Paries shall make commercially reasonable
efforts to perorm this unplaned preventative maintenance during periods of low wind
availabilty.
1.14 "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.
1.15 "Inadvertent Energy" - Electric energy Seller does not intend to generate. Inadvertent energy is
more particularly described in paragraph 7.5 of this Agreement.
1.16 "Interconnection Facilities" - All equipment specified in Idaho Power's Schedule 72.
1.17 "Initial Capacity Determination" - The process by which Idaho Power confirms that under
normal or average design conditions the Facility wil generate at no more than 10 average MW
per month and is therefore eligible to be paid the published rates in accordance with Commission
Order No. 29632.
1.18 "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, Thansgiving and Chrstmas.
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1.19 "Losses" - The loss of electrical energy expressed in kilowatt hours (kWh) occurrng as a result
of the transformation and transmission of energy between the Metering Point and the point the
Facility's energy is delivered to the Idaho Power electrical system. The loss calculation formula
wil be as specified in Appendix B of this Agreement.
1.20 "Market Energy Referehce Price" - Eighty-five percent (85%) of the Mid-Columbia Market
Energy Cost.
1.21 "Material Breach" - A Default (paragraph 19.2.1) subject to paragraph 19.2.2.
1.22 "Maximum Capacity Amount" - The maximum capacity (MW) of the Facility wil be as
specified in Appendix B of this Agreement.
1.23 "Mechanical Availability" - The percentage amount calculated by Seller within 5 days after the
end of each month ofthe Facilty's monthly actual Net Energy divided by the Facilty's
Calculated Net Energy Amount for the applicable month. Any damages due as a result of the
Seller fallng short of the Mechancal Availability Guarantee for each month shall be determined
in accordance with paragraph 6.4.4.
1.24 "Mechancal Availability Guarantee" shall be as defined in paragraph 6.4.
1.25 "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 from the Seller's Facility at the Metering Point.
1.26 "Metering Point" - The physical point at which the Metering Equipment is located that enables
accurate measurement of the Test Energy and Net Energy deliveries to Idaho Power at the Point
of Delivery for this Facility that provides all necessary data to administer this Agreement.
1.27 "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.
Ifthe 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 electrical industry.
1.28 "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 standardized conditions, expressed in amperes, kilovolt-amperes, kilowatts, volts
or other appropriate units. Usually indicated on a nameplate attached to the individual machine
or device.
1.29 "Net Energy" - All of the electric energy produced by the Facility, less Station Use, less Losses,
expressed in kilowatt hours (kWh) delivered to Idaho Power at the Point of Delivery. Subject to
the terms of this Agreement, Seller commits 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.
1.30 "Operation Date" - The day commencing at 00:01 hours, Mountain Time, following the day that
all requirements of paragraph 5.2 have been completed.
1.31 "Point of Delivery" - The location specified in Appendix B, where Idaho Power's and the
Seller's electrcal facilities are interconnected and the energy from this Facilty is delivered to the
Idaho Power electrical system.
1.32 "Prudent Electrical Practices" - Those practices, methods and equipment that are commonly and
ordinarily used in electrical engineering and operations to operate electric equipment lawfully,
safely, dependably, effciently and economically.
1.33 "Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates
achieving the Operation Date. It is expected that the Scheduled Operation Date provided by the
Seller shall be a reasonable estimate of the date that the Seller anticipates that the Seller's Facility
shall achieve the Operation Date.
1.34 "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 Facilty into the Idaho Power electrical system as specified within
Schedule 72 and this Agreement.
1.35 "Season" - The three periods identified in paragraph 6.2.1 of this Agreement.
1.36 "Special Facilities" - Additions or alterations of transmission and/or distribution lines and
transformers as described in Schedule 72.
1.37 "Station Use" - Electric energy that is used to operate equipment that is auxilar or otherwise
related to the production of electricity by the Facility.
1.38 "Suffcient Prime Mover" means wind speed that is (1) equal to or greater than the generation
unit's manufactuer-specified minimum levels required for the generation unit to produce energy,
and (2) equal to or less than the generation unit's manufactuer-specified maximum levels at
which the generation unit can safely produce energy.
1.39 "Sumlus Energy" - 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.
1.40 "Total Cost .of the Facility" - The total cost of structures, equipment and appurenances.
1.41 "Wind Energy Production Forecast" - A forecast of energy deliveries from this Facility provided
by an Idaho Power administered wind forecasting modeL. The Facility shall be responsible for an
allocated portion of the total costs of the forecasting model as specified in Appendix E.
ARTICLE II: NO RELIANCE ON IDAHO POWER
2.1 Seller Independent Investigation - Seller warrants and represents to Idaho Power that in entering
into this Agreement and the undertaking by Seller of the obligations set forth herein, Seller has
investigated and determined that it is capable of performing hereunder and has not relied upon
the advice, experience or expt;rtise 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 undertaking the
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transactions contemplated by this Agreement have been solely those of Seller.
ARTICLE II: WARNTIES
3.1 No Warranty by Idaho Power - Any review, acceptance or failure to review Seller's design,
specifications, equipment or facilities shall not be an endorsement or a confiration by Idaho
Power and Idaho Power makes no waranties, expressed or implied, regarding any aspect of
Seller's design, specifications, equipment or facilties, includig, but not limited to, safety,
durability, reliabilty, strength, capacity, adequacy or economic feasibilty.
3.2 Qualifyng Facility Status - Seller warants that the Facilty is a "Qualifyg Facility," as that term
is used and defined in 18 CFR 292.201 et seq. After initial qualification, Seller wil take such
steps as may be required to maintain the Facility's Qualifyng Facilty status durng the term of
this Agreement and Seller's failure to maintain Qualifying Facility status wil be a Material
Breach of this Agreement. Idaho Power reserves the right to review the Facilty's Qualifyg
Facility status and associated support and compliance documents at anytime durng the term of
this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
4.1 Prior to the First Energy Date and as a condition ofIdaho Power's acceptance of deliveries of
energy from the Seller under this Agreement, Seller shall:
4.1.1 Submit proof to Idaho Power that all licenses, 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 Subpart B, 18 CFR 292.201 et
seq. as a certified Qualifying Facility.
4.1.2 Opinion of Counsel - Submit to Idaho Power an Opinion Letter signed by an attorney
admtted to practice and in good standing in the State of Idaho providing an opinion that
Seller's licenses, 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
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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 renderig the opinion
understands that Idaho Power is relying on said opinion. Idao Power's acceptance ofthe
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 Determination - Submit to Idaho Power such data as Idaho Power may
reasonably require to perform the Initial Capacity Determination. Such data wil include
but not be limited to, Nameplate Capacity, equipment specifications, prie mover data,
resource characteristics, normal and/or average operating design conditions and Station
Use data. Upon receipt of this information, Idaho Power wil review the provided data
and if necessary, request additional data to complete the Initial Capacity Determination
withi a reasonable time.
4.1.3.1 If the Maximum Capacity specified in Appendix B of this Agreement and the
cumulative manufacture Nameplate Capacity rating of the individual generation
units at this Facilty 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
Idao 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 Idao 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, Idaho Power shall
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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 &
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 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 XII.
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.
4.1.8.1 Seller has provided all information required to enable Idaho Power to fie an
intial transmission capacity request.
a) Results of the initial transmission capacity request are known and acceptable
to the Seller.
b) 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 designated firm network resource.
c.) If the Facilty is located outside of the Idaho Power service 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.
4.1.9 Written Acceptance - Request and obtain written confination from Idaho Power that all
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conditions to acceptance of energy have been fulfilled. Such wrtten confiation shallbe
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 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 twenty (20)
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 this Agreement in a form acceptable to Idaho Power has
been received.
c) Seller has demonstrated to Idaho Power's satisfaction that the Facilty is complete and
able to provide energy in a consistent, reliable and safe maner.
d) Seller has requested an Operation Date from Idao Power in a written format.
e) Seller has received written confiration from Idaho Power of the Operation Date.
This confirmation wil not be unreasonably withheld by Idaho Power.
5.3 Operation Date Delay - Seller shall cause the Facility to achieve the Operation Date on or before
the Scheduled Operation Date. Delays in the interconnection and transmission network upgrde
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.
5.3.1 If the Operation Date occurs after the Scheduled Operation Date but on or prior to ninety
(90) days following the Scheduled Operation Date, Seller shall pay Idaho Power Delay
Liquidated Damages calculated at the end of each calendar month after the Scheduled
Operation Date as follows:
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Delay Liquidated Damages are equal to ((Current month's Initial Year Net
Energy Amount as specified in paragraph 6.2.1 divided by the number of days in
the curent month) multiplied by the number of days in the Delay Period in the
current month) multiplied by the curent month's Delay I?rice.
5.3.2 If the Operation Date does not occur within ninety (90) days following the Scheduled
Operation Date, the Seller shall pay Idaho Power Delay Liquidated Damages, in addition
to those provided in paragraph 5.3.1, calculated as follows:
Forty five dollars ($45) multiplied by the Maximum Capacity with the Maximum
Capacity being measured in kW.
5.4 If Seller fails to achieve the Operation Date within ninety (90) days following the Scheduled
Operation Date, such failure wil be a Material Breach and Idaho Power may termnate this
Agreement at any time until the Seller cures the Material Breach. Additional Delay 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 Liquidated Damages within seven (7) days of
when Idaho Power calculates and presents any Delay Liquidated Damages bilings to the Seller.
Seller's failure to pay these damages within the specified time wil be a Material Breach of this
Agreement and Idaho Power shall draw fuds from the Delay Securty provided by the Seller in
an amount equal to the calculated Delay Liquidated Damages.
5.6 The Paries agree that the damages Idaho Power would incur due to delay in the Facility
achieving the Operation Date on or before the Scheduled Operation Date would be difficult or
impossible to predict with certainty, and that the Delay Liquidated Damages are an appropriate
approximation of such damages.
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5.7 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 a 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 provided all information required to enable Idaho Power to fie an
initial transmission capacity request.
5.8 Within thiy (30) days of the date of a final non-appealable Commission Order as specified in
Aricle XXI approving this Agreement; Seller shall post liquid securty ("Delay Securty") in a
form as described in Appendix D equal to or exceeding the amount calculated in paragraph 5.8.1.
Failure to post this Delay Security in the time specified above wil be a Material Breach of this
Agreement and Idaho Power may terminate this Agreement.
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 Hours Energy Price specified in paragraph 7.3 for
each of those three months.
5.8.1.1 In the event (a) Seller provides Idao Power with certification that (1) a
generation interconnection agreement specifying a schedule that will enable this
Facilty to achieve the Operation Date no later than the Scheduled Operation
Date has been completed and the Seller has paid all required interconnection
costs, or (2) a generation interconnection agreement is substantially complete and
all material costs of interconnection have been identified and agreed upon and
the Seller is in compliance with all terms and conditions of the generation
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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 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
five (5) business days from the date Idao Power requests reinstatement. Failure
to timely reinstate the Delay Security wil be a Material Breach of this
Agreement.
5.8.2 Idaho Power shall release any remaining securty posted hereunder after all
calculated Delay Liquidated Damages are paid in full to Idaho Power and the
earlier of: 1) thirty (30) days after the Operation Date has been achieved, or 2)
sixty (60) days after the Agreement has been terminated.
ARTICLE VI: PURCHASE AN 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 Idao
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. These amounts shall be consistent with the Mechanical Availabilty Guaantee.
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6.2.1 Initial Year Monthly Net Energy Amounts:
Month
Season 1
March
April
May
Season 2
July
August
November
December
Season 3
June
September
October
Januar
Februar
kWh
6,128,553
5,679,690
4,597,609
3,696,361
3,856,621
5,585,873
6,481,286
3,903,920
4,001,235
4,922,843
6,302,592
6,416,221
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
Monthly Net Energy Amounts as specified in paragraph 6.2 shall constitute an event of default.
6.4 Mechanical Availabilty Guarantee ~ Afer the Operational Date has been established, the Facilty
shall achieve a minimum monthly Mechanical Availabilty of 85% for the Facility for each month
durig the full term of this Agreement (the "Mechanical Availabilty Guarntee"). Failure to
achieve the Mechanical Availability Guarantee shall result in Idaho Power calculating daages as
specified in paragraph 6.4.4.
6.4.1 At the same time the Seller provides the Monthly Power Production and Availabilty
Report (Appendix A), the Seller shall provide and certify the calculation of the Facility's
curent month's Mechanical Ävailability. The Seller shall include a summar of all
information used to calculate the Calculated Net Energy Amount including but not
limited to: (a) Forced Outages, (b) Force Majeure events, (c) wind speeds and the impact
on generation output, and (c) scheduled maintenance and Station Use information.
6.4.2 The Seller shall maintain and retain for three year detailed documentation supporting the
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6.4.3 Idaho Power shall have the right to review and audit the documentation supporting the
calculation of the Facility's Mechancal Availability at reasonable times at the Seller's
offices.
6.4.4 If the current month's Mechanical Availabilty is less than the Mechanical Availabilty
Guarantee, damages shall be equal to:
((eighty-five (85) percent of the month's Calculated Net Energy Amount)
minus the month's actual Net Energy deliveries) multiplied by the
Availabilty Shortfall Price.
6.4.5 Any damages calculated in paragraph 6.4.4 wil be offset against the curent month's
energy payment. If an unpaid balance remains after the damages are offset against the
energy payment, the Seller shall pay in full the remaining balance within thirty (30) days
of the date of the invoice.
ARTICLE VII: PURCHASE PRICE AN METHOD OF PAYMENT
7.1 Heavy Load Purchase Price - For all Net Energy received durng Heavy Load Hours,
Idaho Power wil pay the non-Ievelized energy price in accordance with Commission Order
31025 adjusted in accordace with Commission Order 30415 for Heavy Load Hour Energy
deliveries, adjusted in accordance with Commission Order 30488 for the wind integration charge,
and with seasonalization factors applied:
Year
Season 1 - (73.50 %)
Mils/kWh
Season 2 - (120.00 %)
Mils/kWh
Season 3 - (100.00 %)
Mils/kWh
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
40.52
42.80
45.32
47.71
50.29
53.05
54.64
56.20
57.90
59.57
66.15
69.87
74.00
78.18
82.74
87.64
90.46
93.23
96.25
99.21
55.12
58.24
61.66
64.92
68.42
72.17
74.34
76.61
79.12
81.59
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2020 61.29 102.27 84.14
2021 63.33 105.90 87.16
2022 65.46 109.67 90.31
2023 67.67 113.59 93.57
2024 69.97 117.66 96.97
2025 72.35 121.90 100.50
2026 74.38 125.49 103.49
2027 76.62 129.20 106.58
2028 78.96 133.03 109.77
2029 81.38 136.97 113.06
2030 83.87 141.04 116.45
2031 87.22 146.51 121.01
2032 90.15 151.30 125.00
2033 93.19 156.26 129.13
7.2 Light Load Purchase Price - For all Net Energy received during Light Load Hours, Idahö Power
wil pay the non-Ievelized energy price in accordace with Commission Order 31025 adjusted in
accordance with Commission Order 30415 for Light Load Hour Energy deliveries, adjusted in
accordance with Commission Order 30488 for the wind integration charge, and with
seasonalization factors applied:
Season 1 - (73.50 %)Season 2 - (120.00 %)Season 3 - (100.00 %)
Year Mils/kWh Mils/kWh Mils/kWh
2010 35.59 58.11 48.42
2011 37.88 61.84 51.54
2012 40.40 65.95 54.96
2013 42.79 69.86 58.22
2014 45.37 74.06 61.72
2015 48.13 78.91 65.48
2016 49.72 81.73 67.64
2017 51.28 84.50 69.76
2018 52.97 87.51 72.07
2019 54.65 90.47 74.35
2020 56.37 93.53 76.86
2021 58.41 97.16 79.88
2022 60.54 100.93 83.03
2023 62.74 104.85 86.29
2024 65.04 108.92 89.69
2025 67.43 113.16 93.22
2026 69.45 116.76 96.21
2027 71.55 120.47 99.30
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2028 73.70 124.29 102.49
2029 76.03 128.24 105.78
2030 78.52 132.31 109.17
2031 81.87 137.77 113.73
2032 84.80 142.56 117.72
2033 87.84 147.52 121.85
7.3 All Hour Energy Price - The price to be used in the calculation of the Surplus Energy Price and
Delay Price shall be the non-Ievelized energy price in accordance with Commission Order 31025
adjusted in accordance with Commission Order 30488 for the wind integration charge,and with
seasonalization factors applied:
Season 1 - (73.50 %)Season 2 - (120.00 %)Season 3 - (100.00 %)
Year Mils/kWh Mils/kWh Mils/kWh
2010 38.33 62.57 52.14
2011 40.61 66.30 55.26
2012 43.13 70.42 58.68
2013 45.52 74.33 61.93
2014 48.10 78.85 65.44
2015 50.86 83.75 69.19
2016 52.45 86.58 71.36
2017 54.01 89.35 73.48
2018 55.71 92.36 75.88
2019 57.37 95.32 78.35
2020 59.10 98.38 80.90
2021 61.14 102.01 83.92
2022 63.27 105.78 87.07
2023 65.48 109.70 90.33
2024 67.78 113.77 93.73
2025 70.16 118.01 97.26
2026 72.18 121.60 100.25
2027 74.28 125.31 103.35
2028 76.58 129.14 106.53
2029 79.00 133.09 109.82
2030 81.49 137.16 113.21
2031 84.84 142.62 117.77
2032 87.77 147.41 121.76
2033 90.81 152.37 125.89
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 Hours Energy Price specified in paragraph
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7.3, whichever is lower.
7.5 Inadvertent Energy -
7.5.1 Inadvertent Energy is electric energy produced by the Facility, expressed in kWh,
which the Seller delivers to Idaho Power at the Point of Delivery that exceeds 10,000
kW multiplied by the hours in the specific month in which the energy was delivered.
(For example Januar contains 744 hours. 744 hours times 10,000 kW = 7,440,000
kWh. Energy delivered in January in excess of 7,440, 000 kWh in this example
would be Inadvertent Energy.)
7.5.2 Although Seller intends to design and operate the Facility to generate no more than
ten (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 the Wind Energy Production Forecasting
Monthly Cost Allocation (MCA) described in Appendix E and any other payments due Idao
Power, wil be disbursed to the Seller within 30 days of the date which Idaho Power receives and
accepts the documentation of the monthly Mechancal Available Guaratee and the Net Energy
actually delivered to Idaho Power as specified in Appendix A.
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 wil be construed in accordace with
Idaho Power Company v. Idaho Public Utilities Commission and Afon 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 Idao 925,
729 P.2d 400 (1986), Section 210 of the Public Utilty Regulatory Policies Act of 1978 and 18
CFR §292.303-308.
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ARTICLE VII: ENVIRONMENTAL ATTRIUTES
8.1 Seller retains ownership under this Agreement of green tags and renewable energy certificates
(RECs), or the equivalent environmental attributes, directly associated with the production of
energy from the Seller's Facility sold to Idaho Power.
ARTICLE IX: FACILITY AN 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.
9.2 Interconnection Facilities - Except as specifically provided for in this Agreement, the required
Interconnection Facilties wil be in accordance with Schedule 72, the Generation Interconnection
Process and Appendix B. The Seller is responsible for all costs associated with this equipment as
specified in Schedule 72 and the Generation Interconnection Process, includig but not limited to
initial costs incurred by Idaho Power for equipment costs, installation costs and ongoing monthly
Idao Power operations and maintenance expenses.
ARTICLE X: METERIG AN TELEMETRY
10.1 Metering - Idao Power shall, for the account of Seller, provide, install, and maintain Meterig
and Telemetry Equipment to be located at a mutually agreed upon location to record and measure
power flows to Idaho Power in accordance with ths 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 ofDe1ivery in a manner to provide Idao Power adequate energy measurement data to
admnister this Agreement and to integrate this Facility's energy production into the Idao Power
electrical system.
10.2 Telemetry - Idaho Power wil install, operate and maintain at Seller's expense metering,
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communications and telemetry equipment which wil be capable of providing Idaho Power with
continuous instantaeous 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 Maintenace of Records - Seller shall maintain at the Facilty 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 Idao Power.
11.2 Inspection - Either Pary, after reasonable notice to the other Pary, shall have the right, durng
normal business hours, to inspect and audit any or all generation, Net Energy, Station Use,
Inadvertent Energy and maximum generation (kW) records pertaining to the Seller's Facility.
ARTICLE XII: OPERATIONS
12.1 Communications - Idaho Power and the Seller shall maintain appropriate operating
communications through Idaho Power's Designated Dispatch Facilty in accordace with
Appendix A of this Agreement.
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 Facility and
delivered by the Seller to the Point of Delivery, if it is prevented from doing so by an
event of Force Majeure, Forced Outage or temporary disconnection of the Facility in
accordance with Schedule 72. If, for reasons other than an event of Force Majeure or a
Forced Outage, a temporar disconnection under Schedule 72 exceeds twenty (20) days,
beginning with the twenty-first day of such interrption, 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.
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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 Idaho Power's
equipment, personnel or service to its customers, Idaho Power may temporarily
disconnect the Facility from Idaho Power's trasmission/distribution system as specified
withi Schedule 72 or take such other reasonable steps as Idaho Power deems
appropriate.
12.2.3 Under no circumstances wil the Seller deliver Net Energy and/or Inadvertent Energy
from the Facility to the Point of Delivery in an amount that exceeds the Maximum
Capacity Amount at any moment in time. Seller's failure to limit deliveries to the
Maximum Capacity Amount wil be a Material Breach of this Agreement.
12.2.4 If Idaho Power is unable to accept the energy from this Facility and is not excused from
accepting the Facility's energy, Idao Power's damages shall be limited to only the value
of the estimated energy that Idao Power was unable to accept. Idao Power wil have
no responsibilty to pay for any other costs, lost revenue or consequential daages the
Facility may incur.
12.3 Scheduled Maintenance - On or before January 31st of each calendar year, Seller shall submit a
written proposed maintenance schedule of significant Facility maintenance for that calenda year
and Idaho Power and Seller shall mutually agree as to the acceptability 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.
12.4 Maintenance Coordination - The Seller and Idaho Power shall, to the extent practical, coordinate
their respective line and Facilty maintenance schedules such that they occur simultaneously.
12.5 Contact Prior to Curilment - Idaho Power wil make a reasonable attempt to contact the Seller
prior to exercising its rights to interrpt interconnection or curail deliveries from the Seller's
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Facility. 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 AND INSURNCE
13.1 Indemnification - Each Pary shall agree to hold harless and to indemnify the other Pary, its
offcers, 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 indemnifyng Pary's (a) construction, ownership, operation or
maintenance of, or by failure of, any of such Party's works or facilities used in connection with
this Agreement or (b) negligent or intentional acts, errors or omissions. The indemnifying Party
shall, on the other Party's request, defend any suit asserting a claim covered by this indemnity.
The indemnfying Pary shall pay all documented costs, including reasonable attorney fees that
may be incurred by the other Pary 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 injury and property daage
with limits equal to $1,000,000, each occurence, combined single limit. The deductible
for such insurance shall be consistent with curent Insurance 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 written notice to Idaho Power.
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13.3 Seller to Provide Cerificate of Insurance - As required in paragraph 4.1.6 herein and annually
thereafter, Seller shall fuish Idaho Power a certificate of insurance, together with the
endorsements required therein, evidencing the coverage as set fort above.
13.4 Seller to Notify Idaho Power of Loss of Coverage - If the insurance coverage required by
paragraph 13.2 shall lapse for any reason, Seller wil immediately notify Idaho Power in writing.
The notice wil advise Idaho Power of the specific reason for the lapse and the steps Seller is
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 MAJUR
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, strikes and other labor disturbances,
earhquakes, fires, lightnig, epidemics, sabotage, or changes in law or regulation occurg 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 Party 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 Party shall, as soon as is reasonably possible after the
occurrence 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 occurence causing the
suspension of performance and which could and should have been fully
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performed before such occurrence shall be excused as a result of such
occurrence.
ARTICLE XV: LIAILITY; DEDICATION
15.1 Limitation of Liabilty. Nothing in this Agreement shall be construed to create any duty to, any
standad 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.
15.2 Dedication. No undertaking by one Pary to the other under any provision of this 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 Idao 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 construed to create an association, trust, parnership or joint
venture or impose a trust or partnership duty, obligation or liabilty on or with regard to either
Pary. Each Pary shall be individually and severally liable for its own obligations under this
Agreement.
ARTICLE XVII: WAIER
17.1 Any waiver at any time by either Party of its rights with respect to a default under this Agreement
or with respect to any other matters arsing in connection with this Agreement shall not be
deemed a waiver with respect to any subsequent default or other matter.
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ARTICLE XVII: CHOICE OF LAWS AND VENU
18.1 This Agreement shall be construed and interpreted in accordance with the laws of the State of
Idaho without reference to its choice of law provisions.
18.2 Venue for any litigation arsing out of or related to this Agreement wil lie in the District Cour of
the Fourh Judicial District ofIdaho in and for the County of Ada.
ARTICLE XIX: DISPUTES AND DEFAULT
19.1 Disputes - All disputes related to or arsing 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, specifying the manner in which such
default occured. If the defaulting Pary shall fail to cure such default within the sixty
(60) days after service of such notice, or if the defaulting Pary reasonably
demonstrates to the other Party that the default can be cured withi a commercially
reasonable time but not within such sixty (60) day period and then fails to dilgently
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. Material Breaches must
be cured as expeditiously as possible following occurence of the breach.
19.3 Security for Performance - Prior to the Operation Date and thereafter for the full term of this
Agreement, Seller wil provide Idaho Power with the following:
19.3.1 Insurance - Evidence of compliance with the provisions of paragraph 13.2. If Seller
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fails to comply, such failure wil be a Material Breach and may only be cured by
Seller supplying evidence that the required insurance coverage has been replaced or
reinstated;
19.3.2 Engineer's Certifications - Every three (3) years after the Operation Date, Seller wil
supply Idaho Power with a Certification of Ongoing Operations and Maintenance
(O&M) from a Registered Professional Engineer licensed in the State of Idaho, which
Certification of Ongoing 0 & M shall be in the form specified in Appendix C. Seller's
failure to supply the required certificate wil be an event of default. Such a default
may only be cured by Seller providing the required certificate; and
19.3.3 Licenses and Permits - During the full tenn of this Agreement, Seller shall maintain
compliance with all permits and licenses described in paragraph 4.1.1 of this
Agreement. In addition, Seller wil supply Idaho Power with copies of any new or
additional permts or licenses. At least every fifth Contract Year, Seller wil update the
documentation described in Paragraph 4.1.1. If at any time Seller fails to maintain
compliance with the permits and licenses described in 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 peritting agency.
ARTICLE XX: GOVERNMENTAL AUTHORIATION
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 terms 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 ratemaking purposes.
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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 Paries being
first obtained. Such consent shall not be unreasonably withheld. Notwithstanding 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 of Idaho 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. Idaho Power shall have the right to be notified by the financing entity that it is
exercising such rights or remedies.
ARTICLE XXII: MODIFICATION
23.1 No modification to this Agreement shall be valid unless it is in writing and signed by both Parties
and subsequently approved by the 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 Facilities.
ARTICLE XXV: NOTICES
25.1 All written notices under this Agreement shall be directed as follows and shall be considered
delivered when faxed, e-mailed and confirmed with deposit in the U.S. Mail, first-class, postage
prepaid, as follows:
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To Seller:
Original document to:
James Carkulis
802 W Bannock, ste 1200
Boise, ID 83702
E-mail: jcarkulis§exergydevelopment.com
To Idaho Power:
Original document to:
Senior Vice President, Power Supply
Idaò Power Company
P.O. Box 70
Boise, Idaho 83707
Email: Lgrow§idahopower.com
Copy of document to:
Cogeneration and Small Power Production
Idao Power Company
P.O. Box 70
Boise, Idaho 83707
E-mail: rallphi(ßidaopower.com
Either Pary may change the contact person and/or adQless information listed above, by providing written
notice from an authorized person representing the Part.
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
Appendix E
Monthly Power Production and Availability Report
Facility and Point of Delivery
Engineer's Certifications
Forms of Liquid Security
Wind Energy Production Forecasting
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 construed
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in all other respects as if the invalid or unenforceable term or provision were omitted.
ARTICLE XXVil: 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.
ARTICLE XXIX: ENTIR AGREEMENT
29.1 This Agreement constitutes the entire Agreement of the Parties concerng the subject matter
hereof and supersedes all prior or contemporaneous oral or written agreements between the
Parties concernng the subject matter hereof.
IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be executed
in their respective names on the dates set forth below:
Idaho Power Company Salmon Creek Wind Park, LLC
By ~M)(J.em,J
Lisa A. Grow
Sr. Vice President, Power Supply
By LzG
~ James Carkulis, Manager
Dated IZ.' to.IO Dated
09- /?c,£_ßtl.. - 2aia
"Sellet'"Idaho Power"
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APPENDIX A
A -1 MONTHLY POWER PRODUCTION AN AVAIABILITY REPORT
At the end of each month the following required documentation wil be submitted to:
Idaho Power Company
Attn: Cogeneration and Small Power Production
P.O. Box 70
Boise, Idaho 83707
The meter readings required on this report wil be the readings on the Idaho Power Meter Equipment
measuring the Facilty's total energy production delivered to Idaho Power and Station Usage 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 actual payment, but instead wil be a check of the
automated meter reading information that wil be gathered as described in item A-2 below:
This report shall also include the Seller's calculation of the Mechanical Availability.
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Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND AVAIABILITY REPORT
Month Year
Project Name Project Number:
Address Phone Number:
City State Zip
Net Facilty
Output
Station
Usage
Station
Usage
Metered
Maximum Generation
Meter Number:
End of Month kWh Meter Reading:
Beginning of Month kWh Meter:
Difference:
Times Meter Constant:
kW
Net Generation
kWh for the Month:
Metered Demand:
Mechanical Availabilty Guarantee
Seller Calculated Mechanical Availabilty
As specified in this Agreement, the Seller shall include with this monthly report a summary statement of the
Mechanical Availabilty of this Facilty for the calendar month. This summary shall include details as to how
the Seller calculated this value and summary of the Facilty data used in the calculation. Idaho Power and
the Seller shall work together to mutually develop a summary report that provides the required data. Idaho
Power reserves the right to review the detailed data used in this calculation as allowed within the Agreement.
Signature Date
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A-2 AUTOMATED METER READING COLLECTION PROCESS
Monthly, Idaho Power will use the provided Metering and Telemetry 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 (Midnight) of
the last day of the month.
The meter information collected wil include but not be limited to energy production, Station Use, the
maximum generation (kW) and any other required energy measurements to adequately administer this
Agreement.
A-3 ROUTIN REPORTING
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 curent day
. Estimated Generation for the next day
Planned and Unplaned Project outages
Call 1-800-345-1319 and leave the following information:
. Project Identification - Project Name and Project Number
. Approximate time outage occurred
Estimated day and time of project coming back online
Seller's Contact Information
24-Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
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Project On-site Contact information
Telephone Number:
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APPENDIXB
FACILITY AN POIN OF DELIVERY
Project Name: Salmon Creek Wind Park
Project Number: 31721400
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 Facilty.)
The facility wil consist of thireen 1.6 MW wind turbine generators, with a combined nameplate
limited to 20 MW. V AR capabilty is .95 to .95 leading and lagging.
B-2 LOCATION OF FACILITY
Near: Rogerson, il
T14S R15E
SEC 24: El/2, El/2Wl/2 SEC 26: El/2E1/2, SEl/4SWl/4, SWl/4SEl/4
County: Twin Falls, ID.
Description of Interconnection Location: N42° 10.66260', W114° 36.1 7400'
Nearest Idao Power Substation:
B-3 SCHEDULED FIRST ENERGY AN OPERATION DATE
Seller has selected May 30,2012 as the Scheduled First Energy Date.
Seller has selected June 30, 2012 as the Scheduled Operation Date.
In making these selections, Seller recognizes that adequate testing of the Facility and completion
of all requirements in paragraph 5.2 of this Agreement must be completed prior to the project
being granted an Operation Date.
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B-4 MAXIMUM CAPACITY AMOUN:
This value wil be 20 MW which is consistent with the value provided by the Seller to Idaho
Power in accordance with Schedule 72. This value is the maximum energy (MW) that potentially
could be delivered by the Seller's Facility to the Idaho Power electrical system at any moment in
time.
B-5 POIN OF DELIVERY
"Point of Delivery" means, unless otherise agreed by both Paries, the point of where the Sellers
Facility's energy is delivered to the Idaho Power electrical system. Schedule 72 wil determine
the specific Point of Delivery for this Facility. The Point of Delivery identified by Schedule 72
wil become an integral part of this Agreement.
B-6 LOSSES
If the Idaho Power Metering equipment is capable of measuring the exact energy deliveries by the
Seller to the Idaho Power electrical system at the Point of Delivery, no Losses wil be calculated
for this Facility. If the Idaho Power 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 losses (kWh) between the Seller's Facility
and the Idao Power Point of Delivery. This loss calculation wil be initially set at 2% of the
kWh energy production recorded on the Facility generation metering equipment. At such time as
Seller provides Idaho Power with the electrical equipment specifications (transformer loss
specifications, conductor sizes, etc.) of all of the electrical equipment between the Facility and the
Idaho Power electrcal system, Idaho 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 durg the term of this Agreement, Idaho Power determines that the
loss calculation does not correctly reflect the actual kWh losses attributed to the electrical
equipment between the Facility and the Idaho Power electrical system, Idaho Power may adjust
the calculation and retroactively adjust the previous months kWh loss calculations.
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B-7 METERIG AN TELEMETRY
Schedule 72 wil determine the specific meterig and telemetry requirements for this Facilty. 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 adminster 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 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 Facilities energy production.
Idao Power provided equipment wil be owned and maintained by Idaho Power, with total cost
of purchase, installation, operation, and maintenance, including admnistrative cost to be
reimbursed to 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 canot 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 Facility, Idaho Power's abilty to fie the NR in a timely manner is
contingent upon timely receipt of the required inormation from the Seller. Prior to Idao Power
beginnng the process to enable Idaho Power to submit a request for NR status for this Facilty,
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 tiely manner can
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significantly impact Idaho Power's abilty and cost to attain the NRD designation for the
Seller's Facilty and the Seller shall bear the costs of any of these delays that are a result of
any action or inaction by the Seller.
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APPENDIXC
ENGINER'S CERTIFICATION
OF
OPERATIONS & MAINENANCE POLICY
The undersigned , on behalf of himself/erself and
, hereinafter collectively referred to as "Engineer," hereby states and certifies to the Seller
as follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between
Idaho Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facilty No.and is hereinafter referred to as
the "Project."
4.That the Project, which is commonly known as the Project, is located in
Section _ Township Range , Boise Meridian,County, Idaho.
5. That Engineer recognizes that the Agreement provides for the Project to fush electrical energy
to Idaho Power for a 20 year period.
6. That Engineer has substantial experience in the design, construction and operation of electric
power plants ofthe 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 supervised the review of the Policy for Operation and
Maintenance ("O&M") for this Project and it is his professional opinion that, provided said Project has
been designed and built to appropriate standards, adherence to said O&M Policy wil result in the
Project's producing at or near the design electrical output, effciency and plant factor for a 20 year period.
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9. That Engineer recognzes that Idaho Power, in accordace with paragraph 5.2 of the Agreement,
is relyig 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
hislher knowledge and therefore sets hislher hand and seal below.
By
(P .E. Stamp)
Date
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APPENDIXC
ENGINER'S CERTIFICATION
OF
ONGOING OPERATIONS AN MAIENANCE
The undersigned , on behalf of himselflerself
hereinafter collectively referred to as "Engineer," hereby states andand
certifies to the Seller as follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between
Idaho Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No. and hereinafter referred to as the
"Project".
4. That the Project, which is commonly known as the Project, is located in
Section _ Township Range , Boise Meridian, County, Idaho.
5. That Engineer recognizes that the Agreement provides for the Project to fush electrical energy
to Idaho Power for a 20 year period.
6. That Engineer has substantial experience in the design, construction and operation of electrc
power plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
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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 will 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 accordace with paragrph 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.
By
(P .E. Stamp)
Date
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APPENDIXC
ENGINER'S CERTIFICATION
OF
DESIGN & CONSTRUCTION ADEQUACY
The undersigned , on behalf of himself/herself and
hereinafter collectively referred to as "Engineer", hereby states and
certifies to Idao Power as follows:
1.That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2.That Engineer has reviewed the Fir Energy Sales Agreement, hereinafter "Agreement",
between Idaho Power as Buyer, and as Seller, dated
3.That the cogeneration or small power production project, which is the subject of the
Agreement and this Statement, is identified as IPCo Facility No and is hereinafter
referred to as the "Project".
4.That the Project, which is commonly known as the Project, is located in
Section _ Township Range , Boise Meridian,County, Idaho.
5.That Engineer recognizes that the Agreement provides for the Project to fuisn electrcal
energy to Idaho Power for a 20 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 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, electrical work, generating equipment, prie mover conveyance system, Seller
furnished Interconnection Facilities and other Project facilities 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 pedorming in accordance with the
terms of the Agreement and with Prudent Electrical Practices for a 20 year period.
11.That Engineer recognizes that Idao Power, in accordance with paragraph 5.2 of the
Agreement, in interconnecting the Project with its system, is relying on Engineer's representations and
opinions contained in this Statement.
12. That Engineer certifies that the above statements are complete, true and accurate to the
best of his /her knowledge and therefore sets his/her hand and seal below.
By
(P .E. Stamp)
Date
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APPENDIXD
FORMS OF LIQUID SECURTY
The Seller shall provide Idaho Power with commercially reasonable securty instruments such as
Cash Escrow Securty, Guarantee or Letter of Credit as those terms are defined below or other
forms of liquid financial security that would provide readily available cash to Idaho Power to
satisfy the Delay Security requirement and any other security requirement within- this Agreement.
For the purose of this Appendix D, the term "Credit Requirements" shall mean acceptable
financial creditworthiness of the entity providing the securty instrument 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 Services, Inc. shall be deemed to
have acceptable financial creditwortiness.
1. Cash Escrow Security - Seller shall deposit funds in an escrow account established by the
Seller in a bankg institution acceptable to both Parties equal to the Delay Securty or any
other required securty amount(s). The Seller shall be responsible for all costs, and receive
any interest eared associated with establishing and maintainig the escrow account(s).
Guarantee or Letter of Credit Security - Seller shall post and maintain in an amount equal to the Delay
Security or other required security amount(s): (a) a guaranty from a pary that satisfies the Credit
Requirements, in a form acceptable to Idaho Power at its discretion, or b) an irrevocable_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. The Seller shall be responsible for all costs associated
with establishing and maintaining the Guarantee(s) or Letter(s) of Credit.
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APPENDIXE
WIN ENERGY PRODUCTION FORECASTING
As specified in Commission Order 30488, Idaho Power shall make use of a Wind Energy Production
Forecasting model to forecast the energy production from this Facility and other Qualifyng Facility wind
generation resources. Seller and Idaho Power wil share the cost of Wind Energy Production Forecasting.
The Facility's share of Wind Energy Production Forecasting is determined as specified below. Sellers
share wil not be greater than 0.1 % of the total energy payments made to Seller by Idaho Power during the
previous Contract Year.
a. For every month of this Agreement beginng with the first full month after the
First Energy Date as specified in Appendix ofthis Agreement, the Wind Energy
Production Forecasting Monthly Cost Allocation (MCA) wil be due and payable
by the Seller. Any Wind Energy Production Forecasting Monthly Cost
Allocations (MCA) that are not reimbursed to Idaho Power shall be deducted
from energy payments to the Seller.
. As the value of the 0.1 % cap of the Facilties total energy payments wil not
be known until the first Contract Year is complete, at the end of the first
Contract Year any prior allocations that exceeded the 0.1 % cap shall be
adjusted to reflect the 0.1 % cap and if the Facility has paid the monthly
allocations a refund will be included in equal monthly amounts over the
ensuing Contract Year. If the Facility has not paid the monthly allocations
the amount due Idaho Power wil be adjusted accordingly and the unpaid
balance wil be deducted from the ensuing Contract Year's energy payments.
b. During the first Contract Year, as the value ofthe 0.1 % cap of the Facilities total
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energy payments wil not be known until the first Contract Year is complete,
Idaho Power wil deduct the Facility's calculated share of the Wind Energy
Production Forecasting costs specified in item d each month during the first
Contract Year and subsequently refud any overpayment (payments that exceed
the cap) in equal monthly amounts over the ensuing Contract Year.
c. The cost allocation formula described below wil be reviewed and revised if
necessar on the last day of any month in which the cumulative MW nameplate
of wind projects having Commission approved agreements to deliver energy to
Idaho Power has been revised by an action of the Commission.
d. The monthly cost allocation wil be based upon the following formula:
Where: Total MW (TMW) is equal to the total nameplate rating of all QF wind
projects that are under contract to provide energy to Idaho Power
Company.
Facilty MW (FMW) is equal to the nameplate rating of this Facilty as
specified in Appendix B.
Annual Wind Energy Production Forecasting Cost (AFCost) is equal
to the total anual cost Idaho Power incurs to provide Wind Energy
Production Forecasting. Idaho Power wil estimate the AFCost for the
current year based upon the previous year's cost and expected costs for
the current year. At year-end, Idaho Power wil compare the actual costs
to the estimated costs and any differences between the estimated AFCost
and the actual AFCost wil be included in the next year's AFCost.
Annual Cost Allocation (ACA) = AFCost X (FMW / TMW)
And
Monthly Cost Allocation (MCA) = ACA / 12
e. The Wind Energy Production Forecasting Monthly Cost Allocation (MCA) is
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due and payable to Idaho Power. The MCA wil first be netted against any
monthly energy payments owed to the Seller. Ifthe netting ofthe MCA against
the monthly energy payments results in a balance being due Idaho Power, the
Facility shall pay this amount within 15 days ofthe date of the payment invoice.
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