HomeMy WebLinkAbout20101217Application.pdfDONOVAN E. WALKER
Senior Counsel
dwalker(âidahopower.com
.f"'''t:'l
I DA~POR~
An IDACORP Company
December 16,2010
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utiities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-10-57
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 MURPHY FLAT ENERGY,
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.
ir9:~
Donovan E. Walker
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: (208) 388-5317
Facsimile: (208) 388-6936
dwalkerCâidahopower.com
Inordstrom((idahopower.com
0: r: (~_, r: l \fl,-"~'",-, '0
"iO'. n f't"Lr ! ç, P'l~ 3: 44,üVLL,''',f l~-J ,I.
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-10-57
A DETERMINATION REGARDING THE )
FIRM ENERGY SALES AGREEMENT FOR ) APPLICATION
THE SALE AND PURCHASE OF ELECTRIC )
ENERGY BETWEEN IDAHO POWER )
COMPANY AND MURPHY FLAT ENERGY, )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 Murphy Flat Energy, LLC ("Murphy Flat Energy" or
"Sellet') under which Murphy Flat Energy would sell and Idaho Power would purchase
electric energy generated by the Murphy Flat Energy wind generation project ("Facilty")
located near Murphy, Idaho.
APPLICATION - 1
In support of this Application Idaho Power represents as follows:
I. BACKGROUND
1. Sections 201 and 210 of PURPA, and pertinent regulations of the Federal
Energy Regulatory Commission ("FERC"), require that regulated electric utilties
purchase power produced by cogenerators or small power producers that obtain
qualifying facilty ("OF") status. The 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 utility 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. Murphy Flat Energy proposes to design, construct, install, own, operate,
and maintain a 25 megawatt ("MW") (Maximum Capacity Amount) wind generating
facilty to be located near Murphy, Idaho. The Facilty wil be a OF under the applicable
provisions of PURPA. The FESA for this Facilty, as well as the FESAs for Murphy Flat
Mesa, LLC; Murphy Flat Wind, LLC; Rainbow Ranch Wind LLC; and Rainbow West
Wind, LLC, are all signed by Brian Jackson, Manager of American Wind Group LLC,
being the authorized manager of each LLC for the aforementioned projects.
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
APPLICATION - 2
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 eligibility cap. Comments are due on December
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 eligibility 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, utilty 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
APPLICATION - 3
Commission in its gatekeeper role of assuring that utilty 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
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 reliability 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 15, 2010, Idaho Power and Murphy Flat Energy 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, Murphy Flat Energy 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 Murphy Flat Energy on
December 13, 2010. It was subsequently executed by Idaho Power on December 15,
2010, and now fied for the Commission's review on December 16, 2010.
7. The nameplate rating of this Facilty is 25 MW. As defined in paragraph
1.17 and paragraph 4.1.3 of the FESA, Murphy Flat Energy wil be required to provide
APPLICATION - 4
data on the Facilty that Idaho Power wil use to confirm that under normal and/or
average conditions, the Facilty 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.
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, Murphy Flat Energy
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-10-19, and IPC-E-10-22.
9. Murphy Flat Energy has elected December 31, 2011, as the Scheduled
First Energy Date and December 31, 2012, as the Scheduled Operation Date for this
Facility. See Appendix B. Various requirements have been placed upon Murphy Flat
Energy 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
APPLICATION - 5
applicable interconnection charges and monthly operation and maintenance charges
under Schedule 72 wil be assessed to Murphy Flat Energy.
11 . The FESA provides that all applicable interconnection charges and
monthly operational or maintenance charges under Schedule 72 wil be assessed to
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
Power's 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 Murphy Flat Energy and Idaho Power.
PURPA OF generation must be designated as a network resource ("DNR") on Idaho
Powets 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's generation, and upon execution of the FESA and the GIA, this Facilty may
then be designated as a network resource.
12. Seller has selected December 31, 2011, for the Scheduled First Energy
Date and December 31, 2012, as the Scheduled Operation Date. Murphy Flat Energy
has been advised that it is Murphy Flat Energy's responsibilty to work with Idaho
Powets 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 Facilty to achieve the December 31, 2012,
Scheduled Operation date. Seller has been further advised that delays in the
APPLICATION - 6
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 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. Murphy Flat Energy has
advised Idaho Power that is has been advised of and is wiling to take the responsibilty
and risk associated with electing to proceed with this contract without knowledge of the
requirements of interconnection and possible transmission upgrades.
13. Murphy Flat Energy 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 Facility 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
APPLICATION - 7
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.
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 Murphy Flat Energy for purchases of energy
wil 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 respectully 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((idahopower.com
Inordstrom((idahopower.com
APPLICATION - 8
Randy C. Allphin
Energy Contract Administrator
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
rallphin((idahopower.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 Murphy Flat Energy, LLC, without change or condition; and, if accepted,
(3) declaring that all payments for purchases of energy under the Firm Energy Sales
Agreement between Idaho Power Company and Murphy Flat Energy, LLC, be allowed
as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this 16th day of December 2010.
~uJf!QÑKER
Attorney for Idaho Power Company
APPLICATION - 9
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 16th 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:
Murphy Flat Energy, LLC
Attn: Brian D. Jackson
Murphy Flat Energy, LLC
American Wind Group LLC- Manager
2792 Desert Wind Road
Oasis, Idaho 83647-5020
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email brian((americanwind.net
~rW~__
APPLICATION -10
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-10-57
IDAHO POWER COMPANY
ATTACHMENT NO.1
FIR ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AN
MURHY FLAT ENERGY, 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
28
29
TITLE
Defintions
No Reliance on Idao Power
Waranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment
Environmental Attbutes
Facility and Interconnection
Meterig and Telemetry
Records
Operations
Indemnification and Insurnce
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 Ters and Conditions
Severability
Counterpars
Entire Agreement Signatures
Appendix A
AppendixB
AppendixC
AppendixD
Appendix E
12/13/2010
FIR ENERGY SALES AGREEMENT
(10 aMW or Less)
Project Name: Murhy Flat Energy Project
Project Number: 12616500
THIS AGREEMENT, entered into on this 1. day of lJClher 2010 between
Murhy Flat Energy, LLC (Seller), and IDAHO POWER COMPAN, an Idao corporation
(Idaho Power), hereinafter sometimes referred to collectively as "Paries" or individually as "Pary."
WITNESSETH:
WHEREAS, Seller wil design, construct, own, maintain and operate an electric generation
facilty; and
WHEREAS, Seller wishes to sell, and Idaho Power is wiling to purchase, fir electrc energy
produced by the Seller's Facility.
THEREFORE, In consideration of the mutual covenants and agreements hereinafter set forth, the
Parties agree as follows:
ARTICLE I: DEFINIONS
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 Mils/kWh the result shall be 15.00 Mils/kWh.
1.2 "Business Days" - means any calenda day that is not a Saturday, a Sunday, or a NERC
recognized holiday.
12/13/2010
1.3 "Calculated Net Energy Amount" - A montWy estimate, prepared and documented after the façt
by Seller, reviewed and accepted by the Buyer that is the calculated monthly maximum energy
deliveries (measured in kWh) for each individual wind tubine, totaled for the Facility to
determine the total energy that the Facility could have delivered to Idao Power durig that
month based upon: (1) each wind tubine's Nameplate Capacity, (2) Suffcient Prie Mover
available for use by each wind tubine durg 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 charcterized as item 3, 4 or 5 above (measured on each individual
occurence and individual wind tubine) 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 Commssion.
l.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 Facility achieves
the Operation Date.
1.8 "Delay Price" - The curent month's Mid-Columbia Market Energy Cost minus the curent
month's All Hours Energy Price specified in paragraph 7.3 of this Agreement. If this calculation
results in a value less than 0, the result 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 Firm Energy Sales
Agreement representing the date upon which this Fir Energy Sales Agreement was fully
executed by both Paries.
-2-
12/13/2010
l.ll "Facilty" - That electric generation facility described in Appendix B of this Agreement.
l.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 deliverg energy to
the Idao Power electrical system at the Point of Delivery.
1.13 "Forced Outage" - a parial or total reduction of a) the Facilty's capacity to produce and/or
deliver Net Energy to the Point of Delivery, or b) Idaho Power's ability to accept Net Energy at
the Point of Delivery for non-economic reasons, as a result ofIdaho Power or Facilty: 1)
equipment failure which was not the result of negligence or lack of preventative maintenance, or
2) responding to a transmission provider curailment order, or 3) unplaned preventative
maintenance to repair equipment that left unepaired, would result in failure of equipment prior
to the planned maintenance period, or 4) planed maintenance or construction of the Facility or
electrical lines required to serve this Facility. The Parties shall make commercially reasonable
efforts to perorm this unplaned preventative maintenance durig periods of low wind
availabilìty.
1.14 "Heavv 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 paricularly 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 Determnation" - The process by which Idao Power confirs that under
normal or average design conditions the Facility wil generate at no more than 10 average MW
per month and is therefore eligible to be paid the published rates in accordance with Commission
Order No. 29632.
-3-
12/1312010
1.18 "Light Load Hours" - The daily hours begining 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, Thangiving and Chrstmas.
1.l9 "Losses" - The loss of electrical energy expressed in kilowatt hour (kWh) occurng 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 Idao Power electrcal system. The loss calculation formula
wil be as specified in Appendix B of this Agreement.
1.20 "Market Energy Reference Price" - Eighty-five percent (85%) ofthe 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 "Mechancal Availabilty" - The percentage amount calculated by Seller within 5 days after the
end of each month of the Facilty's monthly actual Net Energy divided by the Facility's
Calculated Net Energy Amount for the applicable month. Any damages due as a result of the
Seller falling short of the Mechancal Availabilty Guartee for each month shall be determined
in accordance with paragraph 6.4.4.
1.24 "Mechancal Availabilty Guarantee" shall be as defined in paragraph 6.4.
1.25 "Meterig 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 Facilty 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.
-4-
12/13/2010
If the Dow Jones Mid-Columbia Index price is discontinued by the reporting agency, both Paries
wil mutually agree upon a replacement index, which is similar to the Dow Jones Mid-Columbia
Index. The selected replacement index wil be consistent with other similar agreements and a
commonly used index by the electrcal industr.
1.28 "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-amperes, kilowatts, volts
or other appropriate unts. 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 commts to deliver all Net Energy to Idaho Power at the Point
of Delivery for the full term of the Agreement. Net Energy does not include Inadvertent Energy.
1.30 "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 electrical facilties are interconnected and the energy from this Facility is delivered to the
Idao Power electrical system.
1.32 "Prudent Electrical Practices" - Those practices, methods and equipment that are commonly and
ordinarly used in electrcal engineering and operations to operate electric equipment lawfully,
safely, dependably, efficiently and economically.
1.33 "Scheduled Operation Date" - The date specified in Appendix B when Seller anticipates
achieving the Opertion 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.
-5-
12/13/2010
1.34 "Schedule 72" - Idaho Power's Tarff No 101, Schedule 72 or its successor schedules as
approved by the Commission. The Seller shall be responsible to pay all costs of interconnection
and integration of this Facilty into the Idaho Power electrical system as specified within
Schedule 72 and this Agreement.
1.35 "Season" - The three perods identified in paragraph 6.2.1 of this Agreement.
1.36 "Special Facilities" - Additions or alterations of transmission and/or distrbution lines and
tranformers as described in Schedule 72.
1.37 "Station Use" - Electrc energy that is used to operate equipment that is auxliar or otherwise
related to the production of electricity by the Facility.
1.38 "Sufficient Prime Mover" means wind speed that is (1) equal to or greater than the generation
unt's manufacturer-specified minimum levels required for the generation unt 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 "Surplus Energy" - All Net Energy produced by the Seller's Facility and delivered by the Facility
to the Idaho Power electrcal system prior to the Operation Date.
1.40 "Total Cost of the Facility" - The total cost of strctures, 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 Facilty 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 warrnts and represents to Idaho Power that in entering
into this Agreement and the undertakng by Seller of the obligations set forth herein, Seller has
investigated and deterined that it is capable of performing hereunder and has not relied upon
the advice, experience or expertise of Idaho Power in connection with the transactions
contemplated by this Agreement.
-6-
12/13/2010
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.
ARTICLE II: WARTIES
3.1 No Waranty by Idaho Power - Any review, acceptace 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 warranties, expressed or implied, regardig any aspect of
Seller's design, specifications, equipment or facilties, including, but not limited to, safety,
durability, reliabilty, strength, capacity, adequacy or economic feasibility.
3.2 Qualifyng Facilty Status - Seller warts that the Facility is a "Qualifyg Facilty," as that term
is used and defined in 18 CFR 292.201 et seq. Afer initial qualification, Seller wil tae such
steps as may be required to maintain the Facility's Qualifyng Facility status durg the ter of
this Agreement and Seller's failure to maintai Qualifying Facilty status wil be a Material
Breach of this Agreeinent. Idaho Power reserves the right to review the Facilty's Qualifyng
Facility status and associated support and compliance documents at anytime durng the term of
this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
4.1 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, permits 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 Subpar B, 18 CFR 292.201 et
seq. as a certified Qualifyng Facilty.
4.1.2 Opinion of Counsel- Submit to Idao Power an Opinion Letter signed by an attorney
admitted to practice and in good standing in the State of Idaho providing an opinion that
-7-
12/13/2010
Seller's licenses, permits and approvals as set forth in pargraph 4.1.1 above are legally
and validly issued, are held in the name ofthe 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 renderig the opinon
understands that Idaho Power is relying on said opinion. Idao Power's acceptace ofthe
form wil not be unreasonably withheld. The Opinion Letter wil be governed by and
shall be interpreted in accordace with the legal opinion accord of the American Bar
Association Section of Business Law (1991).
4.1.3 Intial Capacity Deterination - Submit to Idaho Power such data as Idaho Power may
reasonably require to perform the Intial Capacity Determination. Such data wil include
but not be limited to, Nameplate Capacity, equipment specifications, prime mover data,
resource characteristics, normal and/or average operating design conditions and Station
Use data. Upon receipt of this information, Idaho Power wil review the provided data
and if necessar, request additional data to complete the Intial Capacity Determination
within a reasonable time.
4.1.3.1 Ifthe Maxium Capacity specified in Appendix B of this Agreement and the
cumulative manufacture Nameplate Capacity rating of the individual generation
units at this Facility is less than 10 MW, the Seller shall submit detailed,
manufactuer, 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 Determination for
this Facility.
-8-
12/13/2010
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
review the provided data and determe if the Nameplate Capacity specified is reasonable
based upon the manufacturer's specified generation ratings for the specific generation
units.
4.1.5 Engineer's Cerifications - Submit an executed Engineer's Certification of Design &
Constrction Adequacy and an Engineer's Certification of Operations and Maitenance
(O&M) Policy as described in Commission Order No. 21690. These cerificates wil be
in the form specified in Appendix C but may be modified to the extent necessa to
recognze the different engineering disciplines providing the certificates.
4.1.6 Insurance - Submit written proof to Idaho Power of all insurance required in Aricle XIII.
4.1.7 Interconnection - Provide wrtten confiration from Idaho Power's delivery business
unit that Seller has satisfied all interconnection requirements.
4.1.8 Network Resource Designation - The Seller's Facilty 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 Idao Power to file an
initial transmission capacity request.
a) Results of the initial trasmission capacity request are known and acceptable
to the Seller.
b) Seller acknowledges responsibilty for all interconnection costs and any costs
associated with acquirg adequate firm transmission capacity to enable the
project to be classified as an Idaho Power designated firm network resource.
c.) If the Facility 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
-9-
12/13/2010
entities to deliver the Facility's energy to an acceptable point of delivery on
the Idao Power electrical system.
4.1.9 Written Acceptance - Request and obtain written confiration from Idao Power that all
conditions to acceptance of energy have been fulfilled. Such wrtten confiation 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 Ter - Subject to the provisions of pargraph 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 Year from the Operation Date.
5.2 Operation Date - The Operation Date may occur only after the Facilty 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 Idao 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 Idaho Power in a written format.
e) Seller has received written confiration from Idaho Power of the Operation Date.
This confirmation wil not be uneasonably withheld by Idao 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 trasmission network upgrde
study, design and construction process that are not Force Majeure events accepted by both
Parties, shall not prevent Delay Liquidated Damages from being due and owing as calculated in
accordance with this Agreement.
-10-
12/13/2010
5.3.1 If the Operation Date occur after the Scheduled Operation Date but on or prior to niety
(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
curent month) multiplied by the curent month's Delay Price.
5.3.2 If the Operation Date does not occur within ninety (90) days following the Scheduled
Operation Date, the Seller shall pay 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 termate 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 ninety (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 drw fuds from the Delay Securty provided by the Seller in
an amount equal to the calculated Delay Liquidated Damages.
-11-
12/13/2010
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 Idao 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 trasmission capacity request.
5.8 Within thiry (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 Securty in the time specified above wil be a Material Breach of this
Agreement and Idao Power may termate this Agreement.
5.8.1 Delay Security The greater of forty-five dollars ($45) multiplied by the Maximum
Capacity with the Maximum Capacity being measured in kW or the sum of thee month's
estimated revenue. Where the estimated three months of revenue is the estimated revenue
associated with the first three full months following the estimated Scheduled Operation
Date, the estimated kWh of energy production as specified in paragraph 6.2.1 for those
three months multiplied by the All Hours Energy Price specified in paragraph 7.3 for
each of those three months.
5.8.1.1 In the event (a) Seller provides Idaho Power with certification that (1) a
generation interconnection agreement specifyng a schedule that wil enable this
Facility to achieve the Operation Date no later than the Scheduled Operation
Date has been completed and the Seller has paid all required interconnection
-12-
12/13/2010
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 genertion
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 pargraph 5.8.1.1 is revised and as a
result the Facilty will 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 Security 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 Idaho Power requests reinstatement. Failur
to timely reinstate the Delay Securty wil be a Material Breach of ths
Agreement.
5.8.2 Idaho Power shall release any remaining security posted hereunder after all
calculated Delay Liquidated Damages are paid in full to Idao 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
Idaho Power at the Point of Delivery. All Inadvertent Energy produced by the Facilty wil also
be delivered by the Seller to Idaho Power at the Point of Delivery. At no time wil the total
-13-
12/13/2010
amount of Net Energy and/or Inadvertent Energy produced by the Facilty and delivered by the
Seller to the Point of Delivery exceed the Maximum Capacity Amount.
6.2 Net Energy Amounts - Seller intends to produce and deliver Net Energy in the following monthly
amounts. These amounts shall be consistent with the Mechanical Availability Guarantee.
6.2.l Intial 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
6,161,200
6,188,200
5,610,640
4,706,680
4,256,560
3,752,800
4,148,680
5,216,200
3,977,800
4,368,160
3,949,660
4,325,920
6.3 Unless excused by an event of Force Majeure, Seller's failure to deliver Net Energy in any
Contract Year in an amount equal to at least ten percent (10%) of the sum of the Intial Year
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 Availability of eighty-five percent (85%) for the
Facilty for each month durng the full term of ths Agreement (the "Mechanical Availability
Guarantee"). Failure to achieve the Mechanical Availabilty Guaantee shall result in
Idaho Power calculating damages as specified in pargraph 6.4.4.
6.4.1 At the same time the Seller provides the MontWy Power Production and Availabilty
Report (Appendix A), the Seller shall provide and certify the calculation of the Facilty's
curent month's Mechanical Availabilty. The Seller shall include a sumary of all
information used to calculate the Calculated Net Energy Amount including but not
-l4-
12/13/2010
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 (3) years detailed documentation supporting
the monthly calculation of the Facilty's Mechancal Availability.
6.4.3 Idao Power shall have the right to review and audit the documentation supporting the
calculation of the Facility's Mechancal Availabilty at reasonable times at the Seller's
offces.
6.4.4 If the curent month's Mechanical Availability is less than the Mechanical Availability
Guarantee, damages shall be equal to:
((85 percent of the month's Calculated Net Energy Amount) minus the
month's actual Net Energy deliveries) multiplied by the Availability 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 daages are offset against the
energy payment, the Seller shall pay in full the remainig balance within thirty (30) days
of the date of the invoice.
ARTICLE VII: PURCHASE PRICE AN METHOD OF PAYMENT
7.l Heavv Load Puchase Price - For all Net Energy received durig Heavy Load Hours,
Idao Power wil pay the non-levelized 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
40.52
42.80
45.32
66.15
69.87
74.00
55.12
58.24
61.66
-15-
12/13/2010
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
47.71
50.29
53.05
54.64
56.20
57.90
59.57
61.29
63.33
65.46
67.67
69.97
72.35
74.38
76.62
78.96
81.38
83.87
87.22
90.15
93.19
78.18
82.74
87.64
90.46
93.23
96.25
99.21
102.27
105.90
109.67
113.59
117.66
121.90
125.49
129.20
133.03
136.97
141.04
146.51
151.30
156.26
64.92
68.42
72.17
74.34
76.61
79.12
81.59
84.14
87.16
90.31
93.57
96.97
100.50
103.49
106.58
109.77
113.06
116.45
121.01
125.00
129.13
7.2 Light Load Purchase Price - For all Net Energy received durig Light Load Hours, Idao Power
wil pay the non-levelized 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 58.1 1 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
-16-
12/13/2010
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
2028 73.70 124.29 102.49
2029 76.03 128.24 105.78
2030 78.52 l32.3l 109.1 7
2031 81.87 137.77 113.73
2032 84.80 142.56 117.72
2033 87.84 147.52 121.85
7.3 All Hours Energy Price - The price to be used in the calculation of the Surlus Energy Price and
Delay Price shall be the non-levelized energy price in accordance with Commission Order 31025
adjusted in accordance with Commission Order 30488 for the wind integrtion charge, and with
seasonalization factors applied:
Year
Season 1 - (73.50 %)
Mils/kWh
Season 2 - (120.00 %)
Mils/Wh
Season 3 - (100.00 %)
Mils/Wh
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
38.33
40.61
43.13
45.52
48.10
50.86
52.45
54.01
55.71
57.37
59.10
61.14
63.27
65.48
67.78
70.16
72.18
74.28
76.58
79.00
8l.49
62.57
66.30
70.42
74.33
78.85
83.75
86.58
89.35
92.36
95.32
98.38
102.01
105.78
109.70
113.77
118.01
121.60
125.31
129.14
133.09
137.16
52.14
55.26
58.68
61.93
65.44
69.19
71.36
73.48
75.88
78.35
80.90
83.92
87.07
90.33
93.73
97.26
100.25
103.35
106.53
109.82
113.21
-17-
12/13/2010
2031
2032
2033
84.84
87.77
90.81
142.62
147.41
l52.37
117.77
121.76
125.89
7.4 Surlus Energy Price - For all Surlus Energy, Idaho Power shall pay to the Seller the curent
month's Market Energy Reference Price or the All Hours Energy Price specified in paragraph
7.3, whichever is lower.
7.5 Inadvertent Energy -
7.5.1 Inadvertent Energy is electric energy produced by the Facilty, expressed in kWh,
which the Seller delivers to Idaho Power at the Point of Delivery that exceeds 10,000
kW multiplied by the hour in the specific month in which the energy was delivered.
(For example Januar contains 744 hours. 744 hours times 10,000 kW = 7,440,000
kWh. Energy delivered in Januar in excess of 7,440, 000 kWh in this example
would be Inadvertent Energy.)
7.5.2 Although Seller intends to design and operate the Facility to generate no more than
10 average MW and therefore does not intend to generate Inadvertent Energy,
Idaho Power wil accept Inadvertent Energy that does not exceed the Maximum
Capacity Amount but wil not purchase or pay for Inadvertent Energy.
7.6 Payment Due Date - Undisputed Energy payments, less the Wind Energy Production Forecasting
Monthly Cost Allocation (MCA) described in Appendix E and any other payments due
Idaho Power, wil be disbured to the Seller within thiy (30 days of the date which Idao Power
receives and accepts the documentation of the monthly Mechancal Available Guarntee 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 Utilties Commission and Afton Energy, Inc., 107 Idao
781, 693 P.2d 427 (1984), Idaho Power Company v. Idaho Public Utilties Commission, 107
-18-
12/13/2010
Idao l122, 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 Utility 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 certificates
(RECs), or the equivalent environmental attrbutes, 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 Facilty - Seller wil design, construct, install, own, operate and maintain the Facilty
and any Seller-owned Interconnection Facilties 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 Facilties - Except as specifically provided for in this Agreement, the required
Interconnection Facilities wil be in accordance with Schedule 72, the Generation Interconnection
Process and Appendix B. The Seller is responsible for all costs associated with ths equipment as
specified in Schedule 72 and the Generation Interconnection Process, including but not limited to
initial costs incurred by Idaho Power for equipment costs, installation costs and ongoing monthly
Idaho Power operations and maintenance expenses.
ARTICLE X: METERIG AND TELEMETRY
10.1 Metering - Idao Power shall, for the account of Seller, provide, install, and maintain Meterg
and Telemetry Equipment to be located at a mutually agreed upon location to record and measure
power flows to Idaho Power in accordace with this Agreement and Schedule 72. The Meterng
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
-19-
12/13/2010
the Point of Delivery in a manner to provide Idaho Power adequate energy measurement data to
administer this Agreement and to integrate ths Facility's energy production into the Idao Power
electrical system.
10.2 Telemetry - Idao Power wil install, operate and maintain at Seller's expense metering,
communications and telemetry equipment which wil be capable of providing Idaho Power with
continuous instantaneous telemetry of Seller's Net Energy and Inadvertent Energy produced and
delivered to the Idaho Power Point of Delivery to Idao Power's Designated Dispatch Facilty.
ARTICLE XI - RECORDS
11.1 Maintenance of Records - Seller shall maintain at the Facility or such other location mutually
acceptable to the Paries adequate total generation, Net Energy, Station Use, Inadvertent Energy
and maximum generation (kW) records in a form and content acceptable to Idaho Power.
11.2 Inspection - Either Party, after reasonable notice to the other Party, shall have the right, durig
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 Facilty.
ARTICLE XII: OPERATIONS
12 .1 Communcations - 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 paying for Net Energy or accepting
Inadvertent Energy which would have otherwise been produced by the Facility and
delivered by the Seller to the Point of Delivery, if it is prevented from doing so by an
event of Force Majeure, Forced Outage or temporar 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,
-20-
12/1312010
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. Idao Power
wil notify Seller when the interrption, curtailment or reduction is termated.
12.2.2 If, in the reasonable opinion of Idao Power, Seller's operation of the Facilty or
Interconnection Facilities is unsafe or may otherwise adversely affect Idao Power's
equipment, personnel or service to its customers, Idaho Power may temporarly
disconnect the Facilty from Idao Power's trnsmission/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 Idao Power is unable to accept the energy from this Facility and is not excused from
accepting the Facilty's energy, Idao Power's damages shall be limited to only the value
of the estimated energy that Idaho Power was unable to accept. Idaho Power wil have
no responsibilty to pay for any other costs, lost revenue or consequential damages the
Facility may incur.
12.3 Scheduled Maintenance - On or before Janua 31st of each calendar year, Seller shall submit a
written proposed maintenance schedule of significant Facility maintenace for that calenda 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.
-21-
12/13/2010
12.4 Maintenance Coordination - The Seller and Idaho Power shall, to the extent practical, coordinate
their respective line and Facility maintenance schedules such that they occur simultaneously.
12.5 Contact Prior to Curailment - Idao Power wil make a reasonable attempt to contact the Seller
prior to exercising its rights to interrpt interconnection or curail deliveries from the Seller's
Facility. Seller undertands 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 pnor to interrption, curtailment, or reduction of electrical energy deliveries to
Idao Power.
ARTICLE XII: INEMNIFICATION AN INSURNCE
13.1 Indemnification - Each Pary shall agree to hold harless and to indemnfy the other Pary, its
offcers, agents, affliates, subsidiares, parent company and employees against all loss, damage,
expense and liabilty to third persons for injur to or death of person or injury to property,
proximately caused by the indemnfyng 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 indemfyg Pary
shall, on the other Pary's request, defend any suit asserting a claim covered by this indemnty.
The indemnifying Pary shall pay all documented costs, including reasonable attorney fees that
may be incured by the other Pary in enforcing this indemty.
13.2 Insurance - Durng the term of this Agreement, Seller shall secure and continuously car the
following insurance coverage:
13.2.1 Comprehensive General Liabilty Insurance for both bodily injur and property daage
with limits equal to $1,000,000, each occurrence, combined single limit. The deductible
for such insurance shall be consistent with curent Insurance Industry Utilty practices for
similar property.
-22-
12/13/2010
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 namng Idao Power as an additional insured and loss payee as
applicable; and
(b) A provision stating that such policy shall not be canceled or the limits of liability
reduced without sixty (60) days' prior wrtten notice to Idaho Power.
13.3 Seller to Provide Certificate of Insurance - As required in paragraph 4.1.6 herein and anually
thereafter, Seller shall fush Idao Power a cerificate 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
pargraph 13.2 shall lapse for any reason, Seller wil imediately notify Idao Power in writing.
The notice wil advise Idaho Power of the specific reason for the lapse and the steps Seller is
takng 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 diligence,
such Pary is unable to prevent or overcome. Force Majeure includes, but is not limted to, acts of
God, fire, flood, storms, wars, hostilties, civil strife, strkes and other labor distubances,
earhquakes, fires, lightning, epidemics, sabotage, or changes in law or regulation occurng after
the Effective Date, which, by the exercise of reasonable foresight such pary could not reasonably
have been expected to avoid and by the exercise of due diligence, it shall be unable to overcome.
If either Pary is rendered wholly or in par unable to perform its obligations under this
Agreement because of an event of Force Majeure, both Paries shall be excused from whatever
performance is affected by the event of Force Majeure, provided that:
-23-
12/1312010
(1) The non-performng Pary shall, as soon as is reasonably possible after the
occurence of the Force Majeure, give the other Pary written notice describing
the pariculars of the occurence.
(2) The suspension of performance shall be of no greater scope and of no longer
duration than is required by the event of Force Majeure.
(3) No obligations of either Party which arose before the occurence causing the
suspension of performance and which could and should have been fully
performed before such occurrence shall be excused as a result of such
occurrence.
ARTICLE XV: LIAILITY; DEDICATION
l5.1 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 puntive
damages, except as expressly authorized by this Agreement.
15.2 Dedication. No undertakg 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 Idaho Power as an independent public utility corporation or Seller as
an independent individual or entity.
ARTICLE XVI: SEVERA OBLIGATIONS
16.1 Except where specifically stated in this Agreement to be otherwise, the duties, obligations and
liabilties of the Paries are intended to be several and not joint or collective. Nothing contaned
in this Agreement shall ever be construed to create an association, trust, parership or joint
ventue or impose a trst or partnership duty, obligation or liabilty on or with regard to either
Party. Each Party shall be individually and severally liable for its own obligations under this
Agreement.
-24-
12/13/2010
ARTICLE XVII: WAIER
l7.1 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 shal not be
deemed a waiver with respect to any subsequent default or other matter.
ARTICLE XVII: CHOICE OF LAWS AN VENU
l8.1 Ths Agreement shall be construed and interpreted in accordace with the laws ofthe State of
Idaho without reference to its choice of law provisions.
18.2 Venue for any litigation arising out of or related to this Agreement wil lie in the District Cour of
the Fourh Judicial District ofIdao in and for the County of Ada.
ARTICLE XIX: DISPUTES AN DEFAULT
19.1 Disputes - All disputes related to or arsing under this Agreement, including, but not limted to,
the interpretation of the terms and conditions of this Agreement, wil be submitted to the
Commssion for resolution.
19.2 Notice of Default
19.2.1 Defaults. If either Pary fails to perform any of the terms or conditions of this
Agreement (an "event of default"), the non-defaulting Party shall cause notice in
writing to be given to the defaulting Party, specifyg the maner in which such
default occured. If the defaulting Pary shall fail to cure such default withi the sixty
(60) days after serice of such notice, or if the defaulting Party 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 Par may, at its option, terminate this
Agreement and/or pursue its legal or equitable remedies.
-25-
12/13/2010
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 occurence of the breach.
19.3 Security for Pedormance - 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 pargrph 13.2. If Seller
fails to comply, such failure wil be a Materal Breach and may only be cured by
Seller supplying evidence that the required insurance coverage has been replaced or
reinstated;
Engineer's Certifications - Every three (3) year after the Operation Date, Seller wil
supply Idaho Power with a 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
Licenses and Permts - During the full term of this Agreement, Seller shall maintain
compliance with all permits and licenses described in paragraph 4.1.1 of this
Agreement. In addition, Seller wil supply Idaho Power with copies of any new or
additional permits or licenses. At least every fifth Contract Year, Seller wil update the
documentation described in Paragraph 4.l.l. If at any time Seller fails to maintain
compliance with the permits and licenses described in paragraph 4.1.1 or to provide
the documentation required by this paragraph, such failure wil be an event of default
and may only be cured by Seller submitting to Idaho Power evidence of compliance
from the permtting agency.
19.3.2
19.3.3
-26-
12/13/2010
ARTICLE XX: GOVERNENTAL AUTHORIATION
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 ratemakng purposes.
ARTICLE XXLL: SUCCESSORS AN ASSIGNS
22.1 This Agreeme~t and all of the terms and provisions hereof shall be binding upon and inur to the
benefit of the respective successors and assigns of the Parties 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 uneasonably withheld. Notwithstanding the foregoing,
any pary which Idaho Power may consolidate, or into which it may merge, or to which it may
conveyor transfer substantially all of its electric utilty assets, shall automatically, without fuher
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. Idaho Power shall have the right to be notified by the financing entity that it is
exercising such rights or remedies.
ARTICLE XXIL: MODIFICATION
23.1 No modification to this Agreement shall be valid uness it is in wrting and signed by both Paries
and subsequently approved by the Commission.
-27-
12/13/2010
ARTICLE XXIV: TAXES
24.1 Each Pary shall pay before delinquency all taxes and other governental charges which, iff ailed
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:
To Seller:Original document to:
Murhy Flat Energy LLC
American Wind Group LLC - Manager
Attn: Brian D. Jackson
2792 Desert Wind Road
Oasis, Idaho 83647-5020
E-mail: Brian~AmericanWind.ne!
Telephone: (208) 796-2222
Copy of document to:
Wintercamp Ranch Trust
Attn: Don Baril
P.O. Box 1
Murphy, Idaho 83650
Email: kr~gscwireless.net
Telephone: (208) 867-6863
To Idaho Power:Original document to:
Senior Vice President, Power Supply
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Email: Lgrow~idahopower.com
Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
E-mail: rallphin~idaopower.com
-28-
12/13/2010
Either Pary may change the contact person and/or address information listed above, by providing written
notice from an authorized person representing the Par.
ARTICLE XXVI: ADDITIONAL TERMS AN CONDITIONS
26.1 This Agreement includes the following appendices, which are attached hereto and included by
reference:
Appendix A
AppendixB
AppendixC
AppendixD
AppendixE
Monthly Power Production and Availabilty Report
Facility and Point of Delivery
Engineer's Certifications
Forms of Liquid Securty
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 enforceability of any other terms or provisions and this Agreement shall be construed
in all other respects as if the invalid or unenforceable term or provision were omitted.
ARTICLE XXVII: COUNERPARTS
28.1 This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instruent.
ARTICLE XXIX: ENTIR AGREEMENT
29.1 This Agreement constitutes the entire Agreement of the Paries concerng the subject matter
hereof and supersedes all prior or contemporaneous oral or wrtten agreements between the
Parties concernng the subject matter hereof.
-29-
12/13/2010
IN WITNESS WHEREOF, The Paries hereto have caused this Agreement to be executed
in their respective names on the dates set forth below:
Idao Power Company
By
Dated
Lisa A Grow
Sr. Vice President, Power Supply
12.15- to
"Idao Power"
-30-
Murhy Flat Energy LLC
By
rian D. Jackson
Manager of American Wind Group LLC
American Wind Group LLC
being the authorized manager of
Murhy Flat Wind LLC
Dated /1- -/5 -wlO
"Seller"
12/13/2010
APPENDIX A
A -1 MONTHLY POWER PRODUCTION AN AVAIABILITY REPORT
At the end of each month the following required documentation will be submitted to:
Idao 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 Idao Power Meter Equipment
measurng the Facility's total energy production delivered to Idao 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 Mechaical Availability.
-31-
12/13/2010
Idaho Power Company
Cogeneration and Small Power Production
MONTII Y POWER PRODUCTION AN 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:
Beginng 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.
DateSignature
-32-
12/13/2010
A-2 AUTOMATED METER READING COLLECTION PROCESS
Monthly, Idaho Power wil use the provided Metering and Telemetry equipment and processes to collect
the meter readig information from the Idaho Power provided Metering Equipment that measures the Net
Energy and energy delivered to supply Station Use for the Facilty recorded at l2:00 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
Idao Power Contact Information
Daily Energy Production Reporting
Call daily by 10 a.m., l-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 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 comig back online
Seller's Contact Information
24-Hour Project Operationa Contact
Name:
Telephone Number:
Cell Phone:
Brian D. Jackson
208-796-2222
208-859-1882
Project On-site Contact information
Telephone Number:
-33-
12/13/2010
APPENDIXB
FACILITY AN POIN OF DELIVERY
Project Name: Murphy Flat Energy Project
Project Number: 12616500
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.)
The facility wil be comprised of approximately ten (10) wind turbines with a cumulative
nameplate rating that wil not exceed the Maximum Capacity Amount as specified in Item B-4
and not less than 18 MW. At the time this agreement was executed, selection of the turbine
manufacturer had not been finalized by the Seller. At the time the Seller provides the detailed
description of the wind turbines selected and quantity to be included in the Idaho Power
Interconnection process, the Seller wil provide this same information to be included in this
Agreement. The Facility is currently considerng use of up to ten (10) Nordex N100 wind
tubines (Nameplate Capacity rating up to 2.5MW/tubine, 0.95 lead/O.95 lag power factor) or up
to 11 Vestas VIOO wind turbines (Nameplate Capacity rating up to 1.815MW/tubine, 0.90
lead-inductive/0.95 lag-capacitive power factor), or other wind turbine models.
B-2 LOCATION OF FACILITY
Near: Murhy, Idao
T3S, RlW, SEC: 7, l8, and 19, County: Owyhee County
Description of Interconnection Location: T3S, RlW, SEC 5: New Project Substation on Murhy
Flat Road, connected to Siner Butte Substation with 138kV line extension or other location
specified in the Interconnection Agreement.
Nearest Idaho Power Substation: Siner Butte Substation
-34-
12/13/2010
B-3 SCHEDULED FIRST ENERGY AN OPERATION DATE
Seller has selected December 31, 2011 as the Scheduled First Energy Date.
Seller has selected December 31, 2012 as the Scheduled Operation Date.
In makng 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.
B-4 MAXIMUM CAPACITY AMOUN:
This value wil be 25 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 Idao Power electrical system at any
moment in time.
At the time this Agreement was executed the Seller had requested only 20 MW of capacity in the
interconnection and transmission capacity process. Prior to the project deliverig energy that
exceeds 20MW, the Seller must request and be granted additional capacity up to but not
exceeding 5 MW in both interconnection and transmission capacity by Idao Power. The Seller
must make this additional capacity request using the routine Idaho Power interconnection and
transmission capacity process and shall be responsible for all costs associated with this additional
capacity request. Under no circumstances wil the Nameplate Capacity of this Facilty exceed
25MW. If the installed capacity is less than the Maximum Capacity Amount at the end of the
first Contract Year, the Maximum Capacity Amount wil be adjusted downward to reflect the
actul nameplate rating of the wind turbines installed. Ths revised Maximum Capacity Amount
wil then remain in effect for the remaining term of this Agreement.
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 determne
-35-
12/13/2010
the specific Point of Deliver 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 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 Idao Power Meterng 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 meterig equipment. At such time as
Seller provides Idaho Power with the electrical equipment specifications (trsformer loss
specifications, conductor sizes, etc.) of all ofthe electrcal equipment between the Facility and the
Idaho Power electrical system, Idaho Power wil configue a revised loss calculation formula to
be agreed to by both paries and used to calculate the kWh Losses for the remaining term of the
Agreement. If at any time durng the term of this Agreement, Idaho Power determines that the
loss calculation does not correctly reflect the actul kWh losses attbuted to the electrical
equipment between the Facility and the Idaho Power electrcal system, Idao Power may adjust
the calculation and retroactively adjust the previous months kWh loss calculations.
B-7 METERIG AN TELEMETRY
Schedule 72 wil determine the specific meterng and telemetry requirements for this Facility. 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
-36-
12/13/2010
Idaho Power provided equipment. Seller wil arge 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 Facilties energy production.
Idaho Power provided equipment wil be owned and maintained by Idaho Power, with total cost
of purchase, installation, operation, and maintenance, including admnistrative cost to be
reimbursed to Idaho Power by the Seller. Payment of these costs wil be in accordace with
Schedule 72 and the total meterig cost wil be included in the calculation of the Monthly
Operation and Maintenance Charges specified in Schedule 72.
B-8 NETWORK RESOURCE DESIGNATION
Idao Power canot accept or pay for generation from this Facilty until a Network Resource
Designation ("NR") application has been accepted by Idaho Power's delivery business unt.
Federal Energy Regulatory Commission ("FERC") rules require Idaho Power to prepare and
submit the NR. Because much of the information Idaho Power needs to prepare the NR is
specific to the Seller's Facilty, Idao Power's abilty to fie the NR in a timely maner is
contingent upon timely receipt of the required information from the Seller. Prior to Idao Power
beginning 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 timely manner can
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.
-37-
12/13/2010
APPENDIXC
ENGINER'S CERTIFICATION
OF
OPERATIONS & MAIENANCE POLICY
The undersigned , on behalf of himselflherself 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 standig in the State of Idao.
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, Idao.
5. That Engineer recognzes that the Agreement provides for the Project to fush electrical energy
to Idao 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.
8. That Engineer has reviewed and/or superised 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
-38-
12/13/2010
been designed and built to appropriate standads, 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 20 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 accurate to the best of
his/her knowledge and therefore sets his/her hand and seal below.
By
(P.E. Stamp)
Date
-39-
12/13/2010
APPENDIXC
ENGINER'S CERTIFICATION
OF
ONGOING OPERATIONS AN MAIENANCE
The undersigned , on behalf of hiselflherself
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 ofIdao.
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 ths Statement is identified as IPCo Facilty 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 Idao 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.
-40-
12/13/2010
8. That Engineer has made a physical inspection of said Project, its operations and maintenance
records since the last previous certified inspection. It is Engineer's professional opinion, based on the
Project's appearance, that its ongoing O&M has been substantially in accordace with said O&M Policy;
that it is in reasonably good operating condition; and that if adherence to said O&M Policy continues, the
Project wil continue producing at or near its design electrical output, effciency and plant factor for the
remaining year of the Agreement.
9. That Engineer recognizes that Idaho Power, in accordance with pargrph 5.2 ofthe 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.
By
(P .E. Stamp)
Date
-41-
12/13/2010
APPENDIXC
ENGINER'S CERTIFICATION
OF
DESIGN & CONSTRUCTION ADEQUACY
The undersigned , on behalf of hiself!erself and
hereinafter collectively referred to as "Engineer", hereby states and
certifies to Idaho Power as follows:
1.
2.
That Engineer is a Licensed Professional Engineer in good standing in the State ofIdao.
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 Merdian, County, Idao.
5. That Engineer recognizes that the Agreement provides for the Project to fuish electrical
energy to Idao Power for a 20 year perod.
6. That Engineer has substantial experence in the design, construction and operation of
electric power plants of the same type as this Project.
7. That Engieer has no economic relationship to the Design Engineer of this Project and
has made the analysis ofthe plans and specifications independently.
-42-
12/1312010
8.That Engineer has reviewed the engineerng design and construction of the Project,
including the civil work, electrical work, generating equipment, prime mover conveyance system, Seller
furnshed Interconnection Facilties and other Project facilities and equipment.
9. That the Project has been constructed in accordance with said plans and specifications, all
applicable codes and consistent with Prudent Electrical Practices as that term is described in the
Agreement.
10. That the design and construction of the Project is such that with reasonable and prudent
operation and maintenance practices by Seller, the Project is capable of performing in accordance with the
terms of the Agreement and with Prudent Electrical Practices for a 20 year period.
11.That Engineer recognzes that Idaho Power, in accordance with paragrph 5.2 of the
Agreement, in interconnecting the Project with its system, is relyig 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. Stap)
Date
-43-
12/13/2010
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 ofliquid
financial securty that would provide readily available cash to Idao Power to satisfy the Delay Securty
requirement and any other security requirement within this Agreement.
For the purose ofthis 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 ofIdaho Power, provided that any guarantee and/or letter of credit issued by any
other entity with a short-term or long-term investment grade credit rating by Standad & Poor's
Corporation or Moody's Investor Serces, Inc. shall be deemed to have acceptable financial
creditworthiness.
1. Cash Escrow Security - Seller shall deposit fuds in an escrow account established by the
Seller in a bankng institution acceptable to both Paries equal to the Delay Security or any
other required securty amount(s). The Seller shall be responsible for all costs, and receive
any interest eared associated with establishing and maintaining the escrow account(s).
Guarantee or Letter of Credit Securty - Seller shall post and maintain in an amount equal to the Delay
Securty or other required securty amount(s): (a) a guaranty from a pary that satisfies the Credit
Requirements, in a form acceptable to Idao Power at its discretion, or b) an irrevocable Letter of Credit
in a form acceptable to Idao 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 establishig and maintainig the Guarantee(s) or Letter(s) of Credit.
-44-
12/13/2010
APPENDIXE
WIN ENERGY PRODUCTION FORECASTING
As specified in Commission Order 30488, Idao Power shall make use of a Wind Energy Production
Forecasting model to forecast the energy production from this Facility and other Qualifyg Facility wind
generation resources. Seller and Idao Power wil share the cost of Wind Energy Production Forecasting.
The Facilty'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 Idao 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 B of this Agreement, the Wind
Energy Production Forecasting Monthly Cost Allocation (MCA) wil be due and
payable by the Seller. Any Wind Energy Production Forecasting Monthy Cost
Allocations (MCA) that are not reimbursed to Idaho Power shall be deducted
from energy payments to the Seller.
b. As the value ofthe 0.1 % cap of the Facilities 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. If the Facilty has paid the monthly allocations, a refud wil be
included in equal monthly amounts over the ensuing Contract Year. If the
Facilty has not paid the monthly allocations, the amount due to Idaho Power wil
be adjusted accordingly and the unpaid balance wil be deducted from the
ensuing Contract Year's energy payments.
-45-
12/13/2010
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
rating of wind projects havig Commssion approved agreements to deliver
energy to Idao 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 Idao Power
Company.
Facility MW (¥ID 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 curent 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 Alocation (MCA) = ACA /12
e. The Wind Energy Production Forecasting Monthly Cost Allocation (MCA) is
due and payable to Idaho Power. The MCA will first be netted against any
monthly energy payments owed to the Seller. If the netting of the MCA against
the monthly energy payments results in a balance being due Idaho Power, the
Facilty shall pay this amount within fifteen (15) days of the date of the payment
invOlce.
-46-
12/13/2010