20110202Application.pdf

DONOVAN E. WALKER
Senior Counsel
dwalkertiidahopower.com
eslDA~POR~
An IDACORP Company
February 2, 2011
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-11-01
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 WESTERN DESERT
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.
yours,.çfA~-
Donovan E. Walker
DEW:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise. to 83707
(-:t.
DONOVAN E. WALKER (ISB No. 5921)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalkercæidahopower.com
Inordstromcæidahopower.com
101 lFC".B -? Pr~J i.: 33LoÚ l L _ "I 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-11-01
A DETERMINATION REGARDING THE )
FIRM ENERGY SALES AGREEMENT FOR ) APPLICATION
THE SALE AND PURCHASE OF ELECTRIC )
ENERGY BETWEEN IDAHO POWER )
COMPANY AND WESTERN DESERT )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 Western Desert Energy, LLC ("Western Desert" or
"Sellet') under which Western Desert would sell and Idaho Power would purchase
electric energy generated by the Western Desert wind facilty ("Facilty") located near
Oreana, Idaho.
APPLICATION - 1
In support of this Application, Idaho Power represents as follows:
I. BACKGROUND
1. Sections 201 and 210 of PURPA, and pertinent regulations of the Federal
Energy Regulatory Commission ("FERC"), require that regulated electric utilities
purchase power produced by cogenerators or small power producers that obtain
qualifying facility ("OF") status. The rate a OF receives for the sale of its power is
generally referred to as the "avoided cost" rate and is to reflect the incremental cost to
an electric utility of electric energy or capacity or both, which, but for the purchase from
the OF, such utilty would generate itself or purchase from another source. The
Commission has authority under PURPA Sections 201 and 210 and the implementing
regulations of the FERC, 18 C.F.R. § 292, to set avoided costs, to order electric utilties
to enter into fixed-term obligations for the purchase of energy from OFs, and to
implement FERC rules.
2. Western Desert proposes to design, construct, install, own, operate, and
maintain a 5 megawatt ("MW") (Maximum Capacity Amount) wind generating facilty to
be located near Oreana, 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 average
megawatts ("aMW") to 1 00 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
APPLICATION - 2
were due on December 22, 2010, Reply Comments were due January 19, 2011, and
Oral Argument was held on 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 filed
over the course of the last 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 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
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
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 January 28, 2011, Idaho Power and Western Desert 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, Western Desert 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
aMW. This FESA was executed by Western Desert on January 22, 2011. It was
subsequently executed by Idaho Power on January 28, 2011, and now filed for the
Commission's review on February 2, 2011.
7. The nameplate rating of this Facilty is 5 MW. As defined in paragraph
1.17 and paragraph 4.1.3 of the FESA, Western Desert wil be required to provide data
on the Facilty that Idaho Power wil use to confirm that under normal and/or average
conditions, the Facilty wil not exceed 10 aMW on a monthly basis. Furthermore, as
described in paragraph 7.5 of the FESA, should the Facility 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, Western Desert 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. Western Desert has elected September 1, 2012, as the Scheduled First
Energy Date and December 1, 2012, as the Scheduled Operation Date for this Facilty.
See Appendix B. Various requirements have been placed upon Western Desert 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.
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 progressing through the generator interconnection
process. Assuming that Seller continues to provide necessary technical information and
APPLICATION - 5
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 Western Desert and Idaho Power. 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 Facility may
then be designated as a network resource.
12. Seller has selected September 1, 2012, for the Scheduled First Energy
Date and December 1, 2012, as the Scheduled Operation Date. As specified in the
FESA, it is Western Desert's responsibility to have a complete understanding of the
interconnection process and schedules to be able to commit to energy deliveries to
Idaho Power by the Scheduled Operation Date specified in the FESA. The FESA also
specifically states 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 will be assessed.
13. 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 Western Desert for purchases of energy wil be
allowed as prudently incurred expenses for ratemaking purposes.
II. MODIFIED PROCEDURE
14. Idaho Power believes that a hearing is not necessary to consider the
issues presented herein and respectully requests that this Application be processed
APPLICATION - 6
under Modified Procedure, i.e., by written submissions rather than by hearing. RP 201
et seq. If, however, the Commission determines that a technical hearing is required, the
Company stands ready to prepare and present its testimony in such hearing.
iv. COMMUNICATIONS AND SERVICE OF PLEADINGS
15. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
Donovan E. Walker, Senior Counsel
Lisa Nordstrom, Lead Counsel
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
dwalkercæidahopower.com
Inordstromcæidahopower.com
Randy C. Allphin
Energy Contract Administrator
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
rallphincæidahopower.com
V. REQUEST FOR RELIEF
16. 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 Western Desert 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 Western Desert Energy,
LLC, be allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this 2nd day of February 2011.
¿;pø~
DONOVAN E. WALKER
Attorney for Idaho Power Company
APPLICATION - 7
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on the 2nd day of February 2011 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:
Western Desert Energy, LLC
Sandy Sanderson
Western Desert Energy, LLC
1770 West State Street #317
Boise, Idaho 83702
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email sandyscægreenenergywest.com
4á7:.aJ~õñ Walker ~..
APPLICATION - 8
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-11-01
IDAHO POWER COMPANY
ATTACHMENT NO.1
FIR ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
WESTERN DESERT ENERGY, LLC
TABLE OF CONTENTS
Aricle
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
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18
19
20
21
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TITLE
Definitions
No Reliance on Idaho Power
Waranties
Conditions to Acceptance of Energy
Ter and Operation Date
Purchase and Sale of Net Energy
Purchase Prce and Method of Payment
Environmental Attrbutes
Facility and Interconnection
Metering and Telemetry
Records
Operations
Indemnification and Insurance
Force Majeure
Liability; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Goverental Authorization
Commssion Order
Successors and Assigns
Modification
Taxes
Notices
Additional Terms and Conditions
Severabilty
Counterars
Entire Agreement Signatues
Appendix A
AppendixB
AppendixC
Appendix D
Appendix E
I
FIR ENERGY SALES AGREEMENT
(10 aMW or Less)
Project Name: Deser Wind Energy I, LLC
Project Number: 12616700
THIS AGREEMENT, entered into on this ~ day of Se.w.r V,2011 between
WESTERN DESERT ENERGY, LLC (Seller), and IDAHO POWER COMPAN, an Idao corporation
(Idao Power), hereinafter sometimes referred to collectively as "Paries" or individually as "Pary."
WITNESSETH:
WHEREAS, Seller wil design, construct, own, maintai and operate an e1ectnc generation
facility; and
WHEREAS, Seller wishes to sell, and Idao Power is wiling to purchase, firm electnc energy
produced by the Seller's Facilty.
THREFORE, In considertion of the mutual covenants and agreements hereinafter set forth, the
Paries agree as follows:
ARTICLE I: DEFINIONS
As used in this Agreement and the appendices attached hereto, the following terms
shall have the following meanings:
1.1 "Availability Shortfall Pnce" - The curent month's Mid-Columbia Market Energy Cost mius
the curent month's All Hours Energy Pnce specified in pargraph 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 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
i
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 during that
month based upon: (1) each wind tubine's Nameplate Capacity, (2) Suffcient Prme Mover
available for use by each wind tubine durng 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
occurrence and individual wind tubine) lasts for less than 15 minutes, then the event will not be
considered in ths calculation. The Seller shall collect and maintain actual data to support this
calculation and shall keep this 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 asthe
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 current 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 will be O.
1.9 "Designated Dispatch Facility" - Idaho Power's Systems Operations Group, or any subsequent
group designated by Idaho Power.
1.0 "Effective Date" - The date stated in the opening paragraph of this Firm Energy Sales
Agreement representing the date upon which this Firm Energy Sales Agreement was fully
executed by both Paries.
1.1 "Facility" - That electrc generation facility descrbed in Appendix B of this Agreement.
2
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 electrcal system at the Point of Delivery.
1.3 "Forced Outage" - a partial or total reduction of a) the Facilty's capacity to produce and/or
deliver Net Energy to the Point of Deliver, 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 Facility: 1)
equipment failure which was not the result of negligence or lack of preventative maintenance, or
2) responding to a transmission provider curilment 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
electrcal lines required to sere this Facilty. The Paries shall make commercially reasonable
efforts to perorm this unplaned preventative maintenance durng periods of low wind
availability.
1.14 "Heavy Load Hours" - The daily hour 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, Thangiving and Chrstmas.
1. i 5 "Inadverent Energy" - Electric energy Seller does not intend to generate. Inadvertent energy is
more paricularly descrbed in paragraph 7.5 of this Agreement.
1.16 "Interconnection Facilities" - All equipment specified in Idaho Power's Schedule 72.
1. i 7 "Initial Capacity Determination" - The process by which Idaho Power confirms that under
normal or average design conditions the Facility will 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.
i. i 8 "Light Load Hours" - The daily hours beginning at i i :00 pm, ending at 7:00 am Mountain Time
(8 hours), plus all other hours on all Sundays, New Years Day, Memorial Day, Independence
Day, Labor Day, Thankgiving and Chrstmas.
3
1. I 9 "Losses" - The loss of electrcal energy expressed in kilowatt hours (kWh) occurng as a result
of the transformation and transmission of energy between the Meterng Point and the point the
Facility's energy is delivered to the Idaho Power electrcal system. The loss calculation formula
will be as specified in Appendix B of ths Agreement.
1.20 "Market Energy Reference Price" - Eighty-five percent (85%) of the Mid-Columbia Market
Energy Cost.
1.2 i "Material Breach" - A Default (paragraph 19.2. I) subject to paragrph 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.
i .23 "Mechanical 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 Facilty's
Calculated Net Energy Amount for the applicable month. Any damages due as a result of the
Seller falling short of the Mechanical Availability Guarantee for each month shall be determined
in accordance with paragraph 6.4.4.
1.24 "Mechanical Availability Guarantee" shall be as defined in paragraph 6.4.
i .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 Meterng 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 necessar data to administer this Agreeent.
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.
If the Dow Jones Mid-Columbia Index price is discontiued by the reporting agency, both Parties
will mutually agree upon a replacement index, which is similar to the Dow Jones Mid-Columbia
Index. The selected replacement index will be consistent with other similar agreements and a
commonly used index by the electrcal industr.
4
1.28 "Nameplate Capacity" -The full-load electrcal quantities assigned by the designer to a generator
and its prime mover or other piece of electrcal equipment, such as transformers and circuit
breaker, 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 electrc energy produced by the Facility, less Station Use, less Losses,
expressed in kilowatt hour (kWh) delivered to Idaho Power at the Point of Deliver. Subject to
the terms of this Agreement, Seller commits to deliver all Net Energy to Idaho Power at the Point
of Deliver for the full term of the Agreement. Net Energy does not include Inadvertent Energy.
i .30 "Operation Date" - The day commencing at 00:01 hours, Mountain Time, followig 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 facilities are interconnected and the energy from this Facility is delivered to the
Idaho Power electrcal system.
i .32 "Prudent Electrcal Practices" - Those practices, methods and equipment that are commonly and
ordinarily used in electrcal engineerng and operations to operate electrc equipment lawfly,
safely, dependably, effciently and economically.
i .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
and integration of this Facility into the Idaho Power electrcal system as specified within
Schedule 72 and this Agreement.
1.35 "Season" - The three perods identified in paragraph 6.2. i of this Agreement.
5
1.36 "Special Facilities" - Additions or alterations of trsmission and/or distrbution lines and
tranformer as described in Schedule 72.
i .37 "Station Use" - Electrc energy that is used to operate equipment that is auxiliar or otherwse
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
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 "Surlus 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 strctues, 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 porton 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 warants 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 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.
2.2 Seller Independent Expers - All professionals or expers including, but not limited to, engineer,
attorneys, or accountants, that Seller may have consulted or relied on in undertakng the
tranactions contemplated by this Agreement have been solely those of Seller.
6
ARTICLE II: WARIES
3.1 No Waranty by Idaho Power - Any review, acceptance or failure to review Seller's design,
specifications, equipment or facilities shall not be an endorsement or a confiration by
Idaho Power and Idaho Power makes no warranties, expressed or implied, regarding any aspect of
Seller's design, specifications, equipment or facilities, including, but not limited to, safety,
durability, reliability, strength, capacity, adequacy or economic feasibility.
3.2 Qualifyng Facility Status - Seller warants that the Facilty is a "Qualifying Facilty," as that term
is used and defined in 18 CFR 292.201 et seq. After initial qualification, Seller will tae such
steps as may be required to maintain the Facility's Qualifying Facilty status durng the ter of
this Agreement and Seller's failure to maintain Qualifying Facilty status wil be a Material
Breach of this Agreement. Idaho Power reserves the right to review the Facilty's Qualifying
Facility status and associated support and compliance documents at 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 of Idaho Power's acceptance of deliveries of
energy from the Seller under this Agreement, Seller shall:
4.1. i Submit proof to Idaho Power that all licenses, permits or approvals necessary for Seller's
operations have been obtained from applicable federal, state or local authorities,
including, but not limited to, evidence of compliance with Subpar B, 18 CFR 292.20 i et
seq. as a cerified Qualifyng Facility.
4. 1.2 Opinion of Counsel - Submit to Idaho Power an Opinion Letter signed by an attorney
admitted to practice and in good standing in the State of Idaho providing an opinion that
Seller's licenses, perits and approvals as set forth in paragraph 4.1. i above are legally
and validly issued, are held in the name of the Seller and, based on a reasonable
independent review, counsel is of the opinion that Seller is in substantial compliance with
said permits as of the date of the Opinion Letter. The Opinion Letter will be in a form
7
acceptable to Idaho Power and will acknowledge that the attorney renderng the opinion
undertands that Idaho Power is relying on said opinion. Idaho Power's acceptance of the
form will not be uneasonably witheld. The Opinion Letter will be govered by and
shall be interreted in accordance with the legal opinion accord of the Amercan Bar
Association Section of Business Law (1991).
4.1.3 Initial Capacity Deternation - Submit to Idaho Power such data as Idaho Power may
reasonably require to peorm the Initial Capacity Deternation. Such data will include
but not be limited to, Nameplate Capacity, equipment specifications, prime mover data,
resource characterstics, normal and/or average operating design conditions and Station
Use data. Upon receipt of this information, Idaho Power will review the provided data
and if necessar, request additional data to complete the Initial Capacity Determnation
withn a reasonable time.
4.1.3.1 If the Maximum Capacity specified in Appendix B of this Agreement and the
cumulative manufacture Nameplate Capacity rating of the individual generation
units at this Facility is less than 10 MW, the Seller shall submit detailed,
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 unts to be installed at this Facility is less than 10 MW, it
will be deemed that the Seller has satisfied the Initial Capacity Determination for
this Facility.
4.1.4 Nameplate Capacity - Submit to Idaho Power manufacturer's and engineering
documentation that establishes the Nameplate Capacity of each individual generation unit
that is included within this entire Facility. Upon receipt of this data, Idaho Power shall
review the provided data and determine if the Nameplate Capacity specified is reasonable
based upon the manufacturer's specified generation ratings for the specific generation
units.
8
4.1.5 Engineer's Certifications - Submit an executed Engineer's Certfication of Design &
Constrction Adequacy and an Engineer's Cerification of Operations and Maintenance
(O&M) Policy as described in Commission Order No. 21690. These cerificates will be
in the form specified in Appendix C but may be modified to the extent necessar to
recognize the different engieerng disciplines providing the certificates.
4.1.6 Insurance - Submit wrtten proof to Idaho Power of all insurance required in Aricle XIII.
4.1.7 Interconnection - Provide wrtten confirmation from Idaho Power's delivery business
unit that Seller has satisfied all interconnection requirements.
4.1.8 Network Resource Designation - The Seller's Facility has been designated as a network
resource capable of deliverng 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
initial transmission capacity request.
a) Results of the initial transmission capacity request are known and acceptable
to the Seller.
b) Seller acknowledges responsibility for all interconnection costs and any costs
associated with acquirng 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 servce tertory, in
addition to the above requirements, the Seller must provide evidence that the
Seller has acquired firm transmission capacity from all required transmitting
entities to deliver the Facilty's energy to an acceptable point of delivery on
the Idaho Power electrcal system.
4.1.9 Written Acceptance - Request and obtain wrtten confirmation from Idaho Power that all
conditions to acceptance of energy have been fulfilled. Such wrtten confirmation shall be
provided within a commercially reasonable time following the Seller's request and wil
not be unreasonably withheld by Idaho Power.
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ARTICLE V: TERM AN OPERATION DATE
5.1 Ter - Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective
on the date first wrtten and shall continue in full force and effect for a perod of twenty (20)
Contract Year 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) Commssion approval of this Agreement in a form acceptable to Idaho Power has
been received.
c) Seller has demonstrated to Idaho Power's satisfaction that the Facility is complete and
able to provide energy in a consistent, reliable and safe maner.
d) Seller has requested an Operation Date from Idaho Power in a wrtten format.
e) Seller has received wrtten confirmation from Idaho Power of the Opertion Date.
This confirmation wil not be uneasonably withheld by Idaho Power.
5.3 Operation Date Delay - Seller shall cause the Facility to achieve the Operation Date on or before
the Scheduled Operation Date. Delays in the interconnection and transmission network upgrade
study, design and constrction process that are not Force Majeure events accepted by both
Partes, shall not prevent Delay Liquidated Damages from being due and owing as calculated in
accordance with this Agreement.
5.3. i If the Operation Date occur 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:
Delay Liquidated Damages are equal to ((Curent month's Initial Year Net
Energy Amount as specified in paragraph 6.2.1 divided by the number of days in
the curent month) multiplied by the number of days in the Delay Period in the
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current month) multiplied by the current month's Delay Price.
5.3.2 If the Operation Date does not occur within ninety (90) days following the Scheduled
Operation Date, the Seller shall pay Idaho Power Delay Liquidated Damages, in addition
to those provided in pargraph 5.3.1, calculated as follows:
Forty-five dollar ($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 will be a Material Breach and Idaho Power may ternate this
Agreement at any time until the Seller cures the Material Breach. Additional Delay Liquidated
Damages beyond those calculated in 5.3. i and 5.3.2 will be calculated and payable using the
Delay Liquidated Damage calculation descrbed 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 Materal 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 billngs 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.
5.6 The Paries agree that the damages Idaho Power would incur due to delay in the Facility
achievig the Operation Date on or before the Scheduled Operation Date would be diffcult or
impossible to predict with certainty, and that the Delay Liquidated Damages are an appropriate
approximation of such damages.
5.7 Prior to the Seller executing this Agreement, the Seller shall have agreed to and executed a Letter
of Understanding with Idaho Power that contains at a minimum the following requirements:
a) Seller has fied for interconnection and is in compliance with all payments
and requirements of the interconnection process.
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b) Seller has provided all information required to enable Idao Power to file an
initial transmission capacity request.
5.8 Within thir (30) days of the date of a final non-appealable Commission Order as specified in
Aricle XXI approving this Agreement; Seller shall post liquid security ("Delay Security") 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 will be a Material Breach of this
Agreement and Idaho Power may terinate this Agreeent.
5.8.1 Delay Securty The greater of forty-five dollar ($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 thee 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 paragrph 7.3 for
each of those three months.
5.8.1. In the event (a) Seller provides IdahoPower with certification that (1) a
generation interconnection agreement specifyng a schedule that will 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
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 ter and conditions of the generation
interconnection agreement, the Delay Securty calculated in accordance with
paragraph 5.8.1 will 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. and subsequently (I) at Seller's request, the generation
interconnection agreement specified in paragraph 5.8.1.1 is revised and as a
result the Facility will not achieve its Operation Date by the Scheduled Opertion
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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 will be subject to reinstatement and will be due and owing within
five (5) business days from the date Idaho Power requests reinstatement. Failure
to timely reinstate the Delay Securty will be a Materal Breach of ths
Agreement.
5.8.2 Idaho Power shall release any remaining securty posted hereunder after all
calculated Delay Liquidated Damages are paid in ful to Idaho Power and the
earlier of: 1) thiry (30) days after the Operation Date has been achieved, or 2)
sixty (60) days after the Agreement has been termnated.
ARTICLE VI: PURCHASE AN SALE OF NET ENERGY
6. i Deliver and Acceptance of Net Energy - Except when either Pary's performance is excused as
provided herein, Idaho Power will purchase and Seller will sell all of the Net Energy to
Idaho Power at the Point of Delivery. All Inadvertent Energy produced by the Facility will also
be delivered by the Seller to Idaho Power at the Point of Delivery. At no time will the total
amount of Net Energy and/or Inadverent 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 Availabilty Guaantee.
6.2. i Initial Year Monthly Net Energy Amounts:
Month kWh
Season i
March
April
May
1,050,000
1,250,000
860,000
Season 2
July
August
November
December
980,000
840,000
1,300,000
1,250,000
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Season 3
June
September
October
Janua
Februar
910,000
920,000
1,400,000
1,200,000
970,000
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 (i 0%) 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 Availability Guarantee - Afer the Operational Date has been established, the Facility
shall achieve a minimum monthly Mechancal Availability of eighty-five percent (85%) for the
Facility for each month during the full term of this Agreement (the "Mechanical Availability
Guarantee"). Failure to achieve the Mechanical Availability Guarantee shall result in
Idaho Power calculating damages as specified in paragraph 6.4.4.
6.4. i At the same time the Seller provides the Monthly Power Production and Availability
Report (Appendix A), the Seller shall provide and cerify the calculation of the Facility's
current month's Mechanical Availability. 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 thee (3) year detailed documentation supportng
the monthly calculation of the Facility's Mechanical Availabilty.
6.4.3 Idaho Power shall have the right to review and audit the documentation supporting the
calculation of the Facility's Mechanical Availabilty at reasonable times at the Seller's
offces.
6.4.4 If the current 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 Availabilty Shortfall
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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 thiy (30) days
of the date of the invoice.
ARTICLE VII: PURCHASE PRICE AN METHOD OF PAYMENT
7.1 Heavy Load Puchase Price - For all Net Energy received durng Heavy Load Hours,
Idaho Power will pay the non-levelized energy price in accordace with Commission Order
31025 adjusted in accordance with Commssion Order 30415 for Heavy Load Hour Energy
deliveries, adjusted in acçordance with Commission Order 30488 for the wind integration charge,
and with seasonalization factors applied:
Year
Season i - (73.50 %)
Mils/kWh
Season 2 - (120.00 %)
Mils/kWh
Season 3 - (100.00 %)
MilslWh
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
40.52
42.80
45.32
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
66.15
69.87
74.00
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
55.12
58.24
61.66
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
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2033 93.19 156.26 129.13
7.2 Light Load Purchase Prce - For all Net Energy received durg Light Load Hours, Idaho Power
will pay the non-levelized energy price in accordance with Commission Order 31025 adjusted in
accordance with Commssion Order 30415 for Light Load Hour Energy deliveries, adjusted in
accordance with Commssion Order 30488 for the wid integration charge, and with
seasonalization factors applied:
Year
Season 1 - (73.50 %)
MilslkWh
Season 2 - (120.00 %)
MilslkWh
Season 3 - (100.00 %)
MilslkWh
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
35.59
37.88
40.40
42.79
45.37
48.13
49.72
51.28
52.97
54.65
56.37
58.41
60.54
62.74
65.04
67.43
69.45
71.55
73.70
76.03
78.52
81.87
84.80
87.84
58.11
61.84
65.95
69.86
74.06
78.91
81.73
84.50
87.51
90.47
93.53
97.16
100.93
104.85
108.92
113.16
116.76
120.47
124.29
128.24
132.31
137.77
142.56
147.52
48.42
51.54
54.96
58.22
61.72
65.48
67.64
69.76
72.07
74.35
76.86
79.88
83.03
86.29
89.69
93.22
96.21
99.30
102.49
105.78
109.17
113.73
117.72
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 integration charge, and with
seasonalization factors applied:
16
Season 1 - (73.50 %)Season 2 - (120.00 %)Season 3 - (100.00 %)
Year Mils/kWh Mils/Wh Mils/Wh
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 61.4 102.01 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 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 Inadverent Energy-
7.5.1 Inadvertent Energy is electrc energy produced by the Facility, expressed in kWh,
which the Seller delivers to Idaho Power at the Point of Deliver that exceeds 10,000
kW multiplied by the hours in the specific month in which the energy was delivered.
(For example Januar contains 744 hour. 744 hour 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.)
17
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 will accept Inadvertent Energy that does not exceed the Maximum
Capacity Amount but will not purchase or pay for Inadverent 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, will be disbursed to the Seller within thir (30 days of the date which Idaho Power
receives and accepts the documentation of the monthly Mechancal Available Guarantee 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, ters and conditions contained in this Agreement will be constred in accordance with
Idaho Power Company v. Idaho Public Utilities Commission and Afton Energy Inc., 107 Idao
781, 693 P.2d 427 (1984), Idaho Power Company v. Idaho Public Utilities Commission, 107
Idaho 1122,695 P.2d 1 261 (1985), Afton Energy Inc, v. Idaho Power Company, i 1 i Idao 925,
729 P.2d 400 (1986), Section 2 i 0 of the Public Utility Regulatory Policies Act of i 978 and 18
CFR §292.303-308.
ARTICLE VII: ENVIRONMENTAL ATTRIUTES
8.1 Seller retains ownership under this Agreement of green tags and renewable energy certficates
(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 will design, constrct, 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 Deliver for the full
term of the Agreement.
18
9.2 Interconnection Facilities - Except as specifically provided for in this Agreement, the required
Interconnection Facilities wil be in accordace 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, including but not limited to
initial costs incured by Idaho Power for equipment costs, installation costs and ongoing monthly
Idaho Power operations and maintenance expenses.
ARTICLE X: METERIG AN TELEMETRY
10.1 Metering - Idaho Power shall, for the account of Seller, provide, install, and maintain Meterig
and Telemetr Equipment to be located at a mutully agreed upon location to record and measure
power flows to Idaho Power in accordance with ths Agreement and Schedule 72. The Meterng
Equipment will be at the location and the tye required to measure, record and report the
Facilty's Net Energy, Station Use, Inadvertent Energy and maximum energy deliveres (kW) at
the Point of Delivery in a manner to provide Idaho Power adequate energy measurement data to
administer this Agreement and to integrate this Facilty's energy production into the Idaho Power
electrical system.
10.2 Telemetr - Idaho Power will install, operate and maintain at Seller's expense metering,
communications and telemetr equipment which will be capable of providing Idaho Power with
continuous instantaneous telemetr 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
1 1.1 Maintenance of Records - Seller shall maintain at the Facility or such other location mutully
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.
i 1.2 Inspection - Either Pary, after reasonable notice to the other Pary, shall have the right, durg
normal business hour, to inspect and audit any or all generation, Net Energy, Station Use,
19
Inadvertent Energy and maximum generation (kW) records peraining 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 accordance with
Appendix A of this Agreement.
12 .2 Energy Acceptance -
12.2.1 Idaho Power shall be excused from accepting and paying for Net Energy or accepting
Inadverent Energy which would have otherse been produced by the Facility and
delivered by the Seller to the Point of Deliver, 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,
beginning with the twenty-first day of such interption, curailment or reduction, Seller
will be deemed to be deliverng 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
will notify Seller when the interrption, curailment or reduction is terminated.
12.2.2 If, in the reasonable opinion of Idaho Power, Seller's operation of the Facilty or
Interconnection Facilities is unsafe or may otherwse adversely affect Idaho Power's
equipment, personnel or serce to its customers, Idaho Power may temporarily
disconnect the Facility from Idaho Power's transmission/distribution system as specified
within Schedule 72 or take such other reasonable steps as Idaho Power deems
appropriate.
12.2.3 Under no circumstances will the Seller deliver Net Energy and/or Inadvertent Energy
from the Facility to the Point of Deliver 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 will be a Material Breach of this Agreement.
20
12.2.4 If Idaho Power is unable to accept the energy from this Facility and is not excused from
accepting the Facility's energy, Idaho Power's damages shall be limited to only the value
of the estimated energy that Idaho Power was unable to accept. Idaho Power will have
no responsibility to pay for any other costs, lost revenue or consequential daages the
Facility may incur.
12.3 Scheduled Maintenance - On or before Januar 31st of each calendar year, Seller shall submit a
wrtten proposed maintenance schedule of significant Facility maintenance for that calenda year
and Idaho Power and Seller shall mutually agree as to the acceptabilty of the proposed schedule.
The Parties determination as to the acceptabilty of the Seller's timetable for scheduled
maintenance will take into consideration Prdent Electrcal Practices, Idaho Power system
requirements and the Seller's preferred schedule. Neither Par shall unreasonably 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 Facility maintenance schedules such that they occur simultaneously.
12.5 Contact Prior to Curilment - Idaho Power will make a reasonable attempt to contact the Seller
prior to exercising its rights to interrpt interconnection or curail deliveries from the Seller's
Facility. Seller understands that in the case of emergency circumstances, real time operations of
the electrcal system, and/or unplaned events Idaho Power may not be able to provide notice to
the Seller prior to interption, curailment, or reduction of electrcal energy deliveres to
Idaho Power.
ARTICLE XII: INEMNIFICATION AN INSURNCE
13.1 Indemnification - Each Par shall agree to hold harless and to indemnify the other Party, its
offcers, agents, affliates, subsidiaries, parent company and employees against all loss, damage,
expense and liability to third persons for injur to or death of person or injur to propery,
proximately caused by the indemnifying Part's (a) construction, ownership, operation or
maintenance of, or by failure of, any of such Part's works or facilities used in connection with
21
this Agreement, or (b) negligent or intentional acts, errors or omissions. The indemifyng Par
shall, on the other Par's request, defend any suit asserting a claim covered by this indemnity.
The indemifyng Par shall pay all documented costs, including reasonable attorney fees that
may be incured by the other Par in enforcing this indemnity.
13.2 Insurance - Durng the ter of this Agreement, Seller shall secure and continuously car the
following insurance coverage:
13.2.1 Comprehensive General Liability Insurance for both bodily injur and proper damage
with limits equal to $ i ,000,000, each occurrence, combined single limit. The deductible
for such insurance shall be consistent with curent Insurance Industr Utility practices for
similar property.
13.2.2 The above insurance coverage shall be placed with an insurance company with an A.M.
Best Company rating of A- or better and shall include:
(a) An endorsement naming Idaho Power as an additional insured and loss payee as
applicable; and
(b) A provision stating that such policy shall not be canceled or the limits of liability
reduced without sixty (60) days prior wrtten notice to Idaho Power.
13.3 Seller to Provide Cerificate of Insurance - As required in paragraph 4.1.6 herein and anually
thereafter, Seller shall fuish Idaho 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
paragraph 13.2 shall lapse for any reason, Seller will immediately notify Idaho Power in wrting.
The notice will advise Idaho Power of the specific reason for the lapse and the steps Seller is
takg to reinstate the coverage. Failure to provide this notice and to expeditiously reinstate or
replace the coverage will constitute a Materal Breach of this Agreement.
22
ARTICLE XIV: FORCE MAEUR
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 strfe, stres and other labor disturbances,
earhquakes, fires, lightning, epidemics, sabotage, or changes in law or regulation occurng after
the Effective Date, which, by the exercise of reasonable foresight such par could not reasonably
have been expected to avoid and by the exercise of due diligence, it shall be unable to overcome.
If either Par 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:
(1) The non-performng Party shall, as soon as is reasonably possible after the
occurence of the Force Majeure, give the other Par wrtten notice describing
the paricular of the occurence.
(2) The suspension of perormance shall be of no greater scope and of no longer
duration tha is required by the event of Force Majeure.
(3) No obligations of either Pary which arose before the occurrence causing the
suspension of perormance and which could and should have been fuly
performed before such occurence shall be excused as a result of such
occurrence.
ARTICLE XV: LIAILITY; DEDICATION
i 5. i Limitation of Liability. Nothing in this Agreement shall be construed to create any duty to, any
standard of care with reference to, or any liabilty to any person not a Par 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.
23
15.2 Dedication. No undertaking by one Par to the other under any provision of this Agreement
shall constitute the dedication of that Par's system or any portion thereof to the Part 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 otherise, the duties, obligations and
liabilities of the Paries are intended to be several and not joint or collective. Nothing contained
in this Agreement shall ever be constred to create an association, trst, parership or joint
ventue or impose a trst or parnerhip duty, obligation or liability on or with regard to either
Part. Each Par shall be individually and severally liable for its own obligations under ths
Agreement.
ARTICLE XVII: WAIVR
17.1 Any waiver at any time by either Part of its rights with respect to a default under this Agreement
or with respect to any other matters arsing in connection with this Agreement shall not be
deemed a waiver with respect to any subsequent default or other matter.
ARTICLE XVII: CHOICE OF LAWS AND VENUE
18.1 Ths Agreement shall be constred and interreted in accordance with the laws of the State of
Idaho without reference to its choice oflaw provisions.
18.2 Venue for any litigation arsing out of or related to this Agreement will lie in the Distrct Cour of
the Four Judicial Distrct of Idaho in and for the County of Ada.
ARTICLE XIX: DISPUTES AN DEFAULT
19.i Disputes - All disputes related to or arsing under this Agreement, including, but not limited to,
the interretation of the ters and conditions of this Agreement, will be submitted to the
Commission for resolution.
24
19.2 Notice of Default
19.2.1 Defaults. If either Part fails to perorm any of the terms or conditions of this
Agreement (an "event of default"), the non-defaulting Par shall cause notice in
wrting to be given to the defaulting Par, specifyng the manner in which such
default occured. If the defaulting Par shall fail to cure such default with the sixty
(60) days after serce of such notice, or if the defaulting Pary reasonably
demonstrates to the other Part that the default can be cured withn a commercially
reasonable time but not within such sixty (60) day perod and then fails to diligently
pursue such cure, then, the non-defaulting Pary may, at its option, terminate this
Agreement and/or purue its legal or equitable remedies.
19.2.2 Material Breaches - The notice and cure provisions in paragraph 19.2.1 do not apply
to defaults identified in this Agreement as Material Breaches. Materal Breaches must
be cured as expeditiously as possible following occurrence of the breach.
19.3 Securty for Performance - Prior to the Operation Date and thereafter for the full ter of this
Agreement, Seller will provide Idaho Power with the following:
19.3.1 Insurance - Evidence of compliance with the provisions of paragraph 13.2. If Seller
fails to comply, such failure will 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 will
supply Idaho Power with a Cerfication of Ongoing Operations and Maintenance
(O&M) from a Registered Professional Engieer 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 certficate wil be an event of default. Such a default
may only be cured by Seller providing the required cerificate; and
19.3.3 Licenses and Permits - Dung the full ter of this Agreement, Seller shall maintain
compliance with all perits and licenses described in pargraph 4.1. i of this
25
Agreement. In addition, Seller will supply Idaho Power with copies of any new or
additional permits or licenses. At least ever fifth Contract Year, Seller will update the
documentation described in Paragraph 4. i .1. If at any time Seller fails to maintain
compliance with the permits and licenses described in paragraph 4.1.1 or to provide
the documentation required by this paragraph, such failure will 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: GOVERNENTAL AUTHORIZATION
20.1 This Agreement is subject to the jursdiction of those governental agencies havig control over
either Par of this Agreement.
ARTICLE XXI: COMMISSION ORDER
21. 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 puroses.
ARTICLE XXII: SUCCESSORS AN ASSIGNS
22.1 This Agreement and all of the ters and provisions hereof shall be binding upon and inure to the
benefit of the respective successors and assigns of the Parties hereto, except that no assignent
hereof by either Par shall become effective without the wrtten consent of both Paries being
first obtained. Such consent shall not be uneasonably withheld. Notwithstading the foregoing,
any par which Idaho Power may consolidate, or into which it may merge, or to which it may
conveyor transfer substantially all of its electrc utility assets, shall automatically, without fuher
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. Ths aricle shall not prevent a financing entity
with recorded or secured rights from exercising all rights and remedies available to it under law
26
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 wrting and signed by both Paries
and subsequently approved by the Commission.
ARTICLE XXIV: TAXES
24. i Each Par shall pay before delinquency all taxes and other goverental charges which, if failed
to be paid when due, could result in a lien upon the Facility or the Interconnection Facilities.
ARTICLE XXV: NOTICES
25.1 All wrtten notices under this Agreement shall be directed as follows and shall be considered
delivered when faxed, e-mailed and confirmed with deposit in the U.S. Mail, first-class, postage
prepaid, as follows:
To Seller:Orginal document to:
Wester Deser Energy, LLC
1770 W. State Street #317
Boise, Idaho 83702
541-521-5549
E-mail:sandys~greenenergyest.com
CoPY of document to:
Peter Richardson
515 N 27th Street
Boise, Idaho 83702
208-938-7900
E-mail: peter~richardsonandolear.com
27
To Idaho Power:Orginal 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:
Cogenertion and Small Power Production
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
E-mail: rallphin~idahopower.com
Either Par may change the contact person and/or address information listed above, by providing wrtten
notice from an authorized person representing the Part.
ARTICLE XXVI: ADDITIONAL TERMS AN CONDITIONS
26.1 Ths Agreement includes the following appendices, which are attached hereto and included by
reference:
Appendix A
AppendixB
AppendixC
AppendixD
AppendixE
Monthly Power Production and Availability 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 ters or provisions and this Agreement shall be constred
in all other respects as if the invalid or unenforceable ter or provision were omitted.
ARTICLE XXVII: COUNERPARTS
28.1 This Agreement may be executed in two or more counterars, each of which shall be deemed an
original but all of which together shall constitute one and the same instrent.
28
ARTICLE XXIX: ENTIR AGREEMENT
29.1 This Agreement constitutes the entire Agreement of the Paries concering the subject matter
By
Dated
hereof and supersedes all prior or contemporaneous oral or wrtten agreements between the
Paries concerning the subject matter hereof.
IN WITNSS WHEREOF, The Parties hereto have caused this Agreement to be executed
in their respective names on the dates set forth below:
Idaho Power Company Western Desert Energy, LLC
Lisa A Grow
Sr. Vice President, Power Supply
/'Z-t)'U Dated / -:J ~ -etc!l/i .
"Idaho Power""Seller"
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APPENDIX A
A -I MONTHLY POWER PRODUCTION AN AVAILABILITY REPORT
At the end of each month the following required documentation will 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 will 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 Meterng Equipment and/or any other required
energy measurements to adequately administer this Agreeent. This document shall be the document to
enable Idaho Power to begi the energy payment calculation and payment process. The meter readings
on this report shall not be used to calculate the actul payment, but instead wil be a check of the
automated meter reading information that will be gathered as described in item A-2 below:
This report shall also include the Seller's calculation of the Mechanical Availability.
30
Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AN AVAILABILITY REPORT
Month Year
Project Name Project Number:
Address Phone Number:
City State Zip
MeteredNet Facilty
Output
Station
Usage
Station
Usage Maxium Generation
Meter Number:
End of Month kWh Meter Reading:
Beginning of Month kWh Meter:
kW
Difference:
Times Meter Constant:Net Generation
kWh for the Month:
Metered Demand:
Mechanical Availabilty Guarantee
Seller Calculated Mechanical Availabilty
As specifed in this Agreement, the Seller shall include with this monthly report a summary statement of the
Mechanical Availabilty ofthis 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
31
A-2 AUTOMATED METER READING COLLECTION PROCESS
Monthly, Idaho Power will use the provided Metering and Telemetr equipment and processes to collect
the meter reading information from the Idaho Power provided Meterng 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 will include but not be limited to energy production, Station Use, the
maximum generation (kW) and any other required energy measurements to adequately admnister 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 i -800-635- i 093 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
Planed and Unplaned Project outages
Call 1-800-345-1319 and leave the following information:
. Project Identification - Project Name and Project Number
. Approximate time outage occurred
. Estimated day and time of project coming back online
Seller's Contact Information
24-Hour Project Operational Contact
Name:
Telephone Number:
Cell Phone:
Sandy Sanderson
541-521-5549
541-521-5549
Project On-site Contact information
Telephone Number:
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APPENDIXB
FACILITY AND POIN OF DELIVRY
Project Name: Western Desert Wind Project 1
Project Number: 12616700
B-1 DESCRIPTION OF FACILITY
The Facility will consist ofthree (3) wind tubines with a combined capacity of five (5) MW that
will not exceed the Maximum Capacity Amount as specified in item B-4. It is anticipated that the
Seller will use GEV wind turbines for this Facility.
At the time this Agreement was executed the Seller had not a made fmal selection of the tubine
manufactuer. Upon final selection of the wid tubine by the Seller, the Seller must provide
detailed specifications to Idaho Power to be reviewed and accepted in the Generation
Interconnection process. Upon acceptance of the specific wind tubines (not exceeding the
Maximum Capacity Amount) by the Generation Interconnection process, the Seller shall provide
the detailed wind tubine specifications to be included in this Agreement.
The V AR capabilty of the GEV tubine - Leading 0.95, Lagging 0.95
B-2 LOCATION OF FACILITY
Near: Oreana, Idaho
Township: 3S Range: 5W Section: 31 County: Owyhee
Description of Interconnection Location: On Idaho State land along Cow Creek County Road,
pole number 44/001510
Nearest Idaho Power Substation: Gem Substation located near Maring on the other side of the
Snake River.
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B-3 SCHEDULED FIRST ENERGY AN OPERATION DATE
Seller has selected September 1, 2012 as the Scheduled First Energy Date.
Seller has selected December 1, 2012 as the Scheduled Operation Date.
In makng these selections, Seller recognizes that adequate testing of the Facilty and completion
of all requirements in paragraph 5.2 of this Agreeent must be completed prior to the project
being granted an Operation Date.
B-4 MAXIMU CAPACITY AMOUN:
This value will be ~ MW which is consistent with the value provided by the Seller to Idaho Power
in accordance with Schedule 72. This value is the maximum energy (MW) that potentially could
be delivered by the Seller's Facility to the Idaho Power electrcal system at any moment in time.
At the time this Agreement was executed the Seller had requested only 5 MW of capacity in the
interconnection and transmission capacity process. Prior to the project deliverng energy that
exceeds 5 MW, the Seller must request and be granted additional capacity up to but not exceeding
5 MW in both interconnection and trsmission capacity by Idaho 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 will the Nameplate Capacity of this Facility exceed 25 MW. If
the installed capacity is less than the Maximum Capacity Amount at the end of the first Contract
Year, the Maximum Capacity Amount will be adjusted downward to reflect the actual nameplate
rating of the wind turbines installed. Ths revised Maximum Capacity Amount will then remain
in effect for the remaining term of this Agreement.
B-5 POIN OF DELIVRY
"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 electrcal system. Schedule 72 will determine
the specific Point of Deliver for this Facility. The Point of Delivery identified by Schedule 72
wil become an integral part of this Agreement.
34
B-6 LOSSES
If the Idaho Power Meterng equipment is capable of measurng the exact energy deliveries by the
Seller to the Idaho Power electrical system at the Point of Deliver, no Losses will be calculated
for this Facility. If the Idaho Power Meterng equipment is unable to measure the exact energy
deliveries by the Seller to the Idaho Power electrcal system at the Point of Delivery, a Losses
calculation wil be established to measure the energy losses (kWh) between the Seller's Facility
and the Idaho Power Point of Deliver. This loss calculation will be initially set at 2% of the
kWh energy production recorded on the Facility generation meterng equipment. At such time as
Seller provides Idaho Power with the electrcal equipment specifications (transformer loss
specifications, conductor sizes, etc.) of all of the electrcal equipment between the Facility and the
Idaho Power electrcal system, Idaho Power will configue a revised loss calculation formula to
be agreed to by both paries and used to calculate the kWh Losses for the remaining ter of the
Agreement. If at any time durng the ter of this Agreement, Idaho Power determines that the
loss calculation does not correctly reflect the actual kWh losses attrbuted to the electrcal
equipment between the Facility and the Idaho Power electrcal system, Idaho Power may adjust
the calculation and retroactively adjust the previous months kWh loss calculations.
B-7 METERING AN TELEMETRY
Schedule 72 will deterine the specific meterng and telemetr requirements for this Facility. At
the minimum, the Meterng Equipment and Telemetr equipment must be able to provide and
record hourly energy deliveries to the Point of Deliver and any other energy measurements
required to administer this Agreement. These specifications wil include but not be limited to
equipment specifications, equipment location, Idaho Power provided equipment, Seller provided
equipment, and all costs associated with the equipment, design and installation of the
Idaho Power provided equipment. Seller will 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
35
Idaho Power with continuous instantaneous information on the Facilities energy production.
Idaho Power provided equipment will be owned and maintained by Idaho Power, with total cost
of purchase, installation, operation, and maintenance, including administrative cost to be
reimbursed to Idaho Power by the Seller. Payment of these costs will be in accordance with
Schedule 72 and the total meterng cost will be included in the calculation of the Monthly
Operation and Maintenance Charges specified in Schedule 72.
B-8 NETWORK RESOURCE DESIGNA nON
Idaho Power cannot accept or pay for generation from this Facilty until a Network Resource
Designation ("NRD") application has been accepted by Idaho Power's Deliver business unit.
Federal Energy Regulatory Commission ("FERC") rules require Idaho Power to prepare and
submit the NR. Because much of the information Idaho Power needs to prepare the NR is
specific to the Seller's Facilty, Idaho Power's ability to fie the NRD in a timely maner is
contingent upon timely receipt of the required information from the Seller. Prior to Idaho Power
beginning the process to enable Idaho Power to submit a request for NR status for this Facility,
the Seller shall have completed all requirements as specified in Paragraph 5.7 of this Agreement.
Seller's failure to provide complete and accurate information in a timely manner can
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.
36
APPENDIXC
ENGINER'S CERTIFICATION
OF
OPERATIONS & MAINENANCE POLICY
The undersigned , on behalf of hirnelf/erself and
, hereinafter collectively refered to as "Engineer," hereby states and cerifies to the Seller as
follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter "Agreement," between
Idaho Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No. and is hereinafter refered to as
the "Project."
4. That the Project, which is commonly known as the Project, is located in
Section _ Township Rage , Boise Merdian, County, Idaho.
5. That Engineer recognizes that the Agreement provides for the Project to fuish electrcal energy
to Idaho Power for a _ year perod.
6. That Engineer has substantial experence 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 supervsed the review of the Policy for Operation and
Maintenance ("O&M") for this Project and it is his professional opinion that, provided said Project has
been designed and built to appropriate standards, adherence to said O&M Policy will result in the
37
Project's producing at or near the design electrcal output, effciency and plant factor for a _ year
period.
9. That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement,
is relying on Engineer's representations and opinions contained in this Statement.
10. That Engineer cerfies that the above statements are complete, tre and accurate to the best of
hislher knowledge and therefore sets hislher hand and seal below.
By
(P .E. Stamp)
Date
38
APPENDIXC
ENGINER'S CERTIFICATION
OF
ONGOING OPERATIONS AN MAINENANCE
The underigned , on behalf of himself/herelf
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 cogenertion or small power production project which is the subject of the Agreement
and this Statement is identified as IPCo Facility No. and hereinafter referrd to as the
"Proj ect".
4. That the Project, which is commonly known as the Project, is located in
Section _ Township Rage , Boise Merdian, County, Idaho.
5. That Engineer recognizes that the Agreement provides for the Project to fuish electrcal energy
to Idaho Power for a _ year perod.
6. That Engineer has substantial experience in the design, constrction and operation of electrc
power plants of the same type as this Proj ect.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
39
8. That Engieer has made a physical inspection of said Project, its operations and maintenance
records since the last previous certified inspection. It is Engineer's professional opinion, based on the
Project's appearance, that its ongoing O&M has been substantially in accordance with said O&M Policy;
that it is in reasonably good operating condition; and that if adherence to said O&M Policy continues, the
Project will continue producing at or near its design electrcal output, effciency and plant factor for the
remainig year of the Agreement.
9. That Engineer recognzes that Idaho Power, in accordance with paragraph 5.2 of the Agreement,
is relying on Engineer's representations and opinions contained in this Statement.
10. That Engineer certfies that the above statements are complete, tre and accurate to the best of
his/her knowledge and therefore sets his/her hand and seal below.
By
(P .E. Stap)
Date
40
APPENDIXC
ENGINER'S CERTIFICATION
OF
DESIGN & CONSTRUCTION ADEQUACY
The underigned , on behalf of himself/herself and
hereinafter collectively refered to as "Enginee", hereby states and
certifies to Idaho Power as follows:
1.
2.
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Firm Energy Sales Agreement, hereinafter "Agreement",
between Idaho Power as Buyer, and as Seller, dated ~
3.That the cogeneration or small power production project, which is the subject of the
Agreement and this Statement, is identified as IPCo Facility No
refered to as the "Project".
and is hereinafter
4.That the Project, which is commonly known as the Project, is located in
Section _ Township Range , Boise Merdian,County, Idaho.
5.That Engineer recognizes that the Agreement provides for the Project to fuish electrcal
energy to Idaho Power for a _ year period.
6.That Engineer has substantial experence in the design, constrction and operation of
electrc power plants of the same tye as this Project.
7.That Engineer has no economic relationship to the Design Engineer of this Project and
has made the analysis of the plans and specifications independently.
8.That Engineer has reviewed the engineering design and constrction of the Project,
including the civil work, electrcal work, generating equipment, prime mover conveyance system, Seller
fuished Interconnection Facilities and other Project facilities and equipment.
41
9. That the Project has been constrcted in accordance with said plans and specifications, all
applicable codes and consistent with Prudent Electrcal Practices as that ter is described in the
Agreement.
10.That the design and constrction of the Project is such that with reasonable and prudent
operation and maintenance practices by Seller, the Project is capable of perorming in accordance with the
terms of the Agreement and with Prudent Electrcal Practices for a _ year period.
11.That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the
Agreement, in interconnecting the Project with its system, is relying on Engineer's representations and
opinions contained in this Statement.
12. That Engineer certifies that the above statements are complete, tre and accurate to the
best ofhislher knowledge and therefore sets hislher hand and seal below.
By
(P.E. Stamp)
Date
42
APPENDIXD
FORMS OF LIQUID SECURTY
The Seller shall provide Idaho Power with commercially reasonable securty instrents such as Cash
Escrow Securty, Guarantee or Letter of Credit as those ters are defined below or other forms ofliquid
financial securty that would provide readily available cash to Idaho Power to satisfy the Delay Securty
requirement and any other securty requirement within this Agreement.
For the purose of this Appendix D, the term "Credit Requirements" shall mean acceptable financial
creditworthiness of the entity providing the securty instrment in relation to the ter of the obligation in
the reasonable judgment of Idaho Power, provided that any guarantee and/or letter of credit issued by any
other entity with a short-term or long-term investment grade credit rating by Standard & Poor's
Corporation or Moody's Investor Services, Inc. shall be deemed to have acceptable financial
creditworthiness.
1. Cash Escrow Securty - Seller shall deposit funds in an escrow account established by the
Seller in a bankng 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 maintaining the escrow account(s).
Guarantee or Letter of Credit Securty - Seller shall post and maintain in an amount equal to the Delay
Security or other required securty amount(s): (a) a guanty from a par 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 ofIdaho Power. The Letter of Credit will 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.
43
APPENDIXE
WIN ENERGY PRODUCTION FORECASTING
As specified in Commssion 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 will share the cost of Wind Energy Production Forecasting.
The Facility's share of Wind Energy Production Forecasting is deterined as specified below. Sellers
share will not be greater than 0.1 % of the total energy payments made to Seller by Idaho Power during the
previous Contract Year.
a. For ever month of this Agreement begig 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) will 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.
b. As the value of the 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 O. i % cap shall be adjusted to reflect
the O. i % cap. If the Facility has paid the monthly allocations, a refud will be
included in equal monthly amounts over the ensuing Contract Year. If the
Facility has not paid the monthly allocations, the amount due to Idaho Power will
be adjusted accordingly and the unpaid balance will be deducted from the
ensuing Contract Year's energy payments.
c. The cost allocation formula described below will be reviewed and revised if
44
necessar on the last day of any month in which the cumulative MW nameplate
rating 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 will 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 (F is equal to the nameplate rating of ths Facilty as
specified in Appendix B.
Annual Wind Energy Production Forecastig Cost (AFCost) is equal
to the total annual cost Idaho Power incur to provide Wind Energy
Production Forecasting. Idaho Power will estimate the AFCost for the
curent year based upon the previous year's cost and expected costs for
the current year. At year-end, Idaho Power will compare the actul 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
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
Facility shall pay this amount within fifteen (15) days of the date of the payment
invoice.
45