20111026Application.pdf

e:IDA~POR~
An IDACORP Company
DONOVAN E. WALKER
Lead Counsel
dwalkertâidahopower.com
October 25, 2011
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-11-20
IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY
FOR APPROVAL AND/OR ACKNOWLEDGEMENT OF THE TERMINATION
OF THE FIRM ENERGY SALES AGREEMENT, REMOVAL FROM THE
INTERCONNECTION QUEUE, AND DISPOSITION OF THE CLUSTER
GROUP NETWORK UPGRADE FUNDS FOR MAGIC WIND, 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.
Donovan E. Walker
DEW:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. 80x 70
8oise, 10 83707
ONOVAN E. WALKER (158 No. 5921)
JASON 8. WILLIAMS (IS8 No. 8718)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalkercmidahopower.com
jwilliamstcidahopower.com
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ißlI OCT 25 PM 4: 51
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR APPROVAL ) CASE NO. IPC-E-11-20
AND/OR ACKNOWLEDGEMENT OF THE )
TERMINATION OF THE FIRM ENERGY ) APPLICATION
SALES AGREEMENT, REMOVAL FROM THE )
INTERCONNECTION QUEUE, AND )
DISPOSITION OF THE CLUSTER GROUP )
NETWORK UPGRADE FUNDS FOR MAGIC )WIND, LLC. )
)
Idaho Power Company ("Idaho Powet' or "Company"), in accordance with RP 52,
hereby respectfully applies to the Idaho Public Utilties Commission ("Commission") for
an Order approving and/or acknowledging (1) the termination of the Firm Energy Sales
Agreement ("FESA") between Idaho Power and Magic Wind, LLC ("Magic Wind"); (2)
removal of Magic Wind from Idaho Powets interconnection queue; and (3) the
disposition of amounts prepaid by Magic Wind for the Company's transmission system
network upgrades ("Network Upgrades") associated with the "cluster group" of
generators that was the subject of Case No. IPC-E-06-21.
APPLICATION - 1
In support of this Application, Idaho Power represents as follows:
i. BACKGROUND
1. Magic Wind is a proposed 20 megawatt ("MW") wind generating Public
Utilty Regulatory Policies Act of 1978 ("PURPA") qualifying facilty ("QF") project.
Initially, on October 20, 2005, Magic Wind filed a Motion to Determine Exemption Status
seeking a Commission determination that Magic Wind was exempt from the QF rate
eligibilty cap established in Commission Order No. 29839, Case No. IPC-E-05-34,
where the Commission lowered the published rate eligibilty cap for QF wind projects to
100 kilowatts ("kW"). On August 15, 2006, the Commission, in Order No. 30109,
determined that Magic Wind was entitled to receive exemption from the published rate
eligibilty cap of 100 kW established in Order No. 29839.
2. On October 11, 2006, Idaho Power and Magic Wind entered into an FESA
pursuant to PURPA, and the Commission's implementation thereof. Under the terms of
the FESA, Magic Wind elected to contract with Idaho Power for a 20-year term. Magic
Wind further elected to contract with the Company using the published avoided cost
rates and, under normal operating conditions, agreed not to generate more than 10
average megawatts on a monthly basis.
3. Idaho Power submitted the FESA for Commission review and
determination on October 27, 2006, in Case No. IPC-E-06-26. The FESA stated that
Magic Wind's first energy date would be July 31, 2007, and that its Scheduled
Operation Date would be December 31, 2007. At the time the FESA was submitted to
the Commission, the Cassia Wind docket, Case No. IPC-E-06-21, was stil pending
before the Commission. The Cassia Wind docket involved requests from generators,
most of which were PURPA generators, that were requesting to integrate approximately
APPLICATION - 2
200 MW of new wind generation on Idaho Powets 138 kilovolt transmission system in
the Twin Falls, Idaho, area (the "Cluster Group"). Pursuant to transmission
interconnection procedures, and consistent with Federal Energy Regulatory
Commission ("FERC") rules, Idaho Power placed the interconnection requests,
including the request from Magic Wind, into its interconnection "queue." The
Commission approved the FESA, which was subject to the outcome of the Cassia Wind
docket, in Order No. 30206 on December 21, 2006.
4. In June 2006, Idaho Power completed engineering studies which showed
it would cost approximately $60 millon in network upgrades to interconnect the Cluster
Group to the Company's transmission system. Case No. IPC-E-06-21 dealt with issues
related to the appropriate allocation of Network Upgrade costs among individual
projects within the Cluster Group and the Company's other customers.
5. On June 13, 2007, a settlement stipulation was submitted in the Cassia
Wind docket, Case No. IPC-E-06-21 ("Stipulation"). The Stipulation set forth the
methodology by which Network Upgrade costs would be allocated among the individual
Cluster Group projects and the Company's other customers. As part of the Stipulation,
the Company estimated through a "redispatch study" that the total interconnection costs
could be reduced from $60 millon to $11 milion if projects agreed to the potential
redispatch of their project's output. The Commission approved the Stipulation in Order
No. 30414 on August 29,2007.
6. Pursuant to the Stipulation, the Cluster Group members and Idaho Power
agreed that cost allocation for Network Upgrades would be paid as follows:
(a) Phase 1. Idaho Power would assume 100 percent cost
responsibilty; and
APPLICATION - 3
(b) Phases 2, 3, 4, and 5.
(i) Twenty-five percent of the costs would be provided by
Cluster Group members as a non-refundable contribution in aid of construction
("CAlC");
(ii) Twenty-five percent of the costs would be funded by Idaho
Power and included in Idaho Powets rate base; and
(iii) Fifty percent of the costs would be funded by the Cluster
Group members as an advance in aid of construction ("AIAC") and refunded back to the
Cluster Group members over a 10-year period contingent upon the Cluster Group
member's individual power purchase agreements remaining in good standing. See
Case No. IPC-E-06-21, Stipulation at pp. 6-8. In addition, the total cost for the Network
Upgrades were to be allocated among each member of the Cluster Group based upon
each project's operating characteristics, each project's position in the Company's
interconnection queue, and each project's interconnection capacity. Id. at p. 5. Further,
the Stipulation contained provisions acknowledging that the Cluster Group members
recognized "that the final cost of (their) share of the Network Upgrades wil not be known
until construction is complete. (The Cluster Group) also recognizes that (their) share of
the final Network Upgrade cost wil increase or decrease . . . depending on whether
other projects, both earlier and later in the Idaho Power Queue are constructed." Id. at
p.6.
7. Idaho Power sent a letter to the individual Cluster Group members
(including Magic Wind) on February 2, 2010, that included a draft Facilty Study Report
and which instructed the Cluster Group members that Idaho Power would issue invoices
when the final Facilty Study Report for the required Network Upgrades was issued.
APPLICATION - 4
Idaho Power sent the final Facility Study Report to the Cluster Group members
(including Magic Wind) on March 9, 2010. Invoices were sent to each member of the
Cluster Group for their allocable share of the Network Upgrades on March 10, 2010,
with payment due on April 9, 2010. Idaho Power received Magic Wind's allocable share
per the Stipulation of the Network Upgrades pre-payment, in the amount of
$562,536.75, on April 9, 2010.
8. As noted above, the FESA as originally submitted and approved by the
Commission provides that the operation date for Magic Wind's project was December
31, 2007. See Case No. IPC-E-06-26, Appendix B to the FESA. Magic Wind failed to
come on-line by December 31,2007. At Magic Wind's request, Idaho Power agreed to
revise the Scheduled Operation Date to September 30, 2010. See Case No. IPC-E-06-
26, December 2008 Revised Operation Date Letter. Magic Wind also failed to bring its
project on-line by the revised September 30, 2010, Scheduled Operation Date.
Pursuant to the terms of the FESA, the project must be on-line within ten months of the
Scheduled Operation Date or it is an event of default. With the addition of ten months to
the September 30, 2010, Scheduled Operation Date, the project was required to come
on-line by July 31, 2011. Magic Wind failed to meet the July 31, 2011, operation date
and is now in default of the FESA.
9. On August 3, 2011, the Company and Magic Wind submitted to the
Commission a copy of the Letter of Understanding and Agreement Relating to Contract
Default, Scheduled Operation Date, and Generator Interconnection Agreement ("Letter
Agreement") whereby the parties agreed that the Magic Wind project would be given
one last extension of its Scheduled Operation Date to September 30, 2012, so long as
Magic Wind posted a delay security in the amount of $45 per kilowatt of the project's
APPLICATION - 5
nameplate capacity by no later than September 30, 2011. See Letter Agreement,
attached hereto as Attachment NO.1, and incorporated by this reference. In addition,
the Letter Agreement required Magic Wind to payor otherwise make credit
arrangements with Idaho Power to pay the $500,000 construction deposit for its
interconnection, which was past due from June 30, 2011, no later than September 30,
2011. The Letter Agreement further stated that if Magic Wind failed to post the delay
security or the construction deposit by September 30, 2011, that the FESA would be
terminated without further notice. Magic Wind did not post either the required delay
security or the required construction deposit by September 30,2011.
10. On October 4, 2011, Idaho Power sent Magic Wind a notice of the
termination of the FESA pursuant to the Letter Agreement. As of September 30, 2010,
$76,569.83 has been spent on Network Upgrades from Magic Wind's $562,536.75
prepayment of the allocated Cluster Group costs.
II. TERMINATION OF THE FESA, REMOVAL FROM THE INTERCONNECTION
QUEUE, AND DISPOSITION OF NETWORK UPGRADE PAYMENTS
11. Idaho Power has terminated the FESA with Magic Wind. As indicated
above, Idaho Power's interaction with Magic Wind has a long history involving multiple
extensions of the power purchase agreement. In addition, because the FESA was
approved by the Commission in Order No. 30206, Idaho Power respectfully seeks via
this Application Commission acknowledgement and/or approval of the termination of the
Commission-approved FESA.
12. Idaho Power also seeks Commission acknowledgement and/or approval
for Idaho Power to remove Magic Wind from its interconnection queue. QF generator
interconnection to Idaho Powets electrical system is governed by the Company's Idaho
APPLICATION - 6
Tariff Schedule 72 on file with the Commission. Schedule 72 incorporates, by
reference, the Company's applicable Large Generator or Small Generator
Interconnection Procedures posted on the Company's OASIS website. In addition, QF
generators are required to sign a Generator Interconnection Agreement ("GIA"), a
uniform agreement that is contained within Schedule 72, detailng additional terms and
conditions between the Company and generators. The interconnection procedures,
Schedule 72, and the GIA are all very similar to the interconnection procedures
contained in the Company's FERC Open Access Transmission Tariff ("OATT") and
FERC-regulated GIAs that the Company has for non-QF generators. Although QF
generators are under state jurisdiction, and Schedule 72, and non-QF generators are
subject to federal jurisdiction, and the OATT, the Company's business practices are
designed to treat all similarly situated generators in a similar manner.
13. Generators are assigned a spot in the Company's interconnection queue
based upon the date and time of the interconnection request by the generator. A
generatots position in the interconnection queue is maintained unless a generator
defaults in the payment of required fees under the Large or Small Generator
Interconnection Procedures, Schedule 72, and/or the executed GIA. Generators in the
queue are responsible for paying network upgrade charges required by the addition of
their generation to the system. When a generator is removed from the Company's
interconnection queue, it potentially frees up available transmission capacity for use by
generators later, or junior, in the queue.
14. Magic Wind submitted a request to the Company's interconnection queue
in May of 2005. Because it has failed to timely submit the required construction
deposits necessary for its interconnection to move forward, and ultimately failed to pay
APPLICATION - 7
both the necessary delay security and interconnection construction deposits pursuant to
the Letter Agreement, Magic Wind has now forfeited its position in the Company's
interconnection queue. The removal of Magic Wind from the interconnection queue will
have a direct impact on the amounts that generators with a junior queue position to
Magic Wind wil be required to pay for network upgrades, including other members of
the Cluster Group. Because other members of the Cluster Group wil be directly
impacted by the removal of Magic Wind from the Company's interconnection queue,
Idaho Power hereby seeks acknowledgement and/or approval of such removal from the
Commission.
15. As noted above, interconnection costs associated with the integration of
the Cluster Group onto Idaho Power's electrical system were resolved via Stipulation
and approved by the Commission in Order No. 30414. The Stipulation and the
Company's business processes required each member of the Cluster Group to prepay
their allocable share of the Network Upgrades. Prepaid amounts are used to make firm
commitments with third-party vendors to purchase the equipment necessary for Network
Upgrades as well as firmly commit other engineering and labor resources to construct
the Network Upgrades. Magic Wind's allocated share of the Network Upgrade costs is
$562,536. As of September 30, 2010, $76,569.83 has been spent on Network
Upgrades for the Magic Wind project.
16. Idaho Power seeks Commission approval and/or acknowledgement of the
following process for the disposition of the prepaid Magic Wind funds and to reallocate
Cluster Group Network Upgrades as follows:
(a) Consistent with the Stipulation in Order No. 30414, Idaho Power
considers the $76,569.83 spent on the Cluster Group Network Upgrades as non-
APPLICATION - 8
refundable to Magic Wind as this is money that has already been spent on the Network
Upgrades;
(b) Idaho Power proposes to refund to Magic Wind $485,967 of its
prepayment amount submitted on April 9, 2010, for the Network Upgrades, without
interest; and
(c) As a result of removing Magic Wind from the interconnection queue
and refunding $485,967 of its prepaid amount for Network Upgrades, that amount must
be reallocated to the other members of the Cluster Group. Idaho Power proposes to
reallocate the Network Upgrade costs that result from the refund to Magic Wind to the
other members of the Cluster Group proportionately in accordance with the provisions
of the Stipulation. This reallocation is consistent with and contemplated by the
Stipulation as the Cluster Group members acknowledged that Network Upgrade costs
"wil increase or decrease . . . depending on whether other projects, both earlier and
later in the Idaho Power Queue are constructed." Stipulation at p. 6.
II. MODIFIED PROCEDURE
17. Idaho Power believes that a hearing is not necessary to consider the
issues presented herein and respectfully requests that this Application be processed
under Modified Procedure; Le., by written submissions rather than by hearing. RP 201
et seq. If, however, the Commission determines that a technical hearing is required, the
Company stands ready to prepare and present its testimony in such hearing.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
18. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
APPLICATION - 9
Donovan E. Walker, Lead Counsel
Jason B. Willams, Corporate Counsel
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
dwalker(Qidahopower.com
jwilliams(Qidahopower.com
Randy C. Allphin
Energy Contract Administrator
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
rallphin(Qidahopower.com
V. REQUEST FOR RELIEF
19. Idaho Power respectfully requests that the Commission issue an Order:
(1) authorizing that this matter may be processed by Modified Procedure; (2) approving
and/or acknowledging Idaho Powets termination of the Commission-approved FESA
between Idaho Power and Magic Wind; (3) approving and/or acknowledging Idaho
Power's removal of Magic Wind from the Company's interconnection queue; and (4)
approving and/or acknowledging Idaho Powets proposed procedure for the disposition
of Magic Wind's prepaid funds for Network Upgrades and the reallocation of the
Network Upgrade costs to other members of the Cluster Group pursuant to the
Stipulation and the Commission's Order.
Respectfully submitted this 25th day of October 2011.
APPLICATION - 10
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 25th day of October 2011 I served a true and
correct copy of APPLICATION upon the following named parties by the method
indicated below, and addressed to the following:
Commission Staff
Kristine A. Sasser
Deputy Attorney General
Idaho Public Utilties Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
Idaho Wind Partners 1, LLC
Steve Eisenberg
RP Wind ID LLC, Managing Member
82 Elm Street
P.O. Box 2049
Manchester Center, Vermont 05255
On Behalf of Burley Butte, Pilgrim
Stage, Thousand Springs, Golden
Valley, Milner Dam, and Salmon Falls
Projects
Exelon Wind, LLC
Richard Free
Director, Utilty & Regulatory Process
Support
4601 Westown Parkway, Suite 300
West Des Moines, Iowa 50266
On Behalf of Cassia Wind, Cassia
Gulch, and Tuana Springs Projects
Fossil Gulch Wind Farm, LLC
Ken Wegner
2400 Industrial Lane, Suite 2100
Broomfield, Colorado 80020
On Behalf of Fossil Gulch Project
APPLICATION - 11
-2 Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email Kris.Sasser(Qpuc.idaho.gov
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email steve.eisenberg(Qreunionpower.com
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email richard.free(Qexeloncorp.com
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email kwegener(Qcoloradosantafe.com
Magic Wind, LLC
Armand Eckert
716-B East 4900 North
Buhl, Idaho 83316
On Behalf of Magic Wind Project
Twin Falls Canal Company
Brian Olmstead, General Manager
Twin Falls Canal Company
P.O. Box 326
Twin Falls, Idaho 83303
On Behalf of Low Line Midway Hydro
Project
DF-AP#1 %Andgar Corp.
Kyle Juergens
6920 Salashan Parkay A 102
Ferndale, Washington 98248
On Behalf of Big Sky Dairy Digester
Project
Cargil Global Emissions
Sanchayita Ray
9350 Excelsior Boulevard, MS 139-4-A
Hopkins, Minnesota 55343
On Behalf of Dry Creek Dairy Project
APPLICATION - 12
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email armand(Qsafelink.net
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email olmstead(Qtfcanal.com
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
Email
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email sanchayitaray(Qcargill.com
attct1bDonovan E. Walker
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-11-20
IDAHO POWER COMPANY
ATTACHMENT NO.1
DONOVAN E. WALKER
Led Counseldwalkertidahopr.com
øsIDA~POe
An IDACORP company
August 3, 2011
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utlities Commission
472 West Washington Street
Boise, Idaho 83720
Re: Case No. IPC-E-06-26
Magic Wind Park LLC - Letter of Understanding and Agrement Relating
to Contract Default, Scheduled Operation Date, and Generator
Interconnection Agreement.
Dear Ms. Jewell:
Enclosed please find a copy of a Letter of Understanding and Agreement
between Idaho Power and Magic Wind Park LLC. Please file the enclosed Letter
Agreement in the contract file for this matter.
Sincerely,
&.~t~ -
DEW:csb
Enclosure
cc: Dean J. Miler (w/encl.)
Donald L Howell, II, IPUC (w/encl.)
Rick Sterling, IPUC (w/encl.)
Randy C. Allphin, IPC (w/encl.)
1221 W. Idaho St. (83702)
P.O. Box 70
Boise. 10 83707
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Pursuant to our June 28, 2011 confnc cal and fop comuniio, an
notstnding th foreoing, th part' mutl understanding and agrement, having the
benefi of cosultn wit their ow rect counsel, is as follows;
The pa hereby agree that
(1) Magic Wind has ben prperl notif of it default and brech of the FESA as of June
28,2011;
(2) The FESA's requirement to cure said default wiin a commely reasonable timedoe not delay th reuirent to achieve the Opti Da indefinitly;
(3) A comercaly reasonabl time wi whic to cure sa default by achievin th
reuir Operati Date shall. be an additnal one. year and tw rnth, to a dat ceinof september 30, 2012, by 5¡( p.m. Mountin Stndard Time;
(4) The commercally reasonable time peri granted to Magic Wind is a fair and
resonable ti wi which to cure the deult and breach, and Magic Wind shall not bring
any leal or equitble challenge to the same, and by this agret knowingly and
Intelitl waives it rihts to bnng any poss lel clim rela thereo;
(5) Magic Wind shaH post Delay Secri to sere the Operation Date commitnt in th
amount of $45.00 per kilowtt ("k) of the proje's namelate capaci ($4 multlie by
the Maximum Capaci wi the Maximum Capaci being meure in kW. This Delay
Seri shall be posted no later than septem 30, 2011, in a form as decrbe In
Appendix A attch hereto. If Magic Wind fails to achieve the Septembe 30, 2012,Operaon Date, Idaho Powr shall draw the funds from th Delay seri and the FESA
will terminate. The part agre that the damag Idaho Power and it custome incur
due to Magic Win's failure to acieve it Operati Dae are diflt or impssible to
calclate with certint, and that the Delay Securit is an approprate approximon of suc
damges. The stated Delay Uquidated Dama and Delay 5eunty are reasonale, and
Magic Wi shall not bnng any leal or equitbl challenges to the sal1 and by this
agremet knowingly and intelligntl waives it rights to bnng any possib lel claim
relate thereto.
(6) Should Magic Wind achieve it Opetion Date by or bere setembe 30,2012, Idaho
Powr shaD release th fuR amount of the Delay Seri post hereunder thirt (30) days
afer the Operation Date has ben achieve;
(7) If Magic Wmd doe not pot th reuire seri by th dat certain of seembe 30,
2011, by 5:00 p.m. Mountain Standard Tim, the FESA wi be teinaed wih no furterno reuire nor leal challnges to the teiiatin there;
(8) If Magic Wmd doe not achieve the Operati Da on or before Setembr 30, 2012,
by 5:00 p.m. Mountain stndard Time, th FESA will be terminat wit no further noti
reuir nor leal chllenge to the terminti threof.
a.£el4f1
(9) Maic Wind shall sign and ex th fina Genetor Int~ne Agre
lGIA ") no later than Septmbe 30, 2011.
(10) Magic Wind shall pay, or mak accptable crit arrgemnl$ wih Idaho Powr to
pay, the $50,00 Invoic dated May 31, 2011, reresenting th reuire consru
deposit pursuant to the Facilit Stud and the GIA, whic paymt. was due by June 30,
2011, no laer than Seember 30, 2011.
(11) If it can be reasonabl demnste th Idaho Powr was th wrl cause of andelays that wold preve Magic Wir fr being completed arjd opional by the
Operan Date of sember 30, 2012, then the Operatin Date Sh.11 be ext by th
leng of such delays or to soe otr reasonable dae as mutuall agre. It is here
stipulated by bo parts that no such clim that Idaho Powr was or is th caus of any
such del exits as of the date of executio of this Agret.
(12) Th Base Energy Purcse Pri tabl inclued in paraph 7.1 of the FESA waamnd on Dembr 26,200 and the bae energ pri we eKtende four (4) years
to acmote th full 20 year term of tht amendmt. The revisi(jms hein reuire that
the Base Energ Purcas Pnee table be extnded one (1) additonal yer to 2032 to
acodte th full 20 yer term in this Letter of Understanding and Agreement. The
following lines are aded to that amendnt
Year Season 1 - (7.5%) Sean 2 - (120.0%) Seson 3 - (100.0%)2032 68.48 111.79 93.16
(13) Under IVofthe FESA, Magic Wind prpoed to deign, constrct install, ow, oprate
and maIntain a 20 MW win geneng faciit. Th facilit will be a qualif smil powr
production facility under the applicable provisions of the Public Utilil Regulato Polic
Ac of 1978 ("PURPA"). Magic Wind ha changed th manufctre .nd modl at the wid
turbines that it will construct. . Magic WILL provide dat on the Facilit tht Idaho Powr wil
use to confrm that, under normal and/or avere conditons, genetin fr the Facilit
wil no exce 10 aMW on a monthly basi. Additnally, reardles of tuine mo and
or manufcturer, the projects maximum cacity/output is limit to 20 WI.
(14) If Maic does no penor the aboe by September 30, 2011, thn th part agreethat th FESA will be therefore immeiatly terminate and no add~al amounts will be
owe. Boh Idao Power and Magic Wind threfore, shall not bnng any leal or equibl
challe to the same and by this agreement knngly and inlligenl waive thir rihts to
brig any possible leal claim relat therto against th other part to this agreent.
Each parts signatre be, wi counsl, indicte that part's accptance of this Lett
of Undnding and Agrement and the aveents and cont th.
¿;/#'
~ø
DATED this s: day of Auust. 2011.
AgIo_ni~Wol_ _c t(~
Donovan E. Walker
Le Counse
Idaho Powr Company
Gro
nior Vi Preiden, Powr SupplyIdaho Powr Cony
Agre 10 _ni Ac ~ oIu.~ni Pm liC:~eic ~~Magic Wind Park, LLC Lel Consel for MagiC Wind Park LLC
a/f!'1
APPENDIX A
FORMS OF UQUID SECURITY
The Seller shall provide Idaho Power with commercially reasonable security instruments
such as Cash Escrow Security, Guarantee or Letter of Credit as those tenns are defined
below or other fonns of liquid financial securi that would provide readily available cash
to Idaho Power to satisf the Delay Securi requirement within the August 2, 2011,
Letter Agreement.
For the purpse of this Appendix A, the term "Credit Requirements" shall mean
acceptable financial creitwrthiness of the entity providing the security instrument in
relation to the tenn 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 Corpration
or Moody's Investor Servces, Inc. shall be deemed to have accptable financial
creditworthiness.
1. Cash Escrow Security - Seller shall deposit funds in an escrow accunt
established by the Seller in a banking institution accptable to both Partes equal
to the Delay Security.
2. Guarantee or Letter of Credit Security - Seller shall post and maintain in an
amount equal to the Delay Security: (a) a guaranty from a part that satisfies the
Credit Requirements, in a fonn accptable to Idaho Power at its discretion, or (b)
a Letter of Credit in a fonn acceptable to Idaho Power, in favor of Idaho Power.
The Letter of Credit will be issued by a financial institution acceptable to both
partes.
(0065458.OOCX; 1)