20120301Petition and Application.pdf

[phone]
[phone] (Fax)
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Jean Jewell Secreta
Idao Public Utities Commssion
472 W. Washigton St.
Boise, Idao 83720
McDevitt & Miller LLP
Lawyers RECEIVED
420 W. Bannock Street 20 I i MAR - I PH 3: 16
P.o. Box 2564.83701
Boise, Idaho 83702
March 1,2012
t et-l~~-\ J-- \ \
Re: In the Matter of the Application of Rainbow Ranch Wind LLC
of Rainbow West Wind LLC
Dear Ms. Jewell:
Chas. F. McDevitt
Dean J. (Joe) Miler
Enclosed for fig, please fid an origial and seven (7) copies of Raibow Rach Wind, LLC and
Rabow West Wind, LLC's Petition and Application.
Kidly retu a fie staped copy to me.
DJM/hh
Encl.
Vety Truy Yours,
McDevitt & Mier IL~VJDean J. Mier
ORIGINAL
Dean J. Miler (ISB No. 1968)
Chas. F. McDevitt (ISB No. 835)
McDEVITT & MILLER LLP
420 West Banock Street
P.O. Box 2564-83701
Boise, il 83702
Tel: [phone]
Fax: [phone]
joeaBcdevitt-miller.com
chasaBcdevitt-miler.com
!' E I' ,,.,.,i. \fj'-IJ.v. . ~'..,,,.;,....
20ll M~,R -I PH 3: 16
UTi
Attorneys for Rainbow Ranch Wind LLC
Attorneys for Rainbow West Wind LLC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION
AND OF RAINBOW RANCH WID LLC
AND RAINBOW WEST WI LLC TO
MODIFY PRIOR ORDER No. 32300 OR
IN THE ALTERNATIVE APPLICATION
APPROVAL OF FIR ENERGY
SALES AGREEMENTS
Case No. \ r L - E. - \ 1-- \ I
PETITION AND APPLICATION
COME NOW Rainbow Rach Wind LLC, and Rainbow West Wind LLC. (collectively
referred to as "Rabow" or "Petitioners") and, pursuat to Idao Code §61-624, and IPUCRP
53, respectfuly petition the Commssion to modify Order No. 32300, Case Nos. IPC-E-1O-59
and IPC-E-I0-60, such that Firm Energy Sales Agreements between Petitioners and Idaho Power
Company executed by Ranbow on December 13,2010, be approved. Alternatively, pursuat to
IPUCRP 52, Rainbow applies for approval of the Fir Energy Sales Agreement. In support of
the requested relief, Rabow respectfuly shows as follows, to wit:
PETITION AN APPLICA TION-l
INTRODUCTION
1. This Petition asks the Commssion to modify an existing Order, as permitted by
IPUCRP 53.01. The name of the person petitioned against is Idaho Power Company. See
IPUCRP 53.05(d).
2. As discussed in more detal below, on July 27,2011, the Commission issued
Order No. 32300 disapproving two Firm Energy Sales Agreements between Rainbow and Idaho
Power Company. Subsequently, on October 4,2011, the Federal Energy Reguatory
Commission ("FERC") issued an order declarg that the basis on which the Commission
disapproved the Firm Energy Sales Agreements in Order No. 32300 was inconsistent with
PUR A. Cedar Creek Wind, LLC, "Notice of Intent Not to Act and Declaratory Order," 137
FERC' 61,006 at P 35 (2011) (the "Cedar Creek Order").
3. Although Order No. 32300 has become final, the Commission has authority to
modify existing orders based on new facts or inormation not available at the time of the initial
order. However, FERC's Cedar Creek Order constitutes new facts or information justifyng
modification of Order No. 32300, and such modification would not constitute a collateral attck
upon that Order.
4. Alternatively, this pleading is designated as an Application, as permtted by
IPUCRP 51: "Two or more separately stated grounds, claims or answers concernng the same
subject matter may be included in one pleading". IPUCRP 52 defines Applications are defined
as, "All pleadings requesting a right, certificate, permit or authority from the Commission, while
Petitions are pleadings "requesting modification, amendment or stay of existing orders."
IPUCRP 53. For the reasons set fort below, the Firm Energy Sales Agreements should be
approved. In Rainbow's view, the procedural vehicle by which such approval is accomplished
PETITION AND APPLICA TION-2
could either be modification of prior Order No. 32300, or approval of a new Application for
approval of the Agreements. Accordingly, Ranbow has designated this pleadig as a Petition to
modify or, alternatively, an Application for approval. As explaied below, whether designated a
Petition or an Application, neither constitutes an impermssible collateral attck upon a prior
order.
FACTUAL BACKGROUND
5. Rainbow Ranch Wind LLC., and Rainbow West Wind LLC., are limited liabilty
companes authorized to conduct business in the State of Idaho and are engaged in the business
of developing and constrcting two wind energy conversion facilties ("Facilties") located near
Delco, Idaho in Cassia County, Idaho.
6. On December 13,2010, Ranbow executed and delivered to Idaho Power
Company ("Idaho Power" or "the Company") two Firm Energy Sales Agreements ("FESAs")
with respect to the Facilties. On December 14,2010, Idaho Power executed the FESA's. On
December 16,2010, Idaho Power submitted to the Commission two Applications for
Determintion regarding the FESAs, Commission Case Nos. IPC-E-I0-56 and IPC-E-1O-60.
True copies of the FESA's are attched hereto as Exhibit 1.
7. As recited in the Applications, paragraphs 7-l4, the FESAs were consistent with
all then applicable Commission orders and policies.
8. On June 8, 201l, the Commssion issued Order No. 32256, disapproving the
FESAs. On June 29, 2011, Ranbow fied Petitions for Reconsideration in Case Nos. IPC-E-1O-
59 and IPC-E-1O-60. On July 27, 2011, the Commssion issued Order No. 32300, denying
Rainbow's Petition for Reconsideration. The Commssion affrmed its prior decision not to
approve the FESAs, finding that the FESAs were not effective prior to December 14,2010.
PETITION AN APPLICA TION-3
Because each of the FESAs requested published avoided cost rates but the projects were in
excess of 100kW, the Commission found that the published rates were no longer available to the
projects. A tre copy of Order No. 32300 is atthed hereto as Exhbit 2.
9. In the Cedar Creek Order, on the basis offacts similar to those presented by
Rainbow, FERC declared that that "the Idaho PUC decision denying Cedar Creek a legally
enforceable obligation, specifically the requirement in the June 8 Order that a Fir Energy Sales
Agreement/ower Purchase Agreement must be executed by both paries to the agreement before
a legally enforceable obligation arses, is inconsistent with PURP A and our reguations
implementing PURP A, paricularly section 292.304( d)(2)." A tre copy of the Cedar Creek
Order is attched hereto as Exhbit 3.
10. Concurent with ths Petition, Rainbow is filing with FERC a "Petition for
Enforcement Under the Public Utilty Reguatory Policies Act of 1978." In its Petition for
Enforcement, Raibow has asked FERC to initiate an action to enforce Section 292.304( d) of its
PURPA regulations against the Commission and reverse the Commission's determination tht
Petitioners were not eligible to receive the published avoided costs rates as of December 9,2010,
when Rabow incured a legally enforceable obligation to sell electrcity to Idaho Power
Company. In the alternative, Ranbow has asked FERC to find, consistent with the Cedar Creek
Order, tht Commission's orders denying Rainbow a legally enforceable obligation, specifically
the requirement in the June 8 Order that a Firm Energy Sales Agreement/Power Purchase
Agreement must be executed by both paries to the agreement before a legally enforceable
obligation arses, is inconsistent with PURP A and the FERC's reguations implementing PUR A,
paricularly section 292.304(d)(2), and makng such other findings as would allow Ranbow to
pursue a successfu enforcement action in a U.S. Federal DistrctCour.
PETITION AN APPLICA TION-4
STATEMENT OF LEGAL AUTHORITY
11. Rainbow acknowledges that the Commssion's Reconsideration Order No. 32300
became fuly final twenty-one days following its issuace and that pursuat to Idaho Code§ 61-
625 orders that have become final and conclusive orders are not subject to collateral attck.
12. Notwthstading Idaho Code§ 61-625, the legislatue has also adopted Idao
Code §61-624 which provides:
"Rescission or chage of orders.- The commission may at any time, upon notice to the
public utilty afected, and afer opportity to be heard as provided in the case of
complaints, rescind, alter or amend order or decision made by it. Any order rescinding,
altering or amending a prior order or decision shall, when served upon the public utilty
affected have the same effect as is herein provided for original orders or decisions.
13. The Idao Supreme Cour has considered the interplay between Idao Code§ 61-
625 and §6-624. In Associated Housemovers, Inc., v. Rowley, 97 Idaho 663, 551 P.2d (1976),
the Commission entered an order denying a motor carer permit, and the applicant neither fied a
petition for reconsideration nor fied a notice of appeal. Later the applicant filed a second
application seekig the same authority, which the Commission granted. The second application
was supported by testimony of witnesses who were unavailable to the applicant in the earlier
proceeding. 97 Idaho at 665.
14. On appeal, the Protestats to the application argued that the award of the permt in
the second application amounted to a collateral attack on the first order and thereby violated
Idaho Code §61-625. The cour rejected this argument, noting "Any modification of an existing
order under Idaho Code §6l-624 argubly could be a collateral attack on tht order, but such an
interpretation would bring those two consecutive statutory sections into direct confict, a result
we canot support". 97 Idao at 664-665. Relying on an Arzona Supreme Cour case
considerig a similar statutory scheme, the cour clarfied that "collateral attack" means an attck
PETITION AND APPLICA TION-5
such as an application to a cour for injunctive relief against an order of the Commssion, but it
does not include an application to the Commission to modify an existing order based on new
facts or information. Thus, whether considered a Petition to modify and existing order or as a
new Application-like in Rowley-ths pleading does not violate Idao Code 61-625.
15. Here, in Order No. 32300, based on the terms of the Agreements, the Commission
determned that the projects were not entitled to published avoided cost rates because, at the time
the agreements became effective, published rates were available only to wind and solar projects
with a design capacity of 100kW or less. (Order No 32300 at 14).
16. The Cedar Creek Order, however, reafs FERC's reguations providing that
entitlement of published rates may arise from an executed contract or from a "non-contractu,
but stil legally enforceable obligation":
"(w)hile this may be done through a contract, if the electric utilty refues to sign a
contrt, the QF may seek state regulatory authority assistance to enforce the
PURPA-imposed obligation on the electrc utilty to purchase from the QF, and a
non-contractual, but stil legally enforceable, obligation will be created pursuat to
the state's implementation ofPURA. Accordingly, a QF, by committng itself to sell
to an electrc utilty, also commits the electrc utilty to buy from the QF; these
commitments result either in contracts or in non-contractu, but binding, legally
enforceable obligations." 137 FERC 61,006 at pg. 13.
l7. As demonstrated below, Rabow incured a legally enforceable obligation on
December 9, 2010, when Rainbow indicated to Idaho Power tht it was prepared to execute the
fial FESAs provided by Idaho Power on December 8, 2010. In any event, Petitioners did not
incur legally enforceable obligations to sell electrcity to IPC later than December 13,2010,
when Rainbow executed the FESAs. On the basis of the Cedar Creek Order, Rabow is entitled
to Commission approval of the FESAs.
PETITION AND APPLICA TION-6
RANBOW INCURRD A LEGALLY ENFORCEABLE OBLIGATION
TO SELL PRIOR TO DECEMBER 14,2010
18. In Augut of2010, Raibow submitted Generator Interconnection Applications to
Idaho Power. Thereafer, negotiations with respect to FESAs began on Wednesday, November
3,2010, when Brian Jackson, Rainbow's representative, sent an email to Idaho Power
confrmg Ranbow's intention to "sign 20-year non-levelized contracts with Idaho Power
having a staing on-line date on or before 12-31-2012."
19. Representatives of Raibow met with representatives of Idaho Power on
Thursday, November 4,2010, and discussed, among other things, the terms and conditions of
the draf FESAs for the Rainbow Projects. At that meeting, Idaho Power indicated tht it would
provide Ranbow with blan FESA documents and instrcted Ranbow to fill in the documents
and retu them to Idaho Power to proceed to the next step.
20. On Friday, November 5, 2010, Idaho Power provided Raibow with a draf
stadad FESA and an initial information request. On that same day, Idaho Power and two
other utilties fied a Joint Petition with the Commssion requesting, among other thngs, that the
Commission imediately reduce the size cap of those QF projects eligible to enter into
contracts at published avoided cost rates from 10 aMW to 100 kW. Larger projects above the
eligibilty cap would be allowed to enter into contracts only at the utilty's avoided costs as
determined pursuat to the prospective utilty purchaser's IRP methodology, which
methodology, historically, had produced rates that were dramatically lower than the published
rates. Idao Power did not, however, inorm Ranbow that it had filed the Joint Petition with
the Commssion.
PETITION AND APPLICA TION-7
21. On Thursday, November 9, 2010, Raibow provided Idaho Power with the
information Idaho Power had requested and, on Friday, November 10,2010, Ranbow
submitted finalized FESAs for the Rainbow Project to Idaho Power.
22. On Monday, November l5, 2010, afer several phone calls and messages from
Brian Jackson of Rainbow to Randy Allphin of Idaho Power requesting a meetig to discuss the
FESAs, Raibow sent Idaho Power an MS Word version of the FE SA documents with the
project inormation filled in. In response to Mr. Jackson's requests for a meeting, Mr. Allphin
responded that he would be out of town until afer Thansgiving, but could.meet with Rabow
when he retued to town. Mr. Allphin fuer informed Mr. Jackson ofIdaho Power's
November 5, 2010, Joint Petition with the Commission and that" (t)he adjustment requested in
this filing could afect your project's eligibilty for the published avoided cost rate," but would
not preclude Rainbow from negotiating a purchase power agreement with Idao Power for the
Rainbow Projects.
23. On November 17,2010, Brian Jackson, Manager of Ranbow, sent an email to
Donovan Walker of Idaho Power expressing concern over the delay in completing the FESAs
for the Rainbow Projects and the potential effect on the Raibow Projects ofIdao Power's
filing of the Joint Petition with the Commission. That same day, in response to Mr. Jackson's
email, Donovan Walker of Idaho Power called Brian Jackson and indicated that,
notwithstanding the Joint Petition, Idaho Power was proceeding with a few purchase power
agreement negotiations and would work with Rabow to complete FESAs for the Rainbow
Projects. Mr. Walker. assured Mr. Jackson that the stadad processes and procedures for
securng FESAs at the published avoided cost rate were stil in place until the Commission
made offcial changes in response to the Joint Petition.
PETITION AN APPLICA TION-8
24. On November 19,2010, Rady Allphin, Michael Darngton and Donovan
Walker from Idaho Power met with Peter Richardson, Brian Jackson, Pike Teinert, and David
Warick from Rainbow and, among other things, discussed the next steps and procedures
needed to finalize the FESAs for the Ranbow Projects.
25. On November 23,2010, Idaho Power provided Rainbow with entirely new blan
FESAs for the Rainbow Projects, essentially requirig Rainbow to sta over agai to fill in
information on the blan documents.
26. On December 3, 2010, Rainbow provided Idaho Power with FESA documents
with the agreement contacts and specific project items filled-in.
27. On December 3,2010, the Commission issued Order No. 32131, finding probable
cause to investigate the Idao Utilties' assertions in the Joint Petition, but did not imediately
reduce the eligibilty cap to 100 kW. This order, however, gave notice that the Commission
would make a decision on the eligibilty cap after its investigation and that its decision would be
effective, retroactively, on December 14,2010.
28. On Tuesday, December 7, 2010, the completed FESAs for each of the Ranbow
Projects were approved by Rainbow IS legal review team and subsequently were discussed with
Idaho Power. Late on Wednesday, December 8, 2010, Idaho Power provided Ranbow with
completed FESAs for final review and approval by Rainbow.
29. At 8:36 AM on December 9,2010, Brian Jackson of Raibow sent an email to
Idaho Power indicating that the FESAs "looked great," and asked: "please let us know how fast
we can sign these?" Mr. Jackson fuer indicated that, although the Raibow FESA team was
in Portland tht week, if Idaho Power indicated that it was prepared to sign the agreements on
PETITION AND APPLICA TION-9
Thursday, December 9, or Friday, December 10, the Ranbow team would fly back to Boise and
would execute the FESAs tht same day.
30. Ranb.ow did not hear from Idao Power until alost noon on Monday, December
13,2010, when Idaho Power informed Rainbow tht the final contracts would be available at
2:00 PM that afernoon, and asked whether Ranbow wanted the fial FESAs to be mailed or to
pick them up in person. Rainbow was puzzled by Idaho Power's offer to mail the FESAs, and
responded that Ranbow would come to Idao Power's offce at 2:00 PM to sign the FESAs.
31. At approximately 2:00 PM on Monday, December 13,2010, representatives of
Rainbow, consisting of Brian Jackson, Pike Teinert, and David Warck received the final
FESAs for the Rainbow Projects from Michael Darngton at the front desk of Idao Power IS
corporate headquarers in Boise, Idaho. The Ranbow team went to a nearby restaurant, where
Brian Jackson, on behalf of Petitioners, signed the origin FESA for each of the Rainbow
Projects. The Rainbow team then retued to Idaho Power IS offce.
32. Upon retuing to Idaho Power 's offce with the executed FESAs the Rabow
team was told by Michael Darington that Idaho Power would not sign the FESAs that
afernoon. Although Idaho Power had provided Rainbow with final versions of the FESAs at
2:00 PM on December 13,2010, and Rainbow had retued the signed FESAs to Idaho Power
on December 13,2010, Michael Dargton informed the Rainbow team that Idaho Power
would execute the FESAs over the next couple of days.
33. The Rainbow team retued to Idaho Power's office on December 14,2010. The
FESAs had not been signed by late mornng, and the Raibow team asked Michael Darington
if there was any way to get the FESAs signed that day. Mr. Darngton told the Rainbow team
that no one was sure how long it would tae for the FESAs to be signed by Idaho Power or how
PETITION AN APPLICATION-tO
long it would take to submit the FESAs to the Commssion. At that time, the Rabow team
told Mr. Darngton that, in Ranbow's view, the FESAs had been finalized the previous week;
that is, on December 9,2010.
34. The extensive FESA negotiations between Rabow and Idao Power, described
above, leadto the reasonable conclusion that Rainbow did commit itself to sell electrcity to
Idaho Power. Specifically, Raibow incured legally enforceable obligations to sell electrcity
to Idao Power on December 9,2010, when Raibow indicated to Idao Power in an email that
it was prepared to execute the fial FESAs that Idaho Power had submitted to Ranbow on
December 8, 2010.
35. Raibow incured legally enforceable obligations to sell electrcity to Idao
Power on December 13,2010, when Ranbow executed the FESAs and delivered them to
Michael Darngton at Idaho Power 's offce.
36. Idaho Power signed the FESAs on December 14,2010, and submitted them to the
Commssion on December 16, 20 i O.
CONCLUSION AND PRAYER FOR RELIEF
Based on the reasons and authorities citied herein, Rainbow respectfully requests that in
compliance with PURP A and consistent with the FERC's Cedar Creek Order, the Commission
enter its Order Modifyg Order No. 32300, such that the Fir Energy Sales Agreements be
approved. Alternatively, Ranbow respectfuly requests, to the extent ths pleading is deemed an
Application, that it be approved.
PETITION AN APPLICA TION-l 1
DATED this I day of March, 2012.
MCDEVITT & MILLER, LLP
B~~L
Attorney for Ranbow Rach Wind LLC
and Rainbow West Wind LLC
PETITION AND APPLICA TION-12
CERTIFICATE OF SERVICE
I hereby certify that on the L day of March, 2012, I caused to be served, via the
methodes) indicated below, tre and correct copies of the foregoing document, upon:
Jean Jewell, Secreta
Idaho Public Utilties Commssion
472 West Washington Street
P.O. Box 83720
Boise,ID 83720-0074
jjewell(gpuc.state.id. us
Hand Delivered X-
U.S. Mail ..'-
Fax ..'-
Fed. Express ..'-
Email ..'-
Donovan E. Walker
Idaho Power Company
1221 W. Idao Street
P.O. Box 70
Boise, ID 83707
dwalker(gidahopower.com
Hand Delivered
U.S. Mail
Fax
Fed. Express
Email
..'-~..'-
x
BY:~'\ ~ilf
Me EV& MiuJiRLp
PETITION AND APPLICA TION-13
FI ENGY SALES AGRE
(10 aM or Les)
Prjec Name: Rabow Ranch Wind Projec
Projec Nube 31615500
TIS AGREEM, ente into on th L day of beCbDu 2010 betee
Rabow Rah Wind, LL (Seller). and IDAHO POWE COMPAN. an Idao corpraon (Idao
Power). herer soetes refer to collecvely as "Pares" or individuy as "Par."
WISETH:
WHREAS. Seller wil design cons own mata and op an elecc gen~tion
faciity; an
WHREAS, Seller wishes to sell and Idao Power is wi to purha. fi elecc ener
proce by the Seller's Facilty.
THREFORE. In considetion of the mutu coves and agrents herin se for the
Pares agr as follows:
ARTICLE I: DEFINONS
As used in ths Agent and the appdice atthed hero, the followi ter
sha have the followig meags:
1.1 "Avaiabilty Shortal Prce" - The cut month's Mid-Columbia Mar En Cost mius
the cu month's Al Hour Ener Prce spifed in parph 7.3 of th Ag. If th
calcuon resuts in a vaue less th 15.00 MilslWh the resut sh be 15.00 MislWh.
1.2 "Business Days" - mea any caenda day tht is not a Saty. a Suny. or a NEC
regn holiday.
1
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EXHBIT 1 PAGE 1 OF 92
1.3 - "Caculated Net Energy Amount" - A monthy estite, prear and doented af the fact
by Seller, reewed and acced by the Buyer tht is the calculated monthy maum ener
deliveres (measur in kWh) for eah individua wid tubine, totaled for the Facty to
detere th tota energy th the Faclity could have delive to Idao Power dug tht
month bas upon: (1) each wid tuine's Nameplate Capacty, (2) Suffcient Pne Mover
avalable for use by each wid tubine dug the month (3) incidents of Forc Majeu, (4)
scheduled matence, or (5) incidents of Forcd Outages less Losss and Station Use. If the
duron of an event chactried as item 3, 4 or 5 above (meaed on eah individua
occurence and individua wid tuine) lats for less than 15 miutes, then the event wi not be
CQnsider in ths calculation. The Seller shal collect and mata actu data to supprt th
cacution and shal kee th data for a mium of 3 yea. .
1.4 "Commssion" - The Idao Public Utilities Commsion.
1.5 "Contrct Year" - The period commencing each caenda yea on the same calenda date as the
Opertion Date and endig 364 days therr.
1.6 "Delay Liquidated Damges" - Dam payable to Idao Power as calcuated in pagrph 5.3,
5.4, 5.5 and 5.6.
1.7 "Delay Period" - Al days past the Scheduled Operation Date until the Seller's Facilty achieves
the Option Date.
1.8 "Delay Prce" - The cut month's Mid-Columbia Market Energy Cost mius the cuent
month's All Hour Ener Price speified in pargrph 7.3 of ths Agrent. If th calculation
results in a value less than 0, the result of ths calculation will be O.
1.9 "Designte Dispatch Facilty" - Idao Power's System Opations Grup, or any subsequeit
grup designate by Idao Power.
1.10 "Effecve Date" - The date stated in the opeg paph of ths Fir Ener Sales
Agement rereseting the dae upon which ths Fin Energy Sales Agrement was fuly
executed by both Pares.
-2-
12/13/2010
EXHIBIT i PAGE20F92
1.11 "Facilty" - That electrc generion facilty descbe in Appedi B ofthis Agrent.
1.12 "Fir Energy Date" - The day commencing at 00:01 hour, Mounta Time, followig the day
th Seller ha satisfied the reents of Arcle IV and the Seller begi deliveg ener to
the Idao Power eleccal sysem at the Point of Deliver.
1.13 ''Forcd Outage" - a paral or tota reduction of a) the Facilty's capacity to proe and/or
deliver Net Energy to the Point of Deliver, or b) Idao Power's abilty to accet Net Ener at
the Point of Deliver for non-economic rens as a reult of Idao Power or Facilty: 1)
equipment faiur which was not the result of negligence or lack of preentative matence, or
2) respondg to a trmission provide curent order, or 3) unlaned prtative
matenace to repai equipment tht left unai would ret in faiur of equipment pror
to the planed matece peod, or 4) planed maance or constrction of the Facity or
electrcal lies requi to see ths Facilty. The Pares sha mae commerly reasnable
effort to perorm ths unplaed prentative matenace dun penods oflow wind
avaabilty.
1.14 "Heavy Load Hour" - The day hour beging at 7:00 am endig at 11:00 pm Mounta
Time, (16 hour) excludig all hour on all Sundays, New Year Day, Memona1 Day,
Indeendence Day, Labor Day, Thangivig and Chnstmas.
1.15 "Inveent Ener - Electrc energy Seller dos not intend to geerte. Inverent ener is
more parculy desnbe in pargrph 7.5 of ths Agreement.
1.6 "Interonnection Facilties" - All equipment spified in Idao Power's Schede 72.
1.17 "Intial Capacity Detenation" - The process by which Idao Power confs tht unde
norm or avege design conditions the Facity will generte at no more th 10 averge MW
pe month and is therfore eligible to be paid the publish rates in accrd with Commssion
Orer No. 29632.
-3-
12113/2010
EXHBIT'l PAGE 3 OF 92
1.18 "Light Lo Hour" - The day hour beginning at 11 :00 pm endig at 7:00 am Mounta Time
(8 hour), plus all other hour on al Sunys New Yea Day, Memori Day, Inendence
Day, Labor Day, Thgivig andChnsts.
1.19 "Losses" - The loss of e1eccal energy expresse in kiowatt hour (kWh) occu as a ret
of the trformtion and trmission of ener beee the Metg Point an the point the
Facilty's energy is deliver to the Idao Power elecca syte. The loss cacution formul
will be as speifed in Appdi B of ths Agrent.
1.20 "Market Ener Reference Price" - Eighty-five pet (85%) of the Mid-Columbia Maret
Energy Cost.
1.21 "Matel Brech" - A Default (pargrh 19.2.1) subjec to pargrph 19.2.2.
1.22 "Maxum Capacity Amount" - The maximum capacity (M) of the Facilty wil be as
specified in Appendix B of ths Agent.
1.23 "Mechacal Availabilty" - The peenge amount caculated by Seller with 5 days after the
end of each month of the Facilty's monthy act Net Energ divided by the Facilty's
Calculated Net Energy Amount for the applicable month. Any daages due as a result of the
Seller fallig short of the Mechacal Availabilty Guatee for each month sha be determed
in acordce with pargrh 6.4.4.
1.24 "Mechaca Avalabilty Guatee" sha be as defied in pargrph 6.4.
1.25 "Meterg Equipment" - All equipment spcied in Schedule 72, th Agrement and any
additional eqpment speified in Appdix B requi to meaur, reord and telemeter bi-
ditional power flows frm the Sellets Facilty at the Metng Point.
1.26 "Meterg Point" - The physical poin at which the Meterg Equipment is locte tht enales
accute meaement of the Test Energy and Net Ener deliveres to Idao Power at the Point
of Deliver for ths Facilty tht provides al necessa daa to adster ths Agrent.
1.27 "Mid- Columbia Market Ener Cos" - The monthy weighted averge of the day on-pe and
off-peak Dow Jones Mid-Columbia Index (Dw Jones Mid-C Index) prce for non-fi energy.
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EXHIBIT i PAGE 4 OF 92
If the Dow Jones Mid-Clumbia Index prce is discontiued by th reg agecy, both Pares
wil mutuly agree upon a relaent inde which is simar to the Dow Jones Mid-Columbia
Index. The selected relaceent index wil be conisent with other simar agrents and a
commonly usd index by the eleCca industr.
1.28 "Nameplate Capacity -The ful-load elecca qutiti~ assigned by th deigner to a generor
and its prie mover or other piec of eleccal eqipment, suh as trsformer and cirt
breer, unde stadaiz conditions, exprssed in ampere, kiovolt-ampees, kiowat, volts
or other appopnate unts. Usuly indicate on a naeplate attched to the individua mahi
or device.
1.29 "Net Energy - All of the electrc energy produced by the Facilty, less Station Use, less Losses,
exresse in kiowatt hour (kWh) delivered to Idao Power at the Point of Deliver. Subjec to
the terms of ths Agrent, Seller commts to deliver al Net Ener to Idao Power at the Point
of Deliver for the ful te of the Agrent. Net Energy does not include Invert Ener.
1.30 "Opertion Date" - The day commencing at 00:01 hour, Mounta Time, followig the day th
all requiements of pagrh 5.2 have be completed.
1.31 "P~in ofDelivei" - The location specified in Appdi B, wher Idao Power's and the
Seller's electrcal facilties are inteconneced and the energy frm ths Facity is deliver to the
Idao Power electrca syste.
1.32 "Prdet Electca Prctce" - Those praices, metods and equipment tht ar commonly and
ordiany used in elecca engiee and opetions to operte elecc eqpment lawfuy,
saely, depebly, effciently and economicaly.
1.33 "Scheduled Option Date" - The date specifed in Apdi B when Seller anticipates
achievig the Option Date. It is expeted tht the Scheduled Opertion Date provided by the
Seller sha be a renable estite of the date tht the Seller anticipates tht the Seller's Facilty
sh achiev the Opion Date.
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1.34 "Schedule 72" - Idao Power's Tarff No 101, Schedule 72 or its sucesor schedules as
aprove by the Commssion. The Seller shal be responsible to pay al costs of interconection
and integrtion of ths Facilty into the Ida Power eleccal syte as speed with
Schedule 72 and this Agrent.
1.35 "Seasn" .: The th peod idetifed in pagrh 6.2.1 of ths Agreeent.
1.36 "Spec Facilities" - Addtions or altertions of trsmssion and/or distbution lines an
trformer as descbed in Scheule 72.
. 1.37 "Station Use" - Elecc ener tht is used to opere equipment tht is.auxliar or otherse
relaed to the producton of eleccity by the Facilty.
1.38 "Suffcient Pre Mover" mean wind spee th is (1) equal to or grte than the genertion
unt's manufacer-specified mium levls reui for the genertion unt to produce energy
and (2) equa to or less th the genertion unt's maufact-speifed maum levels at
which the genertion unt ca safely produce energy.
1.39 "Surlus Ener - Al Net Ener prouce by the Sellers Facilty and deliver by the Facity
to the Ida Power elecca syst prior to the Opertion Date.
1.40 "Tot Cost of the Facilty" - The total cost of stnct, equipment and appurences.
1.41 "Win Ener Prducton Forect" - A forecast of ener deliveres from th Facilty provided
by an Idao Power adster wind forecasg modeL. The Facity shal be respnsible for an
alocted porton of the tota costs of the forecating modl as spefied in Appdix E.
ARTICLE II:. NO RELIACE ON IDAHO POWE
2. i Seller Indeendent Investigation - Seller warts and rereents to Idao Power tht in enterg
into ths Agrent and the undeg by Seller of the obligation se fort herin. Seller has
investgate and deterned tht it is capable of peormg herder and ha not relied upon
the advice, experence or experse ofIdao Power in coection with the trsacton
contemplated by ths Agen.
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2.2 Seller Indepdent Exps - Al professiona or exp includig, but nnt lite to, engiee,
attrney, or accunants; tht Seller may have consulte or relied on in ung the
trctons contemplated by ths Agent have be solely those of Seller.
ARTICLE il: WARS
3.1 No Warty by Idao Power - Any review, accetace or faiure to reew Seller's design
specifications, equipment or facilties shal not be an endorsent or a conftion by Idao
Power and Idao Power maes no warties, exprsed or implied, regadig any aspet of
Seller's deign specificaions, equipment or facilties, includig, but not limted to, saet,
durbilty, reliabilty, strgt capacity, adequacy or economic feaibilty.
3.2 Qualify Facilty Statu - Seller warts tht the Facilty is a ''Quag Facilty," as th ter .
is use and defied in 18 CF 292.201 et seq. Afer intial quaifcation, Seller wi tae such
st as may be reuid to matai the Facilty's Quifyg Facilty statu durg the te of
ths Agreeent and Seller's faiure to mainta Quifyg Facilty stat wi be a Matal
Breach of th Agement. Idao Power rerves the nght to reew the Faciity's Quag
Facilty sttu and associated support and compliance documents at anyte dug the term of
ths Agrent.
ARTICLE IV: CONDmONS TO ACCEPANCE OF ENGY
4.1 Pnor to the Fir Ener Date and as a condition of Idao Power's accce of delivenes of
ener from the Seller unde ths Agrent, Seller shl:
4.1.1 Submit proof to Idao Power that al liceses, perts or apprvas necesar for Seller's
opemtions have be obtaed frm applicable fedra state or local authonties,
includig, but not lited to, evidence of compliance with S~bpar B, 18 CFR 292.201 et
seq. as a ceed Quifg Facilty.
4.1.2 Opinon of Counl - Submit to Idao Power an Opinon Leer signed by an attrney
adtted to prctce and in goo standig in the State of Idao providig an opinon th
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Seller's lice, pets an aprova as se fort in pagrph 4.1.1 abve are legy
and valdly issed ar held in the nae of the Seller an based on a reonale
indepdent reew, counl is of the opinon th Seller is in sustti compliane with
said permts as of the dae of the Opinon Letter. The Opinon Le wil be in a form
accetale to Idao Power and wil acknowledge tht the attorny rederg the opinon
understands th Idao Power is relyig on said opon. Idao Power's aceptace of the
form wil not be unonably witheld. The Opinon Lett wil be govered by and
sh be interreed in accordce with the legal opinon acrd of the Amerca Bar
Associon Section of Business Law (1991).
4.1.3 Intial Capaity Detertion - Submt to Idao Power such data as Idao Power may
reasonably re to pedorm the Intial Capacity Dettion. Such data wi include
but not be limted to, Nameplate Capaity, equipment specifcations, prie mover data
resour charctstcs, norm and/or averge operati design conditions and Station
Use data. Upon reipt of ths inormtion, Idao Power wi reew the provided data
and if necessar, request addtiona data to complete the Initial Capacity Detertion
with a reaonable time.
4.1.3.1 If the Maxum Capaity spcifed in Appendi B of ths Agrent an the
cuulative manufact Nameplate Capacity rag of the individua genertion
unts at ths Faciity is less than 10 MW, the Seller sh submit detailed
maufact, veble da of the Nameplate Capacity ratis of the ac
individua generon unts to be inalled at ths Facilty. Upon verfication by
Idao Power that the data prvided establishes the combined Nameplate Capacity
ratig of the geeration unts to be intaed at ths Facilty is less than 10 MW, it
wil be demed th the Seller ha satisfied the Intial Capacity Deation for
th Facilty.
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EXHIBIT i PAGE8oF92
4.1.4 Nameilate Capacity - Submit to Idao Power maufac's and engieeg
docuentaton tht esblies the Nameplate Capaity of each individu geeron unt
th is included with ths entir Faclity. Upo recept of ths da Idao Power shl
review the provide daa and dee if the Nameplate Capaity specified is renable
based upon the maufacer's speifed generion rags for the specifc generon
unts.
4.1.5 Engiee's Cerfications - Submit an exected Engieers Cerfication of Design &
Constnction Adeuay and ar Engiees Cerifcation of Opons and Maiteance
(O&M) Policy as descnbe in Commssion Order No. 21690. These cerficates wi be
in the form specifed in Appendi C but may be modfied to the extent necssa to
recognze the diert engieeg disciplines providig the ceifcates.
4.1.6 Ince - Submit wntten proof to Idao Power of al inurce reuir in Arcle xm.
4.1.7 Internnection - Provide wntten confation frm Idao Power's delivery business
unt that Seller ha sasfed all interconnection reqirents.
4.1.8 Netork Resoure Designtion - The Seller's Facilty has been designte as a netork
resour capable of deliveng :f energy up to the amount of the Maxui Capacity.
4.1.8.1 Seller ha provide all inormtion reui to enble Idao Power to file an
intia trsmssion capacity request.
a) Results of the intial trssion capacity reest ar known and acble
to the Seller.
b) Seller acknowledges reponsibilty for al internnecion cost and any costs
associated with acuig adequae :f trmission capacty to enble the
project to be classified as an Idao Power deignted :f netork reoure.
c.) If the Facilty is located outsde of the Idao Power sece tetory, in
adtion to the above requiments, the Seller mus provide evidence th the
Seller ha acqui firm trssion capaity frm all re trttg
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entities to deliver the Facity's ener to an accble poin of deliver on
the Idao Power electrcal sytem.
4.1.9 Written Acceptace - Reues and obta wrtt confition from Idao Power tht al
conditions to acepce of ener have be fued Such wrtt confation sh be
provided with a coerialy renale tie followig the Seller's reuest and wil
not be unsonably witheld by Idao Power.
ARTICLE V: TE AN OPERTION DATE
5.1 Ter - Subjec to the provisions of pargrph 5.2 below, ths Agrent shl beome effecve
on the date fit written and shal contiue in ful force and effect for a period of twenty (20)
Contr Year fr the Opration Date.
5.2 Option Date - The Option Date may occu only afer the Facilty ha achieved all of the
followig:
a) Achieved the Fir Energy Date.
b) Commssion approval of ths Agrement in a form acceptable to Idao Power has
been received.
c) Seller has deonstted to Idao Power's satisfacon tht the Facity is complet and
able to provide energy in a consistt, reliable and safe maer.
d) Seller ha reuested an Opertion Date frm Idao Power in a wrtten formt.
e) Seller ha received wrtten confition frm Idao Power of the Opertion Date.
Ths conftion wi not be unsonably witheld by Idao Power.
5.3 Opertion Date Delay - Seller sh cause the Facilty to achieve the Opertion Date on or before
the Scheduled Option Date. Delays in the interonnecon and trmision netorlc upgre
stdy, design and constrction prss tht are not Force Majeur events aceped by both
Paries, shal not prvent Delay Liquida Damges frm being due and oWig as cacUate in
accordce with ths Agement.
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EXHIBIT i PAGE lOOF92
5.3.1 If the Option Date oc afer the Scheduled Option Date but on or.prior to niet
(90) days followig the Scheduled Opertion Dat, Seller sh pay Idao Power Delay
Liquidated Damges caculted at the en of eah calenda month afer th Scheduled
Option Date as follows:
Delay Liquidate Damges ar equa to ((Cut month's Intial Yea Net
Energy Amount as spifed in pargrph 6.2.1 divide by the numbe of days in
the curt month) multiplied by the number of days in the Delay Penod in the
curt month) multiplied by the curt month's Delay Prce.
5.3.2 If the Option Date doe not occur with niety (90) days followig the Scheded
Opration Date, the Seller sha pay Idao Power Delay Liquidad Damges, in adtion
'.
to those provided in pargrh 5.3.1, caculed as follows:
Fort-five dollar ($45) multiplied by the Maxum Capacty with the Maxum
Capacity being mea in tW.
5.4 If Seller fals to achieve the Opertion Date with niety (90) days followig the Scheduled
Opertion Date, such faiure wi be a Matenal Breach and Idao Power may tenninte th
Agement at any tie until the Seller curs the Mater Breh. Addtiona Delay Liquidate
Damages beyond those calcuate in 5.3.1 and 5.3.2 will be calcuted and payable using the
Delay Liquidated Damge calcuion desc"b in 5.3.1 above for al days exceeg niety (90)
days past the Scheduled Opetion Date until such tie as the Seller cus ths Mateal Breh or
Idao Power tetes ths Ageeent.
5.s Seller sha pay Idao Power any calcuated Delay Liquidate Damges wít1 seven (7) days of
when Idao Power calcuates and presents any Delay Liquidated Damges bill to the Seller.
,
Seller's faur to pay these dages with the speified time will be a Mate Brech of ths
Agrent and Idao Power shl drw fuds frm the Delay Secty provided by the Seller in
an amount equal to the cacuated Delay Liquidaed Damges.
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EXHIBIT 1 . PAGE i i OF 92
5.6 The Pares agr tht the dages Idao Power would incu due to delay in the Faclity
achievg the Opertion Date on or befor the Scheded Opon Dat would be diffçut or
impoible to prect with cety, and th the Delay Liquida Damges ar an apppnate
approxition of such daages.
5.7 Pnor to the Seller exectin this Agreeent, the Seller sha have agree to and exected a Letter
of Undertadig with Idao Power tht contai at a mium the followig reirents:
a) Seller ha fied for internnecon and is in complice with all payments
and requirents of the interonnecion process.
b) Seller ha prvided al inormtion reuir to enle Idao Power to fie an
intial trasmission capacity rees.
5.8 . With th (30) days of the dae of a fi non-appeable Commssion Orer as speified in
Arcle XX approvig ths Agrent; Seller sha post liquid secuty ("Delay Secunty") in a
for as descnbed in App D equa to or exce the amount calculated in pagrph 5.8.1.
Failure to post ths Delay Secunty in th time speified abve wil be a Mateal Breh of thi
Agreeent and Idao Power may tete ths Agrent.
5.8.1 Delay Secuty The grter of forty-five dollar ($45) multiplied by the Maximum
Capacity with the Maxum Capacity being measud in kW or the sum of th month's
estite revenue. Wher the estiated the month of revenue is the estimated revenue
associated with the first thee full month followig the estimted Scheduled Opion
Date, the estimated kWh of energy prouction as specified in parph 6.2.1 for. those
thee months multiplied by the All Hour Ener Pnce spifed in pagrph 7.3 for
each of those thee months.
5.8.1.1 In the evènt (a) Seller provides Idao Power with cefication tht (1) a
tieneration inernnon agrent spifg a schedule th wil enble th
Facilty to achieve the Option Date no .later th the Scheduled Opertion
Date has be completed and the Seller ha paid al red internnecon
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EXHIBIT i PAGE 12 OF 92
costs or (2) a genertion inteonnecion agrent is substaly coplete and
all materal costs of inteecon have be idetied and ag upo and
the Seller is in compliane with al ter an conditions of the generon
interonnecon agent, the Delay Secty calcul in accordce with
pargraph 5.8.1 ~ll be rece by ten peent (10%).
5.8.1.2 If the Seller ha reved a reucton in the calculated Delay Secty as speed
in pargrph 5.8.1.1 and subsequently (1) at Seller's reuest, the generion
interonnecon agrent speifed in pargrph 5.8.1.1 is revised and as a
result the Facilty wil not achieve its Option Date by the Schedued Opertion
Date, or (2) if the Seller does not mainta compliance with the genertion
interonecion agrment, the fu amount of the Delay Securty as caculate in
pargraph 5.8.1 wil be subjec to reintement and wil be due and owin with
five (5) business days frm the date Idao Power reuess restateent. Faiur
to timely reintate the Delay Securty wil be a Materal Breh of ths
Agrent.
5.8.2 Idao Power sha relea any reaig secty posted herunde aft al
calculated Delay Liquidated Damges are paid in fu to Idao Power and the
ealier of: 1) th (30) days afer th Opration Date has be achieved or 2)
sixt (60) days af the Agrent ha be tente.
ARTICLE VI: PURCHAE AN SALE OF NE ENGY
6.1 Deliver and Acctace of Net Energ - Except when either Pars peormce is excus as
provided her Idao Power wil purchae and Seller wi sell all of the Net Ener to Idao
Power at the Point of Deliver. Al Indverent Ener pruced by the Facilty wi also be
deliver by the Seller to Idao Power at the Point of Deliver. At no tie will the tota amount
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of Net Energy and/or Indverent Ener prce by th Facilty an deliver by the Seller to
the Point of Deliver exce the Maxum Capacity Amount.
6.2 Net Energy Amounts - Seller intends to prouce and deliver Net Energy in the following mony
amounts. Thes mounts sha be consistt with the Mechacal Avalabilty Guate.
6.2.1 Intial Yea Monthy Net Ener Amounts:
Month kWh
Sean 1
Marh
Apri
May
Season 2
July
Augu
Novem
Decbe
Sean 3
June
Setebe
October
Janua
Febru
5,463,612
5,707,523
5,317,265
4,731,878
4,634,314
4,536,749
4,634,314
4,780,661
4,585,532
4,683,096
4,829,443
4,634,314
6.3 Unless excused by an event of Force Majeu, Seller's failur to deliver Net Energy in any
Contr Yea in an amount equal to at leat te peent (10%) of the sum of the Intia Yea
Monthly Net Energy Amounts as spified in pagrph 6.2 sh constitute an event of default.
6.4 Mechacal Availabilty Guartee - Afer the Optiona Date ha bee esablished the Facility
sha achieve a mium monthy Mechaca Availabilty of eighty-five perent (85%) for the
Facilty for eah month durg the fu ter of ths Agrent (the "Mechaca Availabilty
Guatee"). Failur to achieve the Mechaca Avaiilty Guatee sh resut in Idao
Power cacu~ing dages as spifed in pagrph 6.4.4.
6.4.1 At the sae time the Seller provides the Monthy Power Prcton and Avabilty
Report (Appdi A), the Seller shal prvide and cefy the caculation of the Faciltys
curt month's Mechacal Avalabilty. The Seller shal include a sum of al
informtion usd to cacuate the Calculated Net Energy Amount includg but not
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EXHIBIT 1 PAGE 140F92
lite to: (a) Forced Outaes, (b) Forc Majeu events, (c) wid spe an the im
on generon output, and (c) scheduled matence and Station Use inormtion.
6.4.2 The Seller shl mata and ret for (3) th yea detled doumentaon supportg
the monthy cacultion of the Facilty's Mechaca Avalabiity.
6.4.3 Idao Power sha have the right to reew and audit the docentation supprtg the
caculation of the Facilty's Mechaca Availbilty at renable ties at the Sellers
. offce.
6.4.4 If the cut month's Mechancal Avaiabilty is less th the Mechacal Avaibilty
Guatee, dages shl be equal to:
((85 pert of the month's Calcu Net Energy Amount) mius the
month's ac Net Energ deliveres) multiplied by the Availabilty Shortfall
Prce.
6.4.5 Any dages calcuated in pargrh 6.4.4 wi be offset against the curt month's
energy payment. If an unpaid bace rems afr the daes ar offet agai the
energ payment, the Seller shall pay in ful the remg baance with th (30) days
of the date of the invoice.
ARTICLE VII: PURCHASE PRICE AN MEOD OF PAYMNT
7.1 Heavy Load Puhase Prce - For al Net Energy recived durg Heavy Lod Hour,
Idao Power wil pay the non-levelid energy prce in acordance with Commsion Order
31025 adjusted in accordace with Comssion Orer 30415 for Heavy Load Hour Ener
deliveries, adjusted in accorce with Comssion Or 30488 for the wind inteon chae,
and with seonaiztion facors applied
Year
Seaon 1 - (73.50 %)
MilslWh
Season 2 - (120.00 %)
MilslWh
Seaon 3 - (100.00 %)
MilWh
2010
2011
2012
40.52
42.80
45.32
66.15
69.87
74~00
55.12
58.24
61.66
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EXHIBIT 1 PAGE is OF 92
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
47.71
50.29
53.05
54.64
56.20
57.90
59.57
61.29
63.33
65.46
67.67
69.97
72.35
74.38
76.62
78.96
81.38
83.87
87.22
90.15
93.19
78.18
82.74
87.64
90.46
93.23
96.25
99.21
102.27
105~90
109.67
113.59
117.66
121.90
125.49
129.20
133.03
136.97
141.04
146.51
151.30
156.26
64.92
68.42
72.17
74.34
76.61
79.12
81.59
84.14
87.16
90.31
93.57
96.97
100.50
103.49
106.58
109.77
113.06
116.45
121.01
125.00
129.13
7.2 Light Load Puha Prce - For al Net Ener reeived dug Light Load Hour, Idao Power
wil pay the non-levelied energy price in accrdce with Commssion Order 31025 adjus in
accordace with Commssion Orde 30415 for Light Lod Hour Energy deliveres. adjuste in
accordace with Commssion Orde 30488 for the wid integrtion chage. and with
sealtion factrs applied:
Sean 1 - (73.50 %)Sea 2 - (120.00"%)Season 3 - (100.00 %)
Year MilslWh MilslWh MilslWh
2010 35.59 58.11 48.42
2011 37.88 61.84 51.54
2012 40.40 65.95 54.96
2013 42.79 69.86 58.22
2014 45.37 74.06 61.72
2015 48.13 78.91 65.48
2016 49.72 81.73 67.64
2017 51.28 84.50 69.76
2018 52.97 87.51 72.07
2019 54.65 90.47 74.35
2020 56.37 93.53 76.86
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EXHIBIT 1 PAGE 16 OF 92
2021 58.41 97.16 79.88
2022 60.54 100.93 83.03
2023 62.74 104.85 86.29
2024 65.04 108.92 89.69
2025 67.43 113.16 93.22
2026 69.45 116.76 96.21
2027 71.55 120.47 99.30
2028 73.70 124.29 102.49
2029 76.03 128.24 105.78
2030 78.52 132.31 109.17
2031 81.87 137.77 113.73
2032 84.80 142.56 117.72
2033 87.84 147.52 121.85
7.3 All Hour Energy Prce - The price to be used in the calculaton of the Suilus Ener Prce and
Delay Price sha be the non-Ievelied energy price in accordce with Commssion Orde 31025
adjused in acordace with Comssion Order 30488 for the wid integrtion chae, and with
sesonaion facors applied:
Year
Seaon 1 - (73.50 %)
MilWh
Seaon 2 - (120.00 %)
Mils/Wh
Seaon 3 - (100.00 %)
Mis/Wh
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
38.33
40.61
43.13
45.52
48.10
50.86
52.45
54.01
55.71
57.37
59.10
61.4
63.27
65.48
67.78
70.16
72.18
74.28
76.58
79.00
81.49
62.57
66.30
70.42
74.33
78.85
83.75
86.58
89.35
92.36
95.32
98.38
102.01
105.78
109.70
113.77
118.01
121.60
125.31
129.14
133.09
137.16
52.14
55.26
58.68
61.93
65.44
69.19
71.36
73.48
75.88
78.35
80.90
83.92
87.07
90.33
93.73
97.26
100.25
103.35
106.53
109.82
113.21
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EXHIBIT 1 PAGE 17 OF 92
2031
2032
2033
84.84
87.77
90.81
142.62
147.41
152.37
117.77
121.76
125.89
7.4 Suilus Energy Pnce - For all Sl:lus Ener, Idao Power sha pay to the Seller the cut
month's Market Ener Referce Pnce or the Al Hour Energy Pnce spfied in pargrph
7.3, whichever is lower.
7 oS Inver Energy-
7.5.1 Indverent Ener is electnc en prced by the Facilty, expressed in kWh,
which the Seller deliver to Idao Power at the Point of Deliver that exce 10,000
kW multiplied by the hour in the specfic month in which the energ was deliver.
(For exaple Janua conta 744 hour. 744 hour times 10,000 kW = 7,440,000
kWh. Energy delivere in Janua in excess of 7,440, 000 kWh in ths exple
would be Inadvertt Ener.)
7.5.2 Although Seller intends to design an opete the Facilty to genere no more th
10 average MW and therfore does not inted to generte Inadverent Ener,
Idao Power will acept Inverent Energy that does not excee the Maxum
Capacity Amount but wil not purha or pay for Inverent Energy.
7.6 Payment Due Date - Undiputed Energy payments, less the Wind Energy Prduction Fortig
Monthy Cost Allocon (MCA) desbed in Appendi E and any other payments due Idao
Power, wil be disbur to the Seller with th (30) days of the date which Idao Power
reeives and acts the documentation of the monthy Mechaca Avaiable Guarte and the
Net Energy actuly delivered to Idao Power as speced in Appedix A.
7.7 Contiuig Jurcton of the Commssion -Ths Agrent is a special cotr and, as suh, the
rates, ter and conditions contaed in ths Agrent wil be constr in accordace wit
Idao Power Company v. Idao Public Utities Commssion an Afn Energy Inc., 107 Idao
781, 693 P.2d 427 (1984), Idao Power Company v. Idao Public Utilties Commssion, 107
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Idao 1122,695 P.2d 1 261 (1985), Afon Ener Inc. v. Idao Power Company, 111 Idao 925,
. 729 P.2d 400 (1986), Section 210 of the. Public Utilty Regulatory Policies Act of 1978 and 18
CF §292.303-308.
ARTICLE VI: ENONMENAL ATIUTS
8.1 Seller re ownerhip under ths Agrent of gr tags and renewable energy cerifcates
(RCs), or the equivaent envinmenta attbutes, ditly associated with the prouction of .
ener frm the Sellers Facilty sold to Idao Power.
ARTICLE IX: FACILIT AN INRCONNCTON
9.1 Design of Facilty - Seller wil desgn constct, inl, own opete and mata the Facilty
and any Seller-owned Interonnecon Facilties so as to allow safe and reliable genertion an
delivery of Net Ener and Inadverent Energy to the Idao Power Point of Delìver for the fu
ter of the Agrent.
9.2 Interconnecon Facilities - Excet as spefically provide for in ths Agreeent, the re
Interconnecon Facilties wil be in accordce with Schedule 72, the Genertion Interconnecon
Process and Appendi B. The Seller is resnsible for al costs asociated with ths equipment as
specfied in Schede 72 and the Genertion Internnection Process, includig but not limted to
iiti costs incur by Idao Power for equipment costs, ination costs and ongoing monthy
. Idao Power opetions and matence expens.
ARTICLE X: METEG AN TELEMETRY
10.1 Meterg - Idao Power shaL, for the accunt of Seller, provide, inL, and mata Meterg
and Telemet Equipment to be locd at a mutuy ag upn location to record and mea
power flows to Idao Power in accordace with ths Agent and Schedule 72. Th Meterg
Eqpment wi be at the location and the ty reir to mea, record and rert the
Facilty's Net Ener, Station Use, Inverent Ener and maum ener deliveres (lW) at
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ARTICLE XI - RECORDS
11. Maitenace of Record - Seller sha maita at the Facilty or such other loction mutuy
acceptable to the Pares adequate tota genertion, Net Ener, Staton Use, Invert Ener
and maum generaon (kW) reord in a form and content acceptale to Idao Power.
11.2 Inspection - Either Par, after resonable notice to the other Par, sh have the right, dug
normal business hour, to inpect and audit any or al generon Net Energ, Station Use,
Inverent Ener and maimum genertion (kW) rerds peing to the Sellers Facilty.
ARTICLE XI: OPERATIONS
Forced Outage, a tempora discnnecion under Schedule 72 excee twenty (20) days,
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begig with the twent-fi day of such interption, cuaient or reucton, Seller
will be deed to be deliverg Net Energy at a ra equivaent to the pro ra day
averge of the amounts. speifed for the applicable month in pargrh 6.2. Idao Power
will notify Seller when the interpton, curlment or recton is terted.
12.2.2 If in the resoble opinon of Idao Power, Sellers operon of the Facilty or
Interconnecon Facities is unsafe or may otheris adverly afec Idao Powers
. equipment, pennel or serce to its cuomer, Idao Power may temly
discoec the Facilty frm Idao Power's tr~ssionldibuion sy as spified
with Schedule 72 or tae such other reble steps as Idao Power dee
appropnat.
12.2.3 Under no circumce will the Seller deliver Net Ener and/or Indverent Energy
frm. the Facilty to th Point of Deliver in an amount tht excees the Maximum
Capacity Amount at any moment in tie. Seller's faiur to lit deliveres to the
Maxum Capacity Amount wi be a Matenal Breach of ths Agrment.
12.2.4 If Idao Power is unble to accet the ener from ths Facilty and is not excu frm
accetig the Facily's energy, Idao Power's dages shl be lited to only the value
of the estited energy that Idao Power was unable to accet. Idao Power will have
no respnsibilty to pay for any other costs, lost reenue or con.sequential daes the
Facilty may incu.
12.3 Scheduled Maitence - On or before Janua 31st of eah caenda yea, Seller sh submit a
wntt propOsed matence schedle of signifcant Facilty matence for tht calenda yea
and Idao Power and Seller shl mutuy agree as to the aceptabilty of th prose schedle.
The Pares deteration as to the accepabilty of the Seller's tietle for scheduled
matenance wil tae into consideon Prude Elecca Prctices, Idao Power syste
reuients and the Seller's preer schedule. Neither Pary shl unonably withold
actace of the prose matece schedule.
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12.4 Matece Cooaton - The Seller and Idao Power sha to the exen prca, cordte
their respve lie and Facty matece schees suh tht they occu simultaeously.
12.5 Conta Prior to Cuent - Idao Power wil mae a renable attemt to cotac the Seller
prior to exercising its rights to intemipt internnection or cul deliveres frm the Seller's
Facili. Seller undeds th in the ca of emergency cices, re tie opertions of
the elecca syste, and/or unlaed events Idao Power may not be able to prvide notice to
the Seller prior to interption, curent, or recton of electcal ener deliveres to
Idao Power.
ARTICLE Xil: INEMICATION AN INSURCE
13.1 Indemcation - Each Par shal agree to hold haess and to indemfy the other Par, its
offcer, agents, afi1iate, subsidiares, part company and employee agaist all loss, daage,
exp and liabilty to th persns for injur to or death of peon or inju to propey,
proxitely causd by the inemg Par's (a) conscton, ownerp, opertion or
maintence of, or by faiur of, any of such Par's works or facilties us in connecon with
ths Agrent, or (b) negligent or intention acts, errs or omissions. The indemfyg Par
shal, on the other Pary's request, defend any sut asserting a clai covered by ths indety.
The indefyg Pary shal pay all doumented costs, includig reonable attrney fee tht
may be incured by the other Par in enorcing ths indemty.
13.2 Inurance - Dug the term of ths Agrment, Seller sha seur and contiuously ca the
followig insurce coverage:
13.2.1 Compreenive Gener Liabilty Ince for both boy injur and prpe dage
with limts equal.to $1,000,000, each occurce, combined single limt. The deductible
for such ince sh be costent with curnt Insurce Inustr Utilty praces for
simar propert.
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13.2.2 The above ince covege sh be pla with an insurce compay with an AM.
Bet Company rati of A- or be and sha include:
(a) An endorsement nag Idao Power as an adtion insurd an loss payee as
applicable; and
(b) A provision sttig tht such policy sha not be caceled or the limts of liilty
reduce without sixty (60) days' pnor wntt notice to Idao Power.
13.3 Seller to Prvide Cerificate of Insuce - As reir in pagrph 4.1.6 herin and any
therer, Seller sh fuh Idao Power a cerficate of insuce, togeter with the
endorsements reed therin evidecig the coverge as se fort above.
13.4 Seller to Notify Idao Power of Loss of Covege - If the inure coverge reui by
pargrph 13.2 shal lapse for any reasn, Seller will imedately notify Idao Power in wntig.
The notice wil advise Idao Power of the spific reason for the lapse and the stes Seiler is
tag to retate the coverge. Failure to provide ths notice and to expedtiously retate or
relae the coverage wil cotitute a Materal Breh of ths Agrent.
ARTICLE XIV: FORCE MAUR
14.1 As used in this Agrent, '.Forc Majeu" or "an event of Force Majeue" meas any caus
beyond the contrl of the Seller or of Idao Power which, despite the exerse of due digence,
such Par is unble to prevent or overme. Forc Majeu includes, but is not limted to, ac of.
God fie, flood, stor, war, hostilities, civil stfe, stnes and other labor distubaces,
. earquaes, fi, lightng, epidemcs, sabotage, or chages in law or regulation ocg afer
the Effecve Date, which, by the exerise of reonale foresight such par could not rely
have bee expeed to avoid and by the exeris of due diigence, it shl be unble to overme.
If either Par is reder wholly or in pa unable to peror its obligations un ths
Agent because of an event of Forc Majeu, both Pares shal be excu frm whteer
peo~ce is afected by the event of Forc Majeu, provide th:
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(1) The non-performg Par shaL, as soon as is resonably possible af the
occuence of the Force Majeu, give the other Par wrtten notice descbing
the paicuar of the occurce.
(2) The SUpension of perorce shl be of no grr sce and of no longe
durtion th is requid by the even of Forc Majeu.
(3) No obligations of either Par which arse before the occuce causing the
suspeon of peormce and which could and should have be fuy
peormed before such occurce shal be excus as a result of such
occuence.
ARTICLE XV: LIAILITY: DEDICATION
15.1 Limtation of Liabilty. Nothg in ths Agrent sha be consed to create any duty to, any
stadad of car with referce to, or any liabilty to any peron not a Pary to ths Agrent.
Neither par sha be liable to the other for any indi, special, consequential, nor puntive
dages, excep as expressly authoried by ths Agreeent.
. 15.2 Dedcation. No undertakg by one Par to the other under any proviion of ths Agrent
shl costitute the decaton of th Par's system or any porton therf to the Par or the
public or affect the status of Idao Power as an indepdet public utility corpration or Seller as
an indepdent individu or entity.
ARTICLE XVI: SEVERA OBLIGATIONS
16.1 Except wher spificay stated in ths Agrent to be other, the duties, obligations and
liabilties of the Pares ar intended to be sever and not joint or collective. Nothg contaed
in th Agement sha ever be const to create an asociatio~ trt, parerhip or joint
vettue òr imse a trst or parerhip duty, obligation or liilty on or with regato either
Pary. Each Par sha be individuly and severy liable for its own obligation unde ths
Agrent.
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ARTICLE XV: WAIR
17.1 Any waiver at any tie by either Par of its rights with resp to a default unde th Agrt
or with reec to any other matter arsing in connecon with ths Agent shal not be
deemed: a waiver with respet to any subseqen default or other matt.
ARTICLE XV: CHOICE OF LAWS AN VE
18.1 Th Agreeent shl be conmed and interreed in accordace with the laws of the State of
Idao without referce to its choice of law provions.
18.2 Venue for any litigaon aring out of or related to ths Agent wil lie in the Disct Cour.of
the Four Judicial Distct of Idao in and for the County of Ad.
ARTICLE XI: DISPUTS AN DEFAULT
19.1 Disputes - All disputes related to or arsing under th Agrement, includig, but not lited to,
the interpretation of the term and conditions of ths Agrent, wil be submitted to the
Commssion for resolution.
19.2 Notice of Default
19.2.1 Defaults. If either Par fais to peorm any of the ters or conditions of ths
Agrement (an "event of default"), the non-defaultig Par shall cause notice in
wntig to be given to the defaulting Par, spifyg th maer in which suh
default oced. If the defaultig Par shall fail to cu suh default with the six .
(60) days after sece of such notice, or if the defaultig Par renably
deonstrtes to the oter Par tht the default can be cur with a commerialy
reanable time but not with such sixy (60) day perod and then fails to diigetly
purue such cur, then the non-defautig Par may, at its option, ter th
Agent and/or pur its leg or equitable reedes.
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19.2.2 Mate Breches - The notice and cu prvisions in parph 19.2.1 do not aply
to defaults ideed in th Agrent as Mate Breahes. Mater Brehes mus
be cud as expouy as poble followig occe of the brh.
19.3 Secty for Perormce - Pror to th Operon Dae and ther for the fu ter of ths
Agrent, Seller wi provide Ido Power with the followig:
19.3.1 Ince - Evidece of compliance with the provisions of pagrph 13.2. If Seller
fas to comply, such faiur wi be a Mater Breh and may only be cured by
Seller supplyig evdece th th re inurce coverge ha be relace or
reitated
- 19.3.2 Engieer's Cercations - Ever th (3) yea afer the Operation Date, Seller will
suly Idao Power with a Cerfication of Ongoing Oprations and Maitee
(O&M) frm a Regier Prfession Engieer liced in the State ofIdao, which
Cerficaon of Ongoing 0 & M sha be in the for specified in Appdi C. Seller's
failur to supply the reui ceficate wi be an event of defalt. Such a default
may only be cu by Seller providig the re cecae; and
19.3.3 Licenes and Permts - Dug the ful ter of ths Agment, Seller shal mata
compliance with al perts and lices descbed in pargrph 4.1.1 of th
Agrment. In addition, Seller will suply Idao Power with copies of any new or
additiona pets or licens. At least ever fift Contr Year, Seller will updte the
doentation descbed in Pargrh 4.1.1. If at any tie Seller fas to mata
compliance with the-perts and lice descrbed in pargrh 4.l.l or to provide
the doentaon reui by ths pagrh, suh faiur wil be an event of default'
and may only be cud by Seller submittg to Idao Power evdece of coinli
fr the perttg agency.
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ARTICLE XX: GOVERNAL AUTORITION
20.1 Ths Agent is subjec to the jursdcton of those goverenta agencies havig contrl ove
either Par of ths Agrt.
ARTICLE XX: COMMISSION ORDER
21.1 Ths Agrement sha beome fiy effective upon the Commssion's apval of al ter an
proviions herf without chage or condition and declartion that al payments to be mae to
Seller hereunde sha be allowed as prtly incued expens for ratemg puses.
ARTICLE XX: SUCCESSORS AN ASSIGNS
22.1 Ths Ageeent and al of the ters and provisions herf shal be bindig upon and inur to the
benefit of the respective succssors and assigns of the Paries her, excet tht no assignen
heref by either Par sh become effecive without the wrttn const of both Pares being
fi obtaed. Such const sh not be uneaonaly witheld. Notwithstandig the foregoing,
any par which Idao Power may consolidate, or ino which it may mere, or to which it. may
conve or trfer substantially all of its electnc utity assets, shal automaticaly, without fuer
ac, and without need of consent or approval by the Seller, succee to al ofIdao Power's rights
obligations and inerst under th Agent. Ths arcle shal not prevent a fianing entity
with rerded or sec rights from exersing al rights and reedes available to it unde law
or contrct. Idao Power sha have the right to be notifed by the fincing entity tht it is
exercsing such rights or reedes.
ARTICLE XX: MODIFICATION
23.1 No modfication to ths Agremeit shall be vad uness it is in wrtig and signed by both Pares
and subsequently appved by the Commssion.
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ARTICLE XX: TAXS
24.1 Each Par shl pay befor deliquency al taes and other goverental chages which, iHaied
to be pad when due, could ret in a lien upn the Facilty or the Interecon Facilties.
ARTICLE XXV: NOTICES
25.1 Al wrtten notice unde th Agent sb be died as follows and sha be conside
delivered when faxed, e-maed and coed with desit in the U.S. Mai, fit-class, postage
prepaid, as follows:
To Seller:
Orginal document to:
Rabow Rach Wind LLC
Amerca Wind Grup, LLC-Manger
Att: Bri D. Jackson
2792 Dese Wind Road
Oasis, Idao 83647-5020
E-mai: Brian~ercaWind.net
COlY of docuent to:
Inovative Energy Inc.
P.O. Box 11112
Jacksn, WY 83002
Att: Ben Baret
Bbbarlet~gm1.com
307-690-5288
To Idao Power
Orgial docuent to:
Senor Vice Prident, Power Supply
Idao Power Compay
P.O. Box 70
Boise, Idao 83707
Emal: Lgrw~idaopwer.com
COlY of docent to:
Cogenertion and Smal Power Prodon
Idao Power Company
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P.O. Box 70
Boise, Idao 83707
E-mai: raphi~idaopower.com
Either Pary may chage the conta peron and/or adss inormtion lied above, by prvidig wntt
notice frm an autorized peon represetig the Par.
ARTICLE XXI: ADDmONAL TES AN CONDmONS
26.1 Ths Agrent includes the followig apdice, which are atthed hereto and included by
refece:
Appendi A
AppediB
AppendiC
AppendiD
AppediE
Monthy Power Production and Availabilty Rep
Facilty and Point of Delive
Engiees Cerifications
Form of Liquid Securty
Wind Ener Prduction Forecstig
ARTICLE XXVU: SEVILIT
27.1 The invadity or unenorceabilty of any ter or proviion of th Agrent sh not afec the
. valdity or enorceabiity of any other te or provision and ths Agrent shll be constred
in all other resp as if the invad or unenorceable ter or provision wer omitted.
ARTICLE:x: COUNARTS
28.1 Ths Agrent may be execute in two or more counter, each of which shl be deeed an
origial but all of which together sha constute one and the sae intrent.
ARTICLE XXIX: ENT AGREEM
29.1 Ths Agreeent constitutes the enti Agrent of the Pares conceg the subjec matter
hereof an supeedes all pror or contemporaeous ora or wntten agrents beeen the
Pares cocerg the subject maer heref.
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IN WITSS WIREF. The Pares heto have caus th Agrent to be execute
in their reective naes on the dates se fort below:
Idao Power Compay
By l-~,n, ~)
U Lisa A Grow
Sr. Vice Presidet, Power Supply
Dated (2..ILlo
"Idao Powet
Rabow Rah Wind LLC
~~~
Manger of Amercan Win Grup LLC
Amercan Win Group LLC
bei the authori mager of
Rabow Rach Wind LLC
Dated IJ. -)3 ~ :LIO
"Sellet
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APPENDIX A
A -1 MONTY POWER PRODUCTION AN AVAIILIT REORT
At the end of each month the followig re docentaion wil be submitt to:
Idao Power Company
Att: Cogeneron and Smal Power Prduction
PO Box 70
Bois, Idao 83707
The meter readigs reuir on ths reor will be th redings on the Idao Power Meter Equipment
meag the Facilty's tota energ proucton delivered to Idao Power and Staon Usage and the
maum genered energy (kW) as rerde on the Meterg Eqpment and/or any other requred
energy measents to aduately adster ths Agent. Ths docent shl be the docent to
enable Idao Power to bein the energy payment calculation and payment process. The meter regs
on ths rert shall not be used to cacuate the actu payment, but insea wi be a check of the
automated meter redig inormtion tht wil be gatherd as decnbed in ite A-2 below:
This rert shall also includ the Seller;s calculation of the Mechacal Avaiabilty.
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Idah Power Company
Cogeneration and Sma Power Producton
MONTHY POWE PRODUcrON AN AVAIILIT REPORT
Month Yea
Prject Name
Address
Projec Number:
Phone Number:
City State Zip
Net Facilty
Output
Station
Usage
Station
Usage
Metered
Maxim Genertin
Meter Number:
End of Month kWh Meter Readi:
Beg of Month kWh Meter:
Dierenee:
Times Meter Constant:
kWh for the Month:
Metered Demad:
kW
/
Net Generation
Mechanical Avaabilty Guarante
Seler Calculated Mechanical AvaDbilty
As specified in th Ageement, the SeBer sha include with th monthy report a su statement of the
Mechacal Avaiabilty of ths Faeity for the calendar month. Ths summary shal include detas as to how
the SeBer calculated ths value and summ of the Faeity data us in the calcultion. Idaho Power and
the SeBer shal work toether to mutuy develop a summary report that provides the requied data. Idaho
Power resrves the rit to revew the detaied data use in ths calculation as alowed with the Ageement.
DateSigtue
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A-2 AUTOMATED METER READING COLLECTION PROCESS
Monthy, Idao Power wil use the prvided Meterg and Telemet equipment and presse to collec
the met reg inormon frm the Idao Power prvide Metg Equiment tht measur the Net
Energy and ener deliver to supply Staon Use for the Facilty reorde at 12:00 AM (Midnght) of
the last day of the month.
The Dieter inomition collected wil include but not be limte to ener proon, Station Use, the
maum genertion (kW) and any other requi energ meaurents to adtely adster ths
Agent.
A-3 ROUT REORTIG
Idao Power Contact Inormon
Daiy Ener Prduction Reporg
Call day by i 0 a.m., i -800-356-4328 or i -800-635-1093 and leave the followig
inortion:
. Projec Identification - Prject Name and Project Number
. Cut Met Reag
. Estiated Genertion for the cut day
· Estimated Geertion for th next day
Plaed and Unplaned Prjec outages
Call 1-800-345-1319 and leave the following inormtion:
· Prject Idetification - Prject Name and Prject Numbe
. Aproximate tie outage occur
Estied day and tie of projec comi back onine
Seller's Conta Inormation
24-Hour Prjec Qptiona Contact
Name:
Telephone Nuber:
Cell Phone:
Bna D. Jacksn
208-796-2222
208-859-1882
Prject On-site Conta inormaton
Telephone Numbe:
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APPENIXB
FACILIT AN POIN OF DELIVY
Project Name: Rabow Ranch Wind Prjec
Prject Numbe 31615500
B-1 DESCRION OF FACILIT
(Must include the Nameplate Capacit rating an V AR capailty (both leaing and laggng) of all
generation units to be included in the Facility.)
The failty wil be comprise of approxitely ten (l0) wid tubines with a cuulative
nameplate raing tht will not excee the Maxum Capacity Amount as spified in Item B-4
and not less th 18 MW. At the tie ths agrent was executed, selecon of the tubine
. manufactu ha not been fiize by the Seller. At the tie the Seller prvides the deed
descrption of the wind tuines seleced and quatity to be included in the Idao Power
Intennecon press, the Seller will provide ths sae inormation to be included in ths
Agreeent. The Facilty is curtly considerg use of up to nie (9) Nordex NI00 wind tubines
(Nameplate Capacity ratig up to 2.5MW ¡tuine, 0.95 lea0.95 lag power facor) or up to 11
DeWind D9.2 wid tubines (Nameplate Capacity rating up to 2MW/tubine, 0.90 lead-
inductve/O.90 lag-caacitive power factor), or other wid tuine models.
B-2 LOATION OF FACILITY
Nea: Declo. Idao
nos. R26E. SEC: 10.3. and 2, County: Cassia
Decription of Interonnecton Lotion: 138 kV Idao Power Trassion Line Tap
Neast lØao Power Substation: Jacksn
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B-3 SCHEULED FIRST ENERGY AN OPERTION DATE
Seller ha selected Deembe 31, 2011 as th Scheded Firt En Date.
Seller ha selected Decembe 31, 2012 as the Scheduled Option Date.
In mag these selecions, Seller recognes tht adeqte testig of the Facity and coletion
of all reuients in pargrph 5.2 of ths Agrent must be completed priOr to the projec
being grted an Operion Date.
B-4 MAX CAPACIT AMOUN:
Ths value wi be 23 MW which is consist with the vaue provided by the Seller to
Idao Power in accordace with Schedule 72. Ths vaue is th maum ener (M th
potentialy could be delivere by the Seller's Facilty to the Idao Power electrcal syste at any
moment in tie.
At the tie ths Agreement was executed the Seller had requested ony 20 MW of capacity in the
intercecion and trsmision cacity process. Pror to the projec deliverg energy tht
exceed 20MW, the Seller mus rest and be grted addtion capacity up to but not
exceeg 3 MW in both internnecion and trmission capacity by Idao Power. The Seller
must make ths additiona capaty reest using the routie Idao Power interconnecon and
trmision capacity proces and shal be reposible for al costs assoiated with ths additiona
capacty request. Under no ciumstances wi the Nameplate Capcity of ths Facilty exce
23MW. If the intaed capacity is less th the MaXimum Capacity Amount at the end of the
fit Contrct Year, the Maum Capacity Amount will be adjusted downwar to reflec the
act naeplate raing of the wind tuines ined This rese Maxum Capacity Amount.
wil then rem in effec for the reg te of ths Agrent.
B-5 POIN OF DELIVRY
''Point of Delivery means, uness otherse agrd by both Pares, ~e point of wher the Seller
Facilty's energy is deliver to the Idao Power electrcal system. Schede 72 wi dee
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the spc Point of Deliver for ths Facility. The Poit of Deliver idetied by Schedule 72
will beome an integr par of th Agement.
B-6 LOSSES
If the Idao Power Meteng equipment is capable of meag the exa ener deliveres by the
Seller to the Idao Power elecca syste at the PoiJt of Deliver, no Losss will be calculated
for th Facilty. If the Idao Power Meteng equipment is unble to mea the exat ener
deliveres by the Seller to the Idao Power elecca system at the Point of Delivery, a Losses
calcuation wil be estblished to measu the energy losses (kWh) beeen the Seller's Facilty .
and the Idao Power Point of Deliver. Ths loss calculation wil be intialy set at 2% of the
kWh ener prouction recrded on the Facilty genertion meteng equipment. At such tie as
Seller provides Idao Power with the electrcal equipment specificaons (trformer loss
spfications, conducor sizs, etc.) of al of the eleccal equipmet beee the Facty and the
Idao Power electrcal system Idao Power wil confgue a revised loss calculaton formula to
be agred to by both paries and use to caculate the kWh Losses for the reainig ter of the
Agrment. If at any tie durg the ter of th Agent, Idao Power deeres that the
loss calculation does not corrctly reflect the actul kWh losses atbute to the elecnca
equipment between the Facilty and the Idao Power eleccal system Idao Power may adjust
the calculation and reacively adjus the prvious month kWh loss cacuations.
B-7 METEG AN TELEMETRY
Schedule 72 will deere the spifc meteng and telemetr reuients for ths Facilty. At
the mium, the Meteng Equipment and Telemet equipment must be able to provide and
recor hourly ener deliveres to the Point of Delive and any other ener measurents
requi to adste th Agent. These spcification wil include but not be limted to
.. equipment specations, equipment loction, Idao Power provide equipment Seller prvided
eqpment, and all costs associated with the equipment, design and inlation of the Idao
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B-8 NETWORK RESOURCE DESIGNATION
Idao Power caot acct or pay for generon fr ths Facilty until a Network Resur
Designtion ("NR") application ha ben acceted by Idao Power's delive business unt.
Federa Energy Regulatory Commssion ("FEC¡ rues requi Idao Power to preare and
submit the NR. Because much of the inormtion Idao Power nee to preare the NR is
spifc to the Seller's Facilty, Idao Power's abilty to fie the NR in a tiely maner is
contigent upon timely reeipt of the requi inormtion frm the Seller. Prior to Idao Power
beging the prs to enble Idao Power to submit a reques for NR statu for ths Facilty,
the Seller shal have completed al reuirents as spified in Pargrph 5.7 of ths Agrent.
Seller's faiure to provide complete and accurate inormation in a tiely maner ca
signicantly impact Idaho Power's abil and cos to att the NR designation for the
Seller's Facilty and the Seller shan ber the costs of any of these delays that are a resul of
any acton or inacton by the Seller.
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APPENIXC
ENGIN'S CETIICATION
OF
OPERTIONS & MAENANCE POLICY
The undeigned , on behal of hilf/erlf and
, herinfter collectvely refer to as "Engiee," herby states and cerifies to the Seller as . ..
follows:
1. Tht Enginee is a Liceed Professiona Enginee in good stag in th Stae ofIdao.
2. Tht Engiee has reewed the Ener Sales Agreeent. herfter "Agreement," betee
Idao Power as Buyer, and as Seller, date
3. Tht the cogenertion or sm power production project which is the subjec of the Agent
and ths Staement is idetied as IPCo Facilty No. and is heraf refer to as
the "Prject."
4. Th the Projec. which is connonly known as the Prjec. is locted in
Section _ Townhip Rage. , Boise Merdian County, Idao.
5. Tht Engiee regns tht the Agrent provides for the Projec to fush elecca ener
to Idao Power for a twenty (20) yea peod.
6. Tht Engieer ha substatial experence in the deign constrcton and option of electrc
power plants of the sae tye as ths Projec.
7. Tht Engieer has no ecnomc relationshp to the Deign Engiee of ths Prject.
8. Th Engiee ha reviewed and/or supese the review of the Policy for Opon an
Maitence ("O&M") for ths Prject and it is his prfesonal opinon th. prvide sad Prjec ha
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be deigned an buit to approriate standa adherce to said O&M Policy wi ret in the
Prject's prucing at or nea the design elecca output, effciency and plant factor for a 20 yea peod.
9. Th Engieer reognzes tht Idao Power, in accordce with pagrh 5.2 of the Agren,
is relyig on Engiees reresetaons and opinons contaed in th Stateent.
10. Th Engiee cerfies tht the above staements ar complete, tr and accte to the best of
hìsler knowledge and therfore set hìsler had and se below.
By
(p.E. Sta)
Date
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APPENDIXC
ENGIN'S CERTIICATION
OF
ONGOING OPERTIONS AN MAANCE
The undersigned . on behaf of bielf!erelf
herinft collecvely refer to as "Engiee," herby staes anand
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8. Tht Engiee ha mae a physica inpeon of sad Prjec, its operons and matece
rerds since the las preous ceifed inecon. It is Engiee's professiona opinion, bas on the
Projec' sapce, tht its ongoing O&M ha be substtiay in acrdace with sad O&M Policy
tht it is in reonably goo operatig condtion; and tht if aderce to sad O&M Policy contiue, th
Prjec wil contiue proucing at or nea its design elecca outt, efciency and pla far for the
reg year of the Agent.
9. Tht Engiee reognizes tht Idao Power, in accorce with pagrph 5.2 of the Agen,
is relyig on Engiee's reresentations and opinons contaed in th Statement.
10. Tht Engiee certifes. tht the above statements ar coplete, tre and acte to the best of
his/er knowledge and therfore sets his/er ha and se below.
By
(p.E. Stap)
Date
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APPENDIXC
ENGINR'S CERTIFCATION
OF
DESIGN & CONSTRUCTON ADEQUACY
The underigned . . on beha of hiselflf and
herinfter collecvely refer to as "Engiee", herby states and
certifes to Idao Power as follows:
1. Th Engieer is a License Prfessiona Engiee in good stadig in the sti ofldao.
2. Tht Engiee ha reviewed the Fir Energy Sales Agrement, herer "Agent",
between Idao Power as Buyer, and as Seller, daed
3. That the cogenertion or smal power pruction project, which is the subject of the
Agent and th Statement, is idetied as lPCo Facilty No and is heraf
refered to as the "Project".
4. That the Prjec, which is commonly known as the Prject, is located in
Secon _ Township Rage , Boise Meridian County, Idao.
5. That Engineer recognes tht the Agent prvides for the Projec to fuh electrcal
energy to Idao Power for a twénty (20) year perod.
6. . Tht Engieer ha substatial experence in the design constrcton and opetion of
electrc power plants of the same tye as ths Prjec.
7. That Engiee ha no ecnomic relationship to the Design Engieer of ths Prjec and
ha mae the anysis of the plan an speifcations indeendently.
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8. Tht Engiee ha reviewed the engieeg deign an conseton of the Prjec
includig the civi work, elecca work, genertig equipment, prie mover conveyace sytem, Seller
fushed Interonecion Facilties and other Prjec facities and equipment.
9. Tht the Prjec ha be consed in acdace with sad pla and spifications, .al
applicable cos and consistent with Prdet Elecca Prces as tht ter is descbe in the
Agrement.
10. Th the design and constction of the Prjec is such that with reonble and pndet
opertion and maitence pmetces by Seller, the Prject is capable of perormg in accorce wi the
te of the Agrent and with Prdent Eleccal Prices for a twenty (20) year perod.
11. Tht Engiee reognes tht Idao Power, in accordace with pargrph 5.2 of the
Agrement, in interonnecting the Prject with its syste is relyig on Engiees reresentaons and
opinons contaed in ths Stateent.
12. That Engiee ceifes tht the above statements ar complete, tr and accur to the
best ofhisler knowledge and therfore ses hisler ba and seal below.
By
(p;E. Sta)
Date
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APPENlXD
FORMS OF LIQUI SECUR
The Seller sha provide Idao Power with commeraly reble secty inents such as Cas
Esrow Secty, Guatee or Le of Cret as those ter ar defied below or other form of liquid
ficial secty tht would provide redily available cash to Idao Power to satisfy the Delay Secty
reuient and any other secuty reent within th Agrent.
For the pu of ths Appdi D, the te "Cret Reuients" sha mean acceptable fiancia
credtwortness of the entity providig the secty intrent in relation to the term of the obligation in
the reonble judgment of Idao Power, provided tht any gutee and/or lett of cret issued by any
other entity with a short-ter or long-ter investment gre cret rating by Stadad & Poor's
Corporation or Mooy's Investor Serces, Inc. sh be deeed to have acceptable ficial
crtwortess.
1. Cash Escrow Securty - Seller shall deosit fuds in an escw aècount estblished by the
Seller in a bag intitution acceptable to both Pares equa to the Delay Secty or any
other reui securty amount(s). The Seller shal be responsible for al costs, and reive
any interet eaed asiated with estblishig and maitag the escrw accunt(s).
Guatèe or Leer of Cret Secty - Seller sha post and maintain in an amount equa to the Delay
Securty or other requied securty amount(s): (a) a guty frm a par tht satisfies the Credt
Requients, in a form acceptable to Idao Power at its discreon, or b) an irocable Leer of Cret
in a form actable to Idao Power, in favor of Idao Power. The Leter of Cret wi be is by a
ficial initution acceple to both pares. The Seller shl be responsible for all costs associated
with establishig and mata the Guatees) or Letts) of Credit.
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APPENIXE
WIN ENEGY PRODUCTION FORECASTIG
As spefied in COmssion Or 30488~ Idao Power shal mae us of a Wind Energy Prcton
Foreastig model to forecast the ener producton frm ths Facty and other Quaifg Facilty wid .
genertion reours. Seller and Idao Power wil sha the cost of Wind Ener Prucion Foreastig.
The Facity's sha of Wind Ener Pruction Foreg is deered as specified below. Seller
sha wil not be grter th 0.1 % of the total energy payments made to Seller by Idao Power dug the
previous Contrct Yea.
a. For ever month of ths Agrent begig with the fit fu month afer the
Firt Energy Date as spifed in Appedi B of ths Ageeent, the Win
Ener Prduction Forecatig Monthy Cost Aloction (MCA) wi be due and
payable by the Seller. Any Wind Ener PrductiOn Foretig Mony Cost
Allocations (MCA) tht ar not reimburse to Idao Power sha be deuc
frm energy payments to the Seller.
b. As the value of the 0.1 % cap of the Facilties tota ener payments wil not be
known until the first Contrt Year is complete, at the end of the fi Contr
Yea any prior alocatons tht exceeed the 0.1 % cap sha be adjusted to reflec
the 0.1 % cap. If the Facilty ha paid the monthy allocons, a refud will be
includd in eq monthy amounts over the eng Contrct Yea. If the
Facilty has not paid the monthly alloctions, the amount due to Idao Power wi
be adjused accordigly and the unaid balce wil be deuced frm the
ensuig Contr Yea's energy payments.
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c. The cost alocation forul debe below wil be reewed and revi if
necessa on the la day of any mon in which th cuultive MW naeplate
ratig of wi prjec havig Comsion aprove agents to deliver
energy to Idao Power ha been rese by an acton of the Commsion.
d. The monthy cost aloction will be based upon the followig formula:
Where: Total MW CfMW) is eq to the tota naeplate ratig of al QF wid
projects tht ar unde contr to provide energy to Idao Power
Compay.
Facity MW (F is equal to the naeplae rating of th Facilty as
spified in Appendi B.
Anual Wind Energ Pructin Foreeastg Cost (AFCost) is equa
to the total anua cost Idao Power incur to provide Wind Energ
Prduction Forecasting. Idao Power will estite th AFCost for the
cut yea based upn the preous yea's cost and expecte cost for
the cunt yea. At yea-ed. Idao Power wi compar the acal costs
to the este costs and any differces beee the estimte AFCost
and the ac AFCost wil be include in the next yea's AFCost.
Anual Cost Aloction (ACA) = AFCost X (F / TM
And
Month Cost Alocation (MCA) = ACA /12
e. The Wind Ener Prducton Forecasing Monthy Cost Aloction (MCA) is
due and payale to Idao Power. The MeA will fi be neted agat any
monthy ener payments owed to the Seller. If the netg of the MCA agaist
the monthy ener payments reults in a balance bein due Idao Power, the
Facilty sh pay ths amount with fiee (15) days of the dae of the payment
invoice.
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FI ENGY SALS AGREEM
(10 aM or Les)
Project Name: Raibow West Wind Projec
Prjec Number 31615550
TIS AGREEME, entere into on th ~ day of Dttebv 2010 betwee
Rabow West Wind LL (Seller), and IDAHO POWE COMPAN, an Idao cororation (Idao
Power), heriner sometes refer to collecvely as "Pares" or individuay as ''Par.''
WISSET:
WHREAS, Seller wi degn cotrct own, mata and opte an elecc genertion
facilty; an
WHS, Seller wishes to sell, and Idao Power is willg to purchase, fi elecc ener
prouce by the Seller's Facilty.
THFORE, In considertion of the mutu covenants and agrments herer se fort the
Pares agr as follows:
ARTICLE I: DEFINIONS
As use in ths Agrent an th appdices atthed hero, the followig ter
sha have the following meags:
1.1 "Availabilty Shortfall Price" - The curt month's Mid-Columbia Maket Energy Cost mius
the cut month's Al HouI Ener Prce spfied in pargrph-7.3 of ths Agent. If th
calcuation results in a vaue les th 15.00 Mils/Wh the relt sh be 15.00 MillsWh.
1.2 "Business Days" - mean any caenda day tht is not a Satuday, a Sunday, or a NERC
recgn holiday.
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1.3 ''Calcula Net Energy Amount" - A monthy estate, pr and doen afer the fat
by Seller, reewed and acted by the Buyer th is the cacuat monthy maum enrgy
deliveres (measu in kWh) for eah invidua wind tuine, toted for the Facilty to
dee the tota energy th the Faclity could have deliver to Idao Power durg tht
month baed upo: (1) eah wi tuine's Nameplate Capacity, (2) Sufcien Pre Mover
avaiable for use by each wid tubine durg the month (3) incidets of Force Majeu, (4)
scheduled matence, or (5) incidents of Forced Outages less Losse and Station Use. If the
duron of an event chered as item 3, 4 or 5 above (measur on eah individua
occuce and individua wid tuine) lats for les th 15 miutes, iben the event wil not be
consided in ths calculation. The Seller shal collec and mata aet data to suppor ths
caculation and shal kee ths da for a mium of 3 year.
1.4 "Commssion" - The Idao Public Utilities Commssion.
1.5 "Contrt yea' - The peod commencing each caenda yea on the sae calenda dae as the
Operon Date and endig 364 days thereaer.
1.6 "Delay Liguidaèd Damges" - Damges payable to Idao Power as caculat in pargrph 5.3,
5.4, 5.5 and 5.6.
1.7 ''Delay Period" - Al days past the Scheduled Opertion Date unti the Seller's Facilty achieves
the Opertion Date.
1.8 "Delay Pnce" - The curt month's Mid-Co1umbia Market Energ Cost mius the cut
month's Al Hour Ener Prce speifed in pargrph 7.3 of ths Agrent. If th cacuation
resuts in a value less th 0, the reult of ths cacuation wi be O.
1.9 "Designte Dispatch Facilty - Idao Power's System Options Grup, or any subseqent
grup designted by Idao Power.
1.10 "Effective Date" - The date stte in the openng pargrh of ths Fir Ener Sales
Agent reresetig the dae upon which th Fir Energy Sales Agreeent was fuy
executed by both Pares.
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1.11 "Facilty" - Tht electrc genertion facilty debed in Apdi B of th Ageeent.
1.12 "Firt Energy Date" - The day commencing at 00:01 hour, Mounta Time, followig the day
tht Seller ha saisfied the reqements of Arcle IV and the Seller be deliverg ener to
the Idao Power eleccal sys at the Point of Delive.
1.13 "Forced Outage" - a paal or to reucion of a) the Facilty's capacty to pruce and/or
deliver Net Energy to the Point of Deliver, or b) Idao Powers abilty to acCe Net Ener at
the Point of Deliver for non-eonomic reasns, as a result ofIdao Power or Facilty 1)
eqpment faiur which was !! the resut of neglgence or lack of preentative matece, or
2) rendig to a trsmsion provide cuent order, or 3) unplaned pretave
matence to reai equipment tht left unai, would resut in failur of equpment prior
to the planed maitence perod, or 4) planed matenance or consction of the Facilty or
elecca lines requi to see ths Facilty. The Paries sha make commerially reanable
effort to peror ths unplaed prventative maintence durg peods oflow win
availabilty.
1.14 "Heavy Lod Hour" - The day hour begig at 7:00 am endig at 11:00 pm Moun
Time, (16 hours) excludi all hour on al Sundays, New Yea Day, Memorial Day,
Independece Day, Labor Day, Thgivig and Chrstm.
1.15 "Inadverent Energy - Elecc energy Seller doe. not intend to genere. Indveren ener is
more parcularly descrbed in parh 7.5 of ths Agrent.
1.16 "Interonnection Facilties" - Al equipment specifed in Idao Power's Schedule 72.
1.17 "Intial Capacity Detetion" - The press by which Idao Power con th unde
norm or avege desgn condition the Facilty will generte at no more th 10 avege MW
pe month and is therfor eligible to be paid the published rates in accordce with Comssion
Or No. 29632.
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"1.18 ''Light Load Hour" - The day hour beg at 11 :00 pm, endig at 7:00 am Moun Time
(8 hour), plus al other hour on all Sundays, New Yea Day, Memorial Day, Indepdece
Day, Labor Day, Thgivig and Chrst.
1.19 "Losses" - The loss of electrcal ener expresse in kiowat hour (kWh) occurg as a ret
of the trformtion and trmission of ener beeen th Meterg Point and the point the
Facilty's energy is delivered to the Idao Power eleccal sy. The los calcution formul
will be as speed in Appedi B of th Agent.
1.20 "Maret Ener Referce Prce" - Eighty-five percet (85%) of the Mid-Columbia Market
Energy Cost.
1.21 "Materal Breach" -A Default (pargrph 19.2.1) subjec to pargrph 19.2.2.
1.22 "Maxum Capacity Amount" - The maxum capacity (M of the Facilty wil be as
specfied in Appendi B of th Agrent.
1 :23 "Mechacal Avalabilty" - The peentage amount calculated by Seller with 5 days af the
end of each month of the Facilty's monthy act Net Ener divided by the Facilty's
Calculated Net Energy Amount for the applicable month. Any dages due as a reult of the
Seller faling short of the Mechacal Avaibilty Guatee for eah month sha be detered
in accordce with parph 6.4.4.
1.24 "Mechacal Avaiabilty Guatee" shal be as defied in pargrph 6.4.
1.25 "Metenng Equipment" - All equipment spified in Schedle 72, th Agement and any
additional equipment specified in Apendix B reui to meaur, reord and telemeter bi-
dional power flows frm the Sellers Facilty at the Meterg Point.
1.26 "Meterg Point" - The physica point at which the Meterg Equiment is located tht enles
accute meaurement of th Test Energy and Net Ener deliveres to Idao Power at the Point"
of Delivery for th Facilty tht provides all necsa data to administ ths Agrent.
1.27 "Mid- Columia Maret Ener Cost" - The monthy weighted averge of the daly on-peak an
off-pe Dow Jones Mid-Columbia Index (Dow Jones Mid-C Index) prices for non-fi ener.
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If the Dow Jones Mid-Columbia Inde price is discotiued by the reg agency, both Pares
wil mutuy agr upn a relaement index, which is simla to the Dow Jones Mid-Columia
Index. The selec relaent index wi be consistt with other simar agents and a
commonly us index by the electrca indu.
1.28 "Nameplate Capacity" -The fu-loa elecca quatities assigned by the deigner to a genertor
and its pre mover or oter piece of elecca equipment, such as trformer and cirt
breer, under stada conditions, expresse in amper, kilovolt-ape, kiowatt, volts
or other apppriat unts. Usuy indicate on a naeplate atthed to the individu mahie
or device.
1.29 "Net Energy - Al of the elecc energy produce by the Facilty, less Station Use, less Losses,
exprese in kiowatt hour (kWh) deliver to Idao Power at the Point of Deliver. Subjec to
the ter of ths Agrent, Seller commits to deliver all Net Ener to Idao Power at the Point
of Deliver for the ful term of the Agrent. Net Ener does not include Invertt Ener.
1.30 "Opration Date" - The day commencing at 00:01 hour, Mounta Time, followin the day th
all reuients of pargrph 5.2 have bee completed
1.31 "Point of Delivei" - The location specfied in Appendi B, where Idao Power's and the
Seller's electrcal facilties ar inteonneced and the energy frm th Facty is delived to the
Idao Power electrca system.
1.32 "Prudet Eleccal Prctces" - Those price, metods and equipment th ar commonly and
ordy used in elecca engieeg and operations to operte elecc eqpment lawfy,
saely, depdably, effciently and economicay.
1.33 "Scheduled Opration Date" - The date specified in Appendi B when Seller anticipates
achievig the Option Date. It is exped th the Scheded Option Date provided by the
Seller shal be a reanable estimate of the date th the Seller anticipates th the Seller's Facilty
sha achieve the Option Date.
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1.34 "Schedule 72" - Idao Power's Tarff No 101, Schedule 72 or its succesor schedules as
apprved by the Commssion. The Seller sha be respnsible to pay all costs of intennecon
and inegrtion of th Facty into the Idao Power elecca syst as speed with
Schedule 72 and th Agent.
1.35 "Seasn" - The th peod idetied in pargrh 6.2.1 of ths Agrent.
1.36 "Special Facilties" - Addition or altertions of trsmssion and/or distbution lis and
trformer as descbed in Schedue 72.
1.37 "Staon Use" - Elecc ener tht is used to oper equipment th is auxar or otherse.
related to the prouction of electcity by the Facilty.
1.38 "Sufcient Prie Movet meas wid spe that is (1) eq to or grter than the generon
unt's manufactu-spified mium levels requi for the generion unt to produce ener,
and (2) eq to or less th the generon unt's maufac-speifed maum levels at
which the genertion unt can safely prouce energy.
1.39 "Surlus Energy - All Net Energy produced by the Seller's Facility and deliver by the Facilty
to the Idao Power eleccal sys pror to the Option Date.
1.40 "Tota Cost of the Facility - The tota cost of strctu, equipment and appuenances.
1.41 "Wind Energy Production Foret" - A foreas of ener deliveres frm ths Facilty provide
by an Idao Power adiner wind foreastig modeL. The Facilty sha be respnsible for an
alocted portion of the total costs of the forecag model as spcified in Appdi E.
ARTICLE ll: NO REIACE ON IDAHO POWE
2.1 Seller Ind.dent Investigation - Seller warts and reents to Idao Power th in energ
into ths Agrent and the undeg by Seller of the obligations set fort here Seller has
investigate and deered tht it is capable of peormg herder and ha not relied upon
the advice, expeence or expe of Idao Power in connecon with the tracon
contemla by ths Agent.
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EXHIBIT 1 PAGE 52 OF 92
2.2 Seller Independent Ex - Al profesion or exps includig, but not lite to, engiee,
attrneys, or accountas th Seller may have conslte or relied on in unde the
tracons conteplated by ths Agent have bee solely those of Seller.
ARTICLE il: WARS
3.1 No Warty by Idao Power - Any review, accetace or faiur to review Seller's design
speificaions, equipment or facilties sha not be an endorsent or a conftion by Idao
Power and Idao Power makes no warties ex or implied, regag any aspe of
Seller's deign ,speifications, equipment or facilties, inludg, but not limted to, saet,
durilty, relibilty, strengt capacity, adequacy or economic feasibilty.
3.2 Oualifyg Facilty Statu - Seller warts tht the Facilty is a "Qug Facilty," as th ter
is used and defied in 18 CFR 292.201 et se. Afer inti quacaton, Seller wi tae such
ste as may be re to maita the Facilty's Qu Facilty statu dur the ter of
ths Agrment and Seller's failur to maita QufYg Facity statu will be a Mateal
Breach of th Agrement. Idao Power rees the right to reew the Facilty's Qug
Facilty sta and associated support and coplice doents at anyte durg the te of
ths Agreement.
ARTICLE IV: CONDITIONS TO ACCEPANCE OF ENRGY
4.1 Pror to the Firt Energy Date and as a condition of Idao Power's acceptace of deliveres of
energ frm the Seller unde ths Agrent, Seller shal:
4.1.1 Submit prof to Idao Power th allicees, pets or apvals necessa for Seller's
opetions have be obtaed from applicable feder state or local authorities,
includig, but not limted to, evidence of complian with Subpar B, 18 CPR 292.201 et
seq. as a certified QufYg Facilty.
4.1.2 Opinon of Counel - Submit to Idao Power an Opinon Leer signed by an atorney
adtted to price and in good stdig in the State of Idao providig an opinon tht
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Seller's lices, perts and aprova as se for in pagrph 4.1.1 abve ar legy
and vadly issued ar held in th nae of th Seller and, based on a reonable
indedent review, col is of th opinon th Seller is in subst colice with
sad pets as of the date of the Opinon Lett. The Opinon Leer will be in a form
acctable to Idao Power and wil acknowledge tht the atorey redeg the opinon
understads th Idao Power is relyig on said opinon. Idao Power's actace of the
form wil not be uneaonably witheld. The Opinon Lett will be governed by and
shal be interreed in accordce with the legal opinon acrd of the Amercan Bar
Assoiaton Secon of Business Law (1991).
4.1.3 Intial Capacity Determtion - Submit to Idao Power such da as Idao Power may
reonably reui to perorm the Intial Capaity Detertion. Such data will irclude
but not be lited to, Nameplate Capacity, equipment spifcatons, pne mover data,
reour chacterstics, norm and/or averge opetig design conditions and Staion
Use data. Upon reeipt of ths inormtion, Idao Power wil review the provided data
and if necsar, reuest additiona data to complete the Intial Capacity Dettion
with a reasonable time.
4.1.3.1 If the Maxum Capaity spified in Apdix B of ths Agreement and the
cumulative maufact Nameplate Capacity rag of the individua generation
unts at ths Facity is less th 10 MW, the Seller sh submit deed
maufacter, verfiable data of the Nameplate Capacity ratigs of the act
individua genertion unts to be instled at ths Facity. Upon verfication by
Idao Power tht the da prvided estlishes the combined Nameplae Capacity
rating of the genertion unts to be intaed at th Facilty is les th 10 MW, it
wil be deeed tht the Seller ha satisfied the Inti Capacity Deeration for
ths Facilty.
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EXHIBIT i PAGE 54 OF 92
4.1.4 Nameplate Capacity - Submit to Idao Power maufac's an engieerg.
docentation th esblies the Nameplate Capity of eah individua generon unt
that is include with ths enti Faclity. Upo reipt of ths da Idao Power shl
review the provide da and dete if the Nameplate Capacty spified is reble
based upo the mauf's sped generon ratigs for the specifc geertion.
unts.
4.1.5 Engiee's Cerfications - Submit an execte Engiees Certficaon of Deign &
Constrction Adeua and an Enees Cerifcation of Options and Maitece
(O&M) Policy as descbed in Commssion Ord No. 21690. These cerficates will be
in the form specifed in Appendix C but may be modfied to the extent necssa to
recogn the differt engieeg disciplines prvidig the certificates.
4.1.6 Ince - Submit wrtten prof to Idao Power of al ince reui in Arcle XI.
4.1.7 Internnection - Prvide wrtten conftion frm Idao Power's deliver business
unt tht Seller ha satisfied al internnection reqents.
4.1.8 Network Resource Deignion - The Seller's Facility has be designted as a network
resource caable of delivenng :f ener up to the amount of the Maxum Capaty.
4.1.8.1 Seller ha prvide all inormation reqir to enable Idao Power to fie an
inti trmission capity requt.
a) Results of the intial trsmssion capacity reuest ar known and aceptale
to the Seller.
b) Seller acknowledges reonibilty for all internnecon costs and any costs
associated with acg adequae :f trssion capacty to enble the
project to be clasified as an Idao Power designed :f netork reur.
c.) if the Facilty is located outside of the Idao Power serce tetory, in
addition to th above reuients, the Seller must provide evdence th the
Seller ha acqu fi trssion capacity frm al re trttg
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entities to deliver the Facilty's ener to an acctale poin of deliver on
the Idao Power elecca sytem
4.1.9 Written Acceptace - Reques and obta wrtten confition frm Idao Power tht al
conditions to accece of ener have be fufilled. Such wrtt confation sha be
provided with a commeriay reonale tie followig the Seller's rees and wi
not be unonbly witheld by Idao Power.
ARTICLE V: TE AN OPERTION DATE
5.1 Ter - Subject to the prviions of pargrph 5.2 below, ths Agrent sha beome effective
on the date firt wrtten and sha continue in ful force and effec for a perod of twenty (20)
Contrt Yea frm the Option Date.
5.2 Operon Date - The Operation Dat may occu only af the Facilty ha achieved all of the
followig:
a) Achievd the Fir Ener Date.
b) Commssion approva of ths Agrent in a form acceptale to Idao power ha
bee reeived.
c) Seller ha demonstr to Idao Powets satfacon that the Facity is complete and
able to prvide ener in a consistet, reliable and sae maer.
d) Seller ha reueste an Option Date frm Idao Power in a wrtten formt.
e) Seller ha received wrtten confirion from Idao Power of the Opertion Date.
Ths conftion wi not be unonbly witheld by Idao Power.
5.3 Opertion Dat Delay - Seller sh cause the Facilty to achieve the Option Date on or befor
the Scheded Opon Date. Delays in the interonecton and trsmission netork upgr
study, design and constrtion pross tht are not Force Majeu events acceted by both
Pares, shal not prevent Delay Liquidaed Damges fr being due and owig as caCuat in
acrdae with ths Agent.
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EXHIBIT 1 PAGE S6 OF 92
5.3.1 If the Option Date occ af the Scheduled Opertion Date but on or prior to niet
(90) days following the Scheduled Opertion Dae, Seller sha pay Idao Power Delay
Liqudate Damges caculat at the end of each caenda month after the Scheduled
Opon Date as follows:
Delay Liquidated Damges ar. equa to ((Cut month's Intial Yea Net
Ener Amount as spified in pargrph 6.2.1 divide by the numbe of days in
the cut month) multiplied by the numbe of days in the Delay Perod in the
curt month) multiplied by the curt month's Delay Prce.
5.3.2 If the Option Date does not oc with niet (90) days followig the Scheduled
Opertion Date, the Seller sha pay Idao Power Delay Liquidaed Dames, in adtion
to those provided in pargrh 5.3.1, cacuted as follows:
Forty-five doll ($45) multiplied by the Maxum Capacity with the Maxum
Capcity beg mea in kW.
5.4 If Seller fails to achieve the Opemtion Date with ninet (90) days followig the Scheduled
Opertion Date, such faiure wil be a Mater Brech and Idao Power may terte th
Ageement at any tie unti the Seller cus the Materal Breach. Additiona Delay Liqudated
Dams beyond those cacuated in 5.3.1 and 5.3.2 will be caculate and payale using the
Delay Liquidaed Damage calcuation descrbe in 5.3.1 above for al days exceg niet (90)
days pas the SchedUled Option Date until such tie as the Seller curs ths Mateal Breh or
Idao Power tetes ths Agreeent.
5.5 Seller sha pay Idao Power any calculte Delay Liquidated Damages with seven (7) days of
when Idao Power calcuats and prsets any Delay Liqudate Damges billigs to the Seller.
Seller's faur to pay these dages with the spfied tie wil be a Materal Brech of ths
Agent and Idao Power sh drw fuds fr the Delay Seurty provided by the Seller in
an amount equa to the cacuat Delay Liqudaed Damges.
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EXHIBIT i PAGE 57 OF 92
5.6 The Pares agr tht the dages Idao Power would incu due to delay in the Facilit
achievg the Opon Dat on or before the Scheded Option Dat would be dicut or
impossible to prect with cety, and tht the Delay Liqudated Damges ar an appoprite
approxition of such daages.
5.7 Pnor to the Seller executig ths Agrent, the Seller sh have agr to and execute a Leter
of Undetadig with Idao Power th conta at a mium the followig reens:
a) Seller ha filed for inerecon and is in compliance with al payments
and requients of the interconnecon process.
b) Seller has provided all informtion reuir to enble Idao Power to fie an
inti trmission capacty reues.
5.8 With th (30) days of the date of a fi non-appealable Commsion Order as speed in
Aricle XX aprovig thi Agement; Seller sha post liquid sety ("Delay Secty") in a
form as desnbed in Appdi D equal to or exceg the amount calcuted in pargrph 5.8.1.
Faiur to post ths Delay Secty in th tie specifed above wil be a Matenal Breach of th
Agent and Idao Power may terte th Agent.
5.8.1 Delay Secty The grter of fort-five dollar ($45) multiplied by the Maximum
Capacity with the Maxum Capacity being measur in kW or the su of th month's
estated reenue. Where the estited th month of reenue is the estimte revenue
asociated with the fit thee full months following the esimed Scheduled Opion
Date, the estited kWh of energy proucton as spified in pagrph 6.2.1 for those
th months multiplied by the Al Hour Ener Pnce speifed in pargrph 7.3 for
each of those thee months.
5.8.1. In the event (a) Seller provides Idao Power with ceficaon th (1) a
geertion interonnecon.agent specifg a schedule th wil enble th
Facilty to achieve the Opion Date no later th the Scheduled Option
Date has be copleted and the Seller has paid al requi intennecon
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costs or (2) a genertion interconnecion agrent is substaly complete an
al maeral costs of interecon have be identified and agr upon and
the Seller is in compliance with al ter and conditions of th generon
intennecon agent, the Delay Secty calcuate in acrdce with
pargrph 5.8.1 will be redce by ten pert (10%).
5.8.1.2 If the Seller ha reived a reducion in the cacuted Delay Secty as spified
.-
in pargrph 5.8.1.1 an subsuently (1) at Seller's reest, the genertion
interconnecon agrent spifed in pargrh 5.8.1. is rese and as a
result the Facity wi not achiev its Opon Dat by the Scheded Opon
Date, or (2) if the Seller dos not - mata compliance with the generon
inteconnecon agrent, the ful amount of th Delay Secunty as calcuated in
pagrph 5.8.1 will be subjec to reinstteent and will be due and owig with
five (5) business days fr the date Idao Power re retaement. Faiur
to timely reintate the Delay Secunty wil be a Mate Breh of th
Agrent.
5.8.2 Id Power shal release any reaig secty posted herder afer al
calcuated Delay Liquidated Damges ar paid in fu to Idao Power and the
earlier of: 1) thi (30) days aft the Operation Date has bee achieve or 2)
six (60) days af the Agrent ha bee teted.
ARTICLE VI: PURCHAE AN SAL OF NET ENERGY
6.1 Delivery and Accetace of Net Energy - Excet when either Pars peormce is excuse as
provided herin, Idao Power wi purha and Seller will sell all of the Net Energy to Idao
Power at the Point of Deliver. Al Invert Ener prouced by the Facilty wi also be
deliver by the Seller to Idao Power at the Poit of Delivery. At no tie will the tota amount
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EXHIBIT 1 - PAGE 59 OF 92.
of Net Ener and/or Indvertent Ener prd by the Facilty and deliver by the Seller to
the Point ofDelivei exce the Maxum Capacity Amount.
6.2 Net Energy Amouns - Seller intends to prouce and deliver Net Ener in the followig monthy
amounts. These amounts sh be consstent with the Mechaca Avalabilty Guaee.
6.2.1 Intial Yea Monthy Net Energ Amounts:
Mm kWh
Seaon 1
Marh
Apnl
May
5,463,612
5,707,523
5,317,265
Seaon 2
July
Augut
November
December
4,731,878
4,634,314
4,536,749
4,634,314
Sean 3
June
Septemr
Ocober
Janua
Febru
4,780,661
4,585,532
4,683,096
4,829,443
4,634,314
6.3 Unless excuse by an event of Force Majeur, Seller's faiur to deliver Net Ener in any
Contr Yea in an amount equa to at leat ten pert (10%) of the sum of the Intia Yea
Monthy Net Energy Amounts as spified in pargrph 6.2 sha constitute an event of default.
6.4 Mechancal Availabilty Guatee - Af the Optiona Date ha bee estalished the Facilty
sha achieve a miimum monthy Mechacal Avalabil of eighty-five pert (85%) for the
Facilty for each month dug the fu term of this Agrent (the ''Mechacal Avaabilty
Guaree"). Failur to achieve the Mechaca Avalabilty Guate sha result in Idao
Power calculg daages as spefied in pargrph 6.4.4.
6.4.1 At the sae tie the Seller prvide the Monthy Power Prcton and Avaiabilty
Report (Appdi A), the Seller sh provide and ce the cacution of the Facilty's
cut month's Mechanca Avaibilty. The Seller sh include a sum of al
inormion use to cacuate the Calcuate Net Ener Amount includg but not
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EXHIBIT i PAGE 60 OF 92
limted to: (a) For Outages, (b) For Majeur evts, (c) wid sp and th imct
on generaon output, an (c) scheduled matece and Staion Use inormtion.
6.4.2 The Seller sh mata and re for th (3) yea deted doctaon supporg
the monthy calcution of the Facilty's Mechaca Avaabilty.
6.4.3 Idao Power sha have the right to reew and audit the documentaon suppg the
cacuon of the Facilty's Mechancal Availabil at renable ties at the Seller's
offces.
6.4.4 If the cut month's Mechaca Avabilty is less th the Mechacal Avaabilty
Guatee, dages shal be equa to:
((85 pert of the month's Calcued Net Energy Amount) mius the
month's act Net Ener deliveres) multiplied by the Avalabilty Shortal
Prce.
6.4.5 Any dages calculated in pargrph 6.4.4 will be offse aga the cut month's
energy payment. If an unpad balce re afer the dages ar offset agat the
ener payment, the Seller shal pay in full the rening balce with th (30) days
of the dae of the invoice.
ARTICLE VLL: PURCHASE PRICE AN METOD OF PAYM
7.1 Heavy Load Puha Prce - For al Net Ener reived durg Heavy Load Hour,
Idao Power wil pay the non-Ieveliz ener price in accordce with Comssion Or
31025 adjusted in accordace with Commssion Orde 30415 for Heavy Load Hour Energy
delivees, adjus in accorce with Comssion Order 30488 for the wi intion cha,
and with sesonation faors applied:
Sea 3 - (100.00 %)
MislWhYear
Season 1- (73.50 %)
MillsWh
Sean 2 - (120.00 %)
MilslWh
2010
2011
2012
40.52
42.80
45.32
66.15
69.87
74.00
55.12
58.24
61.66
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2013 47.71 78.18 64.92
2014 50.29 82.74 68.42
2015 53.05 87.64 72.17
2016 54.64 90.46 74.34
2017 56.20 93.23 76.61
2018 57.90 96.25 79.12
2019 59.57 99.21 81.59
2020 61.29 102.27 84.14
2021 63.33 105.90 87.16
2022 65.46 109.67 90.31
2023 67.67 113.59 93.57
2024 69.97 117.66 96.97
2025 72.35 121.90 .100.50
2026 74.38 125.49 103.49
2027 76.62 129.20 106.58
2028 78.96 133.03 109.77
2029 81.38 136.97 113.06
2030 83.87 141.04 116.45
2031 87.22 146.51 121.01
2032 90.15 151.30 125.00.
2033 93.19 156.26 129.13
7.2 Light Load Puhase Prce - For all Net Ener reeived dug Light Load Hour, Idao Power
wil pay the non-Ievelized energy prce in acrdce with Commsion Ordr 31025 adjus in
accordace with Commssion Ord 30415 for Light Load Hour Ener deliveries, adjuste in
accordce with Commssion Order 30488 for the wid integrtion chare, and with
sesonaiztion factrs applied:
Season 1 - (73.50 %)Seaon 2 - (120.00 %)Season 3 - (100.00 %)
Year MilslWh MilslWh MilslWh
2010 35.59 58.11 48.42
2011 37.88 61.84 51.54
2012 40.40 65.95 54.96
2013 42.79 69.86 58.22
2014 45.37 74.06 61.72
2015 48.13 78.91 65.48
2016 49.72 81.73 67.64
2017 51.28 84.50 69.76
2018 52.97 87.51 72.07
2019 54.65 90.47 74.35
2020 56.37 93.53 76.86
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2021 58.41 97.16 79.88
2022 60.54 100.93 83.03
2023 62.74 104.85 86.29
2024 65.04 108.92 89.69
2025 67.43 113.16 93.22
2026 69.45 116.76 96.21
2027 71.55 120.47 99.30
2028 73.70 124.29 102.49
2029 76.03 128.24 105.78
2030 78.52 132.31 109.17
2031 81.87 137.77 113.73
2032 84.80 142.56 117.72
2033 87.84 147.52 121.85
7.3 All Hour Energy Price - The price to be us in the calcuaton of the Surlus Ener Prce and
Delay Prce shll be the non-leveliz ener price in accordace with Commsion Ord 31025
adjusted in accordce with Commssion Order 30488 for the wid integrtion ch8ge, and with
seonalzation factors applied
Sean 2 - (120.00 %) Sen 3 - (100.00 %)
MilslWh MiWhYea
Seaon 1 - (73.50 %)
MilslWh
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
38.33
40.61
43.13
45.52
48.10
50.86
52.45
54.01
55.71
57.37
59.10
61.4
63.27
65.48
67.78
70.16
72.18
74.28
76.58
79.00
81.49
62.57
66.30
70.42
74.33
78.85
83.75
86.58
89.35
92.36
95.32
98.38
102.01
105.78
109.70
113.77
118.01
121.60
125.31
129.14
133.09
137.16
52.14
55.26
58.68
61.93
65.44
69.19
71.36
73.48
75.88
78.35
80.90
83.92
87.07
90.33
93.73
97.26
100.25
103.35
106.53
109.82
113.21
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2031
2032
2033
84.84
87.77
90.81
142.62
147.41
152.37
117.77
121.76
125.89
7.4 Suilus Energy Prce - For al Surlus Ener, Idao Power sha pay to the Seller the cuent
month's Maret Energy Referce Prce or th Al Hour Ener Prce specfied in pagrh
7.3, whichever is lower.
7.5 Indvertent Ener-
7.5.1 Inverent Ener is elecc energ pruced by the Facilty, expse in kWh,
which the Seller delivers to Idao Power at the Poin of Deliver tht exceds 10,000
kW multiplied by the hour in the spific month in which the ener was deliver
(For exaple Janua conta 744 hour. 744 hour times 10,000 kW = 7,440,000
kWh. Energy deliver in Januar in excess of 7,440, 000 kWh in th exaple
would be Inadverent Ener.)
7.5.2 Although Seller inteds to design and operte the Facilty to generte no more th
10 averge MW and therore doe not intend to generte Inveren Ener,
Idao Power will acc Inadvertt Energy tht does not excee the Maxum
Capacity Amount but will not purhase or pay for Indverent Ener.
7.6 Payment Due Date - Undiputed Energy payments, less the Wind Ener Prducton Foreting
Monthy Cost Alocation (MCA) descrbe in Appendi E and any other payments due Idao
Power, wil be disbur to the Seller with 30 days of the dae which Idao Power reeives and
accets the documentation of the monthy Mechaca Avalable Guate and the Net Ener
actuy delivere to Idao Power as specifed in Appedi A.
7.7 Contiuig Jursdicton of the Commssion. Ths Agent is a spial contrt and, as such, the
rates, ter and conditions contaed in ths Ageement wil be consd in acorce with
Idao Power Company v. Idao Public Utilities Commsion and Afon En. Inc., 107 Idao
781, 693 P.2d 427 (1984), Idao Power Company v. Idao Public Utiities ComssiQl 107
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EXHIBIT i PAGE 64 OF 92
Idao 1122,695 P.2d 1 261 (1985), Afon Ener Inc. v. Ido Power Company, 111 Idao 925,
729 P.2d 400 (1986), Secon 210 of the Public Util Regutory Policies Act of 1978 and 18
CFR §292.303-308.
ARTICLE VI: ENVONMENAL ATIUTS
8.1 Seller retai ownerhip under ths Agent of gr tags and reewable ener cercates
(RCs), or the equvalent envinmental attributes, ditly associated with the proction of
ener fr the Sellers Facilty sold to Idao Power.
ARTICLE IX: FACILIT AN INCONNCTION
9.1 Design of Facilty - Seller wil design cons, in, own opee and mainta the Facity
and any Seller-owned Interonnecon Facilties so as to alow sae and reliable generon and
delivery of Net Energy and Indverent Ener to the Idao Power Point of Deliver for the fu
ter of the Agrement.
9.2 Interonnecon Facilties - Except as spifcaly provided for in th Agrent, the reui
Interconnection Facilties will be in accrdce with Schedule 72, the Genertion Interonnection
Prcess and Appendi B. The Seller is reponsible for al costs associated with ths equipment as
speified in Schedule 72 and the Generon Internnecton Prss, includig but not lited to
intia costs incur by Idao Power for equipment costs, installation cost and ongoing monthy
Idao Power opertions and maitece expes.
ARTICLE X: MEG AN TEY
10.1 Meterg - Idao Power sh, for the accunt of Seller, provide, in, and mata Met
and Telemet Equip~ent to be locate at a mutuly ag upon loction to rerd and mea
power flows to Idao Power in accordce with ths Agent and Schedule 72. Th Meter
Equipmen will be at the location and the ty reui to meaur, reord and reprt the
Facity's Net Energy, Station Use, Inveent Ener and maum ener deliveres (kW) at
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EXHIBIT i PAGE 65 OF 92
the Point of Deliver in a maer to provide Idao Power aduae energy meaent data to
adste th Agent and to ineg th Facilty's energy procton into the Idao Power
elecca system.
10.2 Telemet - Idao Power wi inta, opete and mata at Sellers exp meterg,
communcations an telemet eqpment which wil be capable of providig Idao Power with
contiuous intataeous telemet of Sellers Net Energy and Inveent Ener prouced and
deliver to the Idao Power Poit of Deliver to Idao Powers Designated Disptch Facilty.
ARTICLE XI - RECORDS
11. Maitence of Records - Seller shal mainain at the Facilty or suh other location mutuy
accepble to the Paries adeqe tota generation, Net Ener, Station Use, Inverent Energy
and maum generation (kW) recor in a for and content accepble to Idao Power.
1 1.2 Intion - Either Par, afer renale notice to the other Par, sha have the right, durg
norml business hour, to inpe and audit any or all genertion, Net Energy, Station Use,
hidveen Engy and maum generation (kW) rerds peg to the Sellers Facilty.
ARTICLE Xl: OPERATIONS
12.1 Communcations - Idao Power and the Seller shl mata apprpriate operatig
communcations thugh Idao Power's Designated Diatch Facty in acordace with
Appendix A of this Agreeent.
12 .2 Energy Acceptace -:
12.2.1 Idao Power shl be excus frm accepti and payig for Net Energy or aceptig
Inverent Ener' which would have otheiise ben produce by the Facilty and
delivered by the Seller to the Point of Deliver, if it is prevented frm doing so by an
event of Forc Majeu, Forc Outage or temora disconnection of the Facty in
accordace with Schede 72. If, for rens other th an event of Force Majeu or a
Forced Ouge, a tempora disconecion under Schedule 72 excee twenty (20) days,
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begiDning with the twenty-fit day of such inteption, cuilent or recton, Seller
wil be deed to be deliveng Net Energy at a rate equivaent to the pro rata day
avege of the amounts specified for the applicable month in pargrh 6.2. Idao Power
wil notify Seller when th inteption, culment or reucton is terte.
12.2.2 If in the reasnable opinon of Idao Power, Sellers opeon of the Facilty or
Interonnecon Facties is une or may other adverely afec Idao Powers
equipment, persnnel or sece to its customer, Idao Power may temporay
dionec the Facilty frm Idao Power's trsmssion/distbution system as spifed
with Schedule 72 or tae such other reasonale steps as Idao Power deem
approte.
12.2.3 Under no ciumstces wi the Seller deliver Net Ener anor Inadverent Energy
from the Faciity to the Point of Delive in an amount tht excee the Maximum
Capacity Amount at any moment in time. Seller's faur to lit deliveres to the
Maxum Capacity Amount wil be a Materal Breh of ths Agrent.
12.2.4 If Idao Power is unble to accept the energy from ths Facilty and is not excus frm.
acceptig the Facilty's energy, Idao Power's dages shal be lited to ony the value .
of the ested energy that Idao Power was unble to act. Ido Power wil have
no respnsibilty to pay for any other costs, lost revenue or couenti daes the
Facilty may incu.
12.3 Scheduled Matenance - On or before Janua 31st of each calenda yea, Seller shal submt a
wrtten prse matence schedule of signficat Facilty matence for tht caenda yea
and Idao Power and Seller sh mutuly agr as to the acctabilty of the prose schedule.
Th Pares deertion as to the acceablity of the Seller's tietble for scheed
mainenance wil tae into considetion Pnent Elecca .Prctce, Idao Power sys
reuients and the Seller's preer schedule. Neither Par sh unsobly withold
accepce of the prse matence schedule.
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12.4 Maitence Cooron - The Seller and Idao Powersh to the exten prctca, cooe
their respeve line an Facilty mate schees su th they oc siultaeously.
12.5 Con Pnor to Cuent - Idao Power wil mae a reaonble att to conta the Seller
prior to exerisin its rights to inerpt intennecon or cur delivees frm the Seller's
Facilty. Seller underds th in the case of emergency cirtace, re tie opertions of
the electrcal syst and/or unplaed events Idao Power may not be able to provide notice to
the Seller prior to inteption, cuent, or reuction of eleccal ener delivees to
Idao Power.
ARTICLE XID: INEMNICATION AN INSURCE
13.1 Indemfication - Eah Par sh agree to hold haess and to indefy the other Par, its
offce, agents, afiates, subsidiares, part company and employees aga all loss. dae,
expen and liabilty to th peons for injur to or death of pen or injur to prope,
proxily caused by the inemfyg Par's (a) conscton, ownerp, opeion or
matenance of, or by faur of, any of such Par's works or facilities us in connecion with
ths Agrent, or (b) neglgent or inention acts, errs or omissions. The indefyg Par.
shall, on the other Pary's request, defend any suit asserg a cla covered by ths indemty.
The indefyg Par shal pay al docuented costs, includig reble attoIney fee that
may be incued by the other Par in enforcing th indety.
13.2 Inurce - Dug the ter of ths Agrent, Seller shal seur and contiuously car the
following inure covere:
13.2.1 Compreenive Generl Liabilty Inurce for both boy injur and prpe dage
with limits equa to $1,00,000, each occuce, cobined sigle limt. The deductble
for such ince sh be consistet with curt Insurce Industi Utity prace for
simlar propert.
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13.2.2 The abve ince coverge sti be pla with an inurce company with an AM.
Best Company rating of A- or beer and sh include:
(a) An endorsent nag Idao Power as an adtional inur and loss payee as
applicable; an
(b) A provision sttig tht su policy shall not be caceled or the lits of liabil
reuce without six (60) days' pror wrtt notice to Idao Power.
13.3 Seller to Prvide Cerficate of Inurce - As reui in pagrh 4.1.6 herin and any
therer, Seller sha fush Idao Power a cerifcate of inurce, togeter with the
endorsents requi th evidecin the coverge as se fort above.
13.4 Seller to Notify Idao Power of Loss of Coverge - If the ince coveage req by
pargrph 13.2 shall lapse for any reasn, Seller wil imedately notify Idao Power in wrtig.
The notice will advise Idao Power of the speifc reon for the lapse an the sts Seller is
tag to reinstate the coverge. Failur to provide ths notice and to expedtiously reintate or
relace the coverge wil constute a Maten Brech of ths Agent.
ARTICLE XI: FORCE MA
14.1 As used in ths Agrent, "Force Majeue" or "an event of Force Majeur" mean any cause
beyond the contrl of the Seller or of Idao Power which, despite the exercie of due digence,
such Par is unble to prevent or overcme. Forc Majeu includes, but is not lite to, acts of
God, fie, floo storm, war, hostties, civi stre, stes and other labo dibances,
eaquaes, fis, lightng, epidemcs, sabotage, or chages in law or regulation occug afer
the Effecve Date, which, by the exerise of renable foright such par could not reonably
have been expeced to avoid and by the exeris of due digence, it shall be unble to overe.
If either Pary is rede wholly or in pa unle to . peorm its obligations unde ths
Ageeent becuse of an event of Forc Majeu, both Pares sha be excu fr whaver
perormce is afeced by the event of Forc Majeu, prvided tht:
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(1) The non-peormg Par sh, as soon as is renably possible af th
occuce of the Forc Majeu, give the other Par wrtten notice debing
the pacula of the oc.
(2) The suspion of peorce sha be of no gr scope and of no longe
duron th is re by the event of Forc Majeu.
(3) No obligations of either Par which arse before the occurence causing the
sunson of peormce and which could and. shuld have bee fuy
peormed before suh occurce sh be excu as a result of such
ocene.
ARTICLE XV: LIILITY; DEDICATION
15.1 Limtation of Liabilty. Nothg in ths Agrent sh be consed to cre any duty to, any
stadad of ca with referce to, or any liabilty to any peon not a Par to ths Agrent.
Neither pa sha be lible to the other for any indi, spia, consuen, nor puntive
dages, excet as exressly authonz by ths Agrent.
15.2 Dedcation. No under by one Par to the other under any provision of ths Agrent
shal costitute the dedcation of tht Par's sysem or any porton therf to the Par or the
public or affect the sttus ofIdao Power as an indedent public utility corpration or Seller as
an independent individua or entity.
ARTICLE XVI: SEVE OBLIGATIONS
16.1 Excet wher spificaly stated in ths Agreeent to be othere, the duties, obligations and
liabilities of the Pares ar intede to be sever and not joint or collecve. Nothg contaed
in ths Agrent sh ever be constred to create an association, tr parershp or joint
ventu or impose a tr or parerhip duty, obligation or libilty on or with rega to either
Par. Eah Par sha be individuay and severy liable for its own obligations under ths
Agent.
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ARTICLEXVII WAIER
17.1 Any waiver at anytie by either Par of its nghts with resp to a default unde th Agent
or with repe to any other ma arsing in connecon with ths Agent sha not be
deed a waiver with re to any subseuent defaut or other matter.
ARTICLE xv: CHOICE OF LAWS AN VENU
18.1 Ths Agrent shl be cotred and inter in accordce with the laws of the State of
Idao without referce to its choice oflaw provisions.
18.2 Venue for any litigation arsing out of or related to ths Agrent wi lie in the Distct Cour of
the Four Judicial Distnct of Idao in and for the County of Ada.
ARTICLE XIX: DISPUTS AN DEFAULT
19.1 Dis,utes - Al disputes related to or arsing uner th Agent, includig, but not lited to,
the interretion of the ters an conditions of ths Agrent, wil be submitt to .the
Commssion for reolution.
19.2 Notice of Default
19.2.1 Defaults. If either Par fais to peorm any of the ters or condition of ths
Agreeent (an "event of default"), the non-defaultig Par sha cause notice in
wrtig to be given to the defautig Par, spifg the maer in which such
defaut occ. If the defaulting Par shal fa to cu such default with the six
(60) days afer serce of such notice, or if the defaulti Par reonably
demonstrtes to the other Par th the defaut can be cur with a coerially
reasnable tie but not with such six (60) day peod and then fai to diligetly
pur such cu, then th non-dfaulg Par may, at its opton tee th
Agent and/or purue its lega or equitale reedes.
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19.2.2 Mateal Breaches - The notice and cu provisions in paph 19.2.1 do not apply
to defaults idetied in ths Agrent as Matal Breahes. Materal Brehes must
be cued as expditiously as possble following occe of the breach.
19.3 Secty for Performance - Pror to the Opertion Date and therft for the fu ter of ths
Agrent, Seller wil provide Idao Power with the followig:
19.3.1 Insuce - Evidece of compliance with th _provisions of pagrph 13.2. If Seller
fa to comply, such failur wil be a Mater Brech and may only be cur by
Seller supplyig evdence th the re insuce coverge has be relace or
reintated
- 19.3.2 Engiee's Cerfications - Ever th (3) yea after the Option Date, Seller wil
supply Idao Power with a Certcation of Ongoing Oprations and Maitece
(O&M) frm a Registered Professiona Engieer liced in the State of Idao, which
Cerfication of Ongoin 0 & M shal be in the form specified in Appdi C. Seller's
failur to supply the req cecate wil be an event of default. Such a default
may only be curd by Seller providig the re cecae; and
19.3.3 Licenes and Perts - Dug the fu te of ths Agrent, Seller sha mata
compliance with al perts and lices desbe in pargrph 4.1.1 of ths
Agrent. In addition, Seller wi supply Idao Power with coies of any new or
additiona perts or license. At least ever fift Contrct Year, Seller will updte the
docuentation debed in Pargrh 4.1.1. If at any time Seller fais to maita
compliance with the-pets and licees described in pargrph 4.1.1 or to provide
the docentation reuied by th pagrph, suh faiur wil be an event of default.
and may only be cur by Seller submittg to Idao Power evdence of compliance
fr the pettg agency.
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ARTICLE XX: GOVEAL AUTORITION
20.1 Ths Agent is subjec to the jursdcton of those goveenta agecies havig contrl ove
either Par of ths Agent.
ARTICLE XX: COMMISSION ORDER
21.1 Th Agreeent sh beome fiy effecve upon the Commssion's appva of al ter and
provisions herf without chage or condtion and declarion th al payments to be mae to
Seller herde shl be alowed as pndetly incued expens for rate pur.
ARTICLE XX: SUCCESSORS AN ASSIGNS
22.1 Ths Agreeent and all of the ter and provisions herf sha be bindig upon and inur to the
benefit of the reve successors and assign of the Paries hero, excet tht no assignent
herof by either Par sha beome effecve without the wrtten conent of both Pares being
firt obtaed. Such const sha not be umonaly witheld. Notwthstdig the foregoing,
any par which Idao Power may consolidate, or into which it may mere, or to which it may
conveyor trfer substy all of its elecc utiity asse, sha automaticay, without fn
act, and without need of const or approva by the Seller, succe to al ofIdao Power's rights,
obligations and intersts under ths Agrent. Ths arcle shl not prevent a fincig entity
with recorded or sec rights frm exerisg all rights and reedes avaable to it unde law
or cotrct. Idao Power shall have the right to be notified by the ficing entity that it is
exerising such rights or reedies.
ARTICLE XX: MODIFICATION
23.1 No modication to ths Agent shl be vaid uness it is in wrti and signed by both Pares
an subseuetly approved by the Commssion.
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ARTICLE XX: TAXS
24.1 Eah Par sha pay before deliquency al taes and other goverenta cha which, if faled
to be paid whe due, could resut in a lien upo the Facty or the Intennecon Faclities.
ARTICLE XX: NOTICES
25.1 Al wntten notices under ths Agreeent sha be direed as follows and shal be conide
delivered when faxed e-maled and confed with depsit in the U.S. Mai, fit-class, postage
prepaid, as follows:
To Seller:Origi document to:
Rabow West Wind LLC
Amercan Wind Grup, LLC - Authorid Manger
Att: Bri D. Jackson
2792 Dese Wind Road
Oasis, Idao 83647-5020
E-mail: Brian~ercanWind.net
Telephone: [phone]
Copy of document to:
Inovative Energy Inc.
Att: Ben Baret
P.O. Box 11112
Jackson, WY 83002
E-mal: Bbbalett4~gmaii.com
Telephone: [phone]
To Idao Power Orgi document to:
Senor Vice Pridet, Power Supply
Idao Power Company
P.O. Box 70
Boise, Idao 83707
Email: Lgrw~daopwer.com
Cem of document to:
. Cogeertion and Sma Power Prcton
Idao Power Company
P.O. Box 70
Boise, Idao 83707
E-mai: raphi~daopower.com
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Either Pary may chage the coct peon and/or ads inormtion listd above, by providig wrttn
notice frm an authori pen reretig the Par.
ARTICLE XX: ADDmONAL TERMS AN CONDmONS
26.1 Th Agrent includes the followig appdices, which ar attched hero an included by
reference:
Appedi A
AppedixB
AppeCAppdiD
AppediE
Monthy Power Prucion and Availty Rert
Facilty and Point of Deliver
Engiee's Cefication
Forms of Liquid Secty
Wind Ener Prcton Forecasg
ARTICLE XX: SEVILIT
27.1 The invaidity or unenorceabilty of any ter or provision of ths Agrent shl not afec the
validity or enorceabilty of any other tes or provisions and th Agrent sha be consed
in all other respets as if the invad or unenorcble term or provision wer omitt.
ARTICLE xx: COUNARTS
28.1 Ths Agrment may be execte in two or more countear, each of which sha be deeed an
origi but all of which togeter sha constitute one and the same inent.
ARTICLE XX: EN AGREEME
29.1 Ths Agrent constitutes the enti Agent of the Pares concerg th subjec matt
hereof an superes al pror or cotemporaeous ora or wrtten agrents beeen the
Paries concerg the subjec matt herf.
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IN WISS WHREOF, The Pares hero have case th Agrent to be exected
in thei reve naes on the dates se fort below:
Idao Power Company Rabow Wes Wind LLC
By ~lsa¿ Q. ~AJ
Lis A Grw
Sr. Vice President, Powe Suply
BY~i:
Màger of Amercan Wind Grup LLC
Amercan Wind Grup LLC .
beig the authnz mager of
Rainw West Wind LLC
Dated
)2. ~ I~~JO Dated /2--/3 -2-IO
"Idao Power "Seller
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APPENlXA
A-I MONT Y POWER PRODUCTON AN AVAIILIT REORT
At the end of each month the followig re documentaion wil be submtted to:
Idao Power Compy
Att: Cogeneron and Smal Power Prduction
PO Box 70
Boise, Idao 83707
The meter redigs reqed on ths reort will be the regs on the Idao Power Met Eqpment
meag the Facilty's tota ener prouction deliver to Idao Power and Station Usage and the
maxum generted energy (kW) as rerded on the Meterg Eqipment and/or any other reui
ener measuments to adeqtely admster ths Agrent. Ths document shal be the docent to
enble Idao Power to begi the energy payment calcuation and payment proess. The met readigs
on ths rert sha not be used to calcuate the ac payment, but instea wil be a check of the
automated meter readig inormtion tht wi be gatherd as decrbed in ite A-2 below:
Ths reort shall also include the Seller's calculation of the Mechacal Avaabilty.
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Idao Power Company
Cogeneratin and SmaD Power Prducton
MONTHY POWER PRODUCTON AN AVAIILIT REPORT
Month Year
Project Name Projec Nnmr:
Address Phone Number:
City State Zip
Net Facilty
Output
Station
Usage
Station
Usage
Metered
Maxum Generatin
Meter Number:
End of Month kWh Meter Readig:
Begg of Month kWh Meter:
Difference:
Times Meter Consant:
kWh for the Month:
Metered Demand:
kW
Net Generatin
Mechanical Avaiabilty Guarantee
Seller Calculate Mechanical Avabilty
As speced in th Ageement, the Seler sha include with tbs monthy report a sumry statement of the
Mechancal A vaabilty of th Facilty for the calendar month Ths summ shal include det as to how
the Seller calculted tbs value and su of the Faclty data used in the calcultion. Idaho Power and
the Seller sha work together to mutualy develop a sum report that provides the requied data. Idaho
Power resrves the rigt to review the detaied data use in tbs calcultion as alowed with the Ageement.
Sigtu Date
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EXHIBIT i PAGE 78 OF 92
A-2 AUTOMATE ME REING COLLECTION PROCESS
Monthy, Idao Power wil use the provide Metg and Telemet equpment and pross to collec
the meter reg inormtion frm the Idao Power prvide Meteng Eqpment tht meass the Net
Energy and energy deliver to supply Station Use for the Facilty record at 12:00 AM (Midnght) of
the last day of the month.
The metr inormion collec will include but not be lite to energy pructon, St8.on Use, the
maum generon (kW) and any other re ener meaents to aduately adster th
Agrent.
A-3 ROUT REPORTIG
Idao Power Contac Inortion
Day Ener Pruction Reportg
Call day by 10 a.m., 1-800-356-4328 or 1-800-635-1093 and leave the followig
inormtion:
. Prject Identication - Prject Name and Prject Numbe
. Cuent Meter Reg
· Estited Genertion for the curent day
. Estite Genertion for th next day
Planed and U:qlaed Prjec outages
Call 1-800-345-1319 and leave the followig inormation:
. Prjec Idetication - Projec Name and Prjec Numbe
· Approximte tie outae occur
Estimated day and tie of projec comg back one
Seller's Conta Inormtion
24-Hour Prjec Optiona Contact
Name:
Telephone Numbe
Cell Phone:
Bnan D. Jackson
208-796-2222
208-859-1882
Prjec On-site Contat inormtion
Telephone Numbe
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APPENIXB
FACILIT AN POIN OF DELNY
Prject Name: Rabow West Wind Projec
Prject Numbe 31615550
B-1 DESCRION OF FACILIT
(Must include the Namplate Capacity rating and V AR capaility (both leaing an laggg) of all
generaton units to be included in the Facilty.)
The facilty will be comprised of approxitely te (10) wind tuines with a cuulative
naeplate rating tht will not exceed the Maxum Capacity Amount as spified in Item B-4
and not less th 18 MW. At the time ths agrent was execute selection of the tuine
maufactur had not be fi by the Seller. At the tie the Seller provides the detaed
deption of the wind tuines seleced and quatity to be included in the Idao Power
Internnecon proess, the Seller wi provide th same informtion to be included in th
Agrment. The Facilty is curtly coniderg use of up to nie (9) Norx Nl00 wid tuines
(Nameplate Capacity rating up to 2.5MW ¡tuine, 0.95 IeadlO.95 lag power factor) or up to 11
DeWind D9.2 wind tuines (Nameplate Capcity raing up to 2MW/tubine, 0.90 lea-
inductvelO.90 lag-capacitive power facor), or other wid tubine models.
B-2 LOCATION OF FACILIT
Nea Declo. Idao
nos. R26E. SEC: 11. 12.2, and 1, County: Cassia
Description of Internnecon Location 138 kV Idao Power Trassion Line Tap
Nea Idao Power Substion: Jacksn
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B-3 SCHEUL FIST ENRGY AN OPERTION DATE
Seller ha selec Decber 31. 2011 as the Scheduled Fir Ene Date.
Seller has selecte Decebe 31. 2012 as the Scheduled Opration Date.
In makg these selecions, Seller regnes tht aduate testi of the Facty an completion
of al requients in pargrph S.2 of th Agrent must be completed pnor to the project
beg grted an Option Date.
B-4 MA CAPACIT AMOUN:
Ths vaue wi be 23 MW which is consist with th value provide by the Seller to
Idao Power in accordce wit Schedule 72. Ths value is the maum energ (MW) th
potetialy could be deliver by the Seller's Facilty to the Idao Power electrcal syem at any
moment in time.
At the time ths Agrement was exected the Seller ha rest only 20 MW of capacity in the
inteconnecion and trmission cacity process. Pnor to the prect deliveng ener tht
exce 20MW, the Seller mus reues and be grted additiona capacity up to but not
exceedg 3 MW in both internnecon and trmission caacity by Idao Power. The Seller
must ma ths addtiona capacty reest using the routie Idao Power inteection and
trmission capacity proess and shall be reible for al cost associated with ths addtiona
capacity reuest. Under no citaces wil the Nameplate Capaity of ths Facilty exce
23MW. If the inaled capacity is less th the Maum Capacity Amount at the end of the
fit Contr Yea, the Maxum Capacity Amount wi be adjused downwar to reflec the
ac naeplat rag of the wind tuines instaled. Ths revied Maxum Capacity Amount
wil then rein in effec for th reg ter of ths Agent.
B-S POIN OF DELIVRY
"Point of Delivery" mea, uness otherse ag by both Pares, the pont of wher the Seller
Facilty's energy is deliver to the Idao Power eleccal sys. Schedule 72 will deere
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the spefic Point of Deliver for ths Facilty. The Point of Delive ideed by Schede 72
wil bee an integr pa of ths Agren.
B-6 LOSSES
If the Idao Power Meterg eqpment is cale of measg the exact energy deliveres by the
Seller to the Idao Power elecca system at the Point of Deliver, no Losses wi be cacuated
for ths Facilty. If the Idao Power Meteng equipment is unble to meaur the exat energy
deliveres by the Seller to the Idao Power electrcal system at the Point of Deliver, a Losses
cacuation wi be established to measur the ener losses (kWh) beee the Seller's Facilty
and the Idao Power Point of Deliver. Ths loss cacuation wil be intialy set at 2% of the
kWh energy prduction recrded on the Facilty genertion meterg equipment. At such tie as
Seller prvides Idao Power with the elecca equipment spefications (trformer loss
specificaons, conductor sizs, etc.) of all of the electrcal equipment betwee the Facilty and the
Idao Power electrca system, Idao Power wil confgue a revise loss cacuation formula to
be agr to by both pares and us to caculate the kWh Losss for the reaig term of the
Agreeent. If at any tie durg the ter of ths Agrent, Idao Power deteres tht the
loss calcultion does not corrly reflect the ac kWh losss attbut to the elecca
equipment betwee the Facilty and the Idaho Power eleccal sys, Idao Power may adjust
the cacuaton and reoacively adjust the prevous months kWh loss calcuations.
B-7 MERIG AN TELEMETY
Schedule 72 wi detere the specific metg and telemetr reuients for ths Faclity. At
the mium, the Meteg Equipment and Telemet equipment must be able to provide and
recor hourly ener deliveres to the Point of Delivery and any other ener measuents
reui to admster th Agrement. Thes speifcations wi include but not be lited to
equipment spcification, eqpment locon, Idao Power provide equipment, Seller prvided
eqpment, and all costs assoiat with the equipment, design and inlation of th
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EXHBIT i PAGE820F92
Idao Power provided equipment. Seller wil are for and mae avable at Sellers cost
communcation cit(s) compatible with Idao Power's comuncation equipment and
decated to Idao Powers us teting at the Idao Power facilties caable of providig
Idao Power with contiuous intataeous inormtion on the Facities ener pron.
Idao Power provided equipment wil be owned and mataed by Idao Power, with tot cost
of purha, intaation, operon, and matece, includig adstrtive cost to be
reibured to Idao Power by the Seller. Paymen of these cost wil be in accordce with
Schedule 72 and the total meterg cost wil be included in the cacuation of the Monthy
Option and Maitenance Ches speifed in Schedle 72.
B-8 NETWORK RESOURCE DESIGNATION
Idao Power canot acept or pay for generon frm ths Faclity until a Network Resource
Designtion ("NRD") application has be acd by Idao Power's deliver business unt.
Feder Ener Regulatoiy Commssion ("FERC") rues reui Idao Power to pr and
submit the NR. Beause much of the informtion Idao Power needs to pre the NR is
specc to the Seller's Facilty, Idao Power's abilty to fie the NR in a tiely maer is
contigent upo timely rept of the reir inormtion frm the Seller. Pnor to Idao Power
begig the proess to enble Idao Power to submit a reues for NR sttu for ths Facity,
the Seller sha have completed all reuients as spifed in Pargrh 5.7 of ths Agrent.
SeDer's faHure to provide complete and accurate inormation in a tiely manner can
signficantly impact Idaho Power's abilty and cost to attn the NR desigtion for the
SeDer's Facil and the SeDer shaD ber the costs of any of these delays tht are a resul of
any acton or inacton by the Seler.
-37-
12/13/2010
EXHIBIT 1 PAGE 83 OF 92
APPENIXC
ENGIN'S CERTIFCATION
OF
OPERTIONS & MANANCE POLICY
The undeignd , on behaf of hiself7er1fand
, heriner collecvely refered to as "Engiee," herby sttes and cerfies to the Seller
as follows:
1. That Engiee is a Licesed Prfessiona Engiee in good stadig in the State of Idao.
2. That Engiee ha reewed the Energy Sales Agrent, herer "Agreeent," betee
Idao Power as Buyer, and as Seller, dated
3. Tht the cogenertion or small power prucon project which is the subjec of the. Agreeent
and ths Statement is identied as IPCo Facilty No. and is herer refer to as
the ''Pjec.''
4. Th the Projec, which is commonly known as the Prjec, is locate in
Section _ Townp Rage , Boise Merdi, County, Idao.
5. That Engiee reogns tht th Agrent provides for the Projec to fush elecca ener
to Idao Power for a twenty (20) yea perod.
6. Tht Engiee ha substtial exenence in the deign constiction and option of elecc
power plants of the sae tye as ths Prject.
7. Tht Engiee ha no ecomc relatonsp to the Design Enginee of ths Project.
8. Tht Engiee has reviewed and/or supesed the review of the Policy for Opon and
Maitence ("O&M") for ths Projec and it is his profession opinon that, provide sai4 Prjec has
bee designed and built to approprite stda, adherce to said O&M Policy wi ret in the
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EXHIBIT i PAGE 84 OF 92
Project's prucing at or nea the deign eleccal output, effciency and plant factr for a twenty (20)
yea peod.
9. Tht Engiee regn that Idao Power, in acrdce with pargrh 5.2 of the Agent,
is relyig on Engieers represetations and opons contaed in th Stateent.
10. Th Engiee cerfies tht the above stents ar complete, tr and acte to the bes of
hisler knowlede and therfore sets hisler had an sea below.
By
(p.E. Stap)
Date
-39-
12113/2010
EXHIBIT 1 PAGE 85 OF 92
APPENIXC
ENGIN'S CERTICATION
OF
ONGOING OPERTIONS AN MAINANCE
Th underigned , on beha of hise1ferelf
herer collecvely refer to as "Engiee,".. herby state and.and
certes to the Seller as follows:
1. Tht Enee is a Lice Prfessiona Engieer in goo stdig in th State of Idao.
2. Tht Engiee ha reviewed the Ener Sales Agrent, her "Agent," beee
Idao Power as Buyer, and as Seller, dated
. 3. Tht the cogeneration or smal power producon projec which is th subject of the Agrent
and ths Staement is identified as IPo Facilty No. and herafer refer to as the
"Prjec".
4. Th the Prjec, which is comonly known as the Prjec, is located in
Secion _ Townhip Rage , Boise Merdian County, Idao.
5. Tht Engieer regnzes tht the Agrment provides for the Project to fu electrca ener
to Idao Power for a twenty (20) year perod.
6. That Engiee has substantial expnence in the design, constrcton and opertion of elecc
power plants of the sae typ as ths Prject.
7. Tht Engiee ha no ecomic relationp to the Design Engiee of ths Project.
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EXHIBIT i PAGE 86 OF 92
8. Tht Engiee ha made a physica inon of said Prjec its opetions and maence
rerd since th last prvious ceed inecon. It is Engiee's professiona opinon, ba on the
Prjec's apparce, th its ongoing O&M has be substtiy in acrd with said O&M Policy
tht it is in reonably goo opetig condition; and tht if aderce to sad O&M Policy contiue, thè
Projec will contiue prucing at or nea its deign eleccal output, effciency and plan faor for the .
remg year of the Agrent.
9. Tht Engiee reognzes tht Idao ,Power, in accordce with pagrh 5.2 of the Agrent,
is relyig on Engiee's reresentations and opinons contaed in ths Stateent.
10. Tht Engieer cerfies that the above statements ar complet, tre and acte to the bet of
hisl knowledge and therfore sets his/er had and se below.
By
(p.E. Stap)
Dat
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EXHIBIT 1 PAGE 87 OF 92
APPENIXC
ENGIN'S CERTICATION
OF
DESIGN & CONSTRUCTION ADEQUACY
The undegned , on behaf of histMlherlf and
herer collecvely referrd to as "Enee", herby states and
cefies to Idao Power as follows:
1. That Engieer is a Lice Prfession Enginee in good stadig in the State of Idao.
2. Tht Engineer ha reviewed the Fir Energy Sales Agrement, hereier" Agrent",
betwee Idao Power as Buyer, and as Seller, daed
3. Tht the cogeneration or smal power proucton prjec, which is the subject of the
Agent and ths Statent, is idetifed as IPo Facilty No and is her
refer to as the "Prjec".
4. That the Prjec which is commonly known as the Prjec, is locted in
Section _ Township Rage , Boise Merdian, County, Idao.
5. That Engiee reogs that the Agrent provides for the Prject to fuh elecca
energy to Idao Power for a twenty (20) year perod.
6. Th Engieer ha substatial expeence in the design constrction and opertion of
elecc power plants of the sae type as ths Prjec.
7. Th Engiee ha no ecnomic relationshp to the Deign Engiee of th Prjec and
has made the anysis of the plans an spifications indeendently.
-42-
12/13/2010
EXHIBIT 1 PAGE 88 OF 92
8. Tht Engieer ha reewed th engi design and conston of the Prjec
including the civi work elecca work, genertig equipment, pne mover conveyace.sys, Seller
fushed Interonnecton Facilties and other Prjec facties an equipment.
9. Th the Prjec ha be cdnscted in acordae with sad pla an specificaons, al
applicable codes and consistent with Prut Electca Prces as tht ter is debe in the
Agrent.
10. Tht the design and constction of the Prject is such tht with reonable and prent
operaion and maintence practices by Seller, the Prject is capable of peorg in accordce with the
ters of the Agrent and with Prdet Elecca Prces for a twenty (20) year perod.
l1. , Tht Engiee regns th Idao Power, in accordce with pargrph 5.2 of the
Agent, in interconnecting the Project with its system is relyig on Engiees reresetations an
opinons contaed in ths Staent.
12. Tht Enginee cefies tht the above stateents ar complete, tre and acte to the
bet of hisler knowledge and therfore se hisler had and se below.
By
(p.E. Stap)
Date
-43-
12113/2010
EXHIBIT i PAGE 89 OF 92
APPENIXD
FORMS OF liQUI SEC
The Seller shal prvide Idao Power with comerialy resonable setY instents such as Cas
Escrow Securty, Guate or Le of Cret as those te are defied below or other form of liquid
ficia sety tht would provide rey avaible cash to Idao Power to satisfy the Delay Secty
reuiement and any other seurty reuient with ths Agrement.
For the puise of ths Appdix D, the ter "Cret Requients" sha mea acceptale ficial
creditworthiess of the entity providig the sety intrent in relation to the term of the obligation in
the reonable judgment ofIdao Power, provided tht any gutee and/or leter of credit issued by any
other entity with a short-ter or long-te investmen gre cret ratig by Stada & Poor's
Corporation or Mooy's Invesor Serces, Inc. sh be deed to have actable ficial
credtwortess.
1. Cash Escrow Secty - Seller shall deposit fuds in an escrw acunt esblied by the
Seller in a bang insttution acctable to both Paries equa to the Delay Securty or any
other reir securty amount(s). The Seller sha be responsible for all costs, and reve.
any intert eaed associated with estblishg and matag the escrow account(s).
Guatee or Letter of Cret Securty - Seller shall post and mata in an amount equa to the Delay
Secty or other requi seurtyamount(s): (a) a guty frm a par that satisfies the Cret
Requirments, in a for aceptable to Idao Power at its dition, or b) an irocble Le of Cret
in a form accepble to Idao Power, in favor ofIdao Power. Th Leer of Cret wi be issued by a
fici intution acceptable to both pares. The Seller sh be respnsible for al cost asiated
with estalihig an matag the Guatees) or Leers) of Credt.
-4-
12113/2010
EXHIBIT i PAGE 90 OF 92
APPENIXE
WI ENGY PRODUCTION FOREASTIG
As specifed in Commssion Order 30488. Idao Power sha make us of a Win Ener Pruction
Foreasg modl to foret the ener proucon frm ths Facity and other Qug Facilty wid
generation resours. Seller and Idao Power wil sh the cost of Wind Ener Pructon Foreasg.
The Facilty's sha of Wind Ener Pruction Foretig is detered as spefied below. Seller
sha wi not be grter th 0.1 % of the tota energy payments ma to Seller by Idao Power durg the
previous Contrt Yea.
a. For ever month of ths Agrent begig with the fi fu month af the
Fir Energy Date as specfied in Appendi B of ths Agent, the Wind
Energ Pruction Forestg Monthy Cost Alocation (MCA) wi be due and
payable by the Seller. Any Wind Energy Pructon Foresting Monthy Cost
Aloctions (MCA) tht ar not reimbured to Idao Power sha be deucted
frm ener payments to the Seller.
b. As the vaue of the 0.1 % cap of the Facilties tota ener payments will not be
known until the fi Contt Year is complet, at the end of the fit Contr
Yea any prior aloctions tht exceeed the 0.1 % ca sh be adjused to reflec
the 0.1 % cap. If the Facilty ha pad the monthy alloction, a refud wil be
includ in equa monthy amounts over the enuig Contr Yea. If the
Facilty ha not paid the monthy aloctions, the amount due to Idao Power wi
be adjuste accordiy and the unpad balance wi be deducted frm the
eng Contrt Yea's ener payments.
-45-
1211312010
EXHIBIT i PAGE 91 OF 92
c. The cost alocaion forul debe below wi be reewed and re if
ness on the la day of any month in which the cumulative MW naeplate
ratig of wid prjecs havig Commion approve agrents to deliver
energy to Idao Power has bee revised by an action of the Commssion.
d. The monthy cost alocation wil be baed upon the followi formula:
Wher: Tot MW fl is equa to the total naeplate ratig of all QF wid
projects th ar unde contrct to provide ener to Idao Power
Company.
Faclty MW tF is eq to the naepla rag of ths Facilty as
speified in Appdi B.
Anual Wmd Energy Producton Foreastig Cost (AFCost) is equa
to th tota anua cost Idao Power incu to provide Wind Energy
Procton Foreasg. Idao Power will este the AFCost fot the
curt yea based upon the preous yea's cost and expted costs for
the cut yea. At yea-ed, Idao Power wi copar the actu cost
to th estted costs and any dierce betee the estited AFCost
and the act AFCost wil be include in the next yea's AFCost.
Annual Cost Alocation (ACA) = AFCost X (F / TM
And
Monthy Cost Alocation (MCA) = ACA /12
e. . The Wind Ener Pructon Foreastig Monthy Cost Aloction (MCA) is
due and payable to Idao Power. The MCA wil fi be neted agai any
monthy energy payments owed to the Seller. If the netg of the MCA agat
the monthy ener payments results in a balance being due Idao Power, the
Faciity shal pay ths amount with fift (15 )dys of the dae of the payment
invoice.
-46-
12113/2010
EXHIBIT 1 PAGE 92 OF 92
20111004-3049 FERC PDF (Unofficial) 10/04/2011
137 FERC' 61,006
UNITED STATES OF AMRICA
FEDERA ENERGY REGULATORY COMMISSION
Before Commissioners: Jon Wellinghoff, Chairman;
Philp D. Moeller, John R. Norrs,
and Cheryl A. Lafleur.
Ceda Creek Wind, LLC Docket No. ELII-59-000
NOTICE OF INTENT NOT TO ACT AN DECLARTORY ORDER
(Issued October 4,201 I)
i. In this order, we give notice that we decline to initiate an enforcement action
pursuant to section 210(h) of the Public Utility Regulatory Policies Act of 1978
(PURPA).1 However, as discussed below, we conclude that the June 8, 2011 decision of
the Idaho Public Utilities Commission (Idao PUC),2 which rejected five Fir Energy
Sales Agreements (Agreements) between Cedar Creek Wind, LLC (Cedar Creek) and
PacifiCorp3 d//a Rocky Mountain Power (Rocky Mountain Power), is inconsistent with
the requirements of PURP A and our regulations implementing PUR A, 4 as discussed
fuer below.
Background
2. The Idao PUC findings at issue in this proceeding developed from a November 5,
2010 fiing with the Idaho PUC by a number of Idaho utilties, including Rocky
1 16 U.S.C. § 824a-3(h) (2006).
2 In the Matter of the Application ofPacifCorp dba Rocky Mountain Power for a
Determination Regarding a Firm Energy Sales Agreement Between Rocky Mountain
Power and Cedar Creek Wind, LLC, Order No. 32260, Case No. PAC-E-II-0l et aI.,
(Idaho PUC June 8, 201 I) (June 8 Order).
3 June 8 Order at 10.
4 16 U.S.C. § 824a-3 (2006); 18 C.F.R. Par 292 (2011).
EXHIBIT 2 PAGE 1 OF 19
20111004-3049 FERC PDF (Unofficial) 10/04/2011
Docket No. ELI 1-59-000 - 2-
Mountain Power,s requestig the Idaho PUC to intiate an investigation into various
avoided cost issues.6 The Idaho utilties also urged the Idaho PUC to lower the published
avoided cost rate eligibility cap for a qualified facility (QF) from 10 aMW7 to 100 kW
effective immediately.s
3. On December 3,2010, the Idao PUC issued Order No. 32131, finding probable
cause to investigate the Idaho utilities' assertions, but did not immediately reduce the
eligibility cap to 100 kW.9 This order, however, gave notice that the Idao PUC would
make a decision on the eligibility cap after its investigation and that its decision would be
effective, retroactively, on December 14,2010.10
4. On Februar 7, 2011, the Idaho PUC issued Order No. 32176, holding that the
eligibilty cap for wind and solar QFs to receive published avoided cost rates should be
temporaly reduced from 10 aM to 100 kW while the Idaho PUC fuer investigates
the issue.11 The Idaho PUC noted that while published avoided cost rates are not
available to projects exceeding the eligibility cap, such projects may establish an avoided
cost rate by using the Integrated Resource Plan (IRP) methodology.12
S The fiing parties included Idaho Power Company (Idaho Power), Avista
Corporation, and Rocky Mountain Power. June 8 Order at 2.
6 Cedar Creek Petition at 4; June 8 Order at 2.
7 "Average megawatts" is a concept used by the Idaho PUC to distinguish between
a project's nameplate capacity and its actual monthly output. To satisfy the 10 aMW
limitation, a QF must "demonstrate that under normal or average design conditions the
project will generate at no more than 10 aMW in any given month," and the maximum
monthly generation eligible for the published rates is capped "at the total number of hours
in the month multiplied by 10 MW." Order No. 29632, Case No. IPC-E-04-8 et aI., at 14
(Idaho PUC Nov. 22, 2004).
S Cedar Creek Petition at 4; June 8 Order at 2.
9 Cedar Creek Petition at 5; June 8 Order at 3.
10 Cedar Creek Petition at 5; June 8 Order at 3.
11 Order No. 32176 was affrmed on reconsideration by the Idaho PUC in Order
No. 32212, issued March 28,2011.
12 June 8 Order at 3.
EXHIBIT 2 PAGE 2 OF 19
20111004-3049 FERC PDF (Unofficial) 10/04/2011
Docket No. ELII-59-000 - 3 -
5. Finally, on June 8, 2011, the Idao PUC issued Order No. 32260, assessing
whether it should accept the Agreements submitted to it by Rocky Mountain Power on
Janua 10,2011. Idao PUC rejected the Agreements because they did not conform
with the eligibilty ca~ changes implemented in Order No. 32176, reducing the cap from
10 aMW to 100 kW! In makng this finding, the Idao PUC adopted a "bright line rule:
a Fir Energy Sales AgreementIower Puchase Agreement must be executed, i.e.,
signed by both paries to the agreement, prior to the effective date of the change in
eligibility criteria.,,14 The Idaho PUC explained that the Agreements were for projects in
excess of the 100 kW eligibilty cap and in order to be eligible for published avoided cost
rates, the Agreements must be in effect before the date of the eligibility cap change, or,
December 14, 2010. The Idaho PUC, notig its new rule, found that the Agreements
were not signed by both Cedar Creek and Rocky Mountain Power until December 22,
2010, well after December 14,2010. Thus, based on these fidings, the Idao PUC
rejected the Agreements.ls
Cedar Creek Petition
6. On August 5,2011, Cedar Creekl6 filed a Petition for Enforcement (petition)
askig the Commssion to initiate an enforcement action against the Idaho PUC to
address changes to Idaho PUC's published avoided cost rates and their implementation of
PUR A as a result of orders issued by the Idaho PUC "insofar as the Idaho PUC Orders
impermssibly held that a QF's right under PURPA to charge at the then-existing avoided
cost rates exists only upon the execution of a contract by both partes.,,17
7. In the alternative, if the Commission refuses to initiate an enforcement action,
Cedar Creek requests the Commission to make the following findings:
. The Commssion's PURA regulations expressly permit a QF to
sell energy and capacity pursuant to a legally enforceable
13 Cedar Creek Petition at 6; June 8 Order at 10.
14 June 8 Order at 10.
IS Order No. 32260 was affied on reconsideration by the Idaho PUC in Order
No. 32302, issued July 27,2011.
16 Cedar Creek is a developer of five wind fars in Bingham County, Idaho.
17 Cedar Creek Petition at 2.
EXHBIT 2 PAGE 3 OF 19
20111004-3049 FERC PDF (Unofficial) 10/04/2011
Docket No. ELII-59-000 - 4-
obligation, and to sell at rates established as of the date that the
obligation is incured;
. A state commssion taked with implementing the Commission's
PUR A regulations may not require that a QF have a fully
executed contract to establish a legally enforceable obligation
under the Commission's PUR A regulations; and
. A state commission to which the task of implementing the
Commission's regulations has been delegated may not hold the date
upon which a legally enforceable obligation arose, for the purose
of establishing a QF's entitlement to an avoided-cost rate, to be the
date on which the utilty signed the contract with the QF. Rather,
the state commission must determine the date upon which the
legally enforceable obligation first arose. is
8. Cedar Creek states that the Idaho PUC mistakenly rejected the Agreements on the
basis that there was no legally enforceable obligation under PUR A until the time the
contract was fully executed on December 22,2010, notwthstanding the fact that Cedar
Creek had executed the Agreements on December 13,2010. Cedar Creek assert that the
Idaho PUC rule, issued in the June 8 Order, stating that a legally enforceable obligation
was created only at the time the contract was fully executed, i.e., signed by the QF and
electrc utility, is inconsistent with the Commission's PURA reguations. Thus, Cedar
Creek states that the Idaho PUC incorrectly concluded that a legally enforceable
obligation under PURA was not incured until December 22,2010, renderig Cedar
Creek ineligible for published avoided cost rates.
9. Cedar Creek argues that, with respect to the Commission's PURA regulations,
the Idaho PUC is attempting to substitute a fully-executed contract requirement for that
of a legally enforceable obligation.19 Ceda Creek also argues that this substitution is
prohibited by the Commission's regulations and its interpretation of those regulations.
10. Cedar Creek states that the Commssion has previously made clear that a legally
enforceable obligation and an executed contrct are neither synonymous nor
interchangeable, and while all contracts constitute legally enforceable obligations, not all
is Id. at 15.
19Id. at 10.
EXHIBIT 2 PAGE 4 OF 19
20111004-3049 FERC PDF (Unofficial) 10/04/2011
Docket No. ELII-59-000 - 5 -
legally enforceable obligations arse in the form of fully executed contracts.
20
Furermore, Cedar Creek argues that the Commission has long held that: a legally
enforceable obligation can, and does, exist in the absence of a contract; a QF may
negotiate a contact at an electrc utility's avoided cost rate and obligate itselfto offer
power to that electrc utility before the parties sign a contract; and a legally enforceable
obligation is available in the Commission's PURA regulations to prevent an electrc
utilty from circumventing such regulations merely by refusing to sign a contrct. 21 Thus,
Cedar Creek acknowledges that while a state regulatory authority has the authority to
determine the date on which a legally enforceable obligation is incured, a state
regulatory authority may not condition a legally enforceable obligation on the execution
of a contract document. To do so, Cedar Creek argues, would nullfy the authority
delegated to them.
11. Lastly, Cedar Creek argues that the Idaho PUC's "bright line rule" not only is
contrary to the meang and intent of the Commission's regulations in 18 C.F.R.
§ 292.304(d), but also means that no matter how extreme the bad faith tactics of the
utilty, the QF cannot create a legally enforceable obligation and that an electrc utility
may prevent the creation of a legally enforceable obligation simply by refusing to sign a
contract. 22
12. Cedar Creek presents several facts to support its arguent that a legally
enforceable obligation was incured prior to December 14,2010. Cedar Creek states that
the Agreements' terms and conditions, including the stated rates, had been fully
negotiated and agreed upon in the six months prior to the December 13,2010 eligibilty
cap deadline. Cedar Creek also provides a detailed time line of events leading up to and
including December 2010 by way of the Zentz affidavit.23 Furermore, Cedar Creek
states that the financing for its projects, substantial deposits for contracts associated with
20Id. at i 0 (citing Midwest Renewable Energy Projects, LLC, 116 FERC ii 61,017,
at P 15 (2006); JD Wind 1, LLC, 129 FERC' 61,148, at P 25 (2009), order denying
"requests for rehearing, reconsideration or clarifcation," 130 FERC' 61,127 (2010))
(JD Wind 1).
21 Ceda Creek Petition at 10-11.
22 Cedar Creek Petition at i 1 ("To conclude otherwse and allow the (electrc)
utility's inaction to derine whether a legally enforceable obligation existed would allow a
QF's rights to be held hostage to a signatue. . . .").
23 Cedar Creek Petition, Exhibit 4, Affdavit of Dana Zentz.
EXHIBIT 2 PAGE S OF 19
20111004-3049 FERC PDF (Unofficial) 10/04/2011
Docket No. ELI 1-59-000 - 6-
the projects, as well as fort year leases for the five project sites, are at risk due to the
uncertainty of the sitution.24
13. Cedar Creek makes two ancilar arguents in addition to those directly
addressing the Commission's PUR A regulations. First, Cedar Creek asserts that the
Idaho PUC failed to provide notice to those entities affected by the lowering of the
eligibility cap because the new eligibilty cap was not anounced until six months after
the effective date of the lowered eligibility cap was established.25 Second, Cedar Creek
asserts that the Idaho PUC failed to follow its own precedent in that it did not grandfather
any agreements made before the eligibilty cap reduction.26 Cedar Creek states that the
Idaho PUC applied its grandfathering criteria as recently as November 2010, just over a
month before the new eligibility cap went into effect.
Notice of Filng and Responsive Pleadings
14. Notice of Cedar Creek's fiing was published in the Federal Register, 76 Fed. Reg.
50,212 (201 i), with interventions and protests due on or before August 26,2011.
15. On August 26,2011, the Idaho PUC filed a notice of intervention and protest. The
Idaho PUC argues that Cedar Creek's Petition fails to make out a case for enforcement
under PUR A Section 21 O(h), and that even if the Commission were to accept Ceda
Creek's mischaracterization of the proceedings, this case properly should be decided by
the Idaho Supreme Cour on review of the Idaho PUC's orders, rather than the
Commission in the context of a Section 2 i O(h) petition. Idaho PUC argues that by failng
to preserve its right to seek review of the Idaho PUC's adjustment of the eligibility cap
for published avoided cost rates in the Idaho Supreme Cour, Ceda Creek canot now
resurect its claim through a Commission action.
16. The Idaho PUC argues that its finding in the June 8 Order was properly within its
authority. The Idaho PUC cites to the Commssion's finding in West Penn27 to support
its arguent that the states have the authority to determine the parameters of power
purchase agreements, including the date when a legally enforceable obligation is
24 Cedar Creek Petition at 13.
25 Id. at 7.
26Id. at 7.
27 West Penn Power Co., 71 FERC' 61,153 (1995) (West Penn).
EXHIBIT 2 PAGE 6 OF 19
20111004-3049 FERC PDF (Unofficial) 10/04/2011
Docket No. EL11-59-000 -7 -
incured.28 The Idao PUC also argues that for it to now approve the Agreements, and
allow Cedar Creek to ignore the deadline associated with the eligibility cap, would not be
in the public interest because, in effect, Ceda Creek would enjoy rates in excess of the
electrc utilty's avoided cost.
17. The Idaho PUC fuer argues that Cedar Creek canot rely on the Commission's
findings in JD Wind 1.29 Idao PUC asserts that this is not a question of whether a
legally enforceable obligation was created. Idaho PUC states that given the existence of
the Agreements, there is no need for a determnation of when or whether a legally
enforceable obligation arses. Idaho PUC points out that there are indeed two methods
under Idaho law that a QF may use to preserve an avoided cost rate: "(1) enterig into a
signed contract with the utilty; or (2) filing a meritorious complaint with the Idao PUC
alleging that a 'legally enforceable obligation' has arisen and but for the conduct of the
utilty, there would be a contract.,,30 According to the Idaho PUC, the Agreements
themselves are evidence of the legally enforceable obligation. The Idaho PUC states that
the terms of the Agreements specify that the effective date of the Agreements would be
after execution by both paries and approval by the Idaho PUC. Idaho PUC notes that it
did not approve the Agreements. Moreover, Idaho PUC states that Cedar Creek cannot
now argue against the terms of the Agreements simply because those terms do not
provide it with a favorable outcome.
18. On August 26,2011, Idaho Power fied a timely motion to intervene and protest.
Idao Power supports Idao PUC's implementation ofPURA and the Commission's
PUR A regulations, including the June 8 Order. Most significantly, Idaho Power argues
28 The Idaho PUC quotes the followig excerpt from West Penn:
It is up to the States, not this Commission, to determine the specific
parameters of individual QF power purchase agreements, including the date
at which a legally enforceable obligation is incured under State law.
Similarly, whether the paricular facts applicable to an individual QF
necessitate modifications of other terms and conditions of the QF's contract
with the purchasing utility is a matter for the States to determine. This
Commission does not intend to adjudicate the specific provisions of
individual QF contracts.
Idaho PUC Answer at 20 (citing West Penn, 71 FERC' 61,153 at 61,495).
29 JD Wind 1, 129 FERC' 61,148.
30 Idaho PUC Answer at 7.
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that the Agreements are exactly the types of projects that the Idao PUC was concerned
with as they were not reflective of the utility's avoided costs, and thus causing the Idaho
PUC to lower the eligibilty cap to 100 kW. Therefore, in exercising the authority
delegated to it by PUR A and the Commssion, Idao Power maintains that the Idaho
PUC properly rejected the Agreements.
19. Idaho Power fuer states that Cedar Creek's reliance on a legally enforceable
obligation arguent is misplaced as the Idaho PUC's decision in rejectig the
Agreements was related to setting policy pertaining to the availabilty of the published
avoided cost rate. Idaho Power argues that the Idaho PUC did nothing to obfuscate or
eliminate an electrc utilty's obligation to purchase energy from a QF. Instead, Idaho
Power states that the Idaho PUC simply set avoided cost pricing policy which comports
with PURA and this Commission's regulations.
20. On August 26, 2011, PacifiCorp31 filed a timely motion to intervene and comment.
PacifiCorp supports the Idaho PUC's June 8 Order and opposes any effort by Cedar
Creek to enforce the Agreements. PacifiCorp first argues that the Idaho PUC's actions
are not subject to Commission review because the act of lowerig the eligibility cap was
an application of PURP A, not a matter of implementation. Second, PacifiCorp asserts
that even if the Commission does have jursdiction, that the states have the authority to
determine the specific parameters associated with power purchase agreements. Last,
PacifiCorp argues that Cedar Creek has mischarcterized Idao contract law by assertng
that a fully executed contract is the only method by which a legally enforceable
obligation may incur. PacifiCorp argues that there are in fact two paths by which a QF
may establish a legally enforceable obligation under PURPA in Idaho: (1) when the
Idaho PUC approves a power purchase agreement that has been executed by the electrc
utilty and the QF; or (2) when the QF fies a complaint alleging that but for the utility's
inappropriate refusal to execute an agreement the QF would have obtained a power
purchase agreement.
21. On August 26, 2011, Northwest and Intermountain Power Producers Coalition
(NIPPC) filed a timely motion to intervene and comment in support of Ceda Creek's
Petition. NIPC argues that the Idaho PUC's "bright line rule" vests all power to decide
when a legally enforceable obligation is created in the hands of the electrc utilty,
thereby abdicating the Idaho PUC's responsibilty to implement the Commission's
PUR A regulations. In essence, NIPPC argues the Idao PUC has repealed the must-buy
provision of PUR A and states that should an electrc utility choose not to sign a
31 PacifiCorp is referred to as Rocky Mountain Power thoughout this order and in
the relevant Idao proceedings.
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contract, under the Idaho bright-line rule, there will be no legally enforceable obligation
and hence no must-buy requirement.
22. On September 7, 2011, Cedar Creek filed a motion for leave to answer and answer
to the comments of Idaho PUC, Idao Power, and PacifiCorp. Cedar Creek disagrees
with PacifiCorp's argument that the Commssion does not have jursdiction because
Idaho PUC's actions constituted an application ofPURA, rather than the
implementation of PURP A. Cedar Creek maintains that the actions by the Idao PUC
constitute an implementation of PUR A. Cedar Creek also asserts that the Idaho PUC
misstates the law because, in Cedar Creek's view, a contract is not a necessar
precondition to a legally enforceable obligation.
23. On September 9,2011, Idaho PUC filed a motion for leave to answer and answer
to NIPPC's comments. Idaho PUC asserts that NIPPC failed to disclose certain facts in
its comment, including the fact that NIPPC was not a part to the underlying Idaho PUC
orders and as a result does not have standing to challenge the Idaho PUC orders. Idaho
PUC fuer asserts that NIPPC failed to recognize the two methods, listed in the Idaho
PUC answer, available to a QF to preserve an avoided cost rate, and states that a legally
enforceable obligation may be incured in the absence of a contract.
24. On September 14,2011, Exelon filed a motion for leave to answer and answer to
Idaho PUC's September 9,2011 Answer. Exelon supports Cedar Creek's Petition.
Exelon argues that the Idaho PUC incorrectly found that the trgger for creating a legally
enforceable obligation is the date that the electric utility finally executes a contract
accepting the QF's wrtten commtment, rather than the date that the QF committed to
sell its power to the electrc utility under PURP A. Exelon argues that the Commission
addressed this issue in Order No. 69, where, according to Exelon, the Commission
recognized that if a signed contract were a condition precedent to a legally enforceable
obligation under PUR A, an electrc utility could thwar the statute's purose simply by
refusing to sign. Thus, Exelon asserts, under Order No. 69 the action of an electrc utilty
in agreeing or not agreeing to execute a contract canot be the trgger creating a legally
enforceable obligation.
Discussion
Procedural Matters
25. Pusuat to Rule 214 of the Commssion's Rules of Practice and Procedure,
18 C.F.R. § 385.214 (2011), timely, unopposed motion to intervene serve to make the
entities that filed them paries to this proceeding. Rule 213(a)(2) of the Commssion's
Rules of Practice and Procedure, 18 C.F.R. § 385.213(a)(2) (2011), prohibits an answer
to a protest or answer unless otherwse ordered by the decisional authority. We will
accept Cedar Creek's, Idaho PUC's, and Exelon's answer because they have provided
information that assisted us in our decision-makg process.
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Commission Determination
26. Cedar Creek asks the Commission to institute an enforcement action against the
Idaho PUC to enforce the Commission's PURA regulations. Specifically, Cedar Creek
petitions the Commission to enforce section 292.304(d)(2) of our regulations against the
Idaho PUC as it relates to the Idaho PUC finding limting the creation of a legally
enforceable obligation only to QFs that have a "Fir Energy Sales Agreement/ower
Purchase Agreement (that is) executed, i.e., signed by both paries to the agreement, prior
to the effective date of the change in eligibility criteria,,,32 as promulgated in its June 8
Order.33 Alternatively, if the Commission does not institute an enforcement action,
Cedar Creek asks the Commssion to make the following declarations: (1) the
Commission's PURA regulations permit QFs to sell energy pursuant to a legally
enforceable obligation; (2) a state commission may not limit legally enforceable
obligations to fuly executed contracts; and (3) a state commission cannot determine the
date that a legally enforceable obligation arises based solely on the date that the electrc
utilty signs a contract with the QF.34
27. PURA directs the Commission to prescribe "such rules as it determines
necessary to encourage cogeneration and small power production. ,,35 PUR A, in tu,
directs the states to "implement" the rules adopted by the Commission.36 A "state
commission may comply with the statutory requirements by issuing regulations, by
resolvig disputes on a case-by-case basis, or by takng other actions reasonably designed
32 June 8 Order at 10.
33 Cedar Creek Petition at 14.
34Id. at 15.
35 16 U.S.C. §§ 824a-3(a)-(b) (2006).
36 16 U.S.C. § 824a-3(f) (2006); accord FERC v. Mississippi, 456 U.S. 742, 751
(1982); Independent Energy Producers Association v. California Public Utilities
Commission, 36 F.3d 848,856 (9th Cir. 1994); Cogeneration Coalition of America, Inc.,
61 FERC' 6l,252, at 61,925-26 (1992); Small Power Production and Cogeneration
Facilities; Regulations Implementing Section 210 of the Public Utilty Regulatory
Policies Act of 1978, Order No. 69, FERC Stats. & Regs. , 30,128, at 30,864 (1980),
order on reh'g, Order No. 69-A, FERC Stats. & Regs. , 30,160 (1980), affd in part and
vacated in part, American Electric Power Service Corporation v. FERC, 675 F.2d 1226
(D.C. Cir. 1982), rev'd in part, American Paper Institute, Inc. v. American Electric
Power Service Corporation, 461 U.S. 402 (1983).
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to give effect to (the Commission's) rules.,,37 As a result, a state may take action under
PUR A only to the extent that that action is in accordace with the Commssion's rules.
28. The Commission has enforcement authority under section 21O(h)(2) ofPURA
when a state commssion's (or a non-regulated electrc utilty's) implementation of
PURA is "inconsistent or contrar to the Commission's regulations.,,38 Section
2 i 0(h)(2)(B) of PUR A39 permts any qualifying small power producer, among others, to
petition the Commission to act under section 21 0(h)(2)(A) of PUR A 40 to enforce the
requirement that a state commission implement the Commssion's regulations. The
Commssion's enforcement authority under section 21O(h)(2)(A) ofPURA is
discretionar. As the Commission pointed out in its 1983 Policy Statement, "the
Commssion is not required to undertake enforcement action.,,41 If the Commssion does
not underte an enforcement action within 60 days of the fiing of a petition, under
section 21O(h)(2)(A) of PUR A, the petitioner then may brig its own enforcement
action directly against the state regulatory authority or non-regulated electrc utility in the
appropriate United States distrct cour.
42
29. Here, we give notice that we do not intend to go to cour to enforce PURP A on
behalf of Cedar Creek; Cedar Creek thus may bring its own enforcement action against
the Idaho PUC in the appropriate cour.
30. Notwthstading our decision not to go to court to enforce PUR A on behalf of
Cedar Creek, we fid that the Idaho PUC decision denying Cedar Creek a legally
enforceable obligation, specifically the requirement in the June 8 Order that a Fir
Energy Sales Agreement/ower Purchase Agreement must be executed by both parties to
37 FERC v. Mississippi, 456 U.S. 742, 751 (1982); see also Policy Statement
Regarding the Commission's Enforcement Role Under Section 210 of the Public Utilities
Act of 1978,23 FERC' 61,304, at 61,643 (1983) (1983 Policy Statement).
38 1983 Policy Statement, 23 FERC' 61,304 at 61,644.
39 16 U.S.C. § 824a-3(h)(2)(B) (2006).
40 16 U.S.C. § 824a-3(h)(2)(A).
41 1983 Policy Statement, 23 FERC' 61,304 at 61,645.
42 16 U.S.C. § 824a-3(h)(2)(B) (2006). The Commission may intervene in such a
distrct cour proceeding as a matter of right. Id.
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the agreement before a legally enforceable obligation arises, is inconsistent with PUR A
and our regulations implementig PURA, particularly section 292.304(d)(2).43
31. When Congress enacted PURA in 1978, there was very little non-utilty
generation; virally all new generating capacity was provided by traditional electrc
utilties. In fact, one of the pricipal reasons Congress adopted section 2 i 0 of PUR A
was because electrc utilities had refued to purchase power from non-utilty producers.44
Congress thus required the Commission to prescribe rules that the Commission
"determines necessar to encourage cogeneration and small power production.,,45 In
section 21O( a) of PUR A, 46 Congress also required electrc utilties to purchase electrc
energy from QFs, which the Commssion, in section 292.303 of its regulations interpreted
as imposing on electrc utilities an obligation to purchase all electrc energy and capacity
made available from QFs.47
32. The Commission's regulations under PUR A also include a requirement that QFs
have the option to sell not only as available but pursuant to legally enforceable
obligations over specified terms.48 Section 292.304(d)49 provides:
(d) Purchases Has available" or pursuant to a legally enforceable
obligation. Each qualifyg facility shall have the option either:
(1) To provide energy as the qualifying facility determnes such energy to
be available for such purchases, in which case the rates for such purchases
shall be based on the purchasing utility's avoided costs calculated at the
time of delivery; or
(2) To provide energy or capacity pursuant to a legally enforceable
obligation for the delivery of energy or capacity over a specified term, in
43 18 C.F.R. § 292.304(d)(2) (2011).
44 FERC v. Mississippi, 456 U.S. at 750.
45 16 U.S.C. § 824a-3(a) (2006).
46Id.
47 18 C.F.R. § 292.303 (2011).
48 Id. § 292.304( d)(2).
49 Id. § 292.304( d).
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which case the rates for such purchases shall, at the option of the qualifyig
facility exercised prior to the beginnng of the specified term, be based on
either:
(i) The avoided costs calculated at the time of delivery; or
(ii) The avoided costs calculated at the time the obligation is incured.
Section 292.304( d) and the requirement that a QF can sell and a utility must purchase
pursuant to a legally enforceable obligation were specifically adopted to prevent utilities
from circumventing the requirement of PUR A that utilties purchase energy and
capacity from QFs. The Commssion explained:
Paragraph (d)(2) permts a qualifying facilty to enter into a contract or
other legally enforceable obligation to provide energy or capacity over a
specified term. Use of the term "legally enforceable obligation" is intended
to prevent a utility from circumventing the requirement that provides
capacity credit for an eligible facilty merely by refusing to enter into a
contract with a qualifying facility.(50)
Thus, under our regulations, a QF has the option to commit itself to sell all or par of its
electrc output to an electrc utility. While this may be done though a contract, if the
electrc utilty refuses to sign a contract, the QF may seek state regulatory authority
assistance to enforce the PUR A-imposed obligation on the electrc utility to purchase
from the QF, and a non-contractual, but stil legally enforceable, obligation wil be
created pursuant to the state's implementation ofPURA.51 Accordingly, a QF, by
committg itself to sell to an electrc utility, also commits the electrc utilty to buy from
50 Order No. 69, FERC Stats. & Regs. ir 30,128 at 30,880; accord id (noting "the
need for qualifying facilties to be able to enter into contractual commitments" and
agreeing to "the need for certinty with regard to retu on investment in new
technologies").
51 New PURP A Section 210(m) Regulations Applicable to Small Power Production
and Cogeneration Facilties, Order No. 688, FERC Stats. & Regs. , 31,233, at P 212
(2006), order on reh 'g, Order No. 688-A, FERC Stats. & Regs. ir 31,250, at P 136-137
(2007), aff'd sub nom. American Forest and Paper Association v. FERC, 550 F.3d
1179 (D.C. Cir. 2008); see also Midwest Renewable Energy Projects, LLC, 116 FERC
, 61,017 (2006).
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the QF; these commitments result either in contracts or in non-contractual, but binding,
legally enforceable obligations.
52
33. Idaho PUC, joined by other protesters, supports the findings in the June 8 Order,
arguing that the Agreements between Rocky Mountain Power and Ceda Creek are not
eligible for published avoided cost rates because the contracts were not executed, or
signed, on or before December 13,2010, the cutoff date for the use of published avoided
cost rates with the correspondig 10 aM limit. In the June 8 Order, Idaho PUC relied
on an Idao Supreme Cour opinion,
53 which, in tu, cited to a Commssion order, West
Penn,54 as supporting its decision. The June 8 Order provides that "(Idaho PUC) does not
consider a utilty and its ratepayers obligated until both paries have completed their final
reviews and signed the agreement.,,55
34. As an initial matter, we disagree with respondent's use of the Commission's
determnation in West Penn. In West Penn, petitioner West Penn, an electrc utility
servng retail customers, entered into a power purchase agreement with the owner of a
QF for the sale of power at a specified rate. West Penn sought a declaratory order from
the Commission that would abrogate the power purchase agreement. The Commssion
denied the petition, refusing to distub the power purchase agreement because, prior to
the petition before the Commission, the agreement was subject to a course oflitigation
that culmiated with a denial of certiorari from the United States Supreme Cour.
35. Idaho PUC and other protesters56 interpret West Penn's discussion to give broad
discretion to the states as to what constitutes a legally enforceable obligation and when
such obligation is incured. We disagree. While West Penn stands for the notion that the
Commssion gives deference to the states to determe the date on which a legally
enforceable obligation is incured,
57 such deference is subject to the terms of the
Commssion's regulations. West Penn does not, as Idao PUC argues, give states the
52 JD Wind 1, 129 FERC' 61,148 at P 25.
53 Rosebud Enterprises, Inc. v. Idaho Pub. Uti!. Comm., 917 P.2d 766, 780-81
(Idaho 1996) (citing West Penn Power Co., 71 FERC ~ 61,153 (1995) (West Penn)).
54 West Penn, 71 FERC' 61,153.
55 June 8 Order at 9.
56 June 8 Order at 9; Idaho PUC Answer at 20; Idaho Power Protest at 13-14;
PacifiCorp Comment at 15.
57 See West Penn, 71 FERC' 61,153 at 61,495.
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unlimited discretion to limit the ways a legally enforceable obligation is incured.
58
Indeed, Commission regulations and Order No. 69 expressly use the terms "contract" and
"legally enforceable obligation" in the disjunctive to demonstrate that a legally
enforceable obligation includes, but is not limited to, a contract. Additionally, Order
No. 69 specifically addressed the problem of an electrc utility avoiding PUR A
requirements simply by refusing to enter into a contract with a QF.59 The June 8 Order, if
left effective, would exacerbate this problem because the June 8 Order makes a fully-
executed contract a condition precedent to the creation of a legally enforceable
obligation. Therefore, when a state limits the methods through which a legally
enforceable obligation may be created to only a fully-executed contract, the state's
limitation is inconsistent with PUR A, and our regulations implementing PUR A.6o
36. Next, Idaho PUC argues thatJD Wind 1 does not support Cedar Creek's position
that the Agreements resulted in a legally enforceable obligation as of December 13,2010,
or before. Idaho PUC argues that JD Wind 1 does not apply because a contract between
Cedar Creek and Rocky Mountain Power was formed on December 22, 2010, the date
that Rocky Mountain Power signed the Agreements.61 We disagree with Idao PUC and
find our discussion ofPURPA in JD Wind 1 paricularly applicable, that the phrase
legally enforceable obligation is broader than simply a contrct between an electrc utilty
and a QF and that the phrase is used to prevent an electrc utility from avoidig its
PURA obligations by refusing to sign a contract, or as here, from delaying the signing
of a contract, so that a later and lower avoided cost is applicable. We furter find that
Idaho PUC's June 8 Order ignores the fact that a legally enforceable obligation may be
incured before the formal memorialization of a contract to wrting.
62
58 See also Exelon Answer at 11-13.
59 Order No. 69, FERC Stats. & Regs. , 30,128 at 30,880; see also NIPPC
Comment at 10 ("Ifleft intact, the Idao PUC's new (rule) means that no matter hòw
extreme the bad faith tactics of the utilty, the QF canot create a legally enforceablebl" ")o igation.... .
60 Order No. 69, FERC Stats. & Regs. , 30,128 at 30,880.
61 Idaho PUC Answer at 17-18.
62 Cours have recognized that negotiations regardig terms that paries to the
negotiations intend to become a fialized or written contract, may in some circumstaces
result in legally enforceable obligations on those paries notwthtadig the absence of a
wrting. See generally Burbach Broadcasting Company of Delaware v. Elkins Radio
Corp., 278 F.3d 401,407-09 (4th Cir. 2002); Adjustrite Systems, Inc. v. GAB Business
(contiued.. .)
EXHIBIT 2 PAGE IS OF 19
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Docket No. ELI 1-59~000 - 16-
37. Like the Public Utility Commssion of Texas (Texas PUC) in JD Wind 1, the
Idaho PUC has imposed requirements on QFs seekig to enter mto agreements to sell
electrcity that are in addition to those contained in the Commssion's regulations. .. In JD
Wind 1, the Texas PUC refused to fid that a legally enforceable obligation existed
because, in its view, the QF was unable to provide "fi" power. The Commssion
disagreed with the Texas PUC and explained that the Commission's PURA regulations
do not contain any reference to "fir" power, and that Texas PUC's reliance on certain
language in the regulatory text was incorrect. Similarly, Idaho PUC requires that a
legally enforceable obligation can result from only a fully-executed contract. Like the
requirement that a QF must provide "firm" power, the requirement of a fully-executed
contract is absent from the Commission's regulations. We accordingly find that the
Idaho PUC's requirement that an executed contract was necessary to create a legally
enforceable obligation in these circumstances is inconsistent with PURP A and the
Commssion's regulations implementing PURA.
38. Whether the conduct of Cedar Creek and Rocky Mountain Power constituted a
legally enforceable obligation subject to the Commission's PURA regulations is not
before us. We note, however, that over the course of2010, Cedar Creek and Rocky
Mountain Power negotiated R1d drafted the Agreements through which Cedar Creek
sought to sell electrcity generated by its QFs to Rocky Mountain Power. Ceda Creek
first entered into negotiations with Rocky Mountain Power regarding two agreements for
wind projects in January 2010.63 Afer a three-month period, in April 2010, Rocky
Mountain Power provided Cedar Creek with avoided-cost pricing calculated using an IR
method. Cedar Creek found the avoided-cost pricing calculated via that method to be
below market prices for other wid generated electrcity purchased by Rocky Mountain
Power.64 Cedar Creek did not pursue these two contracts, aid instead, in May 2010, it
informed Rocky Mountain Power that it wished to negotiate five separate agreements that
met Idaho PUC's 10 aMW theshold limit. 65 Over the next six months, negotiations and
drafting continued with Cedar Creek providing information as requested by Rocky.
Mountain Power.66 On November 29,2010, Rocky Mountain Power provided Cedar
Services, Inc., 145 F.3d 543,547-50 (2d Cir. 1998); Miler Constrction Co. v. Stresstek,
697 P.2d 1201, 1202-04 (Idaho 1985).
63 Zentz Affdavit at P 5.
64Id. at P 10-11.
65Id. P 12.
66Id. P 13-15.
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Creek with a draft agreement containing a final round of revisions. 67 Cedar Creek
retued the drft, with anotations, the next day.68 Between November 30 and
December 9,201 I, communications between the pares continued; however, Rocky
Mountain Power did not deliver final versions of the Agreements to Cedar Creek until
December 9, citing credit approvals and management reviews.69 Although Rocky
Mountain Power had provided final versions of the five agreements to Cedar Creek,
Rocky Mountain Power's management continued their review.70 Cedar Creek executed
and delivered the Agreements to Rocky Mountain Power on December 13,2011;
notwthstanding having documents signed by Cedar Creek, Rocky Mountain Power
management refused to sign.71 Rocky Mountain Power held the Agreements for over a
week, makg no changes, before they signed them on December 22, 2010.72
39. While we are not ruling on the issue of whether a legally enforceable obligation
was incured, we note that these extensive negotiations between the partes are persuasive
and point to the reasonable conclusion that Cedar Creek did commt itself to sell
electrcity to Rocky Mountain Power.73 Such commitment to sell to an electrc utilty, the
67 Id. P 15.
68 Zentz Affidavit at P 15.
69Id P 16-18.
70Id P 18.
71Id P 19.
72 Id. P 20.
73 The record in
this proceeding also suggests that provisions of section 292.301 (b)
of the Commission's regulations, 18 C.F.R. § 292.301(b), may be applicable to Idao
PUC's decision in the June 8 Order. Section 292.301(b)(1) permts a QF and an electrc
utility to enter into a contract containing agreed-to rates, terms, or conditions that may
differ from those that would otherwise be required by the Commission's reguations
concerning the determination of avoided-eost rates. The Commission reasoned that a
contracted-for-rate would never exceed tre avoided costs and would thus be consistent
with PURA. Order No. 69, FERC Stats. & Regs. , 30,128 at 30,868. Moreover, section
292.301(b)(2) provides that the Commission's avoided cost regulations (and a state's
implementation of those regulations) do not affect the validity of any contract entered
into between a QF and an electrc utilty. Accordingly, the Idaho PUC's rejection of the
contract entered into by Rocky Mountain Power and Cedar Creek, on the ground that the
(continued.. .)
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Commssion has found, "also commits the electrc utility to buy from the QF; these
commitments result either in contracts or in non-contractual, but binding, legally
enforceable obligations.,,74
40. Lastly, we find that the arguents concerning notice and the grandfathering of
agreements are beyond the scope of this order, and accordingly, we take no position as to
their validity. Cedar Creek may pursue such arguents, if it so chooses, in the
appropriate cour.
41. In conclusion, we find that the Idao PUC's June 8 Order, limiting the methods by
which a legally enforceable obligation may be incured to only a fully-executed contract,
is inconsistent with our regulations implementing PUR A.
The Commssion . orders:
(A) Notice is hereby given that the Commission declines to initiate an
enforcement action under section 210(h)(2)(A) ofPURA.
avoided-cost rate contained in the contract is excessive, appears inconsistent with
PURA and the Commission's reguations implementing PURA.
Based on the record, it is highly probable that Ceda Creek and Rocky Mountain
Power are bound by a contract that specifies the use of published avoided cost rates. On
December 9,2010, Rocky Mountain Power sent Cedar Creek the final version of the
Agreements. The Agreements specified the use of published avoided cost rates, not the
IRP methodology. See June 8 Order at 3. On December 13,2010, Cedar Creek executed
the Agreements and retued them to Rocky Mountain Power. On December 22,2010,
Rocky Mountain Power executed the Agreements. In its answer, Idaho PUC states that
"(tJhe Idaho PUC previously found that the Agreements between Cedar Creek and Rocky
Mountain (Power) were executed, and therefore a legally enforceable obligation was
incurred, on December 22,2010." Idaho PUC Answer at 21. Thus, it is likely that these
entities are bound by a contract requirg the use of published avoided cost rates.
74 JD Wind 1, 129 FERC' 61,148 at P 25; see also Exelon Answer at 9; NIPC
Comment at 8.
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Docket No. ELll-59-000 - 19-
(B) Cedar Creek's petition for a declaratory order is hereby granted, as
discussed in the body of this order.
By the Commssion. Commissioner Spitzer is not participating.
(SEAL)
Nathaniel 1. Davis, Sr.,
Deputy Secretar.
EXHIBIT i PAGE 19 OF 19
Offce of the Secreta
Serice Date
July 27,2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPAN FOR A
DETERMINATION REGARING A FIR
ENERGY SALES AGREEMENT BETWEN
IDAHO POWER AN RAINBOW RANCH
WID,LLC
)
) CASE NO. IPC-E-I0-59
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) CASE NO. IPC-E-IO-60
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) ORDER NO. 32300
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IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR A
DETERMNATION REGARING A FIRM
ENERGY SALES AGREEMENT BETWEEN
IDAHO POWER AND RAINBOW WEST WIN,
LLC
On December 16, 2010, Idaho Power Company fied two Applications each
requesting acceptance or rejection of a 20-year Firm Energy Sales Agreement ("Agreements")
between Idaho Power and Rainbow Rach Wind, LLC and Rainbow West Wind, LLC
(collectively ''the Projects"). Both projects are located near Declo, Idaho, and are managed by
American Wind Group, LLC (American Wind). On Febru 24, 20ll, the Commission issued a
consolidated Notice of Application and Notice of Modified Procedure for the two Applications.
Timely comments in response to the Notice of Modified Procedure were fied by the
Commission Staff, the Projects, and the public. On March 24, 2011, Idaho Power fied reply
comments.
On June 8, 20 ll, the Commission issued a consolidated final Order disapproving the
two Agreements. Order No. 32256 at 9. The Commission found that the Agreements "were not
fuly executed (signed by both paries) prior to December 14, 2010" - the date that the
Commssion lowered the eligibilty cap for the published avoided cost rate from 10 MW to 100
kW. Thus, the Agreement contained an essential term that was no longer available to the
Projects. Id
On June 29, 2011, the Projects timely filed ajoint Petition for Reconsideration of the
Commission's final Order. The Projects allege that the Commission's final Order is unawf,
eroneous, and not in conformity with the law. Additionally, they allege that the Order is a
violation of the nilemaking requirements of the Idaho Administrative Procedures Act.
ORDER NO. 32300
EXHIBIT 3 PAGE 1 OF 15
Idaho Power fied an anwer to the Projects' Petition on July 6, 20ll. Idaho Power
maintains tht the Commission's final Order is based on substatial and competent evidence.
Idaho Power argues that the Commission was acting withn its discretion and in the public
interest and, therefore, reconsideration should be denied.
BACKGROUND
A. The Agreements
On December 14, 20l0, Idao Power and the two wind projects entered into their
respective Agreements. Under the terms of the Agreements, each wind project agrees to sell
electrc energy to Idao Power for a 20-year term using the lO aMW non-Ievelized published
avoided cost rates. Applications at 4. The nameplate rating of each project is 23 MW. Under
normal and/or average conditions, each QF wil not exceed LO aMW on a monthly basis. Idao
Power warants that the Agreements comport with the terms and conditions of the various
Commission Orders applicable to PURP A agreements for a wind resource.. Id at ir 6 citing
Order Nos. 30415, 30488, 30738 and 3l025.
Each project has selected December 3l, 20 1 1, as the Scheduled First Energy Date and
December 31, 2012, as the Scheduled Operation Date. Applications at 5. Idaho Power asserts
that various requirements have been placed upon the projects in order for Idaho Power to accept
the project's energy deliveries. Idaho Power states that it will monitor each project's compliance
with initial and ongoing requirements through the term of the Agreement. The paries have
agreed to liquidated damage and security provisions of $45 per kW of nameplate capacity.
Agreements irir 5.3.2, 5.8.1.
Idaho Power asserts that it has advised each project of the project's responsibilty to
work with Idao Power's delivery business unit to ensure that sufcient time and resources will
be available for the delivery unit to construct the interconnection facilties, and transmission
upgraes if required, in time to allow the proj ects to achieve their December 3l, 20 l2, Scheduled
Operation Date. The Applications state that the projects have been advised that delays in the
interconnection or transmission process do not constitute excusable delays and if a project fails
to achieve its Scheduled Operation Date, delay damages wil be assessed. Applications at 7.
The Applications furer maintan that each project has acknowledged and accepted the risk
inherent in proceeding with its Agreement without knowledge of the requirements of
interconnection and possible tranmission upgrades. Id.
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Idaho Power also states tht each project ha been made aware of and accepted the
provisions in the Agreement and Idao Power's approved Schedule 72 regarding non-
compensated curailment or disconnection of the project should certn operating conditions
develop on Idaho Power's system. The Applications note that the paries' intent and
understanding is that "non-compensated curilment would be exercised when the generation
being provided by the Facilty in certn operating conditions exceeds or approaches the
minimum load levels of (Idaho Power's) system such that it may have a detrimental effect upon
(Idao Power's) abilty to manage its thermal, hydro, and other resources in order to meet its
obligation to reliably serve loads on its system." ¡d.
By their own terms, the Agreements will not become effective until the Commission
has approved all of the terms and conditions and declares that all payments made by Idaho Power
to each project for purchases of energy wil be allowed as prudently incured expenses for
ratemaking purses. Agreements' 21.1.
B. The Utilities' Joint Petition
On November 5, 2010, prior to the date that Idaho Power and the Projects entered
into their Agreements, Idaho Power, A vista Corporation, and PacifiCorp dba Rocky Mountain
Power filed a Joint Petition requesting that the Commission initiate an investigation to address
various avoided cost issues related to the Commission's implementation of PURPA. Case No.
GNR-E-lO-04. On December 3, 2010, the Commission issued Order No. 3213l declining a
motion made by the utilties to immediately reduce the published avoided cost rate eligibilty cap
from 10 aMW to 100 kW. Order No. 3213l at 5. However, the Order did notify paries that the
Commission's decision regarding whether to reduce the published avoided cost eligibilty cap
would become effective on December l4, 20l0. ¡d. at 5-6, 9.
Section 210 of PURPA generally requires electric utilties to purchase power
produced by QFs at "avoided cost" rates set by the Commission. "Avoided costs" are those costs
which a public utilty would otherwse incur for electric power, whether tht power was
purchased from another source or generated by the utilty itself." 18 C.F.R. § 292.101(b)(6).
Order No. 32176 at 1. Under PURA regulations issued by the Federal Energy Regulatory
Commission (FERC), the Commission must "publish" avoided cost rates for small QFs with a
design capacity of 100 kW or less. Order No. 32176 at 1. However, the Commission has the
discretion to set eligibilty for the published avoided cost rate at a higher capacity amount -
ORDER NO. 32300 3
EXHIBIT 3 PAGE 3 OF is
commonly referrd to as the "eligibilty cap." l8 C.F.R. § 292.304(c)(1-2). When a QF project
is larger than the Commission-established eligibilty cap the avoided cost rate for the project
must be individually negotiated by the QF and the utilty using the Integrated Resource Plan
(IRP) Methodology. Order No. 32l76.
The purpose of utilzing the IR Methodology for large QF projects is to more
precisely value the energy being delivered. Id at 10. The IRP Methodology recognizes the
individual generation characteristics of each project by assessing when the QF is capable of
delivering its resources against when the utilty is most in need of such resources. The resultat
pricing is reflective of the value ofQF energy to the utilty. Utilization of the IRP Methodology
does not negate the requirement under PURPA that the utilty purchase the QF energy.
Based upon the record in the GNR-E-lO-04 case, the Commission subsequently
found that a "convincing case has been made to temporarly reduce the eligibilty cap for
published avoided cost rates from to aMW to toO kW for wind and solar only while the
Commission fuer investigates" other avoided cost issues. Order No. 32176 at 9 (emphasis
original). On reconsideration, the Commission affirmed its decision to temporarily reduce the
eligibilty cap for published avoided cost rates from to aMW to toO kW. Order No. 322l2.
Thus, the eligibilty cap for the published avoided cost rate for wind and solar QF projects was
set at 100 kW effective December 14, 20to. No par appealed from the Orders in Case No.
GNR-E-to-04.
C. The Prior Final Order in this Case
On June 8, 2011, the Commission issued Order No. 32256 disapproving the
Agreements between Idaho Power and each of the wind projects - Rainbow Rach Wind and
Rainbow West Wind. i The Commission determined that the Agreements were not fully
executed (signed by both paries) prior to December l4, 2010, the date upon which the eligibilty
for published avoided cost rates changed from to aMW to toO kW for wind and solar projects.
Consequently, the Commssion found that the rates contained in the Agreements did not comply
with Order No. 32176 because each of the projects requesting published avoided cost rates are in
i The two projects had previously fied consolidated comments because the relevant facts for each of these projects
are substantially similar. Consequently, the Commission found it reasonable and appropriate to consolidate the
cases and issue a consolidated final Order. Order No. 32256 n. i.
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EXHIBIT 3 PAGE 4 OF 15
excess of LOO kW. Order No. 32256 at 9. The "old" LO aMW published rate is available only to
non-wind and non-solar QFs.
The Projects signed the Agreements on December 13,2010, and Idaho Power signed
on December l4, 2010. The Commission noted that the Agreements contain language regarding
the effective date. The terms of the Agreements unequivocally state that the "Effective Date" of
the Agreements is "The date stated in the opening paragraph of this . . . Agreement representing
the date upon which this (Agreement) was fully executed by both Paries." Agreements'r 1.10
(emphasis added). The opening paragraph is dated "this 14th day of December, 20l0." We
stated that "(tJhe Commission does not consider a utilty and its ratepayers obligated until both
paries have completed their final reviews and signed the agreement." Order No. 32256 at 8.
We found tht "a thorough review is appropriate and necessary prior to signing Agreements that
obligate ratepayers to payments in excess of $200 milion" over the 20-year term of the
Agreements. Id at 7. The Commission established a bright line rule that for a wind or solar QF
larger than 100 kW to be eligible for published avoided cost rates, a Firm Energy Sales
Agreement/ower Purchase Agreement must have been executed, i.e., signed by both paries,
prior to the December 14,2010, effective date of the change in eligibilty criteria. Id at 8. The
Commission additionally found that it was "not in the public interest to allow paries with
contracts executed on or afer December l4, 2010, to avail themselves of an eligibilty cap that is
no longer applicable." Id.
PETITION FOR RECONSIDERATION
On June 29, 2011, the Projects fied a timely joint Petition for Reconsideration.
Idaho Code § 6l-626. The Projects allege that the Commission's Order is uneasonable,
erroneous, and not in conformance with the law. Specifically, the Projects argue that the
Agreements became legally binding between the paries on December l4, 2010; that these
projects would have been eligible for "gradfathering" under traditional criteria; that application
of a bright line rule may constitute an improper governental interference with contractual
rights; and tht a bright line rule generally results in manifest injustice. Alternatively, the
Projects purort to adopt the "more general objections" asserted by "other paries in companion
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cases."i Reconsideration at 7. The Projects request reconsideration in the form of wrtten briefs
or comments.
Idaho Power fied an answer to the Projects' Petition for Reconsideration. Idao
Power states that the Commission's Order is based on substatial and competent evidence.
Idaho Power argues that the Commission, "in its role as the regulatory authority for all investor-
owned, public utilties in the state of Idaho, has an independent obligation and duty to assure that
all contracts entered into by the public utilties it regulates are ultimately in the public interest."
Answer at 4. Idao Power fuher maintains that the Commission regularly pursued its authority
and was acting within its discretion in choosing to disapprove the Agreements. Id at 2.
Consequently, Idaho Power asks that the Projects' Petition for Reconsideration be denied.
ISSUES ON RECONSIDERATION
A. Legal Standards
Reconsideration provides an opportnity for a pary to bring to the Commission's
attention any question previously determined and thereby affords the Commission an opportity
to rectify any mistae or omission. Washington Water Power Co. v. Kootenai Environmental
Allance, 99 Idaho 875, 879, 591 P.2d l22, l26 (l979). The Commission may grant
reconsideration by reviewing the existing record, by written briefs, or by evidentiar hearing.
IDAPA 31.01.01.311.03. If reconsideration is granted, the Commission must complete its
reconsideration within 13 weeks after the deadline for filing petitions for reconsideration. Idaho
Code § 61-626(2).
Consistent with the purose of reconsideration, the Commission's Procedural Rules
require that petitions for reconsideration "set forth specifically the ground or grounds why the
petitioner contends that the order or any issue decided in the order is uneasonable, unlawfl,
erroneous or not in conformity with the law." Rule 331.01, IDAPA 31.01.01.331.01. Rule 331
furher requires that the petitioner provide a "statement of the nature and quatity of evidence or
argument the petitioner wil offer if reconsideration is grated." Id
2 The Projects do not elaborate on these objections. However, they included in their Petition a buJleted list: (1) the
bright line rule is inconsistent with federal law; (2) the Commission's bright line rule is in violation of the
rulemaking requirements of the Idaho Administative Procedures Act; (3) "the retroactivity feature of the Order is
suspect"; and (4) adoption of a bright line rule is an unexplained departre from past precedent.
ORDER NO. 32300 6
EXHIBIT 3 PAGE 6 OF 15
B. Legally Binding Agreement on December 14,2010
The Projects argue that, "by their express terms, the Agreements define the date upon
which they become a binding contract on the paries." Reconsideration at 3. The Projects assert
that their Agreements became effective on December 14,2010. The Projects contend that Idaho
Power acknowledges that the Agreements were binding legal obligations as of December 14,
2010. The Projects maintain that the Commission's intent behind a December 14 effective date
is "vaguely written" and "a reasonable person could believe that FESAs effective December 14,
2010, qualified for published avoided cost rates." Id. at 4. Specifically, the Projects argue tht a
reasonable person could understand the Commission's Order to mean that agreements executed
on or before December l4, 2010, are eligible for the LO aMW eligibilty cap.
Commission Findings: The Idaho Supreme Cour has held that "(t)he
implementation of PURP A as it relates to cogeneration and small power producers, and the
regulations promulgated by FERC, have been largely left to the regulatory authorities of the
individual states." A. W Brown Company, Inc. v. Idaho Power Company, 121 Idao 8l2, 8l6,
828 P.2d 841, 845 (1992). "FERC regulations grant the states latitude in implementing the
regulation of sales and purchases between QFs and electric utilties." Order No. 32262 citing
Federal Energy Regulatory Commission v. Mississippi, 456 U.S. 742, 102 S.Ct. 2126, 72
L.Ed.2d 532 (l982). As we stated in our final Order, "(a)ccording to the FERC, 'it is up to the
States, not (FERC) to determine the specific parameters of individual QF power purchase
agreements, including the date at which a legally enforceable obligation is incured under State
law." Order No. 32254 at 9 citing Rosebud Enterprises v. Idaho PUC, l28 Idaho 609, 623-624,
917 P .2d 766, 780-78l (l996) citing West Penn Power Co., 71 FERC ii 6l, l53 (1995).
The Commission's change in eligibilty cap became effective on December 14,2010.
The new 100 kW theshold for wind and solar projects' access to published avoided cost rates
began on December l4, 2010. There is no other reasonable interpretation but that the new rates
were in effect on the day that the Commission declared they become effective - December l4,
2010. Idaho Code § 61-6l8. There is nothg ambiguous or vague about when the new
eligibilty cap took effect. The Projects' arguent to the contrar is without merit. If the
Projects' argument regarding an effective date were applied to its own contract, December 14
could not be relied upon as the execution date of the Agreements - the self-proclaimed "effective
date" upon which the Agreement was fully executed by both paries. It is inconsistent and
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EXHIBIT 3 PAGE 7 OF 1S
insincere for the Projects to declare that the Commission's asserton of an effective date is
ambiguous only to subsequently rely on an effective date declaration in their Agreements to
support approval of the contracts.
Moreover, the final Order disapproving the Projects' Agreements was abundantly
clear: "in order for the 10 aMW eligibilty cap to be available to wind and solar QFs, the
agreement must have been effective prior to December l4, 2010." Order No. 32256 at 8
(emphasis added). We find that, for each of these two projects, a legally enforceable obligation
was incured on December 14, 2010. By the Projects' own admssion and the very terms of
the
contracts, the Agreements were not effective until December l4, 20l0. Agreements' 1.10. We
fuher find that, on that date, wid projects larger than 100 kW were no longer entitled to
published avoided cost rates. However, as QFs, the Projects remain entitled to PUR A contracts
with avoided cost rate terms calculated using the IRP Methodology. This finding is based on
substantial and competent evidence and supported by the record in this case.
Although no pary has arued ths position on the matter, we recognze that the
contrcts also provide that the Agreement will not become effective until the Commission has
approved all of the terms and conditions and declares that all payments made by Idaho Power to
each project for purchases of energy wil be allowed as prudently incured expenses for
ratemaking purses. Agreements' 21.1 (emphasis added). An effective date based on
Commission approval of the Agreement has been supported on Idao Supreme Cour review.3
However, based upon this record, we find tht the legally enforceable obligation is the date tht
the paries executed the Agreements and agreed to be bound by the terms contained therein. On
that date, wind projects with a capacity of greater than 100 kW were not eligible to receive
published rate contracts. The considerations made by this Commission are authorized by
PUR A and FERC regulations. The Projects have failed to demonstrate that we were not
regularly pursuing our authority.
The Commission's finding is also in the public interest and strikes a balance between
"the local public interest of a utilty's electric conswners and the national public interest in
development ofaltemative energy sources." Rosebud Enterprises, 128 Idaho at 6l3, 917 P.2d at
3 "Rosebud is not entitled to a lock-in of an avoided cost rate until it has entered into a legally enforceable and
¡PUC approved obligation for the delivery of energy and capacity." Rosebud Enterprises, 128 Idaho at 620, 917
P.2d at 777 (emphasis added).
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770. Allowing a project to avail itself of an eligibilty cap (and therefore published rates) that is
no longer applicable could cause ratepayers to pay more than the utilty's avoided cost which
"would be in direct violation of PURPA policies." A.w. Brown Company v. Idaho Power
Company, 121 Idaho 812, 8l8, 828 P.2d 84l, 847 (l992). Based on the foregoing, the Projects'
request for reconsideration on this issue is denied.
C. Grandfathering Treatment
The Projects next argue that the Commssion's "long history of grappling with claims
eligibilty for higher rates following a reduction in rates or change in methodology is well known
and will not be repeated here." Reconsideration at 5. The Projects maintain that they would be
eligible for grandfathering treatment under ''traditional criteria" because contract negotiations
between Idaho Power and the Projects were materially complete prior to December l4, 20 1 O. Id.
citing Order Nos. 29389,29954, and 30109.
Commission Findings: The Projects' reliance on prior Commission Orders that
permit projects to be grandfathered is misplaced. First, the Commission explicitly stated that
"we look at the totality of the facts" in assessing entitlement to grandfathering status. Order No.
29954 at 2. In these Agreements, the "effective date" of each Agreement is the same day that the
Commission's 100 kW eligibility cap for wind and solar projects' access to published rates
became effective. Thus, the Projects' Agreements do not support that use of grandfathering.
Second, the Idaho Supreme Cour has stated that "(cJonferment of grandfathered status on (aJ
qualifying facilty is essentially an IPUC finding that a legally enforceable obligation to sell
power existed by a given date. Such a finding is within the discretion of the state regulatory
agency." Rosebud Enterprises, 128 Idaho 624, 917 P.2d at 78l (emphasis added). In this
consolidated case, we found that each of the two projects incured a legally enforceable
obligation on December l4, 2010. Thus, there is no occasion to resort to the use of
grandfathering criteria. The Commission's decision to not utiliz grandfathering criteria and,
instead, adhere to the stated effective date of the reduced eligibilty cap is within the
Commission's discretion. This finding is consistent with our authority under federal and state
law.
Third, our Supreme Cour has noted, "Because regulatory bodies perform legislative
as well as judicial functions in their proceedings, they are not so rigorously bound by the
doctrine of stare decisis that they must decide all future cases in the same way as they have
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EXHIBIT 3 PAGE 9 OF is
decided similar cases in the past." Rosebud Enterprises v. Idaho PUC, l28 Idao 609, 6l8, 917
P.2d 766, 775 (1996) citing Intermountain Gas Co. v. Idaho PUC, 97 Idaho 113, ll9, 540 P.2d
775, 781 (1975). "So long as the Commission enters suffcient findings to show that its action is
not arbitrar and capricious, the Commission can alter its decisions." Washington Water Power
v. Idaho PUC, 101 Idaho 567, 579, 617 P.2d 1242, 1254 (1980). Therefore, simply because
grandfathering criteria have been used in consideration of QF eligibilty to published rates in the
past does not mean that this Commssion must decide all futue QF eligibilty cases in the same
maner.
Regardless of whether it is a change in the eligibilty cap for access to published rates
or a change in the rates themselves, the Commission is not bound by prior grandfathering
treatment decisions so long as our decision is based on substatial and competent evidence in the
record and we enter suffcient fmdings to demonstrate that is the case. In contrast to the change
in eligibilty for published rates in 2005,4 no criteria were enunciated or established by this
Commission to determine project eligibility through the use of grandfathering for QF agreements
executed on or after December 14, 2010. Because the Commission's decision to not utilze
gradfathering criteria was not arbitrary and/or capricious, we deny reconsideration on this issue.
As stated in our final Order, it is adverse to the public interest to allow pares who
have not executed timely contracts to avail themselves of an eligibilty cap that is no longer in
place. Order No. 32256 at 8. Grandfathering contracts that were executed on or afer December
14, 2010, and allowing them to utilze an eligibilty cap that is no longer applicable, would be
contr to our determination regarding what the public interest requires. This finding is
supported by substatial and competent evidence in the record and as explained in our Orders.
Moreover, no appeal was taken from the Commission's Order to lower the eligibilty
cap. Idaho Code § 6l-625 prohibits collateral attcks of Commission Orders that are final and
conclusive. "A different rule would lead to endless consideration of matters previously
presented to the Commission and confsion about the effectiveness of Commission orders."
Utah-Idaho Sugar Co. v. Intermountain Gas Co., 100 Idaho 368, 373, 597 P.2d 1028, 1063
(1979). The Projects are, in essence, collaterally attacking the Commission's prior Order
4 The Commission outlined criteria that it would consider in detennining whether a project was eligible for the
previous, no longer applicable, eligibilty cap for published avoided cost rates, i.e., whether a project would be
"grandfatered" and pennitted to utilize the old eligibilty cap. Order No. 29839.
ORDER NO. 32300 10
EXHIBIT3 PAGEIOOFIS
reducing the eligibilty cap by arguing that grdfathering criteria should apply. However, no
par timely appealed the Commssion's decision in that case. Case No. GNR-E-1O-04; Order
Nos. 32176 and 32212. Therefore, the Commssion's decision to lower the eligibilty cap from
10 åMw to 100 kW for wind and solar projects effective December 14, 20l0, is a final and
conclusive Order of the Commission that is not subject to collateral attck. Based upon the
foregoing, we deny reconsideration of ths issue.
D. Improper Governmental Interference with Contractual Rights
The Projects claim that application of a bright line rue "renders the contracts a
nullity" and may constitute an improper governental interference with contrctual rights.
Reconsideration at 6. The Projects argue tht the constitutional protection against governenta
interference requires a "quantity of proof' in order to justify altering a rate fixed by contract. Id
citing Agricultural Products v. Utah Power, 98 Idao 23, 557 P .2d 617 (1976).
Commission Findings: First, we note that a firm energy sales agreement/power
purchase agreement differs from a stadard offer and acceptace contract. Unlike standard offer
and acceptace contracts, PURP A agreements are subject to review and approval by this
Commission pursuant to Idaho statutes. Idaho Code §§ 6l-502 and 61-503. "The Commission,
as par of its statutory duties, determines reasonable rates and investigates and reviews
contracts." A. W. Brown Company v. Idaho Power Company, 121 Idaho 8l2, 816, 828 P.2d 841,
845 (1992). Thus, QF power purchase agreements are different from tyical or standard
contracts. "Interference with private contracts by the state regulation of rates is a valid exercise
of the police power, and such regulation "is not a violation of the constitutional prohibition
against impairment of contractual obligations." Agricultural Products Corp. v. Utah Power &
Light Co., 98 Idaho 23, 29, 557 P.2d 617, 623 (1976). Moreover, "(p)rivate contracts with
utilities are regarded as entered into subject to reserved authority of the state to modify the
contract in the public interest." Id (emphasis added). This Commission specifically stated that
it was not in the public interest to approve the Projects' Agreements because they were executed
afer a new, lower eligibilty to published rates became effective. Order No. 32256 at 8. The
Projects have failed to prove that this finding is uneasonable, erroneous or not in conformance
with the law.
Second, this Commission is not modifying the Agreements between Idaho Power and
the Projects. We did not change the terms of the Agreements - we disapproved the contrcts
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because the terms did not comply with Order No. 32176 requiring wind projects with a capacity
greater than 100 kW to utiliz the IRP Methodology to determe avoided cost rates. Order No.
32256 at 9. It would be contrar to the public interest and a violation of Order No. 32176 to
approve agreements executed on or afer December 14,2010, that contain published avoided cost
rates for wind projects with a design capacity of more than 100 kW. The Projects have failed to
demonstrate that we were not regularly pursuing our authority in disapproving their Agreements.
Consequently, reconsideration of this issue is denied.
E. Remaining Assertions of Error
The Projects sumarize their position by arguing that application of the
Commission's bright line rule "offends fundamenta conceptions of justice." Reconsideration at
6. The Projects also reference "other paries in companion cases (who) intend to assert more
general objections to the Bright Line Rule." Id at 7. The Projects do not elaborate on these
objections beyond a bulleted list: (1) the bright line rule is inconsistent with federal law; (2) the
Commission's bright line rule is in violation of the ruemakng requirements of the Idaho
Administrative Procedures Act; (3) "the retroactivity featue of the Order is suspect"; and (4)
adoption of a bright line rule is an unexplained deparure from past precedent. Id. The Projects
state that, if ''te Commission is unable to reach the result herein requested, Rainbow wil, of
necessity. join in the assertion of those other, more general objections." Id.
Commission Findings: Commission Rule 331 requires that petitions for
reconsideration describe "specifically the ground or grounds why the petitioner contends that the
Order or any issue decided in the Order is unreasonable. unlawfl, erroneous or not in
conformance with the law, and (set fort) a statement of the nature and quantity of evidence or
argument the petitioner wil offer if reconsideration is granted." IDAPA 31.01.01.331.01. We
find that a notation regarding manifest injustice and a bulleted list of additional issues argued by
other paries in other cases fails to meet the requirements of Rule 331 for these issues. In
paricular, the Projects have failed to identify the specific grounds upon which they contend the
Order is unawful or erroneous in these regards. We furer find that they have failed to provide
''the nature and quantity of evidence or argument."s Id Accordingly, we deny reconsideration
of these issues.
5 In response to the Projects' bullet point regarding rulemaking under the APA, we note our finding in Order Nos.
32298 at 13 and 32299 at 12-13.
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Nothing cited by the Projects demonstrtes that the Commission's Order is arbitry
or capncious or inconsistent with federal or state law. On the contrar, FERC specifically
delegated authonty to the States to detennine when and how a legally enforceable obligation is
created. We find that a legally enforceable obligation is incured and a contract is fully executed
upon obtaining the signatue of both paries. We furer find that a legally enforceable
obligation was incured by Idaho Power and these two projects on December l4, 2010. On tht
date, wind projects larger than 100 kW were no longer entitled to the 10 aMW published avoided
cost rate. In determining when the paries incured a legally enforceable obligation, we properly
exercised the authonty granted us by FERC. "For puroses of (FERC) regulations, the critical
date is the date on which a legally enforceable obligation is incured, and choosing that date for a
specific QF is the responsibilty of the States, not of (FERC)." West Penn Power Co., 7l FERC
~ 61153, 61495 (1995). This finding is based on substantial and competent evidence. The
Commission's finding is also in the public interest and strikes a balance between "the local
public interest ofa utilty's electrc consumers and the national public interest in development of
alternative energy sources." Rosebud Enterprises, 128 Idaho at 613, 917 P.2d at 770.
As we stated in our final Order, a comprehensive review of a power purchase
agreement is consistent with this Commssion's directive to utilties that they assist the
Commssion in its gatekeeper role when reviewing QF contrcts.6 Order No. 32256 at 7. We
find that it is reasonable and consistent with the authority granted us under PURP A, and that the
public interest requires that each pary have a full and final review of the contract before signing
and obligating the utility and its ratepayers to hundreds of millons of dollars in energy payments
over the 20-year life of the agreement. The Projects were given unestricted time to adequately
review the contracts before signing. Idaho Power is obligated to be as dilgent in its review pnor
to requesting Commission approval that wil commit ratepayer dollars.
CONCLUSION
The Commission has jurisdiction over Idao Power, an electric utilty, and the issues
raised in this matter pursuant to the authonty and power granted it under Title 6l of the Idaho
Code and the Public Utility Reguatory Policies Act of 1978 (pURP A). The Commission has
6 "The Commission, as par of its statutory duties, detennines reasonable rates and investigates and reviews
contracts." A.W: Brown Company v. Idaho Power Company, 121 Idaho 812, 816, 828 P.2d 841, 845 (1992)
(emphasis added).
ORDER NO. 32300 13
EXHIBIT 3 PAGE 13 OF 15
authority under PUR A and the implementing reguations of the Federal Energy Regulatory
Commission (FERC) to set avoided cost rates, to order electrc utilties to enter into fixed-term
obligations for the purhase of energy from quaified facilities (QFs) and to implement FERC
rues. Rosebud Enterprises, Inc. v. Idaho Public Utilties Commission, 128 Idaho 609, 612, 917
P.2d 766, 769 (1996).
Although FERC promulgated the general scheme and rues, it left the actu
implementation of PURP A to the state regulatory authorities. Id, 128 Idaho at 614, 917 P .2d
771. FERC rules insist tht rates for purchases from QFs be just and reasonable to ratepayers, in
the public interest, and not discrimnatory against QFs. 18 C.F.R. § 292.304(a)(I). Notably,
PURP A and the implementing regulations require only that published/stadard avoided cost rates
be established and made available to QFs with a design capacity of 100 kW or less. 18 C.F.R. §
292.304(c). When this Commission reduced wind and solar projects' eligibility to published
avoided cost rates we unequivocally stated that continuing to allow large wind and solar projects
access to published avoided cost rates for projects greater than 100 kW was "clearly not in the
public interest." Order No. 32262. We reaffrmed that determination in the present case by
finding that "it is not in the public interest to allow paries with contracts executed on or afer
December 14, 2010, to avail themselves of an eligibilty cap that is no longer applicable." Order
No. 32256 at 8. The Projects have failed to demonstrate that the Commission's findings are
uneasonable, unawf, erroneous, or not in conformity with the law. Rule of Procedure 33l,
IDAPA 31.01.01.331.01.
The Firm Energy Sales Agreements between Idaho Power and the two projects were
executed on December 14, 2010. The Agreements recite that each project will have a maximum
capacity amount of 23 MW. Under normal and/or average conditions, each project wil not
exceed 10 aMW on a monthly basis. Because the size of each of these wind projects exceeds
LOO kW, they are not eligible to recive the published avoided cost rate. Neverteless, the
Projects are entitled to PURP A contracts with avoided cost rates calculated using the IRP
Methodology.
ORDER
IT IS HEREBY ORDERED that the joint Petition for Reconsideration fied by
Rainbow Ranch Wind and Ranbow West Wind is denied.
ORDER NO. 32300 l4
EXHIBIT3 PAGE140F15
THIS IS A FINAL ORDER ON RECONSIDERATION. Any par aggreved by
this Order or other fial or interlocutory Orders previously issued in this Case Nos. IPC-E-1O-59
or IPC-E-lO-60 may appeal to the Supreme Cour of Idaho pursuat to the Public Utilties Law
and the Idaho Appellate Rules. See Idaho Code § 61-627.
,. n'fDONE by Order of the Idaho Public Utilties Commission at Boise, Idao this 0'.1
day of July 201l.
PAUL , PRESIDENT
MACKA.REDF
12~.r ¿~šlì H. SMITH, COMMISSIONER
ATTEST:
~.~~J D. Jewel
C mmission Secretar
O:IPC-E-l 0-59 _IPC-E- l 0-60_ks3
ORDER NO. 32300 l5
EXHIBIT 3 PAGE 15 OF 15