20131204Application and Attachments.pdf

3Iffi*.
An IDACORP Companv
JENNIFER M. REINHARDT.TESSMER
Gorporate Counsel
[e-mail]
December 4,2013
VIA HAND DELIVERY
Jean D. Jewel!, Secretary
ldaho Public Utilities Commission
47 2 W esl Washington Street
Boise, ldaho 83702
Re: Case No. !PC-E-13-23
Approval of Special Contract Terms with J. R. Simplot Company - ldaho
Power Company's Application
Dear Ms. Jewell:
Enclosed forfiling in the above matterare an originaland seven (7) copies of ldaho
Power Company's Application for Approval of Specia! Contract Terms with J. R. Simplot
Company.
Sincerely,
JRT:csb
Enclosures
1221 W ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
JENNIFER M. REINHARDT-TESSMER (lSB No. 7432)
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
irei n hardt@ida ho power. com
I nord strom @ id ahopower. co m
Attorneys for ldaho Power Company
]N THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
APPROVAL OF SPECIAL CONTRACT
BETWEEN IDAHO POWER COMPANY
AND J. R. SIMPLOT COMPANY.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
' r', !'- I 1 ,
CASE NO. |PC-E-13-23
IDAHO POWER COMPANY'S
APPLICATION FOR APPROVAL
OF SPECIAL CONTRACT TERMS
WITH J. R. SIMPLOT COMPANY
ldaho Power Company ("ldaho Powe/'or "Company"), in accordance with RP 52
and ldaho Code SS 61-501, 61-502, and 61-503, hereby requests that the ldaho Public
Utilities Commission ("Commission") issue an order approving special contract terms for
electric service between ldaho Power and the J. R. Simplot Company ("Simplot") for
Simplot's Caldwell facility.l ldaho Power and Simplot have reached an agreement as to
nearly all of the terms and conditions of the contract, but have reached an impasse on
certain provisions regarding limitations on liability (Sections 11.2-11.4). Therefore,
1 Currently, ldaho Power and Simplot have a special contract for Simplot's Don Plant located in
Pocatello, ldaho ("Don Plant special contract"), which enables Simplot to use in excess of 20,000
kilowatts ('kW') of energy at that location, in accordance with the terms set forth in the Don Plant special
contract (approved by the Commission in Case No. IPC-E-O4-17, Order No. 29576).
IDAHO POWER COMPANY'S APPLICATION FOR APPROVAL
OF SPECIAL CONTRACT TERMS WITH J. R. SIMPLOT COMPANY. 1
ldaho Power hereby requests an order approving the special contract as proposed by
the Company in the concurrently filed Attachment 1 ("Proposed Special Contract"),
without change or condition. Attachment 2 to this Application is the proposed tariff,
which shows the billing components associated with the Proposed Special Contract.2
I. BACKGROUND
Large power service customers that register a metered demand of 1,000 kW or
more per Billing Period3 for three or more Billing Periods during the most recent 12
consecutive Billing Periods are required to take service according to the terms in
Schedule 19. See l.P.U.C. No. 29,Tarift No. 101, Schedule 19. Customers forwhich
Schedule 19 is applicable, who contract for firm electric Demand of 10,000 kW to
20,000 kW may optionally take service under a mutually agreed upon special contract
between the customer and the Company, if approved by the Commission. ld.
Additionally, once a custome/s firm electric Demand exceeds 20,000 kW, the customer
becomes ineligible for Schedule 19 service and must make special contract
arrangements, as described in Schedule 19. ld.
ln addition to the Don Plant, Simplot owns a plant at or near Caldwell, ldaho,
which has recently been expanded,a and that currently consumes no more than 20,000
kW of energy provided by ldaho Power (and is therefore subject to Schedule 19).
Based on communications with Simplot representatives, it is the Company's
understanding that Simplot anticipates an energy need in excess of 20,000 kW in the
' On November 26, 2013, ldaho Power presented the tariff to Simplot for its review.
3 A Billing Period, as referenced in Schedule 19, is the period intervening between meter readings
and shall be approximately 30 days. Electric service covering 27-36 days inclusive will be considered a
normal billing period. l.P.U.C. No. 29, Tariff No. 101, Rule B (Definitions).
o lt is the Company's understanding that the new Caldwell plant replaces the existing Caldwell
plant and consolidates the activities of the Nampa and Aberdeen facilities at the Caldwell location.
IDAHO POWER COMPANY'S APPLICATION FOR APPROVAL
OF SPECIAL CONTRACT TERMS WITH J. R. SIMPLOT COMPANY - 2
near future. ln the spring of 2013, a Simplot representative contacted ldaho Power with
a request to enter into negotiations for a special contract for the Caldwell plant. !n
response to Simplot's request, ldaho Power drafted a special contract for Simplot's
consideration. The duties and risks the Company agreed to assume in the Proposed
Special Contract directly impacted the proffered cost-of-service. Simplot proposed
several changes and, over the next several months, representatives from Simplot and
Idaho Power engaged in an in-person meeting, a telephone conference, and exchanged
several e-mails discussing and negotiating the terms of the special contract. Ultimately,
ldaho Power agreed to several of Simplot's proposed changes and the parties were
able come to an agreement as to the terms of the Proposed Special Contract, with the
exception of Sections 11.2-11.4, which place limits on both parties'liability. Those
provisions, as originally proposed by ldaho Power, are as follows:
11.2. EACH PARTY EXPRESSLY AGREES THAT
NEITHER PARTY NOR ITS AFFILIATES WILL UNDER
ANY CIRCUMSTANCES BE LIABLE UNDER ANY THEORY
OF RECOVERY, WHETHER BASED IN CONTRACT, IN
TORT (INCLUDING NEGLIGENCE AND STRICT
LtABlLlry), UNDER WARRANTY, OR OTHERWTSE, FOR:ANY INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL LOSS OR DAMAGE OR PUNITIVE
DAMAGES WHATSOEVER; LOSS OF PROFITS OR
REVENUE; LOSS OF USE OF MATERIAL OR
EQUIPMENT; OR INCREASED COSTS OF CAPITAL AND
FUEL COST; PROVIDED, HOWEVER, THAT NOTHING IN
THIS PARAGRAPH 11.2 SHALL BE CONSTRUED TO
LIMIT SIMPLOT'S PAYMENT OBLIGATIONS TO IDAHO
POWER.
11.3. EACH PARTY AGREES UNDER NO
CIRCUMSTANCES SHALL THE TOTAL AGGREGATE
CLAIMS AGAINST AND LIABILITY OF THE OTHER PARTY
FOR DIRECT DAMAGES, UNDER ANY THEORY OF
RECOVERY, WHETHER BASED IN CONTRACT, IN TORT
(tNcLUDtNG NEGLIGENCE AND STRICT LIABILITY), OR
IDAHO POWER COMPANY'S APPLICATION FOR APPROVAL
OF SPECIAL CONTRACT TERMS WITH J. R. SIMPLOT COMPANY - 3
OTHERWISE, EXCEED ONE HUNDRED PERCENT
(100%) oF THE TOTAL CHARGES PAID BY STMPLOT TO
IDAHO POWER UNDER THIS CONTRACT UNDER ANY
GIVEN CALENDAR YEAR; PROVIDED, HOWEVER, THAT
THIS LIMITATION OF LIABILITY SHALL NOT LIMIT
SIMPLOT'S PAYMENT OBLIGATIONS TO IDAHO POWER
UNDER TH!S AGREEMENT.
11.4. EXCEPT AS PROVIDED IN THIS AGREEMENT,
IDAHO POWER MAKES NO WARRANTIES, EXPRESSED
OR IMPLIED, INCLUDING WITHOUT LIMITATION, THOSEOF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE WORK
AND SERVICES PROVIDED HEREUNDER.
Simplot rejected these provisions, specifically objecting to a bilateral waiver of
indirect, special, and consequentia! damages ("consequentia! damages") and a
limitation on direct damages, Sections 11.2 and 11.3, respectively. ln explanation,
Simplot stated in one of the revised contract drafts that was exchanged, that the "true
costs of this . . . would be hundreds of millions of dollars." ldaho Power has explained
that this is exactly the reason the Company cannot assume that risk. ln an effort of
compromise, the Company agreed to raise the ceiling on the Company's potential
liability for direct damages an additional 50%, as reflected in the Proposed Special
Contract. See Attachment 1.
On November 19, 2013, counsel for Simplot and ldaho Power had a
teleconference in an attempt to come to an agreement on the disputed liability
paragraphs in Section 11. Despite ldaho Power's best efforts, a mutually agreeable
resolution could not be reached. Simplot proposed that Rule J replace Sections 11.2
and 11.3, which the Company rejected as an insufficient limitation of potential liability for
this special contract. ln another exchange, Simplot proposed the language in the
Micron special contract from approximately 13 years ago, which was silent as to
IDAHO POWER COMPANY'S APPLICATION FOR APPROVAL
OF SPECIAL CONTRACT TERMS WITH J. R. SIMPLOT COMPANY - 4
consequential damages and direct damages.s ldaho Power reiterated its position that it
would not be appropriate to subject the Company and its customers to undue risk for
liability related to Simplot's business, which included the risk of consequential damages
and unlimited direct damages. Further, ldaho Power is continuously reviewing and
enhancing its contracts, and today's market standards for such contracts include such
provisions limiting liability. Ultimately, it was determined that intervention by the
Commission would be necessary.
II. REQUEST FOR APPROVAL BY THE COMMISSION
OF THE COMPANY'S PROFFERED TERMS
The Commission has the express statutory jurisdiction and authority over utility
rates, any contracts affecting such rates, and the power and authority to hear
complaints and investigate any single rate, contract, or practice of a utility. !.C. SS 61-
501-61-503. Specifically, the Commission has jurisdiction, upon its own motion or
complaint, to evaluate and order just or reasonable rates and contracts relating to rates.
I.C. S 61-502. Further, the ldaho Supreme Court has recognized that the Commission
may interpret contractual provisions, which may normally be within the jurisdiction of the
courts, upon the consent of the parties for the Commission to hear such matters. Afton
Energy, lnc., v. ldaho Power Co., 111 ldaho 925, 929, 729 P.2d 4OO, 404 (1986)
quoting Bunker Hill Co. v. Washington Water Power Co., 98 ldaho 249,252,561 P.2d
s The specific provision of the Micron special contract that Simplot proposed in lieu of 11.2-11.4 of
the Proposed Special Contract is as follows: "Each party agrees to protect, defend, indemnify and hold
harmless the other party, its officers, directors, and employees against and from any and all liability, suits,
loss, damage, claims, actions, costs, and expenses of any nature, including court costs and attorney's
fees, even if such suits or claims are completely groundless, as a result of injury to or death of any person
or destruction, loss or damage to property arising in any way in connection with, or related to, this
Agreement, but only to the extent such injury to or death of any person or destruction, loss or damage to
property is not due to the negligence or other breach of legal duty of such other party; provided, however,
that each party shall be solely responsible for claims of and payment to its employees for injuries
occurring in connection with their employment or arising out of any workman's compensation law."
IDAHO POWER COMPANY'S APPLICATION FOR APPROVAL
OF SPECIAL CONTMCT TERMS WITH J. R. SIMPLOT COMPANY - 5
391,394 (1977). The ldaho Supreme Court has specifically recognized the
Commission's authority to "use its expertise and supply a reasonable contract rate"
where the parties were unable to agree to terms in a special contract. Afton,111 ldaho
at 929 citing FMC Corp. v. ldaho Public Utilities Commission, lO4ldaho 265, 658 P.2d
936 (1983). lndeed, in the past, when a customer and utility have not been able to
successfully negotiate a special contract for electric service, the Commission has set
appropriate special contract rates and terms upon petition of the utility.G
ln this case, ldaho Power has made every effort to negotiate a mutually
acceptable special contract with Simplot; however, the parties are at an impasse
regarding the allocation of risk for potential liability. Both parties agree that potential
direct and consequential damages related to the supply of energy to Simplot's Caldwell
facility could be astronomica!. This is precisely why the assumption of risk for liability is
a critical element to energy contracts like the one at hand, and directly impacts the other
special contract terms, including, but not limited to, the Company's proffered cost-of-
service.
Simplot's suggestion that Rule J should replace the disputed contract provisions
is unacceptable, as Rule J is simply insufficient to adequately reduce the risk for the
Company and its customers of potential liability under a special contract. Rule J limits
the Company's liability for interruption of service caused by acts of God (commonly
known as force majeure provisions) and the Company's "repair, maintenance,
improvement, renewal or replacement work"; it does not adequately limit contract and
warranty claims, and explicitly states that "the provisions of this rule do not affect any
u See ln the Mafter of the Apptication of PacifiCorp dba Utah Power & Light Company for
Approval of lnterim Provisions for the Supply of Electric Seryice to Monsanto Co., Case No. PAC-E-01-
16, Final Order No. 29157.
IDAHO POWER COMPANY'S APPLICATION FOR APPROVAL
OF SPECIAL CONTRACT TERMS WITH J. R. SIMPLOT COMPANY - 6
person's rights in tort." See l.P.U.C. No. 29,Tariff No. 101, Rule J. The current market
standard is clear-utilities do not assume the risk for consequential damages and
unlimited direct damages.T ln fact, Simplot itself agreed to a waiver of consequential
damages in the Don Plant special contract. See /n the Matter of the Application of
ldaho Power Co. for Approval of an Agreement for Electric Seruice Between ldaho
Power Co. and the J.R. Simplot Co., IPC-E-04-17 (Application and related Order No.
29576). lndeed, ldaho Power has been party to numerous energy contracts in recent
years that contain a provision waiving consequential damages and limiting direct
damages. Based on a review of just those documents that are publicly available,
Simplot's own contracts provide for a waiver of consequential damages and limitation
on direct damages from the terms of use governing its website
(http://www.simplot.com/terms conditions) to the terms that govern the use of its
prod uct ( http ://techsheets. si m plot. co m/Partners/S ix I ro n. pdf).
The Company requests a ruling from the Commission approving the Proposed
Special Contract, finding that if Simplot's energy needs exceed 20,000 kW of electricity
at its Caldwell plant, Simplot would have to abide by its terms. Alternatively, should the
'For example, in ldaho Power's contract for construction of its Langley Gulch power plant, direct
damages were limited to 25o/o of the contract price (Section 26.1(a)) and there was a complete waiver of
incidental, punitive, and consequential damages (Section 26.2); see also ln the Matter of the Application
of ldaho Power Co. for Approval of a Special Contract to Supply Electrical Power to Hoku Materials, lnc.,
IPC-E-08-21 (Section 12 provided that "Neither party shall, in any event, be liable to the other for any
special, incidental, exemplary, punitive, or consequential damages," approved in Order No. 30697; /n fhe
matter of the Application of ldaho Power Co. and FMC Corporation for Approval of a Special Contract for
Service,lPC-E-97-13 (Section 14.2 provided that damages are limited to actual damages caused by the
Company and does not include consequential or indirect damages); ln the Mafter of the Application of
PacifiCorp, dba Rocky Mountain Power for Approval of an Electric Service Agreement with Monsanto
Company, PAC-E-06-09 (Section 10.2 providing that "PacifiCorp shall not be liable for any physical
damages, economic losses, costs, or damages resulting therefrom, including but not limited to special,
indirect, incidental, consequential, punitive or exemplary damages."), approved in Order No. 30197; /n the
Matter of the Joint Petition of Avista Corporation and Potlatch Corporation for Approval of Power
Purchase and Sale Agreement, AVU-E-02-08 (Section 13 providing for waiver of "any special, incidental,
punitive, exemplary or consequential loss or damage whatsoever").
IDAHO POWER COMPANY'S APPLICATION FOR APPROVAL
OF SPECIAL CONTRACT TERMS WITH J. R. SIMPLOT COMPANY - 7
Commission determine that it is prudent for the Company to assume the risk for
unlimited direct damages and consequential damages associated with Simplot's
business, ldaho Power requests an opportunity to re-examine the terms of the special
contract, including, but not limited to, an appropriate cost-of-service, that appropriately
reflect this assumption of risk.
III. CONCLUSION
Idaho Power and its customers should not be exposed to undue risk of unlimited
direct damages and consequential damages related to Simplot's business. ldaho
Power has set forth reasonable limitation of liability language in the Proposed Special
Contract that is consistent with prudent energy contract procedures and market
standards. ldaho Power respectfully requests that the Commission approve the
Proposed Special Contract terms, without change or condition.
DATED at Boise, tdaho, this 4th day of December 2019.
IDAHO POWER COMPANY'S APPLICATION FOR APPROVAL
OF SPECIAL CONTRACT TERMS WITH J. R. SIMPLOT COMPANY. S
for ldaho Power Company
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 4th day of December 20131 served a true and
correct copy of IDAHO POWER COMPANY'S APPLICATION FOR APPROVAL OF
SPECIAL CONTRACT TERMS WITH J. R. SIMPLOT COMPANY upon the following
named parties by the method indicated below, and addressed to the following:
J. R. Simplot Company
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, Idaho 83707
Hand DeliveredX U.S. Mail
_Ovemight Mail
FAXX Email
IDAHO POWER COMPANY'S APPLICATION FOR APPROVAL
OF SPECIAL CONTMCT TERMS WITH J. R. SIMPLOT COMPANY - 9
pete r@ richa rd sonad a ms. com
oreg@richardsonadams. com
sta Bearry, Legal Assistant
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-13-23
IDAHO POWER COMPANY
ATTACHMENT 1
PROPOSED SPECIAL CONTRACT
nEIll0IIpYg6P.
An lOAcoRP companY
SPECIAL CONTRACT FOR ELECTRIC SERV!CE
BETWEEN
IDAHO POWER COMPANY
AND
StMPLOT (CALDWELL, TDAHO)
THIS AGREEMENT FOR ELECTRIC SERVICE ("Agreement") is entered
into by J.R. Simplot Compahy, a Nevada Corporation ("Simplot") and IDAHO POWER
COMPANY, an ldaho Corporation ("ldaho Power") and is dated December _, 2013.
The undersigned may also be referred to individually as a "Party" or collectively as the
"Parties." ln consideration of the mutual covenants hereinafter set forth, the Parties
hereby agree as follows:
SECTION 1 _ DEFINITIONS
1.1. "Billing Demand" shall mean the kilowatts supplied to the Simplot
Facility during the coincident 1S-consecutive-minute period of maximum use during the
monthly billing period, adjusted for power factor, as measured by ldaho Power's
metering equipment located at the Simplot Facility.
1.2. "Commission" shall mean the ldaho Public Utilities Commission or
its successor agency.
1.3. "Contract Demand" shall mean the monthly schedule of kilowatts
ldaho Power has agreed to make available to the Simplot Facility in accordance with this
Agreement. The Contract Demand may vary pursuant to Section 5.
1.4. "Construction Agreement" shall have the meaning set forth in
Section 6.
1.5. "Excess Demand" shall mean Billing Demand in excess of the
Contract Demand.
1.6. "lnterconnection Facilities" shall mean all facilities that are
reasonably required by Prudent Electrical Practices and the National Electric Safety
Code to interconnect and deliver electrical power and energy to the Point of Delivery at
the Simplot Facility, including, but not limited to, transmission facilities, substation
facilities and metering equipment.
1.7. "Minimum Monthly Billing Demand" shall have the meaning set forth
in paragraph 5.2.3.
1.8. "Notice" as used in this agreement shall mean written notice
delivered to the other Party by a recognized commercial courier, addressed as set forth
below. Such notice will be deemed given as of the date of receipt.
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7'!rlllll0ts5yry6p"
1.8.1. To ldaho Power:
ldaho Power Company
ATTN: Vice President of Regulatory Affairs
P.O. Box 70
Boise, ldaho 83707
1.8.2. To Simplot:
J.R. Simplot Company
ATTN: Director, Energy
P.O. Box 27
Boise, lD 83702
1.9. "Point of Delivery" shall mean the location(s) specified in paragraph
4.2 where the electrical facilities owned by Simplot are interconnected to the electrical
facilities owned by ldaho Power and where power and energy are delivered by ldaho
Power for the purpose of providing electrical service for the operations of the Simplot
Facility.
1.10. "Prudent Electrical Practices" shall mean those practices, methods,
and equipment that are commonly and ordinarily used in electrical engineering and utility
operation to operate electrical equipment and deliver electric power and energy with
safety, dependability, efficiency and economy.
1.11. "Schedule 33" shall mean the Simplot Facility tariff schedule of rates
and charges or its successor schedules approved by the Commission.
1.12. "Simplot Facility" shall mean the Simplot manufacturing complex
located near or at 16551 Simplot Boulevard, Caldwell, ldaho.
1.13. "Termination Charges" shall have the meaning set forth in Section
3.2.
1.14. "Total Maximum Contract Demand" shall mean the upper limit of
50,000 kilowatts of monthly contract demand ldaho Power will make available to the
Simplot Facility pursuant to this Agreement.
SECTION 2 _ TERM OF AGREEMENT
This Agreement shall remain in effect until either Simplot or ldaho Power
terminates this Agreement as provided in Section 3.
SECTION 3 _ TERMINATION
3.1. Notice of Termination by Simplot. Simplot shall have the right to
terminate this Agreement for its convenience and without cause by delivering twelve (12)
months advance written Notice of termination to ldaho Power. The Notice of termination
shall set forth the effective date of termination, which shall be no earlier than twelve (12)
months after Simplot delivers the written Notice of termination.
3.2. Termination Charqes. Simplot shall reimburse ldaho Power for
ldaho Power's costs associated with the termination of this Agreement ("Termination
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nElllotsp1ry6p.
Charges"). Termination Charges shall be limited to the net book value (original cost less
depreciation) of the lnterconnection Facilities paid for by ldaho Power plus the cost of
the removal and transport to storage of surplus !nterconnection Facilities, if any, less a
credit, for any residual value of the surplus lnterconnection Facilities. Termination
Charges will not be assessed for investment costs of lnterconnection Facilities paid for
by Simplot. ldaho Power shall deduct from the Termination Charges any credits due and
owing to Simplot under the terms of this Agreement. Nothing in this paragraph 3.2 shall
prevent either Party from asserting any rights or claims under this Agreement or
otherwise. Subsequent to giving or receiving a termination Notice as described in
paragraph 3.1, ldaho Power will invoice Simplot for any Termination Charges known at
that time. Termination Charges shall be due and payable within fifteen (15) calendar
days of Simplot's receipt of the invoice.
3.3. Notice of Termination bv ldaho Power. ldaho Power shall have the
right to terminate this Agreement and negotiate a new agreement for its convenience
and without cause by delivering eighteen (18) months advance written Notice to Simplot.
The Notice shall set forth the effective date of termination of the Agreement, which shall
be no earlier than eighteen (18) months after ldaho Power delivers the written Notice.
Any new agreement negotiated and agreed to by the Parties shall be subject to final
approval by the ldaho Public Utilities Commission.
SECTION 4 - SERVICES TO BE PROVIDED
4.1. Supplv Obliqation. ln accordance with Prudent Electrical Practices
and subject to the provisions of this Agreement, ldaho Power will furnish Simplot's total
requirements for electric power and energy at the Simplot Facility. Before ldaho Power
commences electric service and as an ongoing condition of service, Simplot's loads must
satisfy the harmonic control requirements set forth in ldaho Power's Rule K approved by
the Commission and the current lnstitute of Electrical and Electronic Engineers (IEEE)
Standard 519. Simplot will not resell any portion of the power and energy furnished
under this Agreement.
4.2. Point of Deliverv. Electric power and energy shall be delivered by
ldaho Power via four 12.5 kilovolt distribution feeders to each point generally described
as the X-1 disconnect switch(es) at the Simplot Facility.
4.3. Description of Electric Service. ldaho Power shall supply three-
phase,60 HZ alternating current at nominal 12,500 volts, with a maximum steady state
variation of plus or minus five percent (5%) under normal system conditions. Consistent
with Prudent Electrical Practices, ldaho Power will operate within the capability of its
existing system to minimize voltage level fluctuations, the normal frequency variation to
be within plus or minus 0.05 HZ on a 60 HZ base. ldaho Power's maximum steady state
variation of plus or minus five percent (5%) and the voltage level fluctuations may vary in
the event of abnormal system conditions.
SECTION 5 _ CONTRACT DEMAND
5.1. Contract Demand. ldaho Power agrees to initially provide the
Simplot Facility 30,000 kilowatts of Contract Demand.
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7ItDlI[N51ry6P.
5.2. Chanqes to Contract Demand. Under no circumstances will Simplot
be allowed to increase the Contract Demand above the Total Maximum Contract
Demand of 50,000 kilowatts.
5.2.1. Chanqes durino the first twelve (12) months after execution of this
contract. During this period, to facilitate actual production and energy consumption
history, Simplot will be able to change (increase or decrease) the contract demand by
1,000 kilowatts per month with 30 days written notice and up 5,000 kilowatts (+/-) per
month with three (3) months written notice up to a total increase of 10,000 kilowatts
during the first year. lncreases beyond 10,000 kilowatts during the first year may be
possible, but Simplot must notify and ldaho Power must agree to these additional
increases.
5.2.2. Chanqes after the first twelve (12) months.
a. lncreases to Contract Demand. Under the terms of this
Agreement, Simplot may increase the Contract Demand above the 30,000 kilowatts of
Contract Demand, in even increments of 1,000 kilowatts. lf the increase in Contract
Demand is between 1,000 kilowatts and 10,000 kilowatts, Simplot shall provide Notice to
ldaho Power of its desire to increase its Contract Demand at least six (6) months in
advance of the first day of the month it desires the additional capacity to be made
available. lf the increase in Contact Demand is greater than 10,000 kilowatts, Simplot
shall provide Notice to ldaho Power of its desire to increase its Contract Demand at least
twelve (12) months in advance of the first day of the month it desires the additional
capacity to be made available. The new Contract Demand will not be decreased for a
minimum of six (6) months. Simplot shall not increase its Contract Demand more than
15,000 kilowatts in any twelve (12) month period.
b. Decreases to Contract Demand. Simplot may decrease the
Contract Demand in even increments of 1,000 kilowatts. Simplot will provide ldaho
Power Notice of Simplot's desires to decrease its Contract Demand at least three (3)
months in advance of the first day of the month in which Simplot desires its decreased
Contract Demand to be effective. Simplot cannot decrease its Contract Demand more
than 15,000 kilowatts in any twelve (12) month period.
5.2.3. Minimum Monthlv Billinq Demand. The minimum monthly billing
demand will be the Contract Demand less 10,000 kilowatts.
5.2.4. Excess Demand. Idaho Power does not guarantee or warrant the
availability of Excess Demand. lf there is Excess Demand at the Simplot Facility, ldaho
Power may curtail service to the Simplot Facility at ldaho Power's sole discretion. ldaho
Power reserves the right to install, at any time at ldaho Power's sole discretion and at
Simplot's expense, any device necessary to protect ldaho Power's system from damage
that may be caused by Excess Demand pursuant to prudent electrical practices as
described in paragraph 1.10 above. Simplot will be responsible for any costs or damages
related to ldaho Power's system, or any costs or damages related to third parties
resulting from Excess Demand. Simplot agrees to use its best reasonable efforts to
monitor its electric loads and to advise ldaho Power as soon as possible of the potential
for Excess Demand. ln the event ldaho Power decides, in its sole discretion, to make
power available to satisfy Excess Demand, the costs charged to Simplot for such Excess
Demand will be subject to the Daily Excess Demand Charge specified in the then-current
Schedule 33.
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SECTION 6 _ FAC!LITIES FOR DELIVERY TO SIMPLOT FACILITY
6.1 . Facilities. The Parties acknowledge that they have separately
entered into the Agreement for the Construction of the Simplot Transformer Addition and
Associated Facilities ("Construction Agreement"), pursuant to which Simplot has paid
ldaho Power to construct the lnterconnection Facilities necessary to provide up to the
Total Maximum Contract Demand under this Agreement. ln the event that additional
transmission and/or substation lnterconnection Facilities are required to provide service
pursuant to Section 5.2.1(a) above, ldaho Power may require Simplot to enter into a
separate agreement that will require Simplot to pay the costs for such additions if
necessary to provide the service.
6.2. Operation and Maintenance. ldaho Power will operate and maintain
lnterconnection Facilities necessary to provide service to the Simplot Facility. Such
lnterconnection Facilities include lnterconnection Facilities paid for by Simplot, including
those paid for by Simplot pursuant to the Construction Agreement. ldaho Power shall
operate and maintain such !nterconnection Facilities in accordance with Prudent
Electrical Practices.
SECTION 7 _ CHARGES TO BE PAID BY SIMPLOT TO IDAHO POWER
7.1. Rates and Charqes. The rates and charges for electrical power,
energy, and other service provided by ldaho Power to the Simplot Facility will be
identified by component in the then-current Schedule 33. Simplot shall pay ldaho Power
the sum of the components identified on the then-current Schedule 33 for ldaho Power to
provide electric service to the Simplot Facility
7.2. Power Factor. During the first twelve-month period after the
contract is approved, when the Simplot Facility's adjusted power factor is less than g0
percent during the 15-consecutive-minute period of maximum use for the monthly billing
period as measured by ldaho Power, ldaho Power will adjust the Billing Demand by
multiplying the metered demand in kilowatts by 0.90 and dividing that product by the
adjusted power factor. After this period, when the Simplot Facility's adjusted power
factor is less than 95 percent during the 1S-consecutive-minute period of maximum use
for the monthly billing period as measured by ldaho Power, ldaho Power will adjust the
Billing Demand by multiplying the metered demand in kilowatts by 0.95 and dividing that
product by the adjusted power factor. The reactive component of the adjusted power
factor is comprised of the reactive load plus the 138112.5 kV transformer reactive losses
reduced by the amount of reactive correction paid for by Simplot.
7.3. Billinq and Meterinq Provisions. Billing Demand at the Simplot
Facility shall be determined on a 15 minute coincidental basis as measured by ldaho
Power and shall be paid by Simplot accordingly. ldaho Power will install suitable
metering equipment so that coincident Billing Demand and energy consumption can be
determined for the billing period. ldaho Power shall make 15-minute interval period
energy use data available to Simplot for data and billing analysis purposes. Data can
be provided by pulse output at the metering location in the substation and/or as an
electronic file at the time of billing. Simplot would be responsible for the installation and
maintenance associated with retrieving the meter pulse output and transmitting it from
the substation to their end use location. ldaho Power will allow Simplot to install and
maintain power quality meters in the substation metering circuits to provide for their
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power quality monitoring needs. The installation and maintenance of the Simplot power
quality meters and any remote communication equipment for those meters is the sole
responsibility of Simplot. Access to the station to service or maintain their equipment will
be facilitated by ldaho Power with 48 hours notice.
SECTION 8 _ PAYMENT OF BILLS/SETTLEMENTS
8.1. Billinq Data. Simplot shall pay ldaho Power for all services and work
provided under this Agreement. lnvoices for payment for electric services shall be
prepared and submitted to Simplot monthly. All invoices or bills shall contain such data
as ldaho Power deems reasonably required to substantiate the billing, including without
limitation, statements of the meter reading at the beginning and end of the billing period,
meter constants, and consumption during the billing period.
8.2. Pavment Procedure. Simplot shall pay all invoices hereunder within
fifteen (15) days following Simplot's receipt of such invoice. Simplot shall make payment
by electronic transfer of funds to a location designated by ldaho Power. ldaho Power will
provide Simplot with current ABA routing numbers and other necessary instructions to
facilitate the electronic transfer of funds. Late payment charges will be assessed in
accordance with ldaho Power's then-current Rule G and Schedule 66.
SECTION 9 - ACCESS TO PREMISES
During the term of this Agreement, and for a reasonable period deemed
necessary by ldaho Power following termination, Simplot hereby grants ldaho Power,
without cost to ldaho Power, a perpetual easement (unless terminated in accordance with
Section 3 herein) to access the Simplot Facility premises and other related areas at all
times for the purposes of operating ldaho Power facilities, making installations, repairing
and removing ldaho Power equipment, and for other purposes deemed necessary by
ldaho Power to perform work under this Agreement. ldaho Power will make reasonable
efforts to notify Simplot prior to accessing Simplot Facility premises, acknowledging
however, that timeliness in accessing the equipment may be of high importance.
SECTION 1O _ ASSIGNMENT
This Agreement shall be binding upon the heirs, legal and personal
representatives, successors and assigns of the parties hereto. Simplot shall not assign
any part of this Agreement without the express written consent of ldaho Power, which
shall not be unreasonably withheld.
SECTION 11 _ INDEMNIFICATION. LIMITATION OF LIABILITY. AND EXCLUSIVITY
OF WARRANTIES
11.1. lf one of the Parties is negligent related to this Agreement
("Negligent Party") and that negligence causes liability, liens, suits, loss, damage,
claims, actions, costs, and expenses of any nature (collectively "Damages"), the
Negligent Party agrees to protect, defend, indemnify and hold harmless the other party
and its successors and their officers, directors, employees, affiliates, and agents, from,
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for, and against any and all Damages resulting from the negligence, whether actual or
merely alleged, including court costs and attorney's fees. lf both parties are negligent,
they shall be responsible for resulting Damages in proportion to their negligence.
11.2, EACH PARTY EXPRESSLY AGREES THAT NEITHER PARTY NOR
ITS AFFILIATES WILL UNDER ANY CIRCUMSTANCES BE LIABLE UNDER ANY
THEORY OF RECOVERY, WHETHER BASED tN CONTRACT, tN TORT (|NCLUD|NG
NEGLIGENCE AND STRICT LIABILITY), UNDER WARRANTY, OR OTHERWISE, FOR:
ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE OR
PUNITIVE DAMAGES WHATSOEVER; LOSS OF PROFITS OR REVENUE; LOSS OF
USE OF MATERIAL OR EQUIPMENT; On INCREASED COSTS OF CAPITAL AND
FUEL COST; PROVIDED, HOWEVER, THAT NOTHING lN THIS PARAGRAPH 11.2
SHALL BE CONSTRUED TO LIMIT SIMPLOT'S PAYMENT OBLIGATIONS TO IDAHO
POWER.
11.3. EACH PARTY AGREES UNDER NO CIRCUMSTANCES SHALL THE
TOTAL AGGREGATE CLAIMS AGAINST AND LIABILITY OF THE OTHER PARTY FOR
DIRECT DAMAGES, UNDER ANY THEORY OF RECOVERY, WHETHER BASED IN
CoNTRACT, tN TORT (tNCLUDING NEGLIGENCE AND STRTCT LtABtL!TY), OR
oTHERWISE, EXCEED ONE HUNDRED FIFTY PERCENT (150%) OF THE TOTAL
CHARGES PAID BY SIMPLOT TO IDAHO POWER UNDER THIS CONTRACT UNDER ANY
GIVEN CALENDAR YEAR; PROVIDED, HOWEVER, THAT THIS LIMITATION OF LIABILITY
SHALL NOT LIMIT SIMPLOT'S PAYMENT OBLIGATIONS TO IDAHO POWER UNDER THIS
AGREEMENT.
11.4. EXCEPT AS PROVIDED IN THIS AGREEMENT, IDAHO POWER
MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING WITHOUT
LIMITATION, THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO THE WORK AND SERVICES PROVIDED
HEREUNDER.
SECTION 12 _ MODIFICATIONS OF CONTRACT
This Agreement represents the entire understanding and agreement
between the Parties with respect to the subject matter of this Agreement. The Parties
may amend or modify this Agreement only by a written instrument executed by the
Parties.
SECTION 13 - COMMISSION JURISDICTION
13.1. This Agreement and the respective rights and obligations of the
Parties hereunder, shall be subject to (1) ldaho Power's General Rules and Regulations
as now or hereafter in effect and on file with the Commission, and (2) to the jurisdiction
and regulatory authority of the Commission and the laws of the State of ldaho.
13.2. ldaho Power and Simplot agree that the rates set forth in this
Agreement and the then-current Schedule 33 are subject to the continuing jurisdiction of
the ldaho Public Utilities Commission ("Commission"). ldaho Power and Simplot agree
that the rates under this Agreement are subject to change and revision by order of the
Commission upon a finding, supported by substantial competent evidence, that such rate
change or revision is just, fair, reasonable, sufficient, non-preferential, and
nondiscriminatory. lt is the Parties' intention by such provision that the rate making
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An IDACORP Companv
standards to be used in making any revisions or changes in rates, and the judicial review
of any revisions or chariges in rates, will be the same standards that are applicable to
ldaho Power intrastate tariff rates.
This Agreement
approval by the Commission
condition.
Any provisions of this Agreement
surviving the completion and/or termination on
completion and/or termination.
SECTION 14 - COMMISSION APPROVAL
subject to, and shall become effective upon, the
all terms and provisions hereof without change or
IS
of
SECTION 15 _ FORCE MAJEURE
As used in this Agreement, "Force Majeure" or "an event of Force Majeure"
means any cause beyond the control of a Party which, despite the exercise of due
diligence, such Party is unable to prevent or overcome. Force Majeure includes, but is
not limited to, acts of God, fire, flood, storms, wars, hostilities, civil strife, strikes and
other labor disturbances, earthquakes, fires, lightning, epidemics, sabotage, or changesin law or regulation occurring after the effective date, which, by the exercise of
reasonable foresight such party could not reasonably have been expected to avoid and
by the exercise of due diligence, it shall be unable to overcome. lf either Party is
rendered wholly or in part unable to perform its obligations under this Agreement
because of an event of Force Majeure, both Parties shall be excused from whatever
performance is affected by the event of Force Majeure that: (1) The non-performing
Party shall, as soon as is reasonably possible after the occurrence of the event of Force
Majeure, give the other Party written notice describing the particulars of the occurrence.(2) The suspension of performance shall be of no greater scope and of no longer
duration than is required by the event of Force Majeure. (3) No obligations of either
Party which arose before the occurrence causing the suspension of performance and
which could and should have been fully performed before such occurrence shall be
excused as a result of such occurrence.
SECTION 16 - BREACH REMEDIES
lf a Party materially breaches this Agreement, the non-breaching Party
may provide Notice to the breaching Party. lf the breaching Party does not cure the
default within thirty (30) calendar days (ten (10) calendar days in the case of a breach of
the payment terms herein) of such notice, the non-breaching Party shall have the right to
terminate this Agreement and/or terminate service in accordance with the Commission's
Utility Customer Relations Rules. Failure to pay in accordance with this Agreement shall
constitute a material breach.
SECTION 17 - SURV]VAL
that may be reasonably interpreted as
of this Agreement shall survive such
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SECTION 18 - MISCELLANEOUS
18.1. Whenever possible, each provision of this Agreement shall be
interpreted so as to be effective and valid under applicable law. lf any provision is
adjudged to be invalid, the remaining provisions in this Agreement shall remain in force.
18.2. Waivers of any right, privilege, claim, obligation, or condition shall
be in writing and signed by the waiving Party. No waiver by a Party of any breach of this
Agreement shall be a waiver of any preceding or succeeding breach, and no waiver by a
Party of any right under this Agreement shall be construed as a waiver of any other right.
18.3. ln the event that legal action in court arises between the Parties
relating to this Agreement, the prevailing Party shall be entitled to recover attorney's
fees and costs incurred in prosecution or defense of the legal action (including without
limitation any fees on appeal).
18.4. No persons or entities shall be or shall be deemed to be third-party
beneficiaries of this Agreement.
18.5. Simplot shall comply with all applicable federal, state, and
laws, including without limitation, ldaho Power's tariff approved by the Commission.
18.6. Neither Party
employee of the other Party.
be deemed an agent, partner, joint venturer, or
IDAHO POWER COMPANY
Date:
J.R. SIMPLOT COMPANY
By: Michael Johnston, Vice President
Date:
By:
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-13-23
IDAHO POWER COMPANY
ATTAGHMENT 2
TARIFF
ldaho Power Company
!.P.U.C. No. 29. Tariff No. 101 Oriqinal Sheet No. 33-1
SCHEDULE 33
IDAHO POWER COMPANY
ELECTRIC SERVICE RATE
FOR
J. R. SIMPLOT COMPANY
CALDWELL. IDAHO
SPECIAL CONTRACT DATED DECEMBER XX. 2013
SUMMER AND NON-SUMMER SEASONS
The summer season begins on June 1 of each year and ends on August 31 of each year. The
non-summer season begins on September 1 of each year and ends on May 31 of each year.
MONTHLY CHARGE
The Monthly Charge is the sum of the following charges, and may also include charges as set
forth in Schedule 55 (Power Cost Adjustment), Schedule 91 (Energy Efficiency Rider), and Schedule 95
(Adjustment for Municipal Franchise Fees).
Summer Non-Summer
Contract Demand Charoe
per kW of Contract Demand $2.62 $2.62
Demand Charoe
per kW of Billing Demand but no less
than the Contract Demand less 10,000 kW $13.76 $7.53
Daily Excess Demand Charoe
per each kW over the Contract Demand $1.047 $1.047
Energv Charqe
per kWh $0.023442 $0.022994
IDAHO lssued by IDAHO POWER COMPANY
lssued per Order No. Gregory W. Said, Vice President, Regulatory Affairs
Effective - January 1,2014 1221 West ldaho Street, Boise, ldaho