20161101Application.pdf

DONOVAN E. WALKER
Lead Counsel
[e-mail]
November 1, 2016
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
PECE IVED
Re: Case No. IPC-E-16-25
H K Hydro LLC -Mud Creek S&S Hydro Project
An IDACORP company
Idaho Power Company's Application Regarding Energy Sales Agreement
Dear Ms. Jewell:
Enclosed for filing in the above matter please find an original and seven (7)
copies of Idaho Power Company's Application.
DEW:csb
Enclosures
~lUtA__
Donovan E. Walker
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
) CASE NO. IPC-E-16-25
H K HYDRO LLC FOR THE SALE AND
PURCHASE OF ELECTRIC ENERGY
FROM THE MUD CREEK S&S HYDRO
PROJECT.
)
) APPLICATION
)
)
)
)
________________ )
Idaho Power Company ("Idaho Power" or "Company"), in accordance with RP 52
and the applicable provisions of the Public Utility Regulatory Policies Act of 1978
("PURPA"), hereby respectfully applies to the Idaho Public Utilities Commission
("Commission") for an order accepting or rejecting the Energy Sales Agreement ("ESA"
or "Agreement") between Idaho Power and H K Hydro LLC ("H K Hydro" or "Seller")
under which H K Hydro would sell and Idaho Power would purchase electric energy
generated by the Mud Creek S&S hydro project ("Facility") located near Buhl, Idaho.
This request is for a new ESA applicable to an existing project.
APPLICATION - 1
In support of this Application, Idaho Power represents as follows :
I. INTRODUCTION
1. Mud Creek S&S currently has a PURPA ESA with Idaho Power for this
Facility that was executed on October 30, 1981, and was approved by Commission
Order No. 15746. The expiration date of the 1981 ESA is February 19, 2017.
2. The ESA submitted herewith is a new contract for the same Qualifying
Facility ("QF") for a new term and with currently applicable terms and conditions. This
ESA complies with the Commission's Order Nos. 32697, 32737, and 32802 from Case
No. GNR-E-11-03. The ESA contains published rates for projects of 10 average
megawatts ("aMW") or less pursuant to Commission Order No. 33538 from Case No.
IPC-E-16-12. Because the Facility is an existing QF whose previous agreement with
Idaho Power is expiring (replacement contract), the ESA contains capacity payments for
the entire term of the Agreement, with no sufficiency period. Pursuant to the
Commission's direction in its Reconsideration Order No. 32737, the rates were
calculated by Commission Staff for a QF in the "non-seasonal hydro" category pursuant
to the surrogate avoided resource ("SAR") avoided cost methodology.
3. The ESA, dated October 5, 2016, was signed by HK Hydro on September
8, 2016, and was signed by Idaho Power on October 5, 2016. The ESA was executed
in compliance with the Commission's orders directing the implementation of PURPA for
the state of Idaho, and contains avoided cost rates pursuant to the Commission's Order
No. 33538.
II. BACKGROUND
4. Sections 201 and 210 of PURPA, and pertinent regulations of the Federal
Energy Regulatory Commission ("FERC"), require that regulated electric utilities
purchase power produced by cogenerators or small power producers that obtain QF
APPLICATION - 2
status. The rate a QF receives for the sale of its power is generally referred to as the
avoided cost rate and is to reflect the incremental cost to an electric utility of electric
energy or capacity or both, which, but for the purchase from the QF, such utility would
generate itself or purchase from another source. The Commission has authority under
PURPA Sections 201 and 210 and the implementing regulations of FERC, 18 C.F.R.
§ 292, to set avoided costs, to order electric utilities to enter into fixed-term obligations
for the purchase of energy from QFs, and to implement FERC rules.
5. On December 18, 2012, the Commission issued Order No. 32697, which
established parameters for published and negotiated avoided cost rate calculations.
The Commission further established and defined numerous contract terms and
conditions for standard power purchase agreements entered into between regulated
utilities and QFs. On January 2, 2013, the Commission issued Errata to Order No.
32697, which corrected published avoided cost rates to include energy payments not
discounted by transmission and line loss. Then the Commission issued
Reconsideration Order Nos. 32737 and 32802 on February 5, 2013, and May 5, 2013,
respectively, which further clarified certain terms and conditions of power purchase
agreements. Most recently, in Order No. 33377, the Commission directed Idaho Power
to utilize July 2024 as its first capacity deficit in the Company's SAR methodology,
effective September 15, 2015. However, because this ESA is a replacement contract,
its rates contain capacity payment for the entire contract term.
Ill. THE ENERGY SALES AGREEMENT
6. On October 5, 2016, Idaho Power and H K Hydro entered into an ESA
pursuant to the terms and conditions of the various Commission orders applicable to
this PURPA agreement for a "non-seasonal hydro" project. A copy of the ESA is
attached to this Application as Attachment 1. Under the terms of this ESA, H K Hydro
APPLICATION -3
elected to contract with Idaho Power for a 20-year term using the non-levelized, non­
seasonal hydro published avoided cost rates as currently established by the
Commission in Order No. 33538 for replacement contracts and for energy deliveries of
less than 10 aMW. This ESA was executed by H K Hydro on September 8, 2016. It
was subsequently executed by Idaho Power on October 5, 2016, and now filed for the
Commission 's review.
7. Prior to the Effective Date of this ESA, this Facility has been delivering
energy to Idaho Power in accordance with an energy sales agreement dated October
30, 1981 , that expires on February 19, 2017. H K Hydro proposes to continue to
operate and maintain a 520 kilowatt ("kW") (Maximum Capacity Amount, paragraph B-4,
Appendix B) energy facility located near Buhl, Idaho. The Facility is a QF under the
applicable provisions of PURPA.
8. The nameplate rating of this Facility is 520 kW. As defined in paragraph
1.23 and paragraph 4.1.4 of the ESA, H K Hydro will be required to provide data on the
Facility that Idaho Power will use to confirm that under normal and/or average
conditions, the Facility will not exceed 10 aMW on a monthly basis. Furthermore, as
described in paragraph 7.5 of the ESA, should the Facility exceed 10 aMW on a
monthly basis, Idaho Power will accept the energy (Inadvertent Energy) that does not
exceed the Maximum Capacity Amount, but will not purchase or pay for this Inadvertent
Energy.
9. As the Facility is already interconnected and selling energy to Idaho
Power, the ESA specifies a Scheduled First Energy Date and Scheduled Operation
Date for this Facility of February 20, 2017, but shall be no later than 120 days after a
Commission final, non-appealable order has been issued approving this Agreement.
See Appendix B. As specified in Articles IV and V of this ESA, the parties recognize
APPLICATION - 4
that information provided under the previous agreement may still be applicable to this
replacement ESA. As specified in the ESA, Idaho Power shall review the previously
provided information and will accept the information as previously submitted, request
updates to that information, and/or require new information to satisfy compliance with
the various requirements for the Seller to be granted a First Energy Date and Operation
Date for this replacement ESA. In addition, Idaho Power will monitor the ongoing
requirements through the full term of this ESA.
10. The ESA provides that all applicable interconnection charges and monthly
operational or maintenance charges under Schedule 72 will be assessed to Seller. A
Schedule 72 Generator Interconnection Agreement, or "GIA," between H K Hydro and
Idaho Power was executed on October 31, 2016. PURPA QF generation must be
designated as a network resource ("DNR") to serve Idaho Power's retail load on its
system. In order for the Facility to maintain its DNR status, there must be a power
purchase agreement associated with its transmission service request in order to
maintain compliance with Idaho Power's non-discriminatory administration of its Open
Access Transmission Tariff (OATI) and maintain compliance with FERC requirements.
11. Article 21 of the ESA provides that the ESA will not become effective until
the Commission has approved all of the ESA's terms and conditions and declared that
all payments Idaho Power makes to H K Hydro for purchases of energy will be allowed
as prudently incurred expenses for ratemaking purposes.
IV. MODIFIED PROCEDURE
12. Idaho Power believes that a hearing is not necessary to consider the
issues presented herein and respectfully requests that this Application be processed
under Modified Procedure; i.e., by written submissions rather than by hearing. RP 201
APPLICATION - 5
et seq. If, however, the Commission determines that a technical hearing is required, the
Company stands ready to prepare and present its testimony in such hearing.
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
13. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
Donovan E. Walker
Lead Counsel
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
[e-mail]
Randy C. Allphin
Energy Contracts Leader
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
VI. REQUEST FOR RELIEF
14. Idaho Power respectfully requests that the Commission issue an order:
(1) authorizing that this matter may be processed by Modified Procedure; (2) accepting
or rejecting the ESA between Idaho Power and H K Hydro, without change or condition;
and, if accepted, (3) declaring that all payments for purchases of energy under the ESA
between Idaho Power and H K Hydro be allowed as prudently incurred expenses for
ratemaking purposes.
Respectfully submitted this 1st day of November 2016.
Attorney for Idaho Power Company
APPLICATION - 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 1st day of November 2016 I served a true and
correct copy of the within and foregoing APPLICATION upon the following named
parties by the method indicated below, and addressed to the following:
HK Hydro LLC
Owen H. Orndorff
ORNDORFF LAW OFFICES
1087 West River Street, Suite 230
Boise, Idaho 83702
Stephen Harmsen
HK Hydro LLC
26 North State Street
Salt Lake City, Utah 84111
APPLICATION - 7
Hand Delivered
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FAX
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Christa Bearry, Legal Assist
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-16-25
,
IDAHO POWER COMPANY
ATTACHMENT 1
Article
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ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
HK HYDRO LLC
TABLE OF CONTENTS
TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale of Net Energy
Purchase Price and Method of Payment
Environmental Attributes
Facility and interconnection
Metering, Metering Communications and SCADA Telemetry
Records
Operations
Indemnification and Insurance
Force Majeure
Liability; Dedication
Several Obligations
Waiver
Choice of Laws and Venue
Disputes and Default
Governmental Authorization
Commission Order
Successors and Assigns
Modification
Taxes
Notices and Authorized Agents
Additional Terms and Conditions
Severabi I ity
Counterparts
Entire Agreement Signatures
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer's Certifications
Non Seasonal Hydro Facility Energy Prices
Insurance Requirements
ENERGY SALES AGREEMENT
(Non Seasonal Hydro Facility 10 average ~onthly MW or Less)
Project Name: Mud Creek S&S
Project Number: 3 1515005
.f:h
THIS ENERGY SALES AGREEMENT ("AGREEMENT"), entered into on this ~ day of
Qe,./-Dbev 20~etween HK HYDRO LLC (Seller), and IDAHO POWER COMPANY, an Idaho
corporation (Idaho Power), hereinafter sometimes referred to collectively as "Parties" or individually as
"Party."
WITNESS ETH :
WHEREAS, Seller owns, maintains and operates a PURPA Qualifying Facility; and
WHEREAS, Seller wishes to sell, and Idaho Power is required to purchase, electric energy
produced by a PURPA Qualifying Facility.
THEREFORE, In consideration of the mutual covenants and agreements hereinafter set forth, the
Parties agree as follows:
ARTICLE l: DEFlNITIONS
As used in this Agreement and the appendices attached hereto, the following terms
shall have the following meanings:
1.1 "Adjusted Estimated Net Energy Amount" -the Estimated Net Energy Amount specified in
paragraph 6.2 including any adjustments that have been made in accordance with paragraphs
6.2.2, 6.2.3 or 6.2.4.
1.2 "Authorized Agent" - a person or persons specified within paragraph 25.2 of this Agreement as
being authorized and empowered, for and on behalf of the Seller, to execute instruments,
agreements, certificates, and other documents (collectively "Documents") and to take actions on
behalf of the Seller, and that [daho Power Company and its directors, officers, employees, and
agents are entitled to consider and deal with such persons as agents of the Seller for all purposes,
1
until such time as an authorized officer of the Seller shall have delivered to Idaho Power
Company a notice in writing stating that such person is and shall no longer be an agent on behalf
of the Seller. Any Documents executed by such persons shall be deemed duly authorized by the
Seller for all purposes.
1.3 "Base Energy" -Monthly Net Energy less any Surplus Energy as calculated in paragraph 1.41 .
1.4 "Commission" -The Idaho Public Utilities Commission.
1.5 "Contract Year" -The period commencing each calendar year on the same calendar date as the
Operation Date and ending 364 days thereafter.
1.6 "Delay Cure Period" -120 days immediately following the Scheduled Operation Date.
1.7 "Delay Damages" -Shall be calculated monthly and shall be -The Estimated Net Energy
Amounts provided as of the Effective Date of this Agreement as specified in paragraph 6.2.1
divided by the number of days in the current month multiplied by the number of days in the Delay
Period in the current month multiplied by the current month 's Delay Price.
1.8 "Delay Period" -All days past the Scheduled Operation Date until the Seller's Facility achieves
the Operation Date or the Agreement is terminated by Idaho Power.
1.9 "Delay Price" -The current month's Mid-Columbia Market Energy Cost minus the current
month 's All Hours Energy Price as specified in Appendix D of this Agreement. If this
calculation results in a value less than 0, the result of this calculation will be 0.
1.10 "Designated Network Resource (DNR)" - A resource that is designated for Idaho Power network
load and does not include any resource, or any portion thereof, that is committed for sale to third
parties or otherwise cannot be called upon to meet Idaho Power's network load.
1.11 "Designated Dispatch Facility" -Idaho Power's Load Serving Operations, or any subsequent
group designated by Idaho Power.
1.12 "Effective Date" -The date stated in the opening paragraph of this Energy Sales Agreement
representing the date upon which this Energy Sales Agreement was fully executed by both
Parties.
2
1.13 "Environmental Attributes" -means any and all credits, benefits, emissions reductions, offsets,
and allowances, howsoever entitled, attributable to the generation from the Facility, and its
avoided emission of pollutants. Environmental Attributes include but are not limited to: ( 1) any
avoided emission of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen
oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon
dioxide (CO2), methane (CH4), nitrous oxide, hydrotluorocarbons, pertluorocarbons, sulfur
hexafluoride and other greenhouse gases (GHGs) that have been determined by the United
Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the
actual or potential threat of altering the Earth's climate by trapping heat in the atmosphere;1 (3)
the reporting rights to these avoided emissions, such as REC Reporting Rights. REC Reporting
Rights are the right of a REC purchaser to report the ownership of accumulated RECs in
compliance with federal or state law, if applicable, and to a federal or state agency or any other
party at the REC purchaser's discretion, and include without limitation those REC Reporting
Rights accruing under Section 1605(b) of The Energy Policy Act of 1992 and any present or
future federal , state, or local law, regulation or bill, and international or foreign emissions trading
program. RECs are accumulated on a MWh basis and one REC represents the Environmental
Attributes associated with one (I) MWh of energy. Environmental Attributes do not include (i)
any energy, capacity, reliability or other power attributes from the Facility, (ii) production tax
credits or investment tax credits associated with the construction or operation of the Facility and
other financial incentives in the form of credits, reductions, or allowances associated with the
Facility that are applicable to a state or federal income taxation obligation, (iii) the cash grant in
lieu of the investment tax credit pursuant to Section 1603 of the American Recovery and
Reinvestment Act of 2009, or (iv) emission reduction credits encumbered or used by the Facility
for compliance with local, state, or federal operating and/or air quality permits.
Avoided emissions may or may not have any value for GHG compliance purposes. Although avoided
emissions are included in the list of Environmental Attributes, this inclusion does not create any right to use those
avoided emissions to comply with any GHG regulatory program.
3
1.14 "Facility" -That electric generation facility described in Appendix B of this Agreement
1.15 "Facility Nameplate Capacity" -The sum of the individual Generation Unit Nameplate
Capacity's that are installed at this Facility.
1.16 "First Energy Date" -The day commencing at 00:0 I hours, Mountain Time, following the day
that Seller has satisfied the requirements of Article IV and after the Seller requested First Energy
Date.
1.17 "Forced Outage" -a partial or total reduction of a) the Facility's capacity to produce and/or
deliver Net Energy to the Point of Delivery, orb) Idaho Power's ability to accept Net Energy at
the Point of Delivery for non-economic reasons, as a result of Idaho Power or Facility: I)
equipment failure which was not the result of negligence or lack of preventative maintenance, or
2) responding to a transmission provider curtailment order, or 3) unplanned preventative
maintenance to repair equipment that left unrepaired, would result in failure of equipment prior
to the planned maintenance period, or 4) planned maintenance or construction of the Facility or
electrical lines required to serve this Facility, or 5) icing events within the immediate water
source used as the Facility's primary motive force that causes the Facility to reduce energy
production.
1.18 "Generation Interconnection Agreement (GlA)" -The interconnection agreement that specifies
terms, conditions and requirements of interconnecting to the Idaho Power electrical system,
which will include but not be limited to all requirements as specified by Schedule 72.
1.19 "Generation Unit" -a complete hydro electrical generation system within the Facility that is able
to generate and deliver energy to the Point of Delivery independent of other Generation Units
within the same Facility.
1.20 "Heavy Load Hours (HL)" -The daily hours, applicable to energy deliveries, from hour ending
0700 -2200 Mountain Time, ( 16 hours) excluding al I hours on al I Sundays, New Years Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
1.21 "Inadvertent Energy" -Electric energy Seller does not intend to generate. Inadvertent energy is
more particularly described in paragraph 7.5 of this Agreement.
4
1.22 "Interconnection Facilities" -All equipment specified in the GIA.
1.23 "Initial Capacity Determination" -The process by which Idaho Power confirms that under
normal or average design conditions the Facility will generate at no more than IO average
megawatts (MW) per month and is therefore eligible to be paid the published rates in accordance
with Commission Order No. 33538 and Order No. 32697 (page 21 , full capacity payments for
replacement contracts).
1.24 "Light Load Hours (LL)" -The daily hours from hour ending 2300 -0600 Mountain Time (8
hours), plus all other hours on all Sundays, New Years Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas.
1.25 "Losses" -The loss of electrical energy expressed in kilowatt hours (kWh) occurring as a result
of the transformation and transmission of energy between the point where the Facility's energy is
metered and the Facility's Point of Delivery. The loss calculation formula will be as specified in
Appendix B of this Agreement.
l.26 "Market Energy Reference Price" -Eighty-five percent (85%) of the Mid-Columbia Market
Energy Cost.
1.27 "Material Breach" - A Default (paragraph 19 .2.1) subject to paragraph 19 .2.2.
1.28 "Maximum Capacity Amount" -The maximum capacity (MW) of the Facility will be as
specified in Appendix B of this Agreement.
1.29 "Mid-Columbia Market Energy Cost" -is 82.4% of the monthly arithmetic average of each
day's Intercontinental Exchange ("ICE") daily firm Mid-C Peak Avg and Mid-C Off-Peak
Avg index prices in the month as follows:
The actual calculation being:
n
.824 * ( I {(ICE Mid-C Peak Avg,* HL hours for day)+
X=I
(ICE Mid-C Off-Peak Avg,* LL hours for day)}/ (n*24))
where n = number of days in the month
5
If the ICE Mid-C lndex prices are not reported for a particular day or days, prices derived from the
respective averages of HL and LL prices for the immediately preceding and following reporting
periods or days shall be substituted into the formula stated in this definition and shall therefore be
multiplied by the appropriate respective numbers of HL and LL Hours for such particular day or
days with the result that each hour in such month shall have a related price in such formula. If the
day for which prices are not reported has in it only LL Hours (for example a Sunday), the respective
averages shall use only prices reported for LL hours in the immediately preceding and following
reporting periods or days. If the day for which prices are not reported is a Saturday or Monday or is
adjacent on the calendar to a holiday, the prices used for HL Hours shall be those for HL hours in
the nearest (forward or backward) reporting periods or days for which HL prices are reported.
If the ICE Mid-C Index reporting is discontinued by the reporting agency, both Parties will
mutually agree upon a replacement index, which is similar to the ICE Mid-C Index. The selected
replacement index will be consistent with other similar agreements and a commonly used index
by the electrical industry.
1.30 "Monthly Nameplate Energy" -Facility Nameplate Capacity (kW) multiplied by the hours in the
applicable month.
1.3 I "Nameplate Capacity" -The full-load electrical quantities assigned by the designer to a
Generation Unit and its prime mover or other piece of electrical equipment, such as transformers
and circuit breakers, under standardized conditions, expressed in amperes, kilovolt-amperers,
kilowatts, volts or other appropriate units. Usually indicated on a nameplate attached to the
individual machine or device. This value is established for the term of this Agreement in
Appendix B, item B-1 of this Agreement and validated in paragraph 4.1.4 of this Agreement.
1.32 "Net Energy" -All of the electric energy produced by the Facility, less Station Use and Losses,
expressed in kilowatt hours (kWh) delivered by the Facility to Idaho Power at the Point of
Delivery. Subject to the terms of this Agreement, Seller commits to deliver all Net Energy to
6
Idaho Power at the Point of Delivery for the full term of the Agreement. Net Energy does not
include Inadvertent Energy.
1.33 "Operation Date" -The day commencing at 00:0 I hours, Mountain Time, following the day that
all requirements of paragraph 5.2 have been completed and after the Seller requested Operation
Date.
1.34 "Point of Delivery" -The location specified in the GIA and referenced in Appendix 8 , where
Idaho Power's and the Seller's electrical facilities are interconnected and the energy from this
Facility is delivered to the Idaho Power electrical system.
1.35 "Prudent Electrical Practices" -Those practices, methods and equipment that are commonly and
ordinarily used in electrical engineering and operations to operate electric equipment lawfully,
safely, dependably, efficiently and economically.
1.36 "Renewable Energy Certificate" or "REC" means a certificate, credit, allowance, green tag, or
other transferable indicia, howsoever entitled, indicating generation of renewable energy by the
Facility, and includes all Environmental Attributes arising as a result of the generation of
electricity associated with the REC. One REC represents the Environmental Attributes associated
with the generation of one thousand (1,000) kWh of Net Energy.
1.3 7 "Scheduled Operation Date" -The date specified in Appendix B when Seller anticipates
achieving the Operation Date. It is expected that the Scheduled Operation Date provided by the
Seller shall be a reasonable estimate of the date that the Seller anticipates that the Seller's Facility
shall achieve the Operation Date.
1.38 "Schedule 72" -Idaho Power's Tariff No IO I, Schedule 72 or its successor schedules as
approved by the Commission.
1.39 "Season" -The three periods identified in paragraph 6.2.1 of this Agreement.
1.40 "Station Use" -Electric energy that is used to operate equipment that is auxiliary or otherwise
related to the production of electricity by the Facility.
1.41 "Surplus Energy" -Is (I) Net Energy produced by the Seller's Facility and delivered to the Idaho
Power electrical system during the month which exceeds 110% of the monthly Adjusted
7
Estimated Net Energy Amount for the corresponding month specified in paragraph 6.2, or (2) if
the Net Energy produced by the Seller's Facility and delivered to the Idaho Power electrical
system during the month is less than 90% of the monthly Adjusted Estimated Net Energy Amount
for the corresponding month specified in paragraph 6.2, then all Net Energy delivered by the
Facility to the Idaho Power electrical system for that given month, or (3) all Net Energy produced
by the Seller's Facility and delivered by the Facility to the Idaho Power electrical system prior to
the Operation Date, or (4) all monthly Net Energy that exceeds the Monthly Nameplate Energy.
1.42 "Termination Damages" -Financial damages the non-defaulting party has incurred as a result of
termination of this Agreement.
2.1
ARTICLE II: NO RELIANCE ON IDAHO POWER
Seller Independent Investigation -Seller warrants and represents to Idaho Power that in entering
into this Agreement and the undertaking by Seller of the obligations set forth herein, Seller has
investigated and determined that it is capable of performing hereunder and has not relied upon
the advice, experience or expertise of Idaho Power in connection with the transactions
contemplated by this Agreement.
2.2 Seller Independent Experts -All professionals or experts including, but not limited to, engineers,
attorneys or accountants, that Seller may have consulted or relied on in undertaking the
transactions contemplated by this Agreement have been solely those of Seller.
ARTICLE III: WARRANTIES
3.1 No Warranty by Idaho Power -Any review, acceptance or failure to review Seller's design,
specifications, equipment or facilities shall not be an endorsement or a confirmation by Idaho
Power and Idaho Power makes no warranties, expressed or implied, regarding any aspect of
Seller's design, specifications, equipment or facilities, including, but not limited to, safety,
durability, reliability, strength, capacity, adequacy or economic feasibility.
3.2 Qualifying Facility Status -Seller warrants that the Facility is a "Qualifying Facility," as that term
8
3.3
is used and defined in 18 CFR 292.20 I et seq. and Seller will take such steps as may be required
to maintain the Facility's Qualifying Facility status during the term of this Agreement and
Seller's failure to maintain Qualifying Facility status will be a Material Breach of this Agreement.
Idaho Power reserves the right to review the Facility's Qualifying Facility status and associated
support and compliance documents at anytime during the term of this Agreement.
FERC License / Exemption / Determination -Seller warrants that Seller possesses a valid license,
exemption from licensing, or a determination of a qualifying conduit hydropower facility
(pursuant to section 30 of the Federal Power Act) from the Federal Energy Regulatory
Commission ("FERC") for the Facility. Seller recognizes that Seller's possession and retention of
a valid FERC license, exemption, or a determination of a qualifying conduit hydropower facility
is a material part of the consideration for Idaho Power's execution of this Agreement. If
applicable, Seller will take such steps as may be required to maintain a valid FERC license,
exemption, or a determination of a qualifying conduit hydropower facility for the Facility during
the term of this Agreement, and Seller's failure to maintain a valid FERC license or exemption
will be a material breach of this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
4.1 Prior to the Effective Date of this Agreement, this Facility has been delivering energy to Idaho
Power in accordance with an Energy Sales Agreement dated October 30, 1981 that expires on
February 19, 2017, and some of the requirements of this Article are similar to the requirements of
that previous Agreement. Prior to the First Energy Date and as a condition of Idaho Power's
acceptance of deliveries of energy from the Seller under this Agreement, Idaho Power shall
review the previously provided information and at Idaho Power's sole discretion may I) accept
the previously provided information as meeting the requirements of this Article or, 2) require
updates to the previously provided information or 3) require the Seller to provide new
information to complete the following requirements.
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4.1.1 Submit proof to Idaho Power that all licenses, permits, determinations and approvals
necessary for Seller's operations have been obtained from applicable federal, state or
local authorities, including, but not limited to, evidence of compliance with Subpart B, 18
CFR 292.201 et seq. as a certified Qualifying Facility.
4.1.2 Opinion of Counsel -Submit to Idaho Power an opinion letter signed by an attorney
admitted to practice and in good standing in the State of Idaho providing an opinion that
Seller's licenses, permits, determinations and approvals as set forth in paragraph 4.1.1
above are legally and validly issued, are held in the name of the Seller and, based on a
reasonable independent review, counsel is of the opinion that Seller is in substantial
compliance with said permits as of the date of the Opinion Letter. The opinion letter will
be in a form acceptable to Idaho Power and will acknowledge that the attorney rendering
the opinion understands that Idaho Power is relying on said opinion. Idaho Power's
acceptance of the form will not be unreasonably withheld. The opinion letter will be
governed by and shall be interpreted in accordance with the legal opinion accord of the
American Bar Association Section of Business Law ( 1991 ).
4.1.3 Commission Approval -Confirm with Idaho Power that Commission approval of this
Agreement in a form acceptable to Idaho Power has been received.
4.1.4 Initial Capacity Determination -Submit to Idaho Power such data as Idaho Power may
reasonably require to perform the Initial Capacity Determination. Such data will include
but not be limited to, Generation Unit Nameplate Capacity, equipment specifications,
prime mover data, resource characteristics, normal and/or average operating design
conditions and Station Use data. Upon receipt of this information, Idaho Power will
review the provided data and if necessary, request additional data to complete the Initial
Capacity Determination within a reasonable time.
4.1.4.1 If the Maximum Capacity Amount specified in Appendix B of this Agreement
and the cumulative manufacturer's Nameplate Capacity rating of the individual
Generation Units at this Facility does not exceed 10 MW, the Seller shall submit
10
the Nameplate Capacity ratings of the individual Generation Units to be installed
at this Facility. Upon verification by Idaho Power that the data provided
establishes the combined Nameplate Capacity rating of the Generation Units to
be installed at this Facility does not exceed IO MW, it will be deemed that the
Seller has satisfied the Initial Capacity Determination for this Facility.
4.1.4.2 If the Maximum Capacity or the cumulative manufacture's Nameplate Capacity
Rating of the individual Generation Units at this Facility exceeds IO MW, Idaho
Power will review all data submitted by Seller to determine if it is a reasonable
estimate that the Facility will not exceed IO average monthly MW in any month.
4.1.5 Nameplate Capacity -Submit to Idaho Power manufacturer's and engineering
documentation that establishes the Nameplate Capacity of each individual Generation Unit
that is included within this entire Facility. The sum of the individual Generation Unit
Capacity ratings shall be equal to Facility Nameplate Capacity. Upon receipt of this data,
Idaho Power shall review the provided data and determine if the Nameplate Capacity
specified is reasonable based upon the manufacturer's specified generation ratings for the
specific Generation Units.
4.1.6 Completion certificate -Submit a certificate executed by an authorized agent of the Seller
attesting that all mechanical and electrical equipment of the designated Generation Unit
has been completed to enable the Generation Unit to beginning testing and delivery of Test
Energy in a safe manner.
4.1 . 7 Insurance -Submit written proof to Idaho Power of all insurance required in Article XIII.
4.1 .8 Interconnection -Provide written confirmation from Idaho Power's business unit that
administers the GIA that Seller has satisfied all interconnection and testing requirements
that will enable the Facility to be safely connected to the Idaho Power electrical system.
4.1.9 Designated Network Resource (DNR) -Confirm that the Seller's Facility has completed
all of the requirements to be an Idaho Power DNR capable of delivering energy up to the
amount of the Maximum Capacity at the Point of Delivery.
11
4.1.9.1 As specified in Appendix B item 7 of this Agreement, the Seller's Facility must
have achieved the status of being an Idaho Power DNR prior to Idaho Power
accepting any energy from this Facility. Appendix B item 7 provides
information on the initial application process required to enable Idaho Power to
determine if network transmission capacity is available for this Facility's
Maximum Capacity Amount and/or if Idaho Power transmission network
upgrades will be required. The results of this study process and any associated
costs will be included in the GIA for this Facility.
4.1.9.2 After the Facility has completed all requirements of the GIA that enable the
Facility to come online and at least 30 days prior to the Scheduled First Energy
Date, Idaho Power will complete the process for approving the Seller's Facility
as an Idaho Power DNR. If the Seller estimates that the actual First Energy is
expected to be different then the Scheduled First Energy Date specified in
Appendix B of this Agreement, the Seller must notify Idaho Power of this revised
date no later than 30 days prior to Scheduled First Energy Date. The Facility
cannot deliver any energy to Idaho Power until it is approved as a DNR after
completing all the requirements of the GLA and complying with the requirements
of this Agreement.
4.1.10 Written Acceptance -Request and obtain written confirmation from Idaho Power that all
conditions to acceptance of energy have been fulfilled. Such written confirmation shall be
provided within a commercially reasonable time following the Seller's request and will
not be unreasonably withheld by Idaho Power.
ARTICLE V: TERM AND OPERATION DATE
5.1 Term -Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective on
the Effective Date and shall continue in ful I force and effect for a period of twenty (20) Contract
Years from the Operation Date.
12
5.2 Operation Date -Prior to the Effective Date of this Agreement, this Facility has been delivering
energy to Idaho Power in accordance with an Energy Sales Agreement dated October 301\ 1981
that expires on February 19, 2017, and some of the requirements of this Article are very similar to
the requirements of that previous Agreement. Idaho Power shall review the previously provided
information and at Idaho Power's sole discretion may 1) accept the previously provided information
as meeting the requirements of this Article or, 2) require updates to the previously provided
information or 3) require the Seller to provide new information to complete the following
requirements. A single Operation Date will be granted for the entire Facility and may occur only
after the Facility has achieved all of the following:
5.3
a) At a minimum, 75% of the Facility Nameplate Capacity as identified in Appendix B,
item, 8-1 has achieved First Energy Date.
b) Seller has demonstrated to Idaho Power's satisfaction that all mechanical and electrical
testing has been completed satisfactorily and the Facility is able to provide energy in a
consistent, reliable and safe manner.
c) Engineer's Certifications -Submit an executed Engineer's Certification of Design &
Construction Adequacy and an Engineer's Certification of Operations and Maintenance
(O&M) Policy as described in Commission Order No. 21690. These certificates will
be in the form specified in Appendix C but may be modified to the extent necessary to
recognize the different engineering disciplines providing the certificates.
d) Seller has requested an Operation Date from Idaho Power in a written format.
e) Seller has received written confirmation from Idaho Power of the Operation Date. This
confirmation will not be unreasonably withheld by Idaho Power.
Operation Date Delay -Seller shall cause the Facility to achieve the Operation Date on or before
the Scheduled Operation Date. Delays in the interconnection and transmission network upgrade
study, design and construction process (This includes any delay in making the required deposit
payments set forth in the Facility's GlA) that are not caused by Idaho Power or Force Majeure
13
events accepted by both Parties, shall not prevent Delay Damages or Termination Damages from
being due and owing as calculated in accordance with this Agreement.
5.4 Termination -If Seller fails to achieve the Operation Date prior to expiration of the Delay Cure
Period, such failure will be a Material Breach and Idaho Power may terminate this Agreement at
any time until the Seller cures the Material Breach.
5.5 Delay Damages billing and payment -Idaho Power shall calculate and submit to the Seller any
Delay Damages due Idaho Power within 15 days after the end of each month or within 30 days of
the date this Agreement is terminated by Idaho Power.
5.6 Termination Damages billing and payment -Idaho Power shall calculate and submit to the Seller
5.7
any Termination Damages due Idaho Power within 30 days after this Agreement has been
terminated .
Seller Payment -Seller shall pay Idaho Power any calculated Delay or Termination Damages within
7 days of when Idaho Power presents these billings to the Seller. Seller's failure to pay these
damages within the specified time will be a Material Breach of this Agreement.
ARTICLE VI: PURCHASE AND SALE OF NET ENERGY
6.1 Net Energy Purchase and Delivery-Except when either Party's performance is excused as provided
herein, Idaho Power will purchase and Seller will sell all of the Net Energy to Idaho Power at the
Point of Delivery. All Inadvertent Energy produced by the Facility will also be delivered by the
Seller to Idaho Power at the Point of Delivery.
6.2 Estimated Net Energy Amounts -Neither the monthly estimated Net Energy amounts provided as
of the Effective Date of this Agreement nor monthly Adjusted Estimated Net Energy Amounts
provided during the term of this Agreement shall exceed IO average monthly MW nor be greater
than the Maximum Capacity Amount (measured in kW) multiplied by the hours in the applicable
month.
14
6.2. 1 Monthly Estimated Net Energy Amounts provided as of the Effective Date of this
Agreement:
Month kWh
March 95,000
Season I April 60,000
May 50,000
July 70,000
August 100,000
Season 2 November 190,000
December 160,000
June 80,000
September 170,000
Season 3 October 250,000
January 130,000
February 95,000
6.2.2 Seller's Adjustment of Estimated Net Energy Amounts -Prior to the Operation Date, the Seller
may revise all of the previously provided monthly estimated Net Energy amounts by providing
written notice to Idaho Power in accordance with paragraph 25.1.
6.2.3 Seller's Adjustment of Estimated Net Energy Amounts After the Operation Date -After the
Operation Date, the Seller may revise any future monthly estimated Net Energy amounts by
providing written notice no later than 5 PM Mountain Standard time on the last business day of
the notification month specified in the following schedule:
Notification
Month
November
December
January
February
March
April
May
June
July
August
Future monthly Estimated Net Energy
Amounts eligible to be revised
15
January and any future months
February and any future months
March and any future months
April and any future months
May and any future months
June and any future months
July and any future months
August and any future months
September and any future months
October and any future months
September
October
November and any future months
December and any future months
a.) This written notice must be provided to Idaho Power in accordance with paragraph
25.1 or by electronic notice provided and verified via return electronic verification
of receipt to the electronic notices address specified in paragraph 25.1.
b.) Failure to provide timely written notice of changes to the Estimated Net Energy
Amounts will be deemed to be an election of no change from the most recently
provided monthly estimated Net Energy amounts.
6.2.3.1 Idaho Power Adjustment of Monthly Estimated Net Energy Amounts -If Idaho Power is
excused from accepting the Seller's Net Energy as specified in paragraph 12.2.1 or if the
Seller declares a Suspension of Energy Deliveries as specified in paragraph 12 .3.1 and the
Seller's declared Suspension of Energy Deliveries is accepted by Idaho Power, the monthly
estimated Net Energy amount as specified in paragraph 6.2 for the specific month in which
the reduction or suspension under paragraph 12.2.1 or 12.3.1 occurs will be temporarily
reduced in accordance with the following and only for the actual month in which the event
occurred:
Where:
NEA Current Month's Estimated Net Energy Amount (Paragraph 6.2)
SGU a.) If Idaho Power is excused from accepting the Seller's Net
Energy as specified in paragraph 12.2.1 this value will be
equal to the percentage of curtailment as specified by ld3"o
Power multiplied by the TGU as defined below.
b.) If the Seller declares a Suspension of Energy Deliveries as
specified in paragraph 12.3 .1 this value will be the sum of
the individual Generation Units size ratings as specified in
Appendix B that are impacted by the circumstances
causing the Seller to declare a Suspension of Energy
Deliveries.
16
TGU Sum of all of the individual generator ratings of the Generation
Units at this Facility as specified in Appendix B of this
agreement.
Actual hours the Facility's Net Energy deliveries were either
RSH reduced or suspended under paragraph 12.2.1 or 12.3.1
TH = Actual total hours in the current month
Resulting formula being:
Adjusted
Estimated
Net Energy
Amount
NEA -cc SGU
TGU X NEA ) X (
RSH
TH
This Adjusted Estimated Net Energy Amount will be used in applicable Surplus Energy
calculations for only the specific month in which Idaho Power was excused from accepting the
Seller's Net Energy or the Seller declared a Suspension of Energy Deliveries.
6.3 Failure to deliver minimum amounts of Net Energy -Unless excused by an event of Force
Majeure or Idaho Power's inability to accept Net Energy, Seller's failure to deliver Net Energy in
any Contract Year in an amount equal to at least ten percent (10%) of the sum of the monthly
estimated Net Energy amounts in effect as of the Operation Date shall constitute an event of
default.
ARTICLE VII: PURCHASE PRICE AND METHOD OF PAYMENT
7 .1 Base Energy Heavy Load Purchase Price -For all Base Energy received during Heavy Load Hours,
Idaho Power will pay the monthly non-levelized Base Energy Heavy Load Purchase Price as
specified in Appendix D.
7.2 Base Energy Light Load Purchase Price -For all Base Energy received during Light Load Hours,
Idaho Power will pay the monthly non-levelized Base Energy Light Load Purchase Price as
specified in Appendix D.
7 .3 All Hours Energy Price -The price to be used in the calculation of the Surplus Energy Price and
Delay Damage Price shall be the monthly non-levelized All Hours Energy in Appendix D.
17
7.4
7.5
7.6
7.7
Surplus Energy Price -For all Surplus Energy, Idaho Power shall pay to the Seller the current
month's Market Energy Reference Price or the applicable All Hours Energy Price, whichever is
lower.
Inadvertent Energy -
7.5.1 Inadvertent Energy is electric energy produced by the Facility, expressed in kWh,
which the Seller delivers to Idaho Power at the Point of Delivery that exceeds I 0,000
kW multiplied by the hours in the specific month in which the energy was delivered.
(For example January contains 744 hours. 744 hours times I 0,000 kW= 7,440,000
kWh. Energy delivered in January in excess of 7,440,000 kWh in this example would
be inadvertent Energy.)
7.5.2 Although Seller intends to design and operate the Facility to generate no more than
IO average MW monthly and therefore does not intend to generate Inadvertent
Energy, Idaho Power will accept Inadvertent Energy that does not exceed the
Maximum Capacity Amount but will not purchase or pay for inadvertent Energy.
7.5.3 Delivering Inadvertent Energy to Idaho Power for 2 consecutive months and/or in any
3 months during a Contract Year will be a Material Breach of this Agreement and
Idaho Power may terminate this Agreement within sixty (60) days after the Material
Breach has occurred.
Payments -Undisputed Base Energy and Surplus Energy payments, less any payments due to Idaho
Power will be disbursed to the Seller within thirty (30) days of the date which Idaho Power receives
and accepts the documentation of the monthly Base Energy and Surplus Energy actually delivered
to Idaho Power as specified in Appendix A.
Continuing Jurisdiction of the Commission This Agreement is a special contract and, as such, the
rates, terms and conditions contained in this Agreement will be construed in accordance with Idaho
Power Company v. Idaho Public Utilities Commission and Afton Energy, Inc., I 07 Idaho 781 , 693
P.2d 427 ( 1984), Idaho Power Company v. Idaho Public Utilities Commission, I 07 Idaho 1122,
695 P.2d I 261 ( 1985), Afton Energy, Inc, v. Idaho Power Company, 111 Idaho 925, 729 P.2d 400
18
( 1986), Section 210 of the Public Utility Regulatory Policies Act of 1978 and 18 CFR §292.303-
308
ARTICLE VIII: ENVIRONMENT AL ATTRIBUTES
8.1 Pursuant to Commission Order 32697 and 32802 the Environmental Attributes and Renewable
Energy Certificates as defined within this Agreement and directly associated with the production
of energy from the Seller's Facility are owned by the Seller.
9.1
10.1
10.2
ARTICLE IX: FACILITY AND INTERCONNECTION
Design of Facility -Seller will design, construct, install, own, operate and maintain the Facility and
any Seller-owned Interconnection Facilities so as to allow safe and reliable generation and delivery
of Net Energy and Inadvertent Energy to the Idaho Power Point of Delivery for the full term of the
Agreement in accordance with the GIA.
ARTICLE X:
METERING, METERING COMMUNICATIONS AND SCAD A TELEMETRY
Metering -Idaho Power shall, provide, install, and maintain metering equipment needed for
metering the electrical energy production from the Facility. The metering equipment will be
capable of measuring, recording, retrieving and reporting the Facility's hourly gross electrical
energy production, Station Use, maximum energy deliveries (kW) and any other energy
measurements at the Point of Delivery that Idaho Power needs to administer this Agreement and
integrate this Facility's energy production into the Idaho Power electrical system. Specific
equipment, installation details and requirements for this metering equipment will be established in
the GIA process and documented in the GIA. Seller shall be responsible for all initial and ongoing
costs of this equipment as specified in Schedule 72 and the GIA.
Metering Communications -Seller shall, at the Seller's sole initial and ongoing expense, arrange
for, provide, install, and maintain dedicated metering communications equipment capable of
19
transmitting the metering data specified in paragraph I 0.1 to Idaho Power in a frequency, manner
and form acceptable to Idaho Power. Seller shall grant Idaho Power sole control and use of this
dedicated metering communications equipment. Specific details and requirements for this metering
communications equipment will be established in the GIA process and documented in the GlA.
I 0.3 Supervisory Control and Data Acquisition (SCAD A) Telemetry -In addition to the requirements
of paragraph I 0.1 and I 0.2, Idaho Power may require telemetry equipment and
telecommunications which will be capable of providing Idaho Power with continuous
instantaneous SCAD A telemetry of the Seller's Net Energy and Inadvertent Energy production in
a form acceptable to Idaho Power. Seller shall grant Idaho Power sole control and use of this
dedicated SCADA and telecommunications equipment. Specific details and requirements for this
SCADA Telemetry and telecommunications equipment will be established in the GIA process
and documented in the GIA. Seller shall be responsible for all initial and ongoing costs of this
equipment as specified in Schedule 72 and the GIA.
ARTICLE XI -RECORDS
I 1.1 Maintenance of Records -Seller shall maintain monthly records at the Facility or such other
location mutually acceptable to the Parties. These records shall include total generation, Net
Energy, Station Use, Surplus Energy, Inadvertent Energy and maximum hourly generation (kW)
and be recorded in a form and content acceptable to Idaho Power. Monthly records shall be retained
for a period of not less than five years.
11.2 Inspection -Either Party, after reasonable notice to the other Party, shall have the right, during
normal business hours, to inspect and audit any or all records pertaining to the Seller's Facility
generation, Net Energy, Station Use, Surplus Energy, Inadvertent Energy and maximum generation
(kW) records pertaining to the Seller's Facility.
20
ARTICLE XII: OPERATIONS
12 .1 Communications -Idaho Power and the Seller shall maintain appropriate operating
communications through Idaho Power's Designated Dispatch Facility in accordance with the GIA
12 .2 Acceptance of Energy -
12.2.1 Idaho Power shall be excused from accepting and paying for Net Energy or accepting
Inadvertent Energy which would have otherwise been produced by the Facility and
delivered by the Seller to the Point of Delivery:
a.) If energy deliveries are interrupted due an event of Force Majeure or
Forced Outage.
b.) If interruption of energy deliveries is allowed by Section 210 of the Public
Utility Regulatory Policies Act of 1978 and 18 CFR §292.304
c.) If temporary disconnection and/or interruption of energy deliveries is in
accordance with Schedule 72 or other provisions as specified within the
GIA.
d.) If Idaho Power determines that curtailment, interruption or reduction of
Net Energy or Inadvertent Energy deliveries is necessary because of line
construction, electrical system maintenance requirements, emergencies,
electrical system operating conditions, electrical system reliability
emergencies on its system, or as otherwise required by Prudent Electrical
Practices.
12.2.2 If, in the reasonable opinion of Idaho Power, Seller's operation of the Facility or
Interconnection Facilities is unsafe or may otherwise adversely affect Idaho Power's
equipment, personnel or service to its customers, Idaho Power may temporarily disconnect
the Facility from Idaho Power's transmission/distribution system as specified within the
GlA or Schedule 72 or take such other reasonable steps as Idaho Power deems appropriate.
12.2.3 Under no circumstances will the Seller deliver energy from the Facility to the Point of
Delivery in an amount that exceeds the Maximum Capacity Amount at any moment in
21
12.3
time. Seller's failure to limit deliveries to the Maximum Capacity Amount will be a
Material Breach of this Agreement.
12.2.4 If Idaho Power is unable to accept the energy from this Facility and is not excused from
accepting the Facility's energy, Idaho Power's damages shall be limited to only the value
of the estimated energy that Idaho Power was unable to accept valued at the applicable
energy prices specified in this Agreement. Idaho Power will have no responsibility to pay
for any other costs, lost revenue or consequential damages the Facility may incur.
Seller Declared Suspension of Energy Deliveries
12.3.1 If the Seller's Facility experiences a Forced Outage, and the Seller initiates a Declared
Suspension of Energy Deliveries, Seller shall, after giving notice as provided in paragraph
12.3.2 below, temporarily reduce deliveries of Net Energy (kW) to Idaho Power from the
Facility to not exceed the reduced energy deliveries (kW) stated by the Seller in the initial
declaration for a period of not less than 48 hours ("Declared Suspension of Energy
Deliveries"). The Seller's Declared Suspension of Energy Deliveries will begin at the start
of the next full hour following the Seller's telephone notification as specified in paragraph
12.3.2 and will continue for the time as specified (not less than 48 hours) in the written
notification provided by the Seller. In the month(s) in which the Declared Suspension of
Energy occurred, the Estimated Net Energy Amount will be adjusted as specified in
paragraph 6.2.3.
12.3.2 If the Seller desires to initiate a Declared Suspension of Energy Deliveries as provided in
paragraph 12.3.1, the Seller will notify the Designated Dispatch Facility by telephone. The
beginning hour of the Declared Suspension of Energy Deliveries will be at the earliest the
next full hour after making telephone contact with Idaho Power. The Seller will, within 24
hours after the telephone contact, provide Idaho Power a written notice in accordance with
Article XXV that will contain the beginning hour and expected duration of the Declared
Suspension of Energy Deliveries, a description of the conditions that caused the Seller to
initiate a Declared Suspension of Energy Deliveries and the reduced level (kW) of energy
22
12.4
12.5
12.6
deliveries the Facility is requesting that will be set as the maximum energy deliveries to
Idaho Power for the duration of the Declared Suspension of Energy Delivery event (not
less than 48 hours). Idaho Power will review the documentation provided by the Seller to
determine Idaho Power's acceptance of the described Forced Outage as qualifying for a
Declared Suspension of Energy Deliveries as specified in paragraph 12.3.1 . Idaho Power's
acceptance of the Seller's Forced Outage as an acceptable Forced Outage will be based
upon the clear documentation provided by the Seller that the Forced Outage is not due to
an event of Force Majeure or by neglect, disrepair or lack of adequate preventative
maintenance of the Seller's Facility.
Scheduled Maintenance -On or before January 31st of each calendar year, Seller shall submit a
written proposed maintenance schedule of significant Facility maintenance for that calendar year
and Idaho Power and Seller shall mutually agree as to the acceptability of the proposed schedule.
If the Seller intends to perform planned maintenance at approximately the same time every year,
the Seller may submit a maintenance schedule for the first calendar year and include a statement
that this maintenance schedule shall be consistent for all future years, until such time as the Seller
notifies Idaho Power of a change to this schedule. The Parties determination as to the acceptability
of the Seller's timetable for scheduled maintenance will take into consideration Prudent Electrical
Practices, Idaho Power system requirements and the Seller's preferred schedule. Neither Party shall
unreasonably withhold acceptance of the proposed maintenance schedule.
Idaho Power Maintenance Information -Upon receiving a written request from the Seller, Idaho
Power shall provide publically available information in regards to Idaho Power planned
maintenance information that may impact the Facility.
Contact Prior to Curtailment -Idaho Power will make a reasonable attempt to contact the Seller
prior to exercising its rights to interrupt the interconnection or curtail deliveries from the Seller's
Facility. Seller understands that in the case of emergency circumstances, real time operations of
the electrical system, and/or unplanned events, Idaho Power may not be able to provide notice to
the Seller prior to interruption, curtailment, or reduction of electrical energy deliveries.
23
ARTICLE XIII : INDEMNIFICATION AND INSURANCE
13.1 Indemnification -Each Party shall agree to hold harmless and to indemnify the other Party, its
officers, agents, affiliates, subsidiaries, parent company and employees against all loss, damage,
expense and liability to third persons for injury to or death of person or injury to property,
proximately caused by the indemnifying Party's, (a) construction, ownership, operation or
maintenance of, or by failure of, any of such Party's works or facilities used in connection with this
Agreement, or (b) negligent or intentional acts, errors or omissions. The indemnifying Party shall,
on the other Party's request, defend any suit asserting a claim covered by this indemnity. The
indemnifying Party shall pay all documented costs, including reasonable attorney fees that may be
incurred by the other Party in enforcing this indemnity.
13.2 Insurance -During the term of this Agreement, Seller shall secure and continuously carry insurance
as specified in Appendix E.
ARTICLE XIV: FORCE MAJEURE
14.1 As used in this Agreement, "Force Majeure" or "an event of Force Majeure" means any cause
beyond the control of the Seller or of Idaho Power which, despite the exercise of due diligence,
such 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 changes in 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.
Fluctuations and/or changes of the motive force and/or the fuel supply are not events of Force
Majeure. If 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, provided that:
(I) The non-performing Party shall, as soon as is reasonably possible after the
occurrence of the Force Majeure, give the other Party written notice describing the
24
15.1
15.2
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 of the Force
Majeure event and which could and should have been fully performed before such
occurrence shall be excused as a result of such occurrence.
ARTICLE XV: LIABILITY; DEDICATION
Limitation of Liability. Nothing in this Agreement shall be construed to create any duty to, any
standard of care with reference to, or any liability to any person not a Party to this Agreement.
Neither party shall be liable to the other for any indirect, special, consequential, nor punitive
damages, except as expressly authorized by this Agreement.
Dedication. No undertaking by one Party to the other under any provision of this Agreement shall
constitute the dedication of that Party's system or any portion thereof to the Party or the public or
affect the status of Idaho Power as an independent public utility corporation or Seller as an
independent individual or entity.
ARTICLE XVI: SEVERAL OBLIGATIONS
16.1 Except where specifically stated in this Agreement to be otherwise, the duties, obligations and
liabilities of the Parties are intended to be several and not joint or collective. Nothing contained
in this Agreement shall be construed to create an association, trust, partnership or joint venture or
impose a trust or partnership duty, obligation or liability on or with regard to either Party. Each
Party shall be individually and severally liable for its own obligations under this Agreement.
ARTICLE XVII: W AlVER
17.1 Any waiver at any time by either Party of its rights with respect to a default under this Agreement
or with respect to any other matters arising in connection with this Agreement shall not be
deemed a waiver with respect to any subsequent default or other matter.
25
ARTICLE XVIII: CHOICE OF LAWS AND VENUE
18.1 This Agreement shall be construed and interpreted in accordance with the laws of the State of
Idaho without reference to its choice of law provisions.
18.2 Venue for any litigation arising out of or related to this Agreement will lie in the District Court of
the Fourth Judicial District of Idaho in and for the County of Ada.
19.1
ARTICLE XIX: DISPUTES AND DEFAULT
Disputes -All disputes related to or arising under this Agreement, including, but not limited to, the
interpretation of the terms and conditions of this Agreement, will be submitted to the Commission
for resolution.
19 .2 Notice of Default
19.2.1
19.2.2
Defaults. If either Party fails to perform any of the terms or conditions of this
Agreement (an "event of default"), the non-defaulting Party shall cause notice in writing
to be given to the defaulting Party, specifying the manner in which such default
occurred. If the defaulting Party shall fail to cure such default within the sixty (60) days
after service of such notice, or if the defaulting Party reasonably demonstrates to the
other Party that the default can be cured within a commercially reasonable time but not
within such sixty (60) day period and then fails to diligently pursue such cure, then the
non-defaulting Party may, at its option, terminate this Agreement and/or pursue its legal
or equitable remedies.
Material Breaches -The notice and cure provisions in paragraph 19.2.1 do not apply to
defaults identified in this Agreement as Material Breaches. Material Breaches must be
cured as expeditiously as possible following occurrence of the breach or if a specific
cure and/or inability to cure is identified by this Agreement for the specific Material
Breach then that cure shall apply.
19.3 Prior to the Operation Date and thereafter for the full term of this Agreement, Seller will provide
Idaho Power with the following:
26
19.3.1
19.3.2
19.3.3
Insurance -Evidence of compliance with the provisions of Appendix E. If Seller fails
to comply, such failure will be a Material Breach.
Engineer's Certifications -Every three (3) years after the Operation Date, Seller will
supply Idaho Power with a Certification of Ongoing Operations and Maintenance
(O&M) from a Registered Professional Engineer licensed in the State of Idaho, which
Certification of Ongoing O&M shall be in the form specified in Appendix C. Seller's
failure to supply the required certificate will be an event of default. Such a default may
only be cured by Seller providing the required certificate; and
Licenses / Permits / Determinations -During the full term of this Agreement, Seller
shall maintain compliance with all permits, licenses and determinations described in
paragraph 4.1 .1 of this Agreement. In addition, Seller will supply Idaho Power with
copies of any new or additional permits, licenses or determinations. At least every fifth
Contract Year, Seller will update the documentation described in Paragraph 4.1.1. If at
any time Seller fails to maintain compliance with the permits, licenses and
determinations described in paragraph 4.1.1 or to provide the documentation required
by this paragraph, such failure will be an event of default and may only be cured by
Seller submitting to Idaho Power evidence of compliance from the permitting agency.
ARTICLE XX: GOVERNMENT AL AUTHORIZATION
20.1 This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
ARTICLE XXI: COMMISSION ORDER
21.1 Idaho Power shall file this Agreement for its acceptance or rejection by the Commission. This
Agreement shall only become finally effective upon the Commission's approval of all terms and
provisions hereof without change or condition and declaration that all payments to be made to
Seller hereunder shall be allowed as prudently incurred expenses for ratemaking purposes.
27
ARTICLE XXII: SUCCESSORS AND ASSIGNS
22.1 This Agreement and all of the terms and provisions hereof shall be binding upon and inure to the
benefit of the respective successors and assigns of the Parties hereto. Neither this Agreement nor
any rights or obligations of either Party hereunder may be assigned, in whole or in part, by operation
of law or otherwise, without the prior written consent of both Parties, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, any party with which Idaho Power may
consolidate, or into which it may merge, or to which it may convey or transfer substantially all of
its electric utility assets, shall automatically, without further act, and without need of consent or
approval by the Seller, succeed to all of Idaho Power's rights, obligations and interests under this
Agreement. Any purported assignment in derogation of the foregoing shall be void. This article
shall not prevent a financing entity with recorded or secured rights from exercising all rights and
remedies available to it under law or contract. Idaho Power shall have the right to be notified by
the financing entity that it is exercising such rights or remedies.
ARTICLE XXlll: MODIFICATION
23. I No modification to this Agreement shall be valid unless it is in writing and signed by both Parties
and subsequently approved by the Commission.
ARTICLE XXIV: TAXES
24.1 Each Party shall pay before delinquency all taxes and other governmental charges which, if failed
to be paid when due, could result in a lien upon the Facility or the Interconnection Facilities.
ARTICLE XXV: NOTICES AND AUTHORIZED AGENTS
25.1 Notices -All written notices under this Agreement shall be directed as follows and shall be
considered delivered when faxed, e-mailed and confirmed with deposit in the U.S. Mail, first­
class, postage prepaid, as follows:
28
To Seller:
To Idaho Power:
Original document to:
Stephen Harmsen
26 N. State St.
Salt Lake City, Utah 841 I I
Phone: [phone]
Cell: 801-550-2300
E-mail: [e-mail]
Original document to:
Vice President, Power Supply
Idaho Power Company
PO Box 70
Boise, Idaho 83 707
Emai I: [e-mail]
Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
PO Box 70
Boise, Idaho 83707
E-mai I: [e-mail]
Either Party may change the contact person and/or address information listed above, by providing
written notice from an authorized person representing the Party.
25.2 Authorized Agent(s)
Steve Harmsen President
Scott Kaster Owner
Authorized Agents as listed above may be modified by the Seller by requesting and completing
an Authorized Agent modification document provided by Idaho Power. This document at
minimum will include the requested changes and require signature(s) from an authorized party of
the Seller.
29
26.1
ARTICLE XXVI: ADDITIONAL TERMS AND CONDITIONS
Equal Employment. During performance pursuant to this Agreement, Seller agrees to comply
with all applicable equal employment opportunity, small business, and affirmative action laws
and regulations. All Equal Employment Opportunity and affirmative action laws and regulations
are hereby incorporated by this reference, including provisions of 3 8 U .S.C. § 4212, Executive
Order 11246, as amended, and any subsequent executive orders or other laws or regulations
relating to equal opportunity for employment on government contracts. To the extent this
Agreement is covered by Executive Order 11246, the Equal Opportunity Clauses contained in 41
C.F.R. 60-1.4, 41 C.F.R. 60-250.5, and 41 CFR 60-741.5 are incorporated herein by reference.
26.2 Prior to the Seller executing this Agreement, the Seller shall have:
a) Initiated the Generation Interconnection review process which shall result in the
identification of any required modifications, additions, or upgrades to the existing
interconnection of this Facility to enable the Facility to deliver energy in accordance with
this Agreement. Completion of this review process will result in a GlA being created for
this project that will require execution by the Seller and the Idaho Power interconnection
group.
b) Acknowledged responsibility for all interconnection costs and any costs associated with
acquiring adequate firm transmission capacity to enable the project to be classified as an
Idaho Power DNR. If final interconnection or transmission studies are not complete at the
time the Seller executes this Agreement, the Seller understands that the Seller's obligations
to pay Delay and Termination Damages associated with the project's failure to achieve the
Operation Date by the Scheduled Operation Date as specified in this Agreement is not
relieved by final interconnection or transmission costs, processes or schedules.
c) Provide acceptable and verifiable evidence to Idaho Power that demonstrates the Facility
is eligible for the published avoided costs requested by the Seller and contained within
this Agreement. Commission Order 33538 provides the current published avoided costs
for Non-Seasonal Hydro Facilities, Seasonal Hydro Facilities, Other Facilities, Solar
30
Facilities, and Wind Facilities. Commission Order 32697 provides for full capacity
payments for existing projects that have requested replacement contracts after their
existing contract expires.
26.3 This Agreement includes the following appendices, which are attached hereto and included by
reference:
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer's Certifications
Non-Seasonal Hydro Facility Energy Prices
Insurance Requirements
ARTICLE XXVII: SEVERABLLITY
27.1 The invalidity or unenforceability of any term or provision of this Agreement shall not affect the
validity or enforceability of any other terms or provisions and this Agreement shall be construed
in all other respects as if the invalid or unenforceable term or provision were omitted.
ARTICLE XXVIII: COUNTERPARTS
28.1 This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
31
ARTICLE XXIX: ENTIRE AGREEMENT
29.1 This Agreement constitutes the entire Agreement of the Parties concerning the subject matter
hereof and supersedes all prior or contemporaneous oral or written agreements between the
Parties concerning the subject matter hereof.
By
Dated
IN WITNESS WHEREOF, The Parties hereto have caused this Agreement to be executed
in their respective names on the dates set forth below:
Idaho Power Company
Tessia Park
Vice President, Power Supply
;o/os-/11,c
"Idaho Power"
32
HK Hydro LLC
Stephen Harmsen
President
Dated '7~
"Seller"
APPENDlX A
A -I MONTHLY POWER PRODUCTION AND SWITCHING REPORT
At the end of each month the following required documentation will be submitted to:
Idaho Power Company
Attn: Cogeneration and Small Power Production
PO Box 70
Boise, Idaho 83 707
The meter readings required on this report will be the readings on the Idaho Power meter equipment
measuring the Facility's total energy production and Station Usage delivered to Idaho Power and the
maximum generated energy (kW) as recorded on the metering equipment and/or any other required
energy measurements to adequately administer this Agreement. This document shall be the document to
enable Idaho Power to begin the energy payment calculation and payment process. The meter readings
on this report may not be used to calculate the actual payment, but instead will be a check of the
automated meter reading information that will be gathered as described in item A-2 below:
33
Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
Project Name
Address
City
Meter Number:
End of Month kWh Meter Reading:
*
2
3
4
5
6
7
Beginning of Month kWh Meter:
Difference:
Times Meter Constant:
kWh for the Month:
Metered Demand:
Breaker Opening Record
Breaker Opening Reason Codes
Lack of Adequate Prime Mover
Forced Outage of Facility
Disturbance of IPCo System
Scheduled Maintenance
Testing of Protection Systems
Cause Unknown
Other (Explain)
State
*
'
Facility
Output
Month
Zip
Station
Usage
Year
Project Number:
Phone Number:
Metered
Maximum Generation
kW
Net Generation
Breaker Closing Record
Reason
I hereby certify that the above meter readings are
true and correct as of Midnight on the last day of the
above month and that the switching record is accurate
and complete as required by the Energy Sales
Agreement to which I am a Party.
Signature Date
34
A-2 AUTOMATED METER READING COLLECTION PROCESS
Monthly, Idaho Power will use the provided metering and telemetry equipment and processes to collect
the meter reading information from the Idaho Power provided metering equipment that measures the Net
Energy and energy delivered to supply Station Use for the Facility recorded at 12:00 AM (Midnight) of
the last day of the month.
The meter information collected will include but not be limited to energy production, Station Use, the
maximum generated power (kW) and any other required energy measurements to adequately administer
this Agreement.
A-3 SELLER CONT ACT INFORMATION
Seller's Contact Information
Project Management
Name: Stephen Harmsen
Telephone Number: 801-531-1900
Cell Phone: [phone]
24-Hour Project Operational Contact
Name: Stephen Harmsen
Telephone Number: 801-531-1900
Cell Phone: [phone]
Project On-site Contact information
Name: Stephen Harmsen
Telephone Number: 801-531-1900
Cell Phone: [phone]
35
APPENDIX B
FACILITY AND POINT OF DELIVERY
Project Name: Mud Creek S&S
Project Number: 31515005
B-1 DESCRIPTION OF FACILITY
Upper Power House
One vertical 200 kW synchronous 480 volt 450 RPM generator. Vertical 300 HP wicket gated
Frances turbine.
Two 50 kW horizontal induction 480 volt generators with split case pumps.
Lower Power House
One horizontal 130 kW synchronous 480 volt generator with horizontal wicket gated Francis
turbine.
One vertical 60 kW induction 480 volt 1200 RPM generator with reverse pump.
One vertical 30 kW induction 480 volt 1800 RPM generator with reverse pump.
All 6 generators interconnect at I substation at the upper site. Project has 70 feet and 40 feet of head.
Facility Nameplate Capacity: 520 kW
8-2 LOCATION OF FACILITY
Near: Buhl
Actual or nearest physical street address: Near the intersection of E 4325 N and N 1130 E, Buhl.
GPS Coordinates: Latitude Decimal Degrees
Longitude Decimal Degrees
State: Idaho County: Twin Falls
-114.821066
42.625497
Description of Interconnection Location: W Y2 of S 14, R l 4E, T9S ( 3 Yi mi NW of Buhl)
8-3 SCHEDULED FIRST ENERGY AND OPERATION DA TE
As this Facility is interconnected and already delivering energy to Idaho Power pursuant to an
energy sales agreement that will expire at hour ending 2400 on February 19, 20 I 7, it is expected
that the First Energy Date and the Operation Date for this Agreement shall both occur at the same
time. Both the Scheduled First Energy Date and the Scheduled Operation Date will be at hour
beginning O I 00 on February 20, 2017.
36
B-4 MAXIMUM CAPACITY AMOUNT:
This value will be 520 kW which is consistent with the value provided by the Seller to Idaho Power
in accordance with the GIA. This value is the maximum energy (KW) that potentially could be
delivered by the Seller's Facility to the Idaho Power electrical system at any moment in time.
B-5 POlNT OF DELIVERY
"Point of Delivery" means, unless otherwise agreed by both Parties, the point of where the
Seller's Facility energy is delivered to the Idaho Power electrical system. The GIA will determine
the specific Point of Delivery for this Facility. The Point of Delivery identified by the GIA will
become an integral part of this Agreement.
B-6 LOSSES
Pursuant to Appendix B of the energy sales agreement dated October 30, 1981, which expires on
February 19, 2017, the Facility generation meter readings will be adjusted to compensate for energy
losses through the transformers. By letter dated March 18, 1986, the losses were set at 1.64%. If
the interconnection of this existing Facility is modified in accordance with this new Energy Sales
Agreement and/or the GIA, this energy loss calculation will be revised to reflect the new
interconnection configuration. If no changes to the existing interconnection are made, the Losses
will remain at 1.64% of the kWh energy production recorded on the Facility generation metering
equipment. If at any time during the term of this Agreement, Idaho Power or Seller determines that
the loss calculation does not correctly reflect the actual kWh losses attributed to the electrical
equipment between the Facility and the Idaho Power electrical system, Idaho Power may adjust the
calculation and retroactively adjust the previous month 's kWh loss calculations.
37
B-7 DESIGNATED NETWORK RESOURCE (DNR)
This Facility is an Idaho Power DNR pursuant to an existing energy sales agreement that will expire
on February 19, 20 I 7. If this Agreement is I) executed and approved by the Commission prior to
the expiration of the existing agreement and 2) a GIA has been executed by both parties and 3) the
Seller is in compliance with all requirements of that GIA, then the previous DNR status will be
extended for this Agreement. However, if any of these DNR requirements are not completed prior
to the expiration of the existing agreement it will require that this Facility be processed through the
routine DNR process as described below.
Idaho Power cannot accept or pay for generation from this Facility until the Facility has achieved
the status of being an Idaho Power DNR. Federal Energy Regulatory Commission ("FERC")
rules require Idaho Power to prepare and submit the application to achieve DNR status for this
Facility. Because much of the information Idaho Power needs to prepare the DNR application is
specific to the Seller's Facility, Idaho Power's ability to file the DNR application in a timely manner
is contingent upon timely receipt of the required information from the Seller. Prior to Idaho Power
beginning the process to enable Idaho Power to submit a request for DNR status for this Facility,
the Seller shall have I) filed a Generation Interconnection application, 2) submitted all information
required by Idaho Power to complete the application, and 3) either executed this Agreement or, at
a minimum, provided Idaho Power with confirmation of the Seller's intent to complete this
Agreement in a timely manner. Seller's failure to provide complete and accurate information
in a timely manner can significantly impact Idaho Power's ability and cost to attain the DNR
designation for the Seller's Facility and the Seller shall bear the costs of any of these delays
that are a result of any action or inaction by the Seller.
38
APPENDIX C
ENGINEER'S CERTIFICATION
OF
OPERATIONS & MAINTENANCE POLICY
The undersigned ________________ , on behalf of himself/herself and
_____ , hereinafter collectively referred to as "Engineer," hereby states and certifies to the Seller as
follows:
I. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter referred to as the
"Agreement," between Idaho Power as Buyer, and as Seller, dated -------
3. That the cogeneration or small power production project which is the subject of the Agreement and
this Statement is identified as Idaho Power Company Facility No. and is hereinafter -------
referred to as the "Project."
4. That the Project, which is commonly known as the _________ Project, is located in
Section __ Township ____ Range ____ , Boise Meridian, _____ County, Idaho.
5. That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to Idaho Power for a ____ year period.
6. That Engineer has substantial experience in the design, construction and operation of electric power
plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
8. That Engineer has reviewed and/or supervised the review of the Policy for Operation and
Maintenance ("O&M") for this Project and it is his professional opinion that, said Project has been
designed and built to appropriate standards, and adherence to said O&M Policy will result in the Project's
producing at or near the design electrical output, efficiency and plant factor for the full Contact Term of
______ years.
39
9. That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement, is
relying on Engineer's representations and opinions contained in this Statement.
10. That Engineer certifies that the above statements are complete, true and accurate to the best of
his/her knowledge and therefore sets his/her hand and seal below.
(P.E. Stamp)
Date --------------
40
APPENDIX C
ENGINEER'S CERTIFICATION
OF
ONGOING OPERATIONS AND MAINTENANCE
The undersigned _________________ , on behalf of himself/herself
and hereinafter collectively referred to as "Engineer," hereby states and ------------
certifies to the Seller as follows:
I. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter referred to as the
"Agreement," between Idaho Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project which is the subject of the Agreement and
this Statement is identified as Idaho Power Company Facility No. ______ and hereinafter referred
to as the "Project".
4. That the Project, which is commonly known as the _________ Project, is located in
Section __ Township ____ Range ____ , Boise Meridian, _____ County, Idaho.
5. That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to Idaho Power for a ____ year period.
6. That Engineer has substantial experience in the design, construction and operation of electric power
plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
41
8. That Engineer has made a physical inspection of said Project, its operations and maintenance
records since the last previous certified inspection. The Engineer certifies, based on the Project's
appearance and the information provided by the Project, that the Project's ongoing O&M has been
completed in accordance with said O&M Policy; that it is in reasonably good operating condition; and it is
in the Engineer's professional opinion that if adherence to said O&M Policy continues, the Project will
continue producing at or near its design electrical output, efficiency and plant factor for the remaining
___ years of the Agreement.
9. That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the Agreement,
is relying on Engineer's representations and opinions contained in this Statement.
I 0. That Engineer certifies that the above statements are complete, true and accurate to the best of
his/her knowledge and therefore sets his/her hand and seal below.
(P.E. Stamp)
Date _____________ _
42
APPENDIX C
ENGINEER'S CERTIFICATION
OF
DESIGN & CONSTRUCTION ADEQUACY
The undersigned on behalf of himself/herself and
____________ hereinafter collectively referred to as "Engineer", hereby states and certifies
to Idaho Power as follows:
I.
2.
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Energy Sales Agreement, hereinafter referred to as the
"Agreement", between Idaho Power as Buyer, and _____________ as Seller, dated
3. That the cogeneration or small power production project, which is the subject of the
Agreement and this Statement, is identified as Idaho Power Company Facility No _______ and
is hereinafter referred to as the "Project".
4. That the Project, which is commonly known as the _________ Project, is located in
Section __ Township ____ Range ____ ., Boise Meridian, _____ County, Idaho.
5. That Engineer recognizes that the Agreement provides for the Project to furnish electrical
energy to Idaho Power for a _______ year period.
6. That Engineer has substantial experience in the design, construction and operation of
electric power plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project and has
made the analysis of the plans and specifications independently.
8. That Engineer has reviewed the engineering design and construction of the Project,
including the civil work, electrical work, generating equipment, prime mover conveyance system, Seller
furnished Interconnection Facilities and other Project facilities and equipment.
43
9. That the Project has been constructed in accordance with said plans and specifications, all
applicable codes and consistent with Prudent Electrical Practices as that term is described in the Agreement.
10. That the design and construction of the Project is such that with reasonable and prudent
operation and maintenance practices by Seller, the Project is capable of performing in accordance with the
terms of the Agreement and with Prudent Electrical Practices for a ____ year period.
I I. That Engineer recognizes that Idaho Power, in accordance with paragraph 5.2 of the
Agreement, in interconnecting the Project with its system, is relying on Engineer's representations and
opinions contained in this Statement.
12. That Engineer certifies that the above statements are complete, true and accurate to the best
of his/her knowledge and therefore sets his/her hand and seal below.
By ____________ _
(P.E. Stamp)
Date --------------
44
D-1
APPENDIX D
NON SEASONAL HYDRO FACILITY ENERGY PRICES
(Prices based on 520 kW of Capacity)
Base Energy Heavy Load Purchase Price -For all Base Energy received during Heavy Load Hours,
Idaho Power will pay the non-levelized energy price in accordance with Commission Order 33538
dated June 15, 2016 with full capacity payments per Commission Order 32697 and seasonalization
factors applied:
Season I -(73.50 %) Season 2 -(120.00 %) Season 3 -(100.00 %)
Year Mills/kWh Mills/kWh Mills/kWh
2017 46.20 75.43 62.86
2018 48.11 78.55 65.46
2019 48.38 78.98 65 .82
2020 49.66 81.08 67.57
2021 50.88 83 .07 69.22
2022 52.45 85.63 71.35
2023 54.51 89.00 74.16
2024 56.53 92.29 76.91
2025 58.64 95 .73 79.78
2026 59.94 97.85 81 .54
2027 60.77 99.22 82.69
2028 61.10 99.76 83.13
2029 62.55 102 .12 85.10
2030 63.29 103.33 86.11
2031 63.51 103 .68 86.40
2032 65.36 106.70 88.92
2033 66.75 108.98 90.81
2034 67.63 110.41 92.01
2035 69.11 112.84 94.03
2036 70.48 115.08 95.90
2037 72.20 117.87 98.23
2038 73.64 120.22 100.19
2039 75.41 123.12 102.60
45
D-2 Base Energy Light Load Purchase Price -For all Base Energy received during Light Load Hours,
Idaho Power will pay the non-levelized energy price in accordance with Commission Order 33538
dated June 15, 2016 with full capacity payments per Commission Order 32697 and seasonalization
factors applied:
Season 1 -(73 .50 %) Season 2 -(120.00 %) Season 3 -(100.00 %)
Year Mills/kWh Mills/kWh Mills/kWh
2017 40.85 66.70 55.58
2018 42 .76 69.81 58.18
2019 43.03 70.25 58.54
2020 44.3 1 72.34 60.29
2021 45 .53 74.33 61 .94
2022 47.09 76.89 64.07
2023 49.16 80.26 66.88
2024 51.18 83.55 69.63
2025 53.28 87.00 72.50
2026 54.58 89.12 74.26
2027 55.42 90.49 75.41
2028 55.75 91.02 75.85
2029 57.20 93.38 77.82
2030 57.94 94.59 78.83
2031 58.15 94.95 79.12
2032 60.00 97.97 81.64
2033 61.40 100.24 83.53
2034 62.28 101.68 84.73
2035 63.76 104.10 86.75
2036 65.13 106.34 88.62
2037 66.85 109.14 90.95
2038 68.29 111.49 92.91
2039 70.06 114.39 95.32
46
D-3 All Hours Energy Price -The price to be used in the calculation of the Surplus Energy Price and
Delay Damage Price shall be the non-levelized energy price in accordance with Commission Order
33538 dated June 15, 2016 with full capacity payments per Commission Order 32697 and
seasonalization factors applied:
Season I -(73.50 %) Season 2 -(120.00 %) Season 3 -( I 00.00 %)
Year Mills/kWh Mills/kWh Mills/kWh
2017 43 .82 71.55 59.62
2018 45 .73 74.66 62.22
2019 46.00 75.10 62.58
2020 47.28 77.19 64.33
2021 48.50 79.18 65.98
2022 50.06 81.74 68.11
2023 52.13 85.11 70.93
2024 54.15 88.40 73.67
2025 56.25 91.84 76.54
2026 57.55 93.97 78.30
2027 58.39 95.34 79.45
2028 58.72 95.87 79.89
2029 60.17 98.23 81.86
2030 60.91 99.44 82.87
2031 61.12 99.79 83.16
2032 62.97 102.82 85 .68
2033 64.37 105.09 87 .57
2034 65.25 106.53 88.77
2035 66.73 108.95 90 .79
2036 68.10 111.19 92.66
2037 69.82 113.99 94.99
2038 71.26 116.34 96.95
2039 73.03 119.23 99.36
47
APPENDIX E
INSURANCE REQUIREMENTS
The Seller shall secure and continuously carry insurance as specified within this Appendix for the term of
the Agreement.
Insurance Requirements:
I. All insurance required by this Agreement shall be placed with an insurance company with an
A.M. Best Company rating of A-or better.
2. If the insurance coverage required in this Appendix is cancelled, materially changed or lapses
for any reason, the Seller will immediately notify Idaho Power in writing. This notice will
advise Idaho Power of the specific reason for cancellation, material change or lapse and the
steps being taken to comply with these Insurance Requirements. Failure to provide this notice
and to comply with these Insurance Requirements within 5 days of the cancellation, material
change or lapse will constitute a Material Breach and Idaho Power may terminate this
Agreement.
3. Prior to the First Energy date and subsequently within IO days of the annual anniversary of the
Operation Date, the Seller shall provide a Certificate of Insurance in the name of Idaho Power
Company and list Idaho Power Company as an Additional Insured Endorsement and Waiver
of Subrogation Endorsement.
4. The Certificate of Insurance shall evidence the appropriate insurance coverage of
Comprehensive General Liability Insurance for both bodily injury and property damage with
limits equal to $1,000,000, each occurrence, combined single limit. The deductible for such
insurance shall be consistent with current Insurance Industry Utility practices for similar
property.
48
October 7, 2016
Stephen Harmsen
26 N. State St.
Salt Lake City, Utah 84111
E-mail Copy: Stephen Harmsen
Scott Kaster
Owen Orndorff
smh(d\att. net
[e-mail]
[e-mail]
An IDACORP company
Re: Memorandum of Understanding -Mud Creek S & S Replacement Energy Sales
Agreement (#31515005) Project Metering and Meter Communications
Mr. Harmsen,
On September 28, 2016 representatives from Mud Creek S&S Project ("Project") and Idaho
Power met to discuss the replacement Energy Sales Agreement ("ESA") for the Project. During
these discussions, the Project and Idaho Power agreed that there is not a standard communication
line available that could provide hourly energy delivery data to Idaho Power. However, the ESA
calculates energy payments based on heavy load (HL) and light load (LL) energy deliveries.
Because a standard communication line is not available, it was agreed that Idaho Power will
allocate the total monthly delivered kWh to HL and LL hours using the best available data to
perform this allocation. At the minimum, this allocation will be based on the actual HL and LL
hours in each month. This is a one-time modification to the meter communications requirement
for the Project and does not apply to any other existing projects or any other future projects.
Metering and associated communication requirements for all futme projects will be evaluated on
a case by case basis.
The process for determining the monthly payments to the Project will be as follows:
a.) The best meter reading would be for the Project to read the meter at midnight on the
last day of the month, however as that may not be practical, Idaho Power will accept a
meter reading that is done in the morning at approximately the same time of the first
day of each month. The Project will then provide this reading to Idaho Power in
accordance with the ESA.
Page I of2
PO Box 70 Boise, Idaho 83707 1221 W Idaho St. Boise, [daho 83702
b.) If Idaho Power has electronic access to the meter and is able to electronically extract
accurate data, Idaho Power may use that data to determine the month's total energy
deliveries for each month in lieu of the meter reading provided in option a.) above
and/or to allocate the total energy deliveries to HL and LL hours for the applicable
month.
c.) If option b.) does not provide accurate hourly data, Idaho Power will determine what
percentage of the month was HL and LL hours and then apply that percentage to the
total monthly net energy delivered to Idaho Power.
d.) Using the allocated HL and LL net energy deliveries, Idaho Power will calculate the
energy payment in accordance with the ESA.
Agreed, Understood and Accepted:
i"ra..-e. ,Uk~
Print Name and Title
1 ~:~~~k lidw .
IEne,rgy ~htra7is
/ Idaho Power Ct,mpany
Cc: Randy Allphin (IPCo)
Jeremiah Creason (IPCo)
Aubrae Sloan (IPCo)
Donovan Walker (IPCo)
~e:~-·----
Page 2 of2
PO Box 70 Boise, [daho 83707 1221 W Idaho St. Boise, Idaho 83702