20180329Application.pdf

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March 29,2018
VIA HAND DELIVERY
Diane M. Hanian, Secretary
!daho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Case No. IPC-E-18-04
Evergreen Energy, lnc. - Tamarack CSPP Project
ldaho Power Company's Application Regarding Energy Sales Agreement
Dear Ms. Hanian
Enclosed for filing in the above matter please find an original and seven (7)
copies of ldaho Power Company's Application.
very yours,
REC E IVE D
TfiI8 H&R 29 PH 3: ?7
if'.',; rC iiiSLIC;i-i;: ' i'11:r cD|lil4lssl0ll
DONOVAN E. WALKER
Lead Counsel
dwal [e-mail]
DEW:csb
Enclosures
An IDACORP Company
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
Re
7ilL
Donovan E. Walker
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@ idahopower. com
RECEIVED
20lB Hf,,R 29 Pl{ 3: 27
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Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OR REJECTION OF AN
ENERGY SALES AGREEMENT WITH
EVERGREEN ENERGY, INC., FOR THE
SALE AND PURCHASE OF ELECTRIC
ENERGY FROM THE TAMARACK CSPP
PROJECT.
CASE NO. !PC-E-18-04
APPLICATION
ldaho Power Company ("ldaho 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 ldaho Public Utilities Commission
("Commission") for an order accepting or rejecting the Energy Sales Agreement ('ESA'
or "Agreement") between ldaho Power and Evergreen Energy, lnc. ("Evergreen" or
"Seller") under which Evergreen would sell and ldaho Power would purchase electric
energy generated by the Tamarack CSPP project ("Facility") located near Tamarack,
ldaho.
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APPLICATION - 1
This request is for the approval or rejection of a new ESA applicable to an existing
project, is fully executed by both parties, and contains the Commission's standard terms
and conditions relating to surplus energy ("90o/ol11Oo/o") and operations and maintenance
('O&M") fees. However, Evergreen, similar to Shorock Hydro, lnc., has raised objections
to the inclusion in this ESA of provisions relating to 90o/ol110o/o and provisions of the ESA,
Generator lnterconnection Agreement ("GlA"), and Schedule 72 relating to the payment
of O&M charges. ldaho Power and Evergreen agree to move fonruard with the ESA as
submitted and to be bound by the currently approved and existing 9Oo/ol110o/o and O&M
provisions of the signed ESA, unless and until the Commission issues a final order in any
subsequent proceeding modifying or changing the same, as referenced in the Stipulated
Motion from Case No. IPC-E-17-14.
ln support of this Application, ldaho Power represents as follows:
I. INTRODUGTION
1. Evergreen currently has a PURPA ESA with Idaho Power for this Facility
thatwas executed on September 16, 1981. The expiration date of the 1981 ESA is May
31,2018.
2. The ESA submitted herewith is a new contract with the same Qualifying
Facility (.QF') for a new term and current 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. 33773 from Case No. IPC-E-16-12. Because the
Facility is an existing QF whose previous agreement with ldaho 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
APPLICATION - 2
Reconsideration Order No. 32737, the rates were calculated by Commission Staff for a
QF in the "Other Project" category pursuant to the surrogate avoided resource ('SAR')
avoided cost methodology.
3. The ESA, dated March 27,2018, was signed by Evergreen on March 22,
2018, and was signed by ldaho Power on March 27,2018. The ESA was executed in
compliance with the Commission's orders directing the implementation of PURPA for the
state of ldaho, and contains avoided cost rates pursuant to the Commission's Order No.
33773 dated June 1,2017.
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
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.
S 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
APPLICATION - 3
published avoided cost rates to include energy payments not discounted by transmission
and line !oss. 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. More recently, in Order No. 33898,
the Commission directed Idaho Power to utilize July 2026 as its first capacity deficit in the
Company's SAR methodology. However, because this ESA is a replacement contract,
its rates contain capacity payments for the entire contract term.
III. THE ENERGY SALES AGREEMENT
6. On March 27, 2018, ldaho Power and Evergreen entered into an ESA
pursuant to the terms and conditions of the various Commission orders applicable to this
PURPA agreement for an "Other" project. A copy of the ESA is attached to this
Application as Attachment 1. Under the terms of this ESA, Evergreen elected to contract
with Idaho Power for a2}-year term using the levelized, Other, published avoided cost
rates as currently established by the Commission in Order No. 33773 dated June 1 ,2017,
for replacement contracts and for energy deliveries of less than 10 aMW.
7. Prior to the Effective Date of this ESA, this Facility has been delivering
energy to ldaho Power in accordance with an energy sales agreement dated September
16, 1981 , that expires on May 31,2018. Evergreen proposes to continue to operate and
maintain a6.25 megawatt ('MW") (Maximum CapacityAmount, paragraph B-4, Appendix
B) energy facility located near Tamarack, ldaho. The Facility is a QF under the applicable
provisions of PURPA.
L The nameplate rating of this Facility is 6.25 MW. As defined in paragraph
1.24 and paragraph 4.1.4 of the ESA, Evergreen will be required to provide data on the
Facility that ldaho Power will use to confirm that under normal and/or average conditions,
APPLICATION - 4
the Facility will not exceed 10 aMW on a monthly basis. Furthermore, as described in
paragraph 7 .5.2 of the ESA, should the Facility exceed 10 aMW on a monthly basis, ldaho
Power wil! accept the energy (lnadvertent Energy) that does not exceed the Maximum
Capacity Amount, but will not purchase or pay for this lnadvertent Energy.
9. As the Facility is already interconnected and selling energy to ldaho Power,
the ESA specifies a Scheduled First Energy Date and Scheduled Operation Date for this
Facility of June 1,2018, 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 lV and V of this ESA, the parties recognize that information provided
under the previous agreement may still be applicable to this replacement ESA. As
specified in the ESA, ldaho 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 forthe
Seller to be granted a First Energy Date and Operation Date for this replacement ESA.
ln addition, ldaho Power will monitor the ongoing requirements through the full term of
this ESA.
10. The ESA provides that all applicable interconnection charges and monthly
O&M charges under Schedule 72 will be assessed to Seller. A Schedule 72, GlA,
between Evergreen and ldaho Power is being prepared for signatures. PURPA QF
generation must be designated as a network resource ('DNR') to serve ldaho Power's
retail Ioad on its system. ln 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 ldaho Power's non-discriminatory administration of its Open
Access Transmission Tariff (OATT) and maintain compliance with FERC requirements.
APPLICATION - 5
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 ldaho Power makes to Evergreen for purchases of energy will be allowed as
prudently incurred expenses for ratemaking purposes.
!V. MODIFIED PROCEDURE
12. ldaho 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 ef seg.
lf, however, the Commission determines that a technical hearing is required, the
Company stands ready to prepare and present its testimony in such hearing.
13. Because the existing contractwill run its full term and expire on May 31,
2018, the parties request that the Commission set a procedural schedule that would result
in a final Commission determination prior to the expiration of the existing contract, May
31,2018.
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
14. Communications and service of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
Donovan E. Walker
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
dwalker@ida hepower.com
Energy Contracts
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
e ne rqycontracts@ id ahopowe r. com
dockets@ idahopower. com
V!. REQUEST FOR RELIEF
15. ldaho Power respectfully requests that the Commission issue an order: (1)
authorizing that this matter may be processed by Modified Procedure; (2) accepting or
APPLICATION - 6
rejecting the ESA between ldaho Power and Evergreen; and, if accepted, (3) declaring
that all payments for purchases of energy under the ESA between ldaho Power and
Evergreen be allowed as prudently incurred expenses for ratemaking purposes.
Respectfully submitted this 29th day of March 2018.
. WALKER
Attorney for ldaho Power Company
APPLICATION - 7
CERTIFICATE OF SERVICE
t HEREBY CERTIFY that on this 29th day of March 20181 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:
Evergreen Energy, lnc.
Preston N. Carter
GIVENS PURSLEY LLP
601 West Bannock Street
Boise, ldaho 83702
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
Christa
APPLICATION - 8
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPG-E-I g-04
IDAHO POWER COMPANY
ATTACHMENT 1
Aticle
ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPANY
AND
EVERGREEN ENERGY INC
TABLE OF CONTENTS
TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energy
Term and Operation Date
Purchase and Sale ofNet Energy
Purchase Price and Method of Payment
Environmental Attributes
Facility and lnterconnection
Metering, Metering Communications and SCADA Telemetry
Records
Operations
Indemnifi cation and lnsurance
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
Severability
Counterparts
Entire Agreement Signatures
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4
5
6
7
8
9
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t4
l5
t6
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20
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24
25
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Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer's Certifications
Forms of Liquid Security
Levelized Other Facility Energy Prices
Accumulated Overpayment Amount
Insurance Requirements
ENERGY SALES AGREEMENT
(Other Facility l0 average Monthly MW or Less, Levelized Rates)
Project Name: Tamarack CSPP
Project Number: ll7 66004
ENERGY SALES AGREEMENT ("AGREEMENT"), entered into on this A of
20fi"r*""n EVERGREEN ENERGY [NC, an Idaho corporation, (Seller), and
IDAHO POWER COMPANY, an Idaho corporation (Idaho Power), hereinafter sometimes referred to
collectively as "Parties" or individually as "Party."
WITNESSETH:
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, [n consideration of the mutual covenants and agreements hereinafter set forth, the
Parties agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreement and the appendices attached hereto, the following terms
shall have the following meanings:
l.l "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.
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I .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 o'Documents") and to take actions on
behalf of the Seller, and that Idaho 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,
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 1.43.
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 three hundred sixty four (364) days thereafter.
1.6 "Delay Cure Period" - One hundred twenty (120) days immediately following the Scheduled
Operation Date.
1.7 "Delay Damaqes" - ((Current month's Initial Year Monthly Estimated Net Energy Amount as
specified in paragraph 6.2.1 as of the Effective Date 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.
L8 "Delay Period" - AII 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 E of this Agreement. If this calculation
results in a value less than zero (0), the result of this calculation will be zero (0).
I .10 "Designated Dispatch Facility" - Idaho Power's Load Serving Operations, or any subsequent
group designated by Idaho Power.
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1.1 I "Desisnated Network Resource (DNR)" - A resource that is designated for ldaho 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.
l.l2 "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.
I .13 "Environmental Attributes" - means 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 (COz),
methane (CH+), nitrous oxide, hydrofluorocarbons, perfluorocarbons, 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;t 13; 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 (l) MWh of energy. Environmental Attributes do not include (i)
any energy, capacity, reliability or other power attributes from the Facility, (ii) production tax
I 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.
J
t.t4
1.l s
1.16
t.t7
1.18
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.
"Estimated Net Energy Amount" - the monthly estimated Net Energy (kwh) information
provided by the Seller in accordance with paragraph 6.2 and which may be adjusted periodically
throughout the Term of this Agreement in accordance with paragraph 6.2.
"Facility" - That electric generation facility described in Appendix B of this Agreement.
"Facility Nameplate Capacity" - The sum of the individual Generation Unit Nameplate
Capacity's that are installed at this Facility.
"First Enersy Date" - The day commencing at 00:01 hours, Mountain Time, following the day
that Seller has satisfied the requirements of Article [V, and after the Seller requested First Energy
Date.
"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, or b) 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 4! 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.
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I .19 "Generation Interconnection Agreement (GIA)" - 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.
1.20 "Generation Unit" - A complete electrical generation system within the Facility that can generate
and deliver energy to the Point of Delivery independent of other Generation Units within the
same Facility.
l.2l "Heav.v Load Hours (HL)" - The daily hours from hour ending 0700 - 2200 Mountain Time, (16
hours) excluding all hours on all Sundays, New Years Day, Memorial Day, lndependence Day,
Labor Day, Thanksgiving and Christmas.
1.22 "Inadvertent Enerqy" - Electric energy Seller does not intend to generate. lnadvertent energy is
more particularly described in paragraph 7.5 of this Agreement.
1.23 "Interconnection Facilities" - All equipment specified in the GIA.
1.24 "lnitial Capacity Determination" - The process by which ldaho Power confirms that under
normal or average design conditions the Facility will generate at no more than 10 average
megawatts (MW) per month and is therefore eligible to be paid the published rates in accordance
with Commission Order No. 33773 dated June l, 2017 and Order No. 32697 (page 21, full
capacity payment s for rep lacement c ontracts).
1.25 "Lieht 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.
1.26 "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.
1.27 "Market Energy Reference Price" - Eighty-five percent (85%) of the Mid-Columbia Market
Energy Cost.
"Material Breach" - A Default (paragraph 19.2.1) subject to paragraph 19.2.2.
5
1.28
1.29 "Maximum Capacity Amount" - The maximum capacity (MW) of the Facility will be as
specified in Appendix B of this Agreement.
1.30 "Mid- Columbia Market Enerey Cost" - Eighty two and four tenths percent (82.a%) of
the monthly arithmetic average of each day's lntercontinental Exchange ("ICE") daily firm
Mid-C Peak Avg and Mid-C Off-Peak Avg index prices. Each day's index prices will
reflect the relative proportions of peak hours and off-peak hours in the month as follows:
The actual Mid-Columbia Market Energy Cost calculation being:
n
.824 * (I {GCE Mid-C Peak Avg* * HL hours for day) +x:l
(ICE Mid-C Off-Peak Avg* * LL hours for day)) I (n*24))
where n: number of days in the month
If the ICE Mid-C Index 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.
6
l.3l "Monthly Nameplate Energy" - Facility Nameplate Capacity (kW) multiplied by the hours in the
applicable month.
1.32 "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-amperes,
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- I of this Agreement and validated in paragraph 4. I .4 of this Agreement.
1.33 "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
Idaho Power at the Point of Delivery for the fullterm of the Agreement. Net Energy does not
include Inadvertent Energy.
1.34 "Operation Date" - The day commencing at 00:01 hours, Mountain Time, following the day that
all requirements of paragraph 5.2, have been completed and after the Seller requested Operation
Date.
1.35 "Other Facility" - In accordance with IPUC Order 32697 and Order 32802, a generation facility
that is not a Solar, Wind, Seasonal Hydro or Non-Seasonal Hydro generation facility.
1.36 "Point of Delivery" - The location specified in the GIA and referenced in Appendix B, where
Idaho Power's and the Seller's electrical facilities are interconnected and the energy from this
Facility is delivered to the ldaho Power electrical system.
1.37 "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.
1.38 "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
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electricity associated with the REC. One REC represents the Environmental Attributes associated
with the generation of one thousand (1,000) kWh of Net Energy.
1.39 "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.
1.40 "schedule 72" - Idaho Power's Tariff No l0l, ScheduleT2 or its successor schedules as
approved by the Commission.
I .41 "Security Deposit" - $45 per kW Nameplate Capacity of the total capacity of the entire Facility.
1.42 "Security Interest" - A security amount provided by the Seller for the entire term of the
Agreement to reimburse Idaho Power for overpayments to the Seller in the early years of the
Agreement due to the levelized rates should the Agreement be terminated by either party for any
reason prior to the completion of the term of the Agreement.
1.43 "SgASg!" - The three periods identified in paragraph 6.2.1 of this Agreement.
1.44 "station Use" - Electric energy that is used to operate equipment that is auxiliary or otherwise
related to the production of electricity by the Facility.
1.45 "Surplus Energy" - Is (l) Net Energy produced by the Seller's Facility and delivered to the Idaho
Power electrical system during the month which exceeds one hundred ten percent ( I 10%) of the
monthly Estimated Net Energy Amount for the corresponding month specified inparagraph 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 ninety percent (90%) of the monthly 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 ldaho Power
electrical system prior to the Operation Date.
1.46 "Termination Damases" - Financial damages the non-defaulting party has incurred as a result of
termination of this Agreement.
8
1.47 "Total Cost of the Facility" - The total replacement cost of structures, equipment and
appurtenances.
ARTICLE II: NO RELIANCE ON IDAHO POWER
2.1 Seller [ndependent lnvestigation - Seller warrants and represents to ldaho 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.
Seller lndependent 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.
2.2
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.
Oualifving Facility Status - Seller warrants that the Facility is a "Qualifying Facility," as that term
is used and defined in l8 CFR 292.201 et seq. After initial qualification, 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 any time during the term of
this Agreement.
Other Facility Oualification - Seller warrants that the Facility is an Other Facility as that term is
3.2
9
J.J
4.1
defined in paragraph 1.35 of this Agreement. After initial qualification, Seller will take such
steps as may be required to maintain Other Facility status during the full term of this Agreement.
Idaho Power reserves the right to review the Other Facility status of this Facility and associated
support and compliance documents at any time during the term of this Agreement.
ARTICLE IV: CONDITIONS TO ACCEPTANCE OF ENERGY
Prior to the Effective Date of this Agreement, this Facility has been delivering energy to Idaho
Power in accordance with a power sales agreement dated September 16, 1981, that expires on
May 3 I , 201 8, and some of the requirements of this Article are very similar to the requirements
of this previous Agreement. Prior to the First Energy Date and as a condition of ldaho 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 l) accept
the previously provided information as satisfaction of the individual 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.
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, l8
CFP.292.201 et seq. as a certified Qualifying Facility and evidence of compliance with
the eligibility to be classified as an Other Facility as referenced in Commission Order
32697.
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 tdaho providing an opinion that
Seller's licenses, permits, determinations and approvals as set forth in paragraph 4.1 .l
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
l0
4.r.3
4.1.4
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 ( I 991 ).
Commission Approval - Confirm with Idaho Power that Commission approval of this
Agreement in a form acceptable to Idaho Power has been received.
lnitial 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, 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 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 ten (10) MW, the Seller shall
submit detailed, manufacturer, verifiable data of the Nameplate Capacity ratings
of the individual Generation Units to be installed at this Facility. Idaho Power
will verify that the data provided establishes the combined Nameplate Capacity
rating of the Generation Units to be installed at this Facility does not exceed 10
MW, and determine if the Seller has satisfied the Initial Capacity Determination.
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 ten (10) MW,
Idaho Power will review all data submitted by Seller to determine if it is a
reasonable estimate that the Facility will not exceed ten (10) average monthly
MW in any month.
ll
4.r.5
4.1.6
4.t.7
4.1 .8
4.1.9
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 the 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.
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.
Insurance - Submit written proof to Idaho Power of all insurance required in Article XIII.
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.
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.
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 ldaho 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 ldaho 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
t2
4.1.10
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 GIA and complying with the requirements
of this Agreement.
Reserve Accounts - Demonstrate to Idaho Power's satisfaction that the Seller has
established and funded (l) a debt service reserve account in a form and with a fund
holder which complies with paragraph 19.3.2 and (2) demonstrate to Idaho Power's
satisfaction that the Seller has established a maintenance reserve account in a form and
with a fund holder acceptable to Idaho Power. If the Facility has established a
maintenance reserve account in a form and amount that meets or exceeds the
maintenance reserve requirements as defined below for compliance with other parties
having a financial interest in this Facility, the Seller shall provide Idaho Power with
documentation of those requirements and upon Idaho Power's acceptance that the
financial maintenance reserve requirements meet or exceed the requirements within this
Agreement, Idaho Power will accept this financial maintenance reserve account as
meeting these requirements. If Idaho Power accepts, this financial maintenance reserve
account, it will be required that within sixty (60) days of the end of each Contract Year
the Seller provide Idaho Power documentation of the balance within the financial
maintenance reserve account and the previous year's activity within the account. Idaho
Power reserves the right to require the Seller to provide a maintenance reserye account as
specified below at any time during the term of this Agreement if Idaho Power determines
that the Seller's financial maintenance reserve account no longer meets or exceeds these
l3
requirements. Maintenance reserve account shall be structured and funded as follows:
4. I . 10. I All funds will be prudently invested, in a guaranteed, insured account and all
cost of implementing and operating the maintenance reserve account shall be
paid by the Seller. All interest earned on the funds on deposit will be retained
in the maintenance reserve account. At the end of the term of this Agreement,
any balance remaining in the maintenance reserve account shall be the property
of the Seller.
4.1.10.2 Within sixty (60) days after the completion of each Contract Year, the Seller will
deposit cash in the maintenance reserve account in an amount equal to, or
exceeding five percent (5%) of the Facility's estimated gross income for the
ensuing Contract Year, less an amount equal to the Facility's actual maintenance,
repair and replacement expenses (maintenance expenses) incurred during the
prior Contract Year. At Seller's option, the cash required hereunder to be
maintained in such reserve may be replaced by an irrevocable standby letter of
credit in the same amount.
4.1.10.3 The maximum amount of required deposit retained in the maintenance reserve
account shall be S500,000. This maximum amount will be adjusted either
upward or downward to reflect current replacement cost of a complete
turbine/generator. This adjustment will be made at the beginning of each third
(3'd) contract year and the replacement value determined by the replacement
cost valuation methods as described within Appendix H, item 4. [n the event
this adjustment results in a balance in this account exceeding ten percent (10%)
of the actual replacement cost of a complete turbine/generator then the Seller
may request a disbursement of funds as specified in paragraph 4.1.10.6.
4.1 .10.4 At the time Seller makes the deposit described in paragraph 4.1.10.2, Seller will
provide Idaho Power with an accurate, verifiable report showing the prior
Contract Year's actual maintenance expenses, identified by appropriate FERC
t4
maintenance account number, and the estimate of the Facility's gross income for
the ensuing Contract Year used to compute the deposit amount, together with
documentation supporting the estimate of gross income.
4.1.10.5 If at any time it appears that the maintenance expense for that Contract Year will
exceed five (5%) of the Facility's estimated gross income for that Contract Year,
the Seller may request that Idaho Power consent to the release of funds from the
maintenance reserve account in an amount sufficient to pay the anticipated
additional maintenance expenses. The request must include documentation
supporting the Seller's projection of excess maintenance expense, identified by
appropriate FERC maintenance account number, and such documentation shall
be submitted to Idaho Power. Upon approval by Idaho Power, the required funds
will be released to Seller in accordance with Paragraph 4.1.10.6.
4.1 .10.6 Control of the maintenance reserve account will be maintained by Idaho Power
through the requirement of dual signatures on the account. The only authorized
signers will be the Chief Operating Officer and the Chief Financial Officer of
Idaho Power (or their respective designees) and the Treasurer of Seller (or his/her
respective designee). Accordingly, funds will only be released from the
maintenance reserve account upon the signatures of both Idaho Power authorized
signers or one Idaho Power authorized signer and Seller's authorized signer.
4.1.10.7 At the end of each Contract Year, Seller will provide Idaho Power with evidence
of compliance with the maintenance reserve account requirements set out in this
Agreement. This evidence of compliance will be provided in a manner and form
acceptable to Idaho Power. The maintenance reserve fund will be subject to the
lien rights described in paragraph 4.1 .1 I below.
4.1.1 I Security Interests - Provide Idaho Power with acceptable security against Seller's default
under this Agreement. Acceptable security will conform to Commission Order No. 21690
andNo.21800 and may include, but will not be limited to (l) title insurance, security
l5
interests in the real property associated with the Facility, equipment, fixtures, contracts,
permits, easements, rights-of-way, land use agreements, funds held in escrow in which
Seller has an interest and that relate to the operation of the Facility, and other reasonable
security arrangements consistent with the Facility's financing and ownership arrangements;
or (2) the seller may post liquid security in an amount equal to at least thirty five percent
(35%) of the Accumulated Overpayment Amount speci{ied for that year in Appendix F and
in a form as specified in Appendix D.
4.1 .l I .l Idaho Power's security interests will be superior and senior to all liens other than
the first mortgage lien and other security interests permitted in accordance with
paragraphs 4.1.11.2. The Seller shall be responsible for all costs reasonably
incurred by Idaho Power to review and perfect this security interest not to exceed
$15,000.
4.1.11.2 If Seller desires to incur a first mortgage lien or other security interests that will
be superior to Idaho Power's security interests in the Facility, at least twenty-one
(21) days prior to their execution, Seller shall provide Idaho Power with draft
copies of the deeds of trust, mortgages and other security agreements that will
be used to secure such first lien. Upon their execution Seller shall provide Idaho
Power with copies of the executed first lien documents. The executed first lien
documents shall not be assigned, amended, modified, or extended, and no
replacement or refinancing of any nature shall be undertaken, without Idaho
Power's prior written consent which consent shall not be unreasonably withheld.
In no event will the amount of any first mortgage lien exceed ninety percent
(90%) of the total replacement cost of this Facility. The total amount of all
refinanced or replaced first liens shall not exceed the unpaid principal balance of
the first mortgage liens they replace.
4.1 .l I .3 Other than the first mortgage liens permitted herein, or temporary mechanic's,
statutory or similar liens incurred in the ordinary course of business in an amount
l6
4.1.11.4
not to exceed in aggregate $50,000, Seller will not permit any liens or
encumbrances of any nature whatsoever to be placed on the Facility without
Idaho Power's prior written consent, which consent will not be unreasonably
withheld. If any unpermitted lien or encumbrance is placed on the Facility,
Seller will provide Idaho Power with a bond, insurance or other security
acceptable to Idaho Power in an amount sufficient to secure the full discharge of
such unpermitted lien or encumbrance.
During the remaining term of this Agreement, Seller shall maintain compliance
with all requirements of Idaho Power's security interests described above in
paragraph 4.1.1 I of this Agreement and Commission Order No. 21690. Seller's
failure to comply with those requirements, will be an event of default and in
addition to any other remedies available under this Agreement, Commission
Order No. 21690, and the security interests, Seller will be required by Idaho
Power to post liquid security ("Performance Security") in a form as specified in
Appendix D in an amount equal to at least thirty five percent (35%) of the
Accumulated Overpayment Amount specified for that year in Appendix F.
Failure to maintain and provide the liquid security required by this Agreement
and Commission Order No. 2 I 690 and No. 21 800 shall be an event of default.
4.1.12 Written Acceptance - Request and obtain written conf,rrmation 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 ldaho Power.
t7
5.1
5.2
ARTICLE V: TERM AND OPERATION DATE
Term - Subject to the provisions of paragraph5.2 below, this Agreement shall become effective on
the Effective Date and shall continue in full force and effect for a period of twenty years (20)
Contract Years from the Operation Date, except that if the Operation Date is granted for a date that
is after the Scheduled Operation Date identified in Appendix B, in which case the Term shall start
on the Scheduled Operation Date.
Operation Date - Prior to the Effective Date of this Agreement, this Facility has been delivering
energy to Idaho Power per the Power Sales Agreement dated September 16, 1981, that expires on
May 31, 2018. Idaho Power shall review the previously provided information and at Idaho Power's
sole discretion may l) 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:
a) the Facility Nameplate Capacity as identif,red in Appendix B, has achieved a First
Energy Date.
b) Seller has demonstrated to [daho 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) Ensineer's Certifications - Submit an executed Engineer's Certification of Design &
Construction Adequacy and an Engineer's Certification of Ongoing Operations and
Maintenance (O&M) as described in Commission Order No. 21690. This certificate
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.
18
5.3 Operation Date Delay - Seller shall cause the Facility to achieve the Operation Date, for the initial
Generation Unit, on or before the Scheduled Operation Date, and subsequent Generation Unit(s)
within sixty (60) months of the 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 GIA) that are not caused by Idaho Power or
Force Majeure 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.
Termination - If Seller fails to achieve the Operation Date prior to the Scheduled Operation Date
or within 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.
Delav Damages billins and payment - Idaho Power shall calculate and submit to the Seller any
Delay Damages, to be paid to Idaho Power within fifteen (15) days after the end of each month or
within 30 days of the date this Agreement is terminated by Idaho Power.
Termination Damages billins and pavment - Idaho Power shall calculate any Termination Damages
due Idaho Power within thirty (30) days after this Agreement has been terminated.
Seller Payment - Seller shall pay Idaho Power any calculated Delay or Termination Damages within
seven (7) days from 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 and Idaho
Power shall draw funds from the Security Deposit provided by the Seller in an amount equal to the
calculated damages.
Security Deposit - Within thirty (30) days of the date of a final non-appealable Commission Order
approving this Agreement as specified in Article XXI, the Seller shall post and maintain liquid
security in a form as described in Appendix D equal to or exceeding the amount specified within
this Agreement as the Security Deposit until such time as the Security Deposit is released by Idaho
Power as specified in paragraph 5.8.1. Failure to post this Security Deposit in the time specified
above will be a Material Breach of this Agreement and Idaho Power may terminate this Agreement.
5.8.1 ldaho Power shall release any remaining Security Deposit provided by Seller after either
t9
5.4
5.5
5.6
5.7
5.8
6.1
6.2
the Facility has achieved its Operation Date or this Agreement has been terminated and
only after all Delay Damages and Termination Damages have been paid in fuIl to Idaho
Power.
ARTICLE VI: PURCHASE AND SALE OF NET ENERGY
Net Energy Purchase and Deliverv - Except when eitherParty'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.
Estimated Net Energy Amounts - Neither the initial year's monthly estimated Net Energy amounts
nor any adjusted monthly estimated Net Energy amounts provided during the term of this
Agreement shall exceed ten (10) average monthly MW nor be greater than the Maximum Capacity
(measured in kW) multiplied by the hours in the applicable month.
6.2.1 tnitial Year Monthly Estimated Net Enersy Amounts - Seller intends to produce and deliver
Net Energy in the following monthly amounts:
Month kWh
Season I
Season 2
Season 3
March
April
May
July
August
November
December
June
September
October
January
February
1,801,980
1,726,267
2,132,953
2,616,883
2,763,982
1,803,337
1,703,241
2,208,096
2,093,309
1,743,486
1,828,044
1,670,316
20
6.2.2
6.2.3
Seller's Adjustment of lnitial Year Monthly Estimated Net Energy Amounts
Prior to the Operation Date, the Seller may revise all of the previous initial year monthly
Estimated Net Energy Amounts by providing written notice to Idaho Power in accordance
with paragraph 25.1.
Seller's Adjustment of Estimated Net Energy Amounts
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
September
October
Future monthly Estimated Net Energy Amounts elieible to be revised
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
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 ad&ess specihed in
paragraph25.l.
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 Estimated Net Energy Amounts.
6.2.4 Idaho Power Adjustment of Estimated Net Energy Amount - 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
2t
declared Suspension of Energy Deliveries is accepted by Idaho Power, the 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:
22
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
Idaho 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.
TGU Sum of all of the individual generator ratings of the Generation
Units at this Facility as specified in Appendix B of this
agreement.
RSH Actual hours the Facility's Net Energy deliveries were either
reduced or suspended under paragraph 12.2.1 or 12.3.1
TH Actual total hours in the current month
formula
Adjusted
Estimated
Net Energy (r SGU x NEATGU 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.
6.3 Failure to Deliver Minimum Estimated Net Energy Amounts - Unless excused by an event of
Force Majeure, Seller's failure to deliver Net Energy in any Contract Year in an amount equalto
23
Pesrrlfino
NEA
7.1
7.2
t.5
7.4
7.5
at least ten percent (10%) of the sum of the monthly Initial Year Estimated Net Energy Amounts
as specified in paragraph 6.2 shall constitute an event of default.
ARTICLE VII: PURCHASE PRICE AND METHOD OF PAYMENT
Base Energy Heavy Load Purchase Price - For all Base Energy received during Heavy Load Hours,
Idaho Power will pay the monthly levelized Base Energy Heavy Load Purchase Price as specified
in the applicable Appendix E.
Base Enersy Lieht Load Purchase Price - For all Base Energy received during Light Load Hours,
Idaho Power will pay the levelized Base Energy Light Load Purchase Price as specified in the
applicable Appendix E.
All Hours Energy Price - The price to be used in the calculation of the Surplus Energy Price and
Delay Damage Price shall be the levelized All Hours Energy Price as specified in the applicable
Appendix E.
Surplus Enerey 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 specified in
paragraph 7.3, whichever is lower.
lnadvertent Enersy -
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 ten
thousand (10,000) kW multiplied by the hours in the specific month in which the
energy was delivered. (For example January has744 hours. 744 hours multiplied by
10,000 kW : 7 ,440,000 kwh. Energy delivered in January in excess of 7,440,000
kWh in this example would be lnadvertent Energy.)
7 .5.2 Although Seller intends to design and operate the Facility to generate no more than
ten ( I 0) 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.
24
7.6
7.7
8.1
9.1
7.5.3 Delivering lnadvertent 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.
Payment Due Date - Undisputed Base Energy and Surplus Energy payments, less any payments
due to ldaho 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.
Continuine 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
PowerCompanyv.IdahoPublicUtilitiesCommissionandAftonEnergy.Inc., 107Idaho781,693
P.2d 427 (1984), Idaho Power Company v. Idaho Public Utilities Commission,l0T ldaho 1122,
695P.2d 1261 (1985),AftonEnergy.Inc.v. IdahoPowerCompany, 111Idaho925,729 P.2d400
(1986), Section 210 of the Public Utility Regulatory Policies Act of 1978 and 18 CFR 5292.303-
308.
Pursuant to Commission Order 32697 and32802 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.
ARTICLE IX: FACILITY AND INTERCONNECTION
Desisn 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.
25
ARTICLE VIII: ENVIRONMENTAL ATTRIBUTES
ARTICLE X: METERNG. METERING COMMUNICATIONS AND SCADA TELEMETRY
l0.l 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.
10.2 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
transmitting the metering data specified in paragraph 10.1 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 GIA.
10.3 Supervisory Control and Data Acquisition (SCADA) Telemetry - In addition to the requirements
of paragraph 10.1 and 10.2, ldaho Power may require telemetry equipment and
telecommunications which will be capable of providing Idaho Power with continuous
instantaneous SCADA 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.
26
11.1
tt.2
t2 .1
t2 .2
ARTICLE XI - RECORDS
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, lnadvertent Energy and maximum hourly generation (in kW)
and be recorded in a form and content acceptable to Idaho Power. Monthly records shall be retained
for a period ofnot less than hve years.
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 hourly
generation (in kW).
ARTICLE XII: OPERATIONS
Communications - Idaho Power and the Seller shall maintain appropriate operating
communications through Idaho Power's Designated Dispatch Facility in accordance with the GIA.
Acceptance ofEnergy -
12.2.1 Idaho Power shall be excused from accepting and paying for Net Energy or accepting
lnadvertent 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 intemrpted due an event of Force Majeure or
Forced Outage.
b.) If intemrption of energy deliveries is allowed by Section 210 of the Public
Utility Regulatory Policies Act of 1978 and 18 CFR 5292.304
c.) If temporary disconnection and./or intemrption of energy deliveries is in
accordance with Schedule 72 or other provisions as specified within the
GIA.
d.) If Idaho Power determines that curtailment, intemrption or reduction of
Net Energy or Inadvertent Energy deliveries is necessary because of line
27
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
lnterconnection 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
GIA 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
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 Appendix E. Idaho Power will have no responsibility to pay
for any other costs, Iost revenue or consequential damages the Facility may incur.
12.3 Seller Declared Suspension of Enerey Deliveries
12.3.1 If the Seller's Facility experiences a Forced Outage, and 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
28
notification provided by the Seller. ln 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 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 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.
12.4 Scheduled Maintenance - On or before January 31't 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 hrst 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
29
12.5
12.6
l3.l
13.2
of the Seller's timetable for scheduled maintenance will take into consideration Prudent Electrical
Practices, ldaho 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 publicly available information in regards to Idaho Power plarured 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 intemrpt 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 intemrption, curtailment, or reduction of electrical energy deliveries to
Idaho Power.
ARTICLE XIII: INDEMNIFICATION AND INSURANCE
lndemnification - 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 indemnifring 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.
lnsurance - During the term of this Agreement, Seller shall secure and continuously carry insurance
as specified in Appendix G.
30
14.1
ARTICLE XIV: FORCE MAJEURE
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 ofreasonable 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:
(l) 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
particulars of the occurrence.
(2) The suspension of performance shall be of no greater scope and of no longer
duration than is required by the event of Force Majeure.
(3) No obligations of either Party which arose before the occurrence causing the
suspension of performance and which could and should have been fully performgd
before such occurrence shall be excused as a result ofsuch occurrence.
ARTICLE XV: LIABILTTY DEDICATION
l5.l UsrXatia! lfllabll y.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.
3l
Neither party shall be liable to the other for any indirect, special, consequential, nor punitive
damages, except as expressly authorized by this Agreement.
15.2 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.
l6.l
ARTICLE XVI: SEVERAL OBLIGATIONS
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 ever 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: WAIVER
l7.l 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.
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.
32
ARTICLE XIX: DISPUTES AND DEFAULT
19.1 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 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.
19.2.2 Material Breaches - The notice and cure provisions in paragraph 19.2.1 do not apply to
defaults identified in this Agreement as Material Breaches. 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
ldaho Power with the following:
19.3.1 Insurance - Evidence of compliance with the provisions of Appendix G. If Seller fails
to comply, such failure will be a Material Breach and may only be cured by Seller
supplying evidence that that required insurance coverage has been replaced or
reinstated.
aaJJ
19.3.2 Debt Service Reserve Account - The Seller will establish a debt service reserve
account. If the Facility has established a debt service reserve account in a form and
amount that meets or exceeds the Debt Service Reserve Account requirements as
defined below for compliance with other parties having a financial interest in this
Facility, the Seller shall provide Idaho Power with documentation of those requirements
and upon Idaho Power's acceptance that the financial debt service reserve requirements
meet or exceed the requirements within this Agreement, Idaho Power will accept this
financial debt service reserve account as meeting these requirements. If Idaho Power
accepts this financial debt service reserve account it will be required that within 60 days
of the end of each Contract Year the Seller provide Idaho Power documentation of the
balance within the financial debt service reserve account and the previous year's activity
within the account. Idaho Power reserves the right to require the Seller to provide a
Debt Service Reserve Account as specified below at any time during the term of this
Agreement if Idaho Power determines that the Seller's financial debt reserve account
no longer meets or exceeds these requirements. Said debt service reserve account will
be separate from the maintenance reserye account and shall be structured as follows:
19.3.2.1 All funds will be prudently invested, in a guaranteed, insured account and all
cost of implementing and operating the Debt Service Reserve Account shall
be paid by the Seller. All interest earned on the funds on deposit will be
retained in the Debt Service Reserve Account. At the end of the term of this
Agreement, any balance remaining in the Debt Service Reserve Account shall
be the property of the Seller.
19.3.2.2 Control of the Debt Service Reserve Account will be maintained by Idaho
Power through the requirement of dual signatures on the account. The only
authorized signers will be the Chief Operating Officer and the Chief Financial
Officer of Idaho Power (or their respective designees) and the Treasurer of
Seller (or his/her respective designee). Accordingly, funds will only be
34
19.3.2.3
19.3.2.4
19.3.2.5
released from the Debt Service Reserve Account upon the signatures of both
Idaho Power authorized signers or one Idaho Power authorized signer and
Seller's authorized signer.
During the period of time in which the Facility acts as security for a first
mortgage lien which is senior to Idaho Power's security interest in the Facility
as described in paragraph 4.l.ll, Seller shall maintain a debt service reserve
account in cash or an irrevocable standby letter of credit in an amount equal
to twenty percent (20%) of the Facility's estimated gross Contract Year
revenue rounded to the nearest $1,000. The estimated gross Contract Year
revenue is calculated to be the sum of the monthly Net Energy Amounts
specified in paragraph 6.2 multiplied by the All Energy Price specified in
paragraph7.3.
During the period when the Facility is security for a first mortgage lien that
is senior to Idaho Power's lien, funds from the debt service reserve account
will only be released to the holder of the first mortgage lien. Funds from said
account shall be released only when, and only to the extent that Seller certifies
to Idaho Power that after payment of all operating costs, the Facility's
revenues are insufficient to make full debt service and/or lease payments on
the Facility.
Upon full satisfaction of the above-referenced first mortgage lien and when
Idaho Power's security interest becomes the senior security interest in the
Facility, a withdrawal from the Debt Service Reserve Account may be
requested by the Seller for the amount in the debt service reserve account
which exceeds five percent (5%) of the Facility's estimated gross Contract
Year revenue rounded to the nearest $1,000. Seller shall maintain a debt
service reserve account in cash or an irrevocable standby letter ofcredit in an
35
19.3.3
amount equal to five percent (5%) of the Facility's estimated gross Contract
Year revenue rounded to the nearest $1,000.
19.3.2.6 During the period when Idaho Power's security interest is the senior security
interest in the Facility, funds from the debt service reserve account will only
be released to pay operating costs for the Facility.
19.3.2.7 For purposes of the debt service reserye account, operating costs are limited
to those costs necessary for the operation of the Facility such as taxes,
insurance expenses, lease payments and other ordinary and necessary
operating expenses. Operating costs shall not include any disbursements
other than lease payments which would constitute a profit or return on
investment.
19.3.2.8 After any release of funds from the debt service reserve account, Seller shall
be obligated to restore the debt service reserve account to the amounts
provided for in paragraphs 19.3.2.3 or 19.3.2.5, whichever is applicable, prior
to Seller disbursing funds which would constitute a profit or return on
investment. Until the debt service reserve account is fully restored, Seller
will, within sixty (60) days of the completion of each Contract Year, provide
Idaho Power with a report prepared by Seller's outside accountants showing
Seller has not breached its obligations under this paragraph 19.3.2.
19.3.2.9 Any breach of paragraph 19.3.2 by Seller will constitute a Material Breach of
this Agreement.
Engineer's Certifications - Every three (3) years after the Operation Date, Seller will
supply ldaho Power with a completed Certification of Ongoing Operations and
Maintenance form as specified in Appendix C. The certification will be from a
Registered Professional Engineer licensed in the State of Idaho. 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
36
20.1
2t.t
22.1
19.3.4 Licenses/Permits/Determinations - During the fulI 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: GOVERNMENTAL AUTHORIZATION
This Agreement is subject to the jurisdiction of those governmental agencies having control over
either Party of this Agreement.
ARTICLE XXI: COMMISSION ORDER
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.
ARTICLE XXII: SUCCESSORS AND ASSIGNS
This Agreement and all of the terms and provisions shall be binding upon and inure to the benefit
of the respective successors. Neither this Agreement nor any rights or obligations of either Party
hereunder may be assigned, in whole or in part, without the prior written consent of both Parties,
which consent shall not be unreasonably withheld. Any party with which Idaho Power may
consolidate, or into which it may merge, 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. A
transfer or change in the person or entities who control ten percent or more of the equity securities
37
23.1
24.1
or voting interests of Seller (whether in a single or multiple separate transactions resulting in such
a change in control of equity interests or voting securities) shall be deemed an assignment of this
Agreement requiring prior written consent of Idaho Power for purposes of the foregoing. 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 XXIII: MODIFICATION
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
Each Party shall pay befbre 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 lnterconnection Facilities.
38
25.r
ARTICLE XXV: NOTICES AND AUTHORIZED AGENTS
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:
To Seller:
Original document to:
Name:
Address:
Evergreen Energy, Inc.
Attn: Rodney Krogh
P.O. Box H
New Meadows,ID 83654
208-347-2lll ext228
markkro gh (@ front iernet. net
Telephone:
E-mail:
To Idaho Power:
Originaldocument to:
Vice President, Power Supply
Idaho Power Company
PO Box 70
Boise, Idaho 83707
Email : enersycontracts(d idahopower.com
Copy of document to:
Cogeneration and Small Power Production
Idaho Power Company
PO Box 70
Boise, Idaho 83707
E-mail : enersycontracts(@ idahopower.com
Either Party may change the contact person and/or address information listed above, by providing
written notice from an authorized person representing the Party
39
25.2 AuthorizedAeent(s)
Rodney Krogh
P.O. Box H
New Meadows,ID 83654
Mark H Krogh
P.O. Box H
New Meadows, ID 83654
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.
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 38 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 4l
C.F.R. 60-1.4,41 C.F.R. 60-250.5, and 41 CFR 60-741.5 are incorporated herein by reference.
Prior to the Seller executing this Agreement, the Seller shall have:
a) Submitted an interconnection application for this Facility and is in compliance
with all payments and requirements of the interconnection process.
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 Designated Network Resource. If
40
26.2
26.3
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 33773 dated June 1,2017 , provides the current
published avoided costs for Non-Seasonal Hydro Facilities, Seasonal Hydro Facilities,
Other Facilities, Solar Facilities, and Wind Facilities. Commission Order 32697 provides
for fuIl capacity payments for existing projects that have requested replacement contracts
after their existing contract expires.
This Agreement includes the following appendices, which are attached hereto and included by
reference:
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer' s Certifications
Forms of Liquid Security
Levelized Other Facility Energy Prices
Accumulated Overpayment Amount
Insurance Requirements
4t
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
27.1
28.r
ARTICLE XXVII: SEVERABILITY
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
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.
42
29.1
By
Dated
ARTICLE XXIX: ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement of the Parties conceming the subject matter
hereof and supersedes all prior or contemporaneous oral or written agreements between the
Parties concerning the subject matter hereof.
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 Evergreen Energy Inc
By
Tessia Park
Vice President, Power Supply
Rodney Krogh
President
"Seller"
3-H-001$Dated t
"Idaho Power"
43
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 83707
The meter readings required on this report will be the readings on the Idaho Power meter equipment
measuring the Facility's total energyproduction 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:
44
APPENDX A
Project Name
Address
City
Idaho Power Company
Cogeneration and Small Power Production
MONTHLY POWER PRODUCTION AND SWITCHING REPORT
Month Year
Project Number:
Phone Number:
State zip
Meter Number:
End of Month kWh Meter Reading:
Beginning of Month kWh Meter:
Difference:
Times Meter Constant:
kWh for the Month:
Metered Demand:
Breaker Opening Record
Date Time Meter :k Reason
Metered
Maximum Generation
kw
Net Generation
Breaker Closing Record
Date Time Meter
Facility
Output
Station
Usage
1,
3
4
5
6
7
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)
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
45
Date
A-2 AUTOMATED METER READTNG 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 CONTACT INFORMATION
Seller' s Contact Information
Project Manasement
Name:
Telephone Number:
Cell Phone:
Mark H Kroeh
208-34't-2rtt
208-630-4276
24-Hour Project Operational Contact
Name: Operator On Site
TelephoneNumber: 208-347-2216
Proiect On-sile Contact information
Name:
Telephone Number:
Scott Reitz
208-347-22t6
46
APPENDX B
FACILITY AND POTNT OF DELTVERY
Project Name: Tamarack CSPP
Project Number: I 17 66004
DESCRIPTION OF FACILITY
Please provide the specifications and manufacturer of your turbine and generator here and the
process you use to create power
Facility Nameplate Capacity: 6.25 MW
Var Capability (Both leading and laggtng) Leading is 3.75 MVAR Lagging is 3.75 MVAR. Unity
power factor.
B-2 LOCATION OF FACILITY
Near: At the Evergreen Forest Products facility in Tamarack Idaho
Actual or nearest physical street address: 3555 U.S. 95, Council, ID 83612
GPS Coordinates: Latitude Decimal Degrees -116.387137 Longitude Decimal Degrees 44.954660
State:Idaho County:Adams
Description of Interconnection Location: At the Evergreen Forest Products facility in Tamarack
Idaho. The project's location is NW l4 S30, Tl9N, RlE, Tamarack, Idaho.
B-3 SCHEDULED FIRST ENERGY AND OPERATION DATE
As this Facility is interconnected and already delivering energy to Idaho Power pursuant to a power
sales agreement that will expire on May 31 , 201 8, it is expected that the First Energy Date and the
Operation Date for this Agreement shall both occur at the same time. Assuming this Agreement is
completed and approved by the Commission prior to May 3l , 201 8, and the Seller has completed
all requirements of Article IV and V of this Agreement, the First Energy Date and Operation Date
shall occur on June l, 2018, simultaneously with the expiration of the prior energy sales agreement.
If any of these conditions are not completed prior to June l, 2018, the Scheduled Operation Date
47
of this Facility shall be no later than 120 days after the Commission has approved this Agreement.
B-4 MAXIMUM CAPACITY AMOUNT:
This value will be 6.25 MW which is consistent with the value provided by the Seller to Idaho
Power in accordance with the GIA. This value is the maximum energy (MW) that potentially could
be delivered by the Seller's Facility to the ldaho Power electrical system at any moment in time.
B-5 POINT OF DELTVERY
"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.
8-6 LOSSES
Idaho Power sent Tamarack Energy Partnership a letter dated November 18, 2009, confirming that
the loss compensation for the Tamarack CSPP meter was set at0.8oh.If the interconnection of this
existing Facility is modified in accordance with this new Energy Sales Agreement and/or the GlA,
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 at0.8oh of the kWh energy
production recorded on the Facility generation metering equipment. If at any time during the term
of this Agreement, ldaho 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.
B-7 DESIGNATED NETWORK RESOURCE (DNR)
This Facility is an Idaho Power DNR pursuant to an existing energy sales agreement that will expire
on May 31,2018. If this Agreement is l) 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
48
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 ldaho Power needs to prepare the DNR application is specihc 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 1) 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.
49
APPENDX C
ENGINEER'S CERTIFICATION
OF
OPERATIONS & MAINTENANCE POLICY
The undersigned on behalf of himselflherself and
hereinafter collectively referred to as "Engineer," hereby states and certifies to the Seller as
follows:
1. That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
2. That Engineer has reviewed the Energy Sales Agreement, hereinafter 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.
referred to as the "Project."
and is hereinafter
4. That the Project, which is commonly known as the Project, is located in
Section Township Range Boise Meridian,County,Idaho.
5. That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to ldaho 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
vears.
50
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.
By
(P.E. Stamp)
Date
5l
APPENDIX C
ENGINEER' S CERTIFICATION
ONGOING OPERATIONS AND MAINTENANCE
The undersigned on behalf of himself/herself
hereinafter collectively referred to as "Engineer," hereby states and
certifies to the Seller as follows
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 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, ldaho
5. That Engineer recognizes that the Agreement provides for the Project to furnish electrical energy
to ldaho 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.
OF
and
2
52
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.
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.
By
(P.E. Stamp)
Date
53
APPENDIX C
ENGINEER'S CERTIFICATION
DESIGN & CONSTRUCTION ADEQUACY
The undersigned on behalf of himselflherself and
hereinafter collectively referred to as "Engineer", hereby states and certifies
to Idaho Power as follows:
l. 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 to as the
"Agreement", between ldaho Power as Buyer, and as Seller, dated
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
OF
is hereinafter referred to as the "Project".
4. That the Project, which is commonly known as the 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 ldaho 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.
54
aJ.
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.
ll. That Engineer recognizes that Idaho Power, in accordance with paragraph5.2 of the
Agreement, in intercorurecting 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
55
APPENDX D
FORMS OF LIQUID SECURITY
The Seller shall provide Idaho Power with commercially reasonable security instruments such as
Cash, Cash Escrow Security, Guarantee or Letter of Credit as those terms are defined below or
other forms of liquid financial security that would provide readily available cash to Idaho Power
to satisfy the Security Deposit requirement and any other security requirements within this
Agreement.
For the purpose of this Appendix D, the term "Credit Requirements" shall mean acceptable
financial creditworthiness of the entity providing the security instrument in relation to the term of
the obligation in the reasonable judgment of Idaho Power, provided that any guarantee and/or
Letter of Credit issued by any other entity with a shortterm or long-term investment grade credit
rating by Standard & Poor's Corporation or Moody's lnvestor Services, Inc. shall be deemed to
have acceptable financial creditworthiness.
l. Cash - Seller shall deposit cash in the amount of the required Security Deposit with Idaho
Power. Idaho Power will not be responsible to calculate or pay any interest on these funds
deposited with Idaho Power.
2. Cash Escrow Security - Seller shall deposit funds in an escrow account established by the
Seller in a banking institution acceptable to both Parties equal to the required security
amount(s). A single escrow account may be established for all security requirements,
however detailed accounting of the individual security requirements must be maintained by
the Seller and Seller shall be obligated to maintain the appropriate amounts to satisfy each
security requirement within the individually identified accounts. The Seller shall be
responsible for all costs
56
3. Guarantee or Letter of Credit Security - Seller shall post and maintain in an amount equal to
the Security Deposit: (a) a guaranty from aparly that satisfies the Credit Requirements, in a
form acceptable to Idaho Power at its discretion, or (b) an irrevocable Letter of Credit in a
form acceptable to Idaho Power, in favor of Idaho Power. The Letter of Credit will be issued
by a financial institution acceptable to both parties. A single aggregate Guarantee or Letter of
Credit may be provided for all security requirements, however detailed accounting of the
individual security requirements must be maintained by the Seller and Seller shall be
obligated to maintain the appropriate amounts to satisfu each security requirement within the
individually identified accounts. The Seller shall be responsible for all costs associated with
establishing and maintaining the Guarantee(s) or Letter(s) of Credit.
57
E-l
E-2
E-3
APPENDIX E
LEYELIZED OTHER FACILITY ENERGY PRICES
(Prices based on 6,250 kW of Capacity)
Base Energy Hea{v Load Purchase Price - For all Base Energy received during Heavy Load Hours,
Idaho Power will pay the levelized energy price for a Facility scheduled to come on-line during
calendar year 2018, for a Contract Term of twenty (*20") years in accordance with Commission
Order 33773 dated June l, 2017 , with full capacity payments per Commission Order 32697 and
with seasonalization factors as specified below:
Season I -(73.50%)
Mills/kWh
50.10
Season2-(120.00%)
Mills/kWh
8l .80
Season3-(100.00%)
Mills/kWh
68.17
Base Energy Light Load Purchase Price - For all Base Energy received during Light Load Hours,
Idaho Power will pay the levelized energy price for a Facility scheduled to come on-line during
calendar year 2018, for a Contract Term of twenty (20) years in accordance with Commission Order
33773 dated June 1, 2017, with full capacity payments per Commission Order 32697 and with
seasonalization factors as specified below:
Season I -(73.50%)
Mills/kWh
44.75
Season2-(120.00%)
Mills/kWh
73.07
Season3-(100.00%)
Mills/kWh
60.89
All Hours Energy Price - The price to be used in the calculation of the Surplus Energy Price and
Delay Damage Price shall be the levelized energy price for a Facility scheduled to come on-line
during calendar year 2018, for a Contract Term of twenty (20) years in accordance with
Commission Order 33773 dated June l, 2017 , with full capacity payments per Commission Order
32697 and with seasonalization factors as specified below:
Season I -(73.50%)
Mills/kWh
47.72
Season2-(120.00%)
Mills/kWh
77.92
Season3-(100.00%)
Mills/kWh
64.93
58
ACCUMULATED OVERPAYMENT AMOLINT
The accumulated total of:
The monthly Initial Year Monthly Net Energy Amounts specified in paragraph 6.2.1 multiplied by the All
Hours Energy Price (Mills/kwh) specified in paragraph 7.3 less the same monthly Initial Year Monthly Net
Energy Amounts specified in paragraph 6.2.1 multiplied by the monthly, seasonalized, Non Levelized rates
where the seasonalization factors are the same as identified in paragraph 7.3 and Non Levelized rates are
in accordance with IPUC order No. 33305 for all expired months of this Agreement and the next 12 months.
In addition, a cumulative interest Amount will be calculated on the expired month's Accumulated
Overpayment Amount and included in the Accumulated Overpayment Amount based upon the Idaho Power
overall allowed rate of return in the Idaho jurisdiction, which at the time of the signing of this agreement is
seven and eighty sixth one hundredths percent (7 .86 %).
This Accumulated Overpayment Amount will be initially calculated prior to the First Energy Date and then
recalculated annually at the end of each Contract Year.
59
APPENDX F
APPENDIX G
TNSURANCE REQUIREMENTS
The Seller shall secure and continuously carry insurance as specified within this Appendix for the term of
the Agreement.
Insurance Requirements:
1. 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 lnsurance 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 ten (10) days of the annual anniversary
of the Operation Date, the Seller shall provide a Certificate of lnsurance in the name of Idaho
Power Company and list Idaho Power Company as an Additional Insured Endorsement and
Waiver of Subrogation Endorsement. The Certificate of Insurance shall evidence the
appropriate insurance coverage as required below:
a. 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 lnsurance
Industry Utility practices for similar property.
b. All Risk Property Insurance with minimum limits not less than eighty percent
(80%) of the Total Cost of the Facility. The Property Insurance coverage must be
written on a replacement cost basis and will include:
60
i. Standard fire policy
ii. Extended coverage endorsement; and
iii. Vandalism and malicious mischief endorsement.
iv. The deductible for such insurance shall be consistent with current
Insurance Industry Utility practices for similar property.
c. Boiler and Machinery insurance with minimum limits not less than eighty
percent (80%) of the total replacement cost of the equipment covered in (a)
below:
i. All boiler and machinery coverage must be written on a "comprehensive
form" basis to provide coverage against the sudden and accidental
breakdown of all boilers, machinery and electrical equipment, turbines,
generators, and switchgear.
ii. Coverage under this insurance must be written on a replacement cost
basis; and
iii. The deductible for such insurance shall be consistent with current
. Insurance Industry Utility practices for similar property.
d. Earthquake & Flood (catastrophic perils) lnsurance with limits not less than
eighty percent (80%) of the Total Cost of the Facility. The deductible for such
insurance shall be consistent with current lnsurance lndustry Utility practices for
similar property.
e. Business Intemrption (Loss of lncome) lnsurance with minimum daily limits not
less than twenty percent (20%) of the Facility's estimated annual income;
i. Coverage will include Seller's loss of earnings when business operations
are curtailed or suspended because of a loss due to an insured peril.
Coverage may be written on an actual loss sustained basis.
ii. This insurance coverage must be endorsed to both the All Risk Property
Insurance Policy and the Boiler and Machinery Insurance Policy;
6l
iii. The deductible for such insurance shall be consistent with current
Insurance Industry Utility practices for similar property.
iv. The estimated annual income shall be computed on the basis of the Net
Energy Amounts contained in paragraph 6.2.
In the case of the insurance coverages described above items 3b, 3c, and 3d above, the Total
Cost of the Facility will include any Seller-furnished Disconnection Equipment and/or
lnterconnection Facilities. The Total Cost of the Facility and total replacement cost of
equipment will be adjusted either upward or downward to reflect the current replacement cost
of the Facility or equipment. This adjustment will be based on either (1) an appraisal made by,
or for, the Seller's insurance company, or (2) use of an approved "industrial cost trend index"
published by a national insurer (i.e., Factory Mutual Engineering and Research Building Cost
Index; Kemper Replacement Value Cost Trends - Industrial Machinery & Equipment;
Industrial Risk Insurers, U.S. Replacement Cost Factors) (3) any other mutually agreed upon
methodology of establishing the total replacement cost. Such adjustment shall be made, at a
minimum, every fifth Contract Year during the term of this Agreement. A copy of these
computations and/or appraisals will be submitted to Idaho Power for Idaho Power's review and
approval.
Insurance Alternatives - Comprehensive General Liability Insurance as defined above in item
3a, will be required at all times throughout the term of this agreement. Alternative
arrangements creating equivalent protection for ldaho Power in lieu of the insurance
requirements specified above in items 3b, 3c, 3d, and 3e may be submitted to Idaho Power for
review. Only upon Idaho Power's written acceptance of these alternate arrangements
may the Seller be allowed to forgo the insurance requirements as specified in items 3b,
3c, 3d, and 3e. Any and all acceptable alternative arrangements must place Idaho Power in
an equal or better position in the event ofthe occurrence ofan insurable event.
5
62
4.