20190404Application.pdf

SEffi*.
An IDACORP Company
DONOVAN E. WALKER
Lead Counsel
[e-mail]
April4, 2019
VlA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
47 2 W est Wash ington Street
Boise, ldaho 83702
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Re: Case No. IPC-E-19-14
Power Purchase Agreement with Jackpot Holdings, LLC - ldaho Power
Company's Application and Testimony
Dear Ms. Hanian
Enclosed for filing in the above matter please find an original and seven (7) copies
of ldaho Power Company's Application.
Also enclosed are an original and eight (8) copies of the Direct Testimony of
Matthew T. Larkin filed in support of the Application. One copy of Mr. Larkin's testimony
has been designated as the "Reporter's Copy." A disk containing a Word version of Mr.
Larkin's testimony is enclosed for the Reporter.
Also enclosed are an original and eight (8) copies each of confidential page 7 of
the Direct Testimony of Matthew T. Larkin and confidential page 2 of Exhibit No. 2 to the
Direct Testimony of Matthew T. Larkin. Please handle the confidential information in
accordance with the Protective Agreement to be executed in this matter.
Very lY Yours,
novan E. Walker
DEW:csb
Enclosures
1221 W. ldaho 5t. (83702)
P.O. Box 70
Boise, lD 83707
Lr.r,- .'
t:lDONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@ idahopower. com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILIT!ES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A POWER PURCHASE
AGREEMENT WITH JACKPOT HOLDINGS,
LLC, FOR THE SALE AND PURCHASE
OF UP TO 220 MEGAWATTS OF
RENEWABLE SOLAR GENERATION.
CASE NO. IPC-E-19-14
APPLICATION
ldaho Power Company ("ldaho Power" or "Company"), in accordance with RP 52,
hereby respectfully applies to the ldaho Public Utilities Commission ('IPUC' or
"Commission") for an order approving the Power Purchase Agreement ("PPA" or
'Agreement") between ldaho Power and Jackpot Holdings, LLC ("Jackpot Solar" or
"Seller") under which Jackpot Solar will sell and ldaho Power will purchase 120
megawatts ("MW') of renewable solar electric generation from the Jackpot Solar Facility,
with an option to purchase an additional 100 MW of renewable solar generation from the
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APPLICATION - 1
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adjacent Franklin Solarl Facility, both located near Rogerson, ldaho, between Twin Falls,
ldaho, and the Nevada border.
ln addition to and in support of this Application, ldaho Power files the
accompanying Direct Testimony of Matthew T. Larkin, describing the economic analysis
that supports the execution and approval of the PPA, and represents as follows:
I. INTRODUCTION AND BACKGROUND
1. ldaho Power has executed a PPA with Jackpot Solar for the purchase of up
to 220 MW of renewable solar generation from a proposed ldaho solar facility at what
appears to be at or near nationwide record low pricing. ldaho Power was approached in
late September 2018 by Jackpot Solar where it offered to sell to ldaho Power the output
from a 120 MW solar facility with very low pricing, significantly below both average market
prices and Public Utility Regulatory Policies Act of 1978 ('PURPA) avoided cost rates
applicable to solar facilities. On September 26, 2018, ldaho Power and an affiliated
predecessor of Jackpot Solar executed a Mutual Nondisclosure, Confidentiality, and
Exclusivity Agreement in order to commence the negotiation and evaluation of the offered
power purchase. The exclusivity agreement granted ldaho Power the exclusive right to
execute an agreement to purchase the generation from this Facility through March 25,
2019. During negotiations, Jackpot Solar offered to sellthe generation from an additional
100 MW solar facility from an adjacent development site, Franklin Solar, defined in
Section I of the Agreement, and further described below.
2. ldaho Power analyzed the impact of operating the offered generation as
part of its system first by using AURORA to model the Company's system operations and
costs both with and without the additional solar generation, and then by including the
1 Capitalized terms used in this Application but not defined in this Application have the meaning
given to them in the Agreement.
APPLICATION - 2
projected output from the 120 MW and 100 MW facilities in the Company's 2019
lntegrated Resource Plan ("lRP") resource portfolio analysis process. This analysis
shows significant cost savings and customer benefits from the acquisition of the solar
generation. Additionally, the generation at the contracted price is selected by the analysis
as a low-cost resource capable of being integrated into ldaho Power's system by most of
the various resource portfolios analyzed as part of ldaho Power's 20191RP.
3. The pricing in the PPA relies upon the Seller's ability to safe harbor the
current 30 percent federa! investment tax credit benefits prior to the end of December
2019, after which time those benefits begin to step down. ln order to secure the
necessary financial commitments and initial development activities required to safe
harbor the current investment tax credits and contract pricing, it was necessary for the
Seller to have in place an executed contract for the purchase of the generation during the
first quarter of 2019. The Commission requires ldaho Power to comply with the
competitive procurement rules applicable in the Company's Oregon service area in the
acquisition of new supply-side resources. Case No. IPC-E-10-03, Order No. 32745.
However, there was not sufficient time to conduct a full competitive procurement request
for proposals process for the generation, and as a time-limited opportunity that benefits
customers, this resource acquisition is exempt from the competitive procurement rules of
the Public Utility Commission of Oregon ("OPUg"1.z
4. This PPA represents a significant benefit to ldaho Power customers, and
provides for the addition of a large, local, 100 percent renewable generation project to
ldaho Power's generation portfolio at the same time as the Company's reliance upon
existing coal generation facilities is reducing. Approval of this PPA is in the public interest
2 ldaho Power filed a Notice of Exception Report with the OPUC. That filing is attached hereto as
Attachment 2.
APPLICATION - 3
and the best interests of ldaho Power customers. Consequently, ldaho Power
respectfully requests that the Commission approve the PPA between Idaho Power and
Jackpot Solar and declare that all payments for purchases of generation pursuant to the
PPA between ldaho Power and Jackpot Solar be allowed as prudently incurred expenses
for ratemaking purposes, with the cost of the payments ldaho Power makes pursuant to
the contract recoverable through the Power Cost Adjustment ('PCA").
II. THE POWER PURCHASE AGREEMENT
5. On March 22,2019, ldaho Power and Jackpot Solar entered into a PPA for
the sale and purchase of 120 MW of renewable solar electric generation from the Jackpot
Solar Facility, with an option to purchase an additional 100 MW of renewable solar
generation from the adjacent Franklin Solar Facility, subject to the satisfaction of specified
conditions. An executed copy of the PPA is attached to this Application as Attachment 1 .
The Expected Nameplate Capacity of the project under the PPA is 120 MW, Section
132,3 which is increased to 220 MW with the exercise of the option to purchase the
additional 100 MW from the Franklin Solar Facility. Section 8.3.2. The Agreement is for
a term of 20 years, Section 4.1, and contains non-levelized, fixed pricing that escalates
at 1.5 percent annually during the term. First-year pricing for 120 MW is
$21.7llmegawatt-hour ("MWh") and pricing for 220 MW is $23.11lMWh. See Exhibit 5 of
the Agreement attached hereto as Attachment 1. The Agreement is similar in many ways
to the numerous energy sales agreements approved by the Commission pursuant to the
Company's obligations under PURPA, but also contains various other terms and
conditions consistent with industry standard, non-PURPA power purchase agreements,
3 References herein to "Section" refer to the applicable section of the Power Purchase Agreement
attached hereto as Attachment 1.
APPLICATION - 4
including pricing, security, and other terms of service that are substantially more favorable
to customers than are provided under PURPA-based power purchase arrangements.
6. The Scheduled Commercial Operation Date is December 1, 2022, for the
120 MW, Section 1 .112, and December 1 , 2023, for the additional 100 MW, if that option
is exercised. Section 8.3.2. The Agreement provides several enumerated events that
must occur, including having at least 90 percent of the Expected Nameplate Capacity
Rating fully operational, interconnected, integrated, and synchronized with ldaho Power's
system in order to achieve the Commercial Operation Date. Section 1.10, Section 4.2.
Similar to the First Energy Date from a PURPA contract, the Agreement also provides
several enumerated items in order for the Seller to be granted a First Generation Date,
Section 3, which precedes the Commercial Operation Date. The Agreement also
provides for a Guaranteed Commercial Operation Date, which is g0 days after the
Scheduled Operation Date. Section 1.49.
7. Section 9 of the Agreement contains provisions requiring the Seller to post
and maintain security, both Project Development Security and Default Security. Project
Development Security in the amount of $90 per kilowatt ('kW') of Nameplate Capacity
Rating must be in place within 30 days of a final order of the Commission approving the
Agreement. Project Development Security is to remain in place to ensure the project
meets its Commercial Operation Date. Default Security in the initial amount of $45 per
kW of Nameplate Capacity Rating must be in place at the Commercial Operation Date
and must be maintained through the entire term of the Agreement. The amount of Default
Security reduces to $35 per kW of Nameplate Capacity Rating starting in Contract Year
11. Default Security may be used for any Deficit Damages if the project is brought on-
line at less than the Expected Nameplate Capacity or for any other damages ldaho Power
suffers if the Agreement is terminated because of the Seller's default.
APPLICATION - 5
8. The Agreement contains a performance requirement in the form of an
Output Guarantee. Section 7.12. Under the Output Guarantee, the Seller is obligated to
deliver 90 percent of the Expected Energy of the Facility on a monthly basis. Similar to
recent provisions from PURPA agreements, the PPA allows the Seller an adjustment of
Estimated Monthly Net Output Amounts by the 25th day of the preceding month. Section
7.12.1.2. lf the project delivers less than the Output Guarantee during any month, the
Seller must pay the Output Shortfall for that month multiplied by ldaho Power's Cost to
Cover as liquidated damages. Section 7.12.2. If the delivered Net Output is equal to or
greater than the Output Guarantee, then the Seller is deemed to have satisfied the Output
Guarantee. Section 7 .12.2.1.
9. Section 7 of the Agreement contains standard provisions for operation and
control of the project. These include such things as planned outages, forced outages,
and maintenance outages, as well as scheduling, forecasting, generator output limit
control (GOLC), and metering. For forecasting, the Agreement provides the same
allocated portion of the total cost of ldaho Power's Solar Energy Production Forecast
model that is used for all solar projects that are under contract to provide energy to ldaho
Power.
10. Under the Agreement, ldaho Power will own 100 percent of the Green Tags
or Environmental Attributes associated with the Facility. Section 5.6. This section also
provides for the Green Tags or EnvironmentalAttributes to be placed into ldaho Power's
Western Renewable Energy Generation lnformation System (WREGIS) account or any
other accounting and tracking system selected for such purpose. Section 5.6.2. Section
5 of the Agreement also provides standard provisions for the Non-Compensable
Curtailment of the Facility for non-economic reasons in much the same way that PURPA
generation is subject to curtailment, which includes curtailments pursuant to: the
APPLICATION - 6
Generator lnterconnection Agreement ("GlA"); the Market Operator, Transmission
Provider, or Network Service Provider's general curtailment, reduction, or redispatch of
generation in the arca; the Facility not being fully integrated or synchronized with the
System; or an event of Force Majeure. Section 5.4.
11. The Seller is responsible for all costs and expenses associated with
interconnection and obtaining Network Resource (.NR") interconnection service for the
Facility. Section 7.3. Seller currently has an executed GIA for the 120 MW Jackpot Solar
Facility as an Energy Resource (ER) Seller has recently applied for the interconnection
of the additional 100 MW Franklin Solar Facility at the same point of interconnection. A
Transmission Service Request ("TSR') for NR transmission service was filed on March
14,2019, for both the 120 MW and the additional 100 MW. The point of interconnection
for the Facility is on the ldaho side of the Midpoint-Humboldt 345 kilovolt transmission line
that is jointly owned by Idaho Power and NV Energy. ldaho Power holds all inbound
transmission rights on this line, which is currently used to import generation from the North
Valmy coal-fired generation facility.
12. The Agreement contains provisions granting to ldaho Power a Right of First
Offer for Expansion Energy, and for potential ownership of the Facility. Section 8. Seller
is restricted from selling Expansion Energy or the Facility to any other party without first
offering to sell to ldaho Power under the same terms. Separate from the right of first offer,
the Agreement provides for the continued negotiation of possible ownership of all or a
part of the Facility by Idaho Power.a This section of the Agreement also contains
provisions regarding the potential purchase of 100 MW of Additional Output from the
Facility identified as Franklin Solar. Section 8.3. Contingent upon the GIA process for
a Should the parties reach a separate agreement as to the sale of the Facility to ldaho Power, ldaho
Power will make a separate filing for its approval with the Commission.
APPLICATION - 7
the additional 100 MW and the outcome of additional analysis and the mutual agreement
of the parties, ldaho Power has an option to purchase an additional 100 MW (total of 220
MW) at the prices set forth in Exhibit 5 to the Agreement. Unless otherwise agreed, this
option expires on September 1, 2019. ld.
13. Section 21 provides that the Agreement will not become effective unless the
Commission has approved a!! of the PPA's terms and conditions and declared that all
payments ldaho Power makes to Seller for purchases of energy will be allowed as
prudently incurred expenses for ratemaking purposes. The obligation of ldaho Power to
purchase energy under the PPA will not become finally effective should it be disapproved
by either the IPUC or the OPUC. This section provides that subsequent to execution of
the PPA, ldaho Power will seek a final order regarding approval or rejection of the
Agreement from the IPUC prior to the end of 2019 and file a corresponding Notice of
Exemption from the competitive bidding requirements with the OPUC pursuant to OAR
860-089-0100 (3) and (4). See Attachment 2 hereto for the OPUC filing. Section 21 also
provides that performance of Idaho Power's obligations under the Agreement is
contingent upon the approval of the same by the Board of Directors of both ldaho Power
and IDACORP, lnc. ldaho Power and IDACORP, lnc., plan to submit the PPA for
approvalto their respective Board of Directors for approval in May 2019.
III. CUSTOMER BENEFIT AND PUBLIC INTEREST
14. This case presents a situation where similar to the Commission's
determination regarding the Application of Rocky Mountain Power for a Certificate for
Public Convenience and Necessity ('CPCN') and Binding Ratemaking Treatment for New
Wind and Transmission Facilities, although the Company's IRP process shows sufficient
APPLICATION - 8
generation and supply-side resources to meet load for approximately the next decade,s
because acquiring the generation results in substantial savings and customer benefit, the
acquisition is in the public interest. Case No. PAC-E-17-07, Order No. 34104, pp.7-8
(discussing why projects are in the public interest where shown to be beneficial to
customers on an economic basis, while at the same time reliability (load service) does
not require new generation facilities). Even though the Agreement contemplates seeking
a Certificate for Public Convenience and Necessity ('CPCN') from the Commission,
because the present Agreement is only a power purchase agreement for up to 220 MW
of renewable solar generation, and the Company is not presently seeking approval to
own, construct, or extend "a line, plant, or system," a CPCN is neither required nor
appropriate. ldaho Code S 61-526. As stated earlier, should ldaho Power and Seller
agree upon a separate purchase and sale whereby ldaho Power gains ownership of part
or all of the Facility, ldaho Power will make a separate filing with the Commission for
approval of the same.
15. The Contract Price for Jackpot Solar in the PPA is among the lowest publicly
reported solar PPA purchase prices in the nation. Larkin Direct, pp. 6-7, Ex. 1. The
Contract Price is also substantially lower than ldaho Power's approved PURPA avoided
cost rates applicable to solar facilities as well as average Mid-Columbia market prices.
Larkin Direct, p.7, Ex.2.
16. ldaho Power's analysis shows that acquiring the output of the Jackpot Solar
Facility under the terms and conditions in the PPA is estimated to save customers
approximately $90,226,470 at 120 MW and $150,827,810 at 220 MW in pass-through
purchased power expenses. Larkin Direct, p. 15. The addition of the Jackpot Solar PPA
5 2017 tRP
APPLICATION - 9
reduced total operating costs by offsetting generation from higher priced resources and
allowing for more surplus sales. Additionally, when the PPA generation is included in the
portfolio analysis for the current 20191RP, it is selected as a low-cost resource capable
of being integrated into ldaho Power's system. Larkin Direct, p. 19. This analysis
included the purchased generation at prices that were obtained in the Agreement and,
additionally, did not include any economic benefits associated with ldaho Power's 100
percent ownership of the Green Tags and Environmental Attributes of the generation.
lnclusion of these items only increases the benefits passed through to customers. The
Agreement has substantial customer benefits and is in the public interest.
IV. MODIFIED PROCEDURE
17. 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 present its testimony in such hearing.
18. As previously stated, the pricing in the PPA relies upon the Seller's ability
to safe harbor the current 30 percent federal investment tax credit benefits prior to the
end of December 2019, after which time those benefits step down. ln order to secure the
necessary financial commitments and initial development activities required to safe
harbor the current investment tax credits and contract pricing, it was necessary to have a
contract for the purchase of the generation executed during the first quarter of 2019, and
approved by the Commission as soon as possible, but, in any event, no later than
December 2019, prior to the step down of credits. Consequently, ldaho Power
respectfully requests an expeditious proceeding, conducted by Modified Procedure,
APPLICATION. 1O
intended to result in a final Commission determination and order by December 2019, or
earlier.
19. ldaho Power proposes that the Commission issue a Notice of Application
and set an intervention period of 14-21days, afterwhich the Company, Commission Staff,
and Intervenors, if any, could discuss a proposed schedule that accommodates
anticipated discovery, review, comments, and submission to the Commission within the
requested time frame.
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
20. 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 Idaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
dwalker@ idahopower.com
Matt Larkin
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
mlarkn@ id a h opowe r. conn
dockets@ idahopower. com
VI. REQUEST FOR RELIEF
21. ldaho Power respectfully requests that the Commission issue an order: (1)
authorizing that this matter may be processed by Modified Procedure; (2) approving the
PPA between ldaho Power and Jackpot Holdings, LLC; and, if approved, (3) declaring
that all payments for purchases of generation under the PPA between ldaho Power and
Jackpot Holdings, LLC, be allowed as prudently incurred expenses for ratemaking
purposes and be included for collection in future PCA filings.
Respectfully submitted this 4th day of Apri!19
OVAN E. WALKER
Attorney for ldaho Power Company
APPLICATION . 11
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 4th day of April 2019 I served a true and correct
copy of the within and foregoing APPLICATION upon the following named parties by the
method indicated below, and addressed to the following:
Jackpot Holdings, LLC
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
Robert Paul
515 North 27th Street
Boise, ldaho 83702
Hand DeliveredX U.S. Mail
Overnight Mail
_ FAXX Email [e-mail]
\
Ch , Lega
APPLICATION - 12
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
cAsE NO. IPC-E-19-14
IDAHO POWER COMPANY
ATTACHMENT 1
POWER PURCHASE AGREEMENT
BETWEEN
JACKPOT HOLDINGS, LLC
AND
IDAHO POWER COMPANY
TABLE OF CONTENTS
Page
SECTION I DEFINITIONS, RULES OF INTERPRETATION.
SECTION 2 REPRESENTATIONS AND WARRANTIES 15
2.1 Mutual Representations and Warranties
2.2 Seller's Further Representations and Warranties
2.3 No Other Representations or Warranties
2.4 Continuing Nature of Representations and Warranties; Notice.18
SECTION 3 CONDITIONS TO ACCEPTANCE OF GENERATION, FIRST
GENERATION DATE .....1 8
3.1 Conditions to be granted First Generation Date.. .............18
3.2 Idaho Power's Right to Monitor
SECTION 4 TERM AND COMMERCIAL OPERATION DATE......
4.1 Term.........
.....1 5
.....16
.....1 8
Commercial Operation Date. .........
Continuing Obligations................
Commercial Operation Date Delay, Delay Damages and Deficit Damages.
.....20
,...,22
..,.,22
.....22
.....24
.....24
4.2
4.3
4.4
4.5 DamagesCalculation.......
4.6 Damages Invoicing.
4.7 Tax Credits................
SECTION 5 DELIVERIES OF NET OUTPUT AND GREEN TAGS ..
5.1 Purchase and Sale. ..
....25
....25
....25
.24
.25
.26
.26
.26
.27
.27
5.2
5.3
5.4
No Sales to Third Parties.
Title and Risk of Loss of Net Output
Curtailment. ...............
5.5 Idaho Power as Merchant.
5.6
5.7
Green Tags..........
Purchase and Sale of Capacity Rights
5.8 Representation Regarding Ownership of Capacity Rights.
5.9 Authority to Make Sales.
5. l0 Further Assurances
SECTION 6 CONTRACT PRICE; COSTS
6.1 Contract Price; Includes Green Tags and Capacity Rights............
6.2 CostsandCharges................
...28
...28
,.,28
..28
..29
..29
..30
I
TABLE OF CONTENTS
(continued)
Station Service.
Page
6.3
6.4
6.5
6.6
....30
Taxes.
Costs of Ownership and Operation......
Rates Not Subject to Review
.30
SECTION 7 OPERATION AND CONTROL
....30
....3 I
....3 I
7.1 As-Built Supplement. ....................
Standard of Facility Operation.......
.31
7.2 ....3 I
....32
,.,.32
7.3 Interconnection...........
7.4 Coordination with System.
7.5 Outages...32
7.6 Scheduling
7.7 Forecasting
...34
...34
7.8 Increase in Nameplate Capacity Rating; New Project Expansion or
Development. ................36
7.9 Electronic Communications..........36
..37
..40
..40
..42
l.l0 Reports and Records...............
7.11
7.12
Financial and Accounting Information. ..
Output Guarantee.
7.13 Access Rights.......
7.14 Facility Images..........42
SECTION 8 RIGHT OF FIRST OFFER ADDITIONAL GENERATION AND
OWNERSHIP OR PURCHASE OPTION 43
46
46
47
47
48
49
SECTION 9 SECURITY AND CREDIT SUPPORT.....
9.1 Project Development Security. .
9.2 Default Security.
9.3 SubordinatedSecuritylnterests.
9.4
9.5
Debt-to-Equity Ratio; Annual and Quarterly Financial Statements.
Security is Not a Limit on Seller's Liability.
SECTION 10 METERING, METERING COMMUNICATIONS AND SCADA
10.1
10.2
10.3
TELEMETRY............
Metering...
49
49
49
50
Metering Communications..
Supervisory Control and Data Acquisition (SCADA) Telemetry....
-ll-
TABLE OF CONTENTS
(continued)
10.4 Metering Costs..
SECTION 11 BILLINGS, COMPUTATIONS AND PAYMENTS
Page
..50
11.1
11.2
Monthly Invoices.....
Offsets.
.51
.51
I 1.3. Interest on Late Payments..
5l
5l
5l
5l
52
52
54
55
56
56
56
56
56
57
57
58
58
58
58
58
59
59
59
59
60
60
60
60
61
11.4 Disputed Amounts...
I 1.5 Audit Rights.
SECTION 12 DEFAULTS AND REME,DIES
l2.l Defaults.
12.2 Remedies for Failure to Deliver/Receive.
t2.3 Termination and Remedies. ......
12.4 TerminationDamages
12.5 Senior Lender Foreclosure................
12.6
12.7
12.8
Duty/Right to Mitigate......
Security.
Cumulative Remedies. .......
SECTION I3 INDEMNIFICATION AND LIABILITY
l3.l Indemnities........
SECTION 14 INSURANCE ....
14.l Required Policies and Coverages.
14.2 Certificates of Insurance. .....
SECTION 15 FORCE MAJEURE
15.1 Definition of Force Majeure.
15.2 Suspension of Performance.
15.3 Force Majeure Does Not Affect Other Obligations.
15.4 Strikes
15.5 Right to Terminate.......
SECTION 16 SEVERAL OBLIGATIONS
SECTION 17 CHOICE OF LAW
SECTION I 8 PARTIAL INVALIDITY ..........
SECTION I9 NON-WAIVER
SECTION 20 GOVERNMENTAL JURISDICTION AND AUTHORIZATIONS
-lll-
TABLE OF CONTENTS
(continued)
SECTION 21 REGULATORY APPROVAL .........
SECTION 22 SUCCESSORS AND ASSIGNS .................
22.1 Restriction on Assignments.
22.2 Permitted Assignments.......
SECTION 23 ENTIRE AGREEMENT......
24.1 Addresses and Delivery Methods.
24.2 Changes of Address
SECTION 25 CONFIDENTIALITY ..............
Page
SECTION 24 NOTICES.............
6r
62
62
62
62
62
62
63
64
64
64
64
65
65
65
65
65
66
66
25.1
25.2
25.3
25.4
SECTION 26 DISAGREEMENTS ...............
26.1 Negotiations................
26.2 Choice of Forum.
26.3 SettlementDiscussions.
26.4 Waiver of Jury TriaI..........
Confi dential Business Information
Duty to Maintain Confidentiality...........
Idaho Power Regulatory Compliance................
Irreparable Injury; Remedies.
25.5 News Releases and Publicity..............
-lv-
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4
Exhibit 5
Exhibit 6
Exhibit 7
Exhibit 8
Exhibit 9
Exhibit l0
Exhibit I I
Exhibit 12
Exhibit l3
Exhibit 14
Exhibit l5
Exhibit l6
Exhibit l7
EXHIBITS
Generation Scheduling and Reporting
Description of Facility
Point of Delivery/Interconnection Facilities
Estimated Monthly Net Output
Contract Prices
NERC Event Types
Start-Up Testing
Form of Security - Credit Support Obligation
Required Facility Documents
Leases
Engineer's Certification of O&M Policy, Engineer's Certification
of Ongoing O&M, Engineer's Certification of Design and
Construction Adequacy.
[State] Trust Deed
Required Insurance
Seller Authorization to Release Generation Data to Idaho Power
Attachments
As-Built Supplement
Franklin Solar
-v-
POWER PURCHASE AGREEMENT
THIS POWER PURCHASE AGREEMENT (this "Agreement"), dated as ofZr./22 ,2019, (the "Effective Date"), is entered into between Jackpot Holdings,
LLC, an Idaho Limited Liability Company (the "Seller") and Idaho Power Company, an Idaho
corporation ("ldaho Power" or "Buyer"). Seller and Idaho Power are sometimes hereinafter
referred to collectively as the "Parties" and individually as a "Party."
WHEREAS, Seller intends to construct, own, operate and maintain a solar-
powered generation facility for the generation of electric energy located in Twin Falls County,
Idaho with an Expected Nameplate Capacity Rating (as defined below) of 120 MW (AC) (the
"Facility").
WHEREAS, Seller desires to sell, and Idaho Power desires to purchase, the Net
Output (as defined below) delivered by the Facility in accordance with the terms and conditions
hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties mutually agree as follows:
SECTION 1
DEFINITIONS, RULES OF INTERPRETATION
Defined Terms. Unless otherwise required by the context in which any term appears, initially
capitalized terms used herein shall have the following meanings:
I .1 "Abandonment" means (a) the relinquishment of all possession and control of the Facility
by Seller, other than pursuant to a transfer permitted under this Agreement, or (b) if after
commencement of the construction, testing, and inspection of the Facility, and prior to
the Commercial Operation Date, there is a complete cessation of the construction, testing,
and inspection of the Facility for ninety (90) consecutive days by Seller and Seller's
contractors, but only if such relinquishment or cessation is not caused by or attributable
to an Event of Default by Idaho Power, a request by Idaho Power, or an event of Force
Majeure.
1.2 6'AC" means alternating current.
1.3 "Additional Output" is defined in Section 8.3.1.
"Affiliate" means, with respect to any entity, each entity that directly or indirectly
controls, is controlled by, or is under common control with, such designated entity, with
"control" meaning the possession, directly or indirectly, of the power to direct
management and policies, whether through the ownership of voting securities or by
1
1.4
1.5
1.6
1.7
1.8
1.9
contract or otherwise.
"Agreement" is defined in the opening paragraph hereto
"As-built Supplement" is a supplement to be added to Exhibit l6 that describes the
Facility as actually built, pursuant to Section 7.1 and includes an American Land Title
Association survey of the Premises.
"Book Value" means cost minus accumulated depreciation, and not deducting for debt or
other encumbrances, calculated in accordance with generally accepted accounting
principles consistently applied.
"Business Day" means any Monday through Friday except NERC recognized holidays
beginning at 6:00 a.m. and ending at 5:00 p.m. local time in Boise, Idaho.
"Capacity Rights" means any current or future defined characteristic, certificate,tag,
credit, ancillary service or attribute thereof, or accounting construct, including any of the
same counted towards any current or future resource adequacy or reserve requirements,
associated with the electric generation capability and capacity of the Facility or the
Facility's capability and ability to produce energy. Capacity Rights are measured in MW
and do not include any Tax Credits, or any other tax incentives existing now or in the
future associated with the construction, ownership or operation of the Facility.
l.l0 "Commercial Operation" means that not less than the Required Percentage of the
Expected Nameplate Capacity Rating of the Facility is fully operational and reliable and
the Facility is fully interconnected, fully integrated, and synchronized with the System,
all of which shall be Seller's responsibility to receive or obtain, and without limiting
Seller's other obligations under this Agreement, which occurs when all of the enumerated
events listed in Section a.2 @) have occurred, and (b) remain simultaneously true and
accurate as of the date and moment on which Seller gives Idaho Power written notice that
Commercial Operation has occurred:
1.11 "Commercial Operation Date" means the day commencing at 00:01 hours, Mountain
Time, following the day that all requirements of Section 4 have been completed and after
the Seller requested Operation Date.
l.l2 "Compensable Curtailment Energy" is defined in Section 6.1.3.
l.l3 "Compensable Curtailment Price" is defined in Section 6.1.3.2.
l.l4 "Confidential Business Information" is defined in Section 25.1.
I .15 "Contract Interest Rate" means the lesser of (a) the highest rate permitted under
Requirements of Law or (b) 200 basis points per annum plus the rate per annum equal to
the publicly announced prime rate or reference rate for commercial loans to large
businesses in effect from time to time quoted by Citibank, N.A. as its "prime rate." If a
1-L-
Citibank, N.A. prime rate is not available, the applicable prime rate shall be the
announced prime rate or reference rate for commercial loans in effect from time to time
quoted by a bank with $10 billion or more in assets in New York City, N.Y., selected by
the Party to whom interest is being paid.
l.l6 "Contract Price" means the applicable price, expressed in mills per kWh for Net Output,
Green Tags and Capacity Rights stated in Section 6.1.
l.l7 "Contract Year" means any consecutive l2-month period during the Term, commencing
at 00:00 hours on the Commercial Operation Date or any of its anniversaries and ending
at 24:00 hours on the last day of such 12-month period.
1.18 "CPCN" means Certificate of Public Convenience and Necessity
I .19 "Credit Requirements" means (a) three (3) years of audited financial statements, a view
of the financial position and financial performance, financial statement analysis and
financial trend analysis; (b) Debt Agency Ratings - a senior, unsecured long term debt
rating (or corporate rating if such debt rating is unavailable) of BBB+ or greater from
S&P, or Baal or greater from Moody's, and if such ratings are split, the lower of the two
ratings must be at least 'BBB+' or 'Baal' from S&P or Moody's, respectively. Idaho
Power performs a credit analysis, which considers both qualitative and quantitative
factors, to determine whether potential Counterparties have satisfied the Credit
Requirements.
1.20 "default" is defined in Section 12.1.
l.2l "Default Security" is defined in Section 9.2.1.
1.22 "Deficit Damages" means a one-time payment equal to (a) the difference between
(i) Expected Nameplate Capacity Rating and (ii) the Nameplate Capacity Rating of the
Facility on the l20th day after the Guaranteed Commercial Operation Date, stated in
MWs, multiplied bV 0) $25,000.
1.23 "Delay Damages" means for any given day the amount equal to (a) the Expected Energy,
expressed in MWhs per year, divided by 365, multiplied by (b) Idaho Power's Cost to
Cover.
1.24 "Effective Date" is the date stated in the opening paragraph hereto which represents the
date upon which this Agreement was fully executed by both Parties.
1.25 "Electric System Authority" means each of NERC, WECC, WREGIS, an RTO, a
regional or sub-regional reliability council or authority, and any other similar council,
corporation, organization or body of recognized standing with respect to the operations of
the electric system in the WECC region, as such are applicable to the Seller or Idaho
Power.
1.26 "Energy Imbalance Market" means generation facilities electrically located within Idaho
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Power's balancing authority areas that are, from time to time, bid in to or otherwise
subject to dispatch instructions issued or originating from the Market Operator.
1.27 "Environmental Attributes" means any and all claims, credits, benefits, emissions
reductions, offsets, and allowances, howsoever entitled, resulting from the avoidance of
the emission of any gas, chemical, or other substance to the air, soil or water.
Environmental Attributes include but are not limited to: (a) any avoided emissions of
pollutants to the air, soil, or water such as (subject to the foregoing) sulfur oxides (SOx),
nitrogen oxides (NOx), carbon monoxide (CO), and other pollutants; and (b) any avoided
emissions of carbon dioxide (CO2), methane (CH4), and other greenhouse gases (GHGs)
that have been determined by the United Nations Intergovemmental Panel on Climate
Change or any Governmental Authority to contribute to the actual or potential threat of
altering the Earth's climate by trapping heat in the atmosphere. Environmental Attributes
do not include (i) the ITC or any other Tax Credits, or certain other tax incentives
existing now or in the future associated with the construction, ownership or operation of
the Facility, (ii) matters designated by Idaho Power as sources of liability, or (iii) adverse
wildlife or environmental impacts.
1.28 "Environmental Contamination" means the introduction or presence of Hazardous
Materials at such levels, quantities or location, or of such form or character, as to
constitute a violation of federal, state or local laws or regulations, and present a material
risk under federal, state or local laws and regulations that the Premises will not be
available or usable for the purposes contemplated by this Agreement.
1.29 "Event of Default" is defined in Section 12.1.
1.30 "Expansion Energy" is defined in Section 8.2.1
1.31 "Expected Energy" means 270.158.400 kWh of monthly Net Output in the first, full
Contract Year, reduced by an annual degradation factor of 0.3 percent per Contract Year,
measured at the Point of Delivery, which is Seller's best estimate of the projected long-
term average annual Net Output production, based upon typical solar conditions at the
Facility as determined by a Solar Performance Modeling Program, delivered to the Point
of Delivery and the Expected Nameplate Capacity Rating. Seller estimates that the Net
Output will be delivered during each Contract Year according to the estimates of
Monthly Net Output set forth in Exhibit 4. If at Final Completion the Facility's
Nameplate Capacity Rating is less than the Expected Nameplate Capacity Rating,
Expected Energy shall be reduced proportionally per year for each full MW of Nameplate
Capacity Rating below the Expected Nameplate Capacity Rating. Seller acknowledges
that Idaho Power will include Expected Energy in Idaho Power's resource planning.
Idaho Power acknowledges that solar insolation is variable and that the Facility's actual
annual output of Net Output in the ordinary course in any given year will be subject to
variation caused by differences in the actual solar insolation at the Facility from year to
year and month to month.
1.32 "Expected Nameplate Capacity Rating" means 120 MW (AC), the expected maximum
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instantaneous generation capacity of the Facility
1.33 "Facility" is defined in the Recitals and is more fully described in attached Exhibit 2 and
includes the photovoltaic power generating equipment, including panels, arrays, tracking
system (if applicable), inverters, and all other equipment, devices, associated
appurtenances owned, controlled, operated and managed by Seller in connection with, or
to facilitate, the production, generation, transmission, delivery, or furnishing of electric
energy by Seller to Idaho Power and required to interconnect with the System and
Seller's interests in the Premises, including Leases and any fee owned real property.
1.34 "Facility Equity" is defined in Section 9.4.
1.35 "FERC" means the Federal Energy Regulatory Commission.
1.36 "Final Completion" means the Facility is fully operational and reliable, at or greater than
the Required Percentage of the Expected Nameplate Capacity Rating, and fully
interconnected, fully integrated, and synchronized with the Transmission Provider's
System, modified if necessary to reflect the Nameplate Capacity Rating and, if
applicable, through completion of all the items set forth on the Final Completion
Schedule.
1.37 "Final Completion Schedule" means the full list of all items to be completed in order to
achieve Final Completion, See Section 4.2,Commercial Operation Date.
1.38 "First Generation Date" means the day commencing at 00:01 hours, Mountain Time,
following the day that Seller has satisfied the requirements of Section 3 and after the
Seller requested First Generation Date.
1.39 "Force Majeure" and "event of Force Majeure" are defined in Section 15.1.
1.40 "Forced Outage" means NERC Event Types Ul,U2 and U3, as set forth in attached
Exhibit 6, and specifically excludes any Maintenance Outage or Planned Outage.
1.41 "Franklin Solar" is defined in Section 8.3.1
1.42 "Generator Interconnection Agreement" or "GIA" means the large generator
interconnection agreement entered into separately between Seller and Interconnection
Provider concerning the Interconnection Facilities.
1.43 "GOLC" or "Generator Output Limit Control" means the equipment and capability of an
electric generation facility to automatically adjust the generation quantity.
1.44 "GOLC Set-Point" means the analog or digital signal sent to the Facility by Idaho Power,
the Interconnection Provider, the Transmission Provider or the Market Operator
representing the maximum Net Output for the Facility.
1.45 "Governmental Authority" means any supranational, federal, state or other political
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subdivision thereof, having jurisdiction over Seller, Idaho Power or this Agreement,
including any municipality, township or county, and any entity or body exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to
govemment, including any corporation or other entity owned or controlled by any of the
foregoing.
1.46 "Green Tags" means (a) the Environmental Attributes associated with all Output,
together with (b) the Green Tag Reporting Rights associated with such energy and
Environmental Attributes, however commercially transferred or traded under any or other
product names, such as "Renewable Energy Credits," "Green-e Certified," or otherwise.
One Green Tag represents the Environmental Attributes made available by the generation
of one MWh of electric energy from the Facility.
1.47 "Green Tags Price Component" means: (1) the price for Green Tags determined by
arithmetically averaging quotes for Green Tags from three nationally recognized
independent Green Tag brokers selected by Idaho Power pursuant to which Idaho Power
could reasonably purchase substitute Green Tags similar to those Green Tags that Seller
failed to deliver, with delivery terms, vintage period and any renewable program
certification eligibility that are similar to those contained herein, calculated as of the date
of default or as soon as reasonably possible thereafter; or (2) if after the Effective Date a
liquid market for Green Tags exists, the price established for Green Tags from the
established liquid market for Green Tags in a form and location that Idaho Power
determines reasonably states the market value of the Green Tags delivered hereunder.
1.48 "Green Tag Reporting Rights" means the exclusive right of a purchaser of Environmental
Attributes to report ownership of Environmental Attributes in compliance with federal or
state law, if applicable, and to federal or state agencies or other parties at such purchaser's
discretion, including under any present or future domestic, international, or foreign
emissions trading program or renewable portfolio standard.
1.49 "Guaranteed Commercial Operation Date" means the date that is ninety (90) days after
the Scheduled Commercial Operation Date.
1.50 "Hazardous Materials" means any waste or other substance that is listed, defined,
designated or classified as or determined to be hazardous under or pursuant to any
environmental law or regulation.
1.51 "ldaho Power" and "Buyer" are defined in the opening paragraph, and explicitly excludes
Idaho Power Transmission.
1.52 "Idaho Power's Cost to Cover" means the positive difference, if any, between (a) the sum
of (i) the time weighted average of the Market Price Index for each day for which the
determination is being made, plus (ii) the Green Tags Price Component, and (b) the
Contract Price specified in Exhibit 5 in effect on such days, stated as an amount per
MWh. If on a given day (or month in the case of calculating Output Shortfall) the
difference between (a) minus (b) referenced above is zero or negative, then Idaho Power's
Cost to Cover shall be zero dollars ($0), and Seller shall have no obligation to pay any
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amount to Idaho Power on account of Section 7 .12.3 or Section 12.2.1 with respect to
such day (or month in the case of calculating Output Shortfall).
1.53 "ldaho Power Indemnitees" is defined in Section l3.l.l.
1.54 "ldaho Power Representatives" is defined in Section 7.13.
1.55 "ldaho Power Transmission" means Idaho Power Company, an Idaho corporation, acting
in its interconnection or transmission function capacity.
1.56 "lndemnified Party" is defined in Section 7 .2.3.2
1.57 "lndemnifying Party" is defined in Section 7.2.3.2
1.58 "lnterconnection Facilities" means all the facilities installed, or to be installed, for the
purpose of interconnecting the Facility to the System, including electrical transmission
lines, upgrades, transforrners and associated equipment, substations, relay and switching
equipment, and safety equipment.
1.59 "lnterconnection Provider" means Idaho Power Transmission.
1.60 "Inverter" means the equipment installed at the Facility to convert direct current from the
Solar Panels to AC, as described in Exhibit 2.
l.6l "IPIJC" means the Idaho Public Utilities Commission.
1.62 "lRP" means Idaho Power's Integrated Resource Plan.
1.63 "ITC" means the investment tax credit established pursuant to Section 48 of the Intemal
Revenue Code, as such law may be amended or superseded.
1.64 'ekWI" means kilowatt.
1.65 "kvy'h" means kilowatt hour.
I.66 "Leases" means the memoranda of lease and redacted leases recorded in connection with
the development of the Facility, as the same may be supplemented, amended, extended,
restated, or replaced from time to time.
1.67 "Lender" means an entity lending money or extending credit (including any financing
lease, monetization of tax benefits, transaction with a tax equity investor, backleverage
hnancing or credit derivative anangement) to Seller or Seller's Affiliates (a) for the
construction, term or peffnanent financing or refinancing of the Facility; (b) for working
capital or other ordinary business requirements for the Facility (including for the
maintenance, repair, replacement or improvement of the Facility); (c) for any
development financing, bridge financing, credit support, and related credit enhancement
-7 -
in connection with the development, construction or operation of the Facility; or (d) for
the purchase of the Facility and related rights from Seller.
1 .68 "Letter of Credit" means an irrevocable standby letter of credit in a form reasonably
acceptable to Idaho Power, naming Idaho Power as the party entitled to demand payment
and present draw requests thereunder that:
1.68.1 is issued by a Qualifying Institution;
L68.2 by its terms, permits Idaho Power to draw up to the face amount thereof for the
purpose of paying any and all amounts owing by Seller hereunder;
1.68.3 permits Idaho Power to draw the entire amount available thereunder if such letter
of credit is not renewed or replaced at least thiny (30) Business Days prior to its stated
expiration date;
1.68.4 permits Idaho Power to draw the entire amount available thereunder if such letter
of credit is not increased or replaced as and when provided in Section 9;
1.68.5 is transferable by Idaho Power to any party to which Idaho Power may assign this
Agreement; and
1.68.6 shall remain in effect for at least ninety (90) days after the end of the Term.
| .69 "Liabilities" is defined in Section 13.1 .l .
1.70 "Licensed Professional Engineer" means a person proposed by Seller and acceptable to
Idaho Power in its reasonable judgment who (a) to the extent mandated by Requirements
of Law is licensed to practice engineering in the appropriate engineering discipline for
the required certification being made, in the state of Idaho, (b) has training and
experience in the engineering disciplines relevant to the matters with respect to which
such person is called upon to provide a certification, evaluation or opinion, (c) has no
economic relationship, association, or nexus with Seller and is not an employee of its
members or Affiliates, other than with the prior written consent of Idaho Power, for
services previously or currently being rendered to Seller or its members or Affiliates, and
(d) is not a representative ofa consulting engineer, contractor, designer or other
individual involved in the development of the Facility, or a representative of a
manufacturer or supplier of any equipment installed in the Facility.
l.7l "Maintenance Outage" means NERC Event Type MO, as set forth in attached Exhibit 6,
and includes any outage involving ten percent (10%) of the Facility's Net Output that is
not a Forced Outage or a Planned Outage.
1.72 "Market Operator" means the California Independent System Operator or any other entity
performing the market operator function for the Energy Imbalance Market.
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1.73 "Market Price Index" means 82.4% of the monthly arithmetic average of each day's
Intercontinental Exchange ("lCE") daily firm Mid-C Peak Avg and Mid-C Off-
Peak Avg index prices in the month as follows:
The actual calculation being:
n
.824 * ( I {GCE Mid-C Peak Avg* * HLH hours for day) +
X:I
(lCE Mid-C Off-Peak Avg, * LLH 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 HLH and LLH 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 HLH
and LLH 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 LLH Hours (for example a Sunday), the respective averages shall use only prices
reported for LLH 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 HLH Hours shall be those for HLH hours in
the nearest (forward or backward) reporting periods or days for which HLH prices are
reported
1.74 "Maximum Delivery Rate" means the maximum hourly rate of delivery of Net Output in
MWh from the Facility to the Point of Delivery, calculated on the basis of the Net Output
delivered in an hour accruing at an average rate equivalent to the actual Nameplate
Capacity Rating.
1.75 "Moody's" means Moody's Investor Services, Inc
1.76 "Mountain Prevailing Time" or "MPT" means Mountain Standard Time or Mountain
Daylight Time, as applicable in Idaho on the day in question.
1.77 '6MWI" means megawatt.
1.78 "MWh" means megawatt hour.
1.79 "Nameplate Capacity Rating" means the maximum installed instantaneous generation
capacity of the completed Facility, expressed in MW (AC), when operated in compliance
with the Generator Interconnection Agreement and consistent with the recommended
power factor and operating parameters provided by the manufacturer of the Solar Panels
and Inverters, as set forth in a written notice from Seller to Idaho Power delivered prior to
the Commercial Operation Date and, if applicable, updated in a subsequent written notice
from Seller to Idaho Power as required for Final Completion. The Nameplate Capacity
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Rating of the Facility shall not exceed the Expected Nameplate Capacity Rating.
1.80 "NERC" means the North American Electric Reliability Corporation.
1.81 "Net Output" means all electric energy and capacity produced by the Facility, less station
use and less transformation and transmission losses and other adjustments (e.9., Seller's
load other than station use), if any. For purposes of calculating payment under this
Agreement, Net Output of electric energy shall be the amount of electric energy flowing
through the Point of Delivery.
1.82 "Network Resource" is defined in the Tariff.
1.83 "Network Service Provider" means Idaho Power Transmission, as a provider of network
service to Idaho Power under the Tariff.
1.84 "Non-Compensable Curtailment" is defined in Section 5.4.1
1.85 "Offered Interests" is defined in Section 8.4.1
1.86 "Off-Peak Hours" or "LLH" means the daily hours from hour ending 2300 - 0600 MPT, (8
hours), plus all other hours on all Sundays and NERC designated holidays.
1.87 "On-Peak Hours" or "HLH" means the daily hours from hour ending 0700 - 2200 MPT, (16
hours), Monday through Saturday, excluding all hours on all Sundays and NERC
designated holidays.
1.88 "OPUC" means the Public Utility Commission of Oregon.
1.89 "Output" means all electric energy produced by the Facility.
1.90 "Output Guarantee" is defined in Section 7 .12.1.
1.91 "Output Shortfall" is defined in Section 7 .12.3.2.
1.92 "Party" and "Parties" are defined in the opening paragraph hereto
1.93 "Permits" means the permits, licenses, approvals, certificates, entitlements and other
authorizations issued by Governmental Authorities required for the construction,
ownership or operation of the Facility or occupancy of the Premises, and all amendments,
modifications, supplements, general conditions and addenda thereto.
1.94 "Planned Outage" means NERC Event Type PO, as set forth in attached Exhibit 6, and
specifically excludes any Maintenance Outage or Forced Outage.
1.95 "Point of Delivery" means the point of interconnection between the Facility and the
System, as specified in the Generator Interconnection Agreement and as further described
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in Exhibit 3
1.96 "Potential Net Output" means the quantity of Net Output that Seller is capable of
delivering at the Point of Delivery at any specific time. Potential Net Output will be
calculated as the aggregate electric energy available for delivery at the Point of Delivery
using the best available data obtained through commercially reasonable methods, and
shall be dependent on solar insolation data at the Facility, cloud cover forecast models,
Facility equipment availability, Solar Panels and Inverter performance guaranties
provided by Seller to Idaho Power in accordance with Exhibits 2,3 and 15, derates and
transmission line losses, and any other adjustments necessary to accurately reflect the
Facility's capability to produce and deliver electric energy at the Point of Delivery.
1.97 "Premises" means the real property on which the Facility is or will be located, as more
fully described on Exhibits 9, 10 and 15.
1.98 "Project Development Security" is defined in Section 9.1.1
1.99 "Prudent Electrical Practices" means any of the practices, methods and acts engaged in or
approved by a signihcant portion of the independent electric power generation industry in
the United States for solar facilities of similar size and characteristics or any of the
practices, methods or acts, which, in the exercise of reasonable judgment in the light of
the facts known at the time a decision is made, could have been expected to accomplish
the desired result at the lowest reasonable cost consistent with reliability, safety and
expedition.
1.100 "Qualifying Institution" means a United States commercial bank or trust company
organized under the laws of the United States of America or a political subdivision
thereof having assets of at least $10,000,000,000 (net of reserves) and a credit rating on
its long-term senior unsecured debt of at least o'A" from S&P and"A2" from Moody's.
l.l0l "Reporting Month" is defined in Section 7.10.1
1.102 "Required Facility Documents" means the Permits and other authorizations, rights and
agreements now or hereafter necessary for construction, ownership, operation, and
maintenance of the Facility, and to deliver the Net Output to Idaho Power in accordance
with this Agreement and Requirements of Law, including those set forth in Exhibit 9.
1.103 "Required Percentage" means ninety percent (90%).
1.104 "Requirements of Law" means any applicable and mandatory (but not merely advisory)
federal, state and local law, statute, regulation, rule, action, order, code or ordinance
enacted, adopted, issued or promulgated by any federal, state, local or other
Governmental Authority or regulatory body (including those pertaining to electrical,
building, zoning, environmental and wildlife protection and occupational safety and
health).
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1.105 "Restricted Transaction" is defined in Section 8.4.1.
1.106 "ROFO" is defined in Section 8.2.
1.107 "ROFO Period" is defined in Section 8.4.1.
1.108 "ROFO Seller" is defined in Section 8.4.1
1 .109 "RTO" means any entity (including an independent system operator) that becomes
responsible as system operator for, or directs the operation of, the System.
1.1 l0
1.111
1.112
l.l l3
l.l l4
l.l 15
1.1 16
"S&P" means Standard & Poor's Rating Group (a division of S&P Global, Inc.).
"SCADA" means supervisory control and data acquisition.
"Scheduled Commercial Operation Date" means December 1.2022.
"Security Interests" is defined in Section 9.3.1.
"Seller" is defined in the opening paragraph hereto.
"Seller Indemnitees" is defined in Section 13.1.2.
"Seller ROFO Notice" is defined in Section 8.4.1.
1.117 "Seller's Cost to Cover" means the positive difference, if any, between (a) the Contract
Price per kWh specified in Exhibit 5, and (b) the time weighted average of the Market
Price Index of Net Output not purchased by Idaho Power as required hereunder. If on
any given day the difference between (a) minus (b) referenced above is zero or negative,
then Seller's Cost to Cover shall be zero dollars with respect to such day, and Idaho
Power shall have no obligation to pay any amount to Seller on account of Section 12.2.2
For any days prior to the Commercial Operation Date, the Contract Price applicable in
the first Contract Year shall be utilized for purposes of clause (a).
l.l 18 "Seller Uncontrollable Minutes" means, for the Facility in any month, the total number of
minutes during such month during which the Facility was unable to deliver Net Output to
Idaho Power (or during which Idaho Power failed to accept such delivery) due to one or
more of the following events, each as recorded by SCADA and indicated by electronic
fault logs: (a) an emergency or Force Majeure event; (b) to the extent not caused by
Seller's actions or omissions, a Non-Compensable Curtailment in accordance with
Section 5.4.1; (c) the System operating outside the voltage or frequency limits defined in
the applicable operating manual for the Inverters installed at the Facility; (d) Planned
Outages, but in no event exceeding thirty six (36) hours per Contract Year consistent with
such operating manual; (e) Compensable Curtailment as provided in Section 6.1.3; (f) a
default by Idaho Power; provided, however, that if any of the events described above in
items (a) through (f) occur simultaneously, then the relevant period of time shall only be
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counted once in order to prevent double counting. Seller Uncontrollable Minutes shall
not include minutes when (i) the Facility or any portion thereof was unavailable solely
due to Seller's non-conformance with the Generation Interconnection Agreement or (ii)
the Facility or any portion thereof was paused or withdrawn from use by Seller for
reasons other than those covered in this definition.
l.l l9 "Senior Lenders" means Lenders being granted senior security interests on the Facility or
its assets, or Seller or its equity, other than Affiliates of Seller.
1.120 "Solar Array" means one or more Solar Panels connected to the same Inverter.
l.l2l "Solar Energy Production Forecasting" is defined in Section 7.7.1
1.122 "Solar Panels" means the photovoltaic electric energy generating panels installed at the
Facility, as described in Exhibits 2 and 15.
1.123 "Solar Performance Modeling Program" means a commercially available computer
modeling program that is generally accepted in the United States solar energy industry
capable of modeling the Expected Energy and other similar outputs. Solar Perforrnance
Modeling Program includes, but is not limited to, the PVSYST program. If Seller elects
a Solar Performance Modeling Program to which Idaho Power does not have access,
Seller, at its cost, shall provide Idaho Power access to and the right to use the Solar
Performance Modeling Program in order for Idaho Power to fully analyze all modeling
provided by Seller under this Agreement.
1.124 "Start-Up Testing" means the start-up tests for the Facility as set forth in Exhibit 7
1.125 "System" means the electric transmission substation and transmission or distribution
facilities owned, operated or maintained by Transmission Provider, which shall include,
after construction and installation of the Facility, the circuit reinforcements, extensions,
and associated terminal facility reinforcements or additions required to interconnect the
Facility, all as set forth in the Generation Interconnection Agreement.
1.126 "Tariff'means the Idaho Power FERC Electric Tariff Volume No. l1 Open Access
Transmission Tariff, as revised from time to time.
1.127 "Tax Credits" means any state, local and/or federal production tax credit, tax deduction,
and/or investment tax credit (including the ITC) specific to the production of renewable
energy and/or investments in renewable energy facilities.
I .128 "Term" is defined in Section 4.1
1.129 "Test Energy" means any Net Output during periods prior to the Commercial Operation
Date and related Capacity Rights.
1.130 "Transmission Provider" means Idaho Power Transmission.
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I .131 "WECC" means the Western Electricity Coordinating Council.
1.132 "WREGIS" means the Western Renewable Energy Generation Information System.
1.133 Rules of Interpretation.
I . 133. I General. Unless otherwise required by the context in which any term
appears, (a) the singular includes the plural and vice versa; (b) references to "Articles,"
"Sections," "Schedules," "Appendices" or "Exhibits" are to articles, sections, schedules,
appendices or exhibits hereof; (c) all references to a particular entity or an electricity
market price index include a reference to such entity's or index's successors; (d) "herein,"
"hereof' and "hereunder" refer to this Agreement as a whole; (e) all accounting terms not
specifically defined herein shall be construed in accordance with generally accepted
accounting principles, consistently applied; (f) the masculine includes the feminine and
neuter and vice versa; (g) "including" means "including, without limitation" or
"including, but not limited to"; (h) all references to a particular law or statute mean that
law or statute as amended from time to time; (i) all references to electric energy or
capacity are to be interpreted as utilizing alternating current, unless expressly stated
otherwise; and (i) the word "or" is not necessarily exclusive. Reference to "days" shall be
calendar days, unless expressly stated otherwise herein.
1.133.2 Terms Not to be Construed For or Against Either Party. Each term hereof
shall be construed according to its fair meaning and not strictly for or against either Party
The Parties have jointly prepared this Agreement, and no term hereof shall be construed
against a Party on the ground that the Party is the author of that provision.
I .133.3 Headings. The headings used for the sections and articles hereof are for
convenience and reference purposes only and shall in no way affect the meaning or
interpretation of the provisions hereof.
1.133.4 Examples. Example calculations and other examples set fonh herein are
for purposes of illustration only and are not intended to constitute a representation,
warranty or covenant concerning the example itself or the matters assumed for purposes
of such example. If there is a conflict between an example and the text hereof, the text
shall control.
1.133.5 Intemretation with FERC Orders. Each Party conducts and shall conduct
its operations in a manner intended to comply with FERC Order No. 717, Standards of
Conduct for Transmission Providers, and its companion orders, requiring the separation
of its transmission and merchant functions. Moreover, the Parties acknowledge that
Interconnection Provider's transmission function offers transmission service on its system
in a manner intended to comply with FERC policies and requirements relating to the
provision of open-access transmission service. The Parties recognize that Seller will
enter into the Generation Interconnection Agreement with the Interconnection Provider.
Nothing herein is intended to make any statement about FERC jurisdiction in relation to
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the Seller
1.134 Other Terms. The Parties acknowledge and agree that the Generator Interconnection
Agreement shall be a separate and free standing contract and that the terms hereof are not
binding upon the Interconnection Provider.
Notwithstanding any other provision in this Agreement, nothing in the Generation
Interconnection Agreement, nor any other agreement between Seller on the one hand and
Transmission Provider or Interconnection Provider on the other hand, nor any alleged event of
default thereunder, shall alter or modify the Parties' rights, duties, and obligation hereunder.
This Agreement shall not be construed to create any rights between Seller and the
Interconnection Provider or between Seller and the Transmission Provider.
Seller expressly recognizes that, for purposes hereof, the Interconnection Provider and
Transmission Provider each shall be deemed to be a separate entity and separate contracting
party from Idaho Power whether or not the Generation Interconnection Agreement is entered into
with Interconnection Provider or an Affiliate thereof. Seller acknowledges that Idaho Power,
acting in its merchant capacity function as purchaser hereunder, has no responsibility for or
control over Interconnection Provider or Transmission Provider, and is not liable for any breach
of agreement or duty by Interconnection Provider or Transmission Provider.
SECTION 2
REPRESENTATIONS AND WARRANTIES
2.1 Mutual Representations and Warranties. Each Party represents, covenants, and
warrants to the other that:
2.1.1 Organization. It is duly organized and validly existing under the laws of
the State of its organization.
2.1.2 Authority. It has the requisite power and authority to enter this Agreement
and to perform according to the terms hereof.
2.1.3 Corporate Actions. It has taken all corporate or entity actions required to be taken
by it to authorize the execution, delivery and performance hereof and the consummation
of the transactions contemplated hereby.
2.1.4 No Contravention. The execution and delivery hereof does not contravene
any provision of, or constitute a default under, any indenture, mortgage, security
instrument or undertaking, or other material agreement to which it is a party or by which
it is bound, or any valid order ofany court, or any regulatory agency or other
Governmental Authority having authority to which it is subject.
2.1.5 Valid and Enforceable Agreement. This Agreement is a valid and legally binding
obligation of it, enforceable against it in accordance with its terms, except as the
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enforceability hereof may be limited by general principles of equity or bankruptcy,
insolvency, bank moratorium or similar laws affecting creditors'rights generally and laws
restricting the availability of equitable remedies.
2.1.6 Litigation. No litigation, arbitration, investigation or other proceeding is pending
or, to the best of either Party's knowledge, threatened in writing against either Party or its
members, with respect hereto and the transactions contemplated hereunder. No other
investigation or proceeding is pending or threatened in writing against a Party, its
members, or any Affiliate, the effect of which would materially and adversely affect the
Party's performance of its obligations hereunder.
2.1.7 Eligible Contract Participant. It, and any guarantor of its obligations under this
Agreement, is an "eligible contract participant" as that term is defined in the United
States Commodity Exchange Act.
2.2 Seller's Further Representations and Warranties. Seller further represents,
covenants, and warrants to Idaho Power that
2.2.1 Authority. Seller (a) has (or will have prior to the Commercial Operation
Date) all required regulatory authority to make wholesale sales from the Facility;
(b) has the power and authority to own and operate the Facility and be present
upon the Premises for the Term; and (c) is duly qualified and in good standing
under the laws of the state of Idaho and each other jurisdiction where its
ownership, lease or operation of property or the conduct of its business requires
such qualification.
2.2.2 No Contravention. The execution, delivery, performance and observance
by Seller of its obligations hereunder do not and will not:
2.2.2.1contravene, conflict with or violate any provision of any material
Requirements of Law presently in effect having applicability to either
Seller or any of Seller's members;
2.2.2.2 require the consent or approval of or material filing or registration
with any Governmental Authority or other person other than such consents
and approvals which are (i) set forth in Exhibit 9 or (ii) required in
connection with the construction, operation, or maintenance of the Facility
and expected to be obtained in due course;
2.2.2.3 result in a breach of or constitute a default under any provision of
any security issued by any of Seller's members or managers, the effect of
which would materially and adversely affect Seller's performance of, or
ability to perform, its obligations hereunder, or any material agreement,
instrument or undertaking to which either Seller's members or any
Affiliates of Seller's members is a party or by which the property of any of
Seller's members or any Affiliates of Seller's members is bound, the effect
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of which would materially and adversely affect Seller's performance of, or
ability to perform, its obligations hereunder.
2.2.3 Required Facility Documents. All Required Facility Documents are listed
on Exhibit 9. Pursuant to the Required Facility Documents, Seller holds as of the
Effective Date, or will hold by the Commercial Operation Date (or such other
later date as may be specified under Requirements of Law), and will maintain for
the Term all Required Facility Documents. The anticipated use of the Facility
complies with all applicable restrictive covenants affecting the Premises.
Following the Commercial Operation Date, Seller shall promptly notify Idaho
Power of any additional Required Facility Documents.
2.2.4 Dellyary af Etaryy. On or before the Commercial Operation Date, Seller
shall hold rights suffrcient to enable Seller to deliver Net Output at the Nameplate
Capacity Rating from the Facility to the Point of Delivery pursuant to this
Agreement throughout the Term.
2.2.5 Control of Premises. Seller has all legal rights necessary for the Seller to
enter upon and occupy the Premises for the purpose of constructing, operating and
maintaining the Facility for the Term. All leases of real property required for the
operation of the Facility or the performance of any obligations of Seller hereunder
are set forth and accurately described in Exhibits 9 and 10. Seller shall maintain
all leases or other land grants necessary for the construction, operation and
maintenance of the Facility as valid for the Term. Upon request by Idaho Power,
Seller shall provide copies of the memoranda of lease recorded in connection with
the development of the Facility.
2.2.6 Undertakins of Asreement: Professionals and Experts. Seller has engaged
those professional or other experts it believes necessary to understand its rights
and obligations pursuant to this Agreement. All professionals or experts
including 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. In entering into this Agreement and the undertaking
by Seller of the obligations set forth herein, Seller has investigated and
determined that it is capable of performing hereunder and has not relied upon the
advice, experience or expertise of Idaho Power in connection with the transactions
contemplated by this Agreement.
2.2.7 Verification. All information relating to the Facility, its operation and
output and the Premises provided to Idaho Power and contained in this Agreement
has been verified by Seller and is true and accurate.
2.2.8 Renewable Claims. Seller has at all times complied with the Federal Trade
Commission requirements set forth in 16 CFR Part260 in any communications
concerning the Output, the Facility and the Green Tags that have or may be
generated from the Facility. Seller has not claimed the Green Tags,
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Environmental Attributes or other "renewable energy," "green energy," "clean
energy" or similar attributes of the Output or the Facility as belonging to the
Seller or any Seller Affiliate and is not aware of any such claims made by third
parties with respect to the Facility or the Output.
2.3 No Other Repfesentations or Warranties. Each Party acknowledges that it has
entered into this Agreement in reliance upon only the representations and warranties set
forth in this Agreement, and that no other representations or warranties have been made
by the other Party with respect to the subject matter hereof.
2.4 Continuiue Nature of Represent s and Warranties: Notice. The
representations and warranties set forth in this Section are made as of the Effective Date
and deemed repeated as of the Commercial Operation Date. If at any time during the
Term, aParty obtains actual knowledge of any event or information that would have
caused any of the representations and warranties in this Section 2 to be materially untrue
or misleading at the time given, such Party shall provide the other Party with written
notice of the event or information, the representations and warranties affected, and the
action, if any, which such Party intends to take to make the representations and
warranties true and correct. If at any time a Party obtains actual knowledge that the
representations and warranties in this Section 2 are not true, said Party shall provide
written notice to the other Party. The notice required pursuant to this section shall be
given as soon as practicable after the occurrence ofeach such event.
SECTION 3
CONDITIONS TO ACCEPTANCE OF GENERATION, FIRST GENERATION DATE
3.1 Conditions to be granted First Generation Date. As a condition of the Buyer's acceptance
of deliveries of Net Output from the Seller, the following conditions shall be satished.
3.1.1 Commission Approval. The IPUC and OPUC shall have approved this
Agreement as contemplated in Section 2l,or Buyer shall have waived such approval
3.1.2 Board Approval. The Board of Directors of both Idaho Power Company and
IDACORP, Inc. shall have approved this Agreement.
3 . 1 .3 Within thirry (3 0) days of the date of a final non-appealable IPUC order approving this
Power Purchase Agreement Seller shall post the Project Development Security in the
amount described in Section 9.1.
3.1.4 Seller shall provide to Idaho Power a certificate from a Licensed Professional
Engineer confirming that the Required Facility Documents including the material
permits, consents and agreements necessary to operate and maintain the Facility have
been obtained by Seller.
3.1.5 Seller shall provide Idaho Power with documentation showing that Seller has
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obtained retail electric service for the Facility
3.1.6 Idaho Power has received a certificate addressed to Idaho Power from a Licensed
Professional Engineer stating that, in conformance with the requirements of the
Generation Interconnection Agreement: (l ) all required Interconnection Facilities have
been constructed; (2) all required interconnection tests have been completed; and (3) the
Facility is physically interconnected with the System in conformance with the Generation
Interconnection Agreement and able to deliver electric energy consistent with the terms
of this Agreement.
3.1.7 Idaho Power has received a certificate from a Licensed Professional Engineer
licensed in the state of Idaho addressed to Idaho Power stating that Seller has obtained or
entered into all Permits and Required Facility Documents. Seller must provide copies of
any or all Required Facility Documents requested by Idaho Power.
3.1.8 Idaho Power has received, addressed to Idaho Power from a Licensed
Professional Engineer, an executed Engineer's Certification of Design & Construction
Adequacy and an Engineer's Certification of Operations and Maintenance (O&M)
Policy. These certificates will be in the form specified in Exhibit I I but may be modified
to the extent necessary to recognize the different engineering disciplines providing the
certificates.
3.1.9 ldaho Power has received an opinion from a law firm or attorney licensed in the
State of Idaho stating, after all appropriate and reasonable inquiry (1) Seller has obtained
or entered into all Required Facility Documents; (2) neither Seller nor the Facility are in
violation of or subject to any liability under any Requirements of Law; and (3) Seller has
duly filed and had recorded all of the agreements, documents, instruments, mortgages,
deeds of trust and other writings described in Section 9.3.1 .
3. I .10 Idaho Power has received a certificate addressed to Idaho Power from an
authorized officer of Seller (1) stating that Seller has completed all of its obligations that
would permit Idaho Power to designate the Facility as a Network Resource and receive
firm transmission service from the Transmission Provider in sufficient capacity to meet
or exceed the Maximum Delivery Rate; and (2) that includes a document from the
Transmission Provider confirming each of the items to which the Seller certifies in (1)
above.
3.1.1 1 Seller has satisfied its obligation to pay for any required Network Upgrades as a
Network Resource pursuant to the Generation Interconnection Agreement (as those terms
are defined in the Generation Interconnection Agreement).
3.1 .12 Seller shall submit written proof to the Buyer of all insurance required in Section
14.
3.1 .13 Seller shall request and obtain written confirmation from the Buyer that all
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conditions to acceptance of Test 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 the Buyer.
The conditions set forth in this Section 3 are to be used solely for the purposes of determining
when the Facility has achieved a First Generation Date and are not intended to affect in any way
when the Facility is deemed to have been "placed in service" for tax treatment purposes.
With respect to Sections 3.1.4 through 3.1.8 above, the certificate or opinion provided to Idaho
Power must come from a Licensed Professional Engineer or, in the case of Section 3.1.9 above,
an attorney that is not an employee of Seller (or any Affiliate) and has no financial interest in the
Facility.
Notwithstanding the foregoing, the date for achieving each of the foregoing items shall be
extended on a day for day basis for any delay due solely to Idaho Power's delay in taking, or
failure to take, any action required of it hereunder in breach of this Agreement.
Without limiting Seller's obligations under this Agreement, none of the following shall excuse in
any respect Seller's failure to comply with any and all provisions in this Section 3, no matter
what the source or reason, unless an accepted event of Force Majeure: including but not limited
to; (i) economic hardship, including lack of money or inability to obtain financing; (ii) inability
to obtain any supply of any good or service, (iii) any breakdown or malfunction of any
equipment; (iv) costs or taxes; (v) anything relating to any Required Facility Document; (vi) (vii)
anlthing relating to the Transmission Provider, Network Service Provider, Interconnection
Provider, or Generation Interconnection Agreement; or (viii) increased cost of electricity, steel,
labor, or transportation.
3.2 Idaho Power's Risht to Monitor. After the Effective Date, Seller shall permit Idaho
Power and its advisors and consultants to:
3.2.1 Review and discuss with Seller and its advisors and consultants monthly
status reports on the progress of the acquisition, design, financing, engineering,
construction and installation of the Facility. Between the Effective Date and thirty (30)
days following the date of Final Completion, Seller shall, on or before the tenth (10th) day
of each calendar month, provide Idaho Power with a brief monthly status report of such
progress for the preceding month.
3.2.2 Monitor the status of the acquisition, Premises, land leasing, design, financing,
engineering, construction and installation of the Facility and the performance of the
contractors constructing the Facility.
3.2.3 Monitor and receive monthly updates from Seller conceming (i) the
progress of Seller's negotiation and execution of contracts for the acquisition, design,
financing, engineering, construction and installation of the Facility, Premises, major
equipment, and warranties, and (ii) the contractors'performance and achievement of
contract deliverables and all performance and other tests required to achieve Commercial
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Operation or contemplated by the warranty agreements between Seller and a
manufacturer of the Facility's Solar Panels and Inverters and any other material items of
Facility equipment that require testing for warranty agreements to be effective. Seller
shall provide Idaho Power with at least two (2) Business Days prior written notice of
each such test, with the understanding that if the performance of such test is dependent on
the presence of sufficient solar insolation or other variables beyond the control of Seller,
the date of such test may be postponed if, on the date specified in the related notice, there
is insufficient solar insolation or other circumstances beyond the control of Seller that
prevent the performance of such test on the scheduled date. Seller does not herein grant
Idaho Power the right to review, comment on or approve of the terms or conditions of
any contract or negotiation between Seller and a third party, the terms and conditions of
each such contract or negotiation being conf,rdential and to be determined by Seller in its
sole discretion. Conversely, nothing in this Agreement shall be construed to require
Idaho Power to review, comment on, or approve of any contract between Seller and a
third party and any such review, comment or approval by Idaho Power shall not
constitute a waiver by Idaho Power or any of Seller's obligations under this Agreement or
create any obligation or liability for Idaho Power.
3.2.4 Witness initial performance tests and other tests and review the results
thereof; with Seller to make best efforts to provide Idaho Power five (5) Business Days'
advance written notice of each such major test.
3.2.5 Perform such examinations, inspections, and quality surveillance as, in
Idaho Power's reasonable judgment, are appropriate and advisable to determine that the
Facility has been properly commissioned and Commercial Operation and Final
Completion have been achieved.
With respect to Idaho Power's right to monitor under this Section 3.2, (i) Idaho Power is under
no obligation to exercise any of these monitoring rights, (ii) such monitoring shall occur subject
to reasonable rules developed by Seller regarding Facility construction, access, health, safety,
and environmental requirements, and (iii) Idaho Power shall have no liability to Seller for failing
to advise it of any condition, damages, circumstances, infraction, fact, act, omission or disclosure
discovered or not discovered by Idaho Power with respect to the Facility or any contractor. Any
review or monitoring of the Facility conducted by Idaho Power hereunder shall be performed in
a manner that does not impede, hinder, postpone, or delay Seller or its contractors in their
performance of the engineering, construction, design or testing of the Facility. Idaho Power shall
maintain one or more designated representatives for purposes of the monitoring activities
contemplated in this Section 3.2, which representatives shall have authority to act for Idaho
Power in all technical matters under this Section 3.2 as authorized by Idaho Power but not to
amend or modify any provision hereof.
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SECTION 4
TER}I AND COMMERCIAL OPERATION DATE
4.1 Term. This Agreement shall become effective on the Effective Date and, subject to earlier
termination as provided in this Agreement, shall continue in full force and effect for a period of twenty
(20) Contract Years from the Commercial Operation Date (the "Term").
4.2 Commercial Operation Date. Seller will in good faith using commercially reasonable
efforts seek to achieve the Commercial Operation Date by the Scheduled Commercial Operation
Date. The Commercial Operation Date shall occur after all the following conditions have been
satisfied.
4.2.1 Idaho Power has received the Default Security, as applicable
4.2.2 Seller shall notifu Buyer of the Seller's proposed Commercial Operation Date, in
written form no later than five (5) Business Days prior to the proposed Commercial
Operation Date.
4.2.3 Seller shall have completed and shall have maintained all conditions to
acceptance of generation specified in Section 3.
4.2.4 All Facility systems necessary for the stable, safe, reliable and consistent
operation of the installed Facility are substantially complete, any testing of the installed
Facility required pursuant to the Interconnection Agreement(s) and Interconnection
Provider documents and equipment supplier requirements have been successfully
completed, and the Facility is available for operation in all material respects in
accordance with the Requirements of Law.
4.2.5 Seller shall have delivered to Buyer a "Certificate of Facility Completion" signed
by an officer of Seller certifying that the requirements of Sections 4.2.3 and 4.2.4 have
been satisfied with respect to the Facility.
4.2.6 Idaho Power has received a certificate addressed to Idaho Power from a Licensed
Professional Engineer that is licensed in the state of Idaho stating: (1) the Nameplate
Capacity Rating of the Facility at the anticipated time of Commercial Operation, which
must be at least the Required Percentage of the Expected Nameplate Capacity Rating; (2)
that the Facility is able to generate electric energy reliably in amounts expected by this
Agreement and in accordance with all other terms and conditions hereof; (3) Start-Up
Testing of the Facility has been successfully completed; and (a) all GOLC equipment is
installed and operational.
4.2.7 Seller shall have requested and obtained written confirmation from the Buyer that
all conditions to receiving an Operation Date 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 the Buyer.
11-LL-
4.2.8 Commercial Operation Date Notice. Seller shall provide written notice to Idaho
Power stating when Seller believes that the Facility has achieved Commercial Operation
and its Nameplate Capacity Rating accompanied by the certificates and opinions
described above.
4.2.9 Idaho Power shall have ten (10) Business Days after receipt of such written notice
from Seller either to confirm to Seller that all of the conditions to Commercial Operation
have been satisfied or have occurred, or to state with specificity what Idaho Power
reasonably believes has not been satisfied. If, within such ten (10) Business Day period,
Idaho Power does not respond or notifies Seller confirming that the Facility has achieved
Commercial Operation, the original date of receipt of Seller's written notice shall be the
Commercial Operation Date. If Idaho Power notifies Seller within such ten (10) Business
Day period that Idaho Power reasonably believes the Facility has not achieved
Commercial Operation, Seller must address the concerns stated in Idaho Power's notice to
the satisfaction of Idaho Power. In the event Idaho Power provides notice of deficiency
with regards to the information submitted to establish the Commercial Operation Date,
then the Commercial Operation Date will be the date upon which Seller has addressed the
concerns stated in Idaho Power's notice to Idaho Power's reasonable satisfaction.
4.2.10 [f Commercial Operation of the Facility is achieved based on less than one
hundred percent (100%) of the Expected Nameplate Capacity Rating, then Seller may
inform Idaho Power, by written notice received no later than ten (10) Business Days after
the Commercial Operation Date, that Seller intends to bring the Facility above the
Required Percentage up to but not exceeding one hundred percent (100%) of the
Expected Nameplate Capacity Rating. Such notice from Seller shall include a Final
Completion Schedule. After providing that notice, Seller shall cause the Facility to
achieve Final Completion on or before the ninetieth (90th) day after the Commercial
Operation Date.
4.2.11 If Commercial Operation is achieved at less than one hundred percent (100%) of
the Expected Nameplate Capacity Rating and Seller informs Idaho Power that Seller
intends to bring the Facility to one hundred percent (100%) of the Expected Nameplate
Capacity Rating, Seller shall provide Idaho Power, no later than ten (10) Business Days
after the Commercial Operation Date, with the Final Completion Schedule. All items on
the Final Completion Schedule must be completed on or before the ninetieth (90th) day
after the Commercial Operation Date. If a Final Completion Schedule is not provided to
Idaho Power within ten (10) Business Days following the Commercial Operation Date,
then the date of Final Completion shall be the same as the Commercial Operation Date.
These Commercial Operation Date requirements are to be used solely for purposes of
determining when the Facility has achieved its Commercial Operation Date. They are not
intended to affect in any way when the Facility is deemed to have been "placed in service" for
purposes of tax treatment eligibility or purposes.
-23 -
4.3 Continuing Obligations. Seller shall provide Buyer with the following during the Term of
this Agreement:
4.3.1 At Buyer's request, Seller shall provide evidence that it is in compliance with the
insurance requirements set forth in Section 14.
4.3.2 Seller shall maintain compliance and remain in good standing in all requirements
of Sections 3 and 4 of this Agreement.
4.4 Commercial Operation Date Delay, Delay Damages and Deficit Damages.
4.4.1 If Commercial Operation is not achieved on or before the Scheduled Commercial
Operation Date, Seller shall pay to Idaho Power Delay Damages from and after the
Scheduled Commercial Operation Date up to, but not including,'the date that the Facility
achieves Commercial Operation. Delay Damages cease to accrue in the event of
termination of this Agreement.
4.4.2 If the Facility does not achieve Commercial Operation by the Guaranteed
Commercial Operation Date, Idaho Power may terminate this Agreement pursuant to
Section 12.
4.4.3 If the Facility achieves Final Completion based on less than one hundred percent
(100%) of the Expected Nameplate Capacity Rating, Seller shall pay to Idaho Power
Deficit Damages.
After the date of Final Completion, any partially completed Solar Array shall not be part of the
Facility, and Seller shall not undertake to add any such partially completed Solar Array or output
from such partially completed Solar Array to the Facility without the prior written consent of
Idaho Power, such consent will not be unreasonably withheld. Any output of such Solar Array
or Capacity Rights associated with such output shall be treated as Net Output above the
Maximum Delivery Rate and is subject to Section 7.8.
4.5 Damages Calculation. Each Party agrees and acknowledges that (a) the damages that
Idaho Power would incur due to Seller's delay in achieving Commercial Operation or failure to
reach Final Completion based on one hundred percent (100%) of the Expected Nameplate
Capacity Rating would be difficult or impossible to predict with certainty, and (b) it is
impractical and difficult to assess actual damages in the circumstances stated, and therefore the
Delay Damages and Deficit Damages as agreed to by the Parties and set forth herein are a fair
and reasonable calculation of such damages. The Parties agree that Delay Damages and Deficit
Damages shall be Idaho Power's exclusive remedy for a delay in achieving Commercial
Operation or failure to reach Final Completion based on one hundred percent (100%) of the
Expected Nameplate Capacity Rating and believe that Delay Damages and Deficit Damages
fairly represent actual damages. Subject to the foregoing sentence, this Section 4.5 shall not
limit Seller's termination rights or the amount of damages payable to Idaho Power if this
Agreement is terminated as a result of Seller's failure to achieve Commercial Operation by the
Guaranteed Commercial Operation Date. Any such termination damages shall be determined in
-24 -
accordance with Section 12.4.
4.6 Damaqes Invoicing. By the tenth (1Oth) day following the end of the calendar month in
which Delay Damages begin to accrue or Deficit Damages are incurred, as applicable, and
continuing on the tenth (l0th) day of each calendar month during the period in which Delay
Damages accrue (and the following months, if applicable), Idaho Power shall deliver to Seller an
invoice showing Idaho Power's computation of such damages and any amount due Idaho Power
in respect thereof for the preceding calendar month. No later than ten (10) days after receiving
such an invoice and subject to Sections ll.2 and I 1.3, Seller shall pay to Idaho Power, by wire
transfer of immediately available funds to an account specified in writing by Idaho Power or by
any other means agreed to by the Parties in writing from time to time, the amount set forth as due
in such invoice.
4.7 Tax Credits. Seller shall notify Idaho Power whether Seller has elected to claim the ITC
within thirty (30) days following{he date that Seller (or Seller's Affiliate, on a consolidated
basis) files its first tax retum after the Commercial Operation Date. Seller shall bear all risks,
financial and otherwise throughout the Term, associated with Seller's or the Facility's eligibility
to receive the ITC or other Tax Credits, or to qualify for accelerated depreciation for Seller's
accounting, reporting or tax purposes. The obligations of the Parties hereunder, including those
obligations set forth herein regarding the purchase and price for and Seller's obligation to deliver
Net Output, shall be effective regardless of whether the sale of Output or Net Output from the
Facility is eligible for, or receives, the ITC or other Tax Credits during the Term.
SECTION 5
DELIVERIES OF NET OUTPUT AND GREEN TAGS
5.1 Purchase and Sale. Except as otherwise expressly provided herein, commencing on the
Commercial Operation Date and continuing through the Term, Seller shall sell and make
available to Idaho Power, and Idaho Power shall purchase and receive (a) the entire Net Output
from the Facility at the Point of Delivery, not including the Expansion Energy unless Idaho
Power elects to purchase the same pursuant to Section 8.1, and (b) all Green Tags associated
with the Output or otherwise resulting from the generation of energy by the Facility. Idaho
Power shall be under no obligation to make any purchase hereunder other than Net Output and
all Green Tags, as described above. Idaho Power shall not be obligated to purchase, receive or
pay for Output (or Green Tags associated with such Output) that is not delivered to the Point of
Delivery. In addition, during the period between the Effective Date and the Commercial
Operation Date, Seller shall sell and make available to Idaho Power, and Idaho Power shall
purchase and receive, all Net Output and Green Tags from the Facility as Test Energy at the
price specified in Section 6.1.1.
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5.2 No Sales to Third Parties. During the Term, Seller shall not sell any Net Output, energy,
Green Tags or Capacity Rights from the Facility to any party other than Idaho Power; provided,
however, that this restriction shall not apply during periods when Idaho Power is in default
hereof because it has failed to accept or purchase that Net Output or Green Tags as required
hereunder or to Expansion Energy if Idaho Power does not elect to purchase the same pursuant to
Section 8.1.
5.3 Title and Risk of Loss of Net Output. Seller shall deliver Net Output, Green Tags and
Capacity Rights to Idaho Power free and clear of all liens, claims and encumbrances. Title to
and risk of loss of all Net Output shall transfer from Seller to Idaho Power upon its delivery to
Idaho Power at the Point of Delivery. Seller shall be deemed to be in exclusive control of, and
responsible for, any damage or injury caused by, all Output up to and at the Point of Delivery.
Idaho Power shall be deemed to be in exclusive control of, and responsible for, any damages or
injury caused by, Net Output after the Point of Delivery.
5.4 Curtailment.
5.4.1 Non-Compensable Curtailment. Except for Compensable Curtailment Energy in
accordance with Section 6.1.3, Idaho Power shall not be obligated to purchase, receive,
pay for, or pay any damages associated with, Net Output if such Net Output is not
delivered to the System or Point of Delivery for any of the following reasons: (a) the
interconnection between the Facility and the System is disconnected, suspended or
intemrpted, in whole or in part, consistent with the terms of the Generation
Interconnection Agreement, (b) the Market Operator, Transmission Provider or Network
Service Provider directs a general curtailment, reduction, or redispatch of generation in
the area, (which would include the Net Output) for any reason (excluding curtailment of
purchases for general economic reasons unilaterally directed by the Market Operator or
Idaho Power acting solely in its merchant function capacity), even if and no matter how
such curtailment or redispatch directive is carried out by Idaho Power, which may fulfill
such directive by acting in its sole discretion; or if Idaho Power curtails or otherwise
reduces the Net Output in any way in order to meet its obligations to the Market
Operator, Transmission Provider or Network Service Provider to operate within system
limitations or otherwise, (c) the Facility's Output is not received because the Facility is
not fully integrated or synchronized with the System, or (d) an event of Force Majeure
prevents either Party from delivering or receiving Net Output (each of the foregoing a
"Non-Compensable Curtailment").
5.4.2 Curtailed Amount. The quantity of Non-Compensable Curtailment will be
calculated by determining the quantity of Net Output that would have been produced by
the Facility and delivered to the Point of Delivery had its generation not been so curtailed
under this Section 5.4. The quantity of such curtailed electric energy shall be determined
based on (a) the time and duration of the Non-Compensable Curtailment and (b) solar
conditions recorded at the Facility during the period of Non-Compensable Curtailment
and the production estimate based on the Solar Panels and Inverter performance
guaranties provided by Seller to Idaho Power in accordance with Exhibits 2 and 15.
Seller shall promptly provide Idaho Power with access to such information and data as
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Idaho Power may reasonably require to confirm to its reasonable satisfaction the amount
of electric energy that was not generated or delivered because of a Non-Compensable
Curtailment.
5.4.3 Compensable Curtailment. Idaho Power shall pay Seller for Compensable
Curtailment Energy as set forth in Section 6.1.3.
5.5 Idaho Power as Merchant. Seller acknowledges that Idaho Power, acting in its merchant
capacity function as purchaser under this Agreement, has no responsibility for or control
over Idaho Power Transmission or any successor Transmission Provider.
5.6 Green Tags.
5.6.1 Title. Idaho Power will be granted ownership of 100% of the Green Tags or
Environmental Attributes associated with the Facility. Title to 100% of the Green Tags
or Environmental Attributes shall pass from Seller to Idaho Power immediately upon the
generation of the Output at the Facility that gives rise to such Green Tags or
Environmental Attributes. Idaho Power's title to 100% of the Environmental Attributes
and Green Tags shall expire at the end of the term of this Agreement, unless the Parties
agree to extend in future agreements. If after the Effective Date and during the term of
this Agreement any additional Green Tags, Environmental Attributes or similar
environmental value is created by legislation, regulation, or any other action, including
but not limited to, carbon credits and carbon offsets, Idaho Power shall be granted
ownership of 100o/o of these additional Green Tags or Environmental Attributes or
environmental values that are associated with the Net Output delivered by the Seller to
Idaho Power. Seller shall use prudent and commercially reasonable efforts to ensure that
any operations of the Facility do not jeopardize the current or future Green Tags or
Environmental Attribute status of this solar generation Facility.
5.6.2 Documentation. At least sixty (60) days prior to the First Generation Date, the
Parties shall mutually cooperate to enable Idaho Power's Green Tags or Environmental
Attributes from this Facility to be placed into Idaho Power's WREGIS account or any
other Green Tag or Environment Attribute accounting and tracking system selected by
the Idaho Power. The Seller at the Seller's sole expense will be responsible to establish
and maintain the Seller's WREGIS or other Green Tag or Environmental Attribute
account and/or system that enables the creation of the Environmental Attribute
certificates associated with this Facility and the transfer of 100% of the Green Tags or
Environmental Attributes to Idaho Power for the Term of this Agreement. If the Green
Tag or Environmental Attribute accounting and tracking system initially selected by
Idaho Power is materially altered or discontinued during the Term of this Agreement, the
Parties shall cooperate to identify an appropriate alternative Green Tag or Environmental
Attribute accounting and tracking process and enable the Green Tag or Environmental
Attributes be processed through this alternative method.
5.6.3 If Idaho Power requests additional Environmental Attribute certifications beyond
what is provided by the WREGIS process the Seller shall use its best efforts to obtain any
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Environmental Attribute certifications required by Idaho Power for those Environmental
Attributes delivered to Idaho Power from the Seller. If the Seller incurs cost, as a result
of Idaho Power's request, and if the additional certification provides benefits to both
Parties, the Parties shall share the costs in proportion to the additional benefits obtained.
If Idaho Power elects to obtain its own certifications, then Seller shall fully cooperate
with Idaho Power in obtaining such certification.
5.6.4 Publicity. Seller shall not make any public statement or report under any program
that any of the Green Tags purchased by Idaho Power hereunder belong to any person
other than Idaho Power. Seller shall reasonably cooperate in any registration by Idaho
Power of the Facility in the renewable portfolio standard or equivalent program in all
such fuither states and programs in which Idaho Power may wish to register or
maintained registered the Facility by providing copies of all such information as Idaho
Power reasonably requires for such registration.
5.6.5 Renewable Claims. Seller will comply with the Federal Trade Commission
requirements set forth in l6 CFR Part260 in any communications concerning the Output,
the Facility and the Green Tags that are or may be generated from the Facility. Seller will
not claim the Green Tags, Environmental Attributes or other "renewable energy," "green
energy," "clean energy" or similar attributes of the Output or the Facility as belonging to
the Seller or any Seller Affiliate or to any person or entity other than Idaho Power.
5.7 Purchase and Sale of Capacitv Riehts. For and in consideration of ldaho Power's
agreement to purchase from Seller the Facility's Net Output and Green Tags on the terms and
conditions set forth herein, Seller transfers to Idaho Power, and Idaho Power accepts from Seller,
all right, title, and interest that Seller may have in and to Capacity Rights, if any, existing during
the Term.
5.8 Representation Regarding Ownership of Capacity Rishts. Seller represents that it has not
sold, and covenants that during the Term it will not sell or attempt to sell to any other person or
entity the Capacity Rights, if any. During the Term, Seller shall not report to any person or
entity that the Capacity Rights, if any, belong to anyone other than Idaho Power. Idaho Power
may at its own risk and expense report to any person or entity that Capacity Rights exclusively
belong to it.
5.9 Authority to Make Sales. Seller covenants that during the Term it will maintain all
required regulatory authority to make wholesale sales from the Facility to Idaho Power.
5.10 Further Assurances. At Idaho Power's request, the Parties shall execute such documents
and instruments as may be reasonably required to effect recognition and transfer of the Net
Output or Capacity Rights, if any, to Idaho Power.
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SECTION 6
CONTRACT PRICE; COSTS
6.1 Contract Price: Includes Green Tags and Capacity Rights. Idaho Power shall pay Seller
the prices stated below for all deliveries of Net Output, Green Tags and Capacity Rights, up to
the Maximum Delivery Rate. The price provided for Test Energy in Section 6.1.1, the Contract
Price provided for in Section 6.1.2, and the Compensable Curtailment Price provided for in
Section 6.1.3 include the consideration to be paid by Idaho Power to Seller for all Net Output,
Green Tags, Capacity Rights and Test Energy, respectively, and Seller shall not be entitled to
any compensation over and above the Contract Price or the Test Energy price, as the case may
be, for the Green Tags and Capacity Rights associated therewith.
6.1 .l Test Enerey and Net Output Before Commercial Operation Date. Between the
Effective Date and the Commercial Operation Date, Seller shall sell and deliver to Idaho
Power all Test Energy and Net Output. Idaho Power shall pay Seller for such Test
Energy and Net Output delivered at the Point of Delivery, an amount per MWh equal to
eighty five percent (85%) of the Market Price Index for the applicable hour on the
applicable day in the applicable month, provided, however, that Seller's right to receive
payment for such Test Energy and Net Output is subject to Idaho Power's right of offset
under Section 71.2 for, among other things, payment by Seller of any Delay Damages
owed to Idaho Power by Seller pursuant to Section 4.4 and Section 9.1.2.
6.1.2 Net Output After Commercial Operation Date. For the period beginning on the
Commercial Operation Date and thereafter during the Term, Idaho Power shall pay to
Seller the Contract Price per MWh of Net Output delivered to the Point of Delivery, as
specified in Exhibit 4.
6.1.3 Compensable Curtailment. If, during the period beginning on the Commercial
Operation Date and thereafter during the Term, Net Output is curtailed by Idaho Power
and such curtailment is not included as a Non-Compensable Curtailment ("Compensable
Curtailment Energy"), then Idaho Power shall pay to Seller the Compensable Curtailment
Price for the Compensable Curtailment Energy, as determined below.
6.1.3.1 The Parties will calculate the quantity of Compensable Curtailment
Energy by determining the Potential Net Output (A) during those periods of time
when the Facility is on GOLC and the GOLC Set-Point is set at a level that will
not allow the entire Nameplate Capacity Rating to be deliverable by determining
the difference between Potential Net Output and the delivered Net Output, and
(B) during those periods of time when the Facility is not on GOLC or the GOLC
Set-Point is set at a level that will allow the Nameplate Capacity Rating to be
deliverable by determining the amount that would have been available for
delivery had its generation not been so curtailed. Compensable Curtailment
Energy shall equal the number of kWh represented by the Potential Net Output
less the Net Output actually delivered to the Point of Delivery.
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6.l.3.2Idaho Power will pay Seller the Contract Price for each kWh of
Compensable Curtailment Energy, net of any Non-Compensable Curtailments
(the "Compensable Curtailment Price").
6.1.3.3 For purposes of determining Compensable Curtailment Energy, the
amount of Potential Net Output at any given time will be calculated using ldaho
Power's solar forecasting vendor/tool.
6.2 Costs and Charges. Seller shall be responsible for paying or satisfying when due all costs
or charges imposed in connection with the scheduling and delivery of Net Output up to-and at the
Point of Delivery, including transmission costs, Transmission Service, and transmission line
losses, and any operation and maintenance charges imposed by Interconnection Provider and
Transmission Provider for the lnterconnection Facilities. Idaho Power shall be responsible for
all costs or charges, if any, imposed in connection with the delivery of Net Output at and from
the Point of Delivery, including transmission costs and transmission line losses and imbalance
charges or penalties. Without limiting the generality of the foregoing, Seller, in accordance with
the Generation Interconnection Agreement, shall bear all costs associated with the modifications
to Interconnection Facilities or the System (including system upgrades) caused by or related to
(a) the interconnection of the Facility with the System and (b) any increase in generating
capacity of the Facility.
6.3 Station Service. Seller shall be responsible for arranging and obtaining, at its sole risk
and expense, arLy station service required by the Facility that is not provided by the Facility itself.
6.4 Taxes. Seller shall pay or cause to be paid when due, or reimburse Idaho Power for, all
existing and any new sales, use, excise, severance, ad valorem, and any other similar taxes,
imposed or levied by any Governmental Authority on the Net Output, Capacity Rights or Green
Tags up to and including, but not beyond, the Point of Delivery, regardless of whether such taxes
are imposed on Idaho Power or Seller under Requirements of Law. Idaho Power shall pay or
cause to be paid when due all such taxes imposed or levied by any Governmental Authority on
the Net Output, Capacity Rights or Green Tags beyond the Point of Delivery, regardless of
whether such taxes are imposed on Idaho Power or Seller under Requirements of Law. The
Contract Price shall not be adjusted on the basis of any action of any Governmental Authority
with respect to changes to or revocations of sales and use tax benefits, rebates, exception or give
back. In the event any taxes are imposed on a Party for which the other Party is responsible
hereunder, the Party on which the taxes are imposed shall promptly provide the other Party
written notice thereof and such other information as such Pany may reasonably request with
respect to any such taxes. Seller shall be responsible for any and all sun and light severance
taxes.
6.5 eosts of Ownership and Ope . Without limiting the generality of any other
provision hereof and subject to Section 6.4, Seller shall be solely responsible for paying when
due (a) all costs of owning and operating the Facility in compliance with existing and future
Requirements of Law and the terms and conditions hereof, and (b) all taxes and charges
(however characterized) now existing or hereinafter imposed on or with respect to the Facility,
its operation, or on or with respect to emissions or other environmental impacts of the Facility,
-30-
including any such tax or charge (however characterized) to the extent payable by a generator of
such energy or Environmental Attributes.
6.6 Rates Not Subiect to Review. The rates for service specified herein shall remain in effect
until expiration of the Term, and shall not be subject to change for any reason, including
regulatory review, absent agreement of the Parties. Neither Party shall petition FERC pursuant
to the provisions of Sections 205 or 206 of the Federal Power Act (16 U.S.C. 5 792 et seq.) to
amend such prices or terms, or support a petition by any other person or entity seeking to amend
such prices or terms, absent the agreement in writing of the other Party. Further, absent the
agreement in writing by both Parties, the standard of review for changes hereto proposed by a
Party, a non-party or the FERC acting sua sponte shall be the "public interest" application of the
"just and reasonable" standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas
Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co.,
350 U.S. 348 (1956) and clarihed by Morgan Stanley Capital Group. Inc. v. Public Util. Dist.
No. I of Snohomish, 554 U.S. 527, 128 S. Ct. 2733 (2008).
SECTION 7
OPERATION AND CONTROL
7.1 As-Built Supplement. Within thirty (30) days of completion of construction of the
Facility, Seller shall provide Idaho Power the As-built Supplement. The As-built Supplement
shall be deemed effective and shall be added to Exhibit 16 when it has been reviewed and
approved by Idaho Power, which approval shall not be unreasonably withheld or delayed. If the
proposed As-built Supplement does not accurately describe the Facility as actually built or is
otherwise defective as to form in any material respect, Idaho Power may within fifteen (15) days
after receiving the proposed As-built Supplement give Seller a notice describing what Idaho
Power wishes to correct. If Idaho Power does not give Seller such a notice within the fifteen
(15) day period, the As-built Supplement shall be deemed approved. If Idaho Power provides a
timely notice requiring corrections, Seller shall in good faith cooperate with ldaho Power to
revise the As-built Supplement to address Idaho Power's concerns. Notwithstanding the
foregoing, Idaho Power shall have no right to require Seller to relocate, modifu or otherwise
change in any respect any aspect of the Facility as actually built.
7 .2 Standard of Facility Operation.
7.2.1 General. At Seller's sole cost and expense, Seller shall build, operate, maintain
and repair the Facility and the Interconnection Facilities in accordance with (a) the
applicable and mandatory standards, criteria and formal guidelines of FERC, NERC, any
RTO, and any other Electric System Authority and any successors to the functions
thereof; (b) the Permits and Required Facility Documents; (c) the Generation
Interconnection Agreement; (d) all Requirements of Law; (e) the requirements hereof;
and (0 Prudent Electrical Practice. Seller acknowledges that it shall have no claims
hereunder against Idaho Power with respect to any requirements imposed by or damages
caused by (or allegedly caused by) the Transmission Provider. Seller will have no claims
against Idaho Power under this Agreement with respect to the provision of station
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servlce
7.2.2 Oualified Operator. From and after the Commercial Operation Date, Seller or an
Affiliate of Seller shall itself operate and maintain the Facility or cause the Facility to be
operated and maintained by an entity, approved by Idaho Power (such approval not to be
unreasonably withheld, conditioned or delayed), that has at least two years of experience
in operation and maintenance of solar energy facilities of comparable size to the Facility.
Seller shall provide Idaho Power thiny (30) days prior written notice of any proposed
change in the operator of the Facility.
7.2.3 Fines and Penalties
7.2.3.1 Without limiting a Party's rights under Section 7.2.3.2, each Party shall
pay all fines and penalties incurred by such Party on account of noncompliance by
such Party with Requirements of Law in respect to this Agreement, except where
such fines and penalties are being contested in good faith through appropriate
proceedings.
7 .2.3.2If fines, penalties, or legal costs are assessed against or incurred by either
Party (the "lndemnified Party") on account of any action by any Governmental
Authority due to noncompliance by the other Party (the "lndemnifying Party")
with any Requirements of Law or the provisions hereof, or if the performance of
the Indemnifying Party is delayed or stopped by order of any Governmental
Authority due to the Indemnifying Party's noncompliance with any Requirements
of Law, the Indemnifying Party shall indemnify and hold harmless the
Indemnified Party against any and all losses, liabilities, damages, and claims
suffered or incurred by the Indemnified Party as a result thereof. Without limiting
the generality of the foregoing, the Indemnifying Party shall reimburse the
Indemnified Party for all fees, damages, or penalties imposed on the Indemnified
Party by any Governmental Authority, other person or entity or to other utilities
for violations to the extent caused by a default by the Indemnifying Party or a
failure of performance by the Indemnifying Party hereunder.
7.3 Interconnection. Seller shall be responsible for the costs and expenses associated with
obtaining from the Transmission Provider Network Resource interconnection service for the
Facility at its Nameplate Capacity Rating at the Point of Delivery. Seller shall have no claims
hereunder against Idaho Power, acting in its merchant function capacity, with respect to any
requirements imposed by or damages caused by (or allegedly caused by) acts or omissions of the
Transmission Provider or Interconnection Provider, in connection with the Generation
Interconnection Agreement or otherwise.
7.4 Coordination with System. Seller shall be responsible for the coordination and
synchronization of the Facility and the Interconnection Facilities with the System.
7.5 Outages.
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7.5.1 Planned Outages. Except as otherwise provided herein, Seller shall not schedule a
Planned Outage during daylight hours (sun up to sunset) during any portion of the months
of November, December, January, February, June, July, and August, except to the extent
a Planned Outage is reasonably required to enable a vendor to satisfy a guarantee
requirement. Seller shall provide Idaho Power with an annual forecast of Planned
Outages for each Contract Year at least one (1) month, but no more than three (3)
months, before the first day of that Contract Year, and shall promptly update such
schedule, or otherwise change it, only to the extent that Seller is reasonably required to
change it in order to comply with Prudent Electrical Practices. Seller shall not schedule
any maintenance of Interconnection Facilities during such months, without the prior
written approval of Idaho Power, which approval shall not be unreasonably withheld or
delayed.
7 .5.2 Maintenance Outaqes. If Seller reasonably determines that it is necessary to
schedule a Maintenance Outage, Seller shall notifu Idaho Power in writing of the
proposed Maintenance Outage as soon as practicable but in any event at least five (5)
days before the outage begins (or such shorter period to which Idaho Power may
reasonably consent in light of then-existing solar conditions). Upon such notice, the
Parties shall plan the Maintenance Outage to mutually accommodate the reasonable
requirements of Seller and the service obligations of Idaho Power; provided, however,
that Seller shall take all reasonable measures consistent with Prudent Electrical Practices
to not schedule any Maintenance Outage during the daylight hours of the following
periods: November, December, January, February, June l5 through June 30, July,
August, and September I through September 15. Notice of a proposed Maintenance
Outage shall include the expected start date and time of the outage, the amount of
generation capacity of the Facility that will not be available, and the expected completion
date and time of the outage. Seller shall give Idaho Power notice of the Maintenance
Outage as soon as practicable after Seller determines that the Maintenance Outage is
necessary. Idaho Power shall promptly respond to such notice and may request
reasonable modifications in the schedule for the outage. Seller shall use all reasonable
efforts to comply with any request to modify the schedule for a Maintenance Outage
provided that such change has no substantial impact on Seller. Seller shall notify Idaho
Power of any subsequent changes in generation capacity available to Idaho Power as a
result of such Maintenance Outage or any changes in the Maintenance Outage completion
date and time. As soon as practicable, any notifications given orally shall be confirmed
in writing. Seller shall take all reasonable measures consistent with Prudent Electrical
Practices to minimize the frequency and duration of Maintenance Outages.
Notwithstanding anything in this Section 7.5.2 to the contrary, Seller may schedule a
Maintenance Outage at any time and without the requirement to notify Idaho Power five
(5) days in advance during conditions of low solar insolation, but shall notify Idaho
Power promptly after Seller decides to schedule such Maintenance Outage.
7.5.3 Forccd lutagss. Seller shall promptly provide to Idaho Power an oral report, via
telephone to a number specified by Idaho Power (or other method approved by Idaho
Power), of any Forced Outage resulting in more than ten percent (10%) of the Nameplate
Capacity Rating of the Facility being unavailable. This report shall include the amount of
-JJ-
the generation capacity of the Facility that will not be available because of the Forced
Outage and the expected return date of such generation capacity. Seller shall promptly
update the report as necessary to advise Idaho Power of changed circumstances. As soon
as practicable, the oral report shall be confirmed in writing by notice to Idaho Power.
Seller shall take all reasonable measures consistent with Prudent Electrical Practices to
avoid Forced Outages and to minimize their duration.
7.5.4 Notice of Deratings and Outages. Without limiting the foregoing, Seller will
inform Idaho Power, via telephone to a number specified by Idaho Power (or other
method approved by Idaho Power), of any major limitations, restrictions, deratings or
outages known to Seller affecting the Facility for the following day (except curtailments
of Net Output at the direction of Idaho Power) and will promptly update Seller's notice to
the extent of any material changes in this information, with "major" defined as affecting
more than five percent (5%) of the Nameplate Capacity Rating of the Facility.
7.5.5 Effect of Outages on Estimated Output. Seller represents and warrants that the
estimated monthly net output set forth on Exhibit 4 takes into account the Planned
Outages, Maintenance Outages, and Forced Outages that Seller reasonably expects to
encounter in the ordinary course of operating the Facility.
7.6 Scheduling.
7.6.1 Cooperation and Standards. With respect to any and all scheduling requirements
hereunder, (a) Seller shall cooperate with Idaho Power with respect to scheduling Net
Output, and (b) each Party shall designate authorized representatives to communicate
with regard to scheduling and related matters arising hereunder. Each Party shall comply
with the applicable variable resource standards and criteria of any applicable Electric
System Authority.
7.6.2 Schedule Coordination. If, as a result hereof, Idaho Power is deemed by an RTO
to be financially responsible for Seller's performance under the Generation
Interconnection Agreement, due to Seller's lack of standing as a "scheduling coordinator"
or other RTO recognized designation, qualification or otherwise, then Seller shall acquire
such RTO recognized standing (or shall contract with a third party who has such RTO
recognized standing) such that Idaho Power is no longer responsible for Seller's
performance under the Generation Interconnection Agreement or RTO requirement.
7.7 Forecastine.
7.7.1 Solar Energy Production Forecast. "Solar Energy Production Forecast" means the
Idaho Power administered solar forecasting model for all solar projects that are under
contract to provide energy to Idaho Power. The Seller shall be responsible for an
allocated portion of the total costs of the forecasting model and to provide solar
irradiation and weather data specified in Section 7.7.2.
7.7.2 Solar Energy Production Forecast Cost and Data. Seller shall contribute to the
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cost of the Solar Energy Production Forecasting. The Facility's share of Solar Energy
Production Forecasting is determined as specified below. Seller's payments for the cost
of the Solar Energy Production Forecasting in any Contract Year will not be greater than
0. I % of the total energy payments made to Seller by Idaho Power hereunder during the
previous Contract Year.
a. For every month of this Agreement beginning with the first full month after the
First Energy Date as specified in this Agreement, the Solar Energy Production
Forecasting Monthly Cost Allocation (MCA) will be due and payable by the
Seller. Any Solar Energy Production Forecasting Monthly Cost Allocations
(MCA) that are not reimbursed to Idaho Power shall be deducted from energy
payments to the Seller.
b. During the hrst Contract Year, as the value of the 0.1Yo cap of the total energy
payments to be made to Seller by Idaho Power hereunder will not be known until
the first Contract Year is complete, Idaho Power will deduct the Facility's
calculated share of the Solar Energy Production Forecasting costs specif,red in
item d each month during the first Contract Year and subsequently refund any
overpayment (payments that exceed the cap) in equal monthly amounts over the
ensuing Contract Year.
c. The cost allocation formula described below will be reviewed and revised if
necessary on the last day of any month in which the cumulative MW nameplate of
Solar projects having IPUC approved agreements to deliver energy to Idaho
Power has been revised by an action of the IPUC.
d. The monthly cost allocation will be based upon the following formula:
Where: Total MW OMW) is equal to the total Nameplate Capacity rating of all solar
projects that are under contract to provide energy to Idaho Power Company.
Facilitv MW GMW) is equal to the Expected Nameplate Capacity rating of this Facility
as specified within this Agreement.
Annual Solar Enersv Production Forecastins Cost (AFCost) is equal to the total
annual cost Idaho Power incurs to provide Solar Energy Production Forecasting. Idaho
Power will estimate the AFCost for the current year based upon the previous year's cost
and expected costs for the current year. At year-end, Idaho Power will compare the
actual costs to the estimated costs and any differences between the estimated AFCost and
the actual AFCost will be included in the next year's AFCost.
Annual Cost Allocation (ACA) = AFCost X (FMW / TMW)
And
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Monthly Cost Allocation (MCA): ACA / 12
e. The Solar Energy Production Forecasting Monthly Cost Allocation (MCA) is due
and payable to Idaho Power. The MCA will first be netted against any monthly
energy payments owed to the Seller. If the netting of the MCA against the
monthly energy payments results in a balance being due Idaho Power, the Facility
shall pay this amount within fifteen (15) days of the date of the payment invoice.
7.7.2.1 The Seller shall also provide solar irradiation and weather data specific to the
Facility's physical location to Idaho Power via real time telemetry in a form
acceptable to Idaho Power. The specific equipment and location of this equipment
shall be specified in the GIA. This data will provided at 10 second intervals and will
consist of:
a.)
b.)
c.)
d.)
Global Horizontal Irradiance
Plane of Array
Temperature
Wind Speed and Direction
7.8 Increase in Nameplate Capacity Rating: New Project Expansion or Development.
Without limiting Section 8 or any restrictions herein on Nameplate Capacity Rating, if Seller
elects to increase, at its own expense, the ability of the Facility to deliver Net Output in
quantities in excess of the Maximum Delivery Rate through any means, including replacement or
modihcation of Facility equipment or related infrastructure, Idaho Power shall not be required to
purchase any Net Output, Capacity Rights, or Green Tags above the Maximum Delivery Rate.
Any such expansion or additional facility may not materially and adversely impact the ability of
either Party to fulfill its obligations pursuant hereto.
7.9 ElectronicCommunications.
7.9.1 GOLC.
7.9.1.1 Beginning on the Commercial Operation Date, Idaho Power will dispatch
Facility through its GOLC system installed by Seller.
Idaho Power may notify Seller, by telephonic communication or through use of
the GOLC Set-Point, to curtail the delivery of Net Output to Idaho Power from
the Facility and to the Point of Delivery, pursuant to Section 5.4, and Seller shall
promptly comply with such notification.
The GOLC Set-Point is calculated by the Transmission Provider and
communicated electronically through the SCADA system. Seller shall ensure
that, throughout the Term, the SCADA signal is capable of functioning on all
GOLC Set-Points within the margin of error specified in the Facility control
-36-
system manufacturer's set point margin of error.
Unless otherwise directed by Idaho Power, Seller shall ensure that the Facility
GOLC is in "Remote" set-point control during normal operations.
7.9.2 Telemetering. Seller shall during the Term provide telemetering equipment and
facilities capable of transmitting the following information concerning the Facility
pursuant to the Generation Interconnection Agreement and to Idaho Power on a real-time
basis, and will operate such equipment when requested by Idaho Power to indicate
instantaneous MW output at the Point of Delivery.
Commencing on the date of initial delivery of Test Energy, Seller shall also transmit or
cause to be transmitted to or make accessible to Idaho Power any other data from the
Facility that Seller receives on a real time basis, including meteorological data, solar
insolation data and Net Output data. Such real time data shall be provided to or be made
accessible to Idaho Power on the same basis on which Seller receives the data (e.g., if
Seller receives the data in four second intervals, Idaho Power shall also receive the data
in four second intervals). Seller must provide Idaho Power access to Seller's web-based
performance monitoring system.
7.9.3 Transmission Provider Consent. Seller shall execute a consent, in the form
required by Transmission Provider, to provide that Idaho Power can read the meter and
receive any and all data from the Transmission Provider relating to transmission of Net
Output or other matters relating to the Facility without the need for further consent from
Seller.
7.9.4 Dedicated Communication Circuit. Seller shall install a dedicated direct
communication circuit (which may be by common carrier telephone) between Idaho
Power and the control center in the Facility's control room or such other communication
equipment as the Parties may agree.
7.10 Reports and Records.
7.10.1 Monthly Reports. Commencing on the Commercial Operation Date, within thirty
(30) days after the end of each calendar month during the Term (each, a "Reporting
Month"), Seller shall provide to Idaho Power a report in electronic format, which report
shall include (a) summaries of the Facility's solar insolation and actual and predicted
output data for the Reporting Month in intervals not to exceed one hour (or such shorter
period as is reasonably possible with commercially available technology), including
information from the Facility's computer monitoring system; (b) summaries of any other
signihcant events related to the construction or operation of the Facility for the Reporting
Month; and (c) any supporting information that Idaho Power may from time to time
reasonably request (including historical solar insolation data for the Facility).
7.10.2 Electronic Fault Log. Seller shall maintain an electronic fault log of operations of
the Facility during each hour of the Term commencing on the Commercial Operation
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Date. Seller shall provide Idaho Power with a copy of the electronic fault log within
thiny (30) days after the end of the calendar month to which the fault log applies.
7.10.3 Other Information to be Provided to Idaho Power. Seller shall provide to Idaho
Power the following information concerning the Facility:
7 .10.3.1 Upon the request of Idaho Power, the manufacturers' guidelines
and recommendations for maintenance of the Facility equipment;
7.10.3.2 A report summarizing the results of maintenance performed during
each Maintenance Outage, Planned Outage, and any Forced Outage, and upon
request of Idaho Power any of the technical data obtained in connection with such
maintenance;
7.10.3.3 Before Final Completion, a monthly progress report stating the
percentage completion of the Facility and a brief summary of construction activity
during the prior month;
7.10.3.4 Before Final Completion, a monthly report containing a brief
summary of construction activity contemplated for the next calendar month;
7.10.3.5 From and after the Commercial Operation Date, a monthly report
detailing the availability of the Facility; and
7.10.3.6 At any time from the Effective Date, one year's advance notice of
the termination or expiration of any material agreement, including Leases,
pursuant to which the Facility or any material equipment relating thereto is upon
the Premises; provided that the foregoing does not authorize any early termination
ofany land lease. In the event Seller has less than one year's advance notice of
such termination or expiration, Seller shall provide the notice contemplated by
this Section to Idaho Power within fifteen (15) Business Days of Seller obtaining
knowledge of the termination or expiration.
7.10.4 Information to Governmental Authorities. Seller shall, promptly upon written
request from Idaho Power, provide Idaho Power with all data collected by Seller related
to the construction, operation or maintenance of the Facility reasonably required by Idaho
Power or an Affiliate thereof for reports to, and information requests from, any
Governmental Authority or Electric System Authority. Along with this information,
Seller shall provide to Idaho Power copies of all submittals to Governmental Authorities
or Electric System Authorities directed by Idaho Power and related to the operation of the
Facility with a certificate that the contents of the submittals are true and accurate to the
best of Seller's knowledge. Seller shall use best efforts to provide this information to
Idaho Power with sufficient advance written notice to enable Idaho Power to review such
information and meet any submission deadlines imposed by the requesting organization
or entity. Idaho Power shall reimburse Seller for all of Seller's reasonable actual costs
and expenses in excess of $10,000 per year, if any, incurred in connection with Idaho
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Power's requests for information under this Section 7.10.4.
7.10.5 Data Request. Seller shall, promptly upon written request from Idaho Power,
provide Idaho Power with data collected by Seller related to the construction, operation
or maintenance of the Facility reasonably required for information requests from any
Governmental Authorities, state or federal agency intervener or any other party achieving
intervenor status in any Idaho Power rate proceeding or other proceeding before any
Govemmental Authority. Seller shall use best efforts to provide this information to Idaho
Power sufficiently in advance to enable Idaho Power to review it and meet any
submission deadlines. Idaho Power shall reimburse Seller for all of Seller's reasonable
actual costs and expenses in excess of$10,000 per year, ifany, incurred in connection
with Idaho Power's requests for information under this Section 7.10.5.
7.10.6 Documents to Govemmental Authorities. After sending or filing any statement,
application, and report or any document with any Governmental Authority or Electric
System Authority relating to operation and maintenance of the Facility, Seller shall,
within five (5) Business Days of such submission or filing, provide to Idaho Power a
copy of the same.
7.10.7 Environmental Information. Seller shall, promptly upon written request from
Idaho Power, provide Idaho Power with all data reasonably requested by Idaho Power
relating to environmental information under the Required Facility Documents. Seller
shall further provide Idaho Power with information relating to environmental impact
mitigation measures it is taking in connection with the Facility's construction or operation
that are required by any Governmental Authority. Idaho Power shall reimburse Seller for
all of Seller's reasonable actual costs and expenses in excess of $ 10,000 per year, if any,
incurred in connection with Idaho Power's requests for the foregoing information under
this Section 7.10.7. As soon as it is known to Seller, Seller shall disclose to Idaho Power,
the extent of any material violation of any environmental laws or regulations arising out
of the construction, operation, or maintenance of the Facility, or the presence of
Environmental Contamination at the Facility or on the Premises, alleged to exist by any
Govemmental Authority having jurisdiction over the Premises, or the present existence
of, or the occurrence during Seller's occupancy of the Premises of, any enforcement,
legal, or regulatory action or proceeding relating to such alleged violation or alleged
presence of Environmental Contamination presently occurring or having occurred during
the period of time that Seller has occupied the Premises.
7.10.8 Operational Reports. Seller shall provide Idaho Power monthly operational
reports in a form and substance reasonably acceptable to Idaho Power, and Seller shall,
promptly upon written request from Idaho Power, provide Idaho Power with all
operational data requested by Idaho Power with respect to the performance of the Facility
and delivery of Net Output, Green Tags or Capacity Rights therefrom.
7.10.9 Notice of Material Adverse Events. Seller shall promptly notify Idaho Power of
receipt of written notice or actual knowledge by Seller or its Affiliates of the occurrence
of any event of default under any material agreement to which Seller is a party and of any
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other development, financial or otherwise, which would have a material adverse effect on
Seller, the Facility or Seller's ability to develop, construct, operate, maintain or own the
Facility as provided herein.
7.10.10 Notice of Litigation. Following its receipt of written notice or actual
knowledge of the commencement of any action, suit, or proceeding before any court or
Governmental Authority against Seller or its members with respect to this Agreement or
the transactions contemplated hereunder, Seller shall, within ten (10) days of such notice
or knowledge, give written notice to Idaho Power of the same. Following its receipt of
written notice or actual knowledge of the commencement of any action, suit or
proceeding before any court or Governmental Authority against Seller, its members or
any Affiliate, the effect of which would materially and adversely affect Seller's
performance of its obligations hereunder, Seller shall, within ten (10) days of such notice
or knowledge, give notice to Idaho Power of the same.
7.10.1I Additional Information. Seller shall provide to Idaho Power such other
information respecting the condition or operations of Seller, as such pertains to Seller's
performance of its obligations hereunder, or the Facility as Idaho Power may, from time
to time, reasonably request.
7.10.12 Confidential Treatment. The monthly reports and other information
provided to Idaho Power under this Section 7.10 shall be treated as Confidential Business
Information if such treatment is requested in writing by Seller at the time the information
is provided to Idaho Power, subject to Idaho Power's rights to disclose such information
pursuant to Sections 7.10.4,7.70.5,7.10.7,11.5,25.2 and25.3, and pursuant to any
applicable Requirements of Law. Seller shall have the right to seek confidential
treatment of any such information from the Governmental Authority entitled to receive
such information.
7 .ll Financial and Accounting Information. If Idaho Power or one of its Affiliates determines
that, under (i) the Accounting Standards Codification (ASC) 810, Consolidation of Variable
Interest Entities, and (ii) Requirements of Law that it may hold a variable interest in Seller, but it
lacks the information necessary to make a definitive conclusion, Seller hereby agrees to provide,
upon Idaho Power's written request, sufficient financial and ownership information so that Idaho
Power or its Affili ate may confirm whether a variable interest does exist under ASC 8l 0 and
Requirements of Law. If Idaho Power or its Affiliate determines that, under ASC 810, it holds a
variable interest in Seller, Seller hereby agrees to provide, upon Idaho Power's written request,
sufficient financial and other information to Idaho Power or its Affiliate so that Idaho Power may
properly consolidate the entity in which it holds the variable interest or present the disclosures
required by ASC 810 and Requirements of Law. Idaho Power shall reimburse Seller for Seller's
reasonable costs and expenses, if any, incurred in connection with Idaho Power's requests for
information under this Section 7.1 1.
7.12 Output Guarantee.
7.12.1 Output Guarantee. Seller is obligated to deliver a quantity of Net Output during
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each month which is equal to the Output Guarantee. For purposes of this Agreement,
"Output Guarantee" for any month means the sum of (i) 90% of the Expected Energy of
the Facility for such month, less (ii) any quantities of Output that were not delivered to
the Point of Delivery (or accepted by Idaho Power) in such month during periods
constituting Seller Uncontrollable Minutes (such quantity calculated on the basis of the
Net Output capable of being delivered in an hour at an average rate equivalent to the
actual Nameplate Capacity Rating).
7.12.1.2 Seller's Adiustment of Estimated Monthly Net Output Amounts in
Exhibit 4 After the Commercial Operation Date. After the Commercial Operation
Date, the Seller may revise any future estimated monthly Net Output amounts in
Exhibit 4 by providing written notice no later than 5 PM Mountain Time on the 25th
day of the month that is prior to the month to be revised. If the 25rh day of the month
falls on a weekend or holiday, then written notice must be received on the last
Business Day prior to the 25th day of the month. For example, if the Seller would
like to revise the Estimated Net Output Amount for October, they would need to
submit a revised schedule no later than September 25th or the last Business Day prior
to September 25th.
a.)This written notice must be provided to Idaho Power in
accordance with Section 24.1or by electronic notice as agreed to
by both Parties.
Failure to provide timely written notice of changes to the
Estimated Net Output Amounts will be deemed to be an election
of no change from the most recently provided monthly Estimated
Net Output Amounts.
b.)
7.12.2 Liquidated Damages for Output Shortfall.
7.12.2.1 If the quantity of Net Output delivered by the Facility during any
month is equal to or greater than the Output Guarantee for such month, Seller's
delivery obligation for such month shall be deemed satisfied for that month.
7.12.2.2 If the quantity of Net Output delivered by the Facility during any
month is less than the Output Guarantee for such month, the resulting shortfall, if
any, shall be determined for that month (the "Output Shortfall"). The Output
Shortfall shall be expressed in kWh and calculated in accordance with the
following formula:
Output Shortfall : (90%o of the Expected Energy for the month).
less
Any quantities of Output that were not delivered to the Point of Delivery (or
accepted by Idaho Power) in such month during periods constituting Seller
Uncontrollable Minutes (such quantity calculated on the basis of the Net Output
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capable of being delivered in an hour at an average rate equivalent to the actual
Nameplate Capacity Rating),
less
The Net Output for the month.
7.12.2.3 If the product of the Output Shortfall calculation set forth in
Section 7.12.2.1is a positive number, Seller shall pay Idaho Power liquidated
damages equal to the product of (i) the Output Shortfall for that month, multiplied
bV (ii) Idaho Power's Cost to Cover for that month. If the product of the Output
Shortfall calculation set forth in Section 7.12.2.1is a negative number, Seller shall
not be obligated to pay Idaho Power liquidated damages for such month.
7.12.2.4 Each Party agrees and acknowledges that (i) the damages that
Idaho Power would incur due to the Facility's failure to achieve the Output
Guarantee would be difficult or impossible to predict with certainty and (ii) the
liquidated damages contemplated by this provision are a fair and reasonable
calculation of such damages.
7.13 Access Rights. Upon reasonable prior notice and subject to the prudent safety
requirements of Seller, and Requirements of Law relating to workplace health and safety, Seller
shall provide Idaho Power and its authorized agents, employees and inspectors ("ldaho Power
Representatives") with reasonable access to the Facility: (a) for the purpose of reading or testing
metering equipment, (b) as necessary to witness any acceptance tests, (c) to provide tours of the
Facility to customers and other guests of Idaho Power (not more than twelve (12) times per
year), (d) for purposes of implementing Sections2.T or 10.5, and (e) for other reasonable
purposes at the reasonable request of Idaho Power. Idaho Power shall release Seller from any
and all Liabilities resulting from actions or omissions by any of the Idaho Power Representatives
in connection with their access to the Facility, except to the extent that such Liabilities are
caused-by the intentional or negligent act or omission of Seller or its agents or Affiliates.
7.14 Facility Images. Idaho Power shall be free to use any and all images from or of the
Facility for promotional purposes, subject to Seller's consent (not to be unreasonably withheld or
delayed, and which consent may consider Requirements of Law relating to Premises security,
obligations to outside vendors (including any confidentiality obligations), and the corporate
policies of Seller's Affiliates). Upon Idaho Power's request and at Idaho Power's expense, Seller
shall install imaging equipment at the Facility as Idaho Power may request, including video and
or web-based imaging equipment subject to the prudent safety requirements of Seller, and
Requirements of Law relating to workplace health and safety. Idaho Power shall retain full
discretion on how such images are presented including associating images of the Facility with a
Idaho Power-designated corporate logo.
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SECTION 8
RIGHT OF FIRST OFFER, ADDITIONAL GENERATION, AND OWNERSHIP OR
PURCHASE OPTION
8.1 For purposes of this Section 8, any reference to "Buyer" or "ldaho Power" shall also
mean Buyer's or Idaho Power's "Aff,rliate" as that term is defined in this Agreement.
8.2 Rieht of First Offer ("ROFO") on Faci[ly Expansion.
8.2.1 ,S to Offer . It at any time during the Term,
Seller or any Affiliate of Seller intends (a) to install equipment on the Premises in
addition to the equipment included in the original Facility, and such installation is
designed to increase the capacity of the Facility to more than the Nameplate Capacity
Rating at Final Completion, or (b) to otherwise enable the Facility or any expansion
thereof to produce more than the Maximum Delivery Rate, Seller shall first offer (or
cause its Affiliate to offer) the excess above the Maximum Delivery Rate (the
"Expansion Energy") to Idaho Power. Such offer shall set forth the terms and conditions
of the offer in writing and in reasonable detail. Seller shall promptly answer any
questions that Idaho Power may have concerning the offered terms and conditions and
shall meet with Idaho Power to discuss the offer.
8.2.2 Idaho Power's Reiection of Offer: Revival of Offer. If Idaho Power does not
accept the offered terms and conditions within thirty (30) days after receiving Seller's
offer, Seller (or the applicable Affiliate of Seller) may enter into an agreement to sell the
Expansion Energy to a third party on terms and conditions no more favorable to the third
party than those offered to Idaho Power unless otherwise agreed to between the Parties,
provided such sale of Expansion Energy may not in any way impact or alter Idaho
Power's rights, obligations or entitlements under this Agreement. If Seller (or its
Affiliate) wishes to enter into an agreement with a third party on terms more favorable to
such third party than those previously offered to Idaho Power under this section, Seller
shall first offer (or cause its Affiliate to offer) the revised terms and conditions to Idaho
Power under this section.
8.2.3 Idaho Power's Acceptance of Offer. If Idaho Power accepts an offer made by
Seller (or its Affiliate) under this section, the parties shall within sixty (60) days
following such acceptance enter into a power purchase agreement in substantially the
same form as this Agreement for the purchase and sale of such Expansion Energy (with
appropriate provisions proportionally adjusted to account for the size of the proposed
expansion relative to the Nameplate Capacity Rating of the Facility), but incorporating
such changes as are expressly identified in the terms and conditions offered by Seller (or
its Affiliate).
8.3 Right to Additional 100 MW of Capacity from Franklin Solar Project.
8.3.1 Contingent upon the Generator Interconnection Process for Franklin Solar (as
defined below) and the outcome of additional analysis, as well as the mutual agreement
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of the Parties, Buyer shall have the right at its option to purchase an additional 100 MW
of Expected Nameplate Capacity (the "Additional Output") identified as Franklin Solar
(generally described and depicted by the indicative layout set forth in Exhibit l7
("Franklin Solar"), and Seller agrees to sell the Additional Output to Buyer, in
accordance with and subject to the terms and conditions set forth in this Section 8.3, and
in accordance with the terms and conditions stated in this Agreement in its entirety, with
such modifications to the terms and conditions as the parties shall mutually deem
necessary to accommodate Buyer's purchase and Seller's sale of the Additional Output.
The Additional Output from Jackpot Holdings, LLC will not be considered Expansion
Energy for purposes of this Section 8. Unless mutually agreed to in writing otherwise,
this option in Section 8.3 expires on September 1,2019.
8.3.2 Should the Parties agree to the sale and purchase of the Additional Output
pursuant to this Agreement, the Expected Nameplate Capacity as defined in this
Agreement shall be increased by 100 MW, to a total of 220 MW; the Scheduled
Commercial Operation Date for the additional 100 MW shall be December 1,2023 (with
the Scheduled Operation Date for the 120 MW remaining at December 1,2022);the
Contract Price shall be that set forth in Exhibit 5 for the column designated as 220 MW;
and all other terms and conditions of this Agreement shall be adjusted in such manner as
shall be necessary to increase the Expected Nameplate Capacity on or before December
1,2023. The Parties agree to execute such amendments and take such other actions as
shall be reasonably necessary to incorporate the Additional Output into the terms,
conditions, and provisions of this Agreement and to otherwise effect the transaction
contemplated by this Section 8.3 upon exercise of Buyer's option to purchase the
Additional Output.
8.4 Rieht of First Offer on Ownership.
8.4.1 At any time subsequent to the Effective Date of this Agreement, except in
accordance with this Section 8.2.1, Seller: (a) shall not sell, transfer or offer to sell or
transfer, the Facility; and (b) shall cause its immediately upstream owner(s) (together
with Seller, each a "ROFO Seller") not to sell, transfer or offer to sell or transfer, any
ownership interest in Seller (the Facility and ownership interests in Seller, as applicable,
each the "Offered Interests") other than to an Affiliate in accordance with the provisions
of Section 22.2 (each a "Restricted Transaction"). If a ROFO Seller intends to enter into a
Restricted Transaction, Seller shall provide Buyer with written notice of same (a "Seller
ROFO Notice"), and Buyer shall have a right of first offer with respect to the purchase of
such Offered Interests. Within thirty (30) days after receipt of the Seller ROFO Notice,
Buyer shall notify Seller in writing of its decision whether or not to negotiate with ROFO
Seller for the purchase of the Offered Interests (the "Buyer ROFO Notice"). If Buyer
elects to negotiate with ROFO Seller for the purchase of the Offered Interests, Seller shall
cause ROFO Seller to negotiate in good faith and exclusively with Buyer, for a period of
not less than ninety (90) days following ROFO Seller's receipt of the Buyer ROFO
Notice. ("ROFO Period").
8.4.2 In the event that Buyer does not elect to negotiate with ROFO Seller for the
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purchase of the Offered Interests pursuant to Section 8.4.1, ROFO Seller shall be free to
sell, transfer or offer or negotiate to sell or transfer the Offered Interests in ROFO Seller's
sole discretion. In the event that Buyer elects to negotiate with ROFO Seller for the
purchase of the Offered Interests pursuant to Section 8.4.1, and if definitive transaction
documents between ROFO Seller and Buyer or its designee have not been executed with
respect to the Offered Interests within the ROFO Period, ROFO Seller may negotiate a
Restricted Transaction with any other Person, subject, in all cases, to the terms and
conditions of this Agreement, including Section 8.4.1 and the provisions of Section 22.In
no event may ROFO Seller enter into a Restricted Transaction with any other Person on
economic terms (such as purchase price, payment terms and overall revenue streams
associated with such transaction) or other material terms less favorable to ROFO Seller
than such economic terms, if any, as were negotiated by Buyer and ROFO Seller. As used
in this Section 8.4.2, "other material terms" means any terms identified by the Parties
acting in good faith within five (5) Business Days following expiration of the ROFO
Period that the Parties have not agreed to during their negotiation.
8.4.3 If ROFO Seller and such other Person do not agree upon the terms, conditions and
pricing for the Offered Interests within one hundred eighty (180) days following the
expiration of the ROFO Period, ROFO Seller and any Offered Interests shall again be
subject to this Section 8.2 with respect to any Restricted Transaction.
8.5 Negotiation of Facility Purchase. Promptly following the Effective Date, the Parties
agree to commence negotiation in good faith for Buyer's purchase of the Facility (or,
alternatively, all or a portion of the equity interests of the entity or entities owning the Facility,
including potential limited partnership interests or limited liability company membership
interests), under terms and conditions and pursuant to a purchase and sale agreement that are
commercially reasonable for a facility of the nature and size of the Facility and at a price
mutually agreed upon by the Parties, taking into account the income tax credits associated with
the Facility. The Parties will negotiate such purchase under a timeline that provides for Buyer's
acquisition of such Facility or equity interests no later than immediately prior to the Commercial
Operation Date of the Facility, unless the Parties mutually agree on an earlier or later date. Buyer
shall not be obligated to purchase the Facility or equity interests unless it shall have reached
mutual agreement with the Seller on the purchase price for the Facility or equity interests.
8.6 Efforts Required to Transfer Facility and Offered Interests. If Buyer exercises any right to
purchase or agrees to purchase the Facility (or Offered Interests) pursuant to any of the means
specified in this Section 8, then such purchase shall occur pursuant to a form ofpurchase and
sale agreement prepared by Buyer which shall contain customary representations, warranties and
covenants and otherwise be in form reasonably acceptable to Buyer. It shall be a condition of any
such purchase that Buyer obtains all necessary Governmental Approvals, and notwithstanding
any language to the contrary in this Agreement, Buyer shall be given sufficient time to obtain
such approvals in accordance with applicable statutes and regulations. Pursuant to the purchase
and sale agreement, Seller will take all actions necessary to transfer by deed, bill of sale, or both,
the Facility or Offered Interests to Buyer, as well as all other improvements placed on the Project
Site by Seller that are required for the continued and unintemrpted use, maintenance and
operation of the Facility, free and clear from any lien or monetary encumbrance created by or on
-45-
behalf of Seller or its Affiliates. In addition, Seller will assign to Buyer all transferrable
Governmental Approvals applicable to the Facility and Required Facility Documents, and all
transferrable warranties for the Facility. Seller shall cooperate with Buyer to assign and enforce
any and all warranties that apply to the Facility or any of its component parts, which obligation
shall survive the termination of this Agreement.
8.7 Due Diligence: Cooperation: Govemmental Approvals: Notice of Rishts. Seller will
provide, in a timely manner, information regarding the Facility and Offered Interests which is
reasonably requested by Buyer to allow Buyer to perform due diligence for the purchase of the
Facility and Offered Interests pursuant to this Section 8. Seller shall further provide
commercially reasonable cooperation and assistance to Buyer, without further compensation,
throughout Buyer's efforts to properly account for and obtain any necessary Governmental
Approvals with respect to the purchase of the Facility and Offered Interests pursuant to this
Section 8. Notwithstanding anything in this Agreement or any definitive transaction
documentation, Buyer shall not be obligated to proceed with the purchase of the Facility or any
Offered Interests pursuant to this Section 8 if Buyer does not receive all necessary Governmental
Approvals in connection with such transaction. Seller shall put any Person with which it enters
into discussions or negotiations regarding a Restricted Transaction on notice of the rights of
Buyer set forth in this Section 8. Buyer shall be permitted to file a notice of the rights contained
in this Section 8 with respect to the Project Site.
8.8 Termination of Asreement. Upon the acquisition of the Facility or Offered Interests by
Buyer pursuant to this Section 8, this Agreement shall terminate and neither Party shall have any
obligation to the other under this Agreement, except with respect to the terms and provisions
hereof that expressly survive the termination of this Agreement.
SECTION 9
SECURITY AND CREDIT SUPPORT
9.1 Project Development Security. Seller shall provide within five (5) Business Days from
receipt of a written request from Idaho Power all reasonable financial records necessary for
Idaho Power to confirm Seller satisfies the Credit Requirements.
9.1.1 Form and Amount of Project Development Security. On or before the date
specified in Section 4.2.1, Seller shall post and maintain in favor of Idaho Power (a) a
guaranty from a party that satisfies the Credit Requirements, in substantially the form
attached hereto as Exhibit 8, or (b) a Letter of Credit in favor of Idaho Power, in a form
acceptable to Idaho Power in its reasonable discretion, equal in each case to ninety
dollars ($90) per kW of Nameplate Capacity Rating (the "Project Development
Security"). Seller and any person or entity providing a guaranty shall provide within five
(5) Business Days from receipt of a written request from Idaho Power all reasonable
financial records necessary for Idaho Power to confirm the guarantor satisfies the Credit
Requirements.
9.1.2 Use of Project Development Security to Pay Delay Damages. If the Commercial
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Operation Date occurs after the Scheduled Commercial Operation Date and Seller has
failed to pay any Delay Damages when due under Section 4.4, Idaho Power shall be
entitled to and shall draw upon the Project Development Security an amount equal to the
Delay Damages until such time as the Project Development Security is exhausted. Idaho
Power shall also be entitled to draw upon the Project Development Security for other
damages if this Agreement is terminated under Section l2 because of Seller's default.
9.1.3 Termination of Project Development Security. Seller shall no longer be required
to maintain the Project Development Security after the Commercial Operation Date, if at
such time no damages are owed to Idaho Power under this Agreement. However, as of
the Commercial Operation Date, Seller may elect to apply the Project Development
Security toward the Default Security required by Section 9.2, including by the automatic
continuation (as opposed to the replacement) thereof.
9.2 Default Security.
9.2.1 Duty to Post Default Security. On the date specified in Section 4.2.1, Seller shall
post and maintain in favor of Idaho Power (a) a guaranty from an entity that satisfies the
Credit Requirements, in substantially the form attached hereto as Exhibit 8, or (b) a Letter
of Credit, each in the amount specified in Section 9.2.2 (the "Default Security"), as
provided in this Section 9.2. Seller and any person or entity providing a guaranty shall
provide within five (5) Business Days from receipt of a written request from Idaho Power
all reasonable financial records necessary for Idaho Power to confirm the guarantor
satisfies the Credit Requirements.
9.2.2 Amount of Default Security. The amount of the Default Security required by
Section 9.2.1 shall be forty-five dollars ($45) per kW of Nameplate Capacity Rating and
will be held until this Agreement expires. The amount of Default Security required shall
be thirty-five dollars ($35) per kW of Nameplate Capacity Rating beginning with
Contract Year eleven (11).
9.2.3 Use of Default Security to Pay Deficit Damages. If the Seller has failed to pay
any Deficit Damages when due under Section 4.4,ldaho Power shall be entitled to and
shall draw upon the Default Security an amount equal to the Deficit Damages until such
time as the Default Security is exhausted. Idaho Power shall also be entitled to draw
upon the Default Security for other damages if this Agreement is terminated under
Section l2 because of Seller's default.
9.3 SubordinatedSecuritylnterests.
9.3.1 Security Interests. On or before the Effective Date, and simultaneously with the
acquisition by Seller after the Effective Date of any additional real property in connection
with the Facility, Seller shall execute, file and record such agreements, documents,
instruments, mortgages, deeds of trust and other writings as Idaho Power may reasonably
-47 -
request, to give Idaho Power a perfected security interest in and lien on the Facility, the
Premises, all present and future real property, personal property and fixtures therein, the
Leases and all other assets necessary or appropriate for the development, construction,
ownership, operation or maintenance of the Facility, as security for Seller's performance
and any amounts owed by Seller to Idaho Power pursuant hereto (collectively the
"Security Interests"). The Security Interests shall be subordinate in right of payment,
priority and remedies only to (a) the interests of the Senior Lenders in any credit
arrangements described in the definition of "Lenders," and (b) to the extent provided by
applicable law, any workers', mechanics', suppliers', tax or similar liens arising in the
ordinary course ofbusiness that are either not yet due and payable or that have been
released by means of a performance bond posted within five (5) Business Days of the
commencement of any proceeding to foreclose the lien.
9.3.2 Maintenance of Security Interests. Seller hereby authorizes the filing and
recording of financing statements in the name of Seller as debtor thereunder and shall
take such further action and execute such fuither instruments and other writings as shall
be required by Idaho Power to confirm and continue the validity, priority, and perfection
of the Security Interests. The granting of the Security Interests shall not be to the
exclusion of, nor be construed to limit the amount of any further claims, causes of action
or other rights accruing to Idaho Power by reason of any breach or default by Seller
hereunder or the termination hereof prior to the expiration of the Term.
9.3.3 Transfer of Required Facility Documents. The Security Interests shall provide
that if Idaho Power acts to obtain title to the Facility pursuant to the Security Interests,
Seller shall take all steps necessary to transfer all Required Facility Documents necessary
to operate the Facility to Idahq Power, and shall diligently prosecute and cooperate in
such transfers.
9.4 Debt-to-EquityRatio:Annual and Ouarterlv Financial Statements. Seller shall at all
times during the Term, following the Commercial Operation Date, maintain the percentage of
Facility Equity (as defined below) at no less than thirty percent (30%). Annually on March 1't,
commencing after the Commercial Operation Date, Seller shall provide to Idaho Power a
certificate of Seller's Chief Financial Officer attesting to the maintenance of such Facility Equity
percentage and the Facility's then-current Book Value. If requested by Idaho Power from time to
time, Seller shall within thirty (30) days provide Idaho Power with copies of its most recent
annual and quarterly financial statements and statement of the Facility's then-current Book
Value. If, as of any such reporting date, the Facility Equity percentage is less than thirty (30)
percent, then within sixty (60) days after such reporting date, Seller, in its discretion, will either
(a) take the necessary action to cause the percentage of Facility Equity to be no less than thirty
percent (30%) or (b) increase the amount of the Default Security by an amount equal to one
percent (l%) (or pro rata portion thereof) of the then-current Book Value of the Facility for each
percentage (or pro rata portion thereof) that Facility Equity falls below thirty percent (30%).
Idaho Power, in its sole discretion, may require that any required increase to the Default Security
be provided in a form of Letter of Credit or cash, by providing written notice to Seller. For
purposes of this section, "Facility Equity" means the aggregate amount, as of the Commercial
Operation Date, of equity investment in the Facility by any owner, investor, or other party. The
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phrases "percentage of Facility Equity" or "Facility Equity percentage" means the ratio,
expressed as a percentage, of the Facility Equity to the sum of (x) all indebtedness outstanding to
Lenders and third parties relating to the Facility and (y) the amount of Facility Equity. Seller
shall not grant a security interest to any third party in the Facility or any of its assets to support
the obligations of any person or entity other than Seller or its Affiliates, or any obligations of
Seller or its Affiliates other than obligations that relate directly to the Facility Without limiting
the foregoing, Seller agrees to cause the contribution of Facility Equity whenever such
contribution is required under Seller's and Seller's Affiliates agreements with Lenders. The
requirements set forth in this Section 9.4 shall only be applicable for the time period after the
Commercial Operation Date.
9.5 a Limit on Seller's The security contemplated by this Section 9
(a) constitutes security for, but is not a limitation of, Seller's obligations hereunder and (b) shall
not be Idaho Power's exclusive remedy for Seller's failure to perform in accordance with this
Agreement. Seller shall maintain security as required by Sections 9.7,9.2 and 9.3, as applicable
per this Agreement. To the extent that Idaho Power draws on any security, Seller shall, on or
before the first day of the Contract Year following such draw, replenish or reinstate the security
to the full amount then required under this Section 9. If at any time the Seller or Seller's credit
support provider(s) fails to meet the Credit Requirements, then Seller shall provide replacement
security meeting the requirements set forth in Section 9 within ten (10) Business Days after the
earlier of (x) Seller's receipt of notice from any source that Seller or the credit support
provider(s), as applicable, no longer meets the Credit Requirements or (y) Seller's receipt of
written notice from Idaho Power requesting the posting of alternate security.
SECTION 10
METERING, METERING COMMUNICATIONS AND SCADA TELEMETRY
10.1 Meterine. 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 of the Tariff and the GIA.
10.2 Meterinq Communications. Seller shall, at the Seller's sole initial and ongoing expense,
iurange for, provide, install, and maintain dedicated metering communications equipment
capable of transmitting the metering data specihed in Sectionl0.l 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.
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10.3 and If the Facility's
Nameplate Capacity exceeds 3 MW, in addition to the requirements of Section 10.1 and 10.2,
Idaho 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
Output 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 of the Tariff and the GIA.
10.4 Metering Costs. To the extent not otherwise provided in the Generation Interconnection
Agreement, Seller shall bear all costs (including Idaho Power's costs) relating to all metering
equipment installed to accommodate Seller's Facility.
10.5 Losses. If the Idaho Power Metering equipment is capable of measuring the exact energy
deliveries by the Seller to the Idaho Power electrical system at the Point of Delivery, no Losses
will be calculated for this Facility. If the Idaho Power Metering Equipment is unable to measure
the exact electric energy deliveries by the Seller to the Idaho Power electrical system at the Point
of Delivery, a Losses calculation will be established to measure the energy losses (kwh) between
the Seller's Facility and the Idaho Power Point of Delivery. This loss calculation will be initially
set at two percent (2%) of the kWh energy production recorded on the Facility generation
metering equipment. At such time as Seller provides Idaho Power with the electrical equipment
specihcations (transformer loss specifications, conductor sizes, etc.) of all of the electrical
equipment between the Facility and the Idaho Power electrical system, Idaho Power will
configure a revised loss calculation formula to be agreed to by both parties and used to calculate
the kWh Losses for the remaining term of the Agreement. If at any time during the term of this
Agreement, Idaho Power 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.
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SECTION 11
BILLINGS, COMPUTATIONS AND PAYMENTS
I 1.1 Monthly Invoices. On or before the tenth (10'n) day following the end of each calendar
month, Seller shall deliver to Idaho Power a proper invoice showing Seller's computation of Net
Output delivered to the Point of Delivery during such month in the form of Exhibit 1. When
calculating the invoice, Seller shall provide computations showing the portion of Net Output that
was delivered during On-Peak Hours and the portion of Net Output that was delivered during
Off-Peak Hours. If such invoice is delivered by Seller to Idaho Power, then Idaho Power shall
send to Seller, on or before the later of the twentieth (20th) day following receipt of such invoice
or the thirtieth (30t) day following the end of each month, payment for Seller's deliveries of Net
Output and associated Green Tags to Idaho Power.
ll.2 Offsets. Either Party may offset any payment due hereunder against amounts owed by
the other Party pursuant hereto. Either Party's exercise of recoupment and set off rights shall not
limit the other remedies available to such Party hereunder.
1 1.3 Interest on Late Payments. Any amounts that are not paid when due hereunder shall bear
interest at the Contract Interest Rate from the date due until paid.
ll.4 Disputed Amounts. If either Party, in good faith, disputes any amount due pursuant to an
invoice rendered hereunder, such Party shall notify the other Party of the specific basis for the
dispute and, if the invoice shows an amount due, shall pay that portion of the statement that is
undisputed, on or before the due date. Except with respect to invoices provided under Section
I 1.1, any such notice shall be provided within two (2) years of the date of the invoice in which
the error first occurred. If any amount disputed by such Party is determined to be due the other
Party, or if the Parties resolve the payment dispute, the amount due shall be paid within hve (5)
Business Days after such determination or resolution, along with interest at the Contract Interest
Rate from the date due until the date paid.
I 1.5 Audit Rights. Each Party, through its authorized representatives, shall have the right, at
its sole expense upon reasonable written notice and during normal business hours, to examine
and copy the records ofthe other Party to the extent reasonably necessary to verify the accuracy
of any statement, charge or computation made hereunder or to verify the other Party's
performance of its obligations hereunder. Upon request, each Party shall provide to the other
Party statements evidencing the quantities of Net Output delivered at the Point of Delivery. If
any statement is found to be inaccurate, a corrected statement shall be issued and any amount
due thereunder will be promptly paid and shall bear interest at the Contract Interest Rate from the
date of the overpayment or underpayment to the date of receipt of the reconciling payment.
Notwithstanding the foregoing, no adjustment shall be made with respect to any statement or
payment hereunder unless a Party questions the accuracy of such payment or statement within
two (2) years after the date of such statement or payment.
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SECTION 12
DEFAULTS AND REMEDIES
l2.l Defaults. The following events are defaults (each a "default" before the passing of
applicable notice and cure periods, and an "Event of Default" thereafter) hereunder:
l2.l.l Defaults by Either Party:
12.1.1.1 A Party fails to make a payment when due hereunder if the failure
is not cured within ten (10) Business Days after the non-defaulting Party gives the
defaulting Party a notice of the default.
12.1.1.2 A Party (i) makes a general assignment for the benefit of its
creditors; (ii) files a petition or otherwise commences, authorizes or acquiesces in
the commencement of a proceeding or cause of action under any bankruptcy or
similar law for the protection of creditors, or has such a petition filed against it
and such petition is not withdrawn or dismissed within sixty (60) days after such
filing; (iii) becomes insolvent; or (iv) is unable to pay its debts when due.
12.1.1.3 A Party breaches a representation or warranty made by it herein if
the breach is not cured within thirty (30) days after the non-defaulting Party gives
the defaulting Party a written notice of the default; provided that if such default is
not reasonably capable of being cured within the thirty (30) day cure period but is
reasonably capable of being cured within a ninety (90) day cure period, the
defaulting Party will have such additional time (not exceeding an additional sixty
(60) days) as is reasonably necessary to cure, if, prior to the end of the thirty (30)
day cure period the defaulting Party provides the non-defaulting Party a
remediation plan, the non-defaulting Party approves such remediation plan, and
the defaulting Party promptly commences and diligently pursues the remediation
plan.
12.1.1.4 A Party otherwise fails to perform any material obligation
hereunder for which an exclusive remedy is not provided hereunder and which is
not addressed in any other default described in Section 12.1, if the failure is not
cured within thirty (30) days after the non-defaulting Party gives the defaulting
Party written notice of the default; provided that if such default is not reasonably
capable of being cured within the thirty (30) day cure period but is reasonably
capable of being cured within a ninety (90) day cure period, the defaulting Party
will have such additional time (not exceeding an additional sixty (60) days) as is
reasonably necessary to cure, if, prior to the end of the thirty (30) day cure period
the defaulting Party provides the non-defaulting Party a remediation plan, the
non-defaulting Party approves such remediation plan, and the defaulting Party
promptly commences and diligently pursues the remediation plan.
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12.1.2 De&uts tySeller.
12.1.2.1 Seller fails to post, increase, or maintain the Project Development
Security or Default Security as required under, and by the applicable dates set
forth in, Section 9.1 and Section 9.2 and such failure is not cured within ten (10)
Business Days after Idaho Power gives Seller notice of default.
12.1.2.2 Seller fails to (i) cause the Facility to achieve Commercial
Operation on or before the Guaranteed Commercial Operation Date, or (ii)
complete all items included on the Final Completion Schedule within ninety (90)
days after the Commercial Operation Date.
12.1.2.3 Seller sells Output, Green Tags or Capacity Rights from the
Facility to a party other than Idaho Power in breach of Section 5.2, or Seller
makes a public statement or otherwise takes an action that any Govemmental
Authority or the Center for Resource Solutions determines is a retirement, double
counting, double sale, double use or double claim of Green Tags, if Seller does
not permanently cease such sale and compensate Idaho Power for the damages
arising from the breach within ten (10) days after Idaho Power gives Seller a
notice of default.
12.1.2.4 Idaho Power receives notice of foreclosure of the Facility or any
part thereof by a Lender, mechanic or materialman, or any other holder, of an
unpaid lien or other charge or encumbrance, if the same has not been stayed, paid,
or bonded around within ten (10) days of the date of the notice received by Idaho
Power.
12.1.2.5 After the Commercial Operation Date, Seller fails to maintain any
Required Facility Documents or Permits necessary to own, operate, or maintain
the Facility and such failure continues for thirty (30) days after Seller's receipt of
written notice thereof from Idaho Power; provided, however, that, upon written
notice from Seller, the thirty (30) day period shall be extended by an additional
sixty (60) days if (i) the failure cannot reasonably be cured within the thirty (30)
day period despite diligent efforts, (ii) the default is capable of being cured within
the additional sixty (60) day period, and (iii) Seller commences the cure within
the original thirty (30) day period and is at all times thereafter diligently and
continuously proceeding to cure the failure.
12.1.2.6 Seller's Abandonment of construction or operation of the Facility
and such failure continues for thirty (30) days after Seller's receipt of written
notice thereof from Idaho Power.
12.1.2.7 Seller fails to maintain insurance as required by the Agreement and
such failure continues for fifteen (15) days after Seller's receipt of written notice
thereof from Idaho Power.
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12.1.2.8
years.
Seller fails to meet the Output Guarantee for two (2) consecutive
12.1.2.9 Every three (3) years after the Commercial Operation Date, Seller
will supply Idaho Power with a Certification of Ongoing Operations and
Maintenance (O&M) from a Registered Professional Engineer licensed in the
State of Idaho, which Certification of Ongoing O&M shall be in the form
specified in Exhibit I 1. 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
12.1.2.10 During the full Term of this Agreement, Seller shall maintain
compliance with all Required Facility Documents and determinations described in
Exhibit 9 of this Agreement. In addition, Seller will supply Idaho Power with
copies of any new or additional Required Facility Documents or determinations.
At least every fifth (5th) Contract Year, Seller will update the documentation
described in Exhibit 9. If at any time Seller fails to maintain compliance with the
Required Facility Documents and determinations described in Section 2.2.3 or to
provide the documentation required by this paragraph, such failure will be a
default of Seller and may only be cured by Seller submitting to Idaho Power
evidence of compliance from the permitting agency.
12.2.1 Remedy for Seller's Failure to Deliver. Upon the occurrence and during the
continuation of a default of Seller under Section 72.1.3, Seller shall pay Idaho Power
within five (5) Business Days after invoice receipt, an amount equal to the sum of (a)
Idaho Power's Cost to Cover multiplied by the Net Output delivered to a party other than
Idaho Power, (b) additional transmission charges, if any, reasonably incurred by Idaho
Power in moving replacement energy to the Point of Delivery or if not there, to such
points in Idaho Power's control area as are determined by Idaho Power, and (c) any
additional cost or expense incurred as a result of Seller's default under Section l2-1.3, as
determined by Idaho Power in a commercially reasonable manner. The invoice for such
amount shall include a written statement explaining in reasonable detail the calculation of
such amount.
12.2.2 Remedy for Idaho Power'slailure to Purchase. If Idaho Power fails to receive or
purchase all or part of the Net Output and Green Tags required to be purchased pursuant
hereto and such failure is not excused under the terms hereof or by Seller's failure to
perform, then Seller shall first satisfy its obligations under Section 12.7 and then Idaho
Power shall pay Seller, on the earlier of the date payment would otherwise be due in
respect of the month in which the failure occurred or within five (5) Business Days after
invoice receipt, an amount equal to Seller's Cost to Cover multiplied by the amount of
Net Output so not purchased, less amounts received by Seller pursuant to Section 12.7.
The invoice for such amount shall include a written statement explaining in reasonable
detail the calculation thereof.
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12.2 Remedies for Failure to Deliver/Receive.
12.2.3 Remedy for Seller's Failure to Sell/Deliver Capacity Rishts. Seller shall be liable
for Idaho Power's actual damages in the event Seller fails to sell or deliver all or any
portion of the Capacity Rights to Idaho Power.
I2.3 Termination and Remedies. From and during the continuance of an Event of Default, the
non-defaulting Party shall be entitled to all remedies available at law or in equity, and may
terminate this Agreement by written notice to the other Party designating the date of termination
and delivered to the defaulting Party no less than one (l) Business Day before such termination
date. The notice required by this Section 12.3 may be provided in the notice of default (and does
not have to be a separate notice) so long as it complies with all other terms of this Section 12.3.
As a precondition to Seller's exercise of this termination right, Seller must also provide copies of
such notice to the notice addresses of the then-current President and General Counsel of Idaho
Power. Such copies shall be sent by registered overnight delivery service or by certified or
registered mail, retum receipt requested. In addition, Seller's termination notice shall state
prominently therein in type font no smaller than l4-point all-capital letters that "THIS IS A
TERMINATION NOTICE UNDER A PPA. YOU MUST CURE A DEFAULT, OR THE PPA
WILL BE TERMINATED," and shall state therein any amount purported to be owed and wiring
instructions. Notwithstanding any other provision of this Agreement to the contrary, Seller will
not have any right to terminate this Agreement if the default that gave rise to the termination
right is cured within fifteen (15) Business Days of Idaho Power's receipt of such notice. Further,
from and after the date upon which Seller fails to remedy a default within the time periods
provided in Section 12.1, ard until Idaho Power has recovered all damages incurred on account
of such default by Seller, without exercising its termination right, Idaho Power may offset its
damages against any payment due Seller. Except in circumstances in which a remedy provided
for in this Agreement is described as a Party's sole or exclusive remedy, upon termination, the
non-defaulting Party may pursue any and all legal or equitable remedies provided by law, equity
or this Agreement. The rights contemplated by this Section 12 are cumulative such that the
exercise of one or more rights shall not constitute a waiver of any other rights. In the event of a
termination hereof:
12.3.1 Each Party shall pay to the other all amounts due the other hereunder for all
periods prior to termination, subject to offset by the non-defaulting Party against damages
incurred by such Party.
12.3.2 The amounts due pursuant to Section 12.3.1shall be calculated and paid within
thiny (30) days after the billing date for such charges and shall bear interest thereon at the
Contract Interest Rate from the date of termination until the date paid. The foregoing
does not extend the due date of, or provide an interest holiday for any payments
otherwise due hereunder.
12.3.3 Before and after the effective date of termination, the non-defaulting Party may
pursue, to the extent permitted by this Agreement, any and all legal or equitable remedies
provided by law, equity or this Agreement.
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12.3.4 Without limiting the generality of the foregoing, the provisions of Sections 6.4,
6.5,7.10.4,7.10.5,7.10.7,11.3, 11.4,11.5, and Section 12, Section 13, Section 14.1,
Section 17, Section 23, Section 24, Section 25, and Section 26 shall survive the
termination hereof.
12.4 Termination Damages. If this Agreement is terminated as a result of an Event of Default
by one of the Parties, termination damages shall be determined. The amount of termination
damages shall be calculated by the non-defaulting Party within a reasonable period after
termination of the Agreement. Amounts owed pursuant to this section shall be due within five
(5) Business Days after the non-defaulting Party gives the defaulting Party written notice of the
amount due. The non-defaulting Party shall under no circumstances be required to account for or
otherwise credit or pay the defaulting Party for economic benefits accruing to the non-defaulting
Party as a result of the defaulting Party's default.
12.5 Senior Lender Foreclosure. An exercise of remedies under the financing documents
between Seller and Senior Lenders, in and of itself, is not an Event of Default under Section
12.1_4.
12.6 Duty/Rieht to Mitieate. Each Party agrees that it has a duty to mitigate damages and
covenants that it will use commercially reasonable efforts to minimize any damages it may incur
as a result of the other Party's performance or non-performance hereof. "Commercially
reasonable efforts" (a) by Seller shall include requiring Seller to use commercially reasonable
efforts to maximize the price for Net Output and associated Green Tags received by Seller from
third parties, including entering into an enabling agreement with, or being affiliated with, one or
more power marketers of nationally recognized standing to market such Net Output and
associated Green Tags not purchased or accepted by ldaho Power (only during a period Idaho
Power is in default), in each case only to the extent any of the foregoing actions are permitted
under Requirements of Law and the Interconnection Agreement; and (b) by Idaho Power shall
include requiring Idaho Power to use commercially reasonable efforts to minimize the price paid
to third parties for energy and Green Tags purchased to replace Net Output and Green Tags not
delivered by Seller as required hereunder.
12.7 Security. If this Agreement is terminated because of Seller's default, Idaho Power may,
in addition to pursuing any and all other remedies available at law or in equity, proceed against
any Seller security held by Idaho Power in whatever form to reduce any amounts that Seller
owes Idaho Power arising from such default.
12.8 Cumulative Remedies. Except in circumstances in which a remedy provided for in this
Agreement is described as a sole or exclusive remedy, the rights and remedies provided to Idaho
Power hereunder are cumulative and not exclusive of any rights or remedies of Idaho Power.
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SECTION 13
INDEMNIFICATION AND LIABILITY
l3.l Indemnities.
13.1.1 Indemnity by Seller. To the extent permitted by Requirements of Law and subject
to Section 13.1.5, Seller shall release, indemnify and hold harmless Idaho Power, its
divisions, Affiliates, and each of its and their respective directors, officers, employees,
agents, and representatives (collectively, the "ldaho Power Indemnitees") against and
from any and all losses, fines, penalties, claims, demands, damages, liabilities, actions or
suits of any nature whatsoever (including legal costs and attorneys' fees, both at trial and
on appeal, whether or not suit is brought) (collectively, "Liabilities") actually or allegedly
resulting from, or arising out of, or in any way connected with, the performance by Seller
of its obligations hereunder, or relating to the Facility or Premises, for or on account of
injury, bodily or otherwise, to, or death of, or damage to or destruction of property of,
any person or entity, excepting only to the extent such Liabilities as may be caused by the
gross negligence or willful misconduct of any person or entity within the Idaho Power
Indemnitees. Seller shall be solely responsible for (and shall defend and hold Idaho
Power harmless against) any damage that may occur as a direct result of Seller's breach
of the Generation Interconnection Agreement.
13.1.2 Indemnity by Idaho Power. To the extent permitted by Requirements of Law and
subject to Section 13.1.5, Idaho Power shall release, indemnify and hold harmless Seller,
its Affiliates, and each of its and their respective directors, officers, employees, agents,
and representatives (collectively, the "Seller Indemnitees") against and from any and all
Liabilities actually or allegedly resulting from, or arising out of, or in any way connected
with, the performance by Idaho Power of its obligations hereunder for or on account of
(a) injury, bodily or otherwise, to, or death of, or (b) for damage to, or destruction of
property of, any person or entity within the Seller Indemnitees, excepting only to the
extent such Liabilities as may be caused by the negligence or willful misconduct of any
person or entity within the Seller Indemnitees.
13.1.3 Additional Cross Indemnity. Without limiting Sections 13.1.1 and 13.1.2, Seller
shall release, indemnify and hold harmless the Idaho Power Indemnitees from and against
all Liabilities related to Net Output prior to its delivery by Seller at the Point of Delivery,
and Idaho Power shall release, indemnify and hold harmless the Seller Indemnitees from
and against all Liabilities related to Net Output once delivered to Idaho Power at the
Point of Delivery as provided herein, except in each case to the extent such Liabilities are
attributable to the gross negligence or willful misconduct or a breach of this Agreement
by any member of the Idaho Power Indemnitees or the Seller Indemnitees, respectively,
seeking indemnification hereunder.
13.1.4 No Dedication. Nothing herein shall be construed to create any duty to, any
standard of care with reference to, or any liability to any person not a Party. No
undertaking by one Party to the other under any provision hereof shall constitute the
dedication of Idaho Power's facilities or any portion thereof to Seller or to the public, nor
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affect the status of Idaho Power as an independent public utility corporation or Seller as
an independent individual or entity.
13.1.5 Consequential Damases. NEITHER PARTY SHALL BE LIABLE TO THE
OTHER PARTY FOR SPECIAL, PUNITIVE,INDIRECT, EXEMPLARY OR
CONSEQUENTIAL DAMAGES, WHETHER SUCH DAMAGES ARE
ALLOWED OR PROVIDED BY CONTRACT, TORT (INCLUDING
NEGLIGENCE), STRICT LIABILITY, STATUTE OR OTHERWISE. THE
PARTIES AGREE THAT ANY LIQUIDATED DAMAGES, SECURITY,
INDEMNIFIED CLAIMS OR DAMAGES, DELAY DAMAGES,IDAHO POWER
AND SELLER COST TO COVER DAMAGES, SECTION 12.2.3 CAPACITY
RIGHTS LOSS DAMAGES, OR OTHER SPECIFIED MEASURE OF DAMAGES
EXPRESSLY PROVIDED FOR HEREIN, ARE NOT INTENDED BY THEM TO
REPRESENT AND WILL NOT BE DEEMED SPECIAL, PUNITIVE,INDIRECT,
EXEMPLARY OR CONSEQUENTIAL DAMAGES AND SHALL NOT BE
LIMITED IN AMOUNT BY THIS SECTION 13.I.5.
SECTION 14
INSURANCE
l4.l Required Policies and Coverages. Without limiting any liabilities or any other
obligations ofSeller hereunder, Seller shall secure and continuously carry the insurance coverage
specified on Exhibit l3 during the Term or longer period if specified in Exhibit 13.
14.2 Certificates of Insurance. Seller shall provide Idaho Power with certificates of insurance
within ten (10) days after the date by which such policies are required to be obtained (as set forth
in Exhibit l3). Seller shall provide a certificate of insurance (in ACORD or similar industry
form) to Idaho Power within ten (10) days of the effective date of any insurance policy required
under this Agreement.
SECTION 15
FORCE MAJEURE
15.1 Definition of Force Majeure. "Force Majeure" or "an event of Force Majeure" means an
event that (a) is not reasonably anticipated as of the Effective Date hereof, (b) is not within the
reasonable control of the Party affected by the event, (c) is not the result of such Party's
negligence or failure to act, and (d) could not be overcome by the affected Party's use of due
diligence in the circumstances. Force Majeure includes, but is not restricted to, events of the
following types (but only to the extent that such an event, in consideration of the circumstances,
satisfies the tests set forth in the preceding sentence): acts of God; civil disturbance; sabotage;
strikes; lock-outs; work stoppages; and action or restraint by court order or public or
Governmental Authority (as long as the affected Pany has not applied for or assisted in the
application for, and has opposed to the extent reasonable, such court or government action).
Notwithstanding the foregoing, none of the following constitute Force Majeure: (i) Seller's
ability to sell, or ldaho Power's ability to purchase energy, capacity or Green Tags at a more
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advantageous price than is provided hereunder; (ii) the cost or availability of fuel or motive force
to operate the Facility; (iii) economic hardship, including lack of money; (iv) any breakdown or
malfunction of the Facility's equipment (including any serial equipment defect) that is not
caused by an independent event of Force Majeure, (v) the imposition upon a Party of costs or
taxes allocated to such Party under Section 6.4, (vi) delay or failure of Seller to obtain or perform
any Required Facility Document unless due to a Force Majeure event, (vii) any delay, alleged
breach of contract, or failure by the Transmission Provider, Network Service Provider or
Interconnection Provider unless due to a Force Majeure event, (viii) maintenance upgrade or
repair of any facilities or right of way corridors constituting part of or involving the
Interconnection Facilities, whether performed by or for Seller, or other third parties (except for
repairs made necessary as a result of an event of Force Majeure); (ix) Seller's failure to obtain, or
perform under, the Generation Interconnection Agreement, or its other contracts and obligations
to transmission owner, Transmission Provider or Interconnection Provider, unless due to a Force
Majeure event; or (x) any event attributable to the use of Interconnection Facilities for deliveries
of Net Output to any party other than Idaho Power. Notwithstanding anything to the contrary
herein, in no event will the increased cost of electricity, steel, labor, or transportation constitute
an event of Force Majeure.
15.2 Suspension of Performance. Neither Party shall be liable for any delay or failure in its
performance under this Agreement, nor shall any delay, failure, or other occurrence or event
become a default, to the extent such delay, failure, occuffence or event is substantially caused by
conditions or events of Force Majeure during the continuation of the event of Force Majeure, for
the same number of days that the event of Force Majeure has prevailed, provided that:
15.2.1 the Party affected by the Force Majeure, shall, within five (5) days after the
occuffence of the event of Force Majeure, give the other Party written notice describing
the particulars of the event; and
15.2.2 the suspension of performance shall be of no greater scope and of no longer
duration than is required to remedy the effect of the Force Majeure; and
15.2.3 the affected Party shall use diligent efforts to remedy its inability to perform.
15.3 Force Majeure Does Not Affect Other Obligations. No obligations of either Party that
arose before the Force Majeure causing the suspension of perfornance or that arise after the
cessation of the Force Majeure shall be excused by the Force Majeure. No obligation of Seller
arising before the Commercial Operation Date may be excused by Force Majeure.
15.4 Strikes. Notwithstanding any other provision hereof, neither Party shall be required to
settle any strike, walkout, lockout or other labor dispute on terms which, in the sole judgment of
the Party involved in the dispute, are contrary to the Party's best interests.
15.5 Right to Terminate. If a Force Majeure event prevents a Party from substantially
performing its obligations hereunder for a period exceeding two hundred ten (210) consecutive
days (despite the affected Party's effort to take all reasonable steps to remedy the effects of the
Force Majeure with all reasonable dispatch), then the Party not affected by the Force Majeure
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event, with respect to its obligations hereunder, may terminate this Agreement by giving ten (10)
days prior written notice to the other Party. Upon such termination, neither Party will have any
liability to the other with respect to the period following the effective date of such termination;
provided, however, that this Agreement will remain in effect to the extent necessary to facilitate
the settlement of all liabilities and obligations arising hereunder before the effective date of such
termination.
SECTION 16
SEVERAL OBLIGATIONS
Nothing contained herein shall be construed to create an association, trust, partnership or joint
venture or to impose a trust, partnership or fiduciary duty, obligation or liability on or between
the Parties.
SECTION 17
CHOICE OF LAW
This Agreement shall be interpreted and enforced in accordance with the laws of the State of
Idaho, applying any choice of law rules that may direct the application of the laws of another
jurisdiction.
SECTION 18
PARTIAL INVALIDITY
The Parties do not intend to violate any laws governing the subject matter hereof. If any of the
terms hereof are finally held or determined to be invalid, illegal or void as being contrary to any
Requirements of Law or public policy, all other terms hereof shall remain in effect. The Parties
shall use best efforts to amend this Agreement to reform or replace any terms determined to be
invalid, illegal or void, such that the amended terms (a) comply with and are enforceable under
Requirements of Law, (b) give effect to the intent of the Parties under this Agreement, and (c)
preserve the balance of the economics and equities contemplated by this Agreement in all
material respects.
SECTION 19
NON.WAIVER
No waiver of any provision hereof shall be effective unless the waiver is set forth in a writing
that (a) expressly identifies the provision being waived, and (b) is executed by the Party waiving
the provision. A Party's waiver of one or more failures by the other Party in the performance of
any of the provisions hereof shall not be construed as a waiver of any other failure or failures,
whether of a like kind or different nature.
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SECTION 20
GOVERNMENTAL JURISDICTION
AND AUTHORIZATIONS
This Agreement is subject to the jurisdiction of those Governmental Authorities having control
over either Party, the Facility, or this Agreement. During the Term, Seller shall maintain all
Permits required, as applicable, for the construction, operation, or ownership of the Facility.
SECTION 21
REGULATORY AND BOARD APPROVAL
2l.l Regulatory Approval. Once the Agreement is executed by both Parties, Idaho Power
shall file this Agreement for its acceptance or rejection by the IPUC. This Agreement shall only
become finally effective upon the IPUC'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, and compliance with Idaho
Power's regulatory requirements with the IPUC and OPUC.
The Parties recognize and anticipate that regulatory proceedings at both the IPUC and OPUC
will be required. This Agreement shall not become finally effective should it be disapproved by
either the IPUC and/or the OPUC. Idaho Power will file a case seeking a CPCN with the IPUC
in relation to this Agreement. Additional and concurrent proceedings include, but may not be
limited to: the Facility's successful selection in a possible Request for Proposals ("RFP")
process that complies with the Oregon Competitive Bidding Rules; cases before the IPUC and
OPUC regarding the waiver of process, timing, etc. related to compliance or lack thereof with the
Oregon Competitive Bidding Rules; and inclusion of the Facility in Idaho Power's 2019 IRP
analysis and/or inclusion of the Facility in any mid-cycle updates of Idaho Power 2017 IRP.
Time is of the essence given the step-down of investment tax credits at the end of 2019 and
Idaho Power will seek a final order regarding approval or rejection of the Agreement by seeking
a final order from the IPUC regarding the CPCN prior to the end of 2019, and a corresponding
Notice of Exemption from the Competitive Bidding Requirements with the OPUC pursuant to
oAR 860-089-0100 (3), (4).
21.2 Board Approval. The performance of Idaho Power's obligations under this Agreement is
contingent upon the approval of the same by the Board of Directors of both Idaho Power
Company and IDACORP, Inc. Idaho Power will, by no later than May 23,2019, present this
Agreement to each Board of Directors recommending its approval.
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SECTION 22
SUCCESSORS AND ASSIGNS
22.1 Restriction on Assiqnments. Except as expressly provided in this Section 20, neither
Party may assign this Agreement or any of its rights or obligations hereunder without the prior
written consent of the other Party, which consent shall not be unreasonably withheld.
22.2 Permitted Assignments. Notwithstanding Section 22.1, either Party may, without the
need for consent from the other Party (but with written notice to the other Party, including the
names of the assignees): (a) transfer, sell, pledge, encumber or assign this Agreement or the
accounts, revenues or proceeds therefrom in connection with project financing for the Facility; or
(b) transfer or assign this Agreement to an Affrliate meeting the requirements of this Agreement;
provided, however, that Seller shall not transfer, sell, encumber or assign this Agreement or any
interest herein to any Affiliate of Idaho Power without the prior written consent of Idaho Power.
Except with respect to collateral assignments for financing purposes in every assignment
permitted under this Section 22.2,the assignee must agree in writing to be bound by the terms
and conditions hereof and must possess the same or similar experience, and possess the same or
better creditworthiness, as the assignor. Idaho Power may assign this Agreement in whole or in
part without the consent of Seller to any person or entity in the event that Idaho Power ceases to
be a load-serving entity, in which event Idaho Power shall be released from liability hereunder
upon approval of Idaho Power ceasing to be a load-serving entity by the IPUC and OPUC. The
Party seeking to assign or transfer this Agreement shall be solely responsible for paying all costs
of assignment.
SECTION 23
ENTIRE AGREEMENT
This Agreement supersedes all prior agreements, proposals, representations, negotiations,
discussions or letters, whether oral or in writing, regarding the subject matter hereof. No
modification hereof shall be effective unless it is in writing and executed by both Parties.
SECTION 24
NOTICES
24.1 Addresses and Delivery Methods. All notices, requests, statements or payments shall be
made to the addresses set out below. In addition, copies of a notice of termination of this
Agreement under Section 12.3 shall contain the information required by Section 12.3 and shall
be sent to the then-current President and General Counsel of Idaho Power. Notices required to
be in writing shall be delivered by letter, facsimile or other tangible documentary form. Notice
by overnight mail or courier shall be deemed to have been given on the date and time evidenced
by the delivery receipt. Notice by hand delivery shall be deemed to have been given when
received or hand delivered. Notice by facsimile is effective as of transmission to each and all of
the telefacsimile numbers provided below for a Party, but must be followed up by notice by
registered mail or overnight carrier to be effective. Notice by ovemight mail shall be deemed to
have been given the Business Day after it is sent, if sent for next day delivery to a domestic
address by a recognized overnight delivery service (e.g., Federal Express or UPS). Notice by
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certified or registered mail, retum receipt requested, shall be deemed to have been given upon
receipt.
To Seller:Robert Paul
515 N.27th St.
Boise, Idaho 83702
Email : [e-mail]
To Idaho Power:Idaho Power
l22l W Idaho St
Boise, ID 83702
Attn: Vice President, Power Supply
Email : energycontracts@idahopower. com
with a copy to:Idaho Power
l22l W Idaho St
Boise, ID 83702
Attn: Energy Contracts
Email : energycontracts@idahopower. com
and termination notices to Idaho Power: Idaho Power
l1?,:IJ'##
Attn: Vice President, Power Supply
Email : [e-mail]
and to Idaho Power
l22l W Idaho St
Boise, ID 83702
Attn: Energy Contracts
Emai I : [e-mail]
24.2 Changes of Address. The Parties may change any of the persons to whom notices are
addressed, or their addresses, by providing written notice in accordance with this section.
-63-
SECTION 25
CONFIDENTIALITY
25.1 Confidential Business Information. The following constitutes "Confidential Business
Information," whether oral or written: (a) the Parties'proposals and negotiations concerning this
Agreement, made or conducted prior to the Effective Date, (b) the actual charges billed to Idaho
Power hereunder, and (c) any information delivered by Idaho Power to Seller prior to the
Effective Date relating to the market prices of energy or Green Tags and methodologies for their
determination or estimation. Seller and Idaho Power each agree to hold such Confidential
Business Information wholly confidential, except as otherwise expressly provided in this
Agreement. "Confidential Business Information" shall not include information that (x) is in or
enters the public domain through no fault of the Party receiving such information, or (y) was in
the possession of a Party prior to the Effective Date, other than through delivery thereof as
specified in subsections (a) and (c) above. A Party providing any written Confidential Business
Information under this Agreement shall clearly mark all pages of all documents and materials to
be treated as Confidential Business information with the term "Confidential" on the front of each
page, document or material. If the Confidential Business Information is transmitted by electronic
means the title or subject line shall indicate the information is Confidential Business Information.
All Confidential Business Information shall be maintained as confidential, pursuant to the terms
of this Section 25.1, for a period of two (2) years from the date it is received by the receiving
Party unless otherwise agreed to in writing by the Parties.
25.2 Duty to Mainlarq taqfidenlialily. Each Party agrees not to disclose Confidential
Business Information to any other person (other than its Affiliates, accountants, auditors,
counsel, consultants, lenders, prospective lenders, employees, officers and directors), without the
prior written consent of the other Party, provided that: (a) either Party may disclose Confidential
Business Information, if and to the extent such disclosure is required (i) bV Requirements of
Law, (ii) in order for Idaho Power to receive regulatory approval and recovery of expenses
related to this Agreement, (iii) pursuant to an order of a court or regulatory agency, or (iv) in
order to enforce this Agreement or to seek approval hereof, and (b) notwithstanding any other
provision hereof, Idaho Power may in its sole discretion disclose or otherwise use for any
purpose in its sole discretion the Confidential Business Information described in Sections 25.1(b)
or 25.1(c). In the event a Party is required by Requirements of Law to disclose Confidential
Business Information, such Party shall to the extent possible promptly notify the other Party of
the obligation to disclose such information.
25.3 Idaho Power Regulatory Compliance. The Parties acknowledge that Idaho Power is
required by Requirements of Law to report certain information that is or could otherwise embody
Confidential Business Information from time to time. Such reports include models, filings,
reports of Idaho Power's net power costs, general rate case filings, power cost adjustment
mechanisms, FERC-required reporting such as those made on FERC Form I or Form 714,
market power and market monitoring reports, annual state reports that include resources and
loads, integrated resource planning reports, reports to entities such as NERC, WECC, Pacific
Northwest Utility Coordinating Committee, WREGIS, or similar or successor organizations,
forms, filings, or reports, the specific names of which may vary by jurisdiction, along with
supporting documentation. Additionally, in regulatory proceedings in all state and federal
-64-
jurisdictions in which it does business, Idaho Power will from time to time be required to
produce Confidential Business Information. Idaho Power may use its business judgment in its
compliance with all of the foregoing and the appropriate level of confidentiality it seeks for such
disclosures. Idaho Power may submit Confidential Business Information in regulatory
proceedings without notice to Seller.
25.4 Irreparable Injury: Remedies. Each Party agrees that violation of the terms of this
Section 25 constitutes irreparable harm to the other, and that the harmed Party may seek any and
all remedies available to it at law or in equity, including injunctive relief.
25.5 News Releases and Publicity. Except as otherwise provided in Section 7.l4,before either
Party issues any news release or publicly distributed promotional material regarding the Facility
that mentions the Facility, such Party shall first provide a copy thereof to the other Party for its
review and approval. Any use of either Party's name in such news release or promotional
material must adhere to such Party's publicity guidelines then in effect; any use of Idaho Power's
name requires Idaho Power's prior written consent.
SECTION 26
DISAGREEMENTS
26.1 Negotiations. Prior to proceeding with formal dispute resolution procedures as provided
below in this Section 26, the Parties must first attempt in good faith to resolve all disputes arising
out of, related to or in connection with this Agreement promptly by negotiation, as follows. Any
Party may give the other Party written notice of any dispute not resolved in the normal course of
business. Executives of both Parties at levels one level above those employees who have
previously been involved in the dispute must meet at a mutually acceptable time and place within
ten (10) days after delivery ofsuch notice, and thereafter as often as they reasonably deem
necessary, to exchange relevant information and to attempt to resolve the dispute. If the matter
has not been resolved within thirty (30) days after the referral of the dispute to such senior
executives, or if no meeting of such senior executives has taken place within fifteen (15) days
after such referral, either Party may initiate any legal remedies available to the Party. All
negotiations pursuant to this clause are confidential.
26.2 Choice of Forum. Each Party irrevocably consents and agrees that any legal action or
proceeding arising out of this Agreement or the actions of the Parties leading up to this
Agreement shall be brought exclusively in the United States District Court for the District of
Idaho in Boise, Idaho, or if such court does not have jurisdiction, in the 4th Judicial District (Ada
County) Court of the State of Idaho. By execution and delivery hereof, each Party (a) accepts
the exclusive jurisdiction of such court and waives any objection that it may now or hereafter
have to the exercise ofpersonaljurisdiction by such court over each Party for the purpose ofany
proceeding related to this Agreement, (b) irrevocably agrees to be bound by any final judgment
(after any and all appeals) of any such court arising out of such documents or actions, (c)
irrevocably waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceedings arising out of such
documents brought in such court (including any claim that any such suit, action or proceeding
-65-
has been brought in an inconvenient forum) in connection herewith, (d) agrees that service of
process in any such action may be effected by mailing a copy thereof by registered or certified
mail, postage prepaid, to such Party at its address as set forth herein, and (e) agrees that nothing
herein shall affect the right to effect service of process in any other manner permitted by law.
26.3 Settlement Discussions. No statements of position or offers of settlement made in the
course of the dispute process described in this Section 26 will be offered into evidence for any
purpose in any litigation between the Parties, nor will any such statements or offers of settlement
be used in any manner against either Party in any such litigation. Further, no such statements or
offers of settlement shall constitute an admission or waiver of rights by either Party in
connection with any such litigation. At the request of either Party, any such statements and
offers of settlement, and all copies thereof, shall be promptly returned to the Party providing the
same.
26.4 Waiver of Jury Trial. EACH PARTY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT
EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WzuTTEN) OR ACTTONS OF ANY PARTY HERETO. THrS
PROVISION IS A MATERIAL INDUCEMENT TO EACH OF THE PARTIES FOR
ENTERING HEREINTO. EACH PARTY HEREBY WAIVES ANY RIGHT TO
CONSOLIDATE ANY ACTION, PROCEEDING OR COLTNTERCLAIM ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER AGREEMENT
EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJLTNCTION WITH THIS
AGREEMENT, OR ANY MATTER ARISING HEREUNDER OR THEREI.INDER, WITH
ANY PROCEEDING IN WHICH A JURY TRIAL HAS NOT OR CANNOT BE WAIVED.
THIS SECTION WILL SURVIVE THE EXPIRATION OR TERMINATION OF THIS
AGREEMENT.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their respective names as of the date last written below.
J LDINGS, LLC TDAHO POWER COMPANY
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
ctu
o
-66-
By:
The undersigned affiliate of Jackpot Holdings, LLC hereby consents to, and agrees to be bound
by, the obligations of Seller set forth in Section 8.3 of this Agreement as to the Additional
Output, together with such other terms and conditions that give effect to Section 8.3 of this
Agreement and any other reasonable terms and conditions as the Parties deem necessary to give
effect to Section 8.3 of this Agreement as stated therein, as if the undersigned were aparty to this
Agreement with the obligations of Seller under this Agreement with respect to the Additional
Output, and fuither, the undersigned agrees that it will execute such instruments and documents
and take such actions as shall be reasonably necessary to provide for the sale of the Additional
Output to Buyer and to give effect to the transactions contemplated by this Agreement and to
otherwise effect the transaction contemplated as to the Additional Output, all under the terms and
subject to the conditions contained in this Agreement.
LAR, LLC
N
Title:
Date:J.0
67
Project Name
Address
City
EXHIBIT 1
MONTHLY POWER PRODUCTION AND SWITCHING RBPORT
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 Reason
State
Metered
Maximum Generation
kw
Net Generation
Breaker Closing Record
Date Time Meter
Facility
Output
Station
Usage
*
I
2
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 Date
*i
A-2 AUTOMATED METER READING COLLECTION PROCESS
Monthly, Idaho Power will use the provided Metering and Telemetry equipment and processes to collect
the meter reading information from the Idaho Power provided Metering Equipment that measures the Net
Energy and energy delivered to supply Station Use for the Facility recorded at 12:00 AM (Midnight) of the
last day of the month.
The meter information collected will include but not be limited to energy production, Station Use, the
maximum generated power (kW) and any other required energy measurements to adequately administer
this Agreement.A-3 SELLER CONTACT INFORMATION
Seller's Contact Information
Robert A. Paul
(760) 861-l 104
robertapaul@gmail. com
24-Hour Proiect Operational Contact
Robert A. Paul
(760) 861-l 104
robertapaul@gmail. com
Proj ect On-site Information
Robert A. Paul
(760) 861-l 104
robertapaul@gmail. com
EXHIBIT 2
DESCRIPTION OF FACILITY
Project Name: Jackpot Holdings, LLC
Project Number: 10000004
B-I DESCRIPTION OF FACILITY
(Must include the Nameplate Capacity rating and VAR capability (both leading and
lagging) of all Generation Units to be included in the Facility.)
The Jackpot Holdings, LLC Facility will consist of 120 MW (AC) photovoltaic projects in Twin
Falls County, Idaho. The inverter system will comprise of SMA Sunny Central 1850 - US
inverters, with each inverter having an apparent power rating of 1,850 KVA, or similar
technology. A plant controller will be used to control the inverter system and to implement
smart inverter functionality for operating the project within a voltage range and power factor
specified by Idaho Power at the point of interconnection.
Var Capability (Both leading and lagging) Leading rs 0.95 and Lagging,s 0.95
B-2 LOCATION OF FACILITY
The Facility is located in Idaho Power's Southern Region in portions of Township 143, Range
l6E, Section 17, 18, 19, 20, and29 and is approximately f,rfteen miles north of the Nevada-ldaho
border.
EXHIBIT 3
POINT OF DELIVERYflNTERCONNECTION FACILITIES
Instructions to Seller:
l. Include description of point of metering, and Point of Interconnection
2. Include description of Point of Delivery
3. Provide interconnection single line drawing of Facility including any transmission
facilities on Seller's side of the Point of Interconnection.
5. Describe Seller's arrangements for station service to the Facility and show on one-line
diagram how station service will be provided and metered.
6. Specify the maximum hourly rate (MW) at which Seller is permitted to deliver energy to
the Point of Delivery and in compliance with Seller's transmission rights between the Point of
Interconnection and the Point of Delivery ("Maximum Transmission Rate"):
MW.
Seller to provide to Buyer with a copy of the final Generator Interconnection Agreement
EXHIBIT 4
ESTIMATED MONTHLY NET OUTPUT
EXPECTED ENERGY - FIRST FULL CONTRACT YEAR
PERIOD ON-PEAK (MWh)OFF-PEAK (MWh)TOTAL (MWh)
January
February
March
April
May
June
July
August
September
October
November
December
First Year Total
9,774.7
72,104.1
18,987.2
21,030.9
25,427.l
29,052.5
27,605.0
26,052.8
21,373.4
17,542.8
10,006.0
8,013.1
226,909.5
2,039.7
2,015.1
1,890.6
3,81 I .7
5,099.3
4,235.9
6,936.1
5,608.4
4,847.9
2,959.0
2,017.3
1,788.0
43,249.0
11,754.3
14,119.2
20,877.8
24,842.6
30,526.4
33,288.4
34,541.2
31,661.1
26,221.3
20,501.8
12,023.3
9,801.0
270,158.4
EXPECTED ENERGY. ANNUAL REDUCTION
PERIOD EXPECTED ENERGY (MWh)
Year 0-1
Year l-2
Year2-3
Year 3-4
Year 4-5
Year 5-6
Year 6-7
Year 7-8
Year 8-9
Year 9-10
Year 10-lf
Year ll-12
Year 12-13
Year 13-14
Year 14-15
Year 15-16
Year 16-17
Year 17-18
Year 18-19
Year 19-20
270,158.4
269,348.0
268,539.9
267,734.3
266,931.1
266,130.3
265,331.9
264,535.9
263,742.3
262,951.1
262,162.2
261,375.7
260,591.6
259,809.8
259,030.4
258,253.3
257,478.5
256,706.1
255,936.0
255,168.2
Under separate cover, Seller will also provide Idaho Power one (1) electronic and hard copy of
the solar plant perforrnance estimation report using a Solar Performance Modeling Program no
later than ninety (90) days prior to the start of construction. This report will include, at a
minimum, estimated hourly MW generation output in MWh/h for the site and Facility, and shall
set forth additional losses related to availability, AC-side collection, transformers, substation and
no-load/overnight losses. On or prior to the Commercial Operation Date, Seller shall provide an
updated Exhibit A and solar plant perforrnance estimation report based on completed
construction.
Upon the date of Final Completion, if different than the Commercial Operation Date, Seller shall
provide an updated Exhibit A and solar plant perfornance estimation report based on the final
completed construction.
EXHIBIT 5
CONTRACT PRICE
Contract Price for 120 MW
Contract Year mills/kWh
I
2
J
4
5
6
7
8
9
l0ll
12
l3
t4
l5
t6
t7
l8
t9
20
2t.75
22.08
22.4r
22.75
23.09
23.44
23.79
24.ts
24.5t
24.88
25.25
25.63
26.01
26.40
26.80
27.20
27.61
28.02
28.44
28.87
Contract Price for 220llW
Contract Year mills/kWh
I
2
J
4
5
6
7
8
9
l0ll
t2
l3
t4
l5
t6
t7
l8
l9
20
23.11
23.46
23.8r
24.17
24.s3
24.90
25.27
25.65
26.03
26.42
26.82
27.22
27.63
28.04
28.46
28.89
29.32
29.76
30.21
30.66
EXHIBIT 6
NERC EVENT TYPES
Event
Type
Description of Outages
U1
Unplanned (Forced) Outage-lmmediate - An outage that requires immediate
removal of a unit from service, another outage state or a Reserve Shutdown state.
This type of outage results from immediate mechanical/electricalftrydraulic
control systems trips and operator-initiated trips in response to unit alarms.
U2
Unplanned (Forced) Outage-Delayed - An outage that does not require
immediate removal of a unit from the in-service state but requires removal within
six (6) hours. This type of outage can only occur while the unit is in service.
U3
Unplanned (Forced) Outage-Postponed - An outage that can be postponed
beyond six hours but requires that a unit be removed from the in-service state
before the end of the next weekend. This type of outage can only occur while the
unit is in service.
SF
Startup Failure - An outage that results from the inability to synchronize a unit
within a specified startup time period following an outage or Reserve Shutdown.
A startup period begins with the command to start and ends when the unit is
synchronized. An SF begins when the problem preventing the unit from
synchronizing occurs. The SF ends when the unit is synchronized or another SF
occurs.
MO
Maintenance Outage - An outage that can be deferred beyond the end of the next
weekend, but requires that the unit be removed from service before the next
planned outage. (Characteristically, a MO can occur any time during the year, has
a flexible start date, may or may not have a predetermined duration and is usually
much shorter than a PO.)
ME
Maintenance Outase Extension - An extension of a maintenance outage (MO)
beyond its estimated completion date. This is typically used where the original
scope of work requires more time to complete than originally scheduled. Do not
use this where unexpected problems or delays render the unit out of service
beyond the estimated end date of the MO.
PO
Planned Outaee - An outage that is scheduled well in advance and is of a
predetermined duration, lasts for several weeks and occurs only once or twice a
year. (Boiler overhauls, turbine replacement or inspections are typical planned
outages.)
PE
Planned Outage Extension - An extension of a planned outage (PO) beyond its
estimated completion date. This is typically used where the original scope of
work requires more time to complete than originally scheduled. Do not use this
where unexpected problems or delays render the unit out of service beyond the
estimated end date of the PO.
EXHIBIT 7
START-UP TESTING
(Seller to provide to Buyer before the First Generation Date)
EXHIBIT 8
FORM OF GUARANTY - CREDIT SUPPORT OBLIGATION
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 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 short-term or long-term
investment grade credit rating by Standard & Poor's Corporation or Moody's Investor
Services, Inc. or any successors shall be deemed to have acceptable financial
creditworthiness.
l. Cash - Seller shall deposit cash in the amount of the required security 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. The Seller shall be responsible for all costs, and receive any interest eamed
associated with establishing and maintaining the escrow account(s).
3. Guarantee or Letter of Credit Security - Seller shall post and maintain in an amount
equal to the required security: (a) a guaranty from a party 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. The Seller shall be responsible for all costs associated with establishing and
maintaining the Guarantee(s) or Letter(s) of Credit.
EXHIBIT 9
REQUIRED FACILITY DOCUMENTS
1. Obtained Required Facilitv Documents:
Permits:
Conditional Use Permits from Twin Falls County for the construction and operation of the
Facility
Land Rights:
Solar Park Lease Agreement for the land, access, and interconnection of the Facility.
2. To Be Obtained (Prior to Commercial Operation) Required Facility Documents:
Licenses, Permits and Authorizgliqns :
Evidence of market-based rate authority under Section 205 of the Federal Power Act or evidence
of qualifying facility certification under the Public Utility Regulatory Policies Act
Access road easement
Electrical Permit
Building Permit
Interconnection approval
Utility easement
Crossing Agreement
Construction and Operations and Maintenance:
Contract for the Sale of Power Generation Equipment and Related Services between vendors and
engineering, procurement, and construction contractor and Seller
Generator Interconnection Agreement
Retail Electric Service Agreement
Proof of lnsurance
Construction Agreements :
Balance of Plant/Construction Services Agreement
Operations and Maintenance Agreements :
Warranty, Service and Maintenance Agreement
SUCH LIST MAY BE UPDATED PURSUANT TO SECTION 2.2.3
EXHIBIT IO
LEASES
(Seller to provide to Buyer before the Commercial Operation Date)
Memorandum of Solar Park Lease Agreement 1
Memorandum of Solar Park Lease Agreement 2
EXHIBIT 11
ENGINEER'S CERTIFICATIONS
E,NGTNEER'S CERTIFICATION
OPERATIONS & MAINTENANCE POLICY
The undersigned on behalf of himself/herself and
, hereinafter collectively referred to as "Engineer," hereby states and certifies to the Seller as
follows:
That Engineer is a Licensed Professional Engineer in good standing in the State of Idaho.
That Engineer has reviewed the Energy Sales Agreement, hereinafter referred to as the
"Agreement," between Idaho Power as Buyer, and as Seller, dated
3. That the cogeneration or small power production project which is the subject of the Agreement and
this Statement is identified as Idaho Power Company Facility No.and is hereinafter
OF
2
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 Idaho Power for a _ year period.
6. That Engineer has substantial experience in the design, construction and operation of electric power
plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project.
8. That Engineer has reviewed and/or supervised the review of the Policy for Operation and
Maintenance ("O&M") for this Project and it is his professional opinion that, said Project has been
designed and built to appropriate standards, and adherence to said O&M Policy will result in the Project's
producing at or near the design electrical output, efficiency and plant factor for the full Contact Term of
years.
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
ENGINEER'S CERTIFICATION
ONGOING OPERATIONS AND MAINTENANCE
The undersigned on behalf of himself/herself
and hereinafter collectively referred to as "Engineer," hereby states and
certifies to the Seller as follows:
That Engineer is a Licensed Professional Engineer in good standing in the State of ldaho.
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 Idaho Power fo. 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
2.
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.8. Stamp)
Date
ENGINEER'S CERTIFICATION
DESIGN & CONSTRUCTION ADEQUACY
The undersigned on behalf of himself/herself and
hereinafter collectively referred to as "Engineer", hereby states and certifies
to Idaho Power as follows:
I . 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 ldaho Power as Buyer, and as Seller, dated
J.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
Section Township Range _, Boise Meridian,
is located in
County, Idaho.
5 That Engineer recognizes that the Agreement provides for the Project to furnish electrical
energy to Idaho Power for a year period.
6. That Engineer has substantial experience in the design, construction and operation of
electric power plants of the same type as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Project and has
made the analysis of the plans and specifications independently.
8. That Engineer has reviewed the engineering design and construction of the Project,
including the civil work, electrical work, generating equipment, prime mover conveyance system, Seller
furnished Interconnection Facilities and other Project facilities and equipment.
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 interconnecting the Project with its system, is relying on Engineer's representations and
opinions contained in this Statement.
12. That Engineer certifies that the above statements are complete, true and accurate to the best
of his/her knowledge and therefore sets his/her hand and seal below.
By
(P.E. Stamp)
Date
EXHIBIT 13
REQUIRED INSURANCE
The Seller shall secure and continuously carry insurance as specihed 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.
If the insurance coverage required in this Appendix is cancelled, materially changed or
lapses for any reason, the Seller will immediately notify Idaho Power in writing. This
notice will advise Idaho Power of the specific reason for cancellation, material change
or lapse and the steps being taken to comply with these Insurance Requirements.
Failure to provide this notice and to comply with these Insurance Requirements within
5 days of the cancellation, material change or lapse will constitute a material breach
and Idaho Power may terminate this Agreement.
Prior to the First Energy date and subsequently within l0 days of the annual anniversary
of the Operation Date, the Seller shall provide a Certificate of Insurance in the name of
Idaho Power Company and list Idaho Power Company as an Additional Insured
Endorsement and Waiver of Subrogation Endorsement.
4. The Certificate of Insurance shall evidence the appropriate insurance coverage of
Comprehensive General Liability Insurance for both bodily injury and property damage
with limits equal to $1,000,000, each occurrence, combined single limit. The deductible
for such insurance shall be consistent with current Insurance Industry Utility practices
for similar property.
Seller shall be entitled to self-insure these coverages with approval of Idaho Power, which shall
not be unreasonable withheld, delayed or conditioned.
1.5 Periodic Review. Idaho Power may review this schedule of insurance as often as once
every two (2) years. Idaho Power may in its discretion require Seller to make reasonable
changes to the policies and coverages described in this Exhibit to the extent reasonably necessary
to cause such policies and coverages to conform to the insurance policies and coverages typically
obtained or required for power generation facilities comparable to the Facility at the time Idaho
Power's review takes place.
2
J
EXHIBIT 14
SELLER AUTHORIZATION TO RELEASE GENERATION DATA TO IDAHO
POWER
lDArEl
Idaho Power
1221 W Idaho St
Boise, ID 83702
Email : energycontracts@idahopower. com
To Whom it May Concern:
("Seller") hereby voluntarily authorizes Idaho Power's
Transmission business unit to share Seller's interconnection information with marketing function
employees of Idaho Power, including but not limited to those in Power Supply. Seller
acknowledges that Idaho Power did not provide it any preferences, either operational or rate-
related, in exchange for this voluntary consent.
I
EXHIBIT 15
ATTACHMENTS
(Seller to provide to Buyer before the First Generation Date)
1 Site Map
As-Builts
Manufacturer' s performance warranties
IOther]
2.
J.
5.
EXHIBIT 17
FRANKLIN SOLAR
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BEFORE THE
IDAHO PUBLIC UTILITIES GOMMISSION
CASE NO. IPC-E-19-14
IDAHO POWER COMPANY
ATTACHMENT 2
reffi*@
An IDACORP Company
LISA D. NORDSTROM
Lead Counsel
[e-mail]
April4, 2019
V'A ELECTRONIC FILING
AND OVERNIGHT DELIVERY
Attention: Filing Center
Public Utility Commission of Oregon
201 High Street SE, Suite 100
Salem, Oregon 97308-1088
Re: ldaho Power Company's Notice of Exception under OAR 860-089-0100
Filing Center:
In accordance with OAR 860-089-0100(3) and (4), ldaho Power Company ("ldaho
Power") provides the enclosed report detailing the circumstances related to a time-limited
opportunity to acquire a resource of unique value to ldaho Power's customers. This report is
being served on all parties to ldaho Power's last general rate Gase, UE 233, and ldaho
Power's last lntegrated Resource Plan case, LC 68. ldaho Power does not have a previous
request for proposal docket.
The enclosed report contains commercially sensitive information and is provided as
confidential under OAR 860-001-0070. Confidential information will be provided upon
request to those that execute a non-disclosure agreement; please contact ldaho Power's
legal counsel listed below for additional information.
ldaho Power respectfully requests that all communications related to this filing be
addressed to:
Donovan E. Walker
ldaho Power Company
1221Vtlest ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
dwalker@idahopower. com
LDN:csb
Enclosure
cc: Service Lists for Dockets UE 233 and LC 68
Regulatory Dockets
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
dockets@idahopower. com
o€^- ! ("1-+--',-,
Please direct inquiries regarding this filing to Donovan E. Walker at [phone].
Sincerely,
Lisa D. Nordstrom, OSB #973528
1221 W. ldaho St. (83702)
P,O. Box 70
Boise, lD 83707
CERTIFICATE OF SERVICE
I hereby certify that on April 4, 2019, I served a true and correct copy of ldaho
Power Company's NOTICE OF EXCEPTION UNDER OAR 860-089-0100 on the parties
listed below via electronic mail.
Service List
UE 233
John W. Stephens
Esler Stephens & Buckley
121 SW Morrison Street, Suite 700
Portland, O n 97204-3183
rste hens.com
lrion A. Sanger
Sanger Law PC
1117 SE 53'd Avenue
Portland, Oregon 97215
[e-mail]
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
dreadino@mindspring. com
Gregory M. Adams
Richardson Adams, PLLC
P.O. Box 7218
Boise, ldaho 83707
greq@ richardsonadams. com
Gommission Staff
Judy Johnson
Public Utility Commission of Oregon
201 High Street SE, Suite 100
P.O. Box 1088
Salem, Oregon 97308-1 088
i [e-mail]. us
Stephanie S. Andrus
PUC Staff - Department of Justice
Business Activities Section
1162 Court Street NE
Salem, Oregon 97301 -4096
stepha n ie. and rus@state. o r. us
Joshua D. Johnson
Attorney at Law
101 South Capitol Boulevard, Suite 300
Boise, ldaho 83702
[e-mail]
Anthony J. Yankel
Utility Net, !nc.
29814 Lake Road
Bay Village, Ohio 44140
[e-mail]
Peter J. Richardson
Richardson Adams, PLLC
P.O. Box 7218
Boise, ldaho 83707
peter@ richardsonadams. com
Donald W. Schoenbeck
Regulatory & Cogeneration Services, lnc.
900 Washington Street, Suite 780
Vancouver, Wash ington 98660-3455
[e-mail]
Erik Colville
Public Utility Commission of Oregon
201 High Street SE, Suite 100
P.O. Box 1088
Salem, Oregon 97308-1 088
erik. [e-mail]. us
CERTIFICATE OF SERVICE - 1
Oregon Citizens' Utility Board
Oregon Citizens' Utility Board
610 SW Broadway, Suite 400
Portland, Oregon 97205
[e-mail]
ldaho Power Gompany
Lisa F. Rackner
McDowell Rackner & Gibson PC
419 SW 11th Avenue, Suite 400
Portland, Oregon 97205
[e-mail]
PacifiCorp
PacifiCorp, dlbla Pacific Power
825 NE Multnomah Street, Suite 2000
Portland, Oregon 97232
oreqo ndockets@ pacificorp. com
Sarah E. Link
Pacific Power
825 NE Multnomah Street, Suite 1800
Portland, Oregon 97232
sarah. link@pacificorp. com
Portland General Electric Company
Randy Dahlgren
Portland General Electric Company
121 SW Salmon Street - 1WTC0702
Portland, Oregon 9720/-
[e-mail]
Renewable Northwest
Renewable Northwest
421 SW 6th Avenue, Suite 975
Portland, Oregon 97204
dockets@ renewablenw. org
NW Energy Goalition
Wendy Gerlitz
NW Energy Coalition
1205 SE Flavel
Portland, Oregon 97202
[e-mail]
Robert Jenks
Oregon Citizens' Utility Board
610 SW Broadway, Suite 400
Porttand, Oregon gnOS
[e-mail]
Etta Lockey
Pacific Power
825 NE Multnomah Street, Suite 2000
Portland, Oregon 97232
etta. lockev@ pacificorp. com
Douglas C. Tingey
Portland General Electric Company
121 SW Salmon Street - 1WTC1301
Portland, Oregon 97204
[e-mail]
CERTIFICATE OF SERVICE - 2
Christa
,t
CERTIFICATE OF SERVICE
I hereby certify that on April 4, 2019, I served a true and correct copy of ldaho
Power Company's NOTICE OF EXCEPTION UNDER OAR 860-089-0100 on the parties
listed below via electronic mail.
Service List
LC 68
Gail Carbiener
19506 Pond Meadow Avenue
Bend, Oregon 97702
mcqccarb@ bend broadband. com
Peter Barry
Citizens Advocating for Common Sense
801 Engleside Avenue
Joseph, Oregon 97846
[e-mail]
Commission Staff
Nadine Hanhan
Public Utility Commission of Oregon
201 High Street SE, Suite 100
P.O. Box 1088
Salem, Oregon 97308-1 088
nad i ne. han [e-mail]. us
Oregon Citizens' Utility Board
Oregon Citizens' Utility Board
610 SW Broadway, Suite 400
Portland, Oregon 97205
dockets@oregoncu b. org
Michael Goetz
Oregon Citizens' Utility Board
610 SW Broadway, Suite 400
Portfand, Oregon 97205
[e-mail]
Diego Atencio
Davis Wright Tremaine
1300 SW Fifth Avenue, Suite 2400
Portland, Oregon 97201
d ieqoatencio@dvvt. com
Lindy Hatcher
Lewis and Clark Trail Heritage Foundation
P.O. Box 3434
Great Falls, Montana 59403
I i ndv@ lewisandclark. org
Stephanie S. Andrus
PUC Staff - Department of Justice
Business Activities Section
1162 Court Street NE
Salem, Oregon 97301-4096
steo ha n ie. a nd rus@state. o r. us
Robert Jenks
Oregon Citizens' Utility Board
610 SW Broadway, Suite 400
Portland, Oregon 97205
[e-mail]
CERTIFICATE OF SERVICE. 1
ldaho Power Company
Lisa F. Rackner
McDowell Rackner & Gibson PC
419 SW 11th Avenue, Suite 400
Portland, Oregon 97205
[e-mail]
Renewable Energy Coalition
lrion A. Sanger
Sanger Law PC
1117 SE 53'd Avenue
Portland, Oregon 97215
[e-mail]
Nancy Esteb
P.O. Box 490
Carlsborg, Washington 98324
esteM4@centurvlink. net
Northwest & lntermountain Power
Producers Coalition
Carl Fink
Blue Planet Energy Law, LLC
628 SW Chestnut Street, Suite 200
Portfand, Oregon 97219
cmfink@bl ueplanetlaw. com
Oregon Department of Energy
Jesse D. Ratcliffe
Oregon Department of Energy
1162 Court Street NE
Salem, Oregon 97301 -4096
iesse. d. ratcliffe@doj. state. or. us
Wendy Simons
Oregon Department of Energy
550 Capito! Street NE, First Floor
Salem, Oregon 97301
wendy.simons@oreoon. gov
Sierra Club
Ana Boyd
Sierra Club
2101 Webster Street, Suite 1300
Oakland, California 94612
ana. boyd @sierraclu b. orq
John Lowe
Renewable Energy Coalition
12050 SW Tremont Street
Portland Oregon, 97225-5430
i ravenesan marcos@va hoo. com
Robert D. Kahn
Northwest & lntermountain Power
Producers Coalition
P.O. Box 504
Mercer lsland, Washington 98040
[e-mail]
Adam Schultz
Oregon Department of Energy
550 Capitol Street NE
Salem, Oregon 97301
[e-mail]
Gloria D. Smith
Sierra Club Law Program
2101 Webster Street, Suite 1300
Oakland, California 94612
oloria. sm ith@sierraclub. oro
CERTIFICATE OF SERVICE - 2
Cesia Kearns
Sierra Club
1821 SE Ankeny Street
Portland, Oregon 97214
cesia. keArns@sierraclub. oro
Stop B2H
Charles H Gillis
Attorney at Law
1306 Adams Avenue
La Grande, Oregon 97850
charlie@q illis-law. com
Jim Kreider
60366 Marvin Road
La Grande, Oregon 97850
i kreider@cam pblackdoq. orq
F. Steven Knudsen
FSK Energy
2015 SE Salmon Street
Portland, Oregon 97214
skn udsen@th reebovs. com
Christa Bearry, Legal Assistant
CERTIFICATE OF SERVICE - 3
f'r/l
RESOURCE PROCUREMENT FOR ELECTRIC COMPANIES
REPORT TO THE
PUBLIC UTILITY COMMISSION OF OREGON
PURSUANT TO OAR 860-089.100
(Redacted)
POWER PURCHASE AGREEMENT BETWEEN
IDAHO POWER COMPANY
AND
JACKPOT HOLDINGS, LLC
April4, 2019
:!.
' ' .ai/: . 1r r.\
,
I
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:
q
I. INTRODUCTION
ldaho Power Company ("ldaho Power" or "Comp?[y"), in accordance with OAR
860-089-100(3) and (4), hereby respectfully submits this report explaining the
circumstances related to a time-limited opportunity to acquire a resource of unique value
to ldaho Power customers.
Under the rules for Resource Procurement for Electric Companies, an electric
utility such as ldaho Power must comply with the competitive bidding requirements for the
acquisition of a generation resource or contract 80 megawatts ("MW') and larger and five
years or longer in length, subject to certain exceptions. OAR 860-089-100(1). An
exception to this requirement is where "[t]here is a time-limited opportunity to acquire a
resource of unique value to the electric company's customers." OAR 860-089-100(3Xb).
When this exception to the competitive bidding requirements applies, the electric
company must file a report with the Public Utility Commission of Oregon ("OPUC" or
"Commission") explaining the relevant circumstances of the acquisition. OAR 860-089-
1oo(4).
!I. BACKGROUND
On March 20,2A19, ldaho Power received a final offerfrom Jackpot Holdings, LLC
("Jackpot Sola/') for a Power Purchase Agreement ("PPA") for the purchase of up to 220
MW of renewable solar generation from a proposed ldaho solar facility. ldaho Power was
approached in late September 2018 by Jackpot Solar where it offered to sell to Idaho
Power 120 MW of renewable solar generation with very low pricing, significantly below
both market prices and Public Utility Regulatory Policies Act of 1978 ('PURPA') avoided
cost rates. On September 26,2018, ldaho Power and Jackpot Solar executed a Mutual
Nondisclosure, Confidentiality, and Exclusivity Agreement in order to commence the
negotiation and evaluation of the offered power purchase. The exclusivity agreement
IDAHO POWER COMPANY REPORT - 1 April4, 2019
granted ldaho Power the exclusive right to purchase the generation from this facility
through March 25,2019. During negotiations, Jackpot Solar offered an additional 100
MW of generation from an adjacent development site, Franklin Solar.
ldaho Power analyzed the impact of operating the offered generation as part of its
system first by using AURORA to model the Company's system operations and costs
both with and without the additional solar generation, and then by including the 120 MW
and 100 MW in the Company's current 2019lntegrated Resource Plan ("lRP") resource
portfolio analysis. This analysis shows significant cost savings and customer benefits
from the acquisition of the solar generation. Additionally, the generation at the contracted
price is selected as a low-cost resource capable of being integrated into ldaho Power's
system by most of the various resource portfolios analyzed as part of ldaho Power's 2019
IRP.
The pricing in the PPA relies upon the seller's ability to safe harbor the current 30
percent federal investment tax credit benefits prior to the end of December 2019, after
which time those benefits step down. ln order to secure the necessary financial
commitments and initial development activities required to safe harbor the current
investment tax credits and contract pricing, it was necessary to have a contract for the
purchase of the generation during the first quarter of 2019. The ldaho Public Utilities
Commission also requires ldaho Power to comply with the competitive procurement rules
applicable in the Company's Oregon service area in the acquisition of new supply-side
resources. Case No. IPC-E-10-03, Order No. 32745. There was not sufficient time to
conduct a full competitive procurement request for proposals process and, as a time-
limited opportunity of unique value that benefits customers, this resource acquisition is
exempt from the competitive procurement rules of the OPUC.
IDAHO POWER COMPANY REPORT - 2 April4, 2019
III. OPPORTUNITY AND BENEFITS
A. ."
ldaho Power was first approached by Jackpot Solar in September 2018 regarding
the possibility of acquiring the renewable solar generation of the Jackpot Solar facility.
ldaho Power and Jackpot Solar immediately began negotiations and analysis in the
evaluation of the offered power purchase. The pricing in the PPA relies upon the seller's
ability to safe harbor the current 30 percent federal investment tax credit benefits prior to
the end of December 2019, after which time those benefits step down. ln order to secure
the necessary financial commitments and initial development activities required to safe
harbor the current investment tax credits and contract pricing, it was necessary to have a
contract for the purchase of the generation during the first quarter o12019. Jackpot Solar
must initiate sufficient development activities to meet the requirements of securing the full
benefits of the tax credits between now and the end of this year.
Because of the compressed timeline required to negotiate a power purchase
agreement, and then secure the required financing and development activities to safe
harbor the tax credits, there was not sufficient time to conduct a full request for proposals
('RFP') under Oregon's competitive bidding rules. The RFP process would have taken
many months to complete and would have exceeded the timeline required to capture the
unique value of this opportunity.
8. ."
The Jackpot Solar PPA wil! provide significant customer benefits over the term of
the contract. ldaho Power's analysis shows that acquiring up lo 220 MW of solar as
represented in the PPA is estimated to save customers approximately $90,226,470 al
120 MW and $150,827,810 at220 MW in pass-through purchased power expenses.
Additionally, when the PPA generation is included in the portfolio analysis for the current
IDAHO POWER COMPANY REPORT - 3 April4, 2019
2019|RP, it is selected as a least-cost, reliable resource that can be integrated into ldaho
Power's system. This analysis included the purchased generation at prices equal to or
slightly higher than those that were obtained in the Agreement and, additionally, did not
include any economic benefits associated with ldaho Power's 100 percent ownership of
the Green Tags and Environmental Attributes of the generation. lnclusion of these items
only increases the benefits passed through to customers. The Agreement has substantial
customer benefits and is in the public interest.
The PPA is for a term of 2}-years and contains non-levelized, fixed pricing that
escalates at 1.5 percent annually during the term. First-year pricing for 120 MW is
$21.7llmegawatt-hour ("MWh") and pricing for 220 is $23.11lMWh. This Contract Price
is significantly below ldaho Power's PURPA avoided cost prices and fonarard Mid-
Columbia ("Mld-C") electric market prices, both in initial year pricing as well as the 20-
year levelized price as shown in the chart below.
Pricing Methodology
First Contract Year
(Dec.2022 - Nov.
2023) Average Price
2O-Year
Levelized Price
$/MWh $/MWh
Jackpot Holdings, LLC - 120 MW $21.75 $24.31
Jackpot Holdings, LLC - 220 MW $23.1 1 $25.83
Oregon Standard Avoided Cost Price $38.49 $53.74
ldaho Published Avoided Cost Price $40.11 $80.27
lncremental Cost IRP Avoided Cost
Methodology $28.89 $58.54
Mid-C Market
IBEGIN
coNFTDENTTALII
I
IEND
CONF!DENTIALI
IDAHO POWER COMPANY REPORT - 4 April4,2019
The PPA is for the purchase of 120 MW with an option to purchase an additional
100 MW at the Contract Price. Jackpot Solar initially offered to sell 120 MW of output to
ldaho Power, forwhich Jackpot Solar had previously completed and obtained a Generator
lnterconnection Agreement ("GlA') as an Energy Resource (ER). During negotiations,
Jackpot Solar offered an additiona! 100 MW of generation from an adjacent development
site, Franklin Solar, defined in the PPA. The price settled upon forthe initial 120 MW is
$21 .7slMwh, with the additional 100 MW priced three dollars higher at$24.751MWh. The
Contract Price in the PPA contains the $21.75/MWh for the 120 MW and for 220 MW
shows a weighted and blended price of $23.11lMWh. This is the result of retaining the
$21.7slMwh for the initial 120 MW and adding the additional 100 MW at$24.751MWh for
a weighted and blended price of $23.11lMWh for the entire 220 MW.
Because discussion of the additional 100 MW entered into the PPA negotiations
midway through the process, had not yet applied for or been studied for interconnection,
and, atthe time, had not been through the same economic analysis as the initial 120 MW,
it is represented as a purchase option in the PPA. The option for the Additional Output
of 100 MW identified as Franklin Solar is contingent upon the GIA process for the
additional 100 MW and the outcome of additional analysis and the mutual agreement of
the parties. The Scheduled Commercial Operation Date for the additional 100 MW, if that
option is exercised, is December 1,2023, with the Scheduled Commercial Operation Date
for the 120 MW remaining at December 1 ,2022. Unless otherwise agreed, this option
expires on September 1, 2019.
The proposed Jackpot Solar project approached ldaho Power at a unique time
where the Company was able to analyze the proposed PPA in two ways. First, ldaho
Power used the 2017 IRP to evaluate the economics of the Jackpot Solar PPA. Second,
as ldaho Power is currently in the process of preparing its 2019 lRP, the Company was
IDAHO POWER COMPANY REPORT - 5 April4, 2019
able to modelthe proposed PPAwithin the portfolio development and analysis of the 2019
lRP. The initial portfolio analysis including Jackpot Solar was presented to the IRP
Advisory Committee on March 14,2019.
ldaho Power used its AURORA model to perform the initial analysis of customer
benefits. This is also the model used by ldaho Power in the portfolio analysis of the lRP.
ldaho Power uses the AURORA electric market model as the primary tool to model
optimized portfolios of resources and the operating costs for each portfolio, over a 20-
year planning period. The AURORA modeling results provide detailed estimates of
resource costs, wholesale market energy pricing, resource operation, and emissions
data.
ldaho Power uses the AURORA model for IRP planning, variable power supply
expense regulatory filings, coal studies, PURPA pricing, and project valuations. Within
the context of IRP planning, the AURORA model has been used to simulate the hourly
economic dispatch of ldaho Power-developed portfolios over the 2}-year IRP planning
period. Additionally, the AURORA model is used to perform stochastic risk analysis within
the IRP portfolio analysis.
Based on feedback in the 2017 lRP, forthe 2019 IRP analysis, ldaho Power is
using the long-term capacity expansion ("LTCE") modeling capabilities within the
AURORA model to produce a Western Electricity Coordinating Council ("WECC')
optimized portfolio under various future conditions. The WECC optimized portfolio
includes the addition of supply- and demand-side resources for ldaho Power's system
while simultaneously evaluating current generation units for economic retirement. The
selection and retirement of ldaho Power resources includes maintaining sufficient
reserves and planning margin as defined in the model. The modelcalculates a forecasted
total ldaho Power portfolio cost (fixed and variable) over the 2O-year planning period.
IDAHO POWER COMPANY REPORT - 6 April4,2019
The AURORA model is the appropriate toolto analyze the net costsflcenefits of the
Jackpot Solar PPA for ldaho Power customers. The 2019lRP AURORA model version
and setup allows the Company to evaluate the economics of resources while maintaining
required planning margin and regulating reserve through the LTCE and hourly dispatch
modeling processes. The portfolios are further evaluated under varying system
conditions, such as natural gas prices and carbon costs. The resulting cost and reserves
information from the AURORA modeling serves to inform the selection of a portfolio of
resources that adheres to the least-cost, least-risk planning principles applied in ldaho
Power's lRP.
The economic analysis of the Jackpot Solar PPA relied on an assessment of
system dispatch costs based on AURORA simulations over the time frame ol2017-2036.
The baseline portfolio setup was the preferred portfolio and model version used in
modeling costs for the acknowledged 2017 lRP. The Company compared the 2o-year
cost streams from AURORA simulations that included the Jackpot Solar PPA at different
costs and a base run excluding Jackpot Solar. Jackpot Solar's 120 MW of solar was run
with a starting year of 2022 and a price starting at $21.7slMwh escalated at 1.5 percent
annually. ldaho Power also modeled Jackpot Solar at 220 MW with a starting price at
$23.11lMWh, escalating at 1.5 percent annually. The difference between the AURORA
model simulations of ldaho Powe/s 2017 IRP preferred portfolio under planning case
natural gas determined the cost or benefit to total power supply costs.
The base AURORA simulation of the preferred portfolio from the 2017 lRP, without
inclusion of generation from Jackpot Solar, resulted in tota! operating costs of
$9,629,928,260. The same AURORA simulation with the addition of the Jackpot Solar
PPA generation resulted in total operating costs that were $9,539,401,790 for 120 MW
and $9,478,800,440 lor 220 MW as described above. These results show customer
IDAHO POWER COMPANY REPORT - 7 April4, 2019
benefits of including the generation from the Jackpot Solar PPA of $90,226,470 at 120
MW and $150,827,810 at 220 MW compared to the baseline AURORA simulation over
the 20-year planning period. ln general, the addition of the Jackpot Solar PPA reduced
total operating costs by offsetting generation from higher priced resources and allowing
for more surplus sales. lnclusion of the generation from the Jackpot Solar PPA shows
substantial customer benefits.
To evaluate the Jackpot Solar PPA as part of the 2019lRP portfolio analysis, ldaho
Power included the financial and operating characteristics of the Jackpot Solar PPA in
the AURORA New Resource Table as resources available for selection as part of a
portfolio that would economically and reliably serve ldaho Power's forecasted load over
the 20-year planning period. The AURORA New Resource Table included 120 MW of
solar priced at $21 .7slMwh available in 2022 and 100 MW of solar priced at $26.08/MWh
available in 2023. Each project could be selected independently, but the combined
capacity represents the total 220MW in the Jackpot Solar PPA. Analysis was done under
three natural gas price forecasts and four carbon price forecasts, resulting in 12 portfolio
combinations with various gas and carbon futures. The Company also included portfolio
analysis with the same 12 portfolios but with the increased import capability of the
Boardman-to-Hemingway (B2H) transmission line starting in 2026, resulting in a total of
24 portfolios.
ldaho Power ran a total of 24 LTCE portfolios in AURORA. Each optimized
portfolio was comprised of the most cost-effective set of resources to serve ldaho Power's
load over the 2O-year planning period while maintaining appropriate planning reserve
margins.
IDAHO POWER COMPANY REPORT - 8 April4, 2019
Results from the LTCE modeling are preliminary and include:
. The AURORA LTCE process selected new solar resources in the 2022
and 2023 time frame in 18 of lhe 24 portfolios.
. Both the 120 MW and 100 MW solar resources, representing the
Jackpot Solar PPA, were selected in 14 ol the 24 portfolios.
ln many of the optimized portfolios, the model selected additional solar and wind
resources above the Jackpot Solar PPA capacity, all at a higher cost than the Jackpot
Solar PPA.
The economic analysis performed by the Company under the 2017 IRP
methodology and the LTCE modeling in AURORA demonstrates that the Jackpot Solar
PPA will be a cost-effective resource providing benefits for customers.
IV. CONCLUSION
ldaho Power was presented with a unique time-limited opportunity to acquire a
resource that provides significant value to customers by acquiring renewable solar
generation at a price that is among the lowest reported PPA prices in the nation. This
PPA represents a significant benefit to ldaho Power customers, and provides for the
addition of a large, local, 100 percent renewable generation project to ldaho Power's
generation portfolio at the same time as the Company's reliance upon existing coal
generation facilities is reducing. The PPA is in the public interest, the best interests of
ldaho Power customers, and represents a time-limited opportunity of unique value for
customers.
IDAHO POWER COMPANY REPORT - 9 April4, 2019