20210104Exhibit 13.pdf

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Exhibit 13
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RECEIVHS An luAcoRP company
32
DONOVAN E. WALKER
SenlorCumod
dwdlorOldatpoomr.com
May 25, 2010
VIA HAND DELIVERY
Jean. D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Stleet
P.O. Box 83720
Bolse, ldaho 837 20-007 4
Re: Case No. IFC-E-1&17
TN THE MATTER OF THE APPLICATION AF DAHO POVlFIR COMPANY
FOR APPROVAL OF A FIRM ENERGY SAIES.AGREEI'ENT WTH NEW
ENERGY TWO ILC FOR THE SA]LE AND PURCHASE OF ELECTRIC
ENERGY FROM THE SWAGER FARMS DAIRY ANAEROB'C D'GESTOR
PROJECT
Dear Ms. Jewell:
Enclosed for ftling please find an orQinal and seven O) copbs of ldaho Polrer
Company'sApplication in the above matter.
Very huly yours,
?
Donovan E. Walker
DEW:csb
Enclosures
P.O. Box 70 (83707)
1221 W' ldaho St
Boisc, lD 8:1702
DONOVAN E. WALKER (lSB No. 5921)
LISA D. NORDSTROM (lSB No. 57tri)
ldaho Power Company
P.O. Box 70
Boise, ldaho 83707
Tebptone: (208) 388-531 7
Facsimile: (208) 388€936
dwalker@idahopower. com
lnordstrcm @idahoponer. com
RECflvr$
?Bt0tiilY e5 ff{ E: 3?
unlt?#[%B?,ffii$*,o0,
Attomeys for ldaho Power Company
Street Address for Exoress Mail:
1221 West ldaho Street
Boise, ldaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMTSSION
IN TI.IE MATTER OF THE APPLICATION
OF IDAHO POWER COMPAI.IY FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT WITH NEW ENERGY TWO,
LLC, FOR THE SALE AND PURCHASE
OF ELECTRIC ENERGY FROM THE
SWAGER FARMS DAIRY ANAEROBIC
DIGESTOR PROJECT.
CASE NO. IPGE.1O-17
APPLICATION
ldaho Power Company ("ldaho Powef or the "Gompant'), in accordance with
ldaho Gode S 61-503 and RP 52 and the applicable prcvisions of tre Public Utility
Regulatory Policies Act of 1978 ('PURPA'), hereby respectfirlly applies to the tdaho
Public l.Jtilities Commission ("|PUC" or the 'Commission") for an Order approving the
Firm Energy Sales Agreement between ldaho Power and New Energy Two, LLC ("New
Energf) under which New Energy vrouH sell and ldaho Power would puchase electric
energy generated by the Swager Farms Dairy Anaerobic Digester Power Project
('Facilitf) located in Gassia County, ldaho.
APPLICATION.l
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ln support of this Application ldaho Power represents as follows:
I. BACKGROUND
1. Sections 201 and 210 of PURPA, and pertinent regulations of the Federal
Energy Regulatory Commission ("FERC"), require that regulated elestric utilities
purchase pourer produed by oogenerators or small power producers that obtain
qualifuing facility ('QF) status. The purchase prioe a QF receives for the sale of itrs
power is generally refened to as the arroided cost rate and is computed to be equal to
the incremental cost to an electric utitrty of electric energy or capacity or both, which, but
for the purchase from the QF, such utilrty would generate itseJf or purchase from
another sour@. The Commission has aufrrority under PURPA Sec'tions 2A1 and 210
and the implementing regulations of the FERC, 18 C.F.R. S 292, to set avoided costs, to
order electric utilities to enter into fixed-term obligations for the purchase of energy from
QFs, and to implement FERC's PURPA rules.
II. THE FIRi,I ENERGY SALES AGREE]f,EN:I
2. On May 24, 2010, ldaho Power and New Enegy entercd into a Firm
Energy Sales Agreement (?greemenf) for the Facility pursuant to the terms and
conditions of the various Gommission Orders applicable to this PURPA agreement.
See, Order Nos. 30415, 30488, 30738; and 307M. A copy of the Agreement is
enclosed with this Application as Attacfrment No. 1. The Agreement is for a term of 15
years and contains the non-levelized published avoided cost rates established by the
Commission in Order No. SO7M for energy deliveries of less than 10 average
megawatts ('[l|W").
APPLICATION - 2
3. The nameplate rating of this Facility will be 2 i/n /. As defined in
paragraph 1.21 of the Agrcement and as described in paragraph 4.1.3 of the
Agreement, New Energy will be rcquired to provide data on the Facility that ldaho
Power will use to confirm that under normal and/or average conditbns the Facility will
not exceed 10 average [l|W on a monthly basis.
4. New Energy has elected a Scheduled Operation Date of December 1,
2012, for the Facility. lf the Facility has not achieved its Oper:ation Date by that date,
Delay Liquidated Damages and associated Delay Security provisions within this
Agreement arc applicable.
5. Section 21.1 of the Agrcement provides that the Agreement will not
become effec*ive until the Commission has approved all of the Agrcement's terms and
conditions and declared that all payments ldaho Power makes to New Energy for
purchases of energy will be allowed as prudently incuned expenses for ratemaking
pumoses.
6. All applicable lnterconnectlon study charges under Schedule 72 have
been assessed and ollected from New Erergy, The final interconnecfion Feasibility
Study is complete and the final Facility Study for the Facilig is undenray. tdaho Power
Power Supply has made application for applicable transmission capacig and has been
notified that transmission capacity is available.
l[. APPLICAFLE RATES
7. On March 16,2010, in OrderNo.30125 issued in Case No. GNR-E-I0-01,
the Commission adopted new published aroided cost rates for the purchase by ldaho
Power of capacity energy from PURPA QFs. The rates adopted in ffier No. 31025 are
APPLICATION.3
approximately 10 percent lower than the rates previously adopted in Case No. GNR-E-
0S'01, Order No. 30744. By its terms, Order No. 31025 applies to new PURPA
csntrac{s executed on and afier March 10, 2010. Because the Agreement is dated May
24, 2010, Order No. 31025 rvouE require that the rates to be paid New Energy under
the Agreement would be the nates set out in Oder No. 31025 rather than the higher
rates approved by the Commission in Order No. 30744. However, this Commission has
recognized in prior Oder:s that there are situations when QF mtes are changed that it is
appropriate to include a prior vintage of rates in a cunent PURPA contrac't.1 ln several
cases litigated in the early to mid-1990s, the Commission determined, and the ldaho
Supreme Court affirmed, certain criteria that a QF developer must satisff in order to
establish an entitlement to setl energy at a particular pubtished arroided cost rate.2 One
of the criteria that would qualify a particular generating facility to receive the superseded
rate requircs that the developer have executed a power sales agreement with the utility
at the nate in question before a suc@ssor rate becomes effective. lf the QF cannot
meet the first criteria, the second crtteria requires that prior to the new rates effec'tive
date, the QF developer must have filed a meritorious complaint alleging that the project
was sufficiently mature and far enough along in the contracting process that but for the
conduct of the utility company, the developer would have been able to sign a contract
with the utility containing the superseded rates
8. ln this case, New Energy had not signed a contract with ldaho Power to
purchase the Facility generation on or beforc March 16, 2OlO. On April 15, 2010, New
t Ttre ldaho Supreme Court has confirmed that it is within the Commission's jurisdbtion to
determine whiclr vintage of QF rates should apply to a PURPA contract. See Empfe Lumbr v.
Washington Water Pawer, 114 ldaho 191, 755 P.2d 1229 (1988) and A.W. Brcwn Co., lnc., v. ldaho
tuww bmpany, 1 21 ldaho 812, 828 P.2d Ul (1992).
2 A.W. Brown, Ra*bud,131 ldaho.
APPLICATION.4
Energy filed a Complaint at the Commission alleging that it was ent'Ued to 3 contracts
oontaining the higher Order No. 30744 rates. Upon further rcview of the facts, and by
signing this agreement and voluntarily submitting it to the Commission, ldaho Power
has concluded that New Energy meets the second test described above and should ba
entitled to the rates established by Order No. 30744 in Case No. GNR-E-09{1. The
Company has rcceived a number of requests for'grandfathering" of QF contnacts. ln
making a determination to file and support an application urying that a partlcular QF
project is entitled to the Order No. 30744 rates, the Company ooncluded that a proiect
must have met ALL of the following criteria priorto March 16, 2010.
a. lnterconnec{ion and Transmission
i. Filed an interconnection application; and
ii. Received and accepted an interconnection feasibility study
Ieport for the proiect and paid any requested study deposits (or established credit) for
the next phase of the interconnectbn process in accodance with Schedule 72; and
iii. Received confirmation from ldaho Power that transmission
capacity is available for the project and/or reoeived and accepted tnansmission capacity
study rcsults and cost estimates.
b. Purchase PowerAoreement
i. ^, "r."rent was materially complete prior to March 16,
2010, and except for routine ldaho Povyer ftnal prccessing, an agreement rrculd have
been executed by both parties priorto March 16, 2010.
9. !t is ldaho Powe/s opinion that the Nerr Energy Facility meets all of the
above-referenced criteria. With respect to the power purchase agreement crtteria, New
APPLICATION. s
Eneqy and ldaho Porer had resolved all material outstanding contract issues prior to
March 16, 2010. Both parties expected that final review of the contract would be a
relativety straightlorward process. However, in early February, the Company became
aware of some nar procedural reguirements from FERC that affected the way that the
Facility would qualiff br a Network Resource designation and thereby obtain the
tnansmission needed to bring the power to be generated by the Facility from the
interconnection to the Company Ioad centers. The new procedure required some
changes to the intemal prooess at ldaho Power. ldaho Power embarked upon
interpreting the regulations and implementing a process to be in compliance. ln ldaho
Powe/s opinion, the Agreement would have been signed by both parties prior to March
16, 2010, except for the time rcquircd by ldaho Power to implement the new intemal
transmission and network resour@ process and, as a resutt, the Facility should qualfi
for a contract including the Order No. 30744 rates. New Eneryy is cunent in all of its
interconnection study payments and so as long as New Energy continues to prcvide
requested irf,ormation in a timely manner and pay invoices on time, it appears that the
interconnection can be completed in time for New Energy to achieve its Scheduled
Operation Date forthe Facility.
10. The Agreement contains the most recent terms and conditions, including
the liquidated damages and security provisions previously approved by the Commission
in the Arena Drop and the Dry Creek dairy cases, Order Nos. 31060 and 31034,
respectively.
APPLICATION.6
'41. Based on the forcgoing, ldaho Power believes that the Agreement meets
the criteria established by the Commission in its prior Orders and the Commission
should approve the Agreement as presented.
IV. TODIFIED PROCEDURE
12. ldaho Power believes that a hearing is not necessary to consider the
issues presented herein and respectfully requests that this Application be processed
under Modified Prccedure, 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 ils testimony and support the Application in sudr
hearing.
v. coililuNtcATtoNs ANp sERVtcE OF PLEADINGS
13. Communications and seMce of pleadings, exhibits, orders, and other
documents relating to this proceeding should be sent to the following:
Donovan E. Walker, Senior Counsel
Lisa Nordstrom, Lead Counsel
ldaho Power Company
1221Wes;t ldaho Street
P.O. Box 70
Boise, ldaho 83707
[e-mail]
lno rdstrom @id ahooower.mm
Randy C. Allphin
Energy Contrac{ Adm inistrator
ldaho Power Company
1221 West ldaho Street
P.O. Box 70
Boise, ldaho 83707
rallphin@ida hooower. com
VI. REQUEST FOR RELIEF
14. ldaho Power Company respectftrlly requests that the Commission issue
an Order (1) authorilng that this matter may be processed by Modified Procedure; (2)
approving the Firm Energy Sales Agreement between ldaho Power Company and New
Energy Two, LLC, without change or ondition; and (3) declaring that all payments for
purchases of eneryy under the Firm Energy Sales Agreement between ldaho Power
APPLICATION. T
Company and New Eneryy Tvto, LLC, be allowed as prudently incuned expenses br
mtemaking purposes.
Respecttully submitted this 25h day of May 2010.
E. WALKER
Attomey for ldaho Power ComPanY
APPLICATION - 8
CERTIFICATE OF IIAILING
t HEREBY CERTIFY that on the 25h day of May 2010 t served a true and conect
copy of the foregoing APPLICATION upon the following named parties by the method
indicated below, and addressed to the following:
New Energy One, LLC
Attn: Laura Knothe, PE.
New Enelgy One, LLG
8720 Mc Lane
Middleton, ldaho 83644
_Hand DeliveredX U.S. Mail
-
Orrembht Mail_FA)(
Email
Dean J. Miler
McDEVITT & MILLER LLP
420 West Bannock Stneet
P.O. Box 256/.
Boise, ldaho 83701
_Hard Delivered
.X U.S. Mail
_Ovemlght Mail_ FAX
_ Email [e-mail]
Donovan E. Walker
APPLICATION.9
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISS]ON
GASE NO. IPC-E-10-17
IDAHO POWER GOMPANY
ATTACHMENT NO. 1
I
FIRM ENERGY SALES AGREEMENT
BETWEEN
IDAHO POWER COMPAI.TY
AND
NEW ENERGY TWO, LLC
TABLE OF CONTENTS
Articlg TITLE
Definitions
No Reliance on Idaho Power
Warranties
Conditions to Acceptance of Energl
Term and,Operation Date
Purchase and Sale of Net Energr
Purchase Price and Method of Payment
Environmemtal Attributes
Faoility and Interconnection
Metedng and Telemetry
Records
Operations
Indemnifi cation and rnsurance
Force Majeure
Liability; Hication
Several Obligations
Waiver
Choice of Laws and Venue
Disprtes and Default
Governmental Authorization
Commission Order
Successors and Assigns
Modification
Taxes
Notices
Additional Terms and Conditions
Severability
Counterparts
Entire Agreernent Signatures
I
2
3
4
5
6
7
8
9
10
ll
T2
13
l4
l5
l6
17
l8
t9
20
2T,)
23
24
25
26
27
28
29
AppendixA
Appendix B
Appendix C
Appendix D
FIRM ENERGY SALES AGREEMENT
(10 aI\,IW or Less)
Project Name: Swager Famts
Project Ntmber: 3 I 6 I 61 30
TIIIS AGREEMENT, entered into on this 2@*'or lhq"l 20l0betweenNEw ENERGY
TWO, LLC, an ldatro limited liability company (Seller), and IDAHO POWER COMPANY, an Idaho
corporation (Idabo Power), hereinafter sometimes referred to collectively as "Parties'" or individually as "Pdty."
WTINESSETH:
WI{EREAS, Seller will design, construct, own, maintain and operate an elechic generation facility; and
WISREAS, Seller wishes to sell, and Idaho Power is willing to purchase, firrr elecfiic energy produced
by the Seller's Facility.
TI{EREFORE, In consideration of the mutual covenants and agreements heneinafter set forth, the
Parties agree as follows:
ARTICLE T: DEFINITIONS
As used in this Agreement and the appendices attached hereto, the following terms
shall have the following meanings:
l.l "Be$ l4gggf'- Monthly Net Enerry less than I lfflo of the monthly Net Energy Amount as specified
in paragraph 6.2 of this Agreemeot.
1.2 "eommissiono' - The ldaho Public Utilities Commission.
1.3 "eqntract Yeat'' - The period commencing each calendar year on the same calendar date as the
Operation Date and ending 364 days thereafter.
I .4 "Delay Liquidated Damages" - Damages payable to ldaho Power as calculated in paragraph 5.3, 5.4,
5.5, 5.6 and 5.8.
- l-
il,ga0rc
1.5 "Dgley Perigd" - All days past the Scheduled Operation Date until the Seller's Facility achieves the
Operation Date.
1.6 "Dglay-Price" - The curre,lrt month's Mid{olumbia Market Energy Cost minus the current month's All
Hours Energy Price specified in paragraph 7.3 of this Agreement. If this calculation results in a value
less than O the result of this calculation will be 0.
1.7 "Designated DisPatch Facilih/'- Idaho Power's Systenrs Operations Group, or any subsequent group
designated by Idaho Power.
1.8 "Egeilitt''- That electric generation facility described in Appendix B of this Agrement,
1.9 "First Energy Date" - The day commencing at 00:01 hours, Mountain Time, followiag the day that
Seller has satisfied the requirements of Article IV and the Seller begins delivering energy to Idaho
Power's system at the Point of Delivery.
1.10 "tlggvy Load Hours" - The daily hours beginning at 7:00 arn" ending at l1:00 pm Moqntain Time, (16
hours) excluding all horns on all Sundays, New Years Day, Mernorial Day, Independence Day, Labor
Day, Thantsgving and Chrishas.
l.l I "Inadvertent-Enerst''- Electric enerry Seller does not intend to g€nerate. Inadvertent energy is more
particularly described in paragraph 7.5 of this Agreement.
l.l2 "Interconnection Facilitiesl - All equipment specified in schedule 22.
I . t 3 "Initial Capacity Determination" - The process by which ldatro Power confirnrs that under normal or
average design conditious the Facility will generate at no more than l0 average MW per month and is
therefore eligible to be paid the published rates in accordance with Commission Order No.29632.
l.14 "Llght L,ogd-[IorEE" - The daily houn beginning at I l:00 prq ending at7:O0 am Mountain Time (8
hours), plus all other hours on all Sundays, New Years Day, Memorial Day, Independence Day, Labor
Day, Thaoksgving and Christmas.
l.l5 "I&Es," - The loss of electical energy expressed in kilowatt hours ftWh) occuring as a result of the
traosformation and hansmission of energy betrveen the point where the Facility's energy is metered and
the point the Facility's energy is delivered to the Idaho Power electrical system. The loss calculation
fonnula will be as specified in Appendix B of this Agreement.-2'
s^g*orc
t.l6
t.l7
l.l8
1.19
1.20
t.2t
1.22
t.23
t.24
"Market Energy Reference Price" - Eightydve percent (85olo) of the Mid{olumbia Market Energy
Cost.
"Me,terial-Breach" - A Default (paragraph 1"9.2.1) subject to paragaph 19.2.2.
'@'- The maximum capacity (MW) of the Facility will be as specified in
Appendix B ofthis Agreement.
"A[eterigg_Egi@Egf'. - All equipment specified in Schedule 72, this Agreement and any additional
equipment specified in Appendix B required to measureo record and telemeterbi directional pow€r
flows between the Selleds electic generation plant and Idaho Poweds systern.
"Mid: Columbia Market Enery Cost" - The monthly weighted average of tte daily on-peak and off-
peak Dow Jones Mid{olumbia Index (Dow Jones Mid{ Index) prices for non-firm enersr. If the Dow
Jones Mid{olumbia Index price is discontinued by the reporting agency, both Parties will mutually
agree upon a replacement index, which is similar to the Dow Jones Mid{olumbia Index. The selected
replacement index witl be consistent with other similar agreements and a commonly used index by the
electrical industry.
"Neuqdgte.1Ce@iry]'-The firll-load electrical quantities assigned by the designer to a generator and is
prime rnover or other piece of electrical equipmen! such as transformers and circuit breakers, under
standardized conditions, expressed in amperes, kilovolt-amperers, kilowatts, volts or other appropriate
units. Usually indicated on a nameplate attached to the individual rnachine ordevice.
"M_Engry" - All of the electric en€rgy produced by the Facility, less Station Use, less Losses,
expressed in kilowatt hours (kWh). Subject to the terms of this Agreement, Seller commits to deliver all
Net Enerry to Idaho Power at the Point of Delivery for the full term of the Agree,ment. Net Energy does
not include Inadvertent Energy.
"gpBration-Dglg" - The day commencing at 00:01 hours, Mountain Time, following the day that all
requirements of paragraph S.2have been completed.
"Poigt_@liv€ry" - The location specified in Appendix B, where Idaho Power's and the Seller's
electrical facilities are interconnected and the enerry from this Facility is delivered to the ldaho Power
elecnical system"
'3- s^g*arc
1,25 "Prudent Electrical Practices" - Those practices, methods and equipment that are comnronly and
ordinarily used in electical engineering and operations to operate elechic equipment lawfully, safely,
dependably, efficiently and economically.
1,26 "scheduled Operation Date'l - The date specified in Appendix B when Seller anticipates achieving the
Operation Date. It is expected that the Scheduled Operation Date provided by the Seller shall be a
reasonable estimate of the date ttrat the Seller anticipates that the Seller's Facility shall achieve the
Operation Date.
1.27 "schedule 72- - Idaho Power's TariffNo l0l, ScheduleT} or its successor schedules as approved by
the Commission. The Seller shall be responsible to pay all costs of interconnrction and integration of
this Facility into the Idaho Power electrical sysem as specified within Schedule 72.
1.28 "Seasdn" - The three periods identified in paragraph 6.2. I of this Agreement.
1.29 "Soecial Facilities" - Additions or alterations of nansmission and/or distribution lines and transfornprs
as described in Schedule 72.
1.30 "statigr-ltg" = Electric energy that is used to operate equipment that is auxiliary or otherwise related to
the production of electicity by the Facility.
l.3t "Sgplug-Eaerry]'- Is (l) Net Energr produced by the Seller's Facility and delivered to the Idaho Power
electrical system during the month which exceeds I l0olo of the monthly Net Energ5r Amount for the
corresponding month specified in paragraph 6.2. or (2) If the Net Energy pnrduced by the Seller's
Facility and delivered to ttre Idaho Power electrical system during the rnonth is less than 9trlo of the
monthly Net Energy Amount for ttre conesponding month spocified in paragraph 6.2,then all Net
Energy delivered by the Facility to the ldaho Power electrical system for that given month or (3) All Net
Enerry produced by the Seller's Facility and delivered by the Facility to the ldaho Power electrical
syste,m prior to the Operation Date.
1.32 :@'- The total cost of sfuctures, equipment and appurte,nances.
4-
5/19a0rc
2,1
2.2
3.1
3.2
4.1
ARTICLE II: NO RELIANCE ON IDAHO POWER
Seller Independent InvestiEation - Seller warrants and rcpresents to ldaho Power that in entering into
this Agreement and the undefiaking by Setler 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 ldaho Power in connection with the transactions contemplated by this
Agreement.
Seller Independent Expqts - All professionals or experts including, but not limited to, engineers,
attorneys or accountants, that Seller may have consulted or relied on in undertaking the transrctions
conternplated by this Agree,ment have been solely those of Seller.
ARTICLE IIL IIIARRANTIES
No Warrmty by Idaho Power - Any rwiew, acce,ptance or faihne to review Seller's design,
specifications, equipment or facilities shall not be an endorsement or a confirmation by ldaho Power and
Idaho Power makes no warranties, expressed or implie{ regarding any aspect of Seller's design,
specifications, equipment or facilities, including but not limited to, safety, durability, reliability,
strength, capacity, adequacy or economic feasibility.
Ouali&ing Facility Stahrs - Seller orurr-o that the Facility is a.1Quafirying Facility," as that term is
used and defined in l8 CFR 292.201et soq. After initial qualification, Seller will take such steps as may
be required to maintain the Facility's Qualifying Facility stanrs during the term of this Agreerrent and
Seller's failure to nuintain Qualiffing Facility status will be a Meterial Breach of this Agreeme,nt.
Idaho Power reserves the right to review the Facility's Qualiffing Facility status and associated support
and compliance documents at anytime during the term of this Agreemenl
ARTICLE TV: CONDITIONS TO ACCEPTANCE OF ENERGJ
Prior to the First Energr Date and as a condition of Idaho Power's acceptance of deliveries of enerry
from the Seller under this Agreement, Seller shall:
-5-y$t24rc
4.1.1 Submit proof to Idaho Power that all licenses, permits or approvals necessary for Seller,s
operations have been obtained from applicable federal, state or local authorities, including, but
not limited to, evidence of compliance wi& Subpart B, 18 CFR 2g2.2Ll et seq. as a certified
Quali&ing Facility.
4.1.2 Opinion of Counsel - Submit to Idaho Power an opinion Letter signod by an attorney admitted
to practice and in good standing in the State of Idaho providing an opinion that Seller's licenses,
permits and approvals as set forth in parasaph 4.1.1 above are legalty and validly issue( are
held in the name of the Seller and, based on a reasonable independent review, cormsel is ofthe
opinion that Seller is in substantial compliance with said permits as ofthe date ofthe Opinioo
Letter. The Opinion Letter will be in a form acceptable to Idaho Power and will acknowledge
that the attorney rendering the opinion understands that Idaho Power is relying on said opinion.
Idaho Power's acceptance of the form will not be rmreasonably withheld. The Opinion Letter
will be governed by and shall be interpreted in accordance with tbe legal opinion accord of the
American Bar Association Section of Business Law (1991).
4.1.3 Initial Capacitv Deterndnation - Submit to Idaho Power zuch data as Idaho Powermay
reasonably require to perform the Initial Capacity Determination. Such data will include but not
b€ limited to, Nameplate Capacity, equipment specifications, prime mover data, resource
charactqistics, nonnal and/or average operating design conditions and Station Use data. Upon
receipt of this information" Idaho Power will review the provided data and if necessary, request
additional data to complete the Initial Capacity Detennination within a reasonable time.
4.1.3.1 If the Maximum Capacity qpecified in Appendix B of this Agreement and the
cumulative manufacture Nameplate Capacity rating ofthe individual generation units at
this Facility is less than l0 MW. The Seller shall submit detailed, manufacturer,
verifiable data of the Nameplate Capacif ratings of the actual individual generation
units to be installed at this Facility. Upon verification by Idaho Power that the data
provided establishes the combined Nameplate Capcity rating ofthe generation units to
-6-
5/t9t20t0
5,1
be instolled at this F'acility is less than l0 MW, it will be deemed that the Seller has
satisfied the Initial Capacity Determination for this Facility.
4.1.4 Nameplate Caoacity - Submit to ldaho Power rnanufachrer's and engineering documentation
that establishes the Nameptate Capacity of each individual ge,lreration unit that is included
within this entire Facility. Upon receip of this data, Idaho Power shall review the provided data
and determine if the Nameplate Capacity specified is reasonable based upon the manufacturer's
specified generation ratings for the specific generation units.
4.1.5 Engineerts CEtifications - Submit an executed Engineeds Certification of Design&
Constmction Adequacy and an Engineet's Certification of Operations and Maintenance (O&M)
Policy as described in Commission Order No.21690. These certificates will be in the form
specified in Appendix C but may k modified to the extent necessary to recognize the different
engineering disciplines providing the certificates.
4.t.6 Instnance - Submit written proofto Idaho Power of all insurance required in Article XItr.
4.1.7 Interconnection- hovide written confirmation fiom Idaho Power's delivery business unit that
Seller has satisfied all interconnection requirernents.
4.1.8 Network Resource Desienation* The Seller's Facitty has been designated as a network
resource capable of delivering firm energl up to the amount of the Maximum Capacity.
4.1,9 Wri$en Acceptance - Request and obtain written confimtation fiom Idaho Power that all
conditions to acceptance of energy have been fulfilled. Such written confirrnation shall be
provided within a commercially reasonable time following the Seller's request and will not be
unreasonably wittrheld by Idaho Power.
ARTICLE V: TERM A}.[D OPERATION DATE
Term - Subject to the provisions of paragraph 5.2 below, this Agreement shall become effective on the
date first written and shall continue in full force and effect for a period of 15 (not to qceed 20 year$
Contract Years from the Operation Date.
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5.2 Operation Date - The Operation Date Inay occur only after the Facility has achieved all of the following:
a) Achieved tre First Energy Date.
b) Commission approval of this Agreement in a form acceptable to Idaho Power has been
received.
c) Seller has dernonstated to Idaho Power's satisfaction that the Facility is complae and able
to provide energy in a consisten! rcliable and safe marmer.
d) Seller has requested an Operation Date from Idaho Power in a written format.
e) Seller has received written confinnation from Idaho power of the Operation Date. This
confirmation will not be unreasonably withheld by Idaho power.
5.3 Oleration Date Delay - Seller shall cause the Facility to achieve the Operation Date on or before the
Scheduled Operation Date. Delays in the interconnection and transmission network upgrade study design
and constuctiotr proosss that art not Force Majeure events accepted by both Parties, shall not prevent
Delay Liquidated Damages from being due aud owing as calculated in accordance with this Agreement.
5.3.1 If the Operation Date occurs after the Scheduled Operation Date but on or prior to 90 days
following the Scheduled Operation Date, Seller shall pay Idaho Power Delay Liquidated
Damages calculated at the end of each calendar rnonth after the Scheduled Operation Date as
follows:
5.4
Delay Liquidated pamages are equal to ((Current month's Initial Year Net Energy
Amount as specified in paragraph 6.2.1 divided by the number of days in the current
month) multiplied by the number of days in the Delay Period in th€ current month)
multiplied by the current month's Delay price.
5.3.2 If the Operation Date does not occur within ninety (90) days following the Scheduled Operation
Date the Seller shall pay Idaho Power Delay Liquidated Damages, in addition to those provided
in paragraph 5.3.1, calculated as follows:
Forty five dollars ($45) multiplied by the Maximum Capacity with the Maximum
Capacity being measwed in kW.
If Seller fails to achieve the Opemation Date within ninety (90) days following the Scheduled Operation
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5.5
5.6
5.7
Date, such failure will be a Material Breach and Idaho Power may terminate this Agreement at any time
until the Seller cures the Material Breach. Additional Delay Liquidated Darnages beyond those
calculated in 5.3.1 and 5.3.2 will be calculated and payable using the Delay Liquidated Damage
calculation described in 5.3.1 above for all days exceeding 90 days past the Scheduled Operation Date
until such time as the Seller cures this Material Breach or Idaho Power terminates this Ageement.
Seller shall pay Idaho Power any calculate.d Delay Damages or Delay Liquidated Damages within 7
days of when ldaho Power calculates and presents any Delay Damages or Delay Liquidat€d Damages
billings to the Seller. Seller's failure to pay these damages wirhin the specified time will be a Material
Breach of this Agreernent and Idatro Power shall draw firnds from the Delay Security provided by the
Seller in an amount equal to the calculated Delay Damages or Delay Liquidated Damages.
The Parties agree that the damages Idaho Power would incu due to delay in the Facility achieving the
Operation Date on or before the Scheduled Operation Date would be difficult or impossible to predict
with cenainty, and that the Delay Liquidated Damages af,e an appropriate approximation of such
darnages.
Prior to the Seller executing this Agreement, the Seller shall have agreed to and exeouted a lrtter of
Understanding with ldaho Power that contains at minimum the following requirements:
a) Seller has filed for interconnection and is in compliance with all payments and
requirements of the interconnection process
b) Seller has received and accepted an interconnection feasibility study for this
Facility.
c) Seller has provided all inforrnation required to enable Idaho Power to file an initial
transmission capacity request.
d) Results of the initial transmission capacity request are known and acceptable to the
Seller.
e) Seller acknowledges responsibility for all interconnection costs and any costs
associated with acquiring adequate firm ransmission capacity to enable the project
to be classified as an ldaho Power firm network resource.
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t
5.8
0 If the Facility is located outside of the Idaho Power service territory, in addition to
the above requirements, the Seller must provide evidence that the Seller has
acquired firm hansmission capacity from all required transmitting entities to deliver
the Facility's en€rgy to an acceptable point of delivery on the Idaho power
electrical systern.
Within thirty (30) days of the date of a final non-appealable order as specified in Article )Oil approving
this Agreernent the Seller shall post liquid securiry ("Delay Security") in a form as described in
Appendix D equal to or exgeeding the amount carculared in paragraph s.g.l.
5.8'l Delay Security The greater of forty five ($45) multiplied by the Maximum Capacrry with the
Maximum Capacity being measured in kW or the sum of three month's estirnated reve,lrue.
Where the estimated three months of revenue is the estimated revenue associated with the first
three full months following the estimated Scheduled operation Date, the estimated kWh of
energy production as specified in paragraph 6.2.1 fot those three months multiplied by the All
Hours Energy Price specified in paragraph 7.3 for each of those three months.
5.8.1.1 In the event (a) Seller provides Idaho Power with certification that (l) a generation
interconnection agreement speciSing a schedule that will enable this Facility to achieve
the Operation Date no later than the Scheduled Operation Date has been completed and
the Seller has paid all required interconnection costs or Q) ageneration interconnection
agreement is substantially complete aud all material costs of interconnection have been
identified and agreed upon and the Seller is in compliaace with all terms and
conditions of the generation interconnection agreemen! the Delay Security calculated
in accordance with 5.g.1 will be reduced by ten percent (lv/o).
5.8.1.2 If the Seller has received a reduction in the calculated Delay Security as specified in
paragraph 5'8.1.1 and subsequurtly (l) at Seller's reques! the generation
interconnection agreement spetifid in paragraph 5.8.1.I is revised and as a result the
Facility will not achieve its Operation Date by the Schedule.d Operation Date or (2) if
the Seller does not maintain compliance with the generation interconnection agreernent,
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the full amount of the Delay Security as calculated in paragraph 5.8.1 will be subject to
reinstate,ment and will be due and owing within 5 business days from ttre date Idaho
Power requests reiastatement. Failure to timely reinstate the Delay Security will be a
Material Breach of this Agreement.
5.8.2 Idaho Power shall release any remaining security posted hereunder after all calculated Delay Damages
and/or Delay Liquidated Damages are paid in full to Idaho Power and the earlier of (1) 30 days after the
Operation Date has been achiwed or (2) 60 days after the Agreernent has been terminated.
6.1
ARTICLE VI: PI.]RCHASE AND SALE OF NET ENERGY
Deliverv and Acceptance of Net Energy - Except when either Party's performance is excused as
provided herein, Idaho Porrer will purchase and Seller will sell all of the Net Energy to ldaho Power at
the Point of Delivery. All lnadvertent Energy produced by the Facility will also be delivered by the
Seller to Idaho Power at the Point of Delivery. At no time will the total amount of Net Energy and/or
Inadvertent Energy produced by the Facility and delivered by the Seller to the Point of Delivery exceed
the Maximum Capacity Amount.
Net Energy Amounts - Seller intends to produce and deliver Net Energy in the following monthly
amounts:
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6.2
6.2.1 Initial Year Monthlv Ngt Energv Amounts:
Month
Season I
March
April
May
Season 2
July
August
November
December
Jrne
September
October
January
February
kwh
648,000
648,000
648,ooo
648,000
648,000
648,000
648,000
648,000
648,0m
648,000
648,000
648,000
Season 3
6.2.2 Ongoing Monthly Net Energy Amormts - Seller shall initially provide Idaho Power with one
year of monthly generation estimates (Initial Year Monthly Net Enerry Amormts) and
beginning at the end of month nine and wery three month$ thereafter provide Idaho Power with
an additional three months of forcxard generation estimates beyond those generation estimates
previously providd. This information will be provided to Idaho Power by written notice in
accordance with paragraph 25.1, no later than 5:00 PM of the 5* d"y following the e,nd of the
previous month. If the Seller does not provide the Ongoing Monthly Net Euergy Amounts in a
timely ulalmer, Idaho Power will use the most recent 3 months of the Initial Year Monthly Net
Energy Amounts specified in paragraph 6.2.1 for the next 3 months of monthly Net Energy
amormts.
6.2.3 Seller's Adiustment of Net Eners.v Amouot
6.2.3.1 No later than the Operation Date, by written notice given to Idaho Power in accordance
with paragraph 25.1, the Seller may revise all of the previously provided Initial Year
Monthly Net Energy Amounts.
6.2.3.2 Beginning with the end of the 9th month after the Operation Date and at the end of
every third month ther€after: (l) tk Seller may not revise the immediate next three
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6.2.4
months of previously provided Net Enerry Amounts, (2) but by writen notice given to
Idaho Power in accordance with paragraph 25.1, no later than 5:00 PM of the 5ft day
following the end of the previous month, the Seller may revise all other previously
provided Net Energr Amounts. Failure to provide timely written riotice of changed
amounts will be dee,med to be an election of no change.
Idaho Power AdjusEnent ofNet Enerey Amount - If Idaho Power is excused from accepting the
Seller's Net Energy as specified in paragraph 12.2,1 or if the Seller declares a Suspension of
Energy Deliveries as specified in paragraph 12.3.1 and the Seller's declared Suspension of
Enerry Deliveries is accepted by Idaho Power, the Net Energ5r Amount as specified in
paragraph 6.2 for the specific month in which the reduction or suspension under paragraph
12.2.1 or 12.3.1 occurs will be reduced in accordance with the following:
Where
NEA = Current Month's Net Enerry Amount (Paragraph 6.2)
SGU a.) If Idaho Power is excused from accepting the Seller's Net
Energr as specified in paragraph 12.2.1 this value will be
equal to the percentage of curtailment as specified by
Idatro Power multiplied by the TGU as defined below'
b.) If the Seller declares a Suspension of EnergT Deliveries as
specified in paragraph 12.3.1 this value will be the sum of
the individual generation units size ratings as speified in
Appendix B that are impacted by the circumstances
causing the Seller to declare a Suspersion of Energy
Deliveries.
TGU = Sum of all of the individual ge,nerator ratings of the generation
units at this Facility as qpecified in Appendix B of this
agreernent.
,,err Actual hours the Facility's Net Energy deliveries were eitherrwrr reduced or suspended under pamgraph 12,2.L or 12.3-l
TH = Actual total hotrs in the current month
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Resultine formula beins:
Adiusted
Nei enerry : NEA
Amount ((TGU
x NEA ) x( rH ) )
6.3
7.1
This Adjusted Net Energy Amount will be used in applicable Surplus Energr calculations for only the
specific nronth in which Idaho Power was excused from accepting the Seller's Net Energy or the Seller
declared a Suspension of Enerry.
Unless excused by an event of Force Majeure, Seller's failure to deliver Net Eoergr in any Contract
Year in an amount equal to at least ten percent (lW/o\ of the sum of the Initial year Net Energy
Amounts as spified in paragraph 6.2 shatl constifirte ao event of default.
ARIICLE VII: PTJRCHASE PRICE AND METHoD oF PAYMENT
Base EnerEy Heavy Ioad Purchase Price - For all Base Energy received during Heavy Load Hours,
Idaho Power will pay the nonlevelized energy price in accordance with Cornnrission Order 307M,
30738 and adjusted in accordance with Commissim Qrder 30415 for Heavy Load Hour Enerry
deliveries with seasonalization factors applied:
Year
24rc
20tL
2An
20t3
20t4
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Season I - (73.50Yo)
luitrykwh
57.98
59.54
61.22
62.62
64.05
65.52
67.10
68.63
70.29
71.91
73.56
75.26
76,99
78.78
80.60
82.47
84.7s
87.10
Season 2 - (l20.WW
Mills/BWh
94.67
97.21
99.95
102.23
tM.57
106.97
109.5s
I12.05
1t4.77
1r7.40
120.10
122.87
t25.70
128.6t
131.59
134.65
138.37
142.21
Season3-(100.0070)
Milts/kWh
78.89
81.01
83.29
85.19
87.t4
89.14
91.29
93.38
95.il
97.83
100.08
102.39
tM.75
107.18
109.66
tt2.2t
l15.31
I 18.51
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2028
2029
2030
2031
89.53
92.A3
94.60
96.69
t46.t7
150.25
154.45
rs7.8s
t2l.8l
125.21
128.71
131.55
7.2 Base Energy Light load Purchase Price - For all Base Energ5r received during Light l.oad Hours, Idaho
Power will pay the nonJevelized enerry price in arcordance with Commission Order 3074,30738 and
adjusfed in accordance with Commission Order 30415 for Light toad Hotn Energy deliveries with
seasonalization factors applied :
Yesr
2010
20ll
2012
2At3
2014
2015
20t6
20t7
2018
2019
2020
2021
2022
2023
2024
202s
2026
2027
2028
2029
2A3A
2031
Season I - (73.50W
Mills/kWh
52.63
54.19
55.87
57.27
58.70
60.t7
61.75
63.28
&.94
66.56
68.21
69.90
7l.G
73.42
75.25
77.12
79.40
81.75
M.l8
86.68
89.25
91.33
Season 2 - Q2A.O0W
Mills/kWh
85.93
88.47
91.2r
93.49
95.83
98.23
100.81
r03.32
106.03
108.66
l11.36
l14.13
116.97
119.88
r22.86
125.91
129.&
133.48
r37.43
141.51
145.71
149.t2
Season3-(100.00%")
MillyLwh
71.61
73.73
76.01
77.9t
79.86
81.86
84.01
86.10
88.36
90.55
92.84
95.11
97.47
99.90
102.38
t0/..93
108.03
ttt.23
114.53
tt7.93
121.43
r24.27
7.3 All Hours Enerry Price - The price to be used in the calculation of the Surplus Energy Price and Delay
Damage Price shall be the non-levelired en€f,gy price in accordance with Commission Order 307M and
30738 with seasonalization factors applied:
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Year
2010
20tt
2012
2013
20t4
2015
20t6
2017
2018
2019
2020
2021
2022
2023
2424
2025
2026
2427
2028
2029
2030
2031
Season l -(73.50o/o\
Mllls/kWF
55.60
57.16
58.84
ffi.24
61.67
63.t4
64.72
ffi.25
67.91
69.53
71.18
72.87
74.6t
76.39
78.22
80.09
82.37
u.72
87.15
89.64
92.22
94.30
Season2 -(l20.0/l-Yo)
Millsn(Wh
90.78
93.32
96.M
98.34
100.68
103.08
105.66
108.17
110.88
113.51
ll6.2t
I18.98
12t.82
124.72
127.7t
t30.76
t34.49
138.32
142.28
t46.36
1s0.56
1s3.97
Season3-(100.00o/o)
Mildkwh
75.65
77.77
80.05
81.9s
83.90
85.90
88.05
90.14
92.4A
94.59
96.M
99.15
101.51
103,94
|M.42
108.97
112.07
1t5.27
I18.57
12t.97
125.47
128.31
7.4
7.5
Sumlus Enerey Price - For all Surplus Enerry, Idaho Power shall pay to the Seller the current month's
Idarket Energy Reference Price or the All Hours Enerry Price spocified in paragraph 7.3, whichever is
lower.
Inadvertent Enerqy-
7.5.1 Inadvertent Enerry is electric energy produced by the Facility, expressed in kwh, which the
Seller delivers to ldaho Power at the Point of Delivery that exceeds 10,000 krrV multiplied
by the hours in the specific month in which the energy was delivered. (For example
January contains 744 hours. 744 horus times 10,000 kW =7,440,000 kWh. Energy
delivered in January in excess of 7,440,000 kWh in this exaurple would be Inadvertent
Energy.)
7.5.2 Although Seller intends to design and operate the Facility to generate no more than
l0 average MW and therefore does not intend to generate Inadvertent Enerryo Idaho Power
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7.6
7.7
will accep Inadvertent Energr that does not exceed the Maximum Capacrty Amount but
will not purchase orpay for Inadvertent Energy.
Payment Due Ddg - Undisputed Energy pqrments, less any payments due to Idaho Power will be
disbursed to the Seller within 30 days of the date which ldaho Power rcceives and accepts the
documentation of the monthly Net Elergy actually delivered to Idaho Power as specified in
AppeidixA.
Continuine Jurisdiction of the Commission.This Agreernent is a special confact and, as sucltr the rates,
tenns and conditions contained in this Ageement will be construed in amordance with Idaho Poyer
Comnany v. Idaho Public Utilities Commission flnd Afton Ener$r. Inc., 107 Idaho 781, 693 P.zd 427
(1984), Idaho Power Compan), v. Idaho Public Utilities Commissioa 107 ldaho 1122, 695 P.zd I 261
(1985), Afton Energy. Inc. v. Idaho Power CoJ$pany, I I I Idaho 925,729P.2d4{Jf0_ (1986), Section 210
of the Public Utilities Regulatory Policies Act of 1978 and 18 CFR $292.303-308
ARTICLE VItr: ENVIRONMENTAL ATTRIBUTES
8.1 Seller retains ownership under this Agreememt of Green Tags and Renewable Energy Certificates
(RECs), or the equivale,nt e,nvironmental attributes, directly associated with the production of energy
from the Selleds Facility sold to Idaho Power.
ARTICLE D( FACILITY AND INTERCONNECTION
9.1 Design gf Faciliw - Seller will design, construct, instalt, own, operate and maintain the Facility and any
Seller-owned Interconnection Facilities so as to allow safe and reliable generation and delivery of Net
Energy and lnadvertent Energy to the Idaho Power Point of Delivery for the full term of the Agreement.
AR,TICLE X: METERING AND TELEMETRY
l0.l Meterine - Idaho Power shall, for the account of Sellq provide, install, and rnaintain Metering
Equipment to be located at a mutually ageed upon location to record and measure power flows to Idaho
Power in accordance with this Agreement and ScheduleT2. T\e Me{ering Equipment will be at the
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10.2
location and the type required to measure, rrcord and report the Facility's Net Enerry, Station Use,
Inadvertent Enerry and maximum energy deliveries (krII) at the Point of Delivery in a rnanner to
provide Idaho Power adequate energy measurement data to administer this Ageement and to integrate
this Facility's energy production into the Idaho power electrical system.
Telemety- Idaho Power will install, operate and maintain at Selleds expense communications and
telemetry equipment which will be capable of providing Idaho Power with continuous instantaneous
telemetry of Seller's Net Energy and Inadvertent Energy produced and delivered to the ldaho power
Point of Delivery to Idaho Powet's Designated Dispatch Facility.
ARfiCLE XI - RECORDS
1l.l Maiutenance of Records - Seller shall maintain at the Facility or such other location mutually acceptable
to the Parties adequate total generation, Net Enerry, Station Use, Inadvertent Enerry and nu:rimum
generation ftw) records in a form and conteot acceptable to Idaho power.
ll.2 trnspection - Either Party, after reasonable notice to the other Parry, shall have the righl dgring normal
business hours, to inspect and audit any or all generation, Net Energy, Station Use, lnadvertent Energy
and maximum generation ftw) records pertaining to the selle/s Facility.
ARTICLEXI} OPERATIONS
12 .l Communications - Idalro Power and the Seller sball maintain appropriate operating cornmunications
through Idaho Power's Designated Dispatch Facility in accordance with Appendix A of this Agreerrent.
12 .2 Energy Accepance-
12.2.1 Idaho Power shall be excused from accepting and paying for Net Enerry or accepting
Inadvertent Energy which would have otherwise been produced by the Facility and delivered by
the Seller to the Point of Delivery, if it is prevented from doing so by an event of Fo,rce
lvlajeure, or temporary disconnection of the Facility in accordance with Schedule 72. If, for
reasons other than an event of Force Majeure, a temporary disconnection under Schedule 72
exceeds twenty (20) days, beginning with the twenty'first day of such intemrption, curtailment
- 18-
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or reduction, Seller will be deemed to be delivering Net Energy at a rate equivalelrt to the pro
rata daily average of the amotmts specified for the applicable month in paragraph 6.2. Idaho
Power will notiff Seller when the intemrption, curtaiknent or reduction is terminated.
12.2.2 If, in the reasonable opinion of Idaho Power, Selleds operation of the Facility or Interconnection
Facilities is rrnsafe or may otherwise adversely affect Idaho Powet's equiprrent, personnel or
service to its customers, Idaho Power may temporarily disconnect the Facility from Idaho
Power's transmissiorn/distribution system as specified within Schedule 72 or take such other
reasonable steps as ldaho Power deems appropriate.
12.2.3 Under no circumstances will the Seller deliver Net Energy and/or Inadvertent Engrgy from the
Facility to the Point of Delivery in an arnount that e(ceeds the Maximum Capacity Amount.
Seller's failgre to ii*it deliveries to the Maximum Capaclty Amount will be a Material Breach
ofthis Agreement.
12.2,4 lt Idaho Power is unable to accept the energy from this Facility and is not excused from
accepting the Facility's energy, Idaho Power's damages shall be limited to only the value of the
estimated energy that Idaho Power was unable to accepL Idaho Power will have no
responsibility to pay for any other costs, lost revenue or consequential damages the Facility may
incur.
12.3 Seller Declared S.uspension of Enerry Deliveries
12.3,1 If the Seller's Facility experiences a forced outage due to equipment failure which is not caused
by an event of Force Majeure or by neglect, disrepair or lack of adequate preventative
maintenance of the Seller's Facility, Seller may, after giving notice as provided in paragraph
12.3.2 below, terrporarily zuspend all deliveries of Net Enerry to Idaho Power from the Facility
or from individual gene,ration unit(s) within the Facility impacted by the forced outage for a
period of not less than 48 hours to correct the forced outage condition ('Declared Suspeosion of
Energy Deliveries"). The Seller's Declared Suspension of Energy Deliveries will begin at the
start of the next full hour following the Seller's telephone notification as specified in paragraph
12.3.2 and will continue for the time as specified (not less than 48 hours) in the written
- 19- s^gr2oro
notification provided by the Seller. In the month(s) in which ttre Declared Suspension of Energlr
occurred the Net Energy Amount will be adjusted as specified in paragraph 6.2.4.
12.3.2 If the Seller desires to initiate a Declared Suspension of Enerry Deliveries as provided in
paragraph 12.3.1, the Seller will notifi the Designated Dispatch Facility by telephone. The
beginning hour of the Declaled Suspension of Energr Deliveries will be at the earliest the nent
full hour after making telephone contact with Idaho Power. The Seller will, within 24 hours
after the telephone contact, provide Idaho Power a unitten notice in accordarce with XXIV that
will contain the beginning hour md duration of the Declared Suspension of Energy Deliveries
and a desoiption of the conditions that caused the Seller to iniJiate a Declared Suspeasion of
Energy Deliveries. Idaho Power will review the documentation provided by the Seller to
dete,l:nine Idaho Power's acceptance of the described forced outage as qualiffing for a Declared
Suspension of Energy Deliveries as specifiod in paragraph 12.3.1. Idaho Power's acceptance of
the Seller's forced outage as an acceptable forced outage will be based upoa the clear
documentation plovided by the Seller that the forced outage is not due do an event of Force
Majeure or by neglec! disrepair or lack of adequate preventative maintemance of the Seller's
Facility.
12.4 Scheduled Maintenance - On or before January 31 of each calendar year, Seller shall submit a written
proposed maintenance schedule of significant Facility maintenance for that calendar year and Idaho
Power and Sells shall mutually agee as to the acceptability of the proposed schedule. The Parties
determination as to the acceptability of the Seller's timetable for scheduled maintenance will take into
consideration Prudent Electical Practices, Idaho Power system requirements and the Seller's preferred
schedule. Neither Party shall unreasonably withhold acceptance of the proposed maintenance schedule.
12.5 Maintenance Coordipation - The Seller and ld"ho Power shall, to the extent practical, coordinate their
respective line and Facility rnaintenance schedules such that they occur simultaneously.
12.6 Contact Prior to Curtailment - Idaho Power will make a reasonable attenrpt to contact the Seller prior to
exercising its rights to intemrpt interconnection or curtail deliveries from the Seller's Faciliry. Seller
understands that in the case of emergency circumstances, real time operations of the electical system,'2o- il$,oro
and/or unplanned events ldaho Power may not be able to provide notice to the Seller prior to
internrption, curtailment, or reduction of electrical energy deliveries to Idaho Power.
ARTICLE XItr: INDEMNIFICATION AND INSI']RANCE
l3.l Indemnification - Each Party shall agree to hold harmless and to indemnifi the other Party, its officers,
agents, affiliates, subsidiaries, parent company and employees against all loss, damage, expense and
liability to thiid p€rsons for rnjlry to or death of person or u{ury to property, proximately caused by the
' indefirniSing Party's (a) construction, ownership, operation or rnaintenance of, or by faihue of, any of
such Party's works or facilities used in connection with this Agreement or (b) negligent or intentional
acts, errors or omissions. The indemniffing Party shall, on the other Party?s request, defend any zuit
assoting a claim covered by this indemnity. The indemnifring Party shall pay all documented costs,
including reasonable attomey fees that may be incurred by the other Party in enforring this indeumity.
13.2 lnsurance - During the term of this Agreement, Seller shall secure and continuously carry the following
insurance ooverage:
13.2.t Comprehensive Gefleral Liability Insurance for both bodily injury and property damage with
limits equal to $1,000,000, each oocurrence, combined single limit. The deductible for such
insurance shall be consistent with current Insurance lndustry Utility practices for similar
property.
13.2.2 T\eabove insurance coverage shall be placed with an insurtnce company with an A.M. Best
, Coryany rating of A- or better and shall include:
(a) An endorsernent naming Idaho Power as an additional insued and loss payee as
applicable; and
(b) A provision stating that such policy shall not be canceled or the limits of liability
reduced without sixty (60) days' prior written notice to ldaho Power.
13.3 Seller to Provide Certificate- of lnsurance - As required in paragfaph 4.1.5 herein and aonually
thereafter, Sellsr shall furnish Idatro Power a certificate of insurance, together with the endorsements
required therein, evidencing the coverage as set forth above.
'21' sngnorc
13.4 Seller to Notift Idaho Power of tnss of Coveraee - If the insuraoce coverage required by paragraph
13.2 shall lapse for any reasoq Seller will immediately notif Idaho Power in writing. The notice will
advise Idaho Power of the specific reason for the lapse and the steps Seller is taking to reinstate the
coverage. Failure to provide this notice and to expeditiously reinsate or replace the coverage will
constitute a Material Breach of this Agreement.
ARTICLE XIV: FORCE MAIEURE
14.1 As used in this Agreemenl "Force Majeure" or "an event of Force Majeure" meaos any cause beyond
the control of the Seller or of Idaho Power which, despite the exercise of due diligence, such Party is
unable to prevent or overoome. Force Majeure includes, but is not limited to, acts of God, fire, flood,
storms, wars, hostilities, civil strife, stikes and other labor disturbances, earthquakes, fitts, fightning,
epidernics, sabotage, or changes in law or regulation occurring after the effective date, which, by the
exercise ofreasonable foresight such party could not reasonably have been expected to avoid and by the
exercise of due dirigence, it shall be unable to overcome. If either party is rendered wholly or in part
unable to perform its obligations under this Agreement because of an eveat of Force Majeure, both
Parties shall be excused from whatever performance is affected by the event of Force Majeure, provided
that:
(1) The non-performing Party shall, as soon &s is reasonably possible after the (rccu?ence
of the Force Majeure, gtve the other Party written notice dessribing the particulms of
the occurrence.
(2) The suspe,nsion of performance shall be of no greater scope and of no longer dtuation
than is requfued by the event of Force Majeure.
(3) No obligations of either Party which arose before the occurrence causing the suspension
of perfomrance and which could and should have been fully performed before such
occurence shall be excused as a rezult of such occureace.
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ARTICLE.XV: LIABI-ITY: DEDICATION
15.l Limitation of Liability. Nothing in this Agreement shall be construed to cr,eate any duty to, any
standsrd of care with reference to, or any liability to any person not a Party to this Agreement. Neither
party shall be liable to the other for any indirec! special, consequential, nor punitive darnages, except as
expressly authorized by this Agreement. Consequential daurages will include, but not be limited to, the
value of renewable energy certificates an4 if the Facility is fueled by gas produced by an anaerobic
digester system, any diminution or loss of anaerobic activity due to the inability of ldaho Power to
accept energy from the Facility.
15.2 Dedic+tiou. No undertaking by one Party to the other under any provision of this Agreeme,nt shall
constitute the dedication of that Party's system or any portion thereof to the Parly or the public or affect
the status of Idaho Power as an independent public utility corporation or Seller as an independent
individual or entity. \
ARTICLE XVL SEVERAL OBLIGATIONS
16.l Excep where specifically stated in this Agreement to be otherwise, the duties, obligations and liabilities
of the Prties are iutended to be several and not joint or collective. Nothing contained in this Agreement
shall ever be consfued to create an association, tnrst, partnership or joint v€Nlture or impose a fust or
partnership duty, obligation or liability ol or with regard to either Parly. Each Party shall be
individually and severally liable for its own obliptions under this Agreement.
ARTICLE XVTT WAIVER
17.l Any waiver at any time by ei&er Party of its rights with respe*t to a default under this Agreement or
with respect to any other matters arising in comaection with this Agreement shall not be deemed a '
waiver with respect to any subsequent default or other matter.
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ARTICTE XVIU: CHOICE OF LAWS AT.ID VENIJE.
l8.l ffis Agreement shall be constnred and interpreted in accordance with the laws of the State of ldaho
without reference to is ohoice of law provisions.
18.2 Venue for any litigation arising out of or related to this Agrecment will lie in the Disfict Court of the
Fourth Judicial District of Idaho in and for the County of Ada.
l9.l Disoutes - All disputes related to or arising under this Agleement, including but not limited to, the
interpretation of the terms and conditions of this Agreemenf will be submitted to the Commission for
resolution.
19.2 Notice of Default
lg.2.l Defaults. If either Party fails to perform aoy of the terms or conditions of this Agremrent
(an *event of default'), the nondefaulting Party shall cause notice in writing to be given to
the defaulting Party, specifring the mnnner in which such default occurrpd. If the defaulting
Party shall fail to cure such default within the sixty (60) days after service of such notice, or
if the defaulting Party reasonably demonstrates to the other Party that the default can be
cured within a commercially reasonable time but not within such sixty (60) day period and
then fails to diligently pursue such cure, then, the nondefaulting Party may, at its option,
terminate this Agreement and/orpursue its legal or equiable remedies.
19.2.2 Material Breaches - The notice and cure provisions in paragraph 19.2.1 do not apply to
defaults identified in this Agreement as Material Breaches. Material Breaches musr be cured
as expeditiously as possible following occun€nce of the breach.
19.3 Security for Performance - Prior to the Operation Date and theneafter for the full term of this
Agreement, Seller will provide Idaho power with the following:
19.3.1 Insuance - Evidence of compliance with the provisions of paragraph 13.2. If Seller fails to
comply, such failure will be a lvlaterial Breach and may onl], be curcd by Seller supplying
evidence that the required insurance coverage has been replaced or reinstated;
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19.3.2 Eneineer's Ce4ificadons - Every three (3) years after the Operation Date, Seller will sttpply
Idaho Power with a Certification of Ongoing Operations and Maintenance (O&lvf) from a
Registered Professional Fngineer lieensed in the State of ldaho, which Certification of
Ongoing O & M shall be in the form specified in Appendix C. Seller's failure !o supply the
required certificate will be an event of default. Such a default may only be cured by Seller
providing the required certificate; and
19.3.3 Licenses and Permits - During the full term of this Agreement, Seller shall maintain
compliance with all psrmits and licenses described in paragraph 4.1.1 of this Agreement' ln
addition, Seller will supply Idaho Power with copies of any new or additional permits or
licenses. At least every fifth Contract Year, Seller will update the documentation described
in Paragraph 4-1.1. If at any time Seller fails to maintain compliance with tbe permits and
licenses described in paragraph 4.1.1 or to provide the documenation required by this
paragraph, such failure wiU be an event of default and may onlv be cured by Seller
submitting to Idaho Power evidence of compliance frorr the permitting agency.
ARTICLE )O(: GOVERNMENTAL AUTHORIZATION
2O.l This Agreement is subject to *re jurisdiction of those govemmental agencies having conhol over either
Party of this Agreement.
2t.t
ARTICI,E XXL COMMISSION ORDER
This Agreement shall become finally sffective upon the Commission's approval of all terms and
provisions hereof without change or condition and declaration that all payments to be made to Seller
hereunder shall be allowed as prudently incurred expenses for ratemaking purposes.
22.1
ARTTCLE X)il: SUCCESSORS AND ASSIGNS
This Agreement and all of the terms and provisions hereof shall be binding upon and inure to the benefit
of the respective successon and assigrs of the Parties hereto, except that no assignmelrt hereof by either
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Party shall becorne effective without the nritten consont of both Parties being first obtained. Such
consent shall not be unreasonably withheld. Notwithstanding the foregoing any party which Idaho
Power may consolidate, or into which it rnay merge, or to which it may convey or hansfer substantially
all of its electic utility assets, shall automatically, without firther act, and without need of consent or
approval by the Seller, succeed to all of Idaho Power's rights, obligations and interests under this
Agreement. This article shall not prevent a financing entity with recorded or secured rights from
exercising all rights and rernedies available to it under law or cotrtact. Idnho Power shall have the right
to be notified by the financing entity that it is exercising such rights or remedies.
ARTICLE X)fiI: MODIFICATION
23.1 No modification to this Agreernent shall be valid unless it is in uniting and signed by both Parties and
subsequently approved by the Commission.
ARTICLE )O(V: TAXES
24.1 Each Party shall pay before detinquency all taxes and other governm€, rtal charges whi-ch, if failed to be
paid when due, could result in a lien upon the Facility or the Interconnection Facilities.
ARTICLE XXV: NOTICES
25.1 All written notices under this Agreement shall be directed as follows and shall be considered
delivered when fa:red, e-mailed and confirrred with de,posit in the U.S. Mail, first-class,
postage prepaid, as follows:
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To Seller:
Orieiml document to:
LauaKnothe, PE
NewEnergyTwo, LLC
8720 Vic Lane
Middleton ID 836,14
Telephone:Cell: (208) 890{783FAX: [phone]
E-mail: latra@thenewenerg/company.oom
To Idaho Power:
Original document to:
Vice President, Power Supply
Idaho Power Company
P0 Box 70
Boise, Idaho 83707
Email : [e-mail]
Cooy of document to:
Cogeneration and Sraall Power Production
Idaho Power Company
PO Box 70
Boise, Idaho 83707
E-mail: [e-mail]
Either Party may change the contact person and/or address information listed abovg by providing written notice
from an authorized person representing the Party.
ARTICLE XXVI: ADDITIONAL TERIT,IS AN.D CONDITIONS
26.1 This Agreement includes the following appendices, which are attached hereto and included by
refere,lrce:
Appendix A
Appendix B
Appendix C
Appendix D
Generation Scheduling and Reporting
Facility and Point of Delivery
Engineer's Certifi cations
Forms of Liquid Security
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ARTICLE XXVII: SEVERABILITY
27.1 The invalidity or unenforceability of any term or provision of this Agreerre,nt shall not affect the
validity or enforceability of any other terms or provisions and this Agreement shall be constnred in all
other respocts as if the invalid or unenforceable term or provision were omitted,
ARTICLE XXVIII: COI.JNTERPARTS
28.1 lhis Agreement may be executed in two or rxlre counterparts, each of which shall be deemed an
original but all of whichtogether shall constitute one and the same insfurrent.
ARTICLE X)O(: ENTIRE AGREEMENT
29.1 This Agreement constitutes the ehtire Agreonent ofthe Parties eoncerning the subject matter hereof and
supersedes all prior or cont€Nnporan@us oral or written agreements between the Parties concerning the
subject matter hereof.
IN WTTNESS WHEREOF, The Parties hereto have caused this Agreement to be executed in
their respective firnes on the dates set forth below:
Idaho PowerCompany New Enerry Two, LLC
By By
Lisa A Grow
Sr, Vice President, Power Supply
lalralfuothe, PE
Dated .6.2t+.t Dated g l, I t0
"Idaho Power"*S€ller"
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APPENDD(A
A -I MONTHLY POWER PRODUCTION AND SWITCHING REPORT
At the end of each month the following required documentation will be submitted to
Idaho PowerCompany
Athr: Cogeneration and Small Power Production
POBox 70
Boise, Idaho 83707
The meter readings required on this report will be the readings on the Idaho PowerMeter Equipment measruing
the Facility's total energ5l production and Station Usage delivered to Idaho Power and the rnaximum generated
energy (kW) as recorded on the Metering Equipment and/or any other required energy measurenrents to
adequately administer this Agreement. This document shall be the doctrment to e,nable Idaho Power to begin the
enerry payment calculation and payment process. The meter readings on this report shall not be used to
calculate the actual payment, but instead will be a check of the automated meter reading inforrration that will be
gathered as described in iteqr A-2 below:
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Idaho Power Company
Cogeneration rnd Small Power producfion
MONTHLY POWER PRODUCfiON AIID SWITCHING REPORT
Month Yeer
Profect Name
Address
Ctty
Project Number:
Phone Number:
Strte 7tp
tr'ecifity
Outont
Strtlon
Urape
Stetion
Usese
Metercd
MulmunGtnondon
kw
McterNumber:
End of Month klVh Meter Reedlng:
Begtnnlng of Month kUVh Meter:
Difrerence:
Times Metcr Constent:
kWh forthcMonth:
MeteredDemand:
Net Generetion
Brcakeropenlng Record Breaker Cloolng Record
Detc Ttme Meter *Rcason Drte Tlme Meter
* Brerker Ooenlns Resson Codes
I Lack of Adequate Prime Mover2 Forced Outege of Feclllty3 Dkturbance of IPCo System
4 Scbeduhd Melntenance5 Tecflng of Protection Systems6 Ceusc Unknown7 Other@xplein)
I hereby cerdfy that the ebove meter reldings are
true and correct as of Midnlght on tte lart dey of the
above montt end thet the swftching reord ls eccuretc
and comple6e es requircd by the X'irm Energr Sales
Agreement to which I am a Parfir.
Slgnaturr
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A-2 AUTOMATED METER READING COLLECTION PROCESS
Monthly, Idaho Power will use the provided Metering and Telerretry equipment and processes to collect the
meterreading information from the Idaho Power provided Metering Equipnnentthat measures the Net Enerry
and energy delivered to supply Station Use for the Facility recorded at 12:00 AM (Midnigh$ of the last day of
the month..
The meter information collected will include but not be limitod to energy production, Station Use, the maxitrrum
generated power (kW) and any other required energy measurements to adequately administer this Agreernent.
A.3 ROUTINE REPORTING
Once the Facility has achieved its Operation Date and has operated in a reliable and consistent rnalm€r
for a reasonable period of time, the Parties may mutuall], agree to modi8, this Routine Reporting
requirement.
Idaho Power Contact lnformation
Daily Energy Production R€porting
Call daily by 10 a.m., 1-800-3564328 or l-000635-1093 and leave the following information:
o Project Identification - ProjectName and ProjectNumbero Current Meter Readingo Estimated Generation for ttre current dayo Estimated Generation for the next day
Planned and Unplanned Project outages
Call l-800-345-1319 and leave the following information:
o Project Identifisation - Project Name and hojectNumber
o Approximate time outage occunpdo Estimated day and time of project coming back online
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Seller' s Cont4qt Inforqation
24-Hour Proiect Qoerational Contact
Name:
Telephone Number:
Cell Phone:
Jay Kesting
(208\?474ste
Q08lsse424l-
Project On-sirc Conact information
Name: Kurt Standley
Telephone Number: [phone]
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APPENDD( B
FACILITY A}ID POINT OF DELTVERY
Project Name: Swager Farms
Project Number: 3 1 61 61 30
B.I DESCRIPTIONOFFACILITY
(Mtut include the Nameplate Capacity rathg and ltAR cqabilig ftoth leding and laggild of all generation
units to be incfuded in the Facility.)
The facility consists of an anaerobic digester, gen sets and waste handling equipment. The total
nameplate capacity of the three generators is 20ffi kW.
Yar Capability (Both lead@ and laging)/ Leadine is .9S Iagging is .8
B-2 LOCATION OF FACIUTY
Near: Buhl,ID
Sections: -2lTownship: JQS- Range: l5ECloverOuadrangle- County: TwinFalls_ ID.
Description of Interconnection Iocation: Near 1707 E 3800 N. Buhl. ID 83316
Nearest Idaho Power Substation: Clover Substation
B-3 SCHEDT'LED FIRST ENERGY AND OPERATION DATE
Seller has selected September 1, 2011 as the Scheduld First Energr Date.
Seller has selected &ober l. 2012 as the Scheduled Operation Date.
In making these selections, Seller recognizes that adequate testing of the Facility and coryletion of alt
requirements in paragraph 5.2 of this Agreemeirt must be corryIeted prior to the project being gmnted
anOperation Date.
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B-4 MAXIMT]M CAPACITY AMOUNT:
This value will be 2- MW which is consistent with the value provided by the Seller to Idaho Power in
accordance with Schedule 72. This value is the maximum energy (M!V) that potentially could be
delivered by the Seller's Facility to the Idalro Power electrical system at any moment in time.
8.5 POINT OF DELWERY
'?oint of Delivery''means, unless othernise qgred by both Parties, the point of whene the Sellers
Facility's enerry is delivered to the Idaho Power etectrical systemo. Schodule T2wrlldetermine the
specific Point of Delivery forthis Facility. The Point of Delivery id€xilified by Schedule T2wrllbecome
an integral part ofthis Agree,ment.
B{ LOSSES
If the Idatro Power Metering equipment is capable of measuring the exact energy deliveries by the Seller
to the Idaho Power electrical syst€m at the Point of Delivery, no [.osses will be calculated for this
Facility. If the Idaho Power Metering is rmable to moasure the exact errc,tgy deliveries by the Seller to
the Idaho Power elecnical system at the Point of Delivery, a Losses calculation will be established to
measure the energy losses ftWh) beweeir the Seller's Facility and the Idaho Power Point of Delivery.
This loss calculation will be initially se/.. at 2o/o of the kWh energy production recorded on the Facility
generation metering equipment. At such time as Seller provides ldaho Power with the etectricat
equipment spocifications (transformer loss spocifications, conductor sizes, etc) of all of the electrical
equipment bstw@l the Facility and the Idaho Power elec'trical system, Idatro Power will configure a
rwised loss calculation formula to be agreed to by both parties and used to calculate the kWh Losses for
the rernaining term of the Agpeement. If at any time during the terrr of this Agr€ement, Idaho Power
determines that the loss calculation does not correctly reflect the actual kWh losses attributed to thc
electrical equipmcnt between the Facility and the Idaho Power elechical systein, Idaho Power rnay
adjust the calculation and retroactively adjust the prwious months kWh loss calculations.
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B-7 METERING A}ID TELEMETRY
Schedule 72 will detennine the specific metering and telemary requirements for this Facility. At the
minimum the Metering Equipment and Teleinetry equipmeirt must be able to provide and record hourly
€n€rgy deliveries to the Point of Delivery and any other energy measurernents requird to administer
ttris fureement. These specifications will include but not be limited to equipmeirt specifications,
oquipmmt locatioq ldaho Power provided equipment, Seller provided equipment, and all costs
associatd with the equipment, design and installation of the Idaho Power providod equipment. Seller
will arrange for and make available at Selleds cost communication circuit(s) compatible with Idatro
Power's comrnunications equipment and dedicated to Idaho Poweds use terminating at the Idaho Power
facilities capable of providing Idatro Power with continuous instantanous infonnation on the Facilities
eneryy production. Idaho Power provided equipmeirt will be owned and maintained by Idaho Power,
with tdal cost of purchasq insallation, operatiorl and maintenance, including administrative cost to be
reimbursed to Idaho Power by the Seller. Palment of these costs will be in accordance with Schedule
72 afi the total metering cost will be included in the calculation of the Monthly Operation and
Maintenance Charges specified in Schedule 72.
B-8 NETWORKRESOI.'RCEDESIGNATION
Idaho Power cannot accept or pay for ge,neration fiom this Facility until a Network Resource
Designation (NRD") ap'plication has been accepted by Idaho Power's delivery business unit. Federal
Energy Regulatory Commission ("FERC') Rules require Idaho Power to pr€par€ and submit the NRD.
Because much of the information Idaho Power neods to propare the NRD is specific to the Seller's
Facility, Idatro Power's ability to file the NRD in a timely rumner is contingent upon timely receipt of
the required information from the Seller. Prior to Idaho Power begiming the process to enable Idaho
Power to submit a request for NRD status for this Facility, the Seller shall have completed all
require,ments as specified in Paragraph 5.7 of this Agree,rnent. Seller'o feilure to provlde complete
and accurate information ln a timdy mtnner can eignificanfly lmpact Ideho Power's abllity and
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ort to tttein the I\IRD deeignrdon for the Seller'r Facility and the $eller rhrll beer the cocl5 of
any of there delayr thet ere r rerult of any ac{ion or inaction by the seller.
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APPENDD(C
ENGIMER'S CMTMICATION
OF
OPERATIONS & MAINTENANCE POUCY
The undersigned , on behalf of himself and
hereinaft€r collectively referred to as "Engineer," heireby states and certifies to the Seller as follows:
L That Engineer is a Licensed Professional Engineer in good standing in the Sate of Idaho.
2. That Engineer has reviewed the Enerry Sales Agreeurelrt, hereinafter 'rAgreement,' between Idalro
PowerasBuyer, and as Seller, dated
3. That the cogeneration or small pou/€r production project which is the subject of the Agreement and this
Staternent is ideirtified as IPCo Facility No.and is hereina$er referred to as the "Project.n
4. That the Project, which is commonly known as the Project, is located in
Section _Township_Range BoiseMoidian,Courty,Idaho.
5. That Engineer recognizes that the Agreement provides for the hoject to firnish elecfical enerry to
Idalro Power for a _ year period.
6. That Engineer has substantial experieirce in the desigrr, construction and opcation of electric power
plants of the sametype as this Pnoject.
7. That Engineer has no wonomic relatioaship to the Design Engineer of this Project.
8. That Engineer has reviewed and/or supervised the review of the Policy for Operation and Maintenmce
("O&M") for this Project and it is his professional opinion that, provided said Project has been designd and
built to appropriate standards, 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 a fifteen (15) year poiod.
9. That Engineer recognizes that ldaho Power, in accordance with paragraph5.2 of the Agreement, is
relymg on Engineer's representations and opinions contained in this Staternent.
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10. Th* Enginea ocrtifies tbd thc above statrents are cgrylete, tuc and amrate io tho best of his
knonlodga and thcreforc sds hi8 h.nd ad s€al b€low.
By
(P-8. Stary)
Datc
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APP,EI{DD( C
ENGINEER' S CERTMICATION
OF
ONGOING OPERATIONS A}ID MAINTENA}.ICE
The undersigned on behalf of himself and
hereinafter collectively referred to as "Engineer," her6y states and certifies to
the Seller as follows:
l. That Engineer is a Licensed Professional Engineer in good standing in the Statc of ldaho.
2. That Engineer has reviewed the EneqgSr Sales Agrecment, hereinafter "Agreerneirt," b€twee,n Idaho
Power as Buyer, and _ as Seller, dated _.
3. That the cogeneration or small power production project which is the subjd of the Agreement and this
Statement is identifiod as IPCo Facility No._ and hersinafter referred to as the "Project'.
4. That the Project, which is commoqly known as the Project, is located in
Section _Township_Range .BoiseMeridian, Courfy,Idaho.
5. That Engine€r recognizes that the Agreemelrt provides for the Project to firnrish elecfical e,nergy to
Idaho Power for a fifteeir (15) year period.
6. That Enginer has substantial experieirce in the desigrl construction and operation of electric pow€r
plants of the same q.pe as this hoject.
7. That Engineer has no economic relationship to the Design Enginm of this Projoct.
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8. That Engineer has rnade a physicat inspetion of said Project, its operations and maintenance records
sirrce the last previous c€rtified inspection. It is Engineer's professional opinion, bascd on the Project's
appeararce, that its ongoisg O&M has been substantially in accordance with said O&M Policy; that it is in
reasonably good operating conditiorq and 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 re,maining
years of the Agreement.
g. That Engineer recognizes that Idaho Power, in accodance with paragraph 5.2 of the Agreement, is
relyrng on Engineer's represmtations and opinions contained in this Staternent.
10. That Engine€r certifies that the above statements are complee, tue aod accurate to the best of his
knowledge and therefore sets his hand and seal below.
By
(P.E. Stamp)
Date
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APPENDD( C
ENGINEER'S CERTIFICATION
OF
DESTGN & CONSTRUCTION ADEQUACY
The undersigned on bebalf of himself and
,**"-**-"*
hereinafter collectively referred to as "Engineed" hereby states and certifies to
1. That Engineer is a Lice,nsed Professional Engineer in good standing in the State of Idaho.
2- That Engineer has reviewed the Firm Energy Sales Agreeineof hereinafter "Agr€€f,tr€,nt",
between Idaho Power as Buyer, and Seller, dated ,
3. That the cogeireration or small power production project, which is the subject of the Agreemelrt
and this Statement, is ideirtified as IPCo Facility No _ and is hereinafter referred to as the
uPmjectu.
4. That the Project, which is comrnonly known as the is located in
section
-
Township _ Range Boise Meridi@ _ counU, Idaho.
5. That Engine€r rocognizes that the Agreement provides for the Project to firnish electrical
€nErS/ to Idaho Power for a fifteen (15) year period.
6. That Engineer has substantial experience in the design, constnrction and operation of electic
powerplants of the same tpe as this Project.
7. That Engineer has no economic relationship to the Design Engineer of this Pr,ojtrt and has
made the analysis of the plans and specifications independeirtly.
8. That Engineer has reviewed the engineering design and coostruction of the Project, including
the civil work, electrical work, generating equipmmt, prime mover oonveyanc€ system, Setler ftrnrished
Interconnection Facilities and other hoject facilities and equiprnent.
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9. That the Project has be€q constnrcted in accordance with said plaos and specifications, all
applicable codes and consistelrt with Pnrdent Electrical Practices as that term is described in the Agreeme,nt.
10. That the design and construction of the Project is strch that with reasouable and pnrdent
operation and maintenance practices by Seller, the Project is capable of pcrfomring in accordanoe with thetcrms
of the Agroemat and with Prudent Electrical Practiccs for a _ year period.
I l. That Engineer that Idaho Power, in acpordance with paragraph 5.2 of the Agrem€rt,
in inte,rconnocting the Project with its system, is relying on Engineeds representations and opinions contained in
this Statement.
12. That Engineer certifies that the above statemsils are corylae, tnre and accurate to tlre best of
his knowledge and thoefore sets his haod and seal below.
By
(P.E; Stamp)
Date
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APPENDX D
FORMS OF LIQUID SECTJRITY
The Sellu shall provide Idaho Power with comrnercially reasonable security instruments such as Cash
Escrow Security, Guarantee or Letter of Crpdit as those terms are defined below or other forms of liErid
financial security that would provide readily available cash to Idaho Power to satisff the Delay Security
requiremelrt within this Agreement.
For the pupose of this Appendix D, the t€rm "Credit Requirements" shall mean acceptable financial
creditworthiness of the entity providing the security instnrmeirt in relation to the term of the obligation
in the reasonable judgment of Idaho Power, provided that any guaranteo and/or letter of credit issued by
any other eirtity with a short-term or long-term investment grade credit rating by Standard & Poor's
Corporation or Moody's Investor Senrices, Inc. shall be deemed to have acceptable financial
creditworthiness.
l. Cash Essrow Security - Seller shall deposit funds in an escrow account established by the Seller in
a banking institution acceptable to both Parties cqual to the Dclay Sccurity.
2. Guarantee or Lstter of Credit Security - Seller shall post and maintain in an amount qual
to the Delay Security: (a) a guaranty from a party that satisfies the Credit Requirerrents, in
a form aoceptable to Idaho Power at its discretion, or O) alr.f.;ter of Credit in a form
acceptable to Idalro Power, in favor of ldalro Power. The Letter of Credit will be issued by
a financial institution acc€ptable to both parties.
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5lt9l20l0
Office of thc Secretary
Service Date
July 1,2010
BEF'ORE TIIE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAIIO POWER COMPAI\TT FOR
APPROVAL OF A FIRM ENERGY SALES
AGREEMENT FOR TI{E SALE ANI)
PT'RCHASE OF ELECTRIC ENERGY
BETWEEN IDAHO POWER COMPANTY
AND NrcW EIIERGY TWO, LLC (SWAGER
FARMS)
CASE NO. IPC.E-IO.I1
oRDER NO. 32026
on May 25, 2010, Idaho power company (Idaho power; company) frled an
Application with the Idaho Public Utilities Commission (Commission) requesting approval of a
l5-year Fimr Energy Sales Agreement between Idaho Power and New Energy Two, LLC dated
May 24, 20 1 0 (Agreement).
Under the terms of the Agreement, New Energy will sell and Idatro power purchase
electic e,rlergy generated by the Swager Famrs Dai.y Anaerobic Digester power project
(Faciliry) located near Buhl in Twin Falls County, Idaho. The location of the Facility is more
particularly dessribed as Section 21, Township l0 S, Range 15 E, Clover euadrangle, Twin Falls
County, Idaho. Appendix B-2. New Energy warrants that the Facility is a qualifying facility
(QF) under applicable provisions of the Public Utility Regulatory Policies Act of 1978 (pLJRpA).
n3.2.
The nameplate rating of the Facility is 2 MW. Appendix B-1. The Maximum
Capactty Amount is 2 MW. Appendix 84. Under nomral and/or average conditions, the
Facility will not exceed l0 aMW on a monthly basis. Should the Facility exceed l0 aIVIW on a
monthly basis, Idaho Power will accept the energy (Inadvertent Energy) that does not exceed the
Manimum Capacity Amount; however, the Company will not purchase or pay for the Inadvertent
Energy.,[7.5.
The Agreement contains the non-levelized published avoided cost rates approved in
Order No. 30744 and comports with the terms and conditions of Order Nos. 3073g (SAR non-
fueled cost variables) and 30415 (daily load shape adjustrnent). fl 7.1. New Energyhas selected
a Scheduled Operation Date of October 1, 2A12. Appendix B_3.
oRDERNO.32026
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Idaho Power notes that the purchase rates set forth in the Agreement, Order No'
30744, had on the May 24,2A10, date of contract signing been replaced by the lower rates of
Order No. 30125 approved by the Commission on March 16, 2010, in Case No. GNR-E-10-01.
Idaho power recites that the Commission has previously determined grandfathering eligibility for
(older and higher) published avoided cost rates by requiring (1) a signed power sales agreement
be executed prior to the change in rates; or (2) a meritorious complaint filed with the
Commission demonshating project maturity and tlrat but for the actions of the utility a sales
agreement would have been signed prior to the change in rates. Although not filing a complaint
with the Commission, by signing the Agreement and voluntarily presenting it to the
Commission, Idaho Power has nevertheless concluded that New Energy meets the second test of
the Commission and should be entitled to the rates established by Order No. 30744.
ln determining that New Energy was entitled to grandfathering under the higher rates
of Order No. 30744, the Company concluded that New Energy satisfied the following
grandfathering criteria prior to March 16, 2010:
a. Interconnection and Transmission
i. Filed an interconnection application; and
ii. Received and accepted an interconnection feasibility study report for
the project and paid any requested slrdy deposits (or established credit)
for the next phase of the interconnection process in accordance with
Schedule 72;and
iii. Received confirmation from Idaho Power that transmission capacity is
available for the project and/or received accepted transmission capacity
sfudy results and cost estimates.
b. Purchase Power Agreement
An agreement was materially complete and would have been executed
by both parties prior to March 16, 2010, and except for routine Idaho
Power final processing, an agreement would have been execut€d prior
to March 16,2010.
It is Idaho Power's opinion that the New Energy Facitity meets all of the above-referenced
criteria. The Interconnection and Transmission criteria were met at the time the B6 Facility was
interconnected with Idatro Power to make sales of non-firm energy rmder the Schedule 86
Agreement.
ORDER NO. 32026
1.
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With respect to the Power Purchase Agreement criteria" the Company contends that
New Energy and Idalro Power had resolved all material outstanding contract issues. Both parties
expected the final review to be a relatively shaightforward process. However, in early February,
the Company became aware of some new procedural requirements from the Federal Energy
Regulatory Commission (FERC) that affected the way that the Facility would qualify for a
network resourc,e designation and thereby obtain the hansmission needed to bring the power to
be generated by the Facility from the interconnection to the Company load centers. The new
procedure required some changes to the intemal process at Idatro Power. Idatro Power embarked
upon interpreting the regulations and implementing a process to be in compliance. In Idatro
Power's opinion the Agreement would have been signed by both parties prior to March 16, 2010,
except for the time required by Idatro Power to implement the new internal transmission and
network resource process and, as a result the Facility should qualiry for a contract including the
Order No. 30744 rates. New Energy is current in all its interconnection study payments and so
long as New Energy continues to provide requested information in a timely manner and pay
invoices on time, it appears that the interconnection can be completed in time for New Energy to
achieve its Scheduled Operation Date for the Facility.
ln further support of its request for grandfathering, Idaho Power states that the
Facility Agreement contains the most recent contact terms and conditions, including the
liquidated damages and security provisions previously approved by the Commission in the
contracts for the Arena Drop hydro and the Dry Creek anaerobic digester projects, Order Nos.
31060 and 31034, respectively.
Agreement 1121.1 provides that the New Energy Agreement will not become effective
until the Commission has approved all of the Agreement's terrrs and conditions and declared
that all payr.ents ldaho Power makes to New Energy for purchases of energy from the Facility
will be allowed as prudently incurred expsnses for ratemaking purposes.
On Jure 3, 2010, the Commission issued a Notice of Application and Modified
Procedure in Case No. IPC-E-10-17. The deadline for filing written comments was June 23,
2010. Commission Staffwas the only party to file comments.
3oRDER NO .32026
SnffCorunen*
Staffbelieves that the grandfathering criteria developed and applied by Idaho Power
in this case are fair and reasonable. Based on the facts presented in this case, Staffbelieves that
but for the actions of Idaho Power, the Agreement would have been fully executed prior to
March 16, 2010. Consequently, Staffrecommends approval of all of the Agreernent's terms and
conditions including grandfathered purchase rates (order No. 30744).
COMMISSION FINDINGS
' The Commission has reviewed and considered the filings of record in Case No. IPC-
E-10-17 incftrding the Firrr Energy Sales Agreement between Idaho Power Company and New
Energy Two, LLC (Swager Farms) dated May 24,2OlO and comme,lrts and recommendations of
Commission Staff. The Agreement is for a l5-year term. The nameplate rating of the Swager
Farm Facility is 2 MW.
The Agreement contains the non-levelized published avoided cost rates established by
the Commission in Order No. 307214. On the Mry 24,2010 date of contract signrng the higher
contract rates had been replaced by the lower rates of Order No. 30125 (Case No. GNR-E-10-01)
approved by the Commission on March 16, 2010. We find that the Company has fairly
represented our past grandfiilhering criteria requirements. We firrther find the Company's
approach in this case regarding contract rates to be in concert with the spirit of those prior
grandfathering cases. See A.W. Brown v. Idaho Power,121 Idatro 812, 828 P.2d 841 (1992);
Order No. 29872, Case No. IPC-E-05-22.
In this case, Idaho Power and Staff believe that New Energy is entitled to
grandfathering and the rates of Order No. 30744. Idaho Power represents that all outstanding
contact issues had been resolved prior to March 16,2010, and that but for the internal review
process of the Company a contract would have been signed prior to March 16. Based on the
record establishe.d in this case, we find that New Energy is entitled to the grandfathered rates of
Order No. 30744. As represented and pursuant to contract terms, under normal and/or avenge
conditions the generation from the Swager Farms Facility will not exceed 10 aI{W on a montlily
basis. The Commission finds the Agreement submitted in this case contains acceptable contact
terms. We fiirther find it reasonable to allow payments made under the Agreement as prudently
incured expenses for ratemaking purposes.
oRDERNO.32026 4
CONCLUSIONS OX'LAW
The Idaho Public Utilities Commission has jurisdiction over Idatro Power, an electric
utillty, and the issues raised in this matter pwsuant to the authority and power granted it under
Title 61 of the Idaho Code and the Public Utility Regulatory Policies Act of 1978 (PURPA).
The Commission has authority under PURPA and the implementing regulations of
the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electic
utilities to enter into fixed-term obligations for the purchase of energy from qualified facilities
(QFs) and to implement FERC rules.
ORDER
In consideration of the foregoing and as more particularly described above, IT IS
fmREBY ORDERED and the Commission does hereby approve the May 24,20l0,Firm Energy
Sales Agreement between Idaho Power and New Energy One, LLC for the Swager Farms Dairy
Anaerobic Digester Power Project.
TIilS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See ldaho Code $ 6l-626.
ORDER NO. 32026 5
DONE by Order of the ldatro Public Utilities Commission at Boise, Idatro tn, / {
day of July 2010.
ATTEST:
a
H. SMITH, COMMISSIONER
'-}.--\ '
MACK A. REDFORD, COMMISSIONER
rt^b h*tl'J{ahD. Jew{l
C6mmission Secretary
bIVIPC-E-I0-17 sw2
6ORDERNO.32026